LAWS(CAL)-1989-5-74

UNITED COMMERCIAL BANK Vs. JAWAHARLAL MILL

Decided On May 05, 1989
UNITED COMMERCIAL BANK Appellant
V/S
Jawaharlal Mill Respondents

JUDGEMENT

(1.) This is defendants appeal and the same arising out of Title Suit No. 34 of 1985 of the 2nd Court of Assistant District Judge, Hawrah is directed against the judgment and decrees dated 30.3.85. The facts of the case lie in a short compass.

(2.) The plaintiff Jawaharlal Mill brought a suit for specific performance of contract, permanent injunction and damages against the defendant United Commercial Bank (hereinafter referred to as the Bank) on the allegations inter alia, that by an agreement dated 18.8.81 entered into by and between the parties to the suit the plaintiff made substantial constructions over his land and that although the plaintiff was all along willing to perform his part of the contract in terms of the aforesaid agreement, the defendant illegally and without sufficient cause cancelled the agreement on 13.4.82. The defendant-Bank contested the suit by filing a written statement in which it was alleged that time was of the essence of the contract and as the construction could not be completed within a period of six months from the date of the agreement the Bank in its discretion cancelled the said agreement. The learned Assistant District judge framed issues, recorded evidence, and upon consideration of the materials on record came to a finding that in the instant case time for performance was not of the essence of the contract and that the defendant did not suffer any loss for non-completion of the construction within the stipulated period of six months. Tire suit was accordingly decreed. Being aggrieved by end dissatisfied with the aforesaid judgment and decree the Bank has preferred the appeal.

(3.) Mr. Tarun Kumar Chatterjee, the learned advocate for the appellant took us through the agreement dated 18.8.81 Exb. T-4 and with particular reference to clause-6 of the said agreement argued before us that in the instant case time for completion of the construction work was of the essence of the contract and as the said construction could not be completed within the period of six months in terms of the agreement, the Bank was well within its power to cancel the contract. Mr. Shyama Prasanya Roy Chowdhury, the learned Counsel for the plaintiff-respondent, on the other hand contended that although the specified time was fixed for the completion of the work the Bank forfeited the right to cancel the contract due to its failure to comply with certain other considerations which had prompted the plaintiff to enter into the agreement and to proceed with the construction work. It was next contended that the intention of the parties is to be gatherer from the attending facts and circumstances and in this case it is not the form bat the substance of the agreement as a whole which should be taken note of. In order to show that the plaintiff was not guilty of breach of contract, reference was made to section 55 of the Indian Contract Act and it was urged that under the aforesaid section of Che Contract Act a contract becomes voidable at the option of the promisee and not void ab initio. Reliance was placed upon three rulings reported in (1) 43 Indian Appeals, page 26, (2) AIR 1977 SC page 1005 and (3) AIR 1977 SC page 720 respectively. In order to appreciate the respective contention put forth by the learned Advocates of either side, let us examine the impugned agreement Exb T-4 first.