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Summary of the Opinion (Fazl Ali, J.) — Appeal in suit for specific performance

Factual and Procedural Background

The plaintiffs sued for specific performance of a contract executed on 6 February 1928 by defendant 1 (in the plaintiffs' case acting as karta) to sell "10 gandas odd zamindari interest" in mauza Sukhpur Solhni for Rs. 3,000. The agreement referred to certain lands described as "22 bighas khadkasht ...", lands which, the plaintiffs acknowledged, had been settled with a third party and yielded an annual rent of Rs. 71 (to be received by the plaintiffs from the settlement holder). The plaintiffs impleaded four sets of defendants: the defendants first party comprised defendant 1 (father/karta), defendant 2 (major son), and defendants 3–5 (minor sons); other defendant parties were co-sharers and some had purchased portions of the property.

The trial Court awarded a small damage to the plaintiffs against defendant 1 but refused to decree specific performance. The plaintiffs appealed; the District Judge also refused specific performance for reasons discussed below but directed costs consequences; the plaintiffs then preferred this second appeal to the Court whose opinion is reproduced here.

Legal Issues Presented

  1. Whether a contract affecting lands in the possession of a Hindu joint family that includes minor members can be specifically enforced against those minors when the contract was entered into by the family's manager/karta.
  2. Whether the plaintiffs' conduct — asserting entitlement to khas possession of 22 bighas which they knew they did not legally or equitably possess — bars them from obtaining specific performance under equitable principles (i.e., the "clean hands" doctrine and the discretionary nature of specific performance under S. 22).

Arguments of the Parties

Appellants' (Plaintiffs') Arguments

  • The agreement subsequently entered into among defendant 1 and his co-sharers was collusive and intended to prejudice the plaintiffs' claim for specific performance.
  • The District Judge was wrong to refuse specific performance on the ground that the plaintiffs had dishonestly claimed khas possession; at most the judge should have compensated the defendants (e.g., by costs) rather than refuse specific performance entirely.
  • The plaintiffs pointed out that though they had claimed khas possession in the plaint, when the matter came on appeal they expressed willingness to allow the defendants first party to remain in possession of the lands on payment of the contractual rent of Rs. 71 per year.
  • The plaintiffs relied on the contention that defendant 1 had executed/registered the contract as karta and thus the contract could be enforced even though defendant 2 had not signed.

Respondents' / Defendants' Position (as reflected in the opinion)

  • The agreement among the family members (after the contract) had been executed in good faith and showed survey entries were not correct in certain respects; the trial Court so found.
  • The plaintiffs knew at the time of the contract that the 22 bighas of khudkasht lands were actually in the possession of defendants first party and that the plaintiffs were only entitled to the annual rent; yet the plaint asserted entitlement to khas possession.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Calcutta High Court, 34 CWN 2721 (referencing Privy Council in 39 IA 1) Held that a contract affecting lands in the possession of a Hindu joint family that includes minor members cannot be enforced against the minors. Not followed. The Court noted this decision but contrasted it with the Full Bench decision of this Court (2 PLJ 5133) and did not adopt the Calcutta view.
Privy Council, 39 IA 1 Authority relied upon by the Calcutta High Court decision (as cited in the opinion) on enforceability against minors in joint-family contexts. Cited by the Calcutta decision; the opinion records the reference but does not adopt the Privy Council view, instead following the Full Bench of this Court.
Full Bench of this Court, 2 PLJ 5133 Held that a contract entered into by the manager/karta of a Hindu joint family can be specifically enforced even though some family members were minors when the contract was entered into, because the karta is not a mere agent but has power under Hindu law to contract on behalf of the family. Followed. The Court stated it was not prepared to dissent from this Full Bench view and proceeded on the basis that a karta's contract may be enforceable; the Court nevertheless considered other reasons to refuse specific performance in the present case.
Lord Chancellor, 7 Ir Eq Rep 590 Equitable principle that a court should not give relief to a plaintiff who insists on an untrue construction of a contract with "eyes open" and who attempts to perpetrate a fraud or acts in bad faith — "he who seeks equity must come with clean hands." Quoted at length and applied. The Court relied on this principle to support the District Judge's refusal to grant specific performance where plaintiffs had pursued a claim inconsistent with the true contract and known to be wrong.

Court's Reasoning and Analysis

The Court proceeded in stages:

  1. Preliminary point — enforceability against minors: The Court acknowledged conflicting authorities. It recorded the Calcutta High Court's negative view but followed the Full Bench decision of this Court in 2 PLJ 5133 that a karta's contract can be enforced even when some members are minors. The Court therefore accepted, for the purposes of the appeal, that the contract could be enforceable and (because the lower appellate Court had found the contract to be for the benefit of the minors) proceeded on the assumption that the contract was beneficial to them.
  2. Central equitable objection — plaintiffs' conduct: The Court accepted the District Judge's factual findings that (a) both parties were aware the 22 bighas of khudkasht lands were actually in defendants' possession and that plaintiffs would only receive the rent of Rs. 71; and (b) despite this knowledge the plaintiffs alleged in the plaint that they were entitled to khas possession of those 22 bighas. The Court agreed with the District Judge that this amounted to an attempt by the plaintiffs to obtain a different construction of the transaction from that which was "really intended by the parties" and that such conduct amounted to acting without "clean hands."
  3. Application of equitable discretion (S. 22): The Court emphasized that specific performance is discretionary under S. 22. Given the plaintiffs' insistence on a construction they knew to be false, the Court held the District Judge's refusal to grant specific performance was a proper exercise of that discretion supported by equitable principles. The Court quoted the Lord Chancellor in support of the proposition that equity will not assist a plaintiff who seeks to insist on a false construction and then seeks relief according to the true meaning if he has acted in bad faith.
  4. Additional substantive and procedural objections: The Court identified further grounds (apart from plaintiffs' alleged dishonesty) for refusing specific performance: (a) the written contract (Ex. 1) purported to be executed by defendant 1 and defendant 2, with defendant 1 described as guardian; the trial Court found defendant 1 had in truth acted as guardian (not as karta) and defendant 2 had not actually signed or been present at registration; the plaintiffs later sought to treat defendant 1's act as that of karta — the Court noted uncertainty in this respect and that the trial Court's reasons for treating defendant 1 as having elected not to act as karta had not been answered; (b) the trial Court found survey entries concerning the khudkasht lands to be incorrect and there was a subsequent agreement among co-sharers that altered the inter se position; (c) the contract gave no particulars identifying the 22 bighas, so enforcing the contract would create confusion about identity of the lands and likely produce further litigation affecting minors.
  5. Relief and costs: Given these cumulative reasons, the Court concluded that specific performance should not be granted. However, because defendant 1 had not contested the suit, the Court directed that defendant 1 should pay the plaintiffs' costs incurred throughout. There would be no order for costs between the plaintiffs and the respondents who had appeared in this Court, and the decree for costs already obtained by the respondents in the trial Court would stand.

Holding and Implications

Holding: The appeal is DISMISSED.

Implications (direct consequences stated in the opinion):

  • The plaintiffs do not obtain a decree for specific performance.
  • The trial Court's small award of damages in favour of the plaintiffs against defendant 1 remains in place to the extent reflected in the earlier orders (the Court dismissed the appeal but directed a specific costs order as follows).
  • Costs: Defendant 1 (who did not contest the suit) is directed to pay the costs incurred by the plaintiffs throughout. There will be no order for costs between the plaintiffs and the respondents who appeared in this Court. The decree for costs obtained by the respondents in the trial Court will stand.
  • The opinion does not indicate that a novel legal principle or binding new precedent was laid down; the Court followed existing Full Bench authority on the karta issue but refused relief on equitable and factual grounds specific to this case.

Additional notation from the judgment: Madan, J. concurred. Final entry: "10. Appeal dismissed."

    Tribeni Prasad Singh v. Jainarain Singh

    Fazl Ali, J.:— This is an appeal by the plaintiffs in a suit for specific performance of a contract. The Courts below have awarded a small damage to the plaintiffs against defendant 1 but have refused to grant a decree for specific performance and so the plaintiffs have preferred this second appeal.

    2. The plaintiffs impleaded in this suit four sets of defendants of which the defendants first party consist of defendant 1, the father, defendant 2, his major son and defendants 3 to 5, his minor sons. Defendants 2nd, 3rd and 4th parties are co-sharers of defendants first party and some of them have purchased portions of the property which is the subject matter of this suit. The case of the plaintiffs is that on 6th February 1928 defendant 1 as karta of his family executed an agreement contracting to sell to the plaintiffs 10 gandas odd zamindari interest in mauza Sukhpur Solhni in the district of Bhagalpur for a sum of Rs. 3,000. In this contract reference has also been made to certain lands which are said to appertain to the said zamindari interest and which are described in these words:

    22 bighas khadkasht batainisf and gairmasrua khas recorded in the khatian of executant No. 1 and one third share in the lands recorded in the name of executant No. 1 and one Jogendra Narain Singh.

    3. As to these lands it is stated that they had before the date of the contract been settled with a third party at a rental of Rs. 71 per year and the plaintiffs were entitled only to receive the above rent from the settlement holder. It is necessary to mention this fact because (1) it has been found by both the Courts below that in spite of this recital the lands in question were actually in possession of the defendants first party and this fact was fully known to the plaintiffs at the time when they entered into the present contract and (2) because it appears that subsequent to the contract there was an agreement between defendant 1 and his other co-sharers, namely defendants 2nd, 3rd and 4th parties by which the position inter se of all these persons in respect of khud kasht lands was defined and it was made clear that the survey entries in respect of some of those lands were not correct. It has been argued in this Court on behalf of the appellants that this agreement was a collusive one and was intended to prejudice their claim for specific performance but the trial Court has found that the agreement had been executed in good faith and that in fact the survey entries are not correct in certain particulars.

    4. The first question which was raised in this Court was whether a contract affecting lands which were in possession of a Hindu joint family consisting of certain minor members could be enforced against them. This question has been answered in the negative by the Calcutta High Court in 34 CWN 2721 and the view put forward in that case is supported by a reference to the well known decision of the Privy Council in 39 IA 1.2 A Full Bench of this Court, however, in 2 PLJ 5133 has taken a contrary view and has held that a contract entered into by a manager of a joint Hindu family can be specifically enforced even though some of the members were minors at the time when the contract was entered into. It was pointed out in that case that the manager of a Hindu joint family is not an agent of the other members of the family and that when he contracts in his capacity as a karta, the contract is made not by minors but by a person who has power under the Hindu law to make a contract on behalf of the joint family. This decision has been followed in other High Courts and as at present advised I am not prepared to dissent from it. As to whether the contract in question was beneficial to the minor defendants and justified by legal necessity or not, the first Court held against the plaintiffs answering the question in the negative, but the lower appellate Court has reversed its findings and we must, therefore, for the purpose of this appeal assume that the contract, as it was entered into, was for the benefit of the minors. Thus the only point which requires consideration is the point upon which the suit has been dismissed by the learned District Judge on appeal.

    5. The learned Judge has held (1) that both the contracting parties were aware that 22 bighas of khud kasht lands were in the possession of the defendants first party and it was fully understood by them that these lands would continue to be in possession of the defendants first party and the plaintiffs would be entitled to receive an annual rent of Rs. 71; (2) that in consideration of this fact the price of the property to be sold was fixed at Rs. 3,000 though its proper value was at least Rs. 5,000 and (3) that the plaintiffs were not entitled to a decree for specific performance because in their plaint they dishonestly asserted that they were entitled to the khas possession of 22 bighas of khud kasht lands. The view taken by the learned District Judge was that in making this demand the plaintiffs had tried to take advantage of the false recital in the contract that the property at the time of the contract was in possession of certain tenants and on this point he has expressed himself as follows:

    Now specific performance is an equitable remedy and the Court has discretion in such cases though that discretion must be exercised in a judicial manner. It is one of the principles of equity that he who seeks equity must do equity, or it has sometimes been expressed ‘he who seeks equity must come with clean hands’. In the present case it is clear that the plaintiffs have not throughout been willing to carry out the terms of the agreement (Ex. 1) as they were really intended by the parties; but have instead attempted by suit to punish the defendants first party for the failure of defendant 1 to carry out his agreement by claiming in their suit those 22 bighas of land to which they had not, and knew they had not any legal or equitable claim.

    6. It is contended on behalf of the appellants that the District Judge was wrong in refusing to pass a decree for specific per formance in favour of the plaintiffs on the ground stated in the above passage and that the utmost that he should have done was to compensate the defendants by making a suitable order as to costs. It was also pointed out on their behalf that though the plaintiffs did state in their plaint that they were entitled to khas possession of 22 bighas, yet when the matter came up before the District Judge on appeal, they expressed their willingness to allow the defendants first party to remain in possession of those lands on payment of an annual rent of Rs. 71 as provided in the contract. This argument appears to be plausible at the first sight, but on a careful consideration of all the facts of the case I have come to the conclusion that the view taken by the learned District Judge is correct in law. The plaintiffs came to Court with a definite case that they were entitled to khas possession of the 22 bighas of land as will appear from para. 10 of the plaint which runs as follows:

    That the defendants first party being in khas possession of the said kamat lands, the clause in the agreement dated 6th February 1928 regarding the kamat land cannot be binding on the plaintiffs and the plaintiffs are entitled to khas possession of the said kamat lands.

    7. This claim was persisted in by the plaintiffs so long as the case was before the trial Court and the trial Court took some pains to point out that they were trying to enforce a contract which was not beneficial to the minors and was also different from the contract which had been entered into by the parties. When the plaintiffs appealed to the District Judge they still claimed in the memorandum of appeal that they were entitled to khas possession of the 22 bighas of land, but when it was found that the court-fee paid by them on the memorandum of appeal was insufficient, they filed a petition withdrawing their claim for khas possession. The learned Judge has noted in his judgment that he asked the pleader for the plaintiffs what justification they had for attempting to obtain khas possession of the 22 bighas of land, if, as he has already urged, the price to be paid was fixed on the basis that the plaintiffs would be excluded from khas possession of those lands and to this the only reply of the pleader for the plaintiffs was that when defendant 1 failed to carry out the agreement, the plaintiffs probably thought it advisable to claim as much as possible. These facts make it clear that the plaintiffs did attempt to put a construction upon the contract which was known by them to be wrong and in doing so they acted dishonestly. Now S. 22 clearly states that the jurisdiction to decree specific performance is discretionary and the Court is not bound to grant such a relief merely because it is lawful to do so. It is true that it also states that the discretion of the Court is not arbitrary but sound and reasonable, but in my opinion the reasons given by the learned District Judge for not granting a decree for specific performance were far from arbitrary and were based upon the well known principle that equity will not help a dishonest suitor who demands what he is not entitled to. This principle was stated very clearly by the Lord Chancellor in 7 Ir Eq Rep 5904 in these words:

    Here the evidence shows the real nature of the contract; and the question is, whether I can give the aid of this Court to a plaintiff making such a case as this. The plaintiff now says, “I am content to admit that the real contract was not as I stated it, but as it is proved” … I never will execute a contract for a plaintiff one way, when with his eyes open he insists in his bill on a different construction against good faith. If he attempts to perpetrate a fraud and fails, I shall take care that he fails altogether, and does not obtain the aid of the Court at all a Court of equity is not to let parties speculate whether they can commit a fraud and then if they fail, seek what they are really entitled to. I am perfectly justified in dismissing the bill on that ground, although I should have had no difficulty in giving the plaintiff a decree according to the real meaning of the contract, if he had asked for it directly, properly and fairly.

    8. There also appears to me, apart from the ground upon which the suit has been dismissed by the learned District Judge, the following other grounds for holding that a decree for specific performance should not be granted in this case: (1) Ex. 1 purports to be a contract by defendant 1 as well as by defendant 2 and defendant 1 is described therein as the guardian of his minor sons. The trial Court had after a full discussion of the evidence adduced in the case held that although in fact defendant 1 was the karta of the family, yet at the time when he signed the contract he purported to act merely as the guardian of his minor sons and not as representing the whole family and for this reason defendant 2 was also joined as a party to the agreement.

    9. It appears that defendant 2 neither signed the contract nor was present at the time of its registration. The plaintiffs now want to enforce the contract on the ground that defendant 1 purported to register the contract as a karta and that he was in fact a karta. The learned Judge seems to have accepted this contention but he has made no attempt to meet the arguments which were advanced by the trial Court to show that although it was open to defendant 1 to execute the contract as a karta, yet as he had elected not to do so, the plaintiff could not now turn round and say that he should be deemed to have executed it as a karta. However that may be, the fact remains that one of the parties to the written contract who was to have executed it, did not execute it and the reasons for his not executing it are not clearly before us; (2) it has been found by the trial Court (and the finding of the Court has not been disturbed in appeal) that the survey entries with regard to khudkasht lands are not correct in certain respects and there is thus a conflict between the contract relied upon by the plaintiffs and the agreement subsequently entered into between defendants first party and his co-sharers. Moreover as the learned trial Court has pointed out no particulars have been given in the contract of the 22 bighas of khudkasht lands and the identity of those lands is by no means clear. In such circumstances a decree for specific performance of the contract would only lead to confusion and also involve the minors in further litigation. I would in these circumstances dismiss the plaintiffs' appeal but having regard to the fact that defendant 1 did not contest the suit I would direct that the costs incurred by the plaintiffs throughout should be paid by him (defendant 1). There will be no order for costs between the plaintiffs and the respondents who have appeared in this Court, but the decree for costs obtained by the latter in the trial Court will stand.

    Madan, J.:— I agree.

    S.C/D.S

    10. Appeal dismissed.

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    Comments

    Tribeni Prasad Singh v. Jainarain Singh
    (Feb 5, 1937)