Orissa High Court
(From The Judgment And Decree Dated ... vs Puskar Sharma (Since Dead) on 17 January, 2025
Author: Sashikanta Mishra
Bench: Sashikanta Mishra
IN THE HIGH COURT OF ORISSA AT CUTTACK
RSA No.337 of 2010
(From the judgment and decree dated 13.5.2010 and
21.6.2010 passed by learned Addl. District Judge, Rourkela
in R.F.A. No.10/2009 partly reversing the judgment
dtd.16.3.2009 and decree dated 23.3.2009 in C.S.
No.22/2006)
Chitaranjan Sharma
... Appellant
-versus-
Puskar Sharma (since dead)
Bhaskar Sharma and another ... Respondents
Advocates appeared in the case through hybrid mode:
For Appellant : Mr.S.K.Samantaray,
Advocate
-versus-
For Respondents
: Mr. A.K.Biswal, Advocate.
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CORAM:
JUSTICE SASHIKANTA MISHRA
JUDGMENT
17.1.2025.
Sashikanta Mishra,J. This is an appeal by the Plaintiff
against a partly reversing judgment. The judgment dated
13.5.2010 followed by decree dated 21.6.2010 passed by
learned Addl. District Judge, Rourkela in R.F.A.
No.10/2009 is under challenge whereby the judgment
dated 16.3.2009 followed by decree dated 23.3.2009
passed by learned Civil Judge (Sr. Division), Rourkela in
C.S. No.22/2006 was partly reversed.
2. For convenience, the parties are referred to as per
their respective status in the trial Court.
3. The Plaintiff filed the suit for declaration that the
contract dtd.11.11.2003 executed between him and the
defendants in respect of the suit house is valid and the
unilateral rescission of the contract by Defendant No.1 is
illegal with further prayer to direct the Defendant No.1 to
execute tripartite sale deed in respect of the suit house and
permanent injunction.
4. The Plaintiff's case is that he and Defendant No.1 are
brothers having their business at Rourkela. Defendant
No.2 is a body corporate established under the Odisha
Housing Board Act. One of the houses constructed by it
was allotted in favour of Defendant No.1, who was indebted
to Vijaya Bank to the extent of Rs.9,13,522/- with
unapplied interest upto 30.6.2003 by mortgaging the suit
house. Defendant No.1 requested the plaintiff for
liquidation of the loan amount on the condition that he
would transfer the suit house in favour of the plaintiff. The
plaintiff agreed and accordingly an agreement was
executed between them orally on 10.11.2003, which was
reduced to writing on 11.11.2003.The plaintiff thereafter
negotiated with the authorities of Vijaya Bank for
liquidation of the outstanding loan amount. Ultimately, the
Bank agreed for a one time settlement for Rs.2,62,000/-.
Said amount was paid and accordingly, a certificate was
issued by the Bank and the original documents were
handed over to the Plaintiff. Defendant No.1 thereafter
applied for transfer of the suit house to the Defendant No.2
in favour of the Plaintiff. The Defendant No.2 directed the
Plaintiff to attend its office on 29.10.2005 for execution of
the tripartite sale deed but he could not attend because of
his illness. He deposited Rs.15,000/- towards processing
fee for transfer of ownership and also purchased the stamp
papers for registration. The defendant No.1 however
avoided to execute the sale deed and took steps for
cancellation of the document for transfer of the suit house.
Hence,the suit.
5. Defendant No.2 did not contest the suit and was set
ex parte.
6. Defendant No.1 contested the suit and filed written
statement admitting the basic facts. It was however, denied
that there was any agreement between them. It was the
specific case of the Defendant No.1 that the Plaintiff was
inducted as a tenant in respect of the suit house from the
month of January, 1990 on a monthly rent of Rs.15,000/-
and subsequently there was discussion for transfer of the
suit house in favour of the plaintiff for consideration to be
fixed at the time of execution and registration of the sale
deed. The plaintiff deposited Rs.2,62,000/- in Vijaya Bank
on his behalf as he was required to pay the arrear house
rent to the Defendant No.1 as his power of attorney holder.
The Plaintiff has to pay Rs.90,000/- towards current house
rent. In spite of the same, the Plaintiff made attempts to
get the suit house transferred in his favour without
consideration money, which was finalized at
Rs.14,00,000/-. As such, the power of attorney was
revoked. The agreement relied upon by the plaintiff is no
contract in the eye of law for want of mention of any
consideration money.
7. Basing on the pleadings, the trial court framed the
following issues for determination;
(1) Is the suit maintainable?
(2) Has the Plaintiff any cause of action to file
the suit ?
(3) Is the contract dated 11.11.2003 is a valid
contract between the Plaintiff and defendant
No.1?
(4) Has defendant No, I rescinded the terms of
the aforesaid contract?
(5) Is the Plaintiff entitled to the relief of
permanent injunction against the
defendants?
(6) To what other relief, the Plaintiff is entitled ?
8. Issue Nos.3 and 4 were taken up for consideration at
the outset. After considering the oral and documentary
evidence, the trial Court held that there is no material on
record that the plaintiff was inducted in the suit house as a
tenant under Defendant No.1 nor he had any arrear house
rent to pay. Referring to the agreement dtd.11.11.2003, the
trial Court held that the plaintiff had agreed to clear up the
dues of the Bank on behalf of the Defendant No.1 where
upon the latter was to execute necessary documents for
transfer of the suit house in his favour. The trial Court
further found that the plaintiff had cleared the outstanding
loan amount of Defendant No.1 as per the agreement by
holding that liquidation of the loan amount is the
consideration for transfer of the suit house. It was also
held that the agreement was not required to be registered
and that it is a valid agreement. As such, the unilateral
revocation of the contract by Defendant No.1 is illegal as
the same had been acted upon and the Defendant No.1
had not taken any steps for transfer of the suit house in
favour of the plaintiff. In view of the findings rendered on
the main issue, the remaining issues were answered
accordingly in favour of the plaintiff and the suit was
decreed by declaring the contract dtd.11.11.2003 to be
valid and the deed of revocation dtd.31.12.2007 executed
by Defendant No.1 as illegal and void. The defendant No.1
was further directed to appear before Defendant No.2 for
execution of tripartite sale deed in respect of the suit house
on the date to be fixed by Defendant No.2 on production of
copy of judgment by the plaintiff and was also permanently
restrained from transferring the suit house in favour of any
person other than the plaintiff and for disturbing his
possession in any manner.
9. The Defendant No.1 carried the matter in appeal. The
First Appellate Court, after taking note of the evidence on
record observed that at the relevant time the outstanding
balance amount was Rs.9,13,522/- and that one time
settlement was effected with the Bank by virtue of which
the amount was reduced to Rs.2,62,000/- which was paid
by the plaintiff. With regard to the agreement
dtd.11.11.2003, the First Appellate Court held that the
intention of the parties at the time of execution of the said
agreement was to pay the balance amount which was
outstanding by then and there was no mention about the
fact that there would be a onetime settlement and if there
would have been any reduced amount that would be the
guiding factor. As such, it was held that the intention of
the parties at the time of execution of the agreement or the
contract was that the plaintiff would pay the outstanding
amount of Rs.9,13,522/- and not the reduced amount.
Basically on the above findings the appeal was allowed in
part by directing the Defendant No.1 to execute the
tripartite sale deed after receiving the balance amount of
the consideration amount of Rs.9,13,522/-.
10. Being aggrieved, the plaintiff has filed this second
appeal, which was admitted on the following substantial
question of law;
"Whether in passing the judgment the
lower appellate court has misinterpreted
the terms and conditions under Ext.1?
11. Heard Mr.S.K.Samantaray, learned counsel for the
plaintiff-appellant and Mr. A.K.Biswal, learned counsel for
the Defendant No.1-Respondent.
12. Mr.Samantaray would argue that Clauses 1 and 2 of
the agreement dated 11.11.2003 are clear and
unambiguous that the Plaintiff had agreed to settle and
clear the dues of the Bank and to obtain no due certificate
after repayment of the loan finally. Thereafter, the vendor
(Defendant No.1) would apply for permission from
Defendant No.2 to transfer his leasehold interest in favour
of the plaintiff in consideration of the dues of the Bank
which the purchaser agrees to settle and clear. Therefore,
according to Mr.Samantarary, the consideration amount
can only be that amount which was agreed by the Bank
towards settlement and clearing up the loan amount,
which is Rs.2,62,000/-. Mr.Samantaray further argues
that the Defendant No.1 had himself given an offer to the
Bank vide Ext.2 on 25.9.2003 offering Rs.2,62,000/-
towards one time settlement, which was ultimately
accepted. So by time the agreement was executed, i.e. on
11.11.2003, both parties had knowledge about the
proposed settlement amount being Rs.2,62,000/-. Since
the agreement was confined to settlement of the dues of the
Bank, the First Appellate Court committed grave error in
insisting upon an amount which was not the amount due
to the Bank after the one time settlement.
13. Mr.A.K.Biswal, on the other hand, would argue that
no amount being mentioned as consideration in the
agreement dtd.11.11.2003, the same becomes void for
uncertainty as per Section 29 of the Contract Act. He
further submits that as on 21.6.2003, the amount due was
Rs.9,13,522/- which the plaintiff agreed to settle. So
irrespective of whatever was accepted by the Bank towards
settlement of the loan amount, the Plaintiff remains bound
by the agreement to pay the amount he had agreed upon
i.e. Rs.9,13,522/-.
14. In view of the substantial question of law framed and
having regard to the rival contentions noted above, it would
be apposite to refer to the agreement dtd.11.11.2003
marked Ext.1. Clause (1) and (2) are relevant and are
quoted herein below;
"1. That, the purchaser will settle and clear the
dues of Vijaya Bank, Rourkela on behalf of and
in the name of the Vendor and obtain a no due
certificate from the Bank in favour of the Vendor
after repayment of the loan finally.
2. That, as soon as the purchaser obtains a no
due certificate from the Bank as aforementioned,
the vendor will apply for permission to the Orissa
State Housing Board to transfer his lease hold
interest of the aforementioned house in favour of
the purchaser in consideration of the dues of the
Bank which the purchaser agrees to settle and
clear, and execute and register necessary
documents in favour of the purchaser."
15. A plain reading of the agreement would show that it
was the intention of the parties that the plaintiff would
settle and clear the dues of the Bank whereupon the
Defendant No.1 would execute a sale deed in his favour.
The question is, what was the consideration amount as on
the date of the agreement. Reference to Ext.2, which is a
letter written by the Defendant No.1 to the Bank on
25.6.2003 would reveal that he had expressed his inability
to pay the then outstanding amount of Rs.9,13,522/- and
offered Rs.2,62,000/- in lieu thereof. The Bank accepted
the offer much later. In the mean time, the agreement in
question was executed between the parties. The First
Appellate Court has held that by then there being no one
time settlement, the consideration amount has to be
treated as the original amount i.e. Rs.9,13,522/-. After
going through all the documents and evidence on record,
this Court is unable to concur with such finding for the
reason that the language employed in the agreement is
clear and an unambiguous that the dues of the Bank
would be settled and cleared by the plaintiff. In other
words, the amount which the Bank holds to be due to it
and ultimately liquidates the loan upon receipt thereof has
to be treated as the dues outstanding. It is admitted that
the Bank accepted as a one-time settlement Rs.2,62,000/-
towards full and final settlement of the loan. In fact, said
amount being deposited by the plaintiff, the Bank issued a
certificate in favour of the Defendant No.1 to the effect that
all liabilities had been cleared under compromise
settlement agreement dtd.18.10.2003 and that the Bank
dues had been paid by the plaintiff as per agreement
between him and Defendant No.1. On such clear facts, the
agreement would not admit of any other interpretation. To
reiterate, this Court holds that the finding of the First
Appellate Court that the intention of the parties was for the
plaintiff to pay Rs.9,13,522/- amounts to reading
something into the terms and conditions of the agreement
which is non-existent. It is stated at the cost of repetition
that the agreement was to settle and clear up the dues of
the Bank. Therefore, whatever amount was accepted by
Bank towards full and final settlement would obviously
mean the consideration as per the agreement and nothing
more.
16. The trial court appears to have correctly appreciated
the oral and documentary evidence on record to hold that
the plaintiff having paid Rs.2,62,000/- had performed his
part of the contract whereas, Defendant No.1 by
unilaterally revoking the agreement had acted beyond it.
The First Appellate Court, as already stated, committed
manifest error in misreading the terms and conditions of
the agreement which therefore renders the impugned
judgment vulnerable and unsustainable.
17. For the foregoing reasons therefore, this Court holds
that the impugned judgment passed by the First Appellate
Court warrants interference. The substantial question of
law is answered accordingly.
18. In the result, the appeal succeeds and is therefore,
allowed. The impugned judgment and decree passed by the
First Appellate Court is hereby set aside. The judgment and
decree passed by the Trial Court is hereby confirmed.
..................................
Sashikanta Mishra,
Judge
Ashok Kumar Behera
Designation: A.D.R.-cum-Addl. Principal Secretary
Location: High Court of Orissa Cuttack
Date: 17-Jan-2025 12:40:08
