PURANAM EGNA NARAYANAYYA Vs. DESABOYINA VENKATAYYA

JUDGEMENT

(1.) The petitioner in this revision petition entered into an agreement with one Seshayya to purchase land, paid the price and got a sale deed executed . When he was about to get the sale deed registered he was approached by the first respondent who himself wanted a conveyance of the same land. There was an agreement whereby the petitioner undertook to get the land conveyed by Seshayya to the first respondent and on that date the first respondent executed in favour of the petitioner a promissory note and paid a certain sum in cash. On the same day at the instance of the petitioner Seshayya executed a registered sale deed in favour of the first respondent and on the following day 11 August, 1921, the first respondent executed a mortgage to the petitioner to cover the amount embodied in the promissory note of the previous day. In 1937 the petitioner sued on his mortgage and on 6 November, 1937, he got a preliminary decree which was followed on 11 March, 1938 by a final decree for Rs. 2,575 and odd.

(2.) When Madras Act IV of 1938 came into force the first respondent applied under Section 19 of that Act to scale down the decree debt. The application was resisted on the ground that the debt in question was a liability for which a charge is provided under Section 55(4)(b) of the Transfer of Property Act and therefore by the operation of Section 10(2)(ii) of Act IV of 1938 was excluded from the scaling down provisions. This plea was rejected by the lower Court and the petitioner seeks to revise that order. The only question therefore is whether the liability covered by the mortgage is one in respect of which a charge is provided under Section 55 (4)(b) of the Transfer of Property Act.

(3.) Section 55(4)(b) provides that the seller is entitled to a charge upon the property in the hands of the buyer for the amount of the purchase money or any part thereof remaining unpaid. Is the petitioner in this case a seller and is the money it respect of which this mortgage was executed, unpaid purchase money, in the hands of the buyer? It seems to us quite clear that the answer to both these questions must be in the negative. The petitioner was not the seller of the property for he had no interest which he could convey. The title remained with Seshayya at the time of the transfer to the first respondent and though Seshayya was under an obligation to the petitioner, that obligation did not have the effect of vesting any title in the petitioner. So much follows from Section 54 of the Transfer of Property Act which lays down that a contract for the sale of immovable property does not of itself create any interest, in or charge on such property.