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Rajendrakumar Bhandari Vs. Poosammal and ors. - Court Judgment

LegalCrystal Citation
SubjectContract;Tenancy
CourtChennai High Court
Decided On
Case NumberAppeal No. 124 of 1969
Judge
Reported inAIR1975Mad379; (1975)2MLJ59
ActsSpecific Relief Act, 1963 - Sections 13, 17 and 20; Transfer of Property Act, 1882 - Sections 55(27); Madras City Tenants Protection Act, 1922 - Sections 9
AppellantRajendrakumar Bhandari
RespondentPoosammal and ors.
DispositionAppeal dismissed
Cases ReferredNatesa Mudaliar v. S.B.K.P. K. Bhajan Matam
Excerpt:
.....madras city tenants protection act, 1922 - appeal against order passed by court below dismissing suit for specific performance - defendant agreed to sell piece of land to plaintiff - defendant had no marketable title - it follows that plaintiff not entitled to specific performance as matter of right - discretion under section 20 (1) ought not to be arbitrarily or unreasonably exercised - plaintiff not entitled to equitable relief - appeal liable to be dismissed. - - 1. the unsuccessful plaintiff in o. we have already seen that the first defendant defaulted and no one knew whether she would have committed a second default thereafter as well. inter alia one such right is that, if the vendor has subsequent to the contract acquired any interest in the property, the purchaser may..........application under section 9 thereof and obtained the necessary order entitling her to purchase suit land from defendants 2 to 5. this appears from ex. a.1 and under the said judgment of the court and the ancillary orders under section 9 she was enabled to purchase the land for a sum of rs. 1950 and she was also given the concession of paying the same in instalments. it appears that the first- defendant defaulted at one time in the payment of instalments, but such a delay in the payment of instalments towards the purchase price was condoned by an order of the court of small causes under ex. a.2 dated 21-9-1964. 2. whilst things remained so nebulous and uncertain, in so far as the title of the first defendant to the land in question wasconcerned, she appears to have entered into an.....
Judgment:

Ramaprasada Rao, J.

1. The unsuccessful plaintiff in O. S. No. 4305 of 1964 on the file of the City Civil Court, Madras, is the appellant. The first defendant is a lessee of a piece and parcel of land measuring 780 sq. ft. in R. S. No. 35/1 and 32 in Nungambakkam, Machay's gardens. Thousand Lights, Madras, Admittedly defendants 2 to 5 are the owners of this property. Exs. A.3 to A.5 evidence such a lease of the land in favour of the first defendant. It appears that the first defendant put up a structure on the land so leased out to her by defendants 2 to 5 and gained an entitlement under the provisions of the Cily Tenants Protection Act to purchase the land over which the superstructure was put up by her as and when she was sought to be evicted by the owners. It is common ground that defendants 2 to 5 filed an ejectment suit No. 35 of 1960 on the file of the Court of Small Causes, Madras, for eviction of the first defendant. The first defendant thereafter, pursuant to her statutory rights under the City Tenants Protection Act, filed the usual application under Section 9 thereof and obtained the necessary order entitling her to purchase suit land from defendants 2 to 5. This appears from Ex. A.1 and under the said judgment of the court and the ancillary orders under Section 9 she was enabled to purchase the land for a sum of Rs. 1950 and she was also given the concession of paying the same in instalments. It appears that the first- defendant defaulted at one time in the payment of instalments, but such a delay in the payment of instalments towards the purchase price was condoned by an order of the court of Small Causes under Ex. A.2 dated 21-9-1964.

2. Whilst things remained so nebulous and uncertain, in so far as the title of the first defendant to the land in question wasconcerned, she appears to have entered into an agreement under Ex. A.9 dated 7-11-1962, in and by which she agreed to sell the above piece of land to the plaintiff for a consideration of Rs. 6000. The usual terms were incorporated in the said agreement. It is also equally common ground that, pursuant to the said agreement of sale, the plaintiff paid a sum of Rs. 100 to the first defendant on the date of the agreement, a sum of Rupees 1301-2-0 to the credit of the ejectment Suit No. 35 of 1960 on the file of the court of Small Clauses, and a further sum of Rs. 161-25 towards the decree debt of the first defendant. The plaintiff claims that he paid, in addition, a sum of Rs. 1070-30 towards the sale price. In all, the plaintiff claims that he paid a sum of Rs. 2632-75 and was awaiting the completion of the sale. He further alleges that on 21-12-1964 the first defendant entered into a compromise with the owners, defendants 2 to 5 pursuant to which the first defendant delivered vacant possession of the land to the owners and got sufficient compensation therefor. It is further alleged by the plaintiff that the said compromise was a collusive one, that defendants 2 to 5 knew the rights which the plaintiff had under Ex. A.9 and that defendants 2 to 5 are equally bound by the agreement of sale entered into by the first defendant with him. Lastly he claims that he was ever ready and willing to perform his part of the contract to obtain the land by paying the balance of the purchase prcie. Hence he prayed for a decree for specific performance of the agreement covered by Ex. A.9.

3. The first defendant's case, inter alia, was that the structure erected on the land did not belong to her, but was construct-ed by one Appu Nair, who was maintaining her for the past 25 years. She denied having received the sum of Rs. 1070-30, though she admitted the other amounts referred to by the plaintiff. She would also allege that she was not aware of the contents of Ex. A.9, that she only signed a blank paper and that the plaintiff was making use of it, and, in that context, she would plead that there was no agreement of sale at all. She would further allege that there were negotiations between Appu Nair and defendants 2 to 5 and that finally in the ejectment suit already referred to there was a compromise effected between the owners and herself resulting in her surrendering vacant possession of the land on receipt of the requisite and agreed compensation. She would say that she was ready and willing to pay the plaintiff the sum of Rs. 1562-12 which, according to her, was the admitted amount received by Appu Nair on her behalf. She would legally contend that, even if the agreement were true, it was not capable of specific performance, since she had no saleable interest in the property, at the time when the agreement was entered into, and, as there was no decree passed in the ejectment suit, and as the plaintiff had not obtained title to or right of assignment over the property in her favour in a manner known to law, the plaintiff was not entitled legally to enforce the so called contract or agreement of sale.

4. Defendants 2 to 5 referred to the compromise entered into on 21-12-64, which date was prior to the present action for specific performance and claimed that the plaintiff was not entitled to the relief asked for, as, on the date of the suit, they were in possession of the property as owners.

5. On the above pleadings, the following issues were framed:--

1. What are the amounts advanced by the plaintiff to the first defendant?

2. Is this suit for specific performance not maintainable?

3. Is this suit barred by res judicata?

4. Had the defendants 2 to 5 no knowledge of the suit agreement between the plaintiff and the first defendant?

5. Is the suit agreement incapable of being specifically performed?

6. To what reliefs is the plaintiff entitled?

The learned City Civil judge found that the agreement was true and binding on the first-defendant and defendants 2 to 5 had no knowledge of Ex. A.9. On the crucial question of law arising in this case, he held that the plaintiff had no assignable or transferable right in the suit property and that under the provisions of the City Tenants Protection Act, the first defendant as tenant had only a personal right to obtain a sale of the property from the landlord who professed to evict her from the premises and an that ground, and relying upon certain decisions of the Supreme Court and this Court, the learned Judge found that the privilege which the first defendant could at all secure tinder the Act was not a transferable one. If therefore the right bartered for personally under Ex. A.9 is not one which is assignable or transferable in the eye of law, no decree for specific performance could be granted. In that light and in his discretion the learned Judge dismissed the suit. On issue No. 3 he stated that it was not argued before him and so he did not render any finding. On issue No. 1. there is no finding of the learned Judge as to what exactly was the amount advanced by the plaintiff to the first defendant. We, however, consider it unnecessary in the instant case, in the light of the opinion which we propose to render, to find out what exactly was the amount due and payable by the first defendant to the plaintiff. It is equally unnecessary for us to touch upon issue No. 3 relating to res judicata as if was not even argued before us. The crucial question for consideration, in this appeal by the plaintiff in the suit, therefore, is whether the plaintiff is entitled to a decree for specific performance of the agreement of sale dated 7-11-1962. (Ex. A. 9).

6. Learned counsel for the appellant urges that the plaintiff is entitled to a decreefor specific performance, since a concluded contract of sale was entered into and that, though in point of time on the dale when the agreement was entered into, the first defendant did not have a transferable right, she could obtain the same by diligently paying off all the instalments of purchase prior and by keeping the contract alive. On the other hand, learned counsel for defendants 2 to 5, who are the real contestants in this appeal, would say that, on the date when the suit was filed, the first defendant had no right at all in the property and that, therefore, in equity the plaintiff was not entitled to a decree for specific performance as against the first defendant which would result in hardship to the other defendants. In addition, it is contended that what was sought to be sold tinder Ex. A.9 was an imperfect or inchoate right which had not perfected itself into an assignable or transferable right in a manner known to law and that in those circumstances the plaintiff is not entitled to the relief asked for. It is further contended that at or about the time when the agreement was entered into, the first defendant did not have a marketable title or title free from doubt or even any title to the property and that in that sense the plaintiff ought to be non-suited,

7. The subject-matter of the suit is obviously a bare expectancy of the first defendant to get a complete interest in the land in question. It is no doubt true that she obtained the usual order from the Court of Small Causes, when she was confronted with the suit in ejectment, whereunder her right and title to obtain a sale of the land were declared. That declaration was in the presence of defendants 2 to 5. But such a right was still in the stream of justiciability which was likely to ripen itself into a full fledged proprietary right in the first defendant and which is capable of being assigned or transferred or otherwise dealt with only by her diligent conformance to the obligations to which the first defendant was wedded in law. We have already seen that the first defendant defaulted and no one knew whether she would have committed a second default thereafter as well. On the date of the suit, it is not pretended that the first defendant had no right known to law in the land. When Ex. A.9 was drawn up, the subject matter therein was an inchoate right which was still in the arena of judicial process and had not reached the ultimate destination for its being recognised by courts of law as an interest in land which was transferable and assignable. We would refer to Sections 13 and 17 of the Specific Relief Act, (47 of 1963) and Section 55(2) of the Transfer of Property Act, Section 13 speaks of the rights of a purchaser against a person without any title or a person with imperfect title. Section 13(1) says that where a person contracts to sell having no title or only an imperfect title the purchaser has the rights enumerated in the sub-section. Inter alia one such right is that, if the vendor has subsequent to the contract acquired any interest in the property, the purchaser may compel him to make good the contract out of such interest. Secondly, where the concurrence of other persons is necessary for validating the title and such other persons are bound to concur at the request of the vendor, the purchaser may compel him to procure such concurrence and when a conveyance by other persons is necessary to validate the title and they are bound to convey at the request of the vendor the purchaser may compel them to procure such conveyance. The other rights referred to in the sub-section are not necessary for the purpose of this case.

8. It is thus seen that in the case of persons who contract to sell the property, but with no title, the purchaser can take advantage of the subsequent acquisition of such title by the vendor, and the law compels the vendor to convey the property, if by a supervening act or otherwise his imperfect title or no title is perfected. This is on the well-known principle of feeding the grant by estoppel, Again, if third persons are interested in the bargain and if the vendor can compel such persons to join in the transfer of such property over which he had no title or had only an imperfect title, then the purchaser can compel the vendor to procure such concurrence or compel such third parties to procure such a conveyance. In the instant case it is not stated that the vendor, who had no title or at any rate had only an imperfect title in the nature of the statutory right to purchase the property, subsequently acquired any better right over the property so as to convey the totality of the rights in the land to the plaintiff as purchaser. Nor is it urged before us that defendants 2 to 5 are obliged to the first defendant to join with her in validating her title for the purpose of conveyance of the property to the purchaser or join in the conveyance which the first defendant is bound to execute at a future date in favour of the purchaser pursuant to the agreement of sale. The two conditions therefore which are necessary before the purchaser can secure the equitable remedy of specific performance against the vendor and/or third persons are conspicuously absent in the instant case. As already stated, the first defendant did not subsequently acquire any further interest in the property. Defendants 2 to 5 are not persons who are obliged to concur with the vendor in validating her title or join in the execution of the sale deed in favour of the plaintiff.

9. We shall now refer incidentally to Section 17 which, of course, refers to contracts of sale by one who has no title to the property, but which cannot be specifically enforced in favour of the vendor, Section 17 says-

'A contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor-

(a) who, knowing himself not to have any title to the property, has contracted to sell or let the property,

(b) who, though, he entered into the contract believing that he had a good title to the property, cannot at the time fixed by the parties or by the court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt'.

The expression 'title free from reasonable doubt' is a provision which is very much analogous to the expression 'marketable title' adopted by courts of law while interpreting Section 55(2) of the Transfer of Property Act.

10. The immediate question which we are bound to consider is what is the marketable title or title free from reasonable doubt. Title cannot be understood as some-thing equivalent to a process involving making of title. In order to convey property the vendor should have a present right or interest in immovable property which he contracts to convey. A bare expectancy of getting such a right in course of time which has not reached its end is not the same thing as to assert that he is a person having an interest in immovable properly. A title which has not been perfected and which cannot rationally be said to be free frorn doubt is no title at all. It is established that the question of title, if raised in a suit for specific performance, has to be decided between the parties so that they may not be exposed to the danger and extent of a legal contest at a future date. In such circumstances, courts in equity are bound to pronounce upon the efficacy or otherwise of the title in question except perhaps in rare and exceptional cases.

The case in question does not present such rare or exceptional circumstances. The first defendant failed once in her endeavour to perfect her right to purchase the properly, as she defaulted in the payment of the instalments which she had been directed to pay by the court to obtain an indefeasible title to the property under the provisions of the City Tenants Protection Act. It is not clear from the record whether after 21-9-1964, when the delay in the payment of the earlier instalments was condoned, the first defendant kept up her obligation to pay the instalments and kept alive her statutory right to obtain possession. The first defendant did not have a marketable title or a title free from doubt over the land. On the other hand, it is not disputed before us that on 21-12-1964 the first defendant surrendered possession of the land to the owners. That would mean that there was a definite snapping in the chain of causation which thwarted the incomplete statutory right possessed by the first defendant to obtain the property under the provisions of the City Tenants Protection Act and resulted in a complete giving up of that right by an overt act on the part of the first defendant when she compromised with the owners and surrendered possession. The finding of the court below, with which we agree, is that defendants 2 to 5 cannot at all be imputed with knowledge of Ex. A.9. There is no convincing reason for us to hold that they had anything to do with Ex. A.9 or its contents. There could therefore have been no collusion between the first defendant and defendants 2 to 5 as alleged by the plaintiff. The plaintiff himself does not dispute that there has been a surrender of the land by the first defendant in favour of defendants 2 to 5. That was done prior to the suit, but after the agreement. As we said, the agreement to convey was only in respect of a right which had not fruitioned into a transferable or assignable right. Before the plaintiff came to court, the first defendant did not have any interest in the land, as she had surrendered vacant possession of it to the defendants 2 to 5. The vendee in his turn lost his right to ask for specific performance of the contract It is in these circumstances that we should consider whether the plaintiff, though formally ready and willing to perform his part of the bargain under Ex. A.9, is entitled to specific performance.

11. We have already referred to Sections 13 and 17 of the Specific Relief Act. Under no circumstances the plaintiff has or had on the date of the suit any equitable right to claim the equitable relief of specific performance. Therefore, the question whether the first defendant's title to the land in question was free from reasonable doubt or whether the first defendant had a marketable title sinks into insignificance so far as this case is concerned. But, in order to make it complete, we may express the view that at no point of time did the first defendant have any marketable title or any title which was free from doubt. As the records disclose that the first defendant herself committed default we have already observed that the possibility of a second default could not be ignored. If the first defendant committed a second default, she would lose her statutory right to purchase the property. It is in this sense that the first defendant's right, which is the subject-matter of this action, cannot be characterised as an interest in immoveable property over which she could be said to have a marketable title or title free from reasonable doubt. Marketable title is one which both in the strict and reasonable sense means that the vendor would be in a position to force the property concerned on an unwilling purchaser under all circumstances. It should be shown to be free from and not afflicted by doubts. Such doubts, no doubt, ought not to be capricious or frivolous doubts, but which a court of law would be disposed to accept as serious or sufficient. If, therefore, the first defendant had no title or, in any event, had no marketable title or a title free from reasonable doubt, it follows that the plaintiff is not entitled to specific performance, as a matter of right.

12. The subject can also be viewed from a different perspective. Under Section 2 (4) of the City Tenants Protection Act, a 'tenant' in relation to any land includes, under Sub-clause (c) of Clause (ii) the heirs of such a person. Considering the quantity and quality of this statutory right the Supreme Court and this Court have taken the view that such a right is not a right over property. In fact, the Supreme Court has strongly expressed that the fact that such a right stems from a statute cannot expand its contents or make it anytheless a non-proprietary right. Again in Natesa Mudaliar v. S.B.K.P. K. Bhajan Matam (1966) 1 MLJ 130 this court has held that what is acquired by the tenant under the provisions of the City Tenants Protection Act is not any vested interest in the land, but only an option to purchase the land by reason of the beneficial provisions thereof, and characterised it as a privilege conferred on the tenant by the Act. The learned Judges further held that, being such a right to purchase the property, it did not create any interest in immovable property. What is, however, necessary is to find out, whether such a right, which does not create any interest in immoveable property, is assignable or can be made the subject-matter of a bargain under an agreement of sale. We think that it cannot be done. As no interest in land is to be gained by the tenant entitled to the protection of the City Tenants Protection Act, and as it is merely a privilege or personal right which is only heritable, but not transferable, we are of the view that there cannot be a right to sell that right or privilege, and a fortiori it follows that no suit for specific performance of such an agreement of sale of a privilege which is personal can be envisaged by a court of law.

13. Lastly, we are also of the view that we are not inclined to exercise our discretion under Section 20 of the Specific Relief Act, as, in our view, the plaintiff is not entitled to the equitable relief asked for. The exercise of discretion either in the matter of grant or refusal of decrees for specific performance ought to be made judiciously and judicially, and, as Section 20(1) Says it ought not to be arbitrarily or unreasonably exercised. In the instant case, we have already referred to the most important fact that on the date when the suit was filed for the grant of a decree for specific performance, the first defendant had already surrendered possession of the land and she had no interest, either ersonal or otherwise, in the land. Again, it as to be borne in mind that the first defendant, who is only a lessee, has an inherent right to surrender the leasehold right, or interest, and even the plaintiff cannot prevent or in any way obstruct her from doing so. If, therefore, on the date of the suit the first defendant, by an acceptable act, surrendered her rights, whatever they were, in the land, then it would be most harsh to grant a decree for specific performance of an agreement of sale of a property which had become the property of third parties. By such a grant defendants 2 to 5 would be seriously prejudiced. We would be granting a decree for specific performance of an agreement of sale against a party or person who had neither knowledge nor was a party to the contract of sale. That would be most inequitous, besides being unjust. We are therefore of the view that under Section 20 of the Specific Relief Act, we are not inclined to exercise our discretion to grant the equitable relief of specific performance to which, for all the reasons stated above, the plaintiff is not entitled.

14. The appeal therefore fails and it is accordingly dismissed with costs.


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