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1910 DIGILAW 530 (CAL)

Digamber Das v. Srimati Nishibala Debi

1910-09-05

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JUDGMENT 1. These appeals arise out of two cross-suits in one of which the Appellant, Digamber Das, is the Plaintiff and in the other the Defendant. The events antecedent to these two litigations in so far as they are material for our present purposes lie in a narrow compass and may be briefly narrated. One Ahindra Bhusan Chatterjee, father of the Respondent, Nishibala Debi, was the owner of a reclaimed property in the Sunderbands called Shamnugger or Lakshipur or Lakshimonee in these proceedings. He had a zamindari right in a 1/5th share and a putni right in the remaining 4/5th share under certain persons called the Dutts. On the 13th March 1898, Ahindra Bhusan entered into an agreement with Digamber to transfer his interest in the property to the latter for a consideration of Rs. 18,500, out of which Rs. 5,000 was paid down as earnest money. On the 7th April 1898, Ahindra executed the conveyance and it is the common case of both parties that another instalment of Rs. 3,132 was paid at this time. For the balance of the consideration the purchaser executed a mortgage in favour of the vendor, and as the total amount of the consideration had been fixed at Rs. 18,500, the mortgage was created for the balance calculated to be due, namely, Rs. 10,368. Payments were made on account of this mortgage from time to time till only Rs. 2,000 remained due on the 5th April 1900. Meanwhile, on the 2nd April 1898, one Ram Narain Patra had instituted a suit against Ahindra for recovery of possession of 500 bighas of land which he alleged were included within a neighboring chuck held by him but had been unlawfully seized by Ahindra. On the 3rd June Ahindra filed his written statement in which he stated inter alia that the property had been transferred by him to Digamber Das. This written statement of Ahindra proves beyond all controversy that the land then in dispute was claimed by Ahindra as included within his property which he had transferred to Digamber; in fact, this written statement completely negatives the suggestion made in this Court by the representative of Ahindra that the disputed land had not been transferred by him to Digamber but had been unlawfully seized by the latter at his own risk and upon his own responsibility. The effect of the written statement of Ahindra was that Digamber was added as a party to the suit on the 6th June 1898. During the pendency of that litigation Ahindra died and on the 14th September 1899 his widow, Jibantara, was brought on the record as his legal representative. On the 12th December 1900, the suit of Patra was dismissed on the ground that he had no interest in the property and his grandfather was the person beneficially interested. Ram Narain Patra thereupon took a deed of gift from his grandfather and on the 19th March 1909 commenced a fresh suit against Jibantara and Digamber. He prayed for recovery of possession of 500 bighas of land and for mesne profits from the 12th April 1897 to the date of delivery of possession. A Commissioner was appointed to demarcate the boundaries between the two proper ties claimed respectively by the Plaintiff and the Defendant. His report was to the effect that out of 500 bighas in dispute about 133 bighas belonged to the then Plaintiff, Ram Narain. The Subordinate Judge, however, decreed the claim in full and made the Defendants liable for cost to the extent of Rs. 1,472 and mesne profits to be asses (sic ) xtension of the decree. (sic) pealed to this Court and (sic) parties Respondents to (sic) Plaintiff, Ram Narain, and (sic) ant, Jibantara. The latter (sic) May 1905 during the pendency of the appeal and thereupon Nishibala, the daughter of Ahindra, was brought on the record as his representative in interest. on the 25th June 1906, by consent of parties this Court varied the decree of the original Court. The Plaintiff was allowed a decree for possession of 133 bighas only and he abandoned all claim for mesne profits and costs. By consent of parties, it was further directed that the name of Nishibala be struck out of the record of the suit. There has been some discussion at the Bar as to the precise meaning and effect,of this part of the order. But we feel no doubt that what was intended was to dismiss the suit as against Nishibala. This in fact would be obviously appropriate, because after the sale by Ahindra to Digamber the contest would be restricted to Ram Narain Patra and Digamber Das. But we feel no doubt that what was intended was to dismiss the suit as against Nishibala. This in fact would be obviously appropriate, because after the sale by Ahindra to Digamber the contest would be restricted to Ram Narain Patra and Digamber Das. On the 13th September 1907, Nishibala commenced one of the suits now before us for recovery of the money still due on the mortgage. Digamber Das defended the suit on the ground that as the mortgage had been executed for the balance of the consideration for the sale and as the consideration had partially failed, nothing was due on the mortgage. On the other hand Digamber complained that he had a legitimate grievance because by reason of the omission of his vendor to inform him that the title to the property was disputed he had been needlessly involved in a costly litigation and he consequently in his turn commenced a suit on the, 2nd September 1908 against Nishibala for recovery of damages. The two suits were by consent of parties tried together in the Court below. The Subordinate Judge has held that as Digamber" and purchased the property after enquiry he was not entitled to claim any damages for partial failure of consideration and that the consent decree between Ram Narain and Digamber Das was collusive. In this view, the Subordinate Judge has decreed the mortgage suit of Nishibala and dismissed the damage suit of Digamber. Digamber has now appealed to this Court against both these decrees and the position taken up on his behalf has substantially been that Ahindra fraudulently omitted to inform him that the title was disputed, that as a result he has not only been dispossessed of 133 bighas of land but has had also to incur heavy costs in an expensive litigation and that consequently the obvious justice of the case requires that he should be indemnified by the representative in interest of Ahindra. This position has been strenuously controverter on behalf of the Respondent and it has been argued that there was no fraud on the part of Ahindra, that Digamber purchased the property entirely at his own risk, that the claim of Ram Narain was wholly unfounded, that the consent decree was improvident if not collusive, and that in any event, under the terms of the conveyance, the vendor was not liable to indemnify the purchaser in the events which had happened. It has also been contended on behalf of the Respondent that the claim for damages is barred by limitation. 2. In so far as the suit to enforce the mortgage security is concerned, it is in bur opinion fairly clear that the Plaintiff cannot succeed if the Defendant establishes that there has been a failure of consideration to the extent of Rs. 2,000-left due" on the 5th April 1900. The conveyance and the mortgage deed were parts of the same transaction. No doubt in the mortgage instrument, it was stated that the sum secured was Rs. 10,368. But the recitals stated expressly that this was due as the unpaid consideration for the conveyance executed on the same day. The substance of the transaction was that the purchaser took the conveyance and as he was unable to pay the whole of the consideration in cash, he executed a mortgage security for the unpaid balance. If there-forest subsequently transpired that the purchaser was entitled to a deduction from the price settled because the vendor had failed to transfer what he had agreed to sell, the consideration for the mortgage would also be reduced portent. The intention of the parties obviously was that the properties purchased by Digamber should continue as a security for the unpaid balance of the purchase-money, which at the time was assumed to be Rs. 10,368 on the hypothesis that the vendor had a good title to all that he professed to convey. We must therefore proceed to consider whether the Appellant as Defendant in the mortgage suit has established that there has been a failure of consideration and if so to what extent. 3. Now it is perfectly clear that apart from all questions of fraud, the purchaser is entitled to the benefit of sec. 55, sub-sec. 2 of the Transfer of Property Act. 3. Now it is perfectly clear that apart from all questions of fraud, the purchaser is entitled to the benefit of sec. 55, sub-sec. 2 of the Transfer of Property Act. It may be conceded that a vendor is not bound to mention to the purchaser mere claims put forward by third persons, unless the vendor is asked whether he knows of any claims, [Brownlie v. Campbell 5 App. Cas. 925 at p. 944 (1880).]. In the case before us, there is nothing to show whether any such enquiry was made by the purchaser. but we are unable to adopt the suggestion of the Respondent that there was (sic) of the sale no serious disentitle to the property. (sic) een transactions in 1891 to (sic)the owners of the adjoining (sic) Ahindra or his predecessor which (sic) that there was a substantial controversy and as a matter of fact the suit by Ram Narain was instituted against him shortly before the sale by the latter to Incumber. Under such circumstances it may be a matter of some nicety to determine whether there was mere silence on the part of the vendor or a passive acquiescence in the purchaser's self-deception as it is put by Cockburn, C. J., in Smith v. Hughes L. R. 6 Q. B. 597 (1871). But we are not prepared to say that there was any industrious concealment as it is put in Shirley v. Starton 1 Brown C. C. 440 (1785). on the part of the vendor, much less any aggressive deceit as is put in Keats v. Cadogan 10 C. B. 591 (1851). It is not necessary, however, to consider the conduct of the vendor because in our opinion under sub-sec. L. R. 6 Q. B. 597 (1871). of sec. 55 of the Transfer of Property Act, the seller must be deemed to have contracted with the buyer that the interest which he professed to transfer subsisted and that he had power to transfer the same. That there has been breach of this covenant admits of no reasonable doubt. It has been suggested on behalf of the Respondent that as the suit of Ram Narain was dismissed against Nishibala and a consent decree made between the other parties, she is not bound by the ultimate result of that litigation. It may be conceded that the position is unassailable that she is not concluded by it. It has been suggested on behalf of the Respondent that as the suit of Ram Narain was dismissed against Nishibala and a consent decree made between the other parties, she is not bound by the ultimate result of that litigation. It may be conceded that the position is unassailable that she is not concluded by it. But it cannot be disputed that the proceedings furnish weighty evidence against the Defendant. She or her predecessor was a party to the suit in the original Court. The report of the Commissioner shows that the claim was well-founded in respect of at least 133 bighas. The original Court made a decree for the entire disputed land. The Defendant did not prefer any appeal against this decision. She at any rate accepted it as unassailable. It was Digamber alone who challenged it by way of appeal and ultimately entered into the compromise previously related. The suggestion that the compromise was collusive is wholly unfounded. No attempt has been made on behalf of Nishibala to show that her father had a good title to the disputed 133 bighas. In our opinion, the position cannot be seriously contested for a moment that there has been a failure of consideration to the extent of this 133 bighas and that without any fault on the part of the purchaser. It is firmly settled that a purchaser may well compromise or refer to arbitration any adverse claim made upon him which would be covered by the vendor's covenant of title, without giving notice to the vendor of the claim on the proceedings, and he will be entitled to recover under the covenants the amount paid or awarded to be paid by him as compensation and costs to the claimant. Great Western Ry. Company v. Fisher [1906] 1 Ch 316. The only qualification to the rule is that if the vendor has no notice of the claim and of the intention to compromise it, he would be at liberty to prove in defence that the claim was unfounded either wholly or partially or that he could have made better terms than the purchaser or that the purchaser made an improvident bargain, and in these respects he would have to bear the burden of proof. His position is worse if with notice of the claim he declines or fails to remove or contest it himself. His position is worse if with notice of the claim he declines or fails to remove or contest it himself. He cannot then even allege any such ground of defence Smith v. Compton 3 B. & Ad. 407 (1832).; Williams on Vendors 1050; Dart on Vendors 802. The case before us is really much stronger than any to be found in the books. Here the vendor was a party to the suit and quietly acquiesced in the adverse decision by the original Court. She cannot now successfully turn round and contend that the compromise which took place in her presence in the Appellate Court and without any protest on her part that it was improvident. We must therefore take it as settled beyond the possibility of dispute that Digamber has been deprived of 133 bighas of land which he had purchased on the faith of the convenant for title impliedly given by his vendor. It has been argued, however, on behalf of Nishibala on the authority of the decision in Subramania v. Samina I. L. R. 21 Mad. 64 1697). as the representative of the vendor that the purchaser is not entitled to be indemnified because there is an express covenant to the contrary in the conveyance. Reliance has been placed upon a clause in the conveyance in which the vendor declares that he had not made any gifts, sale or mortgage of the property, nor created any kind of encumbrance thereon and then covenants that if any loss or damage is sustained by the purchaser on account of any such encumbrance he and his representative would indemnify him. This is followed by a clause that if damage was sustained from any other cause the vendor would not be responsible therefore. We are unable to uphold the contention that this clause is comprehensive enough to negative the liability of the vendor in the events which have happened. The vendor undertakes to indemnify the purchaser if it should turn out that the property was in any respect (sic) which is comprehensive enough to mean subject to claim or liability of any kind. It must further be remembered that when reliance is placed upon an express contract to exclude the operation of the statute, the contract to be binding must be expressed in plain and unambiguous language. It must further be remembered that when reliance is placed upon an express contract to exclude the operation of the statute, the contract to be binding must be expressed in plain and unambiguous language. As Vice-Chancellor Knight Bruce put it in Sexton v. Mapt 2 Collyer 556 at p. 562 (1846). when a vendor sells property under stipulations which are against common right and place the purchaser in a position less advantageous than that in which he would otherwise be, it is incumbent on the vendor to express himself with reasonable clearness; if he uses expressions reasonably capable of misconstruction or if he uses ambiguous words, the purchaser may generally construe them in the manner most advantageous to himself. The special covenant upon which the representative of the vendor relies is in our opinion wholly insufficient to relieve her from the liability she has incurred by reason of the breach of the covenant implied under sec. 55, sub-sec. (2) of the Transfer of Property Act. 4. The question therefore arises what is the value of the 133 bighas of land of which the purchaser has been deprived. As we have already stated the total area was assumed to be 4,800 bighas and the vendor had proprietary interest in one-fifth of this and a Putni interest in the remainder. The rent payable is stated to be Rs. 2,000. The result of the loss of 133 bighas has therefore been that the purchaser has got so much quantity of land less out of the assets of which to pay the superior zemindar. The annual loss of the Defendant work out at Rs. 57 a year and capitalized at 20 years' purchase this represents Rs. 1,140 and the value of 133 bighas at about Rs. 10 a bigha which was the value put by Ram Narain Patra in his suit comes to Rs. 1,330. The total loss therefore would even upon the most moderate estimate fully cover the Rs. 2,000 claimed on the mortgage. It is obvious, therefore, that there has been a failure of consideration to the extent of not less than Rs. 2,000 and the mortgage-debt ought to be reduced to that sum. In this view nothing is due to the mortgagee and her suit ought to fail. 5. 2,000 claimed on the mortgage. It is obvious, therefore, that there has been a failure of consideration to the extent of not less than Rs. 2,000 and the mortgage-debt ought to be reduced to that sum. In this view nothing is due to the mortgagee and her suit ought to fail. 5. We have finally to consider the suit of Digamber in which he claims damages for the costs of the litigation in which he was involved after his purchase. The claim is laid at Rs. 8,825 from which Rs. 2,660 is deducted as the value of the land lost. The balance left is Rs. 6,165 but the suit is laid at Rs. 5,000 only. It has been argued on behalf of Digamber that he is entitled to the costs of the litigation and reference has been made to a passage from Mayne on Damages in which the principle applicable to cases of this description is thus stated; (8th edition, p. 253), "where an action is brought against the occupier by a person with superior title and the former compromises by paying money, he is entitled in an action upon the covenant for title to recover the whole sum so paid and his costs as between attorney and client." This principle is, in our opinion, inapplicable to the case before us. In the first place, the costs incurred by the purchaser are attributable mainly to his necessary defence against a very exaggerated claim. Ram Narain Patra as we have seen claimed to recover not 133 but 500 bighas. Even if Ram Narain had limited his claim to 367 bighas, Digamber would have incurred expenses in resisting the claim not appreciably less that what he incurred in resisting the claim for 500 bighas. In the second place, to the extent that he succeeded in the litigation he might but for the compromise have obtained proportionate costs from Ram Narain. These he voluntarily gave up and he cannot now reasonably throw the burden upon the representative of the vendor. In the third place, as the result of the compromise he was relieved from all liability for mesne profits in respect of 133 bighas from the 7th April 1898 to the 25th June 1906. In other words, if he has incurred costs in the litigation he has recouped himself out of the profits of the land for a period of over 8 years. In other words, if he has incurred costs in the litigation he has recouped himself out of the profits of the land for a period of over 8 years. If we calculate the value of these mesne profits on the basis of the rate stated by Ram Narain Patra in his plaint in the suit of 1898, they would amount to at least Rs. 350 a year for the 133 bighas. Digamber therefore must be taken to have realised in more than 8 years Rs. 3,000 approximately from the area which he ultimately lost. When therefore we take into account all these circumstances, namely, that the litigation expenses he incurred were caused in a large measure by the unfounded claim of Ram Narain Patra for which his vendor was in no way responsible, that he voluntarily gave up costs which in the event of ultimate success he might have been awarded, and that he has realized a substantial amount as profits from the 133 bighas which he obtained from his vendor though he finally lost it, it appears to us to be reasonably plain that there will be no failure of justice if we refuse to allow him any damages in the shape of litigation expenses against the representative of his vendor. In our opinion, the claim of the purchaser for damages is as unsustainable as the claim of the vendor mortgagee for the unpaid balance of the purchase-money. The result, therefore, is that in reversal of the decree in the mortgage suit and in modification of the decree in the damage suit, we dismiss both the suits and direct the parties to bear their costs in both the litigations.