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PETITIONER: MANZOOR AHMED MARGRAY

       Vs.

RESPONDENT: GULAM HASSAN ARAM & ORS.

DATE OF JUDGMENT:       05/10/1999

BENCH: M.B.Shah, D.P.Wadhwa

JUDGMENT:

     Shah, J.

     Leave  granted.   These appeals are filed by  Original Defendant  No.  1, Mohammad Yousuf Magray, Defendant No.   3 (Manzoor  Ahmed  Magray,  son  of  Mohammad  Yousuf  Magray) against  the  Judgment and Order dated 14th August, 1998  in CIA  Nos.   6 & 8 of 1982 passed by the High Court of  Jammu and Kashmir, Srinagar.  The dispute pertains to orchard land measuring  17  kanals and 2 marlas, comprised in Khasra  No. 191/45,  Khewat  No.   43, situated at  Shankerpora,  Tehsil Chadoora,  District  Srinagar along with trees.  It  is  the case of the plaintiff that Mohammad Yusuf Magray had entered into  an  agreement dated 14th July, 1971 for sale  of  suit land  in favour of the plaintiff;  the price of the land was fixed  at  Rs.   4,250/- per Kanal and the  advance  of  Rs. 2,000/-  was paid by the plaintiff to defendant no.  1;  the sale  transaction was to be completed within one and a  half months.   The agreement further stated that defendant No.  1 had  an authority from his younger brother, defendant No.  2 to  sell the land and was also entitled to transfer the same on behalf of his minor son, defendant No.  3.  It was stated that the land was purchased by him.  His younger brother and son  (both  minor)  were benamidar co-owners.   Out  of  the agreed  sale  consideration  of Rs.  72,500/-,  sum  of  Rs. 60,000/- was to be paid by the plaintiff to defendant No.  1 at  the  time of execution of the sale deed and delivery  of possession.   Balance amount was to be paid by the plaintiff at  the  time  of  registration of the sale  deed.   It  was contended  by the plaintiff that as there was escalation  in the  prices of land, defendant No.  1 dishonestly refused to perform  his part of the contract and, therefore, notice was issued  for  performance  of  the  contract.   As  plaintiff apprehended that defendants were likely to alienate the suit land,  plaintiff filed the suit for injunction in the  court of  IInd  Additional Munsif, Srinagar.  Thereafter,  as  the defendant  refused  to execute the sale deed, plaintiff  had filed the present suit No.  22 of 1974 on 24th May, 1974 for specific  performance of the contract before the High  Court of Jammu and Kashmir.

     On  the  day  when the suit was filed,  defendant  No. 2(brother   of  defendant  No.   1)  was  major.    However, defendant  No.  3 was minor and, therefore, court  appointed Sh.   K.K.   Dhar  as guardian who appeared  on  his  behalf

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during  the course of trial.  In the written statement filed by  defendant  No.  1, he has admitted the execution of  the agreement  dated  14th July, 1971.  However, he denied  that defendant nos.  2 & 3 were his benamidars.  It was contended that entire land did not belong to him but defendant nos.  2 and  3 were co-owners.  He submitted that he had offered  to execute  the  sale deed in favour of the plaintiff  qua  his share  but  it could not materialise because  plaintiff  was unable to pursuade other defendants to similarly execute the sale  deed  of  their  respective shares.   Lastly,  it  was contended  that plaintiff had no ready money and he was  not ready  and  willing  to perform his part  of  the  contract. Additionally, it was contended that as the agreement was not executed  by all the co-owners, it could not be specifically enforced.  In his written statement, defendant No.  2 stated that  land  was  purchased jointly and that  all  the  three defendants were full fledged owners of the 1/3rd share each. Regarding  the agreement to sale, he feigned ignorance.   On behalf of the defendant No.  3, written submission was filed contending  that  defendant  No.   1  had  no  authority  to permanently transfer his share in the land.

     It  has  to  be  stated that at  the  time  of  trial, defendants  never  stepped into witness box..   The  learned Single Judge after considering the evidence on record partly decreed  the suit of the plaintiff for specific  performance of the contract so far it related to 1/3rd share of Mohammad Yusuf  Magray  (defendant  No.  1) and  dismissed  the  suit against  defendant Nos.  2 & 3.  Against the said  judgment, Original  Plaintiff Ghulam Hassan Aram preferred CIA no.   6 of  1982;   defendant  No.  1 preferred CIA no.  8  of  1982 which  came  up for hearing before the Division Bench.   The Court  dismissed  the  appeal  (CIA   No.   8/82)  filed  by defendant  No.   1 with costs and partly allowed the  appeal filed  by the plaintiff and decreed so far as it related  to 1/3rd  share  of Manzoor Ahmad Magray, son of defendant  No. 1.

     Against  that judgment and decree, defendant No.1  has filed  SLP nos.  18241-42/98 and defendant no.  3 has  filed SLP  nos.   16649-50/98.   At the time of  hearing  of  this appeal, learned Counsel, Mr.  Thakur, appearing on behalf of the  appellant submitted that the judgment and decree passed by the High Court is illegal and erroneous because:  -

     (a)  The agreement itself provides a default clause to the effect that in case of non-fulfillment of the agreement, defaulting  party  shall pay to the other, an amount of  Rs. 10,000/-  as  damages  and shall be bound to pay  the  same. Therefore, in view of Section 23 of Jammu & Kashmir Specific Relief  Act,  decree  for the specific  performance  is  not required  to  be granted.  (b) Plaintiff was not  ready  and willing to perform his part of the contract and there is the specific condition in the agreement that the sale deed is to be  executed within a period of one and a half months  after obtaining  the  copies of the site plan and extracts of  the revenue  entries  from the patwari concerned.  (c) Delay  in filing  the suit which also indicates that plaintiff was not ready and willing to perform his part of the contract and in such  cases, it is the discretion of the Court not to  grant relief  of  specific  performance.    (d)  The  contract  is indivisible  and,  therefore,  there   was  no  question  of granting specific performance of the contract of 1/3rd share or  2/3rd share.  For this purpose, he relied upon  Sections 14  &  15 of the J & K Specific Relief Act, 1963.  (e)  Suit

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land cannot be alienated or transferred in view of the Jammu and  Kashmir  Agrarian Reforms Act, 1972 and the  Jammu  and Kashmir  Prohibition on Conversion of Land and Alienation of Orchards Act, 1975.

     Re:   Contention  (a) in the default clause  providing for  damage of Rs.  10,000/-, decree specifically cannot  be granted.

     Learned  Counsel  for the appellant in support of  his contention  referred  to  last part of the  agreement  which provides that if any party violates the terms and conditions of  the agreement, he will be liable to pay Rs.  10,000/- as penalty  to another party.  He, therefore, submitted that at the  most, plaintiff was entitled to recover damages to  the tune  of  Rs.  10,000/- and there is no question of  passing decree  for  specific  performance.  From a reading  of  the aforesaid  clause in the agreement, it can be stated that it is strictly a penalty clause for securing the performance of the  contract.  It only provides that if any party  violates the  terms  and  conditions of the agreement,  he  would  be liable to pay a penalty of Rs.10,000/-.  This would not mean that  contract  is not to be performed.  It would only  mean that  if there is breach of some terms and conditions of the contract,  the  defaulting  party  has to  pay  the  penalty specified  therein.  The said clause, also, does not provide that  in  case a sale deed is not executed, damages  to  the tune of Rs.10,000/- are to be awarded.  While dealing with a similar  contention  and a clause in the contract  providing that in case of failure of compliance of terms of agreement, vendor  will be liable to refund security deposit and to pay damages  equal to the security, this Court in M.L.  Devender Singh Vs.  Syed Khaji [1973 (2) SCC 515] held that there was no  mention  anywhere in the contract that the party  to  it will have the option to either fulfil the contract to buy or sell  or  to  pay the liquidated damages or penalty  of  Rs. 20,000/-  stipulated  for  a  breach as  an  alternative  to performance  of  the  contract to buy or  sell.   The  Court considered  the  provisions  of Specific Relief  Act,  1963, particularly  Section 23 (which is similar to Section 20  of the Act of 1877) and held that Section 23 of the Act of 1963 contains  a  comprehensive  statement of the  principles  on which,  even before the Act of 1963, the presence of a  term in  a  contract specifying a sum of money to be paid  for  a breach  of  the  contract  is to be  construed.   The  Court observed:   Where  a payment is an alternative to  carrying out  the  other terms of the contract, it would exclude,  by the  terms  of the contract itself, specific performance  of the contract to convey a property.

     Thereafter   the  Court  quoted   with  approval   the following principles stated in Sir Edward Frys Treatise on the  Specific  Performance  of Contract (Sixth  Edition  at p.65):   From  what has been said it will be gathered  that contracts  of  the kind now under discussion  are  divisible into three classes

     (i)  where  the sum mentioned is strictly a  penaltya sum  named  by  way  of  securing  the  performance  of  the contract, as the penalty is a bond;

     (ii)  where the sum named is to be paid as  liquidated damages for a breach of the contract;

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     (iii)  where the sum named is an amount the payment of which  may be substituted for the performance of the act  at the  election of the person by whom the money is to be  paid or the act done.

     Where the stipulated payment comes under either of the two  first-mentioned  heads,  the  court  will  enforce  the contract,  if  in  other  respects it can and  ought  to  be enforced,  just  in the same way as a contract not to  do  a particular  act,  with  a  penalty   added  to  secure   its performance  or  a sum named as liquidated damages,  may  be specifically  enforced  by  means of an  injunction  against breaking  it.   On the other hand, where the contract  comes under  the third head, it is satisfied by the payment of the money,  and  there is no ground for the court to compel  the specific  performance  of  the   other  alternative  of  the contract.

     The  Court  also held that the fact that  the  parties themselves  have  provided  a sum to be paid  by  the  party breaking the contract does not, by itself, remove the strong presumption contemplated by the use of the words unless and until  the contrary is proved in Section 10 of the Specific Relief Act of 1963.  The sufficiency or insufficiency of any evidence  to  remove  such  a presumption  is  a  matter  of evidence.   Similar clause was interpreted by this Court  in the  case of Prakash Chand Vs.  Angad Lal [1979 (4) SCC 393] and  it  was  observed that a perusal of the  terms  of  the contract  indicated  that stipulation for damages  was  made only for the purpose of securing performance of the contract and  not for the purpose of giving an option of paying money in  lieu of specific performance.  Court observed:  -  Even if  a sum has been named in the contract for the sale as the amount  to  be  paid in case of a breach, the  appellant  is entitled in law to the enforcement of the agreement.

     Further, for the purpose of present matter, Section 20 and  illustration therein of Specific Relief Act,  1977(1920 A.D.)  of Jammu & Kashmir which is applicable to the parties makes it explicitly clear thus:

     A  contract,  otherwise  proper  to  be  specifically enforced,  may be thus enforced, though a sum be named in it as  the  amount  to be paid in case of its breach,  and  the party in default is willing to pay the same.

     Illustration

     A contracts to grant B an under-lease of property held by  A  under  C, and that he will apply to C for  a  licence necessary  to the validity of the under-lease, and that,  if the  licence  is not procured, A will pay B Rs.  10,000.   A refuses to apply for the licence and offers to pay B the Rs. 10,000.   B  is nevertheless entitled to have  the  contract specifically enforced if C consents to give the licence.

     Hence,  there is no substance in aforesaid  contention of the learned Counsel for the appellant.

     Re:   (b)  &  (c) Plaintiff not ready and  willing  to perform his part of the contract and that there was delay in filing the suit

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     For  this  contention,  it  is to be  stated  that  it depends upon the evidence which is led by the parties before the Court.  In the plaint, plaintiff has averred that he was ready and willing to perform his part of the contract and to abide  by its terms.  In the written statement filed by  the defendant no, 1, it has been stated that he was always ready and  willing  to  execute  the sale deed in  favour  of  the plaintiff  to  the extent of his share in the suit land  but plaintiff  was  avoiding  because  he  was  pursuing   other defendants  who were not ready to execute the sale deed  for their  shares.   Defendant  No.   1  has  also  stated  that plaintiff  had no ready money with him and, therefore,  also he  avoided  execution of the document.  It is to be  stated that  after  filing his written statement, defendant No.   1 has  not stepped into the witness box.  Still, however, from the  written statement of the defendant No.  1, it is  clear that  the  sale  deed  could not be  executed  only  because defendants  no.  2 & 3 were not prepared to execute the sale deed.   Hence, it cannot be stated that there was any  delay on  the part of the plaintiff which would disentitle him  to get  the  equitable relief.  Further, plaintiff has  deposed that  he  was ready and willing to perform his part  of  the contract.   Notice dated 23rd November, 1972 was also served on  Mohd Yousuf for execution of the sale deed.  He has also denied  the suggestion that he was not ready to purchase the suit  land within stipulated time.  He also deposed that  he was  in  a  position to pay the sale  consideration  of  Rs. 70,000/-,   which   was  not   challenged  in   the   cross- examination.   There  is nothing on record to  suggest  that defendants  have shown readiness and willingness to  perform their part of the contract or that they have called upon the plaintiff  to get the sale deed executed in his favour or to do  the needful.  Therefore, it cannot be said that the High Court  erred  in giving finding in favour of  the  plaintiff that  he  was ready and willing to perform his part  of  the contract.  The suit is filed within period of limitation and that  there is no delay on the part of plaintiff which would disentitle him to have equitable relief.  Hence, there is no substance in the aforesaid contention.

     (d)  Re:  The contract is indivisible and hence  there was no question of granting specific performance of 1/3rd or 2/3rd  share  The aforesaid contention is also  against  the provision  of  Section  15  of the Specific  Relief  Act  as applicable in Jammu & Kashmir which is as under:-

     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  forms  a consierable portion of the  whole,  or 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:  provided that  the  plaintiff relinquishes all claim to further performance, 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  illustration given under the said section further makes  the  position abundantly clear.  Illustration (a)  is thus:   A contracts to sell to B a piece of land  consisting of  100  bighas.   It turns out that 50 bighas of  the  land belong  to  A,  and the other 50 bighas to a  stranger,  who

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refuses to part with them.  A cannot obtain a decree against B for the specific performance of the contract;  but if B is willing  to  pay the price agreed upon, and to take  the  50 bighas  which belong to A, waiving all right to compensation either  for  the  deficiency or for loss  sustained  by  him through  As  neglect or default, B is entitled to a  decree directing  A to convey those 50 bighas to him on payment  of the purchase-money.

     Further,  in the present case, defendant No.  1  Mohd. Yousuf  Magray  entered into an agreement to sell  the  land purchased by him in 1968-69 in three names, namely, himself, his brother (Ghulam Rasool at the relevant time  minor) and his  minor  son  (Manzoor Ahmad Magray).  Clause  2  of  the agreement  stipulated  that Mohd.  Yousuf would be bound  to include and join his brother Ghulam Rasool for the execution and completion of the sale deed in respect of the said land. The  learned Single Judge by judgment and decree dated  16th November,  1981  granted relief for specific performance  of the  contract  only  for  1/3rd   share  of  Mohd.    Yousuf (Defendant  No.  1).  Against that judgment the plaintiff as well  as defendant no.  1 filed appeals.  The Division Bench dismissed the appeal filed by Mohd.  Yousuf.  It allowed the appeal  of  the  plaintiff  qua the share of  minor  son  of defendant  no.1 by holding that land was purchased by  Mohd. Yousuf  in the name of his son and in fact, it was owned  by him.   The Division Bench, however, dismissed the claim  for specific  performance  in respect of 1/3rd share  of  Ghulam Rasool.   Against that part of the decree, plaintiff has not preferred any appeal.

     As  stated above, section 15 of the J & K Act makes it abundantly  clear that where a party to a contract is unable to perform the whole of his part of it, 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.   Hence, there is no bar for  passing  the decree  for  specific relief with regard to 1/3rd  or  2/3rd share  owned  by  the  contracting party for  which  he  can execute  the  sale  deed.  For the share  of  Ghulam  Rasool (brother  of defendant No.1) admittedly, no decree is passed by  the  High  Court.  Dealing with the  similar  contention where  agreement  was  for  sale of  property  belonging  to brother  and  sister  each having half share, the  Court  in Kartar  Singh vs.  Harjinder Singh and Others [(1990) 3  SCC 517]  held that when the absentee vendor, for some reason or the  other  refused  to accept the agreement,  there  is  no reason  why the agreement should not be enforced against the vendor  who  had signed and his property is identifiable  by specific  share.   The Court further held that such case  is not  covered by Section 12 of the Specific Relief Act,  1963 which  relates  to  specific  performance of  a  part  of  a contract.   Such  type  of  case would  be  the  case  where specific  performance of the whole of the contract so far as contracting  party is concerned.  Further, whenever a  share in  the  property is sold the vendee has right to apply  for the  partition of the property and get the share demarcated. Hence there would not be any difficulty in granting specific performance  of  the contract to the extent to which  it  is binding between the parties.

     Re   :   (e)  Suit  land   cannot  be   alienated   or transferred.

     It  is  to  be stated that the appellant  has  neither

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raised  the  said  contention in the written  statement  nor during  the  trial.  However, in the appeal,  the  appellant sought to raise the contention that the specific performance qua  the  suit  land cannot be granted as  the  transfer  or alienation  of  the  suit property is prohibited  under  the provisions  of the J & K Agrarian Reforms Act, 1972, the J & K  Agrarian  Reforms Act, 1976 and the J & K Prohibition  on Conservation  of Lands and Alienation of Orchards Act, 1975. The  Court declined to entertain the plea on the ground that it  was raised almost 24 years after the filing of the  suit by  the  plaintiff and the same, if permitted to be  raised, would   prejudice  the  rights  of  the   plaintiff.    Even considering  that the said plea is pure question of law,  in our view, it is without any substance.  The definition under Section  2(4)  of  the  J & K  Agrarian  Reforms  Act,  1972 specifically  excludes  land which was an orchard  on  the first  day of September, 1971.  Sub-section (5) of Section 2 defines  orchard  to  mean a compact area of  land  having fruit trees grown thereon or devoted to cultivation of fruit trees  in such number that the main use to which the land is put  is  growing of fruits or fruit trees.  In  the  present case, agreement to sell was executed on 14.7.1971 in respect of  an  orchard  land.   Therefore, the  said  Act  was  not applicable  to the land in dispute.  Similar provisions  are there  in  the  Agrarian Reforms Act, 1976 which  gives  the definition  of  the  word  land  under  Section  2(9)  and definition  of the word orchard under Section 2(10).  From the said definition, it is apparent that orchard is excluded from the operation of the Agrarian Reforms Act.

     Learned  counsel  for the appellant, however,  further referred  to  Section  3  of  the   J  &  K  Prohibition  on Conservation  of  Land and Alienation of Orchards Act,  1975 which is as under:  - 3.  Prohibition on conversion of land and  alienation  of orchards.(1)  Notwithstanding  anything contained in any other law for the time being in force

     (a)  no  person shall alienate an orchard except  with the  previous  permission  of the Revenue Minister  or  such officer as may be authorised by him in this behalf;

     [Provided that alienation of orchards to the extent of Four  Kanals  only  in  favour of one or  more  persons  for residential purposes shall not need any permission.]

     (b)

     Considering the aforesaid section, it is apparent that prohibition  on transfer of orchards is not absolute and the question  of  obtaining previous permission as  contemplated under  Section 3(1)(a) would arise at the time of  execution of  the  sale deed on the basis of decree for  the  specific performance.   Section 3 does not bar the maintainability of the  suit  and permission can be obtained by  filing  proper application  after  the  decree is  passed.   Therefore,  it cannot be stated that decree for specific performance is not required  to be passed.  Further, under Section 3 of the J & K  Prohibition  on  Conservation of Land and  Alienation  of Orchards  Act,  1975,  prohibition on transfer  is  limited. Firstly,  the  proviso  makes it clear  that  alienation  of orchards  to the extent of four kanals only in favour of one or  more  persons for residential purposes will not  require any  permission.   Secondly,  for more than four  kanals  of land,  previous  permission of the Revenue Minister or  such

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Officer  as  may  be  authorised by him in  this  behalf  is required  to be obtained.  Dealing with similar  contention, this  Court  in  Bai Dosabai v.   Mathuradas  Govinddas  and Others  [(1980)  3  SCR 762] observed that even if  the  Act prohibits  alienation  of land, if the decree is  passed  in favour  of  the  plaintiff,  it is required  to  be  moulded suitably.   Lastly,  the learned counsel for  the  appellant submitted  that  defendant  No.1,  father had  no  right  to transfer  the  share of his minor son in the suit land.   In our  view, the High Court has arrived at the conclusion that the  land was purchased by the father from his own funds and that father was in fact the owner of the said property.  The defendants  have  not  led  any  evidence.   Further,  after obtaining  majority also defendant no.3 has not stepped into the  witness box or raised any contention to controvert  the evidence  of the plaintiff that defendant no.1 was owner  of the  suit  land as he had purchased the suit land  from  his money.   In the agreement to sell, it has been  specifically mentioned  that  defendant no.1  first party has  purchased one  share  of the said land in the name of his  minor  son. Hence  for  want  of any other evidence on record  the  said findings  cannot  be said in any way illegal  or  erroenous, which would call for our interference in these appeals.

     In the result, there is no substance in these appeals. It is pointed out by the learned counsel for the respondents that  on 11.5.1982 defendant no.1 had executed the sale deed in  respect  of 1/3rd share of the total area of 17-  kanals and  2-marlas  of orchard in favour of the plaintiff on  the basis of the decree passed by the trial court.  However, the possession  of the said land was handed over to the Receiver as  ordered by the High Court.  It is also pointed out  that by  order  dated 21.5.1982 the High Court had  directed  the parties  to maintain status-quo in respect of the possession of   the  suit  land.    Defendants  were  restrained   from alienating  the suit land till further orders of the  court. In  this  view of the matter, Receiver is directed  to  hand over  possession  of  the land for which the  sale  deed  is executed  in  favour  of  the plaintiff.   Further,  if  any permission  for  execution of the sale deed is required,  as contemplated  under  Section 3 of the J & K  Prohibition  on Conservation  of Land and Alienation of Orchards Act,  1975, in  executing the sale deed on the basis of decree passed by the   High  Court  then  the   parties  would  file   proper application   for  obtaining  the   said   permission.    If defendants  fail  to  cooperate, the Registrar of  the  High Court  would  take appropriate steps.  After  permission  is granted  then  the  sale deed with regard to  the  remaining 1/3rd  share in the suit land shall be executed in favour of the plaintiff.

     In   the  result,  the   appeals  stand  disposed   of accordingly with no order as to costs.