TMI Blog2023 (2) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in the suit property. Secondly, they were aware that Girgaum Griha Nirman Mandal was not a society, much less of the sitting tenants in the suit property. There is an essential distinction between a fraud or misrepresentation as to the character of the instrument and contents thereof. In the case at hand, the defendant was fully aware of the character of the transaction and the jural relationship sought to be established thereunder. The defendant knew that the property was to be conveyed. However, the misrepresentation was as to the entity for whom the offer was made and in whose favour the sale was to be effected. Thus, the defendant was within its rights in avoiding the agreement as its consent was vitiated by misrepresentation. Consequently, it would be unwarranted to delve into the considerations which are germane for determining the exercise of discretion to grant the specific performance of a contract - the Court is not precluded from ordering the refund of the consideration. Absence of prayer does not constitute an impleadment for granting said relief for a substantive reason. The question as to how the defendant had dealt with the said amount ought not preclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within three months from the date of the execution of the agreement for purchase and complete the transaction within six months from the date of the agreement for purchase. Conveyance was to be executed in favour of the co-operative housing society proposed to be formed by the sitting tenants in the suit property. If the society could not be registered for any reason, the sale transaction shall be completed, notwithstanding the non-registration of the society, and the plaintiff would be liable to take conveyance of the property and complete the sale transaction within the stipulated period of six months. (d) The plaintiffs averred, a lengthy correspondence, thereafter, ensued. Vide letter dated 27th March, 1981 the plaintiff called upon the defendant to give list of tenants and title documents. Simultaneously, the plaintiffs delivered a demand draft for the balance consideration of Rs. 3,75,000/-. By a further communication dated 31st March, 1981 the plaintiffs made it clear that they had agreed to purchase the suit property on behalf of the tenants. However, at that stage, only the plaintiff Nos. 1 to 5 had contributed for the consideration. The defendant was further informed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) The defendant contended that, it transpired that out of plaintiff Nos. 1 to 5 only plaintiff Nos. 1-Prabhakar Satardekar and 4-Arvind Datta Naik were the tenants of the tenements in the suit property. False representation was thus made, purportedly on behalf of the tenants as a body under the name and style of Girgaum Griha Nirman Mandal. Adverting to the lengthy correspondence which ensued between the plaintiff Nos. 1 to 5 and defendant it was contended that draft conveyance forwarded on behalf of the plaintiff Nos. 1 to 5 did not contain any recital to the effect that the suit property was to be purchased for and on behalf of the sitting tenants in the suit property. On the contrary, bifurcation of individual share of plaintiff Nos. 1 to 5 in the consideration parted with, was provided therein. The plaintiff Nos. 1 to 5 thus professed to purchase the suit property in their individual capacity. This betrayed a dubious design on the part of the plaintiff Nos. 1 to 5 to acquire the suit property under a subterfuge of representing a body of tenants. (j) The defendant further contended that vide letter dated 13th August, 1981 some of the sitting tenants in the suit property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically contended that plaintiff Nos. 1 to 5 were not entitled to seek specific performance of the contract and categorically opposed the reliefs sought by plaintiff Nos. 1 to 5. Defendant No. 2 had also questioned the locus of the plaintiffs by contending that only two of the five plaintiffs were, in fact, the tenants of the tenements in the suit property. In substance, the amended claim for specific performance in favour of plaintiff Nos. 1 to 5 and 6 was resisted on the ground of absence of privity of contract and diametrically opposite stand of plaintiff No. 2 (defendant No. 2 before transposition). 7. In the wake of the aforesaid pleadings, the issues were settled thrice. First, whilst the contest was between the plaintiffs and the defendant. Second, post the impleadment of defendant No. 2-Society and the written statement on behalf of defendant No. 2. Third, after the transposition of defendant No. 2 as the plaintiff. 8. The trial court recorded the evidence of three witnesses for the plaintiffs namely; Arvind Datta Naik (PW-1); plaintiff No. 4, Mr. Harbans Singh Kohli (PW-2) and Mr. Sunil Sitaram Newalkar (PW-3); a committee member of plaintiff No. 6. The defendan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant assailed the finding that there was a valid agreement to sale the suit property in favour of the plaintiffs. According to the defendant, there was no concluded contract. Nor the finding of the trial Court that the defendant had agreed to sale the suit property upon formation of a cooperative housing society of sitting tenants is borne out by the evidence on record. 13. In the light of the aforesaid pleadings and evidence, I have heard Mr. Damle, the learned Senior Counsel for the appellants-plaintiff Nos. 1 to 6 and Mr. Bhave, the learned Counsel for the respondent-defendant, at some length. The learned Counsel took the Court through the pleadings and evidence. 14. Mr. Damle, the learned Senior Counsel for the appellants, submitted that the trial Court fell in error in not properly construing the terms of the contract incorporated in the letter of acceptance dated 27th February, 1981 (Exhibit-29). Formation of a Co-operative Housing Society of the tenants was not a sine qua non for execution of the conveyance. The parties had specifically provided for a situation where the plaintiffs could not form a Cooperative Society of the tenants, and decided that, notwithstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntation can hardly be contested. An inference that the fraud had vitiated the consent of the defendant is inexorable, urged Mr. Bhave. The learned Judge, thus, misdirected himself in recording the finding that there was a valid contract to sale the suit property. 18. Mr. Bhave further urged that the transposition of plaintiff No. 6 does more harm than good to the cause of plaintiff Nos. 1 to 5. On the date of the transaction, evidenced by the letter dated 27th February, 1981 (Exhibit-29), plaintiff No. 6 was not at all in the frame. On the own showing of the plaintiffs, plaintiff No. 6 was registered in the year 2005. There was simply no privity of contract between plaintiff No. 6 and the defendant. In the context of the written statement of the defendant No. 2, before it came to be transposed, no decree for specific performance can be claimed, much less, granted, submitted Mr. Bhave. 19. To start with few uncontroverted facts. First, indisputably, the defendant is the owner and the landlord of the suit property. Second, again indisputably, the defendant was intending to sale the suit property and had invited offers. Third, offers were made by few of the plaintiffs to purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties to the contract regard shall be had to the terms of the contract. The contract shall be read as a whole is also well recognized. I propose to ascertain the intent of the parties in the light of the terms of the letter dated 27th February, 1981 (Exhibit-29) and the attendant circumstances borne out by the record. 22. Mr. Bhave made an endeavour to urge that there was no concluded contract. Support was sought to be drawn from Clause 3 (extracted above) which provided for execution of an agreement for purchase in accordance with the draft enclosed with the letter dated 27th February, 1981 (Exhibit-29) within one month of the acceptance thereof. Since no formal agreement for purchase was executed, there was no concluded contract, submitted Mr. Bhave. 23. I am afraid to accede to the aforesaid submission as the letter dated 27th February, 1981 (Exhibit-27) incorporates all the terms and conditions requisite to construe an agreement for sale. It is well settled, a contract can be inferred from the terms of the correspondence exchanged between the parties. In the case at hand the acceptance of the offer by the plaintiffs is established beyond the pale of controversy by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de it abundantly clear that the conveyance will be executed in favour of the Co-operative Housing Society proposed to be formed by the sitting tenants in the suit property. 27. The letter which contained the offer, accepted by the defendant vide letter dated 27th February, 1981 (Exhibit-29), make the position absolutely clear. The letter dated 20th January, 1981 (Exhibit-22) was addressed on the letter head of Girgaum Griha Nirman Mandal. It was signed by M.V. Satardekar, Gajanan Vartak and Tejprakash Jaiswal-plaintiff No. 5, for and on behalf of Girgaum Griha Nirman Mandal. It expressly records that the signatories were tenants of the buildings forming part of the suit property and they proposed to purchase the suit property on behalf of the tenants. It was reiterated that the signatories desired to purchase the suit property for and on behalf of the tenants thereof and sought preferential right to purchase in the said capacity of the sitting tenants. It was this offer, which was accepted by the defendant under letter dated 27th February, 1981 (Exhibit-29). 28. When plaintiff Nos. 1 to 5 sought the execution of instrument in their favour, the defendant, vide letter dated 4th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The defendant was made to believe that the offer was for and on behalf of the tenants. The defendant explicitly accepted the offer made on behalf of the sitting tenants. Stipulations were, therefore, made in the letter of acceptance dated 27th February, 1981 (Exhibit-29). In this context, the trial Court, in my view, committed no error in arriving at a finding that the defendant had agreed to effect the sale in favour of the Co-operative Society of the sitting tenants. This has also been the consistent stand of the defendant. This stand is required to be appreciated in the light of the character of the defendant as a public sector enterprise. There was thus clear and explicit intent to convey the property in favour of the tenants. 32. Mr. Bhave made an endeavor to draw home the point that the false representation made by plaintiff Nos. 1 to 5 rendered the agreement void. Mr. Bhave pressed into service the circumstances which according to him indicate that plaintiff Nos. 1 to 5 had a design to indulge in profiteering by purchasing the suit property in their individual names. 33. There is no evidence to indicate that Girgaum Griha Nirman Mandal was registered as a society whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not necessarily render the agreement void, as was sought to be urged on behalf of the defendant. There is an essential distinction between a fraud or misrepresentation as to the character of the instrument and contents thereof. In the case at hand, the defendant was fully aware of the character of the transaction and the jural relationship sought to be established thereunder. The defendant knew that the property was to be conveyed. However, the misrepresentation was as to the entity for whom the offer was made and in whose favour the sale was to be effected. 37. A useful reference, in this context, can be made to the judgment of the Supreme Court in the case of Ningawwa vs. Byrappa Shiddappa Hireknrabar and others AIR 1968 SCC 956. The relevant paragraphs read as under:- 4] On behalf of the respondents Mr. Naunit Lal, however, stressed the argument that the trial court was wrong in holding that the gift deed was void on account of the perpetration of fraud. It was submitted that it was only a voidable transaction and the suit for setting aside the gift deed would be governed by Article 95 of the Indian Limitation Act. In our opinion, the proposition contented for by Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. This decision has been followed by the Indian courts-Sanni Bibi v. Siddik Hossain, AIR 1919 Cal 728 and Brindaban v. Dhurba Charan, AIR 1929 Cal 606. It is not the contention of the appellant in the present case that there was any fraudulent misrepresentation as to the character of the gift deed but Shiddappa fraudulently included in the gift deed plots 91 and 92 of Lingadahalli village without her knowledge. We are accordingly of the opinion that the transaction of gift was voidable and not void and the suit must be brought within the time prescribed under Article 95 of the Limitation Act. 38. The aforesaid judgment was followed by the Supreme Court in the case of Dularia Devi vs. Janardan Singh and Others 1990 (Supp) Supreme Court Cases 216. 39. In the light of the aforesaid exposition of law, since the misrepresentation, in the instant case, is not as regards the character of the transaction, the agreement would not be void and would be voidable at the option of the defendant. 40. An endeavour was made on behalf of the plaintiffs to draw home the point that there was never a proper termination of the contract nor there is material to indicate that the defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h October, 2010 proposing new terms and conditions for the transfer of the suit property. 43. The aforesaid factors cumulatively lead to no other inference than that of complete absence of privity of contract between plaintiff No. 6 and the defendant. Nor there is a case of novation of contract. In the circumstances, the endeavour on the part of the plaintiffs to now seek the specific performance of the contract for the reason that the defendant had agreed to convey the suit property in favour of a society of the sitting tenants does not merit acceptance. 44. The upshot of the aforesaid consideration is that the defendant was within its rights in avoiding the agreement as its consent was vitiated by misrepresentation. Consequently, it would be unwarranted to delve into the considerations which are germane for determining the exercise of discretion to grant the specific performance of a contract. 45. One aspect which warrants consideration is the indisputable fact of parting of entire consideration by plaintiff Nos. 1 to 5. In the plaint, the plaintiffs have not sought the relief of refund of the consideration. Nonetheless, in my view, the Court is not precluded from orderi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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