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1990 Supreme(All) 635

IN THE HIGH COURT OF ALLAHABAD
N. N. MITHAL, G. D. DUBEY
SATYA PRAKASH GOEL - Appellant
Versus
RAM KRISHAN MISSION - Respondents
First Appeal 38 Of 1982
Decided On : 11/08/1990

Advocates Appeared:
A.B.SARAN, K.K.MISHRA, L.P.JAITHANI, Palok Basu, R.P.GOEL, S.P.SRIVASTAVA

A contract for the sale of property is formed when there is an offer, acceptance of the offer, consideration, and a meeting of the minds on the essential terms of the contract. An acceptance of an offer that is subject to the approval of a third party is not an unqualified acceptance and does not result in a concluded contract.

Headnote:

CONTRACT - SALE OF PROPERTY - FORMATION OF CONTRACT - ESSENTIALS - ACCEPTANCE OF OFFER - SUBJECT TO APPROVAL BY ADVOCATE - NO CONCLUDED CONTRACT - LIMITATION - SUIT FOR SPECIFIC PERFORMANCE - LIMITATION PERIOD STARTS FROM THE DATE OF NOTICE OF REFUSAL TO EXECUTE SALE DEED - BONA FIDE PURCHASERS WITHOUT NOTICE - PROTECTED.

Fact of the Case:

Plaintiff-appellant claimed that he had entered into a contract with respondent No. 1 for the sale of a property and filed a suit for specific performance. The respondent denied the existence of a finalized contract and contended that the plaintiff was negotiating on behalf of an undisclosed person. The lower court dismissed the suit, holding that no contract had been finalized and that the suit was barred by limitation.

Finding of the Court:

The court found that the letter relied upon by the plaintiff as evidence of the contract was not an unqualified acceptance of the offer, but was subject to the approval of the terms by the respondent's advocate. The court also found that the plaintiff was negotiating on behalf of a third person and that the third person had not agreed to the terms of the alleged contract. The court further found that the suit was barred by limitation as the plaintiff had knowledge of the respondent's refusal to execute the sale deed more than three years before filing the suit.

Issues: 1. Whether a concluded contract for the sale of property existed between the plaintiff and respondent No. 1. 2. Whether the suit was barred by limitation.

Ratio Decidendi: 1. A contract for the sale of property is formed when there is an offer, acceptance of the offer, consideration, and a meeting of the minds on the essential terms of the contract. In this case, the letter relied upon by the plaintiff as evidence of the contract was not an unqualified acceptance of the offer, but was subject to the approval of the terms by the respondent's advocate. Therefore, there was no concluded contract between the parties. 2. The limitation period for a suit for specific performance of a contract for the sale of property is three years from the date fixed for the performance of the contract or, if no such date is fixed, from the date the plaintiff has notice that performance has been refused. In this case, the plaintiff had knowledge of the respondent's refusal to execute the sale deed more than three years before filing the suit. Therefore, the suit was barred by limitation.

Final Decision: The appeal was dismissed with costs to the respondents.

G. D. DUBE, J.

( 1 ) THE plaintiff has preferred this appeal against the judgment and decree of the Civil Judge, Dehradun dismissing the suit for specific performance of the contract entered into between the appellant and the respondent No. 1 and for possession of the property in dispute.

( 2 ) THE appellant has alleged that the respondent No. I had decided to sell the property in dispute by its resolution No. 8 dated 27-2-1975 and authorised respondent No. 2 to sell the property in dispute and entered into an agreement for the said purpose. The respondent No. 2 had met and informed the appellant in the second week of June. 1976 that he was intending to sell the property in suit. The plaintiff had, therefore, made his offer to purchase the property for Rupees 67,100/ -. The respondent No. 2 had accepted the offer of sale of the property on as it is basis with all litigation involved in the said property. It was alleged in the plaint that in this way there was concluded contract between the parties in respect of the property in dispute. The plaintiff-appellant had gone to Sri R. K. Sinha, Advocate of respondent No. 2 to get the draft of agreement executed between the contracting parties finalised. But Sri Sinha had not finalised it. Thereafter plaintiff-appellant had written letter to respondent No. 2 to get the sale-deed executed but no reply was given to this letter. Respondents 1 and 2 had sent notice on 20-9-1976 through their Advocate Sri R. K. Sinha denying the contract for sale between the parties. Respondents 1 and 2 sent another notice through their advocate Sri R. K. Sinha to the appellant on 3-11-1976 threatening for disposing their property in suit to defendant-respondents 4 to 6. The appellant has alleged that lie was always willing to perform his part of contract,

( 3 ) RESPONDENTS 1 and 2 filed separate written statements. They denied that any contract was finalised between the parties. It was however admitted that plaintiff-appellant had made offer of Rs. 67,100. 00 to purchase the property. It was denied that appellant had gone with the draft agreement to Sri R. K. Sinha, Advocate. The respondent had contended on the other hand that when the appellant had approached Sri R. K. Sinha, Advocate he had specifically informed appellant that the agreement shall provide no warranty of title nor shall provide any warranty according to law. The plaintiff had not agreed to these terms. It was urged that as plaintiff-appellant had not agreed to purchase the property without any warranty of title and warranty as provided by law no contract had finalised between the parties. Respondents 1 and 2 admitted that the appellant was certainly informed that the respondents 1 and 2 are intending to sell the property to respondents 4 to 6. It was also alleged in paragraph 22 of the written statement that as plaintiff-appellant had negotiated on behalf of some undisclosed person had no personal interest in the agreement. He had, therefore, no right to maintain the suit for specific performance of contract.

( 4 ) RESPONDENTS 3 to 6 had filed separate written statement. They had raised almost same plea as raised by respondents 1 and2. They have also alleged that they were bona-fide purchasers believing that there was no valid contract between appellant and respondent No. 1. The plea of bar of limitation was also raised.

( 5 ) ON the pleading of the parties the lower court had framed 7 issues. The issue No. 1 relating to contract between plaintiff-appellant and defendant-respondent No. 2 was answered in the negative holding that no contract had materialised. Issue No. 2 regarding willingness and readiness of the appellant to perform his part of the contract was answered in favour of the plaintiff-appellant holding that he was willing and ready to perform his part of contract. Issue No. 3 relating to plea that the plaintiff-appellant was negotiating on behalf of undisclosed person was answered against the defendant. Issue No. 4 was whether





























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