1949 (5) TMI 17 - HC - Indian Laws

Court upholds judgment for specific performance of contract in share sale dispute.

The court dismissed all contentions raised by the appellants and upheld the lower courts' judgment, affirming the decree for specific performance of the ... - Issues Involved:1. Whether there was a complete or concluded agreement that could be specifically enforced.2. Whether the agreement required all defendants, including Badri Prosad, to join for it to be valid.3. Whether the contract being joint and indivisible allowed the plaintiffs to proceed against some defendants and not others.4. Whether damages would be an adequate remedy instead of specific performance.Detailed Analysis:1. Complete or Concluded Agreement:The appellants contended that there was no complete or concluded agreement which could be specifically enforced. They argued that the correspondence between the parties showed ongoing negotiations without finality. The court, however, found that there was an oral agreement concluded on January 1, 1941, between the plaintiffs' representative Bhuramull and the defendants' representative Himatsingka. This agreement was confirmed by letters exchanged on January 2 and 3, 1941. The court held that the terms of the contract were settled and the subsequent negotiations did not affect the completed agreement. The court cited the case of Hussey v. Home-Payne to support the principle that once a contract is concluded, it can only be rescinded or varied with the consent of both parties. The court found no evidence that the contract was rescinded or re-opened.2. Requirement of All Defendants to Join:The appellants argued that the agreement was conditional on all defendants, including Badri Prosad, joining the contract. The court referred to the principle that if a promise is intended to be made by several persons jointly, the failure of any one to enter into the agreement means no contract is formed. However, the court found no evidence of any understanding that the contract would not be binding unless Badri Prosad joined. The court noted that the letter dated December 28, 1940, from the defendants to Himatsingka did not indicate such a condition. The court also highlighted that the defendants' letter to Himatsingka on January 5, 1941, showed their intention to sell their shares independently of Badri Prosad's participation. Thus, the court concluded that the contract was not dependent on Badri Prosad's joining.3. Joint and Indivisible Contract:The appellants argued that the contract being joint and indivisible, the plaintiffs could not proceed against only some of the defendants. The court referred to Section 48 of the Indian Contract Act, which makes all joint liability joint and several in the absence of any agreement to the contrary. The court held that it was open to the plaintiffs to sue any one or some of the joint promisers. The court also noted that the plaintiffs had ultimately prayed for specific performance of a part of the contract under Section 15 of the Specific Relief Act and expressed their readiness to pay the entire consideration for 350 shares. Therefore, the appellants were not prejudiced.4. Adequacy of Damages:The appellants contended that damages would be an adequate remedy instead of specific performance. The court referred to Illustration (iii) under Clause (c) of Section 12 of the Specific Relief Act, which indicates that when shares are limited in number and not ordinarily available in the market, specific performance is appropriate. The court held that specific performance was a discretionary remedy and found no reason to interfere with the discretion exercised by the lower courts in granting specific performance.Conclusion:The court dismissed all the contentions raised by the appellants. It upheld the judgment of the lower courts, affirming the decree for specific performance of the contract for the sale of 250 shares belonging to defendants Nos. 3 and 4 and their five annas' share in the firm of Marwari Brothers. The appeal was dismissed with costs.