SALE OF SAME IMMOVABLE PROPERTY IN FAVOUR OF TWO DIFFERENT PARTIES
(A) Specific Relief Act (1877), Ss.23, 27 – Specific performance – Sale of same immovable property in favour of two different parties – Specific performance in favour of first purchaser – Form of decree and nature of direction to be issued to subsequent purchaser.
The practice of the courts in India has not been uniform and three distinct lines of thought emerge. According to one point of view, the proper form of decree is to declare the subsequent purchase void as against the plaintiff and direct conveyance by the vendor alone. A second considers that both vendor and vendee should join, while a third would limit execution of the conveyance to the subsequent purchase alone.
The only statutory provisions which bear on this point are section 91 of the Indian ‘Trusts Act. 1882, section 3 of the Specific Relief Act, 1877 illustration (g) and section 27 of that Act, and section 40 of the Transfer of Property Act.
However, none of this helps because none of these provisions directly relate to the form of the decree.
First, we reach the position that the title to the property has validly passed from the vendor and resides in the subsequent transferee. The sale to him is not void but only voidable at the option of the earlier “contractor”. As the title no longer rests in the vendor it would be illogical from a conveyancing point of view to compel him to convey to the plaintiff unless steps are taken to re-vest the title in him either by cancellation of the subsequent sale or by reconveyance from the subsequent purchaser to him.
No case brought to the knowledge of court in which a reconveyance to the vendor was ordered but in Kali Charan vs. Janak Deo, AIR 1932 All 694, Court directed cancellation of the subsequent sale and conveyance to the plaintiff by the vendor in accordance with the contract of sale of which the plaintiff sought specific performance.
Though this sounds logical, the objection to it is that it might bring in its train complications between the vendor and the subsequent purchaser. There may be covenants in the deed between them which it would be inequitable to disturb by cancellation of their deed. Accordingly, that is not a desirable solution.
As regards the next alternative, namely, conveyance by the subsequent purchaser alone to the plaintiff, it is true that would have the effect of the vesting the title to the property in the plaintiff but it might be inequitable to compel the subsequent transferee to enter into terms and covenants in the vendor’s agreement with the plaintiff to which he would never have agreed had he been a free agent; and if the original contract is varied by altering or omitting such terms the court will be remaking the contract, a thing it has no power to do; and in any case it will no longer be specifically enforcing the original contract but another and different one.
The proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff.
AIR 1931 Cal 67, (1846) 67 ER 1057 Ref. to. [Para 37,42]
(B) Specific Relief Act (1877), Ss.3(g), 23, 27 – Specific performance – Decree in favour of first purchaser – Entitlement of subsequent purchaser to get back his money.
It would not be right to lay down that in every case the balance of the purchase money should be paid to the subsequent transferee up to the extent of the consideration paid by him.
There may be equities between the vendor the subsequent transferee which would make that improper, to unless they fight the question out as between themselves and it is decided as an issue in the case, the normal rule should be to require that the money be paid to the vendor. But the circumstances in instant case are peculiar. The parties before Court were prepared to compromise, and the vendor is in Pakistan and is beyond the jurisdiction of the Indian courts. It would be inequitable to leave the appellants (subsequent purchasers) to pursue what in all probability is only a will-o-the-wisp and augment the vendor’s estate unjustifiably. This is an equitable relief and Courts have a wide discretion. Accordingly, Appellant subsequent purchasers, held, entitled to get back their money out of amount paid by first purchaser. [Para 43,44]
DURGA PRASAD & ANR. VS.DEEP CHAND & ORS.(SC)
Civil Appeal No.86 of 1950
D.d: 18th November 1953
2015 ALL SCR (O.C.C.) 147
