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IN THE HIGH COURT AT CALCUTTA
Bhaskar Bhattacharya & Rudrendra Nath Banerjee, JJ.
Kanchilal Paul
Vs.
Sasthi Charan Banerjee & Ors.
F.A. No.282 of 2006, C.O.T. No.2304 of 2005
Decided on : 5th December, 2008
SPECIFIC PERFORMANCE OF CONTRACT - INSUFFICIENTLY STAMPED PAPER - AGREEMENT FOR SALE - VALIDITY - BONA FIDE PURCHASERS FOR VALUE WITHOUT NOTICE - SECTION 14(3)(C) OF THE SPECIFIC RELIEF ACT - APPLICABILITY - STAMP ACT (WEST BENGAL AMENDMENT) - RELEVANT PROVISIONS.
Fact of the Case:
Plaintiff filed a suit for specific performance of a contract for sale of property against the defendant no. 1. The defendant nos. 2 and 3, subsequent purchasers, filed a cross-objection disputing the findings of the learned Trial Judge on all other issues decided in favor of the plaintiff. The trial court dismissed the suit on the sole ground that the agreement for sale was written on insufficiently stamped paper.
Finding of the Court:
The court held that the mere fact that a document is insufficiently stamped is not a ground for discarding the same while considering the merit of a suit if the party who produces such documents pays the deficit stamp duty as well as the penalty that may be assessed by the Collector under the provision of the Stamp Act.
Issues: 1. Whether the learned Trial Judge was justified in dismissing the suit simply because the agreement for sale between the plaintiff and the defendant no.1 was typed on insufficiently stamped paper? 2. Whether the defendants, in this appeal filed by the plaintiff, are entitled to challenge the findings recorded by the learned Trial Judge on other issues decided in favor of the plaintiff in terms of the provisions contained in Order XLI Rule 22 of the Code even without filing any formal cross-objection? 3. Whether the Exbt.-1 was a valid agreement for sale between the plaintiff and the defendant no.1 and was enforceable under the law? 4. Whether the plaintiff was at all material time ready and willing to perform his part of the contract? 5. Whether there was really any prior agreement for sale between the defendant no.1 on the one hand and the defendant no.2 on the other, on March 10, 1999, as alleged? 6. Whether the defendant nos.2 and 3 are bona fide purchasers for value without notice of the agreement between the plaintiff and the defendant no.1? 7. Whether the suit is hit by Section 14(3) (c) of the Specific Relief Act, 1963?
Ratio Decidendi: 1. The court held that the mere fact that a document is insufficiently stamped is not a ground for discarding the same while considering the merit of a suit if the party who produces such documents pays the deficit stamp duty as well as the penalty that may be assessed by the Collector under the provision of the Stamp Act. 2. The court held that the defendants, in this appeal filed by the plaintiff, are entitled to challenge the findings recorded by the learned Trial Judge on other issues decided in favor of the plaintiff in terms of the provisions contained in Order XLI Rule 22 of the Code even without filing any formal cross-objection. 3. The court held that the Exbt.-1 was a valid agreement for sale between the plaintiff and the defendant no.1 and was enforceable under the law. 4. The court held that the plaintiff was at all material time ready and willing to perform his part of the contract. 5. The court held that there was no prior agreement for sale between the defendant no.1 on the one hand and the defendant no.2 on the other, on March 10, 1999, as alleged. 6. The court held that the defendant nos.2 and 3 are not bona fide purchasers for value without notice of the agreement between the plaintiff and the defendant no.1. 7. The court held that the suit is not hit by Section 14(3) (c) of the Specific Relief Act, 1963.
Final Decision: The court allowed the appeal and dismissed the cross-objection filed by the defendant nos. 2 and 3 by setting aside the decree passed by the learned Trial Judge and passing a decree for specific performance of the agreement for sale between the plaintiff and the defendant no.1 by directing the defendants to execute a sale deed in favor of the nominees of the plaintiffs by accepting a sum of Rs.2,90,000/- within one month from the date the plaintiff will pay the deficit stamp-duty and the penalty assessed by the Collector in terms of the provision of the Stamp Act (West Bengal Amendment) pursuant to the reference already made by the trial court.
Bhaskar Bhattacharya, J.:-
This first appeal is at the instance of a plaintiff in a suit for specific performance of contract and is directed against the judgment and decree dated 24th March, 2004 passed by the learned Civil Judge, Senior Division, First Court, Barasat, in Title Suit No.123 of 1999, thereby dismissing the suit on the sole ground that the agreement for sale was written on insufficiently stamped paper and as such, on the basis of such an agreement, no decree could be passed in favour of the plaintiff. The learned Trial Judge, however, decided all other issues in favour of the plaintiff on merit. The defendant nos. 2 and 3, the subsequent purchasers, however, have filed a cross-objection thereby disputing the findings of the learned Trial Judge on all other issues decided in favour of the plaintiff.
2. The case made out by the plaintiff may be summed up thus :
a) The suit property consists of 7 cottahs and 7 ½ chitaks of land with an old structure with the existing tenants as mentioned in the schedule of the plaint. The defendant no.1 was the owner of such property.
b) The defendant no.1, on March 29, 1999 entered into an agreement for sale of the said property at the price of Rs.3 lakh after receiving a sum of Rs.10,000/- as earnest money with the stipulations that the plaintiff would be empowered to make settlement for ejectment of the existing tenants residing in the dilapidated structure standing on the property and that he would be entitled to demolish the said building after the eviction of the tenants and divide the land underneath the structure into small plots after making common passage, drain etc. It was further agreed that the defendant no.1 would be bound to execute and register sale deeds in favour of nominees of the plaintiff and on such deeds, the plaintiff would put his signature as a confirming party. It was further agreed that the transaction should be completed within one year from the date of entering into such agreement.
c) Since the date of execution of such agreement for sale, the plaintiff made several development works and spent Rs. 2 lakh for causing the preparation of common passage, drain etc. and also made contact with the existing tenants who wanted to purchase 3 cottahs of land out of the suit property.
d) The plaintiff, pursuant to the said agreement, was in actual physical possession over the property and on repeated occasions, asked the defendant no.1 to deliver the original deed with regard to the schedule property but the defendant no.1 took time on various pretexts.
e) As the plaintiff entered into an agreement for sale with one Kanai Samanta, the existing tenant, the said person on 20th May, 1999 came to the plaintiff’s place and had shown to him a letter of attornment written by an Advocate indicating that the defendant no.1 had already transferred property in favour of the defendant nos. 2 and 3 on 3rd May, 1999. Hence the suit.
3. The suit was contested by the defendants by filing two sets of written statements, one by the defendant no.1 and the other, jointly by defendant nos.2 and 3.
4. The case made out by the defendant no.1 in his written statements may be summarized thus:
a) In the year 1998, the defendant no.1 expressed his intention to sell the suit property and started searching out suitable buyer. On 10th March, 1999 the defendant no.1 entered into an agreement for sale of the suit property with the defendant nos. 2 and 3. Thereafter, by a registered deed dated 3rd May, 1999, the defendant no.1 sold and transferred the property with tenants to defendant nos. 2 and 3 for valuable consideration and handed over possession of the same to the purchasers.
b) Thereafter, by a letter of attornment dated 18th May, 1999 the tenants were informed by defendants jointly through their learned Advocate about the transfer of ownership.
c) On 24th March, 1999 the plaintiff approached the defendant no.1 with a proposal for purchase of the said property but the defendant no.
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