KEDARNATH KHETAN Vs. JAINARAIN RAM LUNDIA

JUDGEMENT

(1.) THIS appeal arises out of an objection to the execution of a decree against the plaintiffs, of whom the appellant is one, in a suit for specific performance of contract.

(2.) ON 29-2-1936, a partnership firm known as Marwari Brothers', consisting of, amongst others, Jainarain Ram Lundia, Gobardhan Das, Badri Prasad and Bisheshwar Nath (after his death, Madan Lal), forming one group known as the 'Bettia Group' and of the plaintiffs, namely, Kedar'nath Khetan and Firm Surajmal Sagarrnal, known as the 'Padrauna Group', forming the other group, was brought into existence with the object of promoting a company for starting a sugar mill in Champaran and to secure a managing agency for that partnership firm. The capital of this firm was Rs. 8,00,000/-, consisting of 800 shares of Rs. 1000/- each. Gobardhan Das and his brother, Badri Prasad had 100 shares; Jainarain had 150 shares and Madan Lal had 100 shares. Thus the total shares owned by this Bettia Group was 350. The plaintiffs owned the remaining 450 shares. In pursuance of the agreement, a sugar mill was started and incorporated as a private limited company under the name of 'Ganga Devi Sugar Mills Limited' with the capital of Rs. 8,00,000/- mentioned above. The parties fell out, and it was agreed that the Bettia group would sell their 350 shares to the plaintiffs and also their seven annas share in the firm Marwari Brothers. In August, 1941, a suit was instituted by the plaintiffs in the original side of the Calcutta High Court for specific performance of the contract to sell their shares mentioned above. In 1944, the suit was decreed, and the decree directed specific performance of the contract in respect of 269 shares only out of 350 shares, because some of the partners, it was found, had not entered into the agreement for selling their shares, and for transference of six annas four pies share in the Marwari Brothers on payment of the entire consideration money, Rs. 2,45,000/-, which was the price agreed upon for sale of the 350 shares and seven annas share in the Marwari Brothers. There were two appeals filed against this decree, one by Jainarain Ram and Madan Lal and another by Gobardhan Das. Out of these 269 shares, 150 shares belonged to Jainarain, 100 shares to Madan Lal and 19 shares to Gobardhan Das. The appeal filed by Jainarain and Madan Lal (Appeal No. 5 of 1945) was dismissed, and Appeal No. 3 of 1945, by Gobardhan Das, was allowed. In effect, the appellate decree directed specific performance in regard to 250 shares only belonging to Jainarain and Madan Lal and their five annas share in the Marwari Brothers on payment of the entire consideration money aforesaid. There was a further appeal by Jainarain and Madan Lal to the Privy Council, which was ultimately transferred to and heard by the Federal Court, and, on 6-5-1949, the appeal was dismissed. The judgment of the Federal Court is reported as -- 'Jainarain v. Surajmull', AIR 1949 FC 211 (A). Madan Lal died during the pendency of this appeal, and his mother and heiress, Dhupeshwari Devi, was substituted in his place. The respondent Jainarain Ram Lundia applied for execution of the decree to the Court of the Subordinate Judge at Motihari, after getting the decree transferred to that Court under the provisions of the Code of Civil Procedure, on his own behalf as also on behalf of Dhupeshwari Devi. Objection was taken by the appellant, one of the plaintiffs, to the executability of the decree on several grounds, amongst which the following need be mentioned : (1) that, in accordance with the decree, the plaintiffs did tender to the defendants' solicitors, on 7-9-1944, the price for the 269 shares of the said Ganga Devi Sugar Mills Limited and six annas four pies share in the Marwari Brothers; (2) that the defendants wrongfully failed and neglected to perform the said decree; that, pending the appeal before the Federal Court, the said firm of Marwari Brothers was dissolved by an agreement between the partners thereof, including the plaintiffs and the defendants; and that as, during the subsistence of the firm of Marwari Brothers, the defendants took no steps to perform their part of the decree, the defendants are no longer in a position to fulfil their obligations and, therefore, the execution was not tenable; (3) that even Jainarain Ram has not offered to transfer 250 shares in terms of the said decree and, in fact, there could be no offer for transfer of 100 shares standing in the name of Madan Lal because Jainarain alone was the applicant; and (4) that the executing Court had no jurisdiction to execute the decree because the decree of the appellate Court, namely, of the Federal Court, was not sought to be executed which was the only decree capable of execution. A rejoinder petition was filed by the respondent Jainarain Ram on several grounds. ONe was that, he, through his solicitors, sent several letters to the solicitors of the plaintiffs showing their readiness to comply with the terms of the decree and asking the plaintiffs to fulfil their obligations. The plaintiffs paid no heed -- thus showing that the plaintiffs were given sufficient opportunity and they wilfully defaulted in the performance of the decree. Another objection was that soon after the decree of the Calcutta High Court, when the matter was still 'sub judice', the plaintiff-appellant removed the names of the petitioner Jainarain and Madan Lal from the register of share-holders without the consent and behind the back of the decree-holders; that petitioner respondent No. 1, Jainarain Ram Lundia, and other decree-holders were and are always ready to perform their part of the decree and they requested the objector to make payment and get a deed of assignment executed in terms of the decree, that the objector had taken possession of the shares decreed and was appropriating the dividend and the profits. There is no denial, however, of the fact that the plaintiffs duly tendered the price to the solicitors of the defendants after the decree of the Calcutta High Court or of the fact that, during the pendency of the appeal before the Federal Court, the said firm of Marwari Brothers was dissolved by an agreement between the partners, including the plaintiffs and the defendants, and that the firm no longer existed. The applicant Jainarain examined two witnesses to prove that letters were sent by the defendant' solicitors to the solicitors of the plaintiffs asking the plaintiffs for payment of their clients' dues, and the plaintiff also examined one witness to prove that he had no information about any such letters received by his solicitors from the defendants' solicitors.

(3.) BEFORE I consider this matter, I think, it is necessary to set out some relevant extracts from the decree on appeal to the Calcutta High Court: (1) it is declared that the agreement entered into between the parties ought to be specifically performed and carried into execution; (2) upon payment and/or tender to the defendants appellants Jainarain Ram and Madan Lal of the sum of Rs. 2,45,000/- with interest, the plaintiffs are entitled to 250 shares belonging to those defendants in the Ganga Devi Sugar Mills Limited and five annas share belonging to them in the Marwari Brothers; (3) it is ordered and decreed that the plaintiffs be at liberty to tender to Messrs. C. C. Basu, attorneys of the said defendants, the sum of Rs. 2,45,000/- with interest as aforesaid in respect of 250 shares--the serial numbers of shares are mentioned-- and five annas share in the Marwari Brothers; (4) against payment or tender by the plaintiffs of the sum of Rs. 2,45,000/- with interest, the said defendants and all proper parties do execute in favour of the plaintiffs proper deed or deeds of transfer or assignment of the said 250 shares aforesaid and the five annas share in the Marwari Brothers; and (5) such deed or deeds of transfer or assignment be settled by the Registrar of this Court, in case the parties differ about the same, and to be executed by him for and on behalf of the party or parties refusing or neglecting to do so on the same being tendered to him or them. I have given the substance of the extracts in the decree, and they are not quotations from it. The appellant, in his application of objection under Section 47. Civil P. C., mentioned the fact that the plaintiffs had tendered the said sum of Rs. 2,45,000/- to the defendants' solicitors on 7-9-1944, the decree having been passed by the original side on 14-8-1944, that is to say, within less than a month from the date of the decree. The applicant for execution, namely, Jainarain, did not deny in his rejoinder application and this fact is conceded before this Court. It is true that since then there was no fresh tender, and it is also true that the tender was made of the price for the transfer of 269 shares in the Ganga Devi Sugar Mills Limited and six annas four pies share in the Marwari Brothers, but it does show the willingness on the part of the plaintiffs to perform their part of the decree. The appellate Court modified that decree to the extent that the price was to remain the same while the number of shares was reduced from 269 to 250 in the Ganga Devi Sugar Mills Limited and six annas four pies share was reduced to five annas, in the said Marwari Brothers. The solicitors for the defendants, therefore, if they had so liked, should have demanded a clarification from the plaintiffs or their solicitors as to whether the tender made by them should be taken to be still subsisting in view of the modifications made by the appellate Court. There is no such evidence on record. When the matter was pending before the Federal Court in appeal, it is alleged by the appellant and it has not been denied by the respondents, that the firm Marwari Brothers was dissolved by an agreement between the partners thereof, including the plaintiffs and the defendants, and that firm did no longer exist. In the absence of any denial of that fact, I must proceed on the footing that the firm Marwari Brothers was dissolved during the pendency of the appeal in the Federal Court. If that firm stood dissolved, it became impossible for the defendants to transfer any share which they had in that firm of Marwari Brothers. In spite of no denial of that fact in the rejoinder application, the defendant Jainarain, in his application for execution, expressed his and other defendants' readiness to convey to the plaintiffs the 250 shares in the Ganga Devi Sugar Mills Limited and five annas share in the Marwari Brothers. This expression of willingness cannot, therefore, be taken to have been made in good faith.