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Shardaprasad v. Sikandar
Factual and Procedural Background
The plaintiffs contracted to purchase from the first defendant a 4-anna share in a village, the sale to include "sir" land and the cultivating (occupancy) rights appurtenant to that share, together with lambardari and dwelling-house rights, for Rs. 4,500. Under the contract the first defendant undertook to apply under Section 45 of the Central Provinces Tenancy Act for sanction to transfer the sir land without reservation of occupancy rights.
The first defendant did apply for sanction, but sanction was refused. Subsequently the first defendant sold the property (without the cultivating rights in sir) to the second and third defendants. The plaintiffs sued for specific performance and sought several alternative remedies:
- Primary relief: specific performance of the contract including sir land and cultivating rights.
- Alternative relief (translated): if sir land with cultivating rights could not be included in the sale-deed, the first defendant be directed to execute a sale-deed in favour of the plaintiffs for the 4-anna share with the reservation of cultivating rights in sir for registration and delivery of possession, with Rs.1,000 (the value of the cultivating rights) to be deducted from the agreed price of Rs.4,500 and the balance paid to the defendant.
At first instance the District Judge refused the primary relief (following the decision in Mansingh v. Rampiare) on the ground that sanction had been refused and the vendor could not be compelled to re-apply. The District Judge also held that Section 14 of the Specific Relief Act did not apply because the value of the cultivating rights did not bear only a small proportion to the whole property.
On appeal, the plaintiffs abandoned the claim for specific performance including cultivating rights and pursued, as their sole claim, specific performance under Section 15 of the Specific Relief Act: a decree for specific performance of the contract excluding cultivating rights in sir but for payment of the full agreed price of Rs.4,500. The respondents objected that this was a new relief not raised below.
Legal Issues Presented
- Whether specific performance of the contract can be decreed excluding the cultivating rights in sir (i.e., by compelling transfer of what the vendor can convey) under Section 15 of the Specific Relief Act after sanction under Section 45 of the Tenancy Act was refused.
- Whether Sections 14 or 15 of the Specific Relief Act are applicable where the contract was contingent on obtaining sanction and the contingency (refusal of sanction) was foreseen by the parties.
- Whether a relief not sought in the lower Court (a claim under Section 15 for specific performance excluding the cultivating rights but requiring payment of the full price) may be entertained on appeal.
Arguments of the Parties
Appellants' Arguments
- The plaintiffs-appellants abandoned the claim for specific performance including the cultivating rights and sought as their sole relief specific performance under Section 15 of the Specific Relief Act — i.e., that the vendor be compelled to execute a sale excluding cultivating rights in sir in return for the full price of Rs.4,500.
- The appellants' counsel cited two English authorities (Poole v. Middleton and Castle v. Wilkinson) in support of the appellants' position that a vendor should be compelled to convey whatever interest he has or can convey.
Respondents' Arguments
- The respondents contended that the Section 15 relief was a totally new claim not raised in the lower Court; in the trial court the plaintiffs had sought either (a) specific performance of the whole contract, or (b) specific performance of part on a reduced price under Section 14. Allowing a different relief for full price on appeal was inconsistent with the case put below.
- In the hearing before the Court below, counsel for the respondents supported the Court's contingent-contract view but did not cite any authorities to the appellate Court.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Mansingh v. Rampiare | Used to support the proposition that a seller cannot be compelled to re-apply for a sanction from a third party (revenue authority) once it has been refused. | The District Judge followed this authority to refuse the primary relief; the appellate Court accepted the view that the vendor could not be compelled to obtain a sanction which had already been refused. |
| Ramakrishnapuri v. Sitaram | Applied for the principle that a relief not sought in the lower courts cannot usually be claimed for the first time on appeal (Ismay, J.C.'s observation quoted). | The Court observed that the force of that observation applied in the present case: a Section 15 relief was not asked below and might have been objectionable on that ground if Sections 14/15 otherwise did apply. |
| Poole v. Middleton | At first sight supports compelling a vendor to transfer whatever interest he has even when third-party consent might be required; but its ratio depended on the limited powers of the consenting body. | The Court examined the case and found its ratio depended on the Board lacking arbitrary power; thus it did not contradict the Court's conclusion because the Revenue Authority under Section 45 had broader discretion to refuse sanction. |
| Castle v. Wilkinson | Where the purchaser knew of an impediment to getting the whole interest (e.g., wife's separate estate), he cannot compel the partial interest of another party and demand an abatement — the obstacle was known and contemplated by parties. | The Court relied on this authority to support the proposition that Sections 14 and 15 do not apply where the parties contemplated the possibility of non-performance (i.e., the contingency was foreseen and not provided for), and thus the contract could not be specifically enforced. |
Court's Reasoning and Analysis
The Court analysed the contract and concluded it was a contingent contract within the meaning of Section 32 of the Contract Act. The material clauses (translated in the judgment) showed two distinct undertakings by the vendor:
- To apply for sanction under Section 45 of the Central Provinces Tenancy Act for sale of the sir land without reservation of occupancy rights — this application was made, and thus this undertaking was performed.
- To sell, if sanction were granted, the share together with cultivating rights in sir — this undertaking was expressly conditional on obtaining the sanction.
The contract contained no provision for the contingency of refusal of sanction. The Court reasoned that because the parties contemplated the possibility that sanction might be refused, the inability to perform in that event was not an unforeseen contingency. Sections 14 and 15 of the Specific Relief Act, the Court held, apply to cases where the inability to perform the whole contract was not contemplated by the parties — in other words, to unforeseen contingencies where the court may order a vendor to convey whatever he can and allow an abatement in price. Those sections do not apply where the contingency causing non-performance was foreseen and the parties failed to provide for it in the contract.
The Court further considered analogous authorities. Poole v. Middleton was examined and distinguished on the basis that the third party (a Board) in that case did not possess an arbitrary power to prevent the sale; the Revenue Authority under Section 45 of the Tenancy Act did possess such discretion. The Court also relied on the principle (expressed in Fry and invoked by Mansingh v. Rampiare) that where performance depends on the will of a third person, and that consent cannot be procured, a court will not decree the defendant to procure that consent and thus perform an impossibility.
Castle v. Wilkinson was treated as strong support for the position that when parties know of a probable impediment to full performance and make no contractual provision for that event, courts should not apply Sections 14 or 15 to force a partial enforcement with an abatement. The Court concluded that because sanction was refused and the contract was contingent on obtaining sanction, the contract could not be specifically enforced in any form now sought by the appellants.
The Court also considered the procedural objection that the Section 15 relief was not pleaded in the lower Court. It acknowledged Ramakrishnapuri v. Sitaram (Ismay, J.C.'s observation) and noted the force of that objection; but the Court's principal ground for dismissal was the substantive conclusion that Sections 14 and 15 did not apply to a foreseen contingency.
Holding and Implications
Both the appeal and the cross-objection are dismissed.
Direct consequences for the parties:
- The plaintiffs' claim for specific performance — whether seeking the cultivating rights in sir or a partial conveyance excluding those rights with the full price payable — is refused. The contract, being contingent on obtaining sanction which was refused and containing no provision for that event, cannot be specifically enforced.
- The cross-appeal by the respondents that they should have been awarded full instead of half costs in respect of the pleader's fee is dismissed; the District Judge's apportionment (half costs) was upheld as the defence was common to both defendants and the applicable rule (R.10) was correctly applied.
The opinion does not announce any broader novel precedent; it applies established principles regarding contingent contracts, third-party consent, and the limited applicability of Sections 14 and 15 of the Specific Relief Act where the contingency was foreseen by the parties and not provided for in the contract.
1. This appeal arises out of a suit to enforce specific performance of a contract to sell to the plaintiffs a 4 anna share in a village together with cultivating rights in sir. By the terms of the contract the first defendant undertook to apply under Section 45 of the Central Provinces Tenancy Act for sanction to transfer his sir land without reservation of the right of occupancy; the contract provided for various reliefs for the benefit of the proposed vendees in case after obtaining sanction the proposed vendor refused to sell the property as agreed. The first defendant did apply for sanction; sanction was refused, and thereupon he sold the property, without cultivating rights in sir, to the 2nd and 3rd defendants. The plaintiffs asked for several reliefs in the alternative. The first was that the 1st defendant should be made to execute a sale-deed for the property, including cultivating rights in sir. The terms of the prayer as regards the next alternative relief may be translated as follows;—
“If the Court holds that sir land with cultivating rights cannot be included in the sale-deed, the 1st defendant may be directed to execute in favour of the plaintiffs a sale-deed in respect of the 4 anna share with the reservation of cultivating rights in sir to get it registered and to deliver possession over the 4 anna share. In these circumstances Rs. 1,000, the value of the cultivating rights in sir, may be deducted from the agreed price of Rs. 4,500, and the balance paid to defendant.”
2. With the other alternative prayers we are not now concerned.
3. The learned District Judge, following Mansingh v. Rampiare(1), held that the first relief asked for could not be granted, because sanction for the transfer of cultivating rights in sir had been refused and the 1st defendant could not be compelled again to apply for sanction. The second alternative prayer, set out above, was taken to be made with reference to the provisions of Section 14 of the Specific Relief Act. S. 14 was held not to apply, as it was found that the value of the cultivating rights in sir did not bear only a small proportion to the value of the whole property, within the meaning of the section.
4. In appeal the claim for specific performance including cultivating rights in sir is given up by the plaintiffs-appellants, whose learned Counsel also accepts the finding that the cultivating rights in sir do not bear a small proportion to the whole property in value. The sole claim in appeal is one made under Section 15 of the Specific Relief Act, for specific performance of the contract excluding cultivating rights in sir on payment of the whole price of Rs. 4,500. For the respondents it is objected that this is a totally new claim, not raised in the lower Court, where the plaintiffs asked for a relief inconsistent with a relief under Section 15 of the Specific Relief Act; the plaintiffs asked for either the specific performance of the whole contract, or specific performance of part on a reduced price under S. 14. If Ss. 14 and 15 applied to the case, I would have no hesitation in holding this objection to be well founded. In the words of Ismay, J.C, in an exactly similar case in Ramakrishnapuri v. Sitaram(2).
“No such relief was asked for in the Courts below. On the contrary the appellant distinctly repudiated his liability to pay the full amount of the purchase-money if rights of occupancy were reserved, and I am unable to see upon what grounds the appellant is entitled in second appeal to ask for a relief which was never refused him at any stage of the litigation.”
5. The force of these remarks does not appear to be lessened in this case of a first appeal.
6. But I am of opinion that neither Section 14 nor Section 15 of the Specific Relief Act have any application to the facts of this case. As I read the contract for sale it is a contingent contract within the meaning of Section 32 of the Contract Act. The following is a translation of the material clauses, of the contract:—
“I have made a final settlement with the said mahajans intending to sell them for Rs. 4,500 a 4-anna share out of my 5-anna 4 pie share of Mauza Amethi, Tahsil and District Raipur, together with the sir land and cultivating rights appertaining to the 4 anna share, with lambardari rights, and the dwelling houses together with then boundaries. But as, at present, sanction for the sale of the sir land has not been obtained, I am unable to execute the sale-deed. Therefore this day I make an agreement, and lay down, that the price of the 4-anna share of the property together with sir land, cultivating, rights and lambardari rights appertaining to the said 4-anna share of Mauza Amethi, Tahsil and District Raipur, has been finally settled at Rs. 4,500, four thousand five hundred. I will, therefore, make a petition and without delay obtain sanction for the sale of the sir land and after obtaining the sanction, I will execute a sale-deed for the above-mentioned amount of Rs. 4,500, and get the same registered, and deliver possession of the property sold, viz., the 4-anna share together with sir land and cultivating rights appertaining thereto and the khudkhast land with cultivating rights, lambardari rights appertaining to that share. * * * * * * If I refuse to sell the property after receipt of the sanction, or obtain the sanction in the name of some other person, I shall be liable to the said purchasers to pay Rs. 1,000 on account of damages. Or, if the said purchasers refuse to buy the said property, or to obtain the sale deed after receipt of the sanction for sale of the sir land, they also shall be liable to pay me Rs. 1,000 on account of damages.”
7. The 1st defendant made two undertakings. The first was to apply for sanction for the sale to the plaintiffs of sir land without reservation of occupancy rights. This part of his contract he duly performed. The second undertaking was that, if sanction were granted, he would sell his share with cultivating rights in sir. No provision was made for the event of sanction being applied for and refused. This part of the contract was purely a contingent contract, and if the future event provided for became impossible the contract fell through. Sections 14 and 15 of the Specific Relief Act appear to me to refer to cases where the inability to perform the whole contract was not contemplated by the contracting parties. Where, as here, the contracting parties knew of and contemplated the possibility of the whole contract being incapable of performance, for reasons beyond the control of either of the parties, the sections have no application. They apply to unforeseen contingencies, not to foreseen contingencies. The parties should have provided in the contract for such an eventuality, but failed to do so.
8. As this aspect of the case had not presented itself to the learned Counsel on either side, I provided them with an opportunity of further argument and of searching for authorities.
9. The learned Advocate for the respondents supported the view put forward by the Court, but did not cite any cases. The learned Counsel for the appellants referred to two English cases; Poole v. Middleton(3) and Castle v. Wilkinson(4). Both these cases are cited in Collett's Specific Relief Act and in Fry on the Specific Performance of Contracts. In the former case the seller of shares, which could not be transferred without the consent of a Board, was compelled to transfer such interest as he had, though it was left doubtful whether the buyer would thereby become a share-holder. This case at first sight seems to militate against my view since the parties must have known of the possible objection of the Board to the transfer, but an examination of the case shows that the ratio decidendi was that the Board had not an arbitrary power to prevent the sale of shares. The Board's powers were, therefore, very different from the full powers of refusing sanction possessed by the Revenue Authorities under Section 45 of the Tenancy Act. Where the possibility of completing a contract is dependent on the will of a third person, the principle enunciated in Mansingh v. Rampiare is well expressed in Fry, op. cit., 5th edition, paragraph 999:
“As the consent of a third party is, or may be, a thing impossible to procure, a defendant who has entered into a contract to the performance of which such consent is necessary, will not, in case such consent cannot be procurred, be decreed to obtain it, and thus perform an impossibility.”
10. The case of Castle v. Wilkinson affords strong support to the view that the principles embodied in Sections 14 and 15 of the Specific Relief Act have no application where the obstacle to the full performance of the contract is known by the parties and no provision is made to meet the eventuality. A husband and wife agreed to sell the wife's estate in fee simple, the purchaser being aware that the estate belonged to the wife, and the wife afterwards refused to convey; it was held that the purchaser could not compel the husband to convey his interest and accept an abated price. The view taken was that while if a man professes to be owner of a fee simple, and under-takes to sell it, and it turns out that he had not power to do so, the purchaser not being at the time aware of the difficulty, the vendor must convey as much as he can, and submit to an abatement, yet the case is wholly different when there is no such profession. Here the buyer knew that he could only get what the wife was willing to convey, and failing that, he could not insist on the partial interest of the husband being conveyed, the agreement being by both to convey the whole. The ratio decidendi was that the vendor was aware of the probable impediment to the fulfilment of the contract. I am, therefore, confirmed in my view that as the contract in this case for the sale was contingent on the grant of sanction, the contract cannot be specifically enforced at all since the sanction was refused, and there was no alternative contract to meet the event of it being refused. In any case the relief now asked for cannot be granted. The appeal is dismissed with costs.
11. There is a cross appeal by the respondents to the effect that they should have been awarded full instead of half costs as regards the item of Pleader's fee. There is no force in this contention, since the defence was common to both sets of defendants, and the District Judge correctly applied R. 10 of the rules regulating Legal Practitioners' fees. The cross-objection is dismissed with costs.
P.N/R.K
12. Both appeal and cross-objection dismissed.
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