Case: Jai Narain Ram Lundia Vs. Kedar Nath Khetan And Others

2. The fact are as follows. The partnership firm, known as the Marwari Brothers, was formed on 29-2-1936. The partners consisted of two groups called the Bettia Group and the Padrauna Group. The Padrauna Group consisted of (1) Kedarnath Khetan and (2) a firm calledtwo were the plaintiffs in the suit. Kedarnath was one of the partners of the Surajmal firm. The Bettia Group consisted of (1) Gobardhan Das (2) Jainarain Ram Lundia (3) Badri Prasad and (4) Bisheshwar Nath. On Bisheshwar Naths death his son Madan Lal Jhunjhunwalls stepped into his shoes. These persons were the defendants.3. The Marwari Brothers Firm was formed for the purpose of promoting a company for starting a sugar mill in Champaran and for securing the managing agency of the company for itself for a period of ninety years. This was done. The capital of the company consisted of Rs. 8,00,000 divided into 800 shares of Rs. 1000shares were distributed as follows. In the Bettia Group Gobardhan Das and his brother Badri Prasad had 100 shares. Jainarain had 150 and Madan Lal had 100. The Bettia Group thus had 350 shares between them. The other group (Padrauna) held the remaining 450 shares.4. About five years later the two sets of partners fell out and, as a result, the Bettia Group agreed, on 1-1-1941, to sell a certain number of their shares in the Ganga Devi Sugar Mills Limited to the Padrauna Group along with a certain share in the Marwari Brothersexact number of shares, agreed to be sold and the extent of the share in the firm was a matter of dispute but that does not concern us at this stage because we are only concerned with the final result embodied in the decree now under execution.5. The Padrauna Group sued for specific performance and the dispute was carried as far as the Federal Court. That Court affirmed the decree of the Calcutta High Court on 6-5-1949. The substance of the decree was this"It is declared that upon payment and or tender to the defendants-appellants Jainarain Ram Lundia and Madan Lal Jhunjhunwala, of the sum Rs. 2,45,000 ..... with interest thereon ....... By the plaintiffs, the plaintiffs are entitled to 250 shares belonging to the said defendants in the Ganga Devi Sugar Mills Limited and five annas share belonging to them in the Marwari Brothers ...... and to all dividends and profits in respect thereof with effect from 1-2-1941......"2. "And it is further ordered and decreed that against payment or tender by the plaintiffs to the said defendants ....... Of the said sum of Rs. 2,45,000 with interest as aforesaid the said defendants - appellants and all proper parties do execute in favour of the plaintiffs proper deed or deeds of transfer or assignment of the said 250 shares in the Ganga Devi Sugar Mills Limited and the said five annas share in the Marwari Brothers......This was in slight variation of the first Courts decree. The exact variation does not matter. All that it is necessary to note is that the plaintiffs (that is, the Padrauna Group) tendered the money some time after the first Courts decree and before the Calcutta High Courtstender was not accepted as the defendants (the Bettia Group) had appealed. It is admitted that there was no second tender after the High Courts decree.7. After the Federal Court had settled the matter one of the defendants, Jainarain Ram Lundia, applied to the Calcutta High Court for execution. The decree was transferred to the Subordinate Judge, Motihari, and the execution proceedings started there on 25-1-1951. One of the plaintiffs, Kedarnath Khetan, filed an objection petition on 20-3-1951. That is the objection we are concernedother things, one of the objection was that the defendants were not in a position to implement the conditions imposed on them by the decree because the Marwari Brothers firm was dissolved by agreement between the parties before the Federal Courts decree and was no longer in existence. The present appeal turns almost entirely on that fact and on the consequences that flow from it.8. The first Court, that is, the Subordinate Judges Court at Motihari to whom the decree had been transferred, declined to go into this holding that it had no jurisdiction as transferee Court.9. The plaintiff Kedarnath appealed to the High Court and succeeded. The High Court held that the transferee Court had jurisdiction, that the Marwari Brothers had been dissolved and that because of that the defendants could not execute the decree.10. The defendants appealed here.

Court's reasoning:
On this point we agree with the High Court that it was not, for the followingreject this contention and remark in passing that this is inconsistent with another argument which was also urged in this Court, namely that the fact of dissolution was, no bar to performance on the defnedantsis a clear admission that the firm was dissolved, at any rate onplaintiffs contention is that it was dissolved muchearlier but whether that was so or not will make no difference to this appeal because 14-9-1950 is also before the date of the application for execution.We need not decide whether there is any conflict of view between the Privy Council decisions in - Kessowji Issur v. G. I. P. Rly.. 34 Ind App 115 at p. 122 (PC) (A) and - Parsotim v. Lal Mohar, 1931 PC 143   (AIR V 18) (PC) (B), on the one hand and - Indrajit Paratap Sahi v. Amar Singh, 1923 PC 128   (AIR V 10) at pp. 134, 135 (PC) (C), on the other because, even if this evidence were to be admitted and were to be accepted as true, there would still be the defendants admission in the High Court that the firm stood dissolved at least on 14-9-1950. We are not able to construe the statement in any otheris not necessary for us to go into that here because the position in the present case is mucha decree imposes obligations on both sides which are so conditioned that performance by one is conditional on performance by the other execution will not be ordered unless the party seeking execution not only offers to perform his side but, when objection is raised, satisfies the executing Court that he is in a position to do so. Any other rule would have the effect of varying the conditions of the decree: a thing that an executing Court cannotmay of course be decrees where the obligations imposed on each side are distinct and severable and in such a case each party might well be left to its own execution. But when the obligations are reciprocal and are interlinked so that they cannot be separated, any attempt to enforce performance unilaterally would be to defeat the directions in the decree and to go behind them which, of course, an executing Court cannotthe principle on which we are founding is not confined to cases of specific performance. It will apply whenever a decree is so conditioned that the right of one party to seek performance from the other is conditional on his readiness and ability to perform his ownreason is, as we have explained, that to hold otherwise would be to permit an executing Court to go behind the decree and vary its terms by splitting up what was fashioned as an indivisible whole into distinct and divisible parts having separate and severable existence without any interrelation between them just as if they had been separate decrees in separate and distinctdo not intend to examine this because even if these remedies also exist, provided application is made to the proper Court, it does not affect the basic principle in execution that the executing Court must take the decree as it stands and cannot go behindthe decree says that on payment being made some definite and specific thing is to be given to the other side, the executing Court cannot alter that and allow something else to be substituted for the thing ordered to bea five annas share in the assets of a dissolved firm which has ceased to exist is a very different thing from a five annas share in a going partnership concern; and to permit this substitution in the decree would be to alter it in a very materialis true this would have been a good ground for resisting a decree for specific performance but is no answer to the objection todefendant undertook to perform his part when the decree was passed and he must make good that undertaking before he can seek execution because the decree,in view of its language and intendment, must either be executed as a whole or not at all; it cannot be split up into different and uncorrelated parts and be executedmay be observed in passing that it was as much the duty of the defendant to seek modification of the contract by the Court which passed the decree, or modification of the terms of the decree, later if he did not know these fact at the time, as he says it was of the plaintiff. The fact remains that the decree was passed in these terms and it must either be executed as it stands or not at all unless the Court which passed it alters or modifiesnormally this sort of question which involves an enquiry into fact would not be tried by an appellate Court. It would be more appropriate for an original Court to which the decree is transferred for execution to enquire intoany case, if the appellants contention is pushed to its logical conclusion it would mean that whenever a decree is transferred all objection to execution must cease unless the order of the Court directing the transfer expressly enumerates the issues that the transferring Court is at liberty to determine. In our opinion S. 42, Civil P. C. is a complete answer to this contention.