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PETITIONER: PIAREY LAL

       Vs.

RESPONDENT: HORI LAL

DATE OF JUDGMENT07/02/1977

BENCH: SHINGAL, P.N. BENCH: SHINGAL, P.N. GOSWAMI, P.K.

CITATION:  1977 AIR 1226            1977 SCR  (2) 915  1977 SCC  (2) 221  CITATOR INFO :  D          1992 SC1604  (9)

ACT:             U.P.   Consolidation   of   Holdings   Act,   1953,   s.         30(b)--Whether  agreement  for sale  creates  liability  for         tenure-holder "in" original holding for the purpose of

HEADNOTE:             The appellant Piarey Lal had agreed to sell his original         holding to Hori Lal but later refused to do so on the ground         that  his property which was the subject matter of the  con-         tract had been consolidated under the U.P. Consolidation  of         Holdings  Act,  1953, and it was impossible to  perform  the         agreement.   Hori Lal filed a suit for specific  performance         contending that the agreement for sale had created a liabil-         ity  for Piarey Lal for the purpose of section 30(b) of  the         Act, and the same was transferred to the new plot or  "chak"         allotted to him as a result of the consolidation.  The  suit         was  decreed   by the Trial Court and Piarey  Lal’s  appeals         before the District Court and the High Court were dismissed.         Allowing the appeal by Special Leave the Court,             HELD:  By  virtue of s. 54 of the Transfer  of  Property         Act, the agreement for sale did not give rise to any  inter-         est  "in" the original holding of the defendant as the  ten-         ure-holder.    There  could  thus be no  occasion  for   the         transfer of any such ,’liability" in his new land or  "chak"         so  as to attract clause (b) Of s. 30 of the Act.   When  he         lost  that property as a result of the scheme of  consolida-         tion, the agreement for sale became void. [918 C-E]         Sagna & Anr. v. Kali Ram & Ors. 1966 A.L.J. 1004, approved.             Shanti  Prasad  v.  Akhtar & Anr. 1972  A.L.J.  549  and         Chettan  Singh & Ors. v. Hira Singh & Ors. 1969 A.L.J.  189.         overruled.

JUDGMENT:             CIVIL APPELLATE JURISDICTION: Civil Appeal  No.  1252 of         1976.             Appeal  by  special Leave from the  Judgment  and  Order         dated 13-8-1975 of the Allahabad High Court in Second Appeal         No. 179/ 75.

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       K. Gupta, for the Appellant.         S.T.  Desai and R.B. Datar for the Respondent. The  Judgment         of the Court was delivered by.             SHINGHAL, J.--This appeal, by special leave, is directed         against  the  summary dismissal of  defendant  Piarey  Lal’s         second  appeal  on August 13, 1975.  As the leave  has  been         limited to the question of interpretation of clauses (a) and         (b) of section 30 of the U.P. Consolidation of Holdings Act,         1953,  (hereinafter referred to  as the Act), "for the  pur-         pose of deciding whether the liability of the petitioner  to         specifically perform the contract of sale of the  old  hold-         ing  was  transferred to the new ’chak’ allotted to  him  on         consolidation,"  it will be enough to state the facts  which         bear on it.         916             Respondent  Hori Lal raised the suit for  specific  per-         formance  of an agreement dated March 6, 1966, for the  sale         of  six plote of land measuring nine high and six biswas  in         village Hathiawali,  Tehsil Gannaur.  It was alleged in  the         plaint  that Rs. 3000/- were paid by the plaintiff Hori  Lal         in  advance, and the balance of Rs. 2000/was to be  paid  at         the time of the execution of the sale deed, within one  year         of  the  agreement.  It was also pleaded that  as  defendant         Piarey Lal refused to execute the’ sale deed, the  plaintiff         was driven to the necessity of filing the suit for  specific         performance  of the agreement for sale and, in the  alterna-         tive,  for the recovery of Rs. 3000/which had been  paid  as         advance.   Defendant Piarey Lal denied the execution of  the         agreement  for  sale  and the receipt of  Rs.  3,000/-,  and         pleaded  that as new plots had been allotted as a result  of         the consolidation of his holding under the Act, he could not         perform  the  agreement for sale.   The trial  court  framed         issues,  inter alia, on questions relating to the  execution         of  the  agreement for sale, payment of Rs.  3000/-  to  the         defendant,  and the inability of the defendant   to  perform         the contract.  That court held that the plaintiff had proved         the  agreement for sale and the payment of Rs. 3000/’-.   It         also held that the agreement for sale could be "enforced for         plots allotted to the defendant in lieu of plot mentioned in         the  agreement in consolidation."  It therefore decreed  the         suit for specific performance by  its judgment dated  August         23,  1973.   The Second Additional District  Judge,  Badaun,         upheld  the decree, and as the High Court has dismissed  the         second appeal as aforesaid, defendant Piarey Lal has come to         this Court for a redress of his grievance by special leave.             As has been stated, the limited question for  considera-         tion  in this Court is whether the defendant was  liable  to         specifically perform the contract for sale of his old  hold-         ing  even  after its consolidation and the  allotment  of  a         ’chak’  ?  It  appears that there was  controversy   in  the         Allahabad  High Court on the question whether  an  agreement         for  sale,  in the circumstances of a case  like  this,  was         rendered  void under section 56 of the Contract Act  because         of  the order of consolidation allotting new plots  for  the         earlier plots in respect of which the agreement for sale had         been executed.   A Single Judge of that Court took the  view         in  Sugna  and another v. Kali Ram and  others(1)  that  the         agreement became void and impossible of performance, and was         not  saved by section 30 of the Act.  A different  view  was         however  taken by another Single Judge in Chetan  Singh  and         others  v.  Hira Singh and others(1).   The matter  was  re-         ferred  to a Division Bench in Shanti Prasad v.  Akhtar  and         another.(2)  One of the Judges in the Division Bench was the         Judge  who had given the  decision in  Chetan Singh’s  case.         The  Bench held that the duty of the seller to  execute  the

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       conveyance  of the property agreed to be sold, was a liabil-         ity  recognised by law and was enforceable as the  liability         "relates  to  the land mentioned in the agreement"  and  was         "transferred to the  new ’chak’" under section 30(b) of  the         Act.   The  decision  in  Shanti Prasad’s  case  formed  the         basis of the decision of the first appellate            (1) 1966 A..L.J. 1004.            (2) 1969 A.L.J. 189.            (3) 1972 A.L.J. 549.         917         court  in this case, and that appears to be the  reason  why         the  High Court has dismissed the second  appeal  summarily.         The controversy therefore turns on the proper interpretation         of  section 30 of the Act which deals with the  consequences         which  ensue  on exchange of possession as a result  of  the         allotment of a ’chak’ to the tenure-holder.             Clauses (a) and (b) of section 30 of  the  Act   provide         as follows,--               "30.  Consequences  which shall ensue on  exchange  of         possession.--With  effect from the date on which  a  tenure-         holder enters, or is deemed to have entered into  possession         of  the chak allotted to him, in accordance with the  provi-         sions of this Act, the following consequences shall ensue--                       (a) the rights, title, interests and  liabili-                       ties--                           (i)  of  the tensure-holder  entering,  or                       deemed to have entered, into possession, and                          (ii)  of  the former tenure-holder  of  the                       plots comprising the chak, in their respective                       original holdings  shall cease; and                           (b)  the tenure-holder entering into  pos-                       session,  or deemed to have entered into  pos-                       session,  shall  have  in his  chak  the  same                       rights, title, interests and liabilities as he                       had  in  the original holdings  together  with                       such  other  benefits  of  irrigation  from  a                       private  source, till such source  exists,  as                       the former tenure-holder of the plots compris-                       ing the chak had in regard to them."         It  would thus appear that while clause (a) deals  with  the         rights,  title,  interests and liabilities  of  the  tenure-         holder  entering into  possession of the ’chak’, as well  as         of  the  former tenure-holder of the  plots  comprising  the         ’chak’, in their respective original holdings, and  provides         that  those rights, title, interests and liabilities.  shall         "cease", clause (b) provides that the tenure-holder entering         into  possession of the ’chak’ shall have, in  that  ’chak’,         the same rights, title, interests and liabilities "as he had         in the original  holdings."  The expression ’chak’ has  been         defined in section 3(1-A) of the Act to mean "the parcel  of         land allotted to a tenure-holder on consolidation."  The two         clauses  therefore are quite simple and clear, and’  do  not         raise any real problems of interpretation, but the  question         is whether there  is justification for the argument, in  the         facts  and circumstances of this case, that  the  expression         "liabilities" would cover the liability of  the seller (i.e.         the defendant), under the aforesaid agreement for   the sale         of his original holding ?             As is obvious, clause (a) of section 30 does not bear on         the question in controversy because it only provides for the         cessation  of the rights, title, interests  and  liabilities         both of the tenure-holder to whom the ’chak’ has been allot-         ted, and of the former tenure-holder         918          of  the  plots comprising the ’chak’  in  their  respective

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       original  holdings".  There is no controversy that this  was         so  in the present case. It is also no body’s case that  the         rights, title, and interests of  the tenure-holder  entering         into  possession of his ’chak’ have any bearing on the  con-         troversy relating to the specified performance of the agree-         ment for sale, for all that has been urged before us is that         the  defendant, as the tenure-holder of the new  holding  or         ’chak’ had  the same "liabilities" in that ’chak’ as he  had         in the original holding.What therefore remains for consider-         ation  is whether, on the defendant’s entering into  posses-         sion of his new land or ’chak’, there was the same liability         "in"  the new land as "in" the original holding.  It  there-         fore to be examined whether, by virtue of the agreement for         sale, any liability accrued "in" the original holding ?             A  cross-reference  to  section 54 of  the  Transfer  of         Property Act shows that a contract for the sale of immovable         property  is a contract that a sale of such  property  shall         take  place  on terms settled between the parties.   It  has         however been specifically provided in’ the section that such         a  contract "does not, of itself, create any interest in  or         charge  on such property."  It would therefore follow   that         the agreement for Sale in the present case did not give rise         to  any interest "in" the original holding of the  defendant         as  the  tenure-holder.  That being so, there  could  be  no         occasion for the transfer of any such "liability in" the new         land or ’chak’ of the defendant so aS to attract clause  (b)         of  section 30 of the Act.  In fact what the defendant,  was         bound  to  do  under section 55(1)(d) of  the  Transfer’  of         Property  Act  was to execute a proper  conveyance  of  "the         property"  which was the subject matter of the contract  for         sale,  and not of any other property.  So when he lost  that         property as a result of the scheme  of consolidation and his         rights,  title, interests ceased in that property by  virtue         of  clause (a) of section 30 of the Act, the  agreement  for         sale  became  void within the meaning of section 56  of  the         Contract Act, and it is futile to urge that they were  saved         by clause (a) or clause (b) of section 30 of the Act.             We have gone through the  decision  in  Shanti  Prasad’s         case  (supra),  but we find that while the High  Court  took         note  of  the fact that the right’s,  title,  interests  and         liabilities of the tenure-holder "in" his original  holdings         ceased,  and he acquired the same rights,  title,  interests         and  liabilities  "in" the ’chak’ allotted to him,  it  lost         sight  of the significance of the word "in", and the  afore-         said  provisions  of section 54 of the Transfer of  Property         Act,  and disposed of  the controversy before it by  raising         the other question whether "the tenureholder" was subject to         any liability "in respect of" his old holding. That was  why         it  fell  into the error of holding that  a  liability   was         created  in the original holding of the defendant,  and  was         transferred  his ’chak’ on his entering into its possession.         As  has been shown, that was an erroneous view which has  to         be rectified.             It  may  be mentioned that counsel  for  the  respondent         tried  to  argue that the defendant was bound to  execute  a         proper  conveyance  of his original holding, which  was  the         subject  matter  of  the agreement of  sale,  because,  that         holding had been substituted" by the ’chak’.         919         He  also  tried  to argue that the ’chak’  allotted  to  the         defendant  by  way of consolidation of his holding  was  the         same  as his original holding so that there was no  occasion         to  invoke section 30 of the Act. Counsel could not  however         support  his argument by reference to the law, or the  facts         of  the case.  Moreover he was unable to show how  he  could

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       raise  any  such argument when the special  leave  had  been         limited  to  the interpretation of clauses (a)  and  (b)  of         section 30 of the Act.             It  would  thus appear that the  plaintiff  respondent’s         suit for specific performance of the agreement for sale  was         liable  to  dismissal,  and the High Court as  well  as  the         courts  below erred in taking a contrary view.  Counsel  for         the appellant has however frankly stated at the bar that the         appellant  would  be   willing to refund  the   sum  of  Rs.         3000/- along with interest at 6 per cent per annum from  the         date of payment.             The appeal is allowed with costs, the impugned  judgment         of  the High Court is set aside, and the suit of  plaintiff-         respondent Hori Lal is dismissed in so far as it relates  to         specific  performance  of  the agreement for  sale.   It  is         however ordered that the defendant shall repay Rs. 3000/- to         the  plaintiff, along with interest at 6 per cent per  annum         from the date of payment, within three months from today.         M.R.                                            Appeal   al-         lowed.         920