PARSHOTAM PARSHAD Vs. TAIMUR ALI SHAH

JUDGEMENT

(1.) On 4 December 1925 Taimur Ali Shah and his wife and mother executed a deed of usufructuary mortgage in favour of the Hira Bullion Bank in order to secure a debt of Rs. 5000. The property mortgaged consisted of a house with the land appurtenant to it, an area of 22 big has odd in Khata No. 6/l/2, an area of 4 bighas 3 biswas in Khata No. 9 and an area of 6 bighas 4 biswas in Khata No. 11. Interest was to be paid on the sum of Rs. 5000 at the rate of 12 per cent. per annum and the mortgagors undertook to accept a theka of the mortgaged property at a rent Rs. 600 a year (equivalent to the interest) and to induce their tenants to enter into an agreement to pay this sum directly to the mortgagees. On 12 November 1937 Taimur Ali Shah alone executed an agreement to sell the two properties in Khatas 9 and 11 (which by that time had been renumbered 10 and 12 respectively) to Parshotam Parshad for Rs. 10,350. He acknowledged the receipt of Rs. 500 by way of earnest money and undertook to execute a conveyance within a period of one month. On the other hand Parshotam Parshad was to forfeit the earnest money if he failed to get the sale deed registered within that period. The fact that the property was subject to the usufructuary mortgage of 4 December 1925 was specifically mentioned in the agreement but it was not stated whether the vendor or the vendee would be liable for the payment of the mortgage money. It was further recited that the whole property had passed to Taimur Ali Shah under a deed of gift executed by his mother in 1928. On 6th December 1937, Taimur Ali Shah executed a further agreement in which he said: The property sought, to be sold stands mortgaged to the Hira Bullion Bank.... It is necessary that the account of the said Bank should be cleared up. It was agreed that time for a month should be allowed for clearing the account and completing the sale deed. But as the account of the said Bank where the property sought to be sold stands mortgaged with possession has not been cleared up and as a sale deed of the property aforesaid cannot be completed until the account has been cleared up, I do covenant that I shall without fail clear up the account of the said Bank within a month and have the said sale deed completed and registered. I shall abide by the conditions of the agreement aforesaid dated 12 November 1937 in every way. If I fail to get the sale deed completed with my signature and those of the witnesses and have the same registered the Lala Saheb aforesaid shall be authorised to have the sale deed registered through the Court.... It is further stated that the agreement dated today has been executed for extending time.

(2.) On 5 January, 20 January, 29 January, 15 February and 24th February 1938, Taimur Ali Shah wrote letters to Parshottam Parshad asking for extensions of time for executing the sale deed on the ground that he had not been able for various reasons to settle the account. In the last letter he asked for time up to 11 March. On that date Parshotam Parshad sent him a telegram saying that the time allowed had expired and threatening him with a suit for specific performance. On 4 July 1988 Taimur Ali Shah wrote another letter to Parshottam Parshad in which he said that he was instituting a suit against the Hira Bullion Bank for a declaration of the fact as to what amount is due to it and requested that no legal proceedings should be instituted till the suit was decided. It does not appear that any such suit was filed.

(3.) Eventually on 14 February 1939, Parshotam Parshad instituted the suit for specific performance which has given rise to this appeal. He impleaded Taimur Ali Shah, the Hira Bullion Bank and one Lala Sarju Parshad who had purchased the property at a sale in execution of a decree but with whom we are no longer concerned because the sale in his favour was subsequently set aside while the suit was pending in the lower Court. The relief claimed was that a decree for completion of the contract might be passed and defendant 1 (that is, Taimur Ali Shah) should be ordered to execute and complete a sale deed in favour of the plaintiff for Rs. 9850 out of which Rs. 5000 or whatever amount the Court might adjudge might be left with him for payment to defendant 2 (that is, the Hira Bullion Bank). The Bank alleged that it had been wrongly impleaded and that no point relating to the mortgage could be settled in the suit but that it had no objection to a decree if the plaintiff paid to it the full amount due which included a sum of Rs. 1500 on account of revenue et cetera. Taimur Ali Shah pleaded in his written statement that the property was worth Rs. 62,500 (which seems to have been irrelevant) and that it was agreed between the parties that the amount of defendant 2 would be settled. that it would release the property on taking a small amount and that the sale deed could then be executed, but that nothing had been settled with the Bank, which was not ready to release the property in dispute, and in the circumstances the plaintiff had no right to sue for the completion of the contract. In a further statement made under Order 10, Rule 2, Civil P.C. he said that his real intention had been to borrow Rs. 500 but that he could not do so without executing the agreement and that he had consented to do so under the belief, since falsified, that the value of the property would be greatly reduced by impending legislation in favour of agricultural tenants. After the suit had been pending for more than a year Taimur Ali Shah made an application to be allowed to amend his written statement and to raise the plea that he had been induced to execute the agreement by misrepresentations made by the plaintiff. This application was rightly rejected because the allegation was made much too late.