HARILAL DALSUKHRAM SAHIBA Vs. MULCHAND ASHARAM

JUDGEMENT

(1.) The plaintiff-appellant brought this suit, against the defendant for a refund of Rs. 19,000, the amount of consideration that he paid for the purchase of a field bearing Survey Nos. 108-1 and 108-2 near Ahmedabad, with interest thereon. This purchase was made on September 5, 1919, under a registered conveyance, and he had been duly placed in possession. But in a suit of 1920 brought by cue Somnath Motilal for redemption of a mortgage on No. 108-2, Somnath obtained a decree on the ground that the defendant's vendors had no right of ownership such as the defendant purported to pass on to the plaintiff, but were only in the position of sub- mortgagees. This No. 108-2 had become vested in three daughters of one Narsi, who mortgaged it in 1889 for Rs. 900. The plaintiff's title to No. 108-2 thus became defective. He alleged that he had bought the land in order to build on it and that he was entitled to a rescission of the transfer and for a refund of the amount he had paid, The defendant disputed the right of the plaintiff to get back the whole consideration on various grounds; but his main defence may be said to be based on a subsequent transaction, whereby on July 23, 1924, he bought Somnath's rights in 108-2 (Ex, 65). The decree that Somnath had obtained in the suit of 1920 had in the meanwhile been confirmed on appeal. The plaintiff did not appeal, and applications for execution had been made in respect of Somnath's decree; this was why he brought the suit of 1922. In September 1924, the defendant's pleader drew the Court's attention to the sale deed that he had obtained from Somnath and urged that the plaintiff's suit should not, in consequence, proceed. The plaintiff contended that it made no substantial difference. The Subordinate Judge held that there was a defect of title in regard to No. 168-2, which the defendant either knew or should have known and which he concealed from the plaintiff at the time of the transaction of 1919. On the other hand, he held that the plaintiff himself could have discovered this defect had he made a sufficient investigation of title. But he did not find it necessary to decide expressly whether on the original cause of action the plaintiff would have been entitled to the relief he sought; and be held that in view of the defendant's subsequent acquisition of title under his purchase from Somnath the plaintiff ceased to have any case for rescinding his conveyance and for the return of the sale-price, unless the defendant refused to convey to him the requisite title. On the other hand, he found that there was still some defect in the quality of the title acquired by defendant from Somnath, because the latter had succeeded in his litigation as being the heir of Diwali, one of the three sisters I have mentioned, and there was the possibility that heirs of the other two sisters on their husbands side might come forward and establish rights in regard to this piece of land. He held that the plaintiff was entitled to damages for this flaw in the title, and he awarded a sum of Rs. 1,000 on that account. He further held that the plaintiff was also entitled to have the benefit of the indemnity clause which the defendant had escured from Somnath in his deed of purchase, and directed that this should be assigned $ by the defendant to the plaintiff , and also that the defendant should personally indemnify plaintiff against future disturbance by heirs of the other two sisters, His decree allowed defendant two months to comply with these conditions about conveyance to the plaintiff, as well as the payment of Rs. 1,000 and full costs of the plaintiff's suit. If that was done then the plaintiff's con-veyance, Exhibit 42, was to stand affirmed and continue to operate. If the defendant failed to act as aforesaid, it was to stand rescinded and the defendant was to pay Rs. 19,000 to the plaintiff and the plaintiff's costs of the suit. The defendant was in that case to obtain a re-con veyance at his own expense of the two pieces of land and to recover their possession from the plaintiff. The plaintiff has come in appeal, and his main contention is that the lower Court erred in compelling him to accept the subsequently acquired title of Somnath. He says he is entitled to have his conveyance rescinded, as prayed for in the plaint, and to be repaid the full amount of Rs. 19,000. Secondly, he contends that, if he is not entitled to that, the damages awarded are insufficient. The defendant has also raised cross-objections with a view to getting the direction as to the payment of Ka. 1,000 set aside.

(2.) The main ground on which the case for rescission of the conveyance is put is the duty of a seller (as laid down in Section 55(1)(a) of the Transfer of Property Act) to disclose to the buyer any material defect in the property of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover. This has to be read with the last paragraph of Section 55, which treats an omission to make such disclosure as fraudulent. Mr. Thakor also contends that, apart from this particular provision about fraud, there was misrepresentation on the part of the defendant which would entitle him to avoid the contract under Secs.18 and 19 of the Indian Contract Act; and thirdly, he relies upon the contention that there was a mutual mistake of facts which would make the agreement void under Section 20. The last contention can, I think, be shortly disposed of. There may, of course, be some defect that is unknown both to the purchaser and to the seller, whereby the contract is so fundamentally affected that there is good ground for holding the contract void because of a mutual mistake of fact. A case of that kind will be found in Nursing Dass Kothari V/s. Chuttoo Lall Misser (1923) I.L.R. 50 Cal. 615. But in the present case, there is clearly no ground for that the defect in title was not within the knowledge of both the plaintiff and the defendant. The Record of Rights entry (Exhibit 45), which was framed prior to the defendant's purchase, on August 1, 1918, clearly shows this plot 108-2 as held by defendants predecessors-in-title only under a mortgagee right; and having regard to the defendant's admission that he had actually taken the Record of Rights in his own hands and seen it, I think there can be no reasonable doubt that he was aware of this particular entry. It is most improbable that he could have effected his purchase without seeing exactly what this entry was, and his equivocation upon this point leaves little doubt that he saw it. That being so, whether or not the plaintiff was aware of this entry and this defect in title, it is clear that there was no mutual mistake which would bring the case under Section 20 of the Indian Contract Act. Therefore, we come to the two other contentions as to fraud and misrepresentation.

(3.) It is quite clear that, if the plaintiff could with ordinary care have discovered that there was this defect of title, then he cannot plead that there was a failure on the part of the defendant to comply with the obligation laid down in Section 55(2)(a). There has been considerable argument as to whether the plaintiff knew, or could have discovered, that there was such a defect. The Subordinate Judge has held that he could have discovered the defect, if he had sufficiently investigated the title. Now that in regard to agricultural lands the Record of Rights affords such an easy means of investigating questions of title about particular pieces of land, there is clearly not the same difficulty that there used to be about discovering defects of title with reasonable care. Admittedly, the plaintiff did see the mutation entry Ex, 44, which as regards plot No. 108-1 showed the defendant as the occupant under his sale deed of August 1918; but the duty of a prudent purchaser does not rest with merely seeing a mutation entry, if it does not cover the whole of the land he is purchasing. Moreover the plaintiff is a person of intelligence, who has been a member of the Bombay Legislative Council. I think it would be absurd for this Court to say that in the circumstances he ought not to have ascertained what were the entries in the Record of Rights about the two pieces of land; and had he done so he would have seen the entry about No. 108-2 and the mortgagees in possession. That would have put him on enquiry as to what these mortgagee rights were. It may be that the defendant had not given him his title deeds. But that does not affect this particular point. With ordinary care he should have pinsued his investigation beyond the point he says he did. Both under Section 55(1)(a) and the definition of "notice" in Section 2 of the Act there was a want of care or a wilful abstention from an enquiry or search which the plaintiff ought to have made, so that, in any opinion, the plaintiff is not entitled to say that there has been fraud on the part of the defendant in regard to this matter.