Egala Nagappa Naidu And Ors. v. P. Muniswamy Iyer And Ors.

1. This second appeal arises out of a suit for the specific performance of a contract for the sale of suit land executed by the second defendant; on 10th October 1913 in favour of plaintiffs. The first defendant, to whom the land was sold by the second defendant on 14th March 1916, is the contesting defendant. The District Munsif decreed the suit; but, on appeal by the first defendant, the Subordinate Judge held there was no contract and dismissed the suit. The plaintiffs appeal.

2. The alleged contract is evidenced by Exhibit A, the material portion of which runs as follows; "In respect of the lands which you and others had sold to my mother Ammoyammal on the 2nd October 1902, you executed a cultivation muchilka to me on the 10th October 1913 specifying the land with particulars of numbers. The amount mentioned in the said sale-deed is Rs. 600. And the amount of small loans taken from time to time is Rs. 200. On payment being made of the total amount of Rs. 800 (Eight hundred), within the 30th Vygasi of any year what so ever, I shall execute a sale deed to you in respect of the lands consisting of acres (1052) ten and fifty two cents specified in the aforesaid sale-deed. I shall not execute a sale-deed to any other person. Should a sale be in effected to any other person such sale shall not be valid." It, is clear that, under this document, the promisee has the option of paying the price agreed upon, within the 30th Vygasi of any year but that he was not bound to do so. Assuming that there was consideration for Exhibit A and that there is an agreement binding on the promisor, this agreement may, in popular language, be described as an agreement to sell. But what the second defendant really did was that she bound herself to sell to plaintiffs on certain terms, if they choose to avail themselves of the binding offer, and her agreement is, in truth, merely an offer which cannot be withdrawn and certainly does not connote an agreement to buy. It is only in this sense that there can be said to have been an agreement to sell in the present case. Helby v. Mathews (1895; App. Cas 47l at p. 477: 64 L.J.Q.B. 465 11 Rule 232;72. L.T. 841 : 43 W.R. 561 : 60 J.P. 20 per Lord Herschell, L.C., in Dickinson v. Dodds (1876) 2 Ch. D. 463 : 45 L.J. Ch. 777 : 34 L.T. 607 : 24 W.R. 594 James, L.J, said, "Unless both parties had agreed then there was no concluded agreement;" and Mellich, L.J., said, "I am clearly of opinion that it was only an offer, although it is in the first part of it, independently of the postscript, worded as an agreement. I apprehend that, until acceptance, so that both parties are bound, even though an instrument is so worded as to express that both parties agree, it is in point of law only an offer, and, until both parties are bound, neither party is bound."

3. The learned Vakil for the appellants, while conceding that the second defendant could not sue the plaintiffs for specific performance before the plaintiffs tendered the price, contended that the plaintiffs must be deemed to have agreed to buy but that only the payment of the price was postponed at their option and that this is a case of successive (as opposed to simultaneous) performance of reciprocal promises (section 54 of the Contract Act). But we find it difficult to follow this argument, So long as the second defendant cannot charge the plaintiffs with a breach or failure to perform though they are to begin, there never was a contract at all. The case in Charamudi v. Raghavulu 28 Ind. Cas. 871 : 39 M, 462: 28 M.L.J. 471 : 18 M.L.T. 76 : (1915) M.W.N. 596 was referred to in the course of the arguments. The point now before us was neither argued nor decided in that case. The only point raised in it was whether the contract therein was void as opposed to the rule against perpetuities. It may be that, in the case of a personal contract executed so far as one party is concerned, as in South Eastern Railway v. Associated Portland Cement Manufacturers (1910) 1 Ch. 12 : 79 L.J. Ch. 150 : 101 L.T. 865 : 74 J.P. 21 : 54 S.J. 8O; 26 T.L.R. 61, it is binding between the parties and no question of the application of the rule against perpetuities arises. But where the agreement is executory on both sides, with an option to one of the parties to do as he likes, there is nothing more than a a standing offer, though it may be that, during the lifetime of the promisor the distinction between a binding offer and a complete agreement is not of much importance as between the parties. In Charamudi v. Raghavulu 28 Ind. Cas. 871 : 39 M, 462: 28 M.L.J. 471 : 18 M.L.T. 76 : (1915) M.W.N. 596 the case arose between the parties and the offer was not revoked by the death of the promisor or otherwise. But when the offer is at an end, e.g. (1) by the death or insanity of the promisor [See Contract Act, Section 6(4)], or (2) by the destruction of the subject-matter of the offer [see Edwards v. West (1878) 7 Ch. D. 858 : 47 L.J. Ch. 463 : 38 L.T. 481 : 26 W.R. 507; Of. Section 56 of the Contract Act], or (S) by the promisor selling it to a third party, the sale being known to the promisee before acceptance as in Dickinson v. Dodds (1876) 2 Ch. D. 463 : 45 L.J. Ch. 777 : 34 L.T. 607 : 24 W.R. 594, there is nothing to accept. In the last case, if the undertaking not to withdraw the offer was not a mere nudum pactum but a binding undertaking, it may be that the promisee might maintain an action for damages against the promisor. But in this case the plaintiffs made no such, claim against the second defendant either in the Court below or in second appeal. So far as the first defendant is concerned, there is no agreement the specific performance of which can be claimed by the plaintiffs see Dickinson v. Dodds (1876) 2 Ch. D. 463 : 45 L.J. Ch. 777 : 34 L.T. 607 : 24 W.R. 594 and Second Appeal No. 2594 of 1914.]

4. The result is the second appeal fails and is dismissed with costs of the first defendant (first respondent).

In Second Appeal No. 315 oF 1920.

5. It is conceded that this second appeal follows the result of Second Appeal No. 314 of 1920 and is dismissed with costs of the plaintiff (first respondent).