ABRAHAM EZRA ISSAC MANSOOR Vs. ABDUL MAHOMED ALIBHAI

JUDGEMENT

(1.) THIS is an appeal from a judgment of Mr. Justice Tendolkar. It seems that on February 9, 1943, the plaintiff and the defendant entered into an agreement whereby the defendant agreed to sell to the plaintiff an immoveable property for the price of Rs. 48,000. The amount of earnest money of Rs. 3,000 had already been paid by the plaintiff to the defendant on January 18, 1943. The defendant was the mortgagee of this property and the mortgagor filed a suit to redeem the property and after some contest a redemption decree was passed in favour of the mortgagor, and as the mortgagor redeemed the property, the defendant informed the plaintiff that he was not in a position to complete the contract and convey the property. He sent a cheque for Rs. 3,000 returning the earnest money which had been deposited with him by the plaintiff. The plaintiff, in the first instance, refused to accept the cheque of Rs. 3,000 and claimed damages for breach of contract. Ultimately he accepted the cheque of Rs. 3,000 without prejudice to his claims and contentions, and filed this suit claiming in the first instance a sum of Rs. 80 being interest on the sum of Rs. 3,000 at 6 per cent, per annum item February 9, 1943, to July 22, 1943, and a sum of Rs. 748-11-6 which were the costs incurred by the plaintiff of and incidental to the agreement for sale, and damages in the sum of Rs. 12,000 or such other sum as the Court may award for breach of contract by the defendant. The learned Judge took the view that the contract between the parties was an absolute one. He then considered whether the rule of Bain v. Fothergill (1873-4) L. R. 7 H. L. 158 and Flureau v. Thornhill (1776) 2 W. BI. 1078 applied in India, and came to the conclusion that that rule did not apply, that the parties were governed by the plain words of Section 73 of the Indian Contract Act, and that the defendant was liable to-pay damages for the breach of contract. He fixed the date of breach and referred the suit to the Commissioner to ascertain damages on the footing of a breach on that date. The defendant has come in appeal from that decision.

(2.) NOW, it is unnecessary, in my opinion, to express any opinion on the very interesting question raised by the learned trial Judge as to whether the well known English rule in Bain v. Foihergill and Flureau v. Thornhill applies or does not apply in India. As the learned Judge has himself pointed out, there are conflicting decisions of our own Court. There are also decisions of other High Courts to be considered before one can express one's opinion one way or the other. But as this appeal is capable of being disposed of on a much narrower point, it is not at all desirable to launch upon the more ambitious question of the applicability of the rule in Bain v. Fothergill and Flureau v. Thornhill to this country. Therefore that question must still remain undetermined till a proper occasion arises when the whole matter may be considered from all aspects.

(3.) THE learned Judge also relied on Section 55 (2) of the Transfer of Property Act. Now that corresponds to what is known in English law as a covenant for title. In England there is no statutory guarantee of good title. Our law makes a departure from the English law and provides for a statutory guarantee of good title in the absence of any contract to the contrary arrived at between the parties to the agreement themselves. THEre is some conflict between the different High Courts as to whether this covenant for title operates at the stage of agreement for sale or at the stage of the execution of the conveyance. But without going into that question I will assume that even in an agreement for sale the vendor guarantees good title to the purchaser. In other words, he guarantees to the purchaser that he has title in the property and that he is in a position to convey the property. If there is no contract to the contrary Mr. Peerbhoy is right that the guarantee or the covenant for title under Section 55 (2) would be absolute and it would not be a title defeasible at the instance of any other party. But looking to Clause 2 of the agreement, in my opinion, there is a contract to the contrary between the parties and therefore Section 55 (2) of the Transfer of Property Act doss not come into operation. THEre is no guarantee of absolute title under this agreement, nor does the vender covenant with the purchaser that he is in a position absolutely to transfer the property in when the: sale is completed. On the contrary, there is a clear contract to the contrary by which the vendor makes it clear to the purchaser that ha would only be able to convey this property to the purchaser provided the mortgagor does not exercise his right to redeem the property.