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Shankarappa Kotrabasappa Harpanhalli v. Khatumbi
Structured Summary of the Opinion by Rangnekar, J.
Factual and Procedural Background
The plaintiff-appellant brought this suit seeking recovery of a one-fifth share in the property by partition and mesne profits. Defendants Nos. 1 to 4 and Aminabi had been co-owners of the property and earlier obtained a decree for possession in Suit No. 229 of 1912. On 8 July 1925 Aminabi executed a registered sale deed transferring her one-fifth share to the plaintiff, and this suit was founded on that sale deed.
At trial the defendants claimed a right of pre-emption, which was rejected, and the trial Court granted a decree for partition. On appeal the defendants abandoned the plea of pre-emption and instead contended that the sale deed was void because Aminabi had purported to sell both her one-fifth share and the right to recover past (mesne) profits; the contention was that a right to recover mesne profits could not legally be sold and therefore the entire transaction was void. The trial Court's decree for partition in favour of the plaintiff was thus challenged in the lower appellate court, which held the sale void under section 6(e) of the Transfer of Property Act. The present appeal challenges that appellate decision.
Legal Issues Presented
- Whether a transfer that conveys land together with the right to recover accrued mesne profits (past profits) is a transfer of a "mere right to sue" within clause (e) of section 6 of the Transfer of Property Act and therefore void.
- Whether, if the consideration for the sale is a single (non-severable) consideration covering both land and the right to recover mesne profits, the entire sale must be held invalid under section 6(e).
Arguments of the Parties
Appellant's Arguments (Mr. Desai)
- Assuming for argument that a bare right to recover mesne profits cannot be lawfully sold, where there is a sale of land and the right to recover mesne profits appertaining to that land is sold along with it, section 6(e) does not render the sale void.
- Even when the consideration is a single, indivisible consideration for land plus mesne profits, the sale should be regarded as valid because what is transferred is not a "mere" or "bare" right to sue but property together with an incidental right attached to that property.
Respondents' / Defendants' Arguments
- The sale deed was void because Aminabi purported to sell the right to recover mesne profits along with her share, and a right to recover mesne profits cannot be legally sold; therefore the whole transaction is void.
- Procedurally, the plaintiff-appellant objected that this plea was not raised at trial; that objection was rejected by the learned Judge below (i.e., the appellate court entertained the point despite it not being raised at trial).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Har Prasad Tiwari v. Sheo Gobind Tiwari | Relied upon by the learned Judge below (no specific principle stated in this opinion). | The Court observed that the lower Judge relied on this case but stated that it had no application to the facts of the present case. |
| Kathu Jairam v. Vishwanath Ganesh | Relied upon by the learned Judge below (no specific principle stated in this opinion). | The Court observed that the lower Judge relied on this case but stated that it had no application to the facts of the present case. |
| Shyam Chand Koondoo v. The Land Mortgage Bank of India | Referred to in the lower decisions as authority on transferability; specific rule not restated in this opinion. | The judgment was referred to by earlier decisions (including the Madras decision) which the Court considered in evaluating Seetamma v. Venkataramanayya. |
| Seetamma v. Venkataramanayya | Held (as recorded) that a transfer of a claim for past mesne profits is invalid under clause (e) of section 6 of the Transfer of Property Act. | The Court examined this Madras decision, found that it did not distinguish between a mere right to recover mesne profits and mesne profits incidental to a sale of the property, doubted its correctness, and explicitly declined to follow it. |
| Ellis v. Torrington | Established an exception to the rule against assignment of a bare right of action: if the assignee has an interest in the subject-matter (an interest sufficient to validate the assignment), assignment of right of action for damages may be valid. | The Court relied on this authority to support the proposition that a right to recover profits appurtenant to property is not a "mere" right to sue and may be transferred with the property. |
| Glegg v. Bromley | Emphasized the distinction between assignment of a bare right of action and transfer of property with incidental remedies; provided the test whether subject-matter is property with incidental remedy or a bare right to sue. | Quoted with approval and used as a guiding test to determine whether the transfer was of a mere right to sue or of property with an incidental right. |
| Dawson v. Great Northern and City Railway | Referenced as part of English cases distinguishing bare rights of action from rights incidental to property (specific principle not separately summarized in opinion). | Referred to by the Court (through citation of English authorities) as supporting the distinction relied upon by the Court. |
| Dickinson v. Burrell | Referenced among English authorities supporting the distinction between bare rights and rights incidental to property. | Used as part of the body of English authority the Court considered persuasive on the exception to non-assignability of bare rights of action. |
| Monmatha Nath Dutt v. Matilal Mitra | Stated that an assignment of a mere right to sue conveys no property, whereas conveying the property itself is different; set out the distinction between a mere right to sue and property with incidental remedy. | The Court cited this Indian High Court decision approvingly as supportive of the conclusion that transfer of property with incidental mesne profits is not a transfer of a mere right to sue. |
| Ganga Din v. Piyare Mukerji | Held that a right to claim mesne profits is not a 'mere right to sue' within section 6 of the Transfer of Property Act (as recorded in the opinion). | The Court relied on this decision to support its view that mesne profits are incident to ownership and are not merely damages incapable of being transferred along with the property. |
| Venkatarama Aiyar v. Ramasami Aiyar | A later Madras decision which doubted Seetamma and rested on Ellis v. Torrington; criticized narrow adherence to English tort law. | The Court cited this decision as an example where Seetamma was doubted and where Ellis was invoked to show recognition of the distinction the Court adopts. |
| Jagannath v. Kalidas Chatterji | Held that purchase of property together with covenants or ancillary rights passing with the land is not a purchase of a mere right to sue; applied the test of whether the subject matter is property with incidental remedy or a bare right to sue. | The Court cited this case as endorsing the test and principle applied in the present judgment, and as supporting the conclusion that the transfer in question was not a mere right to sue. |
| Jai Narayan Pande v. Kishun Dutta Misra | Quoted Glegg v. Bromley with approval and applied the distinguishing test between bare rights and property with incidental remedies. | Used by the Court as an authority that reiterates the applicable test for distinguishing a mere right to sue from property with incidental remedies. |
| Pragi Lal v. Fateh Chand | Referred to in earlier decisions consulted by the Madras Court in Seetamma; specific principle not recited in this opinion. | Mentioned as one of the precedents invoked in Seetamma; the present Court noted its presence in that chain of authorities when assessing Seetamma's correctness. |
| Varahaswami v. Ramchandra Raju | Held (per the head-note cited) that a claim to recover damages from an agent for negligence in collecting rent was a mere right to sue within section 6(e). | Noted by the Court as one of the authorities relied upon in Seetamma; the Court distinguished such facts from cases where mesne profits are incident to property transferred. |
Court's Reasoning and Analysis
The Court began by focusing on the language of clause (e) of section 6 of the Transfer of Property Act: "A mere right to sue cannot be transferred." The judge considered the import of the word "mere" and concluded that it denotes a "bare" right to sue (i.e., a right divorced from any proprietary interest).
Applying that interpretation to the facts, the Court found it important that what was sold here was Aminabi's one-fifth share in the land together with mesne profits appertaining to that share — not an isolated assignment of the right to sue. The judge reasoned that where mesne profits are sold incidentally with the land, the right to recover them is not a mere or bare right to sue but an incidental right attached to the property itself.
The Court examined English authorities (notably Ellis v. Torrington and the observations of Bankes L.J., Scrutton L.J. and Warrington L.J.) which draw a distinction between a bare right of action and a right which is subsidiary to a proprietary interest; those authorities recognized an exception to the rule against assigning bare rights where the assignee has an interest in the subject-matter. The Court treated these authorities as demonstrating that transfers of property together with incidental rights of action do not amount to assignments of mere rights and are therefore not invalid on the ground of champerty or maintenance.
Turning to Indian authorities, the Court cited multiple High Court decisions (Monmatha Nath Dutt, Ganga Din, Jagannath, Jai Narayan Pande) that endorse the distinction between a mere right to sue and property with incidental remedies. The Court found these decisions consonant with the English authorities and persuasive.
The Court then considered the Madras decision in Seetamma v. Venkataramanayya, which had held that a transfer of a claim for past mesne profits is invalid under section 6(e). The present Court observed that Seetamma did not appear to draw the distinction between a mere right to recover mesne profits and mesne profits transferred as subsidiary to the enjoyment of the property. Seetamma had relied on earlier cases such as Shyam Chand Koondoo and Pragi Lal, and on a Madras decision (Varahaswami v. Ramchandra Raju). The Court noted that Seetamma's reasoning had been doubted subsequently in Venkatarama Aiyar v. Ramasami Aiyar, where Ellis v. Torrington was relied upon.
The Court concluded that the rule against assignment of bare rights in English law rests on doctrines of maintenance and champerty, doctrines which have not been adopted in British India in the same form. Consequently, the Court rejected the view taken by the lower appellate Court that the sale was void under section 6(e), holding instead that clause (e) does not apply to a transfer of land coupled with the incidental right to recover mesne profits appertaining to that land.
Holding and Implications
Holding: The appeal was allowed. The Court held that the transfer of the one-fifth share together with the right to recover past mesne profits appertaining to that share was not a transfer of a "mere right to sue" within clause (e) of section 6 of the Transfer of Property Act, and therefore the sale deed was not void on that ground.
Immediate Consequence: The decree of the lower appellate Court (which had set aside the trial Court decree) was set aside; the trial Court's decree for partition in favour of the plaintiff was restored, with all costs throughout.
Broader Implication (as expressed in the opinion): The Court articulated and applied the principle that clause (e) of section 6 bars only transfers of a "mere" or "bare" right to sue; it does not invalidate a sale of property when the right to recover accrued mesne profits is transferred as an incident of the property itself. The Court found English authorities and several Indian High Court decisions supportive of this distinction, and expressly declined to follow the contrary view taken in Seetamma v. Venkataramanayya.
Appeal allowed.
Reported conclusion in the opinion: decree of lower appellate Court set aside; trial Court restored with costs.
Rangnekar, J.:—
This appeal raises an important question of law, which has not come up for decision yet in this Court.
The plaintiff-appellant brought this suit to recover a one-fifth share in the property in suit by partition and mesne profits. It appears that defendants Nos. 1 to 4 and Aminabi were co-owners of certain property and obtained a decree for possession of the same in Suit No. 229 of 1912. On July 8, 1925, Aminabi sold her one-fifth share in the property to the plaintiff by a registered sale deed, and this suit was filed by the plaintiff on that sale deed. The defendants claimed a right of pre-emption. This was, however, found against them and a decree for partition was passed by the trial Court. In appeal by the defendants the question as to the right of pre-emption was given up, and the only point raised was whether the sale deed was void as Aminabi had sold the right to recover mesne profits along with her share, and as a right to recover mesne profits could not be legally sold, the whole transaction was void. The plaintiff-appellant objected to the plea on the ground that it was not raised in the trial Court, but the learned Judge rightly rejected this contention. He held that as the sale was of land as well as the right to recover mesne profits, and that as mesne profits were in the nature of damages, the whole transaction was void under section 6(e) of the Transfer of Property Act. He found that the consideration paid by the plaintiff was a single consideration for both land and the right to mesne profits, and that the transaction was indivisible and the sale void. The learned Judge relied upon Har Prasad Tiwari v. Sheo Gobind Tiwari and Kathu Jairam v. Vishwanath Ganesh, which I think had no application to the facts of this case. He further referred to Shyam Chand Koondoo v. The Land Mortgage Bank of India and Seetamma v. Venkataramanayya. The question is whether the decision is right.
Mr. Desai for the appellant has argued that, assuming that the right to recover mesne profits cannot be legally sold, where there is a sale of land and a right to recover mesne profits of that land is sold with it, section 6(e) of the Transfer of Property Act does not apply, and the sale is valid even though the consideration is not severable. It is common ground that what was sold was the one-fifth share of Aminabi and mesne profits appertaining to that share.
Section 6(e) of the Act runs as follows: “A mere right to sue cannot be transferred.” Now the word “mere” seems to me to be important and, apart from any authority, what the section means is that what is known in English law as a “bare” right to sue cannot be transferred. But if along with the land the right to recover the profits of the land which have already accrued due is sold, then it is difficult to see how it can be said that the subject matter of the sale is a “bare” or a “mere” right to sue. In such a case, in my opinion, the section would not apply and the transaction would not be illegal. In such a case what is sold is not a mere right to sue, but property with an incidental right attached to the property itself.
There is ample authority for this view. In Ellis v. Torrington Bankes L.J stated that the rule that a bare right of action for damages is not assignable rested on the principle that the law will not recognise any transaction savouring of maintenance or champerty, and that there is an exception to the rule, and the exception is where the assignee can establish that he has an interest in the suit. The learned Lord Justice then referred to the observations of Best, C.J in Williams v. Protheroe, and observed (p. 407):—
“It was held then that the purchase of an estate conferred on the purchaser an interest sufficient to validate an assignment of a right of action for damages for breach of a covenant to repair the premises, and that the law of champerty could not be invoked to defeat his rights under the assignment.”
The learned Lord Justice was of opinion that where a right to profit is appurtenant to the right to property, it is not a bare right to sue. The judgment of Scrutton L.J is very instructive on the point under consideration. The learned Lord Justice pointed out that early in the development of the law the Courts of equity and perhaps the Courts of common law also took the view that where the right of action was not a bare right, but was incidental or subsidiary to a right in property, an assignment of a right of action was permissible, and did not savour of champerty or maintenance. In support of this statement the learned Lord Justice referred to Glegg v. Bromley, Dawson v. Great Northern and City Railway, and Dickinson v. Burrell. All these cases emphasize the distinction between the assignment of a bare right of action for damages and the sale of property with all incidents attached to it, and upheld the validity of the latter. Warrington L.J also took the same view.
Turning to the Indian cases, I find that the same view is taken by at least three of our High Courts. In Monmatha Nath Dutt v. Matilal Mitra, Ghose, J. observed at page 617 as follows:—
“In this case the question is whether what was assigned was a mere right to sue or property with an incidental remedy for its recovery and consequential benefit. An assignment of a mere right to sue does not convey any property, e.g, if any person out of possession of immoveable property makes an assignment to the effect that the assignee would have a right to sue, without conveying any interest in the property, the assignee would not be entitled to maintain any suit for the recovery of the property. But it would be otherwise if the property itself is transferred.”
In Ganga Din v. Piyare Mukerji, J. observed as follows:—
“With all respects to the learned Judges who decided the case of Seetamma v. Venkataramanayya,(6) I am unable to hold that a right to claim mesne profits is a ‘mere right to sue’ within the meaning of Section 6, Transfer of Property Act. I may point out that in the Madras High Court itself the soundness of this decision has been doubted in Venkatarama Aiyar v. Ramasami Aiyar.(7)
Mesne profits has been defined in the Civil Procedure Code as:
‘those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits.’
A person who is entitled to a property in the possession of a trespasser is entitled not only to the property but to the profits of which he has been improperly deprived. The profits rightfully belong to the owner of the land and it is not accurate to say that the profits are payable merely by way of damages.”
In Jagannath v. Kalidas Chatterji, J. observed at page 247 as follows:
“A point was argued by the learned advocate for the respondent that what was purchased was a right to sue for compensation and that this cannot be transferred. Under Section 6, Clause (e), Transfer of Property Act, the prohibition is against the transfer of a mere right to sue. The word ‘mere’ implies that the transferee acquires no interest in the subject of transfer other than the right to sue. But in the present case what has been purchased is the tank and along with it any covenant running with the land has passed to the plaintiff and by virtue thereof the plaintiff brings this action. It cannot, therefore, be stated that what has been purchased is a mere right to sue. The test to be applied is pointed out in Glegg v. Bromley quoted with approval in Jai Narayan Pande v. Kishun Dutta Misra:
‘The question was whether the subject matter of the assignment was, in the view of the Court, property with incidental remedy for its recovery or was a bare right to bring an action either at law or in equity.’
Applying that principle it cannot be asserted that what was assigned to the plaintiff was a bare right to bring a suit. I am unable to accept the contention put forward on behalf of the respondent in this respect.”
This brings me to the Madras decision on which Mr. Manerikar relies. In Seetamma v. Venkataramanayya it was held that a transfer of a claim for past mense profits is invalid under clause (e) of section 6 of the Transfer of Property Act. As far as I can see, in the short judgment in that case the distinction between a mere right to recover mesne profits and right to recover mense profits incidental to the property sold is not at all noticed. The learned Judges simply referred to an earlier case in Shyam Chand Koondoo v. The land Mortgage Bank of India and an equally earlier case of Pragi Lal v. Fateh Chand. They also referred to a Madras decision, Varahaswami v. Ramchandra Raju. The claim in that case was, as appears from the head-note, to recover damages from an agent for being negligent in collecting rent, and it was held that it was a mere right to sue within the meaning of section 6(e) of the Transfer of Property Act. Seetamma v. Venkataramanayya, however, was doubted in a later case of Venkatarama Aiyar v. Ramasami Aiyar. Mr. Justice Sadasiva Ayyar stated that the decision in Seetamma's case and some other cases was the result of what he thought was an unnecessarily close adherence to the law of torts in English Courts. Mr. Justice Seshagiri Aiyyar rested his decision on Ellis v. Torrington. The learned Judge then referred to Seetamma's case and to another case to which he was a party and observed that these decisions did not seem to have recognised the distinction between a bare right to sue and a right which was only subsidiary to the enjoyment of the property itself. The learned Judge observed as follows at page 543:—
“If the decision to which I was a party is to be understood as laying down that even in cases of actual transfer of mesne profits as subsidiary to the enjoyment of the property the right cannot be enforced, I am not prepared to stand by it.”
As far as I can see, the course of decisions in Madras does not seem to be uniform. Whatever the view of the Madras High Court may be, I am unable to agree with the view taken in Seetamma's case, and in my opinion, the word “mere” in clause (e) of section 6 makes the position clear. The rule, as pointed out by Bankes L.J, is based on champerty and maintenance, and these specific rules of English law against maintenance and champerty have not been adopted in British India.
I am, therefore, unable to accept the view taken by the lower appellate Court, and the appeal must be allowed. The decree of the lower appellate Court is set aside and that of the trial Court is restored with all costs throughout.
Appeal allowed.
J.G.R
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