MT AKHTAR JAHAN BEGAM Vs. HAZARI LAL

JUDGEMENT

(1.) The point raised in this case is very simple. The present defendants are the heirs of the vendor. They are not themselves the fraudulent vendors, but it is a fallacy to suppose that if the suit were based upon fraud, they would not be responsible for the loss caused by the fraud on the buyer (the plaintiff); but it is not based upon fraud. The deceased vendor sold the property to one Pearey Lal and then in 1912 sold it to the present plaintiff. If anybody says that is not fraudulent conduct, he does not know the meaning of the word. It is sufficient for us that the District Judge has believed that he cheated the purchaser. The purchaser now, having been deprived of the property for which he has paid, not unnaturally seeks to recover the loss which is the price and interest and costs. If he could not do so in this country, the law would be worthy of the description given in a well-known romance, but it is not the law in this country. He is entitled to recover the loss unless a contrary intention appears by the contract. It is not a suit in tort or fraud, but a contrary intention does appear by the contract and the defendants rely upon it. This is really their only possible ground of success. The contrary intention is that the vendor in the contract obtained a promise from the purchaser that he (the vendor) would not be responsible for any loss or defect of title. That clause merely destroys the warranty, but warranty of title is irrelevant where fraudulent conduct is established, No clause of that kind can possibly avail a man or anybody setting it up through him to protect himself against the consequences of his own cheating. To do so would be permitting the defendants to set up their own fraud and would be against public policy. It is surprising that anybody should entertain any doubt on the subject.

(2.) The decision is clearly right and the appeal must be dismissed with costs. Ashworth, J.

(3.) In this case the defendant after selling the property to a third person sold it to the plaintiff and it was agreed in the sale-dead that the sailer should not be responsible to the buyer for loss caused to the latter if, by reason of invalidity of the seller's title, the buyer were deprived of the property (see 8. 109, Indian Contract Act (9 of 1872). The finding of the lower appellate Court was that the buyer would never have bought if he had known that the seller had no title and this finding was based on the consideration that no one would buy something which he knows his vendor cannot convey. This was a finding of fact and one supported by admissible evidence. The conduct of the seller, therefore, must be held to have amounted to the active concealment of a fact by one having knowledge of it from one who had no knowledge and constituted fraud: see definition of fraud in Section 17, Contract Act.) Consent to the transfer was thus caused by fraud (see Section 19). The principles of the Contract Act are applicable to transfers. This is clear on general grounds and because Section 109 and other sections which speak of transfers occur in the Contract Act. The transfer was, therefore, voidable at the option of the buyer ( Section 19). The agreement of indemnity by the buyer under Section 109 was voidable for like reason, and the seller cannot set up that agreement. The plaintiff was, therefore, entitled under Section 65, Contract Act, to recover his money.