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Dasarath Gayen Vs. Satyanarayan Ghosh and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberA.F.A.D. No. 1320 of 1961
Judge
Reported inAIR1963Cal325,67CWN110
ActsContract Act, 1872 - Sections 25, 29 and 43; ;Specific Relief Act, 1877 - Sections 16 and 21; ;Code of Civil Procedure (CPC) , 1908 - Section 100
AppellantDasarath Gayen
RespondentSatyanarayan Ghosh and ors.
Appellant AdvocateManindra Nath Ghosh and ;Sachindra Chandra Das Gupta, Advs.
Respondent AdvocateManindra Chandra Chakravarti, Adv. for Respondent No. 1, ;Manan Kumar Ghose, Adv. for ;D.R., Adv. for Respondents 2 to 6 and 8 and 9
DispositionAppeal dismissed
Cases Referred(Baumann v. James
Excerpt:
- p.b. mukharji, j. 1. this is a second appeal arising out of a suit for specific performance instituted by the plaintiff satyanarayan ghosh, a major, against the first defendant dasarath gayen, a major and 9 other defendants of whom seven are minors represented by their natural guardian and father. the first defendant alone is the main defendant. the rest of the defendants from 2 to 10 including these minors are only pro forma defendants. the suit was decreed against the first defendant and he was called upon to execute the conveyance at the plaintiff's costs in favour of the plaintiff within one month from the date of the decree, in default of which execution the plaintiff would have it executed through the court at his costs. 2. the first defendant appealed to the learned district judge.....
Judgment:

P.B. Mukharji, J.

1. This is a second appeal arising out of a suit for specific performance instituted by the plaintiff Satyanarayan Ghosh, a major, against the first defendant Dasarath Gayen, a major and 9 other defendants of whom seven are minors represented by their natural guardian and father. The first defendant alone is the main defendant. The rest of the defendants from 2 to 10 including these minors are only pro forma defendants. The suit was decreed against the first defendant and he was called upon to execute the conveyance at the plaintiff's costs in favour of the plaintiff within one month from the date of the decree, in default of which execution the plaintiff would have it executed through the Court at his costs.

2. The first defendant appealed to the learned District Judge who dismissed his appeal on the 24th April, 1961 and also dismissed some of the cross-objections which were not pressed. The learned District Judge confirmed the decree passed by the learned Subordinate Judge. The appellant, the first defendant, preferred the second appeal to this Court on the 13th May, 1961.

3. Four main points have been argued before us in this second appeal. They are:

1. That the contract for reconveyance in this case is without consideration, and therefore should not be specifically enforced.

2. That the contract for reconveyance lacks in mutuality and therefore specifically unenforceable.

3. That the contract for reconveyance was void for uncertainty and therefore should not be specifically enforced.

4. That the lime within which the money had to be paid in order to demand the transfer had expired under the clause contained in the contract for reconveyance.

4. On the first point that the contract for reconveyance is without consideration it is necessary to state some relevant facts. There was a sale deed in respect of the properties in suit on the 14th January, 1950 corresponding to 30th Pous 1356 B. S. Thereafter on the 16th January, 1950, corresponding to the 2nd Magh 1356 B. S. a contract for reconveyance was made. Between the date of sale and the contract for reconveyanceintervened a week-end Saturday and Sunday.

5. The main argument on the ground of consideration on behalf or the appellant has been that the deed of sale cannot be taken as a consideration for the contract for reconveyance because they were executed on different dates. The consideration by which the property wasvoid was Rs. 8000/-. In other words the contention for the appellant is that because Rs. 8000/- the consideration for the sale was a past consideration therefore, it could not be treated as good consideration for the contract for reconveyance. The argument suffers from a number of fallacies and cannot succeed.

6. In the first place the agreement for reconveyance dated the 2nd Magh 1356 B.S. corresponding tothe 16th January, 1950, need not call in aid the deed of sale as its consideration. The agreement for reconveyance dated the 16th January, 1950, is itself supported by consideration. That consideration is the promise by the Intending purchasers in reconveyance to pay Rs. 6000/- and incidental and indispensable costs. That promise is good enough consideration in law. That short answer completely meets the appellant's challenge to thecontract for reconveyance on the ground of absence of consideration.

7. The consideration can also be the sale deed in the facts of this case. It was on this point that the lower Courts proceeded. We are satisfied that they proceeded correctly and came to the right conclusion onthe question of consideration. The facts show that such consideration was present and not past. The two deeds were presented on the same day for registration and the payment of the consideration money of Rs. 8000/- was made also on the same day. The registered numbers of these two deeds are two consecutive numbers. The date on which all these facts and events took place is the same date the 16th January, 1950. The parties were the same and the properties were the same. It is an admitted case of both the parties that the entire consideration money for the sale deed passed before the sub-Registrar on the same day the 16th January, 1950 and there is an endorsement to that effect in the document itself. We are, therefore, satisfied that on the facts of this appeal the sale deed is a sufficient consideration for the contract for reconveyance and these facts justify the finding that these two deeds formed really part of one and the same transaction.

8. In the Madras Full Bench decision N. B. Sitarama Rao v. Venkatarama Reddiar reported in (S) : AIR1956Mad261 , Govinda Menon, J. observed at page 268 as follows:

'A similar case in point is the judgment of the Chief Justice and Rajagopala Ayyangar J. in Srinivasalu Haldu v. Raju Naicker, (S) : AIR1955Mad635 , confirming the decision of Viswanatha Sastri 3, in App No. 287 or 1947, where it was held that a sale followed by an agreement of reconveyance should be treated as one transaction and that consideration for the reconveyance should be the sale deed itself'.

9. We, therefore, overrule the argument of the appellant that the contract for the reconveyance is not supported by consideration.

10. The second point contended on behalf of the appellant is that the contract for reconveyance lacks in mutuality. It is settled law that the contract for specific performance must be mutual. The appellant's argumenton this point is that in the contract for reconveyance, the option belongs entirely to the intending purchaser to call for the reconveyance on payment of the sum of Rs. 8000/- and certain other costs. Mr. Ghosh appearing for the appellant argues that there is no corresponding right on the part of the appellant who is executing this contract for reconveyance to call for the money. This he says makes the contract not mutual. This argument is unsound. The doctrine of mutuality means that the contract must be mutually enforceable by each party against the other. It does not, however, mean tnat right for right there must be a corresponding clause. A contract may contain series of clauses and covenants which form the total bargain between the parties and each of them is the consideration for the other. Mutuality in this context does not mean equality and exact arithmetical correspondence. It means each party to the contract must have the freedom to enforce his rights under the contract against the other. On this particular clause the right of the appellant is to get the money when he reconveys. It cannot be said that this provision lacks mutuality because the appellant cannot can for the money. His right under the contract is that it he is asked to reconvey he can insist on his right to the money. The learned editor of Fry on Specific performance, Sixth Edition at page 223 in Article 465 states the correct proposition of law on the point of mutuality in this respect as follows:

'The contract may be of such a nature as to give to the one party a right to the performance which It does not give to the other -- as for instance, where a lessor covenants to renew upon the request of his lessee : (Chesterman v. Mann, (1851) 9 Hare 206) or where the contract is in the nature of an undertaking. (Palmer v. Scott, (1830) 1 Russ, and M. 391). But these are merely cases of conditional contracts: and when the condition has been performed, as for instance in the case above stated, by a request to renew, the contract becomes absolute and mutual and capable of enforcement alike by either party. (Cf. Weeding v. Weeding, (1861) 1 John, and H. 424.)'

and in support of this proposition the authority of the case of (1861) 1 John, and H. 424 is quoted, where a conditional contract had become absolute by the exercise of an option of purchase.

11. On this point of mutuality it has also been argued on behalf of the appellant that because there are minors involved, therefore, this contract is not specifically enforceable. In support of that argument Mr. Ghosh relies on the well known decision of the Privy Council in Mir Sarwarjan v. Fakhruddin Mahomad Chowdhuri, 39 Ind App 1 which lays down the proposition that neither the guardian of a minor nor his manager is competent to bind the minor or his estate by a contract for the purchase of immoveable property. One of the questions before the Privy Council was whether the first plaintiff in that case had the right to enforce specific performance of the contract. The agreement there was made by Mir Sarwarjan and Basanta Kumar Guha, who acted as manager for one Mr. Garth who was himself the manager of the plaintiffs' estate. The well known observation of Lord Macnaghten at page 6 of that report is as follows:

'Without some authority their Lordships are unable to accept the view of the learned Judges of the Division Bench that there is no difference between the position and powers of a manager and those of a guardian. They are, however, of opinion that it is not within the competence of a manager of a minor's estate or within the competence of a guardian of a minor to bind the minor or the minor's estate by a contract for the purchase of immovable property, and they are further of opinion that as the minor in the present case was not bound by the contract there was no mutuality, and that the minor who has now reached his majority cannot obtain specific performance of the contract.'

12. The difficulty of the appellant on this point is that here in the instant Appeal before us, it is the case of a major plaintiff suing a major defendant for specific performance. No claim for specific performance for or against a minor is made in this suit. The minor defendants are only pro-forma defendants in this suit. The contract for reconveyance is between the appellant and the 9 other parties of whom some are minors, this particular contract for reconveyance by its very clause expressly says that this right to reconveyance is to be had by either of the parties or anyone of them on paying Rs. 8000/- and other incidental and indispensable costs. If so the contract for reconveyance is a joint and several contract by each one of the parties. Therefore, as between the appellant who is a major and the first defendant, it is a binding contract without any question of minority of anyone. Simply because other minors have certain rights under the contract independently of the first defendant that does not vitiate the contract between the appellant and the first defendant or the major first defendant's claim of a specific performance of the contract against the major appellant.

13. Section 43 of the Indian Contract Act provides that when two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel any one or more of such joint promisors to perform the whole of the promise. As between the appellant and the first defendant therefore, the argument based on the minority of others cannot prejudice this claim for specific performance. Even under Section 16 of the Specific Relief Act when a part of a contract which, taken by itself, can and ought to be specifically performed stands on a separate and independent footing from another part of the same contract which cannot be specifically performed, the court may direct specific performance of the former part. Therefore, when the contract is several and not merely Joint and when the fact that the other part of the contract which is severable is between persons who are minors, the minority of others cannot be a bar to the claim for specific performance between the major parties.

14. Besides reliance on Mir Sarwarjan's case, 39 Ind App I cannot help the appellant in this case. The authority of Mir Sarwarjan, 39 Ind App 1 has been the occasion of many comments and many deferences. In Jamna Bai v. Vasanta Rao, reported in 43 Ind. App. 99 : (AIR 1916 PC 2) the Privy Council considered the question of compromise of a suit where two defendants, of whom one was a minor, entered into a bond by which they jointly agreed to pay a certain sum to the plaintiff at a future date and where the leave of the Court was not obtained on behalf of the minor under the then Civil Procedure Code. It was held by the Privy Council there that the bond was not enforceable against the minor, but that it was enforceable to the full amount against the joint contractor, The following observation of Sir Lawrence Jenkins who delivered the advice of the Privy Council at page 103 (of Ind App) : (at p. 3 of AIR) of the report supports the view we are taking here:

'Stripped of all that is not relevant, the plea advanced on her behalf is that one of two promisors can plead the minority and consequent immunity of the other as a bar to the promisee's claim against him. This is a position that cannot be maintained, and has been properly rejected by the High Court.'

15. That is the real issue in the present appeal before us and we therefore, do not think that the minority of the defendants in this case against whom no claim for specific performance is made can prevent the first defendant who was not a minor at the time of the contract from making his claim for specific performance against the appellant who equally was not a minor at any time relevant to the contract. Then again in Subrahmanyam v. Subba Rao reported in the Privy Council had occasion to deal with the sale of land by a minor through his guardian. Lord Morton who delivered the advice of the Privy council after considering Hunoomanpersaud v. Mt. Babooea Mundraj Koonweree, 6 Moo Ind App 393 (PC) and Mohori Bibee v. Dharmodas Ghose, 30 Ind App 114 (PC) expressed the view that the contract being one which it was within the competence of the guardian to enter into on the respondent's behalf so as to bind him by it, and being for his benefit, it was binding on him and having regard to all the circumstances in that case, the respondent was the person who most aptly answered the description of 'the transferor' in the sense in which those words were used in Section 53 of the Transfer of Property Act.

16. This leads to some considerations of the facts which are relevant for this purpose. It was expressly pleaded in the plaint in this case that the sale was really intended to be in the nature of a loan of Rs. 8000/-. But as the appellant had not had a licence under the Bengal Money Lenders Act it was taken through the device of a sale in the first instance and the contract for reconveyance thereafter. It was also expressly pleaded in the plaint that this money was necessary for maintenance of the properties of the minor and also for their educational expenses. No issue was raised on this point. In fact it is significant that the appellant never challenged the contract on the ground that minors were parties to the contract through their guardians and therefore, it lacked mutuality. It was not an issue before either the Court of the first instance or in the first Court of Appeal. The only ground on which the contract was challenged for lack of mutuality was the first ground to which I have referred, namely, that the contract for reconveyance did not give a corresponding right to the appellant to call for the money as independent right and then offer to reconvey. It is, therefore, not open to the appellant now in second appeal which is confined only to the questions of law to reopen any question of fact or to contest the fact that the money or sale was not for the benefit of the minors or for legal necessity. The parties in this case are Hindus. The fathers of the minors acted as their natural guardians both in the deedof sale as well as in the contract for reconveyance. There are number of authorities on this point. The authorities in this respect are very clear in spite of the decision of the Privy Council in 39 Ind App. 1 on which Mr. Ghosh for the appellant relied.

17. These authorities may be briefly noticed. The Full Bench of the Madras High Court is Venkatachalam Pillai v. Sethuram Rao, AIR 1933 Madras 322 (FB). This was a sale deed in respect of a minor's property, executed by his guardian. There was a covenant that in case the vendee sold the property, he should resell it to the minor or his heirs. It was held that the agreement for resale in the sale deed being an executory contract without mutuality was unenforceable by either party in a suit for specific performance irrespective of the question whether the contract was for the benefit of the minor or not. This decision followed the Privy Council decision in 39 Ind App 1 and was explained in another Full Bench decision of the Madras High Court in Raghava Chariar v. Srinivasa Raghava Chatiar, ILR 40 Mad 308 : (AIR 1917 Mad 630) (FB). But even in the decision in AIR 1933 Mad 322 (FB), Sundaram Chetty, J : who delivered the judgment of the Full Bench observed at p. 324 of that report as follows:

'But on a careful perusal of that decision it is clear that the mere fact that a sale or a mortgage is in favour of a minor is not enough to hold that it is valid and enforceable. Where a mortgage or sale has been effected as a completed transaction in favour of the minor and it does not involve the performance of any onerous act by the minor by reason of any contractual obligation in respect of the sale or mortgage, such a sale or mortgage would not be invalid. This is clearly indicated in the following passage on p. 313 (of ILK Mad) : (at p. 634 of AIR) in the judgment of Willis, C. J.:

The question then is whether it makes any difference that the transfer in favour of the minor by way of sale or mortgage is made in consideration of a price paid or a loan advanced by the minor. No doubt, according to their Lordships' decision in such a case, the minor could not bind himself by contract to pay the price or advance the mortgage-money; but when he has done so and the vendor or mortgagor has executed a registered conveyance in his favour, is there any reason why the transfer in his favour should not take effect?'

The Andhra Full Bench decision in Vadakattu Suryaprahasam v. Ake Gangaraju, is reported in (S) AIR 1956 Andhra 33 (FB). It is distinctly laid down there that a contract entered into by a guardian of a Hindu minor for sale or for purchase of immovable property is specifically enforceable against the minor. But the existence of a valid and enforceable contract cannot in itself deprive the Court of its discretionary power to refuse to enforce the contract, if the supervening circumstances obviously affect the interests of the minor. At page 37 Subba Rao, C. J. delivering the judgment of the Full Bench makes the following observations-.

'A minor has no legal competency to enter into a contract or authorise another to do so on his behalf. A guardian therefore steps in to supplement the minor's defective capacity. Capacity is the creation of law whereas authority is derived from the act of parties the limit and extent of his capacity are conditioned by Hindu law. He can only function within the doctrine of legal necessity or benefit. The validity of the transaction isjudged with reference to the scope of his power to enter into a contract on behalf of the minor.'

18. The other decision which requires to be noticed, is Jagdeo Singh v. Bisambar, reported in ILR 1938. Nagpur 41 : (AIR 1937 Nag 186). There Bose, J. lays down that in a suit for specific performance of an agreement to sell it is not necessary that all the persons, agreeing to purchase must be joined as plaintiffs, although it is essential that all the parties to the contract should be before the Court either as plaintiffs or defendants. It is also laid down in that decision that specific performance can be enforced where minors are involved when the agreement is made by the managing member of a joint Hindu family, provided of course the transaction is of such a nature that it would have bound the minors if they had been of age. The learned Judge discussed the Privy Council decision in ILR 39 Cal 232 (PC), and distinguished it on this point.

19. The transaction in this appeal is also of such nature that it would have bound the minors. It is justified for the educational expenses of the minors and the maintenance of their properties. Indeed the appellant cannot say that he is not bound because his whole title depends on this very sale deed to which the vendors and the natural guardians of the minors subscribed.

20. It will be unnecessary to refer to the other decision such as Krishnasami v. Sundarappayyar, ILR 18 Madras 415 and Ramalingam v. Babanambal Ammal : AIR1951Mad431 .

21. We are satisfied that the contract in this case can be specifically enforced because the party asking, for specific performance is not a minor and the party against whom it is sought is also not a minor.

22. The next point of the appellant is that this contract for reconveyance was void for uncertainty, This argument is based on the particular clause in the contract stating that not only Rs. 8000/- is to be deposited but also costs of the execution of the deed and other necessary and indispensable expenses. Mr. Ghosh contends for the appellant that the expression 'other necessary and indispensable expenses' is an uncertain expression. The learned District Judge rightly overruled this objection on the ground that such necessary and indispensable expenses having regard to the expression 'other should be construed ejusdem generis and related to the execution of the deed. In fact not only Rs. 8000/-but an additional sum of Rs. 175/- was deposited in Court by the plaintiff.

23. At one stage Mr. Ghosh has also tried to urge that these costs have not been put in. This argument must fail because no objection was taken in anyof the lower Courts on this point. Indeed no issuewas raised that the plaintiff has not satisfied the condition of the contract for reconveyance by putting in the necessary and indispensable costs. The appellant, there fore, cannot be allowed in the second appeal to raise this point.

24. We are also satisfied that the words 'other necessary and indispensable expenses' is not such an expression that makes the contract so void for uncertainty as to render it incapable of performance. In Fry's Specific Performance of Contracts quoted above at page 181 in Article 382 it is observed:

'The mere fact of indefinite words, such as 'et cetera' being used in a contract does not necessarilymake it too uncertain for performance. Such words may be understood with sufficient certainty by reference to the words to which they are added and the surrounding facts of the case. Again where, by the contract for a lease, the tenant was to do certain specified works, and 'other works' upon the property at a total estimated cost of about 150, and the specified works were suchas would evidently cost nearly that sum, the Court considered the 'other works' to be of such a triflingdescription that their being left undefined was not a ground for refusing specific performance. (Baumann v. James, (1868) 3 Ch. A. 508)'.

25. The last point urged by the appellant is thatthe plaintiff has not deposited within time the sum ofRs. 8000/- and the costs so as to claim specific performance of reconveyance. The contention is the ambiguity in the clause where both the words '4 years' and the words 'from 1360 B. S. to 1362 B.S.' are used as indicating the period of time within which the option toclaim the reconveyance by depositing Rs. 8000/- andcosts was to be exercised. Obviously the period from 1360 to 1362 B. S. is not a period of four years, mequestion now is which is the false description. The words'1362 B.S.' appear twice and it is expressly stated in the deed that it is from the 2nd Magh 1360 B.S. to the 2nd Magh 1362 B.S. The deposit was certainly within that time of 2nd Magh 1362 B.S. which correspondsto the 16th January, 1956, when the suit was filed. The appellant's contention is that the deposit should have been made within four years from the date of the execution of the deed, that is by the 2nd of Magh 1360 B.S. which must have expired on or about the 16thJanuary, 1954. The interpretation put on by the learned district Judge appears to us to be correct. He emphasised that the stipulation as made in the agreement, if taken as a whole, would give a cumulative effect as this that the option was to be exercised not within 2nd Magn 1360 B. S. but within the 2nd Magh 1362 B.S. and this last date as to the exercise of the option was stated in unqualified and in unambiguous term. In other words option was not to be exercised within four years of thedate of the execution of the same, for this period is intended to give usufruct to the appellant who would enjoy the rent, or Income out of the property. It Is appropriate here to recall that the properties in suit were let out to different tenants fetching Income, in fact thiswas one of the reasons why it was alleged by the plaintiff that the whole transaction was really in the nature of a conditional mortgage. But having regard to the fact that the lender appellant did not have a license and having regard to the proviso to Section 58(c) ofthe Transfer of Property Act expressly declaring that

'provided that no such transaction shall be deemedto be a mortgage, unless the condition is embodied inthe document which effects or purports to effect thesale.'

(Which was introduced by way of amendment in 1929) this was done by this device of a sale deed and thereafter a contract for reconveyance.

26. Again the interpretation for which the appellantis contending cannot be made for the simple reasonthat on the principle of construction if there is an ambiguity, it must be resolved against the appellant. Afterall it was the appellant who is executing the contractfor reconveyance. He was executing that contract. Hewas signing the deed contained in the contract. One or the leading principles of construction of deed is thatambiguous words in covenant are to be taken most strongly against the covenantor. (See Norton on Deeds, Second Edition, page 549). This would also be an interpretation which will help the covenant to be performed. Taking, therefore, the construction that is in favour of intending purchaser and against the party contracting and allowing reconveyance to be effected, it must be held that the limit within which the deposit had to be made is 2nd Magh, 1362 B.S. The deposit was made within that time in this case.

27. The last argument on behalf of the appellant was that the time for deposit of the sum of Rs. 8000/-was ambiguous, therefore, this was an uncertain contract and should not be specifically enforced. This was not again a point that was taken in any of the lower courts, indeed the appellant never suggested that it was uncertain on that ground. On the merits of this argument the answer is that on any reasonable interpretation the time is not uncertain and the clause in the contract clearly specifies the flay, the month and the year within which the deposit is to be made. It is unnecessary to repeat the reasons for this interpretation already discussed elsewhere in this judgment.

28. This disposes of all the points raised by the appellant in this appeal.

29. The appeal fails on all the points. The appeal, therefore, must be dismissed with costs. The decree for specific performance of the learned Subordinate Judge directing the appellant to execute the kobala at pontiff's costs in favour of the plaintiff and in default through Court and as confirmed by the learned Additional District Judge is affirmed. The kobala must be executed by the first defendant within a month from the date of receipt of the records in the Court below and in default thereof it will be done through the Court as directed by the learned Subordinate Judge.

30. It remains now to dispose of a connected application previously ordered to be disposed of along with the appeal. The appellant obtained a stay of the decree for specific performance. The decree for specific performance was ordered on the 19th August, 1960. Due to the interim stay so long the appellant has teen enjoying the rents and profits of the property in sun which in the petition of respondent No. 1 is stated to be about Rs. 145/- per month. So for about these last two years from August 1960 a large sum amounting to Rs. 4025/- had been collected by the appellant. This money is claimed in this application by the first respondent. It is this application which was directed to be disposed of along with the appeal.

31. In the circumstances and having regard to the fact that we have dismissed the appeal, the best order on this application will be that the first respondent will be free to make the claim made in this application In appropriate proceedings before the appropriate Court and in taking such proceeding it will be open to the first respondent to claim that the money is rightly due to him, on the ground that the appellant by reason or his obtaining a stay of execution and by reason of having collected all the usufruct In the meantime which should properly belong to the respondent. We only direct this that the amount claimed by the first respondent on this ground should be secured either by the payment by the appellant of this amount or by the appellant securing the first respondent's claim on this account out of themoney that was deposited in Court and which is lying in Court.

32. The application, therefore, is disposed of accordingly. There will be no order as to costs in this application.

N.K. Sen, J.

33. I agree.


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