Delhi High Court
Pundit Prem Raj vs ???Dlf??? Housing & Const. P. Ltd. & Anr. on 26 July, 2012
Author: Pradeep Nandrajog
Bench: Pradeep Nandrajog, Manmohan Singh
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: July 04, 2012
Judgment Pronounced on: July 26, 2012
+ RFA (OS) 12/1987
PUNDIT PREM RAJ ..... Appellant
Represented by: Mr.Adarsh B.Dial, Sr.Advocate
instructed by Ms.Hetu Arora Sethi,
Mr.Darpan and Mr.Ajay Gaind,
Advocates.
versus
„DLF‟ HOUSING & CONST. P. LTD. & ANR.
....Respondents
Represented by: Mr.Harish Malhotra, Sr.Advocate
instructed by Ms.Mandeep Kaur,
Advocate for R-1.
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE MANMOHAN SINGH
PRADEEP NANDRAJOG, J.
1. On October 26, 1956 an Agreement to Sell Ex.P-7, was executed between Moti Ram Bhalla, Prem Raj Sharma and Pt.Lila Ram, where under Pt.Lila Ram agreed to sell the land recorded to be described in Schedule „A‟ and „B‟ annexed with the agreement (but no such schedules exist) to Moti Ram Bhalla and Prem Raj Sharma at a sale consideration of `1,025/- per bigha. No money was paid under the Agreement to Sell to Pt.Lila Ram, but Moti Ram Bhalla and Prem Raj Sharma executed a promissory note each, in sum of `1,00,000/-, in favour of Pt.Lila Ram to secure payment towards part sale consideration.
2. On December 18, 1956 Moti Ram Bhalla and Prem Raj RFA(OS) 12/1987 Page 1 of 19 Sharma entered into an agreement to constitute a partnership for carrying on business under the name and style „LMG Colonizers and Traders‟ (hereinafter referred to as the „LMG‟). The object of the firm was to carry on business of acquiring, developing and selling land.
3. On January 02, 1957, DLF Housing and Construction Pvt. Ltd. (hereinafter referred to as „DLF‟), a company registered under the Indian Companies Act, and „LMG‟ executed a deed Ex.P-1, as per which „DLF‟ and „LMG‟ agreed to carry on business of purchasing and developing the lands statedly described in Schedule „A‟ and „B‟ to the agreement (but no schedule being annexed).
4. On the same day i.e. January 02, 1957 an Agreement to Sell Ex.P-2, was executed between „DLF‟ and „LMG‟ as one group and Pt.Lila Ram as the other, where under Pt.Lila Ram agreed to sell the land statedly described in Schedule „A‟ and „B‟ annexed with the agreement (but no Schedule being annexed) to „DLF‟ and „LMG‟ at a sale consideration of `1,025/- per bigha.
5. It is apparent that the agreement Ex.P-2 superseded the agreement Ex.P-7 between Moti Ram Bhalla, Prem Raj Sharma and Pt.Lila Ram.
6. Clause 1 and clause 2 of the agreement Ex.P-2 reads as under:-
"Now this indenture witnesseth as follows:-
1.The SELLER hereby agrees to sell the said land described in Schedules A and B hereunder to the said purchasers at the rate of Rupees One thousand and twenty five per Bigha Kham.
2.The earnest money settled between the parties is `4,00,000/- (Rupees four lakh only). The said Shri RFA(OS) 12/1987 Page 2 of 19 Prem Raj and Shri Moti Ram Bhalla out of the said purchasers have already paid to the seller a sum of `2,00,000/- (Rupees two lakhs only) as earnest money of the said land which will now be considered as a part of the earnest money and the said D.L.F. Housing & Construction Private Ltd. out of the Purchasers shall pay the earnest money of `2,00,000/- (Rupees two lakhs only) in the manner follows:-
`50,000/- (Rupees fifty thousand only) by cheque at the time of the execution of agreement. `50,000/- (Rupees fifty thousand only) payable on 1.2.1957.
`50,000/- (Rupees fifty thousand only) payable on 1.3.1957.
`50,000/- (Rupees fifty thousand only) payable on 1.4.1957."
7. Thereafter on June 11, 1958, 4 documents were executed/written by the parties, and we pause here for a minute and make a brief reference to each for the reason the issue debated between the parties has to be adjudicated with reference to the said 4 documents.
8. Firstly, an agreement Ex.P-3 was executed between „DLF‟, „LMG‟ and Pt.Lila Ram cancelling the earlier agreement to sell Ex.P-2 dated February 02, 1957 and recording therein that a sum of `4,00,000/-paid by „DLF‟ and „LMG‟ to Pt.Lila Ram as earnest money has been refunded.
9. Secondly, a deed of dissolution Ex.D-1, was executed by „DLF‟ and „LMG‟ whereby the partnership firm constituted between „DLF‟ and „LMG‟ vide partnership deed Ex.P-1 dated January 02, 1957 was dissolved.
10. Thirdly, an Agreement to Sell Ex.P-8, was executed by Pt.Lila Ram in favour of „DLF‟ as per which he agreed to sell the RFA(OS) 12/1987 Page 3 of 19 land described in Schedule „A‟ and „B‟ annexed with the agreement to „DLF‟ at a sale consideration of `1,350/- per bigha and relevant would it be to note that unlike previous agreements, Schedule „A‟ and „B‟ referred to in agreement Ex.P- 8 were annexed with the said agreement. It would be relevant to note the following clause of the Agreement Ex.P-8:-
"3.The FIRST PARTY shall pay to the SECOND PARTY `3 lakhs on account of advance towards price of the said land agreed to be sold to the SECOND PARTY to the FIRST PARTY under this agreement. Out of this sum of `3,00,000/- (Rupees three lakhs only) to be paid by the FIRST PARTY to the SECOND PARTY by way of advance towards sale price the FIRST PARTY has already paid `2,37,000/- (Rupees two lakhs thirty seven thousand only) to the SECOND PARTY as per details given below:-
Date Amount Particulars
2.1.195 50,000/- Cheque No.279021
dt. 2.1.1957 on the
Punjab National Bank Ltd.
8.2.1957 50,000/- 278905 dt.8.2.1957
-do-
5.3.1957 50,000/- 961112 dt. 5.3.1957
Mercantile Bank of India
Ltd.
3.4.195 75,000/- Cash
10.4.1957 45,000/- Cheque No.98331
dt.10.4.1957
-do-
27.5.1957 27,000/- 64845 dt. 27.5.1957
-do-
19.4.1958 10,000/- 269231 dt.19.4.1958
-do-
(Emphasis Supplied)"
RFA(OS) 12/1987 Page 4 of 19
11. Fourthly, a letter Ex.P-4, was written by „DLF‟ to Prem Raj Sharma, which reads as under:-
"In lieu of your services in connection with the execution of agreement of sale dated 11thJune, 1958 between „DLF‟ Housing & Construction (Private) Ltd., and Pt.Lila Ram son of Pt. Gumani Ram, New Delhi, in respect of the lands forming subject to that agreement, „DLF‟ Housing & Construction Private Ltd. have agreed to allot you 22 plots of land in the proposed colony. Out of these 22 plots of land, six plots will be ofabout300 sq. yds. each and sixteen plots of about 500 sq yds. each. Out of the first six plots four plots will be towards Greater Kailash side and the remaining two plots out of the first six plots and the other sixteen plots on the opposite side of the Chiragh Delhi Road. The price charged from you will be `9/- per sq. yds. of the plot area including cost of development. The plots will be situated in or about in centre of the whole colony in respective quarters."
12. We may note at this stage that the letter Ex.P-4 dated June 11, 1958 has been referred to by the parties in their pleadings as an agreement, but it actually is in the nature of a letter of offer and was obviously accepted by Prem Raj Sharma and since law recognizes an offer in writing being accepted orally resulting in an agreement between the parties, this appears to be the reason why Ex.P-4 has been referred to by both parties as an agreement. We shall also therefore be referring to the same as an agreement.
13. Thereafter Pt.Lila Ram executed sale deed(s) in favor of „DLF‟ in respect of the land described in Schedule „A‟ and „B‟ annexed with agreement Ex.P-8 dated June 11, 1958, and on the said land, after obtaining necessary permissions the well- known colony Greater Kailash Part-I and Greater Kailash Part-II RFA(OS) 12/1987 Page 5 of 19 New Delhi were developed by „DLF‟.
14. In the year 1961 Prem Raj Sharma filed a suit against „DLF‟ impleading Moti Ram Bhalla as a defendant. The suit was filed in the Court of the learned Senior Sub-Judge, Delhi in which he pleaded that the deed of dissolution Ex.D-1 dated June 11, 1958 dissolving the partnership firm constituted between „DLF‟ and „LMG‟; the agreement Ex.P-3 dated June 11, 1958 cancelling the Agreement to Sell dated January 02, 1957 Ex.P-2 entered into between „DLF‟, „LMG‟ and Pt.Lila Ram and the agreement Ex.P-4 dated June 11, 1958 whereby „DLF‟ was to allot 22 plots to Prem Raj Sharma in lieu of services rendered by him be declared void as they were not executed by him out of his own free will, but were executed due to pressure exerted upon him by „DLF‟. He prayed that all four documents executed on June 11, 1958 be declared null and void and as a consequence he sought a declaration that the partnership between „LMG‟ and „DLF‟ as per Ex.P-1 dated January 02, 1957 continued to exist. In the alternative he prayed that a decree for specific performance of Ex.P-4 be granted and additionally damages be also granted on account of „DLF‟ not fulfilling its obligations under Ex.P-4.
15. With respect to the alternative relief for specific performance, it was obvious that Prem Raj Sharma was seeking 22 plots which had to be allotted to him by „DLF‟ and for which he had to pay `9/- per sq.yd. per plot. Six plots had to be 300 sq.yd. and 16 plots had to be 500 sq.yd.
16. Needless to state, „DLF‟ questioned Prem Raj Sharma‟s assertion that the documents executed by him on June 11, 1958 were the result of coercion or undue pressure put by „DLF‟ on Prem Raj Sharma. With respect to the alternative RFA(OS) 12/1987 Page 6 of 19 prayer made by Prem Raj Sharma to specifically enforce Ex.P- 4, „DLF‟ pleaded that Prem Raj Sharma was not entitled to specific performance on various counts and one of which was Prem Raj Sharma not being ready and willing to pay `9/- per sq.yd. for the 22 plots which had to be allotted to him and further he not having even pleaded his being ready and willing to perform his obligations under Ex.P-4.
17. With respect to the defence of „DLF‟ on the claim of specific performance, we may only highlight that the defence was to bring home the point that on the one hand Prem Raj Sharma was wanting to avoid Ex.P-4 by challenging the same as a void document and thus this was proof enough of his not being willing to comply with his obligations under the document, and needless to state if Prem Raj Sharma could not make good his main plea i.e. of the document being void, it indeed would be a problem for him to obtain the alternative relief; and lest there be any curiosity in the mind of he who reads this decision, we may set the curiosity at rest by making it known right now that indeed this has been Prem Raj Sharma‟s nemesis.
18. Moti Ram Bhalla, impleaded as defendant No.2 by Prem Raj Sharma supported the claim made by Prem Raj Sharma.
19. On the basis of the pleadings of parties, following 4 preliminary issues were settled by the learned Trial Judge:-
"1. Is the suit not correctly valued for the purpose of court fees and jurisdiction? If not what is the correct value?
2. Is the suit bad for non-joinder of Pt.Lila Ram as a party?
3. Does the plaint disclose a cause of action?RFA(OS) 12/1987 Page 7 of 19
4. Is the relief of specific performance not open to the plaintiff in the alternative?"
20. Vide order dated February 26, 1962, the learned Sub-Judge disposed of the four preliminary issues. With respect to issue No.4, he held that Prem Raj Sharma is competent to claim the relief for specific performance of the agreement Ex.P-4 and not being relevant for the purposes of the present decision we do not burden the decision by noting the findings and the reasoning on the other three preliminary issues.
21. Aggrieved by the order dated February 26, 1962, „DLF‟ filed a Revision Petition before the Circuit Bench of the Punjab High Court at Delhi, which petition was allowed vide order dated February 14, 1964. It was held that Prem Raj Sharma could not maintain an action seeking the relief of specific performance of Ex.P-4. Aggrieved by the order dated February 14, 1964 passed by the Circuit Bench of the Punjab High Court, Prem Raj Sharma filed a Petition seeking Special Leave to Appeal before the Supreme Court, and after granting Leave to Appeal, vide judgment dated April 04, 1968 the Supreme Court affirmed the order passed by the Circuit Bench of the Punjab High Court and held that Prem Raj Sharma is not competent to claim the relief for specific performance of the agreement Ex.P- 4, for the reasons that:- (i) it is well settled that in a suit for specific performance the plaintiff is required to aver that he is ready and willing to perform his part of the contract, which averment was missing in the plaint filed by Prem Raj Sharma; and (ii) Prem Raj had taken contradictory stands in the suit filed by him; whereas on one hand Prem Raj was claiming specific performance of the agreement Ex.P-4 and on the other hand challenging the very enforceability of the said agreement.
RFA(OS) 12/1987 Page 8 of 1922. Thereafter, the suit filed by Prem Raj Sharma came to be transferred to the Original Side of this Court. Prem Raj Sharma filed an application under Order VI Rule 17 of the Code of Civil Procedure seeking to amend the plaint filed by him. The amendment sought was to plead that he was ready and willing to perform his obligation under Ex.P-4, which amendment was declined as per order dated August 23, 1971. The matter rested and Prem Raj Sharma continued to litigate on the strength of the pleadings in the plaint as originally pleaded.
23. Vide order dated July 11, 1972 following 8 issues were settled by the learned Single Judge:-
"1.Whether the suit for declaration that the partnership constituted on 2.1.1957 continues, for its dissolution and its rendition of accounts, is maintainable? OPP
2. Were the documents dated 11thJune, 1958 executed under circumstances mentioned in Para 9 of the plaint, if so, are they null and void, ineffective and not binding on the plaintiff?
3. Whether the plaintiff is estopped by his conduct in claiming the above reliefs in respect to partnership? OPD
4. Whether the plaintiff under the circumstances of the case is guilty of acquiescence, delays and laches. If so, what is its effect?
5. Whether the plaintiff is not debarred under Section 29 of the Specific Relief Act, 1977, from claiming damages when his relief for specific performance has been disallowed? OPP
6. If issue No.5 is decided in favor of the plaintiff whether he is entitled to any damages on the allegations made in the plaint? OPP
7. Whether defendant No.1 is entitled to special costs? OPD-1
8. Relief."RFA(OS) 12/1987 Page 9 of 19
24. At the trial, Prem Raj Sharma and „DLF‟ examined various witnesses in support of their case, which oral testimony is not noted by us since nothing much turns thereon.
25. Vide impugned judgment and decree dated March 19, 1987 the learned Single Judge has dismissed the suit filed by Prem Raj Sharma holding that:- (i) Prem Raj Sharma has failed to establish that „DLF‟ exercised any undue influence on him;
(ii) there cannot be rendition of the accounts of the partnership firm constituted between „LMG‟ and „DLF‟ for the said partnership firm had no assets; and (iii) Prem Raj Sharma is not entitled to a share in the profits earned by „DLF‟ after selling the land purchased by „DLF‟ from Pt.Lila Ram for he has failed to establish that „DLF‟ had used the property or funds of the partnership firm constituted between „DLF‟ and „LMG‟ for purchasing the land from Pt.Lila Ram. With respect to the findings that the documents executed by Prem Raj Sharma on June 11, 1958 i.e. Ex.P-3 and Ex.D-1 and Ex.P-4 were voluntarily executed, the learned Single Judge held that there was no evidence of „DLF‟ being in a position to influence the will of Prem Raj Sharma.
26. And suffice would it be for us to state that upon challenge to Ex.P-3, Ex.D-1 and Ex.P-4 failing, nothing much survived for Prem Raj Sharma to argue with respect to his remainder case, as was pleaded in the plaint. There is no evidence of the partnership firm constituted between „LMG‟ and „DLF‟ as per Ex.P-1 having any assets and from the impugned decision it is apparent that no attempt was made to show any such asset existing. But, as we would be noting herein after, an argument was advanced with respect to an asset in sum of `37,000/-
RFA(OS) 12/1987 Page 10 of 19being available and in respect whereof reliance was made upon the recital in clause 3 of Ex.P-8, contents whereof have been noted by us in paragraph 10 above.
27. Relevant would it be for us to note that Prem Raj Sharma conceded before the learned Single Judge that in view of the provisions contained in Section 29 of the Specific Relief Act he is debarred from claiming damages from „DLF‟ on account of breach of the agreement Ex.P-4 inasmuch as he was not permitted to claim the relief for specific performance of Ex.P-4.
28. Prem Raj Sharma is aggrieved by the impugned judgment and decree dated March 19, 1987 and this explains the appeal before us.
29. Two neat submissions were urged at the hearing of the appeal by Shri Adarsh B.Dial, learned senior counsel for the appellant. It was urged:-
A. That ignoring Ex.P-8, relevant clause whereof has been noted by us in para 10 above, which refers to `2,37,000/- paid by „DLF‟ and „LMG‟ to Pt. Lila Ram, learned counsel urged that it is apparent that `37,000/- remained unaccounted for; conceding that `2,00,000/- had actually not been paid to Pt.Lila Ram when Ex.P-7 was executed by Pt.Lila Ram in favour of Prem Raj Sharma and Moti Ram Bhalla for the two had executed a promissory note each in sum of `1,00,000/- in favour of Pt.Lila Ram, counsel urged that „DLF‟ took the advantage of said sum of `37,000/-. Taking the argument further, learned counsel urged that since „DLF‟ had utilized `37,000/- which was the asset of the partnership firm RFA(OS) 12/1987 Page 11 of 19 constituted between „LMG‟ and „DLF‟ as per Ex.P-1, Prem Raj Sharma and Moti Ram Bhalla were entitled to such profits as were earned by „DLF‟ when „DLF‟ utilized said asset of the firm.
B. That Prem Raj Sharma had rendered services to „DLF‟ for execution of the Agreement to Sell Ex.P-8 dated June 11., 1958 between „DLF‟ and Pt.Lila Ram, which fact stands acknowledged in the letter Ex.P-4 dated June 11, 1958 written by „DLF‟ to Prem Raj, the contents and existence whereof has not been denied by „DLF‟. Counsel argued that Prem Raj is entitled to be recompensed by the „DLF‟ for the services rendered by him in view of the principle of „quantum meriut‟ recognized by Section 70 of the Indian Contract Act, 1872.
30. Learned senior counsel conceded that there was no material for him to even attempt to urge that when Prem Raj Sharma executed various documents on June 11, 1958 and accepted Ex.P-4 written by „DLF‟ to him there was pressure exerted by „DLF‟.
31. Let us recap the facts. On October 26, 1956 an agreement to sell Ex.P-7 was entered into between Prem Raj Sharma, Moti Ram Bhalla and Pt.Lila Ram as per which Lila Ram had to sell land to Moti Ram Bhalla and Prem Raj Sharma at a sale consideration of `1,025/- per bigha. On December 18, 1956 Prem Raj Sharma and Moti Ram Bhalla constituted the firm „LMG Colonizers and Traders‟ and obviously it was this partnership firm which would have acquired the lands from Pt.Lila Ram as per Ex.P-7. On January 02, 1957 a partnership was constituted between „DLF‟ and „LMG‟ vide Ex.P-1 and on RFA(OS) 12/1987 Page 12 of 19 the same day vide Ex.P-2 Pt.Lila Ram agreed to sell the lands which she had earlier agreed to sell to Moti Ram Bhalla and Prem Raj Sharma i.e. vide Ex.P-7 to „DLF‟ and „LMG‟. Parties could not move any further in the matter and the crucial date June 11, 1958 was arrived, on which date four documents Ex.P- 3, Ex.D-1, Ex.P-8 and Ex.P-4 were contemporaneously executed and the effect was that firstly Ex.P-2 i.e. the agreement to sell executed by Pt.Lila Ram in favour of DLF and LMG was cancelled; secondly, Pt.Lila Ram agreed to sell the same land to „DLF‟; thirdly, the partnership constituted vide Ex.P-1 between „LMG‟ and „DLF‟ was dissolved and lastly „DLF‟ agreed to sell 22 plots to Prem Raj Sharma for a sum of `9/- per sq.yd. each.
32. The intention of the parties has to be gathered keeping in view four documents being simultaneously executed on the same date. By said date i.e. June 11, 1958 no colonization had been commenced and it is apparent that Prem Raj Sharma and Moti Ram Bhalla had an agreement with Pt.Lila Ram, benefit whereof was flowing to „DLF‟ and it is apparent that the recompense envisaged was that Prem Raj Sharma would get 22 plots for which he would pay `9/- per sq.yd. to DLF; and Moti Ram Bhalla to walk out with hands in his pocket and no money to jingle. It is in this backdrop we have to consider Ex.P-4 written by „DLF‟ to Prem Raj. The deed of dissolution Ex.D-1 does not record any assets of the partnership which had to be distributed and indeed there were none; and we clarify that we would be next dealing as to why there were none; but would proceed to continue with our analysis by highlighting that it was under this backdrop i.e. Prem Raj Sharma having rendered a service by introducing Pt.Lila Ram to „DLF‟ i.e. a milking cow, RFA(OS) 12/1987 Page 13 of 19 that Prem Raj Sharma had to be paid a consideration and this consideration was as per Ex.P-4. Thus, Ex.P-4 is a contract between „DLF‟ and Prem Raj Sharma.
33. In the backdrop aforesaid we now consider the first argument advanced by learned senior counsel for the appellant that the sum of `37,000/-, which is a forgotten asset of the partnership firm constituted by „LMG‟ and „DLF‟ requires to be accounted for. It is true that Ex.P-8, vide clause 3 records that `2,37,000/- stood paid to Pt.Lila Ram, but it could well be that `37,000/- was paid by „DLF‟. Neither party has thrown any light on said issue and it is difficult therefore to return a positive finding with respect to said sum of `37,000/- and we thus prefer to adjudicate the matter taking help of the technicalities of the law. Now, the onus is on him who affirms. Prem Raj Sharma affirmed and hence must bear the burden of the onus. The second technicality of the law is the Rule of Best Evidence. As compared to Ex.P-8 which we find was simultaneously executed when the Deed of Dissolution Ex.D-1 was executed, the Rule of Best Evidence on the subject would be to rely upon Ex.D-1, where under, while dissolving the partnership constituted vide Ex.P-1, there is no mention of any asset requiring to be distributed. We may incidentally note that no argument on this aspect was made before the learned Single Judge and this explains no discussion in the impugned decision on the controversy pertaining to `37,000/- arising out of Ex.P-8 and it appears that learned senior counsel for the appellant has chanced upon to read Ex.P-8 a little more carefully, and for which we acknowledge the ingenuity of the learned senior counsel, but regret to return a finding against the appellant.
RFA(OS) 12/1987 Page 14 of 1934. This takes us to the second argument predicated upon Section 70 of the Indian Contract Act.
35. We have already held in foregoing paragraphs that Ex.P-4 is a contract between „DLF‟ and Prem Raj where under „DLF‟ had agreed to recompense Prem Raj for the services rendered by him with respect to the agreement to sell Ex.P-8 dated June 11, 1958 entered into between „DLF‟ and Pt.Lila Ram. It has been conceded by learned senior counsel appearing for Prem Raj that in view of the provisions of Section 29 of Specific Relief Act, Prem Raj is barred for claiming damages from „DLF‟ for breach of said contract, since the alternative prayer for a decree for specific performance has been held to be not maintainable.
36. Now, the question which arises for consideration is :
Whether it is open to Prem Raj to take recourse to Section 70 of the Indian Contract Act and claim recompense from „DLF‟ for the services rendered by him when there was a valid contract between Prem Raj and „DLF‟ requiring „DLF‟ to recompense Prem Raj for the services rendered by him as per consideration agreed in Ex.P-4.
37. Section 70 of the Indian Contract Act reads as under:-
"70.Obligation of person enjoying benefit of non- gratuitous act - Where a person lawfully does anything for person or delivers anything to him, not intending to do so gratuitously, and such another person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."
38. In the decision reported as AIR 1962 SC 779 State of W.B. vs. B.K. Mondal & Ors the Supreme Court explained Section 70 RFA(OS) 12/1987 Page 15 of 19 of the Contract Act in the following terms:-
"14. It is plain that three conditions must be satisfied before this section can be invoked. The first condition is that a person should lawfully do something for another person or deliver something to him. The second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously; and the third is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. When these conditions are satisfied S.70 imposes upon the latter person, the liability to make compensation to the former in respect of or to restore, the thing so done or delivered. In appreciating the scope and effect of the provisions of this section is would be useful to illustrate how this section would operate. If a person delivers something to another it would be open to the later person to refuse to accept the thing or to return it; in that case S.70 would not come in to operation. Similarly, if a person does something for another it would be open to the latter person not to accept what has been done by the former; in that case again S.70 would not apply. In other words, the person said to be made liable under S.70 always has the option not to accept the thing or to return it. It is only where he voluntarily accepts the thing or enjoys the work done that the liability under S.70 arises. Taking the facts in the case before us, after the respondent constructed the warehouse, for instance, it was open to the appellant to refuse to accept the said warehouse and to have the benefit of it. It could have called upon the respondent to demolish the said warehouse and take away the materials used by it in constructing it; but, if the appellant accepted the said warehouse and used it and enjoyed its benefit then different considerations come into play and S.70 can be invoked. Section 70 occurs in chapter V which deals with certain relations resembling those created by contract. In other words, this chapter does not deal with the rights or liabilities accruing from the contract. It deals with the rights and liabilities accruing from relations which resemble RFA(OS) 12/1987 Page 16 of 19 those created by contract. That being so, reverting to the facts of the present case once again after the respondent constructed the warehouse it would not be open to the respondent to compel the appellant to accept it because what the respondent has done is not in pursuance of the terms of any valid contract and the respondent in making the construction took the risk of the rejection of the work by the appellant. Therefore, in cases falling under S.70 the person doing something for another or delivering something to another cannot sue for the specific performance of the contract nor ask for damages for the breach of the contract for the simple reason that there is no contract between him and the other person for whom he does something or to whom be delivers something. All that S.70 provides is that if the goods delivered are accepted or the work done is voluntarily enjoyed then the liability to pay compensation for the enjoyment of the said goods or the acceptance of the said work arises. Thus, where a claim for compensation is made by one person against another under S.70, it is not on the basis of any subsisting contract between the parties, it is on the basis of the fact that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. That broadly stated is the effect of the conditions prescribed by S.70.
....
It is unnecessary to repeat that in cases falling under S.70 there is no scope for claims for specific performance or for damages for breach of contract. In the very nature of things claims for compensation are based on the footing that there has been no contract and that the conduct of the parties in relation to what is delivered or done creates a relationship resembling that arising out of contract.
...(Emphasis Supplied)"
39. Relying upon the aforesaid underlined observations made by Supreme Court in Mondal‟s case (supra), in the decision RFA(OS) 12/1987 Page 17 of 19 reported as AIR 1967 Cal 310 Union of India v Lal Chand & Sons, it was held by Calcutta High Court that Section 70 of the Indian Contract Act has no application in a case where there is an express contract between the parties. A similar view was reiterated by the Andhra Pradesh High Court in the decision reported as AIR 1966 AP 297 Nuli Kanaka Rao & Ors v Tetali Sriranga Venkata Ramalinga Reddy.
40. We may also note the decisions reported as AIR 1964 Pat 555 Bhikhraj Jaipuria v State of Bihar and AIR 1961 Raj 6 Municipal Committee, Kishangarh v Maharaja Kishangarh Mills wherein it was held that Section 70 of the Indian Contract Act can be extended to cases where services were rendered or things delivered in pursuance of a contract which in law is void, meaning thereby that in the eyes of law no contract exists.
41. In the instant case, a valid contract Ex.P-4 exists, under which the consideration, by way of recompense for services rendered by Prem Raj Sharma, has been agreed to be given, but with a reciprocal obligation of Prem Raj Sharma to pay `9/- per sq.yd. for the 22 plots which had to be given to Prem Raj Sharma by way of consideration by „DLF‟. Prem Raj was not willing to pay any money.
42. Law prohibits, even otherwise, to try and achieve indirectly what is prohibited directly. Claim for specific performance having failed, the claim for damages in lieu of specific performance is barred in view of the provisions of Section 29 of the Specific Relief Act and it would be impermissible to grant recompense under garb of quantum meriut by awarding the said sum; which actually would be damages.
RFA(OS) 12/1987 Page 18 of 1943. Prem Raj Sharma may lament : What have I got in the bargain! It cannot be helped for the reason it was open to Prem Raj Sharma to get what was his due by seeking specific performance of Ex.P-4, but for which he had to allege his being ready and willing to pay `9/- per sq.yd. for the 22 plots which DLF had to allot to him. Far from so pleading, he took a stand that Ex.P-4 was void. It was at that stage for Pt.Prem Raj to have taken a call : Whether to reap the harvest under Ex.P-4 or to try and reap the harvest by challenging Ex.P-4. He ought to have realized that if his trying to reap a harvest by challenging Ex.P-4 failed, he would be left with nothing for the reason he could then not turn around and say that I would harvest Ex.P-4. He had a gamble. He threw the dice. If luck has not favoured him, he cannot lament that law has given him nothing. He must lament his ill luck.
44. Not to rub any more salt in the wounds, while dismissing the appeal, we leave the parties to bear their own costs.
(PRADEEP NANDRAJOG) JUDGE (MANMOHAN SINGH) JUDGE JULY 26, 2012 dk RFA(OS) 12/1987 Page 19 of 19