BHARGAVA, J. - (1.) -
(2.) THIS is an appeal from the judgment and decree dated 16th August, 1963, of the Senior Civil Judge, Ajmer, dismissing the plaintiff's suit for specific performance of the contract for sale of a house. Briefly stated, the facts are that Ram Narayan, defendant No. 1, entered into an agreement in writing with the plaintiffs for the sale of his house bearing AMC No. 24412 situated in Ramganj Mohalla, Ajmer, and more particularly described in para 1 of the plaint. This house had already been sold by defendant No. 1 to Sheo Sahai defendant No. 2 on 3rd December, 1957, with the condition of re-conveying the house by Sheo Sahai within a period of six years on payment of Rs. 6000 by Ramnarayan on the basis of a subsequent agreement dated 3. 3. 58 It was further stipulated between the plaintiffs and Ramnarayan in the subsequent agreement dated 2nd June, 1961 that Sheo Sahai would either join as a vendor in the deed of sale to be executed in favour of the plaintiffs or that Ramnarayan would first get the property transferred to himself from Sheo Sahai and then would transfer it to the plaintiffs under a registered sale-deed before 31st July, 1961. It was also agreed that the vendors and the vendee shall bear the expenses for the stamps and registration of the sale-deed in equal proportion. Plaintiff's case is that he paid Rs. 468 to defendant No. 1 on 9 6. 61 for the purchase of stamps for the two sale deeds - one, to be executed by defendant No. 1 in favour of the plaintiffs and the other by defendant No. 2 in favour of defendant No. 1 and actually the stamps were purchased and the sale deeds were also written on them but they were not completed because the executant did not sign them. Further a sum of Rs. 1000 was paid to defendant No. 1 towards the sale-price on 13. 6. 61. Defendant No. 1 however, did not execute any sale-deed in favour of the plaintiffs even though the plaintiffs at all times were ready and willing to perform their part of the contract. They also called upon defendant No. 2 by notice dated 14 6 61 to join the defendant No. 1 in executing the sale-deed in favour of the plaintiffs but he did not do so. It was, therefore, prayed that defendants Nos. 1 and 2 be ordered to execute a sale-deed in favour of the plaintiffs on payment of a sum of Rs, 6000 to defendant No. 2 and the balance of Rs. 4688 to defendant No. 1. The suit was contested by both the defendants. Defendant No. 1 admitted having entered into an agreement for the sale of the house with the plaintiffs on 2nd June, 1961, but his main plea was that the plaintiffs had also agreed to re-convey the said property if 12,000 rupees were paid to them within ten years by him. Since the plaintiffs were not prepared to execute an agreement for the reconveyance of the property the whole transaction fell through. Receipt of Rs. 1468 was also denied by the defendant. It was further stated that the suit for specific performance was not maintainable as the agreement was contingent one depending upon the will of defendant No. 2. Defendant No. 2 filed a written statement and his main plea was that being not a party to the agreement dated 2nd June, 1961, the suit for specific performance was not maintainable against him. Further, Ramnarayan defendant No. 1 had no right to enter into any agreement for the sale of the house until it was re-conveyed to him by defendant No. 2. On these pleadings, the learned Senior Civil Judge framed the following issues: (1) Whether the agreement to sell the house No. AMC 24/412 was for absolute sale or was with a condition to re-convey the property within 10 years to defendant No. 1? (2) Whether the plaintiffs paid Rs. 468 on 9. 6 61 for the purchase of stamps and Rs. 1000 on 13 6 61 to defendant No. 1? (3) Whether out of Rs. 1568 paid by the plaintiffs to defendant No. 1 a sum of Rs. 1312 was to be adjusted towards the sum of Rs. 12000 the sale price? (4) Whether the defendants got scribed the two documents as mentioned in para 3 of the plaint? (5) Whether defendant No. 1 has no right to enter into any agreement for sale of property? (6) Whether there is no privity of contract between the plaintiffs and defendant No. 2? (7) Whether the plaintiffs are entitled to claim specific performance? In support of the issues, plaintiff Pannalal gave his own statement as P. W. 1 and examined Shrikishen P. W. 2, James P. W. 3 Roopnarain P. W. 4, Madanmohan Singh PW. 5, Lachmandas P. W. 6, Gaffar Khan P. W. 7, Khajan-singh PW. 8, Balulal P. W. 9, and Sohanlal P. W. 10. In rebuttal, the defendants Ramnarayan and Sheo Sahai gave their statements as D. W. 1 and D. W. 1 (i) and examined Chandrakishore D. W. 2, Somdutta D. W. 3, Mamchand D W. 4 and Aditya D. W. 5. It may also be mentioned here that Ramnarayan also had filed two other suits against the plaintiffs (1) for the return of the agreement dated 3rd March, 1958, executed by Sheo Sahai in his favour and (2) another suit for the return of Rs. 468 as damages for the price of non-judicial stamps purchased by him which he had delivered to Pannalal who did not return it in time to claim its refund. All these suits were consolidated with the present suit. The learned Judge below found that there was no agreement by the plaintiffs to reconvey the property within ten years to defendant No, 1. He further found that payment of Rs. 468 on 9th June, 1961, for the purchase of stamps by the plaintiffs to defendant No 1 was proved but payment of Rs. 1000 on 13th June, 1961, was not proved He further found that two sale-deeds were got written by defendant No 1 and that the plaintiffs were not liable for the refund of this amount to defendant No. 1. Issue No 5 was decided against the plaintiffs and the learned Judge held that Ramnarayan had no title in the suit house on 2nd June, 1962. He had only an expectancy of the conveyance if he paid Rs. 6000 to Sheo Sahai within the stipulated period of six years. The contract between the plaintiffs and Ram Narayan was only a contingent one and was therefore not enforceable. Issue No. 6 was also decided against the plaintiffs and it was held that there was no privity of contract between them and defendant No. 2. In view of the court's finding on issues Nos. 5 and 6 plaintiff's suit was dismissed. Defendant No. l's suit for the recovery of Rs. 468 as damages was also dismissed but the other suit for the return of the agreement dated 3rd March, 1958, was decreed and the plaintiffs were directed to deliver their document to defendant No. 1. Being aggrieved by this judgment, plaintiffs have preferred an appeal while cross-objections have been filed on behalf of Sheo Sahai which only relate to the disallowing of costs to him by the lower court. On behalf of the appellants, it is contended that virtually the agreement dated 2nd June, 1961, for the sale of the house by Ramnarayan was an assignment of his interest to repurchase the property from Sheo Sahai and the plaintiffs being representatives-in-interest were competent to enforce their right in a suit for specific performance against both the defendants. It is pointed out that till 2nd June, 1961. Ramnarayan could exercise his option of re-purchasing property from Sheo Sahai on payment of Rs 6000 on the basis of the agreement dated 3rd March, 1958. The plaintiffs being the representatives-in-interest of Ramnarayan also called upon Sheo Sahai on 14th June, 1961, to join defendant No. 1 in executing the sale-deed on receipt of Rs. 6000 but he declined to do so. In the present suit as well, they have alleged that Rs. 6000 be paid to defendant No. 2 and the balance of the purchase price to defendant No. 1, and both may be directed to execute the sale-deed in their favour. It is also contended that the finding of the lower court that Rs. 1000 were not paid by the plaintiffs to defendant No. 1 is also erroneous and there is no reason why plaintiff's own statement and that of his witnesses be not believed in that behalf. There is no doubt that having purchased the house from Ramnarayan on 3rd December, 1957, Sheo Sahai by his agreement dated 3rd March, 1958, had agreed to re-convey the same to Ramnarayan provided he paid Rs. 6000 to him within a period of six years that is up to 3rd December, 1963, On the basis of this agreement, Ramnarayan had the benefit of exercising the option of re-purchasing the property on payment of Rs 6000 within the stipulated time. The question is whether Ramnarayan could assign his right of repurchasing the property to the plaintiffs and whether he can be deemed to have done so by entering into an agreement with them on 2nd June. 1961, vide Ex. 2. In Venkateswara vs. Raman (1) it was held that all contracts capable of specific performance are assignable except those of the class prohibited by S. 23 of the Specific Relief Act. In Nunuswami Naydu v. Sagalaguna Nayudu (2) it was held that: "a right under an executory contract to exercise an option at a certain future date to obtain a reconveyance of immovable property at a certain price is assignable. " It was further held per Ramesam J. that "such a transaction does not offend the rule against perpetuities as it does not create an interest in land in India, whatever the rule in England may be. " The learned Judge further observed that - "under sec. 54 of the Transfer of Property Act an agreement to sell, by itself, cannot create an interest in land, much less can an option even if it is made irrevocable by reason of a contract. But I do not see why the interest under the contract is not assignable as a right ex-contract if not as a right in rem. " In this case, the facts were that on 28th January, 1891 Venkatasubrahmanya Ayyar, on behalf of himself and his minor son Krishnaswami Ayyar, sold the village of Siyatti to Venkatappthi Nayudu for a consideration of Rs. 10,000. On the same day, the parties executed a counter part document by which the purchaser agreed to reconvey the village for the same consideration of Rs. 10,000 if the vendor made an application for that purpose in the month of May 30 years later. Venkata Subrahmany Ayyar died in 1899 leaving Krishnaswami Ayyar, his only son, surviving him. Krishnaswami Ayyar assigned his interest under the counterpart agreement to the plaintiff for a consideration of Rs. 19,200 out of which Rs. 10,000 were to be paid to get a reconveyance according to the terms of that document. The suit was dismissed by the trial court but the High Court decreed the suit. An appeal was taken against this judgment to the Privy Council and this case is reported as Sukalaguna vs. Munuswami (3 ). Their Lordships observed with regard to the counterpart agreement that - "all the elements necessary to constitute a contract were present There was an undertaking on the part of Venkatapathi to reconvey the village to Venkatasubrahmanya and Krishnaswami in the event of their calling for a conveyance at the time and upon the terms set out in the "counterpart document". The time at which the option was to be exercised and the price which was to be paid for the property were specified. There was consideration for the contract because Venkatapathi, by the sale of 27th January, 1891, obtained possession of the property, and Venkatasubran-manya received Rs. 10,000 besides acquiring the right and benefit of getting back the village upon the conditions specified in the 'counterpart document'. Their Lordships, therefore, concur with the conclusion of the learned Judges of the High Court on this question. They are also of the opinion that it was not intended that the option could be exercised only by Venkatasubrahmanya and Krishnasami personally. The terms of the contract and the time at which the option was to be exercised go to show that the intention was that the option might be exercised by the above mentioned two persons or their heirs. It was not disputed that if the transaction of 27th January 1891 amounted to a completed contract as their Lordships have decided the benefit of the contract could be assigned. " This decision is, therefore, a clear authority for the view that the agreement dated 3rd March 1958, between Sheo Sahai and Ramnarayan was a completed contract and that its benefit could also be assigned.
(3.) THE same view was held in Sinnakaruppa vs. Karuppuswami (4), the Court holding that such a contract for reconveyance of the property was binding on the parties and that such an option becomes assignable and an assignee of the vendor will be entitled to claim specific performance unless the contract itself prohibits the assignment, or it has been stipulated therein that the benefit of repurchase could be claimed only by the vendor or by any particular person specified therein. The Bombay High Court also in Vishweshwar vs. Durgappa (5) took the view and held that an option to repurchase property both under the common law as well as under sec. 23 (b) of the Specific Relief Act is prima facie assignable. In view of the above mentioned decisions, it can be safely held that Ramnarayan could assign the benefit of his option to repurchase the property from Sheo Sahai to the plaintiff. The next question is whether by executing the agreement dated 2nd June, 1961, the aforesaid right was assigned to the plaintiffs. By Ex. 2 Ramnarayan agreed to sell the disputed house to the plaintiffs for Rs. 10,000. It is stated in the agreement that the house was free from all encumbrances except that it had been sold by him earlier to Sheo Sahai who had also agreed to reconvey it to him on payment of Rs. 6000 within six years vide agreement dated 3rd March, 1958. No doubt Ex, 2, strictly speaking, is not an assignment of the benefit of the option to repurchase the property from Sheo Sahai, but virtually its object and purpose is the same because on the date of the agreement Ramnarayan had only an option to repurchase the property which he could assign. It is also clear that Ramnarayan had also handed over agreement dated 3rd March, 1958 which was executed by Sheo Sahai in his favour to the plaintiffs because he had also filed a suit as already stated for its return against the plaintiffs I am, therefore, of the view that Ex. 9 amounts to an assignment of Ram Narayan's right to repurchase the property from Sheo Sahai and as such the plaintiffs are his representatives in interest within the meaning of sec. 23 (a) of the Specific Relief Act. Under sec. 23 (a), specific performance of the contract may be obtained by any party thereto or his representative in interest and the appellants are, therefore, entitled to call upon both the respondents to specifically perform the contract because the exceptions mentioned in sec. 23 (b) do not apply to the present case. The agreement dated 3rd March, 1958, is not restricted to the enforcement of the right of repurchase to Ramnarayan personally His representative in interest can also enforce the rights in the same manner as he could have done it and it is not open to Sheo Sahai to plead that because there was no privity of contract between him and the appellants, no specific performance of the contract can be ordered against him. In Gulam Mohammad vs. Lakha Singh (6) where one Ghulam Mohammed had purchased at an auction sale square No. 70 from Government and had depo-sited the earnest money in the Government Treasury but had not the means to pay the balance of the purchase price which was to be paid in instalments, he entered into an agreement with Diwan Singh to sell the square in question to him as soon as the proprietary rights were conferred on him, Diwan Singh undertaking to pay to Ghulam Mohammed the amount which the latter had deposited in the treasury as earnest money and also to pay direct into the treasury the remaining instalments. In pursuance of this agreement, Diwan Singh was put in possession of the land. Diwan Singh paid some of the instalments, but before the entire amount had been paid, he on 18th February 1918, entered into a further agreement with Lakha Singh plaintiff to sell the land to him when ownership was conferred on Ghulam Moha-mmed in consideration of the plaintiff paying to Diwan Singh all that he had deposited into the treasury or paid to Ghulam Mohammad and agreeing to deposit the remaining instalments into the treasury. On a suit for specific performance of the contract by Lakha Singh against Ghulam Mohammad, the latter's plea that there was no privity of contract between him and the plaintiff was rejected, and it was held that the plaintiff was the representative in interest of Diwan Singh and had clearly a locus standi to maintain the suit. This decision applies with full force to the facts and circumstances of the present case. ;