Mulji Thakarshi vs Kalyan Bechar and Others

Baxi, J.—This second appeal was referred to us by Chhatpar J. acting as a single Judge and involves the question of the legality of an agreement in writing dated 11-1-44 by which the Defendant No. 5 i.e., Respondent No. 2 agreed to sell a certain house in the village of Bhambhan in the Botad Taluka of the former Bhavnagar State to the Plaintiff-Respondent No. 1. The site on which the structures stood belonged to the State and it was agreed that the Respondent No. 2 should obtain a saleable title to it from the State after which he should execute a sale-deed in favour of the Plaintiff-Respondent No. 1 who was to pay all the expenses of obtaining the title from the State. Rs. 51/- were paid by him as earnest and he was put into possession of the house. On the same day, an application for sanctioning the sale was made to the Vasulati Adhikari of the Bhavnagar State. While the question of the sanction was pending decision, the Respondent No. 2 executed Anr. agreement dated 28-9-47 in favour of the Appellant-Defendant No. 1 and Respondents Nos. 3 to 5 by which he agreed to sell this very house to them. The Government sanction was received on 17-7-48 and on 26-7-48 the Respondent No. 2 executed a conveyance of the house in favour of the Appellant and Respondents Nos. 3 to 5. On 28-7-48, the Respondent No. 1 filed the present suit in the Court of the Civil Judge, Junior Division, Botad, against the Defendants praying for specific performance of the agreement dated 11-1-44 by which the Defendant No. 5 had agreed to sell the house to him and for damages. He alleged that the Defendants Nos. 1 to 4 were not bona fide purchasers and had notice of the prior agreement in his favour and therefore he was entitled to enforce the agreement against them also. The Defendants denied that the Plaintiff''s agreement was genuine. The Defendants Nos. 1 to 4 further contended that they were bona fide purchasers of the house without notice of the Plaintiff''s agreement and consequently he had no cause of action against them. The Defendant No. 5 contended that the suit was not maintainable upon the agreement because on the date of the agreement the vendor had no saleable title in the property (See para. 8 of written statement Ex. 4). The learned Civil Judge held that the Plaintiff''s agreement was proved, that he was put in possession of the house by the Defendant No. 5 under the agreement and that the Defendants Nos. 1 to 4 had purchased the house with notice of the agreement. He overruled the legal objection against the maintainability of the suit and passed a decree for specific performance of the agreement against the Defendants Nos. 1 to 4. In appeal the learned District Judge confirmed the findings and decree of the learned Civil Judge. The Defendant No. 1 has preferred this second appeal against the learned District Judge''s decree.

The Appellant''s learned Advocate urged that the agreement upon which the Plaintiff relied was void as it was forbidden by a local law of the former Bhavnagar State and no decree for specific performance of the agreement could be passed. This law is in the form of a Jaher Khabar dated Jeth Vad 7, Wednesday St. 1939 corresponding with 27-6-1883. It refers to the former rules of St. 1929 relating to the sales by the State of residential houses and lands appurtenant thereto in principal Taluka towns and villages and subsequent orders and enacts that in those Taluka towns and villages in which the abovementioned rules are in force, no sale or mortgage can be made of residential houses and shops belonging to the State and the land appurtenant thereto of which title has not been obtained from the State by the vendor or the mortgagor in accordance with those rules. Though, this Jaher Khabar forbids sales and mortgages there is nothing in it which prohibits agreements for the sale of the houses and lands to which it applies. Such agreements are perfectly good contracts and will be governed by the provisions of Section 18(a), Specific Relief Act under which if the vendor acquires a saleable title subsequent to the contract, the purchaser may compel him to make good the contract out of such title. We are, therefore, of opinion that the State having sanctioned the sale in 1948, it was the duty of the Respondent No. 2 to execute a conveyance of the house in pursuance of the Plaintiff''s agreement of which specific performance is sought. The Respondent No. 1 was put in possession of the house and the Appellant and his co-vendees had notice of the Plaintiff''s agreement. He can therefore have his agreement enforced against them.

The learned Advocate for the Appellants referred to my judgment in - ''Civil Second Appeal No. 47 of 1951 (Sau) (A)'' in which I held that such agreements were void and incapable of enforcement. I have explained in my judgment the reasons for coming to that conclusion. The Jaher Khabar was not shown to me and the parties had no other material upon which I could Judge the legality or otherwise of such agreements. The learned District Judge who is a very senior Judicial Officer of the Bhavnagar State had expressed himself against their legality and as they were governed by a special law of the Bhavnagar State I did not feel justified in differing from him. I am, however, satisfied on a careful perusal of the Jaher Khabar that the agreements to sell properties covered by the Jaher Khabar are not prohibited by it.

The learned Advocate for the Appellant argued that the Plaintiff-Respondent No. 1 took four years to file the suit and therefore the Court should have refused the decree on the ground of delay. The learned District Judge has discussed the question of laches fully. We may say that the laches if any have been due to the fact that title Appellant and his co-vendees themselves had raised objections against the sale to the Plaintiff-Respondent being sanctioned. If therefore there has been a delay the Appellant and his co-vendees are responsible for it.

The learned Advocate for the Respondent No, 1 had urged that the Jaher Khabar in question prohibited sales of houses etc. in those cases only where the house as well as the land belonged to the State and did Hot prohibit sales where, as in this case, the site alone and not the superstructures belonged to the State, and consequently the Jaher Khabar had no application. The argument is plausible but we find that both the parties have tried to obtain the sanction of the State. It was next urged that the sales of properties were prohibited only in those villages to which the rules of 1929 were applied and it is not shown that those rules were applied to the village of Bhambhan. The objection against the legality of the agreement as being in contravention of the Jaher Khabar was taken by the Defendant No. 5 in his written statement and has been made the subject of Issue No. 5. The learned Civil Judge has given a finding on this issue. The Respondent No. 1 had therefore full scope for making out these objections by producing proper materials. But we find that the parties have always acted on the assumption that the sale was subject to those rules. It is, however not necessary to decide these questions in this appeal because we hold that on a true construction of the Jaher Khabar agreements to sell, Immovable property mentioned in it are not prohibited. The agreement in favour of the Plaintiff was therefore a valid agreement and capable of specific performance.

The appeal fails and is ordered to he dismissed with costs. The decree of the learned District Judge is confirmed.

Shah, C.J.

I agree.