Professional Documents
Culture Documents
Guna Krishna Case
Guna Krishna Case
lacs was paid to the plaintiffs under the agreement dated 24/02/1992 the defendant
no. 1 owed to the plaintiffs only a sum of Rs. 5, 81, 330/- which the plaintiffs were
called upon to collect within a period of 7 days from the receipt of the letter without
prejudice to the right of defendant no. 1. The plaintiffs replied to the said letter vide
reply dated 21/11/1995 contending that the price fixed was low at Rs.62/- per sq.
mt. because the suit property was in occupation of various persons when the actual
market price was Rs.200/- per sq. mt. The plaintiffs stated that the sale deeds in
respect of the mundkars was done at the request of defendant no.1. It was further
stated that the statements of defendant no.1 were false, as defendant no.1 was
throughout denying that he had made any sales and for that he was unable to pay
any amount to them. It was stated that defendant no.1 had no power to sell and the
sale deeds made by defendant no.1 were null and void.
4. The plaintiffs then filed the suit on or about 22/01/1996 for declaration that the
said 10 sale deeds were null and void and although consequential reliefs were sought
the plaintiffs did not seek any relief either for the recovery of possession of the
property sold by defendant no.1 or for the recovery of the amount due under the
agreement filed alleging that the plots sold to the mundkars were sold at the
instance of defendant no.1. It was further alleged that the power of attorney dated
24/12/1992 only authorised defendant no.1 to develop the suit property and not to
sell the same. It was also alleged that the defendant no. 1 had committed a fraud by
replacing pages nos. 3, 4, 5 & 6 of the power of attorney and also the pages of the
said agreement. The suit was resisted by defendant no. 1 alleging that the plaintiffs
themselves had sold an area of 8260 sq. mts of the suit property to various persons
inpite of the said agreement behind the back of the plaintiffs. It was further alleged
that the plaintiffs had allowed, without the consent of defendant no. 1, certain
persons to construct huts in the property after signing of the agreement. Defendant
no. 1 had also pleaded that the defendant no. 1 was liable to pay to the sq. mts,
after permissible deductions. The defendant nos. 2, 6, 7 & 8 contended that they
were bona fide purchasers of various plots from defendant no. 1.
5. The learned trial Court framed several issues. The plaintiffs examined plaintiff
no.1. their son and another witnesss. The defendants did not examine any
witnesses. The learned trial Court came to the conclusion the the plaintiffs had failed
to prove that pages nos.3. 4. 5 & 6 of the power of attorney were replaced
fraudulently by defendant no.1 and likewise also came to the conclusion that the
plaintiffs had failed to prove that power of attorney had authorised defendant no. 1
only to develop the property. Consequently, the suit came to be dismissed with
costs.
6. At the hearing of this appeal, the submission made before the learned trial Court
and findings recorded thereon have receded into insignificance, in the light of
another formidable submission made on behalf of the defendants as regards the
maintainability of the suit itself i.e. main relief and that is in the light of the proviso
to Section 34 of the Specific Relief Act, 1963. The submission is that the suit was
bound to fail in the absence of a prayer for recovery of possession of the plots sold.
7. Section 34 of the said Act deals with declaratory decrees and provides that any
person entitled to any legal character or to any right as to any property, may
institute a suit against any person denying or interested to deny his title to such
character or right and the Court may in its discretion make therein a declaration that
he is so entitled and the plaintiff need not in such suit ask for any further relief. The
proviso states that no Court shall make any such declaration where the plaintiff,
being able to seek further relief, then a mere declaration of title, omits to do so.
8. Admittedly, in terms of agreement of sale dated 24/12/1992 between the
plaintiffs and defendant no.1, defendant no. 1 was put in possession of the suit
property and clause 5 of the irrevocable power of attorney authorised defendant no.
1, to execute and present for registration any agreements, deeds, conveyances, etc.
and pursuant thereto that the defendant no. 1 executed the sale deeds in favour of
Page4
the private defendants, more particularly, those mentioned in prayer clause (a) of
the plaint. Although the defendants did not step in the witness box. the case of
defendant no.1, that the plaintiffs sold an area of 8260 sq. mts. behind his back
appears to be more probable. The plaintiff no.1 in his cross- examination admitted
that the statements of para 28 of the plaint were false. The said averments of para
28 dealt with the allegation of the plaintiffs that defendant no.1 had gone about
telling the mundkars that defendant no. 1 had authorised the plaintiffs to execute
the sale deeds in respect of their area. The evidence clearly shows that neither the
plaintiffs nor defendant no.1 are in possession of the suit property and the suit
property has now been sold by the plaintiffs in an area of 8260 sq. mts. for which
the plaintiffs have received a consideration of Rs.77, 000/- to his erstwhile mundkars
and the remaining land has been sold by defendant no. 1 by the said sale deeds. The
plaintiffs have not sought for the recovery of possession of the plots sold pursuant to
the sale deeds mentioned in prayer clause (a) of the plaint. Admittedly, the plaintiffs
were out of possession, as they had handed over the possession to the defendant
no.1 in terms of the agreement and later in turn the defendant no. 1 sold the plots
to the private defendants, who are in possession of the same and in such a situation
it was expected of the plaintiffs to seek further relief of recovery of possession. A
suit for declaration of sale deeds as null and void would not be maintainable without
recovery of possession of the property pursuant to the sale deeds.
9. The object of the proviso to Section 34 of the said Act, is to prevent a multiplicity
of suits by preventing a person from getting a mere declaration of right in one suit
and then seeking the remedy without which the declaration would be useless and
which could have been obtained in the same suit, in another suit. A claim is said to
be consequential only when it cannot be claimed in the absence of a claim for
declaration. Otherwise it would lead to multiplicity of litigation for the declaratory
suit will have to be followed up with an ejectment action for recovery of possession.
It is well settled law that a suit for mere declaration when consequential relief which
is available and which is not sought for, is not maintainable. The Apex Court in Ram
Saran & Anr. Vs. Smt. Ganga Devi (AIR 1972 SC 2685) has clearly and
unequivocally stated that where the defendant is in possession of the some of the
suit properties and the plaintiff in his suit does not seek possession of those
properties but merely claims a declaration that he is the owner of the suit properties,
the suit is not maintainable. The same principle is applicable in this case also for the
plaintiffs only sought for a declaration that the sale deeds executed by defendant
no.1 be declared null and void without a prayer for recovery of possession which had
passed on in the hands of the defendants in whose favour the said sale deeds were
executed, and which admittedly are now in possession of the defendants. That was a
case where Ganga Devi was in possession of the some of the suit property and the
plaintiffs had not sought the possession of the suit property and it merely claimed
declaration that they are the owners of the suit properties and it is in that context
that the Apex Court held that the suit was not maintainable.
10. The Apex Court in the case of Vinay Krishna Vs. Keshav Chandra & Anr. (AIR
1993 SC 957) has further held that the failure to ask for relief of possession
undoubtedly bars the discretion of the Court in granting the decree for declaration.
The Court has held that merely because the plaint says in the prayer such other
relief be granted to the plaintiff it does not mean that without a specific plea for
possession and disregarding the bar under Section 42 (now Section 34. proviso) of
the said Act. the suit could be decreed even with reference to the portions of which
the plaintiff has been in possession. In the absence of specific prayer for the
recovery of possession of the property sold by the said sale deeds to the defendants,
the suit for declaratory relief filed by the plaintiffs was clearly not maintainable and
in this view of the matter also, the dismissal of the suit for main relief could not be
faulted.
11. Nevertheless the question remains whether the plaintiff would be entitled to
recover any amount at all from defendant no.1 and, if so, with interest. As already
Page5
noted, the plaintiffs did not seek the recovery of any amount from the defendant no.
1. Nevertheless, we are inclined to consider that relief in terms of prayer (h). That
the plaintiffs had sold an area of 8260 sq. mts. to the plaintiffs' mundkars for which
the plaintiffs had received a consideration of Rs.77, 000/- is an admitted position,
though on behalf of the plaintiffs it is contended that the plaintiff no.1 did not
understand the question when he answered that the total area sold to the mundkars
comes to 8260 sq. mts. The defendant no.1 had clearly slated in his notice dated
4/11/1995 that the plaintiffs without his consent and knowledge had sold an area of
about 8259 sq. mts. to various persons by sale deeds and sale agreements. The
plaintiffs in their reply dated 21/11/1995 did not contest this position. Again
defendant no. 1 in his written statement pleaded that the plaintiffs had sold an area
of 8260 sq. mts. Admission by the plaintiffs that the area sold by them to the
mundkars comes to 8260 sq. mts. had to be seen in the overall context of the facts
of the case. Once the plaintiffs had admitted that 8260 sq. mts. was sold by the
plaintiffs to the mundkars and received consideration for the same, the defendant
no. 1's contention, although they had not left any evidence, that defendant no. 1
was liable to pay to the plaintiffs only Rs.5, 81, 330/- appeal's to be far more
probable. As said before the plaintiffs did not seek recovery of any amount from the
defendant no.1 which according to them was due and payable by defendant no. 1 in
terms of the said agreement either before the trial Court or before this Court.
However we find that the plaintiffs did seek "for any other order this Hon'ble Court
deems fit and proper in the interest of justice", in terms of prayer clause (h) of the
petition. Order 7, Rule 7. Code of Civil Procedure, 1908, provides that every plaint
shall state specifically the relief which the plaintiff claims either simply or in the
alternative, and it shall not be necessary to ask for general or other relief which may
always be given as the Court may think just to the same extent as it had been asked
for. And the same rule shall apply to any relief claimed by the defendant in his
written statement. It is well settled proposition of law, and, we did not think that it
requires the support of any authority, that a relief can always be the Court and can
be granted even if not claimed if it is otherwise clear from pleadings and evidence on
record. The learned behalf of defendant no.1 has been ready and willing to pay to
the plaintiffs the Rs.5, 81, 330/- but without interest contending that, it is an
amount which no. 1 tendered to the plaintiffs and accepted the same, the plaintiffs
would not be entitled to any interest and further contending that, in ease the
plaintiffs bad sought for the recovery of any money then defendant no. 1 could have
deposited the same in Court so as to discharge his liability. On the other hand,
learned Counsel on behalf of the plaintiffs has submitted that the defendant no.1
could have filed the suit for specific performance of the agreement or kept the
money in the Bank. The learned Counsel further submits that the offer made by the
defendant no. 1 was conditional and therefore contrary to Section 38 of the Indian
Contract Act, 1872.
12. Section 37 of the Indian Contract Act, 1872 deals with obligation of parties to
contract and states that the parties to a contract must either perform, or offer to
perform, their respective promises, unless such performance is dispensed with or
excused under the provisions of this Act. or of any other law. Promises bind the
representatives of the promisors in case of the death of such prormisors before
performance, try intention appears from the contenct. Section 38 deals with effect of
refusal of performance and ii provides that where a promisor has made an offer of
performance to the promisee, and the offer has not been accepted, the promisor is
not responsible for non-performance, nor does he thereby lose his right under the
contract. Every such offer must fulfill the following conditions:-
(1) it must be unconditional;
(2) it must be made at proper time and place, and under such circumstances that
the person to whom it is made may have a reasonable opportunity of ascertaining
that the person by whom it is made is able and willing there and then to do the
whole of what he is bound by his promise to do; (3) if the offer is an offer to deliver
Page6
may retain the money in his own possession and may use it as his own without
destroying the effect of the tender, if he is ready at all times to pay the debt in
current money when requested.
18. In Dasharathi Ghosh Vs. Khondkar Abdul Hannan (AIR 1928 Calcutta 68) the
money was sent to the collector but was not credited in the register in the absence
of certain details and it was held that a valid tender on a contract of debt is as much
a performance and discharge of a debtor's duty as an actual payment.
19. In Salik Ram Upadhia Vs. B. Jai Gopal Singh (AIR 1955 ALL. 350) it was held
that if the amount due is validly tendered to the creditor by the debtor or by his
agent, on the debt becoming payable, the creditor is bound to accept the money and
if he does not accept it, he is not entitled to claim interest after the date of the
tender.
20. In Pyari Mohan Das Vs. Durga Sankar Das & Anr. (AIR 1958 ORISSA 125) the
learned Division Bench referring to Section 38 of the Indian Contract Act, 1872
stated that;
"The performance is said to be complete when there is a legal tender on the part of
the promisee. It may sometimes happen that a person who is to perform a promise
has been ready and willing to perform and has also offered to perform his promise at
the proper time and proper place and in such a case, the contract is discharged. It is
so discharged even in the case of a wrongful refusal to accept the performance. A
valid tender satisfies all the requirements of performance. No doubt if the tender
consists in a promise to pay money, then the promisor must go to the creditor, the
law being that the debtor must find out the creditor and offer the whole amount to
him in such a way, that the creditor might take the whole amount due to him even
without the necessity for giving change as was the rule in the olden days. There
must be either an actual offer of the money by one party or a dispensation of such
offer by the other. But a mode of payment is also determined by the previous
conduct of the parties."
21. In Dhirendra Nath Sen & Ors. Vs. Smt. Santasila Debi & Ors. (AIR 1969 Calcutta
406) the learned Division Bench referred to Hunter Vs. Daniel (1845(4) Hare 420)
and Ex-parte Sullivan (1867(15) LT 434) and noted that in both the said cases the
payee had definitely taken the stand that the agreement was invalid or void. Under
such circumstances, it was held that until there was a change of attitude it was not
necessary to go on tendering the installments after the first installment was refused
and it was, inter alia, held that it must be clear on facts that the tenderer was
justified in coming to the conclusion that entire liability being denied it will be
useless formality to tender any other installment until a debtor communicated his
intention to change his attitude.
22. In Harnath Rai Binjraj & Anr. Vs. Hirdyanarain Kumar & Ors. (AIR (34) 1947
Patna 208) the learned Division Bench held that;
"The tender is valid and complete as soon as the party, who has entered into a
contract to pay money to another, tenders the same to the party to whom the
payment is to be made. Section 38 requires that the tender in order to be effective
must be made in due time, at proper place and in a manner so as to make it. to the
person who has to receive, easily ascertainable that the tender is real and sufficient.
There is no room for importing into that section anything like the requirement of
depositing the amount in Court, along with the plea of tender put forthwith as a bar
in an action for recovery. Any further tender or deposit in Court is a mere matter of
form and the Court should not insist upon it."
23. In South Eastern Coalfields Ltd. & Ors. Vs. Subhash Kumar Gupta & Anr. (1994
Supp (3) SCC 334) the Apex Court on facts held that the petitioner being a Public
Corporation and was always willing to refund the amount and, therefore, burdening
the petitioner with interest, held, was not warranted.
24. Lastly, in Devendra Basappa Doddannavar Vs. Smt. Sonubai Tuljansa Kosandal &
Page8
Ors. (AIR 1971 MYSORE 217) the learned Single Judge held on facts that it would be
purposeless to deposit the amount in court, when the defendant flatly refused to
have anything to do with the agreement for sale.
25. As regards payment of interest it has been held by the learned Division Bench in
the case of Managing Director, KPC Ltd. Vs. Geetha & Ors. (AIR 1989 KARNATAKA
104) that:
"Interest, is not awarded as damages; it is awarded to plaintiff only for being kept
out of the money which ought to have been paid to him. It takes care of the period
between the date of the claim and the date of realisation. It has nothing to do with
what erosion the fund suffers thereafter owing to future inflation."
26. In Ratanlal Choonilal Pannalal Vs. Municipal Commissioner for the City of
Bombay and Ors. (AIR 1918 Privy Council 129) it was held that the right to interest
depends upon the following broad and clear consideration. Unless there be
something in the contract of parties which necessarily imports the opposite, the date
when one party enters into possession of the property of another is the proper date
from which interest on the unpaid price should run.
27. Reverting to the facts of the case, there is no dispute that by the time the
plaintiffs revoked the power of attorney, rightly or wrongly, both the plaintiffs as well
as defendant no.1 had sold the entire property, the former selling parts of it to his
own mundkars for consideration which the plaintiffs received, and. defendant no. 1
to other defendants in terms of the sale deeds mentioned in prayer clause (a) to the
plaint. It is the defendant no.1 of his own who came with a case that he was liable to
pay to the plaintiffs a sum of Rs.5.81.330/- only contending that was the balance
price payable by him at the rate of Rs.62/- per sq. mt., the plaintiffs having sold
8259 sq. mts. and having received consideration, besides the sum of Rs.3 lacs paid
at the time of execution of the agreement. By the said letter, the defendant no.1
called upon the plaintiffs to collect and encash the cheque within 7 days and the
plaintiffs had remained silent to it. Nothing had prevented the defendant no. 1 to
send the said amount, which according to defendant no. 1 was due to the plaintiffs,
by cheque and only in that case in our view that there would have been a tender of
payment. Calling upon the plaintiffs to come and collect and encash the cheque, in
our view, would not amount to tender or offer of payment of the amount due to the
plaintiffs. That was an imperfect offer. It may be noted that all persons who make a
tender do so for the purpose of extinguishing a debt. If that be so, the defendant
no.1 ought to have sent the cheque along with the letter rather than call upon the
plaintiffs to come and collect the cheque. This was more of a pretence knowing that
neither of plaintiffs would come and collect the cheque. Nothing had prevented the
plaintiffs to deposit the amount in Court to prove his bonafides, notwithstanding that
the plaintiffs' suit did not have a prayer for recovery of any amount. The defendant
no.1 has used the said amount at least from 4/11/ 1995 depriving the plaintiffs from
using the same which was otherwise due and payable to the plaintiffs. Considering
the totality of the facts and circumstances of the case, we are of the view that
defendant no.1 ought to be directed to pay the said amount of Rs.5, 81.330/ - to the
plaintiffs in terms of prayer clause (h) and with interest at the rate of 6% from 4/11/
1995 until payment.
28. In the light of the above, we allow the appeal partly and decree the claim of the
plaintiffs for the recovery of a sum of Rs.5, 81, 330/- with pending and future
interest at the rate of 6% from 4/11/1995 until payment leaving the parties to bear
their own costs. Cross-objections dismissed as infructuous.