{"id":197182,"date":"1998-10-12T00:00:00","date_gmt":"1998-10-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/rameshwar-swarup-dead-by-lrs-vs-smt-saroj-tyagi-and-ors-on-12-october-1998"},"modified":"2017-11-06T17:00:27","modified_gmt":"2017-11-06T11:30:27","slug":"rameshwar-swarup-dead-by-lrs-vs-smt-saroj-tyagi-and-ors-on-12-october-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/rameshwar-swarup-dead-by-lrs-vs-smt-saroj-tyagi-and-ors-on-12-october-1998","title":{"rendered":"Rameshwar Swarup (Dead) By Lrs vs Smt. Saroj Tyagi And Ors on 12 October, 1998"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Rameshwar Swarup (Dead) By Lrs vs Smt. Saroj Tyagi And Ors on 12 October, 1998<\/div>\n<div class=\"doc_bench\">Bench: K. Venkataswami, A.P. Misra<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  3346 of 1981\n\nPETITIONER:\nRAMESHWAR SWARUP (DEAD) BY LRS.\n\nRESPONDENT:\nSMT. SAROJ  TYAGI AND ORS.\n\nDATE OF JUDGMENT: 12\/10\/1998\n\nBENCH:\nK. VENKATASWAMI &amp; A.P. MISRA\n\nJUDGMENT:\n<\/pre>\n<p>JUDGMENT<\/p>\n<p>1998 Supp(2) SCR 312<\/p>\n<p>The Judgment of the Court was delivered by<\/p>\n<p>VENKATASWAMI, J. In spite of service of notice, the respondents remained<br \/>\nunrepresented. Hence, we requested Mr. R. Sundarvardan, learned senior<br \/>\nAdvocate, to assist the Court as Amicus Curiae. The issue that arises for<br \/>\nour consideration out of the judgment dated 22.7.81 of the Allahabad High<br \/>\nCourt in S.A. No. 1103\/73, is ; Can a party (purchaser) to a sale agreement<br \/>\nof a property in Cantonment Area rescind the contract on the ground that<br \/>\nthe permission given by the Military Estate Officer (for short &#8216;MEO&#8217;) was<br \/>\nconditional, when under the contract the purchaser had undertaken to get,<br \/>\nthe permission.\n<\/p>\n<p>Brief facts are as under :-\n<\/p>\n<p>The property in question is a bungalow on Plot Nos. 258 and 258A situated<br \/>\nat old Grant on the Mall Road in the cantonment Area, Meerut. The<br \/>\nappellants (hereinafter called the &#8216;Vendors&#8217;) are the owners of the suit<br \/>\nproperty. The first respondent (hereinafter called the &#8216;Vendee&#8217;) entered<br \/>\ninto an Agreement with the appellants (Vendors) on 3.11.65 for the<br \/>\npurchases of the suit property for consideration of Rs. 70,000. In terms of<br \/>\nthe Agreement, a sum of Rs. 11,000 was paid as earnest money to the Vendors<br \/>\non 11.10.65. The Vendee filed a suit for recovery of the said amount of Rs.<br \/>\n11,000 contending, inter alia, that the understanding was that the Vendors<br \/>\nwould get unconditional permission from the MEO, Meerut, for the transfer;<br \/>\nthat the Vendors have cunningly incorporated in the said Agreement that the<br \/>\npermission from the MEO for the agreed sale shall be obtained by the<br \/>\nVendees; that there were minors among the Vendors and by concealing that<br \/>\nfactor the Agreement was entered into and that there were already<br \/>\nproceedings pending for the resumption of the Suit property. On the basis<br \/>\nof the above allegations, the suit for recovery of the earnest money was<br \/>\nfiled.\n<\/p>\n<p>The Vendors resisted the suit denying each and every one of the ,<br \/>\nallegations in the plaint. According to the Vendors, the express term of<br \/>\nthe Agreement was that it was for the vendee to obtain the permission for<br \/>\ntransfer of the property from the MEO; that there were no minors among the<br \/>\nVendors on the date of the Agreement as alleged; that there were no<br \/>\nproceedings pending for resumption as pleaded in the plaint and that the<br \/>\nVendee was fully aware of the condition that she had to get the permission<br \/>\nfrom the MEO for the sale of the property.\n<\/p>\n<p>The Trial Court, on the basis of the pleadings and evidence, found that the<br \/>\nVendee was entitled to get back the money as the conditional permission<br \/>\ngiven by the MEO would amount to no permission at all and the Vendee was<br \/>\nnot obliged to purchase the property.\n<\/p>\n<p>The Vendors, aggrieved by the judgment and decree of the Trial Courts<br \/>\npreferred an appeal to the Additional District Judge, Meerut, in Civil<br \/>\nAppeal No. 517\/70, The First Appellate Court, on reappreciation of the<br \/>\npleadings and evidence, found that the permission granted by the MEO for<br \/>\nthe transfer of the suit property was not conditional and that the Vendee<br \/>\nwas not entitled to wringle out of the Sale Agreement; that there were no<br \/>\nresumption proceedings pending at the tune of or prior to the Sale<br \/>\nAgreement ; that the Vendee knew that it is for her to get the permission<br \/>\nfrom the MEO and that the amount paid by the Vendee being the earnest money<br \/>\nand she, having committed a default, cannot ask for refund of the said<br \/>\nmoney. On the basis of these findings, the First Appellate Court allowed<br \/>\nthe appeal and dismissed the suit filed by the Vendee.\n<\/p>\n<p>Aggrieved by the judgment and decree of the First Appellate Court, the<br \/>\nVendee preferred a Second Appeal No. 1103 of 1973 before the Allahabad High<br \/>\nCourt.\n<\/p>\n<p>A learned Single Judge of the Allahabad High Court was of the view that the<br \/>\nSecond Appeal could be decided on a single point, namely, whether the<br \/>\nconditional permission given by the MEO would amount to no permission at<br \/>\nall and, therefore, me Vendee was not obliged to go ahead with the Sale<br \/>\nAgreement and consequently she can claim for refund of the earnest money<br \/>\npaid for the purchase of the property. The High Court construed that the<br \/>\npermission given by the MEO being conditional one, would amount to no<br \/>\npermission and, therefore, the Vendee was entitled to rescind the contract<br \/>\nand claim for refund of the earnest money. In that view of the matter, the<br \/>\nHigh Court reversed the judgment of the First Appellate Court and restored<br \/>\nthat of the Trial Court, which decreed the suit filed by the Vendee, The<br \/>\npresent appeal by special leave is filed against the said judgment of the<br \/>\nAllahabad High Court.\n<\/p>\n<p>Mr. P.S. Mishra, learned senior counsel appearing for the appellants<br \/>\n(Vendors), elaborately argued the matter challenging the conclusion of the<br \/>\nHigh Court by referring to the provisions of the contract Act, Transfer of<br \/>\nproperty Act and the Specific Relief Act. He also cited judgments of the If<br \/>\nivy Council and of this Court in support of his contentions. He contended<br \/>\nthat the earnest money, being part of the sale consideration, cannot be<br \/>\nrecovered when the sale transaction fell through at the instance of the<br \/>\nVendee and that &#8216;the conditional permission given by the MEO was not<br \/>\nunusual having regard to the situation of the property in the Cantonment<br \/>\nArea. He also submitted mat the parties to the Agreement knew that the<br \/>\nproperty was liable for resumption in accordance with the provisions Of the<br \/>\nCantonment Act and the rules framed thereunder,<\/p>\n<p>Mr. R. Sundarvaradan, learned senior counsel appearing as Amicus Curiae,<br \/>\nalso argued the matter elaborately contending that the conditional<br \/>\npermission given by the MEO was no permission at all and, therefore, the<br \/>\nVendee was under no obligation to proceed further under the Agreement.<br \/>\nAccording to the learned counsel, the contract fell through on account of a<br \/>\ncollateral reason for which the Vendee was not responsible. As the Vendee<br \/>\nwas not responsible for the failure of the contract, she was justified in<br \/>\nclaiming refund of the earnest money paid by her. He also cited several<br \/>\ndecisions in support of his submissions.\n<\/p>\n<p>After considering the rival submissions and perusing the High Court<br \/>\njudgment, we are of the view that we need not consider all the points<br \/>\nraised by the counsel on both sides when the only question decided by the<br \/>\nHigh Court was with reference to the scope of the permission granted by the<br \/>\nMEO and the consequences thereof. If we come to the conclusion that the<br \/>\npermission given by the MEO in this case was no permission at all, then the<br \/>\nVendee must succeed. If we hold it otherwise, the Vendors should succeed.\n<\/p>\n<p>It is common ground that under the Agreement the Vendee undertook to get<br \/>\nthe permission from the MEO and the Vendee knew about it. Clause 5 of the<br \/>\nAgreement provides that in case the MEO did not accord the permission, the<br \/>\nVendee will be absolved of her liability to purchase the property and will<br \/>\nbe entitled to get her money back. The condition on which reliance was<br \/>\nplaced by both the parties and subject to which the permission by the MEO<br \/>\nwas given, reads as follows:-\n<\/p>\n<p>&#8220;That the purchaser gives a Certificate to the effect that he has no<br \/>\nintention to represent against the resumption proceedings when decided by<br \/>\nthe competent authority.&#8217;<\/p>\n<p>The High Court held that the above condition was not in accordance with any<br \/>\nlaw and wholly unjustified, and according to the learned Judge, the MEO had<br \/>\nno right to impose such a condition so as to take away the right of filling<br \/>\nobjection by the Vendee whenever resumption was done. Though the resumption<br \/>\nitself was to be made under the provisions of the Cantonment Act and the<br \/>\nRules framed thereunder, by virtue of the condition imposed, according to<br \/>\nthe learned Judge, the purchaser could not resist the resumption even in a<br \/>\ncase where the resumption was not in accordance with law. Construing the<br \/>\ncondition in (he manner stated above, the High Court concluded that such a<br \/>\npermission would be no permission in the eye of law and, therefore, the<br \/>\nVendee was entitled to rescind the contract and claim refund of the earnest<br \/>\nmoney. Whether the High Court was right in construing the condition in the<br \/>\nmariner stated above is the only question to be decided in this appeal.\n<\/p>\n<p>The parties knew that the property was situated in the Cantonment Area. The<br \/>\nfinding of the First Appellate Court was that the husband of the Vendee was<br \/>\na graduate and the Vendee herself was literate and they knew about the<br \/>\nterms of the Agreement fully well. Even the Trial Court, which decreed the<br \/>\nsuit, found that the Vendee must be presumed to have been aware of the<br \/>\nlegal position with regard to resumption in respect of the property in the<br \/>\nCantonment Area. Knowing the legal position of the properties situated in<br \/>\nthe Cantonment Area, the Vendee had entered into an Agreement. It is also<br \/>\nhot in dispute that &#8216;( is the vendee who had undertaken to obtain the<br \/>\npermission for the purchase of the property from the MEO and the only<br \/>\nobligation on the part of the Vendors was to make available all necessary<br \/>\npapers and assist the Vendee in getting the permission. It is again an<br \/>\nundisputed fact that there was no express or implied condition that the<br \/>\nVendors must get an unconditional permission from the MEO, Bearing these<br \/>\nfactors in mind if we look into the condition imposed by the MEO, we are<br \/>\nunable to sustain the conclusion of the High Court on the effect of<br \/>\ncondition referred to above. The High Court erred in holding that the<br \/>\npurchaser was prohibited from challenging any future resumption, even if<br \/>\nthe resumption proceedings were contrary to the provisions of the<br \/>\nCantonment Act and the Rules regarding resumption. The High Court should<br \/>\nnot have construed the condition imposed by the MEG by giving a narrow and<br \/>\nliteral meaning to the condition. Instead the condition should have been<br \/>\nread down on the facts of the case. If the authorities proceed for<br \/>\nresumption contrary to the express provisions of the Act and the Rule, it<br \/>\nis always open to the aggrieved party to challenge the same and the<br \/>\ncondition imposed, as noticed above, cannot be construed to mean that even<br \/>\nthough such resumptions were contrary to the provisions, cannot be<br \/>\nchallenged. The mere fact that at a future point of time the property in<br \/>\nthe Cantonment Area would be liable for resumption in accordance with law,<br \/>\nwill not clothe the Vendee to repudiate the Sale Agreement. Except the plea<br \/>\nregarding the nature of the condition imposed by the MEO, the High Court<br \/>\nhad not found the other pleas against the Vendor. If we construe the<br \/>\ncondition as not unusual having regard to go the situation of the property<br \/>\nin the Cantonment Area, the necessary corollary would be that the Vendee,<br \/>\non the facts of this case, could not have repudiated the Sale Agreement,<br \/>\nThe only ground which weighed with the High Court to reverse the judgment<br \/>\nof the First Appellate Court, as noticed earlier, was regarding the nature<br \/>\nof condition. For the reasons stated above, we hold that the said<br \/>\nconclusion arrived at by the High Court on the nature of the condition<br \/>\ncannot be sustained. The appeal has to be and is accordingly allowed with<br \/>\nno order as to costs. The suit filed by the first respondent will stand<br \/>\ndismissed.\n<\/p>\n<p>We place on record our appreciation to the learned senior counsel, Mr. R.<br \/>\nSundaravaradan, for the assistance rendered to this Court.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Rameshwar Swarup (Dead) By Lrs vs Smt. Saroj Tyagi And Ors on 12 October, 1998 Bench: K. Venkataswami, A.P. Misra CASE NO.: Appeal (civil) 3346 of 1981 PETITIONER: RAMESHWAR SWARUP (DEAD) BY LRS. RESPONDENT: SMT. SAROJ TYAGI AND ORS. DATE OF JUDGMENT: 12\/10\/1998 BENCH: K. VENKATASWAMI &amp; A.P. MISRA JUDGMENT: JUDGMENT [&hellip;]<\/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-197182","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Rameshwar Swarup (Dead) By Lrs vs Smt. 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