C GOVINDSWAMI PILLAI Vs. DORAISWAMI MUDALI

JUDGEMENT

(1.) In this case the plaintiff sued to recover two items of property-described in Schedules A and B. He got a decree in the first Court for both these properties. In appeal the Subordinate Judge has disallowed his claim for A Schedule property. He purchased this property under Ex. A, dated 20 April 1914. The 3 defendant who is the contesting defendant before me also purchased the very same property on 9 May 1914. The 3 defendant claims priority for his purchase over that of the earlier purchase by the plaintiff on the ground that he had a contract, under which the owner of the property, the 1 defendant, had agreed to sell it to him, of an earlier date than the 26 April 1914. That agreement was produced and it is Ex. III. The agreement was found to be genuine. The question that I have to decide turns upon Section 27 of the Specific Relief Act. If it is an agreement which could be specifically enforced under Section 27 against the plaintiff as purchaser subsequent to the date of that agreement then the 3 defendant's claim would be good. If there was an agreement established of an earlier date, it would be for the plaintiff who subsequently purchased the property to show that he is a transferee for value who has paid his money in good faith and without notice of the original contract. But before the 3 defendant can take advantage of Section 27, Clause (b), of the Specific Relief Act he has to show that he has a contract in his favour to sell. The document he produced, Ex. III, it is argued by the appellant's Vakil, does not amount to a contract at all but amounts only to an offer by the owner of the property to give a sort of right of pre-emption to the 3 defendant. It says "If it so happens that I have to sell it (the property) out of necessity, I will sell it to you for Rs. 60 and I bind myself to take the money from you and convey the land to you. I will give you ten days time from the date of my proposing to sell it within which time you should pay me the money and take the sale-deed from me. But if you fail to pay the money within the ten days I will overlook your right and claim and I will be at liberty to sell ii as I like." It is argued by the learned Vakil for the appellant that this does not amount to a contract at all but it is only a binding offer on the part of the 1 defendant to the 3 defendant that he would sell the property to him first, if necessity arises for him to sell it, at the price of Rs. 60. The document cannot be treated as a contract, for there is nothing in it to compel the 3 defendant to buy the property on the terms set out in it. As was held in a recent decision of this High Court in Egala Nagappa Naidu V/s. Muniswamy Iyer 65 Ind. Cas. 720 : 46 M. 30 : 30 M.L.T. 175 : 15 L.W. 409 : (1922) M.W.N. 201 : (1922) A.I.R. (M.) 16 : 42 M.L.J. 432, such a document as this would only amount to an offer and until that offer is perfected there is no binding contract resulting. No doubt when once the Offer is accepted, there will be a binding contract. Exhibit III, therefore, by itself, is not sufficient to justify the finding of the Subordinate Judge that the 3 defendant's purchase should prevail as against the plaintiff's earlier purchase. But the question that has been now raised was not properly put forward in the lower Appellate Court and I think, therefore, that an opportunity should be given to the 3 defendant to show, if he can, that this offer in Ex. III became a completed contract by his acceptance before the date of the sale to the plaintiff. If he is able to prove that, then the plaintiff will have to show that he paid the purchase-money in good faith and without notice of that contract, to save his purchase being postponed to the purchase by the 3 defendant; but till the 3 defendant proves the existence of a binding contract prior to 26 April 1914, the date of Ex. A, no question under the Specific Relief Act will arise.

(2.) The Subordinate Judge will be requested to submit findings on the issues whether Ex. III was converted into a binding contract between the parties by its acceptance by the 3rd defendant before the 26 April and, if so, whether the plaintiff is a transferee for value who paid his money in good faith without notice of that contract. Both parties will be allowed to adduce fresh evidence. The findings will be returned in two months from this date and ten days will be allowed for objections.

(3.) As regards the memorandum of objections filed in this case, it seems to me that there is no ground to support it. The finding of the lower Appellate Court that the property in Schedule B belonged to the 2nd defendant, as whose property the plaintiff purchased it, and was not the property of the 1 defendant is conclusive against the 3 defendant. That finding is supported by the evidence of the plaintiff's witnesses and I must accept it in second appeal. The memorandum of objections will, therefore, be dismissed with costs.