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V.K. Kandasami Chettiar (Since Deceased) and ors. Vs. Shanmugha thevar and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported in(1948)2MLJ356
AppellantV.K. Kandasami Chettiar (Since Deceased) and ors.
RespondentShanmugha thevar and anr.
Cases ReferredNewzealand Shipping Co. v. Society Des Ateliers Et Chantiers De France
Excerpt:
- .....the property with notice of the prior contract. the courts below upheld the plaintiff's right to specific performance and decreed the suit in his favour. hence this second appeal by the subsequent purchasers.2. the short point that arises for consideration in this second appeal is whether in view of the terms of ex. p-2, the agreement of sale, the plaintiff is precluded from claiming specific performance. under the contract the price fixed was rs. 2,100. an advance of rs. 500 was paid on that date, and the balance was agreed to be paid within one month from the date of the contract. it was also agreed that if the amount was paid, the first defendant, the vendor, should execute the sale deed and get it registered. then follows the clause on the construction pf which the decision of this.....
Judgment:

Satyanarayana Rao, J.

1. Defendants 2 and 3 are the appellants, and this second appeal arises out of a suit for specific performance of a contract of sale relating to immovable property entered into on the nth October, 1943, between the plaintiff and the first defendant. Defendants 2 and 3 are the subsequent purchasers of the property with notice of the prior contract. The Courts below upheld the plaintiff's right to specific performance and decreed the suit in his favour. Hence this second appeal by the subsequent purchasers.

2. The short point that arises for consideration in this second appeal is whether in view of the terms of Ex. P-2, the agreement of sale, the plaintiff is precluded from claiming specific performance. Under the contract the price fixed was Rs. 2,100. An advance of Rs. 500 was paid on that date, and the balance was agreed to be paid within one month from the date of the contract. It was also agreed that if the amount was paid, the first defendant, the vendor, should execute the sale deed and get it registered. Then follows the clause on the construction pf which the decision of this case rests. It is in the following words:

In case there is default in completing the sale deed within the aforesaid due date, as aforesaid, the individual who commits the default shall pay the other individual Rs. 100 as damages, and in addition this contract shall become void.

The contention urged on behalf of the appellants is that by this clause the parties agreed to treat the contract as void if there was any default of any one of the parties in carrying out the terms of the contract. It is contended that according to the language of the clause the unenforceability of the contract by reason of the default of one of the parties is not confined merely to the defaulting party but applies to both the parties. On the other hand, it was contended on behalf of the plaintiff that the clause merely states the disability of the defaulting party who claims specific performance of the contract as laid down in Section 24(b) of the Specific Relief Act, and does not extend the disability to enforce the contract to the other party. It is also further urged that even assuming that the construction contended for on behalf of the appellant is correct, and the parties contemplated the contract to become void on a contingency under law, the party who brought about the default cannot take advantage of his own wrong and prevent the other party from claiming specific performance of it. In any opinion the contentions urged on behalf of the plaintiff-respondent ought to prevail. It is established law that notwithstanding that a sum if named in the contract as the amount to be paid in case of its breach, and even though the party in default is willing to pay the same, the other party is entitled to enforce specific performance of the contract. This rule was laid down in England very early by Lord Chancellor Hardwicke in Howard v. Hopkyns (1742) 2 Atk. 371 : 26 E.R. 624 In that case the articles of the agreement between the plaintiff and the defendant contained a proviso that if either side should break the agreement he would pay 100 to the other. The defendant committed the breach, and the plaintiff sued for specific performance. The Lord Chancellor held that the insertion of penalties in an agreement was not to release the parties to the agreement from their duty to perform the obligation under the contract. This rule is enacted in the Specific Relief Act (Section 20). It may therefore be taken that under the suit contract the mere existence of a clause to pay Rs. 100 as damages would not prevent the plaintiff from claiming specific performance.

3. The clause in the suit contract making the contract unenforceable is in addition to the payment of damages by the defaulting party. According to the clause, therefore, the defaulting party is not only to pay to the other party the sum of Rs. 100 as damages but also should be under the disability to enforce the contract. According to my view, on a plain reading of the clause, this is the natural and reasonable interpretation of it. This, as contended on behalf of the respondents, merely lays down the law as enacted in Section 24(b) of the Specific Relief Act. It is unreasonable to hold that the parties intended that by reason of the default of one party the other party also should be under a disability or disadvantage and become incapable of enforcing the rights under the contract. I do not for a moment suggest that it is not possible for the parties by appropriate words to enter into such contract; but in this case the parties had not entered into such contract.

4. Even assuming for a moment that the clause means that it is void and unenforceable at the instance of either of the parties, even then, in my opinion, the plaintiff is not precluded from enforcing this contract. As pointed out by Lord Atkinson in his speech in the decision in Newzealand Shipping Co. v. Societe Des Ateliers Et Chantiers De France (1919) A.C. 1 :

It is undoubtedly competent for the two parties to a contract to stipulate by a clause in it that the contract shall be void upon the happening of an event over which neither of the parties shall have any control, cannot bring about, prevent or retard. For instance, they may stipulate that if rain should fall on the 30th day after the date of the contract, the contract should be void. Then if rain did fall on that day the contract would be put an end to by this event, whether the parties so desire or not. Of course, they might during the currency of the contract rescind it and enter into a new one, or on its avoidance immediately enter into a new contract. But if the stipulation be that the contract shall be void on the happening of an event which one or either of them can by his own act or omission bring about, then the party, who by his own act or omission brings that event about, cannot be permitted either to insist upon the stipulation himself or to compel the other party, who is blameless, to insist upon it, because to permit the blamable party to do either would be to permit him to take advantage of his own wrong, in the one case directly, and in the other case indirectly in a roundabout way, but in either way putting an end to the contract.

This is exactly the situation here. The party in default wants to take advantage of her own wrong and prevent the plaintiff from enforcing the specific performance of the contract. On the principle of that decision I think the first defendant should not be permitted to take advantage of her own wrong and prevent the plaintiff from exercising his undoubted right under law.

5. My attention has been drawn to two decisions, one in Radhakissen v. Sohanlal 47 C.W.N. 86 and the other in Chunnilal Dayabhai and Co. v. Ahmedabad Fine Spinning and Weaving Co., Ltd. I.L.R.(1921) 46 Bom. 806. It is unnecessary to consider these decisions as the language of the contracts which were considered in those cases are different from the language of the contract in this case. The decision in Chunnilal Dayabhai and Co. v. The Ahmedabad Fine Spinning and Weaving Co., Ltd. I.L.R.(1921) 46 Bom. 806, follows the principle laid down in Newzealand Shipping Co. v. Society Des Ateliers Et Chantiers De France (1919) A.C. 1.

6. For these reasons I am of opinion that the construction placed by the Courts below on the suit contract is correct. The second appeal fails and is dismissed with costs.

7. No leave.


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