Supreme Court: The present appeal was filed by the appellant, in a suit for specific performance of an agreement to sell certain immovable property, entered between Respondent 1 and the appellant, the three-Judges Bench of M.C. Mahajan, B.K. Mukherjea and B. Jagannadhadas*, JJ., stated that the actual evidence in the present case relating to the agreement was entirely oral and of a very flimsy character. The earlier mention of this arrangement was when it was put forward in the notice dated 29-5-1942 issued by the appellant. Meanwhile, Respondent 1 mortgaged the suit properties on 31-12-1940 and sold one item to Respondent 3 on 1-7-1941. There was no written protest about these transactions issued by the appellant to Respondent 1.
The Supreme Court stated that it was sufficient to say that on the provided evidence, it was not possible to find in favour of the appellant and to hold that the suit property was purchased by the Respondent 1 under a clear and definite agreement for reconveyance of which she could seek specific performance from the Court. The Trial Judge in accepting the oral evidence for the appellant, without adequate scrutiny, had been unduly carried away by the alleged background of circumstances which, if at all, were of remote relevancy on the direct issue in this case. Thus, the Supreme Court agreed with the conclusions arrived at by the High Court and dismissed the appeal with costs.
Background
In the present case, the agreement on which the suit was based, was not in writing but it was an oral arrangement between Respondent 1 and the appellant’s husband, on the appellant’s behalf, with her knowledge and in her presence. The suit properties belonged to the family of the appellant’s husband and fell to his share at a family partition in 1935. Under the said partition, the appellant’s husband undertook the payment of certain specified family debts. After the partition, the appellant’s husband raised money on a mortgage for Rs. 2600 from one Harinatha Ayyar for discharging the family debts which he had undertaken.
Thereafter, one Harinatha Ayyar filed a suit and obtained a final decree on 29-1-1940. During execution, the properties were brought to sale and were purchased by Respondent 1 on 7-10-1940 for a sum of Rs, 5000 and he took delivery of the same in December 1940. Subsequently, one item of the properties was sold by Respondent 1 to Respondent 3 for a sum of Rs. 400 on 1-7-1941 and the rest of the properties were sold to Respondent 2 for a sum of Rs. 13,500.
The appellant and her husband contended that when the mortgage decree was under execution and the property was about to be sold, they were anxious to retain the family property. Therefore, sometime before the actual sale, an arrangement was entered into between the appellant’s husband and Respondent 1, that Respondent 1 was to purchase the property at the court-auction, take possession and convey the same to the appellant on paying the price at which the Respondent 1 purchased in court sale with interest.
Appellant further contended that when the agreement arrived between them, as sum of Rs. 1500 was paid by her to Respondent 1, through her husband of which Rs. 500 was to be taken as advance towards the final consideration under the contemplated reconveyance and the other sum of Rs. 1000 was to be utilised for payment to one Krishnamurthi Ayyar. This sum of Rs. 1000 was said to be outside the consideration for the prospective sale. In the Trial Court, the suit was decreed against Respondents 1 and 2, but was dismissed against Respondent 3 on the ground that he was a bona fide purchaser without notice. Thereafter, on appeal by Respondents 1 and 2, the decree of the Trial Court was reversed and the appellant’s suit dismissed by the High Court. Hence, the present appeal was filed in the Supreme Court.
Analysis, Law, and Decision
The Supreme Court observed that the appellant’s husband’s family consisted of his father, the appellant himself, and four other brothers. Of these, one of the brothers was given away in adoption. The family-owned substantial properties consisting of lands and houses which were partitioned between them in the year 1935. After the partition, the father, and the two brothers, were adjudged insolvents on 2-3-1937 on a creditor’s petition. The shares allotted to the three insolvents became vested in the Official Receiver and the shares of the other two brothers were kept under the management of the Official Receiver with their consent.
After examination of material evidences, the Supreme Court noticed that somewhat unusual steps which one of the appellant’s brothers (‘PW 1’) took in getting the upset price reduced and the sale effected in one lot, might be some indication of his anxiety to get an accommodating purchaser who would be willing to give it back to him on easy terms. It might also be assumed that PW 1 was anxious to get as much of the property as possible into the hands of his family members or relations. All this, however, was very far from making out the agreement with Respondent 1. The Supreme Court scrutinised the oral evidence in the record and stated that there was nothing in this portion of the evidence indicating that either the appellant or anybody else was present at the time when the conversation took place between the appellant’s husband and Respondent 1 and when the money was paid. The agreement had not been reduced to writing and the payment of money was not vouched for by any receipt and no satisfactory reason for the same had been assigned.
The Supreme Court stated that the actual evidence in the present case relating to the agreement was entirely oral and of a very flimsy character. The earlier mention of this arrangement was when it was put forward in the notice dated 29-5-1942 issued by the appellant. Meanwhile Respondent 1 mortgaged the suit properties on 31-12-1940 and sold one item to Respondent 3 on 1-7-1941. There was no written protest about these transactions issued by the appellant to Respondent 1. The Supreme Court stated that there were quite a few other items of conduct on the part of PW 1 after the court auction purchase, which gave room for the comment that his conduct was not consistent with the existence of any such agreement as was pleaded.
The Supreme Court stated that why of all persons, Respondent 1 was the one to be trusted by PW 1 and the appellant, to honour this kind of oral agreement unsupported by any document and to admit the alleged payment of money unsupported by any voucher. The Supreme Court further stated that whatever the truth of the matter might have been, it was difficult and profitless to speculate upon.
The Supreme Court stated that it was sufficient to say that on the evidence given it was not possible to find in favour of the appellant’s case and to hold that the suit property was purchased by the Respondent 1 in court auction under a clear and definite agreement for reconveyance of which she could now seek specific performance from the court. The Trial Judge in accepting the oral evidence for the appellant, without adequate scrutiny, had been unduly carried away by the alleged background of circumstances which, if at all, were of remote relevancy on the direct issue in this case. Thus, the Supreme Court agreed with the conclusions arrived at by the High Court and dismissed the appeal with costs.
[Jagadambal Ammal v. Narayanaswami Ayyar, (1953) 2 SCC 257, decided on 05-10-1953]
*Judgment authored by- Justice B. Jagannadhadas
Advocates who appeared in this case :
For the Appellant: M. Natesan, Advocate;
For the Respondents: K.S. Krishnaswami Aiyangar, Senior Advocate (T.R. Balakrishna Iyer, Advocate with him)
*Note: Suit for Specific performance
Specific performance is an equitable remedy in the law of contract, wherein if the contract is breached by one party, the other party has the option to file a suit for specific performance compelling him to perform his part of contract. Section 14 of the Specific Relief Act, 1963 provides the contracts, that are not specifically enforceable. As per the provision, the following contracts cannot be specifically enforced, namely:— (a) where a party to the contract has obtained substituted performance of contract in accordance with section 20 of the Specific Relief Act, 1963; (b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and (d) a contract which is in its nature determinable.
