Baluswami Aiyar v. Lakshmana Aiyar

The Judgment of the Court was delivered by

Sir John Wallis, Kt., C.J:— I agree with the answer proposed by Kumaraswami Sastri, J., which is in accordance with the view taken in Nagiah v. Venkatarama Sastrulu, to which I was a party and also, in my opinion, with the earlier decision of White, C.J, and Krishnaswami Ayyar, J., in Poraka Subbarami Reddy v. Vadlamudi Seshachalam Chetty, when those learned Judges observed at page 360:

“The plaintiff asks for a decree against the shares of the first and fourth defendants at least. This we think he cannot have.”

All they meant, as appears from the rest of the judgment, was that he could not have a decree directing these defendants, who were parties to the agreement, to convey their own interest at a reduced, price. This might have been granted in England but in-cases governed by section 15 of the Specific Relief Act a plaintiff can only have part performance if he is willing to pay the full contract price and to waive all claims for compensation. As the plaintiff in that case expressed his willingness to comply with these conditions, the learned Judges at the close of their judgment gave him decree as regards the shares of the first and fourth defendants. This amounts to a clear ruling that a case such as the present is governed section 15 of the Specific Relief Act. This was the conclusion at which I arrived in Nagiah v. Venkatarama Sastrulu, and after careful re-consideration I think it was right.

Oldfield, J.:— I agree.

Kumaraswami Sastri, J.:— The question referred to us for decision is:

“Where the managing member of a joint Hindu, family enters into a contract to sell an item of family property, and that contract, is not proved to be binding on the other members, can specific performance of it be decreed against him, and if so, on what terms?”

The answer to the question depends on the provisions of sections 15 and 17 of the Specific Relief Act, and the extent and nature of the powers of alienation possessed by a member of a joint and undivided family.

section 15 of the Specific Relief Act provides that

“Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed forms a considerable portion of the whole, or does not admit of compensation in money, he is not entitled to obtain a decree for specific performance. But the Court may, at the suit of the party, direct the party in default to perform specifically so much of his part of the contract as he can perform, provided that the plaintiff relinquishes all claim to further performance, and all right to compensation either for the deficiency, or for the loss or damage sustained by him through the default of the defendant.”

It is argued for the appellant that an undivided co-parcener professing to sell the whole of an item of joint family property for purposes not binding on the other co-parceners cannot perform the whole of his contract, as he has only a share in the property, that he cannot give a good title even to his share, as his right to it would be contingent on his getting it in a suit for partition, and that in any event all that he can get is a decree for the share belonging to his vendor on payment of the full consideration under the latter part of the section. For the respondent it is argued that, as Courts in working out the equities between the purchaser and the other co-parceners in a suit for partition would allot to the vendor the property conveyed by him, it cannot be said for certain that the vendor is unable to perform his contract and that consequently the purchaser is entitled to a decree directing the vendor to convey the property, leaving it to the purchaser to realize it as best he can.

There is a conflict of authority on the point. In Gurswami v. Ganapathia, it was found that the agreement by the father to sell was not for necessity and was not binding on his minor son. Sir Charles Turner who delivered the judgment of the Full Bench observed that imperfection of title in the seller is not sufficient by itself to justify the Court in refusing to award specific performance of a contract of sale. If the title be such as the seller can legally convey, the purchaser has the right to claim the completion of the bargain, although the title he may thereby acquire may not be indefeasible if a claim be brought by a third party but the Court may not grant specific performance of the contract, if the contract be made by a trustee in excess of his power or involves a breach of trust. The Full Bench called for a finding as to necessity and held that there was no justifying necessity. A decree was passed directing a sale by the father of his half share on receipt of one-half of the purchase money, on the ground that while the Judge was unable to enforce the sale in its entirety they considered that to the extent of the father's interest the respondent was entitled to insist on it, if he thinks fit to do so. The contract was entered into before the Specific Relief Act came into force and the decision therefore does not deal with section 15. It is, however, authority for the view that a co-parcener can perform part of the contract to the extent of his share. In Kosuri Ramaraju v. Ivalury Ramalingam, the contract to sell was by one of three members of a joint family. It was held by the Subordinate Judge that the contract was not binding on the other members of the family and the suit was dismissed against all the defendants, as he considered it impossible to apportion the consideration for the sale and the property agreed to be conveyed. In Second Appeal Bashyam Ayyangar and Moore, JJ., held that the plaint disclosed no cause of action against the brothers who were not parties to the contract but that the plaintiff was entitled to a decree for specific performance against the person who agreed to sell the property, without any determination of the question whether the sale by him would or would not bind the interests of the other defendants in the property. No authorities are cited nor is section 15 of the Specific Relief Act considered. In Srinivasa Reddi v. Sivarama Reddi, the suit was for specific performance of a contract by an undivided father to sell joint property. It was found that the son was not bound by the contract, and a decree was passed directing the father to sell his half share on receipt of one half of the consideration. In Second Appeal Sankaran Nayar and Pinhey, JJ., were of opinion that section 15 would only be applicable if the person who agreed to sell

“had no interest a any portion of the property agreed to be conveyed as in illustration (a) or is unable to convey such portion as in illustration (b) to the section.”

The learned Judges followed Kosuri Ramaraju v. Ivalury Ramalingam and decreed the specific performance of the contract to sell the whole of the plaint property against the first defendant (who entered into the contract) without determining whether such contract would bind his son. Justice Sankaran Nayar however took the opposite view in Subba v. Venkairami, which I refer to presently. In Poraka Subbarami Reddy v. Vadlamudi Seehachaldm Chetty, the contract was by an adult member of a joint family, acting for himself and as guardian of the minor co-parceners, to sell an item of joint property. It was found that the contract was not binding on the minors and the lower Court dismissed the suit for specific performance against all the defendants, including the person who entered into the contract. It was held in Second Appeal by Sir Arnold White, C.J, and Krishnaswami Ayyar, J., that sections 14 to 16 of the Specific Relief Act do not enable such a contract to be separated as regards the person who entered into the contract and the person on whom it was not binding, that section 17 of the Act precluded the passing of a decree against the share of the person contracting or a decree for the whole against such person, but that the purchaser if he was willing to pay the whole of the purchase money was entitled to a decree directing the contracting party to convey his interest in the property. A distinction is sought to be drawn between cases where a finding as to the binding nature of the contract on the other parties to the suit is or is not necessary, and no opinion is expressed as to whether the interpretation put on section 15 in Srinivasa Reddi v. Sivarama Reddi by Sankaran Nayar and Pinhey, JJ., was correct. In Govinda Naicken v. Apathsahaya Iyer, the plaintiff sued to enforce the specific performance of an agreement by one of two divided brothers, alleging that the defendant agreed to have the sale-deed executed by himself and his divided brother on his own account and as guardian of the minor son. The District Munsif dismissed the suit on the ground that sections 15 to 17 precluded him from granting a decree for specific performance of the contract to sell the entire house, and the plaintiff did not offer to purchase the defendant's half on paying the full purchase money. The District Judge thought that there was nothing to prevent the plaintiff from getting a decree, the plaintiff being allowed to take a sale-deed for what it was worth, but dismissed the suit on the ground of delay. In Second Appeal it was held by Sundara Ayyar and Spencer, JJ.; that the Court cannot direct execution of a deed which on its execution would be useless owing to the vendor having no title over part of the property.

In Nagiah v. Venkatarama Sastrulu, the contract was entered into by a father, who was the managing member of the family consisting of himself and his adult and minor sons. It was found that the contract was not binding on the sons and the suit was dismissed. It was held by Wallis and Ayling, JJ., that section 15 of the Specific Relief Act applied to cases where a member of an undivided family agrees to sell part of the joint property in which he has only a share and that the circumstance that an undivided father has an interest in every portion of the undivided property conveyed does not take the case out of the operation of the section. After referring to Kosuri Ramaraju v. Ivalury Ramalingam, Srinivasa Reddi v. Sivarama Reddi, and Govinda Naicken v. Apathsahaya lyer, the learned Judges observed:

“To us, however, it appears that the consideration that an undivided father has an interest in every part of the undivided property in no way takes the case out of the operation of the section which runs thus: ‘Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed forms a considerable portion of the whole…. He is not entitled to obtain a decree for specific performance.’ We think the words of the section apply where a member of an undivided family agrees to sell part of the joint property in which he has only a share; and the present case is a particularly plain one, because according to the plaintiff's own evidence the first defendant agreed to get the other members of the family to execute the sale deed. Further, the contract has been decided in the present suit not to be binding on the other members of the family, and to decree specific performance against the first defendant only would be merely encouraging useless litigation. We may add that Barrett v. Ring is no authority on the present point as the facts were entirely different. The plaintiff does not claim the benefit of the latter part of section 15 of the Specific Relief Act and we dismiss the Second Appeal with costs.”

In Subba v. Venkatrami the contract was entered into by an undivided father and it was found that it was not binding on the son. It was held by Sankaran Nayar and Spencer, JJ., that the plaintiff was not entitled to a decree for specific performance either against the father or the son. Referring to Nagiah v. Venkatarama Sastrulu Sankaran Nayar, J., observed:

“A person is entitled to specific performance of a contract by a member of the Hindu family to sell his share of the family property. But there is no question of part performance in that case. If the learned Judges intended to go further and lay, down that if a junior, member of a Hindu family agrees to sell any specific property belonging to his family a decree may be passed against him to sell his share of that specific property. I am unable to agree with that view. Because the junior member is unable to perform the whole of his part of the contract by conveying the entire property agreed to be sold and for the same reason that he is not entitled to claim any specific property till partition, conveyance of a portion is not a part of the contract ‘as he can perform’ in the terms of section 15 of the Specific Relief Act. On the view that a co-parcener cannot alienate any specific property no specific performance can be decreed.”

Where a person sues for specific performance of an agreement to convey and simply impleads the party bound to carry out the agreement there is no necessity to determine the question of the vendor's title, and the fact that the title which the purchaser may acquire might be defeasible by a third party is no ground for refusing specific performance if the purchaser is Willing to take such title as the vendor has. But where a party seeking specific performance seeks to bind the interests of persons not parties to the contract, alleging grounds which under Hindu Law would bind their interests and enable the vendor to give a good title as against them and makes them parties, it is difficult to see how the question as to the right of the contracting party to, convey any interest except his own can be avoided and a decree passed, the effect of which will merely be to create a multiplicity of suits. As pointed out in Govinda Naicken v. Apathsahaya Iyer the execution of a sale-deed by a person in respect of property which he has no right to alienate

“would be an act improper in itself as it is calculated to throw a cloud over the title of the other parties entitled to shares in the property and would give them a cause of action for a suit.”

With all respect it seems to me that Kosuri Ramaraju v. Ivalury Ramalingam and Srinivasa Reddi v. Sivarama Reddi, which decide that under such circumstances a decree should be passed against the contracting party even if the transaction has been found not to be binding on his co-parceners, would afford no protection to any of the parties, and as pointed out in Nagiah v. Venkatarama Sastrulu, would be merely encouraging useless litigation. I may add that Sankaran Nayar, J., who was a party to Srinivasa Reddi v. Sivarama Reddi refused to pass such a decree when the same question came up before him for decision in Subba v. Venkatrami. I do not think the Court ought to pass a decree directing a sale of the property ordered to be conveyed when it finds that the person agreeing to convey was only a co-parcener with others and the agreement would not bind their interests. Where the person contracting is the father or managing member of the family he stands in a fiduciary relationship to the other members [Annamalai Chetty v. Murugesa Chetty, Sahu Ram Chandra v. Bhup Singh] and his contract to sell the entire item of joint family property for purposes not binding on them is a breach of duty, and I do not think the Court ought to compel execution of a sale-deed in such cases of the entire item of property leaving it to the other members to incur the expense and go through the trouble of filing a suit to protect their interests. [See Gurusami v. Ganapathia and Baikuntha Barik v. Shib Dass] There is, however, no objection to the share of the vendor being ordered to be conveyed in cases where he can dispose of his share, as he will then only be exercising his right without detriment to anybody else.

I am also of opinion that section 15 of the Specific Relief Act applies to such cases. With all deference I am unable to follow the reasoning of Sankaran Nayar, J., in Srinivasa Reddi v. Sivarama Reddi, to the effect that section 15 would have, application only when the person agreeing to sell has no interest in any portion of the property agreed to be sold. No such restriction appears in the section and the language applies to all cases where a party cannot perform the whole of what he contracts to do, whether such inability is due to his not having a good title to the property agreed to be conveyed or has a good title over only a part of the property. The section only reproduces the English Law with the difference that where the party elects to take what he can get he can only do so by giving up claims to compensation; and I can find no such distinction in any of the cases though joint tenants are entitled per tout et per mie in the joint property. I agree with Nagiah v. Venkatarama Sastrulu that section 15 is applicable to cases where a father or a member of a joint family agrees to sell an item of joint property under circumstances that would not bind the other members.

There are no texts which deal with the question of a member of an undivided family alienating property for his own private and individual purposes and there can be little doubt that such an alienation is inconsistent with the strict theory of a joint and undivided family governed by the Mitakshara. As pointed out by Mayne:

“if any member were allowed from time to time to sell his share in the joint family property without severing himself from the family by partition he would be getting the advantages of a partition without submitting to its inconveniences. It would be like the case of partner who claimed the rights to withdraw his capital from the concern at pleasure without withdrawing himself.”

It is necessary to bear this aspect in mind when considering whether the same principles and equities should be applied where the matter rests on a contract as where the conveyance has been perfected.

The recognition of the rights of a purchaser for value has been, as pointed out by their Lordships of the Privy Council in Suraj Bunsi Koer v. Sheo Persad Singh,

“of gradual growth founded on the equity which the purchaser for value has to be allowed to stand in his vendor's shoes and work out his rights by means of a partition.”

So far as this Presidency is concerned it has been settled by a series of decisions, commencing from Virasvami Gramini v. Ayyaswami Gramini, that a co-parcener can alienate for value not only his share in the entire joint family properties but also his share in a specific item. It was held in Venkatarama v. Meera Lubai that a purchaser from a member of an undivided Hindu family cannot sue for a partition of the item sold to him and obtain an allotment by metes and bounds of his vendor's share in that portion of the property. This decision was followed in Polani Konan v. Masakohan. His remedy is therefore a suit for general partition. When, however the other co-parceners have alienated their shares also the purchaser from one of the co-parceners can sue and get his share by partition of the item in which only other purchasers are interested; Iburamsa Bowthan v. Theruvenkatasami Naick. So far as the other co-parceners are concerned it is open to them to accept the transfer as valid and seeking a partition with the purchaser of the only property in which such purchaser is interested: Subramanya Chettyar v. Padmanabha Chettyar, Iburamsa Rowthan v. Theruvenkatasami Naick.

As regards the share to which the alienee would be entitled, the view taken by the Full Bench in Rangasami v. Krishnayyan was that tho, share should be computed with reference to the share of the joint family at the date of the suit for, partition filed by him and not the state of things that existed at the date of the alienation; but a subsequent Full Bench of this Court in Chinnu Pillai v. Kalimuthu Chetti has taken the contrary view. It may therefore be taken as settled that there is no fluctuation in the share to which the alienee is entitled and that his share will be the share of the vendor at the date of the alienation, subject of course to the equities in favour of the other members of the family against the transferor.

The preponderance of authority is in favour of the view that the purchaser of the undivided share of a member of a joint family does not become a tenant in common with the other members. In Subba Row v. Annathanarayana Aiyar, Sundara Ayyar and Benson, JJ., were inclined to the view that when a co-parcener alienates his share in joint property, the alienee holds the share as tenant in common with the other co-parceners who, as between themselves, are joint tenants with respect to their own shares, and Krishnaswami Ayyar, J., was inclined to this view in Chinnu Pillai v. Kalimuthu Chetti. A contrary view was taken in Maharaja of Bobbili v. Venkata ramanjulu Naidu and Manjayya v. Shanmuga, which were referred to with approval by the Full Bench of this Court in Kota Balabhadra Patro v. Khetra Doss, where it was held that an alienee from a member of a joint Hindu family was not entitled to possession of the alienor's share as a tenant in common and that his only remedy was to obtain by partition the share to which the alienor was entitled.

As regards the nature of the equity which is recognized in favour of a purchaser for value of a co-parcener's share it is purely a personal right and is subject to any superior equities which the co-parcener may have against the alienor. In Dadha Sahib v. Mahomed Sultan Sahib, it was held that a purchaser from the purchaser of the share in the joint family properties cannot, enforce the equities which his vendor could have enforced, and in Sabapathi Pillay v. Thandavaroya Odayar it was held that a purchaser in Court sale cannot claim a right of substitution but was only entitled to the properties which were comprised in the sale certificate and which fell to the share of the co-parcener whose interests were sold in Court auction. As between the original parties the purchaser has been held to be entitled to the share which the vendor may get in a suit for partition even though the property may not be the property sold but another property which the vendor got for his share.

I am unable to accept the contention that a co-parcener who agrees to sell an item of joint family property, and not merely his share in it, is able to perform the contract merely because on the execution of a sale-deed the vendee will be in a position to file a suit for general partition and would, other things being equal, have the chance of getting the property sold allotted to the share of his vendor. The mere execution of a sale-deed is no performance when the vendor has no exclusive title and cannot put the purchaser in possession owing to the superior claims of his co-parceners. When a person agrees to sell property professing to have an absolute power of disposal over it and it is found that it is joint-family property in which he as a co-parcener has only got a share and that the agreement is not binding on the other co-parceners, I do not think he can perform the contract in its entirety. His chance of getting the property may be defeated by the other co-parceners suing for a partition of the particular item alienated and in a suit for partition they may have superior claims or there may not be other properties which can be given to the co-parcener in lieu of their shares in the property alienated. The view that the alienee from, a co-parcener becomes a tenant-in-common with the other co-parceners has not been accepted in the decisions I have referred to, and this now settled that the alienee of a share has only an equity to work-out his rights by partition. Having regard to the fact that the alienation of a share by a coparcener without the consent of the others is opposed to the spirit of the joint family system, and that it places the other members in a disadvantageous position as the alienor still remains a member of the joint family while conveying his share as also to the fact that it gives the right to an alienee of a small item of family property to disrupt the family by filing a suit for general partition, I do not think Courts ought to put a person whose claim rests on a purely executory contract in the position of a person who by reason of an executed conveyance and the payment of consideration has acquired rights which on equitable grounds Courts consider it desirable to work out in a suit for partition. Then the matter rests merely on a contract which under section 55 of the Transfer of Property Act gives a person no interest in the immovable property. The hardship to the other members of the family is an element to be taken into consideration in the exercise of the discretion. Moreover, the Court ought not to hold the vendor capable of performing, where all that can be predicated is that if the other co-parceners do not file a suit for partition of the item alienated or there exist other properties which can be, allotted to him on a general partition, so that without defeating any equities between the alienor and the other members the Court can allot the alienated properties to the vendee.

The preponderance of authority is against the view contended for by the respondent. In Nidamarthi Mukhanti v. Thammana Ramayyya, and Srinivasa Reddi v. Sivarama Reddi, the effect of section 15 of the Specific Relief Act is not considered and the Court thought that his right to convey need not be gone into. In cases where relief was given in respect of contracts prior to the Specific Relief Act the direction was to convey the share of the vendor on an abatement of the price if the purchaser so desired, and in subsequent cases his right to convey was left either for determination in another suit or, when it was held to be wanting his suit was either dismissed or if he so chose the share of the vendor was decreed on payment of the full consideration.

It is conceded that a co-parcener who agrees to sell joint property cannot enforce specific performance against the purchaser where the agreement is not binding on the other co-parceners, as he has not the title to convey, the entire property. The chance of his getting the properties allotted on partition is not in such cases equivalent to his ability to perform the contract. It is difficult to see how in the converse case it can be held that the person agreeing can perform the contract in its entirety.

I am of opinion that a co-parcener who agrees to convey an item of joint family property for purposes personal to himself and not binding on the other co-parceners cannot perform his contract in its entirety, and that the case falls within the first portion of section 15 of the Specific Relief Act.

The next question is whether specific performance can be decreed if the plaintiff is willing to take a conveyance of the share of the co-parcener on his paying the full consideration, I am of opinion that there is nothing to prevent the Court from doing this. The decision of the Full Bench in Chinnu Pillai v. Kalimuthu Chetti has finally settled that the share of the alienee from the co-parcener is fixed with reference to what it was at the date of the alienation and is not fluctuating with reference to subsequent events. The co-parcener has a share in each item of the joint family property and there is no difficulty in determining the share of a co-parcener on a given date. Joint tenants are seized per mie et per tout and as between themselves have separate rights. On the date of the agreement to convey the person contracting to sell would have a share determined by the number of the co-parceners, and, the authorities in this Presidency having given the co-parcener a right to alienate his share in a specific item of property, there is no reason why he should, not be directed to sell his share especially as that share is not subject to subsequent fluctuation. If the purchaser is willing to pay the full consideration, waive all claim to compensation or damage, and take only the share which his vendor is entitled to, nobody can possibly be prejudiced; while on the other hand it may be distinctly to the advantage of the vendor and co-parcener. Moreover, there is nothing to prevent the person in whose favour the agreement is entered into from filing a suit for damages, obtaining a decree and attaching and bringing to sale the share of the person who contracted to sell; thereby effecting indirectly what could be done directly if the Court grants him the share.

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.

In Lumley v. Ravenscroft, Lord Lindley stated the general rule to be that, in the absence of misrepresentation or misconduct, when a person is jointly interested in an estate with another person and purports to deal with the entirety specific performance will not be granted against him as to his share and that the only remedy was by way of damages. But in Hexter v. Pearce, specific performance was granted of a contract relating to an undivided moiety of mineral, property. In Burrow v. Scammell, a defendant who was entitled only to a moiety of the premises agreed to be sold was directed to perform specifically so much as she was able to perform with a proportionate abatement in the consideration. In Hooper v. Smart, it was held that where the vendors were entitled only to a moiety of the property agreed to be sold specific performance should be decreed of the moiety with the abatement of one-half of the purchase money.

So far as the decisions in India go, specific performance has been decreed of the share to which the vendor was entitled if the purchaser would take it. In Gurusami v. Ganapathia, a decree was passed directing conveyance of the half share to which the party contracting was entitled. The fact that section 15 would be a bar to the abatement in the price ordered does not affect the granting of the relief as to the share if the purchaser, is willing to take it without claiming any abatement in the price. In Poraka Subbarami Reddy v. Vadlamudi Seshachalam Chetty, it was held that the plaintiff was entitled to a decree for specific performance directing the conveyance of the vendors' share if he paid consideration. In Shama v. Kumed, where a member of a family governed by the Mitakshara purported to sell the whole property and the agreement was found not to be binding on the other members, specific performance of the contract in respect of the one-fourth share of the defendant was ordered without any abatement in the price. In Deendyal Lal v. Jugdeep Narain Singh, their Lordships of the Privy Council, while directing possession of property sold in execution of a decree to be given back to the co-parceners, added a declaration that the appellant as purchaser in execution sale acquired the share and, interest of the judgment-debtor in that property and was entitled to take proceedings to have that share ascertained. They only refrained from specifying the share as the wife of the judgment-debtor and mother of plaintiff might have been entitled to a share. In Suraj Bunsi Koer v. Sheo Persad Singh, the decree setting aside the execution sale in its entirety was set aside and a declaration granted:

“that by virtue of the execution sale to them the respondents acquire only the third undivided share…. which belonged to Adit Sahai with such power of ascertaining the extent of such third part of a share by means of partition as Adit Sahai possessed in his lifetime.”

I am of opinion that in all cases where the plaintiff elects to take the share on payment of the full consideration agreed upon the share of the vendor on the date of the contract should be specified.

My answer to the question is that section 15 of the Specific Relief Act applies to cases covered by the Order of Reference and that specific performance cannot be granted of the contract so as to direct execution of a conveyance of the entire property, but that it is open to the purchaser to get specific performance so far as the share of the vendor is concerned on payment of the consideration agreed upon without any abatement.

M.H.H