Union Of India And Ors vs Gita Rani Barman And Ors

[1] This appeal is filed by the original defendants to challenge the judgment and decree dated 16.07.2002 passed by the learned Civil Judge (Senior Division), West Tripura, Agartala in Money Suit No.72 of 1999 as confirmed by the learned Additional District Judge, West Tripura, Agartala by his judgment dated 22.02.2017.

[2] Brief facts may be noted at the outset. The respondents were the original plaintiffs. They are the legal heirs of deceased Niranjan Barman Roy. The defendants are Union of India and the Telecom Department. According to the plaintiffs, their predecessor-in-title late Niranjan Barman Roy was allotted land by Government before 1971 admeasuring .4 acres situated at Mouja-Bishalgarh. After his death all the plaintiffs had become joint owners of the said land. The Telecom Department was desirous of constructing a building for its telecom exchange and staff quarters for which they were looking out for suitable land. Sometime in the year 1993, the plaintiffs showed interest in selling the land. Negotiations were carried on between two sides. The District Magistrate & Collector, West Tripura had assessed the value of land at Rs 9,00,000/- per kani. Officers of Telecom Department also agreed to the said valuation. Chief General Manager approved the purchase of the said land at the said rate. Such approval was communicated to the plaintiffs under a memorandum dated 10.01.1995. The plaintiffs provided all necessary documents showing their title to the land including non-encumbrance certificate issued by the Government Advocate and the latest Khatians pertaining in the said land. Despite concluded contract in this regard, the defendants did not take any steps for making payment for the land in question. The plaintiffs therefore issued notices and when the department refused to make the payment at agreed rate, the plaintiffs were compelled to file the said suit. According to the plaintiffs, in the meantime, the price of the land had come down considerably to Rs 4,50,000/- per kani on account of insurgency in the area. The plaintiffs, therefore, prayed for a decree of damages of Rs 5,00,000/- to be paid by the defendants by way of compensation.

[3] The defendants appeared and filed written statement in which they pointed out that on 24.05.1993 Smt. Subarnalata Barman Roy widow of the deceased (who herself has since expired) had made an application to the Telecom Department stating that she had learnt that the department was looking for a suitable land to purchase and she was prepared to sell the land to the department. On such proposal, negotiations were carried out but never finalized and no concluded contract had come into existence. The defendants did agree that the District Magistrate & Collector had assessed the value of the land at Rs 9,00,000/- per kani which was placed before the defendants. However, after obtaining legal opinion, Smt. Subarnalata Barman Roy was requested to submit basic documents showing the source of the title, such as, evidence of purchase, exchange, inheritance, gift or allotment by the Government. She failed to provide any such document. She only mentioned in the letter dated 27.03.1995 that the land was allotted to her husband by the Relief Department of the Government of Tripura but no evidence of such allotment was produced. On account of such facts, the agreement for purchase of the land had never materialized. They thus opposed the claim of compensation.

[4] The plaintiffs examined one witness namely Sri Ranjan Barman Roy, plaintiff No.5. In his deposition he had reiterated the averments made in the plaint primarily contending that the agreement for sale of the land was concluded and the defendants backed out from such contract. In the cross-examination he agreed that he had not submitted the allotment letter. He further stated that the value of the land presently had come down to Rs 4,00,000/- per kani from the prevailing price of Rs 9,00,000/- at the relevant time. He agreed that the agreement was oral and not executed in writing.

[5] The defendants examined one Sri Pradip Kumar Nandi, D.W.1. He was the Divisional Engineer of BSNL i.e. the successor of the Telecom Department. He deposed that the Telecom Department did intend to purchase land for telecom exchange to be constructed at Bishalgarh. The plaintiffs had offered to sell the land to the department. While they were asked to produce relevant papers of title to the land. The plaintiffs produced Khatian but not any other title deed. Thereafter the land could not be purchased. The committee had given approval and recommended purchase of the land but on account of non production of the title deed, the land could not be purchased. This witness was never cross-examined.

[6] D.W.2 was Niranjan Das. He was dealing with the legal matters of BSNL. He deposed that as per the norms of the department a committee was constituted to determine the suitability of the land in question. The committee had opined that the land was suitable for construction. The department was inclined to purchase the land for which oral as well as written communications were issued. However, the documents of the sellers were not sufficient to prove their title. They could neither produce the title deeds nor the source of the land from where they got it. Plaintiffs were requested several times to produce the documents which they failed to do. They merely produced one Khatian which was not sufficient. The legal department therefore did not give opinion for purchase of the said land. After waiting for one and half years the department purchased another land. This witness was also not cross-examined.

[7] In the form of documentary evidence, the plaintiffs had produced a Khatian of the land in question as well as revenue receipts of having paid the land revenue. Land valuation certificate dated 03.05.1994 was produced at Ext.-5. It was issued by the District Magistrate & Collector assessing the market value of the land at Rs 9,00,000/- per kani. The communication of the approval of the Chief General Manager under letter dated 10.01.1995 was produced at Ext.7. A letter dated 23.02.1995 was produced at Ext.-8 in which the Telecom District Manager had conveyed to Smti. Subarnalata Barman Roy that she should obtain a Power of Attorney duly executed by all owners of the land so that the department can make payment in her favour. The plaintiffs had also produced a copy of notice issued under Section 80 of the Code of Civil Procedure to the defendants.

[8] The defendants had produced at Ext.-B, an internal note of the legal advisor of the department which indicated that no basic documents of the intending seller are available. He opined that Khatian does not create title and a document in the nature of purchase, exchange, inheritance or gift or allotment to the Government should be available on record. Likewise, non-encumbrance certificate also does not indicate that the property belonged to the plaintiffs. The said certificate was also based on hearsay information and contained a citation that the owner should produce all relevant documents along with the report. He opined that without satisfaction regarding the title, the process of purchase of the land should be kept in abeyance.

[9] The trial Court had framed several issues such as whether the defendants had promised to purchase the land of the plaintiff which they did not fulfill and whether the defendants had caused mental agony and sufferings to the plaintiffs by failure to fulfill the promise and thereby caused loss of `5,00,000/- to the plaintiffs.

[10] The trial Court was of the opinion that there was an unconditional acceptance of the offer of sale of the land by the department. They did not fulfill the promise for want of title deeds. He was of the opinion that the department should have relied on the Khatian instead they unnecessarily demanded title deeds. On the question of quantification of compensation, the learned Judge noted that there was no proof of reduction of the value of the land. However, on the ground that in the cross-examination there was no challenge to the plaintiffs' assertion that the land value had by then come down to `4,00,000/-, the learned Judge was of the opinion that the plaintiffs must be compensated. Eventually, he passed the decree for compensation of Rs 2,00,000/- towards reduced value of the land as well as for loss of interest on the sale consideration originally agreed.

[11] The department challenged the appeal before the District Court. The appeal was dismissed holding that a concluded contract had come into existence. The appellate Court also placed reliance on the presumptive value of a Khatian. The department has, therefore, filed this appeal. The appeal was admitted for consideration of following substantial questions of law :

"(i) Whether the allottee/legal heirs of allottee of a land can enter into a contract for sale without complying with the Rule 12 of Tripura Land Revenue & Reforms (Allotment of Land) Rules 1980?

(ii) Whether in case of breach of contract, compensation can be awarded even for remote or indirect damage?"

[12] Mr. Sankar Bhattacharjee, learned counsel appearing for the appellants submitted that there was no concluded contract between the plaintiffs and the defendants. Only negotiations had taken place. The approval of the Chief General Manager was conditional. The land could be purchased only after observing all formalities which would naturally include verification of title deeds. Plaintiffs failed to produce any document showing their title. Despite reminders, the plaintiffs did not produce such documents upon which looking to the urgency the Telecom Department purchased alternative land.

[13] He further contended that in terms of Rule 12 of the Tripura Land Revenue and Land Reforms (Allotment of Land) Rules, 1980 (hereinafter to be referred to as the Allotment Rules of 1980), any land allotted by the Government under sub-section 2 of Section 14 of the Tripura Land Revenue and Land Reforms Act, 1962 (hereinafter to be referred to as the said Act) would be inalienable. Even if there was an agreement of sale, the same was void. Counsel further submitted that in any case there was no evidence of any loss or damage caused to the plaintiffs.

[14] On the other hand Mrs. S. Deb (Gupta), learned counsel for the respondents, original plaintiffs submitted that an oral agreement had come into existence. The defendants had agreed to purchase the said land @ `9,00,000/- per kani. Chief General Manager had approved the deed. Despite reminders and notices from the plaintiffs, defendants failed to pay the sale consideration. In the meantime, on account of insurgency, the land prices had come down in the area. The statement of the plaintiff No.5 that the land value had come down to `4,00,000/-per kani was never questioned in the cross-examination. She further submitted that the plaintiffs had produced necessary documents showing their title to the land. The Khatian carries a presumptive value unless contrary is established. In the present case, there was no challenge to the plaintiffs' title. The department thus raised an impermissible ground for not purchasing the land. In this respect, she relied on the decision of the Supreme Court in case of Sudhangshu Mohan Deb versus Niroda Sundari Debidhup, reported in (2004) 4 SCC 389. She further submitted that the land was allotted prior to 1980 when the Tripura Land Revenue and Land Reforms (Allotment of Land) Rules, 1962 (hereinafter to be referred to as the Allotment Rules of 1962) were in force. As per Rule 15 of the said Rules, there was restriction for transfer of the land only for first 10 years of allotment and not thereafter.

[15] The question No.1 framed above though restricts its scope to whether an allottee of land can enter into a contract of sale without complying with the conditions of Rule-12 of the Land Allotment Rules of 1980. However, the same has to be seen and answered in background of facts on record. Such question would encompass the very issue whether in the present case there was a concluded contract and whether the defendants had breached such a contract by not honoring the promise to pay the agreed price for the land in question.

[16] In this context, we may recall that the case of the plaintiffs is one of oral agreement. The Indian Contract Act, 1872 undoubtedly does not debar an oral contract. A valid oral contract is enforceable. However in case of contract for sale of immovable property where a party comes forward to seek the decree for specific performance of contract on the basis of such oral agreement, heavy burden would lie on the party to prove that there was consensus ad idem between both the parties for a concluded oral agreement for selling of immovable property. This would require in clear terms the specification of the land under sale, the rate at which the same would be sold and purchased as also other crucial terms on which the parties agreed to execute the contract. Clear and marketable title of the seller in the land would be one of the crucial factors.

[17] In case of Brij Mohan and others versus Sugra Begum and others reported in (1990) 4 SCC 147, it was observed as under :

"We have given our careful consideration to the arguments advanced by Learned Counsel for the parties and have thoroughly perused the record. We agree with the contention of the Learned counsel for the appellants to the extent that there is no requirement of law that an agreement or contract of sale of immovable property should only be in writing. However, in a case where the plaintiffs come forward to seek a decree for specific performance of contract of sale of immovable property on the basis of an oral agreement alone, heavy burden lies on the plaintiffs to prove that there was consensus ad-idem between the parties for a concluded oral agreement for sale of immovable property. Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were concluded between the parties orally and a written agreement if any to be executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agreement. "

[18] In case of K. Nanjappa (Dead) by legal representatives versus R.A. Hameed alias Ameersab (Dead) by legal representatives and another, reported in (2016) 1 SCC 762, it was observed as under :

"There is no dispute that even a decree for specific performance can be granted on the basis of oral contract. Lord Du Parcq in a case (AIR 1946 Privy Council) observed, while deciding a suit for specific performance, that an oral contract is valid, binding and enforceable. A decree for specific performance could be passed on the basis of oral agreement. This view of a Privy Council was followed by this Court in the case of Koillipara Sriramulu vs. T. Aswatha Narayana, AIR 1968 SC 1028, and held that an oral agreement with a reference to a future formal contract will not prevent a binding bargain between the parties.

However, in a case where the plaintiff comes forward to seek a decree for specific performance of contract of sale of immoveable property on the basis of an oral agreement or a written contract, heavy burden lies on the plaintiff to prove that there was consensus ad idem between the parties for the concluded agreement for sale of immoveable property. Whether there was such a concluded contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immoveable property were concluded between the parties.

[19] The department also does not dispute that upon the plaintiffs offering to sale the land, the department had showed interest to purchase the same. Finding that the land was suitable for its construction, the negotiations had been carried out and as it appears had reached an advance stage. The plaintiffs had produced the valuation assessing it at `90,00,000/- per kani with which valuation the department was also agreeable. However, the question was of the title of the plaintiffs. It was in this context, the department had on several occasions required the plaintiffs to produce necessary documents evidencing their title. The plaintiffs produced a Khatian and the proof of payment of revenue for the said land. The department refused to accept such documents as establishing the plaintiffs' title.

[20] In my opinion, the plaintiffs failed to produce necessary documents of title and the courts below, therefore, committed an error in holding that the department had breached the contract. Firstly, Khatian may carry presumptive value as provided under Section 43 of the said Act. However, neither this presumption is irrefutable nor such presumption can substitute the title document. Entries in the record do not create titles. The source of the plaintiffs' acquisition of title had to be established through an authentic document. If the land was acquired through purchase the sale deed; if it was by way of inheritance, succession certificate or will. In the present case, since the plaintiffs claimed that the land was allotted to their predecessor in title by the Government, they ought to have produced the allotment letter or at least copy thereof. Except for the bare statements of the plaintiffs, we are not even aware as to when such allotment was made. This last aspect would be crucial because that would decide whether the plaintiffs could get out of Rule 14 of the Allotment Rules 1980. Section 14 of the said Rule pertains to allotment of land. Sub-section (1) of Section 14 provides that the Collector may allot land belonging to the Government for agricultural purposes or for construction of dwelling houses in accordance with such Rules as may be made in this behalf.

[21] Rule 12 of the said Rules provides that any allotment of land under sub-section (1) of section 14 shall be further subject to certain conditions including that the land will be heritable but not alienable without the written consent of the Collector. These Rules repealed the Land Allotment Rules of 1962. The Rules of 1962 contain less rigorous restrictions of alienability of the land so allotted since under Rule 12 provides that the allotment shall be subject to the condition that the land shall not be transferred by the allottee within 10 years from the date of allotment without the written consent of the Collector. Thus under the old Rules of 1962 the restriction of alienation of land without the consent of the Collector was only for a period of 10 years which in the Rules of 1980 was made in perpetuity. The Land Allotment Rules of 1980 contain a saving clause under Rule 15 providing that nothing in the said Rules shall affect any previous orders of allotment passed and any right, privilege, obligation or liability acquired, accrued or incurred under the Allotment Rules of 1962. Whether the right to alienate the land without the consent of the Collector in terms of Rule 12 of the Rules of 1962 had crystallized after passage of 10 years of allotment would be a relevant question. In absence of order of allotment, even this basic fact cannot be ascertained.

[22] Culmination of the said discussion is that there was no concluded contract of sale of land between the plaintiffs and the defendants. The negotiations had advanced to the stage of agreeing on broad terms but subject to the plaintiffs establishing their titles which they failed to do. The approval of the Chief General Manager conveyed to the plaintiffs was also conditional subject to fulfilling all formalities which would include verification of the titles. When these negotiations were going on the legal department of the defendants also advised that since the plaintiffs had not produced any title documents further negotiations be suspended. I do not therefore find that the courts below were justified in holding that there was a concluded contract which the defendants had breached.

[23] Even on the question of damages the plaintiffs had produced no evidence whatsoever. Mere assertion that the land price had come down from `9,00,000/- per kani to `4,00,000/-per kani was not sufficient. No valuation report of the current prices was produced. No other independent evidence was led. The factum of insurgency and its effect on land prices cannot be a matter of presumption or of drawing judicial notice. It was the primary duty of the plaintiffs to lead some evidence on reduction in the sale prices thereafter computation of compensation can be a matter of guesswork. Some element of guesswork cannot substitute the requirement of proof of foundational facts. Therefore, the decision of the Supreme Court in case of Construction and Design Services versus Delhi Development Authority reported in (2015) 14 SCC 263 relied upon by the counsel for the plaintiffs would be of no avail. In the said decision the Supreme Court observed that while computing such compensation element of guesswork may be permitted.

[24] Question No.1, therefore, will have to be answered in favour of the appellants, original defendants. Answer to the question No.2 is inbuilt in the question itself.

[25] In view of the discussion above and answer to the question No.1 it is not necessary to separately referred to the said question.

[26] In the result, judgments of the courts below are set aside. The appeal is allowed and disposed of accordingly. Pending application(s), if any, also stands disposed of.