S. Nagulal Rao vs Medam Jayaramaiah and Others

C.V.N. Sastri, J.

This Letters Patent Appeal arises out of a suit for specific performance of an agreement of sale dated 25-2-1980 executed by the first defendant in favour of the plaintiff agreeing to sell the suit property, which comprises an extent of Ac. 0.22 cents of land at the rate of Rs. 2,100/- per cent. The agreement is purported to be executed by defendants Nos. 1 and 7, but it is actually signed by the first defendant only. The property is, admittedly, the joint family property of the defendants. Defendants Nos. 1 to 6 are the children of the 7th defendant. The father of defendants Nos. 1 to 6 and the husband of 7th defendant died intestate leaving behind him defendants Nos. 1 to 7 in the suit, besides another daughter by name Ramalingeswaramma and also his mother Saradamma, who were not impleaded as parties to the suit. The case of the plaintiff is that the first defendant is the Manager of the joint family of the defendants and that he executed the suit agreement for and on behalf of the family for their family benefit and necessity, representing that a sale deed would be executed by all the sharers. At the time of the agreement, a sum of Rs. 5,000/- is said to have been paid by the plaintiff to the first defendant as advance and it was agreed that a registered sale deed should be executed on or before 25-4-1980. As the defendants failed to execute the sale deed inspite of a notice got issued by the plaintiff on 19-4-1980, the suit was filed for specific performance.

The first defendant filed a written statement admitting the execution of the agreement, but denying that he was the Manager of the Joint Family or that the agreement was executed by him as Manager of the Family. He further pleaded that when the plaintiff approached him to sell the suit site, he (1st defendant) informed him that he has no right to sell the suit land, as there was a partition in which the suit land was given to the 6th defendant towards her Pasupu-Kumkuma and that the 7th defendant, who is the guardian of 6th defendant, can alone represent the minor and that the plaintiff induced him to sign the agreement representing that he will convince the 7th defendant and obtain her signature on the agreement of sale later. The first defendant also denied the receipt of the sum of Rs. 5,000/- as advance from the plaintiff. He further pleaded that the agreement, which is inchoate, is unenforceable.

The third defendant on one hand and the defendants-6 and 7 on the other filed separate written statements, which were adopted by the defendants 2,4 and 5, contending inter alia that the suit property was allotted to the 6th defendant toward sher Pasupu-Kumkuma and marriage expenses and that the defendants-1 to 5 and 7 have no right in the same, that the 7th defendant is not at all aware of the agreement of sale and she never agreed for the same and she did not receive any advance, that there is no necessity to sell the land and that the alleged agreement said to have been executed by the first defendant is not valid and binding on them.

The trial Court found that the partition pleaded by the defendants was not established, that the first defendant did not execute the agreement of sale (Ex.A-1) as manager of the family and that the plaintiff did not also prove that Ex.A-1 was executed for the necessity of the joint family. The trial Court, however, found that the first defendant executed Ex.A-1 and received Rs. 5,000/- by way of advance from the plaintiff. On the said findings, the trial Court held that the plaintiff was not entitled to the relief of specific performance. Though the trial Court found that the first defendant received a sum of Rs. 5,000/- by way of advance, no decree for return of the said sum was granted to the plaintiff, since the plaintiff did not claim any alternative relief in the plaint and observed that it is open to the plaintiff to take separate proceedings against the first defendant for return of the advance. In the result, the trial Court dismissed the suit with costs.

On appeal, the learned single Judge agreed with the trial court''s view that the plaintiff is not entitled to a decree for specific performance as the first defendant was not empowered to enter into the agreement of sale for the entire suit property, when his share comes to less than Ac. 0.04 cents, which is very negligible. The learned single judge, however, granted a decree for refund of advance amount of Rs. 5,000/- with interest thereon at the rate of 12% per annum from the date of agreement.

Not satisfied with the decree granted by the learned single Judge, the plaintiff has preferred this Letters Patent Appeal, seeking the primary relief of specific performance of the agreement. There is no appeal by the first defendant against the decree for Rs. 5,000/- granted against him.

In this appeal, Sri. K.V. Satyanarayana, the learned counsel for the appellant, did not make any serious attempt to challenge the findings of the trial court and the learned single Judge. He has, however, mainly contended that the plaintiff is, at least, entitled for a decree for specific performance in respect of the first defendant''s share in the suit property, inasmuch as it was found that the first defendant has executed the agreement of sale and received a sum of Rs. 5,000/- by way of advance. In support of the said contention, the learned counsel for the appellant-plaintiff has drawn our attention to the provisions of Section 12 of the Specific Relief Act and he has also placed reliance on the judgment of the supreme Court in Kartar Singh Vs. Harjinder Singh and others, . He has further submitted that even though the plaintiff did not seek this relief either in the suit or in the first appeal, he is not precluded from doing so now and that it is open to him to restrict his claim at any stage of the proceedings. For this purpose, the learned counsel for the appellant has placed reliance on the decision of the Supreme Court in Kalyanpur Lime Workers Ltd. Vs. State of Bihar and Another, . For the proposition that even though the agreement is not signed by the 7th defendant, it can be enforced a least against the first defendant, who has executed it, the learned counsel for the appellant has relied upon a decision of Federal Court in AIR 1949 211 (Federal Court) ; a Judgment of the Division Bench of Punjab and Haryana High Court in Kapur Singh v. Surinder Singh and Ors. 1994 (1) SCC 777; a decision of Rajasthan High Court in Chhatar Singh Vs. Arjun Singh, and also a decision of Kerala High Court in Smt. T.K. Santha and Others Vs. Smt. A.G. Rathnam and Others, .

On the other hand, Mr. T.S. Anand, the learned counsel for the respondents, has submitted that this question was not raised either in the trial court or before the learned single Judge and it cannot be permitted to be raised for the first time in the Letters Patent Appeal; that the relief of specific performance being an equitable and discretionary relief, there are no grounds whatsoever to interfere with the discretion exercised by the trial Court as well as the learned single Judge in this behalf. He has also pointed out that as a matter of fact, in the trial Court the plaintiff expressed his unwillingness to take a sale deed for the share of the first defendant the same was recorded by the trial Court in Paragraph-11 of its Judgment and as such, the plaintiff cannot be permitted to reagitate this question in the L.P.A. In support of his contentions, learned counsel for the respondents placed reliance on a decision of the Division Bench of this Court in M. Veera Raghaviah Vs. M. China Veeriah and Another, and an un-reported judgment of a Division Bench of this Court in L.P.A.No. 148 of 1989, dated 20-11-1995. He has also placed reliance on the decision of the Madras High Court in Subramani Vs. Kannappa Reddiar and Others, ; and the decision of Mysore High Court in Pujari Narasappa and Anr. v. Shaik Hazrat and Ors. AIR 1960 Mys 59. He has further submitted that the agreement cannot be enforced even as against the first defendant, as he executed the same on the understanding that unless and until the 7th defendant also signs the same, the same will not be enforceable and the question whether the agreement is enforceable against some of the joint promissors is one of intention of the parties. For this proposition, the learned counsel for the respondents placed reliance on the decision of the Madras High Court in Sethu Parvathy Ammal Vs. Bajji K. Srinivasan Chettiar and Others, .

The two questions, which arise for decision in this Letters Patent Appeal, . therefore, are:-

(1) Whether the agreement of sale, Ex. A-1, is not enforceable even against the first defendant?

(2) Whether a decree for specific performance can be granted in favour of the plaintiff at least for the share of the first defendant in the suit land?

As regards the first question, the various authorities cited at the bar clearly lay down the principle the even though the agreement is not signed by all the joint promissors, it can be enforced against the person or persons executing the same unless the intention of the parties was that the agreement should not be enforced at all unless and until all the promissors sign the same. The question, therefore, is one primarily of the intention of the parties and the burden of proof clearly lies on the person, who wants to avoid liability. In the instant case, both the trial court as well as the learned single Judge found that the first defendant executed Ex.A-1 agreement and received a sum of Rs. 5,000/- as advance. These findings are not seriously challenged. The specific case of the first defendant that he did not receive the sum of Rs. 5000/- as advance has been disbelieved by the trial court as well as the learned single Judge. The first defendant also failed to establish that it was the intention of the parties that unless the7th defendant signs the agreement, the agreement cannot be enforced even against him, although he has signed it and received a sum of Rs. 5,000/- as advance. We, therefore, hold on the first question that the agreement, Ex.A-1, is valid and binding on the first defendant and it can be enforced against him, even though it was not signed by the 7th defendant.

Coming to the more important question whether a decree for specific performance can be granted in favour of the plaintiff at least, for the share of the first defendant in the suit land, it is necessary to notice Section 12 of the Specific Relief Act, which reads as under:

"12. Specific Performance of Part of Contract:-

(1) Except as otherwise herein after provided in this section, the Court shall not direct the specific performance of a part of a contract.

(2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value and admits of compensation in money, the Court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.

(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 in a case falling under Clause (b), pay or has 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.

(4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part.

Explanation:- For the purposes of this Section, a party to a contract shall be deemed to be unable to perform the whole of his part of it if a portion of its subject-matter existing at the date of the contract has ceased to exist at the time of its performance."

Sub-section (3) to Section 12 of the Specific Relief Act, 1963 (for short "the present Act") corresponds to Section 15 of the Specific Relief Act, 1877 (for short ''old Act''). But there is one difference between the two provisions. Whereas u/s 15 of the old Act, the party seeking specific performance of a part of a contract was required to pay the entire sale consideration stipulated under the contract, u/s 12 of the present Act, the specific performance of a part of the contract can be granted on payment of proportionate consideration, provided the plaintiff relinquishes all claims to the performance of the remaining part of the contract and all rights to compensation either for the deficiency or for the loss or damage sustained by him in the default of the defendant. In Kartar Singh v. Harjinder Singh and Ors. (1 supra), the property in question was the joint property of brother and sister, each having half a share therein. The brother contracted to sell the entire property including his sister''s share, but the sister refused to accept the agreement. The Supreme Court held in that case that a decree for specific performance in respect of the brother shalf share in the property could be granted in favour of the plaintiff and the provisions of Section 12 of the present Act are not attracted to the case as it was not a case of the performance of a part of the contract but of the whole of the contract so far as the contracting party is concerned. The said decision of the Supreme Court is distinguishable on facts.

In the instant case, the property is the joint family property and the share of the first defendant is not clearly specified in the agreement. Further, two of the sharers are not impleaded as parties to the suit and there also seems to be a dispute whether the paternal grand-mother of defendants 1 to 6 is entitled for a share in the property, as the defendants have taken the plea in the written statements that she is not entitled for a share in the property. The defendants have also pleaded that there was an earlier partition in which the suit property was allotted to 6th defendant, though the alleged partition has been disbelieved, It cannot be therefore said that the first defendant contracted to sell any specified share held by him in the property, under the suit agreement.

The Full Bench Judgment of the Madras High Court in Baluswami Aiyar Vs. Lakshmana Aiyar and Others, also does not apply to the facts of the instant case, as the first defendant was not held to be the Manager of the joint family and as he did not execute the agreement in his capacity as Manager of the family.

It is, no doubt, held in Kalyanpur Lime Works Ltd., v. State of Bihar and Anr. (2 supra) and in T.K.Shanta''s case (6 supra) that it is open to the plaintiff to relinquish a part of his claim at any stage of the litigation, including the appellate stage and that he can seek a decree for specific performance for a part of the property as provided u/s 15 of the old Act (Section 12(3) of the present Act). But in the instant case, it is seen from Paragraph-11 of the Judgment of the trial Court that the plaintiff was not prepared even at the arguments stage to take a sale deed regarding the share of the first defendant and on the other hand, he insisted on the execution of a sale deed for the entire property by defendants 1 to 7.

In Govinda Naicken and Anr. v. Apathsahaya Iyer AIR 1915 Mad 305 a Division Bench of the Madras High Court held that the Court will not lend its sanction to a transaction devoid of legal effect and that the specific performance of a contract, which could not be validly entered into and which will involve another dispute, cannot be granted. In Bolla Narayana Murthy Vs. Cannamaneedi Madhavayya and Another, it was held that the plaintiff cannot claim relief u/s 15 of the old Act as a matter of right, since it is a matter for the discretion of the Court, and the High Court of Madras declined to interfere with the discretion exercised by the trial court in that behalf, especially as the plaintiff did not ask for such an alternative relief in the plaint.

It is, held in Dinanath Sarma Kataki Vs. Gour Nath Sarma Kataki and Others, by the Calcutta High Court that when a Court is able to discover an equitable relief to which the party is entitled, it would be well advised to allow the plaintiff, where the defendant had been so obviously in default to take advantage of any such equitable relief to which he is entitled under the law, and if necessary to treat his pleadings as amended for that purpose.

In an unreported Judgment, dated 20-11-1995 in L.P.A.No. 148 of 1989, a Division Bench of this Court declined to grant relief u/s 12 of the present Act, holding that where the plaintiff did not originally pray for specific performance of a part of the contract, he cannot subsequently be permitted by way of amendment to claim such a relief.

After the conclusion of the arguments in this appeal, the learned counsel for the appellant-plaintiff has filed a Memo dated 23-1-1996 praying for the relief u/s 12(3) of the present Act for a decree for specific performance in respect of the right, title and interest of the first defendant in the suit property and relinquishing all the claims to further performance and all rights to compensation either for the deficiency or for the loss or damages sustained by the plaintiff for default of the first defendant with regard to unperformed part of the contract. In the said memo, the appellant-plaintiff also expressed his readiness and willingness to pay the whole contractual amount of Rs. 46,200/- after deducting the sum of Rs. 5,000/-which was already paid as advance.

A counter-affidavit has been filed by the first respondent-first defendant in opposition to the said memo, stating that the suit property is not capable of being divided into convenient plots, as it has only a frontage of 42'' facing the road and that it is not feasible to separate four cents out of Ac.0.22 cents providing a right of passage and that even if he were to execute a sale deed conveying his interest in the suit schedule property, the plaintiff-appellant has to file a separate suit for partition and separate possession of his share and it is highly doubtful whether in the partition action he will be able to get separate possession of Ac.0.04 cents in this plot of land. It is further stated that the present offer made by the plaintiff is not a bona fide offer and it is made only because the value of the suit property has now gone up several times.

Having regard to the fact that the plaintiff-appellant expressed his unwillingness in the trial court to take a sale deed for the first defendant''s share and insisted on specific performance being granted for the entire property, and having regard to the fact that the first defendant''s share in the suit schedule property cannot be ascertained with certainty in this proceeding in the absence of the other interested persons mentioned above and also having regard to the fact that in any case, the first defendant''s share comes to a very small extent of about Ac.0.04 cents, we are not inclined to interfere with the discretion exercised by the trial court and the learned single Judge in refusing to grant the relief of specific performance to the plaintiff in this case.

For the above reasons, the Letters Patent Appeal fails and is accordingly dismissed. There will however be no order as to costs.