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Ramanand Agarwalla Vs. Richardson Hooghly Holding Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberF.M.A. No. 105 of 1977
Judge
Reported inAIR1979Cal335,83CWN683
ActsSpecific Relief Act, 1963 - Section 15; ;Code of Civil Procedure (CPC) , 1908 - Order 22, Rule 3(1)
AppellantRamanand Agarwalla
RespondentRichardson Hooghly Holding Ltd. and anr.
Appellant AdvocateNoni Coomar Chakraborty, ;S.B. Mukherjee, ;P.K. Das and ;T.K. Mitra, Advs.
Respondent AdvocateBholanath Sen, ;R.C. Nag, ;Sudipto Sarkar and ;Samar Banerjee, Advs. (for No. 1) and ;Paritosh Mukherjee, Adv. (for No. 2)
DispositionApplication allowed
Excerpt:
- .....the applicants are the heirs and legal representatives of the deceased sole appellant ramanand agarwalla who died during the pendency of the appeal. they have prayed for their substitution in the appeal in place of the deceased sole appellant. the application has been filed within time and the same is in form. the application has been opposed by the respondent no. 1. it is necessary to state certain facts for the purpose of appreciating the contentions made by the respondent no. 1 in opposing the prayer of the applicants for their substitution in place of the deceased sole appellant.2. the said ramanand agarwalla entered into a contract with the respondent no. 1, a foreign company, for the purchase of 7942 ordinary shares of rs. 100/-each which the respondent no. 1 held in.....
Judgment:
ORDER

1. This is an application for substitution. The applicants are the heirs and legal representatives of the deceased sole appellant Ramanand Agarwalla who died during the pendency of the appeal. They have prayed for their substitution in the appeal in place of the deceased sole appellant. The application has been filed within time and the same is in form. The application has been opposed by the respondent No. 1. It is necessary to state certain facts for the purpose of appreciating the contentions made by the respondent No. 1 in opposing the prayer of the applicants for their substitution in place of the deceased sole appellant.

2. The said Ramanand Agarwalla entered into a contract with the respondent No. 1, a foreign company, for the purchase of 7942 ordinary shares of Rs. 100/-each which the respondent No. 1 held in the respondent No. 2, Hooghly Ink Company Limited which is an existing company within the meaning of the Companies Act, 1956. The contract of sale was subject to the approval of the Reserve Bank of India of the sale of the said 7942 shares by the respondent No. 1 to the said Ramanand Agarwalla. It appears that the Central Government, by their letter dated Dec. 24, 1974, approved of the said contract of sale inter alia on the following terms :--

(1) The total holdings of Ramanand Agarwalla and his associates should not exceed 40% of the total equity of the respondent No. 2 company.

(2) The balance shares might be offered to the employees on a rational basis.

(3) The sale price of the said shares should be Rs. 135/- only per share.

The Reserve Bank of India also approved the contract of sale between the said Ramanand Agarwalla and the respondent no. 1 company on the above terms. It further appears that the respondent no. 1 also agreed to sell the said number of shares at Rs. 135/- per share which was one of the conditions for approval of the contract of sale by the Central Government or the Reserve Bank of India. As the respondent No. 1 did not complete the sale as agreed to by it under the agreement for sale, the said Ramanand Agarwalla instituted a suit in the court be-low praying for the specific performance of the contract and also for recovery of damages on account of loss alleged to have been suffered by him for the inaction of the respondent No. 1 to effect the sale in terms of the contract. The present appeal was filed by the deceased sole appellant against order No. 33 dated Sept. 22, 1976 of the Subordinate Judge, Second Court, Alipore discharging the Receiver and also vacating a portion of the order of injunction. The appeal has not yet been heard under Order XLI Rule 11 of the Code of Civil Procedure, During the pendency of the appeal in this Court, the said Ramanand Agarwalla died, and hence this application for substitution.

3. It has been strenuously urged on behalf of the respondent No. 1 that on the death of the sole appellant the right to sue does not survive and, accordingly, his heirs and legal representatives cannot be substituted in his place. Rule 3 (1) of Order XXII of the Code of Civil Procedure provides that where one of two or more plaintiffs died and the right to sue does not survive to the surviving plaintiff or plaintiffs alone, or a sole plaintiff or sole surviving plaintiff dies and the right to sue survives, the Court, on an application made in that behalf, shall cause the legal representatives of the deceased plaintiff to be made a party and shall proceed with the suit. The provisions of Order XXII also apply to appeals by virtue of Rule 11 of Order XXII of the Code of Civil Procedure. Rule 3 (1) requires that before the heirs and legal representatives of the deceased sole appellant can be substituted it should be proved that the right to sue survives. It has been urged by Mr. Sen, learned Advocate appearing on behalf of the respondent No. 1, that as the sanction or approval of the Reserve Bank of India was granted to the said Ramanand Agarwalla, such approval or sanction does not ensure to the benefit of his heirs and legal representatives and, accordingly, the right to sue does not survive. It has been stated already that the suit out of which this appeal arises is a suit for specific performance of contract and for recovery of damages. Section 15 of the Specific Relief Act, 1963 inter alia provides as follows:

'Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by--

(a) any party thereto;

(b) the representative in interest or the principal of any party thereto;

Provided that where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, -his representative in interest or his principal shall not be entitled to specific performance of the contract, unless such party has already performed his part of the contract, or the performance thereof by his representative in interest, or his principal, has been accepted by the other party;' (The other clauses of Section 15 are not necessary for our purpose and accordingly they have been omitted).

It is clear from Clauses (a) and (b) of Section 15 that specific performance of a contract may be obtained not only by any party thereto but also by the representative in interest or the principal of any party thereto unless any personal quality of such party is a material ingredient in the contract or the contract prohibits assignment of the same. It, therefore, follows that the right to obtain specific performance of contract is a heritable right and the legal representatives of any party to such a contract can avail themselves of that right. The right is, therefore, not a personal right and the suit for specific performance of contract is not actio personalis. On the death of the plaintiff in a suit for specific performance of contract his heirs and legal representatives can be substituted in his place inasmuch as the right to sue survives by virtue of Section 15 of the Specific Relief Act. Prima facie, therefore, the applicants are entitled to be substituted in place of the deceased sole appellant. It is true that the approval or sanction was granted by the Reserve Bank of India at the instance of the said Ramanand Agarwalla. It is contended on behalf of the respondent No. 1 that the approval or sanction was granted to Ramanand Agarwalla and on his death the same comes to an end and the legal representatives of the said Ramanand Agarwalla are not entitled to avail themselves of such approval or sanction. Specific performance of contract can be claimed in respect of a contract which is a concluded one. After the said Ramanand Agarwalla obtained the sanction or approval of the Reserve Bank of India for the purchase of the shares of the respondent No. 1 company, the contract became concluded and in view of Section 15 of the Specific Relief Act, we do not find any reason why the right to sue does not survive so far as the legal representatives of the said deceased Ramanand Agarwalla are concerned. By granting the approval in regard to the contract for sale, in our view, the Reserve Bank or the Central Government approved of the proposed sale of shares and not of the personality of the purchaser. Moreover, the terms and conditions on which the approval was made by the Central Government or the Reserve Bank of India permitted the said Ramanand Agarwalla and his associates to purchase 40 per cent of the shares of the respondent No. 1 company. If the approval Was granted only to Ramanand Agarwalla or, in other words, if there had been any prohibition against the purchase of the shares by any person other than the said Ramanand Agarwalla, in that case, under the terms of the approval or sanction the associates of the said Ramanand Agarwalla would not have been permitted to purchase a portion of the total shares of the respondent No. 1 company. In our view, prima facie, the approval ensures to the benefit of the heirs and legal representative of the deceased appellant. It may, however, be recorded that we do not propose to finally decide this point, nor have we decided the same finally. But in our view, the applicants are entitled to be substituted in place of the deceased sole appellant.

4. For the reasons aforesaid, the application for substitution is allowed and we direct that the applicants be substituted in place of the deceased sole appellant in the appeal and the opposite parties Nos. 3 and 4 be added as parties respondents in the appeal, as heirs and legal representatives of the deceased sole appellant.

5. There will be no order as to costs.


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