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Madras High Court
Ponnammal vs Pichai Thevan And Ors. on 12 August, 1926
Equivalent citations: AIR 1927 Mad 204
Author: Ramesam


Ramesam, J.

1. The suit was originally by two plaintiffs a brother and a sister and in the plaint it was stated that a decree may be given in favour of the 1st plaintiff who is the only person interested in the amount. The Court below dismissed the plaintiff’s suit.

2. The second appeal has been filed only by the 2nd plaintiff, the 1st plaintiff being made the 1st respondent. It is explained that the vakalat of the 1st plaintiff was not ready and so he had to be made a respondent and not that he does not want a decree. I directed that the 1st plaintiff should be transposed as an additional appellant. It is then ojected by the respondents that the appeal is out of time. Apart from the consideration that where a party is transposed no question of limitation arises, it seems to me that the 2nd plaintiff only is competent to carry on the second appeal. Though ultimately the 1st plaintiff is the person interested in the transactions as the 2nd plaintiff conducted most of them as his agent sometimes not disclosing the principal, I think she is competent to sue and, if she succeeds, to hand over the benefit to the 1st plaintiff. The appeal is, therefore, maintainable.

3. To deal with the merits I would state the facts. . The suit is to recover Rs. 2,207-14-6 claiming to make it a charge on two items of property. These items belonged to the 1st defendant, Defendants 2 and 3 being his sons and the 4th being his grandson. The 2nd plaintiff entered into an agreement with the 1st defendant to purchase two items for Rs. 3,000. In pursuance of this agreement she paid off a prior encumbrance on 22nd September 1912, to one Ramayya Bhagavathar who held a mortgage under a deed dated 12th August 1909, for Rs. 600 over both the said items. The amount paid was Rs.775. It is also found that she paid another amount of Rs. 225 to the 1st defendant. But the plaintiffs never paid the balance of the consideration amount and the sale fell through. To pay off the above-mentioned Rs. 1,000 the plaintiffs borrowed from one Suppa Pandithan. Suppa Pandithan afterwards filed a suit against the plaintiff and Defendants 1 to 4 to recover the amount of Rs. 1,000 with interest and he claimed a charge on the suit properties. That suit was O. S. No. 195 of 1914 on the file of the District Munsif’s Court of Melur. It ended in a decree against the present plaintiffs only and the present piaintiffs had to pay off that amount to Suppa Pandithan. They now sue to recover that amount with interest from Defendants 1 to 4 who had the benefit of the payment. The first item was sold to the 10th defendant in 1916 and the second item to the 5th defendant on 23rd February 1917. The Courts below finding that the 2nd plaintiff who was unable to find the money after the return of the 1st plaintiff from Rangoon in about February 1913, told the 1st defendant that she had no money and consequently she did not want to purchase the land, held that the suit is barred by limitation and that the plaintiffs are not entitled to a charge,

4. Two points arise in second appeal; (1) whether the plaintiffs are entitled to a charge for the said amount; and (2) when did the cause of action for the suit arise? The Courts below assumed that the cause of action arose in February 1913, when the plaintiffs were unable to find the balance of the amount for the sale. But Mr. Sitarama Rao contends that it does not follow from the mere fact that the 2nd plaintiff told the 1st defendant in February 1913, that she was unable to purchase the land that the contract fell through at once. Time is not of the essence in a contract to purchase immovable properties. If the 1st defendant did not rescind the contract at once but continued to keep it alive waiting for the plaintiffs to find the necessary funds the contract would be continuing; similarly it would continue, if the plaintiffs told the 1st defendant that they hoped to raise the necessary funds and requested the 1st defendant to wait for sometime. However, it seems to me, by February 1915, when the written statement of the 1st plaintiff (the first defendant) Suppa Pandithan’s suit was filed the contract certainly fell through. It is not clear to me when between February 1913 and February 1915, the contract really terminated. I therefore, request the lower appellate Court to submit a finding on the question whether the contract was kept subsisting after February 1913 and when it terminated.

5. Further evidence may be adduced. The written statement of the present 1st defendant may be exhibited as it may be of some help. The finding will be submitted within six weeks and seven days for objections.

6. (After the return of the finding the Court delivered the following:)


7. The Sub. Judge has now sent up a finding that the contract was not subsisting even on 30th Sep. 1914, and that probably it must be regarded as having been rescinded even in February 1913. It follows that, if there is no charge, the suit is barred by limitation. This makes it necessary for me to go into the question of charge. Mr. Sitarama Rao contends that, as the plaintiffs paid off the prior mortgage in favour of Rama Bhagavathar they are entitled to a charge. He relies on Syamalarayudu v. Subbarayudu [1898] 21 Mad. 143 Rajah of Vizianagaram v.Rajah Setrucherla Somasekhararaz [1903] 26 Mad. 686 Chamaswami v. Padala Anandau [1908] 31 Mad. 439 Narayanakutti Goundan v. Pechiammal [1913] 36 Mad. 426 Ammani Ammal v. Ramaswami Naidu [1919] 37 M. L. J. 113 and other cases. It is admitted that this is not a case falling under Section 74 of the Transfer of Property Act. Nor does it fall within the exception to Section 101 of the Transfer of Property Act. The plaintiffs will be entitled to a charge, if at all, on considerations of equity either by the principle of subrogation or on such similar principle. It is contended for the appellant that he is entitled to a charge under Section 64 of the Contract Act. It may be conceded that the plaintiffs are entitled under Section 64 of the Contract Act to a refund of the amount paid by them in discharge of the mortgage over the property (the defendants getting the benefit of such discharge). The contract was rescinded by the defendants on account of the plaintiff’s breach and they must restore the benefits received thereunder. But it seems to me difficult to hold that Section 64 has anything to do with the question of a charge, The appellant contends the words “restore such benefit” create a charge. He says:

The defendants’ mortgage was paid off. They must restore the benefit received. Therefore, the plaintiffs are entitled to a charge.

8. I am not able to agree with this reasoning. It cannot be said that the benefit obtained by the defendants is a mortgage and that they must allow the plaintiffs to have the benefit of that mortgage. The only benefit the defendants received was the payment of a mortgage debt, and they must refund that amount. Anyhow I am not able to spell out an equitable charge from the language of Section 61 of the Contract Act and no authority has been cited in favour of such a process.

9. Coming now to the other cases cited: in the case in Syamalarayudu Subbarayudu (1), at the time of payment D was actually the purchaser and he made the payment to protect his interest. It is true that the interest afterwards turned out to be illusory, but it was held he was entitled to a charge. The case in Rajah of Vizianagaram v. Rajah Setrucherla Somasekhararaz (2) was a case of a co-sharer who had to pay land revenue for protecting his share. That is a case governed by well-known principles of law. The case in Chamaswami v. Padala Anandau [1908] 31 Mad. 439 is like Syamalarayudu v. Subbarayudu [1898] 21 Mad. 143. In Narayanakutti Goundan v. Pechiammal [1913] 36 Mad. 426 the plaintiff actually took a mortgage. The objection there was that the mortgagors had no interest except a spes successionis, but it was held that the mortgagors (the daughters) had a reversioner’s interest and would be entitled by subrogation to a charge if they paid the amount, and such charge could be sub-mortgaged to the plaintiffs. I do not think any of these cases can help the plaintiff. The appellant strongly relies on the case in Ammani Ammal v. Ramaswami Naidu [1919] 37 M. L. J. 113. That is also a case of a purchaser from a guardian. When the purchase turned out invalid it was held that he was entitled to a charge for money paid in discharge of a mortgage. It is true these cases show that not only in cases where the person paying off a charge had some interest at the time but also in cases where he had no such interest he may be entitled to a charge if he bona fide thought he had an interest to protect.

10. In Syamalarayudu v. Subbarayudu [1898] 21 Mad. 143 Chamaswami v. Padala Anandau [1908] 31 Mad. 439 Ammani Ammal v. Ramaswami Naidu [1919] 37 M. L. J. 113 and Bhagwati Prasad v. Radha Kishen Sewak Pande [1893] 15 All. 304 the plaintiffs had deeds of conveyance in their favour which were afterwards found to be invalid. In the present case, the plaintiffs had no interest at the time of payment. They only entered into a contract to purchase the property and the money they paid to discharge the mortgage was only part of the consideration they had to pay for the sale. It was really what would have become of the vendee’s money if the contract had been carried out. See Har Shyam Chowdhuri v. Shyam Lal Sahu [1916] 43 Cal. 69. In this respect the case resembles the decison in Govinda Padayachi v. Lokanatha Aiyar A. I. R. 1921 Mad. 51 and the case in Har Shyam Chowdhuri v. Shyam Lal Sahu [1916] 43 Cal. 69. The observations of the Privy Council in Mohesh Lal v. Mohant Bawan Das [1883] 9 Cal. 961 throw similar light (see also the observations of Mukerjee, J., in Surjiram Marwari v. Barhamdeo Persad [1905] 2 C. L. J. 288. If in this case the contract was not carried out on account of the default of the defendants it may be that the plaintiffs would be entitled to a charge. It is on account of their own default that the contract was not completed. It is simply a case where plaintiffs paid a part of the consideration but not the rest and though they are entitled to a refund of the part payment made they are not entitled to a charge. The second appeal fails and is dismissed with costs to be shared half and half by the vendors and their alienees. Appeal dismissed.

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