W SRINIVASAVARADACHARIAR, HIS SON AND LEGAL REPRESENTATIVE,W KRISHNAMACHARI Vs. DASU REDDIAR ALIAS VEERASWAMI REDDIAR

JUDGEMENT

(1.) The appellant's father sued in the Court of the Subordinate Judge of Chingleput to recover the sum of Rs. 2,30,000, the amount of the damages which he alleged he had suffered as a result of respondent l's default in fulfilling his obligations under a contract for the sale of land, and in the alternative, for the recovery of Rs. 27,500 on the basis that there had been failure of consideration to this extent. The plaintiff died during the pendency of the suit which was continued by the appellant. The Subordinate Judge held that defendant 1 was in default and that a suit in damages lay, but he found that no loss had in fact been sustained by the plain-tiff. He rejected in its entirety the alternative claim. On 14 December 1923 the plaintiff agreed to sell for the sum of Rs. 82,750 his rights in the shrotriem villages of Koduvur and Seekanankuppam. The plaintiff's son was a party to the agreement. The agreement provided that the purchaser should pay to the vendor by 14 January 1924, a sum of Rupees 9000 and a further sum of Rs. 5000 within ten days from the date of the registration of the conveyance. The purchaser was to retain the balance of the consideration for the purpose of discharging the plaintiff's liabilities to his creditors. The agreement did not set out a list of the debts, but these were detailed in a letter written on 10 January 1924 by the plaintiff to defendant l. The liabilities amounted to Rs. 68,689 of which Rs. 29,289 was then due to one A. N. Rangaswami Ayyangar, to whom the plaintiff had mortgaged his rights in these two villages as well as his rights in the village of Vedavakkam and a house which he owned at Conjeevaram. The letter contained a demand for the fulfilment of the contract of 14 December I923.

(2.) The plaintiff and his son failed to execute the conveyance of the properties sold to defendant l, who instituted a suit (O.S. No. 1 of 1924 in the Court of the Subordinate Judge of Chingleput) for a decree for specific performance. This resulted in a compromise decree being passed on 29 April 1924. The decree provided that the consideration for the sale was still to be the sum of Rs. 82,750, but made certain changes in the contract. Defendant 1 was to pay to the plaintiff and his son the sum of Rs. 12,500 on or before 2 May, 1924 and Rs. 11,500 before 10 June 1924. He was to retain the balance of the money in his hands for the purpose of paying off the creditors, who were named and their debts specified. The sum retained was more than sufficient to pay off all the creditors. The excess was Rs. 7250. Clause (g) of para. 2 of the decree related to the payment to be made to Ranga-swami Ayyangar and as this provision is of special importance we will set it out in full: That as the suit properties and the other properties belonging to the defendants have been mortgaged to Mr. A. N. Rangaswami Ayyangar residing at Trivellore the plaintifi shall, for the purpose (of payment) to the aforesaid mortgagee retain with him a sum of Rs. 27,500 (Rupees Twentyseven thousand and five hundred) from the sale amount. If it is found that an amount in excess of the sum so retained has to be paid to the aforesaid Rangaswami Ayyangar on 14 December 1923 the date of the suit agreement, the defendants shall without reference to the plaintiff pay such amount, if default is made (in such payment) and any loss should occur to the plaintiff thereby the defendants should make good the same. If the plaintiff does not pay the amount so retained and if loss should occur to the defendants (thereby) the plaintiff shall make good such (loss) to the defendants; that if the defendants have to pay a lesser amount to the aforesaid Rangaswami Ayyangar than the amount so retained and mentioned above the plaintiff shall pay to the defendants such difference (of the amount). The decree further provided that the conveyance should be to defendant 1 or at his option to him and defendant 2. On 22 March, 1926, on the directions of defendant 1 the plaintiff and his son conveyed the Koduvur properties to defendant 1 and the Seekanankuppam properties to defendant 2. The consideration for the conveyance to defendant 2 was stated to be the sum of Rs. 32,000 and it is common ground that defendant 2 discharged to this extent the plaintiff's liabilities. Defendant 1 fulfilled his obligations, except in respect of the debt due to Rangaswami Ayyangar. Only the sum of Rs. 8000 was paid to Rangaswami Ayyangar and this came out of the moneys provided by defendant 2. On 31 July 1933 Rangaswami Ayyangar filed a suit (O. S. No. 39 of 1933) to enforce his mortgage and on 5 December 1934 he obtained a decree for rupees 52,691-2-9. The difference between this sum and the Rs. 29,289 represented the accumulation of interest. In execution of the decree the properties mortgaged were sold on 18 November, 1936. The Koduvur properties were purchased by defendant 4 for Rs. 10,502. He also bought the Seekanankuppam properties. The price paid for these properties was rupees 16,500. The decree-holder bought in the Vedavakkam properties for the sum of Rs. 7501 and the Conjeevaram house for Rs. 3001. The total amount realised by the sale was Rs. 37,504.

(3.) It was in these circumstances that the plaintiff instituted the suit which has given rise to this appeal. Numerous issues were raised in the trial Court; but in this Court the questions have been confined to (1) whether the plaintiff is entitled to recover from defendant 1 Rs. 19,500, the amount which he failed to pay to Rangaswami Ayyangar, (2) whether he is entitled in the alternative to damages for defendant 1's default, and (3) whether the suit is barred by the law of limitation. The plea that the plaintiff is entitled to the Rs. 19,500 has been advanced first in this Court, as it is now conceded that if his claim is to be one in damages the decree will be for a smaller sum. As we have already indicated, defendant 1 retained in his hands more than sufficient to pay off all the creditors and he had no excuse for failing to pay Rangaswami Ayyangar the amount due to him. He could not, of course, be compelled to refund to the plaintiff this part of the purchase consideration while Rangaswami Ayyangar's mortgage on the Koduvur and Seekanankuppam properties remained outstanding, but it is no longer outstanding as the properties have been sold under the decree obtained by the mortgagee. Defendant 1 is not now in the position to make a payment to Rangaswami Ayyangar and consequently the plaintiff says that there has been a failure of consideration to the extent of Rs. 19,500, the difference between the Rs. 27,500 which defendant 1 had to pay to the mortgagee under the compromise decree and the Rs. 8000 which was paid to him on account.