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Madras High Court
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Sethu Parvathy Ammal - Appellant
Versus
Bajji K.Srinivasan Chettiar - Respondent
Decided On : 09/21/1971
SPECIFIC PERFORMANCE - AGREEMENT OF SALE - INCOMPLETENESS - MOTHER OF FIRST DEFENDANT NOT EXECUTING AGREEMENT - INTENTION OF PARTIES - ENFORCEABILITY OF AGREEMENT AGAINST EXECUTING DEFENDANTS - SPECIFIC RELIEF ACT, 1877, SECTION 15.
Fact of the Case:
Plaintiff sued for specific performance of an agreement to sell certain immovable property under Ex.A-1 dated 10-2-1965. The agreement was executed by the first defendant on behalf of himself and as guardian of his minor children, defendants 2 to 4, agreeing to sell the property to the appellant for a consideration of Rs.10,000. The agreement itself recites that out of the consideration of Rs.10,000, Rs.4000 had already been accounted for, by payment of Rs.2698-10 to the Nicholson Town Bank Ltd., Thanjavur, on behalf of the first defendant, a sum of Rs.500 to one Chakrapani Iyer on account of the first defendant and the balance of Rs.801-90 received by the first defendant by then. Ex.A-1 agreement contemplates the mother of the first defendant Sonna Ammal being a party to that agreement, but she has not actually signed the agreement. The trial court decreed the suit directing the plaintiff to deposit into court the balance of consideration of Rs.6000 and giving one month's time for that purpose. On appeal, the District Judge held that the agreement was incomplete, since the mother of the first defendant had not executed the same and therefore on the basis of such an incomplete agreement, the appellant herein would not be entitled to a decree for specific performance. However, at the same time, he passed a decree in favour of the appellant for a sum of Rs.4000 which the appellant had already parted with.
Finding of the Court:
The court held that the agreement, Ex.A-1 executed by the first defendant alone on his behalf and as guardian of the three minor children, namely, defendants 2 to 4, could not be said to be an incomplete one so as to prevent the appellant from obtaining a decree for specific performance even against those defendants who had signed the agreement. The court further held that the mother of the first defendant not executing Ex.A-1, Ex.A-1 can be specifically enforced against defendants 1 to 4 or whether the agreement is such that it is incapable of being enforced even against defendants 1 to 4 who had executed the document depended upon the intention of the parties.
Issues: 1. Whether the suit agreement of sale is not valid in law to enable the plaintiff to specifically enforce it and whether as such no decree for specific performance can be passed on the basis of such an agreement? 2. Whether the fifth defendant is not a bona fide purchaser for value.
Ratio Decidendi: 1. Whether a document was intended to take effect at least against those persons who had executed the same or it was intended to take effect only if all the parties contemplated to be made parties had executed the same was dependent upon the intention of the parties. 2. Where a document is proposed to be executed by several parties and only some of them execute and others do not, whether the document is binding on those at least who have executed it depends upon the intention of the parties; and 3. The intention that the document would be incomplete and would not be enforceable against the executing parties has to be established by the executing parties by showing that they would not have executed the agreement if the other party had not joined in the agreement or that they did not intend to be bound by the agreement until and unless the other who were proposed to be parties to the agreement joined in the execution.
Final Decision: The second appeal was allowed, the judgment and decree of the learned District Judge of West Thanjavur dated 16th December I968 in A.S.302 of 1968 were set aside and those of the learned Subordinate Judge of Thanjavur in O.S.53 of 1965 were restored. Time for execution of the sale deed by the respondents herein is one month from today.
JUDGMENT:- The plaintiff in O.S. No.53 of 1965 on the file of the Court of the Subordinate Judge of Thanjavur, who succeeded before the trial court, but lost before the first appellate court is the appellant before this court. She instituted the suit for specific performance of a contract to sell certain immoveable property under Ex.A-1 dated 10-2-1965. That agreement was executed by the first defendant on behalf of himself and as guardian of his minor children, defendants 2 to 4, agreeing to sell the property to the appellant for a consideration of Rs.10,000. The agreement itself recites that out of the consideration of Rs.10,000, Rs.4000 had already been accounted for, by payment of Rs.2698-10 to the Nicholson Town Bank Ltd., Thanjavur, on behalf of the first defendant, a sum of Rs.500 to one Chakrapani Iyer on account of the first defendant and the balance of Rs.801-90 received by the first defendant by then. Ex.A-1 agreement contemplates the mother of the first defendant Sonna Ammal being a party to that agreement, but she has not actually signed the agreement. This agreement provided a period of three months for execution of the sale deed on receipt of the balance consideration of Rs.6000. Twelve days after this agreement came into existence, that is, on 22nd February, 1965 under the original of Ex.A.4, the first defendant acting on his behalf as well as guardian of his minor children, defendants 2 to 4, sold the property for Rupees 11,000 to the fifth defendant in the suit, the fifth defendant being the brother's sambandhi of the first defendant. After the plaintiff-appellant came to know of this sale, she issued a notice to the defendants and afterwards instituted the present suit for specific performance of the agreement, Ex.A-1. The defence of the first defendant was that the agreement was incomplete and that in any event it was not enforceable for want of mutuality, since the first defendant had no right to bind his minor children by entering into the agreement. The fifth defendant in the suit, in addition to putting forward the contention that the agreement was incomplete, also contended that he was a bona fide purchaser for value without notice of the suit agreement. The learned Subordinate Judge, Thanjavur, who tried the suit, came to the conclusion that the fifth defendant was not a bona fide purchaser for value without notice of the suit agreement. As a matter of fact, he recorded a finding that the sale in favour of the fifth defendant was a faked up one, in order to help the first defendant to refute the rights of the appellant, who had already parted with a sum of Rs.4000. As far as the contention regarding the incompleteness of the agreement is concerned, the learned Subordinate Judge held against the defendants and therefore on 29th September, 1966 he decreed the suit directing the plaintiff to deposit into court the balance of consideration of Rs.6000 and giving one month's time for that purpose. As against this judgment and decree of the learned Subordinate Judge, the 5th defendant alone preferred an appeal. The learned District Judge of West Thanjavur on 16th December, 1968 in A.S. No.302 of 1966 allowed the appeal. He posed before him the following two points for determination, namely, (1) whether the suit agreement of sale is not valid in law to enable the plaintiff to specifically enforce it and whether as such no decree for specific performance can be passed on the basis of such an agreement; and (2) whether the fifth defendant is not a bona fide purchaser for value. As far as the second point is concerned, he agreed with the conclusion of the learned Subordinate Judge. He also recorded a finding that the collusion between the first defendant and the fifth defendant was quite patent. As far as the first point is concerned, the learned District Judge held that the agreement was incomplete, since the mother of the first defendant had not executed the same and therefore on the basis of such an
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