GURMUKH SINGH Vs. AMAR SINGH

JUDGEMENT

(1.) These two appeals (R.S. As. Nos. 196 and 204 of 1966) arises out of suits filed by vendees of land from a landowner for return of the purchase money. The plaintiffs in the two suits purchased the suit-lands from Mukand Singh under separate registered sale-deeds. These lands were surplus lands of the landowner. The tenants who were in possession of the lands filed applications under the Pepsu Tenancy and Agricultural Lands Act for the grant of proprietary rights in the land. The applications of the tenants were allowed in June, 1960. The vendees filed appeals to the Collector and revisions to the Financial Commissioner which were all dismissed. The vendees then filed the present suits for return of the purchase money paid by them. The suits were decreed by the trial Court but were dismissed by the lower appellate Court on two grounds :-

(2.) There is absolutely no substance in the reasoning of the learned District Judge that there was no question of the lands being declared as the surplus area of the landowner when the lands were in the possession of the tenants. Even a bare reading of the provisions of the Pepsu Tenancy and Agricultural Lands Act makes it clear that lands in the possession of tenants could be declared as surplus land of the landowner. Section 32-E, the very provision relied on by the District Judge refers to the surplus area of a tenant which is not included within the permissible limit of the landowner, which clearly implies that tenants could be in possession of the surplus area of the landowner. The learned District Judge was also clearly in error in thinking that the vendees were not entitled to ask for a refund of the State Government. A reference to the proviso to Section 32-FF shows that any person who has received any advantage under such transfer or disposition of lands shall be bound to restore it, or to make compensation for it, to the person from whom he received. The landowner who transferred his right s despite Section 32-FF is, therefore, bound to refund the consideration paid by the vendee. The present cases may not be strictly covered by the proviso to Section 32-FF as the transfers in favour of the vendees were defeated by the acquisition of proprietary rights by the tenants under Chapter IV of the Pepsu Tenancy and Agricultural Lands Act. The transfers were not defeated as a result of the application of Section 32-FF though they would have been so defeated if the tenants had not acquired proprietary rights under Chapter IV. We are, therefore, concerned with simple cases of transfer by landowners where such transfers have been defeated by the acquisition of proprietary rights by the tenants on the land. In such situations, there is no reason for holding that the implied covenant of title under Section 55(2) of the Transfer of Property Act cannot be enforced against the landowner and no reason why he should not be asked to refund the sale consideration received by him. The learned counsel for the respondents, however, urged that the vendees were well aware of the existence of tenants on the lands purchased by them and, therefore, they were not entitled to enforce the implied warranty of title. The answer to this contention is to be found in the decision of a Division Bench of this Court in Sohan Lal V. Bal Krishan, 1960 AIR(P&H) 275where it was held that the implied warranty of title under Section 55(2) of the Transfer of Property Act operated irrespective of the question whether the buyer had or had not notice of the infirmity of the title of the seller. I am bound by the decision of the Division Bench. A similar view was expressed by the Madras High Court in a series of cases all of which have been referred to in Mahomed Ali V. Venkatapathi, 1920 AIR(Mad) 634

(3.) The real question for consideration is that of limitation. The learned counsel for the appellant contended that Article 116 was applicable while the learned counsel for the respondents strenuously contended that Article 97 was applicable. The learned counsel for the respondents argued that Article 116 of the Limitation Act, 1908 , applied only to cases where there was a defective title from the beginning but that Article 97 would apply to cases where there was no such defect of title but the title of the vendee was defeated by the subsequent acquisition of rights by a third party under a statute. The submission has no force since the title of the vendor was defective from the beginning as it was subject to the statutory right of the tenants to acquire proprietary rights in the land. The right of the tenants to acquire proprietary rights was a pre-existing right and the acquisition of the proprietary rights by the tenants was a breach of the warranty of title. Apparently, the learned counsel for the respondents had in mind decisions where it has been held that Article 62 was applicable to cases of void contracts and Article 97 to voidable contracts. Neither of these Articles is applicable where there is a breach of the implied covenant of title under Section 55 of the Transfer of Property Act. To such cases it has been held that Article 116 alone is applicable. In Arunachala V. Ramaswamy, 1915 38 ILR(Mad) 1171 Sigamani Pandithan V. Munibadra Nainar, 1926 AIR(Mad) 255 and Mahomed Ali V. Venkatapathi, the Madras High Court has consistently taken the view that a covenant of title must be implied in every contract of sale and, therefore, a suit by a purchaser for refund of purchase money on his failure to obtain possession of the property transferred must be considered to be a suit for "compensation for breach of contract in writing registered" and, therefore, Article 116 of the Limitation was applicable. The same view was expressed by other High Courts also. See Multan Mal V. Budhu Mal, 45 ILR(Bom) 955 Mohammad Sidiq V. Muhammad Nuh, 52 All. 604.