Bhupal v. Mam Chand

T.S Misra, J.:— This is an appeal by Bhupal, Bishambhar and Kishan Lal defendants from the decree of the learned Additional District Judge, allowing the appeal of Mam Chand and dismissing the appeal of Sukhey.

2. The facts giving rise to this appeal may briefly be stated as follows. On 20th March, 1967 Mahabir as guardian of Mam Chand entered into an agreement with Sukhey defendant to purchase agricultural land for a sum of Rs. 8,000/- and paid a sum of Rs. 5,500/- in cash as earnest money. It was agreed that the sale deed would be got registered within three years and the balance of the sale consideration would be paid at the time of the registration of the document, Sukhey. However, did not execute the sale deed; instead he executed a sale deed on 7th September, 1968 in respect of a portion of that land in favour of the defendants Nos. 2 to 4 who purchased the said land with knowledge and notice of the agreement of sale which Sukhey had entered into with Mam Chand. The plaintiff called upon the defendants to execute the sale deed in pursuance of the aforesaid agreement but they failed to do so hence the plaintiff filed the suit for specific performance of the agreement of sale and in the alternative for the refund by Sukhey defendant alone of the earnest money of Rs. 5,500/- with pendente lite and future interest. The plaintiff had also alleged that though the sale deed was to be executed within three years possession of the land was delivered to him by Sukhey after entering into the agreement for sale.

3. The suit was contested by the defendants on a number of grounds. Sukhey had alleged that he had asked the plaintiff to receive back the sum of Rs. 5,500/- and return the agreement of sale. During the trial he, however, advanced the plea that the sum of Rs. 5,500/- was given to him as loan which was to be satisfied out of the yield of the land in three years' time. However, it was also pleaded that the land remained in the cultivation of Sukhey. The defendants Nos. 2 to 4 contended that they were bonafide purchasers for value and without notice of the agreement of sale.

4. The trial court dismissed the suit for specific performance of the agreement but decreed the suit for recovery of Rs. 5,500/- against Sukhey defendant No. 1. The suit was dismissed against defendants Nos. 2 to 4. Against that decision Mam Chand plaintiff and Sukhey defendant No. 1 preferred separate appeals. The appellate court below allowed the appeal of the plaintiff Mam Chand and dec-feed the suit for specific performance of the contract. The appeal filed by Sukhey was dismissed. Aggrieved the defendants Nos. 2 to 4 have now come to this Court in second appeal.

5. Both the courts have recorded a concurrent finding of fact that the possession of the agricultural land in question was not delivered to the plaintiff at the time of the agreement of sale. The trial court, however, found that the defendants Nos. 2 to 4 were bonafide purchasers and the agreement of sale was void on account of Mam Chand being a minor. The appellate court below reversed that finding holding that the defendants Nos. 2 to 4 were not the bonafide purchasers and the agreement of sale was not void. The finding recorded by the appellate court below that the defendants Nos. 2 to 4 were not bonafide purchasers for value and had notice of the agreement of sale executed by Sukhey in favour of the plaintiff is a finding of fact. It is based on appreciation of evidence and there is no reason to interfere with the same. The learned counsel for the appellants, however, urged that the agreement of sale having been entered with a minor through his guardian was void, hence unenforceable. The learned counsel for the appellants argued that the transaction of purchase by a minor should fall as it suffers from want of mutuality inasmuch as the plaintiff at the time of the agreement was a minor and the agreement could not have been enforced against him by the defendant Sukhey. In support of his contention the learned counsel placed reliance on the decision of the Privy Council in the case of Mir Sarwarjan Chowdhry v. Kakhruddin Mahomed . I.L.R 39 Cal. 232. and on the decision in the case of Bholanath v. Balbhadra Pd. . 1964 A.L.J 494.. In the case of Mir Sarwarjan the Privy Council held:

“It is not within the competence, either of the manager of the minor's estate or of the guardian of the minor, to bind the minor or the minor's estate by a contract for the purchase of the immovable property, that as the minor was not bound by the contract, there was no mutuality; and that consequently he could not obtain specific performance of such a contract.”

6. Relying on this decision of the Privy Council this Court in Bholanath's case held that even assuming that the defendant was of sound mind when he made the agreement, it could not be enforced against him as it suffered from want of mutuality. The defendant in that case was found by the first appellate court to be not of sound mind when he executed the agreement. The plaintiff of that suit at the time of that agreement was also a minor. On these facts it was held that the agreement could not have been enforced against the plaintiff minor by the defendant as there was want of mutuality in the transaction.

7. The position of a guardian of a minor under Hindu Law was considered by the Privy Council in Hunoomanpersaud Pandey v. Mt. Babooee Munraj Kunweree . 6 M.I.A 393. wherein it was observed that the acts of the Banee cannot be reasonably viewed otherwise than as acts done on behalf of another, whatever description she gave to herself, or others gave to her. This view was reiterated by the Privy Council in the case of Subrahtmanyam v. Subba Rao . A.I.R 1948 P.C 95.. Quoting certain passages from Pollock and Mulla's Indian Contract and Specific Relief Act, 7th Edn. their Lordships of the Privy Council held:—

“Thus the act of the mother and guardian in entering into the contract of sale in the present case was an act done on behalf of the minor appellant. The position of the minor under such a contract is discussed in the following passage, with which their Lordships agree, in Pollock and Mulla's Indian Contract and Specific Relief Acts, Edn. 7, p. 70:

“A minor's agreement being now decided to be void, it is clear that there is no agreement to be specifically enforced; and it is unnecessary to refer to former decisions and distinctions, following English authorities which were applicable only on the view now overruled by the Privy Council.”

The learned authors are here referring to the decision in 30 I.A 114 already overruled by the Privy Council.”

“It is, however, different with regard to contracts entered into on behalf of a minor by his guardian or by a manager of his estate. In such a case it has been held by the High Courts of India, in cases which arose subsequent to the governing decision of the Privy Council, that the contract can be specifically enforced by or against the minor, if the contract is one which it is within the competence of the guardian to enter into on his behalf so as to bind him by it and further, if it is for the benefit of the minor. But if either of these two conditions is wanting, the contract cannot be specifically enforced at all.”

8. In the case of Mir Sarwarjan the contract which was sought to be specifically enforced was entered into by a manager of Mahomedan minor who admittedly had no power to bind the estate of the minor or the minor by a contract for the purchase of immovable property. The position, however, would be different in regard to a contract entered into on behalf of the minor by his guardian who under the Hindu law was competent to enter into such-an agreement. In such a case the contract can be enforced by or against the minor if the contract is one which it is within the competence of the guardian of the minor to enter into on his behalf so as to bind him by it and further, it is for the benefit of the minor. This was held by the Privy Council in the subsequent case of Subrahmanyan. The latter decision of the Privy Council in Subrahmanyan's case must be taken to have overruled all decisions made on the basis of Mir Sarwarjan's case. The doctrine of mutuality has, however, lost ITS vigour because of the provisions of Sub-sec. (4) of Sec. 20 of the Specific Relief Act, 1963, which provides that the court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party. The true test, therefore, for the validity and enforceability of a contract by a minor's guardian is not the existence of mutuality but the competence of the guardian and legal necessity or benefit to the minor or his estate. If a contract by a competent guardian of a Hindu minor for sale or purchase is for necessity or for the benefit of the minor it would be valid and enforceable. The court would, however, not be deprived of its discretionary power to refuse to enforce the agreement if the supervening circumstances affect the interests of the minor and the circumstances are cahnged to his detriment at the time the contract is sought to be enforced. It appears that in Bholanath's case the later decision of the Privy Council in Subrahmanyan case was not brought to the notice of the court. The agreement of sale in that case was entered into on 4th March 1948 and the suit was filed in 1951 much, before the enforcement of the Specific Relief Act of 1963. In the present case the agreement of sale was entered into on 20th March 1967 and the suit for specific performance thereof was filed in 1968. The Specific Relief Act, 1963 came into force on 1st March 1964. Hence the provisions of the Specific Relief Act, 1963 were clearly applicable to the said agreement of sale. That being so, in view of the provisions of Sub-sec. (4) of Sec. 20 of the Specific Relief Act, 1963 the specific performance of the agreement cannot be refused merely on the ground that the contract is not enforceable at the instance of the other party.

9. In the present case the agreement for sale was made on behalf of the minor by his father Mahabir Singh who admittedly was the natural guardian of his minor son. The agreement was, therefore, made by a competent person on behalf of the minor. The contract was, therefore, binding upon the minor from the time when it was executed. The learned counsel for the appellant urged that in the transaction in question the minor was not a party but his guardian was a party. He argued that there is a distinction between a contract between two competent persons and a contract between a minor through his guardian and another person who was competent to enter into the contract. In the latter case, it was submitted that the minor was a stranger to the contract because he did not directly act in the contract but he acted through the guardian. There is little substance in this contention. The word ‘transferor’ in Sec. 53-A of the Transfer of Property Act refers to the person who contracts to transfer for consideration any immovable property by writing signed by him or on his behalf. The act of the guardian in entering into the contract of sale was an act done on behalf of the minor and in such a case the minor would be bound by the contract if the contract was found to be for his benefit.

10. The learned counsel for the appellant then argued that it should have been pleaded by the plaintiff that the contract was entered into by a competent person on behalf of the minor and that was for the benefit of the minor and in the absence of such a pleading the contract was not enforceable. I find little force in this contention as well. Sec. 9 of the Specific Relief Act, 1963 postulates that in a suit for specific performance of a contract the defendant may plead any ground which may be available to him under any law relating to contract such as absence of a concluded contract, coersion, mis-representation or want of authorities to enter into the contract etc. The appellate court below has observed that it was not disputed that the alleged agreement of sale would definitely be in the interest of the minor, who had entered into the contract through his natural guardian. The minor had also not disowned the contract. The suit was filed describing Mam Chand as a minor. The first appeal was, however, filed by Mam Chand not through his guardian. It was not contended before the appellate court below that the first appeal was not maintainable inasmuch as it was not filed through the guardian. It, therefore, indicates that Mam Chand had by the time of the filing of the first appeal become major and therefore, chose to file the appeal without his guardian. He, on attaining majority, did not elect to abandon the action which had been commenced on his behalf through his guardian. On the contrary he elected to continue the proceedings by filing the appeal. Mam Chand has also been impleaded in the second appeal not through his guardian. He is represented by a counsel in the appeal and has contested the appeal. The defendant had not pleaded any grounds in the written statement challenging the enforceability of the contract in question. Rule 8 of order 6 of the Code of Civil Procedure lays down that where a contract is alleged in any pleading, a bare denial of the same by the opposite party shall be construed only as a denial in fact of the express contract alleged or of the matters of fact from which the same may be implied and not as a denial of the legality or sufficiency in law of such contract Rule ??? quires that the defendant must raise by his pleadings all matters which show the suit not to be maintainable, or that the transaction was either void or voidable in point of law and all such grounds of defence as, if not raised, would be likely to take the opposite party by surprise, or would raise issues of fact not arising out of the plaint, as for instance, fraud, limitation, release, payment, performance, or facts showing illegality. These provisions leave no doubt that the party denying merely the factum of the contract and not alleging its unenforceability in law must be held bound by the pleadings and be precluded from raising the legality or validity of the contract. (See Kalyanpur Lime Works v. State of Bihar . A.I.R 1954 S.C 165.). As indicated above the defendants in the present case did not plead the grounds challenging the enforceability in law of the said contract. It is, therefore, not open to them at this stage to contend that as the plaintiff had not specifically pleaded that the contract was for the benefit of the minor the contract is unenforceable.

11. No other point was urged.

12. In the result, the appeal fails and is dismissed with costs. The defendants Nos. 2 to 4 appellants are also directed to join Sukhey defendant in executing the sale deed in favour of the plaintiff. The stamp and registration charges pertaining to the sale deed shall be borne by the plaintiff. If the defendants fail to execute the sale deed in favour of the plaintiff within two months hereof the plaintiff shall be entitled to have the sale deed executed and registered through court in accordance with law.

Appeal dismissed.