In HMGOP No. 39 of 1996 the learned Principal and District Judge, Chengalpattu passed an order permitting the 1st Respondent to effect sale of the minors' property at `3,200/- per cent. This order was passed on 30.4.1996. In the meantime, the Appellant had paid a sum of `50,000/- on 2.1.1996, and another sum of `50,000/- on 8.1.1996 to the First Respondent. {Para 6}
9. However, it was stated that the sale was not in the interest of minors and therefore, the 1st Respondent was not able to comply the demand of Notice. The Appellants filed a Suit in OS No. 930 of 1996 in the Court of District Munsif for a permanent injunction restraining the Respondents from disposing of the suit property. The Suit was resisted by the Respondents. Thereafter, the Appellants filed the present Suit for specific performance of the Sale Agreement on 13.8.1995.
10. The 1st Respondent filed a Written Statement inter alia stating that the alleged agreement dated 13.8.1995 is only an agreement to enter into a Sale Agreement of the property and it is not a concluded contract. He would admit the execution of such document to sell the suit properties at the rate of `20,000/-per cent. He would also admit the subsequent payments dated 2.1.1996 & 8.1.1996. However, he would state that the Appellant himself engaged his own lawyer to file HMGOP No. 39 of 1996 and has given a false information by stating the sale price at `3,200/- per cent. He would also allege that the value of the property was more than `30,000/-per cent and the sale of the property is not in the interest of the minors and he is not bound by the agreement dated 13.8.1995 which is not a concluded contract.
IN THE HIGH COURT OF MADRAS
A.S. No. 178 of 2007
Decided On: 12.10.2011
R. Radhakrishnan and Ors. Vs. G. Ekambaram and Ors.
Hon'ble Judges/Coram:
K. Mohan Ram & G.M. Akbar Ali, JJ.
Author: G.M. Akbar Ali, J.
1. Appeal filed under Section 96 of the Civil Procedure Code against the Judgment and Decree made in O.S. No. 482 of 2004 dated 3.8.2006 on the file of the learned Additional District Judge Fast Track Court No. I, Chengalpattu.
2. The Plaintiffs are the Appellants. The Suit was filed for Specific Performance of an alleged Sale Agreement dated 13.8.1995. The brief facts are as follows:
3. The 1st Respondent is the father and the Respondents 2 & 3 are the sons. They inherited the suit property under a Partition Deed dated 17.9.1985. There are three schedules of property and each entitled to 36 cents. The 1st Respondent entered into an Agreement of Sale with the Appellants on 13.8.1995 including the properties of Respondents 2 & 3, who were minors.
4. The rate was agreed at `20,000/- per cent and the 1st Respondent received an advance of `50,000/- on the date of agreement. The agreement was named and styled as 'Token advance document for the sale of land' (Nila virkiraya Token advance pathiram).
5. According to the agreement, the 1st Respondent must obtain permission from the competent Court for the sale of minors' property and after obtaining permission and on verification of records, the Appellant is to pay a further sum of `6,00,000/- as advance and execute a Sale Agreement with usual terms.
6. In HMGOP No. 39 of 1996 the learned Principal and District Judge, Chengalpattu passed an order permitting the 1st Respondent to effect sale of the minors' property at `3,200/- per cent. This order was passed on 30.4.1996. In the meantime, the Appellant had paid a sum of `50,000/- on 2.1.1996, and another sum of `50,000/- on 8.1.1996 to the First Respondent.
7. Since the permission was obtained from the Court, the Appellants approached the 1st Respondent with a sum of `5,00,000/- and demanded execution of the Sale Deed. As the First Respondent evaded a notice was issued on 12.7.1996 by the Appellant to receive the said sum of `5,00,000/-and also to complete the sale by receiving the balance sale consideration within four months from the date of receipt of above said amount.
8. The 1st Respondent/Defendant sent a reply in which he admitted that he entered into an Agreement of Sale and also admitted the receipt of an advance of `50,000/- on the date of agreement and receipt of `50,000/- each on 2.1.1996 & 8.1.1996.
9. However, it was stated that the sale was not in the interest of minors and therefore, the 1st Respondent was not able to comply the demand of Notice. The Appellants filed a Suit in OS No. 930 of 1996 in the Court of District Munsif for a permanent injunction restraining the Respondents from disposing of the suit property. The Suit was resisted by the Respondents. Thereafter, the Appellants filed the present Suit for specific performance of the Sale Agreement on 13.8.1995.
10. The 1st Respondent filed a Written Statement inter alia stating that the alleged agreement dated 13.8.1995 is only an agreement to enter into a Sale Agreement of the property and it is not a concluded contract. He would admit the execution of such document to sell the suit properties at the rate of `20,000/-per cent. He would also admit the subsequent payments dated 2.1.1996 & 8.1.1996. However, he would state that the Appellant himself engaged his own lawyer to file HMGOP No. 39 of 1996 and has given a false information by stating the sale price at `3,200/- per cent. He would also allege that the value of the property was more than `30,000/-per cent and the sale of the property is not in the interest of the minors and he is not bound by the agreement dated 13.8.1995 which is not a concluded contract.
11. The 1st Respondent had also taken a stand that the present Suit was not maintainable under Order 2, Rule 2, CPC as the Plaintiff had failed to claim similar relief in O.S. No. 930 of 1996 which is the earlier Suit and therefore, the subsequent relief is barred.
12. The Defendants 2 & 3 represented by their guardian, filed a separate Written Statement. They would allege that the 1st Respondent cannot enter into an agreement of sale on their behalf since they were minors and the Sale Agreement was against the interest of the minors. They would also state that the 1st Respondent had acted against their interest and he is also of immoral character spending lavishly and had filed a Petition before the District Court with false information and that they were not bound by the agreement dated 30.8.1995.
13. The Appellants filed a reply statement stating that the stand of the Respondents 2 & 3 is only an after-thought and collusion between the father and sons and the Suit for Specific Performance is not hit under Order 2, Rule 2 of CPC as the earlier Suit was for a different cause of action.
14. With these pleading, the parties went for a trial before the learned Additional District Judge cum Fast. Track Court No. I, Chengalpattu. The learned Judge framed as many as 6 issues and 4 additional issues and after hearing the arguments, recast the following 5 issues:
1. Whether the Suit Agreement is a Sale Agreement?
2. Whether a specific relief can be granted on the basis of the agreement ?
3. Whether the agreement is binding on the minor Defendants 2 & 3 ?
4. Whether the Plaintiffs are entitled for the specific performance of the contract ?
5. To what relief ?
15. The Plaintiff examined 2 witnesses and marked 18 documents. The Respondents also examined 2 witnesses but did not mark any document.
16. On analysing the oral and documentary evidence, the Trial Court found that the agreement was not a concluded contract, but only an agreement to enter into a Sale Agreement and on that agreement, the Plaintiffs are not entitled for specific performance of contract. Therefore, the Trial Court dismissed the Suit. However, the Trial Court neither framed the issue whether the Suit is barred under Order 2, Rule 2 of CPC, nor a finding was given thereof. The Trial Court has also not framed an issue whether the Appellants were ready and willing to perform the contract of sale agreement. Aggrieved by the dismissal of the Suit, the Plaintiffs are before this Court.
17. The points for consideration arising in the present Appeal are:
1. Whether the agreement dated 13.8.1995 is a concluded contract ?
2. If so, whether the Appellants are entitled for relief of specific performance of contract ?
18. Mr. T.V. Ramanujam, learned Senior Counsel for the Appellant would submit that the agreement dated 13.8.1995 is an Agreement of Sale and a concluded contract. The learned Senior Counsel pointed out that the agreement was entered into between the Appellants and the 1st Respondent for himself and on behalf of the Respondents 2 & 3, for the sale of properties belonging to them at a sale price of `20,000/- per cent and the 1st Respondent had received a sum of `50,000/- as advance.
19. The learned Senior Counsel pointed out that obtaining permission from the competent Court for the sale of minors' property is only a condition incidental to the Sale Agreement and receipt of the 2nd instalment of `6,00,000/- is only a further condition before completing the sale.
20. The learned Senior Counsel further pointed out that in continuance to the said agreement, the 1st Respondent had filed an Application before the District Court, Chengalpattu and had obtained a permission to sell the minors' property and he has also received a sum of `50,000/- on two occasions towards sale consideration. He would further state that when the 1st Respondent has failed to receive the 2nd instalment of `5,00,000/- and come forward to complete the sale, the Appellants have issued the notice which was duly received by the 1st Respondent and the reply is also to the effect admitting that he had entered into an Agreement of Sale. The only defence taken by the 1st Respondent is that the value of the land is more than ?30,000/- per cent and the agreement is at the rate of `20,000/- per cent and therefore, the wife of the Respondent is not agreeable to sell the property.
21. The learned Senior Counsel also pointed out that the Respondents never took a plea that it is not a concluded contract and for the first time in the Suit such a plea was taken. The learned Senior would contend that the terms of the agreement dated 13.8.1995 would show that it is a Sale Agreement with definite terms and it is enforceable under law. He further submitted that time for performance, though not mentioned in Ex. A1, is not a ground to hold that it is not a concluded contract.
22. The learned Senior Counsel also pointed out that the Appellants were all along ready and willing and also tendered a sum of `5,00,000/- apart from the advance as a second instalment and therefore, they were entitled for a decree of specific performance of the contract
23. The learned Senior Counsel relied on the following case laws:
(i) Gurbax Singh v. Bhooralal, MANU/SC/0241/1964 : AIR 1964 (SC) 1810;
(ii) R. Vimalchand and another v. Ramalingm and others, MANU/TN/1020/2002 : 2002 (3) MLJ 177;
(iii) Bengal Waterproof Limited v. Bombay Waterproof Manufacturing Company and another, MANU/SC/0327/1997 : 1997 (1) SCC 99;
(iv) Bansari and others v. Ram Phal, MANU/SC/0147/2003 : 2003 (9) SCC 606;
(v) Kollipara Sriramulu (dead) by his Legal Representative v. T. Aswatha Narayana (dead) by his Legal Representatives and others, MANU/SC/0019/1968 : AIR 1968 SC 1028;
(vi) Harichand v. Govind, MANU/PR/0064/1922 : AIR 1923 PC 47;
(vii) P.D' Souza v. Shondrilo Naidu, MANU/SC/0561/2004 : 2004 (4) CTC 150 (SC) : 2004 (6) SCC 649;
(viii) Maharshi Dayanand University and another v. Anand Co-op L/C Society Ltd. and another, MANU/SC/7344/2007 : 2007 (5) SCC 295;
(ix) Gostho Behari Sirkar v. Surs Estates Ltd., MANU/WB/0193/1960 : AIR 1960 Cal. 752; and
(x) Trimex International Fze Limited, Dubai v. Vedanta Aluminium Limited, India, MANU/SC/0057/2010 : 2010 (2) CTC 581 (SC) : 2010 (3) SCC 1.
24. On the other hand, Mr. S. Parthasarathy, learned Senior Counsel who appeared for the Respondents 2 & 3 would submit that the agreement dated 13.8.1995 is not a concluded contract and the 1st Respondent cannot enter into an agreement detrimental to interest of the minors.
25. The learned Senior Counsel pointed out that the case of the Respondents 2 & 3 is that the 1st Respondent had acted against the interest of the minors and an agreement which is against the interest of the minors is opposed to law. The learned Senior Counsel also pointed out that the Suit is also barred under Order 2, Rule 2, CPC.
26. The learned Senior Counsel also pointed out that it is an admitted' case of the Appellant that the permission petition was filed and prosecuted by the Appellant giving false information and therefore, the Respondents 2 & 3 are not bound by the agreement.
27. The learned Senior Counsel relied on the following case law:
(i) Panna Lal v. State of Bombay, MANU/SC/0240/1963 : AIR 1963 SC 1516;
(ii) Mahant Dhangir and Another v. Madan Mohan and Others, MANU/SC/0039/1987 : 1987 (Supp) SCC 528;
(iii) Nedunuri Kameswaramma v. Sampath Subba Rao, MANU/SC/0319/1962 : AIR 1963 SC 884;
(iv) Bafna Developers v. D.K. Natarajan,MANU/TN/0975/2010 : 2010 (5) CTC 423;
(v) Savitri Pandey v. Prem Chandra Pandey,MANU/SC/0010/2002 : 2002 (2) SCC 73;
(vi) H.G. Krishna Reddy & Co v. MM. Thimmiah and Another, MANU/TN/0361/1983 : AIR 1983 Mad. 169;
(vii) Sornam and others v. A. Venugopal and Others, MANU/TN/1303/2010 : 2010 (5) CTC 563 : 2010 8 MLJ 52; and
(viii) Speech and Software Technologies (India) Pvt. Ltd v. Neos Interactive Limited, MANU/SC/8370/2008 : 2009 (1) SCC 475.
28. Mr. Muthappan, learned Counsel for the 1st Respondent would also submit that the agreement dated 13.8.1995 is not a Sale Agreement and not binding on the Respondents.
29. We have carefully considered the rival contentions put forth on either side and perused the materials available on record.
30. The admitted facts of the case are as follows:
The Respondents 1 to 3 were allotted the suit properties under a registered Partition Deed dated 17.9.1985, marked as Ex. A.13. Each is entitled to 36 cents. The 1st Respondent had entered into an agreement on 13.8.1995 for the sale of the property which was allotted not only to him but also to the Respondents 2 & 3. The sale consideration was at `20,000/- per cent and he had received a sum of `50,000/- on 13.8.1995 as advance. He had also received a sum of `50,000/- each on two occasions on 2.1.1996 and 8.1.1996.
31. An Application to accord permission for the sale of the minors' property in HMGOP 39 of 1996 was filed before the District Court Chengalpattu and permission was also granted.
32. The disputed facts are as follows:
The agreement is only an agreement to enter into a Sale Agreement. Therefore, it is not a concluded contract. The Appellants themselves had filed the permission Petition before the District Court for the sale of the minors' property by giving a false information that the properties are to be sold at `3,200/-per cent when the actual value of the property was more than `30,000/-per cent.
33. The Sale Agreement is not in the interest of the minors and hence not binding. The Suit is also barred under Order 2, Rule 2, CPC. as the Appellants have filed earlier a Suit for permanent injunction restraining the Respondents not to alienate the property based on the alleged sale agreement.
34. As stated earlier, the Trial Court has not framed an issue whether the Suit is barred under Order 2, Rule 2, CPC and has not given any finding. However, such plea is a legal plea and is also raised in the Appeal. We have to consider whether the Suit is barred under Order 2, Rule 2, CPC.
35. Order 2, Rule 2, CPC reads as follows: 2. Suit to include the whole claim.-
(1) .....
(2) Relinquishment of part of claim where a Plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim he shall not afterwards sue in respect of the portion so omitted or relinquished.
36. The learned Senior Counsel relied on a decision Gurbax Singh v. Bhooralal, MANU/SC/0241/1964 : AIR 1964 (SC) 1810, wherein the Apex Court has held as follows:
7. In order that a plea of a bar under Order 2, Rule 2(3), Civil Procedure Code should succeed the Defendant who raises the plea must make out (1) that the second Suit was in respect of the same cause of action as that on which the previous Suit was based, (2) that in respect of that cause of action the Plaintiff was entitled to more than one relief, (3) that being thus entitled to more than one relief the Plaintiff, without leave obtained from the Court, omitted to sue for the relief for which the second Suit had been filed. From this analysis it would be seen that the Defendant would have to establish primarily and to start with, the precise cause of action upon which the previous Suit was filed, for unless there is identity between the cause of action on which the earlier Suit was filed and that on which the claim in the later Suit is based there would be no scope for the Application of the bar. No doubt, a relief which is sought in a Plaint could ordinarily be traceable to a particular cause of action but this might, by no means, be the universal rule. As the plea is a technical bar it has to be established satisfactorily and cannot be presumed merely on basis of inferential reasoning. It is for this reason that we consider that a plea of a bar under Order 2, Rule 2, Civil Procedure Code can be established only if the Defendant files in evidence the pleadings in the previous Suit and thereby proves to the Court the identity of the cause of action in the two Suits. It is common ground that the pleadings in C.S. 28 of 1950 were not filed by the Appellant in the present Suit as evidence in support of his lea under Order 2, Rule 2, Civil Procedure Code. The learned Trial judge, however, without these pleadings being on the record inferred what the cause of action should have been from the reference to the previous Suit contained in the Plaint as a matter of deduction. At the stage of Appeal the learned District Judge noticed this lacuna in the Appellant's case and pointed out, in our opinion rightly, that without the Plaint in the previous Suit being on the record, a plea of a bar under Order 2, Rule 2, Civil Procedure Code was not maintainable. Learned Counsel for the appellant, however, drew our attention to a passage in the judgment of the learned Judge in the High Court which read:
The Plaint, Written Statement or the judgment of the earlier Court has not been filed by any of the parties to the Suit. The only document filed was the judgment in Appeal in the earlier Suit. The two Courts have, however, freely cited from the record of the earlier Suit. The Counsel for the parties have likewise done so. That file is also before this Court.
37. The learned Senior Counsel for the Appellant also relied on a decision reported in R. Vimalchand and Another v. Ramalingam and others, AIR 2002 (3) MLJ 177, wherein, a Division Bench of this Court has held as follows:
29. In order to find out the maintainability of the Suit, on the principle of Order 2, Rule 2, C.P.C., one has to consider the necessary fact which give rise the cause of action of the earlier Suit and not the mere right to file the Suit. It is necessary to keep in mind that the term 'cause of action' for the purpose of Order 2, Rule 2, C.P.C. means the cause of action which gives occasion for and forms the foundation of the Suit. There is a distinction between 'cause of action' and 'right of action'.
30. Order 2, C.P.C. can be made applicable only if the earlier Suit was disposed of and thereafter a fresh Suit is being filed with the same cause of action for fresh relief. When the present Suit has been filed during the pendency of the earlier Suit, in our view, the provision of Order 2, Rule 2, C.P.C. is not attracted. It is also the fact that the present relief of specific performance was not within the jurisdiction of the Court in which earlier Suit was pending
38. The learned Senior Counsel further relied on a decision reported in Bengal Waterproof Limited v. Bombay Waterproof Manufacturing Company and Another, MANU/SC/0327/1997 : 1997 (1) SCC 99, wherein the Apex Court has held as follows:
7..... So far as sub-rule (3) of Rule 2 of Order 2, CPC is concerned, bar of which appealed to both the Courts below, before the Second Suit of the Plaintiff can be held to be barred by the same it must be shown that the Second Suit is based on the same cause of action on which the earlier Suit was based and if the cause of action is the same in both the Suits and if in the earlier Suit Plaintiff had not sued for any of the reliefs available to it on the basis of that cause of action, the reliefs which it had failed to press in service in that Suit cannot be subsequently prayed for except with the leave of the Court.
39. The learned Counsel for the Respondents relied on a decision reported in Sornam and Others v. A. Venugopal and Others, 2010 (8) MLJ 52, wherein the learned Single Judge of this Court, in a matter, where the agreement holder initially filed a Suit for injunction and later filed a Suit for specific performance held that, when the cause of action urged in the later Suit was very much available at the time of filing of the earlier Suit, the later Suit will be barred under Order 2, Rule 2, C.P.C.
40. The case reported in R. Vimalchand and Another v. Ramalingam and Others, AIR 2002 (3) MLJ 177, cited supra is a Division Bench ruling wherein also an earlier Suit was filed for an injunction restraining the Defendants not to alienate the property and the later Suit was filed for specific performance of the contract. The Division Bench held that the cause of action has to be seen only from the averments in the pleadings and where the new Suit is founded upon a cause of action distinct from that which was the foundation for the former Suit, Order 2, Rule 2, C.P.C. has no Application.
41. In Gurbax Singh v. Bhooralal, MANU/SC/0241/1964 : AIR 1964 (SC) 1810, cited supra, the Apex Court had also held that without the pleading being on the record, the Court cannot infer the cause of action.
42. The decision reported in Bengal Waterproof Limited v. Bombay Waterproof Manufacturing Company and Another, MANU/SC/0327/1997 : 1997 (1) SCC 99, is also on the same line.
43. In the present case, though the Respondents had pleaded that the present Suit is barred under Order 2, Rule 2, C.P.C., they have not placed the pleadings of the former Suit. They have also not raised an issue before the Trial Court and the Trial Court has also not gone into this issue. It is well settled that Order 2, C.P.C. can be made applicable only if the earlier Suit was disposed of and thereafter a fresh Suit is being filed with the same cause of action for fresh relief. When the present Suit has been filed during the pendency of the earlier Suit, the provision of Order 2, Rule 2, CPC is not attracted. It is also the fact that the present relief of specific performance was not within the jurisdiction of the Court in which earlier Suit was pending. Moreover the Respondents have also not produced the Plaint filed in the earlier Suit for permanent injunction. Therefore, we are of the considered view that the present Suit is not barred under Order 2, Rule 2, CPC.
44. Now the only question is whether the Suit Agreement is a concluded contract ? In a Privy Council case reported in Harichand v. Govind, MANU/PR/0064/1922 : AIR 1923 PC 47(cited supra), it is held that 'whether an agreement is a completed bargain or merely a provisional arrangement depends on the intention of the parties as deducible from the language used by the parties on the occasion when the negotiation take a concrete shape'. As observed by the Lord Chancellor, in Ridgway v. Walton the fact of a subsequent agreement being prepared may be evidence that the previous negotiations did not amount to an agreement but the mere fact that persons wish to have a formal agreement drawn up does not establish the proposition that they cannot be bound by the previous agreement.
The case before the Privy Council was that there were two agreements between the parties and in one agreement, there is a condition that the agreement holders' Solicitors should approve the title and prepare a bargain paper. However, the Privy Council found that both agreements show clearly that the parties had come to a definite and complete agreement and the intention to draw up a formal document later does not negative the binding nature of the previous agreement.
45. In Kollipara Sriramulu (dead) by his Legal Representative v. T. Aswatha Narayana (dead) by his Legal Representatives and Others, MANU/SC/0019/1968 : AIR 1968 SC 1028, as relied on by the learned Senior Counsel for the Appellant, relates to a case where there was an oral agreement between the parties with an intention to execute a formal document. In paragraph 3 of the judgment the Court held 'it is well established that a mere reference to a future formal contract will not prevent a binding bargain between the parties. The fact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put in a more formal shape does not prevent the existence of a binding contract".
46. In Maharshi Dayanand University and Another v. Anand Co-op L/C Society Ltd and Another, MANU/SC/7344/2007 : 2007 (5) SCC 295, the Apex Court had dealt with a case where the parties during negotiations contemplate the execution of formal agreement incorporating the terms of bargain, an offer was made and accepted and the essential terms of contract agreed upon and the Supreme Court held that then the contract came into existence.
47. In Gostho Behari Sirkar v. Surs Estates Ltd, MANU/WB/0193/1960 : AIR 1960 Cal. 752, the High Court of Calcutta held that documents may, upon a true construction, amount to a binding contract for sale and purchase of immovable property, enforceable by specific performance although they provide for preparation of a contract by a lawyer and that provision with other terms of the agreement is described in the translation of the document as a condition. The learned Judge also incorporated the report of the Judicial Committee, which reads as follows:
Whether an agreement is a completed bargain or merely a provisional arrangement depends on the intention of the parties as deducible from the language used by the parties on the occasion when the negotiations take a concrete shape. As observed by the Lord Chancellor (Lord Cranworth) in Ridgway v. Wharton, (1857) 6 HLC 238 at pp. 263, 264, the fact of a subsequent agreement being prepared may be evidence that the previous negotiations did not amount to an agreement, but the mere fact that persons wish to have a formal agreement drawn up does not establish the preposition that they cannot be bound by a previous agreement and concluded that the essential question is to find out whether the formal document is of such a nature that it was the very conditic of that contract or whether it was merely commemorative of the evidence on the point.'
48. On the other hand, the learned Senior Counsel for the Respondents relied on a decision reported in Speech and Software Technologies (India) Pvt. Ltd. v. Neos Interactive Limited, MANU/SC/8370/2008 : 2009 (1) SCC 475, wherein the Hon'ble Supreme Court has held as follows:
22. The said letter of intent on a bare reading is nothing but an agreement to enter into another agreement because it is provided in the said letter that 'both parties agreed to have set a deadline to sign this agreement by 15.9.2006'. It is well-settled legal position that an agreement to enter into an agreement is not enforceable nor does it confer any right upon the parties. The agreement in terms of the said letter of intent was to be signed on or before 15.9.2006.
49. In H.G. Krishna Reddy & Co. v. M.M. Thimmiah and Another, MANU/TN/0361/1983 : AIR 1983 (Mad) 169, wherein it is held that if a document which is entered into between two parties and which is relied on as constituting a contract contemplates execution of a further regular agreement between the parties, it is a matter for construction whether the execution of the further contract is a condition of the terms of the bargain or whether it is mere expression of the desire of the parties as to the manner in which the original agreement should be performed. In the former case, there cannot be any enforceable contract unless the condition is fulfilled.
50. Therefore, the proposition of law as laid down by the above decision are as follows:
(i) the intention of the parties should be gathered from the language of the document;
(ii) Whether an agreement is a completed bargain or merely a provisional arrangement depends on the intention of the parties;
(iii) A reference to a future formal agreement will not prevent a binding bargain between the parties;
(iv) Binding nature depends upon the true construction in the definite terms in the enforceability of the specific performance;
(v) a mere agreement to enter into an agreement is not enforceable but an agreement with definite terms of binding nature is enforceable; and
(vi) if a document contemplates execution of a further regular agreement between the parties, it is a matter for construction whether the execution of the further contract is a condition of the terms of the bargain or whether it is mere expression of the desire of the parties as to the manner in which the original agreement should be performed. In the former case, there cannot be any enforceable contract unless the condition is fulfilled.
51. On this legal background let us see the construction of the disputed document. Ex. A.1 is the agreement dated 13.8.1995. The nomenclature of the agreement is 'Token advance agreement for a sale of the land'. It was entered between the Appellant and for the 1st Respondent for himself and on behalf of his minor sons. The sale price was fixed at `20,000/- per cent and a sum of `50,000/- was given as advance.
52. There are three conditions contemplated in the agreement: (1) the 1st Respondent is to produce all the original records including the Patta, Chitta, Adangal and Encumbrance Certificate to the appellants for verification. (2) the First Respondent is to obtain a permission from the competent Court for the sale of minors' property, and (3) on verification of the all the above records, the Appellants would tender the 2nd instalment of `6,00,000/- as advance and on such advance being tendered, a regular Sale Agreement has to be executed.
53. No doubt, the 1st Respondent in his Written Statement and also in his evidence and in the reply notice would admit that it is a Sale Agreement. The Respondents 2 & 3 would oppose the agreement on two grounds; the sale is not in the interest of the minors, time is not prescribed and the sale price was more than `30,000/- per cent whereas the Appellants have obtained permission from the court by giving false information about the sale price at `3,200/- per cent.
54. As the competent Court had granted permission, under Ex. A.5, dated 12.7.1996, the Appellants would call upon the 1st Respondent to receive the 2nd instalment of advance of `5,00,000/- within 15 days from the date of receipt of notice and complete the sale by receiving the remaining consideration within four months from the date of receipt of the said amount.
55. To constitute a definite and concluded contract of a Sale Agreement, there shall be an offer and acceptance, agreement on a definite sale price and an agreed period of time for the execution of the agreement. These are the definite terms in the enforceability of the specific performances. The other terms and conditions are incidental. If a document contemplates, that on a fulfilment of a condition, execution of a further regular agreement so as to incorporate any one of the above said definite terms, it is not a concluded contract. It is only an agreement to enter into an agreement as the intention of the parties is fulfillment of a condition.
56. As stated earlier, out of three conditions in the disputed agreement, the first two conditions refer to the terms which the vendor is to perform. On fulfillment of the above conditions, the 3rd condition contemplates execution further regular agreement on receipt of an advance of `6,00,000/- and the balance sale consideration is to be paid within four months thereon to complete the sale. The said intention is expressed under Ex. A.5-Notice by stating that on complying the two conditions the vendor to receive additional advance and, the balance sale consideration is to be paid within four months thereon to complete the sale.
57. The prescribed time for performance of the contract which is one of the definite terms of the contract is definitely missing in Ex. A. 1 -Agreement and the condition No. 3 is inconclusive and contemplates a further completed agreement.
58. In the case reported in H.G. Krishna Reddy & Co. v. M.M. Thimmiah and Another, MANU/TN/0361/1983 : AIR 1983 (Mad) 169 (cited supra), in paragraph 21, it is held as follows:
21. ...Though no doubt Ex. P.1 has specified the consideration amount and the property to be sold, a perusal of Ex. P.1 leaves the impression that a regular Agreement of Sale on a stamp paper has to be executed within 15 days from the date of Ex. P. 1 and that the said recital is a condition of the bargain between the parties under Ex. P.1....
Similarly, in the case on hand, Ex. A.1 specified the consideration amount and the property to be sold and imposes a condition for the vendor to obtain permission from the competent Court and on such permission, the parties are to execute a regular Agreement of Sale.
59. Therefore, we are of the considered view that the Agreement dated 13.8.1995 is not a concluded contract and the Trial Court is right in holding so. In view of the reasons stated above, we do not find it necessary to interfere with the decree and judgment of the Trial Court.
60. In the result the Appeal is dismissed and the judgment and decree made in O.S. No. 482 of 2004 dated 3.8.2006 on the file of the learned Additional District Judge Fast Track Court No. I, Chengalpattu is confirmed. No costs.
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