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PATNA HIGH COURT
Anwar Ahmad and M.P.Varma JJ.
Basruddin Khan
Versus
Gurudarshan Das
Appeal from Original Decree No. 476 of 1964 ;
Decided On : MAY 23, 1969
SPECIFIC PERFORMANCE - CONTRACT FOR SALE - BONA FIDE PURCHASER - NOTICE - EXTENSION OF TIME - NOVATION OF CONTRACT - READINESS AND WILLINGNESS TO PERFORM - CONTINGENT CONTRACT - EQUITABLE CONSIDERATION.
Fact of the Case:
Plaintiff brought a suit for specific performance of a contract for sale of houses against defendants first party and defendants second party. Plaintiff claimed that he had entered into a contract with defendant No. 1, as the karta of the joint Hindu family of defendants first party, for the sale of the houses in question for a consideration of Rs. 10,500.00. Defendant No. 1 executed a Moahdanama (agreement for sale) in favor of the plaintiff. The sale deed was to be executed before the 15th April, 1959. Plaintiff paid a further sum of Rs. 250.00 to defendants 1 and 2 for the purchase of requisite stamps and to meet other expenses. However, defendants first party did not turn up at Bhabua on the 22nd June, 1959, for executing the sale deed. Plaintiff came to know that defendants second party obtained a sale deed from defendants first party with respect to the said houses by promising to pay a higher consideration. Defendants second party claimed that they had no knowledge of any prior contract for sale by defendants first party, in favor of the plaintiff.
Finding of the Court:
The court found that defendant No. 1 was the karta of the joint Hindu family of defendants first party and had the authority to represent the family in the transaction. The court also found that defendants second party had knowledge of the plaintiff's prior contract for sale and were not bona fide purchasers for value. The court further found that the extension of time for the execution of the sale deed did not amount to a novation of contract. The court also found that the plaintiff was ready and willing to perform his part of the contract. The court held that the contract was not a contingent contract and that the plaintiff was entitled to equitable consideration.
Issues: 1. Whether defendant No. 1 was the karta of the joint Hindu family of defendants first party and had the authority to represent the family in the transaction? 2. Whether defendants second party had knowledge of the plaintiff's prior contract for sale and were bona fide purchasers for value? 3. Whether the extension of time for the execution of the sale deed amounted to a novation of contract? 4. Whether the plaintiff was ready and willing to perform his part of the contract? 5. Whether the contract was a contingent contract? 6. Whether the plaintiff was entitled to equitable consideration?
Ratio Decidendi: 1. The court held that defendant No. 1 was the karta of the joint Hindu family of defendants first party and had the authority to represent the family in the transaction based on the following: a. Defendant No. 1 was the eldest son of the family and had been working on behalf of the family. b. Defendant No. 2, who claimed to be the karta, had executed a Mukhtarnama in favor of defendant No. 1 for entering into transactions related to the sale of the houses. c. Defendant No. 2 had ratified the transaction of defendant No. 1 by accepting and acknowledging the Moahdanama. d. The title deeds and other documents of the family concerning the houses were in possession of defendant No. 1. e. Defendant No. 1 had granted a receipt for the earnest money received from the plaintiff. 2. The court held that defendants second party had knowledge of the plaintiff's prior contract for sale and were not bona fide purchasers for value based on the following: a. Defendants second party were present at the time of the altercation between the plaintiff and defendants first party when the plaintiff complained about the non-execution of the sale deed. b. Defendant No. 9 had enquired about defendant No. 2 from a witness on the dates when the plaintiff was trying to meet defendants first party to execute the sale deed. c. Defendants first party had sold the houses to defendants second party for a higher consideration than what was being offered by the plaintiff. 3. The court held that the extension of time for the execution of the sale deed did not amount to a novation of contract based on the following: a. The extension of time was granted in an awkward situation in which defendants 1 and 2 found themselves. b. The time given in the deed of Moahdanama cannot be said to be the essence of the contract. c. The plaintiff was given the right to enforce the contract through Court and get a sale deed executed if it was not executed by the 15th April 1959. 4. The court held that the plaintiff was ready and willing to perform his part of the contract based on the following: a. The plaintiff had paid the earnest money and a further sum of Rs. 250.00 for the purchase of stamps. b. The plaintiff had shown his readiness to purchase the houses by advancing Rs. 250.00 to defendants 1 and 2 for the purchase of stamps. c. The plaintiff had stated in his evidence that he was still prepared to pay the balance of the consideration to the defendants first set and obtain a sale deed from them. 5. The court held that the contract was not a contingent contract based on the following: a. Defendant No. 1 had the requisite authority to enter into the transaction on behalf of all the co-sharers. b. The assurance given by defendant No. 1 that he would get the other members of his family also execute the sale deed was not an uncertain future event. 6. The court held that the plaintiff was entitled to equitable consideration based on the following: a. The plaintiff was an uneducated man, while defendants 1 and 2 were educated and had better knowledge of legal matters. b. The plaintiff had shown his readiness and willingness to perform his part of the contract.
Final Decision: The court dismissed the appeal and allowed the plaintiff's claim for specific performance of contract.
M.P.Varma, J.
1. Both the appellants were defendants second party in Title Suit No. 23/2 of 1960/62, which had been brought against them as well as defendants first party by the plaintiff Gurudarshan Das, for specific performance of a contract for sale, and the learned Additional Surbordinate Judge of Sasaram has decreed the suit with costs.
2. Briefly stated, the case of the plaintiff was that the defendants first party constituted a joint Hindu family. Father of defendants 1 and 2, Sukhdeo Singh, lived at Bhabua, in the district of Shahabad, and practised there as a Mukhtar. He lived in the houses described in Schedule A to the plaint, namely, Holding Nos. 3 and 3-A of Ward No. 3, in the town of Bhabua, standing on an area of about one katha and seventeen dhurs of Sand. After his death, these houses were not required by the family of defendants first party, who are residents of the district of Deoria in Uttar Pradesh, and fell in disrepair. There were other legal necessities to meet, and so defendant No. 1, as Karta of the joint family, contracted with the plaintiff to sell the said houses for a consideration of Rs. 10,500.00, out of which the defendant No. 1 received Rs. 1,855.00 from the plaintiff as earnest money. Defendant No. 1 executed a Moahdanama (agreement for sale) dated the 15th October, 1958, in favour of the plaintiff. It was stipulated in this agreement of sale that, out of the balance of the consideration money, Rs. 2,500.00 would be left in deposit with the plaintiff for payment to the rehandars of the defendants first party, namely, Data Singh and Husnain Mian, and the remain-Ing Rs. 6,145.00 would be paid by the plaintiff to the defendants first party at the time of execution and registration of the sale deed, which was to be executed before the 15th April, 1959. It was also undertaken by defendant No. 1 that he would get the sale deed executed in favour of the plaintiff by all the co-sharers of the property. Plaintiff was always willing to get the sale deed executed, after paying the balance of the consideration money, but till the 15th April, 1959, either defendant No. 1 or defendant No. 2 did not appear at the Bhabua Sub-Registry office to get the sale deed executed and registered. A few days later on the 19th June 1959 both defendants 1 and 2 met the plaintiff at Bhabua and some altercation took place between them because each party was accusing the other for not keeping his part of the promise. On the intervention of some persons present there including defendants second party, it was settled that the sale deed would be executed in favour of the plaintiff on the 22nd June, 1959. Plain- tiff paid a further sum of Rs. 250.00 to defendants 1 and 2 for the purchase of requisite stamps and to meet other expenses. Defendants 1 and 2, on their part, paid Rs. 220-8-0 to Shri Krishna Singh, a deed writer, for the purchases of stamps. Defendants first party, however, did not turn up at Bhabua on the 22nd June, 1959, for executing the sale deed. Plaintiff, thereafter, came to know that defendants second party obtained a sale deed from defendants first party with respect to the said houses by promising to pay a higher consideration. This sale deed was executed not at Bhabua, but at Arrah on the 26th June, 1959. According to the plaintiff, the whole transaction was a fraudulent and collusive one, because the defendants second party did not pay anything in cash on the date of the execution of the sale deed. Defendants second party had knowledge of the plaintiffs Moahdanama from the very beginning and even when the time for execution of the sale deed was extended, they were present at the spot. In that view of the matter, defendants second party were not bona fide purchasers for value. They paid no consideration for the sale deed which they took with notice Of the plaintiffs Moahdanama. Plaintiff, therefore, brought the suit for specific performance of the contract for sale.
3. The suit was contested by defen
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