KAPILABEN & ORS. versus ASHOK KUMAR JAYANTILAL SHETH THROUGH POA GOPALBHAI MADHUSUDAN PATEL & ORS.

Citation: [2019] 17 S.C.R. 247 · Decided: 25-11-2019 · Supreme Court of India · Bench: MOHAN M. SHANTANAGOUDAR, ANIRUDDHA BOSE · Disposal: Appeal(s) allowed

Judgment (excerpt)

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KAPILABEN & ORS.
v.
ASHOK KUMAR JAYANTILAL SHETH THROUGH
POA GOPALBHAI MADHUSUDAN PATEL & ORS.
(Civil Appeal Nos. 10683-86 of 2014)
NOVEMBER 25, 2019
[MOHAN M. SHANTANAGOUDAR AND
ANIRUDDHA BOSE, JJ.]
Specific Performance:
Specific performance of contract – Agreement to sell
disputed property in the year 1986 between original vendor and
original vendees – Sale was to be executed upon receipt of
remaining consideration from the original vendees within stipulated
time – The original vendees thereafter in the year 1987 executed
four agreements to sell the four different portions of the property
in dispute to the vendees in the present case (i.e. respondent Nos.1)
– The vendees under 1987 agreement were required to start a
housing project on the land in question – Suit for specific
performance of 1986 agreement was filed by the original vendee
against the original vendor – The vendees under 1987 agreements
also filed suit for specific performance of the 1987 agreements –
Original vendees withdrew their suit for specific performance of
1986 agreement and the vendees in respect of 1987 agreements
sought impleadment as co-plaintiffs in that suit – Trial court rejected
the withdrawal application and allowed the impleadment
application – High Court reversing the order of trial court allowed
the withdrawal application and rejected impleadment applications
– The order of High Court was affirmed by Supreme Court –
Vendees of 1987 agreement amended their suit for specific
performance of 1987 agreement seeking execution of 1986
agreement on the basis of assignment made in their favour – Trial
court dismissed the suits – Appellate Court affirmed the finding of
trial court – High Court allowed the case of vendees of 1987
agreement – Appeal to Supreme Court by the original vendors –
Held: There was no privity of contract between the appellants
(original vendors) and respondent No.1 (vendees in 1987
   [2019] 17 S.C.R. 247
247
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SUPREME COURT REPORTS
[2019] 17 S.C.R.
agreement) as neither appellants were party to 1987 agreements,
nor respondent Nos.1 were party to the 1986 agreement – Hence
respondent Nos.1 cannot seek specific performance of 1986 or
1987 agreements against the appellants except by suing as
representative-in-interest or the original vendees u/s. 15(b) of the
Specific Relief Act – The term ‘representative-in-interest’ includes
the assignee of a contractual interest – Whether or not an assignee
can seek specific performance would depend upon the construction
of the contract – In the facts of the present case, 1987 agreements
were not a case of assignment, but were independent agreements
for sale which were contingent upon the execution of 1986
agreement – Therefore, the only way respondent Nos.1 could seek
specific performance of the 1986 agreement was by proving the
appellants’ knowledge of and consent to transfer of the original
vendees’ rights and liabilities to respondent Nos.1 – In the present
case, appellants have neither by words nor by conduct, consented
to the assignment of the 1986 agreement in favour of respondent
Nos.1 – 1987 agreements were contingent contracts – Once 1986
agreement was cancelled, the original vendees’ rights thereunder
ceased to exist – Due to subsequent withdrawal of the suit for
specific performance of 1986 agreement abandoning their rights,
enforcement of 1987 agreements has become impossible – Thus,
1987 agreements are void and unenforceable as provided u/ss. 32
and 35 of the Contract Act – However, it prima facie seems that
the original vendees relinquished their rights in the 1986
agreements to frustrate the performance of 1987 agreements,
original vendees are directed to reimburse earnest money and 9%
interest per annum and pay compensation of Rs.1,80,000/- with
interest @ 9% per annum – Specific Performance Act, 1963 –
s.15(b) – Contract Act, 1872 – ss.32, 35 and 40 – Transfer of
Property Act, 1882 – s.40.
Contract:
Assignability of Contract – Held: Promisor cannot assign
contract to the third party without consent of the promisee.
Words and Phrases:
‘Representative-in-interest’ – Meaning of in the context of
contract.
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Partly allowing the appeals, the Court
HELD: 1.1 Upon considering the facts and circumstances
of the present case, it is evident that there is no privity of
contract between the appellants and respondent Nos. 1.
Respondent Nos. 1 were not the party to the 1986 agreement.
Vice versa, the appellants were not part

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