P BABA SAH Vs. HAJEE MOHAMED AKBAR SAHIB

JUDGEMENT

(1.) The substantive point for decision in City Civil Court Appeal No. 29 of 1921 is, whether on the date of his purchase under Exhibit IV appellant (4 defendant) had notice of the prior agreement by first defendant to sell the same property to the plaintiff. Plaintiff owns the superstructure on the land bought by appellant under Exhibit IV from defendants Nos. 2 and 3, who in their turn had bought under Exhibit III from first defendant. It is not disputed that plaintiff held an agreement prior to both Exhibits? III and IV from first defendant to sell the land to him.

(2.) Appellant admitted in evidence that at the time of his purchase, he learnt from Exhibit III that the superstructure belonged to plaintiff, and that he made no enquiry of plaintiff under what right he occupied the land. It appears that he made no enquiries whatever, either from his vendors, (e.g., whether they were receiving the ground rent from anyone), or from first defendant their vendor, or from plaintiff, or from the sub-tenants actually in occupation of the superstructure under plaintiff. Such utter absence of reasonable enquiry is either wilful or grossly negligent.

(3.) The general principle of consrtuctive notice in such a case is that notice of occupation (of the property purchased) by a person other than the vendor, which indicates that the vendor is not entitled to present possession, at once puts the purchaser on enquiry as to the interest that occupier holds in the property. The usual case is where the property is physically occupied by tenants, and then the purchaser is, by that occupation itself which puts him on enquiry, in law affected with notice of the interest which these tenants have in the property He is by their occupation not affected with notice of more than the terms on which they hold, including any agreement collateral to their leases, but he is not bound to enquire, nor are they bound to answer to whom they pay rent, so that the purchaser is not in such a case affected with notice of the tenant's lessor's title or rights. This is the general principle laid down in a series of English cases from Daniels V/s. Davison (1809) 16 Ves. (Jun.) 249 : 33 E.R. 10 R.R. 171 onwards, succinctly dealt with in Hunt V/s. Luck (1901) 1 Ch. 45 : 70 L.J. Ch. 30 : 83 L.T. 479 : 49 W.R. 155 : 17 T.L.R. 3. The principle has been embodied in India in Section 27 of the Specific Relief Act and Section 3 of the Transfer of Property Act.