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CASE NO.: Appeal (civil)  1984 of 2002

PETITIONER: P.C. Varghese                                                    

RESPONDENT: Devaki Amma Balambika Devi & Ors.                        

DATE OF JUDGMENT: 07/10/2005

BENCH: S.B. Sinha & R.V. Raveendran

JUDGMENT: J U D G M E N T

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

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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 ad Respondent Nos1 and 5 were able  to meet the expenses therefor 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

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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 [AIR  1947 PC 182] and T.V. Kochuvareed and Another vs. P. Mariappa Gounder  and Others [AIR 1954 Travancore-Cochin 10], 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

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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 :

"\005Even 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

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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\027                 (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  [(1994) 4 SCC  18], it was held :

"\005The 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\005"  

        In Rachakonda Narayana vs. Ponthala Parvathamma and Another

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[(2001) 8 SCC 173], Khare, J., the  learned Chief Justice as he then was,  observed : "\005Thus, 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 1‘42], (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 [(1990) 3 SCC 517] 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.  [(2004) 6 SCC 537].  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

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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 (1982) 1 SCC 525]

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,

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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.