Calcutta High Court
Sachchidananda Banerjee vs Moly Gupta & Others on 21 March, 2017
Equivalent citations: AIR 2017 CALCUTTA 89, (2017) 2 CALLT 342, (2017) 3 CAL LJ 27, (2017) 2 ICC 757, (2017) 2 CAL HN 176
Author: Biswanath Somadder
Bench: Biswanath Somadder
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
Original Side
Present :
THE HON'BLE MR. JUSTICE BISWANATH SOMADDER
AND
THE HON'BLE MR. JUSTICE SANKAR ACHARYYA
APD No. 1 of 2015
with
C.S. No. 643 of 1990
SACHCHIDANANDA BANERJEE
-Vs.-
MOLY GUPTA & OTHERS
For the appellant : Mr. Sabyasachi Chowdhury, Adv.
Mr. Nirmalya Ray, Adv.
For the respondents : Mr. Reetabrata Mitra, Adv.
Mr. R. Ghosh, Adv.
Mr. M.A. Jabbar, Adv.
Mr. N. Khanjoy, Adv.
Heard on : 7th December, 2016 Judgment on : 21.03.2017
The Court : Being aggrieved and dissatisfied with the judgment and decree of dismissal dated 2nd December, 2014 (hereinafter referred to as the impugned judgment) passed by Hon'ble Single Judge in C.S. No. 643 of 1990, the plaintiff/appellant has preferred this appeal.
Plaintiff/appellant filed the suit against Karuna Gupta and her son Samir Kumar Gupta as defendants nos. 1 and 2 respectively for specific performance of contract by the said Karuna Gupta on the basis of a written agreement dated, August 13, 1988 between Karuna Gupta and the plaintiff for sale of the premises no. 12F, Nather Bagan Street, Calcutta. The said defendants filed separate written statements.
During pendency of the suit in the First Court, Karuna Gupta died on 5th November, 1995 and the plaintiff, upon amendment of plaint, stated that the then defendant no. 2, Samir Kumar Gupta was her sole heir and legal representative. On 7th September, 2007, the said suit was decreed ex parte in favour of the plaintiff on the belief that a fresh notice as per the direction of the Court was given to the said defendant Samir Kumar Gupta but none turned up on behalf of the defendant. The plaintiff, as decree-holder, filed an execution case and that execution proceeding being no. G.A. 515 of 2008 was disposed of on 11.03.2008 by the Hon'ble Single Judge. Thereafter, the respondents in this appeal - as heirs and legal representatives of Samir Kumar Gupta - filed an application for setting aside the ex parte decree of suit and order of disposal passed in the execution proceeding, inter alia, on the ground, in substance, that the said decree and orders were passed against the defendant no. 2, Samir Kumar Gupta, who was declared dead by a competent Court of law on 6th June, 2007 as the said Samir Kumar Gupta was missing from 18th June, 1997 and remains missing for more than seven years continuously, which was within the knowledge of the plaintiff. The said application of the respondents was allowed on 19th December, 2011 by an Hon'ble Single Judge in G.A. No. 1400 of 2010. The ex parte decree and the order passed in the execution proceeding were set aside. Plaintiff/appellant filed an appeal, being no. APOT 344 of 2012 before a coordinate Division Bench and in that appeal it was observed "......we think that the learned Trial Judge has passed the perfect order and it does not call for any interference". The said appeal was disposed of on 28th August, 2012. Thereafter, the present respondents - as heirs (wife, son and daughter) of Samir Kumar Gupta - contested the suit in the First Court and after completion of trial, the impugned judgment and decree of dismissal was passed.
As per pleadings of the suit, premises no. 12F, Nather Bagan Street, Calcutta (hereinafter referred to as the suit premises) belonged to Smt. Karuna Gupta. During her lifetime on November 26, 1983, she executed and registered a deed of settlement in respect of that property appointing herself and the youngest amongst her three sons, i.e. Samir Kumar Gupta, as trustees, reserving her right to revoke the trust by a deed alongwith some other rights exercisable during her lifetime. Thereafter, on 13th August, 1988 she executed a memorandum of agreement for sale of the suit premises to the plaintiff upon receiving a sum of Rs.80,000/- from plaintiff as earnest money out of consideration money of Rs.3,80,000/-. Subsequently, Karuna Gupta received an additional sum of Rs.5000/- from the plaintiff. Post execution of the deed of agreement, an exchange of letters began between the lawyers of the plaintiff and that of Karuna Gupta. Subsequently, there was also an exchange of letters between the lawyers on behalf of the plaintiff and Samir Kumar Gupta.
As per the plaintiff's case, learned advocate for the plaintiff came to learn first about the deed of settlement dated, 26th November, 1983 from a letter dated 29th August, 1988 forwarding copies of documents including the deed of settlement, which was sent by the learned advocate on behalf of Karuna Gupta. The said Smt. Karuna Gupta filed a written statement and contended that in spite of inspection of her documents including the document relating to the creation of encumbrance of the premises as trust property, the plaintiff and his lawyer fraudulently and dishonestly induced her to execute the agreement and receive money. The plaintiff claimed that the deed of settlement dated 26th November, 1983 was never acted upon and such plea was denied in the written statement. The plaintiff claimed that Karuna Gupta was the absolute owner of the suit premises and believing her representation, the plaintiff entered into an agreement with her and made payment of the earnest money which she accepted as absolute owner of the property. The plaintiff claimed that Samir Kumar Gupta was aware about such agreement all along and so he was estopped to controvert the plaintiff's plea. In relation to the contention of Karuna Gupta and her son Samir Kumar Gupta on the strength of deed of settlement/trust divulged in letters of their lawyers, the plaintiff pleaded that in any event, the said purported settlement is revocable at the mere wish of Karuna Gupta and in these facts and circumstances, she should be compelled to revoke the said settlement and to make the property free from any trust or obligation. The plaintiff pleaded that he was at all material times and still is willing to perform his part of the contract but Karuna Gupta and Samir Kumar Gupta failed and neglected to perform their part of the contract. The plaintiff prayed for a decree for specific performance of the contract and if necessary, for cancellation of the deed of settlement dated 13th August, 1983 and for damages and in the alternative of specific performance of contract, a decree for payment of money as compensation upon holding an enquiry. Challenging the enforceability of the agreement and plaintiff's entitlement to get a decree, the contesting defendants contended, inter alia, that the suit is not maintainable and that it is bad owing to the defect of parties and it is barred by limitation. Karuna Gupta, being a trustee in the trust property, did not have the capacity to enter into any agreement for sale of that property to the plaintiff and therefore, the said agreement dated, 13th August, 1988 is void ab initio. They prayed for dismissal of the suit.
During the trial, the plaintiff relied on his oral evidence and some documentary evidence. On the other hand, defendants adduced two letters as documentary evidence only.
In the impugned judgment, the Hon'ble Single Judge observed that Karuna Gupta conveyed and transferred the suit premises to the trustees including herself (as one of the trustees) by virtue of the deed of settlement/trust dated November 26, 1983 (Exhibit- D). It was also observed in that judgment that the original defendant no. 1 (Karuna Gupta) was entitled to execute a deed of conveyance in favour of the plaintiff notwithstanding the deed of trust and the plaintiff could have received a good title in view of section 42 of the Transfer of Property Act, 1882, but that was not the fact scenario here. Hon'ble Single Judge held, "In such circumstances, I find that the original defendant no. 1 entered into Exhibit 'A' both in breach of the terms and conditions of Exhibit 'D' as well as in excess of the power granted to her by Exhibit 'D'. on such a finding arrived at, I am afraid, the parties are guided by Section 11 of the Specific Relief Act, 1963 and the agreement for sale being Exhibit 'A' cannot be specifically enforced".
In the First Court, learned counsel for the plaintiff relied on the principles as discussed in R.S.E. Judah Vs. Mirza Abdool Kurreem reported in 1874 Volume 22, The Weekly Reporter, page-60. The said case was distinguished in the impugned judgment with the observation, "In that case, the owner executed a mortgage subsequently, having full knowledge of a prior deed of gift executed by her. The second transaction was held to prevail over the first transaction. In the instant case, the ratio will not apply since, the original defendant No.1 did not execute any conveyance in favour of the plaintiff. An agreement for sale was entered into by the original defendant No. 1 with the plaintiff and which such agreement for sale was entered into in excess of the power of the original defendant No. 1 as the trustee of the trust created by her through Exhibit 'D'. The Court cannot enforce such capability of the original defendant No. 1 in view of section 11 of the Specific Relief Act, 1963". In the impugned judgment, the plaintiff was not granted any relief and his suit was dismissed.
In the present appeal, the point for determination is whether the impugned judgment and decree are liable to be set aside or modified and if so, is the plaintiff entitled to a decree for specific performance of contract and/or any other relief as per prayers contained in the plaint.
At the time of hearing, Mr. Chowdhury, learned counsel for the appellant advanced his arguments that in the impugned judgment, section 42 of the Transfer of Property Act ought to have been applied following the judgment in R.S.E. Judah Vs. Mirza Abdool Kurreem and it would be proper to pass a decree in favour of the plaintiff for specific performance of contract. He also pointed out that in the impugned judgment, not only the prayer for specific performance of contract was refused, no decree was passed for compensation in favour of the plaintiff. According to him, the plaintiff was not aware about the existence of the deed of settlement (Exhibit- D) at the time of entering into the agreement for sale of the suit property, which is clear from the language of the deed of agreement (Exhibit- A). Drawing attention to the non obstane clause in Exhibit- D, learned advocate for the appellant submitted that Karuna Gupta reserved her right to revoke the deed of settlement/trust at her wish and subsequently, upon receiving earnest money from the plaintiff, she entered into the agreement for sale of the suit premises with the plaintiff by virtue of Exhibit-A with an undertaking under clause-3 that she would make out a good and marketable title to the said premises free from all encumbrances and liabilities whatsoever prior to completion of sale in favour of the plaintiff at her own cost and in clause-9 further stating that she would cause all necessary parties to join in and execute and register such conveyance. As such, according to him, the said Karuna Gupta was under obligation to execute and register deed of sale in respect of the suit premises in favour of the plaintiff on revocation of the deed of settlement/trust receiving balance consideration money and since she did not perform her part of contract, she should be compelled to perform the same by a decree in the suit.
On the other hand, Mr. Mitra, learned counsel for the respondents advanced his arguments that at the time of agreement, the suit premises were a trust property and Karuna Gupta was a trustee and not the absolute owner of the property and therefore, section 42 of the Transfer of Property Act was not at all applicable and the plaintiff's case cannot be guided by the provisions of the said section and is also not fortified by the principles discussed in R.S.E. Judah Vs. Mirza Abdool Kurreem. He further argued that under the provisions of section 11 (2) of the Specific Relief Act, 1963, the agreement by Karuna Gupta, a trustee, excluding another trustee, is not enforceable. Regarding the non obstane clause of Exhibit- D deed of settlement/trust he argued that the said clause is to be read as a whole and not by isolated scrutiny and that the said clause should be interpreted giving emphasis on each and every word of that clause. He further submitted that it is the settled principle that when an act is required to be done in a particular mode then the act must be done in that mode only and not in any other way. Drawing attention to the language used in the non obstane clause of Exhibit- D he submitted that, Karuna Gupta reserved her right to revoke the trust but the said revocation could be done by deed only and in the absence of such revocation by deed, the trust remained valid and there cannot be any implied revocation of the trust. He argued at length about conduct of the parties to the deed of agreement drawing attention to the language used in Exhibit-A and exhibited letters exchanged between the parties. Attention of the Court was drawn to the provisions of sections 48, 77 and 78 of the Indian Trusts Act, 1882 and the relevant provisions of the Specific Relief Act.
Having considered the arguments advanced before this Court, we are of the view that if section 42 of the Transfer of Property Act is applied to the subject matter of conflict between the parties, the case of the plaintiff/appellant will be stronger than that of defendant/respondents subject to the provisions of section 20 of the Specific Relief Act. But, if the provisions under section 11 (2) of the Specific Relief Act be treated as applicable, the claim of plaintiff/appellant for specific performance of contract must be defeated.
Section 20 of the Specific Relief Act, 1963 reads as:-
"20. Discretion as to decreeing specific performance.-
1. The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so, but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable by correction by a Court of Appeal.
2. The following are cases in which the court may properly exercise discretion not to decree specific performance -
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.
Explanation 1 - Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (b).
Explanation 2 - The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.
3. The Court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
4. The Court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party".
In the present case, the language used in the memorandum of agreement (Exhibit- A) together with the conduct of Karuna Gupta, the plaintiff and the prevailing circumstances at the time of execution of Exhibit- A, are of paramount importance for final adjudication.
Indisputably, Karuna Gupta in her individual capacity, executed Exhibit-A, an unregistered agreement with the plaintiff/appellant on 13th August, 1988 for sale of the suit premises to the plaintiff at a price of Rs.3,80,000/- and she received Rs.85,000/- (Rs.80,000/- by two pay orders and Rs.5,000/- by cash) as earnest money from plaintiff. Exhibit-D is a registered deed of settlement/trust dated 26th November, 1983 whereby the suit premises was settled in favour of the trust by Karuna Gupta wherein Karuna Gupta and Samir Kumar Gupta were trustees. Exhibit-D was signed by both the trustees and that deed was in existence at the time of the agreement.
There is no whisper about the registered deed of settlement/trust, being Exhibit - D, in the agreement, being Exhibit - A. The plaintiff claimed in the plaint and deposition that at the time of agreement he was not aware about the existence of the deed, Exhibit-D. It is obvious that Karuna Gupta, knowing well about the deed, being Exhibit-D and her right to revoke the trust, remained conspicuously silent about that vital aspect in Exhibit-A, being the unregistered agreement and received earnest money from plaintiff for sale of the suit premises in his favour. As per Exhibit-D, Karuna Gupta and Samir Kumar Gupta were made the trustees as well as beneficiaries of the suit premises and the defendants/respondents were made prospective beneficiaries as heirs of Samir Kumar Gupta. During plaintiff's examination as a witness in the First Court, it is revealed from question nos. 33, 34, 35, 36 and 37 read with letter marked 'x' sent by Karuna Gupta to plaintiff by post before the agreement that Karuna Gupta intended to keep Moly Gupta (defendant/respondent no. 1), the wife of Samir Kumar Gupta, away from any knowledge about negotiations between the plaintiff and Karuna Gupta when the plaintiff was requested not to speak about the negotiation in presence of Moly Gupta. Since Moly Gupta is the wife of Samir Kumar Gupta and there is no iota of evidence or pleading about any dispute between them, it may be safely presumed that Samir Kumar Gupta was also kept in the dark about the negotiations between Karuna Gupta and the plaintiff. The said plan was successfully given effect to by the plaintiff and Karuna Gupta jointly entering into the agreement for sale of the suit premises.
Beginning of the covenant in Exhibit-A reflects that Karuna Gupta represented herself as the absolute owner of the suit premises. By that representation it cannot be said that the plaintiff was aware of the existence of the deed, Exhibit- D. Section 42 of the Transfer of Property Act reads as:-
"42. Transfer by person having authority to revoke former transfer.- Where a person transfers any immovable property, reserving power to revoke the transfer, and subsequently transfers the property for consideration to another transferee, such transfer operates in favour of such transferee (subject to any condition attached to the exercise of the power) as a revocation of the former transfer to the extent of the power.
Illustration A lets a house to B, and reserves power to revoke the lease if, in the opinion of a specified surveyor, B should make a use of it detrimental to its value. Afterwards A thinking that such a use has been made, lets the house to C. This operates as a revocation of B's lease subject to the opinion of the surveyor as to B's use of the house having been detrimental to its value".
On a plain reading of the aforesaid section, it is clear that the same is applicable when there are two transfers of the same immovable property where in the former transfer, the transferor reserved his / her lawful right to revoke the transfer and the latter transfer is one for consideration to another transferee. If the transferor fulfils any condition attached to the exercise of power of revocation, the former transfer shall stand revoked and the latter shall prevail. In the instant case, right of Karuna Gupta to revoke the trust was indisputably present at the time of her entering into agreement for transfer of the suit property, upon receiving earnest money from plaintiff.
The plaintiff/appellant in paragraph 10 of the plaint claimed that the trust/settlement deed, Exhibit-D was never acted upon. The plaintiff, in the witness box gave his answer to question no. 71 which is setout hereunder:-
"It has been alleged that the property belongs to a trust and Karuna Gupta did not have the right to enter into the agreement with you - what do you say?
She had been living in that house as tenants for a very long time. We were three tenants in the entire house. Karuna Gupta used to issue bills and receipts to each of us individually and during the term of the tenancy this trust was formed but she had not informed us in any manner whatsoever. After the agreement was executed she had issued rent receipts individually. If we had known it as trust property, we would not have taken the property. I had met Samir Gupta on several occasions while tendering the rent but he had also never mentioned that there was a trust deed or it was a trust property".
In our view, the said explanation of the plaintiff is not sufficient to hold that the deed, Exhibit- D was not acted upon. On perusal of the deed, Exhibit-D it appears from the 'Habendum' clause that Karuna Gupta, being the settlor, expressed inter alia, that the object and purpose of the trust for her use of the property during the term of the natural life without impeachment of waste and with her full power and absolute authority to hold, enjoy, use and occupy the hereditament and to collect rents, issues, profits and income thereof in her own name and appropriate the same for her sole use and benefit without being in any way accountable therefor subject to her liability for payment of rates, taxes, revenue etc. Therefore, receiving rent from the tenant and issuing rent receipts to that effect by Karuna Gupta individually does not have the effect of the deed not being acted upon. Although the deed, Exhibit-D reveals that Karuna Gupta had two other sons, after the death of Karuna Gupta, her said sons were not substituted by the plaintiff as her heirs and legal representatives in the suit. In paragraph 21A of the plaint it was stated, after amendment, that defendant no. 2 (Samir Kumar Gupta) is her sole heir and legal representative. It can be safely held that on the death of Karuna Gupta, the plaintiff acted as if the deed, Exhibit-D, was acted upon. This stance of the plaintiff seems to be a self-contradiction. This is a vital aspect, after the death of Karuna Gupta, was required to be noticed, but the learned Single Judge did not take such notice of it in the impugned judgment.
In Exhibit- D, the settlor Karuna Gupta reserved her right to withdraw the suit property from the trust and to revoke the trust in her absolute discretion at any time but of course by virtue of a deed. Admittedly, she executed Exhibit- A receiving consideration of Rs.80,000/- from the plaintiff which appears to be her implied withdrawal of the property from the trust, though not specifically expressed therein. In our view, by virtue of the deed, Exhibit- A, Karuna Gupta made herself bound to revoke all limitations, trusts, powers and provisions declared of or dispose of the same freed from the settlement exercising her independent and absolute right which was kept reserved by Exhibit-D since a plain reading of the non obstante clause of Exhibit-D reveals that it does not mandate registration of the deed of revocation and also does not prohibit such revocation in a composite deed or by a separate deed for withdrawal of the property from trust and for revocation of the trust relating to disposal of the hereditament. Karuna Gupta might have impliedly expressed in Exhibit-A that she had revoked the trust for disposal of the hereditament, exercising her right as reserved in non obstane clause of Exhibit-D. In the absence of such recital about the fact that the suit premises was the property of the trust created by Karuna Gupta and in the absence of any express statement from her regarding withdrawal of the suit premises from the trust, it cannot be interpreted that her acceptance of Rs.85,000/- was under the pretence that whereas the property belonged to the trust, the agreement is not enforceable as she entered into the agreement for sale of her absolute property with the plaintiff/appellant on 13th August, 1988 by virtue of Exhibit-A, being a deed of agreement. The conduct of Karuna Gupta is very much relevant here. We make it clear that a written agreement enforceable in law or in equity is also a "deed" as per the definition of "deed" in Halsbury's Laws of England, 4th Ed. Vol. 13P. 5. Law is not a skeleton only, it has a complete structure with all active limbs which is required to be perceived.
In the impugned judgment, the Hon'ble Single Judge observed that Karuna Gupta conveyed and transferred the suit premises to the trustees including herself (as one of the trustees) by virtue of the deed of settlement/trust dated November 26, 1983 (Exhibit- D). It was also observed in the judgment that the original defendant no. 1 (Karuna Gupta) was entitled to execute a deed of conveyance in favour of the plaintiff notwithstanding the deed of trust and the plaintiff could have received a good title in view of section 42 of the Transfer of Property Act, 1882, but that was not the fact scenario.
The Hon'ble Single Judge thereafter proceeded to observe as follows:-
"The original defendant No. 1 did not execute any conveyance in favour of the plaintiff, therefore, necessitating the suit for specific performance. The original defendant No. 1 instead of executing a deed of trust entered into an agreement for sale being Exhibit 'A' with the plaintiff. Once the plaintiff comes to Court to enforce the agreement for sale the question whether such an agreement can be specifically enforced in view of Section 11 (2) of the Specific Relief Act, 1963 requires an answer".
In order to find out as to whether section 11 (2) of the Specific Relief Act would actually operate as a bar for the agreement of sale from being specifically enforced, one needs to have a close look at the deed of trust, especially with regard to the intention of the settlor, Karuna Gupta, as spelt out by her by virtue of the introduction of the non obstante clause as contained in the trust deed, which reads as follows:
"Notwithstanding anything contained hereinbefore the settlor may at any time or times by deed wholly withdraw the property hereby settled from this settlement for her absolute use or otherwise howsoever and without substituting any equivalent for the same or any portion or portions of the hereditament hereby settled and may by such deed revoke all limitation, trusts, powers and provisions declared of or concerning the hereditaments so withdraw and appropriate or dispose of the same freed from this settlement in any manner as the settlor shall in her absolute discretion think fit and proper".
A plain reading of the above clause reveals the clear intention of the settlor, Karuna Gupta, and its importance cannot be swept aside. The learned single Judge, while considering the issue with regard to applicability of section 11 (2) of the Specific Relief Act, took notice of the fact that the original defendant no. 1 did not execute any conveyance in favour of the plaintiff, therefore, necessitating the suit for specific performance. The learned single Judge further observed to the effect that the original defendant no. 1 instead of executing a deed of revocation of trust entered into an agreement for sale with the plaintiff. The question, however, is whether in the facts of the given case such deed of revocation of trust was required to be at all executed by the settlor along with her son and only then enter into an agreement for sale with the plaintiff, which would then be specifically enforceable. The answer can only be found from the clear intention of the settlor, which is apparent from the non obstante clause reproduced hereinbefore. The expression "by deed" would have ordinarily meant a deed of revocation of trust had it not been for the particular and specific expression, "notwithstanding anything contained hereinbefore", which carves out an exception and delineates the manifest intention of the settlor, Karuna Gupta, when one looks at the Deed of Settlement and reads it as a whole. Such manifest intention of the settlor, Karuna Gupta, was to reserve an exclusive right over the property she settled notwithstanding creation of the Trust - in terms of and in such manner as stated in the non obstante clause, keeping all other clauses as contained in the Deed of Settlement out of harm's way. The expression, "by deed", therefore - in the given facts - would include an agreement for sale - which is also a "deed" - that the settlor entered into with the plaintiff on the basis of the non obstante clause.
Thus, the instant case cannot be said to be hit by section 11 (2) of the Specific Relief Act. Rather, the principles of section 42 of the Transfer of Property Act ought to have been attracted following the ratio of the judgment rendered in R.S.E. Judah Vs. Miraz Abdool Kurreem, wherein Statute 27, Elizabeth, Chapter IV, was referred to and relied upon.
The plaintiff was not aware about the existence of the deed of settlement (Exhibit-D) at the time of entering into the agreement for sale of the suit property, which is clear from the language of the deed of agreement (Exhibit-A). Karuna Gupta, in terms of the non obstante clause, reserved her exclusive and absolute right to revoke the deed of settlement/trust purely at her discretion. Upon receiving earnest money from the plaintiff, she entered into an agreement for sale of the suit premises with the plaintiff with an undertaking contained in clause-3 that she would make out a good and marketable title to the said premises free from all encumbrances and liabilities whatsoever prior to completion of sale in favour of the plaintiff at her own cost. In clause-9, she further undertook to cause all necessary parties to join in and execute and register such conveyance or conveyances. As such, the said Karuna Gupta was under an obligation to execute and register deed of sale in respect of the suit premises in favour of the plaintiff upon receiving balance consideration money.
In the plaint, in addition to plaintiff's prayer for specific performance of contract, there is a prayer for getting decree for compensation also. In the impugned judgment, plaintiff's prayer for compensation has not been considered properly according to the facts, circumstances, evidence on record and the legal aspect. The facts which ought to have been considered in the impugned judgment are plaintiff's payment of earnest money to Karuna Gupta, death of Karuna Gupta, legal liability, if any, of the defendants, offer given by Karuna Gupta to the plaintiff by virtue of Exhibit-G letter during her lifetime and plaintiff's failure to make the other heirs of Karuna Gupta as party to the suit, although it is evident in Exhibit- D that she had three sons including Samir Kumar Gupta.
Section 21, Specific Relief Act, 1963 reads as:-
"21. Power to award compensation in certain cases.- (1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.
(2) If, in any such suit, the Court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.
(3) If, in any such suit, the Court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.
(4) In determining the amount of any compensation awarded under this section, the Court shall be guided by the principles specified in Sec. 73 of the Indian Contract Act, 1872 (9 of 1872).
(5) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint.
Provided that where the plaintiff has not claimed any such compensation in the plaint, the Court shall, at any stage of the proceedings, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation.
Explanation.- The circumstance that the contract has become incapable of specific performance does not preclude the Court from exercising the jurisdiction conferred by this section". Section 73, Indian Contract Act, 1872 reads as:-
"73. Compensation for loss or damage caused by breach of contract.- When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach".
In light of the above discussion on facts, circumstances, evidence on record and the relevant law on the subject, we have no hesitation to observe that Karuna Gupta entered into an enforceable contract for sale of the suit property in favour of the plaintiff and she received a sum of Rs.85,000/- as earnest money from him. During her lifetime, she could have been made liable to execute and register a deed of sale in respect of the suit property in favour of the plaintiff upon receiving balance consideration money. A decree for specific performance of contract against her would have been the proper course of law. A direction upon her could have been issued to express specifically in that deed of transfer that she had revoked the trust in so far as the suit property is concerned. This is in order to fulfil the requirements of sections 77 and 78 of the Indian Trusts Act for extinguishment of the trust by revocation of trust. The fact scenario, however, changed when Karuna Gupta died pendente lite and the plaintiff did not bring all her heirs and legal representatives, except Samir Kumar Gupta and his heirs, as party defendants, as discussed in the earlier part of this judgment. We, therefore, make it clear that the above findings cannot be enforced against the other heirs of Karuna Gupta following the legal maxim "Audi alteram partem" (no man should be condemned unheard). It is significant to note that in August, 1988, the plaintiff got a copy of the deed, Exhibit-D, where a description of two other sons of Karuna Gupta beside Samir Kumar Gupta is present. Despite plaintiff's knowledge about such facts, the plaintiff did not make the said two sons of Karuna Gupta parties after her death, although it is his specific case that Karuna Gupta - in her personal capacity and not as a trustee - had agreed to sell the suit property to plaintiff. The defendants/respondents are heirs of one of the three sons of Karuna Gupta. They cannot be held liable to shoulder the entire responsibility of Karuna Gupta for performing her part of the contract. In such a case, a divisible decree for specific performance of contract is neither equitable nor justifiable against the defendants/respondents. In view of section 21 of the Limitation Act, the plaintiff-appellant did not take steps to make the other heirs of Karuna Gupta a party to the suit, well within the period of limitation. As such, it is not a fit case for passing a decree for specific performance of contract in exercise of discretion of Court under section 20 (1) of the Specific Relief Act, 1963.
It is extremely pertinent to mention that although the plaintiff made a specific prayer in the plaint for getting compensation against the defendants, neither any issue was framed before the First Court in this regard nor was such prayer considered in the impugned judgment. It is an undisputed fact that Karuna Gupta received Rs.85,000/- in her personal capacity and not as a trustee from the plaintiff. The said amount was never repaid by her to the plaintiff. Therefore, the plaintiff's prayer for compensation ought to have been considered by the First Court, especially when the plaintiff's prayer for specific performance of contract was not allowed. As observed hereinbefore, we are not satisfied enough to pass a decree for specific performance of contract in favour of the plaintiff against the defendants of the suit. However, we find it justified to frame an issue in respect of plaintiff's prayer for getting compensation and to send the suit - on remand - to the First Court for deciding that issue only and to dispose of the suit in the light of the observations made in this judgment.
Accordingly, we frame issue no. 5 in the suit as:-
"5. Is the plaintiff entitled to get a decree for compensation against the defendants and if so, to what extent?"
The impugned judgment and decree is set aside and the suit (C.S. 643 of 1990) is hereby remanded to the First Court for deciding issue no. 5 - as framed hereinbefore - and for disposal of the suit in the light of the observations made earlier in this judgment.
This appeal stands disposed of accordingly.
(SANKAR ACHARYYA, J.) (BISWANATH SOMADDER, J.)