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Allibhai Mahomed Akuji Vs. Dada Alli Isap - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 243 of 1928
Judge
Reported in(1931)33BOMLR1296; 136Ind.Cas.509
AppellantAllibhai Mahomed Akuji
RespondentDada Alli Isap
DispositionSuit dismissed
Excerpt:
.....sections. 54, 10-civil procedure code (act v of 1908), section 66-agreement of sale prior to the transfer of property act-agreement creates equitable interest in property-rule of perpetuities-restraint on alienation-sale by benamidar-agreement of sale from rendee of benamidar-agreement not void under a. 66, civil procedure code.;in execution of a decree against plaintiffs' father land belonging to him was sold at a court bale and purchased by an auction purchaser, who sold it to defendants' grandfather on may 14,1874, on the same day, the defendants' grandfather agreed to reconvey the land to a brother of plaintiffs on payment of a certain sura of money. on february 10, 1925, the plaintiffs sued for specific performance of the agreement, alleging that the auction-purchaser was only a..........of the land. one ranchhod obtained a decree against him in 1871, and then in sale in execution the suit land was sold by auction and purchased by one jibhai on october 8, 1872. on may 14, 1874, the said jibhai sold the suit land to the grandfather of defendants nosection 1 to 3 and 5 to 10, and on the same day the vendee akuji, defendants' grandfather, executed a registered agreement in favour of abhram by which he bound himself to sell the land to abhram for rs. 461 at any time when the money was offered, and not to sell the land to any other person whatever. the plaintiffs' case is that jibhai was a mere benamidar for their ancestor isap, the father of the person to whom the agreement was executed. and now after more than fifty year they sue for specific performance of the agreement,.....
Judgment:

Baker, J.

1. The facts of this appeal are peculiar, and were I not of the opinion that they are covered by authority, I should have referred it to a bench. The plaintiffs sued for specific performance of a contract of sale dated May 14,1874. The facts are simple. The plaintiffs' ancestor Ali Isap was the original owner of the land. One Ranchhod obtained a decree against him in 1871, and then in sale in execution the suit land was sold by auction and purchased by one Jibhai on October 8, 1872. On May 14, 1874, the said Jibhai sold the suit land to the grandfather of defendants NoSection 1 to 3 and 5 to 10, and on the same day the vendee Akuji, defendants' grandfather, executed a registered agreement in favour of Abhram by which he bound himself to sell the land to Abhram for Rs. 461 at any time when the money was offered, and not to sell the land to any other person whatever. The plaintiffs' case is that Jibhai was a mere benamidar for their ancestor Isap, the father of the person to whom the agreement was executed. And now after more than fifty year they sue for specific performance of the agreement, Both the Courts below have awarded the plaintiffs' claim. Defendant No. 1 makes this second appeal, and four objections have been taken in appeal, viz, (1) that the agreement is incapable of specific performance as it infringes the law of perpetuity, (2) the agreement which prohibits alienation to anybody else is void, (3) Jibhai was a benamidar of the original creditor, and plaintiffs sue to enforce the agreement against the successor-in-title of the original purchaser, which is against Section 66 of the Civil Procedure Code, and (4) the original agreement was with a minor. (This has been given up).

2. The most important ground is the first one. The agreement in question is before the Transfer of Property Act came into force. Under Section 54 of the Transfer of Property Act, a contract for sale does not of itself create any interest or charge on such property, but it is contended that before the Transfer of Property Act came into force it was held that English law applied to agreements, and they created an equitable interest in land, and therefore were subject to the law of perpetuities, and reference is made to Harkisandas v. Bai Dhanu : (1926)28BOMLR954 That case refers to the case of Dinkarrao Ganpatrao v. Narayan Vishwanath I.L.R. (1922) Bom. 191 24 Bom. L.R. 449 in which it was held, in dealing with a contract of 1878 that prior to the Transfer of Property Act a contract for the sale of immoveable property created an equitable interest in the property and made the purchaser the owner in equity, and consequently the English decisions like London and South Western Railway Co. v. Gomm (1882) 20 Ch.D. 563 would apply, and it was not, therefore, really necessary in that case to decide the question whether the law would be the same in cases governed by the Transfer of Property Act. On reference to Dinkarrao's case, I am of opinion that the present case is clearly governed by it. In that case by a sale deed of 1878 the vendor conveyed to the purchaser a plot of land forming part of a larger piece of land, and the vendor covenanted that-

In case you or your heirs have to sell the said plot, the same is to be sold back to me for the abovementioned value. It is not to be sold to any other person. In case you are informed in writing that I or my heirs or Vahivatdars or donees from me are not going to purchase it, then only you can sell it to another person if you like.

3. It was held that the covenants in question were void as offending against the principle underlying the rule against perpetuities, relying on London and South Western Railway Co. v. Gomm and the other cases quoted there. It is described in the judgment as a contract creating a right of pre-emption which cannot be specifically enforced until the proper occasion arises in the future, and it was held by Macleod C. J. that such contracts, though not creating an interest in land either equitable or executory under Section 54 of the Transfer of Property Act, do create rights which are capable of being enforced with regard to the land in certain circumstances against third parties, and the rule of perpetuities made applicable to this country by Section 514 of the Transfer of Property Act applies to this class of contracts, and it was held by Kanga J. that prior to the Transfer of Property Act the law assumed in ill. (a) to Section 13 of the Specific Relief Act: that a contract for the sale of immoveable property created an equitable interest in the property and made the purchaser the owner in equity, was the law in India, and he goes on to say (p. 215):-

Now we have before us an agreement made in 1878 to convey an immo-veable property upon the happening of an event which might occur at a more remote period than the lives in being and eighteen years afterwards. It is an agreement creating under the law prior to the Transfer of Property Act an equitable interest in immoveable property which would be void as infringing the rule against perpetuities: London and South Western Railway Co. v. Gomm (1882) 20 Ch. D. 562 and Woodall v. Clifton [1905] 2 Ch. 257

4. I am unable to see any distinction between that case and the present case. In the present case we have an agreement which gives to one of the parties to it the right of pre-emption which might not arise until long after the period contemplated by the law of perpetuities, and is as a matter of fact now attempted to be enforced after an interval of fifty-one years. The learned advocate for the respondents admitted that he was not able to distinguish that case on any plain basis, but contended that a different view has been taken by the Madras High Court in Charamudi v. Raghavulu I.L.R. (1915) Mad. 462 I am, however, bound to follow the ruling of the Divisional Bench of this Court, and it is not for me to say whether the view taken by the Madras High Court is correct or that taken by this High Court. There is, moreover, a case of the Privy Council in Maharaj Bahadur Singh v. Balchand which leads to the same conclusion, There an agreement had been made between a Maharaj and a Jain Society that if the Society should require a site for the erection of a temple thereon, he and his heirs would grant a site free of cost. The proprietor afterwards alienated the whole hill. Subsequently the Society sued the alienees for possession of a site defined by boundaries, alleging notice to the proprietor requiring that site and that they had taken possession but had been dispossessed. It was held that the action failed because the agreement conferred on the Society no present estate or interest in the site, and was unenforceable as a covenant since it did not run with the land and infringed the rule against perpetuities. It has been argued by the learned advocate for the respondents that that was a suit against an alienee from the person who originally entered into the contract, but that is not the sole ground of the decision. Their Lordships say at p. 380 that the covenant does not, and cannot, run with the land, find therefor was not capable of enforcement. But their Lordships also hold (p. S80):-

Further, if the case be regarded in another light-namely, an agreement to grant in the future whatever land might he selected as a site for a temple-as the only interest created would be one to take effect by entry at a later date, and as this date is uncertain the provision is obviously bad as offending the. rule against perpetuities, for the interest would not then vest in present, but would vest at the expiration of an indefinite time which might extend beyond the expiration of the proper period.

5. In the present case the interest created is one which would take effect by the tender of the fixed price at a later date which is uncertain the period being left entirely to the option of Abhram or his heirs. The learned advocate for the respondents also referred to Fakirji v. Bhagvatlal (1928) 31 Bom. L.R. 493 That, however, was a case under the Indian Registration Act, and does not, in my opinion, affect the principles which are laid down in the last lines of the Privy Council judgment in Maharaj Bahadur Singh v. Balchand, which I have just referred to. As a result, I must hold that the agreement is void as being against the principle of perpetuities, and that it cannot therefore be enforced.

6. This is sufficient for the decision of the appeal. I will, however, refer briefly to the other two contentions which have been raised by the appellant, in case there is a Letters Patent appeal against this decision. It has been contended that the agreement is also bad inasmuch as it prohibits alienation except to the plaint, iffs and at a fixed price, and it therefore offends against the principle of Section 10 of the Transfer of Property Act which provides that:-

Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him, etc.

7. It has been contended that the case is governed by Asghari Begam v. Maula Baksh : AIR1929All381 where it was held that where a deed of transfer at first absolutely transferred property to another but by a subsequent clause makes the clause subject to a condition restraining the transferee from parting with or disposing of that interest to any person other than the transferor, the condition amount to an absolute restriction the right, of transfer and so is void. In the present case transfer was by Jibhai the auction purchaser to the defendants' ancestor, and that transfer was without any condition, and it is contended that in the Allahabad casa the clause prohibiting the transfer was in the deed itself and therefore invalidated the deed. In the present case the prohibition of transfer is in a separate agreement made with a third personal. i.e., Abhram. It is further contended on behalf of the appellant that the transfer by Jibhai and the agreement with Abhram which took place on the same day formed part of the same transaction, and are based on the fact of Jibhai being only a benamidar for Abhram who was the real owner of the land. The question of whether this amounts to a restraint of alienation within Section 10 of the Transfer of Property Act, which by the way was not in force at the time when this transaction was entered into, would depend on whether the agreement with Abhram is regarded as forming part of the same transaction as the sale by Jibhai. In my opinion they should be so regarded, and therefore under the ruling in the Allahabad case referred to above the restriction on alienation would be void under the principles of Section 10 of the Transfer of Property Act, although the Act itself was not in force at that time. It has been frequently held that the principles which underlie the Act were principles in existence before.

8. The third objection is that the suit is barred by Section 66 of the Civil Procedure Code, which lays down that-

No suit shall be maintained against any person claiming title under a purchase certified by the Court in such manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims,

and it is contended that the present suit is based on the allegation in the plaint that Jibhai was merely a benamidar for the original owner Ali Isap whose descendant the plaintiff is. It is contended that that section has no application. The section has to be construed strictly. The present suit has nothing to do with the transfer by Jibhai to the defendants' ancestor, and the ruling in Balaram v. Naktu (1928) 30 Bom. L.B. 821 which was quoted by the learned advocate for the appellant, has no application inasmuch as the suit in that case was directly based on a benami transaction. I am of opinion that as Section 66 of the Civil Procedure Code has to be strictly construed, it. will apply only to a suit in which the cause of action is given by the benami purchase and not to a suit like the present which is based on a contract which is separate from the transfer. The Court sale which was in the name of Jibbai had taken place some time before. If Ali Isap had brought a suit to recover possession of the property against the present defendants' ancestor on the ground that he was the person on whose behalf the purchase was made, Section 66 would apply, but not I think to a suit which in based on a different cause of action, i.e., a contract entered into between the defendants' ancestor and the ancestor of the plaintiff even though the basis of that contract might be the benami nature of the original purchase at the Court-sale That, however, is a minor point in view of the opinion to which I have come on the question of perpetuity.

9. As a result the decree of the lower appellate Court will be reversed, and the suit dismissed with costs throughout.


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