1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO.775 OF 1997 1. The Dawoodbhoy Fazalbhoy Muslim Educational Trust, a Public Charitable Trust, Registered under the Bombay Public Trusts Act, and having its office at 42, M.G.Merchant Road, Khadak, Bombay-400 009 at its Trustees 2. Shri Amanull Roshanlal Assur, abed adult, occupation Business, residing at 42, Ibrahim Md.Merchant Road, Khadak, Bombay-400 009. 3. Shri Arif A. Merchant, Adult, Indian Inhabitant, residing at “Baug-E-Bana”16, Nepeansea Road, Bombay-400 036. ....Appellants V/s. Shri Kanhaiyalal Motilal Talera, Age about 56 years, occupation Business, of 14, Motilal Talera Marg, Pune-411 001.....Respondent Mr.E.P. Bharucha, Senior Counsel with Mr.Simil Purohit and Mr.S.N. Vimadalal i/b M/s.Vimadalal & Co. for the Appellants. Mr.Vijay Patil for the Respondent. CORAM : B.H. MARLAPALLE & S.J. VAZIFDAR, JJ. DATE : 10TH JULY, 2009. JUDGMENT (PER S.J. VAZIFDAR, J.) :- 1. This is the Defendants appeal against the judgment of 2 the learned Civil Judge (Senior Division) Pune, decreeing the Respondent’s suit for specific performance of an agreement for sale of thirty seven acres of land for a sum of Rs. 7,00,000 (Rupees seven lakhs only). Appellant No.1, the owner of this property, is a public trust. Appellants Nos.2 and 3 are the trustees of the trust. 2. The Respondent filed the suit for specific performance by seeking an order directing the Appellants to execute a document to complete the agreement which we will refer to in detail later, in his favour and for certain consequential directions in that regard. In the alternative, the Respondent sought a decree for damages in the sum of Rs.30,00,000/- together with interest at 18% p.a. from the date of filing of the suit till payment and for a declaration that the payment of the said sum is charged on the suit property and for consequential reliefs to enforce the said charge. The Respondent’s case in the plaint :- 3. Appellant Nos.1, 2 and 3 are Defendant Nos.1, 2 and 3. The plaint referred to the original Defendant Nos.2 to 4 as the trustees of Appellant no.1. In the written statement, the Appellants had raised a dispute regarding who the trustees are. We will deal with the same later. Suffice it to note at this stage that the Respondent amended the title by deleting original Defendant Nos.3 and 4 and impleaded Appellant No.3 as Defendant No.3. We will however, for convenience and without prejudice to the Appellants’ contentions in this regard, refer to Appellant No. 3 1, trust, as the Appellants. 4. The documents referred to in the plaint are admitted. To a large extent the facts stated in the plaint are also admitted. However, in his evidence, the Respondent referred to certain further documents and alleged certain additional facts which substantially and materially added to and altered the case pleaded in the plaint. We will refer to the evidence later. At this stage, we will only refer to the Respondent’s case in the plaint. 5. The Appellants through their advocate caused to be published a public notice in the issues of 22.6.1987 and 23. 6.1987 of daily newspapers inviting offers for the purchase of the said property on as is where is basis. 6. The Respondent by a letter dated 22.7.1987 offered to purchase the property for a sum of Rs.6,50,000/- on as is where is basis and on the other terms and conditions stated therein including that the Appellants would have to obtain the sanction of the Charity Commissioner. He enclosed therewith a demand draft in the sum of Rs.25,000/- dated 22.7.1987 stating that the Appellants may encash the same only if they accepted the officer. 7(A). The Appellants by their letter dated 30.10.1987 addressed to the Charity Commissioner stated that only the Respondent had responded to the public notices inviting offers for purchase of the said land ; that the Respondent had been informed about the litigation in respect of the said land ; that they had been 4 advised by their legal advisor to accept the offer and that at a meeting of the trustees held on 23.10.1987, it was decided to accept the Respondent’s offer subject to the permission of the Charity Commissioner for the reasons stated therein with which we are presently not concerned. The Appellants thereby sought the Charity Commissioner’s sanction to the sale of the property to the Respondent. (B). The Appellants by their letter dated 2.11.1987 informed the Respondent that his offer dated 22.7.1987 had been accepted subject to the sanction of the Charity Commissioner and that they had made the necessary application to the Charity Commissioner for his sanction and enclosed a copy thereof. (C). Correspondence thereafter ensued between the parties and the Charity Commissioner. It is pertinent to note that the application and the correspondence proceeded on the basis that the entire property was encroached upon. The Charity Commissioner by a letter dated 11.3.1988 called upon the Appellants to comply with the requisitions contained therein including obtaining the instances of sale in the vicinity for the last more than three years and a valuation report prepared by an Architect. The Appellants, under cover of a letter dated 12.3.1988 forwarded a copy of the Charity Commissioner’s letter dated 11.3.1988 to the Respondent asking him to obtain information 5 regarding the two conditions mentioned above. The Appellants under cover of their letter dated 22.6.1988 furnished some of the particulars and the documents called for by the said letter dated 11.3.1988. By a further letter also dated 24.6.1988, the Appellants informed the Charity Commissioner that they were unable to obtain the valuation report prepared by an Architect, due to the encroachment on the property and the litigation in respect thereof. The Appellants therefore requested the Charity Commissioner to do away with the said two requirements stipulated in the letter dated 11.3.1988 we have mentioned earlier. Copies of the above correspondence were forwarded by the Appellants to the Respondent. The Respondent however arranged for the valuation report and forwarded the same to the Appellants who in turn forwarded the same to the Charity Commissioner under cover of a letter dated 17.12.1988. The report, prepared by one D.R. Limaye, a registered valuer, valued the property at Rs.6,68,808/-. The Appellants stated that the valuation report was higher than the Respondent’s offer as it was based on similar property but with clear title and vacant possession, whereas there was a pending litigation in respect of the Appellants’ property. A copy of the said letter dated 17.12.1988 was forwarded by the Appellants to the Respondent under cover of their letter dated 19.12.1988. By the letter dated 19.12.1988, the Appellants informed the Respondent 6 that the Charity Commissioner had also insisted on the other conditions namely instances of sale in the vicinity for the last three years and requested the Respondent to obtain the same. The Respondent stated that he obtained the instances of sale. He further stated that by a letter dated 3.11.1989, the Superintendent from the office of the Charity Commissioner requested him i.e. the Respondent to see the Charity Commissioner on 1.12.1989. 8(A). Ultimately, the Charity Commissioner by an order dated 15.12.1989, accorded sanction under Section 36(1)(a) of the Bombay Public Trusts Act, 1950 to the sale of the said property by the Appellants to the Respondent for the price of Rs.7,00,000/- on the conditions mentioned therein. Clauses 2 and 3 thereof are relevant and read as under :- “2. The sale shall be executed within a period of six months from the date of this order. 3. Application for “No Objection Certificate” under Urban Land (Ceiling and Regulations) Act, 1976 is made within a period of one month from the date of this sanction order if deemed necessary and a copy of the same is endorsed to the Charity Commissioner, Maharashtra State, Bombay for record.” (B). The Respondent by his letter dated 3.1.1990 informed the Appellants about the receipt of the said order dated 16.12.1989 and called upon the Appellants to comply with condition No.3 relating to the Urban Land (Ceiling and Regulations) Act (U.L.C. Act). The Respondent also called upon the Appellants to furnish all the 7 documents and papers to enable him to investigate the Appellants’ title to the said land. (C). The Appellants by a letter dated 22.1.1990 stated that they had been advised by their advocate that theirs being an educational trust and the property being agricultural land, there was no need for making any application for an N.O.C. under the U.L.C. Act. 9. Upto this stage there really is no dispute between the parties on facts. It is of vital importance to note that as far as the narration of facts is concerned, the plaint ends with the letter dated 22.1.1990. The suit was filed in February, 1995. Thereafter paragraph 7 of the plaint contains the following averments : “Thereafter the Plaintiff has been repeatedly reminding the defendants to complete the transaction. However the defendants have been avoiding to do so and now it appears that the defendants are wrongfully attempting to back out of the transaction with apparent ulterior motive and they are willfully not carrying out their obligations as evidenced by the facts and the circumstances of the case. The defendants are guilty of the breach of the contract willfully committed,and hence liable for the consequence thereof.” Written statement : 10. The Appellants/Defendants have averred that the suit is bad for mis joinder and non joinder. Original Defendant Nos.3 and 4 it was contended are not and were not the trustees of Defendant No.1 when the suit was instituted. It is further averred that all the trustees of Appellant No.1/Defendant No.1 had not been joined. 8 There are however, no particulars as to which trustee had not been joined. 11. It is also contended that the suit is barred by limitation. The sale was to be completed within a period of six months from the date of the order of the Charity Commissioner dated 15.6.1990. The suit however, was filed only in February, 1995. It is further contended that the property in any event cannot be sold as there is no subsisting permission under Section 36 of the B.P.T. Act sanctioning the sale of the said property. 12. The Appellants denied that the Respondent had been repeatedly requesting them to complete the transaction as alleged or otherwise. The Appellants denied that they had been avoiding completion of the sale or that they wrongly attempted to back out of the transaction. They denied that the Respondent had always been ready and willing to perform his part of the contract. They also denied that the Charity Commissioner had directed them to obtain a no objection certificate under the U.L.C. Act and to obtain a certificate under Section 230-A of the Income Tax Act. 13. The Appellants stated that the Respondent took time to arrange for necessary funds; that they often reminded the Respondent that the sale had to be completed within the time stipulated in the order of the Charity Commissioner but that he had expressed his inability to arrange the funds and ultimately contacted Defendant No.1 on 13.6.1990 when he stated that he 9 would complete the sale on the next day. The Respondent was directed to contact the advocate of Defendant No.1 and that when he did so a draft of the deed was prepared and approved by both the parties. The Respondent requested the Appellants’ advocate’s clerk to purchase the necessary stamp paper for Rs.56,000/- required in respect of the sale-deed. The sale-deed was typed and stamps of the value of Rs.56,000/- was affixed on it on 14.6.1990. The Appellants asked the Respondent to pay the balance consideration by demand draft or banker’s cheque. However, when both the parties were present in the office of the Appellants’ advocate for execution of the sale-deed, the Respondent informed them that he could not arrange the necessary funds and therefore, could not get either a demand draft or the banker’s cheque for the balance consideration. The Respondent however gave a cheque of Rs.6,75,000/- on 14.6.1990 drawn on Jammu & Kashmir Bank, Pune Camp Branch and also executed a writing that it would definitely be honoured on presentation. However on 15.6.1990, the Respondent informed the Appellants that it would take two months time before the cheque would be honoured. In the circumstances, the sale-deed was not executed even on 15.6.1990 which was the last day stipulated in the order of the Charity Commissioner for completing the sale. 14. It is of considerable importance to note that the Appellants in paragraph 10 of the written statement, relied inter-alia 10 upon two writings dated 14.6.1990 and 15.6.1990 in support of their above contentions which we will refer to in detail later. 15. In paragraph 11 of the plaint, it is stated that the Respondent had filed an application under Section 51 of the B.P.T. Act for obtaining sanction of the Charity Commissioner to file the suit and that sanction had been accorded on 27.6.1995. The Appellants in paragraph 14 of the written statement stated that the said order had been quashed and set-aside by an order of this Court dated 7.9.1995 in Writ Petition No.3369 of 1995. 16. The trial Court framed the following issues :- ISSUES : 1) Does plaintiff prove that he accepted the offer of the defendant to purchase suit property for consideration of Rs.6,50,000/- ? 2) Does he further prove that he paid Rs.25,000/- on 22.7.1987 by Demand Draft as earnest amount ? 3) Does he further prove that Charity Commissioner had given permission to sell the suit property for the consideration of Rs.7,00,000/- ? 4) Whether plaintiff was ready and willing to perform his part of contract, within a stipulated period, prescribed by the Charity Commissioner ? 5) Whether plaintiff is entitled for decree of specific performance of contract ? 11 6) Whether alternatively plaintiff is entitled for refund of earnest amount and damages Rs.30,00,000/- ? 7) Whether suit is bad for misjoinder of parties ? 8) Whether claim is within time ? 9) What relief and costs ? ADDITIONAL ISSUES : 10) Whether the suit is not maintainable in view of the provisions of section 36 of the Bombay Public Trust Act ? 11) Whether the court has no jurisdiction to enter and try the suit under the provisions of section 80 of the Bombay Public Trusts Act ? RE. : ISSUE NOS.1, 2 AND 3 : 17. The learned Judge has decided issue Nos.1 , 2 and 3 in the affirmative and we confirm the same. There in fact is no dispute that the Appellants had accepted the offer of the Respondent to purchase the property for Rs.6,50,000/- and that the Respondent had paid a sum of Rs.25,000/- on 22.7.1987 by a demand draft. Nor is there any dispute that by an order dated 15.12.1989, the Charity Commissioner had accorded sanction to sell the property for a consideration of Rs.7,00,000/-. The same however was subject to the terms and conditions stipulated therein. Mr.E.P. Bharucha, the learned Senior Counsel appearing on behalf of the Appellants did not dispute the same before us either. 12 RE. : ISSUE NO.7 : 18. In paragraph 1 of the written statement, the Appellants contended that Original Defendant Nos.3 and 4 one Munira Chinoi and one Prof. Dosa were not at any time trustees of Appellant No.1. Even assuming the same to be correct, that would not be a ground for dismissing the suit. 19. In paragraph 2 of the written statement, the Appellants submitted that the Respondent had not joined all the trustees of Appellant No.1 as parties to the suit. The Appellants however did not specify which trustee or trustees the Respondent had failed to join. In the examination in chief of Appellant No.2, Amanullah Assur stated that Appellant No.3 and he were the only trustees of Appellant No.1 in the year 1985. He stated that Appellant No.3 was a trustee since the year 1990. He denied the suggestion that the name of Appellant No.3 was not notified by the Charity Commissioner. He pleaded ignorance of when the original Defendant Nos.3 and 4 had resigned as trustees. Later in his cross- examination he stated that he did not try to find out why Appellant No.3 – Arif Merchant was not shown as a trustee in the office of the Charity Commissioner. 20. Thus the contention of nonjoinder must be rejected for two reasons. Firstly, in any event the other trustee Arif Merchant had been impleaded subsequently. Secondly, his name was not even notified with the Charity Commissioner. The Appellants had 13 not established that he was the trustee of Appellant No.1 at the material time. After the written statement was filed, the Respondent deleted the names of Defendant Nos.3 and 4 and impleaded Appellant No.3 as Defendant No.3. In the circumstances, the learned Judge rightly decided issue No.7 in the negative. RE. : ISSUE NO. 4 : 21. The Respondent/Plaintiff examined himself and one Prakash Rambhau Karanjkar. On behalf of the Appellants/Defendants Amanullah Assur, Appellant No.2, was examined. 22. Before dealing with the evidence, it is important to note yet again certain aspects of the Respondent’s case upto this stage. We have already referred to the pleadings and especially the plaint in detail. The Respondent referred to the facts upto the letter dated 22.1.1990 including the sanction accorded by the Charity Commissioner for the sale of the said property by his order dated 15.12.1989. Thereafter, the Respondent merely made the averments in paragraph 7 of the plaint which we have quoted earlier. 23. It is necessary to preface a reference to the evidence by noting that the case made out therein was never pleaded in the plaint. Indeed the material part thereof was not even referred to in the earlier proceedings in this suit and other proceedings which we 14 will refer to, prior to the examination in chief of the Respondent’s witness. 24. The Respondent examined himself. In his examination in chief, he referred to what is stated in the plaint. He also produced certain documents such as proof of dispatch and delivery of the documents referred to the plaint. It is not necessary therefore, to repeat the same. The Respondent also referred to various steps taken and things done by him inter-alia in answer to the queries and to comply with the requisitions made by the Charity Commissioner such as furnishing the instances of sale, valuation report etc. As these acts were prior to the sanction dated 15.12.1989 they are not material to decide this appeal and it is not necessary therefore to refer to them either. 25. Mr.Patil, the learned counsel appearing on behalf of the Respondent relied upon four letters which were referred to in the examination in chief of the Respondent but were not referred to in the plaint. No case or cause of action based on these letters was even pleaded in the plaint. 26. It is necessary however to preface a reference to these letters by first referring to the said letters dated 14.6.1990 and 15.6.1990 referred to in the written statement. They were not referred to in the plaint, but are admitted by the Respondent and in fact were produced by him and marked in evidence as Exhibits-96 and 97 respectively. They inter-alia negate the Respondent’s 15 readiness and willingness to perform the agreement as well as belie the genuineness of the documents now relied upon by the Respondent in the evidence. (A). By the letter dated 14.6.1990 (Exhibit-96) addressed to Appellants the Respondent referred to the cheque dated 14.6.1990 for the balance consideration of Rs.6,75,000/- drawn on Jammu & Kashmir Bank Ltd. The Respondent stated that the Appellants had agreed to execute the conveyance “on a clear promise and assurance from me (i.e. the Respondent) to you (i.e. the Appellants) that my said cheque will be encashed immediately whenever you present it to the bank and, in no circumstances, it would be dishonoured or returned for any reason”. The Respondent further assured the Appellants that he would not issue stop payment instructions and it would be his responsibility for the cheque being encashed when presented. (B). However the next day by the Respondent addressed a letter dated 15.6.1990 (Exhibit-97) to the Appellants. The Respondent referred to the cheque and stated that in respect thereof the Appellants had executed a conveyance deed dated 14.6.1990. That admittedly is incorrect as a draft conveyance deed had not been executed. It is important to note the following contents of the letter :- “ ............................................................................ At the time of executing the said deed, I assured you that the said cheque will be encashed on presentation. However, due to some sudden 16 developments, it may not be encashed for about two months, and, hence I request you not to present it for encashment till 15th August, 1990 and for the loss you will incur on account of it, I agree to pay you interest on the said amount @ 18 per cent per annum from 14.6.1990 and towards the said interest amount, I am giving you another cheque for Rs.20,250/- (Rupees Twenty thousand Two Hundred Fifty Only) drawn on The Jammu & Kashmir Bank Ltd., Pune Camp Branch, dated 15.6.1990, for the said two months period. I have promised you that unless both my said cheques for Rs.6,75,000/- and Rs.20,250/- are honoured by my bank and the said amounts are received by you, I shall not claim any rights, interest or title in the said lands in respect of which you have executed conveyance dated on 14.6.1990 and I agree that the said conveyance deed will be treated as automatically cancelled in the event of non-encashment of my said cheques given to you for any reason.” 27. Firstly, as we have already noted earlier, the conveyance was admittedly not executed. There was no question therefore of the same being treated as automatically cancelled in the event of the cheque not being encashed. Secondly, the averments establish beyond doubt that the Respondent was unable to perform his part of the contract in that he was unable to make payment within the time stipulated by the order of the Charity Commissioner and as agreed upon. Further the Respondent failed to refer to the letters in the plaint. What is important to note is that no case based on the contents of the letter has been pleaded. In other words, the Respondent has not contended that the agreement referred to in 17 the plaint stood modified as per the terms contained in the letter dated 15.6.1990 including by allegedly extending the time for making payment and paying interest for the same. There is no cause of action pleaded in the plaint on this basis. It is not open therefore for the Respondent to base any case on the allegations contained in the letter dated 15.6.1990 even assuming that the Appellants had agreed to the modification on the basis thereof. Admittedly there is no application to the Charity Commissioner for modification of the terms and conditions of the letter dated 15.6.1990. Nor is it the Respondent’s case that he called upon the Appellants to obtain any such modification from the Charity Commissioner. 28. In his examination in chief, the Respondent produced another letter dated 15.6.1990 (Exhibit 85) which was not referred to in the plaint. In the written statement, the Appellants had denied the letter dated 15.6.1990 (Exhibit-85). This was despite the fact that the letter dated 15.6.1990 was not referred to in the plaint. We have seen the record and proceedings. It appears that the letter also dated 15.6.1990 (Exhibit-85) was filed in the trial Court on 6.11.1995 as evidenced by an endorsement of the trial Court on the reserve thereof. 29. By this letter dated 15.6.1990 (Exhibit-85), the Respondent allegedly informed the Appellants that he had made necessary arrangements for making payment and requested them 18 to complete the sale by registering the sale-deed immediately. As stated earlier, the sale-deed was not even executed. This in fact was admitted by the