1954 Supreme(Pat) 76

PATNA HIGH COURT
Sinha and Banerji JJ.
Kedarnath Khetan
Versus
Jainarain Ram Lundia
Appeal From Original Order No. 284 of 1951 ;
Decided On : MAY 15, 1954

The obligations under a decree for specific performance of contract are mutual & con-current and that both the parties to the decree are in the position of decree-holders and judgment-debtors; in other words, the plaintiff is both a decree-holder and a judgment-debtor, and the defendant is likewise a judgment-debtor and a decree-holder.

Headnote:

SPECIFIC PERFORMANCE OF CONTRACT - EXECUTION OF DECREE - JURISDICTION OF TRANSFEREE COURT - POWERS OF TRANSFEREE COURT - FACTS NECESSARY FOR APPLICATION OF ORDER 21, RULE 32, CIVIL PROCEDURE CODE - NATURE OF DECREE IN SUITS FOR SPECIFIC PERFORMANCE OF AGREEMENT AND OBLIGATIONS, IF ANY, OF DECREE-HOLDER EXECUTING SUCH A DECREE - JURISDICTION OF COURT BELOW TO EXECUTE DECREE.

Fact of the Case:

A partnership firm, Marwari Brothers, consisting of Jainarain Ram Lundia, Gobardhan Das, Badri Prasad and Bisheshwar Nath, and the plaintiffs, Kedarnath Khetan and Firm Surajmal Sagarrnal, entered into an agreement to promote a company for starting a sugar mill in Champaran and to secure a managing agency for that partnership firm. The capital of this firm was Rs. 8,00,000/-, consisting of 800 shares of Rs. 1000.00 each. A sugar mill was started and incorporated as a private limited company under the name of Ganga Devi Sugar Mills Limited with the capital of Rs. 8,0,000.00 mentioned above. The parties fell out, and it was agreed that the Bettia group would sell their 350 shares to the plaintiffs and also their seven annas share in the firm Marwari Brothers. In August, 1941, a suit was instituted by the plaintiffs in the original side of the Calcutta High Court for specific performance of the contract to sell their shares mentioned above. In 1944, the suit was decreed, and the decree directed specific performance of the contract in respect of 269 shares only out of 350 shares, because some of the partners, it was found, had not entered into the agreement for selling their shares, and for transference of six annas four pies share in the Marwari Brothers on payment of the entire consideration money, Rs. 2,45,000/-, which was the price agreed upon for sale of the 350 shares and seven annas share in the Marwari Brothers. There were two appeals filed against this decree, one by Jainarain Ram and Madan Lal and another by Gobardhan Das. Out of these 269 shares, 150 shares belonged to Jainarain, 100 shares to Madan Lal and 19 shares to Gobardhan Das. The appeal filed by Jainarain and Madan Lal (Appeal No. 5 of 1945) was dismissed, and Appeal No. 3 of 1945, by Gobardhan Das, was allowed. In effect, the appellate decree directed specific performance in regard to 250 shares only belonging to Jainarain and Madan Lal and their five annas share in the Marwari Brothers on payment of the entire consideration money aforesaid. There was a further appeal by Jainarain and Madan Lal to the Privy Council, which was ultimately transferred to and heard by the Federal Court, and, on 6-5-1949, the appeal was dismissed. Madan Lal died during the pendency of this appeal, and his mother and heiress, Dhupeshwari Devi, was substituted in his place. The respondent Jainarain Ram Lundia applied for execution of the decree to the Court of the Subordinate Judge at Motihari, after getting the decree transferred to that Court under the provisions of the Code of Civil Procedure, on his own behalf as also on behalf of Dhupeshwari Devi. Objection was taken by the appellant, one of the plaintiffs, to the executability of the decree on several grounds.

Finding of the Court:

The Court below failed to consider the objections raised by the appellant on the ground that, as transferee Court, it had no option but to issue the order of attachment sought in the application for execution under Order 21, Rule 32, Civil P. C., and further that the objection, in regard to want of jurisdiction in the Court because the decree of the Federal Court was not sought to be executed, was a mere technicality. It further held that if the appellant had any objection, that should have been taken before the mother Court, and it observed that the appellant should get the differences settled by the proper Court within three months time from the date of the order, namely, 11-7-1951.

Issues: 1. Powers of the transferee Court executing the decree 2. Facts necessary for the application of Order 21, Rule 32, Civil P. C. 3. Nature of the decree in suits for specific performance of agreement and obligations, if any, of the decree-holder executing such a decree, and 4. The jurisdiction of the Court below to execute the decree.

Ratio Decidendi: 1. The Court executing the decree sent to it shall have the same powers as if it had been passed by itself. 2. Before the decree could be executed, it has to be proved that the appellant had an opportunity of obeying the decree and he has deliberately and consciously failed to obey it. 3. The obligations under such a decree are mutual & con-current and that both the parties to the decree are in the position of decree-holders and judgment-debtors; in other words, the plaintiff is both a decree-holder and a judgment-debtor, and the defendant is likewise a judgment-debtor and a decree-holder. 4. The decree must be executed as a whole or none at all; in other words, the decree for specific performance of contract can be executed only if the parties to it are in a position to fulfil their respective obligations.

Final Decision: The appeal is allowed, but in the circumstances, without costs.