IN THE HIGH COURT OF CALCUTTA
Biswanath Somadder, Sankar Acharyya, JJ.
Sachchidananda Banerjee - Appellant
Versus
Moly Gupta and Others - Respondents
APD No. 1 of 2015 with C.S. No. 643 of 1990
Decided On : 21-03-2017
Transfer of Property Act, 1882 - Section 42: Deals with transfer by a person having authority to revoke a former transfer. Indian Trusts Act, 1882 - Sections 48, 77, 78: Deals with the extinguishment of trust by revocation of trust. Specific Relief Act, 1963 - Section 11(2), 20, 21: Deals with the discretion of the court to decree specific performance of a contract and the power to award compensation in certain cases.
Fact of the Case:
Plaintiff filed suit for specific performance of contract for sale of property against defendants. Defendants contended that the suit was not maintainable and that it was barred by limitation. Court observed that the property was settled in a trust by the defendant and that the plaintiff was not aware of this at the time of entering into the agreement. Court held that the agreement cannot be specifically enforced under Section 11(2) of the Specific Relief Act. Plaintiff's claim for compensation was not considered properly. Court remanded the suit to the lower court to decide the issue of compensation.
Finding of the Court:
Court analyzed the provisions of Section 42 of the Transfer of Property Act and Section 11(2) of the Specific Relief Act to determine the enforceability of the agreement for sale. Court also considered the language of the trust deed and the conduct of the parties. Court held that the agreement cannot be specifically enforced due to the existence of the trust and the reservation of the settlor's right to revoke the trust. Court also held that the plaintiff's claim for compensation should be considered by the lower court.
Ratio Decidendi: The agreement for sale cannot be specifically enforced under Section 11(2) of the Specific Relief Act due to the existence of the trust and the settlor's reservation of the right to revoke the trust. The plaintiff's claim for compensation should be considered by the lower court.
Result: The impugned judgment and decree is set aside and the suit is remanded to the lower court to decide the issue of compensation and dispose of the suit accordingly.
Being aggrieved and dissatisfied with the judgment and decree of dismissal dated 2nd December, 2014 (hereinafter referred to as the impugned judgment) passed by Hon'ble Single Judge in C.S. No. 643 of 1990, the plaintiff/appellant has preferred this appeal.
2. Plaintiff/appellant filed the suit against Karuna Gupta and her son Samir Kumar Gupta as defendants nos. 1 and 2 respectively for specific performance of contract by the said Karuna Gupta on the basis of a written agreement dated, August 13, 1988 between Karuna Gupta and the plaintiff for sale of the premises No. 12F, Nather Bagan Street, Calcutta. The said defendants filed separate written statements.
3. During pendency of the suit in the First Court, Karuna Gupta died on 5th November, 1995 and the plaintiff, upon amendment of plaint, stated that the then defendant No. 2, Samir Kumar Gupta was her sole heir and legal representative. On 7th September, 2007, the said suit was decreed ex parte in favour of the plaintiff on the belief that a fresh notice as per the direction of the Court was given to the said defendant Samir Kumar Gupta but none turned up on behalf of the defendant. The plaintiff, as decree-holder, filed an execution case and that execution proceeding being No. G.A. 515 of 2008 was disposed of on 11.03.2008 by the Hon'ble Single Judge. Thereafter, the respondents in this appeal - as heirs and legal representatives of Samir Kumar Gupta - filed an application for setting aside the ex parte decree of suit and order of disposal passed in the execution proceeding, inter alia, on the ground, in substance, that the said decree and orders were passed against the defendant No. 2, Samir Kumar Gupta, who was declared dead by a competent Court of law on 6th June, 2007 as the said Samir Kumar Gupta was missing from 18th June, 1997 and remains missing for more than seven years continuously, which was within the knowledge of the plaintiff. The said application of the respondents was allowed on 19th December, 2011 by an Hon'ble Single Judge in G.A. No. 1400 of 2010. The ex parte decree and the order passed in the execution proceeding were set aside. Plaintiff/appellant filed an appeal, being No. APOT 344 of 2012 before a coordinate Division Bench and in that appeal it was observed "......we think that the learned Trial Judge has passed the perfect order and it does not call for any interference". The said appeal was disposed of on 28th August, 2012. Thereafter, the present respondents - as heirs (wife, son and daughter) of Samir Kumar Gupta - contested the suit in the First Court and after completion of trial, the impugned judgment and decree of dismissal was passed.
4. As per pleadings of the suit, premises No. 12F, Nather Bagan Street, Calcutta (hereinafter referred to as the suit premises) belonged to Smt. Karuna Gupta. During her lifetime on November 26, 1983, she executed and registered a deed of settlement in respect of that property appointing herself and the youngest amongst her three sons, i.e. Samir Kumar Gupta, as trustees, reserving her right to revoke the trust by a deed along with some other rights exercisable during her lifetime. Thereafter, on 13th August, 1988 she executed a memorandum of agreement for sale of the suit premises to the plaintiff upon receiving a sum of Rs. 80,000/- from plaintiff as earnest money out of consideration money of Rs. 3,80,000/-. Subsequently, Karuna Gupta received an additional sum of Rs. 5000/- from the plaintiff. Post execution of the deed of agreement, an exchange of letters began between the lawyers of the plaintiff and that of Karuna Gupta. Subsequently, there was also an exchange of letters between the lawyers on behalf of the plaintiff and Samir Kumar Gupta.
5. As per the plaintiff's case, learned advocate for the plaintiff came to learn first about the deed of settlement dated, 26th November, 1983 from a letter dated 29th August, 1988 forwarding copies of documents including the deed of settlement, which was sent
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