HARI KRISHNA AGARWALA Vs. KCGUPTA

JUDGEMENT

(1.) The plaintiff-appellant was an original resident of Allahabad. He was employed as Assistant Controller of Purchase Cotton Textiles Directorate, Government of India, Bombay, and it is his case that he was anxious to settle in Allahabad after retirement from Government service and, though he had a house in the City of Allahabad, he wanted to purchase a bungalow in the civil station and that therefore he entered into a contract with the defendant on 21 March 1913, to buy the defendant's house for a sum of Rs. 15,000. The defendant is also a Government servant and in the course of his employment was posted at Allahabad and had built a house in Lukerganj after borrowing money from certain persons. He had to pay a large sum of interest on the money borrowed but was not able to clear off the liabilities. He had been transferred to Lucknow where on all the material dates he was posted. The creditors of the defendant proceeded to attach the house and the defendant ultimately was forced to agree to its sale and entered into the contract dated, 21 March 1943, with the plaintiff. The fact that there was such a contract is not denied.

(2.) Soon after the contract there were differences between the parties about certain minor Terms, specially about the payment of brokerage. Ultimately, on 29 April 1913, all the terms were settled. A draft of the sale-deed had already been sent by the defendant to the plaintiff for approval on the 26 and this draft was approved by the plaintiff on the 29th. One thing, however, still remained to be done and it was the obtaining of the permission of the Collector for the sale. The house was built on leasehold land and under the lease the lessee could transfer the premises only with the permission of the Collector and to a party approved by him. Between 29 April and 3 May the defendant got money from a relation of his which was sufficient to clear off his liabilities and therefore the necessity for the sale no longer existed. He, therefore, wrote a letter dated 3 May 1943, to the plaintiff at Bombay in which he explained the circumstances that had compelled him to agree to sell the house, the value that he and his wife attached to the house and the change in the circumstances which had enabled him to pay off all his liabilities so that there was no longer any necessity for sale and requested the plaintiff to relieve him of his obligation under the contract and to agree to take compensation instead. The relevant portion of the letter dated 3rd May 1943, is as follows: But as I am now in a position to pay them all and clear their account fully, my prayer to you is that you will be good enough to release me from the contract and allow me to keep the house. Needless to say that I shall always remain grateful to you for it. As a gentleman and a reasonable man I hope you will have no hesitation in acceding to my request. It might cause you some pecuniary loss. I am prepared to compensate you for that loss. The defendant also enclosed a crossed cheque for Rs. 1,000, the amount that he had received as earnest money. The plaintiff, who was at Bombay, sent this letter to his son who was in Allahabad, and on 11 May, 1943, the plaintiff's son, Shri Krishna Agarwal, wrote a letter, which was marked "without prejudice," to the defendant. In this letter he said as follows: My father and I are very much touched by your letter and we want to respect your wishes so far as is reasonable. In order to keep ready money to be paid to you at a moment's notice by way of the. consideration of the sale deed we had to sell our valuable shares in an unfavourable market at a loss of about Rs. 4,000 (four thousand only). The prices of the shares have risen very high now and this is an additional loss. We have thus suffered a loss of more than Rs. 4,000 on account of our entering into a contract with you for the sale of the house.... If you really wish to retain the house you can send a cheque for Rs. 4,000 as compensation for the loss that we have suffered. This must be done within 48 hours of the receipt of this letter by you. If it is not so done, the above offer will be with-drawn and the contract of sale will be specifically enforced.

(3.) The defendant was not willing to pay the sum of Rs. 4,000 which he considered to be an exaggerated amount and offered in his letter dated 14 May 1943, to pay reasonable compensation for the amount of loss suffered by the plaintiff. The plaintiff's son, in his letter dated 22 May, 1943, replied that he was not willing to accept anything less than Rs. 4,000 and as the sum of Rs. 4,000 had not been paid he was returning the cheque for Rs. 1.000 which had been sent to his father and that he had placed the papers in the hands of his lawyer to file a suit for specific performance. Thereupon the suit was filed on 31 May 1943.