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Shiam Sunder Lal Vs. Durga and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal Nos. 1899 of 1962 and 2292 of 1963
Judge
Reported inAIR1966All185
ActsContract Act, 1872 - Sections 56; Specific Relief Act, 1877 - Sections 21; Uttar Pradesh Tenancy Act; Uttar Pradesh Urban Area Zamindari Abolition and Land Reforms Act, 1957 - Sections 5, 8, 10 and 17; Uttar Pradesh Urban Areas Zamindari Abolition Rules, 1957 - Rules 38 and 39
AppellantShiam Sunder Lal
RespondentDurga and anr.
Appellant AdvocateJagdish Swarup and ;S.D. Agarwala, Advs.
Respondent AdvocateA. Banerji, Adv.
DispositionAppeal allowed
Excerpt:
.....below has given good reasons for holding that the enforcement of the agreement of sale did not depend on the suit for ejectment against the tenants if decreed only by the trial court. neither he can be directed to execute the sale deed and upon his failure to do so nor would the court be in a position to have the document executed under the provisions of order 21 rule 34 of the c......suit the defendant had entered into a contract for sale to the effect that he would execute the sale deed with respect to the plots in suit at a price to be worked out at the rate of rs. 650/- per kacha bigha within a period of one month after the decree for ejectment of the tenants. that a sum of rs. 1000/- was advanced as earnest money on condition that the said amount shall be returned to the plaintiff together with interest at the rate of 6% per annum in case the defendants were not able to secure the ejectment of the tenants and it was further agreed that if the defendant after the ejectment of the tenants was unwilling to execute the sale deed it would be open to the plaintiffs to obtain the execution of the sale deed through court. it was further alleged that the defendant's.....
Judgment:

S.C. Manchanda, J.

1. These two appeals raise common contentions and they are disposed of by a single order. They are against the order of the District Judge dated, the 21st April, 1962 confirming the judgment and decree of the trial Court dated, the 3rd May 1960, decreeing the plaintiffs' suit for specific performance of the contract dated the 25th March 1955 and directing the defendant to execute the deed of sale in favour of the plaintiff and to get it registered within one month from the date of the decrees after taking from the plaintiffs the balance ofthe purchase money and in default the deeds of sale would be executed by the Court on behalf of the defendant after the plaintiffs have deposited the balance of the purchase money within the time to be specified,

2. The plaint allegations were that the defendant was the owner and the Zamindar of the plots in dispute lying within the Municipal Limits of the town of Meerut. That the chief tenant was one Moti of all these plots who had sublet them to tenants, and on account of subletting the defendant had filed a suit against Moti as well as the sub-tenants under Section 171 of the U. P. Tenancy Act (Act XVII of 1939). That during the pendency of the said suit the defendant had entered into a contract for sale to the effect that he would execute the sale deed with respect to the plots in suit at a price to be worked out at the rate of Rs. 650/- per Kacha Bigha within a period of one month after the decree for ejectment of the tenants. That a sum of Rs. 1000/- was advanced as earnest money on condition that the said amount shall be returned to the plaintiff together with interest at the rate of 6% per annum in case the defendants were not able to secure the ejectment of the tenants and it was further agreed that if the defendant after the ejectment of the tenants was unwilling to execute the sale deed it would be open to the plaintiffs to obtain the execution of the sale deed through Court. It was further alleged that the defendant's suit for ejectment of the tenants was dismissed by the trial Court but on appeal to the Commissioner a decree for ejectment of the tenants was granted on the 14th September 1955. Against that decree the tenants went up in appeal and ultimately the Board of Revenue confirmed the Commissioner's decree for ejectment of the tenants, on 12-8-1958. Thereupon, the plaintiff's issued notices to the defendant to have the sale deed executed but to no effect. Hence the suit.

3. The defendant's case was that the agreement was conditional upon a decree of ejectment being obtained from the revenue Court and that there was no agreement between the parties that the defendant would be obliged to execute the sale deed if he was able to secure the decree for ejectment from an appellate Court. That he had to spend a sum of Rs. 2500/-in the litigation to eject the tenants and therefore, he was not bound to execute the deed of sale. Three issues were struck-

'(1) Whether the defendant had agreed to execute the sale deed only if the suit for ejectment was decreed by the particular trial Court and not by the appellate Court ?

(2) Whether the defendant had made a breach of contract as alleged ?

(3) To what relief if any is the plaintiff entitled ?'

4. Both the Courts below have given concurrent findings deciding issue No. 1 in the negative and issue No. 2 in the affirmative. The findings that the intention of the parties was never that the agreement to sell would only be enforced if the suit against the tenants was decreed by the trial Court and that there was a breach of contract are prima facie findingsof fact which cannot be interfered with in a second appeal. Even if they were questions of law the Court below has given good reasons for holding that the enforcement of the agreement of sale did not depend on the suit for ejectment against the tenants if decreed only by the trial Court. Therefore on the merits the appellant has no case.

5. A new question of law, however, was raised at the time of the arguments, that in view of the provisions of U. P. Act IX of 1957, Urban Area Zamindari Abolition and Land Reforms Act, (hereinafter referred to as the Act) and in pursuance of the notification issued under Section 8 thereof by the Government, dated the 16th June 1964, all the agricultural lands within the urban areas, inter alia, of the Municipality of Meerut had now vested in the Government and as the petitioner was no longer the owner of such land he could not be asked to convey property which did not belong to him any longer.

According to the defendant appellant his rights in the plots in suit have vested in the Stale Government since the 16th July 1964 and he cannot, therefore, now be asked to convey property which does not belong to him. No decree accordingly, for specific performance can possibly now be made. Neither he can be directed to execute the sale deed and upon his failure to do so nor would the Court be in a position to have the document executed under the provisions of Order 21 Rule 34 of the C. P. C. Further more, under Section 56 of the Contract Act the contract had now become impossible of performance for reasons over which the promisor had no control viz. the passing of legislation by the Legislature and therefore the appeal should be allowed and the decree for specific performance be set aside.

6. As this was a new ground taken, parties were given time to file affidavits. The affidavits filed, however, were vague. A copy of the aforesaid notification dated the 16th June 1964 only was filed but the necessary papers which would indicate conclusively as to whether the suit plots were considered to be agricultural plots and included in the final demarcation, were not produced. A further opportunity, therefore, was given to the parties to produce the said document.

7. The question which required to be considered was whether the plots in dispute fell within the notification issued under Section 8 of the Act. If these plots so fell, then it is manifest that the ownership of the plots under Section 8 of the Act had statutorily vested in the State. Section 8 reads:

8. 'After the agricultural area has been demarcated under Section 5 the State Government may at any time by a notification in the Official Gazette declare that as from a date to be specified all such areas situated in the urban area was vested in the State and as from the beginning of the date so specified all such agricultural areas shall stand transferred to and vest, except as hereinafter provided, in the State free from all encumbrances.'

Section 9 requires the notification to be published in the Gazette and upon 'such publication'shall be conclusive proof of the due publication thereof. Section 10 sets out the consequences of vesting, and the various sub-clauses leave no doubt that no right, whatsoever, is left in the intermediary to transfer such plots. Thereafter under Section 17, the intermediary might acquire new statutory rights under the Act but those rights would not be one which the contractee under a contract entered into prior thereto could possibly enforce. It has been laid down by the Supreme Court in Rana Sheo Ambar Singh v. Allahabad Bank Ltd., AIR 196.1 SC 1790 that even a mortgagee would not be entitled to the new rights which the mortgagor might acquire under the U. P. Zamindari Abolition and Land Reforms Act. A fortiori, the plaintiff in the present case, would not be able to ask for the enforcement of any rights which the defendant might acquire under Section 17 of the Act. It is also settled law that a Court of appeal cannot ignore the law as it stands on the day when it decided the appeal. It will therefore, not be possible to ignore the Act of 1957 by saying that the parties are to be governed by the law as it stood at the time of the institution of the suit.

8. The only point which remained for consideration was whether the final demarcation under Section 5 of the Act had been made. An affidavit was filed stating that the final demarcation of the plots in dispute had taken place as provided by the U. P. Urban Areas Zamindari Abolition Rules 1957. From this it follows that the consequences of vesting as set out in Section 10 of the Act would ensue. This Section, which is in pan materia with Section 67 of the U. P. Zamindari Abolition and Land Reforms Act reads:---

'Where a notification under Section 8, has in respect of any agricultural area been published in the official gazette, then, notwithstanding anything contained in any contract or document or in any other law for the time being in force, but same as otherwise provided in the Act the consequences as hereinafter set forth shall from the beginning of the date of vesting, ensue in respect of such area.

(i) All suits and proceedings of the nature to be prescribed pending in any Court at the date of vesting and all proceedings upon any decree or order passed in any such suit or proceedings previous to the date of vesting shall be stayed.'

Rules 38 and 39 provide for the stay of certain suits and the effect thereof. On the basis of these rules it was attempted to be argued on behalf of the plaintiff-respondents that suits for specific performance, as in the present case, do not fall to be stayed nor will such a suit 'abate' as provided in Rule 39 of the U. P. Urban Areas Zamindari Abolition and Land Reforms Rules 1957. These rules have no application and in any event it is unnecessary to go into this question as in law it is not possible to pass a decree for specific performance when the contract itself has become impossible of performance. In the present case the property in suit having vested in the State under theprovisions of Section 10 of the Act, the defendant cannot possibly be asked to execute a sale deed in respect of property of which he has ceased to be the owner by operation of law,

9. For the reasons given above, there is no alternative but to allow the appeals of the defendant-appellants and to set aside the judgment and decree of both the Courts below and to dismiss the suits.

10. The appeal is accordingly allowed, butin the circumstances of the case there will beno orders as to costs.


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