Tuesday, 12 March 2013

suit for specific performance of contract.

Suit for Specific Performance of contract.


"contract for sale has been filed. Admittedly, they based their claim on independent title and possession of the contracted property. It is, therefore, obvious that in the event, they are added or impleaded in the suit, the scope of the suit for specific performance of the contract for sale shall be enlarged from the suit for specific performance to a suit for title and possession which is not permissible in law. Therefore, a third party or a stranger to the contract cannot be added so as to convert a suit of one character into a suit of different character. This addition, if allowed, would lead to a complicated litigation by which the trial and decision of serious questions which are totally outside the scope of the suit would have to be gone into. As the decree of a suit for specific performance of the contract for sale, if passed, cannot, at all, affect the right, title and interest of the third party in respect of the contracted property they would not, at all, be necessary to be added in the suit for specific performance of the contract for sale. Moreover, the appellant, who has filed the present suit for specific."



Krishnan vs P.Palanisamy on 22 April, 2010
DATED: 22-04-2010
CORAM
THE HON'BLE MR.JUSTICE M.JAICHANDREN
C.R.P.(PD) No.175 of 2009 and
M.P.No.1 of 2009
Krishnan .. Petitioner.
Versus
1.P.Palanisamy
2.M.Gnanathikam
3.M.Gnanathikkam
4.David Livingston
5.James .. Respondents.
PRAYER: Petition filed under Article 227 of the Constitution of India, seeking to set aside the fair and decretal order of the Subordinate Judge, Court at Namakkal, dated 31.10.2008, in I.A.No.11 of 2003, in O.S.No.635 of 2001.
For Petitioner : Mr.P.Valliappan
For Respondents: Mr.S.Doraisamy (R1)
O R D E R
This Civil Revision Petition has been filed against the order, dated 31.10.2008, made in I.A.No.113 of 2003, in O.S.No.635 of 2001, on the file of the Subordinate Court, Namakkal.
2. The petitioner in the present civil revision petition is the plaintiff in the suit, in O.S.No.635 of 2001. The petitioner had filed the said suit against the respondents 2 to 5, for specific performance, to enforce the agreement for sale, dated 27.3.1991, by which the petitioner had agreed to purchase the suit property, measuring an extent of 600 Sq.Ft, for a sale consideration of Rs.48,000/-. It had also been stated that on the date of the agreement for sale the petitioner had paid Rs.20,000/-, as advance and the balance amount of Rs.28,000/- was to be paid, on or before 26.3.1995, on receipt of which the respondents 2 to 5 were liable to execute the sale deed in favour of the petitioner.
3. On 20.1.1995, a further sum of Rs.15,000/- had been paid by the petitioner and the period for performance had been extended till 19.1.1999, by making the necessary endorsement. The petitioner has also stated that he is in possession of the suit property. However, the respondents 2 to 5 were evasive and not inclined to execute the sale deed. They had also threatened the petitioner asking him to vacate the suit property. In such circumstances, the petitioner has filed the suit, in O.S.No.635 of 2001, on the file of the Subordinate Court, Namakkal, praying for a decree for specific performance.
4. While so the first respondent herein had filed an interlocutory application, in I.A.No.113 of 2003, in the suit, in O.S.No.635 of 2001, praying that the trial Court may be pleased to implead him, as the 5th defendant in the said suit, stating that he had purchased the suit property from a third party. Even though the petitioner had resisted the said application by raising various grounds, the trial Court, by its order, dated 31.10.2008, had allowed the interlocutory application filed by the first respondent. The petitioner has filed the present civil revision petition before this Court, challenging the order of the learned Subordinate Judge, Namakkal, dated 31.10.2008, made in I.A.No.113 of 2003.
5. The learned counsel appearing on behalf of the petitioner had stated that the order of the learned Subordinate Judge, dated 31.10.2008, to implead the first respondent, as the fifth defendant in the suit, in O.S.No.635 of 2001, is patently erroneous and manifestly unjust. The learned Judge had failed to note that a third party to the sale agreement is not entitled to be impleaded, as a party to the suit for specific performance filed for enforcing the agreement for sale. The learned Judge had failed to see that the presence of the first respondent is not necessary for the disposal of the suit claim, especially, when no relief is being claimed against the said third party.
6. The learned counsel appearing on behalf of the petitioner had relied on the following decisions in support of his contentions:
6.1. In Anil Kumar Singh V. Shivnath Mishra @ Gadasa Guru (1995 AIR SCW 1782), the Supreme Court had held as follows:
"The obtaining of a decree and acquiring the status as a co-owner during the pendency of a suit for specific performance, is not obtaining, by assignment or creation or by devolution, an interest. Therefore, Order 22, Rule 10 would not be applicable. Equally, Order I, Rule 3 is not applicable to the suit for specific performance because admittedly, the respondent was not a party to the contract. Since the suit is based on agreement of sale said to have been executed by the sole defendant in the suit, the subsequent interest said to have been acquired by the respondent by virtue of a decree of the Court is not a matter arising out of or in respect of the same act or transaction or serious of acts or transactions in relation to the claim made in the suit. In order that a person may be considered a necessary party, defendant to the suit, the conditions precedent must be (1) that there must be a right to some relief against him in respect of the dispute involved in the suit; and (2) that his presence should be necessary to enable the Court to effectually and completely to adjudicate upon and settle all the questions involved in the suit. Since the respondent is not a part to the agreement of sale, it cannot be said that without her presence the dispute as to specific performance cannot be determined. Therefore, she is not a necessary party."
6.2. In Vijay Pratap and Others V. Sambhu Saran Sinha and others (AIR 1996 SC 2755), it had been held as follows:
"This petition is against an order dismissing the application under Order 1, Rule 10, C.P.C filed by the petitioners to come on record in place of their father. The suit was laid for specific performance wherein the father during his life time is alleged to have entered into compromise and requested to delete his name from the arraignment of the parties as respondent No.1. The deletion of the first respondent came to be made after his demise. Pending suit before compromise memo was recorded, the petitioners sought to come on record under Order I, Rule 10 being that they were necessary and proper parties. The trial Court recorded the finding that deletion had taken place and observed as under: "At present I am not giving any finding with respect of Exhibit-6 and compromise petition in the light of an objections raised by petitioners in their other two petitions. Simple I have stated the facts which are available on record. If these petitioners are made parties in the suit as prayed then dispute will arise between petitioners and plaintiff No.1 with respect of compromise and Exhibit-6. Its result will be that there will be dispute between the co-plaintiffs with respect of their right, title and interest in suit property. This suit will turn into a regular title suit. To decide right, title and interest of co-plaintiffs in suit property is beyond the scope of this suit. Suit for specific performance of contract can't be turned into a regular Title Suit. So, in my opinion, these petitioners are not necessary and proper parties under Order I, Rule 10, C.P.C."
6.3. In Kasturi V. Iyyamperumal and others (AIR 2005 SC 2813), the Supreme Court had held as follows:
"In a suit for specific performance of a contract for sale the lis between the appellant-purchaser and the respondent-vendor shall only be gone into and it is also not open to the Court to decide whether the third party have acquired any title and possession of the contracted property as that would note be germane for decision in the suit for specific performance of the contract for sale. Two testes by which a person who is seeking addition in a pending suit for specific performance of the contract for sale must be satisfied. Two tests are -(1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings (2) no effective decree can be passed in the absence of such party. Applying the said two tests in the present case the third party or strangers to contract are not necessary parties as effective decree could be passed in their absence as they had not purchased the contracted property from the vendor after the contract was entered into. They were also not necessary parties as they would not be affected by the contract entered into between the appellant-purchaser and the respondent-vendor. Therefore order of Courts below allowing the application for addition of parties in the pending suit for specific performance of contract for sale filed at the instance of third party to contract would be illegal and liable to be set aside. In a suit for specific performance of a contract for sale, the issue to be decided is the enforceability of the contract entered into between the appellant-purchaser and the respondent-vendor and whether contract was executed by the appellant and the respondent for sale of the contracted property, whether the plaintiffs were ready and willing to perform their part of the contract and whether the appellant is entitled to a decree for specific performance of a contract for sale against the respondent. It is an admitted position that the third party or stranger to contract did not seek their addition in the suit on the strength of the contract in respect of which the suit for specific performance of the contract for sale has been filed. Admittedly, they based their claim on independent title and possession of the contracted property. It is, therefore, obvious that in the event, they are added or impleaded in the suit, the scope of the suit for specific performance of the contract for sale shall be enlarged from the suit for specific performance to a suit for title and possession which is not permissible in law. Therefore, a third party or a stranger to the contract cannot be added so as to convert a suit of one character into a suit of different character. This addition, if allowed, would lead to a complicated litigation by which the trial and decision of serious questions which are totally outside the scope of the suit would have to be gone into. As the decree of a suit for specific performance of the contract for sale, if passed, cannot, at all, affect the right, title and interest of the third party in respect of the contracted property they would not, at all, be necessary to be added in the suit for specific performance of the contract for sale. Moreover, the appellant, who has filed the present suit for specific performance of the contract for sale is dominus litus and cannot be forced to add parties against whom he does not want to fight unless it is a compulsion of the rule of law."
6.4. In Bharat Karasondas Thakkar V. Kiran Construction Co. and others [2008(5) MLJ 424(SC)], the Supreme Court had held as follows:
"A third party or a stranger to a contract cannot be added as a party to a suit for specific performance. The scope of a suit for specific performance could not be enlarged to convert the same into a suit for title and possession. A third party or a stranger to the contract could not be added so as to convert a suit of one character into suit for a different character."
6.5. In Saivasamy Thevar V. Rajasekaran (2008 (6) CTC 630), this Court relying on the decisions reported in Bharat Karsondas Thakkar V. Kiran Construction Co. (2008(6) Scale 355) and Kasturi V. Iyyamperumal 2005(2) CTC 676 (SC), it had been held as follows "Admittedly, the suit in O.S.No.170 of 2001 is for a decree for Specific Performance. The basis for filing the said Suit is a sale agreement executed by the fourth respondent with the revision petitioner on 17.4.1997, in and by which the fourth respondent agreed to sell the suit property to the first petitioner, since deceased. The lis involved in the matter is between the deceased first petitioner and the fourth respondent. The alleged right of the respondents 1 to 3 pertaining to the suit property is altogether a different matter to be agitated by them in an appropriate proceeding. The present suit being one for Specific Performance, the only issue to be decided is about the enforceability of the agreement in question. Such being the position, I am of the view that the learned Trial Judge committed a serious error in impleading the respondents 1 to 3 as party to the suit in O.S.No.170 of 2001. The learned Trial Judge appears to have allowed the application filed by the respondents 1 to 3 for impleading them as a party to the proceeding in a casual manner without making an attempt to see as to whether the junction of the parties sought to be impleaded is absolutely necessary for the disposal of the suit in one way or the other. The right claimed by the respondents 1 to 3 is not related to the claim made by the revision petitioner and as such, the respondents 1 to 3 are unnecessary parties to the suit filed by the revision petitioner for a decree of specific performance. Therefore, I do not find any reason to sustain the order of the learned Trial Judge and accordingly, I am constrained to set aside the order, dated 10.10.2003, in I.A.No.119of 2003, in O.S.No.170 of 2001." 6.6. In Ms.Leelavati V. Sri Venkateswara Finance (2009(7) MLJ 761) this Court had held that, in a suit for specific performance of an agreement for sale, the questions to be decided are a) Whether the sale agreement has been validly executed, b)Whether the sale agreement is enforceable, c) Whether the plaintiff is ready and willing to perform their part of the contract and d) Whether the plaintiff is entitled to get the equitable remedy of specific performance. To decide the said issues the presence of a third party is not required. If the presence of a third party is not essential to decide the issues involved in the suit, impleadment of such a party would only enlarge the scope of the suit, unnecessarily.
7. The learned counsel appearing on behalf of the first respondent had submitted that the first respondent is a necessary and proper party to the suit, in O.S.No.635 of 2001, as he had purchased the suit property, in good faith, for a valid consideration, by a sale deed, dated 7.6.1995. One K.Rani, the owner of the suit property had sold the said property to the first respondent, through her power agent, V.K.Ramanathan, based on the general power of attorney, dated 19.4.1995. Thereafter, a joint patta had also been issued in the name of the first respondent. Further, the first respondent has been in possession and enjoyment of the suit property since the date of its purchase. As such, the first respondent is not a stranger to the suit property and thus, he has shown that he has a fair semblance of title. In such circumstances, it is clear that the first respondent is a proper and necessary party to the suit, in O.S.No.635 of 2001.
8. The learned counsel appearing on behalf of the first respondent had relied on the decision, reported in Sumtibai and others V. Paras Finance Co. Mankanwar (2007(7) Supreme 2010), wherein it had been held as follows:
"In view of the aforesaid decisions we are of the opinion that Kasturis case (supra) is clearly distinguishable. In our opinion it cannot be laid down as an absolute proposition that whenever a suit for specific performance is filed by A against B, a third party C can never be impleaded in that suit. In our opinion, if C can show a fair semblance of title or interest he can certainly file an application for imleadment. To take a contrary view would lead to multiplicity of proceedings because then C will have to wait until a decree is passed against B, and then file a suit for cancellation of the decree on the ground that A had no title in the property in dispute. Clearly, such a view cannot be countenanced."
9. In view of the submissions made by the learned counsels appearing on behalf of the petitioner, as well as the first respondent and on a perusal of the records available and in view of the decisions cited above, this Court is of the considered view that the first respondent is neither a necessary party, nor a proper party to the suit for specific performance filed by the petitioner, in O.S.No.635 of 2001, on the file of the Subordinate Court, Namakkal. The first respondent, claiming to be a purchaser of the suit property from a third party, who is not a party to the agreement for sale, based on which the suit for specific performance has been filed, cannot be impleaded as a party to the proceedings in the suit, as held in Kasturi V. Iyyamperumal and others (AIR 2005 SC 2813).
10. In a suit for specific performance of a contract for sale a third party to the agreement is not entitled to get impleaded, as such impleadment would enlarge the scope of the suit. The lis between the parties to the agreement can only be gone into and it would not be open to the trial Court to decide whether a third party had acquired any title or possession of the suit property, as such an issue would not be germane to a decision in the suit for specific performance of a contract for sale.
11. For the impleadment of a third party, in a suit for specific performance, there must be a right to some relief against the party seeking impleadment, in respect of the controversies involved in the proceedings. Further, the following tests must be satisfied to implead a third party in a suit for specific performance: (a) that there must be a right to some relief against such party in respect of the controversies involved in the proceedings; and
(b) that his presence should be necessary to enable the Court to effectually and completely adjudicate upon and settle all the questions involved in the suit.
Impleadment of a third party cannot be allowed to change the character or the nature of the suit filed for specific performance of an agreement for sale. When the plaintiff in the suit for specific performance of the agreement for sale is the dominus litus he cannot be forced to add parties, against whom he does not seek any relief, unless it is a compulsion of the rule of law.
12. In such circumstances, for the reasons stated above, the impugned order of the trial Court, dated 31.10.2008, made in I.A.No.113 of 2003, in O.S.No.635 of 2001, is liable to be set aside. Accordingly, the civil revision petition stands allowed. No costs. Consequently, connected miscellaneous petition is closed.