2002 (11) TMI 769 - HC - Indian Laws

Summary

Issues Involved:
1. Enforceability of agreements for the sale of land, building, and machinery.
2. Determination of property as Joint Hindu Family property.
3. Specific performance of part of the contract under Section 12 of the Specific Relief Act.
4. Classification of machinery as immovable or movable property.
5. Competence of a partner to sell his share in the partnership firm.

Detailed Analysis:

1. Enforceability of Agreements for Sale:
The plaintiff filed a suit for specific performance of two agreements for the sale of land, building, and machinery. The agreements were dismissed by the lower courts on the ground that they were not enforceable, but the plaintiff was entitled to a refund of the earnest money. The defendant denied the execution of the agreements and receipt of earnest money, claiming the property was Joint Hindu Family property and thus not alienable by an individual coparcener.

2. Determination of Property as Joint Hindu Family Property:
The court examined whether the land and machinery were Joint Hindu Family property. It was established that 11 marlas of land were purchased by the father and the remaining 29.2/3 marlas were purchased by the four brothers from their income. The court found no evidence that the latter was purchased from the income of the Joint Hindu Family property. Consequently, it was held that only the 11 marlas and the building thereon were Joint Hindu Family property, while the 29.2/3 marlas were self-acquired by the brothers.

3. Specific Performance of Part of the Contract:
The court analyzed whether part of the agreement could be specifically enforced under Section 12 of the Specific Relief Act. It was held that the part of the contract regarding 29.2/3 marlas of land could be specifically enforced as it was separable from the 11 marlas of Joint Hindu Family property. The plaintiff was willing to relinquish his claim to the 11 marlas, thus allowing specific performance for the 29.2/3 marlas.

4. Classification of Machinery as Immovable or Movable Property:
The court addressed whether the machinery in the ice factory was immovable property. It concluded that the machinery, being attached to the earth, qualified as immovable property under Section 2(6) of the Registration Act, 1908. The lower courts had erroneously classified it as movable property. Consequently, the agreement for the sale of 1/8 share in the machinery could be specifically enforced.

5. Competence of a Partner to Sell His Share in the Partnership Firm:
The court examined whether a partner could sell his share in the partnership firm. It was found that the defendant, having retired from the partnership, could legally sell his share to the plaintiff. The lower courts had incorrectly relied on a Supreme Court decision, which was not applicable as it pertained to the registration of partnership firms.

Conclusion:
The appeal was partly allowed. The court decreed specific performance of the agreement regarding the 1/4 share of the land measuring 29.2/3 marlas on payment of the remaining sale consideration. The suit for the specific performance of the agreement for the 1/8 share in the machinery was also decreed. The portion of the agreement concerning the 11 marlas of Joint Hindu Family property was dismissed. The plaintiff was directed to deposit the remaining sale consideration within three months, failing which the decree could be executed through the court.