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1963 DIGILAW 16 (GUJ)

SURENDRA MAGANLAL KATHIA v. BAI NARMADA WD/o. JETHALAL KHEMCHAND

1963-01-31

V.B.RAJU

body1963
V. B. RAJU, J. ( 1 ) THIS revision application is directed against an order of discharge of the accused who were charged under sec. 420 read with sec. 34 I. P. Code. The case against them was that the four opponents who will hereinafter be referred to as the accused entered into an agreement for the sale of a house although at that time there was an injunction order of a civil court issued to them under which they were prohibited from selling the property. It was therefore contended that the complainant was deceived as the fact of an injunction order was concealed from the complainant by the accused and that as a result of this deception the complainant gave Rs. 8 0 to the accused. The learned Magistrate held that the accused were not bound to disclose to the complainant that there was an injunction order of a civil court. He therefore thought that the matter was one of a civil nature and therefore discharged the accused. ( 2 ) IN revision it is contended that the order of discharge is wrong. Exception to sec. 415 I. P. Code provides that a dishonest concealment of facts is a deception within the meaning of that section. On the question as to whether there can be a concealment of facts when there is no duty to speak or to disclose the facts there has been a difference of opinion among the High Courts. It was held in Karachi Municipality v. Bhojraj A. I. R. 1915 Sind 21 that no concealment of a fact is dishonest within the meaning of sec. 415 I. P. Code unless there is a legal obligation to disclose it. But this view was not accepted by the Allahabad High Court in Banwarilal v. The State A. I. R. 1956 Allahabad 341 where the following observations are made:- -THE explanation to sec. 415 makes it clear that dishonest concealment of fact is a deception within the meaning of the section. It is to be noted that the concealment of fact that is said to be a deception is dishonest concealment and not illegal and deliberate concealment. If a statute requires a person to mention a fact and he conceals it it is illegal and not necessarily dishonest concealment of the fact. It is to be noted that the concealment of fact that is said to be a deception is dishonest concealment and not illegal and deliberate concealment. If a statute requires a person to mention a fact and he conceals it it is illegal and not necessarily dishonest concealment of the fact. ( 3 ) THIS concealment may be deliberate or conscious or may be accidental or bona fide arising out of ignorance of law. Accidental or bona fide concealment even though it is illegal may not be said to be deception but according to the authorities mentioned above dishonest concealment is not deception unless it is illegal and deliberate. The language of the explanation is however different. It does not make deliberate and illegal concealment deception; instead it makes dishonest concealment deception. ( 4 ) IT may be contended that concealment of a fact is rot quite the same thing as more refraining from stating it and that something more than mere refraining from stating a fact is required to constitute concealment. But that something need not be a statutory provision compelling exposure of the fact; any other duty such as arising out of the circumstances in which the parties are placed and the nature of the negotiations between them is enough. Also any act done or precaution taken to prevent the fact from being brought to the notice of the other party is concealment even in the absence of a duty to state it. . . . . . . . . . . . . . . . ( 5 ) CONCEALMENT can be dishonest even in the absence of a legal obligation to speak. Dishonesty has nothing to do with infringement of the law; it depends upon the state of mind at the time of the concealment or the intention behind it. If the intention is dishonest the concealment is dishonest even in the absence of a duty to speak. ( 6 ) AS observed above a concealment of a fact is not quite the same thing as mere refraining from stating it and something more than mere refraining from stating a fact is required to constitute concealment. But fact may be concealed although there is no legal duty to mention the fact. The idea of concealment has nothing to do with the idea of legal duty to speak. But fact may be concealed although there is no legal duty to mention the fact. The idea of concealment has nothing to do with the idea of legal duty to speak. A concealment of facts may be dishonest without being illegal and may be illegal without being dishonest. Section 415 I. P Code does not deal with illegal concealment of facts but with dishonest concealment of facts. For the purpose of sec. 415 I. P. Code the concealment of fact need not be illegal if it is dishonest. ( 7 ) THE Question therefore is whether there has been a concealment of fact when the accused had not mentioned to the complainant the fact that there was an injunction order of a civil court restraining them from selling the property at the time when they entered into an agreement to sell the property. It is true that they did not sell the property but they merely agreed to sell the property. A perfected conveyance had not been executed but there was only an agreement to sell. ( 8 ) THERE has been a difference of opinion among High Courts on the question whether sec. 55 of the Transfer of Property Act applies to an agreement to sell immovable property or whether it applies only to a completed conveyance. The difference of opinion amongst the various High Courts has been referred to in Deep Chandra v. Sajjad Ali Khan A. I. R. 1951 Allahabad 93. In that case two of the learned Judges namely Agarwala J and Wanchoo J agreed that sec. 55 of the T. P. Act also applies when there is a mere contract for sale and before a conveyance has been executed. The learned Judge Agarwala has discussed the question at length and has given various reasons in support of his conclusion. He has expressed his reasons in the following words:- -TO my mind the warranty of title embodied in sec. 55 (2) T. P. Act attaches to and is implicit in every contract of sale assuming of course there is no contract to the contrary. I arrive at this conclusion for two reasons. First that the language of sec. He has expressed his reasons in the following words:- -TO my mind the warranty of title embodied in sec. 55 (2) T. P. Act attaches to and is implicit in every contract of sale assuming of course there is no contract to the contrary. I arrive at this conclusion for two reasons. First that the language of sec. 55 (2) is applicable both to a conveyance as well as to a contract of sale and second even if the language applied to conveyances alone in the very nature of things the warranty of title implied in a sale deed will be implied in a contract of sale also. ( 9 ) HE has further observed that the language of sec. 55 (2)of the T. P. Act refers both to a contract to sell as well as to a sale deed. I am in entire agreement with the view of Agarwala J. because the words buyer and seller as used in sec. 55 (2) T. P. Act do not refer merely to a person who has already purchased or sold a property but refer also to a person who intends to buy and intends to sell the property. For instance under sec. 55 (1) (b) T. P. Act the seller is bound to produce to the buyer on his request for examination all documents of title relating to the property which are in the sellers possession or power. The examination of documents is before the execution of a conveyance and not after the conveyance. Under sec. 55 (1) (d) T. P. Act the seller is bound on payment of the amount due in respect of the price to execute a proper conveyance. It is therefore clear that a person who execute an agreement to sell property is regarded as a seller for the purpose of this section. Clause (e) of sec. 55 (1) T. P. Act also provides that the seller is bound between the date of the contract of sale and the delivery of the property to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents. It is therefore clear that the words buyer and seller in sec. It is therefore clear that the words buyer and seller in sec. 55 (2) of the Transfer of Property Act refer also to a person who has entered into an agreement for sale of property and also to a person who has entered into a contract for the purchase of property and not merely to a person who has purchased the property or who has sold the property. I therefore entirely agree with the observations of the learned Judge Agarwala J that in the entire sec. 55 the words `buyer and `seller are used as referring to the stage when the sale deed has been executed and to the stage before the execution of the sale deed and the words seller and buyer include both a person who has agreed to sell and agreed to buy and also a person who has actually sold and who has actually bought. Although there has been a difference of opinion among the various High Courts I am in entire agreement with the view taken by Agarwala J. For the reason mentioned above I hold that sec. 55 of the Transfer of Property Act applies even at the stage where there is a contract to sell immovable property as in the present case. ( 10 ) SUB-SEC. (2) of sec. 55 of the Transfer of Property Act provides that the seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same. It is true that sub-sec. (1) of sec. 55 T. P. Act applies in the absence of a contract to the contrary. In the present case it has not been suggested that there is such a contract to the contrary. In view of the fact that sec. 55 T. P. Act is subject to a contract to the contrary there is a legal duty cast on the seller to disclose to the buyer any facts affecting his interest and his power to transfer the property to the buyer. It was therefore the legal duty of the seller to inform the buyer that the accused could not then transfer the property to the buyer and that they had then no power to transfer the same of view an injunction order passed by the civil Court. It was therefore the legal duty of the seller to inform the buyer that the accused could not then transfer the property to the buyer and that they had then no power to transfer the same of view an injunction order passed by the civil Court. ( 11 ) THERE is therefore a concealment of facts in the a present case and whether the concealment of facts is dishonest or not is a matter on which it is open to both the sides to argue. ( 12 ) SO far as opponent No. 4 goes he is not the owner of the property as he has relinquished all his rights and interest in the property prior to the document and therefore the revision application against opponent No. 4 namely Rikhavchand Jethalal is dismissed So far as opponents Nos. 1 to 3 go the discharge order is set aside and the learned Magistrate is directed to frame a charge against them and to decide all the questions including the question of dishonest intention. Order accordingly. .