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2005 DIGILAW 887 (PAT)

Sun Biotechnology Ltd. v. Bihar State

2005-09-27

BARIN GHOSH

body2005
Judgment Barin Ghosh, J. 1. In terms of a contract in writing dated 14th September, 2000, the petitioner agreed to purchase and the Respondent-Bihar State Financial Corporation agreed to sell to the petitioner three sets of properties described in Schedules I, II & III to the contract for a consolidated amount mentioned in the agreement. The contract authorises the petitioner to pay the agreed consideration by way of instalments mentioned in the contract together with interest as mentioned in the contract. After the contract was entered into and certain payments were made, those properties were handed over to the petitioner. After such handing over was made, the petitioner found that the Respondent-Corporation has not handed over a part of the properties mentioned in Schedule I to the contract, since it is incapable to deal with the same. Properties mentioned in Schedule I to the Agreement are landed properties. The particulars thereof have been fully described in the said Schedule. The total area of such landed properties comes to little more than 77 acres. There is no dispute that the Respondent-Corporation agreed to sell the properties mentioned in the said agreement which it obtained by exercise of its rights as mortgagee. In other words, a constituent of the Respondent- Corporation had mortgaged those properties in its favour and in exercise of right of such mortgagee, the Respondent-Corporation agreed to sell the same to the petitioner. The petitioner contended that the Respondent-Corporation is incapable of proposing even to sell at least 14.41 acres of such land inasmuch as those were acquired by the State under the Land Acquisition Act much prior to the said agreement. In addition to that, it is the contention of the petitioner that the original mortgagor did not have interest at least in 16.45 acres of land proposed to be sold by the Respondent-Corporation to the petitioner. The petitioner is seeking to contend that the Land Acquisition Department has ac-knowledged that 14.41 acres of such land had been acquired much prior to the date of entering into the said agreement for sale. It is the further contention of the petitioner that much prior to 1958 and at least after expiry of 12 years from 1958 the original mortgagor lost all interest in 16.45 acres of iand. It is the further contention of the petitioner that much prior to 1958 and at least after expiry of 12 years from 1958 the original mortgagor lost all interest in 16.45 acres of iand. A mortgagee, no doubt can deal with the interest of the mortgagor, but if the mortgagor does not have interest in the land, the mortgagee cannot deal with such interest inasmuch as he cannot claim better interest than the mortgagor. 2. There is prima facie evidence of the fact that at least 14.41. acres of land proposed to be sold was acquired by the State Government much prior to the date of entering into the aforementioned agreement. The respondent corporation has almost accepted that land slightly over 5 acres was acquired. It would not be appropriate on my part at this stage to make any comment in relation to 16.45 acres of land in respect whereof it is the contention of the petitioner that the mortgagor did not have any interest in the said land as on the date the mortgagee exercised his power under the mortgage inasmuch as that is not established even for prima facie view on any documentary evidence emanating from an undisputed source although the petitioner is seeking to rely upon the records of rights emanating from the Government records. 3. When the petitioner approached the respondent Corporation with its aforementioned and other complains, the Respondent Corporation in writing represented that it would look into the same. However, before the Respondent-Corporation could look into the matter, the petitioner filed the Suit and therein filed an application seeking an order of injunction restraining the Respondent-Corporation from claiming payment of instalments and interest in terms of the agreement inasmuch as the Respondent- Corporation has failed to deliver the items proposed to be sold in totality. While this application was made, an application was also made for appointment of an Advocate Commissioner. While it is claimed that the said application for appointment of an Advocate Commissioner was not dealt with, the application seeking injunction was dealt with and the same was dismissed. An appeal was preferred against the said judgment and order passed by the learned Subordinate Judge, which too, was dismissed and accordingly this application has been filed under Article 227 of the Constitution of India. 4. An appeal was preferred against the said judgment and order passed by the learned Subordinate Judge, which too, was dismissed and accordingly this application has been filed under Article 227 of the Constitution of India. 4. It is true that when there is prima facie evidence of the fact that a part of the property proposed to be sold has been acquired, it was improper on the part of an instrumentality of the State, as that of the Respondent-Corporation, to claim for the instalments in its totality together with interest, for it is incapable of delivering that acquired land to the petitioner. However, there appears to be no acceptable standard at least upto this stage to apportion the price. As aforesaid, the price of the items was one. There is no dispute that items mentioned in Scheduled II & III have not been handed over to the petitioner. It is also not the contention that none of the items mentioned in Schedule I has been handed over to the petitioner. It is the contention that some of the items mentioned in Schedule I have not been, as the same could not be, handed over to the petitioner. In such a situation, assuming that 14.41 acres or 16.45 acres or 30.86 acres of land, being the subject matter of Schedule I, cannot be handed over to the petitioner, at this stage before taking evidence, apportionment of the price for inability to hand over such land would be an impossibility inasmuch as the consideration was a composite consideration for all items mentioned in all the Schedules. In such circumstances, I think the thai court as well as the appellate court have correctly held that it is not the appropriate stage to issue an order of injunction, as was prayed for. 5. However, the issue was such that the petitioner could reasonably think that the is entitled to remission of the price and accordingly could ask for such remission even at the interlocutory stage, but in order to get the same he had to bring on record appropriate evidence to justify such remission. This was, however, not brought on record by the petitioner. 6. This was, however, not brought on record by the petitioner. 6. I think this matter must be dealt with by taking recourse to Sections 18 & 19 of the Indian Contract Act, 1872 , and if, in fact, 14.41 acres of land has been acquired by the State or if the mortgagor lost interest in 16.45 acres of land, then the proposal by the mortgagee to sell the same to the petitioner was a misrepresentation and the petitioner in terms of Section 19 of the said Act, while may insist that the contract shall be performed, may call upon the Respondent-Corporation to put to the petitioner in the position in which he would have been, if the representation had been true and accordingly is entitled to remission in price. 7. In order to support the contention that the Respondent-Corporation was incapable of delivering all the items mentioned in Schedule I, the petitioner had applied for " appointment of an Advocate Commissioner. This application ought to have been allowed and if on facts, as disclosed by the report and accepted by the Court, it had transpired that the Corporation was in fact incapable of delivering all the items mentioned in the Schedule I to the agreement, the petitioner could be asked to lead appropriate evidence even at the interlocutory stage to justify the remission, for the petitioner could not be asked to pay for some-thing which cannot be given to the petitioner. 8. In those circumstances, I direct the learned Subordinate Judge concerned to dispose of that application of the petitioner for appointment of an Advocate Commissioner in accordance with law after hearing both the parties as quickly as possible but not later than one month from the date of service of a copy of this order upon the learned Subordinate Judge. 9. A serious contention has been raised in the Suit. The principal contention is that while the Respondent-Corporation is incapable of selling a part it is proposing to sell to the petitioner, is seeking to recover price thereof and for that matter is threatening to take coercive steps. 10. A Suit of this nature is required to be disposed of as quickly as possible. The principal contention is that while the Respondent-Corporation is incapable of selling a part it is proposing to sell to the petitioner, is seeking to recover price thereof and for that matter is threatening to take coercive steps. 10. A Suit of this nature is required to be disposed of as quickly as possible. In the Suit, principally two aspects of the matter are required to be looked at; firstly, whether the Respondent-Corporation was incapable of selling any part of the items mentioned in Schedule I, and if yes, to identify in clear terms those items; and secondly, if so, to determine how much remission in the price the petitioner is entitled to by reason thereof. There may not be much difficulty in establishing the first aspect of the matter for the same would be principally borne out from the records of the State Government, and accordingly the petitioner shall request for issuance of appropriate sub poena upon the appropriate Departments of the State for production of appropriate records and the learned Judge shall ensure that in terms of such sub poena those records are produced. In the event, the Respondent-Corporation wants similar such documents to be produced, they will also take similar steps and the learned Judge shall ensure production thereof in the similar manner. The real difficult aspect of the matter would be to determine the amount of remission to which the petitioner would become entitled to, if it is established that some of the items mentioned in Schedule I could not be sold or proposed to be sold by the Respondent-Corporation. 11. It would depend upon the parties to decide what kind of evidence they would like to lead to establish the same. The nature of the evidence that is likely to come may prolong the suit, but at the same, as aforesaid, the suit requires an early disposal. 12. It is now a mandate of the law that every attempt must be made to have ihe matters and issues settled in an amicable atmosphere, if it is possible, even if a suit is pending, and if the matter cannot be settled then only the suit should proceed. 12. It is now a mandate of the law that every attempt must be made to have ihe matters and issues settled in an amicable atmosphere, if it is possible, even if a suit is pending, and if the matter cannot be settled then only the suit should proceed. Having regard to the fact that the nature of contentions in the suit are important and that the same require an early settlement, and as, in fact, the Respondent- Corporation at one stage had indicated its intention to look into the grievances of the petitioner, it would be appropriate to direct the petitioner to approach the Corporation for settlement of the issues with a further direction upon the Corporation to make an all out effort to settle the issues amicably. The petitioner would approach the Corporation within a period of one month from today for such settlement giving details of all of its grievances and try to support the facts giving rise to such grievances with evidence as far as possible and the Corporation is directed to settle such grievances as quickly as possible but not later than six months from the date of the petitioner approaching the Corporation. If for the purpose of such settlement any Government record is required to be looked at, but the same are not available, the parties will approach the learned Judge to issue sub poena as above and the learned Judge shall ensure production thereof and thereupon permit the parties to take authenticated copies of such documents. In the event, the matter cannot be settled, a letter to that effect must be written by the Corporation to the petitioner within the period as mentioned above, and then the petitioner will file said letter alongwith an affidavit before the learned trial court and therein shall state that the issues involved in the suit could not be settled amicably out of Court and the Trial Court then shall proceed to decide the suit and he is requested to conclude the suit within a period of two years from the date thereof. In the meantime, however, as aforesaid, the trial court shall decide that application for appointment of Advocate Commissioner in accordance with law, and if it decides to appoint such Commissioner, ensure submission of report by the Commissioner as quickly as possible, for the same may also help the parties to settle the issues amicably. 13. In the meantime, however, as aforesaid, the trial court shall decide that application for appointment of Advocate Commissioner in accordance with law, and if it decides to appoint such Commissioner, ensure submission of report by the Commissioner as quickly as possible, for the same may also help the parties to settle the issues amicably. 13. Inasmuch as there is some evidence that at least some part of the land proposed to be sold was acquired by the State much prior to the date of the agreement, I direct the Corporation not to treat the petitioner as a defaulter and the period of default from the date it commenced until the end of September, 2005 shall be ignored by them and the petitioner shall start making payment of instalments from the month of October, 2005 in terms of the agreement and shall also pay up-to-date interest, including the period when it did not pay the instalments, at the rate mentioned in the agreement and also on the dates mentioned therein from October, 2005. 14. In the event the suit is ultimately decreed in favour of the petitioner, to the extent the consideration will be reduced, the Corporation shall refund the same together with interest right from the date ot payment of the first instalment to the extent the same would represent the amount refundable at the same rate as mentioned in the agreement. 15. By way of abundant precaution, I make it clear that for the purpose of this application I had only considered the contention that 14.41 acres of land mentioned in Schedule I has been acquired by the State and the mortgagor lost interest in 16.45 acres of land mentioned in Sched-ule-l to the agreement but I have not considered the full claim of the petitioner as made out in the plaint, which according to the petitioner, the Corporation has not been able to make over to the petitioner. 16. This disposes of the writ application. There shall be no order as to costs.