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Panchananda Kundu v. Rajani Kanta Pal

Calcutta High Court
Jul 21, 1930
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Summary of Opinion (Costello, J.)

Factual and Procedural Background

The plaintiff sued for specific performance of an alleged verbal contract with defendant 1 for the sale of a beel in Mouza Deoshair at a price of Rs. 1,850. The plaintiff alleged that defendant 1, purporting to act for himself and his two minor brothers (members of a joint Hindu family governed by Dayabhaga law), took various bonds and Rs. 50 in cash by way of earnest and agreed to execute a deed of sale after obtaining court permission for the minors. The plaintiff sought specific performance as against defendant 1 for his one-third share, and alternatively sought return of the consideration money if specific performance could not be enforced.

All defendants contested the suit, denying the contract and the payments. The Munsif found no concluded agreement and dismissed the plaintiff's case. On appeal the Subordinate Judge, First Court, Dacca reversed the Munsif, holding that there was a concluded agreement between the plaintiff and defendant 1 and that defendants 2 and 3 had notice of the prior contract. The Subordinate Judge decreed specific performance limited to defendant 1's one-third share on the footing that the plaintiff should deposit a proportionate part of the price (Rs. 266-10-8) so that, together with what the plaintiff had already paid or been allowed, the plaintiff would pay one-third of Rs. 1,850 (i.e., Rs. 616-10-8). Defendant 1 was ordered to execute and register conveyance for his one-third share; on his default the Court would do so.

The present appeal challenges the Subordinate Judge's order limiting specific performance to defendant 1's share on payment of a proportionate part of the price. The High Court (panel including Costello, J. and Suhrawardy, J.) heard argument and rendered the opinion summarized here.

Legal Issues Presented

  1. Whether specific performance could be decreed in respect of defendant 1's one-third share of the jointly owned property, and if so on what terms.
  2. Whether the case fell within Section 15 of the Specific Relief Act, 1877 (requiring payment of the whole contract price for a conveyance of the vendor's share), or within Section 16 (permitting specific performance of a severable part on proportionate abatement), or Section 14 (minor proportion unperformed).
  3. Whether the purchaser was entitled to a proportionate abatement of the purchase-money when obtaining only the vendor's share.

Arguments of the Parties

Appellant's Arguments (represented by Dr. Basak)

  • Contended that the case falls within Section 15 of the Specific Relief Act, 1877.
  • Argued that if the plaintiff is to obtain defendant 1's one-third share by specific performance, the plaintiff must pay the whole of the original contract price (not merely a proportionate one-third).

Respondent's Arguments (represented by Mr. Upendra Kumar Roy)

  • Argued that the matter fell within Section 16 of the Specific Relief Act and that the subject-matter was divisible so that specific performance as to defendant 1's share could be enforced on payment of one-third of the purchase price.
  • Relied in part on English authorities and first principles to support a contention for proportional abatement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
William Graham v. Krishna Chunder Dey, A.I.R. 1925 P.C. 45 (Privy Council) Held that S.16 did not apply where the part sought to be enforced did not stand on a separate and independent footing; emphasized that Sections 14–17 form a complete code. The Court relied on the Privy Council’s analysis to reject the respondent's S.16 argument and to stress that Indian sections (14–17) must govern rather than English principles; concluded that S.16 could not be invoked here a fortiori.
Balusivami Aiyar v. Lakshmana Aiyar, A.I.R. 1921 Mad. 172 (Full Bench, Madras) Held that where a managing member of a joint Hindu family purports to sell joint family property not binding on co-parceners, the case falls under Section 15; purchaser seeking specific performance of the vendor's share must be prepared to pay the whole consideration and the share should be specified in the decree. The Court treated this Full Bench decision as a governing authority, adopting its holding that Section 15 applies and that the purchaser must pay the entire contract price to obtain the vendor's share.
Dina Nath Sarma v. Gour Nath Sarma, A.I.R. 1925 Cal. 434 Applied Illustration (a) to Section 15 and held the section applicable in facts similar to the present matter. Cited as a closely similar decision from this Court supporting application of Section 15 to cases where a member of a joint family cannot bind co-parceners; used to reinforce the conclusion that Section 15 governs the present case.
Purna Chandra Mukerji v. Gopendra Krishna Kundu, A.I.R. 1926 Cal. 744 Decision of this Court on similar questions involving sale by a member of a joint family. Referred to as another supporting authority from this Court consistent with applying Section 15 in such circumstances.

Court's Reasoning and Analysis

The Court analysed the case by reference to Sections 14–17 of the Specific Relief Act, 1877, treating those sections as a complete statutory code governing specific performance in India. It explained the distinct functions of the three sections:

  • Section 14 — where an unperformed part bears only a small proportion to the whole;
  • Section 15 — where the unperformed part forms a considerable portion of the whole; and
  • Section 16 — where a part of the contract can be clearly severed and stands on a separate and independent footing.

Applying those categories to the present facts, the Court observed that defendant 1 only had a one-third share and thus could not perform more than that share: the part left unperformed was therefore a considerable portion of the whole agreement. The Court rejected the respondent's reliance on Section 16, explaining that the shares of co-sharers in a joint Hindu family could not be treated as separate severable parts of the kind contemplated by Section 16; the purchaser's willingness to pay the whole price for the entire property did not mean he would accept a mere 1/3 proportion of the price for an undivided 1/3 share without additional consequences.

The Court relied on the Privy Council decision in William Graham v. Krishna Chunder Dey to emphasise that Sections 14–17 are to be construed as a self-contained code and that English authorities are of limited value where those sections prescribe a different rule. It also relied on the decisions of this Court (Dina Nath Sarma; Purna Chandra Mukerji) and the Madras Full Bench (Balusivami Aiyar v. Lakshmana Aiyar) as authorities applying Section 15 to transactions by members of joint Hindu families. The Court accepted the view that Section 15, unlike English law, excludes a purchaser's claim to a proportionate abatement of the purchase-money where the vendor can convey only his share.

On that statutory and precedential basis the Court concluded that the case falls squarely within Section 15 and that the Subordinate Judge's order permitting a proportionate payment to obtain defendant 1's one-third share was incorrect.

Holding and Implications

APPEAL ALLOWED; SECTION 15 OF THE SPECIFIC RELIEF ACT, 1877 GOVERNED THE CASE.

Holding (direct effect):

  • The Court set aside so much of the Subordinate Judge's judgment as ordered the plaintiff to deposit Rs. 616-10-8 (i.e., one-third proportionate payment) to obtain defendant 1's one-third share.
  • The plaintiff, if he wished to obtain defendant 1's one-third share by specific performance, must pay the whole original contract price of Rs. 1,850 less Rs. 350 which had already in effect been paid to defendant 1 (that is, pay the remaining balance of the whole consideration as the condition for obtaining the vendor's one-third share).
  • Alternatively, if the plaintiff did not elect specific performance on those terms, he was entitled to monetary compensation for the loss caused by the vendor's breach.
  • The Court initially allowed the plaintiff 14 days to elect which remedy to pursue. The record shows the plaintiff ultimately elected not to purchase the one-third share; the Court then ordered defendants to return the money already paid with interest at six percent per annum and directed that the respondent pay the appellants' costs.

Implications:

  • The decision enforces the statutory scheme in Sections 14–17 of the Specific Relief Act and applies established authority that where one member of a joint Hindu family can convey only his share, the purchaser seeking specific performance must pay the entire contract price (Section 15) rather than a proportionate abatement.
  • The ruling produces direct consequences for the parties: the plaintiff may either purchase the vendor's share on the statutory terms (payment of the whole consideration less amounts already paid) or claim monetary compensation; in this matter the plaintiff chose compensation and recovery with interest was ordered.
  • The opinion relies on and applies existing precedents and Full Bench authority; it does not assert the establishment of a new legal principle beyond reaffirming the application of Section 15 to sales by members of joint Hindu families.

Disposition: Appeal allowed. The Court ordered restoration of money paid with 6% interest where the plaintiff elected compensation, and directed that the respondent pay the appellants' costs.

Show all summary ...

Costello, J.:— This is an appeal from a decision of the Subordinate Judge, First Court, Dacca, reversing a decision of the Munsif at Munshiganj. The matter out of which this appeal has arisen was a suit for specific performance of a contract for the sale of certain land said to have been made by defendant 1 on behalf of himself and his two minor brothers. The land in question was a beel in Mouza Deoshair. The plaintiff's case was that in the latter part of Magh 1332 B.S defendant 1 entered into a verbal contract with him for the sale of the land in question at the price of Rs. 1,850 and that the defendant by way of earnest took back from him a bond for Rs. 96 which had been executed by defendant 1's father in favour of the plaintiff. The plaintiff further said that afterwards defendant 1 took back three other bonds which had then recently been executed for an aggregate sum of Rs. 200 on the understanding that the debt of Rs. 200 for which they were security would be credited towards the consideration for the conveyance of the land in suit. The plaintiff further said that subsequently defendant 1 took from him a sum of Rs. 50 in cash also on account of the purchase price and agreed to execute a deed of sale on behalf of himself and his minor brothers upon getting permission on that behalf from the District Judge. Subsequently defendant 1 was induced to execute and indeed in fact executed a bayanapatra for the sale of the same land to defendants 2 and 3. The plaintiff did not seek to enforce the contract as against the minor brothers of defendant 1 but brought the present suit for the enforcement of the contract as against defendant 1 only in respect of his one-third share of the land in question and he made an alternative claim that in case the contract could not be enforced a decree should be made for the return of the consideration money which he had already paid on account of the price.

2. The suit was contested by all the defendants and they denied both the making of the contract of sale and the payment of any consideration money on account of it. Defendants 2 and 3, put forward as their case that defendant 1 had entered into a contract for sale of the land in question with them for the price of Rs. 3,000 out of which they had deposited Rs. 500 on account of the price. Defendants 2 and 3 also denied that they had any notice or knowledge of any prior contract between defendant 1 and the plaintiff. The learned Munsif after a consideration of the evidence found that there was no concluded agreement between defendant 1 and the plaintiff for the sale of the land in question and also found as a fact that the plaintiff did not return any bonds to that defendant and he came to the conclusion that the case set up by the plaintiff was a false case which he was unable to prove. When the matter came before the Subordinate Judge of Dacca on appeal however he after a very careful review of the evidence, came to the conclusion that there had been a concluded agreement between the plaintiff and defendant 1 which was capable of enforcement at law and also found that there was evidence on the record that defendants 2 and 3 had notice of the prior contract made between the plaintiff and defendant 1. In the course of his judgment the learned Subordinate Judge says:

“I am unable to agree with the learned Munsif that the contract between the plaintiff and defendant 1 was not a concluded agreement which was capable of specific performance. On the contrary think that there was sufficient and reliable evidence before him for taking the opposite view that the contract was a concluded agreement which was capable of enforcement.”

3. He then proceeded to deal with the question of the remedy to which the plaintiff was entitled and gave the plaintiff a decree upon the footing that the plaintiff was entitled to get from defendant 1 a conveyance of the latter's ⅓rd share in the land in question upon paying to defendant 1 the sum of Rs. 266-10-8 which represented the sum which, together with the amount which the plaintiff had already paid to or had been allowed by defendant 1 towards the amount of the price, would come to Rs. 616-10-8, that is to say ⅓rd of the total purchase price of Rs. 1,850. The learned Subordinate Judge made an order that the plaintiff should within one month from the date of the judgment deposit in Court the sum of Rs. 266-10-8 to the credit of defendant 1, whereupon defendant 1 should within two months execute and register a conveyance in respect of his ⅓rd share of the land in suit in favour of the plaintiff and that on the defendant's default to execute and register the kobala the same shall be executed and registered by the Court on his behalf.

4. It is to be observed that the plaintiff came to Court with the allegation that defendant 1, purporting to act not only for himself but also on behalf of his two minor brothers had agreed to sell the beel, the subject-matter of the suit, to the plaintiff and that defendant had no right to deal with the shares of his minor brothers or to procure a conveyance of their shares in the land in question without the authority of the Court. Defendant 1 and his two minor brothers were members of a joint Hindu family governed by Dayabhaga law. That being so although defendant 1 might have been acting as the karta of the joint family, clearly he was not authorized to dispose of the shares belonging to his brothers and so far as that part of the case is concerned it is not seriously contended otherwise. The only question seriously argued before us was what was the nature and extent of the relief to which the plaintiff was entitled in the circumstances of the case, and whether or not he was entitled to get specific performance of the entire contract between him and defendant 1, and if so upon what terms. I have already said that the learned Subordinate Judge made an order decreeing specific performance of the contract to the extent only of defendant 1's share in the property upon the plaintiff's paying a proportionate part of the price for the whole of the property. Dr. Basak, on behalf of the appellant, argued that was not a proper order and that the case was one which fell within the ambit of Section 15 of the Specific Relief Act, 1877, and accordingly the plaintiff was entitled to get specific performance to the extent of defendant 1's share and that only on payment not of a proportionate part of the price but the whole of the price originally agreed upon. On the other hand Mr. Upendra Kumar Roy argued that the matter fell within the scope of Section 16 of the Specific Relief Act, and that it was possible to say that the property, the subject-matter of the contract, was so divisible that there could be specific performance of the contract with regard to one part of it, that is to say, defendant 1's share, upon payment of the ⅓rd only of the purchase price. In my opinion that argument was put forward in a somewhat half-hearted fashion because the learned advocate seemed to realize that because a man is willing to pay Rs. 1,850 for the whole of a certain property it by no means necessarily follows that he will be willing to pay the exact ⅓rd of the price in order to obtain an undivided ⅓rd share of the same property. Probably if not certainly, by making such a purchase he would be involved in further litigation in order to secure what he had purchased. It seems to us that on the face of the contract, which purports to be a contract for the sale of joint Hindu property, it is not possible to say that the shares of the various co-sharers in that property can probably be said to form separate parts of the property in the sense contemplated in Section 16 of the Specific Relief Act.

5. Mr. Roy sought to support his argument by a reference to a case decided by the Privy Council, William Graham v. Krishna Chunder Dey . A.I.R 1925 P.C 45. In that case, by a contract in writing, two plots of land, A and B, had been agreed to be sold. The contract stated that the plots were of about equal area and defined each by specified boundaries, but the price was a price for both plots together, and the other terms of the contract dealt with both together. The vendor having failed to make a title to plot B the purchaser sued for specific performance or damages. The purchaser declined to take a conveyance of plot A only under the provisions of Section 15 of the Specific Relief Act. Their Lordships of the Privy Council held that specific performance could not be decreed as to plot A with an abatement of price in consequence of the failure to make a good title to plot B.S 16 was not applicable, since it did not appear that the contract as to plot A stood “on a separate and independent footing” so as to be within the terms of Section 16 of the Specific Relief Act, 1877. It is a little difficult to understand how the learned advocate for the respondent in this case thought that this decision would be of any assistance to him in the argument which was put forward. Seeing that in the circumstances, and on the facts of that case, their Lordships thought that S. 16 did not apply to the case it follows a fortiori that in the circumstances of the case with which we are now concerned S. 16 would certainly not apply. Mr. Roy then, in support of his contention, made some reference to isolated English decisions on the question of specific performance of contract, and even went so far as to argue the matter by a reference to first principles. I must point out that it has been repeatedly emphasized in the numerous decisions in this country on this point, that it is futile to endeavour to discuss a matter of this kind by a reference to a prior principles, and it is of not little utility to refer to English authorities. The law in India with regard to the specific performance of contracts is in many respects quite different from the law in England. The law in this country is contained within the four corners of certain sections of the Specific Relief Act, 1877, namely Ss. 14 to 17 inclusive. As was pointed out by Lord Sumner who delivered the judgment of their Lordships of the Privy Council in the case to which I have already referred:

“Sections 14 to 17 inclusive of the Specific Relief Act 1877, are both positive and negative in their form. Taken together they constitute a complete code within the terms of which relief of the character in question must be brought, if it is to be granted at all. Although assistance may be derived from a consideration of cases upon this branch of English jurisprudence, the language of the section must ultimately prevail.”

6. His Lordship then proceeded to say:

“Section 17 prescribes that there shall be no grant of specific performance except in cases coming within one or other of the three previous sections.”

7. Then his Lordship says with reference to the case then before the Court:

“It was not proved that the part of the contract which was left unperformed bore only a small proportion in value to the whole within S. 14, and the purchaser had declined to accept relief on the terms of S. 15. Accordingly S. 16 (which appears to be novel in the width of the power which it confers) afforded the only ground on which the Court could help him. To make this section applicable it had to be shown that there was a part of the contract, to wit, that relating to plot A which (a) ‘taken by itself could and ought to be specifically performed’”

and (b)

“‘stood on a separate and independent footing’ from the other part of the contract, which admittedly could not be performed.”

8. It is quite clear that Ss. 14, 15 and 16 deal with three sets of circumstances. S. 14 deals with the case where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value; S. 15 deals with a case where the part which must be left unperformed forms a considerable portion of the whole; and S. 16 deals with a case where part of the contract can dearly be severed from the rest of the contract. In the present case the circumstances are such that beyond all question the matter does not fall within the purview of S. 14. The matter also does not fall within the purview of S. 16. Therefore it seems to us that it is a matter beyond all argument that this is one of the class of cases which fall within the intermediate section, that is to say, within S. 15. One has only to consider the salient features of the contract to sea that the matter was so. Defendant 1 has only one-third share in the property and he is in a position to sell that one-third share and no more. Therefore the part which must be left unperformed forms a considerable portion of the whole. Where that is so the Indian legislature in enacting Section 15 of the Specific Relief Act, unlike the English Law, has not recognized the right to a proportionate abatement of the purchase-money. It is pointed out in Pollock and Mulla's Treatise at p. 849 that

“this section agrees with English law in allowing a purchaser to enforce specific performance at his option under the named conditions, although the vendor cannot claim it. But the Indian enactment clearly excludes, in such cases any claim of the purchaser to compensation, thus making a considerable and (it must he presumed) deliberate departure from English authority.”

9. In the case of Balusivami Aiyar v. Lakshmana Aiyar . A.I.R 1921 Mad. 172, Kumaraswami Sastri, J. at p. 627 (of 44 Mad.) put the matter thus:

“The English decisions on the subject of specific performance where a party is only entitled to a share are not uniform and the latter part of Section 15 of the Specific Relief Act, is a clear departure from the English rule as to abatement or compensation when specific performance of part of a contract is decreed.”

10. I respectfully adopt the language of that learned Judge in the argument before us. The learned advocate for the respondent seems to have completely ignored the fact that there is a multitude of decisions dealing with the question as to the right to specific performance where the contract has been made by one member of a joint Hindu family and this multitude of decisions is spread over all the High Courts of India and indeed when one comes to look into the matter one finds that this question has already been placed beyond the region of forensic controversy. We do not think it necessary to refer at length, to the numerous decisions which are to be found in the reports of the various High Courts. It will be sufficient if I refer to two decisions of this Court and of the Madras High Court. It happens that these decisions of this Court for soma reason or other have not apparently found their way to any of the authoritative reports. It may be it is for that reason that the parties here have endeavoured to re-agitate the question. In the case of Dina Nath Sarma v. Gour Nath Sarma . A.I.R 1925 Cal. 434 the facts were very similar and indeed, almost identical with the facts of the present case. In the course of his judgment Pearson, J., says:

“I am unable to distinguish the facts of the case now before us from the facts which are given in Illus. (a), Section 15 of the Specific Relief Act, and I think the lower appellate Court was right in holding that was the section to be applied in the circumstances of this case”

and with that decision Graham, J., agreed. The other case in this Court is that of Purna Chandra Mukerji v. Gopendra Krishna Kundu decided by Greaves, J. and B.B Ghose, J., and reported in A.I.R 1926 Cal. 744. The Madras case is the one from which I have already quoted is that of Balusiuami Aiyar v. Lakshmana Aiyar. The head-note of that case is as follows:

“The managing member of a joint Hindu family, who, for purposes not binding upon the other co-parceners and without their concurrence, agrees to convey a specific item of joint family property, cannot perform his contract in its entirety and the case falls within the provisions of Section 15 of the Specific Relief Act. The purchaser in such a case cannot enforce specific performance of the entire contract. But the Court will grant specific performance by a conveyance of the share which the vendor had in the pro-party at the date of the contract, if the purchaser elects to pay the entire consideration and the share should be specified in the decree.”

11. The case was decided by a Full Bench of the Madras High Court that consisted of Sir John Wallis Kt., C.J, and Oldfield and Kumaraswami Sastri, JJ. In the course of the hearing a large number of authorities were referred to and the matter was considered in the fullest possible manner. We are of opinion that this case should be taken to govern cases of the kind with which we are now dealing. It is a complete and definite authority for holding that where one member of a joint Hindu family purports to sell not only his own share but those of his co-parceners and the vendor is not able to give a good title to anything more than his own individual share in the property; if the purchaser desires to have a remedy by way of specific performance he cannot claim more than the share of the actual contracting member of the joint family and he can only obtain even that share by being prepared to pay not merely a proportionate part of the purchase price but the whole of the sum originally agreed upon as the consideration for the sale of the entire property-in question. In that view of the matter holding as we do that Section 15 of the Specific Relief Act, governs this case we have no other course open to us but to allow this appeal and to set aside so much of the judgment of the Subordinate Judge of Dacca as orders that the plaintiff shall deposit in Court the sum of Rs. 616-10-8. If the plaintiff desires to have defendant 1's one-third share in the land in question conveyed to him he must be prepared to pay the whole sum of Rs. 1,850 less, of course, the sum of Rs. 350 which has already in effect been paid by him to defendant 1. If on the other hand the plaintiff is content to get relief by way of compensation from defendant 1 for this undoubted breach of contract he will be entitled to obtain monetary compensation from defendant 1 for the loss which he has sustained. We propose to give the plaintiff an opportunity to make up his mind with regard to the course which he desires to adopt and for that purpose we defer making a final order and allow the plaintiff 14 days' time in which to decide which of the two causes I have indicated he would prefer to follow.

Suhrawardy, J.:— I agree.

Costello, J.:— In this matter we allowed the respondent time to decide whether he will obtain the defendant's one-third share of the property which was the subject matter, of the contract for the whole of the purchase price agreed to be paid for the entire property agreed to be sold or on the other hand recover from the defendants-appellants the money which he had already paid actually ??? in effect on account of the price. We are now in formed by the learned advocate for the respondent that he does not wish to purchas the one-third share of the property. We accordingly order that the defendant do return to the plaintiff all the money which he has already paid in effect or in cash with interest at six per cent per annum. We have already indicated that the appeal will be allowed and the respondent must pay the appellants' costs.

Suhrawardy, J.:— I agree.

R.M/R.K

12. Appeal allowed.