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Dakshinamurthi Mudaliar (Died) and ors. Vs. Dhanakoti Ammal - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1925Mad965; 87Ind.Cas.552; (1925)48MLJ661
AppellantDakshinamurthi Mudaliar (Died) and ors.
RespondentDhanakoti Ammal
Cases ReferredNagappa Naidu v. Muniswami Aiyar
Excerpt:
- - finlay 5 ltr (ns) 510 are cases where the main contract itself was one of tenancy and though the entry into possession in the former case was prior to the contract, the continuance of possession was distinctly referable to the contract. 4-8-0 is as good a letting as any he can! govindaraghava aiyar pointed out, it is a case where the courts might well have construed the contract (in the light of principles laid down in later cases) to be one of mortgage and not one of sale and agreement to re-sell. 11. for the other reasons given, the plaintiff must fail and the appeal will be allowed and the plaintiff's suit is dismissed with costs throughout......(in the light of principles laid down in later cases) to be one of mortgage and not one of sale and agreement to re-sell. on! the pleadings and on the facts of this case (the person entitled to the conveyance and the re-sale, the plaintiff, being different from the original vendor appu naicker) that alternative is not open to the plaintiff it not being suggested that plaintiff is a benamidar for her husband.8. the principle has been stated in fry on specific performance at page 279 (s. 584) : ' to make the acts of part-performance effective, to take the contract out of the statute of frauds, they must be consistent with the contract alleged and also such as cannot be referred to any other title than a contract, nor have been done with any other view or design than to perform a.....
Judgment:

Ramesam, J.

1. The facts of this Second Appeal are simple and may be thus stated.

2. The plaintiff's husband, Neelaveni Naicker, was the original owner of the property. He mortgaged it to a Fund at St. Thomas Mount. Unable to pay the mortgage debt he sold the house to his brother-in-law Appu Naicker for Rs. 600 (Ex. II, dated 19th September, 1907) and paid off the debt. Some time after, Appu Naicker was in need of Rs. 600 and applied to Neelavani for finding another purchaser. The latter found a willing vendee in the defendant and caused Appu Naicker to sell the property to the defendant (Ex. III, dated 26th November, 1909). At the time of the sale, the plaintiff, her husband and the defendant entered into an arrangement that the defendant should execute an agreement in favour of the plaintiff containing the following terms, viz., that the plaintiff should keep the suit house in her possession, that the plaintiff and her husband should pay regularly Rs. 4-8-0 every month or once in two months at the same rate, being the amount due at 0-12-0 per cent. per mensem for the sale amount of Rs. 600 that the plaintiff should pay the defendant the principal sum of Rs. 600 before the 14th December, 1914 and that, if payment he made in that manner, the defendant should execute and register a sale-deed for the suit house. Such an agreement was executed but is not forthcoming. The Courts below relying on Ex. I have found that its execution has been proved.

3. It is now admitted that no money was tendered by plaintiff within 14th December, 1914. The plaintiff continued to occupy the house. On nth June, 1918 the defendant issued a notice to quit and the plaintiff replied by Ex. IV-a relying on the agreement and sent Rs. 600 and arrears of rent Rs. 22-8-0, but the amount was rejected by the defendant. The present suit for specific performance was filed on 12th March, 1919.

4. The District Munsif dismissed the suit on the ground that as the plaintiff did not tender the amount within 14th December, 1914, she is not entitled to specific performance. The District Judge, reviewing the District Munsif's judgment, held that time was not of the essence of the contract and gave a decree. The defendant appeals.

5. If the agreement by the defendant to convey the property to the plaintiff ,is an ordinary contract to sell, I would have been inclined to dismiss the Second Appeal. But, on the allegation of the plaintiff and the findings of the Court below, it is a case of a sale to defendant followed by an agreement : to re-sell. The fact that the re-sale was not to be in favour of Appu Naicken or to Neelaveni Naicker does not make any difference. It is the plaintiff's husband, even though he sold the property to Appu Naicker, and not Appu Naicker that arranged the sale to the defendant and he stipulated that there shall be a re-sale to this nominee, his wife, the plaintiff. This is substantially a contract of sale with an agreement to re-sell.

6. It is doubtful whether the principle laid down in Jamshed Khodaram v. Burjorji Dhunjibhai ILR (1915) B 289 : 30 MLJ 186 that in contracts of sale of real property, time is not generally of the essence of the contract, is applicable to contracts to re-sell. On the other hand, it was held that the right to re-purchase must be exercised according to the strict terms of the power [Samarapuri Chetiiar v. Sudarsanachariar ILR (1919) M 802 : 37 MLJ 109, relying on Joy v. Birch (1836) 7 ER 2, Ranelagh v. Melton (1864) 62 ER 627 and Dibbins v. Dibbins (1896) 2 Ch 348. [See also Mating Po Yin v. Moung Shwe Kin (1922) 1 Bur LJ 167 The same view was taken in Maung Wala v. Maung Shwe Gon ILR (1923) R 472 following Samarapuri Chettiar v. Sudarsanachariar ILR (1919) M 802 : 37 MLJ 109. The ground on which relief was given to the purchasers in that case, viz., that the tender at the due date was made impracticable by default of the payee does not arise here. [See also Fry on Specific Performance, Section 1103, 6th Edn., p. 515.]

7. Mr. Govindaraghava Aiyar contends that there has been a part-performance of the contract and therefore it does not matter that the purchase money was not tendered within 14th December, 1914. The part-performance he relied on is the acceptance of rent beyond 14th December, 1914, up to June, 1918. He relied on Vizagapatam Sugar Company v. Muthurama Reddi ILR (1923) M 313 : 45 MLJ 528, Hiralal Ramnarayan v. Shankar Hirachand ILR (1921) B 1170, Hodson v. Henland (1896) 2 Ch 428 following Biss v. Hygate (1918) 2 KB 314 and Miller v. Finlay 5 LTR (NS) 510. There is no doubt as to the principle of these cases but Mr. Balasubramania Aiyar argued that it is not every kind of part-performance that will attract to operation of the principle. In Maddison v. Alderson 8 AC 467 Lord Selborne after referring at page 478 to Lord Hardwick's statement of the rule in Gunter v. Halsley Amb 586 and his opinion that the payment of purchase money in whole or in part as a sufficient part-performance, and pointing out that his application of the rule was not followed by Lord Cowper and Lord Macclesfield proceeds at page 479 : ' All the authorities show that the acts relied upon as part-performance must be unequivocally and in their own nature referrable to some such agreement as that alleged : Cooth v. Jackson 6 Ves 38 Frame v. Dawson 14 Ves 386 and Morphett v. Jones 1 Sw 181.' 'The acknowledged possession,' said Sir T. Plumer in Morphett v. Jones 1 Sw 181 ' of a stranger in the land of another is not explicable, except on the supposition of an agreement, and has therefore constantly been received as evidence of an antecedent contract, and as sufficient to authorise an inquiry into the terms, the Court regarding what has been done as : a consequence of contract or tenure. ' ' It is in general, ' said Sir James Wigram [Dale v. Hamilton 5 Hare 381 'of the essence of such an act that the Court shall, by reason of the act itself, without knowing whether there was an agreement or not, find the parties unequivocally in a position different from that which, according to their legal rights, they would be in if there were no contract. But an act which though in truth done in pursuance of a contract, admits of explanation without supposing a contract, is not in general admitted to constitute an act of part-performance taking the case out of the Statute of Frauds; as for example, the payment of a sum of money alleged to be purchase money. [See also Britain v. Rossiter (1879) 11 QBD 123 per Lord Justice Cottons]. The acts of part-performance, exemplified in the long series of decided cases in which parol contracts concerning land have been enforced, have been (almost, if not quite, universally) relative to the possession, use or tenure in the land. ' At page 484, Lord O'Hagan quotes Sir William Grant in Frame v. Dawson 14 Ves 387, 388 : ' The principle of the cases is that the act. must be of such a nature that, if stated, it would of itself infer the existence of some agreement, and then parol evidence is admitted to show what the agreement is. ' In Vizagapatam Sugar Company v. Muthurama Reddi ILR (1923) M 919 : 45 MLJ 528 possession was delivered in pursuance of the contract. So also in Hiralal Ramnarayan v. Shankar Hirachand ILR (1921) B 1170. The cases of Hodson v. Heuland (1896) 2 Ch 428 Biss v. Hygate (1918) 2 KB 314 and Miller v. Finlay 5 LTR (NS) 510 are cases where the main contract itself was one of tenancy and though the entry into possession in the former case was prior to the contract, the continuance of possession was distinctly referable to the contract. These cases cannot help us here when the main contract is one of re-sale and there is a subsidiary contract of tenancy up to the re-sale and all the acts of part-performance are explainable either as due to mere inaction or a willingness to continue the tenancy as one from month to month. The acceptance of rent after 14th December, 1914 amounts to no more than a renewal of the tenancy as a tenancy from month to month. I am quite alive to the fact that the rent fixed, viz., Rs. 4-8-0 represented a rate of interest at 9 per cent. on the purchase money stipulated, but I do not see how this makes any difference. The defendant might have thought that the tenancy with a rent of Rs. 4-8-0 is as good a letting as any he can! otherwise procure. Mr. Balasubramania Aiyar relied on Williams v. Owen 41 ER 386 : 5 My & Cr 303 This case supports him, though, as Mr. Govindaraghava Aiyar pointed out, it is a case where the Courts might well have construed the contract (in the light of principles laid down in later cases) to be one of mortgage and not one of sale and agreement to re-sell. On! the pleadings and on the facts of this case (the person entitled to the conveyance and the re-sale, the plaintiff, being different from the original vendor Appu Naicker) that alternative is not open to the plaintiff it not being suggested that plaintiff is a benamidar for her husband.

8. The principle has been stated in Fry on Specific Performance at page 279 (S. 584) : ' To make the acts of part-performance effective, to take the contract out of the Statute of Frauds, they must be consistent with the contract alleged and also such as cannot be referred to any other title than a contract, nor have been done with any other view or design than to perform a contract [Gunter v. Halsey Amb 586] therefore if a tenant in possession sues for the specific performance of an alleged contract for a new lease, the mere fact of his continuance in possession will have no weight as an act of part-performance of the contract, being referable to his character as tenant [per Plumer, M. R. in Morphett v. Jones 1 Sw 181] and other cases and distinguished by Hodson v. Heuland (1896) 2 Ch 428 and Biss ,v. Hygate (1918) 2 KB 314 which are not cases of renewal of the lease but of fresh lease. In the present case, the contract of possession can have no weight as an act of part-performance of the contract to re-sell there being a tenancy and the continuing of possession is explainable as evidence of a willingness to continue the tenancy.

9. In my opinion, there is no such part-performance as will help the plaintiff. There is no question of limitation in the case.

10. I may add that Mr. Balasubramania Aiyar relying on Nagappa Naidu v. Muniswami Aiyar ILR (1922) M 30 : 42 MLJ 432 contended that the agreement to re-sell being one-sided is no contract at all. But the present case is distinguishable from Nagappa Naidu v. Muniswami Aiyar ILR (1922) M 30 : 42 MLJ 432 in which the agreement to re-sell and the original sale were at different times and were separable. In the present case the whole arrangement constituted one agreement, the option to re-purchase is one term of the whole contract. This contention must be disallowed.

11. For the other reasons given, the plaintiff must fail and the appeal will be allowed and the plaintiff's suit is dismissed with costs throughout.


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