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REPORTABLE  IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION  CIVIL APPEAL NO.4997 OF 2016

(ARISING OUT OF SLP(C) NO.32544 OF 2015)

MUKUL SHARMA ....APPELLANT VERSUS

ORION INDIA (P.) LTD. THROUGH ITS  MANAGING DIRECTOR     ...RESPONDENTS

J U D G M E N T

Leave granted.  2. The appellant filed Title Suit No.195 of 1998 before the  Civil  Judge  (Senior  Division)  No.1  at  Guwahati praying  for  specific  performance  of  the  instrument dated 25.8.1992 between the appellant and the respondent. 3. The  dispute  is  only  on  a  narrow  compass.  As  per paragraph (1) of the aforesaid agreement, half of the built up area on the ground floor of the proposed North Block of the complex as per the drawing No.GBA/891/03A dated 14.12.1990 and half of the built up area on the mezzanine floor of the same building and complete built up area on the first floor in the same building, were liable to be handed over to the appellant. On a dispute as to what is the built up area, the appellant filed the

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civil suit. The suit was decreed. Aggrieved by the same, the respondent-defendant filed first appeal before the High Court. The following points for determination were found to arise in the first appeal :  

(i) Whether  the  parties  had  entered  into agreement  knowing  that  'built  up  area'  as mentioned  in  Ext.1  agreement  includes  the common area? (ii)  Whether  the  plaintiff  is  entitled  to specific performance as claimed? (iii) Whether plaintiff is entitled to a money decree as prayed for?  

4. As per the impugned order, the High Court has taken the view that the built up area includes the common area as  understood  by  the  parties.  Reliance  is  placed  on Ex.'H'  letter  dated  15.9.1997  written  by  the appellant-plaintiff to the respondent-defendant. As per the said letter, indisputably, the built up area has been understood to include the common area.  5. However,  the  High  Court  has  failed  to  appreciate Ex.3  letter  dated  9.3.1998  and  Ex.4  letter  dated 16.3.1998  in  the  correct  perspective.  The  relevant portion of annexure Ex.3 letter dated 9.3.1998 reads as follows :  

“(1)  That  the  “built-up  area”  as  in clause  1(i),  (ii)  &  (iii)  of  the  Agreement between yourself and the Company (Deed No.5581 dated 25/8/98) should be defined as “the area within the four walls excluding the common area

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as lift well, lobby, corridor, etc. (2) That our method of calculation and the area so calculated is not acceptable to you. Since we wish to resolve this long outstanding issue as early as possible,  we agree to your definition  of  “built-up  area”  and  shall recalculate the area to be allotted to you and shall inform you shortly.”    

6. This  was  followed  by  Ex.4  letter  dated  16.3.1998 wherein it is stated in the very opening paragraph of the said letter as follows :  

“Further  to  our  letter  No.ORION/44-1/98/028 dt.9/3/98, we furnish below the built-up areas calculated  for  drg.  Nos.GBA/891/03A, GBA/891/04A and GBA/891/05A using our accepted definition of “built-up area”. Please note that all common area such as lift well, corridor, lobby,  duct,  etc.,  have  been  excluded  as suggested by you.”

(All emphasis supplied)

7. It is unfortunate that the High Court has gone by the earlier understanding of the plaintiff on the concept of built-up area and wholly ignoring the understanding mutually  entered  into  between  the  plaintiff  and  the defendant on a later date. According to the High Court, since the plaintiff had once accepted the position that built-up area included common areas, he is always bound by the same. If plaintiff had once accepted the position in regard to the concept of 'built-up area' he cannot resile subsequently in view of bar under section 5 of the Indian Contract Act, 1872, once offer and acceptance is

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complete, it is held.  

8. The  relevant  consideration  by  the  High  Court  at para 26 of the impugned judgment reads as follows :  

“If Ext.3 and Ext.4 are studied and compared it would  appear  that  prima  facie,  defendant undertook to accept the definition of 'built up area'  given  by  the  plaintiff  and  therafter deferred  the  matter  for  recalculation  of  the entitlement on the light of such definition. But in  the  subsequent  communication,  the  defendant made  recalculation  as  to  entitlement  of  the plaintiff by applying his own definition of the 'built up area' and thus included common areas in the 'built up area'. This letter was written on 16.3.1998. But prior to that it is the plaintiff who had accepted the concept of 'built up area' as given by the defendant in his letter dated 15.9.1997 and made his own calculation about the entitlement of 'built up area'. According to the version of the plaintiff in the said letter dated 15.9.1997 (Ext.H), he was allotted possession of 8726.43  sq.ft of 'built up area' in total in three  floors,  namely,  first  floor,  mezzanine floor  and  the  third  floor.  Out  of  this  total 'built  up  area'  of  8726.43  sq.ft.,  plaintiff himself admitted in the said letter that there was 558.19 sq.ft. common area in the first floor, 544.74 sq.ft common area in the mezzanine floor and 540 sq.ft in the third floor. Thus, out of 8726.43 sq.ft 'built up area' handed over to the plaintiff, there was 558.19 sq.ft + 554.74 sq.ft +  540  sq.ft  =  1652.93  sq.ft  common  areas  and balance 7083.50 sq.ft under exclusive possession of  the  plaintiff.  The  plaintiff  after  showing this calculation claimed thereafter that he was still entitled to 3445.57 sq.ft in the top floor i.e. eighth floor. The sum of 8726.43 sq.ft + 3445.57  sq.ft  is  12172  sq.ft  and  so  there  is logic  behind  this  calculation  shown  by  the plaintiff. Once this calculation is accepted, it is  clear  that  prior  to  issuance  of  letter 9.3.1998,  the  plaintiff  had  accepted  the proposition  that  built  up  area  would  include common  areas.  If  plaintiff  had  accepted  the proposition of the defendant in regard to concept of 'built up area' he cannot resile subsequently in view of bar under section 5 of the Indian Contract Act, 1872.”            

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9. It is not a case where the plaintiff resiled from the agreement. It is a case where the defendant himself subsequently accepted the dispute raised by the plaintiff with regard to the concept of 'built-up area'. In express terms, the respondent-defendant has subsequently agreed that the built-up area will not include the common area like lift well, corridor, lobby, duct, etc. Admittedly, the expression “built up area” is not defined in the sale deed. It is something to be deciphered from the conduct of the parties. No doubt, the appellant plaintiff had, after five years of the sale deed, as per letter Ex.'H' dated 15.9.1997 understood the built up area as including common area. But subsequently, he disputed the position and  it  was  the  respondent-defendant  who  accepted  and agreed  to  the  position  that  built  up  area  does  not include common area. It is not as if an attempt is made for interpreting the express terms of an agreement, by subsequent conduct. It is a situation where there is a dispute on a concept relating to an expression/concept which is not explained in the agreement. The plaintiff had  initially  understood  the  concept  in  a  particular angle  or  manner.  But  that  does  not  prevent  him  from raising a dispute. And on raising such a dispute, nothing prevented the defendant from insisting the plaintiff to stick to his original stand. On the contrary, it is the defendant who changed his stand as per Ex.3 and Ex.4 and accepted  the  position  as  raised  by  the  plaintiff.

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Thereafter  and  therefor,  under  the  true  spirit  of section 5 of the Contract Act, defendant cannot resile from the mutually agreed position.  10. In  Abdulla Ahmed vs. Animendra Kissen Mitter  – AIR 1950 SC 15, this Court has dealt with a similar situation and it has been held that “

“Extrinsic evidence to determine the effect of an instrument is permissible where there remains a doubt as to its true meaning. Evidence of the acts done under it is a guide to the intention of the parties in such a case and particularly when acts are done shortly after the date of the instrument.”  

This was followed in The Godhra Electricity Co. Ltd & Anr. vs. The State of Gujarat & Anr. - AIR 1975 SC 32 :

“In these circumstances, we do not think we will be justified in not following the decision of this  Court  in   Abdulla  Ahmed  vs.  Animendra Kissen Mitter – 1950 SCR 30 at p.46 = (AIR 1950 SC  15  at  p.21),  where  this  Court  said  that extrinsic evidence to determine the effect of an instrument is permissible where there remains a doubt as to its true meaning and that evidence of the acts done under it is a guide to the intention  of  the  parties,  particularly,  when acts  are  done  shortly  after  the  date  of  the instrument.”  

11. We, accordingly, allow this appeal, set aside the impugned judgment of the High Court with regard to the finding on the 'built-up area' and restore that of the trial court.   

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12. We find that the High Court has remanded the matter to the trial court for the purpose of calculation of the built  up  area  to  be  handed  over  to  the plaintiff-appellant. We direct the trial court to make the  calculation  in  terms  of  this  judgment  and accordingly, dispose of the suit expeditiously.  

No costs.  

.........................J [KURIAN JOSEPH]

..........................J [ROHINTON FALI NARIMAN]

NEW DELHI; MAY 10, 2016.