Ayyappan Ezhuthachan vs Antony and Others

Kader, J.—Defendants 10 to 13, 15 to 19 and additional Defendant No. 20, the legal representative of the 14th Defendant, arc the Appellants. The Plaintiff instituted the suit for specific performance of Ext. P-3, an agreement to sell the property of minors, executed by the first Defendant, father and natural guardian of the minors, on August 4, 1966 in favour of the Plaintiff, and for recovery of possession. The first Defendant did not turn up for executing the sale deed as agreed to. Thereupon the Plaintiff sent a notice on August 5, 1966 to the first Defendant; but, in the meanwhile, a sale deed Ext. D-1 was executed by the 9th Defendant, the mother, who is not the natural or legal guardian of the minors, in respect of the suit property in favour of Defendants 10 to 19.

The suit was contested by Defendants 10 to 19 and they mainly contended that they are not aware of Ext. P-3 agreement, that it is not true that the first Defendant executed such an agreement on 4th August 1966, that this agreement was brought into existence after Defendants 10 to 19 obtained the sale deed in question and that the 9th Defendant is their natural guardian. It was also contended that these Defendants are bona fide purchasers.

The learned Munsiff found that Ext. P-3 is genuine and valid and was executed by the 1st Defendant in favour of the Plaintiff, that the proposed sale under Ext. P-3 is more beneficial to the minors, that the contesting Defendants cannot be considered to be bona fide purchasers for value without notice of Ext. P-3, that Ext. D-1 sale deed executed by the mother is void and that the Plaintiff is entitled to a decree for specific performance and recover possession of the suit property with mesne profits at the rate of Rs. 10 per mensem from Defendants 10 onwards.

On appeal by Defendants 10 to 19, the lower appellate court confirmed the findings of the trial court and dismissed the appeal.

Sri V. Sankara Menon, learned advocate appearing for the Appellants, urged the following points in support of the appeal:

(1) Ext. P-3 is not genuine and has not been properly proved.

(2) The Appellants are bona fide purchasers without notice of Ext. P-3.

(3) Ext. P-3 agreement is unenforceable for want of mutuality of contract.

(4) Ext. P-3 agreement is in violation of Sub-section (1) of Section 8 of the Hindu Minority and Guardianship Act.

(5) Ext. P-3 is invalid in the absence of previous permission of the court to execute a sale deed.

(6) Under Sub-section (3) of Section 8 of the Hindu Minority and Guardianship Act, the Appellants who claim under the minors are entitled to challenge the validity of Ext. P-3.

Point Nos. 1 and 2. -- It was argued that there is over-writing over the date in Ext. P-3, indicating that the date was corrected and this circumstance would clearly show that this document was fraudulently created subsequent to the execution of Ext. D-1 assignment deed in favour of the Appellants. There appears to be some over-writing over the date; but this has been explained by the scribe, P.W.2. On this ground alone this document cannot be rejected as a false or fabricated one. According to the Plaintiffs, this document was executed by the first Defendant on August 4, 1966, as natural guardian of the minors agreeing to sell the property for a consideration of Rs. 700. An amount of Rs. 200 was received by the first Defendant towards the sale consideration from the Plaintiff on July 29, 1966 and another amount of Rs. 10 was received on the date of execution of Ext. P-3. These facts are stated in Ext. P-3. It was for discharging the debt of Rs. 200 charged on the property, as Kuttan Ezhuthassan was pressing for the same, and also for purchasing a suitable property for the residence of the minors that the first Defendant agreed to sell the property to the Plaintiff. There was an agreement between the first Defendant on the one side and P.W.3 and his wife on the other to purchase an item of property for the minors with the balance consideration available after discharging the debt and this sale deed also was to be executed on 5th August 1966. P.W.1, the Plaintiff, has sworn to all these facts and his evidence is fully corroborated by P.W.2, who wrote Ext. P-3, and P.W.3, one of the attestors in Ext. P-3. As agreed, P.W.1 as well as P.W.3 had come to the office of the scribe, P.W.2, on 5th August 1966; but the first Defendant did not turn up. P.W.2 has stated during cross-examination that the correction of the date was done by him then and there at the time of the execution of Ext. P-3. The first Defendant has not denied the execution of Ext. P-3. He filed a suit as guardian of the minors for setting aside Ext. D-1 sale deed against Defendants 10 onwards. In Ext. P-5, certified copy of the plaint in this suit, he has categorically admitted the execution of Ext. P-3 on 4th August 1966 and the receipt of part consideration as alleged. The case of the Appellants is also that Ext. D-1 was executed for the purpose of discharging the debt charged on the property and for purchasing another property for the residence of the minors. The circumstances disclosed in the evidence of D.W.1 lend support to the case of the Plaintiff that Ext. D-1 is a collusive transaction. The suit property having an extent of 13 3/4 cents was sold to the Appellants for an amount of Rs. 400 while the Plaintiff offered to purchase the same for Rs. 700. There was necessity for the sale of the property and the proposed sale in favour of the Plaintiff was more advantageous and beneficial to the minors than the sale under Ext. D-1 in the light of the evidence on record, it is difficult to hold that the Appellants are bona fide purchasers without notice of Ext. P-3 agreement. The courts below duly considered the evidence on all these points and as a fact found that Ext. P-3 is genuine and duly executed by the first Defendant, that there was necessity for the sale of the property, that the proposed sale under Ext. P-3 was more beneficial to the minors and that Defendants 10 to 19 had notice of Ext. P-3 agreement and are not bona fide purchasers. No adequate reason or compelling ground has been made out to interfere with these concurrent findings of fact. It may also be noted that Defendants 1 to 9 did not contest the suit.

Point No. 3. -- Sri Sankara Menon very strenuously contended citing a number of decisions that, before a suit for specific performance can be decreed there should be mutuality of contract between the parties and that a minor cannot be bound by the agreement executed by his/her guardian on his/her behalf. It was relying upon the doctrine of mutuality laid down by Privy Council in Mir Sarwarjan v. Fakruddin Mahomed Chowdhuri I.L.R.Cal. 232 that the counsel stressed that Ext. P-3 is unenforceable for want of mutuality of contract. It was found in this case that it was not within the competence either of the Manager of the minor''s estate or of the guardian of the minor, to bind the minor or the minor''s estate by a contract for the purchase of immovable property; that as the minor was not bound by the contract, there was no mutuality; and that consequently the minor could not obtain specific performance of the contract. In Subrahmanyams case . Their Lordships of the Privy Council referred to, with approval the following passages from Pollock and Mulla''s Indian Contract Act and Specific Relief Act, Edn. VII at page 71:

It is, however, different with regard to contracts entered into on behalf of a minor by his guardian or by a manager of his estate. In such a case it has been held by the High Courts of India, in cases which arose subsequent to the governing decision of the Privy Council, that the contract can be specifically enforced by or against the minor if the contract is one which it is within the competence of the guardian to enter into on his behalf so as to bind him by it, and, farther, if it is for the benefit of the minor. But if either of these two conditions is wanting, the contract cannot be specifically enforced at all.

There is conflict of opinion among the various High Courts on the question whether this decision viz., Subrahmanyams case overruled the rule laid down in Mir Sarwarjan''s casel I.L.R.Cal. 232 . Some of the High Courts took the view that the decision in Subrahmanyams case has clearly overruled the principle laid down in Mir Sarwarjan''s case ILR 39 Cal. 232. Some others are of the view that this decision has the effect of overruling the rule laid down in Mir Sarwarjan''s case ILR 39 Cal. 232 while few others held that this has not overruled the doctrine enunciated in Mir Sarwarjan''s case I.L.R.Cal. 232 . Relying on the decision reported in N.B. Sitarama Rao Vs. Venkatarama Reddiar and Others, the learned advocate for the Appellants contended that the rule laid down in Mir Sarwarjan''s case I.L.R.39 Cal. 232 is still good law and that after the passing of the Hindu Minority and Guardianship Act, 1956, this rule has become all the more forceful. I may say, at once, that the rule laid down in Mir Sarwarjan''s case I.L.R.Cal. 232 is not applicable to the facts of the present case and the same has lost all its vigour and importance after passing of the Hindu Minority and Guardianship Act, 1956 and the Specific Relief Act, 1963. Anyhow, in fairness to the learned Counsel, I shall briefly refer to the decisions cited by him. In Sitarama Rao v. Venkatarama A.I.R.1956 Mad 261 a Full Bench of the Madras High Court held that Subrahmanyams case has not the effect of overruling the principle laid down in Mir Sarwarjan''s case ILR Cal. 232 . In Ramchandra Vs. Manikchand and Another, after referring to a number of decisions of various High Courts on the point, a Division Bench of the Madhya Pradesh High Court observed:

The view expressed by Govinda Menon, J. in N.B. Sitarama Rao Vs. Venkatarama Reddiar and Others, , with which Nevaskar, J. concurred, expresses the correct position and that Subrahmanyam''s case, 75 Ind. App. 115 : Subrahmanyams case had not the effect of overruling the decision in Mir Sarwarjan''s case (1912) 39 Ind. App. 1 : ILR Cal. 232(supra) at least so far as the contracts for purchase entered into by the guardian of the minors are concerned.

The learned Counsel also cited the decision reported in Singara v. Ibrahim Baig A.I.R.1947 Mad 94 and contended that there is difference between an executed contract and executory contract and that an executory contract entered into on behalf of a minor cannot be enforced. This decision was rendered relying upon the doctrine of mutuality laid down in Mir Sarwarjan''s case I.L.R.Cal. 232. In Sitarama Rao''s case A.I.R.1956 Mad 261 the case relied on by the counsel for the Appellants, Govinda Menon, J. (as he then was), held that the proper way of looking at the question is that the rules of Hindu law by which the guardian of a Hindu minor, can sell the minor''s estate for necessity or benefit have not in any way been abrogated or rendered doubtful by the decision in Mir Sarwarjan''s case I.L.R.Cal. 232 and that so far as Hindu minors are concerned, there is no difficulty in holding that the guardian of a Hindu minor is competent to enter into a contract of sale of the minor''s property if it is for the necessity and benefit of the minor or the minor''s estate. In N.B. Sitarama Rao Vs. Venkatarama Reddiar and Others, Govinda Menon, J. (as he then was), sought to distinguish Subrahmanyams case from Mir Sarwarjan''s case ILR Cal. 232 on the ground that in the latter case it was an agreement to purchase a property for a minor, whereas in the former it was a case of an agreement to sell the property.

In Mir Sarwarjan''s case I.L.R.Cal. 232 the parties were Muslims and were governed by Mahomedan Law and admittedly the manager or guardian in that case was incompetent to represent the minor, whereas in Subrahmanyams case the minor was a Hindu who was governed by Hindu Law. The position of a guardian of a Hindu minor is, to some extent, different from that of a guardian of a Muslim minor. Although the decision in Mir Sarwarjan''s case I.L.R.Cal. 232 was cited in Subrahmanyams case . Their Lordships did not refer to that in the judgment. The reason for this may, perhaps, be that Their Lordships of the Privy Council were considering in Subrahmanyams case the powers of a guardian of a Hindu minor to alienate his properties. In Ramchandra Vs. Manikchand and Another, the Division Bench observed that the guardian of a Hindu minor could validly transfer his property, if it was for legal necessity or benefit of the estate of the minor. A Full Bench of the Andhra Pradesh High Court in Suryaprakasam v. Gangaraju AIR 1956 AP 33 held that a contract entered into by a guardian of a Hindu minor for sale or purchase of immovable property is specifically enforceable against the minor. There is a plethora of decisions to the effect that under the Hindu law, necessity and benefit are the essential criteria governing contracts entered into by a guardian for sale of minor''s property.

The Specific Relief Act (Act 1 of 1877) has been repealed and a new Specific Relief Act (Act 47 of 1963) has been passed. Sub-section (4) of Section 20 of Act 47 of 1963 clearly states that "the court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party". The case on hand is governed by the provisions contained in the Specific Relief Act, 1963. In this connection, it is worthwhile to reproduce the following observations made by the Law Commission in recommending insertion of Sub-section (4) to Section 20 of the Specific Relief Act, 1963:

There is still however scope for application of the rule in Sarwarjan''s case 16 CWN 74 (supra) in the case of contracts for purchase of property on behalf of the minor which cannot be said to be for the benefit of the minor. We do not consider it necessary to import the doctrine of mutuality into our codified law of specific performance to cover such cases. On the contrary we could do away with the doctrine in Sarwarjan''s case by inserting in Section 22 (of the old Act) a provision embodying the law stated in the American Restatement as follows:

The fact that the remedy of specific enforcement is not available to one party is not sufficient reason for refusing it to the other party.

See Radheshyam Kamila Vs. Sm. Kiran Bala Dasi and Others, . The contention that the contract is vitiated and has become unenforceable for want of doctrine of mutuality has therefore no merit or substance in the light of the express provisions contained in Section 20(4) of Act 47 of 1963. It could also be seen even on the basis of the rulings cited by the counsel for the Appellants, that the rule in Mir Sarwarjan''s case I.L.R.Cal. 232 does not apply to the facts of the present case, which has to be decided on the basis of the provisions in the Hindu Minority and Guardianship Act, 1956.

Point Nos. 4, 5 and 6. -- These points can be conveniently considered and discussed together. Section 8 of the Hindu Minority and Guardianship Act reads thus:

Powers of natural guardian.

The natural guardian of a Hindu minor has power, subject to the provisions of this section, to do all acts which are necessary or reasonable and proper for the benefit of the minor or for the realisation, protection or benefit of the minor''s estate; but the guardian can in no case bind the minor by a personal covenant.

The natural guardian shall not, without the previous permission of the Court,

(a) mortgage or charge, or transfer by sale, gift, exchange or otherwise, any part of the immovable property or the minor, or

(6) lease any part of such property for a term exceeding five years or for a term extending more than one year beyond the date on which the minor will attain majority.

Any disposal of immovable property by a natural guardian, in contravention of Sub-section (1) or Sub-section (2), is voidable at the instance of the minor or any person claiming under him.

No Court shall grant permission to the natural guardian to do any of the acts mentioned in Sub-section (2) except in case of necessity or for an evident advantage to the minor.

* * * *

The learned Counsel for the Appellants contended that there is prohibition in Sub-section (1) of Section 8 of the Hindu Minority and Guardianship Act that a guardian can in no case bind the minor by a personal covenant and that there is personal covenant in every sale of property and therefore Ext. P-3 is invalid and unenforceable. I am unable to agree with the counsel that Ext. P-3 contains a personal covenant as contemplated in Sections 8(1) of the Act. It was then contended that although an agreement to sell property does not come u/s 8(2) of the Act, previous permission of the court is necessary and that Ext. P-3 executed without the previous permission of the court is invalid in the eye of law. There is no plea taken by the Appellants in their written statement that the execution of Ext. P-3 is in violation of Section 8(1) or (2) of the Act on any of the grounds now alleged. It is not enough that the Defendant in a suit for specific performance merely denies the execution of the contract, but should set forth all the grounds and circumstances under which he or she attacks the legality and executability of the contract in the pleadings. The Defendant must raise by his pleadings all matters which show the suit not to be maintainable, or that the transaction was either void or voidable in point of law, and all such grounds of defence as, if not raised, would be likely to take the opposite party by surprise. The provision contained in Section 8(1) of the Act that the guardian can in no case bind the minor by a personal covenant is nothing new and it was there in the old Act also. Apart from these, even if it is assumed, without admitting, that the agreement in question has violated the provisions of Section 8(1) or Section 8(2) of the Act, it cannot be held that the transaction is void. Sub-section (3) of Section 8 of the Act clearly states that "any disposal of immovable property by a natural guardian, in contravention of Sub-section (1) or Sub-section (2), is voidable at the instance of the minor or any person claiming under him." Therefore, a transaction entered into in contravention of the above mentioned sub-sections, viz., Sub-sections (1) or (2) of Section 8 of the Act, can be avoided at the instance of the minor or any person claiming under him. It was pointed out on behalf of the counsel for the opposite side that the Appellants are not competent and have no right to question the validity of the transaction under Ext. P-3, because the sale under Ext. D-1 is void. Though it was alleged in the written statement that the first Defendant was not taking care of the minor children and that the 9th Defendant is the natural guardian, there is no acceptable or reliable evidence in support of this contention. The evidence on this point was discussed by the courts below and the contentions in this regard were rightly rejected. Under the Hindu Minority and Guardianship Act, the father of the minor children is the natural guardian of the minors and it is only in the absence of the father or when he is disqualified to become the natural guardian. u/s 11 of the Act, no person shall be entitled to dispose of or deal with the property of a minor and the power of disposal of the minor''s property is only with the natural guardian. This court in Thomas v. Gopala Pillai 1968 KLT 388 while considering some of the relevant provisions of the Act held that, by virtue of Sections 6, 8 and 11 of the Hindu Minority and Guardianship Act, the natural guardian of a Hindu minor boy is firstly the father and after him the mother; that the power of disposal of the minor''s property is only with the natural guardian and not with a de facto guardian and that the mother''s alienation is, therefore, void and that the person who did not get any such right under such a void document has no locus standi to challenge a document executed by the minor''s father. Ext. D-1 was executed by the mother of the minors, at a time when the father of the minors was alive and was not disqualified and therefore, Ext. D-1 is void, and the Appellants, who are now claiming rights in the disputed property on the basis of Ext. D-1 cannot be said to be persons claiming under the minors, as no rights have been passed over or created in their favour under the said document. It is seen from paragraph 21 of the judgment of the lower appellate court that the first Defendant obtained permission of the court for selling the suit properties as guardian of the minors, in accordance with the provisions contained in Section 8(2) of the Act.

In Radheshyam''s case (7) it was held that the doctrine of mutuality will not defeat a contract for specific performance in view of the express provisions contained in Sub-section (4) of Section 8 of the Hindu Minority and Guardianship Act. In Bhupal v. Manik Chand 1968 KLT 388 after referring to and discussing the decisions in Hunoomanprasad Pandey v. Mt. Babocee Munrai Kunweree (1856) 6 Moo. Ind. App. 393 Mir Sarwarjan v. Fakruddin Mahomed Chowdhury I.L.R Cal. 232 Subrahmanyams case Kalyanpur Lime Workers Ltd. Vs. State of Bihar and Another, and other decisions, it was held that the true test of enforceability of a minor''s contract is not the want of mutuality but the competence of the guardian, legal necessity or benefit to the minor or his estate and that a Defendant denying merely the factum of contract and not alleging its unenforceability in law must be held bound by the pleadings and be precluded from raising the legality or validity of the contract. (See Section 9 of the Specific Relief Act, 1963 and Rules 2 and 8 of Order VI of the Code of Civil Procedure). On the evidence it has been found that the first Defendant, the father, is a competent person to execute Ext. P-3. Ext. P-3 contract was more advantageous and beneficial to the minor than Ext. D-1 and that there was necessity for the sale of the property of the minor. In view of the provisions contained in Sub-section (4) of Section 20 of the Specific Relief Act, 1963, a court cannot refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party. Nothing has been brought out to show that the provisions contained in Sub-sections (1) or (2) of Section 8 of the Hindu Minority and Guardianship Act have been violated. On a consideration of the entire facts and circumstances of the case, I think, the specific performance of the contract involved in this case appears to be for the benefit of the minors. None of the grounds urged on behalf of the Appellants is sustainable.

This second appeal, therefore, fails and is hereby dismissed with costs.