Orissa High Court
Surendra Kalia vs Sant Shri Asharamji Manav Uttahan Trust on 7 November, 2017
Author: Biswanath Rath
Bench: Biswanath Rath
ORISSA HIGH COURT : C U T T A C K
C.M.P. NO.1401 OF 2014
In the matter of an application under Articles 226 and 227 of the
Constitution of India.
Surendra Kalia : Petitioner
-Versus-
Sant Shri Asharamji Manav Uttahan Trust : Opp. Party
For petitioner : M/s.S.K.Dash & S.Mohapatra
For O.P : M/s.A.B.Lenka & S.Mishra
PRESENT:-
THE HONOURABLE MR. JUSTICE BISWANATH RATH
Date of hearing : 25.10.2017 & Date of Judgment : 07.11.2017
Biswanath Rath, J.This Civil Misc. Petition involves a challenge to the order dated 16.12.2013 passed in C.S. No.604/2013 by the Civil Judge (Sr.Divn.), Puri thereby refusing to accept a compromise between the parties under Order 23 Rule 3 of C.P.C. to conclude the suit in the terms and conditions stated therein.
2. Short background involved in the case is that the petitioner as plaintiff making opposite party as defendant filed a suit for declaration as follows :-
"a. Let it be declared that as per sale deed bearing no.1531300637, dt-8.3.2013, no consideration amount was passed to plaintiff and that document may be treated as a Gift deed instead of sale deed.2
b. Cost of the suit be awarded in favour of the plaintiff.
c. Any other relief/s as deed fit and proper be awarded in favour of the plaintiff."
Upon receipt of notice, sole defendant on its appearance, both the parties filed a compromise petition under Order 23 Rule 3 of C.P.C. with joint affidavit and the sole defendant while admitting the plaint claim indicated therein to go for amicable settlement and in the event the plaintiff's suit is decreed, then the defendant also expressed that it will have no objection for the same. For the agreement between the parties for their being no dispute between them on the request made in the suit, the joint application under Order 23 Rule 3 of C.P.C. was filed by both the plaintiff and defendant praying therein as follows :-
"TERMS AND CONDITIONS a. Let the deed bearing no.1531300637, dt- 8.3.2013, be treated as a document of Gift and no consideration was passed in favour of the plaintiff.
b. Defendant by strength of that document can also mutate his names before the concerned authority, wherein the plaintiff will have no objection."
Hearing the joint application and considering the rival contentions, the trial court rejected the application by the impugned order and posted the case to the next date directing the defendant to file its written statement. It appears, in the meantime, the defendant has 3 already filed written statement while accepting the plaint claim clearly disclosing that it intends to go for amicable settlement also submitting therein that it has no objection in the event the plaintiff's suit is decreed.
3. Assailing the impugned order, Sri S.K.Dash, learned counsel for the petitioner not only applied a wrong ratio of the Hon'ble Supreme Court to the case at hand but failed in appreciating the purpose behind Section 26 of the Specific Relief Act. Similarly, there is also failure of appreciation of the provisions contained in Section 23 of the Indian Contract Act. It is also contended that following the principle contained in Section 26 of the Specific Relief Act permitting initiation of suit for rectification of the instrument in the event of mutual mistake of the parties. It is thus submitted by Sri Dash that the impugned order is an outcome of failure of appreciating the provisions of law indicated herein above, wrong consideration of the decision of the Hon'ble apex Court taken note in the impugned order and also the settled position of law as passed by various courts.
Under the premises, Sri Dash, learned counsel for the petitioner prayed this Court for interfering with the impugned order and setting aside the same and further granting appropriate relief to the petitioner.
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4. Sri A.B.Lenka, learned counsel for the opposite party, on his no objection to the request for decree involving the suit made a fair statement that for involvement of a joint application under the provision under Order 23 Rule 3 of C.P.C., the trial court was bound to accept the same and close the suit recording the compromise.
5. Considering the rival contentions of the parties, this Court finds, looking to the relief sought for and the facts mentioned in the joint application under Order 23 Rule 3 of C.P.C. and further taking into consideration the terms and conditions agreed to therein by both the parties and the prayer therein, this Court finds, the parties have the support of provision of Section 26 of the Specific Relief Act. The case involved is admittedly a case of registration of instrument under bona fide mistakes.
Going through the decision in Bepin Krishna Ray & others vrs. Jogeshwar Ray & others decided by the Calcutta High Court on 14th June, 1921 reported in 66 Ind Case 345 deciding the question as to can a plaintiff get a decree for rectification as prayed for in paragraph-9 therein held as follows :-
"9. The first point for consideration is, whether, through a mutual mistake of the parties, the mortgage instrument in this Base does not truly express their intention; in other words, the plaintiffs who seek the assistance of the Court for the rectification of the written instrument must clearly prove that there was a prior complete agreement which according to the common intention was embodied in writing, but by 5 reason of mistake in framing the writing, this did not express or give effect to the agreement. As James, V. C., tersely expressed the substance of the matter in Mackenzie v. Coulson (1839) 8 Eq. 863. "Courts of Equity do not rectify contracts, they may and do rectify instruments purporting to have been made in pursuance of the terms of contracts." To the same effect are the observations of Chelmsford, L. C., in Fowler v. Fowler(1859) 4 Dc. G. & J. 250 : 45 E. R. 97 : 124 R. R.
234. "The power which the Court possesses of re- forming written agreements where there has been an omission or insertion of stipulations contrary to the intention of the parties and under a mutual mistake, is one which has been frequently and most usefully exercised. But it is also one which should be used with extreme care and caution. To substitute a new agreement for one which the parties have deliberately subscribed ought only to be permitted upon evidence of a different intention of the clearest and most satisfactory description. Lord Thurlow's language is very strong on this subject; he says, 'the evidence which goes to prove that the words taken down in writing were contrary to the concurrent intention of all parties must be strong, irrefragable evidence;' Shelburne v. Inchiqain (1784) 1 Erc. C. C. 338 at p 340 : 28 E. R. 1166. And this expression of Lord Thurlow is mentioned by Lord Eldon in Townshend (Marquis) v. Stangroom (1801) 6 Ves. 328 at p. 334 : 31 E. R. 1076 : 5 R. R. 312. without disapprobation. If, however, Lord Thurlow used the word 'irrefragable' in its ordinary meaning, to describe evidence which cannot be refuted or overthrown, his language would require some qualification; but it is probable that he only meant that the mistake mast be proved by something more than the highest degree of probability, and that it must be such as to leave no fair and reasonable doubt upon the mind that the deed does not embody the final intention of the parties. It is clear that a person who seeks to rectify a deed upon the ground of mistake must be required to establish is the clearest act moat satisfactory manner, that the alleged intention to which he desires it to be made conformable continued concurrently in the minds of all parties down to the time of its execution, and also must be able to shew exactly and precisely the form to which the deed ought to be brought. For there is a material difference between setting aside an instrument and rectifying it on 6 the ground of mistake. In the latter case, you can only act upon the mutual and concurrent intention of all parties for whom the Court is virtually making a new written agreement." The true position then is, that in every case where rectification is sought, it must clearly and satisfactorily appear that the precise terms of the contrast had been orally agreed upon and that the writing afterwards signed failed to be, as it was intended, an execution of such previous agreement, but, on the contrary, expressed a different contrast. Tested from this point of view, the case for the plaintiffs is abundantly made out. In the first place, there is reliable oral evidence of the negotiations antecedent to the execution of the mortgage instrument, which shows that what was intended to be offered and accepted as security was the 2 as. 4 gds. ancestral share of the mortgagor in the original estate Tauzi No. 93 which at the time of the mortgage was part of the separate account Tauzi No. 93A; oral evidence was plainly admissible for this purpose Balkishen Das v. W. F. Legge 22 A. 149 (P. C.) : 4 C. W. N. 153 : 2 Bom. L. R. 523 27 I. A. 58 : 7 Sar. P. C. J. 601 : 9 Ind. Dec. (N. S.) 1130., Jiwraj Singhji v. Norwich Assurance Co. 5 Bom. L. R. 853. In the second place, we have the admission of the mortgagor in the conveyance executed by him on the 11th April 1911 that he had mortgaged to Jagadiswar Roy the 2 as. 4 gds. share obtained by him from his father in Tauzi No. 93A, In the third place, the surrounding circum stances point to the same conclusion. At the date of the mortgage, the mortgagor did not possess a 2 as 4 gds. share in what was then Tauzi No. 93, that is, the residuary estate. To hold that, notwithstanding this circumstance, he professed to hypothecate a share in excess of what he owned in fact, would be to attribute to him a design to defraud the mortgagee; there is no indication that he harboured sash intention; on the other hand, the subsequent admission contained in the conveyance of the 11th April 1911 militates against a possible theory of fraud. Consequently, if, we look at the surrounding circumstances existing when the contract was entered into, the situation of the parties, the subject-matter of the contrast, the provisions and expressions of the instrument, and if, further, we call in aid the acts done under the instrument, and contemporaneous writings made between the parties near or subsequent to the 7 time when the deed was executed, we cannot but come to the conclusion that the evidence is clear and convincing that the mortgage instrument does not correctly describe the property which the mortgagor and mortgagee agreed should be given and accepted as security. Here then is an instance, not of mistake as to the identity of the property itself, but of a misdescription of it in the written instrument. This is precisely the class of cases where re-formation is decreed, provided the mistake was mutual: Walden v. Skinner (1880) 101 U. S. 577 : 25 Law. Ed. 968. Adams v. Handerson (1897) 168 U. S. 573 : 42 Law. Ed, 584., and examples are by no means rare where correction has been made in the description of the premises in deeds, mortgages, conveyances, particularly mistakes in the number of the township, section, lot, block, boundary line, or street. That the mistake was mutual in this case cannot we think be seriously disputed. Both parties, as is amply clear on the evidence, had the common intention that the 2 as. 4 gds. share of the mortgagor inherited by him from his father should be hypothecated. That share, at the time of the transaction, was included in Tauzi No. 93A and not in Tauzi No. 83. The writer of the deed, however, described it as included in Tauzi No. 93. There is no direct evidence to show how this error was brought about, nor is it necessary to indulge in speculation on that point. The only question is, whether the mistake was mutual, that is, a mistake reciprocal and common to both parties; in other words, whether each alike laboured under the same misconception in respect to the terms of the written instrument. To put the matter concisely, was there a common intention different from the expressed intention and a common mistaken supposition that it was rightly expressed. The answer must be in the affirmative; for this, it is not necessary to hold that a mutual mistake of the agents of the parties is always necessarily a mistake of the parties; but undoubtedly it would be in the case where the error was committed by a writer who acted as common agent of both parties in drafting the instrument. The essence of the matter is that, mutuality of mistake might arise from the fast that the mistake was made by a writer who acted as mutual agent of both parties in reducing the contract to the form of a written instrument. Where there is unilateral mistake, rectification is refused on the ground that, if the Court were to re-form the writing 8 to make it record with the intent of one party only to the agreement, who averred and proved that he signed it as it was written, by mistake, when it exactly expressed the agreement as understood by the other party, the writing when so altered would be just as far from expressing the agreement of the parties as it was before, and the Court would have been engaged in what would be a singular task for a Court of Equity to undertake, namely, doing right to one party at the expense of a precisely equal wrong to the other. No such consideration obviously arises in eases of the type now before us, for it cannot be urged here that in granting relief to the plaintiff on the ground of his mistake, the Court would be imposing upon the other party the erroneous conception of his opponent. It may further be added that if the theory be adopted that the mistake was brought about deliberately by the mortgagor, his conduct might be deemed fraudulent, so that on establishment of fraud the mortgagee might claim rectification mistake or no mistake. Consequently, where the defendant is shown to have been aware not only that the instrument did not express the real agreement but also that the plaintiff was ignorant of the discrepancy between the instrument and the agreement, the case is clearly one for re- formation: Clark v. Girdwood (1877) 7 Ch. D. 9 : 47 L. J. Ch. 116: 37 L. T. 614 : 26 W. R. 90. Lovssy v. Smith (1880) 15 Ch. D. 655, 49 L. J. Ch. 809 : 43 L. T. 240 : 28 W. R. 979. Corley v. Stafford (Lord) (1857) 1 De G. & J. 238 : 26 L. J. Ch. 865 : 3 Jur. (N. S.) 1225 : 5 W. R. 646 : 44 E. R. 714 : 118 R. R., Tucker v. Bennett (1888) 38 Ch. D. 1 : 57 L. J. Ch. 507, 58 L. T. 650.
There is thus no escape from the conclusion that the circumstances of the case before us attract the operation of the rule that, in order to justify rectification. there must be proof of a common intention different from the expressed intention and a common mistaken supposition that the intention is rightly expressed in the instrument; it matters not by whom the actual oversight or error was made which caused the expression to be wrong.
6. Looking to the observations of the Calcutta High Court, this Court finds, for the admitted situation involving the case 9 at hand that the omission claimed for is not only bona fide but also a common mistaken supposition while registering the instrument. As such the decision therein has a direct application to the case at hand.
7. Looking to a decision of this Court in Bidyadhar Mohanty & another vrs. Ananta Hota & another reported in AIR 1956 Ori 83 deciding the subject matter involved therein in paragraphs-4, 7 & 8 of the said judgment held as follows :-
"4. The question before the Courts was whether the registered kabala dated 9-10-1948 executed by the defendants correctly represents the intention of the parties and if it does not, what is the appropriate relief that should be granted to the plaintiff. Both the Courts below held that the defendants had in fact agreed to sell 1.10 acres of land in Sambara Chaka and that they received full consideration as alleged by the plaintiff.
The trial Court directed the dismissal of the suit. Though it came to the finding that the sale deed was executed fraudulently, it refused to grant a declaration of title or confirmation of possession as, in its view, the contract between the parties could not be specifically enforced in the present suit.
The learned Additional District Judge, who heard the appeal, while recording his concurrence with the findings of the learned Munsif, held that the plaintiff was not under an obligation to seek a rectification of the sale deed and that the Court itself could grant the relief by way of putting him in possession in this very suit.
Accordingly, the point that has been urged before us in this second appeal is whether the plaintiff should be driven to file another suit for rectification of the sale deed in question, or whether in this very suit the Court can grant equitable relief by way of a 10 declaration of the plaintiff's title to the lands which had actually been agreed to be sold.
Mr. Das, appearing for the defendants-
appellants contended that as the second defendant is a minor no relief by way of specific performance should be granted to the plaintiff, but in my opinion there is no substance in this plea when the concurrent findings of the two Courts is that the minor has been benefited by receipt of consideration money and has executed the sale deed along with defendant 1 conveying these properties.
7. It will be found, therefore, that the Courts have consistently applied the equitable principle of giving relief to a party entitled to it, without driving him to file a separate suit for rectification of a mistake fraudulently inserted in a conveyance.
8. Section 31 of the Specific Relief Act was pressed upon our attention but the very language of that Section indicates that it is not obligatory upon a person interested in a contract, to have it rescinded by a suit. There is nothing in the rules of procedure making it obligatory upon a party to ask for rectification of a contract, before claiming declaration of title to the property agreed to be sold.
No authority has been placed before us, laying down a contrary principle and the only point that was urged with some vehemence was the fact that One of the defendants is a minor. I do not think that this fact makes any difference so far as the applicability of the equitable principle is concerned. Defendant 2 acting through his guardian received the consideration money and executed the sale deed. I fail to understand why he should be permitted to retain the benefit he has received without complying with the terms of the contract.
This Court taking into consideration several other decisions taken note therein in paragraph-9 granted a decree to the plaintiff with observation that the plaintiff was right in moving such 11 a suit and there was no requirement for going for a rectification suit, which view also gets support of the decisions in Asltulla vrs.
Sadatulla, AIR 1918 Cal 809 (C) and Dagdu vrs. Bhana, 28 Bom 420 (G). Taking note of another decision in Sheo Murat vrs. Ram Murat, AIR 2004 All 263 involving a case of rectification of the sale deed in exercise of power under Section 26 of the Specific Relief Act, the Allahabad High Court for the facts available in the said case almost similar to the case at hand held that the appellant-
respondent cannot be deprived of his right for rectification of the sale deed and confirmed the decree being granted by the trial court.
8. For the facts situation involved herein, the joint compromise petition at the instance of both the plaintiff and the defendant admitting bona fide mistaken impression on particular aspect and for the provision under Section 26 of the Specific Relief Act being applicable to the case at hand, this Court finds, the impugned order is not sustainable in the eye of law. Perusing the decision relied upon by the trial court in M/s.Afcons Infra. Ltd. & another vrs. M/s.Cherian Varkey Constn., this Court finds, there has been wrong application of the said judgment to the case at hand.
9. Under the circumstance, this Court while interfering with the impugned order sets aside the same and thereby 12 directs the trial court to pass a decree recording the terms and conditions indicated in the application under Order 23 Rule 3 of C.P.C. Parties are also directed to appear before the trial court on 16th November, 2017 and the trial court is directed to conclude the entire exercise within a period of one month thereafter.
10. The Civil Misc. Petition succeeds. No cost.
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Biswanath Rath, J.
Orissa High Court, Cuttack.
The 7th day of November, 2017/mkr, secy.