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Ambica Prosad Dass Vs. J.C. Galstaun - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in4Ind.Cas.85
AppellantAmbica Prosad Dass
RespondentJ.C. Galstaun
Cases ReferredMarshall v. Berridge
Excerpt:
evidence act (i of 1872), section 92 - oral proof of minor terms, when principal terms settled--concluded agreement--agreement to lease. - .....on the evening of may the 29th? if it is not, has the plaintiff shown, on the evidence, from what date the lease was to run?20. the first point that strikes me on this is that in the memo. of may 29th, the defendant's solicitors say that the only terms remaining to be settled are the old materials of the demolished buildings. in their letter of the 30th, stating their grounds for refusing to grant the lease, they never suggest that the term when the lease was to commence still remained to be settled. they detail what they say still remained to be settled but do not say anything about the term from which the lease was to run--nor in the subsequent letter written by the defendant's solicitors in june do they ever suggest that the defendant ever entertained the smallest doubt as to when.....
Judgment:

Francis Maclean, C.J.

1. This is a suit for the specific performance of an alleged agreement by the defendant to grant the plaintiff a lease of certain premises, known as No. 2, Chowringhee in Calcutta. The defence is that there was no concluded agreement between the parties, and that certain letters which passed between them amounted to negotiation and negotiation only. The facts lie within a very narrow compass. There is no dispute that, on the 25th of May 1906, the plaintiff and the defendant had an interview at Kidderpur about the granting of a lease by the defendant to the plaintiff and that the effect of that conversation was embodied in a letter which the defendant's solicitors wrote to the plaintiff on the 26th of May. The letters runs as follows:

Re lease of No. 2, Chowringhee Road.

Dear Sir,

With reference to the writer's interview with you last evening when it was verbally agreed between you and our client Babu Ambica Prosad Dass that a lease of the above property should be granted to you for 51 years at a monthly rent of Rs. 1,000 per mensem besides all taxes payable by landlord and tenant which should be paid by you. The principal terms of the lease being that you should build a three-storied house on its site after demolishing the old buildings at a cost of not less than rupees one lac and that you should give security to the extent of Rs. 50,000 by way of deposit of title-deeds of landed properties or in Government securities which sum our client shall be entitled to get from you as liquidated damages in case you fail to build the house in terms of your agreement on that behalf, and that, for one year from the date of execution of the lease, you would have to pay to our client the gross amount of rent he is now getting from the property and that you would have to pay all taxes and outgoing payable in respect thereof and thereafter at the rate of Rs. 1,000 per month as aforesaid. Please confirm the above agreement in writing. On receipt of your reply, our client will serve the present tenants with notices to quit as arranged. As to the plan, we are afraid, the original plan of the property given to our client's predecessor-in-title when the property was bought will not help you much in preparing a plan for submission to the Corporation for sanctioning constructions of buildings; a plan of the ground-floor should be prepared by some professional man after survey to enable your builder to draw out a plan of the buildings to be built thereon. However, we send herewith the said original plan. Kindly sign the accompanying accountable receipt.

2. The same day, the plaintiff wrote and sent to the defendant's solicitors the letter of that date which runs as follows:

Re No. 2, Chowringhee Road.

Dear Sirs,

Yours of date to hand and hereby confirm the same. Please serve the tenants with a notice to quit.

3. On the 29th of May, the defendant's solicitors wrote and sent to the plaintiff the following letter:

Dear Sir--In our letter of the 26th May giving the principal terms of the lease verbally agreed between you and our client Babu Ambica Prosad Dass in the presence of our Mr. Sen, at his residence, we find that we forgot to mention that the house to be built by you on the site of the old buildings shall after the expiration of the term of the lease become, as usual, the property of the lessor. Please send us a reply containing the above arrangement so that our client may serve the monthly tenants with notices requiring them to vacate the shop-rooms in their occupation as desired by you.

4. The vendor's solicitor appears to have thought that this was the only outstanding term. This was accepted by the purchaser, for in reply to this letter, on the same day, the plaintiff wrote and sent to the defendant's solicitors the following letter:

Dear Sir--In reply to yours of date it is agreed that the building will remain to your client after 51 years.

5. On the same day, the following memorandum was left by the defendant's solicitors at the plaintiff's residence:

I called at your office with Babu Ambica but you were out from 15 minutes before we arrived there. We came here but you were not at home. I shall serve the tenants with notice of ejectment to-morrow. The only terms that remain to be settled are the old materials of the demolished buildings. My client proposes that that should be settled to-morrow. The present rental of the property is Rs. 811 per mensem as per memo. left. Municipality has served my client with notice for some alteration and constructions of the urinal in some of the rooms. I shall write to them about the demolition. Will you please also write to the Health Officer on the subject?

P.S. Shall I draw the draft lease?

6. The solicitors would scarcely have suggested sending a draft lease if he had not thought there was a concluded agreement for it. On the 30th of May, the defendant's solicitors repudiated the alleged contract, and wrote and sent the following letter:

Re Premises No. 2, Chowringhee Road.

Dear Sir,

As you have not as yet sent any reply to the requisition submitted to you and left at your residence by our Mr. Sen last evening and the old tenants of the shop-rooms on the ground-floor of the premises have made strong representation to our client not to eject them from the premises, we are instructed to state for your information that our client is unable to accept your proposal to grant you a lease of the property for 51 years and to eject the tenants before the lease can be granted to you as was proposed by you.

7. The question is whether there was a concluded agreement between the parties, or not.

8. Now, the letter of the 26th of May from the defendant's solicitors refers to the interview of the previous evening and to the verbal agreement which was then entered into. That letter shows that there was to be a lease of the property, that it was to be for 51 years at a rent of Rs. 1,000 a month besides taxes, that a third-storied house was to be built on the site at a cost of not less than one lac of rupees, that the plaintiff was to give security for the due performance of his agreement to build the house, that the plaintiff for one year from the date of the execution of the lease was to pay the defendant a gross amount of rent he was then getting, and the plaintiff was to pay all taxes and outgoings, and thereafter at the rate of Rs. 1,000 per month. The plaintiff accepted those terms. Then it appears from the letter of the 29th of May that the defendant found that he had forgotten to mention that at the end of the term the house to be built was to become the property of the lessor. The plaintiff agreed to that. It appears from the memorandum of the 29th of May that, according to the view of the defendant, the only term then remaining to be settled was as to the old materials of the demolished buildings. Apparently, nothing had been settled about that. By the letter of the 1st of June 1906, in reply to the defendant's solicitors' letter of the 31st of May, the plaintiff offered to fall in with the views of the defendant as to the old materials of the demolished buildings. It is clear from the memo. of the 29th of May that the defendant's solicitors considered that the only outstanding term that remained to be settled was as to the old materials of the demolished buildings in respect of which the plaintiff agreed to meet the views of the defendant. It is true that in their letter of the 31st of May they suggest other points which remained open.

9. The principal objection taken for the defendant is that there was no concluded agreement as there was no agreement as to the date of the commencement of the lease, and, they rely upon the case of Marshall v. Berridge (1881) L.R. 19 Ch. Div. 283; 51 L.J. Ch. 329; 46 J.P. 279; 30 W.R. 93; 45 L.T. 559. There is no Statute of Fraud in India or anything equivalent to it: and, the contention of the plaintiff is that the letter of the 26th of May only spoke of the principal terms, and that other terms could be proved by oral evidence and there is nothing in Section 92 of the Indian Evidence Act to prevent this. As to the date of the commencement of the lease, the plaintiff says this in cross-examination: 'The defendant was to serve notices to the tenants at once. There was no reason or question raised as to when the lease was to run from, nor as to when vacant possession was to be given. The lease was to run from the time he would give me possession at Rs. 811 a month, I think, and then when the building was up, after a year, I would give Rs. 1,000 a month'. That evidence is not met in any way. It is idle to suppose that at the interview on the 25th May, the parties did not agree as to the date of the commencement of the lease. The agreement was originally, as has been pointed out, an oral agreement. The defendant wished to have that oral agreement confirmed in writing. In their letter of the 26th of May, his solicitors say: 'Please confirm the above agreement in writing'. It is treated there not as mere negotiation but as an agreement and a binding agreement between the parties. There is nothing on the correspondence to show that there was ever any difference of view as to the date of the commencement of the lease: and, that is what the plaintiff says--'there was no reason or question raised as to when the lease was to run from.' The then tenants were to be at once served with notices to quit as arranged: and the defendant's solicitors regarded the matter so absolutely concluded, as a concluded agreement and not as a mere negotiation: for, they say in the memo. of the 29th of May,--'I shall serve the tenants with notice of ejectment to-morrow'. When they say that the only term remaining to be settled was as to the old materials of the demolished buildings, the inference is irresistible that the other terms had been agreed upon, including the date of the commencement of the lease. No such point is taken in the defendant's solicitors' letter of the 31st of May 1906. In that letter, they only referred specifically to the questions of the old materials, as to the settlement of plan, and what materials were to be used for the building. There is nothing about either of the two latter points in the letter of the 26th of May 1906 from the defendant's solicitors. The letter of the defendant's solicitors of the 4th of June as to the sixty thousand rupees is disingenuous. It is clear that in the letter of Messrs. Gregory and Jones of the 1st of June 1906 the mention of the sum of Rs. 60,000 was a slip: for, the letter of the 26th of May mentioned a lac. The defendant did not give the plaintiff a reasonable time to comply with his proposition about settling about the old materials; for, on the 30th of May, the defendant's solicitors wrote and said they would have nothing more to do with the matter. But the plaintiff has met the wishes of the defendant on this point. In my opinion, that which took place between the parties proceeded beyond mere negotiations and constituted a binding agreement between them, and, for breach of that agreement, the plaintiff is entitled to damages. The plaintiff has not filed any cross-objection asking for specific performance. The appeal, therefore, must be dismissed, and, although I agree in the conclusion of the Court of first instance, I do not desire to be taken as agreeing with the reasoning which resulted in that conclusion. The appeal is dismissed with costs.

Harington, J.

10. The only question raised in this appeal is whether on the evidence there is an agreement binding the parties. The defendant contends that there was no agreement because certain terms essential to the contract remained to be settled.

11. The agreement on which the suit is brought is an agreement by the defendant to grant the plaintiff a lease of No. 2, Chowringhee Road for 51 years, the plaintiff to build a three-storied house on the demised land at a cost of one lac of rupees and to give security for the due performance of his covenant to build, the defendant to serve the tenants with notice to quit and the plaintiff to pay Rs. 811 a month rent for one year (i.e., the rent which the property was then returning) and afterwards to pay the Rs. 1,000 a month.

12. These 'principal terms' were embodied in a letter written by the defendant's solicitors on May 26th to which the plaintiff replied confirming the same. On May 29th, the defendant's solicitors again wrote stating that it was agreed that the house should at the end of the lease be the property of the lessor asking the plaintiff to confirm this 'so that our client may serve the monthly tenants with notices requiring them to vacate the shop-rooms in their occupation as desired by you.'

13. On the same date, the plaintiff replied confirming this arrangement, and on the same day, the defendant's solicitors sent a memo., dated at 7-20 p. M., which contains the passage--'I shall serve the tenants with notice of ejectment to-morrow. The only terms that remain to be settled are the old materials of the demolished buildings. My client proposes that should be settled tomorrow.'

14. On the morrow, the defendant's solicitors wrote and refused to grant the lease or to eject the tenants on the ground that no reply has been made to the requisition left at the plaintiff's office and that the tenants had asked the defendant not to eject them. The plaintiff wrote disputing the defendant's right to draw back. Whereupon, in reply, the defendant's solicitors wrote pointing out that the terms to be embodied in the lease had not been agreed to, that the question as to who would be entitled to the old materials was still unsettled--as the defendant claimed the corrugated-iron sheds and iron joists--nor had anything been settled as to the construction if the buildings and materials to be used with the sanction of the defendant.

15. To this the plaintiff's solicitors replied denying that any terms remained outstanding and saying that the defendant could take away the corrugated iron and joists which he desired.

16. Further correspondence ensued in which the plaintiff insisted that an agreement had been come to, while the defendant insisted that the matter had not proceeded beyond negotiation.

17. The principal point which has been argued here is that there is no completed contract because the date from which the lease was to run and the time within which the building was to be commenced were unsettled.

18. The oral evidence touching this is to be found in the plaintiff's deposition, who, when asked whether there was not always a provision within which the building was to be commenced, answered; and in the defendant's deposition, who says that he went to the plaintiff's house on the 29th and left a memo. because it had been arranged that he should serve notices on the tenants and he intended to do so on the 30th, so as to give them a full month's time.

19. The questions are, first, was the date from which the lease was to run, a term still remaining to be settled between the parties on the evening of May the 29th? If it is not, has the plaintiff shown, on the evidence, from what date the lease was to run?

20. The first point that strikes me on this is that in the memo. of May 29th, the defendant's solicitors say that the only terms remaining to be settled are the old materials of the demolished buildings. In their letter of the 30th, stating their grounds for refusing to grant the lease, they never suggest that the term when the lease was to commence still remained to be settled. They detail what they say still remained to be settled but do not say anything about the term from which the lease was to run--nor in the subsequent letter written by the defendant's solicitors in June do they ever suggest that the defendant ever entertained the smallest doubt as to when the lease was to begin.

21. If this term had been regarded by the defendant as still open, it is inconceivable that he should have said nothing about it.

22. The inference I draw from the fact that nothing was said about it is that the defendant had agreed, as the plaintiff says he had, that the lease should run from the time when the defendant would give the plaintiff possession of the property.

23. Next, as to the date when the defendant intended vacant possession to be given, that, I think, appears on the evidence to be a full mouth after May 30th. Not only are there references to the defendant giving notice to the tenants, but, he himself says, that he intended to serve notices on the 30th so as to 'give them' (i.e., the tenants) 'a full month's time.'

24. A full month's time, what for? It can only be to vacate the premises and if that is so, then the defendant intended that possession should be given to the plaintiff one month after May 30th and the lease should run from that date.

25. I have no doubt that the parties agreed that the lease should run from the time when vacant possession should be given and that the defendant agreed that that time should be one month after May 30th.

26. The other points may be shortly disposed of.

27. There was no question as to the old materials really in issue between the parties, as the plaintiff expressly said, the defendant might have the corrugated iron and joists he desired.

28. Then, as to the suggestion that the plan for construction of the building and materials to be used had to be settled with the sanction of the defendant, the answer is that the agreement as disclosed in the letter of May 26th does not provide that the defendant was to have any voice in the plan of the new building or in the materials to be used. The agreement was that the plaintiff should build a three-storied building at a cost of not less than a lac of rupees, there is no bargain that I can see that the defendant is to have a voice either in the selection of the material or to sanction the plan of the building to be erected. On the contrary, the last paragraph of the defendant's solicitors' letter of May 26th seems to indicate that the defendant was not himself concerned with these matters.

29. On the only other remaining question, i.e. as to the covenants in the lease, I take it that the parties only bargained for the ordinary covenants to be found in a building lease.

30. In the memo., it is stated that the only term to be settled is about the old materials. If there had been any difference as to the covenants this would not have been said.

31. I don't agree that there was any necessity for a stipulation as to the time within which the buildings should be erected. The increased rent of Rs. 1,000 a month was to begin one year after the commencement of the lease, whether the new buildings were erected or not and the plaintiff had to give security for the performance of his covenant to build. The defendant, therefore, was amply protected and it was to the plaintiff's interest to build as fast as possible.

32. For these reasons I think there was a contract binding on the parties and that, as the respondent has filed no cross-objection to the judgment awarding him damages, in lieu of a decree for specific performance, the judgment of the Court of 1st instance must be affirmed and the appeal dismissed with costs.

Fletcher, J.

33. I agree. In my opinion there was a binding agreement, and that the rights and liabilities of the parties are governed solely by the first letter, in which there was no outstanding terms either with reference to the new building or the old materials. The rights of the parties, therefore, must be governed by the terms of that letter. The subsequent agreement by the plaintiff to allow the defendant to have some of the old building materials was merely a voluntary one. That being so, I am of opinion that the first letter discloses a contract which could be enforced, and this appeal should, therefore, be dismissed with costs.


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