Patkar, J.:—
This appeal raises the question whether in a suit by the vendee it is competent to the Court to pass a decree for possession conditional on the vendee paying the unpaid purchase money.
The plaintiff sued to recover possession of the house in suit alleging that it belonged to her father Shivlingappa who sold it to her on December 15, 1920, for Rs. 1,000 and delivered possession, and that during her absence she was dispossessed by the defendants, her sisters. Defendant No. 3 admitted the plaintiff's claim. Defendants Nos. 1 and 2 alleged that the transaction was hollow and without consideration and denied that the possession was handed over to the plaintiff.
The learned Subordinate Judge held that the transfer was not colourable but was without consideration, and passed a decree ordering possession of the entire house on condition that if within three months the plaintiff did not pay to defendants Nos. 1 and 2 Rs. 500 the suit shall be dismissed, and that the plaintiff should recover a half share in the house by partition. The ground on which the decree was based was that the vendor Shivlingappa was the father of the plaintiff and the defendants, and defendant No. 3 having admitted the plaintiff's claim, defendants Nos. 1 and 2, the contesting defendants, were entitled to the half of the property and the plaintiff was entitled to the other half. On appeal the decree was confirmed.
We must, therefore, accept the findings of the lower Court as conclusive that the sale was a genuine sale and not a colourable one, that the possession always remained with the father Shivlingappa, and that the consideration was not paid by the plaintiff. Those facts are not challenged before us in appeal. The only point argued before us is that the Court had no jurisdiction to pass a conditional decree ordering possession to be given to the vendee on payment of the balance of the purchase money. As the plaintiff was entitled to half of the property, half, the consideration Rs. 500 was ordered to be paid by the lower Courts to defendants Nos. 1 and 2.
There is a distinction between a sale where the consideration is intended to be paid and is not paid, and where the consideration is not intended by both parties to be paid at all. In the former case the title would pass to the purchaser and in the latter case though the vendor was tricked into going through the form of execution and registration of the document, the sale-deed would be void as a colourable transaction. See the decisions in the cases of Umedmal Motiram v. Davu bin Dhondiba, Trimalrav Raghavendra v. The Municipal Commissioners of Hubli, and the judgment of Sir Charles Farran in Tatia v. Babaji. The finding of both the Courts is that the sale was genuine, and therefore the title passed to the plaintiff though the consideration was not paid by the plaintiff to her father, but the possession all along remained with the father since the date of the sale in 1920. The only question is whether the conditional decree passed by the lower Court is right.
Apart from decided cases, the rights and liabilities of the buyer and seller are regulated by section 55 of the Transfer of Property Act. Under section 55(1)(f) the seller is bound to give, on being so required, the buyer or such person as he directs, such, possession of the property as its nature admits. Under section 55(4)(b) the seller is entitled where the ownership of the property has passed to the buyer before payment of the whole of the purchase money, to a charge upon the property in the hands of the buyer, any transferee without consideration or any transferee with notice of the non-payment, for the amount of the purchase money or any part thereof remaining unpaid and for interest on such amount or part from the date on which possession has been delivered. Under section 55(5)(b) the buyer is bound to pay or tender at the time and place of completing the sale the purchase money to the seller or such person as he directs. It would, therefore, follow from the rights and liabilities of the vendor and the purchaser as determined by the statute that the buyer must pay the consideration to the seller and is entitled to possession of the property. The terms of the conveyance having been settled, generally at a meeting between the parties, the conveyance is signed, the money is handed over and possession is given, and so it can be loosely said that the possession is claimable concurrently with the payment of the purchase money. As held by Fawcett, J. in Kapadvanj Municipality…Defendant; v. Ochhavlal Damodar Parikh…Plaintiff., the words “on being so required” in clause (f) of sub-section (1) of section 55 might be construed as meaning “on being properly required”. Where, however, the consideration is not paid at the time of the conveyance, the seller is entitled under section 55(4)(b) to a statutory charge on the property in the hands of the buyer. There is no provision in the Transfer of Property Act for the vendor's lien over the immoveable property sold like the seller's lien provided for by section 47 of the Indian Sale of Goods Act, 1930, in respect of moveable property sold.
According to the decision of the Privy Council in Webb v. Macphetson, though English cases might be useful for purposes of illustration, the charge which the vendor obtains under the Transfer of Property Act is different in its origin and nature from the vendor's lien given by the Courts of equity to an unpaid vendor, and the vendor's lien is a creation of the Court of equity and can be modified to the circumstances of the case by the Court of equity. The statutory charge given by section 55 of the Transfer of Property Act stands on a quite different footing from the vendor's lien. Strictly speaking, the vendor's lien for unpaid purchase money on immoveable property which is sold and continues to remain in the possession of the vendor is not recognised by statute, and it is difficult to enforce and incorporate it in a decree so as to make the enforcement of the lien a condition precedent to the recovery of possession in a suit by the purchaser for possession of the property. The statutory charge recognised by section 55 is upon the property in the hands of the buyer or any transferee without consideration or any transferee with notice of the non-payment, for the amount of the purchase money or any part thereof remaining unpaid.
In Subrahmania Ayyar v. Poovan, where a sale-deed was executed more than seven years before the suit but the purchase money was not paid and the vendors continued in possession of the land and a suit was brought by the purchaser to recover possession, it was held, following the decision in the case of Umedmal Motiram v. Davu bin Dhondiba, that the vendors had a charge, by operation of law, on the property sold, for the purchase money, and though a suit by the vendors to enforce their lien would have been barred by limitation under Article 111, their lien was not extinguished by section 28 of the Indian Limitation Act, and as the vendors were in possession they had a right to retain possession until the purchase money was paid and the lien extinguished by such payment. In Velayulha Chelty v. Govindasaimni Naiken it was held that the lien of the unpaid vendor of the land under section 55 of the Transfer of Property Act is non-possessory, and that the vendor has only a right to retain the title-deeds and to a charge for the unpaid purchase money, but he cannot retain possession of the property sold against the vendee. In Velayutha Chetty v. Govindasawmi Naiken it was held that the provisions of the Transfer of Property Act that the vendee, after the conveyance, is entitled to possession and that the vendor has a statutory charge on the property for the unpaid purchase money are clear, and it is not competent to the Courts in a suit for possession by the vendee to pass a decree for possession conditionally on the vendee paying the balance of the purchase money. The decision is based on two grounds: first, that the provisions of the Transfer of Property Act are clear and that it is not open to the Courts to introduce or enforce equities modifying the provisions of the statute law, and, secondly, that there is no provision for counter-claims and that the vendor in that case had not in fact counter-claimed for the enforcement of the charge. The same view was accepted in Krishnamma v. Mali, which dissented from the view taken in Subrahmania Ayyar v. Poovan.
The Allahabad High Court, however, has taken a different view. In Shib Lal v. Bhagwan Das Mahmood, J. expressed the view that in such a case the equities may exist in favour of the vendor so as to subject the decree for possession to restrictions and conditions appropriate to the circumstances of each case, but held that no such equities existed in that case. In Baijnath Singh v. Paltu the Allahabad High Court, following the obiter dictum of Mahmood, J., passed a decree in favour of the purchaser conditionally on the payment of the purchase money and directed that in default of such payment the purchaser shall forfeit his right to recover the property.
The Calcutta High Court, in the case of Nilmadhab Parhi v. Hara Proshad Parhi held that where the vendor has a lien for the unpaid balance of the purchase money, and the vendor's lien gives him a right to keep the title-deeds until payment, the right of the purchaser to obtain possession under section 55(1)(f) of the Transfer of Property Act and the right of the vendor to realise the unpaid balance of the purchase money under section 55(4)(b) may be enforced in one suit.
Coming to the decisions of the Bombay High Court, it was held in Umedmal Motiram v. Davu bin Dhondiba that a vendor had a lien for the amount of the unpaid purchase money and the purchaser cannot obtain possession without paying off the charge. That decision was passed before the Transfer of Property Act was enacted and made applicable to the Bombay Presidency. The case of Kevaldas v. Nagindas does not deal with the point arising in this case, but it was held, following the decision in the case of Baijnath Singh v. Paltu, that the fact that part of the consideration money for a sale has not been paid does not make it void wholly or partially, and that all that the vendor is legally entitled to in that case is a lien on the property sold to the extent of the amount not paid. The case related to the question whether the decree-holder against the purchaser had a right to attach the property sold when the consideration was not paid, and did not deal with the question arising in this case as to whether a Court is competent to pass a conditional decree ordering payment of the purchase money in a suit by the purchaser to obtain possession of the property on the strength of the sale-deed. In Sagaji v. Namdev it was held that the sale was a completed transaction though the consideration was not paid, and the only remedy of the defendant was to sue for the amount. The judgment appears to be inconsistent with the decree eventually passed restoring the decree of the Subordinate Judge who had passed a conditional decree ordering the purchaser to obtain possession on payment of the consideration to the vendor. It appears, therefore, that in none of these cases the precise point now under consideration was considered after the Transfer of Property Act was made applicable to the Bombay Presidency.
There appears, therefore, to be a conflict of opinion between the Madras High Court on the one hand and the Allahabad and the Calcutta High Courts on the other. There is no clear decision of the Bombay High Court on this point after the Transfer of Property Act came into force. The view of the Calcutta High Court can be supported on the ground of convenience and also on equitable considerations.
The decisions of the Madras High Court are based principally on two grounds. The first is that the provisions of the Transfer of Property Act are clear. The purchaser is entitled to possession of the property and the vendor has only a statutory charge on the property in the hands of the purchaser. There is no provision in the Transfer of Property Act for a vendor's lien, and it is not permissible for a Court to invoke equitable principles to modify the provisions of the statute law. The equitable doctrine of part performance has been applied in order to modify the statute law in the decisions of this Court, but it was held in a recent decision of the Privy Council in Ariff v. Jadunath Majumdar that a lessee could not rely upon the English equitable doctrine of part performance as his right to enforce the verbal contract had become barred by limitation long before the commencement of the suit, and that the English equitable doctrine of part performance could not be applied by analogy so as to modify or override the mandatory provisions of an Indian statute such as the Transfer of Property Act. In the present case the sale-deed was passed in 1920 and the suit was brought in 1924, and under Article 111 of the Indian Limitation Act which prescribes the limitation period of three years, the suit for personal payment of the unpaid purchase money would be barred. The statutory charge in favour of the defendants would, however, be within time under Article 132 of the Indian Limitation Act. The equitable doctrine of vendor's lien not being clearly and specifically recognised by the Transfer of Property Act, it is difficult to apply the equitable principle in modification of the statute law.
The second ground underlying the decisions of the Madras High Court is that the vendor not being able to set up a counter-claim, nor having, as a matter of fact, made a counterclaim, a decree could not be passed enforcing the vendor's lien. This ground merely relates to a matter of procedure rather than substantive law.
I think it is more convenient to recognise the rights of the parties in one decree instead of driving the parties to a separate suit to enforce a right to which there is no defence. I am inclined to agree with the view of the Calcutta High Court in Nilmadhab Parhi v. Hara Proshad Parhi, where it was observed as follows (p. 1164):—
“if we accept the contention of the Respondents the result will be that the plaintiffs will obtain an unconditional decree for possession, the vendor will be driven to institute a suit to enforce the lien which he possesses over the property for the unpaid purchase money … It is obviously undesirable that the matter in controversy which may be settled without disadvantage to any of the parties, in a single litigation, should be repeatedly agitated in a succession of suits.”
Though I feel difficulty in giving effect to the equitable principle of vendor's lien which is not recognised in the Transfer of Property Act, I do not think that there is any insuperable objection to recognise the statutory charge provided for in section 55(4)(b) of the Transfer of Property Act, and to incorporate the statutory charge in the decree in the suit brought by the purchaser for recovery of possession. If the purchaser obtains unconditional possession of the property, it would be open to him either to sell or mortgage the property, and the transferee for value without notice of the non-payment would not be bound by the charge of the vendor for the unpaid purchase-money. So long as the vendor has not parted with the possession of the property, the transferee for consideration would have constructive notice of the possession of the vendor, and also of the non-payment of the purchase money and the statutory charge recognised by the Transfer of Property Act. On the purchaser getting unconditional possession of the property a transferee for value from the purchaser will have no notice of the charge and will not be bound to discharge the debt creating the statutory charge unless the charge is recognised in the decree awarding possession to the purchaser.
I would, therefore, while decreeing possession to the plaintiff purchaser, incorporate in the decree the charge in favour of the vendors who are the defendants in the suit. According to the decision in Yellawa v. Bhimangavda the Court will not allow the heir to recover family property from a widow entitled to be maintained out of it without first securing a proper maintenance for her, and the maintenance in such a case is declared a charge on the property in a suit by the heir to recover family property though maintenance may not have been counter-claimed in the suit. I think that in the interest of justice and to avoid multiplicity of suits the statutory charge can be declared in favour of the vendor in a suit brought by the purchaser for recovery of possession of the property.
I would, therefore, pass a decree in favour of the plaintiff to recover possession of the entire house. I would also declare the statutory charge in favour of defendants Nos. 1 and 2 for Rs. 500, the amount of the purchase money due to defendants Nos. 1 and 2, and order that the plaintiff should pay the amount of Rs. 500 within six months from this date and in default defendants Nos. 1 and 2 should, on payment of the Court-fees on a claim of Rs. 500, recover the amount of Rs. 500 by sale of the property in suit. I would order each party to bear her own costs throughout.
Barlee, J.:—plaintiff, one of the four daughters of one Shivlingapa, sued on a sale-deed executed by her father in her favour for possession of his house. She pleaded that she had been given possession by him at the date of the sale-deed but had been dispossessed by her three sisters after his death.
The defence of two sisters was that the transaction was colourable, designed to protect the property from his brothers. They pleaded that their father had been in possession till his death and subsequently their mother, and defendant No. 1, till the former's death. The latter is now, they plead, in possession.
The Judge of the first Court held that the transaction was genuine. He held that the father had intended to transfer ownership, but that the vendee had never paid the price nor had she ever taken possession. Accordingly, he made a decree for possession, but relying on the Allahabad rulings in Shib Lal v. Bhagivan Das and in Baijnath Singh v. Paltu and on a decision in Kevaldas v. Nagindas he made the decree conditional on the payment of the price.
In first appeal the only question argued was whether consideration had been paid. The learned District Judge held that it had not been paid since “it is difficult to believe that the vendee would have parted with so much money without the consent of her husband.”
In second appeal the plaintiff for the first time challenged the finding of law of the trying Court and contended that as the sale had been held to be a genuine transaction she as vendee was entitled to possession and the Court should not have passed a conditional decree. She failed and has appealed under the Letters Patent.
The question argued before us is whether there is or is not an equity in favour of a vendor which justifies a Court in refusing to decree unconditional possession to a vendee when the purchase money has not been paid. We have been referred to a number of cases on the point. The earliest is in Umedmal Motiram v. Davu bin Dhondiba, where it was-held that a vendor of immoveable property had a lien for unpaid purchase money and that the purchaser was not entitled to obtain possession until he had paid off the vendor's, charge. That decision was before the Transfer of Property Act, and it is indisputable that at that time Courts in India could and did give effect to the equitable doctrines of the English Courts of Chancery. But an equitable lien never justified the retaining of possession. What was meant by an equitable lien was no more than a charge on the property sold which commences only when the possession is parted with to the purchaser (see Snell, 10th Ed., page 142 and Strahan Ed. 3, pages 351-356). “It is a right in equity to have a claim satisfied out of the property of another. It does not transfer any title at law or in equity.” With respect, then, I find it difficult to understand the justification for the final order that the vendor was entitled to possession as if he had a lien such as was given by the common law to the vendor of chattels. I cannot find that the Court of Chancery ever gave such a right to a vendor of land after a conveyance had been executed. On the contrary that Court never interfered directly with legal titles or the rights of owners of property. Equity followed the law; but as a Court of conscience the Chancery Court treated a purchaser who had not paid the price as a trustee, and gave merely equitable reliefs to the seller. In any case the decision is not now binding since the English equitable lien has now been embodied in the Transfer of Property Act [(section 55, sub-clause (4)(b)].
This case, then, does not help the defendant. The next case on which the learned advocate relies is in Shib Lal v. Bhagwan Das, which contains a dictum of Mahmood, J. that an equity may exist in favour of a seller, and this dictum has been followed by the Allahabad Court in Baijnath Singh v. Paltu. The learned Judge (Mahmood, J.) amplified this dictum by the further remark (p. 252):—
“The ruling in Goor Pershad v. Nunda Singh, so far as it declares that a decree for possession in favour of a vendee who has paid only a portion of the purchase-money cannot be subjected to a condition of payment of balance of the purchase-money, is … scarcely consistent with the procedure and rules of the Courts of equity and the rulings which I have cited.”
But the learned Judge did not indicate what were the rules of the Courts of equity which he had in mind; and, for the reasons which I have already stated, I am respectfully of opinion that the only equity which was recognized by the Chancery Court in favour of an unpaid vendor was the charge, misnamed a lien, which, as far as I can discover, was nothing but a charge such as has been given by section 55 of the Transfer of Property Act. In any case I agree with the decision of the Madras High Court in Velayutha Chetty v. Govindasawmi Naiken, that it is not open to the Courts of this country to introduce and enforce equities modifying the provisions of the statute law. The remarks of their Lordships of the Privy Council in the recent case of Ariff v. Jadunath Majumdar are explicit on the point.
It is said that this Court has adopted the Allahabad view, but I can find no ruling of our own High Court on the point. Two cases have been cited, Sagaji v. Namdev and Kevaldas v. Nagindas. But the former is rather against the defendants than for them, and I can find nothing in the latter to help them. The head-note is to the effect that the fact that part of the consideration for a sale has not been paid does not make it void and that all that the vendor is entitled to is a lien on the property sold. This is admitted. The cases of Umedmal Motiram v. Davu bin Dhondiba and Baijnath Singh v. Paltu are cited as authorities for this proposition, but the Court did not touch on the question now before us.
The question of real importance in this appeal is whether we must leave the defendants to file a suit to enforce their charge, or can give them appropriate relief in this suit.
In a similar case (Nilmadhab Parhi v. Hara Proshad Parhi a bench of the Calcutta High Court have adopted the Allahabad rule on the score of convenience so as to avoid multiplicity of suits; and, though I cannot agree to the adoption of that rule, I am willing to agree to any course which may save poor litigants, such as the parties in this suit, from unnecessary litigation, so long as we do not deny statutory rights. This is desirable when defendants are not to be blamed for laches. The present defendants were not the parties to the sale. Their father who knew the facts is dead, and it cannot be presumed that their defence was dishonest. This being so, the course which we propose to take is to give them a declaration, with leave to apply for sale, on their paying the proper court-fees. Strictly speaking, this is not justified by the Code. They should file a separate suit. But, as Mr. Justice Baker points out, the questions in dispute have all been decided in this suit and the filing of a separate plaint and the starting of a fresh litigation would cause unnecessary trouble and expense to both parties. I agree, then, that we are justified in acting on the fiction that they have filed a suit which has been consolidated with the present suit. The relaxation of a rule of procedure is on a different footing to the course adopted by the Allahabad High Court of creating an equitable right in derogation of the statute law.
Decree modified.
J.G.R