Appellate Division :
Surendra K. Sinha J
Hasan Foez Siddique J
May 31st, 2016
Abdus Sobhan (Md)
Md Ahsanullah and
Specific Relief Act (I of 1877)
Specific performance of contract-Mere fixation of the period in the contract even when coupled with a power to treat the contract as cancelled in the event of default in performance of contract within the stipulated time is not sufficient to make the time fixed of the essence of contract. Something more is necessary to have this effect and where the determination of question depends only on the language of the stipulations. . ..... (17)
Abdul Momen Chowdhury, Advocate, instructed by Md Taufique Hossain, Advocate-on-Record-For the Appellant.
Probir Neogi, Senior Advocate, instructed by Zainul Abedin, Advocate-on-Record-For the Respondents.
Hajee Sam Meah Sowdagar vs Musanmat Al-Haj Jahanara Begum, 8 DLR 616; Kalidas Ghosh vs Mungeeram Bangur and Co, AIR 1955 Cal. 298 and Amir Hossain Sowdagar vs Md Harunur Rashid, 65 DLR (AD) 130 ref.
Syed Mahmud Hossain J : This appeal, by leave, directed against the judgment and order dated 17-5-2009 passed by the High Court Division in FA No. 249 of 2005 dismissing the appeal and affirming the judgment and decree dated 28-8-2005 passed by the learned Joint District Judge, Second Court, Chittagong in Other Suit No. 104 of 2002 decreeing the suit.
2. The facts, leading to the filing of this appeal are precised below:
Respondent No. 1 as the plaintiff instituted Other Suit No.104 of 2002 in the Second Court of Joint District Judge, Chittagong, seeking specific performance of contract and also for declaration of title. The plaintiff stated in his plaint that the suit land was owned and possessed by defendant No. 1 by way of deeds of sale dated 30-6-1992, 31-3-1999 and 10-1-1983. Defendant No. 1 being in need of money declared his intention to sell the land in first and second schedules. The plaintiff agreed to purchase the land of the first schedule for a consideration of Taka 8,80,000 and the land of the second schedule for a consideration of Taka 9,50,000, a total of Taka 18,30,000. Accordingly, defendant No.1, upon receipt of Taka 12,00,000/ by way of cheque dated 14-2-1999 executed a deed of agreement (bainapatra) for the undisputed land of the first schedule as well as the disputed land of second schedule and handed over possession of the same to the plaintiff. According to the condition of the deed of agreement, the plaintiff was to pay Taka 4,00,000 within 3 (three) months from the deed of agreement and the remaining amount of Taka 2,30,000 within 3 (three) months in respect of the second schedule land. In addition, defendant No.1 would construct a boundary wall around the second schedule land at his own cost. On 10-3-1999, defendant No. 1 registered a deed in respect of first schedule land showing consideration amount of Taka 6,00,000. On 10-4-1999 Taka 50,000 was paid for the purpose of constructing the boundary wall but after a while the construction work was stopped. On 19-5-1999 defendant No. 1 received further payment of Taka 1,00.000 by way of cheque. Thus defendant No.1 received total amount of Taka 13,00,000 and was legally bound to register the deed for the second schedule land upon payment of of Taka 5,30,000. However, subsequently, defendant No. 1 demanded further amount of Taka 2,00,000, as a result of which, a legal notice dated 10-12-2000 was sent to defendant No. 1. But he declined to receive the same. When the Attorney (Avg‡gv³vi) of the plaintiff went to the house of defendant No.1 on 1-6-2002 and asked him to register the deed upon accepting the remaining money, defendant No.1 demanded further amount of Taka 2,00,000. Finally, on 9-6-2002 when defendant No.1. refused to execute the deed, the plaintiff instituted the instant suit for specific performance of contract.
3. Defendant No.1 contested the suit by filing written statement denying all the materials statements made in the plaint. His case, in short, is that that the deed would be executed and registered upon payment of Taka 4,00,000 within 3(three) months of the deed of agreement and Taka 2,30,000 within further 3(three) months, failing which, defendant No.1 could sell the land elsewhere and the money paid would be forfeited. His further case is that since the plaintiff did not pay any money for the construction of the boundary wall, he himself partly constructed the same at his own expense. The plaintiff did not pay Taka 4,00,000 within the stipulated period and instead paid Taka 1,00,000 on 18-5-1999. Although the defendant repeatedly requested the plaintiff to pay the remaining money and to have the deed registered, the plaintiff did not pay the rest of the money. As the plaintiff was causing delay, defendant No.1 by way of legal notice to the plaintiff dated 1-6-2002 and also by way of publication of the notice in the daily newspaper on 13-6-2002 rescinded the deed of agreement. Defendant No.1 claimed that the plaintiff was in breach of condition of the deed of agreement and he denied the allegations made in the plaint including the plaintiff's claim that he had offered the remaining money to defendant No. 1.
4. The trial Court, upon consideration of the materials on record and the evidence of witnesses adduced by both the sides, by the judgment and order dated 28-8-2005 decreed the suit.
5. Being aggrieved by and dissatisfied with the impugned judgment and decree dated 28-8-2005 passed by the trial Court, defendant No.1 preferred First Appeal No.249 of 2005 before the High Court Division. The learned Judges of the High Court Division by the judgment and order dated 17-5-2009 dismissed the appeal affirming the judgment and decreed passed by the trial Court.
6. Feeling aggrieved by and dissatisfied with the judgment and order passed by the High Court Division, defendant No. 1 as the leave-petitioner filed Civil Petition for Leave to Appeal No. 1832 of 2009 before this Division, in which, leave was granted on 20-9-2011 resulting in Civil Appeal No.12 of 2012.
7. Mr Abdul Momen Chowdhury, learned Advocate, appearing on behalf of the appellant, submits that the plaintiff did not pay the balance of the agreed consideration money for the land of the 2nd schedule within the time stipulated in the deed of agreement and that the defendants sent a legal notice dated 11-6-2002 repudiating the contract and by publication of the notice in the daily newspaper on 13-6-2002 and that time being essence of the contract and the plaintiff not having fulfilled his part of the contract within the time stipulated, the contract became voidable, Accordingly, defendant No.1 rescinded the contract by sending legal notice to the plaintiff and also by publishing the same in the daily newspaper and that the High Court Division without considering those aspects dismissed the appeal and, as such, interference is called for by this Division.
8. Mr Probir Neogi, learned Senior Advocate, appearing on behalf of the respondents, on the other hand, supports the impugned judgment delivered by the High Court Division.
9. We have considered the submissions of the learned Advocate for the appellant and the learned Senior Advocate for the respondents, perused the impugned judgment and the materials on record.
10. Before entering into the merit of the appeal, it is pertinent to go through the grounds, for which, leave was granted. The grounds are quoted below:
I. Whether the trial Court failed to frame proper issues including the issue as to whether the contract subsisted or was terminated and whether such failure of the trial Court is violative of Order XIV, rule 1 of the Code of Civil Procedure.
II. Whether the trial Court and the High Court Division failed to notice that time was of the essence of the contract and that the plaintiff-respondent had failed to comply with the contractual stipulation within the given time, rendering the contract terminable and that by giving notice, the defendant petitioner rescinded the contract; and
III.Whether after the rescission of the contract, a suit for Specific Performance of Contract lies since the contract itself was terminated in accordance with the terms and conditions of the deed of agreement (bainapatra)."
11. Admittedly, the plaintiff entered into a contract with defendant No.1 to purchase the land of first schedule for a consideration of Taka 8,80,000 and the land of second schedule for a consideration of Taka 9,50,000, in total, Taka 18,30,000. On receipt of Taka 1,20,000 by way of cheque dated 14-2-1999, defendant No. 1 executed a deed of agreement for undisputed land of first schedule as well as the disputed second schedule land. As per terms of the deed of agreement, the plaintiff was required to pay Taka 4,00,000 within 3 (three) months of the date of the agreement and the remaining Taka 2,30,000 within the next following 3 (three) months in respect of the second schedule land. It was also stipulated that defendant No. 1 would construct a boundary wall around the second schedule land at his own cost.
12. On 10-3-1999, defendant No. 1 registered a deed in respect of first schedule land showing the consideration of Taka 6,00,000. The plaintiff contended that on 10-4-1999 Taka 50,000 was paid to defendant No. 1 for the purpose of constructing the boundary wall. On 19-5-1999, defendant No.1 received a further payment of Taka 1,00,000 by way of cheque. Therefore, it appears that defendant No.1 received Taka 13,00,000 and was legally bound to register the deed for the second schedule land upon payment of Taka 5,30,000. It is alleged that on 9-6-2002 when defendant No. 1 refused to execute the deed, the plaintiff instructed his attorney to file the instant suit.
13. It is of course true that the plaintiff did not pay the balance consideration of Taka 4,00,000 within the time stipulated in the deed of agreement. But it is admitted by both the parties that defendant No.1 received a cheque of Taka 1,00,000 from the plaintiff on 19-5-1999. DW 1 in his cross-examination admitted that he received a cheque dated 18-5-1999 for an amount of Taka 1,00,000 from the plaintiff. Defendant No.1 also admitted that on the date of receiving of Taka 1,00,000, the contract was in existence. There is no gainsaying the fact that defendant No.1 received Taka 1,00,000 from the plaintiff beyond the stipulated three months' time fixed for payment of Taka 4,00,000. Therefore, it could not be said that the terms of the agreement were seriously breached otherwise there could not be any ground on the part of defendant No.1 to receive Taka 1,00,000.
14. Defendant No. 1 sent a legal notice upon the plaintiff by registered post. Having considered the envelop of the registered notice (exhibit-Ka), the trial Court found that the serving peon in his report stated that the letter could not be served because of incomplete address. Therefore, it appears that in fact, no legal notice was served upon the plaintiff. Defendant No. 1 knowing full well about staying of the plaintiff in the USA issued the notice at his address at Sandnip. Though the legal notice was not served upon the plaintiff, defendant No. 1 by publishing notification in the 'Daily Purbakon' on 13.06,2002 repudiated the deed of agreement and forfeited the money paid on account of the agreement. Therefore, it appears that within 2 (two) days of issuance of legal notice upon the plaintiff, defendant No.1 repudiated the deed of agreement by publishing a notification in the newspaper.
15. Having considered the evidence of PW I, the trial Court came to a finding that the plaintiff approached defendant No.1 on many occasions to execute and register the deed of sale in respect of the second schedule land on receipt of the balance consideration money.
16. Considering the evidence-on-record, the trial Court found that the plaintiff had been in possession of both the undisputed first schedule land and the disputed second schedule land.
17. Mere fixation of the period in the contract even when coupled with a power to treat the contract as cancelled in the event of default in performance of contract within the stipulated time is not sufficient to make the time fixed of the essence of contract. Something more is necessary to have this effect and where the determination of this question depends only on the language of the stipulations as in the present case, the language must be such as would un-mistakenly excluded the notion that the time limit is merely a secondary importance. The language of the agreement before us does not exclude such notion nor is there anything in the conduct of parties prior to the agreement which would induce us to infer the said intention.
18. In this connection reliance may be placed on the case of Hajee Sam Meah Sowdagar vs Musammat Al-haj Jahanara Begum, 8 DLR 616. In this case, it has been held as under :
"……………the tenancy of the Courts in cases of such contracts relating to real property is to lean against a construction which would make time of the essence of the contract unless it can be held to be the unmistakenable intention of the parties. As an extreme instance of such a tendency, we might refer to a recent decision of the Calcutta High Court in the case of Kalidas Ghosh vs Mungeeram Bangur and Co, AIR 1955 Cal 298 where RP Mookerjee and Renupada Mukherjee, JJ, went to the extent of holding that even the mentioning of the fact that time should be deemed to be of the essence of the contract is not conclusive if it can be inferred even from the subsequent conduct of the parties that that was not the real intention of the parties."
19. Reliance may also be placed on the case of Amir Hossain Sowdagar vs Md Harunur Rashid 65 DLR (AD) 130, in which, it has been held as under:
"In contracts for sale of immovable property, the fact that a specific time is fixed for payment or for conveyance does not normally make time of the essence. Failure to pay at a fixed time is not per se sufficient to terminate the seller's duty to convey; and failure to convey on the exact date does not per se discharge the buyer. In such agreements, usually time is not the essence of contract, the reason being that the law of equity which governs rights of the parties in cases of specific performance of contracts of sale of immovable property, looks not at the letter but at the substance of the agreement. The intention to treat time as the essence of the contract may be evidenced by circumstances which are sufficiently strong to displace the normal presumption that in a contract for sale of real estate, stipulation as to time is not the essence of the contract."
20. On consideration the cases referred to above, we find that the agreement between the parties is still subsisting despite its rescission by the defendant and the defendant was in error in treating the agreement rescinded.
21. What is remarkable to note here is that the High Court Division directed the appellant to execute and register the deed of sale in respect of the land of second schedule on receipt of Taka 10,70,000 of which Taka 5,00,000 is the solatium.
22. The facts and circumstances and the evidence on record of the case are such that the plaintiff is willing and ready to perform his part of contract and therefore, he is legally entitled to a decree for specific performance of contract.
In the light of the findings made before we do not find any substance in this appeal. Accordingly, this appeal is dismissed: