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High Court Of Calcutta
A. K. GANGULY, , PRANAB KUMAR CHATTOPADHYAY
NATIONAL PROPERTIES LTD - Appellant
Versus
BATA INDIA LIMITED - Respondent
Suit 1614 Of 1958
Decided On : 05/02/2001
Whether the parties entered into a concluded or binding or valid agreement in respect of the premises in question, i.e., whether the parties arrived at a concluded and/or binding contract for grant of lease in respect of the said premises.
Fact of the Case:
Plaintiff (Bata Shoe Company Pvt. Ltd.) claimed that it had entered into a concluded agreement with the defendant (National Properties Ltd.) for the grant of lease in respect of four floors, namely ground, 1st, 2nd and 3rd of the premises No. 1/1, Lower Circular Road, Calcutta (hereinafter called the said premises) for a period of 25 years at a monthly rent of Rs. 42.50 per 100 sq. ft. The defendant denied the existence of a concluded agreement and contended that the negotiations were at a fluid stage and the entire matter was at a fluid stage.
Finding of the Court:
The Court held that there was no concluded contract between the parties. The Court found that the requirement of sending a draft lease for approval of the plaintiff was not merely ancillary and was an essential part of the terms and conditions of the parties. The Court also found that the date of commencement of the lease was uncertain and that the plaintiff had introduced new terms in its letter dated 25th September, 1958, which unsettled the tentative bargain if any arrived at between the parties.
Issues: 1. Whether there was a concluded contract between the parties for the grant of lease in respect of the said premises? 2. Whether the requirement of sending a draft lease for approval of the plaintiff was merely ancillary or an essential part of the terms and conditions of the parties? 3. Whether the date of commencement of the lease was certain? 4. Whether the plaintiff had introduced new terms in its letter dated 25th September, 1958, which unsettled the tentative bargain if any arrived at between the parties?
Ratio Decidendi: 1. A concluded contract requires a meeting of the minds of the parties on all essential terms of the agreement. In the instant case, the requirement of sending a draft lease for approval of the plaintiff was an essential part of the terms and conditions of the parties, and the date of commencement of the lease was uncertain. Therefore, there was no concluded contract between the parties. 2. The requirement of sending a draft lease for approval of the plaintiff was not merely ancillary, but was an essential part of the terms and conditions of the parties. This is evident from the fact that the plaintiff insisted on the draft lease and to examine the terms for their approval, and that no draft lease was ever prepared and the plaintiff could not approve the terms. 3. The date of commencement of the lease was uncertain. The lease was to commence floor by floor as and when each floor is completed even if lifts are not installed. This is a vague and inconclusive stipulation and does not indicate with a degree of precision the date of commencement of the lease. 4. The plaintiff introduced new terms in its letter dated 25th September, 1958, which unsettled the tentative bargain if any arrived at between the parties. The plaintiff suggested that the nature of the construction, which was going on, was not according to their requirements and that the matter is required to be 'thrashed out' before further progress in the construction may be made. This clearly suggests that the terms between the parties have not reached a final stage.
Final Decision: The suit for specific performance was dismissed. The judgment and decree passed by the learned trial Judge were set aside.
( 1 ) THIS is an appeal against the judgment and decree of a learned single Judge of this Court in a suit for specific performance of a contract. The contract was for the grant of lease in respect of four floors, namely ground, 1st, 2nd. and 3rd of the premises No. 1/1, Lower Circular Road, Calcutta (hereinafter called the said premises) for a period of 25 years at a monthly rent of Rs. 42. 50 per 100 sq. ft. , M/s. Talbot and Co. carried on negotiations between the parties with regard to the grant of lease and/or letting out of the said premises in respect of the aforesaid four floors, namely ground, 1st, 2nd and 3rd for an area of 12,500 sq. ft. approximately in each floor.
( 2 ) THE plaintiff claimed that it had entered into a concluded agreement with the owner of the said building National Properties Ltd, the appellant, herein on the basis of correspondences which were exchanged between the parties and/or with M/s. Talbot and Co. , the broker, appointed by the appellant who carried on negotiations as an agent of the appellant. The relevant correspondence were exchanged between the parties during the months of July and August, 1958.
( 3 ) ACCORDING to the plaintiff, the terms and conditions of the agreement will appear from the letters dated 31st July, 1958 and 11th August, 1958 written by Talbot and Co. to the plaintiff and a letter dated 20th August, 1958 from the plaintiff to M/s. Talbot and Co. and a letter dated 22nd August, 1958 from Talbot and Co. to the appellant/defendant herein.
( 4 ) IT is submitted on behalf of the plaintiff/respondent that in the letter dated July 31, 1958 appellant/defendant recorded the terms and conditions under which it was agreeable to lease out approximately 60,000 sq. ft. area in the said premises to the plaintiff. In the said letter it appears that the appellant herein was agreeable to let out approximately 60,000 sq. ft. of area @ rent at Rs. 42. 50 per sq. ft. per mensem. Appellant also agreed to grant a lease for a period of 25 years and the tenancy would commence floor by floor as and when each floor was to be completed even if lifts were not installed.
( 5 ) IN the said letter appellant mentioned that the offer might be placed before the Board of Directors of M/s. Bata Shoe Company Pvt. Ltd. , the plaintiff and the same will remain open for 10 days from the date. It was further mentioned in the said letter that the offer was not intended for any other party. The letter was written by the appellant to its broker/agent, M/s. Talbot and Co. M/s. Talbot and Co. again on the same day i. e. on 31st July, 1958 addressed a letter to the plaintiff intimating the terms and conditions on which the appellant was agreeable to let out the premises to the plaintiff.
( 6 ) M/s. Talbot and Co. addressed a letter to the plaintiff on 31st July, 1958 quoting from the letter of the appellant addressed to the said Talbot and Co. recording the terms and conditions under which the said appellant was agreeable to let out and/or lease out an area to the plaintiff. Thereafter, at the request of the plaintiff through M/s. Talbot and Co. appellant herein extended the time for responding to the offer of the appellant by the plaintiff.
( 7 ) ULTIMATELY, by a letter dated 20th August, 1958 plaintiff, Bata Shoe Company Pvt. Ltd. informed M/s. Talbot and Co. in respect of the acceptance of the terms and conditions of the appellant herein which was quoted in the letter dated 31st July, 1958of the Talbot and Co. with certain modifications. On the same day a director of the appellant endorsed acceptance on behalf of the appellant in respect of the modifications suggested by the plaintiff and mentioned in the said letter dated 20th August, 1958 excepting a minor change regarding expression "garage spaces" which should be read as "parking spaces". By letter dated August 22, 1958 M/s. Talbot and Co. informed the plaintiff about the aforesaid acceptance of the appellant. A copy of the
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