Calcutta High Court (Appellete Side)
Sankar Chandra Saha vs Badal Krishna Pal & Ors on 18 July, 2017
Author: Jyotirmay Bhattacharya
Bench: Jyotirmay Bhattacharya
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Present:
The Hon'ble Justice Jyotirmay Bhattacharya
AND
The Hon'ble Justice Shivakant Prasad
F.A. 14 of 2017
Sankar Chandra Saha
-Versus-
Badal Krishna Pal & Ors.
For the Appellant : Mr. Amal Krishna Saha,
Mr. Sankar Biswas.
For the Respondents : Mr. Shivoprosad Ghosh.
Heard on : 17th July, 2017 & 18th July, 2017. Judgement on : 18th July, 2017. Jyotirmay Bhattacharya, J. :-
The first appeal is directed against the judgement and decree dated 30th March, 2016 passed by the learned Civil Judge, Senior Division, 1st Court Barasat in Title Suit No. 144 of 2004 at the instance of defendant no.1/appellant. By the said decree, the suit was decreed on contest against the defendant no.1. and ex parte decree against the defendant nos. 2 to 5 without costs. It was declared that the plaintiff was entitled to have the alleged contract specifically enforced against the defendants subject to condition that the defendants redeem the mortgage, if any and obtain a valid discharge within ninety days from the date of the decree after which the plaintiff shall be depositing the balance consideration money of twenty nine lakhs (Rs. 29,00,000/-) to the credit of the defendant within next sixty days from the date of such redemption of mortgage and obtaining valid discharge. The defendants were directed to execute and register a sale deed in plaintiff's favour at the expenses of the plaintiff within three months from the date of the deposit of the above amount by the plaintiff, with a rider that in default of such deposit by the plaintiff within the time fixed for him, the suit shall be dismissed without costs against the defendants.
If the defendants fail to execute or register the document within the time fixed for him, the plaintiff shall be at liberty to execute and register the same through the Court. It was further declared that the plaintiff is also entitled to possession of the suit property through Court, if prayed for. It was further directed that the defendant is also entitled to withdraw the deposited amount after execution and registration of the deed. The defendants were restrained by an order of injunction to create any third party interest in respect of the suit property.
The legality of the said judgment and/or decree passed in the said suit for specific performance of Contract filed by the plaintiff, is challenged by the defendant in this First Appeal.
Let us now consider the merit of the instant appeal in the facts of the instant case. For proper appreciation of the merit of this appeal, we feel it necessary to give the short background of this case which we accordingly do hereunder.
Admittedly, the plaintiff has filed the suit for specific performance of a unilateral contract executed by the defendants whereby the defendants agreed to transfer the suit property in favour of the plaintiff for a consideration of Rs.35 lakhs. The suit property was mortgaged with the Allahabad Bank, Madhyamgram Branch, Barasat for securing repayment of the loan taken by the defendants from the said bank. In the agreement it was provided that the defendants will redeem the said mortgage from the bank out of the earnest money to be paid by the plaintiff and will obtain a clearance certificate from the bank as well as from the local municipal authority for transfer of the suit property by the defendants in favour of the plaintiff.
It was also provided in the said agreement that the formalities which are required to be fulfilled by the defendants for transferring the suit property will be completed by the defendants within two months from the date of execution of the agreement and immediately after obtaining such clearance certificate from the bank as well as from the Municipal Authority, the defendants will execute and register appropriate deed of conveyance in favour of the plaintiff for conveying their right title and interest in respect of the suit property free from all encumbrances. It is stated by the plaintiff that in terms of the said agreement for sale which was executed by the defendants on 1st January, 2004, the plaintiff paid a sum of Rs.5 lacs to the defendants on account of earnest money and agreed to pay the balance consideration money at the time of execution of the sale deed. It was further alleged by the plaintiff that subsequently on demand made by the defendant, the plaintiff again on 12th March, 2004 paid a further sum of Rs.1 lac to the defendants towards part payment of the consideration money. It was further alleged by the plaintiff that the plaintiff regularly inquired about the progress of the compliance which are required to be fulfilled by the defendants in terms of the said agreement and asked for execution and registration of the deed of sale in his favour by tendering the balance consideration money. However, since the defendants refused to accept the balance consideration money and/or execute a deed of conveyance in favour of the plaintiff, the plaintiff had to file the instant suit for specific performance of contract as the defendants told the plaintiff that they will not sell the suit property to the plaintiff but will sell the suit property to the stranger purchaser. The instant suit for specific performance of contract was founded on this causes of action pleaded in the plaint.
The defendant no.1 contested the said suit by filing written statement denying the allegations made out by the plaintiff in the plaint. The other defendants did not file any written statement to contest the said suit. The defendant no.1 did not deny execution of the said agreement for sale. However, it was contended by him that since the defendant had incurred losses in his business they were in genuine need of an accommodation loan at the material time. As such they requested the plaintiff being their friend to provide them an accommodation loan with an assurance to repay the said loan within a short period.
It was further alleged by the defendant that the plaintiff accepted such proposal of defendants and lent a sum of Rs. 6 lacs in instalments on account of an accommodation loan. It was further alleged by the defendant that to secure repayment of the said loan, the said agreement was executed by the defendants with an understanding that in case the property is transferred to the plaintiff, the plaintiff will execute a deed of re-conveyance in favour of the defendants after recovery of the loan amount. The defendant thus, contended that since the defendants never agreed to sell the suit property to the plaintiff, the plaintiff cannot maintain the instant suit for specific performance of contract on the basis of a unilateral contract which was not even signed by the defendants.
It was further stated by the defendants that the defendants offered the plaintiff to refund the money which was received by them from the plaintiff but the plaintiff did not refuse to accept the same. The defendant thus, prayed for dismissal of the said suit.
The learned Trial Judge after considering the pleadings of the parties and also the evidence led by them and/or their witnesses ultimately came to the conclusion that even the unilateral contract which was acted upon by the parties, is capable of enforcement through a suit for specific performance of contract. Such conclusion was drawn by the learned Trial Judge by relying upon a decision of the Madras High Court in the case of Muthukrishna Gounder vs. Gowri & Ors. reported in 2014(2) ICC 574.
Learned Trial Judge also held that the plaintiff has been able to prove that he was ready and willing and is still ready and willing to perform his part of the contract.
The learned Trial Judge also held that the defendants have failed to comply with the terms of the contract by not redeeming the mortgage and/or obtaining the clearing certificate from the bank and/or the permission from the Municipal authority in terms of the said contract. The learned Trial Judge held that this is a fit case where a decree for specific performance of contract should be passed and accordingly the learned Trial Judge passed the aforesaid decree which is under challenge in this First Appeal.
Mr. Saha, Learned advocate appearing for the defendant/appellant submits that a unilateral contract is incapable of enforcement through a suit for specific performance of contract. He submits that the alleged agreement being Ext. 1 may at best be considered as an offer given by the defendants to the plaintiff for selling the suit property to the plaintiff but such document cannot be considered as an agreement in the absence of execution thereof by the plaintiff.
Mr. Saha further contends that admittedly, the said agreement was not signed by the plaintiff. According to him, since the plaintiff did not sign the said agreement, he did not accept the offer made by the defendant for transferring the suit property in his favour and as such there was no concluded contract between them . He thus ultimately submits that if the contract is not concluded, such contract cannot be enforced through a suit for specific performance of contract. In support of such submission Mr. Saha relied upon a decision of the Hon'ble Supreme Court in the case of Visweswaradas Gokuldas Vs. B. K. Narayan Singh & Anr. reported in AIR 1969 SC 1157.
Mr. Saha, further contends that even assuming but not admitting that there was a concluded contract between the parties still then, according to Mr. Saha, the contract being in nature of a contingent contract, the plaintiffs cannot seek enforcement of the said contract through a suit for specific performance of contract until the contingency occurs after the suit property is released from the mortgage and a clearance certificate is issued by the bank permitting the defendants to transfer the suit property free from mortgage to their purchaser.
Mr. Saha points out that admittedly the mortgage has not yet been redeemed and the bank has not yet issued any clearance certificate permitting the defendants to transfer the suit property free from mortgage.
He thus, contends that the suit for specific performance of contract filed by the plaintiff is a premature one inasmuch as such contingent contract cannot be enforced until the defendants comply with their part of the obligation as per the contract and get the suit property released from mortgage by redemption.
Mr. Saha points out that even the suit for specific performance of contract was not filed by the plaintiff preceded by a demand for execution and registration of the deed of transfer in favour of the plaintiff. He thus, contends that suit filed without demanding execution and registration of a deed of conveyance by the defendants for transferring the suit property in favour of the plaintiff is not maintainable. In support of such submission he has relied upon a decision of this Hon'ble court in the case of Palay Dutta Vs. Md. Ali Afsar reported in 2016(2) CHN (CAL)
438. Mr. Saha, learned Counsel also relied upon another decision of the Hon'ble Supreme Court in the case Ramesh Chand (dead) through legal representative Vs. Asruddin (dead) through legal representatives & Anr. reported in (2016) 1 SCC 653, to support his submission that even if it is ultimately found that the execution of the agreement between the parties is proved, still then, no decree for specific performance of contract can be passed in such a suit as it is nowhere pleaded or proved by the plaintiff that he redeemed the mortgaged land in favour of the defendants in terms of the agreement nor is it specifically pleaded that he was ready and willing to get the property redeemed from mortgage.
Mr. Saha thus, submits that this is a fit case where interference of this Hon'ble Court with the impugned judgment and/or decree is necessary.
Mr. Ghosh learned Advocate appearing for the plaintiff/respondent refuted such submission of Mr. Saha by contending that even a unilateral agreement is capable of enforcement through a suit for specific performance of contract. In support of his submission he has relied upon a decision of the Madra High Court in the case of A. Sankariah Vs. V. Ravichandran & Ors. reported in 2017 Madras 27.
By referring to the pleadings made out by the plaintiff in the plaint as well as evidence led by the plaintiff and his other witnesses, he points out that not only the plaintiff proved that he was ready and willing to perform his part of this contract but he is still ready and willing to perform the contract.
Mr. Ghosh thus, submits that when the contract is proved and the contract is legal, and binding upon the parties and the same is not opposed to the public policy, the Court was right in passing a decree for enforcement of the said contract in the present context where the defendants were found to have failed to discharge their obligations as per the said contract and the plaintiff has proved his readiness and willingness to complete the said transaction as per the contract.
He thus, supported the judgement and/or decree passed by the learned Trial Judge which is impugned in this appeal.
Let us now consider the correctness of the impugned judgment in the light of the submission made by the learned Counsel appearing for the parties.
Let us first of all consider as to the enforceability of such a unilateral contract. Admittedly, the alleged agreement dated 1st January, 2004 was not signed by the plaintiff. The terms and conditions which the defendants offered to the plaintiff for transferring the suit property to the plaintiff were incorporated in the said document being Ext. 1. It is also proved that a sum of Rs. 5 lacs was paid by the plaintiff to the defendant on account of earnest money and/or part payment of the consideration money which was fixed at Rs. 35 lacs. The defendant also did not deny the acceptance of such sum of Rs. 5 lacs from the plaintiff. In fact they acknowledged the receipt of the said sum of Rs. 5 lacs from the plaintiff on account of the said transaction, in the said deed (Ext. 1) itself. They however, tried to explain that they received the said sum of Rs. 5 lacs by way of loan from the plaintiff, but they could not prove by evidence that they in fact were in need of money during the relevant time and to make up the losses in their business, they took the said amount from the plaintiff by way of an accommodation loan . They also could not prove that they ever approached the plaintiff seeking loan form him. Even contents of the deed being Ext. 1 do not support such contentions of the defendants. Oral evidence cannot be led contrary to documentary evidence. As such, we cannot accept the contention of the defendants that a sum of Rs. 5 lacs which was paid by the plaintiff to the defendant was practically a payment made not in terms of the agreement but on account of a loan.
That apart we find that the defendants also approached the plaintiff for further payment of Rs. 1 lac in terms of the said agreement. On such request being made by the defendants, the plaintiff also paid a further sum of Rs. 1 lac to the defendant on 12th March, 2004. The acceptance of the said sum of Rs. 1 lac in addition to Rs. 5 lacs as mentioned above was also acknowledged by the defendant in a receipt which is as exhibited Ext. 1/1. The defendants acknowledged therein that the said sum of Rs. 1 lac was accepted by them towards part payment of the consideration money for transferring the suit property to the plaintiff. Loan transaction was not even referred to the said receipt.
Considering the conduct of the parties we hold that the offer made by the defendants vide Ext.1 was accepted by the plaintiff by conduct. As such unilateral contract matured into a concluded contract which is capable of enforcement by suit.
In this regard, we may refer to a decision of the Supreme Court in the case of Aloka Bose versus Parmatma Devi & Ors. reported in (2009) 2 SCC 582 wherein it was held as follows:-
"16. On the other hand, the observation in S.M. Gopal Chetty that unless agreement is signed both by the vendor and purchaser, it is not a valid contract is also not sound. An agreement of sale comes into existence when the vendor agrees to sell and the purchaser agrees to purchase, for an agreed consideration on agreed terms. It can be oral. It can be by exchange of communications which may or may not be signed. It may be by a single document signed by both parties. It can also be by a document in two parts, each party signing one copy and then exchanging the signed copy as a consequence of which the purchaser has the copy signed by the vendor and a vendor has a copy signed by the purchaser. Or it can be by the vendor executing the document and delivering it to the purchaser who accepts it."
Relying upon the said judgment we hold that here is the case where we find that vendor executed the said Ext. 1 and delivered it to the purchaser who accepted the terms of the agreement contained in the said deed and acting upon the said agreement, he paid a sum of Rs.6 lacs in two instalments towards part payment of the consideration money. Thus we have no hesitation to hold that there was a concluded contract between the parties and such contract is capable of enforcement through a suit for specific performance of contract.
Since the defendants were neglecting to comply with the terms of their contract by making the suit property free from mortgage, the plaintiff approached the market committee (Babasayee Samity) for settlement of his dispute with the defendants and the Market Committee also intervened to settle their dispute and by the letter being Ext. B directed the defendants to transfer and convey the suit property in favour of the plaintiff in terms of the said agreement on acceptance of the balance consideration money.
Considering the facts as stated above, we have no hesitation to hold that though the alleged agreement being Ext. 1 was not executed by the plaintiff but the terms of the conditions for sale of the suit property which were offered by the defendants as incorporated in the said alleged agreement, were all accepted by the plaintiff by conduct as he, not only paid the earnest money towards the part payment of the consideration for such transfer in terms of the contract and as per the defendants' demand, but also demanded repeatedly for compliance of the obligations to be performed by the defendant as per the said contract. The plaintiff also proved by evidence that he was all throughout ready and willing to perform his part of the contract and he offered the defendants to pay the balance consideration money but the defendants refused to accept the same and also refused to execute and registered deed of conveyance in favour of the plaintiff.
The title of the defendants in the suit property is not disputed in the present case. However, we find the contract is a contingent contract and the right to refuse such contract by the plaintiff will mature only after the obligation to redeem the mortgage property, is discharged by the defendants. The suit property has not yet been released from mortgage.
Let us now consider as to whether such a contingent contract gained maturity for enforcement of the same through the intervention of the Court, in this suit for specific performance of contract.
We have already mentioned above that it was provided in the said agreement being Ext. 1 that the defendants will make the suit property free from all mortgage by redeeming the mortgage from the bank with the money which would be given by the plaintiff to the defendants by way of earnest money. Admittedly the defendant received a sum of Rs. 6 lacs from the plaintiff on account of earnest money. Despite receipt of the said sum of Rs. 6 lacs from the plaintiff by way of the earnest money, the defendants did not approach the bank for redeeming the said mortgage and/or making the suit property free from mortgage within the time which was stipulated in the said agreement being exhibit 1.
Thus, defendant has failed to fulfil their part of the contract.
When we find that the plaintiff is ready and willing to fulfil his part of the contract, the Court can certainly compel the unwilling & dishonest party to comply with their part of the contract particularly when they enjoyed the benefit of the earnest money which they admittedly received from the plaintiff in terms of the contract.
It is true that the plaintiff has neither pleaded in his pleading nor proved that he also took any steps for redeeming the mortgage loan in favour of his vendors. The plaintiff has also not stated in the pleading nor proved that he is ready and willing to get the property redeemed from mortgage.
According to Mr. Saha, in the absence of such pleadings and evidence of the plaintiff regarding his readiness and willingness to redeem the said mortgage, the learned Court below ought to have refused to pass a decree for specific performance of contract. To support of such submission Mr. Saha relied upon a decision of the Hon'ble Supreme Court in the case Ramesh Chand (dead) through legal representative (supra) wherein it was observed that it is pertinent to mention here that "in the present case though execution of the agreement dated 21st June, 2004 between the parties is proved but it is nowhere pleaded or proved by the plaintiff that he got redeemed the mortgage loan in favour of the defendant in terms of the agreement, nor is it specifically pleaded that he was not ready and willing to get the property redeemed from mortgage".
In this regard we like to mention here that redemption of the mortgaged property was not the obligation of the plaintiff as per the contract; such obligation was cast on the defendants as per the contract. The plaintiffs, in our view, also is not competent to take any steps for redemption of the mortgaged property as per Section 91 of the Transfer of Property Act 1882 which runs as follows:-.
"Section 91 runs as follows:-
Persons who may sue for redemption - Besides the mortgagor, any of the following persons may redeem or institute a suit fo redemption, the mortgaged property namely:-
(a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in or charge upon the property mortgaged or in or upon the right to redeem the same;
(b) any surety for the payment of the mortgage debt or any part thereof; or
(c) any creditor of the mortgagor who has in a suit for the administration his estate obtained a decree for sale of the mortgaged property".
In our considered view, the plaintiff does not come under any of the categories of person whose right to redeem such mortgage on behalf of the mortgagor was recognised under said provisions of section 91 of the Transfer of Property Act.
Section 91(b) and (c) do not apply to the plaintiff in the instant case as the plaintiff is neither a surety for payment of the mortgage debt nor a creditor of the mortgagor whose right to redeem such mortgage on behalf of the mortgagor is recognised therein.
Let us now consider as to whether the Section 91(a) can be applied in the instance case. In this regard we are required to consider Section 54 of the Transfer of Property Act which provides that contract for sale of immovable property does not, by itself create an interest in or charge on such property; as such, we hold that the plaintiff on the strength of agreement for sale cannot claim to have acquired any interest in the suit property and thus in our considered view, the plaintiff cannot be regarded as a person who is capable to redeem or institute a suit for redemption of such suit property on the basis of the contract which he entered into with the defendant for purchasing the suit property.
Therefore, we hold that the principle which was laid down by the Supreme Court in case of Ramesh Chand (dead) through legal representative (supra) is not applicable in the present case.
We thus, further hold that such being the position of law, the court cannot refuse to pass a decree for specific performance of contract even in the absence of any pleading and/or proof as to plaintiff's readiness and willingness to get the suit property redeemed in favour of the defendants.
To test as to whether the plaintiff has succeeded in proving his readiness and willingness to complete his part of the contract we have considered his pleadings as well as his evidence. In his pleadings he has mentioned that he was ready or willing and is still ready and willing to perform his part of the contract. He has stated that he repeatedly enquired about the steps which were taken by the defendants to get the suit property free from mortgage but he was not informed.
He also stated in his cross-examination that it is a fact that he was prepared to purchase after 1st January 2004 as at that time he had 29/30 lacs with him to perform his part of the contract for purchasing the disputed property. He has also produced his income tax return. Though it is rightly pointed out by Mr. Saha, learned advocate of the appellant that the income tax return submitted by the plaintiff does not reflect that he had sufficient money to perform his part of the contract. As such according to him, the Court should have declined to pass a decree in favour of the plaintiff. We cannot accept such submission of Mr. Saha as in the Income-Tax return, the assesssee was not required to indicate as to how much money he had in his hand at the time of submission of such return for the relevant period. The defendants also did not state in their evidence that the plaintiff has no capacity to pay the balance consideration money. The defendant has not denied that the balance consideration money was not offered to him. Excepting the defendant no.1, the other defendants did not come forward to contest the suit. The allegations made in the plaint remains uncontroverted from them. In this context we cannot subscribe the view of Mr. Saha that the plaintiff had no ready fund with him for completing the said transaction during the relevant period.
Mr. Ghosh learned advocate appearing for the appellant submits that his client is ready to deposit the balance consideration money with the Court within the time which will be granted to the plaintiff.
Before parting with we also like to mention here that we cannot accept the submission of Mr. Saha that the instant suit is not maintainable as the suit was not filed followed by a demand notice.
Though it is true that no written letter was sent to the defendant demanding execution of the deed of conveyance by the defendant in favour of the plaintiffs on acceptance of the balance consideration money but the plaintiffs have pleaded and proved that before filing the said suit, they demanded execution and registration of a deed of conveyance from the defendant but since they refused to do so, the instant suit was filed after the Babasayee Samity failed to conciliate over the dispute between the parties.
In this set of facts where we find that there was a valid and enforceable contract between the parties and the defendant was and/or still is ready and willing to perform his part of the contract but the defendants have failed to perform their part of the contract and the suit was filed within the period of limitation then interference with the impugned judgment and decree by this Court is unwarranted.
However, we feel that some modification is necessary so far as the ultimate directions which were given by the learned Trial Judge in the operative part of the impugned judgment is concerned. We thus modify the same in the manner indicated hereunder.
We, thus, direct the plaintiffs/respondents to deposit the balance consideration money before the executing court in connection with the connected execution case to the credit of the plaintiffs/ respondents within two weeks from date.
In default, the suit will stand dismissed.
It is further directed that in case such deposit is made by the plaintiff/respondent with the executing court within the time as granted above, the learned executing court will appoint Sherestadar of the court as a Special Officer for getting the suit property free from mortgage if any by way of redemption of the mortgaged property in favour of the defendants on payment of mortgage dues as per the claim of the bank concerned out of such deposit, within four weeks from the date of deposit of the balance consideration money and within four weeks thereafter, the deed will be executed in favour of the plaintiffs at the expenses of the plaintiff for conveying the right title and interest of the defendants in the suit property in favour of the plaintiff through court, in case the defendants fail and neglect to execute a proper deed of conveyance and register the same in favour of the plaintiffs within two weeks from the date of redemption of the mortgaged property. Possession of the suit property will be delivered to the plaintiffs after the deed of conveyance is executed and/or registered in favour of the plaintiffs for conveying right title and interest of the defendants in the suit property to the plaintiffs. The defendants will be permitted to receive the balance of the deposited amount from the Court only after the deed is executed and registered in favour of the plaintiff and possession thereof is revived by the plaintiff.
We, thus, dismiss the appeal and approve the findings of the learned Trial Court in the impugned judgment and decree with the modification of the impugned decree in the manner as aforesaid.
The appeal is, thus, dismissed.
Let the lower court's record be sent down to the court below immediately by special messenger at the cost of the respondents.
Urgent photostat certified copy of this order, if applied for, be given to the learned advocates for the parties as expeditiously as possible.
(Jyotirmay Bhattacharya, J.) (Shivakant Prasad, J.)