HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No.: 71 of 2002 Reserved on: 13.5.2010 Decided on: 2.6.2010 Satish Kumar …..Appellant. Versus Kiran Dhindsa ……Respondent. Coram: The Hon’ble Mr.Justice V.K. Ahuja, Judge. Whether approved for reporting? Yes. For the appellant: Mr.Bhupender Gupta, Senior Advocate, with Mr.Ajit Jaswal, Advocate. For the respondent: Mr.G.D. Verma, Senior Advocate, with Mr.B.C. Verma, Advocate. V.K. Ahuja, J.: This is a regular first appeal filed by the appellant under Section 96 of the CPC against the judgment and decree of the court of the learned District Judge, Solan, dated 11.1.2002, vide which the suit filed for recovery of Rs.4.00 lacs by the respondent as against the appellant was decreed for recovery of earnest money of Rs.2.00 lacs, with interest. 2. Briefly stated the facts of the case are that the respondent (hereinafter also referred to as the plaintiff) filed a suit for the recovery of Rs.4.00 lacs as against the appellant (hereinafter also referred to as the defendant). It was alleged by the plaintiff that the defendant is owner in possession of the land, as detailed ________________ Whether reporters of local papers may be allowed to see the judgment? Yes. - 2 - in the plaint, measuring 10 bighas and 14 biswas and is a co-owner also in the land measuring 10 biswas to the extent of 1/4 share with his brother, sisters and mother. The plaintiff and her husband are qualified doctors who intended to purchase a piece of land for the purpose of construction of a Natural Healing and Meditation Centre. The plaintiff also alleged that she practices in Traditional Chinese Medicine, Acupuncture, Homeopathic and Herbal Treatments. The defendant approached the plaintiff for the sale of the land in suit to her. The plaintiff visited the site and keeping in view the vegetation and the trees standing thereon, the plaintiff agreed to purchase the same. The defendant agreed to sell the land alongwith the standing trees in the said land and its easementary rights for a total consideration of Rs.33,60,000/- vide agreement dated 9.9.1999. The plaintiff paid a sum of Rs.2.00 lacs to the defendant through a cheque in part performance of the contract and as earnest money. The balance amount was payable to the defendant at the time of registration of the sale deed in favour of the plaintiff or her nominee. The plaintiff had told the defendant at the time of the purchase that she needs the land for the purpose of running a Natural Healing and Meditation Centre, which fact was told in the presence of the witnesses. The defendant was to sell the land alongwith all easementary rights and trees standing on the said land. The plaintiff visited the site, found it fit for the purpose for which she intended to purchase the same since Tuni trees were - 3 - standing thereon, which was the main consideration for the purchase of the land. The defendant was aware of the reason for the purchase of the land having Tuni trees. 3. It was further alleged that the sale deed was to be executed within a period of 7 months from the date of the agreement. The plaintiff was always ready and willing to purchase the said land. However, the defendant cut 9 trees of Tuni from the suit land without the written consent of the plaintiff. The plaintiff requested not to cut the said trees, which request was made prior to cutting of the trees, but the defendant did not listen to the request of the plaintiff and the plaintiff made a complaint against the defendant to the Forest Department. The Forest Department held enquiry in the matter and found that the defendant had cut 11 trees of small and big sizes and other kinds of trees, which were cut after the execution of the agreement in the month of January, 2000. Due to the cutting of the trees, the very object and purpose to purchase the land for the construction of a Natural Healing and Meditation Centre was defeated by the defendant, which caused mental tension, agony etc. to the plaintiff, who is also entitled to the damages in the form of monetary loss. According to the terms of the agreement, in case the defendant backed out of the contract, he was liable to pay double the earnest money to the plaintiff. It was also alleged that though the plaintiff suffered more damages, but she restricted her claim to Rs.4.00 lacs only and as such filed the suit for the return of the earnest money and - 4 - agreed damages of Rs.2.00 lacs as per the terms and conditions of the agreement and thus filed the suit for a recovery of Rs.4.00 lacs, after issuance of a notice upon the defendant. 4. The defendant took up preliminary objections in regard to the locus standi, cause of action and estoppel. On merits, he admitted having entered into an agreement with the plaintiff, but no talks were held in regard to the trees. It was also pleaded that the rights in the land were to be transferred upon the registration of the sale deed only. Defendant pleaded that he had cut six trees, three himself and three by his brother, for bonafide requirement as per the permission granted. Thus, it was pleaded that since he never refused to perform his part of the agreement, the plaintiff is not entitled to any amount. 5. Replication was filed. On the pleadings of the parties, the following issues were settled by the learned trial Court: 1. Whether plaintiff is entitled for the recovery of Rs.4,00,000/- as alleged? OPP 2. Whether defendant did not perform his part of contract as alleged, if so its effect? OPP 3. Whether plaintiff has no locus standi to file the present suit as alleged? OPD 4. Whether the suit is without any cause of action, as alleged? OPD 5. Whether the plaintiff is estopped to file the present suit due to her own act, conduct and deeds as alleged? OPD 6. Relief. - 5 - 6. Parties led their evidence and the learned trial Court, vide its impugned judgment, decided issue No.1 partly in favour of the plaintiff and she was held entitled to the return of Rs.2.00 lacs alongwith interest. Issues No.2 to 5 were also decided in favour of the plaintiff and as against the defendant. 7. I have heard the learned counsel for the parties and have gone through the record of the case. 8. The submissions made by the learned counsel for the appellant were that the trees had been bonafidely cut by the appellant. It was also submitted that the purpose of the purchase of the land was not mentioned in the agreement and since the defendant was always ready and willing to perform his part of the contract, the value of the trees could be reduced from the sale consideration and as such the plaintiff was not entitled to the return of the earnest money. It was also submitted that since the purpose was not mentioned in the agreement and the trees were to be transferred in favour of the plaintiff only on the execution of the sale deed and the purpose of the agreement was not frustrated due to the act of the defendant, the plaintiff was not entitled to the return of the earnest money. 9. On the other hand, the learned counsel for the respondent had supported the impugned judgment for the reasons recorded therein. 10. The defendant in his written statement has not denied the execution of the agreement, the payment of a - 6 - sum of a Rs.2.00 lacs as earnest money and the balance sale consideration as per the agreement which was payable. The defendant has also not disputed the question that the sale deed was to be executed within a period of 7 months from the date of the execution of the agreement. From the arguments advanced, two questions arise for consideration - i) whether the purpose was mentioned in the agreement or was told to the defendant at the time of the execution of the agreement; and ii) what is the effect of the act of the defendant in cutting the trees and whether it would amount to frustration of the terms of the agreement or purpose, by the act of the defendant. 11. To substantiate his arguments, the learned counsel for the appellant had placed reliance upon the decision in N.G. Vigneshawara Bhat versus P. Srikrishna Bhat, AIR 2006 Kerala 322. The observations made in para 11 are relevant and may be reproduced below: “Therefore, unless the appellant or respondent has a case that by reason of some event which had taken place after the execution of the agreement, the performance of the agreement has become impossible of performance. Section 56 of the Contract Act cannot be attracted. Neither appellant nor respondent has a case that any subsequent event made the contract impossible of performance. What was canvassed by the respondent was that appellant was not prepared to take the assignment of the right of the respondent over the plaint schedule properties for the reason that he did not have the absolute title and so the contract has become frustrated. What was agreed under Ext.A1 by the parties was to sell and purchase the right of the respondent over the plaint schedule properties in favor of the appellant. - 7 - True it provides that respondent has absolute title to all the properties. The fact that over a portion of the properties brothers of the respondent have fractional share will not make the agreement impossible of performance, as found by the learned single Judge... …………… ………………. ………………. …………….. The right of the respondent over the properties are transferable. Hence Ext.A1 contract has not become frustrated or unenforceable. Even if respondent has no absolute title over the entire plaint schedule properties as found by the learned single Judge, he has absolute title over 84 cents of item No.1 and item No.4 of the plaint schedule properties and also has fractional shares and title over the remaining properties. That is definitely transferable as agreed to in Ext.A1.” 12. Another decision relied upon by the learned counsel for the appellant was in Eacom’s Controls (India) Ltd. versus Bailey Controls C. and others, AIR 1998 Delhi 365. The observations made in para 24 are relevant and are reproduced as under: “The Court can relieve a contracting party from the obligations of a contract under S.56 of the Contract Act only by reason of a supervening event or untoward happening beyond the control of the parties which renders the contract impossible of performance after the same was made. The performance of a contract becomes impossible if it is rendered impracticable from the point of view of the object and purpose which the parties had in view at the time of entering into the contract or if an untoward event or change of circumstance upsets or destroys the very foundation upon which the parties rested their bargain. It is not sufficient for a contracting party invoking the doctrine of frustration to show that the supervening event has made the contract onerous or difficult - 8 - to perform. He must prove the impracticability and impossibility of the contract. A contracting party cannot be relieved from the performance of his part of the contract if the frustration of the contract is self- generated or the disability is self- induced.” 13. On the other hand, the learned counsel for the respondent had placed reliance on a decision in Divisional Forest Officer, Sarahan Forest Division of Shimla Forest Circle, Himachal Pradesh and another versus Daut and others, AIR 1968 Supreme Court 612, wherein the following observations were made in para 6: “There can be no doubt that trees are capable of being transferred apart from land, and if a person transfer trees or gives a right to a person to cut trees and remove them it cannot be said that he has transferred land. But we are concerned with different question and the question is whether under S.11 of the Act trees are included within the expression “right, title and interest of the land-owner in the land of the tenancy.” It seems to us that this expression “right, title and interest of the land owner in the land” is wide enough to include trees standing on the land. It is clear that under S.8 of the Transfer of Property Act, unless a different intention is expressed or implied, transfer of land would include threes standing on it. It seems to us that we should construe S.11 in the same manner.” 14. In the light of the above decisions, it has to be considered as to whether it can be said that the contract stood frustrated due to the act of the defendant. A perusal of the agreement in question Ext.PW-1/A proved in evidence shows that the purpose of purchase of the land was - 9 - not mentioned therein. However, the plaintiff, when she appeared in the witness box as PW-1, had clearly stated that she selected the land since it was having Tuni trees, which were good for setting up of a natural healing and meditation centre and these trees give due oxygen which was required for the purpose for which the land was being purchased. She had told these facts to the defendant in August, 1999 itself and she entered into an agreement on 9.9.1999. 15. Defendant Satish Kumar stepped into the witness box as DW-1 and stated that no talks were held in regard to the trees. However, he does not dispute that these trees were cut at his instance or at the instance of his brother. He also admits in his cross examination that he had not taken any permission from the plaintiff at the time of cutting of the trees. He also admits that he had cut six trees after the execution of the agreement. He denied his knowledge in case the plaintiff had purchased the land for setting up of a natural healing and meditation centre. He denied his knowledge that the land was purchased by the plaintiff since there were Tuni trees on the land. He, however, stated that the plaintiff was to become owner after the execution of the sale deed. 16. It is very much clear from the above discussion of the evidence that the purpose of purchase of the land may not have been mentioned in the agreement in question, but the oral evidence leads to the inference that - 10 - the purpose was told to the defendant. Clause 14 of the agreement Ext.PW-1/A reads as under: “That the above mentioned land agreed to be sold to the purchaser, would be transferred by the seller in favor of the purchaser or her nominees etc., alongwith all rights in water, water sources, trees, and all other easementary rights qua the said land.” 17. It is, therefore, clear that the land was to be transferred including the trees standing thereon and the moment an agreement was entered into in between the parties for transferring of the land including the trees standing thereon, the defendant had no right whatsoever to cut the trees without the permission of the plaintiff. The plaintiff, as per her evidence, had told the purpose of purchase of the land and that purpose stood frustrated due to the subsequent act of the defendant, who admits having cut the trees without the permission of the plaintiff after the execution of the agreement. The land is always transferred as it stands and no change can be effected by a party without the consent of the transferee. Once the defendant performed an act without the permission of the transferee over the land to which he had no right, the plaintiff was entitled not to complete the transaction accordingly. Therefore, the purpose of the purchase of the land, which stood substantiated from the evidence, was frustrated due to the act of the defendant of cutting the trees to which he had no right after he had entered into an agreement with the plaintiff and as such the said purpose was frustrated due to the act of the defendant. The - 11 - plaintiff is, therefore, entitled to the earnest money. No cross appeal has been filed by the plaintiff to claim a sum of Rs.2.00 lacs as damages suffered by her, which were not awarded by the learned trial Court. The learned trial Court was within its right to mould the relief and to grant appropriate relief and the relief was granted for the return of the earnest money to which the plaintiff was entitled. 18. During the course of arguments, it was also submitted that the land has already been sold during the pendency of the appeal by the appellant in the year 2005 and as such the findings of the learned trial Court for the return of the earnest money alongwith interest call for no interference by this Court. Therefore, there is no merit in the appeal filed by the appellant which is dismissed alongwith costs including lawyer’s fee. June 2, 2010. (V.K. Ahuja), (TILAK) Judge.