1. This is a plaintiff's appeal and arises out of a suit for specific performance of a contract of sale, and for a declaration that the sale-deed dated 12th January 1225 executed by defendant 1 in favour of defendants 2 and 3 is null and void as against the plaintiff.
2. The plaintiff's case was that defendant 1 contracted to sell his 1 anna 7 ganda and odd share in mauza Dharamsipur to the plaintiff for a sum of Rs. 1,925, and, on receipt of Rs. 99 by way of earnest money, on 26th December 1924, executed an agreement embodying the terms of the contract and promised to execute the sale-deed on 5th January 1925, but notwithstanding the said contract defendant 1 sold 17 gandas share to defendants 2 and 3 for a sum of Rs. 2,700 on 12th January 1925.
3. The suit was contested by all the defendants. The case put forward by the defendants was that, prior to the agreement alleged by the plaintiff, defendant 1 had on 17th November 1924 agreed to sell his 1 anna 7 ganda and odd share to defendants 2 and 3, and that the plaintiff had knowledge of the said agreement. The defendants alleged that the sale of 12th January 1925 was in pursuance of the agreement dated 17th November 1924, that was prior in date to the agreement alleged by the plaintiff, and, as such, the plaintiff was not competent to assail the validity of the sale-deed in favour of defendants 2 and 3. Defendant 1 also pleaded that the plaintiff had induced defendant 1 to enter into the contract of sale by the exercise of fraud and as such the plaintiff is not entitled to a decree even with respect to the 10 gandas share that remained with defendant 1 and was not included in the sala-deed executed by him in favour of defendants 2 and 3.
4. The claim with respect to 10 ganda share has been decreed by the Courts below, and there is no controversy about the same in the present appeal.
5. Both the Courts below have agreed in dismissing the plaintiff's suit with respect to 17 gandas share that was sold to defendants 2 and 3 by means of the sale-deed dated 12th January 1925. By this appeal the plaintiff assails the validity of the decrees of the Courts below with respect to the said share.
6. In order to appreciate the question of law that has been raised before us it is necessary to state certain facts.
7. On 1st December 1925, defendant 1 sent a notice to the plaintiff informing him that he had entered into a contract with Mukh Ram Singh defendant 3 to sell his 1 anna 7 ganda share to him for a sum of Rs. 3,500 and asked him to reply if he was willing to purchase the said share. The plaintiff sent a reply to this notice to defendant 1 on 5th December 1925. We are not concerned with the contents of the letter sent by the plaintiff to defendant 1.
8. In view of this correspondence that passed between plaintiff and defendant 1 and other evidence in the case, the Courts below have come to the conclusion that defendant 1 entered into a contract with defendant 3 to sell his 1 anna 7 ganda share in November 1924 and that the plaintiff was fully aware of that agreement when he entered into the contract of sale on 26th December 1924.
9. It was maintained by the defendants that by the contract of November 1924 defendant 1 had agreed to sell his share to both Mahabir and Mukh Ram Singh defendants 2 and 3, and as the contract with those defendants was prior in date to the contract of sale entered into between the plaintiff and defendant 1, the sale-deed dated 12th January 1925 could not be assailed by the plaintiff.
10. The Courts below have not accepted the contention of the defendants that by the contract of November 1924 defendant 1 agreed to sell his share both to Mukh Ram Singh and Mahabir, and the judgments of those Courts proceed on the assumption that contract was between the plaintiff and Mukh Ram Singh and that Mahabir was no party to the said contract. But the Courts below have held that the mere fact that the sale was settled primarily with Mukh Ram Singh alone and that he joined with him another purchaser and purchased a lesser share than the share agreed to be sold to him does not entitle the plaintiff to assail the validity of the sale-deed and to claim enforcement of the agreement, dated 26th December 1924 as against defendants 2 and 3.
11. In appeal before us it is argued by the learned advocate for the plaintiff-appellant that the sale-deed dated 12th January 1925 must be deemed to have been executed in accordance with a newly substituted agreement different from the agreement of 17th November 1924, and that the defendants must be deemed to have abandoned that agreement and it is no longer open to them to put forward that agreement as having priority over the agreement, dated 26th December 1924. It is pointed out that the sale-deed dated 12th January 1925 differs in material particulars from the agreement dated 17th November 1S24 set up by the defendants and it is argued that there is no escape from the conclusion that the sale in favour of defendants 2 and 3 was not carried out in pursuance of and in conformity with the agreement of November 1924. It is urged that the defendants having given a go by to the agreement of November 1924, the plaintiff is entitled to a decree for specific performance of the agreement, dated 26th December 1924.
12. The learned advocate for the defendant-respondents supports the decree of the Courts below on the ground that a contract of sale may be assigned and the assignee can enforce specific performance of it, and that it must be deemed that when Mukh Ram Singh joined Mahabir with him as a purchaser, he did no more than assign his rights under the agreement of November 1924 to Mahabir to the extent of the share sold to him. He maintains that the mere fact that the sale to defendants 2 and 3 was of a lesser share than the share originally agreed to be sold, and that the consideration was not the consideration originally agreed upon does not disentitle the defendants to plead the agreement of November 1924 in bar of the plaintiff's claim.
13. As has already been stated the sale-deed dated 12th January 1925 is with respect to 17i gandas share. There is no specification of the shares purchased by Mukh Ram and Mahabir in the sale-deed, and in the absence of such specification, in view of Section 45, T.P. Act, it must be held that both Mukh Ram and Mahabir purchased 17 gandas in equal shares, in other words the share purchased by each was 8 gandas.
14. With respect to 8 ganda share purchased by Mukh Ram Singh we are in agreement with the Courts below that the plaintiff is not entitled to succeed. Before entering into a contract with the plaintiff defendant 1 had agreed to sell his entire share to Mukh Ram Singh, and the plaintiff had knowledge of that agreement and, as such the agreement with Mukh Ram Singh had priority in law over the agreement with the plaintiff. The mere fact that eventually Mukh Ram Singh purchased a lesser share than the share originally agreed to be sold to him and for consideration different from the consideration originally agreed, does not disentitle him to take advantage of the agreement of November 1924. It cannot be denied that Mukh Ram Singh, on the facts found, would have been entitled to claim specific performance of the contract of November 1924. In other words he could insist on the sale of the entire 1 anna 7 gandas share to him. That being so, he was fully competent to waive his right with respect to a portion of that share and by mutual agreement with defendant 1 to agree to purchase the lesser share. Equally so it was open to defendant 1 and to Mukh Ram Singh to vary the terms of the agreement of November 1924 regards consideration. The decisive factor in such cases must be the priority in date of the agreement and not the terms of that agreement. In our judgment the purchase of 8 gandas by Mukh Ram Singh must be deemed to be in pursuance of the agreement of November 1924 and the plaintiff's suit with respect to that share must fail.
15. Now we pass to a consideration of the question whether or not the plaintiff is entitled to relief with respect to the share purchased by Mahabir. It is provided by Section 23(b), Specific Relief Act, that a contract, in which the learning, skill, solvency or any personal quality of a party thereto is not a material ingredient, and which does not provide that the interest of a party under the same shall not be assigned, can be enforced by the representative-in-interest of any party to the contract. It is clear that in a contract of sale the learning, skill etc., of a party thereto is not a material ingredient. The material ingredients in such a contract are the property to be sold and the consideration therefor. It, therefore, follows that a contract for sale can be enforced by the representative-in-interest of a party to that contract. In other words the benefit of a contract of sale can be assigned. The general rule is that the benefit of contract may be assigned in equity and the assign is entitled to enforce specific performance of it. No doubt there are statutory exceptions to this rule, but a contract of sale is within the rule and not within the exceptions. It is no doubt open to the parties to a contract of sale to agree that the interest of either party thereto shall not be transferable, and if there is such an agreement between the parties, it will not be open to either patty to that contract to assign his interest under the same but in the absence of any such agreement the benefit of such a contract can be assigned: vide Fry on Specific Performance, Edn. 6, para. 222 and C Muniswami Nayudu v. Sagalaguna Nayudu A.I.R. 1923 Mad. 699.
16. But we are unable to agree with the learned advocate for the respondents that Mukh Ram Singh must be deemed to have assigned the benefit of the contract of November 1924 in favour of Mahabir to the extent of the share purchased by him. The case of assignment was not put forward in the written statement. In both the Courts below it was maintained by the defendants that Mahabir was a party to the contract of November 1924. This contention of the defendants has failed. In our judgment it is not open to the defendants to put forward a case of assignment for the first time in second appeal, It must, therefore, he held that it is not open to Mahabir to claim the benefit of the contract of November 1924 and as such the plaintiff is entitled to enforce the agreement dated 26th December 1924 against Mahabir provided Mahabir had notice of that agreement. Neither of the Courts below have tried the question whether or not Mahabir was aware of the agreement with the plaintiff and indeed no issue on the point was framed by the trial Court.
17. In order to decide this appeal we must have a finding From the lower appellate Court on the following point;
18. Is Mahabir a transferee for value in good faith without notice of the contract, dated 26th December 1924.
19. Parties will be allowed to adduce evidence on the point. On receipt of the finding the usual ten days will be allowed for objections.