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Subramania Mudaliar Vs. Ammapet Co-operative Weavers Production and Sales Society Ltd. by Its President S. Gopalaswami Mudaliar - Court Judgment

LegalCrystal Citation
SubjectContract;Trusts and Societies
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 60 of 1958
Judge
Reported inAIR1961Mad289; (1960)2MLJ477
ActsContract Act, 1872 - Sections 3 and 55
AppellantSubramania Mudaliar
RespondentAmmapet Co-operative Weavers Production and Sales Society Ltd. by Its President S. Gopalaswami Mudal
Appellant AdvocateK.S. Champakesa Iyengar, Adv. for ;R. Gopalaswami Iyangar, Adv.
Respondent AdvocateK. Shanmugham, Adv.
DispositionAppeal dismissed
Cases ReferredGovindaraj v. Kandaswami Gounder
Excerpt:
.....- on 3-2-1956 he said that a resolution has been passed deciding to sell the house to me'.the evidence of the plaintiff clearly shows therefore that the entire terms of the contract were not communicated by the president to the..........made by the plaintiff and also the first resolution passed by the society and the fact that the president informed the plaintiff of the resolution and added that the plaintiff agreed to the time limit and, as he did not. keep to the time limit, the subsequent resolution was passed. the defendant denied that there was any mention to the plaintiff that the draft might be submitted by 7-3-1956. on these facts, issues were framed as follows:1. was there any stipulation as to the time for plaintiff's fulfilling the contract and, if so, was time essence of the contract ?2. was there a completed contract in law? two other issues also were framed which are not necessary for the purpose of the contentions be-fore me in second appeal. the first court decreed the suit, but in appeal the district.....
Judgment:

Somasundaram, J.

1. The plaintiff is the appellant. He brought the suit for specific performance of an alleged contract to sell the building belonging to the respondent. The respondent is a co-operative society.

2. The case for the plaintiff is this. In the end of January 1956 the defendant-society called for offers for the sale of the house. There were offers upto Rs. 2500. The plaintiff gave a petition for purchase for Rs. 2550. The Board lay its resolution No. 391 dated 3-2-1956 accepted the plaintiff's offer and authorised a sale deed to be executed by the president if the sale could be concluded before 2-3-1956.

The plaintiff was informed by the president of this resolution and subsequently he was told that a draft sale deed might be submitted after Mahamaham, that is to say, by about 7-3-1956. Accordingly, the plaintiff submitted a draft sale deed, but the defendant did not sell the house because the sale was not completed before 2-3-1956, according to the resolution. This answer of the defendant was also embodied in a resolution dated 5-3-1956. It may be mentioned that it was only after this resolution that the plaintiff sent a draft.

The defendant admitted the offer made by the plaintiff and also the first resolution passed by the society and the fact that the president informed the plaintiff of the resolution and added that the plaintiff agreed to the time limit and, as he did not. keep to the time limit, the subsequent resolution was passed. The defendant denied that there was any mention to the plaintiff that the draft might be submitted by 7-3-1956. On these facts, issues were framed as follows:

1. Was there any stipulation as to the time for plaintiff's fulfilling the contract and, if so, was time essence of the contract ?

2. Was there a completed contract in law? Two other issues also were framed which are not necessary for the purpose of the contentions be-fore me in second appeal. The first court decreed the suit, but in appeal the District Judge dismissed the suit. Hence this second appeal by the plaintiff.

3. The appellate court went on the footing that time was of the essence of the contract and as the plaintiff, knowing the terms of the resolution, did not conform himself to those terms, he could not be allowed specific performance. As regards the communication, in paragraph 8 of this judgment the learned District Judge observed,

'It was the duty of the plaintiff to obtain the Board's resolution in writing accepting his offer as per Ex. B. 2, and the terms of the resolution. He cannot for one purpose rely on the resolution and for another purpose escape from its terms'.

In paragraph 10 he says,

'There is nothing to show that plaintiff was ready and willing to perform his part of the contract within the time limit. In fact, he appears to have taken it leisurely on some alleged assurance by the president, that is hardly worth any credence.'

In paragraph 12 he held that there was no completed contract and that, in any event, time was of the essence of the contract, and therefore he found the points in favour of the defendants and dismissed the suit.

4. In appeal before me, the main contention of the appellant was that the time was not of the essence of the contract If the case has to be decided only on that point. I must agree with the contention of the appellant that in this case time cannot be said to be of the essence of the contract. I have only to refer to the decision in Jamshed Kodaram v. Burjorji Dhunjibhai, I.L.R Bom 289 : (A.I.R. 1915 P.C. 83), to hold that in such a case of sales of land, that is of immoveable property, time is not normally to be considered as essence of the contract.

5. But by far the most important question that appears to me and on which the learned counsel for the respondent relies is whether there has been a completed contract, that is to say, whether there has been a communication of the resolution passed by the Society to the plaintiff The plaintiff states in his evidence that 'no information was given to me nor was I informed on 3-2-1956 that I might complete the sale by 3-3-1956. The President asked me to prepare draft on 7-3-1956 orally. On 3-2-1956 he said that a resolution has been passed deciding to sell the house to me'.

The evidence of the plaintiff clearly shows therefore that the entire terms of the contract were not communicated by the President to the plaintiff. Notwithstanding this fact the lower court has held that undoubtedly the President must have informed the plaintiff of the entire resolution But it is necessary to refer to the circumstances under which the President is said to have informed the plaintiff.

While the plaintiff was in his shop the President is said to have told him at the shop at about 7 p.m. of the passing of the resolution. This is the communication which is relied on by the plaintiff for the purpose of showing that there is a completed contract between the plaintiff and the defendant. It is contended by Mr. Shanmukham, learned counsel appearing for the society, that this casual Information would not amount to a communication and therefore this would not amount to a completed contract.

He relies on the decision in Powell v. Lee, (1908) 99 L.T. 284. There, the managers of a school passed a resolution appointing the plaintiff, who had applied for the post, to the position of head master; but the decision at which they had arrived was not communicated to the plaintiff. It was held that the passing of the resolution without communication to the plaintiff did not constitute a contract to appoint him to the post for the breach of which the plaintiff was entitled to sue.

On the facts of that case it is clear that one of the members of the Committee gave information to the plaintiff in that case. It was observed that

'where a body of six people, acting not as a corporation or as a board of directors, but as six persons having the power to appoint to a post vote on the question and resolve to appoint someone, they do not make a concluded contract then and there. There must be something more. There must be a communication made by the body of persons to the selected candidate.

In the above case, the managers authorised a communication to Mr. Parker to the effect that he had not been elected; but they did not authorise a communication to Mr. Powell to the effect that he had been elected. To my mind, that implies that they reserved the power to consider the matter'.

The facts disclose that only one of the members informed Powell of the acceptance of this application and of appointment by the body of Mr. Powell as head master.

6. In the above case under appeal according to the rules of the society 'the secretary shall be responsible for the executive administration of the society subject to the control of the President', Rule 23(c) says the secretary shall be the officer to sue or be sued on behalf of the society and all bonds in favour of the society shall be in the name of the society.

This rule shows that any communication on behalf of the Board must be by the secretary as such and not by the President in a casual way to any person who may have dealings with the society. I hold, therefore, that, construing the rules along with the evidence in the case, there has been no communication by the society as such to the plaintiff. If there has been no communication, then there has been no concluded contract.

7. According to the plaintiffs evidence, the entire terms were not communicated. He was only informed of the acceptance and not about completing the transaction before a particular date. He cannot be allowed to turn round and abandon his case and rely upon the defendant's case that the entire resolution was communicated to him. As pointed out by Rajagopala Aiyangar J. in Govindaraj v. Kandaswami Gounder, : AIR1957Mad186 , 'the plaintiff cannot be allowed to abandon his own case, adopt that of the defendant's and claim relief on that footing', On the facts, therefore, I hold that there has been no communication of the resolution to the plaintiff and therefore there has been no completed contract in this case, and in this view the plaintiffs case must fait

8. The appeal is therefore dismissed with costs.


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