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1920 Supreme(Mad) 184

IN THE HIGH COURT OF MARAS
J Wallis, K C.J., S Ayyar
Raja Venkatarangayya Appa Rao
Versus
Raja Varaprasada Rao Naidu
Decided On : 12 July, 1920

The main legal point established in the judgment is the interpretation and enforcement of the covenant of indemnity in the sale deed, entitling the plaintiff to recover the costs incurred in defending his title to the village.

Headnote:

Indemnity - Covenant in Sale Deed - The court held that the covenant in the sale deed imposed the duty of indemnifying the plaintiff from costs in defending his title to the village against a third party. The wide language used in the deed was deemed to cover the present claim, entitling the plaintiff to enforce the covenant of indemnity.

Fact of the Case:

The Zamindar of South Vallur brought a suit against the defendants to recover the costs incurred in defending his title to a village he had purchased from one of the defendants against a third party's claim. The claim was based on an indemnity contained in the deed of sale and a covenant in an indemnity bond.

Finding of the Court:

The Subordinate Judge gave judgment for the plaintiff, which was upheld by the court. The court held that the covenant in the sale deed imposed the duty of indemnifying the plaintiff from costs in defending his title to the village against a third party. The plaintiff was entitled to recover the actual costs he had to pay to his legal adviser.

Issues: The main issues were the interpretation of the covenant in the sale deed and the entitlement of the plaintiff to recover the costs incurred in defending his title to the village.

Ratio Decidendi: The court held that the covenant in the sale deed imposed the duty of indemnifying the plaintiff from costs in defending his title to the village against a third party. The wide language used in the deed was deemed to cover the present claim, entitling the plaintiff to enforce the covenant of indemnity. The plaintiff was entitled to recover the actual costs he had to pay to his legal adviser.

Final Decision: The court varied the lower court's decree by reducing the interest rate from 9 per cent to 6 per cent but otherwise dismissed the appeal with costs.

JUDGMENT

Wallis, C.J.

1. This is an appeal from the judgment of the Subordinate Judge of Bezwada in a suit brought by the Zamindar of South Vallur against the defendants, from one of whom he had purchased a certain village, to recover the costs which he was put to in defending his title to the village against a third party. He bases his claim upon an indemnity contained in a deed of sale executed by the second defendant who was the actual vendor, and also on a covenant contained in an indemnity bond executed by the first, third and fourth defendants, her husband and two sons respectively.

2. The Subordinate Judge has given judgment for the plaintiff, and we think he is right. The covenants in the deed of sale and in the indemnity bond are practically the same, and the covenant in the sale deed is, accurately translated in paragraph 8 of the Subordinate Judges judgment. It says:

If the previous owners or any others setting up any rights by transfer from them or any others claiming themselves to be their heirs or any others claiming under any other title should lay any claim or file any suit regarding the title and interest of the property sold and if by such claim or suit any sort of loss should accrue to your title or enjoyment all such obstructions we will remove at our cost and secure to you absolute right and enjoyment.

3. Now, although the language used here is somewhat cumbersome, we agree with the learned Subordinate Judge that the effect of these words is to impose upon the covenantor the duty of indemnifying the plaintiff from costs in suits like this in which he was obliged to defend his title to the village. However, the case does not stop there, because the deed goes on Hereafter wards, (b) if anybody should file a suit, or (e) if there should be any dispute regarding the nature of the grant or of the tenure of the village from the Government or from any others and if there should accrue any losses on that account, all those also we will remove at our cost and will secure to you absolute right and enjoyment.

4. Now, we are clearly of opinion that, even if the first covenant is not clear, these words are sufficiently wide to cover the present claim, because a suit has been filed and loss has accrued on that account to the plaintiff who has had to defend the suit at great expense. Therefore, we hold that both the clauses contain a covenant of indemnity which the plaintiff is entitled to enforce in this suit.

5. The only other question which has been argued before us is whether the plaintiff is entitled to recover only the taxed costs, or costs between solicitor and client, or what corresponds to that in this country, the actual costs which he has bad to pay to his own legal adviser. We are only concerned in this case with the practice in cases of indemnity such as the present and with regard to such practice it appears to be well-settled law in England that a party is entitled to recover costs as between solicitor and client, and it obviously must be so, because unless it ware so there would be really no indemnity at all. That has been laid down by the high authority of Lord Tenterden in Smith v. Compton (1832) 3 B, & Ad., 407, by Kelly, C.B., and Martin, B. and Pigott, B., in Howard v. Lovegrove (1870) L.R., 6 Ex., 43, and by Buckley, J., as he then was, in Great Western Railway v. Fisher [1905] 1 Ch. 316. The system of awarding costs in litigation is somewhat different in England from what it is in India. There is no system here of taxing costs as between a client and his vakil We do not lay down that under such contracts anything which a party had agreed to pay or actually paid, could be recovered without regard to whether his conduct was reasonable or not; there can be no question here that what was paid was reasonable having regard to the condition of things prevailing here, and was such a payment as would have been allowed if there were taxation here as between client and vakil corresponding to taxation between solicit


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