LEGAL ASPECTS OF BUSINESS (ASSIGNEMENT) GROUP 5, SECTION B

DEOKABAI vs. UTTAM (BEFORE M.M.PUNCHHI AND YOGESHWAR DAYAL,JJ.

CIVIL APPEAL No. 4249 OF 1986, DECIDED ON JULY 27, 1993)

SUBMITTED BY : Manish Gupta (12P085) Mohit Batra (12P086) Nikhil Gupta (12P087) Nitish Gupta (12P088) Pankaj Singla (12P089) Abhijeet Parekh (12P090)

DEOKABAI vs. UTTAM

CONTENTS

S.NO NAME 1.) 2.) 3.) 4.) 5.) Summary of Case Facts Issue Applicable Law Arguments Given Final Decision and how the issue was tackled

Page Number 3 3 4 5 6

DEOKABAI vs. UTTAM

1.) Summary of the Case factsThe given case was between Deokabai, the Appellant, and Uttam, the Respondent. The judgement was delivered by Honourable Judge Mr. Punchhi,J. on 27th July,1993. In this case, the appellant was an aged widow who entered into an agreement with the respondent to sell a portion of his house in which she was residing with her daughter and grandchildren. The total consideration amount was decided as Rs 48,000. Out of this amount Rs 5,000 was paid as earnest money on the day of agreement .Both the parties agreed to the fact that once the required sale permission is received from the competent authority, the appellant will get the house registered in the name of respondent after she finds another suitable house. Two months after the permission was granted, the respondent sent a notice to the appellant asking her to get the sale deed executed on the 10th day from the day of sending of notice. The appellant did not turned up at the venue and the respondent filed suit praying for a decree of specific performance and possession of property in dispute or an alternative claim of return of earnest money of Rs 5,000 with interest. The trial court gave the decision in favour of respondent granting him the right to specific performance and possession of house. The appellant appealed against this in High Court. A Single Judge of High Court dismissed the claim for specific performance but decreed the suit for the refund of Rs 5,000 along with the interest. The respondent then filed letters patent appeal before a Division Bench of the High Court which then decreed the suit for specific performance. The appellant then appealed against the Judgement of Division Bench in the Supreme Court.

2.) Issue
Uttam thought that 2 months of time after getting permission to sell the house was sufficient enough for Smt Deokabai to find a new house on rent. So he sent a notice to her which required her presence at the Registrars office. Uttam took all the steps necessary to execute the deed but she didnt turn up so Uttam decided to file the case.

DEOKABAI vs. UTTAM

3.) Applicable Law

Contract Act of 1872 shall be applicable in this case. Section 35 which deals with contingent contracts upon happening or non happening of a specified event within a fixed time, will be applicable over here. As per this section, if the collateral event to the contingent contract does not happen by the expiration of the time fixed, then the contract becomes void.

4.) Argument Given

1) Trial court Arguments none specifically mentioned in the case Verdict relief of special performance , i.e. portion of house to be given to respondent.

2) Single Judge Arguments basis was compassion. Appellant being a widow, living with her daughter and grandchildren, and her son having died recently, and the house in question being her sole property, it would be inhuman to compel her to leave the house. The judge however, did not agree with the appellant that the contract contained a contingency Verdict dismissed the claim for specific performance, and granted respondent refund of Rs 5000 along with 8% interest

3) Letters patent Bench Arguments Basis of judgement of learned Single Judge was compassion and not legal. However, the bench agreed with the learned Single Judge that the contract did not contain any condition requiring fulfilment before which the appellant had to execute the sales. Verdict upset the judgement of the learned Single Judge, and gave the house to the respondent

DEOKABAI vs. UTTAM

4) Supreme Court Arguments The inclusion of difficulty in getting the sale deed of house registered in the name of vendee is a positive safeguarding meaning and not just empty words. Hence, conduct of respondent becomes material to be examined before this claim is accepted. The court concluded that all the events from May to July 1979 took place in a hurried manner; hence appellant cannot be accused of neglect in searching for alternate house. Additionally, Nagpur being a populous town with rent control act in operation, it is not easy for appellant to easily find an accommodation. Mrs. J.S.Wad, learning counsel appearing for the respondent, contended that whatever the alleged cause of frustration, contract cannot be discharged when a contract becomes onerous merely because of the difficulty to perform is onerous. This argument, however, is not applicable to the present case. No frustration as such was observed when the parties were put to observe what they were required to under the contract. The Supreme Court found the conduct of respondent objectionable and unreasonable. Respondent should have issued a notice to appellant to seek another accommodation within a reasonable time. However, respondent unabashedly and hurriedly asked the appellant to vacate the house, without giving her sufficient time to seek another accommodation. The court found that the contract bore important contingencies i.e. the appellant getting a suitable accommodation before she could be asked to perform the contract and in case of genuine difficulty arising to opt for returning the earnest money with interest (previous courts did not agree to the existence of this contingency). Hence appellant was not asked to part with her house. Verdict House to remain with appellant. Respondent to be given Rs. 5000 along with 8% interest calculated from the date of payment of the earnest money by respondent till payment or recovery.

DEOKABAI vs. UTTAM

5.) Final Decision and how the issue was tackled

The final decision by the Supreme Court was to grant the respondent refund of Rs. 5000 along with 8% interest rate calculated from the date of payment of the earnest money by respondent till payment or recovery. Appellant was allowed to keep her portion of the house. The Single Judge gave his verdict based on compassion, but the Letters Patent Bench restricted itself to the legality of the issue only. None of the three courts, the trial court, the single judge, and the Letters Patent Bench, accepted that there was contingency clause in the contract. The Supreme Court took a holistic view of the contract. It acknowledged the existence of a contingency clause in the contract, and noticed that the respondent behaved in a haste to execute the contract. Hence, it allowed the appeal of the appellant.