1949 (5) TMI 23 - Other - Indian Laws

Appeal Dismissed: Court Affirms Specific Performance for Unique Contract Despite One Defendant's Withdrawal.

Jainarain Ram Lundia Versus Surajmull Sagarmull and Ors.

The court dismissed the appeal, affirming the lower courts' judgment. It held that a concluded agreement existed, and the contract was not contingent on ... - Issues Involved:1. Existence of a Concluded Agreement2. Joint and Indivisible Nature of the Contract3. Specific Performance and Adequate Remedy4. Effect of Withdrawal of One DefendantDetailed Analysis:1. Existence of a Concluded Agreement:The primary contention was whether there was a complete or concluded agreement between the parties which could be specifically enforced. The appellants argued that the correspondence between the parties indicated ongoing negotiations rather than a finalized contract. The court, however, found that an oral agreement was concluded on 1st January 1941, as evidenced by the letter of P.D. Himatsingka and Co. dated 2nd January 1941, confirmed by Khaitan and Co. on 2nd/3rd January 1941. The court held that the subsequent correspondence did not introduce any new terms that would negate the completed agreement. The court referenced the case of Hussey v. Horne-Payne, emphasizing that once a contract is concluded, further negotiations on new matters do not prevent full effect being given to the existing contract unless it is rescinded or varied by mutual consent.2. Joint and Indivisible Nature of the Contract:The appellants argued that the contract was intended to be joint and indivisible, requiring all four defendants to join in the agreement for it to be valid. The court examined the letter dated 28th December 1940, and found no indication that the agreement was conditional upon all four defendants, including Badri Prosad, joining. The court noted that the other defendants did not act on the assumption that Badri Prosad's participation was essential. The court referenced the principle in Halsbury's Laws of England and the judgment in Luke v. South Kensington Hotel Co., but found that the facts did not support the appellants' contention that the agreement was incomplete without Badri Prosad.3. Specific Performance and Adequate Remedy:The appellants contended that damages would be an adequate remedy, and thus, specific performance should not be granted. The court disagreed, noting that the subject matter of the contract involved shares in a private limited company and a fractional interest in a partnership business, which are limited in number and not ordinarily available in the market. The court referenced Illustration (iii) under Clause (e) of Section 12, Specific Relief Act, to justify the decree for specific performance. The court concluded that the discretion to grant specific performance was rightly exercised by the lower courts.4. Effect of Withdrawal of One Defendant:The appellants argued that the withdrawal of Badri Prosad from the suit affected the enforceability of the contract. The court found that the plaintiffs were entitled to proceed against the remaining defendants under Section 43, Contract Act, which makes all joint liability joint and several in the absence of any agreement to the contrary. The court noted that the plaintiffs ultimately sought specific performance for the shares of the remaining defendants and expressed readiness to pay the entire consideration, thus not prejudicing the appellants.Conclusion:The court dismissed the appeal, affirming the judgment of the lower courts. It held that there was a concluded agreement, the contract was not conditional upon the participation of all defendants, specific performance was appropriate, and the plaintiffs were entitled to proceed against the remaining defendants despite the withdrawal of one defendant. The appeal was dismissed with costs.