1. This is an appeal by defendant No. 2 against the concurrent judgments of the Courts below in a suit filed by the plaintiff for specific performance of contract in respect of plot No. 6563, which contains a house and which originally belonged to defendant No. 1 Bihar Mahton. He executed a kebala in favour of the plaintiff on 2-3-1953 but it was not registered. Then the plaintiff presented it before the Sub-Registrar for compulsory registration on 21st April, 1953. About a month before this date Bihari (defendant No. 1) sold this very property to one Amrit Lal Sahu by a registered kebala. In the proceeding before the Sub-Registrar for compulsory registration, the executant (defendant No. 1) did not appear and the registration was refused by the Sub-Registrar. Then there was an appeal before the District Sub-Registrar, Monghyr, who on 2-3-1954, dismissed the appeal because the lawyer of the plaintiff said that he had been instructed not to prosecute the appeal. On 16-12-1953, the plaintiff sold this very property by a registered deed of sale to defendant No. 2, the appellant, for Rs. 500/-, which was paid to him.
2. The plaintiff's case was that he was entitled to specific performance of contract from defendant No. 1, who should be asked to register the kebala in his favour. The plaintiff's case further was that there was an agreement between him and the appellant to the effect that the latter would conduct the appeal in the registration case before the District Sub-Registrar, Monghyr, but in collusion with the other side he had got that appeal dismissed.
3. The defence was that there had been no such agreement and that this appellant had no hand in the dismissal of the appeal. It was further said that no decree for specific performance of contract could be passed in favour of the plaintiff because the suit property had been sold to Amrit Lal Sahu, who had not been made a party to the suit. It was also alleged that defendant No. 2 had filed a suit for refund of consideration on 14-7-1954 and it was as a counterblast to this suit that the plaintiff had filed his suit. The suit filed by this appellant for the refund of consideration money was said to be still pending. It may be mentioned that this appellant had filed his written statement on 30-6-1955. Registration had been refused by the Sub-Registrar in February 1954. The present suit was filed on 20-1-1955. There were still about nine months or so left for the period of limitation to expire and within this period the plaintiff, if he so liked, could have impleaded Amrit Lal Sahu as a party to the suit but he did not do it in spite of the aforesaid objection having been raised by defendant No. 2.
4. The Courts below decreed the suit holding that the plaintiff was entitled to specific performance of contract because there was already a contract between the plaintiff and defendant No. 1 whereby the latter had purported to sell the property to the plaintiff but tide had not been completed as the sale deed had not been registered. The Courts below believed the case of the plaintiff that there was an agreement between him and the appellant whereby the latter had undertaken to prosecute the appeal before the District Sub-Registrar, Monghyr, on behalf of the plaintiff.
5. In appeal before me it has been urged on behalf of the appellant that the Courts below have misdirected themselves in passing a decree for specific performance of contract in favour of the plaintiff. It is contended by Mr. Madan Mohan Prasad, learned counsel for the appellant, that the relief for specific performance of contract is an equitable relief and the Court should give full consideration to the facts involved in the case. The plaintiff in order to make his decree effective should have made Amrit Lal Sahu a party to the suit and that too when defendant No. 2 had raised his objection on this point within time. That not having been done, the plaintiff was not entitled to any relief. His next argument is that the only course open to the plaintiff was to have filed a suit within 30 days of the date on which registration was refused as provided under Section 77 of the Registration Act and as this had not been done, the present suit was not valid. On the question of the finding regarding the alleged agreement between the plaintiff and the appellant for prosecution of the appeal before the District Sub-Registrar, Monghyr, learned counsel has urged that this finding was not proper because the Courts below have not considered the effect of the order passed by the District Sub-Registrar wherein he has mentioned that counsel for the plaintiff had represented to the Court that his client did not want to prosecute the appeal.
6. In reply, learned counsel for the respondents has urged that as there was no decree against the appellant, he cannot prefer any appeal except against the order for cost that has been given against him and secondly that it was not at all necessary to implead Amrit Lal Sahu because the plaintiff had no cause of action against him and the plaintiff was entitled to specific performance of contract against defendant No. 1.
7. In my opinion, the contention of learned counsel for the appellant that the plaintiff was not entitled to a decree for specific performance of contract on the facts of this case appears to me sound. Undoubtedly the relief for specific performance is an equitable relief and Section 22 of the Specific Relief Act itself says that the jurisdiction to decree specific performance is discretionary and the Court is not bound to grant such relief merely because it is lawful to do so. Of course, this discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of Appeal. Thereafter in this section the Legislature has put down certain cases in which the Court may properly exercise a discretion not to decree specific performance.
8. But it must be remembered that these principles are not exhaustive and the Court's discretion in order to grant specific performance is not confined to them. In special cases when there are some good and reasonable grounds for not exercising this discretion in favour of the plaintiff, the Court will not hesitate to exercise that discretion against the plaintiff. In this connection it is also profitable to refer to Section 27 of the Specific Relief Act which says that specific performance of a contract may be enforced against either party to the contract or any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract.
9. Now in this particular case it has been contended that before the plaintiff filed his kabala for compulsory registration, the property had already been transferred by registered sale deed to Amrit Lal Sahu and consequently he should have been made a party. Having regard to what has been said in Section 27 of the Specific Relief Act, which I have mentioned above, I think that the plaintiff ought to have impleaded Amrit Lal Sahu as a party to the suit because he I was, in my opinion, a necessary party inasmuch as by this decree in favour of the plaintiff his right in-the property is to be affected since if the kebala executed by defendant No. 1 in favour of the plaintiff is registered, it being of a prior date to the kebala in favour of Amrit Lal Sahu, his title to the land will be immediately affected by it.
10. Moreover, no Court of equity will grant a decree to any person, particularly the relief for specific performance of contract, when that relief was not likely to be effective which would be so in this case if the plaintiff is granted this relief for specific performance of contract in the absence of Amrit Lal Sahu, specially when the plaintiff was seeking to recover possession in this case. He will be at once met by Amrit Lal Sahu and no Court will grant possession to the plaintiff as against Amrit Lal Sahu because he has purchased the property by registered sale deed while the plaintiff's right to get the sale deed registered had not been decided in his favour. The Court of equity is very loath to grant such a kind of relief specially when it is not clear why the plaintiff has fought shy of not impleading Amrit Lal Sahu in this case specially when the defendant appellant had raised this point at a time when there was ample opportunity for the plaintiff to implead Amrit Lal Sahu as a party to the suit and got an effective decree in the suit after the decision of the question whether Amrit Lal Sahu was or was not a purchaser for value without notice of the contract in favour of him.
11. In the view which I have taken, it is not at all necessary to decide the question of the bar under Section 77 of the Registration Act. Even so, some argument has been advanced on this point, but this argument of the appellant is not of much substance because, in my opinion the present suit is not hit by S. 77. In the case of Jnaman Mahton v. Amrit Mahton, AIR 1946 Pat 62, the matter has been clarified by this Court. It is true that Amrit Lal Sahu is not a party here but that does not matter and that cannot be a distinguishing feature which would take the present case out of that authority of this Court. There also the plaintiff sought relief for specific performance of contract. Here also the plaintiff seeks the same relief. The mere fact that Amrit Lal Sahu, third party purchaser, is not a party to this suit does not make any difference so far as the principle is concerned. I am therefore inclined to overrule this contention of learned counsel for the appellant.
12. I also do not find any force in the contention of learned counsel for the respondents that an appeal was not maintainable because no decree on the point had actually been passed against the appellant. I have looked into the decree and it appears that the decree was against the defendant with costs. Moreover, there was a particular allegation against defendant No. 2 that he had played fraud upon the plaintiff inasmuch as he in collusion with defendant No. 1 had allowed the appeal filed by the plaintiff against the order of refusal of registration by the Sub-Registrar dismissed. Moreover the appellant's right in the property was affected by this claim of the plaintiff in so far as the appellant had filed a suit, for refund of consideration money earlier than the present suit filed by the plaintiff. In my opinion, there is no substance in the contention of learned counsel for the respondents that the appellant was not entitled to maintain this appeal because substantially no decree had been passed against him.
13. There is also no force in the contention of learned counsel for the respondents that it was not necessary for the plaintiff to implead Amrit Lal Sahu as a party to the suit because the plaintiff had no cause of action against him.
14. The plaintiff had certainly cause of action against him because he had purchased the very same property subsequent to the purchase made by the plaintiff, by a registered sale deed and he was, as I have already stated, under Section 27 of the Specific Relief Act entitled to enforce his specific performance of the contract against Amrit Lal Sahu also.
15. For the reasons stated above, I would allow the appeal, set aside the judgments and decrees of the Courts below and dismiss the suit with costs throughout.
LC/V.S.B
16. Appeal allowed.