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Gade Rosi Reddi and anr. Vs. Gade Kristna Reddi and ors. - Court Judgment

LegalCrystal Citation
Subject contract; civil
CourtChennai
Decided On
Reported inAIR1944Mad540
AppellantGade Rosi Reddi and anr.
RespondentGade Kristna Reddi and ors.
Cases ReferredK. Ramiah. v. S. Subbiah
Excerpt:
- - it is thus clear perfectly that the debt due by defendants 2 and 3 was kept alive and was intended to be enforced as such if for any reason the contract was not duly performed. a clearly shows that defendants 2 and 4 were selling two distinct items of property of an equal extent viz. is this exception or limitation to the doctrine of mutuality applicable in a case like the present?patanjali sastri, j.1. these two second appeals arise out of a suit for specific performance. one venkata reddi and his sons, defendants 2 and 3, executed a promissory note on 9th october 1933 in favour of the plaintiff and his paternal uncle, defendant 1, in renewal of an earlier note of 1930 executed by venkata reddi and defendant 2. the plaintiff and defendant 1 brought a suit on the note in 1936 for recovery of the amount due, but pending the suit the parties entered into a compromise as a result of which the suit was allowed to be dismissed. the terms of the compromise were embodied in three documents, exs. a, b and g all executed on the same day, namely, 15th october 1936. exhibit g is a promissory note executed by defendants 2 and 3 (their father having died by that time) in favour.....
Judgment:

Patanjali Sastri, J.

1. These two second appeals arise out of a suit for specific performance. One Venkata Reddi and his sons, defendants 2 and 3, executed a promissory note on 9th October 1933 in favour of the plaintiff and his paternal uncle, defendant 1, in renewal of an earlier note of 1930 executed by Venkata Reddi and defendant 2. The plaintiff and defendant 1 brought a suit on the note in 1936 for recovery of the amount due, but pending the suit the parties entered into a compromise as a result of which the suit was allowed to be dismissed. The terms of the compromise were embodied in three documents, Exs. A, B and G all executed on the same day, namely, 15th October 1936. Exhibit G is a promissory note executed by defendants 2 and 3 (their father having died by that time) in favour of the plaintiff and defendant 1 for Rs. 2004 being the amount of principal and interest settled as payable under the promissory note dated 9th October 1933. The said sum was to carry interest at the rate of one rupee per cent. per mensem till the date of payment. Exhibit A is a contract of sale whereby defendant 2 and defendant 3 as the guardian of his minor wife defendant 4 agreed to sell two acres and 50 cents of land to the plaintiff and defendant 1 for the sum of Rs. 2004 due to them under Ex. G. The document recites that possession of the properties was delivered forthwith and provides that a sale deed should be executed and registered within a month from that date, and that, in case of default, the promisees should be at liberty to recover the amount due to them under Ex. G. It may be mentioned here that after defendants 2 and 3 became divided, defendant 3 had conveyed, in 1935, five acres 20 cents of land to defendant 4, a portion of which was included in Ex. A. Exhibit B, the other document, was an indemnity letter given by defendant 3 to the plaintiff and defendant 1, undertaking to indemnify them in case his wife should raise disputes regarding the sale of her land after attaining majority, and to execute a security bond charging the indemnity on certain immovable properties belonging to him. In all these transactions, the plaintiff who was a minor was represented by his mother as his guardian. As defendants 2 and 3 did not execute a sale deed as provided in the contract of sale this suit for specific performance has been brought by the plaintiff after attaining majority.

2. Two other suits were tried with this suit and, though they are not before this Court now, it is necessary to make a brief reference to them. One of them was brought by defendant 4 after attaining majority against the proposed vendees, the plaintiff and defendant 1 herein, for a declaration that the contract to sell evidenced by Ex. A was not binding on her and for recovery of possession of her properties included in the contract from the vendees to whom they had been delivered in pursuance of the contract. This suit was decreed by the Courts below and a second appeal to this Court was dismissed. The other suit was filed by defendant l for specific performance of this very contract but only in so far as it related to his half share of the properties agreed to be sold which the plaintiff and defendant 1 had divided between themselves. The suit thus framed was held not maintainable, and defendant l in consequence joined the plaintiff in preferring the appeal to the lower appellate Court, although he was not willing to join in the first instance as a co-plaintiff and hence was impleaded as a defendant.

3. The trial Court held that the contract was indivisible and as no specific performance could be granted in respect of defendant 4's properties included in the contract no decree could be passed even in respect of defendant 2's properties. It accordingly dismissed the suit. On appeal by the plaintiff and defendant 1 the lower appellate Court took the view that the contract, so far as it related to defendant 2's properties, was severable and valid, and passed a decree for specific performance against defendant 2 alone confirming the dismissal of the suit against defendant 4. From this decision the plaintiff and defendant 1 have brought S. A. No. 60 of 1943 claiming relief against defendant 4 also, and defendant 2 has preferred S. A. No. 212 of 1943 challenging the correctness of the decree in so far as it granted specific performance in respect of his properties included in the contract.

4. In the appeal preferred by the plaintiff and defendant l their Learned Counsel Mr. Rameswara Rao rightly conceded that in view of the decision in defendant 4's suit already referred to which has become final, he could no longer claim specific performance in respect of her properties included in the contract of sale. He urged, however, that his clients were entitled to a decree for half the sum of Rs. 2004 either as 'prepaid purchase money' or as balance due under Ex. G, after adjusting the value of the properties of defendant 2 (in respect of which specific performance has been decreed) towards his share of the liability. In the plaint, the alternative claim for money in ease specific performance was refused was made on the footing that by the contract of sale the debt due by defendants 2 and 3 to the plaintiff and defendant 1 became discharged, and that, therefore the amount of that liability should be regarded as purchase money paid in advance for the properties agreed to be sold. It is obviously impossible to sustain the claim on this basis which was evidently put forward with a view to avoid scaling down under the Madras Agriculturists Belief Act. The debt due by defendants 2 and 3 far from being discharged by the mere executory contract, Ex. A, was actually renewed under Ex. G on that very day and it was also expressly provided in the contract that the plaintiff and defendant 1 should be entitled to recover the amount due to them in default of due execution of. the sale deed. It is thus clear perfectly that the debt due by defendants 2 and 3 was kept alive and was intended to be enforced as such if for any reason the contract was not duly performed. No question therefore of refund of 'prepaid purchase money' arises. We are, however, inclined to allow the claim on the basis of the promissory note Ex. G. All the facts including the execution of this promissory note were stated in the plaint and there is no dispute as to these facts. The fact that the plaintiff attempted to circumvent the provisions of the Agriculturists Relief Act by a misstatement of the legal effect of the contract in his plaint is no ground for refusing such relief as he may be found entitled to on a correct view of the facts. As we are holding, in the connected appeal, that the contract Ex. A is severable in respect of defendants 2 and 4's properties and is specifically enforceable against defendant 2, we are of opinion that the plaintiff and defendant 1 are entitled to a decree against defendant 3 for his share of the debt due under the promissory note, Ex. G. As defendant 3 was not a party to the earliest promissory note of 1930, but joined in the execution of the note of 1933, the amount payable by him as sealed down under Section 9, Agriculturists Relief Act will be Rs. 1002 with interest at 5 per cent. per annum till 22nd March 1938 and thereafter at 61/4 per cent. per annum simple interest till date of payment. The appeal (S. A. No. 60 of 1943) is accordingly allowed and there will be a decree against defendant 3 for the sum aforementioned. As the plaint did not disclose the true basis of the claim against defendant 3 as now put for-ward there will be no order as to costs against him in any of the Courts. As against defendant 4 the appeal is dismissed.

5. Turning to the other appeal preferred by defendant 2 his Learned Counsel Mr. Rangachari contended that the contract in question was not severable and having been held to be unenforceable as against defendant 4 could not be specifically enforced even in respect of defendant 2's properties included therein. He submitted that there was no indication in Ex. A that defendants 2 and 4 were selling the properties respectively belonging to them each for half the purchase money specified as suggested for the plaintiff and that, on the contrary, the default clause relegating the parties to their rights and liabilities under the promissory note Ex. G which made defendants 2 and 3 jointly and severally liable for the whole amount of Rs. 2004, showed that the contract was regarded as an indivisible transaction. This argument might have some force, if the question had to be decided on Esx. A and g alone. But, as we have already observed, these documents must be read with the indemnity letter Ex. B, all the three forming part of the same transaction, and that document which was executed by defendant 3 to the plaintiff and defendant l recites:

towards my share of the debt relating to the promissory note caused to be executed and delivered this day for a sum of Rs. 2004 in your favour by myself and my brother, I have sold to you the wet seri land of the extent of one acre 25 cents as guardian on behalf of my wife and have caused a sale contract to be executed and delivered this day itself.

This read with Ex. A clearly shows that defendants 2 and 4 were selling two distinct items of property of an equal extent viz., one acre 25 cents severally belonging to them, each for half the amount specified in the contract. No doubt in case of default defendants 2 and 3 were to be jointly and severally liable for the whole amount of Rs. 2004 under Ex. G, but, as between them each was admittedly liable for half the debt. The position, therefore, was that the plaintiff through his guardian and defendant 1 jointly agreed to buy one acre 25 cents of land for Rs. 1002 and from each of defendants 2 and 4, in satisfaction of a debt of Rs. 2004 due to them from defendants 2 and 3, defendant 3 who was selling his wife's property as her guardian undertaking to indemnify the buyers against any loss from a repudiation of the sale by her after attaining majority. In this view, the fact that defendant 4 has successfully impugned the contract is no reason for not allowing specific performance in respect of defendant 2's property.

6. Mr. Rangachari's next contention was that inasmuch as the plaintiff was a minor at the time of the contract which was therefore not specifically enforceable against him, he could not claim specific performance against defendant 2 for want of mutuality. The leading Indian case on the point is Mir Sarwarjan v. Fakruddin Mohamed (1912) 39 Cal. 232. There a minor on whose behalf the manager of his estate entered into a contract to purchase immovable property sued, while still a minor, to enforce specific performance. The contract was found beneficial to him. When the case was pending in appeal in the High Court, he attained majority and accepted and ratified the contract. The High Court decreed the suit: see Mir Sarwarjan v. Fakruddin Mohamed (1907) 34 Cal. 163. But their Lordships reversing the decision refused specific performance for want of mutuality in the contract, that is to say, as it could not have been specifically enforced against the plaintiff. Under the English law, while generally the test of mutuality is applied with reference to the time of the execution of the contract, it has been recognised that the persons against whom no specific performance could originally have been enforced may waive want of mutuality and enforce specific performance : see Fry on Specific Performance, Edn. 6, pages 224, 225 where he cites a number of decisions illustrating waiver of mutuality. Is this exception or limitation to the doctrine of mutuality applicable in a case like the present? According to the decisions of this Court based on the ruling of the Privy Council above referred to, 'it would seem not. In the latter case their Lordships expressly refer to the finding of the High Court that the minor 'accepted and ratified' the contract entered into by his manager for his benefit, but nevertheless held that,

as the minor in the present ease was not bound by the contract there was no mutuality and that the minor who has now reached his majority cannot obtain specific performance of the contract.

7. This has been understood to imply that the plaintiffs' waiver of mutuality could not affect the applicability of the doctrine. This is the view taken in Narayanrao v. Venkatasubbarao A.I.R. 1920 Mad. 423 and Venkatachalarn Pillai v. Sethuramrao A.I.R. 1933 Mad. 322 where applying their Lordships' decision this Court refused specific performance of a contract entered into by a guardian on behalf of a minor although the latter claimed such relief after attaining majority and affirming the contract. It appears, however, that in both these eases, the learned Judges wrongly supposed that the plaintiff in Mir Sarwarjan v. Fakruddin Mohamed (1912) 39 Cal. 232 brought the suit after attaining majority, overlooking the fact that the suit was actually brought while he was yet a minor. This fact indeed suggests another possible view of the decision in Mir Sarwarjan v. Fakruddin Mohamed (1912) 39 Cal. 232, that is to say, that their Lordships refused specific performance because there was no affirmation of the contract 6n or before the institution of the suit so as to make the remedy mutual. (See Flight v. Bolland (1828) 4 Russ. 298 where Clayton v. Ashdown (1714) 9 Vin. Abr, 393 was apparently regarded as distinguishable on the ground that the plaintiff in the latter case affirmed the contract by filing the bill after attaining majority, a distinction approved by Pry at p. 219.) A recent decision of this Court in Adinarayana v. Venkatasubbayya A.I.R. 1940 Mad. 625 on which Mr. Rameswara Rao relied would also seem to proceed on the view that want of mutuality can be waived. The facts were, however, dissimilar and no reference is made in the judgment to Mir Sarwarjan v. Fakruddin Mohamed (1912) 39 Cal. 232 or to the decisions of this Court based thereon. Be that as it may, we are of opinion that the defence of want of mutuality cannot avail defendant 2 for other reasons.

8. The contract sought to be enforced, although severable as regards the vendors and the properties agreed to be sold, is joint and indivisible so far as the vendees are concerned. Defendant l who was one of the persons to whom the property was to be conveyed was an adult at the time of the contract, and the consideration for the sale was to be the discharge of the debt due by defendant 2 to the plaintiff and defendant l. It has been held by a Pull Bench of this Court in Annapurnamma v. Akkayya 36 Mad. 544 that one of several payees under a promissory note can give a valid discharge of the entire debt without the concurrence of the other payees. If, therefore, defendant 2 had offered payment of the debt in money, defendant 1 would have been bound to accept it and such payment would be a complete discharge. Can it make any difference if defendant 2 offered immovable property in pursuance of a valid1 contract to accept such property in satisfaction of the debt? We think not. If defendant 2 was thus in a position to compel the acceptance of the property by defendant 1 alone in complete) discharge of the debt, there would be no lack of mutuality of remedy and there is no reason why defendant 1 should not be entitled to claim specific performance of the contract by the vendor, offering to give him a complete discharge of the debt. That the plaintiff might also have to be joined in the suit cannot as it seems to us affect the position, as he need do nothing in pursuance of the contract, his concurrence not being necessary for a valid discharge of the debtor. That, in substance, is the position before us. It was said that defendant 1 was not willing to take a conveyance of the properties, and that was why he did not join with the plaintiff in instituting the suit and was impleaded as a defendant. As already observed, possession having been delivered in pursuance of the contract the plaintiff and defendant 1 had divided the properties between them, and defendant 1 desired to have a separate sale deed executed in his favour in respect only of the localised share which he had taken at the division. This is what he asks for in his written statement in this suit, and this was also the relief which he claimed in the separate suit brought against the vendors which was dismissed as misconceived. Thereafter as already observed, he joined the plaintiff in preferring the appeal to the lower appellate Court from the decision of the trial Court in the present suit. It is therefore not correct to say that he was not willing to have specific performance of the contract, and Mr. Kameswara Rao who appeared both for him and the plaintiff has strongly pressed the claim for specific performance against defendant 2. In such circumstances the decision in K. Ramiah. v. S. Subbiah 1912 M.W.N. 415 holding that it is not open to some only of the joint contractees under a contract to sell immovable property to enforce specific performance if the others do not want the property, has no application here. The appeal (S.A. No. 212 of 1943) therefore fails and is dismissed with costs.


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