T.V. Kochuvareed and Another vs P. Mariappa Gounder and Others

Sankaran, J.—These two appeals are directed against the decree in O.S. No. 133 of 1950 on the file of the District Court at Trichur. The suit is for specific performance of the agreement for sale of the several items of properties, movable and immovable, described in the schedule attached to the plaint. The main item of property consists of a tile factory known by the name of Sivakami Tile Works situated at Puthukkad in Nanmanikara village near Trichur in the Travancore-Cochin State. The other items of properties are the lands, bungalows and other buildings as well as the, machinery and other accessories attached to the factory.

These properties belonged to the 1st Defendant in the case, who is a resident of Pallathur in Ramnaa District of the Madras State. Plaintiff who is a dealer in tiles at Pollachi negotiated with the 1st Defendant for the purchase of the Sivakami Tiie Works together with all the properties attached to it and after settling the terms entered into a registered agreement on 22-5-1950 with the 1st Defendant setting forth the terms of the proposed sale and purchase. Exhibit D is that agreement. The sale price was fixed at Rs. 90003/- and at the take of execution of Ex. D an earnest money of Rs. 5003/- was paid by the Plaintiff to the 1st Defendant.

It was stipulated that the sale deed should be executed before the month of Ani of the current (sic) (i.e. before 15-7-1950), that on the date of the registration of Ex. D, Plaintiff should make a ready cash payment of Rs. 50,000/- out of the consideration before the Registering Officer, that for the balance of consideration of Rs. 35,000/- Plaintiff should execute a mortgage of the same properties in favour of the 1st Defendant with a provision for payment of that, amount with six per cent interest on or before 31-5-1951 and that all the expenses of the transaction were to be met by the Plaintiff himself. The 1st Defendant was to deliver possession of all the movable and immovable properties to the Plaintiff at the time of the execution of the sale deed. The parties had also expressly stipulated that time should be of the essence of the agreement between them and the consequences to follow from the default by either party were also provided for in Ex. D. If the agreement fell through on account of the default of the Plaintiff, he must forfeit the advance of Rs. 5003/- paid by him. If the sale as agreed could not be pushed through on account of (the default of?) 1st Defendant he has to return to the Plaintiff the earnest money of Rs. 5003 and is also to pay a further sum of Rs. 5003 by way of damages.

Before the date fixed for the execution of the sale deed, Plaintiff deposited the required amount and had to his credit over Rs. 50,000/- under the current account in the South Indian Bank Limited at its branch at Pollachi. He had also purchased the necessary stamp papers in his name on 8-7-1950. But, according to him, he got information from one Thenappa Chettiar of Devakotta, who has been examined in this case as P.W. 2, that the 1st Defendant was trying to evade his obligations under the agreement Ex. D. Accordingly, Plaintiff caused the registered notice Ex. E dated 7-7-1950 to be sent through his lawyer expressing his readiness and willingness to abide by the terms of Ex. D and calling upon the 1st Defendant to perform his obligation of executing the deed of conveyance as per the terms of the agreement.

To this notice, the 1st Defendant sent the reply Ex. F through his lawyer stating that one Neelacanda Iyer was in possession of the Sivakami Tile Works under an outstanding lease, that the lessee has refused to surrender possession of the factory and that therefore it has become impossible to effect the sale as contemplated in Ex. D. The 1st Defendant had also offered to return the earnest money of Rs. 5003/-.

According to the Plaintiff, the lease made mention of in Ex. F is untrue and non-existent and the plea put forward by the 1st Defendant on the basis of the lease is illegal and mala fide. The stand taken by the Plaintiff is that the Tile factory and other items of property attached to it are actually in the possession and control of the 1st Defendant himself and that he is bound to carry out the undertakings in Ex. D by executing a deed of conveyance and surrendering possession of the properties forthwith, on receipt of the consideration as agreed. Consistent with this position the suit was instituted against the 1st Defendant as the sole Defendant, praying for a decree directing him to execute a registered deed of sale in favour of the Plaintiff and deliver possession of the plaint schedule property. Future mesne profits at the rate of Rs. 30,000/- a year till date of delivery of possession of the property was also claimed.

Only some time subsequent to the institution of the suit Defendants 2 and 3 were impleaded in the case. Their impleading was ordered under, the following circumstances. The plaint was at first presented in this Court on 23-8-1950 before the Judge on vacation duty during the Onam holidays that year. On the same day, Plaintiff filed two separate applications, C.M.P. Nos. 1478 and 1479. The first of these petitions was for the appointment of a Commissioner to prepare an inventory of all the properties of the Sivakami Tile Works, particularly of the engine, press, pugmill, fourteen-chambered kilns dyes, buildings, furniture, raw materials and other movable and immovable properties of the said Tile Works. That petition was allowed and an Advocate of this Court was appointed as Commissioner. The other petition was for the appointment of a Receiver to take possession of the plaint schedule properties. On that petition, notice was ordered return able in ten days. Subsequently, the records of the case were sent to the District Court where the further proceeding have been carried on.

When the Commissioner went to the factory to prepare the inventory, Neelacanda Iyer, the alleged lessee of the factory under the 1st. Defendant, presented Ex. XXXIII statement dated 25-8-1950 objecting to the preparation of the inventory. That statement is in the following terms:

I am in possession of the aforesaid Sivakarni Tile Works and the properties attached thereto, as lessee for the last nine years with an option to renew for Anr. five years from 1127 M.E. Most of the properties are my improvements. As there is no order against me, I object to the inventory and I hereby place on record my protest.

In spite of the objection thus raised by Neelacanda Iyer, as lessee of the tile factory, the Plaintiff did not care to implead this claimant as a party to the suit. On the other hand, Plaintiff pursued his application for the appointment of a receiver to take possession of the suit properties with the 1st Defendant alone on record.

On 23-12-1950, the lower Court allowed that application and appointed the Official Receiver of that Court as Receiver in respect of these properties also. On knowing of this order, Neelacanda Iyer presented M.P. 11 of 1951 dated 3-1-1951 praying that the receiver may be directed not to disturb his possession of the factory as the lessee thereof. By Anr. petition, M.P. 12 of 1951, of the same Court, he moved for a stay of the further proceedings in respect of the receiver matter pending final orders on M.P. 11 of 1951. Plaintiff opposed both these petitions and filed M.P. 282 of 1951 praying that orders may be issued to the receiver to take possession of the factory forth with. In the meanwhile the 1st Defendant had tiled Civil Miscellaneous Appeal, C.M.A. No. 1 of 1951, in this Court against the order appointing a receiver to take possession of the suit properties. That C.M.A. ended in dismissal. It was mainly on the strength of that order that the Plaintiff pressed for immediate direction to the receiver to take possession of the properties.

On 12-2-1951 the lower Court passed orders on M.P. Nos. 11 and 12 directing the Petitioner Neelacanda Iyer to deposit Rs. 15,000/- in Court and to execute a lease deed in favour of the receiver and thus continued to be in possession of the properties.

While matters were at this stage, the present 3rd Defendant took a registered assignment deed on 5-3-1951 in respect of all the rights of Neelacanda lyer as the lessee in possession of the suit properties. As assignee of such rights, he filed M.P. 515 dated 7-3-1951 praying that the question of the lessee''s possession may be fully investigated after raising an issue regarding that matter and that in the meanwhile he may be permitted to continue to be in possession of .the properties under the Receiver. He had also prayed for being impleaded as an additional party in the suit. Since he had agreed to abide by the order passed on M.P. 11 of 1951 the Court by its order dated 16-3-1951 permitted him to deposit Rs. 15,000/- in Court and to execute a lease deed in favour of the Receiver and to continue in possession of the properties. The question of impleading him as a party was deferred for decision at a later stage.

M.P. Nos. 11 and 12 and 282 of 1551 were heard together and were disposed of by a final order passed on 28-6-1951. The effect of that order was merely to confirm the directions which had already been made by the prior orders passed on C.M.P. Nos. 11, 12 and 318 of 1951. By this time, the 2nd Defendant had obtained an assignment of all the rights which the 1st Defendant had in respect of the plaint properties, the deed of assignment being Ex. XLII dated 8-3-1951. On the strength of that assignment, he filed M.P. 901 dated 206-1951 praying that he may be impleaded as an additional Defendant in the case and permitted to carry forward the contentions of his assignor, the 1st Defendant. Since the Plaintiff did not object to the adoption of such a course, the Court passed an order on 3-7-1951 allowing M.P. 901 and impleading, the 1st Defendant''s assignee as the 2nd Defendant''s in the case. In continuation of M. P. 515 of 1951 the lessee''s assignee filed Anr. petition M. P. 1626 on 20-9- 1951 reiterating his prayer that he may also be impleaded as an additional Defendant in the suit. Since this petition was not opposed by the Plaintiff, the Court on 20-9-1951 itself passed an order allowing the petition. Accordingly the Petitioner was impleaded as the 3rd Defendant in the case.

After the 2nd Defendant was impleaded in the case, he merely accepted the contentions of the 1st Defendant and this was all that he could do as a transferee ''pendente lite'' of the 1st Defendant''s rights over the suit properties. The position of the 3rd Defendant is different. His assignor Neelacanda Iyer has been no party to the present suit. All the rights available to them are based on the lease deed Ex. I which came into existence on 1-1-1117, i.e., several years prior to the commencement of this litigation. So far as the lease arrangement is concerned, all the Defendants have practically the same contentions.

According to them, Neelacanda Iyer has been in possession and enjoyment of these properties as lessee thereof ever since the date of Ex. I and has been regularly paying the pattom to the 1st Defendant as stipulated in the lease deed and that the 3rd Defendant having acquired the rights of Neelacanda Iyer, is now occupying the position of the lessee of these properties with the same rights and liabilities which Neelacanda Iyer himself had. It is also stated that the option given to Neelacanda Iyer under Ex. I for continuing the lease for a further period of five years from 1127 onwards, was duly exercised by him by notifying that fact to the 1st Defendant before the expiry of the original period fixed in Ex. I and that therefore neither the 1st Defendant nor the Plaintiff can claim surrender of possession of these properties before the end of the extended period of the lease.

The 3rd Defendant and his assignor have both declared their intention in unmistakable terms to exercise their full rights under the lease deed Ex. I and to retain possession of the suit properties for the full period available under it. The 3rd Defendant has further stated that even at the stage of the termination of the full period of the lease, he can be evicted from the properties only after the value of all the improvements effected by him and his predecessor-in-interest in the leasehold premises is assessed and paid to him and that the question of thus determining the lease is beyond the scope of the present suit. He has further contended that the lessee''s rights cannot in any way be affected by Ex. D, the deed of agreement for sale, entered into between the Plaintiff and the 1st Defendant alone behind the back of the lessee and that therefore the Plaintiff is not entitled to get any relief in this suit as against the lessee of the plaint properties.

The 1st Defendant has admitted the execution of Ex. D the deed of agreement in favour of the Plaintiff, but has contended that the parties entered into, such an agreement with the full understanding of the existence of the lease arrangement under Ex. I in favour of Neelacanda Iyer as also his possession on the strength of it. It is stated that at the time of, execution of Ex. D, the parties to it hoped, that it may be possible to persuade the lessee to surrender possession of the properties within the time fixed in Ex. D for the implementation of that agreement and that it was expressly agreed between the Plaintiff and the 1st Defendant that, the agreement for sale need be performed only if the lessee''s consent is thus obtained in the matter of surrendering possession of the properties. It is, stated that the obtaining of such consent was agreed to he a condition precedent, to the agreement for sale becoming operative.

According to the 1st Defendant, he tried his best to persuade Neelacanda Iyer to surrender possession of the properties. But the latter was not prepared to yield. On the other hand, the lessee is stated to have flatly refused to comply with the request to surrender possession of the properties and to have, stated his determination to retain possession of, the properties for the full period available under. Ex. I. This position was. clearly known early in June 1950, and the same was promptly let known by the 1st Defendant to the Plaintiff through Thenappa Chettiar who was their common friend and who had taken an active part in bringing about the agreement under Ex. D, Since the agreement has thus become impossible of performance, Plaintiff was also requested to take back the earnest money of Rs. 5003. It is, therefore, contended that the Plaintiff is not entitled to ask for specific performance of the agreement for sale.

The 1st Defendant has further contended that the agreement Ex. D has been vitiated by mutual mistakes on the part of the contracting parties as to the nature and extent of the lessee''s right to the value of improvements effected by him on the suit properties and that the agreement is indefinite and vague in so far, as it has not specified the necessary particulars regarding the properties forming the subject-matter of this agreement. It is also contended that there has been no proper or legal tender of the sale price by the Plaintiff. It is also stated that the Plaintiff, is not entitled to claim any mesne profits in respect of the suit properties, and that the claim on that account at the rate of Rs. 30,000/- per year is baseless and untenable and that the Plaintiff has pot sustained any damages on account of the agreement becoming impossible of performance for no fault of the contracting parties.

In answer to the contentions raised by the Defendants, the Plaintiff filed a replication wherein he denied the existence of the alleged lease in favour of Neelacanda Iyer. It was further contended that even if there was any lease it was only a sham arrangement for an ulterior purpose and that no rights passed under it. Plaintiff has maintained the position that the said Neelacanda Iyer was at all times the Manager under the 1st Defendant and has not effected any improvements in the properties and that himself or his assignee has no right to resist the Plaintiff''s claim for possession of the properties together with mesne profits at the rate claimed.

After a consideration of all the evidence adduced by the parties, the lower Court came to the conclusion that the lease deed Ex. I was never treated as a valid document, that it was never intended to take effect, that it also never took effect, and that it might have been brought into existence with the only object rightly imputed to it by the Plaintiff in the box, i.e., to hoodwink the Income Tax and super-tax officers. On the strength of these findings, the lower Court held that the agreement for sale as embodied in Ex. D was not subject to any condition and that there is no impediment in the way for the specific performance of that agreement. The other contentions raised by the Defendants were also negatived. Accordingly, Plaintiff''s suit for specific performance of the agreement for sale was decreed as against the 1st Defendant with the direction that the decree will bind Defendants 2 and 3 as well. 15 days'' time was allowed to the Plaintiff to bring back to Court the sum of Rs. 50,000/- which he had deposited in Court at the early stage of the suit but had subsequently, withdrawn with the permission of the Court.

The 1st Defendant was allowed 30 days'' time to obtain from Court the stamp papers produced by the Plaintiff and to execute the sale deed and produce it in Court. Ready cash consideration of Rs. 50,000/- was directed to be withdrawn by the 1st Defendant or his assignee, the 2nd Defendant. Plaintiff was given 15 days'' time to execute a mortgage in respect of the properties covered by the sale deed for securing the balance of Rs. 35000/- to make up the full amount of the sale consideration as contemplated by Ex. D. Mesne profits at the rate of Rs. 15,000/- per year had also been decreed in favour of the Plaintiff. He had been authorised to recover possession of the properties from the receiver. The 3rd Defendant had been directed to deliver possession of these properties to the Receiver with all arrears of mesne profits. All the Defendants have been made liable for the costs of the Plaintiff.

It is against this decree that Defendants 2 and 3 have come up in appeal. In A.S. 450 of 1952 filed by the 3rd Defendant, he has taken exception to the lower Court''s finding on the question of the validity and binding nature of the lease deed Ex. I, and also to the decree for possession passed in favour of the Plaintiff in disregard of the 3rd Defendant''s subsisting rights under the lease arrangement. In A.S. No. 454 1952 filed by the 2nd Defendant, he has objected to all the findings recorder by the lower Court against Defendants 1 and 2 and also to the decree passed. Plaintiff-Respondent has filed an objection memorandum objecting to the lower Court finding that the lease set up by the Defendants is true and also contending that the amounts deposited by the Plaintiff in Court should also be taken into account in calculating the costs due to the Plaintiff in connection with the receiver- appointment, as also the issue of a commission to prepare an inventory of the suit properties.

The two appeals and the objection memorandum taken together have brought up the whole case before this Court. The decision on the following questions will determine the fate of the two appeals and also the objection memorandum:

(i) Was the lease arrangement under Ex. I (sic) dated 1-1-1117 a real and genuine transaction? Did it come into effect? and was it subsisting ''even at'' the time of Ex. D the agreement for sale entered into between the Plaintiff and the 1st Defendant? Is the lease arrangement subsisting even now? Can the Plaintiff or the 1st Defendant ignore the lease and secure possession of the suit properties from the 3rd Defendant as per the proceedings in the present case?

(ii) Was the agreement embodied in Ex. D for the sale of the suit properties to the Plaintiff made conditional upon the lessee under Ex. I agreeing to surrender possession of the properties within the period fixed in Ex. D? Did the agreement fall through and become impossible of performance on account of the lessee''s refusal to make such a surrender of possession of the properties?

(iii). Is the Plaintiff entitled to get a decree for specific performance of the agreement for'' the sale in its entirety or at least in part?

(iv). Is the Plaintiff''s claim for mesne profits sustainable and If so, at what rate? If not is the Plaintiff entitled to get any amount by way of damages and If so what amount and from whom?

Before proceeding to consider the evidence relating to the several points formulated above, mention may be made about a strange procedure adopted in the recording of the evidence in this case. It is seen that the three witnesses on the Plaintiff''s side and the first seven witnesses on the defence side were examined and most of the documents on either side were produced before Defendants 2 and 3 had been impleaded as parties to the suit. Such evidence was recorded in the miscellaneous proceedings relating to the appointment of a receiver to take possession of the properties and to the objections which the 3rd Defendant''s predecessor-in-interest had raised in respect of that matter. However, it is seen that after the 3rd Defendant has also been brought on the party array both sides agreed that the entire evidence which had been recorded up to that date In connection with the miscellaneous proceedings may also be treated and made use of as evidence relating to the several issues involved in the suit itself. Thus the trial proceeded and was brought to close with the examination of D.Ws. 8 and 9 also.

The 1st of the four points formulated above relates to the lease arrangement entered into between the Plaintiff and the first Defendant. The whole dispute in the case appears to have centred round this question and the lower Court is seen to have rested its decision of the suit on the finding that the lease arrangement evidenced by Ex. I was never brought into effect. The lease deed Ex. I is seen to have been executed in stamp papers to the value of Rs. 30/- purchased in the name of the lessee Neelakanta Iyer on 31-12-1116. The lease deed was executed on 1-1-117 and it is described as an agreement by way of lease executed between Solayappa Chettlar, the owner of the properties as lessee on the one part, and Neelakanta Iyer as the lessee on the other part.

In the opening portion of the document, it is stated that the tenancy is to commence on the first day of Chingam 1117 and the annual rent payable by the lessee is at the rate of Rs. 2,500/- for the first three years and at Rs. 3,000/- for the next 7 years with an option to the lessee to continue the lease for the next five years from 1127 at the rent of Ra. 3000/- per rear on his expressing his desire to do so before the expiry of the year 1126.

Some of the other important terms agreed to between the parties and recorded in Ex. 1 are (1) that the lessee or his assignee shall pay the annual rent to the lessor before the expiry of each Malayalam year, (2) that the lessee shall pay interest at the rate of 6 per cent per year in the case of default of the payment of the annual rent, (3) that the lessee shall abide by all the rules and notifications under the Cochin Factory Act and other enactments that may be applicable to the factory, (4) that the lessee shall continue in possession till 1125 for a period of 10 years without any interruption from the lessor and with the option left with the lessee to continue the lease for the next five years on the same terms and conditions on his expressing his desire to do so in writing before the expiry of the year 1126, (5) that the lessee shall effect all necessary repairs to the Tile Factory buildings which suffered severe damage on account of the cyclone in the year 1116 and are in a dilapidated condition and shall also make any addition, alteration or improvements to the buildings and the machinery which he may think necessary in the interest of the industry. (6) that the lessee shall be paid full compensation for all the additions and improvements made by him at the time of the determination of the lease, and (7) that at the termination of the lease the lessee shall deliver up the premises, buildings & machinery in a fairly good condition-reasonable ware and tare during the period of the lease being taken into consideration-on his being paid full compensation for all the repairs, additions, alterations and improvements- made by him.

The schedule of the properties covered by the lease is given at the foot of the document and the properties are described under 12 different items.

Both lessor and lessee have signed the document and as D.W. 9 and D.W. 1 they have sworn to the execution of this document, and also to the fact that it was intended as a real transaction and that the lease actually came into operation with effect from 1-1-1117 itself. There is nothing in the apparent tenor of the document to doubt the reality and bona fides of the transaction.

10-13. (His Lordship then discussed the documentary evidence filed by defence consisting of accounts, Income Tax and Sales Tax records and licences obtained for running the factory and further after summarising the oral evidence of witnesses stated:) The lower Court has not given proper reasons for discarding the evidence of these witnesses. Normally, the appellate Court would have due weight to the opinion of the trial Court regarding the credibility or otherwise of the witnesses examined before it. But this wholesome rule can have any application only to cases where the trial Court is seen to have applied its mind to a judicial consideration and a proper appreciation of the evidence given by the witnesses examined before it. It is regrettable to note that there has been no such proper approach by the lower Court to the evidence given by D.Ws. 1 to 9.

It cannot also he said that the learned Judge had the advantage of observing the demeanour of these witnesses and of forming his own opinion as to their credibility or otherwise. Of all these witnesses, D.W. 8 alone appears to have been examined in the presence of the learned Judge. D.W. 9 was examined on commission. The other witnesses, D.Ws. 1 to 7 had all been examined by his predecessors-in-office. Under these circumstances, the lower Court was bound to go through the evidence of these witnesses in detail and to assess such evidence at its intrinsic worth before coming to the conclusion whether the same is acceptable or not. To dub parties and witnesses as liars, is a very serious matter. No doubt the Court is at liberty to express its opinion regarding the credibility or otherwise of the witnesses and parties whose, evidence it has to consider. Such opinion, whether it be complimentary or condemnatory, should be justified by the facts and circumstances on record. The tendency to treat the matter in a light mood, and to indulge in sweeping remarks should be avoided, so that there may be no cause for complaint that the witnesses and parties have been improperly and unfairly treated by the Courts. The treatment meted out to D.Ws 1 to 9 by the lower Court is undoubtedly open to such a serious charge. (Then his Lordship after examining the oral evidence stated:)

14-22. In the appreciation of the evidence on record in this case, both oral and documentary, the learned Additional District Judge has clearly gone wrong in having placed undue importance on certain mistaken entries in the factory accounts produced in this case and also on certain minor discrepancies in the evidence of D.Ws. 1 and 9 and in having been obsessed with the idea that Ext. I was brought into existence merely as the result of a secret understanding between Solayappa Chettiar and Neelacanda Iyer to evade payment of Income Tax due in respect of the income earned by Solayappa Chettiar from the Sivakami Tile Works. The result has been that the learned Judge fell into the grave error of not properly appreciating and not giving due weight to the, oral and the large mass of documentary evidence in the case which is overwhelmingly in favour of the inference that the lease arrangement under Ext. I was a real transaction and that ever since the date of Ext. I Neelacanda Iyer, was in possession and enjoyment of the factory as its lessee and that Solayappa Chettiar was only getting the pattern as stipulated in the document. The documentary evidence discussed in the earlier part of this judgment is such as to lead to this inference only. The fact of the lease is clearly sworn to by D.Ws. 1 and 9 and also by the independent witnesses D.Ws. 2 to 7, all of whom are respectable persons. Nothing has been brought out in their examination to discredit their evidence.

Hence, we believe the evidence of these witnesses as true and hold that the lower Court was wrong in summarily rejecting their evidence. The several circumstances discussed t above also point to the irresistible conclusion that, from 1-1-111 onwards, the lessee has been in possession and enjoyment of the factory in his own right as per the terms of the document. Accordingly, we hold that the lease arrangement under Ext. I was a real and genuine transaction and that it camp into force with effect from 1-1-1117 onwards.

An argument advanced on behalf of the Plaintiff in the case that the lease deed Ext. I not having been registered as required by the law of registration in force, is not admissible in evidence and that the lessee or his assignee is not therefore entitled to claim any rights on the basis of such a document, may be disposed of at this stage. No doubt the lease deed Ext. I relating to immovable properties comes under the category of documents whose registration is made compulsory u/s 17 of the Registration Act. and it is laid down in Section 49 of the same Act that no document required to be registered by Section 17 of the Act or by the provisions of the Transfer of Property Act shall affect the immovable properties comprised therein or be received as evidence of transactions affecting such properties unless such documents are registered. But the exception to this rule is specified in the proviso to Section 49, Registration Act and also in Section 53A, Transfer of Property Act.

The proviso to Section 49, Registration Act, states that an unregistered document affecting immovable properties required by the Registration Act or the Transfer of Property Act to be registered, may be received as evidence of a contract in a suit for specific performance or as evidence of part performance of such a contract for purposes of Section 53A, Transfer of Property Act. Section 53A of the Transfer of Property Act states that "where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can: be ascertained with, reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, ''other than a right expressly provided by the terms of the contract''.

The conditions required by this section are fully satisfied so far as the lease deed Ext. I is concerned. The transferee under it who was already in possession of the property has from the date of Ext. I onwards continued to be in possession of such property in furtherance of the terms of Ext. I and has done everything in accordance with the terms of the contract embodied in it and such performance on his part has been fully acquiesced in by the transferor. The fact that the lessee was in possession of the property on the strength of Ext. I was also known to the Plaintiff even prior to the date on which he entered into the agreement for Ext. D with the 1st Defendant. This fact is evident even from the letter Ext. B written by the Plaintiff expressing his desire to get the property either on lease or on sale and also suggesting that he would himself take the necessary steps to secure possession from the lessee whose term had not expired by that time. Under these circumstances, there is no force in the Plaintiff''s contention that Ext. I is inadmissible in evidence or that the lessee and his assignee are not entitled to claim their rights on the strength of that document and thus to resist the Plaintiff''s move to eject them from the property and recover possession of the same.

Even if there had been any doubt on the rights of a lessee placed in the position similar to that of the lessee under Ext. I, the matter has been set at rest by the decision of the Supreme Court in - Sheth Maneklal Mansukhbhai Vs. Hormusji Jamshedji Ginwalla and Sons, . In that case it was ruled that where in an action to eject a lessee on the ground that he had no registered deed of lease executed in his favour the Defendant lessee takes the plea of part performance and proves that there was a written and signed contract of lease in his favour and that he had taken possession in accordance with the terms of the agreement and was paying rent to the Plaintiffs in accordance with that agreement, the Defendant is entitled to retain possession in spite of an absence of the registered deed.

There is yet Anr. argument advanced on behalf of the Plaintiff against the validity of Ex. I. When this document was executed by the 1st Defendant in favour of Neelacanda Iyer, there was already in existence Ex. L the general power of attorney which the 1st Defendant had executed in favour of Neelacanda Iyer on 10-6-1112. The argument is that so long as Ex. L has not been cancelled by executing and registering a cancellation deed, the lease deed Ex. I has only to be ignored as ineffectual and inoperative and Neelacanda Iyer must be deemed to be continuing as the power of attorney holder of the 1st Defendant on the strength of Ex. L. We are unable to appreciate this argument also. The fact that Ex. L is a registered document, while Ex. I has not been registered, cannot by itself attract the application of Section 50, Registration Act.

Clause (1) of Section 50 states that every document of the kinds mentioned in Clause (a) to (d) of Section 17(1) and Clause (a) and (b) of Section 18 shall, if duly registered, take effect as regards the property comprised therein against every unregistered document relating to the same property and not being a decree or order, whether such unregistered document be of the same nature as the registered document or not. A general power of attorney like Ex. L does not come under any of the categories of documents specified in this section.

The effect of Ex. L was only to constitute Neelacanda Iyer as the duly authorised agent of Solayappa Chettiar to do all acts as specified therein on his behalf in respect of his properties within the former State of Cochin. It cannot be said that Ex. L had the effect of creating a right, title or interest, whether vested or contingent, in favour of the power of attorney holder in respect of Solayappa Chettiar''s immovable properties in the Cochin State. The document only provided for the management of such properties and Neelacanda Iyer was merely authorised to do such acts of management for and on behalf of Solayappa Chettiar himself. It was open to the principal to revoke, restrict or modify the powers of management thus conferred on his agent. Such a revocation was effectively made so far as Neelacanda Iyer''s authority to manage the Sivakami Tile Works was concerned, when Solayappa Chettiar executed the lease deed Ext. I. It may also be mentioned in this connection that beyond mentioning the fact that Neelacanda Iyer has been in management of the factory no special power was conferred on him by Ext. L to continue such, management for any length of time.

Apart from this aspect, the fact is there that with the execution of the lease deed Ext. I his management as the agent of Solayappa Chettiar was brought to a close. The agent himself having acquiesced in the termination of such management by accepting the new position as lessee under Ext. I, it cannot be said that thereafter the power of attorney Ext. L had any further operative force, so far as the tile factory was concerned. There was no necessity to mention in Ex. I that with the execution of the document the power of attorney Ext. L ceased to be operative so far as the management of the factory was concerned. Even in Ext. D the agreement for sale, in favour of the Plaintiff, there is no reference at all to Ext. L. In the present suit the Plaintiff has also not taken up the position that the formal cancellation of Ext. L is necessary before possession of the properties can be secured from Neelacanda Iyer. Thus the contention urged by the Plaintiff on the basis of Ext. L has only to be negatived as being clearly untenable.

It has already been found that the lease deed Ext. I has come into effect. The original term granted in favour of the lessee under that document was to expire only on the last day of the year 1126 M.E. The agreement Ext. D was entered into between the Plaintiff and the 1st Defendant several months before that date. Ext. D was on 22-5-1950 corresponding to 8-10-1125. The parties have definitely stipulated in Ext. D that the sale deed should be registered and possession given to the vendee before the end of Ani of the corresponding tamil year i.e., before the end of Mithunam 1125. It is obvious that the lease arrangement was in force and was subsisting on the date of Ext. D and also on the date fixed for the execution of the sale deed and for surrender of possession of the property.

The same was the position even on the date of the institution of the suit. Under the terms of Ext. I, the lessee had the option to elect to continue the lease arrangement for a further period of five years from 1-1-1127 onwards by giving written intimation of such election to the lessor before the expiry of the original period. The 1st Defendant as D.W. 9 has clearly admitted that Neelacanda Iyer duly exercised this option and had intimated that fact to him by sending a registered letter to that effect. Copy of that letter signed by Neelacanda Iyer and retained by him was shown to D.W. 9 who admitted it to be the copy of the letter received by him from Neelacanda Iyer. It has been marked as Ext. XL in the case. The letter is dated 5-3-1951. Ext. XLI is the postal receipt obtained on sending the letter registered. The receipt shows that it was sent on 5th March 1951.

The admissibility of Ext. XL is questioned on behalf of the Plaintiff on the ground that the original has not been produced. No doubt there is some force in this objection. At the same time there is the admission by D.W. 9 the lessor that he had received a written intimation from the lessee to the effect that he had exercised his option to continue the lease for, a further period of five years and that such an intimation was given before the expiry of the original period fixed in the lease deed. The 3rd Defendant who is the assignee of the lessee can certainly take advantage of this admission and claim the benefit of the option which the original lessee had exercised before the expiry of the original period even prior to transferring his rights under Ext. XLIII. It may also be mentioned that the question whether the 3rd Defendant has acquired a volid right to continue the lease arrangement for a further period of five years, will properly arise for determination in a suit for determination of the lease.

As already pointed out on more than one occasion, the present suit is not one for determination of the lease. On the other hand, the definite stand taken up by the Plaintiff right up to the last stage is that the lease deed did not come into effect and that the lessee or his assignee has no right to be in possession of the property or claim any value for the improvements alleged to have been effected by them and that he is entitled to obtain a decree for specific performance of the agreement for sale together with actual possession of the property as against the 1st Defendant. Even apart from the exercise of the option by the lessee there were several months more for the original period of the lease to expire when the present suit was instituted. Thus it is clear that in any view of the matter the Plaintiff has no right to claim possession of the properties and thus to have the lessee evicted therefrom.

In view of the findings that the lease has come into effect and is subsisting even now, it is not open to the Plaintiff or even to the 1st Defendant to ignore the lease arrangement and to secure possession of the properties from the 3rd Defendant as per the proceedings in the present suit. Even accepting the Plaintiff''s contention that the lease under Ext. I is only a colourable transaction fraudulently brought about as a result of the collusion of the 1st Defendant and Neelacanda Iyer with the object of defeating the Income Tax law, it is clear that the Plaintiff is not entitled to avoid the lease and to secure possession of the properties from the lessee. Accepting the position taken by the Plaintiff to be correct, the fraud has already been perpetrated and the 1st Defendant had derived the benefit therefrom. In such a situation, it will not be open to the 1st Defendant himself to set up any plea against the lessee that the lease arrangement is only a sham transaction and thus to seek an avoidance of it. The Plaintiff who claims a right to the properties under the 1st Defendant will also be subject to the same disability and cannot escape from it.

Thus, in any view of the case, the possession of the properties can be claimed by the Plaintiff only after duly terminating the lease by mutual consent or in the absence of such consent, by taking appropriate proceedings for the determination of the lease. It follows therefore that viewed from any stand-point the third Defendant''s claim to retain possession of the properties has to be upheld and the Plaintiff''s claim to get delivery of possession of the suit properties as per the proceedings in this suit has to fail. Point 1 formulated by us is decided accordingly.

Points 2 and 3 may now be considered. According to Defendants 2 and 3, the agreement Ext. D was subject to the condition that it need be performed only if the 1st Defendant could persuade the lessee under Ext. I to surrender possession of the properties within the period specified in Ext. D so as to enable the 1st Defendant to put the Plaintiff in possession of the properties at the time of the execution and registration of the sale deed. The agreement is said to have become impossible of performance on account of the lessee''s refusal to surrender possession of the properties within the time stipulated or in the near future.

The condition attached to the agreement for sale is not embodied in Ext. D, but only formed the subject-matter of a collateral oral agreement between the Plaintiff and the; 1st Defendant. The direct evidence in support of this oral agreement consists of the testimony of D.Ws. 8 and 9. That evidence has to be examined in the light of other outstanding circumstances which have an important bearing on the real nature of the agreement entered into between the Plaintiff and the 1st Defendant. Hence, the background furnished by those circumstances and also by Exts. B and C which are relied on by the Plaintiff as the earliest letters of correspondence that led up to Ext. D may first be stated.

(His Lordship considered the question in the manner indicated and came to the conclusion that D.Ws. 8 and 9 gave a true and correct version and that the parties entered into such an oral agreement. Then he stated:)

28-32. The learned Advocate General appearing for the Plaintiff-Respondent contends that the oral evidence given by D.Ws. 8 and 9 to the effect that the contract embodied in Ex. D was made subject to the condition of the 1st Defendant being fable to persuade the lessee to surrender the properties is inadmissible u/s 92 of the Evidence Act. That section states that where the terms of a contract, grant or disposition of property have been reduced to writing and have been proved by the production of such document, no evidence of any oral agreement or statement shall be admitted as between the parties to such instrument or their representatives-in-interest, for the purpose of contradicting, varying, adding to or subtracting from such terms. The rule thus enunciated in Section 92 is subject to the several exceptions as enumerated in the provisions to the section. The third proviso states that the existence of a separate, oral agreement constituting a condition precedent to the attaching of any obligation under such contract, grant or disposition of property, may be proved. The oral agreement Sworn to by D.Ws. 8 and 9 clearly comes within this proviso.

As per the contract embodied in Ex. D, Defendant 1 had agreed to convey to the Plaintiff the suit properties within the time specified and also to deliver possession of the properties at the time of the execution of the deed of conveyance. The plea of Defendant 1 is that there was a separate oral agreement between himself and the Plaintiff that the contract for sale was subject to the condition of the lessee agreeing to surrender possession of the properties within the time specified for the sale and that this oral agreement constituted a condition precedent to the attaching of the obligation arising out of the contract embodied in Ex. D. This oral agreement has not the effect of contradicting or varying any of the terms of the agreement for sale. On the other hand those terms are maintained intact and the separate oral agreement is sought to be proved merely for the purpose of making out the real nature of the contract for sale viz., that it was only a contingent contract.

Section 31, Indian Contract Act defines a contingent contract as a contract to do or not to do something on some event collateral to such contract does or does not happen. Section 32 of the same Act lays down that contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened and that if the event becomes impossible such contracts belt come void.

That there was only such a contingent contract between the Plaintiff and Defendant 1 in respect of the sale of the suit properties, could be proved by the terms embodied in Ex. D or by the terms as supplemented by the evidence relating to the contemporaneous oral agreement between them at the time of the execution of Ex. D. Such a contemporaneous oral agreement sworn to by D. Ws. 8 and 9 does not in any way alter the legal effect Ex. D, but only proves the condition attached to the enforcement of the obligation arising thereunder. Such a condition cannot be said to be one defeasance of the main contract itself. A condition precedent to the attaching of the obligation under a particular contract could very well be inserted in the document evidencing the contract. There may be cases where the parties for reasons of their own may deliberately refrain from reducing that part of their contract into writing and f it the subject-matter of a contemporaneous oral agreement. Proviso 3 to Section 92, Evidence Act definitely permits evidence being given in proof of such contemporaneous oral agreement.

What would amount to oral agreements constituting a condition precedent as contemplated by Proviso 3 to Section 92, Evidence Act, has been explained in numerous cases. In- AIR 1938 198 (Privy Council) a collateral oral agreement not to enforce a promissory-note until a certain specified condition was fulfilled, was held to be an oral agreement constituting a condition precedent attaching to the obligation arising out of the note and as such coming within Proviso 3 to Section 92, Evidence Act.

In - Shivlal v. Bai Sankli AIR 1931 Bom 297(C)a Hindu widow''s claim for arrears of maintenance due to her on the strength of a written agreement between herself and her brOrs. -in- law, providing for payment of annuity to her at a specified rate, was resisted by the brOrs. -in-law by setting up an oral agreement that the payment of the amount was conditional upon their being satisfied of the widow''s continued good conduct. It was found that the written contract had already come into effect end that payments were already made to the widow during the first four years from the date of the agreement and accordingly it was held that the oral agreement set up by the Defendants could not be allowed to be proved because it did not constitute a condition precedent to the attaching of the obligation under the written agreement.

In - Chhaganlal Kalyandas Shah Vs. Jagjiwandas Gulabdas, the oral agreement pleaded was to the effect that the promissory-note sued on could not be enforced, but that the amount thereof was to be adjusted in the making up of the partnership accounts of the firm of which the Plaintiff was stated to be a partner. It was pointed out that the oral agreement set up had the effect of a total denial of the legal liability arising out of the promissory-note and that such an agreement would not come under proviso 3 to Section 92.

In - Sahadeo Shrawan v. Namdeo Atmaram AIR 1949 Nag, 15(E), the suit for specific performance of an agreement for sale of movable properties was resisted by setting up an oral agreement that the contract for sale was subject to the condition of the Plaintiff executing Anr. deed of conveyance in favour of the Defendant. Evidence in proof of such an oral agreement was held to be admissible under the aforesaid proviso, to Section 92 and it was further held that the oral agreement was not one to defeat the contemplated sale deed or to vary the terms thereof; but that it related only to the condition on the happening of which alone the contract for sale was to come into force.

The same distinguishing feature of a contemporaneous oral agreement constituting the condition precedent to the attaching of the obligation under the written contract, has been pointed out and explained in the comparatively recent decision in - Dungarmull Kissenlal Vs. Sambhu Charan Pandey and Another,

Applying the tests laid down1 in these cases to the facts of the present case, it is clear that the oral agreement sworn to by D.Ws. 8 and 9 is not one in defeasance of the contract embodied in Ex. D but is only one constituting a condition precedent on the happening of which alone the contract under Ex. D could be enforced. The objection that such an oral agreement cannot be allowed to be proved is unsustainable. Such evidence was rightly admitted and it has conclusively established the fact that the agreement embodied in Ex. D was subject to the condition of Defendant 1 being able to persuade his lessee to surrender possession of the suit properties within the time fixed for the execution of the contemplated sale deed. It is also conclusively established by the evidence on record that Defendant 1 tried his best to persuade his lessee to surrender possession of the properties, but that the lessee was not prepared to yield.

On the other hand, the lessee insisted on his rights to hold on for the full period originally fixed in the lease deed Ex. I and also for the further period of five years as provided in the document, by exercising the option given to him in respect of that matter. Thus Defendant 1 as lessor could not under law and in fact secure possession of the properties from the lessee so as to be in a position to execute the sale deed in favour of the Plaintiff and to put him in possession of the properties within the time stipulated in Ex. D. The condition precedent attached to the contract under Ex. D having thus failed the contract itself has ceased to be operative and the same .cannot therefore be made the basis of a decree for specific performance.

Reference may in this connection be made to the decision of the Privy Council in - Dalsukh v. Guarantee Life and Employment Insurance Co. AIR 1947 PC 182(G) In that case also the agreement for sale was made subject to the condition of the Court which placed an attachment over the properties covered by the agreement giving its approval to the proposed transaction. But it transpired that such approval was refused by the Court. It was ruled by the Privy Council that the contract for sale was only a contingent contract and as the contingency failed there was no contract which could be made the basis of a decree for specific performance and that the Plaintiff''s suit for such a relief had only to be dismissed.

The sustainability of the contract under Ex. D as the basis for the suit for specific performance has also to be tested in the light of the provision contained in Section 56, Indian Contract Act. In para. 2 of that section it is stated that:

a contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

The doctrine of frustration known to the English law has thus been statutorily recognised under the Indian Law.

In - Cricklewood Property and Investment Trust Ltd. v. Leighton''s Investment Trust Ltd. 1945 AC 221 at p. 228(H), this doctrine has been explained as follows:

Frustration may be defined as the premature determination of an agreement between parties, lawfully entered into and in course of operation at the time of its premature determination, owing to the occurrence of an intervening event or change of circumstances so fundamental as to be regarded by the law both as striking at the root of the agreement, and as entirely beyond what was contemplated by the parties when they entered into the agreement.

For the application of this doctrine it is essential to ascertain the facts assumed by the parties as forming the fundamental basis of their contract and then to see how far the subsequent developments have resulted in the determination of the very basis of the contract, thereby rendering its performance impossible.

So far as the contract under Ex. D is concerned, it has already been found that the contracting parties were fully aware of the subsistence of the lease Ex. I in favour of Neelacanda Iyer and that he was actually in possession of the properties under that arrangements It was with full know ledge of these facts that the agreement for sale was entered into with particular emphasis laid on the clause requiring the vendor to put the purchaser in possession of the properties immediately on the registration of the document. The execution of the document, as also the dealings of the parties were both to be made within the time fixed in Ex. D and .it was expressly stated that time was to be the essence of the contract. Getting of possession of the properties was obviously considered by the purchaser as the all-important factor in this transaction. In fact the whole contract proceeded on that basis.

In - Ganga Saran Vs. Ram Charan Ram Gopal, it has been pointed out that it is open to the Court to infer from the nature of the contract and the surrounding circumstances that a condition which is not expressed was a foundation on which the parties contracted. In the present case the parties entered into the contract in the hope and belief that Defendant would be successful in persuading the lessee to surrender the properties. Soon after the execution of the agreement Defendant 1 tried his best to persuade the lessee to make such a surrender of possession but he failed in such attempt, and in view of the rights created in favour of the lessee as per the provisions in Ex. I Defendant 1 was certainly helpless in compelling the lessee to surrender possession of the properties.

Thus there was no default on the part of Defendant 1, and yet the result of the situation as it developed was that the implementation of the agreement according to the governing intention of the parties as expressed in Ex. D had become absolutely impossible and that fact was duly communicated by Defendant 1 to the Plaintiff. The doctrine of frustration as enunciated in Section 56, Contract Act is attracted to such, a situation, and the result is that the contract under Ex. D has become void on account of the supervening impossibility of performance. It follows therefore, that specific performance of the agreement as contained in Ex. D cannot be decreed. To pass such a decree, would obviously be to direct Defendant 1 to perform an impossibility.

An exception as it were to the doctrine of frustration as enunciated in Section 56, Indian Contract Act is provided for in Section 13, Specific Relief Act. Section 13 runs as follows:

Notwithstanding anything contained in Section 58. Indian Contract Act, a contract is not wholly impossible of performance because a portion of its subject-matter, existing at its date, has ceased to exist at the time of the performance.

It is obvious that this section as it is framed is intended to govern cases where, in spite of the loss or destruction of, a portion of the subject matter of the contract, substantial performance of the contract is still possible. The facts of the present case are such that the situation as it exists cannot be brought u/s 13, Specific Relief Act.

This is not a case where any portion of the subject-matter of the contract ceased to exist. On the other hand the whole of the subject-matter continues to exist as it was on the date of contract. All the same the dominant intention of the parties that the purchaser shall be put in actual possession of the properties at the time of the execution of the sale deed cannot be put into effect on account of the third party-lessee''s insistence to strictly adhere to his legal rights under the lease deed Ex. I and to retain possession for the full term available under it. Thus it is clearly a case where contract as conceived by the parties has become wholly impossible of performance and not one where there is the possibility of substantial performance. The contract is therefore, hit by the provision contained in para. 2 of Section 56, Contract Act.

36-37. It has now to be considered whether the claim for the alternative relief urged on behalf of the Plaintiff-Respondent can be entertained and allowed. Such a claim was urged only during the course of the hearing of these appeals and by means of a statement filed in this Court on 19-1-1953 That statement is signed by the Plaintiff as also by his advocate. In that statement the Plaintiff has prayed that without prejudice to his contentions regarding the truth, legality and enforceability of the alleged leasehold rights of Neelacanda Iyer under Ex. I Defendant 1 may be directed to execute a sale deed in respect of all the plaint properties as an alternative to the plaint prayer. Such a part performance of the contract under Ex. D is asked for under the latter part of Section 15 Specific Relief Act and as required by the proviso to that section the Plaintiff has relinquished claims to further performance of the contract and all right to compensation.

In the statement filed by him on 19-1-1953 he has stated as follows:

I agree, in the event of a decision on the lease in favour of Defendant 3, to take all such interests as Defendant 1 had at the time of suit and give up my claim to further performance and all right to compensation either for, deficiency or for the loss or damage sustained by me through the default of Defendant 1, and be satisfied with the specific performance with such other reliefs incidental to the same as the Court may grant.

The rule as enunciated in Section 17, Specific Relief Act is that the Court shall not direct the specific performance of a part of a contract except in cases coming under one or other of the three last preceding sections viz., Sections 14 to 16. The question of the specific performance of a contract in whole or in part can arise only when it is found that the contract itself subsists as valid and legally enforcible contract. It has already been found that the contract which is the basis of the present suit was only a contingent contract and that it fell through on account of the failure of the contingency. There is therefore no contract to be specifically enforced in whole or in part.

Even if the contract under Ex. D is taken to be not a contingent contract, the Plaintiff''s claim for specific performance of part of that contract had to fail for a variety of reasons. The claim for specific performance in part can be sustained only if the same can be brought under Sections 14, 15 or 16, Specific Relief Act. To attract Section 14 the two essential conditions to be satisfied are that the part which should be left unperformed must bear only a small proportion to the whole in value and that the non-performance of the contract in respect of that part must be capable of being compensated by money. So far as contract under Ex. D is concerned, the part which is impossible of specific performance is that part which relates to the immediate delivery of the properties. From the nature of the stipulations in Ex. D and also from the surrounding circumstance which led up to the agreement, it is unmistakably clear that the Plaintiff entered into the bargain with the idea of getting immediate possession of the tile factory. In fact the idea of getting such immediate possession was the very foundation of the contract. In no sense can it be said that the right to get such immediate possession bears only a small proportion to the value of the entire subject-matter.

The total consideration stipulated under Ex. D is a sum of Rs. 90,003/-. In the plaint the claim for mesne profits in respect of the properties covered by the agreement is at the rate of Rs. 30,000/- per year. In the decree passed by the lower Court mesne profit is allowed at the rate of Rs. 15,000/- per year. These figures give an idea of the value of the possessory right in respect of these properties. According to the Plaintiff''s estimate, three years'' possession of the factory is sufficient to recoup the entire sale consideration payable under Ex. D. At the rate fixed by the lower Court such recoupment will be possible only within a period of six years. In view of the period fixed in the lease deed Ex. I and also of the option exercised by the lessee to hold on for a further period of five years, the chance of recovery of possession from the lessee has been put off by a period of six years from the date of Ex. D. The Plaintiff had certainly not bargained for such a contingency when he entered into the agreement for sale. Securing immediate possession: of the factory having been the dominant idea with which the contract was entered into and the value of such possessory right being very substantial when compared with the total amount of the agreed consideration, the case cannot be brought u/s 14, Specific Relief Act so as to justify the passing of a decree for specific performance in part of the agreement for sale by directing the execution of a conveyance in respect of the mere title to the properties.

Section 16, Specific Relief Act also does not apply because the part of the contract to be specifically enforced does not stand on a separate and independent footing from the remaining part of the contract as per the terms embodied in Ex. D. It is clear from these terms that the parties contemplated only a single and indivisible transaction by way of sale with immediate delivery of possession and for effecting such a conveyance the time stipulated was expressly stated to be of the essence of the contract. The consequences to follow from the non-implementation of the agreement for sale in the manner agreed to and within the period fixed, have also been provided for in Ex. D. The several terms contained in Ex. D read as a whole clearly rule out the possibility of splitting up the contract into separate and independent parts and of piecemeal performance of such parts. The deliberate insertion of the provision in Ex. D that time is of the essence of this particular contract, is the surest indication that transfer of title and possession had to be simultaneous and within the specified time, and that the parties did not want this contract to be governed by the normal rules applicable to contracts for sale of immovable properties. The idea of transfer of title alone independent of actual physical possession, is absolutely foreign to the contract under Ex. D.

It remains only to be seen whether the relief under the latter part of Section 15, Specific Relief Act can and ought to be granted to the Plaintiff in this case. This section contemplates cases where the performance of the whole of the contract has turned out to be impossible and where the portion that cannot be performed forms a considerable portion of the whole or does not admit of compensation in money. In such cases the party who is unable to perform the contract as a whole is not entitled to compel specific performance of so much of the contract that is capable of being put into effect. The latter part of the section, however, gives an option to the other party to elect to be satisfied with getting specific performance of that portion of the contract which is possible of being performed. But this election is made subject, to certain conditions. He has to expressly relinquish all claims for further performance of the contract and all right to compensation either for the deficiency or for the loss or damage sustained by him through the default of the Defendant.

The section is worded in general terms and there is nothing in it to indicate s to the stage at which the Plaintiff has to make his choice. Even though the proper course for the Plaintiff would, be to make up his mind and to ask for the restricted relief afforded by the latter part of Section 15, even at the time of the institution of the suit the section does not preclude himfrom asking for such a relief at any subsequent stage of the suit, provided that his conduct all through has been free from blame and that no charge of mala fides could be justly attributed to him. The relief contemplated by this section is essentially an equitable relief which the Court, on a proper exercise of its judicial discretion, may or may not grant. The party who claims such equitable relief must satisfy the Court that he has all along been acting in a fair and reasonable manner and that he has not been attempting to get an undue advantage to himself at the sacrifice of the legitimate interests of the opposite party.

So far as the present case is concerned, it cannot be said that the Plaintiff has come to Court with a straight and honest case. The agreement for sale was entered into by him with full knowledge of the subsisting lease arrangement under Ex. I in favour of Neelacanda Iyer and also with the consciousness that unless the lessee agreed there was no chance of securing possession of the properties from him before the expiry of the full term available under the lease deed Ex. I and before settling the lessee''s claim for the value of improvements effected by him on the properties. The Plaintiff ignored the lease altogether when he instituted the present suit and made an attempt to dispossess the lessee even without making him a party to the suit. Even after the lease was proved in the case and the lessee''s assignee got himself impleaded as an additional Defendant in the case, the Plaintiff was not prepared to concede the truth and the reality of the situation, but persisted in denying and repudiating the lease. Even up to the final stage of the arguments in these appeals, the Plaintiff has been insisting on his claim to get recovery of possession of the properties in utter disregard of the lessee''s right.

In the statement filed by him on 19-1-1953 claiming the relief u/s 15, the same attitude has been maintained by the Plaintiff. That statement itself opens by saying that it is without prejudice to his contentions "regarding the truth, legality and enforcibility of the leasehold right of K.S. Neelacanda Iyer under Ex. I". The claim for the relief claimed u/s 15 is also put forward as a conditional claim i.e., a claim to be granted in the event of the ultimate decision on the question of the lease being in favour of Defendant 3. It has been definitely found that the position taken up by the Plaintiff in respect of the lessee in question is absolutely false and untenable and that the Plaintiff is guilty of the utmost bad faith in his insistence to maintain such a position and in trying to defeat the lessee''s interests in the properties. The Court will be disinclined to grant the equitable relief urged on behalf of such a Plaintiff particularly when the same is urged at the very last stage of the litigation and as the result of a consciousness that the falsity of the claim as urged in the plaint stands exposed.

In - Subbrayadu v. Tatayya 1937 Mad WN 1158 (J), the Plaintiff''s claim for specific performance of an agreement for sale was disallowed on the ground that he had set up a false case in support of his claim. It. was further held that a Court of equity cannot be expected to exercise its discretion in favour of such a Plaintiff in the matter of granting the equitable relief by way of specific performance. The Plaintiff in the present suit being in a worse position, his belated prayer for a decree for specific performance of a portion of the contract under Ex. D has to be disallowed.

A Plaintiff seeking relief under the latter part of Section 15, Specific Relief Act has to strictly comply with the conditions specified in the proviso to that section. In the statement filed by the Plaintiff on 19-1-1953 urging the alternative relief by way of a decree for partial performance of the contract, he has made several reservations and the relief claimed is expressly made subject to those reservations. Even though he has agreed to give up his claim for further performance and all right to compensation either for the deficiency or for the loss or damage sustained by him through the default of Defendant 1, what he has mentioned at the close of the statement is that he will be satisfied with a decree for specific performance of so much of the contract as Defendant 1 could perform, together with "such other relief incidental to the same as the Court may grant". Such reservations and qualifications are inconsistent with the unconditional undertaking required by the proviso to Section 15 from a Plaintiff seeking the special relief the granting of which is permitted by the latter part of that section. In this view of the matter also, the Plaintiff''s claim for partial performance of the contract must fail.

On behalf of the Appellants it is urged that the Plaintiff is not entitled to invoke the aid of Section 15, Specific Relief Act in view of the special provisions contained in Ex. D the agreement for sale. The argument is that Sections 14 and 15, Specific Relief Act are only intended to cover cases where the inability to perform the whole contract was not contemplated by the contracting parties and that these sections have no application where the obstacle to the full performance of the contract was known to the parties and yet no provision was made to meet the eventuality. Reliance is placed on the ruling in - Shardaprasad v. Sikander AIR 1915 Nag 15(K), in support of this position.

In that case also the occupancy rights over the property agreed to be sold could not be transferred to the Plaintiff as contemplated by the parties, to the contract because such transfer could be made only with the requisite sanction u/s 45, C.P. Tenancy Act and because the Defendant''s application for such sanction had been refused by the authorities concerned. The question for consideration was whether the Plaintiff''s offer to accept the sale without the occupancy rights over the property on payment of the whole consideration could be accepted and a decree for specific, performance of so much of the contract could be granted in his favour. On the facts the Courts found that the parties were fully aware of the possibility of the contract becoming impossible of performance on account of the failure to obtain the requisite sanction for the transfer of the occupancy rights over the property agreed to be sold, but did not care to provide for such a contingency.

In considering the question as to how far Sections 14 and 15, Specific Relief Act could be made applicable to such a situation, it was ruled in that case that these sections apply only to cases where the inability to perform the whole contract was not contemplated by the contracting parties, and not to cases where the contracting parties know of and contemplated the possibility of the whole contract being incapable of performance, for reasons beyond the control of either party. It appears to us that this is too broad a proposition and with all respect to the learned Judge who decided that case, we have to point out that there is nothing in Sections 14 and 15 to warrant any such limitations and restrictions being placed on their scope and applicability. The sections being worded in general terms, they must apply to all cases coming within their scope unless the parties have expressly contracted out of the provisions of those sections. The provisions contained in these sections are intended merely to confer certain rights and benefits on parties to contracts for sale of immovable properties; but these provisions do not involve any questions of public policy. It is, therefore, perfectly open to the contracting parties to waive the benefits conferred by these sections and to restrict and regulate their rights by inserting suitable provisions in the contract.

Construing the several provisions contained in Ex. D as a whole, it is clear that the parties to this contract did not want to avail themselves of the general rights conferred by Sections 14 to 16, Specific Relief Act, but wanted to restrict their rights and liabilities within the limits expressly provided for in Ex. D. It is clear that they conceived of a contingency of the sale with immediate delivery of possession becoming impossible within the time stipulated in Ex. D and accordingly to meet the situation that may come about on account of Defendant 1''s inability to effect the sale in the manner agreed to, it was provided that in addition to the returning of the earnest money he must pay a sum of Rs. 5003/- by way of liquidated damages to the Plaintiff; No doubt an ordinary provision for damages in an agreement for sale cannot by itself be construed to mean that the parties have abandoned their right to insist on specific performance of the contract and have elected to be satisfied with a claim for recovery of damages. It has to be seen whether there are other decisive provisions in the contract to indicate that the parties had really bargained for a settlement of their disputes with the payment of the agreed amount by way of damages.

Such decisive provisions contained in Ex. D are the provision by which time was expressly stipulated to be of the essence of the contract and the provision defining the agreed amount of Rs. 5003/- as the liquidated damages payable by the Defendant. Even if a period has been fixed for the execution of the sale deed the Plaintiff could under normal circumstances have asked for specific performance of the agreement within a reasonable time after the expiry of that period, because in the absence of an express provision in the contract, time will not be taken to be of the essence of the contract for the sale of immovable properties. In this case a comparatively short period was fixed for the execution of the sale deed and the parties deliberately inserted a provision in Ex. D that time should be of the essence of this particular contract. This shows that if sale with immediate possession was possible it had to be effected within the time fixed and not at any time thereafter.

This provision taken along with the provision for payment of a sum of Rs. 5003/- as liquidated damages in cases of Defendant 1''s failure to effect the sale within the time fixed, clearly shows that the parties have deliberately contracted out of the provisions of Sections 14 to 16, Specific Relief Act and that by waiving the general rights available under these sections they have restricted their rights to the special provisions inserted in Ex. D. Where the terms of the contract are thus clear and specific as defining and regulating the rights of the parties to it, they have to stand by such express provisions and are not entitled to ignore those provisions and to seek to enforce the rights normally available under the general law of contracts. Consistent with this view it has to be held that Ex. D does not permit of a relief by way of specific performance of the contract in part u/s 15, Specific Relief Act.

There is yet Anr. reason why specific performance of the contract under Ex. D cannot be decreed. Some of the items covered by the agreement for sale consist of movable properties. These also were surrendered to the lessee under Ex. I when that lease arrangement was entered into on 1-1-1117. It is not now known as to whether these items do not really exist and if so in what condition. At any rate, Defendant 1 is not now in a position to deliver these items to the Plaintiff. Without such delivery, there could be no completed sale in respect of these movable properties. The Plaintiff has not stated that he h prepared to accept the sale in respect of Defendant l''s title to the remaining items of immovable properties only. So long as it is not possible for Defendant 1 to hand over these movables to the Plaintiff and to effect a sale of them, the provision in Ex. D that the Plaintiff should execute a mortgage in favour of Defendant 1 in respect of all the properties to be included in the sale deed, to secure the deferred consideration of Rs. 35,000/-, cannot also be implemented.

As a result of the foregoing discussion we have arrived at the following conclusions on the questions involved in points 2 and 3 formulated by us. The contract under Ex. D was only a contingent contract to come into effect only in the event of the lessee under Ex. I agreeing to surrender possession of the properties within the period fixed for the execution of the sale deed. This contingency failed and the contract became impossible of performance on account of the lessee''s refusal to make surrender of the properties within that period in spite of all possible attempts made by Defendant 1 to induce the lessee to make such surrender and thus the contract fell through. The Plaintiff is not entitled to get a decree for specific performance of this contract in its entirety or even in part.

Before proceeding to consider the fourth point, two other contentions raised in the case by the contesting Defendants may also be mentioned. These are that the contract under Ex. D is vitiated by a mutual mistake as contemplated by Section 20, Indian Contract Act and that the Plaintiff was not ready and willing to perform his obligations under the contract. The failure of the contracting parties to take note of the right of the lessee under Ex. I to get compensation for all his improvements in the properties and to make provision for the same in Ex. D is according to the Defendants the mistake which vitiates the contract. It has come out from the evidence in the case that both parties were conscious of the rights of the lessee and it was the result of a deliberate design on their part that nothing was mentioned in Ex. D about the lease arrangement of the rights of the lessee. Therefore it cannot be said that the agreement was entered into under any mistake. It cannot also be said that even if there has been any mistake as contended by the Defendants it was in respect of any fact essential to the agreement under Ex. D.

It could only be said that the parties had formed an erroneous opinion as to the real value of the subject-matter of the agreement as a result of not providing for the settlement of accounts with the lessee. Any such erroneous opinion will not be deemed to be a mistake vitiating the agreement and this position is made clear by the Explanation to Section 20, Contract Act. The other contention is also equally untenable. The Plaintiff had raised the necessary funds to be paid by way of consideration at the time of the execution of the sale deed and he had purchased the necessary stamp papers within the stipulated time. These papers have been produced in the case. He had also intimated that fact to Defendant 1 by issuing the lawyer''s notice Ex. E. The Pass Book Ex. H in the Plaintiff''s name shows that he had to his credit in the South Indian Bank Ltd., Pollachi, the amount required for advancing the ready cash consideration under the sale deed contemplated by Ex. D. In view of these facts and circumstances, it is clear that there is no force at all in these contentions raised by the Defendants. The lower Court was, therefore, right in repelling these two contentions.

Coming to the fourth point, the first question for consideration is whether the Plaintiff''s claim for mesne profits is sustainable. In view of our finding that the agreement for sale itself has fallen through, there is no necessity to consider this question at all. Even otherwise the Plaintiff could sustain such a claim against the Defendants only by making out that they are persons in wrongful possession of the suit properties. So long as the lease arrangement under Ex. I is subsisting, it cannot be said that the lessee or his assignee is in wrongful possession of the properties covered by the lease deed Ex. I. The ownership of these properties continued to vest in Defendant 1 even at the time of the suit. The Plaintiff has at best only an agreement for sale in his favour. Such an agreement has not the effect of transferring any legal or equitable estate in favour of the Plaintiff.

This position is made clear by the last clause to Section 54, T.P. Act where it is stated that a contract for sale of immovable properties does hot, of itself, create any interest in or charge on such properties. In this respect the Indian Law is different from the English Law which recognises an equity able estate in favour of a party who has entered into a contract for the sale of immovable property. Under the Indian Law such a person gets only a right to compel the other party to execute a sale deed in respect of the property and unless and until such a sale deed is actually brought into existence by act of parties or under a decree of Court, the party who has contracted for the purchase cannot be said to have acquired an ownership over the property. The Plaintiff in this case not having acquired any such ownership his claim for recovery of mesne profits in respect of the suit properties from the Defendants in the case is clearly unsustainable. In this view of the matter the question as to what would be the correct rate of mesne profits due in respect of the suit properties does not arise for consideration.

The next aspect to be considered is whether the Plaintiff is entitled to get any amount by way of damages in this case. Here again the question of damages can arise only when there is a subsisting contract. We have definitely found that the agreement under Ex. D was only a contingent contract and that on account of the failure of the contingency resulting in the contract becoming impossible of performance, the whole contract fell through. Thus it cannot said that there has been breach of contract the part of Defendant 1 with the consequent liability for payment of damages. The provision in Ex. D for payment of Rs. 5003/- as ''Nikar nashtam'' or liquidated damages, could be invoked by the Plaintiff only if the contract itself subsisted and Defendant 1 defaulted to perform it. That provision expressly refers to Defendant 1''s default in the matter of completing the sale, as the basis of his liability to pay Rs. 5003/- as "Nikar Nashtam" or liquidated damages. This amount cannot be awarded as damages in favour of the Plaintiff in view of the finding that there has been no default on the part of Defendant 1 in the matter of completing the sale. The Plaintiff can get only a refund of the earnest money paid by him. Defendant 1, has expressed his readiness and willingness to pay back this amount of Rs. 5003/-. Under such circumstances we think that the Plaintiff can be given a decree for the said amount in this suit itself, and that it is not necessary to drive him to a separate suit for the recovery of the same.

Thus our findings on Point No. 4 are that the Plaintiff''s claim for mesne profits is unsustainable and that he can get a decree only for recovery of the earnest money of Rs. 5003/- paid f under Ex. D, from Defendant 1.

Lastly there is the question of costs. Defendant 3 has completely succeeded in his defence of this suit. It was the Plaintiff''s attempt to totally ignore the lease arrangement under Ex. I and to get recovery of possession of the properties without a due termination of the lease that necessitated Defendant 3 entering appearance in this suit for the purpose of establishing the possessory right of the lessee and thus to resist the Plaintiff''s attempt to get recovery of possession of the properties. Defendant 3 is therefore entitled to get his full costs from the Plaintiff. So far as Defendants 1 and 2 are concerned, they stand in the same position, Defendant 2 having only obtained an assignment of Defendant 1''s rights over the suit properties during the pendency of, this suit. As against these Defendants also the Plaintiff has failed in his claim for a decree for specific performance of the agreement for sale as embodied in Ex. D and he gets only a decree for recovery of the earnest money of Rs. 5003/- from Defendant 1. The Plaintiff will therefore get his costs of the suit only to the extent of this amount, but has to pay the costs of Defendants 1 and 2 to the extent of the balance of the plaint claim.

Two points raised by the Plaintiff-Respondent in his memorandum of objections may also be disposed of in this connection. The first point relates to the sum of Rs. 20.00/- deposited by him in Court to meet the expenses of the working of the tile factory by the receiver appointed in this, case. It is contended on behalf of the Plaintiff'' that this amount should also be included in the costs to be awarded to him in this case. The next point relates to the sum of Rs. 100/- deposited by him to meet the expenses of the commissioner deputed to prepare an inventory in respect of the tile factory and its accessories. He claims tills amount also as costs due to him. Both these amounts will be included among the different items of costs incurred by the Plaintiff; but these items of expenses were unnecessarily incurred by him at his own risk and therefore he has to suffer such costs.

In the result A.S. No. 450 of 1952 is allowed and so far as Defendant 3 is concerned his claim to retain possession of the suit properties on the strength of the lease deed Ex. I followed by the deed of assignment Ex. XLIII, is upheld and the Plaintiff''s suit directed against such possession is dismissed. Defendant 3 will get his costs throughout from the Plaintiff. A.S. No. 454 of 952 is also allowed and the lower Court''s decree directing specific performance of the contract for sale as embodies in Ex. D is set aside and the Plaintiff''s suit is dismissed so far as it relates to the claim for specific performance. But the Plaintiff is given a decree for recovery of a sum of Rs. 5003/-. (rupees five thousand and three only) representing the earnest money paid under Ex. D, from Defendant 1. The Plaintiff will get his costs in this Court as well as in the lower Court in respect of this amount. In other respects the Plaintiff will suffer his costs throughout.

The amount decreed will carry future interest at the rate of 6 per cent per annum. Excepting to the extent of the amount of Rs. 5003/- decreed in favour of the Plaintiff Defendants 1 and 2 will get their costs from the Plaintiff in proportion to the value of the balance of the plaint claim. These Defendants together will get only one set of costs in the lower Court. So far as the costs in this Court are concerned, Defendant 2 Appellant alone is entitled to get the costs of A.S. 454 of 1952 to the extent specified above. The memorandum of objections is dismissed except to the extent indicated in the previous paragraph of this judgment.