Judges : P.T.RAMAN NAYAR
Madhava Kammathi - Appellant
Versus
Gopala Pai - Respondent
Case No : S. A. No. 1162 of 1962
Decided On : 06/08/1965
Advocates Appeared :
S. Bhoothalingam Iyer; For Appellant P. Vasu; For Respondents
Transfer of Property Act - Charge - S.55(6)(b) - S.100 - S.55(4)(b) - S.55(6)(b) creates a charge against the seller and all persons claiming under him without exception for a bona fide transferee for value. The omission of the words 'with notice of the payment' from S.55(6)(b) by Act 20 of 1929 makes the charge of the buyer for price prepaid effective not only against the seller but against all persons claiming under him irrespective of notice. The protection under S.100 is not available to a bona fide transferee for value as S.55(6)(b) provides a charge against all persons claiming under the seller without exception. The amendment introduced by Act 20 of 1929 deliberately extended the charge provided by S.55(6)(b) to all persons claiming under the seller irrespective of whether they were bona fide transferees for value or not.
Fact of the Case:
The lower appellate court held that the charge provided by S.55(6)(b) of the Transfer of Property Act is available even as against a bona fide transferee for value from the seller. The appellant 2nd defendant entered into an agreement to sell in favor of the plaintiff after the 1st defendant had sold the property to the appellant 2nd defendant. The case was governed by the Transfer of Property Act.
Finding of the Court:
The court dismissed the appeal with costs, stating that the protection under S.100 is not available to a bona fide transferee for value as S.55(6)(b) provides a charge against all persons claiming under the seller without exception.
Issues: The main issue was whether the charge provided by S.55(6)(b) of the Transfer of Property Act is available against a bona fide transferee for value from the seller.
Ratio Decidendi: The court held that the charge provided by S.55(6)(b) is available even as against a bona fide transferee for value from the seller, and the protection under S.100 is not available to such a transferee as S.55(6)(b) provides a charge against all persons claiming under the seller without exception.
Final Decision: The court dismissed the appeal with costs and refused leave.
1. I think (in respectful agreement with the view expressed in Hari Bapuji v. Bhagu Sadhu, AIR. 1937 Bombay 142, Abdul Hamid Khan v. Mohamed Ali, AIR. 1952 Bombay 67 and Ayyakutty Chettiar v. Imbichiamina Bi, 1962 KLT. 728 - see also Mulla's Transfer of Property Act, 4th Edition, page 294 where it is stated that the omission of the words "with notice of the payment" from S.55 (6) (b) off that Act by Act 20 of 1929 "makes the charge of the buyer for price prepaid effective not only against the seller but against all persons claiming under him irrespective of notice") that the lower appellate court was right in holding that the charge provided by S.55 (6) (b) of the Transfer of Property Act is available even as against a bona fide transferee for value from the seller. True, S.55 (6) (b) must be read along with S.100, for, the former only creates a charge and you must: go to the latter for the incidence of that charge. With great respect to what is said in Ayyakutty Chettiar v. Imbichiamina Bi (1962 KLT. 728), I do not think that there can be any question of S.55 (6) (b) excluding the operation of the saving; in the second paragraph of S.100 on the ground that the former is a special provision and the latter only a general provision. It seems to me that the true reason why the saving does not apply is this: The saving is in the following words, "Save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration & without notice of the charge." It will be noticed that the protection afforded is to a bona fide transferee for consideration from a person against whom a charge is given either by act of parties or operation of law, not to the very person against whom the charge is thus given even if it be that he is himself a bona fide transferee for consideration. If we turn next to S.55 (6) (b) what we find is that it gives the charge "as against the seller and all persons claiming under him" without any exception made in favour of a bona fide transferee for value. Therefore, such a person is also a person against whom the law itself provides a charge and it follows that he is not entitled to the protection in the second paragraph of S.100. Before the amendment introduced by Act 20 of 1929, there appeared the words, "with notice of the payment" in S.55(6) (b) so that the charge provided in the section was available, so far as persons claiming under the seller were concerned, only against those with notice of the payment and not against a bona fide transferee for value. Those words were omitted by Act 20, of 1929, and it is to be remarked that by that very statute, the seller's charge embodied in S.55 (4) (b) was extended to a transferee from the buyer but with the important qualification added that he must be a transferee without consideration or with notice of the non-payment. That the extension of the charge provided by S.55(6)(b) to all persons claiming under the seller irrespective of whether they were bona fide transferees for value or not was deliberate and not a slip is clear from the following observation by the Special Committee to which the bill which later became Act 20 of .1929 was referred in its notes on the clause providing for the deletion of the words, "with notice of the payment" from S.55(6)(b):
"Sub-clause (b) of clause (6) of the same section relates to the buyer's lien and provides that it can be enforced against the seller and other persons claiming under him with notice of the payment. It also provides that the buyer's lien can only be enforced against a person claiming under the seller, if such person has notice of the payment of the purchase-money. The "transferees and legal representatives of a seller are thus enabled to escape any liability for the amount received by the seller by pleading that they had no notice of the payment of the purchase-money. Th
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