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Judgment
Umamaheswaram, J.—This second appeal is brought by the Plaintiff as against the judgment and decree of the Subordinate Judge of Guntur in Appeal Suit No. 417 of 1948 reversing the judgment and decree of the District Munsif of Guntur in Original Suit No. 207 of 1947. The appellant herein filed a suit for specific performance of a contract, dated 16-11-46, entered into by the 1st Defendant agreeing to sell the plaint schedule property to him, for a declaration that the sale deed executed by the 1st Defendant in favour of the 2nd Defendant on 8-4-1947 was not binding upon him and for delivery of pessession of the property.
In the plaint he alleged that he purchased the stamp papers and was always ready and willing to perform the contract, but that the 1st Defendant put off the execution of the sale deed on some false pretext or other. Having learnt that a sale deed was executed in favour of the 2nd Defendant by the 1st Defendant with false recitals about the existence of an alleged earlier agreement dated 25-8-1946, the present suit was instituted for specific performance and other incidental reliefs.
The 1st Defendant was ex parte and did not file any written statement. The 2nd Defendant contended that the suit agreement was not true, that the 1st Defendant took an advance of Rs. 800/-from him and executed an agreement of sale dated 25-8-1946, that the sale deed dated 8-4-1947 was executed in his favour in pursuance of the agreement of sale and that the suit was consequently not maintainable. In paragraph 7 of the written statement, he badly denied the Plaintiff''s willingness to perform the contract. The two main issues that were raised in the trial Court were as follows:
Whether the contract of sale dated 16-11-1946 in favour of the Plaintiff is true, supported by consideration and binding on the 2nd Defendant?
Whether the contract of sale dated 25-8-1946 in favour of the 2nd Defendant is true, supported by consideration and binding on the Plaintiff?
The District Munsif in a careful and well considered judgment held that the contract of sale executed in favour of the Plaintiff and marked as Ex. A-1 was true and that
with a view to defeat this contract of sale, Ex. B-2 was brought into existence subsequently'' lay the Defendants in collusion by ante-dating it.
On those findings, he decreed the suit with costs directing mesne profits to be determined in separate proceedings under Order 20, Rule 12, Code of Civil Procedure
The 2nd Defendant preferred Appeal Suit No. 417 of 1948 in the Court of the Subordinate Judge of Guntur. The Subordinate Judge raised three points for decision in the appeal, which run as follows:
Whether the contract in favour of the Plaintiff is true?
Whether the contract in favour of the 2nd Defendant is true as contended by 2nd Defendant or ante-dated as contended by the Plaintiff?
Whether the Plaintiff is entitled to specific performance?
On point 1, he held that the contract Ex. A-1 was true and that he saw no substance in the suggestion that the contract Ex. A-1 was ante-dated. He found on point 2 that Ex. B-2 was ante-dated. In paragraph 18 he held as follows:
The 2nd Defendant and the Plaintiff are admittedly enemies. I see no improbability of 2nd Defendant asking the 1st Defendant to agree to ante-dating it, so that he may get an advantage over the Plaintiff.
Having confirmed the findings of the District Munsif on issues 1 and 2, the learned Subordinate Judge ought to have dismissed the appeal. But point No. 3 was raised as arising for determination apparently by reason of the appellant raising ground No. 12 in the memorandum of appeal, namely, that the Plaintiff had to show that he was always ready and willing to perform his part of the contract, and that he admittedly repudiated his own contract. The Subordinate Judge held on this new point in paragraphs 24 and 26 of his judgment, that as the Plaintiff himself, repudiated the contract, he was not entitled to specific performance under law and consequently, allowed the appeal with costs.
As against the judgment and decree of the (Prl) Subordinate Judge, the Plaintiff has preferred the above second appeal. The learned Advocate for the appellant contended that the Subordinate Judge erred in permitting the 2nd Defendant to raise a new point for determination, which was not to be found in the pleadings or in the issues and also in holding that the Plaintiff repudiated the contract. I agree that both the contentions are valid in law and that the second appeal should be allowed and the judgment of the trial Court restored.
As stated supra, the 1st Defendant who entered into a contract of sale dated 16-11-1946, Ex. A-1, with the Plaintiff was ex parte and did not file any written statement. The 2nd Defendant who denied the genuineness of Ex. A-l and relied upon Ex. B-1, found to be ante-dated by both the Courts below, did not plead that even if Ex. A-l was true, it was repudiated by the Plaintiff and was no longer subsisting. The only allegation to be found in the written statement as having any bearing on this question was that the Plaintiff was not willing to perform the contract. No issue was raised in the trial Court whether the Plaintiff repudiated the contract dated 16-11-1946 on the ground that the 1st Defendant refused to obtain his brother''s (Rathayya''s) signature to the sale deed. In the absence of any special pleading on the question of repudiation and an issue thereon, the lower appellate Court erred in raising point No. 3 for determination and dismissing the suit for specific performance on that new ground. It is well settled that parties ought not to be permitted to raise new points not covered by the pleadings or the issues. In - ''Eshan Chunder Singh v. Shama Chum Brutto'' 11 Moo Ind App 7 at p. 20 (PC) (A), Lord Westbury described it as an absolute necessity that the determination of a cause shall be founded upon a case to be found in the pleadings, or involved in or consistent with the case thereby made. And this decision was followed by Sir Lionel Leach who delivered the judgment of the Judicial. Committee in - ''Kanda v. Waghu'' AIR 1950 PC 68 (B). In this connection, it may be pertinent to quote the observations of Viscount Dunedin in - AIR 1930 57 (Privy Council) (1):
...but that claim was never made in the defence presented, and the learned Judicial Commissioners therefore very truly found that no amount of evidence can be looked into upon a plea which was never put forward.
In - ''Lala Hemchand v. Pearey Lal AIR 1942 PC 64 66 (D), Sir Madhavan Nair in delivering the judgment of the Judicial Committee has condemned the practice of allowing parties to adduce evidence on points not raised in the pleadings in the following terms:
Their Lordships desire to observe that, though the case has been decided on all the points which arose on the evidence led by the parties, the procedure adopted by the trial Court of allowing the parties to adduce evidence on points not raised in the pleadings or issues was irregular and should not have been allowed without amending the pleadings and raising necessary issues.
So in the present case, the lower appellate Court was wrong in reversing the judgment of the trial Court on the question of repudiation without the pleadings being amended and the necessary issues being raised.
The next question that arises for consideration is, whether even assuming that it was open to the Subordiate Judge to permit a new point to be raised, the evidence on record is sufficient to sustain that finding. The whole reasoning of the Subordinate Judge on the question of repudiation rests upon certain admissions alleged to have been made by the Plaintiff in the course of his deposition, and I shall, therefore, set out these passages in extenso. They are as follows:
As Defendants are friends and as I asked Defendant 1 and his brother Rathayya both to execute sale deed and as Defendant 1 was not amenable to it, he joined with Defendant 2 and brought into existence his sale deed. The property was purchased alter Defendant 1 and Rathayya divided. I asked Defendant 1 in whose name it was and he said he alone purchased. I was advised that it was better to make Rathayya also to join in it. Ramakrishtayya divided 20 years ago abd Defendant 1 and Rathayya were together.
From the above passages the Subordinate Judge inferred that the Plaintiff insisted upon Rathayya executing the sale deed along with the 1st Defendant, which he was not entitled to, and that the 1st Defendant was consequently justified in refusing to execute a sale deed and repudiating the contract altogether. A reading of paragraphs 24 to 26 of the judgment makes it abundantly clear that the Subordinate Judge was pot clear in his mind as to who repudiated the contract of sale. In paragraph 24 he states:
I think that the demand by the Plaintiff entitles the 1st Defendant to repudiate the contract of sale Ex. A-1.
But in paragraph 26 he concluded by saying:
I find that, as the Plaintiff repudiated the contract he is not entitled to specific performance under law.
So the simple question is whether, from the reading of the deposition of the Plaintiff, it is clear that he repudiated the contract of sale Ex. A-1 as found by the learned Subordinate Judge.
I have no doubt that there is no evidence or admission that the Plaintiff repudiated or put an end to contract of sale, as the 1st Defendant had refused to obtain the signature of his brother Rathayya to the sale deed, or that the 1st Defendant repudiated the contract of sale by reason of the Plaintiff insisting upon the signature of Rathayya being obtained contrary to the terms of Ex. A-1. Out of abundant caution, the Plaintiff might have requested the 1st Defendant to obtain the signature of his brother to the sale deed. But that does not lead me to the conclusion that he refused to obtain a sale deed as per the terms of the contract Ex. A-1, or that by reason of such a request on the part of the Plaintiff, the 1st Defendant repudiated the contract. Exhibits A-2, A-5 and A-6 show that the Plaintiff purchased the necessary stamp papers and was ready throughout to perform his part of the contract by paying the sale consideration. It was only the 1st Defendant who colluded with the 2nd Defendant and brought into existence Ex. B-2 and the sale deed, Ex. A-1. There is, therefore, no basis whatsoever for the conclusion that the Plaintiff repudiated the contract, as Rathayya was not willing to execute the sale deed along with the 1st Defendant.
There is also no evidence whatsoever that the 1st Defendant repudiated the contract on account of the Plaintiff unreasonably insisting upon Rathayya executing the document along with the 1st Defendant. As already stated, the 1st Defendant was ex parte. He did not file a written statement or enter the witness box and depose as to the circumstances under which he executed the sale deed in favour of the 2nd Defendant. The 2nd Defendant who was examined as D.W. 1 did not also depose that there was any repudiation by the Plaintiff or the 1st Defendant. I, therefore, hold that the 2nd Defendant has not made out that the contract of sale dated 16-11-1946 was repudiated and that the Plaintiff was not entitled to specific performance under law,
The learned Advocate for the respondent sought to sustain the judgment of the Subordinate Judge on the following grounds:
(i) that the insistence of the Plaintiff upon Rathayya joining in the execution of the sale deed amounted in law to repudiation of the contract;
(ii) that the discretion exercised by the appellate Court in refusing specific performance ought not to be disturbed by the High Court in second appeal;
(iii) that the finding of the Subordinate Judge on the question of repudiation was a finding of fact, not liable to be interfered with u/s 100, Code of Civil Procedure, and
(iv) that even though the question of repudiation was not raised in the pleadings or in the issues, the Subordinate Judge was entitled to take into account the admission of the Plaintiff in his evidence.
I shall discuss the contentions of the respondent in seriatim.
The main decision relied upon by the learned Advocate for the respondent in support of his first contention is the decision of the Privy Council in - ''Bindeshri Prasad v. Jairam Gir'', 9 All 705 (PC) (E). In that case the intending purchaser insisted on the vendor, giving an absolute warranty of title. Even in the suit for specific performance of the contract, he insisted upon the vendor giving the warranty of title, but when it appeared that the appellate Court was not willing to decree specific performance as prayed for in the plaint, he was willing to rest content with specific performance of the contract as actually proved. It was held by Sir R. Couch that Plaintiff was not entitled to specific performance. In delivering the judgment he, made the following observations:
Now there he distinctly claimed to have the contract performed by having this warranty of title and when he says that he was ready to have the contract completely performed, as far as he himself was concerned, it must be taken that he was ready to have it performed in that way.
So, it is clear that as the Plaintiff was insisting not upon the performance of the original contract, but upon a contract with an additional term as to the warranty of title, right up to the date of suit, he was not entitled to specific performance. In the last paragraph of the judgment, Sir B. Couch distinguished the cases where specific performance was decreed when the Plaintiff was willing to submit to have the agreement which was actually proved, performed.
The effect of Privy Council decision reported in - ''Bindeshri Prasad v. Jairam Gir (E)'', was recently considered by the Supreme Court in the case reported in - Lala Durga Prasad and Another Vs. Lala Deep Chand and Others, (F). The legal position is very neatly and forcibly summed up and is in the following terms:
As we have said, the question arose subsequent to the contract for sale and the Plaintiff''s insistence on the form of warranty at that stage could not affect the contract of 7-2-1942. It might in a given case disentitle him to specific performance as it did in - ''Bindeshri Prasad v. Jairam Gir (E)''. But that would depend upon whether the proposal regarding a form of warranty to which he was not entitled was a mere proposal regarding the form of the sale deed or was a refusal to perform without it.
No question of repudiation or refusal to perform was raised in the pleadings nor is that to be found in the evidence. On the contrary the Plaintiff''s letter dated 22-4-42 (Ex. 25) calls upon the Nawab to complete the conveyance ''as agreed to'' and the plaint is to the same effect; it says nothing about a warranty. In the circumstances, a dispute arising subsequent to the contract of sale about a particular clause in the deed during the negotiations about the form the deed should take, cannot affect the completeness of the contract already made, nor can it amount to repudiation when it is not persisted in and the Plaintiff later expresses his readiness and willingness to perform the contract ''agreed to''.
These observations of the Supreme Court Conclude the question arising for decision in this second appeal. The decision of the Supreme Court directly governs this case and is binding upon me. So far as the Court which was constituted on 5-7-1954 under Act 30 of 1953 is concerned, the only decisions which are of binding value are the decisions of the Supreme Court and a decision of a Division or Full Bench of this Court. No decision of this Court to the contrary has been referred'' to me. The decisions of other Courts including the Madras High Court, have only persuasive effect and will certainly be referred to with great respect in arriving at the correct legal principles, even thought they are not binding upon this Court.
The learned Advocate for the respondent drew my attention to a case of the Lahore High Court in - ''Narinjan v. Md. Yunus'' AIR 1932 Lah 26S (G). What was held in that case was that in order to obtain a relief by way of specific performance of a contract the Plaintiff has first to allege and prove that he was ever ready and willing to perform his part of the contract from the date of the-contract to the date of the suit as the contract-really was and not in the way he thought the contract to be. The Plaintiff in that case insisted upon the sale of the Kharcha which was not included in the original contract. The Lahore High Court-rightly held, following the decisions of the Privy Council in - ''Bindeshri Prasad v. Jairam Gir (E) and - ''Ardeshir H. Mama v. Flora Sassoon'' AIR 1928 PC 208 (H) that the Plaintiff was not entitled to specific performance as he insisted upon the sale of the Khancha in addition to the house. That decision has really no bearing on the facts of the present case. As already pointed out there is no evidence that the Plaintiff repudiated the contract of sale dated 16-11-1946 and insisted upon Rathayya joining the execution of the sale deed right-up to the date of the suit.
In this connection, it is necessary to refer to a decision relied on by the learned Advocate for the appellant in - AIR 1949 211 (Federal Court) (I). At p. 216, Mukherjea J. observed as follows:
If after a contract is concluded and its terms settled further negotiations are started with regard to new matters that would not prevent full effect being given to the contract already existing, unless it is established as a fact that the contract was rescinded or varied with the consent of both the parties or that both parties treated it as incomplete and inconclusive. Once completed, the contract can be got rid of only with the concurrence of both the parties.
Applying these observations to the facts of the present case it may be that out of abundant caution the Plaintiff started further negotiations with Rathayya, the brother of the 1st Defendant, that he should join in the execution of the sale deed. But that does not prevent full effect being given to the contract, Ex. A-1, dated 18-11-1946. The Defendants upon whom the burden of proof lay have not established as a fact that the contract Ex. A-1 was rescinded or varied with the consent of both the parties or that both the parties treated Ex. A-l as being incomplete or inconclusive.
The learned Advocate for the respondent no doubt cited passages from "Fry" on Specific Performance and Halsbury, Vol. VI, that the conduct of the Plaintiff may be taken into account fox-refusing specific performance. As already pointed out, there is nothing unreasonable in the conduct of the Plaintiff so as to disentitle him to the relief of specific performance. Mukherjea J. negatived a similar contention raised by Sri Tekchand based on the English decision in - ''Bristol Cardiff and Swansea Aerated Bread Co. v. Maggs (1890) 44 Ch D 616 (J), in the following terms:
An attempt was made by Sri Tekchand to raise a contention on the authority of the English decision - ''Bristol Cardiff and Swansea Aerated Bread Co. v. Maggs (J)'', where Kay J. went to the length of saying that if after a sale is concluded, one of the parties starts fresh negotiations with a view to introduce new terms, then, even if the subsequent negotiations fail, it will be inequitable to allow the party, who attempted to re-open the case, to enforce it specifically. This view seems manifestly unsound and has been expressly dissented from in later cases. Vide -''Bellamy v. Debenham'' (1890) 45 Ch D 481 (K) and - ''Perry v. Suffields Ltd. 1916-2 Ch 187 (L). As a matter of fact, the decision is based not on the ground of the contract being incomplete and not final, but on the ground of some equitable estoppel which was deemed to arise by reason of the conduct of the Plaintiff.... Here the new term sought to be introduced by the Plaintiffs'' Solicitor -was only done under a mistake, but it had no effect whatever in altering the conduct or position of the Defendants in any way.
Even in this case, there is nothing to show that by reason of the contract (conduct?) of the Plaintiff in insisting upon Rathayya joining the sale deed, any equitable estoppel arises. The position of the Defendant was in no way altered by such insistence.
16.The second contention raised by the learned advocate for the respondent has really no force. Section 22, Specific Relief Act, clearly lays down that the discretion exercised by the lower appellate Court is capable of correction by a Court of appeal in appropriate cases. Section 22 runs in the following terms:
The jurisdiction to decree specific performance is discretionary and the Court is not bound to grant such relief merely because it is lawful to do so. But the discretion of the Court is not arbitrary, but sound and reasonably guided by judicial principles and capable of correction by a Court of appeal.
In - S.V. Sankaralinga Nadar Vs. P.T.S. Ratnaswami Nadar and Others, (M) a similar contention was negatived in the following terms:
It was finally urged that as the relief is one by way of discretion, we should not interfere in appeal with the decree passed by the lower Court. Section 22 provides that the discretion is one to be exercised on ''judicial principles'' and capable of correction by a Court of appeal. When once it is found that the contract sought to be enforced is a valid one it is for the Defendant to establish legal grounds for refusing relief by way of specific performance.
So far as the 3rd contention is concerned, I have already held that the finding of the lower appellate Court is not based on any evidence and so the finding being unsustainable is liable to be set aside u/s 100, CPC The 4th contention has already been answered. The decision of the Privy Council reported in - ''Siddik Mahomed Shah v. Mt. Saran (C)'' is a direct authority, for the proposition that no amount of evidence can be looked into upon a plea which was never put forward. The alleged admission of the Plaintiff is also a piece of evidence, which according to the decisions already stated ought not to be looked into. Under the circumstances, I set aside the decision of the lower appellate Court and restore the judgment and. decree of the trial Court. The respondent will pay the costs of the appellant throughout. No leave.
After I delivered the above judgment, the matter was spoken to. It was agreed between the appellant''s advocate and 1st respondent''s advocate that there need not be any enquiry in regard to the mesne profits. The appellant shall deposit a sum of Rs. 2784/- due by him under Ex. A-l in. the Court within a month from to-day. The 1st Defendant-respondent shall be entitled to draw out the amount. No interest is payable by the appellant on the sale consideration and the 1st respondent is not liable to account for mesne profits. Both the 1st and 2nd respondents (1st and 2nd Defendants) shall execute a sale in favour of the appellant on payment of the consideration under Ex. A-1. If the sale deed is not so executed or possession not delivered the decree will be enforced in execution. After amount is deposited into Court by the appellant, the 1st Defendant will not only execute the sale deed, but also deliver possession. The 1st respondent is entitled to draw amount so deposited into Court after executing the sale deed and delivering possession.