Law: Limitation Act, 1908

Section: 116

Law: Punjab Tenancy Act, (XVI of 1887)

Section: 60

Law: Transfer of Property Act, 1882

Section: 55(2)

Limitation Act (IX of 1908), Art 116-Period starts from time when contract is broken-Contract of sale of occupancy rights without consent of landlord-Successful action by landlord to set aside sale-Buyer is entitled to damages and can claim return of purchase money. 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 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. 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 a further safeguard, however, that the seller should be deemed to contract that he has power to transfer the interest which he does transfer. Here, 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 void-able at the instance of the landlord". Conse­quently, 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. Tricomdas Cooverji v. Sri Gopinath Jiu A I R 1916 P C 182 ; Subharoya v. Rajagopala I L R 38 Mad. 887 ; Hanuman v. Hanuman 27 I C 889 and Vatakka v. Ramaswami I L R 19 Cal. 123 P C ref. JUDGMENT KAYANI, J.-Regular Second…

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