MALAIMEL THIRUVENKATACHARIAR Vs. PARI SESHADRI IYENGAR

JUDGEMENT

(1.) In this case the plaintiff sues to recover property in possession of defendants 4 and 5. Defendants 1 to 3 first contracted on the 12th July 1911 to sell the property to the defendants 4 and 5, then on the 11th September 1911 sold it by registered sale deed to the plaintiff who had notice of the previous contract and subsequently on the 17th October 1911 executed a registered sale deed in favour of defendants 4 and 5 and put them in possession, alter which the plaintiff instituted the present suit O.S. 23 of 1912 for possession. The Lower Appellate Court has decided that, as the defendants 4 and 5 have not obtained a registered sale deed they are not entitled to possession citing the Pull Bench decision, in Kurri Veerareddi v. Kurri Bapireddi (1904) I.L.R. 29 M. 330. That however was a suit by the plaintiff to recover possession from the defendant who had not obtained a registered sale deed but only a contract to sell. Here the plaintiff has obtained a transfer by a duly registered document from defendants 1 to 3 with notice of the prior contract by these defendants to sell the property to defts. 4 and 5. In this state of things he is bound by. Section 91 of the Indian Trusts Act to hold the property for the benefit of defendants 4 and 5 to the extent necessary to give effect to the contract. No such statutory obligation is imposed on the original owner who refuses to carry out his contract to sell and the decision in Kurri Veerareddi v. Kurri Bapireddi (1904) I.L.R. 29 M. 336 is therefore distinguishable. The question then is whether the defendants 4 and 5, who in the absence of a registered conveyance, have no right to recover possession of the property, can defend their possession as against the plaintiff by reason of duty imposed on him by Section 91 of the Indian Trusts Act to hold the property for them so far as may be necessary for the performance of the contract with defendants 1 to 1 In Lakshmi Doss v. Roop Laul (1906) I.L.R. 30 M. 169, a defendant who had made a transfer under circumstances which entitled him to avoid it was held by a Full Bench to be entitled to retain his possession against the transferee though he had not sued to set it aside and such a suit had become barred. Similarly in the present case, it seems to me, that defendants 4 and 5 are entitled to resist the plaintiff s suit for possession by virtue of the duty they are under to hold the property for the benefit of defendants 4 and 5 by virtue of Section 91 of the Indian Trusts Act. Though the provision would not enable the 4th and 5th defendants to sue for possession without at the same time praying for a conveyance, there is, as pointed out in Rajah of Ramnad v. Arunachalam Chettiar , a great difference between the position of a plaintiff and a defendant in such a case, and I think it is quite unnecessary to deprive the defendants 4 and 5 of possession and drive them to another suit. This is also the decision in Puchha Lai v. Kunj Behari (1913) 19 C.L.J. 213, I would therefore reverse the decrees of the Lower Courts and remand the suit to the first court for trial of issues 2, 3 and 4. Costs will abide. Srinivasa Aiyangar, J.

(2.) The question whether defendants 4 and 5 are entitled to resist the suit for possession by the plaintiff, who has now gob the title, has to be determined by a consideration not merely of the provisions of Section 91 of the Trust Act but also of Section 40 of the Transfer of Property Act and Section 27 of the Specific Relief Act. All the three sections enact in substance the right of a person who had obtained a contract of sale, to enforce the contract against a person who has subsequently obtained a legal title to the property from the vendor; the contract by itself does not create a right in rem, but only creates a right in personam against the vendor and that obligation is made enforceable against the subsequent purchaser, as an obligation in personam to a limited extent, namely, to the extent of compelling him to give effect to the previous contract by way of specific performance, though he is not liable in damages as the original vendor would be. The language of Section 91 of the Trust Act is that the subsequent transferee "must hold the property for the benefit of the latter to the extent necessary to give effect to the contract." It is clear therefore that the subsequent transferee is not a simple trustee for the person holding the contract, but he is only a person who holds the property for the benefit of the contractee to the extent necessary to give effect to the contract. If the contract by itself does not create a right in rem in the property contracted to be sold (as is now settled by the decision of the Full Bench in Kurri Veerareddi v. Kurri Bapireddi (1904) I.L.R. 29 M. 333 it cannot have any greater effect as against the transferee with notice. The person holding a contract for sale can undoubtedly bring a suit as plaintiff to enforce that contract against the subsequent transferee and obtain a conveyance from him, Potter v. Sanders (1843) 6 H are p 1 67 Eng. Rep. 1057, Daniels v. Davison (1811) 17 Ven p. 433, 34 Eng. Rep. 157 and in the same suit, he may be entitled to recover possession of the property, although strictly speaking his right to such possession would accrue to him only after the execution of the conveyance. In Gffur v. Bhikaji (1901) I.L.R. 26 B. 159, the plaintiff who had obtained a sale deed from his vendor sued to recover possession from a person to whom his vendor had sold the property with notice of the agreement for sale but before the actual conveyance. Section 91 of the Indian Trust Act was considered and the plaintiff was given a decree for possession against the subsequent purchaser but the correct form of the decree was said to be a decree for conveyance by the defendant to the plaintiff. A similar view was taken in a case in this court, Gudur Ranga Reddi v. Gundala Pitchi Reddi (1914) 1 L.W. 879. In that case specific performance against the vendor and the subsequent transferee with notice, was directed by ordering that the conveyance should be executed by both the vendor and the transferee.

(3.) In the case of a simple trust, where the trustee is a bare legal owner the cestui gue trust may be entitled to possession of the property and may compel the trustee to place him in possession. If however the trust is an active trust, that is if the trustee has to perform any duties in connection with the trust property, the cestui que trust is not entitled to possession as a matter of right, though the court can\in its discretion give possession. See Lewin on Trusts, page 847; Perry on Trusts, Sections 328 and 329; Underhill on Trusts, page 363; and Godefroi on Trusts, page 431.