BHAVNANI DEVELOPERS PRIVATE LIMITED v. JALAN AND COMPANY
2006-12-15
BHASKAR BHATTACHARYA, KISHORE KUMAR PRASAD
body2006
DigiLaw.ai
BHASKAR BHATTACHARYA, J. ( 1 ) THIS appeal is at the instance of a defendant in a suit for damages and other consequential relief and is directed against order dated July 11, 1995 passed by a learned Single Judge by which His lordship rejected an application filed by the present appellant for rejection of the plaint. ( 2 ) THE respondent before us filed a suit for recovery of Rs. 15 lakh as damages against the present appellant and another who was the defendant no. 2 on the allegation that the defendant No. 2 was the owner of the plot of land measuring about 30 cottahs situated at premises No. 5b, Judges Court road, Alipore, Calcutta and the said defendant No. 2 entered into an agreement with one S. L. Kayal and Company for development of the said property and that the said S. L. Kayal and Company with the consent of all the parties subsequently assigned the said agreement in favour of the present appellant. According to the plaintiff-respondent, in terms of the said agreement, the S. L. Kayal and Company and the defendant No. 2 agreed to get the conveniences done in favour of the prospective buyers of flats pursuant to the said agreement through the plaintiff, a solicitor firm. According to the plaintiff, the defendant No. 2 and the appellant had been getting such conveniences done by the solicitors other than the plaintiff. It was further alleged that the appellant and defendant No. 2 evinced their intention not to abide by the said agreement and had repudiated the same. The plaintiff, in effect, sought specific performance of a part of the said agreement entered into between defendant No. 2 and the said S. L. Kayal and Company and at the same time, claimed damages for breach of such agreement. ( 3 ) THE present appellant, after entering appearance in the suit, filed an application for rejection of the plaint on the ground that the averments made in the plaint did not disclose any cause of action for filing the suit against the appellant and thus, the plaint was liable to be rejected. ( 4 ) THE aforesaid application was contested by the plaintiff thereby contending that the suit filed by the plaintiff was quite maintainable and that the suit should be heard on merit.
( 4 ) THE aforesaid application was contested by the plaintiff thereby contending that the suit filed by the plaintiff was quite maintainable and that the suit should be heard on merit. ( 5 ) THE learned Trial Judge, as pointed out earlier, by the order impugned herein, rejected the application filed by the appellant thereby holding that no case had been made out for rejection of the plaint and thus, rejected the said application. ( 6 ) BEING dissatisfied, the defendant No. 1 has come up with the present appeal. ( 7 ) MR. Deb, the learned senior Counsel, appearing on behalf of the appellant, vehemently contended before us that the learned Single Judge erred in law in holding that the plaintiff made sufficient averments in the plaint disclosing cause of action for filing the suit against the appellant. According to Mr. Deb, even if all the averments made in the plaint are taken to be true, the facts stated therein did not constitute any cause of action against the appellant for proceeding with the suit. Mr. Deb submits that undisputedly, the plaintiff was not a party to agreement between the defendant No. 2 and S. K. Kayal and Company and as such, even if in such agreement, the parties agreed that the conveniences pursuant to the agreement should be done by the plaintiff but subsequently, decided to engage a different solicitor for the purpose of execution of deeds in favour of the prospective buyers, no right accrued in favour of the plaintiff for claiming damages against the appellant or the defendant No. 2. He, therefore, prays for rejection of the plaint. ( 8 ) NONE appears on behalf of the plaintiff-respondent in spite of service. ( 9 ) AFTER hearing Mr. Deb appearing on behalf of the appellant and after going through the averments made in the plaint we agree with Mr. Deb that by virtue of the agreement between the defendant No. 2 and the predecessor-in-interest of the present appellant, the plaintiff did not acquire any right to claim damages for non-performance of the agreement between those two persons.
Deb appearing on behalf of the appellant and after going through the averments made in the plaint we agree with Mr. Deb that by virtue of the agreement between the defendant No. 2 and the predecessor-in-interest of the present appellant, the plaintiff did not acquire any right to claim damages for non-performance of the agreement between those two persons. If X and Y enter into an agreement of development of the land belonging to X and in that agreement, if they agree that Z, a solicitor would be entrusted with the responsibility of preparing the deeds of convenience to be executed in favour of the prospective purchasers, but subsequently, if they change their earlier decision and engage a different solicitor for the above purpose, the solicitor whose name appeared in the agreement between the parties, viz. Z cannot have any right to claim damages against either X or Y for their subsequent decision to replace Z with a different solicitor. It is not the case of the Z that it was a party to the agreement between X and Y, and therefore, the Z in such a situation, cannot have any right to force the parties to the agreement to comply with the terms thereof. In the case before us, neither of the parties to the agreement has any grievance against each other and therefore, the plaintiff, a third party to the agreement, cannot compel either of the parties to the agreement, to comply with the terms thereof. In this connection, it will be profitable to refer to the decision of the Apex Court in the case of M. C. Chacko vs. State bank of Travancore, reported in AIR 1970 SC 504 relied upon by Mr. Deb wherein the Apex Court made the following observations in connection with a right to a third party to enforce contract: "under the English Common Law only a person who is a party to a contract can sue on it and that the law knows nothing of a right gained by a third party arising out of a contract: Dunlop Pneumatic Tyre Co. vs. Seltridge and Co. , 1915 AC 847. It has however been recognised that where a trust is created by a contract, a beneficiary may enforce the rights which the trust so created has given him.
vs. Seltridge and Co. , 1915 AC 847. It has however been recognised that where a trust is created by a contract, a beneficiary may enforce the rights which the trust so created has given him. The basis of that rule is that though he is not a party to the contract his rights are equitable and not contractual. The Judicial Committee applied that rule to an Indian case Khuiaja Muhammad Khan vs. Husaini Begum, 1910 (37) Ind App 152. In a later case Jamna Das vs. Ram Autar, 1911 (39) Ind App 7 the judicial Committee pointed out that the purchaser's contract to pay off a mortgage debt could not be enforced by the mortgagee who was not a party to the contract. It must therefore be taken as well settled that except in the case of a beneficiary under a trust created by a contract or in the case of a family arrangement, no right may be enforced by a person who is not a party to the contract. " ( 10 ) THE present case is not one of creating a trust nor is it a case of family arrangement so that a third party may claim the right to enforce any terms of the agreement as a beneficiary. ( 11 ) WE, thus, find that the learned Single Judge erred in law in holding that on the basis of the averments made in the plaint, any cause of action accrued in favour of the plaintiff to institute a suit for damages or injunction against the appellant. The other relief claimed in the suit are all consequential to the claim of damages and therefore, it is a fit case for rejection of the plaint as even if we accept all the averments made in the plaint to be true, no cause of action accrued in favour of the plaintiff to sue the appellant or the respondent No. 2. ( 12 ) WE, thus, set aside the order impugned and allow the appeal. The plaint filed by the respondent No. 1 is rejected. ( 13 ) IN the facts and circumstances, there will be however, no order as to costs. Appeal allowed.