Lalit
Kumar Jain & Anr Vs. Jaipur Traders Corporation Pvt. Ltd. [2002] Insc 210 (24 April 2002)
R.P.
Sethi & P. Venkatarama Reddi P.Venkatarama Reddi, J.
By the
impugned judgment, the High Court at Allahabad allowed the first appeal filed
by the respondent-plaintiff, decreed the suit and ordered that the plaintiff
should be put in physical possession of the suit properties and the indenture
(sale deed) dated 22.2.1971 should be deemed to be void and cancelled and
therefore be delivered up to the plaintiff-vendor. A decree was also granted
for a sum of Rs.95,000/- being the value of properties wrongfully demolished
and sold, after adjustment of Rs.55,000/- received by the plaintiff towards the
sale consideration. The suit was ostensibly filed under Section 31 of the
Specific Relief Act for cancellation of indenture dated 22.2.1971 and also for
physical possession of the property in dispute and for recovery of Rs.95,000/-
being the value of property wrongfully demolished after adjusting an amount of
Rs.55,000/-.
The
Trial Court dismissed the suit. At the same time, it granted a decree in favour
of the plaintiff for a sum of Rs.1,45,000/- representing the balance sale
consideration.
The
facts giving rise to the suit and the appeal are these :
The
plaintiff-Company executed a sale deed on 22.2.1971 in favour of the defendants
in respect of an oil mill located at Khurja in UP State with the structures,
open land, machinery and fixtures, lease- hold rights in the land etc. for a
consideration of Rs.2 lakhs. A sum of Rs.50,000/- was to be paid before the
Sub-Registrar at the time of registration and it was stipulated in the sale
deed that the balance amount will be paid in two instalments falling on
15.3.1971 and 30.4.1971. It was further stipulated that the transferee shall
not be entitled to deal with, sell, transfer or assign the property sold, till
such time as the entire balance sale price of Rs.1.50 lakhs was paid to the
transferor. A sum of Rs.50,000/- was accordingly paid to the transferor on the
date of registration. Possession was admittedly handed over to the defendants.
The respondent-plaintiff produced the income tax clearance certificate on the
date of registration i.e. 22.2.1971. However, before the formalities of
registration viz., copying out the deed was completed, the Sub-Registrar
received a communication from the Income Tax Officer that the I.T.C. was
cancelled and therefore the Sub-Registrar should stop registration of the
property till a fresh certificate was issued by him. Therefore, the Sub-Registrar
did not take further steps in the matter. Moreover, the sale deed was impounded
on the ground of insufficient stamp and it was sent to the District Registrar
for adjudication. By an order dated 4.1.1972, the Income Tax Officer revoked
his earlier order and restored the certificate issued by him earlier. On appeal
by plaintiff, the Commissioner of Income Tax directed the Income Tax Officer to
issue a fresh I.T.C. instead of validating the earlier one. On 13.6.1972, a
fresh I.T.C. was issued. The document which was sent for assessment of
deficient stamp duty was received back by the Sub- Registrar on 3.5.1973. When
there was a notice from the Sub- Registrar in August 1973 to furnish the I.T.C.
for the purpose of registration, the plaintiff in its reply dt. 28.8.1973
maintained that the document was no longer effective as the contract stood
rescinded on account of the breach committed by the defendants in declining
payment of balance sale price. Sub-Registrar was requested to return the
document without registration. The Sub-Registrar, by his order dated 19.9.1973,
refused to register the document as ITC was not produced. An appeal was filed
against the said order by the appellants-defendants before the District
Registrar. On 16.10.1973 the appellants also filed a civil suit impleading the
respondent, Sub- Registrar and also the I.T.O. for a direction that I.T.C.
should be issued and the Sub-Registrar should register the sale deed. On
3.7.1976, the suit out of which the present appeal arises was filed seeking the
relieves as stated above. In that suit, a disclosure was made as to obtaining
the fresh I.T.C. On 24.12.1976, the District Registrar allowed the appeal and
directed the Sub-Registrar to register the sale deed. In view of this
subsequent event, the Income Tax Officer also sent a copy of I.T. clearance
certificate to the Sub- Registrar. The formalities of registration of sale deed
were then completed on 28.12.1976. The suit filed by the appellants therefore
became infructuous. The appellants amended the plaint in the present suit
questioning the legality of the order of Dy.Registrar and the consequential
action of Sub-Registrar in registering the sale deed.
On
27.08.1979, offer was made to pay the balance consideration by issuing a notice
but the respondent refused to accept payment taking the stand that the matter
was sub-judice. The suit in question was dismissed on 2.5.1980 subject to the
direction as to the payment of balance of sale money. The money was deposited
in court thereafter.
The
first appeal to the High Court filed by the respondent herein was allowed by
the impugned judgment dated 5.7.1996.
It is
now necessary to advert to certain other events that happened between the date
of presentation of sale deed for registration and the date of filing of the
suit including the exchange of correspondence. On 16.3.1971, plaintiff issued
notice to defendants to pay Rs.50,000/- towards the first instalment specified
in the indenture of sale. The defendants expressed their willingness to pay the
amount provided that the plaintiff obtained a fresh ITC. On 12.1.1972, a second
notice was issued from the plaintiff's side informing the defendants that they
have illegally withheld the payment due under the terms of sale for which they
were liable to pay interest and further protesting against the demolition of
portions of building and sheds and disposing of the building material and
machinery. This was replied to by the defendants stating that in the absence of
valid Income Tax Clearance Certificate the sale deed could not be delivered
after due registration and therefore they were not liable to pay the balance
sale price. Moreover, the defendants referred to the fact that one of the
Directors of the plaintiff-Company by name Raj Kumar Meattle agreed not to
demand the balance unless the fresh clearance certificate was obtained and
other formalities connected to the sale were fulfilled. The alleged settlement
took place on 17.1.1972 on which date a sum of Rs.5,000 was paid to the said
Director. One more fact, which according to the defendants justified the
withholding of payment, was the suit filed by one Seth Shanti Lal questioning
the validity of the sale. In the concluding para it is stated : "I would
request you not to stick to your unreasonable demand for the balance money and
let the clear picture emerge". I again assure you that the balance will be
paid the moment these formalities are complied". A third notice was issued
by the plaintiff on 25.5.1973.
By
that time it may be noted that a fresh ITC was issued to the plaintiff and the
document which was impounded for assessment of deficient duty was received back
in the office of the Sub-Registrar, Khurja. By the notice dated 25.5.1973, the
plaintiff found fault with the defendants in declining payment of balance money
on the ground of cancellation of ITC and alleged that the defendants committed
breach of contract by wrongfully withholding the payment and also demolishing
and dealing with the property quite contrary to the prohibition contained in
the sale deed. The plaintiff then gave last opportunity 'to make the balance
sale price together with interest at the rate of one per cent per month within
a period of 15 days upon which the requisite certificate under Section 230-A of
the Income Tax Act will be produced'. The defendants were further warned that
in case of failure to make the payment, the contract of sale dated 22.2.1971
will stand rescinded and the defendants will be liable to restore the
possession of all the properties covered by the sale deed and to compensate the
plaintiff for the damage done to the properties.
The
defendants sent a reply reiterating that there was a clear agreement on
17.6.1971 arrived at on the intervention of plaintiff's Director Shri Raj Kumar
Meattle and the payment of Rs.5,000/- made pursuant to such agreement. The
defendants once again referred to the suit filed by Seth Shanti Lal Jain impleading
both the plaintiff and the defendants. The defendants also called upon the
plaintiff to bear the amount of Rs.2,980/- on account of extra stamp expenses.
In the concluding para it is stated, "I hope you will wait for the payment
till the formalities are completed and the suit of Seth Shanti Lal is decided
finally". A month later, i.e. on 3.7.1973, the 4th and final notice came
to be issued by the plaintiff. In that notice it was stated that Shri Raj Kumar
Meattle had no authority to give any assurance or make any commitment on behalf
of the plaintiff-Company, that too without any resolution of the Board of
Directors. The plaintiff offered to give credit to the additional stamp duty
said to have been paid by the defendants of Rs.2,980/-. The defendants were
then informed of the dismissal of the suit filed by Shanti Lal Jain for
default.
Moreover,
the plaintiff took the stand that the suit of Shanti Lal Jain was a frivolous
suit and that the pendency of the suit ought not to be a ground to withhold the
payment. The plaintiff was even willing to waive the claim for interest and
handover the requisite certificate under Section 230-A of the Income Tax Act,
provided that balance consideration of Rs.1.50 lakhs subject to adjustment of
Rs.5,000 and the excess stamp duty, was paid to it within 15 days. The
defendants were warned that if they failed to make the payment as aforesaid
within the stipulated time which is of essence, the contract of sale dated
22.2.1971 shall stand rescinded in which case the defendants will have to
restore all the properties to it within 15 days thereafter.
On
19.7.1973, the defendants sent a reply through their lawyers wherein it was
asserted that the plaintiff was legally bound to complete the formalities
pertaining to registration and to deliver the sale deed before they could ask
for the balance sale money. Further, the plaintiff was notified that the demand
of balance money even before the suit of Seth Shanti Lal was finally decided,
was unjustified.
An
assurance was given that the entire balance amount will be paid when all the
formalities are completed and the title was proved in the pending litigation.
The plaintiff was called upon to produce the ITC before 3.9.1973 as per the
requisition made by the Sub-Registrar.
Thereafter,
the plaintiff sent a letter on 28.8.1973 to the Sub-Registrar stating that the
defendants committed breach of contract of sale and therefore, the contract
stood rescinded. The Sub-Registrar was informed that the document was no longer
effective and the question of registration of that document on the production
of ITC as required in his letter did not arise at all. The Sub-Registrar was
requested to return the document without registration. It appears that the suit
of Seth Shanti Lal Jain which was filed on 7.4.1971 was finally dismissed on
10.4.1978. It was dismissed for default earlier and restored.
The
Trial Court held that the defendants did not commit breach of the contract in
not paying the balance price before the registration of the sale deed and the
plaintiff had no right to rescind the contract.
In
fact, there was no rescission because the plaintiff did not send specific
intimation of rescission of contract with effect from a particular date. The
learned trial Judge further held that the contract was neither voidable nor
terminable by the plaintiff and therefore Section 27 or 31 of the Specific
Relief Act was not attracted.
According
to the trial court, the sale was complete and title passed irrespective of
non-payment of balance sale price. The following were the circumstances relied
upon by the Trial Court for reaching the conclusion that no breach was
committed by the defendants and the plaintiff was not entitled to put an end to
the contract are :-
1. The
plaintiff got the I.T.C. cancelled by setting up his relative by name Shri R.K.
Meattle to file a complaint;
2.
After the certificate was restored on 4.1.1972, the plaintiff instead of filing
the order of I.T.O., challenged that order on the ground that fresh certificate
should have been issued, for which there was no bona fides on the part of the
plaintiff.
Moreover,
the factum of restoration or issuance of fresh clearance certificate was not
intimated to the Sub-Registrar;
3. The
plaintiff having knowledge of the fact that the document has not been
registered for want of I.T.C. was not justified in making demand for payment of
balance money;
4. On
the intervention of Shri R.K. Meattle one of the Directors of the
plaintiff-Company, a binding agreement came into being according to which the
terms of the contract as to the payment of balance money got altered. The
undertaking given by Shri R.K. Meattle on 17.8.1971 was binding on the plaintiff
and in fact the plaintiff acted according to that undertaking by not demanding
the payment for about a year; and
5. On
account of the suit filed by Seth Shanti Lal Jain in the year 1971 claiming to
be the co-owner of the properties, there was a bona fide doubt in the mind of
the defendants as regards title and that is the reason why a commitment was
made by the plaintiff through its Director, Shri R.K. Meattle.
6. In
the circumstances of the case the time for payment stipulated in the sale deed
cannot be regarded as the essence of the contract.
The
learned trial Judge observed thus :- "In fact, it was a breach of the
contract from the side of the plaintiff, who deliberately did not manage the
affairs in such a way that the clearance certificate may be produced before the
Sub Registrar, Khurja, at an earliest and the registration of the document
could be completed. It appears to me that the plaintiff was only interested in
the payment of balance sale consideration of Rs. One lac fifty thousand and he
was not interested in the registration of the document. The circumstances and
conduct of the plaintiff are as such which go against the plaintiff and show
that it was the plaintiff on whose account the document could not be
registered. The non payment on the stipulated dates by the defendants was
justifiable because the time was not the essence of the contract." The
High Court was of the view that under the contract title to the property would
pass only on the payment of the entire sale consideration, that the Trial Court
committed an error of law by holding that time was not essence of the contract
and title had passed even before the payment of balance money. The High Court
then observed that Section 47 of the Registration Act does not come to the aid
of the defendants because the contract was terminated for valid reason before
the document was registered. Referring to the suit of Seth Shanti Lal jain, the
High Court observed that the defendants having enjoyed property after taking
possession should have made the payment first and sue the plaintiff for
indemnification, if necessary.
Referring
to the alleged agreement entered into between Shri R.K. Meattle and the
defendants, the High Court observed that the alleged agreement was not
believable. The High Court then observed that the appellant should have made
the payment at least after the final notice sent in July, 1973, wherein it was
mentioned that I.T.C. was procured and the sale deed could be got registered on
payment of balance money. The High Court was therefore of the view that the
defendants failed to fulfil the contractual obligation on their part and
therefore the contract was voidable and could be repudiated by the plaintiff.
The appeal was therefore allowed and the suit was decreed.
It is
the contention of the appellants that the requirements of either Section 31 or
27 are not attracted to the present case and therefore the suit itself is
misconceived. It is contended that the rescission of executed contract on
account of non-payment of balance sale consideration does not arise as the
title passed to the appellants with the registration of document and delivery
of possession. Though the formalities of registration were completed on
24.12.1976, the registration, by virtue of Section 47 of Indian Registration
Act must be deemed to have related back to the date the sale deed was executed
i.e. 22.2.1971. Therefore, the so-called rescission for the alleged breach of
the terms of the contract subsequent to its execution has no legal sanctity.
The only remedy of the plaintiff was to recover the balance sale price for
which a statutory charge is provided in respect of the property. It is pointed
out that the view taken by the High Court that the payment of balance money on
the stipulated dates was a condition precedent for passing the title is
erroneous in law. The restriction against sale, transfer or assignment offends
Section 10 of the Property Act; moreover, such a condition does not detract
from the irrevocable nature of sale transaction. It is submitted that the
contract is neither voidable nor terminable by the plaintiff and therefore the
conditions requisite for seeking relief under Section 27 or 31 of the Specific
Relief Act are not attracted. The plaintiff could not unilaterally put an end
to the contract under Section 39 of the Contract Act on the ground that the
defendants refused to perform the promise to pay the balance money within the
stipulated time as Section 39 is wholly inapplicable to the contract which was
complete and which had been acted upon. In any case, it is submitted that there
was no breach of the contractual terms by the appellant and there was ample
justification for non-payment of balance sale price within the time stipulated
in the sale deed or in the notice issued by the plaintiff.
Reliance
in this connection is based on the findings of the Trial Court.
On the
other hand, it is contended on behalf of the respondents (defendants) that
there was no general rule that mere registration of the document without
reference to other circumstances would operate to transfer the title. The
clause in the sale deed prohibiting transfer or assignment by the vendor till
the balance money was paid spells out an intention to make the passing of title
conditional on payment thereof. In any case, it is submitted that the plaintiff
was well justified in rescinding the contract in the year 1973 before the
actual registration of the document and therefore the registration does not
impart any sanctity to the purported sale. Section 47 of the Registration Act has
no application in this fact situation and the theory of dating back cannot be
invoked by the defendants. The refusal to pay the balance sale consideration on
the ground of pendency of suit of Seth Shanti Lal and the alleged agreement
with one of the Directors of the plaintiff-Company is wholly untenable and
amounts to refusal to perform the contract within the meaning of Section 39 of
the Contract Act. The contract, it is submitted, is voidable on account of
persistent refusal by the defendants to pay the balance sale consideration even
after the notice was given by the plaintiff making the time the essence of
contract. Having thus clarified the legal position, the learned senior counsel
for the respondents have taken us through the correspondence and the findings
of the High Court in support of his argument that the plaintiff was amply
justified in putting an end to the contract when it became apparent that the
defendants were in no mood to fulfil the essential promise under the contract.
Finally, the learned senior counsel contended that the conduct of the
defendants was most reprehensible. Having taken possession and started enjoying
the property soon after the execution of the sale deed and even gone to the
extent of demolishing the structures, failed to pay the balance money. On these
grounds, the judgment under appeal is sought to be supported by the learned
counsel for the respondents.
We are
of the view that the High Court failed to address itself to certain crucial
factors which disentitles the plaintiff to equitable relief.
The
High Court reversed a well considered judgment of trial Court without adverting
to the reasoning of trial Court except in a cursory manner. In the view we are
taking, it is not necessary for us to dilate on various legal issues debated
before us. We shall proceed on the basis that in law the plaintiff could annul
the contract of sale before the act of registration got completed and title
passed to the appellants.
We
shall further assume that the plaintiff in fact rescinded the contract with
effect from the date of expiry of the time stipulated in the 4th and final
notice dated 3.7.1973. If such rescission or termination of contract is not
justifiable on facts or having regard to the conduct of the plaintiff, the
equitable relief under Section 27 or 31 of the Specific Relief Act has to be
denied to the plaintiff, no further question arises for consideration. In such
a case, the appellants' plea has to be accepted and the suit is liable to be
dismissed.
Before
we proceed further, we would like to make it clear that it is not our endevour
to re-appreciate the evidence on record and to disturb the findings of fact,
had they been arrived at on a consideration of all the relevant matters and the
evidence on record.
Let us
now take stock of those relevant and important aspects. The first aspect which
needs to be adverted to is the conduct of the plaintiff vis--vis the production
of Income Tax clearance certificate.
On a
petition filed by the nephew of one of the Directors of plaintiff- Company, the
ITC was cancelled when the document was about to be registered. This fact was
admitted by Shri B.D. Meattle, Director of the plaintiff-Company, who was
examined as a witness for the plaintiff. The finding of the trial Court is that
the complaint was filed at the instance of the plaintiff. This part of the
finding of the trial Court is based on probabilities, though not positive
evidence, coupled with the fact that the circumstances in which the nephew
filed the petition were not explained by the plaintiff's witness. The second
aspect which evoked adverse comments of the trial Court is the fact that after
the ITC was restored by the Income Tax Officer, the plaintiff challenged the
order of the ITO contending that it was an illegal order and a fresh certificate
should have been issued. This move on the part of the plaintiff was evidently
meant to delay the process of registration and casts any amount of doubt on the
bona fides of plaintiff. Moreover, even after obtaining a fresh certificate
pursuant to the order passed by the higher authority, the plaintiff did not
make the defendants or the Sub-Registrar aware of this fact for more than a
year. It was only in the letter dated 3.7.1973, an indication was given that
the certificate under Section 230(A) of Income Tax Act was available. What is
more surprising is that the plaintiff returned the certificate to Income Tax
Office on 10.9.1974 (vide paras 34 and 35 of trial Court's judgment). These
facts noticed and commented upon by the Trial Court were not at all adverted to
by the High Court. The plaintiff cannot on the one hand withhold the production
of I.T.C. which was essential for registration and on the other hand take the
stand that the defendants committed breach of contract.
The
other important aspect which did not receive due consideration from the High
Court is the agreement or understanding arrived at between the Director of the
plaintiff-Company - Shri R.K. Meattle and the defendants on 12.8.1971. By that
time, a suit was filed by one Shri Shanti Lal Jain claiming rights over the
suit schedule property. The plaintiff and the defendants in the present suit
were also impleaded therein. At that juncture, informal agreement was reached.
Tfhoellaogwrse:e-ment
couched in the form of a letter reads as Dear Sir, Yesterday Shri R.K. Meattle,
a Director of your firm came to us and requested to pay a sum of Rs.5,000/-
against the arrears of the sale deed executed by your firm in our favour for
the expenses to get the dispute decided so that formality of sale deed may be
completed soon with the assurance that your firm will not claim further any
amount, out of arrears till all the formalities are finally completed.
Yours
faithfully (Raj Kr. Poddar) (Lalit Kumar Jain, Khurja) Yes, this is our
proposal and our firm agrees on this settlement (Sd) 12.8.1971 Director For Jaipur
Trading Corp. (P) Ltd.
The
commitment made in this letter was construed by the trial Court as a change in
the terms of the contract by reason of which the demand for the payment of
balance sale consideration was deferred till all the formalities were completed
and the litigation was settled.
The
contention that Shri R.K. Meattle acted without authority and therefore the
commitment made by him was not binding on the plaintiff-Company was not accepted
by the Trial Court. The High Court reversed this finding on the ground that no
prudent person would agree to such arrangement which had the effect of
postponing the demand of balance sale price till the dispute was settled and/or
the formalities of registration were completed. The High Court observed that in
the absence of proper authorisation by the Company, the alleged undertaking was
not believable. Whether the alleged agreement is true and binding is no doubt
primarily a question of fact.
But
for the fact that the High Court overlooked certain material factors which have
vital bearing in arriving at a finding on this point, this Court would not have
though of probing into a factual aspect.
The
averments in the plaint and the material portion of the deposition of the
plaintiff's witness were not adverted to while reaching a finding in this
regard. In the plaint, the factum of sending Shri R.K. Meattle to the
defendants and Shri R.K. Meattle signing the letter are admitted. But, what is
stated in the plaint is that Shri Meattle was not authorised to do so. When we
come to the deposition of Shri B.D. Meattle examined as P.W.1, a version was
put forward that the letter was got forcibly written by the defendants. If that
is so, and if the private limited company having two Directors at the relevant
point of time (R.K. Meattle and B.N. Ahuja) did not approve of the action of
R.K. Meattle, why did the plaintiff keep silent for nearly two years without
questioning the authority of Shri Meattle? This question remained practically
un-answered. Shri B.D. Meattle merely stated that the defendants had no money
and therefore they sought time. It is needless to say that this explanation is
vague and irrelevant. Another important fact is that the bank draft for the amount
of Rs.5,000/- received from the defendants was not returned and it is not the
case of the plaintiff that the draft was not credited to their account. When Shri
B.D. Meattle (P.W.1) was confronted with this fact, he came forward with a
peculiar explanation that the relationship was not so much strained and
therefore the bank draft was not returned. If at all, this is a factor which
goes in favour of the defendants rather than the plaintiff. All this would show
that the plaintiff consciously agreed to honour the understanding arrived at
between the Director of the Company Shri R.K. Meattle and the defendants which
was reduced into writing in the form of a letter. If that agreement is true and
binding, as has been held by the Trial Court, the plaintiff could not have
rescinded the contract in September 1973, despite the fact that the suit filed
by Seth Shanti Lal Jain was pending and the formalities requisite for
completion of registration were not completed. It may be an imprudent act on
the part of Shri R.K. Meattle, going by the tenor of arrangement, but, in the
absence of any allegations of collusion and mis-representation, the Court
cannot disregard the agreement embodied in the letter dated 12.8.1971 which was
believed by the trial Court. We are, therefore, of the view that reversal by
the High Court of the trial Court's finding on this aspect is unwarranted and
as already noted, is vitiated by non-consideration of the relevant material on
record. This Court has, therefore, no option but to disturb the factual finding
reached by the High Court.
One
more fact which disentitles the plaintiff to the equitable relief under Section
27/31 of the Specific Relief Act is the un- explained delay in filing the suit
after the exchange of notices in September 1973. Almost three years later, the
suit was filed. This inaction has its own revelation. Either the plaintiff did
not stand by his declaration to rescind the contract, as held by the trial
Court, or the plaintiff was sitting on the fence and waiting to see whether the
turn of events would be to his advantage or disadvantage.
If the
above facts and circumstances are cumulatively considered, the plaintiff has no
legitimate ground to seek the equitable remedy. While these are the factors
that can be put against the plaintiff, the defendants-appellants are not free
from blame. We cannot lose sight of the fact that their conduct is also open to
question.
The
defendants, in the initial stages, insisted on income-tax clearance
certificate. When the defendants were informed of the readiness of the
plaintiff to hand over the ITC subject to payment of balance money within 15
days, the defendants then raised the plea of pendency of the suit of Seth Shanti
Lal which was by then dismissed for default. The factum of dismissal of suit
was intimated to the defendants through the notice dated 3.7.1973, though the
suit was subsequently restored and was finally dismissed in the year 1978. The
fact remains that the defendants who, in the initial stages, were prepared to
pay the balance sale price on receipt of ITC, for reasons best known to them,
dodged to make the payment on the ground of pendency of suit. Though this
conduct on the part of the defendants is not above board, the conduct of the
plaintiff, who has sought equitable remedy, should be kept uppermost in the
mind of the Court. The plaintiff seeking equitable remedy cannot approach the
Court with unclean hands or be guilty of laches. Irrespective of the conduct of
the defendants we must hold that the plaintiff has, for various reasons
discussed above, disentitled himself to the relief of cancellation of
instrument and for recovery of possession from the defendants that too after
the property was substantially developed.
The
result of the foregoing discussion is that the suit is liable to be dismissed
and it has been rightly dismissed by the trial Court.
However,
in view of the fact that the defendants are not free from blame as discussed
above and they have utilised the property to the best of their advantage right
from day one without, at the same time, paying the balance sale price for
several years we put it to the counsel for the appellants whether they are
willing to pay to the plaintiff a substantial amount over and above the sale
price already deposited in the Court, in order to do justice to the parties. In
fact, in the course of arguments by the learned counsel for the appellants,
there was an indication that the appellants were prepared to offer a reasonable
amount, without prejudice to their contentions. The learned counsel for the
appellants has filed a letter dated 18.04.2002 stating that "the
appellants can pay and agree to pay a further sum of Rs. 35 lacs (Rupees thirty
five lacs) in 3 instalments of Rs. 15 lacs and Rs. 10 lacs and Rs. 10 lacs,"
in three weeks, by the end of August and by the end of November, 2002
respectively. When we suggested to the learned counsel that it would be fair if
some more amount is offered, the learned counsel for the appellants agreed on
behalf of his clients for payment of Rs.40 lacs in lump sum within a period of
six months commencing from today. Having regard to the offer made in the letter
coupled with the oral representation made today and to mete out justice to the
parties, we direct that the undertaking to pay the sum of Rs.40 lacs within six
months should form part of the decree in the suit. This shall be in addition to
the sale price already deposited in the Court. The same shall be deposited in
the Court within a period of six months and the appellants are entitled to
withdraw the same in addition to the amount already deposited.
The
judgment of the High Court is set aside and the appeal is allowed subject to
the direction as given above. With regard to the deposit of the said additional
sum of Rs.40 lacs, the decree of the trial Court shall stand modified
accordingly. Parties are left to bear their own costs.
J.
(R.P. Sethi)
J.
(P.Venkatarama
Reddi) April 24, 2002.
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