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Nochat Kizhakke Madathil Venkateswara Aiyar Vs. Kalloor Illath Raman Nambudri and ors., - Court Judgment

LegalCrystal Citation
Decided On
Reported in33Ind.Cas.696
AppellantNochat Kizhakke Madathil Venkateswara Aiyar;manattilparkum Eacharathil Achuthan Nair
RespondentKalloor Illath Raman Nambudri and ors., ;kotali Ramunny Nair and anr.;raman Alias thek Ketath Nair a
Cases ReferredJamfetji N. Tats v. Kashinath
consideration - agreement to sell, rights under--vendor and purchaser--assignment--hindu law--agreement to sell executed, by managing co-parcener--specific performance, whether can be claimed after his death against his undivided brother--agreement to sell, whether conveys any present right in property--contract--executory and executed contract--distinction in hindu law--right to sue, to what cases applicable--transfer of property act (iv of 1882), section 6(c)--assignment not covered by the section, validity of--specific relief act (i of 1877), sections 23 and 27--mortgage--specific performance, right to claim, whether can be mortgaged. - .....of the lands as he paid for reconveyed to him. during the currency of the ten years fixed by the karar, thekkedath nair assigned his interest under the karar to the various plaintiffs in second appeals nos. 1509, 1510, 1511 of 1914; and still within ten years the plaintiffs filed these three suits asking for specific performance of the karar of the 4th july 1901 as assignees of thekkedath nair's rights under that instrument. the position of the plaintiff in second appeal no 843 is rather more complicated, and will be dealt with separately in relation to that suit. but most of the issues are common to all the four suits. the defendants are (1) venkateawara iyer, who is the undivided brother of ananthanarayana iyer, who died before the institution of the suit, and (2) thekkedath nair,.....

Coutts Trotter, J.

1. The facts out of which these appeals arise are as follows: In 1887 Nanu Pattar obtained a money-decree in the Subordinate Judge's Court of Tellicherry against Thekkedath Nair and his tarwad. Nanu Pattar died and his elder son Ananthanarayana Iyer executed the decree by bringing to sale some of the properties belonging to Thekkedath Nair's tarwad, and at the sale Ananthanarayana Iyer himself bought these properties. Shortly afterwards, Thekkedath Nair presented a petition to have the sale set aside, alleging various irregularities leading up to it. In the result a compromise was effected, the petition was withdrawn and the sale of most of the lands was confirmed on terms which the parties reduced to writing in a registered karar, dated the 4th July 1901. By that document, while the sale to Ananthanarayana Iyer was confirmed, it was agreed that within ten years Thekkedath Nair, on payment of the price of the lands or of any part of them, should be entitled to have the whole or such part of the lands as he paid for reconveyed to him. During the currency of the ten years fixed by the karar, Thekkedath Nair assigned his interest under the karar to the various plaintiffs in Second Appeals Nos. 1509, 1510, 1511 of 1914; and still within ten years the plaintiffs filed these three suits asking for specific performance of the karar of the 4th July 1901 as assignees of Thekkedath Nair's rights under that instrument. The position of the plaintiff in Second Appeal No 843 is rather more complicated, and will be dealt with separately in relation to that suit. But most of the issues are common to all the four suits. The defendants are (1) Venkateawara Iyer, who is the undivided brother of Ananthanarayana Iyer, who died before the institution of the suit, and (2) Thekkedath Nair, who is merely a formal defendant. The learned Subordinate Judge has given decrees to the plaintiffs in Second Appeals Nos. 1509, 1510 and 1511, from which the 1st defendant appeals to this Court.

2. Two points taken by the appellants may be disposed of at once. In the first place, it was contended that there was no consideration for the karar giving the option of repurchase to Theksedath Nair, on the ground that, even if the objections of Thekkedath Nair to the. Court sale which bad taken place proved valid, that could only be due to irregularities of procedure attending that sale, and there was nothing to prevent Ananthanarayana Iyer from obtaining another sale untainted by such irregularities the very next day. This contention is really unarguable. We do not know how far Thekkedath Nair's objections were valid, or how far they might or might not have been got over by a fresh sale. It is quite clear that Ananthanarayana Iyer bona fide believed they were sufficiently serious to make it worth his while to dispose at them by compromise. Nor is there any suggestion made that Thekkedath Nair put forward these objections in bad faith, knowing full well that they were bad. It seems impossible to me to hold that the compromise effected in these circumstances was not supported by ample consideration, namely, the withdrawal of Thekkedath Nair's objections to the sale. Ananthanarayana Iyer undoubtedly entered into the karar as manager of his family; and it is not disputed that if there was consideration for the karar, as its effect was to preserve rights which the family had acquired in the properties, it would be binding on the family. Had the effect of the karar, therefore, been to alienate a portion of the properties to Thekkedath Nair there and then, no question could have arisen. In fact what Thekkedath Nair then obtained was not a present conveyance of any of the properties, but an executory right to have them conveyed to him at some future date on the fulfillment of certain conditions; and it is contended that as this was a conveyance of property within the meaning of the Transfer of Property Act, the date of the contract is not the date which must be looked at to determine the question of the propriety and necessity of the arrangement, but that the proper date to apply the test is the date when the agreement was sought to be enforced. If that be so, it is undoubtedly correct to say that no evidence has been given in this case to prove the existence of any necessity at that time. For the proposition in question reliance is placed upon the judgment of the High Court of Bombay in Jamsetji N. Tata v. Kashinath Jivan Manglia 3 Bom. L.R. 898. If Thekkedath Nair had been the plaintiff in this case, it would have been necessary to decide this question and to consider whether we are prepared to act upon the observations of Jenkins, C.J., in that case. In my opinion the question does not arise in this case as the suits are brought not by Thekkedath Nair but by his assignees, who undoubtedly took the assignments for valuable consideration and in good faith.

3. There remain three further contentions of the appellant which raise more serious difficulties. In the first place, it is contended that the plaintiff's suit will not lie inasmuch as the option under the karar was not capable of being assigned in law; secondly, it is contended that even if the assignee has a right to sue, that right is only exercisable against the original covenantor; thirdly, that by Hindu Law there was no transmission of interest from Ananthanarayana Iyer to the 1st defendant.

4. The first contention is put in this way. The Transfer of Property Act provides, of course, for the transfer of immoveable property and Chapter VIII of the Act (section 130) provides for the transfer of actionable claims. An executory contract for the future sale of immoveable property does not by Section 54 create any interest in the property and cannot, therefore, be property within the meaning of the Act. Nor can it be an actionable claim, for that is defined by Section 3 as a claim to any debt or to any beneficial interest in moveable property. It is contended that we must look to the Transfer of Property Act for an exhaustive and exclusive enumeration of what is assignable by the law of British India; and that if anything is assigned which cannot he brought within the four walls of the Act, the assignment is invalid. This is a difficulty which is inevitable in a country like India, where various branches of the law are separately codified from time to time without the existence of a Code which purports to contain the whole law in all its branches. The appellant goes further and says that an assignment such as the present is not merely not within the Transfer of Property Act, but is expressly prohibited by it; and for this he relies upon Section 6, which prohibits the transfer of a mere right to sue. In my opinion an executory contract for the conveyance of land is not a mere right to sue, A right to sue is no doubt involved in it on breach of its stipulations, but before breach there is also the right to have the land conveyed. A mere right to sue, in my opinion, is applicable only to cases where there has been a complete breach sounding in damages and where the specific enforcement of the contract cannot be obtained. I revert, therefore, to the question as to whether all assignments not covered by the provisions of the Transfer of Property Act are necessarily invalid. Little assistance is to be gained from the Contract Act; that Act contains provisions relating to assignments but nowhere lays down what assignments are or are not good in law. At the same time the Calcutta High Court in Joffer Meher Ali v. Budge Budge Jute Mills & Company 11 C.W.N. 566 undoubtedly based their view that an executory contract to deliver goods was assignable not on any general view of the assignability of contracts at Common Law (excluding, of course, those contracts which clearly contemplate personal performance by one of the contracting parties), but on the definition of actionable claim in Section 3 of the Transfer of Property Act as a beneficial interest in moveable property. This undoubtedly lends colour ft) the suggestion that assignments can only be supported if they come within the terms of the Transfer of Property Act. I think that this is taking too narrow a view of the assign-ability of contracts in this country. By Section 23(b) of the Specific Relief Act specific performance of a contract may be obtained by the representative-in-interest or the principal of any party thereto, provided that where the learning, skill, solvency or any personal quality o such party is a material ingredient in the contract or where the contract provides that his interest shall not be assigned, his representative-in-interest or his principal shall not be entitled to specific performance of the contract. This seems to me to contemplate clearly that all contracts capable of specific performance may be assigned except the prohibited class. Although the words used are 'representative-in-interest,' the subsequent use of the verb 'assign' in the section points conclusively to an assignee being covered by the words 'representative-in-interest.' I, therefore, hold that there is nothing in the position of the plaintiff as assignee to prevent his enforcing the rights given by the karar of 1901.

5. The second contention that the contract can only be enforced against the original covenantor is clearly untenable having regard to the provisions of the Specific Relief Act, if the 1st defendant fulfills the character defined by Section 27(b), That section provides that specific performance of a contract may be enforced against any person claiming under a party thereto by a title arising subsequently to the contract. Whether the 1st defendant in this case comes within the definition of that section is the third contention which is one of Hindu Law. The contention is that where there is a devolution by survivorship, as in the case of co-parceners, an executory contract entered into by one co-parcener cannot be enforced against the survivors, but must be taken to have died with the promisor. Mr. Subramania Sastriar admitted that no authority is to be found in support of such a proposition, and I see no reason for drawing such a distinction. No doubt in the case of a co-parcener, the contract must be shown to be beneficial or necessary, but where this test is done, I think the section renders him liable.

6. The position of the plaintiff in Second Appeal No. 843 is different from that of the plaintiffs in the other suit. On the 14th April 1909 Thekkedath Nair assigned his interest in the properties in question in this suit to his sister Ithukutty--Ithukutty hypothecated the interest that she had in the properties on the 14th April 1909 to the plaintiff in this appeal. By Section 58 of the Transfer of Property Act, a mortgage is defined as the transfer of an interest in specific immoveable property and we have already seen that a merely executory contract for the sale of immoveable property does not create any interest in such property. It follows that a mere right to specific performance cannot be the subject of a mortgage. That being so, Mr. Madhavan Nair is driven to contend that what passed under the karar of the 4th July 1901 to Thekkedath Nair was something more than such an executory right, and gave a present ownership of the properties to Thekkedath Nair in other words, that the karar on its true construction is a mortgage Of properties to secure repayment by Thekkedath Nair of the moneys referred to in the document. For this construction reliance is placed on the fact that there is a positive covenant by Thekkedath Nair to repay the sale price of the properties within ten years; that on such payment Thekkedath Nair is entitled to take back all the properties; that Thekkedath Nair covenanted to provide funds for any litigation necessary for the preservation of the property though such litigation was to be conducted by Ananthanarayana Iyer; and lastly that it was provided that though Ananthanarayana Iyer should have the power to grant leases they should not exceed that ten years within which Takkedath Nair's rights were kept alive. These are doubtless provisions which point very strongly to the construction of the karar as a mortgage. But, in my opinion, they cannot outweigh the fact that the primary object of the deed and the object effected by its very first operative clause was to confirm the sale to and ownership of Ananthanarayana Aiyar. The cadnial feature of an Indian mortgage is that the mortgagor and no one else is the owner of the property, and a document which by its express terms validates and confirms the ownership of a person other than the suggested mortgagor cannot, in my opinion, be treated as a mortgage. I am, therefore, of opinion that the karar did not convey any present right in the property to Thekkadath Nair, and accordingly that Ithukutty did not acquire by her assignment anything which she could validly hypothecate to this plaintiff, so that the plaintiff has acquired nothing on which he could sue. These second appeals therefore fail and are dismissed with costs.

Seshagiri Aiyar, J.

7. I agree. I only wish to say a few words on the question of Hindu Law which Mr. Subramania Sastriar pressed on us persistently. I can find no justification in reason or in authority for the proposition that the liability of a Hindu co-parcener as regards executory contracts is different from his liability as to executed contracts. In either case the same considerations regarding necessity or justifiable purposes would govern the decision. It is now settled law that an agreement by the father or manager to refer to arbitration is binding on the other members. I do not see why a contract to sell should stand on a different footing.

8. The learned Vakil raised the contention that, whereas in executed contracts the question would be whether there was necessity at the time of the contract, in executory contracts the binding nature has to be determined with reference to the time at which the contract is to be completed. I see no force in this contention either. One can spell out from the observations of Starling, J., in Jamfetji N. Tats v. Kashinath 3 Bom. L.R. 898 some support for this contention. All that the learned Judge seems to have laid down is that before a Court is asked to decree specific performance against a minor, it ought to satisfy itself that it is for the benefit of the minor that the decree should be passed. I do not think it was intended to declare that this benefit has to be ascertained not as on the date of the contract, but as on the date that the decree is to be passed. This would lead to difficulties. The principle underlying specific performance against vendors is 'that from the time of the contract for the sale of the land, the vendor, as to the land, becomes a trustee for the vendee; and the vendee, as to the purchase-money, a trustee for the vendor, who has a lien upon the land therefor.' If this is the correct view, there can be no question that the enforceability of a contract must be traced back to the date of the agreement. There is nothing in the Hindu Law to warrant a departure from this rule. Section 27 of the Specific Relief Act en bodies a general principle applicable to every one in this country.

9. Another contention was that the promisee is not entitled to enforce specific performance against the surviving members of a coparcenary, if the promisor is dead. All that Mr. Subramania Sastriar was able to say in support of this position is that there are no reported cases on this point. The fact that he co-parceners take by survivorship is not a ground for holding that the agreement died with the promisor's death. If an executed contract of a father or the managing member is binding on the son or the other members under certain circumstances, an executory contract is also binding. The difference between the position of an heir and the of a surviving co-parcener would be that, in the latter case, the contract would have to be shown to be for purposes binding on the family.

10. The objection that the defendant was sued as if he were the owner and not as manager, cannot prevail. At best it may necessitate an amendment of the description of the party. But in this case, the Courts below proceeded on the footing that the suit was against the manager, and there is no ground for directing, an amendment even.

11. As regards Second Appeal No. 843 of 1914, I am of opinion that Exhibit B should be regarded as a bare agreement. The recitals lend themselves to the construction that the property was mortgaged by he Nair to the defendant's predecessor; but it has 'to be remembered that Ananthanarayana Iyer had the sale certificate in his name. It is not alleged that there was any conveyance from him to the Nair. In the absence of such a transfer, the property vested in Ananthanarayana Iyer. I am, therefore, unable to agree with Mr. Madhavan Nair that the property vested in Thekkedath Nair and his assignee had a right in the property capable of being hypothecated. In the view I have taken, the right transmitted to the mortgagor of the plaintiff in this case was the right to get a conveyance. That under Section 54 of the Transfer of Property Act does not create an interest in the property. Consequently the plaintiff is not entitled to maintain the suit. The Courts below are right and the second appeal must be dismissed with cost.

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