Gujarat Industrial Development Corporation vs Prakash Kanaiyalal Damani

M.D. Shah, J.—This appeal by the original defendant challenges the judgment and decree dated 23-8-1989 passed by the Judge, City Civil Court No. 7, Ahmedabad, in Civil Suit No. 5904 of 1987 whereby the suit of the original plaintiff-present appellant was partly decreed and the appellant was held entitled to get Rs. 40,000/- from the defendant with proportionate costs and interest @ 6% p.a.

The facts in brief are that the defendant-Gujarat Industrial Development Corporation, in order to develop the industries in Gujarat, wanted to sell the sheds with land to interested persons. The plaintiff being interested in the Industrial Estate at Vatva submitted application 10 years prior to filing of suit along with prescribed amount of Rs. 100/-. When deposit of Rs. 3,500/- was paid by the plaintiff, letter of offer was sent vide letter dated 16-6-1985 to the plaintiff, however, suit shed No. C.I.121 of Vatva had to be given by the defendant for Rs. 2,65,400/-. However, since only 25% of the amount was asked to be paid, same was paid by pay order dated 7-8-1985 and interest of Rs. 250/- on 3-10-1985. Instead of handing over possession of the suit shed by giving allotment letter to the plaintiff, electricity charges were demanded from the plaintiff and same were also paid by the plaintiff on 16-12-1986. Even after assurance by the Allotment Officer of the defendant that possession along with the allotment letter would be sent to the plaintiff, nothing happened and hence, the plaintiff sent a registered letter on 28-1-1987 demanding possession of the suit shed, allotment letter and damages. Instead of replying to the said letter, the defendant demanded interest of Rs. 35,000/- or to pay Rs. 170/- per sq.mtr. instated of Rs. 100/- as price of the land. Since the defendant was not entitled to claim as such, the plaintiff did not agree to the same and hence, an order for return of the amount to the plaintiff was passed by the defendant. It was alleged that since the plaintiff complied with the terms and conditions of the contract and was ready and willing to perform remaining part of the contract, the defendant committed breach of the contract by returning the amount of Rs. 66,600/-. It was further alleged by the plaintiff that as the suit shed was not allotted in time and as demand of Rs. 170/- per sq.mtr. instead of Rs. 100/- per sq.mtr. was demanded, he was entitled to get Rs. 22,000/- being interest @ 18% p.a. on the amount paid by the plaintiff together with damages of Rs. 72,000/- suffered by the plaintiff. He, therefore, filed the suit claiming Rs. 94,000/- from the defendant after serving a notice.

The suit was resisted by the defendant by filing written statement at Ex.19 contending inter alia that as the suit shed was situated in Vatva, City Civil Court had no jurisdiction to entertain the suit. It was further contended that since the plaintiff did not pay 25% of the price in time but paid the same after three days of the stipulated date and since he paid the amount of interest after three months and deposit of electricity meter after one and half years, he did not comply with the terms and conditions and hence, he was not allotted the suit shed. It was further contended that since the plaintiff received back his amount in May, 1987, no amount remained to be paid to the plaintiff. The allegations against the officers of the defendant and committing of breach of contract were also denied by the defendant. It was also contended that the plaintiff did not act as per the offer letter and hence, the contract did not come into existence and hence, the defendant was not liable to pay interest or damages to the plaintiff. It was therefore prayed that the suit be dismissed.

The learned Judge, on affording opportunity of hearing to learned Counsel appearing for the respective parties, delivered the impugned judgment and decree as mentioned in the earlier part of this judgment giving rise for the defendant to file the present appeal.

Heard learned Counsel, Mr. Chinmay M. Gandhi for Mr. M.B. Gandhi for the appellant and Mr. Nalin K. Thakker for the respondent.

Learned Counsel, Mr. Gandhi, submitted that suit was filed by the power of attorney holder of the plaintiff, who never acted, took part or entered into contract during the course of entire transaction till cancellation of offer by the defendant and since plaintiff only has personal knowledge regarding the entire transaction which took place between him and the defendant, he ought to have entered into witness box and afforded opportunity of cross-examination to the defendant. In this case, the original plaintiff did not enter into witness and hence, according to him, trial court committed error in partly decreeing the suit in favour of the plaintiff. This is a substantial question of law and hence can be raised in this appeal. He further submitted that once amount paid by the plaintiff was accepted when returned by the defendant, contract did not come into existence and when contract itself was not in existence, there was no question of committing any breach thereof and hence, there was no question of awarding any damages. According to him, this aspect has not been considered by the trial court and wrongly came to the conclusion and erred in partly decreeing the suit in favour of the plaintiff. He also submitted that initial provisional offer to the plaintiff would not have any vested right on allotment of land. In this regard, he placed reliance on the decision rendered by the Apex Court in the case of Haryana State Industrial Development Corporation Ltd. Vs. Inderjeet Sawhney,

Mr. Thakker, on the other hand, submitted that the power of attorney holder of the plaintiff, who filed and deposed before the court, having personal knowledge of the matter of the plaintiff can depose and can act on behalf of the plaintiff as he is duly authorized to act. He further submitted that this point was not raised before the trial court and hence, cannot be raised here in the appeal.

Mr. Gandhi, on the other hand, submitted that since the appeal involves a substantial question of law as to whether the power of attorney holder of the plaintiff can act and depose before the Court below, it can be raised in the appeal. In this connection, he relied on a decision of Madras High Court in the case of M. Kesava Gounder and Ors. v. D.C. Rajan and Ors. reported in AIR 1976 Mad 102 wherein it has been held as under:

Pure questions of law though not pleaded, unless waived by parties, can, in the discretion of the appellate court, be permitted to be raised even at the appellate state, provided sufficient opportunity is given to the other side and no fresh investigation or delving into facts are undertaken. If a question of law does arise on the facts, but it went unnoticed by the parties and even so, the trial Judge, there is a legal, indeed a conscious duty on the part of the appellate court either suo motu or on its attention being drawn to it to adjudge upon such a question, even though it is brought up for the first time, and no doubt inordinate delay in the discovery of such question by the parties may be a ground for the appellate court to be cautious in the matter of the exercise of its discretion in favour of such a lachy litigant.

He also relied on the decision of the Bombay High Court in the case of Shridhar Atmaram Ghadgay Vs. The Corporation of the City of Nagpur, in support of his submissions.

According to Mr. Gandhi, since the power of attorney of the plaintiff did not have any personal knowledge of the matter concerning the plaintiff, he cannot act nor can be allowed to be cross-examined by the otherside. In this connection, he relied on the decision of the Apex Court in the case of Janki Vashdeo Bhojwani and Another Vs. Indusind Bank Ltd. and Others, wherein it has been held by the Apex Court in para 12 as under:

The power of attorney holder does not have the personal knowledge of the matter of the appellants and therefore he can neither depose on his personal knowledge nor can he be cross-examined on those facts which are to the personal knowledge of the principal.

This Court has gone through the impugned judgment and decree of the trial Court and also the rival contentions of the learned Counsel for the respective parties together with the decisions relied on.

It is an admitted fact that the offer was made by the plaintiff himself and all correspondence and transactions took place subsequently between the plaintiff and the defendant. However, the power of attorney holder, who filed and deposed before the court, did not have any personal knowledge of the matter of the plaintiff and hence, he can neither depose on his personal knowledge nor can he be cross-examined on those facts which are to the personal knowledge of the plaintiff and hence, in light of the ratio laid down by the Apex Court in Janki Vashdeo Bhojwani (supra), court below ought to have dismissed the suit on this ground alone. Though this point was not raised before the court below but since this involves substantial question of law, it can be raised in appeal. Apart from the above, it is an admitted fact that the plaintiff did not deposit the amount as per the terms and conditions of the offer and three days later requested the defendant to accept the payment.

It is vehemently argued by Mr. Thakker for the respondent-plaintiff that as per the oral instructions, the plaintiff made payment towards electrical charges for one year which also clearly shows that defendant had intended to allot the said plot to the plaintiff as per the offer. However, since the plot was not allotted, he suffered loss and therefore, he claimed damages for breach of contract and hence, it was rightly held by the trial court that plaintiff was entitled to get the decree as prayed for. In this connection, he relied on the cases of Dwaraka Das Vs. State of Madhya Pradesh and Another, and also the case of Bhupesh Metals and Chemicals (P.) Ltd. Vs. The Indian Iron and Steel Co. Ltd.,

On verifying the record, nothing is found to prima facie indicate that it was at the instance of the defendant that the plaintiff made payment towards electrical charges except the bare words that it was told orally by the Officer of the defendant. If, at the instance of the defendant, the plaintiff had made payment towards the electricity charges, then question does not arise to return the said amount of cheque by the defendant along with amount paid towards the price of the suit plot. In these circumstances, without examining the plaintiff, it could not be possible to reach to any conclusion that the defendant illegally not allotted the plot to the plaintiff. As per the evidence of the defendant''s witness also, defendant was ready to allot the plot if plaintiff was ready to make payment of interest or payment of price of plot as per the price fixed subsequently at the time of allotment of plot. Had he deposited the amount and obtained possession of the plot under protest, then question did not have arisen for incurring any loss. On the contrary, plaintiff without protest, accepted the amount paid by him as per the letter of offer and also accepted the amount of cheque issued in the name of the defendant towards the amount of electricity charges and later on filed the suit for damages and hence, no damages ought to have been awarded by the court below. Hence, the respondent-plaintiff would not be entitled to any benefit out of the judgments relied on by his learned Counsel.

Learned Counsel, Mr. Thakker for the respondent-plaintiff further submitted that the plaintiff prayed for production of documents which were in custody of the defendant and as per the order of the trial court, same was produced by the defendant at Ex.41. Relying heavily on the said documents, he submitted that as per these notes, there was no fault on the part of the plaintiff but defendant mishandled the case and because of fault of the defendant, plot was not allotted to plaintiff and hence, plaintiff had to suffer the alleged loss.

It is very difficult to accept this submission as notes cannot take the place of evidence when no order was passed to that effect by the competent authority. Hence, the conclusion recorded by the court below in para 14 that in view of Ex.41, the suit contract was a concluded contract and that plaintiff has succeeded in proving the said contract and subsequent breach of said contract by the defendant cannot be sustained. As discussed above, when plaintiff himself made payment accepting the offer letter and accepted the amount of price back which was paid by him towards 25% price of the plot and the cheque amount towards electricity charges without any protest, then, relying upon these notes, no decree for damages could have been passed in favour of the plaintiff. It is a cardinal principle of law that plaintiff has to prove his case and as discussed above, when no contract existed between the plaintiff and the defendant and as the plaintiff could not prove his case, question of granting any relief much less relief of damages for breach of contract did not have arisen. Hence, in the opinion of this Court, no decree for damages ought to have been granted by the court below. The impugned judgment and decree therefore require to be quashed and set aside.

Hence, this appeal is allowed. The impugned judgment and decree dated 23-8-1989 passed by the Judge, City Civil Court No. 7, Ahmedabad, in Civil Suit No. 5904 of 1987, is hereby quashed and set aside and suit is hereby dismissed.