011-NLR-NLR-V-19-THE-KING-v.-APPU.pdf
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1016;
Present: Shaw J.
THE KING- v. APPU.
69—D. C. Negombo, 3,086.
Cheating—Penal Code, s. '403—Representation by mortgagor that landwas free from encumbrance—.Land subject to lease.
A representation by a .person that a land is “ free from encum-brance " amounts to a representation that it is not subject to any. lease.t.
A .person mortgaging a land representing that it is " free fromencumbrance" would be guilty of cheating, if the land was subjectto a lease at the time.
Accused .in this case ^ras acquitted on the ground that therewas no- evidence of a criminal intention on his part. .
ry^HE facts are set out in the judgment.
A. St. V. Jayewardene (with him Amerasekera), for appellant.
Dias, C.G., for respondent;
April 6, 1916. Shaw J.—
The accused has been convicted of cheating, under section 408 ofthe Penal Code, and sentenced to pay a fine of Rs. 500, or in defaultthree months’ rigorous imprisonment.
The accused was the owner of some land situated at Dagonna,which was subject to a mortgage for Rs. 500, and in respect ofwhich he had, on May 8, 1918, granted a lease to one PelisAppuhamy for ten years, the whole rent for the term, viz., Rs. 500,having been paid in advance.
Shortly after this lease had been granted one Peduru Appu, whowas at one time an accused in this case, and has been discharged,entered into negotiations with Sithambarampulle, the complainant,who was acting for his son-in-law Chelliah, ' for a mortgage forRs. 1,500, to be secured on this land and two other lands belongingto Peduru ^Appu, the arrangement being that, prior to the executionof the mortgage, Peduru Appu should purchase the land from the
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accused and obtain a transfer from him. The negotiations withSithambarampulle were conducted by Peduru Appu in the presenceof the accused; no disclosure was made by either of them of the _existence of the lease to Pelis.
Sithambarampulle, having inspected the Wd and agreed tomake the loan on behalf of his son-in-law, put the matter into-the hands of Mr. Groos Daberera, his proctor and notary. Mr.Daberera madesearch at theRegistry’s officeand foundno
registered deedaffecting theland except the mortgagefor
Rs. 500, which it was arranged should be paid off at the time ofcompletion out of the money to be borrowed from the complainant.On June 11 the parties attended at Mr. Daberera’s office forthe completion.The transferto Peduru wasexecuted,the
purchase price being Rs. 2,500; the mortgage from Peduru to-Chelliah for Rs. 1,500 was executed, and Rs. 1,300 of the amountof the loan was paid by Sithambarampulle; the Rs, 500 mortgage,with the interest due, was paid off and discharged, and Rs. 760 ofthe balance was paid to the accused and Peduru Appu gave him apromissory note for Rs. 1,500, the balance of the purchase money.No mention was made by either the accused or Peduru of the leaseto Pelis, and both Peduru and the accused, at the request of Mr.Croos Daberera, signed declarations, the first, that all the landsmortgaged by him, and the second, that the land in question, were'c free from all encumbrances
Two years afterwards the mortgage bond was put in suit byChelliah, and this l&nd was sold by the Fiscal. The- lease to Pelis-was then for the first time discovered, and was found to have beenregistered the day after the mortgage was executed, and one daybefore the mortgage itself was registered. The land was bought atthe Fiscal’s sale by Chelliah for Rs. 350. the low price being no-doubt accounted for by the existence of the lease, which had stillsome eight years -to run. The other lands mortgaged by Peduruhaving failed to realize the full sum due On the mortgage, the presentproceedings were instituted.
I quite agree with the finding of the District Judge that therepresentation that the land was free from encumbrances wasmade by the accused to Sithambarampulle, Chelliah’s agent, forthe purpose of inducing him, and did induce him, to lend the money.
It is true that Sithambarampulle stated under cross-examinationthat ' ‘ the accused did not induce me to lend money on tho.mortgage ", but it appears from Mr. Daberera’s evidence thatSithambarampulle had asked Mr. Daberera to obtain the declaration,and Mr. Daberera states that he should not, as the mortgagee'sproctor, have allowed the transaction to have gone through if theaccused had not made the declaration.
I have felt some doubt whether a representation that a land ia“ free from encumbrance " amounts to a representation that it ia
1916V
Shaw JV
The Kinff‘ v. Appu
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1916.
Shaw J.
The Kingv. Appu
not subject to a lease. In the circumstances oi the present case Ithink it did. In Wharton's Law Lexicon 4t incumbrance ” is .definedas “ a claim, lien, or liability attached to property ”, and a leasehas in England been held to be an ” incumbrance ” where a vendor
had contracted to give vacant- possession (Cabattoro v. Hentlya);
. although generally upon a sale in England, where the delivery ofvacant possession is not an essential part of the contract, a leasefrom year to year is not an “ incumbrance ” (Davies v. Davies2);a lease at an inadequate rent has been held to be an “ incumbrance!with a clause prohibiting a married woman from incumbering her vproperty (Baghett v. Men3). In this Colony a lease has been ,h£ldnot to be an “ incumbrance ” within the meaning of section 8 ;oftlie Partition Ordinance (Peine v. Peiris,* Samaraweexa v. CuhjiMoosa*), but the construction in those cases turned on the specialwording of the Ordinance, and in my view, apart from any restrictingwords that may accompany it, -the word " incumbrance ” wouldcertainly include a lease, like that under consideration in the 1present case, for a considerable term the consideration for whichHas been paid in advance.
This technical legal expression has been used by the accused in adocument written .by Mr.. Daberera in English, .and signed.by the.accused. It is clear that he cannot have understood the meaningoftheEnglishword,or whetheritincluded a lease, andthe
representation intended to be made by the accused' depends uponthe Tamil word used by Mr. Daberera in his translation of thedocument to the accused. We are not told what the Tamil wordwas, so are not in a position to decide whether or not the accusedrepresented or intended, to represent that the land was not subjectto any lease.
But this point ceases to have much importance, because I thinkthat the * evidence given by Pelis and that. of the accused himselfraises so much doubt of the criminal intention.of the accused as toentitle him to an acquittal. I see no sufficient reason to hold thatPelis, who was called as a witness for the prosecution, was a 'partytoanyfraud.It appears fromtheevidence that, prior tothe
transfer to Peduru and the mortgage to Chelliah, Peduru and theaccused came to Pelis and- told him, that Peduru desired to buythe land, and asked him' to cancel the lease, and that he agreed todo so on condition that he was paid Bs. 500, the sum he had paidas consideration for the lease, out • of the purchase money; and hegave document E to that effect. . After the transfer Peduru appearsto have been put in possession, and the trouble arose in consequenceof his failing to pay the vendor the balance of the purchase money,or the Rs. 500 due to Pelis. I am not satisfied of the guilty
1 L.R. 9 Ch.447.* 18 L. J. Ch. 228.
a L.R. 16 Q.B. 951.* (1906) 9 N. L. R. 231.
® (1915) 18 N. L. R. 408.
1916.
( *oi intention of the accused, who may well have considered that thelease was disposed of. The Judge comes to the conclusion that thedocument E' is a false document, mdde for the purposes of thedefence, and bases his opinion on the fact that on the very dayafter the transfer the lease to Pelis was registered; but this wastile very thing one would expect Pelis to do under the circumstances,as the Bs. 500 was not payable to him for three months, and hewould therefore have been without remedy if he had allowed Peduruto gain priority of registration and the money was not eventuallypaid. I am by no means satisfied that E was not made prior to thetransfer.
In view of the doubt that. exists of guilty intention on the partof the accused, I set aside the conviction, and acquit him of theoffence charged.
Shaw J.
The King,v. Appu
Set aside.