YELETI RAGHAVIAH Vs. MOHAMMED IBRAHIM

JUDGEMENT

(1.) This appeal is from the Judgment and Decree of the Subordinate Judge Secunderabad. The plaintiff, Mohammed Ibrahim, purchased a house for a sum of Rs. 5,000 from one Bangaramma, defendant No. 1 (respondent No. 2 herein), under a registered sale deed, dated 19th Bahman 1355 fasli. Bangaramma was then a widow. The vendee wanted to be sure of her title. Aleti Raghaviah who is said to be the brother of the deceased husband of Bangaramma, assured him of her title and showed his willingness to execute an indemnity bond. He accordingly executed a bond in his favour, stating therein that on assurance given by him that he will hold himself liable, Mohammed Ibrahim (the plaintiff) had purchased the house and that he, therefore, binds himself by the stipulation, that in case any dispute arises in respect of the title and ownership of the said house and as a result the house goes out of the possession of the purchaser, it will be open for the vendee to enforce this liability both against his person and his property for the purchase money, damages and the costs incurred by him. Sometime thereafter, disputes did arise between Bangaramma and her step-son, who brought a suit for partition of the joint family property. Bangaramma raised a plea in vain that, the house in question was her stridhana property. Mohammed Ibrahim was made a party to that suit and summonses were issued to him. At about the time when the summonses were served on him, or sometime thereater, Mohammed Ibrahim resold the house to Sukharani Bai, third respondent herein for a sum of Rs. 5,700 under a registered sale deed dated 10th Aban, 1355 fasli. As a result of the decree against Bangaramma in the partition suit, Sukharani Bai was dispossessed. She then claimed refund of the purchase amount from the plaintiff and brought her suit on 17th September, 1954, against Mohammed Ibrahim. Mohammed Ibrahim in turn, brought a suit against his vendor, Bangaramma, his surety and Sukharani Bai. The suit of Sukharani Bai was, however, stayed for sometime pending disposal of the plaintiff's suit. Bangaramma remained ex parte. Raghaviah resisted the claim of the plaintiff on the ground that the bond he had executed is inadmissible in evidence for want of proper stamp and for non-registration, that he is not bound by the Judgment and Decree in the partition suit, that Babu Rao who brought the suit against Bangaramma had no title to the property as he was a son born to a ' mistress ', that Mohammed Ibrahim failed to contest the suit and in spite of service of summonses remained ex parte that this conduct of his in not resisting the suit and not even informing Raghaviah about the same must be fatal to his case and that, above all, Mohammed Ibrahim had derived benefit under the transaction by the re-sale of the property and unless and until he repays the amount that he had got under the sale deed he has no right to sue and that the suit is therefore premature. On these pleadings, several issues were raised. The learned Sub-Judge disposed of the case as a result of his decision on the legal issues themselves. He held that the document executed by Raghaviah in favour of the plaintiff was an indemnity bond and it was sufficiently stamped, that it did not require registration, that the terms of the said bond were clear and unambiguous, that the executant had undertaken to pay back the purchase-money, damages and costs, if any incurred by the purchaser on being dispossessed as a result of dispute with regard to any defect in title in the property and that as this condition is satisfied, the suit must be decreed against him. Thus he gave a decree both against the vendor and the surety.

(2.) It is contended in this appeal, on behalf of the surety, that since the plaintiff has not paid back the sale amount due to Sukharani Bai, his suit is liable to be dismissed, being premature. For this proposition, reliance has been placed on section 125 of the Indian Contract Act, which reads thus :

(3.) But, it must be borne in mind that, what the plaintiff has claimed is only that amount which he had paid to the vendor and also the costs which he had incurred for registering the sale deed. He has not claimed any other sums by way of damages or costs to which clauses (1) and (2) of section 125 may apply. The liability of a surety or of the person who has agreed to indemnify has to be determined on the actual language and terms of the bond. The agreement as entered into in the bond has to be enforced as it is. The bond in this case is specific that, if any dispute arises and on account of defect in title the vendee is dispossessed, the appellant surely will be liable for the purchase amount, damages and costs. There can be no doubt that, as a result of the decree, the plaintiff's successor-in-interest had to part with the property and this dispossession was due to a dispute relating to the defect in title of Bangaramma. It is not disputed that the right the plaintiff had under this bond could enure for the benefit of his successor-in-interest. The learned counsel on being questioned specifically in this behalf has even conceded this position. Then, there can be no difficulty in holding that on account of the dispossession, the appellant became liable under the terms of the document for the purchase-money and costs. But, as already observed, the contention raised by the learned counsel for the appellant is that, the right of the plaintiff is enforceable only on the return by the plaintiff to his successor-in-interest of the sale amount that he realised from her. 'For this, he further relies on Venkamma v. Sanyasayya, A.I.R. 1938 Mad. 422 and Shankar Mmbaji v. Laxman Supdu, A.I.R. 1940 Bom. 161.