Mudaliar & Ors Vs. Mrs. Rajabu F. Buhari & Ors  INSC 221 (17 April 1995)
B.L. (J) Hansaria B.L. (J) Ramaswamy, K. Manohar Sujata V. (J) Hansaria, J.
1995 AIR 1607 1995 SCC (4) 15 JT 1995 (3) 614 1995 SCALE (2)720
This litigation is about three and half decades old by now inasmuch the suit
for specific performance for reconveyance 618 of the property sold by the
plaintiff was filed in 1962. It was decreed by the trial court (a single Judge
of the Madras High Court) on 10.11.65. The letters Patent Bench, however, on
appeal being preferred, set aside the decree on 10.5.72.
appeal by special leave by the plaintiff. As the plaintiff died in 1990, his
legal representatives have pursued the appeal. It may also be stated that
during the pendency of this appeal the appellants assigned their right to two
outsiders sometime in September, 1988. We would have, therefore, to see, in
case we were to agree with the plaintiff regarding there having been a contract
for reconveyance, which is the real bone of contention between the parties,
whether in view of the aforesaid assignment, a decree for specific relief is
still called for, keeping in view the fact that such a relief is discretionary.
may note relevant facts. These are that the original plaintiff, SV Ramakrishna Mudaliar,
was a man of means at one point of time, to run into rough weather, which
required mortgage of some of his properties. It is to repay the mortgage debt
that the plaintiff sold two of his properties ostensibly to Mrs. Rajabu Fathima
Buhari (Mrs. Buhari) described in Schedules 'A' and 'B' of the plaint.
sale deeds in respect of these properties were executed on 26.3.59 (Ex.P 2) and
31.3.59 (Ex.P.3); both were, however, registered on 31.3.1959. The plaintiff's
case is that before these properties had been sold there was a 'gentleman's
understanding' between him and Mr. Buhari, husband of Mrs Buhari, on 24.3.59
that in case the purchase amounts as per the sale deeds were repaid within
three years, the properties would be reconveyed, when in addition to sale
price, 10% thereof shall be paid as solatium of the actual amount spent on
improvement, if any. This understanding was put in writing subsequently under
the title "Record of fact", which was exhibited during the course of
the trial as Ex.P1. Plaintiff's another case was that though the sale deeds
were in the name of Mrs. Buhari, the real purchaser was Mr. Buhari. To put it
differently, Mrs. Buhari was only an ostensible owner. The third important
facet of the plaintiff's case was that Ex.P1 had been signed by one Kamal as an
agent of the couple, who were impleaded as defendants in the suit. As, however,
of the two properties sold, only one, styled as 'Serles Garden' was reconveyed
in May, 1960, the suit was filed for seeking a decree for the reconveyance of
the second property, described in Schedule 'A' to the plaint.
already noted the trial court decreed the suit, which decree came to be
reversed in appeal by the Letters Patent Bench. The following questions are to
be answered to dispose of the appeal:-
Ex.P1 is a genuine document. This needs determination because the Letters
Patent Bench has allowed the appeal of the defendants principally on the ground
that this document is a result of fabrication.
the aforesaid document be genuine, whether Kamal who is said to have signed the
same was an agent of the de- fendants.
the understanding given by Mr. Buhari, could be enforced against Mrs. Buhari. This
would also require determination of the question whether Mrs. Buhari was a name
case the factual basis of the plaintiff's case be correct, the legal question
to be decided would be whether in the facts and circumstances of the case, more
particularly the assignment of the right by the successors- in-interest of the
plaintiff in favour of third persons, granting of the relief of specific
performance is called for, which the statute has left to the discretion of the
Letters Patent Bench of the High Court regarded Ex.P1 not as a genuine document
mainly because Exs.P.2 and 3 do not contain a stipulation regarding the reconveyance
of the properties sold by the plaintiff. Not only this, even Ex.P. 15, by which
Selers Garden was resold, does not mention about the same having been done
pursuant to any contract of reconveyance. This apart, as in support of proof of
Ex. P. 1, the plaintiff had examined, apart from himself, his agent Narayana lyer,
the appellate court did not fell satisfied about there being credible evidence
in this regard. It may be mentioned that when the trial began, another
signatory to P.1, Shri VS Rangachari, who had played prominent part throughout,
having died was not available for examination. The only other signatory to Ex.P.
1 is aforesaid Kamal, who could not be examined by the trial Judge even as a
Vaidyanathan, learned counsel representing Mrs. Buhari, has, apart from
mentioning about silence of Exs.P.2, 3 and 15 relating to any agreement of reconveyance,
urged that the evidence adduced in the case by the plaintiff would itself show
that P. 1 had not seen the light of the day on 24.3.59. The basic submission in
this regard is that his document was described by PW 1 Narayana in his evidence
as 'letter'. We do not think if we should go by labels, because even if it was
a letter which came into existence that shows that something in writing had
been put on record;
may because of this that P. 1 was described as 'record of fact' and it being on
a letterhead of the plain- tiff, might have loosely described as
"letter" of PW 1.
to why in Exs.P.2,3 and 15 no mention was made about P.1, has been sufficiently
explained by PW2 (the plaintiff) in his evidence, whose purport is that Shri Rangachari
who had played a vital role in the entire episode, had advised accordingly. The
evidence clearly shows that Rangachari was a legal advisor both to the
plaintiff and Mr. Buhari. On PW2 being specifically asked as to why Exs.P2 and
P3 did not contain the recital about reconveyance, his answer was:
I wanted it to be included in the sale deed.
told that the gentleman's agreement is binding on Mr. Buhari to reconvey the
property and so need not be included in the sale deed".
Salve, appearing for Mr. Buhari, puts his weight (and he has enough of it) to
the submissions of Shri Vaidyanathan and asks why is it that P. 1 was not
signed by Buhari; and why is it that the plaintiff himself did not sign the
same? The queries do not stop here as, the fulcrum senior lawyer asks why was
the sale not in the nature of conditional sale? When first two questions were
put to the plaintiff his short, simple and unsophisticated answer was that the
confidence-inspiring advocate Rangachari had stated that signing by the two
agents in the presence of the two principals would meet the requirement of law.
And it does, as acts done by agents within the permitted field do bind the
principals. The first two questions raised by Shri Salve may be answered also
by pointing out that we have seen lesser mortals signing big inter-country
agreements in presence of higher-ups. The third poser is no doubt pertinent,
but as there are many ways of getting a thing done, all concerned might have
thought that instead of making the sales conditional, for reasons not quite
known, the situation demanded that the arrangement of the type gone into was
better suited. All important question is whether parties were ad idem; if so,
how did they express their meeting of mind is not material. And on their
agreeing as recorded in P. 1, we are in no doubt.
case of the plaintiff in this regard receives support from P.28 which is a
letter from the plaintiff to Mr. Buhari, dated 1st Feb. 1961, which mentions about the understanding in question. Though
the Division Bench of the High Court has held that Ex.P.28 is also fabricated
document, we find ourselves unable to agree with it on this point. There is
some force in the case of the plaintiff that the defendants challenged about
the understanding in question after the death of Rangachari.
According to us, therefore, it would not be correct to doubt the existence of
P. 1 because of non-mentioning about any stipulation to reconvey in Exs. P2 and
3 and for that matter for Ex.P. 15 having not mentioned about it- nor do the
questions raised by Shri Salve take away the ring of ,truth, the plaintiff's
case has in this regard. So, we hold that P. 1 is a genuine document, as opined
by the trial Judge.
KAMAL WAS AN AGENT OF THE DEFENDANTS 10.We come to the role played by Kamal.
According to the plaintiff full name of Kamal who had signed Ex.P1 is MH. Kamal,
son of MS Mohammed Hasan, who at the relevant time was residing at Nos.5/ and
58, 3rd Main Road, Gandhi Nagar.
the second defendant, who alone appeared in the witness box, there were many Kamals
in his employment and the signature appearing in P. 1 is not MH Kamal, who at
some point of time was in employment of the defendants.
trial Judge has dealt with this aspect in detail and to find out the truth as
to whether ME Kamal has signed PI, he even wanted to examine this Kamal as a
court witness; but, according to him, Kamal was kept out by the defendants,
because of which some adverse inference has been drawn against them by him.
Parasaran, appearing for the appellants, fully supports the finding of the
trial Judge in this regard and, according to him, law permits an adverse
inference to be drawn, where a party in possession of best evidence withholds
the same, even if the onus of proving the fact in question were not to be on
him. To support him on the legal submission, the learned counsel has relied on
a three-Judge Bench decision of this Court in Gopalakrishnaji v. Mohammed Hazi Latiff,
AIR 1968 SC 1413. In that case this Court while stating as above observed that
a party cannot rely on abstract doctrine of onus.
According to the learned counsel for the respondents, the case of the
defendants on this score finds support from none 621 other than aforesaid Kamal,
if what has been stated by him in his affidavit filed before this Court is
borne in mind.
affidavit is a part of IA No.2, in which the prayer Is to direct examination of
MH Kamal as a witness in the appeal. Shri Salve has drawn our attention to the
account of salary and batta paid to Kamal, as mentioned in the enclosure to the
affidavit, according to which, for the year 31.3.63 batta paid was Rs. 124 and
salary was Rs. 525. The learned counsel brings to our notice that in earlier
years the batta had ranged about four times more and the salary more than that,
which would go to show that after 31.3.62 Kamal was in the service not upto
31.3.63, but for a few months after 31.3.62, as in the case of the defendants.
seems to be some force in this contention.
We, therefore, do not propose to decide this fact by drawing any adverse
inference against the respondent- but would do so on the basis of evidence led
by the plaintiff As already stated, this evidence has received better treatment
at the hand of trial Judge, who, while holding that Kamal had acted as an agent
of the defendants, referred to many circumstances also. Shri Parasaran has
submitted that though the appellate court is within its right to take a different
view on a question of fact, that should be done after adverting to the reasons
given by the trial Judge in arriving at the finding in question. Indeed,
according to Shri Parasaran an appellate court should interfere with the
Judgment under appeal not because it is not right, but when it is shown to be
wrong, as observed by three-Judge Bench of this Court in Dollar Co. v.
Collector of Madras, 1975 Supp. SCR 403. As to this observation, the contention
of Shri Vaidyanathan is that what was stated therein was meant to apply when
this Court examines a matter under Article 136.
not, however, think if this meaning can be ascribed to what was observed.
is no need to pursue the legal principle, as we have no doubt in our mind that
before reversing a finding of fact, the appellate court has to bear in mind the
reasons ascribed by the trial court. This view of ours finds support from what
was stated by the Privy Council in Rani Hemant Kumari v. Maharaja Jagadhindra Nath,
10 CWN 630, wherein, while regarding the appellate judgment of the High Court
of Judicature at Fort William as "careful and able", it was stated
that it did not "come to close quarters with the judgment which it
reviews, and indeed never discusses or even alludes to the reasoning of the
Subordinate Judge." 16.Shri Salve has taken pains to satisfy us that it is
not quite correct to submit that the Division Bench did not take note of
circumstantial evidence noted by the trial Judge.
satisfy us in this regard, our attention has been invited to what was stated by
the Bench at page 291 of Vol. 11. As perusal of this part of the appellate
judgment shows that two circumstances mentioned by the trial Judge were traverssed,
but all were not. This apart, first circum- stance was not regarded as
connecting Kamal with the defendants mainly because the Bench was not satisfied
if Kamal who had taken part in the documents marked as Ex. P9, 10, 64 and 65,
and the Kamal referred in PI are the same.
not, however, think that this view is sound because though the defendants might
have had many Kamals as employees but they had only one employee, named MH. Kamal,
622 son of Mohammad Hasan, and it is this Kamal who had signed Ex.P. 1. As to
the second circumstance relatable to issuance of Ex.P.28, we have already
observed that we do not agree with the view of the Division Bench qua this.
MRS. BUHARI WAS A BENAMIDAR OF MR. BUHARI
trial Judge has answered this question in favour of the plaintiff-, the
Division Bench has observed that it is not necessary to advert to this aspect
of the case of the plaintiff. We also propose to traverse the path taken by the
appellate court and resist from giving our finding on this aspect of the case.
We have taken this stand because we are satisfied about the genuineness of Ex.P.
1; so also about Kamal who had signed the same as being an agent of the
defendants, because of which the understanding recorded in Ex.P. 1 has to be
regarded as binding on the defendants.
the sake of completeness, we may also observe that the understanding having had
consent of Mr. Buhari, and there being evidence a-galore about Mr. Buhari
acting as an agent of Mrs. Buhari, there is nothing to doubt that the
understanding given by Mr. Buhari has to be regarded as bindIng on Mrs. Buhari.
The leading role played by Mr.
in the entire episode is writ large and there is no escape from the conclusion
that the consent of Mr. Buhari has to be regarded as a consent given by Mrs. Buhari.
therefore, conclude that there did exist an understanding to reconvey two
properties as recorded in the document executed on 24.3.59. This conclusion of
ours receives support from reconveyance of 'Serles Garden' within the period of 3 years as
stipulated in Ex.P.1 and that too at the added solatium of 10%. Ibis property
having been sold at Rs.85,000, 10% of the same comes of Rs. 8,500/- and Ex.P. 1
5 evidences the sale at Rs. 95,000/-Though it is correct that Rs.85,000/- and
10% of that comes to Rs.93,500/-, it may as well be at this figure was rounded
to Rs.95,000/ In this context Shri Vaidyanathan's submission, however, is that
'Serles Garden' was sold back, not pursuant to the agreement to reconvey, but
because Mrs. Buhari could not get a lessee despite advertisement having been
put in 'The Hindu' and 'The Mail', as evidenced by Exs. D 1 to D4.
this contention has some cutting edge, we were inclined to think, on the
totality of facts, that the transfer of Serles Garden back to the plaintiff was
in discharge of the legal obligation contained in P. 1, as both the period
during which it was transferred and for the sum it was so done, fit in well
with the terms embodied in P. 1.
CASE FOR SPECIFIC PERFORMANCE MADE OUT IN LAW? 19.Being satisfied that the
parties had agreed as recorded in Ex.P 1, the question to be examined is
whether the agreement of the type at hand, described as " gentlemen's
understanding" in Ex.P.1, permitted the plaintiff to seek a decree for
specific performance. According to learned counsel for the respondents, the
agreement has created no legal obligation and as such is not agreement, even if
en- forceable, can be so done only against the executable of the original
contract. The final submission is that the remedy of specific performance being
discretionary, the same may not be granted at this length of time; more so,
when the appellants have 623 assigned their interest to some outsiders.
far as the first submission is concerned, we agree that it is a valid and
enforceable contract which is the basis for the jurisdiction to order specific
performance, as pointed out in Mayawanti v. Kaushalya Devi, 1990 (3) SCC 1.
point for determination is whether the agreement as recorded in Ex.P1 is
enforceable. It has been contended on behalf the respondents that while
agreeing as embodied in the document the parties had no intention to create any
legal interest, because of which the agreement cannot be enforced. Strong
reliance has been placed, in support of this submission, on the decision of
House of Lords in Rose and Frank Co. v.J.R. Crompton & Bros. Ltd., 1924 All
E.L.R.(Reprint) 245. In that case, after noting what had been agreed upon, the
House of Lords came to the conclusion that the parties had not intended that
the document should be legally enforceable.
the aforesaid decision was arrived at on the basis of what was contained in the
document, it would be pertinent to note the clause in question, which read as
arrangement is not entered into, nor is this memorandum written, as a formal or
legal agreement, and shall not be subject to legal jurisdiction in the law
courts either of the United States or England, but it is only a definite
expression and record of the purpose and intention of the three parties
concerned, to which they each honourably pledge themselves with the fullest
confidence based on past business with each other that it would be carried
through by each of the three parties with mutual loyalty and friendly co-
The decision being on the facts of the case cannot apply to facts here which a
different; and we do think that what agreed upon in the present case is much
different, as would appear from Ex.P 1 which reads as below:
of fact This is to record the gentleman's under- standing between Mr. S.V.R.
and Mr. A.M. Buhari that Mr. Buhari will see to it that in case the purchase
amounts as per the sale deeds in favour of Mrs. A.M.B. Buhari is repaid within
3 years from this date, the properties will be reconveyed to Mrs. S.V.R. who
will also have to pay in addition to sale price 10 per cent thereof as solatium
of the actual amount spent on improvement if any."
The aforesaid shows that though what has been recorded was described as "gentlemen's
understanding", according to us, the understanding was such which was
meant to be acted upon. We have taken this view because terms and conditions of
reconveyance have been clearly mentioned and document was executed by the
agents of both the sides. It was, there- fore, intended to create legal
obligation. In this context, Shri Parasaran has brought to our notice a
decision of this Court rendered in Commissioner of Wealth Tax, Bhopal v. Abdul Hussain
Mulla Mohammad Ali, (dead) by LRs., 1988 (3) SCC 562, in which after referring
to the decision of the House of Lords in the aforesaid case and some other
decisions, as well as what has been stated in legal treatise, it was observed
in para 24 that the proposition that in addition to the existence of an
agreement and the presence of consideration, there is also a third element in
the form of intention of parties to create legal 624 relations, is one which
has not passed unchallenged. The Bench observed that it is not possible to
accept the argument that an agreement will not, by itself, yield legal
obligations unless it is one which can reasonably be regarded as having been
made between the parties in contemplation of legal consequences. From the
averments made in Ex.P 1 and the legal position being what has been noted in
this case, we are satisfied that an enforceable contract had come into
existence on the parties executing Ex.Pl. According to us, they were ad idem
and the plaintiff was within his rights to seek specific performance of the
the second legal question raised, we may not spend much time because the prop
of this submission being what was held by this Court in Annapoorani Ammal v. G.
Thangapalam, 1989 (3) SCC 287, whose facts were entirely different, the ratio
of that decision cannot be called in aid by the respondents. In that case the
mother of the appellant who had allegedly executed the 'yadast' was not the
owner of the property because of which it was held that the suit against the
appellant filed for reconveyance of the property on the basis of 'yadast' could
not have been decreed. In our case Ex.P 1 had been executed by Kamal as an
agent of the defendants and what had been agreed upon by him has to bind the
now come to the main legal submission, which is that the relief of specific
performance being discretionary, we may not grant the same for two reasons in
lapse of about 33 years after filing of the suit during which period price of
the property has gone up enormously; and
plaintiff's legal representatives having assigned their right of repurchase. the
assignees are the real person interested in getting back the property, and we
may not allow the same, as what they had purchased was not the property as
such, but litigation, which could be said to be akin to champerty.
Parasaran contends that the relief of specific performance is said to be
discretionary only in the sense that the court may not act arbitrarily and
nothing beyond this, and while exercising the discretion judicial conscience
and judicial statesmanship alone are the guiding facts. That this is the legal
position is sought to be sus- tained by referring to sub-section (1) of section
20 of the Specific Relief Act, 1963, in which, it has been stated that the
jurisdiction to decree the specific performance is discretionary, but the
discretion is not arbitrary; it is sound and reasonable and is to be guided by
judicial principles. As to when the court may not exercise discre- tion to
grant the decree for specific performance has been mentioned in sub-section
(2); whereas subsection (3) states as to when the court may properly exercise
its discretion to decree specific performance. No doubt what has been stated in
these two sub-sections is not exhaustive, but is illustrative, yet the
intention of the legislature has been well reflected, both as regards the
granting of the relief and nongranting of the same. Clause(c) of subsection (2)
states that if granting of specific performance would make it
"inequitable", the court may not grant the relief It is this part of
the statutory provision which is sought to be relied by the learned counsel for
the respondents by contending that it would be inequitable to grant specific
performance for the aforesaid two reasons.
27.In so far as the delay in the disposal of the case and the rise in prices
during interregnum, Shri Parasaran urges that the delay not having been
occasioned by any act of the plaintiff, he may not be punished for the same on
the principle of ' actus curiae neminem gravabit" an act of the court
shall prejudice no man. As regards the rise in prices,, the submission is that
it should not weigh with the court in refusing the relief if otherwise due, as
opined in S. V. Sankaralinga Nagar v. P.I.S. Ratnaswami Nadar, AIR 1992 Madras
389, which decision was cited with approval in Mr. Abdul Hakeem Khan v. Abdul Menon
Khadri, AIR 1972 Andhra Pradesh 178. We are in agreement with this view because
of the normal trend of price in prices of properties situate especially in
metropolitan city like Madras, where the property in question is
situate. If merely because the prices have risen during the pendency of
litigation, we were to deny the relief of specific performance if otherwise
due, this relief could hardly be granted in any case, because by the time the
litigation comes to an end sufficiently long period is likely to elapse in most
of the cases. This factor, therefore, should not normally weigh against the
suitor in exercise of discretion by a court in a case of the present nature.
final onslaught is on the ground that the plaintiffs successors-in-interest
having assigned the right to third parties in the meantime, we may not grant
the relief because the assignees have, as already noted, purchased litigation
and so the transaction could be described as champertous.
however, contends that all assignments pendente lite cannot be regarded as champertous;
the same would depend on the facts of each case. It is also urged that an
assignee has the right to pray for specific performance because he is one who
has to be regarded as "representative-in-interest", of which mention
has been made in clause (b) of section 15 of the aforesaid Act dealing with the
persons who may obtain specific performance. 'Mat an assignee would be such a
person was accepted by this Court in T.M. Balakrishna Mudaliar v. M. Satyanarayana
Rao, 1993 (2) SCC 740.
are of the view that if in a case the act of the third party could be regarded
akin to champertous, the relief of specific performance may be refused; indeed,
should be refused. In the present case, however, we find that the assignees
themselves applied to this Court for impleading them as appellants and put on
record the deeds of assignment, a perusal of which shows that the need for
assignment was It for pressing reasons. There has been no hide an seek with the
court and the legal representatives of the original plaintiff having received a
sum of about Rs. 13 lacs pursuant to the contract of assignments entered
between September to November '1988, we do not think if we would be justified
in refusing the relief of specific performance, if the conduct of the
respondents is also borne in mind, about which one could say that the same is
tainted inasmuch as they departed from truth to bolster their case and went to
the extent of not complying with the desire of the trial judge in allowing
aforesaid Kamal to be examined even as a court witness. Such parties who pay
foul with equity cannot be allowed to use the shield of equity to protect them.
result of the foregoing discussions is that we allow the appeal, set aside 626
the impugned judgment of the Letters Patent Bench and restore that of the trial
Judge and decree the suit for specific performance. The respondents or their
successors- in- interest would reconvey the property mentioned in Schedule 'A'
of the plaint within a period of 1 month, failing which it would be open to the
trial Judge to execute the required document(s). In the facts and circumstances
of the case, the parties are left to bear their own costs throughout.
2 & 5 of 1994 31.I.A. Nos. 1 and 2 are dismissed. I.A. No.5 is allowed;
cause title may be amended accordingly.