Payment to be made only in cash.

This second appeal involves an important question of law as to the interpretation that should be placed on the words ‘transferee’ for value who has paid money in good faith and without notice of the original contract" in clause (b) of section 27 of the Specific Relief Act. The contention which found favour with the lower Courts is that the consideration for the subsequent transaction must be in money and not by way of adjustment as in the present case. In support of this reliance was placed on a judgment of Horwill, J., in Jamatrai v. Thukkappa1, where the learned Judge took the view that at any rate a portion of the consideration must be in the shape of money. It is contended that that judgment cannot be supported especially in view of the words " transferee for value " that is, it would be sufficient if the transfer is for valuable consideration irrespective of whether the consideration is in the shape of money or adjustment of pre-existing debts or otherwise. As this involves the consideration of the correctness or otherwise of a judgment of a learned Judge of this Court I consider that it is necessary that this Second Appeal should be heard by a Bench. Place the papers before the Hon’ble the Chief Justice for orders as to posting before a Bench.

The Second Appeal then came on for final hearing before a Bench (Panchapakesa Ayyar and Basheer Ahmed Sayeed, JJ.)

The Judgment of the Court was delivered by

Panchapakesa Iyer, J.-This is a Second Appeal by one Mary Joseph, the plaintiff in O.S. No. 178 of 1952 on the file of the District Munsif of Periyakulam, against the judgment and decree of the Subordinate Judge of Dindigul reversing the judgment and decree of the District Munsif and allowing the appeal and dismissing the plaintiff’s suit with costs throughout.

Krishnaswami Nayudu, J., before whom this Second Appeal came up for hearing in the first instance, referred it to a Bench, as he considered that Horwill, J., in Jamatrai v. Thukkappa1, had taken the view that under section 27 (b) of the Specific Relief Act, the phrase " transferee for value who has paid his money in good faith" must have paid at least a portion of the consideration in the shape of money and that, otherwise, he could not take advantage of section 27 (b). As he considered that an important question of law as to the interpretation of the clause "paid his money in good faith", under section 27 (b) has to be decided in this Second Appeal, he referred it to a Bench. That is how this second appeal has come before us.

We have perused the records and heard the learned counsel on both sides. The facts were briefly these: The plaintiff, Mary Joseph, had sold a Coffee Estate measuring 5 acres, 74 cents for a thousand rupees to the first defendant, Gurr alias Guruswami Chettiar, on 11th April, 1947, under Exhibit B-2. There was an agreement, A-2, executed the same day by the first defendant to reconvey the property at the end of five years, on paying back the one thousand rupees together with interest at 16½ per cent. per annum that is Rs. 1,825 minus the four hundred rupees directed to be paid to the first defendant by P.W. 3 the lessee towards the rent due by him to the plaintiff for the unexpired portion of the lease Exhibit A-1, dated 27thOctober, 1946, he had taken from the plaintiff for 5 years. We may add here that P.W. 3 admittedly paid the balance of Rs. 400 due under the lease Exhibit A-1 to the first defendant’s father, Arunachala Chettiar and took a receipt, Exhibit A-3, from him on 29th August, 1947, and handed it over to the plaintiff. The first defendant, who had stood guarantee for the purchase of cloth from the second defendant’s shop, in Madurai, by his father-in-law executed a sale-deed, Exhibit B-4, on 15th December, 1950, for thousand rupees in part settlement of the money due by his father-in-law to the second defendant which he had guaranteed under Exhibit E-8, dated 22nd February 1950. The second defendant was not proved to have had actual n