TMI Blog1926 (9) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... contending that it was. nominal. The defendant obtained compulsory registration of the sale deed. But the Rs. 6,000 was not paid before the Sub-Registrar. The defendant then filed a suit O.S. No. 269 of 1919 in the Court of the District Munsif of Valangiman for possession of the lands sold. The 1st plaintiff who was the only defendant in that suit contended that the sale deed was a nominal transaction. The District Munsif dismissed the suit. On appeal by the plaintiff therein (the present defendant) the Subordinate Judge of Kumbakonam decreed the suit. He also passed a decree for the payment of Rs. 6,000 which was originally intended to be paid before the Sub-Registrar, to the defendant therein (the present 1st plaintiff). This was on 21st January, 1921. There was a second appeal to the High Court which was dismissed on the merits of that suit. One of the grounds in second appeal was that the learned Judge ought to have recorded a distinct finding in regard to the six thousand rupees promissory note and made provision for its payment also. On this ground the learned Judges who disposed of the second appeal said: As regards the sum of Rs. 6,000 payable to the defendant's mother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion is necessarily implied in the course taken by the learned Judges. 4. The next important point argued by the appellant is, that the and plaintiff is the only person competent to sue on Ex. B, and therefore the vendor's lien was extinguished. On the other hand, it is contended for the respondents that there is nothing to show that the 2nd plaintiff ever accepted the note and therefore the right to the balance of the purchase money remained with the 1st plaintiff and with it the vendor's lien. It is admitted by the defendant in his former deposition now filed as Ex. E, that the 2nd plaintiff was not present when Ex. A was executed. Until therefore the 2nd plaintiff accepts the note the note has not become operative. Seeing that the defendant has performed what was required of him by the 1st plaintiff at the time of the transaction one would expect that, if the 2nd plaintiff refused to accept the note, the 1st plaintiff would have communicated such a fact within a reasonable time to the defendant and demanded the balance of the purchase money as on a failure of consideration. It is doubtful whether in such a case, the vendor's lien was at first extinguished, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inguish the lien but the mortgage deed was not completed by registration and remained a simple' bond, the lien is not extinguished [vide Ranganayaki Ammal v. Parthasarathi Aiyangar (1919) 10 L W 550 ] 4. Where the vendor obtained a promissory note not from the vendee but from a third person at the instance of the vendee and the third person did not pay, even then, if the third person's note or bond was only an additional security to the vendee's liability and not in substitution of it, the lien is not lost [cf. Ralagurumoorthi v. Nagulu (1921) 14 LW 191]. 5. Where the vendor himself takes a promissory note or bond and where the right in it was assigned by him to a third person or where his right was attached in execution of a decree and purchased by a third person [vide Sambasiva Aiyar v. Venkatarama Aiyar (1926) M.W.N. 569] the vendor's right to the lien passes to the third person under Section 8 of the Transfer of Property Act and is available to the assignee or purchaser. 5. But if in this last case the vendor took a negotiable instrument and the instrument is not assigned but endorsed under theLaw Merchant it is doubtful if Section 8 of the Transfer of Property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o an acknowledgment. A case decided by Miller, ]., and reported an Ranganayakuln Aiya v. Subbayan (1908) 5 M L T 71 was relied on for the respondents' contention that this deposition amounts to an acknowledgment. This decision of Miller, J., has been adversely commented on in various later decisions. In Subbarama Aiyar v. Veerabhadra Pillai (1921) 41 MLJ 317 Napier, J., observed: It'may not necessarily always be that deduction to be drawn. 9. In Kandasami Reddi v. Suppammal I.L.R. (1921) M 443 Ayling, J., after quoting the last sentence of Napier, J., referred to Andiappa Chety v. Alasinga Naidu I.L.R. (1911) M 68 . Each case must be treated on its own merits and then said From the language used and the circumstances in which the acknowledgment is made, it must be decided whether it amounts to an implied acknowledgment of subsisting liability. 10. Earlier in the judgment he observed after citing the decision of the Privy Council in Maniram Seth v. Seth Rupchand I.L.R. (1906) C 1047 16 M L J 300 (P C). I can see no ground whatever for holding that their Lordships were considering anything but the circumstances of that case or intended to lay down any rule of legal inference. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not barred by limitation. The decree of the Lower Court will be vacated and a personal decree will be passed for the amount sued for in favour of 1st plaintiff, as the 2nd plaintiff consents to such a decree. 14. The order as to costs in the Court below will stand. In appeal, each party will bear its own costs. H.D.C. REILLY, J. 15. So far as this suit is a suit on the promissory note, Ex. B, the learned Subordinate Judge has found that it is not time barred because it is saved by an acknowledgment made by defendant in his deposition, Ex. E, in the previous suit, which contains a statement that he executed the note without any denial that the liability under the note was then subsisting. The Subordinate Judge has relied on Subbarama Aiyar v. Veerabhadra Pillai AIR1921Mad464 . One of the reasons for the decision of the learned Judges in that case was a dictum of Miller, J. in Ranganayakulu Aiya v. Subbayan (1908) 5 M L T 71. An acknowledgment of liability existing at a past date without any allegation that the liability has since ceased is presumed to be an acknowledgment of liability when the statement is made. 16. That Miller, J., stated as the effect of the decision of the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion to explain why he did not pay the remaining Rs. 6,000 of the purchase money, as intended, before the Sub-Registrar. In the circumstances it is clear that it was very much to his interest, when he mentioned this promissory note, to mention also any payment which he had made under it, And it must be noticed that the part of his deposition which I have quoted was made in examination-in-chief. Defendant's vakil, who had just elicited his evidence about part payments made, must have been fully aware that evidence that any payment had been made towards the discharge of the promissory note would strengthen his case, and it cannot be supposed that he would not have given defendant an opportunity of mentioning any such payment. In the circumstances I think it is clear that defendant's statement that he executed the promissory note coupled with his failure to mention any payment towards the discharge of it was an implied admission that the liability under the note was then subsisting. I agree therefore in finding that defendant made an acknowledgment within the meaning of Section 19 of the Limitation Act, which saves the suit on the note from being time-barred. 18. Curiously en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to enforce his charge under Section 55 (4)(b) of the Transfer of Property Act for the part of the purchase money for which Ex. B was executed, and the learned Subordinate Judge has found that he is so entitled. On this part of the case Mr. Krishnaswami Aiyar for plaintiff, as I understand him, has argued alternatively (1) that the promissory note, Ex. B, is invalid and therefore the statutory charge for unpaid purchase money has never been affected by it, (2) that, even if Ex. B is valid, the statutory charge persists concurrently with the liability under Ex. B, and (3) that on plaintiffs giving up their claim under Ex. B, as they are prepared to do, the charge, if it was ever defeated or affected by Ex. B, revives and can be enforced. The first of these contentions has been disposed of by the finding that Ex. B is valid. In regard to the second contention it is true that, when the vendor of Immovable property takes a promissory note from the vendee in his own favour for the whole or part of the purchase money or when he directs the vendee to pay the whole or part of the purchase money to a third party, the vendor does not thereby lose the charge for unpaid purchase money given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a benamidar, the benamidar may sue on it in his own name without making the vendor a party and the vendee cannot resist his suit. A contract between the vendor and the vendee by which the vendee makes himself liable to be sued for the purchase money by a third party, whom he does not know to be a mere benamidar for the vendor, or by the assignee of that third party is, in my opinion, essentially inconsistent with the retention by the vendor of his charge to secure the payment of the purchase money even when it may be open to the vendor to prove that the third party is a mere benamidar for him and to sue the vendee on his obligation to the third party. It is the nature of the contract between the vendor and the vendee to which we must look, and that is not affected by the existence of an undisclosed benamidar. In this case it is not pleaded that defendant was aware that plaintiff No. 2 was a benamidar for plaintiff. In regard to Mr. Krishnaswami Aiyar's third contention, when once there is a contract to the contrary within the meaning of the section and the vendor's charge is so defeated, I do not see how the statutory charge can be revived. There appears to be no provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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