HIGH COURT OF PUNJAB & HARYANA
A. N. GROVER,I. D. DUA, JJ.
S.I.K. Sohan Singh
Versus
State Bank of India, Calcutta
First Appeal No. 61 of 1963
Decided On : 02-08-1963
CHARGE ON PROPERTY - UNPAID PURCHASE PRICE - INTEREST - VENDOR'S LIEN - SECTION 55(4)(B) OF THE TRANSFER OF PROPERTY ACT, 1882 - APPLICABILITY - PUNJAB STATE - INTEREST ACT, 1939 - CONDITIONS FOR AWARDING INTEREST - IMPLIED AGREEMENT TO PAY INTEREST - POSSESSION OF PROPERTY BY VENDEE - DISCRETION OF COURT.
Fact of the Case:
The plaintiff Bank, as the Administrator of the estate of Mr. W.G. Deeks, filed a suit against the defendant for the recovery of Rs. 34,000/-, being the balance of the sale consideration for a property known as "Villette" Simla East, sold by Mr. Deeks to the defendant. The defendant pleaded that the suit was premature, barred by limitation, and that there was an implied agreement excluding the alleged charge. The trial court decreed the suit in favor of the plaintiff Bank.
Finding of the Court:
The High Court held that the suit was not premature as the defendant was in a position to pay the balance amount of sale consideration within a reasonable time. The suit was also not barred by limitation as Article 132 of the Indian Limitation Act, 1908, governed the case, and the unpaid vendor's lien created a charge on the property in the hands of the buyer. The court further held that there was no implied agreement to exclude the charge, and that the principle of Section 55(4)(b) of the Transfer of Property Act, 1882, was applicable to the case, even though it was not in terms applicable to the Punjab State. The court also held that interest could be awarded on the unpaid purchase price from the date the property vested equitably in the vendee to the time of actual realization of the purchase money, but that the award of interest was discretionary.
Issues: 1. Whether the suit was premature? 2. Whether the suit was barred by limitation? 3. Whether there was an implied agreement excluding the alleged charge? 4. Whether the principle of Section 55(4)(b) of the Transfer of Property Act, 1882, was applicable to the case? 5. Whether interest could be awarded on the unpaid purchase price?
Ratio Decidendi: 1. The court held that the suit was not premature as the defendant was in a position to pay the balance amount of sale consideration within a reasonable time, as per Section 46 of the Contract Act. 2. The court held that the suit was not barred by limitation as Article 132 of the Indian Limitation Act, 1908, governed the case, and the unpaid vendor's lien created a charge on the property in the hands of the buyer. 3. The court held that there was no implied agreement to exclude the charge, as the letter written by the plaintiff's advocate to the defendant's advocate did not amount to a change in the terms of the sale deed. 4. The court held that the principle of Section 55(4)(b) of the Transfer of Property Act, 1882, was applicable to the case, even though it was not in terms applicable to the Punjab State, as the principle had been applied by the courts in India since 1892. 5. The court held that interest could be awarded on the unpaid purchase price from the date the property vested equitably in the vendee to the time of actual realization of the purchase money, but that the award of interest was discretionary.
Final Decision: The appeal was allowed in part. The order of the court below was modified to the extent that future interest was to be calculated from the date of the filing of the suit till the date of realization at the rate of 6% per annum on the amount of Rs. 25,000/- only. The defendant was granted three months' time to pay the amount, failing which the property on which the charge was claimed was to be put to sale.
A. N. GROVER, J. :- This appeal arises out of a suit for recovery of Rs. 34,000/- with interest on the basis of a charge claimed over the property known as "Villette" Simla East which belonged to one Mr. W.G. Deeks who executed a deed of sale in respect of it in favour of the defendant on 29th September, 1947 for a total consideration of Rs. 75, 000/-. The plaintiff Bank is the Administrator of the estate of Mr. Decks who apparently had died, the Letters of Administration having been granted by the Senior Subordinate Judge, Simla, on 18th February, 1959.
2. The suit was instituted inter alia of the ground that out of the consideration, of Rs. 75,000/- for which the sale had been effected in favour of the defendant, Rs. 25,000/- had been paid by means of a cheque dated 22nd September 1947 on the Lloyds Bank Ltd., Simla, and another sum of Rs. 25,000/- was paid by means of a cheque dated 29th September 1947 in the presence of the Sub-Registrar, Simla, at the time of the registration of the sale deed, leaving a balance of Rs. 25,000/- about which the stipulation in the deed was in the following words :
"* * and the balance of Rs. 25,000/- (Twenty five thousand) is to be paid by the vendee, to the vendor as soon as possible but at a time when the former is in a position to make the payment." The sale deed had actually been executed and got registered and possession had been delivered of the properly to the defendant before the receipt of the aforesaid amount of Rs. 25,000/- which remained payable. It was claimed in the plaint that under the law the seller was entitled to a charge upon the property sold to the defendant for the unpaid purchase price of Rs. 25,000/- together with interest at six per cent per annum on that amount from the date of sale i.e. 29th September 1947, until payment. The total amount of interest which became due was Rs. 17,250/- till the date of the suit but put of that an amount of Rs. 8,250/- was given up being the interest for the first five years after the date, of sale. The claim in the suit was confined to the amount of Rs. 25,000/- as principal and Rs. 9,000/- as interest aggregating Rs. 34,000/-. The cause of action was stated to have arisen on 29th September 1947 from the date of execution and registration of the sale deed and delivery of possession of the property to the defendant.
3. In the written statement the defendant raised the plea of the bar of limitation and asserted that the contract sued upon was known to the vendor to be void for uncertainty and, therefore, the suit was not sustainable. It was further pleaded that, the suit contract was one contingent on the, defendant attaining the position to pay. That was an uncertain event which had yet not happened, and thus the suit was premature. It was also maintained that by an implied agreement the alleged charge sought to be enforced had been excluded. The defendant asserted that she was a benami, purchaser and that the sum of Rs. 50,000/- which had admittedly been paid to the vendor had been, paid by Shri Sohan Singh, the husband of the defendant. The only other plea which deserves notice relates to the attack on the probate proceedings which were described as not being bona fide and without jurisdiction, with the result, that the plaintiff Bank had no locus standi to sue. In the replication which was filed on behalf of the plaintiff Bank it was stated that the defendant was in a position to pay and was in possession of considerable movable and immovable property and the pleas taken up by the defendant were denied.
4. The trial Court framed the following issues :
1. Is the suit premature ?
2. Is the suit time-barred ?
3. Whether the suit is not property valued for purposes of Court-fee and jurisdiction ?
4. Whether the defendant is a benami purchaser and can take up this plea, if so what, effect ?
5. Whether the suit contract was known to the vendor to be void for uncertainty, is so what is the effect ?
6. Whether the alleged charge was exclud
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.