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Bisadendu Biswas Vs. Mst. Sakina Begum and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberLiquidated Claim Suit No. 750 of 1966
Judge
Reported inAIR1973Cal135
ActsContract Act, 1872 - Sections 56 and 70; ;Code of Civil Procedure (CPC) , 1908 - Order 3, Rule 4
AppellantBisadendu Biswas
RespondentMst. Sakina Begum and anr.
Appellant AdvocateAshim Ghose, Adv.
Respondent AdvocateP.K. Roy, Adv.
DispositionSuit dismissed
Cases ReferredSatyabrata v. Mugneeram
Excerpt:
- .....settled remuneration, besides all out of pocket expenses including costs for acting for me in the sale transaction on completion of sale'.16. the condition upon which the remuneration is payable is expressed in clear and unambiguous terms in the said letter as recited above. thus, according to the terms of the said contract of employment, the plaintiff was to be paid the said sum of rs. 2,000/-only upon completion of the sale. the transaction not having been completed, the plaintiff, according to mr. roy is not entitled to any remuneration whatsoever.17. it was urged bv mr. ashimghose on behalf of the plaintiff that this contract was not a commission contract simpliciter. it was a contract between a principal and an agent as well as between a solicitor and his client. thus the principle.....
Judgment:

S.C. Ghose, J.

1. This suit has been filed by the plaintiff who is a Solicitor of this Court for the recovery of a sum of Rs. 2,000/- as his remuneration under a contract dated November 20, 1963, whereby the defendant No. 1 authorised the plaintiff to do certain acts, namely;

(a) To negotiate the sale of the premises No. 43. Ripon Street belonging to the defendant No. 1 at Rs. 1,10,000/- free from all encumbrances with a stipulation that vacant possession of only one flat in the first floor in the occupation of the defendant No, 1 was to be given to the purchaser.

(b) To negotiate cancellation of an existing agreement for sale of the said property.

(c) To act for the defendant No. 1 In regard to the transaction of sale.

2. The agreement between the parties is contained in a letter dated 20th November, 1963, written to the plaintiff by the defendant No. 1 and accepted by the plaintiff.

3. The plaintiff duly negotiated for the sale of the said premises with one Sudhangsu Prakash Ganguli of 1/1, Grierson Road, Howrah, and through the efforts of the plaintiff a binding agreement for sale of the said premises between the defendant No. 1 as the vendor and Sudhangsu Prakash Ganguli as the purchaser was entered into and a formal contract for such sale was executed by tile parties. The said contract for sale is dated 18th January, 1964.

4. The plaintiff duly acted as the Solicitor of the defendant No. 1 in getting the cancellation of the said prior agreement for sale of the said premises which the defendant No. 1 had entered into with one Husnara Begum of 89/6, Ripon St, Calcutta, The plaintiff also acted as Solicitor for having encumbrances on the said property redeemed and in deducing title to the said premises including answering requisitions on title made on behalf of the said purchaser.

5. The purchaser duly approved the title of the defendant No. 1 to thesaid premises and a draft conveyance was prepared. According to the plaintiff the purchaser had been ready and willing to purchase the said property but due to the failure of the defendant No. 1 in producing wealth-tax clearance certificate and Income-tax clearance certificate, the said conveyance could not be executed nor registered. Thus the aforesaid failure on the part of the defendant No. 1 prevented the plaintiff from performing any further his part of the said contract. Thus the sum of Rs. 2,000/-became payable according to the plaintiff on account of his fees and/or commission. As the defendant No. 1 failed and neglected to pay the said sum the plaintiff has instituted this suit The plaintiff has based his claim, in the alternative, on Section 70 of the Indian Contract Act and claimed the said sum of Rs. 2,000/- as compensation. No relief has been claimed against the defendant No. 2, who is the husband of the defendant No. 1. The defendant No. 1 has filed written statement denying the claim of She plaintiff.

6. Upon the pleadings the following issues were raised and settled:

1. (a) Is the plaintiff entitled to any remuneration in terms of the letter dated November 20. 1963, being annexure 'A' to the plaint or otherwise as claimed?

(b) If so. what is the amount?

2. Has the plaintiff received an aggregate sum of Rs. 3,700/- as alleged in paragraph 9 of the Written Statement of She defendant No. 1?

3. To what relief, if any. Ss the plaintiff entitled?

7. The plaintiff examined himself and also adduced documentary evidence. The said letter dated 20th November, 1963, has been proved and exhibited by the plaintiff. The plaintiff has also exhibited true copies of the entries in his Day Book being the records of the Particulars of work done by the plaintiff as the Solicitor of the defendant No. 1 in respect of the said transaction. The said copies of the entries were disclosed as the plaintiffs document No. 2 and has been exhibited with the consent of the parties, and marked as Ext. B-1.

8. The defendant No. 2 has been examined on behalf of the defendant No. 1.

9. The evidence of the plaintiff is that the purchaser was ready and willing to purchase, but the transaction could not be completed due to the failure of the defendant No. 1 to obtain Wealth-tax and Income-tax Clearance Certificates but for which the conveyance could not be registered. The plaintiff has also stated that the defendant No. 1 received from the purchaser from time to time an aggregate sum of Rs. 65,000/- towards the consideration of the said pro-perty. The plaintiff has proved Ext. B-1 i. e. the particulars of the work that he did as the Solicitor of the defendant No. I in regard to the said transaction,

10. The defendant No. 2 has said in his evidence that it was the purchaser who had defaulted in completing the transaction. The purchaser was never after the payment of the said aggregate sum of Rs. 65,000/- from time to time, ready and willing to purchase the said property for the sum of Rs. 1,10,000/-, as agreed upon. The purchaser wanted to take advantage of the financial stringency of the defendants. As a matter of fact, even after the draft conveyance in terms of the original agreement between the vendor and the purchaser was approved by the vendor's Solicitor, the purchaser sent another draft conveyance setting out therein the price of the property to be Rs. 85,000/-. The defendant No. 1, according to the defendant No. 2 could apply for and obtain both Wealth-tax and Income-tax Clearance Certificates but did not do so as the purchaser did not went to complete the transaction.

11. The defendant No. 2 said that from time to time an aggregate sum of Rs. 2.700/- was deducted by the plaintiff out of the monies advanced by the purchaser and that sum is certainly more than the stipulated remuneration.

12. It must be noted that the defendant No. 1 in the written statement alleged that a total sum of Rs 3,700/-was deducted by the plaintiff while in the box the amount so deducted is stated to be Rs. 2,700/- by the defendant No. 2. Although it seems from the trend of the cross-examination that certain sums were deducted by the plaintiff on account of out of pocket expenses and on account of costs in other matters, in my opinion the defendant No. 1 has failed to discharge the onus of proving that a sum of Rs. 2,700/- was deducted by the plaintiff from time to time out of an aggregate sum of Rs. 65,000/- on account of remuneration in the instant case. I am unable to accept this part of the case of the defendants,

13. Mr. P. K. Roy appearing on behalf of the defendant No. 1 submitted that under the contract of employment the plaintiff was not entitled to any remuneration until the completion of the transaction. Mr. Roy relied on the case of Luxor (East Bourne) Ltd v. Cooper, 1941 AC 108 = (1941) 1 All ER 33. Mr. Roy said that the contract in the instant case was in substance a commission contract, and the rights and liabilities of the parties must depend on the exact terms of the contract. In such a contract the agent will earn the commission on the basis of the terms of the contractItself and may not be entitled to claim payment for work until an event required by the contract takes place. In such a contract there is no implied condition that the principal will do nothing to prevent the agent from earning his commission,

14. This was the ratio decidendi of the aforesaid case of 1941 AC 108where the agent was authorised to negotiate for the sale of certain properties and was promised the payment of commission of 10,000 on completion of the sale if a price of 1,75,000 were procured. The agent procured a purchaser whose offer was accepted bv the owner but the offer end acceptance were made subject to contract. Thus there was no binding contract until a formal contract was executed. The owner refused to proceed further. The principle governing such cases appears to be that the intention of the parties as to the payment of commission must be ascertained from the actual words used in the contract.

15. In the instant case the letter of '20th November. 1963, contains contract of employment between the parties. The relevant part of the said letter reads as follows:

'I hereby agree and undertake topay you out of the consideration money a sum of Rs- 2,000/- by way of your settled remuneration, besides all out of pocket expenses including costs for acting for me in the sale transaction on completion of sale'.

16. The condition upon which the remuneration is payable is expressed in clear and unambiguous terms in the said letter as recited above. Thus, according to the terms of the said contract of employment, the plaintiff was to be paid the said sum of Rs. 2,000/-only upon completion of the sale. The transaction not having been completed, the plaintiff, according to Mr. Roy is not entitled to any remuneration whatsoever.

17. It was urged bv Mr. AshimGhose on behalf of the plaintiff that this contract was not a commission contract simpliciter. It was a contract between a principal and an agent as well as between a solicitor and his client. Thus the principle governing a commission contract would not be applicable to the instant contract. Mr. Ghose contended that it was admitted on behalf of the defendant that a sum of Rs. 65,000/- was received as consideration. The plaintiff also acted as the Solicitor of the defend-end No. 1 in regard to the transaction. Therefore he was entitled to the remuneration especially when the defendant prevented the sale from being completed.

18. Lastly. Mr. Ghose contended that in any event the contract on the part of the Solicitor must be deemed to have become impossible of performance due to the conduct of a third party viz. the purchaser. Thus Mr. Biswas was entitled to his remuneration on the basis of quantum meruit.

19. The plaintiff himself has admitted that even after the first draft conveyance wherein the consideration money was fixed at Rs. 1,10,000/- had been approved, the purchaser caused to be sent to him another draft conveyance for the property stipulating therein the consideration money to be Rs. 85,000/-. By doing that the purchaser was insisting on completing a contract other than the one agreed upon between the parties. That certainly showed want of readiness and willingness on the part of the purchaser to perform the original contract as agreed upon. Moreover, it has been stated in evidence and also in paragraph 9 of the plaint that the purchaser had filed a suit prior to the institution of this suit in this Court against the defendant for enforcement of the mortgage and charge in respect of the said total sum of Rs. 65,000/- paid by the purchaser to the defendant No. 1 under the agreement for sale. At the date of institution of the said suit, it must be deemed that the purchaser was not ready and willing to perform his part of the contract and in fact had abandoned his claim for specific performance of the contract of sale and elected his remedy in enforcing his rights to recover the monies paid by way of earnest and consideration money under the contract of sale.

20. The aforesaid conduct on thepart of the purchaser proves, in my opinion, that the purchaser was not ready and willing to purchase the property. In the premises. I am unable to hold that the defendant No. 1 prevented the plaintiff in the instant case to complete his part of the contract between the plaintiff and the defendant No. 1.

21. The contract between the parties stipulated that the remuneration would be paid only on completion of the sale although out of pocket expenses of the plaintiff incurred in connection with acting as the solicitor of the defendant No. 1 would be paid by the defendant No. 1 in any event. Thus, it appears to me that the intention of the parties under the contract was that all out of pocket expenses to be incurred by the plaintiff as solicitor for defendant No. 1 would be paid by the defendant No. 1, but the remuneration of Rs. 2,000/-which comprises of both the fees of the Solicitor as well as the commission of the agent would be paid only on completion of the sale.

22. Costs for contentious or non-contentious business of the solicitor may be fixed by agreement between the solicitor and the client. The client is entitled to enforce such agreement which is favourable to master, e. S. an agreement by the solicitor to charge nothing et all as was the case in Jennings v. Johnson (18731 LR 8 CP 425. Clare v. Joseph, (1907) 2 KB 369; Gundry v. Sainsbury, (1910) 1 KB 645. or less than his ordinary remuneration, (Ibberson v. Neck. (1886) 2 TLR 427). Similarly where a solicitor undertook to act in an, action on the express terms that he was not to be paid unless the action succeeded, he could not even recover costs nut of pocket on the failure of the action. (See Terner v. Tenants. (1846) 10 Jur 429n).

23. In the instant case the plaintiff as the solicitor undertook not to charge anything except out of pocket expenses for acting as solicitor until and unless the sale was completed. The plaintiff in my view cannot now ask for his costs.

24. The decision in S. Rajan v.Union of India. : AIR1966Mad235 was relied on by Mr. Ghose as laying downthe proposition that even where there was a contract between the parties a party might rely on Section 70 of the Indian Contract Act In the said casethe plaintiff agreed to render services to the defendant on a remuneration to be fixed by the defendant at his discretion. It was held in the said case that where fixation of remuneration bv a party was left at the discretion of the other party to the contract, the Court had power to fix a reasonable remuneration. The said case, in my opinion, does not lay down, the proposition urged by the counsel.

25. State of West Bengal v. B.K. Mondal. : AIR1962SC779 also does not lay down any such proposition. In the said case the contract between the parties was held to be void and unenforceable as not being in conformity with the requirements of Article 299 of the Constitution of India or Section 175(3) of the Government of India Act. 1935. It must be noted that a party cannot sue upon a quantum meruit or on the basis of Section 70 of the Indian Contract Act to recover the value of the work he has done in cases where there is a valid and subsisting express contract between the parties. For such an action would be founded upon an implied promise by the other party to pay a reasonable sum for the work actually done. Such implication cannot be inferred so long as the express contract remains in existence. Nothing can be implied which is inconsistent with the terms of the express contract (See Britain v. Rossiter,(1879) 11 QBD 123). In the instant case the parties had bargained to pay or receive a lump sum in consideration of certain work to be done, but it cannot be implied that they intended that a reasonable sum would be paid for each part of the work as it would be performed. The rule leads certainly to injustice in many cases as in the old case of Cutter v. Powell. (1795) 6 Term REP 320. Exceptions therefore have been formulated and grafted to the said rule by Courts in order to prevent unjustified enrichment of a party to a contract at the expense of the other party inter alia in the form of principles of frustration of a contract.

26. Although generally speaking a promisor is bound by the terms of his promise, such terms may not always be expressed in words but be implied from the nature of the transaction. In certain cases where an event making performance impossible is of such character that it cannot reasonably be supposed to have been in the contemplation of the contracting parties when the contract was made, performance or further performance of the promise is excused,

27. It was held in Ezekiel Abraham Gubar v. Ram Jusrov Golab Roy, 33 Cal LJ 151 - (AIR 1921 Cal 3051 by a Division Bench of this Court presided over by Sir Ashutosh Mukherji. J. that impossibility as an excuse for non-performance must as a general rule be a physical or legal impossibility and not merely an impossibility with reference to the ability and circumstances of the promisor.

28. In Hurnand Rai Fulchand v. Pragdas Budhsen, 50 Ind App 9 = (AIR 1923 PC 54 (2) ) where Dhotis manufactured by named mill were agreed to be sold and delivered by the seller to the buyer by December 31, 1918, the Seller could not deliver the entire contracted quantity of goods on account of mill's failure to manufacture or deliver. It was held that that did not make it impossible on the part of the seller to perform the contract within the meaning of Section 56 of the Indian Contract Act.

29. The Law of Frustration is codified in our country by Section 56 of the Indian Contract Act The said section reads as follows:--

'56. An agreement, to do an act impossible in itself is void.

A contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

Where one person has promised to do something which, he knew, or withreasonable diligence, might have known, and which the promisee did not know to be impossible or unlawful, such promisor might make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise'.

30. The Supreme Court observed in Satyabrata v. Mugneeram, : AIR1954SC44 . that relief is given under the doctrine of frustration by the Court on the ground of subsequent impossibility when it finds that the whole purpose or basis of a contract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was beyond what was contemplated by the parties at the time when they entered into the agreement. When such an event or change of circumstances occurs which is so fundamental as to be regarded by law as striking at the root of the contract as a whole, it is the Court which can pronounce the contract to be frustrated and at an end.

31. The case of frustration wasnot laid in the plaint, herein. No issue on that aspect of the matter was raised or settled,

32. In view of the absence of the pleading of frustration of the contract, the claim or quantum meruit of the plaintiff cannot be considered in my opinion. In any event the instant case does not appear to me to be a case of frustration of the contract. In the case of frustration of the contract the impossibility of performance as has been laid down by the authorities noted earlier is brought about by a supervening event which the parties to the contract could not foresee reasonably. But in the instant case the parties to the instant contract at the time of entering therein certainly could foresee that for very many reasons including breach on the part of either vendor or purchaser the transaction for sale might not be completed. The breach on the part of Purchaser did not lead to an impossibility of performance by the plaintiff as contemplated by Section 56 of the Indian Contract Act

33. For the reasons stated above I propose to answer the issues as settled as follows:

1. (a) No.

1. (b) Does not arise.

2. No.

3. None.

34. The suit is dismissed. In the facts and circumstances of the case I do not make any order as to costs.


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