Sitharama Holla (died) and Others vs Srinivasa Somayaji

Krishnaswami Nayudu, J.—This second appeal arises in a suit instituted for recovery of unpaid purchase money, the right to recover it

having been purchased by the plaintiff. The defendant claims to be the owner of the property under sale deed Ex. B. 2 dated 12-1-1940. A sum of

Rs. 745-7-11 was retained with the purchaser one Mavji Shet under a sale deed Ex. A. 22 dated 26-7-1926 of three items of properties

executed by one Subramania Holla. Subramania Holla had earlier mortgaged one of the three items of properties sold under Ex. A. 22 along with

other properties to one Seetharama Bhatta under the mortgage deed dated. 30-10-1922. Seetharama Bhatta died and his sons instituted a suit on

the mortgage, O. S. No. 132. of 1935. By the time the suit was instituted, the three items of properties together with the sum of Rs. 745-7-11,

which was retained for payment of the mortgage, passed into the hands of one Vasudeva Thunga, who was made a party to the mortgage suit.

Lakshminarayana Shastry, a subsequent mortgagee was also made a party to the mortgage suit. A preliminary mortgage decree was passed in that

suit on 23-8-1935 and the final, decree was passed on 30-10-1933.

Lakshminarayana Sastry, who was the 5th defendant in the mortgage suit, satisfied the earlier mortgage and brought the properties to sale and

himself became the purchaser and obtained the sale certificate Ex. A. 6 dated 13-6-1941 and 18-6-1941. In the meanwhile, Lakshminarayana

Sastri attached before judgment the right to recover the unpaid purchase money, namely, Rs. 745-7-11, and the attachment was made absolute by

order dated 19-8-1935. In B. I. A. No. 742 of 1943 Lakshminarayana Sastri obtained a personal decree on 6-9-1943 and in R. E. P. No. 330

of 1944 dated 24-7-1944 lie brought the right to recover the unpaid purchase money to sale and the present plaintiff was declared the purchaser

under order dated 28-11-1945 in R. E. P. No. 330 of 1944. Notice had gone to the present defendant. He denied the debt. But in spite of that

the right was directed to be sold. The lower court was of the opinion that since the defendant had not appealed against that order, that order must

be treated as constituting ''res judicata''. The correctness or otherwise of this view need not be canvassed now, as the appeal could be disposed of

on other grounds.

The main question that was argued was as to limitation. The contention of Mr. Adiga is that the amount sought to be recovered being an amount

provided to be paid to an encumbrancer by the vendee, the provisions of Section 55 Clause 5(b) of the Transfer of Property Act would be

applicable and not Clause 4(b), which deals with unpaid, purchase money as such Section 55, Clause 5(b) is as follows:

The buyer is bound to pay or tender, at the time and place of completing the sale, the purchase money to the seller or such person as he directs;

provided, that, where the property is sold free from incumbrances, the buyer may retain, out of the purchase money, the amount of any

incumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto.

The contention of Mr. Adiga is that especially in view of the terms of the sale deed, in which the amount payable for principal and interest to the

encumbrancer was ascertained, the intention of the parties was that the amount was due to be paid on the date of the sale and therefore the 12

years'' period of limitation should be calculated from the date of the sale.

In support of this contention, he relied on the decision in -- ''Gangaram v. Raghubans'', 27 Pat 898 (A) and in particular to the view of Manohar

Lall J. that the starting point of limitation, in respect of amounts reserved to be paid under Sub-clause 5(b) of Section 55, Transfer of Property Act,

to enforce the vendor''s lien is the date of the sale deed or within a reasonable time thereof. As to what is reasonable time, one is unable to guage

anything from the judgment. This decision is not helpful as the right of the vendor to recover the amount reserved with the purchaser for paying off

the encumbrance would not arise unless & until the encumbrance has been otherwise discharged by the vendor, or the encumbrancer, by reason of

the non-payment, has taken proceedings against the vendor for recovery of the amount and has recovered the same in execution or otherwise.

Until then there is no cause of action for the vendor to recover the amount, since it will be open to the purchaser to pay the amount to the

encumbrancer at any time before the encumbrancer sues for the same. It is very difficult to prescribe what a reasonable time would be, especially

in cases where the starting point of limitation has to be fixed with reference to the application of the limitation Act to a suit of this nature.

The view taken by a Bench of his court in -- W. Srinivasavaradachariar, his son and legal representative, W. Krishnamachari Vs. Dasu Reddiar

alias Veeraswami Reddiar and Others, appears to be the correct view in so far as limitation in respect of these suits is concerned. The starting

point of limitation in such cases has been found to commence from the date on which the encumbrancer or the mortgagee executed his decree. In

this case the relevant date would be 5-4-1941, when the properties were sold in execution of the decree and therefore there was no possibility or

necessity for a purchaser under Ex. A. 22 and his successors-in-title to pay the encumbrance, since it must be deemed to have been paid off by the

sale in execution of the mortgage decree in O. S. No. 132 of 1935. The view taken by the lower court as to the starting point of limitation is

therefore correct and does not require any interference.

I am unable to see how Lakshminarayana Sastri, 5th defendant in O. S. No. 132 of 1935, in pursuance of his right to have a personal decree

having attached the right to recover this amount before judgment and the attachment having been subsequently made absolute, was prevented from

bringing that right to recover the amount to sale. The proceedings in R. I. A. No. 742 of 1943 and the subsequent proceedings in R. E. P. No. 330

of 1944 have been perfectly legal and the plaintiff, who under Ex. A. 19 was declared the purchaser of that right, is entitled to recover that amount

from the property which came into the hands of the defendant and which property is subject to that charge.

I have no hesitation in holding that the lower courts were correct in granting a decree in favour of the plaintiff. The appeal fails and is dismissed

with costs. No leave.