judgement:
Appeals Nos. 1954 and 1955 of 1966.
Appeals from the judgment and decree dated May 30, 1963 the Punjab High Court in Regular First Appeal No,.
105 of 1957.
A.K. Sen and R.K. Aggarwal, for the appellant (in C.A. No. 1954 of 1966).
and respondents Nos. 5, 6, 8 and 9 (in C.A. No. 1955 of 1966).
Bishan Narain, B.P. Maheshwari and R.K. Gupta, for the appellants (in C.A. No. 1955 of 1966) and respondents Nos. 2 to 6 (in C.A. No. 1954 of 1966).
Sarjoo Prasad, Rameshwar Prasad and A.D. Mathur, for respondent No. 1 (in both the appeals).
S.M. Jain, for respondents Nos.
13(i) to 13(iv) (in C.A. No. 1954 of 1966) and respondents Nos.
12(i) to 12(iv) (in C.A. No. 1955 of 1966).
Hegde, J.
The question of law that arises for decision in these appeals by certificate is whether the daughters of a pre deceased son of a Hindu Woman are entitled to succeed to her stridhana ? The trial court answered the question in the affirmative but the High Court in appeal came to the conclusion that they are not fentitled to succeed to the estate in question.
The material facts of this case are few.
For a proper understanding of the facts of the case, it will be convenient to have 'before us the admitted pedigree of the family.
It is as follows: 492 The finding of the trial court that the suit properties are the stridhana properties of Barji was not contestect before the High Court.
In tins Court at one stage 'a feeble attempt was made on behalf of the appellants to contest that finding.
We did not permit that finding to be challenged as the same had not been challenged before the High Court.
Therefore we proceed on the basis of that finding.
Barji died in September 1950.
Her husband Patu Ram had predeceased her.
It appears that he died sometime in 1904.
Patu Ram 's father Bool Chand as well as Patu Ram 's brothers Tulsi Ram, Behari Lal and Hira Lal had predeceased Barji.
Patu Ram and Barji had a son by name Jugal Kishore wno had predeceased Patu Ram leaving behind him his widow Bindri wno died in 1931.
They had no children.
Radha Kishan, the adopted son of Patu Ram and Barji died about 20 years 'before the death of Barji leaving behind him his widow, defendant No. 6.
Radha Kishan had live children including defendants Nos. 1 to 3 through another wife.
His son Roshanlal had died a few months before the death of Barji.
His daughter Balwanti had predeceased Barji leaving behind her children defendants 4 and 5.
Tulsi Ram 's son Prahlad Rai had also predeceased Barji leaving behind his widow defendant No. 8 and son defendant No. 7.
By the time succession to the estate of Barji opened all the children of Behari Lal and Hizalal had died but some of them had children and grand children, as, seen from the pedigree.
After the death of Barji, her properties came to the possession of defendant No. 6.
Defendant No. 1 sued for the possession of those properties on the ground that she and her sisters are preferential heirs to the deceased Barji.
To that suit she did not make Amar Nath, the plaintiff in the present suit, a party.
Amar Nath 's application for being impleaded as a party in that suit was opposed by the 1 st defendant and the said application was ultimately rejected by the court.
The dispute in that suit was referred to arbitration.
The arbitrators upheld the claim of defendants Nos. 1 to 3.
Thereafter the present suit was brought.
the High Court as well as in the trial court there was a triangular contest.
The plaintiff claimed that he was exclusively entitled the suit properties, defendants Nos. 1 to 3 claimed that they are the nearest heirs to Barji; some of the other defendants contended that they succeeded to the suit properties as co tenants with the plaintiff.
In this Court all the contesting defendants sail together.
As mentioned earlier, the trial court 'accepted the claim of defendants Nos.
1 to 3 but the High Court held that the plaintiff was exclusively entitled to the suit properties, he being the nearest heir to the deceased.
That finding is contested both by defendants Nos.
1 to 3 as well as by the other contesting defendants.
is how the aforementioned two appeals came to be filed.
In arriving at its finding the High Court relied on the rules of succession found in paragraph 147 of Mulla 's Principles of Hindu 493 Law (13th Edn.).
It came to the conclusion that those rules are exhaustive.
On the basis of those rules, it ruled that defendants Nos. 1 to 3 were not entitled to succeed to the estate of Barji.
So far as the other defendants are concerned it rejected their claim on the ground that as between the plaintiff and themselves the former is a preferential heir as he is the nearest in degree to Barji.
It is the admitted case of the parties that the properties in question are not shulka and that Barji was married in one of the approved forms.
Therefore while pronouncing.
on the competing claims made in this case, we must be guided by the order of succession prescribed in paragraph 147, if the same is correct and exhaustive.
Paragraph 147 says: "Stridhana other than shulka passes in the following order: (1) unmarried daughter; (2) married daughter who is unprovided for; (3) married daughter who is provided for; (4) daughter 's daughter; (5) daughter 's son; (6) son; (7) son 's son.
If there be none of these, in other words, if the woman dies without leaving any issue, her stridhana, if she was married in an approved form, goes to her husband, and after him, to the husband 's heirs in order of their succession to him; on failure of the husband 's heirs, it goes to her blood relations in preference to the Government.
But if she was married in an unapproved form, it goes to her mother, then to her father, and then to the father 's heirs and then to.
the husband 's heirs in preference to the Government".
The legal position is stated in identical terms in Mayne 's treatise on Hindu Law (Eleventh Edn.
Paragrah 623, pages 744 to 746) as well as in the other text books on Hindu Law referred to at the time of the hearing.
At this stage it may be mentioned that the correctness of the order of succession mentioned in paragraph 147 till we come to item No. 7 (son 's son) was not challenged.
The same is well settled bY decided cases.
It is not necessary to refer to those cases.
The only contention advanced on behalf of some of the defendants is that after son 's sons come sons ' daughters.
Alternatively it was contended that the expression "son 's son" includes "son 'S daughter".
We have to see whether these contentions are well founded.
The rules relating to succession to stridhana enunciated in the text books are based on Yajnyawalcya 's text "her kinsmen take it, if she die without issue".
This statement is elaborated by Vijnyaneswara in Mitakshara.
The relevant portions thereof as transtated by H.T. Colebrooke are found in placita 8, 9, 10 and 11 in Section XI of his book "Mitacshara".
They read as follows: 494 "8.
A woman 's property has been thus described.
The author next propounds the distribution of it: 'Her kinsmen take it, if she die without issue '.
If a woman die 'without issue ' that is leaving no progeny; in other Words, having no daughter nor daughter 's daughter nor daughter 's son, nor son, nor son 's son; the woman 's property, as above described, shall be taken by her kinsmen; namely her husband 'and the rest, as will be (forthwith) explained.
The kinsmen have been declared generally to be competent to succeed to a woman 's property.
The author now distinguishes differec at heirs according to the diversity of the marriage ceremonies.
The property of a childless woman, married in the form denominated Brahma, or in any of the four (unblamed modes of marriage), goes to her husband: but, if she leave progeny, it will go to her (daughter 's) daughters: and, in other forms of marriage (as the Asura & c.), it goes to her father (and mother, on failure of her own issue).
Of a woman dying without issue as before stated, and who, had become a wife by any of the four modes of marriage denominated Brahma, Daiva, Arsha and Prajapatya, the (whole) property, as before described, belongs in the first place to her husband.
On failure of him, it goes to his nearest kinsmen (sapindas) allied by funeral oblations.
But, in the other forms of marriage called Asura, Gandharba, Racshasa and Paisacha; the property of 'a childless woman goes to her parents, that is, to her father and mother.
The succession devolves first (and the reason has been be,fore explained) on the mother, who is virtually( exhibited (first) in the elliptical pitrigami implying 'goes (gachhati) to both parents (pitarau;), that is to the mo ther and to the father '.
On failure of them, their next of kin take the succession.
" These passages have received interpretation at the hands of the Judicial Committee as well as the High Courts in India and the law is now settled as to the mode of succession to stridhana under Mitakshara until we reach son 's son.
The controversy now is as to who should succeed to such an estate if none of the heirs mentioned in items Nos. 1 to.
7 in paragraph 147 of Mullas Hindu Law is in existence at the time of the death of the woman concerned.
495 Mr. A.K. Sen, learned Counsel for some of the defendants contested the correctness of Colebrooke 's translation in certain respects.
He wanted us to examine the original text to find out whether the translation found in placita 9 is correct ? The parties did not place before us either an admitted translation of the original text or even an official translation.
Colebrooke is a distinguished oriental scholar.
The Judicial Committee as well as the various High Courts in this country have relied on his translation of Mitakshara in dealing with the question of inheritance.
Jogendra Nath Bhattacharya in his commentary on Hindu Law( 2nd Edn ) deals with the order of succession under Mitakshara to stridhana property in Chapter VI of that book.
His translation of the relevant commentaries accords with those made by Colebrooke.
To the same effect is the opinion expressed by Justice Chandavarkar in Bhimacharya Bin Venkappacharya vs Ramcharya Bin Bhimacharya(1).
Hence we are unable to agree with Mr. Sen that Colebrooke 's translation does not bring out accurately the meaning of the relevant passages in Mitakshara.
Colebrooke in his book 'Mitakshara ' published in 1869 sets out the order of succession to a woman 's stridhana properties at page 15 8 thus: Maiden daughter . 1 Unendowed married daughter . 2 Endowed married daughter . 3 Daughter 's daughter . 4 Daughter 's son . 5 Son . 6 Grandson . 7 Husband . 8 If the contention of defendants is correct then son 's daughter and not husband should have come after the grandson.
But that is not the case.
Mr. Bishan Narain, learned Counsel for defendants Nos. 1 to 3 contended that the list given in Mitakshra is only illustrative and not exhaustive.
He urged that Yajnyawalcya had stated that "a woman 's property would devolve on her kinsmen if she died without issue" which means that it would devolve on her progeny which expression includes son 's daughter as well.
In this connection he also relied on Vijnyaneswara 's commentary stating that the expression 'without issue ' found in Yajnyawalcya text means "leaving no progeny".
On the basis of these statements he contended that even according to Vijnyaneswara, the deceased woman 's progeny would take her stridhana in preference to her kinsmen including her husband.
On the basis of this premise he proceeded to argue that the other words used in placita 9 viz.: (1)I.L.R 33 Born.
452 496 "having no daughter nor daughter 's daughter nor daughter 's son nor son nor son 's son" should be understood as merely being illustrations of the word "progeny".
This contention is opposed to the commentaries by Narada, Gautama and the later commentators.
More than that it runs counter to the decisions rendered by the Judicial Committee and the various High Courts during the last over a century.
It is now well settled that stridhana of a Hindu woman governed by Mitakshra passes in the order mentioned in Mitakshra and the children of the deceased woman do not take the same as a body either jointly or as tenants in common.
Only the heirs belonging to a class take the properties as tenants in common.
Mr. Bishan Narain next contended that under Mitakshra propinquity is the test of inheritance.
Therefore there is no reason why the deceased woman 's husband 's brother 's son should take the properties in preference to her son 's daughters.
We do not think that in the matter of succession to stridhana propinquity was considered by the law givers as the sole or even the principal test, otherwise there is no justification for a daughter 's daughter or a daughter 's son to succeed to the estate of a woman in preference to her son.
It is true that it is not easy to find out the reason behind the rules relating to succession to stridhana.
But that is equally true of many other branches of our family laws.
These contradictions are inevitable in society religious matters particularly when our social laws were controlled by our religious beliefs and our law givers were our religious preceptorS.
It is for the legislature to step in 'and bring about harmony between the society and the laws governing it.
That is why our Parliament enacted several statutes in 1955 to amend the Hindu Law in various respects.
We are unable to accept the contention of Mr. Bishan Narain that the expression son 's son includes son 's daughter as according to the rules of interpretation the masculine includes the feminine.
That rule of interpretation is inapplicable in the present case as daughter 's daughter succeeds to the stridhana in preference to daughter 's son.
The order of succession prescribed clearly rules out the application of that rule of interpretation.
Mr. Sen in support of his contention that on a true interpretation of the relevant passages in 'Mitakshra ', defendants Nos. 1 to. 3 are preferential heirs to deceased Barji, relied on certain passages in some of the decided cases.
First he referred to the decision of the Patna High Court in Kumar Raghava Surendra Sahi vs Babui Lachmi Kuer(1).
Therein the dispute related to the succession.
to the properties left by a maiden 'and not by a married (1) Pat.
Sqo (2) L.R. 33 I.A. 176.
497 woman.
The rules relating to the succession to the stridhana of a deceased maiden are wholly different from those relating to succession to the stridhana of a married woman.
Therefore the observations made in regard to those rules have no relevance for our present purpose.
He next invited our attention to certain passages in the decision of the Judicial Committee in Bali Kesserbai vs Hunsraj Morarji and anr.(1).
Therein the dispute was between Bai Kesserbai the surviving co widow of the deceased Bachubai 's husband Koreji Haridass, Hunsraj Morarji the separated nephew of Koreji, being the son of his eldest brother, who predeceased Bachubai and Bai Monghibai, the widow of 'a younger brother of Koreji named Ranchordass Haridass.
The question for consideration by the Judicial Committee was as to the true scope of the latter part of the placing 9 in Colebrooke 's Mitakshara which says "if a woman die without issue, that is, leaving no progeny . the woman 's property . . shall be taken by her kinsmen namely her husband and the rest as will be forthwith explained".
Their Lordships observed that there can be no reasonable doubt that according to Mitakshara definition of sapinda, husband and wife are sapindas to each other and the co widow of the husband of the deceased was the nearest sapinda of the deceased woman 's husband and hence entitled to succeed to the estate in question.
This decision again does not bear on the point under consideration.
Lastly Mr. Sen contended that in view of the Hindu Woman 's Rights to Property Act (XVIII of 1937), it must be held that defendants 1 to 3 are nearer heirs to the deceased than the plaintiff.
This contention was negatived by the High Court on the basis of the rule laid down 'by this Court in Annagouda Nathgouda Patil vs Court of Wards and anr.
(2) wherein this Court dealing with Act 11 of 1929 observed: "The question is whether the provisions of this Act can at all be invoked to determine the heirs of a Hindu female in respect of her stridhan property.
The object of the Act as stated in the preamble is to alter the order in which certain heirs of a Hindu male dying intestate are entitled to succeed to his estate; and section 1 (2) expressly lays down that 'the Act applies only to persons who but for the passing of this Act would have been subject to the Law of Mitakshara in respect of the provisions herein enacted, and it applies to such persons in respect only of the property of males not held in coparcenary and not disposed of by will. ' Thus the scope of the Act is limited.
It governs succession only to the separate property of a Hindu male who dies intestate.
It does not alter the law as regards the (2) ; 498 devolution of any other kind of property owned by a Hindu male and does not purport to regulate succession to the property of a Hindu female at all.
It is to be noted that the Act ' does not make these four relations statutory heirs under the Mitakshara Law under all circumstances and for 'all purposes; it makes them heirs only when the proportion is a male and the property in respect to which it is sought to be applied is his separate property.
" Similar would be the position under the Hindu Woman 's Right to Property Act, 1937.
Section 3(1) of that Act which provides for the devolution of the property reads thus: "When a Hindu governed by the Dayabhaga School of Hindu Law dies intestate leaving any property and when a Hindu governed by any other school of Hindu law or by customary law dies intestate leaving separate property his widow or if there is more than one widow all his widows together shall, subject to the provisions of sub section (3) be entitled i,n respect of property in respect of which he dies intestate to the same share as a son . " From this provision it is clear that Hindu Women 's Right to Property Act, 1937 applies only to the separate property left by a Hindu male.
It does not apply either to the coparcenary property or to the property of a Hindu female.
For the reasons mentioned above these appeals fail and they are dismissed with costs advocates ' fee one set.
V.P.S. Appeals dismissed.

summary:
The rules relating to succession to Stridhana, other than shulka, of a Hindu woman who was married in an approved form of marriage are stated in Yajnyawalkya 's text as: 'her kinsmen take it, if she die without issue '.
The order of succession was elaborated in the.
Mitakshara, which was translated by Colebrooke as: (i) unmarried daughter, (ii) married daughter who is unprovided for, (iii) married daughter who is provided for, (iv) daughter 's daughter, (v) daughter 's son, (vi) son, (vii) son 's son, and (viii) if there be none of these the srridhana then goes to her hugband, and if he is dead, to the husband 's heirs.
In the present case., a Hindu widow, who was married in an approved form of marriage died leaving stridhana which was not shulka.
She did not leave behind any of the heirs mentioned in items (i) to (vii) but there was a pre deceased son 's daughters.
On the question of preference between the son 's daughters and her husband 's brothers son (who was the husband 's nearest heir).
HELD: (i) Colebrooke 's translation has been accepted by the Judicial Committee and Hindu scholars as bringing out correctly the meaning of the relevant passages in the Mitakshara, and it is now well settled that the ' stridhana of a Hindu woman governed by Mitakshara passes in the order mentioned in the Mitakshara.
[496 H; 497 A C] Bhirnacharya Bin Venkappacharya vs Ramcharya Bin I.L.R. , referred to.
(2) The contention that the expression 'without issue ' in Yajnywalkya was elaborated as 'leaving no progeny ' by the Mitakshara and that therefore the heirs (i) to (vii) should be understood as only illustrations of the expression 'progeny ' and hence, son 's daughters are not excluded from the expression 'progeny ', is opposed to the commentaries of Narada, Gautama and other commentators, and to the decisions of the Judicial Committee and the High Courts rendered for over a century.
[497 E H] (3) In the matter of succession to stridhana propinquity is neither the sole nor a principal test as shown by the fact that daughter 's daughter and daughter 's son succeed in preference to the son.
[498 B C] 490 (4) The rule of interpretation that the masculine includes the feminine and therefore 'softs son ' includes 'softs daughter ', is inapplicable, because, 'daughter 's daughter ' is shown taking precedence over 'daughter 's son '.
[489 E] (5) The Hindu Women 's Rights tO Property Act, 1937, applies to the separate property left by a Hindu male and not to the property of a Hindu letoale.
[500 C D] Kumar Raghava Surendra Sahi vs Babui Lachmi Kuer, (1939) 1.
L.R. 18 Pat.
590 and Baj Kesserbai vs Huns Raj Morarji & Anr.
L.R. 33 I.A. 176, distinguished.
Annagouda Nathgouda Patil vs Court of Wards, ; , followed.


judgement:
Appeal No. 1360 1966.
Appeal from the judgment and decree dated January 19, 1962 of the Madras High Court in Appeal No. 351 of 1958.
M.C. Chagla, M.K. Ramamurthi, section Sethuratnam, J. Ramamurthy and Vineet Kumar, for the appellant.
V.V. Nair, for the respondent.
456 The Judgment of the Court was delivered by Shah, J.
Palani Gounder 'and his son T.P. Sengottaiah hereinafter collectively called "the defendants" own Survey No. 765 B in Kugallur village.
Kalianna Gounder hereinafter called "the plaintiff" agreed on July 4, 1956 to purchase from the defendants that land for Rs. 12,000.
A memorandum reciting that Rs. 2,000 were paid as advance by the plaintiff to the defendants was executed by t,he plaintiff and the defendants.
The memorandum was written by one Ramamurthy Iyer and the signatures thereon were attested by one Kaliyanna Gounder.
On July 7, 1956, the defendants informed the plaintiff by a letter that, only a sum of Rs. 350 was paid by the plaintiff to the defendants and not Rs. 2,000 as recited in the memorandum, and since 'the balance of Rs. 1,650 which was promised to be paid within three days was not paid, the agreed stood cancelled.
The plaintiff on receipt of the letter instituted an action in the Civil Court for a decree for specific performance of the agreement, and deposited in Court Rs. 10,000 which according to him was the balance of the purchase price due by him.
The defendants filed their written statement contending, inter alia, that they were in urgent need of money, and they had agreed to sell the land to the plaintiff, but the plaintiff paid only Rs. 350 on July 4, 1956, and obtained possession of the memorandum on a representation that he will pay the balance of Rs. 1,650 within three days and since the amount was not paid the agreement was cancelled, and that in any event the agreement having been altered in material particulars, after it was executed, by adding the words: "Clear the debt.
s and execute the sale deed free from encumbrance", the suit was not maintainable.
The Court of First Instance upheld the plaintiff 's claim and decreed the suit for specific performance of the agreement.
In appeal to the High Court of Madras the decree was reversed.
The High Court, held that the plaintiff paid Rs. 350 only on July 4 1956, and on a representation that he will pay the balance of Rs. 1,650 payable as advance obtained possession of the agreement of sale, and the plaintiff not having paid the amount payable by him the suit for specific performance of the agreement was maintainable.
The High Court also held that the agreement was altered in material particulars by adding the covenant relating to "clearance of encumbrance" after the memorandam was executed With certificate granted by the High Court this appeal is preferred by the plaintiff.
Two questions fall to be determined in this appeal; (1) whether the plaintiff paid Rs. 350 only as contended by the defendants 457 on July 4, 1956, and obtained possession of the agreement on a false representation: and (2) whether the memorandum was altered in material paticulars after execution, and was on that account discharged ? The plaintiff in his statement before the Court asserted that he paid the full amount of Rs. 2,000 on July 4, 1956 to the defendants.
He was supported by his witness Ramamurthy Iyef the writer of the document.
On the side of the defendants there is the evidence of T.P. Sengottaiah who asserted that only Rs. 350 were paid at the time of the execution of the memorandum and when the balance was demanded the plaintiff promised to pay the same within three days.
He also stated that the amount was not paid within three days as promised and on that account the agreement was cancelled.
His testimony was supported by the attesting witness.
The learned Trial Judge accepted the testimony of the plaintiff and his witness Ramamurthy Iyer.
The High Court was of the view that the testimony of T.P. Sengottiah and the attesting witness should be preferred.
In our judgment the dispute may be resolved by considering the conflicting testimony of the witnesses in the light of broad probabilities.
The memorandum expressly recites that the defendants "have received Rs. 2,000 as advance" and "within sixty days from today" the plaintiff "should pay the balance of the sale price and execute the sale deed.
Failing that, besides losing the advance amount, nothing is binding as per the agreement".
The memorandum containing a recital that Rs. 2,000 were received by the defendants as advance was delivered to the plaintiff.
The plaintiff is an illiterate agriculturist, whereas the defendants are educated people, and the second defendant was at the material time President of the Local Panchayat.
The case of the defendants that they relied upon the bare word of the plaintiff that he will pay the balance of Rs. 1,650 within three days and on that representation they parted with the memorandum is, in our judgment, unreliable.
There was no relation between the plaintiff and the defendants which placed the former in a position of trust or confidence.
If the defendants were willing to execute an agreement with the recital that the amount of Rs. 2,000 was received, though in fact it was not so received, they would have insisted upon making an endorsement at the foot of the agreement that only Rs. 350 were paid and the plaintiff had obtained extension of time for payment of the balance within three days.
In any event they would have, when they parted with the memorandum, insisted upon some writing from the plaintiff that he had paid only Rs. 350 and not Rs. 2,000 as recited in the memorandum.
458 The High Court was of the view that the plaintiff was unable to show that he could procure a sum of Rs. 2,000 for payment as advance to the defendants and that there was no independent evidence regarding the actual payment of Rs. 2,000.
But the burden of proving in the circumstances of the case, that Rs. 2,000 were not paid lay heavily upon the defendants.
Again, there is strong evidence to indicate that the plaintiff had at his disposal a substantial amount on which he could have drawn.
On July 14, 1956, exactly ten days after t, he date on which the agreement was entered into, the plaintiff deposited in Court a sum of Rs. 10,000 in the action for specific performance commenced by him.
If the case of the plaintiff depended merely upon his oral testimony for payment of Rs. 2,000, absence of independent evidence evidencing payment may have some value as supporting the case of the defendants.
But when there was an express recital in the agreement that a sum of Rs. 2,000 was paid by the plaintiff and it was received by the defendants, it was not necessary for the plaintiff to lead evidence as to the source from which he obtained the money.
The High Court observed that the plaintiff did not reply to the notice dated July 7, 1956.
But it was the plaintiff 's case that he received the notice on July 14, 1956, and on the same day he instituted the suit.
Failure to reply to the notice cannot therefore be a circumstance of any value in the present case.
It was also observed by the High Court that there was no particular reason for the defendants to resile from the terms of the agreement within three days of its execution, and set up a false plea, and that in "such cases evidence is given to prove that it was a temptation of a better offer that induced the party to resile from the agreement".
The plaintiff did state in his evidence that his pangalis who were inimical to him had made an offer of Rs. 16,000 for the property, and because of that offer the defendants resiled from the agreement.
In the view of the High Court this part of the case of the plaintiff could not be believed because it was not expressly pleaded in the plaint.
But the plaintiff did plead in paragraph 6 of the plaint the defendants had "with the evil influence and instigation of Karuppa Gounden, Pongia Goundar and Appachi Gounder of the place who are now planning to have the suit properties for themselves are now evading to rescind the contract".
This, in our judgment, is a sufficient plea, if it was necessary to plead it, in support of the case which the plaintiff sought to make out.
The High Court discarded the testimony of Ramamurthy Iyer on the view that he was inimical to the defendants.
We have been taken through his evidence and we see no justification for hold 459 ing that his testimony could not be believed.
If Ramamurthy Iyer was an enemy of the defendants, it is very unlikely that they would permit him to write out an important document at their residence.
The broad probabilities of the case strongly support his testimony.
Having carefully considered the evidence we are of the view that the story of the defendants that only Rs. 350 were paid to them on July 4, 1956, and not Rs. 2,000 as recited in the memorandum is untrue and has been put up as an excuse for resiling from the agreement.
The second plea that there was an alteration in the memorandum in material particulars cannot also be sustained.
The original document is not before us, but from the cross examination of the writer and the plaintiff 's witnesses and also from the testimony of T.P. Sengottiah and his witnesses it does not appear that the words "Clear the debts and execute the sale deed free from encumbrance" were written in a cramped style.
This sentence occurs immediately before the Schedule of property sold and after the first three paragraphs of the convenants of the memorandum.
There was no reason for the writer to leave any space which could be availed of to add this sentence after the document was executed.
There is no denial that the sentence has been written by Ramamurthy.
It is true that the High Court has observed that the ink in which the sentence was written appeared to be slightly different in shade from the rest of the document.
But Ramamurthy Iyer has deposed that it was not true that the portion in the, agreement relating to the encumbrance was written subsequent to the agreement in collusion with the plaintiff.
He explained that the ink in his fountain pen was exhausted when he wrote with one pen, and he wrote the portion after reading the document with another fountain pen, and since the portion was written in a hurry the ink may have differed.
According to him he did not notice any difference in ink.
There is no reason to disbelieve the testimony of Ramamurthy Iyer.
Even if it be assumed that the sentence regarding encumbrance was written after the deed was executed it will not invalidate the deed.
The second defendant and his witnesses have admitted that there was no discussion at the time of the writing and execution of the agreement about the encumbrances upon the land.
There is not even evidence that there were any encumbrances subsisting on the land.
Ordinarily when property is agreed to be sold for a price, it would be the duty of the vendor to clear it of all the encumbrances before executing the sale deed.
The alteration, if any, cannot therefore be regarded as material.
As observed in 460 Halsbury 's Laws of England, Vol. 11, 3rd Edn., article 599 at 368: "A material alteration is one which varies the rights, liabilities, or legal position of the parties as ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally expressed,or reduces to certainty some provision which was origInally unascertained and as such void, or may otherwise prejudice the party bound by the deed as originally executed.
The effect of making such an alteration, without the consent of the party bound, is exactly the same as that of canceling the deed.
" It is also stated in article 604 at pp.
370 and 371: "An alteration made in a deed, after its execution, in some particular which is not material does not in any way affect the validity of the deed; an alteration is not material which does not vary the legal effect of the deed in its original state, but merely expresses that which was implied by law in the deed as originally written, or which carries out the intention of the parties already apparent on the face of the deed, provided that the alteration does not otherwise prejudice the party liable thereunder.
" This rule has been applied by the Privy Council in Nathu Lal and Ors.
vs Mussamat Gomti Kuar and Others(1).
The Judicial Committee observed in that case at p. 331: "A deed is nothing more than an instrument or agreement under seal; and the principle of those cases is that any alteration in a material part of any instrument or agreement avoids it, because it thereby ceases to be the same instrument." The Judicial Committee observed at p. 333: "A material alteration has been defined in the rule as one which varies the rights, liabilities or legal position of the parties ascertained by the deed, etc.", and after applying that test they held that the alteration in that case was not material in the sense of altering the rights, liabilities or legal position of the parties or the legal effect of the document.
(1) L.R. 67 I.A.318.
461 Since the defendants were liable to clear the encumbrances, if any, subsisting on the land before executing the sale deed, assuming that the covenant was incorporated after the execution of the deed, it cannot be regarded as a material alteration on that account, for it does not alter the rights or liabilities of the parties or the legal effect of the instrument.
The appeal is therefore allowed and the decree passed by the High Court is set aside and the decree of the Trial Court is restored with costs in this Court and in the High Court.
R.K.P.S. Appeal allowed.

dataset_name: IN-Abs

summary:
The appellant agreed on July 4, 1956 to purchase certain lands from the respondents for Rs. 12,000.
A memorandum reciting that Rs. 2,000 were paid as advance by the appellant to the respondents was executed by both parties.
Three days later the respondents informed the plaintiff by a letter that only a sum of Rs. 350 was paid by the appellant and not Rs. 2,000 as 'recited in the memorandum and since the balance of Rs. 1,650 which was promised to be paid within three days was not paid, the agreement stood cancelled.
The appellant thereafter immediately instituted a suit for a decree for specific performance of the agreement and deposited in court a sum of Rs. 10,000 on account of the balance purchase price due from him.
In their written statement the respondents claimed that Rs. 1,650 out of Rs. 2,000 not having been so paid, the agreement was cancelled; and that in any event the agreement having been altered in material particulars after its.
execution by the addition of the words; "clear the debts and execute the sale deed free from encumbrances", the suit was not maintainable.
The Trial Court upheld the: appellant 's claim and decreed the suit.
The High Court in appeal, reversed the decree.
On appeal to this Court, HELD : Allowing the appeal: (i) On the evidence and in view of the express recital in the agreement that a sum of Rs. 2,000 was paid by the appellant and received by the respondents, the respondents" story that only Rs. 350 was in fact paid was untrue and had been put up as an excuse for resigning from the agreement.
(ii) Even assuming that the words in question were introduced in the memorandum after its execution since the respondents were liable to clear any encumbrances subsisting on the land before executing the sale deed, cannot be regarded as a material alteration for, it did not alter the rights or liabilities of the parties or the legal effect of the instrument [463 A] Nathu Lal and Ors.
vs Mussamat Gomti Kuar and Others, L.R. 67 I.A. 318; referred to.


judgement:
Appeals Nos. 1957 and 1958 of 1966.
Appeal by special leave ,from the judgment and order dated September 6, 1965 of the Allahabad High Court, Lucknow Bench in First Civil Appeals Nos. 62 and 71 of 1957.
H.R. Gakhale, M.M. Kshatriya and G.S. Chatterjee, for the.
appellant (in both the appeals).
M.C. Chagla, A.K. Verma, B. Datta and 1.
B. Dadachanli, for the respondents (in both the appeals).
The Judgment of the Court was delivered by Shah, J.
Ranjit Singh was a director of Ranjit Singh & Sons.
Ltd. which acted as a Managing Agent of Shri Vikram Cotton Mills Ltd. Shri Vikram Cotton Mills Ltd. hereinafter called the Company, opened a cash credit account with the Punjab National Bank, and to secure repayment of the balance due at the foot of the account on June 27, 1953 four documents were executed three by the Managing Agents on behalf of the Company and one by Ranjit Singh.
The three: documents executed by the Managing Agents were (i) promissory note for Rs. 13,00,000/ payable with interest at the rate of 21/2% over the Reserve Bank of India rate with a minimum rate of 6% per annum until payment; (ii) a deed of hypothecation of goods described in the Schedule annexed to the document; (iii) a letter to the Bank agreeing that during the continuance of the agreement evidenced by the letter of hypothecation, the Company will remain solely responsible for all loss, damage or deterioration of the securities delivered to the Bank caused by theft, fire, rain, robbery.
464 dacoity or by any other cause whatsoever.
Ranjit Singh executed a deed called an "agreement of guarantee" agreeing to pay on demand all monies which may be due as "ultimate balance" from the Company to the Bank.
In December 1953 the Company closed its business.
The stocks pledged were disposed of by the Bank and the amount realised was credited in the account of the Company.
The Bank claimed that an amount of Rs. 2,56,877/12/6 remained due at the foot of the account.
Some creditors of the Company had in the meantime filed petition in the High Court of Allahabad for an order winding up the Company.
On February 22, 1956, a scheme of composition was settled among the creditors that the total liability of the Company was Rs. 34,45,197 11 2 and the total assets of the Company were Rs. 5,00,000, that the Company was desirous of confirming "a lease agreement" and that in order to safeguard the rights and interests of the Company and its unsecured creditors the Company had entered into an agreement with the lessee.
The scheme was sanctioned by order of the High Court of Allahabad dated May 21, 1956 under section 391 of the Indian after rejecting the opposition of the Bank, The Bank then filed a suit in the Court of the Civil Judge.
Malihabad, Lucknow, against the Company and Ranjit Singh for a declaration that on the date of the suit a sum of Rs. 2,56,877 12 6 was due against the Company and for a decree for payment of that amount against Ranjit Singh with costs and interest pendente lite.
In a joint written statement it was contended, inter alia, that Ranjit Singh was "only a guarantor and not a co debtor" and that he could be made liable only in case of default by the Company, and since the Company had made no default the suit against Ranjit Singh was not maintainable.
Certain preliminary issues were raised by the Trial Judge at the hearing of the suit out of which the following are relevant: "(1) Whether the plaintiff (Bank) is not entitled to file this suit as against the defendant No. 1 (the Company) without obtaining the leave of the Company Judge as alleged ? If so, its effect '? (2) Whether the Court has no jurisdiction to decide on the merits of the plaintiff 's claim in view of the facts as alleged in para 12(A) of the written statement ? If so, its effect ? (3) Whether the suit against defendant No. 2 (Ranjit Singh is not maintainable as pleaded under Paras 7, 13 and 14 of the written statement ?" 465 The Trial Court held that the suit was not maintainable against the Company without obtaining leave of the Company Judge, and also that the Court had No. jurisdiction to adjudicate upon the merits of the Bank 's claim, for under the scheme the Board of Trustees were to scrutinise the claim and their decision was final.
In dealing with the claim against Ranjit Singh the Court head that he had not made any default in payment of the dues and under the terms of guarantee the suit was premature against him as well.
The Court accordingly dismissed ' the suit.
Two appeals were preferred to the High Court of Allahabad against the judgments in the suit.
The High Court held that a scheme of composition between the Company and its creditors confirmed by the Court had statutory operation and was binding on all creditors regardless of the fact whether any of them agreed or not; that according to the scheme the Bank became an unsecured creditor for the amount remaining due after sale of the pledged goods, that under cl. 12 of the Scheme the amount payable to the unsecured creditors shall be the principal amount due to them determined by the Board of Trustees, that it was for the, Board of Trustees to determine the amount that remained payable to the Bank, that though under cI. 16 of the scheme a creditor may file suits and take appropriate steps, for the limited purpose of establishing their claims the suit had to be filed with the leave of the; Court, and that the suit of the Company without obtaining leave of the Court was not maintainable.
The High Court further held that Ranjit Singh had executed an indemnity bond, and that even assuming that Ranjit Singh was a surety it was expressly provided by the terms of the: bond executed by him that the guarantee was only for ensuring payment of the "ultimate balance" remaining due to the Bank on such cashcredit account upto the specified limit, and therefore Ranjit Singh was only to pay "the ultimate balance" which might be found due against the Company after "taking into account all dividends, compositions and payments etc as payments in gross towards the debt", that the Bank 's dues could be recovered from Ranjit Singh upon default in payment by the Company of the ultimate balance after scrutiny by the Board of Trustees, and that the "proper stage for commencing a suit against Ranjit Singh was after the ultimate liability of the Company was determined by the Board of Trustees and the Company committed default in payment".
The High Court accordingly confirmed the decree of the Trial Court even in favour of Ranjit Singh With special leave granted by this Court, these two appeals have been preferred by the Bank.
The Bank claimed a mere declaration against the Company and not a decree for payment of the amount due Section 391 of the , insofar as it is material provides: "(1 ) Where a compromise or arrangement is proposed 466 (a) between a company and its creditors or an class of them; or (b) between a company and its members or any class of them; the Court may, on the application of the Company or of any creditor or member of the Company, or, in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Court directs.
(2) If a majority in number representing threefourths in value of the creditors, or class of creditors, or members, or class of members, as the case may be, present and voting either in person or, where proxies are allowed by proxy, at the meeting, agree to any compromise or arrangement, the compromise or 'arrangement shall, if sanctioned by the Court, be binding on all the creditors, all the creditors of the class, as the case may be, and also on the, company, or, in the case of a company which is being wound up, on the liquidator and contributories of the company: Section 392(1) provides: "Where a High Court makes an order under section 391 sanctioning a compromise or an arrangement in respect of a company, it (a) shall have power to supervise the carrying out of the compromise or arrangement; and (b ) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement.
" In the present case a meeting of creditors of the Company was held in which a majority in number representing three fourths in value of the creditors agreed to the scheme of composition and the court rejected objection raised by the Bank and sanctioned the scheme The scheme was binding upon the Bank and the rights and obligations of the Bank had to be worked out under the scheme.
467 In reaching its conclusion that the bond executed by Ranjit Singh in favour of the Bank was of the nature of a contract of ' indemnity and not a contract of guarantee, the High Court was impressed by the circumstance that the Company was not a party to the bond, and that the bond was only a bilateral agreement between the Bank and Ranjit Singh Section 124 of the Indian Contract Act defines a "contract of indemnity" A contract by which one party promises to save the other from loss caused to him by the conduct of the promiser himself, or by the conduct of any other person, is called a "contract of indemnity".
Section 126 defines a "contract of guarantee".
It states: "A 'contract of guarantee ' is a contract to perform the promise, or discharge the liability, of a third person in case of his default.
The person who gives the guarantee is called the 'surety ': the person in respect of whose default the guarantee is given is called the 'principal debtor ', and the person to whom the guarantee is given is called the 'creditor '.
A guarantee may be either oral or written".
A promise to be primarily and independently liable for another person 's conduct may amount to a contract of indemnity A contract of guarantee requires concurrence of three persons the principal debtor, the surety and the creditor the surety undertaking an obligation at the request express or implied of the principal debtor.
The obligation of the surety depends sub ' stantially on the principal debtor 's default; under a contract of indemnity liability arises from loss caused to the promisee by the conduct of the promisor himself or by the conduct of another person In the present case the Company did not execute the bond But the bond executed by Ranjit Singh was one of four documents executed on June 27, 1953 It was part of the scheme to ensure payment of the amount due at the foot of the cash credit account in favour of the Bank The Company executed by its managing agents (i) a promissory note; (ii) a deed of hypothecation; and (iii) a letter assuring the Bank that the Company shall remain solely responsible for all loss, damage or deterioration to the stocks hypothecated with the Bank.
The Bank also insisted upon a promise by some other person to pay the debt, and as a part of the same arrangement Ranjit Singh executed the bond on which the suit is field.
The bond was expressly called an "agreement of guarantee": it was also recited therein that Ranjit Singh guaranteed to the Bank, payment on demand of all monies which may at any time be due to the Bank from the Company on the general balance of that account with the Bank, 468 that the guarantee was to be a continuing guarantee for the ultimate balance which shall remain due to the Bank on such cashcredit account.
In the written statement it was admitted that Raniit Singh was a guarantor.
The bond, it is true, did not expressly recite that the Company was the principal debtor; it is also true and the Company did not execute the bond.
But a contract of guarantee may be wholly written, may be wholly oral, or may be partly written and partly oral.
The documents which secured repayment of the Bank 's claim at the foot of the cashcredit account were executed simultaneously: the bond executed by Ranjit Singh was one of them and the conduct of Ranjit Singh and the Company indicates that Ranjit Singh agreed to guarantee payment of the debt due by the Company.
We hold, therefore, that the Bank, the Company and Ranjit Singh were parties to the agreement under which for the dues of the Company, Ranjit Singh became a surety.
The extent of the liability of Ranjit Singh under the terms of the bond must, therefore, be determined.
Section 128 of the Indian Contract Act provides that the liability of the surety is coextensive with that of the principal debtor, unless it is otherwise provided by the contract.
It is necessary, therefore, to consider whether in the terms of the bond there is anything which shows that the liability of the surety is not co extensive with that of the principal debtor.
Certain clauses of the bond are relevant: "( 1 ) In consideration of your Bank at my request allowing an accommodation by way of cash credit and D/D limits to M/s. S.V. Cotton Mills Ltd , at Lucknow Branch, I, in my personal capacity hereby guarantee to you the payment on demand of all monies which may at any time be due to you from M/s. S.V. Cotton Mills Ltd., on the general balance of that account with your Bank.
(2) I declare that this guarantee shall be continuing guarantee and shall not be considered as cancelled or in any way affected by the fact that at any time the said cash credit and D/D account may show no liability against the borrower, or may even show a credit in favour of the borrower, but shall continue in operation in respect of subsequent transactions". "(4) I further declare that all dividends, compositions, payments received by you from the said borrower or any other person or persons liable or his or their representatives shall be taken and applied as payment in gross without any right 469 on the part of myself or my representative to stand in your place in respect of or to claim the benefit of any such dividends, compositions or payments, until full amount of all your claims against the said borrower or his/their representatives which are covered by this, guarantee shall have been paid and that this guarantee shall apply to and secure ultimate balance which shall remain due to you on such cash credit account upto the extent of Rs. 13,00,000. "(8) I also agree that the Bank shall be entitled to recover its entire dues under the said cash credit account from my person or property upon default in payment by the said borrower".
By clause 4 it is expressly stipulated that the bond secured "the ultimate balance" remaining due to the Bank.
Therefore, unless and until the ultimate balance is determined no liability on Ranjit Singh to pay the amount arises, and it is common ground that the ultimate balance due is not determined.
The suit was for a decree for Rs. 2,56,877/12/6, but the claim against Ranjit Singh could be decreed only for the amount remaining due as the ultimate balance under cls.
4 and 5 of the bond.
We are, however, unable to agree with the High Court that the suit filed was premature.
The Bank was under the terms of the bond executed by Ranjit Singh entitled to, claim at any time the money due from the Company as well as Ranjit Singh under the promissory note and the bond.
The suit could not, therefore, be said to be premature.
The High Court instead of dismissing the suit should have stayed it till "the ultimate balance" due to the Bank from the Company was determined.
We deem it necessary to observe that a binding obligation created under a composition under section 391 of the Companies.
Act, 1956, between the; Company and its creditors does not affect the liability of the surety unless the contract of suretyship otherwise provides.
As observed in Halsbury 'section Laws of England, Vol. 6, 3rd Edn., article 1555 at p. 771: "A scheme need not expressly reserve the rights of any creditors against sureties for debts; of the company, as such rights are unaffected by a scheme".
It was held in Re. Garner 's Motors Ltd.(1) that the scheme when sanctioned by the Court has a statutory operation and the scheme does not release other persons not parties.
to the scheme from their obligations. ' (1) up.
CI/70 18 470 The High Court, in our judgment, should have stayed the suit and after "the ultimate balance" due by the Company was determined the Court should have proceeded to decree the claim according to the provisions of cl. 4 of the bond.
We accordingly modify the decree passed by the Trial Court and declare that the rights of the Bank against the Company are governed by the scheme: sanctioned by the High Court of Aliahabad in Company Case No. 16 of 1956 by their judgment dated May 21, 1956.
Liability of Ranjit Singh being only for payment the ultimate balance ' which remains due on the cash credit account with the Bank in favour of the Company.
The Court will, when such ultimate balance is determined, proceed to pass a decree in favour of the Bank.
Ranjit Singh has filed an affidavit in this Court that in accordance with the scheme the total amount due to the Bank was determined at Rs. 41,536/7/3 as the ultimate balance and a cheque for Rs. 35,721 was sent to the Bank on October 6, 1956 being 25% plus the other pro rate payments allowed 'by the Trustees to creditors, but the Bank did not cash the cheque.
Thereafter by letter dated 'October 28, 1966, the Bank requested that a fresh cheque be issued to them.
Accordingly a fresh cheque for Rs. 38,047 46 was issued to the Bank on November 5, 1966, comprising Rs. 35,721 on the basis of the old cheque plus Rs. 2,326 46 sanctioned for pro rate payment to the Bank by the Trustees on November 3, 1966 at the rate of 50% of the then balance due.
Thereafter another cheque for Rs. 1,744.50 being 50% of the amount then due to the Bank was also forwarded to the Bank on January 29, 1968, in pursuance of another pro rate payment resolution passed by the Trustees and the balance now due to the Bank out of the original amount is Rs. 1,744.09 only.
We are unable to investigate the correctness of these averments.
The decree passed by the High Court is set aside and the suit be remanded to the Trial Court to be disposed of in the light of the observations made in this judgment.
There will be no order as to costs in the High Court and in this Court.
Costs in the Trial Court will be costs in the suit.
R.K.P.S. Suit remanded.

summary:
The first respondent company opened a cash credit account with the appellant bank and on June 7, 1953 to secure repayment of the balance due at the foot of the account the first respondent company executed three documents through its managing agents i.e. a promissory note, a deed of hypothecation and a letter assuring the appellant bank that the company would remain solely responsible for all loss, damage or deterioration of the stocks hypothecated with the bank.
On the same day R a Director of the managing agents executed a bond called "agreement of guarantee ' agreeing to pay on demand all monies which may be due as the "ultimate balance" from the company to the bank.
In December, 1953 the company closed its business.
The stocks pledged were disposed of by the bank and the amount realised was credited in the company 's account.
A balance of approximately Rs. 2.56 lakhs remained due at the foot of the account.
Some creditors of the company in the meantime filed a petition for winding up the company.
On February 22, 1956 a scheme of composition was settled among the creditors and was later sanctioned by the High Court On May 21, 1956 under section 391 of the after rejecting the opposition of the appellant bank.
The bank then filed a suit against the company and R for a declaration that on the date of the suit a sum of over Rs. 2.56 lakhs was due against the company and for a decree for payment of the amount against R.
The trial court dismissed the suit and on appeals filed by both the parties the High Court held that the scheme having been confirmed by the court, had statutory operation and was binding on all creditors including the bank; the bank had become an unsecured creditor for the amount remaining due after sale of the pledged goods and it was for the board of trustees under the Scheme to determine the amount for payment to the bank.
The court also held that the suit against the company without obtaining leave of the court was not maintainable.
It further held that R had executed an indemnity bond and that even assuming he was a surety under the terms of the bond he was only responsible for ensuring payment of the "ultimate balance" which still had to be determined.
The High Court accordingly confirmed the decree of the trial court and held that the suit against R was premature.
On appeal to this Court, HELD: (i) The suit must be remanded to the trial court to determine "the ultimate balance" and for disposal according to law.
463 The appellant bank was entitled to claim at any time the money due from the company as well as from R. under the promissory note and the bond.
The suit could not therefore be said to be premature.
The High Court instead of dismissing the suit should have stayed it till "the ultimate balance" due to the bank from the company was determined.
[471 E F] (ii) The binding obligation created under a composition under section 391 of the , 'between the company and its creditors does not affect the liability of the surety unless the contract of suretyship otherwise provides.
[471 F G] Halsbury 's Laws of England, Vol.
63 rd.
Edn., article 1555 at p. 771; Re.
Garner 's Motors Lid,. ; referred to.
(iii) The bond executed by R was one of the four documents executed on the same day and was part of the scheme to ensure payment of the amount found due to the Bank.
Although the bond was not also executed by the company, the 'fact that it was executed simultaneously with the other documents and the conduct of R as well as the company indicated that R agreed to guarantee payment of the debt due by the company.
It must be held, therefore that the Bank, the company and R were parties to the agreement under which for the dues of the company, R became a surety.
[470 A C]


judgement:
Civil Appeal No. 1563 Appeal from the judgment and decree dated December 23.
1960 of the Madhya Pradesh High Court in First Appeals Nos. 67 :and 70 of 1957.
Naunit Lal and Sharat Chandra Chaturvedi, for the appellant.
N. Shroff, for respondent No. 1.
The Judgment of the Court was delivered by Shah, J.
Thakur Randhirshah, Jagirdar or Sonpur Jagir executed a deed dated August, 5, 1949 in favour of Ram Narain Mahto hereinafter called 'the plaintiff relating to sale of timber, for Rs. 51,501 and received Rs. 15,000 in part payment.
On February 19, 1951, the Forest Officer of the State of Madhya Pradesh prevented the plaintiff and the Jagirdar from cutting the trees.
On March 31, 1951, the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (No. 1 of 1951) was brought into force and by virtue of that Act the interest of the Jagirdar in the estate vested in the State.
On June 14, 1954, the plaintiff instituted an action in the Court of the Aditional District Judge, Chhindwara, for a decree for Rs. 1,50,000 for breach of the contract of sale against the State of Madhya Pradesh and against the Jagirdar.
There were four heads of the claim for compensation: (i) Rs. 21,375 . being the value of 4275 logs of timber which were cut but which the plaintiff could not remove; (ii) Rs. 30,000 . for 6,000 logs of timber which though cut were not found on the spot and some of which were either burnt or stolen; (iii) Rs. 30,000 on account of 60,00 logs of timber from the standing timber of four villages which had not been cut: and (iv) Rs. 75,000 for 15,000 logs of timber which the plaintiff could not cut from the remaining villages.
447 The plaintiff claimed compensation for the logs of timber at the rate of Rs. 5 per log in the aggregate.
The State of Madhya Pradesh contended that the Jagirdar had started illegal cutting for which proceedings were taken against him and that he was prevented from cutting any timber; that sometime thereafter the logs of timber lying in the forest were 'hammermarked" and the Jagirdar was permitted to remove the logs till March 31, 1953 subject to certain conditions, e.g. obtaining malguzari passes for the transit and submitting weekly statement of the removal, that the agreement dated August 5, 1949, being unregistered was inadmissible in evidence, and created no title, mat in any event the deed could not be enforced against the State 'because of the vesting of the Jagir under the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, in the State; that the contract created a mere personal liability enforceable against the Jagirdar; and that the State was not the successor in interest of the Jagirdar but claimed a right to the Jagir under a statute.
The Trial Court held that the plaintiff was entitled to value of the logs of timber described under the four heads of his claim, at the rate of Rs. 1/8/ per log.
Accordingly the trial Court determined the compensation payable to the plaintiff at Rs. 46,912 and after giving credit for Rs. 36,000 payable by the plaintiff to the Jagirdar and 'to which the State became entitled, passed a decree for the balance of Rs. 10,912 and interest thereon.
The plaintiff and the State 'appealed to the High Court.
The High Court agreed with the Trial Court that the rate per log could not exceed Rs. 18/ .
The High Court disallowed the claim of the plaintiff for items (ii), (iii) and (iv) and for item (i) the High Court allowed Rs. 3,712 being the value of 2475 logs of timber which had not been removed.
The High Court held that out of the amount awarded nothing was liable to be deducted towards the alleged arrears due to the Jagirdar.
The plaintiff appeals to this Court with certificate granted by the High Court.
Counsel for the plaintiff urged that the Courts below were in error in holding ( 1 ) that the rate per log of timber was Rs. 1/8/ ; (2) that the High Court erred in disallowing compensation for 6000 logs of timber which were cut and appropriated by the plaintiff but which were on account of negligence of the servants of the State either burnt or stolen; (3) that the High Court erred in disallowing compensation for items (iii) and (iv) being the value of logs of timber which the plaintiff was entitled to, but could not cut because of the restrictions imposed by the State.
On the first plea not much need be said.
The Trial Court as well as the High Court, on a consideration of the evidence held 448 that the value of a log of timber did not exceed Rs. 18/ .
That is a concurrent finding of fact and this Court will nor interfere with that finding, unless it ' is shown to be based on no evidence or is grossly erroneous or perverse.
No such attempt is made before us.
On the second plea also the plaintiff 's claim must , fail.
The evidence led by the plaintiff relating to the cutting of 6000 logs of timber and appropriation thereof is vague, and is not supported by reliable evidence.
The books of account and the registers maintained by the Jagirdar were not tendered in evidence.
It was said that they were burnt.
The High Court has disbelieved the story that the books of account and registers were burnt and we see no reason to disagree with that finding.
The plaintiff himself had no personal knowledge about the destination of the logs of timber; he merely repeated what the Jagirdar 's men had told him.
He admitted that out of the logs of timber which were cut, 4500 logs were "hammer marked" by the Forest Department and he was asked to remove them by the end of March 1953.
The testimony of witnesses Badrinarayan P.W. 4, Ramlal P.W. 5, and Ramkesh P.W. 7 was found by the High Court to be unreliable.
We have been taken through the record of the evidence by counsel for the plaintiff and we see no reason to disagree with the view which appealed to the High Court.
The second claim must also fail.
Then remain the claims for items (iii) and (iv) in the plaint.
The logs of timber under these: claim were admittedly not cut.
There were standing trees.
The relevant terms of the deed dated August 5, 1949, may, to appreciate the claim of the plaintiff, be read: "Deed of agreement in respect of selling of timber of jungles of Sonpur Jagir.
Deed of agreement executed by Shri Thakur Randhirshah, Jagirdar of Sonpur . in favour of Bhai Ram Narayanji Mahto, contractor of timber to the following effect : "I, the executant, have already taken Rs. 15,000 . from the person, in whose favour the deed I have of agreement has been executed, of entered into a contract in respect of selling timber, after getting logs 2.
feet or more than that in girth cut from my below mentioned 9 villages for Rs. 51,501 .
and have Sold the same subject to the following conditions : 449 9 villages, timber of which has been sold by me, are as follows : (then follow the names of nine villages.) In respect of cutting, 1 the executant, shall cut wood at my expenses and the same will be supplied to you m the jungle.
In respect of cutting (wood), 1, the executant shall be cutting wood from the below mentioned jungles in this way : (1) I shall supply wood from the jungles of Bambani, Kosami and Rajola Khapadhanna in first two years (i.e. from August 1949 to July 1951).
(2) I shall supply wood from Gotikhere and Harai from August 1951 to July 1952.
(3) I shall supply wood from Dulhadeo Baratmari and Budena from August 1952 to July 1953.
(4) I shall supply wood from Sejwara Khalan from August 1953 to 1954.
In respect of transport, if there is any delay in transporting contractor 's wood during that period, the executant, shall extend the time up to 6 months so as to complete the transportation.
(Then follows the manner in which amount of Rs. 36,501 was to be paid.) Wood sold does not include the trees on the bank of the river or padao or any such place, which are prohibited to be cut according to law.
The wood of those places has not been sold.
Under the deed all trees standing in the forests in the nine villages were not agreed to be sold: it was provided that trees with logs of "2 feet or more in girth" were to be cut and the logs were to be supplied in four different periods set out in the deed.
The 1 deed created by its own force no rights in the standing trees, for the Jagirdar was to cut the trees at his expense, and to supply the logs.
450 By section 3 of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, (1 of 1951), msolar as it is relevant,.
it is provided: "(1) Save as otherwise provided in this Act, on and from a date to be specified by a notification by the State Government in this behalf, all proprietary rights in an estate, mahal, alienated village or alienated land, as the case may be, in the area specified in the notification, vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purpose of the State free of all encumbrances.
Section 4 provides, insofar as it is material: "(1) When the notification under Sec. 3 in respect of any area has been published in the gazette, then, notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force and save as otherwise provided in this Act, the consequences as hereinafter set forth shall, from the beginning of the date specified in such notification . ensue, namely : (a) all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), grass land, scrub jungle, forest, trees, .
shall cease and be vested in the State for ' purposes of the State free of all encumbrances; The relevant provisions of the may also be noticed.
Section 2(7) of the defines "goods" as meaning "every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached_ to or forming part of the land which are agreed to be severed before sale or under the contract of sale".
Trees from which logs of timber were agreed to be cut and sold are things attached to or forming part of the land.
The trees were agreed to be severed under the contract of sale.
A contract for sale of logs is doubtless a contract for sale of goods.
But in view of the terms of the deed the contract was not for sale of ascertained goods.
Only logs with a girth not less than 2 ' were to 451 be supplied after the trees were cut by the Jagirdar.
This is not a contract under which the trees of the entire forest in a particular village were agreed to be sold.
Goods to be sold were, therefore, unascertained, and it is well settled that a contract for unascertained goods is not a complete sale, but only a promise to sell: Badische Anilin Fabrik vs Hicksan(1) : ' it was said in that case: "Where the goods are not ascertained or may not exist at the time of the contract, from the nature of the transaction, no property in the goods can pass to the purchaser by virtue of the contract itself; but where certain goods have been selected and appropriated by the seller, and have been approved and assented to by the buyer, then the case stands as to the vesting of the property very much in the same position as upon a contract for the sale of goods which are ascertained at the time of the bargain.
" Where a thing is attached to, or forms part of, land at the time of the contract and which is to be severed by the buyer, the property in the thing passes in the absence of a contract to the contrary to the buyer on the severance of the thing from the land.
This is clearly the effect of section 18 of the .
For property to pass, the identity of the thing intended to be delivered must be ascertained, and unless the parties are agreed as to what goods are to pass under the terms of the contract, the property will not pass.
It is essential that the thing should be specific and ascertained in the manner binding upon the parties: unless that be so, the contract cannot be construed as a contract for sale of movable property.
Again under section 21 of the even if there be a contract for the sale of specific goods, but the seller is obliged under the terms of the contract to do something to the goods for the purpose of putting them into a deliverable state, the property passes only when the thing agreed to be done is done and the buyer is informed thereof.
Granting that the contract was for sale of specific goods, that is, it was a contract for Sale of logs out of trees in the forest with a girth of two feet or more, the timber had to be cut and had to be put in a deliverable state.
The Jagirdar did not by the deed sell the trees of his forests.
The plaintiff had no right even to cut the trees.
The logs of timber agreed to be supplied had no existence as individual chattel, until the trees were cut and severed ,from the land, 'and logs of the specifications were separated.
But before the trees were cut and the logs appropriated to the contract, the estate of the Jagirdar vested in the State of Madhya Pradesh.
It is true that the provisions of the , (1) at p. 421. 452 especially sections 18 to 44 are rules of construction of contracts for determining the interest of the parties.
If there be a contract that the property is to pass even before the property is put into a deliverable state, the property may pass.
But in the contract executed by the Jagirdar no such intention appears.
It is not necessary to refer to the large number of cases cited at the Bar. except a few.
In Kutsell vs Timber Operators and Contractors Ltd. (1) under a contract the vendors agreed to Sell and the purchasers agreed to purchase all the merchantable timber growing in a forest in the Republic of Latvia.
Merchantable timber was therein defined to be "all trunks and branches of trees but not seedlings and young trees of less than six inches in diameter at a height of four feet from the ground".
Timber was to be ' cut subject to certain conditions.
After the contract was entered into the Latvian Assembly passed a law by which the forest became the property of the Latvian State and the contract stood annulled and all property and rights of vendors and purchasers in the forest were confiscated.
It was held by the Court of Appeal that the contract was not a contract for the Sale of specific goods in a deliverable state within the meaning of section 18 r. 1 of the Sale of .Goods Act, 1893; that the goods in question were neither identified nor agreed upon; that it was not every tree in the forest which passed, but only those complying with certain measurements not then made; that the timber was not in a deliverable state until the purchasers had severed it and that they could not under the definition in the rule be bound to take delivery of an undetermined part of a tree not yet identified, and accordingly the property in the timber had not passed under section 18 r. 1.
Several cases have arisen in ' this Court in which the breach of claim to a fundamental right of the purchaser who had entered into a contract for purchasing standing trees before the enactment of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, was set up.
These cases may be briefly noticed.
In Chhotabhai Jethabhai Patel & Company vs The State of Madhya Pradesh(2) this Court held that the rights conferred upon "the contractors under agreements with the proprietors of the estates before the date on which the estates vested in the State, under which they were entitled to _pluck, collect and carry away tender leaves, to cultivate, culture and acquire lam, and to cut and carry away teak and timber and other species of trees were merely rights of licence, and that the contractors were not proprietors nor persons having any interest in the proprietary rights through the proprietors, within the meaning of the Act.
The rights of the contractors were also held not to be encumbrances within the meaning of the expression "free from encumbrances in section 3(1) (1) (2) ; 453 of the Act.
The contractors were held entitled to a writ against the State prohibiting the State from interfering with the rights of the contractors under the cointracts which they had entered into with the proprietors.
In that case the Court held that the estate vested in the State by virtue of sections 3 and 4 of the Madhya Pradesh Act, and the right to the trees also vested in the State, but the State had no right to obstruct the contractors in exercise of the rights under the contracts and on that ground a writ of prohibition was issued.
It was held that the contractors had no proprietary rights nor did they possess any interest in the proprietary rights through the proprietors to the trees and the leaves, and on that account the rights of the contractors did not vest in the State.
It was assumed, without indicating the ground on which it was so assumed, that the contractual obligations which were undertaken by the Jagirdars were enforceable against the State after the estate vested in it.
It was observed at p. 483: "The petitioners are neither proprietors within the meaning of the Act nor persons having any interest in the proprietary right through the proprietors.
There is no provision in the Act which extinguishes their rights in favour of the State.
" But this case was dissented from in a later decision of this Court in Shrimati Shantibai vs State of Bombay & Ors.(1).
In that case under an unregistered instrument a contractor was granted a right to take and appropriate all kinds of wood from certain forests in the Zamindari After the enactment of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, all proprietary rights in land vested in the State and the contractor could no longer cut any wood.
The petitioner applied to the Deputy Commissioner and obtained from him an order under section 6(2) of the Act permitting her to work the forest and start cutting the trees.
The Divisional Forest Officer later passed an order directing that her name may be cancelled and materials cut by her forfeited.
A petition for a writ was then moved in this Court.
This Court held that the contractor had no right in the forest or the trees.
The Court observed that if it was a right in immovable property it could not be enforced because there was no registered instrument: if it was claimed that a profess prenatal was transferred by it ,was still unenforceable because the instrument granting the right was unregistered: if it was a contract giving rise to a purely personal right, assuming that the contract was property within the meaning of article 19(1)(f) and article 31(1) of the Constitution the State had not acquired or taken possession of that property.
The Court declined to follow the earlier judgment of this Court in Chhotabhai Jethabhai Patel & Company 's case(2).
(1) ; (2) ; L2 Supe.
CI/70 17 454 In Mahadec, vs The State of Bombay (1), again, a similar question was raised by a contractor who had purchased the right to reove forest produce mainly tendu leaves, from the forests included in the Zamindari belonging to the proprietors prior to the enactment of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950.
The Court in that case held that the contracts were unenforceable, because they were not registered and that in any event the agreements did not amount to grant of any proprietary right by the proprietors to the contractors and their remedy was not against the State because the State had not taken of such contracts or licenses.
In State of Madhya Pradesh vs Yakunuddin(2) the contractors ' right derived from the Jagirdar prior to the enactment of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Maltais, Alienated Lands) Act, 1950, to cut and remove the trees was held not enforceable against the State.
In all these cases there had been a partial examination of the problem in the light of a claim to an existing and enforceable fundamontal right vested in the contractor.
In the first case Chhotabhai Jethabhai Patel & Company 's case(3) the Court held, without disclosing the ground for so holding, that the fundamental right of the contractor was enforceable against the State.
In Shrimati Shantabai 's case(4) 'and Mahadeo 's case(1) the Court held that there was no infringement of any fundamental right and in Yakinuddin 's case(2) which reached this Court in 'appeal from an order held that the rights were not enforceable 'against the State.
The present case arises.
out of a suit instituted for recovery of compensation by a contractor who was prevented from enforcing his claim in respect of the forest trees under the terms of the contract entered into with the Jagirdar.
The contract was one relating to sale of future goods, but it was not a contract for sale of specific property in a deliverable state.
Title to the logs which the plaintiff had agreed to purchase did not vest in him at the date on which the estate vested in the State of Madhya Pradesh.
On that ground the plaintiff 's claim to cut standing trees in the forests of Sonpur Jagir after they vested in the State was rightly negatived.
The appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) [1959] Supp.
2 S C.R. 339.

summary:
A Jagirdar executed a deed on August 5, 1949 in favour of the appellant for the sale of logs of a specified girth to be obtained from cutting the trees in his forests.
On February 19, 1951 the Forest Officer of the ' respondent State prevented the appellant and the Jagirdar from cutting the trees.
On the coming into force of the Madhya Pradesh Act 1 of 1951, the, interest of the Jagirdar in his estate vested in the respondent State.
The appellant instituted a suit in June 1954 against the respondent Stateand the Jagirdar for breach of contract and claimed compensation (i) for logs which were cut but which he could not remove; (ii) for logs which were cut but were stated to have 'been lost due to the negligence of the respondent; and (iii) logs from the standing timber which had not been cut or could not be cut by the appellant from the jagirdar 's villages.
The ' respondent State contested the suit on the ground inter alia that the deed could not be enforced against it because of the vesting of the Jagir under the Act in the State and that the contract created a mere personal liability against the Jagirdar.
The Trial Court granted the appellant a decree for compensation under all the heads claimed at a rate per log determined by the Court.
The High Court in appeal disallowed the appellant 's claim, under items (ii) and (iii).
In appeal to this Court by certificate it was contended on behalf of the appellant that the rate of compensation determined was inadequate; that the High Court erred in disallowing compensation four the logs which were cut *but were lost, and that it had wrongly disallowed the claim for value of logs of timber which the appellant was entitled to, but could not cut because of the restrictions imposed by the ' State.
HELD: Dismissing the appeal, (i) On the evidence, the High Court had rightly disallowed the claim in respect of logs cut but which were stated to have been lost.
(ii) Where a thing is attached to, or forms part of, land at the time of the contract and which is to be severed by the buyer, under section 18 of the the property in the thing passes in the absence of a contract to the contrary to the buyer on the severance of the thing from, the land.
Again under section 21 of the Act, even if there be: a contract for the sale of specific goods, but the seller is obliged under the terms of the contract to do something to the goods for the purpose of putting them into, a deliverable state, the property passes only when the thing agreed to be done is done and the buyer is informed thereof.
[453 D] In the present case the contract by its terms was for the sale of logs out of trees in the forest with a girth of two feet or more; but the timber had to be cut and had to be put in a deliverable state,.
Before the trees.
446 were cut and the logs appropriated to the contract, the estate of the Jagirdar vested in the State of Madhya Pradesh.
The, appellant 's claim to cut standing trees in the forests of the Jagir after they vested in the State was therefore rightly negatived.
[456 F G] Badische Anilin Fabrik vs Hickson, at p. 421; KurseH vs Timber Operators and Contractors Ltd., ; Chhotabhai Jethabhai Patel & Company vs The State of Madhya Pradesh, ; ; Shrimati Shantabat vs State of Bombay & Ors.
11959] S.C.R. 265; Mahadeo vs The State of Bombay, [1959] Supp.
(2) S.C.R. 339: .State of Madhya Pradesh vs Yakunuddin, [1963] S.C.R. 13; referred tO.