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PETITIONER: JAI NARAIN RAM LUNDIA

       Vs.

RESPONDENT: KEDAR NATH KHETAN AND OTHERS.

DATE OF JUDGMENT: 31/01/1956

BENCH: BOSE, VIVIAN BENCH: BOSE, VIVIAN IMAM, SYED JAFFER AIYAR, N. CHANDRASEKHARA

CITATION:  1956 AIR  359            1956 SCR   62

ACT: Execution-Power of transferee Court-Decree for specific per- formance-Reciprocal conditions indissolubly linked together- Alteration in a material particular, if permissible-Code  of Civil Procedure (Act V of 1908), ss. 47, 42, or. 32(1).

HEADNOTE: An  executing court cannot go behind a decree so as to  vary its terms and when the obligations it imposes on the parties are reciprocal and inseverable, rendering partial  execution impossible, the decree must be executed wholly as it  stands or  not at all.  This is particularly true of a  decree  for specific  performance  where the party who  seeks  execution must satisfy the executing court that he is in a position to perform the obligations which the decree imposes on him. That  in cases where the identity or substance of  what  the decree  directs a party to give to the other is in  dispute, the  executing court alone has the power to decide it  under s. 47 of the Code of Civil Procedure and under s. 42 of  the Code the powers of the court executing a decree on  transfer are  identical  with  those of the court  which  passed  the decree. That although the remedy provided by O. XXI, r. 32(1) of the Code  of  Civil  Procedure is available in  execution  of  a decree  for specific performance, it can be used only  by  a person  entitled to execute the decree and if, by reason  of his own incapacity to perform his part, he is precluded from seeking   execution,   0.  XXI,  r.  32(1),  can   have   no application. Consequently,  in  a  case where, as  in  the  present,  the defendant   sought   to  execute  a  decree   for   specific performance of a contract but was himself unable to  perform one  of  the obligations the decree imposed  on  his  party, namely, to transfer five annas share in a partnership  firm, for  the  reason  that  the firm  had  ceased  to  exist  by dissolution  before  the  date  of  execution,  he  was  not entitled to execute the decree. Held  further,  that the defendant could not be  allowed  to substitute  five annas share in the assets of the  dissolved firm  instead, as that would amount to an alteration of  the decree which the execution court was not competent to make.

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JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 206 of 1955,   63 On appeal from the judgment and order dated the 5th May 1954 of  the Patna High Court in Appeal from the  Original  Order No.  284  of 1951 arising, out of the order dated  the  llth July  1951  of the Court of Subordinate Judge,  Motihari  in Misc.  Case No. 30 of 1951. Veda  Vyas, (S.  K. Kapur and Ganpat Rai, with him) for  the appellant.    C.K.  Daphtary, Solicitor-General of India  (K.   B. Asthana and C. P. Lal, with him) for respondent NO. 1.   1956.   January  31.   The  Judgment  of  the  Court   was delivered by BOSE   J.-This  appeal  arises  out  of  certain   execution proceedings.  The decree which the appellant, Jainarain Rain Lundia,  seeks  to  execute  is  one  that   directsspecific performance  of  a  contract to sell  certain  shares  in  a private limited company known as the Ganga Devi Sugar Mills, together  with  a  five annas share in  a  partnership  firm called  the  Marwari Brothers, on payment of a  sum  of  Rs. 2,45,000.   The facts are as follows.  The partnership firm, known  as the  Marwari  Brothers, was formed on the 29th  of  February 1936.   The  partners  consisted of two  groups  called  the Bettia  Group  and the Padrauna Group.  The  Padrauna  Group consisted  of  (1) Kedarnath Khetan and (2)  a  firm  called Surajmal.   These  two  were the  plaintiffs  in  the  suit. Kedarnath was one of the partners of the Surajmal firm.  The Bettia  Group consisted of (1) Gobardhan Das  (2)  Jainarain Ram  Lundia  (3) Badri Prasad and (4) Bisheshwar  Nath.   On Bisheshwar  Nath’s  death his son  Madan  Lal  Jhunjhunwalla stepped into his shoes.  These persons were the defendants.   The  Marwari Brothers Firm was formed for the  purpose  of promoting  a company for starting a sugar mill in  Champaran and  for  securing the managing agency of  the  company  for itself  for a period of ninety years.  This was  done.   The capital  of  the company consisted of Rs.  8,00,000  divided into 800 shares of 64 Rs. 1,000 each.  The shares were distributed as follows.  In the Bettia Group Gobardhan Das and his brother Badri  Prasad had  100  shares; Jainarain had 150 and Madan Lal  had  100. The  Bettia  Group thus had 350 shares  between  them.   The other group (Padrauna) held the remaining 450 shares.   About  five years later the two sets of partners fell  out and,  as a result, the Bettia Group agreed, on 1-1-1941,  to sell  a  certain number of their shares in  the  Ganga  Devi Sugar  Mills  Limited  to the Padrauna Group  along  with  a certain  share  in  the Marwari Brothers  firm.   The  exact number  of  shares agreed to be sold and the extent  of  the share  in the firm was amatter of dispute but that does  not concern us at this stage because we are only concerned  with the final result embodied in the decree now under execution.   The Padratuna Group sued for specific performance and  the dispute was carried as far as the Federal Court.  That Court affirmed the decree of the Calcutta High Court on  6-5-1949. The substance of the decree was this:    1."It is declared that upon payment and or tender to the defendants-appellants Jainarain Ram Lundia    and  Madan Lal  Jhunjhunwala of the sum of Rs. 2,45,000  with  interest

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thereon  by the plaintiffs, the plaintiffs are  entitled  to 250  shares  belonging to the said defendants in  the  Ganga Devi  Sugar Mills Limited and five annas share belonging  to them  in  the  Marwari Brothers and  to  all  dividends  and profits in respect thereof with effect from 1-2-1941   2."And  it  is further ordered and decreed  that  against payment or tender by. the plaintiffs to the said  defendants of  the said sum of Rs. 2,45,000 with interest as  aforesaid the  said  defendants-appel]ants and all proper  parties  do execute in favour of the plaintiffs proper deed or deeds  of transfer  or assignment of the said 250 shares in the  Ganga Devi  Sugar Mills Limited and the said five annas  share  in the Marwari Brothers   This was in slight variation of the first Court’s  decree. The exact variation does not matter.  All 65 that  it is necessary to note is that the  plaintiffs  (that is,  the Padrauna Group) tendered the money some time  after the  first  Court’s  decree and  before  the  Calcutta  High Court’s  decree.   The  tender  was  not  accepted  as   the defendants (the Bettia Group) had appealed.  It is  admitted that  there  was  no second tender after  the  High  Court’s decree.   After the Federal Court had settled the matter, one of the defendants,  Jainarain Ram Lundia, applied to  the  Calcutta High Court for execution.  The decree  was transferred to the Subordinate Judge,  Motihari, and  the execution proceedings started there  on  25-1-1951. One of the plaintiffs, Kedarnath Khetan, filed an  objection petition  on  20-3-1951.   That  is  the  objection  we  are concerned  with.  Among other things, one of the  objections was that the defendants were not in a position to  implement the  conditions  imposed on them by the decree  because  the Marwari Brothers firm was dissolved by agreement between the parties before the Federal Court’s decree and was no  longer in  existence.  The present appeal turns almost entirely  on that fact and on the conseq uences that flow from it.   The first Court, that is, the Subordinate Judge’s Court at Motihari  to whom the decree bad been transferred,  declined to  go  into this holding that it had no jurisdiction  as  a transferee Court.   The  plaintiff  Kedarnath appealed to the High  Court  and succeeded.   The High Court held that the  transferee  Court had  jurisdiction,  that  the  Marwari  Brothers  had   been dissolved and that because of that the defendants could  not execute the decree.  The defendants appealed here. We will first consider the question of fact, namely, whether the Marwari Brothers was still in existence as a firm at the date  of the execution application.  On this point we  agree with  the  High  Court that it was not,  for  the  following reasons.   The plaintiff Kedarnath asserted in his objection petition that  the firm had been dissolved by agreement  between  the parties "including the plaintiffs and the defendants".  This fact was not denied by 9 66 the  defendant Jainarain Ram Lundia in his rejoinder  though the fact was specifically alleged to be within his  personal knowledge.   Even  if he did not know whether the  firm  bad been  dissolved or not (a fact which cannot be the case  for reasons  that  we shall give later) he was  certainly  in  a position  to admit or deny whether the fact was  within  his personal knowledge.  His silence can therefore only have one

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meaning.   The  defendant’s learned counsel contended before us  that the  fact had been denied by implication  because  Kedarnath stated  that  his side was, and had always  been,  ready  to perform  their part of the decree.  Counsel argued  that  as the  plaintiffs contended that performance was not  possible after  the  dissolution of the Marwari  Brothers  firm  this meant that the firm was still in existence.  We reject  this contention  and remark in passing that this is  inconsistent with  another argument which was also urged in  this  Court, namely   that  the  fact  of  dissolution  was  no  bar   to performance on the defendant’s part.   Quite  apart  from  the language  of  the  rejoinder,  the defendant Jainarain said in paragraph 15 of his  application dated  12-7-1954 made to the High Court for leave to  appeal here that   "the said Marwari Brothers was in existence on the date of the said conveyance, namely 14th September 1950, and died  a natural  death  on the conveyance of the  Ganga  Devi  Sugar Mills to North Bihar Sugar Mills".  This  is a clear admission that the firm was dissolved,  at any rate, on 14-9-1950.  The plaintiff’s contention is  that it was dissolved much earlier but whether that was so or not will make no difference to this appeal because 14-9-1950  is also before the date of the application for execution.  The defendant’s learned counsel tried to explain this  away also.  He said that the defendant did not mean that the firm was dissolved on that date but that as the only purpose  for which  the firm existed, namely, the managing agency of  the Ganga  Devi Sugar Mills, had gone the firm could  no  longer function. 67 In  order  to understand this, some further  facts  will  be necessary.  While the plaintiff’s appeal was being heard  in the  High Court, the defendants made an application to  that Court  on 14-4-1954 asking for permission to adduce  further evidence  in the shape of a sale deed dated 14-9-1950.   The defendant  con-, tended that he had only "recently" come  to know that the Ganga Devi Sugar Mills had sold all its  land, machinery, etc. to the North Bihar Sugar Mills on 14-9-1950. This  terminated  the  managing  agency,  and  as  the  only business  of the firm was this managing agency and  as  that was  the only purpose for which the firm was formed, it  was no  longer  able to function.  But he said  that  this  deed would  show conclusively that the firm was in  existence  on that  date.  The High Court refused to accept this  document because  it  considered  that  the  only  ground  on   which additional  evidence can be admitted in appeal is -when  the Court  is  unable  to pronounce  judgment  on  the  material already before it; as that was not the case here it rejected the document.   We  need not decide whether there is any conflict of  view between  the  Privy Council decisions in Kessowji  Issur  v. G.I.P. Rly.(1) and Parsotim v. Lal Mohar(2) on the one  hand and  Indrajit  Pratap  Sahi v. Amar Singh(3)  on  the  other because, even if this evidence were to be admitted and  were to be accepted as true, there would still be the defendant’s admission in the High Court that the firm stood dissolved at least  on  14-9-1950.   We  are not  able  to  construe  the statement  in  any other way.  The plaintiff says  that  the dissolution was much earlier and that the firm mentioned  in the  sale deed now sought to be filed was not the same  firm but  another  firm  of  the  same  name,  but  even  if  the defendant’s version be accepted the fact still remains  that even  according  to his statement there  was  a  dissolution

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before his application for execution and that therefore  the defendants were not in apposition to assign their five annas share (1)  [1907] L.R. 31 I.A. 115, 122. (2)  [1931] L.R. 58 I.A. 254. (3)  [1928] L.R. 50 I.A. 183, 190, 191. 68 in  the Marwari Brothers firm.  We now have to consider  the effect of that. Much of the argument about this revolved round the  question whether  the equitable rules that obtain before decree in  a suit  for  specific performance con tinue at  the  stage  of execution.  It is not necessary for us to go into that  here because  the position in the present case is  much  simpler. When a decree imposes obligations on both sides which are so conditioned  that  performance  by  one  is  conditional  on performance  by the other execution will not be ordered  un- less the party seeking execution not only offers to .perform his  side  but,  when objection  is  raised,  satisfies  the executing  Court  that he is in a position to  do  so.   Any other  rule would have the effect of varying the  conditions of  the decree: a thing that an executing Court  cannot  do. There may of course be decrees where the obligations imposed on  each side are distinct and severable and in such a  case each  party  might well be left to its own  execution.   But when  the obligations are reciprocal and are interlinked  so that  they  cannot  be separated,  any  attempt  to  enforce performance  unilaterally would be to defeat the  directions in  the  decree and to go behind them which, of  course,  an executing  Court cannot do.  The only question therefore  is whether  the decree in the present case is of  this  nature. We are clear that it is.   The  relevant part of the decree has already been  quoted. It directs that   "against payment or tender by the plaintiffs.... the  said defendants..do  execute in favour of the  plaintiffs  proper deed  or  deeds of transfer of ... five annas share  in  the Marwari Brothers......  This  is  not  a  case of  two  independent  and  severable directions  in the same decree but of one set of  reciprocal conditions indissolubly linked together so that they  cannot exist without each other.  The fact that it is a decree  for specific performance where the decree itself cannot be given unless the side seeking performance is ready and willing  to perform  his side of the bargain and is in a position to  do so,  only  strengthens  the conclusion  that  that  was  the meaning 69 and  intendment of the language used.  But the principle  on which  we are founding is not confined to cases of  specific performance.   It  will  apply  whenever  a  decree  is   so conditioned that the right of one party to seek  performance from  the other is conditional on his readiness and  ability to  perform his own obligations.  The reason is, as we  have explained,  that  to hold otherwise would be  to  permit  an executing  Court to go behind the decree and vary its  terms by  splitting up what was fashioned as an indivisible  whole into  distinct  and  divisible  parts  having  separate  and severable  existence without any interrelation between  them just as if they had been separate decrees in separate and distinct suits.   Fry on Specific Performance was quoted to us (6th edition, Chapter  IV,  pages 546 onwards) where  the  learned  author states  that  relief can often be  obtained  after  judgment along  much  the  same lines as before: thus a  party  to  a

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contract may, in a proper case, apply for rescission of  the contract  and so forth. it was urged by the other side  that even  if that can be done it can only be done by  the  Court which  passed  the decree and not in execution.  We  do  not intend  to examine this because even if these remedies  also exist, provided application is made to the proper Court,  it does  not affect the basic principle in execution  that  the executing Court must take the decree as it stands and cannot go behind it.  If the decree says that on payment being made some definite and specific thing is to be given to the other side,  the  executing  Court cannot  alter  that  and  allow something else to be substituted for the thing ordered to be given.  The  learned  counsel  for  the  defendant-appellant contended  that even if the Marwari Brothers had  ceased  to exist  as a firm the plaintiff was still entitled to a  five annas share in its assets on dissolution.  But a five  annas share in the assets of a dissolved firm which has ceased  to exist is a very different thing from a five annas share in a going  partnership concern; and to permit this  substitution in  the  decree  would be to alter it  in  a  very  material particular.  The defendant may or may not have the 70 right to ask the Court which passed the decree to vary it in that  way but he can certainly not, ask the executing  Court to  do so.  The decree must either be executed as it  stands in one of the ways allowed by law or not at all.   In  the High Court, and also before us, much was  made  of the  fact that the plaintiff had not re-tendered  the  money after  the  decree was varied by the High Court and  it  was argued   that  that  precluded  him  from   contesting   the defendant’s  right to attach his property under  Order  XXI, rule  32(1),  of  the  Civil  Procedure  Code.   The  remedy provided in Order XXI, rule 32(1), is, of course, one of the remedies  available  in execution of a decree  for  specific performance  but  it  can only be used by a  person  who  is entitled to execute the decree, and if, by reason of his own incapacity to perform his part, he is precluded from seeking execution, Order XXI, rule 32 (1), cannot apply.   The  only question that remains is whether  the  executing Court can consider whether the defendant is in a position to perform  his part of the decree.  But of course it can.   If the  executing Court cannot consider this question who  can? The executing Court has to see that the defendant gives  the plaintiff  the  very thing that the decree directs  and  not something  else,  so  if  there is  any  dispute  about  its identity  or  substance nobody but the Court  executing  the decree can determine it.  It is a matter distinctly relating to  the execution, discharge and satisfaction of the  decree and so, under section 47 of the Civil Procedure Code, it can only  be determined by the Court executing the decree.   And as for the first Court’s conclusion that it could not decide these  matters because it was not the Court that passed  the decree,  it  is enough to say, as the High Court  did,  that section 42 of the Code expressly gives the Court executing a decree  sent to it the same powers in executing such  decree as if it bad been passed by itself.   The  next  point urged by the appellant was  that  as  the plaintiff  did  not raise the present objection  before  the Federal -Court when it passed its decree he 71 is precluded from doing so now.  It is true this would  have been  a  good  ground for resisting a  decree  for  specific performance but is no answer to the objection to  execution. The defendant undertook to perform his part when the  decree was passed and he must make good that undertaking before  he

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can  seek  execution  because the decree,  in  view  of  its language and intendment, must either be executed as a  whole or not at all; it cannot be split up into different and  un- correlated  parts and be executed unilaterally.  It  may  be observed  in  passing that it was as much the  duty  of  the defendant to seek modification of the contract by the  Court which passed the decree, or modification of the terms of the decree later if he did not know these facts at the time,  as he says, it was of the plaintiff.  The fact remains that the decree  was  passed  in these terms and it  must  either  be executed  as it stands or not at all unless the Court  which passed it alters or modifies it.   Then it was argued that this objection to execution should have been taken by the plaintiff in the Calcutta High  Court when  the  defendant  asked for transfer of  the  decree  to Motihari  and that as that was not done it is too late  now. But  here  also the answer is the same.  The  only  question before the Calcutta High Court on the application made to it was  whether  the  decree  should  be  transferred  or  not. Whether  the  plaintiff  might  or  could  have  taken   the objection  in the High Court is beside the point because  it is  evident that he need not have done so on the only  issue which  the application for transfer raised, namely,  whether the  decree should be transferred or not; at best  it  could only be said that the plaintiff had a choice of two  forums. If  the  appellant’s  contention is pushed  to  its  logical conclusion   it  would  mean  that  whenever  a  decree   is transferred all objection to execution must cease unless the order   of  the  Court  directing  the  transfer   expressly enumerates  the  issues that the transferring  Court  is  at liberty  to  determine.  In our opinion section  42  of  the Civil   Procedure  Code  is  a  complete  answer   to   this contention. The appeal fails and is dismissed with costs. 72