Delhi High Court
Sarala Devi And Ors. vs Daya Ram And Ors. on 8 September, 1995
Equivalent citations: 60(1995)DLT3, 1995(35)DRJ36, 1996 A I H C 3152, (1995) 60 DLT 3, (1996) ILR 2 DEL 860, (1996) 1 CIVILCOURTC 637, (1996) 1 CIVLJ 352, (1995) 35 DRJ 36
Author: M.J. Rao
Bench: M.J. Rao
JUDGMENT Anil Dev Singh, J.
(1) ADMIT.
(2) This is an appeal from the order of the learned single Judge in I.A.9565/94 in Suit No.1518/94 whereby the suit filed under Order 37 Civil Procedure Code has been treated as an ordinary regular suit. The facts giving rise to this appeal are as under:-
(3) The first appellant herein is the first plaintiff while the second and third appellants herein are the second and third plaintiffs in the suit. The first appellant is the widow and the second and third appellants are the son and daughter respectively of late Brahm Parkash, who died on July 6, 1990. The first two respondents in this appeal are the first two defendants in the suit. The third and fourth respondents,the legal representatives of late Tej Ram, are the third and fourth defendants in the suit.
(4) On April 2, 1990 Brahm Parkash entered into an agreement with the first and second respondents and Tej Ram. Under the agreement, the first and second respondents and Tej Ram agreed to sell a piece of land measuring 17 bighas and 4 biswas comprised in Khasra No.43/12 (4-16), 13/1 (3-12), 17 (4-8) and 18(4-8) situate in village Kakrola, New Delhi to Brahm Parkash at the rate of Rs.6.25 lakhs per acre. At the time of execution of the instrument, Brahm Parkash paid a sum of Rs.4 lakhs as part consideration to the first two respondents and Tej Ram. As per the terms of the agreement to sell, the sale deed was required to be executed on obtaining the requisite no objection certificates from the Revenue and Income-tax departments. However, no such certificates by the prospective vendors were obtained within the time specified in the agreement. In the meantime on June 6, 1991 a notification under section 4 of the Land Acquisition Act, 1894 was issued in respect of the land in question. This was followed by a declaration under section 6 of the Act on December, 18, 1991. Thereafter the matter culminated in an award on April 2, 1993 and the land owners, the first and second respondents received compensation in respect of 1/2 share of the land in question and the third and fourth respondents, being the heirs of Tej Ram, received the compensation of the other half. As a result of the acquisition, the land stood vested in the Government of India rendering the agreement to sell incapable of being specifically performed. Thereupon the appellants required the respondents to refund the sum of Rs 4 lakhs, which was paid by Brahm Prakash to the first two respondents and Tej Ram at the time of execution of the agreement to sell. Failing to receive any favorable response from the respondents, the appellants filed a suit under Order 37 Civil Procedure Code against them on the basis of the agreement to sell. On November 22, 1994 the learned single Judge passed an order holding that the suit was not friable under Order 37 Civil Procedure Code as the third and fourth respondents, were not parties to the agreement to sell. In reaching this conclusion the learned single Judge relied upon a decision of the Bombay High Court in Rajesh Steel Centre vs. Smt. Rashmi K. Agarwal & Ors. 1986 Mah. L.J. 993. It is this order of the learned single Judge which has been impugned before us.
(5) We have heard learned counsel for the parties and we are of the opinion that the learned single Judge was not right in holding that the suit under Order 37 Civil Procedure Code would not lie. In an identical matter where the present appellants had instituted a suit, being Suit No.1507/94 under Order 37 against some other parties, the learned single Judge has veered around to the view that such a suit would be maintainable against the heirs and legal representatives of the contracting party who have received his assets. The following are the observations of the learned single Judge recorded in his order dated May 3,1995 with which we respectfully concur: "ALL the defendants herein have themselves received the amount of compensation. Not only the receipt of compensation by the defendants has not been disputed by them, the plaintiff has filed certificates issued by the office of the Deputy Commissioner, Delhi (Land Acquisition Branch) showing disbursement of the amount of compensation to the present defendants. The present one is not a case where the amount was received by the deceased and liability is sought to be enforced against heirs who might not have received any liquid assets of the deceased. It cannot be said that the defendants do not have any liquid assets or for that matter any assets of the deceased not coming to their hands".
(6) The facts of the present case and the Suit No.1507/94 are similar. In the present case also it is not denied by the learned counsel for the respondents that his clients including the third and fourth respondents, who are the heirs of late Tej Ram, have received the compensation for the land in question.
(7) It may be noted that under sections 15(b) and 19(b) of the Specific Relief Act, 1963 (which correspond to old sections 23 (6) and 27(b) of Specific Relief Act,1877) the representative in interest of a contracting party can maintain a suit for specific performance of a contract, where learning,skill, solvency or personal quality of such party is not a material ingredient in the contract. In an agreement to sell personal quality of a party thereto is not a material ingredient. Such a contract therefore can be enforced at the instance of a representative in interest, including his heirs and legal representatives except a bona fide transferee who had paid money in good faith and without notice. Sections 15 and 19 of the Specific Relief Act, 1963 in so far as they are relevant provide as follows:-
"15.Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by -
a) B)THErepresentative in interest, or the principal, of any party thereto: Provided that, where the learning skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest or his principal shall not be entitled to specific performance of the contract, unless where his part thereof has already been performed."
19.Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against -
A)EITHERparty thereto (B)ANYother person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract.
(8) In this context, Sections 37 and 40 of the Indian Contract Act, 1872 are also relevant. The said provisions are as follows:-
"37.The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.
Promises bind the representatives of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract."
"40.If it appears from the nature of the case that it was the intention of the parties to any contract that any promise contained in it should be performed by the promisor himself, such promise must be performed by the promisor. In other cases, the promisor or his representatives may employ a competent person to perform it."
(9) According to the aforesaid provisions, normally a contract can be enforced by or against the parties and their legal heirs unless a contrary intention express or implied, appears from it.
(10) In Ram Baran Prasad Vs.Ram Mohit Hazra and others the Supreme Court while construing Sections 23(b) and 27(b) of the Specific Relief Act, 1877 and Sections 37 and 40 of Contract Act, 1872 held that these statutory provisions lay down that subject to certain exceptions a contract, in the absence of a contrary intention, express or implied, will be enforceable by and against the party and their legal heirs and representative including assignees and transferees.Relying on these provisions the Supreme Court rejected the argument that the covenant for the pre-emption was merely a persona covenant between the contracting parties and was not binding against successors-in-interest or assignees of the original parties to the contract. It therefore held that the pre-emption clause in the covenant between the contracting parties would be binding upon their assignees or successors-in-interest.
(11) In U Dun Hiaw and another Vs.Maung Aw and others Air 1929 Rangoon 274, the High Court having regard to Section 27(b) of the Specific Relief Act,1877 held that the heirs of the deceased owner of the property would be liable for the liabilities incurred by him to the extent of his estate which comes in their hands. In this regard it was observed as follows: "NO personal liability devolves upon them but the estate which has come into their hands is answerable for the liabilities of its deceased owner, and, as representatives of the latter, they must defray these liabilities so far as that estate will enable them to do so".
(12) To the same effect are the decisions in Bishun Dayal and another Vs. Gaya Prasad and another Air 1928 Oudh 148 and Vaman Trimbak Joshi and others Vs. Changik Damodar Shimpi and others Air 1926 Bombay 97. The principle is also echoed in several other judgments but it is not necessary to multiply the same.
(13) It is not disputed by the learned counsel for the respondents that his clients have received compensation on account of the acquisition of the land in question. This being so the heirs of Tej Ram cannot put forward a plea that Order 37 Civil Procedure Code would not apply as they were not signatories to the agreement to sell. It is sufficiently clear from the arguments of the learned counsel for the parties and the averments in the plaint that an amount of Rs.4 lacs was received by the first two respondents and Tej Ram from Brahm Parkash under the agreement to sell. It is not a case where the third and fourth respondents did not have the assets of Tej Ram deceased coming to their hands. Applying the principles laid down in Section 15(b) and 19(b) of the Specific Relief Act,1963 and Sections 37 and 40 of the Indian Contract Act, 1872 as also the view expressed in the judgment of the Supreme Court in Ram Baran Prasad case (Supra) and the other decisions noticed above, we are of the opinion that the suit under Order 37 instituted by the appellants against the respondents including the heirs of Tej Ram would be maintainable.
(14) Learned counsel for the respondent relied upon the following observations of the Bombay High Court in Rajesh Steel Centre Vs. Smt.Rashmi K.Agarwal & Ors. 1986 Mh.L.J.993: "IF these legal heirs and representatives who have been made defendants are permitted to defend, the whole or any part of the claim, and a direction is given to give security within a specified time, it may be that they may not be able to comply with the order because no liquid assets or for that matter any assets if the deceased may have come to their hands during the time prescribed for giving the security, in which case their defense would be shut out and a decree would follow: such a situation would mean the very negation of the leave granted to defend, those who are personally liable. The result against such defendants who are no personally liable would be harsh, inequitable and unjust and such can never be the intention of the Legislature in enacting Order xxxvii of the Code of Civil Procedure."
(15) As is apparent from the afore said observations, the Bombay High Court proceeded on the basis that the legal representatives may not be able to comply with the direction under Order 37 because no liquid assets of the deceased may have come to their hands during the time prescribed for giving the security. This is not the position in the instant case as the third and fourth respondents have received compensation of the land as the heirs of Tej Ram. Since the assets of the deceased have come into the hands of the third and fourth respondents, the difficulty pointed out by the Bombay High Court will not arise in the instant case. Where the estate of a deceased devolves upon his legal representatives they would be liable for the liabilities incurred by him including the liability created under a contract to which the deceased was a party. But this will be to the extent of the estate coming in the hands of the legal representatives. In case of a contract other than whose performance depends upon the personal qualities of the deceased, the same would be binding on its heirs, assignees and successors in interest to the extent of his estate.
(16) Accordingly the appeal succeeds and the order of the learned single Judge dated November 22, 1994 is set aside.The suit shall be tried as a summary suit under Order 37 CPC.No costs.