SHYAM SINGHversusDARYAO SINGH (DEAD) BY LRS. AND ORS.

A                                  SHYAM SINGH
                                           v.
                 DARY AO SINGH (DEAD) BY LRS. AND ORS.

                               NOVEMBER 19, 2003

B          [SHIVARAJ V. PATIL AND D.M. DHARMADHIKARI, JJ.]


          Specific Relief Act, 1963-Section l 5(b)-Agreement for sale of suit
    property-Agreement for repurchase within a specified time entered into
C   simultaneously-Transfer of the right of repurchase-Suit for specific
    performance/or enforcement of the right ofrepurchase-Trial Court and first
    appellate court dismissing the suit on ground that the right of repurchase,
    being a personal right, cannot be assigned or transferred to a third party-
    High Court affirming on the ground that there was no express prohibition
    against assignment in favour of third party in the agreement for repurchase-
D   Correctness of-Held, in law, an implied prohibition cannot be read into an
    agreement in the absence of express prohibition and hence the right of
    repurchase can be assigned or transferred to third party-Matter remanded
    to trial court on account of subsequent developments-Transfer of Property
    Act, 1882; Section 58(C).

E          Respondent-defendants 2 to 4 executed a registered sale deed of the suit
    property in favour of respondent I-defendant. On the same day, respondents 2
    to 4 entered into an agreement with respondent 1 for repurchase of the suit
    property within a specified time. Respondents 2 to 4 sold their rights of
    repurchase in favour ofappellant by a registered document. Appellant-plaintiff
F   filed a suit for specific performance of agreement of repurchase against the
    respondent-defendants before trial court. The trial court dismissed the suit
    holding that the document executed in favour of the appellant does not amount
    to transfer of right of repurchase in favour of the appellant but a transfer in
    interest in the property which is invalid since respondents 2 to 4 bad already
    transferred their interest and title in favour of respondent 1. In appeal, the
G   first appellate court upheld the dismissal of the suit by the trial court. Further
    held that the right of repurchase, if any, available to respondent 2 to 4, was a
    personal right which was not assignable or transferable. The High Court
    dismissed the second appeal of the appellant holding that the personal right
    available to respondents 2 to 4 cannot be assigned or transferred in the

H                                         784
                  SHYAM SINGH v. DARYAO SINGH (DEAD) BY LRS.                785
absence of express prohibition in the agreement for repurchase of the suit        A
property.

        Allowing the appeal and remanding the matter to the trial court, the
Court

      HELD: 1.1. Reading the agreement for repurchase of the suit property B
executed in favour of respondents 2 to 4 by respondent 1 as a whole and
particularly keeping in view the fact that a long period of ten years was fixed
for obtaining reconveyance, no implied prohibition of transfer or assignment
can be inferred in the document particularly in view of the provisions under
section lS(b) of the Specific Relief Act, 1963. Under the terms of the C
agreement, there is no express prohibition against assignment or transfer of
the right of repurchase by the original party in favour of the third party.
                                                              [789-C-D; 790-B)
      1.2. Though there is no clear stipulation, both the contracting parties
would be presumed to have been alive to the legal provisions contained in
section lS(b) of the Specific Relief Act. The two document-one for sale and       D
the other of repurchase-were executed on the same day. As the sale and
agreement of repurchase are contained in two separate documents, although
contemporaneously executed, the transaction cannot be treated a 'mortgage'
under section 58(c) of the Transfer of Property Act, 1882 but it seems to be
a transaction akin to a 'mortgage'-ifnot 'mortgage proper'. From the tenor        E
and contents of the two documents contemporaneously executed, it seems that
respondents 2 to 4 to raise money, sold the property but with a right to
repurchase on return of the money. (790-D-FJ
       1.3. In the absence of any words or expressions in the documents
indicating prohibition on assignment or transfer of right of repurchase and F
in the face of clear provisions of section lS{b) of the Specific Relief Act, 1963,
an implied prohibition cannot be read into the terms of the document. Merely
because in the documents, there is mention of 'heirs' of the contracting parties
but not their 'assignees' or 'transferees', the legal right of assignment
available to the benefit of original contracting party under section lS(b) of
the Act cannot be denied to it. [791-A-B)                                          G
     T.M Ba/akrishna Muda/iar v. M Satyanarayana Rao and Ors., [1993)
2 SCC 740 and Habiba Khatoon. v. Ubaidul Haq, [1997) 7 SCC 452, relied
on.

      1.4. Unless the contents of the documents in question and evidence in       H
    786                     SUPREME COURT REPORTS [2003) SUPP. 5 S.C.R.

A relation thereto are so clear to infer a prohibition against assignment or
    transfer, the right of repurchase has to be held to be assignable or transferable
    and cannot be treated as personal to the contracting parties. On a very
    unsubstantial ground that the document in question makes a mention only of
    'parties' and their 'heirs' and not 'assignees' or 'transferees', it cannot be
B   held that the right of repurchase was not assignable. The courts below were
    in error in construing the document in question in a manner to infer an
    implied prohibition against assignment and transfer. The appellant-plaintiff
    as 'assignee' or 'transferee' from the original contracting party is entitled
    to seek specific performance of the contract from respondent I.
                                                                   [792-D-F; 793-D]
c
          2. The additional grounds urged by respondent in this appeal as a result
    of subsequent legal developments of Consolidation of Holdings under U.P.
    Consolidation of Holdings Act, 1953 raise issues of fact and law. The case is
    remanded to the trial court for deciding the additional issues arising between
    the parties. [793-C; E)
D
          Piarey Lal v. Hori Lal, [1977) 2 SCR 915, referred to.

          Rajeshwar v. Board of Revenue, (1995) Allahabad Law Journal 144
    referred to.

E         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 857of1998.

          From the Judgment and Order dated 30.9.97 of the Allahabad High Court
    in S.A.No. 3098of1997.

          Pradeep Misra for the Appellant.
F
          P.K. Jain for the Respondents.

          The Judgment of the Court was delivered by

          DHARMADHIKARI, J. The High Court of Allahabad in Second Appeal
G before it by impugned judgment dated 30.9.1997, concurring with the two
  courts below, has dismissed the suit of the plaintiff/appellant seeking specific
  performance of Agreement of Repurchase of property in dispute on the
  ground that under the terms of the agreement dated 4.2.1971, the right of
  repurchase was personal in favour of the original contracting parties (defendant
  nos. 2 to 4) and the said right was not assignable or transferable in favour
H of the plaintiff.
       SHYAM SINGH v. DARY AO SINGH (DEAD) BY LRS. [DHARMADHIKARI, J .)     787
       The only legal question involved is whether the terms of the agreement A
of repurchase dated 4.2.1971 contain any implied prohibition on the original
contracting parties (particularly defendants 2 to 4) from transferring or assigning
their rights in favour of third party?

      The relevant facts for deciding the above legal question are as under:-
                                                                                  B
       Defendants 2 to 4 were Bhumidars of the lands in dispute situate at
village Nala, District Muzaffarnagar in the State of Uttar Pradesh. On 4.2.1971,
the owners executed registered sale-deed in favour of defendant No. I
(contesting respondent no.I herein) for a consideration of Rs. 4900/-. On the
same day defendant No.I who had purchased the property executed an
agreement for re-conveyance of the said property in favour of defendant Nos. C
2 to 4. The relevant terms of the Agreement of Repurchase dated 4.2.1971, on
interpretation of which the parties are at variance, in its relevant parts (rendered
into English) read as under:

"Ex.4 dated 4.2.1971
                                                                                  D
ORIGINAL ON STAMP PAPER OF RS. 2.25

      Whereas we, Daryao Singh son of Hardeva the first party and Surajmal,
Peetam and Babu sons of Rati ram, the second party, Jat, residents of Village
Nala Pargana Kandhala, Tehsil Budhana District Muzaffarnagar. The party E
No.2 has executed a sale deed today in favour of the party No. I for a sum
of Rs. 4900 in respect of2 Bigha 7 Biswas of the land ofKhasra No.95, bearing
a rent of rs.6.25 annually situate in Khata No.331 of village Nala, Pargana
Kandhala, Tehsil Budhna, District Muzaffamagar, about which it was agreed
between the parties that if the second party paid the entire consideration of
the sale deed Rs. 4900 to the first party or to the heirs of the first party within F
 ten years from today then in that situation the first party will reconvey the
 aforesaid land by sale-deed in favour of the second party without any
 objection. If for any reason the first party does not execute a sale deed in
favour of the second party, after five years but within ten years from the date
 of sale deed dated 4.2. 7I, then the second party will.have a right to deposit   G
 the entire consideration Rs. 4900 in the Civil Court and get the sale deed
 executed by the Court, the first party will have no objection. The present
 agreement will be binding upon the parties and the heirs of the parties.
Therefore, these few comments by way of agreement ofreconveyance of sale
within ten years are being written so that this document may be used when
necessary. After the limitat.ion often years the second party will have no right H
    788                     SUPREME COURT REPORTS [2003) SUPP. 5 S.C.R.

A at all to get released the aforesaid and from party No. I."
                                          [Underlining by court to add emphasis]

         Under the above terms of the agreement of repurchase defendant Nos.
   2 to 4 sold their rights to obtain reconveyance of sale in favour of plaintiff
B .(present appellant) by executing a document dated 02.6.1977, on payment of
   a sum of Rs. 19,000. The said document is also registered and its execution
   is not in dispute.

         The court of Munsif Magistrate, Kairana, Distt. Muzafarnagar dismissed
  the suit by holding that defendant Nos. 2 to 4 having &!ready transferred their
C rights in the property in favour of defendant No.I, had no right left in the
  property to transfer the same in favour of the plaintiff. In the opinion of the
  trial court the document dated 2.6.1977 executed in favour of the plaintiff does
  not amount to transfer of right of repurchase in favour of the plaintiff but it
  was a transfer of interest in the property involved which was invalid as the
D defendant nos. 2 to 4 had already transferred their interest and title in the land
  to defendant no. I.

          At this stage, it may be mentioned that we have looked into the terms
    of the document dated 2.6.1977 and we find a clear stipulation therein to
    indicate that whatever right of repurchase that existed in favour of defendant
E   Nos 2 to 4 has been transferred by them in favour of defendant No. I. The
    reasoning of the trial court, therefore, is that right of repurchase has not been
    assigned or transferred in the document dated 2.6.1977 is prima facie erroneous
    and has not been supported by any of the parties before us in this appeal.

         The first appellate court upheld dismissal of the suit by the trial court
F not only on the ground that no right of repurchase had been transferred in
  favour of the plaintiff but also on additional ground that the right of repurchase,
  if any, available to defendants 2 to 4 was a right personal to them and was
  not assignable or transferable. The High Court by the impugned judgment
  passed in Second Appeal re-examined the terms of the document in question
G dated 4.2.1971 (Ex. 4) to arrive at a conclusion that the right of repurchase was
  available personally to the contracting parties defendant nos. 2 to 4 and to
  their heirs. It held that as under the terms of the said document there is no
  clear stipulation permitting respondents 2 to 4 to transfer the right of purchase
  to anybody else, the said right was not assignable. The relevant finding of
  the High Court reads thus:
H
       SHYAMSINGHv. DARYAOSINGH(DEAD)BYLRS. [DHARMAOHIKARI,J.]               789

        "It is true that there is no negative clause that the said right of           A
        repurchase cannot be transferred to a stranger but the deed dated
        4.2.1971 (Ex.4) is specific that it is binding upon the parties and their
        heirs. The said clause does not permit respondents 2 to 4 to transfer
        the right of repurchase to anybody else including the appellant."

      We have heard the learned counsel appearing on either side and looked           B
carefully and minutely into the terms of the disputed document comparing it
with the vernacular copy. We have extracted above the relevant recitals of the
said document. As has been noted by the High Court and the courts below,
it contains no express prohibition on transfer or assignment of right by the
original contracting parties to third party. The only question is whether such        C
prohibition against assignment or transfer can be read into the document by
implication.

      In our considered opinion, reading the document as a whole and
particularly keeping in view the fact that a long period of ten years was fixed
for obtaining reconveyance, no implied prohibition of transfer or assignment D
can be inferred in the document particularly in view of-the clear provisions
of Section l S(b) of the Specific Relief Act 1963 which read as under:

       "15. Who may obtain specific performance - Except as otherwise
       provided by this Chapter, the specific performance of a contract may
       be obtained by-                                                      E
       (a) any party thereto;

       (b) the representative in interest or the principal, of any party thereto; ·

       Provided that where the learning, skill, solvency or any personal
       quality of such party is a material ingredient in the contract, or where F
       the contract provides that his interest shall not be assigned, his
       representative in interest or his principal shall not be entitled to
       specific performance of the contract, unless such party has already
       performed his part of the contract, or the performance thereof by his .
       representative in interest, or his principal, has been accepted by the G
       other party."

                                                             [Emphasis added]

      As is to be seen from the provisions of Section 15(b) of the Specific
Relief Act, 1963, specific performance of the contract may be obtained by 'any H
    790                     SUPREME COURT REPORTS [2003] SUPP. 5 S.C.R.

A party thereto' or 'their representative in interest'. This expression clearly
    includes the transferees and as~ignees from the contracting party in whose
    favour the right exists. Such right of seeking specific performance would,
    however, be not available in terms of proviso below clause (b) where "the
    contract provides that the 'interest shall not be assigned'.

B       Clearly in this case under the terms of the document dated 4.2.1971 Ex.4,
  there is no express prohibition against assignment or transfer of the right of
  repurchase by the original party in favour of the third party. Learned counsel
  appearing for the contesting respondent (defendant No.I) very strenuously
  urged that in the recitals of the document at the appropriate place there is
C mention ofthe parties and their heirs but there is no mention of the transferees
  or assignees of the contracting parties. This omission is a clear indication of
  implied prohibition against transfer or assignment of any right by the original
  contracting party.

          We find it difficult to accept this proposition. True, it is that there is
D no clear stipulation permitting assignment or transfer of right of the purchaser
  · by original party in favour of the third party but both contracting parties
    would be presumed to have been alive to the legal provisions contained in
    Section 15(b) of the Specific Relief Act. The two documents- one of sale and
    the other of repurchase - were executed on the same day. As the sale and
    agreement of repurchase are contained in two separate documents, although
E contemporaneously executed, the transaction cannot treated to be a 'mortgage'
    as defined in Section 58(c) read with proviso thereunder of the Transfer of
    Property Act but it seems to be a transaction akin to a 'mortgage' if not
    'mortgage proper'. From the tenor and contents of the two documents
    contemporaneously executed, it seems that the defendant nos. 2 to 4 to raise
F money, sold the property but with a right of repurchase on return of the
    money. A long period of ten years for obtaining re-conveyance was agreed
    between the original contracting parties to indicate the nature of transaction
    to be one to satisfy the monetary need of the transferer. Initial period of five
   ·years was stipulated for obtaining re-conveyance mutually, falling which after
    expiry of the period of five years, re-conveyance could be obtained through
G court within an outer limit of ten years from the original date of the execution
    of the document. It seems unjust to construe the terms of the document to
    mean that though the original transferers of the property are unable to raise
    requisite money w.ithin the initial period of five years and thereafter continue
    to be incapable financially to approach court for seeking re-conveyance, they
H would have lio right to assign or transfer their right on value to others. This
       SHYAM SINGH v. DARYAO SINGH (DEAD) BY LRS. [DHARMADHIKARI, J.]      79 J

would result in deprivation of the property or competitive value altogether to    A
the original owners.

      In our considered opinion, in the absence of any words or expressions
in the documents indicating prohibition on assignment or transfer of right of
repurchase and in the face of clear provisions of Section I5(b) of the Specific
Relief Act, 1963, an implied prohibition cannot be read into the terms of the B
documents. Merely because in the documents, there is mention of 'heirs' of
the contracting parties but not their 'assignees' or 'transferees', the legal
right of assignment available to the benefit of original contracting party under
Section I5(b) of the Act cannot be denied to it.

       We are fortified in our view by two direct decisions of this Court C
rendered in somewhat similar circumstances with documents
contemporaneously executed for sale and repurchase with comparable
stipulations. See T.M Balakrishna Mudaliar v. M Satyanarayana Rao and
Ors., [1993] 2 SCC 740 and Habiba Khatoon v. Ubaidul Huq, [1997] 7 SCC
~                                                                                 D
       In the case of Habiba Khatoon (supra), taking stock of earlier decisions
of this Court, the Privy Council and the High Court of Bombay, the law on
the present contested issue was explained to uphold the right of repurchase
of the original contracting party thus:-
                                                                                  E
         "We may in this connection also usefully refer to a decision of this
         Court in the case of T.M Balakrishna Mudaliar v. M Satyanarayana
         Rao and Ors. Considering the provisions of section 15(b) of the
         Specific Relief Act, 1963, a Bench of two learned Judges of this Court
         speaking through Kasliwal, J., endorsed (in para 10 of the SCC) the
         statement of law flowing from the decision of Sakalaguna Nayadu as       F
       , well as the decision of Beaumont, C.J., speaking for the Bombay High
         Court in the case of Vishweshwar Narsabhatta Gaddada v. Durgappa
         Jrappa Bhat/car. The statement of law which got imprimatur of'this
         Court in para 9 of the Report runs as follows : (SCC p.745).
             The Privy Council in Sakalaguna Nayudu v. Chinna G
             Munnuswami Nayakar has held that the benefit of a contract of
             repurchase which did not show that it was intended only for the
             benefit of the parties contracting, could be assigned and such
             contract is enforceable. Beaumont, C.J. in Vishweshwar
             Narsabhatta Gaddada v. Durgappa Jrappa Bhat/car held that H
     792                     SUPREME COURT REPORTS (2003] SUPP. 5 S.C.R.

A                  both under the common law as well as under Section 23(b) of
                   the Specific Relief Act, 1877, an option given to repurchase the ·
                   property sold would prima facie be assignable, though it might
                   also be so worded as to show that it was to be personal to the
                   grantee and not assignable. On the particular facts of that case,
                   it was held that the contract was assignable. In Sinnakaruppa
B                  Gounder v. M Karuppuswami Gounder it was held (AIR p.508,
                   para 5)
                   'In our view, generally speaking, the benefits of a contract of
                   repurchase must be assignable, unless the terms of the contract
                   are such as to show that the right of repurchase is personal to
c                  the vendol':7 In the latter case it will be for the person who pleads
                   that the contract is not enforceable, to show that the intention
                   of the parties thereto was that it was to be enforced only by the
                   persons named therein and not by the assignee.' "

           From the statement of law as has been approved and followed by this
D Court in two the decisions in Habiba Khatoon and TM Balakrishna Mudaliar
    . (supra) unless the contents of the document in question and evidence in
      relation thereto are so clear to infer a prohibition against assignment or
      transfer, the right of repurchase has to be held to be assignable or transferable
      and cannot be treated as personal to the contracting parties.
E
           On a very unsubstantial ground that the document in question makes
     a mention only of 'parties' and their 'heirs' and not 'assignees' or 'transferees',
     it cannot be held that the right of repurchase was not assignable. In our
     considered opinion, therefore, the courts below were in error in construing the
     document in question in a manner to infer an implied prohibition against
F    assignment and transfer.

        In this appeal, the respondent filed an application (not numbered) dated
  25.8.2001 seeking permission to raise additional grounds and file additional •
  documents. In the additional grounds, it is urged on behalf of the contesting
  respondent that suit land recorded as Holding No. 306 area 0.8693 hectares,
G as a result of consolidation proceedings under the provisions of UP
  Consolidation of Holdings Act, 1953 [hereinafter referred to as 'the Act of
  1953'] has been converted into a new holding called 'Chuk' comprising
  several other plots with area 0.7724 hectares. Learned counsel appearing for
  the respondent in support of the additional grounds argues that the property
H agreed to be sold as a result of consolidation proceedings having lost its
        SHYAM SINGH v. DARYAOSINGH(DEAD) BY LRS. [DHARMADHIKARI, J.]          793
 identity, the suit for specific performance of contract for the original Holding    A
 No. 306, has been rendered infructuous. Heavy reliance is placed on the
 decision of this Court in the case of Piarey Lal v. Hori Lal, [1977] 2 SCR 915.

         On the other side, learned counsel appearing for the appellant seriously
  disputed the fact that as a result of consolidation proceedings, identity of the
  suit land had been lost and specific performance of agreement of sale cannot       B
  be granted. It is contended that as a result of consolidation proceedings,
  'there is merely substitution of one property for the other' and the suit for
  specific performance cannot be said to have been rendered incompetent or
  infructuous. Reliance is placed on the decision of this Court reported in
.·Rajeshwar v. Board of Revenue, (1995) Allahabad Law Journal 144.
                           •                                                         c
       The additional grounds urged in this appeal as a result of subsequent
 legal developments of consolidation of holdings under the Act of 1953 raise
 issues both of fact and law. We consider it just and proper to remand the case
 to the trial court for deciding these additional issues arising on facts and law.
                                                                                     D
       As a result ofdiscussion aforesaid, this appeal partly succeeds and is
 allowed. The concurrent findings of the courts below that the right of .
 repurchase under the agreement was personal to the original contracting
 party and their heirs, are hereby set aside. It is held that the plaintiff as
 'assignee' or 'transferee' from the original contracting party is entitled to .seek
 specific performance of the contract from contesting respondent no. 1. ·            E
      The case is remanded to the trial court for deciding the limited issues
arising between the parties on facts and law on the applicability and effect
of the provisions of the Act of 1953,

      The trial court shall grant opportunity to the parties to amend their F
pleadings. It shall then frame issues on those amended pleadings and after
granting them opportunity to lead evidence decide the suit in accordance with
law. The suit was filed in the year 1981. The trial court shall make every
endeavour to complete the trial on the additional issues and decide the suit
as expeditiously as possible. To facilitate early disposal of the suit, the parties
                                                                                    G.
are directed to appear before the trial court on 15th December, 2003. In the
circumstances, we make no order as to costs in this appeal.

B.S.                                                            Appeal allowed.

                                                                                     H