Raja Paul David (died) and others v. M. Thiagarajan (died) and others
1990-06-13
K.M.NATARAJAN, THANIKKACHALAM
body1990
DigiLaw.ai
Judgment :- K.M. Natarajan, J.: The unsuccessful first defendant has preferred this appeal challenging judgment and decree passed by II Additional Subordinate Judge, Salem in O.S.No.567 1977. The brief facts which are necessary for the disposal of the appeal can be stated follows: Respondents 1 and 2 herein, who are the plaintiffs before the trial Court have the suit to recover the purchase-money paid by the first plaintiff in respect of Riverdale Estate and also to create a charge on the suit property. For convenience sake, array of parties before the trial Court is adopted in this appeal. The case of the plaintiffs follows: The estate called Riverdale Estate was owned by two sisters, Miss A.E.H.Short Miss M.H.Short by virtue of the will executed by their father. As per the terms of the one sister died the surviving sister should get the entire estate Miss M.H. Short known Mary became lunatic which necessitated the appointment of a manager to administer the estate. In O.P.No.34 of 1959 G.F.Muiahead and Rev.E.L.Poyser were appointed managers for the lunatic under the Lunacy Act. They moved I.A.No.66 of 1960 permission to sell the lunatic’s half share through solicitors M/s. King and Patridge Bangalore and obtained permission from Court. The Solicitors called for tenders by fixing last date as 31.8.1962. The first defendant offered to purchase for Rs.5,00,000 and I.A.No.402 of 1962 in this regard. In the meantime, the first plaintiff offered to purchase Rs.5,05,000 in I.A.No. 401 of 1962. The District Court accepted the offer of the first and rejected the offer of the first defendant. Being aggrieved by the same, defendant filed revision in C.R.P.Nos.1634 and 1635 of 1962 before this Court. A.E.H. Short, known as Alice, wanted her half share to be sold through solicitors. Hence, offer made by the first defendant and the first plaintiff was in respect of the entire The first plaintiff deposited Rs.2,52,500 towards half share of the lunatic sister. He other half share of the non-lunatic sister through her counsel. The property in its was delivered to the first plaintiff. The C.R.P. preferred by the first defendant was allowed the High Court setting aside the order passed by the District Court whereupon the Court called for fresh tenders.
He other half share of the non-lunatic sister through her counsel. The property in its was delivered to the first plaintiff. The C.R.P. preferred by the first defendant was allowed the High Court setting aside the order passed by the District Court whereupon the Court called for fresh tenders. When possession was asked for from the first plaintiff, refused to deliver possession contending that so far as the half share of the non sister was concerned, the sale price was already sent to the Solicitors which was and deposited in bank and hence there was concluded sale in respect of half share, delivery of possession of half share was effected, that his possession was lawful under of Court and that the District Court has jurisdiction only in respect of the half share lunatic sister. It was also contended that possession of half share without division possible and therefore no recovery is possible. The first plaintiff applied for return the amount which he paid in respect of the half share of the lunatic. Though application was resisted by the first defendant, the District Court passed an order return of Rs.2,25,000 retaining the balance of Rs.27,500 as security for any possible future. Against the order, an appeal was also filed. In the meantime, the lunatic sister on 17.10.1965. Hence, the non-lunatic sister became entitled to the entire estate as directions of the will. Defendants 1 and 2, purchased the entire estate on 15.4.1966 the surviving sister for Rs.5,00,000. Defendants 1 and 2 agreed and undertook to pay Rs.2,52,500 which the first plaintiff has already paid surviving sister in respect of half share which was received by her and deposited in Defendants 1 and 2 instituted the suit O.S.No.184 of 1966 for recovery of possession against plaintiffs 1 and 2 on the basis of the sale in their favour. The said suit was The first appeal (A.S.No.218 of 1973) and the second appeal (S.A.No.379 of 1975) by the plaintiffs 1 and 2 were dismissed. Defendants 1 and 2 filed O.S.No.76 of 1967 recovery of mesne profits on the basis of the findings in the prior suit O.S.No.184 commencing from 7.9.1962 to 21.7.1966. The said suit was also decreed for Rs.27,500 amount already deposited as security was transferred to the file of the said suit. Defendants 1 and 1 aggrieved by the decision with regard to quantum have preferred an appeal still pending.
The said suit was also decreed for Rs.27,500 amount already deposited as security was transferred to the file of the said suit. Defendants 1 and 1 aggrieved by the decision with regard to quantum have preferred an appeal still pending. It is in the above circumstances, the plaintiffs filed the suit for recovery Rs.2,52,500 paid towards the purchase money in respect of the non-lunatic sister with interest, creating charge over the suit property. 2. Defendants 1 and 2 filed a written statement denying the allegations and contending as follows: The plaintiffs are not entitled to rely upon the recitals in the sale and they have no right to sue the defendants on the basis of the recitals. It is further that the defendants undertook to pay the money only on the delivery of possession first plaintiff and not on the defendants taking possession of the estate. Further, there privity of contract between the plaintiff and the defendants in respect of the sale half of the non-lunatic sister. Hence, they cannot rely upon the sale deed. The plaintiffs cannot enforce the recitals in the sale deed since they are strangers to the document. The plaintiffs, who are the defendants in O.S.No.184 of 1966 and O.S.No.76 of 1977, having failed to plead that they were entitled to recover half of the purchase money, are barred from filing the present claim by res judicata and they were estopped from filing a separate suit. Defendants 1 and 2 are not bound by whatever the third defendant might have said. The cause of action disclosed is vague. The suit is also barred by limitation. There was rate of interest agreed. Hence, they prayed for dismissal of the suit. 3. The plaintiffs filed a rejoinder to the effect that there was privity of contract between the plaintiffs and the defendants and that they are entitled to claim back the amount with statutory charge over the property. The plaintiffs are not barred from raising the contentions by the rule of res judicata. It is also stated that the plaintiffs are entitled to claim interest. 4. The plaintiffs gave up the claim against the third defendant by means of an endorsement made on the plaint. Consequently, the suit against the third defendant was dismissed. 5.
The plaintiffs are not barred from raising the contentions by the rule of res judicata. It is also stated that the plaintiffs are entitled to claim interest. 4. The plaintiffs gave up the claim against the third defendant by means of an endorsement made on the plaint. Consequently, the suit against the third defendant was dismissed. 5. On the basis of the contentions raised by way of pleading the trial Court framed as many as 7 issues and two additional issues. Subsequently, they were recast as issues 1 to 6. the side of the plaintiffs Exs.A-1 to A-19 were marked and on the side of the defendants Exs.B-1 to B-5 were marked. No oral evidence was adduced on both sides. The trial Court for the reasons assigned in the judgment found issues 1 to 4 against the defendants and issue Nos.5 and 6 in favour of the plaintiffs holding that the suit is not barred by constructive res judicata by virtue of the decision in O.S.No.184 of 1966 and the plaintiffs are not estopped from claiming the suit amount. It was also found that the plaintiffs are entitled interest, that the suit is not barred by limitation and that a charge can be created over the property. Accordingly, the trial Court decreed the suit for Rs.2,52,500 with interest at 6 per cent per annum from 31.8.1966 till date of realisation with proportionate costs, creating charge on the suit property for recovery of the said amount. Aggrieved by the same, this appeal is filed. 6. Learned counsel for the appellants, Mr.G.Subramaniam mainly submitted that the present suit has no cause of action on the basis of the recitals in the sale deed Ex. A-1 in favour the defendants since the plaintiffs are not parties to Ex.A-1 sale deed. They cannot enforce it. There is no concluded contract and hence Sec.55(6)(b) of the Transfer of Property Act cannot be invoked for creating a charge. Only if a charge is created, Art.62 of the Limitation Act would apply. The plaintiffs are entitled to get return of the purchase money only peaceful delivery of possession is given. In the instant case, the defendants were constrained to take proceedings for recovery of possession. According to the counsel, the cause of action arose not from the date of taking possession but on when his right was denied.
The plaintiffs are entitled to get return of the purchase money only peaceful delivery of possession is given. In the instant case, the defendants were constrained to take proceedings for recovery of possession. According to the counsel, the cause of action arose not from the date of taking possession but on when his right was denied. In calculating limitation, it is the date of the judgment of court which was delivered on 5.8.1972, that should be taken into consideration. According him, Art.47 alone will apply and not Art.113 or 62. Lastly he would submit that there provision for payment of interest and the decree awarding interest is also not sustainable. He would submit that since Sec.55(6)(b) of the Transfer of Property Act is not there is no question of creating charge and admittedly Sec.100 of the Transfer of Act does not apply. 7. Per contra, the learned counsel for the respondents, Mr.T.R.Mani, submitted that sale deed is relied only as a document acknowledging the liability and the suit is not the basis of the undertaking given under Ex.A-1. He would submit that on the facts circumstances of the case, Sec.55(6)(b) of the Transfer of Property Act is squarely to the case of the plaintiffs and a charge on the property can be created not only against seller, but also against all persons claiming under him to the extent of the seller’s interest the property, for the amount of any purchase money properly paid by the anticipation of the delivery and for interest on such amount. Law imposes charge Sec.55(6)(b) of the Transfer of Property Act. According to the learned counsel the earlier suit will not operate either as res judicata or estoppel for the present learned counsel submitted that when once it is held that Sec.55(6)(b) of the Transfer Property Act is attracted, it cannot be said that the sit is barred by limitation and plaintiff is not entitled to any interest, as the period of limitation is only 12 years there is provision for payment of interest in the above section. The trial Court considered these aspects and came to the correct conclusion and no interference is called for. He also submit that subsequently an amendment petition I.A.No.650 of 1982 was filed interest was awarded from the date of deposit and the same has not been challenged.
The trial Court considered these aspects and came to the correct conclusion and no interference is called for. He also submit that subsequently an amendment petition I.A.No.650 of 1982 was filed interest was awarded from the date of deposit and the same has not been challenged. view of the rival contentions the following questions arose for consideration in this appeal: 1. Whether the plaintiffs are entitled to claim charge under Sec.55(65(b) of the Transfer Property Act? 2. Whether the plaintiffs’ claim is barred by limitation? 3. Whether the plaintiffs cannot rely on the covenants in the sale deed Ex.A-1 in the defendants by the non-lunatic sister, being a third party to the same. 4. Whether the plaintiffs are entitled to claim interest? Point No. 1: For Proper appreciation of the respective contentions of both parties, worthwhile to set out certain admitted facts in this case to decide the point whether respondents-plaintiffs are entitled to claim the right under Sec.55(6)(b) of the Transfer Property Act. The estate called ‘ Riverdale Estate’ which originally belonged to Holwell Short of Yercaud, was bequeathed by him under the will dated 19.4.1920 specific condition that if anyone of the legatees/ daughters marries or dies, she will right and the right will go to the other legatee. As per terms of the will one Miss Holwell Short and Miss Alice Edith H.Short were entitled to the estate. Since Miss Holwell Short became a lunatic, a petition was filed by her sister A.E.H.Short and another O.P.No.34 of 1959 to make an enquiry into the unsound mind of M.H.Short and appoint a guardian. The District Court by order dated 25.2.1960 declared M.H.Short lunatic and appointed G.F.Muirhead, a partner of King and Partridge, a firm of Solicitors Madras and Rev.E.L.Poyser of Bangalore as joint managers to look after the properties lunatic and also appointed her sister AE.H.Short as the guardian of the person of the Since the managers found it difficult to manage the estate, they filed I.ANo.66 seeking permission to sell the share of the lunatic in the coffee estate. The non-lunatic A.E.H.Short also expressed her willingness to sell her share in the estate along share of the lunatic in order to get a higher price. Accordingly, sanction was accorded District Court Messrs.King and Partridge advertised the Riverdale Estate belonging the sisters for sale in English newspapers.
The non-lunatic A.E.H.Short also expressed her willingness to sell her share in the estate along share of the lunatic in order to get a higher price. Accordingly, sanction was accorded District Court Messrs.King and Partridge advertised the Riverdale Estate belonging the sisters for sale in English newspapers. They also received offers from various The offer of constrained to take proceedings for recovery of possession. According to the counsel, the cause of action arose not from the date of taking possession but on when his right was denied. In calculating limitation, it is the date of the judgment of court which was delivered on 5.8.1972, that should be taken into consideration. According him, Art.47 alone will apply and not Art.113 or 62. Lastly he would submit that there provision for payment of interest and the decree awarding interest is also not sustainable. He would submit that since Sec.55(6)(b) of the Transfer of Property Act is not there is no question of creating charge and admittedly Sec.100 of the Transfer of Act does not apply. 7.Per contra, the learned counsel for the respondents, Mr.T.R.Mani, submitted that sale deed is relied only as a document acknowledging the liability and the suit is not the basis of the undertaking given under Ex.A-1. He would submit that on the circumstances of the case, Sec.55(6)(b) of the Transfer of Property Act is squarely to the case of the plaintiffs and a charge on the property can be created not only against seller, but also against all persons claiming under him to the extent of the seller’s the property, for the amount of any purchase money properly paid by the anticipation of the delivery and for interest on such amount. Law imposes charge Sec.55(6)(b) of the Transfer of Property Act. According to the learned counsel the earlier suit will not operate either as res judicata or estoppel for the present learned counsel submitted that when once it is held that Sec.55(6)(b) of the Transfer Property Act is attracted, it cannot be said that the sit is barred by limitation and plaintiff is not entitled to any interest, as the period of limitation is only 12 years. there is provision for payment of interest in the above section. The trial Court considered these aspects and came to the correct conclusion and no interference is called for.
there is provision for payment of interest in the above section. The trial Court considered these aspects and came to the correct conclusion and no interference is called for. also submit that subsequently an amendment petition I.A.No.650 of 1982 was filed interest was awarded from the date of deposit and the same has not been challenged. view of the rival contentions the following questions arose for consideration in this 1. Whether the plaintiffs are entitled to claim charge under Sec.55(65(b) of the Transfer Property Act? 2. Whether the plaintiffs ’ claim is barred by limitation? 3. Whether the plaintiffs cannot rely on the covenants in the sale deed Ex.A-1 in favour the defendants by the non-lunatic sister, being a third party to the same. 4. Whether the plaintiffs are entitled to claim interest? Point No. 1: For Proper appreciation of the respective contentions of both parties, worthwhile to set out certain admitted facts in this case to decide the point whether respondents-plaintiffs are entitled to claim the right under Sec.55(6)(b) of the Transfer Property Act. The estate called ‘Riverdale Estate’ which originally belonged to Thurston Holwell Short of Yercaud, was bequeathed by him under the will dated 19.4.1920 with specific condition that if anyone of the legatees/ daughters marries or dies, she will lose right and the right will go to the other legatee. As per terms of the will one Miss Holwell Short and Miss Alice Edith H.Short were entitled to the estate. Since Miss Holwell Short became a lunatic, a petition was filed by her sister AE.H.Short and another O.P.No.34 of 1959 to make an enquiry into the unsound mind of M.H.Short and appoint a guardian. The District Court by order dated 25.2.1960 declared M.H.Short lunatic and appointed G.F.Muirhead, a partner of King and Partridge, a firm of Solicitors Madras and Rev.E.L.Poyser of Bangalore as joint managers to look after the properties lunatic and also appointed her sister AE.H.Short as the guardian of the person of the Since the managers found it difficult to manage the estate, they filed I.ANo.66 of seeking permission to sell the share of the lunatic in the coffee estate. The non-lunatic A.E.H.Short also expressed her willingness to sell her share in the estate along with share of the lunatic in order to get a higher price.
The non-lunatic A.E.H.Short also expressed her willingness to sell her share in the estate along with share of the lunatic in order to get a higher price. Accordingly, sanction was accorded District Court Messrs.King and Partridge advertised the Riverdale Estate belonging to the sisters for sale in English newspapers. They also received offers from various The offer of the first defendant for Rs.5,00,000 was the highest offers received by them. They I.A.No.402 of 1962 in O.P.No.34 of 1959 about, the offers received from the first and others. The first plaintiff herein directly filed a petition I.A.No.401 of 1968 offering purchase the estate for Rs.5,05,000 and requested the court to consider his offer along other offers. The District Court accepted the offer made by first plaintiff directing deposit Rs.2,52,500 and also file a draft agreement. Accordingly the first plaintiff the amount on 31.8.1962. The first plaintiff also deposited the amount representing other half share of non-lunatic AE.H.Short, to M/s.King and Partridge. The District directed the managers to execute the sale deed in favour of the first plaintiff nominees. Accordingly possession was delivered to the first plaintiff by the managers.District Court allowed the application filed by the first plaintiff while dismissing the I.ANo.402 of 1962. As against the said order, the first defendant filed CR.P.Nos.1634 1635 of 1962 before this court and this court was pleased to set aside the order passed the District Court in I.A.No.401 of 1962 and directing restoration of the I.ANo.402 for fresh disposal after directing the District Judge to hold an enquiry with regard market value of the estate and to give further directions to the managers to call offers or to hold public auction. When the matter was pending before the District fresh disposal as per direction of the High Court, the lunatic M.H.Short died at Bangalore 17.10.1965. Consequent upon the death of her sister, the non-lunatic sister A.E.H.Short became the owner of the entire property. She sold the property outside the court to defendant under a registered sale deed on 15.4.1966 conveying the entire “ Riverdale for Rs.5,00,000 under the abovesaid sale deed the first defendant undertook to pay the price paid by the first plaintiff to her and obtain delivery and he paid only the balance AE.H.Short.
She sold the property outside the court to defendant under a registered sale deed on 15.4.1966 conveying the entire “ Riverdale for Rs.5,00,000 under the abovesaid sale deed the first defendant undertook to pay the price paid by the first plaintiff to her and obtain delivery and he paid only the balance AE.H.Short. Thereupon on the strength of the sale deed, ‘ Ex.A-1, the first defendant suit O.S.No.184 of 1966 for recovery of possession against the first plaintiff herein and others. The said suit was resisted by the first plaintiff on the ground that since the lunatic sister has accepted the highest offer of the first plaintiff for her half share, he became the purchaser of the share of the non-lunatic sister A.E.H.Short. Miss.A.E.H.Short invested the sale price for her share in fixed deposit. Having accepted the offer of the first and received the sale price, the said sale has been concluded in respect of her share contended that the District Court and the High Court have no jurisdiction in respect same and those orders passed in the C.R.P. are valid in so far as the lunatic share concerned. Hence the first defendant is not entitled to ask for the entire estate. contention of the first plaintiff was negatived in view of the finding of the High Court C.R.P. that the subject matter of the sale was the whole of the Riverdale estate and the is good or bad in its entirety and the attempt at this stage to extricate the half share sister of the lunatic must fail. It was found that it is not open to the first plaintiff forward the said contention and consequently, the suit was decreed and delivery ordered to be made. The first plaintiff was unsuccessful in the first appeal as well second appeal. In pursuance of the said decree, the first defendant has also taken delivery of possession on 15.7.1976 and filed a separate suit for recovery of damages for unlawful use and occupation and obtained a decree. Not satisfied with the quantum, he filed appeal against the said judgment and it is pending. The first plaintiff herein filed the suit in 1977 for recovery of the sale price paid towards the half share of the non sister since the sale price paid towards the lunatic share has been refunded and in view the fact that possession has been taken from him.
The first plaintiff herein filed the suit in 1977 for recovery of the sale price paid towards the half share of the non sister since the sale price paid towards the lunatic share has been refunded and in view the fact that possession has been taken from him. It is only in these circumstances, submitted by the plaintiffs that in respect of the amount paid towards the purchase share of the non-lunatic sister, they are entitled to a charge under Sec.55(6)(b) Transfer of Property Act. As already stated, the non-lunatic sister voluntarily gave consent to the District Court for sale of her share along with the share of the lunatic in to get higher price. Accordingly, offers were invited and the first plaintiff put forth his by means of a petition before the District Court and it was accepted by the District The non-lunatic sister also accepted the same and received her share of the sale price, the share of the lunatic sister was deposited in court. The non-lunatic sister who received the amount M/s.King and Partridge, their agents, invested the same in a bank and has been receiving interest. It is only because of the order passed by the High Court in the two C.R.P.Nos.1634 and 1635 of 1962 filed by the first defendant on the ground that his offer was made the time and subsequently the offer of the first plaintiff was made and that the Court not to have directed the managers to accept the said offer, the sale in favour of the was set aside. In the C.R.P. Jagadeesan, J. held as follows: “In the present case the non- lunatic sister consented to the sale of her interests along the lunatic ’ s interest and the managers and the court have acted on such consent. cannot now resile from the position and the respondent (first defendant) cannot claim there was independent sale to him for her share apart from the sale of the half share of lunatic. The subject matter of the sale was the whole of the Riverdale estate and the sale good or bad in its entirety. The attempt of the respondent at this stage to extricate the share of the sister of the lunatic must fail.” 8.
The subject matter of the sale was the whole of the Riverdale estate and the sale good or bad in its entirety. The attempt of the respondent at this stage to extricate the share of the sister of the lunatic must fail.” 8. The learned counsel for the appellants mainly submitted that there was no concluded contract in respect of the half share of the non-lunatic sister and in view of the finding earlier proceedings instituted for recovery of possession of the property under Exs.B and B-5 as there was no concluded contract, the first plaintiff is not entitled to claim benefit under Sec.55(6)(b) of the Transfer of Property Act. In this connection, the learned counsel drew the attention of this court to the decision of the trial court which is marked Ex.B-3 in O.S.No.184 of 1966 wherein under issue No.3 it was held that there was concluded agreement of sale of half share of Miss A.E.H.Short and that the first plaintiff herein was put in possession on the basis of the same. The learned counsel drew attention of this court to the decision in Ex.B-4 as well as Ex.B-5 judgment in second appeal, where the said finding was upheld. On the other hand, the learned counsel for the plaintiffs respondents drew the attention of this court and submitted that in all these judgments, decision of Jagadeesan, J. in C.R.P.Nos.1634 and 1635 of 1962 which has already extracted above, has been quoted and on the basis of the said finding, it was held that plaintiff is not entitled to contend that there was separate agreement in respect of lunatic sister and that the order passed by the court setting aside the sale in respect lunatic sister affects the sale in respect of the said half share and the court below has not aside the sale in respect of the share belonging to the non-lunatic cannot be accepted. doing so, it has been specifically observed, after referring to various letters exchanged between the non-lunatic sister and her agent, that it cannot be said on the basis of Ex.B that the non-lunatic sister never have her consent to sell her share also along with the of the lunatic and that she was only anxious about the disposal of her estate and that should be informed of the facts.
In another place, in para 13 it has been specifically observed by the trial court (O.S.No.184 of 1966) that it cannot be said by any stretch imagination that she did not give consent to her half share in the property. It was observed that she gave a direction to the Manager to receive her share directly on behalf. The above facts are not disputed. The learned counsel for the respondents submitted that what the courts have held was that the offer and acceptance by the first plaintiff was respect of one integrated agreement for the sale of the estate, and since the procedure adopted by the District Court in accepting the offer of the first plaintiff after the time fixed the advertisement and not through the managers but directly is not in accordance with procedure, the court below negatived the contention of the plaintiff that the sale in respect of half share is to be excluded from the purview of the said order on the ground that court has no jurisdiction and the contention that he is entitled to be in possession in respect of the half share in respect of that property was not negatived. That there was a concluded agreement in respect of the entire estate, both in respect of the share of the lunatic and the non-lunatic sister, is clear from the order of the District Court accepting the offer the plaintiff and it is only because of the reasons set out in the order in C.R.P.Nos.1634 1635 of 1962, the order directing the manager to execute the sale deed in favour of the plaintiff, the sale was set aside and the matter was remanded back. Since the meantime possession has been taken by the defendant, the plaintiff filed the suit recovering the amount of the share of the non-lunatic sister that was retained. Since lunatic sister died, the non-lunatic sister sold the entire property outside the court first defendant who was also directed to pay the sale price paid by the plaintiffs to them. learned counsel for the appellants fairly submitted that though the appellants have no on equitable grounds, yet he is now opposing the claim of the plaintiffs on the legal namely, the plea of the limitation and in that connection the applicability of Sec.55(6)(b) the Transfer of Property Act is very relevant.
learned counsel for the appellants fairly submitted that though the appellants have no on equitable grounds, yet he is now opposing the claim of the plaintiffs on the legal namely, the plea of the limitation and in that connection the applicability of Sec.55(6)(b) the Transfer of Property Act is very relevant. It is to be noted that the plaintiffs have the suit for recovery of the balance of sale price and they claimed charge over the property including the share of the lunatic treating it as one transaction in view of the in the earlier proceedings. On a careful reading of the judgments, Exs.B-3, B-4 and B that the contention put forward by the plaintiffs that there is concluded agreement in of the half share of the non-lunatic sister and that it has nothing to do with the agreement with regard to the sale of the half share of the lunatic sister was not accepted. But, nowhere stated that there is no concluded contract in respect of entire estate. As observed by the trial court, all that the High Court has said in dealing with the orders in I.A.Nos.401 and 402 of 1966 was that there was no concluded contract in respect half share of the non-lunatic sister and that non-lunatic sister has no independent right sell her half share when especially she had already agreed to sell her half share with share of the lunatic sister in entirety and that the estate either should be sold in entirety not at all. Further, the acceptance of the offer of the first plaintiff by the District Court not correct. As already stated, it is clear that there was an offer to purchase the property by the plaintiffs for Rs.5,05,000 and it was accepted by the District Court pursuance of the same, the entire sale price was deposited, namely, half in court and other half to the managers of the lunatic and possession was also delivered. Merely because the said order directing sale in favour of the plaintiffs was set aside oh some technical ground, it cannot be said that there was no concluded agreement so as to attract Sec.55(6) (b) of the Transfer of Property Act.
Merely because the said order directing sale in favour of the plaintiffs was set aside oh some technical ground, it cannot be said that there was no concluded agreement so as to attract Sec.55(6) (b) of the Transfer of Property Act. In this connection, the learned counsel for respondents drew our attention to the very letter Ex.A-7, written by the non-lunatic accepting the offer of the plaintiff by way of reply to the letter written by M/s. King Partridge, intimating the offer of the plaintiff for Rs.5,05,000 and also about the deposit her share with them. Therein she has stated that the court has no hold whatsoever upon half share in the above estate and therefore one half of the deposited sum should be direct to King and Partridge on her behalf as well as the balance due to her of the purchase money on completion of the sale. Under Ex.A-6, King and Partridge informed the non sister about investing the amount of Rs.2,52,500 paid towards her share by the plaintiffs with the State Bank of India in the form of deposit. Our attention was drawn to the relevant provisions of Sec.55(6)(b) and Sec.100, Transfer Property Act, by the learned counsel appearing on either side. Sec.55(6)(b) reads as follows: "55.(6)(b): The buyer is entitled - (a)... (b) unless he has improperly declined to accept delivery of the property, to a charge on property, as against the seller and all persons claiming under him, ***, to the extent of seller ’ s interest in the property, for the amount of any purchase-money properly paid by buyer in anticipation of the delivery and for interest on such amount; and when, he properly declined to accept the delivery, also for the earnest (if any) and for the costs (If awarded to him in a suit to compel specific performance of the contract or to obtain a decree for its rescission." As per this provision, the buyer has a charge for price prepaid, that is, for price that he paid in anticipation of completion. In this connection, the learned counsel drew the passage in the Transfer of Property Act by Mulla, sixth edition, page 343, where the learned author has observed: "The principle underlying Sec.55(6)(b) is a principle of justice, equity and good conscience and applies to Punjab Shankri v. Milkha Singh, (1941)43 P.L.R. 656:1971.C. 282, (41) 407.
In this connection, the learned counsel drew the passage in the Transfer of Property Act by Mulla, sixth edition, page 343, where the learned author has observed: "The principle underlying Sec.55(6)(b) is a principle of justice, equity and good conscience and applies to Punjab Shankri v. Milkha Singh, (1941)43 P.L.R. 656:1971.C. 282, (41) 407. The buyer ’ s charge under the section is a statutory charge and differs contractual charge which a buyer may be entitled to claim under a separate contract, Chettiar Firm v. Chettiar, 1941 A.P.C. 47. A buyer can enforce his statutory charge the property and the plea of want of notice on the part of a third person would be of no Hari Bapuji v. Bhagu Sadhu, (1936)38 Bom.L.R 1200: 167 I.C. 804: 1937 AB.142, Hamid v. Mahomed Ali, (1951)51 Bom.L.R, 817:52A.B. 67, But see Pushkarnarayan Kubrabai, (1969) 71 Bom.L.R. 769. A buyer ’ s charge exists even in cases where the buyer in possession of the property intended to be sold and is not lost by his accepting the of possession, Jibhaoo Harising v. Ajabsing Fahira, A.I.R. 1953 Bom. 253:54 Bom.L.R 1971:53 A.B.145. The creation of a charge under the section is not at all difficult when the buyer comes into possession of the property intended to be sold. It arises immediately the purchase price is paid by the buyer to the seller, Patti v. Kunhi Raman, 1959 A.Ker. 389. The charge on the property is enforceable not only against the seller but against all persons claiming under him." Under Sec.100 of the Transfer of Property Act, it is provided that charges are created by act of parties or by operation of law. In this connection the learned counsel drew the attention of this court to the relevant passage at page 625 wherein under the heading, "Charge by operation of law," the learned author observes: "But, as the Supreme Court observed in Laxmi Devi v. Mukand Kunwar, (1965) A.S.C. 834; Manna Singh v. Wasti Ram, (1960)4 A.Punj. 296, a plain reading of Sec.2(d) leaves no doubt that the provisions of Chapter IV of the Act, and therefore this section, govern charges by operation of law.
296, a plain reading of Sec.2(d) leaves no doubt that the provisions of Chapter IV of the Act, and therefore this section, govern charges by operation of law. The Act, however, itself creates such charges, for a charge by of law arises in this Act under Sec.55(4)(b) in the case of an unpaid vendor, under Sec.55(6) (b) for purchase money paid in advance; under Sec.73 in favour of a mortgagee on surplus sate proceeds of a revenue sale." The learned counsel for the appellants relied on the decisions reported in Muthu Goundan v. Chellappa Goundan, (1910)8 M.L.T. 464: 82 I.C. 1089, and Trimbak Narayan Hardas v. Babulal Motaji, A.I.R. 1973 S.C. 1363, in support of his contention. In Muthu Goundan case, it was observed: "We do not think that Sec.55(6)(b) of the Transfer of Property Act can be applied to give the vendee a charge upon the property in a case where the sale is wholly invalid: the agreement to sell does not of itself effect the transfer of any interest in the property. Vide Kurri Veera Reddi v. Kurri Bapireddi, I.L.R. 29 Mad336, and the charge which the vendee can claim is given to him only in the particular case where having paid money in anticipation of delivery, he fails to obtain delivery." At the outset, it is to be noted that the facts of the case involved in the said case were not set out and it is not known under what circumstances, the learned Judges have observed as stated above in the above quoted case. Further, the above decision and the other decision relied on by the learned counsel for the appellant, namely, Trimbak Narayan Hardas v. Babulal Motaji, A.I.R. 1973 S.C. 1363, have been referred to in a judgment of a Division Bench of this Court reported in I.T.O. Madras v. K.A.Govindaswamy, A.I.R 1978 Mad. 186. Before ever considering the above case in I.T.O., Madras referred to, it is worthwhile to consider the case in Trimbak Narayan Hardas case, A.I.R. 1973 S.C. 1363, which was also referred by the court below. As observed by the Court below, that was a case in which a debtor borrowed money from another. It was not a secured debt. The creditor when pressed for the return of the money, both agreed to refer the matter to a third party for arbitration.
As observed by the Court below, that was a case in which a debtor borrowed money from another. It was not a secured debt. The creditor when pressed for the return of the money, both agreed to refer the matter to a third party for arbitration. The Arbitrator passed an Award saying that the money should be re-paid within certain time and if it was not paid within such time, the debtor should sell his property to the creditor. The award was filed into Court for enforcement of specific performance. Meanwhile the debtor entered into an agreement of sale with a third party under an ante-dated document. The holder of the agreement filed a suit for specific performance impleading the debtor and the creditor saying that he had no notice of the award. The. Court considered all the circumstances and found that the agreement was a fraudulent one under which no consideration passed. In the number of suspicious circumstances it was held that no money at all passed under agreement. Since there was no money passed under the document, it could not be and no charge was created. Admittedly, in the instant case, there was an offer acceptance and the offer of the plaintiff was accepted by Court. He was directed to the amount and the court also directed execution of the sale deed. But it was subsequently revision at the instance of the first defendant, as stated earlier, the sale was set aside the matter was remanded. Hence that decision is not helpful to the case of the appellants. I.T.O. Madras v. K.A.Govindaswamy, A.I.R. 1978 Mad. 186 at 191, in para 9 after setting the facts involved in the case, it was considered whether the intending purchaser could a charge over the property. It was observed as follows: "No doubt, the intending buyer cannot claim a charge under Sec.55(6)(b) of the Transfer Property Act after the sale deed is executed and possession of the property is taken This statutory charge is the outcome of the rule of justice, equity and good conscience, though there is no question of ownership involved while asserting the charge as above, such ownership would still be in the seller.
Yet in order to adjust the equity of the parties the contract which are contained in Sec.55(6)(b) of the Transfer of Property Act, the privileged to claim a statutory charge under Sec.55(6)(b) of the Transfer of Property There is even authority for the proposition that this statutory charge can be enforced court sales. No doubt, the position would be different if the agreement of sale is invalid void or not genuine or in a case in which the seller has no personal interest in the property all. Vide Muthu Goundan v. Chellappa Goundan, (1910)8 M.L.T. 464; Shailendra Nath Node Kaza Marie, I.L.R. 59 Cal. 586: A.I.R. 1932 Cal 356, and Trimbak Narayan Hardas Babulal Motaji, A.I.R. 1973 S.C. 1363. we have already observed that this privilege resulting in a charge in favour of the intending buyer is based on the well principle of justice, equity and conscience. This is because that once the buyer has whole or part of the purchase money in question, the vendor becomes a trustee for to the extent to which the buyer has paid the purchase money the buyer acquires a the property, as if upon the payment of a part of the purchase money the vendor executed a mortgage to him of the property to that extent." The said decision is, in our view, is applicable in all fours to the facts of the case respondents-plaintiffs. 9. To rebut the argument of the learned counsel for the appellants that when possession been delivered no charge can be created, the learned counsel for the respondents drew attention to the decision reported in Jibhaco Harising v. Ajabsing Fahira, A.I.R. 1953 145: I.L.R. 1953 Bom. 253, wherein at Page 266 it was observed: "If for some reason the sale is not effectuated or by reason of some technical defect through, it was undoubtedly the intention of the Legislature that the buyer should have charge on the property in respect of the purchase price paid by him......... If he has accepted delivery, the charge created by the statute continues to exist, but even if he has accepted delivery, the charge is not lost unless the refusal to accept delivery is improper." At page 267, after considering the earlier decision of the said court reported ill Nanubhai v. Mansukhram, (1990)24Bom. 400, and Lalchand v. Lakshman, (1904)28 Bom.
If he has accepted delivery, the charge created by the statute continues to exist, but even if he has accepted delivery, the charge is not lost unless the refusal to accept delivery is improper." At page 267, after considering the earlier decision of the said court reported ill Nanubhai v. Mansukhram, (1990)24Bom. 400, and Lalchand v. Lakshman, (1904)28 Bom. 466, held: ".........a charge does arise in favour of the purchaser under Sec.55(6)(b) of the Transfer Property Act, even though he may be in possession of the property." In Abdul Hamid Khan v. Mohammed Ali, A.I.R 1952 Bom. 67, it was held: "The charge under Sec.55(b) for the unpaid purchase money or the earnest money into existence from the moment the buyer pays part of the purchase money or earnest money towards the sale transaction and this charge is not lost except on account buyer ’ s own subsequent default. It is available to the buyer not only against the seller also against the purchaser from the seller irrespective of the question whether the purchaser under had or had not notice of the charge. Hence the circumstance that the transfer in the subsequent purchaser has taken place before the date of the suit by the buyer for a declaration of the charge, makes no difference and the purchaser is bound decree declaring the charge: A.I.R (24) 1937 Bom. 142, Rel.on." The learned trial Sub Judge relied on the decision in M.K.Sundaramier G.M.V.Krishnamachari and another, (1965)2 M.L.J. 478 . It was a case in which the was delivered to the purchaser, and the facts are: "Though the purchaser was in possession on account of some supervening circumstances, the sale could not be completed. It was contended on the side of the seller that a would not be entitled to a charge because he was in possession of the property contention was rejected holding that Sec.55 Clause 6(b) of Transfer of Property apply in case where possession followed also and that section would apply in an contract i.e. to say sale not completed." The learned counsel for the respondents drew our attention to the decision in Nagammal Ayyavu Thevar, A.I.R. 1973 Mad. 353, which was also relied on by the trial Judge.
353, which was also relied on by the trial Judge. held in that case: "Where under an agreement of sale the vendee pays part of the purchase price by advance but the contract goes off by reason of the defective title of the vendor, the entitled to a charge on the vendor’s interest in the property agreed to be sold contract goes off without any default on the part of the vendee it cannot be said vendee has improperly declined to accept the delivery and that therefore the deprived of the charge." It was further held in the above case: "The charge on the seller’s interest in the property agreed to be sold created under (b) in favour of a vendee can be enforced not only against the seller but against all claiming through him irrespective of notice of prior agreement of sale. Hence a charge enforced against the seller’s interest in the property notwithstanding the subsequent the property." Thus, for all these reasons, in view of the facts and circumstances of the case and laid down in the above decisions, we have no hesitation in holding that the plaintiffs entitled to claim charge under Sec.55(6)(b) of the Transfer of Property Act for the money paid by them. 10. Points 2 and 3: As regards these points, it is contended by the learned counsel appellants that the plaintiffs are not entitled to any charge under Sec55(6)(b) of the of Property Act, the suit should have been filed within 3 years from the date of when the transaction in favour of the plaintiffs was not accepted by the court. submit that in the earlier suit filed by the first defendant for recovery of possession, of the plaintiffs claimed under the said suit was negatived and as such the suit should been filed within three years from the date of the first judgment under Ex.B- relevant Article is Art.47 of the Limitation Act, and as the suit has not been filed years, it is barred by limitation. It is not disputed by the learned counsel for the that when once it is held that the respondents-plaintiffs are entitled to a charge under (6)b) of the Transfer of Property Act, Art.62 alone is applicable.
It is not disputed by the learned counsel for the that when once it is held that the respondents-plaintiffs are entitled to a charge under (6)b) of the Transfer of Property Act, Art.62 alone is applicable. Under Art.62 it is that to enforce payment of money secured by a mortgage or otherwise charged immovable property, the period of limitation is 12 years when the money sued for due, while Art.47 deals with the suit for recovery of money paid upon an consideration which afterwards fails, and the period of limitation is 3 years from the failure. Art.113 is only a residuary clause. In the instant case, the purchase money admittedly paid to the non-lunatic sister on 31.8.1962 and the charge being equated simple mortgage, the period of limitation under Art.62 is 12 years and it commences that date. The plaintiffs relied on Ex.A-1 sale deed in favour of the first defendant enforcing the undertaking given by the first defendant to pay the sale price paid by the plaintiffs, but only for acknowledging the liability of the vendor to the plaintiffs. It is worthwhile quote the relevant portion with regard to the acknowledgment of liability in Ex.A-1 which sale deed in favour of the first defendant dated 15.4.1966. The various proceedings relating to the of sale in favour of the first plaintiff and the reasons for subsequently setting aside the were set out. It was stated as follows: “Whereas the purchasers have suggested to the vendor that a sum of Rs.2,52,500 Mr. M. Thiyagarajan to King and Partridge, which is now held in deposit by M/s. D.S D’ Silva having received the same from M/s.King and Partridge be received by the herein as part of the purchase on the purchasers herein having undertaken responsibilities of repaying the said amount of Rs.2,52,500 to Mr. M.Thiagarajan against return of possession of Riverdale Estate and re-delivery of the documents of title to course M/s D’ Souza and D’ Silva are agreeable.
M.Thiagarajan against return of possession of Riverdale Estate and re-delivery of the documents of title to course M/s D’ Souza and D’ Silva are agreeable. Now this indenture witnesses pursuance of the aforesaid agreement and in consideration of the sum of Rs.5,00,000 by the purchasers to the vendor as follows: viz., Rs.2,52,500 in deposit with M/s.D and D’Souza being the amount paid by M.Thiagarajan to M/s.King and Partridge at the of delivery of the possession of the estate to him which is by the undertaking purchasers as aforesaid deemed to have been paid by the purchasers and the balance Rs.2,47,500 paid by the purchasers to the vendor on the 15th day of February 1966. vendor doth hereby grant, convey and assign unto the purchasers all that immovable property described therein.” Though the learned counsel for the appellants submitted that since the plaintiffs parties to the transaction, the plaintiffs are not entitled to enforce that stipulation suit,it is submitted by the learned counsel for the respondents that the plaintiffs basing their suit on the said undertaking but enforcing the claim only under Sec.55(6)(b) the Transfer of Property Act. The plaintiffs are relying on Ex.A-1 for the acknowledgment liability under Sec.18 of the Limitation Act. According to the learned counsel, if once held that there was acknowledgment of liability, the suit which was filed in the year within 12 years from that date is within time. As per recitals in Ex.A-1, the amount the first plaintiff was payable on the delivery of the property. The delivery of the took place on 15.7.1976. The suit was filed in 1977. Hence, it cannot be said that the barred by limitation. The learned counsel for the appellants has not disputed acknowledgment under Sec.18 of the Limitation Act need not necessarily be made person relying on acknowledgment. Hence, in the circumstances, even though the are not parties to Ex.A-1, yet the plaintiffs can rely on the acknowledgment of liability vendor to the plaintiffs. The decisions relied on by the learned counsel for the appellants reported in M.C.Chacko v. State Bank of Travancore, A.I.R. 1970 S.C. 504: S.C.R.658 and Subbu Chetti v. Arunachalam Chettiar, A.I.R. 1930 Mad. 382: I.L.R. 53 270, for the proposition that a person who is not a party to the contract cannot enforce charge are not at all helpful.
The decisions relied on by the learned counsel for the appellants reported in M.C.Chacko v. State Bank of Travancore, A.I.R. 1970 S.C. 504: S.C.R.658 and Subbu Chetti v. Arunachalam Chettiar, A.I.R. 1930 Mad. 382: I.L.R. 53 270, for the proposition that a person who is not a party to the contract cannot enforce charge are not at all helpful. Even in the above decisions, it is stated that there exceptions to the above rule and they have been set out even by the trial Judge. As stated that question does not arise. If once it is held that the plaintiff is entitled to a under Sec.55(6)(b) of the Transfer of Property Act, all the persons claiming under the are bound to repay the said amount irrespective of the fact whether they are not parties the contract between the vendor and the vendee. As already observed, in the instant the plaintiffs relied on Ex.A-1 only for the purpose of proving the acknowledgment of and not for enforcing the suit claim on the basis of the said undertaking given under Hence in view of the findings on point No.1 and in view of the acknowledgment under the present suit by the respondents plaintiffs is well within time and the finding of the Judge is unassailable. These points are answered against the appellants and in favour respondents. 11. Point 4: As regards the 4th point, which deals with the award of interest, it is seen though admittedly there was no agreement for payment of interest, it is the admitted both the parties that the amount of Rs.2,52,500 was paid by the plaintiffs and received the non-lunatic sister A.E.H.Short and she also invested the same in bank deposit received interest from the said deposit. As per Sec.55(6)(b) of the Transfer of Property, purchaser is entitled to claim interest. As rightly contended by the learned counsel for the respondents, when once it is found that the purchaser is entitled to get refund purchase money, in view of the provision of Sec.55(6)(b), he is entitled to get interest absence of any contrary agreement. It is also brought to the notice of this court various notices issued by the plaintiffs and the replies by the defendants clearly there was demand of the amount with interest and the defendants denied liability.
It is also brought to the notice of this court various notices issued by the plaintiffs and the replies by the defendants clearly there was demand of the amount with interest and the defendants denied liability. judgment considered the facts and circumstances of the case and held that though plaintiffs claimed interest at 12 per cent per annum, they are entitled to interest cent per annum from the date of deposit. It is not in dispute that the first defendant already filed a suit for realizing mesne profits against the plaintiffs and obtained a the matter is pending in appeal. The first defendant having obtained a decree profits for the entire period till the date of delivery to him it is not open to them to that the plaintiff is not entitled to any interest. It is also brought to the notice of that subsequent to the passing of the decree, an amendment petition was filed in the period of payment of interest, namely, from the date of deposit till the date of and that has not been challenged. Whatever that be, in view of the finding that the entitled to a charge under Sec.55(6)(b) of the Transfer of Property Act, the plaintiffs certainly entitled to claim interest from the date of deposit till the date of payment said provision and hence we answer this point accordingly in favour of the respondents plaintiffs and as against the appellants-defendants. 12. Though before the lower court it was contended that the plaint is barred by res under Sec.11, C.P.C. and also on account of estoppel by not raising the contentions prior suit under O.2 Rule 2, C.P.C., those points were not pressed before this court. otherwise, we find that there is absolutely nothing to show that the plaintiffs ’ claim barred by res judicata or by estoppel. In view of the findings on points 1 to 4, the liable to be dismissed. 13. In the result, the judgment and decree passed by the trial court are confirmed appeal is dismissed. No order as to costs in this appeal. Appeal dismissed.