Gauhati High Court
Prabir Kumar Das And Ors. vs Amulya Bhushan Paul on 20 June, 2005
Equivalent citations: AIR2005GAU128, (2006)1GLR618, AIR 2005 GAUHATI 128, (2006) 1 GAU LR 618 (2005) 3 GAU LT 364, (2005) 3 GAU LT 364
Author: I.A. Ansari
Bench: I.A. Ansari
JUDGMENT I.A. Ansari, J.
1. This Letters Patent Appeal has a fairly long history. The plaintiffs-appellants instituted the suit for specific performance of the agreement for sale of the suit property. The trial Court decreed the suit. The defendants preferred the first appeal before the Judicial Commissioner, Tripura, which was, subsequently, transferred to this High Court. The learned single Judge of the High Court, on 5-7-1974, allowed the appeal of the defendant and set aside the impugned decree. The plaintiffs, on 3-8-1974, filed a Letters Patent Appeal in the High Court, but when the appeal came up for hearing, the same was dismissed on the ground that it was not maintainable in view of Section 100-A of the Civil Procedure Code (in short "the Code"), which had come into force as a result of the amendment: of the Code, with effect from 1-2-1977. The plaintiff appellants, then, carried the matter to the Hon'ble Supreme Court and by judgment and order, dated 13-3-2001, passed in Civil Appeal No. 11884 of 1995, the Hon'ble Supreme Court set aside the judgment under the LPA and remitted the matter to the High Court for deciding the LPA in accordance with law. However, before the LPA could be taken up for hearing, the Code underwent another set of broad based amendments and in terms of the Civil Procedure Code Amendment Act, 2002, the provisions of Letters Patent Appeal have been done away with. Then the question arose as to whether the LPA was maintainable. A Division Bench of this Court Pinku Trading Corporation v. Bank of Baroda reported in (2004) 2 Gauhati LR 478, has. however, laid down that the Letters Patent Appeal, which have been instituted before coming into force of the said Amendment Act, arc maintainable. The LPA has accordingly been taken up for hearing by us.
2. The case of the plaintiff appellants may, in brief, be set out as follows :-
(i) One Haripada Ghosh (since deceased) was owner of the suit property, which consists of a two-storied pucca building. After beginning the construction of the suit premises, when Haripada could not complete the construction work for want of funds, Haripada approached the proforma defendant No.5 for some financial help. As the plaintiff No. 1 had been looking out for a property to take, on lease, for the purpose of carrying on some business and as the suit property, being located at Agartala Bazar, was suitable for business of the plaintiff No. 1, the plaintiff No. 1 readily agreed to give financial help to Haripada for completing the works of the suit property. An agreement accordingly was reached in January/February, 1957, between Haripada, on the one hand, and the plaintiff No. l, on the other, to the effect that the defendant No.5 would complete the unfinished building of Haripada with the money of the plaintiff No. 1 and after completion of the building, the plaintiff No. 1 would occupy the same and carry on his business there for a period of two years without being liable to pay any rent to Haripada and, within two years of the occupation of the suit property by the plaintiff No. l, even if Haripada repaid the loan taken from the plaintiff No. 1 for completion of the construction of the suit property, the plaintiff No. 1 would still continue to occupy the same, but only as a monthly tenant at. a rent of Rs.50/- per month. In accordance with the agreement so reached among the parties concerned, the work of the ground floor of the suit property was completed with the money advanced by the plaintiff No. 1 and in the month of April/May, 1957, the plaintiff No. 1 took possession of the ground floor of the said building and started his business there. Later on, however, Sri Nripendra Chandra Dutta Majumdar, father of the plaintiff No. 2, entered into an agreement with Haripada on 13-3-1958. As per this agreement, the plaintiff No.2's father was to construct the first floor of the suit property with his own money and in consideration thereof, it was agreed that the plaintiff No.2's father would occupy the second floor of the said building for a period of 11 years at a monthly rental of Rs.40/- and the money to be spent by the plaintiff No.2's father in completing the construction work of the first floor of the suit property would be adjusted against the monthly rents payable by him to Haripada. Another stipulation in the agreement so reached was that if the entire amount of money spent by the plaintiff No.2's father on the construction work was not wholly adjusted till expiry of the said period of 11 years, the same arrangement would continue until the entire amount spent by the Plaintiff No.2's father on the construction of the said building was repaid by Haripada. It was further agreed between the parties concerned that even after adjustment of the entire expenditure to be incurred by the father of the plaintiff No.2, he would be entitled to occupy the second floor of the said building as a lessee on payment of monthly rental. Haripada accordingly executed the lease deed in favour of the plaintiff No.2's father on 13-3-1958. The plaintiff No. 1 was, however, ignorant of all these arrangements. Though the plaintiff No.2's father had constructed the wall of the first story of the said building, he could not complete the roof thereof.
(ii) Shortly thereafter, however, Haripada entered into an agreement for sale of the suit property with defendant Nos. 5 and 6, namely, Manindra Chandra Saha and Narendra Ch. Saha respectively. The total consideration for the sale was Rs. 15,000/-and, on accepting a sum of Rs.6,000/- from the proforma defendant Nos. 5 and 6 as advance on 3-4-1959, Haripada executed a deed of agreement for sale on 30-4-1959. In this agreement for sale, it was stipulated that Haripada would obtain permission from the Govt. for selling the suit property, because at the relevant point of time, no im-moveable property, at Agartala Town, could have been sold without written permission from the Govt. However, Haripada died, on 18-1-1960, without obtaining permission and leaving behind his widow, Misri Bala (defendant No.2), his daughter Kalpana Ghosh (defendant No.3) and his mother, Ananda Bala (defendant No.4). As Haripada's daughter, Kalpana Ghosh (defendant No.3), was still a minor, it was found difficult to obtain permission. However, on 14-4-1961, the law requiring permission for sale was abolished due to introduction of Tripura Land Revenue and Land Reforms Act, 1960. After the death of Haripada, the plaintiff No. 1 found that he had no means to get back the money, which he had spent in completing the ground floor of the said two-storied building, nor could he make any agreement with the heirs of deceased Haripada, for, Haripada's daughter was a minor. The plaintiff No. 1 was also worried on account of the fact that he had spent money on the said construction works on the basis of oral agreement, which he had entered into with Haripada. When the plaintiff No. 1 came to learn about the contract for sale of the said building between the defendant Nos. 5 and 6, on the one hand, and Haripada, on the other, a negotiation got started between the plaintiff Nos. 1 and 2, on the one hand, and the defendant Nos. 5 and 6, on the other hand. The negotiation ended, on 28-3-1962, with an agreement reached between the plaintiff Nos. 1 and 2, on the one hand, and the defendant Nos. 5 and 6, on the other, the agreement being that on payment of Rs.6000/-, in cash, to the defendant Nos. 5 and 6, the defendant Nos. 5 and 6 would sell their agreement for sale their agreement for sale in favour of the plaintiff Nos. 1 and 2. In terms of the agreement so reached on 28-3-1962, the plaintiff Nos. 1 and 2 jointly paid Rs. 6,000/- to defendant Nos. 5 and 6. The sale deed was accordingly executed, on 28-3-1962, between the plaintiffs 1 and 2, on the one hand, and the defendant Nos. 5 and 6, on the other; but since this sale deed was executed on an insufficient stamp paper, the plaintiff Nos. 1 and 2 got another sale deed executed by the defendant Nos.5 and 6 in their favour, on 21-3-1963, on adequate stamped papers.
(iii) However, having known full well about the agreement for the sale between Haripada, on the one hand, and the defendant Nos. 5 and 6, on the other, and also having fully known the fact that the plaintiffs had purchased the said agreement for sale from the defendant Nos. 5 and 6, the defendant No. 1 purchased the share of Haripada's widow, Smt. Misri Bala Ghosh (defendant No. 2) and his mother, Anandabala (defendant No.4), by registered sale deed, the sale deed by the defendant Nos. 2 and 4 having been executed, on 22-12-1961, in respect of their 2/3rd share in the said property. Moreover, after obtaining permission from the District Judge, Agartala, for sale of the share of her said minor daughter too in favour of the defendant No. 1, the sale deed, on behalf of the defendant Nos. 3, having been executed, on 11-2-1963, in respect of her l/3rd share in the said property, the consideration for the sale, in all, being, thus, a sum of Rs. 12,000/-. The plaintiffs, then, instituted Title Suit No. 49/1965 in the Court of Sub-Judge, Agartala, Tripura, praying, inter alia, for a decree directing the defendants to transfer, by way of sale, the suit property in favour of the plaintiffs in terms of the agreement reached by Haripada.
3. The defendant Nos. 1, 2 and 4 each filed separate written statement and contested the suit. The defendant Nos. 5 and 6, however, filed joint written statement and supported the case of the plaintiffs. In their written statements, though separately filed, the defendant Nos. 1 and 2 contended to the effect, inter alia, that the suit was barred by limitation, estoppel, acquiescence, waiver and want of cause of action and that the suit was the result of collusion amongst the plaintiffs and the defendant Nos. 4, 5 and 6, the case of the contesting defendant Nos. 1 and 2 being, in brief, thus : Haripada had no contract for sale of the suit property with the defendant Nos. 5 and 6. Neither Haripada was in need of money nor did he accept any money as loan from the plaintiff No. 1 in terms of any agreement of tenancy as alleged by the plaintiffs. No agreement was ever reached between Haripada and the father of the plaintiff No.2 with regard to the construction of the said building. No agreement for sale of the suit premises between Haripada, on the one hand, and the defendant Nos.5 and 6, on the other, was ever entered into nor have the two plaintiffs jointly purchased the agreement for sale from the defendant Nos.5 and 6. The plaintiff No. 1 was inducted into the ground floor of the suit property by Haripada as a monthly tenant on rental of Rs.100/- per month with effect from 15-4-1957 and it was settled between the parties concerned that the plaintiff No. 1 would execute a lease deed in favour of Haripada. But sometime, thereafter, Haripada fell seriously ill, he became paralytic in June and July, 1957, and, eventually, died in January, 1960. So, the lease deed could not be executed. Having fallen ill and becoming paralytic, Haripada lost his sense of understanding and suffered from mental derangement. The defendant No.2, Misribala, widow of Haripada, and the defendant No.3, Kalpana, minor daughter of the said deceased, being represented by her mother as natural guardian, entered into an agreement with the defendant No. 1 for sale of the suit property including the first floor thereof on a consideration of Rs. 12,000/-and executed an agreement, in this regard, in favour of the defendant No. 1, the same having been registered, on 24-10-1961, on accepting Rs.3,000/- as advance towards the said consideration amount and handed over the possession of the suit property to the defendant No. l. Neither the defendant No. l nor the defendant Nos. 2 and 3 were aware of any agreement existing between Haripada, on the one hand, and defendant Nos. 5 and 6, on the other. The defendant No. 1 is, thus, bona fide purchaser of the suit property for value without notice and, hence, the plaintiffs are not entitled to claim specific performance of the alleged contract for sale. The defendant No.4, i.e. the mother of Haripada and her two sons have been gained over by the plaintiffs and they have accordingly supported the false and manipulated case set up by the plaintiffs.
4. As far as the defendant No.4, i.e. the mother of the Haripada is concerned, she filed, as already indicated hereinabove, a separate written statement. While she admitted in her written statement that defendant Nos. 2, 3 and 4 had sold the suit premises in favour of the defendant No. l, she, at the same time, claimed that though Haripada was her eldest son, he was not the sole and absolute owner of the suit property inasmuch as the suit property was a joint property of the family and Haripada's two brothers, Kalipada and Bishnu Pada, were also co-shares of the suit property. Hence, any transaction, which might have been effected alone by Haripada, cannot be operative, for, the same is adverse to the interest of the other co-owners and since Haripada did not get the suit land muted in his name, he had no saleable interest in the suit property. It was the further case of the defendant No.4 that the defendant No. 1 by applying undue influence and making false representations secured some collusive documents regarding the suit property without any kind of consideration having been paid in this regard.
5. The following issues were framed in the suit:
(1) Have the plaintiffs any cause of action against the defedts?
(2) Is the suit barred by limitation?
(3) Is the suit barred by estoppel, waiver and acquiescence ?
(4) Is the suit maintainable in its present form?
(5) Have the plaintiffs any legal right or locus-standi to sue and to get any relief prayed for?
(6) Is the suit bad for vagueness, indefiniteness and uncertainty of the subject matter of the suit? Is the plaintiffs claim for specific performance of the alleged contract for sale tenable, legal and bona fide?
(7) Is the suit bad for defect of parties?
(8) Did Haripada Ghosh enter into any contract for sale of the suit property to pro-defendants Nos. 5 and 6 for Rs. 15000/- or any price and did the pro-defdt Nos. 5 and 6 make payment of Rs.6000/- to Haripada Ghosh towards the alleged price of the suit property as stated by the plaintiffs?
(9) Did Haripada Ghosh execute any deed of agreement or Bainapatra in favour of the pro-defdt. Nos. 5 and 6 on 30-4-1959 as alleged in the plaintn? Is the alleged deed of agreement for sale real, genuine, valid and operative and legally enforceable document and does it relate to the suit land?
(10) Has the property in suit been correctly and properly described and does it consist of a 2 storied building?
(11) Did Haripada, take any money from the plaintiff No. l at any time to complete the alleged unfinished building and did plaintiff No. 1 spend any money for completion of the building as alleged ? Was there any agreement that the plaintiff No. 1 would occupy the one storied building without payment of rent for some period and then the rate of rent would be Rs.50/- per month as alleged in the plaint? Was the plaintiff No. 1 a monthly tenant at a rent of Rs. 100/- per month?
(12) Was Haripada Ghosh in sound mind and body and was he in sound disposing mind and did he execute a lease-deed in favour of the father of the plaintiff No.2 on 13-3-1958 as alleged in the plaint? Did he execute any Bainapatra in favour of defdts. Nos. 5 and 6?
(13) Did the plaintiffs 1 and 2 purchase the alleged Bainapatra regarding sale and purchase of the suit property from defdt Nos. 5 and 6 ? Is such alleged Bainapatra true, real genuine and operative? Was the alleged purchase by the plaintiffs bona fide, valid, operative legal and for consideration?
(14) Was the defdt No.l aware of any Bainapatra being executed by Haripada Ghosh in favour of defedt Nos. 5 and 6 regarding suit property before his purchase ?
Are the plaintiffs entitled to claim specific performance from defdt No. 1 or any one of the defdt?
(15) Is the alleged purchase of the Bainapatra by the plaintiffs from defdt. Nos. 5 and 6 valid, legal and operative and for consideration and the plaintiff have acquired any right to sue and did they make any tender for any portion of the alleged price?
(16) Is not defdt No.l a bona fide purchaser of the suit property for valuable consideration without notice of any alleged contract for sale?
(17) Are the stories of agreement to sell to defdt. Nos. 5 and 6 by Haripada Ghosh and purchase of said Bainapatra by the plaintiffs true, genuine, bona fide, valid, operative and probable and for valuable consideration?
(18) Are the plaintiffs entitled to get kabala from defdts. respecting the suit property?
6. The suit, as indicated hereinabove, ended with a decree in favour of the plaintiffs. An appeal, namely, FA No. 11 of 1966 was preferred by the defendant No. 1 and the same, as already mentioned hereinabove, was decided in favour of the defendant No. 1 and the decree granted by the learned trial Court was set aside. Hence, the present Letters Patent Appeal.
7. Resisting the appeal, at its very threshold, Mr. S. N. Chakraborty, learned counsel for the respondents, has submitted that even if the case of the plaintiff is assumed to be true, what their case shows is that the defendant Nos. 5 and 6, namely, Monindra Chandra Saha and Narendra Chandra Saha respectively were the ones with whom Haripada Ghosh (since deceased) had entered into a contract for sale and it was, in turn, these two defendants (i.e., defendant Nos. 5 and 6), who transferred their rights and interests under the said agreement for sale in favour of the plaintiff-appellant. The contract for sale, which the defendant Nos. 5 and 6, claims to have entered into with Haripada Ghosh, was, according to Mr. Chakraborty, being a mere agreement, could not have been transferred in favour of the plaintiff appellant, for, contends Mr. Chakraborty, a contract for sale does not create any interest in, or charge over, the property and such an agreement gives to the party to such agreement a mere right to sue; but a mere right to sue, in the light of the provisions of Section 6(e) of the Transfer of Property Act (in short TP Act), is, according to Mr. Chakraborty, not transferable. It is clear, thus, submits Mr. Chakraborty, that by virtue of transfer of the contract for sale, in question, the plaintiffs -appellants did not acquire any right under the contract for sale and could not have, therefore, sued for specific performance thereof.
8. Reacting to the above submissions made on behalf of the respondents, Mr. B. Das, learned Senior counsel appearing for the plaintiffs appellants, submits that a contract for sale is transferable.
9. None of the learned counsel for the parties has, however, cited any authority in support of their respective contentions.
10. Be that as it may, since the question raised is of vital importance in the present appeal and may determine the fate of the appeal, we deem it proper to examine the rival submissions made before us and determine if a contract for sale of an immovable property is transferable or assignable.
11. While considering the question as to whet her a contract for sale of an immovable property can be assigned or not, it is pertinent to take note of Section 54 of the TP Act, which, while defining the contract for sale, lays down, in clear words, that a contract for sale of an immovable property does not, of itself, create any interest in, on charge on, such property. Since a contract for sale of an immovable property does not, of itself, create any interest in, or charge on, the immovable property, the question, which obviously arises, is this : Whether a contract for sale of an immovable property is or is not assignable ? The question, so posed, brings us to a more fundamental question and the question is as to whether a contract for sale of an immovable property gives to the intending /prospective vendee a 'mere right to sue' within the meaning of Section 6(e) of the TP Act and makes, therefore, such a right wholly non-transferable and/or assignable.
12. While considering the question posed above, it needs to be point out, at the very out set, that there is a cardinal difference between a contract for sale of immovable property in English law and the law on this subject in India. In English law, a contract for purchase of immovable property creates an equitable interest in the property in favour of the prospective purchaser. As a result, a contract for sale creates, in the English law, two conflicting interests in respect of the property, the two interests being legal and equitable, the owner of the property having legal interest in the property, whereas the buyer, under the contract, acquires equitable interest in the property. Since buyer under such a contract for sale acquires an equitable interest and if such a contract does not have any fixed time limit for its performance then, such a covenant, being against the rule of perpetuity, is regarded as altogether void.
13. Before coming into the force of the TP Act, an agreement for sale of an immovable property, in India too, was treated as having created an equitable interest in the property itself in favour of the purchaser. It was only on passing of the TP Act and when the enactment made it clear that a contract for sale of immovable property would not create any interest in, or charge on, the property itself, that the concept of an agreement for sale of an immovable property creating an equitable interest as applicable to English law was done away with. This change, which the TP Act brought into the realm of contract for sale in India, is succinctly described by Ramaswami, J., in the case of Ram Baran Prasad v. Ram Mohit Hazra, , speaking for the Court, in the following words :- (Paras 9, 10, 11) "In English law a contract for purchase of real property is regarded as creating an equitable interest, and if, in the absence of a time limit, it is possible that the option for repurchase might be exercised beyond the prescribed period fixed by the perpetuity rule, the covenant is regarded as altogether void....
**** ***** ***** In the case of an agreement for sale entered into prior to the passing of the Transfer of Property Act, it was the accepted doctrine in India that the agreement created an interest in the land itself in favour of the purchaser....
**** ***** ***** But there has been a change in the legal position in India since the passing of the Transfer of Property Act. Section 54 of the Act states that a contract for sale of immovable property "does not, of itself, create any interest in or charge on such property"
14. No wonder, therefore, that in Bai Dosabai v. Mathuradas Vodinddas , the Supreme Court, reiterating what was held in Ram Baran Prasad (supra), observed as follows : (Para 6) "The concept and creation duality of ownership, legal and equitable, on the execution of an agreement to convey immovable property, as understood in England is alien to Indian Law which recognises one owner i.e. the legal owner: vide, Rambaran Prasad v. Ram Mohit Hazra and Narandas Karsondas v. S. A. Kamtam ".
15. While considering the question as to whether a contract for sale of immovable property is assignable or whether such a contract for sale of immovable property gives to the purchaser a mere right to sue or something more than 'a mere right to sue', one has also to bear in mind the provisions of Section 40 of the TP Act, which run as follows :-
"40. Where, for the more beneficial enjoyment of his own immovable property, a third person has, independently of any interest in the immovable property of another or of any easement thereon, a right to restrain the enjoyment in a particular manner of the latter property, or Where a third person is entitled to the benefit of an obligation arising out of contract, and annexed to the ownership of immovable property, but not amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation nor against such property in his hands."
16. A careful reading of what Section 40 embodies shows that while a contract for sale does not create any interest in, or charge on, the land, it nevertheless creates an obligation annexed to the ownership of the property and this obligation can be enforced against a subsequent gratuitous transferee from the vendor or a transferee for value, but with notice. Section 40, thus, undoubtedly, makes a substantial departure from the English law, for, while the contract for sale creates, in India, no equitable interest in the land, it, at the same time, cast an obligation annexed to the ownership of the land making the contract enforceable not only against the vendor but also against an assignee of the vendor, who takes from the promisor the property gratuitously or takes the property for value, but with notice of the contract for sale. A contract for sale, thus, in India, does not stand on the same footing as a mere personal contract, for, it can be enforced against an assignee with notice. This position of law becomes abundantly clear from the observations made in Ram Baran Prasad (supra), which runs as under :- (Para 11) "The second paragraph of Section 40 taken with the illustration establishes two propositions : (1) that a contract for sale does not create any interest in the land, but is annexed to the ownership of the land and (2) that the obligation can be enforced against a subsequent gratuitous transferee from the vendor or a transferee for value but with notice....
**** ***** ***** Reading Section 14 along with Section 54 of the Transfer of Property Act its manifest that 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. It is true that the second paragraph of Section 40 of the Transfer of Property Act make a substantial departure from the English law, for an obligation under a contract which creates no interest in land but which concerns land is made enforceable against an assignee of the land who takes from the promisor either gratuitously or takes for value but with notice. A contract of this nature does not stand on the same footing as a mere personal contract, for it can be enforced against an assignee with notice. There is as superficial kind of resemblance between the personal obligation created by the contract of sale described Under Section 40 of the Act which arises out of the contract, and annexed to the ownership of immovable property, but not amounting to an interest therein or easement thereon and the equitable interest of the person purchasing under the English law, in that both these rights are liable to be defeated by a purchaser for value without notice."
17. Making it explicitly clear that though a contract for sale of immovable property does not. of itself, create any interest in, or charge on, such property, yet it, in the light of the provisions of Section 40 of the TP Act, it does create an obligation annexed to the land and that this obligation is one, which may be specifically enforced against a transferee with notice of the contract for sale or against a gratuitous transferee of the property, observed the Supreme Court in Bai Dosabai (supra) as follows :- (Para 6) "The ultimate paragraph of Section 54 of the Transfer of Property Act, expressly enunciates that a contract for the sale of immovable property does not, of itself, create any interest in or charge on such property. But the ultimate and penultimate paragraphs of Section 40 of the Transfer of Property Act make it clear that such a contract creates an obligation annexed to the ownership of immovable property, not amounting to an interest in the property, but which obligation may be enforced against a transferee with notice of the contract or a gratuitous transferee of the property. Thus the equitable ownership in property recognised by equity in England is translated into Indian law as an obligation annexed to the ownership of property, not amounting to an interest in the property, but an obligation which may be enforced against a transferee with notice or a gratuitous transferee."
18. That there is no serious departure from the law, which was laid down in Ram Baran Prasad (AIR 1967 SC 774) (supra) and reiterated in Bai Dosabai (supra), the Supreme Court, in T.M. Balakrishna Mudaliar v. M. Satyanarayana Rao, , considered the question as to whether a contract of repurchase of an immovable property, is ordinarily, assignable and taking note of the Privy Council's decision in Sakalaguna v. Munnuswami AIR 1928 PC 174 and also of the observations made by Beaumont, CJ, in Vishweshwar v. Durgappa AIR 1940 Bom 339, observed and held as follows :-
"9. The Privy Council in Sakalaguna v. Munnuswami, AIR 1928 PC 174, has held that the benefit of a contract of repurchase which did not show that it was intended only for the benefit of the parties contracting, could be assigned and such contract is enforceable. Beaumont CJ., in Vishweshwar v. Durgappa, AIR 1940 Bom 339 held that both under the common law as well as Under Section 23(b) of the Specific Relief Act, 1877, an option given to repurchase the property sold would prima facie be assignable, though it might also be so worded as to show that it was to be personal to the grantee and not assignable. On the particular facts of that case, it was held that the contract was assignable. In Sinnakaruppa v. Karuppuswami, AIR 1965 Mad. 506 it was held (at p. 508) :
"In our view, generally speaking, the benefits of a contract of repurchase must be assignable, unless the terms of the contract are such as to show that the right of repurchase is personal to the vendor. In the latter case it will be for the person who pleads that the contract is not enforceable, to show that the intention of the parties thereto was that it was to be enforced only by the persons named therein and not by the assignee."
19. A question may arise as to whether a contract for repurchase of property stands on the same footing as does a contract for sale of the immovable property. We are firmly of the view that there remains really no serious and fundamental difference between the two, when the TP Act has done away with creation of any equitable interest in the immovable property by virtue of an agreement for sale. This apart, the case of Bai Dosabai (supra) is a case, which relates to enforcement of a contract for sale of an immovable property and not of repurchase of the property, and in Bai Dosabai (supra), the Supreme Court, if we may reiterate, made clear the position of law thus, "The ultimate paragraph of Section 54 of the Transfer of Property Act, expressly enunciates that a contract for the sale of immovable property does not, of itself, create any interest in or charge on such property. But the ultimate and penultimate paragraphs of Section 40 of the Transfer of Property Act make it clear that such a contract creates an obligation annexed to the ownership of immovable property, not amounting to an interest in the property, but which obligation may be enforced against a transferee with notice of the con tract, or a gratuitous transferee of the property. Thus the equitable ownership in property recognised by equity in England is translated into Indian law as an obligation annexed to the ownership of property, not amounting to an interest in the properly, but an obligation which may be enforced against a transferee with notice or a gratuitous transferee."
20. What emerges from the above discussion is that notwithstanding the fact that an agreement for sale of an immovable property creates no interest in, or charge on, the property, it, at the same time, creates an obligation annexed to the ownership of the property and this obligation is specifically enforceable. Hence, the right under the con tract for sale of an immovable property can not be treated as a 'mere right to sue' within the meaning of Section 6(e) of the TP Act, for, a 'mere right to sue' will arise only in cases, wherein specific performance of a contract is not obtainable.
21. The question, which, now, poses itself for consideration is this : whether a contract for sale of an immovable property, which creates specifically enforceable right in favour of the promisee as well as promisor, can be assigned to a person who was not a party to the contract? While the specific performance of such a contract cannot be demanded by the promisee against a transferee for value without notice, an assignee of the promisee can very well demand specific performance of a contract, though the assignee was not a party to the contract. The reason for the conclusion, which we have so reached, is explained herein below.
22. Our quest for an answer to the question as to whether a contract for sale of immovable property can be specifically enforced by an assignee brings us to the provisions of Section 15 of the Specific Relief Act, 1963, which reads as follows :
"15. Who may obtain specific performance. - Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by-
(a) any party thereto;
(b) the representative 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 such party has already performed his part of the contract, or the performance thereof by his representative in interest, or his principal, has been accepted by the other party".
23. From a careful reading of the provisions of Section 15, it becomes abundantly clear that unless the terms of the contract for sale provide that the interest created therein shall not be assignable or unless the contract is of a personal nature, which involves 'the learning skill, solvency or any personal quality of such a person, the interest created in the contract shall be specifically enforceable by any party thereto or their representative-in-interest including the transferees and assignees from the contracting parties in whose favour the right exists.
24. While considering the above aspect of the matter, the reference may be made to the case of Shyam Singh v. Daryao Singh (dead) by L. Rs., , wherein the Supreme Court has held as follows :- (Para 10) "As is to be seen from the provisions specific performance of the contract may be obtained by 'any party thereto' or 'their representative in interest.' This expression clearly includes the transferees and assignees from the contracting party in whose favour the right exists. Such right of seeking specific performance would, however, be not available in terms of proviso below Clause (b) where "the contract provides that the 'interest shall not be assigned".
25. In short, though a contract for sale does not create any right in, or charge on, the property, the right derived under such a contract can be specifically enforced by not only the parties thereto, but also their representatives-in-interest and/or assignees.
26. The question as to whether a contract for sale of an immovable property is an actionable claim within the meaning of Section 3 of the TP Act or not was considered in Venkateswara v. Raman, reported in AIR 1917 Madras 358, wherein it was observed as follows :-
"A right to sue is no doubts involved in it on breach of its stipulations, but before breach there is also the right to have the land conveyed. A mere right to sue, in my opinion, is applicable only to eases where there has been a complete breach sounding in damages and where the specific enforcement of the contract cannot be obtained. I revert, therefore, to the question as to whether all assignments not covered by the provisions of the Transfer of Property Act are necessarily invalid....
...By Section 23(b) Specific Relief Act, specific performance of a contract may be obtained by the representative-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. This seems to me to contemplate clearly that all contracts capable or specific performance may be assigned except the prohibited class. Although the words used are "representative-in-interest," the subsequent use of the verb "assign" in the section points convulsively to an assignee being covered by the words "representative-in-interest." I, therefore, hold that there is nothing in the position of the plaintiff as assignee to prevent his enforcing the rights given by the karar of 1901. The second contention that the contract can only be enforced against the original covenanter is clearly untenable having regard to the provisions of the Specific Relief Act, if the defendant 1 fulfils the character defined by Section 27(b). That section provides that specific performance of a contract may be enforced against any person claiming under a party thereto by a title arising subsequent to the contract...."
27. We express our complete agreement with the statement of law, which was made in Venkateswara (AIR 1917 Madras 358) (supra), and hold that all contracts for sale of immovable property are specifically enforceable by assignees of the contracting parties except when the terms of the contract prohibits assigning or where the learning, skill, solvency or any personal quality of the party concerned is a material ingredient in the contract. We may, however, hasten to point out that Section 15(b) of the Specific Relief Act, 1963, has replaced Section 23(b) of the Specific Relief Act, which was considered in Venkateswara (supra).
28. We may also point out that the law laid down in Venkateswara (AIR 1917 Madras 358) (supra) was taken note of in Doraiswamy Mudaliar v. Thangavelu Mudaliar reported in AIR 1929 Madras 251, wherein it was held as follows :
"The ruling in Venkateswara Aiyar v. Raman Nambudri (AIR 1917 Madras 358), which the learned Judge quotes, is, as correctly quoted by him to the opposite effect, viz., "that the term a "mere right to sue" is only applicable where the specific enforcement of the contract cannot be obtained."
We can hardly conceive that the learned Judge meant to lay down that the mere refusal, however often if may be repeated, by the party to perform a contract or a mere denial of the existence of the contract deprives that other party of the right to sue for specific performance. It is that very refusal or denial which gives the other party his cause of action for a suit for specific performance. The learned Judge does not hold that a right to specific performance is not a transferable right. Section 23(6), Specific Relief Act, makes it clear that such a right is transferable. Plaintiff, therefore, has the rights of his transfer, viz., the right to sue, within the time allowed by law, for specific performance, or for damages...." (See also Pannalal v. Ramnarayan reported in AIR 1971 Rajasthan 294.
29. In short, a 'mere right to sue is a right, which arises out of contract, which is not specifically enforceable, or a right, whose specific performance of contract cannot be obtained. Since a contract for sale of immovable property creates an obligation annexed to the ownership of the land and the obligation arising thereunder is specifically enforceable, such a right cannot be regarded as a mere right to sue, within the meaning of Section 6(e) of the TP Act, and such a right, in the light of the provisions of Section 15(b) of Specific Relief Act, is transferable and/or assignable. Logically, therefore, a person, who was not a party to a contract for sale of an immovable property, can demand specific performance of the contract if he is an assignee of the promisee provided that the contract does not prohibit assignment or the contract does not involve learning skill, solvency or any personal quality of the promisee a necessary ingredient of the contract.
30. What, thus, crystallizes from the discussion held above is that in the case at hand, the contract for sale, which the plaintiffs, supported by the defendant Nos. 5 and 6, claim to have been entered into between Haripada, on the one hand, and the defendant Nos. 5 and 6, on the other, was, if true, specifically enforceable by defendant Nos. 5 and 6 against Haripada, his representatives-in-interest and assignees, because the agreement, if true, did not prohibit assignment. Similarly, the transferee or assignee under the defendant Nos. 5 and 6, if the case of the plaintiffs and the defendant Nos. 5 and 6 is true, could have obtained specific performance of contract against Haripada, his representatives-in-interest and/or his assignees. Whether, as a matter of fact, an agreement as claimed by the plaintiffs was ever entered into by the parties aforementioned is a question, which we need not examine in this LPA if we agree and concur with the view expressed by the learned single Judge, in FA No. 11 of 1966 aforementioned, that the suit was not maintainable. For the reasons, so assigned, the learned single Judge observed and held as follows :-
"The suit of the plaintiffs, in my opinion, must founder (sic) on another purely legal footing. A reference to the plaint would show that nowhere it was pleaded that either the defendant Nos. 5 and 6 or their alleged successors, the two plaintiffs, had pleaded that they had always been ready and willing to perform the essential terms of the contract which were to be performed by them. AIR 1928 PC 208, Ardeshir v. Flora Sassoon, is an authority for the proposition that though so far as the Specific Relief Act, 1877, under the present suit was filed is concerned, there is no express statement that in a suit performance the averment of readiness and willingness on plaintiff's part up to the date of decree is a necessary as it was always in England, it seems invariably to have been recognized that the Indian and the English requirements in this matter are the same. Before the Parliament placed on the Statutes Book of India the Specific Relief Act of 1963 it had the advantage to go through the report of Law Commission. The relevant observations of the Law Commission read "It has been held by the Privy Council that in suit for specific performance, the plaintiff must show that all conditions precedent have been fulfilled and also alleged and (where the fact is traversed) proved a continuous readiness and willingness to perform the contract on his part, from the date of the contract to the time of the hearing. Though there is no express requirements to this effect in the Specific Relief Act. It has been held that failure to allege readiness and willingness will lead to a dismissal of the suit". In support of these observations the Law Commission invited attention to the aforementioned decision of the Privy Council in Ardeshir's case as also the decision of Patna High Court reported in AIR 1930 Pat 121, Madan Choudhury v. Kamaldhari. It is in the light of these observations of the Law Commission and the Privy Council and Patna High Court decisions that Clause (c) of Section 16 was adopted by the Parliament while framing the new Specific Relief Act. Therefore, there is no getting out of the point that unless the plaintiff claiming specific performance of a contract alleges and it traversed proves his readiness and willingness right from the date of the contract until the matter is settled in a Court, the specific performance of a contract cannot be enforced in his favour since very clearly the plaintiffs have neither pleaded their own readiness and willingness right through nor such readiness and willingness on the part of their predecessors-in-interest they cannot claim specific performance of the contract."
31. While considering the above aspect of the matter, it needs to be emphasized that it is well settled and is not in dispute before us that in terms of the provisions of Section of the Specific Relief Act, 1963, the plaintiff must plead and prove that he has always been ready and willing to perform his part of the essential terms of the contract. This apart, the plaintiff must prove that he has, at all stages, been, beginning from the date of the contract till the date of the hearing of the suit, ready and willing to perform his part of the essential terms of the contract. Laying down the law, in unambiguous words, in this regard, the Supreme Court, in Jugraj Singh v. Labh Singh, , observed, " Section 16 (c) of the Specific Relief Act. 1963 provides that the plaintiff must plead and prove that he has always been ready and willing to perform his part of the essential terms of the contract," The continuous readiness and willingness at all stages from the date of the agreement till the date of the hearing of the suit need to be proved. The substance of the matter and surrounding circumstances and the conduct of the plaintiff must be taken into consideration in adjudging readiness and willingness to perform the plaintiff's part of the contract.
The Privy Council in Ardeshir H. Mama v. Flora Sasoon, AIR 1928 PC 208 has held that in a suit for specific performance the averment of readiness and willingness on plaintiffs pan up to the date of the decree is necessary. This Court in Gomathinayagam Pillai v. Palaniswamy Nadar, quoting with approval Ardeshir case, had held as follows :
"But the respondent has claimed a decree for specific performance and it is for him to establish that he was, since the date of the contract, continuously ready and willing to perform his part of the contract. If he fails to do so, his claim for specific performance must fail."
(Emphasis is added)
32. One may also refer to the case of Abdul Khader Rowther v. V.P.K. Sara , wherein the Supreme Court has made, in no uncertain words, clear that in the absence of specific pleading that the plaintiffs are and were ready and willing to perform their part of the contract, a suit for specific performance of contract cannot succeed. The relevant observations made in Abdul Khader Rowther, (supra) may be quoted as follows (Para 11) :--
"...It is thus clear that this is a case where the plaintiff seeks specific performance of a contract stated to be evidenced by an allegedly sham document which did not come into effect. His plaint does not contain the requisite pleadings necessary to obtain a decree for specific performance. This equitable remedy recognised by the Specific Relief Act cannot be had on the basis of such pleadings and evidence.
33. In Ouseph Varghese v. Joseph Aley, , the Apex Court held thus, "...In a suit for specific performance it is incumbent on the plaintiff not only to set out agreement on the basis of which he sues in all its details, he must go further and plead that he has applied to the defendant specifically to perform the agreement pleaded by him but the defendant has not done so. He must further plead that he has been and is till ready and willing to specifically perform his part of the agreement. Neither in the plaint nor at any subsequent stage of the suit the plaintiff has taken those pleas. As observed by this Court in Prem Raj v. D.L.F. Housing and Construction (Private) Ltd. that it is well settled that in a suit for specific performance the plaintiff should allege that he is ready and willing to perform his part of the contract and in the absence of such an allegation the suit is not maintainable."
34. Explaining the law on the above subject, the Apex Court in P.D. Souza v. Shondrilo Naidu, , held, "It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstances of each case. No strait-jacket formula can be laid down in this behalf."
35. In Pukhraj D. Jain v. G. Gopala Krishna, , their Lordships of the Supreme Court reiterated the above position of law as follows (Para 6 of AIR) :
"...Therefore, not only should there be such an averment in the plaint but the surrounding circumstances must also indicate that the readiness and willingness continue from the date of contract till the hearing of the suit. It is well settled that equitable remedy of specific performance cannot be had on the basis of pleadings which do not contain averments of readiness and willingness of the plaintiff to perform his contract in Forms 47 & 48 CPC."
36. In another decision in Swarnam Ramchandranan (Smt) v. Aravacode Chakungal Jayapalan, , approving the decision in Nannapaneni Subayya Chowdary v. Garikapati Veeraya, AIR 1957 AP 307, the Apex Court held that in a suit for specific performance, the purchaser must show that he was ready and willing to fulfill the terms and agreement and that he had not abandoned the contract and that he had kept the contract subsisting. performance, the purchaser must show that he was ready and willing to fulfill the terms and agreement and that he had not abandoned the contract and that he had kept the contract subsisting.
37. In the present plaint, the plaintiffs have averred that the plaintiffs are ready and willing to pay the remaining purchase money of the said property to the defendants, but the defendants are not willing to sell the same to the plaintiffs. Nowhere in the plaint, as correctly noted by the learned single Judge, in First Appeal No. 11 of 19G6. the plaintiffs have staled that the plaintiffs were ready and willing to perform their part of the contract. This apart, the plaintiffs-appellants, we find, came into picture after the death of Haripada Ghosh. We, therefore, deem it necessary to scrutinize the statements made in the plaint as well as the joint written statement by the defendant Nos. 5 and 6. What we notice, on a microscopic reading of the plaint and also the written statement of these two defendants, is that it has, nowhere, been asserted in the plaint or the written statement aforementioned that the defendant Nos. 5 and 6 were ready and willing to perform their part of contract for purchase of the land in terms of the contract for sale, which they claim they had with Haripada Ghosh in respect of the suit property.
38. In the absence of any pleading that the defendant Nos. 5 and 6 were ready and willing to perform their part of contract, i.e. to pay the alleged balance amount of the money and get the sale deed executed, the suit, as correctly noted by the learned single Judge, was not maintainable in law.
39. As a matter of fact, to a pointed query made by this Court, Mr. B. Das, learned Senior counsel for the appellants, could not give any cogent and satisfactory explanation as to how, in the absence of the pleadings on record that the plaintiffs and, particularly, their predecessors-in-interest, namely, the defendant Nos. 5 and 6 were ready and willing to perform their part of contract, the suit could have been held to be maintainable. Considered thus, the suit was not maintainable and was, therefore, liable to be dismissed. We need not, therefore, enter into the discussion of the merit of the respective cases of the parties concerned.
40. Because of what have been discussed and pointed out above, we find no reason to interfere with the decision in the appeal.
41. In the result and for the foregoing reasons, this LPA fails and the same shall accordingly stand dismissed with costs.
42. Send back the LCRs.