HUNGERFORD

INVESTMENT

TRUST

LIMITED (IN

VOLUNTARY LIQUIDATION)

'V.

HARIDAS MUNDHRA & OTHERS

March 9, 1972

[K. S. HEGDE AND K. K. MATHEW, JJ.]

Specific Relief Act (1 of 1877) repealed by Specific Relief Act (47 of 1963)-.A.pplication jor rescission of convact and decree in 1967 .wuier s. 35 of 1877 Act-When dight to rescission can be said to have

uccrued under s. 6 of General Clauses Act, 1897.

Specific Relief Act (4~ of 1963) s. 28-Scope of.

Power of Court tip order rescission under the law relating to specific relief-No time fixed in decree for specific performance -Effect of- ·Order of ,-escision by Court-Nature of.

Decree for specific performance-If could be executed. by defendant as mone, v decree.

The appellant was the owner of 100% shares in Company 'A' By an agreement iiated October 30, 1956, between the appellant and the respondent, the respondent purchased 49% of the shares with an option to purchase the balance of 51 % shares. The respon- . dent exercised his option but as the shares welre not transferred to him he filed a suit. The suit was decreed and the decree for specific performance provided that the 51 % shares should be delivered to the respondent against payJrent by him o the appellant of their value; and an injunction was '!llso granted restraining the appellant from voting except in acicordance with the instructions of the respondent.

Except as regards the injunction, the trail court, however, stayed execution of the . decree and

the stay was continued by the appellate court till the appeal was dismis sed in 1965.

The appellant filed an appfioation in 1965 praying that the respon- dent may be directed to pay the consideration amount. within such time as the Court may direct, but the application was, dismissed.

Meanwhile, there were certain orders of atta<; bment of the decree, who3e effeclt was that the respondent was prohibited and restrained from alienating, transferring or charging his right, title and interest in the decree or from obtaining satisfactio~ thereof. Further, in February 1965, a ·pany 'B' .which had Obtained a decree against a holding company of the appellant, '3pplied for execution and got the 51 % shares of the . appellant attached. The executing court ordered that those shares should

oo produced for delivery to the respondent against payment of the nsi deration mentioned in the specific perfonnance dectete.

The 'A' Company also instituted a ,.suit against the '3ppellant in respect .of payment made by 'A' -to the Income-tax authorities on behalf of the ; appellant and prayed for possession and sale of the 51% shares in the

HUNGERFORD INVESTMENT v. H. MUNDHRA (Mathtw, J.) 691

exercise of their lien on those shares.

A rec.eiwr woas appointed in res pect of those shares oand the Court directed that the Receiver wOuld be at liberty deliver the 51% shares to the respondent on payment of the consideration. This orO::r was communicated by the appellant to the respondent on January, 11, 1967, and even before that date the appel~ lant wrote two letters.·to the respondent ':lsking him to be ready with the amount to be paid by him and to take delivery of the shares. Those letters were refused by the respondent and inrcply to the letter 'dated, January 11, 1967, the respondent raised the o~'j, ection that the appellant was not in a position to give de.livery of the shares and tt the order of tm Court as not binding on him because he was not a party to the suit in which, tha~ order was pa~Sted. By a letter dated February 11, 1967, addressed tO the respondent, the appellant sbted that the respondent had forfeired his right to purc:hase the 51 % shares umier the specific perfonnance decree as he had failed to fulfil his obligation in pursuance of the notice of the appellant dated January 11, 1967. Thereafter, in

M&eh 1967, the appellant filed an application for rescission of the agreement of sale of 1956 as also the decree for specific performance of the agreement.

- The trial court held that the respondent was not keen on paying the purchase money and get the transfer of 51 % shares for the reason that the injunction granted by the Court restraining the appelhnt from voting except under the instructions of the respondent made the rpondent virtually the owner of tic 100% shares in 'A' company, with full control, that therefolre, the respondent had committed breach of the contract which be was directed spedfically to perform, that he creared a situation which

bad made it impossible f<* him to perform hi'S part of the obligation, and hence the decree for specific rformance must_ be rescinded. The trail court appointed the Receivet in the suit by the 'A' company against

the appellant as Receiver of tic 51% shar~ and directed the respondent to pay the consideration money to the Receiver within a fortnight from the date of the order and directed the River to hand over the shares

to the respondent; and that, in default of such payment within the time specified the. contract and the decree would stand rescinO::d, and that the appellant would be absolved from all obligations thereunder.

The appellate court however held that the application filed by the appellant for the rescission of the contract and dec~:ee was not maintain- Gble under the Specific Relief Act of 1877 dr of 1963. '

Allowing the apal to this Court,

HELD : ( 1) The Specific Relief Act, 1877 was repealed .bY the Specific Relief Act of 1963 and the appellant had no accrued ngbt on the .date of the repeal to file the application under s. 35 of the 1877- Act read with s. 6 of the General Clauses Act, 1897. [7000-HI

The right to rescind the decree under s. 35 can arise only if the purchaser makes default in paying the purchase money ordered to be paid under the decree. Buf before the lapse of reasonable time from the date of the decree the appellanJ could have no right to . have the decree rescinded on the ground of default. Such a default had not occurred when the Specifi~ Relief Act, 1877, was repealed as a reasonable time for the performance of the obligation undei' the decree had not elapsed from the date of the decree. Tb, ere was no default till 1965 in the present . cue. all the execution of the decree was stayed by orders of the trial court and the appellate court. [7001).0].

SUPREME COURT REPORTS

(1972) 3 S.C.R..

2 Since. s. 28 of the SP'cific Relief Act, 196~. provides only for ( ) Jication fc:ir rescission of a decree fr specific peronnance for A !:le ".lf lease of immovable property no apphcauon to rescmd decree for specific performance of an agreement to sell movables would lie under that sec1ion. f70lABl ·

(3) But the Specific Relief A~, 196~, is not an exaustive enactment, and under the Jaw rebting to spec1fic rehef a Court wh11:lh Pll3o.s a deere-: for specific performance retains control ever the dccrre even after the a decree had been passed. Ther.efoc:, th! Court, in th~ present case, re tained control over the matter desp1te the decree and 1.t was open to the Court, wheiT it was alleged that. the party oved ag:u':lst .had positively refused to complc~ the contract, to entertam the npphcat10n and order rescission of the decree if the allegation was p'roved. f701B-C; 703~-cj

Ramdas Khatau & Co. v. Atlas Mills Co. Ltd., A.l.R. 1931 Bombay lSI; Rahmath Unnissa Begum v. Shimoga Co-operative Bank Ltd., A.l.R.

C 19S1 Mysore 59; Firm Kishore Cl1and shivo Charan Lal v. Bruk.un Ekctric Supply Co., A.I.R •. 1944 All. 66, 77; Moho=daii Sahibv, Abdul Klu:dir Saheb, (1930) 59 M.L.J. 351; Pearisundari Dasset v.

Hari Charan Mazumdar Chowdhry, I.L.R. 15 Cal. 211; Some, rhwar Dyal

v. Widow of !Alman shah, A.I.R. 1958 All. 488, Anandi/al poddar v . . Gunndra, A.I.R. 196() Cal. 107 ana Tribeni Tewary v. Naina, A.I.R. 1959 Pntna 460, referred to, D

( 4) lbe responckmt had, by his conduct and Jetter evinced an intention a01 10 perform his part of i_hc contract.

Therefo~. the fact that no time had been fixed in the decree would not preclude the Court from adjudgi_ng the contract as rescinded.

P05E..Jil ·

(a) If a contract does oot specify time for performan<le hw will llllJ>IY !JDder s. 46 of the Contract Act that th.e parties intended that the ligataon under the coorract should be performed within a reasonable tlllle dc:Jiendmg on the circumstances of t~ case. The trect between

the part~:s was not extinguished by the P'JSSing o! the speciilc perf~ :ance dree and u the cOOiract au.isted despito the ree, and as the

cree did DO! abrogate or modify any of the e-xpress or Jmp/Jd terms of

contract !1 must oo presumed tha~ tho parties tO tho contract were under the obhvuoo to complete it within a. l'elL\OW\ble time. po3B-Hl ,

sb:sr~~) respondent. by exercising his option to purcha.5e the 519f; appellant C:::e. entllled 10 obtuin a conveyance of the sha.res from c in the agree~ment of the pun:llrue money. There wa.s no provi.stOD shares • . TI!e!"efore ••.tto when thcreu.ftr the appcUant ahoult.l con~Y t!J~ br lntimatina the' 'he wu open 1() e1ther party to make time -~tt expreuing Ita or hl: r larty, after -a rea&Onliblo riod, about lt. aft" &ation Under the ~~

1~ and willingnesa. to perform its or his ot>U• _. had n Pllid for 1 l i liberty wa.s not tllteo away bcca~ a doe~ '1:10 the tune tor 'Ita """f~ pee ftc .Ret rformance ot the contract without ft.'ttOi r• v.mance. ?03H; 704A-c] ObJrrvatioru in p Hai.sburyt Lawr of E7t 'f:::zaSpeci[ic .P_rrforrtUUIC• edn, p. 546 , t.rui

(• g 3rd ed1t1on vol. 36, JS 1 to 3S2,. expljU!~ J) AJ the lrxejy ,_. &II order of the ·~ t_!tc .n,.~ io h~ ssion and U • l:llll!nl of the Putc~::~;:~ him. ~<? del.i~ a of tbt that the~~~ to the rc.pon.Jey, .~~uon regardioa-whK:h wu_. ~

pe &Jlt was not in 'l . "'"'"a 11 no 11Ub6ta, n~ i.Q- obi~® ' posiiiGn to dc.livet. tlte sh.acee •.. f11>56-G 1

HUNGERFORD INVESTMENT v. H. MUNDimA (Mathew, ],) 693

. . ( 6) WOOn the Co~ adjudges rescission of a . contraQt or a decree •t 1s . onl.Y con <; em~ With the question whether the person rescinding it was JUStified 1!! dmg so .. In . the present case when the awellant came t? !Jle Court With 1ts applloahOn for rescission there was already a res.

CISS!On of the contract and the decree by its letter dated February 11 ~967. .It ?nlY ante~ a declaration by adjudgment by the Court that 1t was )stifi~ tn domg so. The, Court did not create any right which the parttes d1d not p<>ssess when 1t made a declaration that the oontract had been validly rescinded. Merely because it is necessary for the Court to pass such an order it does not follow that it is the Court that rescinds the oontract. It is only deciding upon too validity of the rescission al ready made by the party. f706AEl

Thereore, the respondent could not compbin that, because the appelv lant obtam a stay of the order passed by the trial court giving the respondent fortnight's _time to pay the purchase money the appellant prevented htm from paying the purchase money, and resist the pmyer for rescission. f706A-B]

Abram Steamship company Ltd. v. Westville Shipping Company Ltd.

L.R. L1923] A.C. 781, referred to.

(7) There is no substance in the clonntion of the respondent that the appellant was not in a position to give a good title to the shares be-- cause 'A' company claimed a lien in respect of the shares. f707C-Dl

(8) It could not be contended that the remedy of the 'appellant was to execute the decree. for specific performance as a decree for money.

f709B-C)

A decree for specific performance is a in. favour of both the plaintiff and defendant in the suit, but it could be executed only in the manner prescribed by 0.31, r. 3.2, C.P.C. The appellant could not have iCXecuted the decree against the respondent as a money decree '!llld realised

the purdtase money from him. Therefore, if the respondent refused to pay the purchase money there was nothing which prevented the appel lant from applying for rescisSionof the de. f707FrH; 708G-H; 709CT

Heramba Chandra Maitra v. J; votish Chrmdra SinhtJ, A.I.R. _1932 CaL 579 and Bai Karimabibi v.

A.bderahman Sayad Banu,

A.I.R. 1923 Bom. 26, 1eferred to.

(9) The only question with which. the Court was cocernc:d was. whether the respondent had disabled himself from perfonmng his part o' the obligation under the decree. The fact that attachments of ~

decree by creditors prevented him from performing his part of the obli .. gation under the decree or obtain satisfaction thereof W?uld not makd him any the less a defaulte~ so far as performance of his part of thet obligation under the decree ts concerned. f709E.Gl

(10) There is no substance in the contention that the attachment by B.company of the S 1% shares made it impossible for the appellant to deliver the shares to the repondent as the atacbment ord" dl.l'~ that the 51% shares should be produced for delivery to th7 respondent

against payment of the consideration mentioned in the specific perform~ ance decree. f7090Hl CML APPELLATE JUR.ISDICTION: Civil Appeal No. 488 of 1971. 16-JOJ 1 Sup.CI/72

SUPR'EME COURT REPORTS

[1972] 3 S.C.I..

Appeal from the judgment and decree dated September 14, A 1970 of the Calcutta High Court-in Appeal No. 148 of 1969.

S. V. Gupte, S. B. Mukherjee, B. N. Garg, K. K. Jain, D. N. Sinha, Lina Seth, M. M. N. Pombra and H. K. Puri, for the appellant.

R. C. Dev, Somnath Chatterjee, M. Bose, S. Swarup and 8

P. C. Bhartari, for respondent No. 1.

A. K. Sen, Shanker Ghosh, D. N. Gupta, .N. Khait(ln, Krishna Sen and B. P. Singh, for respondent No. 4.

S. S. Khanduja, Promod Swarup and La/{~ Kohli, for responc dents Nos. 7 and 8. ·

Gobind Das and B. D. Sharma, for respondent No. 1.

The Judgment of the Court was delivered by

w, J. This is an appeal with certificate from a judgment D of a Division Bench of the Calcutta High Court, setting aside the order of a single judge of the Court allowing an application filed by the appellant for rescission of an agreement for sale dated October 30, 1956, as also the decree dated February 25, 1964, for specific perfonnance of the agreement and for other alternative reliefs s~ified in the application.

Hungerford Investment Trust Limited, (in voluntary liquidation) hereinafter called 'Hungerford' was the owner of 100 pet cent shares in Turner Morrison & Co., hereinafter called 'Turner

Morrison'.

John Geoffrey Turner and Nigel Frederic Turner, both since deceased, were the owners of the 100 per ce.Qt shares of Hunerford .

The entire share capital of Turner Morrison F consis!OO of 4,500 fully paid' up ordinary shares of Rs. 1,000/- each.

By exchange of letters it was agreed that Haridas Mundhra, bereinafter called 'Mundhra' would purchase from Hungerford, 49 per cem: shares of Turner Morrison. The agreement also provided for an option to Mundhra to purchase from Hungerford, G the balance of 51 per cent shares of Turner Morrison within 5 years. A fo.I'.Qlal agreement dated October 30, 1956, was xe cutcd between Hungerford, John Geoffrey Turner- - and Nigel Frederic Turner on the one hand, and British India Corporation

and Haridas Mundhra on the other, embodying the terms of the agreement. .Pursuant to this agreement, 49 per cent of the shares H in Turner Morrison was sold and transferred to Mundhra and his nominee British India Corporation. Thereafter, Mundhra , exercised his option to purchase the 51 per cent shares. But the

HUNGERFORD INVESTMENT v. 1L MUNDHRA (Mathew, /.) 695

A shares were not sold or transferred to him. So, on April 19,

1961. Mundhra filed a suit againSt Hungerford, 'tun)er Mow.son .and others for specific perforinance of. the agreement to sell the 51 per cent shares (Suit No. 600 of 1961). As Mundhra did not want to proceed aainst Turner Morrison, the suiot was dismissed as ainst that company and a decree was passed on Feb- B ruary 25, 1964. The decree provided that the agreement relatinst to the sale of 51 per cent ordinary shares of Turner Morrison

out to be soecifically performed and directed HWlgerford to deliver to undhra, the 51 per cent shares against payment of the considerati6n of Rs. 86,60,000/-. An injunction was also

anted restraining Hungerford and the other deJendants in the C suit from voting except in accordance with theinstruction of Mundhra and restraining Hungerford from selling the shares to any person other than Mundhra. The decree, except as regards 1he iniunction, was stayed by the trial iudge, on the application of the appellant, for 3 weeks.

Hungerford, along with some ather defendants, filed an D appeal from the decree on March 18, 1964 (Appeal No. 69 of

1964) and obtained stay of execution of the decree except in so far as it related to' the , injunction, until the disposal of , fue appeal. The appeal was dismissed on August 26, 1964, for the reason that it was withdrawn. by the appellcmt, leaving Mundhra

fr~ to perform his part of the obligation under the decree.

:E By a Master's summons dated August 30, 1965, Hungerford made an application praying that Mundhra may be directed to implement the decree by paying Rs. 86,60,000/, tbe un-paid purchase money, within such time as the Court may direct, that Hungerford b~ directed to execute proper transfer deeds in respect of llhe 51 per cent shares within such time as the Court may F direct; and- :that in default of payment of Rs. 86,60,000/- by Mundhra within the period to be fixed, the Court may order the rescission of the agreement and the decree.

The application was dismissed on September 28, 19.65, by Justice R, ay, holding that the application was one for execution of the decree in Suit No. 600 of 1961 and must be in a tabular form and "that any imposition of time limit would be to engraft something on the G decree which does not exist in the decree'.

Hunrford preferred an appeal against the said order (Appeal No. 286 of 1965).

The appe.al as dismissed on August 8, 1966. The application of Hungerford for leave to appeal to this Court was also dismissed on November 25, 1968. ·

H Before the dismissal of appeal No~ 69 of.1964 filed against the decree for specific perform~~ ih suit No. 600. of 1961, the Certificate Officer, 24 Parganas had attached that decree; as Mundhra failed to satisfy six certificates then pending against him.

' SUPREME COURT REPORTS

[1972] 3 .S.C.R:.

In pursuance o a Memorandum issued by the Certificate Officer.

Ray, J. made an order dated March 2, 1964, staying the execution of the decree until cancellation of the notice by the Certificate Officer or until the Certificate Officer or the debtor applied for execution of the decree. The decree in suit No. 600 of 1961 was also attached in execution of three other decrees, namely the decree obtained by Champaran Sugar Co. Ltd. and B British India Corporation Ltd. in sllirt No. 179 of 1960 of tho Court of. Civil Judge, Kanpur and those obtained by Kanpur Sugar Work! lAd. and Britisp India Corporation Ltd. in suit No. 178 of 1960 in the Court of Second Civil Judge, Kanpur and the Life Insurance Corporation of India in special appeal No. 299 of 1961 of the High Court of Allahabad. The effect of c these orders of attachment was that the decree-holder Mundhra was prohibited and restrained from alienating, transferring or charging his right, title and interest in the decree in suit No. 600 of 1961 or from obtaining satisfaction thereof.

In February, 1965, Bank Hoffman A.G. obtained a decree D from Queen's Bench Division, London, for £657,345-17-9d. with interest at 4! per cent per annum from the date of decree

against Romanigo Holdings S.A.H., a holding company of Hungerford and also against Hungerford. Bank Hoffman executed the decree in the Court of Distri~ Judge, Delhi, and got the 51 per cent shares of Hungerford atached. The District Judge ordered the attachment and directed .. that the 51 per ctnt B shares be produced in the High Court of Calcll'tta for delivery to Mundhra against payment of consideration mentioned in the sj, eCific Perf9!manee decree. ·

Hungerford was in control of Turner Morrison upto February 25, 1964, when the injunction in regard to voting rights was .J granted. 'It had kept scripts of. 707 shares out of 2;295 shares_m the office of Turner Morrison. When Mundhra got. control of Turner Morrison, these scripts went under his control and power.

The Liquidators of Hungerford wrote on December 12, 1964, to Turner Morrison to deliver the scripts of 707 shares to M/s Sanderson and Margo~!, solicitors of Hungerford.· Tho request G fo, r delivery of 707 shares was repeatt:4 by Sanderson an~ Margo a on December 22, 1964. Turner Mornson rote a letter on January 11. 1965 to K. N. Srivllstava,. Income Tax Officer, if the 707 shares' seripts could be delivered to Hungerford and if Income Tax Officer had any objection to such delivery. On January 13,

1965, Turner Morrison's solicitors wrote to Mls . . Sanderson -and Morgan that 707 shares had become 1the .property of Mundhra H. and, for the first time, also claimed that thetit was a lietl on the shares. On January 18, 1965, K. N. Srivastava, the Income TU.

HUNGERFORD INVESTMENT v. H. MUNDHRA (Mathew,/,) 691

()fficer, wrote a letter raising objection to the delivery of 707 shares to Hungerford although the Income Tax Department had no claim on lthese shares.

Tutiiler Morrison instituted a suit against Hungerford (Suit No. 2005 of 1965) in' the Calcutta High Comt claiming' Rs. 79,70,802 as principal and Rs. 47,96,250.16 as interest, in respect of payment made by Turner Morrison tto Income Tax authorities on behalf of Hungerford under section 23 (a) of the Indian Inoome Tax Act, 1922. A claim was also made in the suit for possession and sale of 1he 2,295 shares in the exercise of their lien on those shares under Article 22 of rthe Articles of Association of the Company. Mundhra was not a party to the suit. Turner Morrison made an ex-parte application in the suit on July 8, 1966, for appointment of a receiver in respect of the 2,295 shares. Mr. K. B. Bose was appointed receiver and he took possession of 1,588 shares froq1 the First National City Bank and 707 shares from llhe Police. On July 13, 1966, Sen J.

passed an order confirming the order of appointment of the receiver and directing that the receiver will be at liberty to deliver the 51 per cent of shares to Mundhra on payment of Rs. 86,60,000/- in performance of his part of the obligation

l, lDder the decree, if so required by the Court hearing appeal No. 286 of 1965. The order also provided that if Mundhr~ takes the shares on payment of tthe price directed to be paid by the decree, or in direction of the Coun of appeal, the lien if any, as claimed by Turner Morrison will shift on to the money which the receiver would £et from Mundhra.

Turner Morrison preferred an appeal against the order and applied for stay of the order. The stay was refused but the appeal was partly allowed on September 2, 1968, by setting aside the direction given to the receiver to tender the shares to Mundhra as also the direction that the lien of Turner Morrison would shift to.the purchase money to be paid by Mundhra.

On Mat:ch 21, 1967, the application from which the present appeal arises, was made by Hungerford (the appellant here) before the High Court. The prayers in the application were illartistically worded. It was prayed that the agreement dated October 30,

1956, and the deee dated February 25, 1964, passed in suit No. 600 of 1961 be rescinded, that the injunction granted by the decree in the suit be vacated unless Mundhra (the 1st respondent here) deposits Rs. 86,6.0,000/- in the Court or with the receiver

in suit No. 2005 of 1965, that the receiver appointed in suit No. 2005 of 1965 be appoimed as receiver in the suit for speCific performance in respect of the said 2,295 shares, -tharthe receiver be directed to tender, on a day certain. the ilaid ShareS .to

898 SUPREME cOURT REPC)ltTS '

(1972] 3 S.C.R.·

Mundhra, and Mund.hra be direcred to pay the sum of A Rs. 86,60,000/- to the receiver on that day and to declare that if Mundhra failed to pay llhe amount to the receiver on or befor.e the day, the agreement dated October 30, 1956 and the decree dated February 25, 1964, would stand rescinded. This application was allowed by Masood J. ·

The learn¢ judge overruled <the objection of Mundhra that the application was not maintainable and held that it was maintainable under section 35 of the Specific Relief Act, 1877, notwithstandinp; the repeal of that Act by the Specific Relief Act, 1963, as the appellant had an accrued right under the section to make the application even before the repeal.

The learned judge then found that Mundhra was not keen in paying the purchase money and getting transfer of the 51 per cent shares for. the reason that t:e injunction granted by the Court in the decree in suit No. 600 of 1961 restraining the appellent from voting except in accordance with the instruction of Mundhra made him virtually lthe owner of 100 per cent shares D in Turner Morrison, and if without paying any amount for the

51 per cent shares of Turner Morrison, he got control of Turner Morrison, it was to his interest not to pay anything to the appellant.

As regards the objection by Mundhra that since Turner Morrison claimed a lien on the 51 per cent shares and, therefore, the E llant was not in a position to deliver the shares free from encumbrance, he held that there was no bona-fides in the claim of Turner Morrison : firstly because !the lien was not set up by Turner Morrison in its written statement in the suit filed by Mundhra for specific 'Performance, secondly because in the suit filed by l'urner Morrison claiming the lien, Mundhra, who was F interested in rthe shares upon which the lien was claimed, was not made a party and thirdly for the reason that by his letter dated November 29, 1955. Mundhra had agreed that Turner Morrison would pay the income tax liabilities of Hungerford to the extent of Rs. 46 lakhs. The learned 'Judge found it impossible to be lieve that Mundhra had no knowledge about the suit filed by Turner Morrison claiming the lie11 a& he was m complete control G of Turner Morrison at the time the Suit was ana s8id that TurDer MorrisOn and.Mun.dhra were colluding with each other to defeat the apPellant in its attcmi't to get ilhe purchase money from Mundhra and that suit No . .2005 of 1965 was inStituted with the connivan~ of Mundhra. The .carDed 'udge a15o. fourid that even if Turner Morrison l, u\d a lien on th~ share$, sin, ce there was no H covenant. for title," Mundhra wa8. not iustified in declining to tUe dtli:VetY of the . $hares on the score that TUrner. Morrisonliaa a lien u'POri the shares. · ·

HUNGERFORD INVESTMENT v. H. MUNDHRA (Mathew, J.) 699

A The learned judget after evaluating all the circumstances ukimartely came to the conclusion that Mundhra committed breach of the contract which he was directed specifically to perform, that

be created a situation which made it practically impossible for hlm to perform his part of !the obligation under the decree and that the agegtent dated October 30, 1956 and the decree <Wed 8 February 25, 1964, for specific performance must be rescinded.

The learned judge, therefore, appointed the receiver in suit No. 2005 of 1965 as receiver of the 51 per cent shares and directed Mundhra to pay Rs. 86,60,000/- to the receiver within a fortnight from the date of the order and the receiver to hand over the 51 per cent of the shares to Mundhra's solicitors if the amount c was paid as directed. The receiver was also directed to pay the amount to tbe solicitors of Hungerford. The stay order passed by Ray J. on March 2, 1964, was vacated and liberty was given to the Certificate Officer or lthe Tax Recovery Officer, 24 Parganas to take such steps against Mundhra as he thought fit.

In default of -payment of Rs. . 86,60,000/- by Mundhra to the receiver within the time specified, the Court directed that the con- D tract arid th_~ decree would stand rescinded and Hungerford absolved from all obligations under the said contract and the decree. ' Against the decision, the appellant filed appeal No. 148 of 1969 before a Division Bench of the Court and Mundhra .filed a E cross-obiection.

The appellalte Court found that if Mundhra was really interested in getting transfer of the shares by paying the money, he would not have allowed th~ opportunity to acquire the shares under the order dated July 13, 1966, to slip by, that Mundhra knew of the order of July 13, 1966, and also of the opportunity F given to him by the order to get delivery of the shares on payment of the purchase money, but that he did not avail of the opportunity for the reason that, if without ' paying money, he could virtually enjoy the .same advanta~. it would be foolish

from a businessman's point of 'view to invest any amount in purchasing the shares. The Court observed :

"A busines.sman who files a suit for specific performance of a contract to buy shares and prosecutes that suit to a successful termination in his favour, will not fritter away the benefit under the decree except for a higher or superior advantage and that advantage Mundbra got under the decree in suit No. 600 of 1961."

The Court then held that application filed by the appellant for rescission ofthe contract and the decreo was not main .. tainable. The reasoning of the Court was two-fold. The Court

700 SUPR.EMB COUllT ltBPOR.1S

[1972] 3 S.C.R.

said that the appellant had no accrued right to apply for rescission A under section 35 of the Specific Relief Act, 1877, which would survive the.repeal of that Act by the Specific Relief Act, 1963, and so, no application for rescission would lie under section 35

of the old Act read with section 6 of the General Oauses Act.

1897. Jt then held that since section 28 of the Specific Relief Act,. 1963, only provided for rescission of a dec~· for specific B performance of a contract for the sale or lease of immovable property, the application was illlcompetent under the section and allowed the appeal and cross-objection in part.

We do not think .that the appellant had an accrued right for c rescission of the contract or the decree for specific performance under section 35 of the Specific Relief Act, 1877, when the Act was repealed by the Specific Relief Act, 1963, on March 1, 1964.

It may be recalled that .the decree in suit No. 600 of 1961 was passed on February 25, 1964 ind that the application for resci!~ sion of the decree was filed on March 21, 1967. Section 35 of the Specific Relief Act, 1877, so far as it is material for the pur- D pose of this case, provided that where a decree .for specific performance of a contract of sale or of a contract to take a lease ha~

been made and the purchaser or lessee makes default in payment of the purchase money, which the Court has ordered him to pay, the decree may be rescinded as regards the party in default either by a suit or by an application. The right to rescind the decree E under the section can arise only if the purchaser makes default in paying the purchase money ordered to be paid under the decree.

Before the lapse of a reasonable time from the date of the decree, the appellant could have no right to have the decree rescinded on the ground of default of the purchaser. To put it in other words, the right of the appellant to have the decree rescinded was dependant upon the default of the purchaser in paying the purchase money. Such a default had not occurred when the F Specific Relief Act, 1877, was repealed, as a reasonable time for the performance of the obligation under the dec.ree had not elapsed from the date of the decree.

The more important reason VJhy there was no default in this ca.~ was that the execution of the decree in suit No. 600 of 1961 was stayed by orders of the trial G and appellate Court till August 26, 1964. We, therefore, agree with the finding of the Div; ision Bench that the appellant had no accrued right on the date of the repeal to file an. application under section 35 of the Specific Relief Act, 1877, which was saved under section 6 of the General Clauses Act, 1897. The mere right to take advantage of the provisions of an Act is not an H rued right [see Abbott v. The Minister for plans(1)].

(l) [l89S] A.C. 42S.

HUNGERFOIU> INVESTMENT v. H. MUNDHRA (Mathew, J.) 701

We also agree with the finding of the Division Bench that since section 28 of. the Specific Relief Act, 1963, provides only for an application fox: rescission of a decree for specific performance for the sale or lease of immovable property, no application to rescind

a decree for specific performance of an agreement to sell movables, would lie under that section.

The-question then is whether the application as mamtainable under -any other provision of the law. The Specific Relief, Act, 1963, is not an exhaustive enactment. It does not .consolidate the whole law on the subject. As the preamble would indicate, it--is an Act ".to define and amend the law relating to certain C ' kinds ,.of specific relier•. It does not purport to lay down the law relating -to specific relief in all ts ramifications. -In Ramda.s Khatau & Co. v. Atlas Mills Co. Ltd.(l) it was held that the Specific Relief Act, 18 77, was not exhaustive. 1 In Rahmath Unnissa Begam v. Shimoga Co-operative Bank Ltd. another(2 ) the Court said that the Specific Relief Act, 1877, is foun.ded on English equity jliri.sprudence and that it is permissible to refer to English Law on the subject wherever -the Act did not deal specifically with any topic [see also Firm Kishore Chand Shiva Charan

Lal and another v. Budaun Electric Supply Co. Ltd.(')]. Although a matter on which the Act defines the law it might gneral ly be exhaustive, the Act as a whole cannot be considered as exhaustive of -the whole -branch of the law of specific perfoi'Iijance.

It is settled by 'a long course of decisions of the Indian High Courts that the Court which passes a decree for specific performance retains control over the decree even after the decree has been passed.

In Mahommadalli Sahib v.

Abdul Khadir Saheb(') it was held at the Court which passes a decree for

specific performance has .the power to extend the time fixed in the decree for the reason that Court retains control over the decree, that the contract between the parties is not extinguished by the passing of a decree for specific performance and that the contract subsists notwithstanding the passing of the dectee. In Pearisun• dari Dassee v. Hari Charan Mozumdar Chowdhry( 5 ) the Calcutta High Court said that the Court retains control over the proceed- G _ ings even afte~ a decree for specific performance has been passed, that the decree pas~ iJ, l a suit fo.r specific performance is not a final decree and that the st1it .mt be dme4 to be pending even after the. decree. 'n~ same view was taken in Someshwar Dayal. and othrtrs_ v. Widow ofl,-aln:tan Shah and others(8). In A.nandil Pddar v .. Gunendra , Kr. Roy (11fll _ another~~) Raj J.! speaking JI {1) A.I.R.I931 Bombay lSl. - . (2) AJ.R. l9Sl Mysore 59.

(3) /..I.R. (31) 1944 Anahabad 66 at p. 77. (4) (1930) M.LJ. Vol. S9, p. 351.

(5) I.L.R. Calcutta Series. Vol. XV, p. 211. (6) A.I.R. 1958 Allahabad -488.

(7) A.I.R. 1966 Calcutta 107.

702 SUP1lEME COUllT REPORTS

[1972.] 3 S.C.R.

for , the CoUrt,. said that. the cOOit rewns .control over the matter A even afr passing a deeree for speeific performance and that vir~ tually, theo decree is in the nature of a preliminary one. In Trilieni Tewary and others v. Ramratan Nonia and others(1) it

was held that the Court retains seisin of the case notwithstanding

the fact that a decree for specific perfonnance has been passed and that the decree is really in the nature of a preliminary decree.

B Fry in his book(2 ) on Specific Performancestates the law. in

England as follows :-

. --

"It may and not unfrequently does hapPen that after judgment has been given for the specific: performance of a contract, some further relief becomes necessary, in consequence of one or other of the parties making default in the perfonnance of some!}ling which ought under the judgment to be perform~ by him or on his.part; as for instance, where a vendor refuses or is unable to. execute . a proper conveyance of the property, or a purchaser to pay the purchas~ money •..•.•

"There are two kinds of relief after. judgment for specific performance of which either party. to the contract may, in a proper case, avail himself : ·

"(i) He may obtain (on motion in the action) on

order appointing a definite time and place for

the completion Of the . contract by payment of the un-paid purchase-money and delivery Over of the executed conveyance and title deeds, or a period within which the judgment, is to be obeyed, and, if theother party fails to obey tho order, .may thereupon at once issue a writ of sequtration against the dclaulting party's' estate arid effects . . . .. . .• ·~ ·

"(ii) He may wly t:O the. Gourt _(by ,1notion in tho

 G action) for; an rd¢!. rescind~ ~t. 9n. an applice~.tion ~ kind, if 1~ .a~ .that the • party JAOVed agamst. has positively. fused. to cop1plete .. the. tract, , its inun.e4i, ate ... rescissiop

~Y ~; otherwise,. the. on:fF will .. bo for rescission .in default of eompletion within a H t!;...:.!ted.. . ?• . ww . .time~ •..••. •• ~

(1) A.I.R. 1959 Patna 460. (2) Fiy on SpecifiC Performance. 6th Od. p, $46.

iluNGDPORD INVESTMENT V. H. MUNDIDt.A. (Mathew, J.) 703

A In Halsbury's laws of EDgland(l) the law is stated as under :-

"Ancillary relief may be obtained after judgment in an action for specific performance where such further relief becomes necessary ....... .

Either party may also obtain an order rescinding B the contract in default of completion within a fiXed time."

As the Court retained control over the matter despite th~ decree, it was open to the Court, when it was alleged that the

party moved againsti has positively refused to complete the con~

tract to entertain -the application and order rescission of the. decree c if the allegation was proved. We, therefore, think that the application of the appellant was competent.

It was contended on behalf of Mundhra that he was always ready and willing to pay the purchase money, but since the ctecree .. did not specify any time for payment of the money, there was no default' on. his part. In other words, the contention was that since D the decree did not specify a time within which the purchase money should. be paid and, since an application for fixing the time was made by the appellant and dismissed by the Gourt, Mundhra cum.ot be.saidto have been in default in not paying , tbb:purehasemoney so that the appellant might apply for rescisiion of the decree. H a contract does not specify the time for performance, E the law will imply that the parties intended that the obligation under the contract should be performed within a reasonable tiine.

Section ~6 Of the Contract Act provides that where, by a contract. a promisor is to perform his promise without a9.plication by the promisee, and no time for perfonnance is specified, the engagement must be perfonned within a reasonable time d the .question F "what is reasonable time" is, in each particular case, a question of fict.

We have already indicated that the contract between the parties was not etinguished by the passing of the decree, that it subsisted notwithstanding the decree. It was an plied term of the contract and, therefore, of the decree passed thereon tUt the

parties w<>uld perform the contract within a reasOilable time. Toput it ia oth¢rwords,- as the contract subsisted desPite the decree- G aDd -.s the decree did not abrogate or modify any f the express .or implied teqns of the contract, it must be presumed .that the pt~

to tho decree had the obligation to complete the contract wtthin a reasonable time.

The. matter. call Qe !()()ked at. from another angle. Mundhra H by exercising the opti9n to pu, rchase the 31 per cent shares, be--

came entitled to obtain a conveyance of. the ares trom the appellant on payment of'tb, e purchase money. There was no pro-

(1} Halsbury's Laws of Eng/and 3rd Ed, Vol., 36. 3SJ.S2.

'104

SUPREM:B COURT REPORTS [1972] 3 s.C.R.

vision. in the agreement at what time or withiQ. what period after

the exercise of the option the appellant should convey the shares

against the payment of the purchase nioney. But it was open

to either party to make time essential by intimating the other party after a reasonable period about it after expressing its or his readiness and willingi:less to perform its or his obligation un!kr the contract. That liberty was not taken away because a decree B has been passed for specific performance of the contract without fixing the time for the performance. The appellant could, there~ .fore, have called upon Mundhra to pay the purchase money and

take delivery of the shares within .a ·ble time. The fact that the decree did not fiX a time for1completing the contract did . not prevent either party from demancling performance from other c party within a reasonable time aild thus make time essential, as the parties had that liberty before the decree was passed and the .decree did not abrogate that liberty in any way, and if the party \from whom performance was demanded evinced by his conduct that he was unWilling to perform his part, then it was open to the party dainiing performance to rescind the contract and obtain an order from die Court adjudging rescission ol the contract and the D decree thereon. We do not think, in case the Court comes to the conclusion that the party moved against has by conduct evinced an intention not to pedorm his part of the contract, the fact that no time has been fixed in the decree would preclude it from adjudg. ing the contract as rescinded. The observation of Fry already quoted does, not mean .that unless a time is specified in the decree there can be no default. It only means that if the conduct of the

party moved against is equivocal, an order for rescission will 1:le made only in default of completion within a specified time. Nor can tho observation quoted above f.rom Halsbury's Law$ of England bear any other construction. We have already indicated that section 28 of the Specific Relief Act, 1963, deals only with rescission of a decree for specific performance of an agreement to sell or lease itnmovable property and so the terms of the section are hardly relevant in deciding the question whether there can be default without fixing the time for performance in: a decree for specific performance of an agreement to sell movables. We think it unnecessary to decide the question whether, under an_y Circumstances,

there can be default of performance where a decree for specific performance of an agreement to sell or lease immovable property &>es not speeify the time of perfonnance for the purpose of an application for rescission of the decree.

It is no doubt true that after the decree in suit No. 600 of 1961,

11 stay was -<>btained by the appeUat)t preventing the execution of H the decree : an appeal was a.J.so l)referred .against that decree and a stay ebtained for the same purpose, from the appeJJate court and

HUNGBRF0RD INVESTMENT V. H. MUNDHllA (Mathew, J.) 705'

A that th~. order continued in force till tbe disposal of the appeal oru August 26, 1965. Till thCll, there can be no question of Mundhra being in default because he was not required by the orders of Coun to. perform his part of the obligation under the' decree. But question is, was he in default after August 26, 1965, in performing

his part of the obligation under the decree ? Counsel for Mundhra B relied upon the observations in the order of Ray J. passed' on the . application on the Master's sUJllll).ons as well as in tbe.order passed

mthe appeal (No. 2a6 of 1965) th.erefrom on August 18, 1966, to show that there was no offer by the appellant to deliver the sha!e6. and, therefore, Mundhra was not in default in paying the purchase money. It will be recalled that on July 13, 1966, Sen 1: passed c the order in suit No. 2005 of 1965 direc\ing Mun.dhra to pay the- ·

. purchase price and ~e deliv'etj of the shares from. the l;'eceiver. . The learned judge further directed t the' lien, if any, of Tuiner Morrison would shift to the purchase money to be paid to the receiver. This order, though passed in suit No. 2005 of 1965 in which Mundhra was' not a party, was communicated to him by the 0 letter of the appellant dated January 11, 1967. Even before that, two letters had been sent on July 28 and July 29, 1966, bly the appellant's solicitors to Mundhra asking him to be ready with the. sum to take delivery of the $hares before the Court hearing appeal No. 286 of 1965. This was refused by Mundhra by his letter dated August 2,.1966. In the reply Q(Mdhra.dated Januacy 25, 1967, E to the letter dated January, 11, 19()7, from the appellant, he ised. the objection that the appellant was not in a position to give delivery of the shares aru:t that the order dated July 13, 1966, was not binding on him, as he was .-ot a party. to the suit in which theorder was passed. As the ivcr had the share! in his possession, there was no pOint in the objection raiAed by .Mundhra that the appellant was not in a position to deliver the shares. In other P words, the receiver had the shares in his .-possession, and as therewas an order by the Court directing the n!<:eiver to deliver possession of the shares on payment of the purchase money bject to the order of. the Coun bearing appeal No. 286 of 1965, there was no substance i~ the objection that the appellant was nQt in a opposition to deliver the shares. Mundhra did not ril.ise any objection on the G score that the appell'ate court has not made an'V direction asking

him to pay the purchase money es against the delivery of the shares by the receiver or that the receiver was not directed by that Court

to deliver the shares. The only Ie2itiniate inference from his conduct is that Mundhra was deliberately putting frd the plea that the appellant was not in a position to deliver the shares and that it was not readv and will~ to nerform its part of the contract only H to avoid oo'ymenf of the _purchase money. Nor is there any substance m the contention of COUDSel for Mund&ra that beCause the

appeiant obtained a stay of the order passed by Masud J •. giving:-

- 1()6 SUPilEME COURT REPORTS

(1972] 3 S.C.I.

Mundln:a -a fght's e to pay the purchase money for tlkilag A delivery of e shes. the appel1ant was precludecUi'om c:Ontendilig that MUn.dhra C()mlnit~ delault in the. payment of the amount.

In other words, there is no. pOmt in the contention of coiiUel that

since 'the appellant itself obtained a stay of.the order palled bY Masud .J. giving liberty to Mundhra to pay the purchue mo~ within a fortnight from the date of the order, the appellant 1 vented Mundhra from performing his part of the obligation uDder the decree in suit No. 600 of 1961. When the appellant came to the Court with its application for rescission, there was already a rescission of the contract and the decree by.its letter dated Feb ruary '11, 1967, stating that Mundhra had forfeited his right to purchase the 51 per cent shares in pursuance of the decree in suit c No. 600 of' 1961, as he failed to fulfil his obligation in pursuance to the noti6e of the appellant on J anuiu-y 11, '1967. It only wanted a declaration by adjudgment by the (;:ourt that it was justified in doing so.

A court generally adjudicates upon the antecedent rights of the parties. When a Court adjudges rescission of a contract or a decree, it is only concerned with the question whether the person rescinding it was justified in doing so. The Coun does not create D any right which parties did not possess when it makes a declaration that a contract has been validly rescinded.

Merely "because .. it is necessary for the Court to pass an order of rescission, when a controversy arises, it does not follow that it is the Court t'hat rescinds . the contract.

The Court is only passing upon the validity of the rescission already made by the party. InAbram Steamship Com- E pany Ltd. and another v. Westville Sipping Company Ltd.(1), their Lordships of the House of Lords said :

"Where' one party to a contract expresses by word or act in an Ujllequivocai manner that by reason of fraud or essential error of a material kind inducing him to enter int'o the contract he has resolved to rescind it~ an4 refuses to be bound by it, the expression of his electioJl, if justified by the facts, terminates the contract, puts the parties in status quo' ante and restores things, u between them, to the position in which they stood befo~ the contract was entered mto. It may be that the facts impO&e upon the partr desiring to reseid the duty of making

restitution in mtegrum. If so, he must discharge that duty before the rescissjon iq, in effect accomplished. But if the other party to the contract questions the right of the first to resci; nd, thus obliging the latter to bring. an action at law to enforce the right he has secured for him self by his election, and he later gets a verdi~ it. is an entire mistake to suppose that it is this verdict which by itself terminates· the contract and Testores the anteced.lllt

(1) Law Report$. A))peal Cases, 1923, p. 773 at p. 781.

~GBllFOIID INVBSTMB.NT V. H. ~UNI>Hlt.A (Aftllhew, J.) 707

status. Tho verdict, is merely the ju4icial determination of the .fact tht the expreSsiqn by the p!aintift of his eleC-:

tion to rescind was justlfied, was eective, and put an end to the contra"t . . . . .. " The rights of the parties became crystallized whon the appel- B lant, by its letter dated February 11, :1967, re&cinded.the contraet

and the decree based thereon and when Masud J. adjudged that the contract and the decree be rescinded. Mundhra cannot,

threfore, complain that he was prevented by appellant from paying the purchase money in pursuance of the order of Masud J. and resist the prayer for rescission. · c There is no substance in the contention of counsel for Mu_ndhra that the appeUant was not in a position to give a good title to the sl¢'es because Tumer Morrison ha~ .a lion upon the shares. The

questjn whether Tumet. Morrison has a lien upon the shares has been finally decided by this Court in Appeal No. 1223 (N) of 1970 filed by Turner Morrison, holding 'that they have tno lien in respect D ol these shares. . - It was contended that if Mundhra committed default in payment of the purchase money, the remedy of the appellant was to execute the decree for specific performance as the decree was a decree iD favour Of both the appellant amd Mundhra and that the - d~ ia fivour of the appellant was a decree for JllOney. 1 A decree for specific -perlormanct is a decree. i11 favour of both the plahitiff and tho defendant in the suit In Heramba Chandra Maitra v./YfJiish Chandra Sinha an4 others(1) Rankin CJ., speaking for. e Court, said that a decree fOr specific performance operates ill favour of both plainti1r and defendant and tlra~ the decree . is capable of being executed by either [see .. also Bai Karimtlblbi T

v. A.btkrehman Sayad Banu(2)]. Counsel for Mundhra, therefore,

that 'it was open to the appc.Uant to have executed e decree

ana realiled the purchase money from Mundhra inatead of resort iog to the romedy of rcacisaioo.. Order 21, rule 30 provides for execution of a deCree for.moncy •. That rule can posslb1y have no · application tO the executi~ a dec~ for specific performance, G firstly for tho' reuon that a c mode for execution of a decree for specific pedorma.nce is provided by Order 21, Rule 32 and ..

secondly, because no decree tor ni*Y ia puaed in a suit tor specific - performance. Order 21, Rule 32 providea as follows:-

. •• ( 1) :WJtere party apwt wh~ a decree for the

H .specific performance of a contract,· or fr reatftution of

conjugal rights," for an-injunction, has boon puaed,

~ has had an opportunity of obeying the decree and has .

(J) A.I.R. J~32 Calcutta .579. A.l.R. 1923 ~~ 26.

[1972] 3 S.C.'R..

wilfully failed to obey it, the decree may be enforced in the case of a decree for restitution of conjugal rights by the attachment of his property or, in the case of a decree for the specific . performance of a contract or for an injunction by his detentiQl) in the civil prison, or by the attachment of hk property or by both.

( 2) Where the party against whom a. decree for specific pedormance or for an injlinction has been passed is a corporation, the decree may be enforced by the attachment of the property of the corporation or, with the leave of the Court, by the detention in the civil prison of the directors or other principal officers thereof, or by both attachment and dettntion.

( 3) Where any attachment under sub-rule ( 1) or sub-rule (2) has remained in force for one year, if the judgment-debtor has not obeyed the decree and the decree-holder has applied to have the attached property sold, such property may be sol<; i; and out of the proceeds the court may award to the decree-holder such compensation as it thinks fit, and shall pay the balance (if a, iY) to the judgment-debtor on hi~ application. ( 4) Where the judgment-debtor has obeyed the . decree and paid an costs of executing the same which he.· is bound to pay, or where, at the end o[one year frOm the date of the attachmQnt, no application to have the property sold has been made, or if made has been tefused, the attachment shall cease.

( 5) Where a decree for the specific performance of a contract or for an injunction has not been obeyed, the Court may, in lieu of or in addition to all or any of the processes aforesaid, direCt that the act required to be done tnay be done so far as practicable by the decree-holder or some other person appointed b!y the Court, at the oost of the judgmont-debtor. and upon tpe act being done the expenses incui'red may be ascertaillled in such manner as. the Court may direct and may be recovered as if they were included in .the decree.''

The execution of a decree for specific performance can only

be in the manner prescn"'bbO by this rule sub-rule ( 1) of the rule says that if a decree for specific performance is . :not obeyed, the decree isto be enforced by the detention of the party in default in H the civil prison or by attachment of his property or by both. The . detention in the' civil prison of the party who failed to obey the decree and the attacbmetnt of his property are simp1y the means

, HUNGERFORD INVESTMENT v. H. MUNDHRA (Mathew, J.) 70'9

to compel , to obey tpe decree. That is made clear by subrule (3) which says that if the judgment-debtor has failed to obey the decree when the attachment has remained in force for one year the property attached may be sold and out of the proceeds the decree-holder may be awarded such compensation as the Court tb4J.ks fit. Sub--rule ( 5) which provides that the Court may direct tho act required to J>e done may be dQne by the decree-holder or some other person appointed by the court can only refer to an act other than an act of payment of money.

We de not think that t)le appellant could have executed the decree agat Mundhra as a money decree and realised the purchase money from him. Therefore, if Mundhra refused to pay the purchase money, there was no•hing which. prevented the appellant from applying for rescission of the decree.

It was then rontended that the attachments of the decree in suit No. 600 of 1961 by the creditors of Mundhra prevented hiri1 from tendering the purchase money to the appellant and take delivery 0f the shares as the attachments prevented him from obtaining satisfaction of the decree by paying the purchase money and obtaining delivery of the shares. In .other words, the contention was that because of the attachments Mundbra cowd not have paiti the.: purchase money to the appellant as that would have Deell in coo.travention of the orders of the. Court attaching the decree. We do not think that there is any substance in this conttion~ If the creditors of Mundhra attached the decree and he was prevtnted from tendering the money because of the attachment, he .has oply to blame himself. The only question with which the Court is eon~ cerned is whether Mundhra has disabled bimsel! from perfOI'IJ$g his part of the obligation under the decree. The inability to pay off the creditors was the proximate cause of the attacbm.Qilts and the responsibility for the same was that of Mundhra. 'The fact that the attachments prevented him from performing his part of the obligation under , the decree or obtaining satisfaction therem -'WOUld not make him any the less a defaulter, so far as the performance of his part of the obligati<¥1. un~ the decree is concerned. Nor is there any substance in the contention of counsel for Mundhra that the attacbmeiJ.t by Bank Hoffman of the 51 per cent shares under the order of the District Judge of Delhi made it im.possil:ie for the appellsm.t tp deliver the shares to Mundhra. as the attachment order directed that the 51 per cent shares should be proclg.ced before the Calcutta High Cpurt for delivery to Mundhra against -paent of the consideration mentioned in the decree _in suit No. 600 of 1961.

We, therefore, allow the appeal and set aside the judgment H under appeal and order the rescission of the decree for specific perfonttance passed in suit No. 600 o_f 1961. We direct hri K.

B. Bose, Barrister, Member, Bar Ltbrary (]ub, Calcutta High 17-L1031Supcl/72 .

.SUPREME COURT REPORTS

(1972)3 ~.C.R.

' Court; the receiver apointed in suit No. 2005 of 1965-.:, and who

waS appointed as receiver of the shares by the proceedings dated July 14, 1969, of Masud J. in suit No. 600 of 1961, .tO pr00uce the 2,295 shares .before this Court and give. custody of the same to the Registrar of this Court. The Registrar will hand them over to the appellant, ·

The Receiver has informed. this Court that the remuneration the shares in this Court in pursuance of this judgment, .

We allow the appeal with costs.

ORDER

In modification of our earlier order dated March 9, 1972 we ndw direct the Receiver to deliver the shares to the Registrar of the •Calcutta High Court on the original side within 10 days rrom this date. The Registrar .will handover the shares to Mr. B. M. Bagaria, a Solicitor of the Calcutta High Court; on behalf of Hungerford Investment Trust Ltd. ·

(The Receiver has informed this Court that the remuneration due to him has not yet been paid. The Receiver may move the

, alcutta Hi'gh Court for nec.essary orders in this connection.

iln. modification of our earlier order dated March 9, 19"72 "rtgllrdillg costs we direct that ill Civil Appeal No. 488 of 1971 the costs will be paid by the cootin~ defendants.

V.P.S~ ·

F ,

HUNGERFORD

INVESTMENT

TRUST

LIMITED (IN

VOLUNTARY LIQUIDATION

HUNGERFORD INVESTMENT TRUST LIMITED (IN VOLUNTARY LIQUIDATION)

HARIDAS MUNDHRA & OTHERS

K. S. HEGDE

K. K. MATHEW, JJ.

Specific Relief Act

Specific Relief Act

s. 35

s. 6

General Clauses Act, 1897

Specific Relief Act

s. 28

January, 11, 1967

Gble under the Specific Relief Act

Specific Relief Act, 1877

Specific Relief Act

s. 35

s. 6

General Clauses Act, 1897

s. 35

Relief Act, 1877

s. 28

s. 46

C.P.C

Chrmdra SinhtJ

S 1

Calcutta High Court

S. V. Gupte

S. B. Mukherjee

B. N. Garg

K. K. Jain

D. N. Sinha

Lina Seth

M. M. N. Pombra

H. K. Puri

R. C. Dev

Somnath Chatterjee

M. Bose

S. Swarup

P. C. Bhartari

A. K. Sen

Shanker Ghosh

D. N. Gupta

.N. Khait(ln

Krishna Sen

B. P. Singh

S. S. Khanduja

Promod Swarup

Gobind Das

Gobind Das and B. D. Sharma, for respondent No.

B. D. Sharma

February 25, 1964

Hungerford Investment Trust Limited

Turner Morrison & Co.

John Geoffrey Turner

Nigel Frederic Turner

Hunerford

Turner Morrison

Haridas Mundhra

Hungerford

Mundhra

October 30, 1956

John Geoffrey Turner-

British India Corporation

April 19,

1961

Feb- B ruary 25, 1964

HWlgerford

Hungerford

March 18, 1964

August 26, 1964

August 30, 1965

September 28, 19.65

R, ay,

Hunrford

Hunrford preferred an appeal against the said order (Appeal No.

August 8, 1966

The appe.al as dismissed on August 8, 1966.

November 25, 1968

Ray

Champaran Sugar Co. Ltd.

B British India Corporation Ltd.

Kanpur Sugar Work! lAd

Civil Judge, Kanpur and those obtained by Kanpur Sugar Work!

Britisp India Corporation Ltd.

and Britisp India Corporation Ltd. in suit No.

Court of Second Civil Judge, Kanpur

Life Insurance Corporation of India

High Court of Allahabad

299 of 1961 of the High Court of Allahabad.

Bank Hoffman A.G.

Romanigo Holdings

Bank Hoffman

Court of Distri~ Judge, Delhi

High Court of Calcll'tta

December 12, 1964

Sanderson

Margo~

Margo

December 22, 1964

Turner Mornson

Turner Mornson rote a letter on January 11.

January 11. 1965

K. N. Srivllstava

January 13,

1965

Sanderson -and Morgan

January 18, 1965

On January 18, 1965, K. N. Srivastava, the Income TU.

K. N. Srivastava

Tutiiler Morrison

Tutiiler Morrison instituted a suit against Hungerford (Suit No.

Calcutta High Comt

2005 of 1965) in' the Calcutta High Comt claiming' Rs.

section 23

Indian Inoome Tax Act, 1922

Article 22

July 8, 1966

K. B. Bose

First National City Bank

July 13, 1966

Sen

Mundhr~

September 2, 1968

Mat:ch 21, 1967

October 30,

1956

Mundhra

Masood

section 35

Specific Relief Act, 1877

Act by the Specific Relief Act, 1963

November 29, 1955

8 February 25, 1964

March 2, 1964

Mundbra

section 35

Specific Relief Act, 1877

Act by the Specific Relief Act, 1963

section 35

section 6

section 28

Specific Relief Act

section 35

Specific Relief Act, 1877

Act was repealed by the Specific Relief Act, 1963

March 1, 1964

March 21, 1967

Section 35

the Act was repealed by the Specific Relief Act, 1963

the Act was repealed by the Specific Relief Act, 1963

Specific Relief Act, 1877

section 35

Specific Relief Act, 1877

section 6

General Clauses Act, 1897

section 28

Specific Relief Act, 1963

Specific Relief Act

Court said that the Specific Relief Act, 1877

English Law on the subject wherever -the Act

Raj J.

A.I.R. 1958 Allahabad

B Fry

B Fry in his book(2 ) on Specific Performancestates the law.

England

section 28

Specific Relief Act, 1963

Tuiner Morrison

July 28 and July 29, 1966

January, 11, 19()7

.Mundhra

Masud

Nor is there any substance m the contention of COUDSel for Mund&ra that beCause the

appeiant obtained a stay of the order passed by Masud J •. giving:-
1()6 SUPilEME COURT REPORTS

(1972] 3 S.C.I.

Mundln:a -a fght's e to pay the purchase money for tlkilag A delivery of e shes. the appel1ant was precludecUi'om c:Ontendilig that MUn.dhra C()mlnit~ delault in the.

~GBllFOIID INVBSTMB.NT V. H.

Aftllhew

Tumer Morrison

Tumet. Morrison

Rankin

Order 21, rule 30

Order 21, Rule 32

Order 21, Rule 32

Deell

District Judge of Delhi

K.

B. Bose

Masud J.

B. M. Bagaria