Shah v Khan (Civil Appeal No. 4 of 1948) [1948] EACA 8 (1 January 1948)

COURT OF APPEAL FOR EASTERN AFRICA

Before Sir Barclay Nihill, C. J. (Kenya), EDWARDS, C. J. (Uganda), and SIR JOHN GRAY, C. J. (Zanzibar)

SHANTILAL LALJI SHAH, Appellant (Original Plaintiff)

GULZAR BEGUM W/O LALL KHAN, Respondent (Original Defendant) Civil Appeal No. 4 of 1948

(Appeal from decision of H. M. Supreme Court of Kenya)

Vendor and purchaser—Agreement—Specific performance—Purchaser failing to tender conveyance for execution-Indian Transfer of Property Act, 1882, Section 55 (1) (d)—Waiver of formality by vendor.

On 22nd January, 1946, the Appellant entered into a written agreement with the Respondent to purchase from her certain property in Park Road, Nairobi, for Sh. 27,500.

According to the terms of the agreement the Appellant was to deposit forthwith Sh. 7,500 in part payment with the Respondent, and to deposit the balance of Sh. 20,000 with his advocate pending completion of the sale, and the Appellant, on tendering a conveyance to the Respondent was to be given vacant possession. The deposits were made by the Appellant in compliance with the terms of the agreement, but at the time of the agreement the building on the plot was not quite completed.

The Appellant requested the Respondent several times to finish the work on the house so that he could have possession and, finally, on visiting the premises, found the Respondent to be in personal occupation. His advocate then sent a formal notice to the Respondent calling upon her to complete the transaction and hand over vacant possession within a specified period, but on receiving no reply a suit was filed seeking specific performance of the agreement. The Respondent's written defence was, inter alia, that no conveyance had been tendered to her by the Appellant, that she had offered vacant possession of the premises, but as they remained vacant, to avoid loss of interest, she occupied them herself, and that, without prejudice, she was willing to complete the transaction on obtaining suitable accommodation, but the learned trial Judge held that as the Appellant had not tendered a conveyance the suit was premature The Appellant appealed.

Held (6-8-48).—(1) That, generally speaking, a Purchaser must tender a conveyance to the Vendor for execution, but there may be cases in which the Vendor either expressly, or by conduct impliedly, waives that formality.

(2) That the Respondent's conduct showed that she had waived the formality of tender of a conveyance.

Appeal allowed. Respondent ordered to give vacant possession and transfer the premises to the Appellant on payment of the balance of the purchase price.

Ma Hnit v. Maung Po Pu (1920) 55 Indian Cases 591 referred to.

Slade for Appellant.

E. K. Figgis, K. C., for Respondent.

SIR JOHN GRAY, C. J.—The Plaintiff in this case is seeking specific performance sof an agreement entered into by him with the Defendant for the purchase of a house at Nairobi.

The agreement is dated January 22, 1946. It was obviously drawn up by a layman and I do not think that for present purposes it is necessary to set out the terms thereof in full. The Plaintiff agreed to buy and the Defendant agreed to sell the house in question for Sh. 27,500. The Plaintiff was to pay Sh. 7,500 of the purchase money forthwith as a deposit and it was further agreed, interalia. "that on payment of the said purchase price in full you" (i.e. the Defendant) "will transfer the said property at my cost either in my or my nominee's or nominees' name or names and that you will hand over the vacant possession of the said house to me or my agent".

In her defence the Defendant does not dispute the fact that the deposit. has been paid. In paragraph 3 she alleges that the Plaintiff failed to deposit: forthwith the balance of the purchase money "and failed to complete the transaction by getting the documents transferred into his name". In paragraph 4 shealleges that she did offer vacant possession of the premises, "but the Plaintiff failed and/or neglected to take possession, and the premises remained vacant up to the middle of May, 1946, when in order to avoid loss of interest Defendant occupied same". In paragraph 6 she asks that the agreement be rescinded and thedeposit be forfeited.

In the final paragraph she says: $-$

"Without prejudice, Defendant is willing to complete the bargain and." on Defendant's obtaining a suitable accommodation will hand over vacant possession to the Plaintiff."

No evidence at all was called by the Defendant at the trial, Evidence was. called by the Plaintiff to prove the agreement and also to prove that the Defendant had gone into possession of the house early in April, 1946, and not: May, as alleged in the defence. It was also proved that before the institution of proceedings the Plaintiff's lawyer had sent a letter on April 10th, 1946, stating that "unless the transaction is completed and vacant possession given" not later than 15th April, 1946, proceedings would be instituted. No reply was sent to the letter.

At the close of the Plaintiff's case the Defendant's advocate submitted that there was no case to answer and that he did not intend to call witnesses. He relied for his submission on the fact that the Plaintiff had not been proved to have tendered a conveyance to the Defendant for execution before the commencement of the proceedings. The learned trial Judge upheld his submission: and dismissed the suit as being premature.

In making his submission the Defendant's advocate was relying upon the provisions of Section 55 (1) (d) of the Indian Transfer of Property Act, 1882, which reads as follows:-

"(1) The seller is bound $\ldots$ (d) on payment or tender of the amount due in respect of the price to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place.

That section imposes a duty to be performed in certain circumstances by a. vendor. Although there is no provision in the Act which specifically imposes. a corresponding duty on a purchaser, by necessary implication a purchaser is in. certain circumstances to tender a conveyance for execution by the vendor in. order to obtain completion of the purchase. As said by Viscount Haldane in. the Burmese case of Ma Hnit v. Maung Po Pu (1920), 55 Indian Cases, page 591, "the duty of the purchaser having regard to the analogy of what is laid down by Section 55 of the Indian Transfer of Property Act, 1882, which is treated asdefining what ought to be the practice in Upper Burma, was to tender a conveyance, and he would then, and not before such tender was either made or waived, have a right to the deeds as the accompaniment of the transfer of the title".

In other words, the law under the Indian Act is the same as the rule of English law. Generally speaking, a purchaser-must tender a conveyance to the vendor for execution, but there may be cases in which the vendor either expressly, or by his conduct impliedly, waives the formality of tender of a conveyance for execution.

Here I am of opinion that the Defendant's conduct shows that she has waived the formality of tender of a conveyance. She has not supported by any evidence the allegations which she has set out in her defence and upon which she relies for the rescission of the agreement. Under that agreement payment of the balance of the purchase money by the purchaser and delivery of vacant possession by the vendor are transactions to be performed concurrently, but<br>in the last paragraph of her defence she says that "without prejudice, Defendant is willing to complete the bargain and on Defendant's obtaining suitable accommodation, will hand over vacant possession to Plaintiff". In other words, even if the balance of the purchase money is tendered and a conveyance likewise tendered for execution, she is not willing to perform her concurrent obligation of giving vacant possession. In the circumstances she has clearly intimated that the tender of a conveyance would be a work of supererogation and thereby waived the necessity for that formality.

In my opinion therefore the evidence and pleadings show that in the circumstances the Plaintiff was not bound to tender a conveyance as a necessary preliminary to his suit and that this appeal ought therefore to be allowed.

SIR BARCLAY NIHILL, C. J.—For the reasons given by my brother the learned Chief Justice of Zanzibar in the judgment he is about to deliver, and which I am in full agreement, this appeal is allowed with costs in this Court and in the Court below, and the judgment of the Supreme Court of Kenya is set aside. The Respondent is ordered to give vacant possession of the premises forming the subject-matter of this action on payment of the balance of the purchase price and to transfer the said premises to the Appellant by a sufficient instrument. The Court makes no order as regards damages as prayed for in paragraph 9 (c) of the plaint as at the hearing of the action no evidence was tendered by the Appellant as to the extent of any damage.

EDWARDS, C. J.-I have had the advantage of reading the judgment of the learned Chief Justice of Zanzibar. I agree with it and have nothing to add.

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