Skip to content

Panchanan Pal Vs. Nirode Kumar Biswas and anr. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Case NumberA.F.O.D. No. 218 of 1958
Reported inAIR1962Cal12
ActsCode of Civil Procedure (CPC) , 1908 - Section 35 - Order 41, Rule 2; ;Transfer of Property Act, 1882 - Sections 43, 55(6), 58 and 100; ;Specific Relief Act, 1877 - Section 18; ;Evidence Act, 1872 - Section 115; ;Contract Act, 1872 - Section 19
AppellantPanchanan Pal
RespondentNirode Kumar Biswas and anr.
Appellant AdvocateB.C. Dutt and ;R.L. Sinha, Advs.
Respondent AdvocateManjula Bose, Adv. for Respondent No. 1, ;Niren De and ;S.N. Ghorai, Advs. for Respondent No. 2
DispositionAppeal dismissed
Cases Referred and Church v. Dalton
- p.b. mukharji, j.1. this is an appeal by the plaintiff from the judgment and decree of the learned trial judge dismissing the plaintiff's suit.2. the plaintiff instituted a suit on the 10th september, 1952 against nirode kumar biswas claiming only two reliefs, (1) a declaration that premises no. 1/a, jadu nath sen lane was a charge for the payment of rs. 8,333-5-4 and (2) for a mortgage decree for the same amount under order 34, rule 4 in form 5a in schedule 1 of appendix d of the code of civil procedure. no other relief was sought. it was a plain and simple suit to enforce a charge on immovable property and for a mortgage decree thereupon.3. the plaint was amended twice by the plaintiff. on the 7th january, 1953, there was an order of amendment whereby another transferee pendente lite.....

P.B. Mukharji, J.

1. This is an appeal by the plaintiff from the judgment and decree of the learned trial Judge dismissing the plaintiff's suit.

2. The plaintiff instituted a suit on the 10th September, 1952 against Nirode Kumar Biswas claiming only two reliefs, (1) a declaration that premises No. 1/A, Jadu Nath Sen Lane was a charge for the payment of Rs. 8,333-5-4 and (2) for a mortgage decree for the same amount under Order 34, Rule 4 in Form 5A in Schedule 1 of Appendix D of the Code of Civil Procedure. No other relief was sought. It was a plain and simple suit to enforce a charge on immovable property and for a mortgage decree thereupon.

3. The plaint was amended twice by the plaintiff. On the 7th January, 1953, there was an order of amendment whereby another transferee pendente lite was brought in as a second defendant--Sm. Bimala Bala Sashmal--and it was pleaded in paragraph 6A of the plaint that by a registered conveyance dated the 23rd September, 1952, one Surendra Nath Biswas claiming to be the real purchaser conveyed and the first defendant Nirode Kumar Biswas stated in that conveyance to be a benamdar of Surendra Nath Biswas confirmed the sale of the said, premises to the second defendant. No amendment, however, was sought, in the prayers of the plaint which remained as they were before. The second amendment was made by another order of the Court on the 13th March, 1956 on the application of the plaintiff. By this amendment, the plaintiff introduced the case that he acted on the statements and declaration made in the registered agreement of the 2nd April, 1948 and introduced paragraph 6B of the plaint pleading that the defendants or either of them was estopped from denying that they had respectively purchased the said property with notice of and/or subject to the charge in favour of the plaintiff. Again, no alteration was sought in the prayers of the plaint which remained the same as before for a declaration of charge on the immovable property and for a mortgage decree.

4. At the time when the plaintiff made the application for the second amendment of the plaint, he tried to introduce the case of specific purpose and trust in paragraph 6G of the petition where the amendment proposed was as follows:

'In any event, the defendant No, 1 declared and/or admitted himself to be an express trustee for the specific purpose of paying Rs. 7,500 to the plaintiff. Further, the defendant No. 1 by his conduct inter alia by acting on the said registered conveyance dated the 6th October, 1951 and/or producing the said conveyance as his document of title was and is estopped from denying that defendant No. I was and still is an express trustee as aforesaid and is bound to pay to the plaintiff the said sum of Rs. 7,500.'

This particular amendment as proposed in the petition was disallowed by the learned Judge on the 4th September, 1956. No appeal from the order disallowing this amendment to introduce the case for specific purpose and trust has been filed so that the order has now become final.

5. The plaintiff's case is that by a registered Agreement dated the 2nd April 1948, one Puma Chandra Banerji agreed to sell 1/A, Jadu Nath Sen Lane to the plaintiff free from encumbrances at a sum of Rs. 30,000/- only. The plaintiff pleads in the plaint that pursuant to that agreement and acting on the statements and on declarations made therein, he paid Rs. 6001/- on that day as earnest money in part payment of the consideration. It is then pleaded that Purna Chandra Banerji could not make out a good and marketable title to the said premises. There-after, by a registered conveyance dated the 6th October 1951, Banerji sold the said premises to the first defendant for a sum of Rs. 40,000/-, and it is alleged in paragraph 6 of the plaint that this sale was 'subject to the said charge in favour of the plaintiff.' It will be material later On to refer to the conveyance of the 6th October 1951 to see the terms and effect thereof. Then followed the second conveyance of the same premises on the 23rd September 1952, to which reference has already been made. Upon this, the plaintiff claimed the said sum of Rs. 6000/-with interest and cost as provided in the agreement of the 2nd April, 1948.

6. The defence inter alia is that at the time when the Agreement of the 2nd April 1948 was made, Banerji had no right, title or interest in the said premises and, therefore, could riot create any charge thereon. Secondly, it is said that Banerji only acquired title to this property after the death of his wife and his son which took place respectively on the 17th July 1951 and the 16th August, 1951. The point of this defence is that the premises belonged to the wife of Banerji, Nabanalini, Upon her death, the property devolved on her son and when the son died, Banerji became the owner of the property by intestate succession. Thirdly, the defence is that the plaintiff had repudiated the contract on the 2nd April 1948. Lastly, it is denied that the property was sold to the defendants subject to-any charge in favour of the plaintiff.

7. Although the claim is small, elaborate arguments have been addressed to us from the Bar and a large number of cases have been cited and the appeal has taken a longer time that perhaps what the amount involved would otherwise have justified.

8. The first point urged on behalf of the appellant was that of Benami. It is argued that Banerji was the real owner of the premises in-suit and the wife was: merely a benamdar. In support of this argument, the origin of the property is shown to belong to the joint family of Banerji which he inherited '' and then it was-shown that by a deed of gift dated the 9th June 1927, he gave the property to the wife with a deed of annuity executed by the wife in favour of Banerji agreeing to pay Rs. 15/- per month to the husband during his life and creating a charge on the said premises to 'secure such annuity. It is then said that there was mutation in favour of the 'wife in the Corporation records, tin 1927-1938 but then this was again altered in favour of the husband in 1934. It was then contended that Banerji treated the property as his own in spite of the deed of gift by reason of the fact that (1) he executed a mortgage in favour of one Khasnabis for Rs. 10,000/- in respect of these premises and (2) by a registered instrument, he agreed, to sell the premises subject to that mortgage to Gopaldas Ganguli and Suresh Chandra Khasnabis for Rs. 40,000/- and charged the said premises for payment of the earnest money of Rs. 2000/-. In particular, the learned Counsel for the appellant relied on Banerji's answer to the requisition of title where he admitted the transaction to be benami. A number of Privy Council decisions were cited by the learned Counsel for the appellant such as Umam Parshad v. Gandharp Singh, 14 Ind App 127 at p. 129 (PC) where Lord Hobhouse said that slight evidence though not mere suspicion can prove a transaction to be benami; Sailendra Nath v. Saroj Kumar , where admission in a document was used to prove benami but then that was a case of admission by the benamdar and Suleman Kadr Bahadur v. Mehndi Begum, 25 Ind App 15 at p. 19 (PC) where Lord Davey spoke of shifting the burden in proving benami.

9. It will be unnecessary to discuss in detail the authorities on the point of Benami because I do not think this point can really be urged in the appeal. Benami is a question of fact and law, more of fact thaa of law: No benami is pleaded in the plaint. No issue of benami was raised before the learned trial Judge. No oral evidence was called on the point. No ground of appeal has been taken on the point of benami, On the contrary, such ground as ground No. 3 in the appeal, shows that what the appellant is urging is just the contrary, namely, that the assertion of Purna Chandra Banerji that he was the real and true owner was fraudulent or erroneous. Lastly, in fact, so far as pleadings go, the appellant himself in paragraph 5 of his plaint accepted and admitted the position that Banerji could not make out a good and market-able title to such premises. For these reasons and on those grounds, I do not think that the appellant, could now be heard to argue the question of benami before us in the appeal. We therefore overrule the first objection.

10. The next question relates to charge. The foundation for this claim for charge in the suit is to be found in the Agreement of the 2nd April 1948. This agreement is signed by Puma Chandra Banerji and the plaintiff appellant Panchanan Paul. It is a registered Agreement. Two clauses of this agreement are important for the purposes of this contention. They are clauses 6 and 8. They read as follows:

Clause 6. If the title be not found to be good and marketable ..............then the vendor shall refund to the purchaser on demand the said earnest money together with a sum of Rs. 200/- (Rupees Two hundred) as costs and compensation and until it is so paid the said sum will carry interest at the rate of Rs. 8/- per cent per annum.'

Clause 8. 'The said property hereby agreed to be sold shall remain, charged for the sum ot Rs. 6000/- (Rupees Six thousand) out of the sum of Rs. 6001/- paid and advanced by the purchaser till the completion of the sale or the refund thereof as stipulated in paragraphs 6 and 7 herein.'

11. The appellant's suit is on this charge contained in clause 8 of the Agreement for sale dated the 2nd April 1948. If the appellant had no title to the property, then he could not create a charge on such property. In Muthu Goundan v. Chellappa Goundan, 8 Mad LT 464 and also reported in 8 Ind Cas 1089, a Division Bench of the Madras High Court came to the conclusion that where a sale was wholly invalid, the vendee had no charge On the property for the purchase money paid by him. The statutory charge for the earnest money in case of sale is contained in section 55(6)(b) of the Transfer of Property Act where, however, the charge is expressly limited to 'the extent of the seller's interest in the property'. If, therefore, the seller has no interest in the property, then there can he no such statutory charge. A charge under Section 100 of the Transfer of Property Act expressly says that

'Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property.'

The charge, therefore, does not amount to a mortgage. A mortgage under Section 58 of the Transfer of Property Act is a transfer of an interest in specific immovable property. A charge, therefore, does not amount to a transfer of an interest in immovable property.

12. On behalf of the appellant, the learn-ed Counsel contends that even if Puma had no title to the property, he is estopped from denying that he had no title and, therefore, his successors-in-interest, namely, the two defendant respondents are bound by such estoppel. Secondly, it is also contended on behalf of the appellant that the doctrine of feeding the estoppel should be applied so as to make good what was bad at the time of making the charge under the agreement of the 2nd April 1948. It is intended to be applied in this way, namely, that Purna Chandra Banerji subsequently acquired full title to the property by reason of the deaths of the the wife and; the son.

13. Taking first the second point of feeding the estoppel, it must be said at the outset that that is not the pleading. The pleading is not that Purna had no title but acquired title by reason of the death of these two persons. The pleading is only on the charge as contained in the agreement dated the 2nd April 1948 read with the conveyance dated the 6th October 1951 in favour of the first defendant respondent where reference is made to this charge. The doctrine of feeding the estoppel has two statutory recognitions. One is contained in section 43 of the Transfer of Property Act and the other is contained in section 18 (b) (a ?) of the Specific Relief Act. Neither of these two sections is applicable in the present case. Section 43 applies to the case of a transfer by an unauthorised person who subsequently acquires interest in the property transferred. A charge is not a case of transfer of interest in immovable property and this is not a case of conveyance or sale but it arises at a stage prior to the stage of sale or conveyance. Similarly, the case contemplated in section 18(b) (a ?) of the Specific Relief Act is a case of sale and uses the language of 'imperfect title'. The present appeal is not a case of imperfect title but of no title. Then again, it is not a case of specific performance.

14. It is then argued that apart from the two statutory provisions for feeding the estoppel, there are general principles independent of those two statutes which can be applied. As at present advised, I am not of the opinion that where statutes expressly make provision for feeding the estoppel only in particular cases and thereby impliedly excluding otheRs. it is possible to invoke undefined principles of feeding the estoppel. Feeding the estoppel is based on the doctrine of feeding a grant. The grant is of interest in immovable property. Where no grant or transfer of interest in immovable property is involved, it is extremely doubtful whether the doctrine of feeding the estoppel can at all be applied. That is the reason why these two statutory provisions make only reference to sales, leases and other transfers of interest and make no reference whatever to charge. It is, therefore, unnecessary, in my opinion, to discuss such cases cited at the Bar as Holroyd v. Marshall, (1862) 10 HLC 191 at pages 209, 211 and 226; Collyer v. Isaacs, (1881) 19 Ch. D. 342 as per Jessel M. R. at page 351; Tailby v. Official Receiver, (1888) 13 AC 523 at pages 531 and 546; Khobhari Singh v. Ramprosad Roy, 7 Cal LJ 387 (a case on mortgage and not on charge), Tilakdhari Lal v. Khe-danlal, 47 Ind App 239: (AIR 1921 PC 112) as per Lord Buckmaster J. at page 254 (of Ind App): (at pp. 117-118 of AIR) on the general principle of feeding the estoppel in the case of a conveyance by a man, who had no title (which again was a case of transfer of interest and not of charge); Kalyanpur Lime Works Ltd. v. State of Bihar : [1954]1SCR958 , which again, as pointed out by Ghulam Hasan J. was a case under Section 18(a) of the Specific Relief Act about a lease which involved the question, of transfer of interest in immovable property.

15. Therefore, both on the ground of pleading and on the ground, that this is a case of charge and not one of transfer of interest in immovable property, I hold that the doctrine of feeding the estoppel cannot he applied to the present case.

16. Then the question is whether there is an estoppel as between the plaintiff appellant and the defendant respondents under Section 115 of the Evidence Act which provides:

'When one person has, by his declaration, act or omission, intentionally caused or permitted another person, to believe a thing to be true and to act upon such belief, neither he nor his representatives shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.'

The statutory illustration given thereunder makes it clear that where A intentionally and falsely leads B to believe that certain land belongs to A and thereby induces B to buy and pay for it, the land afterwards becomes the property of A and A seeks to set aside the sale on the ground that at the time of the sale, he had no title, then he must not be allowed to prove his want of title.

17. What is said here is that Puma Chandra Banerji made certain representations that he had title to the property, that he would sell the property to the appellant and that he would make a charge for the earnest money amounting to a sum of Rs. 6000/- on such property. Therefore, it is said that the appellant paid Rs. 6000/ and changed his position. It is then said that the statement contained in clause 8 of the agreement for sale dated the 2nd April 1948 being in a registered document also binds the subsequent purchaser from Purna Chandra Banerji. There are many cases on the point that there can be estoppel with regard to title and that the doctrine of estoppel has been applied to sales and mortgages, as will be found from such decisions as Debendra Nath Sen v. Mirza Abdul Samed Seraji, 10 Gal LJ 150 as per Mookerjee J. at page 163; Mahamaya v. Haridas, 20 Cal LJ 183 at pages 187-189 : (AIR 1915 Cal 181 (2) at pp. 163-164); Bhoianath v. Balaram, 27 Cal WN 607: (AIR 1922 PC 382) as per Lord Phillimore at page 610 (of Cal WN): (at p. 383 of AIR): Bengal Coal Co. Ltd. v. Sitaram Chatterji : AIR1935Cal666 ; Sivarao v. Subarao : AIR1934Mad302 ; Kalidas v. Pra-sanna Kumar. AIR 1920 Cal 354 at p. 357; Rup-chand v. Sarbessur Chandra, 10 Cal WN 747 at pages 751-752. The language of section 115 of the Evidence Act makes it clear under what conditions and limitations there is an estoppel thereunder.

18. The first obvious answer to this argument about estoppel under Section 115 of the Evidence Act is that the declaration or statement contained in clause 8 of the Agreement of the 2nd April 1948 can only be binding provided the agreement subsists and has not been denounced by the persons making it before the impugned transfer takes place. If the agreement does not subsist, the statement contained therein, cannot subsist, either and, therefore, cannot act as a foundation or ground for estoppel. The question then is in, the facts of this appeal whether the agreement dated the 2nd April, 1948 subsisted at the material time which is the 6th of October, 1951 when the first defendant respondent purchased the property from Purna. I have come to the conclusion that the agreement did not subsist and, therefore, the statement contained in Clause 8 of such agreement could no longer provide a declaration, act or omission within the meaning of Section 115 of the Evidence Act to ground a claim for estoppel. I shall state my reasons briefly. 19-23. (After stating the reasons, His Lordship proceeded). These two outstanding events between the end of 1948 and August, 1950 completely demolish, denounce, and repudiate the registered Agreement of the 2nd April, 1948, and, therefore, thereafter there could be no estoppel on the basis of any declarations or statement contained in such agreement. Hence, persons taking a conveyance such as the first respondent, Nirode Kumar Biswas on the 6th October, 1951 could not be hit by any estoppel. Indeed this suit was not filed until even one year thereafter on the 11th September, 1952.

24. The principle of law is succinctly stated in Simonds Edition of Halsbury's Laws of Eng-land (Third Edition), Vol. 15, Articles 340 and 341 at pp. 171 to 174. It is said there :'On the principle that a person may not approbate and reprobate, a species of estoppel has arisen which seems to be intermediate between estoppel by record and estoppel in pais. The principle that a person may not approbate and reprobate expresses two propositions, first, that the person in question, having a choice between two courses of conduct, is to be treated as having made an election from which he cannot resile, and, second, that he will not be regarded, in general at any rate, as having so elected unless he has taken a benefit under or arising out of the course of conduct which he has first pursued and with which his subsequent conduct is inconsistent.' It is then said there that

'a plaintiff having two inconsistent claims, who elects to abandon one and pursue the other, may not, in general, afterwards choose to return to the former claim and sue on it. But this rule of election does not apply where the two claims are not inconsistent, and the circumstances do not show an intention to abandon one of them.'

I have tried to show on the facts of this case that the two claims here as made are inconsistent. Halsbury makes it clear that the common law principle which puts a man to election between alternative inconsistent courses of action has no connection with the equitable doctrine of election and relates mainly, though not exclusively, to alternative remedies in a Court of jastice. There is no hard and fast rule on this point. But the principles are those stated by Halsbury. The caution to observe here is that the mere fact of a man with two alternative remedies having in ignorance of his rights pursued one and received a payment thereby will not prevent him from afterwards pursuing the other, if he is able and willing to restore what he has received so as to prevent any wrong being done to any person by his change of remedy. These principles arc well recognised and sufficiently discussed in two of the recent decisions of the House of Lords, Lissenden v. C. A. V. Bosch Ltd., 1940 AC 412 at pp. 417 to 419, and particularly the observations of Viscount Maugham therein; Young v. Bristol, Aeroplane Co. Ltd., 1946 AC 163 as per observations of Viscount Simon at pp. 172-173, and lastly in the English Court of Appeal in Vine v. National Dock Labour Board, (1956) 1 All ER 1 as per observations of Parker L. J. at p. 13.

25. The position can also be clarified on this point by reference to Section 19 of the Contract Act which provides that when consent to an agreement is caused by fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. He can avoid the contract. But if he thinks lit, he can insist that the contract be performed. The fact here establishes that the appellant here exercised the option and avoided the contract. He did not insist on the performance of the contract. He did not follow Clause 6 of the contract to demand the return of his earnest money and to pursue the charge created by clause 8 thereof. He allowed time to Pass by. Then after more than a year, he accused the vendor of cheating him of Rs. 6,000/- for which he is now asking lor relief by way of a charge. This he clearly cannot do. See the observations of Lord Blackburn in Scarf v. Jardine, (1882) 7 AC 345 at pp. 360-861.

26. This principle is the same principle that a man will not be allowed to approbate and reprobate at the same time and that he cannot be allowed to blow hot and cold. It is not to be confused, with the other debatable branch of jurisprudence as to how far a crime, be it felony or misdemeanour, affects a civil remedy in India. It is, therefore, unnecessary to discuss for the purposes of this appeal the observations of Lord Tenterden, C. J. in Stone v. Marsh, (1827) 6 B & C 551 at p. 564, and the observations of Lord Parker in Admiralty Commissioners v. S. Section Amerika, 1917 AC 38 at pp. 47-49; Crosby v. Leng, (1810) 12 East 409 at p. 413; Wells v. Abrahams, (1872) 7 QB 554 at page 560; Midland Insurance Co. v. Smith, (1881) 6 QBD 561; Ex parte, Ball In re Shepherd, (1879) 10 Ch. D. 667; Smith v. Selwyn, (1914) 3 KB 98; Attorney-General v. Bradlaugh, (1885) 14 QBD 667 at P. 691; Ramanamma v. Apalanarasayya : AIR1932Mad254 .

27. Finally, it is argued with considerable force on behalf of the appellant that in the conveyance dated the 6th October, 1951 there is in the Memo of consideration in the Schedule to the conveyance the following statement:--

'Retained by the purchaser for release of the agreement for sale and charge dated the 2nd April, 1948 executed by the vendor in favour of Panchanan Pal with interest and costs Rs. 7,500/-.'

With a good deal of reason and more of common sense it has been urged rightly on the strength of that statement that the first respondent's present contention hot to pay the money is most unmeritorious, he having retained this money out of the consideration to pay back the sum of Rs. 6,000/- to the appellant.

28. It is for this reason that we took long and anxious time to find out if we could, in law, grant some relief to the appellant. I have regretfully come to the conclusion that the relief cannot be granted. The first reason is that in the body of the deed, the property is sold expressly in fee simple and 'free from all encumbrances, charges and attachments.' In the operative part of the deed, therefore, there is no undertaking or agreement to pay this earnest money back to the appellant, In fact, there is a further covenant in the conveyance on the usual lines whereby the vendor Purna covenanted to keep respondent Biswas harmless and indemnified against all and all manner of former or other estate right, title, liens, charges and encumbrances whatsoever created or suffered by the vendor. The covenants being so express, clear and unequivocal it is plain that the purchaser by that statement succeeded in beating down the price for taking the chance of successfully defending the property from the imposition of a charge in a future litigation. Secondly, the difficulty of the appellant is that his present suit does not seek the remedy of a return or refund of the earnest money on the basis of any claim to a fund specially retained for that purpose by respondent Biswas.

29. The arguments and the cases, on the point how far a stranger to a contract can sue, are, from that point of view, irrelevant because this suit which the appellant filed is a suit only for a declaration of charge on the premises in suit and for a mortgage decree and not for a claim on any specific fund of money in the hands of respondent Biswas. The pleadings in suit were not framed on those lines and nor was the case conducted on those lines. In fact, a relevant question of fact if that case was made in the plaint would be, who actually was the purchaser and who actually retained this money under the conveyance of the 6th October, 1951. By reference to the subsequent conveyance in favour of the second respondent dated the 25th September, 1952, it looks as though that Surendra Nath Biswas and not the first respondent Nirode Ku-mar Biswas was the real purchaser under the conveyance of 1951 and naturally if the point was not made in the plaint nor tried in the suit, it cannot be decided now in appeal who actually retained this money. It is important in this connection also to say that Surendra Nah Biswas is not even a party to the suit nor is Puma Chandra Banerji.

30. For these reasons, this appeal must fail and must be dismissed.

31. On behalf of the first respondent, an argument was made about the costs. The learned trial Judge directed the first defendant to pay one-half costs of die second defendant on the ground that he came to the conclusion that the first defendant had not acted bona fide and honestly in retaining the money in his hands and resisting the plaintiff's claim on technical grounds. The learned counsel for the first respondent wanted to get rid of this order for costs against her client on the strength of a Full Bench decision in Chandra Sekhar v. Manoharlal, ILR 1942 All 832: (AIR 1942 All 233), by arguing that a decree for costs against a benamdar is not executable against the beneficial owner. We do not see any reason to set aside the order of the learned Judge who exercised a discretion in the matter about costs. Besides, there are other reasons why it should not be done. First, the Allahabad decision deals with a case of a decree for costs against a benamdar not being executable against the beneficial owner. That question arose in execution in the Allahabad case. No such question arises here. Secondly, there is no proof or record that the money, in fact, was not in the custody of the benamdar and that it was in the custody of the real owner Surendra Nath Biswas. Thirdly, having regard to the unmeritorious contentions of the first respondent there should be HO interference with that order for costs in the trial court.

32. So far as the costs of this appeal are concerned, we direct that each party will bear his or her own costs.

33. Certified for two Counsel. BOSE, J.:

34. I agree, but I should like to add a few words on the question of estoppel which has been raised on behalf of the appellant.

35. It has been argued that the defendants, who claim title through Puma Chandra Banerji, are estopped from disputing the title Or right of the plaintiff as charge-holder, in respect of the sum of Rs. 6,000 which was paid by way of earnest money or as part payment of the price. The contention on behalf of the appellant is that Purna himself was estopped from disputing the charge for haying been a party to the agreement for sale which also created the charge for the sum of Rs. 6,000 and the defendants as his representatives-in-interest are also estopped. In other words, the plaintiff has, what is called, a title by estoppel. Our attention was drawn to the case reported in 10 Cal LJ 150 at pages 163-164, and other cases and reliance was placed on a decision of this Court in AIR 1920 Cal 354 where it has been observed that 'if a person purchases an estate subject to a mortgage, whether under a voluntary conveyance or under a sale in invitum, or undertakes to discharge it, he cannot be heard leny the validity of the mortgaga, subject to which he made his purchase. Where, however, the purchaser merely buys an estate which is under mortgage but does not take it subject to the encumbrance or undertakes to discharge it, he is not precluded from impeaching the validity of the mortgage. The distinction between the two classes of cases depends on the question whether the property has been sold subject to the mortgage or whether mere notice of the alleged mortgage has been given in, the proclamation of sale.' Relying on this proposition, it has been argued that the memorandum of consideration as set out in the conveyance dated the 6th October, 1951 shows that the defendant No. 1 had acknowledged the charge and agreed to retain a sum of Rs. 7,500/- for discharging the liability created by the charge in the agreement for sale dated the 2nd April, 1948. The language of the relevant portion of the memorandum of consideration has been set out by my learned brother in his judgment. The argument of the learned counsel for the appellant is that the expression, 'retained by the purchaser for release of the agreement for sale and charge', makes it abundantly clear that the purchaser was keeping in his hands or deducting from the consideration money Rs. 7,500 for the specific purpose of discharging the charge and obtaining a release of the property from the agreement for sale and the charge dated the 2nd April, 194S and so in the circumstances it is not open to the defendant No. 1 and it does not lie in his mouth to impeach the validity of the charge or to deny it. He is estopped from doing so. It is well known that a title by estoppel is good against the person estopped and imports from its very existence the idea of no real title at all yet, as against the person estopped, it has all the elements of a real title, Bank of England v. Cutler, (1908) 2 KB 208 at page 234 per Farwell, L. J. It has been said that a title by estoppel is not an assertion of a right by the party pleading it, but it shows matter to estop the defendant from setting up the defence attempted. It prevents the defendant from denying the title or right, It is a mere negative title to quote the words of Lord Lynd-hurst, L. C. in the case of Bensley v. Burdon, (1830) 8 LJ (OS) Ch 85 at page 88 but it is also clear that this doctrine of title by estoppel appearsi to have been applied only in the case of a sale (See Sheo Prosad v. Udai Singh, ILR 2 All 718 and other cases); in the case of a mortgage (Mokhoda Devi v. Umesh Chundra Banerji, 7 Cal LJ 381 and other cases); in the case of a lease (Krishna Chandra v. Rasik Lal, 21 Cal WN 218: (AIR 1917 Cal 432) and other cases) and in the case of exchange (Bhairab Chandra v. Jiban Krishna, 33 Cal LJ 184: (AIR 1921 Cal 748) and other cases). But no case has been brought to our notice to show that it has been applied to the case of a charge. It is well known that in a charge there is no transfer of interest in the property as in a mortgage but only a creation of a right of payment out of the property specified. There is a decision of the Bombay High Court reported in Shankar v. Ganpat, AIR 1929 Bom 227 where it was observed that a person creating a charge or a mortgage is estopped from saying that he is not entitled to create the charge or mortgage on the property. But this was a case where the charge was created by a compromise decree made in a suit brought for specific performance of an agreement to obtain a mortgage bond. The defendant who created the charge was a party to the decree and after the compromise decree was put in execution the defendant took up the stand that he was not bound by the charge as he had no disposing power to create the charge. It was held that the defendant, having agreed to create a charge by the decree, 'could not turn round and in execution deny that the property was not liable to be sold in execution of the decree to which he consented. It does not appear from this case that in making the observation, the learned Judges had in mind the doctrine of title by estoppel or that they were considering any such doctrine in the case. It appears to me, therefore, that the plaintiff cannot avail of the doctrine of title by estoppel or the, doctrine of feeding the grant by estoppel which arises out of it. That the doctrine of title by estoppel and the doctrine of feeding the grant by estoppel are linked with each Other is brought out very clearly in a decision of this Court reported in 7 Cal LJ 387 where Sir Ashutosh Mookerjee, J. at page 393, after referring to the three well known cases of (1862) 10 H L C 191; (1881) 19 Ch D 342 and (1888) 13 AC 523 made the following observation:

'The foundation of the doctrine, therefore, is that a mortgage of non-existent property, though inoperative as a conveyance, is operative as an executory agreement, which attaches to the properly, the moment it is acquired, and in equity, transfers the beneficial interest to the mortgagee, without any new act done by the mortgagor to confirm the mortgage. This principle has been traced to two different sources. In some cases, reliance is placed on the maxim that equity considers that done which ought to be done. (Williams v. Briggs, (1877) 11 Rhode Island 476 : 23 Am Rep 518). In other cases, the aid is invoked of the doctrine of estoppel, and it is said, that as soon as the property comes into existence, the mortgage operates by way of estoppel, the principle of which is explained in Section 43 of the Transfer of Property Act. (Scott v. Clinton, (1876) 6 Bissell 529). See also Webb v. Austin, (1844) 8 Scott NR 419, Sturgeon v. Wing-field, (1846) 15 M and W 224 and Church v. Dalton, (1852) 2 Ir CLR 249, which show that where an estate by estoppel becomes an estate in interest by the grantor's acquisition of an estate, the parties and their assignees are in the same position as if the estate had been ab initio an estate, in interest.'

It may be further pointed out that no case of feeding the grant by estoppel has been pleaded in the plaint. Special facts have to be pleaded as to, the initial want or absence of title and as to how the title was subsequently acquired but no such, facts are pleaded in the plaint.

36. I agree that this appeal should be dismissed.

Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //