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Moti Ram v. Khyali Ram And Another Proforma-

Allahabad High Court

Apr 27, 1966

Judgment

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Structured Summary of the Opinion

Factual and Procedural Background

These are two second appeals arising from rival decrees of the Temporary Civil and Sessions Judge, Mathura: one dismissing a suit for ejectment (S.A. No. 1515 of 1959) and the other decreeing a suit for specific performance (S.A. No. 1566 of 1959). The parties are Moti Ram and Devi Ram (one set of appellants/defendants) and Khayali (Khayali) Ram (the other party). The dispute concerns agricultural plots whose bhumidhari rights were then held by one Kali Charan.

Key factual steps in the sequence set out by the opinion:

On 12-11-1953 Kali Charan purportedly entered into an agreement with Khayali Ram: Kali Charan agreed to obtain bhumidhari rights (a bhumidhari sanad) over the plots and then transfer those bhumidhari rights to Khayali Ram for Rs. 820; Khayali Ram paid Rs. 615 in advance and was put in possession following the agreement.
On 20-1-1954 Kali Charan obtained the bhumidhari sanad but, instead of executing a sale in favour of Khayali Ram, transferred the property to Moti Ram and Devi Ram for Rs. 1000.
On 28-1-1954 Khayali Ram filed a suit for specific performance against Kali Charan and the appellants. The appellants resisted and separately filed a suit in the revenue court for the ejectment of Khayali Ram, claiming they were bona fide transferees from Kali Charan and that Khayali Ram was a trespasser.
The trial court (in the ejectment suit) decreed ejectment, finding appellants had become bhumidhars by sale deed and that Khayali Ram was in unauthorised occupation. On appeal the learned Civil Judge reversed that result: it held Khayali Ram had been put in possession by the vendor and was entitled to protection under Section 53A of the Transfer of Property Act; it further held the appellants were not bona fide transferees and dismissed their ejectment suit. The Civil Judge also decreed the suit for specific performance in favour of Khayali Ram; the appellants appealed both decrees to this court.

Legal Issues Presented

Whether an agreement by a sirdar to acquire bhumidhari rights in the future and then transfer those bhumidhari rights is illegal as a transfer of sirdari rights under Section 163 of the U.P. Zamindari Abolition and Land Reforms Act (as contended by appellants).
Whether an agreement to transfer property not yet in existence (i.e., future bhumidhari rights) is barred by Sections 5 and 6 of the Transfer of Property Act or by the authorities relied upon for the proposition that there can be no assignment of an interest not in existence.
Whether the plaintiff's suit for specific performance was barred by Clause (b) of Section 21 of the Specific Relief Act on the ground that part of the contract depended upon the vendor's volition (namely, obtaining the bhumidhari sanad).
Whether the lower appellate court erred in deciding the appeal on merits (instead of dismissing for default) when the counsel present stated the appeal would be argued by another counsel who was absent.

Arguments of the Parties

Appellants' Arguments (as presented by Mr. Gopi Nath)

The agreement in favour of Khayali Ram was illegal because it purported to transfer sirdari rights in violation of Section 163 of the U.P. Zamindari Abolition and Land Reforms Act; therefore Khayali Ram was a trespasser.
The agreement would be barred under Sections 5 and 6 of the Transfer of Property Act because it purports to transfer future property (an interest not in existence at the time of the agreement). Counsel relied on several authorities (Aveline Scott Ditcham v. James J. Miller; Annada Mohan Roy v. Gour Mohan Mullick; Collyer v. Isaacs; Ghulam Mohammad v. Pir Bukhsh) to support the proposition that there can be no assignment of an interest not in existence.
With respect to specific performance, Clause (b) of Section 21 of the Specific Relief Act was invoked: counsel argued that the contract was partly dependent on the volition of the vendor (obtaining the bhumidhari sanad) and thus could not be specifically enforced.
Procedural argument: the lower appellate court erred in deciding the appeal on merits when it should have dismissed the appeal for default in the absence of the counsel who was to argue the case; reliance was placed on the Full Bench opinion in Babu Ram v. Bhagwan Din (1965 All. LJ 462; AIR 1966 All 1 F.B.).

The opinion does not contain a detailed, separate exposition of the respondent's (Khayali Ram's) oral arguments in the same format; the respondent's position is reflected through the relief sought (specific performance) and through the courts' findings recorded in the judgment.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Aveline Scott Ditcham v. James J. Miller, AIR 1931 P.C. 203	Relied upon by counsel for the proposition that an agreement purporting to transfer future property or an interest not in existence is invalid.	The court treated this and similar authorities as establishing only that there can be no assignment of an interest not in existence; it held they do not establish that there can be no agreement to transfer property to be acquired in the future, and therefore did not accept counsel's contention that these authorities invalidated the present agreement.
Annada Mohan Roy v. Gour Mohan Mullick, AIR 1923 P.C. 189	Relied upon by counsel for the proposition that assignments of interests not in existence are not permissible.	The court observed the decision aligns with the principle that a present assignment of a non-existent interest cannot be valid, but distinguished that principle from the separate concept of an agreement to transfer future-acquired rights, which the court held can be enforceable.
Collyer v. Isaacs, (1881) 19 Ch. D. 342	Authority cited for the rule denying assignment of interests not yet in existence.	The court considered it part of the body of authority relied on by counsel but held that none of the cited cases established that agreements to assign future interests are invalid; the present agreement to transfer future bhumidhari rights was held enforceable.
Ghulam Mohammad v. Pir Bukhsh, (1928) 108 Ind. Cas. 390 (Lah.)	Another authority cited for the principle that an assignment of a non-existent interest cannot be made.	The court treated this case similarly to the other cited authorities and concluded it did not preclude enforcement of an agreement to transfer rights to be acquired in the future.
Babu Ram v. Bhagwan Din, 1965 All. LJ 462; (AIR 1966 All 1) (Full Bench)	Full Bench opinion on appellate procedure: whether an appellate court should dismiss an appeal for default in the absence of the appellant or his counsel or may decide the appeal on merits; held that ordinarily an appellate court should dismiss for default and should decide on merits only in exceptional circumstances, but the court has jurisdiction to decide on merits even in their absence.	The present court applied and analysed the Full Bench opinion but distinguished it on the facts: here counsel for the appellant was present and informed the court another counsel would argue; the appellate court refused an adjournment and decided the appeal on merits—thus the present court held the Full Bench authority was not applicable so as to vitiate the lower appellate court's decision on merits.

Court's Reasoning and Analysis

The court's analysis proceeds by addressing each principal contention advanced by the appellants and applying statutory and doctrinal distinctions drawn in the opinion.

Distinction between sirdari rights and bhumidhari rights:
The court accepted the general premise that “sirdari rights are not transferable.” However, it emphasised the legal difference between a direct transfer of existing sirdari rights and an agreement by a sirdar to obtain bhumidhari rights (a different interest) in the future and thereafter transfer those bhumidhari rights. The court held that such an agreement is not, in substance, a prohibited transfer of sirdari rights: it is an undertaking to transfer bhumidhari rights to be acquired in the future and therefore not caught by the prohibition alleged under the Zamindari Act provision invoked by counsel.
Agreement to transfer future property vs assignment of non-existent interest:
The court distinguished between (a) an assignment/transfer of a specific property interest which must exist at the time of transfer, and (b) an agreement to transfer property or rights that the transferor will acquire in future. It observed that while courts have said there can be no present assignment of an interest not yet in existence, that reasoning does not extend to invalidating an agreement to transfer future-acquired rights. The court reinforced this distinction by reference to commercial analogies (sale of future goods) and to Section 43 of the Transfer of Property Act, which contemplates enforceability of an agreement to sell property in which the seller has no present title if he later acquires an interest.

On that basis the court concluded that the agreement by Kali Charan to obtain a bhumidhari sanad and thereafter transfer the bhumidhari rights to Khayali Ram was valid and enforceable; the authorities cited by counsel were read as limited to assignments of non-existent interests and did not govern the present agreement to transfer rights to be acquired later.
Section 53A (Transfer of Property Act) and protection of the purchaser in possession:
The trial and appellate factual findings (as recorded in the opinion) were that Khayali Ram had been put in possession by the vendor after the agreement. The learned Civil Judge held that Khayali Ram was entitled to the protection of Section 53A of the Transfer of Property Act and that the appellants were not bona fide transferees who could recover possession from a person in part performance. The present court accepted the appellate court's conclusion and dismissed the ejectment appeal.
Clause (b) of Section 21 of the Specific Relief Act (dependence on volition):
Counsel argued that part of the agreement depended on the vendor's volition (the obtaining of bhumidhari sanad) and therefore the contract could not be specifically enforced. The court answered that, in fact, the bhumidhari sanad had been obtained before the suit for specific performance was pressed; because the vendor had performed the part of the contract that depended on his volition, he could not resist specific performance of the remaining obligation. The court therefore held the suit for specific performance could be maintained and that Clause (b) did not bar enforcement in the factual circumstances before it.
Appellate procedure — deciding on merits vs dismissal for default:
The court examined the Full Bench opinion in Babu Ram v. Bhagwan Din and its statement that ordinarily an appellate court should dismiss an appeal for default in the absence of the appellant or his counsel, and only in exceptional circumstances decide on merits. The court distinguished that authority on its facts: in the present case the counsel for the appellant was present in court when the appeal was called; he stated that another counsel would argue the case but that counsel was busy. The lower appellate court refused an adjournment and chose to decide the appeal on merits. The present court held that where the appellant's counsel is physically present but declines to argue and asks for adjournment for another counsel who is absent, the appellate court's decision to proceed and decide on merits cannot be characterized as a decision in the absence of the appellant or his counsel. Thus, no procedural illegality arose from deciding on merits in those circumstances.

Holding and Implications

Holding: Both appeals fail. The court dismissed both appeals and ordered costs against the appellants.

Implications:

The ejectment appeal (S.A. No. 1515 of 1959) fails: the trial court's ejectment decree was set aside by the lower appellate court which found that Khayali Ram had been put in possession by the vendor and was protected (inter alia through Section 53A); the present court upheld that outcome and dismissed the appellants' appeal.
The appeal against the decree for specific performance (S.A. No. 1566 of 1959) similarly fails: the court upheld the decree for specific performance in respect of the agreement and rejected the appellants' contentions based on Clause (b) of Section 21 of the Specific Relief Act.
No broader new precedent is proclaimed by the court beyond the application of established distinctions: the court applied existing principles (distinguishing assignment of non-existent interests from agreements to transfer future-acquired rights; application of Section 43 Transfer of Property Act by analogy; enforcement where the vendor has already performed the part of the contract dependent on his volition; and the Full Bench guidance on appellate defaults distinguished on the facts). The opinion confines its conclusions to the facts and authorities it considered and does not purport to lay down any novel general rule beyond that reasoning.

All statements in this summary are drawn exclusively from the provided opinion and do not add information beyond that text.

Show all summary ...

1. These are two second appeals from two decrees of the Temporary Civil and Sessions Judge, Mathura--one dismissing a suit for the ejectment of the defendant and the other decreeing a suit for specific performance. In the suit in S.A. No. 1515 of 1959, the applicants Moti Ram and Devi Ram were the plaintiffs and Khyali Ram the defendant, while in the suit in Second Appeal No. 1566 of 1959 the roles were reversed--Khayali Ram being the plaintiff and Moti Ram and Devi Ram the defendants. The facts are these. The land in dispute consists of agricultural plots. One Kali Charan was the bhumidhar of these plots. On 12-11-1953 he entered into an agreement with Khayali Ram by which he agreed to acquire bhumidhari rights over these plots and then to transfer them to Khayali Ram for a sum of Rs. 820, Khayali Ram paid Rs. 615 in advance and a deed of agreement was executed by Kali Charan. Khayali Ram was put in possession of the plots after the execution of the agreement. On 20th January 1954 Kali Charan obtained his bhumidhari sanad, but instead of executing a sale deed in favour of Khayati Ram, he transferred the property to the appellants Moti Ram and Devi Ram, for a sum of Rs. 1000. On 28-1-1954 Khayali Ram filed his suit against Kali Charan and the appellants for specific performance of the agreement of 12-11-1953. The appellants resisted this suit, and also filed a suit in the revenue court for the ejectment of Khayali Ram from the plots. In the suit for ejectment Moti Ram and Devi Ram alleged that they were the transferees of Kali Charan who was a bhumidhar of the land and Khayali Ram was trespasser. The latter contested the suit and denied, that the appellants were bona fide transferees of the land. He gave his own version of the agreement of sale in his favour.

The trial court decreed the suit for ejectment on the ground that the appellants had become the bhumidhars of the land under the sale deed executed by Kali Charan and Khayali Ram was in unauthorised occupation. The learned Civil Judge held that Khayali Ram was not in unauthorised occupation but on the contrary had been put in possession by the vendor and he was entitled to the protection of Section 53A of the Transfer of Property Act. He also held that the appellants were not bona fide transferees and could not recover possession from Kali Charan who had occupied the plots in part performance of the contract. He allowed the appeal and dismissed the appellants' suit. They have come here in second appeal (S. A. 1515 of 1959) In the other suit, the plaintiff Khayali Ram asked for specific performance of his agreement. Moti Ram and Devi Ram resisted the suit and contended that they were bona fide transferees for value. The pleadings of the parties were otherwise the same as in the suit for ejectment. Both the courts below have decreed this suit, and Moti Ram and Devi Ram have come here in Second Appeal (S. A. 1566 of 1969). Both appeals are being disposed of by me by a common judgment as the same questions of law and fact arise in both.

2. I shall first take up the appeal in the ejectment suit (S. A. 1515 of 1959). Mr Gopi Nath for the appellants argued that the agreement in favour of Khayali Ram was illegal as it purported to transfer sirdari rights in violation of Section 163 of the U.P. Zamindari Abolition and Land Reforms Act, and consequently Khayati Ram was a trespasser. I do not agree. It is true that sirdari rights are not transferable. But an agreement by a sirdar undertaking to acquire bhumidhari rights and then transfer them is not hit by Section 153 of the Act because it is not an agreement transferring sirdari rights but one to transfer bhumidhari rights to be acquired in the future. The agreement may have been made when the transferor's rights in the land are those of sirdar, but its object is to transfer bhumidhari rights at a later date.

3. Mr. Gopi Nath then argued that the agreement with Khayali Ram would be barred under Sections 5 and 6 of the Transfer of Property Act. He contended that an agreement purporting to transfer future property--that is one which is not in existence is invalid, because it transfers something which is not in existence at the time of agreement Counsel relied on Aveline Scott Ditcham v. James J. Miller, AIR 1931 P.C. 203. Annada Mohan Roy v. Gour Mohan Mullick, AIR 1923 P.C. 189, Collyer v. Isaacs, (1881) 19 Ch. D. 342; and Ghulam Mohammad v. Pir Bukhsh, (1928) 108 Ind. Cas. 390(Lah).

4. This argument overlooks the difference between a transfer and an agreement to transfer. Transfer can only be of specific property which is in existence, but an agreement to transfer can be of future properly. This distinction is well known to the law governing the sale of goods which provides that while there can be no sale of future goods there can be an agreement to sell future goods. It is also recognised by the Transfer of Property Act, Section 43 of which provides in effect that an agreement to sell property to which the seller has no title may be enforced against him in the future if he acquires an interest in the property. This is an implied recognition of the principle that the law will recognise and enforce an obligation to transfer property not yet acquired.

5. In the cases cited by counsel the court held that there could be no assignment of an interest not in existence. This is in accord with plain common sense if I may say so with respect. But in no case has any Court laid down that there can be no agreement to assign property to be acquired in the future. In the present case the vendor agreed to obtain a bhumidhari sanad and then transfer his bhumidhari rights to Khayali Ram. Such an agreement is valid and enforceable.

6. The appeal from the decree dismissing the suit for ejectment fails.

7. In the appeal from the decree for specific performance (S. A. No. 1566 of 59) Mr. Gopi Nath argued that Khayali Ram's suit should have been dismissed in view of Clause (b) of Section 21 of the Specific Relief Act. This clause enjoins in effect that a contract which is dependent on the volition of the parties cannot specifically be enforced (I have omitted the other parts of the clause which are not material) Counsel pointed out that the agreement between Kali Charan and Khayali Ram contained an undertaking by Kali Charan to obtain a bhumidhari sanad and this could not be enforced by the court as its fulfilment depended upon his volition. A short answer to this argument is that Khayali Ram did not ask for the enforcement of this part of the agreement because Kali Charan had already obtained a Bhumidhari sanad. If person enters into a contract the performance of a part of which depends upon his volition and he performs this part and then refuses to perform the remaining part which does not depend upon his volition, he cannot resist a suit for specific performance of the remaining part on the ground that the agreement, on the date when it was made, depended partly on his volition. If he has already performed that part of the contract which depended upon his volition, he can he complied to perform the remaining part which he did not perform.

8. Lastly Mr. Gopi Nath argued that the lower appellate court erred in dismissing the appellant's appeal on merits because it could only dismiss it for default. It appears that when the appeal before the lower appellate court was called up for hearing, a counsel for the appellants appeared but informed the court that the appeal would not be argued by him but by another counsel who was at the time busy in another court. The court refused to adjourn the case and proceeded to decide the appeal on merits. If was of the opinion that the findings and the decision of the trial court were sound and the appeal was without force. Mr. Gopi Nath argued that the lower appellate court acted illegally in not dismissing an appeal for default in the absence of the counsel who was to argue the case. Learned counsel relied on the opinion of a Full Bench of this court in Babu Ram v. Bhagwan Din, 1965 All. LJ 462: (AIR 1966 All 1 F.B.) In that case the following question was referred to the Full Bench for their opinion "whether in the absence of an appellant or his counsel an appellate court should dismiss the appeal in default or decide the appeal on merits? Whether under which circumstances the appellate court has jurisdiction to dispose of the appeal on merits?

9. After a review of the authorities both of this and the other High Court, the Bench gave the following unanimous opinion;

"In the absence of the appellant and his counsel the appellate court should ordinarily dismiss the appeal for default and it is only in exceptional circumstances that it should decide the appeal on merits. The appellate court has however the jurisdiction even in the absence of the appellant and his counsel to dispose of the appeal on merits."

10. Learned counsel relying on this opinion argued that in the absence of the appellant or his counsel the appellate court must adopt the normal course of dismissing the appeal for default and only decide on merits in exceptional circumstances. Mr. Gopi Nath pointed out that in the present case no exceptional circumstances existed or were pointed out by the lower appellate court who gave a decision on merits. He relied on a decision of a Division Bench of this Court in Civil Revn. No. 503 of 1967 (All.) Babu Ram v. Bhagwan Din, in which the court held:

"To decide the appeal on merits in the absence of exceptional circumstances amounted to material irregularity in the disposal of the appeal."

This was the same case which had been referred to the Full Bench for opinion

11. I do not think that the present case is governed by the opinion of the Full Bench. In that case, both appellant and his counsel were absent when the case was called up. The very question referred to the Full Bench for opinion began, "Whether in the absence of appellant or his counsel . . .. .?" and the order of the appellate court dismissing the appeal also stated, "the appellant is absent. The counsel does not turn up to argue the appeal." After making this observation the court held that the judgment under appeal was manifestly correct.

12. In the present case it cannot be said that the appellant, or at any rate his counsel, Was absent when the case was called up. The lower appellate court has observed.

"When the appeal was called up Sri Jagdish Prasad learned counsel for the plaintiff respondent appeared. Sri Parpannya, learned counsel for the appellant also made his appearance but said that the appeal would be argued not by him but by Sri Gupta who was busy in another court. Since more than half a dozen adjournments were allowed this request was turned down."

The learned appellate Judge then held that there was no occasion for him to interfere with the findings of the trial court, and dismissed the appeal.

13. In my opinion, if the counsel for the appellant is present in court when the appeal is called up for hearing but states that the appeal will not be argued by him but by another counsel and asks the court to wait for that counsel and the court rejects this request and proceeds to decide the appeal on merits it cannot be said that the decision was made in the absence of the appellant or his counsel.

14. Both the appeals fail and are dismiss ed with costs.