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Hiralal Lachmichand Pardeshi Vs. Janardan Govind Nerlekar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberFirst Appeal No. 185 of 1932
Judge
Reported in(1937)39BOMLR1299
AppellantHiralal Lachmichand Pardeshi
RespondentJanardan Govind Nerlekar
DispositionAppeal dismissed
Excerpt:
.....four plots of land (a) (b) (c) and (d), which were mortgaged. on october 21, 1929, he agreed to sell plot (d) to defendant no. 2 for rs. 2,000 and received rs. 200 as earnest money. the contract was to be completed and the sale-deed executed in a fortnight's time. this was not done. on april 18, 1930, defendant no. 1 agreed to sell all the four plots to plaintiff for rs. 7,000, out of which defendant no. 1 was to pay off the mortgage debt and relieve the properties from the encumbrance. in the agreement of sale, reference was made to the prior agreement of sale of plot (d), and it was stated that as the balance of the purchase money was not paid in time the transaction was void. in may, 1930, plaintiff called upon defendant no. 1 to complete the agreement. on june 6, 1930, defendant..........:-2. on october 21, 1929, defendant no. 1, who is the owner of these four plots, had agreed to sell plot (d) to defendant no. 2 for rs. 2,000. rs. 200 were paid as earnest money, and the bargain paper provided that the sale-deed was to be executed after divali, that is to say, in about a fortnight, on april 18, 1930, defendant no. 1 agreed to sell all the four plots to the plaintiff for rs. 7,000. the bargain paper recited that the properties had been mortaged to one dr. patki; that the vendor, defendant no. 1, was to pay off the amount of the decree obtained by the mortgagee and execute a sale-deed in the plaintiff's favour within fifteen days. there was a reference to the prior agreement between defendant no. 1 and defendant no. 2 :-about six months ago, i have taken rs. 200 as.....
Judgment:

Broomfield, J.

1. This is an appeal from a decree dismissing the plaintiff's suit for specific performance of an agreement by defendant No. 1 to sell four plots of land at Kurduwadi with buildings thereon described in the plaint as (a) (b) (c) and (d). The material facts are these :-

2. On October 21, 1929, defendant No. 1, who is the owner of these four plots, had agreed to sell plot (d) to defendant No. 2 for Rs. 2,000. Rs. 200 were paid as earnest money, and the bargain paper provided that the sale-deed was to be executed after Divali, that is to say, in about a fortnight, On April 18, 1930, defendant No. 1 agreed to sell all the four plots to the plaintiff for Rs. 7,000. The bargain paper recited that the properties had been mortaged to one Dr. Patki; that the vendor, defendant No. 1, was to pay off the amount of the decree obtained by the mortgagee and execute a sale-deed in the plaintiff's favour within fifteen days. There was a reference to the prior agreement between defendant No. 1 and defendant No. 2 :-

About six months ago, I have taken Rs. 200 as earnest money from one Shan-kar Gangaram Salunke and had agreed to sell to him the last plot out of the aforesaid property, measuring ninety feet in length and forty-eight feet in width, and have passed to him a receipt in writing. But according to the terms in the said receipt, he has not paid to me the remaining amount and has not got the sale-deed executed. As he has not fulfilled the terms, his receipt has become null and void. I will not allow the same to affect you.

3. In May, 1930, the plaintiff sent a notice to defendant No. 1 calling upon him to complete the agreement. He also published a notice in a newspaper. On June 6, 1930, defendant No. 2 filed a suit for specific performance of defendant No. 1's agreement to sell plot (d) to him and on June 25, 1930, the plaintiff filed the suit, from which this appeal arises, praying that defendant No. 1 should be ordered to execute a sale-deed in favour of the plaintiff, that in case defendant No. 1 fails to pay off the amount to Dr. Patki the amount of the mortgage decree should be kept aside and the balance, if any, ordered to be paid to defendant No. 1, that in case defendant No. 1 fails to execute the sale-deed, a sale-deed may be ordered to be executed by the Court, and that if the Court finds that specific performance cannot be granted in respect of some part, damages to that extent may be awarded to the plaintiff. Notices of this suit were served on the defendants in July, 1930. In the suit filed by defendant No. 2 a consent decree was passed on September 1, 1930, which provided that the plaintiff was to receive Rs. 1,600 and execute a saledeed in defendant No 2's favour within fifteen days. The plaintiff's suit for specific performance has been dismissed because the trial Judge held that Section 15 of the Specific Relief Act applied and the plaintiff was unwilling to purchase plots (a) (b) and (c) without compensation for defendant No. 1's inability to convey plot (d) to him.

4. It has been argued by the learned Counsel for the appellant, though not I think very strenuously, that the plaintiff is not bound by the agreement between defendant No. 1 and defendant No. 2. He says that this agreement ceased to be binding owing to the long delay and failure to implement it. But the plaintiff had notice of this agreement. It was mentioned in his own bargain paper. He was put upon inquiry therefor, and he admits that he made no inquiries. There is nothing at all to show that time was of the essence of the contract. A decree for specific performance has actually been obtained, and though the plaintiff vaguely alleged collusion between the defendants, there is no proof of anything of that sort. Clearly, therefore, the trial Judge was right in holding that the agreement of October, 1929, is binding on the plaintiff.

5. That being so, the question whether the plaintiff is entitled to the relief claimed by him depends on the application of Sections 14 to 17 of the Specific Relief Act, which, as Lord Sumner says in Graham v. Krishna Chumder Dey , 'constitute a complete code, within the terms of which relief of the character in question must be brought, if it is to be granted at: all.' These sections are as follows :-

14. Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value, and admits of compensation in money, the Court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.

15. Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed forms a considerable portion of the whole, or does not admit of compensation in money, he is not entitled to obtain a decree for specific performance. But the Court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, provided that the plaintiff relinquishes all claim to further performance, and all right to compensation either for the deficiency, or for the loss or damage sustained by him through the default of the defendant.

16. When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part.

17. The Court shall not direct the specific performance of a part of a contract except in cases coming under one or other of the three last preceding sections.

6. Mr. Thakor has contended that Sections 14 and 15 have no application. According to him there is nothing to prevent the Court from decreeing specific performance of the whole contract as against defendant No. 1. The position of defendant No. 2 will be unaffected because under Section 27 of the Act he can in his turn obtain specific performance against the plaintiff. Defendant No. 1 may be ordered to convey the whole property to the plaintiff and the plaintiff to reconvey plot (d) to defendant No. 2. Sections 14 and' 15, Mr. Thakor says, should be confined to the case where the inability to complete; the contract is due to a legal defect such as want of title, whereas, here defendant No. 1 has not parted with any legal interest in plot (d). There are merely equities arising in favour of defendant No. 2. Whether this is so as a matter of fact the record does not show. As I have mentioned, the decree of Septtember 1, 1930, directed a saleldeed to be executed within fifteen days. But, apart from that, this argument, although undoubtedly ingenuous, is, in our opinion, unconvincing. The question before the Court in such a case must always be whether the contract can be executed in substance. Assuming that defendant No. 1 could still convey plot (d) to the plaintiff, subject to equities and under conditions, it would not be the same contract. Defendant No. 1 by reason of his prior agreement with defendant No. 2 is just as much unable;to carry out the whole of his part of the original agreement within the mean-ring of Section 14 and Section 15 as if he had no legal title to plot (d). The wide and simple language of these sections cannot in our opinion be limited in the manner suggested.

7. It cannot be said that plot (d) bears only a small proportion to the whole, therefore Section 14 does not apply. Under Section 15 the plaintiff can only get specific performance if he is prepared to pay the agreed purchase price for the (properties minus plot. (d). He has expressed his unwillingness to do this.

8. The suit must fail, therefore, unless it can be brought under Section 16, which the learned trial Judge has not considered. In view of the observations of their Lordships of the Judicial Committee in Graham v. Krishna Chunder Dey , this section must be applied with great caution. At p. 93 of the report we find these observations :-

Their Lordships think (1.) that before a Court can exercise the power given by Section 16 it must have before it some material tending to establish these propositions (the propositions are those stated in the section, viz., that there was a part of the contract, which, taken by itself could and ought to be specifically performed and which stood on a separate and independent footing from the other part of the contract), and cannot apply the section on a mere surmise that, if opportunity were given for further inquiry, such material might be forthcoming and possibly might be found to be sufficient; and (2.) that the words of the section, wide as they are, do not authorize the Court to take action otherwise than judicially, and in particular do not permit it to make for the parties or to enforce upon them a contract, which in substance they have not already made for themselves.

9. It is suggested that the part of the contract which could and ought to be specifically performed is the contract to sell plots (a) (b) and (c). But at what price was it agreed to sell them? The Court is asked to assume that as there was an agreement by defendant No. 1 to sell plot (d) to defendant No. 2 for Rs. 2,000, therefore an agreement to sell plots (a) (b) and (c) to the plaintiff for Rs. 5,000 (the difference between Rs. 7,000 and Rs. 2,000) may be inferred. But is that so? The considerations pointed out by the Privy Council in the case just referred to at p. 94 of the report may apply here also. It may well be that because the four plots were sold together the total price was less than it would have been if the four plots had been sold separately or plot (d) separately from the others. And then what about the mortgage debt? 1 have set out the reliefs claimed in the plaint in respect of that How could the Court possibly deal with the matter without in effect making a new bargain between the parties? It is very far from clear therefore that there was any part, of the contract which taken by itself could and ought to be specifically performed.

10. Then as to the agreement about plot (d) standing on a separate and independent footing. There is nothing in the bargain paper to suggest it. No doubt plot (d) was referred to separately, but only for the purpose of showing that the previous agreement was invalid or had lapsed and therefore plot (d) could be treated as on the same footing as the rest of the properties. All the four plots had been mortgaged. Defendant No. 1 was to pay off the mortgage debt on all four and execute one sale-deed for the four. The plaintiff has made precisely the same case in the plaint and in his evidence. It is not his case! that there was a separate bargain about plot (d). It is true that defendant No. 1 has stated that the plaintiff was to make his own arrangements about plot (d) and either settle with defendant. No. 2 or give it up. But defendant No. 1's version of the whole affair is contradicted by the written contract and has been quite rightly disbelieved by the trial Judge.

11. There was only one contract for the four plots. The ordinary presumption is that it was an entire contract, intended to be dealt with as a whole and not piecemeal, unless and until the contrary is shown. In our opinion, the contrary has not been shown in this case and Section 16 cannot be said to apply. The plaintiff did not claim damages for the total breach of the contract. Having regard to Section 19 of the Act damages for breach might nevertheless have-been awarded, but the point] has not been pressed before us, presumably because there is no evidence whatever of material damage having been suffered by the plaintiff.

12. We hold that the trial Judge was right and dismiss the appeal with costs. There will be two sets of costs.


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