Uppalapati Ramamurthy Raju, vs G.V.Phani Kumar,
2021 Latest Caselaw 5112 AP

             HON'BLE SRI JUSTICE M.VENKATA RAMANNA

                     SECOND APPEAL No.1621 of 2004
                                  &
                      SECOND APPEAL No.593 of 2005

COMMON JUDGMENT :

        The 1st defendant in O.S.No.1115 of 1995 on the file of the Court

of the learned Principal Junior Civil Judge, Vijayawada is the appellant in

S.A.No.593 of 2005. The defendants 2 and 3 therein are the appellants in

S.A.No.1621 of 2004.


       2. The 2nd appellant in S.A.No.1621 of 2004 died during pendency

of the second appeal. His Legal Representatives being the respondents 3

and 4 are brought on record.

3. The respondents in both these second appeals were the

plaintiffs. The 1st and 2nd respondents were the original plaintiffs in the

suit. 2nd respondent died during pendency of the suit. Therefore, his Legal

Representatives being respondents 3 to 5 were brought on record as the

plaintiffs 3 to 5.

4. For convenience, the parties as arrayed in the suit shall be

referred to hereinafter.

5. Since both these second appeals arise out of the same suit and

appeal, they are being disposed of by this common judgment.

6. The claim of the plaintiffs against the defendants is for specific

performance of contract based on an agreement for sale dated

20.10.1984 executed by the 1st defendant in favour of Sri G.S.V.Rama

Rao- father of the plaintiffs 1 and 2.

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

7. It is the contention of the plaintiffs that under the afore-stated

agreement, the 1st defendant had agreed to sell the plaint schedule

property for Rs.14,628/- and that he received Rs.5,000/- towards advance

and agreeing to obtain necessary permission from Urban Land Ceiling

Authorities, the 1st defendant had also undertaken to execute a sale deed

in favour of the father of the plaintiffs 1 and 2 upon receiving balance sale

consideration.

8. It is also the case of the plaintiffs that the 1st defendant had

purchased the property from the defendants 2 and 3 under an agreement

for sale dated 20.10.1984 and whereunder he was delivered possession of

the property that included the plaint schedule site.

9. Further case of the plaintiffs is that, time to time part of the sale

consideration was paid and thus, in all, Rs.12,000/-, under this agreement

for sale to the 1st defendant by their father and balance amount to pay by

the date of the suit was only Rs.2,628/-. They further claimed that in spite

of their repeated demands and issuance of legal notices including during

the lifetime of his father, since the 1st defendant did not come forward,

they were constrained to lay the suit.

10. The defendants 2 and 3, according to the plaintiffs, are

necessary parties, who should also join in execution of the sale deed in

their favour pursuant to the agreement for the sale dated 20.10.1984.

They further contended that none of the defendants made any attempts

to obtain permission from Urban Land Ceiling authority for this purpose.

Asserting that the defendants 2 and 3 cannot avoid their liability much

less on the ground of want of privity of contract and that default on the MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

part of the 1st defendant in failing to execute sale deed on account of the

clear collusion between himself on one hand and the defendants 2 and 3

on the other, offering to pay the balance sale consideration, they

requested to grant relief in the suit.

11. Resisting this claim the 1st defendant contended that though he

had entered into an agreement with Sri G.S.V.Rama Rao as alleged on

20.10.1984 under which he had received Rs.5000/- as advance, he denied

further part-payments in his favour. He also denied that he had

undertaken to obtain permission from Urban Land Ceiling authorities. He

further denied the correspondence said to have been entered into by him

and father of the plaintiffs 1 and 2 in this respect. However, he admitted

exchange of notices in between himself and Sri G.S.V.Rama Rao as well as

himself and the plaintiffs 1 and 2 before the institution of the suit.

12. The 1st defendant further contended that Sri G.S.V.Rama Rao

was aware that there were certain hurdles under Urban Land Ceiling Act

with reference to this transaction even prior to the purchase of the plaint

schedule site under the suit agreement for sale and also that the land in

question did not stand in the name of the 1st defendant. Thus, he

contended questioning the validity of this agreement for sale as well as

legality. He further contended that this agreement for sale is

unenforceable.

13. The defendants 2 and 3 mainly contended that there is no

privity of contract between themselves on one hand and the plaintiffs.

They further contended that though they entered into an agreement for

sale with the 1st defendant agreeing to sell the land that included the MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

plaint schedule site on 20.10.1984, the 1st defendant has to pay the

balance sale consideration and that he had paid only Rs.8,000/- towards

advance. They also objected the suit transaction, since permission from

Land Ceiling Authorities is required to proceed further.

14. The defendants 2 and 3 further contended that since the plaint

schedule site is an inseparable extent out of the entire property sold by

them to the 1st defendant, sale of plaint schedule site by him to the

plaintiffs' father is without their consent and hence, the suit as such is not

maintainable nor the agreement for sale could be enforced by the

plaintiffs against them. They further alleged that the suit itself is an

attempt on account of the collusion between the plaintiffs and the 1st

defendant. They further contended that the alleged contract is impossible

to perform since it is frustrated on account of the policy of the

Government. The defendants 2 and 3 also questioned their impleadment

in the suit as mis-joinder. Thus they resisted the claim of the plaintiffs.

15. Basing on the above pleadings, the trial Court settled the

following issues:

"1. Whether the father of the plaintiffs is a bona fide holder of agreement?

2. Whether D2, D3 along with D1 are liable to execute the sale deed in favour of the plaintiffs?

3. Whether the suit is bad for mis-joinder of parties?

4. Whether the plaintiffs are entitled for the relief sought for in the plaint?

5. To what relief?"

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

16. The parties went to trial. The 1st plaintiff examined himself as

P.W.1 and relied on Ex.A1 to Ex.A16 in support of his contention. The 1st

defendant examined himself as D.W.1 and whereas the 2nd defendant was

examined as D.W.2. The defendants did not produce any documents at

the trial.

17. On the material and evidence, the learned trial Judge held

issues 1 and 3 in favour of the plaintiffs and held issue No.2 against them.

Consequently, while deciding issues 4 and 5, the trial Court directed

refund of the advance sale consideration paid under the suit agreement

for sale to the plaintiffs while refusing the main relief for specific

performance of the contract. Interest at 12% p.a. was directed till

realization from the respective dates of payments by Sri G.S.V.Rama Rao

to the 1st defendant.

18. The plaintiffs preferred an appeal against the decree and

judgment of the trial Court in A.S.No.163 of 1998 on the file of the Court

of the learned VIII Additional District Judge (FTC), Vijayawada.

19. Considering the material and evidence and upon reappraisal,

the learned appellate Judge reversed the findings of the trial Court on

issue No.2 by decree and judgment dated 08.07.2004 and held in favour

of the plaintiffs granting main relief for specific performance under the

suit agreement for sale dated 20.10.1984 directing execution of sale deed

by the defendants 1 to 3 in favour of the plaintiffs upon receiving balance

sale consideration within six (06) months therefrom. A further direction

was given, that the defendants shall apply to Urban Land Ceiling

authorities for grant of permission.

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

20. Under these circumstances, these second appeals are

preferred.

21. S.A.No.1621 of 2004 was admitted on the following substantial

question of law:

"Whether the judgment and decree of the lower appellate Court is in conformity with the provisions of Order-41, Rule-31 of CPC?"

22. S.A.No.593 of 2005 was admitted on the following substantial

question of law:

"Whether the suit filed by the plaintiffs 1 and 2 for specific performance of the agreement of sale dated 20.10.1984 executed in favour of their father G.S.V.Rama Rao without impleading their sister D. Tara Kumari who is also one of the heirs of late Rama Rao either as a co-plaintiff or as a defendant is maintainable in law?"

23. Heard Sri O.Manohar Reddy, learned counsel for Sri

G.Vivekanand, learned counsel for the defendants 2 and 3 (appellants)

and Sri Vedula Srinivas, learned counsel for the plaintiffs (respondents) in

S.A.No.1621 of 2004.

24. S.A.No.593 of 2005 was being called along with S.A.No.1621 of

2004. Since no arguments were addressed in S.A.No.593 of 2005 on

behalf of the appellant and none represented him in this second appeal,

both these second appeals were reserved for judgment and also finding

that substantial arguments were addressed in S.A.No.1621 of 2004.

25. The 1st defendant admitted execution of the agreement for sale

on 20.10.1984 in favour of Sri G.V.S.Rama Rao-father of the plaintiffs

1 and 2 for a valuable sale consideration of Rs.14,628/- in respect of the

plaint schedule property. It is house site at Vijayawada in an extent of 276 MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

Sq.yards within the specific boundaries mentioned in the plaint schedule.

Ex.A2 is this agreement for sale.

26. It is stated in Ex.A2 agreement that the 1st defendant had

purchased the plaint schedule site under a possessory agreement for sale

from the defendants 2 and 3. The recitals in Ex.A2 are also that the 1st

defendant had received Rs.5,000/- and balance of Rs.9,628/- was to be

paid at the time of the registration of this site to the 1st defendant, who

had undertaken to execute a sale deed either in favour of Sri G.S.V.Rama

Rao or to his order. Further recitals in Ex.A2 are that this agreement was

executed since there were restrictions placed by the Government and the

1st defendant had undertaken to obtain permission from the Government

authorities. Further recitals in Ex.A2 are also that after such obstructions

are cleared, he would come forward to execute a regular registered sale

deed.

27. There were part-payments towards the balance sale

consideration under Ex.A2 by Sri G.S.V.Rama Rao during his lifetime to

the 1st defendant reflected by Ex.A3 on the reverse of Ex.A2 agreement

and as admitted by the 1st defendant as D.W.1 in cross-examination on

behalf of the plaintiffs. He clearly admitted that he had received

Rs.12,000/- in all, under this agreement for sale. Thus, the balance

amount of Rs.2,628/- alone was due and payable by the purchasers to

him thereunder.

28. The material on record, particularly the testimony of D.W.2,

namely the 2nd defendant establishes that the 1st defendant was a real-

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

estate dealer, though he was working in Railways by the date of this

transaction, namely 20.10.1984.

29. Correspondence was entered into between Sri G.S.V.Rama Rao

and the 1st defendant in this respect. On account of the attitude

demonstrated by the 1st defendant apparently to avoid the contract under

Ex.A2, Sri G.S.V.Rama Rao during his lifetime addressed Ex.A16 letter to

the 1st defendant on 08.02.1993, demanding to comply with his obligation

under this agreement, while threatening to inform his superiors in

Railways of this business activity. In Ex.A16, Sri G.S.V.Rama Rao referring

to payments made in all of Rs.12,000/- not only on the date of the

agreement, namely 20.10.1984, part-payment of Rs.5,000/- under Ex.A3

on 03.12.1986 but also another part-payment of Rs.2,000/- by means of

D.D. on 03.06.1987. While calling upon the 1st defendant to respond to

this letter, Sri G.S.V.Rama Rao threatened the 1st defendant with civil and

criminal action, if he defaulted.

30. As seen from Ex.A6 to Ex.A11 letters which are admitted by

the 1st defendant as D.W.1, he went on informing Sri G.S.V.Rama Rao, of

his efforts to obtain clearance from Urban Land Ceiling authorities to

proceed further. They also reflect the manner by which he tried to gain

confidence of Sri G.S.V.Rama Rao, projecting as if he had applied for

permission from Urban Land Ceiling authorities and prepare himself for

getting the sale deed executed by purchasing stamps etc. Ex.A8 letter

also refers to demand draft for Rs.2,000/- purchased by Sri G.S.V.Rama

Rao and sent to the 1st defendant as a part of sale consideration.

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

31. It was the contention of the 1st defendant in the written

statement that he did not agree to obtain permission from Urban Land

Ceiling authorities as D.W.1 he clearly admitted that Sri G.S.V.Rama Rao

purchased the plaint schedule site at his instance. He stated in this

context that since he promised and made Sri G.S.V.Rama Rao to believe

that he would obtain Urban Land Ceiling permission, he had entered into

Ex.A2 agreement.

32. The 1st defendant had purchased from the defendants 2 and 3

in all 552 sq.yards at Rs.40/- per Sq.yard on the same date of Ex.A2,

namely 20.10.1984 under another agreement for sale. The total amount

thus payable to them by the 1st defendant was Rs.22,980/- out of which

he paid Rs.8,000/- to them on the date of the agreement.

33. Neither the 1st defendant nor the defendants 2 and 3 produced

the agreement for sale entered into amongst them.

34. The material elicited from the 2nd defendant as D.W.2 reflected

that this agreement for sale is in custody of the 1st defendant. Reasons

are not forthcoming why they did not produce this agreement for sale at

the trial. However, oral evidence is on record through D.W.1 and D.W.2 in

this respect. Reference to delivery of possession in that agreement for

sale, in favour of the 1st defendant by them is admitted by D.W.2. Further

statements elicited in cross-examination from D.W.2 establish that they

undertook to execute registered sale deed under this agreement of sale in

favour of the 1st defendant or to his order at their expense. They further

reflect that they did not object the 1st defendant from selling this site to

third parties.

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

35. It is also admitted that the 2nd defendant had executed a

general power of attorney in favour of the 1st defendant, to enable him to

obtain permission from Urban Land Ceiling authorities. The material on

record further made out that the 1st defendant had never applied for such

permission from Urban Land Ceiling authorities, though he went on

professing as seen from his letters in Ex.A8 to Ex.A11 to Sri G.S.V.Rama

Rao as if he was attending to it. D.W.2 stated in cross-examination that

this power of attorney is still valid and that it was not revoked.

36. During his lifetime Sri G.S.V.Rama Rao got issued a legal notice

dated 19.12.1992 under Ex.A4 to the 1st defendant calling upon him to

perform his part of the contract under Ex.A2. A reply was sent by him on

10.02.1993 as seen from Ex.A5 addressing Sri G.S.V.Rama Rao, where he

asked Sri G.S.V.Rama Rao to sell back this site to him offering to repay

the money, if Sri G.S.V.Rama Rao was not intending to purchase this

property.

37. Sri G.S.V.Rama Rao died on 30.01.1994. After his death, the

plaintiffs 1 and 2 got issued a notice to the defendants 1 to 3 under

Ex.A12 dated 21.06.1995 calling upon them to execute a sale deed in

terms of Ex.A2 as legal heirs to Sri G.S.V.Rama Rao. A reply was issued on

behalf of the 1st defendant as seen from Ex.A13 on 05.08.1995 where he

expressed his ready and willingness to abide by the terms of Ex.A2 while

setting out that the hurdle was on account of the requirement of Urban

Land Ceiling permission to proceed further with this contract. The

defendants 2 and 3 got issued a reply to it as seen from Ex.A14 dated MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

15.08.1995 where their version is in tune with the defence set up in this

case.

38. Sri O.Manohar Reddy, learned counsel for the defendants 2

and 3 (in S.A.No.1621 of 2004) strenuously contended that the

defendants 2 and 3, who are not executants of Ex.A2, cannot be made to

suffer the liability thereunder nor can there be a direction to make them

execute a sale deed in relation to the plaint schedule property. Learned

counsel further contended that the defendants 2 and 3 cannot be treated

being representatives in interest in terms of Section 15(b) of the Specific

Relief Act, basing on an agreement between the defendants 2 and 3 on

one hand and the defendant No.1 on the other of 20.10.1984 particularly

when they were not aware of Ex.A2 transaction. Thus contending that

what is reflected by Ex.A2 agreement, is only a contingent contract, which

is enforceable on fulfillment of a particular contingency, namely obtaining

permission from Urban Land Ceiling authorities, which was not done, it is

contended that relief in favour of the plaintiffs could not have been

granted against the defendants 2 and 3 for specific performance.

39. In support of this contention Sri O.Manohar Reddy, learned

counsel for the appellants, relied on Kapilaben and others v. Ashok

Kumar Jayantilal Sheth Through PoA Gopalbhai Madhusudan

Patel and others1. In this decision Hon'ble Supreme Court referred to

who is 'a representative-in-interest' relying on its earlier judgments in

Paras-29 to 31, which are extracted hereunder:

. 2019 SCC OnLine SC 1512 MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

"29. It is well-settled that the term 'representative-in-interest' includes the assignee of a contractual interest. Though the provisions of the Contract Act do not particularly deal with the assignability of contracts, this Court has opined time and again that a party to a contract cannot assign their obligations/liabilities without the consent of the other party. A Constitution Bench of this Court in Khardah Company Ltd. v. Raymon & Co. (India) Private Ltd., AIR 1962 SC 1810 has laid out this principle as follows:

"...An assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognised distinction between these two classes of assignments. As a rule obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand, rights under a contract are assignable unless the contract is personal in its nature or the rights are incapable of assignment either under the law or under an agreement between the parties."

(emphasis supplied)

30. In Khardah Company, the Appellant jute manufacturers were entitled to receive price for the jute from the buyer/dealer of jute only upon delivery of certain shipping documents. Question arose as to whether such an obligation coupled with a benefit was assignable. This Court held, based on the above-mentioned principle, that the terms of the contract strongly implied that the rights thereunder are non- transferable.

31. Similarly, in Indu Kakkar v. Haryana State Industrial Development Corporation Ltd., (1999) 2 SCC 37, the Respondent Corporation allotted certain land subject to the condition that the allottee shall complete construction of a building unit on the plot within a period of two years. Upon the allottee's failure to comply with the said condition, the Respondent resumed the land. The allottee filed a civil suit challenging the resumption order, during the pendency of which he assigned his rights in the plot to the Appellant. The issue was whether such an assignee could challenge the resumption order. A two-judge Bench of this Court held, in reliance upon Khardah Company (supra), that:

"19....Answer of the said question depends upon the terms of allotment. Assignment by act of parties may cause assignment of rights or of liabilities under a contract. As a rule a party to a contract cannot transfer his liabilities under the contract without consent of the other party. This rule applies both at the Common Law and in Equity (vide para 337 of Halsbury's Laws of England, Fourth Edition, Part 9). Where a contract involves mutual rights and obligations an assignee of a right cannot enforce that right without fulfilling the co-relative obligations."

40. Sri Vedula Srinivas, learned counsel for the plaintiffs contended

with equal vehemence that the fact situation in this case did not permit

application of the above ruling.

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

41. Section 15 of the Specific Relief Act speaks of the persons who

may obtain specific performance of contract. Clause (b) therein among

others refers to the representative-in-interest. However, it is subject to

the rider as per the proviso thereunder. This proviso inhibits a party from

seeking specific performance in case of personal qualifications of another

party to the contract. However, specific performance is permissible if a

party has already performed his part of the contract or through his

representative-in-interest if accepted by the other party. In case where

the contract provides that such interest shall not be assigned, it is another

embargo to direct specific performance of such contract.

42. In respect of Ex.A2 agreement, the proved facts make out that

a major part of the consideration was already paid during the lifetime of

Sri G.S.V.Rama Rao. It is also established that the interest which the 1st

defendant agreed to sell under Ex.A2 was acquired by him under another

agreement for sale between himself and the defendants 2 and 3. He was

in possession of the property covered by such contract, namely 552

sq.yards out of which the plaint schedule property is only a part covering

276 sq.yards. It is also an admitted situation that the defendants 2 and 3

did not prohibit transfer of a part of this site out of 552 sq.yards to third

parties and apparently they did not have any objection for the 1st

defendant to part with the property.

43. On 20.10.1984 itself all these agreements were entered into

including GPA executed by the 2nd defendant in favour of the 1st

defendant. The remaining part out of 552 sq.yards was subject matter of

another alienation by the 1st defendant in favour of one Sri Pragada MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

Venkata Rao, when the description of the plaint schedule property is

considered. The northern boundary to the plaint schedule site is described

as site proposed to be sold to Sri Pragada Venkata Rao.

44. The 1st defendant as D.W.1 came out with a categorical

statement in cross-examination that the defendants 2 and 3 were aware

of Ex.A2 transaction. It is also admitted that a photostat copy of the

agreement for sale executed in favour of the 1st defendant by the

defendants 2 and 3 was handed over to father of the plaintiffs 1 and 2

when they entered into Ex.A2 agreement. It is also a categorical

statement of the 1st defendant as D.W.1 that the agreement he had

entered into with defendants 2 and 3 specifically recited that they did not

have any objection to register a sale deed in favour of any person whom

he recommended.

45. When these circumstances are taken into consideration, what

was sought to be transferred in terms of Ex.A2 agreement in favour of Sri

G.S.V.Rama Rao was his right and interest to seek specific performance of

the contract against the defendants 2 and 3. Thus, Sri G.S.V.Rama Rao

stood in position of an assignee of the afore-stated contract. He being an

assignee, is qualified to hold the position as a representative-in-interest in

terms of Section 15(b) of the Specific Relief Act.

46. However, Sri O.Manohar Reddy, learned counsel for the

defendants 1 and 2, contended that the proposed nominee of the vendee,

namely the 1st defendant in terms of the contact between himself and the

2nd defendant as well as the 3rd defendant, cannot be an assignee and it

should be referrable to the nominee proposed at the time of execution of MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

the sale deed. Reference is also made to observations in Kapilaben in

para-40 by the learned counsel in this context, where, in the given facts

and circumstances, the term 'nominee proposed by the vendor' was

considered being a nominee at the time of execution of the sale deed and

not a subsequent assignee.

47. In the backdrop of the fact situation, the contentions so

advanced cannot be accepted. What is explicit is that the father of the

plaintiffs remained an assignee of the contract which the 1st defendant

had from the defendants 2 and 3.

48. The fact that a part of the property covered by such contract

was agreed to be sold by the 1st defendant to the father of the plaintiffs

Sri G.S.V.Rama Rao cannot be a reason to affect the claim of the

plaintiffs. For, the plaint schedule property is clearly identified by means

of specific boundaries as a separate and distinct block or entity. The

northern boundary referred to above of this property which was proposed

to be sold to another third party is a further indication that the entire

extent purchased by the 1st defendant from the defendants 2 and 3, was

severable, making out distinct units, which are completely independent

and separate from each other. Thus, these different extents certainly

stand in accordance with the exceptions provided under Section 12 of the

Specific Relief Act.

49. Contentions advanced on behalf of the defendants 2 and 3 that

they did not receive balance consideration from the 1st defendant, also

lost its sheen, since the testimony of the 2nd defendant as D.W.2 itself

made out that they did not at any time demand for payment of such MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

amount upon issuing a notice or addressing a letter. Their conduct

remained a significant factor in this context since they did not enquire at

any time in between the years 1984 and 1995 about the manner by which

the 1st defendant had dealt with this property or the requirement of

permission from Urban Land Ceiling authorities.

50. It is manifest that the defendants 2 and 3 joined the 1st

defendant on account of their conduct in relation to these contracts. The

statement of D.W.2 elicited in cross-examination that they did not intend

to register the property till the 1st defendant gets 'a good party to

purchase' is an indicator in this direction. Thus, the statements elicited

from both D.W.1 and D.W.2 in relation to these contracts in cross-

examination are clear indications and demonstrative of sheer collusion

among them. Obviously, taking advantage of the death of Sri G.S.V.Rama

Rao when the plaintiffs approached them to execute sale deed in their

favour in terms of Ex.A2, they planned out to avoid this contract under

Ex.A2 setting up such defence, which did not stand to merit.

51. In these circumstances, the plaintiffs can pay the defendants

the balance sale consideration under these agreements for sale. Failure to

produce the agreement entered into between the defendant No.1 and the

defendants 2 and 3, is apparently designed. It was not produced

purposely at the trial. Therefore, adverse inference has to be drawn

against them, since they have attempted to suppress.

52. Defendants 2 and 3, though not the executants of Ex.A2

agreement, shall join execution of a regular sale deed in favour of the

plaintiffs and register, upon receiving balance sale consideration, in the MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

circumstances, along with the 1st defendant, who shall receive balance

sale consideration from the plaintiffs.

53. Learned trial Judge, in para-15 judgment observed that the 1st

defendant exploited the defendants 2 and 3 by paying a nominal sum of

Rs.8,000/- under the agreement for sale and that he got himself enriched

with the sale of the sites to the father of the plaintiffs as well as Sri

Venkata Rao. Another observation of the learned trial Judge in the same

paragraph is that obtaining permission from Urban Land Ceiling authorities

is only a formality. However, at a later stage in the same paragraph,

learned trial Judge observed that obtaining permission from Urban Land

Ceiling authorities is not certain, while reaching a conclusion that the

plaintiffs are entitled for refund of advance amount.

54. Further observations in this paragraph relevant for the present

purpose are:

"15....As admittedly D2, D3 executed agreement in favour of D1 and D1 executed agreement of sale in favour of the plaintiffs' father, all the defendants together are liable to execute sale deed in favour of the plaintiffs. But the impediment in executing the registered sale deed by the defendants in favour of the plaintiffs is necessary permission from the Urban Land Ceiling authorities as contemplated under Urban Land Ceilig Act 1976 and the payment of balance sale consideration by D1 to D2,D3 did not make any counterclaim for the balance amount due from D1 in their written statement....."

55. Holding that granting relief of specific performance is

discretionary, findings were recorded by the learned trial Judge declining

to exercise discretion in favour of the plaintiffs while directing refund of

the advance amount with interest at 12% p.a. from the dates of payments

of different instalments.

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

56. The learned appellate Judge having regard to the nature of the

judgment of the trial Court and upon reappraisal of the material on record

considering the contentions so advanced on behalf of the parties, reversed

such findings leading to granting relief of specific performance in favour of

the plaintiffs.

57. The learned appellate judge obviously was conscious of the

fact that the contentious issue was only issue No.2 where findings were

recorded by the learned trial Judge and confined his discussion to that

extent alone. Thus the discussion of the appellate Court is in accordance

with the requirement. There was no necessity for the appellate Court to

consider findings recorded on other issues particularly on issues 1 and 3,

since they were not subject matter of challenge before him. Apparently

none of the defendants questioned such findings of the learned trial Judge

raising cross-objections or making submissions questioning such findings

against them.

58. Sri O.Manohar Reddy, learned counsel for the defendants 2

and 3, contended that the appellate Court did not meet the requirements

of Order-41, Rule-31 CPC framing appropriate points for determination

and entering upon discussion with reference to oral and documentary

evidence specifically in relation to stand of the plaintiffs' father vis-a-vis

defendant No.1 as well as the defendants 2 and 3.

59. Referring to the jurisdiction of the appellate Court in terms of

Section 96 CPC, which being last Court of fact, in support of such

contention, learned counsel relied on C.Venkata Swamy v.

MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

H.N.Shivanna (dead) by Legal Representative and another2.

Learned counsel placed reliance on Para-19 of this ruling where reference

is made to B.V.Nagesh v. H.V.Sreenivasa Murthy3. The relevant

portion is as under:

"19.....4. The appellate court has jurisdiction to reverse or affirm the findings of the trial court. The first appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the appellate court. Sitting as a court of first appeal, it was the duty of the High Court to deal with all the issues and the evidence led by the parties before recording its findings. The first appeal is a valuable right and the parties have a right to be heard both on questions of law and on facts and the judgment in the first appeal must address itself to all the issues of law and fact and decide it by giving reasons in support of the findings. (Vide Santosh Hazari v. Purushottam Tiwari [Santosh Hazari v. Purushottam Tiwari, (2001) 3 SCC 179] at p. 188, para 15 and Madhukar v. Sangram [Madhukar v. Sangram, (2001) 4 SCC 756] at p. 758, para 5.)"

60. Sri O.Manohar Reddy, learned counsel for the defendants 2

and 3, further relied on S.Nazeer Ahmed v. State Bank of Mysore

and others4, particularly with reference to application of Order-41, Rule-

22 CPC. In para-7 of this ruling, the relevant observations are thus:

"7.....For supporting the decree passed by the trial court, it is not necessary for a respondent in the appeal, to file a memorandum of cross-objections challenging a particular finding that is rendered by the trial court against him when the ultimate decree itself is in his favour. A memorandum of cross-objections is needed only if the respondent claims any relief which had been negatived to him by the trial court and in addition to what he has already been given by the decree under challenge......"

61. The proposition of law canvassed in this respect needs to be

applied in relation to facts. It is always said that if facts are taken care of,

. (2018) 1 Supreme Court Cases 604

. (2010) 13 SCC 530

. (2007) 11 Supreme Court Cases 75 MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

they take care of law. A careful consideration of the judgment of the

appellate Court cannot be held being in violation of mandate under Order-

41, Rule-31 CPC. The learned appellate Judge considered the material on

record with reference to the contentions advanced on behalf of the parties

to the extent required and thus had drawn conclusions.

62. The findings of the trial Court on issues 1 and 3 did have

certain bearing now. It is to be noted that the trial Court did not record

any finding that there is no privity of contract between the plaintiffs'

father on one hand and the defendants 2 and 3. Observations and

findings of the trial Court on issue No.1 that the plaintiffs are the bona

fide holders of Ex.A2 agreement and that no prejudice is caused to the

defendants 2 and 3 on account of execution of Ex.A2 agreement in favour

of the father of the plaintiffs by the 1st defendant, are pointers in this

context. Necessity to implead the defendants 2 and 3 as parties to the

suit is also one of the findings recorded on issue No.3 by the trial Court.

These findings were not subject matter of challenge or criticism in the

appeal, which the defendants could have resorted to in tune with Order-

41, Rule-22 CPC. At this stage, when these findings have certain

imperative effect, attempt cannot be made indirectly to question them in

this second appeal. Such course is not certainly permissible and is not in

tune with the scheme of Code of Civil Procedure when the effect of

Section 100 CPC is considered.

63. Therefore in the given facts and circumstances, the defendants

2 and 3 cannot screen themselves away from their burden or liability,

under the contract represented by an agreement for sale entered into by MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

them and the 1st defendant, in relation to the position of Sri G.S.V.Rama

Rao, as an assignee of the same pursuant to Ex.A2 agreement for sale.

Therefore, these circumstances are permeable for the plaintiffs to claim

relief for specific performance in relation to the plaint schedule property,

not only against the 1st defendant but also against the defendants

2 and 3.

64. Explaining application of Order-41, Rule-31 CPC, Sri Vedula

Srinivas, learned counsel for the plaintiffs, relied on Gorrella Durga Vara

Prasada Rao v. Indukuri Rama Raju and others5. In para-7 of this

ruling, it is stated:

"7. Order 41, Rule 31 has to be read within the scheme of Order 41. Order 41 deals with Appeals from Original decrees and Rule 1 lays down that; Every appeal shall be preferred in the form of a memorandum signed by the appellant or his pleader...... Then it also lays down what should a memorandum contain. Order 41, Rule 1(2) lays down that; The memorandum shall set forth concisely and under distinct heads, the grounds of objection to the decree appealed from without any argument or narrative, and such grounds shall be numbered consecutively. Rule 2 of Order 41 lays down the grounds which may be taken in appeal. It states;

"The appellant shall not except by leave of the Court, urge or be heard in support of any ground of objection not set forth in the memorandum of appeal, but the appellate Court, in deciding the appeal, shall not be confined to the grounds of objections set forth in the memorandum of appeal or taken by leave of the Court under this rule; Provided that the Court shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of contesting the case on that ground. If these Rules 1 and 2 are read along with Rule 31 it becomes clear that the Judge while hearing an appeal is obliged to decide all the grounds taken in the memorandum of appeal without mentioning them in his judgment point by point and decide the appeal, if the Judge considers and decides all the grounds taken in the memorandum of appeal Order 41 Rule 31 would be substantially complied with. It is true that, generally the appellate Judges are framing only one question as to whether the judgment of the trial Court can sustain or not, but, while dealing with the appeal they are deciding all the questions which are raised. During our experience we have, however, found that the Memorandum of appeals are so defective that one memorandum of appeal can be used in any number of appeals. Generally the memorandum contains the general grounds that the judgment under appeal cannot sustain, that the trial Court has erred in

.2002(2) ALT 589 MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

appreciating the evidence and law. Therefore, if the Courts find from reading whole judgment of the first appellate Court that the grounds urged in the memorandum of appeal have been considered by the appellate Court and a decision thereon has been given with reasons, that judgment would be in conformity with provisions of Order 41, Rule 31."

65. In the same context, observations in G.Amalorpavam and

others v. R.C.Diocese of Madurai and others6 relied on by Sri Vedula

Srinivas, learned counsel, in para-7 are relevant. They are as under:

"7.........It is no doubt desirable that the appellate court should comply with all the requirements of Order 41 Rule 31 CPC. But if it is possible to make out from the judgment that there is substantial compliance with the said requirements and that justice has not thereby suffered, that would be sufficient. Where the appellate court has considered the entire evidence on record and discussed the same in detail, come to any conclusion and its findings are supported by reasons even though the point has not been framed by the appellate court there is substantial compliance with the provisions of Order 41 Rule 31 CPC and the judgment is not in any manner vitiated by the absence of a point of determination. Where there is an honest endeavour on the part of the lower appellate court to consider the controversy between the parties and there is proper appraisement of the respective cases and weighing and balancing of the evidence, facts and the other considerations appearing on both sides is clearly manifest by the perusal of the judgment of the lower appellate court, it would be a valid judgment even though it does not contain the points for determination. The object of the rule in making it incumbent upon the appellate court to frame points for determination and to cite reasons for the decision is to focus attention of the court on the rival contentions which arise for determination and also to provide litigant parties opportunity in understanding the ground upon which the decision is founded with a view to enable them to know the basis of the decision and if so considered appropriate and so advised to avail the remedy of second appeal conferred by Section 100 CPC."

66. Referring to Section 10 of the Specific Relief Act when specific

performance of any contract can be enforced, there are observations in

T.Krishna Goud v. Sabiha Kamaluddin7 relied on for the plaintiffs. In

para-17 of this ruling, it is stated:

"17.Section 10 of the Act provides that specific performance of any contract may be enforced when there exists no standard for ascertaining

.(2006)3 SCC 224

. 2010(5) ALT 617 MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

the actual damage caused by the non-performance of an act agreed to be done, or when the agreed act is such that compensation in money for its non-performance would not afford adequate relief. Granting such relief is within the discretion of the Court. The said provision also provides that unless and until the contrary is proved, the Court should presume that the breach of a contact to transfer immovable property cannot be adequately relieved by compensation in money."

67. There is also reference as to failure to frame an appropriate

issue in terms of Order-14 CPC and its effect in this ruling to the effect

that it would not vitiate the trial when the parties are conscious of the

case they are expected to meet.

68. Effect of want of permission from Urban Land Ceiling

Authorities to go ahead with the contract under Ex.A2 agreement was

also considered by the learned appellate Judge. Before the appellate Court

Chandnee Widya Vati Madden v. C.L.Katial and others8 and

R.C.Chandiok and others v. Chuni Lal Sabharwal and others9 were

relied on. Sri Vedula Srinivas, learned counsel for the plaintiffs referred to

these rulings of the Hon'ble Supreme Court in the same context.

69. In Chandnee Widya Vati Madden, it was held that want of

permission from competent authority cannot be reason, to make out a

contract being not enforceable and treating it as of contingent nature.

70. In R.C.Chandiok and others similar situation was

considered.

. AIR 1964 SC 978

. AIR 1971 SC 1238 MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

71. The judgment of the appellate Court in these circumstances

cannot be held being beyond the scope, power and jurisdiction conferred

on it in terms of Section 96 CPC.

72. The contentions advanced on behalf of the defendants 2 and 3

to certain extent are away from substantial questions of law raised in both

these second appeals. Yet, finding relevance such contentions advanced

on behalf of the parties, are considered now. The entire case is based on

facts.

73. One of the contentions in the written statement of the 1st

defendant was that the sister of the plaintiffs is a necessary party to the

suit and without her, the suit is bad. This is the basis for the substantial

question of law in S.A.No.593 of 2005. This objection has no effect, when

the plaintiffs have prosecuted the suit and any benefit, they derive in this

matter, shall also favour their sister. It is not a question nor turnout being

substantial question of law. A genuine claim cannot suffer on such

technical ground, which cannot affect a plea for specific performance of

contract which the plaintiffs are entitled to.

74. Thus, on conspectus, since being satisfied that there are no

substantial questions of law as such to consider and determine in these

second appeals they have to be dismissed. Consequently, the decree and

judgment of the appellate Court should be confirmed.

75. In the result, the second appeals are dismissed confirming the

decree and judgment of the appellate Court. No costs. Permission from

Urban Land Ceiling Authorities, if required, be obtained, within two (02) MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

months from now by the defendants (appellants). Further, the

respondents are directed to pay or deposit the balance sale consideration

to the credit of the suit, if it is not received by the appellants in

A.S.No.1621 of 2004 (defendants 2 and 3).

As a sequel, pending miscellaneous petitions, stand closed. Interim

Orders, if any, stand vacated.

________________________ JUSTICE M.VENKATA RAMANNA Dt:10.12.2021 RR MVR,J S.A.No.1621 of 2004 & S.A.No.593 of 2005

HON'BLE SRI JUSTICE M.VENKATA RAMANNA

SECOND APPEAL No.1621 of 2004 & SECOND APPEAL No.593 of 2005

Dt:10.12.2021

RR