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Anandilal Poddar Vs. Gunendra Kr. Roy and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata High Court
Decided On
Case NumberSuit No. 757 of 1958
Judge
Reported inAIR1966Cal107
ActsSpecific Relief Act, 1877 - Sections 22 and 35
AppellantAnandilal Poddar
RespondentGunendra Kr. Roy and anr.
Cases ReferredBarber v. Wolfe
Excerpt:
- ordera.n. ray, j. 1. the plaintiff anandilal poddar instituted this suit on may 24; 1958 against rai bahadur gunendra krishna roy and united bank of india ltd., for specific performance of the contract dated august 25, 1956 as modified on september 16, 1957 and for other reliefs. the contract dated august 25, 1956 was entered into between anandilal poddar and rai bahadur gunendra krishna roy hereinafter referred to for the sake of brevity as roy defendant for purchase of premises no. 57, jatindra mohan avenue, calcutta for the consideration of rupees 6,01,000 on, inter alia, the following terms and conditions:(a) the said premises should be sold to the plaintiff free from encumbrances. (b) the sale should be completed by december 15, 1956 and in this respect time should be deemed as.....
Judgment:
ORDER

A.N. Ray, J.

1. The plaintiff Anandilal Poddar instituted this suit on May 24; 1958 against Rai Bahadur Gunendra Krishna Roy and United Bank of India Ltd., for specific performance of the contract dated August 25, 1956 as modified on September 16, 1957 and for other reliefs. The contract dated August 25, 1956 was entered into between Anandilal Poddar and Rai Bahadur Gunendra Krishna Roy hereinafter referred to for the sake of brevity as Roy defendant for purchase of premises No. 57, Jatindra Mohan Avenue, Calcutta for the consideration of Rupees 6,01,000 on, inter alia, the following terms and conditions:

(a) The said premises should be sold to the plaintiff free from encumbrances.

(b) The sale should be completed by December 15, 1956 and in this respect time should be deemed as essence of the contract unless by mutual agreement between the plaintiff and Roy defendant such time was extended.

(c) Roy defendant should give vacant possession of the said premises to the plaintiff within a time to be settled later.

On August 25, 1956 the plaintiff paid Roy defendant a sum of Rs. 25,000 as earnest and in part payment of the said consideration. In 1950 the defendant United Bank of India Ltd. hereinafter referred to for the sake of brevity as the defendant bank instituted a suit being suit No. 3859 of 1950 in this court in respect of the mortgage created on the said premises No. 57, Jatindra Mohan Avenue, Calcutta by Roy defendant and on March 14, 1955 the defendant bank obtained a mortgage decree against Roy defendant for Rupees 3,32,143-4-0 and costs payable by certain instalments, and for sale of premises in default of payment. It is alleged in the plaint that no payment had been made by Roy defendant to the defendant bank under the said mortgage decree. At the request of Roy defendant on September 16, 1957 in consideration of the plaintiff paying Roy defendant a further sum or Rs. 10,000 as earnest and in part payment of the said consideration it was agreed by and between them with the consent of the defendant bank, inter alia, as follows:

(a) The plaintiff would take over upon himself the liability of Roy defendant to the defendant bank to the extent of Rupees 3,00,000.

(b) The aforesaid consideration for the sale of the said premises would be reduced by the said amount of Rs. 3,00,000.

(c) Roy defendant would discharge his remaining liability to the defendant bank in respect of the said mortgage for further completion of sale.

(d) The sale of the said premises by Roy defendant to the plaintiff should save as to the said sum of Rs. 3,00,000.

(e) The sale should be completed by November 30, 1957.

(f) The possession of the premises should be given by Roy defendant to the plaintiff by November 30, 1957.

2. In paragraph 5 of the plaint it is alleged that the time to complete purchase and possession was by mutual agreement extended up to 15th April, 1958. In paragraph 6 of the plaint it is alleged that (sic) defendant refused to complete the sale. In paragraph 7 of the plaint it is alleged that the plaintiff is entitled to specific performance and to pay to the defendant bank out of the consideration amount all its dues under the mortgage decree. In the plaint the plaintiff further claimed damages against Roy defendant by reason of the refusal or the latter to complete the sale. The particulars of damages were Rs. 6,800 being the letting or occupation value of Rs. 200 per day from April 16, 1958 when the sale should have been completed and possession given and further damages at the same rate until possession was delivered together with interest thereon at 9 per cent per annum until payment. The alternative claim in the plaint was that if the court were pleased not to direct specific performance of the said contract the plaintiff would claim refund of Rs. 25,001 and Rs. 10,000 aggregating Rs. 35,001 with interest thereon at the rate of 9 per cent per annum and a sum of Rs. 1,00,000 being the difference between the contract price and the market price.

3. Roy defendant did not contest the suit. The defendant bank appeared at the trial. The suit came up before me and a decree was passed on March 11, 1960. The suit against the bank was dismissed with costs. The decree contains inter alia the following clauses:

(a) It is ordered and decreed that the defendant United Bank of India Ltd. shall not proceed with the sale of premises No. 57, Jatindra Mohan Avenue for 3 months from the date hereof and if within three months the plaintiff pays the dues to the defendant bank the said defendant United Bank of India Ltd., shall not proceed with the sale of the said premises at

(b) It is further ordered and decreed that in the event of the plaintiff not paying dues of the defendant United Bank of India Ltd. by the 11th day of June, 1960 the defendant United Bank of India Ltd. shall be at liberty to proceed with the sale reference of the said premises from the 13th day of Tune, 1960.

(c) It is further ordered and decreed that this suit as against the defendant United Bank of India Ltd. be and the same is hereby dismissed. (It should be stated here that the decree as originally drawn up stated that the suit stood dismissed against Rai Bahadur Gunendra Krishna Roy. This portion was corrected by an order made by me on June 20, 1960).

(d) It is declared that the contract dated the 25th day of August, 1956 as modified on the 16th day of September, 1957 mentioned in the plaint in this suit ought to be specifically performed and carried into execution and the same is ordered and decreed accordingly.

(e) It is further ordered ana decreed that the defendant Rai Bahadur Gunendra Krishna Roy should deliver up to the plaintiff quiet, vacant and peaceable possession of premises No. 57, Jatindra Mohan Avenue, Calcutta.

(f) It is further ordered and decreed that the defendant Rai Bahadur Gunendra Krishna Roy do pay the sum of Rs. 6,800 for damages for the said premises and do also pay to the plaintiff further damages in respect of the said premises at the rate of Rs. 200 per day commencing from 16th day of April, 1958 until possession thereof is delivered up to the plaintiff.

(g) It is further ordered and decreed thatthe defendant Rai Bahadur Gunendra KrishnaRoy do execute a conveyance in respect of thesaid premises in favour of the plaintiff or hisnominee, such conveyance to be settled by theRegistrar of this court and caused to be registered for and on behalf of the defendant RaiBahadur Gunendra Krishna Roy refusing or neglecting to do so on the same being tenderedto him.

(h) It is further ordered and decreed that it be referred to the Registrar of this court with liberty to him to allocate reference either to the Official Referee or Assistant Referee of this court to make enquiry as to the encumbrance on the said premises.

(i) This court do reserve consideration of all further directions and of the costs of reference herein until after the said officer after making the aforesaid enquiry shall make his report.

4. The present application is made by Sin. Jyotsna Roy, Ranjit Kumar Roy, Ajit Kumar Roy, Suhrid Kumar Roy, Prodyot Kumar Roy and Sm. Chhebi Pal for several reliefs. The applicants asked for recording the death of Rai Bahadur Gunendra Krishna Roy, setting aside an abatement of the suit, if any, substitution of the names of the petitioners as defendants in place and stead of Roy defendant, leave be given to the suit being continued against the petitioners. The main reliefs sought are two-fold, first, that the decree dated the IIth March, 1960 be set aside or recalled, and secondly, that it be decreeed, declared and directed that the plaintiff is no more entitled to specific performance of the contract dated August 25, 1956 as modified on September 16, 1957 and to the amount of damages as stated in the decree or in part thereof. As a corollary to the second relief prayers (g), (h), (i), (j) and (k) are made for a declaration that the decree has become unworkable and unenforceable.

5. Mr. Mitter counsel on behalf of the petitioners invited my attention to the affidavit affirmed by Anandilal Poddar on April 26, 1961 and extracted certain facts therefrom. It appears in paragraph 6 of the affidavit of Anandilal Poddar that the agreement dated August 25, 1956 as modified on September 16, 1957 was followed by delivery of requisitions of title and answers to the same by the respective solicitors. The requisitions were furnished by Messrs. M.G. Poddar and Co., attorneys for the plaintiff to Messrs. B. N. Basu and Co., attorneys for Roy defendant on October 25, 1957. On December 9, 1957 draft conveyance was sent by Messrs. M.G. Poddar and Co., to Messrs. B.N. Basu and Co., for approval. On January 4, 1958, Messrs. M.G. Poddar and Co., asked Messrs. B.N. Basu and Co., for the immediate return of the draft conveyance duly approved by them. There was a reminder on January 25, 1958. On January 30, 1958, Messrs. B.N. Basu and Co.. replied stating that the Roy defendant desired to settle the amount to be paid to the defendant bank before the execution of the conveyance and on hearing from the defendant bank the Roy defendant would make necessary alterations in the draft conveyance and then return the same. On March 7, 1958 there was a reminder from M/s. M.G. Poddar and Co., for the return of the draft conveyance and completion of the sale. On April 2, 1958 there was another reminder from Messrs. M.G. Poddar and Co., demanding completion of the sale by April 15, 1958 failing which a suit for specific performance of the agreement would be filed against the Roy defendant. On April 15, 1958 the Roy defendant failed to complete the sale. On May 25, 1958 the present suit was filed against the Roy defendant and the defendant bank. On July 19, 1959 Messrs. B.N. Basu and Co., wrote to Mr. M.G. Poddar asking him to complete the sale. On August 18, 1959 Mr. M.G. Poddar sen! again a draft conveyance to Messrs. B.N. Basu and Co., for approval. On August 31, 1959 Messrs. B.N. Basu and Co., sent the draft conveyance duly approved. On November 19, 1959 Messrs B.N. Basu and Co., wrote to Mr. Poddar that the Roy defendant was ready and willing to complete the sale. The conveyance was engrossed and stamped with stamps of the value of Rs. 21,037. On January 19, 1960 the stamped conveyance was sent to Messrs. B.N. Basu and Co., and a letter was written asking to fix a date for execution of the conveyance by the Roy defendant. On February 4, 1960 there was a letter from Mr. Poddar to Messrs. B.N. Basu and Co., fixing 8-2-1960 as the date for execution of the conveyance or to fix some other date for execution of the conveyance but there was no reply from Messrs. B.N. Basu and Co., and the stamped conveyance was returned to Mr. M.G. Poddar, On March 11, 1960 the suit appeared before me and the decree was made.

6. On these facts Mr. Mitter contended first that the plaintiff procured a decree for damages for Rs. 6,800 as also damages at the rate of Rs. 200 per day both with effect from April 16, 1958, without bringing to the notice of the court that on August 31,' 1959 Messrs. B. N. Basu and Co., sent the draft conveyance duly approved and on February 4, 1960 the date for execution of the conveyance was fixed as February 8, 1960. The contention was that it appears from the affidavit of Anandilal Poddar that the time for performance of the contract was by mutual agreement extended till 8 February 1960 and yet the decree for damages was wrongfully obtained by concealing and suppressing from the court these facts. Mr. Mitter, contended that if the attention of the court had been invited to these features, a decree for damages might not have been passed at all. Second' , it was contended that in the plaint it was alleged that if a decree for specific performance was not made in favour of the plaintiff, the plaintiff would ask for damages for the sum of Rs. 1,00,000, whereas the plaintiff obtained a decree for damages which works out at the rate of Rs. 6,000 per month or Rs. 72,000 per year and the present damages earned by the plaintiff, according to Mr. Mitter, from April 16, 1958 to March 11, 1960 amount to Rupees 1,49,800 and further damages since the date of the decree at Rs. 200 per day have reached the figure of Rs. 90,000 up to the date of this application. The aggregate damages under the decree amount to about Rs. 2,40,000. Mr. Mitter further contended that (sic)gh in the agreement it was stipulated that Rs. 6,00,000 was to be paid by Anandilal Poddar, he did not pay any sums save and except Rs. 35,000. He has already earned Rs. 2,40,000 as damages and perhaps will go on earning damages with the result that he might secure the property without having to pay any substantial sum.

7. As far as setting aside the decree is concerned it is manifest that the present application is barred by time and I am unable to set aside the decree.

8. The question remains as to whether the petitioners are entitled to any relief on the present application. Mr. Mitter laid considerable emphasis on the nature of the decree and the doctrine of readiness and willingness in decrees for Specific Performance. In the first place, it was contended that the decree was conditional and the plaintiff was liable to pay the bank its dues under the mortgage and it was only after the plaintiff fulfilled the condition that he would be entitled to Specific Performance. In other words, the contention was that it was not the intention of the court that the plaintiff would make default of the condition of satisfying the dues of the defendant bank under mortgage and yet have a decree for Specific Performance. If the mortgage sale proceeded, the Specific Performance, it was contended, was not possible. Secondly, it was contended that since the plaintiff did not pay the moneys due to the defendant bank under the mortgage, the sale by the mortgagee bank could not be prevented and the decree for Specific Performance became illusory. Thirdly, it was contended that decrees for Specific Performance are different from decrees in other suits, in the sense that while other suits come to an end on the passing of a decree, it would not be so in the case of a decree for Specific Performance. By the decree the agreements are to be carried out and the agreements are alive and are being enforced and carried out by and under the supervision and direction of the court. Fourthly, it was contended that a decree for Specific Performance enures to the benefit of both the vendor and the vendee. Finally, it was contended that a decree for Specific Performance could be rescinded on any ground on which the agreement itself could be rescinded but since there was already a decree of the court the rescission had to be through the intervention of the court. In my opinion these contentions are sound.

9. In support of these contentious, Mr. Mitter stated that the defaults of the plaintiff were first, that the condition in the decree was not performed, namely that the mortgage dues were not satisfied. Secondly, that the plaintiff could have obtained the property at the time of the decree or immediately thereafter but the plaintiff did not choose to do so. Thirdly, that interest upon the mortgage was running and by reason of the plaintiff's inactivity, the mortgage dues have reached a large figure. Fourthly, that the property was to be kept vacant and there was injunction against the Roy defendant letting out the property resulting in a loss of Rs. 200 per day, if that were the letting value and yet the plaintiff got a decree for Rs. 200 per day and was claiming the same under the decree. Fifthly, that under the contract dated August 25, 1956 as modified on September 16, 1957 the liability to pay to the bank was taken upon himself by the plaintiff. Under the decree, the plaintiff was ordered to carry out that part of the contract. The plaintiff has not discharged that obligation and as a result of breach of that part of the contract, the bank is selling the property and the Roy defendant has been made liable for huge interest which might have been saved if the plaintiff had carried out the plaintiff's part of the contract. I am of opinion that these contentions are correct.

10. Mr. Mitter next contended that the Court should intervene for the following reasons. First, that the owner gets nothing. On the contrary, he is mulcted in damages which will increase and eventually the plaintiff will proceed in execution against the property in suit or perhaps other properties. The result will be that without paying anything, the plaintiff might obtain the property. The second reason advanced was that there was gross delay in not performing the condition imposed by the decree. 15 months have elapsed since the decree and the plaintiff took no steps to complete the acts under the decree. In support of this contention, Mr. Mitter took recourse to the proceedings taken by the plaintiff in the Reference. The Reference started on June 7, 1960. There was direction to file statement of fact by June 16. On June 13, it was discovered that there was mistake in the decree. I have already referred to the decree, namely, that under the decree as drawn up, the suit stood dismissed as against Rai Bahadur Gunendra Krishna Roy. That mistake was corrected under an order dated Tune 20, On June 16, the plaintiff obtained extension of time to file the statement of facts and time was granted till July 6. On July 6, Reference was adjourned. It appears from the minutes in Reference produced before me that the plaintiffs lawyers stated that search was not complete. Mr. Mitter criticised the act of the plaintiff inasmuch as up to 8-2-1960, it appears from the affidavit of Anandilal Poddar that the conveyance was ready for execution and if anything remained for the plaintiff to do it would be subsequent to 8-2-1960. On July 13, further time was obtained for search. On July 27, further time was obtained on the ground that search was not complete. On August 9, 1960, an extension of time for a fortnight was asked for. On August 23, the statement of facts was filed. Counter Statement of Facts was ordered to be filed by September 1 and the plaintiff was asked to inform the defendant. On September 1, no one appeared for the defendant and the Reference was adjourned till September 7. On September 7, there was a short adjournment till September 9. On September 9, Mr. Saraf appeared on behalf of the plaintiff in the Reference and opened the case for the plaintiff. The question was whether there was any encumbrance on the property. Chakradhar Sharma was examined by Mr. Saraf and the mortgage decree was tendered, and the case was closed. On September 13, there was a finding to the effect that there was no encumbrance except that of the bank. Mr. Mitter, in my view, rightly contended on these facts that inasmuch as it was the plaintiffs case in the plaint that the property was subject to the mortgage, the plaintiff need not have taken time up to September 9, 1960, to tender the mortgage decree. The result was that for all these months the plaintiff was earning damages at the rate of Rs. 6,000 per month. Thirdly, Mr. Mitter contended that since the date of the decree the plaintiff has not been ready and willing to perform the plaintiffs part and the plaintiff never asked the defendant as long as he was alive to execute the conveyance 'which was lying ready on February 8, I960 and that the plaintiff never asked for delivery of possession, though the penalty of Rs. 200 per day was already running against the vendor. Fourthly, it was contended that after the death of the defendant, which took place on September 20, I960, the plaintiff did not call upon his heirs either for possession or for execution of the conveyance. The Reference, it was contended was wholly unnecessary and could have been shortened and expedited. Finally, Mr. Mitter contended that under the agreement the property was to be sold free from encumbrance. The plaintiffs case in the plaint is that there was the mortgage in favour of the bank; under the agreements of which specific performance was decreed the plaintiff took upon himself the liability to pay Rs. 3,00,000 to the mortgagee bank and the balance was to be paid by the mortgagor the Roy defendant. Under the decree in this suit the plaintiff was given 3 months time to pay the defendant bank. The plaintiff did not do so and thereby in my view committed breach of the agreement as well as of the condition in the decree.

11. The main question now is whether the plaintiff is entitled to a relief by way of rescission of the contract. The question, resolves into two aspects, first as to the facts, secondly as to the position in law. On the facts Mr. Advocate General on behalf of the purchaser plaintiff contended that the plaintiff was ready and willing to perform his contract at the date of the decree and that there was no positive refusal by the plaintiff to perform the plaintiffs part of the agreement. It was further contended by Mr. Advocate General that the defendant should have signed the stamped conveyance inasmuch as the plaintiff exhibited readiness and willingness to perform the plaintiffs part of agreement by purchasing stamps and there was no excuse or explanation as to why the conveyance had not been signed. Thus it was contended that since the defendant did not sign their case should fail. Secondly, it was contended that there was no reason as to why the plaintiff should pay any money before the conveyance. Thirdly, it was contended that the conditions were simultaneous namely, both the execution of the conveyance and the payment of the money were to be done at the same time. Reliance was placed on Section 51 of the Contract Act and on the decision in Palmer v. Lark, 1945 Ch 182 in support of the contention. Fourthly, it was contended that until and unless the defendant served what is known as the four day order under the English practice as embodied in the case of Morgan v. Brisco, (1886) 32 Ch. D 192 the defendant could not be heard to pretend that the plaintiff committed any default or breach of the agreement.

12. Mr. Advocate General contended that oppressiveness or harshness if any was no reason as to why the defendant should be allowed to have rescission of the contract at this stage. The defendant should have made an application for setting aside the decree or should have preferred an appeal inasmuch as the defendant did not do so the court was now powerless. As to the Reference Mr. Advocate General contended that there was really no delay for the decree had to be corrected and secondly there were steps to be taken to complete the Reference.

13. Mr. Mitter relies on several English decisions as well as Indian decisions as authorities for the proposition that a contract can be rescinded after a decree for specific performance: Sweet v. Meredith, (1863) 4 Giff 207: 32 LJ Ch 147: 66 ER 680; Watson v. Cox, (1873) 15 Eq Cas 219; Hall v. Burnell, 1911-2 Ch 551; Halkett v. Earl of Dudley, (1907) 1 Ch 590; Jeffery v. Stewart, (1899) 80 LT 17; Henty v. Schroder, (1879) 12 Ch D 666; Jackson v. De Kadich, (1904) 1 WN 168; Dunn v. Vere, (1870) 19 WR 151; Abdul Shaker Sahib v. Abdul Rahiman, ILR 46 Mad 148: (AIR 1923 Mad 284); Akshayalingarn Pillai v. Avayambala. Ammal, ILR 56 Mad 796: (AIR 1933 Mad 386) and Kurpal Hemraj v. Shamrao, ILR 47 Bom 589: (AIR 1923 Bom 211). Mr. Advocate General did not dispute this proposition of law. His contention was that the plaintiff was not entitled to any rescission inasmuch as under the decree the plaintiff was not ordered or directed to pay any amount to the bank but had an option to pay and therefore there was no default and secondly that the Roy defendant had nothing but equity of redemption and that was what the plaintiff purchased and therefore the defendant could have signed the conveyance. I am unable to accept the contention of Mr. Advocate General. The decree to my mind shows that the plaintiff was directed to pay dues of the bank within three months and in the event of failure of the plaintiff to do so the bank was asked to proceed with the sale. The decree has to be read in its entirety. The first part of the decree is that time is given within which the plaintiff will pay. The second part of the decree is that the agreement dated August 25 as modified on September 16, 1957 was to be performed. Under the agreement the plaintiff took upon himself the liability to pay the bank Rs. 3,00,000 and the Roy defendant was to pay the remaining sum due on the mortgage. The plaintiff obtained a decree for specific performance and thereby became liable to perform the agreement as embodied in the decree. The agreement stipulates that the property shall be sold free from encumbrances. The consideration money is reduced from Rs. 6,00,000 to Rs. 3,00,000 for the purchaser has taken upon himself the liability to pay Rs. 3,00,000 to the bank on the mortgage, and the vendor is to pay the balance sum. IF the purcliaser does not pay the sum to the bank, the purchaser commits breach. The purchaser is given 3 months time to pay the bank. The plaintiff will pay and perform the agreement. The result is that if the plaintiff does not pay the bank the plaintiff does not perform the plaintiff's part of the agreement.

14. The doctrine of readiness and willingness, Mr. Mitter contended, was to be applied not only prior to the decree but also subsequent to the decree. I am unable to accept the contention of Advocate General that after the decree the decree-holder in a suit for specific performance need not show any further readiness. The decree enjoins certain other acts on the decree-holder subsequent to the decree. After the decree the conveyance has to be arranged. Under the decree it is incumbent upon the plaintiff to tender the conveyance and it is only on refusal that leave is granted to the Registrar. No step was taken by the plaintiff to tender the conveyance. In default it was open to the plaintiff to have the conveyance executed by the Registrar. The plaintiff did nothing. It is perhaps correct as Mr. Mitter contended that the plaintiff was losing nothing by not taking this step.

15. The property was agreed to be sold free from encumbrance. Subsequent agreement was to pay the bank Rs. 3,00,000. Mr. Mitter in my view rightly contended that there was nothing in the agreement that only the equity of redemption was sold or purchased.

16. Under Section 35 of the SpecificRelief Act it is enacted that any person interested in a contract may sue to have it rescinded,and such rescission may be adjudged by theCourt.

(c) where a decree for specific performance of a contract of sale, or of a contract to take a lease, has been made, and the purchaser or lessee makes default in payment of the purchase money or other sums which the Court has ordered him to pay.

It is beyond controversy that there can always be a suit for rescission of a contract after a decree for specific performance if the purchaser makes default in payment of any money which the Court has ordered him to pay. As to whether there can be an application for rescission of the contract in a suit in which there has been a decree for specific performance the consensus of opinion seems to be in favour of the view that an application is competent and maintainable. The concluding paragraph of Section 35 of the Specific Relief Act is as follows;

'In the same case, the Court may, by order in the suit in which the decree has been made and complied with, rescind the contract either so far as regards the party in default, or altogether, as the justice of the case may require.'

The true character of a decree for specific performance has been discussed in the decisions of, AIR 1923 Mad 284 corresponding to ILR 46 Mad 148 and AIR 1933 Mad 386 corresponding to ILR 56 Mad 796. Sehwabe G. I. in Abdul Shaker's case, ILR 46 Mad 148 (AIR 1923 Mad 284) said that a decree for specific performance was in the nature of a preliminary decree and the original Court kept control over the action and had full power to make any just and necessary orders therein, including in appropriate cases an extension of time. An application in the suit in which the decree for Specific performance was made was held competent in that case. In Akshayalingam's case, ILR 56 Mad 796: (AIR 1933 Mad 386) it was held relying on the authority of the decision of the Judicial Committee in Ardeshir H. Mama v. Flora Sassoon, 55 Ind App 360: (AIR 1928 PC 208) that the sections of the Specific Relief Act both as to substantive law and practice should be interpreted in the light of the principles recognised by the English Courts, and if there is any express divergence, then the Act will be strictly adhered to whatever be the English law. Secondly, it was held that a decree for specific performance operates in favour of born parties. Thirdly, that the passing of the decree does not terminate the suit.

17. In that Calcutta case Heramba Chandra v. Jyotish Chandra : AIR1932Cal579 , Rankin C. J. said that a decree for specific performance operates in favour of both parties and defendant in a suit for specific performance is as much entitled to enforce a decree as the plaintiff. A decree that an agreement ought to be specifically performed is against the plaintiff as well as against the defendant and in favour of the defendant as well as in favour of the plaintiff. The question whether the defendant should bring an execution proceeding or should proceed by summons in the same suit was held to be of no importance there when the Court before which the matter would be brought is the same. Rankin, C. J. said the defendant in a suit for specific performance is as much a decree-holder within the meaning of Section 2 as the decree is just as much in favour of the defendant as the plaintiff. Relying on this proposition it was held in the AIR 1933 Mad case that the right of rescission embodied in Section 35(c) of the Specific Relief Act was not confined to the vendor, whether the plaintiff or defendant but was to be equally open to a purchaser and it was immaterial whether he appeared in the section as plaintiff or defendant. In the decision of ILR 47 Bom 589: (AIR 1923 Bom 211) it was held that where there has been default in payment of the purchase money which the court has ordered a party to pay in a decree for specific performance of the contract of sale, it is open to the opponent to file a suit for rescission of the contract. The meaning of the concluding paragraph subsequent to Clause (c) in Section 35 of the Specific Relief Act was held in the Bombay case to refer to Clause (c) in the section, so that the court is empowered to make an order in the suit in which a decree has already been made, to rescind the contract, instead of putting the opponent to file another suit for rescission.

18. The decisions referred to hereinbefore support the proposition that there can be an application in a suit in which a decree for specific performance has been made, for an order for rescission of the contract. The English practice is to be found in Fry on Specific Performance. 6th Edn. pp. 546, 547, paragraphs 1171, 1172 and 1173. There are two kinds of relief after judgment for specific performance of which either party to the contract may, in proper case avail himself. He may obtain (on motion in the action) an order appointing a definite time and place for the completion or the contract by payment of the unpaid purchase money and denvery over of the executed conveyance and title deeds, or a period within which the judgment is to be obeyed, and, if the other party fails to obey the order, may thereupon at once issue a writ against the defaulting party's estate and effects. He may apply to the court by motion in the action for an order rescinding the contract. On an application of this kind, if it appears that the party moved against has positively refused to complete the contract, its immediate decision may be ordered otherwise, the order will be for rescission in default of completion within a limited time.

19. If the English practice be followed, unless the statute has the compelling effect of negativing any English practice, it is beyond any doubt that an application in the suit is competent and maintainable for rescission of the contract. If on the other hand the English practice be not resorted to, to which view I do not subscribe, the result is that an application lies under Section 35(c) of the Specific Relief Act The Bombay view supports such an application. An application asking for reliefs, as in the present case, is in my opinion competent and maintainable.

20. As to the contention of Mr. Advocate General that there should be four day order of the nature in the case of (1886) 32 Ch D 192. I am of opinion that it depends on the facts and circumstances of each case as to whether a four day order has been called for. I am unable to accept the contention of the plaintiff that the decree did not make any order for payment of money to the bank. As to what is positive refusal is again a question of fact. In my opinion the present case shows more than one instance where the plaintiff has chosen positively not to carry out the decretal obligation. The payment of money within three months is one the plaintiff is not calling upon the defendant or his heirs to execute the conveyance is another. Non-completion of the conveyance and not tendering the same to the defendant is yet another. I am of opinion that the contentions of Mr. Mitter and the reasons in support thereof which I indicated earlier are sound and correct and the facts in the present case leave no doubt whatever- in my mind that the plaintiff has chosen not to perform the plaintiff's part of the agreement.

21. The last question is what would happen if the contract is rescinded. The agreement dated August 25, 1956 in clauses 8, 9 and 10 thereof states that in the event of the vendor making out a good marketable title and the purchaser not having completed the purchase, the vendor shall be entitled to enforce the strict performance or to forfeit the earnest money as and by way of liquidated damages. If the vendor fails to make out a good marketable title he shall on demand pay to the purchaser Rs. 25,000 the earnest money. In the case of 1911-2 Ch 551, a question arose as to what would happen to a deposit paid upon a contract between vendor and purchaser. That was a case where the plaintiff upon the default of the defendant asked for an order rescinding the contract and for a declaration that he was entitled to the sum of pound 50 in the hands of his solicitor a stakeholder paid by way of deposit. The observations of Fry L. J. in Howe v. Smith, (1884) 27 Ch D 89 were referred to and Eve, J. said:

'Whether it be paid to the vendor direct or to a third party as stakeholder, the implication, in the absence of any other element of difference, must in each case be the same. Such being the nature of the deposit and the implied terms upon which it was paid, is there any sufficient reason why I should not, as against a purchaser who has receded from and persistently refused to perform the contract, declare that the deposit has been forfeited and belongs to the vendor, who has been in no way in default and has done every thing in his power to force the purchaser to carry out his bargain? I think not. The deposit cannot be left indefinitely in the hands of the stakeholder, and the only alternative to its being paid to the vendor is its return to the purchaser. But the decision in (1884) 27 Ch. D. 89 negatives the purchaser's right to recover it, when paid to the vendor in a case where the purchaser has repudiated the contract, and establishes the right of the vendor in such circumstances to retain it.'

(1884) 27 Ch. D. 89 was a case where the vendor was held entitled to rescind the contract and at the same time to retain the deposit. 1911-2 Ch. 55J is an authority for the proposition that there is nothing inconsistent in a vendor being given relief by way of rescission and at the same time, in the absence of express stipulation to the contrary, being allowed to retain the deposit.

22. In the decision in Barber v. Wolfe, 1945 Ch. 187, Romer, J., said in an application by a vendor asking for inter alia the following minutes that the contract be rescinded and the deposit be forfeited and that the purchaser do pay the mesne profits and further mesne profits.

'The relevant cases are summarised in Seton's Judgments and Orders, 7th edn., vol. 3, p. 2220, and they range over a considerable period of time, the latest being a decision of Eve, J., in 1911-2 Ch 551. Whatever be the foundation of the rule I am not sure that it is necessary to inquire into it at the present moment.'

In Barber's case, 1945 Ch 187 the order was allowed to go with the only alteration that the claim for mesne profits was not allowed. The claim for mesne profits was rejected on the principle that on rescission damages will not be awarded. Thus it appears that the vendor on rescission of contract is entitled to retain the deposit.

23. Mr. Advocate General did not dispute that the petitioners were entitled to an order recording the death of Rai Bahadur Gunenora Krishna Roy and also that there can be an order in terms of prayer C. The prayer for setting aside the abatement of the suit was not pressed It is true that in the several prayers there is no specific user of the word 'rescission' of the contract but I am to look at the reality and substance of the prayers. The case was really fought on the main issue as to whether there can be a rescission. The prayers could have been more artistic, la any event, in view of my conclusion that the plaintiff is entitled to rescission, I make the following order in terms of prayers A, C and F. I,therefore, hold that the contract in the suit isrescinded and I follow the practice adopted inall the English decisions and I stay all furtherproceedings in the suit except such as may benecessary for carrying this order into effect. Theapplicants are entitled to costs. Certificate fortwo counsel.


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