Panchoo vs Moorat Singh

A.P. Sen, J.—This appeal arises out of a suit for specific performance.

The relevant facts, shortly stated, are as follows. The plaintiff is a minor. He entered into a contract to purchase for a consideration of Rs. 2,312 the defendant''s half-share in 2.48 acres of Bhumiswami lands. The terms of the contract were embodied in writing, Ex. P-1, dated 1st June 1959. The defendant received Rs. 2,100 as part payment of the price in pursuance of the contract To the plaintiff''s claim for specific performance, the defendant pleaded inter alia that the contract was void and unenforceable being hit by section 165(4)(b) of the Madhya Pradesh Land Revenue Code, 1959. That plea was raised because the suit for specific performance was instituted on 9th November 1961 i.e., after the 1959 Code had been brought into force. That plea of his has, however, not prevailed in any of the Courts below, with the result that a decree for specific performance has been passed in favour of the plaintiff

The only questions of substance that were urged before me were; first, that an agreement for sale with a minor being of an executory nature without any mutuality is un-enforceable by the minor plaintiff in a suit for specific performance, irrespective of the question whether the contract was for the benefit of the minor or not and secondly, that a contract for sale of Bhumiswami lands, in contravention of section 165(4)(b) of the Madhya Pradesh Land Revenue Code, 1959, is void ab-initio and therefore, not capable of being specifically enforced.

In this appeal, the defendant has applied under Order 6, Rule 17 of the CPC for permission to amend the written statement and plead that the contract was un-enforceable for want of mutuality. He has also applied under Order 41, Rule 2 of the Code, for leave to urge that ground in appeal. At the hearing of the appeal, I heard both the parties on the applications. The plaintiff naturally opposed the applications by saying that the effect of allowing them would change the nature of the defence, but I do not think so. The question raised is a pure question of law and I accordingly allow both the applications.

The plea regarding invalidity of the contract, as contravening section 165(4)(b) of the Madhya Pradesh Land Revenue Code, 1959, cannot be accepted. True, a transfer in contravention of the section is void ab-initio being hit by section 23 of the Contract Act, as being against public policy, see, Sukhsen and another v. Shrawan Kumar alias Khemchand S.A No. 906 of 1967, decided on the 23rd Sep. 1969; Soma v. Beerchand S.A No. 556 of 1965; decided on the 23rd July 1970 and Sukhlal v. Mahant Brijbhushan Das and another S.A No. 554 of 1965, decided on the 28th March 1970. But that provision has no application to the facts of the present case. The contract in question was entered into on 1st June 1959, i.e., prior to the coming into force of the Madhya Pradesh Land Revenue Code, 1959. There was no corresponding section prohibiting such transfers in the Madhya Pradesh Land Revenue Code, 1954, which was then in force.

That brings me to the next question as to whether an executory contract for purchase of property, entered into on behalf of a minor by his natural guardian is coforceable, In Mir Sarwarjan v. Fakhruddin Mohomed Chowdhuri ILR 39 Cal. 232 PC, the guardian of a minor entered into a contract for purchase of certain immoveable property. The minor, after attaining majority, sued for specific performance. Their Lordships of the Privy Council stated the law as follows:--

"......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."

In Mir Sarwarjan''s case, the contract was validly entered into and was for the benefit of the minor and was even ratified by him. Nevertheless, the suit failed by application of the doctrine of mutuality. Since then, there has been a long catena of decisions of different High Courts laying down that an executory contract for the purchase of immoveable property entered into by a guardian on behalf of the minor was not capable, of specific performance, at the instance of either party, see, for instance, Venkatachalam Pillai v. Sethuramrao ILR 56 Mad 433 (FB); per Niyogi, J. in R.S. Pandit Krishna Chandra Sharma v. Seth Rishabh Kumar 22 MPLC 121 : ILR 1940 Nag 55 and per Grille, C.J. and J. Sen, J. in Ramrao v. Suganchandra and another 32 MPLC 89 : ILR 1946 Nag 116, The view in Venkatachalam Pillai''s case was that the validity or enforceability of such a contract does not depend upon a question whether it was conducive to the benefit of the minor or not.

The doctrine of mutuality was, however, departed from by their Lordships of the Privy Council in their subsequent decision in AIR 1948 95 (Privy Council) In that case before the Privy Council, the mother as guardian of her minor son had entered into an agreement for sale of the minor''s lands. The intended purchaser was put in possession of the property pursuant to the contract. The minor, however, sued by next friend for recovery of possession of the property. The defendant purchaser thereupon relied on the doctrine of part performance embodied in section 53A of the Transfer of Property Act. The Madias High Court held that section 53A could not be invoked by the defendant as the minor plaintiff was not a ''''transferor" as contemplated by that section. This decision was reversed by the Privy Council. Referring to the power of the guardian to enter into the contract of sale, their Lordships of the Privy Council observed as follows :--

"Their Lordships entertain no doubt that it was within the powers of the mother as guardian to enter into the contract of sale of 29-11-1935, on behalf of the respondent for the purpose of discharging his father''s debts, and that, it the sale fad been completed by the execution and registration of a deed of sale, the respondent would have been bound under Hindu Law."

Their Lordships concluded by saying-

"It would appear, therefore'', that the contract in the present case was binding upon the respondent from the time when it was executed. If the sale had been completed by a transfer, the transfer would have been a transfer of property of which the respondent, and not his mother, was the owner. If an action had been brought for specific performance of the contract, it would have been brought by or against the respondent and not by or against his mother."

It may be noticed that in reaching that conclusion, the Privy Council approved of the following passage in Pollock and Mulla''s Indian Contract and Specific Relief Acts, Edn 7, p. 70 where the learned authors state that in the case of a contract entered into on behalf of a minor by his guardian:

"...............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, further, 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 has been a sharp conflict of opinion as to the effect of their Lordships later decision in Subrahmanyam''s case. In N.B. Sitarama Rao Vs. Venkatarama Reddiar and Others, a Full Bench of the Madras High Court held that the decision in Mir Sarwarjan''s case and those decisions that followed it, should be confined to cases of purchase of property and not in respect of agreements to sell. Viewed in that light, there was no difficulty in reconciling Subrahmanyam''s case with Mir Sarwarjan''s case, at least so far as the contracts for purchase entered into by the guardian of the minors are concerned. In Suryaprakasam v. Gangaraju AIR 1956 AP 33, a Full Bench of the Andhra Pradesh High Court, however, took a different view and it held that the decision in Subrahmanyam''s case had the effect of impliedly overruling Mir Sarwarjan''s case as according to the later decision, a contract entered into by a guardian of the Hindu minor for sale or purchase of immoveable property is specifically enforceable against the minor.

As a result of this conflict between the two different High Courts. there was a difference of opinion between two learned Judges of this Court. In Abdulsattar Vs. Ismail and Others, heirs of Abdulrehman (deceased), . Newaskar, J., on a consideration of principle deducible from the aforesaid decisions of the Privy Council, read in the light of the two Full Bench decisions referred to above, was inclined to the view that the decision of the Privy Council in Mir Sarwarjan''s case is not over-ruled by the later decision in Subrahmanyam''s case and he held that where a guardian of a minor enters into a contract for purchase of immoveable property, the contract is one which is not binding upon the minor and consequently, neither the minor nor the vendor can specifically enforce the same. On the other hand, Shrivastava, J., struck a discordant note and held that the authority of Mir Sarwarjan''s case stands considerably shaken by the later decision in Subrahmanyam''s case, while conceding that it was normally difficult to support such a contract, entered into by the guardian of a minor, on the ground of benefit to the minor. That controversy, however, now stands concluded, so far as I am concerned, by the decision of Tare and Bhave JJ., in Ramchandra Vs. Manikchand and Another, . After a careful consideration of all the decisions governing the subject learned Judges have held that Newaskar J.''s view in Abdul Sattar''s case expresses the correct legal position and that Subrahmanyam''s case had not the effect of over-ruling the dictum laid down by the Privy Council, in Mir Sarwar Jan''s case, at least so far as the contract for purchase of immoveable property entered into by the guardian of a minor is concerned. In view of this, the plaintiff''s claim for specific performance must fail on the ground that there is want of mutuality.

It is an accepted principle that in order that a contract may be specifically enforced, there must be mutuality between the parties. A minor cannot compel specific performance, for the Court could not compel specific performance on his promise against him. In Hanbury''s Modern Equity, 8th edition, pp. 547-550, the learned author adverts to the controversy which now ranges around the question as to whether "want of mutuality" has a place among the various defences to a suit for specific performance. He questions the validity to Fry''s proposition that there must be mutuality between the parties by saying, "Is there such a rule ? " It is interesting to note that in Anson''s Law of Contract, 22nd edition, p. 515, that learned author states that want of mutuality can not be a defence where the minor himself has completed his part of the contract. In other words, where the entire purchase price is paid through the guardian of a minor, and nothing remains to be done on his part, the equitable doctrine of want of mutuality cannot be pleaded as a defence in a suit for specific performance. In this case, however, the minor plaintiff had still to pay Rs. 212 towards the balance of the price. According to the dictum of the Privy Council in Mir Sarwarjan''s case, it was not within the competence of his guardian to bind the minor or his estate by a contract for this. The question is whether the defendant could have filed a suit for specific performance against the minor plaintiff. The answer to that question is obvious. That being so, the want of mutuality is a complete answer to the plaintiff''s claim.

These questions are now of an acadamic interest. In the first place. the doctrine of mutuality stands abrogated by section 20(4) of the Specific Relief Act, 1963. It provides that the Court shall not refuse to any party specific performance of a contract for purchase or sale of property merely on the ground that the contract is not enforceable at the instance of the other party. Secondly, the law laid down by the Privy Council in Subrahmanyam''s case, that contracts for sale of minor''s property, entered into by his natural guardian for his benefit, can be specifically enforced if the contract is for legal necessity or benefit to the estate has also lost much of its utility. The Hindu Minority and Guardianships Act, 1956, prohibits any alienation of the minor''s property without sanction of the Court. Lastly, the prohibition against transfer of Bhumiswami land contained in section 163(4)(b) of the Madhya Pradesh Land Revenue Act, t959, no longer exists.

The result, therefore is that the appeal succeeds and is allowed. The plaintiff''s suit for specific performance is dismissed, but he shall be entitled to a refund of Rs. 2,100, the consideration paid by him, together with interest thereon @ 6 % per annum, from 1st June 1959, the date of contract, till realisation which shall remain a charge on the suit property. The costs of this appeal shall be borne by the parties as incurred. The costs of the Courts below shall, however, be paid as directed.