There remains the question of the amount of damages. The plaintiff was clearly entitled to sue at his option either for specific performance or for compensation for breach of contract or for both. He has chosen to sue for compensation. It has been pointed out in 40 Mad. 338, 38 Cal. 455 and 32 Bom. 165 that the law of India in respect of breaches of contract for the sale of immovable property differs from that of England and that the ordinary rule laid down in Section 73 of the Contract Act applies to such breaches. The Calcutta and Bombay cases also lay it down that the measure of damages ordinarily should be the difference between the contract price and the market value at the date of breach though it is remarked in 32 Bom. 165 that each case has to be considered on its own merits.
IN THE HIGH COURT OF LAHORE
Decided On: 10.04.1923
Appellants: Akhtar Beg and others
Vs.
Haq Nawaz, Advocate, High Court Lahor Haq Nawaz, Advocate, High Court Lahore, Bashir Ahmed, Bar-at-law, son and legal representative of the Hon'ble Mr. Muhammad Shah Din, C.J.
Hon'ble Judges/Coram:
Campbell and Moti Sagar , JJ.
Citation: 78Ind. Cas.87,(1924)Lah709
1. On 2nd February '1913' Mirza Asad Beg agreed to sell. to the late Mr. Justice Shah Din of Lahore certain landed property at Azamabad in the Lahore District for Rs. 1,72,000 and was handed a cheque for Rs. 5,000 as earnest money, for which he gave Mr. Justice Shah Din a receipt. On the same date Mirza Asad Beg wrote to Mr. Shah Din saying that he would not be able to come to his house on either of the following two days as he would be busy with a case but that "the rest will be complied with." On 17th February, 1913, Mirza Asad Beg again wrote to Mr. Justice Shah Din returning him the cheque and saying that the agreement to sell had been dependent on the consent of his sons, that this consent had not been given and that he had decided not to sell the land. Mr. Haq Nawaz, Barrister, nephew of Mr. Justice Shah Din replied on the latter's behalf that Mirza Asad Beg could not withdraw from the agreement, and sent back the cheque. On the 1st March Mirza Asad Beg repeated his inability to conclude the sale and returned the cheque once more. The correspondence closed with a letter by Mr. Haq Nawaz, dated 25th March in which Mirza Asad Beg's obligation was again asserted. These facts are not disputed.
2. On 10th February 1916, Mr. Justice Shah Din transferred to Mr. Hak Nawaz by registered deed of gift all his rights under the contract with Mirza Asad Beg of the 2nd February, 1913. Mr. Haq Nawaz gave notice the same day to Mirza Asad Beg to complete the sale and a week later on 17th February, 1916, instituted a suit against him with Mr. Justice Shah Din as the second defendant and claimed Rs. 15,000 damages for breach of contract stating the cause of action to be failure to reply to the notice of 10th February, 1916.
3. The suit was resisted by Mirza Asad Big but unsuccessfully.
4. The first three issues, which were as follows, were found against him:-
(1) Whether the assignment of Mr. Justice Shah Din in favour of the plaintiff is invalid;(2) whether the suit is within limitation and (3) whether there was a condition in the contract that it will be performed, if the sons of defendant No. 1 (Mirza Asad Beg) agree. On the fourth issue regarding the damages to which the plaintiff was entitled, the trial court awarded him the full sum claimed. Mr. Asad Beg's sons have appealed, he having died.
5. The principal points which have been argued on their behalf are in regard to the first and last issues. The contentions that the suit is time barred, because the breach took place on 17th February, 1913 and the suit was institued one day over 3 years later i.e. on 17th February, 1916, is effectively answered by reference to the provisions of Section 12 (i) of the Limitation Act. Regarding the third issue we agree with the court below that there is no proof of the contract having been subject to the reservation that Mirza Asad Beg's sons should consent. The terms of Mirza Asad Beg's letter to Mr. Justice Shah Din dated 2nd February, 1913, are inconsistent with any such arrangement.
6. On the first issue it is asserted that the transfer to the plaintiff by Mr. Justice Shah Din was invalid and could not be the basis of an action, (1) because what was transferred was a mere right to one (Section 6 (e) of the Transfer of Property Act), (2) because the transaction offended against the provisions of Section 136 of the Transfer, of Property Act and (3) because it was contrary to public policy in that Mr. Justice Shah Din could not under the rules governing the conduct of the public servants purchase land without the previous sanction of competent authority. The short answer to (2) and (3) is that Section 136 of the Transfer of Property Act is not in force in the Punjab, that although Mr. Justice Shah Din was a Judge and Mr. Haq Nawaz his nephew is a legal practitioner there Was no buying Or trafficking in or stipulation for any share of or interest in an actionable claim and that it was neither pleaded in the court below nor proved that Mr. Justice Shah Din acted in contravention of any of the Government servants conduct rules.
7. Nor was it a mere right to sue that was transferred to Mr. Haq Nawaz. The deed of gift (Exhibit P. 3 printed on page 12 of the record) conveyed to him all Mr. Justice Shah Din's rights under what was an executory contract for the future sale of immoveable property. Such a contract as pointed out by the Madras High Court in 33 I. C. page 696 is not a mere right to sue, although a right to sue is involved in it on breach of its conditions. In the present instance Mirza Asad Beg had refused before the transfer to complete the sale, but the contract for sale had not thereby become incapable of specific performance and one of the rights transferred undoubtedly was a right to demand or enforce such performance.
8. There remains the question of the amount of damages. The plaintiff was clearly entitled to sue at his option either for specific performance or for compensation for breach of contract or for both. He has chosen to sue for compensation. It has been pointed out in 40 Mad. 338, 38 Cal. 455 and 32 Bom. 165 that the law of India in respect of breaches of contract for the sale of immoevable property differs from that of England and that the ordinary rule laid down in Section 73 of the Contract Act applies to such breaches. The Calcutta and Bombay cases also lay it down that the measure of damages ordinarily should be the difference between the contract price and the market value at the date of breach though it is remarked in 32 Bom. 165 that each case has to be considered on its own merits.
9. In the present case Mirza Asad Beg deliberately and unmistakably repudiated the contract and has failed to prove that he had any good reason for doing so. We are clear that loss was caused and that damages are due but the difficulty in the case lies in the assessment of the damages since there is no direct evidence of the market value of the estate at the dates when the cheque was returned to Mr. Justice Shah Din viz. the 17th February and the 1st March, 1913. One witness, it is true, has estimated that the land was worth Rs. 2,00,000 on 2nd February, 1913, but he is Mian Amin Din, Mr. Justice Shah Din's father-in-law a person who could not fairly be asked for an unbiased opinion, and there is no satisfactory explanation forth-coming of why Mirza Asad Beg should be prepared to sell an estate worth Rs. 2,00,000 for Rs. 28,000 less. The outside price which he attempted to obtain at that time, according to the plaintiff (see letter exhibit A page 6 of the printed record) was Rs. 1,75,000.
10. Mr. Tek Chand for the defendant has attempted to argue that the Lower Court was wrong in fixing the 17th February, 1913, as the date of breach, but in the light of the authorities above quoted the Lower Court was right. There was a definite and positive refusal to sell the land on the part of defendant No. 1 on the 17th February, 1913, and when the cheque was returned for the second time on the 1st of March, 1913, Mr. Justice Shah Din could have been left in no doubt that the contract had been repudiated. Mr. Justice Shah Din no doubt had the period allowed to him by law to sue for specific performance, but the measure of damages cannot be the highest value within that period. In 38 Cal. page 458, it was held that the plaintiff had no power to postpone the date of the breach of contract to that on which he demanded a conveyance for the last time.
11. The trial court came to the definite conclusion that the land in question was worth not less than 2,00,000 in February, 1913, but the evidence on which it relied related to conditions in 1915 and 1916. The evidence of Jamal Din, P. W. 3, a broker referred to what happened in 1916. Mr. Justice Shah Din said that the same Jamal Din asked him to pay a higher price than that fixed in February, 1913, but this was in November or December 1915. A letter was produced (Exhibit P. W. 2). dated the 15th April, 1916, in which Akhtar Beg, son of Mirza Asad Beg asserted that offers had been received of Rs. 2,30,000 and Rs. 2,35,000. The learned Subordinate Judge received all this evidence, attached much importance to the opinion of Jamal Din that the land in 1916 was worth more than Rs. 2,00,000 (which is not precisely what Jamal Din said) and, remarking that there was no evidence on either side of any sudden rise in land values, concluded that the value must have been not less than Rs. 2,00,000 in 1913.
12. Against this conclusion, however, there are two important facts. The first is that Mirza Asad Beg is not shown to have even asked for more than Rs. 1,75,000 in 1913, and another is that Mr. Justice Shah Din after 1st March, 1913 did not press the matter. He did not sue for specific performance and three years later he gave away for nothing his rights under the contract of sale to Main Haq Nawaz, a relative, it is true, but not his nearest heir, who was his own son. The words of Section 73 of the Contract Act are:-"Compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, was likely to result from the breach of contract. " Then follows an express reservation that such compensation is not to be given for any remote and indirect loss sustained by reason of the breach. What we have to try to determine in the present instance is the value of the bargain to Mr. Justice Shah Din, when it was repudiated in February 1913. We find that he was asked to pay Rs. 1,75,000 but refused to pay more than Rs. 1,72,000. He tells us, and there is no reason to disbelieve him, that he wanted to purchase the land, in order to improve the estate which he already owned in Azamabad. He received back his cheque for the earnest money promptly and thus was not deprived of the use of the Rs. 5,000, He evidently considered that he had made a good bargain, for the correspondance shows that he turned a deaf ear to the somewhat pathetic entreaties of Mirza Asad Beg made in the name of old friendship that he should cancel the agreement. At. the same time the loss to which he was put was not sufficient to inspire him to any definite action with a view to escaping from it or minimising it.
13. We think on the whole that the value of the estate may be taken, for purposes of calculating damages, as Rs. 1,75,000 the amount demanded by Mirza Asad Beg in his negotiations with Mr. Justice Shah Din. The land may have been worth Rs. 2,00,000 or more in 1916, but it is impossible to reconcile any idea that it was worth Rs. 15,000 more than the contract price in 1913 with the conduct of Mr. Justice Shah Din and Mirza Asad Beg. The latter made no attempt, as far as we know, to sell the land elsewhere until 1916.
14. We, therefore, accept the appeal to the extent of reducing the decree of the plaintiff to one for Rs. 3,000 with proportionate costs in the trial court. In this court the appellant will have his costs on the amount by which he succeeds.
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