# PIAREY LAL v. HORiLAL

- **Citation:** [1977] 2 S.C.R. 915
- **Court:** Supreme Court of India
- **Decided:** 1977-02-07
- **Case number:** CIVIL ArPELLATE Juiusi>ICTION : Civil Appe~l No. 1252 of 1976
- **Bench:** P. K. GdSWAMI, P. N. Shinghal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/piarey-lal-v-horilal-7122
- **Pages:** 5

## Headnote

U.P. Co11solidatio11 of Holdiitgs Act, 1953, s. 30(b)-Whether agreement
for sale creates liability for tenure-Jzolder "in" original holding for the purpose
of.
B
The appellant Piarey Lal had agreed to sell his original nolding to Hori Lal
C
nut later refused to do so on the ground that his p"roperty which was the
subject matter of~the contract had been consolidated under the U.P. Consolidation of Holdings Act, 1953, and it was impossible to perform the agreement.
Hori Lal filed a suit for specific performance contending that the agreement for sale had created a liability for Piarey Lal for the purpose of section
30(b) o.f the Act, arid the same wl!S transferred to the new plot or "chak"
allotted to him as a result of ·the consolidation. The suit was decreed
by
the Trial Court and Piarey Lal's appeals before the District Court and the
n.
High Cuurt were dismissed.
u·
Allowing the appeal by Special Leave the Court,
HELD : . By virtue of s. 54 of the_ Trapsfer of Property Act, the agreement for shle did not give fise to any interest "in" the original holding of the
dtifen<'innt as the tenure-holder.
There could thus be no occasion for
the
transfer of any such "liability" in his new land or "chak" so as to attract
clause (b) of s. 30 of the Act. When he lost that property as a result of
the scheme of consolidation, the agreement for sale became void. [918 C-El
Sugna & Anr. v. Kali Ram & Ors. 1966 A. L. J. 1004, ruiiproved.
Shanti frasad v. Akhtar & Anr. 1972 A.L.J. 549 and Clzetan Singh & Ors.
v. Hira Singh & Ors. 1969 A.L.J. 189. overruled .
E
. CIVIL ArPELLATE Juiusi>ICTION : Civil Appe~l No.
1252 of
1976.
F
Appeal by spei;ial Leave froni the Judgment and Order dated
13-8-1975 of the Allahabad High Court in Second Appeal No. 179/ ·
75.
.
A. k. Gupta, for the Appellant.
S. T. Desdi and R. B. ,D'a(ar for the Respondent.

## Text

PIAREY LAL
v.
HORiLAL
February 7, 1977
[P. K. GdSWAMI AND P. N. SHINGHAL, JJ.]
U.P. Co11solidatio11 of Holdiitgs Act, 1953, s. 30(b)-Whether agreement
for sale creates liability for tenure-Jzolder "in" original holding for the purpose
of.
B
The appellant Piarey Lal had agreed to sell his original nolding to Hori Lal
C
nut later refused to do so on the ground that his p"roperty which was the
subject matter of~the contract had been consolidated under the U.P. Consolidation of Holdings Act, 1953, and it was impossible to perform the agreement.
Hori Lal filed a suit for specific performance contending that the agreement for sale had created a liability for Piarey Lal for the purpose of section
30(b) o.f the Act, arid the same wl!S transferred to the new plot or "chak"
allotted to him as a result of ·the consolidation. The suit was decreed
by
the Trial Court and Piarey Lal's appeals before the District Court and the
n.
High Cuurt were dismissed.
u·
Allowing the appeal by Special Leave the Court,
HELD : . By virtue of s. 54 of the_ Trapsfer of Property Act, the agreement for shle did not give fise to any interest "in" the original holding of the
dtifen<'innt as the tenure-holder.
There could thus be no occasion for
the
transfer of any such "liability" in his new land or "chak" so as to attract
clause (b) of s. 30 of the Act. When he lost that property as a result of
the scheme of consolidation, the agreement for sale became void. [918 C-El
Sugna & Anr. v. Kali Ram & Ors. 1966 A. L. J. 1004, ruiiproved.
Shanti frasad v. Akhtar & Anr. 1972 A.L.J. 549 and Clzetan Singh & Ors.
v. Hira Singh & Ors. 1969 A.L.J. 189. overruled .
E
. CIVIL ArPELLATE Juiusi>ICTION : Civil Appe~l No.
1252 of
1976.
F
Appeal by spei;ial Leave froni the Judgment and Order dated
13-8-1975 of the Allahabad High Court in Second Appeal No. 179/ ·
75.
.
A. k. Gupta, for the Appellant.
S. T. Desdi and R. B. ,D'a(ar for the Respondent.
The Judgment of the Court was delivered by.
~HINGHAL, J .-This appeal_, by special leave, is dire"cted agafust
the summary dismissal of defendant Piiffey Lal's second appeal on
Augtist 13, 1975.
A..; the leave has been limited to tM question
of i_nterprefatioi\ of Clauses (a) a,nd, (b). of seCtion 30 of the U.P.
C-Offsolidatiofi of Holdings Act, 1953, (hereinafter referred to
as
the Act), "for the purpose of deciding whether the liability of the
petitioner to specifically perform the contract of sale . of the
old
holding was transferred to the new 'chak' allotted to hiiri oh consolidation," it will be enough to state the facts which he'at on it.
G
H
A
•C
D
H
916
SUPREME COURT REPORTS
[1977] 2 s.c.R.
Respondent Hori Lal raised the suit for specific performance of
an agreement dated March 6, 1966, for the sale of six plate of land
measuring nine high and six biswas in village Hathiawali,
Tehsil
Gannaur. It was alleged in the plaint that Rs. 3000/- were paid
by the plaintiff Hori Lal in advance, and the balance of Rs. 2000/-
was to be paid at the time of the execution of the sale deed, within
one year of the agreement. It was also pleaded that as defendant
Piarey Lal refused to execute the sale deed, the plaintiff was driven
to the necessity of filing the suit for specific performance of the agreement for sale and, in the alternative, for the recovery of Rs. 3000/-
which had been paid as advance.
Defendant Piarey Lal denied the
execution of the agreement for sale and the receipt of Rs. 3000/-,
and pleaded that as new plots had been allotted as a result of the
consolidation of his holding under the Act, he could not perform the
agreement for sale.
The trial coun framed issues, inter alia, on questions. relating to the execution of the agreement .for sale, payment of
Rs. 3000/- to the defendant, and the inability of the defendant to
perform the contract.
That court held that the plaintiff had proved
the agreement for sale and the payment of Rs. 3000/-. It also held
that the agreement for sale could be "enforced for plots allotted to
the defendant in lieu of plot mentioned in the agreement in consolidation." It therefore decreed the suit for specific performance by
its judgment dated August 23, 1973.
The Second Additional District
Jiudge, Badaun, upheld the decree, and as the High Court has dismi'ssed the second appeal as aforesaid, d~fendant Piarey Lal has come
to this Court for a redress of hi's grievance by special leave.
As has be!<n stated, the limited question for consideration in this
Court is whether the defendant was liable to specifically perform the
contract for sale of his old holding even after its consolidatfori and
the allotment of a 'chak' ? It appears that there was controversy in
the Allahabad High Court on the question whether an agreement for
sale, in the circumstances of a case like this, was rendered void under
section 56 of the Contract Act because of the order of consolidation
allotting new plots for the earlier plots in respect of which the agreement f~r sale had been executed.
A Single Judge of that Court took
the view in Sugna and another v. Kali Ram and others(') that the
·.agreement became void and impossible of performance, and was not
·saved by section 30 of the Act.
A different view was however taken
;by another Single Judge in Chetan Singh and others v. Hira Singh and
·others(').
The matter was referred to a Division Bench in Shanti
Prasad v. Akhtar and another. (8)
One of the Judges in the Division Bench was the Judge who had _given the decision in
Chelan
Singh's case.
The Bench held that the duty of the seller to execute
the conveyance
of the property agreed to be sold
was a liability
recognised by law and was enforceable as the liability "relates to the
land mentioned in the agreement" and was "transferred to the new
'chak' " under _section 30 (b) of the Act.
The decision
in Shanti
Prasad's case formed the basis of the decision of the first appellate
(1) 1966 A .. L.J. 1004.
(2) 1969 A.L.J. 189.
(3) 1972 A.L.J. 549.
• ..
+
\
PIAREY LAL v .. HO.Ill LAL (Shinghal, J.)
917
court in this case, and that appears to be the. reason why the High
Court has dismissed the second appeal summanly.
The controversy
. therefore turns on the proper interpretation of section 30 of the Act
which deals with the consequences which ensue on exchange of posse·ssion as a result of the allotment of a 'chak' ·to the tenure-holder.
Clauses (a) and (b) of section 30 of · the
Act
provide
as
foliows,-
"30. Consequences which shall ensue on exchange of
possession.-With effect from the date on w.hich a tenu_reholder enters, or is deemed to have entered mto possess10n
of the chak allotted to him, in accordance with the provisions of this Act, the following consequences shall ensue-
(a) the rights, title, interests and liabilities-
(i) of the tensure-holder entering, or deemed to have
entered, into possession, and
(ii)
(b)
of the former tenure-holder of the plots comprising
the chak, in their respective original holdings shall
cease; and
the tenure-holder entering into possession, or deemed
to have entered into possession, shall have in hi&
chak the ·same rights, title, interests and liabilities ai
he had in the original holdings together with such
other benefits of irrigation from a private source,
till such source exists, as the former tenure-holder
of the plots comprising the chak had in regard to
them."
Ml.I&
A
B
c
D
E
It w9uld thus appear that while clause (a) deals with the rights,
title, interests and liabilities of the tenure-holder entering into possession of the 'chak', as well as of the former tenure-holder of the
plots· comprising the 'chak', in their respective original holdings, and
F
provides that those rights, title, interests and liabilities shall "cease",
clause (b) P,i'ovides that the tenure-holder l'.ntering into possession
of the 'chak' shall have, in that 'chak', the 'same rights, title, interests
and liabilities "as he had in the original holdings." The expression
'chak' has been defined in section 3(1-A) of the Act to mean "the
parcel of land allotted to a tenure-holder on consolidation."
The
two clauses therefore are quite simple and clear, and do not raise any
G
real problems of interpretation, but the question is whether there is
justification for the argument, in the facts and circumstance's of this
case, that the expression "liabilities" would cover the liability of the
seller (i.e. the defendant) , under the aforesaid agreement for
the
sale of his original holding ?
As is obvious, clause (a) of section 30 does not bear on
the
H
question in controversy- becau'se it only provides for the cessation of
the rights, title, interests and liabilities both of the tenure-holder to
whom the 'chak' has been allotted, .and of the former tenure-holder
.A
G
918
SUPREME COURT REPORTS
[1977] 2 s.c.R.
of the plots comprising the 'chak' in their respective "original holdings".
There is no controversy that this was so in the present case.
It is afso no body's case that the rights, title, and interests of the
tenure-holder ~ntering into possession of his 'chak' have any bearing
on. the controv~rsy relating to the specified performance of the agreement for sale, for all that has been urged before us is t~at the defendant, as the tenure-holder of the new holding or 'chak' had
the
same "liabilities" in that 'chak' as he had in tjle original holding.
What therefore remains for consideration is whether, Qn the defendant's entering into possession of his new land or 'chak', there was
the same liability "in" the new land as "in" the original holding. It
has therefore to be examined whether, by virtue of the agreement for
sale, any liability accrued "in" the original holding ?
A cross-reference to section 54 of the Transfer of Property Act
shows that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled
between the P,_arties.
It has however been specifically provided in
the section that such a contract "does not, of itsellf, create any interest
in or charge on such prol'erty." It would therefore follow
that the
agreement for sale in the present case did not give rise to any interest
"in" the original holding of the defendant as the tenure-holder. That
being so, there could be no occasion for the tiansfer of any such
"liability in" the new land or 'chak' of the defendant so as to attract
clause (b) of section 30 of the Act. In fact what the defendant was
bound to do under section 55(1) (d) of the Transfer qf Property
Act wag to execute a proper conveyance of "the property" which was
the subject matter of the contract for sale, and not of _any other property.
So when he lost that property as a result of the scheme of
consolidation and his rights, title, interest's ceased in ttla_t property
by virtue of clause (a) of section 30 of the Act, the agreement for
sale became void within the meaning of section 56 of the Contratt Act,
and it is futile to urge that they were saved by clause (a) or clausf-
(b) of 11ection 30 of the Act.
We have gone through the· decision
in Shanti
Prasad's case
(supra), but we find that while the High Court took note of the fact
that the rightS, title, interests and liabilities of the tenure-holder "in"
his original holdings ceased, and he acquired the same rights,
title,
interests and liabilities "in" the 'chak' allotted to him, it lost sight
of the significance of the word "in", and the afores_aid provisions of
section 54 of the Transfer of Property Act, and disposed of
the
controversy before it by raising the other question whether "the tenure.-
holder" was subject to any liability "in respect of" his old holding.
That was why it felL into the error of holding that a liability
w311
created in the original holding of the defendant, and was transferred
to his 'chak' on his entering into its possession.
As ha;; been shown,
that was an erroneous view which has to be re:ctified.
It may be mentioned that counsel for the respondent tried to argue
that the defendant was bound to execute a proper conveyance
of
his original holding, which was. the subject .matter of the agteement
of ·sale, because, that holding liad been supstituted" by the 'chak'.
•
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PIA:it.EY LAL v. HORI LAL (Shinghal, !.)
919
He also tried to argue that the '.chak' allotted to the defendant by way
A
of consolidation of his holding was the same as his original holding
so that there was no occasion to invoke section 30 of the Act. Counsel
could not however support his argument by reference to the law, or
the facts of the case.
Moreover he was unable to 'show how he
could raise any such argument when the special leave had been limited to the interpretation of clauses (a) and (b) of section 30 of the
~ct.
B
It would thus_ appear that the plaintiff respondent's suit for specific performance of the agreement for sale was liable to dismissal, and
the High Court as well as the courts below erred in taking a contrary
view.
Counsel for the appellant has however frankly stated at the
bar that the appellant would be
willing to refund
the
sum of
Rs. 3000/- along with interest at 6 per_ cent per annum from the date
Of payment.
-
C
The appeal is allowed with costs, the impugned juJgment of the
High Court is set aside, and the suit of plaintiff-respondent Hori Lal
is dismissed in so far a·s it relates to specific performance of the
agreement for sale.
It is however ordered that the d~fendant shall
repay Rs. 3000 /- to the plaintiff, along with interest at 6 per cent
per annum from the date of payment, within three months from today.
M.R.
Appeal allowed.