HIGH COURT OF ORISSA
R. L. Narasimham, C. J. And S. Barman, J.
GOLAB RAY - Appellant
Versus
MURALIDHAR MODI - Respondent
First Appeal 60 Of 1961
Decided On : DECEMBER 24, 1963
SPECIFIC PERFORMANCE - CONTRACT FOR SALE OF LEASEHOLD PROPERTY - CONSENT OF LESSOR REQUIRED - LESSOR REFUSING CONSENT - WHETHER SPECIFIC PERFORMANCE CAN BE DECREED - REMEDY OF PURCHASER.
Fact of the Case:
Plaintiff and defendant No. 1 entered into a contract for the sale of leasehold property. The contract was subject to the consent of the lessor, the Khasmahal Officer. The Khasmahal Officer refused to give his consent to the sale. The plaintiff filed a suit for specific performance of the contract.
Finding of the Court:
The court held that specific performance of the contract could not be decreed. The Khasmahal Officer's consent was necessary for the sale, and he had refused to give it. The court also held that the plaintiff was not entitled to damages from defendants 2 and 3, who had purchased the property from defendant No. 1.
Issues: 1. Whether specific performance of the contract could be decreed. 2. Whether the plaintiff was entitled to damages from defendants 2 and 3.
Ratio Decidendi: 1. Specific performance of a contract for the sale of leasehold property cannot be decreed if the consent of the lessor is required and the lessor refuses to give his consent. 2. A purchaser who is unable to obtain specific performance of a contract for the sale of leasehold property is not entitled to damages from a third party who has purchased the property from the vendor.
Final Decision: The suit was dismissed as against defendants 2 and 3. The appeal was allowed to that extent with costs throughout. A new issue was framed for trial between the plaintiff and defendant No. 1 on the question of damages.
NARASIMHAM, C. J.
( 1 ) THIS is an appeal by defendants 1 and 2 against the judgment of the Second additional Subordinate Judge, Cuttack, decreeing the plaintiff's suit for specific performance.
( 2 ) THE property involved in this litigation consists of valuable house property in the heart of Cuttack town which originally belonged to defendant No. 1 Shri Nikunja kishore Das. The plaintiff alleged that on 14-8-1957 defendant No. 1 entered into a binding contract with him to sell the property for Rs. 38,000/- but as the Khasmahal is the landlord of the site, it was further agreed between the parties that a deed of contract would also be executed and duly registered, by defendant No. 1 with a view to facilitate the obtaining of permission from the Khasmahal for the transfer of the property in favour of the plaintiff.
( 3 ) BUT according to the plaintiff the agreement, between the parties that a deed of contract would be executed later on did not in any way defraet from the finality of the contract entered into between the parties on 14-8-1957. In pursuance of the contract, stamp paper for Rs. 1. 8. 0, was purchased and the help of the Advocate for defendant No. 1 named Sri S. N. Dasgupta, P. W. 4 was taken, and a deed of agreement was formally scribed on 15-8-1957 on the stamp paper, after preparing 2 draft deeds (Exts 9 and 10 ). Defendant No. 1 then took the stamped deed of agreement and also received a sum of Rs. 100. 00 from the plaintiff saying that he would obtain the written consent of his divided brothers (defdts. 4 and 5) to the sale of the property. Subsequently defendant No. 1 was said to have resiled from the contract and to have entered into a binding agreement with the defendants 2. and 3 for the sale of the same property to them for Rs. 40,000/ -. This contract between defendant I on the one hand and the defendants 2 and 3 was finalised on 22-8-57 and registered on 23-8-1957 and a sum of Rs. 10,000/- was also paid to defendant No. I in the presence of the Sub-Registrar. On coming to know about this the plaintiff sent a telegram to defendants 2 and 3 (Ex. 18) on 22-8-57 intimating to them about the prior contract. The latter, on receipt of the same sent a counter telegram (Ex. 2/3) denying knowledge of the existence of a prior contract with the plaintiff. The plaintiff also gave a lawyer's notice to defendant no. 1 on 23-8-1957 calling' upon him to fulfil his part of the contract, but his efforts were of no avail.
( 4 ) THEREAFTER, defendant No. 1 on 24-8-1957 applied to the Khasmahal Officer cuttack (See Ext. R) for permission to sell the property to defendants 2 and 3 for rs. 40,0007. The Khasmahal Officer started a Miscellaneous Case No. 201 of 1957-1958 on the basis of this application, and got the usual notices published. The plaintiff then filed an objection on 8-9-57 (Ex. R. I) before the said officer pointing out the earlier contract between him and deft, 1 and requesting him to refuse permission to defendant No. 1 to sell the property to defendants 2 and 3 and to grant permission to sell the property to himself (plaintiff ). On 13-9-1957 the Khasmahal Officer heard both parties (Ext. 8) and passed an order giving permission to defendant No. 1 to sell the property to defendants 2 and 3. As regards the objection raised by the plaintiff, his order was to the following effect :
"the applicant wants to transfer the entire holding. The objector objects on the ground that the has entered into a contract with the applicant to purchase the property for Rs. 38,000/ -. The applicant wants to sell the property to one Golabrai and Madumal for Rs. 4o,000/- The proposed transferee, along with the objector, were co- sharer tenants, before the transfer of the holding. The applicant states that he has taken Rs. 10,000/-in advance from the proposed transferee and has contracted to sell the property to him. It is beyond the jurisdiction to decide breach of con- tract. It is also beyond the competence of this Court to compe
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