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Rangasami Gounder Vs. Periamuthu Gounder and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1977)1MLJ231
AppellantRangasami Gounder
RespondentPeriamuthu Gounder and ors.
Cases ReferredLakshminarayana Reddiar v. Singaravela Naicker
Excerpt:
.....consideration stipulated is inadequate. for reasons better known and during the pendency of the suit for specific performance already set out, the second son, who is the plaintiff in the partition, suit, whom we shall describe as the second son, instituted a suit in forma pauper is seeking for a declaration that the partition which took place on 17th april, 1962 and as exhibited under exhibit a-1, is s void instrument and would not bind him on the sole ground that he was a minor on the date when he signed the same and participated in it. ramachandran, appearing for the plaintiff in that suit and the appellant before us in the second appeal is that the learned district judge was wrong in having set aside the well considered judgment of the trial court. his main argument however, is..........court were set aside. one rangaswamy gounder whom we shall characterise as the plaintiff in the specific performance suit, filed the same for specific performance of an agreement of sale marked as exhibit a-4 in that suit the main allegations of the plaintiff in this suit were that on 29th june, 1967 defendants 1 and 2, who are the father and the eldest son, contracted to sell certain properties described in the agreement itself for a sum and consideration of rs. 10,000. an advance of rs. 2,250 was agreed to be paid by the plaintiff as the prospective purchaser and which was to be paid over by the plaintiff to the elavamalai co-operative land mortgage bank in discharge of a mortgage debt by then due over the properties agreed to be sold. the further case of the plaintiff is that a sum.....
Judgment:

Ramaprasada Rao, J.

1. The primary suits, which were tried in the Court of the Subordinate Judge of East Coimbatore, are connected, in the sense that an adjudication in one will have an impact on the other. We shall now succinctly state the facts in the second appeal. The second appeal arises Out of Original Suit No. 77 of 1968 on the file of the Court of the Subordinate Judge of Erode, which was decreed in the first instance by the trial Court. On appeal to the learned District Judge of Coimbatore-East, the judgment and decree of the trial Court were set aside. One Rangaswamy Gounder whom we shall characterise as the plaintiff in the specific performance suit, filed the same for specific performance of an agreement of sale marked as Exhibit A-4 in that suit The main allegations of the plaintiff in this suit were that on 29th June, 1967 defendants 1 and 2, who are the father and the eldest son, contracted to sell certain properties described in the agreement itself for a sum and consideration of Rs. 10,000. An advance of Rs. 2,250 was agreed to be paid by the plaintiff as the prospective purchaser and which was to be paid over by the plaintiff to the Elavamalai Co-operative Land Mortgage Bank in discharge of a mortgage debt by then due over the properties agreed to be sold. The further case of the plaintiff is that a sum of Rs. 750 was paid on that date to the defendants in cash for cultivation expenses. The balance of Rs. 7,000 was to be paid on or before 13th July, 1968 and on such payment, the defendants were to execute the deed of conveyance at their cost and put the plaintiff in possession of the properties. The usual default clauses were also provided for. The plaintiff has paid the sum of Rs. 2,250 to the Bank as agreed to and having parted with the sum of Rs. 750 alleges that though he was always ready and willing to perform his part of the obligation, the defendants were evading the same and he had to, therefore, Institute the present action on 9th March, 1968, which obviously is a date much in advance of the date fixed for performance of the contract. The defendants in their common written statement alleged that they never agreed to sell the properties. According to them, there was a possibility of the Bank taking coercive steps for recovery of the amount due to it and in order to discharge the mortgage debt they approached the plaintiff and wanted him to take the suit properties on lease for a period of three years at the rate of Rs. 2,250 per year and that the plaintiff was to pay a year's rent in advance and discharge the debt due to the Bank. On this basis and understanding, it is said that Exhibit A-4 was drawn up and in that sense it was never an agreement for conveyance of immoveable property, but only a transaction of lease. As the defendants were illiterates, they signed the document without reading the same and the plaintiff did not pay the balance of the amount payable under the lease deed and they denied that they received a sum of Rs. 750 as alleged. Their case is that the property was worth about Rs. 30,000 they that they were entitled to a part of the Suit properties only and that would be worth Rs. 20,000. They would therefore, claim that even if the agreement is to be interpreted as an agreement of sale, it is bad for the reason that the consideration stipulated is inadequate. In these circumstances, they resisted the suit for specific performance. The trial Court went into the question and found that the agreement was an agreement of sale and not an agreement of lease end that on the date of execution of Exhibit A-4, the plaintiff paid a sum of Rs. 3,000 and that the defendants did not prove that the consideration was inadequate nor were they compelled, due to their illiteracy and unknowingness to be a party to that agreement. In those circumstances and after noting that the plaintiff did not even obtain possession of the land from the defendants and after observing that Exhibit A-4 was a registered agreement, which was attested by the kith and kin of the defendants, (SIC)ord trial Court decreed the suit. On appeal, the learned District Judge concentrated on one aspect, namely, whether the price was adequate and mainly on the ground of inadequacy of consideration, he reversed the judgment of the trial Court. The learned Judge also, if we may say so, indulged in an irrelevant discussion as to whether another third party to the suit was a necessary party thereto. He also found incidentally that the suit was premature and that there was no real agreement for sale and even if there was one, the plaintiff, took advantage of the great pressures under which the defendants were at that time for securing funds and in that sense he reversed the judgment of the trial Court. Hence, the second appeal by the plaintiff.

2. At this stage, it would be convenient to degrees and state the relevant facts in the other suit which has given rise to A.S. No. 163 of 1972, As already stated by us, defendants 1 and 2 in O.S. No. 77 of 1968 were the father and the eldest son. The second son was one Periamuthu Gounder. For reasons better known and during the pendency of the suit for specific performance already set out, the second son, who is the plaintiff in the partition, suit, whom We shall describe as the second son, instituted a suit in forma pauper is seeking for a declaration that the partition which took place on 17th April, 1962 and as exhibited under Exhibit A-1, is s void instrument and would not bind him on the sole ground that he was a minor on the date when he signed the same and participated in it. It is also pertinent to note that this suit was filed after the suit for specific performance was filed to wit on 21st June, 1968. That was at the time when the specific performance suit was about to be decreed ex parte. The second son has come to Court to set aside the partition deed on the only ground that he was a minor and also pleaded that his signature was obtained by fraud and coercion and the partition as a whole effected under Exhibit A-1 was art unequal one. To this suit his father Mariappa Gounder, who was the first defendant in the specific performance suit and Pattappan, who was the second defendant in that suit as also the plaintiff in specific performance suit and others, were impleaded as defendants 1, 2, 3 etc. Defendants 1, 2 and 4 to 14 remained ex parte. The third defendant in the suit, who is the plaintiff in the suit for specific performance, contested it and alleged that on the basis of the said partition, the father and the eldest son entered into an agreement to sell the shares which they obtained under the said partition and that having had knowledge of such a suit, the second son has come upto this Court seeking to set aside the deed of partition itself on some untenable grounds and he would also allege that the suit itself has been instigated by the father and the eldest son. On these necessary pleadings between the contesting parties in the suit filed by the second son, the following issues were framed:

(1) Whether the plaintiff was a minor on the date of the execution of the partition deed, dated 17th April, 1962 and therefore, it is not binding on him?

(2) Whether in any event, the partition deed is vitiated by fraud and unequal distribution.

(3) Whether the plaintiff has got any title to the properties covered under the agreement, dated 29th June, 1967 and in any event whether the agreement is not binding on the plaintiff.

(4) Whether the plaintiff is entitled to declaration and partition is prayed for.

(5) To what reliefs are the parties entitled?

3. The learned trial Judge held that though the plaintiff lost his remedy to set aside the deed of partition under the normal law of limitation, since he did not agitate against it within three years from the date when he became a major, yet he was of the view that as the plaintiff has been proved to be a minor on the date of execution of the partition deed Exhibit A-1, the instrument is void and ineffective in so far as the second son is concerned and, therefore, he accepted the plaintiff's case, decreed the same, and held that the second son was not bound by the deed of partition Exhibit A-1. As against this, the third defendant has filed A.S. No. 163 of 1972.

4. In so far as the suit for specific performance is concerned, which is an earlier one, the contention of Mr. T.R. Ramachandran, appearing for the plaintiff in that suit and the appellant before us in the second appeal is that the learned District Judge was wrong in having set aside the well considered judgment of the trial Court. He would point out that in the cursory treatment of the subject, the learned Judge did not go into the material incidents and facts which throw abundant light upon the subject-matter but concerned himself with the fact whether the father and the first son who were the defendants in that suit, really agreed to sell the property for such grossly inadequate and insufficient consideration. He would also attack the finding of the learned Judge that the agreement of sale was thought of by the father and the first son only to avert a coercive process and there was a great pressure at or about the time when the contract of sale was entered into. His last contention is that the father and the first son, who executed the agreement of sale cannot, in the circumstances of the case, be described as persons, who did not obtain assistance or who were helpless, but on the other hand they were assisted by their kith and kin such as the mother and other near relations. He would also refer us to the fact that the agreement of sale was a registered one and was written by P.W.1 who was examined in the case. P.W.1 will speak to the fact that the sum of Rs. 750 was paid by the plaintiff on the date of execution and in all a sum of Rs. 3,000 was agreed to be paid by the plaintiff which consisted of a cash payment of Rs. 750 as already stated and a sum of Rs. 2,250. to be paid over to the Co-operative Bank in discharge of a subsisting debt. Exhibits A-1 and A-3 are the receipts to show that the plaintiff did pay on behalf of the defendants a sum of Rs. 2,250 to the Co-operative Bank. The learned Counsel for the respondent however would still urge that the agreement is not an agreement of sale. His main argument however, is that the agreement is bad, since the consideration is grossly inadequate and the father and the first son were unaided and illiterate at the time when they executed the agreement of sale and the surrounding circumstances taken along with such a pressure from outside would give the impression that the agreement, even if it is an agreement of sale, is tainted and in that sense the Court ought not to exercise its discretion in the matter of granting of a decree for specific performance.

5. We are not impressed by the manner in which the subject-matter has been dealt with by the learned District Judge. It is the admitted case of both the parties that the sum of Rs. 2,250 was paid by the plaintiff in discharge of a prior mortgage deed in favour of the Co-operative Bank. The dispute was about Rs. 750. The payment of this sum is spoken to by P.W.1, whose veracity has not been in any way challenged before us. The only attribute against this P.W.1 as contended by the learned Counsel for the respondent, is that he is not the normal person who could have been called for writing this instrument. P.W.1 is a village munsif and it is not stated that he is not acquainted with the drafting of such instruments in the village. He swears that he was present when the sum of Rs. 750 was paid in cash by the plaintiff to the defendants in order to meet certain sundry debts and expenses. The learned District Judge did not give any specific reason as to why P.W. 1 should not be believed. But on the other hand he would accept the payment of Rs. 3,000 but at a tangent would go into exploratory matters such as inadequacy of price etc. It is no doubt true that inadequacy of price which is gross and which element creates a reasonable impression that the entire bargain is an unconscionable one would appeal to a Court of equity which has a discretion to grant or refuse a relieif for specific performance. In built in Section 20 of the Specific Relief Act of 1963 are certain guidelines to give an idea as to what all events and what circumstances and what facts would be sufficient to hold that a particular contract ought not to be specifically enforced on the ground of inadequacy of consideration. The Explanation 1 to Sub-section (2) of Section 20 says that mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of Clause (a) of Sub-section (2) of Section 20. This Explanation also deals with what is hardship within the meaning of Clause (b) of Sub-section (2) of Section 20. Hardship is one of the grounds which could form the basis for negativing the relief of specific performance. But what is the nature of hardship that should be patent in a given case is better stated in the language of the statute itself rather than explaining the same. One of the cases in which the Court may properly exercise discretion not to decree the suit for specific performance is where the contract would involve some hardship on the defendant, which he did not foresee or where its non-performance would involve no such hardship on the plaintiff. Explanation 1 again refers to the fact that inadequacy of consideration or a transaction being prima facie improvident would not come within the purview of the word 'hardship' in Clause (b) of Sub-section (2) of Section 20. Explanation 2 says that the question whether performance of contract would involve hardship on the defendant within the meaning of Clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

6. In a given case, therefore, it is necessary for a Court which is called upon to exercise its judicial discretion in the matter of the grant of decrees for specific performance to state and understand the circumstances existing at the time of the contract to find whether there would be any hardship if the relief is granted or whether such a relief should be negatived on the ground that the plaintiff is likely to have an unfair advantage over the defendant. The expression 'unfair advantage' is not one of art but is one which is pregnant with meaning. The unfair advantage should be such that on an overall appreciation of the situation the Courts which are to adjudicate upon the subject-matter should come to the conclusion that the party which is complaining of such unfair advantage should have been tricked and that there was a designed approach on the part of the plaintiff to victimise the alleged effected party. It is stated by Fry in his work on 'Specific Performance' as follows.

To make a contract for an insufficient consideration incapable of enforcement by the purchaser would be practically to prevent a man from selling his property at less than its value ... however desirous he might be to sell it for the price actually obtained and however unwilling or unable the purchaser might be to purchase at its full value.

It is in this light and context that the expression 'unfair advantage ' appearing in Section 20 (2) of the Specific Relief Act to be interpreted and applied. In the light of the Explanation 1 to the section, it has been very well understood by Courts of law that mere inadequacy of consideration is no ground at all to refuse the discretionary relief of specific performance. But what is alleged is that in this case there is gross inadequacy of consideration. The learned Counsel relies upon the evidence of the plaintiff himself, who says in his evidence that he sold about two acres of his land five or six years ago for a sum and consideration of Rs. 14,000, But the plaintiff would describe the said land as garden land of an area of 1.75 acres and 0-27 acres of Punja. What was the nature of this garden land? What were the crops which were raised on it and how it was dealt in the market, on these there is no evidence. This has not been brought out in the cross-examination. A vague reference to a sale years ago of properties of 2 acres for a sum and consideration of Rs. 14,000 would not be a safe guide and much less a universal guide for adoption at all times for all purposes. Again reference is made to another statement of the plaintiff, who stated that he was not agreeable to Sell his properties at the rate of Rs. 5,000 per acre.

This is referred to and relied upon by the learned District Judge. When the real intendment of the cross-examining counsel is thought of, what ought to be made out is that the price paid was inadequate. It has never been brought out and much less proved in a manner known to law that the price paid was grossly in adequate. There is a mountain of difference between inadequacy of price and gross inadequacy of price. Even in cases where the price is grossly inadequate, Courts require an additional dose of proof that by reason of such a design on the part of avaricious purchaser, the vendor has been victimised. It is this sort of proof that is required to establish or rather prompt the Court to negative a decree for specific performance on the foot that the consideration is grossly inadequate. Such necessary proof and even averment is absent in the instant case.

7. The learned Counsel for the respondent reiterated what the learned District Judge has stated in the matter of some discrepancy in the area sought to be sold and about the alleged premature institution of the suit. It is no doubt true that the plaintiff came to Court before the time for performance has arisen. But according to him he made himself sure that the defendants (the father and the eldest son) were not inclined to respect their obligations and, there-fore, he was compelled to come to Court. This is an insignificant circumstances as the suit went on beyond the time fixed for performance and the parties went to trial on the ground that there was no agreement of sale at all and even if there was one it was unenforceable. As regards the contention that there was some discrepancy in the area, the father and the eldest son were no doubt aware of their position, for in their written statement they would say that were entitled to a part of the suit properties only and that it was worth Rs. 20,000. Certainly, it could be presumed that the defendants are aware of the quantum of their entitlement in the properties. That this is so is seen from the fact that they have delivered the partition deed Exhibit A-1. In Exhibit A-1 the property obtained by the father and the eldest son are de-limited. Undoubtedly the plaintiff cannot get anything more than the property which the defendants obtained under the partition deed. In any event the plaintiff cannot secure specific performance of a contract of sale over the property in which the defendants have no right. This contention therefore, again is an insignificant feature in so far as the relief for the grant of specific performance is concerned.

8. As we said, the learned District Judge embarked upon an enquiry which is not quite pertinent or relevant to the subject-matter. He concentrated, as we said only on the alleged inadequacy of consideration. Even in the citation given, by the learned Counsel for the respondent. Lakshminarayana Reddiar v. Singaravela Naicker : (1962)2MLJ156 . the division Bench of our Court expressed the view that any contract which gives one party an unfair advantage must fall under the category of contracts which could not be specifically enforced, and it is well established that mere inadequacy of price for which properties are agreed to be sold would itself be no hardship which could be taken note of by a Court for refusing specific performance. This principle would apply to the instant case. We may also point out here that the vague contention of the learned Counsel for the respondent that the father and the eldest son were illiterates and unguided is not quite correct. We have already observed that Exhibit A-4 is a registered document. The parties must have gone to the Registrar's office for registering the same. Obviously no one protested or objected to such registration. Further, his father's mother, his brother and his uncle's son were all attestors to this deed. Nothing prevented them from going into the box and speaking to such an alleged unfortunate stress and strain which is said to have compelled the defendants to be a party to an unconscionable bargain. No satisfactory explanation has been given as to why the kith and kin, who are blood-relations, are kept out of the witness box. The obvious inference is that they were not prepared to assist the father or the eldest son in perpetrating the theory that the agreement of sale is one of lease and that it is not supported by consideration etc.

9. We may also in passing observe that the contention which is hesitantly taken by the respondents that the agreement of sale is effectively an agreement of lease is again unsupported. No possession was handed over by the defendants to the plaintiff in the specific performance suit which is an essential criterion to test whether the parties intended that the agreement was to be understood and acted upon as a contract of lease. A lease without possession of the subject-matter of the lease is unknown. Again the fact that a title deed relating to the property namely, the partition deed Exhibit A-1 Was handed over by the defendants to the plaintiff in the suit for specific performance is another indicia to show that the parties at all times understood Exhibit A-4 as a contract of conveyance.

10. For all the above reasons we hold that the learned District Judge in the second appeal has applied the law wrongly. Therefore, there is an error of law in his judgment. It is accordingly reversed and the judgment of the trial Court is restored.

11. As regards A.S. No. 163 of 1972 the second son having had scent of the suit for specific performance, filed this suit claiming that Exhibit A-1 which is the partition deed dated 17th April, 1962 is unforceable in so far as he is concerned because he was a minor on that date when he executed the same. Mr. Ramachandran appearing for the third defendant in the suit for partition, who is none else than the plaintiff, in the specific performance suit and who is the real contesting defendant in that action, says that there is no satisfactory proof that the plaintiff was a minor on the date when he executed the partition deed. We do not agree. Exhibit A-2 is the birth register extract. It shows that the plaintiff was born on 31st May, 1944. He is stated to be the second son of Mariappa Gounder and one Nanjammal. What is said is that there may be many Mariappa Gounders and that the second son's mother was known as Chinnammal and not as Nanjammal, Reliance is placed upon the voters' list Exhibit B-1, but we are unable to reject Exhibit A-2 and accept Exhibit B-1 the voters' list, for the reason that the latter is merely the compilation made by the enumerator, who obtains information at sight from some one who gives him such information at the time of his visitations. It is not necessary that the voter himself should give his or her name The enumerator is satisfied if he obtains information by some means or other. If the compilation of the voters list is made in such circumstances, it would be unsafe to place reliance upon it and exclude the birth register extract which is compiled under solemn circumstances, and in compliance with certain rules made under statute. We accept Exhibit A-2 and agree with the learned Subordinate Judge that on the date when the partition deed was signed by the second son (the plaintiff) in the partition suit, he was a minor. It is unnecessary for us to reiterate that all contracts made by minors, may be a partition arrangement as well, are void and the minor executant can treat the same as non est. It is in that light the lower Court has decreed the suit for partition and upheld the plaintiff's case that he was entitled to a declaration that Exhibit A-1 which is the partition deed, dated 17th April, 1962 is not binding on him. The appeal, therefore, fails and is dismissed.

12. In the light of our disposal of A.S. No. 163 of 1972 we make it clear that the plaintiff in the specific performance suit would only be entitled to a decree for specific performance in terms of the agreement of sale. The Court below while passing the final decree in the partition suit filed by the younger son should see to it that the properties agreed to be sold under Exhibit A-4 or a part thereof are as far as possible allotted to the share of the father and the eldest son so that the equities might be adjusted without much of inconvenience. The plaintiff in the specific performance suit will be entitled to a decree for specific performance for the amount already agreed for. There will be no reduction in this behalf. There will be no order as to costs in either of the appeals.


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