G.D Dube, J.:— The plaintiff has preferred this appeal against the judgment and decree of the Civil Judge Dehradun dismissing the suit for specific performance of the contract entered into between the appellant and the respondent No. 1 and for possession of the property in dispute.

2. The appellant has alleged that the respondent No. 1 had decided to sell the property in dispute by its resolution No. 8 dated 27-2-1975 and authorised respondent No. 2 to sell the property in dispute and entered into an agreement for the said purpose. The respondent No. 2 had met and informed the appellant in the second week of June, 1976 that he was intending to sell the property in suit. The plaintiff had, therefore, made his offer to purchase the property for Rupees 67,100/-. The respondent No. 2 had accepted the offer of sale of the property on as it is basis with all litigation involved in the said property. It was alleged in the plaint that in this way there was concluded contract between the parties in respect of the property in dispute. The plaintiff-appellant had gone to Sri R.K Sinha, Advocate of respondent No. 2 to get the draft of agreement executed between the contracting parties finalised. But Sri Sinha had not finalised it. Thereafter plaintiff-appellant had written letter to respondent No. 2 to get the sale-deed executed but no reply was given to this letter. Respondents 1 and 2 had sent notice on 20-9-1976 through their Advocate Sri R.K Sinha denying the contract for sale between the parties. Respondents 1 and 2 sent another notice through their advocate Sri R.K Sinha to the appellant on 3-11-1976 threatening for disposing their property in suit to defendant-respondents 4 to 6. The appellant has alleged that he was always willing to perform his part of contract.

3. Respondents 1 and 2 filed separate written statements. They denied that any contract was finalised between the parties. It was however admitted that plaintiff-appellant had made offer of Rs. 67,100/- to purchase the property. It was denied that appellant had gone with the draft agreement to Sri R.K Sinha, Advocate. The respondent had contended on the other hand that when the appellant had approached Sri R.K Sinha, Advocate he had specifically informed appellant that the agreement shall provide no warranty of title nor shall provide any warranty according to law. The plaintiff had not agreed to these terms. It was urged that as plaintiff-appellant had not agreed to purchase the property without any warranty of title and warranty as provided by law no contract had finalised between the parties. Respondents 1 and 2 admitted that the appellant was certainly informed that the respondents 1 and 2 are intending to sell the property to respondents 4 to 6. It was also alleged in paragraph 22 of the written statement that as plaintiff-appellant had negotiated on behalf of some undisclosed person had no personal interest in the agreement. He had, therefore, no right to maintain the suit for specific performance of contract.

4. Respondents 3 to 6 had filed separate written statement. They had raised almost same plea as raised by respondents 1 and 2. They have also alleged that they were bona-fide purchasers believing that there was no valid contract between appellant and respondent No. 1. The plea of bar of limitation was also raised.

5. On the pleadings of the parties the lower court had framed 7 issues. The issue No. 1 relating to contract between plaintiff-appellant and defendant-respondent No. 2 was answered in the negative holding that no contract had materialised. Issue No. 2 regarding willingness and readiness of the appellant to perform his part of the contract was answered in favour of the plaintiff-appellant holding that he was willing and ready to perform his part of contract. Issue No. 3 relating to plea that the plaintiff-appellant was negotiating on behalf of undisclosed person was answered against the defendant. Issue No. 4 was whether defendant-respondent No. 3 had been unnecessarily impleaded. It has been answered against the defendant-respondent. Issue No. 5 regarding limitation was answered against the plaintiff-appellant. It was held that right from 26-6-1976 the plaintiff-appellant had knowledge of refusal by defendant respondents 1 and 2 to execute the sale-deed. The learned Judge has mentioned 3-7-1976, third week of August, 1976, 6-9-1976, 10-9-1976 the dates on which the plaintiff-appellant is alleged to have been informed about the intention of the defendant-respondents 1 and 2 not to execute the sale-deed in favour of he plaintiff-appellant. The suit had been filed on 17th September, 1979. It was held that the suit was barred by Art. 54 of Limitation Act. Issue No. 6 was regarding the bona fides of defendants-respondents 4-6 in purchasing the property in dispute and also purchasing it without notice of previous agreement. This issue had been answered in favour of the defendants-respondents Nos. 4 to 6 holding that they had purchased the property bona fidely and without notice of the previous agreement. On these findings issue No. 7 regarding relief was answered in the negative and the suit was dismissed.

6. The first point raised in this matter relates to the contract of sale between the parties. The main anchor of the apellant is the letter dated 19-6-1976 of defendant No. 2 which is Ext. 1. The main reliance has been placed upon the first and second paragraphs of this letter which reads as under:—

“Please accept my love and best wishes and convey them to all the members of the family. I confirm your offer for the purchase of the properties known as 2 Amrit Kaur Road, Dehradun (formerly known as 4 New Road, Dehradun) comprising of two havelis and one shop on “as it is basis” with all the litigations etc. involved in the said properties by your party from the Mission on a price of Rs. 67,100/- (Rupees Sixty seven thousand and one hundred only) and also the acceptance by me on behalf of the Ramakrishna Mission on the 18th instant. This is the highest offer so far received by me.”

7. It was urged that in the above letter the confirmation of the offer made by the plaintiff-appellant was made. This letter also confirms the acceptance by defendant-respondent No. 2 of the offer. It was, therefore, urged that according to S. 10 of the Contract Act this will amount to a contract. The learned counsel urged that in the contract only four things namely offer of the price by purchaser, acceptance of the offer by the seller, the details of the property to be sold and the price of the property were only essentials for a contract. Hence in view of the aforesaid contract of the letter Ext. 1 the other formalities enumenerated in the subsequent paragraphs were only a follow up of the contract and had nothing to do with the contract to sell. In this respect reliance has been placed upon S. 10 of the Contract Act. This section is as under:—

“What agreements are contracts — All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Nothing herein contained shall affect any law in force in India and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.”

8. The learned counsel for appellant has relied upon Jawahar Lal Burman v. Union Of India . AIR 1962 SC 378 : 1962 All LJ 411, Kallipara Sriramulu v. T. Aswasha Narayana, AIR 1968 SC 1028, Sohbat Devi v. Devi Phal, (1972) 3 SCC 495 : AIR 1971 SC page 2192, and Dr. Jeewan Lal v. Brij Mohan, (1972) 2 SCC 757 : AIR 1973 SC 559 in support of his contention.

9. Before discussing the case laws it would be appropriate to consider the other materials on record which shows the intention of the parties whether the Ext. 1 amounted to a final acceptance of the offer made by appellant. At this place one more factor is important. It is, whether the appellant was negotiating the sale for purchasing the property for himself or for any other person. There is an issue No. 3 about the above question. The learned counsel for appellant has urged that he had stated before the lower court that he was negotiating the sale for himself. It was further urged that respondent had not cross-examined him on this point. This omission has also been committed by learned counsel for plaintiff-appellant during the recording of statement of Swami Suryanand, the respondent. No. 2 who was examined as D.W 1 before the lower court. The witness has stated specifically that appellant had not disclosed the name of person on whose behalf he was making negotiation for sale of the property. It was neither suggested nor challenged in the cross-examination that the plaintiff was negotiating the sale for his own purpose and not for the third person.

10. In view of the defective evidence produced by both the parties the only basis remains the Ext. Ka 1 to gather the intention of the parties. In Ext. Ka 1 the words “your party” occurring in paragraph 2 as quoted in paragraph 6 of this judgment clearly indicates that the appellant was intending this sale in favour of the third party. If the intention was to confirm and finalise a contract of sale with the plaintiff-appellant then the word would have been “you” and not “your party”. In the third paragraph again the word “party” occurs. It would be better to quote this paragraph also for it will have a specific bearing, indicating the intention of the parties. This paragraph 3 is as under:—

“Please make a draft of the agreement on the basis of the previous agreement made with respect of the premises No. 7 Nardeo Sastri Marg purchased by Chandraprakashji and yourself from the Mission submit it to Sri R.K Sinha who will examine it and suggest alterations and additions. Last draft contained some omissions and additions not liked by him. This time the Supreme Court having given its verdict, some changes are surely called for. I may go there by the end of the month or in the beginning of next month and finalise the agreement which shall be signed jointly both by the party and myself when the same is approved by Sri R.K Sinha, Advocate. According to the procedure of our organization we go by the advice of technical experts.”

11. In this paragraph respondent No. 2 has clearly stated that after the draft of agreement has been approved by Sri R.K Sinha then it was to be finalised by the party and the respondent No. 2. If the appellant was negotiating then here again, the word “you” would have been present and not the word “party”. By stating “and finalized agreement which shall be signed jointly both by the party and myself when the same is approved….” the respondent No. 2 had communicated to the appellant that the agreement was to be finalised with the party whose name has not been disclosed and the respondent No. 2.

12. The second and third paragraph indicate that the intention was to finalize the agreement only after the Advocate of Ram Krishna Mission Sri R.K Sinha had approved the draft of agreement. Respondent No. 2 had made it clear to the appellant that in the last agreement there were some alterations, omission and addition which was not liked by the learned Advocate. Respondent No. 2 had also made it clear that in view of the judgment of Supreme Court in the matter of litigation between the Mission and third person some changes were called for in the draft agreement. The last sentence in the third paragraph is very important. Respondent No. 2 had made it clear to the appellant that this time the respondents 1 and 2 were not going to take a risk and shall act on the technical advice of their advocate Sri R.K Sinha for according to the procedure of Ram Krishna Mission they always go by the advice of technical experts.

13. The learned counsel for appellant tried to show by making a parawise comparison of the previous agreement Ext. 3 with the alleged draft agreement prepared by the appellant which is paper No. 61 B. This 61 B has not been exhibited by the lower court. The learned counsel for the plaintiff-appellant pointed out that they have proved this document in the lower court by stating that it was prepared by them and taken to Sri R.K Sinha, Advocate for examination. There is no cross-examination regarding this draft except denial that it was never taken to Sri Sinha. Hence we mark it Ext. 21. It was urged that as there was no substantial change suggested in the draft the finalization of draft was not at all a condition precedent for the finalization of the contract. This contention is not made out from the circumstances and evidence of respondent No. 2. The respondent No. 2 was moving in a very cautious manner in this case for in a previous sale some error had occurred in the agreement for sale. When viewed with this angle it, becomes amply clear that the intention disclosed in Ext. 1 was to finalise the contract only after Sri R.K Sinha had approved the draft agreement. The Advocate of respondent No. 2 had not approved the draft. Therefore, there was bound to be a similarity in the text of Exts. 21 and 3.

14. The above discussion shows that Ext. 1 does not disclose any finality of contract between the parties. On the other hand it discloses three facts firstly; that the appellant was negotiating on behalf of third person, secondly; that the terms and conditions were to be approved by the Head Quarter of Mission and that too after their Advocate had approved the draft agreement, thirdly; that after the above procedure was complete the terms was to be finalised between the “party” and the Mission. Thus Ext. 1 does not disclose a finality of contract.

15. The matter has to be looked into from another angle also. S. 54 of the Transfer of Property Act defines the contract for sale of an immovable property. This part of section reads as under:—

“Contract of sale.—A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.

It does not, of itself, create any interest in or charge on such property.”

16. The above definition includes the settlement of the terms between the parties as one of the essentials for completion of a contract. The case laws cited by the learned counsel for the appellant are not of much help to him. They are distinguishable on facts. In Jawahar Lal Burman v. Union of India. AIR 1962 SC 378 : 1962 All LJ 411 the dispute related to a tender for supply of oil subject to condition of contract. In this case in response to an advertisement of the respondent the appellant Jawahar Lal had submitted a tender for supply of required quantity of coconut oil. One of the condition was that the tenderer shall furnish required security deposit. The appellant had failed to furnish security deposit. The Supreme Court held that the condition of furnishing security was a condition subsequent and not a condition precedent to the contract. On reading the letter of acceptance by the respondent which contained the information to the tenderer that his tender was accepted subject to his deposit 10% as security. The Supreme Court had interpreted this letter and came to the conclusion that in the later part of the letter the intention was indicated that contract stood concluded. In this case as we have seen above the case of the appellant stand on almost on different footing. Hence the aforesaid case law cannot be applied in this matter.

17. The case of Kallipara Sriramulu v. T. Aswasth Narayana Supra related to an oral agreement between the parties. There was a dispute regarding the dissolution of firm. He had alleged that all partner of the firm except appellant had entered into oral agreement with him to sell 137 shares in the immovable property in dispute and in pursuance of the agreement, partners who owned 98 shares had executed a sale deed in favour of the appellant. Hence a prayer for specific performance of contract had been made. In this case there was no reference to a future act between the parties regarding conclusion of a contract. The oral agreement even though there was reference for execution of a formal contract was held to be binding bargain between the parties.

18. In Kallipara's case the broad principle enunciated was as to how the documents or letters disclosing a contract between the parties were to be interpreted. At this place it would be appropriate to refer the case in Now Mofussil Co. Ltd. v. Shanker Lal Narayandas Mundade, AIR 1941 Bombay 247 cited by learned counsel for the respondent. Learned counsel for the respondent had submitted that whether there was a condition that settlement of some more conditions was to be settled through lawyer, then in such a case the contract is not complete unless the terms of the contract are settled by the lawyer and agreement as contemplated is drawn and signed. It has been argued that this is exactly the case in the facts of this appeal before us. In this case, the Bombay High Court (DB) had referred to some of the English case Laws in its judgment at pages 253 and 254. It would be better to quote whole of it:

“In Halsbury, Vol. xxix, p. 237, paragraphs 321 and 322:

An acceptance must be absolute and unqualified. There is no completed contract if the acceptance is ‘subject to approval of terms of contract;’ or ‘subject to a formal contract being prepared and signed by both parties as approved by their solicitors; ‘or simply ‘subject to contract;’ or where it otherwise appears that all the terms of the contract are not definitely settled or that additional terms are to be agreed to and inserted in the formal contract. On the other hand, if it appears that the parties have agreed upon the essential terms of the sale, a mere intimation of a desire that the agreement shall be embodied in another document of a more formal nature, or the expression of what is necessarily a condition, not of the acceptance, but of the contract itself, does not prevent the agreement being enforceable. It is a question of construction whether the parties have come to a final agreement, though they intend to have a more formal document drawn up.

I may also refer to Dart, Vender and Purchaser, 8th Edn. p. 227. Before referring to the cases I may point out that the law is the same in India as in England 50 IA 25 : 10 AIR 1923 PC 47 : 71 IC 763 : Harichand Mancharam v. Govind Laxman, and 60 IA 297 : 20 AIR 1933 PC 29 : 141 IC 209, Currimbhoy & Co. Ltd. v. Creet. The earliest important case on the subject is (1877) 7 Ch D 29 : 47 LJ Ch 139 : 26 WR 230. Winn v. Bull. In that case there was a lease by written agreement of a house for a certain term at a certain rent “subject to the preparation and approval of a formal contract.” No other contract was in fact entered into by the parties and it was held that there was no final agreement which could be enforced. Sir George Jessel M.R said (p. 30):

I am of opinion that there is no contract. I take it the principle is clear. If in the case of a proposed sale or lease of an estate two persons agree to all the terms and say: ‘We will have the terms put into form,’ then all the terms being put into writing and agreed to, there is a contract.

If two persons agree in writing that upto a certain point the terms shall be the terms of the contract, but that the minor terms shall be submitted to a solicitor, and shall be such as are approved of by him, then there is no contract, because all the terms have not been settled.

Further on, in his judgment he said (p. 32):

It comes, therefore, to this, that where you have a proposal or agreement made in writing expressed to be subject to a formal contract being prepared, it means what it says; it is subject to and is dependent upon a formal contract being prepared. When it is not expressly stated to be subject to a formal contract it becomes a question of construction, whether the parties intended that the terms agreed on should merely be put into form, or whether they should be subject to a new agreement the terms of which are not expressed in detail.

These latter observations show that the decision did not turn on the fact that the stipulation about a formal contract was express. (1877) 7 Ch D 29 was approved by Parker J., afterwards Lord Parker, in (1912) 1 Ch 284 : 81 LJ Ch 184 : 105 LT 434, Von Hatzfeldt Wildenburg v. Alexander. In the course of his judgment his Lordship said (p. 288):

It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution or a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is binding contract and the reference to the mere formal document may be ignored.

These observations have become classic and have been cited with approval in (1921) 1 CH 57 : 90 LJ Ch 204 : 124 LT 294 : 65 SJ 59 : 37 TLR 45, Rossdale v. Denny and in many other cases.”

19. The cases mentioned in 1941 judgment have also been referred to the AIR 1968 SC 1031. In AIR 1968 SC 1031 (Sic) the case of Rossiter v. Miller, (1878) 3 AC 1124 was also relied upon wherein Lord Cairns said; “if you find not an unqualified acceptance subject to the condition that an agreement is to be prepared and agreed upon between the parties, and until that condition is fulfilled no contract is to arise then you cannot find a concluded contract.” In Currimbhoy and Co. Ltd. v. Creet (supra) the judicial committee had expressed the view that the English Law which is summarised in the judgment of Parker, J. was applicable to India. Thus it is now well settled that where the letter of acceptance referred to a future negotiation for finalisation of more terms of contract then there is no concluded contract between parties.

20. It was pointed by learned counsel for the appellant that in AIR 1971 SC 242 (Sic) some of the terms had not been settled. It was held to be a concluded contract. In this case one of the contracting party had not indicated that some terms were to be settled after further negotiations. It is not applicable on fact.

21. The next case law cited by the appellant is Dr. Jiwan Lal v. Brij Mohan Mehra, (1972) 2 SCC 757 : AIR 1973 SC p. 559 was based on different facts. In this case there was agreement to sell the premises in suit for a certain agreed amount. Prospective vendees had paid Rs. 10,000/- as earnest money. A clause was entered that the sale was to be executed within certain stipulated time. In these circumstances it was held that there was a concluded contract. This case law is, therefore, not applicable to the facts of the present matter in dispute.

22. Thus from the above discussions we come to the conclusion that there was no concluded contract between the parties. Actually the appellant was not a contracting party. He was acting on behalf of third person. Hence unless the third person had agreed to the terms and condition as stated in Ext. 1 there could be no contract at all. The lower court has rightly decided this point. Hence the first point fails.

23. The second point raised from one side of the appellant relates to the question of limitation. It has been urged that appellant had filed the suit within the limitation and the findings of the lower court was not based on any conclusion as to on which date the respondent had refused to execute the sale deed.

24. Art. 54 of Limitation Act applies to this case. According to it, the limitation for suit for specific performance is three years from the date fixed for the performance of the contract or if no such date is fixed when the plaintiff has notice that performance has been refused. According to the plaintiff-appellant, no date had been fixed for the performance of the alleged contract. In Ext. 1 relied upon by the plaintiff-appellant, there is no date of performance of the contract. Hence the latter part of the Article will apply in this case for computing the limitation.

25. The question arises as to when the appellant had information of the intention of respondents 1 and 2 that they had refused to perform the contract. The learned Civil Judge has mentioned several dates in his judgment showing that the appellant had information from 29-6-76 onwards when respondents 1 and 2 were not intending to execute a sale-deed in favour of the appellant. The plaintiff had averred in para 8 of his plaint that Sri R.K Sinha, Advocate had replied to his notice stating that no contract had been arrived at between the parties. It was stated that this was the starting point of his knowledge when defendants 1 and 2 had indicated their refusal to execute a sale deed.

26. The respondents' counsel, Sri R.K Sinha, Advocate had sent a notice to the appellant on 20-9-76 indicating to the appellant that there was no concluded contract between the parties. Hence by this date 20-9-76, the defendants had disclosed their intention they are not going to execute a sale-deed. This reply of Sri R.K Sinha was in response to the letters dated 4-9-1976 and 6-9-1976 of the appellant. The appellant has filed only the letter dated 4-9-1976 which is Ext. 4. He has not filed the letter dated 6-9-1976 addressed to respondent No. 2. This letter ought to have been filed. Ext. 9, the letter dated 20-9-1976 of Sri R.K Sinha, Advocate refers to the letter dated 6-9-1976 of appellant. The plaintiff has withheld this letter. A presumption should be raised against the appellant that had he produced this letter, then it would have been evident that by 6-9-1976 he had information that respondents 1 and 2 were not intending to execute a sale-deed.

27. The above conclusion can be drawn on the basis of another fact on record. The appellant had furnished a bail bond in a case u/Ss. 107/116, Cr. P.C in the court of City Magistrate, Dehradun on 6-9-1976. This case was started by Sadhu Ram respondent No. 3. This Sadhu Ram was allegedly negotiating the sale of the property with respondents 1 and 2 for respondents 3 to 6. This, therefore, reveals that on 6-9-1976, the appellant must have written some sort of pungent letter accusing respondent No. 2 of involving him in all these criminal proceedings when he had already (according to him) entered into and finalised a contract for sale. Therefore, it is obvious that by 6-9-1976 the plaintiff had sufficient notice that the defendants were not intending to execute a sale-deed in favour of the plaintiff. Under these circumstances, 6-9-1976 would be the date for start of the limitation. The suit was obviously filed after the lapse of three years. It was beyond limitation. The second point raised by learned counsel for the appellant is not tenable and fails.

28. The next and last contention was regarding bona fides of defendants 3 to 6 in purchasing the property without notice of the contract. Since we have held that no contract had been finalised between the appellant and respondents 1 and 2, then defendants 3 to 6 will obviously be purchasers without notice of this contract. It has not been disputed that they had paid the consideration of sale to respondents 1 and 2. Under these circumstances, there is no necessity of considering this aspect of the arguments of learned counsel for the appellant. This point too fails.

29. No other point has been pressed.

30. The appeal is, therefore, dismissed with costs to the respondents.

31. Appeal dismissed.