P L D 1954 Lahore 74 (PLP)

116. For compensation for the breach of a contract in writing registered. Six years. When the period of limitation would begin to run against a suit brought on a similar con tract not regis tered. Column there against article 116 apparently article 115, which is as follows :‑

115. For compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided for. Three years. When the con tract is broken, etc. Thus the period of six years in article 116 starts from the time "when the contract is broken." Now although it is true that the present case can aptly be described as a case in which money was paid upon an existing consideration which failed by reason of the landlord's action under section 60 of the Tenancy Act, and therefore a case falling under article 97, the decision of the Privy Council in Tricomdas Cooverji v. Sri Gopinath Jiu (A I R 1916 (P C) 182), has made article 116 applicable to all cases of compensation for breach of contract where the writing is registered, even when a special provision for a different period of limitation exists. That case related to arrears of rent, for which article 110 expressly pro vides, but as the rent deed was registered, their Lordships applied article 116, with the following remarks: "Both these Acts (i.e. the Acts of 1871 and 1877) drawn as the Act of 1859 had drawn, a broad distinction between unregistered and registered instruments much to the advantage of the latter. The question eventually arose whether a suit for rent on a registered contract in writing came under the longer or the shorter period. On the one hand, it has been contended that the provision as to rent is plain and unambiguous, and ought to be applied, and that in any case, compensation for the breach of a contract' points rather to a claim for unliquidated damages than to a claim for payment of a sum certain. On the other hand, it has been pointed out that 'compensation' is used in the Indian Contract Act in a very wide sense, and that the omission from Article 116 of the words, which occur in Article 115, 'and not herein specially provided for', is critical. Article 116 is such a special provision, and is not limited and, therefore, especially in view of the distinction long established by these Acts in favour of registered instruments, it must prevail . . . Their Lordships accept the interpretation so often and so long put upon the statute by the Courts in India, and think that the decisions cannot be disturbed." The only question, therefore; which remains to be decided is whether there was a breach of contract in the present case, and if so, when was the contract broken. It is now settled law that section 55 (2) of the Transfer of Property Act implied a. covenant for title‑"The seller shall be deemed to contract with the buyer that the interest which A the seller professes to transfer to the buyer subsists and that he has power to transfer the same".‑--If, therefore; a defect in title is discovered after conveyance, the contract is broken. Even if the buyer was aware of the defect at the time of the contract, he may under this covenant, hold the seller responsible in damages and claim a return of the purchase‑money. See, among others Subharoya v. Rajagopala (I L R 38 Mad. 887). But this is a peculiar case. The interest which the seller professed to transfer was that of an occupancy tenant and he did not contract to transfer anything more. To that extent, therefore, no defect in title has been discovered. There is d further safeguard, however, that the seller should be deemed to contract that he has power to transfer the interest which he does transfer. Here, I think, the contract breaks, for the seller has no power to transfer the tenancy without the consent of the landlord. Under section 60 of the Tenancy Act, any transfer made of a right of occupancy in contravention of the provisions of Chapter 5‑that is to say, without the landlord's consent‑ "shall be voidable at the instance of the landlord". Conse quently, when the tenant makes a transfer in contravention of those provisions, since the transfer carries with it an implied guarantee that he has power to make it, if that power is found defective, there should co‑exist an implied guarantee that in the event of action by the landlord under section 60, the vendee would be compensated. The knowledge of the vendee as to limitations, as already noticed, makes no difference. In Subharoya v. Rajagopala (supra) where a sale was set aside at the instance of one of the reversioners, it was taken for granted that section 55 (2) applies to transactions which are initially valid but which can be avoided at the instance of third parties. This was so, apparently on the authority of Hanuman v. Hanuman (I L R 19 Cal. 123 (P C)), where a sale by one member of a joint family was challenged by other members when the vendee applied for possession: "Their Lordships are inclined to think that the sale was not necessarily void, but was only voidable if objec tion were taken to, it by the other members of the joint family. If so, the consideration did not fail at once, but only from the time when the appellant endeavoured to obtain possession of the property, and being opposed, found himself unable to obtain possession". I must admit that the view taken in Vatakka v. Ramaswami (27 I C 889), would not appear to be favourable to this interpretation, but that case was dealing with a sale of a "Karamkari tenure" which "by its very nature" was "inalienable", and there was no question of the sale being voidable at the option of the landlord, In any case, I am inclined, most respectfully, to take the contrary view as to the "power to transfer" which is implied in the present sales. The point from which limitation starts is immaterial, because the two suits are within six years even from the date of contract. The appeal and revision are, therefore, dismissed with costs. K. M. A. Appeal dismissed.