Case: Kollipara Sriramulu Vs. T. Aswathanarayana &amp; Ors

further contact between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored.,In other words, there may be a case where the signing of a further formal agreement is made a condition or term of the bargain, and if the formal agreement is not approved and signed there is no concluded contract.In Rossiter v. Miller. (1878) 3 AC 1124 Lord Cairns said :"If you find not an unqualified acceptance subject to the condition that an agreement is to be prepared and agreed upon between the parties. and until that condition is fulfilled no contract is to arise then you cannot find a concluded contract."In Currimbhoy, and Co. Ltd. v . Creet, 60 Ind App 297 = (AIR 1933 PC 29 ) the Judicial Committee expressed the view that the principle of the English law which is summarised in the judgment of Parker, J. in (1912) 1 Ch 284 was applicable in India.The question in the present appeals is whether the execution of a formal agreement was intended to be a condition of the bargain dated July 6, 1952 or whether it was a mere expression of the desire of the parties for a formal agreement which can be ignored. The evidence adduced on behalf of respondent No. 1 does not show that the drawing up of a written agreement was a pre-requisite to the coming into effect of the oral agreement. It is therefore not possib1e to accept the contention of the appellant that the oral agreement was ineffective in law because there is no execution of any formal written document. As regards the other point, it is true that there is no specific agreement with regard to the mode of payment but this does not necessarily make the agreement ineffective The mere omission to settle the mode of payment does not affect the completeness of the contract because the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed. We accordingly hold that Mr. Gokhale is unable to make good his argument on this aspect of the case.4. We shall next deal with the question whether the appellant was a bona fide purchaser for value without notice of the prior oral agreement. The first sale deed obtained by the appellant was on July 26, 1952. P. W. 2 stated in his evidence that the appellant told him that he had been aware of the agreement in favour of respondent No. 1 at the time of the purchases under Exs. B-6 to B-10. It is true that P. W. 2 added that the appellant did not say distinctly that he was aware of the agreement between the respondent and defendants 1 to 9. Upon this point the appellant himself was unable to remember whether he had told P. W 2 to that effect. In any case, P. Ws. 5 and 6 deposed that they went to the appellant on July 7 1952 and asked him to part with his shares in favour of respondent No. 1. It is not denied by the appellant that he met P. Ws. 5 and 6 on July 7, 1952. It is also significant that the purchase money paid by the appellant was very nearly the same as that payable under the agreement in respondent No. 1s favour. On the basis of this evidence the High Court reached the conclusion that the appellant had notice of the prior oral agreement; We see no reason to differ from the finding of the High Court on this point.5. It was finally contended that the High Court ought not to have given any direction that as far as possible the site upon which the cinema building stands should be allotted to the share of respondent No. 1 if it is comprised within the 137 shares to which he was entitled. It was stated on behalf of the appellant that there was no equity in favour of respondent No 1 as he was a lessee for 10 years and all the constructions were made with the full knowledge that he was a lessee for a limited period.In any case. it was said that the appellant should have been given permission under Section 3 of the Partition Act (Partition Act No IV of 1893) when respondent No. 1 himself invoked the provisions of S. 2 of that Act. It was also argued that the High Court had no jurisdiction to modify any portion of the judgment dated March 25, 1960 by a subsequent order dated June 21. 1960 without an application for review. In our opinion, the contention put forward on behalf of the appellant is well founded and since no application was made on behalf of the first respondent under Section 2 of the Partition Act we are of opinion that the following direction of the High Court in the preliminary decree should be deleted:"(7). That the lower Court shall as far as possible allot to the appellant the site upon which the appellants buildings stand and further direct that if that procedure cannot be adopted conveniently or equitably the procedure laid down in the judgment reported in (1957) 2 Andh WR 488 = (AIR 1958 Andh Pra 647) be followed."It will, of course, be open to the parties to make representations and for the High Court to give equitable directions in the allotment of shares to be made in the final partition decree.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It was the case of respondent No. 1 that on July 6, 1952 there was a meeting of all the male partners at the house of Desu Virabhadrayya and at that meeting there was an agreement reached between all of them (except the appellant) and him-self that they should sell to him their shares (and the shares of those whom they represented) at the rate of Rs. 3375 for eight shares. A written agreement was to be drawn in 2 or 3 days and the mode of payment of the purchase money was also to be settled later. It was further agreed that the sale deeds were to be executed in three months. In pursuance of the agreement all the co-sharers except defendants I to 9 executed sale deeds and the plaintiff therefore became the owner of 98 shares. The first witness in proof of the oral agreement was respondent No. 1 himself. He deposed that P. Ws. 5, 6 and 8, Sri Devata Rama Mohana Rao, Sri Addepalli Nageswara Rao and Sri Thoomu Srimannarayana respectively were present at the meeting of the shareholders. He also said that the first defendant, the son of the 2nd defendant, was there to represent the latter, and that Gopala Krishnaiah, son of the 3rd defendant, and the 7th defendant (who represents the 5th and 6th defendants) and Alavala Subbayya (husband of the 8th defendant and father of the 9th defendant) were present when the agreement was settled. He added that the sale deed was to be executed in three months and that draft agreement, Ex. A-6 was also prepared 2 or 3 daysour opinion, the discrepancy is immaterial and the High Court was right in accepting the evidence of this witness as true. The evidence of respondent No. 1 is corroborated by P. W. 7 who said that except the women shareholders all other shareholders were present at the meeting of July 6, 1952 and the subject for consideration was the sale of the site of the cinema theatre to respondent No. 1. He added that the price of the whole site was fixed at Rs. 67,500 and that all the partners except the appellant agreed to sell away theiris true that P. W. 8 is the cousin brother of respondent No. l, but this can be no ground in itself for rejecting his testimony P. Ws. 2 and 3 have also given important corroborative evidence P. W. 2. Sri D. Subha Rao is the Subordinate judge of Bapatla. He deposed that the first respondent told him that there was an oral agreement for the purchase of the shares concluded in the first week of July, 1952. Exhibit A-22 dated July 9, 1952, a letter written by P. W. 2 to respondent No. 1 supports the evidence of P. W. 2. P. W. 2, Sri S. Narayana Rao, a District Judge and a family friend of respondent No. l also testified that he was informed of the negotiations by the respondent for purchasing the shares and he was also told by the first respondent about the conclusion of thefact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put in a more formal shape does not prevent the existence of a binding contract. There are, however, cases where the reference to a future contract is made in such terms as to show that the parties did not intend to be bound until a formal contract isis true that P. W. 2 added that the appellant did not say distinctly that he was aware of the agreement between the respondent and defendants 1 to 9. Upon this point the appellant himself was unable to remember whether he had told P. W 2 to that effect. In any case, P. Ws. 5 and 6 deposed that they went to the appellant on July 7 1952 and asked him to part with his shares in favour of respondent No. 1. It is not denied by the appellant that he met P. Ws. 5 and 6 on July 7, 1952. It is also significant that the purchase money paid by the appellant was very nearly the same as that payable under the agreement in respondent No. 1s favour. On the basis of this evidence the High Court reached the conclusion that the appellant had notice of the prior oral agreement; We see no reason to differ from the finding of the High Court on this point.5. It was finally contended that the High Court ought not to have given any direction that as far as possible the site upon which the cinema building stands should be allotted to the share of respondent No. 1 if it is comprised within the 137 shares to which he was entitled. It was stated on behalf of the appellant that there was no equity in favour of respondent No 1 as he was a lessee for 10 years and all the constructions were made with the full knowledge that he was a lessee for a limited period.In any case. it was said that the appellant should have been given permission under Section 3 of the Partition Act (Partition Act No IV of 1893) when respondent No. 1 himself invoked the provisions of S. 2 of that Act. It was also argued that the High Court had no jurisdiction to modify any portion of the judgment dated March 25, 1960 by a subsequent order dated June 21. 1960 without an application for review. In our opinion, the contention put forward on behalf of the appellant is well founded and since no application was made on behalf of the first respondent under Section 2 of the Partition Act