ALLIBHAI MAHOMED AKUJI Vs. DADA ALLI ISAP

JUDGEMENT

(1.) The facts of this appeal are peculiar, and were I not of the opinion that they are covered by authority, I should have referred it to a bench. The plaintiffs sued for specific performance of a contract of sale dated May 14,1874. The facts are simple. The plaintiffs ancestor Ali Isap was the original owner of the land. One Ranchhod obtained a decree against him in 1871, and then in sale in execution the suit land was sold by auction and purchased by one Jibhai on October 8, 1872. On May 14, 1874, the said Jibhai sold the suit land to the grandfather of defendants No Section 1 to 3 and 5 to 10, and on the same day the vendee Akuji, defendants grandfather, executed a registered agreement in favour of Abhram by which he bound himself to sell the land to Abhram for Rs. 461 at any time when the money was offered, and not to sell the land to any other person whatever. The plaintiffs case is that Jibhai was a mere benamidar for their ancestor Isap, the father of the person to whom the agreement was executed. And now after more than fifty year they sue for specific performance of the agreement, Both the Courts below have awarded the plaintiffs claim. Defendant No. 1 makes this second appeal, and four objections have been taken in appeal, viz, (1) that the agreement is incapable of specific performance as it infringes the law of perpetuity, (2) the agreement which prohibits alienation to anybody else is void, (3) Jibhai was a benamidar of the original creditor, and plaintiffs sue to enforce the agreement against the successor-in-title of the original purchaser, which is against Section 66 of the Civil Procedure Code, and (4) the original agreement was with a minor. (This has been given up).

(2.) The most important ground is the first one. The agreement in question is before the Transfer of Property Act came into force. Under Section 54 of the Transfer of Property Act, a contract for sale does not of itself create any interest or charge on such property, but it is contended that before the Transfer of Property Act came into force it was held that English law applied to agreements, and they created an equitable interest in land, and therefore were subject to the law of perpetuities, and reference is made to Harkisandas V/s. Bai Dhanu That case refers to the case of Dinkarrao Ganpatrao V/s. Narayan Vishwanath, s.c. 24 Bom. L.R. 449, in which it was held, in dealing with a contract of 1878 that prior to the Transfer of Property Act a contract for the sale of immoveable property created an equitable interest in the property and made the purchaser the owner in equity, and consequently the English decisions like London and South Western Railway Co. v. Gomm (1882) 20 Ch.D. 563 would apply, and it was not, therefore, really necessary in that case to decide the question whether the law would be the same in cases governed by the Transfer of Property Act. On reference to Dinkarrao's case, I am of opinion that the present case is clearly governed by it. In that case by a sale deed of 1878 the vendor conveyed to the purchaser a plot of land forming part of a larger piece of land, and the vendor covenanted that In case you or your heirs have to sell the said plot, the same is to be sold back to me for the abovementioned value. It is not to be sold to any other person. In case you are informed in writing that I or my heirs or Vahivatdars or donees from me are not going to purchase it, then only you can sell it to another person if you like.

(3.) It was held that the covenants in question were void as offending against the principle underlying the rule against perpetuities, relying on London and South Western Railway Co. V/s. Gomm and the other cases quoted there. It is described in the judgment as a contract creating a right of pre-emption which cannot be specifically enforced until the proper occasion arises in the future, and it was held by Macleod C. J. that such contracts, though not creating an interest in land either equitable or executory under Section 54 of the Transfer of Property Act, do create rights which are capable of being enforced with regard to the land in certain circumstances against third parties, and the rule of perpetuities made applicable to this country by Section 514 of the Transfer of Property Act applies to this class of contracts, and it was held by Kanga J. that prior to the Transfer of Property Act the law assumed in ill. (a) to Section 13 of the Specific Relief Act: that a contract for the sale of immoveable property created an equitable interest in the property and made the purchaser the owner in equity, was the law in India, and he goes on to say (p. 215):- Now we have before us an agreement made in 1878 to convey an immo- veable property upon the happening of an event which might occur at a more remote period than the lives in being and eighteen years afterwards. It is an agreement creating under the law prior to the Transfer of Property Act an equitable interest in immoveable property which would be void as infringing the rule against perpetuities: London and South Western Railway Co. V/s. Gomm (1882) 20 Ch. D. 563 and Woodall V/s. Clifton [1905] 2 Ch. 257.