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1978 Supreme(All) 328

Allahbad High Court
M.N.SHUKLA
Hari Singh - Appellant
Versus
Umrao Singh - Respondent
Decided On : 05/05/1978

Advocates:
P.C. Gupta and Nadis Alykhan, for Appellants; R.N. Singh, N.P. Singh and N.S. Singhal, for Respondents.

A Karta of a joint Hindu family can execute an agreement to sell the family property if the transaction is for the benefit of the family.

Headnote:

SPECIFIC PERFORMANCE - AGREEMENT TO SELL - JOINT HINDU FAMILY - KARATA'S AUTHORITY - BENEFIT OF ESTATE - SECTION 92 OF THE INDIAN EVIDENCE ACT - ORAL EVIDENCE - BREACH OF CONTRACT - DAMAGES - REFUND OF EARNEST MONEY.

Fact of the Case:

Plaintiff and defendant No. 2 entered into an agreement for the sale of a house belonging to defendant No. 1 and defendant No. 2 and his brothers. Defendant No. 2 executed the agreement in his capacity as Karta of the joint Hindu family. The plaintiff paid Rs. 3,000/- as earnest money and the balance was to be paid at the time of execution of the sale deed. The sale deed was to be executed within three months from the date of agreement. In January 1963, an extension of time was granted at the request of defendants Nos. 1 and 2 and a further sum of Rs. 2,600/- was advanced to them. The plaintiff alleged that the defendants postponed the execution of the sale deed on one pretext or the other and in breach of the terms of the agreement, they executed a sale deed in favor of defendant No. 3 for a sum of Rs. 15,000/-. The plaintiff filed a suit for specific performance, but the Courts below decreed the suit for recovery of Rs. 8,000/- from the defendants Nos. 1 and 2 with pendente lite and future interest at the rate of Rs. 4/- per cent per annum. The defendants appealed.

Finding of the Court:

The Court found that defendant No. 2 executed the agreement to sell in his capacity as Karta of the joint Hindu family. The Court also found that the purpose for which the agreement to sell was executed was for the benefit of the family. However, the Court found that the plaintiff was not willing to have the sale deed executed by defendant No. 2 alone and without the participation of his other brothers. This was in violation of the agreement to sell which did not stipulate any such condition.

Issues: 1. Whether defendant No. 2 had the authority to execute the agreement to sell in his capacity as Karta of the joint Hindu family? 2. Whether the purpose for which the agreement to sell was executed was for the benefit of the family? 3. Whether the plaintiff was entitled to damages and refund of earnest money?

Ratio Decidendi: 1. The Court held that the finding of the Courts below that defendant No. 2 executed the agreement to sell in his capacity as Karta of the joint Hindu family was correct and oral evidence could be led for proving the character of the execution, as the written agreement itself was silent. 2. The Court held that the transaction was for the benefit of the family as it was intended to sell the house in dispute which was not being used and yielded no profits, and the defendants had already shifted to another village where they could acquire land at a much cheaper rate and for more profit. 3. The Court held that the plaintiff was not entitled to damages and refund of earnest money as he himself was responsible for the breach of the agreement to sell by insisting that all the brothers of defendant No. 2 should also join in the execution of the sale deed, which was not a condition stipulated in the agreement.

Final Decision: The appeal was allowed, and the decree of the Court below was set aside. The parties were directed to bear their own costs throughout.

JUDGEMENT :- This is a defendants appeal arising out of a suit for specific performance. The relief of specific performance was not granted by the Courts below but the suit was decreed for recovery of Rs. 8,000/-from the defendants Nos. 1 and 2 with pendente lite and future interest at the rate of Rs. 4/- per cent per annum. Out of the above amount a sum of Rs. 5,000/- was awarded by way of damages for breach of contract and a sum of Rs. 3,000/- related to the refund of the earnest money.

2. The short facts of the case are : that the house in dispute in respect of which an agreement for sale dated 3-4-1962 had been arrived at belonged to defendant No. 1 and the defendant No. 2 and his brothers. It is not disputed that a moiety share belonged to defendant No. 1 on the one hand and the remaining half belonged on the other hand, to defendant No. 2 and his three brothers. The agreement was to the effect that defendants Nos. 1 and 2 would sell the said house to the plaintiff for Rs. 10,040/-. A sum of Rs. 3,000/- was paid as earnest money and the balance was agreed to be paid at the time of execution of the sale deed. It was stipulated that the sale deed would be executed within three months from the date of agreement. In Jan. 1963 extension of time was granted at the request of defendants Nos. 1 and 2 and on their request a further sum of Rs. 2,600/- was advanced to them on 17-1-1963. It was alleged by the plaintiff that although he was ready and willing to perform his part of the agreement for the execution of the sale deed, yet the defendants postponed it on one pretext or the other and in breach of the terms of the agreement they executed a sale deed in favour of defendant No. 3, Ilam Chand for a sum of Rs. 15,000/- on 21-1-1963.

3. The defence of the defendants Nos. 1 and 2 was that plaintiff knew full-well that defendant No. 2 had three brothers and a mother, all of whom were co-sharers of the said house and that the plaintiff had taken upon himself the responsibility of persuading them also to agree to join the execution of the sale deed in his favour. It was contended that the agreement was subject to the condition that the plaintiff would make those co-sharers agree to execute the sale deed in his favour which he had failed to do. It was further pleaded that the defendants formed a joint Hindu family along with the brothers of defendant No. 2 and that the agreement was not for the benefit of the family and was not capable of being enforced in a Court of law.

4. The Courts below held that the defendant No. 3 was a bona fide purchaser without notice and consequently the sale deed in his favour was not illegal. Hence, no decree was passed against him. A decree was, however, passed against defendants Nos. 1 and 2 (the present appellants) for recovery of Rs. 8,000/- with pendente lite and future interest at the rate of Rs. 4/- per cent per annum. The decree was confirmed by the lower appellate Court.

5. Three points were urged before me on behalf of the appellants. The first and the most formidable contention of the appellants was that the terms of the agreement dated 3-4-1962 (Ext. 26) were reduced to writing, that it nowhere recited that Dhara Singh, defendant No. 2 was executing the agreement in his capacity as a Karta of the joint Hindu family, nor did it stipulate that defendant No. 2 took upon himself the responsibility of making his other brothers join in the execution of the sale deed and consequently the Courts below were in error in spelling out a new case and permitting evidence to be led to the effect that either Dhara Singh had promised to execute a sale deed in his capacity as the Karta of the joint family or that he had undertaken to persuade his brothers also to join in execution of the sale deed. It was further argued that since these conditions were not included in the terms of the agreement, the plaintiff had no right to insist on their fulfilment and to refuse to have the sale deed executed in the event of the












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