RAJA KUMAR VENKATA PURAMAL RAZ BAHADUR VARU MINOR, RAJA OF KARVETNAGAR BY HIS NEXT FRIEND W A VARADACHARIAR Vs. VELAYUDA REDDI

JUDGEMENT

(1.) This is an appeal by the plaintiff from a decree dismissing his suit for specific performance of a contract of sale in favour of a temple of which he is the trustee, entered into between the Regulation Collector of Karvetinagar who was at the time the Dharmakarta of the temple and the late Venkataraya Reddy who was then the managing member of the family of the defendants. Under the agreement of sale the plaint lands were to be conveyed to the temple for a sum of Rs. 16,000, whenever the trustee pays that amount from the Devastanam funds. The Subordinate Judge dismissed the suit, on the ground that the plaint contract is void as offending the Rule against perpetuities; and the only question before us for decision is whether his judgment on this point is right. A suit, Original Suit No. 40 of 1902, was filed against the late Vekata-raya Reddy as the managing member of his family for the recovery of the village of Veeraraghavapuram, which was in the possession of his family. Venkataraya Reddy defended the suit, and the suit was eventually compromised by the registered agreement which is now sought to be enforced. Venkataraya Reddy died in December 1905, and the defendants are the members of his family. The defendants were asked by the plaintiff to receive the sum of Rs. 16,000 and convey the suit lands to the temple, but they have not done so.

(2.) The material part of the agreement is as follows: "We both ... have entered into a compromise and I have agreed under that compromise to sell ... these five villages and all my rights therein for Rs. 16,000 to the Devastanam of the said Subramaneswara Swamiar. Whenever the said price of Rs. 16,000 is paid to me from the said Swamiar Devastanam funds, I agree to execute a sale-deed for the said five villages at that very time for the said Subramania Swami Devastanam and deliver possession of the said villages to the said Devastanam." The Subordinate Judge is of opinion that as this plaint agreement fixes no time for its performance but leaves it indefinitely to the promisee to choose his own time and as it provides that the promisor shall convey the properties whenever the price happens to be paid out of the funds of the temple and the suit has now been brought after the death of Venkataraya Reddy against he surviving members of the family, such a contract is invalid and unenforceable as infringing the rule against perpetuities, and he relies on the case of Kolathu Aiyer v. Rangavadhyar 18 Ind. Cas. 203 : 24 M.L.J. 84 : 13 M.L.T. 179 : 38 M. 114; (1913) M.W.N. 163. We are of opinion that his decision cannot be supported. Under Section 54 of the Transfer of Property Act a contract for the sale of immoveable property does not by itself create any interest in the property. Such a contract does not run with the land and is not binding upon a purchaser unless he takes with notice. It does not create an interest in the land, and is not, therefore, within the scope of Section 14 of the Transfer of Property Act. If this contract created an interest in the land, then even a purchaser without notice would have been bound by it.In the case of Kolatha Aiyer v. Rangavadhyar 18 Ind. Cas. 203 : 24 M.L.J. 84 : 13 M.L.T. 179 : 38 M. 114 : (1913) M.W.N. 163 the learned Judges Benson, and Sundara Aiyar, JJ., say that there is no substantial difference in the law to be applied in India and in England, as the Specific Relief Act lays down that an agreement for the sale of land may be specifically enforced against any person claiming under the vendor, except against a bona fide purchaser for value without notice (section 27), and the Indian Trusts Act also lays down that a transferee taking with notice of a prior contract in favour of another mitost hold the property obtained under his transfer as trustee for the previous promisee (section 27). We are unable to agree with this view. It is opposed to the Full Bench judgment in Kurri Veerareddi v. Kurri Bapireddi 29 M. 336 : 1 M.L.T. 153 (F.B.) : 16 M.L.J. 395. The judgment of the learned Chief Justice in that case fully explains the law, and he points out there that Section 54 was intended to prevent the question being raised as to whether the law of England as to the legal effects of a contract of sale of land applied in this country. The same view was also taken in a subsequent judgment [Avula Charamudi v.Marriboyina Raghavali 28 Ind. Cas. 871 : 28 M.L.J. 471] by Aiyling and Tyabji, JJ., who disagreed with Benson and Sundara Aiyar, J J. All the authorities are considered in these two judgments and we do not think it necessary to refer to them in detail.

(3.) It is also clear that Venkataraya Reddy entered into the contract as the managing member of the family, and we are of opinion for the reasons above stated that the decision of the Subordinate Judge holding that the contract cannot be enforced for the reasons assigned by him, cannot be sustained.