RAM RAGHUBIR LAL Vs. UNITED REFINERIES (BURMA) LIMITED

JUDGEMENT

(1.) On 15 December 1924, respondent 1 (hereinafter referred to as the company) agreed to sell to the firm of Kashi Vishwanath and Co. or their nominees or assigns, certain immovable property, in the Hanthawady District of Burma, comprising 330 acres of land and the buildings and plant of an oil refinery erected thereon. The members of the said firm were the first two appellants before the Board and a third partner now deceased and represented by appellant 4. The consideration for the sale was set out in the agreement and included the sum of Rs. 2,00,000, which was to be paid three months after the registration of the sale-deed. On 15th January 1925 the sale-deed was executed by the company as vendors, the conveyance being made by the direction of the firm to appellant 3 as their nominee. Neither the firm nor any member of it was a party to the deed, but the direction to convey to appellant 3 was recited therein, and a declaration to that effect under the signature of the firm was appended thereto. It was also recited that in respect of the Rs. 2,00,000 a joint and several promissory note had been executed by the firm and appellant 3 to secure payment of that sum three months after registration. The sale deed was registered on 17 January 1925, but the Rs. 2,00,000 was not paid, and on 22-09-1922 appellant 3 entered into an agreement for the resale of the property to respondent 2. This sale has fallen through, and for the purposes of the present appeal respondent 2 who has not appeared and against whom no relief is sought may be disregarded.

(2.) On 20 March 1928 the company instituted a suit in the District Court of Hanthawady against the partners in the firm and the purchaser (appellant 3), praying a decree for Rs. 2,35,000, being the Rs. 2,00,000 above referred to with interest to date, and in default of payment for sale of the property with a personal decree against the defendants for any deficiency. This was based originally on an alleged equitable mortgage of the property by deposit of title deeds, but by subsequent amendment it was supported by claiming a charge for unpaid purchase money. Various defences were raised to the suit, but the only question of substance now material is as to the personal liability of members of the firm, i. e., appellants 1, 2 and 4. The claim to an equitable mortgage was not established, but both Courts in Burma affirmed the charge for Rs. 2,35,000 in respect of unpaid purchase money, and the propriety of this decision has not been seriously disputed before the Board. The question of the promissory note has also gone out of the case, as it was found not to be properly stamped and therefore inadmissible in evidence. The only other question raised on the appeal was as to limitation and it will be dealt with later. The District Judge thought it sufficient to pass a decree in favour of the company merely declaring that it had a vendor's leni over the property in suit and awarding costs against the defendants. From this decree an appeal was taken to the High Court by the present appellants, and the company filed cross-objections claiming inter alia sale of the property and a personal decree for any deficiency. After a remand and a further finding by the District Judge on a question not now material, the learned Judges of the High Court delivered their final judgment on 10 September 1930. They affirmed (as already stated) the finding of the District Judge that the company had a vendor's lien over the property for the Rs. 2,00,000 with interest, but they set aside his decree as insufficient, and substituted a decree in the company's favour for "(1) Rs. 2,35,000 (Rupees two lakhs and thirty-five thousand only) with further interest at 6 per cent, per annum from the date of suit to the date of realization, charged on the property in suit ; (2) for the sale of the said property should the amount of the decree not be paid ; (3) for a declaration that the respondent-plaintiff company's charge over the property takes priority over any interest of appellant 4 defendant 4company in the said property; and (4) for a personal decree against appellants 1,2, 3 and 5defendants 1,2, 3 and 5for any portion of the decretal amount which may not be satisfied out of the sale proceeds of the property."

(3.) They also gave the company their costs in both Courts against the same parties. It has been brought to their Lordships' notice that under S. 100 T. P. Act 1882, read, with O. 34, R. 15, Civil PC, the Court should have passed a preliminary decree for sale as in a suit on a mortgage, but no objection has been taken to the decree on this score, and as their Lordships are informed that the property has already been brought to sale, they do not think it necessary to lay stress upon this apparent irregularity. The only part of the decree to which serious objection is taken by the appellants is sub-head (4), whereby a personal liability for the anticipated deficiency is laid upon all the present appellants. It is contended that though this order may be justified (subject to the question of limitation) in the case of appellant 3, the nominee purchaser, there is no such right against the other appellants who represent the firm of Kashi Vishwanath and Co.