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1949 Supreme(Mad) 178

FEDERAL COURT
H.J.Kania, Chief Justice, S. Fazl Ali, M. Patanjali Sastri, Mehrchand Mahajan. andB.K.Mukherjea.
Shanmugam Pillai
Versus
Annalakshmi Ammal
C.A. No. XLIII of 1948.
Decided On : 20 May 1949

N. Rajagopala Aiyangar and K.S.Venkataramani, Advocates, FederarCourt, instructed by M. S. Krishnamoorthi Sastri, Agent, for Appellants.
K. Rajah Aiyar, Senior Advocate, Federal Court (K.S. Ramamoorthy, Advocate, Federal Court and K. Vydeeswaran, Advocate, Madras High Court, with him), instructed by S. Subramanian, Agent, for Respondents Nos. 1 & 2.
Respondent No. 3 did not enter appearance.

Contemporaneous agreement for sale of property to lessee for the same consideration.

Headnote:Specific performance- Sale of mortgaged property to mortgagor-Under separate lease deed provision made for lease back to mortgagor.

Judgments: Kania, C.J.-I have read the judgment prepared by Patanjalt Sastri, J. and agree with its line of reasoning and conclusion.

Fazl Ali, J.-I concur in the judgment prepared by Patanjali Sastri, J.

Patanjali Sastri, J.-This is an appeal from a judgment and decree of the High Court of Judicature at Madras reversing a decree for specific performance and delivery of possession passed by the Court of the Subordinate Judge at Madura.

The appellants were originally owners of the properties in question which together with other properties they had mortgaged to the respondents family in 1921 and 1929. In January, 1937, the account in respect of the said mortgages was settled and, a sum of Rs. 31,300 having been found to be due to the mortgagee, the properties in suit were sold on 7th January, 1937, to the then manager of the family, Balasubramania Ayyar, in full discharge of the debts. Two days later, on 9th January, 1937, two further documents were brought into existence between the parties. One of them was a lease-deed executed by Balasubramania as lessor and the first appellant (hereinafter referred to as “the appellant”) as lessee on behalf of their respective families. The document recited that the property had been sold to the lessor and taken on lease by the lessee “from this day up to 30th April, 1943” and provided, inter alia, that

“the lessee shall pay therefor the net lease amount, after deducting all expenses which he has promised to pay to the said lessor, in cash in seven instalments, viz., Rs. 700 by 30th September, 1937, Rs. 1.450 by 30th April, 1938, Rs. 1,450 by 30th April, 1939, Rs. 1,450 by 30th April, 1940, Rs. 1,450 by 30th April, 1941, Rs. 1,450 by 30th April, 1942, and Rs. 1,450 by 30th April, 1943-shall pay the lease amounts stated above by the respective due dates * * * * * * should the said lessee be in arrears of cash lease amount in respect of any instalment without making payment of the entire lease amount by the aforesaid due dates, which the said lessee has promised to pay in accordance with the aforesaid dne dates, the said lessee shall make good the entire loss caused thereby to the said lessor, out of his own funds and on his personal liability. Besides he shall forthwith forfeit his lease right without reference to subsequent instalments. Further, the said lessor shall hereby have the right to enter on the properties covered by the said lease, without reference to future instalments, and without intimating the said lessee and to enjov the same as he liked or to release the same to others according to his pleasure. Furthermore, should the said lessee be in arrears of cash rent in respect of any instalment without making payment of the entire cash rent which he has promised to pay on the due dates referred to above, the said lessor hereby has the right to realise the said arrears of cash rent together with interest at the rate of one per cent, per mensem from the date of default as stated above, by proceeding against the said lessee’s own funds, and against him personally.”

On the same date the parties also executed a registered agreement whereby Balasubramania agreed to convey the properties to the appellant on payment of Rs. 31,500 out of which Rs. 10 was paid on that day and Rs. 31,490 was to be paid as provided therein. The agreement recited the sale of 7th January and the lease of the 9th idem. It also recited that the appellant “requested” that the said lands “should be sold to him alone” and that Balasubramania consented to do so “subject to the conditions mentioned hereunder” and the appellant consented “to obtain a sale” subject to those conditions. Then follow “conditions of agreement of sale” in these terms:

“1. Party No. 2 aforesaid agrees to obtain a sale of the undermentioned properties in his name or in the name of others to be specified by him, paying a net amount of Rs. 31,500 as the sale price of the said properties within the period commencing from this day and upto 30th April, 194









































































































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