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Protap Chandra Koyal Vs. Kali Charan Acharjya and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberA.F.A.D. No. 2023 of 1947
Judge
Reported inAIR1952Cal32,55CWN557
ActsContract Act, 1872 - Sections 3, 4 and 55; ; Specific Relief Act, 1877 - Section 22
AppellantProtap Chandra Koyal
RespondentKali Charan Acharjya and anr.
Appellant AdvocateAbinash Chandra Ghose and ; Chandidas Roy Choudhury, Advs.
Respondent AdvocateApurba Charan Mukherjee and ; Kshetra Mohan Chaterjee, Advs. (for No. 1) and ; Provash Chandra Basu, Adv. (for No. 2)
DispositionAppeal allowed
Cases ReferredNicholson v. Smith
Excerpt:
- .....exercising the right which was created in his favour by the contract was conveyed by the pleader's letter dated the 9th april, 1942, and on the authorities above-mentioned it must be held that exercise of the option was effective from the date when it was posted which was before the end of chaitra, 1348, b.s., and not from the date when the letter was received by the defendant after the expiry of the month of ohaitra 1348, b.s.16. mr. mukherjee on behalf of the respondents, however, contends that even if the letter be deemed to be effective from the date when it was posted, the plaintiff is not entitled to the relief prayed for, as he was required to deposit the amount along with the filing of the plaint, or in any view immediately thereafter when the other alternative provided in the.....
Judgment:

R.P. Mookerjee, J.

1. This is a plaintiff's appeal and arises out of a suit for specific performance of a contract of reconveyance in respect of the property described in the plaint.

2. On the 23rd April, 1937, the plaintiff executed in favour of defendant No. 1 a conveyance in respect of the property in suit for a consideration of Rs. 300/- On the same date an agreement was executed as between the parties under which defendant No. 1 agreed to reconvey the self same property in favour of the plaintiff. It was stipulated that if Rs. 300/- be paid in one instalment within the month of Chaitra before the expiry of the Bengali year 1348, the contract would be specifically enforced.

3. The plaintiff came to Court with the story that he had offered to make the payment on the 7th Palgoon, 1348, B.S., but that the defendant had refused to accept the same. On the 9th April, following, i.e., before the end of Chaitra 1348, B.S., the plff. served a registered letter upon defendant No. 1 through a lawyer but in spite of the same defendant No. 1 had failed and neglected to receive the amount, or to execute the deed of reconveyance. During the cadastral survey operations, defendant No. 2 is alleged to have wrongly and fraudulently got himself recorded as an under-raiyat under defendant No. 1. The plaintiff claims that he is entitled to get reconveyance from defendant No. 1 of the property in suit in the same condition as it was when it was sold to defendant No. 1 and the agreement was executed.

4. Separate defences were filed by the two defendants. Defendant No. 2 contends that he was the tenant in respect of the property in suit from a date even before the plaintiff had sold the land in suit to defendant No. 1. He claims to be a bona fide tenant from at least 1932. Defendant No. 1 contests the plff's. claim for specific performance on the ground that there was no tender of money to him within the stipulated date and as time was the essence of the contract the plaintiff is not entitled to get any reconveyance. It is further contended that the plaintiff was not either ready or capable of fulfilling the conditions imposed under the contract. The tenancy right as claimed by defendant No. 2 is supported by. defendant No. 1.

5. The learned Munsiff dismissed the plaintiff's suit on a finding that there was no sufficient tender to defendant No. 1 and that time was the essence of the contract; and that no payment had been made within the stipulated date.

6. On appeal by the plaintiff, this decision has been affirmed by the learned Subordinate Judge.

7. On behalf of the appellant, it is argued in the first place, that on a proper interpretation of the contract it ought to have been held that time was not the essence of the contract. Secondly, even on the finding that the verbal tender, alleged by the plaintiff as having been made on the 7th Pal-goon, 1348, B.S., had not been proved, it would to have been held that the Pleader's letter sent to defendant No. 1 on the 9th April, 1942, was sufficient in law.

8. In support of the first point reference may be made to the terms contained in the deed of agreement, dated the 23rd April, 1937, which provided, inter alia that if the entire amount, namely, Rs. 318/- were paid in any year in one instalment before the end of the year 1348, B.S., the defendant would be bound to give up possession of the land in suit. If the defendant does not readily give up possession the plaintiff would be entitled to file a suit in competent Court, deposit the amount in question and get a conveyance executed. It is further provided that if within the due date mentioned, namely, the end of Chaitra, 1348, B.S., the amount in question be not paid, the defendant would not be bound to give up possession of the land and all the rights created under the agreement would come to an end.

9. If there be no legal bar to time being the essence of the contract in the case of a contract for reconveyance, there are clear indications in the terms contained in the agreement which unmistakably show that the parties intended that if the plff. did not take active steps in pursuance of the agreement before the end of Chaitra 134.8, B.S., the rights which had been created under the agreement in favour of the plaintiff would come to an end.

10. On behalf of the respondents, reliance was placed upon the decision in the case of 'Samarpuri Chettiar v. Sudarsana Achariar', 42 Mad 802, in support of the proposition that the doctrine that time may not be the essence of the contract which arises on the construction of contracts for sale of immoveable property is not applicable to contracts for re-sale of property conveyed. This proposition is supported by 'Joy v. Birch', (1836) 7 E R 22: 10 Bligh (NS) 201, and 'Dibbins v. Dibbins', (1896) 2 Ch 348.' There is no reason why the principle should not be accepted as applicable on the facts of the present case. It has, therefore, to be held that time was the essence of the contract in the present case.

11. In view of the present state of the law, there is no room for argument that the transaction between the parties as effected on the 23rd April, 1937, was not in the nature of a mortgage.

12. The next question which arises for consideration is whether the plaintiff had within the time stipulated exercised his rights as required under the contract. It has been found by the Court of appeal below that the alleged offer in Falgoon 1348 B.S., having been made by the plaintiff to the defendant and refused by the latter had not been proved. It has, however, been found that the letter sent by the plaintiff's lawyer on the 9th April 1942, was actually received by the defendant. The learned Subordinate Judge held that the receipt of the letter on the 18th April, 1942, was not a sufficient compliance with the terms of the contract as the date on which it was received was after the expiry of the month of Chaitra.

13. Mr. Mukherjee on behalf of the defendant respondents argues that the legal effect of the letter in question is to be considered with reference to the date when it was received by defendant No. 1. It may, however, now be taken as settled law that unless the offerer expressly or impliedly directs to the contrary an acceptance by letter is admissible. Lord Harschell in the case of 'Henthron v. Praser', (1892) 2 Ch 27 at p. 32, observes:

'Where the circumstances are such that it must have been within the contemplation of the parties that according to the ordinary usage of mankind the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as it is posted.'

14. As pointed out by Lord Harschell, the effective date on which the option of acceptance is exercised by. a party is to be ascertained from the date when the acceptance is put in transmission and the letter is posted. Mr. Mukherjee, however, contends that the contract in question in the present suit did not envisage acceptance by post. The provision is that the payment is to be made by the plaintiff to the defendant. Had there been any specific provision in this contract that payment is to be made to the defendant personally and that sending the intimation of the acceptance of the offer was not to be effected through post, only then could it have been contended that the posting of the letter of acceptance was not effectual. We shall consider later on as to the legal implication of the other alternative provided in the contract when payment is not received by the defendant within the due date. The observations by Lord Herschell, referred to above, were considered by Parwell, J., in the case of 'Bruner v. Moore', (1904), 1 Ch 305. In this case, however, the Court went further and came to the conclusion that the circumstances showed that the parties must have contemplated that the post might be used as a means of communicating all steps connected with the contract. In the present case, we cannot say that the circumstances contemplated by the parties at the time when the contract was executed was that the post might be used as a means of communication. But as observed in the case of 'Henthorn v. Praser', (1892) 2 Ch 27, the earlier decision in the case of 'Dunlop v. Higgins', (1848) 1 H L C 381, cannot be interpreted to mean that an implied authority to send the acceptance by post must be proved before the Court can accept the contention that on posting of the acceptance the contract was completed. There is a fundamental difference between the circumstances where the date from which an offer is effective and when a withdrawal of an offer comes into operation. As was pointed out in the case of 'Henthorn v. Fraser', (1892) 2 Ch 27, as also in the case of 'Brunner v. Moore', (1904-1 Ch 305), in the case of an acceptance of an offer the test to be applied is somewhat different.

15. In the present case the letter sent by the lawyer on behalf of the plaintiff on the 9th April, 1942, was in the nature of an acceptance of an offer or exercise of an option which had been made by the agreement some years before. Intimation that the plaintiff was exercising the right which was created in his favour by the contract was conveyed by the Pleader's letter dated the 9th April, 1942, and on the authorities above-mentioned it must be held that exercise of the option was effective from the date when it was posted which was before the end of chaitra, 1348, B.S., and not from the date when the letter was received by the defendant after the expiry of the month of Ohaitra 1348, B.S.

16. Mr. Mukherjee on behalf of the respondents, however, contends that even if the letter be deemed to be effective from the date when it was posted, the plaintiff is not entitled to the relief prayed for, as he was required to deposit the amount along with the filing of the plaint, or in any view immediately thereafter when the other alternative provided in the contract was availed of by him. The contract between the parties was to this effect that within a particular date the plaintiff must exercise his option and that he must be ready to pay the amount which he was required to do. If on such offer the defendant did not make over possession, or execute the conveyance, the plaintiff would be entitled to get a conveyance executed on depositing the amount in the competent Court. In the case of a conveyance, the consideration is payable ordinarily only when it is executed, or at the time when it is registered, if it is compulsorily registerable. The terms contained in this agreement are liable to the interpretation as put by Mr. Mukherjee that the amount is to be deposited in Court. Is that deposit to be made along with the filing of the plaint, or is it to be done before the conveyance is actually executed

17. Reference may in this connection be made to the case of 'Nicholson v. Smith', (1882) 22 Ch D 640. In that case a lease of household property was granted in the year 1818 to the trustees of an Insurance Company for 21 years at a rent of 100/-with a covenant that the lessor and his assignees would, from time to time and at any time before the expiration of the term and also before the expiration of every succeeding term to be granted by every future or renewed lease, whenever required by the lessees or the persons interested in the term or in the succeeding terms and upon payment of a premium of one thousand pounds, grant a renewed lease for 21 years. In every such renewed lease, there would be a similar covenant for renewal at or before the end of every 21 years, subject to such conditions for renewal as in the original lease. There had been two renewals in 1839 and 1860. This lease was due to expire on the 24th June, 1881. On the 23rd June, the persons holding the interest of the original lessor gave notice to the secretary of the trustees who were interested in the leasehold property that the lease would expire on the following day. The latter answered immediately that the Directors of the Company would of course renew the lease. The renewal was subsequently refused and one of the grounds on which such refusal of renewal had been made was that the premium which was required to be paid had not been offered and in any view such payment had not been made when the suit for specific performance was filed by the representatives of the lessee. The Court held, that it was not necessary for the lessees to pay the premium of one thousand pounds, or to execute a new lease before the expiration of the term, but that it was necessary that notice of an intention to renew should be given before the end of the term. The intimation sent by the Secretary to the Trustees was deemed to be sufficient in law. The Court in spite of specific provision in the agreement held that the trustees of the fund were entitled to a renewal of this lease on 1,000/- being paid on the execution of the lease and the lessor was entitled to the interest from the date of the renewal to the date of payment.

18. In the present case also there is no specific provision in the agreement that the payment is to be made along with the filing of the plaint. The purchaser is to make payment when the conveyance is executed and the clause in the agreement specifically provides that the conveyance would be executed through the Court only on the amount being deposited. Such amount being deposited will entitle the plaintiff to a conveyance being executed and. as I have stated already, the plaintiff must also: be ready to pay the interest on the amount from the date when such payment became due to the date of payment.

19. This appeal accordingly succeeds; the judgments and decrees of the Courts below are set aside and the plaintiff's suit is decreed against defendant No. 1.

20. The plaintiff must deposit Rs. 316/- in the trial Court within four weeks from this date together with interest at six per cent, per annum, from the 1st Baisakh, 1349, B. S., up to the date of deposit to the credit of defendant No. 1. The plaintiff must also deposit in the trial Court the requisite amount for purchasing stamp papers for the execution of the conveyance on the basis of Rs. 318/- being the consideration for the conveyance. The plaintiff will bear other incidental costs when the conveyance is executed by defendant No. 1.

21. On such deposit of Rs. 316/- in the interest as directed above being made, defendant No. 1 is to execute a conveyance in favour of the plaintiff within four weeks of such deposit.

22. If the conveyance is not executed by defendant No. 1 within the date above-mentioned, it will be open to the plaintiff to have a conveyance executed by the Court at the cost of the plaintiff and to have it registered.

23. If the deposit is not made within the date mentioned, this suit will stand dismissed with costs.

24. If the deposit of Rs. 316/- with interest as directed above is made by the plaintiff within the date fixed above, the plaintiff will be entitled to the costs of the trial Court.

25. If the deposit is not made by the plaintiff, defendant No. 1 will be entitled to the costs of the trial Court, as also of this Court.

26. So far as defendant No. 2 is concerned, the trial Court had dismissed the plaintiff's claim against defendant No. 2 on the finding that defendant No. 2 had been on the land as a tenant from before the agreement. The claim against defendant No. 2 will stand dismissed in this Court. There will be no order for costs so far as defendant No. 2 is concerned.


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