//
you're reading...
legal issues

Specific Relief Act, 1963: s.12 – Applicability of – Specific performance of contract – Agreement of sale of a house – Representation by vendor that he was absolute owner of the house – Receipt of advance money by vendor – Vendor’s wife sought cancellation of agreement on the ground that the vendor was not absolute owner of the house and she owned half share in the house which, by virtue of s.14 of Hindu Succession Act, was received by her on death of her son – Suit for specific performance of contract by vendee – Held: Vendee cannot seek specific performance of contract of entire house, and decree for specific performance can be granted only to the extent of vendor’s share in the house – The husband under such circumstances, in the absence of any express authority from the wife could not alienate or otherwise dispose of her Streedhana property – It was not a case of the performance of a part of the contract but the whole of the contract insofar as the vendor was concerned since he had agreed to sell the property in its entirety but it later turned out that vendor had only half share in the property and his wife held the remaining half – Thus, the agreement was not binding on the vendor’s wife – s.12 was not applicable in facts of the case -s.41 of the Transfer of Property Act was also not applicable since it was not the case of the vendee that the vendor was the ostensible owner of the property – Right to invoke s.4 of the Partition Act also not available to the vendee – Transfer of Property Act, 1882 – s.41 – Partition Act, 1893 – s.4 – Hindu Succession Act, 1956 – s.14 – Contract. The original defendant no.1-vendor entered into an agreement of sale with the original plaintiff-vendee in respect of the suit house for a consideration of Rs.1 lac. The vendee paid Rs.10,000/- as advance and agreed to pay remaining consideration of Rs.90,000/- by 20.6.1984 whereupon sale deed was to be executed and registered. On 24.3.1984, the defendant no.2-vendor’s wife sent a notice to the vendee as well as to the vendor calling upon them to cancel the agreement as she held half share in the property having devolved upon her on the death of her son. She also stated in the notice that she was not willing to sell her share and was ready to purchase the share of her husband-vendor. The vendee sent reply to her notice that the agreement was binding on her and notice given by her was in collusion with the vendor. His correspondence with the vendor failed and he filed the suit for specific performance of the agreement against the vendor and his wife. He prayed for a direction to them to execute the sale deed and in the alternative, he prayed for refund of the advance amount along with interest. The vendor and his wife filed separate written statements. The vendor admitted execution of agreement and receipt of advance amount of Rs. 10,000/-. The vendor further averred that he had one son, who had half share in the property; the son died intestate and after his death, his half share devolved upon his wife and, thus vendodr did not have absolute title to the property and, therefore, was unable to execute the sale deed. The trial court decreed the suit with a direction to the vendor and his wife to execute registered sale deed as per the terms of the sale agreement. Aggrieved, the vendor’s wife filed appeal before the High Court. The High Court recorded the findings that the property was ancestral property in which the deceased son had half share on whose death that share devolved upon the vendor’s wife; the vendee could not be said to have any knowledge that the vendor’s wife had half share and in the absence of any express authority from his wife, the vendor could not alienate or otherwise dispose of her share in the property. The High Court finally held that the agreement of sale although covered the entire property but as the vendor had only half share and interest in the property, the decree for specific performance could only be granted to the extent of the vendor’s share in the property. The instant appeals were filed by the legal representatives of the vendee and also by the vendor’s wife challenging the order of the High Court.

we can use it for the great architectural marv...

Image via Wikipedia

 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO. 6088 OF 2003

Kammana Sambamurthy (D) By LRs. ...Appellants

 Versus

Kalipatnapu Atchutamma (D) & Ors. ...Respondents

 WITH

 CIVIL APPEAL NO. 7265 OF 2003

 JUDGEMENT

R.M. Lodha, J.

 The original contesting parties are dead. They are 

now represented by their legal representatives. This is not 

unusual when litigation goes on for more than 25 years.

2. These two appeals, one by the legal representatives 

of Kammana Sambamurthy (original plaintiff) and the other by 

legal representatives of Kalipatnapu Atchutamma (original 

defendant no. 2) are directed against the judgment and decree 

dated December 23, 2002 passed by the High Court of 

Judicature, Andhra Pradesh, at Hyderabad. The High Court 

modified the judgment and decree dated July 2, 1991 passed by 

the Subordinate Judge, Anakapalli in a suit for specific 

performance of the contract. The husband of defendant no. 2 - 

Kalipatnapu Kamaraju - was original defendant no. 1; he is also 

dead. For convenience, we shall refer to the original plaintiff, `the 

vendee'; the original defendant no. 1, `the vendor' and the original 

defendant no. 2, `the vendor's wife'. The facts, as we find them, 

are shortly as follow. 

3. On February 19, 1984, the vendor entered into an 

agreement of sale (for short, `the agreement') with the vendee in 

respect of a tiled house consisting of six rooms, verandah, three 

mulgis upstair portion consisting of one room, hall and verandah 

inclusive of entire area pertaining to the house along with the 

entire vacant site situate in door no. 9.118 bearing assessment 

116 at village Payakaraopet, District Visakhapatnam (for short, 

`the property') for a consideration of Rs. 1,00,000/-. The vendee 

 2

paid Rs. 10,000/- in advance and the remaining consideration of 

Rs. 90,000/- was agreed to be paid at the time of execution and 

registration of the sale deed. The vendor in the agreement 

represented that he was absolute owner of the property. The 

agreement reads as follows :

 " SALE AGREEMENT DATED 19-2-1984

 Absolute Sale Agreement for Rs. 100000/- (Rupees one 

 lakh) in respect of the immovable property i.e. tiled 

 house, building upon the tiled house inclusive of entire 

 vacant site pertaining to the house got executed and 

 delivered on 19-2-84 in favour of Kommana Samba 

 Murthy S/o Kommana Adaiah r/o Namavaran Village, 

 Nekkapalli Tq. Visakhapatnam District.

 By

 Kalipatanapu Kamaraju s/o Kalipatnapu 

 Suryanarayana r/o Payakaraopet Village, Ditto Tq. Ditto 

 District is as follows :-

 II. As regards the property mentioned in para no. III in 

 schedule hereunder wherein I have possessed absolute 

 right and enjoyment and which fell to my share in the 

 partition effected in respect of immovable property with 

 my brothers about forty years back and ever since has 

 been in my possession and enjoyment and situated in 

 southern row of G.N.T. road of Payakaraopet village i.e. 

 the tiled house, six rooms, verandah, 3 mulgis upstair 

 portion consisting of one room, hall and verandah 

 inclusive of entire area pertaining to the house along with 

 the entire vacant site there of belonging to me. I have 

 settled to sell the same to you for the reason that I 

 attained old age and did not have any male children and 

 3

with intention to spend my rest of life with any one of my 

daughters and thinking that it is better to augment the 

cash balances as you offered today higher price, then I 

agreed there to and settled to sell the property to you.

Having regard for a sale consideration of Rs. 100000/- 

(Rupees one lakh only) this agreement of sale has been 

executed and delivered to you. Out of the sale 

consideration you have paid Rs. 10000/- as advance in 

the presence of undersigned witnesses at the time of 

execution of this sale agreement and the same was 

received by me. Therefore starting from this date you are 

requested to pay by 20-6-84 the balance sale 

consideration of Rs. 90000/- payable to me and shall get 

the sale deed executed as per your plan on your name or 

the name chosen by you on a proper stamp paper and 

shall get the same registered and delivered to you at 

your expense. Having assured you to the effect that 

excepting me, none have got any right over this property 

and having proved that the measurements, boundaries 

and circumstances in respect of the property are proper 

and correct and that this property had not been subjected 

to any alienation by way of mortgages etc. and that it is 

an undisputed property and after making you to so 

believe this sale agreement has been executed and 

delivered to you. The say situated on the rear side of the 

house i.e. an extent of 3.9 feet in width and 91 feet in 

length happens to be the common passage to this 

property and also to Nudala Chekeenam Chokka Rao. 

As requested by you I shall obtain the witness signatures 

of my daughters who are near to me and those who are 

living in far of areas, I shall get their voluntary consent 

letters in your favour.

III. Situated in door No. 9.118 bearing assessment 

116 a tiled house consisting of six rooms, verandah, 3 

mulgis, upper terrace portion consisting of a room, hall 

and verandah together with entire vacant site there of 

situated in southern row of G.N.T. road of Payakaraopet 

village and which has been included in Payakaraopet 

grama panchayat limits in Nekkapalli Tq. Visakhapatnam 

District and the boundaries whereof are as follows :-

 4

 East : 196 feet vacant site belonging to Venkata 

 Ramalinga Swamy and others

 South : 54 feet houses belonging to Nemmi 

 Gouraiah and others

 West : 196 feet house, site belonging to Bekivalla 

 Bapi Raju

 North : 37 feet, G.N.T. Road.

 The house and vacant site comprising within the 

 aforesaid boundaries has been sold to you. This is the 

 absolute sale agreement get executed and delivered with 

 my consent."

4. On March 24, 1984, the vendor's wife sent a notice to 

the vendee as well as vendor calling upon them to cancel the 

agreement as she held half share in the property having 

devolved upon her on the death of her son K. Appala 

Suryanarayana Murthy. She stated in the notice that she was not 

willing to sell her share and was ready to purchase the share of 

the vendor (her husband).

5. On March 28, 1984, the vendee replied to the notice 

sent to him by the vendor's wife and asserted that the agreement 

was binding on her and the notice has been given in collusion 

with the vendor. 

 5

6. On March 30, 1984, the vendee sent a notice to the 

vendor calling upon him to receive the balance sale consideration 

of Rs. 90,000/- from him and execute the sale deed along with his 

wife (if she has any right in the property) as per the terms of the 

agreement failing which he may be constrained to initiate action 

for necessary reliefs.

7. On April 21, 1984, the vendor sent reply to the 

vendee's notice dated March 30, 1984 informing him that he was 

unable to execute sale deed in the vendee's favour and he may 

take back sum of Rs. 10,000/- that was paid in advance.

8. The vendee then filed a suit for specific performance 

of the agreement against the vendor and his wife. He prayed for 

a direction to them to execute sale deed as per the terms of the 

agreement and get it registered after taking the remaining sale 

consideration of Rs. 90,000/- and if they fail to execute the same 

as per the directions of the court, then court may execute the 

sale deed after the vendee deposits the balance sale price within 

time allowed by the court. In the alternative, the vendee prayed 

for refund of the advance amount along with interest.

 6

9. The vendor and his wife filed separate written 

statements. The vendor admitted execution of agreement and 

receipt of advance amount of Rs. 10,000/-. The vendor averred 

that he had one son, K. Appala Suryanarayana Murthy who had 

half share in the property; he died intestate and after his death, 

his half share devolved upon his wife and thus he does not have 

absolute title to the property and unable to execute the sale deed.

10. The vendor's wife mainly set up the plea that her son 

died intestate and she succeeded to his share; her husband is not 

the absolute owner of the property; she is not willing to part with 

her share and she has already asked her husband to sell his 

share to her. 

11. The Subordinate Judge, Anakapalli in light of the 

pleadings of the parties framed issues and after recording the 

evidence and hearing the parties decreed the suit in the following 

manner :

 "In the result, the suit is decreed with costs and with a 

 direction that the defendants 1 and 2 shall execute 

 registered sale deed as per the terms of the sale 

 agreement dated 19-2-84 in favour of the plaintiff after 

 taking the remaining sale consideration of Rs. 90000/- 

 on or before 2-9-91 at the costs of the plaintiff and the 

 plaintiff is hereby directed to be get ready with the 

 remaining sale consideration by Rs. 90000/- and 

 7

 expenses for registration on or before 3-9-1991 by 

 informing the defendant for its registration......." 

12. The vendor's wife being not satisfied with the 

judgment and decree dated July 2, 1991 passed by the 

Subordinate Judge, Anakapalli preferred first appeal before the 

High Court. The High Court in view of the contentions raised 

before it formulated the following points for determination :

 "1) Whether the suit house is the ancestral property 

 of the first defendant?

 2) Whether the suit house contract of sale binds the 

 second defendant?

 3) Whether the second defendant has got the right 

 to purchase the half share of the first defendant?

 4) Whether the suit contract of sale is not voidable 

 having been made by the ostensible owner, the 

 first defendant and as the plaintiff acted in good 

 faith?

 5) To what relief?"

13. The High Court recorded the findings namely, that on 

the basis of the factual matrix and the evidence adduced by the 

defendants, it was made out that the vendor and his wife had a 

son who died intestate and that the property was ancestral 

property in which the deceased son had half share and that share 

 8

devolved upon the vendor's wife; the vendee cannot be said to 

have any knowledge that the vendor's wife had half share and in 

the absence of any express authority from his wife, the vendor 

could not alienate or otherwise dispose of her share in the 

property. The High Court did not accept the plea of the vendee 

that vendor had implied authority or that vendor's wife was 

estopped from raising the plea that the agreement did not bind 

her. The High Court finally held that the agreement of sale 

although covered the entire property but as the vendor had only 

half share and interest in the property, the decree for specific 

performance could only be granted to the extent of the vendor's 

share in the property. The High Court, accordingly, allowed the 

appeal preferred by vendor's wife to the extent of half share in the 

property and the judgment and decree of the Subordinate Judge 

was confirmed to the extent of half share of the vendor in the 

property.

14. We heard Mrs. Sudha Gupta, learned counsel for the 

legal representatives of the vendee and Mr. A.T.M. Sampath, 

learned counsel for the legal representatives of the vendor's wife. 

15. Mr. A.T.M. Sampath, learned counsel for the vendor's 

 9

wife would have us believe that the agreement is not an 

agreement of sale but an invitation to offer as it is only signed by 

the vendor. We are not impressed. That the agreement is an 

agreement of sale and there has been concluded contract in this 

regard between the vendor and vendee has not at all been in 

dispute. The vendor in his reply dated April 21, 1984 to the notice 

received from the vendee did not dispute the nature of the 

agreement. In the plaint, the vendee made the following 

averment with regard to the agreement:

 ".......The 1st defendant offered to sell the plaint 

 schedule house and site representing that he has got 

 absolute title in them and that no others have got title 

 in the said property. The plaintiff accepted to purchase 

 the property after making due inquiries. After mutual 

 deliberations the plaintiff offered to purchase the suit 

 schedule property for one lakh rupees. The first 

 defendant executed sale agreement on 19-2-1984 in 

 favour of the plaintiff, agreeing to sell the suit property 

 to plaintiff for the said sum of one lakh and also 

 agreeing to receive the balance of consideration on or 

 before 20-6-1984 and to execute registered sale deed 

 at the expense of the plaintiff in favour of plaintiff or to 

 his order and also undertaking to get his daughters 

 and make them attest the sale deed. The plaintiff paid 

 Rs. 10000/- (Rupees ten thousand only) as advance at 

 the time of the said sale agreement. The first 

 defendant undertook to deliver possession of the suit 

 schedule property on the date of sale deed......."

 10

The vendor filed written statement and therein he admitted 

execution of the agreement in the following words :

 ".....The averments that this defendant executed a sale 

 agreement on 19-2-1984 in favour of plaintiff offering to 

 sell the schedule house and site for a sale consideration 

 of Rs. 100000/- (one lakh) agreeing to receive the 

 balance of sale consideration on or before 20-6-1984 

 and to execute a sale deed at the expense of the 

 plaintiff and that on the date of sale agreement received 

 an amount of Rs. 10000/- towards sale consideration 

 are true....."

16. As a matter of fact, in view of the admitted position 

between the parties, particularly, the vendor and vendee about 

the agreement, no issue was struck by the trial court in this 

regard nor any argument was advanced on behalf of the vendor 

before the trial court that the agreement was not an agreement of 

sale or that the same did not tantamount to concluded contract. 

Insofar as vendor is concerned, he did not challenge the 

judgment and decree passed by the trial court. It was only 

vendor's wife who filed appeal being not satisfied with the 

judgment and decree dated July 2, 1991 passed by the 

Subordinate Judge before the High Court. Even before the High 

Court, no plea was raised by the vendor's wife or the vendor that 

 11

the agreement is not a concluded contract for sale of the 

property. The submission of Mr. A.T.M. Sampath that the 

agreement is not an agreement of sale but an invitation to offer is 

afterthought and does not merit further consideration. 

17. As to whether the property is ancestral property or 

not, the finding of the two courts is divergent. The trial court held 

that the property was not the ancestral property but the High 

Court on reappraisal of the evidence did not agree with that 

finding. The High Court considered the matter thus :

 ".......Whatever may be the reason behind in getting 

 Ex.A2 notice issued while seeking to avoid Ex.A2 

 transaction, the legal position cannot be doubted that half 

 share in the suit house was devolved upon the second 

 defendant on account of the death of her son, in as much 

 as by birth, the son got half share along with his father in 

 the ancestral property and the mother succeeded to the 

 same as Class I heir. It is also clear that under section 14 

 of the Hindu Succession Act, the share devolved upon 

 the mother would become the Streedhana property. The 

 husband under such circumstances, in the absence of 

 any express authority from the wife cannot alienate or 

 otherwise dispose of the Streedhana property of his 

 wife......."

In our view, the High Court has considered this aspect in the right 

perspective and we find no justifiable reason to take a view 

different from the High Court.

 12

18. Having regard to the conclusion that the vendor's wife 

has got half share in the property and that she is not executant to 

the agreement, what needs to be considered is, whether the 

agreement binds the vendor's wife. According to vendee, the 

vendor had implied authority to enter into agreement of the 

property and the vendor's wife was clearly aware of that 

agreement and, therefore, she is estopped from raising the plea 

that she is not bound by that agreement. The High Court 

considered the evidence on record and held that no express or 

implied authority by the wife in favour of her husband is 

discernible from the facts and evidence. We agree. As regards 

applicability of Section 41 of the Transfer of Property Act, 1882 

(T.P. Act), the High Court observed that it was not even the case 

of the vendee that the vendor was the ostensible owner of the 

property and, therefore, Section 41 has no application. We think 

that High Court is right and in view of the aforenoticed findings of 

the High Court, the conclusion that vendee is not entitled to seek 

specific performance of the agreement to the extent of half share 

of vendor's wife cannot be faulted. 

 13

19. The crucial question in the case is whether the 

agreement could be enforced against the vendor to the extent of 

his half share in the property. The terms of the agreement show 

that the vendor represented to the vendee that he was absolute 

owner of the property that fell to his share in the partition effected 

with his brothers and he did not have any male child. The vendor 

assured the vendee that excepting him none has got any right 

over the property and he would obtain the witness signatures of 

his daughters and get their voluntary consent letters in his favour. 

It is clear from the evidence that the vendee had no knowledge 

that vendor's wife has half share in the property which devolved 

upon her on the death of her son intestate. 

20. Section 12 of the Specific Relief Act, 1963 reads as 

follows :

 "S.- 12. Specific performance of part of contract.- 

 (1) Except as otherwise hereinafter 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 by 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 

 14

 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 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. 

 (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." 

21. Section 12 prohibits specific performance of a part of 

a contract except in the circumstances under sub-sections (2), (3) 

 15

and (4). The circumstances mentioned in these sub-sections are 

exhaustive. Is Section 12 attracted in the facts and circumstances 

of the present case? We do not think so. The present case is not 

a case of the performance of a part of the contract but the whole 

of the contract insofar as the vendor is concerned since he had 

agreed to sell the property in its entirety but it later turned out that 

vendor had only half share in the property and his wife held the 

remaining half. The agreement is binding on the vendor as it is 

without being fractured. As regards him, there is neither 

segregation or separation of contract nor creation of a new 

contract. In Kartar Singh v. Harjinder Singh & Ors.1, this Court 

was concerned with a case where vendor--brother and a sister 

had each half share in the suit properties. The agreement for the 

sale was executed by the brother concerning the suit properties in 

which the sister had half share. The sister was not executant to 

the agreement; rather she refused to accept the agreement. The 

question for consideration before this Court was whether 

agreement could be enforced against the vendor--brother to the 

extent of his half share. This Court considered Section 12 and 

held as under :

1 (1990) 3 SCC 517

 16

 "5. We are, therefore, of the view that this is not a case 

 which is covered by Section 12 of the Act. It is clear 

 from Section 12 that it relates to the specific 

 performance of a part of a contract. The present is 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, 

 namely, the respondent is concerned. Under the 

 agreement, he had contracted to sell whole of his 

 property. The two contracts, viz. for the sale of his share 

 and of his sister's share were separate and were 

 severable from each other although they were 

 incorporated in one agreement. In fact, there was no 

 contract between the appellant and the respondent's 

 sister and the only valid contract was with respondent in 

 respect of his share in the property.

 6. As regards the difficulty pointed out by the High 

 Court, namely, that the decree of specific performance 

 cannot be granted since the property will have to be 

 partitioned, we are of the view that this is not a legal 

 difficulty. Whenever a share in the property is sold the 

 vendee has a right to apply for the partition of the 

 property and get the share demarcated. We also do not 

 see any difficulty in granting specific performance 

 merely because the properties are scattered at different 

 places. There is no law that the properties to be sold 

 must be situated at one place. As regards the 

 apportionment of consideration, since admittedly the 

 appellant and respondent's sister each have half share 

 in the properties, the consideration can easily be 

 reduced by 50 per cent which is what the first appellate 

 court has rightly done."

22. Kartar Singh1 has been followed by this Court in 

Manzoor Ahmed Magray v. Ghulam Hassan Aram & Ors2. In 

Manzoor Ahmed Magray2, this Court considered the matter in the 

context of Section 15 of J & K Specific Relief Act, 1977 which is 

2 (1999) 7 SCC 703

 17

pari materia to Section 12 of Specific Relief Act, 1963. This Court 

said :

 ".......Hence, there is no bar for passing the decree for 

 specific relief with regard to 1/3rd or 2/3rds share owned 

 by the contracting party for which he can execute the 

 sale deed. For the share of Ghulam Rasool (brother of 

 Defendant 1) admittedly, no decree is passed by the 

 High Court. Dealing with the similar contention where 

 agreement was for sale of property belonging to a 

 brother and sister each having a half share, the Court in 

 Kartar Singh v. Harjinder Singh 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 of 

 specific performance of the whole of the contract so far 

 as the contracting party is concerned. Further, 

 whenever a share in the property is sold the vendee has 

 the 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."

23. In the case of A. Abdul Rashid Khan (Dead) & Ors. v. 

P.A.K.A. Shahul Hamid & Ors.3, this Court held that even where 

any property is held jointly and once any party to the contract has 

agreed to sell such joint property by agreement, then, even if the 

other co-sharer has not joined, at least to the extent of his share, 

the party to the contract is bound to execute the sale deed. In that 

3 (2000) 10 SCC 636

 18

case, the suit property originally belonged to one Aziz Khan. On 

his death, his heirs under the Muslim law--nine sons and two 

daughters inherited that property. The sons agreed to sell that 

property to the first respondent therein. However, some dispute 

arose between the parties and that necessitated the first 

respondent therein to file the suit for specific performance in 

which the executants of the agreement as well as the two 

daughters of Aziz Khan were impleaded as defendants. It was 

admitted case that the daughters of Aziz Khan had not joined in 

the agreement of sale. The trial court dismissed the suit by 

holding that the agreement was indivisible and could only be 

enforced if the daughters of Aziz Khan agreed. The first 

respondent therein preferred an appeal before the High Court 

against the judgment and decree of the trial court. The High Court 

held that he had not pleaded and proved that the daughters of 

Aziz Khan had agreed to sell the suit property and hence, it 

cannot be held that the said agreement was by all the heirs of 

Aziz Khan. The two daughters of Aziz Khan were held not bound 

by the agreement. However, the High Court held that insofar as 

the executants of the agreement (sons of Aziz Khan) were 

 19

concerned they were bound by it and valid and enforceable 

contract existed between the first respondent and the sons of 

Aziz Khan. The High Court, accordingly, granted decree for 

specific performance to the extent of 5/6th shares which Aziz 

Khan's sons had in the property. This Court affirmed the decree 

of the High Court and it was held that plaintiff's suit for specific 

performance to the extent of 5/6th share was rightly decreed by 

the High Court warranting no interference. While holding so, this 

Court relied upon earlier decision in the case of Manzoor Ahmed 

Magray2.

24. In view of the above decisions of this Court and the 

facts and circumstances which have already been noticed by us, 

in our opinion, there is no impediment for enforcement of the 

agreement against the vendor to the extent of his half share in 

the property. However, Mr. A.T.M. Sampath, learned counsel for 

the vendor's wife placed great reliance upon HPA International v. 

Bhagwandas Fateh Chand Daswani & Ors.4 and, particularly, the 

following paragraphs of the report.

 "67. If the vendee intended to seek conveyance 

 separately of the life interest of the vendor, the earliest 

 opportunity for him was when he had received notice 

4 (2004) 6 SCC 537

 20

dated 11-9-1979 sent through the lawyer by the vendor 

cancelling the contract. Assuming that at that time he 

could not opt for lesser relief as the suit for sanction was 

pending, he could have, in any case, opted for 

conveyance of life interest of the vendor soon after he 

came to know of the negotiations for sale with Bob 

Daswani, which took place in the presence of one of the 

partners of the plaintiff vendee. Even after deriving the 

knowledge of the execution of the sale deed dated 29-

12-1979 Ext. D-1, the option to obtain lesser relief of 

transfer of life interest was not exercised. It was 

exercised as late as on 25-11-1986 by filing an affidavit 

and at the time when pleadings of the parties were 

completed and the joint trial in the two suits had already 

commenced. During long pendency of the suits between 

1979 to 1986, the parties interested in the property 

changed their positions. The vendor by executing a 

registered sale deed in favour of the subsequent vendee 

got his public dues paid to relieve the pressure on the 

property and obtained market price of the property. After 

obtaining possession of the property pursuant to the sale 

deed, the subsequent vendee has raised construction 

and inducted tenants. Accepting the legal stand based 

on Sections 90, 91 and 92 of the Indian Trusts Act that 

the subsequent vendee, being a purchaser with 

knowledge of prior agreement, is holding the property as 

a trustee for the benefit of the prior vendee, the vendor, 

who changed his position by effecting a subsequent sale 

cannot be compelled to convey his life interest when 

such lesser relief was not claimed at the earliest 

opportunity and the terms of the contract did not 

contemplate transfer of life interest alone."

98. The above argument has no merit and the 

aforesaid decision is hardly of any help to the vendee. 

This is not a case where the vendor had only right of 

spes successionis and after execution of agreement of 

sale, he subsequently acquired full interest in the 

property to be held bound by Section 43 of the Transfer 

of Property Act. In the case before us, the reversioners 

were not parties to the agreement of sale. When in the 

suit for sanction to transfer their interest they were made 

parties and were noticed, they expressly objected to the 

 21

 proposed transfer. No principle of estoppel or provisions 

 of Section 43 of the Transfer of Property Act can, 

 therefore, operate against them. So far as the 

 subsequent vendee is concerned, in the course of suit, 

 he was pushed to a position in which he could not take a 

 stand that he had no knowledge of the prior agreement 

 with the vendee but he has separately purchased life 

 interest from the vendor and obtained separate release 

 deeds, on payment of consideration, from the 

 reversioners. The reversioners being not parties to the 

 sale agreement, Ext. P-1 entered into with the vendee, 

 the latter could not enforce the contract, Ext. P-1 against 

 the former." 

It is sufficient to say that the agreement of sale and the facts 

which their Lordships had to consider in the case of HPA 

International4 were in many respects different from the agreement 

in the present case. In that case vide agreement of sale (Exhibit 

P1) therein, full interest in the property, i.e. life interest of the 

vendor and spes successionis of reversioners with sanction of the 

court was agreed to be sold. The reversioners were not parties to 

the sale agreement that was entered with the vendee therein. 

The parties were conscious that the vendor had only life interest 

in the property and he could not convey more than his own 

interest. The court found that vendee entered into a speculative 

deal for obtaining full interest in the property depending upon the 

sanction to be granted by the court. In the backdrop of these 

 22

facts, this Court observed in paragraphs 68, 69 and 70 of the 

report thus :

 "68. On duly appreciating the evidence on record, 

 construing specific terms of the contract and 

 considering the conduct of the parties, we have arrived 

 at the conclusion that the rescission of the contract, due 

 to non-grant of sanction by the Court within two years 

 after execution of the contract and filing of the suit for 

 sanction, was not an act of breach of contract on the 

 part of the vendor to justify grant of relief of specific 

 performance of the contract to the prior vendee.

 69. We are also of the view that the plaintiff vendee, by 

 his own act in the pending suits, was responsible for 

 rendering the suit for sanction as infructuous. He was 

 guilty of lapse in not seeking conveyance of life interest 

 of the vendor at the earliest opportunity when notice of 

 rescission of the contract was received by him and later 

 when he derived the knowledge of execution of 

 registered sale deed in favour of the subsequent 

 vendee. The option was exercised conditionally in the 

 midst of the joint trial of the two suits.

 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."

The Court further observed in paragraph 100 of the report as 

follows :

 23

 "100. In the case before us, we have not found that the 

 vendor was guilty of rendering the suit for sanction 

 infructuous. It did terminate the contract pending the suit 

 for sanction but never withdrew that suit. The vendee 

 himself prosecuted it and rendered it infructuous by his 

 own filing of an affidavit giving up his claim for the 

 interest of reversioners. In such a situation where the 

 vendor was not in any manner guilty of not obtaining the 

 sanction and the clause of the contract requiring the 

 Court's sanction for conveyance of full interest, being for 

 the benefit of both the parties, the contract had been 

 rendered unenforceable with the dismissal of the 

 sanction suit."

HPA International4 , thus, have no considerable bearing on the 

case in hand.

25. Mr. A.T.M. Sampath, learned counsel for vendor's 

wife also argued that she had offered as joint owner to the 

undivided entire property to purchase the half share of her 

husband under the Partition Act, 1893 and Hindu Succession 

Act, 1956. He would submit that at the earliest point of time both 

in a notice as well as in the written statement she has raised the 

plea of pre-emption to buy her husband's share and demanded 

the vendee as well as her husband to sell undivided half share to 

her. In this regard, he further submitted that the property is an 

undivided dwelling house and the court should not grant specific 

performance against the co-owners of the family dwelling house. 

 24

He relied upon Ghantesher Ghosh v. Madan Mohan Ghosh & 

Ors.5, Pramod Kumar Jaiswal and Ors. v. Bibi Husn Bano and 

Ors.6 and Shanmughasundaram & Ors. v. Diravia Nadar (Dead) 

By LRs. & Anr.7.

26. The above submission was also canvassed before 

the High Court. The High Court considered this aspect in the 

following manner :

 "It is too premature for the defendant to have invoked 

 the provisions of section 4 of the Partition Act. The 

 plaintiff's right has not been crystallized yet and he 

 cannot at this stage be considered as a purchaser of the 

 undivided interest of the first defendant. In order to 

 validly invoke section 4 of the Partition Act, the following 

 five conditions have to be satisfied :

 1. A co-owner having undivided share in the family 

 dwelling house should effect transfer of his undivided 

 interest therein;

 2. The transferee of such undivided interest of co-

 owner should an outsider or stranger to the family;

 3. Such transferee much sue for partition and 

 separate possession of the undivided share transferred 

 to him by the co-owner concerned; 

 4. As against such a claim of the stranger 

 transferee, any member of the family having undivided 

 share in the dwelling house should put forward his claim 

 of preemption by undertaking to buy out the share of 

 such transferee and;

5 (1996) 11 SCC 446

6 (2005) 5 SCC 492

7 (2005) 10 SCC 728

 25

 5. While accepting such a claim for preemption by 

 the existing co-owners of the dwelling house belonging 

 to the undivided family, the Court should make a 

 valuation of the transferred share belonging to the 

 stranger transferee and made the claimant co-owner 

 pay the value of the share of the transferee so as to 

 enable the claimant co-owner to purchase by way of 

 pre-emption and said transferred share of the stranger 

 transferee in the dwelling house belonging to the 

 undivided family so that the stranger-transferee can 

 have no more claim left for partition and separate 

 possession of his share in the dwelling house and 

 accordingly can he effectively deny entry in any part of 

 such family dwelling house.

 The whole object seems to be to preserve the 

 privacy of the family members by not allowing a 

 stranger to enter in a part of the family dwelling house. 

 Such is not the situation obtaining in this case having 

 regard to the context. I am reinforced in my above view 

 by the judgment of the Apex Court in Babulal V. 

 Habibnoor Khan, 2000 (5) SCC 662. The apex Court 

 placing reliance upon its earlier judgment in Ghantesher 

 Ghosh V. Madan Mohan Ghosh, 1996 (11) SCC 446 

 reiterated the five essential requisites. For the foregoing 

 reasons, the contention of the learned counsel merits no 

 consideration." 

In our opinion, the High Court has rightly concluded that at the 

present stage, Section 4 of the Partition Act, 1893 is not attracted. 

It is only after the sale deed is executed in favour of the vendee 

that right under Section 4 of the Partition Act, 1893 may be 

available. Similarly, insofar as vendee is concerned, he has right 

to apply for partition of the property and get the share demarcated 

 26

only after sale deed is executed in his favour. Section 44 of the 

T.P. Act is also of no help to the case of vendor's wife.

27. There are two other points raised by Mr. A.T.M. 

Sampath. Learned counsel for the vendor's wife would contend 

that it has not been proved that vendee has been ready and 

willing to purchase the property all along; the vendee did not 

produce passbook showing that he had sufficient funds and the 

vendee did not deposit the remaining consideration of Rs. 

90,000/- within three months of the decree granted by the trial 

court. The argument of Mr. A.T.M. Sampath has no merit at all 

and seems to have been raised in desperation. As a matter of 

fact, as early as on March 30, 1984, the vendee sent a notice to 

the vendor calling upon him to receive the balance sale 

consideration of Rs. 90,000/- from him and execute the sale 

deed. In the plaint, a specific averment with regard to readiness 

and willingness has been made by the vendee which was not 

even controverted by the vendor in the written statement. No 

such issue has been raised nor it was pressed by the vendor 

before the trial court. Even the vendor's wife in the appeal before 

the High Court did not raise any argument in this regard. At the 

 27

time of hearing of these appeals, we were informed by the 

counsel for the vendee that the balance sale consideration of Rs. 

90,000/- has been deposited by the vendee on July 18, 1991 vide 

T.R. Challan No. 1159 before the trial court and has been lying 

there for more than 19 years. This argument of Mr. A.T.M. 

Sampath is, therefore, rejected.

28. The other point argued by Mr. A.T.M. Sampath is that 

the decree granted by the High Court would result in hardship 

since the vendor and vendor's wife are dead and their 10 

daughters are residing in the property. We are afraid these facts 

hardly constitute hardship justifying denial of decree for specific 

performance to the extent of vendor's half share in the property. 

29. In all fairness to Mr. A.T.M. Sampath, it must be said 

that he cited some English decisions but, in our view, these 

decisions have no bearing at all in the present case and it is for 

this reason that we have not burdened this judgment by referring 

to those decisions.

30. In view of the above, we agree that the decision of the 

High Court is right and, consequently, both the appeals must be 

dismissed and are dismissed with no order as to costs.

 28

 .....................J.

 (P. Sathasivam)

 .................... J.

 (R.M. Lodha) 

NEW DELHI,

OCTOBER 8, 2010

 29

About advocatemmmohan

ADVOCATE

Discussion

Comments are closed.

Blog Stats

  • 2,897,037 hits

ADVOCATE MMMOHAN

archieves

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,907 other followers
Follow advocatemmmohan on WordPress.com
%d bloggers like this: