P PRAKASA RAO Vs. P LAKSHMIKANTAM

JUDGEMENT

(1.) The plaintiff is the appellant in this second appeal which relates to a share in a house which belonged to a joint family consisting of several branches. There was a partition arrangement among the members of the family evidenced by Ex. A-1 styled a "settlement deed" and dated 16-1-1929. Under this arrangement, the house was divided into two portions described as 'A' and 'B' shares. The 'A' share was allotted to three sharers while the 'B' share was allotted to five. There was a clause in the settlement deed to the effect that if any of the sharers were to alienate his share of the house, he should offer to sell the same by registered notice to the other sharers at a price to be fixed by respectable persons and if the other sharers, on such notice, did not elect to purchase the share of the vendor within one month, was to be at liberty to sell it to strangers. On 26-2-1945 the 1st defendant, one of the sharers and a party to Ex. A-l executed Ex. B-3 a sale deed of his share in the house for Rs. 750/- in favour of the 2nd defendant, a stranger without giving intimation of the sale to his co-sharers. The plaintiff, one such cosharer who was a parly to Ex. A-l brought the suit out of which this second appeal has arisen for specific performance of the contract contained in Ex. A-l. The 2nd defendant in the suit who was the purchaser resisted the claim of the plaintiff, and the first defendant, the vendor, remained exparte. The defence of the 2nd defendant was that Ex. A-l was not supported by consideration and that it was void for uncertainty and therefore unenforceable. It was also pleaded that the suit was barred by limitation. Improvements to the house to the extent of Rs, 500/- were alleged !o have been effected by the 2nd defendant who claimed to be a bonafide purchaser without notice of Ex. A-1. The suit was decreed by the trial court but dismissed on appeal by the learned Subordinate Judge on the ground that the contract was void for uncertainty and could not therefore be specifically enforced. Ex A-1 is a completed contract which, in the event of one of the parties desiring to sell his share of the house, gives the others an option to purchase the share for such price as might be determined by respectable persons. The contract is supported by consideration because it was an integral part of the partition arrangement by which each of the sharers was allotted a share of the house. Part of the consideration for the allotments to the several sharers was the agreement on the part of each sharer to offer his share to the other in case he wanted to sell. Such a term is usual in partition arrangements particularly when, as in the present case, the property divided is an ancestral house. The stipulation in Ex. A-1 giving an option to the other co-sharers to purchase the share of a co-sharer who desired to sell it, is capable of being enforced. Sakalaguna Naidu v. China Munuswami, Venkatachalam Pillai v. Sethu Rama Rao. The further question is whether the agreement Ex. A-1 is so vague and uncertain as to be unenforceable. Under section 29 of the Contract Act, "agreements, the meaning of which is not certain, or capable of being made certain, are void". Under section 21 clause (c) of the Specific Relief Act, "a contract, the terms of which the court cannot find with reasonable certainty" cannot be specifically enforced. These brief and apparently simple statutory provisions have presented difficulty in their application to concrete cases. There is no doubt that the parties intended to make a binding arrangement and thought they had done so. Indeed the shares of most of the other sharers have been acquired by one of them and Ex. A-1 has been acted upon from 1929 till 1945. Not much assistance is to be derived from cases, for a decision upon the construction of one contract is not an authority upon the construction of another contract in different words and entered into in different circumstances. I remind myself of the observations of the learned Lords in Hillas & Co. v. Arcos Ltd. . Lord Tomlin said :

(2.) The further point taken by the court below was that the contract was uncertain and vague with regard to the price in as much as it was left to be fixed by respectable mediators, without naming any persons, in case the parties did not agree about the valuation. The parties to Ex. A-1 contemplated the purchase and sale of their shares in the house at some future time, which might be far distant, and could not have foreseen the conditions which would then obtain and with reference to which they could fix in advance the price in 1929. It would have been impracticable and unbusinesslike to fix in 1929 what the price was to be in 1945 or at any later time, when the option had to be exercised. The parties left the price to be determined in the future, when occasion arose according to a fair valuation. When Ex. A-1 referred to a sale "at the price that may be fixed by respectable persons," it provided in substance for a fair price having regard to the conditions prevailing at the time of sale. What is required in contracts of this kind is reasonable and not absolute certainty. A contract to sell at a fair price or at a fair valuation or to let out property for a "reasonable" rent or a "fair" or "proper" rent has been held to be specifically enforceable on the principle Certun Est Quod Cerium Reddi Potest, that, that is certain which can be made certain. The contract can be made certain by taking evidence and the court can enforce the contract with the terms so ascertained. The question is whether the mode of determining the price referred to in Ex. A-1 is subsidiary in the sense that if the parties failed to agree, the court may have to determine the fair and reasonable price. The court has often to personify a fair and reasonable person and determine the rights of parties on that assumption. Ex. A-l when it refers to "the price fixed by respectable persons" merely provides that the price to be paid by the purchaser shall be fair and just. The court which presumably comes under the category of "respectable persons" could determine the price on a fair valuation. In Secretary of State v. Volkart Bros the majority of the Full Bench held that a clause for renewal for a like period in a lease for 99 years "on such terms and conditions as should be judged reasonable" was not void for uncertainty and was enforceable. In New Beerbhoom Coal Co. v. Bularam Mahata the Judicial Committee expressed the opinion that in a suit for specific performance of a contract to sell land where there is no express stipulation as to the price payable, the reasonable price of the land has to be ascertained by the court and the fact that on account of the extraordinary character of the property as containing coal or other valuable minerals, there is considerable difficulty in fixing a reasonable rate for it, is not a sufficient reason for refusing a decree. Whether the clause in Ex. A-1 is to be construed as providing for sale at a fair and reasonable price or for an arbitration as regards the price the contract cannot be considered to be void for uncertainty. The whole position was succinctly summed up by Mangham L. J. in Foley v. Classique Coaches Ltd in these words :

(3.) For these reasons, I am of the opinion that if the parties could not agree, the court could have fixed a fair and reasonable price for the share sold and Ex. A-l cannot be held to be void on the ground that it did not fix a specific sum as the price to be paid by the purchaser who exercised the option. In the present case, the evidence of D. W. 1 the husband of the 2nd defendant examined as her witness shows that the sum of Rs. 750/-paid by her for Ex. B-3 was a fair and proper price for the share of the house sold to her by the first defendant.