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Ram Raghubir Lal and Others Vs. United Refineries (Burma) Limited and Others - Court Judgment

LegalCrystal Citation
CourtPrivy Council
Decided On
Case NumberPrivy Council Appeal No. 130 of 1931 (From Rangoon)
Judge
AppellantRam Raghubir Lal and Others
RespondentUnited Refineries (Burma) Limited and Others
Excerpt:
limitation act (9 of 1908) - article 116; deed - agreement - immovable property - sale - deed - construction - (from rangoon: air 1931 rang 139) cases referred: (1). air 1916 pc 182=39 ic 156=44 ia 6 = 44 cal 759 (pc). comparative citation: 1933 air(pc) 143.....above referred to with interest to date, and in default of payment for sale of the property with a personal decree against the defendants for any deficiency. this was based originally on an alleged equitable mortgage of the property by deposit of title deeds, but by subsequent amendment it was supported by claiming a charge for unpaid purchase money. various defences were raised to the suit, but the only question of substance now material is as to the personal liability of members of the firm, i. e., appellants 1, 2 and 4. the claim to an equitable mortgage was not established, but both courts in burma affirmed the charge for rs. 2,35,000 in respect of unpaid purchase money, and the propriety of this decision has not been seriously disputed before the board. the question of the.....
Judgment:

SIR GEORGE LOWNDES:

On 15th December 1924, respondent 1 (hereinafter referred to as the company) agreed to sell to the firm of Kashi Vishwanath and Co. or their nominees or assigns, certain immovable property, in the Hanthawady District of Burma, comprising 330 acres of land and the buildings and plant of an oil refinery erected thereon. The members of the said firm were the first two appellants before the Board and a third partner now deceased and represented by appellant 4. The consideration for the sale was set out in the agreement and included the sum of Rs. 2,00,000, which was to be paid three months after the registration of the sale-deed. On 15th January 1925 the sale-deed was executed by the company as vendors, the conveyance being made by the direction of the firm to appellant 3 as their nominee. Neither the firm nor any member of it was a party to the deed, but the direction to convey to appellant 3 was recited therein, and a declaration to that effect under the signature of the firm was appended thereto. It was also recited that in respect of the Rs. 2,00,000 a joint and several promissory note had been executed by the firm and appellant 3 to secure payment of that sum three months after registration. The sale deed was registered on 17th January 1925, but the Rs. 2,00,000 was not paid, and on 22-09-1922 appellant 3 entered into an agreement for the resale of the property to respondent 2. This sale has fallen through, and for the purposes of the present appeal respondent 2 who has not appeared and against whom no relief is sought may be disregarded.

On 20th March 1928 the company instituted a suit in the District Court of Hanthawady against the partners in the firm and the purchaser (appellant 3), praying a decree for Rs. 2,35,000, being the Rs. 2,00,000 above referred to with interest to date, and in default of payment for sale of the property with a personal decree against the defendants for any deficiency. This was based originally on an alleged equitable mortgage of the property by deposit of title deeds, but by subsequent amendment it was supported by claiming a charge for unpaid purchase money. Various defences were raised to the suit, but the only question of substance now material is as to the personal liability of members of the firm, i. e., appellants 1, 2 and 4. The claim to an equitable mortgage was not established, but both Courts in Burma affirmed the charge for Rs. 2,35,000 in respect of unpaid purchase money, and the propriety of this decision has not been seriously disputed before the Board. The question of the promissory note has also gone out of the case, as it was found not to be properly stamped and therefore inadmissible in evidence. The only other question raised on the appeal was as to limitation and it will be dealt with later. The District Judge thought it sufficient to pass a decree in favour of the company merely declaring that it had a vendor's leni over the property in suit and awarding costs against the defendants. From this decree an appeal was taken to the High Court by the present appellants, and the company filed cross-objections claiming inter alia sale of the property and a personal decree for any deficiency. After a remand and a further finding by the District Judge on a question not now material, the learned Judges of the High Court delivered their final judgment on 10th September 1930. They affirmed (as already stated) the finding of the District Judge that the company had a vendor's lien over the property for the Rs. 2,00,000 with interest, but they set aside his decree as insufficient, and substituted a decree in the company's favour for

"(1) Rs. 2,35,000 (Rupees two lakhs and thirty-five thousand only) with further interest at 6 per cent, per annum from the date of suit to the date of realization, charged on the property in suit ; (2) for the sale of the said property should the amount of the decree not be paid ; (3) for a declaration that the respondent-plaintiff company's charge over the property takes priority over any interest of appellant 4 defendant 4company in the said property; and (4) for a personal decree against appellants 1,2, 3 and 5defendants 1,2, 3 and 5for any portion of the decretal amount which may not be satisfied out of the sale proceeds of the property."

They also gave the company their costs in both Courts against the same parties. It has been brought to their Lordships' notice that under S. 100 T. P. Act 1882, read, with O. 34, R. 15, Civil PC, the Court should have passed a preliminary decree for sale as in a suit on a mortgage, but no objection has been taken to the decree on this score, and as their Lordships are informed that the property has already been brought to sale, they do not think it necessary to lay stress upon this apparent irregularity. The only part of the decree to which serious objection is taken by the appellants is sub-head (4), whereby a personal liability for the anticipated deficiency is laid upon all the present appellants. It is contended that though this order may be justified (subject to the question of limitation) in the case of appellant 3, the nominee purchaser, there is no such right against the other appellants who represent the firm of Kashi Vishwanath and Co.

The determination of this question depends in their Lordships' opinion upon the construction of the sale-deed. The members of the firm were not parties to it and merely directed the vendors, as they had a right to do under the original agreement, to convey to appellant 3. The learned Judges of the High Court seem to have affirmed the liability of appellants 1, 2 and 4 merely by reason of the statement appended to the deed declaring appellant 3 to be the nominee of the firm as purchaser and consenting to the conveyance to him. Their Lordships are unable to give this effect to the statement in question. Under the original agreement the company had bound themselves to accept as purchaser either the firm or a person nominated as such by the firm, and there was no provision that in the case of a nominee the firm were to remain liable for the balance of the purchase money. The conveyance was made to appellant 3 as purchaser, reciting that the agreed part of the consideration had been made good by him, and that he was ready and willing to pay the outstanding balance of Rupees 2,00,000. Their Lordships can read this only as a substitution of appellant 3 for the firm, and as leaving no liability upon the other appellants. They are therefore of opinion that the decree of the High Court was wrong in declaring the personal liability of appellants 1, 2 and 4 for the anticipated deficiency.

The question of limitation may be shortly disposed of. Having regard to the conclusion

at which their Lordships have arrived above, the only question is whether the claim for a personal decree against appellant 3 was out of time. No issue as to limitation was raised in the District Court, but the matter was dealt with at length in the judgment of the High Court. The learned Judges held that the liability of appellant 3 arose, in virtue of the conveyance, upon a contract in writing registered within the meaning of Art. 116, Lim. Act, and that the six years period allowed by that article applied, with the result that the suit was well within time. Their Lordships think that, having regard to the judgment of this Board in Tricomdas Cooverji Bhoja v. Gopinath Jiu Thakur (1)this view was manifestly correct. It is therefore unnecessary for them to consider the applicability of Art. 111, by which a shorter period is prescribed, and upon which reliance is placed for the company in a case where (as here) no time was fixed for completing the sale and the purchase money in question was not payable until some date after conveyance of the property.

For the reasons appearing above, their Lordships think that a personal decree should only have been passed against appellant 3, and that the decree of the High Court should be varied by omitting from sub-head (4) thereof the reference to appellants 1, 2 and 5defendants 1, 2 and 5, the references to appellant 5 and defendant 5 being taken to cover the present appellant 4. The order for costs must, they think, be varied in the same way, the costs of the company in both Courts being ordered to be paid by appellant 3 only. There will be no order as to costs before this Board. Their Lordships will humbly advise His Majesty to this effect.

Order accordingly.


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