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Sukumar Bysack Vs. Sushil Kanta Banerjee - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKolkata High Court
Decided On
Case NumberSecond Appeal No. 520 of 1967
Judge
Reported inAIR1972Cal207,76CWN116
ActsEvidence Act, 1872 - Sections 91 and 92; ;Specific Relief Act, 1877 - Sections 20 and 22
AppellantSukumar Bysack
RespondentSushil Kanta Banerjee
Appellant AdvocateLala Hemanta Kumar, ;Paresh Nath Bhattacharyya and ;Iswari Prosad Agrawal, Advs.
Respondent AdvocateBankim Chandra Banerjee and ;Deba Prosad Mukherjee, Advs.
Cases ReferredBudhu Sau v. Mangal Sau)).
Excerpt:
- .....of an amount of rupees 3250/- for building a house on that land. the property at the time of the transaction evidenced by ex. 1 consisted of an one storied building having three bed rooms, one verandah, one c.i. roofed room and sanitary privy and a ringwell. defendant testified that he spent about rs. 15,000/- for those structures. value of the property at the relevant time according to the estimate of d.w. 1 who is an engineer and expert would not be less than rs. 21,000/-. correspondence by letters ex. 2 series shows that plaintiff's definite case was that the defendant had failed to make out good marketable title and had neither cleared the liability to government under mortgage nor paid the dues of the municipality and calcutta electric supply corporation.6. a question however was.....
Judgment:

Amaresh Roy, J.

1. This appeal is by the Plaintiff in a suit for specific performance of a contract alleged to be a contract for sale of immovable properties. Plaintiff had also prayed in the suit for possession of the disputed properties by evicting the defendant therefrom and other ancilary reliefs. Plaintiffs lost in the original court of Subordinate Judge and also in the appeal. Hence this Second Appeal has been preferred in this Court.

2. Plaintiff's case was that defendant was the owner of the disputed properties and he had agreed to sell those to the plaintiff for a consideration of Rs. 8000/-. On 23-12-1958 an agreement for sale was executed and registered between the parties, the plaintiff having paid Rs. 3.500/- as earnest money. It was agreed that defendant shall make out a good and marketable title, deliver the title deeds and connected papers within two days from the date of registration of the agreement, clear the mortgage of the property created by him in favour of Government of West Bengal within 21 days from the date of agreement by paying up the dues of the mortgagee out of the earnest money and complete the transaction of sale within 30 days from the date of delivery of title deeds. Plaintiff alleged that he was ready and willing to pay the balance consideration and made repeated demands on the defendant to comply with the terms of the agreement but the defendant failed to do so. At the same time plaintiff also alleged that the defendant not having disclosed or paid up the dues of Government under the mortgage and also monies due to the Municipality and Calcutta Electric Supply Corporation, the plaintiff is entitled to withhold a portion of the consideration money for clearing those liabilities.

3. Defendant contested the suit. His case is that plaintiff really advanced a sum of Rs. 2232/- as loan at a time the defendant was in urgent need of money for maintaining his big family. The document in the form of agreement for sale was executed as security for the said loan and plaintiff gave assurances that the transaction shall be treated as a loan and security for that loan. Defendant contended that the plaintiff at best can claim refund of the earnest money with 6 per cent, interest thereon.

4. At the trial evidence was given on both sides. While on the plaintiff's side reliance was placed mainly on the registered document proved in evidence and marked Ext. 1 and a bunch of letters marked Ex. 2 series; on the side of the defendant also reliance was placed on some of the clauses in Ex. 1 and contents of letters Ex. 2 series by examining several witnesses to show the real nature of the transaction and the surrounding circumstances in which the transaction was entered into in support of the defendant's case that the transaction was really a loan and the document Ex. 1 was executed as a security for that loan. Some of those witnesses are persons who were present at the transaction and attested the document Ex. 1.

5. Facts brought out in evidence and accepted by both the Courts below are that defendant came to India as a refugee from East Bengal leaving all his property in that country. He has a large family to maintain and look after. He purchased the land in suit measuring about 2 cottas 9 chittaks at a consideration of Rs. 6250/-. Then he took a loan from Government of an amount of Rupees 3250/- for building a house on that land. The property at the time of the transaction evidenced by Ex. 1 consisted of an one storied building having three bed rooms, one Verandah, one C.I. roofed room and sanitary privy and a ringwell. Defendant testified that he spent about Rs. 15,000/- for those structures. Value of the property at the relevant time according to the estimate of D.W. 1 who is an Engineer and expert would not be less than Rs. 21,000/-. Correspondence by letters Ex. 2 series shows that plaintiff's definite case was that the defendant had failed to make out good marketable title and had neither cleared the liability to Government under mortgage nor paid the dues of the Municipality and Calcutta Electric Supply Corporation.

6. A question however was raised whether evidence to show that nature of the transaction was loan and not an agreement for sale of immovable property could be adduced in view of the registered document Ex. 1. Both the courts below held by referring to decisions cited that oral evidence to show real nature of the transaction was admissible and is not barred by the provisions in Sections 91 and 92 of Evidence Act.

7. Taking into consideration evidence on record, the. surrounding circumstances and probabilities of events particularly the several terms in Ex. 1 and definite stand taken by plaintiff as evidenced by letters Ex. 2 series the trial court held that real transaction was one of a loan of Rs. 2232/- at an interest of 6 percent, per annum and Ex. 1 was executed as security for that loan. It is not an agreement of sale at all. though the document Ex. 1 was executed in that form. The parties never intended that the Bainapatra (Ex. 1) would be given effect to except as a security for the loan. In the terms of the deed particularly in Clauses 3, 4 and 5, the defendant not having made out a good marketable title, as In the plaintiff's definite case. Clause 8 of the deed Ex. 1 can be enforced that the defendant shall refund the earnest money with interest at the rate of 6 per cent p.a.

8. The learned Subordinate Judge also held that even if the agreement for sale is effective, the plaintiff cannot obtain a decree for specific performance either as of right or as a matter of course. Court has a discretion in the matter of granting an equitable remedy and that discretion should be exercised by taking into consideration all the surrounding circumstances and equity of the bargain. Plaintiff's claim for a decree for specific performance of contract of sale was disallowed but a decree in his favour directing defendant to refund the earnest money with interest was passed in the trial court.

9. Plaintiff appealed against that decree. The appellate Court agreed with the findings of facts arrived at by the trial court and also held that on the authority of Privy Council decision in AIR 1936 PC 70, (Tyagaraja Mudaliyar v. Vedathanni) Sections 91 and 92 of Evidence Act do not preclude the defendant from showing by evidence that though the document was executed in the form of an agreement for sale, the real nature of transaction was a loan for which the document was a security. The appellate Court also held on the authority of the decision of this Court in the case of Haradhan Deb Nath v. Bhagabati Dasi, ILR 41 Cal 852 (853) = (AIR 1914 Cal 137) that Section 20 read with Section 22 of Specific Relief Act gives discretion to Court not to enforce specific performance in cases where bargain appears to be so hard as to be unconscionable, so that its actual performance would in the circumstances be inequitable. Being of the view that the discretion has been rightly exercised by the Subordinate Judge, the appellate Court affirmed the decree passed in the trial court and dismissed the appeal with costs.

10. Plaintiff has preferred this Second Appeal from that judgment and decree of the appellate Court. Appearing in support of the appeal the learned Advocate Mr. Lala acknowledged that on questions of fact, the concurrent findings of the Courts below are conclusive and cannot be reopened. But Mr. Lala sought to argue two points as question of law. First, he contended that the Courts below are not correct in overruling the objection of admissibility of evidence to show that facts are contrary to what appears unambiguously in the written contract. To answer this contention on behalf of the Respondents the learned Advocate Mr. Banerjee has relied on the Privy Council decision cited by the Courts below and also on later decisions of this Court explaining the scope of Sections 91 and 92 of Evidence Act (See ILR (1956) 1 Cal 59, Manindra Nath Bose v. Narendra Kishore Mitra; : AIR1954Cal48 . Sukumar Banerjee v. Hiralal Chatterjee); : AIR1954Cal379 , Satish Chandra Saha v. The State); : AIR1967Cal351 , Banku Behari Chadra v. Sm. Kalyani Devi); ( (1966) 70 Cal WN 982. Budhu Sau v. Mangal Sau)).

11. We agree with the contention of Mr. Banerjee that the Courts below have correctly applied the law and have not committed any error in following the decision of the Privy Council and later decisions of this Court above referred to.

12. Only other point raised by Mr. Lala for Appellant before us is the use of discretion of Court for granting equitable relief by enforcing specific performance, Mr. Lala is right in asserting that the discretion cannot be exercised arbitrarily and must be exercised judicially in the circumstances in each case. He did not contend that Court has no discretion at all and is compelled to grant the relief of specific performance of a contract that has been established by evidence. His contention was that discretion has not been judicially and properly exercised for rejecting the claim of specific performance of the contract proved in this case. That contention does not appear to us to be sound. In the circumstances of the present case and on evidence on record both the Courts below have found that the transaction was in fact not a contract for sale of land, but only a transaction of loan. Then only the Courts below considered the aspect that even if it is an agreement for sale of land on the terms of that con-tract plaintiff is, entitled to a decree for enforcing Clause 8 thereof because plaintiff's own case is that Clauses 3. 4 and 5 have not been complied with by defendant and he having failed to make out a good marketable title plaintiff is entitled at best to a decree for refund of the earnest money mentioned in Ex. 1 with interest as stipulated in Clause 8 of that document. That is a decision must in favour of the plaintiff and has been made in proper and judicial exercise of discretion for balancing equities between the parties. On the findings of the Courts below, to enforce performance of contract of sale, would be inequitable because the bargain was not merely improvident or for inadequate consideration but was definitely unconscionable. We agree with that finding.

13. Mr. Lala then argued that more than 12 years have elapsed since the contract was entered into and also from the date when the suit was instituted. In the changed circumstances by lapse of time, the decree made in favour of the plaintiff will be unjust and inequiable to him. Mr. Lala therefore prayed for modification of the decree suitably on equitable grounds. Mr. Banerjee for the Respondent indicated that his client will not object to stand in the way of suitable modification of the decree for doing justice and equity between the parties that this Court may think proper.

14. Taking all matters into consideration we hold that it will be just and equitable to both parties to modify the decree to the extent that if within 30th of June 1971 the plaintiff deposits in the trial court Rs. 15,000/- in cash to be paid to the defendant, there shall be a decree for specific performance of the agreement for sale against the defendant and in favour of the plaintiff. If the said amount of Rs. 15,000 is not deposited by plaintiff within 30th June next, the decree passed in the suit shall stand affirmed. With that modification of the decree the appeal is dismissed without costs.

De, J.

15. I agree.


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