Allahbad High Court
S.MALIK
Ehsanul Haq - Appellant
Versus
Mohd. Umar - Respondent
Decided On : 02/12/1973
SPECIFIC PERFORMANCE - CONTRACT FOR SALE OF PROPERTY - IMPERFECT TITLE - MEANING AND SCOPE - SECTION 18 OF THE SPECIFIC RELIEF ACT, 1877 - SECTION 6 (A) OF THE TRANSFER OF PROPERTY ACT - INTERPRETATION AND APPLICATION.
Fact of the Case:
Plaintiff entered into an agreement with Defendant No. 1 for the sale of a property which was declared as evacuee property and auctioned. Defendant No. 1 made the highest bid and acquired an imperfect title to the property. Subsequently, Defendant No. 1 executed a sale deed in favor of Defendant No. 2 with knowledge of the agreement between Plaintiff and Defendant No. 1. Plaintiff filed a suit for specific performance of the contract.
Finding of the Court:
The court held that Defendant No. 1 had an imperfect title to the property at the time of the agreement and that the agreement was valid and enforceable. The court further held that the addition of the words "no title or" before the words "imperfect title" in Section 18 of the Specific Relief Act, 1963 merely clarified the law and did not change it.
Issues: Whether Defendant No. 1 had an imperfect title to the property at the time of the agreement.
Ratio Decidendi: The court interpreted Section 18 of the Specific Relief Act, 1877 and Section 6 (a) of the Transfer of Property Act and held that an agreement to sell property which is not of the vendor's at the time of the contract, but which the vendor thinks of acquiring by purchase later on, is not bad in law. The court further held that the chance of Defendant No. 1 becoming the owner of the property was not as remote as in the cases mentioned in Section 6 (a) of the Transfer of Property Act and that the possibility of Defendant No. 1 acquiring the property was neither so remote nor of the same category as enumerated in Section 6 (a) of the Transfer of Property Act.
Final Decision: The court dismissed the appeal and confirmed the judgment and decree of the lower courts decreeing the Plaintiff's suit for specific performance of the contract.
2. The relevant facts are that defendant-respondent No. 2 who was defendant No. 1 in the trial Court entered into the agreement dated 12-4-1958 (Ex. 2) with the plaintiff thereby agreeing to sell to the plaintiff the property in suit which is house property. The property had been declared to be evacuee property and it was duly auctioned as such. The auction was completed on the 14th of April, 1958. Subsequently, the sale certificate was issued on the 19th of March, 1959 declaring that defendant No. 1 who was the highest bidder had become its owner with effect from the 1st of February, 1959. It appears that after obtaining the sale-certificate defendant No. 1 executed a sale-deed on 24-6-59 in favour of defendant No. 2.
3. According to the plaintiff, he had been trying to persuade defendant No. 1 to carry out the agreement entered into between them but ultimately he came to know that surreptitiously he had executed the sale-deed in favour of defendant No. 2. With these allegations the suit was filed on the 12th of April, 1961. It may also be mentioned that both the courts below have found that defendant No. 2 got the sale-deed executed in his favour by defendant No. 1 knowing full well about the agreement entered into between defendant No. 1 and the plaintiff.
4. The courts below have held that, as appears from a perusal of Ex. 2, defendant No. 1 had already made the highest bid in the auction sale for the property and, therefore, had acquired an "imperfect title" to the same within the meaning of Section 18 of the Specific Relief Act, 1877 and on his finding decreed the plaintiff's suit keeping in view the other facts already narrated.
5. The only question raised in this Court was whether keeping in view the facts of the case it could be said that on the date of the agreement defendant No. 1 had an "imperfect title" within the meaning of Section 18 of the Specific Relief Act, 1877.
6. In the Act of 1963 in Section 13 which replaced Section 18 of the old Act. before the words "having only an imperfect title thereto" the words "no title or" were added. This change was probably made to clarify the law, as the old Section 18 and the new Section 13 are based on the well-known rule of estoppel sometimes referred to as feeding the grant by estoppel.
7. The Calcutta High Court in the case of Prem Sukh Gulgulia v. Habib Ullah, (AIR 1945 Cal 3551 held that transfers of non-existent or as it is conveniently called, after acquired property, provided they are not of the nature contemplated in Section 6 (a) are perfectly valid. The transfer would be regarded in a court of justice as contract to transfer after the vendor had acquired title and would fasten upon the property as soon as the vendor acquired it. A contract of sale of property which is not of the vendor's at the time of the contract, but which the vendor thinks of acquiring by purchase later on, is not bad in law, I respectfully agree with the view taken by the Calcutta High Court.
8. In my view also, an agreement to sell of the nature entered into between the parties, is a valid agreement and is, therefore, enforceable in law unless it is shown that the agreement is hit by the provisions of Section 6 (a) of the Transfer of Property Act or by any other law. Learned counsel for the appellant has not been able to show me any provision of law which would make such an agreement, as was entered into in this case, invalid.
9. The learned counsel for the appellant has relied on Section 6 (a) of the Transfer of Property Act and specially on the words. "......... any other mere possibility of a like nature cannot be transferr
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