BRIJ MOHAN AND ORS. v. SMT. SUGRA BEGUM AND ORS

Citation: [1990] 3 S.C.R. 413

Court: Supreme Court of India

Bench: L.M. SHARMA, N.M. KASLIWAL

Case summary

- parties in the third week of April, 1979 were not in dispute and which '- were to the effect that when the first defendant was insisting on payment of Rs....

Judgment text

The Judgment of the Court was delivered by KASLIWAL, J. The Plaintiffs by Special Leave have filed these appeals against the Judgment of Andhra Pradesh High Court, Hyderabad, dated 24th September, 1987. The four plaintiffs who are brothers filed the present suit on 17th July, 1979 for specific performance of oral contract for sale of a building known as "Roshan Manzi! " located in an area of 4165 sq. yards in _ ~__, Saifabad, Hyderabad. M/s. Gopi Hotel was the tenant in the premises. According to the case as set up in the plaint the first plaintiff Brij Mohan learnt some time in the first week of April, 1979 that the defendant No. 1 Smt. Mahboobunnisa Begum (since deceased) was contemplating the sale of the property in question and that Shri Arif Ali, her Advocate and income tax practitioner was assisting her in finding a purchaser. Shri Arif Ali had mentioned the above intention - of the first defendant to Sh. Ibrahim Moosa of M/s. J.

Moosa & } Company who was known to the first plaint. iff. On learning from Shri Ibrahim Moosa the first and second plaintiffs, namely, Brij Mohan and hgmohan along with Sh. Ibrahim met Sh. Arif Ali. Sh. ArifAli gave the details of the property and also showed the plans of the property to them. Sh. Arif Ali stated that the defendant was expecting the price of Rs. 10. 00,000. The plaintiffs Nos. 1 and 2 offered Rs. 7,00,000. Shri a· Arif stated that he will ascertain from the defendant her reaction to ihe said offer. A fortnight later i. e. in the third week of April, 1979 the - -'"' _ plaintiffs Nos. 1 and 2 along with Sh. Ibrahim Moosa and Sh. Arif Ali went to the residence of the defendant, who was insisting on the payment of Rs. 10,00,000 as the sale price. At the said meeting the husband of the defendant was also present. The plaintiffs Nos. 1and2 increased their price from Rs. 7,00,000 to Rs. 8,00,000.

The first defendant said that she would think over and inform the plaintiffs Nos. I 1 and 2 throught Sh. Arif Ali. On 3rd May, 1979 the plaintiffs Nos. I and 2 along with Shri Ibrahim Moosa met Sh. Arif Ali. Arif Ali stated that the defendant was agreeable to sell the property to plaintiffs only for Rs. 10,00,000 and not a pie less. Thereupon the plaintiffs agreed to pay Rs. 10,00,000 as the sale price. Shri Arif Ali after getting the \. ,___ confirmation of acceptence of the said offer of the plaintiffs Nos. 1 and 2 from the first defendant said that the plaintiffs Nos. 1 and 2 should • y meet the defendants on 6th May, 1979 and that she would in the meanwhile purchase the stamp papers for making the formal agreement for sale incorporating the oral agreement arrived at. It was further alleged in the plaint that on 6th May, 1979 the first and second plaintiffs along with Shri Ibrahim Moosa met the first defendant and her husband in the presence of the said Sh. Arif Ali.

In -- -Sheikh Ismail another stamp vendor for having sold a stamp Exhibit A-4 to one Abdul Khalik on behalf of Smt. Mehboobnissa Begum vide entry E1[. X-27 in the register of stamps. The plaintiffs by the aforesaid evidence wanted to establish that one stamp was purchased by Smt. Mehboobnissa Begum herself and another through Mohd. Khalik for executing the agreement for sale in favour of plaintiffs. The High Court in this regard observed that it was not necessary to discuss the evidence of P. W. 4 as to whether the first defendant personally went to him and ~ - purchased the stamp paper. The first defendant who is a lady from aristocratic family would not have gone all the way to Chotta Bazar to purchase a non-judicial stamp worth Rs. 5. P. W. 4 deposed that he cannot identify whether the person who came for purchase of the -Jr. stamp paper was Smt. Mehboobnissa Begum or not. It may be that some person by name Smt. Mehboobnissa purchased the stamp papers. P. W.

5 simply stated that he sold exhibit A-4 to one Adbul ' Khalik on behalf of Smt. Mehboobnissa Begum. D. W. 2, Arif Ali . } however said that neither any transaction nor talks took place between the plaintiffs 1 and 2 and himself on 3rd May, 1979. The High Court did not agree with the submission of the Learned counsel for the plaintiffs made before them that the purchased of the stamps Exhibit A-3 and A-4 was a strong cricumstanoe in favour of a concluded contract. The High Court in this regard observed that first of all it was not firmly established that the purchase of the stamps was for the purpose of this transaction only. In view of the evidence of D. W. 2 much - _.. 1_ weight cannot be given to the evidence of P. Ws. 4 and 5. The High Court further observed that even assuming that these two stamps were purchased pursuant to the talks that took place between D. W. 2 and P. Ws. 1 and 3 it would not improve the case of the plaintiffs.

The stamps were blank and nothing was engrossed on them. This circumstances, at the most would show that meeting on 6th May, 1979 was -f fixed between the plaintiffs 1 and 2 and the first defendant for further negotiations. The High Court then observed that as regards the meeting which took place on 6th May, 1979 and the fact that the negotiations fell through was admitted by both the parties. Therefore, the crucial question for determination was whether all the terms of the ~ oral contract were entered into between the parties on 3rd May, 1979 .. or any terms were left open to be discussed and determined in the y meeting to be held on 6th May, 1979. The High Court then considered the argument of the plaintiffs according to whom Exhibit A-1 draft receipt was y;ritten by D. W. 2 Sh. Arif Ali on 6th May, 1979 stating that the suit premises was agreed to be sold for Rs.

10,00,000 and the permission for Vrban Land Ceiling Authority will be obtained by the first defendant and the registration --', will be completed within six months from that date. The plaintiff's further case was that the first defendant's husband who was present suggested some alterations basing on which Exhibit A-2 fair draft was prepared and that when the plaintiffs took the agreed advance amount of Rs. 50,000 in the evening, the first defendant refused to accept the advance amount and resiled from the contract. As against the above contentions of the plaintiffs, D. W. 2 Sh. Arif Ali who is the representative of the first defendant deposed that in the meeting between the parties which took place in April, 1979 the vendor did not take the responsibility of obtaining . clearance under the Urban Land Ceiling Act. He denied the suggestion that in the third week of April, 1979 the first defendant offered to sell the suit property for Rs.

10,00,000 and that she would obtain the clearance under the Urban Land Ceiling Act. On the other hand he deposed that when the plaintiffs offered Rs. 8,00,000 the first defendant told them that she would consider and communicate her view through D. W. 2 some time later. The High l -· Court in this regard clearly observed that the contention of the plaintiffs that even in the third week of April, 1979 before the parties could agree upon the sale price for the suit building, there was discussion about the obtaining of clearance under the Urban Land Ceiling Act and that the first defendant undertook to obtain that clearance certificate cannot be believed. The High Court further observed as under: "As seen from their own evidence, by the 3rd week of April, 1979 plaintiffs 1 and 2 increased their offer from Rs. 7. 00,000 to Rs. 8,00,000. At the time of the earlier BRU MOHAN v. SUGRA BEGUM IKASLIWAL, J. j 425 negouations when the plaintiffs offered Rs.

7,00,0UO (seven lakhs) and the 1st defendant was not willing to accept that offer, there was no stipulation as to who should obtain the clearance under the Urban Land Ceiling Act. If so, it is unbelievable that in the 3rd week of April, 1979 when still there was a wide gap ofRs. 2,00,000in the price payable for the suit building, the parties would have stipulated about the condition as to who should obtain the permission under the Urban Land Ceiling Act. Therefore, the evidence of P. Ws. 1 and 3 can be believed to the extent that they approached Arif Ali on 3. 5. 1979 and Arif Ali in his tum communicated their willingness to pay the price of Rs. 10,00,000 for the suit premises and the 1st defendant accepted that offer. " ;:.... The High Court on the basis of the above finding then held that in order to determine the binding nature of the contract between the parties, the mere acceptance of sale price is not sufficient.

It was not the case of the plaintiffs that the other terms of the contract were also discussed by D. W. 2 over the phone and their acceptance was communicated to them by the 1st defendant through D. W. 2. It was obviously tor that reason that a further meeting was nxed at The'house of the 1st defendant in the morning of 6th May, 1979 which had admit- • ,.... . >-_ tedly taken place. The High Court further held that it must be remembered that this agreement is in respect of a valuable property and the main intention was to reduce the terms of agreement into writing and when the parties are very much relying on the alleged oral agreement dated 3rd May, 1979, there would definitely have been a reference in Exhibits A-1 and A-2 to the oral agreement said to have taken place on 3rd May, 1979. The absence of the same in Exhibits A-1 and A-2 against throws a serious doubt about the alleged agreement, dated 3rd May, 1979.

In any event the mere fact that there was a meeting between the plaintiffs Nos. 1 and 2 and D. W. 2 on 3rd May, 1979 does not establish that there was a concluded contract between the parties on that day because admittedly the first defendant was not present at that time. What all had happened according to P. Ws. 1and3 is that they offered to pay Rs. 10,00,000 for the suit building and D. W. 2 having contacted the 1st defendant over the phone conveyed to them her acceptance of the price fixed. In the absence of evidence that the other terms also were discussea over the phone and settled at that time and the 1st defendant agreed. for the terms, it cannot be said that there is a con- eluded contract on 3rd May, 1979. The fixation of price is only one of the terms of the contract and by mere acceptance of the price it cannot -I be said that there is a concluded contract between the parties in the absence of proof of fixation of other conditions mentioned in Exhibits A-1 and A-2, viz.

, undertaking by the 1st defendant to obtain permission from Urban Land Ceiling Authority and the amount of advance to be paid. It is not the case of the plaintiffs 1and2 that prior to 6. 5. 79 \.... there was an agreement between the parties as to the amount of advance to be paid. The High Court thus held that in the absence of any consensus being arrived at between the two contracting parties Y about these important aspects of the agreement it cannot be said that there is a concluded oral contract between the parties on 3. 5. 79. It is important to note that even exhibit B-4 an agreement of sale dated 22. 6. 79 executed between the 1st defendant and defendants Nos. 3 and 4 does not impose the condition that the 1st defendant, the -"'. vendor, should obtain the clearance from the Urban Land Ceiling Authority within the stipulated period of six months.

The High Court in this regard observed that this evidence showed that the contention of the 1st defendant that the agreement fell through by reason of the plaintiffs insisting on her obtaining the permission from the Urban Land Ceiling Authority and the expression of her inability to comply with that demand appeared to be correct. The High Court clearly held that there was no clinching evidence to show that this stipulation was thought of by the parties on any day prior to 6. 5. 79. The High Court, "- under: "It is, the. efore, not possible to accept the contention of the appellant that the oral agreement was ineffective in law because there is no execution of any formal written document. As regards the other point, it is true that there is no specific agreement with regard to the mode of payment but this does not necessarily make the agreement ineffective.

The mere omission to settle the mode of payment does not affect the completeness of the contract because the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fued. " Thus even in the above case the time for completion of the sale was considered as one of the vital terms of the contract. Further in the above case part of the agreement had been performed i. e. partners having 98 shares had already executed sale deeds and this Court had believed the oral agreement for sale of 137 shares. Thus the above case is totally distinguishable and renders no assistance to the appellants in the case before us. Thus we find no force in these appeals and the same are dismissed. In the facts and circumstances of the case we make no order as to 'y costs. R. S. S. Appeals dismissed.