{"id":205623,"date":"1998-02-02T00:00:00","date_gmt":"1998-02-01T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sri-tarsem-singh-vs-sri-sukhminder-singh-on-2-february-1998"},"modified":"2015-11-15T03:37:44","modified_gmt":"2015-11-14T22:07:44","slug":"sri-tarsem-singh-vs-sri-sukhminder-singh-on-2-february-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sri-tarsem-singh-vs-sri-sukhminder-singh-on-2-february-1998","title":{"rendered":"Sri Tarsem Singh vs Sri Sukhminder Singh on 2 February, 1998"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Sri Tarsem Singh vs Sri Sukhminder Singh on 2 February, 1998<\/div>\n
Author: S S Ahmad.<\/div>\n
Bench: S. Saghir Ahmad, M. Jagannadha Rao<\/div>\n
           PETITIONER:\nSRI TARSEM SINGH\n\n\tVs.\n\nRESPONDENT:\nSRI SUKHMINDER SINGH\n\nDATE OF JUDGMENT:\t02\/02\/1998\n\nBENCH:\nS. SAGHIR AHMAD, M. JAGANNADHA RAO\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t      J U D G M E N T
\nS. SAGHIR AHMAD. J.\n<\/p>\n
     Delay condoned.\n<\/p>\n
     The defendant  is the  petitioner in this Special Leave
\nPetition before us.\n<\/p>\n
     The petitioner,  who  owned  48  kanals  11  marlas  of
\nagricultural land  in village  Panjetha, Tehsil and District
\nPatiala, entered  into a contract for sale of that land with
\nthe respondent\ton 20.5.1988 @ Rs. 24,000\/- per acre. At the
\ntime of\t the execution\tof the\tagreement, an  amount of Rs.
\n77,000\/- was  paid to the petitioner as earnest money. Since
\nthe petitioner\tin  terms  of  the  agreement  although\t the
\nrespondent was\tready and willing to perform his part of the
\ncontract, the  latter, namely, the respondent filed the suit
\nfor Specific  Performance against  the petitioner  which was
\ndecreed by  the trial  court. The  decree  was\tmodified  in
\nappeal by  the Additional  District Judge  who\twas  of\t the
\nopinion that  the parties  to  the  agreement,\tnamely,\t the
\npetitioner and\trespondent both\t suffered from\ta mistake of
\nfact as\t to the\t area of  the land  which was proposed to be
\nsold as\t also the  price (sale-consideration) whether it was
\nto be  paid at\tthe rate  of per “Bigha” or per “Kanal”. The
\nLower Appellate Court also found that the respondent was not
\nready and  willing to  perform his  part  of  the  contract.
\nConsequently, the  decree for  Specific Performance  was not
\npassed but  a decree  for refund of the earnest money of Rs.
\n77,000\/- was  passed against the petitioner. This was upheld
\nby the High Court.\n<\/p>\n
     Learned counsel  for the  petitioner has contended that
\nsince the  Lower Appellate Court was recorded a finding that
\nthe respondent was not ready and willing to perform his part
\nof  the\t contract  inasmuch  as\t the  balance  of  the\tsale
\nconsideration was  not offered by him to the petitioner, the
\nLower. Appellate  Court as also the High Court, which upheld
\nthe judgment  of the Lower Appellate Court, were in error in
\npassing a  decree for  return of the amount of earnest money
\nparticularly as\t the parties had expressly stipulated in the
\nagreement for  sale that if the sale was not obtained by the
\nrespondent  on\t payment  of  the  balance  amount  of\tsale
\nconsideration, the  amount of earnest money, advanced by the
\nrespondent, shall stand forfeited.\n<\/p>\n
     In order to decide this question, we have to proceed on
\ncertain admitted  facts which  are to  the effect that there
\nwas an\tagreement for  sale between  the parties  concerning
\nagricultural land  measuring 48\t kanals 11  marlas which was
\nproposed to be sold at the rate of Rs. 24,000\/- per bigha or
\nkanal and that an amount of Rs. 77,000\/- was paid as earnest
\nmoney. The  sale deed  was  to\tbe  obtained  on  or  before
\n15.10.1988 by offering the balance of the sale consideration
\nto the\tpetitioner before  the sub-Registrar, Patiala. There
\nwas a  stipulation in  the agreement  that if the respondent
\nfailed to  pay the balance amount of sale consideration, the
\nearnest money shall stand forfeited.\n<\/p>\n
     During the pendency of the appeal before the Additional
\nDistrict Judge,\t respondent made  certain amendments  in the
\nplaint which  have been set out in the judgment of the Lower
\nAppellate Court as under:-\n<\/p>\n
     “(a) He  corrected the  area of the
\n     suit land\tas 48  bighas 11 biswas,
\n     instead of 48 kanals 11 biswas.<\/p>\n
     (b) In  para 3  of the  plaint,  he
\n     corrected\t the   figure\tof   Rs.
\n     1,56,150\/- to Rs. 2,35,750\/-.\n<\/p><\/blockquote>\n
     (c) He also added following para 3A
\n     to the amended plaint:-\n<\/p><\/blockquote>\n
     “The land\tis mortgaged with Canara
\n     Bank  by\tthe  defendent\tfor  Rs.
\n     20,000\/-. The defendant be directed
\n     to deposit\t the due  amount to  the
\n     Canara  Ban  or  the  plaintiff  be
\n     authorised to  retain the\tmortgage
\n     money.”\n<\/p><\/blockquote>\n
     (d) He  also  added  the  following
\n     lines to para 9 of the plaint:-
\n     “The plaintiff  met Tarsem Singh in
\n     the month\tof September,  1988  and
\n     offered him  the money with request
\n     to get  the sale deed registered in
\n     his favour\t but he\t refused  to  do
\n     so.”\n<\/p><\/blockquote>\n
     (e) He  also  added  the  following
\n     lines to para 19 of the plaint:-<\/p><\/blockquote>\n
     “The value\t of  the  suit\tfor  the
\n     purpose   of    court    fee    and
\n     jurisdiction is  Rs. 2,40,000\/-  on
\n     which a  court fee\t stamps\t of  Rs.
\n     4,686\/- is fixed.”<\/p><\/blockquote>\n
     The Lower\tAppellate  Court  also\trecorded  additional
\nevidence. Thereafter, the Lower Appellate Court proceeded to
\nrecord the findings as under:-\n<\/p>\n
     “24. It is rightly submitted by the
\n     learned counsel  for the  appellant
\n     that the  case of\tthe appellant is
\n     hoisted twice over with his patard.
\n     If\t the   total  price  of\t as  per
\n     amended  plaint,\tthem  from   the
\n     original plaint and evidence of the
\n     respondent in  the trial  court, it
\n     is clear  that he\twas never of Rs.
\n     2,35,750\/- to the appellant for the
\n     land in  contract, and that what he
\n     was ready and willing to pay at all
\n     material points  of time  before he
\n     filed application\tfor amendment of
\n     the plaint\t in this court, was only
\n     Rs. 1,56,150\/-.\n<\/p><\/blockquote>\n
     25. Of  course, with  the advantage
\n     of hind  sight and\t as a clever but
\n     clumsy  after   though   Sukhminder
\n     Singh respondent PW1 stated in this
\n     court on  30.4.1993  that\twhen  he
\n     attended the  offence  of\tthe  Sub
\n     Registrar for execution of the sale
\n     deed on 30.4.1993 he was having Rs.
\n     one lac  in his possession. However
\n     performance because for the reasons
\n     already stated,  it  is  abundantly
\n     clear that\t till before  filing the
\n     application for  amendment\t of  the
\n     plaint,   in    this   court,   the
\n     respondent was  only willing to pay
\n     the total sale price Rs. 1,56,150\/-<\/p><\/blockquote>\n
     to the  appellant, and not the full
\n     sale    consideration     of    Rs.
\n     2,35,750\/-.   Therefore\tin   the
\n     peculiar facts and circumstances of
\n     the case,\tit would be difficult to
\n     hold that\the had\tthroughout  been
\n     ready and\twilling to  perform  his
\n     part of the contract.\n<\/p><\/blockquote>\n
     26. An  other forensic  cross which
\n     the respondent  must bear\tis  that
\n     even from\this original  pleadings,
\n     and the  amended pleadings,  it  is
\n     clear that\t both the  parties  were
\n     under a  mistake of  fact in so far
\n     as the  area of  land agreed  to be
\n     sold was  concerned. As  luck would
\n     have it,  none  of\t them  was  sure
\n     whether it was 48 kanals 11 marlas,
\n     or 48  bighas 11 biswas. Therefore,
\n     the  contract   Act.  Besides  this
\n     where  the\t description,  area  and
\n     other particulars\tof the\tproperty
\n     are   not\t  absolutely   definite,
\n     precise,  certain\t and  exact,  no
\n     decree for\t specific performance of
\n     sale can be passed.”\n<\/p><\/blockquote>\n
     The Lower\tAppellate Court\t further
\n     proceeded to say as under:-
\n     “On the analysis presented above it
\n     is\t absolutely   clear   that   the
\n     parties were  never ad-idem  as  to
\n     the exact\tarea of\t the land agreed
\n     to be sold.”<\/p><\/blockquote>\n
     It was on account of the above findings that the decree
\nfor return  of the earnest money of Rs. 77,000\/- paid to the
\npetitioner was\tpassed particularly  as the  petitioner\t was
\nfound to  be under  a legal obligation to return that amount
\ntogether with  interest at the rate of 6% per annum from the
\ndate of contract till the date of acutal refund.\n<\/p>\n
     The findings  that the  parties were  suffering from  a
\nmistake of  fact as  to the  area and  the rate at which the
\nproperty was  agreed to\t be sold has been upheld by the High
\nCourt which  summarily dismissed  the Second Appeal filed by
\nthe petitioner questioning the finding\tof the courts below.\n<\/p>\n
     What is  the effect  and impact of “Mistake of Fact” on
\nthe agreement in question may now be examined.\n<\/p>\n
     `Contract’ is  a bilateral\t transaction between  two or
\nmore than  two parties.\t Every contract\t has to pass through
\nseveral stages\tbeginning  with\t the  stage  of\t negotiation
\nduring which the parties discuss and negotiate proposals and
\ncounter-proposals  as\talso  the   consideration  resulting
\nfinally in the acceptance of the proposal. The proposal when
\naccepted gives\trise to\t an agreement.\tIt is  at this stage
\nthat the  agreement is\treduced into  writing and  a  formal
\ndocument is executed on which parties affix their signatures
\nor thumb  impression so\t as to\tbe bound by the terms of the
\nagreement set out in that document. Such an agreement has to
\nbe lawful  as the  definition of  contract, as\tset  out  in
\nSection 2(h)  provides that “an agreement enforceable by law
\nis a contract”. Section 2(9) sets out that “an agreement not
\nenforceable by law is said to be void”.\n<\/p>\n
     Before  we\t  proceed  to\tconsider  what\t are  lawful
\nagreements or  what are\t voidable or  void contracts, we may
\npoint out  that it  is not  necessary under  law that  every
\ncontract must be in writing. There can be an equally binding
\ncontract between  the parties on the basis of oral agreement
\nunless there  is a law which requires the agreement to be in
\nwriting.\n<\/p>\n
Section 10 of the Contract Act provides as under:-\n<\/p>\n
     “10.    What     agreements     are
\n     contracts.-  All\tagreements   are
\n     contracts if  they are  made by the
\n     free consent  of parties  competent
\n     to\t  contract,    for   a\t  lawful
\n     consideration  and\t with  a  lawful
\n     object,   and    are   not\t  hereby
\n     expressly declared to be void.\n<\/p>\n
     Nothing  herein   contained   shall
\n     affect any\t law in\t force in  India
\n     and not  hereby expressly repealed,
\n     by which  any contract  is required
\n     to be  made in  writing or\t in  the
\n     presence of  witnesses, or\t any law
\n     relating  to  the\tregistration  of
\n     documents.”\n<\/p>\n
     The essentials  of contract set out in Section 10 above
\nare:-\n<\/p>\n
     (1) Free consent of the parties
\n     (2) Competence of parties to contract
\n     (3) Lawful consideration
\n     (4) Lawful object
\n     Competence to  contract is\t set out in Section 11 which
\nprovides that  every person  is competent to contract who is
\nof the\tage of\tmajority and who is of sound mind and is not
\ndisqualified from  contracting by  any law  to which  he  is
\nsubject. Section  12 provides  that a person will be treated
\nto be  of sound\t mind if,  at the  time when  he  makes\t the
\ncontract, he  is capable  of understanding  it and forming a
\nrational judgment as to its effect upon his interests.\n<\/p><\/blockquote>\n
     “Consent” and  “Free Consent”, with which we are really
\nconcerned in  this appeal,  are defined in Section 13 and 14
\nof the Act as under:-\n<\/p><\/blockquote>\n
     “13. Two  or more\tpersons are said
\n     to consent when they agree upon the
\n     same thing in the same sense.”
\n     “14. Consent  is said  to\tbe  free
\n     when it is not caused by-
\n     (1) coercion, as defined in section
\n     15, or
\n     (2) undue\tinfluence, as defined in
\n     section 16, or
\n     (3) fraud,\t as defined  in\t section
\n     17, or
\n     (4) misrepresentation,  as\t defined
\n     in section 18, or
\n     (5)   mistake    subject\tto   the
\n     provisions of  sections 20,  21 and\n<\/p><\/blockquote>\n
     22.
\n     Consent is\t said to  be  so  caused
\n     when it  would not\t have been given
\n     but  for\tthe  existence\tof  such
\n     coercion, undue  influence,  fraud,
\n     misrepresentation or mistake.”<\/p><\/blockquote>\n<\/blockquote>\n
     Section 15,  16, 17  and 18  define “Coercion”,  “undue
\nInfluence”, “Fraud” and “Misrepresentation”.<\/p><\/blockquote>\n
     Section 19\t provides that\twhen consent to an agreement
\nis caused  by coercion,\t fraud\tor  misrepresentation,\tsuch
\nagreement is  voidable at  the option  of  the\tparty  whose
\nconsent was  so caused.\t So also  is the  agreement to which
\nconsent of a party was obtained by undue influence.\n<\/p>\n
     Section 20\t of the Act lays down as
\n     under:-\n<\/p>\n
     “20.  Agreement   void  where  both
\n     parties are  under\t mistake  as  to
\n     matter of\tfact.-\tWhere  both  the
\n     parties to an agreement are under a
\n     mistake as\t to  a\tmatter\tof  fact
\n     essential\tto  the\t agreement,  the
\n     agreement is void.\n<\/p>\n
     Explanation.- An  erroneous opinion
\n     as to  the value of the thing which
\n     forms  the\t subject-matter\t of  the
\n     agreement, is  not to  be deemed  a
\n     mistake as to a matter of fact.”\n<\/p>\n
     This Section  provides that  an agreement would be void
\nif both the parties to the agreement were under a mistake as
\nto a  matter of fact essential to the agreement. The mistake
\nhas to\tbe mutual and in order that the agreement be treated
\nas void, both the parties must be shown to be suffering from
\nmistake of  fact. Unilateral mistake is outside the scope of
\nthis Section.\n<\/p>\n
     The other\trequirement is\tthat the mistake, apart from
\nbeing mutual,  should be  in respect  of a  matter which  is
\nessential to the agreement.\n<\/p>\n
     Learned counsel  for the  petitioner contended  that  a
\nmistake of  fact with  regard to  the “price”  or the “area”
\nwould not  be a\t matter essential to the agreement, at least
\nin the instant case, as the only dispute between the parties
\nwas with  regard to the price of the land, whether the price
\nto be  paid for\t the area calculated in terms of “bighas” or
\n“canals”.\n<\/p>\n
     “Bigha” and “Kanal” are different units of measurement.
\nIn the Northern part of the country, the land is measured in
\nsome states  either in\tterms of  “bighas” or  in  terms  of
\n“kanals”. Both\tconvey different  impressions regarding area
\nof the\tland. The finding of the Lower Appellate Court is to
\nthe effect that the parties were not ad-item with respect to
\nthe unit  of measurement.  While the  defendant intended  to
\nsell it\t in terms  of “kanals”,\t the plaintiff\tintended  to
\npurchase it  in terms of “bighas”, the plaintiff intended to
\npurchase it in terms of “bighas”. Therefore, the dispute was
\nnot with regard to the unit of measurement only. Since these
\nunits relate  to the  area of  the land.  Since these  units
\nrelate to the area of the land, it was really a dispute with
\nregard to  the area of the land which was the subject matter
\nof agreement for sale, or, to put differently, how much area
\nof the\tland was  agreed to  be sold, was in dispute between
\nthe parties  and it  was with regard to the area of the land
\nthat the  parties were\tsuffering from a mutual mistake. The
\narea of\t the land  was as much essential to the agreement as
\nthe price  which, incidentally,\t was to be calculated on the
\nbasis of  the area.  The contention  of the  learned counsel
\nthat the “mistake” with which the parties the suffering, did
\nnot relate  to a matter essential to the agreement cannot be
\naccepted.\n<\/p>\n
     Learned counsel  for the  petitioner has contended that
\nLower Appellate\t Court or  the High Court were not justified
\nin passing a decree for the refund of Rs. 77,000\/- which was
\npaid as\t earnest money\tto the\tpetitioner as  there  was  a
\nspecific stipulation  in the  agreement for sale that if the
\nrespondent did\tnot perform his part of the contract and did
\nnot obtain  the sale deed after paying the balance amount of
\nsale  consideration   within  the   time  specified  in\t the
\nagreement, the\tearnest money  would stand  forfeited. It is
\ncontended that\tsince  the  respondent\tdid  not  offer\t the
\nbalance amount\tof sale consideration and did not obtain the
\nsale deed  in terms  of the agreement, the amount of earnest
\nmoney was  rightly forfeited  and a  decree for\t its  refund
\ncould not have been legally passed.\n<\/p>\n
     Learned counsel  for the  petitioner  has\tinvited\t our
\nattention to Section 73 and 74 of the Contract Act which, in
\nour opinion, are of no aid to the petitioner.\n<\/p>\n
     Section 73\t stipulated a  valid  and  binding  contract
\nbetween the  parties. It  deals with  one  of  the  remedies
\navailable for  the breach  of contract.\t It is provided that
\nwhere a\t party sustains\t a loss\t on  account  of  breach  of
\ncontract, he  is entitled to receive, from the party who has
\nbroken the contract, compensation for such loss or damage.\n<\/p>\n
     Under Section  74 of  the Act,  however, the parties to
\nthe agreement  stipulate either a particular amount which is
\nto be  paid in\tcase of breach or an amount may be mentioned
\nto be  paid by\tway of penalty. The party complaining of the
\nbreach is  entitled, whether or not actual damage or loss is
\nproved to  have been  caused, to  receive from the party who
\nhas committed  the  breach  of\tcontract,  compensation\t not
\nexceeding the  amount mentioned\t in  the  agreement  or\t the
\npenalty\t stipulated   therein.\t But   this   Section\talso
\ncontemplates a\tvalid  and  binding  agreement\tbetween\t the
\nparties. Since the stipulation for forfeiture of the earnest
\nmoney is  part of  the contract,  it is\t necessary  for\t the
\nenforcement of\tthat stipulation,  that the contract between
\nthe parties  is valid. If the forfeiture clause is contained
\nin an  agreement which\tis void\t on account of the fact that
\nthe parties were not ad-idem and were suffering from mistake
\nof fact\t in respect  of a  matter which was essential to the
\ncontract, it  cannot be\t enforced as the agreement itself is
\nvoid under  Section 20 of the Contract Act. A void agreement
\ncannot be split up. None of the parties to the agreement can
\nbe permitted  to seek  enforcement of  a part  only  of\t the
\ncontract through  a court  of law. If the agreement is void,
\nall its\t terms are  void and  none of  the terms,  except in
\ncertain known  exceptions, specially  where  the  clause  is
\ntreated to  constitute a separate and independent agreement,
\nseverable from the main agreement can be enforced separately
\nand independently.\n<\/p>\n
     Since, in\tthe instance  case, it\thas been  found as a
\nfact by\t the below  that the  agreement in question was void
\nfrom its  inception as\tthe  parties  suffered\tfrom  mutual
\nmistake with  regard to\t the area  and price of the plots of
\nland agreed  to be  sold, the  forfeiture clause  would, for
\nthat reason,  be also  void and,  therefore, the  petitioner
\ncould  not   legally  forfeit\tthe  amount   and  seek\t the
\nenforcement of forfeiture clause, even by way of defence, in
\na  suit\t  instituted  for   Specific  Performance   by\t the
\nrespondent.\n<\/p>\n
     We may  also refer\t to Section  65 of  the Contract Act
\nwith, mirus the illustrations, is as follows:-\n<\/p>\n
     “65. Obligation  of person\t who has
\n     received\tadvantage   under   void
\n     agreement or  contract that becomes
\n     void.-   When   an\t  agreement   is
\n     discovered to  be void,  or when  a
\n     contract becomes  void, any  person
\n     who  has\treceived  any  advantage
\n     under such agreement or contract is
\n     bound to  restore it,  or\tto  make
\n     compensation for  it, to the person
\n     from whom he received it.”<\/p><\/blockquote>\n
     This Section,  which is  based on\tequitable  doctrine,
\nprovides for the restitution of any benefit received under a
\nvoid agreement or contract and, therefore, mandates that any
\n“person” which\tobviously  would  include  a  party  to\t the
\nagreement, who has received any advantage under an agreement
\nwhich is  discovered to\t be void  or under  a contract which
\nbecomes void,  has to  restore\tsuch  advantage\t or  to\t pay
\ncompensation for  it, to  the person  from whom\t he received
\nthat advantage or benefit.\n<\/p>\n
     Learned counsel  for the  appellant has  contended that
\nSection\t\t   65 would  apply to  a situation where the
\nagreement is  “discovered to  be void” or where the contract
\n“becomes void”\tand not\t to an\tagreement which is void from
\nits inception.\tThis argument cannot be allowed to prevail.\n<\/p>\n
     Mutual consent, which should also be a free consent, as
\ndefined in Section 13 and 14 of the Act, is the sine qua non
\nof a valid agreement. One of the essential elements which go
\nto constitute  a free  consent is that a thing is understood
\nin the\tsame sense  by a party as is understood by the other
\nparty. It  may often  be that the parties may realise, after
\nhaving entered into the agreement or after having signed the
\ncontract, that one of the matters which was essential to the
\nagreement, was\tnot understood by them in the same sense and
\nthat  both   of\t them\twere  carrying\t totally   different
\nimpressions of\tthat matter at the time of entering into the
\nagreement or  executing the document. Such realisation would
\nhave the  effect of invalidating the agreement under Section
\n20 of  the Act.\t On such realisation, it can be legitimately
\nsaid that  the agreement  was “discovered  to be  void”. The
\nwords “discovered  to  be  void”,  therefore,  comprehend  a
\nsituation in which the parties were suffering from a mistake
\nof fact from the very beginning but had not realised, at the
\ntime of\t entering into\tthe  agreement\tor  signing  of\t the
\ndocument, that they were suffering from any such mistake and
\nhad, therefore,\t acted bona  fide  on  such  agreement.\t The
\nagreement in  such a  case would be void from its inception,
\nthough discovered to be so at a much later stage.\n<\/p>\n
     The Privy\tCouncil in Thakurain Harnath Kuar vs. Thakur
\nIndar Bahadur  Singh, AIR  1922 PC  403 = ILR (1922) 45 All.
\n179 =  27 CWN  949 =  44  MLJ  489,  while  considering\t the
\nprovisions of Section 65 held that:-\n<\/p>\n
     “The   section   deals   with   (a)
\n     agreements and  (b) contracts.  The
\n     dinstinction   between    them   is
\n     apparent from  section 2. By clause\n<\/p><\/blockquote>\n
     (e) every\tpromise and every set of
\n     promises forming  the consideration
\n     for each other is an agreement, law
\n     is\t  a    contract.   Section   65,
\n     therefore,\t   deals     with    (a)
\n     agreements enforceable  by law  and\n<\/p><\/blockquote>\n
     (b)   with\t   agreements\tnot   so
\n     enforceable.  By\tclause\t(g)   an
\n     agreement not enforceable by law is
\n     said to be void.\n<\/p><\/blockquote>\n
     An agreement, therefore, discovered
\n     to br  void is one discovered to be
\n     not enforceable by law, and, on the
\n     language  of   the\t section   would
\n     include an\t agreement that was void
\n     in that sense from its inception as
\n     distinct  from   a\t contract   that
\n     becomes void.”<\/p><\/blockquote>\n
     This case before the Privy Council also related to sale
\nof certain  villages for  which some  money had been paid in
\nadvance. The sale was found to be inoperative as there was a
\nmisapprehension as  to the  rights of  the transferor in the
\nvillages which he purported to sell and that the true nature
\nof  those   rights  was\t  discovered  much  later.  In\tthis
\nbackground, the\t Privy Council\theld the  agreement to\thave
\nbeen “discovered  to be void”. The Privy Council, therefore,
\npassed a decree for compensation in favour of the vendee and
\nin assessing  that compensation, the sum of money, which was
\nadvanced, was included in the amount of compensation decreed
\nwith 6% interest payable from the date of suit.\n<\/p>\n
     To the  same effect  is an old decision of the Calcutta
\nHigh Court  in Ram  Chandra  Misra  and\t others\t vs.  Ganesh
\nChandra Gangopadhya  and others.  AIR 1917  Calcutta 786, in
\nwhich it  was held  that an  agreement entered\tinto under a
\nmistake\t and   misapprehension\tas   to\t the   relative\t and
\nrespective rights of the parties thereto is liable to be set
\naside as  having proceeded  upon a  common mistake.  In this
\ncase, there  was  an  agreement\t for  lease  of\t the  mogoli
\nbrahmatter rights  of the  defendants in  certain  plots  of
\nland. Both  the parties\t were under  the impression that the
\nbrahmatter rights  carried with\t them the mineral rights. It
\nwas subsequently  discovered that  brahmatter rights did not
\ncarry mineral rights. The High Court held that the agreement
\nbecame void  under Section 20 of the Contract Act as soon as
\nthe mistake  was discovered  and, therefore,  the plaintiffs
\nwere entitled  to refund  of money advanced under a contract
\nwhich was subsequently discovered to be void.\n<\/p>\n
     We may  point out\tthat there  are many  facets of this
\nquestion, as for example (and there are many more examples),
\nthe agreement  being void  for any of the reasons set out in
\nSection 23  and 24,  in which  case even  the refund  of the
\namount already paid under that agreement may not be ordered.
\nBut, as pointed out above, we are dealing only with a matter
\nin which  one party  had  received  an\tadvantage  under  an
\nagreement which\t was “discovered  to be\t void” on account of
\nSection 20  of the Act. It is to this limited extent that we
\nsay that,  on the  principle contained\tin Section 65 of the
\nAct, the  petitioner having received Rs. 77,000\/- as earnest
\nmoney from the respondent in pursuance of that agreement, is
\nbound to  refund the said amount to the respondent. A decree
\nfor refund  of this amount was, therefore, rightly passed by
\nthe Lower Appellate Court.\n<\/p>\n
     For the  reasons stated  above, we see no force in this
\nSpecial Leave Petition which is dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Sri Tarsem Singh vs Sri Sukhminder Singh on 2 February, 1998 Author: S S Ahmad. Bench: S. Saghir Ahmad, M. Jagannadha Rao PETITIONER: SRI TARSEM SINGH Vs. RESPONDENT: SRI SUKHMINDER SINGH DATE OF JUDGMENT: 02\/02\/1998 BENCH: S. SAGHIR AHMAD, M. JAGANNADHA RAO ACT: HEADNOTE: JUDGMENT: J U D G M E […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-205623","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nSri Tarsem Singh vs Sri Sukhminder Singh on 2 February, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/sri-tarsem-singh-vs-sri-sukhminder-singh-on-2-february-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sri Tarsem Singh vs Sri Sukhminder Singh on 2 February, 1998 - 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