Difference between contract of sale and reconveyance.

This is an appeal under clause 15 of the Letters Patent against the decree and judgment of Krishnaswami Nayudu, J., in S.A. No. 1087 of 1953.

The suit, to which the appeal relates, was one for specific performance of an agreement of sale executed by the appellant in favour of respondents 1 and 2. Since the filing of the appeal, the first respondent died, and respondents 2 to 4 are on record representing her interest. The properties originally belonged to the first respondent, and she along with her husband and children, executed a deed of sale in favour of one Kuppuswami. A few months after the sale, on 11th November, 1943, Kuppuswami conveyed the properties to the appellant. On 15th November, 1943, the appellant granted a lease of the properties to respondents 1 and 2 for a period of 5 years on a yearly rent of Rs. 270 — the lease imposed certain conditions as to the regular payment of rent and forfeiture of the rights under the lease in default thereof. Two weeks after the grant of the lease, there was an agreement, Exhibit A-1, entered into between the parties under which the appellant agreed to sell to respondents 1 and 2 the properties for a consideration of Rs. 3,300. It was stipulated that the agreement should be performed within a period of 7 years. A sum of Rs. 10 was paid towards the price on the date of the agreement and the balance was to be paid at the time of the conveyance. It was also agreed that the purchasers, respondents 1 and 2, would forfeit their rights under the agreement if they did not carry out faithfully the conditions of the lease under which they were then in possession of the properties. The portion relating thereto in Exhibit A-1 runs:

“Further in accordance with the condition set out, the lease deed under which possession of these properties were given to individuals 2 and 3 on 15th November, 1943, by individual No. 1 if (any) default is committed, and (or) if individuals Nos. 2 and 3 fail to pay to individual No. 1 the aforesaid sum of Rs. 3,290 within the time stipulated above, this agreement shall stand cancelled as per the (terms of) agreement mentioned herein without reference to the said time limit”.

There was a default in regard to payment of rent under the lease-deed. Thereupon, the appellant under Exhibit B-4 proceeded to cancel the agreement to sell. He also filed O.S. No. 389 of 1946 on the file of the District Munsif’s Court,‘Salem, for recovery of possession of the properties, together with the arrears of rent. The suit was dismissed on the ground that there was no valid service of notice previous thereto. A fresh suit, after giving the necessary notice, O.S. No. 186 of 1949, was filed for the same reliefs. That suit was decreed. Against the decree, respondents 1 and 2 filed an appeal to the District Court, Salem, which was subsequently transferred to the Sub-Court, and registered as A.S. No. 2 of 1951. In the meanwhile, they had instituted O.S. No. 242 of 1950 in the same Court, the suit out of which this appeal arises for specific performance of agreement of sale. Both the appeal and the suit were heard together and disposed of by a common judgment. In the appeal, the learned Subordinate Judge sustained the decree for arrears of rent, but dismissed the claim for possession. In the suit, he passed a decree, directing specific performance.

It is admitted that the decree relating to the arrears of rent has been paid and satisfied. But the appellant filed an appeal to the District Court, Salem, against the decree for specific performance. That failing, second appeal was taken to this Court. Krishnaswami Nayudu, J., who heard the appeal, agreed with the conclusions arrived at by the lower Courts, and dismissed it. While so doing, the learned Judge granted leave under clause 15 of the Letters Patent, for a further appeal.

Under the agreement of sale, Exhibit A-1 it was stipulated that respondents 1 and 2, who happened to be in possession of the properties as lessees, sho