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This Product is Licensed to Mirza Nisar Ahmed Baig Nizami, advocate, Hyderabad
1954 0 AIR(SC) 75; 1954 0 SCR 360; 1953 0 Supreme(SC) 110;

SUPREME COURT OF INDIA

B.K. MUKHERJEA, BOSE AND BHAGWATI, JJ.
Durga Prasad and another, Appellants
Versus
Deep Chand and others, Respndents.
Civil Appeal No. 86 of 1950.
18th November, 1953
Advocates appeared
Shri. S. K. Dar, Senior Advocate, (Shri Ram Kumar and Shri. B. S. Shastri, Advocates, with him),
instructed by Shri B. P. Maheshwari, agent, for Appellants; Shri G. S. Pathak, Senior Advocate (Shri G.
C. Mathur, Advocate, with him), instructed by Shri. N. C. Jain, Agent, for Respondent No. 1; Shri Jagdish
Chandra, Advocate, instructed by Shri C. P. Lal, Agent, for Custodian of Evacuee Property U. P.

NECESSARY PARTY—WHO IS - Specific performance of agreement to sell plot – subsequent

transferee – direction to join in the covenants - Dispute arising subsequent to the contract for
sale of property about a particular clause in the deed - Question of warranty - SUIT FOR
SPECIFIC PERFORMANCE OF A CONTRACT—DUTY OF COURT
-see the decision in Durga Prasad v. Deep Chand, AIR 1954 SC 75. In a suit for the ejectment
of a tenant all the co-sharers are necessary parties -Kanakarathanammal v. Logantha, AIR 1965
SC 271.
– it is common ground that the plot in dispute had been transferred by the respondents and
therefore the proper form of the decree would be the same as indicated in Lala Durga Prasad v.
Lala Deep Chand, AIR 1954 SC 75 = 1954 SCR 360, viz, 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 the title which resides in him to the plaintiff. He does not join any
special covenants made between the plaintiff and his vendor; all he does not is to pass on his
title to the plaintiff. Accordingly orders were passed in the case of Ramesh Chandra Chandiok v.
Chuni Lal Sabharwal, AIR 1971 SC 1238.
– It cannot affect the completeness of the contract already made, nor can it amount to
repudiation when it is not persisted in and the vendee later expresses his readiness and
willingness to perform the contract “agreed to” – See decision in Durga Prasad v. Deep Chand,
AIR 1954 SC 75 = 1954 SCR 360.
-it should direct the vendor and the subsequent transference to join in the conveyance

TRANSFER OF PROPERTY ACT : S.40, S.54, S.55(2) SPECIFIC RELIEF ACT : S.23, S.27

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Judgment
BOSE J.: This appeal arises out of a vendee s suit for specific performance of a contract of sale
dated 7-2-1942. The vendor is the first defendant whom we will call the Nawab as that is how he has
been referred to in the courts below. He is now in Pakistan and his property has been taken over by the
Custodian, U. P. The plaintiff is the vendee and the second and third defendants, who appeal, are
subsequent purchasers.
2. The only question which we are asked to decide here, except for certain subsidiary matters, is
whether the agreement of 7-2-1942 was a concluded one. The plaintiff s case is that on that date the
Nawab agreed to sell the plaint property to him for Rs. 62,000 and accepted Rs. 10,000 as earnest
money the same day Later, namely on 4-4-1942, the Nawab sold the same property to the appellants for
a sum of Rs. 72,000. The plaintiff states that the appellants had notice of his prior agreement.
3. The appellants, case is that the plaintiff s so called agreement of 7-2-1942 was not a concluded
one as the parties never reached finality. They raised a number of other defences such as
misrepresentation and fraud, an agreement with the Nawab prior to that of the plaintiff, lack of
knowledge of the plaintiff s agreement and so forth. But all those position were abandoned in this Court
and the only point argued, aside from certain subsidiary ones with which we shall deal later, was
whether the parties reached finality on 7-2-1942.
4. The learned trial Judge held, among other things, that there was no concluded contract and so
dismissed the suit. In the High Court the appellate Bench which heard the appeal differed. Harish
Chandra J. held that the parties reached finality while Kaul J. differing from him agreed with the trial
Court and held they had not. The matter was accordingly referred to a Full Bench of three Judges. All
three held that there was a concluded contract in view of this, the appeal was allowed and the plaintiff s
suit was decreed on condition that the plaintiff deposit Rs. 62,000 in court. This he did. Defendants 2
and 3, who are subsequent purchasers, appeal.
5. The plaintiff and the appellants were prepared to compromise in this Court on terms that the
plaintiff should get the property and the appellants be paid Rs. 62,000 to compensate them for Rs.
58,000 which they said they had paid to the Nawab for their subsequent purchase and for the loss of the
property. (The plaintiff said the appellants paid the Nawab Rs. 72,000 and not Rs. 58,000 but there is no
finding about this). As the Nawab s estate had vested in the Custodian, U. P., we thought it proper to join
him in his appeal in case he should later lay claim to the plaintiff s Rs. 62,000. The fears of the parties
regarding the Custodian U. P. were justified, for he refused, to compromise and claimed Rs. 62,000
despite the fact that the Nawab had already been paid Rs. 58,000. His learned counsel stated that it was
for him to decide whether anything had been paid to the Nawab and if so how much and for him to
decide what should be done with the Rs. 62,000. In view of that we have been obliged to proceed with
the appeal.
6. The differing opinions of the various learned Judges who have handled this case show that the
evidence is nicely balanced. The question of burden accordingly assumes importance, as also another
guide which Judges of experience have applied through the years. When the question is one of fact and
is of a simple nature it is useful to collect facts which are admitted or proved beyond doubt and then see
which case fits in with those facts. They are useful as pointers to show the way.
7. Now the question here is one of fact. The plaintiff founds on a contract which the defendants
deny. He must therefore prove it. The initial burden is on him. He relies on two facts in the plaint. The
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first is that he paid a sum of Rs. 10,000 to the Nawab on 7-2-1942 by two cheques. The Nawab
accepted this money and chased the cheques and the money went into his own account in his Bank.
The second is that the Nawab gave the plaintiff a receipt on that date for this money. These two facts
are admitted.
8. The receipt (EX. 35-G) is signed by the Nawab and is in these terms:
"Received this 7th of February 1942 a sum of Rs. 10,000 by two cheques .... as earnest money out
of Rs. 62,000 for the contract of sale of (the plaint property) through Babu Chhater Sen and executed a
receipt, 7th February 1942.
It is further declared that the sale deed would be executed within three months and that in default
the contract would be deemed cancelled ."
This is the language of a completed contract and if there was nothing more the plaintiff would
succeed. The burden, therefore, shifts because of the Nawab s unqualified admission in this document.
We must accordingly turn to the defendants pleadings and their evidence to see how this burden is
discharged.
9. The Nawab s plea in the main is one of fraud and misrepresentation. In his written statement he
says that there was a previous contract with the appellants for Rs. 58,000 and that they paid him Rs.
6,000 as earnest money on 5-2-1942. After this, the plaintiff s broker Chattar Sen told him (the Nawab)
falsely that the appellants had backed out and that in view of this it would pay the Nawab to accept the
plaintiff s offer of Rs. 62,000. The Nawab believing this to be true entered into the contract of 7-2-1942
with the plaintiff and accepted Rs. 10,000 as earnest money. He concludes-
"The talk, on the plaintiff s behalf, about payment of the earnest money conducted through Chattar
Sen, Broker, was wholly based on fraud and deception and so it is not binding."
10. Stopping there. There is implicit in this plea of fraud and misrepresentation an averment that the
contract was valid and binding till set aside at the option of the Nawab who was the defrauded party.
11. The only other plea relevant to this matter is the following:
"All the conditions of the sale can under no circumstance be taken as fulfilled and deemed as
faitaccompli between the plaintiff and the answering defendant; and, for this reason also, the talk
between them about the moabeda is not enforceable."
This is as vague as it can be and is the kind of woolly pleading which a party who is not sure of his
facts and case usually makes; no particulars are furnished. But apart from that, here again the motif of
the theme is that there was a concluded contract which fell to the ground because certain conditions,
presumably conditions precedent, were not fulfilled. In any case, this does not explain the receipt, and
the circumstances in which it came to be given apart from the explanation which is contained in the
plead of fraud. But that, as we have said, imports the important averment that there was a concluded
contract which bound both sides until it was set aside at the option of the defrauded party.
12. The appellants pleas follows the same pattern. It is true that in paragraph 26 of their written
statement they start by saying that
"No agreement was entered into etc....." but they explain that by saying that "whatever proceedings
were taken concerning the plaintiffs moabeda.... Were taken by defrauding and misrepresenting etc. ....
And consequently the moabeda relied on by the plaintiff is legally invalid."
The same theme of fraud and misrepresentations is carried through to paragraphs 27 and 28. There
is no clear cut plea that there was never at any time a concluded agreement and there is no attempt to
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explain away the receipt, Ex. 35-G, or to show the circumstances in which it came to be made.
13. The issues reflect these pleadings and no issue asks in clear cut terms whether the parties had
reached finality, nor is the burden anywhere laid on the Nawab and the appellants to explain away the
receipt, Ex. 35-G.
14. Before turning to the oral evidence, it will be as well to advert to another fact which is beyond
dispute and to examine the Nawab s conduct before the suit. The fact to which we refer is the value of
the property in dispute. It was admitted before us by both sides that the property was at that date (7-2-
1942) worth well over Rs. 1,08,000. The land in dispute is 187 bighas 17 biswas in extent. Of this, only a
portion (the most valuable portion) 35 bighas an extent was worth at least Rs. 1,08,000. This is proved
by the plaintiff, P. W. 1, and the appellants learned counsel actually relied on this in support of his
arguments on another point. The significance of this is that it was very much to the plaintiff s advantage
to snap up property worth Rs. 1,08,000 for Rs. 62,000. It was to the Nawab s advantage to back out of
that agreement if he could. We advert to this because the plea now put forward is not that the Nawab
was unwilling to sell but that the plaintiff was unwilling to buy and consequently it was the plaintiff who
refused to clinch the bargain despite the payment of Rs. 10,000 which the Nawab said in his receipt he
was accepting as earnest money .
15. The other fact to which we refer is the Nawab s conduct shortly before the suit. Here again we
refer to a series of facts which are proved beyond dispute. It will be remembered that the Rs. 10,000
were paid and accepted on 7-2-1942 and that the receipt. Ex. 35-G, was passed on that date. The sale
in the appellants favour was executed on 4-4-1942 and was registered on 9-4-1942. On the same day
(9-4-1942) the plaintiff wrote to the Nawab (Ex.41) saying-
"I have heard a rumour today that you have executed a sale deed in respect of the property in
favour of some one else. I do not believe this remour but it has upset me somewhat because such a
thing was never expected of you."
The Nawab did not reply to this letter at once but on 15-4-1942 he sent the plaintiff his Rs. 10,000
(less Rs.9) without offering a word of explanation. The plaintiff replied on 22-4-1942 (Ex. 25) and insisted
on his contract of 7-2-1942 being carried through. It was not until 29-4-1942that the Nawab attempted
any explanation of his conduct. His manager wrote to the plaintiff on that date (EX. 48). He there
charged Chattar Sen with misrepresentation and then set out a prior agreement in favour of the
appellants and said-
"Hence in order to save ourselves from the clutches of law we were compelled to execute the deed
of exchange and sale deed in favour of (the appellants) .
There is not a syllable in this letter to suggest that the plaintiff and the Nawab had not reached
finality on 7-2-1942. A party, therefore, who sets up a plea of this kind which involves a simple issue of
fact which goes to the root of the whole transaction for the first time in his evidence, is naturally at a
disadvantage.
16. In looking at the oral evidence it will be as well to examine the events in the order in which the
various parties say they occurred. It will then be easier to see them in their proper perspective.
17. The fourth defendant Mohd. Akram Khan was the Nawab s manager. The defendants case (that
is to say, the case of both the Nawab and the appellants) is that the appellants approached the Nawab s
manager on 24-11-1941 offered to buy 1/5th share of the property in suit in exchange for a house and
the remaining 4/5th for Rs. 50,000. They were told that the Nawab wanted Rs. 58,000 and a deposit of
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Rs. 6,000 as earnest money. They did nothing further till 4-2-1942. In the meanwhile, both the Nawab
and his manager had several interviews with the plaintiff s broker Chattar Sen. The broker was told that
the appellants had made an offer of Rs. 50,000 and then bargaining between the broker and the
manager and the Nawab ensued.
18. It is evident from this that, according to the defendants case, the Nawab had two prospective
purchasers before him and that he quite naturally, tried to see which of the two would give him a higher
price.
19. According to the defendants, nothing further happened until 4-2-1942. The Nawab s manager
tells us that the appellants accepted the Nawab s terms on that date, namely Rs. 58,000 in place of Rs,.
50,000 and on the following day paid Rs. 6,000 as earnest money.
20. The day after this, namely 6-2-1942, the plaintiff s broker wrote to the Nawab s manager (Ex. A-
1) and said that his client was prepared to accept the Nawab s terms regarding the amount of the
consideration provided the Nawab gave him a piece of land in exchange for another plot. This of course
was to ward off preemption of the plaint property by the Nawab s co-sharers. The manager says that he
did not meet Chatter Sen on the 6th but that Ashfaq Ali (D. W. 3) met him that evening and told him that
the appellants had already deposited earnest money for this property.
21. This part of the story regarding a pror agreement with the appellants was accepted by the trial
court but was rejected by Harish Chandra J. who held that not only was the story untrue but that false
documents had been manufactured to support it. The other learned Judges did not touch this point at all.
It is significant that this version about an earlier agreement was dropped in this Court. We refer to it in
passing because the defendants evidence must be read as a whole to see whether the portion of it
which touches the present matter is reliable.
22. The day after this, namely 7-2-1942, Chattar Sen met the Nawab and paid the Rs. 10,000 and
obtained from the Nawab the receipt (Ex. 35-G) which, as we have shown, was much more than a
receipt and purports to contain the terms of a bargain for the sale of the property. The Nawab s
explanation is that Chattar Sen told him that the appellants.
"had not agreed and that they would not offer a higher amount, i.e., more than Rs. 50,000," that
"Chattar Sen represented that he was sent by my agent S. Akram Khan and he came to me on S. Akram
Khan s suggestion" and that "I received the amount of the said cheque as I was trying that M/S Durga
Prasad and Miri Mal may take back their earnest money because Lala Deep Chand s offer was for a
larger sum."
It is evident from these answers that the Nawab s version is that he knew on 4-2-1942 that there
was an earlier concluded contract with the appellants and that they had paid earnest money in respect of
it. His reason for accepting the money from Chatter sen was that he hoped the appellants would take
back their earnest money (not that they were bound to do so) because, as Chattar Sen is supposed to
have said, they had not accepted the Nawab s terms. It is clear that the Nawab is not telling the truth
and that of course must be so when that part of the story was abandoned in this Court. But that part is
so intimately connected with the question which we have to decide that if that part is disbelieved or
abandoned there is no reason why the Nawab and his manager should be believed on the portion which
is crucial here. On the one side we have the plaintiff s version backed by an unequivocal admission and
on the other a series of shifty and shifting evasions.

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23. But the Nawab was confronted with this receipt (Ex. 35-G) and he had ample notice of the fact
that it would be used against him. The plaintiff expressly referred to it and relied on it in his plaint. In the
Interrogatories served on him for his examination on commission he was asked by his own counsel to
explain the circumstances in which he accepted the Rs. 10,000 and why he did so. In cross-examination
he was directly confronted with the receipt and in particular confronted with the receipt and in particular
with the portion at the end commencing "It is further declared ..." but all he said was that in fact there
was no concluded contract, which of course is no explanation to show why, if that was the case, he
should issue a document indicating that there was, especially as there no need to do that in a mere
receipt. The Nawab is not only an educated man but has experience of the law. He was a first class
Magistrate and so knew what he was doing.
24. We will turn now to the evidence relied on by the appellants to show that there was no
concluded contract. It is evident from Ex. A-1, a letter dated 6-2-1942, written by Chattar Sen that right
down to that date the plaintiff was asking for an exchange of certain lands, and we can take it that this
was because he wanted to safeguard himself against the possibility of pre-emption; in fact, he tells us in
the witness box that he did want to take every precaution he could to prevent that. But it is clear that this
idea about an exchange was abandoned when Chatter Sen went to see the Nawab on the following day
(the 7th) because Chattar Sen says so and none of the defendants witnesses suggest that this was
pressed on the 7th. But in place of that another suggestion was put forward from the plaintiff s side,
namely that an inflated price (Rs. 72,000 instead of Rs. 62,000) should be entered in the deed. That,
according to the defendnat s evidence is the only matter which was left outstanding; all else was settled.
25. Now both sides are agreed that the suggestion was made and both sides are agreed that the
plaintiff did want this. The only question therefore is a very narrow one, namely whether this was a mere
request on the plaintiff s part and not an essential terms of the bargain or whether the plaintiff though it
so vital that he refused to conclude the contract until the matter was settled. Chattar Sen s evidence and
that of the plaintiff is clear that this was not a matter on which the plaintiff insisted though it was
something he would have been glad to get; it was not, according to him, an essential term of the bargain
and he says that the parties reached finality without it. The Nawab s evidence is exactly the opposite.
26. It will be convenient at this stage to consider where the probabilities lie. This condition about
inflation was for the plaintiff s benefit alone. The Nawab had nothing to gain by it. Therefore, it is material
to consider what the plaintiff stood to gain by going on with the contract without it and what he stood to
lose. As we have said earlier, both sides are agreed that the value of the property at that date was well
over Rs. 1,08,000. The plaintiff was getting it for Rs. 62,000. In the event of preemption the plaintiff
would lose the property but would get back his money in full less the costs of conveyance. Therefore,
even on those facts and even if he knew nothing more about the matter, he stood to gain a great deal
while, if he lost, the loss would be negiligible.
27. What was the exact risk the plaintiff ran? A portion of the land in dispute lies within municipal
limits and is a potential building site. There could be no pre-emption regarding that. Of the portion which
could be pre-empted there was danger from only two sources, namely that Church Missionary Trust
Association Limited of London which owned I bigha 4 biswas and Babu Amir Singh who owned 1 bigha
6 biswas. The danger of pre-emption from the Church Missionary Trust Association was remote, so
there was only Babu Amir Singh to consider. Seeing that the plaintiff would get back a proportionate part
of his Rs. 62,000 for the portion pre-empted and would be able to retain very valuable building land
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within municipal limits which he was getting cheap and that therefore he had nothing to lose and stood to
gain much if there was no pre-emption and to gain something, though and as much, if there was, it is
hardly likely he would throw away such a bargain for the sake of getting an inflated price of only Rs.
10,000 entered in the deed, especially as that much extra in the price would not really deter a would be
preemptor who was determined to get the land; after all event at the inflated price of Rs. 72,000 a pre-
emptor would still be getting a bargain. In the circumstances, we are of opinion that the probabilities lie
with the plaintiff.
28. On the one side we have a plaintiff anxious to buy. We have the price to be paid agreed upon.
We have the property to be conveyed clearly identified. We have payment of Rs. 10,000 as earnest
money. We have an unqualified admission that this money was received as earnest money. We have an
unqualified admission in writing that the contract was a concluded one. We have the money entered in
the Nawab s account books as earnest money. We have the plaintiff and Chattar Sen and the lawyer,
who accompanied Chattar Sen and who was present at the time (Daya Shanker, P. W. 5), all swearing
that the contract was a concluded one. We have the powerful fact that it was to the plaintiff s advantage
to seal the bargain despite a possible danger of pre-emption.
29. On the other side, we have a defence which has been shifting from time to time. We have the
present story take for the firs time in the evidence. The only extraneous support for it is the admitted fact
that there was some talk about inflation. We have the fact that it was to the Nawab s advantage to break
the contract if it was made. We have the fact that false defences were raised and later abandoned. In
the circumstances, seeing that the only issue which we have to decide is a very simple and narrow issue
of fact dependent upon the belief or disbelief of one witness on the one side, the Nawab, and Chattar
Sen and the lawyer Daya Shanker on the other, we see no reason why the plaintiff s witnesses who are
corroborated by written documents and the Nawab s accounts should not be believed.
30. The defendants rely on paragraph 4 of the plaint where the plaintiff states that it was also
agreed that an inflated price would be inserted in the deed. But this was never put forward as an
essential terms of the bargain, and the defendants in their reply did not treat it as such an defend the suit
on that ground; in fact their reply to this paragraph was that the allegations contained in it were not
admitted.
31. In the circumstances, regarding the evidence as a whole, we hold that the terms about inflation
was a mere request and was not treated by either side as an essential terms of the contract. We hold
that there was a final and concluded contract for sale on 7-2-1942.
32. The question of warranty arose in this way. When the sale deed was in the course of
preparation in March 1942 Chattar Sen brought a draft containing a warranty in a form to which the
Nawab s manager objected because the plaintiff was insisting on it; but there the matter ended. It is
usual to insert a warranty of title in most sale deed and when that is not done the law imports one; and in
some deeds there is a convenant for quiet enjoyment as well. All that happened here was that the kind
of warranty inserted by Chatter Sen in the draft was not acceptable to the other side. But nobody
suggested either in the evidence or the pleadings that the plaintiff refused to accept a sale deed unless
the exact form of warranty placed in the draft was given.
As we have said, this question arose subsequent to the contract for sale and the plaintiff s
insistence on this form of warranty at that stage could not affect the contract of 7-2-1942. It might in a
given case disentitle him to specific performance as it did in - Bindeshri Prasad v. Jairam Gir , 9 All 705
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(A). But that would depend upon whether his proposal regarding a form of warranty to which he was not
entitled was a mere proposal regarding the form of the sale deed or was a refusal to perform without it.
No question of repudiation or refusal to perform was raised in the pleadings nor is that to be found in the
evidence. On the contrary, the plaintiff s letter dated 22-4-1942 (Ex. 25) calls upon the Nawab to
complete the conveyance "as agreed to"; and the plaint is to the same effect; it says nothing about a
warranty. In the circumstances, a dispute arising subsequent to the contract for sale about a particular
clause in the deed during the negotiations about the form the deed should take cannot affect the
completeness of the contract already made, nor can it amount to repudiation when it is not persisted in
and the plaintiff later expresses his readiness and willingness to perform the contract "agreed to."
33. It was also argued that there was no concluded contract because the only parties who were
competent to contract never met. On the 7th Chattar Sen met the Nawab and the defendant s learned
counsel argued that Chattar sen had no authority to contract on behalf of the plaintiff. The later meeting
was between the plaintiff and the Nawab s manager and it was said that the manager had no authority to
conclude the bargain.
34. There is nothing in this point. The plaint states quite definitely that Chattar Sen was sent by the
plaintiff with Rs. 10,000 earnest money and relies on the contract effected by him. Chattar Sen s
authority to contract was no questioned. We cannot allow it to be questioned here. That means that
there was an effective and concluded contract on the 7th between Chattar Sen, on the plaintiff s behalf,
and the Nawab direct, both of whom were competent to seal the bargain. The question whether the
Nawab s manager had authority to complete the contract on the Nawab s behalf when he met the
plaintiff after this does not arise, for on that date there was already a binding contract in existence.
35. Disagreeing with the trial court, and agreeing with the majority of the Judges in the High Court,
we hold that there was a completed contract on 7-2-1942 which the plaintiff is entitled to have
specifically performed.
36. Now arises a question which touches the Custodian U. P. The contract was for Rs. 62,000. The
plaintiff paid Rs. 10,000 as earnest money but this was later returned, so Rs. 62,000 is still due. But
there is a conveyance outstanding in favour of the appellants for which they have paid, according to their
case. Rs. 58,000. If the Rs. 62,000 due to the Nawab is paid to him, or to the Custodian U. P. who
represents his estate, it is evident that the Nawab, who is at fault, will be paid twice over for the same
property and his estate will benefit accordingly while the appellants will be left of pursue their remedies
against the Nawab or his estate. The question is whether we have power to direct that the Rs. 58,000 be
paid to the appellants instead of to the Nawab and thus obviate further, and possibly fruitless, litigation.
But before we decide that, we will consider another question which is bound up with it, namely the
proper form of decree in such cases.
37. The practice of the courts in India has not been uniform and three distinct lines of thought
emerge. (We are of course confining our attention to a purchaser s suit for specific performance.)
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.
38. 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
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of the Transfer of Property Act.

39. Section 91 of the Trusts Act does not make subsequent purchaser with notice a trustee properly
so called but saddles him with an obligation in the nature of a trust (because of section 80) and directs
that he must hold the property for the benefit of the prior "contractor", if we may so describe the plaintiff,
"to the extent necessary to give effect to the contract". Section 3 illustration (g) of the Specific Relief Act
makes him a trustee for the plaintiff but only for the purpose of that Act. Section 40 of the Transfer of
Property Act enacts that this obligation can be enforced against a subsequent transferee with notice but
not against one who holds for consideration and without notice. Section 27 of the Specific Relief Act
does not carry the matter any further.
All it says is that specific performance may be enforced against
"(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract, except a
transferee for value who has paid his money in good faith and without notice of the original contract."
None of this helps because none of these provisions directly relate to the form of the decree. It will,
therefore, be necessary to analyse each form in the light of other provisions of law.
40. 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.
We do not know of any case in which a reconveyance to the vendor was ordered but Sulaiman C. J.
adopted the other course in - Kali Charan v. Janak Deo, A. I. R. 1932 All 694: (B). He 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. But 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 convenants in the deed between them which it would be inequitable to disturb
by cancellation of their deed. Accordingly, we do not think that is a desirable solution.
41. We are not enamoured of the next alternative either, 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 transfree to enter into terms and
convenants 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.
42. In our opinion, 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. This was the
course followed by the Calcutta High Court in - Kafiladdin v. Samiraddin , A. I. R. 1931 Cal 67 (C), and
appears to be the English practice. See Fry on specific Performance, 6th Edn. page 90, paragraph 207;
also - Poter v. Sanders , (1846) 67 ER 1057 (D). We direct accordingly.

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43. That brings us to the question to the Rs. 62,000. We do not think it would be right to lay down
that in every case the balance of the purchase money should be paid to the subsequent trasnferee up to
the extent of the consideration paid by him. There may be enquities 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 here are peculiar. The parties before us were prepared to
compromise, and had the Nawab been here it is more than probable that he would have been glad to
agree so as to avoid further litigation. But he is in Pakistan and is beyond the jurisdiction of the Indian
courts. We think it would be inequitable to leave the appellants to pursue what in all probability is only a
will-o-the-wisp and for us to augment the Nawab s estate by what would appear to be an unjust
enrichment. This is an equitable relief and we have a wide discretion. We joined the custodian U. P. to
afford him the opportunity of showing why we should not take what appears to be the just and equitable
course.
We have afforded him an opportunity of showing how the Nawab could have defended a suit by the
appellants for refund of the consideration. as he has not been able to show us anything in the contract
between the Nawab and the appellants, or in the covenants of their deed, which would disentitle the
appellants from claiming Rs. 58,000 from the Nawab, we consider it right that Rs. 58,000 should be paid
to them and Rs. 4,000 to the Custodian U. P. All that the Custodian U. P. as able to urge was that the
whole amount had vested in him and so was his. But that is not so. The plaintiff was directed to pay a
sum of Rs. 62,000 into court as a condition precedent to the execution of a sale deed in his favour.
Curiously enough, the decree does not say what is to be done with the money when it is paid into court.
But so long as it is in court under those conditions it lies there subject to such decree as may ultimately
be passed in appeal. We therefore have full power to direct payment of Rs. 58,000 to the appellants
instead of to the Nawab, especially as there is this curious lacuna in the decree.
44. The High Court s decree will not be modified as follows:
(1) The Nawab will be directed to execute a sale deed in the plaintiff s favour in accordance with the
terms of the contract entered into between them.
(2) The appellants will be directed to join in the conveyance to the extent indicated above.
(3) After the conveyance has been executed, the appellants will be paid Rs. 58,000 out of the Rs.
62,000 now lying in deposit in court as compensation for the loss they had suffered, without prejudice to
any further rights they may have against the Nawab or his estate.
(4) After this has been done, the Custodian U. P. will be at liberty to withdraw the balance of the Rs.
62,000. Except for these modifications, the decree stands and the rest of the appeal is dismissed.
45. The modifications we have made here do not affect the plaintiff s rights under the decree except
to his advantage. As against him, the appellants have failed. We accordingly direct that the appellants
pay the plaintiff the costs of this appeal. 82
46. There is an application for amendment of the High Court s decree. This will be disposed of by
the High Court.
Ordered accordingly.
For Citation : AIR 1954 sc 75

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