[This Appeal and the Memorandum of Cross-Objections filed by Respondents Nos. 1 and 2 first came on for hearing on the 7th day of December 1914, before their Lordships Sir John Wallis, C. J., and Seshagiri Aiyar, J.]

Judgment

In this case the father of defendants Nos. 1 and 2 in 1906 mortgaged the suit mittah for Rs. 3,000, the rate of interest being only 6 per cent. per annum and five years being allowed for re payment of the principal sum In 1909, five months after the fathers death, defendants Nos. 1 and 2 entered into an agreement, Exhibit A, to sell the mittah to the plaintiffs. Defendants Nos. 3 to 5, the minor sons of the 1st defendant, were then in existence and it is objected in their behalf that this transaction was not necessary or beneficial to them and that they are entitled to resist a claim for specific performance. At the date of the agreement Rs. 4,300 was due on the mortgage and in respect of a promissory note executed by the defendants: and on this ground, the District Judge has held that the contract was binding on the minors and has given to the plaintiffs a decree. We are uuable to agree.

The mittah was then worth nearly Rs. 18,000, if not more, and the indebtedness was only Rs. 4,300. The family also owned other immoveable properties out of which the debt might have been satisfied by sale. Although it is said that it was intended to invest the balance in the purchase of ryotwari lands and that this would have been more profitable, there is no evidence that any arrangements to this effect had been made at the date of the contract sued on, and therefore the result of the transaction was to place the balance at the disposal of the 1st and 2nd defendants who might or might not invest it for the benefit of the family, and so to expose the interests of the minors to considerable risk. For these reasons, we are not satisfied that the transaction was for the benefit of the minors. As the minors are entitled to three-eighths of the whole, we think the provision of Sect. 14 of the Specific Relief Act have no application. The decision in Gurusami v. Ganapathia (I.L.R., 5 Mad., 337), which has been cited, related to a contract entered into before the passing of the Act.

We therefore set aside the decree of the District Judge with costs of the Appellants in both Courts. It is, however, argued that in the plaint as framed there is a claim for damages in the circumstances which have happened against defendants Nos. 1 and 2 which should be adjudicated on. We have therefore resolved to call for a finding on the following issue:

Are the plaintiffs entitled to any, and what, damages against defendants Nos. 1 and 2

The finding should be submitted within six weeks from this date and seven days will be allowed for filing objections.

The Memorandum of Cross-Objections filed by the Respondents Nos. 1 and 2 is dismissed with costs.

In compliance with the order contained in the above judgment, the District Judge of Salem submitted the following

Finding.

The High Court has, by its order dated 7th December 1914, in Appeal No. 117 of 1912, called for a finding on the evidence already on record, on the issue:

Are the plaintiffs entitled to any, and what, damages against defendants Nos. 1 and 2



2. At the hearing before me it was not disputed that the plaintiffs are entitled to recover damages from the first and second defendants, and the only question argued was as to the proper measure of these damages. The learned vakil for the plaintiffs suggested two alternative ways in which the damages might be measured. The first way is to include in the amount to be awarded as damages (1) the difference between the price of the plaint mittah as fixed by the contract between the parties and its market value at the date of the breach of that contract; (2) the earnest-money paid by the plaintiffs, together with interest thereon, at such rate as the Court considers reasonable, from the date of the contract until date of payment; and (3) the amount of any costs or expenses which the plaintiffs have incurred by reason of the breach of contract. The alternative method of calculation proceeds on the assumption that from the date fixed for the performance of the contract, that is to say, from the 15th of November 1909, up to the date of the High Courts judgment reversing this Courts decree for specific performance, that is, up to 7th December 1914, the plaintiffs kept a sum of Rs. 17,750 available for payment to the 1st and 2nd defendants at any moment, and were thus deprived of the income which they might have acquired by the profitable investment of that sum during the said period. On this assumption it is proposed that the amount of the damages to be recovered by the plaintiffs from the 1st and 2nd defendants should be taken to be the amount which might have been realised by the investment of Rs. 17,750 at, say, 6 per cent, per annum from 15th November 1909 to 7th December 1914, which would come to somewhere between Rs. 5,000 and Rs. 6,000. I do not think this latter method of estimating the loss sustained by the plaintiffs should be adopted. The assumption upon which it is based is not a reasonable one. It is alleged, no doubt, that the plaintiffs tendered to the 1st and 2nd defendants on 29th October 1909 a sum of Rs. 4,300, being the amount required for the discharge of a prior encumbrance on the plaint mittah, and again on the 4th November 1909 a sum of Rs. 17,550, being the balance of the purchase-money; and it i s a fact that after the decree for specific performance was passed by this Court, namely, on 10th April 1912, they deposited the sum of Rs. 17,550 in Court; but there is no evidence to show, and it would scarcely be reasonable to presume, that they had kept this sum idle during the whole of the period intervening between 4th November 1909 and 10th April 1912, that is, for nearly 2 years. Moreover they drew the money out of Court again on the 5th September 1912, and it must be presumed that they did so in order to prevent its lying idle any longer. In the circumstances it is clear that there are no sufficient materials available to serve as a basis for calculating the amount of damages according to the second method proposed, and that method cannot therefore be adopted. The other method is the one that was adopted by the High Court of Bombay in the case reported in I. L. R. XXXII Bombay 165, 172, and it seems to be the proper method to be adopted here also. The vakil for the 1st and 2nd defendants agrees to that.



3. As regards the details of the calculation it is conceded by the vakil for the 1st and and defendants that the plaintiffs are entitled to recover the Rs. 200 paid by them as earnest money with interest at such rate as is considered reasonable from 2nd October 1909 until date of payment. It is agreed that 6 per cent. per annum is a reasonable rate of interest and I accordingly fix that as the rate to be allowed.



4. There is no evidence to show that the plaintiffs have been put to any expense as a result of the 1st and 2nd defendants breech of contract, apart from their costs of the present, litigation which I cannot take account of now, as it must be left to the High Court to determine the incidence of those costs in the usual course when it finally disposes of the appeal.



5. The only question that remains to be considered is what was the market value of the plaint mittah at the date of the breach of contract. As regards this the vakil for the plaintiffs, contends that it should be fixed at Rs. 23,000 or Rs. 24,000, and in support of the contention he relies on the evidence of the 3rd and 9th witnesses examined on the side of the defendants. The 3rd defence witness, a karnam, fixed the value of the mittah at Rs. 24,000, while the 9th witness swore that he himself had actually offered Rs. 23,000 for it. There does not appear to be any reason why this evidence should not be accepted. The learned vakil for the defendants has not referred me to any other evidence on the point. His suggestion is that I should take the market value of the mittah to be Rs. 18,000 because that figure is mentioned in the judgment of the High Court ( Vide paragraph 2). But it seems to me that the figure Rs. 18,000 is given there only as a minimum estimate of the value and that I am not debarred from finding that the market value is more than that if there is evidence to support such a finding. The evidence to which I have been referredthat of the 3rd and 9th defence witnessesis no doubt somewhat meagre but it is sufficient. I think, in the circumstances of this, case to warrant me in finding that the market value of the mittah at the period in question was not less than Rs. 23,000. The 1st and 2nd defendants cannot reasonably complain of this valuation seeing that they themselves in their written statements maintained that the mittah was worth upwards of Rs. 30,000. I therefore hold that at the time of the breach of contract the mittah was worth Rs. 23,000.

6. It follows, then, that the plaintiffs are entitled to recover from the 1st and 2nd defendants as damages a sum of Rs. 5,250 (Rs. 23,000Rs. 17,750) plus Rs. 200 (the amount paid as earnest money), and interest at 6 per cent per annum on the latter sum (Rs. 200) from 2nd October 1909 until date of payment, and I return a finding accordingly.

This Appeal came on for hearing on the 9th day of September 1915; after the return of the finding of the Lower Court upon the issue referred to it for trial before their Lordships (Sir John Wallis, C. J. and Seshagiri Aiyar, J.)

Sir Jhon Wallis, C. J. - The remaining question in the case which is one of some difficulty and importance is whether the plaintiffs are entitled to recover damages from defendants 1 and 2 for the failure to perform their contract of sale in respect of the three eighth share of the minor members of the joint family who are the sons of the 1st defendant. Generally I assume that in India damages are recoverable for breach of a contract to sell immoveable property. It may be said generally that when a vendor who has only a partial interest contracts to sell the entirety, the purchaser may compel him to convey all his estate and interest and to allow compensation for as much as he cannot convey Leake on Contracts, 3rd Edition, page 993 citing Mortlock v. Buller (10 Ves., 316). where Lord Eldon indicates the opinion that a trustee who undertakes to sell trust property may be made to pay damages even though in the circumstances of the case the contract cannot be specifically enforced. On the other hand, in Gas Light and Coke Co. v. Towse (85 C.H.D., 519), Kay, J., held that damages could not be recovered against a trustee who leased the trust property for thirty years with a covenant for renewal for another like term, when on the expiry of the first term it turned out that to grant such a further term would not be beneficial to the trust estate and the covenant was therefore unenforceable. Kay, J., held that the lessee must have taken the covenant with his eyes open knowing that when the time came it might be impossible to enforce it, and that he could not recover damages. If he enters into it knowing exactly what the title of his vendor is, and that the carrying out of the contract eventually is subject to a possible difficulty, how can he turn round and say, although I entered into that contract with you knowing of that difficulty, still I hold you liable for damages In the present case the recitals in Exhibit A show that the purchasers had notice that the property was the joint family property of the defendants family, and that it was alleg ed that it was being sold to discharge this and other debts alleged to have been contracted for family expenses, and because the mittah was stated to be inconvenient to manage and it was desirable to sell it and invest the balance of the sale proceeds in some other manner. And according to the decision in Hunoomanpersauds case (6 M.I.A, 893), it was his duty before purchasing to enquire and satisfy himself as to the truth of the representations, and it is not alleged or proved in the case that the vendors in any way misled or deceived the vendee in the matter. It may therefore be argued that the purchasers knew the fact that the sale was liable to be set aside as not binding the other, members of the family, and that they ought not on the analogy of the case last cited to be allowed to recover damages because the Court has held the sale not binding on the minors. On the other hand it may be said that by Sect. 55 (2) of the Transfer of Property Act the vendor is deemed to contract with the buyer that the interest which the seller purports to transfer to the buyer subsists and that he has power to transfer the same. This is only in the absence of a contract to the contrary and where a seller of joint family property sets out the circumstances which he considers justify him in selling and the purchaser whose duty it is to satisfy himself as to the necessity of the sale, accepts the facts set forth as amounting to necessity, there is, I am inclined to think, sufficient ground for holding that the seller does not warrant that these facts will be accepted as sufficient by the Court and that there is sufficient ground to imply a contract to the contrary within the meaning of the section. I may add that in the interests of the minor members of joint families I think it would be undesirable to hold unless we are forced to do so that such claims are enforceable. As however my learned brother is inclined to a different opinion and the question is a novel one, we have decided to refer the following question to a Full Bench:

Whether a manager of a joint Hindu family who has agreed to sell immoveable property belonging to himself and the minor members of the family is personally liable for damages for failure to perform the contract when it is found that it is not binding on the minors.

Seshagiri Aiyar, J. - I regret very much I am unable to agree with the learned Chief Justice on the question of the vendors liability for damages.

On the findings submitted by the District Judge some important questions of law were argued. Mr. V. C. Seshacharriar contended that this Court was bound to have directed the District Judge to receive fresh evidence as we were sending down a new issue for trial. See O. 41, R. 25 of the Code of Civil Procedure I am unable to agree. The pleadings and the issues did raise the question of damages. What we did was simply to recast it. The learned vakils who appeared at the hearing did not think it necessary t hat fresh evidence should be taken. There is no force in this contention.

The second contention of the learned vakil is that the purchasers are not entitled to any damages, as the agreements to sell related to immoveable property. I feel no doubt that the English cases quoted before us are not applicable to India. It is true that the case of Flureau v. Thornhill ([1776] 2 W. Bl. 1078), has been affirmed by the House of Lords in Baini v. Fother gill ([1874] L. R., 7 H. L., 158). But the Indian legislature presumably with knowledge of the state of the law in England enacted a general rule as to damages for breach of contract in Sect. 73 of the Contract Act. This is applicable to contracts relating to moveable and immoveable properties alike. Moreover in this country, conveyancing is in its most infant stage and deeds are executed not under skilled advice and after a careful examination of the title, but by laymen unacquainted with legal precedents and principles. It would be highly inequitable under such circumstances to introduce the technical rule of English Law on this subject here. Even in the West exceptions have been gradually introduced to mitigate the rigour of the rule in Flureaus case . If the vendor refuses to convey he is liable to pay substantial damages. Williams v. Glentoh ([1866] 1 Ch. App., 200). So also where he has sold the property subsequently or where the vender guarantees expressly good title. See Sedgwick on Damages, Vol. III, page 2110, cases at the footnote. It is now well settled in America that if, the defendant fails to convey because he has not a good title, he is always liable in substantial damages. 212 United States 397. Apparently the Indian legisla ture has accepted this more equitable rule in Sect. 73 of the Contract Act. Pitamber Sundarji v. Cassibai (I.L.R., 11 Bom., 272) follows Flureaus case . But Ranchhod v. Manmohandas (I.L.R., 32 Bom., 165) and Nabinchandra Saha Paramanich v. Krishna Barana Dasi (I.L.R., 38 Cal., 458) [LQ/CalHC/1911/79] decide that Sect. 73 is comprehensive and applies to breaches of contract arising from the sale of moveable as well as of immoveable property. I respectfully follow these later decisions.

On the third question argued, I give my decision with some hesitation. It was contended for the 1st and 2nd defendants that as the plaintiffs were bound to have satisfied themselves that the sale was binding on defendants Nos. 3 to 5, they were not entitled to any damages. The position is this: there was undoubtedly an ancestral debt to be paid. The 1st and 2nd defendants agreed to sell the property with the object of paying off that debt and of investing the balance of the sale proceeds in the purchase of other lands. Defendants Nos. 3 to 5 are the sons of the 1st defendant. We held that it was not beneficial to these defendants whe were minors that ancestral property should be converted into cash to enable their father to indulge in speculative purchases. There is no question of bad faith on either side The question to be decided is almost res integra, Krishna Aiyar v. Shamanna (23 M.L.J., 610), assumes that the manager will be liable under similar circumstances. The respective obligations of the manager of Hindu family and of the alienee from him have been laid down in the well-known case of Hunoomanpersaud. It is unnecessary to quote the passage which deals with this matter. The case before the Judicial Committee was one of mortgage. The principal they laid down has been held applicable in numerous cases to sales. The principle enunciated in the above case when analysed comes to this: the power of the manager to sell family estate is not absolute. The manager should act prudently for the benefit of the estate. The purchaser ought to make bona fide enquiries regarding the necessity for the sale; and he has to satisfy himself that the manager is acting for the benefit of the estate. The difficulty arises where the manager has acted honestly and in, what he conceived to be, the best interests of all the members of the family, and the purchaser also did make enquiries and believed that the transaction was beneficial, but the Court comes to the conclusion that both of them were mistaken and refuses to decree specific performance. I think the duty is heavier on the manager than upon the purchaser. The manager in making a representation speaks for himself as well as for the minors. If, later on, the minors repudiate his representation, he must be deemed to have made an untrue representation on behalf of the minors. I can think of cases where the purchaser does not take the ordinary precautions and acts recklessly. In such cases, the purchaser can claim no damages. But where both parties act to the best of their lights, but the Court is unable to uphold the transaction, the vendor must suffer. Both the Specific Relief Act and the Transfer of Property Act suggest that ordinarily the vendor guarantees good title. Even if the defect is not due to wilful concealment or misrepresentation, the law must cast on the guarantor the liability to make good the loss sustained by the purchaser. However as the question is one of first impression and of considerable importance, I agree with the learned Chief Justice that the question should be referred to the decision of a Full Bench.

[This Appeal came on for hearing on the 16th day of October 1936, before the Full Bench as constituted above.]

Mr. V. C. Seshacharriar for the 3rd, and 4th Respondents (vendors): - The purchaser under the contract of sale is not entitled to claim damages in a case like this where he is dealing with the manager of a joint Hindu family consisting of minor members as well. Under the Hindu Law, the purchaser of joint family property from a qualified owner is bound to make reasonable inquiries and satisfy himself about the necessity for the sale and its binding character on the minors. The duty is primarily cast upon him to see if the proposed sale is for a justifiable family purpose and consequently when it is found that the sale is not for the benefit of the minors and on that ground could not be enforced, the purchasers claim to damages is clearly negatived. Hanuman Persauds case was referred to.

The claim for damages cannot be sustained on another ground also. The contract relating to sale of immoveable property, no damages are recoverable. Sect. 73 of the Contract Act applies only to moveable property and has no application to the present case. The English law also makes a similar distinction between the case of sale of personal and real property and does not allow damages for breach of contract of the latter description. The cases of Gas Light and Coke Co. v. Towse (35 Ch. D., 519), Bain v. Fothergill (I.L.R., 7 H.L., 158) and Flureau v. Thornhill (2 W. Bl., 1078) make the position very clear. See also 11 Bom., 272.

Again, Sect. 55 (2) of the Transfer of Property Act has no application to the present case since the word seller occurring, therein connotes only a seller who has parted with his title and not a person who as here has merely agreed to convey the properties but has not yet executed the conveyance. Even if the section applies, there is in the present case a contract to the contrary within the meaning of that section since the purchaser was aware of facts which showed that the seller had not the power which he professed to transfer the property in question. The purchaser having had knowledge of the questionable nature of the transaction has disentitled himself to his right to damages.

Mr. S. Varadachariar for Mr. A. Krishnaswami Aiyar for the 1st and 2nd Respondents:The intending purchasers whose, right to specific performance of the contract of sale cannot be enforced are at least entitled to damages as an alternative relief. In this case, the vendor who was the manager of the joint family made a representation that there was necessity for the alienation and the purchaser relied and acted upon it. The vendor is therefore liable for the loss due to such misrepresentation. The duty of the buyer to satisfy himself about the legal nec essity for an alienation does not affect the liability of the vendor for damages for breach of his contract. The rule enunciated in Hanuman Persauds case has no bearing on this question.

Sect. 73 of the Contract Act clearly applies to this case since its language is very wide and general and provides for cases of breach of contract relating to sale of moveable as well as immovable property. There is nothing to warrant the narrower construction sought to be put on the section by the other side.

The English Law does not allow compensation in the case of contracts to sell real property because of the peculiar conditions as to land tenures and title-to land prevailing in England and those cases have no application even by way of analogy to India where the conditions are entirely different. Indian Courts have refused to follow the English rule. See 32 Bom., 165 and 38 Cal., 45

8. The case in 28 M. L. J., 610 also authorises the awarding of damages in a case like the present.

Coming lastly to sect. 55 (2) of the Transfer of Property Act, this section applies to the present case and there is nothing to restrict its application only to completed sales as distinguished from executory contracts of sale. And the fact that the purchaser was aware that he was dealing with the manager of a joint Hindu family consisting of minors does not constitute a contract to the contrary to take the case out of the section. This point has been decided in numerous cases which hold that a purchaser having knowledge of the defect in title of the vendor does not thereby lose the benefit of the covenant in Sect. 55 (2) of the Act. See 1 L.W., 849, 852,M.L.J., 184 and 29 I-C., 747.

Opinions:

Abdur Rahim, J.

[1] The question referred to us is whether a manager of a joint Hindu family who has agreed to sell immoveable property belonging to himself and the minor members of the family is personally liable for damages for failure to perform the contract when it is found that, it is net binding on the minors. The facts briefly speaking upon which the question arises seem to be that the vendor the managing member of the family represented that circumstances existed which entitled him to sell the property and the intending purchaser, relying upon that representation, agreed to purchase the property. It is, however, found that the sale did not bind the minors shares as there was no necessity for the sale though both the contracting parties believed that there was and acted in good faith. That, as I understand it, is the result of the findings of the learned Judges who have referred the question to the Full Bench.

[2] There is no question but that Section 73 of the Contract Act applies. Under this enactment it makes no difference as to the liability for damages caused by breach of contract whether the contract was for sale of moveable or immoveable property. It lays down that the aggrieved party is entitled to compensation for any loss or damage caused to him by the breach of contract which naturally arose in the usual course of things from such breach or which the party knew when they made the contract to be likely to result from the breach of it.

[3] The learned Chief Justice is of opinion that the buyer in such a case as this is not entitled to damages, relying mainly on the decision in Gas Light and Coke Co v. Towse (1887) 35 Ch. D. 51

9. That decision was based by Mr. Justice Kay on the ruling in Bain v. Fothergill (1874) L.R. 7 H.L. 158 : 96 E.R. 635, in which it was held on the authority of Flureau v. Thornhill (1776) 2 W. Bl. 1078, " If a person enters into a contract for the sale of a real estate knowing that he has no title to it, nor any means of acquiring it, the purchaser cannot recover damages beyond the expenses he has incurred by an action for the breach of the contract; he can only obtain other damages by an action for deceit," In the same case Lord Hatherly stated "a contract for sale of a real estate is very different indeed from a contract for a sale of a chattel, where the vendor must know what his right to the chattel is." Especial reliance is placed on a passage in the judgment of Kay, J. "If he (meaning the person in whose favour a trustee leased the trust property for a certain term with a covenant for renewal for another like term) enters into it knowing exactly what the title of his vendor is, and that the carrying out of the contract eventually is subject to a possible difficulty, how can he turn round and say although I entered into that contract with you knowing of that difficulty, still I hold you liable for damages " That observation again is founded on the doctrine that contracts for sale of immoveable property stand on a peculiar footing different from that of other contracts. That the rule in Flureau v. Thornhill (1776) 2 W. Bl. 1078, is of an anomalous nature and has been upheld mainly as it had been recognised in a series of cases in England extending over a long period of time and arising out of the peculiar difficulties of conveyancing with respect to immoveable property in that country, is made clear by the fact that English Judges themselves have refused to extend the doctrine any further. For instance it has been decided that the rule would not be applied to cases where the inability of the vendor to perform the contract was due to his not having first secured to himself the property which be assumes to sell or to his failure to make out the title due to his unwillingness to remedy the defect. See Engel v. Fitch (1868) L.R. 3 Q.B. 314 and Day v. Singleton (1899) II. Ch. 320. Justice Fry in his book on Specific Performance describes the rule established by Flureau v. Thornhill (1776) 2 W. Bl. 1078 and Bain v. Fothergill (1874) L.R. 7 H.L. 158 as an exceptional and anomalous rule.

[4] In India, Macleod, J. in Ranchhod v. Manmohandas (1907) I.L.R. 32 B. 165 and Stephen, J. in Nabin Chandra Saha Paramanick v. Krishna Barana Dasi (1911) I.L.R. 38 C. 458, refused to follow that rule. There is only one case brought to our notice in which it was adopted, namely, Pitamber Sundarji v. Cassibai (1886) I.L.R. 11 B. 272, but I do not find that the effect of Section 73 of the Contract Act was taken into consideration there. In Madras, in the case in Krishna Aiyar v. Shamanna a vendor who failed to make out a good title was held liable in damages though it may be noted that the question of applicability of the rule laid down by Flureau v. Thornhill (1776) 2 W. Bl. 1078 and Bain v. Fothergill (1874) L.R. 7 H.L. 158 was not raised or discussed. The matter however was fully considered in Nabin Chandra Saha Paramanick v. Krishna Barana Dasi (1911) I.L.R. 38 C. 458 and Ranchhod v. Manmohandas (1907) I.L.R. 32 B. 165.

[5] It is then argued that since by the Hindu Law as well established by Hunooman Persaud s case the duty is laid on the purchaser in a case such as this to satisfy himself as to necessity for the sale, therefore the manager of a Hindu family who contracted to sell the property of the minor co-parceners is not answerable in damages. But the rule laid down in Hunooman Persaud s case is concerned with the question of liability of persons other than the vendor, that is, whether the acts of the manager would bind the minors, where no necessity is shown for the sale. It does not, in my opinion, affect the question of liability of the contracting party himself for damages for breach of the contract in case it turns out that he was not entitled to sell the property.

[6] In this case it appears from Exhibit A that the vendor represented that there was

necessity for selling the property in dispute. The purchaser, so far as the question lay between him and the vendor, was entitled to rely on that representation. If the representation proved to be incorrect as it eventually did, I fail to see any reason why the vendor should not be held responsible for any loss that resulted, therefrom to the buyer.

[7] It is however to be noticed that in the proposition referred to the Pull Bench no mention is made of any express representation on the part of the manager of the family.

[8] The question is then raised whether Section 55, Sub-section 2 of the Transfer of Property Act applies and if it does, whether from the fact that the buyer knew that the property belonged to the family of which the vendor was only the managing member, it can b3 deduced tint there was a "contract to the contrary," within the meaning of Section 5

5. Section 55 deals with rights and liabilities of buyer and seller. Sub-section 2 enacts that in the absence of a contract to the contrary, the seller shall be deemed to contract with the buyer that the interest the seller professes to transfer to the buyer subsists and that he has power to transfer the same. It is argued that this applies only to cases where the transaction is still in the executory stage. But I find nothing in the language of the section nor can I perceive any reason which would justify such a distinction. What the legislature intended apparently was that subject to any special stipulations to the contrary, certain stipulations would be presumed in every transaction of sale of immoveable property and a warranty of title on the part of the seller is one of those stipulations. It is not easy to understand how the legislature could import a stipulation of this nature in a transaction of sale without implying at the same time that it should be taken as having formed part of the contract which became perfected in the sale.

[9] Then the mere fact that the intending purchaser knew that the property belonged to the family cannot in my opinion be said by itself to imply a contract on the part of the buyer that the seller purporting to have power to sell the property would be absolved from liability if it turned out that he had no such power. See Arunachala Aiyar v. Ramasami Aiyar and Subbaraya Reddiar v. Rajagopala Reddiar (1914) M.W.N. 376.

[10] For these reasons I agree with the view expressed by Seshagiri Aiyar, J., in the order of reference and would answer the question referred to us in the affirmative.

Sadasiva Aiyar, J.

[11] In Krishna Aiyar v. Shamanna , (decided by Ayling and Napier, JJ.) it was held (at page 617) that where the 1st defendant, an adult member of a Hindu family professing to be the managing member (when he was not the managing member) agreed to sell the family lands including the interests of the other members, he became liable in damages to the intending purchaser if he was unable to establish his power to sell the interests of the other members. That case, which in my opinion, was a weaker case for the purchaser, was argued by able members of the Bar on both sides (Mr. K. Srinivasa Aiyangar, Mr. B. Sitarama Rao and Mr. T. Rangachariar). The 1st defendant in that case died pending the litigation, no claim for images had been made in the plaint against him, and yet the Horned Judges, when damages were claimed by the respondents learned vakil for the first time on appeal, held that damages could and should be awarded against the 1st defendant s legal representative. (Section 16 of the Specific Relief Act mentioned at page 617 of the report is probably a clerical error for Section 19 read in the light of Section 29). The purchaser in that case made the contract with the eldest son (1st defendant) though the father (5th defendant who was the managing member de jure) was alive and yet the purchaser was awarded damages. Here, the manager de jure himself agreed to make the sale.

[12] Under Section 55(2) of the Transfer of Property Act" in the absence of a contract to the contrary the seller shall be deemed to contract with the buyer that"...(the seller) "has power to transfer the interests which" he "professes to transfer to the buyer." I am unable to hold that the fact that the buyer had notice of facts which indicated that the seller had not the power which he professed to be able to transfer implies " a contract to the contrary." Napier, J. and myself in Arunachella Aiyar v. Ramasami Aiyar held that the covenant in Section 55, Clause (2) is not excluded by the mere fact that the vendee was aware of the defect in the title. The same view was taken by Hannay, J. sitting with myself in Thekkamannengath Raman alias Kochu Poduval v. Kakkasseri Pazhiyot Manakkal Karnavan (1915) 29 I.C. 747, and by Ayling and Tyabji, JJ. in Vellayappa Rowthen v. Bava Rowthen (1915) 29 I.C. 747. Seshagiri Aiyar, J. has taken the same view in this case and in a prior case. I am not prepared therefore to follow the English decision in Gas Light and Coke Co. v. Towse (1889) L.R. 35 Ch. D. 519 (itself differing from a prior English decision, Mortlock v. Buller (1804) 10 Ves. 292 316 : s.c. 32 E.R. 857, especially as English courts are rather more inclined to shield from claims for damages the vendors of lands situated in England where no system of public registry of title-deeds seems to have existed originally as in India, where the codification of the laws relating to transfers of lands seems not to be so complete and systematic as here, and where the extreme form of the doctrine of caveat emptor prevailed originally.

[13] But is Section 55(2) of the Transfer of Property Act j applicable to the facts of this case The word "seller", in Section 55 Clause 1 as applied to the provisions of Sub-clauses (a) to (d) of that section can, it appears to me, mean only a person who has contracted to sell but has not yet sold. In Sub-clauses (e) and (g) it seems, however, to mean the person who has not only contracted to sell but has also actually sold. In Sub-clause (f) it seems to mean the same thing where possession ought naturally to follow only on the completion of the sale, that is, in cases where a registered conveyance is necessary to convey title but it might include also a person who has only contracted to sell when the delivery of possession itself has to be made to complete the sale (as in the case of a sale of property worth less than Rs. 100 and not effected by a registered conveyance). In Clause 2, (with which we are concerned,), the word "seller" seems to mean the same thing as in Sub-clauses (e) and (g) of Clause 1, that is, a person who has actually parted with his title. [See the use in Clause (2) of the words " professes to transfer" and not " contracted to transfer"]. The defendants Nos. 1 and 2 in this case not having executed any conveyance are not therefore "sellers" under Clause (2) of Section 55 and I think that the contention that Section 55 Clause (2) of the Transfer of Property Act does not apply is well founded. However, the plaintiff is entitled, in my opinion, to rely on Section 73 of the Contract Act which is very wide in its terms as regards the right to compensation for breach of any kind of contract. If A chooses to contract to sell to B full ownership right in a property and breaks that contract through inability (not attributable to act of God, etc.) to convey the full title, he is legally bound to make compensation to B under Section 7

3. I do not think that the knowledge on the part of B that A had not the complete title which he contracted to transfer can vary the term of the contract by which A did agree to transfer a complete title; nor can such knowledge on the part of B itself constitute an implied contract to the contrary, subtracting from or rather contradicting the express term of the contract to convey full ownership. The contract in this case is moreover a written one (Exhibit A) and cannot under Section 92 of the Evidence Act be contradicted by a contemporaneous implied (or even express) oral agreement sought to be inferred from mere knowledge of certain facts on the part of the plaintiffs.

[14] I therefore concur in answering the question referred to us in the affirmative.

Napier, J.

[15] I agree in answering the question referred to us in the affirmative. The learned Chief Justice bases his doubt on the point on the language of Section 55, Sub-section 2 of the Transfer of Property Act and is inclined to think that the well known duty of a purchaser from the manager of a joint Hindu family is sufficient to indicate a "contract to the contrary," and to bring the case within the doctrine laid down by Mr. Justice Kay in the Gas Light and Coke Co. v. Towse (1889) 35 Ch. D. 51

9. I have myself some doubt whether Sub-section 2 of Section 55 applies where the transaction has not gone beyond the stage of contract, the words "professes to transfer" seeming to indicate that the stage of actual transfer has been reached and the provision for this implied contract being annexed to the interest also seeming to suggest that the interest had been created. It is not however necessary to decide the point, for I am of opinion that the doctrine in Gas Light and Coke Co. v. Towse (1889) 35 Ch. D. 519 cannot be applied on the construction of the words " a contract to the contrary." It does not appear from the language used by Kay, J. that he regarded it in this light, for he appears to have treated it as a case of contract that became impossible of performance owing to circumstances in contemplation by both parties. The question then resolves itself into one under the Contract Act and unless there is any limitation of the right to recover compensation for loss or damage caused to the party who has suffered by the breach, the consequences of the section must apply. There is no doubt that according to the English law, broadly speaking, purchasers are not entitled to recover such damages for breach of an agreement to sell real property, but are limited to such expenses as they may have incurred in investigating the title, the right to recover which is stated in Compton v. Bagley (1891) 1 Ch. 313 as not being in the nature of damages-vide cases quoted by Seshagiri Aiyar, J., in his judgment of reference; but this is admittedly an exception to the ordinary law, due as stated in Day v. Singleton (1899) 2 Ch. 320, to the uncertainty of making out a good title owing to the complexity of the English law of real property. This exception however has not been recognised in India-vide Ranchhod v. Manmohandas (1907) I.L.R. 32 Bom. 165, Nabin Chandra Saha Paramanick v. Krishna Barana Dasi (1911) I.L.R. 38 Cal. 458, and Krishna Aiyar v. Shamanna . There still remains to consider the doctrine applied by Kay, J. It is not the doctrine of subsequent absolute impossibility which is provided for in Section 56 of the Contract Act and I know of no principle governing contracts generally which disentitles a party to recover damages for breach of a contract where it might only be impossible to enforce it. The doctrine, if sound, must be confined to real property in England, contracts with reference to which are treated with leniency under English law and I see no reason why we should apply this doctrine either in Ind

[16] It has been negatived by a Bench of this Court in Arunachala Aiyar v. Ramasami Aiyar ,in which case the Judges follow the decision of a single Judge in Subbaraya Reddiar v. Rajagopala Reddiar (1914) I.L.R. 38 Mad. 887, holding that the question of the knowledge of the purchaser does not affect the right to be indemnified under the Indian Statute Law, and in Thekkumannengath Raman alias Kochu Poduval v. Kakkasseri Pazhiyot Manakkal Karnavan , another Bench of this Court held that the question of the knowledge of a mortgagee as to the defect of title in the mortgagor is irrelevant on the same principle. I am in entire accord with this view and would hold that the law as laid down in Gas Light and Coke Co. v. Towse (1889) 35 Ch. D. 519, is not applicable to this country.