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1906 DIGILAW 199 (ALL)

Ramdin v. Muhammad Ikram-Ud-Din

1906-08-07

RUSTOMJEE, STANLEY

body1906
JUDGMENT : STANLEY, C.J.:— This appeal arises out of a suit for damages for an alleged breach of contract in the sale of immoveable property belonging to one Pandit Ramdin, who has been adjudged a lunatic by the District Judge of Shahjahanpur. It appears that Pandit Ramdin was in difficulties, and it was found necessary or desirable to sell a portion of his property in order to satisfy his debts, and accordingly the defendant-appellant, Ram Lal, who was manager of the estate of Pandit Ramdin, was authorised to negotiate a sale, and the defendant, Babu Harnath Singh, who is a pleader, was associated with him so that his advice and help might be available in the matter of the proposed sale. On the 28th of September, 1901, Ram Lal and Harnath Singh entered into a preliminary agreement with the plaintiff, Hakim Muhammad Ikram-ud-din, for the sale of two villages, for a sum equivalent to about 16 years' purchase of the average yearly profits of the village. On the 1st of October, 1901, the purchaser paid a sum of Rs. 500 to the defendants as earnest money, and on the 4th of January, 1902, a further sum of Rs. 95 for the purchase of stamp-paper. It also appears that on the 7th of January, 1902, he drew from his deposit account in the Allahabad Bank at Bareilly a sum of Rs. 9,000 for the purpose of carrying out the sale. All these payments were premature, for the sanction of the Court to the sale had not been obtained. Under section 14 of the Lunatic Estates Act, Act XXXV of 1858, a manager cannot sell or mortgage the estate of a lunatic for whom he is acting as manager or any part of it without the order of the Civil Court previously obtained. The Civil Court refused to sanction the sale in this case and the negotiations for a sale therefore proved abortive. The plaintiff then brought the suit, out of which this appeal has arisen, to recover damages for breach of the alleged contract, and claimed as portion of his damages interest on the Rs. 9,000 which he withdrew from the Allahabad Bank for the purposes of the sale. The plaintiff then brought the suit, out of which this appeal has arisen, to recover damages for breach of the alleged contract, and claimed as portion of his damages interest on the Rs. 9,000 which he withdrew from the Allahabad Bank for the purposes of the sale. Now, in the first place, we may point out that his suit is misconceived in this respect, that he cannot claim damages for breach of contract seeing that there was no valid contract between the parties. The manager, much less the gentleman who was deputed to advise him, had no authority to enter into any binding contract for the sale of the property of the lunatic. The real cause of action which the plaintiff had, was to recover the moneys which he had paid on foot of the proposed sale as money paid for a consideration which failed. 2. The Court of first instance gave a decree for the return of the Rs. 500 earnest money and also for return of the stamp paper for which Rs. 95 were paid within a week from the date of the decree, and in default of payment within that time, the Court directed that interest should be payable at the rate of 6 per cent, per annum from the date fixed for payment. 3. On appeal the learned District Judge not merely gave a decree for the sum of Rs. 595 and interest thereon from the 4th of January, 1902, but also interest on the balance of the sum of Rs. 9,000, which was withdrawn from the Bank at the rate of 2 per cent, per annum from the 7th of January, 1902. The learned District Judge seems to think, as appears from his judgment, that the two defendants as manager and adviser were capable of entering into a binding contract on behalf of the lunatic, but this, as we have pointed out, was clearly not the case. He says in the course of his judgment: “It is quite clear that the defendants broke their contract.” The defendants did not enter into any contract on their own behalf at all. The negotiations for the sale took place between them as agents for the lunatic and not as principals and there was no contract binding on the lunatic in view of the fact that the Civil Court did not sanction the proposed sale. The negotiations for the sale took place between them as agents for the lunatic and not as principals and there was no contract binding on the lunatic in view of the fact that the Civil Court did not sanction the proposed sale. We therefore fail to see what justification there was for giving to the plaintiff interest on the money withdrawn from the Bank for the purpose of completing a sale in respect of which there was no binding contract. The withdrawal of the money was altogether premature. The plaintiff is clearly entitled to recover the Rs. 595 from the two defendants who received the same and gave a receipt for it, that is, Ram Lal and Harnath Singh. We think that he is also entitled to interest on that sum from the 4th of July, 1904, the date on which the plaintiff gave notice to the defendant, Harnath Singh, requiring repayment of the earnest money and V the value of the stamp paper, but from no earlier date. We therefore allow the appeal and set aside the decree of the lower appellate Court, and in lieu of it give a decree to the plaintiff for the sum of Rs. 595, with interest, at the rate of 6 per cent, per annum, from the 4th of July, 1904, until the date of payment. We think under all the circumstances that the best order we can make as to costs is to direct that the parties respectively bear their own costs in all Courts.