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Ramji Lal and ors. Vs. Ram Pershad and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtDelhi High Court
Decided On
Case NumberE.F.A. No. 5 1976
Judge
Reported inAIR1979Delhi129; 1979RLR392
ActsSpecific Relief Act, 1877 - Sections 27; Code of Civil Procedure (CPC), 1908 - Sections 47
AppellantRamji Lal and ors.
RespondentRam Pershad and anr.
Appellant Advocate Lila Dhar, Adv
Respondent Advocate S. Shukla, Adv.
Cases ReferredMahomed v. Rajooma
Excerpt:
.....directing only the first defendant to execute the sale deed and the cancellation of the previous sale in favor of judgment debtors 2;o 5 is not a procedure appearing in the specific relief act. 27(b) of the specific relief act, 1877, and on reading the judgment in the suit i find that though the legal position was clearly understood by the trial judge, it appears that on account of inexperience the subordinate judge was not able to appreciate that be had to pass a decree for specific performance against all the defendants and not a decree cancelling the sale in favor of the subsequent purchasers (judgment-debtors nos. it may well be asked whether it is open to the court to interpret a decree in this way when it is not openly stated that rs. the r6sult of this discussion would be that..........performance of the agreement in favor of the plaintiff and also ordered the cancellation of the sale in favor of the other defendants (subsequent transferees who are the present appellants).2. two separate appeals were filed in the circuit bench of the punjab high court being b. y. a. no. 142-d/61 and r. f. a. no. 146-d/61. these appeals were dismissed on 28th oct. 1971, by a division bench of this court (andley and jagjit singh jj.). then execution proceedings were taken out by the decree-holder. the first defendant was ready to execute a sale-deed in favor of the plaintiff-decree-holder, but the other defendants who were in possession by reason of the sale in their favor raised certain objections regarding the execution. those objections have been decided in favor of the.....
Judgment:

1. This appeal is concerned with some questions which have arisen during execution proceedings relating to a decree for specific performance of an agreement to sell agricultural land situated in village Saboh, Shahdara, Delhi. The contract was between Ram Pershad, decree-holder (now respondent No. 1) and Bhu. Dev Sharma, (respondent No. 2 in this appeal). The other parties to the suit were subsequent transferees who were alleged to be bound by that agreement; these parties are the present appellants. The suit was tried by Shri B. K. Agnihotri, Subordinate judge, 1st Class, Delhi who decreed the suit on 17th Aug., 1961. The decree as passed directed the specific performance of the agreement in favor of the plaintiff and also ordered the cancellation of the sale in favor of the other defendants (subsequent transferees who are the present appellants).

2. Two separate appeals were filed in the Circuit Bench of the Punjab High Court being B. Y. A. No. 142-D/61 and R. F. A. No. 146-D/61. These appeals were dismissed On 28th Oct. 1971, by a Division Bench of this Court (Andley and Jagjit Singh JJ.). Then execution proceedings were taken out by the decree-holder. The first defendant was ready to execute a sale-deed in favor of the plaintiff-decree-holder, but the other defendants who were in possession by reason of the sale in their favor raised certain objections regarding the execution. Those objections have been decided in favor of the decree-holder and the aggrieved judgment-debtors have come in appeal to this Court.

3. The two Points raised by the appellants were (a) that the money payable under the decree as consideration for the sale, amounting to Rs. 10,000/- should be paid to them and not to judgment-debtor No. 1 and (b) possession could not be taken away from them as there was no decree for possession against them. Regarding the first point, the executing court held that as the sale-deed is to be executed by defendant No. I he alone is entitled to get the amount, but the other judgment debtors can probably have their relief somewhere else. On the second point, it was held that delivery of possession was ancillary to the execution of the sale-deed; and hence, possession had to be delivered by the appellants. Reliance was placed on two judgments delivered by Avadh Behari J. which are reported as Ex-Servicemen Enterprises (P) Ltd. v. Sumey Singh, Air 1976 Del 56 and Ex-Servicemen Enterprises (P) Ltd. v. Sumey Singh 0065/1976 : AIR1976Delhi181 . 1 have seen those two judgments but find that they do not really cover the point now before the Court.

4. In my view, both the questions raised by the appellants are of a-formidable nature, because it appears to me that there has been a mistake of the trial court when decreeing the suit. The problem is, how to solve the difficulty created by this mistake. As it seems, the matter has come before a Division Bench of this Court, when the defect in the decree has not been pointed out and hence without Realizing it (or so it seems to me) the parties have let the decree stand as it is. It is now necessary to focus attention on the defects before trying to find out the way in which the same can be remedied.

5. When the suit was decreed by the trial court, the operative part of the judgment read as follows :

'For the reasons recorded above, I pass a decree in favor of the plaintiff, and against the defendants. I declare. that the sale in favor of defendants Nos. 2 to 5 of the land in suit is null and void and I hereby cancel It, and I order the defendant No. I to execute the sale deed in favor of the plaintiff on payment of balance consideration of Rupees 10,000/-, within two months from to-day, i. e. on or before 17th Oct., 1961. If defendant No. 1, fails to execute the sale deed on the due date in favor of the plaintiff, then the court shall execute the same. The defendant No. 1 shall bear the costs of the suit.'

It is noticeable that the court has held the sale in favor of defendants Nos. 2 to 5 to be void and has, thereforee, cancelled it, and thereafter the court has directed the first defendant to execute the sale-deed. A time limit for paying Rs. 10,000/- has, also been fixed, but there is no mention in the judgment as to who is to be paid the sum of Rs. 10,000/-. The decree drawn up, in this case (which is the one being executed) is in similar terms and the operative part reads as follows :- .

'This suit coming on this day for final disposal before me in the presence of Shri Shiv Shankar Shukla and Shri Amar Nath Monga, Advocates, Delhi, for the plaintiff and Shri Dharain Pal Bliatia Advocate, Delhi, for the defendant. It is ordered that the plaintiff is hereby granted a decree against the defendants declaring that the sale in favor of defendants 2 to 5 of the land in suit is null and void and the same is hereby cancelled. -It is, further ordered that the defendant No. 1 shall execute the sale deed in favor of the plaintiff on the payment of balance consideration of Rs. 10,000/- within two months from 17-8-1961, i. e. on or be fore 17-10-1961. It is further ordered that if defendant No. 1 fails to execute the sale deed on the due date in favor of the plaintiff, then the same shall be executable through court, and it is further ordered that the defendant No. 1 do also pay Rs. 1749-25 np the costs of the suit to the plaintiff.' The contention of the learned counsel for the appellants on the point as to who has to be paid the sum of Rs. 10,000/- is a most interesting one. It is submitted that the sale is based on an agreement to sell as a result of which the plaintiff paid Rs. 2,000/- to defendant No.1 and he had to pay the balance sum of Rs. 10,000/- to defendant No. 1 on execution of the sale-deed. thereforee, under that contract the first defendant had to get Rs. 12,000/- For certain reasons, the agreement to sell did not go through, and so acting In the belief that he could sell to someone else, the first defendant sold the property to defendants 2 to 5, (now judgment-debtors 2 to 5) for Rs. 17,000/- This sale was apparently executed on 29tb Oct. 1959, and registered on 30th Oct. 1959. In terms of this sale, the first defendant got Rs. 17,000/-. If the order of the court is interpreted as allowing the first defendant to get the sum of Rupees 10,000/- also, it will mean that defendant No. 1 will have got Rs. 12,000/- from the plaintiff and Rs. 17.000/- from the other subsequent party, which is now judgment-debtors Nos. 2 to 5 (the, present appellants). In other words the consequences of this interpretation will be that the first judgment-debtor will have received consideration for the sale both from the plaintiff-decree-holder as well as the judgment-debtors by the subsequent sale. It is urged that this interpretation is an impossible situation which cannot be allowed in law. I fully agree with this view that the result of interpreting the decree to mean that the consideration has to be paid to the first defendant (judgment-debtor No. 1) will mean that he will have got consideration twice-fold for the same land. At the same time, it is contended by learned counsel for the appellants that the decree is silent regarding possession and no decree for possession has been passed. He says that in execution, of the decree, judgment -debtors Nos. 2 to 5 cannot be dispossessed from the land without an express conclusion to the effect in the judgment or an express decree against them in this behalf as part of the decree actually drawn up. As it happens, the decree passed against defendants Nos.. 2 to 5 is a decree cancelling their sale-deed. The sale deed consists of two parts, namely, the transfer of , land and the payment of consideration by these defendants. It would follow that somehow or the other the amount of Rs. 17,000/-has also to be returned to this party before the cancellation can be deemed to be effective. All these points raise a most interesting and difficult problem in law which has somehow to be solved in these proceedings or the decree has to be held to be inexecutable which is a conclusion which I would not like to reach unless I am absolutely compelled.

6. It is now necessary to focus attention on the mistake made by the trial court when passing-the judgment on 17th Aug. 1971. It is well understood that in a suit for specific performance based on. a contract, any subsequent transferee who has notice is also bound by the terms of the contract and a decree for specific performance has also to be passed against such a transferee. The present suit was decided when the Specific Relief Act, 1877 was in force and the precise Section dealing with this case is S. 27 which is in the following terms:-

'27. Except as otherwise Provided by this Chapter, specific performance of a contract may be enforced against-

(a) either party thereto:

(b) any other person claiming under him by a title arising subsequently to the contract except a transferee for value who has paid his money in good faith and without notice of the original contract;

(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant:

(d) when a public company has entered into a contract and subsequently becomes amalgamated with another public company, the new company which arises out of the amalgamation;

(e) when the promoters of a public company have before its incorporation, entered into a contract, the company: provided that the company has ratified and adopted the contract and the contract is warranted by the terms of the incorporation.'

The persons who are bound by the contract include persons who have obtained a subsequent title. This is provided in sub-clause (b) of the above 'Section. The normal 'decree which is to be passed in such cases has been the subject-matter of many reported decisions. I refer for reference to Kafilladdin v. Samiraddin : AIR1931Cal67 , Gaurishankar v, Ibrahim Ali and Mathai Thommen v. Thomas Mathew Air 1952 Trav Co. 199 and other similar cases. These judgments show that the proper decree to be drawn up in such cases is that the subsequent transferee must be ordered to execute the sale-deed so as to bring about the transfer to the decree-bolder. In my view, the trial Court in this case has blundered very badly by directing only the first defendant to execute the sale deed and the cancellation of the previous sale in favor of judgment debtors 2;o 5 is not a procedure appearing in the Specific Relief Act. At the same time, I must also say that there was no prayer for cancellation of that sale in the suit. The plaintiff had sued for specific performance of the contract, he had joined the subsequent purchasers, who he claimed in law were equally bound with the original contracting party as they had notice, and thus were bound by the agreement to sell. This is so provided in S. 27(b) of the Specific Relief Act, 1877, and on reading the judgment in the suit I find that though the legal position was clearly understood by the trial judge, it appears that on account of inexperience the Subordinate judge was not able to appreciate that be had to pass a decree for specific performance against all the defendants and not a decree cancelling the sale in favor of the subsequent purchasers (judgment-debtors Nos. 2 to 5, the present appellants). He should also have directed the transferee-Judgment, debtors to execute the sale deed and these Judgment-debtors should also have been paid the consideration for the sale as they were then the owners of the property on account of the subsequent transfer to them. By some very obvious error, the trial court was of the view that he should cancel the sale-deed in favor of the present appellants and pass the decree for specific performance against the previous owner. However, the decree is silent as to how the decree for cancellation of the sale is to be carried into effect There ought to have been a direction that defendants Nos. 2 to 5 should give up possession and should be paid back the consideration of Rs. 17,000/- already paid by them or should be paid such other sum as could keys been worked out by the Court. In fact, the decree merely orders the cancellation without directing the reversal of the obligations incurred by the contracting parties which are ordinarily, delivery of possession and payment of consideration. Having located this very serious blunder, which has so far passed undetected, I am now to find out a way which should restore to the parties the true consequences and effect of getting the suit decreed. I find myself unable to rectify the decree as nobody has appealed against the decision of the High Court which has merely affirmed the decree, and hence, the alternative is either to say that the decree cannot be executed, which would mean denying the plaintiff the fruits of the litigation, or to find a way in which the present appellants can be made to give up possession and also be refunded the consideration paid by them. (Rs. 17,000/-).

7. Turning now to the relief of possession, it has been held in a number of reported cases delivered under the Specific Relief Act, 1877, that a decree for specific performance includes the grant of delivery of possession which is merely ancillary to the decree for spec6fic performance. Relevant cases are, Arjun Singh v. Sahu Maharaj Narain, : AIR1950All415 , Kartik Chandra Pal v. Dibakar Bhattacharjee, : AIR1952Cal362 , Pt. Balmukand v. Veer Chand, : AIR1954All643 , Janardan Kishore Lal Singh Deo v. Girdhari Lal Sunda, : AIR1957Pat701 , and Dadulal Hanumanlala v. Sint. Dec Kunwar Bai, : AIR1963MP86 . In all these cases there is adequate discussion to the effect that when there is a decree for specific performance, the relief of possession. is to, be automatically granted. These judgments I may indicate here are based on the Specific Relief Act, 1877 The position has been altered by Section 22 of the Specific Relief Act, 1963, wherein power has been given to the plaintiff to ask for possession, partition and separate possession in addition to specific performance. thereforee, the present legal position is that there may be a decree for specific performance with possession or without possession, but the previous legal situation was that where specific performance was decreed then possession had to be delivered. As it happens, the decree for specific performance has been passed in this case against defendant No. 1 and not against the other defendants. This means that the decree-holder can obtain possession from defendant No. - 1 but as defendant No. 1 is not in possession he is in no position to deliver possession. The problem is, whether the decree for specific performance can be executed so as to get possession from defendants 2 to 5 against whom no decree for specific performance was passed? If the decree had been rightly framed under S. 27(b) of the Specific Relief Act, 1877, then no doubt these defendants could also be dispossessed by a mere decree for specific performance on the basis of the aforementioned judgments. What is to happen when there is no decree for specific performance against the subsequent transferees? Obviously, In such a case the decree for specific performance cannot be executed against persons who have not suffered the same. There being no decree for specific performance against defendants 2 to 5, there can be no execution against them so as to specifically perform the agreement, and thereforee, possession cannot be taken away from these defendants on the basis of the decree for specific, performance. This is my conclusion regarding the non-executability of the decree for specific performance.

8. However, the decree provides for execution of a sale-deed by defendant No. 1, who is ready to execute the same. Suppose such, a sale-deed is executed, then does the decree holder have to file a subsequent suit against the appellants or can he get relief in the present proceedings.

9. I now come to examine whether the other part of the decree, namely, the cancellation of the sale-deed in favor of Judgment-debtors 2 to 5 can result in -any relief being granted to the plaintiff decree-holder. As I have already pointed out, this decree is entirely erroneous. But, it has become final and, thereforee, cannot be questioned in the executing court. The result of this decree would be that the sale-deed for Rs. 17,000/- in favor of defendants 2 to 5 would stand cancelled and they would, no longer be owners. But in my view, they would be entitled to a refund of their consideration from defendant No. 1. That consideration was Rs. 17,000/- as admitted by all parties and found by the court Consequently, a sum of Rs. 17,000/- has to be paid to judgment. debtors 2 to 5 and then they can be asked to give up possession. But, how is this sum to be paid to them? In my view, they can be paid a sum of Rs. 10,000/- which is already in the court and they can execute the decree in their favor for Its. 7,000/- against defendant No. 1. As I read it the effect of the cancellation of the sale-deed in favor of judgment-debtors 2 to 5 means that they have to give up the land but get Rs. 17,000/hom defendant No. 1. They are in other words decree-holders to the extent of Rupees 17,000/- against Judgment-debtor No. 1. In order to enable this decree being executed, these judgment-debtors are entitled to take away the sum of Rs. 10,000/- which has been paid in terms of the decree by the plaintiff decree-holder and they are also entitled to get an additional sum of Rs. 7,000/-.

10. This is my interpretation of the manner in which the decree can be executed. It may well be asked whether it is open to the Court to interpret a decree in this way when it is not openly stated that Rs. 17,000/has to be paid by judgment-debtor No. I to judgment-debtors 2 to 5. I think that this situation is catered for in the aforementioned judgment of the Calcutta High Court in Kartik Chandra Pal v. Dibakar Bhattacharjee, : AIR1952Cal362 , in which the following passage is of interest (at p. 363):-

'As observed by Rankin. C. J. in the case of kieramba Chandra v. Jyotish Chandra : AIR1932Cal579 , the usual form of a decree in a suit for specific performance is that the agreement is referred to be specifically performed and carried into execution with a further provision about the details of the steps to be taken by the parties. The most important part of the decree is that portion where the Court directs the contract to be specifically performed. The details which follow do not in any way limit the jurisdiction of the executing Court to the particular steps which are mentioned in the decree but all such other steps which ought to be taken for giving full effect to the decree for specific performance are not only within the competence of the Court but the Court is bound to assist the party to that extent. Rankin C. J. quotes with approval the observations by Sergent C. J. in K Mahomed v. Rajooma (1888) 12 Bom 174, where a decree was allowed to be amended to be put in the proper and usual form so as to declare 'that the agreement ought to be specifically performed and the Court doth order and decree that the same be specifically performed accordingly.' for the purpose of avoiding any doubt as to its scope and implication.'

The learned observations of Rankin C. J. as to the duty of the Court to assist the parties are of great relevance in the present case. There has been an obvious blunder by the trial court deciding the suit. Still, the executing Court his to implement the intention of the Court which is to transfer the ownership to the plaintiff decree-holder. It must also implement the court's decision that the sale in favor of judgment-debtors 2 to 5 is cancelled being and void. Although, this is an erroneous decision not permitted by law, still the Court has to implement it. The implementation of this part of the case requires that the sum of Rs. 17,000/- should be paid to judgment-debtors 2 to 5 and they should give up the property. The decree in execution is not only a decree for specific performance passed against judgment-debtor No. 1, but it is also a decree for cancellation of the sale-deed in favor of judgment debtors 2 to 5. The full effect of that decree is that the sum of Ps. 17,000/- has to be restored to judgment-debtors 2 to 5 and then the decree for specific performance in favor of the plaintiff-decree-holder can be executed even as regards possession. In order to achieve this result, the following steps are necessary: (1) the first judgment-debtor has to execute a sale-deed in favor of the decree-holder. (2) A sum of Rs. 17,000/- has to be paid to judgment-debtors 2 to 5 as a step towards cancellation of their sale. (3) A sum of Rs. 10,000/- deposited, in the court by the decree-holder has to be paid to judgment debtors 2 to 5. In addition, these judgment-debtors are entitled to get a sum of Rupees 7000/- from the first judgment-debtor. They have not applied for execution of this part of the order, but this is inherent in a decree for cancellation. Without this part of the order being implemented, the obvious result would be that judgment-debtor No. 1 would get the sale price twice which is entirely wrong. In fact, he is only to get the sale price once and that also from the decree-holder. In other words, the Judgment-debtor No.- I has to get Rs. 12,000/- from the decree-holder and nothing more. He has to restore Rs.. 17,000/- to defendants 2 to 5. Part of this order can be implemented by paying the sum of Rs. 10,000/- which is in Court to judgment-debtors 2 to 5. For the balance sum they can take out execution against the first judgment-debtor. The final step is the delivery of possession to the decree-holder. On the execution of the sale-deed, the decree-holder is entitled to get an order for possession which will also be binding against judgment-debtors 2 to 5. These judgment debtors will be entitled to withdraw the sum of Rs. 10,000/- and for the balance sum of Rs. 7,000/- they may take out execution against judgment-debtor No. 1. Till the sum of Rs. 17,000/- is paid to the appellants (judgment-debtors 2 to- 5) they are entitled to retain possession. The r6sult of this discussion would be that this appeal has to succeed on both the grounds urged by the appellants but, in spite of this success, the decree in favor of the first respondent is not held to be inexecutable. As regards the sum of Rupees 10,000/- which is now in Court, though it has been withdrawn on furnishing security by respondent No. 2, the said sum has to be paid to the appellants as part of the refund of Rupees 17,000/- which has been ordered as a result of the cancellation of the sale in their favor. The executing court will now get back this sum and direct it to be paid to the appellants. in order to get possession, the decree-holder will have to arrange Rs. 7,000/- more as paid to the appellants as they cannot be deprived of their possession till they have been paid the sum of Rs. 17,000/-. This sum of Rs. 7,000/- has to be paid by Shri Bhu.Dev Sharma respondent No. 2 as he received the same under the sale which was cancelled. Till such sum is refunded to the appellants, the cancellation of the sale in their favor is not complete, thereforee, execution has to be taken out to get this sum back. As the appellants may not take out execution for this sum and may thereforee retain possession of the land, the executing Court may allow the decree-holder to pay this additional sum of Rs. 7.000/- and help the decree-holder to get a refund of this amount from the second respondent Bhu Dev Sharma. These steps will restore all the parties to the correct legal position brought about by the decree as actually passed in this suit. Although this appeal has succeeded, I find that the necessity for the same is on account of the fault of the trial court when it decided the suit and, thereforee, I leave the parties to bear their own costs in this court and also the court below.

11. Appeal allowed.


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