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Gurusami Sastrial and ors. Vs. Ganapathia Pillai - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Judge
Reported in(1882)ILR5Mad337
AppellantGurusami Sastrial and ors.
RespondentGanapathia Pillai
Excerpt:
.....in the event of his failure to complete the purchase, to pay rs. 5. contemporaneously with the sale-deed the appellant gurusami executed an agreement in which he bound himself to make good to the other appellants any loss occasioned by a dispute respecting the property sold to them, and, after declaring that the sale had been made for the benefit of his family, he undertook to give to these appellants out of his lands in ponnur the equivalent of any portion of the property sold to them to which his son mahadeva, then an infant, might prefer and establish a claim. the subordinate judge had observed of the appellant gurusami that he was a well known litigant, and that, although not thirty years old, he had run through his patrimony of some 60 velis of land, had undergone rigorous..........shall remit to the court of first instance for trial the issues following : was the property which gurusami contracted to sell to the plaintiff--respondent--at the time of the contract, in his hands, ancestral ?if it was so, was there a necessity sufficient to justify a sale to the respondent ?23. the court of first instance will admit such further evidence on the trial of these issues as the parties respectively may properly adduce, and will return its findings with the evidence to this court within three months from the date of receiving this order, and on the return of the findings, ten days will be allowed for filing objections thereto.24. in compliance with the above order, the judge found both issues in the affirmative.25. this appeal came on again for hearing on friday the 21st.....
Judgment:

1. The appellant Gurusami obtained a decree in Original Suit 270 of 1875 in the Court of the District Munsif of Mayavarm for possession of a share in the village of Vaithinathan Pattavirthi, and, on the 2nd October 1876, he executed an agreement to sell the share to the respondent Ganapathia Pillai for the sum of Rs. 7,500. It was agreed that the sale should be com-pleted on the 30th December 1876, and that the seller should pledge a share held by him in the village of Ponnur to secure the purchaser from any loss he might sustain if a claim were made upon the property agreed to be sold, by the son of the seller then an infant aged 1l/2 years.

2. On the same date the respondent paid Rs. 1,000 as a deposit and executed a counter-agreement binding himself to pay the balance of the purchase-money on the 30th December 1876, and, in the event of his failure to complete the purchase, to pay Rs. 1,000 in addition to the deposit money.

3. On the 30th December 1876 the respondent tendered to Gurusami the balance of the purchase-money and stamp paper and required him to execute the sale-deed. Gurusami refused to do so, and subsequently refused to register the agreement of October 2nd, 1876. On the 2nd February the agreement was registered without his consent.

4. On February 9th, 1877, Gurusami executed a sale-deed, conveying the share in Vaithinathan Pattavirthi to the appellants Ramasami Pillai and Muttukumara Pillai in consideration of Rs. 9,000, of which Rs. 3,000 are expressed to have been paid in cash, Rs. 5,000 secured by a mortgage of the property sold, and Rs. 1,000 by the bond of the purchasers.

5. Contemporaneously with the sale-deed the appellant Gurusami executed an agreement in which he bound himself to make good to the other appellants any loss occasioned by a dispute respecting the property sold to them, and, after declaring that the sale had been made for the benefit of his family, he undertook to give to these appellants out of his lands in Ponnur the equivalent of any portion of the property sold to them to which his son Mahadeva, then an infant, might prefer and establish a claim.

6. The appellants Ramasami Pillai and Muttukumara Pillai at the time of the execution of the sale-deed had notice of the agreement the appellant Gurusami had made with the respondent. On the 19th February 1877 the appellants Ramasami. Pillai and Muttukumara Pillai executed the decree obtained by Gurusami and obtained possession of the share in Yaithinathan Pattavirthi. The property he contracted to purchase was of peculiar value to the respondent, as it was intermixed with lands of which he was already the owner.

7. On these facts, which the Court of First Instance and the Division Bench of this Court held established, the respondent claims to obtain a decree for the specific performance of the contract of the 2nd October 1876 and for possession of the property.

8. He obtained a decree from the Court of First Instance, and, in the hearing of the appeal, the grounds set out in the memorandum of appeal were overruled, but a new objection was then taken, namely, that specific performance ought not to be decreed inasmuch as it would place the property in possession of the respondent and impose on the infant son of Gurusami the necessity of bringing a suit to vindicate what claims he may have on the property.

9. The Judges of the Division Bench were divided in opinion as to whether this plea should be allowed. The Subordinate Judge had observed of the appellant Gurusami that he was a well known litigant, and that, although not thirty years old, he had run through his patrimony of some 60 velis of land, had undergone rigorous imprisonment for perjury, and had fraudulently attempted, as plaintiff in a suit tried in the Subordinate Judge's Court, to set aside alienations made by him, as he asserted, during his minority. In advertence to these observations, Mr. Justice INNES considered it probable the sale to the respondent had not been made for purposes binding on the infant, and that it was, therefore, incumbent on the Court to protect the interests of the infant and withhold from the respondent relief which, if granted to him, would compel the infant to have recourse to a suit to recover his share of the property.

10. As to a suggestion that refusal of relief to the respondent would leave the property in the possession of the appellants Ramasami Pillai and Muttukumara Pillai Mr. Justice INNES, adverting to the finding of the Subordinate Judge that these appellants had colluded with the appellant Gurusami to defeat the respondent's purchase, observed it was extremely probable the sale to the appellants Ramasami Pillai and Muttukumara Pillai was merely nominal, and that these appellants would not take possession, and consequently the purchase would not prejudice the infant; but whether this were so or not, he considered the Court ought not to grant relief to the prejudice of the infant, although the withholding relief might lead to other consequences equally calculated to prejudice him.

11. Mr. Justice Forbes was of opinion that the circumstance that the minor was unrepresented in the suit and the possibility that his interests might be affected by a decree was not, in itself, sufficient to justify the Court in refusing the relief claimed. In the absence of evidence to the contrary,. Mr. Justice FORBES considered it should be presumed that an alienation by a father is made for the good of the family or under circumstances of necessity, and. that, until this presumption was rebutted, the act was valid and could not be questioned by a son. He observed that, if this were not so, a valid sale by a Hindu, who had a minor son, would be impossible, and negotiations for sale as rare of occurrence as they were the reverse; and, if absolute alienations were thus permitted and acted on, he could see no reason why, when there had been breach of a contract to sell, the case should be taken out of the general rule; that a Court would of course refuse to enforce a contract, if it were shown to have been unnecessary or made for improper purposes; but that, in this suit, the Court had no such state of circumstances to deal with, for the whole case for the appellants as well as for the respondent proceeded on the assumption that the appellant Gurusami was competent to alienate the property which was the subject of the suit. Mr. Justice FORBES was of opinion there was no-allegation and no evidence which would justify the Court in holding the sale was one which would not bind the minor and that the Court was not at liberty to assume it was not binding on the minor.

12. The learned Judges, being thus divided in opinion, considered the question of such general importance that it should be decided by a Full Bench.

13. We are unable to accept, without qualification, the proposition that a sale by a Hindu father is to be presumed to be valid until the contrary is shown : and the evidence in the record does not enable us in this case to assume that, had the sale to the respondent been carried out, it could have been supported against the minor.

14. As the case is presented to us in the record, the respondent seeks to enforce a contract of sale made by a Hindu who has a minor son, of immoveable property which may or may not be ancestral and for a purpose which is undisclosed. The circumstance that subsequently to the contract the respondent seeks. to enforce there has been a sale which, if relief is refused to the respondent, may leave the property in the hands of strangers, does not affect the question as to the propriety of the exercise by the Court of its discretionary authority to enforce the contract.

15. A sale to the respondent may be not more prejudicial to the interests of the minor than the sale to Ramasami and Muttukumara Pillai; but while the Court has at present no concern with the sale to these appellants, the respondent is seeking the active assistance of the Court to give effect to the contract made with him.

16. On the facts then which we regard as pertinent, can it be held that the Court ought not to award the respondent the relief he claims?

17. Imperfection of title in the seller is not sufficient by itself to justify the Court in refusing to award specific performance of a contract of sale. If the title be such as the seller can legally convey, the purchaser has the right to claim the completion of the bargain, although the title he may thereby acquire may not be indefeasible if a claim be brought by a third party. But a Court may not grant specific performance of a contract, if the contract be made by a trustee in excess of his power or involves a breach of trust.

18. If then it is known to the Court that the seller is a trustee having power to sell only under certain circumstances, ought the Court to order specific performance of a contract made by him for the sale of the trust property without having at least some proof of the existence of such circumstances ?

19. It may be argued that the Court is not to presume fraud, and, therefore, ought not to presume the seller would have entered into the contract, had not such circumstances existed as justified his action. But while it may be admitted that the seller had no fraudulent or tortious intention, and indeed that he entertained the bond fide belief that his action was warranted by the power, yet in fact it may not be so warranted and may be a fraud on the power. While the Court ought to presume innocence of intention in the seller, it is not to presume he possesses an unerring judgment: when then it is called upon to exercise a highly discretionary authority, it is entitled to require from the party claiming its assistance some proof that, in the exercise of such authority, it will not abet a breach of trust. The party seeking its assistance is constrained by the hypothesis to admit that the power to sell can be exercised without a breach of trust only under certain conditions, and seeing that the Court by specifically enforcing the contract may prejudice persons who have not been brought before it and who may be miners by compelling them to have resort to legal proceedings to assert their rights, it is not unreasonable to require that some proof should be adduced of the existence of such conditions. To apply this conclusion to the case before the Court--When a Hindu family is undivided in estate, it is a presumption of law that the property held by any member of it belongs to all the members: this presumption may be somewhat less strong in the case of a father and sons than in the case of undivided brethren, and in each case the strength of the presumption must vary with the particular circumstances.

20. It is suggested in the present case that the father was of improvident habits, and had, so far from acquiring property, dissipated much of the ancestral estate. It appears that he had recovered the property by suit, but whether or not under such circumstances that, although at one time ancestral, he might treat it as self-acquired, is not shown. On the other hand, it appears from the terms of the contract, as has before been observed, that the parties contemplated a claim might be successfully made by the son. There is no sufficient evidence at present on the record to disturb the presumption, that the property is ancestral.

21. If the property be ancestral, the Court has notice that the power of the seller, if he be a Hindu with an undivided son, can be exercised without a breach of trust only when there exists a necessity sufficient in law to justify the sale, and that there is a person who is entitled to interdict it.

22. If this person is not brought before the Court that he may have the opportunity of offering such objections to the sale as it is within his competency to set up, the Court should require the party desiring to enforce the sale to give some proof of the competency of the seller--in other words of the necessity for a sale. Apart from a declaration made contemporaneously with, and to support, the sale of February 9th, 1877--a sale contrived to defeat the contract made with the respondent--there is no evidence in the record of any such necessity, and to that declaration we cannot, under the circumstances, attach much weight. The objection we have been considering comes no doubt with a bad grace from the appellants who have ,been parties to the sale of February 9th, 1877, and who then declared the existence of a necessity for a sale : it was taken too at the last stage of the proceedings. Had the decree of the Court of First Instance affected the appellants alone, we should have held the objection was taken too late and that on that account it should not have been entertained; but, seeing that the effect of a decree may be to put a minor who is not before the Court in a worse position than he would be in otherwise, we are not prepared to say the learned Judges of the Division Bench exercised their discretion erroneously in entertaining the objection. It cannot, however, be denied that by the omission of the appellants to raise it in the Court of First Instance, the respondent has been prejudiced, as he might have replied to it and possibly shown either that the property was not, in the hands of the seller ancestral or that there existed a necessity for a sale; and in order that so far as possible hardship to the respondent may be avoided before pronouncing a decree, we shall remit to the Court of First Instance for trial the issues following :

Was the property which Gurusami contracted to sell to the plaintiff--respondent--at the time of the contract, in his hands, ancestral ?

If it was so, was there a necessity sufficient to justify a sale to the respondent ?

23. The Court of First Instance will admit such further evidence on the trial of these issues as the parties respectively may properly adduce, and will return its findings with the evidence to this Court within three months from the date of receiving this order, and on the return of the findings, ten days will be allowed for filing objections thereto.

24. In compliance with the above order, the Judge found both issues in the affirmative.

25. This appeal came on again for hearing on Friday the 21st day of January 1881, and stood over for consideration till March 8th, 1882, when the Full Bench delivered the following

26. The finding of the Court below that there existed a necessity sufficient to justify the sale of the minor's interests cannot be accepted.

27. It is shown that the father was indebted to the extent of Rs. 2,600. A sale of his own interest would have more than sufficed to discharge this debt. The character of the litigation to which it is said he intended to devote the residue of the purchase money was not such as to justify the alienation of the interest of his minor son.

28. If we were at liberty to act on an opinion as to what might eventually make most for the benefit of the minor, we might, under the circumstances, come to the conclusion that the sale to the respondent should be supported : but for the reasons we have stated in our order of remand, it appears to us we are bound to confine ourselves to the propriety of the transaction the respondent invites us to complete and that we are not entitled to uphold an act in itself a violation of the law on the ground that it may, in certain contingencies which may not arise, be advantageous to the minor.

29. While, however, we are unable to enforce the sale in its entirety, we consider that, to the extent of the father's interests, the respondent is entitled to insist on it, if he thinks fit to do so, and we, therefore, modify the decree of the Court of First Instance, and, in supersession of it, decree that, on payment into Court by the plaintiff, within six weeks of the receipt of this decree in the Court of First Instance, of the sum of Rs. 2,750, being the residue of one moiety of the purchase-money, the first defendant do execute to the plaintiff a sale-deed for his interest, being one moiety of the land in suit, and we declare that thereupon the sale-deed, executed and registered in favour of the other defendants, shall become ineffectual against the plaintiff, and that the plaintiff shall, on such payment, be placed in possession of the said moiety, and we decree that, in lieu of mesne profits claimed, the plaintiff do recover interest at the rate of 12 per cent. on Rs. 1,000, part of the purchase-money paid by him, from the date of payment up to the date of this decree, and we order each party to bear his own costs of this appeal.


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