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HIGH COURT OF CALCUTTA
K. C. DAS GUPTA,H. K. BOSE, JJ.
Gostho Behari Sadhukhan
Versus
Omiyo Prosad Mullick
A. F. O. D. No. 156 of 1953
Decided On : 16-06-1959
Suit for specific performance of an agreement to grant a lease of premises. Plaintiff and defendants 1 to 3 entered into correspondence which constituted an agreement for lease. Plaintiff paid Rs. 7,201/- to defendants 1 to 3 in terms of the agreement. Defendants 1 to 3 refused to grant the lease and granted a lease in favor of defendants 4, 5 and 6. Plaintiff filed a suit for specific performance of the agreement for lease, compensation in addition to or in lieu of specific performance, injunction restraining defendants 4, 5 and 6 from acting upon the agreement dated 19th April 1944 or interfering with the plaintiff's rights in respect of the said premises and other reliefs. The main defenses were that there was no concluded contract between the plaintiff and defendants 1 to 3, certain important terms were in a stage of negotiations, and during such negotiations the plaintiff refused to pay the costs of the preparation and execution of the lease of the solicitor of defendants 1 to 3, although it was the custom in Calcutta for the lessees to pay all such costs. Further the agreement was conditional upon a formal indenture of lease being prepared and executed and until that was done the agreement was not binding. Moreover, the plaintiff was not ready and willing to perform their part of the agreement and they did not make any demand for execution of the lease after 18th April 1944 and so the suit should be dismissed. The defense of the Bose defendants was that they were the lessees in respect of the premises in suit since 19th April 1944 under a registered lease for 31 years dated the 19th April 1944. They had paid Rs. 29,000/- to the Mullick defendants for the price of the unfinished structures which were standing on the land and they paid to the Mullicks a further sum of Rs. 7201/- being one year's rent as security for due performance of the terms of the lease. They had also spent about one lakh of rupees over the construction of a Cinema house on the land after obtaining the approval of the Commissioner of Police on 10th October 1944 and the sanction of the Corporation of Calcutta on 18th December 1944 and they had made arrangements for buying the machinery and other accessories to open the Cinema very soon. These defendants also claimed to be bona fide transferees for value without notice of the alleged agreement between the plaintiff and the Mullick defendants. The trial court found that there was no concluded contract between the plaintiff and the Mullick defendants, there is a custom in Calcutta for the lessees to pay the costs of preparation and execution of the lease, the plaintiff refused to pay such costs, the plaintiff was not ready and willing to perform their part of the agreement, the Bose defendants were transferees for value but not without notice of the agreement between the plaintiff and the Mullick defendants and there was no such delay or acquiescence as to bar the plaintiff's suit. On appeal, the High Court held that the absence of any express stipulation as to the date of the commencement of the lease did not prevent the agreement for lease from being a concluded agreement. The implied term of the agreement that the lessees were to pay the costs of the preparation and execution of the lease of the lessors solicitor was not an essential term of the contract and its non-performance did not disentitle the plaintiff to specific performance. The plaintiff's refusal to pay the costs of the lease did not show that they were not ready and willing to perform their part of the contract and this refusal did not debar them from enforcing specific performance of the agreement in this suit. The delay and laches on the part of the plaintiff in bringing the suit disentitled them to obtain a decree for specific performance. The Bose defendants were transferees for value without notice of the plaintiff's contract before they took the transfer. The appeal was dismissed.
Fact of the Case:
Plaintiff and defendants 1 to 3 entered into correspondence which constituted an agreement for lease. Plaintiff paid Rs. 7,201/- to defendants 1 to 3 in terms of the agreement. Defendants 1 to 3 refused to grant the lease and granted a lease in favor of defendants 4, 5 and 6. Plaintiff filed a suit for specific performance of the agreement for lease, compensation in addition to or in lieu of specific performance, injunction restraining defendants 4, 5 and 6 from acting upon the agreement dated 19th April 1944 or interfering with the plaintiff's rights in respect of the said premises and other reliefs.
Finding of the Court:
The High Court held that the absence of any express stipulation as to the date of the commencement of the lease did not prevent the agreement for lease from being a concluded agreement. The implied term of the agreement that the lessees were to pay the costs of the preparation and execution of the lease of the lessors solicitor was not an essential term of the contract and its non-performance did not disentitle the plaintiff to specific performance. The plaintiff's refusal to pay the costs of the lease did not show that they were not ready and willing to perform their part of the contract and this refusal did not debar them from enforcing specific performance of the agreement in this suit. The delay and laches on the part of the plaintiff in bringing the suit disentitled them to obtain a decree for specific performance. The Bose defendants were transferees for value without notice of the plaintiff's contract before they took the transfer.
Issues: 1. Was there a concluded contract as alleged in paragraph 2 of the plaint? 2. Was there a custom in Calcutta that a lessee pays the lessors solicitors costs for preparation and execution of the lease as alleged in paragraph 3 of the W. S. of the defendants Nos. 1 to 3. 3. Did the plaintiffs refuse to pay such costs as alleged in the said paragraph? 4. Have the plaintiffs been and still are ready and willing to perform their part of the agreement, if any? 5. To what reliefs, if any, are the plaintiffs entitled? 6. Were the Bose defendants transferees for value and without notice of the contract, if any, between the plaintiffs and the Mullick defendants? 7. Is the suit barred by delay and acquiescence? 8. Is the plaintiff entitled to any of the reliefs prayed for? 9. Was the sum of Rs. 7201/- paid in terms of the agreement mentioned in paragraph 2 of the plaint or was the said sum paid while negotiation for grant of lease was in progress? 10. Is the registration of the correspondence alleged in paragraph 4 of the plaint invalid and of no effect?
Ratio Decidendi: The absence of any express stipulation as to the date of the commencement of the lease did not prevent the agreement for lease from being a concluded agreement. The implied term of the agreement that the lessees were to pay the costs of the preparation and execution of the lease of the lessors solicitor was not an essential term of the contract and its non-performance did not disentitle the plaintiff to specific performance. The plaintiff's refusal to pay the costs of the lease did not show that they were not ready and willing to perform their part of the contract and this refusal did not debar them from enforcing specific performance of the agreement in this suit. The delay and laches on the part of the plaintiff in bringing the suit disentitled them to obtain a decree for specific performance. The Bose defendants were transferees for value without notice of the plaintiff's contract before they took the transfer.
Final Decision: Appeal dismissed.
DAS GUPTA, C. J. :- This appeal from a judgment of Bachawat, J., by which he dismissed the appellants suit for specific performance of an agreement for lease of premises No. 219, Cornwallis Street, Calcutta and gave a decree for the refund of the sum of Rs. 7,201/-from the first three defendants, raises several questions of law of which two are particularly important and interesting. One of these is the question as to how far the provisions of S. 110 of the Transfer of Property Act that if no particular date of commencement of the lease is mentioned in the document creating the lease, the date of execution of the document should be the date of commencement of the lease, can be taken into consideration in arriving at a conclusion, where an agreement for lease mentions no date of commencement of the lease, whether any date of commencement has by implication been agreed upon. The other question is : How far delay in the plaintiffs institution of the suit for specific performance will disentitle him to such relief? The plaintiffs, Gostho Behari Sadhukhan and Sarat Chandra Sadhukhan, brought the suit on the averment that there was a concluded agreement by correspondence by which Omiyo Prosad Mullick, Radha Gobinda Mullick and Shib Prosad Mullick, who will be referred to hereafter as Mullick defendants, agreed to grant them, the Sadhukhans, a lease of 219, Cornwallis Street, of which they are the owners and that though the plaintiffs have, since the date of conclusion of the agreement, always been and are still ready and willing to perform the said agreement, the Mullick defendants have failed to grant the said lease and in breach of that agreement granted a lease of the premises to Indu Bhusan Bose, Phani Bhusan Bose and Satya Bhusan Bose who were impleaded as defendants 4, 5 and 6. Satya Bhusan having died during the pendency of the suit, his heir and legal representative Rama Bose was brought on the record as defendant No. 6. These defendants 4, 5 and 6 will be referred to hereafter as the Bose defendants. The main defence of the Mullick defendants as taken in the written statement is that there was no concluded agreement to grant a lease and by correspondence only certain terms of the lease was agreed upon while "there were other equally important terms which the plaintiffs and these defendants were still discussing by correspondence and with regard to which no agreement had been reached". It was further alleged that though the "defendants proceeded with the negotiation on the assumption that the plaintiffs would, as was the custom in Calcutta, pay these defendants their solicitors costs of preparation and execution of the lease - if one was eventually agreed upon, the plaintiffs by their solicitors letter dated 29-3-1944 and 30-3-1944 respectively refused to pay such costs on the ground that there was no express agreement to pay such costs." It was further urged that "it was the intention of these defendants and the plaintiffs that they would not be bound by any agreement until a former indenture of lease was prepared and executed". The Bose defendants besides reiterating the plea that there was no concluded agreement as between the plaintiffs and the Mullick defendants to grant lease, pleaded that they were "bona fide transferees for value who paid the money and came into possession of the said premises in good faith and without any notice of the alleged agreement". The Bose defendants also took the further defence that "the plaintiffs are not entitled to any relief against these defendants on account of delay and acquiscence." Of the issues that were raised on these pleadings, we are concerned with 6 only for the purpose of appeal. These are :
1. Was there a concluded contract as alleged in paragraph 2 of the Plaint?
2. Was there a custom in Calcutta that a lessee pays the lessors solicitors costs for preparation and execution of the lease, as alleged in paragraph 3 of the written statement of the defendants 1 to 3?
3.
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