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Sashi Bhusan Dey and ors. Vs. Rai Chand Bural and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtKolkata
Decided On
Case NumberSuit No. 1741 of 1947
Judge
Reported inAIR1950Cal333
ActsTransfer of Property Act, 1882 - Sections 55, 55(1) and 65(1); ; Code of Civil Procedure (CPC) , 1908 - Order 2, Rule 4; ; Specific Relief Act, 1877 - Section 19
AppellantSashi Bhusan Dey and ors.
RespondentRai Chand Bural and ors.
Appellant AdvocateA.C. Mitter, Adv.
Respondent AdvocateH. Banerjee, Adv.
Cases ReferredMarsh v. Jones
Excerpt:
- p.b. mukharji, j.1. this is a suit by the plaintiffs for specific performance of an agreement for sale dated 12th march 1946 is respect of premises no. 21, madan gopal lane, calcutta, and for compensation for the delay in executing the conveyance and for turning out the trespassers. the agreement is in writing signed by rai chand bural, kissen chand bural and bissen chand bural. they are the vendors and plaintiff rai bahadur soshi bhusan dey is the purchaser. the agreement provides that the vendors shall sell the said premises to the rai bahadur free from all encumbrances at a price of rs. 45,000 and that the vendors shall within 15 days deliver all documents of title and shall at their expense make out a marketable title and cause the property to be freed from all encumbrances. the.....
Judgment:

P.B. Mukharji, J.

1. This is a suit by the plaintiffs for specific performance of an agreement for sale dated 12th March 1946 is respect of premises No. 21, Madan Gopal Lane, Calcutta, and for compensation for the delay in executing the conveyance and for turning out the trespassers. The agreement is in writing signed by Rai Chand Bural, Kissen Chand Bural and Bissen Chand Bural. They are the vendors and plaintiff Rai Bahadur Soshi Bhusan Dey is the purchaser. The agreement provides that the vendors shall sell the said premises to the Rai Bahadur free from all encumbrances at a price of Rs. 45,000 and that the vendors shall within 15 days deliver all documents of title and shall at their expense make out a marketable title and cause the property to be freed from all encumbrances. The agreement also provides that the conveyance is to be executed in favour of Rai Bahadur or his nominee or nominees. The sum of Rs. 1,000 was paid as earnest money and in part-payment of the purchase price on the execution of the agreement.

2. The plaintiffs in their plaint referred to a deed of trust dated 15th March 1939 alleged to have been executed by defendant Rai Chand Bural whereby he appointed Kissen Chand Bural and Bissen Chand Bural the other two defendants as the trustees and conveyed this property to Each trustees upon trust, Rai Chand Bural was the absolute owner of the premises. The deed of trust was declared void and inoperative and not binding on the defendant Raichand Bural by decree made in suit No. 986 of 1946 of this Court made on 19th December 1946. It is alleged in the plaint that in those circumstances Rai Chand Bural is the owner of the premises and defendants 2 and 3 Kissen Chand Bural and Bissen Chand Bural are joined only as pro forma defendants and no relief is claimed against such pro forma defendants. Plaintiffs 2 and 3 are the relations and nominees of plaintiff 1 Rai Bahadur Soshi Bhusan Dey. The title was approved and the draft conveyance was also approved subject to the objections of the Attorney of Rai Chand Bural as pleaded in para. 5 of the plaint.

3. The defendants' attorney cancelled the agreement for sale on 14th May 1947 and forfeited the earnest money. The plaintiffs contend that such cancellation and forfeiture are unjustified and unlawful.

4. The central dispute in this suit relates to the question of vacant possession. In the plaint it is alleged that one Karim Bux Mullick is a tenant of the said premises under the defendant Rai Chand Bural and that the defendant Rai Chand Bural received rents up to July 1946 from such tenant. That tenant died some time ago and that tenant's nephew one Sadek Ali Mullick was alleged to be in occupation as a tenant of the said premises but no counterfoil of any rent bills have been produced in spite of demands. There was another person by the came of Dunia Lal Das who also, it is alleged in the plaint, was in wrongful occupation of the said premises. The plaintiffs' grievance is that the defendants should have turned out these trespassers from the said premises and given over vacant possession to the plaintiffs and that the delay in completion of the sale was due to the fault of the defendants.

5. A joint written statement has been filed by the defendants where it is admitted that Rai Chand Bural was and is the owner of the premises No. 21, Madan Gopal Lane Calcutta. It is denied the title was duly approved or that the only objection was as alleged in para. 5 of the plaint and that the plaintiffs wrongfully refused to complete the transaction. The defendants further contend that the demand of the plaintiffs for ejectment of the trespassers and for delivery of vacant possession was wrongful and unjustified. It is also denied that the plain-tiffs were ready and willing to perform the said contract. The written statement also admits that Dunia Lal Das has been in wrongful possession of a portion of the said premises as trespasser. The defendants justify cancellation of the agreement and forfeiture of the earnest money.

6. The following issues were raised by Mr. H. Banerjee appearing for the defendants:

'(1) Were the plaintiffs entitled to demand vacant possession of the said premises under the Agreement dated 12th March 1946?

(2) Have the plaintiffs been ready and willing to perform their part of the Agreement dated 12th Marsh 1916?

(3) Were the defendants justified in cancelling the Agreement and forfeiting the earnest money?

(4) Is the suit maintainable having regard to the fact that the Agreement was not with plaintiffs 2 and 3?

(5) Is the suit bad for misjoinder of causes of action on the ground that relief in respect of immovable property was combined with the relief for compensation.

(6) Are the plaintiffs entitled to any compensation? If so, what?'

7. No issue was raised by Mr. Banerjee on the question of title or approval of title because as he said that the plaintiffs were now willing to take the title as it is in the sense that they were prepared to take over with the trespassers and his clients were willing to hand over such possession and the only question on that point was whether the plaintiffs were entitled to claim any compensation. Issue of compensation-has been raised as I have indicated above. On behalf of the plaintiffs the learned counsel also accepts this position, and he says that the plaintiffs were prepared to take the premises with the trespassers.

8. Plaintiffs have not led any evidence. The junior counsel for the plaintiffs called plaintiff Prosad Das Da on the first day of the hearing on 3rd March 1949 but the leading counsel Mr. Mitter on the following day did not wish to proceed with the examination-in-chief of such witness and submitted that the agreed brief of correspondence which is marked as Ex.-A in this suit was enough and he did not call any witness. In the result the evidence which was only partly given in chief by the plaintiff Prosad Das De and whom the defendants had no chance to cross-examine will be expunged from the record. On behalf of the defendants two witnesses have given evidence. Issue No. 1

9. Clause 1 of the agreement for sale pro-vides for sale of the said premises 'free from all encumbrances', and 'with all rights'. Clause 2 of the agreement for sale provides that the vendor shall cause the said premises to be freed from all encumbrances. It is argued by Mr. Banerjee on behalf of the defendants that there is no stipulation in the said agreement that his clients have to deliver vacant possession. Therefore demand for vacant possession on behalf of the plaintiff was unjustified. In support of this argument Mr. Banerjee has relied on a passage in Gour's latest edition of the Law of Property at p. 772 para 1228 where it is said that the term possession is open to great variety of meanings and delivery of possession as the nature of the property admits may be satisfied by handing over the title deed when the property is in occupation of the tenant. Mr. Banerjee also relied on a decision of lower Burma Chief Court. Suliman v. Pala-neappa, 8 I. C. 605 : (3 Bur. L. T. 29).

10. This question depends on the construction of Section 55(1)(f). T. P. Act, and the meaning to be given to the words 'as its nature admits'. There is very little authority on this point. Where a buyer has notice of a tenancy he cannot have actual possession but is only entitled to symbolic possession, On the evidence here I find that the plaintiff had no notice whatever at the time of the execution of the agreement for sale that there were tenants in the premises. [After discussion of the evidence the judgment proceeds as follows:

11. The question on the facts of this case therefore is not whether a vendor is liable to deliver possession with or without tenants under the agreement for sale. The question is has the vendor any liability for the two trespassers Dunia Lal Das and Amar Hath Sein who are now occupying the said premises. The defendants admit that Dunia Lal Das is a trespasser in para. 11 of their written statement as well as in the evidence of Gopal which I have noticed above. The defendants treated Sein also as a trespasser in the sense that the defendants have refused to have any relationship of landlord and tenant between him and them by either demanding rent or accepting it. On the evidence, therefore, the question of delivering possession with or without tenants does not arise because there are no tenants of the defendant in the premises in fact. The question is only whether the defendants are liable for the trespassers and if so, to what extent.

12. On a construction of the words 'as its nature admits' in Section 55(1)(f), Transfer of Property Act, and of the agreement for sale in this case I am of the opinion that the defendants were not justified in saying that they had no liability for the trespassers. Mr. Banerjee has argued on the evidence that such trespassers came to the premises after the agreement for sale and therefore his clients the vendors have no liability in respect of the occupation of such trespassers. It is, however, clear from the evidence that no attempt was made by the defendants either to prevent the trespassers from entering the house or for turning them out.

13. I propose to deal with Mr. Banerjee's argument that the trespassers came after the agreement for sale. Under Section 55(1)(e), Transfer of Property Act, the vendor has the duty and is bound to take as much care of the-property as an owner of ordinary prudence would take of such property between the date of the contract of sale and the delivery of the property. During this period between the con-tract for sale and the delivery of property the vendor is in the position of a trustee as pointed out by Lord Selborne in Phillips v. Silvester (1873) 8 ch. A. 173 at p. 177 : (42 L. J. ch. 225). In my judgment the seller must do what a prudent owner ought to do and must protect the property from injury by trespassers and that an owner of ordinary prudence would take this care to see that trespassers do not occupy his property. If the vendor is a trustee for the purchaser, as I consider him to be so under the law, his duty as such trustee is not fulfilled when at the time of the delivery of possession it is found that trespassers are having a free run and occupation of the property. In the case of Royal Bristol Permanent Building Society v. Bomash, (1887) 35 ch. D. 390: (56 L. J. ch. 840), the learned Judge after discussing the law on this point at p. 398 says as follows :

''Therefore I regard the vendors in this case as trustees for the purchaser from the date of the con-tract. I think they ought to have taken that reasonable care of the property which would have prevented it being damaged ..... by any one who removed the fixtures or by vagrants or other persons coming in.'

The evidence proves that the vendors did not take the least interest in the property far from taking the standard of care enjoined by the statute. Sir Dinshaw Mulla in his commentary on the Transfer of Property Act, 1933 Edn. at p. 268, approves of the proposition that under Section 55(1)(e) the seller must protect the property from injury by trespassers. Injury by trespassers does not consist merely of damage done to fixtures or other pacts of the property by such trespassers but also includes wrongful occupation by the trespassers.

14. In my judgment the correct legal position is clearly stated in Williams on Vendor and Purchaser, 4th Edn , Vol. 1, p. 533 in the following terms :

'He (vendor) must eject disseisors and others wrongfully in possession of the property sold or any part of it (Engell v. Fitch L. R. 4 Q. B. Cases 659) and take proper precautions against injury to the lands by trespassers Clarke v. Ramuz, (1891) 2 Q. B. D. 456) and if he fails in any of these duties the purchaser will be entitled to an allowance by way of compensation to be deducted from purchase money.'

15. On a construction of Section 55(1)(f) Transfer of Property Act, I am of the opinion that if the property is the house (and not a joint property) the possession that its nature ordinarily admits is vacant possession and in the absence of any agreement to the contrary the transfer contemplated is transfer of vacant possession and it is not enough to prove that there was even a tenant in occupation actually to the knowledge of the purchaser. In the facts however of this case no knowledge of the purchaser about the existence of the tenant at the time of execution of the agreement is proved. The word 'its nature' in the section mean in my judgment an incident which is inherent in the property which could be called as its nature. For example if the property is a joint and undivided property the possession can only be as its nature admits and therefore symbolic and not actual physical possession. Again the property might be intangible as for instance the right of easement, the possession which its nature will admit is also necessarily symbolic, and not actual and physical. It is in this sense that the word 'nature' has to be construed. Ordinarily therefore in the absence of any contract to the contrary if the agreement is to sell a house in which the seller has the sole and absolute interest the possession contemplated under Section 55(1)(f), Transfer of Property Act, is in my judgment vacant possession. The decision of Madhavan Nair and Jackson JJ. in Panchapagesa Ayyar v. Arunachala Mudaliar, 1932 M. W. N. 122, supports the view of construction that I have taken.

16. Presence or absence of tenants in the house agreed to be sold in that sense does not in my judgment affect the 'nature' of property. It may very well be that the parties intended that the tenants could be removed before possession is given. 'Nature' is something which in this context is irremovable. But whatever may be the position of a house with tenants, a house with trespassers can never in my judgment be said to be a property whose 'nature' does not admit actual and physical possession.

17. Besides the words 'free from all encumbrances' in the agreement have to be construed. The stipulation under the agreement was that the vendor shall cause the property to be freed from all encumbrances. A lease or tenancy is in my opinion an encumbrance. (See Williams 'Vendor and Purchaser' 4th Edn. Vol. 2 App. C. Clause 1) A house in the occupation and possession of a trespasser and wrong-doer cannot be said to be free from all encumbrances. As pointed out in Wallace v. Love, 31 Com. L. R. 156 at p. 164.

'The word 'encumbrance' in its ordinary connotation means that the estate is burdened with debts, obligations or responsibilities. The word is in law specially used to indicate a burden on property.'

A trespasser's possession or occupation is in my view a burden on property although a trespasser may have no lawful title to remain in such possession. Romer J. in Jones v. Barnett, (1899) 1 ch. D. 611 says at p. 620 that 'encumbrance' means 'a claim, lien or liability attached to property'. In my view trespasser's possession or occupation is a liability on the property. Removal of trespassers ordinarily involves litigious proceeding and such litigation is a liability or impediment within the ordinary meaning of the word 'encumbrance'.

18. As I have indicated above Clause 1 of the agreement for sale provides that the said property is agreed to be sold 'with all rights'. I consider right of occupation and possession as a very important right of the purchaser under such an agreement. Such right is in my view certainly impeded and obstructed by the wrongful occupation or possession of the trespassers.

19. I hold that under the agreement dated 12th March 1946 and on the construction thereof and on the facts of the case plaintiffs are entitled to vacant possession and I accordingly answer issue No. 1 in the affirmative.

Issue No. 2

20. The agreement for sale was made on 12th March 1946. On 14th March 1946 the solicitors of the purchaser requested the defendant Rai Chand Bural to send the title deeds. On 18th March 1946 the vendors' solicitor sent the title deeds. Requisitions on title were made by the purchaser's solicitors who sent a reminder to vendor's solicitor on 30th May 1946 to answer them. From June to December 1946 the delay was entirely due to defendants trying to clear the title of the trust I have mentioned before. Actually a suit was filed in this Court for that purpose being Suit No. 996 of 1946 and a decree was made on 19th December 1946. But the certified copy of the decree was not sent to the purchasers' solicitors until 26th February 1947.

21. The question of vacant possession and whether the house was tenanted or not was raised by the purchasers' solicitors on 19th March 1947. Correspondence followed between the respective solicitors on this point about vacant possession until 14th May 1947 when the vendor's solicitor refused to comply with the requisition for vacant possession and cancelled the agreement for sale and forfeited the earnest money. This suit was filed within about six weeks there-after on 30th June 1947.

22. I find at these different stages that the plaintiffs were all along ready and willing to perform their part of the contract. If they insisted on vacant possession that was, I think, justified having regard to the view that I have taken of the construction of the agreement for sale and having regard to my findings under issue 1.

23. On 18th April 1947 the purchaser's solicitors sent the draft conveyance for approval of the vendor's solicitor. On 25th April they sent a reminder. On 1st May 1947 the vendor's solicitor returned the draft conveyance duly approved as altered in red ink and asked for an early date for execution and registration of the conveyance. The draft conveyance in Ex. B is this suit. The deletion of the words 'ancestors and predecessors in title' was one of the points in controversy in respect of the covenants in the conveyance and on 2nd May 1947 the purchasers' solicitors returned the draft conveyance to the vendor's solicitor for re-approval. On 4th May 1947 the vendor's solicitor objected to the words 'ancestors and predecessors in title' on the ground that the purchasers were taking the property after thorough search and enquiry. I do not consider the vendor's objection on this score to be at all justified. As I construe the agreement it was for sale of the house with all rights, privileges, elements and appurtenances and free from all encumbrances and the vendor's obligation under Clause 2 of such agreement was to make a marketable title. The title after searches and enquiry was approved by the purchaser's solicitors and I do not see any reason, why this usual covenant should not be made by the vendor when under the agreement the premises are agreed to be sold 'free from all encumbrances'. It is a common covenant and is found in all standard forms and precedents for conveyances whenever property is sold under the agreement of the nature as described in this suit. If the property was sold subject to encumbrances then the vendor would have been entitled to qualify his covenant but not in my opinion in a case like where there is an unqualified agreement to sell free from 'all' encumbrances. See Williams on Vendor Purchaser 4th Edn. Vol. 1 pp. 662-3. In any event this was no lack of readiness or willingness on the part of the plaintiffs. The insistence on a covenant like this by the purchaser's solicitor is not, in my opinion, disapproval of title. On the contrary I think because they had approved the title they were justified in calling upon the vendors to make this usual covenant.

24. On the facts as stated above which are amply borne out by the admitted brief-of correspondence which is marked as Ex. 'A' in this suit 1 hold that the plaintiffs have been ready and willing to perform their part of the agreement. In fact by the letter of 28th March 1947 the purchasers' solicitors were even ready to take the house with tenants who would be prepared to attorn and pay rent to the plaintiffs on the completion of the purchase. But then as I indicated and as it transpired in evidence there is in fact no tenant but trespassers in the house.

25. I accordingly answer issue 2 in the affirmative.

Issue 3 :

26. On my findings on issues 1 and 2 on the same facts I hold that the defendant's cancellation of the agreement and forfeiture of the earnest money were not justified. I answer accordingly Issue 3 in the negative.

Issue 4 :

27. The objection of the vendors on this point was that the purchaser was only the plaintiff Rai Bahadur Soshi Bhusan Dey under the agreement for sale and not the other two plaintiffs. This objection I consider to be completely without substance under Section 55(1)(f), Transfer of Property Act, which provides that the seller shall give possession to the buyer 'or such other person as he directs'. Besides by letters dated 4th May 1947, 7th May 1947 and 9th May 1947 the defendants finally accepted the position that the other two plaintiffs could come in as nominees of plaintiff 1 or as persons directed by plaintiff 1. In Williams Vendor and Purchaser 4th Edn. vol. 1, p. 642, it is said that the purchaser is entitled to require a conveyance to be made to some other persons or to himself and others and the vendor is bound to assure the property sold accordingly.

28. Under Sections 65(1)(f), Transfer of Property Act, and on the correspondence I have mention, ed above I hold that the suit is maintainable.

Issue 5 :

29. Mr. Banerjee has argued that this suit is bad by reason of the provisions contained in Order 2 Rule 4, Civil P. C. His contention is that the claim for damages and compensation and claim for immovable property are hit by that provision in the Code of Civil Procedure. I am unable to accept that argument I consider the suit is protected by Order 2 Rule 4 (c), Civil P. C. I am of the opinion that it is the same cause of action inasmuch as the law allows specific performance of a contract with or without compensation. In my view the claim for damages is based on (a) delay in completion of sale and (b) for failure to deliver vacant possession and such claim arises cut of the same cause of action and on the breach of the agreement for sale by the defendants.

30. I, therefore, hold that the, suit is not bad for misjoinder of cause of action and I accordingly answer issue 6 in the negative.

Issue 6:

31. Section 19, Specific Relief Act, permits a suit for specific performance with a claim for compensation in addition to or in substitution of such performance. In fact paragraph 8 of that section definitely lays down that if in any such suit the Court decides that specific performance ought to be granted but that it is not sufficient to satisfy the justice of the case and that some compensation for breach of the contract should also be made to the plaintiff it shall award him such compensation accordingly and the statutory illustration of para. 3 makes it abundantly clear. Compensation awarded under this section may be assessed in such manner as the Court may direct. The authority in Royal Bristol Permanent Building Society v. Bomash, (1887) 85 Ch. D. 390. (56 L. J. ch. 840)as also the observations of both Cotton and Lidley L. JJ. in Marsh v. Jones (1889) 40 Ch. D. 563 : 60 L. T. 610) are also on the point.

32. The first ground on which compensation is asked is the ground of delay. It is clear that from June to December 1946 when the defendants were clearing the title of the trust the defendants alone were responsible for the delay. The defendants concealed the fact of such trust in the agreement for sale. The existence of such trust was disclosed by the vendor's solicitors' letter dated 1st June 1946. Under Clause 3 of the agreement for sale the purchasers' obligation was to complete the sale--within 2 months as specified therein. That clause provides that upon the title being approved by the purchasers' solicitors which I hold was done on 18th April 1947 when the purchasers' solicitors sent the draft conveyance for approval, the purchaser was to complete the purchase within two months from the date of the delivery of the document of title. The documents of title were first delivered on 18th March 1946 but were returned on 26th April 1947. Later on the title deeds were sent again by the vendors solicitors to the purchasers solicitor on 26th February 1947 along with the certified copy of the decree in Suit No. 996 of 1946. From 1st June 1946 (when the defendants started to clear the title of the trust) until 26th February 1947 (when the certified copy of the decree declaring the trust void was sent to the purchasers' solicitors) the defendant Rai Chand Bural alone is responsible for the delay. Of this period plaintiffs were agreeable to allow time till the end of June 1946. I, therefore, would have awarded compensation to the plaintiffs for the loss as contemplated in the statutory illustration of Para. 3 of Section 19, Specific Relief Act, from 1st July 1946 but I find that the purchasers solicitors approved title by sending draft conveyance only on 18th April 1947. In my opinion the proper date from which I should award compensation is from 26th April 1947 which is within a week from the date when draft conveyance was sent and which is within two months from 26th February 1947 being the date of delivery of title deeds. The evidence of Gopal in answer to Qs. 44 to 47 is that the house fetched a rent of Rs. 100 per month in 1946 but will now fetch something like Rs. 200 per month. I assess the compensation on this evidence at Rs. 150 per month payable from 26th February 1947 until execution of the conveyance, on the ground of dealy.

33. The plaintiffs claim compensation also for turning out the trespassers. I do not consider that it is possible to make any assessment on that point and the claim is at present indeterminate. Besides after the conveyance the plaintiffs will be entitled to sue the trespassers for damages for the period they are kept out of possession after the conveyance Plaintiffs therefore suffer no injustice. I do not, in my discretion therefore, make any separate assessment of extra compensation on this ground, as I do not consider the justice of the case so requires under Para. 3 of Section 19, Specifics Relief Act.

34. Accordingly I answer issue No. 6 in the affirmative and I award and assess compensation at the rate of Rs. 150 per mouth from 26th February 1947 until registration of the conveyance that I propose to direct.

35. There will be a judgment for the plain-tiffs for specific performance of the agreement for sale dated 12th March 1946 in terms of prayers (1), (2), (3) and (4) of the prayers in the plaint. The draft conveyance shall be in the form approved by the respective solicitors in Ex. B in this suit except that the usual covenant with the 'ancestors and predecessors in title' as required by the purchasers' solicitors should be given. Plaintiffs will take delivery of possession with the trespassers. There will also be a decree for compensation at the rate I have indicated above and for costs against the defendant Rai Chand Bural. The plaintiffs shall deposit the balance of the purchase price in Court within a week from date and will be entitled to be paid the compensation out of such purchase money and the balance of purchase price will be handed over to the defendant Rai Chand Bural on the execution and registration of the conveyance. I direct also that the defendant Rai Chand Bural do execute the conveyance within a week after the balance of the purchase price is deposited by the plaintiffs in Court and notice given to such defendant. In default of such defendant executing and registering the conveyance the Registrar of this Court will do the same on his behalf.

36. The decree for specific performance and for compensation as aforesaid and for costs is made against the defendant Rai Chand Bural. No relief and no costs are claimed against defendants 2 and 3 and no decree or order is made against them.

37. Certified for two counsel.

38. The defendants applied for stay of execution but as counsel for the defendants was not prepared to give any security for costs and any undertaking not to dispose of the property pending proposed appeal the stay is refused.


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