Research › Browse › Judgment

Supreme Court of India · body

1916 DIGILAW 84 (SC)

SHRINIVASDAS BAVRI v. MEHERBAI

1916-12-07

LORD PARKER OF WADDINGTON, LORD SUMNER, SIR JOHN EDGE, SIR LAWRENCE JENKINS

body1916
Judgement Appeal from a judgment and decree of the High Court (November 11, 1914) affirming a judgment of McLeod J. By an agreement dated October 18, 1913, the respondents agreed to sell property at Napean Sea Road in Bombay to the appellant for Rs.65,000. The agreement provided that the purchaser should pay Rs.5000 as deposit on the execution of the agreement and that the purchase should be completed within two months. Clause 5 was in the following terms "that the vendors shall deduce a marketable title, free from all reasonable doubts, to the said property, and shall at their own costs clear all defects in and complete the title, and shall soon after the execution of these presents deliver, or cause to be delivered to the purchaser, or his solicitors, all the deeds and documents relating to the said property for investigation of their title thereto." Clause 6 provided for requisitions in writing after the production of the deeds and documents, and that if the vendors should be unable or unwilling to meet or comply with any objection or requisition they should be at liberty to rescind the sale, and that in that case the vendor should return the deposit without interest but with costs. The respondents were transferees of a mortgage of the property created by one Ramdas Kessowji in 1908. The title appearing from the mortgage showed that on July 31, 1888, one Tricumji sold and conveyed the land to one Shivlal, who on August 7, 1888, sold and conveyed to Ramdas Kessowji. On April 20, 1892, Ramdas Kessowji had mortgaged the property to Damoderdas Sunderdas and Gordhandas Sunderdas jointly on the terms stated in their Lordships judgment. This mortgage was effected by a deposit of the two deeds of 1888, and by a memorandum of charge registered under the Registration Act, 1877. The vendors did not produce the memorandum of charge, or the deed of July 31, 1888. They produced a certified copy of a deed of release, registered under the above Act, executed on September 30, 1902, by Gordhandas Sunderdas only, his execution being acknowledged by indorsement under the Act. By this deed, after reciting that Damoderdas Sunderdas died on July 4, 1902 leaving the executant as his only heir and legal representative, and that the mortgage had been paid off, Gordhandas Sunderdas released the property from the equitable charge. By this deed, after reciting that Damoderdas Sunderdas died on July 4, 1902 leaving the executant as his only heir and legal representative, and that the mortgage had been paid off, Gordhandas Sunderdas released the property from the equitable charge. The vendors also produced a registered copy of the deed of July 30, 1888, and a declaration by Ramdas Kessowji, made in 1911, that that deed and the release had been lost or mislaid by him and that he had not deposited either of them as equitable security. The appellant purchaser made requisitions requiring (inter alia) a declaration as to the fact that Damoderdas had no other heirs than Gordhandas Sunderdas by some respectable person acquainted with the family, also an indemnity against any possible rights which might have been created by parting with the deed of July 31, 1888, and the original release of December 30, 1902, which deeds Ramdas Kessowji had declared to be lost. The respondents by their answers stated that the release itself showed that the moneys were paid off and that the return of the deeds to Ramdas was sufficient; they declined to procure the declaration required. They also declined to give the required indemnity. After correspondence between the respective solicitors the appellants solicitors cancelled the contract and demanded the return of the deposit. On July 14, 1914, the appellant filed a plaint and issued an originating summons under r. 210 of the High Court Rules, asking the Court to determine whether he had rightly cancelled the contract, and whether the respondents had made out a reasonable title free from reasonable doubt. The summons was heard by McLeod J., who held that the respondents had made out a title in compliance with the agreement. Upon appeal Sir Basil Scott C.J. and Davar J. affirmed the decision. The learned judges were of opinion that the Registrars copy of the release of. December 30, 1902, was good secondary evidence to the indorsement made under the Registration Act, 1877 ; having regard to the indorsement, there was no reasonable doubt that the charge had been satisfied. With regard to the failure to produce the deed of July 31, 1888, they thought it highly improbable that Ramdas Kessowji had created a charge by the deposit of the deed, and that, having regard to his declaration in 1911, that objection also failed. 1916. Nov. 9, 10. With regard to the failure to produce the deed of July 31, 1888, they thought it highly improbable that Ramdas Kessowji had created a charge by the deposit of the deed, and that, having regard to his declaration in 1911, that objection also failed. 1916. Nov. 9, 10. Upjohn, K.C., and Sir W. Garth, for the appellant. The original charge of April 26, 1892, was not produced, nor was there any evidence of a discharge which would be conclusive against Damoderdas Matson v. Dennis (( 1864) 4 D. J. & S. 345.) ; Powell v. Brodhurst ([ 1901] 2 Ch. 160.); Indian Contract Act, 1872, s. 45, and illustration thereto. The recitals in the release are not evidence against Damoderdas, nor does the Registration Act, 1877, make them so. The indorsement is merely evidence that Gordhandas executed the deed. The deed of 1888 has not been produced. The Limitation Act, 1908 Sched. I, art. 147, applies to any claim by the representatives of Damoderdas and provides sixty years as the limitation period Vasudeva Mudaliar v. Srinivasa Pillai. (( 1907) L. R. 34 Ind. Ap. 186.) If the period is twelve years under art. 132, then the vendors should have tendered proof that there had been no payment or acknowledgment to extend the period Scott v. Nixon (( 1843) 3 D. & War. 388, 402.); Games v. Bonnor. (( 1884) 54 h. J. (Ch.) 517.) The title deduced was not a marketable title free from all reasonable doubts. Cunliffe, K. C. and E. B. Raikes, for the respondents. Since 1866 no document, unless registered, can affect the title to immovable property in Bombay. Analogies from the English law of conveyancing must therefore be applied with caution. The agreement means that the title deduced shall be such as a reasonable person would accept. The obligation under clause 5, as under the Transfer of Property Act, 1882, s. 55, sub-s. 1 (6), was merely to produce all deeds and documents in the vendors possession. The charge of 1892 was created by the deposit of the deeds. It was not necessary to produce the memorandum of deposit, which was merely evidence of the scope of the security Indian Evidence Act, 1872, s. 114, illustration (i). The registered release and the declaration by Ramdas showed that the deeds were returned to the mortgagor; that was sufficient proof of the discharge. It was not necessary to produce the memorandum of deposit, which was merely evidence of the scope of the security Indian Evidence Act, 1872, s. 114, illustration (i). The registered release and the declaration by Ramdas showed that the deeds were returned to the mortgagor; that was sufficient proof of the discharge. A claim by Damoderdas was barred by Sched. I, art. 132, and there is nothing to suggest that there was anything to extend the twelve years allowed by that article. [Shamchand Pal v. Protap Chunder Pal (( 1897) L. R. 24 Ind. Ap. 186.) was referred to.] Dec. 7. The judgment of their Lordships was delivered by LORD PARKER OF WADDINGTON. This appeal arises in a vendor and purchaser summons on the original side of the Bombay High Court under r. 210 of the High Court Rules. The vendors were bound by their contract of October 18, 1913, to deduce "a marketable title free from all reasonable doubts" to the property they contracted to sell. The question is whether they have discharged this obligation. Both the judge of first instance and the High Court on appeal have answered this question in the affirmative. The purchaser is now appealing to His Majesty in Council. The material facts may be stated as follows On April 26, 1892, Ramdas Kessowji, the then owner of the property contracted to be sold, joined with Dwarkadas Shamji, the owner of an adjoining property, in mortgaging both properties to Damoderdas Sunderdas and Gordhandas Sunderdas to secure a lakh of rupees, with interest at 7 ½ per cent, per annum. The mortgage was effected by an agreement of charge duly registered. It appears from this agreement that the sum to secure which the mortgage was given was a debt due from the mortgagors to the mortgagees. The title deeds relating to both properties are stated to have been deposited with the mortgagees. The principal debt is made payable by two instalments of , Rs.50,000 each on September 30, 1892, and April 20, 1893, but the mortgagors were entitled to pay each instalment before its due date with interest up to the date of actual payment. Both mortgagors join in charging the properties; The agreement contains a proviso that on payment of either instalment with interest the mortgagors? Both mortgagors join in charging the properties; The agreement contains a proviso that on payment of either instalment with interest the mortgagors? or either of them, shall be entitled to redeem the title deeds of one of the properties, and that a memorandum of such payment and redemption shall be indorsed on the agreement. In order to make a title to the property the vendors must show that this mortgage has been cleared off. Their case is that about August 9, 1892, Ramdas Kessowji paid to the mortgagees the first instalment of Rs.50,000 with interest, and redeemed the title deeds of the property contracted to be sold. As evidence of this they produce a certified copy of a release, dated September 30, 1902 (less than eleven years before the date of the contract), and duly registered, whereby, after reciting such payment and redemption, and also the death of Damoderdas Sunderdas on July 4, 1902, leaving Gordhandas Sunderdas his only heir and legal representative, Gordhandas Sunderdas released the property contracted to be sold from the equitable charge created by the agreement of April 26, 1892. Obviously, if it be the fact that when this release was executed Damoderdas Sunderdas was dead, and Gordhandas Sunderdas was his sole heir and legal representative, the equitable charge was effectually released. The purchaser therefore asked for evidence of these facts, but the vendors refused to supply such evidence on the ground that the recitals in the release itself were sufficient proof of the facts recited. In their Lordships opinion, it is quite clear that the recitals in a deed are, strictly speaking, evidence only as against the parties to the deed and those claiming through or under them. If, therefore, at the date of the release Damoderdas Sunderdas were living, or if, though dead, Gordhandas were not his heir or legal representative, there would be nothing to prevent either Damoderdas Sunderdas himself or those claiming through him from disputing the truth of the recitals contained in the release. The learned judges in the Court below appear to have thought that the provisions of the Registration Act, 1877, had some bearing on this point, but if those provisions , be referred to it is quite clear that they have no effect on the value as evidence of recitals contained in a registered instrument. The learned judges in the Court below appear to have thought that the provisions of the Registration Act, 1877, had some bearing on this point, but if those provisions , be referred to it is quite clear that they have no effect on the value as evidence of recitals contained in a registered instrument. Although, however, recitals in a deed are only evidence as against the parties to the deed or those who claim through or under them, it has long been the custom of conveyancers, at any rate in this country, to provide in contracts of sale and purchase that recitals in deeds of a certain age shall be sufficient to satisfy a purchaser of the truth of the fact recited. The existence of such a custom is material whenever a purchaser is bound to accept a marketable title, for the insertion of a usual condition in a contract of resale could not be depreciatory. In this country the usual condition (now recognized by statute) is confined to deeds dated not less than twenty years before the contract, and there is no evidence of any custom among Bombay conveyancers relating to more recent deeds. In their Lordships opinion a condition making the recitals in the release of 1902 evidence of the facts recited would have been depreciatory, especially having regard to the fact that the vendors cannot produce one of the title deeds deposited for the purpose of the equitable charge or the equitable charge itself. It was argued that Damoderdas Sunderdas if living, or if dead his heirs or legal representative, must be barred by the Limitation Act. This point was not taken in either of the Courts below, and it is doubtful whether it be open to the respondents to take it before this Board. Their Lordships, however, do not consider the point to be a good one. It is perfectly possible that there have been payments on account of the principal or interest secured by the equitable charge which would preclude the operation of the statute. Their Lordships conclude, therefore, that the purchaser was justified in requiring evidence that Gordhandas Sunderdas was sole heir and legal representative of Damoderdas Sunderdas, .and that the vendors having refused to supply such evidence have not deduced the marketable title which they were bound to deduce. Their Lordships conclude, therefore, that the purchaser was justified in requiring evidence that Gordhandas Sunderdas was sole heir and legal representative of Damoderdas Sunderdas, .and that the vendors having refused to supply such evidence have not deduced the marketable title which they were bound to deduce. Under these circumstances their Lordships will humbly advise His Majesty to reverse the orders appealed from with costs here and below, and to order the return to the purchaser of his deposit with interest at the usual rate allowed in such cases by the Courts in Bombay (or in case the parties differ, at a rate to be fixed by the High Court), and the cost of investigating the vendors title.