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1918 Supreme(Mad) 209

IN THE HIGH COURT OF MARAS
Phillips
Chinnaswami Reddi
Versus
Krishnaswami Reddi
Decided On : 31 July, 1918

The main legal point established in the judgment is the requirement for a direct and specific benefit received as part of the same transaction to entitle a party to claim restoration of the properties acquired with the consideration paid.

Headnote:

Section 64 - Contract Act - [Section 64] - The court discussed Section 64 of the Contract Act and its application in the case. It highlighted the requirement for a party seeking to avoid a voidable transaction to restore any benefit received from the other party. The court emphasized that the benefit received should be part of the same transaction and should be direct, and that there must be something more than a mere application of the consideration in a particular way to entitle the purchaser to claim restoration of the properties acquired with the consideration paid.

Fact of the Case:

The plaintiff sued for possession of a house-site sold to him by the mother of the defendants. The defendants contested the suit, claiming that the sale-deed executed by their mother was invalid and inoperative and would not bind them.

Finding of the Court:

The lower courts held that the sale by the mother as the guardian was not binding on the defendants. The District Judge also held that the sale was not necessary or beneficial and dismissed the appeal.

Issues: The main issue was whether the lands purchased in Sriperumbudur constituted the benefit received by the defendants from the plaintiff within the meaning of Section 64 of the Contract Act.

Ratio Decidendi: The court emphasized the requirement for a direct and specific benefit received as part of the same transaction to entitle the purchaser to claim restoration of the properties acquired with the consideration paid.

Final Decision: The court directed that on payment by the defendants of a specified amount, the plaintiff's suit would be dismissed, and in default, a decree would be passed for possession as prayed with costs throughout.

JUDGMENT

Phillips, J.

1. Apart from the fact that the plaintiff has by his action precluded the court from ordering an exchange between the parties of the lands sold to plaintiff by the mother of defendants 1 and 2, and the lands purchased by her in Sriperumbudur, I think that it follows from the finding that the purchase of the lands in Sriperumbudur was not contemplated at the time of the sale to plaintiff, that those lands do not constitute the benefit received by defendants 1 and 2 from plaintiff within the meaning of Section 64 of the Contract Act. I therefore agree in the order proposed.

Kumaraswami Sastri, J.

2. The plaintiff is the appellant. He sued for possession of the house-site specified in the plaint. The case for the plaintiff is that the mother of the 1st and 2nd defendants acting as their guardian sold to him certain properties consisting inter alia of the site specified in the plaint for the purpose of purchasing other properties, that the defendants have not put plaintiff in possession of the property claimed by demolishing the building on the site as agreed upon. Defendants 1 and 2 contested the suit on the ground that the sale-deed executed by their mother is invalid and inoperative and would not bind them and that plaintiff has no right to the relief claimed. The defence of the 3rd and 4th defendants who claimed an interest in the buildings on the site is not material for the purpose of this appeal.

3. The District Munsif held that the sale by their mother as their guardian was not binding on the defendants 1 and 2 and dismissed the suit on this ground. He was of opinion that the purchase of the lands subsequently purchased was not settled at the time of the sale by defendants mother and that it is probable that the plaintiff prevailed upon the defendants maternal grandfather to enter into the transaction.

4. On appeal, the District Judge held that the sale was not binding on the defendants 1 and 2 as it was not necessary or beneficial and dismissed the appeal.

5. The contention for the appellant is that it was not open to the 1st and 2nd defendant to keep the lands purchased with the sale proceeds of the family lands and to repudiate the sale by their mother made with the object of purchasing other lands and that under Section 64 of the Contract Act, a person who seeks to avoid a voidable transaction should restore any benefit he has received as a condition precedent to such avoidance. It is also argued that the District Judge was wrong in thinking that the recital in the sale deed by defendants mother to the effect that lands in Sriperumbudur were to be purchased was insufficient as the particular lands actually purchased were not specified.

6. There can be little doubt that under Section 64 of the Contract Act a party seeking to avoid a voidable transaction is bound to restore any benefit he has received from the other party and the question is whether in the present case, lands actually purchased in Sriperumbudur can be said to be the benefit which the defendants 1 and 2 received in respeet of the sale by their mother as their guardian.

7. Ordinarily, the benefit which a party receives when he sells the property is the price which the vendee pays. Any profits which the vendor might make with the moneys would be too remote in estimating what he has to return in case he is entitled to avoid the sale and elects to do so. Where however for the protection of a purchaser contracting with a guardian or a qualified owner, a particular dealing with the money was in the direct contemplation of the parties such as the purchase of other lands with the consideration and the money is so applied, the benefit which the other party obtains will be the land or other property acquired with the consideration. There must, in my opinion, be something more than a mere application of the consideration in a particular way in order to entitle the purchaser to claim restoration of the properties acquired with the consideration paid by h




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