1. The fourth defendant is the appellant in the Second appeal which arises out of a suit filed by the plaintiff seeking specific performance of an agreement of sale of the suit properties. The first defendant is the husband of the second defendant and the minor third defendant is the step-sister of the second defendant. Defendants 1 to 3 entered into an agreement with the plaintiff to sell the share of the second defendant as well as share of the third defendant to the plaintiff for a sum of Rs. 4,000/-. An advance of Rs. 500/- was received. A period of four months was fixed for completion. In executing the agreement the first defendant acted as guardian for his sister-in-law, the minor third defendant. When the plaintiff pressed the defendants to complete the transaction, the second defendant repudiated the agreement itself while on behalf of the third defendant, the objection was raised that the first defendant had no authority to represent her. On 17-10-1964, the second defendant sold to the fourth defendant her share in the properties covered by the agreement. On the same day, the guardian of the third defendant sold the third defendant's share to defendants 5 and 6 and the plaintiff instituted the present suit for specific performance on 13-11-1964. The trial Court dismissed the suit, but in appeal, the plaintiff suit was decreed with reference to the share of the second defendant, with a proportionate abatement in the price payable by the plaintiff under Section 12(4) of the Specific Relief Act of 1963 (hereinafter referred to as the Act). The fourth defendant who has purchased the property from the second defendant with knowledge of the agreement of sale and as against whom also there is a decree for specific performance has preferred this second appeal.
2. Several useless and untenable contentions were raised on the merits before the Courts below, like(a) denial of the execution of the agreement by the second defendant, (b) the plaintiff's waiver of his right and (c) the fourth defendant being an innocent purchaser without knowledge of the agreement of sale etc. and they were all found against and learned counsel for the appellant did not, rightly, question the correctness of those findings. He confined his arguments only to the question whether, on the facts and the circumstances of this case, the plaintiff would be entitled to specific performance of a part of a contract with abatement of a proportionate purchase price.
3. In India, the power and jurisdiction of the Court to grant specific performance of a part of a contract was limited and circumscribed by the provisions in Ss. 14 to 17 of the repealed Act of 1877. Under the new Act of 1963, those provisions have been amalgamated and are contained in Sec. 12, sub-sections (1)to (4) with some modifications. Section 12 of the present Act which has taken the place of Sections 14 to 17 of the repealed Act constitutes a complete Code in respect of a claim for specific performance of a part of a contract. In this respect, the law in India is not in complete consonance with the law in England as laid down by the English Courts. In a limited sense, when a Court decrees specific performance of a part of a contract, it virtually amounts to the Court making a new bargain for the contracting parties which they never would have made for themselves, and it is for this reason that it is only in special cases, subject to certain conditions, that a party can claim specific performance of a part of a contract, though the English Courts have exercised jurisdiction in a wider area of cases. So far as India is concerned, it is settled law and beyond question that the provisions of Sections 14 to 17 of the repealed Act are both positive and negative in their form, and taken together, they constitute a complete Code, within the terms of which relief by way of specific performance must be sought if it is to be granted at all and that even though assistance may be derived from a consideration of cases upon this branch of English jurisprudence, the language of the Sections must ultimately prevail. Vide William Graham v. Krishna Chandra Dey . This rule applies even now and Section 12(1) of the new Act which corresponds to Sec. 17 of the repealed Act, expressly declare 'that the Courts shall not direct specific performance of a part of a contract except as provided in Section 12, sub-sections(2) to (4).' Section 12 of the present Act of 1963 runs in these terms:
'Sec. 12(1) Except as otherwise hereinafter provided in this Section, the Court shall not direct the specific performance of a part of a contract.
(2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value and admits of compensation in money, the Court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.
(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either-
(a) forms a considerable part of the whole, though admitting of compensation in money; or
(b) does not admit of compensation in money;
he is not entitled to obtain a decree for specific performance; but the Court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party-
(i) in a case falling under clause(a) pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and in a case falling under clause (b), the consideration for the whole of the contract without any abatement; and
(ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant.
(4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part.
Explanation: For the purpose of this Section a party to a contract shall be deemed to be unable to perform the whole of his part of it if a portion of its subject-matter existing at the date of the contract has ceased to exist at the time of its performance.'
4. Section 12(2) is not of much relevance to the present discussion as it deals with a case where that part of a contract which remains unperformed bears only a small proportion to the entirety of the contract. The question is whether the instant case would be covered by sub-section(3) and sub-section(4) of Section 12. Sub-section(3) corresponds to Section 15 of the repealed Act while sub-section(4) corresponds to Section 16 of the repealed Act. The material change (relevant for out discussion) introduced in sub-section(3) of Section 12 is that, a party (who is not in default) is entitled to specific performance of a part of a contract even where the portion unperformed is considerable part of the entire contract, and there will be an abatement in the price payable. Under Section 15 of the repealed Act, the plaintiff, in whose favor the decree for specific performance of a part of a contract is granted, is bound to pay the entire purchase price besides giving up or relinquishing his claims to the performance of the remaining part and to any right to compensation or loss or damage sustained by him on account of the default of the defendant. In order words, under Sec. 15 of the repealed Act, if at all, the Court granted a decree for specific performance of a part of a contract even where the part unperformed bears a considerable proportion to the entirety of the contract, the plaintiff must pay the entirety of the consideration while, under the new provision, i.e. sub-section(3) of Section 12 of the new Act. the plaintiff is not bound to pay the entire purchase price, but there will be proportionate abatement thereof.
5. The provision in the repealed Act compelling the purchaser to pay the entire price even though specific performance of a part of a contract was alone granted, was, indeed, a stringent and drastic condition besides being a wide departure from the English law. Under the present law, this condition has been eliminated and in this aspect the law has been brought into conformity with the English law. In a decision of the Privy Council in Rutherford v. Actin Adams, 1915 AC 866, AIR 1915 PC 113 Viscount Harden observed : 'If it is the purchaser who is suing, the Court holds him to have an even larger right. Subject to considerations of hardship, he may elect to take all he can get and to have a proportionate abatement from the purchase money.' Mr. D. Rangaswami Iyengar, learned counsel for the appellant urged that sub-sections(2) to (4) of Section 12 of the new Act would apply only to cases in which the contract specifically enforced is a contract which has been entered into between the parties to the action and that these provisions would not apply to a contract which is entered into between the plaintiff on the one side and different parties on the other and, if, with regard to some of them, specific performance cannot be decreed. His argument is that, for sub-sections(2) to (4) of Sec. 12 to apply, the Court must decree specific performance as against all the parties to the contract though the decree is in respect of a part thereof; in other words, the party against whom the decree is passed, whether single or plurality of persons, must be the same, whether single or plurality of persons, who entered into the agreement. To taken am illustration, if a contract of sale is entered into between A on the one side and B, C and D on the other for purchase of 15 acres of land, if B, C and D have right only in 8 acres, the Court can decree specific performance as against, B, C and D in respect of 8 acres, exercising jurisdiction under S. 12(3). But, if the contract, in so far as D is concerned, is void or invalid or inoperative, there is no question of the Court decreeing specific performance of a part of a contract as against B and C under Section 12, sub-section(3). Mr. Rangaswami Iyengar contended that even if specific performance of a part of a contract is decreed, the decree should be against the same body of persons who entered into the contract and if, for any reason, the decree cannot be passed against any of the parties to the contract, Section 12(3) would not apply. Applying to learned counsel, sub-section(2) to (4) of Section 12 do not cover such a situation and there being no statutory provision to meet such a contingency, the opening words of Section 12, sub-section(1) would prevail and the Court will have no jurisdiction to decree specific performance of a part of a contract. To put it in a nut-shell, a party to a contract in Sec. 12 sub-section(3) and a party against whom specific performance of a part of a contract is decreed must be the same and identical, there being no difference between the name or names of persons, whether used in singular or plural, meaning the same identical person or plurality of persons against whom the decree is passed and, unless this condition is satisfied, sub-sections(2) to (4) of Section 12 would not apply and sub-sec.(1) will have overriding operation. I am unable to accept this argument which is opposed to principle and against the view taken in several decisions in England and in the various High Courts in India, and, in particular, the decisions of this Court binding upon me.
6. I mat first refer to the leading Bench decision of this Court, the judgment of White, C. J. and Krishnaswami Dyer, J. in Pork Subbarami Reedy v. Vadlamudi Seshachalam Chetty, ILR(1910) Mad 359. In that case, the agreement of sale was entered into by defendants 1 to 4 and defendants 2 and 3 who were minors were represented by their father, the first defendant as their guardian. It was found that there was no necessity and the first defendant had no authority to covey the shares of the minors, defendants 2 and 3 and in this view, the Courts below dismissed the plaintiff's suit in its entirety, but in second appeal, the High Court decreed the suit as against the share of defendants 1 and 4 on condition that the plaintiff paid the entire purchase price without any abatement. The important point to notice in that case is that the plaintiff-appellant asked for a decree for the whole of the property against the first and the fourth defendants and this was rejected on the ground that the contract cannot be regarded as a contract by defendants 1 and 4 to convey the entire property. In the High Court, specific performance of a part of the contract pertaining to the share of defendants 1 and 4 was ordered as the plaintiff was prepared to pay the full purchase price and content to take the shares of the adult executants.
The principles of this Bench decision was followed and applied by the Full Bench of this Court in Baluswami Aiyar v. Lakshmana Aiyer, ILR 44 Mad 605 AIR 1921 Mad 172 . In that case, the managing member entered into a contract to sell joint family property and it was held that there was no necessity so far as the other coparceners were concerned and that the purchaser was entitled to a decree for specific performance only so far as the individual share of the managing member was concerned. Referring to the arguments of Counsel for the appellant, Sir Allady Krishnaswami Ayyar, at pages 611 and 612, resisting specific performance even with respect to the individual share of the managing member, shows a large number of English and Indian decisions were cited. Reliance was placed upon an observation in ILR(1910) Mad 359, in support of the contention that the said decision is authority for the position that there cannot be a decree for specific performance of a part of a contract, where the contract is inoperative in respect of some of the executants of the agreements. But this arguments was not accepted. In this connection, it will be useful to extract the judgment of Wallis, C. J., which is brief and to the point:
'I agree with the answer proposed by Kumaraswami Sastri, J., which is in accordance with the view taken in Nagiah v. Venkatrama Sastrulu, ILR 37 Mad 387 AIR 1914 Mad 456, to which I was a party and also, in my opinion, with the earlier decision of White, C. J. and Krishnaswami Ayyar, J., in ILR(1910)Mad 359), when those learned Judges observed at page 360: 'The plaintiff asks for a decree against the shares of the first and fourth defendants at least. This we think he cannot have.'
'All they meant, as appears from the rest of the judgment, was that he could not have a decree directing these defendants, who were parties to the agreement, to convey their own interest at a reduced price. This might have been granted in England, but in cases governed by Section 15 of the Specific Relief Act, a plaintiff can only have part performance if he is willing to pay the full contract price and to waive all claims for compensation. As the plaintiff in that case expressed this willingness to comply with these conditions, the learned Judges, at the close of their judgment, gave him decree as regards the shares of the first and fourth defendants. This amounts to a clear ruling that a case such as the present is governed by Section 15 of the Specific Relief Act. This was the conclusion at which I arrived in ILR 37 Mad 387 AIR 1914 Mad 456 and after careful reconsideration I think it was right.'
Oldfield, J. agreed with this view and did not write a separate judgment. Kumaraswami Sastri, J. who also agreed with this view delivered a separate judgment; what is crucial and relevant to notice is the fact that, dealing with Sections 14 to 17 of the repealed Act, the learned Judge observed that Section 15 only reproduces the English law with the difference that, under the English law, a party who elects to take what he can get is not bound to pay the full price, but only a proportionate price, while, in India, the party must pay the entire price and that, except with regard to the abatement in the price there is no difference between the principle laid down in the English decisions and the statutory provision in Section 15, on the topic of specific performance of a part of a contract. (Vide: Observations at pages 621 and 622). After a review of the case law and the legal position, the learned Judge (while referring to ILR (1910) Mad 359 stated the law in these terms; at page 628:
'So far as the decisions in India go, specific performance has been decreed of the share to which the vendor was entitled if the purchaser would take it. In Guruswami v. Ganapathia, ILR (1882) Mad 337 , a decree was passed directing conveyance of the half share to which the party contracting was entitled. The fact that Section 15 would be a bar to the abatement in the price ordered does not affect the granting of the relief as to the share if the purchaser is willing to take it without claiming any abatement in the price. In ((1910)Mad 359, it was held that the plaintiff was entitled to a decree for specific performance directing the conveyance of the vendors' share if he paid consideration. In Shama v. Kumed, 27 CLJ 611 AIR 1918 Cal 889, where a member of a family governed by the Mitakshara purported to sell the whole property and the agreement was found not to be binding on the members, specific performance of the contract in respect of the one-fourth share of the defendant was ordered without any abatement in the price.'
In Mahmud Ali v. Yawar Beg, : AIR1915All263 a Bench of the Allahabad High Court took the same view. The first defendant, on his behalf and as agent of the second defendant, agreed to sell a house in which each had an equal share. When the plaintiff claimed specific performance, it was found that the first defendant had no authority to represent the second defendant. The trial Court decreed specific performance so far as the share of the first defendant was concerned, with an abatement of half the purchase price. The High Court did not agree with this view. It held that the case would not come under Section 16 as distinct and separate contracts for two separate shares, but the contract was a whole, but even so, the plaintiff would be entitled to specific performance in respect of the share of the first defendant provided the plaintiff was prepared to pay the entire purchase price. This decision, therefore, is authority for the position that Section 16 would not apply, but it is Section 15 that would govern the case.
In a Bench decision of the Lahore High Court in Imam Din v. Muhammad Din AIR 1926 Lah 136, the decision of the Madras High Court in ILR(1910)Mad 359 and the decision of the Allahabad High Court in : AIR1915All263 , were followed. In that case it was held that where a major agreed to sell property belonging to himself and his minor nephew whose property he has no right to sell, the purchaser would be entitled, in a suit for specific performance, to a decree directing the adult party to convey his interest in the suit property, provided the entire purchase price was paid. The same view was taken in Dwijendra Kumar v. Monmohan : AIR1957Cal209 . In that case, defendants 1 to 4 entered into a contract to sell certain lands belonging to them to the plaintiff at a rental of Rupees 70/- per annum on receipt of a salami of Rs. 700/-. In a suit for specific performance it was found that the contract was not binding on the minor second defendant in respect of his one-fourth share in the lands. The Court held that Sections 14 and 16 were not applicable to the case, but the plaintiff would be entitled to specific performance in regard to the 3/4ths share of the adult contracting parties under Sec. 15, provided there was no abatement in the purchase price and the plaintiff relinquished his claim to further performance and compensation.
In my view, the matter is not open to further argument and is concluded by the decision of the Federal Court reported in Jainarain v. Surajmull , which related to specific performance of a part of a contract concerning the sale of shares. In the case, there was a contract by the plaintiff to purchase 350 shares belonging to defendants 1 to 4 at the rate of Rs. 700/- per share. In the course of the trial, the plaintiff did not press his claim with regard to the 100 shares belonging to the first and the second defendants and sought specific performance, for transfer of 250 shares belonging to defendants 3 and 4, the plaintiff agreeing to pay the entire price or the consideration. One of the points debated related to the question whether a decree can be passed in favor of the plaintiff in respect of 250 shares of defendants 3 and 4 on the ground that the contract was joint and indivisible and it was not open to the plaintiff to claim relief against some of the contracting parties to the exclusion of the rest. Dealing with that point, the Federal Court observed as follows at p. 218:
'The third point raised by the appellants does not appear to us to be at all sound. The argument is that the contract being joint and indivisible, it was not open to the plaintiffs to give up one of the defendants and proceed against the other two. In our opinion, Section 43, Contract Act is a complete answer to this contention. Unlike English law, the Indian law makes all joint liability, joint and several, in the absence of any agreement to the contrary. It is therefore, open to the promises to sue any one or some of the joint promisors and it is no defense to such a suit that all the promisors must have been made parties. As the plaintiff in this case prayed ultimately for specific performance of a part of the contract in the manner contemplated by Section 15, Specific Relief Act, and expressed their readiness to pay the entire consideration for 350 shares, the appellants are not prejudiced in any way.'
In view of these decision, there is no substance in the plea that Section 15 has no application to the instant case.
7. There is no warrant for the view that the decision of the Privy Council in had held that on the topic of specific performance of a part of a contract, and a doctrine of severability of a contract, the English law has no application or that the principles of the English law are completely different from the provisions of the Indian Statute, Sections 14 to 17. In , the Privy Council merely stressed that, while referring to the English decisions and the principles enunciated therein, the decisions in India, must ultimately rest upon the language of the Section. That does not mean that, on the question whether a contract comprises distinct and severable parts capable of specific performance as such, and whether in a particular case, specific performance can be decreed in respect of a part of the contract, the English decisions would have no application. The Indian law differs from the English law only to the extent of modified or different provision in the Statute. In other respects, in matters on which there is no contra provision or on aspects touching the discretion and the equitable jurisdiction of the Court, the English decisions would certainly afford guidance.
8. Indeed, in the preceding discussion, while referring to the Full Bench decision of this Court in ILR 44 Mad 605 AIR 1921 Mad 172 I had adverted to the fact that except for the difference in the abatement of the purchase price, the Indian enactment reproduces the principles of the English law. In this background, reference to two leading decisions in England may be of some relevance. In Horrocks v. Rigby, (1878) 9 Ch D 180 it was held that where two persons agreed to sell property, of whom one had no interest, judgment for specific performance with abatement may be made against the other. Fry, J. (as he then was) observed as follows:
'The plaintiff is, therefore, encumbered with several difficulties in respect of this contract. In the first place, he has entered into a contract with two persons as tenants-in-common for the sale of the entirety. It is found that one of those supposed tenants-in-common has no interest whatever in the property, and the question then is, whether the plaintiff can enforce against the other a conveyance so far as it relates to his moiety.'
'In my opinion, the plaintiff can enforce it. I think that where an agreement is entered into by A, and B with C. and it afterwards appears that B has no interest in the property, A may, nevertheless, be compelled to convey his interest to C. I should have come to that conclusion upon principle, for I do not see why a purchaser is to lose his right against a vendor who can complete, because from a circumstance of which the purchaser had no knowledge, he has no right against a person who cannot complete. But I am very much fortified in that conclusion by a passage in the judgment of Lord Hardwicke in Attorney-General v. Day, (1749) 1 Ves Sen 218. There he was dealing with the case of a contract entered into between tenants-in-common in tail, and he assumes the death of one of them leaving heirs in tail. He points out that whereas the contract could have been enforced against the contracting tenant in tail, it could not be enforced against the issue of the tenant in tail because they claim per formam doni, and are not subject to the contract of the previous tenant in tail. He points out further that the one tenant in tail could not enforce against the purchaser the performance of the contract with regard to the moiety of which he was possessed; but, contemplating the alternative case, that of the enforcement of the contract, by the purchaser against the vendor, Lord Hardwicke says, (1749) 1 Ves Sen 225: 'On the other hand, if on the death of one of the tenants-in-common who contracted for a sale of the estate, the purchaser brings a bill against the survivor desiring to take a moiety of the estate only, the interest in the money being divided by the interest in the estate, I should think (though I give no absolute opinion as to that) in the case of a common person he might have a conveyance of a moiety from the survivor, although the contract cannot be executed against the heir of the other.'
'It appears to me to be immaterial whether the impossibility arises from the death of the contracting party leaving heirs in tail who take per formam doni, or from the fact that one of the contracting parties cannot perform the contract. Lord Hardwiske's opinion is that the inability with regard to one moiety would not preclude the purchaser from having performance with regard to the other moiety, and I so hold.'
It is unnecessary to refer to other decisions in England taking a similar view because, there too, the matter is concluded by the decision of the Privy Council reported in Abdul Karim Basma v. Weekes, (1950) 2 All ER 146 1950 AC 441 in which the Privy Council approved and applied the principle of Horrocks v. Righby, (1878) 9 Ch D 180. In that case, the three respondents entered into an agreement to sell two houses to the appellant and as the first respondent happened to be a married woman, she had no power to enter into a contract without the concurrence of her husband and the agreement failed so far as her interest was concerned. The question was whether the appellant would be entitled to specific performance as against the shares of respondents 2 and 3 with abatement of the purchase price in respect of the first respondent's interest, and answer was in favor of the appellant. This aspect is dealt with in the judgment of Privy Council at pages 152 to 154. Lord Reid, who delivered the judgment, formulated the question in these terms:
'The other question in this appeal is whether the appellant is entitled to have specific performance of a part of his contract. He agreed to buy two houses which were owned by the first, second and third respondents as tenants in common. He can not enforce this contract against the first respondent because she had no power to make the contract. Can he enforce it against the second and third respondents so as to require conveyance to him of the two one-third shares which belonged to these respondents? Cases have not infrequently arisen where a single vendor has been unable to give a good title to all that he has contracted to sell. The general rule in such a case has been stated by Lord St. Leonards thus (Sugden on Vendors and Purchasers, 14th edition, page 317 and page 316):
'purchaser generally, although not universally, may take what he can get, with compensation for what he cannot have. In regard to the limits of the rule, that a purchaser may elect to take the part to which a title can be made at a proportionate price, it has not been determined whether under any circumstances of deterioration to the remaining property, the vendor could be exempted from the obligation of conveying that part to which a title could be made; but the proposition is untenable, that if there is a considerable part to which no title could be made, the vendor was therefore exempted from the necessity of conveying any part.' In the present case there are three vendors. One of them cannot convey her interest, but there is nothing to prevent the conveyance of the interests which belonged to the others. This type of case is less common, but one example is (1878) 9 Ch D 180, where two persons agreed to sell a public house and it was found on investigation that one of them had no interest in it, but that a moiety belonged to the other.'
In the further discussion, the Privy Council dealt with the question whether the principle enunciated by Fry, J. in (1878) 9 Ch D 180 holds the field or whether a different view has been taken by decisions subsequent thereto. The Privy Council held that the decision in (1878)9 Ch D 180, still holds the field and cannot be said to be impaired in any manner by the subsequent decisions. Vide: the statement of the law in 34th Halsbury's Laws of England (Third Edition Page 332, Para 563). Reference may also be made to the following statement of the law in Williams on Vendor and Purchaser, (Fourth Edition) at pages 725 and 726:
'So far we have dealt with the vendor's case. The purchaser under on open contract containing a misdescription of the property sold is in a different position. For the rule is that the vendor, having represented himself to be the owner of or to be entitled to sell a particular property, is estopped from showing in avoidance of the contract that he has the right to convey a part only and not the whole of what he was prepared to sell. The purchaser therefore is, as a rule, entitled if, it turns out that there is a mere deficiency, whether of area, estate or right, and whether substantial or not, between the property described in the contract and that offered in fulfillment thereof, to enforce the specific performance of the contract, taking such interest in the property sold as the vendor has and receiving compensation for the deficiency. For example, where a vendor described the land sold as containing a much greater quantity than its actual area; where a vendor could made no title to a considerable part of the land sold; and where a vendor who purported to sell the fee simple of certain land was entitled to tenancy for life, tenant in remainder subject to a life estate, tenant pur autre vie, or formerly to an undivided moiety only; he was obliged at the purchaser's suit to convey what estate he had and to allow compensation for the deficiency.'
The decree for Specific Performance will be as indicated in the Supreme Court in : 1SCR360 . (Durga Prasad v. Deep Chand). For all these reasons, the second appeal fails and is dismissed with costs. No leave.
9. Appeal dismissed.