A guardian of a Hindu minor entered into an agreement to sell immovable property belonging to the minor for discharging certain binding debts due by the deceased father of the minor, The intending purchasers discharged the debts and were put in possession of the properties in pursuance of the contract of sale; but the transfer had not been duly completed by the execution and registration of a deed of sale as provided for in the agreement. Taking advantage of this circumstance the minor sued by his next friend for possession of the properties from the intending purchasers. The latter relied upon section 53-A of the Transfer of Property Act as affording protection to them.
Held: Section 53-A of the Act is not so framed as to afford protection against claims of persons who are not parties to the transfer. The statutory bar imposed by the section is personal in character to the transferor. Section 53-A did not operate to bar the plaintiff's claim to recover the properties in question as he did not claim from his guardian, the transferor, and could not be affected with the fraud, or estopped by the conduct, of his guardian. The plaintiff was entitled to possession of the properties on restoring the benefit received by him by reason of the defendants having discharged the debts payable out of his estate as provided in the agreement of sale.
Madras High Court
Sri Kakulam Subrahmanyam And Anr. vs Kurra Subba Rao, Minor By ... on 22 November, 1943
1. These second appeals have been placed before a Division Bench as they raise a question of some general importance as to the applicability of Section 53A, T. P. Act, to an agreement for sale of immovable property made by a guardian on behalf of his ward. The facts giving rise to the case are not now in dispute. On 29th November 193S the plaintiff's mother and guardian entered into an agreement to sell the suit lands to defendants 1 and 2 (hereinafter referred to as the transferees) for discharging certain debts due by the deceased father of the plaintiff. The consideration for the sale was Rs. 17,200 out of which Rs. 16,000 was to be adjusted towards the debts due to the transferees themselves on promissory notes and Rs. 1200 was to be paid in discharge of a mortgage debt due to a third party. It is common ground that the transferees paid off this mortgage debt and were placed in possession of the properties in pursuance of the contract of sale, but the transfer had not been duly completed by the execution and registration of the deed of sale as provided for in the agreement. Taking advantage of this circumstance, the plaintiff, who is still a minor, sued by his mother appointed as next friend, for possession of the properties, impugning the transaction as not binding on him as there was no necessity for his guardian to sell the lands for discharging the debts which, it was alleged, could have been liquidated out of the income of the large extent of immovable property left by his father.
2. The Courts below have however found, and the finding has not been challenged before us, that the plaintiff's father had left a large amount of debts which could not have been discharged from the income of the family properties and that it was necessary and beneficial to sell some of them for the purpose. While recognising, accordingly, that, if the guardian had completed the sale by the execution and registration of a deed of sale, it would have bound the plaintiff under the Hindu law, the Courts below differed as to the legal effect of the mere executory agreement of sale made by the guardian, though followed by delivery of possession in furtherance of such agreement. The trial Judge held that Section 53A, T. P. Act, was applicable to the transaction in question and barred the plaintiff's claim. The lower appellate Court however took the view that an agreement for sale of a minor's property by his guardian was void, and that its part performance did not fall within the section and was no valid defence to an action brought by the minor to recover the property. It accordingly passed a decree for delivery of possession of the suit properties to the plaintiff on condition of the latter refunding to the transferees the sum of us. 17,200 with interest at nine per cent. per annum from the date of suit. Prom this decree the transferees have preferred S. A. No. 1315 of 1942 and the plaintiff has preferred S. A. No. 1440 of 1942 objecting to the direction to refund.
3. Now Section 53A was inserted in the Transfer of Property Act by the Transfer of Property (Amendment) Act, 20 of 1929. Before the Amending Act, the Courts in this country were showing a marked tendency to import into the law of India the English equitable doctrine of part performance, so as to nullify, in effect, specific statutory provisions governing transfer of title to immovable property. The true position, however, was elucidated by the Privy Council in G.H.C. Arifi v. Jadunath Majumdar ('31) 18 A.I.R. 1931 P.C. 79 and Pir Baksh v. Mohamed Taher ('34) 21 A.I.R. 1934 P.C. 235 at p. 658. In the latter case their Lordships observed:
The result is that, under the law applicable to the present case an averment of the existence of a contract of sale, whether with or without an averment of possession following upon the contract, is not a relevant defence to an action of ejectment in India. If the contract is still enforceable the defendant may found upon it to have the suit stayed, and by suing for specific performance obtain a title which will protect him from ejectment. But if it is no longer enforceable, its part performance will not avail him to any effect : see Currimbhoy & Co., Ltd. v. L.A. Creet ('33) 20 A.I.R. 1933 P.C. 29 at p. 987, per Lord Thankerton.
And the observations of Lord Thankerton to which reference was made further showed that the transferees would not be protected even if his right to sue for specific performance was not barred when the suit in ejectment was instituted. It was thus made clear that the only way open to a transferee, who had entered into possession in furtherance of the contract, to protect his possession was by suing for specific performance and obtaining a registered instrument of sale, and so long as he did not perfect his title in that manner he was liable to be ejected, notwithstanding part performance by delivery of possession, however, undesirable such a result might seem to be from a purely equitable point of view. It was to mitigate, to some extent, the rigour of the law thus expounded that Section 53A was introduced by the Amending Act of 1929, and although the decisions referred to above have been superseded in cases falling within and governed by that section, they apply in full force in all other cases, besides being of great value as indicating the correct method of approach in determining questions relating to transfers of immovable property in India without importing the rules of equity applicable to contracts of sale of real property in England. It follows that the plaintiff's suit must succeed unless the transferees can found themselves on the terms of Section 53A and invoke its protection.
4. As the section postulates a "contract" to' transfer immovable property, there was considerable discussion at the Bar as to whether an agreement entered into by a guardian on behalf of his ward was void or voidable or valid and numerous cases were cited before us. Mr. Somasundaram for the transferees, contended that, although it was held in Ramakrishna Reddiar v. Chidambaraswamigal ('28) 15 A.I.R. 1928 Mad. 407 that an agreement of sale of immovable property of a Hindu minor, even when entered into by the guardian for necessity, was not binding on the minor in the sense that it was specifically enforceable against him, such contract was not altogether void but was at the worst, only voidable by him after attaining majority, and reliance was placed on Zeebunnissa Begum v. Mrs. Danagher ('36) 23 A.I.R. 1936 Mad. 564 in support of this view. Reference was also made to Ramanathan v. Palaniappa ('39) 26 A.I.R. 1939 Mad. 531 and Annamalai v. Muthuswami ('39) 26 A.I.R. 1939 Mad. 538 where, explaining and following the Pull Bench decision in Ramajogayya v. Jagannath ('19) 6 A.I.R. 1919 Mad. 641, it was broadly laid down that
a guardian can under Hindu law, bind a Hindu minor's estate by a personal contract if circumstances such as those pointed out in Hanoomanpersaud Pandey v. Mt. Babooee Munraj Koonweree (1854-57) 6 M.I.A. 393 exist.
Learned counsel, therefore, urged that Section 53A was applicable to the case, the other conditions specified in the section being admittedly satisfied. On the other hand, Mr. Rajah Aiyer, for the plaintiff, argued that, though it must now be taken as settled that a decree against a minor's estate could be given on a simple contract debt incurred by the guardian for necessity, it was not because the contract as such was binding on the minor, but because the guardian's right of reimbursement was made available to the creditor in such cases and he submitted that the observations in the decisions reported in Ramanathan v. Palaniappa ('39) 26 A.I.R. 1939 Mad. 531 and Annamalai v. Muthuswami ('39) 26 A.I.R. 1939 Mad. 538 must be regarded as too wide and should not be accepted as correct, at any rate with reference to a guardian's agreement for sale of the minor's property, as a similar proposition laid down in Krishnaswami v. Sundarappayyar ('95) 18 Mad. 415 was relied on in Mir Sarwarjan v. Fakruddin Mohamed Chowdhury ('07) 34 Cal. 163 which was reversed by the Privy Council in Mir Sarwarjan v. Fakruddin Mohamed Chowdhury ('12) 39 Cal. 232. The learned Counsel also referred, in support of his argument to the Privy Council rulings in Waghela Rajsanji v. Sheikh Masluddin & Co. ('87) 11 Bom. 551 and Indur Chunder Sing v. Radhakishore Ghose ('92) 19 Cal. 507, and to the Full Bench decision in Venkatachalam Pillai v. Sethurama Rao ('33) 20 A.I.R. 1933 Mad. 322, where, dealing with an agreement of resale contained in a sale deed executed by a guardian and sought to be enforced by the minor after attainment of majority, the Court observed,
the validity or enforceability of such a contract does not therefore depend upon the question whether it was conducive to the benefit of the minor or not,
and held, on the authority in 89 Cal. 23212 that the contract was "void for want of mutuality." It was urged, in view of these decisions, that the agreement of sale evidenced by Exs. I and A must be deemed to be void and unenforceable against the minor, and that there was no room, therefore, for applying Section 53A. It was further submitted that, even if the contract was considered to be only voidable by the minor, the plaintiff, having brought the suit for recovery of the properties in repudiation of the transaction, must be deemed to have avoided it, so that the contract was no longer in force, and the same result followed. We do not, however, consider it necessary on this occasion to embark upon a discussion of these and other decisions cited before us which are by no means easy to reconcile as we find that the case can be decided on a simpler ground.
5. As we have already pointed out, the plaintiff would be entitled to recover the properties in question unless the transferee's possession is protected under Section 53A. It seems to us that the section is not so framed as to afford protection against claims of persons who are not parties to the contract of transfer. It provides that
the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract;
that is to say, it "imposes a statutory bar on the transferor," as their Lordships put it in Probodh Kumardas v. Dantmara Tea Co. Ltd. ('40) 27 A.I.R. 1940 P.C. 1 at p. 254. Where a guardian contracts to transfer immovable property belonging to his minor ward, can it be said that the minor is the "transferor" within the meaning of the section? The term clearly refers back to the opening words of the section and must, we think, be taken to signify the person who "contracts to transfer." It must be remembered that the doctrine' of part performance rests on the ground of fraud which is personal and has been held to apply only to the party who, having entered into the contract and permitted the obligee to act on the faith of it as if it were legally perfect, seeks to resile from it on the ground of its imperfect execution. For instance, in Blore v. Button (1817) 3 Mer. 237 it was held that while a properly executed lease by a tenant for life with a leasing power would bind the remainderman, a defective agreement, though partly performed could not be enforced against him. Sir William Grant M. R. observed:
It is considered as a fraud in a party permitting an expenditure on the faith of his parol agreement, to attempt to take advantage of its not being in writing. But of what fraud is a remainderman guilty, who has entered into no agreement, written or parol, and has done no act, on the faith of which the other party could have relied? The only way in which he would be affected with fraud would be by shewing that an expenditure had been permitted by him, with a knowledge that the party had only a parol agreement from the tenant for life. Without the knowledge, there is nothing in the mere circumstance of expenditure.
To the same effect are the observations of Lord Redesdale in Shannon v. Bradstreet (1803) 1 Schedule & Lef. 52 at page 72:
The party himself is bound by a part execution of a parol agreement principally on the ground of fraud which is personal. Such a ground could scarcely be made to apply to the case of a remainderman unless money had been expended and there had been an acquiescence after the remainder vested.
It may well be presumed that Section 53A which has been described by their Lordships in Pir Baksh v. Mohamed Taher ('34) 21 A.I.R. 1934 P.C. 235 at p. 659 already referred to as a "partial importation into India of the English equitable doctrine of part performance" was intended to have a similarly restricted operation, and the interpretation we have placed upon it accords with that view. The personal character of the "statutory bar" imposed under the section receives further emphasis from the description of its effect by their Lordships in S. N. Banerji v. Kuehwar Lime and Stone Co. Ltd. ('41) 28 A.I.R. 1941 P.C. 128 at page 248, as creating
rights of estoppel between the proposed transferee and transferor which have no operation against third persons not claiming under those persons.
6. We are accordingly of opinion that Section 53A does not operate to bar the plaintiff's claim to recover the properties in question, as he does not claim under the transferor, and cannot be affected with the fraud, or estopped by the conduct of his guardian. It only remains to consider on what terms, if any, the plaintiff should be granted a decree for possession. As already stated, the Court below has ordered delivery on condition of the plaintiff restoring the benefit received by him by reason of the transferees having discharged the debts payable out of his estate as provided in the agreement of sale, and the plaintiff has preferred the appeal S. A. No. 1440 of 1942, objecting to the condition. His learned Counsel, Mr. Rajah Aiyer, did not suggest that an unconditional decree should have been made, but urged that the lower Court should not have directed the payment of the full amount of the debts referred to in the agreement of sale but only of the amount that would be payable in respect of them when scaled down in accordance with the provisions of the Madras Agriculturist's Relief Act. No such question appears to have been raised in the Court below, and there is not even an allegation in the plaint that the plaintiff is an agriculturist entitled to the benefits of the Act. There are no materials before the Court for a proper determination of the question as to whether or not the plaintiff is an agriculturist within the meaning of the Act, and we cannot allow the question, which would involve. an investigation of fresh facts, to be raised at this late stage of the proceedings. In the result, we affirm the decree of the Court below, though on different grounds and dismiss both the appeals with costs.
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