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Rajammal Vs. R. Gopalaswami Naidu - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 634 of 1947 and C.R.P. No. 1338 of 1948
Judge
Reported inAIR1951Mad767
ActsContract Act, 1872 - Sections 29 and 46; Specific Relief Act, 1877 - Sections 12; Transfer of Property Act, 1882 - Sections 14 and 54
AppellantRajammal
RespondentR. Gopalaswami Naidu
Appellant AdvocateC.R. Krishnarao, Adv. for ;K. Narasimha Iyer, Adv.
Respondent AdvocateK. Krishnasami Iyengar and ;N.C. Raghavachari, Advs.
Cases ReferredAli Hussein v. Rajkumar Haldar
Excerpt:
contract - specific performance - sections 29 and 46 of contract act, 1872, section 12 of specific relief act, 1877 and sections 14 and 54 of transfer of property act, 1882 - suit for specific performance of agreement executed by defendant in favour of plaintiff - suit resisted by defendant on ground that contract vague as regards amount of consideration and time of performance - trial court negatived all contentions and decreed suit for specific performance - district court reversed said order in favour of defendant - contract itself contained indication that certain sum was in consideration as contemplated to be paid by defendant to plaintiff - as per contract if by resale property to fetch anything more then excess should go as profit to plaintiff - view taken by trial court that..........to this effect is the counterpart letter executed by me wholeheartedly & with consent.' the pltf. distinctly alleged in para. 4 of the plaint that the agreement between the parties was to resell the properties to the pltf. whenever called by her for a sum of rs. 1800. this averment was never seriously denied by the deft. in the written statement. the agreement, therefore, must have been that rs. 1800 should be consideration for the retransfer of the property by the deft. in favour of the pltf. apart from that, in my opinion, the contract itself contains clear indication that the sum of rs. 1800 was consideration which bhe parties contemplated should be paid to the deft. by the pltf. according to the contract if by resale the property was to fetch anything more than rs. 1800 the.....
Judgment:

Satyanarayana Rao, J.

1. The pltf. is the applt. in the second appeal. She instituted the suit out of which this second appeal arises for specific performance of an agreement to reconvey executed by the deft. in favour of the pltf. on 27-9-1943, Ex. P. 1. The deft. obtained conveyance of property under Ex. D. 1 dated 24-9-1943 for a stated consideration of Rs. 1500. The suit was resisted by the deft. on various grounds the chief of which & which survive in this second appeal are, that the contract is vague as regards the amount of consideration & also the time of performance & that it ia unenforceable as it offends the rule against perpetuity. It was also contended that, in any event, the pltf. should not have been granted a decree for specific performance in the exercise of the discretionary power vested in the Ct. to decree specific performance of contracts, recognised under Section 22, Specific Relief Act. The trial Ct. negatived all the contentions urged by the deft. & decreed the suit for specific performance. The deft. appealed against the decree to the Dist. J. The Dist. J. agreed with the Dist. Munsif in holding that the agreement to reconvey was not uncertain & vague & that it was capable of specific performance, but in view of certain circumstances which the learned Judge had adverted in para. 11 of his judgment he was of opinion that it was a fit case in which the discretion of the Ct. should not be exercised in favour of the pltf. by granting a decree for specific performance. He, however, opined that it was a fit case in which compensation should be awarded under Section 19, Specific Relief Act, granted leave to amend the plaint & remitted the case to the trial Ct. fordisposal on the amended plaint after framing the necessary issues.

2. This second appeal is by the pltf. against the decree of the learned Dist. J. To complete the narrative regarding the coarse of this litigation it may be mentioned that after remand the suit seems to have been dismissed for default of the pltf. & an appln. for restoration of the suit made by the pltf. was also dismissed, by the Dist Mansif, & the order of the Dist. Munsif was confirmed on appeal by the Dist. J. The pltf. preferred civil revn. petn. No. 1338 of 1948 against the orderwf the Dist. J. confirming the order of dismissal for default. That civil revn. petn. also is postedfor disposal along with this second appeal.

3. For the applt. the argument was confined to the question whether the learned Dist. J. was right in interfering with the discretion of the Dist. Munsif in granting a decree for specific performance & whether there were really any grounds for holding that that discretion was not judicially exercised by the Dist. Munsif. The resp., however, attacked the finding of the Dist. J. that the contract was not vague & uncertain & argued also that in any event, thecontract was bad as it offends the rule against the perpetuities. At the close of the arguments on behalf of the resp. a further point was alsosought to be raised, namely, that the pltf. didnot aver her readiness & willingness to perform the contract & that, in any event, there was considerable lapse of time between the date of the agreement to reconvey & the institution of the suit &, by reason of the long lapse of time, a decree for specific performance should not have been granted in favour of the pltf. This last contention, however, need not take any time for disposal as the pltf. did aver in the plaint of her readiness & willingness to perform her part of the contract & the suit itself was instituted by her espeditiously within sis mouths after the date of the execution of the agreement. The learned advocate for the resp. frankly conceded that the point was not taken by his client in the Cts. below. However, it is unnecessary to consider that question as there is a clear allegation in the plaint of the pltf.'s preparedness & her willingness to carry out the terms of the contract.

4. It would be convenient now to consider whether there is any substance in the contention of the respondent that the contract was void for uncertainty, uncertainty as regards the time & uncertainty as regards the consideration. The contract is in the following terms as evidenced by Ex. P. 1. the counterpart bythe deft. in favour of the pltf.

'As I have executed a promissory note in favour of B. Sreeramulu Naidu, your brother for Rs. 300 in the matter of your having executed a sale deed in my favour for Rs. 1500 & registered the same, settling to sell for Rs. 1800 in my favour, the punja land situate in Vettuvanam Village, Pallikonda sub district, Vellore taluk, aforesaid, I am bound to pay you that profit (realised) by selling the aforesaid land for Rs. 2000 or for whatever (amount) that same is sold more than Rs. 1800. In case you yourself make a request to me that the aforesaid land should be sold (to you) at any time whatever, I am bound to do the same, without raising any objection whatever. To this effect is the counterpart letter executed by me wholeheartedly & with consent.'

The pltf. distinctly alleged in para. 4 of the plaint that the agreement between the parties was to resell the properties to the pltf. whenever called by her for a sum of Rs. 1800. This averment was never seriously denied by the deft. in the written statement. The agreement, therefore, must have been that Rs. 1800 should be consideration for the retransfer of the property by the deft. in favour of the pltf. Apart from that, in my opinion, the contract itself contains clear indication that the sum of Rs. 1800 was consideration which bhe parties contemplated should be paid to the deft. by the pltf. According to the contract if by resale the property was to fetch anything more than Rs. 1800 the excess over & above Rs. 1800 should go as profit to the pltf., that is, if the property was sold for Rs. 2000 the deft. would be entitled to receive for himself a sum of RS. 1800 & the difference of Rs. 200 should be paid to the pltf. as profits. In any contingency, therefore, it was assumed by the parties that the value of the property which the deft. would be entitled to was only Rs. 1800 & this, in my opinion, was the consideration, as held by both the Cts. that was contemplated by the parties as payable by the pltf. to the deft. at the time of resale. I do not think, therefore, there is any uncertainty or vagueness about the consideration for the resale. Nor is there any vagueness about the time. The parties naturally must have contemplated that the performance should be within reasonable time & this the law implies where no time is fixed under a contract. In my judgment, the view| taken by the Cts. below that the parties contemplated the performance of the contract within a reasonable time from the date thereof is a conclusion which was warranted by the law.

5. The last ground urged on this part of the case by the reap, is that the contract offends the rule against perpetuities. In my opinion, it is too late in the day to contend that an agreement to sell or an agreement to resell is within the mischief of the rule against perpetuities notwithstanding the clear languageof Section 54, Transfer of Property Act. It enacts that a contract to sell by itself does not create any interest in immoveable property. Section 14, Transfer of Property Act, has no application to mere personal contracts which do not at all affect the immoveable property. This position was clearly & definitely established in Avula Charamudi v. Raghavalu, 39 Mad. 462 : A.I.R. 1916 Mai. 298 & was followed in later decisions. The same view has also been taken recently by an F. B. of the Calcutta High Court in Ali Hussein v. Rajkumar Haldar, I. L. R. 1943 2 Cal. 605 : A. I. R. 1948 Cal. 417 The essential difference between the law in England where the rule of perpetuities applies even to a contract of sale & the Transfer of Property Act is that under the English law a contract of sale creates an equitable interest in the property while under the Transfer of Property Act the, contract by itself creates no interest in the immoveable property. The situation, therefore, under the two systems of law is entirely different & the principles applied in England have no bearing in considering the provisions of the Transfer of Property Act, nor do the decisions which have considered the question before the Transfer of Property Act have any rtlevancy in considering the question under the Transfer of Property Act. The contention, therefore, must be overruled.

6. Lastly, was the learned Dist. J. justified in reversing the decree for specific performance granted by the Dist. Munsif, & are there any valid reasons for interfering with the discretion exercised by the Dist. Munaif? The learned Dist. Munsif considered the question in para. 14 of his judgment & found no reasons to refuse a decree for specific performance in favour of the pltf. He referred to the provisions concained in Sections 21 & 22, Specific Relief Act. The learned Dist. J. deals with this question in para 11 of his judgment wherein he gives his reasons for coming to the conclusion that it was a proper case for refusing specific performance. In the first place, he assumes that the existence of the clause providing for payment of the profit in case the property were to be sold by the deft. over & above Ea. 1800 as an indication that the parties intended merely to get compensation in case of breach & did not contemplate an enforcement of the contract by way of specific performance. The same argument has also been repeated now on behalf of the resp. by his learned advocate. On a careful reading of the contract, I am unable to agree with this view of the contract. The two clauses are, in my opinion, clearly disjunctive. Under the first clause, if the deft. were to sell the property for a sum exceeding Rs. 1800 the pltf. is to get the profit over & above the price of Rs. 1800 but if the propertyremains unsold in the hands of the deft. under the second clause it was open to the pltf. to exercise the option of calling upon the deft. to execute a reconveyance in her favour for the price of Rs. 1800. The two clauses, far from indicating that the parties intended compensation as a good substitute for the breach of contract, contain clear indications that the pltf. was entitled to claim specific performance. The presumption under the proviso to Section 12, Specific Relief Act, is that a breach of contract to transfer immoveable property cannot be adequately relieved by compensation in money. In my opinion, the contract does not contain any indication to the contrary to rebut the presumption under the proviso.

7. The next ground which has been emphasised is that the pltf. put forward a false case that both the documents, EXS. p. 1 & D. 1, came into existence on the day & therefore by reason of her conduct in putting forward the false case, she was disentitled to specific performance. I think both the learned Dist. J. & the learned counsel who argued for the respondent have really misunderstood, if I may say so with respect, what the pltf. in substance conveyed by her evidence. What she must have meant was that they were parts of the same transaction & not that they were distinct, separate & independent transactions. She was certainly aware that the two documents bear different dates & would never have meant to emphasise the fact that the two documents were executed on the same day. By the evidence which she gave in the box she must have meant that the two documents were parts of the same transaction. This in fact was the finding of the Ct. which rejected the case to the contrary of the deft.

8. In my opinion, the remaining grounds which have found favour with the learned Dist. J. have really nothing to do with the agreement to reconvey. The purchase of the stamp paper for Ex. D. 1 & the loss of interest between April to December 1944 by reason of the deposit made under Section 3, T. P. Act, by the deft. to discharge an earlier mtge. on the property have really nothing to do with the contract, nor are they grounds which fall within Section 22, Specific Relief Act. The deft. so long as he is the owner of the property & by reason of his undertaking in the sale deed was bound to discharge the mtge. of the property but if the due date had not arrived & the petn., O. p. no. 24 of 1944 was not successful, as a consequence of which he lost interest for a short period, he must thank his stars for the same & the pltf. cannot be made responsible for it. I do not think that the conduct contemplated under the law to disentitle the pltf, to specific performance is not a conduct of this nature for when she was not responsible. I am,therefore, satisfied that the case does not fall under any of the classes in Section 22, Specific Relief Act, & the learned Dist. J. in my opinion interfered without any justification with the discretion exercised by the Dist. Munsif, in granting a decree for specific performance.

9. The result is that this appeal is allowed & the judgment & decree of the learned Dist. J. set aside & those of the Dist. Munsif restored with costs throughout including the court-fee of Rs. 172-7-0 paid as additional court-fee in the lower appellate Ct.

10. It has been brought to my notice that the decree of the Dist. Munsif is defective in that there was no direction in it that the pltf. should deposit the amount within a fixed time. I think that this defect must now be rectified by substituting the following for the decree of the learned Dist. Munsif :

'It the pltf. deposits into Ct. within a period of three months from this date a sum of Rs. 1800, & the deft. shall execute the sale deed in respect of the proparties described in Ex. D. 1, the coats of conveyance including registration must be provided by the pltf. It on such deposit the deft. defaults to execute the document, the pltf. would be at liberty to apply to the Ct. to have the same executed by the Ct. in respect of the properties described hereunder on behalf of the deft; the deft. do put the pltf. ia peaceful possession of the properties described hereunder; the deft. do pay the pltf. a sum of Rs. 1295-2-6 for her costs in this suit.'

As the decree of the Dist. Munsif ia now restored it is not necessary to consider the civil revn. petn. & the order of the Dist. Munsif dismissing the suit automatically stands vacated. No costs in the civil revn. petn. (No leave in the second appeal.)


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