Punjab-Haryana High Court
Kulwant Singh vs Makhan Singh on 27 November, 2002
Equivalent citations: (2003)133PLR647
Author: Satish Kumar Mittal
Bench: Satish Kumar Mittal
JUDGMENT Satish Kumar Mittal, J.
1. Kulwant Singh, the unsuccessful plaintiff, has1' filed the present Regular Second Appeal against the judgment and decree, passed by both the Courts below, vide which his suit for specific performance to two agreements has been dismissed on the ground that the agreements in question are not enforceable. However, the plaintiff was held to be entitled to get the refund of his earnest money.
2. The brief facts of this case are that the plaintiff and defendant Makhan Singh (now deceased through his LRs), respondent herein, were the real brothers. They were four brothers. Each brother was having 1/4 share in the land measuring 40.2/3 marlas and building of ice factory situated at Rayya and 1/8 share in the machinery installed in the ice factory. On 3.5.1982 defendant entered into two agreements with the plaintiff, one regarding the sale of his 1/4 share in the land and building for a valuable consideration of Rs. 10,000/- out of which Rs. 5,000/- was as earnest money and the second regarding the sale of his 1/8 share in the machinery installed in the ice factory for a consideration of Rs. 16,000/- out of which Rs. 5,000/- was paid as earnest money. Both these agreements are Ex.P1 and Ex.P2 on the record. As per the terms of the agreements, the sale deeds in both the agreements were to be executed on or before 10.8.1982. When the defendant did not execute the sale deeds in both the agreements on 10.8.1982, the plaintiff served a notice upon him on 19.12.1983 and when the defendant did not honour the aforesaid two agreements, the present suit for specific performance was filed by the plaintiff on 17.1.1984.
3. The defendant contested the aforesaid suit on various grounds. He denied the execution of the agreements as well as the receipt of earnest money. He pleaded that the land in question, building raised thereon and the ice factory were Joint Hindu Family property and the same being a coparcenary property, no coparcenery was competent to sell his share, therefore, the agreements in question are riot enforceable. He also averred that no decree for specific performance of the agreement of sale in respect of the machinery can be passed because damages for compensation in that regard can be claimed by the plaintiff. He also averred that no partner is competent to agree to sell the property of the partnership firm, therefore, both the agreements are void and not enforceable.
4. On the pleadings of the parties, the following issues were framed in that suit:
"1. Whether the defendant executed agreements to sell building and machinery as referred in para Nos. 1 and 2 of the plaint? OPD
2. Whether the plaintiff has been and continues to be ready and willing to perform his part of the agreement? OPP
3. Whether the defendant has committed breach of agreement of sale? OP
4. Whether agreement regarding sale of building is not specifically enforceable? OPP 4A. Whether the suit property is ancestral and/or Joint Hindu Family property? If so, to what effect? OPD 4B. Whether the agreement to sell is void or unenforceable for the reasons given in para Nos. 3 and 4 of additional plea raised in the amendment written statement? OPD 4C. Whether the suit for specific performance is not competent so far as it relates to agreement for sale machinery? OPD
5. Whether the suit property has been properly described? OPP Both the Courts below have held that the execution of agreements Ex.P1 and Ex.P2 as well as the payment of earnest money have been duly proved from the statements of PW.1 Prem Nath, PW.3 Jaswant Singh and PW.4 Sohan Singh, the scribe and the attesting witnesses of the agreements. Though in the written statement, execution of the agreements and receipt of the earnest money were denied by the defendant, but while leading his evidence, he took the stand that he was ready to perform his part of the agreement as he went to the office of the Registrar on 10.8.1982 to execute the sale deeds. This stand of the defendant was not believed and it was held that he was not ready and willing to perform his part of the agreements and committed breach of the agreements. On the other hand, it was held that the plaintiff was always ready and willing to perform his part of the agreements. Thus, the findings on issues No. 1, 2 and 3 have been recorded in favour of the plaintiffby both the Courts below.
5. Even after recording the aforesaid findings on material issues No. 1 to 3 in favour of the plaintiff, his suit for specific performance of both the agreements was dismissed by both the Courts below. Regarding the agreement of sale pertaining to 1/8 share in the machinery of the ice factory, it was held that this agreement is not specifically enforceable in law as the remedy available to the plaintiff was to claim the refund of the earnest money with damages, if any. It was held that the share in the machinery in the ice factory is not the immovable property and in view of Section 14(1)(a) of the Specific Relief Act 1963 (hereinafter referred to as 'the Act'), the agreement regarding such property cannot be enforced because non-performance of such contract can be adequately redressed by compensation in terms of money. Regarding the second agreement pertaining to the sale of 1/4 share in the land and building, it has been held that out of the total land measuring 40.2/3 marlas, 11 marlas of land was purchased by father of the plaintiff and the defendant and the remaining land measuring 29.2/3 marlas was purchased in the name of four brothers in equal shares vide four different sale deeds from the income of the property of the father. Therefore, the entire property was held to be the Joint Hindu Family property. It was further held that since the land and the building in question were coparcenary property in the hands of all the four brothers, therefore, the defendant being a coparcener could not have entered into an agreement to sell his share in the said property. As such, the agreement to sell 1/4 share in the land and building has been held to be not enforceable. It has also been held that the defendant being one of the partners of the firm could not agree to sell his share in the machinery as well as in the land without getting the firm dissolved.
6. Sh. Sukhbir Singh, learned counsel for the appellant, submitted that both the Courts below have committed grave illegality while declining the relief of specific per formance of both the agreements to the plaintiff, particularly when the stand taken by the defendant regarding the execution of the agreements and receipt of the earnest money was found to be false and it was held that the agreements were duly executed and the plaintiff was ready and willing to perform his part of agreements; and specifi cally when it was found by both the Courts below that it was the defendant who com mitted breach of the agreement and not the plaintiff.
7. Learned counsel for the appellants argued that both the Courts below have drawn a wrong legal inference from the evidence available on the records to the effect from the evidence available on the records to the effect that the land and the machinery in question was the Joint Hindu Family property. Regarding the agreement Ex.P1, pertaining to the 1/4th share of the land measuring 40.2/3 marlas and the building constructed thereon, learned counsel submitted that both the Courts below have wrongly held that the said property is Joint Hindu Family property, in which all the four brothers were coparceners and one coparcener was not competent to alienate his share in the said property. He argued that the aforesaid finding recorded by the Courts below is totally perverse and against the evidence on the record and the same is based on the erroneous conclusion of law drawn by the Courts below from the admitted facts of the case. While relying upon the decision of the Hon'ble Supreme Court in Kulwant Kaur and Ors. v. Gurdial Singh Mann and Ors., (2001-2) 128 P.L.R. 492 (S.C.), learned counsel for the appellant submitted that though under Section 100 of the Code of Civil Procedure, a restriction has been imposed on the exercise of jurisdiction in second appeal by the High Court, but where it is found that the findings recorded by the Courts below stand vitiated on wrong test and on the basis of the assumptions and conjectures and resultantly, there is an element of perversity involved therein, the High Court will be within its jurisdiction to deal with the issue. In this regard, he submitted that vide sale deed Ex.P3 only 11 marlas of land was purchased by the father of the parties to the suit in the year 1954, but the remaining land i.e. 29.2/3 marlas was purchased by the four brothers, including the parties to the suit, in their name vide sale deeds Ex.P4 to Ex.P8 from their income, as all of them were doing the business of ice factory. The observations, made by the Courts below, that the aforesaid land was purchased in the name of he four brothers by their father, from his income is wholly baseless and there is no evidence to this effect that this land was purchased by their father in their name of this land was purchased by them from the income of the Joint Hindu Family property. Learned counsel for the appellant has submitted that father of the parties to the suit was serving in the Railways and he retired in the year 1962-63 and subsequently, he expired in the year 1966. The business of the ice factory was being carried by the four brothers in partnership with one outsider, namely Gurdit Singh, who was having half share and the remaining half share was of the four brothers. Therefore, from the income of the partnership business, all the four brothers purchased the aforesaid land in their names. The observations of the Courts below to the effect that the aforesaid land was purchased by them with the funds provided by their father and out of the income of the coparcenary property is based on no evidence. At the most, the land measuring 11 marlas, which was purchased by their father, and the building constructed thereon, can be said to be the individual property of their father, which they had inherited after his death in equal shares. But even the said property cannot be said to be coparcenary property between the brothers, as there was no coparcenary between them. All the brothers were residing separately and if they have inherited any property from their father, that can be said to be the coparcenary property with them, but there cannot be a coparcenary between the brothers. He further argued that as far as the suit for specific performance of 1/4 share of the land measuring 29.2/3 marlas is concerned, that can be decreed even if the remaining 11 marlas or and the building is held to be the coparcenary property of defendant to the extent of 1/4 share. Leaned counsel for the appellant contended from the aforesaid submissions, made by him, the following substantial questions of law arise in the present appeal.
i) Whether the findings, recorded by the Courts below, regarding 29.3/3 marlas of land being Joint Hindu Family property, is perverse and without any evidence on the record and is based on the wrong inference drawn by the Courts below from the facts of the case?
ii) Whether part of the agreement Ex.P1 can be specifically enforced when the said part is definite and ascertainable in view of Section 12 of the Act?
8. I have heard learned counsel for the parties on the aforesaid substantial questions of law involved in the present appeal and have perused the records of the case, including statements of the witnesses and other documentary evidence, in detail.
9. The execution of both the agreements Ex.P1 and Ex.P2 and the receipt of payment of earnest money by the defendant have been held to be proved by both the Courts below. It has also been held that the plaintiff was always ready and willing to perform his part of the agreements and that the defendant has committed breach of the agreements, These findings recorded by both the Courts below have not been assailed before me by learned counsel for the defendant. The conduct of the defendant in the present case, particularly when on the other hand, he denied the execution of the agreements and receipt of the earnest money and on the other hand asserted that he was present on 10.8.1982 in the office of Registrar for execution of the sale deeds in view of the aforesaid agreements, is not appreciable. It is established on record that vide sale deed Ex.P3, 11 marlas of land was purchased by father of the parties to the suit in the year 1954 and building was also constructed by him thereon. It is also not disputed that father of the parties to the suit, namely Dula Singh, who was in service of Railways, retired in the year 1962-63 and died in the year 1966. It has been established on record that 29.2/3 marlas of land was purchased by four brothers in their name vide sale deeds Ex.P4 to Ex.P8. It has also been established on record that the four brothers constituted a partnership firm with one outsider, namely Gurdit Singh, and were doing the ice business. In the said partnership firm, half share was owned by said Gurdit Singh and the remaining half share was owned by the four brothers. It has also come on record that father of the parties to the suit was not the partner in the said partnership business as he was doing service. It has further come on record that all the machinery of the ice factory was installed by the firm. After the death of their father in the year 1966, all the four brothers inherited 11 marlas of land and the building constructed thereon in equal shares.
10. Now the question, which arises for determination, are whether the aforesaid ice factory was established by four brothers in partnership with Gurdit Singh with the rands of Joint Hindu Family property; and whether the land measuring 29.2/3 marlas was purchased by the four brothers in equal shares vide sale deeds Ex.P4 to Ex.P8 from the income of the Joint Hindu Family or from their own income from the aforesaid business?
11. The assertion of the plaintiff is that the suit property was the individual property of all the four brothers, whereas case of the defendants is that the above said property was the Joint Hindu Family property of the parties as the ice factory was installed and the property was purchased by them from the income of the Joint Hindu Family. The burden to prove that the aforesaid property was Joint Hindu Family property lies upon the defendant. There is presumption that every such family which is joint in food, worship and residence is the Joint Hindu Family, but there is no presumption that the properties owned by members of such Joint Hindu Family are the Joint Hindu Family property or that the family possesses joint property. To prove that a property which is in the name of an individual member of Joint Hindu Family is the Joint Hindu Family property, two things have to be established i.e. that there is a nucleus of a Joint Hindu Family property and the said property was purchased by the said individual in his name from the said nuccleus of the Joint Hindu Family property. The burden to prove that the property owned by a member is Joint Hindu Family rests upon the party, who so asserts. In the present case, the defendant has not "discharged his burden to prove that the ice factory in question and the land purchased by the four brothers in their names was established and purchased from the income of the Joint Hindu Family. The Courts below have proceeded on a wrong inference that 11 marlas of land was purchased by the father and a building was also constructed thereon, therefore, whatsoever has been established and purchased subsequently in the shape of the ice factory and the land measuring 29.2/3 marlas by the four brothers in the individual names was done from the income of the 11 marlas of land and building constructed thereon. There is no evidence on the record led by the defendant that 11 marlas of land and the building was having some income. Merely because four brothers were in possession of this 11 marlas of land and the building on which they have installed an ice factory with the financial assistance of an outsider Gurdit Singh, it cannot be deemed in law as well as facts that factory was installed on the land measuring 29.2/3 marlas was purchased from the income of the said joint property, because there is no evidence that the said property was yielding some income. On the other hand, the four brothers installed the ice factory and were running the same in partnership with Gurdit Singh. They were having income from the business, which was the foundation of the purchase of land by them subsequently. There is no such proposition of law that merely because the purchase of 11 marlas of land and the construction of building thereon has been proved, the onus will shift upon the members to prove that the property acquired by them subsequently was their self acquired property. The Courts below have proceeded on his presumption, which is totally erroneous.
12. I have gone through the statement of defendant Makhan Singh (D.W.3). He only stated that the land in their name as Benami, but no evidence was led to prove this assertion. He further stated that Dula Singh, their father, had set up the ice factory and got the machinery, of ice factory installed at the site but he did not possess any record worth the name about the installation of ice factory by Dula Singh. He also admitted that the ice factory was being run in partnership with one Gurdit Singh, who was having half share in the factory. Except this statement, there is no other evidence available on he record to support his assertion. On the basis of such oral statement, which is vague in nature, the defendant cannot be said to have discharged his burden to prove the property in question as the Joint Hindu Family property. Thus, I am not agreeing with the findings recorded by the Courts below that the ice factory installed on 11 marlas of land purchased by Dula Singh and 29.2/3 marlas of land purchased by his four sons in their names are the Joint Hindu Family properties of the parties. At the most, 11 marlas of land which was purchased by the father of the parties to the suit and the building constructed thereon which was inherited by the four brothers after his death can be said to be the Joint Hindu Family property in the hands of four brothers in equal shares qua there sons,if they are alive. Thus, the findings, recorded by the Courts below on this aspect of the matter, are reversed to the aforesaid extent.
13. Now, the question arises as to whether the agreements Ex.P1 and Ex.P2 can be specifically enforced or not. First, I will deal with the agreement, Ex.P1, which pertains to the sale of 1/4 share of the defendant in the land measuring 40.2/3 marlas and the building constructed on 11 marlas of land. It has been found that out of the aforesaid property 11 marlas of land, purchased by the father and the building constructed thereon, was the Joint Hindu Family property and the remaining 29.3/3 marlas of land was the self acquired property of the four brothers. Learned counsel for the defendant submitted that even if this 29.2/3 marlas of land is held to be the self acquired property of the four brothers, in which the defendant was having 1/4 share, even then the suit for specific performance qua this land cannot be decreed in view of the provisions contained in Section 12 of the Act, because no specific performance of part of a contract can be directed by the Court. He further contended that the contention of plaintiff regarding part performance of the contract in view of Sub-section (2) of Section 12 of the Act cannot be accepted, as part for which the contract cannot be enforced i.e. 11 marlas of land and the building constructed thereon, is not the small part of the contract, rather it is substantial part of the contract.
14. I have considered the submissions raised by learned counsel for the defendant and an unable to accept the same. In my view, the part of the contact regarding 29.2/3 marlas of land can be specifically enforced as the same is the major part of the agreement, which pertains to 40.2/3 marlas of land and the building. The part of the agreement pertaining to 11 marlas of land can be easily separated from the remaining part of the land, because the sale deeds of all the parts are different and the land comprises of different khasra Numbers. 11 marlas portion of the total land is the small portion, for which the specific performance of the entire agreement cannot be denied as the same will be unreasonable. Before the learned trial Court, counsel for the plaintiff made a statement that his client is ready to make payment of the whole consideration by relinquishing his claim to the part of the contract, which cannot be enforced. The said contention was wrongly, rejected by the learned lower court by observing that the 11 marlas portion of the land and the building is the major part of the agreement and since the same cannot be enforced, therefore, contention of the plaintiff cannot be accepted. In my view, this approach of the learned trial court is wholly erroneous. In view of Sub-section (3)(b)(ii) of Section 12 of the Act, the Court is empowered to decree the suit for specific performance for part of the agreement, if the plaintiff relinquishes his claim to the performance of the remaining part of the contract and all his rights to have compensation either for deficiency or for the loss of damage sustained by him because of the default of the defendant. Therefore, I hold that the plaintiff is entitled for the part performance of the agreement Ex.P1 to the extent of the land measuring 29.2/3 marlas of land.
15. Regarding agreement Ex.P2, learned counsel for the appellant submitted that the agreement of sale of 1/8 share of the machinery in the ice factory cannot be deemed to be the sale of movable property as the machinery was attached with the land and the same falls under the definition of 'immovable property'. He submitted that even in some cases the agreements to sell movable property can be specifically enforced where the property is not an ordinary article of commerce or is of special value or interest to the plaintiff as contemplated in execution clause of Section 10 of the Act. He submitted that the following pure question of law has arisen in the present appeal, on which the Court below have taken an erroneous view:
"Whether 1/8 share of the machinery installed in the ice factory is considered to be the movable property, if so whether the agreement to sell such property cannot be specifically enforced in view of Section 14 of the Act?"
In my opinion, there is force in the submission made by learned counsel for the appellant. The learned trial court has wrongly decided this aspect of the matter on the assumption that the machinery installed in the ice factory is not immovable property. Section 2(6) of the Registration Act, 1908 defines the 'immovable property' as under:
"Immovable property includes land, buildings, here ditary allowances, rights to ways, lights ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to anything which is attached to the earth, but not standing timber, growing crops nor grass."
From the aforesaid definition, it is clear that the machinery of the ice factory, which is attached to the earth or permanently fastened to anything which is attached to he earth amounts to immovable property. But the Courts below have wrongly held the machinery, which is attached to the earth, as movable property by misreading the statement of the defendant and the other witnesses. Defendant Makhan Singh, while appearing as DW3, has clearly stated that the machinery for manufacturing the ice was installed on the suit land. This clearly indicates that the said machinery for manufacturing the ice was installed on the sui| land. This clearly indicates that the said machinery was attached to the land. Merely because the defendant stated that the said machinery installed on the land consists of two electric motors, two compressors etc. does not mean that it is the movable property. The Courts below have drawn a wrong inference from the statement of the defendant and other witnesses. It is a matter of common knowledge that the machinery in the ice factory is always attached to the earth. Once the defendant has stated that the machinery was installed on the land, it amounts that it was permanently appended to the earth. In view of this, I reverse the findings of the Court below to the effect that the machinery installed in the ice factory was not the immovable property. The conclusion drawn by the Courts below that the contract regarding sale of 1/8 share of the machinery installed in the ice factory cannot be specifically enforced in view of Section 14(1)(a) of the Act is not sustainable. Section 14(1)(a) of the Act provides that a contract for the non-performance of which compensation in money is an adequate relief cannot be specifically enforced. The Courts below have held that since the machinery installed in the ice factory was movable property, therefore, the non-performance of such a contract can be compensated adequately by money. Section 10 of the Act provides as under:-
"Cases in which the specific performance of contract enforceable" : - Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced
(a) when there exists no standard for ascertaining the actual damage caused by the non-performance of the act to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation.- Unless and until the contrary is proved, the court shall presume-
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases-
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff.
16. The Courts below have not properly considered the effect of this Section. Even if for the arguments sake, the machinery of the ice factory is said to be the movable property, even then the article of machinery cannot be said to be an ordinary article of commerce. The Court below have wrongly held that he article of machinery installed in the ice factory cannot be considered to be a special value of the plaintiff. Thus, the Courts below have committed error of law as well as the facts while holding that the agreement of sale Ex.P2 regarding sale of 1/8 share of the machinery by the defendant cannot be ordered to be specifically enforced.
17. Learned counsel for the appellant also argued that the findings recorded by the Courts below on issue No. 4B to the effect that a partner of a partnership firm can not sell his share in the property of such firm to another partner and any such agreement is void-ab-initio, is wholly illegal. The plaintiff has stated that the defendant, who was the partner, retired from the partnership business and agreed to transfer his entire share in the machinery of the ice factory, which was being run by the partnership firm, in favour of to plaintiff vide agreement Ex.P2. Once he retired from the partnership business, he can definitely sell his share to any partner of the firm. The Courts below have wrongly relied upon the decision of the Hon'ble Supreme Court in Addanki Narayanappa and Anr. v. Bhaskara Krishnappa and Ors., A.I.R. 1966 S.C. 1300, while holding that a partner of the partnership firm is not competent to transfer his share in the partnership firm. Actually, the said case pertains to the registration of the partnership firm, wherein it was held by the Hon'ble Supreme Court that a firm has no legal existence and the property whether movable or immovable originally brought in by the partners vests in all of them and during the subsistence of the partnership, no partner can deal with any portion of the property. So, long the partnership subsists and it has not been dissolved, no partner is competent to sell his share in the partnership property. In the present case, as per the statement of the plaintiff, the defendant retired from the partnership firm and thereafter, he agreed to sell his share to the plaintiff. The aforesaid decision of the Hon'ble Supreme Court is not applicable to the facts and circumstances of the present case and the Courts below have taken a wrong view in the matter while holding that the defendant was not competent to enter into an agreement to sell in respect ef his share in the machinery installed in the ice factory.
18. In view of the aforesaid discussion, the present appeal filed by the plaintiff, is partly allowed, the suit for specific performance of the agreement Ex.P1 regarding 1/4 share of the land measuring 29A2/3 marlas is hereby decreed on payment of the entire remaining sale consideration i.e. Rs. 5,000/- by the plaintiff. However, suit of the plaintiff regarding sale of 1/4 share by the defendant in the land measuring 11 marlas and the building constructed thereon, while is Joint Hindu Family property, is dismissed. The suit regarding specific performance of agreement Ex.P2 pertainingto the sale of 1/8 share in the machinery installed in the ice factory is also decreed on payment of the remailing sale consideration of Rs. 11,000/- by the plaintiff. The plaintiff-appellant is di rected to deposit the remaining sale consideration of both the agreements, as afore-
stated with the Executing Court within a period of three months from today, whereupon the legal representatives of the defendant-respondent will execute the sale deeds regard ing the aforesaid properties in favour of the plaintiff, failing which the plaintiff-appellant will be at liberty to execute the decree by the process of the Court.