19891.Samrathmal Jain (died)2.Lalitha Devi3.Anil Kumar4.Anitha( v. Madras 1

IN THE HIGH COURT OF JUDICATURE AT MADRASDated: 28.10.2005Coram:The Hon'ble Mr. Justice P.K.MISRAandThe Hon'ble Mr. Justice N.KANNADASANO.S.A.No.150 of 19891.Samrathmal Jain (died)2.Lalitha Devi3.Anil Kumar4.Anitha(Appellants 2 to 4 brought on record as L.Rs. of the deceased sole appellant as per order of Court dated 27.1.2004 made in CMP.No.5606/98).. Appellants/Plaintiffvs.1.Nainshukdas Baldeodas a Partnership Firm rep., by defendants 2 and 3 having registered office at No.1/422, Mint Street, Madras 1. 2.Surajnarian Daga (deceased)3.Premnarain Daga (deceased)4.Lakshminarain Daga5.Shrinarain Daga6.Sathyanarain Daga7.Gawara Devi Daga8.Praveen kumar Daga9.Praful kumar Daga10.Rajashree Rathi.. Respondents/ DefendantsRR4 to 6 brought on record as L.Rs of deceased 2nd Respondent andadded as Respondents 4 to 6 vide order of court dated 27.6.2005and made in CMP.Nos.8803 to 8805/98 RR7 to 10 brought on record asLRs of the deceased 3rd respondent and added as respondents 7 to10 vide order of Court, dated 27.6.2005 and made in CMP.Nos.1337to 1339/2004.Appeal filed as against the judgment and decree of thisCourt dated 2.2.1989 in C.S.No.74 of 1983. https://hcservices.ecourts.gov.in/hcservices/ For Appellants : Mr.R.Thiagarajan For Respondents-1,4 to 10 : Mr.R.Krishnaswamy, Senior Counsel for Mr.H.Kishore Respondents-2&3: DiedJUDGMENTN.KANNADASAN, J.The above appeal is filed as against the judgment anddecree dated 2.2.1989 in C.S.No74 of 1983.2. The first appellant is the plaintiff in the suit andthe appellants 2 to 4 are the legal representatives of the firstappellant. The respondents herein are the defendants in the suit.3. The plaintiff filed the suit seeking a relief ofspecific performance, in default directing the execution of thesale deed and delivery of possession of the property and as wellas claiming a sum of Rs.1 lakh towards damages. The suit is filedcontending that the first defendant firm on 25.7.1980 agreed tosell the suit property for a sum of Rs.4,80,000/- to theplaintiff, for which the plaintiff issued a cheque for a sum ofRs.21,000/- towards advance, which was acknowledged by the firstdefendant by way of a receipt. As per the agreement, thedefendants should obtain necessary Income Tax ClearanceCertificate, Wealth Tax Certificate for the early execution of thesale deed and the time for performance of the contract was notspecified. The title deeds relating to the property was handedover to the plaintiff's lawyer Mr.T.Chopda, who has passed on thetitle to the suit property. Subsequently, the defendants madeavailable further documents and instructed the plaintiff's lawyerby name Purushothaman to prepare the draft sale deed for thepurpose of execution. Since the plaintiff's lawyer advised that itwould not be possible to get the registration of the sale deeddone unless certain other documents such as Income Tax ClearanceCertificate, Wealth Tax Certificate and Blue print of the propertyshowing the exact measurement and an encumbrance Certificate for aperiod of 50 years were made available, which was agreed to by thedefendants. Subsequently,all of a sudden the defendantscaused a notice dated 24.10.1980 addressed to the plaintiff'slawyer Purushothaman to the effect that the defendants handed overthe documents only for the purpose of scrutiny and return and assuch, the said documents should be returned. When the said notice https://hcservices.ecourts.gov.in/hcservices/ was brought to the knowledge of the plaintiff, by letter dated6.11.1980 he had informed the defendants that the contract wassubsisting and out of the sale consideration of the property ofRs.4,80,000/-, a sum of Rs.21,000/- was already paid as advanceand the plaintiff was ready and willing to pay the balance saleconsideration. The defendants issued a reply notice dated11.11.1980, wherein it is mentioned that the documents wereentrusted to the plaintiff's lawyer only for scrutiny and return.Subsequently, the plaintiff has sent a lawyer's notice dated14.11.1980 reiterating the earlier stand and directed thedefendants to perform their part of the contract and also claimeda sum of Rs.1 lakh towards damages. Under the said circumstances,the suit is filed seeking the relief as stated above.4. The suit was resisted by the defendants by contendingthat an agreement of sale was not finalised and the terms andconditions were not arrived at and the contract was not concludedand only the sale price was finalised and the defendants neveragreed to handover all the Certificates such as Income TaxClearance Certificate, Wealth Tax Certificate and Blue print asclaimed by the plaintiff, but however, made available the titledeeds to the plaintiff's lawyer Mr.T.Chopda. Since the plaintiffdid not take any steps to proceed further and the value of theproperty has gone up in the meanwhile, the defendants have issueda notice dated 24.10.1980 directing the plaintiff's lawyer toreturn all the documents immediately.5. In the light of the above pleadings, the learnedsingle Judge has framed as many as four issues as set outhereunder:-1. Whether there was a concludedcontract for the sale of property between theplaintiff and the defendants?2. What are the terms of the agreementof sale?3. Whether the plaintiff was ready andwilling to perform his part of the contract?4. Whether it will be unjust andinequitable to order specific performance forthe reasons stated by the defendants 1 and 3?6. The learned single Judge, by judgment and decreedated 2.2.1989 in C.S.No.74 of 1983, held that there was noconcluded contract, but however, directed refund of the amount ofRs.21,000/- with interest at the rate of 12% from 11.11.1980, onwhich date the forfeiture of advance was referred to, and awardeda sum of Rs.9,600/- as a nominal damages. Aggrieved against thesaid judgment and decree, the present appeal is filed. https://hcservices.ecourts.gov.in/hcservices/

7. Learned counsel appearing for the appellantscontended that the learned single Judge has taken inconsistentstand inasmuch as a findings rendered in paragraph-13 of thejudgment to the effect that though there was no concludedcontract, but there existed a contract of sale in respect of thesuit property for a specified price agreed between the parties.Learned counsel further contended that inasmuch as a finding isrendered by the learned single Judge that the plaintiff was readyand willing to perform his part of contract, and there was breachonly on the part of the defendants and passed a decree to refundthe amount of Rs.21,000/- with interest apart from payment of anominal damages of Rs.9,600/-, the discretion ought to have beenexercised in favour of the plaintiff by decreeing the suit asprayed for.8. Learned counsel also placed reliance upon the variousdocumentary evidences as well as oral evidence adduced by theparties in support of his contention. Learned counsel also placedreliance upon the provisions viz., Sections 9 and 55 of the IndianContract Act as well as Sections 16(c) and 20 of the SpecificRelief Act in support of his contention.9. Per contra, learned senior counsel for therespondents contended that as per the materials available onrecord, at no stretch of imagination, a decision can be arrived atthat there was a concluded contract between the parties. In thisconnection, learned senior counsel has placed reliance upon theoral evidence as well as the documentary evidence. Learned seniorcounsel also placed reliance upon the various citations in supportof his contention.10. We have considered the rival contentions of theleaned counsels appearing on either side.11. The point for determination that arises in thisappeal is:"Whether the judgment and decree ofthe learned single Judge is sustainable in lawor not?"12. It is not in dispute that on 25.7.1980, theplaintiff has paid a sum of Rs.21,000/- towards advance, for whicha receipt was issued by the first defendant firm, evidencing thesaid payment for the purchase of the property in question. Thoughthere is no dispute that the parties have agreed to for the saleand the sale consideration is also arrived at, it is to be seen asto whether there was a concluded contract or not. In a suit forspecific performance, one of the essential feature is that thereshould be consensus ad idem between the parties. In order to https://hcservices.ecourts.gov.in/hcservices/ ascertain as to whether there was a mutuality of minds and thecontract was concluded or not, we have to necessarily see therelevant evidence adduced by the parties in the light of the oraland documentary evidences.13. Ex.P.1 dated 25.7.1980 indicates that a sum ofRs.21,000/- is received towards advance from the plaintiff againstthe sale of the suit property and the total sale consideration isindicated as Rs.4,80,000/-. The plaintiff while tendering evidenceas PW.1 has admitted that there were no other terms and conditionsof the agreement, apart from the amounts indicated in Ex.P.1. Hehas also deposed that there was no oral agreement of sale excepton certain aspects such as stamp charges, advocate's fee andregistration fee. He has also admitted in his evidence that therewas no specific pleading in respect of the exact terms andconditions relating to such matters. Initially the plaintiff hassought the opinion of his lawyer by name one T.Chopda who was notexamined. The subsequent lawyer of the plaintiff's viz.,Purushothaman gave evidence as PW.2. He has deposed that when thedefendants handed over the documents to him, he handed over thereceipt viz., Ex.D.16. In Ex.D.16, he has only indicated that hehas received the said documents in connection with the "Proposalto Sell' of the suit property. In his evidence, he has admittedthat he did not know about any proposal for agreement and he wasnot aware of the terms and conditions of the sale. If really, thedocuments were handed over to him for the execution of the saledeed, one cannot expect him to plead ignorance about all thesevital details. Under the said circumstances, we are of the opinionthat there was no consensus ad idem between the parties and therewas no concluded contract and as such, the plaintiff cannotenforce the specific performance as pleaded by him. Since we haveto come to the conclusion that there was no concluded contract,the other details as to whether the defendants agreed to producethe other Certificates such as Income Tax Clearance Certificate,Wealth Tax Certificate etc., have no relevance. 14. Learned counsel for the appellants further contendedthat even though the defendants agreed to perform the impliedpromise, they did not do so, but however, chose to send a legalnotice dated 24.10.1980 under Ex.P.2 for return of the documentswith a view to avoid execution of the sale deed. It is seen fromthe records that even though an amount of Rs.21,000/- was paid byway of advance as early as on 25.7.1980 and immediatelythereafter, all the title deeds pertaining to the property werehanded over to the previous counsel for the plaintiffs viz.,T.Chopda and when the said counsel returned the title deeds, thesame were handed over once again to the subsequent counsel viz.,T.A.M.Purushothaman. While receiving the said title deeds, thesubsequent counsel Purushothaman in Ex.D.16 has merely https://hcservices.ecourts.gov.in/hcservices/ acknowledged the receipt of the said documents wherein it isspecifically mentioned that the said documents were received forinspection and proposal to sell. In the said receipt, it is notindicated that the defendants are required to produce furtherdocuments such as Income Tax Clearance Certificate etc., for thepurpose of preparation of sale deed. Neither the plaintiffs northeir counsel have chosen to send any communication thereafter,directing the defendants to make available suchcertificates/documents. Under the said circumstances, thedefendants have chosen to send lawyer's notice under Ex.P.2. It isonly on receipt of the said notice, the plaintiffs have sent aletter dated 6.11.1980 in Ex.P.3, wherein for the first time, itis indicated that the defendants are required to producecertificates such as Income Tax Clearance Certificate etc. Thatapart, the abovesaid Purushothaman, while giving evidence, asPW.2, has admitted that he went through the documents immediatelywithin two hours of such production. If that is so, there is noproper explanation on the part of the plaintiffs as to why theplaintiffs were keeping quite for such a long period withoutsending any communication to the defendants requesting them tomake available such documents for the purpose of the preparationof the sale deed. Assuming that the documents were handed over forthe preparation of sale deed and the same could not be done forwant of production of certain documents such as Income TaxClearance Certificate, it is to be seen that PW.2 has not evenprepared the draft sale deed which is essential for the purpose ofobtaining Income Tax Clearance Certificate. PW.2, while deposingevidence, has admitted the said fact.15. Even though the learned senior counsel appearing forthe defendants contended that the findings of the learned Judge inrespect of other issues viz., readiness and willingness on thepart of the plaintiffs and there was a breach on the part of thedefendants are not based on the materials available on record, wedo not propose to deal with the said contentions in view of theconclusions arrived at by us to the effect that there was noconcluded contract between the parties.16. Learned counsel for the appellants placed relianceupon the decision of a Division Bench of this Court in PALANICHAMIvs. G.PILLAI (AIR 1966 Madras 46) to substantiate that in theabsence of any express provision with regard to the completion oftransaction within the specified time, the Courts have to renderdecision based on equity. He has also placed reliance upon thejudgment of the Apex Court rendered in RAMESH CHANDRA vs. CHUNILAL (AIR 1971 SC 1238) to substantiate that the discretionaryrelief should be exercised in accordance with sound and reasonableprinciples. Similarly, he has placed reliance upon the decision inPRAKASH CHANDRA vs. ANGADLAL (AIR 1979 SC 1241) and contended that https://hcservices.ecourts.gov.in/hcservices/ ordinarily specific performance should be granted and it can bedenied only when equitable considerations point to its refusal andthe circumstances show that damages would constitute an adequaterelief. He has also placed reliance up the other decisions viz.,SMT.INDIRA KAUR AND OTHERS vs. SHEO LAL KAPOOR (1988 (2) SCC 488),ABDUL KHADER ROWTHER vs. P.K.SARA BAI AND OTHERS (1989 (4) SCC313), REDDY C.V. vs. THE INDIAN BANK ETC. (1991 (2) Law Weekly 42,MUNISWAMY, R. AND 6 OTHERS vs. P.PANDIARAJAN AND 3 OTHERS (1993(1) Law Weekly 186), RAM NIWAS vs. BANO (2000 (6) SCC 685) andSURJIT KAUR vs. NAURATA SINGH (2000 (7) SCC 379) in support of hiscontention.17. In the light of the findings rendered by us, all theabove referred decisions are not applicable to the facts of thepresent case, since the oral and documentary evidence amplydemonstrate that there was no mutuality between the parties andthe contract was not a concluded one.18. With regard to the contention urged by the learnedcounsel for the appellants on the basis of provisions in Section16(c) and Section 20 of the Specific Relief Act, and Sections 9and 55 of the Indian Contract Act, it is to be seen that theplaintiff cannot seek any indulgence on the facts of the presentcase. In this connection, it is useful to refer to the decision ofthe Apex Court in K.S.VIDYANADAM AND OTHERS vs. VAIRAVAN (1997 IIISCC 1), wherein it is observed that the party is not entitled fora discretionary relief on the payment of a small amount as earnestmoney considering the fact that the house property located in theurban area and continuing steep rise in price thereof, which isalso one of the relevant factor for the Court to decide. The factsof the said decision is squarely applies to the facts of thepresent case also. Similarly, the principles laid down by theDivision Bench of this Court in Kumarasamy and Others vs. S.K.John(died) and Others (1993 II MLJ 144) proceeds to the effect that ifthere is a lack of mutuality between the parties, it is a validground for refusing specific performance. Further, Section 7 ofthe Contract Act proceeds as follows:-"In order to convert a proposal into apromise, the acceptance must (1) be absolute andunqualified." In the light of the above provision, considering the fact that theparties herein are only at the stage of negotiations on which datethe advance amount was paid, it cannot be construed that thecontract was a concluded contract. The above view is supported bythe principles laid down by a Division Bench of this Court inBoard of Control for Cricket in India vs. Zee Telefilms Ltd (2005(2) CTC 609). https://hcservices.ecourts.gov.in/hcservices/

19. As regards the next contention urged by the learnedcounsel for the appellants to the effect that the learned singleJudge is not consistent while rendering the judgment in the lightof what is stated in paragraph-13 of the judgment is concerned, itis to be seen that the learned single Judge has merely referredtherein that even though there is no concluded contract, thecontract of sale of the suit property existed as pleaded by theplaintiff. Learned single Judge, while referring as above, hasfurther qualified that the parties have agreed for a fixed priceas evident from Ex.P.1 and as such, in the absence of necessaryterms and conditions, the stand taken by the plaintiff to theeffect that there was a contract of sale of the suit property,cannot be rejected. Even though there existed a contract of sale,in a suit for specific performance, what is required is that thereshould be a concluded contract between the parties. Learned singleJudge in the very same paragraph has observed that there is noconcluded contract embodying all necessary terms and conditions.Hence, we cannot accept the contention of the learned counsel thatthe learned single Judge has adopted an inconsistent stand. 20. Similarly, on the contention urged by the learnedcounsel for the appellants that the readiness and willingness onthe part of the plaintiff was accepted by the learned singleJudge, but however, denied the relief, it is to be seen that thelearned Judge came to the said conclusion on the basis that whenthe lawyer's notice dated 24.10.1980 in Ex.P.2 was sent to theplaintiff's counsel, seeking for the return of the documents,there was no reference about any default on the part of theplaintiff in performing his part of the contract or about theforfeiture of the advance amount. Learned single Judge has alsoadverted to the fact that the defendants for the first time tookthe stand only on 11.11.1980 in Ex.P.4 that the amount paid by wayof advance would be forfeited. It is only under the saidcircumstances, learned single Judge has directed for return of thesaid sum of Rs.21,000/- along with interest at the rate of 12%from 11.11.1980 and also ordered nominal damage of Rs.9,600/-.Hence, the contention in this regard urged by the learned counselfor the appellants has no merit.21. The Supreme Court in its judgment reported in 1990 4SCC 147 (Brij Mohan vs. Sugra Begum) has clearly held thatwhenever the plaintiff has come forward to seek a decree forspecific performance of contract of sale of immovable property onthe basis of an oral agreement alone, heavy burden lies on him toprove that there was consensus ad idem between the parties for aconcluded oral agreement of sale of immovable property. In theinstant case, the plaintiff has not discharged the said burden inproving that there was consensus ad idem. In this regard, the https://hcservices.ecourts.gov.in/hcservices/ Supreme Court in its judgment reported in 1999 (1) SCC 1 (RICKMERSVERWALTUNG GMBH vs. INDIAN OIL CORPORATION LTD) has laid down thelaw as set out here-under:-"13. In this connection the cardinalprinciple to remember is that it is the duty ofthe court to construe correspondence with aview to arrive at a conclusion whether therewas any meeting of mind between the parties,which could create a binding contract betweenthem but the court is not empowered to create acontract for the parties by going outside theclear language used in the correspondence,except insofar as there are some appropriateimplications of law to be drawn. Unless fromthe correspondence, it can unequivocally andclearly emerge that the parties were ad idem tothe terms, it cannot be said that an agreementhad come into existence between them throughcorrespondence. The court is required to reviewwhat the parties wrote and how they acted andfrom that material to infer whether theintention as expressed in the correspondencewas to bring into existence a mutually bindingcontract. The intention of the parties is to begathered only from the expressions used in thecorrespondence and the meaning it conveys andin case it shows that there had been meeting ofmind between the parties and they had actuallyreached an agreement upon all material terms,then and then alone can it be said that abinding contract was capable of being spelt outfrom the correspondence"22. Similarly, the Supreme Court in its decisionreported in 1990 (3) SCC 1 (MAYAWANTI vs. KAUSHALYA DEVI) hasobserved as follows:-"8. In a case of specific performance it issettled law, and indeed it cannot be doubted, thatthe jurisdiction to order specific performance of acontract is based on the existence of a valid andenforceable contract. The Law of Contract is basedon the ideal of freedom of contract and it providesthe limiting principles within which the partiesare free to make their own contracts. Where a validand enforceable contract has not been made, thecourt will not make a contract for them. Specificperformance will not be ordered if the contractitself suffers from some defect which makes thecontract invalid or enforceable. The discretion of https://hcservices.ecourts.gov.in/hcservices/ the court will be there even though the contract isotherwise valid and enforceable and it can pass adecree of specific performance even before therehas been any breach of the contract. It is,therefore, necessary first to see whether there hasbeen a valid and enforceable contract and then tosee the nature and obligation arising out of it.The contract being the foundation of the obligationthe order of specific performance is to enforcethat obligation."23. Similarly, the Supreme Court in its judgmentreported in AIR 1989 SC 839 (I.T.C. Ltd. vs. G.J.Fernandes) hasheld that where the parties make mutual mistake in understandingeach other and are at cross purposes, there is no realcorrespondence of offer and acceptance, there is no consensus adidem existing. It is further held therein that there is noagreement at all; and the contract is also void.24. Similar view is expressed by the Apex Court in itsdecision in 1996 (2) SCC 667 (U.P.RAJKIYA NIRMAN NIGAM LTD vs.INDURE PVT. LTD). The relevant paragraph is extracted here-under:"17. In Ramji Dayawala & Sons (P) Ltd vs.Invest Import, a two-Judge Bench of this Courtconsidered the existence of the contract andarbitration clause thereunder. This Court hadheld that in the facts of a given caseacceptance of a suggestion may be sub silentioreinforced by the subsequent conduct. Wherethere is a mistake as to terms of a document,amendment to the draft was suggested and acounter-offer was made, the signatory to theoriginal contract is not estopped by hissignature from denying that he intended to makean offer in the terms set out in the document.Where the contract is in a number of parts it isessential to the validity of the contract thatthe contracting party should either haveassented to or taken to have assented to thesame thing in the same sense or as it issometimes put, there should be consensus adidem. In that case a sub-contract was signedand executed by the Managing Director of theappellant-Company but part of the contract wasaltered subsequently since counter-proposal wasgiven by the respondent. This Court had heldthat one such case is where a part of the offerwas disputed at the negotiation stage and the https://hcservices.ecourts.gov.in/hcservices/ original offeree communicated that fact to theofferor saying that he understood the offer in aparticular sense; this communication probablyamounts to a counter-offer in which case it maybe that mere silence of the original offerorwill constitute his acceptance. Where there is amistake as to the terms of the documents as inthat case, amendment to the draft was suggestedand a counter-offer was made, the signatory tothe original contract is not estopped by hissignature from denying that he intended to makean offer in the terms set out in the document;to wit, the letter and the cable. It can,therefore, be stated that where the contract isin a number of parts it is essential to thevalidity of the contract that the contractingparty should either have assented to or taken tohave assented to the same thing in the samesense or as it is sometimes put, there should beconsensus ad idem. It was held that there was noconsensus ad idem to the original contract. Itwas open to the party contending novatio toprove that he had not accepted a party of theoriginal agreement though it had signed theagreement containing that part."25. Under the abovesaid circumstances and by applyingthe principles of law as narrated supra, we do not see any reasonto interfere with the order of the learned single Judge andaccordingly, the above appeal is dismissed. No costs.SvnSd/Asst.Registrar/true copy/Sub Asst.RegistrarTO1. The Sub Assistant Registrar, Original Side, High Court, Madras.+ 1 cc to Mr.H. Kishore, Advocate SR No.43674+ 1 cc to Mr.R. Thiagarajan, Advocate SR no.44010NG(CO)SR/11.11.2005 Judgment inO.S.A. 150 of 1989