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Calcutta Construction Investment Co. Vs. Sekhar Chand Law and anr. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtKolkata High Court
Decided On
Case NumberSuit No. 875 of 1978
Judge
Reported inAIR1979Cal324
ActsCode of Civil Procedure (CPC) , 1908 - Order 39, Rule 1; ;Specific Relief Act, 1963 - Section 37
AppellantCalcutta Construction Investment Co.
RespondentSekhar Chand Law and anr.
Appellant AdvocateD.P. Gupta and ;P.K. Das, Advs.
Respondent AdvocateSomnath Chatterjee, Adv. (for No. 1) and ;Bholanath Sen, Adv. (for No. 2)
DispositionApplication dismissed
Excerpt:
- .....was an agreement to grant lease of the said property by shekhar chandra law in favour of manick chand damani who has already paid a sum of rs. 4,00,000.00 to the income-tax department and to whom the possession has been given as early as on 1st of dec. 1978. it is the case of the petitioner that after such statement was made by shekhar chandra law the petitioner took out an application on 1st of december, 1978 for addition of manick chand damani as a party defendant and also for amendment of the plaint and the petition and on that day an order was made for maintenance of status quo. 3. the case of the petitioner before me is that the letters dated 13th of november and 15th of nov. 1978 read together would constitute a valid and legal agreement; as such no subsequent purported.....
Judgment:
ORDER

Padma Khastgir, J.

1. This application has been taken out by Calcutta Construction and Investment Company for an order for appointment of a Receiver to take possession of premises No. 50, Kailash Bose Street, Calcutta and also for an order of injunction restraining the defendant No 1, Shekar Chandra Law, his servants and/or agents or assigns from dealing with, disposing of, encumbering and/or letting out by way of lease or transferring in any manner the said premises No. 43, (sic) Kailash Bose Street, Calcutta.

2. The case of the petitioners shortly is that by a letter dated 13th of Nov. 1978 Shekhar Chandra Law wrote to his broker, B. C. Baid authorising him to lease out the said premises on the terms and conditions as contained in the said letter. According to the petitioner, the petitioner by a letter dated 15th of Nov. 1978 accepted the said offer and agreed to take lease of the said suit property on the terms and conditions as mentioned in the said letter. Pursuant to one of the terms, on 15th of Nov. 1978 the petitioner deposited a sum of Rs. 50,000/- by cheque with M/s. T. Banerjee and Company, Solicitor for Shekhar Chandra Law. Thereafter it is the petitioner's case that Mr. M. P. Jhunjhunwalla and Mr. S.K. Dabriwalla being the representatives of the petitioner met the Income-tax Officer the Defendant No. 1 and requested him to issue necessary challans so that the plaintiff may deposit a sum of Rs. 4,00,000.00 to the Income-tax Department as agreed under the said agreement. Thereafter by a letter dated 17th/20th of Nov. 1978 theIncome-tax Department wrote to Shekhar Chandra Law threatening attachment in default of payment. It is the case of the petitioner that on 21st of November, 1978 the broker B. C. Baid intimated Manick Chandra Damani, the defendant No. 2, herein that the defendant, Shekhar Chandra Law has agreed to grant long term lease of the suit property in favour of the petitioner. Thereafter on 1st of Dec. 1973 the petitioner wrote a letter to M/s. T. Banerjee and company with a copy to defendant No. 1 requesting the defendant to perform his part of the agreement as agreed to by and between the parties and intimated that the plaintiff was ready and willing to perform its part of the agreement. Thereafter on 4th of Dec. 1978 M/s. T. Banerjee and Company forwarded to the petitioner a copy of the letter dated 30th of Nov. 1978 written by Shekhar Chandra Law to M/s. T. Banerjee and Company cancelling the agreement between the plaintiff and the defendant No. 1. Thereafter on 6th of Dec. 1978 this suit for specific performance was filed and on an ex parte application being moved on behalf of the petitioner an order of injunction was passed and the same was made returnable on 12th of Dec. 1978. On 12th of Dec. 1978 Mr. N. D. Roy, Barrister-at-law was appointed as Special Officer to inspect and make report with regard to the said property as on that day counsel for Shekhar Chandra Law submitted that on 24th of Nov. 1978 there was an agreement to grant lease of the said property by Shekhar Chandra Law in favour of Manick Chand Damani who has already paid a sum of Rs. 4,00,000.00 to the Income-tax Department and to whom the possession has been given as early as on 1st of Dec. 1978. It is the case of the petitioner that after such statement was made by Shekhar Chandra Law the petitioner took out an application on 1st of December, 1978 for addition of Manick Chand Damani as a party defendant and also for amendment of the plaint and the petition and on that day an order was made for maintenance of status quo.

3. The case of the petitioner before me is that the letters dated 13th of November and 15th of Nov. 1978 read together would constitute a valid and legal agreement; as such no subsequent purported agreement is binding on the petitioner. Moreover the person who has purported to take the suit property under the second subsequent agreement becomesa trustee and as such he would be holding the suit property for the benefit of the plaintiff.

4. Mr. D.P. Gupta appearing with Mr. P. K. Das on behalf of the petitioner craved reference to Section 91 of the Trusts Act and Section 19 of the Specific Relief Act. According to the petitioner, agreement of Shekhar Chandra Law with Manick Chand Damani is, prima facie, void as, in view of Clause 6 of the said agreement and in view of Section 49 of the Registration Act and Section 59 of the Transfer of Property Act, the said document has not been duly registered; as such no right could follow from the said agreement. In that respect he craved reference to a case reported in : [1973]2SCR1064 .

5. Mr. D. B. Gupta submitted that as neither of the agreements for the lease have been executed, status quo should be maintained because in view of his client having made out a prima facie, case it is just and proper that this Court should pass an order of injunction maintaining status quo between the parties. He further referred to (1848) 41 E R. 1074; 1 Law Reports page 50 at 60; (1975) 1 All ER 504 and submitted that for the sake of balance of convenience and in view of the fact that there is a fair question to be tried at the time of hearing of the suit the petitioner need not even prove a prima facie case at this stage. The only point that should be considered by this Court at the moment is whether there is a fair question to be tried at the time of hearing of the suit and if such a case is specifically made out by the petitioner, an order of injunction and Receiver should be made as a matter of course.

6. It is the case of Manick Chand Damani, the defendant No. 2, that Manick Chand Damani had no knowledge whatsoever of any agreement that has alleged to have been entered into between the petitioner and Shekhar Chandra Law. Manick Chand Damani is a bona fide lessee who has entered into agreement with Shekhar Chandra Law for value and in fact he is in the possession of the suit property since 1st Dec. 1978. He has let out parts of the property to various sub-lessees and in fact he has started carrying out extensive repairs and reconstruction of the suit premises; as such he is not bound by any purported agreement as he had no knowledge of existence of the said alleged agreement.

7. Mr. Bholanath Sen appeared on behalf of Manick Chand Damani and submitted that first of all his client has taken out lease without any notice of any previous purported agreement. Moreover his client after spending of Rs. 4,00.000 and taking possession of the suit property had undertaken extensive repair works and also had let out part of the property to sub-lessee; as such his right should not be disturbed and for the sake of balance of convenience no order for injunction should be passed at this stage. Mr. Bholanath Sen also craved reference to 0065/1965 : [1966]1SCR656 ; : [1964]5SCR125 .

8. Mr. Bholanath Sen further submitted that there is no iota of truth regarding the petitioner's case that his client had full knowledge of the purported agreement entered into between the plaintiff and the defendant No. 1. The Affidavit of B.C. Baid is a tissue of falsehood and it cannot be supported on any account. There is no fair or substantial question to be tried at the time of hearing of the suit as his client without any notice of any alleged agreement has entered into an agreement with Shekhar Chandra Law, in fact, has parted with Rs. 4,00,000.00 by making part payment to the Income-tax Department and his client has gone into the possession of the premises and sub-let to various sublessees the said premises and in fact his client is liable to pay a sum of Rs. 9.000/-every month to Shekhar Chandra Law under the said agreement. The memorandum of title which has been deposited by Shekhar Chandra Law in terms of Clause 6 of the said agreement shows that that agreement recorded a past transaction as the title deed had been deposited by Shekhar Chandra Law in favour of his client; as such there is no difficulty in giving effect to the said agreement. It is his definite case that the affidavit of B.C. Baid has been obtained in this proceeding solely with the purpose of fixing knowledge on Manick Chandra Damani. According to B.C. Baid's affidavit affirmed on 21st of November, 1978 B.C. Baid has stated that he mentioned to Manick Chand Damani about the agreement with Shekhar Chandra Law. B.C. Baid acted as an agent on behalf of Shekhar Chandra Law, as such he is not only an interested party but he is interested to put through the agreement to serve his own purpose; as such no reliance should be placed on such affidavit. So the point of Manick Chand Damani having knowledge of the first purported agreementshould not be believed by this Court. Save and except the said affidavit of Mr. B.C. Baid there is no other scrap of document or other evidence to corroborate or fix the knowledge on Manick Chand Damani of the first agreement between the plaintiff and the defendant No. 1. Secondly Mr. Sen submitted that there is no concluded agreement by and between the plaintiff and the defendant. From the nature of the offer as contained in the letter dated 13th of Nov. 1978 it would appear that the terms as set out in the said offer have not been clearly and unequivocally accepted by the plaintiff by its letter dated 15th of Nov. 1978. Moreover from the letter of 15lh of Nov. 1978 it would appear specially from the second paragraph of the said letter that the plaintiff had set out three additional conditions to be fulfilled by the defendant, Shekhar Chandra Law as such the said letter amounts to a counter offer only and not acceptance of the offer given by Shekhar Chandra Law. In the said letter the plaintiff has insisted that the defendant No. 1 must intimate the details of the payment of Rs. 4,00,000.00 to be made to the Income-tax Department and the plaintiff was only willing to pay a sum of rupees 4,00,000.00 to the Income-tax Department simultaneously with the completion of inspection of title deeds and other formalities being observed. The defendant No. 1 was also requested to make available the relevant documents and papers to the Solicitors of the plaintiff for their inspection and examination. It would appear from the said letter that the name of the Solicitor was not disclosed nor the formalities as asked for in the said letter were specified. The defendant No. 1 was also requested to render all possible assistance to the Solicitors of the plaintiff but does not show that, the relevant paper or documents were required to be produced as quickly as possible without giving any details or particulars of the Solicitors to whom such particulars were to be given. After writing the said letter on the 15th of Nov. 1978 the plaintiff did not take any other step save and except on 1st of Dec. 1978 whereby the plaintiff wrote a letter to M/s. T. Banerjee and Company offering their readiness and willingness to complete the deal. It is the plaintiff's case that the two representatives of the plaintiff met the Income-tax Officer in the income-tax office and asked for particulars andchallans to be issued while Shekhar Chandra Law was waiting outside the said office. It is the case of Shekhar Chandra Law that he never went to the Income-tax Office with the plaintiff's representative but it is his case that as because the plaintiff's representative went to the Income-tax office and wanted to pay Rs. 2,00,000.00 at the first instance and wanted to create a charge on the property for the balance amount that proposal was not accepted; on the contrary by a letter dated 17th/20th Nov. 1978 the Income-tax Officer threatened to take immediate possession by attachment of his property both move-able and immoveable. As Shekhar Chandra Law was being oppressed and pressurised by the Income-tax Authorities for payment of the statutory dues to the tune of Rs. 13,00,000.00; in default whereof his property was going to be put up for sale, he had no alternative but to agree to give a lease in favour of a party who was willing to pay forthwith a sum of Rs. 4,00,000.00 and in fact made out a cheque in favour of the Income-tax Authorities for a sum of Rs. 4,00,000.00 which has been paid to tax department in order to stay their hands. Save and except sending a cheque for Rs. 50,000.00, according to defendant No. 1, the plaintiff did not take any other step; on the contrary they wanted to bargain with the Income-tax Authorities regarding payment of Rs. 4,00,000.00 as offered in the letter dated 13th of Nov. 1978.

9. Mr. Somnath Chatterjee appeared on behalf of Shekhar Chandra Law and submitted that for the sake of balance of convenience and for interest of justice no order should be passed on that application because his client is under an obligation to meet the statutory dues immediately; as such he made an offer to the intending lessee that a sum of Rs. 4,00,000.00 should be paid immediately for the purpose of staying the hands of the Income-tax Authorities so that his client's valuable property can be saved from a distress sale. The plaintiff did not pay the sum of Rs. 4,00,000.00 nor did the plaintiff show readiness and willingness to perform his part of the agreement within a reasonable time as such his client, Shekhar Chandra Law has entered into an agreement with Manick Chand Damani who has promptly paid a sum of Rs. 4,00,000.00 and has been given possession of the suit property on1st of Dec. 1978. There is a memorandum of agreement between Manick Chandra Damani and Shekhar Chandra Law dated 24th of Nov. 1978. He has parted with the possession of the property. Moreover he is due to receive a sum of Rs. 5,00,000.00 from Manick Chand Damani for the purpose of paying towards the income-tax dues to the tune of Rs. 13,00,000.00. His client is in a predicament as he has already parted with the possession of his property but has not received the full consideration money. Moreover under the agreement he is entitled to get a sum of Rs. 8,000/-per month from Manick Chand Damani. If any order of injunction is passed he will be restrained from receiving payment of a balance of Rs. 5,00,000.00 and also Manick Chand Damani would not pay Rs. 8.000/- per month to defendant No. 1. There is a statutory liability for Shekhar Chandra Law to pay Rs. 8,00,000.00 with interest. If there is ah injunction passed restraining Manick Chand Damani from making any other payment in that event his client will suffer irreparable loss and injury not only by way of payment of Rs. 8,00,000.00 towards statutory dues but also the liability to pay interest that would mount day by day; as such for the sake of balance of convenience no order should be passed on this application specially keeping in view of the fact that there is no concluded agreement by and between the plaintiff and Shekhar Chandra Law. Even assuming at the time of the trial of the suit it is held that there is a valid and binding agreement bv and between the plaintiff and the defendant, Shekhar Chandra Law, the plaintiff's claim can be compensated to by way of damages; as such no order should be passed on this application.

10. Mr. Chatterjee submitted that in this case time was of essence of the contract. Save and except writing a letter dated 15th of Nov., 1978 the plaintiff kept a complete silence over the matter till 1st of Dec., 1978. That would only indicate that the plaintiff was not ready and willing specially with the money that it was required to pay under the said agreement.

11. So far the agreement by and between the plaintiff and the defendant No. 1 is concerned it is difficult to accept the statements contained in the affidavit of B.C. Baid as the statements contained therein are not free from doubtand are highly improbable. From the facts as disclosed in the affidavit it is not clear whether the plaintiff was ready and willing to pay a sum of Rs. 4,00,000.00 immediately to the Income-tax Authorities. The case made out is that only because challans have not been issued as such plaintiff was prevented from depositing with the Income-tax Authorities is difficult to accept in view of the fact that the plaintiff could have by letter asked for such particulars and intimated T. Banerjee and Company about their readiness and willingness to pay a sum of Rs. 4,00,000/- towards income-tax dues.

12. From the report of Mr. N. D. Roy it would appear that Manick Chand Damani is already in possession of the suit premises long before the present suit has been filed and this application has been taken out. The only evidence of fixing knowledge on Manick Chand Damani of the agreement with Shekhar Chandra Law is to be found in the affidavit of B.C. Baid which is not free from doubt. The possession of the suit premises having been given to Manick Chand Damani he has let out part of it to the sub-lessees and he has already undertaken extensive repair works which would appear from the report of Engineers and Surveyors. Moreover Manick Chand Damani has already parted with Rs. 6,00,000/- and monthly amount of Rs. 8,000/- to Shekhar Chandra Law. The petitioner before me has paid a sum of Rs. 50,000.00 which has been offered to be returned to the petitioner by M/s. T. Banerjee and Company. Between 15th of November and 1st Dec., 1978 the plaintiff took no constructive steps to comply with terms and conditions. What prevented the petitioner from getting the particulars of payment from M/s. T. Banerjee & Company instead of running to the Income-tax Officer of which no explanation has been given? What prevented the petitioner from writing to Shekhar Chandra Law and asking for the particulars of income-tax number, file number and challan etc. or writing a cheque for Rs. 4,00,000.00 in favour of Reserve Bank of India and handing it over to Shekhar Chandra Law who in turn could have paid the same amount after obtaining necessary challans from the Income-tax Authorities? From the letter of Income-tax Authorities dated 17th/20th of Nov., 1978 it would not appear that any attempt was made by the petitioner before them for obtainingchallans as claimed to have been done in the affidavit. On the contrary, it is the case of Shekhar Chandra Law that the petitioner went to Income-tax Authorities and agreed to pay Rs. 2,00,000.00 and wanted to pay the balance amount by creating a charge over the property. In view of the fact that the defendant No. 2, Manick Chandra Damani, has come into the picture and parted with large sum of money and in fact has taken possession of the property and partly let out the said premises to the sub-lessees and also because of that fact there is no prima facie proof that Manick Chand Damani had any knowledge whatsoever of the agreement entered into by and between the plaintiff and the defendant No. 1, there should be no order of injunction prejudicing the rights of the subsequent parties.

13. In view of the facts and circumstances of this case and considering the balance of convenience, I am of the opinion and hold that no order should be passed on this application; as such I dismiss this application with costs. All interim orders passed by me are vacated. There would be a stay of the operation of this order for one week.


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