Varanasi Venkata Surya Subba Rao vs Chivukula Vasudevasastry

Viswanatha Sastri, J.—The plaintiff is the appellant in this Second Appeal. He sold a building site of the extent of 600 sq yards in Rajahmundry to the defendant for Rs. 2.450/- under a sale deed Ex. B-1 executed on 31-1-1950. The defendant (buyer) was living a few yards off and to his knowledge the site was in the occupation of a tenant holding under a monthly lease when Ex. B-1 was executed. The relevant clauses of the sale deed, Ex. B-1, were as follow:

The said consideration of Rs. 2,450/- has been settled to be paid to me by you before the Sub Registrar at the time of registration of the document. The sale consideration has been received by me in the said manner. By the date of registration of the said sale deed, we shall deliver possession of the property to you and get the document duly registered.

According to the buyer''s notice Ex. A-1 dated 8-3-1950 vacant possession of the site was not given though the lease deeds relating to the site were handed over to him. The buyer demanded delivery of vacant possession and registration of Ex. B-1. The seller''s reply, Ex. B-4 dated 18-4-1950, was to the effect that the buyer was aware of the tenancy and had agreed to take the property subject to the tenancy and that owing to the failure of the buyer to hand over the lease deeds to the seller, he was unable to sue for eviction of the tenant. Exhibit B-4 also intimated that if the buyer could not wait till the tenant was evicted the sale might be treated as cancelled''. On 24-4-1950, the buyer presented the sale deed, Ex. B-1 for registration and it was compulsorily registered on 14-6-1950. The buyer did not pay the price even though Ex. B-1 had been got registered at this instance. There was a further exchange of notices between the parties, the seller demanding payment of the price and the buyer insisting on delivery of vacant possession before payment. It may be stated that during the pendency of the present suit the tenant agreed to surrender possession of the property to the seller or to the buyer if so directed by the seller.

On 30-6-1950, the seller filed the suit out of which this second appeal has arisen for cancellation of the sale deed. Ex. B-1 or for recovery of the purchase money with interest and costs. The buyer deposited Rs. 2,4507/- into court after the institution of the suit. Exhibit B-1 having been registered and the title to the site having vested in the buyer the relief by way of cancellation of the sale deed was given up at an early stage of the suit. The trial Court held that the seller was entitled] to interest on the purchase price and costs of the suit while the lower appellate Court negatived the seller''s claim for interest and costs & directed him to pay the costs of the buyer in the trial Court as well as in the lower appellate Court. This second appeal, therefore, relates only to costs and interests.

As regards costs, it is clear that an appeal lies against an award of costs only where the order as to costs involves a matter of principle or where there has been no real exercise of discretion in making the order as to costs or where the order as to costs is based on a radical misapprehension of the facts, or the law. A second appeal lies in respect of costs provided there is a question of law the answer to which governs the award of costs by the lower appellate Court. The right to interest, however, stands on a different footing.

What are the rights of the buyer and seller in the present case under the contract of sale and the events that have happened? Was the buyer entitled to withhold payment of the purchase money, and if so, how long? Was the seller bound to deliver to the buyer vacant possession of the property and was he in default? Under S. 55 sub-s. (1), Cl. (f), Transfer of Property Act, a seller is bound to give on being so required to the buyer or his nominee such possession of the property as its nature admits. ''Possession'' here does not necessarily mean personal occupation but might include a landlord''s possession it the property sold is in the occupation of a tenant to the knowledge of the buyer. The contract of sale might, however, provide for delivery of vacant possession of the property even though it in the occupation of a tenant to the knowledge of the buyer, S. 55, Transfer of Property Act is subject to the contract between the parties.

The sale deed, Ex. B-1, provides that the seller should deliver possession of the property to the buyer before registration if only symbolical possession had been agreed to be delivered, for such possession, could have been delivered on the date of Ex. B-1 itself. From the buyer''s notice, Ex. A-1 it appears that the lease deeds of the site. Exs. B-3 and B-3 (a) were delivered to him some time after the execution of the sale deed. The buyer, however, insisted on vacant possession being given by the seller. In view of the recent lease deeds executed by the tenant in respect of the site, there was no real difficulty in his eviction. But, for the reason, or other, the parties entered into acrimonious correspondence each charging the other with default. The buyer was keen on acquiring the property, and though physical possession of the site had not been delivered and the seller had empowered him to cancel the sale deed if he insisted on immediate vacant possession, the buyer presented Ex. B-1 for registration on 24-4-1950. The document was compulsorily registered thereafter.

After the execution of Ex. B-1 and the delivery of the lease deeds, Exs. B-3 and B-3 (a) to the buyer and particularly after the registration of the sale deed, Ex. B-1, it was not possible for the seller to evict the tenant by resort to a suit. The title to the property having passed to the buyer, he alone could have taken action thereafter for the eviction of the tenant. The buyer did not take steps for evicting the tenant but went on insisting upon the seller putting him in vacant possession of the property and withholding the price till such vacant possession was delivered by the seller. Under the sale deed, Ex. B-1 the price had to be paid at the time of registration of the document. By getting the sale deed, Ex. B-1, registered, the buyer had acquired the right to evict the tenant and had put it out of the power of the seller to evict him. Thereafter, the buyer had no right to withhold the payment of the purchase money whatever rights he might have had to claim damages from the seller for the delay in delivering vacant possession of the site. The buyer cannot ignore the terms of Ex. B-1 requiring payment of the purchase price at the time of registration. It might have been open to him to have left the sale deed, Ex. B-1, unregistered and sue the seller for damages. But he got Ex. B-1 registered and acquired title to the property. By getting Ex. B-1 registered he took it upon himself as the owner of the property to evict the tenant and effectively prevented the seller from suing for eviction. In my opinion, therefore, there was no justification for withholding payment of the purchase price. The seller had no alternative except to bring a suit for recovery of the purchase price from the buyer and whatever claim the buyer might have had for damages against the seller. he could, not refuse to pay the purchase price after securing his title to the property by getting Ex. B-1 registered.

For these reasons. I am of opinion that the seller was entitled to the costs of the suit in respect of the sum of Rs. 2,450/- payable by the buyer,

The claim for interest, however, stands on a different footing. Under S. 55(4), Transfer of Property Act, the seller is entitled where tins ownership of the property has passed to the buyer before the payment of purchase money, to a charge on the property for the amount of the purchase money and for interest on such amount from the elate on which possession had been delivered. In the present case, physical possession was not delivered to the buyer and, therefore, there is no justification for awarding interest to the seller on the purchase price. To this extent, the seller''s claim fails.

The second appeal is, therefore allowed to the extent of Rs. 501-7-7. There win be a decree in favour of plaintiff for this sum of Rs. 501-7-7 with interest thereon at 6 per cent. from this date. The claim of the plaintiff to Rs. 134-12-0 by way of interest on the purchase money (sic) disallowed. The parties will pay and receive proportionate costs in this Second Appeal. The plaintiff''s costs of the trial Court as well as the first appellate Court are provided for and metered in the sum of Rs. 501-7-7. decreed to the plaintiff to this second appeal. If the plaintiff has paid any costs to the defendant in pursuance of the decree of the lower appellate Court he will foe entitled to restitution in respect of the same. Leave refused.