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Bapu Shivaji Naik v. Kashiram Hanmantrao Ghag
Structured Summary of the Provided Legal Opinion
Factual and Procedural Background
The plaintiff purchased a one-anna share (a khoti takshim) purporting to have been conveyed by the defendants, who acted as representatives of the Shivajee branch. This Court (in earlier litigation, Second Appeal No. 839 of 1918, judgment dated 8 March 1920) finally declared the plaintiff entitled to recover possession of that one-anna takshim. When the plaintiff sought to take possession, it was discovered that the defendants in fact only had three pies (a fraction of the one-anna) to transfer, although by reasons explained in the opinion the plaintiff succeeded in establishing title to six pies (one half of an anna).
The plaintiff brought the present suit seeking to recover either the remaining one-half (six pies) of the takshim or damages in lieu of possession. The first (trial) Court held that actual possession could not be given because the relevant portions were in the possession of other persons; that point was not appealed. The remaining questions before this Court were whether a suit for damages would lie, whether it was barred by limitation, and if not, what the correct measure of damages should be. Miscellaneous proceedings produced an order (Ex. 43) dated 25 September 1922 declaring the other cosharers entitled to three pies each out of the one-anna. The present suit was instituted on 8 January 1925.
Legal Issues Presented
- Whether a suit for damages by a subsequent transferee (the plaintiff) against the original vendors (the defendants) will lie where the vendor purported to transfer a whole one-anna share but in fact had only a smaller share.
- Whether the plaintiff, who purchased through intermediaries (the Ketkars) and after a prior breach, can take advantage of Section 55(2) of the Transfer of Property Act and enforce the vendor's covenant for title.
- Whether the suit is barred by limitation, and if not, from which date the period of limitation runs (i.e., the date of the original breach in 1904, or the date on which the imperfection of title was declared or dispossession occurred).
- What is the correct measure of damages recoverable by the plaintiff for the half-share (six pies) of the one-anna of which he was deprived.
Arguments of the Parties
Appellant's Arguments
- No cause of action: The appellant argued that the particular suit brought by the plaintiff should not lie against the defendants in the form presented.
- Limitation: The appellant contended the suit was time-barred because the covenant was allegedly broken in 1904 (possession not given to the Ketkars), and Article 97 (or otherwise Article 116) of the Limitation Act would bar the claim.
- No privity / no assignable right to sue: The appellant argued that there was no privity of contract between the plaintiff and the defendants because the sale-contract was between the defendants and the Ketkars; the Ketkars had not assigned any right to damages to the plaintiff and, in the appellant's submission, such a right could not be transferred under the Transfer of Property Act.
- Knowledge of breach and waiver: It was submitted that the plaintiff bought with knowledge that his vendors lacked possession and had absolved them from liability for acts by strangers; thus Section 55(2) could not assist a purchaser who bought after the breach with knowledge.
- Measure of damages: The appellant argued the plaintiff could only claim damages actually sustained, and suggested that (because the plaintiff paid Rs. 950 to Ketkar) the measure of damages should not exceed half of Rs. 950 as found by the trial Court.
Respondent's Arguments
- Nature of the suit: The respondent argued this was not a simple suit for possession based on failure to give possession to Ketkars in 1904, but a suit grounded on the defendants' defective title as finally determined in the earlier High Court litigation (Second Appeal No. 839 of 1918).
- Entitlement under Section 55(2): The respondent contended that the plaintiff, as a subsequent transferee, could take the benefit of the vendor's covenant under Section 55, Clause (2) of the Transfer of Property Act, even though the Ketkars had not themselves enforced the contract.
- Limitation: The respondent submitted that the cause of action accrued when the imperfection of title was declared (i.e., effectively on dispossession or when the other cosharers resisted possession), and therefore the suit filed on 8 January 1925 was within the relevant limitation period (proceedings culminating in Ex. 43 were dated 25 September 1922).
- Measure of damages: Implicit in the respondent's position (and adopted by the Court) was that damages should reflect the value of the half-share of which the plaintiff was deprived as measured by the defendants' own valuation in the original transfer (leading to the calculation of Rs. 750).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Subbaroya v. Rajagopala | Holds that a suit to recover money paid (or to claim damages) for a conveyance where title fails will lie and the cause of action arises on the date of dispossession (i.e., when imperfection of title is declared), not necessarily on the date of sale; purchaser's knowledge does not defeat statutory guarantee of title unless excluded by contract. | The Court relied on this case to hold that the plaintiff's cause of action arose when the defendants' imperfect title was declared (after the plaintiff obtained a decree and attempted to take possession), and that the plaintiff, as a subsequent transferee, could claim damages under the statutory scheme. |
| Arunachala v. Ramasami | Referenced in relation to the choice between Articles 116 and 97 of the Limitation Act (the case applied Article 116 in one example cited). | The Court noted this citation in discussing limitation but treated the distinction between Articles 116 and 97 as of minor importance for the present case because the suit was brought within three years of the decisive order. |
| Ganapa Putta v. Hammad Saiba | Followed the reasoning in Subbaroya; Article 116 of the Limitation Act was applied in that case. | The Court cited it as support for the proposition that statutory guarantees of title can be enforced by successive transferees and that limitation may run from dispossession depending on circumstances; used as corroborative authority for Subbaroya's approach. |
| Multanmal v. Budhumal | Also followed Subbaroya and applied Article 116 of the Limitation Act in similar circumstances. | Referred to as additional authority supporting the principle that the cause of action for failure of title can accrue on dispossession and that purchasers may enforce statutory or contractual remedies. |
| Nagardas Saubhagyadas v. Ahmedkhan | Holds that a purchaser evicted from his holding is entitled, where the vendor has guaranteed title, to recover the value of the land at the date of eviction. | The Court discussed this authority on measures of damages but distinguished it because that case was a direct vendor-purchaser dispute; nevertheless it informed the Court's consideration of how to value damages on eviction/dispossession. |
Court's Reasoning and Analysis
The Court proceeded in a stepwise manner, constrained by the earlier factual and procedural determinations.
- Nature of the claim: The Court identified that the present suit was not a mere claim to enforce possession based on an alleged failure to give possession to the Ketkars in 1904. Instead, the plaintiff's right to possession had been finally declared by this Court in Second Appeal No. 839 of 1918 (dated 8 March 1920). The complaint before the Court was that, upon attempting to take possession, it turned out the defendants did not possess the full one-anna share they purported to convey, leading to a failure of title and a claim for damages in lieu of the portion of the takshim.
- Applicability of Section 55(2), Transfer of Property Act: The Court examined Section 55, Clause (2), which deems that a seller contracts that the interest he professes to transfer subsists and that he has power to transfer it, and that the benefit of that contract attaches to the transferee's interest and may be enforced by each person in whom that interest is vested from time to time. The Court concluded Ketkars' inaction did not preclude the plaintiff (a subsequent transferee) from enforcing the covenant; the plaintiff could take advantage of Section 55(2) despite purchasing after certain events and despite the Ketkars never having taken steps to enforce the contract themselves.
- Precedents on cause of action and limitation: The Court relied on Subbaroya v. Rajagopala (and related authorities such as Ganapa Putta and Multanmal) to hold that the cause of action for such claims arises upon dispossession or when the imperfection of title is declared — not necessarily on the original date of sale. Consequently, limitation runs from the date of that dispossession/declared defect. The Court observed Ex. 43 (miscellaneous proceedings order dated 25 September 1922) as the operative date when the other cosharers' claims were declared and the plaintiff's effective dispossession occurred for the contested portion.
- Application to limitation: Because the suit was instituted on 8 January 1925, the Court found it was brought within three years of the operative date (25 September 1922). Whether Article 97 or Article 116 of the Limitation Act applied was held to be of minor importance because the suit was timely in either view.
- Measure of damages: The Court considered prior authorities and commentary (including Nagardas Saubhagyadas and Mayne on Damages) and noted there was no exactly analogous precedent. It reaffirmed that the plaintiff could recover damages in lieu of possession under Section 55(2). The Court then used the defendants' own valuation in their original transfer as the starting point: the defendants had valued the one-anna share at Rs. 1,500. Since the plaintiff was deprived by the defendants' fault of one-half of that one-anna (six pies), the Court adopted the appellate Court's approach taking half of the defendants' valuation: Rs. 750.
- Final disposition: After hearing further argument limited to damages, the Court concluded that the appellate Court's calculation (Rs. 750) was correct and dismissed the appeal. The Court did not reconsider costs because that point had not been pressed by the appellants.
Holding and Implications
APPEAL DISMISSED
Holding (direct effect): The Court held that (a) the plaintiff as a subsequent transferee can take the benefit of the vendor's covenant under Section 55, Clause (2) of the Transfer of Property Act; (b) the cause of action accrued when the imperfection of the defendants' title was declared (leading to effective dispossession for the contested share), and the suit filed on 8 January 1925 was within the applicable period of limitation; and (c) the correct measure of damages for the half-share (six pies) of which the plaintiff was deprived is half of the defendants' own valuation of the one-anna share — i.e., Rs. 750.
Implications: The direct consequence is that the plaintiff recovers damages assessed at Rs. 750 for the half-share of the one-anna takshim of which he was deprived by the defendants' defective title, and the appeal against that award was dismissed. The opinion applies and relies on existing precedent (notably Subbaroya v. Rajagopala and related authorities) but does not purport to establish a novel legal principle beyond applying those authorities to the facts before the Court.
Note: This summary is confined to the facts, arguments, analysis, precedents, and disposition expressly contained in the provided opinion. No outside facts or inferences have been introduced.
1. After stating facts as above, the judgment proceeded. The position is that the plaintiff having been awarded possession by this Court of the one anna share which he purchased from the defendants as representatives of the branch of Shivajee, and having discovered that the actual share owned by these defendants out of the one anna is only three pies although he succeeded in establishing his title to six pies out of that, now seeks to recover either the remaining one half, i.e, six pies of this takshim, or damages in default. The first Court has held that actual possession cannot be given, as a it is with other persons who have successfully asserted it against the defendants and the plaintiff, and there is no appeal on that point. We are, therefore, only concerned whether the present suit for damages will lie, and if so, to what amount of damages is the plaintiff entitled. The learned counsel for the appellant has argued that no such suit as that brought by the plaintiff will lie, secondly, that the suit is barred by limitation, and, thirdly, that the damages have been incorrectly calculated by the lower appellate Court. So far as damages are concerned, it is argued that under the documents on which the plaintiff bases his title he is not entitled to damages; there is no privity of contract between the plaintiff and the defendants who are the original vendors—the contract was between the plaintiff and Ketkars who were the first purchasers. Under the sale-deed passed by the Ketkars to the plaintiff no right to damages is transferred, nor could any such transfer be made under the Transfer of Property Act. Secondly, the plaintiff had purported to buy property of which his vendors were not in possession to his knowledge. He had absolved his vendors from any liability for anything done by strangers like the defendants. The breach to his knowledge had already occurred, for no possession had been given by the defendants to the Ketkars. The Ketkars were not in possession themselves, and could not transfer any possession to the plaintiff. The only right that existed in the Ketkars at the time of the transfer to plaintiff eleven years after the original sale deed, during which time from their own documents they received no profits of the property, was a right to sue, which could not be transferred under the Transfer of Property Act.
2. It is further contended that he cannot take the assistance of Section 55, Clause (2) of the Transfer of Property Act, being a person who had bought after the breach with the knowledge of its having taken place, and hence he gets no rights against the original vendor. The Ketkars themselves did not sue the defendants and they did not, and could not have, assigned such a right to the plaintiff. Next it is contended that if the plaintiff has a right to sue, whatever article of the Indian Limitation Act is applicable, that right is barred. The, covenant was broken as long ago as 1904 and the present suit is brought in 1925.
3. The plaintiff cannot place himself in a better position than his vendors, the Ketkars, would be. The view of the first Court that it is a continuing cause of action has not been approved of by the lower appellate Court. It is contended that the cause of action is the failure to give possession to Ketkars in 1904, and as Article 97 of the Lim. Act, will apply, the suit is long ago time barred, and any subsequent proceedings taken by the plaintiff are of no avail and lastly on the question of the amount of damages, it is argued that the plaintiff can only claim the damages which he has actually sustained, and as he only paid Rs. 950 to Ketkar, the measure of damages by reason of his failure to obtain possession of one half of the property purporting to be conveyed cannot exceed half of Rs. 950 as found by the first Court. On behalf of the respondent it is contended that the arguments of the appellants are based on a mis-appreciation of the real basis of the present suit. This is not a suit for possession based on the fact that the defendants failed to give possession to plaintiff's vendors, the Ketkars. It may be that Ketkar could have sued the defendants for damages for failure to give possession, but so far as plaintiff is concerned, his right to possession has been finally determined by the High Court litigation, which ended in Second Appeal No. 839, of 1918.
4. The basis of the present suit is that the defendants purported to transfer a one anna share in the family property consisting of a khoti takshim to Ketkar, who transferred it to the plaintiff. The plaintiff's right to possession of this one anna share from the defendants has been finally declared by this Court in the judgment in Second Appeal No. 839 of 1918, that judgment is dated 8th March, 1920. But when the plaintiff was put in possession or went to take possession, it was discovered that the defendants had not as a matter of fact the one anna share which they purported to convey. The one anna share was owned jointly by the four branches of Dolat, Shivaji, Daji, and Vithoji, each possessing three pies so that all that the defendants had the power to transfer was their three pies. Hence there is a failure of the title which they purported to convey, and the plaintiff is entitled to damages by reason of this defect in their title, and as it so happens that in this present case by reasons which need not be given in detail here, but owing to the adverse possession enjoyed against one of the sharers, the defendants had a title to six pies, i.e, one half, in respect of the other half of the one anna share which they actually had mortgaged and sold as belonging to them they have no title, and therefore, they are liable to their vendees in damages by reason of their failure from their contract.
5. The present, it is argued, is not a case in which the vendor warrants possession, to be handed over to the vendee and in which damages are to be claimed for failure to hand over possession, but a case in which after possession is handed over it is discovered that the vendor has not got the title which he professes himself to have. Now, so far as regards the right of the plaintiff to the possession of one anna share from the defendants is concerned, I am of opinion that he is concluded by the judgment in Second Appeal No. 839 of 1918. It is not necessary to go into the details of that judgment, but the decree was that the plaintiff is entitled to recover possession of the one anna takshim described as being in the possession of the defendants who were the same as in the present case, the takshim being decided to be the ancestral one-anna and not the takshim which had been purchased from Baloji.
6. Under Section 55, Clause (2) of the Transfer of Property Act, the seller a 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, and the benefit of the contract mentioned in this rule shall be annexed to and shall go with the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested. Now, so far as the present case is concerned, Ketkars may be struck out altogether. The Ketkars have never had any possession, nor, for reasons best known to themselves, have they ever taken any steps to enforce their claim as against the present defendants. But, so far as regards the plaintiff, I cannot, in spite of the arguments of the learned counsel for the appellants, see any reason why he should not be entitled to take advantage of Section 55. Clause (2) of the Transfer Property Act, on account of the breach of warranty by the defendants. It must be supposed that when defendants purported first to mortgage and then to sell the one anna share in the khoti takshim of the village, they contracted with the buyer that one anna takshim belonged to them exclusively, and that they had power to transfer it, and although the Katkars themselves may not have endeavoured to enforce the contract, I can see no reason why the subsequent transferee from the Ketkars should not take measures to enforce this contract.
7. The learned pleader for the respondent has referred to the case in Arunachala v. Ramasami(1) and Subbaroya v. Rajagopala(2). In one of these cases Article 116 of the Lim Act, was applied, and in another Article 97. That is a matter which does not make very much difference in the present case, as will be shown hereafter when I come to the question of limitation. The case Sabbaroya v. Rajagopala is a case in point for several reasons. In that case A, who had a title to immovable property voidable at the option of G, sold it to B, and put B in possession thereafter. C then brought a suit against A and B got a decree, and obtained possession thereof in execution. Thereupon the plaintiffs brought that suit to recover the amount which they had paid to the original vendor on the ground that the consideration for the sale failed and they were deprived of the possession of the property. It was held that such a suit would lie, and that the cause of action arose not on the date of the sale, but on the date of dispossession. It was contended that as there was no express covenant for title and as the plaintiffs took with full knowledge of the infirmities of title, the principle of caveat emptor applied, and there was no cause of action. Some portion of that argument has been raised in the present appeal as I have already said, i.e, that the plaintiff who was himself a member of the same family as the defendants was aware that the defendants were not the full owners of the one anna share, and was at any rate aware that no possession had been given or could be given to Ketkars and consequently to himself, the reason presumably being that the other branches were in possession of the remaining nine pies. But it was held in that case that in India there is a statutory guarantee for good title unless the same is excluded by the contract of parties, and that the question of the knowledge of the purchaser does not affect the right to be indemnified under the Indian Statute law. This case has been referred to and followed both in Ganapa Putta v. Hammad Saiba(3) and Multanmal v. Budhumal(4), in both of which cases Article 116 of the Lim. Act was applied.
8. Whatever may be the position of Ketkars, the plaintiff has been declared entitled to the possession of the one anna in suit, and having been unable to get possession of that by reason of the infirmity of the title of the original vendor, will be entitled to recover not in this case the purchase money, but damages in lieu of possession under the covenant under Section 55, Clause (2) of the Transfer of Property Act, and the ruling in Subbaroya v. Bajagopala. As to the question of limitation it has been contended by the learned counsel for the appellants that limitation began to run when the covenant was first broken, i.e when possession was not handed over to the Ketkars, as it should have been immediately on the execution of the sale deed by the defendants to them in 1904. The present case, however, is not a suit for possession. The suit in which the plaintiff sought possession was the suit of 1917, which ended in this Court in 1920, and in a case like the present the cause of action will, under the ruling I have already quoted, Subbaroya v. Rajagopala arise when the imperfection of the defendants' title is first declared. It was only Subsequent to the plaintiff getting a decree in his favour in this Court and going to take possession that the other cosharers came forward and resisted, and there were miscellaneous proceedings which ended in Ex. 43, which is an order in the miscellaneous proceedings declaring that the other sharers were entitled to three pies each out of the one anna given into the opponent's possession, the opponent being the plaintiff is the present case. The date of that order is 25th September, 1922. Whether Article 97 applies or whether Article 116 applies is of very minor importance as the suit was brought within three years of the date of that order. The date of the suit is 8th January, 1925. Both the learned counsel for the appellants and the learned pleader for the respondent agree that the case is governed by Article 97 of the Lim. Act, which applies to a suit for money paid upon an existing consideration which afterwards fails, the period running from the date of the failure, and in this case the date of the failure must be taken to be when the plaintiff was dispossessed of the one anna share except so far as regards the three pies share which remained with the original vendors, the present defendants. The suit being brought very shortly after this, it is not necessary to consider whether Article 116 would apply, which gives a longer period. The suit is, therefore, not barred by limitation.
9. The sole remaining point is the question of damages. The learned counsel for the appellants does not press the question of costs. As regards the question of damages, I should like to hear further arguments before I give a final decision in the case, and these may be heard tomorrow. (After further arguments were heard, His Lordship delivered the following judgment).
JUDGMENT
10. I asked for further argument on the question of damages. The first Court awarded the plaintiffs as damages half the sum which he paid to Ketkar, and the appellate Court has awarded to the plaintiff half the sum which the Ketkars paid to defendants. There is no case exactly on all fours with the present case, because here the defendants are not the plaintiff's vendors, and it has been argued that the price which the plaintiff paid to Ketkar has nothing to do with the measure of damages. Although various cases have been quoted by the learned pleader for the appellants, I cannot say that any one throws much light on the subject. It is hold in Nagardas Saubhagyadas v. Ahmedkhan(5) that a purchaser evicted from his holding is entitled to recover from a vendor who has guaranteed his title the value of the land at the date of eviction. That, however, is a case between a vendor and purchaser, which the present case is not. The learned pleader has further relied on a passage from Mayne on Damages at p. 203, which states that the measure of damages is the difference between the value of the thing as it is and its value as it was warranted to be. At p. 207 the learned author states the value of damages on eviction depends on the value of the estate to be calculated on the value of the property conveyed at the time of the eviction and it is stated that although there is little authority upon this point in England, it has formed the subject of frequent discussion in America, where in the majority of cases the value at the time of the conveyance has been taken as the criterion. I have already stated in an earlier part of this judgment that the case is governed by Section 55, Clause (2) of the Transfer of Property Act, and the plaintiff as a subsequent transferee is entitled to take the benefit of the contract mentioned in the section. Now the contract was between the defendants and Ketkars, and was to the effect that they had a complete interest of one anna in the one anna share. The value of the one anna share according to them was Rs. 1,500. We now find that their interest extended only to one-third of that although by reason of the adverse possession against another sharer plaintiff has got possession of one half. In these circumstances I am of opinion that the view of the lower appellate Court is correct, and that the value of the one-half share of which plaintiff has been deprived by the fault of the defendants should be taken at half the value of the share estimated by them in their original transfer to Ketkar, i.e, Rs. 750. It is unnecessary to enter into the question of costs as it has not been pressed by the learned counsel for the appellants. In the result the appeal is dismissed with costs.
M.N/R.K
11. Appeal dismissed.
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