Abdul Haq vs Mohammad Yehia Khan and others

Das, J.—This appeal arises out of a suit instituted by the appellant for specific performance of an agreement by defendant No. 1 and by defendant No. 2 for self and as guardian of defendants Nos. 3 and 4 to sell certain properties to the plaintiff. The agreement is alleged to have taken place on the 20th August 1916 and the plaint was filed on the 25th September 1916. On the 24th October 1916 the defendants Nos. 1 to 4 sold the properties to defendant No. 7, and defendant No. 7 was added as a party to the suit on the 26th August, 1918. The learned Subordinate Judge has found that there was a valid pre-existing contract to sell the properties to the plaintiff and that defendant No. 7 purchased the properties with notice of the prior contract in favour of the plaintiff; but being of opinion that defendant No. 7, as a co-sharer in all the properties contracted to be sold to the plaintiff, had a right of pre-emption, has declined to give the plaintiff, a decree for specific performance. The view of the learned Subordinate Judge is that though defendant No. 7 is not a purchaser without notice, she is still entitled to defeat the plaintiffs suit on the ground that she had a right of pre-emption in respect of the properties in dispute. In this view the learned Subordinate Judge dismissed the plaintiffs suit for specific performance but has given him a decree for Rs. 605, as against defendants Nos. 1 to 4.

It is, in my opinion, unnecessary for us to express an opinion on the, question which has been discussed at great length by the learned Subordinate Judge, for, in my view, this appeal must fail, first, on the ground that defendant No. 2 as the de facto guardian of defendants Nos. 3 and 4 had no power to convey to the plaintiff the shares of defendants Nos. 3 and 4 in the properties agreed to be sold; and, secondly, on the ground that it is quite impossible for the Court to give the plaintiff a decree for specific performance its against the minors and consequently as against the adult defendants. So far as the first point is concerned, the case of 23 CWN 50 (Privy Council) is directly in point. It is quite true that that was not a case of specific performance but the principle is equally applicable to a case where the de facto guardian has entered into a contract with a third party for the sale of the minor''s property. To direct the contract to be carried into effect as against the minors is to sanction a plain breach of trust on the part of the de facto guardian and this, J apprehend, this Court will not do. The second point is equally clear. The allegation of the plaintiff in regard to the contract is contained in the second paragraph of the plaint which is as follows :

Defendant No. 1 and defendant No. 2 for self and as guardian of defendants Nos. 3 and 4 completed a contract for the sale of the above mentioned shares to the plaintiff on the 20th August. 1916, at Bihar according to the stipulation given below; Rs. 7,500 was fixed as the consideration thereof and Rs. 200 as Salami, in all Rs. 7,700. To complete the transaction it was settled that defendants Nos. 5 and 6 should go to Siwan and do all that may be necessary for the execution of the deed of sale.

I will assume that the contract was a concluded one but the question still remains whether the Court will carry into effect a contract confessedly entered into by a guardian on behalf of the minors. The decision of the Judicial Committee in 16 CWN 74 (Privy Council) is, in my opinion, final and decisive. The question which their Lordships had to consider was whether a contract entered into on behalf of a minor by his manager or guardian and found to be for his benefit, was enforceable by a decree for specific performance at the suit of the ''minor through his manager or guardian; and, in dealing with this question their Lordships said as follows:

They are, however, of opinion that it is not within the competence of a manager of a minor to bind the minor or the minor''s estate by a contract for the purchase of immoveable 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 minor who has now reached his majority cannot obtain specific performance of the contract.

That was a case of contract for purchase; but, in my opinion, no distinction can be drawn between a contract for purchase and a contract for sale. The decision of the Judicial Committee rests on the broader ground that it is quite impossible for the Court to decree specific performance against a minor.

It was, however, argued that though the contract may be unenforceable against the minors, no difficulty arises in the present case as the defendants have conveyed the properties to defendant No. 7 and there is no rule which prevents the Court from directing defendant No. 7 to convey the properties to the plaintiff. The argument is founded on the terms of S. 27 (b) of the Specific Relief Act which provides that;

Except as otherwise provided by the Chapter, specific performance of a contract may be enforced against any other person.

that is to say, against any person other than a party to the contract, "claiming under him" that is to say, claiming under a party to the contract.

by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract.

In my opinion, it is quite impossible to entertain the argument. The operation of S. 27 (b) of the Specific Relief Act is confined to cases where the contracts are in the first instance enforceable as against the parties to the contract. The liability of a person claiming under a party to the contract rests upon the antecedent liability of a party to the contract, and arises by reason of the fact that as such transferee he takes subject to the transferors pre-existing contractual obligation; and where there is no pre-existing contractual obligation, it seems to me that the case entirely fails as against the transferee It is quite clear that you cannot enforce a contract as against a transferee unless the transferee has notice of the original contract. Now notice of the original contract must mean notice of an existing obligation under the contract; and where the contract is itself unenforceable, it seems to me that it is impossible to maintain the view that the contract can be enforced as against a subsequent transferee. In my opinion, the plaintiff''s suit must fail so far as defendants Nos. 3 and 4 are concerned.

The next question is whether the plaintiff is entitled to a decree for specific performance against defendants Nos. 1 and 2 in regard to their shares in the properties agreed to be sold. Now as to this the rule is that the Court will not, as a general rule, compel specific performance of a contract unless it can execute the whole contract. It may, of course, be that the contract, though in form one and entire, is in substance divisible and where the contract is in substance divisible, there is nothing to prevent the Court from carrying into effect that portion of it, (in substance a separate contract), which is capable of being carried into effect. Mr. Abani Bhusan Mukherji strongly contends that the question whether the contract was indivisible or divisible is a question of fact; and that, as the question was not raised in the form in which it has been argued before us we ought not to adjudicate on it but that we ought to remand the case to the Court below for taking evidence. I do not think that Mr. Mukharji is entirely right in saying that the question was not raised by the defendants. The minor defendants in their written statement took the plea that the contract was mot enforceable as against them; but I have no doubt whatever that the question was not argued in the Court below in the form in which it has been argued before us. It seems to have been argued in the Court below that as there was a certificated guardian of the minors appointed by the District Court, the contract for sale without the sanction of the District Judge was unenforceable in law; and that question the learned Subordinate Judge has decided against the defendants. But the question was undoubtedly raised in the written statement of the minors; and the question as to whether a decree for specific performance can be passed against the minors is a question of law In regard to the other question, namely, whether the contract is one and entire or divisible, it is sufficient to say that the plaintiff''s own case in the plaint and in the evidence is to the effect that the contract was one contract and not separate contracts. I have already referred to paragraph 2 of the plaint which is to the effect that there was one contract, one salami and one consideration. It is the plaintiff''s case that the contract between him and the defendants was embodied in a document dated the 1st of September 1916. This document makes it clear beyond all doubt that the contract was one and entire and that under the contract the defendants agreed to sell certain properties, of which they were owners, to the plaintiff for the sum of'' Rs. 7,700. Neither in the plaint nor in Ex. 5, the document of September 1916, is there any specification of the shares of the vendors, nor is it stated how much of the consideration was to go to defendant No. 1, how much to defendant No. 2 and how much to defendants Nos. 3 and 4. The evidence which has been read before us by Mr. Mukharji is conclusive on the question that the contract was one and entire That being so it is quite unnecessary to remand the case for taking fresh evidence, for it is possible for us upon the allegation of the plaintiff himself to decide the question without having recourse to the doubtful propriety of sending the case back to the Court of first instance.

I have said that where the contract is in substance divisible, there is nothing to prevent the Court from carrying into effect that portion of it which in substance is a separate contract and which is capable of being carried into effect. But here again the rule is firmly established that a contract for sale of property in one lot will generally be considered indivisible, for the reason that there is obvious injustice in compelling the purchaser of the entirety to take undivided parts or shares of the estate. Now in the present case the plaintiff having purchased certain specific properties belonging to four persons could not be compelled to take the shares of two of them in those properties. Defendants Nos. 1 and 2 could not be heard to say,

It is true that we contracted to sell not our shares in the property, but certain properties belonging to us and two minors and that we are unable to convey the shares of the minors, but nonetheless you are bound to complete the sale so for as our shares are concerned.

The plaintiff would be entitled to say, if such a case was put forward by defendants Nos. 1 and 2,

I did not contract to purchase your shares but I contracted to purchase certain specific properties of which you together with the minor defendants are the owners.

Such a contention on the part of the plaintiff would, in my opinion be unanswerable; and no Court will force upon the plaintiff shares of the property when he has contracted to purchase the entirety. It is quite true that that is not the attitude of the plaintiff in the present case, and ho, through his learned Vakil, has intimated his willingness to take a conveyance of the shares of defendants Nos. 1 and 2, but a contract to be specifically enforced by the Court must, as a general rule, be mutual, that is to say, such that it might, at the time it was entered into, have been enforced by either of the parties against the other of them. Want of mutuality in the contract is a well-recognized defence to a suit for specific performance, and was at the bottom of the decision of the Judicial Committee in the case of 16 CWN 74 (Privy Council) . The rule is stated in these terms in a recognized work on the subject:

When, therefore, whether from personal incapacity to contract, or the nature of the contract, or any other cause, the contract is incapable of being enforced against one party, that party is, generally, incapable of enforcing it against the other, though its execution in the latter way might in itself be free from the difficulty attending its execution in the former.

(Fry on Specific Performance, page 219.)

The contract was, in my opinion, incapable of being enforced against the plaintiff. That being so the plaintiff is incapable of enforcing it against defendants Nos. 1 and 2.

The exact point was decided by the English Court in Lumley v. Ravenscraft [1895] 1 Q.B. 683 - 64 L.J.Q.B. 441 - 14 R. 347 - 72 L.T. 382 - 43 W.R. 584 - 59 J.P. 277. That was a case where the defendants, an infant and his sister, agreed by their agent to grant the plaintiff a lease of premises in which they were jointly interested. The plaintiff brought an action for specific performance of the agreement, and applied for injunction to restrain the defendants till after the trial of the action leasing the premises to another person. It was held that an injunction ought to be granted only where a case was made out for specific performance and that one of the defendants being an infant the plaintiff was not entitled to specific performance against both of them, nor against the sister as to her interest in the absence of any proof of misrepresentation or misconduct on her part. Lindley, L.J., in delivering the judgment said as follows:

If Moor''s principals were both of age, there would be a complete contract and no difficulty in the case but unfortunately one of the principals is an infant, nineteen years of age, and the agreement is unquestionably an agreement for a lease by the two. It is an agreement by the two with the plaintiff for a lease to him of certain property of which, as it appears, a lease was being granted to the two. What is the law? Specific performance is out of the question. You cannot get specific performance against an infant, and upon the evidence before us no case is made out for specific performance against the other defendant either. This case is not within the exception as to misconduct stated in Price v. Griffith [1851] 1 Deg.M. and G. 80 - 21 L.J.,Ch. 78 - 15 Jur. 1093 and Thomas v. During [1837] 1 Keen 729 - 6 L.J.,Ch. 267 - 1 Jur. 427 but comes within the general rule that where a person is jointly interested in an estate with another person and purports to deal with the entirety specific performance will not be granted against him as to his shares.

It is only necessary to mention that there is no charge of any misrepresentation or misconduct within the meaning of those terms in Price V. Griffith [1851] 1 Deg.M.and G. 80 -21 L.J.,Ch.78- 15 Jur.1093., and Thomas v. Dering [1837] 1 Keen 729 - 6 L.J.,Ch. 267 - 1 Jur.427., as against defendants Nos. 1 and 2 in this case.

It was lastly argued that the question should be decided not on the English Law, but on the terms of Ss. 15, 16 and 17 of the Specific Relief Act. It will be noticed that the general rule adopted in the Act is that, except in cases coming within certain exceptions the Court shall not direct the specific performance of a part of the contract. The general rule is laid down in S. 17 of the Act, the exceptions are enumerated in Ss. 14, 15 and 16 of the Act, It is conceded that S. 14 has no application, but it is contended that the case comes, not within the prohibition of S. 17 but within the exceptions mentioned in Ss. 15 and 16 of the Act. In my opinion, S. 15 has no application whatever to this case. That section applies to a case where a party to a contract is unable to perform the whole of his part of the contract. In the case before us, provided the Court could carry into effect the contract as against the minor defendants, no question would arise as to the ability of defendants Nos. 1 and 2 to perform the whole of their part of it here defendants Nos. 1 and 2, agreed to convey their interests in the disputed properties to the plaintiff. They undoubtedly have an interest in the properties, and they made no representation whatever that they were entitled to the whole interest in the properties. Had they made such a representation, and the contract was concluded on the footing that they were entitled to the whole interest in the properties agreed to be sold. S. 15 would have applied and the plaintiff would be entitled to a decree directing defendants Nos. 1 and 2 to perform specifically so much of their part of the contract as they could perform, provided the plaintiff relinquished all claim to further performance, and all right to compensation, either for deficiency for the loss or damage sustained by him through the default of the defendants. But there is no default in the present case on the part of defendants Nos. 1 and 2, and the whole difficulty has arisen by reason of the fact that defendant No. 2 as the de facts guardian of defendants Nos. 3 and 4 (who are also interested in the properties agreed to be sold) agreed to convey the interest of the minor defendants in the properties to the plaintiff, and to such a case S. 15, in my opinion, is not applicable. I should mention that the case would have stood on a different footing had defendant No. 2 (who is the certificated guardian of defendants Nos. 3 and 4) had acted with the leave of the Court. In entering into the transaction she did not take the permission of the Court; and, so far as the transaction is concerned, she cannot be considered to have acted as the certificated guardian. In my opinion, S. 15 has no application whatever. S. 16, in my opinion, does no more than embody the rule of English Law and the relevant enquiry under S. 18 is, is the contract one and entire, or is it a divisible contract? I have given my reasons for holding that the contract is not a divisible contract. That being so, the general rule must apply and it is quite impossible to give the plaintiff a decree for specific performance as against defendants Nos. 1 and 2.

I would dismiss this appeal with costs. So far as the cross-appeal is concerned, I am quite clear that the plaintiff is entitled to a decree for money as against defendants Nos. 1 and 2; but [am equally clear that he is not entitled to a decree as against the minors. Defendant No. 2 is now dead, and is represented in this appeal by defendants Nos. 3 and 4. The decree passed by the learned Subordinate Judge will be varied by providing that the plaintiff will have a money decree for Rs. 605 with interest at 9 per. cent per annum from the 11th September 1916 up to the 30th April, 1920, with costs as against defendant No 1 and defendants Nos. 3 and 4 as the representatives-in-interest of defendant No 2 and to the extent of the assets of defendant No. 2 in their hinds. As provided by the learned Subordinate Judge the decree will carry interest at 6 per cent, from the 30th April 1930 until realization. Subject to this variation, the cross-appeal fails and is dismissed.

Foster, J.

This is a suit for specific performance of a contract to sell to the plaintiff shares in six revenue estates. Tauzi Nos. 1012, 1016, 1046, 1288, 1157 and 1012 in Saran District. The plaint sets out that defendants Nos. 1 to 4, whose genealogy is given below, owned a share in each of these estates.

On the 20th August, 1916, at Bihar they made a verbal contract, to sell and on the 1st September, 1916, they completed the contract at Siwant by receiving the earnest money and passing to the plaintiff a written receipt.

Defendant No. 6 was an agent of defendant, No. 2 who was said to (sic) half, and defendant No. 7 is a subsequent purchaser of the property by deeds of sale, dated the 24th October, 1916. The latter was made a party defendant before the hearing of the case the only relief sought against her being a declaration of the invalidity of the sale deeds executed in her favour. The main relief, specific performance of contract, is claimed only against defendants Nos. 1 and 2. On the issues which were framed between the parties the learned Subordinate Judge has arrived at the following material conclusions. He finds the alleged contract with the plaintiff proved, the necessity for the contract, a decree threatening serious and permanent injury to the interests of the defendant''s family, is not a matter in dispute. He finds that the subsequent sale to defendant No. 7 is genuine and valid, but that the contract to sell to her (defendant No. 7) was not prior to the contract upon which the plaintiff is suing; and moreover defendant No. 7 purchased with full knowledge of the existence of this contract with the plaintiff. At this point the judgment diverges into a discussion of the twelfth issue, and the judge finds that defendant No. 7 has a right of pre-emption which debars the plaintiff from suing for specific performance in respect of three or four of the six estates: as to the rest of the estates the plaintiff''s fortune was left to the decision of a subsequent suit, if the plaintiff should think fit to bring it. In the result no order was passed upon the claim for specific performance, but defendants Nos. 1 to 4 were made liable for such money as had actually passed hands upon the contract. The plaintiff appeals.

In my view of the arguments in appeal, they fall under five main propositions: (1) the contract is enforceable against the defendants Nos. 1 to 4 (2) it is enforceable against the minor defendants Nos. 3 and 4 (3) it is enforceable at least against defendants Nos. 1 and 2 for what they can convey, (4) at least compensation in money can be obtained against each and all of these four defendants (5) the relief sought against defendant No. 7, a declaration that her purchase is invalid, should be granted.

I proceed to consider these propositions. The contract itself has for the purposes of this appeal been taken to be genuine, the only question being as to its legal effect. To deal with that question, I shall, as briefly as possible, discuss the four propositions Nos. 2 to 5 set out above.

The emergent necessity and the fact that the minors'' mother contracted are argued as reasons for involving the minors in the consequences of the contract. (I may mention here that the defendants are Sunni Mohammedans). The mother if only de facto guardian and not the legal guardian is not competent to dispose of the immoveable property of her infant children: Imambandi v. Mutsaddi (1). In this case it is not denied that the mother defendant No. 2 was the legal guardian of the minor defendants, appointed by the District Judge of Patna, under Act VIII of 1890. Under S. 27 of that Act she could do all acts which are reasonable and proper for the realization, protection or benefit of the minors'' property; but under Ss. 29 and 30 she could not validly mortgage, or charge or transfer any part of the immoveable property of the minors without the previous permission of the Court. The word "previous" is important, for it explains how a contract of sale made by a certificated guardian without the permission of the District Judge has been treated by the Court as "a contract made by a trustee in excess of his powers" and so incapable of being enforced specifically under S. 21 of the Specific Relief Act. Narain v. Aukhoy [1885] 12 Cal. 152. In my opinion the suit for specific performance fails on this ground as against the minors.

The next question is whether the suit is enforceable against defendants Nos. 1 and 2 for what they can convey. Had the defendant Yahia Khan brought a suit to enforce the contract written out by his son on his behalf and now relied on by the plaintiff (Exhibit 5) he would have had either to express his readiness and ability to perform his part of the contract or to admit that that contract could not be performed in its entirety. The contract was for the sale of the shares of defendants Nos. 1 to 4 in the six revenue estates. Now even according to the plaint (paragraph 1) the defendants have concurrent ownership and possession of the properties, which include share in rents and shares in land held in direct possession. It is manifest that no part of the contract stands on a separate and independent footing from any other part, for whichever portion of the property be affected by the decree for specific performance, there will hare to be a partition to ascertain that portion. So I do not consider that S 16 of the Specific Relief Act applies to this case. As to the application of Ss 14 and 15 of that Act, I have found more difficulty. The learned Vakil for the appellants is ready to pay the whole price for such shares as defendant No. 1 (or defendants Nos. 1 and 2) are capable of transferring.

I would not go so far as to say that partial performance in specie cannot be enforced, but in such cases as these the question is whether it can and should be enforced The contract obviously lacks mutuality but, in my opinion, this case can be distinguished in its legal aspects from Mir Sarwanjan''s case (2). In that case there was an absolute lack of mutuality. This case in fact falls into one of the exceptions to the doctrine of mutuality, an exception recognised in sections 14 to 16 of the Specific Relief Act. For a clear exposition of this matter I refer to Halsbury''s Laws of England "Specific Performance" Part II, S. 5. In my opinion, this case is governed by the latter part of S. 15 of the Specific Relief Act.

So I return to the question, what is the suitable remedy in the circumstances of this case 7 In my opinion, the relief to be granted should be restricted to compensation in money, the principle being that contracts should not be enforced to the detriment of the rights of third parties. The third party is Musammat Batul, defendant No. 7. She is a purchaser for value now in possession of the properties. At the time when the contract of this suit was made she was a co-sharer in every one of the six revenue estates, and the plaintiff was a stranger in respect of three, or perhaps four of them. Under the law of pre-emption, therefore, Mt. Batul had on the whole a superior right to purchase. With this view, I record my opinion that specific performance ought not to be granted; but the plaintiff should, in accordance with S. 19 of the Specific Relief Act, be awarded compensation for the breach of the contract. But as the contract would always have been exposed to the superior claims of Mt. Batul as pre-emptrix in respect of a considerable part of its subject-matter I would confine the damages to the amount decreed in the lower Court, namely, the money which actually changed hands. As Mt. Maqbulunnissa is dead, and as there is little or no evidence to show that any part of the money ever reached the minors, I agree with the order propounded by my learned brother.