Decided on February 08,1952



- (1.) THE plaintiff who is the appellant in both these appeals purchased two plots of land situated within the Salem Municipality from the defendants under two different sale deeds of the same date, namely, 26-1-1946. Two suits, O. S. Nos. 81 and 82 of 1946 against which these appeals are filed, were instituted by the plaintiff for setting aside the sale deeds and for recovery of the amounts paid as the sale price. The plaintiff claims to have learnt some time after the completion of the sale deeds that the lands purchased were comprised in a town planning scheme notified by the Salem Municipality in May 1941 which the defendants knew but did not disclose to the plaintiff and that there was therefore such a material defect in the title to the property that the omission on the part of the defendants to disclose the above defect was fraudulent entitling the plaintiff to set aside the sale and claim refund of the sale price. The defendants' contention is that the plaintiff knew about the Town Planning scheme and that no portion of the property purchased was reserved under the scheme and it was not subject to any acquisition by the municipality or the Government. He also contended that the existence of a scheme relating to the property was not in any event a material defect in title entitling the plaintiff to avoid the sale. The lower Court dismissed the suits. Hence these appeals.
(2.) THE sales are sought to be avoided on two grounds, namely, (1) that the sale of a property which is the subject-matter of a town planning scheme is prohibited under the provisions of the Madras Town Planning Act (7 of 1920) and therefore void, and (2) that the fact that a scheme under the Madras Town Planning Act is in force relating to the property is a material defect in the seller's title which the defendants were aware of, and which they were bound to disclose to the buyer and the omission to make such disclosure is fraudulent under Section 55 (1) (a), T. P. Act. It was also sought to be contended on behalf of the appellant that he is also entitled to avoid the sale as both parties to the contract were under a mistake as to a matter of fact essential to the agreement and therefore the agreement is void under Section 20, Contract Act. In view of the evidence in this case, it cannot be said, at any rate that the defendants at least were not aware of the fact that these properties were included in the Town Planning scheme and it is therefore futile to contend that the sale is void on the ground of mutual mistake.
(3.) IT is however necessary to examine the provisions of the Madras Town Planning Act with reference to the facts of this case in order to consider the other contentions of the appellant. On 24-4-1941 the Salem Municipal Council acting under Section 9 (1), Madras Town Planning Act, passed a resolution and had the same published in the prescribed manner on 9-5-1941 under Section 10 of the Act deciding to prepare a scheme in respect if a certain area within which the properties in question were included. The Council also prepared and published a draft scheme under Section 11 on 6-5-1943. There were no objections to the scheme and the scheme was submitted to the Government for its sanction under Section 14. But the Government does not appear to have sanctioned it, and nothing appears to have happened after the submission of the scheme to the Government. Under Section 9, a Municipal Council may, by resolution, decide to prepare a scheme in respect of any land within the municipal area and the Chairman shall then have a plan prepared showing the land proposed to be included in the scheme, the surrounding lands and any existing streets. Such a resolution shall, under Section 10, be published by notification in the prescribed manner by the chairman and the notification shall state that a copy of the plan is kept for the inspection of the public. If the resolution is to make a scheme, as in this case, the municipal council shall, under Section 11, within 12 months from the date of the notification under Section 10, or within such further period not exceeding 12 months as the Provincial Government may allow, and after consulting, in the prescribed manner, the owners of the lands and buildings in the area affected, prepare and publish a draft scheme. Such a draft scheme shall contain the particulars enumerated in Section 13, and under Section 14, if within sixty days from the date of the publication of a draft scheme any person affected by such a scheme communicates in writing any objection or suggestion relating thereto, the council shall consider such objection or suggestion and may modify the scheme as it thinks fit, and the scheme together with such objections and suggestions, if any, shall be submitted to the Provincial Government for sanction and the Provincial Government may after considering the objections and suggestions, if any, sanction the scheme with or without modification or may refuse to sanction the scheme. Section 17 provides that after the publication of the notification under Section 10 or Section 12 no person shall erect or proceed with any building or work or enter into or carry out a contract in respect of the land within the area included in the scheme unless he has applied for and obtained permission in cases where a scheme has not been sanctioned from the municipal council and in other cases from a responsible authority. Section 21 lays down that a person shall not be entitled to obtain compensation under Section 20 on account of any building erected on, or contract made, or other thing done, with respect to land included in a scheme, after the date of the publication of the notification under Section 10 or Section 12 except as to buildings erected, contract made or other thing done in accordance with a permission granted under Section 17.;

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