Anhar Ahamed Chowdhury and another Vs. Md. Shamsuzzaman and others, 59 DLR (2007) 66

Case No: First Appeal No. 95 of 2003

Judge: Syed Md. Ziaul Karim,

Court: High Court Division,,

Advocate: Mr. Md. Amir Hossain,,

Citation: 59 DLR (2007) 66

Case Year: 2007

Appellant: Anhar Ahamed Chowdhury and another

Respondent: Md. Shamsuzzaman and others

Delivery Date: 2006-06-19

Supreme Court of Bangladesh
High Court Division
(Civil Appellate Jurisdiction)
 
Present:
S Rahman Miah, J.
SM Ziaul Karim, J.
 
Anhar Ahamed Chowdhury and another
..........Appellants
Vs.
Md. Shamsuzzaman and others
…….Respondents
 
Judgment
July 19, 2006.
 
Contract Act (IX of 1872)
Section 10
All the agreements are contracts, whether oral or in writing, if they are made by the free consent of parties competent to contract for a lawful object and are not expressed declared to be void.
 
Cases Referred To-
Ali Mahammad Khan (represented by his heirs) vs. Riazuddin Khera PLD 1981 Karachi 171; Shankarkal Narayan Das vs. The New Mofussil Co Ltd. and others AIR 1946 Privy Council 97; Rezaur Rahman and others vs. Ahmed Hossain Khan 1986 BLD 14.
 
Lawyers involved:
Amir Hossain with Shueb Ahmed, Advocates—For the Appellants.
MA Malek, Senior Advocate with SM Shahjahan, Moinuddin and Md. Ariful Islam, Advocates—For Respondent No. 1.
 
First Appeal No. 95 of 2003
 
JUDGMENT
SM Ziaul Karim J.
 
1.         This appeal is directed against the judgment and decree dated 20-11-2002 passed by the learned Joint District Judge, First Court, Dhaka, in Title Suit No. 232 of 1999, decreeing the suit.
 
2.         Short facts leading to this appeal are, that on 12-1-1999 the respondent No. 1 as plaintiff instituted Title Suit No. 232 of 1999 in the First Court of Subordinate Judge, Dhaka for Specific Performance of Contract of sale of apartment No. 3.B at 3rd floor measuring an area 2160 square feet described in the Schedules A and B of the plaint, impleading the appellants and respondent Nos. 2-5 as defendants.
 
3.         The plaintiffs' case, in brief, is that defendant No. 1 is the distant relation of him; that in February, 1997 defendant No. 1 visited at his residence and informed him that he has undertaken to construct apartment on his residential plot bearing Registration No. 213, dated 13-3-1981, No. 2D, Block No. NE(D), Road No. 73/G, Gulshan Residential Area, Dhaka as described in Schedules A and B of the plaint in the name of "BLISS" Apartment Project; that in course of discussion defendant No. 1 also informed him that out of 10 apartments of the above "BLISS" Apartment Project he had already sold nine apartments to his relatives and he offered to sell the remaining one i.e. apartment No. 3B (located on the 3rd floor at the western side of the building) as shown in the brochure of the "BLISS" Apartment to the plaintiff at a 10% discount price, provided the total discounted price of the apartment project including a car parking space and the driver's room which being Taka 41,22,000 is to be paid in advance; that as per verbal agreement with defendant No. 1 and the terms and conditions stipulated in the brochure of the "BLISS" apartment project as supplied, the defendant No. 1 is to execute and deliver a "Deed of Agreement "in respect of sale of the said apartment to the plaintiff and to execute a "Registered Sale Deed" on receipt of the full payment and hand over the possession of the apartment by June, 1998; that the defendants relied on such terms and conditions as well as the promise held out to him and agreed upon the same, whereupon the plaintiff acting in good faith thereby made payment; that on the basis of above terms and conditions, the plaintiff decided to purchase the said apartment at a consideration of Taka 41,22,000 for his sister who lives in New York USA. Subsequently, the plaintiff paid Taka 20,00,000 and 21,22,000 to the defendant No. 1, all in cheques, on 12-3-1997 and 16-5-1997 respec­tively and the defendant Nos. 1 & 2 acknowledged the same by money receipt on the same date; that detailed purpose of above full payment of taka 41,22,000 has been described in the 2(two) money receipts issued by the defendant Nos. 1 and 2; that at the time of payment of first installment of Taka 20,00,000 on 12-3-1997 the plaintiff asked defen­dant Nos. 1 and 2 for the "Deed of Agreement". But they assured him as the same was not ready and as soon as they will get it, then it will be delivered to him. On repeated requests the defendant Nos. 1 and 2 failed to furnish the "Deed of Agreement". In favour of the plaintiff; that the plaintiff thereafter repeatedly requested the defendant Nos. 1 and 2 for providing him the "Deed of Agreement" as they received the full payment for the said apartment but with no effect; that subsequently, the plaintiff came to learn that defendant No. 1 was trying to mortgage the entire apartment building including the land to the IFIC Bank at Gulshan Branch for loan; that on being confirmed about the sanction of loan by the IFIC Bank Ltd., the plaintiff tried to secure the "Deed of tripartite agreement/sale deed" but in vain. Finding no other alternative, the plaintiff served a legal notice upon the defendants requesting them to execute and register sale deed but with no effect; that despite of receiving the total price of Taka 41,22,000 for the said apartment, the defendant Nos. 1 and 2 failed to execute the deed of agreement/registered sale deed and deliver the possession of the said apartment to the plaintiff by breach of agreement and their promise to execute and deliver the said sale deed, which defendant Nos. 1 and 2 were contractually bound and legally obliged to do. Moreover, they proceeded to mortgage the said apartment to defendant No. 3 in order to obtain a loan which is mala fide and fraudulent act of them. Hence the suit.
 
4.         The defendant Nos. 1 and 2 contested the suit by filing joint written statement contending, inter alia, that defendant No. 1 did not make any offer to sell any apartment to the plaintiff at a discount price; that the defendant No. 1 merely informed the plaintiff that those making full payment in cash at the time of booking they will get 10% discount; that the plaintiff, then persuaded the defendant No. 1 to give booking of an apartment being Flat No. 3B in "BLISS" Project; that defendant No. 1 agreed with the plaintiff and fixed the price of the same at Taka 41,22,000 at a discount rate; that the plaintiff reserved the said apartment in his name as per the terms and conditions contained in the brochure of 'BLISS'; that the plaintiff completed an application form dated 12-3-1997 and paid the said discount price in full on 12-3- 1997 and 16-5-1997 by their cheques bearing Nos. 9865924, 1532877 and 3343299 respectively; that in the brochure of "BLISS" it was clearly stated that a bilateral agreement, i.e. the deed of agreement, will be executed between the seller and buyer on payment of booking money. Such type of agreement cannot be executed unilaterally; that after receiving the said consideration money from the plaintiff, defendant No. 1 requested him on several occasions to execute the agreement for sale but instead of signing the same the plaintiff requested the defendant Nos. 1 and 2 to arrange Income Tax clearance certificate for the amount he had paid. But the defendant Nos. 1 and 2 refused to do the same; that thereafter, they proposed to refund the entire consideration money to the plaintiff. Subsequently, when they prepared tripartite agreement then plaintiff himself refused to sign on it, although he agreed to sign it earlier; that in the brochure it is nowhere stated and/or agreed to execute and deliver a registered sale deed on receipt of full payment; that defendant Nos. 1 and 2 have undertaken to hand over the completed and finished apartment by June, 1998; that said period of time was given in the brochure only as expected time of completion of the apartment; that the said apartment has not been sold to the plaintiff rather, he has only reserved the same; that the plaintiff had full knowledge of the loan application and it was also within knowledge of defendant Nos. 3-4 about the reservation of the said apartment; that defendant Nos. 1-2 were always ready and willing to execute a tripartite agreement but it was the plaintiff who had not taken any step towards executing the same; that due to inadver­tence on the plaintiff's part, the defendant Nos. 1 and 2 have suffered loss and, as such, they served a legal notice dated 30-8-1998 to the plaintiff claiming to compensate their loss; and that the plaintiff had no cause of action to institute the suit and, as such, the same is liable to be dismissed.
 
5.         The defendant Nos. 3-6 also contested the suit by filing joint written statement contending, inter alia, that there was no oral agreement with the defendant No. 1 within their knowledge; that the building as described in Schedule of the plaint was not free from encumbrances as the defendant No. 1 has taken loan of Taka 1,80,00,000 to construct six-storied apartment building on the schedule premises; that the defendant No. 1 executed regis­tered mortgage deed No. 11056 dated 16-7-1997 and also executed registered irrecoverable general power of attorney No. 11058 and all charge docu­ments in favour of defendant No. 4; that the plaintiff had full knowledge about the mortgage of the entire apartment building, including the land to IFIC Bank Ltd. i.e. defendant Nos. 3-6 for commercial house building loan; that there was no contract between the plaintiff and defendant Nos. 3-6 to make any tripartite agreement; that the plaintiff was not the party to the defendant Nos. 3-6 rather, they did not receive any letter from the plaintiff; that no irregularities were committed by defendant No. 1 and the IFIC Bank regarding sanction of loan, and availing the loan facilities in full; that the plaintiff had no cause of action to institute the suit against the defendant Nos. 3-6 and, as such, the same is liable to be dismissed.
 
6.         On the pleading following issues were settled :

a) Whether the suit was maintainable in the present form ?
b) Whether the suit was barred by limitation ?
c) Whether the plaintiff and defendant entered into a valid agreement ?
d) Whether the plaintiff was entitled to get a decree as prayed for ?
e) To what relief, if any, the plaintiff was entitled to?
 
7.         In course of trial the plaintiff examined two witnesses including himself while defendant Nos. 1-2 examined one witness namely, DW 1 Anhar Ahmed Chowdhury and defendant Nos. 3-6 examined one witness namely, Iqram Elahi in support of their respective cases.
 
8.         By the impugned decree, the learned Joint District Judge decreed the suit. Hence the appeal.
 
9.         Mr. Amir Hossain, the learned Advocate appearing with Mr. Shueb Ahmad, the learned Advocate for the appellant, supports the appeal and submits, that the learned Judge of the trial Court seriously erred in law to appreciate the real case of the defendant-appellant Nos. 1 and 2 and, as such the impugned judgment and decree is not sustainable. He adds that the learned Judge of the trial Court failed to assess their counter-claim and completely misread and misjudged their written statement. The learned Counsel submits that there was no valid contract between the plaintiff and defendant No. 1. He refers section 22 of the Specific Relief Act which provides that the jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal. He submits that as per provisions under section 62 of the Contract Act if the parties agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. So, according to him, the plaintiff misconceively instituted the instant suit for Specific Performance of Contract, rather he should go for arbitration which was the proper course of his redress. He adds that merely receiving of the money does not lead to an agreement and, as such, the same should hot be performed. He further submits that the defendant Nos. 1 and 2 took loan from the Bank, so it was the agreement between themselves and, as such, IFIC Bank was not the necessary party and the declaration sought against them was illegal. The learned Counsel has given emphasis as there was no valid contract between the plaintiff and the defendant No. 1, so they had nothing to perform. The learned Counsel submits that the learned Judge of the trial Court failed to weigh and sift the evidence on record as required by law and evidently fell in an error in coming to his ultimate decision occasioning failure of justice.
 
10.       Mr. Md. SM Shahjahan, the learned Advocate appearing for the plaintiff-respondent No. 1, opposes the appeal and submits that admittedly the plaintiff paid the entire consideration for Taka 41,22,000 for the purpose of purchasing the apartment as mentioned in the Schedule of the plaint. He adds that it is true that the provisions of section 22 of the Specific Relief Act is discretionary but such discretion should be applied judicially, inasmuch as in 1997 the plaintiff paid entire money so the balance of convenience and inconvenience is in favour of the plaintiff. He submits that the application form for allotment of the apartment (Exhibit 4) is itself an agreement and defendant No. 1 is bound to perform the same. He adds that the money receipts (Exhibits 1 and 2) clearly indicate that the same were received for the purpose of apartment as described in the Schedule of the plaint. So, according to him, the necessary ingredients of contract i.e. offer, acceptance and consideration are present in this particular transaction. The learned Counsel refers at the paragraph 9 of the written statement of defendant Nos. 1-2 wherein they stated that the plaintiff paid the total amount of Taka 41,22,000 by cheques on 12-3-1997 and 16-5-1997 and the same was received by the defendant Nos. 1 and 2 wherein the purpose of payment was described and the same was substantiated by the evidence of DW 1. The learned Counsel lastly, submits that the learned Judge of the trial Court after considering the evidence on record rightly decreed the suit which calls for no interference by this Court.
 
11.       No one appears on behalf of the defendant-respondent Nos. 2 to 5 to oppose the appeal.
 
12.       In order to appreciate the submissions advanced by the learned Counsels of both sides, let us now weigh and sift the evidence on record adduced by the parties.
 
13.       PW 1, Md. Shamsuzzaman, as plaintiff deposed that the defendant Nos. 1 and 2 are the distant relations of his wife and they hail from the Sylhet district. In the month of February, 1997 defendant No. 1 visited his house wherein he proposed to sell a Flat to him in his apartment project named "BLISS". The defendant No. 1 also proposed that if he pays the entire consideration in full then he will get 10% discount and the price of the apartment will be for Taka 41,22,000. He added that after considering his proposal he agreed to purchase the same, and accordingly, on 12-3-1997 he issued a cheque for Taka 22,00,000 and defendant No. 1 acknowledged the same by issuing money receipt in his own writing pad which he proved as Exhibit 1 wherein defendant Nos. 1 and 2 signed. He added that he repeatedly requested for the deed of agreement, but the same was not given to him. Thereafter, on 16-5-1997 he further paid Taka 21,22,000 by cheque and the same was also acknowledged by defendant No. 1 by issuing the money receipt in his own writing pad which he proved as Exhibit 2. Thereafter defendant No. 2 issued an allotment letter in favour of him which he proved as Exhibit 3 and he also proved the application form of the apartment as Exhibit 4. After completion of all formalities he further requested to defendant Nos. 1 and 2 for executing deed of agreement but they failed to do so. Thereafter, he came to learn that defendant No. 1 was trying to mortgage the entire property including his apartment to the Bank for the purpose of loan. Thereafter, he approached to the authority of the Bank to the effect that as he purchased the apartment so the same cannot be mortgaged. He added that on 18-6-1998 he served a legal notice to the defendants asking them to execute a tripartite agreement but with no effect. In cross-examination by the defendant Nos. 1-2, he denied the suggestion that he did not agree to execute deed of agreement with defendant Nos. 1-2. In cross-examination by the defendant Nos. 3-6, he stated that the Bank Manager (defendant No. 4) merely assured him verbally not in writing. He denied the suggestion that the Bank took mortgage of the Schedule property free from all encumbrances.
 
14.       PW 2, Rokshana Zaman, wife of plaintiff. She deposed that defendant Nos. 1 and 2 are her distant relations. In February, 1997 defendant No. 1 came to their residence to attend in a family function wherein he proposed to sell an apartment at a consideration of Taka 41,22,000 at a discount price of 10%. Accordingly, her husband paid Taka 20,00,000 by cheque and approached to them for executing deed of agreement, but they did not do so. Subsequently, her husband paid them entire money for the apartment by another cheque. But on repeated requests the defendant Nos. 1 and 2 failed to execute any deed of agreement in favour of her husband. She added that defendant No. 1 mortgaged the schedule property with the Bank. After some days she along with her husband went to the residence of defendant No. 1 wherein an Advocate informed them that as the Schedule property was mortgaged to the Bank so they will not get their apartment and the defendant No. 1 also behaved badly with them. In cross-examination, she denied the suggestion that she was deposing falsely.
 
15.       DW 1 Anhar Ahmed Chowdhury is the defendant No. 2. He deposed that a discussion was held with the plaintiff for construction of apartment at his Plot No. 2D, Road No. 73/G, Gulshan 2, Residential Area. He added that the plaintiff requested him for purchasing one apartment and defendant No. 1 agreed to sell the same at a consideration of Taka 48,00,000 and it was decided that if the plaintiff pays money at a time then he will get 10% discount and the price of apartment will be for Taka 41,22,000. Thereafter the plaintiff paid the entire money for Taka 41,22,000 by two cheques dated 12-3-1997 and 16-5-1997 which he proved as Exhibits Kha and Kha(1) respectively and his signature thereon as Exhibits Kha-1(1), Kha-1 (2) respectively. The plaintiff also signed in the application form. Subsequently, he asked the plaintiff to execute deed of agreement but he refused to sign on it. Thereafter, they took loan for constructing the apartment building. Plaintiff served several letters to defendant No. 4 for stopping the loan. Subsequently, the Bank granted loan for Taka 1,40,00,000 deducting the price of the apartment of the plaintiff. In cross-examination he stated that he mortgaged the property after reservation of the apartment by the plaintiff. He added that on 12-3­-997 and 16-5-1997 the plaintiff paid Taka 20,00,000 and 21,22,000 respectively for the apartment in their " BLISS" Project. He denied the suggestion that they sold the suit flat to the plaintiffs.
 
16.       DW 2 Iqram Elahi deposed on behalf of the defendant Nos. 3-6. He stated that on 7-1-1997 the defendant No. 1 prayed for sanction of loan which he proved as Exhibit Kha(1). Accordingly a mortgage deed was executed on 16-7-1997 with the Bank and defendant No. 1. In cross examination on behalf of defendant Nos. 1-2 he stated that initially loan was approved for Taka 1,80,00,000 but after deduction Taka 1,40,00,000 was granted and on behalf of plaintiff, he denied the suggestion that plaintiff's apartment was not released and defendant No. 1 did not repay the loan,
 
17.       These are all of the material evidence adduced by both sides.
 
18.       We have gone through the plaint, written statements, depositions of witnesses, all Exhibits, other materials on record and given our anxious considerations to the submissions advanced by the learned Counsels of both sides.
 
19.       Admittedly, on the basis of terms and conditions laid down in brochure of Apartment Project "BLISS" of defendant Nos. 1 and 2 (Exhibit 16), plaintiff decided to purchase apartment No. 3B of residential Plot No. 2D, block No. NE (D), Road No. 73/G, Gulshan Residential Area, Dhaka at a consideration of Taka 41,22,000. Accordingly, he paid entire money (money receipts (Exhibits Nos. 1 and 2) against aforesaid apartment.
 
20.       The point for determination is, whether the learned Joint District Judge, First Court, Dhaka, committed any error of law in his judgment and decree dated 20-11-2002, occasioning failure of justice.
 
21.       At the outset, it will be profitable to extract section 12 of the Specific Relief Act which runs in the following manner:

"12. Cases in which Specific Performance enforceable.— Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced-
(a) when the act agreed to be done is in the performance, wholly or partly, of a trust;
(b) when there exists no standard for ascertaining the actual damage caused by non
performance of the act agreed to be done;
(c) when the act agreed to be done is such that pecuniary compensation for its nonperformance would not afford adequate relief; or
(d) when it is probable that pecuniary compensation cannot be got for the non performance of the act agreed to be done.
In the Contract Act the following words and expressions are used for the purpose of a valid contract:
(a) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal;
(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;
(c) The person making the proposal is called the "promisor" and the person accepting the proposal is called the "promisee"
(d) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains, from doing, or promises to do or to abstain from doing something, such act or abstinence or promise is called a consideration for the promise;
(e) Every promise and every set of promises, forming the consideration for each other, is an agreement;
(f) Promises which form the consideration or part of the consideration for each other are called reciprocal promises.
 
22.       We find from the evidence on record that defendant Nos. 1-2 received the entire consideration money from the plaintiff. (Exhibits 1 and 2) and defendant No. 2 as DW 1 admitted such facts of payment. It further appears to us that the plaintiff got a letter of allotment Chart (Exhibit 3) wherein distribution of apartments were described and in the application form (Exhibit 4) shows that the plaintiff made a declaration that he accepted the terms and conditions.
 
23.       We find that no formal agreement was made between the plaintiff and the defendant Nos. 1 and 2 but the transactions were admitted by both the parties. It appears from the record that in the brochure (Exhibit 16) all terms and conditions in respect of payment as well as delivery of possession have been prescribed and the defendant Nos. 1 and 2 are bound by those terms and conditions. The trial Court rightly held that the same will be treated as an agreement between the parties. Moreover, the evidence of PWs 1 and 2 in respect of payment against apartment are consistent and uniform, there is no reason to disbelieve such evidence, moreso, their evidence are also corroborated by DW 1. So, their evidence in respect of payment against apartment are invulnerable to the credibility.
 
24.       In the case of Rezaur Rahman and others vs. Ahmed Hossain Khan reported in 1986 BLD 14 wherein it is held:

"Contract.— Oral Contract is as valid as written contract—But in the matter of oral contract, once it is denied by one of the parties, a very heavy onus of proof lies on the other party in establishing its truth."
 
25.       This view also receives support in the case of Shankarkal Narayan Das vs. The New Mofussil Co. Ltd. and others reported in AIR 1946 Privy Council 97 wherein it is observed that an oral contract is as valid as a written contract and is enforceable. But this is also true that while genuine written contracts are easy to prove, in the matter of stories of oral contracts, in which by their very nature there is great scope for easy concoctions and fabrications, once denied by one of the parties a very heavy onus of proof lies on the other party in establishing its truth"
 
26.       Moreover, section 10 of the Contract Act provides that all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.
 
27.       In the case of Ali Mohammad Khan (represented by his heirs) vs. Riazuddin Khera reported in PLD 1981 Karachi 171 wherein it was observed that for a valid agreement it is not necessary that it should be in writing. There can be valid, legal and binding oral agreement between the parties. Exhibits 5/3 and 5/5 are evidence of oral agreement between the parties which was acted upon by the parties and section 10 of the Contract Act. The agreement fulfils all the conditions required by law. All the agreements are contracts, whether oral or in writing, if they are made by the free consent of parties competent to contract for a lawful object and are not expressly declared to be void.
 
28.       Having regard to the facts, we find that Exhibit 4 is an application form of the apartment, Exhibits 1 and 2 are the money receipts issued by the joint signatures of defendant Nos. 1-2 and the same were acted upon. So, the essential ingredients of contract are found present. The defendant Nos. 1­2 are contractually bound and legally obliged by the terms and conditions laid down therein.
 
29.       The learned Judge of the trial Court rightly held that as the plaintiff paid the entire amount and the defendant respondent Nos. 2-5 granted loan for Taka 1,40,00,000 to the defendant No. 1 against the appellants' project excluding the portion of the plaintiff so the same is not binding upon him.
 
30.       Having regard to the facts, we are unable to accept the submissions advanced by the learned Counsel for the appellants. However, the legal plea taken by the learned Counsel for the respondent No. 1 appears to have a good deal of force.
 
31.       Having considered the facts and circumstances of the case and foregoing narrative, we are led to the conclusion that the learned Judge of the trial Court rightly decreed the suit which calls for no interference by this Court. Thus, the appeal having no merit fails.
 
32.       In the result, the appeal is dismissed with cost. The impugned judgment and decree dated 20­11-2002 passed by the learned Joint District Judge, First Court, Dhaka in Title Suit No. 232 of 1999 is hereby affirmed and the order of stay of all further proceedings of Title Execution Case No. 3 of 2003 granted earlier is recalled and stands vacated.
       
Send down the lower Court's record at once.
 
Ed.