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A.L. Parthasarathi Mudaliar Vs. Venkata Kondiah Chettiar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberLetter Patent Appeal No. 19 of 1963
Judge
Reported inAIR1965Mad188
ActsSpecific Relief Act - Sections 14 to 17
AppellantA.L. Parthasarathi Mudaliar
RespondentVenkata Kondiah Chettiar
Cases ReferredNarayanamurthy v. Madhavayya
Excerpt:
.....for sale of certain properties - part consideration also paid to defendant - defendant denied performance of contract on ground of ownership of certain properties - certain properties were not owned by defendant - plaintiff relinquished claim against disputed properties and ready to pay amount for rest properties - plaintiff entitled to relief under section 15. - - he stated that the written agreement was not read over to him and he was not aware of the contents of the document, as he was not well acquainted with or aware of the language in which the document was written. in such a case there are only three possible alternatives for a court of equity to pursue, either to refuse this remedy entirely or to enforce the contract without any regard to that partial failure,..........take a conveyance of item 1. the plaintiff also prayed that in the event of the court holding that specific performance of the contract cannot be ordered, the defendants may be directed to pay the plaintiff rs. 5000 as liquidated damages. the plaintiffs prayed in the alternative that the defendants may be directed to receive a sum of rs. 3000 and effect a conveyance of item 1 of the plaint schedule property and pay such compensation for then on-conveyance of item 2 as the court may fix.(2) the first defendant filed a written statement denying the oral agreement. he stated that the written agreement was not read over to him and he was not aware of the contents of the document, as he was not well acquainted with or aware of the language in which the document was written. according to him,.....
Judgment:

Venkatadri, J.

(1) This Letters Patent Appeal is preferred by the first defendant against the judgment of Ramakrishnan J. modifying the decree of the trial judge and directing the first defendant to execute a sale deed in favour of the plaintiff in respect of item 1 of the plaint schedule properties on receipt of Rs. 4750 in pursuance of the agreement to sell items 1 and 2 of the plaint schedule to the plaintiff. One Loganatha Mudaliar was the original owner of these two items of properties. He purchased item 1 in his name and item 2 in the name of his wife Rathnammal. He had two sons, the first defendant and the husband of the second defendant. His wife died in the year 1947 and he died in the year 1955. It was alleged in the plaint that the defendants in the suit entered into an oral agreement on 7-2-1957 to convey the two suit items for Rs.5750 and subsequently an agreement of sale was executed by both the defendants and a sum of Rs.1000/- was paid as advance. According to the terms of the agreement the sale had to be completed within three months failing which the defendants had to pay to the plaintiff a sum of Rs. 5000 as and for damages to the plaintiff. Before the plaintiff entered into the agreement to purchase these two items of properties he made and enquiry in respect of the second item as it was purchased in the name of the first defendant's mother and the first defendant assured the plaintiff that his sisters would not claim these properties as they had already declared that they had no interest or title in the properties.

The plaintiff was ready and willing to purchase these properties. The defendants subsequently evaded and neglected to execute a sale deed. The first defendant began to give out an excuse that his sisters were not willing to join with him in executing the sale deed, especially in respect of item 2, as they claimed title to the same on the ground that it belonged to their mother. It was also stated in the plaint that in case there was any difficulty for the defendants to execute a sale deed in respect of item 2 also. The plaintiff was willing to take a conveyance of item 1. The plaintiff also prayed that in the event of the court holding that specific performance of the contract cannot be ordered, the defendants may be directed to pay the plaintiff Rs. 5000 as liquidated damages. The plaintiffs prayed in the alternative that the defendants may be directed to receive a sum of Rs. 3000 and effect a conveyance of item 1 of the plaint schedule property and pay such compensation for then on-conveyance of item 2 as the court may fix.

(2) The first defendant filed a written statement denying the oral agreement. He stated that the written agreement was not read over to him and he was not aware of the contents of the document, as he was not well acquainted with or aware of the language in which the document was written. According to him, under the will of his father he got only Item 1 and Item 2 of the plaint schedule was bequeathed to his sisters and one Panchalamma and he had neither title nor interest in respect of Item 2 and therefore he could not convey Item 2 to the plaintiff. He also denied having received an advance of Rs. 1000 through Jagadisa Mudaliar. He contended that in any event the plaintiff cannot ask for specific performance as the contract could not be performed in entirety. The second defendant filed a separate written statement supporting the case of the first defendant. She stated that she was not in Madras at the time the alleged agreement was executed. She further stated that neither she nor the first defendant had any interest in the second item of property.

(3) It is on these pleadings the parties went to trial and the important questions for consideration were, whether the plaintiff is entitled to specific performance of the agreement when the first defendant had no title to the second item of property and whether the agreement executed by the defendants is true and binding and enforceable against them. The trial Judge after considering the oral and documentary evidence in the case came to the conclusion that the agreement relied on by the plaintiff is true, valid and binding on the defendants. He however held applying S. 14 of the Specific Relief Act that the plaintiff is entitled to specific performance of the contract only in respect of Item 1 of the property. Accordingly he directed the first defendant to execute a conveyance of Item 1 of the plaint schedule property on receiving a sum of Rs. 3000 from the plaintiff. the suit against the second defendant was dismissed without costs.

(4) The first defendant preferred an appeal in this court. Ramakrishnan J. who heard the appeal, agreed with the finding of the trial Judge, that the agreement is valid and binding on the defendants. But he is of the opinion that S. 15 of the Specific Relief Act would apply to the facts of this case and applying that section he directed the first defendant to execute a conveyance in respect of item 1 of the plaint schedule on receipt of a sum of Rs. 4750 (i.e., RS. 5750 less advance of Rupees 1000) from the plaintiff. The learned Judge dismissed the appeal subject to the above modification. It is against this judgment and decree of the learned Judge that the present appeal is preferred by the first defendant.

(5) The only question we have to consider in this appeal is whether the defendant is entitled to avoid specific performance of the contract as he could not perform the contract in entirety as item 2 of the plaint schedule property did not belong to him. It is contended by the first defendant-appellant that since the defendants are not entitled to the second item, the contract is not enforceable against them, and the plaintiff cannot claim specific performance at variance of the agreement under Ex. A. I. The extent of the two items is given in the agreement of sale. the first item comprises an extent of 2 acres 85 cents and the second item and extent of one acre and 41 cents. It has been found that neither the first defendant nor the second defendant has any title to the second item of the plaint schedule. Fry in his Treatise on Specific Performance of Contracts, 6th Edn. stays at page 383 para 821:

'The court will not, as a general rule, compel specific performance of a contract, unless it can execute the whole contract; or, as Lord Romilly M. R. expressed it, 'this court cannot specifically perform the contract piecemeal, but it must be performed in its entirety if performed at all' '.

The following passage at page 408 in Pomercy on Specific Performance, may also be referred to:

'When the vendor's title proves to be defective in some particulars, or his estate is different from that which he agreed to convey, or is subject to encumbrances or outstanding rights to third persons, or the subject-matter generally the land is deficient in quantity, quality or value, it is plain that the contract cannot be specifically performed, according to its exact terms, at the suit of either party. in such a case there are only three possible alternatives for a court of equity to pursue, either to refuse this remedy entirely or to enforce the contract without any regard to that partial failure, compelling the purchaser to take what there is to give and to pay the full price as agreed; or to decree the conveyance of the vendor's actual interest and allow to the vend pecuniary compensation or abatement from the price, proportional to the amount and value of the defect in title or deficiency in the subject matter' the principles applicable to different kinds of circumstances in English law have been summed up by the Privy Council thus in Rutherford v. Acton Adams, 1915 AC 866: 'If a vendor sues and is in a position to convey substantially what the purchaser has contracted to get, the court will decree specific performance with compensation for any small and immaterial deficiency, provided that the vendor has not, by misrepresentation or otherwise, disentitled himself to his remedy. Another possible case arises where a vendor claims specific performance and where the court refuses it unless the purchaser is willing to consent to a decree on terms that the vendor will make compensation to the purchaser, who agrees to such a decree on condition that he is compensated. If it is the purchaser who agrees to such a decree on condition that he is compensated. If it is the purchaser who is suing the court holds him to have and even larger right. Subject to considerations of hardship he may elect to take all he can get, and to have a proportionate abatement from the purchase money. But this right applies only to a deficiency in the subject matter described in the contradict'.

The above said principles are embodied in Ss. 14 to 17 of the Specific Relief Act with a view to provide remedies for partial specific performance of the contract with compensation. Section 14 is applied to a case where a party to a contract is unable to perform the whole or part of it. On account of some incurable defect in title or deficiency in quantity of the subject matter or of some legal impediment, when the court may at the suit of either party direct the performance of so much of the contract as can be performed and award compensation in money for the deficiency by proportionate abatement of the purchase money. But two conditions are necessary before S. 14 can be applied, namely, the part which must be left unperformed bears only a small proportion to the whole in value, that is, so small that it is inconsiderable, such as small mistake or inaccuracy, and it may be compensated in money by allowing an abatement of the purchase money by calculating the difference between what was contracted to be done and what can actually be done or sold. In other words, where a substantial part of the contract is capable of performance, them equity will enforce specific performance of that part. But in the instant case, the section cannot be applied as the extent of item 2 is one acre 41 cents out of the total extent of 4 acres 26 cents. Item 2 cannot be considered to be a small or immaterial portion in relation to the whole property agreed to be conveyed, which would enable the plaintiff to get a decree for specific performance subject to the payment of compensation to the plaintiff by equating the amount of compensation to the price of item 2. Section 14 con not therefore apply to the present case.

(6) Before considering whether S. 15 would be applicable to the facts of this case, we may deal with the question whether the plaintiff can obtain relief under S. 16 of the Specific Relief Act. Section 16 applies where a contract consists of several parts which are separate and independent of one another and some of which can and ought to be performed, such part or parts as can and ought to be performed may alone be specifically enforced. Such a contract though nominally one is actually divisible and when the court enforces what is apparently a part, it really enforces an entire and complete contract. In the instant case there are two separate items of properties mentioned in the agreement and the question for considerations even though the defendants have no title in respect of the second item, can they not be directed to execute a conveyance in respect of the first item, thereby decreeing in favour of the plaintiff specific performance of the entire contract the question whether the contract is divisible or indivisible, is one depending upon the nature and terms of each individual contract.

To make S. 16 applicable, it has to be shown (1) that the contract can be split up into parts, (2) that there is a part of the contract which taken by itself can and ought to be specifically performed and (3) that the said part stands on a separate and independent footing from the other part of the same contract. Before a court can exercise the power given in the section, it must have before it some material tending to establish these propositions. This section cannot be applied on a mere surmise that if opportunity were given for further enquiry, such material might be forthcoming and possibly might be found to be sufficient. In the instant case, the defendants entered into an agreement to sell both the items of property for a consolidated sum of Rs. 5750. This is a contract for sale of property in one lot which will generally be considered as indivisible, as the conveyance of item 2 does not stand on a separate and independent footing from the conveyance of item 1. We agree with Ramakrishnan J., that s 16 of the Specific Relief Act cannot be applied to the present case.

(7) The only question that now remains is whether S. 15 can be applied to the facts of this case. Ramakrishnan J. held that the provisions of S. 15 will apply to this case and allowed specific performance of the contract in respect of item 1 of the plaint schedule property. Under S. 15, if the part which must be left unperformed forms a considerable portion of the whole or does not admit of compensation in money, the purchaser is not entitled to a decree for specific performance. but if the purchaser relinquishes all claim to further performance and all rights to compensation either for the deficiency or for the loss or damage sustained by him, he can sue for specific performance. In the plaint the plaintiff prayed that the defendants may be directed to receive Rs. 4750 being the balance of the sale price and effect a conveyance of both the items of properties mentioned in the schedule, or in the alternative the defendants may be directed to receive Rs. 3000 and effect a conveyance of item 1 only and pay such compensation for the non-conveyance of item 2 as the court may fix, or in the alternative the defendants may be directed to pay Rs. 5000 to the plaintiff as compensation.

During the trial of the suit, the plaintiff did not make any representation to the court that he would relinquish all his claim in respect of item 2, when it was found that neither of the defendants has any title to that item. But during the heading of the appeal before Ramakrishnan J. the plaintiff filed a petition saying that he was willing to purchase item 1 of the suit property for the entire contract price of Rs.5750/- and give up the claim for compensation so as to obtain relief under s. 15 of the Specific Relief Act. This application was opposed by the first defendant. Ramakrishnan J. disallowed the objection and permitted the plaintiff to relinquish his relief in regard to item 2, holding that the equitable relief of specific performance within the terms of S. 15 of the Specific Relief Act can be granted to the plaintiff.

(8) In support of his contention that relinquishment of the claim can be made at any stage in the action, learned counsel for the respondent relied on the following observations in Waryam Singh v. Gopichand, ILR 11 Lah 69: AIR 1930 Lah 34:

'I cannot find anything in S. 15 of the Specific Relief Act, or any other provision of the law limiting action under S. 15 to any particular stage of the proceedings. It seems to me that it is open to the plaintiff to relinquish his claim to any part of the property in suit on the condition specified in S. 15, at any time before the suit is finally decided by the court of appeal.'

The principle laid down in the above decision was approved by the Supreme Court in the Kalyanpur Lime Works Ltd. v. State of Bihar, : [1954]1SCR958 where the Supreme Court observed that relinquishment of the claim to further performance can be made at any stage of the litigation. this principle has been followed by the Calcutta High Court in Dwijendra Kumar v. Manmohan, : AIR1957Cal209 where in second appeal the court gave permission to the purchaser to relinquish a part of the contract. It will be useful to refer to the following observation of Venkatasubba Rao J. made in Sultan Kani Rowther v. Md. Meera Rowther, AIR 1929 Mad 189 :

'Section 15 of the specific Relief Act is enacted for the benefit of the purchaser and cannot operate to his detriment. That section gives him an option and if he declines to accept an offer which brings him loss, he cannot be regarded as acting improperly. If his conduct is not improper he cannot be deprived of the statutory charges.'

To a similar effect is the decision in Narayanamurthy v. Madhavayya : (1947)2MLJ366 . In that case in a contract to convey 16 acres 80 cents of land the vendor was not able to convey the entire extent but only half of that area and when a suit was filed, the plaintiff did not relinquish all claim to further performance of the contract and to all rights to compensation either for the deficiency or for the loss or damages sustained by him through the default of the first defendant. But in appeal when it was complained to the learned Judges that the learned Subordinate Judge refused to exercise the provisions of S. 15, the learned Judge rejected this contention and agreed with the reasoning given by the trial Judge that it should be an unconditional request by the plaintiff without claiming any damages or compensation or any other relief. But on the other hand, the plaintiff represented to the trial Judge that he would file an appeal against the suit.

(9) In view of the principles laid down in the above decisions, the plaintiff is certainly entitled to relinquish his claim to compensation at the stage of first appeal. We agree with Ramakrishnan J. that only S. 15 of the Specific Relief Act would apply to the facts of this case. The learned Judge was therefore right in modifying the decree in the terms he did.

(10) The appeal is accordingly dismissed, but in the circumstances, without costs.

Appeal dismissed.


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