Muthu Chetty vs Sinna Velliam Chetty alias Sinna Karuppan Chetty

In this appeal the 1st defendant is the appellant. The plaintiff sued to recover possession of a tope half of which was sold to him by the 1st

defendant with the profits thereof from the 4th July 1903, the date of the conveyance, Exhibit C. The plaintiff''s case is that as the defendant failed

to execute a conveyance according to the agreement, Exhibit A, dated the 28th April 1903, within the time fixed, the plaintiff demanded

performance of the agreement, and after some negotiations between the parties it was agreed that the plain tiff should pay the purchase money, Rs.

2,600, before the Registrar of Assurances at the time of registration of the conveyance after the defendant made an endorsement of discharge on a

hundi for the amount which the plaintiff had previously executed in the defendant''s favour and deposited with one Muthia Chetti. The plaintiff

alleges that as the defendant refused to register the deed he applied for compulsory registration of Exhibit C, which had been previously executed

by the defendant and handed over to the plaintiff. Before the Registrar the execution of Exhibit C was admitted by the defendant, but he stated that

the sale could not be completed as the plaintiff had failed to pay the purchase money. The defendant contended in this suit that the understanding

between the parties was that the property should not pass to the plaintiff and Exhibit C should not have any legal operation until the plaintiff paid

the purchase money which he was bound to do at the Registration office before the registration of Exhibit C. He repudiated all obligation under

Exhibit C, and if he was held bound by it, he claimed payment of not only the sum of Rs. 2,600, the amount of the purchase money, but also

interest on it at 12 per cent; at the same time he disclaimed any liability for the payment to the plaintiff of the profits of the land until the payment of

the purchase money.

The lower court found that the defendant was not to blame in the matter of the non-payment of the purchase money and that the plaintiff, if he

was entitled to have payment endorsed on the hundi, ought to have had it produced at the Registrar''s office. It therefore refused to award to the

plaintiff the profits claimed. With regard to the defendant''s claim for interest the Subordinate Judge held that he was not entitled to it, as he

remained in possession of the land and got the income accruing therefrom.

It is contended before us by the appellant that he is entitled to interest from the date of Exhibit C when, according to him, the ownership of the

property vested in him. The respondent contended before us that according to the agreement between the parties the ownership had not passed to

the plaintiff as he failed to pay the purchase money. We do not consider it necessary to go into this question as we agree with the learned vakil for

the respondent that the appellant is not entitled to interest in this case. For the same reason we do not deal with the contention that the plaintiff is

entitled to an unconditional decree for possession and the court was not justified in making its decree is the plaintiff''s favour conditional on his

paying the purchase money to the defendant; but we may point out that the case of Velayutha Chetty v. Govindasawmi Naicken (1910) M.W.N.

p. 637, relied on in support of this position, appears to be in conflict with Subramania Aiyar v. Poovan ILR (1902) M. 28, which does not seem to

have been brought to the notice of the learned judges who decided Velayutha Chetty v. Govindasamy Naicken (1910) M.W.N. p. 637.

The claim for interest is based by the learned pleader for the appellant on Section 55, Clause 4(b), of the Transfer of Property Act. That clause,

in our opinion, does not give the vendor an absolute right to interest on the purchase money irrespective of the equities and circumstances of each

case. The object of the clause is to give the vendor a lien on the property for unpaid purchase money and it declares that the lien will enure for the

interest as well as for the principal of the purchase money, assuming that interest is payable. It does not enact that the vendor is entitled to interest

in every case.

The only case relied on by the appellant, Leggatt v. Metropolitan Railway Co. (1870) L.R. 5 Ch. App. Cas 716, does not support his

contention. In that case, the agreement between the parties expressly provided for payment of interest by the vendee and of an occupation rent by

the vendor till delivery of possession which was to take place on a certain day. The vendor was obliged to remain in possession against his will

after the time fixed for delivery and he had to sue for specific performance. The question raised was whether the vendee was entitled to occupation

rent till delivery of possession and no question was raised as to the vendor''s right to interest on the purchase money, which was conceded, the

parties having expressly provided for it. Sir William James L.J. held that the vendee was not entitled to occupation rent as the vendor continued in

occupation of the premises ""under a pressure arising from the purchaser''s default."" As observed in Fry on Specific Performance, p. 591, 4th

Edition, it is obviously inequitable, in the absence of express and distinct stipulation, that either party to the contract should at one and the same

time enjoy the benefits flowing from possession of the property and those flowing from possession of the purchase-money. The estate and

purchase money are things mutually exclusive. ""You cannot,"" said Knight Bruce V.C., in a case arising out of the sale of some slob lands in

Chichester harbour ""have both money and mud."" It is not alleged that there was any such express stipulation in this case. On the other band, we

think that the parties must have intended that the payment of purchase money and the delivery of possession of the property should be carried out

contemporaneously and that interest on the money would not be payable so long as the defendant was in possession of the land.

We confirm the lower court''s decision and dismiss the appeal with costs.