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1938 Supreme(Mad) 278

IN THE HIGH COURT OF MADRAS
Venkataramana Rao, J.
L. Venkatakrishna Naidu, Receiver
Versus
R. Narayanaswami Aiyar and five Ors. and T.S. Rajarama Sastri
Decided On : 21.09.1938

The main legal point established in the judgment is the interpretation and applicability of the third party procedure under Order V-A, Rule 5 of the Original Side Rules, based on the nature of claims to indemnity and the interpretation of covenants for indemnity.

Headnote:

third party procedure - application for directions under Order V-A, Rule 5 - Original Side Rules - summary of acts and sections referenced: Order V-A, Rule 5; Order V-A, Rule 1; English procedure and decisions; Birmingham and District Land Co. v. London and North Western Railway Co. (1886) 34 Ch. D. 261; Page v. Midland Railway Co. (1894) 1 Ch. 11; Marten v. Whale (1917) 1 K.B. 544; Baxter v. France and Ors. (1895) 1 Q.B.D. 591; Conveyancing and Law of Property Act, 1881, Section 7 (1) - A; Swansea Shipping Co. v. Duncan (1876) 1 Q.B. 644; Carshore v. North Eastern Railway Co. (1885) 29 Ch. D. 344

Fact of the Case:

The 1st defendant sought directions under Order V-A, Rule 5 of the Original Side Rules relating to third party procedure. The plaintiff resisted the application, claiming that the third party procedure was not applicable to the persons sought to be added as third parties.

Finding of the Court:

The court found that the 1st defendant was entitled to add the third parties and directed that one of the third parties be added to the action. The court also allowed the 1st defendant to serve a statement of claim on the third party and directed that the issues relating to the liability of the third party to the 1st defendant be adjudicated upon after the trial of the action.

Issues: The main issue was whether the 1st defendant was entitled to add the third parties under the third party procedure.

Ratio Decidendi: The court relied on the English procedure and decisions to determine the applicability of the third party procedure. It considered the nature of claims to indemnity and the interpretation of covenants for indemnity in similar cases.

Final Decision: The court allowed the 1st defendant to add one of the third parties to the action and directed the adjudication of the issues relating to the third party's liability after the trial of the action.

JUDGMENT

Venkataramana Rao, J.

1. This is an application by the 1st defendant for directions under Order V-A, Rule 5 of the Original Side Rules relating to third party procedure. The application is resisted by the plaintiff and by the respondents on whom notices under T. 1 have been served. The contention on behalf of the plaintiff is that the third party procedure is not applicable at all with reference to the persons who are now sought to be added as third parties or against whom notices have been served. The objection on behalf of third parties is also similar except that, in addition to the above common contention, each raises a contention peculiar to himself. Though the application has been taken for giving directions against three respondents, Mr. Seshagiri Sastri on behalf of the 1st defendant has confined his application to T. Section Rajarama Sastri alone and did not press it as against the others. No directions need therefore be given in regard to them and the application must be dismissed as against them.

2. Before appreciating the contentions, it is necessary to state a few facts. The plaint seeks to recover the suit property described in Schedule A to the plaint as trust property belonging to the Deity Sri Thulasingaperumal. The plaintiffs claim is that the property was endowed to the said Deity by one Narasimhalu Chetty who by his will appointed his widow and another as executors to the said property. But his adopted son one Venkataraghavalu Chetty after the death of the executors in violation of the terms of the endowment purporting to treat the said property as his private property made several alienations one of such being to one T. Raghavendra Rao. The sale in favour of Raghavendra Rao was effected in or about August 1915 of six grounds of vacant land which is fiart of the property comprised in Schedule A. The said Raghavendra Rao sold the said property by a deed of sale dated 31st March, 1920, to T, Section Rajarama Sastri who by a sale deed dated 14th March, 1923, sold the said property to the 1st defendant. The 1st defendant also purchased portions of the suit property from other persons who also claim to be either alienees under Venkataraghavalu Chetty or persons who claim to be alienees from him. Thus the 1st defendant became owner of over nine grounds and 2,123 square feet and on the entire plot of ground he has erected substantial buildings. The plaintiff seeks to ignore these alienations and sues for a declaration that they are null and void and not binding on the trust and to recover possession of the A schedule property from the 1st defendant and other persons who are in occupation of the same. The case of the 1st defendant is that he is a bona fide purchaser for value and that he is protected by covenants of indemnity which he took from his several vendors and as he has got rights of indemnity against his vendors, he seeks to avail himself of the third party procedure and wants to have his vendors also made parties so that the question of their liability to him may also be determined in case he loses in the action. So far as Rajarama Sastri is concerned, the sale deed dated 14th March, 1923, in favour of the 1st defendant contains the following covenant:

The said vendor (Rajarama Sastri) doth hereby covenant with the said vendee (the 1st defendant) that he has full right and title to convey the said land to the said vendee and also agrees to indemnify the said vendee against all loss or damage which the vendee may at any time sustain in consequence of any defect in the title of the said vendor to the said land or of the right of the said vendor to convey the said land.

3. Order V-A, Rule 5 of the Original Side Rules runs thus:

If a third party appears pursuant to the third party notice, the defendant giving the notice may apply to the Court, for directions, and the Court upon the hearing of such application may, if satisfied that there is a question proper to be tried as to the liability of the third par

















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