Piarey Lal Vs. Hori Lal  INSC 44
(7 February 1977)
CITATION: 1977 AIR 1226 1977 SCR (2) 915 1977
SCC (2) 221
CITATOR INFO :
D 1992 SC1604 (9)
U.P. Consolidation of Holdings Act, 1953, s. 30(b)--Whether
agreement for sale creates liability for tenure-holder "in" original
holding for the purpose of
The appellant Piarey Lal had agreed to sell
his original holding to Hori Lal but later refused to do so on the ground that
his property which was the subject matter of the contract had been consolidated
under the U.P. Consolidation of Holdings Act, 1953, and it was impossible to
perform the agreement. Hori Lal filed a suit for specific performance
contending that the agreement for sale had created a liability for Piarey Lal
for the purpose of section 30(b) of the Act, and the same was transferred to
the new plot or "chak" allotted to him as a result of the
consolidation. The suit was decreed by the Trial Court and Piarey Lal's appeals
before the District Court and the High Court were dismissed.
Allowing the appeal by Special Leave the
HELD: By virtue of s. 54 of the Transfer of
Property Act, the agreement for sale did not give rise to any interest
"in" the original holding of the defendant as the tenure-holder.
There could thus be no occasion for the transfer of any such ,'liability"
in his new land or "chak" so as to attract clause (b) Of s. 30 of the
Act. When he lost that property as a result of the scheme of consolidation, the
agreement for sale became void. [918 C-E] Sagna & Anr. v. Kali Ram &
Ors. 1966 A.L.J. 1004, approved.
Shanti Prasad v. Akhtar & Anr. 1972
A.L.J. 549 and Chettan Singh & Ors. v. Hira Singh & Ors. 1969 A.L.J.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1252 of 1976.
Appeal by special Leave from the Judgment and
Order dated 13-8-1975 of the Allahabad High Court in Second Appeal No. 179/ 75.
K. Gupta, for the Appellant.
S.T. Desai and R.B. Datar for the Respondent.
The Judgment of the Court was delivered by.
SHINGHAL, J.--This appeal, by special leave,
is directed against the summary dismissal of defendant Piarey Lal's second
appeal on August 13, 1975. As the leave has been limited to the question of
interpretation of clauses (a) and (b) of section 30 of the U.P. Consolidation
of Holdings Act, 1953, (hereinafter referred to as the Act), "for the purpose
of deciding whether the liability of the petitioner to specifically perform the
contract of sale of the old holding was transferred to the new 'chak' allotted
to him on consolidation," it will be enough to state the facts which bear
916 Respondent Hori Lal raised the suit for
specific performance of an agreement dated March 6, 1966, for the sale of six
plote of land measuring nine high and six biswas in village Hathiawali, Tehsil
Gannaur. It was alleged in the plaint that Rs. 3000/were paid by the plaintiff
Hori Lal in advance, and the balance of Rs. 2000/was to be paid at the time of
the execution of the sale deed, within one year of the agreement. It was also
pleaded that as defendant Piarey Lal refused to execute the' sale deed, the
plaintiff was driven to the necessity of filing the suit for specific
performance of the agreement for sale and, in the alternative, for the recovery
of Rs. 3000/which had been paid as advance. Defendant Piarey Lal denied the
execution of the agreement for sale and the receipt of Rs. 3,000/-, and pleaded
that as new plots had been allotted as a result of the consolidation of his
holding under the Act, he could not perform the agreement for sale. The trial
court framed issues, inter alia, on questions relating to the execution of the
agreement for sale, payment of Rs. 3000/to the defendant, and the inability of
the defendant to perform the contract. That court held that the plaintiff had
proved the agreement for sale and the payment of Rs. 3000/'-. It also held that
the agreement for sale could be "enforced for plots allotted to the
defendant in lieu of plot mentioned in the agreement in consolidation." It
therefore decreed the suit for specific performance by its judgment dated
August 23, 1973. The Second Additional District Judge, Badaun, upheld the
decree, and as the High Court has dismissed the second appeal as aforesaid,
defendant Piarey Lal has come to this Court for a redress of his grievance by
As has been stated, the limited question for
consideration in this Court is whether the defendant was liable to specifically
perform the contract for sale of his old holding even after its consolidation
and the allotment of a 'chak' ? It appears that there was controversy in the
Allahabad High Court on the question whether an agreement for sale, in the
circumstances of a case like this, was rendered void under section 56 of the
Contract Act because of the order of consolidation allotting new plots for the
earlier plots in respect of which the agreement for sale had been executed. A
Single Judge of that Court took the view in Sugna and another v. Kali Ram and
others(1) that the agreement became void and impossible of performance, and was
not saved by section 30 of the Act. A different view was however taken by
another Single Judge in Chetan Singh and others v. Hira Singh and others(1).
The matter was referred to a Division Bench in Shanti Prasad v. Akhtar and
another.(2) One of the Judges in the Division Bench was the Judge who had given
the decision in Chetan Singh's case.
The Bench held that the duty of the seller to
execute the conveyance of the property agreed to be sold, was a liability
recognised by law and was enforceable as the liability "relates to the
land mentioned in the agreement" and was "transferred to the new
'chak'" under section 30(b) of the Act. The decision in Shanti Prasad's
case formed the basis of the decision of the first appellate (1) 1966 A..L.J.
(2) 1969 A.L.J. 189.
(3) 1972 A.L.J. 549.
917 court in this case, and that appears to
be the reason why the High Court has dismissed the second appeal summarily.
The controversy therefore turns on the proper
interpretation of section 30 of the Act which deals with the consequences which
ensue on exchange of possession as a result of the allotment of a 'chak' to the
Clauses (a) and (b) of section 30 of the Act
provide as follows,-"30. Consequences which shall ensue on exchange of
possession.--With effect from the date on which a tenureholder enters, or is
deemed to have entered into possession of the chak allotted to him, in
accordance with the provisions of this Act, the following consequences shall
ensue-(a) the rights, title, interests and liabilities-(i) of the
tensure-holder entering, or deemed to have entered, into possession, and (ii)
of the former tenure-holder of the plots comprising the chak, in their
respective original holdings shall cease; and (b) the tenure-holder entering
into possession, or deemed to have entered into possession, shall have in his
chak the same rights, title, interests and liabilities as he had in the
original holdings together with such other benefits of irrigation from a
private source, till such source exists, as the former tenure-holder of the
plots comprising the chak had in regard to them." It would thus appear
that while clause (a) deals with the rights, title, interests and liabilities
of the tenureholder entering into possession of the 'chak', as well as of the
former tenure-holder of the plots comprising the 'chak', in their respective
original holdings, and provides that those rights, title, interests and
liabilities. shall "cease", clause (b) provides that the
tenure-holder entering into possession of the 'chak' shall have, in that
'chak', the same rights, title, interests and liabilities "as he had in
the original holdings." The expression 'chak' has been defined in section
3(1-A) of the Act to mean "the parcel of land allotted to a tenure-holder
on consolidation." The two clauses therefore are quite simple and clear,
and' do not raise any real problems of interpretation, but the question is
whether there is justification for the argument, in the facts and circumstances
of this case, that the expression "liabilities" would cover the
liability of the seller (i.e. the defendant), under the aforesaid agreement for
the sale of his original holding ? As is obvious, clause (a) of section 30 does
not bear on the question in controversy because it only provides for the
cessation of the rights, title, interests and liabilities both of the
tenure-holder to whom the 'chak' has been allotted, and of the former
tenure-holder 918 of the plots comprising the 'chak' in their respective
original holdings". There is no controversy that this was so in the
present case. It is also no body's case that the rights, title, and interests
of the tenure-holder entering into possession of his 'chak' have any bearing on
the controversy relating to the specified performance of the agreement for
sale, for all that has been urged before us is that the defendant, as the
tenure-holder of the new holding or 'chak' had the same "liabilities"
in that 'chak' as he had in the original holding.What therefore remains for
consideration is whether, on the defendant's entering into possession of his
new land or 'chak', there was the same liability "in" the new land as
"in" the original holding. It therefore to be examined whether, by
virtue of the agreement for sale, any liability accrued "in" the
original holding ? A cross-reference to section 54 of the Transfer of Property
Act shows that a contract for the sale of immovable property is a contract that
a sale of such property shall take place on terms settled between the parties.
It has however been specifically provided in' the section that such a contract
"does not, of itself, create any interest in or charge on such
property." It would therefore follow that the agreement for Sale in the
present case did not give rise to any interest "in" the original
holding of the defendant as the tenure-holder. That being so, there could be no
occasion for the transfer of any such "liability in" the new land or
'chak' of the defendant so as to attract clause (b) of section 30 of the Act.
In fact what the defendant, was bound to do under section 55(1)(d) of the
Transfer' of Property Act was to execute a proper conveyance of "the
property" which was the subject matter of the contract for sale, and not
of any other property. So when he lost that property as a result of the scheme
of consolidation and his rights, title, interests ceased in that property by
virtue of clause (a) of section 30 of the Act, the agreement for sale became void
within the meaning of section 56 of the Contract Act, and it is futile to urge
that they were saved by clause (a) or clause (b) of section 30 of the Act.
We have gone through the decision in Shanti
Prasad's case (supra), but we find that while the High Court took note of the
fact that the right's, title, interests and liabilities of the tenure-holder
"in" his original holdings ceased, and he acquired the same rights,
title, interests and liabilities "in" the 'chak' allotted to him, it
lost sight of the significance of the word "in", and the aforesaid
provisions of section 54 of the Transfer of Property Act, and disposed of the
controversy before it by raising the other question whether "the
tenureholder" was subject to any liability "in respect of" his
old holding. That was why it fell into the error of holding that a liability
was created in the original holding of the defendant, and was transferred his
'chak' on his entering into its possession.
As has been shown, that was an erroneous view
which has to be rectified.
It may be mentioned that counsel for the
respondent tried to argue that the defendant was bound to execute a proper
conveyance of his original holding, which was the subject matter of the
agreement of sale, because, that holding had been substituted" by the
919 He also tried to argue that the 'chak'
allotted to the defendant by way of consolidation of his holding was the same
as his original holding so that there was no occasion to invoke section 30 of
the Act. Counsel could not however support his argument by reference to the
law, or the facts of the case. Moreover he was unable to show how he could
raise any such argument when the special leave had been limited to the
interpretation of clauses (a) and (b) of section 30 of the Act.
It would thus appear that the plaintiff
respondent's suit for specific performance of the agreement for sale was liable
to dismissal, and the High Court as well as the courts below erred in taking a
contrary view. Counsel for the appellant has however frankly stated at the bar
that the appellant would be willing to refund the sum of Rs.
3000/along with interest at 6 per cent per
annum from the date of payment.
The appeal is allowed with costs, the
impugned judgment of the High Court is set aside, and the suit of plaintiffrespondent
Hori Lal is dismissed in so far as it relates to specific performance of the
agreement for sale. It is however ordered that the defendant shall repay Rs.
3000/to the plaintiff, along with interest at 6 per cent per annum from the
date of payment, within three months from today.
M.R. Appeal allowed.