Research › Browse › Judgment

Patna High Court · body

1998 DIGILAW 238 (PAT)

Banwari Lal Agarwalla v. Ram Swaroop Agarwalla

1998-03-19

M.Y.EQBAL

body1998
Judgment 1. Since the fate of these two cases depends upon the adjudication of main issue "whether the agreement to sell is valid and enforciable in law," the appeal and the revision have been heard together and are being disposed of by this common judgment. 2. The plaintiff appellant has filed First Appeal No. 149/95(R) against the judgment and decree dated 6-7-1995 passed by Sub-judge Ist. Bokaro at Chas dismissing title suit No. 53/91 filed by the appellant for a decree for specific Performance of Contract. The appellant filed Civil Revision No. 293/95 under Sec. 14(B) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982 against the judgment and decree passed by Sub-judge Ist. Bokaro at Chas decreeing title suit (E 21/90) for eviction of the defendant appellant from the shop premises. 3. The case of the plaintiff appellant in the aforesaid suit for Specific Performance of Contract is that the defendant respondent is the owner and landlord in respect of all that piece and portion of land measuring 11 decimal along with building and structure standing on plot No. 6882 of khata No. 566 situated at village Chas, P.S. Chas district Bokaro. The appellant was inducted as a tenant with respect to one shop room measuring an area 408 sq. ft. i.e. 24 north and south in length and 17 east and west in width facing the main road and the ground floor of the building where the appellant is doing business of cycle/cycle rickshaw and electrical goods. The plaintiffs case is that the defendant entered into an agreement for sale of the shop room excluding an area of 6 wide space on the eastern side and extending an area of 3 on the southern side in length, for a consideration of Rs. 1,00000.00 and an agreement was executed on 2-5-1990 and the defendant received a sum of Rs. 15,000.00 as an earnest money. 1,00000.00 and an agreement was executed on 2-5-1990 and the defendant received a sum of Rs. 15,000.00 as an earnest money. The plaintiff alleged that as per the agreement there was clear understanding between the plaintiff and the defendant that the plaintiff appellant would continue in possession of the shop premises in part performance of the agreement and the defendant was required to erect a wall towards eastern inside the shop premises of the plaintiff in such a way that the area of the shop premises to be conveyed to the plaintiff towards northern and southern shall be 11 in width and western side shall be 27 in length excluding a wall and then to execute a registered sale deed on or before the 30th September, 1990 on receipt of the balance consideration money from the plaintiff. Plaintiff further case is that despite repeated request by the plaintiff the defendant did not care to construct wall and to execute sale deed as per agreement. Accordingly, several notices were sent to the defendant under certificate of posting celling upon him to perform his contractual obligations regarding erection of wall etc. and registration of deed of sale in favour of the plaintiff but nothing was done. The plaintiff was always ready and willing to perform his part of the agreement and also to pay the balance consideration money but the defendant with mala fide intention has failed and neglected to perform his part of the agreement. Instead of performing his part of contract, the defendant with mala fide intention gave a notice through his advocate dated 29-10-1990 alleging therein that the plaintiff pressurises the defendant to sell the shop premises and further the plaintiff failed and neglected to pay the balance consideration by 30th September, 1990 and as such the agreement stand cancelled and the advance money stand forfeited. The defendant also filed eviction title suit No. 21/90 for eviction of the plaintiff appellant. 4. The defendant respondent appeared in the aforesaid suit and filed written statement stating inter alia that the suit is barred by limitation and also by the provisions of Specific Relief Act. The defendant further pleded that the purported agreement is illegal, contingent and void and was obtained by undue influence and coercion. 4. The defendant respondent appeared in the aforesaid suit and filed written statement stating inter alia that the suit is barred by limitation and also by the provisions of Specific Relief Act. The defendant further pleded that the purported agreement is illegal, contingent and void and was obtained by undue influence and coercion. The defendant further case is that there was no agreement for absolute sale rather the agreement was for the sale on ownership basis and therefore suit for specific performance is not maintainable. The defendant further denied and disputed the alleged notice said to have been sent by the plaintiff. 5. On the basis of the pleading of the parties the Court below framed the following issues :- (i) Is the suit as framed maintainable?(ii) Is there any cause of action for the present suit?(iii) Is the suit barred by law of waiver, estoppel and acquiscence?(iv) Is the suit barred by provisions of Sec. 16 of the Specific Relief Act?(v) Is the agreement in question vague, incomplete, indefinite, void and non-executable?(vi) Has the plaintiff performed his part of contract and was he ready and willing to perform his part of contract?(vii) Is the plaintiff legally entitled to get protection of Sec. 53-A of Transfer of Property Act?(viii) Is the plaintiff legally entitled to get any relief as prayed for, if so, to what extent? 6 The learned Court below considered issue Nos. 5 and 6 together and decided the same against the plaintiff. After considering the evidence and the contents of the agreement it came to a finding that the agreement is uncertain and is a void document under Sec. 29 of the Contract Act and no effective order could be passed due to its vagueness. The Court below further came to a finding that notices sent by the plaintiff to the defendant under certificate of posting are not valid notice inasmuch as service of notice under certificate of posting cannot be relied upon and therefore, the plaintiff failed to prove about his readiness and willingness in performance of his part of the agreement. The Court below therefore, dismissed the suit holding that no decree for specific performance can be granted. 6A. I have heard Mr. S. N. Rajgarhia, learned counsel appearing for the appellant and Mr. R.S. Marathia, learned counsel appearing for the respondent. 7. Mr. The Court below therefore, dismissed the suit holding that no decree for specific performance can be granted. 6A. I have heard Mr. S. N. Rajgarhia, learned counsel appearing for the appellant and Mr. R.S. Marathia, learned counsel appearing for the respondent. 7. Mr. Rajgarhia, learned counsel appearing for the appellant assailed the finding arrived at by the Court below on issue Nos. 5 and 6 and submitted that the entire finding is perverse and vitiated in law. The learned counsel submitted that the Court below has committed serious error of law and fact in holding that the agreement is vague and uncertain for the reason that there is no clear description of the property agreed to be sold. The learned counsel drawn my attention to several exhibits and also the evidence of the defendant and submitted that the Court below has not at all considered all his evidence and decided the issue on mere conjecture and surmises. On the other hand, Mr. R.S. Marathia, learned counsel appearing for the respondent firstly submitted that the very agreement for sale is void for the reason that the agreement does not disclose the terms and conditions for the sale of the property on ownership basis. According to the learned counsel transfer by ownership basis creates only limited interest in the property and therefore the suit itself for a decree for transfer of the property is misconceived. The learned counsel further made his submission in support of the judgment passed by the Court below. 8. I will first take up to consider the findings arrived at by the Court below on issue No. 5 which is the main issue regarding the validity of the agreement. For better appreciation it would be useful to look into the pleadings of the parties. In paragraph 2 of the plaint the plaintiff pleaded that he was inducted as a tenant under the defendant with respect to a shop room measuring an area 408 sq. ft. i.e. 24 north and south in length and 17 east and west in width facing the main road. In paragraph 2 of the plaint the plaintiff pleaded that he was inducted as a tenant under the defendant with respect to a shop room measuring an area 408 sq. ft. i.e. 24 north and south in length and 17 east and west in width facing the main road. In paragraph 4 of the plaint the plaintiff pleaded that defendant entered into an agreement for sale of the said shop road excluding an area of 6 wide space on the eastern side and extending an area of 3 on the southern side in length more fully described in the schedule of the plaint on a consideration of Rs. 1,00000.00 and the defendant received a sum of Rs. 15,000.00 as advance from the plaintiff. In the schedule of the plaint the property under the agreement has been described as land and structure standing on plot No. 6882 measuring an area of 11 wide on southern and northern side and 20 in length on its eastern and western side of the wall excluding the boundary wall. From reading of the aforesaid two paragraphs of the plaint vis-a-vis the schedule it is evident that the property agreed to be sold is a shop room in occupation of the tenant measuring an area of 11 wide and 27 in length excluding the boundary wall. In reply to paragraph 4 of the plaint the defendant in paragraph 17 of the written statement admitted the execution of the agreement for the sale of aforementioned area of the suit premises but took a defence that the defendant most reluctantly under undue influence of the respectable persons agreed to sell and transfer the said premises minus 6 on the eastern side on ownership basis. From the pleading of the parties, therefore, it is evident that the existence of the agreement has not been denied by the defendant rather it was alleged that the defendant agreed to transfer the suit premises because of coercion and undue influence. The most important document is the agreement dated 2-5-1990 which has been marked as exhibit 3. From reading of the agreement it appears that the defendant agreed to sell the shop premises in occupation of the plaintiff as a tenant excluding 6 wide space and the boundary has been mentioned in the said agreement. The most important document is the agreement dated 2-5-1990 which has been marked as exhibit 3. From reading of the agreement it appears that the defendant agreed to sell the shop premises in occupation of the plaintiff as a tenant excluding 6 wide space and the boundary has been mentioned in the said agreement. The plaintiff appellant also proved certified copy of the plaint of Eviction Suit No. 21/90 filed by the defendant and also the deposition of the defendant given in that eviction suit. These documents have been proved and marked as exhibits 6, 7 and 7a. In the plaint of Eviction Suit No. 21/90 the defendant admitted that he executed a deed of agreement agreeing to transfer ownership of portion of the shop room minus 6 wide space on the eastern side on ownership basis for a consideration of Rs. 1,00000.00 and a sum of Rs. 15,000.00 was paid as an advance. It was further stated that the time was made essence of the contract and the said agreement being vague and the defendant having failed to pay balance consideration the agreement stand cancelled. I have also gone through the evidence of the defendant who examined himself as a witness in the eviction suit. In his evidence also the defendant reiterated the same thing that he agreed to sell the shop room which is in occupation of the plaintiff minus 6 wide space. I have also perused the lawyers notice dated 29-10-90 sent by the defendant under the signature of Mr. R.K. Marathia, advocate, a copy of which has been proved and marked as Ext. 8 in the eviction suit, Paragraph 3 of that notice is worth to be quotted herein below :- "That you pressurised my client through respectable persons of Chas to sell the said shop premises to you leaving 6 wide space on the eastern side so that in that small portion my clients said daughter-in-law may start a tailoring shop and the area of the shop proposed to be sold to you was to measure on the northern and southern side 11 excluding walls and on the eastern and western side 27 leaving the walls. The respectable persons fixed a consideration of Rs. 1,00000.00 for the said shop, out of which you paid a sum of Rs. 15,000.00 to my client agreeing to pay the balance consideration of Rs. The respectable persons fixed a consideration of Rs. 1,00000.00 for the said shop, out of which you paid a sum of Rs. 15,000.00 to my client agreeing to pay the balance consideration of Rs. 85,000.00 by 30th September, 1990" . 9 As noticed above the Court below came to a finding that the agreement is vague and uncertain but the Court below has arrived at this finding only on extraneous consideratin. The Court below has completely over-looked and failed to consider all those documents referred to herein above namely exhibits 6, 7, 7/a and Ext. 8. The Court has also failed to consider the consistent statement of the defendant made on serveral occasions that he agreed to sell the shop premises measuring an area of 11 in the northern and southern side and 27 in the eastern and western side excluding the wall and leaving 6 wide space for the purpose of starting a tailoring shop. The Court below has not appreciated the contents of the agreement in its right perspective and was influenced by irrelevant consideration. The Court below is, therefore, not correct in law in holding that the agreement is void document under Sec. 29 of the Contract Act. In my opinion, therefore, the agreement in question is a valid and enforceable contract by which the defendant agreed to transfer portion of the shop premises in occupation of the plaintiff as tenant measuring an area of 11_ in the northern and southern side and 27 in the eastern and western side excluding the wall and leaving 6 wide space for the need of the defendant. I further come to the conclusiion from the facts and evidence on record that both the parties were ad idem in respect of the property to be sold and there was no doubt in the mind of the defendant about the area of the shop agreed to be sold to the plaintiff appellant. Issue No. v is therefore, decided accordingly. 10. The next important issue is about the readiness and willingness. The Court below decided this issue No. vi against the plaintiff appellant. Firstly, the learned Court below disbelieved the notice sent by the plaintiff to the defendant asking him to perform his part of the obligations. The Court below held that notices sent under certificate of posting are not valid and no reliance can be placed on it. The Court below decided this issue No. vi against the plaintiff appellant. Firstly, the learned Court below disbelieved the notice sent by the plaintiff to the defendant asking him to perform his part of the obligations. The Court below held that notices sent under certificate of posting are not valid and no reliance can be placed on it. Secondly the Court below took the view that since the plaintiff conclusively failed to prove that those notices have been received by the defendant, not being sent by registered post, and therefore, no adverse inference can be drawn that plaintiff was never ready and willing to perform his part of the contract. 11. Before appreciating the findings arrived at by the learned Court below it would again be useful to look into the contents of the agreement. From perusal of the agreement it appears that the defendant agreed to sell and the plaintiff agreed to purchase the shop measuring 27 in length and 11 in width excluding walls from both the sides. In terms of the agreement the plaintiff was to pay balance consideration of Rs. 85,000.00 on the date of execution and registration of sale deed which was to be done by 30th September, 1990. It was further provided in the agreement that the defendant had to put a wall out of his own expenses in the shop premises and to make it 11 x 27 which was agreed to be sold to the plaintiff. The plaintiff appellant brought on record copies of letters dated 14-9-90 and 15-10-90 which have been marked exhibits 4 and 4/a respectively. Both the notices have ben sent under certificate of posting. In these two letters the plaintiff repeatedly requested the defendant to put a wall in the shop room and to execute and register a sale deed. In both the letters the plaintiff informed the defendant that the balance consideration amount has been kept ready for payment on the date of registration of sale deed. The Court below disbelieved these two letters on the ground that these letters were not sent by registered post rather it was sent under certificate of posting. Now I shall consider the evidence to find out whether both the parties have fulfilled their obligations so agreed under the agreement. The Court below disbelieved these two letters on the ground that these letters were not sent by registered post rather it was sent under certificate of posting. Now I shall consider the evidence to find out whether both the parties have fulfilled their obligations so agreed under the agreement. At this juncture I must prefer the advocates notice dated 29-10-90 sent by the defendant to the plaintiff before filing a suit for eviction, copy of advocates notice has been marked X for identification in this suit and exhibit-B in eviction suit. Paragraph-3 of the said notice has been quoted by me in the foregoing paragraph. There is no whisper by the defendant in any of the notice or even in the evidence that in terms of the agreement he put a wall and informed the plaintiff about his readiness to execute and register the sale deed. On the contrary from the notice aforesaid it will appear that the defendant took the stand that since the balance consideration money was not paid by 30th September, 1990, the agreement stood cancelled. As noticed above there was no such term in the agreement that the plaintiff was bound to pay the balance consideration by 30th September, 1990 even if the sale deed is not executed and registered by the defendant. The plaintiff appellant in his evidence has very categorically stated that after the agreement was entered into he removed all the articles and goods from the part of the shop premises so that the defendant may be able to put a wall but the defendant failed to fulfill his obligations. No evidence has come on the record from the side of the defendant that for the purpose of construction of wall he stored any building materials nor the defendant ever asked the plaintiff to be ready and to remove the articles. It is not the case of the defendant that the plaintiff after the agreement slept over so many months and it was only after eviction suit was filed, the plaintiff filed the suit for specific performance of contract as counter blast. On the contrary the defendant in his evidence in this suit and also in the suit for eviction has made a bold statement that he will not sell the property to the plaintiff as his son is not ready. On the contrary the defendant in his evidence in this suit and also in the suit for eviction has made a bold statement that he will not sell the property to the plaintiff as his son is not ready. The defendant further stated in his evidence that even if there would not have been personal necessity he would not have sold the property to the plaintiff. It is the specific case of the plaintiff in both in the suit for specific performance of contract and suit for eviction that the shop in question was let out to him by the defendant in the year 1973-74 and since then he had been continuing in a possession as a tenant on regular payment of monthly rent to the defendant without any interrruption and default till 30th September, 1990. Since the defendant decided to construct a market complex in the house premises particularly in the rooms situated in the back side of the shop in question and to sell the same on ownership to different persons the defendant, therefore, approached the plaintiff to provide 6 wide space in the shop room for passage and in turn the defendant will sell the remaining portion of the shop to the plaintiff. The appellant having been a tenant of the premises since 1973-74 he would have been naturally anxious to continue possession while the respondent who had to construct a market complex agreed to sell the portion of the shop leaving 6 passage for access to the market complex. On this back-ground the agreement in question came into existence and the plaintiff paid Rs. 15,000.00 as earnest money. This would indicate that the tenant was keen on purchasing the property in which he was carrying on business for the last so many years. All these facts and evidence have not at all been considered by the Court below while deciding the issue of readiness and willingness. The Court below proceeded merely on the basis that as the letters were sent by the plaintiff to the defendant under certificate of posting the same are not valid an adverse inference could be drawn abuot the readiness and willingness of the plaintiff to pruchase the property. As noticed above there is no stipulation in the agreement that on the failure of the plaintiff purchaser to pay the balance consideration amount by 30th September, 1990, the agreement shall stand cancelled. As noticed above there is no stipulation in the agreement that on the failure of the plaintiff purchaser to pay the balance consideration amount by 30th September, 1990, the agreement shall stand cancelled. On the contrary the stipulation was that the execution and registration of sale deed shall be completed within 30th September, 1990 and on the date of registration the plaintiff had to pay the balance consideration money. Even assuming the letters Exhibits 4 and 4/a were not in fact received by the defendant, in my opinion, there are sufficient evidence to show that the defendant never intended or even tried to perform his part of the obligation and did anything in furtherance of the agreement. After having given my anxious consideration on the entire facts and evidence I come to the conclusion that the plaintiff appellant was ready and willing to perform his part of the contract and the finding arrived at by the Court below is not in accordance with law. It is well settled that the jurisdiction to order specific performance of the contract is based on the existence of valid and enforceable contract. Discretion of the Court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance of contrat even before there has been any breach of contract. It is, therefore, necessary to first see whether there has been a valid and enforceable contract and then to see the nature of obligation arising out of it, the contract being the foundation of the obligation the order of specific performance is to enforce that obligation. It is true that relief of specific performance is discretionary but not arbitrary and the discretion must be exercised in accordance with sound and reasonable judicial principles. 12. Having regard to the facts and discussions made above, I am of the opinion that the findings arrived at by the Court below are perverse in law and further not in accordance with law. I hold that the agreement entered into by and between the plaintiff and the defendant is a binding and enforceable agreement and the plaintiff was and has been ready and willing to perform his part of the contract. The plaintiff, therefore, is entitled to a decree of specific performance of contract. 13. I hold that the agreement entered into by and between the plaintiff and the defendant is a binding and enforceable agreement and the plaintiff was and has been ready and willing to perform his part of the contract. The plaintiff, therefore, is entitled to a decree of specific performance of contract. 13. As stated above, the relief for specific performance of contract is equitable discretionary relief and therefore, while deciding the suit in favour of the plaintiff appellant I wish to add one more condition in the decree which in my opinion, would be just and reasonable. There is no dispute that the plaintiff appellant has been in occupation of the shop premises for the last so many years on monthly rent of Rs. 350.00 . The parties entered into the agreement on 2-5-1990 and in the agreement it has been clearly mentioned that all rent of the shop premises that became dues till 30th September, 1990 have been paid and there was no dues. There is no stipulation that on and from the date of agreement the plaintiff shall continue possession of the shop premises in part performance of the agreement and he shall not pay rent to the defendant. It is admitted that after April 1990 the plaintiff neither paid any rent to the defendant nor the defendant demanded rent from the plaintiff. In 1990 the shop was agreed to be sold at Rs. 1,00,000.00 and about 8 years have passed. In such circumstances, if the decree for specific performance is passed for the agreed amount the plaintiff appellant would be in very advantageous position. In other words, without stipulation in the agreement the plaintiff appellant would be allowed to occupy the shop premises without any rent. Moreover by reason of lapse of about 8 years since the date of agreement the market value of the property has certainly been increased. Keeping in view all these facts and circumstances, in my opinion, it would be more appropriate for the ends of justice to direct the plaintiff appellant to pay all arrears of rent from May 1990 till that date together with balance consideration of Rs. 85,000.00 before the execution and registration of sale deed by the defendant respondent in terms of the decree that may be passed in his favour. 85,000.00 before the execution and registration of sale deed by the defendant respondent in terms of the decree that may be passed in his favour. In the result, this appeal is allowed and the impugned judgment and decree passed by the Court below is set aside. Title Suit No. 53/91 is accordingly decreed and the defendant respondent is directed to execute and register sale deed in respect of the suit property on receipt of balance consideration amount of Rs. 85,000.00 together with entire arrears of rent of the shop premises since May 1990 date within two months failing which the execution and registration of sale deed shall be done through the process of Court.Civil Revision No. 293 of 1995 (R) 14. The impugned judgment under revision has been passed in Eviction Suit No. 21 of 1990 on the ground of bona fide personal necessity. The case of the plaintiff opposite party is that the agreement entered into by and between him and the defendant was because of undue influence and pressure. However, since the defendant failed and neglected to pay the consideration amount by 30th September, 1990, the agreement stood cancelled and the earnest money stands forfeited. 15. The Court below besides other issues framed issue Nos. 7 and 8 regarding relationship of landlord and tenant and personal necessity. The Court below came to the conclusion that the agreement to sell was a void document and the relationship of landlord and tenant exists between the parties. The Court below further decided the issue of personal necessity in favour of the plaintiff landlord. In view of my finding arrived at on the question of validity of the agreement to sell and in view of the fact that the plaintiff tenant is entitled to a decree of specific performance of contract, the finding of the Court below on the issue of relationship of landlord and tenant cannot be sustained in law. Consequently, the plaintiff landlord would not be entitled to a decree for eviction on the ground of personal necessity. In view of the fact that the tenant suit for specific performance of contract is fit to be decreed, I do not find any need to go into the other issues including the issue of personal necessity in detail in this civil revision. The judgment and decree passed in Eviction Suit No. 21 of 1990 is liable to be reversed. 16. The judgment and decree passed in Eviction Suit No. 21 of 1990 is liable to be reversed. 16. In the result, First Appeal No. 149 of 1995 is allowed and the judgment and decree passed in Title Suit No. 53 of 1991 is set aside and the suit is decreed as indicated above. Accordingly, Civil Revision No. 293 of 1995 is allowed and the judgment and decree passed in Eviction Suit No. 21 of 1990 is set aside. In the facts and circumstances of the case, there shall be no order as to costs.Order accordingly.