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1975 Supreme(Mad) 259

Madras High Court
K. VEERASWAMI,NATARAJAN
K.Appa Rao - Appellant
Versus
P.Balasubramania Gramani - Respondent
Decided On : 04/07/1975

A compromise decree in a partition suit cannot be regarded as collusive merely because it is against the interest of a third party who had entered into an agreement to purchase a share in the properties prior to the partition suit, if the parties to the partition suit were entitled to allotment of the properties as per their agreement under the personal law.

Headnote:

SPECIFIC PERFORMANCE - AGREEMENT TO SELL IMMOVABLE PROPERTY - GROSSLY INADEQUATE CONSIDERATION - SECTION 28 OF THE SPECIFIC RELIEF ACT, 1877 - COMPROMISE DECREE IN PARTITION SUIT - SECTION 27 (B) OF THE SPECIFIC RELIEF ACT, 1877 - APPLICABILITY.

Fact of the Case:

The plaintiff sought specific performance of three agreements to sell certain shares in joint family properties. The agreements were executed on the same day as a preliminary decree in a partition suit involving the properties was passed. The plaintiff was not impleaded as a party in the partition suit, which eventually ended in a compromise decree allotting the shares agreed to be sold to the plaintiff and defendants 1 and 2 in the partition suit.

Finding of the Court:

The trial court found that the agreements were not genuine and dismissed the suit. The first lower appellate court held that the agreements were genuine but declined to grant specific performance due to grossly inadequate consideration. The second appellate court concurred with the first appellate court and dismissed the appeal.

Issues: 1. Whether the agreements were for grossly inadequate consideration, so that specific performance should not be ordered in view of Section 28 of the Specific Relief Act, 1877? 2. If the first question is answered in favor of the appellants, whether they could still succeed in light of the compromise decree and Section 27 (b) of the Specific Relief Act, 1877?

Ratio Decidendi: 1. The court held that the consideration for the agreements was grossly inadequate, as the plaintiff himself had valued one of the properties covered by the agreements at more than Rs. 8,000, while the consideration for each agreement was only Rs. 800 for a 1/5 share. 2. The court declined to apply Section 27 (b) of the Specific Relief Act, 1877, to the case, holding that a coparcener allottee at a partition of a particular property as and for his share cannot be regarded as claiming under any one or other of the coparceners, who, on partition, were allotted other properties.

Final Decision: The appeals were dismissed.

Judgement

K. VEERASWAMI, C. J.:- These are appeals by the legal representatives of the plaintiff under the Letters Patent. The plaintiff or his legal representatives as the case may be, had failed in all the Courts below to get specific performance of the three agreements, all executed on 28-10-1957, to sell certain shares, which the executants of the agreements had in certain joint family properties. The three agreements put together had undertaken an obligation to convey to the plaintiff a total of 3/5 share in those properties. At the time the agreements were entered into, O. S. No. 150 of 1952, which was a suit for partition by two of the coparceners, was pending, and in fact, a preliminary decree had been passed in 1954. Defendants 3 to 7 forming one unit, defendants 8 and 9 forming another unit and defendant 10 in that suit for partition, who held each 1/5 share, were the executants. On 18-4-1958, the plaintiff sought to get himself impleaded as a party defendant in the partition suit but without success. The suit for partition eventually ended in a compromise decree dated 1-5-1958, the effect of which was that whatever share the executants of the agreements had agreed to convey had in fact been allotted to the plaintiff and defendants 1 and 2 in that suit. The trial Court found that the agreements were not genuine and dismissed the suit. In passing, it had also observed that if the agreements were genuine,

there would be no difficulty in holding that the compromise decree in the partition suit would be a collusive one against the interest of the plaintiff and that, as such, it would not bind him. The first lower appellate Court did not share that view, but held that the agreements were genuine. But it being of opinion, that the consideration for the agreements was grossly inadequate, it declined to grant a decree for specific performance. In second appeal, Srinivasan, J. concurred with the first appellate Court and dismissed it.

2. Two questions which arise for our decision are:-1. Whether the agreements aforesaid were for grossly inadequate consideration, so that specific performance of the agreements should not be ordered in view of Section 28 of the Specific Relief Act. 1877: and 2. If that question were answered in favour of the appellants, whether they could still succeed in the light of the compromise decree and Section 27 (b) of that Act.

3. In order to appreciate the first question, the related facts are briefly these. The agreements were to convey a total of 3/5 share in what was called Samadhi Thottam and Panantope. The first was of an extent of 7 acres 26 cents. Pending, the partition suit, there was a Receiver appointed. The plaintiff has offered Rs. 7.250 for the first property to the Receiver, and at a subsequent stage, the very same plaintiff enhanced his offer to Rs. 8,500 Panantope, we find, was of an extent of about 5 acres. But this item of property had been sold away by the Receiver, and it does not form the subject-matter of the suit. The first appellate Court, with whom Srinivasan, J. agreed, held that in view of the offer made by the plaintiff himself for one of the properties covered by the agreements, each of which was executed for a consideration of only Rs. 800 for Samadhi thottam the consideration was not only inadequate, but grossly inadequate which attracted the provisions of Section 28 of the old Specific Relief Act.

4. Specific performance of an agreement to sell immovable property is not invariably ordered as a matter of right. The relief is discretionary, but the discretion being a judicial one, it has to be exercised neither arbitrarily nor unreasonably, but according to law and reason. The Specific Relief Act has provided certain guidelines as to when specific performance could be ordered and when not. Section 28 is one of them, which provides what parties cannot be compelled to perform. Specific performance of an agreement cannot be enforced against a party thereto if the consideration to









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