A case on Present consideration of contracts

1. Civil Revision Petition No. 89 of 2005
Decided On: 04.05.2006
Appellants: Sultana Safiana Tohsin and Ors.
Vs.
Respondent: Manoj Jajodia and Ors.
Hon'ble Judges:
H.N. Sarma, J.
Counsels:
For Appellant/Petitioner/Plaintiff: S. Ali, A. Bhattacharya, R. Rahman and P. Upadhaya,
Advs.
For Respondents/Defendant: R.L. Yadav, K. Yadav and S. Kejriwal, Advs.
Subject: Civil
Catch Words
Mentioned IN
Acts/Rules/Orders:
Code of Civil Procedure (CPC), 1908 - Sections 115 and 151 - Order 7, Rule (11) -
Order 14, Rule 2(2); Indian Contract Act - Sections 2 and 25;Code of Civil Procedure
(Amendment) Act, 1976
Cases Referred:
Regional Provident Fund Commissioner v. Shiv Kumar Joshi (2000) 1 SCC 98; Food
Corporation of India v. Surana Commercial Co. and Ors. (2003) 8 SCC 636; Ku. Sonia
Bhatia v. State of Uttar Pradesh Ors. AW 1981 SC 1247; Union of India v. Chaman Lal
Loona and Co. AIR 1957 SC 652
Disposition:
Appeal dismissed
Case Note:
Contract — Oral agreement — Section 25 of the Contract Act, 1872 —
Petitioners filed an application before trial court under Order 14, rule 2, Sub-
rule (2)(b), CPC, read with Order 7, Rule 11 (b), CPC and Section 25 of the
Contract Act read with Section 151, CPC praying to frame a preliminary issue
whether the instant suit is not maintainable in view of provision of Section 25
of the Contract Act — The trial court after hearing the parties rejected the
prayer of Petitioners to frame a preliminary issue — Hence, the present
revision petition — Held, The trial court is well within its jurisdiction in
coming to the finding that the question raised being mixed question of law
and facts cannot be decided in a preliminary issue — The trial court has also
not left untouched any of the relevant provisions of law in passing the order
— Hence, the present revision petition against an Order refusing to frame
preliminary issue is also barred under proviso to Section 115, CPC —
Accordingly, revision petition dismissed.
JUDGMENT
H.N. Sharma, J.
1. The revisional jurisdiction under Section 115, CPC, is sought to be invoked in this
petition challenging the impugned Order dated 6.6.2005 passed by the learned Civil
Judge (Senior Division) No. 2, Guwahati, in TS No. 175/99, by the defendant-
petitioners. By the aforesaid Order the prayer for framing of preliminary issue relating
to maintainability ° of the suit filed on 28.1.2005 by the defendant-petitioners has
been rejected by the learned trial court.
2. I have heard Mr. S. Ali, learned Counsel for the defendant-petitioners and Mr. R.L.
Yadav, learned Counsel for the plaintiff-respondents.
3. The brief panorama of facts leading to disposal of this revision petition may be
stated as follows.
4. The plaintiff-respondents filed the aforesaid Title Suit for specific performance of the
contract of sale of properties described in the Schedule of the plaint with the following

2. prayer.
(a) that a decree for specific performance of contract, directing the defendants to
execute and register the sale deed and otherwise complete the sale of land and
houses as described in the schedule below.
(b) that if the defendants fails or omit to execute or register the sale deed and confirm
the delivery of possession of suit property to the Plaintiffs within the time fixed by the
court, the court may be pleased to execute and register the sale deed in favour of the
plaintiffs and to confirm the delivery of possession of the suit property to the plaintiffs.
5. The plaintiff-respondents at paragraphs - 5, 6 and 7 of the plaint has pleaded as
follows :
5. That the defendants being in need of money proposed to sell the land and houses
standing thereon and the tenant late Murlidhar Jajodia was given the option to
purchase but he expressed his unwillingness to purchase the same. However, the
plaintiffs came forward to purchase the said property, i.e., the houses standing
thereon and Late Murlidhar Jajodia gave the undertaking that if the plaintiffs purchase
the property, he would surrender his leasehold right over the houses to the plaintiffs/
purchasers.
6. That thereafter there was an oral agreement between the plaintiff on the one side
and the defendants on the other side sometimes in the month of May 1996. The
defendants agreed to sell the land described in the schedule below together with the
houses standing thereon to the plaintiffs and the price of the same was fixed at Rs.
4,00,000 (Rs. 3,00,000 for land and Rs. 1,00,000 for the houses). As for transfer of
any immovable property within Guwahati, permission from the competent authority/
Deputy Commissioner, Kamrup and GMDA are necessary, it was agreed that the
defendants would file necessary application for obtaining such permission from the
said authorities. It was further agreed that the sale deed would be executed within 9
(nine) months from the date of obtaining permission from the GMDA. It was agreed by
both the parties that the price of the land, i.e., Rs. 3,00,000 would be paid equally to
the defendant Nos. 1 and 2 separately and the price of the houses, i.e., Rs. 1,00,000
separately to the defendant No. 3 Asiya Rasul. The defendants' assured that they
would apply for permissions as early as possible. It was further agreed between the
parties that the expenses for stamp and registration fee would be borne by
plaintiffs/purchasers.
7. That accordingly the defendants applied for sale permission before the Competent
Authority/Deputy Commissioner, Kamrup and obtained permission vide Permission No.
KRM. 1/94/1187 dated 11 plaintiff-respondents 11.6.1996 and thereafter the
defendants filed application on 18.7.1996 before the GMDA in the names of the
defendants as vendor and the plaintiff No. 1 Manoj Kumar Jajodia and others as
purchasers. Along with the application for permission before the GMDA certified copy
of the sketch map of the land proposed to be sold as approved by the Deputy
Commissioner, Kamrup was required to be filed. The Defendant Nos. 1 and 2
accordingly submitted the certified copy of the map of the land to the GMDA. The
GMDA granted permission vide Permission No. GMDA/DSP/3120/96/16 dated
19.8.1996 and while granting permission on 19.8.96 approved the map.
6. The summons of the suit having been served, the defendant-petitioners duly
appeared in the court and contested the suit by filing joint written statements. The
aforesaid averments made in paragraphs 5, 6 and 7 of the plaint have been denied by
the defendant-petitioners in their written statements. Although the defendant-
petitioners denied in their written statements each and every allegations made in the
plaint no specific case as such has been pleaded by them.
7. Upon consideration of the pleadings, the learned trial court has framed the issue to

3. the effect that whether there was any oral agreement between the parties to sell the
suit land at a total consideration of Rs. 4,00,000 and the plaintiffs in pursuance of the
alleged Oral Agreement had purchased bank draft in the name of the defendant Nos.
1,2 and 3. These are questions to be determined only after taking evidence. And such
questions apparently are not questions of pure questions of law but are mostly
questions of fact, including the additional issue, namely "whether the Suit is
maintainable in law as well as on fact" framed in the suit.
8. At that stage, defendant-petitioners filed an application before the learned trial
court under Order 14, rule 2, Sub-rule (2)(b), CPC, read with Order 7, Rule 11 (b),
CPC and Section 25 of the Contract Act read with Section 151, CPC. In the aforesaid
application a prayer has been made to frame a preliminary issue as follows :
Whether the instant suit is not maintainable in view of provision of Section 25 of the
Contract Act, as there is no passing of consideration in respect of the alleged oral
agreement, as admitted by the plaintiff. In the said application, it is asserted by the
defendant-petitioners that from g the reading of the paragraph 6 of the plaint it cannot
be said that there was no any consideration in execution of the agreement between the
parties and as such the alleged agreement/contract is void ab initio and the same is not
enforceable as contemplated under Section 25 of the Contract Act. It is further pleaded
that in view of the factual and legal position stated in the petition issues are barred
under Order 7, rule n ll(d), CPC, which appears from the statement of the plaint to be
barred under Section 25 of the Contract Act. An objection to the aforesaid petition was
also filed by the plaintiff-respondents on 17.12.2005. In the said objection, it is
specifically denied that there was no consideration while entering into the agreement
between the parties and that there was consideration which can be established by way of
evidence. The plaintiff-respondents while denying the contentions of the defendant-
petitioners have also prayed for dismissal of the said prayer of the plaintiff-respondents.
9. The learned trial court after hearing the parties disposed of the aforesaid application
on 6.6.2005 and rejecting the prayer of the defendant-petitioners to frame a
preliminary issue, as prayed for, which is the subject-matter of the present revision
petition.
10. Mr. S. Ali, learned Counsel for the petitioner, has submitted that the definition of
the consideration as provided in Section 2(b) of the Contract Act is very specific and
the plaint not having contained passing of any such consideration for entering into
alleged contract between the parties, the suit is barred under Section 25 of the Indian
Contract Act and accordingly, this being purely a question of law, can be decided by
framing a preliminary issue, that the learned trial court committed error in refusing
the prayer of the plaintiff-respondents. In support of his argument, Mr. Ali, has
referred to the decision of the Apex Court reported inMANU/SC/0774/1999 :
(2000)ILLJ552SC (Regional Provident Fund Commissioner v. Shiv Kumar Joshi
MANU/SC/0738/2003 : (2003)8SCC636 (Food Corporation of India v. Surana
Commercial Co. and Ors.) and AIR 1981 SC1247 (Ku. Sonia Bhatia v. State of Uttar
Pradesh Ors.). Relying on the aforesaid decisions, Mr. Ali has strenuously submitted
that the learned trial court completely misconstrued the meaning of the word
"consideration" in passing the impugned Order by not considering the true purport of
the word as defined in the Indian Contract Act.
11. Mr. R.L. Yadav, learned Counsel appearing on behalf of the plaintiff respondents,
on the other hand, has raised an objection relating to the maintainability of the
revision petition under the provisions of the proviso to Section 115, CPC. It is
submitted that proviso to Section 115, CPC, is squarely attracted against the
impugned Order and, as such, this revision petition is not maintainable. It is further
submitted by Mr. g Yadav that the issue raised by the learned Counsel for the
petitioner regarding passing of "consideration" cannot be decided without taking
evidence of the parties and it is not a pure question of law in terms of Order 14, rule
2(2) CPC. Further submission of Mr. Yadav is that paragraphs 5, 6 and 7 of the plaint
specifically disclose that there was "consideration" at the time of entering into the

4. agreement between the parties as contemplated in Section 2(e) of the Indian Contract
Act.
12. I have considered the rival submissions made by the learned Counsel for the
parties. Framing of a preliminary issue is the discretionary power vested upon the
learned trial court under Order 14, rule 2(2) CPC, in a suit where issues both of law
and of fact arise in the same suit, and the court is of opinion that the case or any part
thereof may be disposed of on an issue of law only, it may try that issue first if that
issue relates to a (a) the jurisdiction of the court, or (b) a bar to the suit created by
any law for the time being in force.
13. By the Civil Procedure Code (Amendment) Act, 1976, the earlier existing word
"shall" was replaced by the word "may" in whether to frame a preliminary issue or not
in the facts and circumstances of a particular case. There should not be any peace
meal trial in a single suit and accordingly, when any evidence is required to be
recorded or gone through in support or against such a prayer, in that event the refusal
of the learned trial court to frame such preliminary issue cannot be said to be unjust
or improper or illegal exercise of power. Section 2(d) and (e) of the Indian Contract
Act defining the word "consideration" and "agreement" are quoted herein below :
2(d) When, at the desire of the promisor, the promisee or any other person has done
or abstained from doing, or does or abstains from doing, or promises to do or to
abstain from doing, something, such act or abstinence or promise is called a
consideration for the promise ;
(e) Every promise and every set of promises, forming the consideration for each other,
is an agreement.
14. In the instant case, there is no written agreement. The alleged agreement is only
an oral one. Section 25 of the Indian Contract Act, inter alia, provides that an
agreement without consideration is void unless it falls within the exceptions as
provided therein. In Order to be a contract enforceable in law there must be a
consideration paid or promised. Contract may be of two classes where the
consideration is either executed or executory. It is executed where it consists of an act
for a promise. It is the act which forms the consideration. In an executed
consideration the liability is outstanding on one side only. In an executory
consideration the liability is outstanding on both sides. It is in fact a promise for a
promise. There is no bar for the parties to make a contract to carry out the promise by
one party at once, i.e., performing his part of the contract, whereas the other party
who provides the consideration for the out of the first may not carry out his part of the
bargain simultaneously with the first party. Where promise is made by one party to
the other party to the contract, in such case, each promise is consideration to the
other party such as a case for agreement of sale. The aforesaid principle can be found
in the case reported in MANU/SC/0021/1957 : [1957]1SCR1039 (Union of India v.
Chaman Lal Loona and Co.).
15. Adverting to the specific averments made in paragraphs 5,6 and 7 of the plaint, it
cannot be said that there is no consideration between the parties for the alleged
agreement. That apart, in their objection, the plaintiff-respondents have specifically
denied the allegation and asserted that such consideration would be explained at the
time of adducing evidence during the course of the trial.
The learned trial court is well within its jurisdiction in coming to the finding that the
question raised being mixed question of law and facts, cannot be decided in a
preliminary issue. The learned trial court has also not left untouched any of the
relevant provisions of law in passing the impugned order. That apart, the present
revision petition against an Order refusing to frame preliminary issue is also barred
under proviso to Section 115, CPC, even in unamended Section 115, CPC, as it existed
prior to Civil Procedure Court (Amendment) Act, 1999, a catena of decisions of various
courts would go to show that a revision petition would not lie against an Order
refusing to frame preliminary issue. On all these considerations, I do not find any

5. jurisdictional error committed by the learned trial court in passing the impugned Order
apart from its non-maintainability. Hence this revision petition stands dismissed.
16. No costs.
Earlier interim Order dated 22.8.2005 stands vacated.
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