Himachal Pradesh High Court
Harnam Singh And Ors. vs Smt. Purbi Devi And Ors. on 7 September, 1999
Equivalent citations: AIR2000HP108
Author: M.R. Verma
Bench: M.R. Verma
JUDGMENT M.R. Verma, J.
1. This judgment shall dispose of the above appeal and the connected cross objections.
2. Brief facts leading to the presentation of the present appeal and the cross objections are that the appellants/plaintiffs (hereafter referred to as the 'plaintiffs') instituted a suit for possession by way of specific performance of contract dated September 14, 1984 by executing a sale deed qua 8/45 share in land comprising Khata No. 6, Khatoni Nos. 12. 13, Khasra Nos. 82 min, measuring 0-10-76, Khata No. 14 min, Khatoni No. 29, Khasra Nos. 90, 395. 397, measuring 0-47-68, total area 0-58-44. more specifically detailed in the Jamabandi for the year 1980-81, situate in Mohal Kanda, Mauza Thana Bargran. Sub-Tehsil Baroh, District Kangra (hereafter referred to as the 'suit land'), for Rs. 22,225/- and in the alternative for the recovery of Rs. 15,750/-, i.e. Rs. 10,500/- paid as earnest money and Rs. 5,250/- as damages/interest thereon for the period from September 14, 1984 to July 14, 1985.
3. The case of the plaintiffs as made out in the plaint is that respondent/defendant Purbi Devi (hereafter referred to as 'defendant No. 1) owns that suit land, she entered into an agreement dated September 14, 1984 with the plaintiffs thereby agreeing to sell the land in suit to the plaintiffs at the rate of Rs. 1500/- per Kanal for a total consideration of Rs. 22,225/- and also agreed to execute the sale deed on or before July 31, 1985. An earnest money in the sum of Rs. 10,500/- was received by her on September 14, 1984 the day when the agreement was executed with the condition that if she failed to execute the sale deed within the specific time, she would return the said earnest money with interest at the rate of 5% per month. On the other hand, the plaintiffs stipulated that if they failed to get the execution of the sale deed made by July 31, 1985, the earnest money paid would stand forfeited. After the execution of the said agreement, defendant No. 1 Purbi Devi firstly approached defendant/respondent No. 2 (here-after referred to as 'defendant No. 2') for selling the suit land. When the plaintiffs came to know about it, they served the defendants No. 1 and 2 with a notice dated March 14, 1985 requiring them to desist from effecting the sale or any other transfer of the suit land. The said notice was not replied to. Subsequently, defendant No. 1 agreed to execute the sale deed on June 26, 1985 at Kangra when the plaintiffs waited for her at Kangra but she did not turn up, hence another notice was served on defendant No. 1 reminding her all the instructions for the materialisation of the sale as per the stipulation in the agreement. This notice was replied by defendant No. 1 whereby she denied the execution of the agreement and refused to comply with the conditions thereof, Thereafter defendant No. 1 negotiated the sale of the suit land with defendant No. 2 and defendant/respondent Barraro Ram (here-after referred to as 'defendant No. 3') with dishonest and mala fide intention and to defeat the valuable rights of the plaintiffs. It is further claimed that ever-since the execution of the agreement, the plaintiffs had always been ready and willing to perform their part of the contract and are still willing to do so. However, the defendant No. 1 has refused to perform her part of the contract, hence the suit.
4. The defendants contested the claim of the plaintiffs by filing separate written statements. Defendant No. 1 in her written statement took the preliminary objections that the plaintiffs have no cause of action and locus standi to sue, that the suit is bad for mis-joinder and non-joinder of parties, that the suit is not properly valued for the purposes of Court fee and jurisdiction, that the suit as framed is not maintainable, that the suit is premature and not maintainable and that the suit is barred by the act and conduct of the plaintiffs.
5. On merits, the case as set up in the plaint has been denied and it has been averred that the replying defendant did not execute any sale agreement in favour of the plaintiffs. In fact there had been negotiation between the replying defendant and father of the plaintiffs to mortgage the land in suit with the plaintiffs as defendant No. 1 required money to build a house. Defendant No. 1 is a village woman, illiterate, incapable of understanding and forming a rational judgment regarding her interest and is always dependent on the assistance and guidance of her husband and in the absence of her husband she was taken to Kangra and then to Dharamshala by Jai Singh, father of the plaintiffs and taking advantage of her being alone, forced, pressurised, coerced her and paid her a sum of Rs. 2,000/- on account of a part of consideration of mortgage money against the suit land except land Khasra Nos. 90,395. It is, thus, claimed that the alleged agreement is unreasonable, indefinite, bad, against law and facts and in fact is no agreement in the eye of law, but is forged, fabricated and based on mis-representation, fraud, coercion and is against the consent and under undue Influence, hence Illegal, void, inoperative and inexecutable and the replying defendant is not bound by the same.
6. The receipt of the notice other than the notice dated June 26, 1985 through counsel of the plaintiffs has been denied and it is averred that the reply to the said notice was sent through counsel. It has also been denied that defendant No. 1 approached defendant No. 2 for selling the suit land and it is averred that this version is the invention of the mischievous brain of Jai Singh, father of the plaintiffs and the allegation is vague, indefinite, uncertain and based on assumption Just to build up a case. It is further claimed that defendant No. 1 came to know about the alleged agreement on receiving the notice dated June 26, 1985. The case of defendant No. 1 further is that her husband approached Jai Singh, father of the plaintiffs several times for execution of the mortgage deed and to arrange payment of the consideration thereof as settled but Jai Singh himself avoided such execution on various pretexts. Thus, defendant No. 1 has claimed that what was agreed to, was to mortgage the suit land as per negotiation With Jai Singh, father of the plaintiffs and there was no agreement to sell the land.
7. Defendants Nos. 2 and 3 in their joint written statement have raised preliminary objections that the plaintiffs have no locus standi to sue, that the alleged agreement deed is a forged document, without consideration and that the suit is not maintainable.
8. On merits they have denied the existence of any agreement to sell between the plaintiffs and the defendant No. 1 and have averred that they were informed that defendant No. 1 had agreed to give the land on simple mortgage where on the father of the plaintiffs had given her a sum of Rupees 2,000/- and it was agreed between them to get a mortgage deed registered on payment of the balance amount. They have further claimed that they are in possession of the suit land for the last 15-16 years and have been managing it and defendant No. 1 had agreed to sell it to them, and this fact is within the knowledge of Jai Singh, father of the plaintiffs, hence it is claimed that the suit is mala fide and liable to be dismissed.
9. The plaintiffs filed replications to the written statements wherein they denied the grounds of defence as taken in the written statements and reiterated the claim made out in the plaint.
10. On the pleadings of the parties, the learned trial Judge framed the following issues :
"1. Whether the defendant No. 1 executed a valid agreement/contract dated 14-9-1984 in favour of the plaintiffs? OPP.
2. If issue No. 1 is proved, whether the plaintiffs were willing to perform the terms of agreement dated 14-9-1984? OPP.
3. Whether the plaintiffs have got no cause of action and locus-standi to sue? OPD.
4. Whether the suit is bad for mis-joinder and non-joinder of parties? OPD.
5. Whether the act and conduct of the plaintiffs is a bar to the present suit? OPD.
6. Whether the suit is prematured and not maintainable? OPD.
7. Whether the suit is not maintainable in the present form? OPD.
8. Whether the suit is properly valued for the purposes of Court-fee and jurisdiction? OPP.
9. Whether the alleged agreement deed is a forged document and without consideration as alleged? OPD 2 and 3.
10. Relief."
11. Vide judgment dated May 31, 1990. the trial Court decided issues Nos. 1, 2 and 8 in favour of the plaintiffs and the remaining issues were decided against the defendants and as a consequence the suit was decreed for specific performance of the contract but it was held that only a sum of Rs. 2,000/- was received by defendant No. 1 as earnest money, therefore, the decree was subject to deposit of balance amount of consideration in the sum of Rs. 20,225/-within four months from the date of passing of the decree.
12. Feeling aggrieved, the plaintiffs preferred Civil Appeal No. 101/91 (65 of 1990) titled Harnam Singh v. Purbi Devi, and defendant No. 1 Purbi Devi also preferred an appeal which came to be registered as Civil Appeal No. 77/90 titled as Smt. Purbi Devi v. Harnam Singh. The said appeals came to be heard by the learned Additional District Judge (I), Kangra at Dharamshala who vide impugned Judgment modified the decree of the trial Court to the extent that earnest money paid under the agreement Ext.PW-1 / A was held to be Rs. 10,500/- and not Rs. 2,000/- as held by the trial Court and that Harnam Singh, plaintiff alone was held entitled to a decree for specific performance of execution of sale deed to the extent of 1/4 th share in the suit land on payment of 1/4 th amount of the sale consideration whereas the suit on behalf of plaintiffs Surjeet Singh, Pratap Singh and Hari Om Singh was dismissed.
13. Feeling aggrieved by the judgment and decree passed by the learned Additional District Judge, the plaintiffs have preferred the present appeal and Purbi Devi filed the Cross Objections No. 333 of 1994,
14. I have heard the learned counsel for the parties and have gone through the records.
15. The learned counsel for the plaintiffs has contended that plaintiff Harnam Singh who is a party to the agreement Ext. PW-1/ A, is the elder brother of the other plaintiffs, therefore, his having entered into contract with defendant Purbi Devi makes it binding on the plaintiffs. In any case its terms were binding on Harnam Singh. In the event of any breach, it could be enforced against him, therefore, the suit ought to have been decreed as a whole and thereby no prejudice would have been caused to the defendant No. 1 who had agreed to sell the land in suit for consideration and, thus, having the only Interest of securing the remaining consideration for sale.
16. The agreement Ext. PW-1/A dated September 14, 1984 had been executed by defendant Purbi Devi on one hand and the plaintiff Harnam Singh on the other. Defendant Purbi Devi had agreed vide agreement Ext. PW-1/A to sell her land to plaintiff Harnam Singh, Surjeet Singh, Pratap Singh and Hariom, admittedly, a minor, for consideration and had received earnest money in the sum of Rs. 10,500/- at the time of execution of the agreement. The agreement further stipulates that the remaining consideration of Rs. 11,725/- would be received at the time of execution of the sale deed which would be done by July 31, 1985 failing which the seller would have been liable to refund the amount of earnest money with interest at the rate of 5% per month and in case Harnam Singh etc. failed to pay the remaining sale-consideration, the earnest money would stand forfeited. Thus, the agreement Included a forfeiture clause, therefore, the terms of the agreement could have been agreed to by Harnam Singh on behalf of the other plaintiffs only if he had lawful authority to do so on their behalf. One of the plaintiffs namely Hari Om was and is, admittedly, a minor. There is nothing in the agreement Ext. PW-1/A or in the statement of Harnam Singh (PW-1) to show that said Harnam Singh has any lawful authority whatsoever to enter into the agreement on behalf of the said minor and the other plaintiffs.
17. The doctrine of privity of contract Implies a mutuality at will and is interaction of parties and their successors. It creates a legal bond or tie or vinculum juris personal to the parties. The rule, thus, is that no one except the parties to a contract can be bound by or entitled under a contract. This doctrine which debars third party to enforce a contract forbids the parties to the contract from enforcing any obligation thereunder against a stranger. A person cannot be subject to the obligation of a contract to which he is not a party and the logical consequence is that a stranger cannot acquire rights under a contract. This general rule, no doubt, is subject to certain exceptions.
18. The Hon'ble Supreme Court in case M.C. Chacko v. The State Bank of Travancore, AIR 1970 SC 504 has held as under :
"9. The Kottayam Bank not being a party to the deed was not bound by the covenants in the deed, nor could it enforce the covenants. It is settled law that a person not a party to a contract cannot subject to certain well recognised exceptions, enforce the terms of the contract: the recognised exceptions are that beneficiaries under the terms of the contract or where the contract is a part of the family arrangement may enforce the covenant. In Krishna Lal Sadhu v. Pramila Bala Dasi, ILR 55 Cal 1315 : AIR 1928 Cal 518 Rankirt, C.J. observed :
'Clause (d) of Section 2 of the Contract Act widens the definition of 'consideration' so as to enable a party to a contract to enforce the same in India in certain cases in which the English Law would regard that party as the recipient of a purely voluntary promise and would refuse to him a right of action on the ground of nudum pactum. Not only, however, is there nothing in Section 2 to encourage the idea that contracts can be enforced by a person who is not a party to the contract but this notion is rigidly excluded by the definition of 'promisor' and 'promisee'.
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. v. Selfridge 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 Khwaja Muhammad Khan v. Husalnl Begam, (1910) 37 Ind App 152. In a later case Jamna Das v. 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."
19. Thus, two of the exceptions to the general rule that a stranger cannot enforce a contract, as ruled by the Hon'ble Supreme Court in the case supra are the beneficiaries under a trust created by a contract, or in the case of a family arrangement. To this can be added the beneficiary under a marriage settlement or partition. However, the plaintiffs who are not parties to the agreement Ext. PW-1/A, do not fall under any of the aforesaid categories of beneficiaries. Therefore, the plaintiffs other than plaintiff Harnam Singh, being strangers to the agreement Ext. PW-1/A, are not bound by the said agreement. Thus, there is lack of mutuality and reciprocity of the binding nature of the agreement between them and defendant Purbi Devi. Therefore, the agreement Ext. PW-1/A is not enforceable against them and consequently not enforceable by them.
20. The above view is further supported the ratio in case Kedar Das Mohta v. Nand Lal Poddar, AIR 1971 Patna 253. It has been held therein that an agreement cannot be enforced at the instance of a person who himself is not bound by it. In other words, there must be reciprocity as to the binding nature of the agreement between the persons who want to enforce it and the person against whom it is sought to be enforced.
21. The next contention of the learned counsel for the plaintiffs is that the agreement Ext. PW-1/A has been ratified by the plaintiffs by issuing notices Ext. PW-4/A and Ext. PW-4/B. By virtue of such ratification, the said agreement had become bilateral and binding on the plaintiffs as well as the defendant. Therefore, the suit of the plaintiffs deserves to be decreed as a whole. Such plea, however, is conspicuous by its absence in the plaint and even in the replication and does not appear to have been advanced at any earlier stage. Being a plea embracing questions both of law and fact, it cannot be permitted to be raised in the second appeal for the first time.
22. As a result there is no merit and substance in this appeal.
23. The learned counsel for the defendants while supporting the Cross Objections, has argued that the findings of the first appellate Court that a sum of Rs. 10,500/-was received by the defendant No. 1 as earnest money are incorrect and not based on evidence, and that the trial Court on this count has rightly concluded that only a sum of Rs. 2,000/- was received by the defendant No. 1 from Harnam Singh. A perusal of paras 17 to 27 of the impugned judgment wherein the learned District Judge has in detail discussed the evidence, reveals that the reasons to believe the version of the plaintiffs about payment of Rs. 10,500/- and to disbelieve the version of defendant No. 1 about receipt of only Rs. 2,000/- as given therein, are reasonable and sound and the conclusion that in fact a sum of Rs. 10,500/ - was received by defendant Purbi Devi cannot be said to be perverse or impermissible on the basis of the material on record. Therefore, the findings of the first appellate Court that defendant Purbi Devi had received a sum of Rs. 10,500/- vide agreement Ext. PW-1 /A call for no interference.
24. As a result, the Cross Objections are also held to be without any merit and substance, hence liable to be dismissed.
25. As a result of the above observations, the appeal as well as the Cross Objections are dismissed leaving the parties to bear their own costs.