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Jagjit Singh Sawhney Vs. Hukam Chand - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 9 of 1970
Judge
Reported in1974RLR252
ActsSpecific Relief Act, 1963 - Sections 28
AppellantJagjit Singh Sawhney
RespondentHukam Chand
Advocates: B.G. Singh,; S.N. Chopra and; Surinder Anand, Advs
Excerpt:
.....and profit accrued on property due to absence of such explicit clause in agreement - no one can be owner of property built at cost of other. - - appellant failed to deposit and 'the respondent applied u/s 28 of specific relief act. 40,000.00 paid herein, will be treated as a part of the said price'.clause (8) specifically provides that on the failure of the respondent to perform his obligations under the agreement the appellant may, at his option, either claim specific performance of the agreement or claim a refund of rs. chandramma, [1965]3scr283 :noman who, knowing fully well that he has no title to property, spends money on improving it can be permitted to deprive the original owner of his right to possession of the property except upon the payment for the improvements which were..........(10) of the agreement dated 28-11-1963 are alone relevant. after stating in clause (4) that the cottage or annexe should be completed within eight months it provides that 'the possession of the entire plot including the building and the cottage or annexe, as may from time to time be standing there at, will belong to and will, at all times, vest in the party of the one part. subject to the condition and stipulation contained hereunder in clause (5)'. clause (5) provides that after obtaining the transfer of the said plot in his favor the vendor will execute a sale deed of the entire plot in favor of the appellant or his nominees 'together with the cottage or annexe standing thereon for a total consideration of rs. 3,95,000.00 and the sum' of rs. 40,000.00 paid herein, will be treated as.....
Judgment:

S. Rangarajan, J.

(1) Respondent had a plot of land at Friends Colony, N. Delhi. Appellant on 28-11-63 agreed to buy the same far Rs. 3,95,000.00 with condition that he would build a cottage and annexe within a certain time and on completion of same respondent would transfer the plot on payment of agreed price. Earnest money of Rs 40,000.00 was paid. Appellant instead of building a cottage began constructing a house and could not raise construction within stipulated time and a supplemental agreement was executed extending the time Appellant could not complete construction. Respondent then sued fur mandatory injunction to vacate the plot and appellant sued him for specific performance of contract. Both were consolidated and it was decreed on 18-4-68 that appellant should deposit Rs. 3,55,000.00 within 4 months and respondent would then execute sale deed. Appellant failed to deposit and 'the respondent applied U/S 28 of Specific Relief Act. for rescision of the contract. Single Judge accepted the application and ordered that respondent should pay to appellant Rs 2,50,000.00 for the construction and that respondent was entitled to rent and profits in respect of property at the rate of Rs. 4,500.00 per month from 1-6-65. Appellant appealed to D.B with the grievance that as subject matter of agreement was plot of land the respondent was entitled to rents and profits of the plot and not of the house built by him). Para 13 onwards judgment is :-

(2) What the court can direct when a contract is rescinded under section 28 of the Act has been provided for by sub-section (2) which consists of two parts (a) and (b) There is no dispute about (a) which relates to directing the party who had obtained possession to restore such possession to the vendor. It is worth recalling that the possession was taken by the appellant on 1-6-1965 ; it is common ground that the respondent took back the possession of the plot with the buildings on 18-8-1970.

(3) SUB-SECTION (2) (b) authorised while rescinding the contract to direct payment to the vendor of all the rents and profits which have accrued 'in respect of the property; it further, enables the Court, 'if the justice of the case so requires' to direct the refund of any sum paid by the vendee or lessee as earnest money or deposited in connection with the contract. To the latter aspect we shall revert later.

(4) The most important question that falls for consideration in this case is what is the property in respect of which rents and profits have accrued and may be directed to be paid to the vendor. In order to determine this question one has to turn to the agreement dated 26-11-1963 and supplemental agreement dated 15-3-65. The following expressions in clauses (4), (5), (8) and (10) of the agreement dated 28-11-1963 are alone relevant. After stating in clause (4) that the cottage or annexe should be completed within eight months it provides that 'the possession of the entire plot including the building and the cottage or annexe, as may from time to time be standing there at, will belong to and will, at all times, vest in the party of the one part. subject to the condition and stipulation contained hereunder in clause (5)'. Clause (5) provides that after obtaining the transfer of the said plot in his favor the vendor will execute a sale deed of the entire plot in favor of the appellant or his nominees 'together with the cottage or annexe standing thereon for a total consideration of Rs. 3,95,000.00 and the sum' of Rs. 40,000.00 paid herein, will be treated as a part of the said price'. Clause (8) specifically provides that on the failure of the respondent to perform his obligations under the agreement the appellant may, at his option, either claim specific performance of the agreement or claim a refund of Rs. 40,000.00 paid by him, and in addition 'recover the costs of construction of the cottage or annexe actually incurred' and a sum of Rs. 20,000.00 by way of damages for non-performance of the contract. The relevant portion of clause (10) reads as follows :

'10.Without prejudice to the rights and liabilities of the parties under clause (1) to (9) hereof, the party of the one part further assure the party of the other part that the party of the other part can start preparation of the revised plans of the whole construction of cottage or annexe from the date thereof.'

(5) 'IT is common ground that as contemplated in the agreement neither the cottage nor annexe was constructed but a house alone was constructed; there was consequent delay. It is also stated in the supplemental agreement of 15.3.1965 that instead of constructing a cottage or annexe the appellant started construction of the main residential bungalow by and with the consent of the respondent and that there will consequently be a delay in the completion of the said building and obtaining a certificate of building as contemplated in the original agreement. The supplemental agreement, thereforee, merely extended the date for the completion of the house and for obtaining the completion certificate up to 28.5,1965.

(6) A mere reading of the relevant clause of the two aggreements makes it clear that the original agreement contemplated only the construction of a cottage or annexe. The vendor himself, could not convey the title to the property on the date of the agreement because he had himself not taken a conveyance from the Society, which was originally the owner of the land. Probably on account of the fact that the vendor could not make the sale of the property without constructing on the property, the above Kind of agreement was entered into providing for (1) a cottage or an annexe alone being constructed ; (2) the same becoming the property of the vendor; and (3) the sale. of both the plot and the building, namely, the cottage or the annexe. being made for a sum of Rs. 3,95,000.00. Neither the original agreement nor the supplemental agreement do expressly provide for the construction of anything else except a cottage or annexe alone, nor the house could thus become the property of the vendor This appears to be crucial. If the same is borne in mind it will be seen that the observations made by S.R.Das, J. in M/s Bhatia Cooperative Housing Society Limited V D.C. Patel : [1953]4SCR185 , which were quoted by and relied upon by the learned single Judge, do help the appellant and not the respondent because as we read the above said agreement the respondent could not claim to have become the owner of the residential house which was admittedly not constructed by him but by the appellant alone. It will be sufficient to quote only the following portion out of the long passages that have been extracted by the learned single Judge from the said decision :

'BYthe agreement the building became the property of the Lesser and the Lesser demised the land and the building which, in the circumstances, in law and in fact belonged to the Lesser'

(7) The case before the Supreme Court was one of Lesser and lessee, but that hardly makes any distinction. It was found in that case that under the agreement the lessee had constructed the building, though at his own cost. for the Lesser. On construction of the above-said original and supplemental agreements we find that the vendor had not become, the owner of the residential house constructed by the appellant at his own cost. Hence the above-said decision does not help the respondent ; on the contrary it seems to help the appellant.

(8) When a person without title builds on the property of another, the Construction put on that property does not, according to Indian law, become the property of the owner. The Judicial Committee of the Privy Council (in Narayan Das Khettry V. Jatindra Nath Roy Chowdhry pointed out that the English maxim, namely, 'quicquid planta tur solo, solo cedit' has at the most limited application in India and quoted from the following observation of a full Bench judgment which was delivered in this country as early as in the year 1926 :

'WEhave not been able to find in the Laws or Customs of this country any traces of the existence of an absolute Rule of Law that whatever is affixed or built on the soil becomes a part of it, and is subjected to the same rights of property as the soil itself'.

(9) The above decision was also followed by the Judicial Committee in a later decision in Vallabdas Narainji V. Development Officer A.I.R. 1929 P.C 163. It is needless to notice the decisions of various other High Courts which have followed the above view.

(10) Some reliance, however, wag placed for the respondent on the following observations in R S. Maddanappa V. Chandramma, : [1965]3SCR283 :

'NOman who, knowing fully well that he has no title to property, spends money on improving it can be permitted to deprive the original owner of his right to possession of the property except upon the payment for the improvements which were not effected with the consent of that person'.

(11) The above observations arc of no assistance to the respondent. It has not been stated therein that the constructions put up by a stranger on another man's land become automatically the property of the owner

(12) The learned counsel for the respondent was not able, however, to cite any other authority in support of his contention that even independent of) the agreement the respondent became the owner of the constructions made by the appellant on his plot.

(13) The net position, thereforee, is that such owner can become entitled to the constructions put up by another person without title on his land only under some valid arrangement. The contract in this case does not contain any clause by which the respondent became owner of the house built by the appellant at his cost. We are afraid that the learned single Judge has assumed that the agreement itself provided for the respondent becoming owner of the constructions put up by the appellant at his own cost, which does not appear to be the case.

(14) The position concerning the vacant plot (No. 53, Friends Colony) is, however, different. It was admittedly the property of the respondent and in terms of section 28(2)(b) of the Act he is entitled to the rents and profits which have accrued in respect of the property. There seems to have been no concentration on this aspect of the matter either at the stage of recording evidence or even at the time of agreements. In the result we find that there is no material on record which would help us to ascertain the profits in respect of the vacant plot alone. It has become necessary, thereforee, to set aside the finding of the learned single Judge concerning the respondent being entitled to the rents and profits which have accrued from both the land as well as the construction which were fixed at Rs. 4,500.00 per month. After setting aside this finding we direct that the case be remanded to the learned trial Judge with liberty to both sides to adduce fresh evidence on the question of rents and profits which accrued from the plot of land alone and the same being adjusted out of the amounts which will have to be paid by the respondent to the appellant. We direct accordingly. [In Succeeding para it was held that valuation of 2,50,000.00 was proper and that the view which D.B. had taken, respondent would be justified in retaining earnest money].


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