Author: Parnika Choudhary, 3rd year, Bharati Vidyapeeth University.
Citation: (1973) 1 SCC 294
Date of Decision: December 12, 1972
Bench: J. M. Shelat & Y. V. Chandrachud
Original Copy: N/A
Statutes involved: Indian Contract Act,1872
Issues in question:
- Why were the plaintiffs’ claims deemed to be without merit?
- How has the concept of “intent of contract” aided in the decision-making process?
Background of the case:
- In the present case, the co-owners subdivided a wide area in Plot No. 765 of Mauza Bhaunjar, Tehsil Ghaziabad, into individual plots as part of a housing development named “Chandrapuri Colony.” Although plot No. 19 was set aside for communal use as a Dharmshala, it was sold to one Manohari Devi, who then sold it to the defendant.
- Thereafter, a boundary wall was built around the plot, making it impossible to use it for a Dharamshala.
- The plaintiff sought a permanent injunction prohibiting the defendant from interfering with the construction of a Dharmshala and possession of the plot after the boundary wall was demolished.
- However, the defendant denied that plot No. 19 was set aside for a Dharmshala and claimed that Manohari Devi, who had acquired total ownership of the plot as a result of the sale in her favour, was entitled to sell it to him.
- The contentions given by both the parties are as follows:
They claimed that they were misled into believing that plot no. 19 would be set aside for use in common as a Dharamshala and that it was later sold to the defendant.
The plaintiff was willing to sue for a permanent injunction prohibiting the defendant from interfering with the construction of the Dharmashala and for possession of the site when the boundary wall was demolished.
Defendant claimed that under the terms of the sale in her favour, Manohari Devi had become the sole owner of the plot and was allowed to sell it.
- Acceptance of the claims given by the plaintiffs is fraught with challenges like:
- There is no proof as to who made the specific representation on behalf of the co-owners. While the housing programme was being publicised, it was allegedly stated over a loudspeaker that a site would be set aside for a Dharmshala.
- Plaintiffs have been unable to throw any light on who made the announcement and under whose authority it was made.
- Furthermore, while modem devices such as microphones are excellent for spreading ideas or disseminating information, they have yet to gain recognition as carriers of binding representations.
Thus, the arguments and contentions made by the plaintiffs had no foundation.
- The trial court and the First Appellate Court’s Judgment: The trial court and the first appeal court both ruled that plot No. 19 had been set aside for the construction of a Dharmshala and that the co-owners had lost the title of the plot and thus had no right to sell it.
- High Court’s Judgment: Plaintiffs then filed another appeal before the High Court. However, the appeal got dismissed and the High Court stated that ownership of plot no.19 of all the partners was not divested and thus, the plaintiff had no cause of action to file the suit.
- Supreme Court’s Judgment: The plaintiffs subsequently went to the Supreme Court, where it was determined that the previous two courts’ arguments focused on a claim of interference. The plaintiffs’ learned counsel also took the case to the Supreme Court, contending that the co-owners were prevented from challenging the plaintiffs’ right to request that plot No. 19 be set aside for a Dharmshala.
The Supreme Court also stated that true facts were known to individuals who purchased the sub-plots after plot No. 19 was sold to Manohari Devi in 1946, according to the evidence.
- This case law revolves around the concept of ‘intent to contract’. Also, in the Indian context, the Supreme Court has previously stated that the Indian Contract Act requires a separate element of “intent to contract” to make things easy for all parties involved.
- The court ruled that a simple notification made under the housing project reserving the property for a Dharamshala did not bind the buyer to build a Dharamshala. The court further stated that because the defendant gave Manohari Devi a consideration, it was a legal sale and demonstrated that they had an intent to contract.
- The concept of Consideration was also seen in this case. The court also stated that because the defendant gave Manohari Devi a consideration, it was a legal sale and demonstrated that they had an intent to contract. This demonstrates that, in the Indian context, consideration has played a significant part in deciding the intent to form legal ties.
- As a result, all of the courts stated above were correct in ruling that the co-ownership of the described plot had not been divested in any way, and the plaintiffs had a cause of action to bring the matter. The Supreme Court further stated that the claims made were without merit.