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Madhya Pradesh High Court · body

1990 DIGILAW 443 (MP)

UTTAM CHAND v. RADHABAI

1990-11-26

T.N.SINGH

body1990
T. N. SINGH, J. ( 1 ) THIS is defendant's appeal against the judgment and decree passed to enforce specific performance of agreement for sale of his house in Basoda town. ( 2 ) IN the plaint, which giving description of the house the alleged terms of the agreement were also given; that was stated to be executed and registered on 24-7-1976 and was proved in the case as Ex. P-1. The plaint case is that Rs. 11,500/- had already been paid under the agreement to the defendant and the remaining Rs. 500/- had to be paid at the time of execution of the sale-deed, within 24-7-1977, when possession of the suit house had to be delivered by to the plaintiff by the defendant. A registered notice dated 25-7-1977 was served on the defendant as Sale-deed was not executed by him within the period stipulated. The plaintiff was ready and willing to pay the balance amount but the defendant refused to execute the sale deed and to deliver possession of the suit house to her. ( 3 ) IN his written statement the defendant denied those several averments and took the special plea that Rs. 11,500/- was due payable against loan taken by him and the document was executed as a collateral security. It was also agreed in presence of witnesses, before execution of the document, that the loan shall be repaid when demanded. Plaintiff refused to accept repayment of the loan though that was offered to her as she was motivated by an ulterior object, to grab the house. Defendant was ready to repay the loan. He also asserted that plaintiff's husband, Raghunath Rao, was formerly in Government service and he was doing money-lending business through, and in the name of, his wife, Radhabai. ( 4 ) ON the above pleadings the trial court struck three issues of which the material issues are Issues Nos. 1 (a) and 2 (a) as follows: - (1) (a) Whether the defendant entered into an agreement of sale with the plaintiff on 24-7-76? (2) (a) Whether the defendant took Rs. 11,500/- as loan and for the security of the loan the deed was executed? ( 5 ) LEARNED Additional District Judge trying the suit decided both issues against the defendant and decreed the suit. (2) (a) Whether the defendant took Rs. 11,500/- as loan and for the security of the loan the deed was executed? ( 5 ) LEARNED Additional District Judge trying the suit decided both issues against the defendant and decreed the suit. He disbelieved defendant's case while deciding together the two issues, taking view that there was no stipulation of payment of interest, whether paid or included in the said sum of Rs. 11,500/- and absence of that in the written statement was a fatal flaw. The defendant ought to have mentioned the amount he had received as principal and the rate of interest contracted; and that even in the evidence given by him and his witness there were discrepancies in that regard. He also faulted the defendant for non-production of his income tax returns and accounts regarding payment of interest. ( 6 ) APPELLANT's counsel, Shri Shrivastava, strenuously urged that the trial Court adopted a wrong approach in dealing with the case as no care was taken to reach a reasonable and cogent conclusion on the basis of evidence adduced, that the plaintiff had duly proved the case pleaded and she was entitled to the decree prayed. I have no hesitation to say that the discussion of the evidence of plaintiff's side or even of defendant's side display little concern for critical analysis and the impugned judgment betrays a constructed and casual approach in dealing with legal issues which unfortunately could not be properly grasped by the trial Court. Both documentary and oral evidence have not been discussed and analysed in detail and the suit appears to have been decreed on the basis of the so-called "weakness" of the defendant's case. ( 7 ) AFTER hearing counsel for the parties it appeared to me that the following two questions arise for determination in this appeal: -1) Whether Ex. P-1 is validly concluded enforceable contract for the sale of the suit house by the defendant to the plaintiff? 2) On pleadings and evidence adduced by parties in the suit what relief, if any, can be granted to the plaintiff?however, before proceeding to examine the law and before reaching my own conclusion on evidence in regard to the points enumerated I prefer to summarise briefly first the evidence that has come on record to make up the default of the trial Court. In doing so, I refer seriatim first to the three documents proved by the plaintiff. ( 8 ) AGREEMENT, Ex. P-1, is an unilateral document which is executed only by the defendant. Other signatories to the documents are (1) Shri J. P. Shrivastava, Advocate, Vidisha, who is described as the person drafting the document on 24-7-1976; (2) Sudarshan Shrivastava, who is described as the typist; (3) Sunderlal and (4) Chandrakant attesting witnesses who deposed respectively as P. W. 2 and P. W. 1. Nowhere in the document appear the signature of either the plaintiff or her husband, Raghunath Rao (P. W. 3 ). The endorsement of the Sub-Registrar, of 24-7-1976, is that the executant admitted having received Rs. 7,500/ - before hand and Rs. 4,000/ - at the time of execution leaving the balance of Rs. 500/- as due payable. The recital in the agreement is that the executant was the owner of the house which was a double-storyed Pakka house situate in Ward No. 12, Ganj Basoda town and consideration for sale of the house was settled at Rs. 12,000/ -; that the executant was in need of money for his business and for repayment of loan due to which he was willing to sell the house as he had no other means to fulfil that need. He had received Rs. 7,500/and on 24-7-1976 he was being paid Rs. 4,000/ -. Balance payable was Rs. 500/- but that was to be paid when the sale-deed would be registered, albeit at his cost and expense. In that manner, it was stated, the entire payment shall be made of the full consideration and if within 24-7-1977 the sale-deed was not executed the purchaser shall have the right to take recourse to law and for that the executant shall be liable for the costs and expenses incurred by the purchaser. ( 9 ) THERE is no mention in the registered notice Ex. P-3, of any sum due payable to the defendant by the plaintiff under the sale-agreement and of plaintiff being ready and willing to pay that amount. Neither in the agreement nor in the notice any mention is made of possession to be delivered of the suit house to the plaintiff. For the first time in the plaint, as earlier alluded, a reference is made to that right to be enforced against the defendant. Neither in the agreement nor in the notice any mention is made of possession to be delivered of the suit house to the plaintiff. For the first time in the plaint, as earlier alluded, a reference is made to that right to be enforced against the defendant. Noteworthy is also the fact that in the plaint payment of Rs. 11,500/ - under the agreement is generally mentioned without taking care to specify the date and mode of payment. The other document which the plaintiff proved is Ex. P-4, a general power of attorney executed by her in favour of her husband, Raghunath Rao, on 3-4-1978. It mentions of the executant being the owner of a Pakka house in town Vidisha and the fact that she had made an agreement to purchase the suit house (of Ward No. 12, Rajendra Nagar Road, Basoda ). Also mentioned are the facts that she had monetary transactions with some people and she had litigation in respect to those transactions and her landed property. Her husband was given authority for among others to realise her dues from any person. That earlier she had executed and registered on 13-7-1971 one power-of-attorney in favour of her son, Mohan Rao, was also mentioned. ( 10 ) THE plaintiff did not enter the witness-box. Her case as disclosed in the evidence of her husband, Raghunath Rao (P. W. 3) and two attesting witnesses, Chandrakant (P. W. 1) and Sunderlal (P. W. 2), is as follows: P. W. 3 deposed that a "receipt" was executed by defendant when Rs. 7500/- was paid by him at his house at Vidisha to the defendant as "advance", 1/3 days before execution of the agreement (Ex. P-1) and the said "receipt" contained not only the particulars of the house but also other terms and conditions later incorporated in Ex. P-1 beside mentioning the fact that possession of the suit house shall be delivered when sale deed was executed. However, he also deposed that the said "receipt" was torn off in defendant's presence before talks were held in the Bar Library to settle terms and conditions of Ex. P-1 which was drafted by Shri J. P. Shrivastava, Advocate, for execution and registration at Vidisha. Raghunath's own evidence is that prior to execution of Ex. P-1 there were 2/3 sitting at his house at Vidisha when he had himself negotiated the deal with the defendant. P-1 which was drafted by Shri J. P. Shrivastava, Advocate, for execution and registration at Vidisha. Raghunath's own evidence is that prior to execution of Ex. P-1 there were 2/3 sitting at his house at Vidisha when he had himself negotiated the deal with the defendant. Chandrakant (P. W. 1), who deposed to the contrary, must be disbelieved as plaintiff Radhabai did not examine herself to prove that she had paid Rs. 7,500/- and had settled terms and conditions of the proposed sale-agreement. ( 11 ) ON the other hand, even P. W. 2 (Sunderlal) deposed categorically that at Registration Office Rs. 4,000/- was paid to the defendant by P. W. 3. He did not also support P. Ws. 1 and 3 on the point of presence at Bar Library and Registration office of plaintiff Radhabai. Indeed, it is the evidence of P. W. 3 himself that his wife was ailing for 7/8 years and she could not move out of the house due to arthritis. The husband further stated that before 1978 his wife was doing money-lending business, though the recital in the power of Attorney, Ex. P-4, (dated 3-4-1978), is that she was continuing the business (Len-Den hai) even on that date. Evidence of P. W. 3 that defendant used to borrow money from his wife from time to time is also noteworthy. ( 12 ) DEFENDANT examined himself and one witness, Babulal (D. W. 2), to prove his case that not at Vidisha but at Basoda there was talk with Raghunath Rao in presence of D. W. 1 and others about the loan transaction and the suit house was offered as collateral security. Defendant admitted execution of Ex. P-1 but stated that the contents were not explained to him before execution and registration of the document. P. W. 2 supports him to the extent that he did not see defendant reading the document before execution adding however he had also not read it but that Sub-Registrar had read out the same. Defendant admitted receipt of Rs. 4000/- before the Sub-Registrar. P. W. 2 admitted that Raghunath Rao did not tell him on 24-7-1976 that defendant was earlier paid Rs. 7500/ -. ( 13 ) SURPRISINGLY, the story of "advance" payment of Rs. 7500/- was not even suggested in defendant's cross-examination. Defendant admitted receipt of Rs. 4000/- before the Sub-Registrar. P. W. 2 admitted that Raghunath Rao did not tell him on 24-7-1976 that defendant was earlier paid Rs. 7500/ -. ( 13 ) SURPRISINGLY, the story of "advance" payment of Rs. 7500/- was not even suggested in defendant's cross-examination. Defendant having had any talk with plaintiff, Radhabai, at her house or at Registration Office, is not admitted by him. He deposed that the market price of the suit house was Rs. 40,000/- on the date of execution of Ex. P-1. Raghunath Rao, in his cross-examination, stated it to be worth Rs. 12,000/- and not Rs. 25,000/ -. Defendant deposed that Rs. 11,500/- included interest for one year but about the rate of interest he said nothing. It was not put to him if he maintained accounts and submitted income-tax return for his business. ( 14 ) ON the evidence set out above I have no hesitation in recording the finding that as between plaintiff Radhabai and defendant Uttamchand no talks were held in regard to the agreement, Ex. P-1. As Raghunath Rao was Government servant, the document was got executed by him in favour of his wife. If the story of "receipt" of defendant consequent upon payment to him of Rs. 7,500/- is not a myth, then it is to be presumed that it was withheld deliberately as it would have supported defendant's case. It is too naive to expect P. W. 3 to act so foolishly as to tear of the "receipt" even before Ex. P-1 was drafted and executed; no prudent man would run such a risk. I would accordingly hold that plaintiff has failed to prove that between her and the defendant there was any duly and validly concluded contract for the sale of suit house and, therefore, Ex. P-1 cannot be enforced against the defendant to achieve that object. It has to be noted in this connection that neither party had set up or proved that the plaintiff was acting as an agent for her husband, P. W. 3. ( 15 ) NEITHER the typist nor the Advocate drafting the agreement being examined and P. W. 3 having admitted that at the time of typing, he had got included in the document such terms as suit and served his interest, defendant's case that the agreement (Ex. ( 15 ) NEITHER the typist nor the Advocate drafting the agreement being examined and P. W. 3 having admitted that at the time of typing, he had got included in the document such terms as suit and served his interest, defendant's case that the agreement (Ex. P-1) was a doctored and distorted version of the pact concluded in respect of the loan transaction get circumstantially established. Defendant did not deny receipt of Rs. 11,500/- which included interest for one year. Even if that payment was made by P. W. 3 using his wife's name, the latter has to be regarded as trustee for her husband and to be entitled to claim repayment of the loan admitted as due payable to her by the defendant. Trial Court has unjustly conjectured in rejecting defendant's case without there being any evidence of defendant's submitting income-tax return and not showing therein payment of interest in respect of the loan contracted. ( 16 ) SUPPORT in law for the finding and conclusion has to be explained now. Viscount Haldane, L. C. observed in House of Lords' decision in Dunlop Pneumatic Tyres' case, 1914-15 All ER Re. 333, that principle of Roman Law recognising jus quesitum tertis is foreign to English Common Law; only a person who is a party to a contract can sue on it. On facts it was held in that case that even if the appellants were undisclosed principles for Dunlop and Co. , as no consideration moved from them to the defendant the contract was unenforceable at their instance. Similar are facts of the instant case as it has not been proved, though so pleaded, that payment of any amount was made by the plaintiff. She was named only in Ex. P-1 as the payee and the beneficiary of the agreement to have the sale-deed executed for the suit house; she was signatory and her assent otherwise to the alleged transaction has not been proved. See also, in this connection, Scruttons v. Midland Silicenes, (1962) 1 All ER 1, wherein the dictum of Viscount Haldane was followed by the majority. P-1 as the payee and the beneficiary of the agreement to have the sale-deed executed for the suit house; she was signatory and her assent otherwise to the alleged transaction has not been proved. See also, in this connection, Scruttons v. Midland Silicenes, (1962) 1 All ER 1, wherein the dictum of Viscount Haldane was followed by the majority. In a latest decision of Queens Bench Division, Shelling v. John G. Snelling, (1972) 1 All ER 79, those two decisions of the House of Lords and another subsequent decision of that House in Beswick v. Beswick, (1967) 2 All ER 1197, are examined and explained in decreeing the counter-claim of the defendant while dismissing plaintiff's suit. In the instant case, however, P. W. 3 is not a party to Ex. P-1 or to the suit and indeed has not put forth claim for specific performance of the contract based on the "receipt" or any oral contract for the payment made by him. ( 17 ) PRIVY Council's decision in A. M. Vandipetite v. P. A. Insurance Co. , AIR 1933 PC 11, buttressed the view expressed in Dunlop's case (supra), but also laid down that party to the contract can constitute himself as a trustee and confer rights on a third party. In the facts and circumstances of the instant case, the benefit of this holding does not go to the plaintiff. Provisions of Chapter I of Indian Contract Act attach equal importance to the concept of "communication" and "acceptance" as in English Common Law and that is clearly and affirmatively manifested not only in Ss. 3, 4 and 7, but also in the basic interpretation Clause, S. 2. In the Indian contract, law has been examined in the Division Bench case of Deb Narayan v. Ram Sadhan, AIR 1914 Cal 129 with reference to S. 2 (d) of Contract Act and having found linkage of "communication" duly established between the plaintiff and defendant No. 5, the suit was decreed against latter. The view expressed by Jenkin, C. J. therein, was followed in Khirod Behari v. Man Gobinda, AIR 1934 Cal 682, to hold that there may be an equity in the third person, in some cases, to sue upon a contract to which he was stranger. The view expressed by Jenkin, C. J. therein, was followed in Khirod Behari v. Man Gobinda, AIR 1934 Cal 682, to hold that there may be an equity in the third person, in some cases, to sue upon a contract to which he was stranger. In the instant case, however, the plaintiff is not enforcing any equity although her claim may still be considered in terms of "variation" which the defendant has himself set up and on that basis, it may be possible to determine as to what relief can be given to her u/s. 18 of the Specific Relief Act. ( 18 ) IN view of the discussion of law aforesaid and finding reached on facts proved in the case, I have no hesitation to hold that the first question has to be decided against the plaintiff. Ex. P-1, which purports to be an agreement for sale of the suit house, is not a validly concluded contract between the plaintiff and the defendant for the purpose contemplated under Ex. P-1 and as such is not enforceable to fulfil that purpose. ( 19 ) IT remains to be seen now if the plaintiff is entitled otherwise to any relief on pleadings and evidence. It may be first examined if Ex. P-1 bears such construction as may lend assurance to defendant's case of "variation" in terms of S. 18 of the specific Relief Act. That true nature of a document cannot be disguised by labelling it to suit convenience of any party is an established proposition of which notice is taken in Shanta Bai, ( AIR 1958 SC 532 ) and as held in CIT v. Panbai Tea Co. ( AIR 1965 SC 1871 and Mangala Kunhamina ( AIR 1971 SC 1575 ), the circumstances and conduct of parties are always regarded as useful guides in ascertaining the true nature and content of a transaction. Before a contract is concluded to buy an immovable property, enquiry is invariably held into title of the seller; but there is no evidence in this case that such enquiry was made. Full consideration is not paid when agreement only is made for the sale-deed to be executed in future and the buyer reserves to himself the right to terminate the agreement if he is not satisfied about saleable interest in the property of the seller and of the property being free from encumbrances. Full consideration is not paid when agreement only is made for the sale-deed to be executed in future and the buyer reserves to himself the right to terminate the agreement if he is not satisfied about saleable interest in the property of the seller and of the property being free from encumbrances. Such a stipulation is missing in Ex. P-1; express stipulation in regard to delivery of vacant possession of the property on execution of the sale-deed is also missing in Ex. P-1. ( 20 ) TWO other circumstances too, are noteworthy. Though neither in the notice (Ex. P-3) nor in Ex. P-1 there is any whisper of stipulation regarding possession, that serious defect is sought to be cured by making averment in the plaint and also introducing in evidence, the fact that the said stipulation was recorded in the missing "receipt". Costs and expenses for execution of conveyance is normally and usually paid (as per S. 55 (1) (c), T. P. Act) by the vendee, but by saddling that liability on the defendant and liquidating by that the plaintiff/vendor's liability for payment of fictitious balance of Rs. 500/-, scope is left for the document to be considered as a Bond for loan paid. One year's long period being fixed for execution of sale-deed, the character of the document as a Bond is reinforced as such long period is usually fixed for repayment of a loan. Admission of P. W. 3 that he had got typed a document (Ex. P-1) and had got included therein such term as he considered necessary is admission relating to his design to prepare a misleading and ambiguous document with a distorted frame. ( 21 ) SECTION 18, Specific Relief Act, is entracted in extenso:"18. Admission of P. W. 3 that he had got typed a document (Ex. P-1) and had got included therein such term as he considered necessary is admission relating to his design to prepare a misleading and ambiguous document with a distorted frame. ( 21 ) SECTION 18, Specific Relief Act, is entracted in extenso:"18. Non-enforcement except with variation - Where a plaintiff seeks specific performance of a contract in writing, to which the defendant sets up a variation, the plaintiff cannot obtain the performance sought, except with the variation so set up, in the following cases, namely: - (a) whereby fraud, mistake of fact or misrepresentation, the written contract of which performance is sought is in its terms of effect different from what the parties agreed to, or does not contain all the terms agreed to between the parties on the basis of which the defendant entered into the contract; (b) where the object of the parties was to produce a certain legal result which the contract as framed is not calculated to produce; (c) where the parties have, subsequently to the execution of the contract, varied its terms. " ( 22 ) THE provision is obviously curative and remedial. It is meant to serve as a panacea for human frailties at legal parlance. It recognises the universal truth that what is apparent may not always be real. When any action is founded on any written contract, the provision envisages, Court's duty to find the true nature of the transaction arises from forensic sanctity attached to the execution per se of a written instrument. An endeavour has to be made to enforce the written contract and in that sense the provision is complementary to S. 20 under which general guidelines are laid down for the exercise of discretion in actions for specific performance of contract of any type. Courts are required to make earnest effort, unless the very execution of the document is denied, to give effect to the written pact and enforce the contract with such terms as may be pleaded and proved by the defendant even if those are at a variance with the terms stated in the instrument in question. That is the total effect of the enumeration of the triune circumstances ("cases") stated in clauses (a), (b) and (c) of S. 28 and that reflects positively the object of the provision. That is the total effect of the enumeration of the triune circumstances ("cases") stated in clauses (a), (b) and (c) of S. 28 and that reflects positively the object of the provision. A voidable contract such as tainted by fraud, mistake of fact or misrepresentation is even made specifically enforceable if the defendant himself washed off the taints and sets up a different contract with terms other than those embodied in the instrument in question. Cases of novation even are embraced by clause (c); and in terms of clause (b), the frame of the instrument is made amenable to change in the object sought to be achieved thereunder and a different "legal result" is allowed to be achieved in the course of enforcement of the written contract with necessary modification made therein by Court upon determination of legally and truly enforceable rights and obligations of parties. ( 23 ) THE flaws in the written contract (Ex. P-1) I have already pointed out above to demonstrate that although ostensibly it sought to enforce against the defendant an obligation attributed to him to sell the suit house to the plaintiff, it sought to achieve intrinsically on the other hand, the purpose of a collateral security for the loan which the defendant admitted having obtained on the condition of repayment of that within a year. Defendant's own case, pleaded in written statement, was that the plaintiff acted as trustee for her husband who used to carry on money-lending business in her name. It was also his case that Ex. P-1 was executed by him to assure the plaintiff repayment of the loan with interest, within one year, of the sum of Rs. 11,500/ -. The variation pleaded by the defendant does not destroy plaintiffs case though it purported to change the nature of the obligation of the defendant imputed to him under Ex. P-1. On pleading and evidence it is established that Ex. P-1 was not intended to produce the result claimed by the plaintiff and, therefore, the said written contract, as framed, was not enforceable. Defendant's promise contemplated in the contract has to be enforced, therefore, in accordance with the case set up and established by him in evidence. Defendant has evidently bound himself to discharge liability for repayment of the amount mentioned in Ex. Defendant's promise contemplated in the contract has to be enforced, therefore, in accordance with the case set up and established by him in evidence. Defendant has evidently bound himself to discharge liability for repayment of the amount mentioned in Ex. P-1 and that has to be enforced though nature of that liability was framed therein as consideration received for sale of the suit house and not as loan. The plaintiff's suit can be decreed, therefore, u/s. 18 to enforce liability of the defendant for repayment of that amount to the plaintiff which he admitted as due payable to her on account of loan with interest. ( 24 ) FOR the reasons aforesaid, I hold and decree specific performance of contract found established for repayment of Rs. 11,750/- by defendant to the plaintiff. Neither the plaintiff has claimed interest nor it has been established that the defendant refused repayment of the loan to incur liability for interest beyond one year's period. Indeed, for interest, no decree can be passed even in terms of S. 3, Interest Act, 1978, because no claim is made by the plaintiff in that regard and otherwise too it has not been found or established that between the parties there was any contract for payment of interest beyond one year's period. ( 25 ) IN the result, the appeal succeeds and is allowed to the extent indicated. The suit stands decreed for Rs. 11,750/- with post decree interest @ 6% p. a. till realisation. Parties are left to bear their costs throughout. Appeal allowed. .