A MADURAI CHETTY Vs. TBABU SAHEB

JUDGEMENT

(1.) In this case the purchasers sued for specific performance and the vendors for the rescission of the contract. Both suits were decided in favour of the purchasers, and the vendors appeal. The house in question stood in the name of Ellammal who, on 10th March 1916, executed in favour of her daughter s son Balasundara Chetti an unregistered document Exhibit I, receipt that she had promised to give his mother the house as a dowry and that the mother had paid Rs. 2,000 and providing that be was to have the house after her (Ellammal s) death. Then on 17th November 1916 she and her husband Madurai Chetty contracted in Exhibit B to sell the house to Melu T. G. Muhamad Oosman Salt & Co., the contract taking the form of a receipt for Rs. 500 which contained the stipulation that "the sale is subject to good title, if the title is found not in order this earnest of Rs. 500 is to be refunded, and they are to return the title deeds."

(2.) On the 28th of December Ellammal got her grandson Balasuadara Chetty to endorse on Exhibit I a release of all his rights under it, In future my grandmother shall enjoy all rights in respect of the said house as before. I have no right whatever." It appears from the oral evidence that the purchasers under Exhibit B had come to know of Exhibit 1 and that the Vendors in con-sequence had paid Balasundara Chetty to execute this release. It was not registered, nor was Exhibit I registered, The purchasers subsequent letter Exhibit D shows that the purchasers in addition to the deposit of Rs. 500 made further payments of Rs. 250 and Rs. 750, and we were told that these sums were utilised to induce Balasundara Chetty to endorse a release on Exhibit I. The purchasers then discovered that even before the date of Exhibit I Balasundara Chetty had executed a mortgage of the suit house, and this fact coupled with the recital of Ellammal in Exhibit I that his mother had paid Rs. 2,000 opened up a possibility of a case being set up that the house bad been purchased benami for his mother and had descended to him.

(3.) On 16th February 1917 the vendors Vakil in Exhibit C called upon the purchasers to complete within a week, in default of which their clients would forfeit the deposit and sue for the return of the title-deeds. The purchasers Vakil in Exhibit D, dated 21st February 1.917, replied that the encumbrance certificate had disclosed the existence of the mortgage by Balasundara Chetty and an assignment of that mortgage, and that he had written to the mortgagor, the mortgagee and his assign to let him know what their claims were to the property. He said the delay was due to the vendors not coming forward to set aside the mortgage, and refused to proceed further until they did.