1981 (2) TMI 249 - HC - Indian Laws

Property Buyer's Damages Claim Denied for Defective Title Purchase: Time-Barred Refund Request Dismissed

The plaintiff's claim for damages was denied as they knowingly purchased the property with defective title for speculative purposes. The court found the ... - Issues Involved:1. Entitlement to damages.2. Limitation period for claiming refund of sale consideration.Issue-wise Detailed Analysis:1. Entitlement to Damages:The plaintiff purchased property from the fourth defendant under a sale deed dated June 16, 1968. The plaintiff alleged that defendants 1 to 3 obstructed his enjoyment of the property. The fourth defendant contended that the property belonged to an inamdar and that the plaintiff had not paid the full sale consideration. The District Munsiff found that the plaintiff was not entitled to declaration, injunction, or recovery of possession but decreed damages against the fourth defendant.On appeal, the District Judge found that the fourth defendant had no title or possession of the suit property and that the plaintiff had purchased the property knowing it was a litigation risk. The principle established in Ramalinga Padayachi v. Natesa (AIR 1967 Mad 461) was applied, stating that a purchaser aware of the vendor's defective title cannot claim damages for breach of the covenant for title. The judgment emphasized that the plaintiff had not acted on any misrepresentation but had deliberately purchased the property to speculate on litigation, thus not entitling him to damages.2. Limitation Period for Claiming Refund of Sale Consideration:The primary question was whether the claim for refund of the sale consideration was barred by limitation. The court referred to the decision in Subbaraya Reddiar v. Rajagopala Reddiar (ILR 38 Mad 887: AIR 1915 Mad 708), which classified cases into three categories regarding when the cause of action for damages arises. The relevant category here was where the vendor had no title from the inception and the vendee was not put in possession. In such cases, the limitation period starts from the date of sale.The Supreme Court in Ramaswami v. Muthukrishna ([1966] 3 SCR 608) affirmed this principle, stating that breach occurs on the disturbance of possession. Since the plaintiff was never put in possession, the breach occurred on the date of the sale, June 16, 1969. The suit filed in September 1972, more than three years later, was thus barred by limitation according to Article 55 of the Limitation Act, which provides a three-year period from the date of breach.The second appeal was dismissed, and the suit was deemed barred by limitation, with no order as to costs.Conclusion:The judgment concluded that the plaintiff was not entitled to damages as he knowingly purchased the property with defective title to speculate on litigation. Additionally, the claim for refund of the sale consideration was barred by limitation, as the breach occurred on the date of sale and the suit was filed beyond the permissible period.