A SHANMUGAM Vs. T R KANNAPPA MUDALIAR

JUDGEMENT

(1.) THE main question which arises for consideration in this appeal is whether there is a concluded contract for sale in favour of the plaintiff with reference to the suit properties.

(2.) THE plaintiff, who is the first respondent herein, filed the suit for specific performance of an agreement dated 26-3-1975 on the basis of the following averments: Respondents 2 and 3 herein, who are defendants 1 and 2 in the suit were admittedly the owners of the suit properties. THE first defendant for himself and on behalf of the second defendant agreed to sell the suit properties for a total consideration of rs. 70,000 and executed an agreement on 26-3-1975. As per the agreement, he received a sum of Rs. 2,000 by way of advance. It was agreed that another agreement was to be executed by defendants 1 and 2 for the same consideration of Rs. 70,000. THE first defendant agreed to bring the second defendant and that both would execute the agreement before 30-4-1975. It was agreed that a sum of rs. 18,000 was to be paid at the time of execution of the second agreement and the time for the completion of the transaction should be fixed at the time of the second agreement. THE balance of consideration of Rs. 50,000 should be paid at the time of execution and registration of the sale deed. THE agreement was written by one Sambandam Pillai, Karnam of the village, and attested by a. Rathnavel, VA. Doraiswamy (examined as P. W. 2), H. K. Kannappa Mudaliar, rasamanickanv Nagarajan, Arunachalam and another. THE first defendant apprised the second defendant of the agreement and the latter accepted the same and agreed to execute an agreement in favour of the plaintiff. THE first defendant informed the plaintiff about the same by a letter dated 7-4-1975. On 8-4-1975, defendants 3 to 8 along with some others attempted to trespass on the properties. THE first defendant filed a suit O. S. No. 99 of 1975 on the file of the District Munsif, Chengalpattu for declaration and injunction. Interim injunction was also obtained. At the request of the first defendant, the plaintiff was finding the said litigation. It was agreed that the second agreement could be executed after the disposal of the suit. THE suit was decreed on 24-12-1976. THEreafter the plaintiff defendants 1 and 2 and some other people met on 19-1-1977 at Madras in a relatives house. THE plaintiff wrote a draft agreement in Tamil and the second defendant, stating that he was not well acquainted with Tamil, wrote a draft in English on the same paper agreeing to sell the properties for a sum of Rs. 70,000. It was agreed that the transaction should be completed on or before 30-5-1977. THE necessary stamp papers were purchased on 19-1-1977 itself. It was suggested that the first defendants counsel at Chengalpattu should be consulted for approving the draft agreement and hence the parties returned to their place. THEy came to know that an appeal had been filed by defendants 3 to 8 against the decree in O. S. No. 99 of 1975. That was pending on the file of the District Court, Chengalpattu in a. S. No. 24 of 1977. THEre was also an injunction restraining defendants 1 and 2 from alienating the properties till the disposal of the appeal. It, was therefore, agreed that the sale deed could be executed after the completion of the appeal and in the meanwhile, no formal agreement need be executed between the parties. Subsequently, defendants 1 and 2 colluded with defendants 3 to 8 and executed a sale deed in favour of defendants 3 to 9 on 24-7-1977. Based on the sale deed, the appeal filed by defendants 3 to 8 was withdrawn on 26-7-1977. Coming to know of the same, the plaintiff issued a notice on 2-8-1977 to which a reply was sent by the defendants. THE plaintiff filed the suit for specific performance on 9-9-1977. THE plaintiff prayed for the reliefs of specific performance and delivery of possession.

(3.) THE question whether a document constitutes a concluded contract has to be decided on the facts of each case. Where the parties contemplate a further agreement in writing, the question would be whether the execution of a further agreement is a term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the original agreement is to be performed. In Ridgway v. Wharton, (1854)6 H. L. C. 238, Lord Cranworth expressed the view that the circumstances thait the parties do intend a subsequent agreement to be made is strong evidence to show that they did not intend the previous negotiations to amount to an agreement and there was dealing with the supersession of written negotiation by formal writing. While Lord Wen-sleydale in the same case said, bthese cases often occur in Courts of Law, and the question there always is, whether the parties mean to embody the contract, made by parol, in writing" If they do, nothing binds them till it is written. If they enter into a contract with a view to a written agreement, nothing will bind them but that written agreement. 7. THE off-quoted statement of Lord Parker in Von hatzfeldt Wildembury v. Alexander, (1912)1 Ch. D. 284, is the best exposition of the law and it reads thus: "it appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored. "