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Hira Lal Vs. Khairati Lal - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad
Decided On
Judge
Reported inAIR1924All360; (1924)ILR46All211; 78Ind.Cas.1037
AppellantHira Lal
RespondentKhairati Lal
Excerpt:
contract - price of disputed property referred to valuer--valuation grossly erroneous--refusal of court to enforce contract. - - they had frequent quarrels and those quarrels brought them to the criminal courts, and it appears that when the deputy collector was investigating or about to investigate one of those criminal complaints, it was suggested that as these parties could not live pleasantly in close proximity to each other, it would be a very good thing if one sold his share of the house to the other and removed himself to a distance. when he gave evidence, it, became perfectly clear that he had acted in a thoroughly careless manner. ali ausat took a strong view with regard to mr......he did inspect the house, of that there is no doubt, and on the 29th of september he valued the share of hira lal in the house at rs. 5,500. that amount came as a considerable shock to khairati lal, and on the 8th of october he in fact offered to sell his share at a price which would show a considerably less value than rs. 5,500 as hira lal's share in the house. again, in the written statement in paragraph 19 he offered to sell his share in the house for rs. 1,500 and put his share at twice as much as hira lal's. on that basis, therefore, he was expressing his willingness to part with his share in the house at a price very very far below the estimated value put upon hira lal's share by sohan lal. when the case came to trial. somehow or other sohan lal was got into the box and he gave.....
Judgment:

Grimwood Mears, Kt., C.J. and Piggott, J.

1. This is an appeal from the judgment of the Subordinate Judge of Aligarh. The action was one brought by Hira Lal for specific performance of an agreement, Khairati Lal being the defendant. The plaintiff and defendant each had a certain share in a house in mohalla Dhusaran in Aligarh. They had frequent quarrels and those quarrels brought them to the criminal courts, and it appears that when the Deputy Collector was investigating or about to investigate one of those criminal complaints, it was suggested that as these parties could not live pleasantly in close proximity to each other, it would be a very good thing if one sold his share of the house to the other and removed himself to a distance. That view seemed, in the circumstances, to both of them to be a wise thing to do, and on the 4th of September, 1919, when the parties were before a Magistrate of the second class, they agreed that one Sohan Lal, a pleader, should act in preparing an estimate of the price of the share in the house owned and possessed by Hira Lal. Eight days later, on the 12th of September, there was a formal agreement which gave Sohan Lal the power to determine what was the value of the house and for what amount the share should be sold, and it was agreed that Khairati Lal would purchase the share that Hira Lal possessed in the house for the amount that Babu Sohan Lal might determine to be. There was nothing whatever said about the method of procedure that Sohan Lal should adopt, except that he was to 'determine the value of the house after inspecting it. That was all he had to do. He did inspect the house, of that there is no doubt, and on the 29th of September he valued the share of Hira Lal in the house at Rs. 5,500. That amount came as a considerable shock to Khairati Lal, and on the 8th of October he in fact offered to sell his share at a price which would show a considerably less value than Rs. 5,500 as Hira Lal's share in the house. Again, in the written statement in paragraph 19 he offered to sell his share in the house for Rs. 1,500 and put his share at twice as much as Hira Lal's. On that basis, therefore, he was expressing his willingness to part with his share in the house at a price very very far below the estimated value put upon Hira Lal's share by Sohan Lal. When the case came to trial. Somehow or other Sohan Lal was got into the box and he gave evidence. When he gave evidence, it, became perfectly clear that he had acted in a thoroughly careless manner. He appeared to have no idea whatever of the proper way of discharging the duty which he had undertaken, and we are greatly astonished that a pleader of mature age and presumably some legal experience should have conducted himself in the way that he did. On his own admission, he did not ask the advice of anybody as to the rates and prices which were prevailing in the mohalla. We do not say that it was necessary for him to do that, because he might, in his own experience, already have got a fair general idea. It would, however, have been a prudent thing for him to do this and it might have saved him from giving an estimate which we regard as completely extravagant. We now know the basis of that estimate, and he says that having had the rooms counted, he prepared an estimate of the price by guess. What in fact he did is clear from an answer he made to the court. He took what he believed to be the price of materials and the price of labour prevailing in the year 1919, and he worked out a figure of what he believed would have cost if somebody started to build on that site a portion of the house such as he was called upon to value. He was aware that he was dealing with a house at least 40 years old as regards, at all events, the principal structure, and it never occurred to him at all that he was proceeding upon a completely unfair basis. What he ought to have done would have been to have asked himself what was the value of the house after allowing for the fact that it was a house 40 years of age. The proper question for him to put to himself was what would a willing purchaser be likely to give to a seller according to the original structure of the house, its present) condition and location. When questions, directed to show that his value was over-estimated, were put to him, he dropped down to a sum of Rs. 3,000 as being the value of the house as it stands today. There is no doubt that Mr. Ali Ausat took a strong view with regard to Mr. Sohan Lal's incompetence and carelessness. We take the same view and we consider that he is deserving of censure and reprobation.

2. Now comes the appellant who says that he is entitled to a decree for specific performance, that is to say, that this Court, in the exercise of its discretion, must decree that Khairati Lal shall pay Rs. 5,500 for a property manifestly worth not more than Rs. 3,000. We decline to do it, and it so happens that this type of case has been considered in some of the English decisions. In the sixth edition of Pry on Specific Performance, page 215, the law is summarized in this way: 'Where the contract refers the price to a valuer for him to ascertain between the parties, this fact does not of itself preclude the court from inquiring into the adequacy of the consideration, and this inadequacy of consideration, would, of course, be strengthened as a defence if any circumstances arose which threw a doubt on the accuracy with which the valuation was made. The effect of an undervaluing by the valuers is a question which has, however, been but little discussed in our courts: it has been debated with the usual diversity of opinion by the writers on civil law. It is conceived that, if the undervalue were such as to convince the court that the valuers had acted under fraud or mistake, the contract would be incapable of enforcement in equity: otherwise, if the undervalue did not so convince the court.' We are of opinion here that the valuer arrived at his finding by applying a wholly mistaken standard. We, therefore, approve the decision of the Subordinate Judge and dismiss the appeal with costs.


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