HIGH COURT OF CALCUTTA
P. B. Mukharji, H. K. Bose
PANCHANAN PAL - Appellant
Versus
NIRODE KUMAR BISWAS - Respondent
A. F. O. D. 218 Of 1958
Decided On : JULY 29, 1960
CHARGE - Creation - Charge on immovable property - Agreement for sale - Earnest money - Charge created for earnest money - Vendor having no title to the property - Whether charge can be created - Estoppel - Whether doctrine of feeding the estoppel can be applied - Transfer of Property Act (4 of 1882), Ss. 43, 55(6)(b), 100 - Evidence Act (1 of 1872), S. 115.
Fact of the Case:
The plaintiff instituted a suit on 10th September, 1952 against Nirode Kumar Biswas claiming only two reliefs, (1) a declaration that premises No. 1/a, Jadu Nath Sen Lane was a charge for the payment of Rs. 8,333-5-4 and (2) for a mortgage decree for the same amount under Order 34, Rule 4 in Form 5a in Schedule 1 of Appendix D of the Code of Civil Procedure. No other relief was sought. It was a plain and simple suit to enforce a charge on immovable property and for a mortgage decree thereupon.
Finding of the Court:
1. A charge under Section 100 of the Transfer of Property Act expressly says that "where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property." 2. The doctrine of feeding the estoppel has two statutory recognitions. One is contained in section 43 of the Transfer of Property Act and the other is contained in section 18 (b) (a ?) of the Specific Relief Act. Neither of these two sections is applicable in the present case. 3. The principle of law is succinctly stated in Simonds Edition of Halsbury's Laws of Eng-land (Third Edition), Vol. 15, Articles 340 and 341 at pp. 171 to 174.
Issues: 1. Whether a charge can be created on immovable property by a vendor who has no title to the property? 2. Whether the doctrine of feeding the estoppel can be applied to a charge created by an agreement for sale? 3. Whether the defendant is estopped from denying the validity of the charge by virtue of the memorandum of consideration in the conveyance dated 6th October, 1951?
Ratio Decidendi: 1. A charge cannot be created on immovable property by a vendor who has no title to the property. A charge is a right of payment out of the property specified and does not amount to a transfer of interest in the property. If the vendor has no interest in the property, then there can be no such statutory charge. 2. The doctrine of feeding the estoppel cannot be applied to a charge created by an agreement for sale. The doctrine of feeding the estoppel is based on the doctrine of feeding a grant. A grant is of interest in immovable property. Where no grant or transfer of interest in immovable property is involved, it is extremely doubtful whether the doctrine of feeding the estoppel can at all be applied. 3. The defendant is not estopped from denying the validity of the charge by virtue of the memorandum of consideration in the conveyance dated 6th October, 1951. The memorandum of consideration merely states that the purchaser retained a sum of Rs. 7,500/- for the release of the agreement for sale and charge dated 2nd April, 1948. This does not amount to an acknowledgment of the charge or an undertaking to discharge the liability created by the charge.
Final Decision: The appeal is dismissed.
( 1 ) THIS is an appeal by the plaintiff from the judgment and decree of the learned trial Judge dismissing the plaintiff's suit.
( 2 ) THE plaintiff instituted a suit on the 10th September, 1952 against Nirode Kumar Biswas claiming only two reliefs, (1) a declaration that premises No. 1/a, Jadu Nath Sen Lane was a charge for the payment of Rs. 8,333-5-4 and (2) for a mortgage decree for the same amount under Order 34, Rule 4 in Form 5a in Schedule 1 of Appendix D of the Code of Civil Procedure. No other relief was sought. It was a plain and simple suit to enforce a charge on immovable property and for a mortgage decree thereupon.
( 3 ) THE plaint was amended twice by the plaintiff. On the 7th January, 1953, there was an order of amendment whereby another transferee pendente lite was brought in as a second defendant--Sm. Bimala Bala Sashmal--and it was pleaded in paragraph 6a of the plaint that by a registered conveyance dated the 23rd September, 1952, one Surendra Nath Biswas claiming to be the real purchaser conveyed and the first defendant Nirode Kumar Biswas stated in that conveyance to be a benamdar of Surendra Nath Biswas confirmed the sale of the said, premises to the second defendant. No amendment, however, was sought, in the prayers of the plaint which remained as they were before. The second amendment was made by another order of the Court on the 13th March, 1956 on the application of the plaintiff. By this amendment, the plaintiff introduced the case that he acted on the statements and declaration made in the registered agreement of the 2nd April, 1948 and introduced paragraph 6b of the plaint pleading that the defendants or either of them was estopped from denying that they had respectively purchased the said property with notice of and/or subject to the charge in favour of the plaintiff. Again, no alteration was sought in the prayers of the plaint which remained the same as before for a declaration of charge on the immovable property and for a mortgage decree.
( 4 ) AT the time when the plaintiff made the application for the second amendment of the plaint, he tried to introduce the case of specific purpose and trust in paragraph 6g of the petition where the amendment proposed was as follows:"in any event, the defendant No, 1 declared and/or admitted himself to be an express trustee for the specific purpose of paying Rs. 7,500 to the plaintiff. Further, the defendant No. 1 by his conduct inter alia by acting on the said registered conveyance dated the 6th October, 1951 and/or producing the said conveyance as his document of title was and is estopped from denying that defendant No. I was and still is an express trustee as aforesaid and is bound to pay to the plaintiff the said sum of Rs. 7,500. "this particular amendment as proposed in the petition was disallowed by the learned Judge on the 4th September, 1956. No appeal from the order disallowing this amendment to introduce the case for specific purpose and trust has been filed so that the order has now become final.
( 5 ) THE plaintiff's case is that by a registered Agreement dated the 2nd April 1948, one Puma Chandra Banerji agreed to sell 1/a, Jadu Nath Sen Lane to the plaintiff free from encumbrances at a sum of Rs. 30,000/- only. The plaintiff pleads in the plaint that pursuant to that agreement and acting on the statements and on declarations made therein, he paid Rs. 6001/- on that day as earnest money in part payment of the consideration. It is then pleaded that Purna Chandra Banerji could not make out a good and marketable title to the said premises. There-after, by a registered conveyance dated the 6th October 1951, Banerji sold the said premises to the first defendant for a sum of Rs. 40,000/-, and it is alleged in paragraph 6 of the plaint that this sale was "subject to the said charge in favour of the plaintiff. " It will be material later On to refer to the conveyance of the 6th October 1951 to see the terms and effect thereof.
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