Friday, 25 August 2017

Whether agreement of sale signed by one party is valid?


Before I go to discuss this aspect of the matter, let us take up the second point as urged by Mr. Chakraborty, learned counsel for the appellant. Mr. Chakraborty submits that the contract i.e. Ext. I is void one as it was not signed by both the parties. The argument of Mr. Chakraborty has no force inasmuch as it runs counter to Section 10 of the Contract Act. Section 10 of the Contract Act provides what agreements are contracts and Section 11 provides who are competent to make a contract. The agreement for sale need not be signed by both the parties. Agreement for sale is always a unilateral contract. So, this contention of Mr. Chakraborty falls through.

IN THE HIGH COURT OF GAUHATI

Second Appeal No. 70 of 1993

Decided On: 25.07.1997

Md. Mohar Ali
Vs.
Md. Mamud Ali and Ors.

Hon'ble Judges/Coram:
J.N. Sarma, J.

Citation: AIR 1998 Gauhati 92

1. The plaintiffs instituted a suit on 19-6-1984 in the Court of the Munsiff No. 1 at Nagaon for specific performance of contract.

2. The brief facts are as follows :

"The plaintiffs sold a plot of land to the defendant by a registered deed of sale on 19-2-1968. On the same date there was another registered deed, of sale stating that if the plaintiffs returns back the consideration money, the land sold by the plaintiffs shall be reconveyed to the plaintiffs. It is stated in the plaint that the possession of the land was not delivered to the defendant and lit continued with the plaintiffs and the plaintiffs used to pay paddy rent to the defendant. It is stated in para 2 of the plaint that the plaintiffs requested the defendant, to reconvey the, land for the last 3 to 4 years, but that was not done. But the defendant got me land mutated in his name of 8-3-1984, There also was a proceedings under Section 145 of Cr.P.C. and in that proceedings the possession of the land was declared in favour of the defendant. There was a revision before the Sessions Judge and that revision also was rejected. It is stated in para 3 of the plaint (by way of amendment) that the plaintiffs wanted to refund the money to the defendant but the defendant did not accept the money and as such he did not perform his part of the contract and as such the suit was filed for specific performance of contract.
3. Written statement was filed by the defendant wherein the defendant denied the execution of the reconveyance deed (agreement for sale Ext. I in the suit). It was also stated in the written statement that the plaintiffs are not entitled to specific performance of contract. There was a plea that the suit is barrel by limitation. Both the courts below held that Ext. 1, the agreement for sale was duly executed by the defendant. So, this is basically a findings of fact and in the second appeal I am not inclined to interfere with that findings of fact. The trial Court decreed the suit. There was an appeal and that appeal also was dismissed. Hence, this second appeal.

4. The following are the substantial questions of law : :

(i) Whether the readiness and willingness of the appellant to prove his part of contract was established ?

(ii) Whether there was compliance with provision of Section 16(c) of Specific Relief Act?

5. I have heard Mr. N. Chakraborty, learned counsel for the appellant and Mr. M. Rahman, learned counsel for respondents.

6. Mr. Chakraborty, learned counsel urges the following points :

(i) That the plaint is not in conformity with Section 16(c) of the Specific Relief Act and as such no decree can be passed on the basis of such a plaint.

(ii) That the agreement (Ext.1) executed is a void one and it was not signed by both the parties.

(iii) That there was inordinate delay in filing the suit and on this ground alone no decree for specific performance of contract can be passed, inasmuch as a decree for specific performance of contract after all is a discretionary relief and that discretion cannot be exercised after a long lapse of time.

7. On the other hand, Mr. M. Rahman, learned counsel for respondents submits that in the agreement for sale (Ext. I) no time limit was fixed and as provided by Section 54 of the Limitation Act the suit can be filed within 3 years from the date of refusal to perform the contract. He submits that the date of refusal in this particular case must be the date on which the defendant got his name mutated to the land that must be deemed to be the final refusal on the part of the defendant and from that date the limitation will run.

8. Before I go to discuss this aspect of the matter, let us take up the second point as urged by Mr. Chakraborty, learned counsel for the appellant. Mr. Chakraborty submits that the contract i.e. Ext. I is void one as it was not signed by both the parties. The argument of Mr. Chakraborty has no force inasmuch as it runs counter to Section 10 of the Contract Act. Section 10 of the Contract Act provides what agreements are contracts and Section 11 provides who are competent to make a contract. The agreement for sale need not be signed by both the parties. Agreement for sale is always a unilateral contract. So, this contention of Mr. Chakraborty falls through.

9. Next let us take up the first point urged by Mr. Chakraborty. He draws my attention of Form 47 and 48 in the Schedule of CPC which provides for pro forma of the plaint for a suit for specific performance of the contract and there it is specifically provided that in the plaint there must be a statement that the plaintiffs approached the defendant specifically to perform the agreement on this part but the defendant has not done so. There must be further statement in the plaint that the plaintiffs has been and still he is ready and willing to perform the agreement on his part which the defendant has had noticed. That this is the law, and for this proposition one may have a look at the following decisions :

1. MANU/SC/0006/1989(Abdul Khadcr Rowther v. P.K. Sara Bai) wherein para 12, the Supreme Court has pointed out as follows :

"A suit for specific performance has to conform to the requirements prescribed in Form 47 and 48 of the 1st Schedule in the Civil Procedure Code. In a suit for specific performance it is incumbent on the plaintiff not only to set but agreement on the basis of which he sues in all its details, he must go further and plead that he has applied to the defendant specifically to perform the agreement pleaded by him but the defendant has not done so. He must further plead that he has been and is still ready and willing to specifically perform his part of the agreement. Neither in the plaint nor at any subsequent stage of the suit the plaintiff has taken those pleas. As observed by this court in Pt. Prem Rai v. The D.L.P. Housing and Construction (Pvt.) Ltd. Civil Appeal No. 37/66, 'decided on 4-4-1968 (reported in MANU/SC/0039/1968, that it is well settled that in a suit for specific performance the plaintiff should allege that he is ready and willing to perform his part of the contract and in the absence of such an allegation the suit is not maintainable."
10. This was the law laid down by the apex Court in MANU/SC/0493/1969Ouseph Varghese v. Joseph Aley and that was accepted to be the correct law in the subsequent decision in the MANU/SC/0006/1989 (supra).

11. On the other hand, Mr. Rahaman learned counsel places reliance in MANU/GH/0029/1979 : AIR 1979 Gau 65(Kamdev Nath Choudhury v. Devendra Kr. Nath), that is a judgment by a single Judge of this Court wherein the learned single Judge pointed out that the provisions regarding pleadings in civil action ought not to be treated technically and it must be construed liberally. But in view of the decision of the apex Court as indicated above, I cannot accept this to be the correct law and I am bound to accept the decision of the apex Court.

12. The next point urged by Mr. Chajaaborty, learned counsel is that there was inordinate delay in filing the suit. The contract was in the year 1968 and the suit was filed only in the year 1984 and this discretionary relief of specific performance of contract cannot be granted in such a suit filed after a long lapse of time. In support of this contention Mr. Chakraborty places the following decisions :

1. MANU/SC/0415/1978(Mrs. Sandhya Rani Sarkar v. Smti Sudha Rani Debi) wherein there was delay of 12 years in filing the suit and the apex Court pointed out that that is inordinate delay and no suit for specific performance of contract can be decreed. :
13. The latest case on this point is MANU/SC/0404/1997(K.S. Vidyanandam v. Vairavan, wherein the earlier decisions of the apex Court was considered and in paras 9 ,10, 11, 12 and 14 of the judgment, it has been laid down as follows:

"9. Article 54 of the Limitation Act prescribes three years as the period within which a suit for a specific performance can be filed. The period of three years is to be calculated from the date Specified in the agreement for performance or in the absence of any such stipulation, within three years from the date the performance was refused.

10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time limit (s) specified in the agreement have no relevance and can be ignored with impugnity? It would also mean denying the discretion vested in the court by both Sections 10 and 20. As held by a Constitution Bench of this court in Chand Rani v. Kamal Rani (1993) 1 SCC 528 : AIR 1993 SCW 1371 at page 1754 (of AIR SCW).

"........... it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident?) : (1) from the express teems of the contract; (2) from the nature of the property, and (3) from the surrounding circumstances, for example, the object of making the contract."
In other words, the court should look at all the relevant circumstanced including the time limit (s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised."

11...........Indeed, we are inclined to think that the rigour of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties evolved in times when prices and values were stable and inflation was unknown -- requires to be relaxed, if not modified, particularly, in the case of urban immovable properties. It is high time, we do so."

12. Shri Sivasubramaniam relied upon the decision of this Court in Mademsetty Satyanarayana v. G. Yellogi Rao, wherein it has been held :

"As Article 113 of the Limitation Act prescribes a period of 3 years from the date fixed thereunder for specify performance of a contract, it follows that mere delay without more extending up to the said period cannot possibly be a reason for a court to exercise its discretion against giving a relief of specific performance. Nor can the scope of the discretion, after excluding the cases mentioned in Section 22 of the Specific Relief Act, be confined to waiver, abandonment or estoppel. If one of these three circumstances is established no question of discretion arises, for either there will be no subsisting right or there will be a bar against its assertion. So, there must be some discretionary field unoccupied by the three cases, otherwise the substantive section becomes otiose. It is really difficult to define that field; Diverse situations may arise which may induce a court not to exercise the discretion in favour of the plaintiff. It may better be left undefined except to state what the section says, namely discretion of the court is not arbitrary, but sound and reasonable guided by judicial principles and capable of correction by a court of appeal.

Subba Rao, J., speaking for the Bench, pointed out the distinction between Indian Law and the English Law on the subject and stated the conclusion in the following words :

"While in England mere delay or laches may be aground for refusing to give a relief of specific performance, in India mere delay without such conduct on the part of the plaintiff as would cause prejudice to the defendant does not empower a court to refuse such a relief....... It is not possible or desirable to lay down the circumstances under which a court can exercise its discretion against the plaintiff. But they must be such that the representation by or the conduct or neglect of the plaintiff is directly responsible in inducing the defendant to change his position his prejudice or such as to being about a situation when it would be inequitable to give him such a relief:

14. Shri Sivasubramaniam then relied upon the decision in Jiwan Lal (Dr.) v. Brij Mohan Mehra to show that the delay of two years is not a ground to deny specific performance. But a perusal of the statement shows that here were good reasons for the plaintiff to wait in that case because of the pendency of an appeal against the order of requisition of the suit property. We may reiterate that the true principle is the one stated by the Constitution Bench in Chand Rani. Even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property."

14. In the latest decision it has been stated that the court in decreeing the suit for specific performance of contract must take into account that the suit must be filed within reasonable time and if the suit is filed beyond the reasonable time, it should be dismissed on that ground alone inasmuch as it cannot be expected that the party will sit tight for all these years and in the meantime the character of the property is changed, value of the property will go up. All these factors must be taken into account as pointed out by the apex Court.

15. In view of that matter as indicated above I hold that this second appeal is to be allowed for inordinate delay in filing the suit which I thereby do. Accordingly, this second appeal is allowed and the judgments of both the courts below are set aside and the suit is dismissed without costs.


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