2006 Supreme(Cal) 796
High Court Of Calcutta
Bhaskar Bhattacharya And Kishore Kumar Prasad, JJ.
BHAVNANI DEVELOPERS PRIVATE LIMITED - Appellant
Versus
JALAN AND COMPANY - Respondent
C. S. 14 Of 1995
Decided On : 12/15/2006
ASHIS CHAKRABORTY, MEGHAJIT MUKHERJI, RANJAN DEB GANGADEB, SOMA BISWAS
A third party cannot have any right to enforce a contract unless the third party is a beneficiary under a trust created by the contract or in the case of a family arrangement.
Headnote:
CIVIL PROCEDURE CODE, 1908 - ORDER VII, RULE 11 - Rejection of plaint - Suit for damages for breach of contract - Plaintiff not a party to the contract - No cause of action - Plaint liable to be rejected.
Fact of the Case:
Plaintiff, a solicitor firm, filed a suit against the defendant, a developer, for damages for breach of contract. The plaintiff alleged that the defendant had entered into an agreement with a third party for the development of a property and that the third party had subsequently assigned the agreement to the plaintiff. The plaintiff claimed that the defendant had agreed to get the conveniences done in favor of the prospective buyers of flats pursuant to the agreement through the plaintiff but had subsequently decided to engage a different solicitor for the purpose.
Finding of the Court:
The court held that the plaintiff did not acquire any right to claim damages for non-performance of the agreement between the defendant and the third party. The court observed that a third party cannot have any right to enforce a contract unless the third party is a beneficiary under a trust created by the contract or in the case of a family arrangement.
Issues: Whether the plaintiff had a cause of action to sue the defendant for damages for breach of contract.
Ratio Decidendi: The court held that the plaintiff did not have a cause of action to sue the defendant for damages for breach of contract because the plaintiff was not a party to the contract between the defendant and the third party. The court further held that the plaintiff could not enforce the terms of the agreement as a beneficiary because the agreement did not create a trust or a family arrangement.
Final Decision: The court allowed the appeal and set aside the order of the trial court. The court held that the plaint filed by the plaintiff was liable to be rejected as the plaintiff did not have a cause of action to sue the defendant.
( 1 ) THIS appeal is at the instance of a defendant in a suit for damages and other consequential relief and is directed against order dated July 11, 1995 passed by a learned Single Judge by which His lordship rejected an application filed by the present appellant for rejection of the plaint.
( 2 ) THE respondent before us filed a suit for recovery of Rs. 15 lakh as damages against the present appellant and another who was the defendant no. 2 on the allegation that the defendant No. 2 was the owner of the plot of land measuring about 30 cottahs situated at premises No. 5b, Judges Court road, Alipore, Calcutta and the said defendant No. 2 entered into an agreement with one S. L. Kayal and Company for development of the said property and that the said S. L. Kayal and Company with the consent of all the parties subsequently assigned the said agreement in favour of the present appellant. According to the plaintiff-respondent, in terms of the said agreement, the S. L. Kayal and Company and the defendant No. 2 agreed to get the conveniences done in favour of the prospective buyers of flats pursuant to the said agreement through the plaintiff, a solicitor firm. According to the plaintiff, the defendant No. 2 and the appellant had been getting such conveniences done by the solicitors other than the plaintiff. It was further alleged that the appellant and defendant No. 2 evinced their intention not to abide by the said agreement and had repudiated the same. The plaintiff, in effect, sought specific performance of a part of the said agreement entered into between defendant No. 2 and the said S. L. Kayal and Company and at the same time, claimed damages for breach of such agreement.
( 3 ) THE present appellant, after entering appearance in the suit, filed an application for rejection of the plaint on the ground that the averments made in the plaint did not disclose any cause of action for filing the suit against the appellant and thus, the plaint was liable to be rejected.
( 4 ) THE aforesaid application was contested by the plaintiff thereby contending that the suit filed by the plaintiff was quite maintainable and that the suit should be heard on merit.
( 5 ) THE learned Trial Judge, as pointed out earlier, by the order impugned herein, rejected the application filed by the appellant thereby holding that no case had been made out for rejection of the plaint and thus, rejected the said application.
( 6 ) BEING dissatisfied, the defendant No. 1 has come up with the present appeal.
( 7 ) MR. Deb, the learned senior Counsel, appearing on behalf of the appellant, vehemently contended before us that the learned Single Judge erred in law in holding that the plaintiff made sufficient averments in the plaint disclosing cause of action for filing the suit against the appellant. According to Mr. Deb, even if all the averments made in the plaint are taken to be true, the facts stated therein did not constitute any cause of action against the appellant for proceeding with the suit. Mr. Deb submits that undisputedly, the plaintiff was not a party to agreement between the defendant No. 2 and S. K. Kayal and Company and as such, even if in such agreement, the parties agreed that the conveniences pursuant to the agreement should be done by the plaintiff but subsequently, decided to engage a different solicitor for the purpose of execution of deeds in favour of the prospective buyers, no right accrued in favour of the plaintiff for claiming damages against the appellant or the defendant No. 2. He, therefore, prays for rejection of the plaint.
( 8 ) NONE appears on behalf of the plaintiff-respondent in spite of service.
( 9 ) AFTER hearing Mr. Deb appearing on behalf of the appellant and after going through the averments made in the plaint we agree with Mr. Deb that by virtue of the agreement between the defendant No. 2 and the predecessor-in-interest of the present appellant, the plaintiff did not acquire any right to c