Decided on November 23,1950

JISUK RAM Respondents


Ray, C.J. - (1.) This is defendant 3's First Appeal in a suit for specific performance of contract of sale. The appellant is the subsequent purchaser with notice of the contract. The plaintiffs allege that defendants 1 and 2 are members of a joint family of which defendant 2, the uncle, is the manager. They on behalf of their joint family agreed on 28-6-1941, to sell properties specified in the plaint- schedule, for a consideration of Rs. 15,000/-. They received a sum of Rs. 2,000/- in part payment of the consideration as earnest money on that very day. It was agreed, in the terms of Ex. 6 (an agreement deed, dated, the same day) that the defendants would obtain permission of the Khasmahal authorities for the sale, and, within sale deed, after proper execution, for registration, whereupon the plaintiffs would pay the balance of the consideration money, that is, Rs. 13,000/- in cash, before the Sub-Registrar. On receipt of the consideration money the defendants would make over the registration ticket to the plaintiffs for taking delivery of the sale deed from the Sub-Registrar's office. The plaintiffs were then in possession of the disputed house as renters. It was also agreed that in default of the defendants' performance of their part of the contract, the plaintiffs would be entitled to enforce the same, and that on failure of the plaintiffs' carrying out their part, they forfeit the earnest money. They further allege that defendants 1 and 2, after various defaults, took a further sum of Rs. 225/- on 10-2-1943, towards the consideration money in order to enable them to purchase the stamp for executing the sale deed, but did not fulfil their part of the contract while the plaintiffs were ever ready and willing to perform theirs. It is further alleged that defendant 3 is a subsequent purchaser with notice of the contract and the sale deed in his favour is invalid and ineffective as against the plaintiffs' contract. Hence, the suit for specific performance on usual terms, or, in the alternative, for recovery of Rs. 5,000/as damages for non-performance of contract and repayment of Rs. 2,225/-paid towards the consideration money with interest 12 per cent. per annum as against defendants 1 and 2.
(2.) All the defendants contested the suit. The sum and substance of their defence, so far as it is material for the purpose of the appeal, is that it is the plaintiffs who defaulted in performance of their part of the contract of which time was the essential condition, and that, as they have not come with clean hands, they are not entitled to the equitable relief of specific performance. The deft. 3 (the appellant) has in addition, set up the plea that he is bona fide purchaser for value without notice of the contract and hence not bound by it. This plea, however, has not been pressed either in this Court, or in the Court below with any amount of seriousness. For the purpose of this decision, it shall be taken to be an assumed position that in case the plaintiffs be held entitled to the relief of specific performance of contract, the appellant shall be bound by it.
(3.) Both parties indulged in various exaggerations and untrue allegations each trying to throw the blame on the other. But in consideration of the view that we are going to take in the appeal, any discussion as to the truth or otherwise of those allegations will be completely fruitless. For the better understanding of the respective parties' case, the following dates and events will be of material assistance. The alleged contract, admittedly, took place on 28-6-1942. In the deed of agreement, in which the terms of the contract were incorporated, the performance of the contract was not unilateral but bi-lateral. Each had certain part to perform in order to perfect the transaction. According to the plaintiffs, the defendants were to obtain consent of the Khasmahal, and present a stamped deed of sale, duly executed, for registration, whereupon the plaintiffs were to deposit the consideration money before the Sub-Registrar, and obtain in return the registration ticket in order to enable them to take delivery of the sale deed from the registration office. The deed is completely silent as to who was to bear expenses necessary for purchasing the stamp for the sale deed and getting it registered. The parties were in dispute on this point. This, however, has been set at rest by the decision of the arbitrators to which I shall refer presently. According to the defendants, after their obtainment of Khasmahal permission for sale to the plaintiffs they repeatedly called upon the plaintiffs to pay money for purchase of the stamp and to be ready to perform their part of the contract, which, however, they failed to do. They (the defendants), therefore, served the plaintiffs with a registered notice, dated, 26-9-1941, repudiating the contract as cancelled due to the default of the plaintiffs. In the meantime, they had already applied, in Misc. Case No. 282 of 1942-43, to the Khasmahal authorities for granting them permission to sell the self-same properties for a consideration of Rs. 12,000/-to one Banarasi Dei wife of Bhikaraj. As Khasmahal Deputy Collector had previously given permission for sale to the plaintiffs he thought it proper that the plaintiffs should be given notice of this miscellaneous case, in which the plaintiffs filed an objection and served a notice dated 8-2-1943, on the defendants 1 and 2 calling upon them to execute and register the sale deed in pursuance of the agreement dated 286- 1941 within three days of the receipt of the notice. At this stage, at the intervention of the Khasmahal Deputy Collector the parties referred their disputes to the arbitrators, Babu J. N. Mitra, for the plaintiffs and Rai Bahadur G. C. Praharaj, Advocate, for the defendants. The dispute mainly was if time was the essence of the contract and if due to lapse of time the plaintiffs had forfeited the rights on the contract, or, if the defendants had failed to perform their part of presenting the deed for sale for registration and were not till then entitled to call upon the plaintiffs to come forward with the balance of the consideration to pay. Besides time factor, another essential difference was who was to pay the costs of stamp and registration. To this reference, Bhikaraj, on behalf of Banarasi Dei, with whom a subsequent contract had been since made, was a party too. The arbitrators gave an award (Ex. A) setting the matters in dispute as between the parties on 21-1-1943, in the following terms: (1) The consideration will be Rs. 15000/- and the balance of Rs. 13000/- will be paid before the Sub-Registrar. (2) The purchaser will pay the costs of Kabala, Khasmahal permission etc. (3) An accounting will be made of the rent due from the date of the contract to this date. (4) An accounting will be made of the interest due to the creditor from the date of the contract to this date. (5) After adjustment of the above accounts, each party will get his dues from the other. (6) Whatever loans were contracted from the purchaser on Khata will be credited against the consideration money. (7) Whatever advance was given by Bhikaraj Babu will be refunded to him and he will also get compensation therefor. (8) The money shall be paid to the creditor and endorsed on the back of the bond in presence of the vendor and the purchaser. (9) If the creditor does not take the money Rs. 13000/-will be credited in the Imperial Bank. (10) The vendor will get the cheque from the bank and send it to the creditor. (11) Money shall be deposited by purchaser without objection within 31-1-43 with Jadu Babu, Bhikari Babu and Gopal Chandra Praharaj and upon such deposit, stamp will be purchased and engrossed. (12) If deposit of the balance of Rs. 13000/- is not made on 31-1-43, Kabala will be executed in favour of Bhikaraj on 1-2-43. This award was accepted by the parties and they subscribed it in acknowledgment of such acceptance. What is the status of this award in relation to the contract between the parties is one of the most significant problems that presents itself for solution, barring paras. 3, 4, 5, 6 and 7 which have no material bearing upon the question, at issue, it being admitted by one of the plaintiffs that the right to fulfilment of the contract of sale on either side was not to be affected in any way by compliance or otherwise with the contents of the said paragraphs. The parties have advanced conflicting arguments on the point. According to the defence, such of the agreed terms of the award, as related to the contract of sale, replaced the original contract, while according to the plaintiffs, the original contract stood totally unaffected by the so-called award. They challenged that the document had not the capacity of an award. I am in entire agreement with what the learned Subordinate Judge said with regard to the nature and character thereof. It neither superseded nor replaced the original agreement except on which it was silent, or on which, due to their ambiguity, the parties were in dispute. The award, therefore, has to be considered as a complement to the original contract. The two should be read and understood together to make out a whole contract between the parties. They were in dispute as to who was to bear the costs of execution and registration of the 'Kabala' and securing of Khasmahal permission & etc. On this point, the original contract was silent. As to which party was in default regarding performance of his part of the contract rested much upon this difference. If the defendants were to defray the expenses they must be fixed with the failure of performance as they did not present the duly executed sale deed for the purpose of registration. If the plaintiffs were to bear the costs they must be held to be in default for non-payment of the costs without which the defendants could not be in a position to purchase the stamp and execute the sale deed and present the same for registration.;

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