1. Appellants in C. M. A. Nos. 656 and 657 of 1952 and C. M. A. No. 104 of 1953 are the plaintiffs who filed a suit for specific performance and obtained a decree.
Plaintiffs and 1st defendant are co-sharers in some villages plaintiffs being entitled to 4/7 share and defendants to 3/7 shares. The suit was based on an agreement executed by the 1st defendant on 9-10-1941 to convey the 3/7 share to the plaintiffs for Rs. 45000. It is common ground that on that date the plaintiffs were in enjoyment of the whole village under an agreement for enjoyment by rotation for a period proportionate to the respective shares.
Plaintiffs' suit O. S. No. 93 of 1943 for specific performance of this agreement was decreed on 30-12-1944 with a direction to the plaintiffs to deposit Rs. 45000 by 10-1-1945. This sum was deposited on 3-1-1946, and has remained in court deposit ever since earning no interest. An appeal filed by the first defendant, A. S. No. 295 of 1945 in the High Court was dismissed on 1-4-1949 and leave to appeal to the Federal Court was also later dismissed. These villages were subsequently notified by Government under the Estates Abolition Act and were admittedly taken over by Government on 3-1-1951, the proprietors as the learned Advocates agree being entitled only to compensation under this statute.
2. First defendant filed E. A. Nos. 151 and 152 of 1952 pressing for execution of the decree for specific performance. On the former application, the Court approved a draft sale deed and directed a fair deed to be executed by the first defendant within three weeks. On the latter application for issue of a refund certificate for 'the sum of Rs. 45000 lying in court deposit which had lapsed to Government in March 1948, the learned Subordinate Judge directed the issue of the certificate, with a direction however that notice would be given to the plaintiffs of the date when the amount was sought to be actually taken from court by the first defendant.
The first defendant filed E. A. No. 454 of 1952 to review the order in E. A. No. 151 of 1952 directing him to execute a sale deed within three weeks. On this application the Subordinate Judge modified his order by directing the sale deed to be executed within a month after the plaintiffs in the suit required its execution. He also directed that if the parties disagreed as to the need for the execution of the sale deed, they may seek his further direction.
In para. G of his order, he gave this as a reasonfor the order he passed in review:
'But under the peculiar cir cum stances, viz. thatthe order of the Estates Abolition Tribunal, ifthey turn out as petitioner expects will renderthe actual execution of a sale deed needless, Ithink it necessary to relax the direction as totime limit.'
3. There has, therefore, been really no final order by the Subordinate Judge permitting the first defendant to withdraw Rs. 45000 and compelling the plaintiffs to accept the sale deed contemplated by this specific performance decree. The plaintiffs however apprehend that the combined result of these orders is that the first defendant would not be bound to execute the sale deed but would be entitled to withdraw the purchase money in court deposit.
We think that this is a vain apprehension and that the proper course for the plaintiff-appellants was to have moved the Subordinate Judge for the withdrawal of Rs. 45,000, as that decree had be-come impossible of performance on the grounds canvassed before us with much ability and eloquence by Mr. Gopalaswami Aiyangar.
As we have heard a long and interesting argument from him and Sri T. Krishna Rao for the first defendant-respondent, we however think that we might decide the interesting point of law these appeals raise without remitting this long pending matter to the Subordinate Judge for a decision and then perhaps an inevitable appeal from it.
4. The facts are quite clear and the learned advocates are only in conflict as to the law applicable. It is clear to us that this contract would have been covered by Section 56 of the Contract Act and held to be void if the Estates Abolition Act liad been passed prior to the decree for specific performance.
The relevant portion of Section 56 of the Contract Act may be here reproduced:
'A contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful becomes void when the act becomes impossible or unlawful.'
In the present case, the Estates Abolition Act clearly divested title in these villages from both the plaintiffs and the defendants who were the proprietors and vested it in the Government, the proprietors only being entitled to compensation. Therefore, it became impossible in law for defendants to execute the sale deed conveying title of their share in these villages to the plaintiffs.
We are quite unable to accept the 'view propounded by Sri T. Krishna Rao that there is nothing to prevent the first defendant executing the sale deed contemplated in the specific performance decree notwithstanding the Estates Abolition Act. We do not think that the legal position becomes in any way altered subsequent to the decree for specific performance. This is a case where subsequent to the decree an event which ne'ther party could prevent supervened and made the contract impossible of performance. What then is the procedure, which should be adopted by which in such a case either party could be relieved on this contract rendered void and obtain any result:ng rights or damages?
5. This is not a case where the subject-matter of the contract has been destroyed but in which the Government have stepped in and divested the vendor of title for praying (by paying?) some compensation thereby making it impossible for him to pass title by a sale deed to the vendee. It is urged that on the footing of the sale deed which the first defendant must execute under the decree the plaintiffs will be entitled only to the compensation to which the vendor is entitled under the Act but that the vendor must be paid Rs. 45000 under the decree.
Section 35 of the Specific Relief Act as it appears to us makes ample statutory provision for granting relief to parties in such cases as the one before us; nor is it necessary to delve deep into authorities in English law for guidance. Under Section 35 (C) any person interested in a contract In writing may sue to have it rescinded and such rescission may be adjudged by the Court where a decree for specific performance of a contract of sale has been made and the purchaser makes a default in the payment of the purchase money.
In addition to this Section 35 lays down that in the same case, the court may by order in the suit in which the decree has been made and not complied with rescind the contract either so far as regards the party in default or altogether as the justice of the case may require. This section clearly gives statutory recognition in Indian law to the position now settled in English law that a suit for specific performance is not deemed to come to an end by the passing of the decree. In Chapter IV of Fry's standard work on Specific Performance, he discusses the various reliefs that may be obtained after judgment and Fays this:
'The character of the consequential relief appropriate to any particular case will of course vary according to the nature of the subject-matter of the contract and the position which the applicant occupies in the transaction; but in every case the application must, under the present practice, be made only to the Court by which the judgment was pronounced.'
In -- 'Akshayalingam Pillai v. Avayambala Animal', AIR 1933 Mad 386 (A), Venkatasubba Rao and Curgenven JJ. considered a case in which as in the one before us, the vendor applied for a final decree for specific performance for a direction to the plaintiff vendee to bring the purchase money into court. In that particular case it was held that the vendor was not entitled to the relief prayed for by him and that the only remedy open to him was to have the contract rescinded. That decision has been rightly cited as authority for the position, that a decree for specific performance operates in favour of both parties and that it is open to a defendant also in suitable cases to enforce specific performance.
Venkatasubba Rao J. took the view that Section 35 of the Specific Relief Act was defective, and turning for guidance to the English practice on the subject held that the nature of the relief to be granted subsequent to a preliminary decree depended upon whether the applicant was a vendor or a purchaser and not upon whether he was the plaintiff or the defendant.
With great respect we do not consider that Section 35 of the Specific Relief Act is defective in view of the complete discretion and power which this section in our view clothes courts, by order in the suit in which the specific performance decree has been made and not complied with, (sic) to rescind the contract either so far as regards the party in default or altogether as the justice of the case may require. Reading Section 58 of the Contract Act with Section 35 of the Specific Relief Act we have little hesitation in coming to the conclusion that the court itself, which passed the decree for specific performance, can and should declare its own decree void if the act becomes impossible of performance or by reason of some event which neither party could prevent.
6. In -- 'Abdul Shaker v. Abdul Rahiman'. AIR 1923 Mad 284 (B), Schwabe and Wallace JJ. laid down that a decree for specific performance of a contract of sale was in the nature of a preliminary decree and that the original court had full powers to deal with any point that might arise including if necessary an application for further time. In this case, it would be quite impossible for the 1st defendant to execute a sale deed conveying title in these villages to the plaintiffs. It would also be unlawful for him to do so in view of the supervention of the Estates Abolition Act. The only alternative therefore is for us to declare the contract of sale and the decree for specific performance of the contract to this extent void. This however may not suffice in all cases of this kind and the parties may be entitled to other rights in equity consequent on specific performance being rendered impossible by the supervention or an act over which neither party to the contract had any control.
No authority in case law has been placed before us which deals with cases of impossibility of performance of a contract arising subsequent to a preliminary decree. We however can see no legal ground for any differentiation of the principles on which equities should be determined in cases which become impossible of performance subsequent to the suit and subsequent to the decree. The rights must be determined on the facts of each case and no hard and fast rule can be applied.
It may well have been that Government instead of divesting defendants of their title in these villages by an unexpected situation subsequent to the decree and paying compensation which is admittedly far less than the purchase price fixed in the contract, may have acquired the lands under the Land Acquisition Act and that compensation may have been awarded greatly in excess of the purchase price fixed. Would the same principles apply in both eases?
At first blush it may appear that on the maxim of 'caveat emptor' the purchaser takes the risks when he completes his contract to purchase of a rise or a fall in the nature of the property he agrees to buy. That principle would undoubtedly apply where the contract is implemented within a reasonable time by the vendor. But if the vendor contests the vendee's rights in a protracted litigation and then after the lapse of several years It is round that an act has supervened which makes it impossible for the vendor of the property to transfer title to the vendee it is obviously Just and equitable that the vendee should be entitled to a rescission of the contract without any resulting damages. On the other hand, if the plaintiff was successfully obstructed in the specific performance of an agreement of sale by the vendor for several years and then the property becomes greatly enhanced in value either by acquisition by Government and compensation paid thereon greatly in excess of the agreed sale price, the vendee would be entitled to recover from the vendor the difference between the sale price and the enhanced value of the property by way of damages.
7. We have come to the conclusion that in all these cases where subsequent to a preliminary decree for specific performance the contract has become incapable of performance the Court itself which passed the decree has ample power under Section 35 of the Specific Relief Act to grant parties on application their equitable rights consequent on such act of supervention on the facts of each case. This is a case in which the plaintiffs who were the vendees deposited Rs. 45000 in court on 8-1-1945 and this sum has earned since then no Interest at all. It is true that the plaintiffs have been in possession of these villages since then. We think it would be most unreasonable and inequitable that first defendant after resisting specific performance successfully since 1945 by appeals he filed or threatened to file, should now be permitted to withdraw Rs. 45000 in court and substitute in his place the plaintiffs as persons entitled to receive compensation from Government under the Estate Abolition Act in due course. We have no hesitation in declaring the entire decree for specific performance void in the circumstances. The plaintiffs will be permitted to withdraw the sum of Rs. 45000 they deposited in court and the first defendant will be placed in the position he was at the time of the passing of the Estate Abolition Act as owner of the villages his share in which he persisted in refusing to convey to the plaintiffs from 1945.
We would like to impress on learned advocates the necessity to argue on the footing of statutes by which we are bound and the need to avoid the temptation of citing in abundance English and Indian law in a domain specifically provided for by statute. We have ourselves therefore refrained from discussing at any further length a wealth of case-1aw placed before us, there being no decision dealing with a case of a decree for specific performance being rendered impossible of execution subsequent to the decree.
On these civil miscellaneous appeals and civil revision-petitions filed by way of abundant caution, there will be one order in the suit itself declaring the decree for specific performance void with permission to the appellants to withdraw Rs. 45000 in court deposit. The first defendant-respondent in all these appeals and petitions will pay the plaintiffs' costs only on the appeals with advocate's fee fixed at Rs. 250.