1. The instant first appeal has been preferred by the appellant-plaintiff (for brevity-'the appellant') aggrieved by the judgment and decree dated 16.03.1996 passed by the learned Additional District Judge No. 6, Jaipur City, Jaipur, whereby, the Civil Suit No. 474/1989 seeking decree of specific performance of the agreement dated 24.10.1988, mesne profit as well as permanent injunction, has been dismissed.
2. The facts in brief are that the appellant filed a suit with the averments that the respondent-defendant no. 1 (for brevity-'the respondent no. 1') agreed to sell, vide sale agreement dated 24.10.1988, the property bearing municipal no. 2820/21, Kalyan Ji Ka Rasta Mohalla Nayariyan, Jaipur, comprising of a shop on ground floor with multi-storied residential house constructed thereon for a total sale consideration of Rs. 2,13,000/- under which an advance of Rs. 13,000/- was paid on that day itself. Under the agreement, the respondent no. 1 was required to hand over possession of the entire property to the appellant within a period of one and a half months from the date of its execution on receipt of Rs. 1,00,000/- and the balance sale consideration of Rs. 1,00,000/- was to be paid at the time of registration of the sale deed, which was to be done within two months from the date of the agreement. It was averred that the time for execution of the sale deed was extended by 15.12.1988; but, when the appellant approached the respondent no. 1 with the demand draft of Rs. 1,00,000/- on 15.12.1988, neither the demand draft was accepted nor possession of the property was handed over. It was alleged that thereafter, the respondent no. 1 did not approve the draft sale deed sent to him by the appellant and also did not get the income tax clearance certificate. It was submitted that when the respondent no. 1 was requested vide notice dated 15.12.1988, telegram dated 23.12.1988 and the legal notice dated 24.12.1988 to execute the sale deed; he, vide reply dated 2.01.1989 sent through his counsel, responded stating that he had already entered into an agreement to sell with Adi Gaur Brahmin Moorti Kalakar Sanstha, Jaipur and denied execution of any agreement in his favour. In these circumstances, the appellant sought the decree, as aforesaid.
3. During the pendency of suit, the Adi Gaur Brahmin Moorti Kalakar Sanstha, Jaipur, on its application under Order 1 Rule 10 CPC, came to be impleaded as the respondent-defendant no. 2 (for brevity-'the respondent no. 2').
4. The respondent no. 1 in his written statement, admitted receipt of Rs. 13,000/- in cash; but, as loan and not towards part sale consideration. He denied execution of the agreement to sell dated 24.10.1988 in favour of the appellant. He contended that to secure the loan; on asking of the appellant, he has signed certain documents without any intention of selling the property as he has already entered into its sale agreement dated 27.08.1981 with the respondent no. 2. He averred that he has handed over possession of the entire property to the Sanstha on 14.09.1988 receiving part sale consideration of Rs. 20,000/- in cash. He stated that he has received balance sale consideration of Rs. 80,000/- through account payee cheque on 13.05.1989 and has, thus, received entire sale consideration of Rs. 1,00,000/- for whole of the property save the shop on the ground floor and has also executed the sale deed on 20.07.1989. He submitted that sale deed of the shop only remained to be executed; which, he would do as and when so required by the respondent no. 2. He pleaded that since, as on 24.10.1988, he was not in possession of any part of the property in question, there was no occasion for execution of the agreement to sell in favour of the appellant. He, therefore, prayed for dismissal of the suit.
5. The respondent no. 2 in its written statement denied execution of any agreement to sell by the respondent no. 1 in appellant's favour. It was averred that the respondent no. 1 has already, vide agreement dated 27.08.1981, agreed to sell the property in question in its favour. Reiterating the averments made by the respondent no. 1 in his written statement with regard to payments made, possession received and execution of the registered sale deed, it was submitted that suit filed by the appellant be dismissed.
6. The learned trial Court has, after recording the evidence of the parties, dismissed the suit vide its judgment and decree dated 16.03.1996.
7. Shri R.K. Agarwal, learned Senior Counsel appearing for the appellant contended that the learned trial Court erred in dismissing the suit even after rejecting the plea of the respondent no. 1 of having received Rs. 13,000/- from the appellant by way of loan and recording a categorical finding that it represented advance sale consideration under the agreement to sell dated 24.10.1988 executed by him as well as the finding that the appellant was always ready and willing to perform his part of the contract and it was the respondent no. 1, who defaulted in performance of his part while deciding the Issues no. 2 and 9 in appellant's favour.
8. The learned Senior Counsel submitted that once the execution of the agreement dated 24.10.1988 in his favour was recognised by the learned trial Court, it was under an obligation to scrutinize the validity of the sale agreement dated 27.08.1981 scrupulously inasmuch as the respondents were relying on this deed to frustrate his rights under the established deed dated 24.10.1988.
9. The learned Senior Counsel contended that the so called agreement to sell (Exhibit-A-1) dated 27.08.1981 was a forged and fabricated document. He submitted that the tenor of the recitals on page no. 1 of the document clearly reflected that the dispute between the parties was confined to opening of the three windows in the residential premises of the respondent no. 1 towards property of the respondent no. 2-Sanstha only; but to defeat his rights under the agreement dated 24.10.1988, the page no. 2, recitals on a plain paper, had been substituted later on to give the document shape of an agreement to sell.
10. The learned Senior Counsel submitted that the document dated 27.08.1981 could not be construed as an agreement to sell inasmuch as the Sanstha was neither a party to it nor, any obligation had been cast upon Sanstha to purchase the property nor, the seller had been bestowed upon any right under it to get it enforced against the purchaser. He submitted that at the best, it could have been construed as an agreement to enter into an agreement to sell or as grant of right of preemption by the respondent no. 1 in favour of the respondent no. 2; but, in no case, an agreement to sell.
11. Shri Agarwal contended that the respondents have relied upon the resolution dated 24.08.1981 (Exhibit-A-8) to lend support to the agreement to sell dated 27.08.1981; but, the resolution nowhere reflected even a shred of intention by the respondent no. 1 to sell the property in favour of the respondent no. 2 and as the matter of fact, it did not refer to any agreement between the parties with regard to sale of the property in question at all; rather, was confined to the closure of the windows only corresponding to the recitals on page no. 1 of the deed dated 27.08.1981. He submitted that the respondent no. 1-Shri Madhav Prasad as DW-3 had admitted during the course of cross examination that no such deed was ever executed between the parties to show that sale consideration of Rs. 2,00,000/- was agreed between them.
12. He submitted that even otherwise also, the averments in the deed did not represent any intention of the parties to enter into an agreement to sell wherein neither the time frame for execution of the sale deed nor, consideration for sale of the property had been specified and therefore, suffered from vice of uncertainties as to the conditions essential for a valid agreement to sell and was rendered void being hit by Section 29 of the Contract Act, 1872.
13. The learned Senior Counsel contended that even as per the respondents, the agreement dated 27.08.1981 was acted upon after more than 7 years in the shape of a cash transaction of Rs. 20,000/- dated 14.09.1988. He submitted that the respondents have relied upon two documents to substantiate the payment; receipt dated 14.09.1988 and minutes of meeting dated 13.09.1988. Raising doubt about the veracity of the aforesaid payment, he contended that the respondent no. 2 being a registered Society was not expected to make a huge cash payment of Rs. 20,000/- for purchase of the immovable property. He submitted that even the receipt dated 14.09.1988 neither refers the agreement dated 27.08.1981 nor, the total sale consideration agreed between the parties even by that time. He asserted that the minutes of the meeting of the Society dated 13.09.1988 (Exhibit-A-9) does not inspire confidence as to its genuineness. The respondent no. 2 has failed to produce the complete register containing the resolutions in absence whereof, it cannot be denied that these minutes were fabricated to defeat his rights. He further submitted that meeting dated 13.09.1988 was allegedly convened on receipt of the letter dated 13.08.1988 from the respondent no. 1; but, the letter had not been placed on record to lend credential to the averments. Referring the contents of the minutes of the meeting dated 13.09.1988, Shri Agarwal submitted that even in this meeting, the exact sale consideration of the property remained undecided as the market value was assessed as approximately two lacs. Shri Agarwal contended that only payment through cheque by the Society was made on 13.05.1989 i.e., after the execution of agreement dated 24.10.1988 in his favour and therefore, it can safely be presumed, in the attending facts and circumstances, that the receipt dated 14.09.1988 was manufactured later on only to show that the agreement dated 27.08.1981 was acted upon prior to execution of the agreement dated 24.10.1988.
14. The learned Senior Counsel submitted that the learned trial Court has erred in relying upon the entries in the ledger book placed on record as Exhibit-A-6 and Exhibit-A-7. He contended that the cross-examination of Shri Shyam Sunder Bhardwaj (DW-4) left no room for doubt that the entries of the payments allegedly made, as shown in the ledger book, were fabricated later on.
15. Shri Agarwal argued that the learned trial Court seriously erred in recording the finding that being a stranger to the agreement dated 27.08.1981, it was not competent for the appellant to have assailed its validity. He submitted that since the deed dated 27.08.1981 impinged upon his rights, he had every right to challenge the same. He relied upon Section 31 of the Specific Relief Act, 1963 to buttress his submissions. He submitted that since he was not a party to the deed dated 27.08.1981, he could draw attention of the learned trial Court to the circumstances only showing that the aforesaid deed was a sham deed and did not represent true intention of the parties to enter into an agreement to sell with regard to the property in dispute and the respondent no. 2 was not a bonafide purchaser. He submitted that since the registered sale deed dated 17.07.1989 emanated from a forged and fabricated agreement to sell, it was rendered null and void. He, therefore, prayed that the impugned judgment and decree dated 16.03.1996 be set aside and his suit be decreed.
16. Per contra, Shri A.K. Bajpai, the learned counsel for the respondents supporting the findings recorded by the learned trial Court submitted that the agreement to sell dated 27.08.1981 was not hit by Section 29 of the Act, 1872 as it did not suffer from any uncertainity. To support his submission, learned counsel relied upon the judgment in Beni Madho and others Versus Major A.U. John and others, AIR (34) 1947 Allahabad 100 , wherein, it was held that the law does not require that consideration for a transfer should be immediately ascertainable at the time of the transfer. It is sufficient that it should be ascertainable at the time when the payment is to be made. He submitted that in any case, the recital in the deed dated 27.08.1981 constituted a valid promise by the respondent no. 1 and once it was accepted by the respondent no. 2, it crystalised into a valid agreement, which was acted upon by the parties culminating into registered sale deed.
17. Learned counsel contended that since the agreement between the respondents preceded the agreement dated 24.10.1988, by operation of law, the latter agreement to sell could not have been given effect to, as has rightly been done so by the learned trial Court. Shri Bajpai contended that the entire transaction between respondent no. 1 and respondent no. 2, a registered society, was based on documentary evidence and the learned trial Court has committed no error in deciding the Issues no. 3, 4 and 11 in their favour.
18. In the alternative, Shri Bajpai submitted that sale deed of the residential house has already been executed way back on 20.7.1989 and the shop still continues under ownership and possession of the respondent no. 1, the decree of specific performance in favour of the appellant, if any, may be confined to the shop only.
19. The learned senior counsel for the appellant, in rejoinder, did not seriously oppose the alternative prayer made by the learned counsel for the respondents.
20. Heard learned counsel for the parties and perused the record.
21. While deciding the Issue no. 2, the learned trial court has held the agreement dated 24.10.1988 to be validly executed by the respondent no. 1 in favour of the appellant and while deciding the Issue no. 9, it has also been held that the appellant was always ready and willing to perform his part under the contract and it was the respondent no. 1 who defaulted in performance of his obligation. In view of these categorical unchallenged findings, validity of the agreement to sell dated 27.8.1981 requires to be forensically examined as its valid execution would amount to defeating, otherwise established, rights of the appellant under the agreement dated 24.10.1988.
22. The first document relied upon by the respondents in support of the agreement to sale dated 27.8.1981 is minutes of the meeting dated 24.8.1981 (Ex. A-8). Shri Suraj Narayan (DW2) has deposed that as Shri Madho Prasad opened windows towards society's land, he was called in the meeting on 24.8.1981 wherein he agreed to execute an agreement which was done by him on 27.8.1981. A perusal of the minutes dated 24.8.1981 reveals that it does not contain even a whisper of averment reflecting any intention of the parties therein to enter into any sale agreement with regard to property in dispute; rather, the only decision taken was to close the windows as and when the respondent no. 2 so desired and it was required to be reduced into writing on a Rs. 5 stamp paper. Thus, the minutes of the meeting dated 24.8.1981 do not support the sale agreement dated 27.8.1981. The contents on page no. 1, i.e. the stamp paper, of the deed dated 27.8.1981 is perfectly in tune with the decision taken in the meeting dated 24.8.1981; but, the page no. 2 of the deed i.e. the plain paper, does not represent the decision taken in the meeting. The deed is not even notarised and therefore, a possibility cannot be ruled out that the page no. 2 of the deed dated 27.8.1981 was substituted later on. Even the respondent no. 1 himself as DW3 has stated that/This leaves no room for doubt that the parties never intended sale of the property vide agreement dated 27.8.1981.
23. Further, the respondent no. 1 has, as DW3, stated that the sale agreement dated 27.8.1981 was reduced in writing by the respondent no. 2 and was signed by him. He stated during his cross examination that draft of the sale agreement dated 27.8.1981 was prepared by the Deed Writer in the Court on the instructions of Shri Suraj Narayan Kalla whereas, Shri Suraj Narayan as DW2 stated that Madho Prasad had brought the typed agreement. He has further stated in his cross examination that no one from the society accompanied Shri Madho Lal when he got it typed and before the agreement was typed, Madho Prasad had shown its rough draft; but, Madho Prasad himself did not say so, nor any such rough draft has been placed on record. The aforesaid material contradictions in the statements of the respondents' witnesses render the execution of the agreement dated 27.8.1981 highly doubtful.
24. Now, if the subsequent acts and conduct of the respondents in furtherance of the sale agreement dated 27.8.1981, are considered, it is revealed that after about 7 years from the date of its execution i.e., on 24.9.1988, a cash consideration of Rs. 20,000 is stated to have been paid. In support of this payment, the respondents have relied upon the receipt dated 24.9.1988 (Ex. A2) and entry in the cash book (Ex. A6/1). Shri Madho Prasad (DW3), during his cross examination has stated that he had taken advance of Rs. 20,000 prior to 27.8.1981 and in the same breath, changing his stance, he stated that he received this amount in the year 1989 which too militates against the credibility of the receipt dated 24.9.1988. This Court also finds force in the submission of the learned counsel for the appellant that the respondent no. 2 being a registered society was not expected to make a huge cash payment of Rs. 20,000 in the year 1988 for purchase of the immovable property. This also dents the credibility of the receipt dated 24.9.1988. The receipt (Ex. A2) reflects neither the date of sale agreement nor, the total sale consideration. Another installment of the part sale consideration has been paid through cheque dated 13.5.1989. The present suit was filed on 6.1.1989 and the respondent no. 2 has filed an application under Order 1 Rule 10 CPC to implead itself as party-defendant on 13.3.1989. Shri Satya Narayan (DW1) has, during his cross examination, stated that the part sale consideration through cheque was paid in absence of knowledge as to pendency of suit and in the same breath, he has admitted that the society has filed the application for its impleadment on 13.3.1989 and he has made incorrect statement about absence of knowledge of pendency of the suit when the payment through cheque was made.
25. From the aforesaid analysis of the evidence, the only act allegedly done in furtherance of the agreement to sell dated 27.8.1981 before execution of the agreement to sell dated 24.10.1988; cash payment of Rs. 20,000 on 14.9.1988, i.e. immediately prior to execution of the agreement in favour of the appellant and after more than seven years from the date of execution of agreement dated 27.8.1981, does not inspire confidence about its genuineness and has apparently been fabricated later on to defeat rights of the appellant.
26. With regard to possession of the property in question, it has been case of the respondents that it exchanged hands on payment of Rs. 20,000 on 14.9.1988. In this regard, while Madho Prasad (DW3) has stated that after receipt of the possession, the respondent no. 2 closed the windows whereas, Shri Suraj Narayan (DW2) has, during his cross examination, stated that the windows are still lying open. Even otherwise also, since the respondents could not prove payment of Rs. 20,000/- on 14.9.1998, it cannot be accepted that the respondent no. 2 received possession of the property on 14.9.1988.
27. The upshot of the aforesaid analysis of the evidence led by the parties with regard to sale agreement dated 27.8.1981 is that its genuineness is highly doubtful and it appears to have been fabricated to defeat the legitimate rights of the appellant under the agreement to sell dated 24.10.1988.
28. Now the question arises as to whether the agreement dated 27.8.1981 represents intention of the parties to enter into a legally enforceable contract. The agreement contains the following recital:
29. If pith and substance of the whole document dated 27.8.1981 is taken into consideration especially the nature of dispute between the parties as reflected from the minutes of meeting dated 24.8.1981, contents of page no. 1 of the document and the statement of DW3, Madho Prasad, it is quite apparent that vide agreement dated 27.8.1981, the parties never intended sale of the property in question.
30. Section 10 of the Contract Act, 1872 lays down the essential elements for a valid contract. The first and foremost requirement of a valid contract is that it should reflect terms affecting the legal relations of the parties. It is trite law that a sale agreement can be unilateral in the sense it is not required to be signed by the vendee; but, it should contain mutual rights and obligations of the parties to it. The sale agreement dated 27.8.1981 does not reveal any obligation cast upon the purchaser under it. No right has been conferred upon the vendor to get it enforced against the vendee. It does not reflect the intention of the respondent no. 2 to enter into a legally binding contract and the parties are not at consensus ad idem. The Hon'ble Apex Court in the case of Alka Bose vs. Parmatma Devi & Ors., AIR 2009 SC 1527 held as under:
"7. We find that neither of the two decisions have addressed the issue and cannot be said to be laying down the correct law. The observation in Md. Mohar Ali (supra) stating that an agreement of sale is an unilateral contract is not correct. An unilateral contract refers to a gratuitous promise where only party makes a promise without a return promise. Unilateral contract is explained thus by John D. Calamari & Joseph M. Perillo in The Law of Contracts (4th Edition Para 2-10(a) at pages 64-65):
If A says to B, 'If you walk across the Brooklyn Bridge I will pay you $ 100,' A has made a promise but has not asked. B for a return promise. A has asked B to perform, not a commitment to perform. A has thus made an offer looking to a unilateral contract. B cannot accept this offer by promising to walk the bridge. B must accept, if at all, by performing the act. Because no return promise is requested, at no point is B bound to perform. If B does perform, a contract involving two parties is created, but the contract is classified as unilateral because only one party is ever under an obligation.
All agreements of sale are bilateral contracts as promises are made by both-the vendor agreeing to sell and the purchaser agreeing to purchase. On the other hand, the observation in S.M. Gopal Chetty (supra) that unless agreement is signed both by the vendor and purchaser, it is not a valid contract is also not sound."
31. Therefore, the sale agreement dated 27.8.1981 cannot be held to be a legally enforceable contract under the provisions of the Act of 1872.
32. It is also revealed from the sale agreement dated 27.8.1981 that it suffers from the vice of uncertainty. A concluded contract results only when all material terms are agreed to or are capable of being ascertained without any further agreement between the parties. As already observed, from the recitals in the document, neither any intention of the purchaser to enter into a legally enforceable contract nor, the terms so certain so as to give rise to a presumption of existence of any valid agreement, are reflected. At the best, it can be reckoned as an agreement to enter into an agreement to sell in future. In these circumstances also, the agreement dated 27.8.1981 cannot be held to be a valid agreement to sell.
33. Insofar the contention of the learned counsel for the respondents that the terms of the agreement dated 27.8.1981 constitute a valid promise on the part of the respondent no. 1 and once it was accepted by the respondent no. 2, it resulted into a binding contract between the parties, is concerned, the settled law is that to constitute a valid promise, the declaration/assurances made to the promisee must show existence of certain state of affairs which the maker will do/refrain from doing and conferring on the promisee a right to claim fulfillment of such declaration/assurance. Mere statement of willingness to enter into negotiations, does not amount to proposal. It must be so certain so that the rights/duties and obligations of the offerer can be exactly fixed. There is complete lack of this basic element in the promise extended by the respondent no. 1 under the deed and hence it cannot be construed as the valid binding promise.
34. Similarly, this Court does not find any merit in the submission made by learned counsel for the respondents that a valid and legally enforceable contract came into existence as the respondent no. 2 accepted the promise made by the respondent no. 1. While adjudicating the genuineness of the agreement to sell dated 27.8.1981, it has already been held that payment of part sale consideration on 14.9.1988 could not be established and was created artificially to frustrate the rights of the appellant under the agreement dated 24.10.1988. Even otherwise also, for a valid acceptance, it has to be genuine, certain and unambiguous. In order to give rise to a binding agreement, its terms should be so defined so as to leave no room for doubt as to the acceptance of the terms of the agreement. As is reflected from the recitals in the sale agreement dated 27.8.1981, the sale consideration payable was to be the prevalent market rate at the time of execution of the sale deed. The material on record does not reflect that the parties were ever ad idem regarding the exact sale consideration. As per respondents' oral evidence, it was approximately Rs. 2 lacs. It is the sale de
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ed only, executed on 17.7.1989, which shows that the sale consideration agreed was Rs. 2 lacs. In view of the fact that the suit was already instituted on 6.1.1989 and the respondent no. 2 has filed the application seeking its impleadment on 13.3.1989, the sale consideration, reflected for the first time in the sale deed dated 17.7.1989 does not inspire confidence as to the same being agreed between the parties before the acceptance was made by the respondent no. 2 by tendering the cash consideration of Rs. 20,000 on 14.9.1988 even assuming it to be so. 35. Consequently, the findings of the learned trial court vide Issues no. 3, 4 and 11 are set aside. It is held that the agreement to sell dated 27.8.1981 was neither genuine nor constituted a legally enforceable contract. 36. So far as the relief of specific performance of the property in dispute is concerned, it is trite that it is a discretionary relief and even if the plaintiff is held entitled for the decree of specific performance in terms of the agreement between the parties, the Court can, for justifiable reasons, refuse to grant the same. In the present case, sale deed of the residential accommodation was executed way back on 17.7.1989 by the respondent no. 1 in favour of respondent no. 2, a registered society. The appellant has, under the agreement dated 24.10.1988, paid a sale consideration of Rs. 13,000 only out of total sale consideration of Rs. 2,13,000. The alternative prayer made by the learned counsel for the respondents to grant the decree of specific performance qua the shop on ground floor, was not seriously opposed by learned counsel for the appellant. In the aforesaid circumstances, this Court deems it just and proper to partly decree the suit and direct the respondent no. 1 to execute the sale deed of the shop; part of property no. 2820/21, Kalyan Ji Ka Rasta Mohalla Nayariyan, Jaipur, situated on ground floor for a sale consideration of Rs. 1,00,000. The part sale consideration of Rs. 13,000 already paid by the appellant shall stand adjusted in the aforesaid sale consideration. The balance sale consideration shall be deposited by the appellant with the learned trial court within eight weeks from today and the respondent no. 1 shall execute the sale deed and handover vacant possession of the shop within eight weeks thereafter receiving the amount of sale consideration so deposited by the appellant. The respondent no. 2 is also directed to join the respondent no. 1 in execution of sale deed. If the respondent no. 1 fails to execute the sale deed within the aforesaid period, the appellant would be entitled to get the sale deed executed through the Court. 37. Resultantly, the civil first appeal is allowed, the judgment and decree of the learned trial court dated 16.03.1996 are set aside. The suit is partly decreed in the aforesaid terms.