Kanwar Lal Amol Singh vs Lt. Col. Baljit Singh

R.S. Narula, J.—This judgment will dispose of three regular first appeals, being Nos. 206 to 208 of 1957, against three separate decrees for Rs. 10,000/- each (without future interest and without costs) against Kanwar Lal Amol Singh, appellant (hereinafter referred to as the defendant) in favour of Lt. Col Baljit Singh (hsreinatter referred to as the plaintiff) in one case (R.F.A. 207 of 1957), his wife, Mrs. Usha Baljit Singh in the second case (R.F.A. 266 of 1957) and plaintiff''s brother, Surjit Singh in the third case (R.F.A. 208 of 1957). The facts giving rise to these appeals are like this. The plaintiff and defendant were admittedly friends since the time they were studying together in the Aitchson College at Lahore. The defendant owned the whole of the Jagir village of Akbarpur in Tehsil Jagadhri. In 1951 the defendant wanted to dispose of substantial pieces of land out of that holding. In or about the beginning of July, 1951 the defendant agreed to sell 400 bighas each out of the said estate to each of the plaintiffs at Rs. 120 per bigha. For the sale of each parcel of land, which was to be conveyed to the respective plaintiffs a sum of Rs. 10,000 each was admittedly paid by the respective plaintiffs to the defendant at or about the time of the oral agreement for sale. The defendant thus received Rs. 30,000 in all from the plaintiffs in this connection. It is not disputed by the defendant that he received this amount from the plaintiffs, by two cheques. The first cheque is dated 2nd July, 1951. Its counterfoil, Exhibit P. 6 has been produced and proved in this case. Under the abbreviated name of the person in whose favour the cheque had been drawn there is a note in the counterfoil made apparently at the time of drawing the cheque, in the following words :

Advance of Land

Similarly by cheque dated 10th July, 1951 of which counterfoil is Exhibit P. 7, the remaining sum of Rs. 10,000 was paid to the defendant. Each of the cheques had been drawn by Lt. Col. Baljit Singh, plaintiff on his account with the Imperial Bank of India. Three separate receipts were given by the defendant to each of the plaintiffs for Rs. 10,000 each. Exhibits P.1, P.3 and P.4 are the three separate receipts given by the defendant to Lt. Col. Baljit Singh, Mrs. Usha Baljit Singh and Surjit Singh, respectively. The subject matter of one of these receipts, exhibit P.1 is reproduced below for ready reference :

Dehra Dun.

Received the sum of Rs. 10,000 (ten thousand only) from Col. Baljit Singh as advance for fifty standard acres (approximately four hundred ordinary Bighas) to be sold at Rs. 120 per bigha in village Akbarpur Ambala District.

(Sd.) LAL AMOL SINGH, On Revenue Stamp.

The receipt does not set out the particular parcels of land which were to be sold to each of the three plaintiffs or as a matter of that, even of the total land which had to be sold to the three plaintiffs taken together. Neither the field numbers nor any other description of the particular land to be sold appears to have been agreed upon between the parties at that stage. It is also significant to note that the receipts do not bear any date.

Letters dated 19th December, 1951 in identical terms were then written by Baljit Singh and Usha, plaintiffs to the defendant. But for the signatures of the executants of the letters they are verbatim the same. The letter signed by Baljit Singh is Exhibit D.1 and the one signed by Usha Baljit Singh is Exhibit D.2. For reference one of these (Exhibit D. 1) is quoted below :

D.C.I. Camp, Dehra Dun. 19th December, 1951.

My dear Lal,

I am afraid it will not be possible for me to buy 400 bighas of your land at Rs. 120 at village Akbarpur, Tehsil Jagadhri, due to other financial commitments. So you are liberty to sell it to some other buyer. I would like you to refund my Rs. 10,000 (Rupees Ten Thousand) which I had given as advance, as soon you sell it.

Yours Sincerely, (Sd.) Baljit Singh.

The writing of these letters by the respective plaintiffs to the defendant is not disputed. The case of the plaintiff in this respect is best brought out by quoting his own words from his statement in Court dated 22nd July, 1965. This part of the statement reads as follows:

I had told the defendant that the land to be purchased by us must be free-hold. He told me that the land to be sold was in the occupation of tenants, but he would get them ejected and deliver vacant possession to us. After about 4 or 5 months I met the defendant at Buria and enquired from him if the tenants had been ejected. He told me that it will take some time before the tenants are ejected. I got suspicious about it Then the defendant told me that he had other purchasers for this land who were prepared to pay more and if we did not want to purchase this land we were at liberty to do so. He told me that he would refund the money that he had taken from the plaintiffs. He told me that the buyers, who were there and it was only a question of week or so and immediately the land was sold the plaintiffs will be paid. No letters-were exchanged at the time and I went away to Calcutta where I was posted. After about 6 months and there about I came back from Calcutta and called the defendant at my house at Dehra Dun. He told me that there was hitch in the sale of the land because the people had grown suspicious why Col. Sahib was not purchasing the land. He asked for writing from me which he could show to the people in which there must be reasons stated for not purchasing the land. In fact he suggested to me that I should write in the letter that due to other financial commitments I could not purchase these lands. I was a little suspicious about giving such writing to him but then he assured me not to bother about it as his lawyer has suggested to get such a writing. Then I and my wife gave this writing to him. My brother was not there. Therefore at the suggestion of the defendant I sent the same draft to my brother, who also sent the similar writing to the defendant. I possessed at that time about 70,000/- or 80,000/- in my account, in my wife''s account and in the name of my brother. I had no other financial commitment or entered into any transaction but the main reason was that I felt assured that he would not be able to turn the tenants out.

The story of the defendant is that the plaintiffs wanted to back out of their agreements to purchase the property as they were not able to procure the requisite funds and therefore sent out these letters to the defendant. The defendant wants us to believe that educated Col. Baljit Singh threw himself and his nominees into the hands of and at the mercy of the defendant by admitting breach of contract on his part and on the part of his nominees and thus throwing himself open to serious trouble. Be that as it may, though in the circumstances of this case and on the evidence on record of this case we have decided to uphold the version of the plaintiffs in this case as true and to reject that of the defendant as incorrect, the defendant admittedly accepted in writing the cancellation of the original agreement for sale and sent in this connection separate letters to each of the plaintiffs. These letters dated 21st December, 1951 are again in identical terms and one of them, i.e. Exhibit P. 2 addressed to Lt. Col. Baljit Singh, is reproduced below for ready reference:

Buria 21st December, 1951.

My dear Baljit,

Reference your letter dated the 19th December, 1951, I am sorry to note that you are enable to purchase 400 bighas (four hundred bighai) of land in the village Akbarpur at Rs. 120/- (one hundred and twenty) per bigha as agreed previously due to some other financial commitments that you have.

I shall try and sell this land, the same khasra Nos. that were offered to you for sale, to some other buyer and when the land in question is sold your ten thousand shall be returned. Five bighas=one acre.

Dated the 21st December, 1951.

Yours Sincerely, (Sd.) Lal Amol Singh.

It appears that the defendant accepted the cancellation of the original agreement for sale but in order to keep up a show of the plaintiffs having backed out of the agreement so as to convince prospective new buyers and to obtain an advance of Rs. 10,000 each from such buyers he (the defendant) got the words "as soon as you sell it" added from the plaintiffs at the end of their letters. In his reply to each of the plaintiffs also, the defendant added a rider as to the arrangement he was to make for refunding the sum of Rs. 10,000 each to the plaintiffs. This rider might have had some meaning if it could be proved that some specific fields (Khasra Nos) or parcels of land had been agreed to be sold by the defendant to the plaintiffs and that the plaintiff''s had agreed to obtain the refund of the amounts paid by them conditional on the sale of those specific fields by the defendant to some new buyer and not otherwise. No such thing has been proved in this case.

Early in July, 1954 when there could be a genuine apprehension in the minds of the plaintiffs that disputes about limitation might arise if they delayed their suits any further, each of the plaintiffs instituted a separate suit for the recovery of Rs. 10,000 with future interest against the defendant. By orders dated 22nd April, 1965 the three suits were consolidated by the learned trial Judge and proceedings of all the three cases were thereafter conducted in suit No. 123/16 of 1954 i.e., in the suit filed by Col. Baljit Singh.

These suits were contested by the defendant on various grounds which gave rise to the following issues :

(1) Did the defendant not receive the amount in suit as an advance for 50 standard acres agreed to be sold to the plaintiff ?

(2) Whether the defendant had no saleable interest in the property in dispute ?

(3) Whether the suit property was ancestral qua the defendant and what is its effect ?

(4) Whether any specific land was agreed to be sold to the plaintiff and what was that land ?

(5) Whether the parties agreed to the cancellation of the sale of the land in dispute and what is its effect ?

(6) Is the plaintiff responsible for the breach of contract and is not entitled to the refund of the amount in suit ?

(7) Is the plaintiff entitled to interest, if so, at what rate ?

(8) Is the suit premature ?

(9) Is the suit within time ?

(10) Relief.

By one common judgment dated 3rd April, 1957 the Court of Shri Ishar Singh, Senior Sub Judge, Ambala, held that the amounts in question had been paid as earnest money and not as part payment of the sale price of the land in question, that the defendant had saleable interest in the property in dispute subject to the restriction that the defendant could not destroy the reversionary rights of his sons and collaterals under the custom by which the defendant and his family were governed; that the defendant''s village known as Akbarpur was ancestral in the hands of the defendant and it could not be sold by the defendant without legal necessity and that the plaintiffs were justified in refusing to purchase the same and were consequently entitled to avoid the original contract of sale; that no specific land had been agreed to be sold by the defendant to each of the plaintiffs; that it was proved that the parties had cancelled the original contract of safe by mutual consent and that the contract of sale was no longer subsisting after the exchange of the letters referred to above;, that the defendant had failed to prove that the plaintiffs were responsible for the breach of the contract; but that the plaintiffs were not entitled to any future interest. It was further found by the learned Senior Sub Judge that the pleas covered by issues No. 8 and 9 i.e., the pleas about the suit being barred by time and being premature were inconsistent and fatal to one another. It was, however, held that the suit was neither barred by time nor premature. As a result a decree was passed in each of the three suits for Rs. 10,000/- without future interest. The learned Senior Sub Judge further proceeded to leave the parties to bear their own costs of the suit for the reason which it would be convient to reproduce in his own words :

But keeping in view all the circumstances of the case and admittedly friendly relations between the parties, I leave them to bear their own costs.

It is against these decrees of the trial Court that the present appeals have been filed by the defendant. Arguments were addressed by the learned counsel for the defendant only in R.F.A. 207 of 1957 and it was admitted by both sides that no separate question arose in the other two appeals and that the fate of the other two appeals would depend on the result of this appeal. The main judgment of the trial Court had also been given in this case.

After hearing the learned counsel for the parties we have not been able to agree with the finding of the trial Court on Issue No. 1. On the counterfoil of the main cheque for Rs. 20,000/- issued by the plaintiff it had been noted that the amount was ''advance'' for land. Even in the corresponding receipt Exhibit P.1 (as in the other receipts) the defendant clearly described the amount as an ''advance'' and not as earnest money. It is true that the mere use of the word ''advance'' or ''earnest money'' is not conclusive of the nature of the payment. But in the circumstances of this case there is no evidence on the basis of which we can uphold the finding of the Trial Court on this issue. In fact, on the wordings of the judgment of the trial Court in this connection, its finding on this issue cannot be sustained. The finding on this issue in the judgment of the learned Senior Sub Judge is based on the following sentence dealing with the matter after mentioning the respective pleas of the parties.

The defendant admitted in his supplementary statement as D.W. 4 that he received the money in dispute as earnest money. I would, therefore hold.

It is surprising that on the admission of the defendant in his own favour a finding has been given against the plaintiffs. This finding cannot therefore be sustained. We accordingly hold on issue No. 1 that the amount is suit had been paid as part price of the land to be sold to the plaintiffs and not as earnest money and that this amount was therefore not liable to be forfeited to the defendant merely on the breach of contract for sale by the plaintiffs, even if such a breach were to occur.

Though the learned counsel for the defendant did not give up any of the pleas raised by his client in the Court below and covered by other iesues, he really pressed us to reverse the finding of the Court below on issue No. 5. In so doing, he did not contest the genuiness or correctness of the letters exhibits P. 2 and P. 5. etc What he really contended was that the defendant was liable to refund the money only if and after he was able to resell the particular land which had been contracted to be sold to the plaintiffs to some other person and that the defendant was liable to return the money only out of such sale proceeds. In this view of the matter he pressed issue No. 8 also and argued that the suit was, therefore, premature. The logical conclusion of his contention would be that if certain specific land had really been agreed to be sold to the plaintiffs by the defendant the plaintiffs would have to wait indefinitely for the refund of their money till the defendant sold out that particular parcel of land to someone else. And, if the defendant does not choose to sell the land to someone else for three generations the plaintiffs would be helpless. We do not find this argument to be attractive at all. Though a half hearted attempt was made to question the finding of the trial Court on issue No. 4 it was almost conceded that there was nothing on record to show that any specific land was agreed to be sold by the defendant to any of the plaintiffs.

Neither the receipts for the advance payment nor the counterfoils of the cheques nor even the letters of concellation of the agreement contain any reference to any particular Khasra Nos. or any defined parcels of land. We have, therefore, no hesitation in affirming the finding of the trial Court on issue No 4. That being so, the decision on issue No. 5 does not present any difficulty. The addenda towards the end of letters, exhibits P. 2 and P. 5 melts away into insignificance. The statement of the defendant in these letter; to the effect that the amount in question would be returned to the plaintiffs when the land in question is sold is absolutely meaningless in view of the fact that no particular land had been agreed to be sold. This sentence in the two letters has, therefore, to be ignored as ''meaningless addendum'' as defined by Cheshire and and Fifoot on the Law, of Contract (Fifth Edition) on page 35. It was observed by the learned authors that Judges would not be deterred from proclaiming the existence of a contract merely because one of the parties after agreeing in substance to the proposals of the other, introduces a phrase or a clause which, when examined, is found to be without significance. The learned authors further proceeded to observe in that context that if there appears to be agreement on all essential matters, either on the face of the documents or by praying in aid commercial practice or the previous course of dealing between the parties, the Court will ignore a subsidiary and meaningless addendum.

In Nicolene Ltd. v. Simmonds (1953) 1. Q.B. 543 Denning L.J. held :

It would be strange indeed if a party could escape from everyone of his obligations by inserting a meaningless exception from some of them ...You would find defaulters all scanning their contracts to find some meaningless clause on which to ride free.

In the same case Hodson L.J., observed in this context as follows :

I do not accept the proposition that, because some meaningless words are used in a letter which contains an unqualified acceptance of an other, those meaningless words must or can, be replied on by the acceptor as enabling him to obtain a judgment in his favour on the basis that there has been no acceptance at all.

We are not inclined to allow the defendant to ride free on a defence like this particularly in view of our findings issues No. 4. We can hardly congratulate the defendant in his attempt to swallow such a large amount of his ''friend'' like this. Indeed from the evidence on record and from the conduct of the parties and in the circumstances of the case it is clear that in consideration of the cancellation of the provious agreement for sale, the parties had agreed to give back and take back the sum of Rs. 30,000/- given as advance to the defendant and that it was never the intention of the parties not to refund and take the amount otherwise than out of the sale proceeds of the unidentified Khasra Nos. of land which are stated to be still with the defendant. We, therefore, uphold the findings of the trial Court on Issues Nos. 4, 5 and 8 also and hold that these suits were not premature and that the parties had agreed to the cancellation of the sale of the land in dispute and the defendant is bound to refund the sum of Rs. 10,000/- each to the respective plaintiffs in these cases.

No other matter was urged on behalf of the defendant. The only other point that calls for our attention is the question of costs in the Court below. The learned trial Judge left the parties to bear their own costs on the main ground that admittedly friendly relations existed between the parties. It is a little difficult for us to understand the value of those friendly relations when the defendant had betrayed the friendship and had gone to the length of refusing to retund the amounts advanced to him by the plaintiffs even without interest. We are inclined to think that this was a fit case in which the trial Court should have followed the normal rule of costs being allowed to abide the event.

On the above findings, all these three appeals fail and are dismissed with costs throughout.

Dua, J.

I agree.