Polavarapu Venkataswami vs Nalluri Venkayya

Kbishnaswami Nayudu, J.—The defendant is the appellant and the appeal is against the decree of the learned Subordinate Judge of Bapatla

in O. S. No. 30 of 1947, the decree being for damages for breach of covenant of title and quiet possession. 2 Acres 84 cents of dry lands

originally belonged to one Jalambhotlu, who leased it to the plaintiff''s father for a period of 25 years under Ex. A-1 dated 4-10-1921 on an annual

rental of Rs. 76 subject to a payment of quit rent out of the maktha amounting to Rs. 2-6-6. The property owned by Jalambhotlu was of the extent

of 3 acres and odd. After the death of Jalambhotlu his widow Sitaramamma, who acquired absolute rights to the property under a will left by her

husband, conveyed 2 acres 84 cents out of the 3 acres and odd owned by Jalambhotlu to the defendant under a sale deed, Ex. B-2 dated 24-6-

1032 for a consideration of Rs. 1250. The property was already subject to an attachment before the judgment in O. S. No. 170 of 1932, a suit

instituted by one Subbamma against Sitaramamma, for recovery of a sum of Rs. 500. Subsequently a decree was also passed in the suit. On 15-9-

1933 the defendant conveyed 2 acres and 84 cents of lands to the plaintiff under the original of Ex. B-3 for Rs. 1200. Out of the consideration, a

sum of Rs. 500 was received by the defendant for the purpose of discharging the decree debt in O. S. No. 170 of 1932, in which there was

already an attachment pending against the property. But after the sale deed, obviously, the defendant having received the amount of Rs. 500 did

not pay and satisfy the decree in O. S. No. 170 of 1932 and further proceedings in execution of the decree appear to have been taken and two

acres and 84 cents of lands were sold on 9-11-1936 and symbolical possession was taken in favour of the auction-purchaser. The defendant

instead of paying and settling the decree in O. S. No. 170 of 1932 appears to have launched himself in litigation by filing a claim petition and after

dismissal of the claim petition by instituting a claim suit O. S. No. 508 of 1933 in the District Munsif''s Court, Ongole, which was dismissed on 28-

11-1935. He filed an appeal against that decision, A. S. No. 4 of 1936, which likewise was dismissed on 16-8-1937. Not content with this, he

appears to have filed S. A. No. 142 of 1938 in this Court, which received a similar fate of dismissal on 11-2-1941. It may be mentioned that in

not one of these proceedings started by the defendant, the plaintiff was a party.

The auction-purchaser by the strength of his purchase of the property in court auction instituted O. S. No. 112 of 1943 in the District Munsif''s

Court, Ongole, against the plaintiff for recovery of the makthas or the lease amount due upto 1943, i.e., a total sum of Rs. 612-12-0. The plaintiff

resisted the suit on the strength of his title and possession by the purchase under the original of Ex. B-3, but the suit Vas decreed in favour of the

auction-purchaser on 30-9-1943. The plaintiff appealed in A. S. No. 31 of 1944 on the file of the Subordinate Court of Bapatla and the appeal

was dismissed on 16-1-1945. The period of 25 years lease also expired on 4-10-1946 and the auction-purchaser took actual possession on 22-

3-1947. The present suit for breach of covenant of title and quiet possession was instituted on 11-4-1947. The plaintiff claimed a sum of Rs. 9500

as damages for the breach. The suit was resisted by the defendant in his written statement. He denied that there was any covenant of title and on

the other hand pleaded that there was an agreement not to claim compensation or damages in regard to warranties of title, possession and

enjoyment except In regard to any alienations made by himself of the suit property and also raised a plea of limitation besides questioning the

quantum of damages claimed by the plaintiff. The lower Court held in favour of the plaintiff and decreed the suit for Rs. 9500 and hence this

appeal.

There contentions were urged on behalf of the appellant. All the three contentions that were raised in the lower Court were urged before us and

as regards the first of the contentions that there was no covenant of title and quiet possession and enjoyment, there was not much argument by the

Counsel on behalf of the appellant, as undoubtedly there could not be any doubt that in this case even apart from any specific covenant as to title in

the document, by virtue of Section 55, Clause (2), Transfer of Property Act, the defendant must be deemed to have contracted with the plaintiff,

that the interest, which he professed to transfer under the sale deed, Ex. B-3, to the plaintiff subsisted and that he had power to transfer the same.

There is always an implied covenant as to title and quiet possession and enjoyment in all sales of immovable properties, unless it is shown that there

is an express contract to the contrary by the terms of the document, such covenant for title would subsist and would enure to the benefit of the

purchaser, if there should be a breach of that covenant, at any subsequent stage. Very properly the learned Counsel did not press his argument on

this issue and we have no doubt in holding that there was such a covenant. An attempt was made in the lower Court to cull out from the terms of

Ex. B-3 a contract to the contrary, which very properly has been rejected by the lower Court as there could not be any means of any contract to

the contrary which could be ascertained from the terms of Ex. B-3.

The only two other questions that are required to be determined in this appeal are whether the suit is barred by limitation and whether the

damages awarded are excessive: On the first of these questions as to limitation, it is contended that the starting point of limitation must be taken to

be 9-11-1935, the date of sale held in execution of the decree in O.S. NO. 170 of 1932, & in any event 11-3-1937, the date when the auction-

purchaser purports to have obtained symbolical delivery of the property. In our view, none of these dates should be relied on to fix the cause of

action. As whatever might have been the declarations made by the Court as to title relating to this property, such a declaration was made In the

absence of the plaintiff and in the proceedings to which the plaintiff was not a party and it could not be expected that in so far as he was concerned

the title has been decided as against him. Equally so. as regards possession, since what was delivered was only symbolical possession as nothing

more could be given to the auction-purchaser. And it is not in evidence that the plaintiff was aware of this delivery of possession symbolically and

in the absence of such evidence, it is not safe to hold that the cause of action had arisen on the date of the order or on the date of the effecting of

this symbolical delivery to the auction-purchaser, which was on 11-3-1937.

It is, therefore, for consideration as to what will be the relevant date on which the plaintiff''s cause of action could be said to have arisen. For the

first time in 1943 by the institution of O. S. No. 112 of 1943 by the auction-qurchaser for the recovery of the rent on the strength of his purchase

at the court auction, the plaintiff''s title to the property was in issue and he contested the suit on the strength of his own title and a decision was

given against him by the first Court on 30-94943. The matter was taken up in appeal and finally concluded on 16-1-1945, when it could

reasonably be said that the matter has been conclusively decided against the plaintiff in so far as the title to the property was concerned. Article

Limitation Act which is applicable to a case '' of this ""kind provides for a period of six years from the date of the breach! of the covenant, the

covenant here being not only the covenant for title but the covenant for possession also. If the cause of action is within six years from any of these

two dates, the plaintiff would perfectly be in time. We are inclined to hold that until the determination of the appeal on 16-1-1945, it could not

reasonably be held that the title of the plaintiff has been conclusively determined against him and found in favour of the auction-purchaser, in view

of the plaintiff having filed an appeal questioning the decision of the first Court. In these proceedings it must be stated that the plaintiff was in fact

fighting out the case of the defendant and trying his best to see if he could have his title established against the auction-purchaser in O. S. No. 170

of 1932, though the defendant had failed initially in the claim petition and subsequently in the proceedings which he instituted and conducted. Our

attention is however invited to a decision in --''Juscum Boid v. Pirthichand Lal'', AIR 1918 PC 151(A), where the following observations of the

Privy Council are relied upon in support of the contention that the cause of action must be .deemed to have arisen on the date of the disposal of''

the suit in the first Court. Sir Lawrence Jonkins delivering the Judgment observes at p. 153 as follows :

Their Lordships feel no doubt that as between these two decrees (a decree of the first Court and a decree of the appellate Court), this is the

correct view, for whatever may be the theory under other systems of law, under the Indian Law and procedure an original decree is not suspended

by presentation of an appeal nor is its operation interrupted where the decree on appeal is one of dismissal.

Sir Lawrence Jenkiws proceeding observed :

There may be circumstances in which a failure to get or retain possession may justly be regarded as the time from which the limitation period

should run, but that is not the case here.

So, either the date of the first decree or the date when the plaintiff failed to retain possession would be relevant for the purpose of ascertainment as

to the relevant dates of cause of action, under Article 116, Limitation Act. In either case, the present suit is in time, the suit having been instituted

on 11-4-1947 within six years from 30-9-1943 or from 22-3-1947, which was the date when the auction-purchaser actually took vacant

possession. The suit is well within the time provided by law.

The question as to whether the damages are excessive would to a great extent depend upon the determination of the question as to what should

be the relevant date on which the damages have to be ascertained, that is, as to the date on which the value of the lands has to be fixed. Mr.

Umamaheswaram, the learned counsel for the appellant contends that the date of delivery of possession to the auction-purchaser 11-3-1937, that

is when symbolical delivery was made, should be the date on which the market-value of the lands has to be fixed. In the view which we have

already taken, that would not be the proper date to be relied upon for the purpose of limitation. We are unable to agree that that date should

betaken for fixing the market-value of the property. . The only other alternative which the counsel for the appellant suggests as the relevant date is

30-9-1943 when the decree for the maktha was passed in the suit instituted by the auction-purchaser. As regards this question, the date for the

purpose of limitation, which ordinarily will be the date of breach of the covenant of title, could not be treated as the date also for assessing the

damages, that is for fixing the market-value of the lands in respect of which the breach has been occurred. The principle of Section 73, Contract

Act is made applicable to breaches of covenant of title even as.1 regards immovable properties, and it is. sought to be contended placing reliance

on Section 73, Contract Act that the quantum of damages must be ascertained on the date of the breach as in a contract for sale of goods, where

there is a breach of contract, the difference between the contract price and the market price on the date of the breach would be the ordinary mode

of assessing the damages. But in applying the principle to breach of covenant of title relating to immovable properties'', it is necessary to consider

whether Courts are prevented from holding that the relevant date would be the date on which he makes the claim for damages, that is the date of

the suit. All that Section 73 provides is that when a contract has been broken, the party who suffers by such breach is entitled to receive, from the

party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things

from such breach. Applying the principle one has to see what is it that the plaintiff has lost by the failure on the part of the defendant to implement

the covenant for title regarding the sale of the property to the plaintiff. What the plaintiff has lost is the property which he is entitled to get back, but

which he could not secure for the reason the defendant is not in a position to deliver back possession of the property or to show good title to it. It

is therefore the property, that the plaintiff has lost and which he must get back and when asked for it he must get it or its value in terms of money,

and when therefore a suit is instituted'' for recovery of damages, the damages must be ascertained on the date of the suit and not on any other date

prior to it. It is always open in cases of breaches of covenant of title or quiet possession, for the plaintiff to have two causes of action, to recover

the consideration paid together with interest on the basis of failure of consideration or to recover damages on the breach of covenant by reason of

the indemnity implied in the covenant of title. When the plaintiff has recourse to the latter i.e., claiming damages for the loss of property, he must be

given the property or its value on the date when ho makes ths demand by instituting a suit. We consider that to be the reasonable and suitable view

to be taken in cases of this kind relating to damages arising out of the breach of covenant of title and our view finds support in the decisions

reported in -- Punjab Sugar Mills, Co., Ltd. Vs. Lachhman Prasad and Others, , and in -- Dhadha Sahib Vs. Mahomed Sultan Sahib, . The

learned counsel, however, relied on the decisions reported in -- M.R. Alagarappa Reddiar Vs. K. Alagirisami Naick, and in -- Muthu Goundan

and Others Vs. Mottayan alias Kolanda Goundan, , but the question there, did not arise in the manner in which it has been raised in the present

case. In those cases the contention was as to whether the damages were to be ascertained on the date of the sale or on the date of the breach and

not on the date of the dispossession or on the date of the suit as is the case before us. We have, therefore, to find out what the market-value of this

property would be on 11-1-1947, the date of the suit.

The evidence as regards the value is discussed by the learned Subordinate Judge and he has arrived at the figure of Rs. 9500 mainly basing his

conclusion oh two documents of sale, Exs. A-10 and A-11, both dated 12-10-1946, of lands of the same quality and which are situated adjacent

to the suit lands. Ex. A-10 is a sale of about 11/2 acres of land to one P. Rangiah for Rs. 7000, Rs. 4000 having been paid by way of cash and

Rs. 3000 by way of promissory note executed in favour of the vendor. Ex. A-11 is in favour of P. W. 2 of an extent of 97 cents for a price of Rs.

4000. On the basis of these two sale deeds there can be no doubt that the sum of Rs. 9500 is the reasonable figure that could be fixed as the value

Of the property and as claimed by the plaintiff. It is pointed out by Mr. Umamaheswaram, that in or about 1940 or 1941 from the evidence of the

witnesses P. Ws. 3 and 4 it is evident that an acre was sold for Rs. 400 and for Rs. 1000. No sale deeds are produced in respect of these

transactions; but accepting the evidence of these witnesses that in 19-10 or 1941 the prices of these properties ranged from. Rs. 400 to Rs. 1000

per acre, that would not be sufficient to hold that the prices continued at the same rate in 1947 when the suit was instituted. The evidentiary value

of Exs. A-10 and A-11 cannot be underestimated. It is suggested however that in Ex. A-10, part of the consideration was paid by way of

promissory note, which is not of any consequence, since it is ordinarily common in land transactions that part of the price is paid in cash and the

balance Of the price by way of promissory note. It is also painted that P. Ws. 1 and 2 are near relations of the plaintiff and it is likely that these two

documents might have been brought into existence to support the claim of the plaintiff in this suit. But the fact remains that a sum pi Rs. 4009 in

cash has been paid by the vendor in Ex. A-11 before the Sub-Registrar of Assurances, which it is very difficult for the appellant to get over. That

these dry lands have risen phenomenally in value is evident from the fact that they have been used for raising tobacco, which is a paying commercial

crop, in this part of the State and this is also evident from the fact that though the same lands were leased to the plain tiff''s father for a sum of Rs.

76 per annum, after the auction-purchaser secured possession he appears to have leased it for an amount of Rs. 300. Mr. Umamaheswaram relied

on this prior evidence on the side of the plaintiff and contended that the proper mode of ascertainment of the market-value in this case should be by

capitalising the annual rental which the property was fetching. Capitalising the annual rental value of Rs. 300 at 20 times, he submitted that a sum of

Rs. 6000 would be the reasonable market-value. We would have been inclined to take the annual rental value as the basis and fix the market-

value, but for the fact that there is the other evidence in this case which gives us a clear indication of the market-value of the lands in the locality on

the relevant date in about 1946 or 1947. Further it must be stated that there is no evidence on the side of the defendant to disprove that the value

of the lands has not increased as has been shown in this case by the evidence on behalf of the plaintiff and the documents relied by him in support

of his contentions. We do not therefore feel justified, in disagreeing with the valuation fixed by the lower Court at Rs. 9500, which appears to be

the reasonable market-value on the date of the suit.

In the result the appeal is dismissed with costs.