Balusu Veeraraghavalu and Others vs Boppna Manikyam and Others

Seshagiri Aiyar, J.—The facts of the case are practically undisputed. The father-in-law of the 1st defendant purchased from a Hindu widow

certain properties. He gave them in exchange for some other properties to the brother of the 1st plaintiff. A reversioner of the Hindu widow sued

to set aside the original alienation. After some contest, the plaintiffs entered into a compromise with him by which they retained a portion of the

properties exchanged on payment of a further consideration to the reversioner. There is no question of want of honesty or of diligence on the part

of the plaintiffs in entering into this compromise. The Subordinate Judge has found that point in favour of the plaintiffs.

The suit is brought in the alternative either for the restoration of the lands which the 1st plaintiff''s brother gave in exchange or for compensation

for breach of warranty of title. In this second appeal we are only concerned with the second relief. The exchange is evidenced by an unregistered

document of the 25th September 1880, two years before the Transfer of Property Act was passed. No question of its admissibility in evidence has

been argued. The only point for consideration is whether there was an implied warranty of title at the time of the exchange.

It is clear that after the Transfer of Property Act, there would be a warranty of title. It is also clear that up to the passing of the Real Property

Act of 1845 (8 & 9 Vic. Ch. 106), there was an implied warranty of title in England in regard to exchanges. As pointed out in Stephen''s

Commentaries on the Laws of England, Vol. 1, page 410, before the Statute of Frauds, no writing was necessary to evidence an exchange. By the

common law of England, all that was necessary to effect an exchange was that there should be mutual taking of possession. In Coke on Littleton,

Vol. 1, Sections 64 and 65, the common law of England as to Exchange is thus stated:--""So alwaies it behoveth that in exchange, the estates of

both parties be equall viz., if the one has a fee simple in the one land, that the other shall have like estate in the other land ; and if the one hath fee

taile in the one land, the other ought to have the like estate in the other land, &c. and so of other estates."" And this statement as to equality is thus

commented upon. Equality in lands is threefold, viz., first, equality in value; secondly, equality in quantity of estate given and taken ; thirdly equality

in quality or manner of the estate given and taken. As a corrollary from this statement of law it was held in a very early case known as Bustard''s

case (1602) 4 Co. 121(a) that title was warranted by the parties to the exchange. The report says, "" and after many arguments at the bar and

bench in divers several terras, it was adjudged for the plaintiff; and in this case four points were resolved per totam curiam : 1. That in every

exchange lawfully made, this word excambium implies itself tacite a condition and also a warranty, the one to give reentry and the other voucher

and recompence and all in respect of reciprocal consideration, the one land being given in exchange for the other: but it is special warranty, for

upon the voucher, by force of it, he shall not recover other land in value, but that only which was by him given in exchange ; for inasmuch as the

mutual consideration is the cause of the warranty, it shall therefore extend only to land reciprocally given and not to other land ; and this warranty

runs only in privity, for none shall vouch by force of it but the parties to the exchange, or the heirs and no assignee ; but the assignee shall rebut by

force of it, although the exchange was without deed."" According to this statement of the law, there can be compensation for breach of warranty, or

re-entry on the land exchanged and the right to these reliefs can be exercised only by the parties or their heirs ; but it cannot be assigned or

devised, Attorney General v. Vigor and Ors. (1803) 8 Ves 256. It may be necessary to mention that the Statute of Frauds (29 Charles II Chapter

IV, Section 1) considered writing necessary to evidence an exchange. None the less, it was held in the Equity Courts that if the exchange was

completed by possession, a good title passed. Sec 24 Halsbury 295 (cases quoted at foot-note Q). By Section 3 of the Real Property Act of

1845, a deed was required to effect a conveyance, a partition or an exchange. The same Act declared that there was no warranty of title on an

exchange. This Act applied only to England and not to Ireland or Scotland. This summary of the state of law in England necessitates the

consideration whether before the Transfer of Property Act was passed in this country, the common law of England was in force or the Statute law

embodied in the Act of 1845.

When the Mayor''s Courts were established in 1726, the Charter of George I expressly declared that ""all the common and statute law at the

time extant in England shall be introduced into the Indian presidencies."" Thereafter, no English Statute law was to be applied in India unless it was

specially extended to this country. Morley''s Digest, Vol. I, Page XXIII. It is open to argument whether the moffusil courts had the same authority

to administer the English Common and Statute Law under the Charter of George 1. But I see no reason to think that the moffusil courts were not

administering the same principles of equity and good conscience which guided the Mayor''s courts. Cowell in his ""History and Constitution of the

Courts and Legislative authorities in India,"" points out what laws applied to India up to 1834 : ""First, there was the whole body of English Statute

Law existing in 1726 so far as it was applicable, which was introduced by the Charter of George I and which applied, at least, in the Presidency

Towns. Secondly, all English Acts subsequent to that date which are expressly extended to any part of India. Thirdly, the Regulations of the

Governor-General''s Council, which commence with the Revised Code of 1793, containing forty-eight regulations, all passed on the same day

(which embraced the results of twelve years'' antecedent legislation) and were continued down to the year 1834 "".

It is therefore clear that the highly technical enactment of 1845 which required the execution of a deed to evidence an exchange was not

extended to India. The Act of 1781 which was intended to curtail the powers of the English Judges and which looked with disfavour on the

introduction of English Statute Law into this country laid down that as far as practicable, the courts should administer Indian law to Indians. So far

as I am aware there is nothing in the Hindu Law which militates against a warranty being implied as between the parties to a contract of exchange.

From the fact that in the Transfer of Property Act of 1882, the principle of implied warranty in sales and exchanges was recognised, it may be

inferred that the legislature intended to preserve to the parties the English common law right as to warranty as that was in consonance with

equitable principles and not repugnant to the laws of this country. English deeds and Conveyances are drawn up by skilled draftsmen and

consequently the parties may be held to be dealing with each other at arms'' length. In this country, documents are drawn up by persons who have

only the great wisdom of the proverbial schoolmaster. More recently the drafting has got into the hands of quacks who have neither common sense

nor a knowledge of the law. Under these circumstances, the Indian Legislature thought it advisable to introduce expressly the principle of implied

warranty in sales and exchanges. I have no reason to think that between 1845 and 1882, the courts in this country imported the highly artificial rule

of the English Real Property Act. My conclusion is that when the parties exchanged their properties in 1880, they implied covenanted for good

title.

As against this position, Mr. Ramadoss, who (as well as Mr, Prakasam) argued this case dispassionately and mainly with the object of assisting

the court in solving a very difficult question of law, contended that the warranty of title under the common law was only to ensure reentry and not to

obtain compensation. The decision in Bustard''s case (1602) 4 Co. 121 (a) is directly against this contention. The next contention was that an

implication of warranty is opposed to Section 92 of the Indian Evidence Act. It is enough to say in answer to this argument that warranty is not a

term of the contract or grant. Nor is the decision of the Bombay High Court Shivram v. Bal ILR (1902) Bom. 519 denying a warranty as to sales

decisive of the question. The last argument was rested upon the well-known case of Soper v. Arnold (1889) L.R. 14 A.C. 429. It has not been

established that the 1st plaintiff''s brother was aware of any defect of title in the property he got. It is true that a widow has only a limited power of

alienation. But where there is nothing to indicate on the face of the document or on proper enquiries that the widow was not exercising the power

which she had of disposing of the property for purposes binding on the estate, it cannot be contended that the principle of caveat emptor applies.

No attempt has been made in this case to prove that the plaintiff''s father wilfully shut his eyes to the defect in the title or neglected the opportunities

he had for making bonafide enquiries. I am therefore of opinion that the special contentions of Mr. Ramadoss have no force.

The Subordinate Judge has found that the plaintiff will be entitled to Rs. 875 as damages in case he is entitled to any. In reversal of the decree of

the Courts below a decree will be given for this amount with interest @ 6% per annum from the date of the plaint. Parties will pay and receive

proportionate costs throughout.

Bakewell, J.

The question in this case is whether any and what warranty of title should be implied upon an exchange of lands effected prior to the passing of

the Transfer of Property Act, 1882. Under the English common law, an exchange implied a condition for re-entry upon the land given in exchange

and also a warranty and it was not material that the party evicted had notice of the title paramount, Bustard''s Case (1602) 4 Co. 121 (a) and this

rule has been followed in Section 119 of the Transfer of Property Act, 1882. Under Clause 21 of the Letters Patent this Court must apply the law

or equity or rule of good conscience which the Court of first instance ought to have applied and I am prepared to accept the rule laid down in that

section as one of equity which ought to have been applied to this case.

The argument however of the learned Counsel for the appellant apparently was that the English Law as to the transfer of land had been applied

to the Northern Circars and I think that he failed to show any authority for this proposition. The Charters of the Mayor''s Court of Madraspatnam

were only intended to apply to the administration of justice in the Presidency Town and the Court established apparently resembled a Consular

Court. The Charters which abolished the Mayor''s Court established only local courts in the Presidency Town (Shaw''s Charters of the Madras

High Court). 1 agree with the order proposed by my learned brother.