TMI Blog1998 (2) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent both suffered from a mistake of fact as to the area of the land which was proposed to be sold as also the price (sale-consideration) whether it was to be paid at the rate of per Bigha or per Kanal . The Lower Appellate Court also found that the respondent was not ready and willing to perform his part of the contract. Consequently, the decree for Specific Performance was not passed but a decree for refund of the earnest money of ₹ 77,000/- was passed against the petitioner. This was upheld by the High Court. Learned counsel for the petitioner has contended that since the Lower Appellate Court was recorded a finding that the respondent was not ready and willing to perform his part of the contract inasmuch as the balance of the sale consideration was not offered by him to the petitioner, the Lower. Appellate Court as also the High Court, which upheld the judgment of the Lower Appellate Court, were in error in passing a decree for return of the amount of earnest money particularly as the parties had expressly stipulated in the agreement for sale that if the sale was not obtained by the respondent on payment of the balance amount of sale consideration, the amount of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract, and that what he was ready and willing to pay at all material points of time before he filed application for amendment of the plaint in this court, was only ₹ 1,56,150/-. 25. Of course, with the advantage of hind sight and as a clever but clumsy after though Sukhminder Singh respondent PW1 stated in this court on 30.4.1993 that when he attended the offence of the Sub Registrar for execution of the sale deed on 30.4.1993 he was having Rs. one lac in his possession. However performance because for the reasons already stated, it is abundantly clear that till before filing the application for amendment of the plaint, in this court, the respondent was only willing to pay the total sale price ₹ 1,56,150/- to the appellant, and not the full sale consideration of ₹ 2,35,750/-. Therefore in the peculiar facts and circumstances of the case, it would be difficult to hold that he had throughout been ready and willing to perform his part of the contract. 26. An other forensic cross which the respondent must bear is that even from his original pleadings, and the amended pleadings, it is clear that both the parties were under a mistake of fact in so far as the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... binding contract between the parties on the basis of oral agreement unless there is a law which requires the agreement to be in writing. Section 10 of the Contract Act provides as under:- 10. What agreements are contracts.- All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force in India and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents. The essentials of contract set out in Section 10 above are:- (1) Free consent of the parties (2) Competence of parties to contract (3) Lawful consideration (4) Lawful object Competence to contract is set out in Section 11 which provides that every person is competent to contract who is of the age of majority and who is of sound mind and is not disqualified from contracting by any law to which he is subject. Section 12 provides that a person will be treated to be of sound mind if, at the time when he makes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the price of the land, whether the price to be paid for the area calculated in terms of bighas or canals . Bigha and Kanal are different units of measurement. In the Northern part of the country, the land is measured in some states either in terms of bighas or in terms of kanals . Both convey different impressions regarding area of the land. The finding of the Lower Appellate Court is to the effect that the parties were not ad-item with respect to the unit of measurement. While the defendant intended to sell it in terms of kanals , the plaintiff intended to purchase it in terms of bighas , the plaintiff intended to purchase it in terms of bighas . Therefore, the dispute was not with regard to the unit of measurement only. Since these units relate to the area of the land. Since these units relate to the area of the land, it was really a dispute with regard to the area of the land which was the subject matter of agreement for sale, or, to put differently, how much area of the land was agreed to be sold, was in dispute between the parties and it was with regard to the area of the land that the parties were suffering from a mutual mistake. The area of the land was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is void on account of the fact that the parties were not ad-idem and were suffering from mistake of fact in respect of a matter which was essential to the contract, it cannot be enforced as the agreement itself is void under Section 20 of the Contract Act. A void agreement cannot be split up. None of the parties to the agreement can be permitted to seek enforcement of a part only of the contract through a court of law. If the agreement is void, all its terms are void and none of the terms, except in certain known exceptions, specially where the clause is treated to constitute a separate and independent agreement, severable from the main agreement can be enforced separately and independently. Since, in the instance case, it has been found as a fact by the below that the agreement in question was void from its inception as the parties suffered from mutual mistake with regard to the area and price of the plots of land agreed to be sold, the forfeiture clause would, for that reason, be also void and, therefore, the petitioner could not legally forfeit the amount and seek the enforcement of forfeiture clause, even by way of defence, in a suit instituted for Specific Performance by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such mistake and had, therefore, acted bona fide on such agreement. The agreement in such a case would be void from its inception, though discovered to be so at a much later stage. The Privy Council in Thakurain Harnath Kuar vs. Thakur Indar Bahadur Singh, AIR 1922 PC 403 = ILR (1922) 45 All. 179 = 27 CWN 949 = 44 MLJ 489, while considering the provisions of Section 65 held that:- The section deals with (a) agreements and (b) contracts. The dinstinction between them is apparent from section 2. By clause (e) every promise and every set of promises forming the consideration for each other is an agreement, law is a contract. Section 65, therefore, deals with (a) agreements enforceable by law and (b) with agreements not so enforceable. By clause (g) an agreement not enforceable by law is said to be void. An agreement, therefore, discovered to br void is one discovered to be not enforceable by law, and, on the language of the section would include an agreement that was void in that sense from its inception as distinct from a contract that becomes void. This case before the Privy Council also related to sale of certain villages for which some money had been paid in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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