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Gangabai Vs. Sonabai - Court Judgment

LegalCrystal Citation
Decided On
Case NumberO.C.J. Suit No. 397 of 1914
Reported inAIR1915Bom109; (1915)17BOMLR303
.....bear in mind what the knowledge of the principal parties was at this stage if i am so far right. gangabai and chhotalal knew perfectly well what the actual submission about to be made to mathuradas was. 1000 a square yard, her letter of authorisation would have taken precisely the form which, in fact, it has done. they were asked by girdharlal whether they would like to have the figure first settled by mathuradas duly filled in or whether they would prefer to sign the agreement and then leave the figure to be filled in. as i have said, gangabai, the plaintiff, knew quite well that mathuradas would fix some figure between rs. 43,000. sonabai must have known perfectly well that gangabai, at the worst, contemplated paying no more than rs. sonabai because she fully expected that sign ex. e. in blank : gangabai because she was really indifferent and ready to accept whatever figure mathuradas might fill in; sonabai because she fully expected that mathuradas would fill in a figure which she new very well gangabai would never accept. that i take to be the explanation of what is otherwise inexplicable, that is to say, the manner in which this transaction was put through at girdharlal's house. bearing in mind the almost immediate resentment expressed by sonabai, if she had really known that mr. mathuradas did not believe himself authorised to fix a higher figure than rs. 35,000, it is difficult to understand why she was so indignant (as she swears she was) and why in so short a time she took steps to repudiate the transaction. now, this does not put sonabai's.....

Beaman, J.

1. The plaintiff in this suit seeks specific performance of an agreement to sell a certain property in Sheikh Memon Street, alleged to have been entered into on the 18th of January 1914, between the said plaintiff and the defendant, Sonabai, administratrix of the estate of her deceased father. The plaintiff also asks for the rectification of the agreement, if necessary, by the insertion of words not therein to be found at present, making it clear that the contract was entered into by Sonabai as administratrix. Before the case was opened, the learned counsel for the plaintiff asked leave to raise an additional issue which implies, as I understand it, the abandonment of this supplementary prayer for rectification. No evidence has been led in the course of this trial to prove any mutual mistake in the actual wording of the agreement, Ex. E; but in its final form the plaintiff's case amounts to this, that inasmuch as Sonabai was the administratrix and purported to convey the whole of the properly in suit without any qualification or words of limitation, she must be presumed in law to have agreed to convey the highest estate she was capable of conveying, and that too without the need of any designatory words such as administratrix. I have been referred to certain cases upon this subject, and notably the case of Bijraj Nopani v. Pura Sundary Dassee : (1914)16BOMLR796 and the very informing case of In re Venn & Furze's Contract [1894] 2 Ch. 101. Ever since the trial commenced I have bestowed my best attention upon this interesting point, and although it was only in counsel's concluding arguments that the case of In re Venn & Furze's Contract was brought to my notice, I had independently arrived at the principle to which, I think, Stirling J.'s judgment in that case gives very clear expression. It appears to me, as a general principle that where a person has two estates, one larger and the other smaller, and purports to convey the entire property without any words of limitation, he must always be taken to be conveying the highest estate he has; that is to say, if an executor having a one-third personal beneficial interest in the estate purports to convey the whole of it without qualification or limitation, he must be taken to be conveying, in his character as executor and not in that of one having a beneficial interest only in a fraction of the whole estate purported to be conveyed. Upon this general principle, which I believe to be universally valid and applicable, exceptions may be grafted with reference to the particular facts of particular cases. Thus, where, upon the facts found, the Court is satisfied that both the parties must have been aware that the intention of the vendor was to restrict what was being sold to his personal lesser interest and where the Court also finds that that was the intention of the vendor, then, no doubt, the conveyance would only be effectual to that extent. But that is really no exception at all to the general rule I have stated. It appears to me to make not the slightest difference whether in such circumstances, the vendor is expressly designated as executor or administrator if, in fact, and to the knowledge of the purchaser, he be an executor or administrator and purports to convey without limitation the whole estate. Nor do I think any distinction can be maintained in principle between actual conveyances and agreements to convey for the purposes of applying this general rule. If I am right so far, it is obvious that there is no case for rectification here because there is no need for it. If the agreement of the 18th of January 1914 was really the agreement of the administratrix, then, in my opinion, it would be as much an act of Sonabai in that capacity whether or not she be described on the paper as administratrix. So far upon the question of pure law.

2. Next arises the question whether the facts proved in this case would bring it within the class of exceptions I have indicated, that is to say, whether there is anything in the form of the document or the relations of the parties or their conduct in this agreement, which would warrant the Court in holding that it was the intention of Sonabai to agree to convey no more than any beneficial interest she herself might have in the property agreed to be conveyed, and that that intention was known to and accepted by the plaintiff, Gangabai. Except for the constant association of Cooverbai, the defendant Sonabai's sister, with Sonabai in all the stages of this transaction, I fail to discover any such facts. The agreement itself purports to be drawn as between Sonabai alone of the one part, and the plaintiff Gangabai of the other; and Sonabai, who was admittedly well-known to Gangabai to be the administratrix of her late father's estate, agrees to sell not her own interest, whatever that might be in the suit property, but the entire property. Bearing in mind that Cooverbai was herself present when the agreement was entered into and signed by the plaintiff and the defendant, and that no attempt was made on either side to obtain her signature or have the agreement drawn in the joint names of herself and Sonabai, it appears to me beyond reason to contend that in this matter Sonabai was not putting herself forward as competent to deal with the property, not as one having merely a limited interest therein but with all the powers of an administratrix. I think too that Cooverbai must have been present with the object of confirming the act of Sonabai as administratrix, while keeping an eye, perhaps, on her own interest. But I can hardly believe that if it had really been the intention of Sonabai merely to sell her own right, title and interest in the property, or to sell that along with the right, title and interest of Cooverbai, the attorney, under whose control the whole proceeding was conducted, would have allowed the agreement to be executed in its present form. Still less do I think that if that had been the intention and the plaintiff had been aware of it she would have consented to the agreement binding her to pay so high a price as Rs. 33,750 for an unascertained share of a property which, at the highest, would hardly be worth more than Rs. 43,000.

3. It remains, then, to be considered whether, approaching the case in this light, the agreement of the 18th of January 1914 is one which ought to be specifically enforced. The defendant's contention is that she was duped into signing the agreement by the treachery probably of Mathuradas, and that had she been aware of the figure he intended to fix, she would never have consented to sell the property. In effect, this amounts to such a plea as might very properly be entertained under Section 22 of the Specific Relief Act, and it then would be merely a question of fact whether or not the defendant has satisfied the Court that she had not entered into the agreement with the full knowledge of the facts or under a mistaken impression, or had in any other way through misrepresentation been induced to part with the property on terms which, with fuller knowledge, she would not have accepted. In such cases it is not necessary that the facts should go the length of establishing actual fraud. What the Court is to look to is, whether in the exercise of its discretion the agreement is on? which ought to be specifically enforced particularly having regard to this, whether enforcing it would not inflict more injury upon the defendant than confer benefit on the plaintiff. In every suit for specific performance, Courts of Equity have a free discretion limited only by those general principles which require all Courts of Justice to act in accordance with sound judicial principles and not upon mere caprice and sentiment.

4. Now, this case has occupied some time and a considerable amount of evidence has been led before the Court on both sides with the object, first, of proving that the transaction throughout was perfectly straightforward and that no imposition of any sort was practised upon the defendant; next, of proving that she acted upon a supposed assurance given by Mathuradas that he would never value this particular property at less than Rs. 1,000 per square yard. It is indubitably certain, I think, that the defendant, a Parsi woman, had not received any professional advice at all in the matter, probably because she did not ask for any. But after having listened to the evidence while it was being given, with the closest attention, after having heard it criticized by learned counsel on both sides, and having again reconsidered it from first to last, I feel very little doubt in my own mind as to the real truth of the matter. In the first place, I do not throw any doubt upon the evidence of Mathuradas. He is a gentleman of wealth and position, and I am sure that his evidence here was substantially true in every particular. This indeed has not been seriously questioned by learned counsel for the defendant. The defendant's case is in effect that Chhotalal, the broker, was at the bottom of the whole arrangement, and that it was through his misrepresentations to the defendant Sonabai on the one hand, and Mathuradas on the other, that the defendant was duped into making this very unfavourable agreement. The undoubted facts which I collect from the evidence, in my opinion, are that the broker was negotiating the sale of this property on behalf of the defendant, Sonabai. The first bidder appears to have been Haribhai, formerly a servant in the shop of the plaintiff Gangabai and afterwards a rival trader in the same line. Haribhai is a witness of very poor class, upon whose word I can place but little reliance. It is very clear, however, from his evidence taken along with that of others, that he was very anxious to establish himself in the place of his former mistress Gangabai, and if he did not actually offer to buy the premises now in suit, he did admittedly take them upon a much enhanced rent actuated, no doubt, as I have said, by his desire to establish himself in place of Gangabai. It is the allegation of Chhotalal that Haribhai further offered to buy the premises for a sum varying between Rs. 28,000 and Rs. 30,000. There, upon, Maganlal, the maternal uncle of the plaintiff, who is a very young woman, appears to have been apprised by Chhotalal of what was going on and in the interest of his niece offered to raise any bid that Haridas might make by Rs. 2000 or Rs. 3000. Thereon, there appear to have followed negotiations conducted by the broker Chhotalal between Sonabai and the plaintiff Gangabai; and I believe the truth to be here, as stated by the plaintiff's witnesses, that while Gangabai would offer no more than Rs. 30,000, Sonabai refused to sell for anything less than Rs. 35,000. In estimating the probabilities of what followed, it is necessary to remember that Sonabai had mortgaged this property to one Canji Sunderji for a sum of Rs. 18,500 in all; and it appears that Mathuradas, who is a member of the well-known firm of Vassanji & Co., was acting after the death of Canji Sunderji on behalf of his estate. Sonabai admits that Canji Sunderji had always treated her with the utmost kindness and consideration and stood to her, as she put it, almost in the relation of her father. Further, she had much confidence in Mathuradas, and after Canji Sunderji died, she says she used to turn to him for advice in all her business dealings. Those being the close relations existing between Sonabai and Mathuradas, it is, in my opinion, extremely probable that Sonabai should have mentioned, as she swears she did, to Mathuradas in one of her conversations about her affairs that she believed that the property in suit was worth Rs. 1,000 per square yard, and that Mathuradas may have said in general terms I 'Well, if you can get that for it, by all means sell it.' I do not believe that it is true, as now alleged by the defendant, that Mathuradas, acting in the interests of Gangabai, brought pressure to bear upon Sonabai to sell this property by threatening her with the foreclosure of Canji Sunderji's mortgage. But I do believe that it is quite possible that Sonabai, as a result of some such conversation, as I have just related, got it into her head that Mathuradas had accepted her valuation and confirmed her belief that her property was worth the very high figure of Rs. 1,000 per square yard. With that idea in her mind, gradually converted possibly into an enlarged belief, that Mathuradas had actually assured her that he would find a purchaser, if necessary, for her at that figure or a higher one, it was extremely natural that, on this difference arising between Sonabai and Gangabai as to the value of the property, Sonabai should have been only too willing to leave the price to be fixed by Mathuradas. Gangabai had equal reasons to repose confidence in this gentleman so that she would have been, as indeed she proved to be, quite ready to accept his valuation. At the same time after the dispute had actually arisen between Sonabai and Gangabai, the evidence does not satisfy me that Sonabai had any further personal communications with Mathuradas on this subject. I come now to that part of the case which relates to the written submissions to Mathuradas. That these were procured by Chhotalal, there can be no doubt whatever. The plaintiff's version, as supported by her principal witnesses, is that the only point in difference between her and Sonabai was, whether the price to be paid for the property should be Rs. 30,000 or Rs. 35,000. Chhotalal, thereupon, said to Sonabai : 'If you go on haggling like this, the bargain will never be completed, so the best thing you can do is to leave the figure to be settled by some one in whom you have confidence.' To this Sonabai gladly agreed, doubtless having in her mind the belief I have mentioned that if she could obtain the arbitration of Mathuradas, he would fix the price at at least Rs. 43,000. But the plaintiff's story is that nothing of that kind was really left to the arbitration of Mathuradas. All that he was asked to decide was some figure between Rs. 30,000 and Rs. 35,000, which might seem to him to be fair; and this undoubtedly was what was conveyed to Mathuradas orally by Chhotalal. But it may well be doubted whether anything of the kind was conveyed by Chhotalal to the defendant Sonabai. At this point it is well to bear in mind what the knowledge of the principal parties was at this stage if I am so far right. Gangabai and Chhotalal knew perfectly well what the actual submission about to be made to Mathuradas was. Sonabai did not. Mathuradas himself was duly informed that he would be requested to fix some figure between Rs. 30,000 and Rs. 35,000. He says that he understood that to be the limit of his authority, and that too without any respect to the actual value of the property. He says that, so far as he understood the submission to himself, he would have fixed the figure between Rs. 30,000 and Rs. 35,000 whether the property had been worth a lakh or whether it had been worth Rs. 10,000. At this point, then, Mathuradas, after having been informed by Chhotalal of what the plaintiff and the defendant desired of him, refused to act without a written authorisation from both of them. Accordingly, Chhotalal drafted the terms of submission for Sonabai, which, with unimportant alterations, she copied at the dictation of her sister, Cooverbai, and posted on the 12th of January to Mathuradas. Apparently, that letter was not delivered as quickly as was expected, and Chhotalal, who was exceedingly anxious to get this authorisation from Sonabai, came to her and informed her that Mathuradas had not received her letter. She, accordingly, re-wrote it on the 14th and took it to the office of Messrs. Vasanji & Co., where she handed it to Chhotalal, who, in turn, gave it to Mathuradas. The other letter, posted on the 12th, likewise came to his hand with little delay. On the 15th, a similar letter of authority was obtained from Gangabai. Now, it is to be noted that Sonabai's letters, which, for the purposes of this discussion, are alone important, are couched in general terms and contain no reference at all to restricting Mathuradas to some figure between Rs. 30,000 and Rs. 35,000. It is quite clear that, if I am right in believing that Sonabai hoped that Mathuradas would fix the figure not lower than at the rate of Rs. 1000 a square yard, her letter of authorisation would have taken precisely the form which, in fact, it has done. On the other hand, if Chhotalal had verbally informed Mathuradas that his arbitration was only invited subject to this restriction, it is equally clear that he would not have inserted it in the draft he gave to Sonabai, if Sonabai was really, as she alleges, being kept in the dark upon this most material point. Now, observe what follows. Prior to the meeting of the 18th of January 1914, Chhotalal had been very busy apparently drafting the agreement to sell this property. He had taken this agreement to the firm of Bhaishankar, Kanga, Girdharlal & Co., some four days before it was actually executed, and submitted it to Girdharlal for his correction and approval. Girdharlal says that in this matter he was acting, if for anybody, for Chhotalal. At least he is driven to say that he made these corrections for Chhotalal's sake. However that may be, I think very little turns upon the actual form of the agreement. There is nothing the least objectionable in it, and the defendant herself admits, as does her sister Cooverbai, that had the price come up to their expectations, they would have cheerfully accepted it and would have put the sale through. I merely mention these preparations by Chhotalal as showing his personal interest and activity in the conduct of the whole proceedings. The draft thus corrected, or rather fair copies of it were given to Maganlal, and Maganlal in turn gave one of them to his attorney Chandulal. Chandulal struck out one clause; but I think it is proved that out of deference to the wishes of Sonabai that clause was allowed to stand in the final agreement, Ex. E. The only point then is that, if this be true, it contradicts part at least of Sonabai's evidence in which she stoutly denies that she knew anything at all of any draft agreement before she was called upon to sign the agreement, Ex. E, at the house of Girdharlal on the 18th of January. Having got all these agreements, however, in due order, it appears that by the 15th of January, as I have said, Mathuradas had obtained written authorisations from the plaintiff and defendant to fix a price as we now know between Rs. 30,000 and Rs. 35,000. There only remained to appoint the time and place for the parties to meet and complete the transaction. This was accordingly done by Chhotalal and 2 p.m. of the 18th was finally settled and the place was to be Girdharlal's private residence. I attach very little importance to the small matter of the alteration of the time of the meeting, of which Sonabai was informed on the 17th. On the 18th, Sonabai and her sister Cooverbai went first to Chhotalal's house and with him to the appointed rendezvous, where the plaintiff and her uncle Maganlal were also present with Mathuradas, the whole proceedings being conducted by Girdharlal, the attorney. Now, we come to a very singular circumstance, which, in my opinion, leaves little doubt as to the true state of Sonabai's mind and intention in this matter. For it is common ground that the plaintiff and the defendant signed the agreement, Ex. E, in blank. They were asked by Girdharlal whether they would like to have the figure first settled by Mathuradas duly filled in or whether they would prefer to sign the agreement and then leave the figure to be filled in. I have no doubt whatever that this is exactly what did occur and neither have I any doubt as to the reason why. As I have said, Gangabai, the plaintiff, knew quite well that Mathuradas would fix some figure between Rs. 30,000 and Rs. 35,000 and she was quite willing to accept whatever figure he thus gave. But Sonabai cherishing a belief that Mathuradas would never allow the property to be sold for less than Rs. 1,000 per square yard, thought she would steal a march on Gangabai and [ spring a surprise upon her in the announcement by Mathuradas of some figure not less than Rs. 43,000. Sonabai must have known perfectly well that Gangabai, at the worst, contemplated paying no more than Rs. 35,000. Remembering, however, the terms of her letter of authorisation to Mathuradas and totally ignorant of what had been communicated to him by Chhotalal she was in the reasonable expectation of securing a very much higher price than any in the contemplation hitherto of the intending purchaser, Gangabai. This appears to me to account for the readiness with which both the parties agreed to sign Ex. E. in blank : Gangabai because she was really indifferent and ready to accept whatever figure Mathuradas might fill in; Sonabai because she fully expected that Mathuradas would fill in a figure which she new very well Gangabai would never accept. That I take to be the explanation of what is otherwise inexplicable, that is to say, the manner in which this transaction was put through at Girdharlal's house. Bearing in mind the almost immediate resentment expressed by Sonabai, if she had really known that Mr. Mathuradas did not believe himself authorised to fix a higher figure than Rs. 35,000, it is difficult to understand why she was so indignant (as she swears she was) and why in so short a time she took steps to repudiate the transaction. Now, this does not put Sonabai's conduct in a very favourable light or entitle her to much consideration at the hands of a Court of Equity. Still there is nothing on her part actually dishonest, though I feel very little doubt that, in securing Mathuradas as final arbiter, she believed that she stole a march on Gangabai. After all, her submission contained no reference whatever to any figure, and as, according to the evidence, it does not appear that she had ever seen Mathuradas since the negotiations began, there is no reason why she should have believed herself obliged to tie him down in the manner suggested by Chhotalal. That I believe to be the true explanation of what passed at Girdharlal's house and faithfully to reflect the intention and the state of mind of Sonabai. It is true that the evidence shows that when the figure was announced (whether orally by Mathuradas, or after it had been written by him on a piece of paper and handed over to Girdharlal, by Girdharlal, matters nothing), Sonabai did not protest. Neither did Cooverbai. According to these women, they were so staggered at the lowness of the figure and at what Sonabai conceived to be Mathuradas' treachery to her, that they stared aghast. Chhotalal asked them to go downstairs and said he would explain everything to them. That ends the story of the actual making of agreement. And after a full consideration of all that is contained in it, I entertain very little doubt that Sonabai was taken by surprise and had she known of the true nature of the submission, which alone Mathuradas believed himself to have received from these two women, she would not have consented to his arbitration on those terms, much less would she have signed the agreement in blank, before the price had been announced. As I have said, in this matter she received no independent advice from her attorneys or as far as I can see, from anybody. She probably thought that she was conducting her own business very cleverly; and in so endeavouring to outwit the plaintiff Gangabai, she might have hesitated about the advisability of taking any attorney or any other adviser into her confidence. It, however, does not alter the fact that she probably was under a very serious mistake and delusion. That may have been entirely her own fault, but in the circumstances disclosed in her evidence (and so much of it I believe), it was not unnatural and it was not really in any sense dishonest. Looking to the other side ofthe question, I find nothing whatever blameworthy on the part of the plaintiff. She also is a young woman, who has not appeared in person in this case and presumably knows nothing at first-hand of what went on. Chhotalal, the broker, is the only man who had the first-hand communication with the three principal persons concerned, Sonabai, Gangabai and Mathuradas; and Chhotalal was a witness who certainly did not impress me very favourably. He has a very lively and substantial interest in getting this transaction completed. If, therefore, the plaintiff were likely to suffer materially by the failure to complete this contract, it might be a very nice and difficult question for the Court to answer upon the ground of fairness to both the parties whether it should be specifically enforced or not. The evidence, however, here (and it is the plaintiffs' own evidence) is all one way. I cannot see how she will be benefited by the specific performance of this contract. It is indeed incredible, except upon the supposition that her attorneys have driven her into this suit, why she has taken this step at all. She has agreed to pay more than the property is worth. She could carry on her business just as well in any other premises. On the other hand, the defendant appears to me extremely reluctant to part with the property at the price stated in the agreement. She has really only a half interest therein, the other half belonging to her sister Cooverbai. There appears to be absolutely no need to sell the property for the payment of the deceased's debts. In the discharge of her duty as administratrix, the defendant would be under no urgent need of selling the property. And I can only suppose that she consented to sell, and that her sister, Cooverbai supported her in that decision, on the understanding that the sale would be an extremely profitable one for both of them.

5. In view of these considerations, it appears to me that this is a case in which the Court ought not to grant specific performance. I think that, in the circumstances, the proper decree would be that the prayer for specific performance, and the supplementary prayer for rectification, should both be refused, and the plaintiff's suit so far dismissed. But having regard to the state of the evidence and what I believe to be the underlying truth of the whole matter, I do not think that the plaintiff ought to be made to bear the defendant's costs of this litigation. There remains the counter-claim, which, again, is not entitled, I think, to very much sympathy at the hands of the Court. The most that can be said in this behalf is that the plaintiff is bound to pay the rent for the time she has remained in occupation of the premises; but in view of the peculiar circumstances of the case, I do not think that she ought to pay the enhanced rent the defendant is seeking to obtain from her. In my opinion, what the general justice of the case requires is, that the earnest money should be refunded to the plaintiff with interest at 6 per cent, per annum up to the date on which the defendant offered to return it; next that the plaintiff should pay to the defendant rent of the premises at the rate of Rs. 190 a month until she gives vacant possession; and that in all other respects the suit and the counterclaim should be dismissed, each party bearing her own costs.

6. The plaintiff should deliver up possession by the 1st of February 1915.

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