Appeal No 7 of 1964
Appeal from the judgment and decree dated January 7 1955 of the Madras High Court in Appeal Suit No 371 of 1959
609 R Ganapathy Iyer and R Thiagarajan for appellants
In the suit which is the subject matter of this appeal the plaintiffs alleged that Plaint A  Schedule properties belonged to the second defendant and his son the third defendant
The second defendant sold the village for Rs 28000 to one Swaminatha Sarma by a sale deed exhibit A dated December 12 1912 which he executed for himself and as guardian of the third defendant who was then a minor
The second defendant also agreed to indemnify any loss that might be caused to his vendee in case the sale of his minor son s half share should later on be set aside
Accordingly the second defendant executed the Indemnity Bond exhibit
B in favour of Swaminatha Sarma
The sons of Swaminatha Sarma sold Plaint A  Schedule village to the father of the Plaintiffs for a sum of Rs 53000 
On the same date they assigned the Indemnity Bond exhibit
B to the father of the plaintiffs under an Assignment Deed exhibit
The third defendant after attaining majority filed OS No 640 of 1923 in the Chief Court of Pudukottai for setting aside the sale deed exhibit
A in respect of his share and for partition of joint family properties
The plaintiffs were impleaded as defendants 108 and 109 in that suit
The suit was decreed in favour of the third defendant and the sale of his share was set aside on condition of his paying a sum of Rs 7000 to defendants 108 and 109 and a preliminary decree for partition was also granted
In further proceedings the village was divided by metes and bounds and a final decree exhibit F was passed on October 6 1936
Meanwhile a creditor of the third defendant obtained a money decree and in execution thereof attached and brought to sale the third defendant s half share in the A  Schedule village
In the auction sale Subbaiah Chettiar the plaintiff s brother in law purchased the property for a sum of Rs 736 subject to the liability for payment of Rs 7000 under the decree in OS No 640 of 1923
Thereafter the plaintiffs have brought the present suit on the allegation that they have sustained damage by the loss of one half of the A  Schedule village and are entitled to recover the same from the second defendant personally and out of the B  Schedule properties
The plaintiffs have claimed damages to the extent of half of the consideration for the sale deed exhibit
C minus Rs 7000 withdrawn by them
The plaintiffs claimed a further sum of Rs 500as Court expenses making a total of Rs 20000
The suit was contested on the ground that the Court sale in favour of Subbaiah Chettiar was benami for the plaintiffs and the latter never lost ownership or possession of a half share of the A  Schedule village and consequently the plaintiffs did not sustain any loss
The trial court held that Subbaiah Chettiar PW I was benamidar of 610 the plaintiffs who continued to remain in possession of the whole village
The trial court was however of the opinion that though the plaintiffs had in fact purchased the third defendant s halfshare in the Court sale they were not bound to do so and they could claim damages on the assumption that third parties had purchased the same
The trial court accordingly gave a decree to the plaintiffs for the entire amount claimed and made the payment of the amount as charge on B  Schedule properties
The second defendant took the matter in appeal to the Madras High Court which found that the only loss actually sustained by the plaintiffs was the sum of Rs 736 paid for the Court sale and the sum of Rs 500 spent for the defence of OS No 640 of 1923
The High Court accordingly modified the decree of the trial court and limited the quantum of damages to a sum of Rs 1236 and interest at 6 per cent pa from the date of the suit
The question presented for determination in this appeal is what is the quantum of damages to which the plaintiffs are entitled for a breach of warranty of title under the Indemnity Bond exhibit
B dated December 19 1912
It was contended by Mr Ganapathy Iyer on behalf of the appellants that in OS No 640 of 1923 defendant No 3 obtained a partition decree and a declaration that defendant No 2 was not entitled to allenate his share in the A  Schedule properties
It was submitted that on account of this decree the appellants lost title to half share of A  Schedule properties and accordingly the appellants were entitled to get back half the amount of consideration under the Indemnity Bond exhibit
The argument was stressed on behalf of the appellants that the circumstance that the plaintiffs had a title of benamidar to the half share of the third defendant in Court auction was not a relevant factor so far as the claim for damages was concerned
It was suggested that the purchase in court auction was an independent transaction and the defendants could not take the benefit of that transaction
We are unable to accept the contention of the appellants as correct
In the present case it should be observed in the first place that the Indemnity Bond exhibit
B states that defendant No 2 shall be liable to pay the amount of loss in case the sale of the share of the said minor son Chidambaram is set aside and you are made to sustain any loss
In the second place it is important to notice that the sale deed exhibit
A executed by the second defendant in favour of Swaminatha Sarma was only voidable with regard to the share of the third defendant and the family properties
The sale of the half share of defendant No 3 was not void ab initio but it was only voidable if defendant No 3 chose to avoid it and proved in Court that the alienation was not for legal necessity
In a case of this description the Indemnity Bond becomes enforceable only if the vendee is dispossessed from the properties in dispute
A breach of the 611 convenant can only occur on the disturbance of the vendee s possession and so long as the vendee remains in possession he suffers no loss and no suit can be brought for damages either on the basis of the Indemnity Bond or for the breach of a convenant of the warranty of title
The view that we have expressed is borne out by the decision of the Madras High Court in Subbaroya Reddiar vs Rajagopala Reddiar 1 in which A who had a title to certain immovable property voidable at the option of C sold it to B and put B in possession thereof
C then brought a suit against A and B got a decree and obtained possession thereof in execution
In this state of facts it was held by Seshagiri Ayyar J that B s cause of action for the return of the purchase money arose not on the date of the sale but on the date of his dispossession when alone there was a failure of consideration and the article applicable was article 97 of the Limitation Act
At page 889 of the Report Seshagiri Ayyar J states The cases can roughly speaking be classified under three heads a where from the inception the vendor had no title to convey and the vendee has not been put in possession of the property b where the sale is only voidable on the objection of third parties and possession is taken under the voidable sale and c where though the title is known to be imperfect the contract is in part carrried out by giving possession of the properties
In the first class of cases the starting point of limitation will be the date of the sale
That is Mr Justice Bakewell s view in Ramanatha Iyer vs Ozhapoor Pathiriseri Raman Namburdripad  and I do not think Mr Justice Miller dissents from it
However the present case is quite
different
In the second class of cases the cause of action can arise only when it is found that there is no good title
The party is in possession and that is what at the outset under a contract of sale a purchaser is entitled to and so long as his possession is not disturbed he is not damnified
The cause of action will therefore arise when his right to continue in possession is disturbed
The decisions of the Judicial Committee of the Privy Council in Hanuman Kamat vs Hanuman Mandur I Cal
123 PC and in Bassu Kuar vs Dhum Singh I 889 ILR II All
47 PC are authorities for this position
 A similar view has been expressed by the Allahabad High Court in Muhammad Siddiq vs Muhammad Nuh 2 and the Bombay High Court in Gulabchand Daulatram vs Survajirao Ganpatrao3 In the present case it has been found by the High Court that PW 1 the auction purchaser was the brother in law of the plaintiffs 1 ILR 2 ILR 52 All 604
3 AIR 1950 Bom
612 and that he was managing the estate of the plaintiffs and defending OS 640 of 1923 on their behalf It has also been found that PW I did not take possession at any time and plaintiffs have been cultivating and enjoying the whole village all along and at no time were the plaintiffs dispossessed of the property
The only loss sustained by the plaintiffs was a sum of Rs 736 paid at the Court sale and a sum of Rs 5001 spent for the defence of OS No 640 of 1923 which the plaintiffs had to incur for protecting the continuance of their possession over the disputed share of land
Accordingly the High Court was right in granting a decree to the plaintiffs only for a sum of Rs 1236 which was the actual loss sustained by them and they are not entitled to any further amount
For these reasons we hold that there is no merit in this appeal which is dismissed with costs
Appeal dismissed


Summary:
The second defendant sold property belonging to himself and his minor son the third defendant
and also executed an indemnity bond in favour of the vendee agreeing to indemnify him for any loss that might be caused to him in case the sale of the third defendant s half share should later on be set aside
vendee sold the property to the plaintiffs and assigned the indemnity bond in their favour and the plaintiffs took possession of the property
The third defendant after attaining majority sued for setting aside the sale in respect of his half share and for partition
The plaintiffs contested the suit but the third defendant s suit was decreed
He however did not dispossess the plaintiffs
Meanwhile a creditor of the third defendant obtained a money decree against him and in execution thereof attached and brought to sale the third defendant s half share and the brother in Law of the plaintiffs purchased the property but the plaintiffs continued in possession of the property
The plaintiffs thereafter filed the suit for recovery of half the consideration paid by them on the allegation that they sustained damage by the loss of one half of the property bought by them and that they were entitled to recover damages from the second defendant
The suit was contested on the ground that the court sale in favour of the brothers in law of the plaintiffs was benami for the plaintiffs and that as the plaintiffs never lost ownership or possession of the halfshare they did not sustain any loss
The trial court decreed the suit
The High Court on appeal confined the decree to the actual loss sustained namely the amount for the court sale and the amount spent for the defence of the third defendant s suit
In appeal to the Court on the question of the quantum of damages to which the plaintiffs were entitled HELD  High Court was right in granting a decree to the plaintiffs only for the sum which was the actual loss sustained by them
The sale of the half share of the third defendant was not void ab initio but was only voidable
In such a case the indemnity bond becomes enforceable only if the vendee is dispossesed from the properties because a breach of the covenant can only occur on the disturbance of the vendees possession
SD long as the vendee remains in possession he suffers no loss and no suit can be brought for damages either on the basis of the indemnity bond or for the breach of a convenant of the warranty of title
610 H 611 B Subbaroya Reddiar vs Rajagopala Reddiar Mad 887 Muhammad Siddiq vs Muhammad Nuh ILR 52 All 604 and Gulabchand Daulatram vs Suryaji Rao Ganpatrao AIR 1950 Bom
401 approved