1916 (2) TMI 1 - HC - Indian Laws

Summary

Issues Involved:
1. Consideration for the Karar.
2. Assignability of the option under the Karar.
3. Enforceability of the contract against the original covenantor.
4. Transmission of interest under Hindu Law.
5. Validity of the mortgage by Ithukutty.

Detailed Analysis:

1. Consideration for the Karar:
The appellants contended that there was no consideration for the Karar giving the option of repurchase to Thekkedath Nair, arguing that even if the objections to the court sale were valid, Ananthanarayana Iyer could have conducted another sale without irregularities. The court found this argument unconvincing, stating that the compromise was supported by ample consideration, namely, the withdrawal of Thekkedath Nair's objections to the sale. The court emphasized that Ananthanarayana Iyer entered into the Karar as the manager of his family, and since the compromise preserved the family's rights in the properties, it was binding on the family.

2. Assignability of the Option under the Karar:
The appellant argued that the option under the Karar was not capable of being assigned in law. The court examined the Transfer of Property Act and concluded that an executory contract for the conveyance of land is not a mere right to sue and can be assigned. The court referred to Section 23(b) of the Specific Relief Act, which allows specific performance of a contract to be obtained by the representative-in-interest or the principal of any party thereto. The court held that the assignee could enforce the rights given by the Karar of 1901.

3. Enforceability of the Contract Against the Original Covenantor:
The court dismissed the contention that the contract could only be enforced against the original covenantor, citing Section 27(b) of the Specific Relief Act, which allows specific performance of a contract against any person claiming under a party thereto by a title arising subsequently to the contract. The court found no reason to distinguish the liability of a Hindu co-parcener regarding executory contracts from executed contracts, provided the contract was shown to be beneficial or necessary.

4. Transmission of Interest under Hindu Law:
The court addressed the contention that by Hindu Law, there was no transmission of interest from Ananthanarayana Iyer to the 1st defendant. The court found no authority supporting the proposition that an executory contract entered into by one co-parcener cannot be enforced against the survivors. The court emphasized that if the contract was beneficial or necessary, it could be enforced against the surviving co-parceners.

5. Validity of the Mortgage by Ithukutty:
The court examined the position of the plaintiff in Second Appeal No. 843, where Thekkedath Nair assigned his interest to his sister Ithukutty, who then hypothecated the interest to the plaintiff. The court determined that a mere right to specific performance cannot be the subject of a mortgage, as it does not create any interest in the property. The court concluded that the Karar did not convey any present right in the property to Thekkedath Nair, and thus Ithukutty did not acquire anything she could validly hypothecate to the plaintiff. Consequently, the plaintiff could not maintain the suit.

Separate Judgment by Seshagiri Aiyar, J.:
Seshagiri Aiyar, J., agreed with the judgment and addressed the question of Hindu Law. He found no justification for the proposition that the liability of a Hindu co-parcener regarding executory contracts differs from executed contracts. He emphasized that the enforceability of a contract must be traced back to the date of the agreement and found no support for the contention that the binding nature of executory contracts should be determined at the time of completion. He also dismissed the objection that the defendant was sued as if he were the owner and not as the manager, stating that the courts below proceeded on the footing that the suit was against the manager.

In conclusion, the court dismissed the second appeals with costs, upholding the enforceability of the Karar and the rights of the assignees while rejecting the validity of the mortgage by Ithukutty.