judgement:
vil Appeal Nos.
1893 and 1894 of 1989.
From the Judgment and Order dated 24.9.
1987 of the Andhra Pradesh High Court in C.C.C.A. No. 152 of 1984 and C.C.C.A. No. 150 of 1984.
K. Parasaran, Shanti Bhushan, A.D.N. Rao and A. Subba Rao for the Appellants.
M.C. Bhandare, K. Madhava Reddy, Subodh Markandeya, Mrs. Chitra Markandeya, W.A. Nomani, G.S. Giri Rao, A.K. Raina and D. Prakash Reddy for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
The Plaintiffs by Special Leave have filed these appeals against the Judgment of Andhra Pradesh High Court, Hyderabad, dated 24th September, 1987.
The four plaintiffs who are brothers filed the present suit on 17th July, 1979 for specific performance of oral contract for sale of a building known as "Roshan Manzil" located in an area of 4165 .sq.
yards in Saifabad, Hydera bad.
M/s. Gopi Hotel was the tenant in the premises.
Accord ing to the case as set up in the plaint the first plaintiff Brij Mohan learnt some time in the first week of April, 1979 that the defendant No. 1 Smt.
Mahboobunnisa Begum (since deceased) was contemplating the sale of the property in question and that Shri Arif Ali, her Advocate and income tax practitioner was assisting her in finding a purchaser.
Shri Arif Ali had mentioned the above intention of the first defendant to Sh.
Ibrahim Moosa of M/s. J. Moosa & Company who was known to the first plaintiff.
On learning from Shri Ibrahim Moosa the first and second plaintiffs, namely, Brij Mohan and Jagmohan along with Sh.
Ibrahim met Sh.
Arif Ali.
Arif Ali gave the details of the property and also showed the plans of the property to them.
Arif Ali stated that the defendant was expecting the price of Rs. 10,00,000.
The plaintiffs Nos. 1 and 2 offered Rs.7,00,000.
Shri Arif stated that he will ascertain from the defendant her reaction to the said offer.
A fortnight later i.e. in the third week of April, 1979 the plaintiffs Nos. 1 and 2 along with Sh.
Ibrahim Moosa and Sh.
Arif Ali went to the residence of the defendant, who was insisting on the payment of Rs. 10,00,000 as the sale price.
At the said meeting the husband of the defendant was also present.
The plaintiffs Nos. 1 and 2 418 increased their price from Rs.7,00,000 to Rs.8,00,000.
The first defendant said that she would think over and inform the plaintiffs Nos. 1 and 2 through Sh.
Arif Ali.
On 3rd May, 1979 the plaintiffs Nos. 1 and 2 along with Shri Ibra him Moosa met Sh.
Arif Ali.
Arif Ali stated that the defend ant was agreeable to sell the property to plaintiffs only for Rs. 10,00,000 and not a pie less.
Thereupon the plain tiffs agreed to pay Rs. 10,00,000 as the sale price.
Shri Arif Ali after getting the confirmation of acceptence of the said offer of the plaintiffs Nos. 1 and 2 from the first defendant said that the plaintiffs Nos. 1 and 2 should meet the defendants on 6th May, 1979 and that she would in the meanwhile purchase the stamp papers for making the formal agreement for sale incorporating the oral agreement arrived at.
It was further alleged in the plaint that on 6th May, 1979 the first and second plaintiffs along with Shri Ibrahim Moosa met the first defendant and her husband in the presence of the said Sh.
Arif Ali.
In the said meeting the amount of earnest money to be paid, time for registration of the sale deed etc., were decided.
The said Shri Arif Ali prepared in his own handwriting a draft of the receipt incorporating the terms of the orally concluded agreement for sale.
The draft was scrutinised by the husband of the first defendant who suggested some alterations.
The said Shri Arif Ali thereupon prepared final draft of the receipt in his own hand.
He handed over the first and the final draft to the first plaintiff to get the later typed and duly stamped.
He also delivered the stamp papers to the first plaintiff for being used for typing of the formal agreement of sale.
It was further stated in the plaint that during the said meeting held on 6th May, 1979, the plaintiffs Nos. 1 and 2 were permitted to proceed with the publication of the no tices in the newspapers.
Accordingly, the contents of the publication were got prepared by them bonafidely anticipat ing that the first defendant will execute the receipt after receiving the stipulated earnest money in the course of the day, ie.
6.5.79.
However, for reasons known to herself the first defendant deliberately and wantonly evaded meeting the first and second plaintiffs to receive the advance and execute the receipt.
It was further stated in the plaint that after the public notice was published in the newspapers taking advan tage of her wanton and deliberate act of evasion, the first defendant got a reply notice published in the newspaper and got issued a legal notice dated 8.5.79 through her Advocate, falsely alleging that there was no agreement for sale.
Thereafter the first and second plaintiff made sincere and repeated attempts 419 to convince the first defendant that the false and baseless pleas taken by her were detrimental to the interest of all concerned and there is inexistence a concluded contract for sale of the suit property and that the execution of the agreement of sale was a mere formality as well the receipt for the advance.
Since the first defendant persisted in her illegal conduct.
the plaintiffs got issued a final notice dated 27th June, 1979 calling upon the first defendant to execute the agreement, receive the earnest money and issue a valid receipt within three days of the receipt of the notice thus giving the first defendant one more opportunity.
The plaintiffs neither received any reply nor the first defend ant complied with the demands made in the notice.
It was further alleged in the plaint that the plaintiffs Nos. 1 and 2 had negotiated for the purchase of the property on behalf of themselves and plaintiffs Nos. 3 and 4 who were their younger brothers.
The concluded contract for sale entered into with the first defendant was for the benefit of all the four plaintiffs.
Hence all the four plaintiffs had joined in the filing of the suit.
The second defendant was M/s Gopi Hotel who was the tenant of the first defendant in the suit premises.
The plaintiffs further averred that they have been and are ready and willing to pay to the first defendant the sale consider ation of Rs. 10,00,000.
The plaintiffs undertake to deposit the same in the court at any time during the pendency of the suit or within a time fixed by the Hon 'ble Court for the deposit of the same after passing the decree or at the time of execution and registration of the sale deed.
The plain tiffs on the above allegations sought the relief of specific performance of the agreement of sale in respect of the suit property after payment of sale consideration of Rs. 10,00,000 The first defendant Smt.
Mahaboobunnisa Begum filed a written statement on 21st January, 1980 stating that certain negotiations took place between her and plaintiffs Nos. 1 and 2, but no contract was finalised with them and the negotiations failed.
According to her, under an agreement of sale dated 22nd June, 1979 she agreed to sell the property in question to defendants Nos. 3 and 4, namely, Smt.
Sugra Begum and Smt.
Saira Banu.
It was submitted in the reply that it was wholly incorrect to suggest of an oral contract of sale on 3rd May, 1979 in respect of sale of the suit property, in favour of the plaintiffs.
There was a proposal of sale of the suit property and plaintiffs did approach for negotiations.
However, the allegation of the plaintiffs approaching during first week of April, 1979 with Arif Ali, Income Tax practitioner, was wholly erroneous.
In fact plaintiff No. 1 approached 420 No. 1 with Arif Ali and Ibrahim Moosa for negotiations, and plaintiffs Nos. 1 and 2 came along with them somewhere during the last week of April, 1979 and tried to negotiate, and thereafter, again they approached on 6th May, 1979, but negotiations could not be finalised and the answering de fendant did not agree to sell the suit property to the plaintiffs Nos. 1 and 2.
In fact, details have been men tioned in the counter, filed in I.A. pertaining to injunc tion bearing No. 679/79, which may be read as part of the written statement.
There was no concluded or enforceable contract, arrived at on 3rd May, 1979, as alleged and con tended.
It was further alleged that there was no price settled or agreed and even the payment for advance was not settled and other terms and conditions were not agreed upon, even on 6th May, 1979 and the negotiations failed and noth ing was settled.
There was no concluded contract and the plaintiffs had no cause of action to file the present suit for specific performance.
The parties never intended to have an oral agreement, and the negotiations if any, never re sulted in a concluded contract, and even if the negotiations had been finalised, it had to be reduced into a written agreement, and the writing contemplated was not formal as alleged and contended by the plaintiffs, but was a condition and a term of contract.
The plaintiffs with ulterior motive had taken the plea of oral contract It was further submitted in the written statement that it was true that plaintiffs Nos. 1 and 2 did approach the answering defendant on 6th May, 1979 along with Ibrahim and Arif, and even in the said meeting negotiations failed and the parties did not and could not arrive at a concluded contract; and even in the said negotiations on 6th May, 1979 matters remained unsettled and were not concluded.
It was plaintiff No. 1 who attempted to prepare receipt, it was wholly erroneous to suggest of any draft receipt or a final receipt being prepared after scrutiny made by the husband of the answering defendant.
There was no final document pre pared and there was no final settlement of terms and condi tions of contract.
The answering defendant was not aware of the purchase of stamp paper and she never asked for the purchase of the stamp papers.
The blank stamp papers and incomplete and unsigned draft receipts in no way spell out a concluded contract and the suit is untenable.
It was also alleged in the reply that even on 6th May, 1979 there was no completed or concluded contract and nego tiations failed.
Consequently, the plaintiffs took away the blank incomplete papers, and rushed with utmost haste to get it published in the newspaper, making false allegations of having paid Rs.50,000 as advance under the sale 421 agreement etc., and immediately, the answering defendant sent a suitable reply contradicting the said allegations.
There was no bonafides in their action.
It was done with ulterior motive to cause loss and damage to the defendant.
When no earnest money had been paid or received, the plain tiffs Nos. 1 and 2 had no right to make false allegations and mislead the public and consequently the answering de fendant suffered heavy loss.
The second defendant M/s. Gopi Hotel only took the plea in the written statement that he was a tenant in the build ing.
Defendants Nos. 3 and 4 supported the case of the first defendant and claimed ownership in the suit property by virtue of a registered sale deed dated 19th November, 1979 executed in their favour.
It may be made clear at this stage that according to defendant No. 1 an agreement to sell the property in question was made by the first defendant in favour of defendants Nos. 3 and 4 on 22.6.79.
After the injunction being vacated by the High Court the first defend ant sold the suit property for a sum of Rs. 10,00,000 in favour of defendants Nos. 3 and 4 by a registered sale deed dated 19th November, 1979.
Defendant No. 1 died on 3rd November, 1982 during the pendency of the suit as such defendants Nos.
5 to 9 were impleaded as legal representa tives of defendant No. 1.
The Learned Trial Court recorded the summary of the findings which are reproduced in its own words.
Summary of the findings: "On the facts and circumstances of the case, it is estab lished that the plaintiffs entered into an oral contract of sale with D. 1 on 3.5.79.
The terms settled were that D. 1 should sell the suit property for a sum of Rs. 10,00,000 and D. 1 should obtain permissions from the authority under Land Ceiling Act and also income Tax Act.
The sale deed should be executed within six months from 6.5.79.
It is also settled that vacant possession was not to be given on the date of contract of sale, and the parties are aware that the defend ant No. 2 was only a tenant in the premises.
The only aspect left open on 3.5.79 is that mode of payment should be fixed on 6.5.79.
On 6.5.79 it was agreed that D.1 should receive Rs.50,000 as advance and these terms were reduced into writing in Ems.
A. 1 and A. 2, but, before the ink could dry, the defendant No. 1 on the evening of 422 6.5.79, refused to receive the amount.
This resulted in the breach of contract on the part of D. 1.
So the plaintiffs are entitled to specific performance of oral contract of sale concluded on 3.5.79.
Subsequent sale to defendants 3 and 4 do not create any rights in favour of them and in order to prevent D. 3 and D. 4 from claiming any rights in future, they should also be made to join D. 5 to D. 9 in executing the registered sale deed.
Defendant No. 2 is admittedly not entitled to any proprietary rights in the property and he is only a tenant.
As to whether D. 2 is liable to be evicted or not it is held that the Plaintiffs are entitled to seek eviction at an appropriate time when they become full owners of the property.
Defendants 3 and 4 shall not be liable to contribute any thing towards expenses for the executing of the registered sale deed and defendants 5 to 9 as legal representatives of D. 1 are bound to perform their part of contract by obtaining permission required under the Urban Land Ceiling Acts and Income Tax act and any other Act required execute the sale deed and register the sale upon receiving the entire consideration of Rs. 10,00,000.
The expenses for registration of the sale deed shall be borne out in equal halls by defendants 5 to 9 on the one hand and the plaintiffs on the other hand".
As a result of the above findings the trial court de creed the plaintiffs suit for specific performance.
Two separate appeals, one by defendants Nos. 5 to 9 and the other by defendants Nos. 3 and 4 were filed in the High Court challenging the decree passed by the trial court.
A Division Bench of the High Court by Judgment dated 24th September, 1987 allowed both the appeals and set aside the decree passed by the trial court.
As two separate appeals Nos. 150 and 152 of 1984 were disposed of by one single order the plaintiffs filed the above two civil appeals before this Court by Special Leave.
The High Court observed that the only question which arose for consideration in both the appeals was whether there was a concluded oral contract between the parties, namely, plaintiffs 1 and 2 on one side and the first defend ant on the other, on 3rd May, 1979 as alleged by the plain tiffs? According to the High Court to decide this question, the only available oral evidence was that of P.W. 1 Brij Mohan, P.W. 3 Jagmohan and D.W. 2 Arif Ali.
As regard the negotiations which took place between the parties in the third week of April, 1979, the High court observed that the negotiations which took place between the 423 parties in the third week of April, 1979 were not in dispute and which were to the effect that when the first defendant was insisting on payment of Rs. 10,00,000, plaintiffs 1 and 2 increased their offer from Rs.7,00,000 to Rs.8,00,000 and the first defendant promised them to think over and inform the plaintiffs through Arif Ali.
The High Court then consid ered the bargain that took place between the parties on 3rd May, 1979.
The plaintiffs apart from their own statements as P.W. 1 and P.W. 3 had also examined P.W. 2, the Income Tax Inspector B Ward Circle No. 4, Hyderabad to show that de fendant No. 1 was an income tax and wealth tax assessee and Sh.
Arif Ali, Advocate and Income tax practitioner used to look after her tax matters.
The plaintiffs had also examined P.W. 4, Mohd Yusuf a stamp vendor to prove Exhibit X 25 sales register of stamps and Exhibit X 26 an entry of sale of exhibit A. 3 non judicial stamps for Rs.5 to defendant No. 1 Smt.
Mahboobnissa Begum.
Similarly plaintiffs had examined P.W. 5 Sheikh Ismail another stamp vendor for having sold a stamp Exhibit A 4 to one Abdul Khalik on behalf of Smt.
Mehboobnissa Begum vide entry exhibit X 27 in the register of stamps.
The plaintiffs by the aforesaid evidence wanted to establish that one stamp was purchased by Smt.
Mehboobnissa Begum herself and another through Mohd. Khalik for executing the agreement for sale in favour of plaintiffs.
The High Court in this regard observed that it was not necessary to discuss the evidence of P.W. 4 as to whether the first defendant personally went to him and purchased the stamp paper.
The first defendant who is a lady from aristocratic family would not have gone all the way to Chotta Bazar to purchase a non judicial stamp worth Rs.5.
P.W. 4 deposed that he cannot identify whether the person who came for purchase of the stamp paper was Smt.
Mehboobnissa Begum or not.
It may be that some person by name Smt.
Mehboobnissa purchased the stamp papers.
P.W. 5 simply stated that he sold exhibit A 4 to one Adbul Khalik on behalf of Smt.
Mehboobnissa Begum.
D.W. 2, Arif Ali however said that neither any transaction nor talks took place between the plaintiffs 1 and 2 and himself on 3rd May, 1979.
The High Court did not agree with the submission of the Learned counsel for the plaintiffs made before them that the pur chased of the stamps Exhibit A 3 and A 4 was a strong cri cumstance in favour of a concluded contract.
The High Court in this regard observed that first of all it was not firmly established that the purchase of the stamps was for the purpose of this transaction only.
In view of the evidence of D.W. 2 much weight cannot be given to the evidence of P.Ws. 4 and 5.
The High Court further observed that even assuming that these two stamps were purchased pursuant to the talks that took place between D.W. 2 and P.Ws. 1 and 3 it would not improve the case of the plaintiffs.
The 424 stamps were blank and nothing was engrossed on them.
This circumstances, at the most would show that meeting on 6th May, 1979 was fixed between the plaintiffs 1 and 2 and the first defendant for further negotiations.
The High Court then observed that as regards the meeting which took place on 6th May, 1979 and the fact that the negotiations fell through was admitted by both the parties.
Therefore, the crucial question for determination was whether all the terms of the oral contract were entered into between the parties on 3rd May, 1979 or any terms were left open to be dis cussed and determined in the meeting to be held on 6th May, 1979.
The High Court then considered the argument of the plaintiffs according to whom Exhibit A 1 draft receipt was written by D.W. 2 Sh.
Arif Ali on 6th May, 1979 stating that the suit premises was agreed to be sold for Rs. 10,00,000 and the permission for Urban Land Ceiling Authority will be obtained by the first defendant and the registration will be completed within six months from that date.
The plaintiffs further case was that the first defendant 's husband who was present suggested some alterations basing on which Exhibit A 2 fair draft was prepared and that when the plaintiffs took the agreed advance amount of Rs.50,000 in the evening, the first defendant refused to accept the advance amount and resiled from the contract.
As against the above contentions of the plaintiffs, D.W. 2 Sh.
Arif Ali who is the represen tative of the first defendant deposed that in the meeting between the parties which took place in April, 1979 the vendor did not take the responsibility of obtaining ,clear ance under the Urban Land Ceiling Act.
He denied the sugges tion that in the third week of April, 1979 the first defend ant offered to sell the suit property for Rs. 10,00,000 and that she would obtain the clearance under the Urban Land Ceiling Act.
On the other hand he deposed that when the plaintiffs offered Rs.8,00,000 the first defendant told them that she would consider and communicate her view through D.W. 2 some time later.
The High Court in this regard clear ly observed that the contention of the plaintiffs that even in the third week of April, 1979 before the parties could agree upon the sale price for the suit building, there was discussion about the obtaining of clearance under the Urban Land Ceiling Act and that the first defendant undertook to obtain that clearance certificate cannot be believed.
The High Court further observed as under: "As seen from their own evidence, by the 3rd week of April, 1979 plaintiffs 1 and 2 increased theft offer from Rs.7,00.000 to Rs.8,00,000.
At the time of the earlier 425 negotiations when the plaintiffs offered Rs.7,00,000 (seven lakhs) and the 1st defendant was not willing to accept that offer, there was no stipulation as to who should obtain the clearance under the Urban Land Ceiling Act.
If so, it is unbelievable that in the 3rd week of April, 1979 when still there was a wide gap of Rs.2,00.000 in the price payable for the suit building, the parties would have stipulated about the condition as to who should obtain the permission under the Urban Land Ceiling Act.
Therefore, the evidence of P.Ws. 1 and 3 can be believed to the extent that they approached Arif Ali on 3.5. 1979 and Arif Ali in his turn communicated their willingness to pay the price of Rs. 10,00,000 for the suit premises and the 1st defendant accepted that offer.
" The High Court on the basis of the above finding then held that in order to determine the binding nature of the contract between the parties, the mere acceptance of sale price is not sufficient.
It was not the case of the plain tiffs that the other terms of the contract were also dis cussed by D.W. 2 over the phone and their acceptance was communicated to them by the 1st defendant through D.W. 2.
It was obviously for that reason that a further meeting was fixed at the house of the 1st defendant in the morning of 6th May, 1979 which had admittedly taken place.
The High Court further held that it must be remembered that this agreement is in respect of a valuable property and the main intention was to reduce the terms of agreement into writing and when the parties are very much relying on the alleged oral agreement dated 3rd May, 1979, there would definitely have been a reference in Exhibits A 1 and A 2 to the oral agreement said to have taken place on 3rd May, 1979.
The absence of the same in Exhibits A 1 and A 2 against throws a serious doubt about the alleged agreement, dated 3rd May, 1979.
In any event the mere fact that there was a meeting between the plaintiffs Nos. 1 and 2 and D.W. 2 on 3rd May, 1979 does not establish that there was a con cluded contract between the parties on that day because admittedly the first defendant was not present at that time.
What all had happened according to P.Ws. 1 and 3 is that they offered to pay Rs. 10,00,000 for the suit building and D.W. 2 having contacted the 1st defendant over the phone conveyed to them her acceptance of the price fixed.
In the absence of evidence that the other terms also were discussed over the phone and settled at that time and the 1st defend ant agreed for the terms, it cannot be said that there is a con 426 cluded contract on 3rd May, 1979.
The fixation of price is only one of the terms of the contract and by mere acceptance of the price it cannot be said that there is a concluded contract between the parties in the absence of proof of fixation of other conditions mentioned in Exhibits A 1 and A 2, viz., undertaking by the 1st defendant to obtain per mission from Urban Land Ceiling Authority and the amount of advance to be paid.
It is not the case of the plaintiffs 1 and 2 that prior to 6.5.79 there was an agreement between the parties as to the amount of advance to be paid.
The High Court thus held that in the absence of any consensus being arrived at between the two contracting parties about these important aspects of the agreement it cannot be said that there is a concluded oral contract between the parties on 3.5.79.
It is important to note that even exhibit B 4 an agree ment of sale dated 22.6.79 executed between the 1st defend ant and defendants Nos. 3 and 4 does not impose the condi tion that the 1st defendant, the vendor, should obtain the clearance from the Urban Land Ceiling Authority within the stipulated period of six months.
The High Court in this regard observed that this evidence showed that the conten tion of the 1st defendant that the agreement fell through by reason of the plaintiffs insisting on her obtaining the permission from the Urban Land Ceiling Authority and the expression of her inability to comply with that demand appeared to be correct.
The High Court clearly held that there was no clinching evidence to show that this stipula tion was thought of by the parties on any day prior to 6.5.79.
The High Court, therefore, did not agree with the contention of the Learned Counsel for the plaintiffs that all the terms of contract including the stipulation with regard to the payment of advance amount and that the vendor alone should obtain the permission from the Urban Land Ceiling Authority were settled by 3.5.79 and what was left to be done on 6.5.79 was merely to incorporate the terms already arrived at into a formal document on Exhibits.
A 3 and A 4 stamp papers.
It was further observed that had there been a meeting between plaintiffs Nos. 1 and 2 and the first defendant on 3.5.79 and there was a direct conversation between them, there may be a possibility for drawing such an inference.
But, as observed already, what all had happened on 3.5.79 was that plaintiffs Nos. 1 and 2 expressed their willingness to pay a consideration of Rs. 10,00,000 for the suit building and the first defendant expressed her accept ance of that offer through D .W. 2.
The other terms could not have been settled between the parties in the third week of April, 1979 because by that time there was no agreement between the parties with respect to the sale consideration.
Without the price being settled, and especially when there was a gap of Rs.2,00,000 427 in the price accepted by the first defendant and the price offered by the first plaintiff, the parties would not have discussed the other terms of the agreement such as the advance money to be paid and the responsibility of the vendor to obtain the permission from the Urban Land Ceiling Authority.
It was submitted by the learned counsel for the appel lants that the High Court itself has arrived to a finding that D .W. 2 Sh.
Arif Ali on 3.5.79 after having a talk with defendant No. 1 on phone had conveyed her acceptance to sell the property for a sum of Rs. 10,00,000.
It was submitted that an agreement for sale of immovable property could be made orally and so far as mode of payment of consideration is concerned, can be settled subsequently.
It was submitted that in the facts and circumstances of the present case all the fundamental and vital terms of the contract were settled and concluded on 3.5.79 itself and even if the other details like mode of payment of consideration, obtaining of no objection certificate from Land Ceiling Authorities etc.
remained unsettled, the same could be determined in accord ance with Sec.
55 of the Transfer of Property Act.
Oral contract is permissible and so far as other terms which remain unsettled, the same can be determined by operation of law.
It was contended that the only vital terms for a valid agreement of sale of an immovable property were the identity of the property and the price.
Both these vital terms were settled and concluded on 3.5.79 and when the plaintiffs were always ready and willing to perform their part of the con tract, a decree for specific performance should have been passed in their favour.
It was further contended that the stand taken by the defendant No. 1 and tried to be supported by Sh.
Arif Ali D.W. 2 that no meeting took place on 3.5.79 at all was held not believable by the High Court itself.
It was further contended that the act of purchasing stamps on 3.5.79 by defendant No. 1 and the draft receipts Exhibits A 1 and A 2 prepared by Sh.
Arif Ali D.W. 2 himself clearly lend support to the case of the plaintiffs.
Reliance in support of the above contention was placed on Kollipara Sriramulu vs T. Aswathanarayana & Ors., ; and Nathulal vs Phoolchand, [1970] 2 SCR 854.
On the other hand it was contended on behalf of the respondents that no vital or fundamental terms of the con tract were discussed, agreed or settled on 3.5.79.
It was contended that even if the case of the plaintiffs is be lieved, all that happened on 3.5.79 was that plaintiffs had agreed to purchase the property for Rs. 10 lakhs to which the defendant N. 1 had conveyed her acceptance through D.W. 2.
Neither 428 any earnest/advance money to be paid was settled, nor, any time for the payment of such money or time for execution of agreement of sale or final sale deed and its registration, was settled.
It was argued that even if the time may not be an essence of a term of contract for sale of immovable property, it is a vital term without which no concluded contract can be arrived at.
Admittedly no meeting was held on 3.5.79 in the presence of the defendant No. 1 and it was agreed to have a meeting of the plaintiffs and defendant No. 1 on 6.5.79.
It was also an admitted position that neither any consideration passed nor any documents were signed by the parties on 3.5.79.
So far as 6.5.79 is concerned admit tedly the negotiations failed between the parties on that day.
It was further contended that if the terms had already settled on 3.5.79 itself where was the necessity of execut ing draft receipts on 6.5.79 and in any case if it was a mere formality then the plaintiffs should have brought a typed agreement on the stamps for formal signature of the parties.
It was also argued that the plaintiffs failed to examine Ibrahim Moosa who was an independent and a very important witness in the whole transaction and an adverse inference should be drawn against the plaintiffs for not examining Ibrahim Moosa.
The defendant No. 1 had produced a counter affidavit Exhibit C 1 dated 27.7.79 in reply to injunction application filed by the plaintiffs and she had taken a clear stand that no terms were settled or concluded on 3.5.79.
It was further argued that admittedly the plain tiffs had not paid any earnest/advance money to the defend ant No. 1 towards the alleged transaction but still they malafidely stated in the notice of 7.5.79 published in the Newspaper that an amount of Rs.50,000 had been paid to defendant No. 1.
The defendant No. 1 in these circumstances had immediately got published a contradiction on 8.5.79 and this clearly goes to show the malafide and ulterior motive of the plaintiffs.
It was also argued that any agreement in the third week of April, 1979 to the effect that defendant No. 1 would bring the no objection certificate from the Urban Land Ceiling Authorities was found not proved by the High Court and as such there is no question of applying any principles contained in Sec.
55 of the Transfer of Property Act.
It was also contended that the findings recorded by the High Court are supported by evidence and this Hon.
Court should not interfere against such finding in the exercise of its jurisdiction under Article 136 of the Constitution of India.
It was also argued that Sh.
Arif Ali was not holding general power of attorney on behalf of defendant No. 1 and he had no authority to settle or conclude any terms in respect of a transaction of immovable property on behalf of defendantlll No. 1.
No objection certificate was necessary to be obtained from Urban Land Ceiling Authorities and the defendant No. 1 and her husband being old person 429 had clearly taken the stand that they would not bring such certificate and no final and concluded contract took place on any date.
We have given our careful consideration to the arguments advanced by Learned Counsel for the parties and have thor oughly perused the record.
We agree with the contention of the Learned counsel for the appellants to the extent that there is no requirement of law that an agreement or contract of sale of immovable property should only be in writing.
However, in a case where the plaintiffs come forward to seek a decree for specific performance of contract of sale of immovable property on the basis of an oral agreement alone, heavy burden lies on the plaintiffs to prove that there was consensus ad idem between the parties for a concluded oral agreement for sale of immovable property.
Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case.
It has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were concluded between the parties orally and a written agreement if any to be executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agree ment.
Now we shall examine the facts and circumstances of the present case in order to find whether the plaintiffs have been able to prove that there was a concluded oral agreement between the parties on 3.5.79 in order to seek decree for specific performance of contract in their favour.
Admitted facts of the case are that the transaction in question related to a sale of an immovable property for no less than a sum of Rs. 10,00,000 in May, 1979.3.5.79 is the crucial date on which the oral agreement is alleged to have been concluded.
Admittedly on that date even earnest/advance money had not been settled.
It was also not settled as to when the earnest/advance amount and the balance amount of sale consideration would be paid.
It was also not settled as to when the final sale deed would be executed and regis tered.
No talk with regard to any terms of the oral agree ment took place in the presence of the vendor defendant No. 1 on 3.5.79.
It was also not decided whether actual posses sion or only symbolical possession of the premises in ques tion would be given by the vendor.
No consideration actually passed even on 6.5.79 and negotiations failed.
Apart from the above admitted facts of the case we would consider as to what happened on 3.5.79.
The plaintiffs have alleged in the plaint that in the 3rd week of April, 1979 plaintiffs Nos. 1 and 2 along with Sh.
Ibrahim Moosa and Sh.
Arif Ali went to the residence of the defendant who 430 was insisting on the payment of Rs. 10,00,000 as the sale price.
At the said meeting the husband of the defendant was also present.
The plaintiffs Nos. 1 and 2 increased their price from Rs.7,00,000 to Rs.8,00,000.
The first defendant said that she would think over and inform the plaintiffs Nos. 1 and 2 through Sh.
Arif Ali.
On 3.5.79 the plaintiffs 1 and 2 along with Shri Ibrahim Moosa met Shri Arif Ali.
He stated that the defendant was agreeable to sell the plan schedule property to plaintiffs only for Rs, 10,00,000 and not a pie less.
Thereupon the plaintiffs agreed to pay Rs. 10,00,000 as the sale price.
Shri Arif Ali after getting the confirmation of acceptance of the said offer of the plain tiffs No. 1 and 2 from the first defendant said that the plaintiffs Nos. 1 and 2 should meet the defendants on 6.5.79 and that she would in the meanwhile purchase the stamp papers for making the formal agreement for sale incorporat ing the oral agreement arrived at.
Then there is an averment with regard to the meeting of 6.5.79 between the first and second plaintiffs along with Shri Ibrahim Moosa and the first defendant and her husband in the presence of Sh.
Arif Ali.
It has been alleged that in the said meeting of 6.5.79 the amount of earnest money to be paid, time for registra tion of the sale deed etc. were decided.
Now it is an admit ted case of the plaintiffs themselves that negotiations failed on 6.5.79 and the defendant No. 1 resiled to sign any of the receipts nor accepted any earnest/advance money nor any agreement was even typed on the stamp papers nor signed by defendant No. 1.
In the oral evidence P.W. 1 Shri Brij Mohan, plaintiff No. 1 stated that in the meeting arranged in the 3rd week of April, 1979 Shri Ibrahim and Shri Arif Ali came to the plaintiff 's shop and then they all went to the residence of defendant No. 1.
The second plaintiff also accompanied them.
The husband of defendant No. 1 Shri Yunus was also present at the meeting.
He was introduced to them as the retired Law Secretary.
Defendant No. 1 insisted for Rs. 10,00,000 as consideration of the suit property and told the plaintiffs that she would obtain the permission from the ceiling au thority.
Shri Brij Mohan then stated that they raised their offer to Rs.8,00,000 defendant No. 1 told them that she would think over for two or three days and inform them through Shri Arif Ali, Thereafter Shri Brij Mohan states regarding the bargain held on 3.5.79.
According to him he himself, second plaintiff and Mr. Ibrahim Moosa went to Shri Arif Ali on 3.5.79.
Shri Arif Ali told them that defendant No. 1 was not willing to sell the suit property for less than Rs. 10,00,000.
And if they were willing to purchase for Rs. 10,00,000 then they were welcome to do so at any time.
Shri Brij Mohan then said that they agreed to purchase the suit property for Rs. 10,00,000 and asked Shri Arif Ali to get the confirmation from 431 defendant No. 1.
Shri Arif Ali spoke to defendant No. 1 on telephone and then informed that defendant No. 1 was willing to sell the property to them for Rs. 10,00,000.
Shri Arif Ali then said that they would buy the stamps for agreement and fixed 6.5.79 morning for a meeting with defendant No. 1.
From a perusal of the above evidence it would be abundantly clear that nothing was settled on 3.5.79 except the fact that the plaintiffs had conveyed their approval to purchase the suit property for Rs. 10,00,000 and Shri Arif Ali after speaking to defendant No. 1 was willing to sell the property for Rs. 10,00,000.
Admittedly at the same time a meeting was fixed with defendant No. 1 on the morning of 6.5.79.
Accord ing to the case set up by defendant No. 1 she had never agreed to obtain the permission from the ceiling Authority.
It would be important to note that no averment was made in the plaint that defendant No. 1 had agreed to obtain the permission from the ceiling Authority in the meeting held in the third week of April, 1979.
However, Shri Brij Mohan plaintiff has sought to introduce this fact for the first time in his statement in the Court that defendant No. 1 had told them in the meeting held in the third week of April, 1979 that she would obtain the permission from the ceiling Authority.
We are unable to accept the above statement of Shri Brij Mohan that in the meeting held in the third week of April, 1979 itself the defendant No. 1 had agreed that she would obtain the permission from the ceiling Authority.
It is an admitted position that till the meeting held in the 3rd week of April, 1979 the plaintiffs had offered Rs.8,00,000 and the first defendant had told them that she would consider and communicate her views through Shri Arif Ali some time later.
We agree with the conclusion of the High Court in this regard that without first determining the sale price, it was quite unlikely that the parties would have bargained as to who should obtain the clearance under the Urban Land Ceiling Act.
It was known.
to the parties that until the clearance under the Urban Land Ceiling Act and the Income Tax clearance, the property will not be registered.
The High Court was right in concluding that it is unbelievable that in the third week of April, 1979 when still there was a wide gap of Rs. 2,00,000 in the price payable for the suit building the parties would have stipu lated about the condition as to who should obtain the per mission under the Urban Land Ceiling Act.
It is further pertinent to mention that even in Exhibits A 1 and A 2 which are drafts of agreement of sale there is no reference to the oral agreement said to have taken place on 3.5.79.
In case all the terms had already been concluded in the oral con tract between the parties on 3.5.79 and only a formal agree ment was to be reduced in writing on 6.5.79, then in that case there ought to have been a mention in the draft agree ment exhibits A 1 and A 2 regarding the oral agreement of 432 3.5.79.
According to the statement of Shri Brij Mohan plain tiff No. 1 ,himself, nothing was discussed with defendant 'No. 1 herself and for that reason a further meeting was fixed at the house of the first defendant in the morning of 6.5.79.
Shri Arif Ali may have been an Income Tax Advocate looking after the income tax and wealth tax matters of defendant No. 1 but he was not a General Power of Attorney holder to negotiate or settle any terms with regard to any transaction of immovable property belonging to defendant No. 1.
It is further important to note that even in the agree ment to sell exhibit B 4 dated 22.6.79 between defendent No. 1 and defendants Nos. 3 and 4, no responsibility had been taken by the defendant No. 1 for obtaining the clearance from the Urban Land Ceiling Authority.
The High Court in these circumstances rightly believed the contention of the defendant No. 1 that the agreement fell through because the plaintiffs insisted that defendant No. 1 should obtain the permission from the Urban Land Ceiling Authority while defendant No. 1 did not agree for the same.
There was no clinching evidence to show that this stipulation was thought of by the parties on any day prior to 6.5.79.
Thus in the above circumstances when the parties were consciously nego tiating about the bringing of no objection certificate from the Urban Land Ceiling Authority and the case put forward by defendant No. 1 in this regard has been believed there is no question of applying the principle contained in Section 55 of the Transfer of Property Act.
The general principle contained in Sec.
55 of the Transfer of Property Act regard ing rights and liabilities of buyer and seller can only apply in the absence of a contract to the contrary and not in a case where the parties consciously negotiated but failed in respect of any term or condition, as a result of which the agreement itself could not be settled or conclud ed.
Once it is held, established in the present case that no agreement was finally concluded or settled on 6.5.79 and negotiations failed and before this date it was never set tled that defendant No. 1 would bring the no objection certificate from Urban Land Ceiling Authority, there is no question of applying general principles contained in Sec.
55 of the Transfer of Property Act.
In Kollipara Sriramula vs T. Aswathanarayana & Ors.
(supra) was a case where in 1953 respondent No. 1 filed a suit alleging that all the partners of the firm except the appellant had entered into an oral agreement with him on July 6, 1952 to sell 137 shares in the site except the 23 shares belonging to appellant No. 1, that 98 shares had actually been sold to him, that 39 shares had not been sold to him and had been instead sold to appellant No. 1.
Re spondent No. 1 in these circumstances claimed specific performance of the agreement to sell the 433 aforesaid 39 shares by their owners and contended that the sale of those shares in favour of appellant No. 1 was not binding upon him.
The Trial Court decided against respondent No. 1 but the High Court decided in his favour.
On the basis of above facts this Court held that the High Court was right in holding that there was an agreement to sell 137 shares in the site to respondent No. 1.
A mere reference to a future formal contract does not prevent the existence of a binding agreement between the parties unless the reference to a future contract is made in such terms as to show that the parties did not intend to be bound until a formal contract is signed.
The question depends upon the intention of the parties and the special circumstances of each particular case.
The evidence did not show that the drawing up of a written agreement was a pre requisite to the coming into effect of the oral agreement, nor did the absence of a specific agreement as to the mode of payment necessarily make the agreement ineffective, since the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed.
The facts of the above case clearly show that it related to sale of 137 shares and that in pursuance of the agreement partners who owned 98 shares had already executed sale deeds in favour of the plaintiffs/respondents and the other partners owning 39 shares did not do so.
The High Court as well as this Court believed the evidence of the plaintiff/respondent for con veying the entire 137 shares by an oral agreement dated July 6, 1952.
This Court also found that the plaintiff respond ents had built a valuable cinema theatre building on the disputed site and yet very strong reasons to make an out right purchase of the site otherwise he would be placed in a precarious legal position Negotiations for purchase were going on for several years passed and considering this background, the case of the respondent with regard to the oral agreement appeared highly probable.
In the above background this Court on Page 394 observed as under: "It is, therefore, not possible to accept the contention of the appellant that the oral agreement was ineffective in law because there is no execution of any formal written docu ment.
As regards the other point, it is true that there is no specific agreement with regard to the mode of payment but this does not necessarily make the agreement ineffective.
The mere omission to settle the mode of payment does not affect the completeness of the contract because the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed.
" 434 Thus even in the above case the time for completion of the sale was considered as one of the vital terms ' of the contract.
Further in the above case part of the agreement had been performed i.e. partners having 98 shares had al ready executed sale deeds and this Court had believed the oral agreement for sale of 137 shares.
Thus the above case is totally distinguishable and renders no assistance to the appellants in the case before us.
Thus we find no force in these appeals and the same are dismissed.
In the facts and circumstances of the case we make no order as to costs.
R.S.S. Appeals dis missed.

summary/full:
The appellants plaintiffs are ' four brothers.
They filed a suit against defendant No. 1, Smt.
Mahboobunnisa.
Begum, (Since deceased and represented by legal heirs) for specific performance of oral contract of sale of a building in Hyd erabad The property was later sold by defendant No.1 to defendants Nos. 3 and 4.
The plaintiffs ' case was that plaintiffs Nos. 1 and 2, on behalf of themselves and their younger brothers, plain tiffs Nos. 3 and 4, had preliminary negotiations for the purchase of the suit property through Shri Arif Ali, advo cate; that eventually on 3rd May, 1979 they met Arif Ali and offered to pay Rs. 10,00,000, which was the price demanded by the owner; that Arif Ali, after getting the confirmation of the said offer from the first defendant on phone, said that the plaintiffs should meet the first defendant on 6th May, 1979 and that she would in the meanwhile purchase the stamp papers for making the formal agreement of sale incor porating the oral agreement arrived at on 3rd May, 1979; that on 6th May, 1979 the plaintiffs met the first defendant in the presence of Arif Ali and other, wherein the amount of earnest money to be paid, time for registration of the sale deed etc.
were decided; that at that meeting Shri Arif Ali, prepared first and the final drafts of the receipt in his own handwriting and handed over these drafts to the first plaintiff to get the final draft typed and duly stamped; that Arif Ali also delivered the stamp papers to the first plaintiff for typing the formal agreement of sale; that at the meeting held on 6th May, 1979 the plaintiffs Nos. 1 and 2 were also permitted to proceed with the publication of the notices in the newspapers; that after the public notice was published, the first defendant got a reply notice published and got 414 issued a legal notice dated 8.5.79 through her advocate, alleging that there was no agreement for sale; that thereaf ter, the first and second plaintiffs made sincere and re peated attempts to convince the first defendant that there was in existence a concluded contract for sale of the suit property, and that the execution of the agreement of sale was a mere formality.
On these allegations, the plaintiffs sought the relief of specific performance of the agreement.
The first defendant in her written statement stated that certain negotiations had taken place between her and plain tiffs Nos. 1 and 2, but the negotiations had failed.
It was further stated that there was no concluded or enforceable contract between the parties; that no price was settled or agreed upon and even the condition for advance payment and other terms and conditions were not agreed upon; that no final receipt or document had been prepared; and that the first defendant never asked for the purchase of stamp pa pers.
The Trial Court found that on the facts and circum stances of the case, it was established that the plaintiffs had entered into an oral contract of sale with the first defendant on 3.5.79.
The Trial Court accordingly decreed the plaintiffs ' suit for specific performance.
Two separate appeals were filed in the High Court.
A Division Bench of the High Court allowed the appeals and set aside the decree passed by the trial court.
The High Court held that in order to determine the binding nature of a contract between the parties, the mere acceptance of sale price was not sufficient.
The High Court further observed that in the absence of evidence that the other terms also were discussed over the phone and settled on 3.5.79, it could cot be said that there was a concluded contract on 3rd May, 1979, and that it was obviously for that reason that a further meeting was fixed at the house of the 1st defendant on 6th May, 1979.The High Court did not agree with the contention of the plaintiffs that all the terms of contract, including the stipulation with regard to the payment of advance amount and the vendor 's responsibility to obtain the permission from the Urban Land Ceiling Authority, had been settled by 3.5.79 and what was left to be done on 6.5.1979 was merely to incorporate the terms already arrived at into a formal document on stamp paper.
Before this Court lit was contended on behalf of the appellants that an agreement for sale of immovable property could be made orally; that in the facts and circumstances of the case all the fundamental and vital terms of the contract were settled and concluded on 3.5.1979 itself and 415 even if the other details like mode of payment of considera tion, obtaining of no objection certificate from Land Ceil ing Authorities etc.
remained unsealed, the same could be settled subsequently or determined in accordance with sec.
55 of the Transfer of Property Act; that the only vital terms for a valid agreement of sale of an immovable property were the identity of the property and the price; that both these vital terms were settled and concluded on 3.5.79; and that the act of purchasing stamps on 3.5.79 by defendant No. 1 and the draft receipts, prepared by Shri Arif Ali, clearly lent support to the case of the plaintiffs.
Kollipara Sriramulu vs T. Aswathanarayana & Ors., ; and Nathulal vs Phoolchand, [1970] 2 SCR 854, relied upon.
On the other hand, it was contended on behalf of the respondents that no vital or fundamental terms of the con tract were discussed, agreed or settled on 3.5.79; that neither any earnest/advance money to be paid was settled, nor, any time for the payment of such money or time for execution of agreement of sale or final sale deed and its registration, was settled; that even if time may not be an essence of a term of contract for sale of immovable proper ty, it was a vital term without which no concluded contract could be arrived at; that any agreement in the third week of April, 1979 to the effect that defendant No. 1 would bring the no objection certificate from the Urban Land Ceiling Authorities was found not proved by the High Court and as such there was no question of applying the principles con tained in section 55 of the Transfer of Property Act; that a no objection certificate was necessary to be obtained from Urban Land Ceiling Authorities and the defendant No. 1 and her husband being old persons had clearly taken the stand that they would not bring such certificate; and that there fore no final and concluded contract took place on any date.
Dismissing the appeals, this Court, HELD: (1) There is no requirement of law that an agree ment or contract of sale of immovable property should only be in writing.
However, in a case where the plaintiffs come forward to seek a decree for specific performance of con tract of sale of immovable property on the basis of an oral agreement along, heavy burden lies on the plaintiffs to prove that there was consensus ad idem between the parties for a concluded oral agreement for sale of immovable proper ty.
Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case.
It 416 has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were con cluded between the parties orally and a written agreement if any to be executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agreement.
[429B D] (2)From a perusal of the evidence it would be abun dantly clear that nothing was settled on 3.5.79 except the fact that the plaintiffs had conveyed their offer to pur chase the suit property for Rs. 10,00,000 and Shri Arif Ali, after speaking to defendant No. 1 on phone conveyed that she was willing to sell the property for Rs. 10,00,000.
[431B] (3) No averment was made in the plaint that defendant No. 1 had agreed to obtain the permission from the Urban Land Ceiling Authority in the meeting held in the third week of April, 1979.
The High Court was right in concluding that it was unbelievable that in the third week of April, 1979 when still there was a wide gap of Rs.2,00,000 in the price payable for the suit building, the parties would have stipu lated about the condition as to who should obtain the per mission under the Urban Land Ceiling Act.
[431C F] (4) The High Court rightly believed the contention of defendant No. 1 that the agreement fell through because the plaintiffs insisted that defendant No. 1 should obtain the permission from the Urban Land Ceiling Authority while defendant No. 1 did not agree for the same.
[432C] (5) The general principles contained in section 55 of the Transfer of Property Act regarding rights and liabili ties of buyer and seller can only apply in the absence of a contract to the contrary and not in a case where the parties consciously negotiated but failed in respect of any term or condition, as a result of which the agreement itself could not be settled or concluded.
[432E] (6) Once it is held/established in the present case that no agreement was finally concluded or settled on 6.5.79 and negotiations failed, as before this date it was never set tled that defendant No. 1 would bring the no objection certificate from Urban Land Ceiling Authority, there was no question of applying general principles contained in section 55 of the Transfer of Property Act.
[432F] Kollipara Sriramulu vs T. Aswathanarayana & Ors.
, ; , distinguished.


judgement:
(Civil) No. 511 of 1988.
WITH Writ Petition (Civil) No. 975 of 1988.
391 (Under Article 32 of the Constitution of India).
K.V. Sreekumar, (N.P.) for the Petitioners.
V.C. Mahajan, A.K. Panda, Ms. C.K. Sucharita, and Ms. A. Subhashini for the Respondents.
The Court delivered the following Order: One of the matters which arises for consideration in this Writ Petition is as to how the provisions of the inter state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, and particularly of sec tion 20 thereof can be enforced.
In the affidavit filed by the Union of India in the Ministry of labour it has been stated that in view of the scheme contained in section 20(3) of the Act that officer of the Originating State can make enquiries within the Recepient State provided the Recepient State agrees to such Officers of the Originating State operating within that State, the law has not become workable in a proper way.
This is a beneficial legislation for satis fying the provisions of the Constitution and the obligation in international agreements to which India is a party.
We do not think there can be any valid justification for not permitting the officers of the Originating State to hold appropriate enquiries in the Recepient State in regard to persons of the Originating State working as migrant labour in the Recepient State.
We do not think that there is any necessity to hear the other States before making an order for enforcing section 20(3) and to give effect to the legis lative intention contained therein.
Mr. Panda appearing for the State of Orissa has agreed that Orissa State has no objection to officers of any origi nating State holding necessary enquiries within Orissa when it is a Recepient State.
We would, therefore, make a direc tion that to implement the provisions of the Act of 1979 referred to above every State and Union Territory in India would be obliged to permit Officers of originating States of migrant labour for holding appropriate inquiries within the limits of the Recepient States for enforcement of the stat ute and no Recepient State shall place any embargo or hin drance in such process.
Copy of this order shall be sent to the Chief Secretary of every State and Union Territory for compliance.
We are cognizant of the fact that this order has been made with 392 out hearing the States other than Orissa and the Union Territories.
In the event of any State or Union Territory is of the opinion that the direction should be modified, liber ty is given to apply for modification of the order but until it is modified it shall remain in force.
The Writ Petitions are disposed of with this order.
No costs.
T.N.A. Petitions disposed of.

dataset_name: IN-Abs

summary/full:
In these petitions on the question: as to how the provi sions of the Inter State Migrant Workmen (Regulation of Employment and Condition of Service) Act, 1979 can be en forced.
Disposing the Writ Petitions, this Court, HELD: 1.
Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 is a benefi cial legislation for satisfying the provisions of the Con stitution and the obligation in international agreements to which India is a party.
There is no valid justification for not permitting the officers of the Originating State to hold appropriate enquiries in the Recepient State in regard to persons of the Originating State Working as migrant labour in the Recepient State.
[391D E] 2.
To implement the provisions of the Act every State and Union Territory in India would be obliged to permit officers of originating States of migrant labour for holding appropriate inquiries within the limits of the Recepient States for enforcement of the statute and no Recepient State shall place any embargo or hindrance in such process.
[391G]


judgement:
ivil Appeal No. 101 of 1950.
Appeal by special leave from the Judgment and Decree dated the 20th September, 1949, of the High Court of Judica ture at Calcutta (Hurries C.J.and Chatterice J.) in Appeal No. 46 of 1949 arising out of Decree dated the 31st August, 1948, of the Hon 'ble S.B. Sinha J. of the Calcutta High Court in Suit No. 343 of 1943 instituted under the Original Jurisdiction of the High Court).
M.C. Setalvad, Attorney General for India (B. Sen,with him) for the appellant.
S.C. Isaac (B. Barterice, with him) for the respond ent. 1951.
December 18.
The leading judgment was delivered by Bose J. Fazl Ali J. agreed, 180 Bose J.
This is a defendant 's appeal in a suit for contribution brought by the son of a mortgagor against the co mortgagors.
The parties are related as below : Balai Lall Seal (died1917) I Megharnala Dassi (died 1945) I I I I I Bejoy Lall Biswa Lall Tarak Lall Kedar Lall NakuLall (D. 23 5 33) (D. Nov. 1936) Deft 1 Deft. 2 (Born (Born I I Jugal Lall Hari Lall 22 11 1907) 7 2 1910) (Plff.) The mortgagors were the plaintiff 's father Tarak Lall and Tarak 's two brothers Kedar and Naku.
The mortgage was exe cuted on the 12th June, 1936, in favour of one Mst.
Gyarsi for a consideration of Rs. 80,000.
For convenience I will call this the suit mortgage though this is not a suit on the mortgage.
The mortgagee sued in the year 1938 and obtained a preliminary decree for sale on the 17th of February, 1939, for a sum of Rs. 89,485 12 9 plus costs.
The decree was made final on the 22nd of December, 1989.
In execution the mortgagee proceeded against the proper ty of the plaintiff alone (as Tarak 's son) and, during the pendency of the execution, assigned her rights in the decree to the Hooghly Flour Mills.
The Mills continued the execu tion and on the 11th of March, 1943, the claim was satisfied in this way.
An order of the Court was obtained sanctioning sale of a part of the mortgaged property, 20 Round Tank Lane (which belonged exclusively to the plaintiff), to the decree holder for a sum of Rs. 1,50,000.
It was directed that the consid eration should first be applied in payment of the claim and costs and that the decreeholder should execute a reconvey ance of the rest of the mortgaged properties in favour of the mortgagors.
The sanction of the Court was necessary because the judgment debtor Hari Lall (present plaintiff) was a minor.
181 This was done and 20, Round Tank Lane, was conveyed by the present plaintiff to the Hooghly Flour Mills on the 18th of March, 1943.
Out of the consideration a sum of Rs. 97,116 11 0 was paid to the Mills in lull satisfaction of the claim and costs then outstanding.
The Mills executed a reconveyance of the rest of the properties to the mortgagors in release of the mortgage on the same day.
In addition to this Rs. 97, 116 11 0, further sums of Rs. 14,400 and Rs. 8,100 had also been paid before the dates of these transactions.
These sums were paid by a Receiver who had been appointed by the Court pendente lite.
These sums came out of the rents which the Receiver obtained from the plaintiff 's property, 20 Round Tank Lane.
The plaintiff says that in this way he paid a total of Rs. 1,19,116 11 0 in satisfaction of the mortgage.
His one third share in this comes to Rs. 39,872 3 8.
He claims that he is entitled to receive the balance of Rs. 79,744 7 4 from the two defendants and that each of them is liable for a half of that sum namely, Rs. 39,872 3 8.
In addition to this the plaintiff had incurred costs amounting to Rs. 1,144 8 6 in resisting Mst.
Gyarsi 's claim and in connection with the reconveyance.
He also claims one third of this sum, namely Rs. 381 8 2, from each of the defendants.
The total claim against each defendant accord ingly comes to Rs. 40,253 11 10.
In addition to this the plaintiff asked for (1) "a declaration that the properties mentioned in Schedule 'A '. belonging to the defendants stand charged with the repayment of the sum of Rs. 80,507 7 8 being the aggregate amount due and payable by the two defendants," and (2) "Decree under Order XXXIV of the Civil Procedure Code in proper form." Schedule A contains a list of the rest of the mortgaged properties which belong exclusively to the defendants, 24 182 It will be seen that the plaintiff claims on the basis that each of the three mortgagors is liable to contribute in equal shares towards payment of the mortgage debt.
The defendants did not deny their liability to contribute.
They only challenged the basis on which it was to be comput ed.
They ,pleaded a special agreement between Tarak Lal and themselves under which their liabilities were to be calcu lated in the following way.
According to them, the bulk of the Rs. 80,000 was borrowed on what I have called the suit mortgage to pay off previous debts which had been incurred by the parties on earlier mortgages.
The amount which went towards satisfaction of the defendant 's portion of these earlier liabilities was only Rs. 13,259 2 4.
Therefore, the only benefit they got out of this Rs. 80,000 was to that extent.
The plaintiff 's father Tarak on the other hand benefitted to the extent of Rs. 53,481 11 4.
They therefore agreed at the date of the suit mortgage that their respec tive liabilities as between themselves should be proportion ate to the benefit derived by each as above.
Sinha J., who tried the suit on the Original Side of the Calcutta High Court, held that the agreement was proved.
On appeal the learned Chief Justice of the High Court and Chatterjee J. disagreed and held that it was not.
As I agree with the learned appellate Judges for reasons which I shall give hereafter, it will be necessary to set out the further facts.
But I need not do so in any detail as they are given in full in the two judgments of the High Court.
We are only concerned here with the question of principle; so it will be more convenient to reduce the problem to its simplest terms.
We are concerned here with four items of property which I shall term Chittaranjan Avenue, Strand Road, No. 16 Round Tank Lane and 20 Round Tank Lane.
These properties were originally joint family properties, but in the year 1932 there was a partition which was compelled by reason of a suit filed by Tarak 183 against his brothers and mother.
The upshot was that the properties were divided as follows: (1) Bejoy, Kedar, Naku and the mother Meghamala obtained Chittaranj an Avenue.
(2) Tarak (plaintiff 's father) obtained 16 Round Tank Lane and 20 Round Tank Lane.
(3) Kedar, Naku and Biswa Lall obtained Strand Road.
Before this partition there were three mortgages: The first of these was executed on the 16th of June, 1925.
All five brothers joined in it and they mortgaged the Strand Road property for Rs. 10,000.
This was in favour of Bhuvan Chandra Bhur.
The second was on the 11th of October, 1926.
In this Bejoy and Tarak mortgaged their 2/5 share in Chittaranjan, Strand, Dum Dum and 20 Round Tank Lane for Rs. 5,000.
The mortgagee was Binode Behari Sen.
The third was on the 28th January, 1927.
In this Bejoy and Tarak again mortgaged their 2/5 share in the same items of property for Rs. 7,000 to Binode Behari Sen and Kunja Behari Sen.
All three sets of mortgagees, or their representatives, instituted suits on their respective mortgages and obtained final decrees Bejoy died on the 23rd of May, 1933, leaving a son Jugal.
On the 12th of June, 1936, came what I have called the suit mortgage executed by the three brothers,Tarak, Kedar and Naku, for Rs. 80,000.
The properties mortgaged were (1) the shares of Kedar and Naku in Chittaranjan Avenue and 16 Round Tank Lane; (2) 20 Round Tank Lane which had been allotted to Tarak; (3) the reversionary interest of all three in the share allotted to the mother.
The consideration of Rs. 80,000 was expended as follows:Rs.
29,667 10 0 was paid by Tarak, Kedar and Naku in satisfaction of the first mortgage and the 184 later decretal charge; Rs. 11,519 11 0 in satisfaction of the second and Rs. 13,502 14 0 in satisfaction of the third.
The balance of Rs. 25,310 is alleged by the appellants to have been retained by Tarak.
I have taken these figures from the judgments of the High Court.
I understand some of the details are disputed, so I make it clear that I am not setting out the decision of this Court regarding the de tails but only giving an overall picture.
Shorn of overburdening detail the problem, reduced to its simplest terms, comes to this.
Three persons A, B and C separately own properties of unequal value, Blackman, Whiteacre and Greenacre.
Let us assume that their values at the material date are Rs. 30,000, Rs. 20,000 and Rs. 10,000 respectively.
A, B and C, acting in various combinations from time to time, incur debts.
It matters not for present purposes whether those debts are secured on these properties or not because a time must come when their separate liabilities as amongst themselves have to be ascertained and apportioned.
Let us assume that when that is done, A 's responsibility extends to Rs. 2,000, B 's to Rs. 3,000 and C 's to Rs. 5,000.
In order to clear off these debts, A, B and C jointly mortgage their three estates for Rs. 10,000, the total aggregate sum due at the date of the mortgage from the three of them.
There is no contract between them, either in the mortgage deed or otherwise, regarding their respective shares of responsibility in the Rs. 10,000.
At the date of redemption the mortgage debt has swollen to Rs. 15,000.
A alone redeems by selling Blackacre, which is his separate estate, to the mortgagee for Rs. 35,000 that being the value of Blackacre at the date of redemption.
Rs. 15,000 of this is applied in satisfaction of the mortgage debt and the balance of Rs. 20,000 is retained by A.
What are A 's rights as against B and C ? Three solutions readily suggest themselves.
One is that the three contribute equally.
In that event B would pay A Rs. 5,000 and C would pay Rs. 5,000.
185 A second solution is that they pay in proportion to the extent of the benefits derived.
In that event B 's share would be 3/10 of Rs. 15,000, that is to say, Rs. 4,500.
and C 's would be 5/10 of Rs. 15,000, that is Rs. 7,500.
A third solution is that they pay proportionately to the values of the properties mortgaged.
In that event B would have to pay 2/6 of Rs. 15,000, that is Rs. 5,000, and C 1/6 of Rs. 15,000 ' which come to Rs, 2,500.
The problem is to know which of these three solutions to apply.
In the absence of other considerations, the most equitable solution is obviously the second.
But the matter is not as simple as that.
There are certain statutory provi sions which must first be examined.
The learned counsel for the plaintiff respondent con tended that section 43 of the Contract Act applied.
He relied on the following provision : "Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract.
If any one of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares.
" The argument is that unless a contrary intention appears from "the contract" the.
loss must be borne equally.
It was contended, and with that I agree, that the words "the con tract" can only refer to the main contract between the promisors on the one side and the promisee on the other.
That contract in this case is the suit mortgage.
There is no contract to the contrary in the document, therefore, it was contended, the section must apply.
That of course would be the clear, logical and simple conclusion ii there were no other provision of law to consider.
But we are dealing here with a mortgage and so we have also to look to the provisions of the Transfer of Property Act.
186 Incidentally, if this argument is pushed to its logical conclusion it would exclude any collateral or subsequent agreement between the promisors inter se which does not appear in the main contract.
But we need not enter into that here.
The sections of the Transfer of Property Act which concern us are 82 and 92.
The first confers a right of contribution.
The second a right of subrogation.
I will consider section 82 first.
It runs : "Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of owner ship therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage . . " That is the position here.
Next I turn to section 92.
That runs " . any co mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor . " That also applies.
Now these provisions at once raise a competition between sections 82 and 92 of the Transfer of Property Act, section 43 of the Contract Act and what I might term the principle of beneficial, as opposed to proportionate or equal, distri bution of liability.
I am of opinion that the second solution adumbrated earlier in this judgment, based on equities, must be ruled out at once.
These matters have been dealt with by statute and we are now only concerned with statutory rights and cannot in the face of the statutory provisions have recourse to equitable principles however fair they may appear to be at first sight.
The Privy Council pointed out in Rani Chhatra Kumari vs Mohan Bikram (1) that the doctrine of the (1) Pat. 851 at 869.
187 equitable estate has no application in India.
So also refer ring to the right of redemption their Lordships held in Mohammad Sher Khan vs Seth Swami Dayal(1) that the right is now governed by statute, namely section 60, Transfer of Property Act.
Sulaiman c.
J. (later a Judge of the Federal Court) ruled Court equitable considerations in the Allahabad High Court in matters of subrogation under sections 91, 92, 101 and 105, Transfer of Property Act, in Hira Singh vs Jai Singh(2) and so did Stone C.J. and I in the Nagpur High Court in Taibai vs Wasudeorao (3).
In the ease of section 82 the Privy Council held in Ganesh Lal vs Charan Singh(4) that that section prescribes the conditions in which contribution is payable and that it is not proper to introduce into the matter any extrinsic principle to modify the statutory provisions.
So, both on authority and principle the deci sion must rest solely on whatever section is held to apply.
So far as section 43 is concerned, I am not prepared to apply it unless sections 82 and 92 can be excluded.
Both sections 43 and 82 deal with the question of contribution.
Section 43 is a provision of the Contract Act dealing with contracts generally.
Section 82 applies to mortgages.
As the right to contribution here arises out of a mortgage, I am clear that section 82 must exclude section 43 because when there is a general law and a special law dealing with a particular matter, the special excludes the general.
In my opinion, the whole law of mortgage in India, including the law of contribution arising out of a transaction of mort gage, is now statutory and is embodied in the Transfer of Property Act read with the Civil Procedure Code.
I am clear we cannot travel beyond these statutory provisions.
Now, when parties enter into a mortgage they know, or must be taken to know, that the law of mortgage provides for this very question of contribution.
It confers rights on the mortgagor who redeems and directs that, in the absence of a contract to the contrary, he (1) (1922) 49 I.A. 60 at Nag. 206 at 216.
(2) A.I.R. 1937 All.
588, at 594.
(4) (1930) 57 I.A. 189.
188 shall be reimbursed in a particular way out of particular properties.
The parties are at liberty to vary these rights and liabilities by special contract to the contrary but if they do not do so, I can see no reason why these provisions should be abrogated in favour of a section in the Contract Act which does not deal with mortgages.
Slightly to vary the language of the Judicial Committee it is the terms and nature of the transaction viewed in the light of the law of mortgage in India which exclude the personal liability and therefore section 43, except where there is a contract to the contrary.
It was suggested that the rule is inequitable and will operate harshly in cases like the present.
But the remedy lies in the parties ' own hands.
It is open to them to make a contract to the contrary.
If they do not, then the law steps in and makes statutory rules to which effect must be given.
It is not for judges to consider whether that is the best possible solution but the rule at any rate obviates the necessity of roving enquiries into the objects of a borrow ing and the application of the funds.
On an overall basis it is perhaps as good as any other.
But that hardly matters.
The rule is there and full effect must be given to it.
The learned counsel for the plaintiff respondent urged that the defendants are shut out from relying on section 82 because that was not their case and the question was never raised by them in the High Court.
Such reference as there is to the section was with reference to an argument urged on behalf of the plaintiff.
I am not impressed with this objection.
, On the facts set out by the plaintiff it is evident that he is entitled to contribution.
The method of computation is a matter of law and it is for the judges to apply the law to the facts stated and give the plaintiff such relief as is appropriate to the case.
I turn now to the question of fact, the special agree ment pleaded by the defendants.
The only evidence in sup port of it is that of the first defendant Kedar.
According to him, the agreement was an oral one 189 though the parties contemplated writing and registration.
His explanation for lack of any writing is this.
He was asked whether anything was put down in writing and he re plied : "No, nothing was done then, but there was an understand ing that it would be done but Tarak went away to Darjeeling and when he came back he died soon after he came back and nothing could be done in writing.
" Later, he was asked "Therefore, you, contemplated that there would be a document which would have to be registered in connection with the adjustment ?" and he replied ' 'Yes".
He also tells us that the parties regarded the matter as confidential and so only three per sons were present, Tarak, Naku and himself.
It is to be observed that Naku, who is the second defendant, has not entered the box.
Stopping there, it is evident that we have to rely on the memory of a very interested person speaking nearly thirteen years after the event about a transaction affecting some Rs. 80,000.
Nor is it the memory of some simple event which might well have fixed itself in his mind.
The question whether and at what stage parties reach finality when writ ing is in contemplation is a difficult and complex one involving delicate considerations of much nicety even when the preliminaries are all in writing.
The turn of a phrase here, the use of a word there, may make a world of differ ence.
The law regarding this was examined by me at some length in the Nagpur High Court in Shamjibhai vs Jagoo Hernchand Shah (1).
How much greater are the difficulties when we do not know the exact words the parties used and have to delve into the mind of a dead man (Tarak) through the impressions of an interested witness given some thirteen years after the event.
I find it difficult to accept this version and consider it would be dangerous to do so, particularly when the (1) I.L.R. at 586 588, and 598 25 190 witness is a hesitant and reluctant one, as his examination discloses, and even evasive on some points; also when the defendants have deliberately withheld from the Court assist ance which it was in their power to render I refer to the absence of Naku, the only other person present, from the box.
I am unable to accept this testimony.
Nor is this the only point.
Despite the insistence of the witness that the parties were on good terms and trusted each other, the fact remains that Tarak found it necessary to institute a suit for partition against his brothers and fight it to a finish.
They were not able to arrange matters amicably.
it was suggested in argument that was probably because of creditors who could not be persuaded to agree and it was pointed out that creditors were joined in the suit, but that is not wholly convincing particularly when it is admitted that Tarak was insisting on writing and regis tration.
It is evident that he, at any rate, was not prepared to leave matters as they were and trust to the good faith of his brothers.
Now we know that Tarak was in Calcutta about three months after the date of the alleged agreement.
We also know that Kedar was most anxious to have such an agreement, for he tells us so.
He tells us further that there was before them a rough draft of the terms.
That document was produced in Court.
But the draft was neither signed nor initialled.
The only inference I can draw from these facts is that Tarak either refused to agree or had not made up his mind.
The figures put forward by the defendants were contested on behalf of the plaintiff and we were given an alternative set of figures which in turn were contested by the other side, but they were enough to show that the matter is not as straightforward or as simple as the defendants would have us believe.
Therefore, Tarak 's inaction during the three months and the omission of either side to initial the draft point clearly, at the lowest, to hesitancy on Tarak 's part.
It may be he wanted his lawyers to examine his position or it may be he refused to have anything to do with it.
191 It is just possible that there were negotiations, but on those broad facts I am not prepared to believe the witness when he tells us, or rather suggests, that the parties reached finality.
It would in any event be dangerous to believe a witness in circumstances like this.
But when the defendants deliberately withheld from the Court that assist ance which is its due I can only conclude that their case was too shaky to stand further proving.
On these broad grounds alone I would hold that the agreement is not proved.
Much was made in argument about the rule regarding the weight to be given to the estimate of the judge who saw and heard a witness.
I do not doubt the soundness of the rule but it can be pushed too far as their Lordships of the Judicial Committee pointed out in Virappa vs Periakaruppan(1).
In the present case, the learned Judge who tried the case believed Kedar not because of his demea nour but because the learned Judge considered that his story was inherently probable.
That, however, is a matter which the learned appellate Judges were in as good a position to appreciate as the learned trial Judge.
If probability is to be the test, then the conduct of Tarak suggests that it is very improbable that he could have agreed.
That leaves at large the nature of the relief to which the plaintiff is entitled.
In the view I take, there being no contract to the contrary, the plaintiff 's only remedy is under section 92 of the Transfer of Property Act read with section 82.
The question is, has his suit been so framed ? The plaintiff has claimed separate personal reliefs against the defendants.
As there is no personal covenant as between the mortgagors or any "contract to the contrary", that relief ' cannot be granted.
The plaintiff has also asked for a declaration of charge and for a decree under Order XXXIV, Civil Procedure Code.
The declaration of charge standing by itself is superfluous although Order XXXIV, rule 2 (1) does require that the decree in a mortgage suit shall (1) A.I.R. 1945 P.C. 35 at 37.
192 "declare the amount so due" at the date of the decree.
But reading the two reliefs together, I am of opinion that though the claim is inartistically worded the plaintiff has in substance asked for a mortgage decree up to a limit of Rs. 40,253 11 10 with interest against each defendant.
No other kind of decree could be given under Order XXXIV.
Therefore, though he has not used the word "subrogation" he has asked in substance for the relief to which a subrogee would be entitled under the Transfer of Property Act.
I would be slow to throw out a claim on a mere techni cality of pleading when the substance of the thing is there and no prejudice is caused to the other side, however clum sily or inartistically the plaint may be worded.
In any event, it is always open to a court to give a plaintiff such general or other relief as it deems just to the same extent as if it had been asked for, provided that occasions no prejudice to the other side beyond what can be compensated for in costs.
In the circumstances, in the absence of agreement be tween the parties as to the figures, I would remand this case to the High Court for (1) an enquiry regarding the sum paid by the plaintiff 's father for satisfaction of the mortgage dated the 12th June, 1936, (2) for the interest due on that sum at the contract rate in the mortgage from the date of payment to the date of decree, (a) lot the values of the various properties mortgaged at the date of the mort gage.
When the figures are ascertained, I would direct that the liability of each defendant be ascertained separately in the manner prescribed by section 82, Transfer of Property Act.
the event of this liability exceeding Rs. 40,253 11 10 with interest against either defendant, I would direct that his liability be reduced to Rs. 40,253 11 10 plus interest.
When these figures are ascertained, I would direct that a mortgage decree for sale be drawn up in the usual way affording either defendant the right to redeem the whole of the balance of the property 193 (excluding the plaintiff 's) for the aggregate sum due as above and, in default of payment, limiting the liabilities of each item of property to the sum rateably due on it under section 82.
On the question of costs.
The plaintiff repudiated section 82 in the course of the arguments before us and rested his case on section 43 of the Contract Act, nor did he clearly and unmistakably plead a case of subrogation in his plaint even in the alternative.
The defendants, on the other hand, set up a case which has failed on the facts.
I would, therefore, direct each side to bear its own costs in this appeal.
As regards the costs incurred in the Courts below and any costs which may be necessitated by a further enquiry, they will be determined according to the final result of the litigation and with due regard to all matters bearing on the question of costs.
FAZL ALI J.
I agree.
Case remanded.

summary/full:
The right to contribution as between co mortgagors is governed by sections 82 and 92 of the Transfer of Property Act and not by section 43 of the Indian Contract Act, inasmuch as section 43 of the Contract Act deals with contracts generally, while sections 82 and 92 of the Transfer of Property Act specifically deal with the right of contribution between co mortgagors.
It is an established principle that when there is a general law, and a special dealing with a particular matter, the special excludes the general.
Consequently, in the absence a contract to the contrary, co mortgagors are bound to con tribute proportionately to the value of the shares or parts of the mortgaged property owned by them and not in propor tion to the extent of the benefits derived by each of them.
As sections 82 and 92 of the Transfer.
of Property Act prescribe the conditions in which contribution is payable in India when there is a mortgage, it is not proper to introduce into the matter extrinisic principles based on equitable consid erations.