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Judgment
Mookerjee, J.—The Plaintiffs-Respondents brought the suit out of which the present appeal arises for certain reliefs, dependent primarily on the agreement, dated August 1, 1937 (Ex. 5). There was also an allegation that a certain sale which had taken place during the pendency of insolvency proceedings, and the purchase by the Defendant No. 8 Joychand Lal Goenka were for the benefit of the Karnani Defendants.
The learned Subordinate Judge found on the evidence that the purchase by the Defendant No. 8 was by him, and not for the benefit of anybody else. The story of benami purchase was not accepted.
The principal ground urged on behalf of the Defendants-Appellants is that after the finding that the purchase by the Defendant No. 8 was by him, the decree as passed in favour of the Plaintiffs is not maintainable in law. To appreciate the circumstances under which the agreement had been executed, it will be necessary to refer to some of the facts.
In passing, however, it may be pointed out, that the Plaintiffs-Respondents had filed a cross-objection in this Court purporting to be directed against the finding only, viz., the finding that Defendant No. 8 was not a benamdar for Defendants Appellants. Dr. Pal appearing on behalf of the Plaintiffs-Respondents intimated to us, that he would not press the cross-objection. Prima facie, the form in which the cross-objection had been filed, would not give any opportunity to the Plaintiffs to urge in this Court that the dismissal of the claim, so far as it was based on the allegation of the benami purchase, was not available to the Plaintiffs. It is not necessary for us to consider this point further, as the cross-objection is not pressed.
One Dhanbahadur had executed a mortgage in favour of Mull Chand Jetmull in March, 1930, of a property described as "D Marry Lodge" in the town of Kurseong. The mortgagee subsequently assigned his rights in favour of the predecessor-in-interest of the Karnani Defendants. An application was filed by Dhan Bahadur for being adjudicated as an insolvent. "D Marry Lodge" was included within the list of assets belonging to the applicant. Both the Plaintiffs and the Karnani Defendants figured in the list of creditors. On a question being raised as to whether the property" belonged to Dhan Bahadur or to his son Dal Bahadur in 1936, the District Judge held that the property belonged to the son and not to the insolvent. This matter was brought up to this Court. Ultimately, this Court set aside the order of the District Judge so far as the finding as to the ownership of the house was concerned, and left the question for decision at a later stage. An application which had been filed in 1935 u/s 4 of the Provincial Insolvency Act, was taken up after the disposal of the appeal in this Court. In these proceedings it was held that the property in question belonged to the insolvent. Directions were issued for the sale of the property by the Receiver-in-insolvency. On May 27, 1940, Defendant No. 8 Joy Chand Lal Goenka purchased the property for Rs. 2,700 subject to the mortgage to which reference has been made before.
During the pendency of these proceedings, an agreement was executed on August 1, 1937, between Jagannath Karnani and the Agarwallas. This was on August 1, 1937, before the decision of the High Court in the appeal or the decision of the District Judge in the proceedings initiated u/s 4 of the Provincial Insolvency Act. The parties wanted to settle their differences about the distribution of the assets, which were available to them out of the estate of the insolvent. The mortgagee, as a secured creditor, had certain advantages.
The different contingencies which were provided for, were four in number. The first contingency provided for was on the footing that the property in question was the property of the insolvent; if the Karnanis purchased the property in satisfaction of their mortgage dues, they would convey one-third share of that property to the Agarwallas within three months from the date of the purchase.
The second contingency referred to in the agreement was, that if the property were sold for the satisfaction of the mortgage dues and were purchased by a third party, the Agarwallas would be entitled to one-third share of the sale-proceeds.
Neither of the two contingencies above mentioned had happened subsequently.
The third contingency was, that the Karnanis would agree to sell the property under the mortgage in course of the said insolvency proceedings, free from the mortgage charge, retaining his claim on the sale-proceeds up to the amount due under the mortgage. If this were to happen, arrangements as between the two were mentioned.
This contingency also did not happen in the form in which it was indicated in the Agreement.
It is really the next contingency mentioned in the agreement on which reliance is placed, and it is necessary to quote that clause in the language in which it is actually put:
... but if for any reason other than his default the property is not sold in the insolvency proceedings the first party (Karnani) shall institute legal proceedings within six months from the date of the final decision of the court adjudicating on the question of the ownership of the properties now under dispute described in the schedule below to bring the property to sale and proceed with the said proceeding with due diligence and bring the property to sale and all the above terms and conditions noted above in this paragraph shall apply to such sale....
Both the parties concede, that the reference in this clause to the property not being sold in the course of the insolvency proceedings, referred to the specific contingency of a sale free from all the mortgage charges.
As already indicated, the insolvency court had directed on October 11, 1939, to put up to sale the property in question subject to the mortgage.
It is further stated by Mr. Gupta, appearing on behalf of the Karnani Defendants-Appellants, that on the happening of this contingency, it was the duty of the first party Karnani to institute legal proceedings within six months from the date of the final decision of the court adjudicating on the question of ownership of the properties, and to enforce the mortgage-charge to bring the property to sale.
It is also accepted by the Appellants that they had failed to act up to this stipulation made in the agreement. When the Karnani Defendants failed to institute proceedings to enforce the mortgage within the period of six months, there was a correspondence between the two contracting parties, and the Agarwallas attempted to make the Karnanis file a suit as stipulated in the agreement; see Exts. 4(c) and 4(e). The stipulations to which reference was made on behalf of the Karnanis about the sharing of costs were accepted by the Agarwallas. No suit was, however, actually filed by the assignees of the mortgage, and no steps were taken from April, 1942.
It was in July, 1942, that the present suit was filed by the Agarwalla-Plaintiffs. After making references to the facts slated above, the Plaintiffs made the following prayers:
(i) That the Defendants be directed to convey to the Plaintiffs 5 annas 3 pies share of the property in suit.
(ii) That accounts be taken of the income of the property from the date of the purchase, i.e., May 18, 1940, up to the date when the Plaintiffs are put in possession in terms of the first prayer.
(iii) That the court do direct specific performance of the contract, dated August 1, 1937, and grant the Plaintiffs "all such reliefs as they may be found entitled to under the said contract on the facts and circumstances which have happened or may arise hereafter and the Defendant No. 1 be directed to do and perform all such acts and deeds which he is bound to do under the said contract."
(iv) That a receiver be appointed to take charge of the mortgage bond, dated March 26, 1930, and the said receiver be directed to institute proceedings to enforce the mortgage, put up the property to sale free from the mortgage of Defendant No. 1 and "to adjust the right of the Plaintiffs in accordance with the terms of the said agreement".
(v) That if the court finds that the Plaintiffs are not entitled to specific performance of the contract or to any one of the reliefs mentioned above, they may be declared to be entitled to claim damages, and then a decree for Rs. 7,000 may be passed against Defendant No. It the Plaintiffs undertaking to pay additional court-fees as may be found necessary.
(vi) That a decree be passed in favour of the Plaintiffs in terms of the agreement aforesaid to reimburse them for the costs incurred by them to prosecute the insolvency case after a particular date and
(vii) Any other or further relief to which the Plaintiffs may be entitled.
So far as the prayers (i) and (ii) are concerned, it is unquestionable that such reliefs the Plaintiffs are not entitled to, inasmuch as the contingencies under which the Plaintiffs could insist upon a conveyance being executed in their favour have not happened. Moreover, the allegation of the purchase by Defendant No. 8 Joy Chand Lal Goenka being a benami one has failed, and is not questioned in this Court. That purchase was, no doubt, in terms of the conditions imposed by the insolvency court subject to the mortgage, dated March 26, 1930, but the plea put forward that because of the conduct of the Karnanis and Goenka, the separate existence of the mortgage has disappeared cannot be sustained.
So far as prayer (iii) is concerned, it is characterised as inapplicable under the present circumstances, and the learned subordinate judge also appears to have proceeded on that footing.
The prayer which has been allowed by the learned subordinate judge is prayer (iv), and that has been allowed in a modified form.
The principal point argued by Mr. Gupta on behalf of the Appellants is that as the other prayers have failed, no receiver can be appointed in a suit for specific performance of the contract, so that the receiver may bring a suit to enforce the mortgage.
Section 12 of the Specific Relief Act, 1877, specifies the cases in which specific performance of a contract is to be allowed by a court. Even though a penalty is annexed to secure due performance of the terms of the contract, while the general rule of Equity is that the very thing itself will not be specifically enforced, as indicated in Section 21 of the Act, we have to ascertain whether the contract in question falls within one or more of the categories mentioned in Section 21. If so, the court shall not specifically enforce the same.
It is also well settled that a contract cannot be specifically enforced if the contingency which is specified has not happened. It is not for the court to substitute one contract by another or to give effect to a part of the conditions agreed upon by the parties if such a part has no separate or independent existence under the agreement. See in this connection Narain Pattor v. Aukhoy Narain (1886) ILR 12 Cal. 152 and Sarbesh Chandra Basu v. Hari Doyal Singh (1010) 14 C.W.N. 451.
On behalf of the Defendants-Appellants, it cannot be, and it has not been, argued that the last of the contingencies has not -actually happened. The first party Karnani was bound to institute legal proceedings within six months from the date of the final decision of the court adjudicating the question of the ownership of the property, and to take further steps for bringing the property to sale. The Defendants-Appellants have refused to do their part of the contract. On behalf of the Appellants, it is contended that the prayers, as made by the Plaintiffs in the present suit are hit by Clauses (b) and (g) of Section 21 of the Specific Relief Act.
Clause (b) of Section 21 of the Specific Relief Act runs in the following terms:
The following contracts cannot be specifically enforced:
* * * *
(6) a contract which runs into such minute or numerous details, or which is so dependent on the personal qualification or volition of parties, or otherwise from its nature, is such, that the court cannot enforce specific performance of its material terms;
* * * *
It must be held that this part of the contract does not run into minute or numerous details. The contract requires the first party Karnani to file a suit within the limited period and bring the property to sale. The terms are quite simple. The first part of Clause (b) of Section 21 cannot be a bar in the present case. The details referred to in this part of the clause must be in the contract itself. It will not be sufficient to bar out a claim for specific performance, if the terms of the contract are simple. What would be the effect if, in specifically enforcing a contract, the procedure to be followed or the acts to be done, are such, that the court cannot conveniently do these acts? That would be considered under another portion of this clause, and not the first portion of this clause.
At one stage, it was faintly suggested that the present contract is unenforceable as its due performance is dependent upon the personal qualifications or volitions of the parties. This objection also cannot be sustained. There is no contract for any personal service. If there had been any such volition for rendering of personal services, or where the acts stipulated required special knowledge, skill, ability, experience, or the exercise of judgment, discretion, integrity, and like personal qualities-in short, whenever a performance, according to the spirit of the agreement, rests on the individual will and capacity of the contracting party, the court cannot direct specific performance of those duties for or on behalf of the contracting party. In some exceptional cases, no doubt, the courts have directed not the specific performance of the duties so imposed, but have ordered that the acts be done by the party concerned, and on his failure to do so, he be punished by fine, and in ore or two cases, even by imprisonment. But these are very exceptional cases to which we need not refer in greater detail. Pomeroy has dealt with this aspect of the powers and jurisdiction of a court exercising equitable authority in Section 314 at p. 633 of his treatise.
In the present case, nothing depends on the personal qualification of the first party Karnani. There is no doubt that to a certain extent there must be a volition of the party, but it is not such as would come within the mischief of the second part of Clause (b) of Section 21 of the Specific Relief Act.
The last portion of Clause (b), however, is in very general terms, and the court will not specifically enforce a contract, if from the nature of the contract, the court cannot enforce the specific performance of its material terms. The principle underlying this part of Clause (b) of Section 21 is that the court cannot stop its normal functions for the purpose of giving effect to the terms of a contract which cannot conveniently be supervised or be enforced by the court itself. The act which the court is called upon to perform is not to give effect to a decree adjudicating the rights of the parties through an officer of the court.
As for instance, a court will not enforce an agreement to form and carry on a partnership even though there is no particular objection on the ground of illegality, fraud or other impropriety. Scott v. Rayment (1868) 7 Equity 112. Some of the illustrations given under Clause (b) of Section 21 of the Specific Relief Act indicate that it is the impracticability of the court to supervise the details of certain acts which would preclude the court from taking upon itself the responsibility of performing the contract itself. Take, for instance, the seventh and eighth illustrations:
A lets land to B and B contracts to cultivate it in a particular manner for three years next after the date of the lease. A and B contract that in consideration of annual advances to be made by A, B will for three years next after the date of the contract grow particular crops on the land in his possession and deliver them to A when cut and ready for delivery.
These illustrations are based upon Rayner v. Stone (1762) 2 Eden 128 : 28 E.R. 846. It is impracticable for the court to supervise details of the act of cultivation, and so this is a contract which cannot be specifically enforced.
Similarly the court refuses to specifically enforce a contract for the construction of a building or for its repairs.
Generally speaking, in the case of contracts which involve prolonged watching over and supervision for its due performance, and if the contracts cannot be duly performed within a reasonable time, the court will not direct performance of such contracts through an officer of the court, far less by the court itself.
Let us now examine what are the duties, which are proposed to be cast in terms of the prayers made in the plaint, as also in the directions given in the decree itself, by the receiver who is to be appointed for this purpose. The duty which would be cast upon the receiver is bound to be a long-drawn affair, as it has in the present case turned out to be. The mortgage suit is still pending, after an order for remand made by this Court in Appeal from Original Decree No. 83 of 1947.
It was contended on behalf of the Appellants, as a general proposition of law, that it was not competent for a court while considering the prayer for specifically enforcing a contract, to appoint a receiver for the purpose of taking charge of a property for the purpose of giving relief to the parties as a part of the decree itself. It is not necessary for us to express any final opinion on this very general proposition, as on the facts of the present case, we are satisfied that the appointment of a receiver to discharge the duties, as required under the contract now before us, is impracticable and ought not to be allowed. No authority has been referred to, and we have not been able to find any on this specific point about the general proposition which was attempted to be laid down.
It is neither possible nor desirable for the court to ask an officer to be in charge of the mortgage suit, as in the absence of co-operation from one or other of the parties, it is very difficult, may be at one stage or another, impossible for a receiver to discharge satisfactorily the duties of prosecuting a suit of this nature. We must, therefore, hold that the direction about the appointment of a receiver by the learned subordinate judge was not proper in the facts of the present case.
The next question which we have to consider is whether the Plaintiffs are entitled to any other relief in the suit as framed. Prayers (V) and (vi) are wide enough, for the court to consider, what other reliefs the Plaintiffs are entitled to. The ordinary rule is that even when a party comes to court for having a contract specifically performed, if the court finds that on the facts and the circumstances, the contract should not be specifically performed, alternative relief by way of damages, if the Plaintiffs have suffered any, are available to the Plaintiffs. The court is competent to issue necessary directions for the assessment of the amount of damages and to award the same. It is not necessary to consider at this stage, whether under prayer (V) the Plaintiffs are limited to damages within the amount mentioned therein. That is a question which will have to be considered at the proper stage, when in terms of the directions to be issued by this Court, the lower court enters into the question as to the quantum, of damages which the Plaintiffs have suffered. It should, however, � be mentioned that this prayer which is prayer (e) in the plaint, is not a prayer which specifically refers to a particular provision of the contract, but is in general terms, and claims compensation for the non-performance of the terms of the agreement, in case the Plaintiffs are found not to be entitled to the specific performance of the contract or to any of the reliefs mentioned in the earlier prayers.
On the admitted facts that the Karnani Defendants had failed and neglected to fulfil one of the conditions, viz., to bring a suit within the stipulated time, and thereby acted prejudicially to the interests of the Plaintiffs, even if there had not been prayer (v) in the body of the plaint, the general prayer would have been sufficient to clothe the court with jurisdiction to give the parties relief in the form in which the law allows it. All the material facts on which the claim for damages is based are mentioned in the pleadings. The court is not only justified, but is bound to consider the alternative claim for damages. The quantum of damages, however, was not gone into by the learned subordinate judge. The parties also did not adduce relevant evidence on this point. The result, therefore, is that the judgment and decree passed by the learned Subordinate Judge are set aside, except with regard to the finding dismissing the Plaintiff''s case, about the alleged benami character of the purchase in the course of the insolvency proceedings by the Defendant No. 8 Joy Chand Lal Goenka. Both the parties will be allowed to adduce evidence on the question of quantum of damages. The court will also consider, whether the decree for damages as may be found reasonable and proper, is to be limited within the amount mentioned in prayer (e) to the plaint.
The learned subordinate judge will also consider issue No. 7, under which the court was called upon to consider the Plaintiffs'' claim for costs incurred in the insolvency proceedings from Defendant No. 1, and if so, to what extent. The learned subordinate judge, in the judgment now under appeal, had directed the receiver to calculate the amount and to submit a report as to how much of the costs will be recoverable, by which party, and in what manner. In view of our decision that the appointment of a receiver for the purpose of enforcing the mortgage, as directed by the learned subordinate judge, cannot stand, the directions given under issue No. 7 must be vacated. The learned subordinate judge himself will decide issue No. 7 on the materials already on the record.
Although we hold that the direction given in the decree for the appointment of a receiver cannot stand, that will not affect the suit which had been brought by the receiver appointed by this Court in Civil Rule No. 201F of 1945, arising out of the present appeal. The receiver will remain in office up to August 18, 1952, within which date the assignee of the mortgagee is to take the necessary steps, if any, for taking charge of the carriage of the suit. A formal order for the discharge of the receiver will be passed by this Court after the receiver files his final accounts, and that must be done by September 2, 1952.
In view of the facts of this case, the parties will bear their respective costs in the appeal in this Court.
The cross-objection filed on behalf of the Plaintiffs-Respondent has not been pressed, and is dismissed with costs to the Respondent No. 6 Joy Chand Lal Goenka (Defendant No. 8), the hearing fee being assessed at five gold mohurs.
It is stated before us that an application is proposed to be filed on behalf of the Plaintiffs in the present suit for amendment of prayer (e) to the plaint. We do not express any opinion as to how that application is to be dealt with by the learned subordinate judge, if such an application is at all filed.
Renupada Mukherjee, J.
I agree.