Andhra Pradesh High Court - Amravati
Dr.K.Ananda Rao vs Andhra Evangelical Lutheran Church Amp ... on 3 December, 2019
Author: M. Satyanarayana Murthy
Bench: M. Satyanarayana Murthy
THE HON'BLE SRI JUSTICE M. SATYANARAYANA MURTHY
Appeal Suit No.1052 of 1997
JUDGMENT:
1. The plaintiff in O.S No.710 of 1989 on the file of Subordinate Judge, Guntur aggrieved by decree and judgment dated 18.06.1997, preferred this appeal, dissatisfied with grant of alternative relief for specific performance. The appellant/plaintiff filed suit for specific performance of contract of sale dated 29.11.1985 executed by first defendant/first respondent (hereinafter the parties will be referred as arrayed before trial court) represented by other respondents by directing first respondent to execute regular sale deed in favour of plaintiff, in case of respondents failure, the court to execute registered sale deed on behalf of respondents, alleging that first respondent is registered society duly registered under Societies Registration Act. Second respondent is its President and third respondent is Treasurer. First respondent being represented by respondent Nos.2 and 3 are authorized persons to deal with transactions of first respondent, respondents have passed resolution at different meetings, to alienate the properties of first respondent for the benefit, necessity, maintenance and management of first respondent, in fact, they have duly completed some of the transactions.
2. On 29.11.1985 1st defendant being represented by other defendants sold it's property to the plaintiff for it's benefit and necessity as per L.C.M.No.258/247 @ Rs.150/- Sq.Mts, to an extent of 1400 Sq.Mts, for total consideration of Rs.2,10,000/-, having received a sum of Rs.10,000/- on 17.08.1984, towards advance sale consideration, respondent Nos.2 and 3 executed a regular contract of 2 MSM, J as_1052_ 1997 sale in favour of plaintiff, agreeing that they shall obtain encumbrance certificate, urban land ceiling permission and Income Tax Clearance certificate and get the sale deed drafted by their advocate within two months from the date of contract and execute regular registered sale deed at the expenses of plaintiff, after receiving balance of sale consideration.
3. Though respondents got clear title, they did not execute registered sale deed, therefore, plaintiff was constrained to file suit for specific performance of contract of sale dated 29.11.1985.
4. The respondents denied all the material allegations, while admitting execution of contract, but raised several other contentions about competency of respondent Nos.2 and 3, to execute registered sale deed being trustees, prayed for dismissal of suit. During trial, on behalf of plaintiff, P.W.1 to P.W.6 were examined, marked Exs.A1 to A15 and for the defendants D.W.1 to 3 were examined, marked Exs.B1 to B20.
5. Upon hearing argument of both the counsel, trial court granted alternative relief of refund of sale consideration, while denying primary relief of specific performance of contract of sale.
6. The plaintiff being dissatisfied with grant of alternative relief, filed this appeal.
7. During pendency of appeal, appellant/plaintiff died and his L.Rs were brought on record as appellant Nos.2 to 5 vide order dated 10.04.2018 in I.A.No.3 of 2018.
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8. Based on the pleadings, the following issues are framed:
1. Whether the suit contract of sale was not concluded?
2. Whether the plaintiff is entitled for specific performance of suit contract of sale?
3. Whether the plaintiff is entitled for perpetual injunction?
4. To what relief?
9. The main contention of plaintiff is that, when suit is filed for specific performance and trial court believed execution of contract of sale, when plaintiff proved his readiness and willingness, trial court ought to have granted primary relief of specific performance, instead of granting alternative relief of refund of advance sale consideration, paid by the plaintiff. Therefore, there is no justification in denying primary relief of specific performance of contract, requested to set aside the decree and judgment, while granting primary relief of specific performance of contract.
10. During hearing, the learned counsel for the appellant/plaintiff, Sri K. Suresh Reddy, would contend that trial court though accepted execution of agreement of sale, duly passing of sale consideration, including readiness of the plaintiff, to perform his part of obligation, while disbelieving, plea set up by respondents, erroneously failed to grant primary relief of specific performance and the reason assigned by trial court for not granting primary relief is not supported by any justification. Therefore the decree and judgment of trial court in O.S.No.710 of 1989, to the extent of failure to grant primary relief of specific performance is illegal, requested to set aside the same.
11. Whereas, Sri Gopal Das, learned Counsel appearing for respondents/defendants contended that when first respondent is a 4 MSM, J as_1052_ 1997 Trust, registered under Societies Registration Act, consent of all the trustees is required to be obtained and they cannot delegate their power to transact with property to any one of the trustees, therefore, contract itself is hit by Section 11(2) of Specific Relief Act and placed reliance on Judgment of Apex Court in M/s.Shanti Vijay and Co., v Princess Fatima Fouzia and others1 and A.K.Lakshmipathy (Died) by Lr v.Rai Saheb Pannalal Hiralal Lahoti2. On the basis of principles laid down in the above two judgments, the relief granted by trial court is justifiable and there is no reason to interfere with decree and judgment, passed by trial court, granting alternative relief, exercising power under Section 22 of Specific Relief Act, requested to dismiss the appeal.
12. Considering rival contentions, perusing the material on record, the point that arises for consideration is:
Whether respondent Nos.1 to 3 can represent the other members of trust and transact with third parties for sale of immovable property of first respondent, if not the appellant is entitled for primary relief of specific performance of contract of sale dated 29.11.1985?
13. Undisputedly, first respondent is a Trust, registered under Societies Registration Act and consists of several members. Even according to allegations made in the plaint, trust members delegated power to respondent Nos.2 and 3, to deal with property which is subject matter of suit i.e. schedule property. Therefore, trial court granted decree and judgment for refund of advance sale consideration 1 AIR 1980 Supreme Court 17 2 2005 (5) ALD 658 5 MSM, J as_1052_ 1997 paid by appellant, exercising power under Section 22 of Specific Relief Act. At this stage, it is relevant to advert to Section 11 (2) of Specific Relief Act, which deals with contract made by a trustee in excess of his powers or in breach of trust cannot be specifically enforced. Therefore, in view of feter created by Section 11 (2) of Specific Relief Act, the trial court did not exercise its discretion to grant primary relief of specific performance, in view of specific bar contained under Section 11 (2) of Specific Relief Act. In any view of the matter, plaintiff is purchaser, whereas respondent Nos.1 to 3 are the vendors, who executed suit contract of sale/ Ex.A1. Admittedly, property belongs to first respondent Trust, respondent Nos.2 and 3 are only members of Trust, they are not entitled to deal with property. In the judgment of Apex Court in M/s.Shanti Vijay and Co., (1st cited supra) the Apex Court made it clear that:
The law governing the execution of Trusts is well settled. In the case of a private trust, where there are more trustees than one, all must joined in the execution of the trust. The concurrence of all is in general necessary in a transaction affecting the trust property, and a majority cannot bind the trust Estate. In order to bind the trust estate, the act must be the act of all. They constitute one body in the eye of law, and all must act together. It follows as a necessary corollary, that where there are several trustees, they must act unanimously in making a sale or a contract of sale, unless it is provided otherwise by the terms of the deed. In exercising the power of sale, as in the exercise of other powers, a trustee cannot therefore, properly delegate the performance of the acts which he ought personally perform. Although a trustee may listen to the opinions and wishes of others, he must exercise his own judgment. Thus a trustee for sale of property, cannot leave the whole conduct of the sale to his co- trustees. The reason for this is the settlor has entrusted the trust property and its management to all the trustees, and the beneficiaries are entitled to the benefit of their collective wisdom and experience. In the present case, as the High Court rightly observes there is no such clause in the trust deed authorizing the execution of trusts to be carried out not by all but by one or more or majority of the trustees. In the
6 MSM, J as_1052_ 1997 absence of such a specific provision, the general law envisaged in Section 48 of the Act would govern the rights of the parties. We are, accordingly, of the opinion that the alleged contracts of sale entered into by the four trustees were not binding and of no legal effect, and could not be enforced.
14. If the principle laid down in the above judgment is applied to the present facts of the case, the appellant purchased the property from respondent Nos.2 and 3 who are alleged members of Trust Board. In view of the judgment, other members of trust cannot delegate the power to deal with property, more particularly, to enter into contract of sale with third parties, while dealing with immovable property, unless trust authorizes such delegation. In any view of the matter, power under Section 11 (2) of Specific Relief Act, is sufficient to deny the relief, since other members of trust did not join in execution of agreement of sale/Ex.A1. By applying the principle laid down by Single Judge of High Court of Judicature at Hyderabad in A.K.Lakshmipathy (Died) by Lr (2nd cited supra), where the learned Single Judge while adverting to rights and liabilities of purchaser held that a plain reading of the above provision i.e. sub Section (2) of Section 11 of Specific Relief Act, would show that a contract made by a trustee in exercise of its power or in breach of trust cannot be specifically enforced through a court can always, in its discretion enforce the performance wholly or partly of a trust. This provision, however has to be read with relevant provisions of Indian Trusts Act, 1882, especially, Sections 47 and 48 of the said Act, which stipulate that unless and until the instrument of trust provides a trustee cannot delegate his duties to a co-trustee or to a stranger but the provision also treats appointment of attorney to do ministerial act as 7 MSM, J as_1052_ 1997 not amounting to delegation. But execution of sale deed is not a ministerial act to claim exemption from Sections 47 and 48 of Indian Trusts Act, 1882. Therefore, contract of sale marked as Ex.A1, cannot be enforced in the court of law against first respondent, though it was executed by respondent Nos. 2 and 3, representing members of Trust. Hence, the decree passed by Trial court, granting alternative relief of refund of advance sale consideration, exercising power under Section 22 of Specific Relief Act is in accordance with law and at the same time, declining to grant primary relief of Specific Performance of Contract is justifiable in the facts and circumstances of the case, in view of bar under Section 11 (2) of Specific Relief Act. Hence, I find no ground to interfere with decree and judgment in O.S.No.710 of 1989 dated 18.06.1997 passed by Subordinate Judge, Guntur and the same is hereby affirmed.
15. In the result, the appeal is dismissed, affirming the decree and judgment in O.S.No.710 of 1989 dated 18.06.1997 passed by Subordinate Judge, Guntur, granting alternative relief of refund of advance sale consideration. There shall be no order as to costs.
16. Consequently, miscellaneous petitions, pending if any, shall stand closed.
__________________________________________ JUSTICE M. SATYANARAYANA MURTHY Dated 03.12.2019 Rvk