LexKOLLIPARA SRIRAMULU versus T. ASWATHANARAYANA & ORS.
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KOLIJPARA SRIRAMULU v. T. ASWATHANARAYANA & ORS. March 4, 1968 B [J. C. SHAH, V. RAMASWAMI AND G. K. MITTER, JJ.) c D E F G H Contruct--Oral c.gree111ent to sell /and-Fornwl docuntent to be' exe- cuted later but not actually executed-Mode of paynrent of price not seuled-Contract whether binding, Partition Act 4 of 1893, s. 2-No application 1nac/e 11nder section- Higli Court whether empowered to give direction as to allollnent of pc·rti· cu/ar area 011 _narlition. On April IS, 1940 respondent No. I took on ten years' lease a site for the purpose of building a cinema theatre, from a partnership firm. He thoreafter built a cinema theatre on the land. Appellant No. I in 1948 insti~uted a suit for dissolution of the firm and for accounts. Respondent No. I who was impleaded as a defendant resisted the suit. In I 9SO the firm filed a suit to evict the first respondent from the leased land. In this suit appellant No. I was also impleaded as a defendant and he claim•d that in addition to his original 23 shares in the firm. he had acquired 39 shares by purchase. In 1953 respondent No. I also filed a suit alleging that all. the partners of the firm except the appellant had entered into an oral agreement. with him on July 6, 1952 to sell 137 shares in the site except the 23 shares belonging to appellant No. 1; that 98 shares had actually boon sold to him; that 39 shares had not been sold to him and had been instead sold to appellant No. I. Respondent No. I thereaftor claimed spet':Jic performance of the agreement to sell the aforesaid 39 shares by iheir owners and contended that the sale of those shares in fa\'Our of appellant No. 1 was not binding upon him. The trial court decided against respondent No. 1 but the High Court decid-:d in his favour. In appeal before lhe Court the following questions came up for consideration : (i) whether there was an oral agreement between 'r-!!spondent No. l and all partners of the firm other than appellant No.: I for sale of their shares on July 6, 1952; (ii) whether the oral agreement was in-:tfective because the parties con:emplated the execution of a formal document or because the mode of payment of the purchase money was not actually agre~d upon; (iii) whether in respect of the 39 shares purchased by him appellant No. I \Vas a purchaser wi~hout notice; (iv) whether in the absence of an applica- tion under s. 2 of the Partition Act 1893 the High Court was right in giving a direction that as far as possible the site upon which the cinema building stood should be allotted to tho. share of respondent No. I if it was comprised within the 137 shares to wh~.ch he was entitled. HELD : (i) On the facts of the ·case the High Court was rioht in holding that there \vas an agreement to sell 137 shares in the site iO res- pondent No. I. (ii) A mere reference to a future formal contract does not prevent the existence of a binding ag'reement between the partios unless the reference to a future contract is made in such te'rms as to show that the parties did rrot intend to be bound until a formal contract is sic.n~d. The question depends upon the intention of the. parties and the speCial circum- stances of each particular case. In the present case the evidence Jid not show that tho drawing up of a written agreement was a prc-rcquisi:e to the coming into effect of the oral agreement. [393 C·D] 388 SUPREME COURT REPORTS (1968) 3 S.C.R N<>r did the absence <>f a specific agt"'...ement as to the mode of payment A ·necessarily make the agreement ineffective. Since the vi.tal terms of the contract like the price and area of the land and the time for completion of the sale were all fixed. [394 El (iii) The appellant had been unable to establish that in respect of the 39 shares purchased by him he was a purchaser without notice. [395 A-Bl (iv) Jn the absence of an applicati<>n by the respondent under s. 2 <if B th·o Partition Act the High Court bad no power to make a direction as to the particula'r portion of the site to be allotted to respondent No. I on partition. [395 D-El Rama Prasada Rao v. Subbaramaiah, (1951) II An. W.R. 488, Ridgway v.JVharton, 6 H.L.C. 238, Von Hatzfe/dt-Wildenburg v. Alexander, (1912) I Ch. 284, Rossiter v. Miller; 3 A.C. 1124 and Currimbhoy and Compan,v Ltd. v. Creel, 60 I.A. 297, referred to. c CIVIL APPELLATE JURISDICTION ; Civil Appeals Nos. 427 and 428 of 1963. Appeals from the judgment and decree
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