Purna Chandra Mukherjee vs Corporation of Calcutta

G.K. Mitter, J.—This is a suit for recovery of Rs. 8,200 with interest and costs in the circumstances mentioned below:

In July, 1949 the Corporation of Calcutta advertised for sale several plots of land on Paramhangsa Deb Road in Ward No. 24. At the auction which was held on August 1949 the Plaintiff was declared the highest bidder in respect of one of the plots being plot No. 10, his bid being Rs. 6,100 per cottah. In terms of the conditions of sale the Plaintiff had to deposit Rs. 8,200, i.e., 25 per cent, of the purchase money. Within a few days thereafter, however, the Plaintiff wanted to resile from the transaction, and wrote to the Defendant Corporation on August 29, 1949 that he had discovered that "the cream of the "plot was tank filled and this constituted latent defect of the "property which it was the duty of the Corporation to disclose". The Plaintiff sought to rescind the contract on this ground and requested the Defendant Coloration to pay him back the sum of Rs. 8,200. Several letters following thereafter were placed before me during the opening of the case but were not relied on or proved during the trial. The Defendants are the Corporation of Calcutta and Aurelius David Khan who was the Administrative Officer of the Corporation of Calcutta appointed under the new Calcutta Municipal Act. The Defendants relied on the conditions of sale as giving the Plaintiff no right to rescind the contract and contended further that there was no material defect of the property as was sought to be made out by the Plaintiff.

The conditions of sale contained the following relevant clauses:

Auction sale of Corporation surplus lands:

Notice is hereby given for information of the public that the following plots of the Corporation surplus land will be sold to the highest bidders above the reserve price, at the public auction to be held by the Chief Executive Officer at the Central Municipal Office on Wednesday August 3, 1940 at 3 p.m. on the conditions noted below:

Public are invited to attend the auction and offer their bids. Plans of the lands, conditions of sale and other particulars may be seen in the office of the Chief Valuer and Surveyor on all working days during office hours. Description of lauds: Lots Nos. 8, 9 and 10 on Paramhangsa Deb Road in Ward Xo. 24 measuring about 5 cottahs 12 chittah, �!" cottnhs 10 Chittalcs and 5 cottahs 6 chittoh respectively.

Condition of sale:

(i) The bidding for each lot shall be at so much per cottah and the highest bid above the reserve price will be accepted, subject to the approval of the Administrative Officer.

(ii) The plots described above will be sold subject to the prior right of the respective previous owners to purchase the same provided they agree to pay forthwith the amounts of the highest bids for the respective plots that may be received at the auction.

(iii) An earnest deposit of 25 per cent, on the amount of the purchase money is to be made in cash, unless otherwise directed by the Chief Executive Officer, by the successful bidder.

immediately upon the lot being knocked down, and in default thereof, the premises is to be immediately put up and resold at the risk of the first purchasers.

(iv) The area stated in the notice is approximately correct. The area to be paid for will be ascertained by joint measurement after the auction sale.

(v) The title of the Corporation to the property sold shall be deemed to be accepted by the purchaser and he shall not, therefore, be entitled to make any requisition or objection respecting the same.

(vi) In the event of any mis-description, such mis-description shall not be held to vitiate or affect the sale in any way, it being understood that intending purchasers shall satisfy themselves on all points before bidding as no objections shall be entertained after the sale.

(vii) The successful bidder shall pay the balance of the purchase money (i.e., the value of the land minus the earnest deposit) within a month from the date of the Administrative Officer accepting the bid, failing which, the earnest deposit shall be forfeited and the land resold at the risk of the auction purchaser.

(viii) The Corporation will execute a deed of conveyance in the form which may be seen in the office of the Keeper of Records of the Corporation.

(ix) The Corporation enter into no other covenant than that they have done no act to encumber.

The Plaintiff''s complaints are to be found in paras. 2, 3, 4 and 6 of the plaint, the substance thereof being as follows:

(1) By the conditions of sale as well as by the plans of the said plots disclosed by the Corporation of Calcutta the said lot No. 10 on Paramhangsa Deb Road, was represented and/or suggested by the Defendant Corporation of Calcutta to be firm land suitable for building purposes.

(2) Alternatively, it was an implied condition of sale that the said lot was firm land suitable for building and not tank filled land.

(3) The Plaintiff was thereby induced to offer bids at the sale held on August 3, 1949 in the belief that the said representation and/or suggestion and/or implied condition was true.

(4) The Plaintiff for the first time discovered towards the end of August 1949 that the said representation and/or suggestion and/or implied condition was not true and that the major or substantial portion of the said lot was not firm land but was the site of a tank filled with garbage and cinder and a thin layer of earth and not suitable for building.

(5) The Corporation of Calcutta wrongfully omitted to disclose the said material defect in the said lot No. 10 and committed a breach of duty.

(6) The Plaintiff had no means of discovering the truth with regard to the said lot with ordinary diligence.

On the above complaints the Plaintiff based his cause of action as having arisen on March 7. 1950. There is a further statement that notice u/s 538 of the Calcutta Municipal Act was duly delivered as required by Sub-section (1) of the said section.

By its written statement the Corporation of Calcutta denied that it had made any representation or suggestion as to the nature or character of the said land in lot No. 10 of Paramhangsa Deb Road. save that, it was described in the notice of auction as surplus land. The Corporation denied that the land was represented to be firm land suitable for building purpose. It further denied that there was any implied condition as mentioned in the plaint. The case of the Corporation as made out in para, 6 of the written statement is that the major or substantial portion of the said plot comprising approximately about 2/3rd of its area consisted of land in which there never had existed any tank at any time. With regard to the rest of the said plot measuring about 1/3rd of its area and situated near its north east corner, the Corporation''s case is that it formed the corner or edge of a tank which had been filled up more than 18 years ago. that the portion of the tank comprised within the said plot was merely the shallow edge or corner of it and had at the date of the sale become as firm as ordinary solid land not materially differing in quality as regards stability from the rest of the said plot and that as such it was not necessary to indicate the existence of the site of the said ancient tank. The Corporation made a further definite case that the land was not filled with garbage and a thin layer of earth on top as made out in the plaint. In para. 9 it is stated that the land offered for sale was stated to be surplus land which the Corporation was selling under the powers and provisions contained in Chapter 33 of the Calcutta Municipal Act and the Plaintiff had express and/or implied notice that the land charged its condition and/or had been improved whilst it was in the hands of the Defendant Corporation and it was the Plaintiff''s duty to make enquiries and to ascertain the previous condition of the land. The Corporation further relied on clause G of the condition of sale and submitted that the mis-description, if any. did not entitle the Plaintiff to repudiate the contract or ask for refund of the deposit. It also contended that the suit was barred u/s 538 of the Calcutta Municipal Act, the cause of action of the Plaintiff having arisen, if at all, on August 3, 1949 when the deposit was made.

On the pleadings the following issues were settled:

(1) Was the major or substantial portion of lot No. 10 not firm land but was the site of a tank filled with garbage and cinder with only a thin upper layer of earth?

(2) If so, did it constitute a material defect in property?

(3) (a) Was the Corporation of Calcutta aware of such defect?

(b) Was it the duty of the Corporation of Calcutta to point out that defect to the Plaintiff?

(4) Can the Plaintiff avoid the contract by reason of such defect?

(5) Is the suit barred by limitation under the provisions of Section 538 of the Calcutta Municipal Act?

The relevant documents to be found in the brief of documents marked ex. E are as follows:

The first document is a receipt granted to the Plaintiff by the Corporation for Rs. 8,200 as earnest deposit on account of surplus land at Lot No. 10 on Paramhangsa Deb Road measuring 5 cottahs 6 clrittaks purchased by him at the auction held by the Chief Executive Officer on August 3. 1949 at Rs. 6,100 per cottah on the terms and conditions specifically mentioned in the notice of sale. This is followed by another receipt acknowledging payment of two annas by the Plaintiff on account of sale to him of a survey map No. T19(Sub)-U. Roy. The correspondence started on August 27, 1949 with the Plaintiff''s letter addressed to the Chief Valuer and Survey already mentioned. The Plaintiff there made the case that in the advertisement as well as in the conditions of sale the aforesaid lot was described as being not a tank filled land. He went on to add that believing in the representations made and relying bona fide on the declaration of the Corporation of Calcutta I offered the highest bid for the plot in question. It now transpires that the cream of the plot is tank filled and this fact which constitutes latent defect in the property known to the Corporation and which it was the duty of the Corporation to disclose was suppressed, I do not know whether wilfully or negligently. * * * * * * * in view of the discovery of the material defect as herein before set forth I hereby rescind the contract and request you to pay me back the sum of Rs. 8,200 within three days from date.

This was replied to by the Chief Valuer and Surveyor on September 7, 1949. The said officer stated. It is more than 18 years that the tank has been filled up. Only one corner of the tank affected the north-east corner of the site. It is now as good as solid land and that is why the tank-filled portion was not shown in the plan. There is no question of suppression of facts as alleged. You were free to make local enquiry before bidding.

* * * *

Under the circumstances the question of cancellation of the bid does not arise.

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I would draw your attention to Clause 6 of the condition of sale.

* * * * * * *

You have failed to attend the appointment for joint measurement on 1-9-49.

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Please note further that if you now resale from the sale the earnest deposit will be forfeited under clause VII of the conditions of sale.

The Plaintiff rejoined with his letter of September 19, 1949 to the effect that the defect had been deliberately suppressed and that the tank filled portion affected nearly the entire frontage of the land. The Plaintiff stated further that he had found out the defect in course of investigation of public records and that there was no question of joint measurement as he had already given notice of rescission of the contract. The Plaintiff also disputed the Defendant''s right to forfeit the earnest money. It is not necessary to deal with the letters which passed between the parties thereafter until we come to the letter of March 7, 1950 addressed by the Plaintiff''s solicitor to the Administrative Officer of the Corporation of Calcutta. There it was stated that the major portion of the plot covering the entire frontage on the roadside was the site of a tank filled with refuse, garbage and cinder and this fact constituted a serious latent defect in the property which it was the duty of the Corporation of Calcutta to disclose. Reference was made to other letters between the parties and to the interviews which had taken place and finally the solicitors called upon the Corporation to refund the sum of Rs. 8,200 in default whereby proceedings were threatened to be taken.

In his examination-in-chief the Plaintiff said that he had not. gone through all the conditions of sale because he relied on the Corporation and purchased the land on such reliance. He said that he was not allowed to examine the land but had come to know from the copy of Smart''s survey plan of Calcutta that the land was tank-filled. In answer to Q. 21 he said that nearly half of the land was tank filled. He learnt about this within 10 or 12 days after the auction of the land with the help of Smart''s survey plan. He said that he wanted to purchase the land for erecting a building and that he had consulted an engineer to find out whether a house could be built on the tank-filled portion and had been told that special treatment of the land would be required costing a large sum of money. The engineer referred to by the Plaintiff is Hiren Kumar Sarkar who has given evidence before me. The engineer too did not examine the land but based his opinion on Smart''s plan.

The Plaintiff said that he was shown the plan prepared by the Corporation of Calcutta which did not disclose the fact that a portion of lot No. 10 was tank-filled. In his cross-examination the witness said that he had bid for three plots of land and secured this lot No. 10. He said that he had noticed an advertisement in the Amrita Bazar Patrika regarding the auction of the land and selected this lot and bid for it. In answer to Q. 59 he said After looking into the Smart''s survey plan when my engineer informed me that it would not be proper for me to have a plot of land purchased then I sent this (meaning the letter of the 27th August) personally to the Corporation.

He said that having failed to secure a good plot of land he had purchased a property on Hindusthan Road and built a house there. In Q. 66 he was asked Apart from Smart''s survey plan showing that there was a tank formerly there you have no personal knowledge as to how or with what materials the tank waa filled up.

His answer was No, I have no personal knowledege but I have got information in respect of that from local people.

In answer to Q. 71 he said that he was not in a position to make any positive statements as to the character of the materials with which the tank was filled up. On being asked to describe what would be the defect in the building if the land was tank-filled his answer was that the land was unbalanced meaning thereby that there was chance of the building developing cracks and being damaged. It is agreed on both hands that a portion of the premises sold to the Plaintiff was tank-filled. According to the Defendant the portion shaded in blue pencil on Smart''s plan was the site of the old tank but the Plaintiff stated during his cross-examination that two sets of dotted lines outside the shaded portion indicated the full extent of the tank. If that be correct more than half of the land was tank-filled. It was suggested to him in cross-examination that the two sets of dotted lines merely showed certain rights of way but the Plaintiff did not agree to this.

The engineer Hiran Kumar Sarkar stated that he remembered having been consulted by the Plaintiff about a plot of land in Chetla some 4 or 5 years back and that he was shown a plan depicting various plots besides a copy of Smart''s plan. Referring to the copy of the Smart''s plan disclosed by the Plaintiff which was marked as ex. B, he said that the portion marked in red therein would be the site of the tank covering roughly 1/3rd of the area of the plot. This plot according to the witness was about 50 feet wide with a depth about 70 to 80 feet. He said that from the roadside the tank had extended roughly to about 35 or 40 feet. According to witness it was usual for water in a tank to erode its hanks so that the tank would gradually increase in area along the edge. He. however, could not say to what extent the erosion in this particular case might have occurred after the date of the Smart''s plan. In cross-examination it was suggested to him that with reasonable amount of extra expenditure one could safely build on a plot of land which consisted partly of solid land and partly of tank-filled land to which the witness replied they can do provided they can spend lots of money but as an engineer I cannot advise a client to accept this sort of land half of it being tank-filled.

He said further that extra precaution which would have to be taken in the case of a partly tank-filled land would be to lay a concrete rafting over the entire area to be built upon. In answer to further questions put to him the witness said according to municipal regulations you have got to leave 1/3rd of the area open and you can safely leave the 1/3rd''whieh is tank-filled and build on the 2/3rd which is firm land.

The witness added then comes the question of back space and....the question of side space-It is imperative for every building to leave open side space and back space.

Asked about the amount of expenditure which would have to be incurred for erecting a building on the plot the witness said

The cost of pil.ng will not be less than Rs. 1,500 to Rs. 2,000 according to the volume of the construction, per cottah.

In answer to Q. 44 he said If it be filled with good earth as Improvement Trust people do it will be fully consolidated after 10 or 15 years but if it be filled with garbage and street sweepings and rubbish as is done by the Corporation usually, it will not be consolidated within the course of 25 years or even more than that.

There is nothing further of importance in the evidence of this witness. Really the evidence of this witness does not help in deciding the amount of extra expenditure which might be necessitated by reason of a part of the land being tank-filled land. He had never gone to the site, had never inspected the soil and was not in a position to say whether the land had fully consolidated or not. His opinion, as he himself said, was formed on the basis of the two plans which were put up before him.

The Corporation examined two employees, the first being Haimaja Ranjan Roy the Chief Valuer of the Corporation and one Mahammad Jam shed, a Surveyor. Mr. Roy who has been in the service of the Corporation for more than 29 years, said that Paramhangsa Deb Road scheme was prepared sometime in 1918 and the road itself was constructed round about 1926. He admitted that a portion of plot No. 10 had formed the site of a tank before it was filled up and that about 1/3rd of the plot was included within the tank. He referred to the Smart''s plan ex. 2 and said that the portion shown in blue pencil was the site of the old tank. He stated that the tank was filled up in part at the time of the construction of the road, i.e. along the alignment of the road with embankment on either side, the base of the road being much wider than its top. In 1928 the rest of the tank was filled up. Asked to describe the actual process of filling up he said

It was filled up with hard gritty substance obtained from our incinerator plant nearby. This is a gritty substance which comes out at the end and looks like nodules. It was filled up partly with that and partly with earth. The idea was that the earth will fill up the interestices and consolidate quickly and generally, filled up land gets consolidated in about fifteen years time if it is properly done.

He stated that he did not know exactly the depth of this particular tank but his idea was that the average depth was not more than 4 feet and he also said that at the time of sale the land had acquired its full building value. When he was asked to explain why the plan prepared at the time of sale did not indicate the site of the tank the witness stated that it was done purposely. He said

I thought if I indicated the position of the tank it would go against the interest of the Corporation by lowering the value of the land.

In cross-examination he admitted that he had gone to the site of this plot for the first time in 1948 and that he had no personal knowledge of the condition of the land in 1928. He admitted at first that the plot of land had been advertised for sale in 1935 but in answer to a subsequent question he said that lot No. 10 had not been put up for sale in 1935. At the request of the cross-examining counsel he disclosed a copy of the plan from his office records showing that plots of land on either side of Paramhangsa Deb Road had been sold in 1935 at prices ranging between Rs. 600 per cottah and Rs. 950 per cottah. Counsel wanted to find out from him if it was a fact that it would cost much more to build a house on a tank-filled land than on firm land and the witness answered. Yes, of course slightly more. If the consolidation is fair then it would not cost more. It depends on the consolidation. If it is filled up for more than 20 years I do not think it would cost more than building on any other land not tank-filled.

Md. Jamshed who has been in service tinder the Corporation for more than 31 years, said that he had been living at 11 Chetia Hat Road, quite close to the plot of land in question, from 1924 to 1936. He said that he knew that the tank was filled up with mud from the river Ganges, that it was not filled up depart-mentally by the Corporation but through a contractor. He later corrected himself and said that the word "mud'''' was not proper and that he should have used the word "silt". He stated that the breadth of the road along its base was 60 feet and it was 40 feet broad at the surface. He said further that sewers had been laid underneath the new road. According to witness, after the construction of the road the rest of the tank was tilled up with cinders out of the incinerator of Gargacha belonging to the Corporation. As regards plot No. 10 he said that it was made up of two portions one part being 3 Chetla Hat Road and the other 10 Chetla Road and that 3 Chetla Hat Eoad was the portion which had the tank. It cannot be disputed that the witness had been living in the locality and was familiar with the neighbourhood. He said that South Calcutta Young Muslim Association had occupied that plot from 1932 to 1947 and had built a structure with corrugated iron sheets on the roof. In cross-examination he said that A.K. Sen who had been the District Engineer of this Corporation District at the relevant date, and as such in charge of the construction of Paramhangsa Deb Road. was dead. He added that he himself had been a Surveyor attacked to District IV, and while living in that locality had to pass that way twice a day.

On the evidence adduced there can be no doubt that only 1/3rd of the area of plot No. 10 at Paramhangsa Deb Road was the site of a tank in or about the year 1903 when Smart''s plan was prepared. I see no reason to doubt or disbelieve the testimony of the Corporation witnesses to the effect that the road was constructed in 1926 and the tank was filled up in 1928.

The Plaintiff has adduced no evidence to show how the tank was filled up nor the depth of the tank which lay on the said plot. Haimaja Ranjan Roy was not definite about the said depth. He said that it would not be more than 4 feet. As he has no personal knowledge of the locality I cannot place much reliance, on that statement. No grounds however, have been put forward to show why I should not accept the testimony of the Surveyor J am shed. I accept his evidence that the site of the tank was filled up with cinders and earth. How far the land had consolidated in the year 1949 is difficult to say. No evidence has been adduced to show what additional expenditure, if any, the Plaintiff would be put to if he wanted to erect a building on the tank-filled land.

In order to be able to say whether the existence of the tank in the year 1926 constituted a material defect in the property in the year 1949 one has got to find out what the expression "material "defect" in this connection connotes. u/s 55 of the Transfer of Property Act a seller is bound to disclose to the buyer "any "material defect in the property" or in the seller''s title thereto, of which the seller was and the buyer was not aware and which the buyer could not with ordinary care discover. All this is of course in the absence of a contract to the contrary. The existence of this defect in the land put up for sale by the Corporation was certainly a latent defect but the question still remains whether the defect was a material one.

The law on this point was laid down in very clear terms by Tindal, C.J. in the case of Flight v. Booth 1 Bing. 370 : 131 E.R. 1160. The particulars of sale of certain leasehold premises in Covent Garden Road, in that case, stated that under the original lease no offensive trade was to be carried on and that the premises could not be let to a coffee house keeper or working hatter. The original lease showed that not only was the keeping of a coffee house or the carrying of a business of a hatter prohibited but that the business of brewer, baker, sugar baker, vintner, victualler, butcher, tripe-seller, poulterer, fishmonger and a number of other trades could not be carried on in the premises. In these circumstances it was held that it would not be right to enforce such a contract and the arbitrator''s award in this respect was upheld by the court. The relevant observations of Tindal C.J. are to be found at the bottom of p. 1162 of 131 English Reports, reading as follows:

At all events it is a safe rule to adopt that where the misdescription, although not proceeding from fraud, is in a material and substantial point so far affecting the subject matter of the contract that it may reasonably be supposed, that, but for such misdescription, the purchaser might never have entered into the contract at all, in such a case the contract is avoided altogether, and the purchaser is not bound to resort to the clause for compensation. Under such a state of facts, the purchaser may be considered as not having purchased the thing which was really the subject of the sale.

In other words, if by reason of the defect the purchaser is likely to be forced to accept a property substantially different from what he had bargained for he would be released from the contract. In this case, however, one has got to take into consideration not only Section 55 of the Transfer of Property Act but also the conditions of sale already referred to and a finding has got to be arrived at as to whether these conditions absolved the Corporation even in the case of nondisclosure of a material defect.

I was referred to various reported decisions on this point and I propose to discuss them in the order in which they were decided. The first case is that Re. Brewer and Hankins''s Contract 80 L.T. 127, decided in the year 1899. In this case the conditions of sale relating to a dwelling house and grounds, not sold for building purpose, provided, inter alia, that any error or omission which might be discovered in the particulars of sale affecting the uature of the property should not annul the sale, but should be a matter for compensation; and that the property was to be sold subject to all rights of way or other easements. The purchaser discovered that there was a public sewer passing under the garden at the rear of and at some distance from the house with a manhole used for obtaining access to the sewer and he objected to the completion of the sale on this ground. Delivering judgment Sterling, J. observed as follows:

It appears to me there is an error or omission in the particulars of sale. The vendor contracts to sell the house with the garden. That means, therefore, the whole soil underneath the superficial area. This sewer is vested in the public authority, and he is unable to sell it. Therefore there is an omission. It is apparently, as far as I can see, an omission occasioned by mistake on the part of the vendor. He was not aware of the true state of matters and, so far as I can see, there was nothing fradulent or anything of the kind. * * * * * No doubt, if the existence of this defect was so material as to make the property subject to something in consequence of which the purchaser would not in all probability have entered into the contract, had he known of the existence of it, it would not be the course of the court to force the title on the purchaser. * *

After dealing with the facts his Lordship observed:

And it seams to me that the existence of the sewer has not so materially altered the nature of the property that I ought to say that the operation of these clauses is done away with.

This judgment was upheld in appeal by Lindley, M.R. Rigby and Williams, L. JJ. Lindley, M.R. observed as follows:

This is a case very near the bolder line, but there does not appear to me to be enough to release the purchaser from the bargain that he has entered into.

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The purchaser buys subject to the inconvenience of the public authority sending men to examine the sewvr-to enter the manhole for the purpose of cleaning out the sewer. Is that, however, so serious as to justify the court in cancelling the bargain? I do not think so. Then as to building. What cannot he do because of the sewer? True he cannot build just over the sewer. He would have to modify his plans so as not to build over the sewer. That, however, is a matter for compensation.

The other Lord Justices concerned in this view. Williams, J. was content to observe as follows:

The existence of the seuer does not so alter the character of the piece of land in question that the purchaser has a right to say ''I do not get that which was intended to be sold to me.

The next case in point of time is Re. Puckett and Smith''s Contract (19021 2 Ch. 258. In this case land was sold subject to a condition that the property being open for inspection, the purchaser shall be deemed to buy with full knowledge of the actual quantities and condition thereof. If any error was to be found in the particulars the same shall not annul the sale, nor was any compensation to be allowed in respect thereof. The purchaser bought the land for building purposes and this was known to the vendors. They represented to him that it was suitable for building and that there was no restriction as to the class of houses to be erected. Before he entered into the contract the purchaser inspected the property. Sometime after the contract he discovered that there was an underground culvert for water running across the land. There was nothing in the plan which was shown to him to indicate the existence of this culvert, and the vendors were not aware of it. The Court came to the conclusion that no reasonable inspection would have enabled the purchaser to discover the culvert. In delivering the judgment of the Court of Appeal Collins. M.R. observed (see p. 263):

Was it contemplated by the parties and were they dealing on the basis that the land was reasonably capable of being made fit for building purposes? I think it is perfectly clear that both parties were dealing on that basis.

With regard to the question as to whether the purchaser could by reasonable inquiry and inspection have ascertained the existence of this culvert, it was held that the evidence was all one way and that it was not possible for the purchaser even after carefully going over the property to find out the existence of the culvert. His lordship referred to the observation of Tindal, C.J. in Flight v. Booth (Supra) and observed as follows:

Here the misdescription consists in the representation in the particulars that the property has a "valuable prospective building element" coupled with the statement in the latter of August 5 that the property was "suitable for development", and "there are no restrictions as to the class of houses to be erected". * * * There is evidence that it would cost �500 to deal with the culvert in such a way as to make it possible to use the land for such building as was contemplated by both parties.

In these circumstances the judgment of Kekewich, J. was upheld by the Court of Appeal. Sterling, J. in concurring with Collins M. R. observed as follows (see p. 265):

In my opinion, seeing that the property was plainly sold to the purchaser for the purpose of his building upon it the case does fall within that rule ((Flight v. Booth (Supra)).

The next case is that of Shepherd v. Craft (1311) 1 Ch. 521. This case was not referred to at the bar but it is one of the cases relied on by Maugham, J. as he then was, in the case of In re. Belcham and Gawley''s Contract (1930) 1 Ch. 56, to which my attention was drawn. In Shepherd v. Croft there was an underground watercourse in the property which was the subject matter of the agreement between the parties. The contract was for the sale of a house and land adjoining described as a residential property but which in fact possessed advantages for the formation of building sites. The contract stated that the property was sold subject to all drainage, sewer and other easements, if any, affecting the same, and that if any error or misstatement in the particulars of the contract should be disclosed, the same should not annul the sale, nor should any compensation be claimed or made in respect thereof by either party. Neither the particulars nor the contract nor the plan annexed indicated the existence of the natural underground watercourse which ran through the grounds and the land of the adjoining owners in a culvert or piping constructed by the owners of the several plots of land. The vendors, knowing of the existence of the watercourse, did not disclose it to the purchaser, and the purchaser''s agents, when inspecting the property prior to the contract, did not see the piping, although it was then exposed to view in a hole in the lawn of the house. The purchaser bought the property primarily as a residence, but with a view in certain events to using it for building purposes. On the purchaser trying to resile from the contract the vendors filed an action for specific performance. In considering the question as to whether the dictum of Tindal, C.J. in Flight v. Booth (Supra) was applicable to this case Parker, J, observed as follows:

For the purpose of answering the question, it appears to me that I am bound to consider the terms of the contract itself, and if the Defendant purchased for any particular purpose which was known to the Plaintiffs. I have to consider the purpose for which she purchased the property. Now it appears to me, on looking at the conditions of sale and the particulars, that what the Defendant was purchasing and the vendors were offering was a residential property, with certain specified building advantages; and, in my opinion notwithstanding the existence of the underground watercourse, if I were to decree specific performance, the Defendant would substantially be getting what the Plaintiffs contracted to give her. * * *With regard to the purpose for which the house and land were bought by the Defendant, it appears to me that if she had any intention of using it in a way which is not disclosed by the particulars, that intention was not known to the Plaintiffs; and therefore it is immaterial for the purpose which I am now considering.

His Lordship further observed at p. 529 as follows:

There may, however, be latent defects which, though not such as to give inequity the right to rescission, may yet affect the value of the property, and, in my opinion, the value of the.... property is to some extent affected by the existence of the watercourse in question. In considering its value the building element cannot, in my opinion, be ignored; and if the land is to be developed advantageously for building purposes, it appears to me that the watercourse will have to be diverted at a cost of approximately �300. Further, the evidence before me is that, even after diversion, the existence of the watercourse will to some extent, affect the value of the building plots in which it is proposed to lay out the property, and the figure given with regard to that, is in the case of one of the experts who were called, �270 and in the case of the other expert �340.

His Lordship further held that the vendor''s knowledge of the existence of the watercourse was not a material fact to be considered.

In Re. Belch am. and Gahvay''s Contracts (Supra), the facts were as follows:

At an auction sale held on 8th September 1928, the purchaser agreed to purchase certain freehold property and on the same day paid a deposit on the purchase and signed an agreement to complete. The particulars and conditions of sale did not disclose the fact that two sewers, vested in the local sanitary authority, ran beneath the eastern side of the property. On coming to learn of the existence of the sewers the purchaser decided not to proceed with the contract.

Then a vendor and purchaser summons was taken out. Maugham, Maugham, J. stated at p. 61:

There is general agreement with the statement of the law on the subject in Flight v. Booth(supra) and that it was not limited in terms to cases where the omission or mis-statement resulted from the inadvertence of the vendor, or from an error in the production of the particulars, or from failure to recollect a known fact.

His Lordship added-

It is material to consider the conditions of sale and to bear in mind that the ground was not sold for building purposes, and that the locus in quo, as shown on a plan, indicates that these premises were not very good or suitable for any considerable building developments, and that the only alterations suggested in the particulars can be carried out in spite of the sewers.

His Lordship came to the conclusion (at p. 63):

Prima facie, therefore, apart from the knowledge of the vendor, I should be of opinion that the present is a case in which he is not seeking to compel the purchaser to accept property which differs substantially from that agreed to be sold, and that the omission to state that sewers existed, is an error for which compensation can be made.

Then as regards the knowledge of the vendor his Lordship came to the conclusion that notwithstanding such knowledge the case on the true construction of the conditions, was one for compensation and in this he followed the decision of Parker, J. in Shepherd v. Croft (Supra).

In the instant case I am not concerned to find out as to whether there is a case for compensation and if so what compensataion is to be awarded to the Plaintiff. The question is whether the Plaintiff has been able to make out a case that forcing the bargain upon him would be giving him a property substantially different from that which he intended to purchase and in my opinion he has failed to prove it. All that he has proved is that a portion of the land which was sold to him, had at one time formed the site of a tank. At best it covered one third of the area. It has not been made out that the Plaintiff had informed the Defendant prior to the purchase that he wanted to build a house on it and if so, what kind of house he wanted to erect. The Defendant made no representation that the land was suitable for building purposes. There is no evidence before me, as I have already pointed out, as to the nature of the building operations which the Plaintiff had in mind and what additional costs he would be put to by reason of a portion of the land having formerly been the site of a tank. There is no evidence as to the actual condition of the land in the year 1949 or how far the process of consolidation had progressed. It is not enough for the Plaintiff to say that he did not inspect the property before he purchased it. In my opinion he could have made an application under the provisions of Order XXXIX of the CPC for the purpose of finding out the exact condition of the land immediately after he had filed the suit. For reasons best known to the Plaintiff such a course was not adopted. Again, as I have already stated, there is no evidence as to the depth of the tank which forms part of the said Lot No. 10. If the depth of the tank was not more than 4 feet I do not think that the Plaintiff would be prejudiced at all because the digging of the foundation for any building would go at least to that depth, if not more. There are no data before me from which I can come to the conclusion that there was material defect in the property within the meaning of Section 55 of the Transfer of Property Act.

As regards Mr. Dutt''s contention that the conditions or sale excluded the operation of Section 55 of the Transfer of Property Act, I cannot see my way to accept it in the light of the decisions which I have already referred to. No amount of inspection of the property would have divulged to the Plaintiff the actual condition of the sub-soil before he purchased it and I doubt very much whether the Corporation would have allowed the Plaintiff or his agents to carry out any digging operation on the land in order to find out the actual condition of the soil.

Lastly, there remains the question as to whether the suit is barred by the provisions of Section 538 of the Calcutta Municipal Act, 1923. Mr. Dutt''s contention was that the conditions of sale made it apparent that the Corporation wanted to sell property described as surplus land under the provisions of the Calcutta Municipal Act contained in Sections 468 to 473. Section 468 gives the Corporation the right to acquire any land and buildings for the purpose of opening out any congested or unhealthy area or of otherwise improving any portion of Calcutta. Section 469 gives the Corporation power to frame a scheme for carrying out such work either by themselves through the instrumentality of any co-operative building society or by any other person. Section 472 gives the Corporation the power to sell lease or otherwise transfer on such terms as they may think fit, any land or building vested in them, and Section 473 empowers the Corporation when it decides to lease or sell any land acquired by them under the Act from any person, to give notice by advertisement in local newspapers and to offer a prior right to take on lease or purchase such land to any person or his heirs executors or administrators, who formerly had any interest in such land or who in the opinion of the Corporation had a superior claim to such land, or if it appeared to the Corporation that no such person had a superior claim the Corporation is to put up to auction the right to take on lease or purchase such land among all persons who, previous to its acquisition, had interest in any portion of such laud greater than a lease for years having 7 years to run: Provided that before putting up To auction the right to take a lease or purchase such land, the Corporation might fix a minimum reserve price, below which the said right could not be sold. In my opinion the conditions of sale gave enough indication of the fact that the Corporation was going to exercise its powers above mentioned. The lands were described as surplus lands, that is to say, lands which the Corporation did not require after effecting some sort of scheme in the neighbourhood. Condition (2) of the conditions of sale showed that previous owners of the plots were to have a prior right to purchase the same provided they agree to pay forthwith the amounts of the highest bids. In any event, this condition was enough to put any one on guard that the auction sale was not like a sale held by other persons and that the Corporation had to offer the land to certain persons previously interested therein. On the evidence adduced I have no reason to doubt that the Corporation was selling the land in this case under the powers contained in the said sections. Once that is accepted, argued Mr. Dutt, the principles of the decision of the Privy Council in the case of Commissioners for the Port of Calcutta v. Corporation of Calcutta L.R. 64 IndAp 363 : ILR (1938) Cal. 440 would apply.

Section 538(1) of the Calcutta Municipal Act, 1923, lays down that-

No suit shall be instituted against the Corporation or any Municipal Officer or servant, or any person acting under the direction of the Corporation or any Municipal officer or servant in respect of any act purporting to be done under this Act or under any rule or by-law made thereunder until the expiration of one month next after written notices has been delivered or left at the Municipal office or the residence of such officer, servant or person, stating-

(a) the cause of action;

(b) the name and residence of the intending Plaintiff, and

(c) the relief which he claims.

Section 538(2) provides as follows:

Such suit shall be commenced within four months next after the accrual of the cause of action and the plaint therein shall contain a statement that notice has been delivered or left as required by Sub-section (1).

The relevant provision of the Calcutta Port Act, 1890, which the Judicial Committee had to consider was Section 142 which read as follows:

No suit shall be brought against any person for any thing done, or purporting or professing to be done, in pursuance of this Act, after the expiration of three months from the date on which the cause of action of such suit shall have arisen.

The facts as taken from the headnote of the case L.R. 64 IndAp 363 : ILR (1938) Cal. 440 are as follows:

Unfiltered water for the use of the inhabitants of Calcutta was drawn from the river Hooghly through four suction pipes which ran under the railway of the Appellants, a statutory body constituted under the Calcutta Port Act, 1890, to the pumping station of the Respondents. The roofs of the brick-lined tunnels through which the pipes were carried were overlaid with steel plates. During negotiations for the laying of a fifth pipe under the Appellants'' railway it was agreed that, in order to ensure as little interference with the railway as possible, the work should be done by the Appellants'' staff at the Respondents'' expense. During certain work of an exploratory nature, and before any contract was entered into, two holes were made under the steel plates by a Superintendent of Works in the Appellants'' service, and later, after an abnormal fall of rain water, by way of a sub-way, flooded the Respondents'' pumping station and put the plant out of action.

Buckland, J., who tried the suit, decided it in favour of the Commissioners. On appeal being preferred, Derbyshire, C.J. and Costello, J., allowed the appeal and held that the cause of the damage to the Respondents'' pumping station was the Appellants'' negligence in leaving the holes open and that the Appellants were not protected by Section 142 of the Port Act as the acts of the supervisor in making and leaving the holes open were not done by the Appellants in pursuance of the Port Act. Their Lordships of the Judicial Committee observed. At page 370 of 64 I.A., and pages 447-448 of ILR (1938) Cal.

The work related to the Appellants'' railway trak. It was being done on their property and in their interest. The workmen, including Chatterjee (the supervisor) were paid by the Appellants, presumably from statutory funds and the work was superintended by them. In what Chatterjee did or omitted to do, he was solely concerned with his employers'' business. The Respondents'' argument was that the Appellants failed to repair a part of the railway line, which was situated on their own land. In these circumstances, it is in vain, in their Lordships'' opinion, to suggest, as the Respondents did, that the Appellants were acting in a private capacity, or, indeed in any other than their statutory capacity. The suggestion made on behalf of the Respondents in argument was that the Appellants were acting in the capacity of private contractors. Their Lordships are unable to accept this view. In point of fact, there was then no contract between the parties, the work being done, was, as already stated, of an exploratory character. A contract may have been in contemplation of the parties: but it was not in being. Their Lordships are clearly of opinion that the Appellants did not divest themselves of their capacity as a Port Authority, and did not assume some other capacity, in having the work done.

As regards the case of Bradford Corporation v. Myers (1916) 1 A.C. 242 which was relied on by the Respondents, their Lordships pointed out that there was a substantial difference between the wording of the English Act, i.e., the Public Authorities Protection Act, 1893, and the Port Act and they observed:

In particular the English Act does not contain the words "purporting or pro-fessing" to act in pursuance of the Statute.

It was held that these words were of pivtol importance.

It was argued by Mr. Ghose, learned Counsel for the Plaintiff, that the Act complained of by the Plaintiff in this case was not something done or omitted to be done under the Calcutta Municipal Act, but the omission to disclose the defect was in respect of a duty cast by the Transfer of Property Act, and as such the protection given by the Calcutta Municipal Act would have no application. At first blush the argument seemed attractive, but on closer scrutiny it appears that the argument is not sound and that the sale which was sought to be put through on August 3, 1949, cannot be declared to be void. In the words of the Calcutta Municipal Act the suit is "in "respect of an act purporting to be done under the Municipal "Act", ciz., the sale of surplus lands under powers conferred by the Act. and therefore, in my opinion, Section 538 would apply. It was not disputed that if the section was applicable the Plaintiff was out of Court because he had complained as early as August 27, 1949, that he was rescinding the contract; therefore, his cause of action arose on that date, if not earlier. The suit had to be filed within four months from August 27, 1949-a course which was not adopted in this case.

Mr. Ghose relied on several decisions of this Court and of other Courts. He cited the case of Bando and Co. Ltd. v. Corporation of Calcutta (1939) 43 C.W.N. 1173. In this case Lort Williams, J. followed the judgment of Bradford Corporation v. Myers (Supra). It does not appear that his lordship''s attention was drawn to the judgment of the Judicial Committee in 64 I.A. 363 although it had been decided at least two years before the decision in Bando and Company''s case. On the facts, however, there is wide divergence between the said case and the present case. The Plaintiff there sued for work done and materials supplied and the return of retention money and security deposit under several contracts. The cause of action was not in respect of an act purporting to be done under the Calcutta Municipal Act and his Lordship in effect held, following decisions of this Court and of the Madras High Court, that-

Provisions of Section 538 of the Calcutta Municipal Act or of such or similar provisions in other statutes, relating to powers and obligations of public authorities, did not apply to suits arising ex-contractu.

Mr. Ghose also relied on Corporation of Calcutta v. Asoke Kumar De ILR (1928) Cal. 1231. This was an appeal by the Corporation against a decree for a sum of money claimed by Asoke Kumar De as being the money due on the Provident Fund account of his deceased father. The Corporation was asked to pay the money to the uncle of Asoke Kumar De, one Kunjalal De, under a bond of indemnity. Buckland, J. who tried the suit passed a decree against the Coloration. On appeal it was argued for the Appellant that Section 538 would be a bar to the, action. It was pointed out by Rankin, C.J. that this was not a suit against the Corporation for any act which they could justify under the powers conferred by the Calcutta Municipal Act of 1923. It was not a suit for damages for having paid money over to Kunjalal. It was a suit against the Corporation asking them to pay a sum of money which the Plaintiff claimed as due to him.

Mr. Ghose also relied on the case of Municipal Council of Kumbakonam v. Veeraperumal Padayachi (1914) 28 M.L.J.147. This was a suit for damages in respect of a contract for the removal of rubbish. Napier and Spencer, JJ. held that the suit did not come within the purview of Section 261 of the District Municipal Act and that no notices under that section was necessary.

Reference was also made to Jatindra Nath Pal Vs. Corporation of Calcutta, . This was a suit for damages against the Corporation of Calcutta for wrongful dismissal. Gentle, J. held that the power to appoint persons was conferred on the Corporation by Section 51(2) of the Municipal Act but the power to dismiss officers was conferred on the Corporation by Section 17 of the Bengal General Clauses Act, and therefore the act of the Corporation in dismissing its officer was not one purporting to be done under the Calcutta Municipal Act. Hence notice, u/s 538 was not necessary. His lordship further held that no such notice was necessary even in the case of a claim for arrears of salary as failure of the Corporation to pay it was not an act purporting to be done under the Act. In the view which I have taken I hold that the suit is barred under the provisions of Section 538 of the Calcutta Municipal Act.

I therefore answer the issues raised as follows:

Issue 1: It has not been proved that a major portion of lot No. 10 was not firm land. I hold that 1 3rd. of it was the site of a tank in the past and that it was a substantial portion of the said plot. On the evidence I cannot hold that the site of the former tank was filled up with garbage and cinder only.

Issue No. 2: I do not hold that the Plaintiff has been able to prove that there was a material defect in the property purported to be sold.

Issue 3(a) and 3 (b): The Corporation was certainly aware of the existence of something which might detract from the value of the property and I think the Corporation would have been well advised if it had disclosed the said fact before the sale. A public body like the Corporation of Calcutta should not, in my opinion, have withheld any such information from intending purchasers. There is certainly a general prejudice against land which has been formerly the site of a tank but as I have held that there was no material defect in the property nothing further need be said on this issue.

Issue No. 4: The Plaintiff cannot avoid this contract by reason of any defect alleged.

Issue No. 5: The suit is barred by limitation under the provisions of Section 538 of the Calcutta Municipal Act. The suit will, therefore, be dismissed with costs.

Attorney for Plaintiff: B.N. Basu and Co. Attorney for Defendant: T.C. Mitra.