ALI ROWTHER v. KOCHUPENNU — 1986 DIGILAW 133 (KER)

Judgment :- 1. This revision arises from an order in execution. A decree in a suit for specific performance is sought to be executed. 2. The facts are these: Plaintiff filed the suit O. S.21/80 to restrain the defendants in the suit from alienating the decree schedule property. When the plaintiff came to know of the fact that the property had already been sold, the suit was withdrawn and a fresh suit O. S.32 of 1980 was filed. In this suit, the plaintiff prayed for setting aside the sale deed executed by the defendants 1 to 3 in favour of the 4th defendant and for giving effect to the agreement which enabled the plaintiff to obtain a sale deed in his favour from defendants 1 to 3. 3. The suit was decreed. The sale deed in favour of the 4th defendant by defendants 1 to 3 was set aside. The court directed defendants 1 to 3 to execute a sale deed in favour of the plaintiff. This decree of the trial court was confirmed by the appellate court. 4. The 4th defendant-revision petitioner is taking up the position that even though the sale deed in his favour stands set aside and the other defendants are obliged to execute a sale deed, he has no obligation deliver possession of the property and that the execution court has no jurisdiction to order delivery of possession of the property. The execution court considered this question chapter and verse. It did not accept the contention raised by the 4th defendant. Ordered delivery of the property from the 4th defendant. The 4th defendant brings up for investigation the order, under the revisional jurisdiction of this court. 5. The learned counsel for the revision petitioner submits that the proposition that in a case where the decree for specific performance even if silent about the delivery of possession, the decree implicits itself a direction to the execution court to disgorge the possession of the judgment-debtor or the judgment-debtors as the case may be, and to deliver up possession to the decree holder is a principle not applicable to the decree that is being executed in this case and not binding to the 4th judgment-debtor. He elaborates his arguments by saying that in this case, the 4th defendant is not a contracting party and as such he has no obligation to deliver up possession of the property. He elaborates his arguments by saying that in this case, the 4th defendant is not a contracting party and as such he has no obligation to deliver up possession of the property. He says that the proposition that though the decree in a suit for specific performance does not specifically mandate delivery of possession by the judgment-debtor or judgment-debtors, the execution court should execute the decree by directing delivery of property to the decree-holder is confined only to the delivery of property from the possession of the contracting parties. The 4th defendant not being a contracting party, he cannot be compelled to deliver up the property to the decree holder pursuant to the decree directing defendants 1 to 3 alone to execute a sale deed who are obliged to perform the contract. 6. The learned counsel for the respondent submitted that the execution court is always bound to keep in mind the true intent of the decree for specific performance. He tells me that the principle behind allowing delivery of property to the decree holder in execution of a decree for specific performance where there is no clear direction in the decree to deliver up property, is applicable in this case also. The motivation behind this rule should guide the execution court in the present case also. He submits that by the decree, the sale deed in favour of the 4th defendant now stands cancelled. The 4th defendant is a party to the decree by which the decree-holder has earned the entitlement to obtain a sale deed in respect of the suit property. 7. In this case, I am bound to proceed on that basic fact that the 4th defendant is not a transferee who can claim the exemption contained in S.19(b) of the Specific Relief Act. The decree tells me that he is not a transferee for value who has paid his money in good faith and without notice of the original contract. There is absolutely nothing wrong in considering that the 4th defendant is bound by the liabilities and obligations of the decree to the same extent his vendors, namely defendants 1 to 3 are made liable by the decree. It is singularly significant that the 4th defendant is a party to the suit whose sale deed stands cancelled by the decree sought to be executed. It is singularly significant that the 4th defendant is a party to the suit whose sale deed stands cancelled by the decree sought to be executed. I have to decide this case taking in to account these important circumstances. 8. Now, I shall turn to the law on the matter. Fry in his book, Specific Performance of Contracts, clearly discerns the reason for asking strangers to the contract as parties to the suit for specific performance. He says: "A stranger to the contract may so mix himself up with it by setting up a claim to some benefit resulting from it, as to render himself liable In some cases where a portion of the relief claimed might affect the person in actual possession of the property, that person may properly be made a party to an action for the specific performance of the contract." 9. The important statutory provision that is relevant to the question is S.19 of the Specific Relief Act. I shall quote S.19(a) and (b). 19 Relief against parties and persons claiming under them by subsequent title. Except as otherwise provided by this chapter, specific performance of a contract may be enforced against (a) either party thereto; (b) any other 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 ana without notice of the original contract;". 10. To understand the true intendment, width and scope of the section, it is better to note the principle behind the provision. The rationale behind this provision seems to be that from the moment of the contract for sale of the land, the vendor in regard to the land becomes a trustee for the vendee. Every one coming in, by subsequent and representative title and every subsequent purchaser who cannot claim exemption under the exemption clause of S.19 becomes subject to the same equities as the party would be, to whom he succeeds, or from whom he purchased the property. I have to remember that the whole provision is an equitable remedy and the maxim of equity at the bottom of the provision is that equity regards as done what is agreed to be done. 11. Equity acts on the conscience of a person. I have to remember that the whole provision is an equitable remedy and the maxim of equity at the bottom of the provision is that equity regards as done what is agreed to be done. 11. Equity acts on the conscience of a person. What one has undertaken to do, binding his conscience, ought to be done and equity courts therefore look to the acts of the person bound by his conscience and interpret and construe them in such a way that they amount to what ought to be done. I may say that this maxim of equity bad its strong roots not only in the English legal system but also had well laid in the Indian legal system of the ancient time of Manu and Yagnavalkia. I shall quote West and Buhler Hindu Law page 14: "All points of law, which may be left undecided by the works mentioned, may be settled according to passages from the Smritis or Dharmasastras, or even from the Puranas. The latter have less authority than the former, and may be overruled by them. In case of a conflict between the rules of the Smritis either may be followed, as reasoning on principles of equity (yuktivichara) shall decide the solution." Yagnavalkia said where there is a conflict between Smritis, on principles of vyavahar, justice was supreme. Vide Yagnavalkia 2:21. 12. Chullavagga Vol. Vi. 49 records a case of specific performance which happened some four centuries before the Code of Manava. The case was before the Court of Lord Justices of Sravasti which was the capital of the Kingdom of Kosala. Sudaaa a rich merchant of the Capital wanted to purchase a garden which belonged to Prince Jeta. Suddata was a charitable man and desired to make a gift of a particular garden to Lord Buddha. He enquired from the Prince as to what price he would take for the garden. Prince demanded an unreasonable sum but Suddata said "accepted I have taken the garden at that price." The Prince refused to part with the property and the merchant sued for specific performance. The Royal Judges, Vcharika Mahamatta heard and decided the case decreeing specific performance against the Prince following the principles of Dharma. 13. Prince demanded an unreasonable sum but Suddata said "accepted I have taken the garden at that price." The Prince refused to part with the property and the merchant sued for specific performance. The Royal Judges, Vcharika Mahamatta heard and decided the case decreeing specific performance against the Prince following the principles of Dharma. 13. No doubt, this decision is recorded to illumine the practice of the theory that the principles of Dharma are above sovereign is also an object lesson to show that principles of the equitable jurisdiction of specific performance known to chancery courts alone in England were the law practised in ancient India, several centuries before Christ even during the time of Buddha. It is to be noted that the "merchant" wanted to buy the garden for the use of Buddha. 14. It has to be noted that the conception of law in Hindu jurisprudence owes its origin from the unswerving laws of the physical world. Dharma literally means "that which holds" that is "that which holds the universe the basic principles of the universe". Hence law was considered as supreme as even above sovereign in ancient India. 15. Now the law in India does not approve of a distinction between rules of law and equity as understood in English Law. But the basic fact is that most of the equitable principles followed by the English equity courts have been incorporated in various enactments in India. "The Indian Trusts Act of 1882 embodies in a concise form the whole structure of trusts built up by the equity courts in England. Another instance of an almost bodily transplantation of the doctrines of the English equity courts is to be found in the Specific Relief Act of 1877. In the greater part of the country it obtained its sway in the guise of equity, justice and good conscience the process continues to this day". Vide M.C. Setalvad Common Law in India. 16. The learned counsel for the revision petitioner submits that the question is covered by decisions reported in A.I.R. 1954 S.C.75 (Durga Prasad v Deen Chand) and A.I.R. 1982 S.C. 818 (Babu Lal v. M/s. Hazari Lal Kishori Lal). 17. Before discussing these two cases, I shall refer to the case reported in A.I.R. 1932 Allahabad 694 (Kali Charan v. Janak Deo). 17. Before discussing these two cases, I shall refer to the case reported in A.I.R. 1932 Allahabad 694 (Kali Charan v. Janak Deo). This case as well as the Supreme Court cases mainly deal with the proper form of the decree that has to be passed in a suit for specific performance. In A.I.R. 1932 Allahabad 694, Sulaiman, C. J. neatly tells us the principle. He says that in a suit for specific performance, if it is found that a person who has been made a party to the suit had with knowledge of the previous contract of sale, purchased the property, the purchase is voidable at the option of the prior promisee and the contract with him can be enforced specifically against the subsequent purchaser. It was held that in such a suit, the court should declare the second purchase null and void and cancel it and order the original promisor to carry out his contract by executing a sale deed in favour of the prior promisee. This case was considered by the Supreme Court in A.I.R. 1954 S.C. 75. The Supreme Court held that in a case where there is a subsequent sale after the contract, the title to the property can validly pass from the vendor and so will reside in the subsequent transferee. The sale to him is not void but only voidable at the option of the earlier contractor. This is precisely what was said by Sulaiman C.J. in A.I.R. 1932 Allahabad 694. But Sulaiman, C.J. is of opinion that the contract of sale can be enforced specifically against the vendor after cancellation of the subsequent sale. It means an enforcement of the contract of sale wholly and completely with all its incidental reliefs including delivery of possession. The Supreme Court holds the view that "as the title no longer rests in the vendor it would be illogical from a conveyancing point of view to compel him to convey to the plaintiff unless steps are taken to re-vest the title in him either by cancellation of the subsequent sale or by reconveyance from the subsequent purchaser to him." The Supreme Court further observed that there are no reported cases in which a re-conveyance to the vendor by the subsequent purchaser was ordered. Referring to the specific direction given by Sulaiman C.J. in the Allahabad case, the Supreme Court observed: "He directed cancellation of the subsequent sale and conveyance to the plaintiff by the vendor in accordance with the contract of sale of which the plaintiff sought specific performance. But though this sounds logical the objection to it is that it might bring in its train complications between the vendor and the subsequent purchaser. There may be covenants in the deed between them which it would be inequitable to disturb by cancellation of their deed. Accordingly, we do not think that is a desirable solution." It has to be noted that the Supreme Court did not say that the course adopted by Sulaiman C.J. in the Allahabad Case is wrong, in fact the principal point that the subsequent sale deed is only voidable, has been accepted, the course adopted by Sulaiman C.J. was found logical and said only that "it is not desirable", perhaps taking into account the plain peculiarities of the case. Certainly I should note that the Supreme Court has held that the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. This decision was followed in A.1 R.1982 S.C.818. 18. The learned counsel for the revision petitioner submitted that the principle that a contracting party who failed to perform the contract and was compelled by the court to execute a sale deed, is obliged to give possession of the property pursuant to the decree is on account of the statutory provision contained in S.55(1) of the Transfer of Property Act. S.55(1) of the Transfer of Property Act provides that the seller is bound to give, on being so required, the buyer or such person as he directs such possession of the property as its nature admits. Pointing out this provision, the counsel submits that this is an obligation which can be discharged by the vendor who has got real possession of the property. In this case, the revision petitioner has no obligation to execute a sale deed under the decree and so he is not bound by the provision, viz. S.55 (1) of the Transfer of Property Act. In this case, the revision petitioner has no obligation to execute a sale deed under the decree and so he is not bound by the provision, viz. S.55 (1) of the Transfer of Property Act. Hence the execution court cannot compel him to give delivery of possession. A careful examination of this submission is bound to give certain results. 19. I shall begin with an enquiry as to the status of the subsequent transferee in relation to the original promisee. S.91 of the Indian Trusts Act provides that where a person acquires property with notice that another person has entered into an existing contract affecting that property of which specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract. (emphasis added). True, S.91 of the Indian Trusts Act, does not make a subsequent purchaser with notice eo-nominee a trustee a trustee properly so called, but certainly fastens upon him with an obligation in the nature of a trust and obliges him to hold the property for the benefit of the prior contractor, if I may say so in the context of this case, the plaintiff. Of course, the obligation is "to the extent necessary to give effect to the contract." Though the promise of the vendor to sell the property does not confer an interest in presente in the property agreed to be sold and it is possible in law for the vendor to convey a title to the subsequent transferee, the title of the subsequent purchaser with notice of the prior agreement is subject to the obligation under S.91 of the Indian Trusts Act. He would certainly hold the property for the benefit of the latter to the extent necessary to give effect to the agreement of sale. S.40 of the Transfer of Property Act enjoins that where a third person is entitled to the benefit of an obligation arising out of a contract and annexed to the ownership of immoveable property, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby. True, the nature of the right is inchoate in character, a right in property arising from contract and the person agreeing to purchase the property thereunder does not acquire any interest in the property. True, the nature of the right is inchoate in character, a right in property arising from contract and the person agreeing to purchase the property thereunder does not acquire any interest in the property. S.54 of the Transfer of Property Act tells us that such a contract does not give rise to as in English Law any equitable estate in the immoveable property which is the subject matter of the agreement. But as I said earlier it definitely creates an obligation which is well recognised by S.91 of the Trusts Act. It no doubt makes the subsequent purchaser who has notice of prior contract a constructive trustee for the prior promisee. 20. The above referred provisions may not be of direct assistance to resolve the point raised by the learned counsel for the petitioner, since none of these provisions mandates a subsequent purchaser with notice of the contract to deliver up possession even if the decree does not specifically direct so. Nevertheless, the provisions referred above will be of considerable assistance to the execution court as to how the decree for specific performance should be executed against the subsequent purchaser, who is a party to the decree and when the sale deed has been cancelled by the decree. 21. It has to be remembered that no special form of a decree in a suit for specific performance is supplied by the Code of Civil Procedure. Then what is the execution court's obligation or duty in executing a decree in a suit for specific performance. The Supreme Court in A.I.R. 1986 S.C. 818 has quoted the observation in A.I.R. 1931 Patna 179 (Atal Behary v. Baroda Prasad) and observed that "the court when allowing the prayer for specific performance vests the executing court with all the powers which are required to give full effect to the decree for specific performance. By the decree for specific performance, the court sets out what it finds to be the real contract between the parties and declares that such a contract exists and it is for the executing court to do the rest." (emphasis added). By the decree for specific performance, the court sets out what it finds to be the real contract between the parties and declares that such a contract exists and it is for the executing court to do the rest." (emphasis added). The Patna High Court has gone to the extent of saying that a decree in a suit for specific performance is somewhat in the nature of a preliminary decree which cannot set out in the fullest detail all the different steps which are necessary to be taken for effecting the purpose of the decree, namely specific performance of the contract. The court has taken the view that the executing court is vested with authority to issue necessary directions. As I said earlier, this decision was referred to in A.I.R. 1982 S.C. 818. When the parties do not agree to perform the contract mutually, the intervention of the court is called for and the court should do all such things as the parties would have been bound to do had this been done without the intervention of the court. 22. The learned counsel for the revision petitioner placed very much reliance on the following observations of Misra, J. in A.I.R. 1982 S.C. 818. "Similarly, a case may be visualized where after the contract between the plaintiff and the defendant the property passed in possession of a third person A mere relief for specific performance of the contract of sale may not entitle the plaintiff to obtain possession as against the party in actual possession of the property. As against him, a decree for possession must be specifically claimed for such a person is not bound by the contract sought to be enforced." It has to be noted that the Supreme Court has used the words "property passed in possession of a third person" and "such a person is not bound by the contract sought to enforced." It is not said that that third person is a subsequent purchaser with notice, but emphasised the fact that "such a person" is not bound by the contract. This is important since the subsequent purchaser is always bound by the contract and the decree against his vendor. He is really in the position of a person just like the vendor who is bound by the decree. This is important since the subsequent purchaser is always bound by the contract and the decree against his vendor. He is really in the position of a person just like the vendor who is bound by the decree. The Supreme Court in this decision has made it clear that in a case where exclusive possession is with the contracting party, a decree for specific performance of the contract of sale without specifically providing for delivery of possession should give complete relief to the decree holder by ordering delivery of property. It is said to discharge the obligation under the decree against him completely, he is bound not only to execute the sale deed but also to put the property in possession of the decree-holder. I feel such an obligation is manifest in regard to a subsequent purchaser with notice of the contract of sale with his vendor, and who has been impleaded in the suit and whose sale deed has been set aside in the suit. 23. In Rukmini Devi v. Pawan Kumar (A.I.R. 1979 Patna 88), the Patna High Court has observed: "By virtue of the subsequent sale, title of the vendor (defendant No 1) passed on to defendant No. 2. Unless and until the title of the subsequent purchaser (defendant No. 2) is cancelled or declared void, the executing court cannot ask defendant No 2 (subsequent purchaser) to deliver possession of the property which he had validly purchased from the vendor (defendant No. 1). 24. In Kartick Chandra v. Dibakar Bhattacharjee (A.I.R.. 1952 Cal.362), R.P. Mookerjee and J.P Mitter, JJ. held that in a suit for specific performance of a contract for sale of land the right to recover possession springs out of the contract which is being specifically enforced and not as a result of the execution and completion of the conveyance. In that case there was no direction in the decree directing the defendant to give delivery of possession to the decree-holder. Nevertheless, Their Lordships held that the defendants were bound under the said decree to give delivery of possession to the plaintiff. In that case there was no direction in the decree directing the defendant to give delivery of possession to the decree-holder. Nevertheless, Their Lordships held that the defendants were bound under the said decree to give delivery of possession to the plaintiff. The reason is that suit being a suit for specific performance of a contract and one of the necessary incidents of the contract is an obligation on the part of the seller, when required by the buyer to give delivery of possession and such a suit having been decreed, the direction to give delivery of possession becomes a part of the decree and the executing court shall have power to take all steps to give full effect to the decree for specific performance. This decision has been referred to in A.I.R. 1982 S.C. 818. 25. I may also refer to the decision reported in A.I.R. 1972 S.C.1826 (Hungerford Investment Trust Ltd. v. Haridas Mundhra). Dealing with S.28(1) of the Specific Relief Act, 1963, the court observed: "The Specific Relief Act, 1963, is not an exhaustive enactment and under the law relating to specific relief a Court which passes a decree for specific performance retains control over the decree even after the decree bad been passed " 26. Further considering the plain peculiarities of the case, I am of the view that the direction in the decree cancelling the sale deed in favour of the 4th defendant implicits in itself an obligation on the part of the 4th defendant to deliver up possession of the property to the plaintiff and that obligation is incidental to the main relief granted and the executing court is bound to give effect to it by ordering delivery of the property from the 4th defendant. 27. I may make it clear that in view of the decisions reported in A.I.R. 1954 S.C. 75 and A.I.R. 1982 S.C. 818, the proper form of a decree in a specific performance suit is to direct the subsequent transferee to join in the conveyance so as to pass on the title in the plaintiff. Fry in his book on Specific Performance refers to Potter v. Sanders (6 Ha. Fry in his book on Specific Performance refers to Potter v. Sanders (6 Ha. 1), Daniels v. Davison (17 Ves 433), Holmes v. Powell (8 De G.M. & G. 572) and observes the practice thus: "Where S contracted with P for the sale to him of an estate and afterwards conveyed it to C., who, at the time of the conveyance had notice of P.'s contract; on a bill filed by P., against S., and C. for the enforcement of the contract between S. and P., Wigram V.C. decreed specific performance of the contract, ordered all necessary parties to convey the estate to P., and gave the plaintiff costs against both S. and C." 28. I feel that this is not a fit case where I should be persuaded by the forceful argument so attractively advanced by the learned counsel for the revision petitioner that the decree holders should be directed to seek their remedy by filing a separate suit for possession. There has been a languishing litigation dragged on practically for several years and it will be really a travesty of justice to ask the decree holders to file a separate suit for possession. I feel that it would be highly inequitable to leave the respondents to litigate a separate suit. The execution court has rightly negatived the contention raised by the revision petitioner. 29. The Supreme Court has held in Major S.S. Khanna v. Brg. F.J. Dillon (1964) 4 SCR 409 that the exercise of jurisdiction under S.115 C.P.C. by the High Court is discretionary and that court is not bound to interfere merely because the conditions in clauses (a), (b) or (c) of that section are satisfied. I feel that the order passed by the execution court is eminently a just order and this court hardly finds a rational justification to interfere with. C.R.P. is dismissed. No order as to costs.