SUPREME COURT OF INDIA
P.C. Varghese
Vs
Devaki Amma Balambika Devi
Appeal (Civil) 1984 of 2002
(S.B.Sinha and R.V.Raveendran)
07/10/2005
S. B. SINHA, J.
The First Respondent herein is the wife of K.R. Narayana Pillai (Respondent
No.5). Respondent Nos. 2 and 3 are daughters of the First and the Fifth
Respondent herein. The Fourth Respondent was their minor daughter. 15 cents out
of the land in question measuring 19 cents were obtained by Respondent Nos.1 to
3 by reason of a partition under deed No.1598 of 1973. As Respondent No.4 was
born subsequent to the execution of the said deed of partition, she became
entitled to a one-fourth share in 15 cents which comes to 3.75 cents. The
balance 4 cents absolutely belonged to the First Respondent on the death of one
Narayana Pillai and Devaki Amma. Respondent Nos.1 to 3 and 5 agreed to sell the
said property to the Appellant herein, wherefor an agreement of sale was
executed on 13.09.1980 in his favour. In terms of the said agreement, a sum of
Rs.5, 05, 000/- was fixed as total consideration; and a sum of Rs.10, 000/- was
received by the Respondents by way of advance.
The agreement contained a condition that the Respondents would obtain requisite
permission from the appropriate court for sale of the minor's share therein.
Such permission was to be obtained within a period of three months which was
also the period fixed for performance of the terms of the agreement. However,
an extension thereof had been granted. The Appellant made several requests to
the Respondents to perform their part of contract. According to him, the
Respondents had deliberately been delaying the disposal of the application for
obtaining the aforementioned permission. A letter was also sent to the Fifth
Respondent requesting him to get the sale deed executed at least with regard to
the shares of Respondent Nos.1 to 3 on receipt of proportionate amount of
consideration and to execute the sale deed relating to the minor's share after
such permission was obtained.
The Respondents, however, did not perform their part of contract. The Appellant
deposited a sum of Rs.5, 00, 000/- in his name and in the names of his wife and
children in fixed deposit No.28517-57-81 dated 03.08.1981 in the Federal Bank
Limited. He also served a registered notice through his advocate asking the
Respondents to execute the sale deed, in respect whereto a reply was sent by
the Respondents stating that the sale deed can be executed only after obtaining
the permission from the Court.
The Appellant filed the suit against the Respondent Nos. 1 to 5 herein, inter
alia, for a decree of specific performance of contract in respect of the said
agreement of sale in respect of the entire 19 cents. He also made an
alternative prayer, as per para 23C praying that if specific performance could
not be granted in regard to entire extent, he may be allowed to take a sale
deed in respect of the share of Defendants 1 to 3 and may be allowed to recover
possession of that much property from defendants through court
It is, however, not in dispute that during the pendency of the suit, the
application filed for obtaining permission for sale of minor's share was
dismissed. The Appellant thereafter filed an application for amendment of
plaint praying for substitution of prayer 'C'. The application for amendment
was allowed and amended prayer 'C' reads as under:
"C-If for any reason this Hon'ble Court finds prayers A & B cannot
be allowed as such, the plaintiff may be allowed to take a sale deed of the
share of defendants 1 to 3 in the plaint schedule property, through court, in
the name of his wife and children as mentioned above. And for that purpose pass
a preliminary decree to divide the aforesaid 15 cents in the schedule property
separating the 3/4th share of the defendants 1 to 3 from the 1/4th share of the
minor 4th defendant by metes and bounds and allowing plaintiff to recover
possession of the four cents belonging to the first defendant and 3/4th share
of defendants 1 to 3 in the 15 cents on payment by the plaintiff of the
consideration agreed in the agreement for sale less the proportionate value of
his minor's share." *
The Respondents in their written-statement raised a contention that the Civil
Court having refused to grant permission to sell the minor's share, performance
on their part became impossible. It was further contended that the purpose for
agreeing to sell the property was for meeting the marriage expenses of the
Third Respondent but Respondent Nos1 and 5 were able to meet the expenses
therefore without selling the property, the very purpose thereof became futile.
The learned Trial Judge in view of the rival contentions of the parties framed
as many as seven issues. Issue Nos. 5 and 7 read as under:
"(5) Is not a plaintiff entitled to specific performance of the
agreement of sale dated 13.09.1980? (7) Whether the Specific Performance of the
part of the agreement is allowable?" *
The suit filed by the Appellant herein was decreed by the Trial Judge in the
following terms:
"In the result, a preliminary decree for partition is passed on the
following terms:
(1) The 3/4th share of the property of the defendants 1 to 3 shall be
partitioned from the 15 cents of property which belongs to defendants 1 to 4 as
also the 4 cents absolutely belongs to the first defendant.
(2) The plaintiff is allowed to apply for passing a Final Decree for effecting
the partition of 3/4th share in the 15 cents of property.
(3) The plaintiff is also allowed to apply for issue of a Commission to effect
partition of >share of defendants 1 to 3 in 15 cents of property and to
ascertain the value of 1/4th share of the minor 4th defendant in the 15 cents
of property.
(4) The defendants 1 to 3 are directed to execute the sale deed for their 3/4th
share in 15 cents plus 4 cents when they will be allotted their shares in the
final decree on receiving the sale consideration minus the value of the share
of the minor 4th defendant which was ascertained in the Final Decree
Proceedings within two months from the date of passing the Final Decree.
(5) The plaintiff is directed to deposit the sale consideration as per the
terms of the contract deducting the proportionate value of the minor's share
within two months from the date of the final decree.
(6) In case defendants 1 to 3 failed to execute the sale deed for the property
allotted to them in the final decree within two months from the date of passing
final decree after paying the proportionate sale consideration.
(7) The plaintiff is allowed to get the document executed for 19 cents of
property as scheduled in the plaint as stated above through court and plaintiff
is also entitled to get delivery of that property from the defendant in
execution of this decree.
(8) In the circumstances of the case both parties are directed to suffer their
respective costs." *
The Original Defendant Nos.4 and 5 did not prefer any appeal against the said
judgment and decree. The Respondent Nos.1 to 3 herein only preferred an appeal.
A cross-appeal was also filed by the Plaintiff- Appellant. The High Court
allowed the appeal preferred by Respondent Nos.1 to 3 herein holding that the
contract being an integrated one, the conditions mentioned therein as regard
obtaining the necessary permission from the Civil Court relating to minor's
share was an essential term for execution of the contract and since such
permission had not been granted, the entire contract failed. The Appellant is,
thus, before us.
As Respondent Nos. 4 and 5 were not parties to the appeal before the High Court,
they were not impleaded as parties; subsequently an application for impleading
them was filed. The said application was allowed. However, an application has
been filed by the said added Respondents contending that they have
unnecessarily been impleaded as parties. Mr. John Mathew, the learned Senior
Counsel appearing on behalf of the Appellant, would submit that having regard
to the facts and circumstances of this case, the High Court committed a
manifest error in misreading and misinterpreting the agreement of sale dated
13.09.1980. Section 12 of the Specific Relief Act, the learned counsel would
contend, enables the court to grant a decree in respect of a part of contract
in a case where party to a contract is unable to perform the whole of his part
of it. He contended that the High Court, therefore, wrongly reversed the
judgment and decree of the Trial Court relying on Delsukh M. Pancholi vs. The
Guarantee Life and Employment Insurance Co. Ltd. and Others 1947 AIR(PC)
182] (referred) and T.V. Kochuvareed and Another vs. P. Mariappa Gounder and
Others [AIR 1954 Travancore-Cochin 10] (distinguished), holding that the
condition as regard obtaining permission from the Civil Court was a condition
precedent.
Mr. Mathew would urge that the findings of the High Court cannot be sustained
in view of the fact that out of 19 cents only 3.75 cents came to the share of
the minor and, thus, the provision of Section 12(3) of the Specific Relief Act
was clearly attracted. Mr. V.R. Reddy, the learned Senior Counsel appearing on
behalf of the Respondent Nos.1 to 3, would submit that the contract in question
is a contingent one and in view of the fact that application for obtaining
permission to sell the share of the minor was sought for and refused, the
entire agreement became unenforceable in law. In any event, the learned counsel
would contend, the discretionary relief under Section 20 of the Specific Relief
Act should not granted in favour of the Appellant herein.
Mr. T.L.V. Iyer, the learned Senior Counsel appearing on behalf of the added
Respondents, (Respondent Nos.4 and 5), would submit that Respondent Nos. 4 and
5 have unnecessarily been added in the instant case. The property belonged to
Respondents Nos.1 to 4. Respondent No.5 being the father of Respondent No.4,
who was a minor at the relevant time, executed the agreement on her behalf. The
said agreement was entered into by the Respondent Nos. 1 to 3 on their own
behalf and by Respondent No.5 as the guardian of the minor Respondent No. 4. In
terms of the said agreement, the Respondents agreed:
(i) To satisfy the purchaser about their title in respect of the property and
also clear any encumbrance certificate, if found on verification;
(ii) Ascertain the extent of the property by measuring it and if there was any
deficiency, agree for deduction of proportionate consideration;
(iii) Put up a wall separating the boundary at the entrance,
(iv) Change the names and enter new names in revenue records;
(v) Comply with all formalities which they were required to do under the law;
(vi) Obtain guardian and ward certificate, clearance certificate, permission of
Town Planning Authority etc.;
(vii) Secure the amount of consideration payable to the minor in terms of the
guardian and ward certificate which was to be obtained on application filed by
Respondent No.5;
(viii) Receive the balance consideration and on the date specified by the
Appellant, appear before the Sub-Registrar and register the deed of sale.
It was further stipulated that in the event, the Respondents failed to register
the sale deed in terms of the said agreement, the Appellant would be entitled
to deposit in the court the balance consideration after adjusting the amount of
advance; file a suit and obtain a decree for specific performance. We fail to understand
as to how the agreement for sale can be said to be a contingent contract, as
was submitted by Mr. Reddy. The agreement nowhere states that in the event the
permission to sell the minor's share is not obtained within the period
specified therein, the same shall become invalid or otherwise unenforceable in
law. The application for grant of permission to sell the minor's share, as
noticed hereinbefore, was rejected only during the pendency of the suit.
It may be true that the agreement was to be performed within a period of three
months, but it was extended. The Appellant herein not only in the suit but also
even prior thereto asked the Respondents herein by a notice dated 23.03.1981
(Ex. P2) to execute a deed of sale in relation to the shares of Respondent
Nos.1 to 3 herein i.e. excluding the share of the minor, stating:
"Even now I stick on to this suggestion and am prepared to purchase the
remaining portion of the property minus the minor's share and is prepared to
purchase the minor's share also after obtaining the permission from court.
It is further strange to see that in your letter under reference you have only
invited my attention to the aforesaid suggestion of mine without specifically,
unambiguously stating whether you are prepared the suggestion and if so on
which date the document can be executed for the remaining share of the property
after deducting the minor's share. So kindly inform me whether you accept the
aforesaid suggestion and if so, on which date we can execute the document. In that
case let the court take its own time to grant the permission certificate and
after you obtain the said certificate from the court, I will purchase the
minor's share also. Further I request you to extend the period of agreement in
writing." *
In reply to the said notice, the Respondent No.5 contended that as the share of
the Fourth Respondent was not demarcated, the Appellant will have to wait till
the required documents from the authorities are obtained. Thereafter, another
legal notice was issued on 31.07.1981 asking the Respondents to execute the
sale deed in his favour and his nominee failing which a legal proceeding shall
be initiated for specific performance of the said agreement for sale. It is not
in dispute that the Appellant was all along ready and willing to perform his
part of contract.
Sub-section (3) of Section 12 of the Specific Relief Act,
1963 (for short "the Act") was enacted with a view to meet
such eventualities when the whole of the contract cannot be performed, by the
vendor. It reads as under:
"(3) Where a party to a contract is unable to perform the whole of his
part of it, and the part which must be left unperformed either-
(a) Forms a considerable part of the whole, though admitting of compensation in
money; or
(b) does not admit of compensation in money; he is not entitled to obtain a
decree for specific performance; but the court may, at the suit of the other
party, direct the party in default to perform specifically so much of his part
of the contract as he can perform, if the other party
(i) in a case falling under clause (a), pays or has paid the agreed
consideration for the whole of the contract reduced by the consideration for
the part which must be left unperformed and a case falling under clause (b),
[pays or had paid] the consideration for the whole of the contract without any
abatement; and
(ii) In either case, relinquishes all claims to the performance of the
remaining part of the contract and all right to compensation, either for the
deficiency or for the loss or damage sustained by him through the default of
the defendant." *
The said provision has been enacted for the benefit of the purchaser and, thus,
cannot operate to his detriment. We may notice that under the old Specific Relief
Act, the Plaintiff was not only required to relinquish his claim of specific
contract as regard that part of the contract which cannot be performed but also
was required to pay the entire amount of consideration; whereas in terms of
Section 12(3) of the new Specific Relief Act, 1963
he is now required to pay the amount of consideration proportionately.In Sardar
Singh vs Krishna Devi (Smt.) and Another [ 6]
(referred), it was held :
"The house being divisible and the appellant being not a consenting party
to the contract, equity and justice demand partial enforcement of the contract,
instead of refusing specific performance in its entirety, which would meet the
ends of justice" *
In Rachakonda Narayana vs. Ponthala Parvathamma and Another [ 38] (referred), Khare, J., the learned Chief Justice as
he then was, observed :
"Thus, the ingredients which would attract specific performance of the
part of the contract, are: (i) if a party to an agreement is unable to perform
a part of the contract, he is to be treated as defaulting party to that extent,
and (ii) the other party to an agreement must, in a suit for such specific
performance, either pay or has paid the whole of the agreed amount, for that
part of the contract which is capable of being performed by the defaulting
party and also relinquish his claim in respect of the other part of the
contract which the defaulting party is not capable to perform and relinquishes
the claim of compensation in respect of loss sustained by him. If such
ingredients are satisfied, the discretionary relief of specific performance is
ordinarily granted unless there is delay or laches or any other disability on
the part of the other party." *
In Surinder Singh vs. Kapoor Singh (Dead) through LRs. and Others [ 2005
(5) SCC 142] (referred), (wherein Dharmadhikari, J. was a member) a three-
Judge Bench of this Court on a reference made on the purported conflict in
Kartar Singh vs. Harjinder Singh [ ] (referred) and Rachakonda Narayana
(supra), opined :
"In this case, the Division Bench of the High Court passed a decree of
specific performance of contract relying on or on the basis of a decision of
this Court in Kartar Singh.". *
Strong reliance, however, has been placed by Mr. Reddy on HPA International
etc. vs. Bhagwandas Fatehchand Daswani amd Others etc. [ ] (referred).
Therein, Dharmadhikari, J. in the facts and circumstances of the case held:
"70. There was one integrated and indivisible contract by the vendor to
convey full interest in the property i.e. his own life interest and the
interest of the reversioners with sanction of the Court. As the Court had not
granted the sanction, the contract could not be specifically enforced. The
lesser relief of transfer of life interest was not claimed within a reasonable
time after the vendor had intimated that the contract, as agreed for full
interest, was not possible of performance. We find that neither equity nor law
is in favour of the plaintiff vendee." *
Therein, in the agreement not only the interest of the vendor in presenti but
also the interest of the remaindermen or reversioners after his death was the
subject matter of contract. The agreement was furthermore subject to the
passing of the vendor's title to the property and of the vendor's right to sell
the entire interest, present and future in the property by the purchaser's
advocate. We may also notice that in that case one of the terms contained in
the agreement for sale was:
"6. In case sanction of the Court is not accorded as aforesaid, this
agreement shall forthwith stand cancelled and the vendor shall forthwith return
the advance amount of rupees twenty-five thousand to the purchaser." *
A perusal of the said decision clearly shows that conduct of the plaintiff
therein was such which precluded him from obtaining a decree for specific
performance of contract. In the aforementioned facts and circumstances of the
case, it was held that recession of contract due to non- grant of sanction by
the court within the stipulated period was not an act of breach of contract on
the part of the vendor. The said decision has no application in the facts and
circumstances of this case.
In Dalsukh M. Pancholi (supra), two questions were posed by the court : (a) was
the term "subject to the court's approval" an essential term of the
agreement?, and (b) if it was essential, by whose default did it fail? Therein,
in the facts of the case, the Privy Council opined that the approval of the
attaching court was insisted on as a necessary condition for effecting the
sale, for without it the title to the property was not at all safe. Once such
condition was found to be essential one, the contract was held to be a
composite contract. However, in that case, the vendor therein was not in a
position to convey his own interest in the property without the court's
sanction and the contract. In the facts and circumstances of the case, the
Defendant Nos.1 to 3 could transfer their properties having definite share in
favour of the Appellant. The decision of Travancore and Cochin High Court in
T.V. Kochuvareed (supra), has also no application in the fact of the present
case.
The submission of Mr. Reddy to the effect that this Court should not exercise
its discretionary jurisdiction is stated to be rejected. No such contention has
been raised before the High Court. Even otherwise it has not been shown, having
regard to the conduct of the parties, as to why such a discretionary
jurisdiction should not be exercised. An alternative plea of refund of earnest
amount and damage cannot itself be a bar to claim a decree for specific
performance of contract.
The Trial Court not only granted a decree for specific performance of contract
but also a preliminary decree for partition. The submission of Mr. Reddy to the
effect that the learned Trial Judge committed a serious error in granting a
decree for partition along with a decree for specific performance of contract
need not detain us long as in view of Section 22(1)(a) of the Act a decree for
partition and separate possession of the property can be granted in addition to
a decree for specific performance of contract. As in this case, the Appellant
herein in view of amended prayer 'C' relinquished his claim in respect of the
property belonging to the minor - Respondent No. 4, he also prayed for a decree
for partition and such a prayer having been allowed, no exception thereto can
be taken. In any event, the said question has not been raised by the
Respondents before the High Court at all. Section 22 enacts a rule of pleading
that in order to avoid multiplicity of proceedings, the plaintiff may claim a
decree for possession and/ or partition in a suit for specific performance.
Even though strictly speaking, the right to possession accrues only when a suit
for specific performance is decreed, indisputably such a decree for possession
and/ or partition is prayed for in anticipation of the grant of prayer for
specific performance of contract. [See Babu Lal Vs. M/s. Hazari Lal Kishori Lal
and Others] (Referred).
The only person who could question the said decree for partition was
Respondent No. 4. As noticed hereinbefore, a decree as against him has attained
finality as she did not preferred any appeal thereagainst. The said decree for
partition, therefore, has attained finality. No decree for specific performance
of contract, however, has been passed as against the Respondent Nos. 4 and 5.
They are, however, otherwise bound by the decree passed by the learned Trial
Judge. Therefore, they are also proper parties, though not necessary parties. #
Before parting with this case, however, we may observe that the manner in which
the decree has been passed by the learned Trial Court is open to question
inasmuch as a relief in terms of Section 22 of the Specific Relief Act being
incidental or ancillary to the main relief of specific performance of contract
and, furthermore, being in addition thereto, ordinarily, a proceeding for grant
of a final decree for partition should be initiated after the sale deed in
terms of the decree for specific performance of contract is executed and registered
and not vice-versa.
For the reasons aforementioned, , the impugned judgment cannot be sustained,
which is set aside accordingly. The Appeal is allowed. No costs.