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Bidhu Bhushan Pal Chowdhury Vs. Umesh Chandra Banerjee and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in128Ind.Cas.183
AppellantBidhu Bhushan Pal Chowdhury
RespondentUmesh Chandra Banerjee and ors.
Cases ReferredKrishnan Nambiar v. Kannan
Excerpt:
transfer of property act (iv of 1882), section 55(1)(g) - sale--liability of vendor to pay interest on encumbrances due on date of sale, nature of--liability, whether enforceable after completion of sale--limitation of suit--limitation act (ix of 1908), schedule i, article 116, applicability of. - .....this appeal has arisen, a sum of rs. 23,000 odd on the 3rd july, 1922, in order to satisfy the mortgage decree and he got a deed of release from the mortgagee. the present suit was brought on the 22nd december, 1925, by which the plaintiff asked for the recovery from the defendants the difference between the sum he paid to the mortgagee in order to satisfy the mortgage decree and the sum of rs. 16,000 odd that was mentioned in the indenture of sale of the 3rd march, 1921, as the amount of the incumbrance on the property. the learned subordinate judge made a partial decree in favour of the plaintiff. he held that there was an express covenant in the indenture by which the plaintiff purchased the property to indemnify the plaintiff with regard to any sum that would be paid in.....
Judgment:

B.B. Ghose, J.

1. This is an appeal by defendant No. 11 against the judgment and decree of the Subordinate Judge, First Court, Howrah, by which the learned Judge decreed the suit brought by the plaintiff. The facts are these: The appellant, along with the other defendants Nos. 1 to 13 and the father of defendants Nos. 14 and 15, were the owners of two items of properties with which we are concerned. One was 2 bighas 5 cottas in area and the other was only 5 cottas in area. The mortgage was dated the 14th May, 1910, and the principal amount of the loan was Rs. 7,000. A preliminary decree was obtained by the mortgagee named Khirod Chandra Ghose on the 20th July, 1917, on his mortgage, by which decree the amount due to the mortgagee was found to be Rs. 16,000 odd. An appeal was taken by the mortgagor against the decree which was dismissed by this Court oh the 30th April, 1920. By an indenture dated the 3rd March, 1921, the plaintiff purchased from all the mortgagors the bigger plot, the area of which was 2 bighas 5 cottas. In that Indenture it was stated that the property was subject to an incumbrance of Rs. 16,300 by a deed of charge or mortgage in favour of Khirod Chandra and the property was sold subject to that incumbrance. The mortgagors received Rs. 11,751 as the consideration of the sale of their interest. There was a stipulation that the sellers would keep the purchaser harmless and indemnify him against any charge save and except the charge in favour of Khirod. There was the usual covenant for title and assurance that apart from the incumbrance of Khirod, subject to which the property was sold, there was no other charge or incumbrance on the property. After the sale aforesaid, the decree in favour of the mortgagee was amended by this Court by an order dated the 22nd August, 1921, by which it was decreed that the mortgagee would be entitled to a sum of Rs. 18,000 odd with interest thereon at the rate of six per cent per annum from the 20th January, 1918, the date of redemption fixed under the decree. The result was that at the, date of the sale dues of the mortgagee amounted to something like Rs. 21,000. The mortgagee was paid by the purchaser who is the plaintiff in the case out of which this appeal has arisen, a sum of Rs. 23,000 odd on the 3rd July, 1922, in order to satisfy the mortgage decree and he got a deed of release from the mortgagee. The present suit was brought on the 22nd December, 1925, by which the plaintiff asked for the recovery from the defendants the difference between the sum he paid to the mortgagee in order to satisfy the mortgage decree and the sum of Rs. 16,000 odd that was mentioned in the Indenture of sale of the 3rd March, 1921, as the amount of the incumbrance on the property. The learned Subordinate Judge made a partial decree in favour of the plaintiff. He held that there was an express covenant in the Indenture by which the plaintiff purchased the property to indemnify the plaintiff with regard to any sum that would be paid in satisfaction of the mortgage over and above the sum of Rs. 16,000 odd that was mentioned in the document as the amount of the charge. But he held that the plaintiff was entitled only to the money which would have been payable to the mortgagee on the date of the purchase minus Rs. 16,000 odd. He held that the plaintiff having delayed in paying off the mortgagee and thereby the amount having swelled by the running of interest, he cannot get the excess amount from the vendors, He, therefore, made a decree for Rs. 6,958 odd with costs as against defendants Nos. 1 to 11 and 14 and 13. The suit was dismissed against defendants Nos. 12 and 13, who, the learned Subordinate Judge found, had no interest in the property. The defendant No. 11 as aforesaid appeals primarily because defendant No. 11 is a solvent person against whom the decree is likely to be executed and the other defendants have been made respondents in the appeal.

2. Two points have been raised on behalf of the appellant by his Advocate. The first is that the learned Subordinate Judge is in error in holding that there was an express covenant indemnifying the purchaser against any payment in excess of Rs. 16,300 with regard to the incumbrance in favour of Khirod Chandra, subject to which he purchased the property, as stated in the Indenture, There being no such express covenant, the Subordinate Judge ought not to have made a decree in favour of the plaintiff The second point urged was that the learned Subordinate Judge is wrong in holding that the suit is not barred by limitation. The Subordinate Judge held that Article 116, read with Article 83, of the Limitation Act is applicable to this case and as the payment was made on the 23rd July, 1922, the present suit has been brought within the period of limitation. It is contended that as there was no contract to indemnify, Article 83 has no application. Besides as there is no contract in writing and registered, on which the plaintiff can base his case, Article 116 has no application.

3. The learned Advocate for the appellant concedes that the defendants were bound to pay a rateable amount of the mortgage money which was a charge on the 5 cottas plot, because the mortgage on that piece of land has been paid off by the plaintiff. But he says that the present suit is not for recovering any such amount which could only be ascertained on evidence as to the respective value of the properties on the 3rd July, 1922, for a rateable distribution. Besides he contends that any claim for such contribution was barred by limitation at the date of the suit.

4. The learned Advocate for the plaintiff respondent concedes that on a proper reading of the Indenture dated the 3rd March, 1921, it would appear that there is no express covenant to indemnify with reference to any payment which the plaintiff was compelled to make in order to exonerate the property from the charge of Khirod. But he supports the decision of the learned Subordinate Judge on the ground that there is an implied covenant under which the plaintiff is entitled to claim compensation as against the vendors. He refers to Section 55, sub-s. (1), Clause (g) of the Transfer of Property Act in support of his contention. His argument shortly stated comes to this, that here the property was sold subject to the incumbrance of Khirod. According to the provision of that clause, the seller was bound to pay interest due on the incumbrances on the property sold on the date of sale. But for the covenant in the Indenture that the purchaser would have to pay Rs. 16,300 to the mortgagee, the seller under the provision of that clause would, have been bound to pay the whole of the interest due up to that date and although the purchaser bought the property subject to the incumbrance, he would have to pay only the principal and the interest accrued subsequent to the date of sale. He, therefore, contends that although the reasoning of the learned Subordinate Judge cannot be supported, the decree made by him is quite correct. Under the express covenant in the Indenture the plaintiff was only bound to pay Rs. 16,300 in discharge of the incumbrance; but under the implied covenant according to the provisions of the law the seller was bound to pay the balance of the mortgage amount

5. With regard to the question of limitation the learned Advocate argued that Article 116 is applicable, because the claim arises under an implied covenant in the Indenture of sale which is a registered instrument. In support of his contention he relied on the case of Krishnan Nambiar v. Kannan 21 M. 8.

6. The respondent arises an interesting point of law not quite free from difficulty. We have heard the careful argument on both sides. The learned Advocate for the appellant contends that the provisions contained in Section 55, sub-s. (1), Clause (g) of the Transfer of Property Act are not implied covenants for the breach of which, a purchaser after the completion of the purchase can claim damages, or ask for rescission of the contract. His argument is that under sub Section 1 of Section 55, the seller is bound to do certain things in the absence of a contract to the contrary before the completion of the purchase, There are certain provisions which according to the section itself would render the seller liable on the ground of fraud. This is stated in the last paragraph of that section, as follows: 'An omission to make some disclosures as are mentioned in this section, para (1), Clause (a) and para. (5), Clause (a) is fraudulent.' There are certain provisions in para. (1) which relate to acts to be done by the seller liable after the conveyance is complete. But other provisions in para. (1) of the section relate to things which the seller is bound to do before the completion of the purchase; and he contends that after the purchase is effected and the transaction completed, the purchaser cannot hold the Seller for non-compliance with any of those conditions unless there is any express covenant in the deed under which the seller is liable He relies in support of his contention on certain observations made in the well-known commentaries of Shephard and Browne on the Transfer of Property Act, Seventh Edition. At page 192, the learned authors Bay: 'The distinction between the antecedent contract and the conveyance, between the duties of the parties before and after the sale, is not clearly marked in the section. The rules contained in the first paragraph, with the exception of Clause (f) Clause (a) of the fourth paragraph and in Clauses (a) and (b) of the fifth paragraph, refer to matters antecedent to the sale and should, therefore, be taken with the provisions of the Specific Relief Act relating to the contract between seller and buyer. On the other hand, Clause (f) of the first paragraph, para. 2. para. (4)(6), para. (5)(c),{d) and pars. (6)(a) and (b) define the relation of the parties after the. sale. The purchaser's rights stated in para, (3) and para. (6)(6) depend on payment having been made by him and not the contract alone.' Before that passage they say that, except on the ground of fraud, which term includes any such omission as is mentioned in the last paragraph of the section, or under the covenant for title or some express contract, for compensation, the purchase-money cannot be recovered or damages claimed. It is urged that this matter not falling within the ground of fraud or of any express contract for compensation, the money that was claimed by the plaintiff is not recoverable from the sellers. As an illustration, the learned Advocate points out that if there is no express covenant for indemnity in case there is a misdescription in the area of the property sold, and the purchaser finds that the area is less than what was stated in the sale-deed he is not entitled to any damages for the defect in area. In support of this contention the case of Abdullah Khan v. Abdur Rahman Beg 18 A. 322 may be cited. The question, therefore, is this: Is there an implied covenant in the deed of sale for the breach of which the purchaser is entitled to damages or is it one of the obligations which the seller was bound to discharge before the completion of the sale? If there was no express covenant with regard to it, whether after the sale, the obligations should not be in accordance with the rights of the parties to the property? It is centended by reference to the case of Waring v. Ward (1802) 7 Ves. 332 at p. 337 : 5 R.R. 130 : 32 E.R. 136 which has been referred to in the judgment of the Privy Council in the case of Izzat-un-nissa Begam v. Kunwar Partab Singh 3 Ind. Cas 793 : 36 I.A. 203 at p. 209 : 13 C.W.N. 1143 : 10 C.L.J. 373 : 6 A.L.J. 817 : 11 Bom. L.R. 1220 : 6 M.L.T. 277 : 19 M.L.J. 682 : 31 A. 583, (P.C.) that after the purchase of the equity of redemption the purchaser is bound to discharge the incumbrances. However, that may be, it seems tome that in this case the purchaser took the property subject to the liability on the mortgage of Khirod. The amount that was stated in the Indenture as, due to the mortgage was the actual amount found due under the mortgage-decree then made by the Court, and, by the indenture of sale, the purchaser undertook to discharge the entire amount of the liability to Khirod as was found according to the decision of the Court. But the decree was amended by an order subsequent to the purchase of the plaintiff. If, by the amendment, the amount had been reduced, the plaintiff would have profited by it. As the amount was increased the plaintiff was bound to pay the entire amount On a proper construction of the instrument, it seems to me that the plaintiff was bound to discharge the incumberance of Khirod entirely and not merely to pay the sum mentioned in it. In the absence of any express covenant to the effect that the seller would be bound to pay any excess due on the mortgage, the plaintiff is not entitled to the amount claimed by him. After carefully considering the arguments of both sides, it seems tome that the contention on behalf of the appellant that the provision under Section 55, para. (1)(g) is one which cannot be enforced against the vendor without an express covenant after the completion of purchase is sound. There is no question of fraud in this case as the vendors stated the exact amount then decreed to the mortgagee.

7. With regard to the question of limitation also, I agree with the contention on behalf of the appellant. It is true it has been held, as contended by the learned Advocate for the respondent, that where there is an implied covenant arising out of a deed which is in writing and registered, the period of limitation would be governed by Article 116 of the Limitation Act. But this is not a covenant which can be implied from the sale-deed and Article 116 of the Limitation Act would not apply, The authority for this proposition is to be found in the case of Avuthala v. Dayumma 24 M. 233 where the case of Krishnan Nambiar v. Kannan 21 M. 8 cited on behalf of the respondent is considered and distinguished. It was pointed out that under Section 55, para. (2) there is an implied covenant of title by the seller and, therefore, any suit for the breach of that covenant would be covenant under Article 116 of the Limitation Act, but not such a case as this.

8. The result, therefore, is that the judgment and decree of the learned Subordinate Judge must be set aside with costs against the plaintiff-respondent in this Court as well as in the lower Court.

9. As this is not a suit for contribution for a rateable amount charged on the 5 cotta plot, we need not say anything with regard to the right of the purchaser to claim any portion of the money which he paid for redeeming both the properties. That matter is left open. The defendants-respondents will bear their own costs.

N.K. Bose, J.

10. I agree.


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