Judgement

Appeal (No. 44 of 1943) from a judgment and decree of the High Court (September 3, 1940), which reversed a judgment and decree of the First Class Subordinate Judge of Dhulia (October 31, 1938).

The question to be determined in this appeal was whether there was a concluded contract made between the appellant and the first respondent company for the sale by the latter to the former of one of its pressing and ginning factories at Dhulia. The case for the appellant was that the agreement was finally concluded in Bombay on July 7, 1936, when as the result of a conversation between one Nandurdikar, a broker acting for the appellant, and Sir Shapurji Billimoria, one of the liquidators of the respondent company, and a further conversation between Nandurdikar and the companys solicitor, Manekshaw, the terms of the bargain were all settled and a draft agreement containing those terms was drawn up, which was engrossed on the following morning. Neither the draft agreement nor the engrossment was signed by either party, and after several more meetings between Nandurdikar and Manekshaw, the latter, acting under instructions from Sir Shapurji, declined to proceed further and said that the negotiations were at an end. On August 29, 1936, the appellant filed the present suit, claiming, inter alia, specific performance of an agreement in the terms of the draft agree ment and the engrossment thereof. The case for the respondents, on the merits, was that there was no concluded agreement and that the matter never went beyond the stage of negotiations. In the alternative, they said that if there had been a concluded agreement it had been re-opened by the appellant.

The facts appear more fully from the judgment of the Judicial Committee.

The trial court decreed the suit in favour of the appellant, holding that there had been a concluded agreement between the parties, and that it was not re-opened. On appeal the High Court (Broomfield and Divatia JJ.) in concurring judgments held against there ever having been a concluded agreement, and they allowed the appeal and dismissed the suit.

1946. Feb. 5, 6. Sir Thomas Strangman K.C., Khambatta and Jayakar for the appellant. After settling the main terms with Nandurdikar, Sir Shapurji left the completion of the terms to be settled between the companys solicitors and Nandurdikar, and they were so settled on the evening of July 7, 1936, in the form of the draft agreement then drawn up and subsequently engrossed. The onus of establishing that they had no notice of the agreement between the company and the appellant when they paid earnest money on July 13, 1936, in respect of their purchase of the same factory was on the companys co-respondents, and not only was such onus not discharged, but it was affirmatively established that they had such notice. The appellant brought the suit for specific performance of an agreement in the terms of the draft; there is no Statute of Frauds or any other law in British India which requires an agreement such as this to be in writing. The points for the defence- were (a) that the broker never agreed in terms of the draft, and (6) if he did, then he wanted to change the terms and negotiations were re-opened and never resulted in agreement. The trial court, on the oral and documentary evidence, held against both defences. In the memorandum of appeal to the High Court the defence put forward the contention that there was no concluded agreement because the parties contemplated a signed agreement, and none was signed, and the High Court erroneously, it is submitted, gave effect to that plea, although it was never pleaded, it did not form the subject of an issue, the evidence was never directed to it, nor did the evidence support it, and it was

Law Rep. 73 Ind. App. 98 ( 1945- 1946) Shankarlal Narayandas Mundade v. New Mofussil Co. Limited 37

not argued in the trial court because it is not referred to in its judgment. The execution of a formal agreement was not a condition o