NAVAMANI NADAR Vs. VEDAMANICKA NADAR (DECEASED)

JUDGEMENT

(1.) The question in this petition is one of limitation. The suit was dismissed by the learned Subordinate Judge, of Tuticorin on the ground that it was barred under Art. 111 of the Limitation Act as one for unpaid purchase money personally from the purchaser brought more than 3 years after the date of the sale. The facts are as follows. The plaintiff's father sold to the defendant on 28 April, 1919, for Rs. 500 a portion of the property which had been mortgaged by the vendor to a third party prior to the sale. The consideration of Rs. 500 was made up as follows: "Rs. 312-0-0 being the amount reserved with you (purchaser) in order that you (purchaser) may redeem the hypothecation executed by me; Rs. 88-0-0 received in cash and Rs. 100-0-0 to be paid before the Registrar, total Rs. 500." The purchaser paid Rs. 188 and took possession of the property. He did not pay the amount of the hypothecation to the third party who therefore brought a suit in 1924 impleading the mortgagor-vendor and purchaser-defendant and having obtained a decree sold the whole of the mortgaged property in execution on 29 October, 1926, including the property which was in the possession of the mortgagor as well as that which was sold to the defendant. This suit was brought on the 4th December, 1926, for Rs. 738-0-7 made up of Rs. 312 with interest thereon.

(2.) The Lower Court relied upon Chunilal V/s. Bai Jethti (1897) I.L.R. 22 Bom. 846 in support of its view that Art. 111 governs the case and distinguished the decision in Seshachala Naicker V/s. Varadachariar (1901) I.L.R. 25 Mad. 55 : 11 M.L.J. 318 which pointed out that where a contract to sell is embodied in the deed of sale the Art. applicable would be Art. 116. I think Art. 111 has no application to the present case. That Art. governs suits- for unpaid purchase money payable to or to the order of the vendor under an agreement to sell and, as the third column shows, is independent of rights arising by the deed of sale because the terminus a quo is the date fixed for completing the sale or the date of acceptance of the title whichever is later. The present suit is not brought on any agreement to sell; nor, on the terms of the sale deed, which we may suppose contains the terms of the agreement to sell, is the amount sued for payable to or to the order of the vendor. Chunilal V/s. Bai Jethi (1897) I.L.R. 22 Bom. 846 related to a parol sale of the year 1890 when the Transfer of Property Act had not been extended to the Bombay Presidency. The sale was for cash to be paid to the vendor, but instead of paying cash the purchaser signed an acknowledgment in the vendor's account book. It was held that the sale was completed and the title accepted more than three years before the suit. In the first place there was no registered sale deed in that case and in the second the whole of the consideration was payable in cash to the vendor. As pointed out in Seshachala Naicker V/s. Varadachariar (1901) I.L.R. 25 Mad. 55 : 11 M.L.J. 318 where the contract to sell is embodied in a registered deed of sale, the unpaid vendor can rely upon Art. 116 which allows six years from the date of breach. But the difficulty in the present case is that even six years from the date of the sale deed will not save the suit. It is therefore argued that the date of breach in a case where the purchaser undertakes in the sale deed to pay part of the purchase money to the vendor's creditors, secured or unsecured, is not the date of the sale deed but some later date, which, is put in some cases as a reasonable time after the sale deed, in others as the date of demand and refusal, and in still others, as-the time when the vendor is himself compelled to pay the creditors whom the purchaser has defaulted to satisfy. Another line of reasoning which favours the postponement of the date for bringing a, suit by the vendor is that where the purchaser agrees in a registered deed of sale to satisfy a mortgage debt or other debt of the vendor with part of the purchase money, there is implied in that agreement an agreement to indemnify the vendor against losses which may be caused by action taken by the creditors on the default of payment by the purchaser and such an agreement to indemnify is broken only when the vendor is compelled to pay the creditors himself or his property is sold.

(3.) It is curious that no decision of our own Court directly dealing, with this topic was cited. In Raghunatha Chariar V/s. Sadagopa Chariar (1911) I.L.R. 36 Mad. 348 : 21 M.L.J. 983 it was held that in a transfer (of two decrees), the consideration for which was that the transferee should pay the transferor's creditors, the transferor could sue the transferee for the money, even though the transferor himself had not paid off the creditors, on the transferee's default to do so within a reasonable time, but that the suit can only be for the consideration for the sale which the vendee failed to pay but not for any further damages which the vendor had not actually, sustained. This implies that where the vendor has actually sustained further damages, by having to pay the creditors himself or by having his property sold, he is entitled to recover the damage actually sustained. I do not consider this decision as prohibiting a suit for the damages actually sustained after it has been sustained, if it is reasonable to infer that a contract of indemnity is to be implied in the circumstances.