Shaik Buddan Sab and others vs Nagamma and another

Jeevan Reddy, J.—Defendants are the appellants. The Trial Court has decreed the respondents'' suit as prayed for granting a decree in a sum of Rs. 23,730/- with costs, towards damages for breach of warranty.

According to the plaintiff, defendants 1 and 2, and one Kothapalli Rahmansab (husband of the 3rd defendant and father of defendants 4 to 6) sold a land with an extent of Ac.12-97 cents, under a registered sale-deed dated 7-6-1947, to the 1st plaintiff for a consideration of Rs. 500/- representing that they are the full and absolute owners thereof. They delivered possession of the same on the date of the sale-deed. Subsequently, the mother of defendants 1 and 2 filed a suit, O.S. No. 407/1952 on the file of the District Munsif''s Court, Cuddapah, against the 1st plaintiff herein, contending that the present defendants 1 and 2 or the deceased Kothapalli Rahmansab, had title only to the extent of 6 Acres out of the land conveyed by them and that, the remaining extent i.e. Ac. 6-97 cents, was the property of her husband, V. Chinna Peerah Saheb who is said to have executed three gift deeds in respect of the said Ac. 6-97 cents in favour of herself and her two daughters, Khadar Bi and Mahboob Bi (who were impleaded as defendants to that suit). According to the said plaintiff, on 5-8-1944 two sale-deeds were executed, one in favour of the present defendants 1 and 2 for 6 Acres, and the other in favour of her husband V. Chinna Peerah Sab, in respect of Ac. 6-97 cents. It was stated that her husband was the absolute owner of the property purchased by him and that, he executed the said gift-deeds on 10-5-1952 giving all the three of them equal extents therein. The present plaintiff contested the said suit denying the said sale-deed in favour of V. Chinna Peerah Sab and also contending that, even if there is any such sale-deed, V. Chinna Peerah Sab was only an ostensible owner and that, the true owners were defendants 1 and 2 and the said K. Ramansab. The said suit was however decreed and ultimately confirmed in S.A. No. 101/1963 by this court on 4-2-1967. It is stated that, in pursuance thereto, the 1st plaintiff was dispossessed of the said Ac. 6-97 cents of land. The plaintiff, therefore, filed the present suit for damages for breach of warranty, contending that defendants 1 and 2 and the predecessor-in-interest of defendants 3 to 6 played fraud upon him by representing that they are the owners of the said Ac. 6-97 cents and that they were competent to convey the same. According to the plaintiff, the market value of the said land was Rs. 3000/- per acre on4-2-1967 and that, therefore, he is entitled to the market value of the said land together with a sum of Rs. 3,000/- spent by them towards litigation. Sole plaintiff died pending the suit and his legal representatives were brought on record as plaintiffs 2 and 3.

Defendants 1 and 2 filed a written statement admitting the truth of the sale deed executed by them on 7-6-1947, but their contention was that they sold only an extent of 6 acres belonging to them but that, the 1st plaintiff fraudulently inserted the whole extent of Ac. 12-97 cents, instead of 6 acres sold by them. It was further alleged that the plaintiff only wanted the attestation of K. Rahmansab but that Rahmansab never really joined the sale-deed. They denied any knowledge of the proceedings in O.S. 407/52 and the appeals arising therefrom. They submitted that the 1st plaintiff has got the value of the improvements made by him, under the decree in O.S. 407/52 and that, therefore, he is not entitled to any relief.

Defendants 3 to 6 filed a separate written statement. They denied that Kothapalli Rahmansab ever sold any land to the plaintiffs. They denied their knowledge of the sale deed dated 7-6-1947. According to them, they had no interest in the property sold under the said sale-deed, and stated that, according to the information gathered by them, from their enquiries, the 1st plaintiff himself had misled the said deceased and by false and fraudulent representation obtained his signature on the sale-deed. They also denied any knowledge of the earlier litigation in O.S. No. 407/1952, or the appeals arising therefrom. They therefore, denied their liability in this behalf.

The Court below framed appropriate issues and found (i) that, defendants 1 and 2 and the said Kothapalli Rahmansah had executed the sale-deed dated 7-6-1947 in respect of Ac. 12-97 cents. It disbelieved the defendants'' story that it was the plaintiff who fraudulently inserted the whole extent of Ac. 2-97 cents though they purported to sell only 6 acres; (ii) that, the rule of caveat emptor does not apply to the facts of this case and that, the defendants are liable for damages for breach of warranty. The market value of the said land in February 1967 was determined at Rs. 3,000/- per acre and, accordingly the market value of the said land, as well as a sum of Rs. 3,000 towards litigation expenses, was decreed with costs.

Sri S.V. Kondapi, the learned counsel for the appellants, raised the following three contentions, viz. (i) that, there is no breach of warranty in this case and that, the 1st plaintiff had purchased Ac. 12-97 cents from the appellant knowing full well that they are not the owners thereof; (ii) that, the Court, below has erred in determining the market value of the suit land @ Rs. 3,000/- per acre; and (iii) that, though the defendants raised a plea of limitation in their written statement, no issue has been framed in that behalf by the Court below, nor any finding given.

On the first contention, the learned Counsel relied upon clause (a) in sub-section (1) of Section 55 of the Transfer of Property Act, which reads as follows:

In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following; or such of them as are applicable to the property sold;

(i) The seller is bound:

(a) to disclose to the buyer any material defect in the property or in the seller''s title thereto of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover.

The submission is that, had the plaintiff exercised ordinary care, he could have discovered that his vendors were having title only to the extent of 6 Acres as evidenced by the sale-deed dated 5-8-1944 in favour of defendants 1 and 2 and that, the remaining extent of Ac. 6-97 cents was purchased by V. Chinna Peerah Sab. It is stated that, defendants 1 and 2 purchased the extent of 6 Acres for a sum of Rs. 1,000/- even in 1944 and, similarly, V. Chinna Peerah Sab purchased the remaining extent of Ac. 6-97 cents for a sum of Rs. 1000/-. The sale of the entire extent of Ac 12-97 cents three years later for a sum of Rs. 500/- is unbelievable, and it shows that the 1st plaintiff had purchased the said land from defendants 1 and 2 K. Rahmansab without any verification, which he was ordinarily expected to do. Counsel relied upon the decisions in S. Ahmed Hussain Sahib Vs. K.K. Gani Veeri Chettiar and Others, ; State of Gondal Vs. Govindram Seksaria, and Md. Hussain Faisi and Another Vs. State of Andhra Pradesh, in support of his submission. But in our opinion, the said clause (a) of Section 55(1) of the Transfer of Property Act has no application to a case where a person sells property in which he has absolutely no interest, as in the present case. The said clause applies in a case of defect in the title of the vendor, and not in a case of ''no title''. The clause contemplates that, if there is any material defect in the property, or in the seller''s title thereto, and which the buyer could not with ordinary care discover, the seller is bound to disclose; and if he fails to do so, the vendee has a remedy against him. In a case where a person sells property not at all belonging to him but belonging to a third party, it cannot be said to be a case of either a material defect in the property, or a material defect in his title thereto. It would be a case of total absence of title. In fact it would be a clear case of misrepresentation, amounting to fraud. Moreover, in this case, the court below has disbelieved the case of defendants 1 and 2 that they sold only 6 Acres of land and that, the 1st plaintiff himself had fraudulently inserted the whole extent of Ac, 12-97 cents without their knowledge. The said finding has not been questioned before us and rightly so in our opinion, because the only evidence in support of the said contention consists of the testimony of the 2nd defendant himself. No other evidence has been adduced in support of the alleged fraud played by the 1st plaintiff at the time of execution of the said sale-deed. We are, therefore, of the opinion that clause (a) in sub-section (1) of Section 55 of the Transfer of Property Act cannot come to the rescue of the appellants and that, they are bound to make good the loss suffered by the plaintiff.

We may now examine the decisions cited by the learned counsel. The first decision in S. Ahmed Hussain Sahib Vs. K.K. Gani Veeri Chettiar and Others, is a case where the prohibition contained in Section 17 of the Madras Town Planning Act was contended to be a defect in the title, which the seller was said to be guilty of not disclosing. The Bench, after discussing the various provisions of the said Act and the law in that behalf, held that the mere fact that a particular area is included in the Town Planning scheme, does not mean that the owner thereof is incompetent to sell the same or that his title to deal with the said property is void in any manner. In other words, the court held that Section 17 of the said Act does not constitute a defect in the title of the vendor. Having so stated, they proceeded to discuss the contention based on Section 55(1)(a) of the Transfer of Property Act, and held that the purchaser is bound in law to make reasonable enquiries before purchasing a property and that, if he fails to do so, he would not be entitled to claim any damages in case any defect is discovered in the vendor''s title. It would immediately be seen that this is not a case of a total absence of title. In fact, the court held that there was not even a defect in title, but proceeded to discuss the principle of Section 55(1)(a) on the assumption that, even if it amounts to a defect, the plaintiff is not entitled to any relief since he has failed to make reasonable inquiries.

Similarly, State of Gondal Vs. Govindram Seksaria, is again a case of defect in title and not a case of total absence of title.

The next case cited by the learned counsel in this behalf is the decision of a learned Single Judge of this court in a Criminal Miscellaneous petition, reported in Md. Hussain Faisi and Another Vs. State of Andhra Pradesh, . The learned Judge was dealing with the ingredients of Section 420, I.P.C. and in that context the learned Judge also referred to the requirements in Sec. 55(1)(a) of the Transfer of Property Act. We do not see how the said case can be of any help to the appellants herein.

We adjourned the matter on 13-7-1976 to enable the learned counsel to make further investigation and to cite before us any authority applying the principle of Section 55(1)(a) of the T.P. Act in the case of a total absence of title. The matter was again heard on 14th and 15th of July, 1976, but the learned Counsel was unable to cite any authority applying the said provision of law in the case of a total absence of title. After giving earnest consideration to the matter we are of the opinion that the said clause has no application in a case where the vendor has no title whatsoever to the property sold. In this case, there were two items of property, purchased under two separate registered sale-deeds. Defendants 1 and 2 were the purchasers under one such sale-deed, and to the extent of 6 acres only. Regarding the other piece of land i.e., Ac. 6-97 cents, they had absolutely no title, or even a pretence of title. Even then, they purported to sell not only the piece of land owned, by them, but also the other piece of land with which they were totally unconcerned. While it cannot be denied that a purchase must also exercise reasonable care and make reasonable enquiries before purchasing a property, yet, in a case like the one before us, we cannot deprive the plaintiff of the damages by saying that he is guilty of not making reasonable enquiries. As we have mentioned earlier, it would be a case of clear misrepresentation amounting to fraud on the part of the vendors and we see no equity nor any other principle in allowing the defendants to get away with their fraud.

The next question that arises is about the quantum of damages awarded by the trial Court. It may be seen that even in 1944 defendants 1 and 2 had purchased 6 Acres of land for a sum of Rs. 1,000 under Ex. B-2. Similarly, K. Chinna, Peerah Sab purchased Ac 6-97 cents on the same date for another sum of Rs. 1000/- (under Ex. B.J). But, it is rather strange to see that the entire property was sold for a sum of Rs. 500/-three years later, under Ex. A-2 in favour of the 1st plaintiff. However, in the absence of any evidence of fraud or misrepresentation on the part of the plaintiff and since we have already held that the sale-deed (Ex. A-2) is not vitiated by any fraud on the part of the plaintiff it has got to be acted upon, and the plaintiff is entitled to damages. The question that then arises is the measure of damages. It is well settled by a number of decisions of this court and of the Madras High Court that, in such cases, the plaintiff is entitled to damages equivalent to the market value of the land as on the date of his dispossession; (vide Nannapaneni Narasingarayudu and Others Vs. Nannapaneni Ankineedu (died) and Another, We have, therefore, to determine the market value of the said land in 1967. Although the plaintiff has not given the exact date of his dispossession, it is the common case of both the parties that the 1st plaintiff was dispossessed from the said extent of Ac. 6-97 cents sometime in 1967.

For determining the market value of the said land, the court below appointed a Commissioner (P.W. 1) who submitted a report (Ex. A-1) stating that the value of the said land would be Rs. 3,500/-per acre in 1967. The Court below accepted the said report of the Commissioner but since the plaintiff himself had asked for a decree @ Rs. 3,000/- per Acre only, the same was awarded, Counsel for the appellants, however, questioned the said finding. Ex. A-1 is the report submitted by the Commissioner on the basis of oral and documentary evidence adduced before him. In paragraph 8 of the said report, reference is made to the evidence of P.W. 3 and his sale-deed (marked Ex. A-1 before the Commissioner). The said sale-deed dated 24-7-1969 pertains to an extent of Ac. 2.25 cents, and the consideration therefor is Rs. 6000 which works out to Rs. 2,400/- per Acre. The said P.W. 3 before the Commissioner further appears to have deposed that his land, as well as the land in question herein, would be costing Rs. 5000/- per acre on the date of his deposition, i.e. in 1972. Although he stated that the land concerned in the suit is more fertile than his land, there appears to be no basis for the same because, according to him, both the lands carry the same market value. It is not necessary for us to refer to the evidence of other witnesses examined by the Commissioner, since theirs is only an oral assertion uncorroborated by any sale-deed or any other documentary evidence.

Now coming to the evidence adduced in the suit, P.W. 2 (who is the deceased 1st plaintiff''s brother''s son) has deposed that the value of the said land would be Rs. 4,000/- per acre in 1967 and Rs. 5,000/- or 5,500 per acre in 1972 (the date of his deposition). He has stated that the deceased 1st plaintiff spent about Rs. 1000 or Rupees 1200/- per acre for improving the said lands after purchasing them. He has also deposed that the deceased 1st plaintiff and thereafter his legal representatives have been cultivating the entire extent of Ac. 12.97 cents. P. W. 3 is an adjacent owner, who has given evidence that the value of the said land would be Rs. 4,000/-. per acre in 1967 and Rs. 5,000/- per acre in 1972. He too has spoken to the improvements made by the deceased 1st plaintiff after purchasing the said land. On behalf of the defendants, the 2nd defendant has been examined as D.W. 1 and according to him, the value of the said land would be Rs. 500/- to Rs. 1000 per acre between 1966 and 1972. He denied the suggestion made to him that the value of the said land in 1967 was Rs. 4,000/- or Rupees 3,500/-. D.W. 2 is a cultivator from another village Sararkhanpet. He produced, a settlement deed dated 27-9-1966 (Ex. B-5) executed by his wife''s grandfather in her favour where in the land with an extent of 75 cents was valued at Rs. 400 but, he admitted that the said land is not being cultivated. Moreover, the said land is situated in another village, and we are not prepared to place any reliance upon the evidence of this witness or on Ex. B. 5.

D.W. 3 is a witness belonging to another village, Khajipet; In his Chief Examination, he deposed that the market value of the land concerned in this suit would be Rs. 1,000/- or Rs. 1500/- per acre (in 1972) and that, in 1967 its value would be Rs. 400/- or Rs. 500/-. But, in cross-examination, he admitted that the value of the said land (in 1972) would be Rs. 3,000/- to Rupees 4000, of course, the Commissioner has been examined as P.W. 1 who has given evidence in support of his report.

After considering the above evidence we are of the opinion that the trial court has erred in fixing the market value of the said land at Rs. 3,000/- per acre in 1967. Apart from the oral evidence which is ambiguous, we have got the sale deed produced before the Commissioner and marked by him as Ex. A-1. It pertains to a land in the same village, and which is stated to be situated to the west of the land in question. The said land was purchased in July 1969 at the rate of Rs. 2,400/- per Acre. We have already referred to the evidence of P.W. 3 before the Commissioner, and held that the land purchased by him and the land in question must be deemed to be similarly situated. If so, the value of the said land cannot be Rs. 3,000 or Rs. 3,500/- in 1967, but it must be something less than Rs. 2400/- per acre. Having regard to the various circumstances of the case, we are of the opinion that the market value of the said land must be fixed at Rupees 2000/- per Acre in 1967, when the 1st plaintiff was dispossessed therefrom.

With respect to the litigation expenses, however there are no grounds for interfering with the amount of Rs. 3000/-pleaded by the plaintiffs and accepted by the trial court. The said amount is confirmed.

The last submission of the learned counsel for the appellants is that, even though the defendants raised a plea of limitation in their written statement, the Court below has not framed any issue in that behalf. It is, no doubt, true that the defendants pleaded in their written statement that the claim for damages is barred by limitation, as it is stated to be filed more than three years after the decision in the earlier case, but the basis of the said plea is misconceived. The period of limitation for the present suit has to be computed not from the date of the final decision in the earlier litigation, but from the date of the plaintiff''s dispossession. As we have already noted above, it is not clear from the record or from the pleadings as to when the plaintiff was actually dispossessed, though both the parties have proceeded on the assumption that the 1st plaintiff was dispossessed before the institution of the suit. The Court below, of course, did not frame any issue with respect to limitation; but, the defendants do not appear to have agitated the said aspect. They never asked the court below to frame an issue in that behalf, nor did they lead any evidence with respect to the date of plaintiff''s dispossession; nor do they appear to have argued the said aspect before the trial court. Even before us, no attempt was made to substantiate the said plea of limitation, except merely asserting that the Court below did not frame any issue in that behalf. In the circumstances of this case, we would be justified in holding that the defendants must be deemed to have abandoned the said defence, and we are not inclined to permit them to raise the said issue at this stage, which would require a remand and re-opening of the case.

The result, therefore, is that the appeal is partly allowed. The market value of the suit land is fixed at Rs. 2,000/- (Rupees two thousand only) per acre, instead of Rupees 3,000/- as determined by the trial court. In all other respects, the appeal is dismissed. In the circumstances of the case, however, the parties are directed to bear their own costs.