He referred me also to the decision in Dhanrajee Giriji Narasingh Giriji v. Tata Sons Ltd. A.I.R. 1924 Bom. 473 and to English cases relating to contracts of sale relating to immovable properties, where a vendor not being able to give a good title was directed only to return the advance with interest and not to pay the vendee the (higher) market value when the price of land had increased in the meanwhile. I do not think it necessary to go elaborately into this question, because the question is concluded, as far as I am concerned, by a decision by a Bench of this Court, reported in Dhadha Sahib v. Muhammad Sultan Sahib A.I.R. 1921 Mad. 384. The learned Judges, Abdur Rahim and Oldfield, JJ. held that in assessing damages the vendee is entitled to ask that they should be assessed at the present enhanced value of the lands. At p. 169 the learned Judges observed as, follows:
The learned District Judge is evidently wrong in saying that in assessing damages the plaintiff is not entitled to ask that they should be assessed at the present enhanced value of the lands. Surely he is entitled to full compensation, so that he might be restored pecuniarily to the same position as if he had recovered the land which defendant 1 sold to him.
2. It has been held that the rule enacted by Section 73, Contract Act, is applicable also to cases of sales of immovable property: see Nagardas Sambhagya Das v. Ahmad Khan [1897] 21 Bom. 175 and Ranchhod v. Man Mohandas [1908] 32 Bom. 165. The Full Bench of the Madras High Court in the case reported in Adikesavan Naidu v. Gurunath Chetti [1917] 40 Mad. 339 applied the same principle to cases of contract for sale of immovable property by the manager of a Hindu family. That being so, the party (vendee) who suffers by such breach is entitled to receive from the party who has broken the contract (vendor) compensation for any loss or damages caused to him thereby which naturally arose in the usual course of things from such breach. In Nagardas Sambhagya Das v. Ahmad Khan [1897] 21 Bom. 175, the learned Chief Justice and Parsons, J., held that a purchaser evicted from his holding is entitled to recover from a vendor who has guaranteed his title the value of the land on the date of the eviction. At p. 182 their Lordships say:
It is stated by Blackburo, J., in Lock v. Furze, that the doctrine laid down in Flureau v. Thornhill, does not apply to the case of an executed contract and that is stated in Dort's "Vendors and Purchasers" to be the law. A careful perusal of the judgments in the case of Bain v. Fother gill, in which the House of Lords recognized the doctrine of Flureau v. Thomhill and established it on the broadest basis, satisfies us that it was not intended by their Lordships to extend the doctrine to cases of executed contracts to which it had not been previously applied.
3. In the Full Bench case reported in Adikesavan Naidu v. Gurunatha Chetti [1917] 40 Mad. 339 it was held that in the case of a contract to sell immovable property, the vendor was liable under Section 73, Contract Act, for damages for failure to perform the contract, and that law in India as laid down by the Contract Act as to the right to the damages for breach of contract to sell immovable property was different from that in England. I am therefore of opinion that the learned District Judge was right in assessing damages at the enhanced value of the land on the date of eviction.
Madras High Court
(Yella) Ramayya And Ors. vs (Chukkapalli) Kotayya And Ors. on 17 September, 1929
Equivalent citations: AIR 1930 Mad 748
1. Defendant 2 sold certain properties to plaintiff 1, Chukkapalli Kotayya and Bollineni Seshayya (father of plaintiffs 3 to 5) under Ex. B dated 2nd January 1902. As the result of O.S. No. 39 of 1918 instituted by one Somayajulu as the adopted son and heir of defendant 1's husband, the plaintiffs lost about two acres of land, it being held that defendant 2 had not acquired a good title to the same himself and that consequently he could not convey a good title in his turn to the plaintiffs with reference to these two acres. The judgment in O.S. No. 39 of 1918 was passed on 30th September 1919. On the ground that the possession of the said two acres was lost on the same date, the plaintiffs instituted the present suit to recover damages from defendant 2 in respect of the same. Defendants 3 to 5 are the sons of defendant 2. Defendants 2 to 5 contended that defendant 2 was merely a benamidar vendee under Ex. A dated 19th May 1900, and that the sale by defendant 2 to the plaintiffs under Ex. B on 2nd January 1902 was a nominal transaction and that he never had any interest In land and that Ex. B was only a nominal transaction. Both the lower Courts found against the said contention and held that Ex. B evidenced a real and genuine transaction and that defendant 2 received consideration from the plaintiffs in respect of Ex. B. The Courts also observed that the plaintiffs were ejected from the lands soon after the decree in Ex. B. On the question of damages the first Court held that the plaintiffs were entitled to recover only the actual price (Rs. 500) paid to defendant 2 under Ex. B for these lands and not the present market value of those lands on the date of their eviction by the decree-holder in O.S. No. 39 of 1918. The lower appellate Court, however, held that the plaintiffs were entitled to the market value of the land at the time of the dispossession, viz. Rs. 2,132. In this second appeal preferred by defendants 2 to 5 the main argument urged by the learned advocate for the appellants, was that the learned District Judge was in error in decreeing the market value of the land at the time of dispossession of the plaintiffs as a result of O.S. No. 39 of 1918. He drew my attention to a statement in Mayne on Damages that English law was not clear on the point and that the American Courts had held that the plaintiffs in such circumstances would be entitled to be paid back the price paid by them and not the present market value of the lands. He referred me also to the decision in Dhanrajee Giriji Narasingh Giriji v. Tata Sons Ltd. A.I.R. 1924 Bom. 473 and to English cases relating to contracts of sale relating to immovable properties, where a vendor not being able to give a good title was directed only to return the advance with interest and not to pay the vendee the (higher) market value when the price of land had increased in the meanwhile. I do not think it necessary to go elaborately into this question, because the question is concluded, as far as I am concerned, by a decision by a Bench of this Court, reported in Dhadha Sahib v. Muhammad Sultan Sahib A.I.R. 1921 Mad. 384. The learned Judges, Abdur Rahim and Oldfield, JJ. held that in assessing damages the vendee is entitled to ask that they should be assessed at the present enhanced value of the lands. At p. 169 the learned Judges observed as, follows:
The learned District Judge is evidently wrong in saying that in assessing damages the plaintiff is not entitled to ask that they should be assessed at the present enhanced value of the lands. Surely he is entitled to full compensation, so that he might be restored pecuniarily to the same position as if he had recovered the land which defendant 1 sold to him.
2. It has been held that the rule enacted by Section 73, Contract Act, is applicable also to cases of sales of immovable property: see Nagardas Sambhagya Das v. Ahmad Khan [1897] 21 Bom. 175 and Ranchhod v. Man Mohandas [1908] 32 Bom. 165. The Full Bench of the Madras High Court in the case reported in Adikesavan Naidu v. Gurunath Chetti [1917] 40 Mad. 339 applied the same principle to cases of contract for sale of immovable property by the manager of a Hindu family. That being so, the party (vendee) who suffers by such breach is entitled to receive from the party who has broken the contract (vendor) compensation for any loss or damages caused to him thereby which naturally arose in the usual course of things from such breach. In Nagardas Sambhagya Das v. Ahmad Khan [1897] 21 Bom. 175, the learned Chief Justice and Parsons, J., held that a purchaser evicted from his holding is entitled to recover from a vendor who has guaranteed his title the value of the land on the date of the eviction. At p. 182 their Lordships say:
It is stated by Blackburo, J., in Lock v. Furze, that the doctrine laid down in Flureau v. Thornhill, does not apply to the case of an executed contract and that is stated in Dort's "Vendors and Purchasers" to be the law. A careful perusal of the judgments in the case of Bain v. Fother gill, in which the House of Lords recognized the doctrine of Flureau v. Thomhill and established it on the broadest basis, satisfies us that it was not intended by their Lordships to extend the doctrine to cases of executed contracts to which it had not been previously applied.
3. In the Full Bench case reported in Adikesavan Naidu v. Gurunatha Chetti [1917] 40 Mad. 339 it was held that in the case of a contract to sell immovable property, the vendor was liable under Section 73, Contract Act, for damages for failure to perform the contract, and that law in India as laid down by the Contract Act as to the right to the damages for breach of contract to sell immovable property was different from that in England. I am therefore of opinion that the learned District Judge was right in assessing damages at the enhanced value of the land on the date of eviction.
4. It was next argued that there is no express covenant of title in Ex. B, but that is not necessary since under Section 55 (2), T.P. Act, in the absence of a contract to the contrary such a covenant is implied in every sale of immovable property after the Transfer of Property Act: see Basareddi Sheikh v. Enajaddi Maliah [1898] 25 Cal. 298; Narayana Reddi v. Peda Rama Reddi [1891] 1 M.L.J. 479 and Adikesavan Naidu v. Gurunatha Chetti [1917] 40 Mad. 339 at pp. 350 and 352. This contention also accordingly fails.
5. The last contention raised by the learned advocate for the appellants was that the father of plaintiffs 3 to 5 had sold the property purchased by him to the father of P.W. 5 prior to the present suit and that plaintiffs 3 to 5 were not entitled to recover any damages from the defendants, and that the lower Courts should have decreed only the damages sustained by plaintiffs 1 and 2 in respect of the two and odd acres in question. This question was not raised in the written statement. Issue 2 ran as follows: "Who dispossessed the plaintiff of the suit land?" At the hearing, both parties admitted that issue 2 was unnecessary and it was consequently struck off: vide para. 14 of the Munsif's judgment. Against the decree passed by the District Munsif in favour of plaintiffs 1 to 5 for Rs. 500, viz., the price paid for Ex. B, defendants 2 to 5 filed a memorandum of objections in the lower appellate Court in the appeal preferred by the plaintiffs. In that defendants 2 to 5 raised the question that plaintiffs 3 to 5 were not entitled to damages as their father had sold the land to P.W. 5's father before suit. The lower appellate Court in para. 5 of its judgment observed as follows:
The facts in this connexion appear to be that Seshayya, the vendee from defendant 2 under Ex. B and father of plaintiffs 3 to 5, had sold his share of the property to the father of P.W. 5 who in his turn sold portions of it to two persons Kasim Sahib and Gali Anjayya. Kasim Sahib then sold to Sheik Nabi Sahib. The plaintiffs no doubt called P.W. 5 to say that he had recovered some money from plaintiffs 3 to 5. But as the lower Court remarks, there is no independent evidence, and the receipts which he puts forward, Exs. F and G, purporting to have been given to his father for money paid by the latter as damages to his vendees, have not been proved by the parties who gave them. I take it therefore that plaintiffs 3 to 5 have not proved that they had to pay Seshayya's vendees any compensation for their want of title.
6. Plaintiffs 3 to 5 were not taken by surprise by this plea of defendants 3 to 5. In fact plaintiffs 3 to 5 let in evidence and called P.W. 5 to whose father Seshayya had sold the properties. The plaintiffs also produced receipts Exs. F and G, but unfortunately for them they have not been proved by the parties who gave them. Under Section 55, (2), T.P. Act, the benefit of the covenant mentioned in that section shall be annexed to, and shall go with, the interest of the transferees as such and may be enforced by every person in whom that interest is in the whole or any part thereof from time to time vested.
7. In the absence of those vendees and in the absence of proof that plaintiffs 3 to 5 settled with those vendees and are themselves entitled to the damages in respect of these lands, plaintiffs 3 to 5 are not entitled to a decree in their favour in this suit in respect of their moiety of two and odd acres in question. In the circumstances, I think that the decree should be confined to the damages sustained by plaintiffs 1 and 2 in respect of their moiety of the two and odd acres conveyed by defendant 2 under Ex. B.
8. I therefore modify the decree of the lower appellate Court by giving plaintiffs 1 and 2 a decree for Rs. 1,066 (being the moiety of Rs. 2,132) with interest thereon at 6 per cent per annum from 30th September 1919 to the data of realization and costs on the same in all the Courts, to be paid by defendants 2 to 5. The claim made In the plaint for the remaining amount will be dismissed. Defendants 2 to 5 will pay the costs of plaintiffs 1 and 2 in respect of Rs. 1,066 in all the Courts and bear their own costs in all the Courts. There will be no order as to costs in any of the Courts regarding the remainder of the claim mentioned in the plaint. The appellant will pay respondents 1 and 2 (plaintiffs 1 and 2) costs of the second appeal calculated on Rs. 1,066 and bear their own costs. The decree of the lower appellate Court will be modified accordingly.
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