MUKUL SHARMAversusORION INDIA (P) LTD. THROUGH ITS MANAGING DIRECTOR

                             [2016] 2 S.C.R. 666



A                           MUKUL SHARMA
                                      v.
          ORION INDIA (P) LTD. THROUGH ITS MANAGING
                            DIRECTOR

B                      (Civil Appeal No. 4997 of2016)
                                MAY 10,2016
    [KURIAN JOSEPH AND ROHINTON FALi NARIMAN, JJ.)
          Specific performance: Suit for specific performance of
    agreement - As per the agreement, certain proportion of built-up
c   area was liable to be handed over to the plaintiff-appellant - Dispute
    as to what is the built-up area - Appellant sent a letter stating that
    built up area was understood to include the common area -
    Defendant agreed to the definition of built up area as given by
    plaintiff in order to resolve the matter - This was followed by another
D   letter by defendant· wherein· they stated that all common area were
    excluded as suggested by the plaintiff - Trial court decreed the suit
    - However, High Court set aside the decision of the trial court - On
    appeal, held: It was defendant who changed his stand and accepted
    the position as raised by plaintiff - Thereafter and therefore, under
    the spirit of s.5 of the Contract Act, defendant cannot resile from
E
    the mutually agreed position.
         Allowing the appeal, the Court
       HELD: 1. It is not a case where the plaintiff resilea from the
  agreement. It is a case where the defendant himself subsequently
F 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
G the parties. No doubt, the appellant plaintiff had, after five years
  of the sale deed, as per letter 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
H area. It is not as if an attempt is made for interpreting the express
                                     666
 MUKUL SHARMA v. ORION INDIA (P) LTD. THROUGH ITS                           667
             MANAGING DIRECTOR

 terms of an agreement, by subsequent condnct. It is a sitnation             A
 where there is a dispnte 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.
.Bnt that does not prevent him from raising a dispute. And on
 raising such a dispnte, nothing prevented the defendant from
                                                                             B
 insisting the plaintiff to stick to his original stand. On the contrary,
 it is the defendant who changed his stand and accepted the position
 as raised by the plaintiff. Thereafter and therefor, under the true
 spirit of section 5 of the Contract Act, defendant cannot resile
 from the mutually agreed position; [Para 9] (670-C-G]
      Abdulla Ahmed vs. Animendra Kissen Mitter AIR 1950                     c
      SC 15:1950 SCR 30; Godhra Electricity Co. Ltd & Am:
      vs. The State of Gujarat & Anr. AIR 1975 SC 32:1975
      (2) SCR 42 - referred to.
                           Case Law Reference
                                                                             D
   1950 SCR 30                    referred to              Para 10
   1975 (2) SCR 42                referred to              Para 10
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4997 of
2016.
     From the Judgment and Order dated 01.09.2015 of the High Court,         E
at Guwahati,.in RFA No. 38 of2006.
      Shyam Divan, Sr. Adv., P. V. Yogeswaran for the Appellant.
     Avijit Bhattacharjee, Ms. Upma Shrivastava for the Responden.t.
     The following Order of the Court was delivered
                                 ORDER                                       F
      I. Leave. granted.
     2. The appellant filed Title Suit No.195 of 1998 before the Civil
Judge (Senior Division) No. I at Guwahati praying for specific
performance of the instrument dated 25.8.1992 between the appellant
                                                                             G
and the respondent.
      3. The dispute is only on a narrow compass. As per paragraph (1 L
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 drawingNo.GBA/
891/03Adated 14.12.1990 and half of the built up area on the mei:zanine
                                                                             H'
668                SUPREME COURT REPORTS                           [2016] 2 S.C.R.


A     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 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 :
 B
          (i)       Whether the parties had entered into agreement knowing that
                    'built up area' as mentioned in Ext. I agreement includes the
                    common area?
          (ii)      Whether the plaintiff is entitled to specific performance as
 C                  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
 D    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.
 E    The relevant portion of annexure Ex.3 letter dated 9.3.1998 reads as
      follows:
                 "(!)That the "built-up area" as in clause l(i), (ii) & (iii) of the
                 Agreement between yourself and the Company (Deed No.5581
                 dated 25/8/98) should be defined as "the area with in the four walls
 F               excluding the common area 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
 G               recalculate the area to be allotted to you and shall inform you
                 shortly."
           6. This was followed by Ex.4 letterdated 16.3.1998 wherein it is
      stated in the very opening paragraph of the said letter as follows:
                 "Further to our letter No.ORION/44-1198/028 dt.9/3/98, we furnish
 H
 MUKUL SHARMA v. ORION INDIA (P) LTD. THROUGH ITS                               669
             MANAGING DIRECTOR

      below the built-up areas calculated for drg. Nos.GBA/891/03A,              A
      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
      QyyQy,."
                                                  (All emphasis supplied)        B
      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         c
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 complete, it is held.
    8. The relevant consideration by the High Court at para 26 of the            D
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           E
      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    F
      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,
      mezz.anine floor and the third floor. Out of this total 'built up area'    G
      of8726.43 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                H
670             SUPREME COURT REPORTS                              (2016) 2 S.C.R.


A            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 of8726.43
             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 ofletter 9.3.1998, the plaintiffhad
B
             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."
            9. It is not a case where the plaintiffresiled from the agreement. It
 c    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 tenns, 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
D     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 ifan
 E    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
 F    raising such a dispute, nothing prevented the defendant from insisting
      the plaintiffto 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. Thereafter and therefor, under the true spirit of
       section 5 of the Contract Act, defendant cannot resile from the mutually
      agreed position.
 G
            I 0. In Abdulla Ahmed vs. Animendra Kissen Miller - AIR 1950
      SC 15, this Court has dealt with a similar situation and it has been held
      that"
             "Extrinsic evidence to detennine the effect of an instrument is
 H           pennissible where there remains a doubt as to its true meaning.
 MUKUL SHARMA v. ORION INDIA (P) LTD. THROUGH ITS                              671
             MANAGING DIRECTOR

       Evidence of the acts done under it is a guide to the intention of the    A
       parties in such a case and particular]y 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         B
       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          c
       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          D
area' and restore that of the trial court.
       12. We find that the High Court has remanded the matter to the
trial court forthe 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      E
expeditiously.
     No costs.
Devika Gujral                                                Appeal allowed.