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P.M.V.P. Pappu Reddiar Vs. S.A. Pichu Ayyar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Judge
Reported inAIR1935Mad961; 161Ind.Cas.963
AppellantP.M.V.P. Pappu Reddiar
RespondentS.A. Pichu Ayyar and ors.
Cases ReferredMahbub Ali v. Mahomed Hussain
Excerpt:
transfer of property act (iv of 1662), section 55(2) - sale of property under attachment--covenant to indemnify purchaser--mortgage by purchaser to plaintiff--payment to decree-holder--execution for balance and property brought to sale--plaintiff depositing amount under order xxi, rule 89, civil procedure code (act v of 1908)--suit for damages--liability of mortgagor--remedy of vendor against decree-holder, if available to plaintiff--damages--basis of claim by person injured by breach of contract--nature of--decree-holder's failure to certify satisfaction--whether affords cause of action. - .....the case against defendant no. 9 can be very briefly disposed of. he has not been guilty of any breach of contract. assuming that he was in any sense a party to or cognisant of the arrangement by which defendant no. 1 agreed to receive rs. 4,500 in full satisfaction of his decree, defendant no. 9 has performed his part of the contract. nor do 1 see any baste for a possible claim by defendant no. 9 against defendant no. 1 to which the plaintiff can in any manner claim to be subrogated. defendant no. 9 had not in any manner been damnified by defendant no. 1's execution of his decree, because the property sold to defendant no. 9 has not been brought to sale. so i do not see that there is anything to which the plaintiff can claim to be subrogated, even assuming that any such claim by way.....
Judgment:

Varadachariar, J.

1. This is an appeal by the plaintiff whose suit for damages has been dismissed by the Courts below. The claim for damages was made against several sets of defendants under the following circumstances: The plaintiff became the mortgagee of certain properties in February 1927 under a document Ex. B executed by defendant No. 2 in his favour. That mortgage compromised properties which belonged to defendants Nos. 7 and 8 and had been sold by them to defendant No. 2 on December 17, 1924, under Ex. A. At the time of this sale, these properties were under attachment in O.S. No. 62 of 1923 brought by defendant No. 1 against defendants Nos. 7 and 8. The sale deed Ex. A accordingly makes a specific reference to this pending attachment and contains a covenant that if the vendors do not make satisfactory arrangement for the payment of the decree and the raising of the attachment, they will be liable for any loss caused thereby. With a view to pay off this decree amount the vendors sold certain properties to defendant No. 9 under Ex. C on January 16, 1925. A sum of Rs. 4,500 out of the consideration for this sale was reserved with that vendee for being paid to the decree-holder. It is recited in that sale deed and it has also now been found by both the Courts that defendant No. 1 had agreed to receive this sum of Rs. 4,500 in full satisfaction of his claim under the decree. The amount of Rs. 4,500 was paid in due course by defendant No. 9 to defendant No. 1: but, in spite of the payment, defendant No. 1 proceeded to execute his decree for the balance after deducting this Rs. 4,500, brought the attached properties to sale and purchased them through his clerk in September 1927. As the plaintiff feared that this will seriously impair his security, he deposited the necessary amount in Court under Order XXI, Rule 89, Civil Procedure Code, and had the sale set aside.

2. The plaintiff now claims that this amount must be made good to him either by defendant No. 1 or by defendants Nos. 7 and 8 or by defendant No. 9. Defendant No. 2 or his representative has not been impleaded in this second appeal and I am not therefore concerned with any possible liability that he or his estate may be under. The case against defendant No. 9 can be very briefly disposed of. He has not been guilty of any breach of contract. Assuming that he was in any sense a party to or cognisant of the arrangement by which defendant No. 1 agreed to receive Rs. 4,500 in full satisfaction of his decree, defendant No. 9 has performed his part of the contract. Nor do 1 see any baste for a possible claim by defendant No. 9 against defendant No. 1 to which the plaintiff can in any manner claim to be subrogated. Defendant No. 9 had not in any manner been damnified by defendant No. 1's execution of his decree, because the property sold to defendant No. 9 has not been brought to sale. So I do not see that there is anything to which the plaintiff can claim to be subrogated, even assuming that any such claim by way of subrogation is possible.

3. As regards defendants Nos. 7 and 8, I must observe that the judgments of the Courts below give me very little indication as to how the claim against them was dealt with either by the plaintiff or by the Courts. Whether the plaintiff was more serious or less serious about his claim against defendants Nos.7 and 8 is another matter. The only ground that I can gather from the lower Appellate Court's judgment and justify its dismissal of the suit even against defendants Nos. 7 and 8 is that the plaintiffs' payment was voluntary. I am unable to agree in this view. The sale-deed Ex. A proceeded on the footing that there was a subsisting attachment and defendants Nos. 7 and 8 undertook the responsibility of seeing the attachment raised. Whatever may be the guilt of defendant No. 1 in the matter of the execution proceedings, it was certainly open to defendants Nos. 7 and 8 to apply to the Court in due course to enter up satisfaction under Order XXI, Rule 2, and if they did not care to adopt that course they must take the consequences, so far as their transferees are concerned. I do not understand why the learned District Judge says that the plaintiff merely fancied that he had suffered some injury. If the attachment was subsisting and a sale took place in pursuance of such attachment, it will certainly imperil his security to the extent of the properties sold away in execution. I am therefore of opinion that the plaintiff is by force of Section 55(2), Transfer Of Property Act, entitled to a decree as per the terms of his claim in the plaint against defendants Nos. 7 and 8.

4. Before me, it is the claim against defendant No. 1 that has been pressed very strongly. Mr. Krishnaswami Ayyar who appeared for the appellant does not seriously dispute the position that if defendant No. 1's liability is to be regarded as one for breach of contract, the plaintiff can hardly avail himself of any such cause of action. Under Section 55, Clause 2, Transfer of Property Act, the indemnity which defendant No. 2 had as against defendants Nos. 7 and 8 will no doubt be available to the plaintiff as well, but if defendants Nos. 7 and 8 have a cause of action against defendant No. 1 for damages for breach of the contract not to execute the decree in O.S. No. 62-23, it is not possible to see any basis by which either defendant No. 2 or the plaintiff could claim to enforce that liability. Mr. Krishnaswami Ayyar accordingly argued that defendant No. 1's liability in such circumstances is one in tort and not in contract; and he contended that if it is a liability in tort, anybody in the world who is in some manner affected by such tortious conduct can maintain a claim for damages. I am not prepared to accede to the second part of this proposition in all its generality but as I do not accept even the first part of his argument, I need not dwell at length on the second step. His contention that a decree-holder's liability, when he executes a decree even after receiving satisfaction is one in tort, is based upon an observation in the judgment of Kindersley, J., in Viraraghava Reddi v. Subbakka 5 M 397 : 6 Ind. Jur. 633 , and certain observations of Abdur Rahim and Oldfield, JJ., in Krishna Ayyar v. Svirimuthu Pillai 42 M 338 : 50 Ind. Cas. 584 : A I R 1919 Mad. 424 36 M L J 376 : 9 L W 443 : (1919) M W N 248. I do not think that the observation of Abdur Rahim, J., can be taken as any decision. The learned Judge was merely stating the contents of the judgments in Viraraghava Reddi v. Subbakka 5 M 397 : 6 Ind. Jur. 633 . Oldfield, J., no doubt uses the expression:

That the claim must be regarded as for damages for injury caused by defendant No. 1's failure to certify satisfaction as he ought to have done after recovering the decree amount.

5. But it made no difference in that case whether the claim was one in tort or contract and it would not be fair to the learned Judges to treat that judgment as involving a decision on this point. In Viraraghava Reddi v. Subbakka 5 M 397 : 6 Ind. Jur. 633 , it is only Kindersley, J., who suggests two alternative grounds, viz., either breach of contract of something in the nature of a tort. So far as the other two learned Judges are concerned, they put it either as a cause of action based upon breach of an implied promise to certify the payment to the Court or as one based upon a failure of consideration. Speaking with all respect to the learned Judges who have used language suggesting the contrary, I failed to see how the mere failure to certify would constitute a cause of action. A decree-holder may receive the amount due to him and leave the matter there. No judgment-debtor can complain that because the decree-holder did not certify it gives him a cause of action. Therefore it does not seem to me correct to say that there is a breach of a statutory duty to certify and the omission to discharge that duty furnishes a cause of action. The real cause of action is the subsequent proceedings, in execution. No doubt such proceedings can in a sense be described as 'fraudulent,' but it does not necessarily follow that every fraudulent conduct must sound only in tort. The true basis of the claim for damages by any body injured by the improper execution preceedings can only be as suggested in that judgment of Turner, C.J., and Muthuswami Ayyar, J., that it is a breach of an implied agreement not to execute the decree any further. If that is the correct position, I am of opinion that the present plaintiff cannot possibly have any cause of action as against defendant No. 1.

6. I do not see that the decision in Mahbub Ali v. Mahomed Hussain : AIR1927All710 puts the plaintiff in a better position, though the basis of the claim is there described as an equitable claim rather than a claim for breach of contract. The equity can only arise as a result of the contract and between the parties thereto. There is no such thing as a right in rem giving rise to an action in the nature of an equitable claim in circumstances of this kind. The second appeal therefore fails and it is dismissed with costs as against defendant-respondent No. 1.

7. Defendant No. 9 (respondent No. 4) is reported to have died long ago and no legal representative has been brought on record in his place. The appeal must, therefore, be held to have abated as against him. There will be a decree against defendants Nos. 7 and 8 for the plaint amount with interest at 6 per cent. per annum from date of plaint up to date of payment and costs.


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