Allahabad High Court
Babu Lal & Others vs Nathi Lal on 12 March, 2013
Author: Sudhir Agarwal
Bench: Sudhir Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court No. - 34 Case :- SECOND APPEAL No. - 532 of 1991 Appellants :- Babu Lal & Others Respondent :- Nathi Lal (since deceased and substituted by legal heirs) Appellants Counsel :- Ramendra Asthana, Anupam Kulshrestha, Atul Kumar Pandey, B.D. Mandhyan, K.S. Chaudhary, S.C. Mandhyan Respondent Counsel :- Prakash Gupta,Ashish Gupta,Prakash Chandra Hon'ble Sudhir Agarwal,J.
1. Heard Sri Anupam Kulshrestha, Advocate, for appellants and Sri Ashish Gupta, Advocate, for the respondent.
2. This is defendant's second appeal. The following substantial questions of law were formulated at the time of hearing this appeal under Order 41 Rule 11 C.P.C.:
(i) Whether in the facts and circumstances of the case, the suit was not barred by Section 8 of the Hindu Minority and Guardianship Act?
(ii) Whether Lower Appellate Court has erred in exercising discretion under Section 20 of the Specific Relief Act?
(iii) Whether in the facts and circumstances of the case the suit was not barred by Section 168-A of the U.P. Zamindari Abolition and Land Reforms Act?
3. Before considering the aforesaid issues in the light of rival submissions, brief facts, necessary for adjudication of above questions may be stated as under.
4. Plaintiff-respondent, Sri Nathi Lal, instituted Original Suit No. 395 of 1981 in the Court of Civil Judge, Agra for a decree of specific performance to enforce the agreement for sale dated 10.12.1977 for executing registered sale-deed after obtaining permission from competent authority, Agra and to put the plaintiff in possession over the land in dispute. The plaint case is that defendants own a land measuring about 400 sq. yard, part of plot No. 16/2-Ka, situate at Naripura, Arga. The boundaries are given at the bottom of plaint. Defendants entered into an agreement for sale on 10.12.1977 with plaintiff for a consideration of Rs. 12,000/- whereagainst Rs. 2,000/- was received by defendants at the time of execution of agreement and Rs. 9,000/- was received by them on 23.5.1978. The sale-deed was to be executed within one month of the written notice, tendered to defendants, by the plaintiff, after obtaining permission for sale from competent authority, Agra. The possession was to be delivered at the time of execution of sale deed. The plaintiff has been and still ready and willing to perform his part of agreement, but defendants are evading execution of sale deed. Plaintiff sent a telegram dated 21.9.1981 asking defendants to appear before Sub-Registrar, Agra on 1.10.1981 for execution of sale-deed. The plaintiff remained present on the said date in the office of Sub-Registrar, ready with money, but defendants failed to attend the said Office.
5. The suit was contested by defendant-appellants. A written statement was filed by defendants no. 1 and 2 stating that agreement was entered for sale of their share. Defendant no. 4 had no right, title or interest in the land in suit. Land belong only to defendants no. 1, 2 , 3 and 5. Receipt of Rs. 2,000/- was admitted but that of Rs. 9,000/- was denied. Permission of transfer was obtained jointly in the name of plaintiff through a common Advocate Sri Hari Shankar Lavaniya. The defendants were ready to deliver possession of their share to plaintiff at the time of registration, but plaintiff was not agreeable thereto. Plaintiff never asked defendants to get the sale-deed executed and plaint case is founded on incorrect facts.
6. Defendants no. 5, being a minor, contested through his next friend/guardian ad litem and filed a separate written statement. He claimed to have no knowledge about agreement for sale dated 10.12.1977. The other defendants have no right to execute any agreement on behalf of respondent no. 5 and no consideration has been received by him. The averments in general made in plaint were denied and in additional pleas, it was pleaded that defendant no. 4 had no right to enter into agreement for sale on behalf of defendant no. 5 since he being minor at that time, the suit is barred by Section 8 of Hindu Minority and Guardianship Act, 1956 (hereinafter referred to as "HMG Act") as well as Section 168-A of U.P. Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act, No. 1 of 1951) (hereinafter referred to as "Act, 1950"). In any case, no discretionary relief of specific performance under Section 20 of Specific Relief Act, 1963 (hereinafter referred to as "Act, 1963") is justified to be granted in favour of plaintiff.
7. Third written statement was filed by defendant no. 3. He stated that half of the share in land is owned by defendants no. 3 and 5. They never entered into any agreement for sale of their share in land in dispute to the plaintiff. Defendants no. 4 has no right, title or possession in the land in question. Suit is barred by Section 12 of Act, 1963, Section 8 of HMG Act, Section 168 of Act, 1950. In any case, it is a fit case where the Court should refuse to grant relief of specific performance in view of Section 20 of Act, 1963.
8. Trial Court dismissed the suit insofar as relief of enforcement of specific performance of contract was claimed, but defendants no. 1, 2 and 4 were directed to refund Rs. 14,000/- with simple interest at the rate of Rs. 12 per cent. Aggrieved thereto, two appeals were filed, i.e. Civil Appeal No. 42 of 1986 and 189 of 1986. The former was filed by the plaintiff himself, while later one was preferred by defendants no. 1 and 2.
9. Lower Appellate Court, i.e., 13th Addl. District Judge, Agra (hereinafter referred to as "LAC") vide judgement dated 5.2.1991 allowed Civil Appeal No. 42 of 1986 and dismissed Civil Appeal No. 189 of 1986. Judgement of Trial Court, in its entirety, was set aside and plaintiff's suit was decreed, directing defendants to execute sale-deed of disputed property in favour of plaintiff within three months, failing which plaintiff shall be entitled to get the sale-deed, executed through the Court. It is this judgment, which is subject matter of this Appeal.
10. Before the Courts below, the objection with respect of Section 8 of HMG Act was issue no. 4. LAC held that HMG Act is a Central Act while the land in dispute is governed by Act, 1950, which is a Provincial Act. Since power of legislation in respect of "agricultural land" vests with State only, therefore provisions of HMG Act cannot be made applicable to the State Act. Having said so, LAC held that suit in question is not barred by Section 8 of HMG Act, inasmuch there was no requirement of seeking permission of District Magistrate before executing an instrument of sale of a property belong to a minor. In fact, on this issue LAC has virtually followed the reasoning given by Trial Court for returning this issue against defendants.
11. Sri Anupam Kulshrestha, learned counsel for appellant, submitted that the view taken by Courts below in respect of Section 8 of HMG Act is patently erroneous.
12. Sri Ashish Gupta, learned counsel appearing for plaintiff-respondent, however, supported the reasons assigned by Courts below on the aforesaid issue and placed reliance on a Single Judge decision of this Court in Smt. Sursati Devi Vs. The Joint Director of Consolidation, Basti and others 1982 ALJ 1473.
13. Act. 1950 is referable to State List, i.e., List-II, Entry 18. There is another entry dealing with transfer of property, i.e., Entry-6, List-III of the 7th Schedule, which reads as under:
"6. Transfer of property other than agricultural land; registration of deeds and documents."
14. The HMG Act is referable to Entry-5 List III of Seventh Schedule, which reads as under:
"5. Marriage and divorce; infants and minors; adoption; wills, intestacy and succession; joint family and partition; all matters in respect of which parties in judicial proceedings were immediately before the commencement of this Constitution subject to their personal law."
15. This Court considered applicability of Section 8 of HMG Act with reference to "agricultural land" in Sursati Devi (supra) and in para 30, 32 and 48 of the judgment said:
"30. In this view of the matter, the provisions of S. 8 of H.M. & G. Act have got to be so construed as to bring the said provision within the legislative competence of the Central legislature. Since the Parliament could not make laws regulating transfer of agricultural land it would be apt to construe the said provision to be not applicable to agricultural land so as to bring the said provisions within its legislative competence."
"32. It would be fair and proper to presume that the Parliament while passing H.M. & G. Act should not have meant to include within the ambit of S. 8 of the Act the agricultural land of the minor, in respect of which no law regulating its transfer could be passed by the Parliament."
"48. ...the term 'immovable property' used in the section is with reference to that kind of property in respect of which it is competent to legislate and to no other property. In Entry 6 of List III agricultural property has been expressly excluded and as such the Parliament had no jurisdiction to make laws in respect of it. It cannot, therefore, be said that since the State Legislature has not as yet enacted any law on the subject and as such S. 8 of the H.M. & G. Act should be made applicable also to agricultural land."
16. This decision has been followed by Hon'ble O.P. Garg, J. in Ashok Kumar and others Vs. Kameshwar Nath and others 1991 (1) AWC 535, though in the earlier part of judgment, Court proceeded to decide the matter treating that the grove in question was not agricultural land.
17. However, in my view there is no scope for bringing in way Section 8 of HMG Act in the case in hand inasmuch an "agreement for sale" does not tantamount to transfer of immovable property, subject matter of agreement for sale, to anyone. It does not confer any proprietary rights to the prospective vendee. Thus, apparently, Section 8 would not be attracted for entering into an agreement for sale. The nature of contract for sale has been discussed by the Courts time and again.
18. The agreement for sale or contract for sale, by itself is not an instrument giving effect to sale of immoveable property. The title to property agreed to be sold continued to vests in the vendor, in case of agreement for sale, but in case of sale, title or property vests with purchaser. In other words an agreement for sale is an executory contract whereas sale deed is an executed contract. An agreement for sale does not create an interest in the proposed vendee in the suit property but only creates an enforceable right in parties. An agreement for sale of property, and promise to transfer the property convey the same meaning and effect in law. A promise to transfer property is an agreement for sale of property.
19. In Maung Shwe Goh Vs. Maung Inn, 1917(1) Bom LR 179 the Court considered Section 54 of Transfer of Property Act, 1882 (hereinafter referred to as the "Act, 1882") and said that a contract for sale by virtue of Section 54 creates no interest in or charge upon the land.
20. Again in Rupchand Balmukund Aharwala Vs. Jankibai Kanhyalal, AIR 1926 Bom 24, a Division Bench of Bombay High Court said that an agreement executed between the parties to divide property at the expiration of litigation would not create any interest on property under the provisions of Section 54 of Act, 1882. A temporary arrangement with regard to profits during litigation is nothing but a system evolved by parties amongst themselves from management of property during litigation, does not mean that it has created any right or interest in property itself. The Court relied on an earlier decision of Privy Council in Rajangam Ayyar Vs. Rajangam Ayyarta, ILR (1922) Mad. 373 where a document, i.e., a memorandum regarding secession of jointness of parties making a declaration that from that time forth the parties became entitled to possession and enjoyment of their properties in separate shares and further providing for execution of further deed effectuating partition would mean that document/ memorandum itself did not create or declare or assign or limit or extinguish any right or interest in the moveable property.
21. In English Law, there is recognition of two classes of ownership, legal and equitable but this has not been recognized in Indian Law. Here the Legislature has recognized, in its wisdom, only one owner. There has been a catena of authorities including that of Privy Council in Chhatra Kumari Devi v. Mohan Bikram Shah and Ors., AIR 1931 PC 196 where it was observed that the Indian Law does not recognize legal and equitable estates. The Privy Council referred to and relied on earlier decisions in J.M. Tagore Vs. G.M. Tagore (1872) IA Sup. Vol. 47 and Webb Vs. Macpherson, (1904) 31 Cal 57. The Privy Council further said that by that law there can be only one owner.
22. It is thus evident that the law as it stand, is very clear, that contract for sale would not make the purchaser/vendee to be owner in equity of estate so long as the sale deed is executed and registered. Mere execution of contract for sale by itself would not create any right or interest in property.
23. In Rambaran Prosad v. Ram Mohit Hazra and Ors., AIR 1967 SC 744 it was held that a contract for sale does not create any interest in property. A three Judge Bench of the Court noticed distinction in law as it was prior to enactment of Act, 1882 and thereafter. In para 14 of the judgment, it said, that in the case of an agreement for sale entered into, prior to passing of Transfer of Property Act, could have resulted in creating an interest in land itself in favour of purchaser. Thereafter the Court referred to the change resulted with enactment of Act, 1882, and in para 17, said as under:
". . . . . a mere contract for sale of immovable property does not create any interest in the immovable property and it therefore follows that the rule of perpetuity cannot be applied to a covenant of pre-emption even though there is no time limit within which the option has to be exercised." (emphasis added)
24. The Court also noticed, when agreement itself recited with that sale deed would be executed within three years, the purchaser had a right to sue for specific performance and this by itself mean that agreement for sale does not create any right or interest in property.
25. In Jiwan Das Vs. Narain Das, AIR 1981 Delhi 291 a Single Judge in para 10 and 11 of the judgment, following Rambaran Prosad (supra), said:
"10. . . . . . . the law in India does not recognise any such estate. Section 54 of the Transfer of Property Act in specific terms provides that a contract for sale does not, of itself, create any interest in or charge on such property. Such contract is merely a document creating a right to obtain another document in the form of sale deed to be registered in accordance with law. In other words, a contract for sale is a right created in personam and not in estate, No privity in estate can be deduced there from which can bind estate, as is the position in cases of mortgage, charge or lease. Of course, such personal right created against the vendor to obtain specific performance can ultimately bind any subsequent transferee who obtains transfer of the property with notice of the agreement of sale.
11. Till, therefore, a decree for specific performance is obtained, the vendor or a purchaser from him is entitled to full enjoyment of the property. In fact, even if a decree for specific performance of contract is obtained, and no sale-deed is actually executed, it cannot be said that any interest in the property has passed."
26. In Sujan Charan Lenka and others Vs. Smt. Pramila Mumari Mohanty and others, AIR 1986 Ori 74, the Court in para 7 of judgment, said, that a bare contract for sale of immoveable property does not create any interest in immoveable property. Referring to Section 54 of Act, 1882, it says:
"7. . . . . . a contract for sale does not, by itself, create any interest in or charge on such property. Such contract is merely a document creating a right to obtain another document in the form of sale deed to be registered in accordance with law. In other words, a contract for sale is a right created in personam and not in estate. No privity in estate can be deduced therefrom which can bind the estate, as is the position in cases of mortgage, charge or lease. Of course, such personal right created against the vendor to obtain specific performance can ultimately bind any subsequent transferee who obtains transfer of the property with notice of the agreement of sale. Till, therefore, a decree for specific performance is obtained, the vendor or a purchaser from him is entitled to full enjoyment of the property. In fact, even if a decree for specific performance of contract is obtained, and no sale-deed is actually executed, it cannot be said that any interest in the property has passed."
27. A Division Bench in Dewan and sons Investments Pvt. Ltd. Vs. Delhi Development Authority, AIR 1997 Delhi 388 said:
"6. In our opinion, the submission of the learned counsel for the petitioner that as a result of agreement to still dated the 1st May. 1970 in respect of the properly in question, entered into between the petitioner and M/s. Goodwill India Limited, the petitioner had acquired a 'vested right' not only in the property in question bill also to claim a 'No Objection Certificate' on that basis, is devoid of substance. . . . . . . In Kanaya Ram v. Rajender Kumar, AIR 1985 SC 371 their Lordships of the Supreme Court have held that in cases where after oral sales mutation of lands was effected in favour of the transferees even then i.e. after the mutation of properties, no rights accrued in favour of the transferees in respect of such lands as the purported sales and the subsequent mutation based on those sales did not create any right or title in favour of the transferees as the provisions of Section 54 of the Transfer of Property Act were not complied with-their being no registered sale deeds. In the present case too the agreement to sell dated the 1st May, 1970 in the absence of any registered sale deed by itself would not be sufficient to create any right or title in favour of the petitioner in respect of the property in question. The registered sale deed, admittedly, in respect of the property in question, was executed on 13-2-90 and thus the petitioners acquired a right and a title in respect of the property in question only after the execution of the registered sale deed on 13-2-90." (emphasis added)
28. Section 54 itself says that a contract for sale does not create any interest in or charge upon such property. This is what has been noticed by this Court in Indira Fruits and General Market, Meerut Vs. Bijendra Kumar Gupta, AIR 1995 All 316.
29. In other words, a person having an agreement for sale in his favour does not get any right in the property except the right of litigation on that basis. Sometimes it is also described that a contract for sale is merely a document, creating a right to obtain another document.
30. Section 8 of HMG Act would come into picture only when there is transfer of immovable property of a minor and not otherwise. In the present case the agreement for sale, by itself, did not result in transfer of immovable property, therefore, before execution thereof, Section 8 of HMG Act, in my view, would not have attracted and, therefore, it cannot be said that suit in question founded upon an agreement for sale is barred by Section 8 of HMG Act. The question no. 1 is returned accordingly.
31. Now coming to second question, it has to be examined whether LAC was justified in exercising its discretion for specific performance of the agreement in the facts and circumstances, as brought before it by the parties.
32. The scope of Section 20 of Act, 1963 has come up for consideration before the Courts again.
33. It cannot be doubted that relief of specific performance of contract is discretionary. However, this discretion does not mean whimsical and arbitrary discretion.
34. It has been held that once plaintiff seeking enforcement of contract is able to show his readiness and willingness, mere delay or laches would not justify refusal of specific performance of contract. In Ajit Prasad Jain Vs. N.K. Widhani and Ors., AIR 1990 Delhi 42 the Court said, grant of relief of specific performance is a rule and refusal an exception on valid and cogent grounds. This Court in Mt. Gaindo Devi v. Shanti Swarup and Ors., AIR 1937 All. 161 said that jurisdiction to decree specific performance is discretionary, but it must be understood that discretion of Court is not to be arbitrarily exercised but has to be guided by judicial principles.
35. In Hari Krishna Agarwala Vs. K.C. Gupta, AIR 1949 Allahabad 440, a Division Bench said that, mere hardship to the defendant will not affect discretion of the Court in enforcing specific performance of contract.
36. In Hari Narain Vs. Shiv Kumar 1990 (2) AWC 770, this Court took the view that delay by itself would neither amount to waiver nor abandonment nor acquiescence. The facts and circumstances justifying grant or refusal of enforcement of contract vary and plenty in number. No thumb rule can be penned down but one thing established in law is that such discretion cannot be arbitrary or whimsical.
37. The Apex Court also considered question about relief of specific performance being discretionary in S.V.R. Mudaliar (Dead) by Lrs. And Ors. Vs. Rajabu F. Buhari (Mrs) (Dead) by Lrs. and Ors., JT 1995 (3) SC 614 and observed, if granting of specific performance would make it "inequitable", the Court may not grant the relief. The discretion is not arbitrary but it must be sound and guided by judicial principles.
38. In the case in hand, defendants no. 3 and 5, i.e., Munna Lal and Tara Chand, admittedly were minor when the agreement dated 10.12.1977 was allegedly executed. Defendant no. 4 is said to have executed said agreement being natural guardian of defendants no. 3 and 5. The agreement was registered on 16.12.1977. When the suit was instituted, by that time defendant no. 3, Munnal Lal, had attained majority. It has been stated that he did not revoke agreement but LAC here has failed to consider that defendant no. 3 has disputed and contested enforcement of agreement by contesting suit. There was no occasion for him to take any legal proceeding for revocation of agreement whereby he had not transferred any right relating to immovable property to plaintiff. Even if there would have been a sale-deed executed by a natural guardian of a minor, such a document is voidable and could always be revoked by minor, on attaining the age of majority. No provision has been shown before this Court which entitles a natural guardian of a minor to sell property of a minor without being restricted by any condition but having absolute discretion. The natural guardian can do when it is essential for the benefit of minor or the family. The property in question, admittedly, was an undivided joint property of defendants 1, 2, 3 and 5. Under Hindu Law, a natural guardian could have alienated undivided joint Hindu Family property of a minor for family necessities, like expenses of maintenance of minors, marriage of their sisters, purchase of residential house owned by their fathers, to discharge the debts etc. In Ashok Kumar Vs. Kameshwar Nath (supra), this Court observed that so long as Hindu Law applies, a father or a natural guardian can alienate minor's interest in coparcenary property subject to well known conditions regarding benefit of the estate, etc. Section 8 of HMG Act has been interpreted by reading it with Section 4 (b) (c) and 6 that it does not apply in respect to undivided interest of a minor in joint family property. It is held that even if Section 8 does not apply in respect to previous permission, still under existing Hindu Law, a Manager and Karta of a joint Hindu Family, can alienate joint Hindu family property so as to bind the interest of minor coparceners in such property, provided, the alienation is either for legal necessity or for the benefit of the estate. The powers applicable to father in this regard are similarly applicable to mother also. This is what has been said in Ashok Kumar Vs. Kameshwar Nath (supra) relying on Subramaniam Vs. K. Gounder AIR 1972 Mad. 377, Sunamani Devi Vs. Babaji Das AIR 1974 Ori. 184, Girdhar Singh and another Vs. Anand Singh and others AIR 1982 Raj. 229 and Smt. Sugga Bai Vs. Smt. Hira Lal and others AIR 1969 M.P. 32.
39. In the case in hand, there is no averment in the plaint that defendant no. 4 entered into agreement on behalf of minors in order to meet family necessities etc. In this regard, plaint is conspicuously silent. Even in the agreement, there is no such averment at all. Defendant no. 5, who has contested this suit through his guardian ad litem, has clearly challenged the agreement. Similarly defendant no. 3 has also contested and has gone to the extent that agreement is result of collusive act on the part of plaintiff and defendant no. 4. Even if no permission was required under Section 8 of HMG Act, still defendant no. 4 had no unrestricted right to alienate property of minor except to the extent it was necessary for family necessities etc. I do not find that on this aspect, LAC recorded any finding. In fact, in absence of pleading on this aspect, there would not have been any occasion to lead evidence and that is how the finding by the LAC is also conspicuously missing.
40. This is one aspect which would have justified LAC to decline to exercise discretion under Section 20 of Act, 1963 inasmuch the property of a minor could not have been forced to be alienated by enforcing an agreement for sale entered into by mother, without there being any pleading and evidence and proof that the said agreement was entered into for certain family necessities etc. Moreover, once minor, on attaining majority, exercises his discretion to revoke the agreement, such an agreement, in my view, could not have been enforced. It is well settled that the discretion under Section 20 of Act, 1963 though not to be exercised arbitrarily, but has to be guided by judicial principles and has to be reasonable. In a case involving immovable property of a minor, when the requirement of necessary legal requirement is found missing, the discretion ought not to have been exercised in favour of plaintiff, by decreeing the suit for specific performance. Question No. 2, therefore, is answered by holding that LAC has not considered the question whether the discretion under Section 20 of Act, 1963 should have been exercised in favour of plaintiff or not, by taking into consideration valid and relevant considerations, and by ignoring the same, it has erred in law by decreeing the suit, reversing judgment and decree of Trial Court.
41. So far as question no. 3 is concerned, it cannot be disputed that agreement for sale was in relation to the entire property which was owned by defendants no. 1, 2, 3 and 5 and, therefore, in my view, Section 168-A of Act, 1950 would not come into picture. When the entire property itself is a small piece of land, it cannot be said that the agreement was for making further smaller fragmentation. Therefore, apparently it cannot be said that Section 168-A of Act, 1950 would bar the suit in question provided the agreement in respect to entire property is found enforceable. In case it is found that in respect to one or two parties, the agreement could have been executed but not in respect to all, then, in such a case, since it would result in fragmentation of land in further smaller pieces, that would not be permissible in view of Section 168-A of Act, 1950 and, therefore, either the suit is to be allowed in its entirety or not, but, it cannot be decreed in piecemeal by confining it to some of the defendants while dismissing in respect to other defendants. This question is answered accordingly.
42. In the facts and circumstances, I find it appropriate to set aside the judgment of LAC and remand the matter to LAC to re-consider the question, whether the suit is liable to be decreed by exercising discretion in favour of plaintiff, considering the entire matter in the light of the above discussion and in accordance with law and thereafter to pass a fresh order.
43. The appeal is, accordingly, allowed. Judgement of LAC dated 5.2.1991 in Civil Appeal No. 42 of 1986, in the manner, as above, and to the extent it is not sustainable in view of the findings recorded above, is hereby set aside. The matter is remanded to LAC to decide the issue(s), as directed above, expeditiously, and, in any case, within six months from the date of production of certified copy of this order.
44. There shall be no order as to costs.
Dt. 12.3.2013 PS