Kasim Moideen Rowther vs Annamalai Thevan

The question upon this petition is whether the decree of the Small Cause Court against the 1st defendant is right. He sold certain land to one

Sheik Mahomad by a vernacular deed of sale. Exhibit-A (dated the 20th August 1900) which recites, '' save the hypothecation lien which I have

already created in favour of another person, there is no kind of incumbrance on this property. I myself shall discharge the said hypothecation lien

and the other in-cumbrances, if any, which may crop up. In default, I shall refund the aforesaid purchase-money received by me and profit thereon

as well as the damages you may sustain in respect of the property."" It is upon a breach of the covenant to discharge the hypothecation mentioned

above that the Subordinate Judge bases the liability of the 1st defendant to the plaintiff who purchased the land from Sheik Mahomad''s

representatives in 1905 by a deed of sale marked as Exhibit-B in the case. It appears that the hypothecation debt was not paid and under a decree

obtained by the creditor sometime after the purchase of the plaintiff, the property was sold. Hence the plaintiff claims to recover the purchase-

money he paid for the property not only from his vendors who are impleaded as defendants Nos. 2 to 5 in the suit but from the 1st defendant from

whom Sheik Mahomad had bought the land under Exhibit-A.

The Subordinate Judge held that 1st defendant was liable because he had agreed to discharge the mortgage and this agreement being a covenant

running with the land, the plaintiff was entitled to the benefit of it: Now, how far this Court would be justified in applying the English doctrine

relating to covenants running with the land to vernacular deeds which are not in the form which has been in vague among English conveyances is a

question of some nicety and difficulty which we would not like to determine without a fuller argument at the bar. This case, however, can be

disposed of on a much simpler ground The plaintiff having regard to the recital in Exhibit-B must be held to have bought the land with notice of the

covenant in Exhibit-A by the 1st defendant to pay the mortgage-debt and the plaintiff obtained from his vendors a covenant against in-cumbrances

in these words. ""We solemnly declare that there is no incumbrance whatever on the said land such as prior usufructuary mortgage or hypothecation

etc"" The Subordinate Judge says that the plaintiff was under the impression that the mortgage specified in Exhibit-A had been discharged although,

as a matter of fact, it was not. Then it comes to this, that the plaintiff bought the property either upon a misrepresentation made by his vendors, in

which case he can certainly hold them liable for a breach of the covenant, or under a mistake of fact, induced, we do not know how. Therefore,

even supposing the agreement to discharge the mortgage mentioned in Exhibit-A can be said to be a covenant which would run with land, still the

plaintiff cannot avail himself of it as instead of relying on that covenant he preferred to rely on the covenant of his vendors against incumbrances. He

in fact waived the benefit of the 1st defendant''s covenant and if he did so under a wrong impression produced by misrepresentation of his vendors

or otherwise, he cannot certainly hold the 1st defendant responsible for it.

But we are further of opinion that the covenant in Exhibit-A is of a collateral nature and was not intended to be annexed to the land. It provides

for payment of the specified debt by the seller and that in default of payment, the seller is to re-fund the purchase-money with profit and, any

damages that might have been suffered by the buyer.

What it means is that the transaction will beset aside and each party will be restored to his original position. If, therefore. the 1st defendant was

to get back the land on his default to pay the debt charged on it, we think, it cannot be said that the covenant to discharge the debt was annexed to

the land.

The decree of the Subordinate Judge against the 1st defendant will be set aside and the suit of the plaintiff so far as the 1st defendant is

concerned dismissed with costs throughout.