1. The plaintiff brings this suit for specific performance of an agreement for re-sale (Ex. B) dated 4th May 1906. The property claimed in this suit was sold by the plaintiff for herself and as guardian of her minor son, by a sale-deed, Ex. 1 of the same date as Ex. B, to the present defendants. The registered sale-deed makes no reference to the agreement to re-convey but this has been provided for by a separate document, Ex. B. It would appear that the defendants have spent some moneys upon improving the property and one of the questions raised by them is that in the event of specific performance being decreed, they are entitled to the value of improvements which the first Court has fixed at Rs. 200.
2. The first Court gave the plaintiff a decree for specific performance. But the learned District Judge reversed that decision, holding that Ex. B is inoperative for want of registration, if viewed as part of the same transaction with Ex. 1-as in that case the transaction will in effect be converted into a mortgage by way of conditional sale - but that if it be viewed independently of Ex. 1 it would be void for want of consideration. I am unable to agree with the learned District Judge on either of these grounds.
3. No question of registration can really arise as regards Ex. B. The necessity for its registration has got to be determined on the terms of Ex. B itself and there is nothing in those terms to create an interest in the immovable property, so as to bring it within Section 17, Registration Act. Nor does any objection arise under Section 92, Clause (4), Evidence Act, because it is not now sought to use Ex. B to affect the provisions of Ex. 1. As pointed out in the case in Harikishandas Bhagwandas v. Bai Dhanu 1926 Bom. 497, where the claimant under the option of re-purchase affirms the original transaction, as a sale and merely seeks to enforce a covenant for re-conveyance, he is not asking the Court to treat the transaction as one of mortgage by way of conditional sale.
4. As regards the other ground taken by the learned District Judge, I am unable to agree that because in dealing with the question of registration, the Court views Ex. B by itself and independently of Ex. 1, the transactions themselves become separated in such a manner that Ex. B becomes devoid of consideration. There is no principle of law which requires that consideration should be proved only by written evidence or by a registered document. It is the factum of sale that is really the consideration for the covenant to re-convey. Indeed, one may carry the matter one step earlier and say that the reasonable inference is that the original vendor would not have agreed to sell if the proposed vendee had not agreed to enter into the covenant for re-sale.
5. Both the grounds adopted by the lower appellate Court having proved unavailing, Mr. P.S. Narayanaswami Ayyar, raised two other objections before me (1) one on the ground of want of mutuality as one of the persons who are parties to Ex. 1, is a minor, and (2) the other based on the doctrine of perpetuities. Both these objections ignore the terms of Ex. B. As I read Ex. B, the privilege under it is conferred either upon the plaintiff or upon her minor son and whatever force there may be in the objection as to want of mutuality so far as the minor son is concerned, no such objection can apply as against the plaintiff. It is therefore unnecessary to discuss the bearing of the judgment in Venkatachalam Pillai v. Sethuram Rao 1933 Mad. 322 on the present case or the wider question how far the defence of want of mutuality can at all arise in respect of what are known as 'option contracts,' because ex hypo-thesi there can be no mutuality in such oases, until at any rate, the party to whom the option is given has exercised his option.
6. As regards the objection founded on the rule against perpetuities, the trend of decisions in this Court has been in favour of the view that the objection does not apply to a mere covenant to convey or reconvey, because it does not by itself create an interest in the land. Further, as already stated, the privilege under Ex. B is conferred on the parties to the contract and in this view no objection based on perpetuity will arise.
7. Finally, Mr. Narayanaswami Ayyar, claimed that the remedy by way of specific performance being only equitable, it is only fair that the plaintiff should be directed to pay the cost of improvements before she should be permitted to enforce the terms of Ex. B. I am very doubtful if the terms of Section 51, T.P. Act will apply to the facts of the present case. But seeing that the present case is not one for eviction, I am not confined to the provisions of Section 51, I.P. Act. There is some force in the contention that specific performance is only an equitable remedy and in the circumstances of the case I see no objection to giving effect to this contention of Mr. Narayanaswami Ayyar. It would follow from this that the plaintiff can claim mesne profits at the rate fixed by the first Court only from the time that the plaintiff deposits in Court the sum of Rs. 100 as per terms of Ex. B and also the sum of Rs. 200 for the value of improvements.
8. The decree of the lower appellate Court is set aside and that of the District Munsif restored. Time for deposit of the sum of Rs. 300 is extended to 15th July 1934. The plaintiff will get costs in the first Court and her costs in the appeal in the lower appellate Court but not on the memorandum of objections there. In the second appeal, the parties will bear their own costs.