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Kandaswami and ors. Vs. Venkatachala Kandar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtChennai High Court
Decided On
Reported in(1972)2MLJ401
AppellantKandaswami and ors.
RespondentVenkatachala Kandar and ors.
Cases ReferredSafiur Rahman v. Maharamunnissa Bibi I.L.R.
Excerpt:
- .....court are the appellants herein. the suit was instituted by the respondents 1 to 3 herein for specific performance of an agreement to sell certain immovable property to them and defendants 2 and 3 entered into by the 4th respondent herein on 3rd september, 1964. pending the suit, the appellants herein purchased the property from the 4th respondent herein. the fourth respondent in the written statement filed by him denied the existence of any such agreement between him and the plaintiffs and defendants 2 and 3. similarly, defendants 2 and 3 also filed a common written statement denying the existence of the agreement. the fourth defendant who had also filed a written statement also denied the existence of the agreement. the learned district munsif who tried the suit found that such an.....
Judgment:

M.M. Ismail, J.

1. The defendants 2 to 4 in O.S. No. 639 of 1964 on the file of the Court of the District Munsif, Namakkal, who succeeded before the trial Court but lost before the first appellate Court are the appellants herein. The suit was instituted by the respondents 1 to 3 herein for specific performance of an agreement to sell certain immovable property to them and defendants 2 and 3 entered into by the 4th respondent herein on 3rd September, 1964. Pending the suit, the appellants herein purchased the property from the 4th respondent herein. The fourth respondent in the written statement filed by him denied the existence of any such agreement between him and the plaintiffs and defendants 2 and 3. Similarly, defendants 2 and 3 also filed a common written statement denying the existence of the agreement. The fourth defendant who had also filed a written statement also denied the existence of the agreement. The learned District Munsif who tried the suit found that such an agreement existed between the parties. Notwithstanding this conclusion, by judgment and decree, dated 17th January, 1966, he dismissed the suit holding that when the agreement was entered into by the first defendant with the three plaintiffs and defendants 2 and 3, it is not open to the three plaintiffs alone to institute a suit for specific performance and for this purpose, he relied on a decision of this Court in Karipalli Ramiah v. Sajja Subbiah (1912) M.W.N. 415. As against this judgment and decree the plaintiffs preferred an appeal to the learned Subordinate Judge of Salem and the learned Additional Subordinate Judge on 31st January, 1967 in A.S. No. 31 of 1966 allowed the appeal and decreed the suit instituted by the plaintiffs. In support of his conclusion he relied on another decision of this Court in Abdul Shakur Sahib v. Abdul Rahman Sahib : AIR1923Mad284 It is against this judgment and decree of the learned Additional Subordinate Judge, the present second appeal has been preferred by the defendants 2 to 4 in the suit.

2. In view of the concurrent finding of the Courts below that the agreement on which the suit was instituted was entered into by the first defendant on the one hand and the plaintiffs and the defendants 2 and 3 on the other, the learned Counsel for the appellants very rightly did not challenge the correctness of that conclusion. However, he repeated the basis for the dismissal of the suit mentioned by the learned District Munsif, viz., that the agreement having been entered into between the first defendant On the one hand and the plaintiffs and defendants 2 and 3 on the other, the plaintiffs alone could not have instituted the suit for specific performance even though the other two persons have been impleaded as defendants to the action. Consequently, the sole question for consideration is whether in a case like this where an agreement to sell immovable property has been entered into by the first defendant in the suit with the three plaintiffs and defendants 2 and 3, the plaintiffs 1 to 3 alone can institute the suit for specific performance of the agreement not only in their favour, but jointly in their favour along with the defendants 2 and 3. Before I proceed with the matter I must refer to one aspect of the case. The plaintiffs in their plaint expressly stated that the defendants 2 and 3 had colluded with the first defendant and were seeking to obtain a sale deed in their favour in respect of the suit property. This allegation stands established by the findings of the Courts below that there was an agreement as contended by the plaintiffs between the first defendant on the One hand and the plaintiffs and defendants 2 and 3 on the other. When such an agreement was in existence if defendants 2 and 3 had taken up the plea that there was no such agreement in existence and had purchased the property from the first defendant, the collusion between the defendants 2 and 3 and the first defendant becomes self-evident. One other fact which has to be noticed is that after the suit was Instituted the first defendant has actually sold the properties to the appellants herein. Only because of this, the decree was passed by the learned Subordinate Judge against these defendants as a whole compelling them to execute a sale deed in favour of the plaintiffs and defendants 2 and 3. There is nothing in the Specific Relief Act preventing such a suit. As a matter of fact, the provisions of the Specific Relief Act do contemplate a suit being instituted by only some of the beneficiaries to a contract or even in respect of a part of a contract under certain circumstances, j, However, reliance was placed solely on Section 45 of the Indian Contract Act in support of the contention that such a suit was not maintainable. Section 45 of the Indian Contract Act states, 'when a person has made a promise to two or more persons jointly, then unless a contrary intention appears from the contract, the right to claim performance rests, as between him and them, with them during their joint lives, and, after the death of any of them with the representative of such deceased person jointly with the survivor or survivors, and after the death of the last survivor with the representatives of all jointly'. The object of this section is not to subject the other party to the contract to repeated claims or different claims by the joint promisees at different stages. But, once all the parties to the agreement are before the Court, whether as plaintiffs Or defendants, I am unable to see anything in Section 45 of the Indian Contract Act making a suit instituted by only some of the parties to the contract as not maintainable. As far as a suit for specific performance of a contract is concerned, there have been a few decisions of this Court as well as other Courts. The earliest decision in this behalf is the decision in Safer Rakiman v. Maharamunnissa Bibi I.L.R. (1897)Cal. 832. The judgment is a very short one and the same is as follows:

The defendant No. 1, the appellant, made a joint contract with several permade a joint contract with several persons that, 'on receipt of Rs. 500 as profit in addition to the price paid by him for the property', he would execute separate documents in favour of each person. Some of the parties who entered into that contract with the defendant No. 1 claim specific performance of the contract, making the others, who refused to have the contract performed, defendants. The question, therefore, is, can some of the parties to a single contract enforce specific performance against their adversary and the other persons who are defendants?

We think on principle, that they cannot, and that in a suit for the performance of a single contract the parties on each side must be marshalled as plaintiffs 1 and defendants. We therefore decree the appeal, and dismiss the suit with costs in all the Courts '. I wish to make these observations on this judgment.

One is that the judgment does not discuss any principle of law in support of the conclusion reached by the Bench. Secondly, the judgment states that the appellant made a joint contract with several persons and some of them alone instituted the suit. How many of the persons who were the Original parties to the contract were the plaintiffs is not clear from the judgment. Thirdly, if the question was one of exercise of discretion On the part of the Court certainly the judgment does not give the reason for its refusal to decree the suit for specific performance in the exercise of its discretion

4. The decision of the Calcutta High Court was followed by a Bench of this Court in Koripalli Ramiah v. Sajja Subbiah 1912 M.W.N. 415. This judgment also is a Very short One and the same is as follows:

The first defendant entered into an agreement with the plaintiff and defendants 2 and 3 to convey certain land. The plaintiff alone instituted this suit for specific performance. Defendants 2 and 3 repudiate the contract and say that they are not willing to get any sale deed from the first defendant. The Lower Courts have dismissed the suit on the ground that the plaintiff alone had no right to demand performance of the agreement. In Our opinion they are obviously right. Section45 of the Contract Act lays down the rule on the right. The second and third defendants do not want the land. The first defendant is not bound to compel them to take it along with the plaintiff.

We agree with the decision in Saifur Rahiman v. Maharamunnissa Bibi I.L.R. (1897) Cal. 832 and dismiss the second appeal with costs.

Here again, I wish to point out that the judgment is a very short one and except for referring to Section 45 of the Indian Contract Act, it does not lay down any principle on the basis of which the suit for specific performance instituted by the plaintiffs can be dismissed. Even, with regard to Section 45 Of the Indian Contract Act, I wish to point out that the very section does not stand in the way of granting relief to the plaintiffs in the present case. For instance, suppose A enters into a contract with three persons X, Y and Z to sell his property to them. We may assume that Out of these three persons with a view to enrich himself unjuslty and to deny the benefit of the contract to X and Y colludes with A and denies the existence of the contract itself and independently purchases the property from A. Can it be said, in such a context that X and Y should be disabled from enforcing their right under the contract simply because of the collusion between Z and A. To countenance any such argument is not doing equity but doing something contrary to the equity. It has been recognised and well settled that the remedy of specific performance is an equitable One and is in the discretion of the Court. But, certainly in the exercise of its discretion the Court is not authorised to do something which is patently and plainly inequitable. In the present case, I have already held that the facts of the case make it self-evident that the defendants 2 and 3 colluded with the first defendant with a View to get the property for themselves adversely to the rights of the plaintiffs under the contract entered into by the first defendant with the plaintiffs and the defendants 2 and 3. In such a situation to state that the plaintiffs are not entitled to institute the suit for specific performance after impleading the defendants 2 and 3 as parties to the suit and they are prevented from doing so by Section 45 of the Indian Contract Act is to make a mockery of the equitable jurisdiction and the exercise of discretion and to mistake the real purpose of Section 45 of the Indian Contract Act. This is exactly the view taken by another Bench of this Court which had to deal with a similar situation and which had to consider the two decisions referred to above. This decision of this Court is in Kodandapani Kotayya V. Gangaru Seshayya alias Pedda Seshayya 1912 M.W.N. 995. In that case a contract was entered into in favour of the first; plaintiff who claimed that it was for the benefit of the joint family. The contention that was put forward was that the suit was maintainable only if all the persons entitled to specific performance join as plaintiffs and that as the fourth defendant who was one of the persons for whose benefit the contract to sell was said to have been entered into had not joined in instituting the suit, it should be dismissed and in support of that contention reliance was placed on the two decisions already referred to by me. Dealing with that contention and the two decisions, the Bench of this Court pointed out : ' We have carefully considered the oases quoted, the judgment in neither of which discusses the point at any length. If the learned Judges intended to lay down a hard and fast rule that where a contract is for the benefit of several persons the failure of any one of these persons to join as plaintiff in a suit for specific performance is necessarily fatal to the maintainability of the suit, we should, speaking with respect, find some difficulty in following them. We are not fully satisfied that this was intended and such a rigid rule certainly goes much further than is necessary for the determination of the two suits in question. The jurisdiction to decree specific performance is discretionary (vide Section 22, Specific Relief Act) and the failure of any beneficiary under the contract to join in the suit for enforcement must certainly always-be an important factor in deciding how that discretion should be exercised. In both the reported cases the Other circumstances rendered this abstentoni of practical importance. In the Madras case only one out of three beneficiaries sued for specific performance. In the Calcutta case it is not apparent how many of the beneficiaries figured as plaintiffs and how many as defendants; but the suit was for the execution of some out of a number of sale deeds contracted for in consideration of a single lump payment, and the plaintiffs sought to bring the suit under Section 16, Specific Relief Act. In such case, the circumstances (if we may respectfully say so) fully justified the discretionary refusal of specific performance without invoking any such rigid rule as the learned vakil for the appellants would deduce from the judgment. This decision makes it clear that it is not the question of technical maintainability of the suit, but it is a question of exercise of discretion on the part of the Court whether such a suit for specific performance instituted only .by some of the beneficiaries should be decreed or not. This is how this decision of this Court was understood by Coutts Trotter, J., by his judgment, dated 19th October, 1921 in C.S. No. 80 of 1920. It is this judgment which went up in appeal in Abdul Sukhar Sahib v. Abdul Rahiman and Anr. : AIR1923Mad284 , and this has been relied on by the learned Additional Subordinate Judge. In appeal, the appellate Court agreed with this view of Coutts Trotter, J., on the effect of the decisions of this Court as well as the Calcutta High Court referred to already. Therefore, it is clear that when only some of the beneficiaries to a contract institute the suit for specific performance of the contract impleading the Other beneficiaries as defendants either because they refused to join the plaintiffs Or because they colluded with the defendants, the question is not one of maintainability of such a suit, but the question is one of exercise of discretion in favour of the plaintiffs. If that is the real test, the question for consideration in the present case is whether the learned Additional Subordinate Judge was right in exercising his discretion in favour of the plaintiffs in the suit. I am clearly of the opinion that this is a clear case in which the discretion should have been exercised in favour of the plaintiffs. As I have already pointed Out, the collusion between the defendants 2 and 3 and the first defendant is self-evident. In such a situation, to say, that the plaintiffs are not entitled to a decree for specific performance is to put a premium on deceit and collusion and thereby encourage fraud on other parties. If defendants 2 and 3 were simply unwilling to enforce the contract in their favour either because they had changed their mind and therefore not willing to purchase the property Or because they were unable to pay for the performance of the obligation, the position may be different with regard to the exercise of discretion. Where in a case like the present one, the defendants 2 and 3 had clearly colluded with the first defendant with a view to obtain the benefit of the contract exclusively for them and to deprive the plaintiffs of the benefit to which they are entitled under the contract, it will be the most appropriate case in which the discretion of the Court should be exercised in favour of the plaintiffs and Section 45 of the Indian Contract Act ought not to stand in the way. As a matter of fact, in Soorayya v. Kateeza Beegum (1957) 1 An. W.R. 1 : A.I.R. 1957 A.P. 688, a Bench of the High Court of Andhra Pradesh after referring to the ordinary rule of Section 45 pointed out, 'If however a joint promisee declines to join as plaintiff or colludes with the defendant he can be impleaded as a( co-defendant and the suit will not then be defective. In the present case the heir of the deceased co-vendor of the plaintiff was made the 7th defendant to the suit and the suit was therefore maintainable.'

5. Apart from these considerations, there is a decision of the Nagpur High Court dealing with the decision of the Calcutta High Court already referred to. The decision is in Jugdeo Singh v. Bisamber . In that case also one of the beneficiaries to the contract for the purchase of the property was impleaded as the fourth defendant and an objection was taken based upon the decision of the Calcutta High Court that the suit was not maintainable. Vivian Bose, J., said that 'the first question which arises is whether specific performance can be decreed in such cases. It was argued that it cannot unless all the vendors are arrayed as parties on the one side and all the vendees on the other. This was the decision in Safiur Rahman v. Maharamunnissa Bibi I.L.R. (1897)Cal. 832. The ruling is a short one and no reasons are given. All that the learned Judges say is that 'we think, on principle, that they cannot'. With all due respect I am unable to agree. Section 23, Specific Relief Act, 1877, sets forth the persons who may obtain specific performance. It says 'except as otherwise provided by this Chapter the specific performance of a contract may be obtained by (1) any party thereto'. That would certainly appear to cover a case where one or more co-contractors want to enforce the contract against the will of the others. The wording is rot 'either side thereto' Or even 'either party thereto', but 'any party thereto'. The word 'any' indicates one out of a number of persons more than two. If only two parties are contemplated the correct adjective would be 'either' or at the most 'both.' The argument advanced was that the contract cannot be enforced piecemeal and that the Courts cannot make a new contract for the parties. Of course not; but the plaintiffs are not doing that. They want the original contract enforced just as it was made. They want to buy the property and want the Court to compel their co-contractors Anantaram to buy it along with them just as he had promised to do, and ask the Court to compel the defendants to sell it to all four in exact accordance with the agreement. That is not a variation of the contract. So long as the plaintiffs are willing to pay the vendors the full price bargained for and ask them to sell to the very persons with whom they had contracted I am unable to see how there is any variation. Any quarrel the purchasers may have among themselves is not being introduced into this suit. Each party is getting exactly what he bargained for and it is no concern of the vendors how these purchasers choose to arrange about the payment of the purchase price as between themselves. That is not a part of the agreement. All that the purchasers undertook to do was to pay the money to their vendors and that is being done. There is no section in the Act which prohibits this. Therefore I am clear that the plaintiffs have a right to sue for specific performance even though one of their co-contractors now refuses to join them. Of course, it is essential in such a case that all the parties to the contract should be before the Court. If any are omitted then I can understand difficulties arising. But when as here they have all been joined on one side or the other I am of opinion the suit can proceed.' This observation has been made without any reference to any collusion between the co-contractors and the other parties to the contract and also without any reference to the exercise of any discretion, but solely on a matter or principle flowing from Section 23 of the Specific Relief Act, 1877.

6. Consequently, looked at from any point of view, the conclusion of the learned Additional Subordinate Judge decreeing the suit for specific performance is correct and therefore the second appeal fails and is dismissed. There will be no order as to costs. No leave.


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