HIRA MISTAN Vs. RUSTOM JAMSHEDJI NOBLE

JUDGEMENT

(1.) PLAINTIFFS a partnership firm has filed the present suit for specific performance of the contracts for sale of immoveable and moveable properties respectively. There is also a relief by way of damages. The suit arises thus. It is the case of the plaintiffs that in February, 1976 defendant Nos. 1 to 10 represented by the defendant No. 1 and one Mr. Nicholson represented to the partner of the plaintiff Mr. Suresh Agarwal through a broker Mr. Kirti Tijoriwala of their intention to sell their immoveable and moveable properties as set out and/or described in para 1 of the plaint. The plaintiff, through their partner showed their willingness to discuss and negotiate the matter. A meeting was held between plaintiffs partner Suresh Agarwal, the defendant No. 1 and Mr. Nicholson representing the defendant Nos. 1 to 10 at which meeting Mr. Tijoriwala was present, it was agreed that the immoveable property would be sold for the price of Rs. 6,81,000/ and moveable properties for the price of Rs. 30,000/ -. The plaintiffs were to deposit with the Attorneys of defendant Nos. 1 to 10 earnest money being Rs. 68,000/ towards price of immoveable property and Rs. 3,000/- towards the sale price of the moveable property. Defendants had to hand over possession of the entire ground floor of the main building, the whole of the factory premises, stable and shed and all other open spaces. A regular Agreement for Sale would be prepared and would be executed. The agreement was not to contain express provisions as regards vacant possession and that a separate letter signed by each of the defendants was to be handed over to the plaintiffs, on the amounts of earnest money being deposited with the defendants Attorneys. There were some other conditions which I need not advert to as they are not the subject matter of the present controversy. It is submitted that under these circumstances a valid and binding contract came about between the plaintiffs and defendants for sale of immoveable and moveable properties. It is averred that the Agreement is subsisting and the plaintiffs are ready and willing to fulfil the obligations thereunder and to complete the sale.

(2.) PURSUANT to the oral agreement Solicitors for the defendants submitted drafts of the Agreements by letter of 3rd March, 1976 with a request that the same be returned duly approved. Thereafter, there has been exchange of correspondence between the Solicitors representing the plaintiffs and defendants. On 6th May, 1976 a meeting was convened between the parties in the office of the Attorneys for defendant Nos. 1 to 10. Present at the meeting were the defendant No. 1 and Mr. Nicholson representing the defendants along with their Attorneys and plaintiffs were represented by partner Mr. Suresh Agarwal along with Attorney. The broker was also present. The draft Agreements were finalised and it was agreed that they would be engrossed by the Attorneys for the plaintiffs and would be executed by the plaintiffs and forwarded the next day along with the cheques for Rs. 68,000/- and Rs. 3,000/- being earnest money to Attorneys for defendant Nos. 1 to 10. As regards the Agreement to give vacant possession of certain portion of the property, at the instance of defendants it was inter alia agreed that the separate letter signed by all the defendant Nos. 1 to 10 would be given to the plaintiffs representative next day after the cheques as aforesaid were given. It is averred that it was also agreed and arranged that prior to the Attorneys for the plaintiffs forwarding the signed Agreements and the cheques, representative of the defendant Nos. 1 to 10 would inform the plaintiffs about defendants Nos. 1 to 10 having executed the said letter. The plaintiffs accordingly deposited on 7th May, 1976 Rs. 72,000/- with their Attorneys and as arranged, Attorneys for plaintiffs kept the Agreements, Cheques and letters dated 7th May, 1976 ready to be sent to the Attorneys of defendant Nos. 1 to 10. As no confirmation was received from the defendants about execution of the letter on enquiry by plaintiffs defendant No. 1 and Mr. Nicholson informed on 10th May, 1976 that only seven out of the ten co-owners were readily available and had executed the letter. They assured the plaintiffs that remaining signatures would be obtained at the earliest and suggested to the plaintiffs to forward the documents and cheques to Attorneys for defendant Nos. 1 to 10. On 10th May, 1976 letter dated 7th May, 1976 along with stamped engrossment of both the agreements duly signed by the plaintiffs and two cheques for the earnest money were forwarded to the Attorneys of the defendant Nos. 1 to 10 to be signed by defendant Nos. 1 to 10 and to forward the original to the plaintiffs. After delivery of the cheques, defendant No. 1 and Mr. Nicholson produced letter dated 7th May, 1976 stating inter alia that defendant Nos. 1 to 10 will hand over vacant possession of entire ground floor of the building, stable and factory premises. The letter was signed by defendant Nos. 1, 2, 3, 5, 6, 8 and 10 only. Defendant No. 1 and Mr. Nicholson represented and assured the plaintiffs that they would get the signatures of defendant Nos. 4, 7 and 9 at the earliest. The original letter was taken back. However, photocopy was furnished to the plaintiffs. On 11th May, 1976 Attorneys for the plaintiffs received a letter dated 10th May, 1976 from the Attorneys for the defendants wherein it was alleged that there were some material alterations on comparison of the stamped engrossment of the approved drafts. The said two cheques were also returned. There were some discussions wherein it was agreed to make some minor alterations to clause 12. On 17th May, 1976 after re-engrossment of pages 7 and 8 the same were forwarded to the Attorneys for the defendant Nos. 1 to 10 along with the two cheques for the earnest money with the request that the original be signed and returned to the Attorneys for the plaintiffs. On 20th May, 1976 the engrossments were returned unsigned together with two cheques. It was set out in the letter that there were certain further questions which required to be discussed. Thereafter, various discussions took place between the parties. On 10th September, 1976 at the request of the plaintiffs and in part performance of the agreement the defendant Nos. 1 to 10 put the plaintiffs in possession of a portion of the stable as the same was required urgently by the plaintiffs for their own purpose. On being put in possession, the plaintiffs carried out the work of manufacture of furniture, etc. By letter of 21st September, 1996 Attorneys for defendant Nos. 1 to 10 forwarded the two agreements signed by defendant Nos. 1 to 10 and requested Attorneys for the plaintiffs to forward fresh cheque for Rs. 3,000/- and Rs. 68,000/- respectively being the earnest money payable under the said two agreements. It is averred that in the letter, it was set out that the said two agreements were to beheld in escrow until the plaintiffs cheques were encashed. The said letter was received by the Attorneys for the plaintiffs on 23rd September, 1976. Accordingly two cheques for the earnest money were prepared and were about to be forwarded. Before the cheques could be despatched the defendant No. 1 and Mr. Nicholson informed the plaintiffs that defendant Nos. 4, 7 and 9 had not yet signed the letter confirming the agreements to hand over possession and they were having some dispute about their shares relating to the said vacant possession and as such the plaintiffs should withhold sending the cheques till they hear from defendant No. 1 and/or Mr. Nicholson. The said persons informed the plaintiffs that if the said cheques are withheld it will strengthen their hands in dealing with the defendants who have not signed the letter and who were taking unfairly adamant attitude. It is in these circumstances that the cheques were not sent.

(3.) PLAINTIFFS thereafter received letter dated 14th October, 1976 from the Attorneys for the defendants that as the cheques for earnest money had not been received they had decided to put an end to the negotiations for sale of the Noble Building, plant, machineries, etc. and called on the plaintiffs to return the said engrossments. During the period the plaintiffs Attorneys were taking instructions from the plaintiffs to send a reply. Another letter dated 30th October, 1976 from Attorneys of the defendants was received to return the engrossments. After receipt of this letter efforts were made to amicably settle the matter but they could not fructify on account of the peculiar, adamant and unreasonable attitude of not executing the said possession letter. Under these circumstances, letter dated 8th March, 1977 was sent in reply to the letters sent on behalf of the defendants wherein the true and correct facts were stated. Thereafter, there was correspondence exchanged between the parties. The plaintiffs it is averred were shocked to read a notice in Bombay Samachar dated 16th May, 1977 that defendant Nos. 1 to 10 had agreed to sell the said immoveable property to the clients of Shri D. N. Kapadia, Advocate and inviting objections to the same. The plaintiffs accordingly informed the said Mr. Kapadia by their Advocates letter dated 16th May, 1977 that there was a subsisting agreement between the plaintiffs and defendant Nos. 1 to 10. There has been further exchange of correspondence. Inspite of the correspondence, the defendants have failed to comply with the agreements. Plaintiffs had also published a public notice in the news papers about the subsisting agreement between the plaintiffs and defendants Nos. 1 to 10. It has been pleaded that the plaintiffs had performed and have always been ready and willing to perform and are ready and willing to perform their obligations under the said two agreements. The plaintiffs, it is contended, were and have always been and are ready and willing to pay the earnest money but it is the defendants Nos. 1 to 10 who have repeatedly caused the cheques for the earnest money to be returned. It was at the instance of representative of defendant Nos. 1 to 10 who had instructed the plaintiffs not to forward the cheques though they were ready, that the cheques for the earnest money were not sent. It is, therefore, contended that the plaintiffs are entitled for specific performance of the agreement for sale of the immoveable property and moveable property as orally arrived at and subsequently reduced to writing as recorded in the agreements. It is contended that damages would not be an alternative and adequate remedy as in the area where the properties are situated there is no comparable property available for sale and with vacant possession. Hence the suit and the reliefs. Apart from the final reliefs, interim reliefs were sought for in terms of prayer clauses (e) and (f ).