PIAREY LAL versus HORI LAL

PIAREY LAL

HORiLAL February 7, 1977 [P. K. GdSWAMI AND P. N. SHINGHAL, JJ.]

U.P. Co11solidatio11 of Holdiitgs Act, 1953, s. 30(b)-Whether agreement for sale creates liability for tenure-Jzolder "in" original holding for the purpose of.

The appellant Piarey Lal had agreed to sell his original nolding to Hori Lal nut later refused to do so on the ground that his p"roperty which was the subject matter of~the contract had been consolidated under the U.P. Consoli-dation of Holdings Act, 1953, and it was impossible to perform the agree-ment. Hori Lal filed suit for specific performance contending that the agree-ment for sale had created liability for Piarey Lal for the purpose of section 30(b) o.f the Act, arid the same wl!S transferred to the new plot or "chak" allotted to him as result of ·the consolidation. The suit was decreed by the Trial Court and Piarey Lal's appeals before the District Court and the High Cuurt were dismissed.

Allowing the appeal by Special Leave the Court,

HELD : . By virtue of s. 54 of the_ Trapsfer of Property Act, the agree-ment for shle did not give fise to any interest "in" the original holding of the dtifen<'innt 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 result of the scheme of consolidation, the agreement for sale became void. [918 C-El

Sugna & Anr. v. Kali Ram & Ors. 1966 A. L. J. 1004, ruiiproved.

Shanti frasad v. Akhtar & Anr. 1972 A.L.J. 549 and Clzetan Singh & Ors. v. Hira Singh & Ors. 1969 A.L.J. 189. overruled .

. CIVIL CIVIL ArPELLATE Juiusi>ICTION : Civil Appe~l No. 1976.

. CIVIL CIVIL ArPELLATE Juiusi>ICTION : Civil Appe~l No. 1252 of 1976. Appeal by spei;ial Leave froni the Judgment and Order dated 13-8-1975 of the Allahabad High Court in Second Appeal No. 179/ · 75. .

A. k. Gupta, for the Appellant.

S. T. Desdi and R. B. ,D'a(ar for the Respondent.

The Judgment of the Court was delivered by.

~HINGHAL, J .-This appeal_, by special leave, is dire"cted agafust the summary dismissal of defendant Piiffey Lal's second appeal on Augtist 13, 1975. A..; the leave has been limited to tM question of i_nterprefatioi\ of Clauses (a) a,nd, (b). of seCtion 30 of the U.P. C-Offsolidatiofi 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 hiiri oh con-solidation," it will be enough to state the facts which he'at on it.

Respondent Hori Lal raised the suit for specific performance of an agreement dated March 6, 1966, for the sale of six plate 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 agree-ment 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. 3000/-, and pleaded that as new plots had been allotted as result of the consolidation of his holding under the Act, he could not perform the agreement for sale. The trial coun framed issues, inter alia, on ques-tions. 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 consoli-dation." It therefore decreed the suit for specific performance by its judgment dated August 23, 1973. The Second Additional District Jiudge, Badaun, upheld the decree, and as the High Court has dis-mi'ssed the second appeal as aforesaid, d~fendant Piarey Lal has come to this Court for redress of hi's grievance by special leave.

As has be!<n 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 consolidatfori and the allotment of 'chak' ? It appears that there was controversy in the Allahabad High Court on the question whether an agreement for sale, in the circumstances of 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 agree-ment f~r sale had been executed. Single Judge of that Court took the view in Sugna and another v. Kali Ram and others(') that the ·.agreement became void and impossible of performance, and was not ·saved by section 30 of the Act. different view was however taken ;by another Single Judge in Chetan Singh and others v. Hira Singh and ·others('). The matter was referred to Division Bench in Shanti Prasad v. Akhtar and another. ([8]) One of the Judges in the Divi-sion Bench was the Judge who had _given the decision in Chelan Singh's case. The Bench held that the duty of the seller to execute the conveyance of the property agreed to be sold was 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 .. L.J. 1004. (2) 1969 A.L.J. 189. (3) 1972 A.L.J. 549.

court in this case, and that appears to be the. reason why the High Court has dismissed the second appeal summanly. The controversy . therefore turns on the proper interpretation of section 30 of the Act which deals with the consequences which ensue on exchange of pos-se·ssion as result of the allotment of 'chak' ·to the tenure-holder. Clauses (a) and (b) of section 30 of · the Act provide as

Clauses (a) and (b) of section 30 of · the foliows,-

"30. Consequences which shall ensue on exchange of possession.-With effect from the date on w.hich tenu_re-holder enters, or is deemed to have entered mto possess10n of the chak allotted to him, in accordance with the pro-visions 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 hi& chak the ·same rights, title, interests and liabilities ai he had in the original holdings together with such other benefits of irrigation from private source, till such source exists, as the former tenure-holder of the plots comprising the chak had in regard to them."

It w9uld thus appear that while clause (a) deals with the rights, title, interests and liabilities of the tenure-holder entering into pos-session 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) P,i'ovides that the tenure-holder l'.ntering 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 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 circumstance's 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- becau'se 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

the

.A of the plots comprising the 'chak' in their respective "original hold-ings". There is no controversy that this was so in the present case. It is afso no body's case that the rights, title, and interests of the tenure-holder ~ntering into possession of his 'chak' have any bearing on. the controv~rsy relating to the specified performance of the agree-ment for sale, for all that has been urged before us is t~at the defen-dant, as the tenure-holder of the new holding or 'chak' had the same "liabilities" in that 'chak' as he had in tjle original holding. What therefore remains for consideration is whether, Qn the defen-dant'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 has therefore to be examined whether, by virtue of the agreement for sale, any liability accrued "in" the original holding ? cross-reference to section 54 of the Transfer of Property Act shows that contract for the sale of immovable property is con-tract that sale of such property shall take place on terms settled between the P,_arties. It has however been specifically provided in the section that such contract "does not, of itsellf, create any interest in or charge on such prol'erty." 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 tiansfer 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 qf Property Act wag to execute proper conveyance of "the property" which was the subject matter of the contract for sale, and not of _any other pro-perty. So when he lost that property as result of the scheme of consolidation and his rights, title, interest's ceased in ttla_t 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 Contratt Act, and it is futile to urge that they were saved by clause (a) or clausf-(b) of 11ection 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 rightS, 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 afores_aid provisions of section 54 of the Transfer of Property Act, and disposed of the controversy before it by raising the other question whether "the tenure.-holder" was subject to any liability "in respect of" his old holding. That was why it felL into the error of holding that liability w311 created in the original holding of the defendant, and was transferred to his 'chak' on his entering into its possession. As ha;; been shown, that was an erroneous view which has to be re:ctified.

It may be mentioned that counsel for the respondent tried to argue that the defendant was bound to execute proper conveyance of his original holding, which was. the subject .matter of the agteement of ·sale, because, that holding liad been supstituted" by the 'chak'.

PIA:it.EY LAL v. HORI LAL (Shinghal, !.) 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 limit-ed to the interpretation of clauses (a) and (b) of section 30 of the ~ct. It would thus_ appear that the plaintiff respondent's suit for speci-fic performance of the agreement for sale was liable to dismissal, and the High Court as well as the courts below erred in taking 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 juJgment of the High Court is set aside, and the suit of plaintiff-respondent Hori Lal is dismissed in so far a·s it relates to specific performance of the agreement for sale. It is however ordered that the d~fendant 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.

Appeal allowed.