H.N. Fabrics Ltd. Vs. Mallick Textile Indus­tries and others, 37 DLR (AD) (1985) 126

Case No: Civil Petition for Special Leave No. 335 of 1984

Judge: Badrul Haider Chowdhury,

Court: Appellate Division ,,

Advocate: Mr. Rafique-ul-Huq,Mr. Asrarul Hossain,,

Citation: 37 DLR (AD) (1985) 126

Case Year: 1985

Appellant: H.N. Fabrics Ltd.

Respondent: Mallick Textile Indus­tries and others

Subject: Law of Contract,

Delivery Date: 1985-1-15

 
Supreme Court
Appellate Division
(Civil)
 
Present:
FKMA Munim, CJ.
Badrul Haider Chowdhury, J.
Shahabuddin Ahmed, J.
Chowdhury ATM Masud, J.
 
H.N. Fabrics Ltd.
…………………………....Petitioner
Vs.
Mallick Textile Indus­tries and others
…………………….……..Respondents
 
Judgment
January 15, 1985
 
Breach of contract
The plaintiff is to prove the mutuality of the agreement in an action for breach of contract.
The idea of the purchase price, the offer of money or money value for the defendant's promise remains the essence of consideration. The plaintiff must show that the defendant's pro­mise, upon which he was suing, was a part of the bargain to which he himself had con­tributed………………(7)
The plaintiff should succeed in an action for breach of contract if he proves that an agreement has been reached under which the defendant has made him a definite promise……………………(8)
The Court will not decree a suit for specific performance of a contract the terms of which are uncer­tain. There being no concluded contract which could be enforced by specific performance, the suit has rightly been dismissed………....(9)
 
Cases Referred To-
Hyam vs. Cubbay, AIR 1916 page1 (EB); Rossiter vs. Miller 1878, 3 A.C.1124 Lord Blackburn; Hatzfeld-Wildenburg Vs. Alexander 1912 1 Ch. 284-288 AIR 1933 PC 31.
 
Laweyrs Involved:
Asrarul Hossain, Senior Advocate, instructed by Miah Abdul Gafur, Advocate-on-Record—For the Petitioner.
Rafiqul Huq, Senior Advocate, instructed by Sharifuddin Chaklader, Advocate-on-Record—For the Respondents.
 
Civil Petition for Special Leave No. 335 of 1984
(From the judgment and decree dated 29-7-1984 passed by the High Court Division, Dhaka Bench in F.A. No. 221 of 1981.)
 
JUDGMENT
Badrul Haider Chowdhury J.
 
In this peti­tion for special leave the only question is whether there was an agreement for sale of the suit property which could be enforced by a suit for specific performance of contract.
 
2. Facts are as follows: Plaintiff brought the suit for specific performance of contract alleging, inter alia, that the plaintiff entered into a contract with the principal defendant No.1 through defendant No. 2 the Managing partner, for purchase of the suit property to which defendant 2 agreed to sell and the price was settled at Tk. 9,00,001/-. The plaintiff paid in cash Tk. 1,00,001/- as earnest money and the deed of agreement for sale was executed on 9.1.79 and it was stipulated that defendants would hand over possession of the suit property to the plaintiff on receipt of a further sum of Tk. 4,00,000/- out of the consideration  money from the plaintiff by 30.4.1979 or any other date thereafter or with the execution and registration of the deed of sale on 30.6.1979 and on receipt of the balance consideration money by which time the defen­dants would obtain requisite permission from the authority and necessary income tax cleara­nce certificate at their own costs. The plaintiff however, could not pay the principal defendant further sum of Tk. 4,00,000/- as stipulated but the plaintiff was wiling and ready to pay balance Taka 8,00,000/- but the defendants did not pay heed to the same in spite of repeated request to complete the transaction and therefore suit for specific performance of contract was filed.
 
3. The defendant has admitted the case of the plaintiff that there was an agreement for  sale and the earnest money of Tk. 1,00,001/- was paid but the price was fixed at Tk. 16,00,001,00 and not at Tk. 9,00,001/-.
 
4. Evidence was led by both sides and the trial court found that there was a contract between the parties and observed as under:    
 
'I have no manner of doubt to come to the finding that the terms and condi­tions of the disputed agreement for sale of the suit property as have been depos­ed to by the plaintiff's witnesses were the real terms and conditions which have been agreed to by the parties on 9.1.79." 
 
And in this view of the matter the suit was decreed.
 
5.  On appeal, the High Court Division found that there was an agreement for sale but the  price was fixed  at Tk.16,00,001/-. There was dispute as to terms and observed:
 
"The plaintiff could not prove his case of terms of the deed of agreement:
though the plaintiff is not entitled to a decree for specific performance of con­tract, and accordingly dismissed the suit with a direction to refund the Tk.1,00,001/- to the plaintiff which was paid as earnest money.'' 
 
6. Mr. Asrarul Hossain learned Counsel appearing for plaintiff-petitioner canvassed that Ext. 1 is the correct version of the agreement and not Ext. C which has shown variations of terms. In this case the plaintiff produced Ext. 1 as to the terms of the con­tract whereas the defendants produced Ext. C and the prices in the two terms are completely different. P.W.2 who drafted the agreement was examined and he himself stated;
 
"Ext.1 is not the same draft which I drafted as Ext. 1 includes the boundary of the schedule which was not in my draft."
 
He further stated the deed of agreement filed by the defendant is not identical with the deed of agreement drafted by him. He fur­ther denied the suggestion that the deed of agreement filed by the defendant "is the exact preparation of the deed settled between the parties."
 
7. The typical modern contract is the bargain struck by the exchange of promises which must be backed by consideration. The idea of the purchase price, the offer of money or money value for the defendant's promise remains the essence of consideration. The plaintiff must show that the defendant's pro­mise, upon which he was suing, was a part of the bargain to which he himself had con­tributed. Mutuality is essential. Prof. Che­shire says "to this requirement of mutuality the name of consideration was given" (Law of Contract-Cheshire and Fifoot P 46, 2nd Ed).
 
8. The plaintiff should succeed in an action for breach of contract if he proves that an agreement has been reached under which the defendant has made him a definite promise; that the parties thereby intended to affect their legal relations and that the defendant has broken his promise though it was supported by the presence of considera­tion.
 
9. The question is whether there was a concluded contract between the parties which could be enforced by a suit for specific per­formance. It is well settled that the court will not decree a suit for specific performance of a contract, the terms of which are uncer­tain. In Hyam vs. Cubbay AIR 1916 page 1 (EB). It was observed:
 
"The court will doubtless not enforce specific performance of a contract, the terms of which are uncertain. If the Court does not clearly know what the contract is which the parties entered into, it cannot obviously enforce it.”
 
In Rossiter vs. Miller 1878, 3 A.C.1124 Lord Blackburn stated: 
 
“It is a matter to be taken into ac­count in construing the evidence and determining whether the parties have really come to a final agreement or not." 
 
10. Law does not recognise a contract to enter into a contract (Per Parker, J. in Hatzfeld-Wildenburg Vs. Alexander 1912 1 Ch. 284-288). The Privy Council quoted with approval the following passages: AIR 1933 PC 31 
 
“It appears to be well settled by the authorities that if the document or letters relied on as constituting a contract contemplate the execution of a further contract between the par­ties it is a question of construction whe­ther the execution of the further con­tract a condition of term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter, case there is a binding contract and the reference to the more formal document may be ignored." 

The phrase ''contract to enter into a contract" was explained by the Court of Appeal in 1924 C.A. 97 (at P.114)
 
"The true meaning of the phrase is that the Court will not enforce "a contract to make a second contract parts of the terms of which are indeterminate and have yet to be agreed, so that there is not any definite contract at all which can be enforced, but only an agreement for a contact some of the terms of which are not yet agreed." 
 
Keeping these principles in view, there in no hesitation in saying that the High Court Division took the correct view there was no concluded contract which could be enforced by specific performance.
 
In the result this petition is dismissed.
 
Ed.