Allowed¶70

Chita Ranjan Sharma v. Puskar Sharma

Orissa HC17 Jan 2025RSA/337/2010

Case brief

AI extract

What is this about?

Orissa High Court, Cuttack; RSA No.337 of 2010; Sashikanta Mishra, J.; decided 17.1.2025; interpretation of agreement Ext.1 dtd.11.11.2003; consideration = one-time settlement amount Rs.2,62,000/- accepted by Vijaya Bank, not the outstanding Rs.9,13,522/-; lower appellate court misread Ext.1; appeal allowed; first appellate judgment/decree set aside; trial court decree confirmed; Section 29 Contract Act argued by respondent; Orissa State Housing Board leasehold transfer; tripartite sale deed; unilateral revocation/rescission.

What did the court decide?

Appeal allowed; impugned judgment dated 13.5.2010 and decree dated 21.6.2010 of the Addl. District Judge, Rourkela in R.F.A. No.10/2009 set aside; judgment dated 16.3.2009 and decree dated 23.3.2009 of the Civil Judge (Sr. Division), Rourkela in C.S. No.22/2006 confirmed. ¶70

Chita Ranjan Sharma Vs Puskar Sharma — Orissa HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Substantial question of law: whether, in passing the judgment, the lower appellate court misinterpreted the terms and conditions under Ext.1 (the agreement dtd.11.11.2003). +1 more

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Court's answer

The trial court correctly appreciated the oral and documentary evidence: the plaintiff, having paid Rs.2,62,000/-, performed his part of the contract, whereas Defendant No.1, by unilaterally revoking the agreement, acted beyond it.

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Ratio / Principle

The language of the agreement (Ext.1) is clear and unambiguous that the dues of the Bank would be settled and cleared by the plaintiff; this Court is unable to concur with the First Appellate Court's finding — the amount which the Bank holds to be due and upon receipt whereof the loan stands liquidated has to be treated as the dues outstanding.

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Key takeaways

The First Appellate Court's finding that the intention of the parties was for the plaintiff to pay Rs.9,13,522/- amounts to reading into the agreement something non-existent; whatever amount was accepted by the Bank towards full and final settlement (Rs.2,62,000/-) is the consideration per the agreement and nothing more.ratio¶63
The First Appellate Court committed manifest error in misreading the terms and conditions of the agreement, which renders the impugned judgment vulnerable and unsustainable.ratio¶66

Detailed headnote1 paragraphs

Second appeal (RSA No.337 of 2010, High Court of Orissa at Cuttack, Sashikanta Mishra, J., 17.1.2025) by the plaintiff against a partly reversing first appellate decree. The agreement dtd.11.11.2003 (Ext.1) obliged the purchaser-plaintiff to settle and clear the dues of Vijaya Bank, whereupon the vendor-defendant would apply to the Orissa State Housing Board and execute and register the transfer documents. Admitted on the substantial question whether the lower appellate court misinterpreted Ext.1. Held: the consideration is the amount ultimately accepted by the Bank in full and final settlement — the one-time settlement of Rs.2,62,000/- paid by the plaintiff — and not the pre-settlement outstanding of Rs.9,13,522/-; the first appellate court's contrary finding read into the agreement a term which is non-existent and constituted manifest error, rendering the impugned judgment unsustainable. The impugned judgment and decree dated 13.5.2010/21.6.2010 in R.F.A. No.10/2009 were set aside, and the trial court's judgment and decree dated 16.3.2009/23.3.2009 in C.S. No.22/2006 (declaring the contract valid, the deed of revocation dtd.31.12.2007 illegal and void, and directing execution of the tripartite sale deed) were confirmed.

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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RSA No.337 of 2010

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(From the judgment and decree dated 13.5.2010 and 21.6.2010 passed by learned Addl. District Judge, Rourkela in R.F.A. No.10/2009 partly reversing the judgment dtd.16.3.2009 and decree dated 23.3.2009 in C.S. No.22/2006)

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Chitaranjan Sharma … Appellant - versus- Puskar Sharma (since dead) Bhaskar Sharma and another … Respondents

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Advocates appeared in the case through hybrid mode:

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For Appellant : Mr.S.K.Samantaray, Advocate - versus-

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For Respondents : Mr. A.K.Biswal, Advocate. --------------------------------------------------------------------------- CORAM: JUSTICE SASHIKANTA MISHRA JUDGMENT

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17.1.2025.

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Sashikanta Mishra,J . This is an appeal by the Plaintiff

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against a partly reversing judgment. The judgment dated

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R.S.A. No.337 of 2010 Page 1 of 13

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13.5.2010 followed by decree dated 21.6.2010 passed by learned Addl. District Judge, Rourkela in R.F.A. No.10/2009 is under challenge whereby the judgment dated 16.3.2009 followed by decree dated 23.3.2009 passed by learned Civil Judge (Sr. Division), Rourkela in C.S. No.22/2006 was partly reversed.

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2. For convenience, the parties are referred to as per their respective status in the trial Court.

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3. The Plaintiff filed the suit for declaration that the contract dtd.11.11.2003 executed between him and the defendants in respect of the suit house is valid and the unilateral rescission of the contract by Defendant No.1 is illegal with further prayer to direct the Defendant No.1 to execute tripartite sale deed in respect of the suit house and permanent injunction.

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4. The Plaintiff’s case is that he and Defendant No.1 are brothers having their business at Rourkela. Defendant No.2 is a body corporate established under the Odisha Housing Board Act. One of the houses constructed by it was allotted in favour of Defendant No.1, who was indebted

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R.S.A. No. 337 of 2010 Page 2 of 13

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to Vijaya Bank to the extent of Rs.9,13,522/- with unapplied interest upto 30.6.2003 by mortgaging the suit house. Defendant No.1 requested the plaintiff for

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liquidation of the loan amount on the condition that he would transfer the suit house in favour of the plaintiff. The plaintiff agreed and accordingly an agreement was executed between them orally on 10.11.2003, which was reduced to writing on 11.11.2003.The plaintiff thereafter negotiated with the authorities of Vijaya Bank for liquidation of the outstanding loan amount. Ultimately, the Bank agreed for a one time settlement for Rs.2,62,000/-. Said amount was paid and accordingly, a certificate was issued by the Bank and the original documents were handed over to the Plaintiff. Defendant No.1 thereafter applied for transfer of the suit house to the Defendant No.2 in favour of the Plaintiff. The Defendant No.2 directed the Plaintiff to attend its office on 29.10.2005 for execution of the tripartite sale deed but he could not attend because of his illness. He deposited Rs.15,000/- towards processing fee for transfer of ownership and also purchased the stamp

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papers for registration. The defendant No.1 however

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R.S.A. No. 337 of 2010 Page 3 of 13

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avoided to execute the sale deed and took steps for cancellation of the document for transfer of the suit house. Hence,the suit.

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5. Defendant No.2 did not contest the suit and was set ex parte.

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6. Defendant No.1 contested the suit and filed written statement admitting the basic facts. It was however, denied that there was any agreement between them. It was the specific case of the Defendant No.1 that the Plaintiff was inducted as a tenant in respect of the suit house from the month of January, 1990 on a monthly rent of Rs.15,000/and subsequently there was discussion for transfer of the suit house in favour of the plaintiff for consideration to be fixed at the time of execution and registration of the sale deed. The plaintiff deposited Rs.2,62,000/- in Vijaya Bank on his behalf as he was required to pay the arrear house rent to the Defendant No.1 as his power of attorney holder.

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The Plaintiff has to pay Rs.90,000/- towards current house rent. In spite of the same, the Plaintiff made attempts to get the suit house transferred in his favour without consideration money, which was finalized at

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R.S.A. No. 337 of 2010 Page 4 of 13

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Rs.14,00,000/-. As such, the power of attorney was revoked. The agreement relied upon by the plaintiff is no contract in the eye of law for want of mention of any consideration money.

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7. Basing on the pleadings, the trial court framed the following issues for determination;

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(1) Is the suit maintainable?

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(2) Has the Plaintiff any cause of action to file the suit ?

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(3) Is the contract dated 11.11.2003 is a valid contract between the Plaintiff and defendant No.1?

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(4) Has defendant No, I rescinded the terms of the aforesaid contract?

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(5) Is the Plaintiff entitled to the relief of permanent injunction against the defendants?

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(6) To what other relief, the Plaintiff is entitled ?

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8. Issue Nos.3 and 4 were taken up for consideration at

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the outset. After considering the oral and documentary evidence, the trial Court held that there is no material on record that the plaintiff was inducted in the suit house as a tenant under Defendant No.1 nor he had any arrear house rent to pay. Referring to the agreement dtd.11.11.2003, the trial Court held that the plaintiff had agreed to clear up the

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R.S.A. No. 337 of 2010 Page 5 of 13

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dues of the Bank on behalf of the Defendant No.1 where upon the latter was to execute necessary documents for transfer of the suit house in his favour. The trial Court further found that the plaintiff had cleared the outstanding loan amount of Defendant No.1 as per the agreement by holding that liquidation of the loan amount is the consideration for transfer of the suit house. It was also held that the agreement was not required to be registered and that it is a valid agreement. As such, the unilateral revocation of the contract by Defendant No.1 is illegal as the same had been acted upon and the Defendant No.1 had not taken any steps for transfer of the suit house in favour of the plaintiff. In view of the findings rendered on the main issue, the remaining issues were answered accordingly in favour of the plaintiff and the suit was decreed by declaring the contract dtd.11.11.2003 to be valid and the deed of revocation dtd.31.12.2007 executed by Defendant No.1 as illegal and void. The defendant No.1 was further directed to appear before Defendant No.2 for execution of tripartite sale deed in respect of the suit house on the date to be fixed by Defendant No.2 on production of

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R.S.A. No. 337 of 2010 Page 6 of 13

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copy of judgment by the plaintiff and was also permanently restrained from transferring the suit house in favour of any person other than the plaintiff and for disturbing his possession in any manner.

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9. The Defendant No.1 carried the matter in appeal. The First Appellate Court, after taking note of the evidence on record observed that at the relevant time the outstanding balance amount was Rs.9,13,522/- and that one time settlement was effected with the Bank by virtue of which the amount was reduced to Rs.2,62,000/- which was paid

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by the plaintiff. With regard to the agreement dtd.11.11.2003, the First Appellate Court held that the intention of the parties at the time of execution of the said agreement was to pay the balance amount which was outstanding by then and there was no mention about the fact that there would be a onetime settlement and if there would have been any reduced amount that would be the guiding factor. As such, it was held that the intention of the parties at the time of execution of the agreement or the contract was that the plaintiff would pay the outstanding amount of Rs.9,13,522/- and not the reduced amount.

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R.S.A. No. 337 of 2010 Page 7 of 13

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Basically on the above findings the appeal was allowed in part by directing the Defendant No.1 to execute the tripartite sale deed after receiving the balance amount of the consideration amount of Rs.9,13,522/-.

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10. Being aggrieved, the plaintiff has filed this second appeal, which was admitted on the following substantial question of law;

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“ Whether in passing the judgment the lower appellate court has misinterpreted the terms and conditions under Ext.1?

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11. Heard Mr.S.K.Samantaray, learned counsel for the plaintiff-appellant and Mr. A.K.Biswal, learned counsel for the Defendant No.1-Respondent.

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12. Mr.Samantaray would argue that Clauses 1 and 2 of the agreement dated 11.11.2003 are clear and unambiguous that the Plaintiff had agreed to settle and clear the dues of the Bank and to obtain no due certificate after repayment of the loan finally. Thereafter, the vendor (Defendant No.1) would apply for permission from Defendant No.2 to transfer his leasehold interest in favour

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of the plaintiff in consideration of the dues of the Bank

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R.S.A. No. 337 of 2010 Page 8 of 13

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which the purchaser agrees to settle and clear. Therefore, according to Mr.Samantarary, the consideration amount can only be that amount which was agreed by the Bank towards settlement and clearing up the loan amount, which is Rs.2,62,000/-. Mr.Samantaray further argues that the Defendant No.1 had himself given an offer to the Bank vide Ext.2 on 25.9.2003 offering Rs.2,62,000/towards one time settlement, which was ultimately accepted. So by time the agreement was executed, i.e. on 11.11.2003, both parties had knowledge about the proposed settlement amount being Rs.2,62,000/-. Since the agreement was confined to settlement of the dues of the Bank, the First Appellate Court committed grave error in insisting upon an amount which was not the amount due to the Bank after the one time settlement.

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13. Mr.A.K.Biswal, on the other hand, would argue that no amount being mentioned as consideration in the agreement dtd.11.11.2003, the same becomes void for uncertainty as per Section 29 of the Contract Act. He further submits that as on 21.6.2003, the amount due was Rs.9,13,522/- which the plaintiff agreed to settle. So

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R.S.A. No. 337 of 2010 Page 9 of 13

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irrespective of whatever was accepted by the Bank towards settlement of the loan amount, the Plaintiff remains bound by the agreement to pay the amount he had agreed upon

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i.e. Rs.9,13,522/-.

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14. In view of the substantial question of law framed and having regard to the rival contentions noted above, it would be apposite to refer to the agreement dtd.11.11.2003 marked Ext.1. Clause (1) and (2) are relevant and are quoted herein below;

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“ 1. That, the purchaser will settle and clear the dues of Vijaya Bank, Rourkela on behalf of and in the name of the Vendor and obtain a no due certificate from the Bank in favour of the Vendor after repayment of the loan finally.

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2. That, as soon as the purchaser obtains a no due certificate from the Bank as aforementioned, the vendor will apply for permission to the Orissa State Housing Board to transfer his lease hold interest of the aforementioned house in favour of the purchaser in consideration of the dues of the Bank which the purchaser agrees to settle and clear, and execute and register necessary documents in favour of the purchaser.”

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15. A plain reading of the agreement would show that it

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was the intention of the parties that the plaintiff would settle and clear the dues of the Bank whereupon the Defendant No.1 would execute a sale deed in his favour.

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R.S.A. No. 337 of 2010 Page 10 of 13

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The question is, what was the consideration amount as on the date of the agreement. Reference to Ext.2, which is a letter written by the Defendant No.1 to the Bank on 25.6.2003 would reveal that he had expressed his inability to pay the then outstanding amount of Rs.9,13,522/- and offered Rs.2,62,000/- in lieu thereof. The Bank accepted the offer much later. In the mean time, the agreement in question was executed between the parties. The First Appellate Court has held that by then there being no one time settlement, the consideration amount has to be treated as the original amount i.e. Rs.9,13,522/-. After going through all the documents and evidence on record, this Court is unable to concur with such finding for the reason that the language employed in the agreement is clear and an unambiguous that the dues of the Bank would be settled and cleared by the plaintiff. In other words, the amount which the Bank holds to be due to it and ultimately liquidates the loan upon receipt thereof has to be treated as the dues outstanding. It is admitted that the Bank accepted as a one-time settlement Rs.2,62,000/towards full and final settlement of the loan. In fact, said

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R.S.A. No. 337 of 2010 Page 11 of 13

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amount being deposited by the plaintiff, the Bank issued a certificate in favour of the Defendant No.1 to the effect that all liabilities had been cleared under compromise settlement agreement dtd.18.10.2003 and that the Bank dues had been paid by the plaintiff as per agreement between him and Defendant No.1. On such clear facts, the agreement would not admit of any other interpretation. To reiterate, this Court holds that the finding of the First Appellate Court that the intention of the parties was for the plaintiff to pay Rs.9,13,522/amounts to reading something into the terms and conditions of the agreement which is non-existent. It is stated at the cost of repetition that the agreement was to settle and clear up the dues of the Bank. Therefore, whatever amount was accepted by Bank towards full and final settlement would obviously mean the consideration as per the agreement and nothing more.

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16. The trial court appears to have correctly appreciated the oral and documentary evidence on record to hold that the plaintiff having paid Rs.2,62,000/- had performed his part of the contract whereas, Defendant No.1 by

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R.S.A. No. 337 of 2010 Page 12 of 13

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unilaterally revoking the agreement had acted beyond it.

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The First Appellate Court, as already stated, committed manifest error in misreading the terms and conditions of the agreement which therefore renders the impugned

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judgment vulnerable and unsustainable.

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17. For the foregoing reasons therefore, this Court holds that the impugned judgment passed by the First Appellate Court warrants interference. The substantial question of law is answered accordingly.

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18. In the result, the appeal succeeds and is therefore, allowed. The impugned judgment and decree passed by the First Appellate Court is hereby set aside. The judgment and decree passed by the Trial Court is hereby confirmed.

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…………….……..……….

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Sashikanta Mishra, Judge

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Ashok Kumar Behera

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Signature Not Verified

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Digitally Signed Signed by: ASHOK KUMAR BEHERA Designation: A.D.R.-cum-Addl. Principal Secretary Reason: Authentication Location: High Court of Orissa Cuttack Date: 17-Jan-2025 12:40:08

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R.S.A. No. 337 of 2010 Page 13 of 13

Chita Ranjan Sharma v. Puskar Sharma

Case brief

What is this about?

What did the court decide?

Chita Ranjan Sharma v. Puskar Sharma

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

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