{"id":95548,"date":"2010-05-07T00:00:00","date_gmt":"2010-05-06T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/pankaj-anantrai-bhuwa-ors-vs-ms-ramkumar-shivchandray-sons-on-7-may-2010"},"modified":"2017-09-26T16:57:53","modified_gmt":"2017-09-26T11:27:53","slug":"pankaj-anantrai-bhuwa-ors-vs-ms-ramkumar-shivchandray-sons-on-7-may-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/pankaj-anantrai-bhuwa-ors-vs-ms-ramkumar-shivchandray-sons-on-7-may-2010","title":{"rendered":"Pankaj Anantrai Bhuwa & Ors vs M\/S.Ramkumar Shivchandray & Sons on 7 May, 2010"},"content":{"rendered":"
Bombay High Court<\/div>\n
Pankaj Anantrai Bhuwa & Ors vs M\/S.Ramkumar Shivchandray & Sons on 7 May, 2010<\/div>\n
Bench: R. S. Dalvi<\/div>\n
                                         1\n\nPGK\n\n            IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n\n\n\n                                                                                      \n              ORDINARY ORIGINAL CIVIL JURISDICTION\n\n\n\n\n                                                              \n                          Suit No.391 of 1982\n\n    1.Pankaj Anantrai Bhuwa & ors.                       ..        ..       Plaintiffs\n\n\n\n\n                                                             \n                 v\/s.\nM\/s.Ramkumar Shivchandray & sons                         ..        ..       Defendant\n\n\nMr.D.S. Parikh, Senior Advocate with Mr.R.M. Tiwari for\n\n\n\n\n                                             \nPlaintiffs.\n                           \nMr.Uday Bobade with Mr.Pankaj Kawli i\/by M\/s.Dadhich & Co.\nfor Defendant.\n    -----\n                          \n                                         CORAM : SMT.ROSHAN DALVI, J.\nDate of reserving the judgment :                  1st    April, 2010\n              \n\nDate of pronouncing the judgment :                  7th          May, 2010\n           \n\n\n\nJUDGMENT :\n<\/pre>\n
    1.The Plaintiffs have sued for specific performance of<\/p>\n
      the   Agreement     for     sale       dated        23.4.1981               (the        said
\n      Agreement), for a declaration that the agreement is
\n      valid and subsisting and for an order to convey and<\/p>\n
      hand over possession of the property agreed to be sold
\n      under the said Agreement to Plaintiff No.3, who is
\n      nominated   by    Plaintiff        Nos.1          and     2.      The       Defendant-
\n      Company    (the   Defendant)           is    the        owner         of      the       suit
\n      property    being    land     with          buildings             and       structures<\/p>\n
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\n                                          2<\/span><\/p>\n
      standing thereon at Prabhadevi Road, Final Plot No.942,
\n      C.S. No.1064 of Lower Parel, Mumbai, admeasuring 3883<\/p>\n
      sq.   yards       equivalent      to    3248    sq.     meters         (the        suit
\n      property).\n<\/p>\n
    2.The said Agreement dated 23.4.1981 is executed by way<\/p>\n
      of a letter from the Defendant to the Plaintiffs and
\n      countersigned by the Plaintiffs.\n<\/p>\n
    3.Under the said Agreement, the Defendant agreed to sell,
\n      transfer and convey the suit property to the Plaintiffs<\/p>\n
      on as is where is basis, free from all encumbrances for
\n      consideration of Rs.20 Lakhs. The Defendant received an<\/p>\n
      earnest of Rs.50,000\/-.                The balance amount of Rs.19.5
\n      Lakhs was to be paid to the Defendant on completion of<\/p>\n
      the sale as per the said Agreement.                   The said Agreement
\n      was subject to all tenancies. The Plaintiffs also were<\/p>\n
      tenants of the Defendant in respect of a very large
\n      portion of the suit property.                  The Defendant was to pay<\/p>\n
      municipal taxes and collect and receive the rents in
\n      respect of the suit property.                    The Defendant was to
\n      make out a marketable title and forward the title deeds
\n      to the Plaintiffs. The Defendant agreed not to transfer<\/p>\n
      tenancies or deal with the tenants. The Defendant also
\n      executed      a     Power    of    Attorney        in      favour           of       the
\n      Plaintiffs         for      submitting          building            plans            for
\n      development of the suit property and recovering rent<\/p>\n
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\n                                          3<\/span><\/p>\n
    and compensation thereof, which came to be revoked \/
\n    terminated on 27.2.1989.                  The Defendant had to obtain<\/p>\n
    its income tax clearance certificate under Section 230A
\n    of the Income-tax Act, 1961 and if the certificate was<\/p>\n
    not produced, the Plaintiffs were not to withhold the
\n    completion of sale for want of 230A certificate, but in<\/p>\n
    that    event     the    Defendant         was     to       deposit          with        the
\n    Plaintiffs        Advocate         Rs.25,000\/-         by     way      of      security
\n    deposit for its obtaining 230A certificate, but the<\/p>\n
    Plaintiffs were to complete the sale notwithstanding.\n<\/p>\n
    The     Defendant        also\n                              ig        agreed        to      comply            with         the\n    formalities       and        requirements         of        registration                 and\n<\/pre>\n
    admission of documents apart from obtaining the 230A<\/p>\n
    certificate.          The Plaintiffs were to be entitled to
\n    recover     all    the       arrears      of     rent       and        compensation<\/p>\n
    payable by the other tenants and occupants till the
\n    time of the completion of sale.                         The sale was to be<\/p>\n
    completed within a period of 10 months from the date of
\n    the     said    Agreement          subject,        of       course,             to       the<\/p>\n
    Defendant s title being marketable and the Defendant
\n    obtaining permission for transfer of the suit property
\n    under     Section       27    of    the    Urban        Land        Ceiling            (and
\n    Regulations) Act, 1976 (ULCRA).                         On account of the<\/p>\n
    wilful default of the Defendant if the sale was not
\n    completed,      the     Plaintiffs         were    entitled             to     ask       for
\n    specific performance and for payment of interest on the
\n    earnest    money      and     the     costs,       charges           and       expenses<\/p>\n
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\n                                             4<\/span><\/p>\n
      incurred by the Plaintiffs and on account of the wilful
\n      default     of        the     Plaintiffs      if     the       sale         was        not<\/p>\n
      completed,       the        Defendant      was     entitled          to      specific
\n      performance of the Agreement making time the essence of<\/p>\n
      the contract by giving 15 days                   notice to complete the
\n      sale transaction and upon the failure of the Plaintiffs<\/p>\n
      to be entitled to terminate the Agreement and forfeit
\n      the amount of earnest paid in addition to be liable for
\n      payment of costs, charges and expenses incurred by the<\/p>\n
      Defendant and to be entitled to deal with or dispose of
\n      the suit property.\n<\/p>\n
    4.Copy of the resolution of the Board of Directors of the<\/p>\n
      Defendant    at        its    Board       meeting    held        on      14.4.1981,
\n      authorising two Directors of the Defendant to enter<\/p>\n
      into the said Agreement was separately furnished to the
\n      Plaintiff     and       that     fact      recited      in      the        Agreement<\/p>\n
      itself.\n<\/p>\n
    5.It can be seen upon a reading of the Agreement that the
\n      main part to be performed by the Plaintiffs was the
\n      payment of the balance consideration of Rs.19.50 Lakhs,
\n      only Rs.50,000\/- having been paid as earnest on the<\/p>\n
      execution        of     the     Agreement.           The        Defendant              was
\n      essentially       to    obtain     its      certificate          under         Section
\n      230A of the Income-tax Act.                 The completion of sale was
\n      to go on even if the certificate was not produced by<\/p>\n
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\n                                          5<\/span><\/p>\n
      the Defendant albeit upon deposit of Rs.25,000\/- in
\n      that behalf.         The certificate could be obtained only<\/p>\n
      upon the draft conveyance being prepared and sent to
\n      the Defendant and upon the Defendant submitting the<\/p>\n
      draft conveyance to the Income-tax Authorities.\n<\/p>\n
    6.The Defendant s title was clear                and the Plaintiffs as
\n      the     tenants     of     the   Defendant         were       estopped             from
\n      contending to the contrary as per the provisions of<\/p>\n
      Section116     of    the    Indian      Evidence       Act,        1872.         Hence
\n      though there were the usual clauses for making out a<\/p>\n
      marketable title or forwarding the title deeds to the
\n      Plaintiffs, who were the tenants and in possession of a<\/p>\n
      large portion of the suit property, the Plaintiffs did
\n      not call upon the Defendant to perform those covenants<\/p>\n
      or complain that the Defendant had failed to perform
\n      any of them. The conveyance was to be on                            as is where<\/p>\n
      is basis       and the Plaintiffs were given a separate
\n      Power of Attorney for developing the suit property as<\/p>\n
      well as for collection of rents in respect thereof.
\n      The Defendant was to obtain the permission under the
\n      Urban Land Ceiling Act which also was not required as
\n      there    was   no    vacant      land   and    the       Plaintiffs              never<\/p>\n
      called     upon      the     Defendant        to      obtain           any         such
\n      permission.         Parties have no disputes in respect of
\n      these usual covenants to be enforced by one another.\n<\/p>\n
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\n                                          6<\/span><\/p>\n
    7.However, the two Directors of the Defendant were to act
\n      jointly     as     per     the    resolution         supplied              to       the<\/p>\n
      Plaintiffs which the Defendant strongly relies upon.\n<\/p>\n
    8.The essential term of the Agreement was the execution
\n      of the conveyance and completion of the sale within 10<\/p>\n
      months of the execution of the Agreement and even the
\n      main    part     which     the    Defendant       had      to       perform           in
\n      obtaining the statutory certificate was no deterrent to<\/p>\n
      the execution of the conveyance.                  Since the Plaintiffs
\n      were to take the suit property on as is where is basis<\/p>\n
      and the title of the Defendant was clear and in fact
\n      admitted, nothing further was required to be done by<\/p>\n
      the Defendant.\n<\/p>\n
    9.However,    upon    the     Plaintiffs        breach        in      paying          the
\n      balance consideration and executing the conveyance, the<\/p>\n
      Defendant was required to first make time the essence
\n      of the contract by giving 15 days                   notice to complete<\/p>\n
      the sale and only upon failure of the Plaintiffs to
\n      comply,     were    they     entitled        to   terminate             the       said
\n      Agreement.\n<\/p>\n
    10.It would have to be seen whether the parties performed
\n      their     respective      parts        of   the   said       Agreement              and
\n      whether the breach, if any, was such as to render it a
\n      wilful default entitling other to specific performance<\/p>\n
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\n                                      7<\/span><\/p>\n
      of the contract.\n<\/p>\n
    11.The Plaintiffs did not make payment of the balance
\n      consideration    and    complete   the    sale      within          10-month<\/p>\n
      time specifically prescribed.            The Plaintiffs               default
\n      was not on account of any neglect or default on the<\/p>\n
      part of the Defendant since they agreed to take the
\n      suit property on as is where is basis.                   The Defendant
\n      has, however, not made time the essence of the contract<\/p>\n
      by giving 15 days       notice as specifically agreed in the
\n      said Agreement but have terminated the contract after<\/p>\n
      the period of the contract came to an end on the ground
\n      that upon default of the Plaintiffs the Agreement ipso<\/p>\n
      facto   came    to     an   end.   The    10-month           period           for
\n      completion of sale would expire on 23.2.1982.\n<\/p>\n
    12.The admitted correspondence that ensued between the<\/p>\n
      parties as set out in the Plaint itself shows that the
\n      very first letter after the said Agreement was written<\/p>\n
      by   the   Plaintiffs        Advocate      to     the         Defendant s
\n      Attorneys, putting on record that the Plaintiffs had
\n      paid Rs.50,000\/- to one of the Defendant s Directors,
\n      Rs.40935.67 as betterment charges to the Municipality<\/p>\n
      and Rs.25,000\/- as broker fees.           Under the said letter,
\n      the Plaintiffs forwarded another cheque of Rs.50,000\/-
\n      to the Defendant as requested by one of its Directors
\n      and nominated Plaintiff No.3 to have the conveyance<\/p>\n
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\n                                            8<\/span><\/p>\n
      registered in their name.\n<\/p>\n
    13.A week prior to the 10-month period granted for the
\n      completion      of     sale,    the        Plaintiffs         Advocate            wrote<\/p>\n
      another      letter     dated       16.2.1982       to     the        Defendant s
\n      Attorneys mentioning about the request of one of the<\/p>\n
      Directors of the Defendant to make a further payment of
\n      Rs.50,000\/-      which    came       to     be    forwarded.          The       letter
\n      recorded that sale would be completed before 15.4.1982<\/p>\n
      as    agreed    (instead       of    23.2.1982).            The       Plaintiffs
\n      Advocate called upon the Defendant s Attorneys to fix a<\/p>\n
      suitable time for finalisation of the matter.\n<\/p>\n
    14.It may be mentioned that under the Agreement itself
\n      the copy of the resolution of the Board of Directors of<\/p>\n
      the     Defendant-Company           furnished       to     the        Plaintiffs,
\n      shows    that    the    two     Directors         Deviprasad          Poddar          and<\/p>\n
      Bhagwatiprasad         Poddar       were    authorised         to     settle          and
\n      finalise       the   documents        to     be   executed          between           the<\/p>\n
      parties and the common seal of the Company was to be
\n      affixed on the Power of Attorney and the conveyance in
\n      the presence of both of them.                     The purport and intent
\n      of    this     specific    unusual          resolution         was        that        the<\/p>\n
      Company would act not through one of its Directors but,
\n      by a special resolution in that behalf, by two of its
\n      Directors acting jointly.                  Similarly the Company would
\n      execute the documents being the Power of Attorney and<\/p>\n
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\n                                             9<\/span><\/p>\n
      the    conveyance      not    in      the       presence         of     one       of      its
\n      Directors but in the presence of both of them.                                        Since<\/p>\n
      both of them were to settle and finalise the drafts,
\n      including     the   draft        of       the    Deed     of      Conveyance,               it<\/p>\n
      follows as a matter of corollary that both of them
\n      would be only jointly entitled to do such other acts<\/p>\n
      and deeds also for and towards the completion of sale
\n      and    the   execution        of      the       conveyance.               They        were,
\n      therefore, required to act jointly.                          The resolution of<\/p>\n
      the    Company   was      made      known        to    the      Plaintiffs.               The
\n      Plaintiffs had to abide by that resolution which was<\/p>\n
      recited in the said Agreement itself.\n<\/p>\n
    15.Nevertheless       the    Plaintiffs            dealt       with        one      of      the
\n      Directors of the Defendant, Deviprasad Poddar.                                            The<\/p>\n
      Plaintiffs       also        paid         part        consideration                 amount
\n      remaining unpaid to that Director of the Defendant-\n<\/p>\n
      Company being Rs.50,000\/- paid twice as shown in the
\n      aforesaid     two    letters.              Aside       from       the       betterment<\/p>\n
      charges and the broker fees, the Plaintiffs did not pay
\n      the balance consideration until after the period of
\n      time granted to the Plaintiffs for completion of sale
\n      expired on 23.2.1982.\n<\/p>\n
    16.The    extension       of     time         allegedly           sought           by       the
\n      Plaintiffs and stated to have been granted was also not
\n      by the two Directors of the Defendant acting jointly.\n<\/p>\n
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\n                                            10<\/span><\/p>\n
      The Plaintiffs             Advocate has simpliciter recorded in
\n      his letter dated 16.2.1982 that time was extended.\n<\/p>\n
    17.The    Defendant s           Attorneys      by       their         letter            dated<\/p>\n
      24.2.1982 send the notice of termination since the sale
\n      which       was     to   be    completed         by     23.2.1982              was       not<\/p>\n
      completed.          The notice of termination stated that under
\n      the resolution of the Company, the authority was given
\n      to    the    two     Directors       to    act    jointly          and       that        one<\/p>\n
      Director       could     not    have      acted       singly         and       accepted
\n      payment purportedly made by the Plaintiffs to him.\n<\/p>\n
                                   ig                                                          The
\n      Defendant disputed that any payment was made to the
\n      Defendant.          It was contended that had the Plaintiffs<\/p>\n
      forwarded the draft of the conveyance to the Defendant,
\n      they    would       have      obtained      the       230A      certificate                by<\/p>\n
      submitting true copy of the settled draft of conveyance
\n      to the Income-tax Authorities. Since the land was fully<\/p>\n
      built up, Section 27 of the Urban Land Ceiling Act was
\n      struck down ultra vires and the Plaintiffs were to take<\/p>\n
      the     suit      property      on    as    is        where       is      basis,           no
\n      formalities          were     required      to     be       complied             by      the
\n      Defendant.          The postponement of the sale by 7 weeks, as
\n      claimed        by    the      Plaintiffs,         was        refuted            by       the<\/p>\n
      Defendant.          The notice alleged that the Plaintiffs were
\n      not in a position to make payment and were delaying the
\n      payment      on      false     pretexts.         Consequently,               the       said
\n      Agreement was terminated and the earnest was forfeited.\n<\/p>\n
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\n                                       11<\/span><\/p>\n
    18.It may be mentioned that the Defendant did not fully<\/p>\n
      comply with the terms under the said Agreement relating
\n      to the termination of the Agreement by it as contained<\/p>\n
      in Clause 18(b) of the said Agreement.                   The Defendant
\n      did not make time the essence of the contract.                                The<\/p>\n
      Defendant did not give 15 days notice to complete the
\n      transaction.        The Defendant simpliciter terminated the
\n      contract on the next day after which it was to be<\/p>\n
      performed.     It would have to be seen whether the notice
\n      of termination entitling the Defendant to terminate the<\/p>\n
      contract and forfeit the earnest was correctly given as
\n      per the specific terms of the agreement. It would also<\/p>\n
      have to be seen whether upon the non-performance of the
\n      contract by payment of the balance consideration and<\/p>\n
      completion of sale within 10-month period granted to
\n      the Plaintiffs, the Plaintiffs would be barred from<\/p>\n
      enforcing     the     Agreement      and   completing            the        sale
\n      thereafter.\n<\/p>\n
    19.The   Plaintiffs      contended     through      their         Advocate s
\n      letter   dated      27.2.1982   addressed    to     the       Defendant s
\n      Attorneys that the entire negotiation and agreement was<\/p>\n
      settled by the said Deviprasad Poddar because the other
\n      Director lived in Calcutta and was out of Mumbai.                             The
\n      letter alleged that there were several meetings held
\n      with the said Director, payments were not made and time<\/p>\n
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\n                                          12<\/span><\/p>\n
      extended which the Defendant was bound by.\n<\/p>\n
    20.The Plaintiffs claimed to perform the contract and
\n      sued the Defendant in that behalf.\n<\/p>\n
    21.After    the    filing     of    the    Suit    also       the       Plaintiffs<\/p>\n
      negotiated settlement with the said Director of the
\n      Defendant       only.      The    said    Director         agreed           to      the
\n      negotiations and certain meetings were held, payments<\/p>\n
      made, letters exchanged and consent terms in the Suit
\n      sought to be executed.\n<\/p>\n
    22.The correspondence that ensued between the parties and<\/p>\n
      their Attorneys after the filing of the Suit is relied
\n      upon by the Plaintiffs to show that the Agreement was<\/p>\n
      entered into by and between the Plaintiffs and the
\n      Defendant albeit represented by only one Director of<\/p>\n
      the Defendant, the other Director disputing any such
\n      agreement       on   the    ground       that    as    per        the       special<\/p>\n
      resolution passed and made known to the Plaintiffs,
\n      both     the    Directors        were    to     act    jointly            and       the
\n      individual act of a single Director would not bind the
\n      Defendant.\n<\/p>\n
    23.It is unnecessary to go into the entire correspondence
\n      in that behalf brought on record as subsequent events.\n<\/p>\n
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\n                                         13<\/span><\/p>\n
    24.The Plaintiffs claim to have made certain further part
\n      payments to the Defendant such that                     under the amended<\/p>\n
      Plaint Rs.15.39 Lakhs out of Rs.19.50 Lakhs are stated
\n      to have been paid by the Plaintiffs to the Defendant.\n<\/p>\n
      These are admittedly not received and receipted by the
\n      two Directors acting jointly.                   The part payment made<\/p>\n
      and recited in the Plaintiffs                letter dated 9.10.2002
\n      shows the earnest paid, two installments of Rs.50,000\/-
\n      and     two    installments       of     Rs.25,000\/-            paid         to      the<\/p>\n
      aforesaid       one    Director        of    the      Defendant-Company,
\n      certain betterment charges to the Municipality, further<\/p>\n
      Rs.1 Lakh paid to the said Director of the Company and
\n      diverse amount paid by way of property taxes to the<\/p>\n
      Municipality.         It may be mentioned that the Plaintiffs
\n      were tenants and in possession of a large portion of<\/p>\n
      the suit property.         For non-payment of the taxes, the
\n      suit property would be auctioned by the Municipality.\n<\/p>\n
      It would be in the interest of the Plaintiffs to make
\n      the payment that they did.\n<\/p>\n
    25.The Defendant was to make those payments until the
\n      completion of sale.           That would be for a period of
\n      about    10     months    after        the   agreement.                 Upon         the<\/p>\n
      completion of sale, the Plaintiffs will be the owners
\n      and   would     be    required    to     make    payment           of      property
\n      taxes.        The Plaintiffs in possession did not complete
\n      the sale.        The Plaintiffs in possession instead made<\/p>\n
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\n                                   14<\/span><\/p>\n
      payments of diverse amounts to the Municipality from
\n      time to time.\n<\/p>\n
    26.The   Defendant   claims   that   even        certain          of      these<\/p>\n
      payments made to the Defendant were by way of rents
\n      payable by the Plaintiffs.       The Plaintiffs were tenants<\/p>\n
      in   possession.   They   were   bound    to    make        payment           of
\n      rents. The liability for payment of rent would cease
\n      only after the Plaintiffs acquired title.                    That would<\/p>\n
      be upon the Plaintiffs making payment of the balance
\n      consideration and completing the sale.\n<\/p>\n
                           ig                               That would be\n      upon   the   Plaintiffs     sending      the      draft          deed         of\n<\/pre>\n
      conveyance to the Defendant. The Plaintiffs failed to<\/p>\n
      convey it as agreed within 10 months.                The Plaintiffs
\n      also failed to convey within the extended period of 7<\/p>\n
      weeks as claimed by the Plaintiffs. The payment made to
\n      the Defendant was correctly contended by the Defendant<\/p>\n
      to have been paid by way of rent.\n<\/p>\n
    27.The Plaintiffs claim that all the payments are made
\n      towards the balance consideration upon the statement of
\n      accounts submitted by the Plaintiffs; which need not be
\n      otherwise gone into. The amount paid is in excess of<\/p>\n
      the balance consideration payable by the Plaintiffs.
\n      Consequently, there has arisen an unusual and absurd
\n      situation in which a tenant of an owner claiming the
\n      ownership upon completion of sale and execution of the<\/p>\n
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\n                                        15<\/span><\/p>\n
      conveyance, which never came to be, claims to have paid
\n      the balance consideration but not sent the draft deed<\/p>\n
      of     conveyance       for     execution.      Even          the         balance
\n      consideration was paid after the Suit was filed.                                 Most<\/p>\n
      of that consideration is not paid to the Defendant but
\n      is paid to the Municipality on behalf of and on account<\/p>\n
      of the Defendant.         The Plaintiff would have nonetheless
\n      had to make the payment if the Defendant failed to make
\n      that    payment     for    protection    of     its       own       possession<\/p>\n
      against auction and sale of the suit property.<\/p>\n
\n\n\n    28.It is the Plaintiffs\n                               ig      case that they are ready and\n<\/pre>\n
      willing to perform their part under the Agreement for<\/p>\n
      sale dated 23.4.1981.            This readiness and willingness
\n      is only and essentially in making the payment of the<\/p>\n
      balance    consideration         and   completing            the       sale         by
\n      execution of the conveyance.            The Plaintiffs failed to<\/p>\n
      do that within the period mentioned in the Agreement.
\n      The    Plaintiffs       claim   that    the     period         came         to      be<\/p>\n
      extended     by    agreement     between       the     parties.                 This
\n      agreement was by and between one of the Defendant s
\n      Director, though both of them were required to act
\n      jointly    under    a     resolution    specially         passed          by      the<\/p>\n
      Defendant.        The     Plaintiffs    also    claim         that        certain
\n      further part payments towards the balance consideration
\n      came to be made and paid to one of the Defendant s
\n      Directors.        The     Defendant,    however,          terminated              the<\/p>\n
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\n                                            16<\/span><\/p>\n
      agreement.\n<\/p>\n
    29.It is the Defendant s case that termination is valid.
\n      The Defendant is entitled to forfeit the earnest paid<\/p>\n
      and   deal      with    and   dispose          of    the    suit       property            as
\n      agreed   between        the    parties          in    the     Agreement              dated<\/p>\n
      23.4.1981.           The Defendant relied upon the resolution
\n      passed     by    it     authorising            two    Directors            Deviprasad
\n      Poddar   and      Bhagwatiprasad           Poddar       to     act       jointly           in<\/p>\n
      respect of the Agreement for sale and the subsequent
\n      execution       of    the    Power
\n                                   ig       of       Attorney       as      well        as     the
\n      conveyance by the Defendant.                         The Defendant refutes
\n      receipt of any balance consideration after the earnest<\/p>\n
      was paid.       It is its case that the amounts paid to one
\n      of its Directors were paid to him in his individual<\/p>\n
      capacity     and       not    to   the         Company       in     view         of      the
\n      resolution of the Company.                     It is further the case of<\/p>\n
      the Defendant that the Defendant s title was admitted
\n      and so the only part which the Defendant had to perform<\/p>\n
      under the said Agreement was to obtain a certificate
\n      under Section 230A of the Income-tax Act, which the
\n      Defendant could have obtained only upon submission of
\n      the   final       draft       of     the       conveyance          sent         by       the<\/p>\n
      Plaintiffs to it. The Defendant claims that because the
\n      Plaintiffs       did    not    have        a    requisite          finance,            they
\n      delayed the transaction and committed the breach, due
\n      to which the Defendant was entitled to terminate the<\/p>\n
                                                             ::: Downloaded on – 09\/06\/2013 15:56:34 :::<\/span>
\n                               17<\/span><\/p>\n
      contract which stood terminated under its Notice of
\n      termination dated 24.2.1982.   The Defendant claims that<\/p>\n
      it made time the essence of the contract and denied
\n      that it had extended time to 15.4.1982.\n<\/p>\n
    30.Upon such pleadings, the following issues came to be<\/p>\n
      framed by Justice Daga on 2.3.2006 which are answered
\n      as follows:-\n<\/p>\n
                           ISSUES<\/p>\n
    (1)Whether the Plaintiffs prove the suit agreement is
\n      subsisting and binding upon the Defendant as alleged in
\n      para 10 of the Plaint. – No<\/p>\n
    (2)Whether the Plaintiffs prove that the Defendant was
\n      not entitled to terminate the said agreement and the
\n      termination by the Defendant is illegal, wrongful and<\/p>\n
      not binding as alleged in para 8 of the plaint. – No<\/p>\n
    (3)Whether the Plaintiffs prove that they were and are
\n      always ready and willing to perform their part of
\n      contract as alleged in para 12 of the plaint. – No<\/p>\n
    (4)Whether the Plaintiffs prove that they have paid and
\n      Defendant has received in all the sum of Rs.2,15,935.67
\n      towards part payment as alleged in para 5 of the
\n      plaint. – No<\/p>\n
    (5)Whether the Plaintiffs prove that they are entitled to
\n      have the conveyance in favour of the Plaintiff No.3 as
\n      their nominee in the absence of privity of contract
\n      between the Defendant and the alleged nominee. – Yes if
\n      Plaintiff Nos.1 and 2 are entitled, Plaintiff No.3
\n      would also be entitled.\n<\/p>\n
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\n                                 18<\/span><\/p>\n
    (6)Whether the Plaintiffs prove that there was any
\n      settlement of the suit as alleged in the amended
\n      plaint. – No<\/p>\n
    (7)Whether the Plaintiffs prove that Shri Deviprasad<\/p>\n
      Poddar a Director of the Defendant was unilaterally
\n      entitled to represent the Defendant or enter into any
\n      commitment or receive any amount from the Plaintiffs
\n      without consent and concurrence of Shri Bhagwatiprasad<\/p>\n
      Poddar the other Director of the Defendant. – No<\/p>\n
    (8)Whether the Plaintiffs prove that any amount paid by
\n      the Plaintiffs after filing of the suit towards taxes
\n      etc. of the suit property was towards part payment<\/p>\n
      under the suit agreement for sale as alleged in the
\n      amended plaint of the Plaintiffs. – No<\/p>\n
    (9)Whether the Plaintiffs prove that they were entitled
\n      to file or to prosecute the suit by reason of what is<\/p>\n
      alleged in the amended paras of the plaint. – Need not
\n      be answered as not pressed.\n<\/p>\n
    (10)Whether     the Plaintiffs prove that the time to<\/p>\n
      complete    the agreement was allegedly extended to
\n      15.4.1982    for the reasons alleged in para 7 of the<\/p>\n
      plaint or   otherwise. – No. It was not extended by the
\n      Defendant    as resolved by it but only by one of its
\n      Directors   acting singly.\n<\/p>\n
    (11)Whether the Defendant proves that the time to
\n      complete the sale was the essence of the contract as
\n      stated in para 2 of the written statement. – No<\/p>\n
    (12)Whether the suit is bad for mis-joinder of the<\/p>\n
      parties as stated in amended written statement. – Need
\n      not be answered as not pressed.\n<\/p>\n
    (13)Whether the Defendant proves that the suit agreement
\n      for sale was invalid, void and un-enforceable by reason
\n      of non-filing of Form No.37EE with the Competent
\n      Authority under Chapter XXA of the Income Tax Act<\/p>\n
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\n                                         19<\/span><\/p>\n
      and\/or filing of Form No.371 with the Appropriate
\n      Authority under Chapter XXC of the Income Tax Act as
\n      contended under paras 2(a) to 2(d) of the amended<\/p>\n
      written statement. -No. Since the draft Deed was
\n      conveyance was itself not sent by the Plaintiffs for<\/p>\n
      completion of sale.\n<\/p>\n
    (14)Whether the Plaintiffs are entitled to any relief, if
\n      so what ?\n<\/p>\n
    27.Plaintiff     No.2       led    evidence      on     behalf            of       the<\/p>\n
      Plaintiffs as P.W.1.            The Plaintiffs also led evidence
\n      of the Advocate who represented the Plaintiffs at the<\/p>\n
      time   of    the   execeution      of   the   Agreement            for        sale.
\n      These witnesses have been cross-examined. The Defendant<\/p>\n
      has    not   led    any    evidence.     The        execution            of      the
\n      Agreement is admitted.            The correspondence that ensued<\/p>\n
      between the Advocates and the Attorneys of the parties
\n      is also admitted.          The resolution relied upon by the<\/p>\n
      Defendant having been served upon the Plaintiffs is
\n      also admitted.        The fact that the Plaintiffs have made<\/p>\n
      payment of further consideration, though denied by the
\n      Defendant, is seen to have been made by the Plaintiffs
\n      albeit to one of the Directors of the Defendant and to
\n      the Municipality. The effect of such payment in law<\/p>\n
      would have to be seen.            The fact of the possession of
\n      the suit property is further admitted.                     The fact that
\n      the Plaintiffs are tenants of the Defendant is admitted
\n      and consequently, the ownership of the Defendant is not<\/p>\n
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\n                                           20<\/span><\/p>\n
      in dispute.             The respective parts of the contract,
\n      which are to be performed by the respective parties,<\/p>\n
      their rights and entitlement under the contract and
\n      their acts thereupon, would be seen from the terms of<\/p>\n
      the contract itself, oral evidence in that regard being
\n      completely         excluded        by     the    documentary              evidence<\/p>\n
      contained          in     the      agreement        and        the          ensuing
\n      correspondence between the parties.                     The oral evidence
\n      is, therefore, largely redundant.                 Counsel on behalf of<\/p>\n
      the parties have prudently not even referred to the
\n      oral evidence led by the Plaintiffs.\n<\/p>\n
    28.The aforesaid issues would have to be answered within<\/p>\n
      the   ambit    of       the     parties    rights    in      law      under         the
\n      Agreement for sale entered into between them and their<\/p>\n
      acts thereupon.\n<\/p>\n
    29.Issue No.(1) :           The said Agreement dated 23.4.1981 had
\n      to be performed by completion of sale within 10 months<\/p>\n
      of the agreement. The last date of completion of sale
\n      would be 23.2.1982.               The Defendant was admittedly the
\n      owner of the suit property, the Plaintiffs being their
\n      tenants     and         consequently      estopped        from        contending<\/p>\n
      otherwise.         The Plaintiffs agreed to purchase the suit
\n      property      on    as     is    where    is    basis     subject           to      all
\n      existing tenancies.              The Plaintiffs were to develop the
\n      suit property under the Power of Attorney executed by<\/p>\n
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\n                                        21<\/span><\/p>\n
      the    Defendant        and    could    recover        the        rents          and
\n      compensation upon completion of sale.                 Permission under<\/p>\n
      the Urban Land Ceiling Act, which was to be otherwise
\n      obtained by the Defendant, was not to be obtained at<\/p>\n
      the relevant time since under Section 27 of the Act,
\n      under which the permission was to be obtained, was<\/p>\n
      declared ultra vires the Constitution of India by the
\n      Apex Court.      The only essential part of the contract to
\n      be performed by the Plaintiffs was to make payment of<\/p>\n
      the balance consideration.              The only essential part,
\n      which had to be performed by the Defendant, was to<\/p>\n
      obtain    its    income-tax       clearance       certificate                under
\n      Section   230A     of    the    Income-tax     Act.        Even        if      that<\/p>\n
      certificate was not obtained the conveyance had to be
\n      executed upon a mere deposit of Rs.25,000\/- by the<\/p>\n
      Defendant   pending       the    completion.         Consequently,                 to
\n      keep the agreement valid and subsisting, the Plaintiffs<\/p>\n
      must perform their part of the contract by offering and
\n      actually paying the balance consideration. The balance<\/p>\n
      consideration       payable       was    Rs.19.5          Lakhs.                 The
\n      Plaintiffs had to pay the balance consideration on or
\n      before 23.2.1982. The Plaintiffs failed to make payment
\n      of the balance consideration as per the terms of the<\/p>\n
      contract.\n<\/p>\n
    30.The   Plaintiffs       were    specifically     informed            that        the
\n      Defendant has passed the resolution under which two of<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 15:56:34 :::<\/span>
\n                                          22<\/span><\/p>\n
      their Directors Deviprasad Poddar and Bhagwatiprasad
\n      Poddar were both required to settle and finalise the<\/p>\n
      drafts of the Agreement for sale, Power of Attorney and
\n      Deed of Conveyance to be executed between the parties.\n<\/p>\n
      The Power of Attorney and the Conveyance were to be
\n      executed in the presence of both of them.                             Though the<\/p>\n
      resolution does not mention about each act, that had to
\n      be performed by the Directors jointly.                        The resolution
\n      read   as   a   whole      shows    the    specific         mandate           of     the<\/p>\n
      Company in authorising two of its Directors to do each
\n      of the pertinent acts for the transaction that the<\/p>\n
      Company     sought    to    enter        into    with     the        Plaintiffs.
\n      Nevertheless, the Plaintiffs interacted with only one<\/p>\n
      of the Directors of the Defendant.                        It has been the
\n      Plaintiffs        case     in   their     evidence         that        the       other<\/p>\n
      Director    was    not     available       and     the     Plaintiffs              were
\n      informed that the Director had consented to the other<\/p>\n
      Director    acting.         That    was     nonetheless            against           the
\n      written mandate in the resolution passed by the Company<\/p>\n
      and hence no act done by one of the Directors towards
\n      the completion of sale could be stated to be an act of
\n      the Defendant-Company.             As per the true construction of
\n      the    Agreement     and    its    plain        reading,       the       agreement<\/p>\n
      would subsist for 10 months from its execution unless
\n      the time is extended for its performance.\n<\/p>\n
    31.Since    the   transaction         is    with    regard         to      immovable<\/p>\n
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\n                                             23<\/span><\/p>\n
    property, time is not presumed to be the essence of the
\n    contract until            it is so made.            It was made essence of<\/p>\n
    the     contract         in      the    contract       itself         despite            the
\n    extension of 10 months for its completion.                                Time could<\/p>\n
    have been extended.                    However, in this special case,
\n    time could have been extended by both the Directors<\/p>\n
    acting jointly as per the mandate of the Defendant-<\/p>\n
\n    Company.           That      has   admittedly         not    been       done.            The\n    Plaintiffs         have       admittedly        not    completed             the       sale\n\n\n\n\n                                                 \n    within       the       initial     period       stipulated          in       the       said\n    Agreement.             The    settlement\n                                   ig               and    finalisation              of      the\n    draft       of   the      Deed     of    Conveyance         in    favour         of      the\n<\/pre>\n
    Plaintiffs could have been done only if the time was<\/p>\n
    extended.          Hence the extension of time for the better
\n    performance of the acts contemplated by the Company to<\/p>\n
    be performed by its Directors, for which they were
\n    authorised, was also by their joint action.                                 It is the<\/p>\n
    case    of       the    Plaintiffs           that   the     time       came        to      be
\n    extended.          That extension was orally granted by one of<\/p>\n
    the Directors.               The other Director did not consent to
\n    such extension of time even by ratification of the act
\n    of    his    co-director.               The    Defendant         has,      therefore,
\n    refuted that there was any extension of time granted<\/p>\n
    for the Plaintiffs. Consequently, the said Agreement
\n    cannot be stated to be subsisting and binding upon the
\n    Defendant after the period set out in the Agreement,
\n    and not extended thereafter, came to an end.                                         Hence<\/p>\n
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\n                                           24<\/span><\/p>\n
      issue No.(1) is answered in the negative.\n<\/p>\n
    32.Issue    No.(2)       :      Under       Clause   18(b)         of      the       said
\n      Agreement, the Defendant was entitled to terminate the<\/p>\n
      Agreement upon making time the essence of the contract
\n      by   giving     15     days        notice     to    complete            the        sale<\/p>\n
      transaction      and       upon    the    Plaintiffs       failing           to      so.
\n      This would be if there was a wilful default on the part
\n      of the Plaintiffs to complete the sale.                       Since the only<\/p>\n
      part that the Plaintiffs had to perform was to make
\n      payment of consideration and since the Defendant did<\/p>\n
      not have to perform any part other than to obtain its
\n      income tax clearance certificate, and which could be<\/p>\n
      obtained only if the draft conveyance was given by the
\n      Plaintiffs, the suit property having been agreed to be<\/p>\n
      purchased on as is where is basis, the wilful default
\n      would be upon non-payment of the balance consideration<\/p>\n
      which the Plaintiffs were required to make provision
\n      for within a period of 10 months of the execution of<\/p>\n
      the Agreement for sale.             The Plaintiffs not having made
\n      payment    of     the       balance       consideration             and        having
\n      committed a default, wilfully so as not to complete the
\n      sale,    the    Defendant         would    certainly       be      entitled            to<\/p>\n
      terminate the Agreement albeit upon making time the
\n      essence    of    the       contract      as   stipulated         in      the       said
\n      Agreement.\n<\/p>\n
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\n                                              25<\/span><\/p>\n
    33.Admittedly,         the    Defendant             has    not          made         time        the
\n      essence of the contract.                    The Defendant has terminated<\/p>\n
      the   Agreement       on    the    next          day     after          it      was      to      be
\n      performed and the sale was to be completed.                                         The said<\/p>\n
      Agreement was to be performed on or before 23.2.1982.
\n      The termination notice of the Defendant dated 24.2.1982<\/p>\n
      has     set   out     correctly         that           the      Directors              of      the
\n      Defendant had to act jointly, the Plaintiffs had failed
\n      to forward the draft of the conveyance so that the<\/p>\n
      Defendant        could      not         obtain           the           tax         clearance
\n      certificate under Section 230A of the Income-tax Act,<\/p>\n
      since     the    settled      draft              conveyance             could          not       be
\n      submitted       to    the    Income          Tax        Authorities,                 and       the<\/p>\n
      Defendant had no other formality to be complied since
\n      the permission under the Urban Land Ceiling Act was not<\/p>\n
      required to be obtained as there was no excess vacant
\n      land, the suit property being fully built up and the<\/p>\n
      Defendant had not agreed for postponement of completion
\n      of sale.        However, since the notice of termination was<\/p>\n
      given without making time the essence of the contract
\n      and since in law the contract of immovable property
\n      cannot have time for its performance as an essence of
\n      the   contract       unless       it        is    so    made,          the       notice          of<\/p>\n
      termination was not as per the true construction of the
\n      contract      and    the    intent          of    the        parties          set       out      in
\n      Clause 18(b) of the Agreement.                          The Defendant had not
\n      given 15 days          notice required to complete the sale.\n<\/p>\n
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\n                                     26<\/span><\/p>\n
      The termination of the contract a day after the period
\n      for its completion is, therefore, not legal and is<\/p>\n
      wrongful.   The Defendant could not have terminated its
\n      contract as it did under the Notice of termination<\/p>\n
      dated 24.2.1982.      Hence issue No.(2) is answered in the
\n      negative.\n<\/p>\n
    34.Issue Nos.(3) & (4) : The only part to be performed by
\n      the Plaintiffs was a payment of balance consideration<\/p>\n
      of Rs.19.5 Lakhs.        The Plaintiffs had not made any
\n      payment or even part thereof to the Defendant itself as<\/p>\n
      per the construction of the contract.                  Readiness and
\n      willingness of the Plaintiffs has to be adjudicated<\/p>\n
      upon in terms of the true construction of the contract
\n      between the parties.\n<\/p>\n
    35.The Plaintiffs made payments of three amounts of Rs.\n<\/p>\n
      50,000\/- and Rs.1 Lakh to one of the Directors of the
\n      Defendant   despite     the   aforesaid    resolution               of      the<\/p>\n
      Company enjoining the Directors to act jointly.                             The
\n      Company has not acknowledged the payment or receipted
\n      it.   Despite knowledge of the specific requirement of
\n      the contracting party, the Plaintiffs claim to have<\/p>\n
      made payments in the mode specifically forbidden by the
\n      Company.    No   such    payment   can    be     countenanced                 or
\n      accounted for.\n<\/p>\n
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\n                                               27<\/span><\/p>\n
    36.The    Plaintiffs          claim      to     have      made      further           payment
\n      towards the municipal taxes to the Bombay Municipal<\/p>\n
      Corporation.           The taxes were indeed required to be paid
\n      by the Defendant until the completion of sale.                                      It was,<\/p>\n
      therefore, to be paid by the Defendant until the last
\n      date on which the sale should have been completed and<\/p>\n
      the balance consideration paid.                           The Plaintiffs were
\n      tenants     in    possession           of     a    large      part       of     the       suit
\n      property.         It was in the interest of the Plaintiffs<\/p>\n
      themselves to make payment to the Municipal Corporation
\n      to   avoid    auction        ig  and   sale       of    the    suit       property            in
\n      possession of the Plaintiffs.                          Making such payments is
\n      not towards the balance consideration and cannot be<\/p>\n
      countenanced or accounted for to that end.\n<\/p>\n
    37.The    Plaintiffs           are       required         to     statutorily                aver
\n      readiness        and    willingness           to       perform        the       essential<\/p>\n
      terms of the contract which are to be performed by them
\n      under Section 16(c) of the Act, which bars the relief<\/p>\n
      in     an   action       for       specific            performance            upon        such
\n      failure. What is the requirement of the Plaintiffs
\n      actual act in showing their readiness and willingness
\n      is   explained         in    that      section.            This       readiness             and<\/p>\n
      willingness        is       to    be    in    accordance            with        the       true
\n      construction of the contract.                           For this purpose, the
\n      relevant portion of Section 16 of the Specific Relief
\n      Act runs thus:-\n<\/p>\n
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\n                                28<\/span><\/p>\n
                 16. Personal bars to relief.-Specific<\/p>\n
            performance of a contract cannot be enforced
\n            in favour of a person-\n<\/p><\/blockquote>\n
            (a) . . . . .\n<\/p><\/blockquote>\n
            (b) . . . . .\n<\/p><\/blockquote>\n
            (c) who fails to aver and prove that he has
\n            performed or has always been ready and willing<\/p>\n
            to perform the essential terms of the contract
\n            which are to be performed by him, other than<\/p>\n
            terms the performance of which has been
\n            prevented or waived by the defendant.\n<\/p><\/blockquote>\n
        Explanation. -For the purposes of clause (c).-\n<\/p>\n
            (i) where a contract involves the payment of
\n        money, it is not essential for the plaintiff to<\/p>\n
        actually tender to the defendant or to deposit in
\n        Court any money except when so directed by the<\/p>\n
        Court;\n<\/p>\n
            (ii) the plaintiff must aver performance of, or
\n        readiness and willingness to perform, the contract
\n        according to its true construction.\n<\/p>\n
    Mr.Parikh essentially contended that the Plaintiffs
\n    were not to tender the consideration to show their
\n    readiness and willingness.\n<\/p>\n
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\n                                         29<\/span><\/p>\n
    38.        Consequently, as held in the case of Md. Ziaul<\/p>\n
    Haque vs. Calcutta Vyaper Pratisthan, AIR 1966 Calcutta
\n    605    relied       upon      by    Mr.Bobade      on      behalf           of       the<\/p>\n
    Defendant,         the     readiness      and     willingness               of       the
\n    Plaintiffs would be in relation to the real agreement<\/p>\n
    between the parties and not as the Plaintiffs wished it
\n    or    evinced      it    before     the   Suit     or    in      the       way       the
\n    Plaintiffs wanted to fashion it at the trial.                                In that<\/p>\n
    case    the    Plaintiffs          case    was    not      proved          by      oral
\n    evidence. It was observed that the Plaintiffs
\n                                ig                                             case was
\n    insupportable if it was upon an agreement which was
\n    partly oral and partly in writing or even if it was<\/p>\n
    entirely      in    writing.        In    that    case      the      reason          for
\n    seeing the non-readiness of the Plaintiffs was that the<\/p>\n
    Plaintiffs         had   no   requisite         money    to      purchase            the
\n    property.\n<\/p>\n
    39.        Similarly in the case of M\/s.Bharat Barrel &<\/p>\n
    Drum    Mfg.       Co.     Pvt.Ltd.       vs.     Hindusthan             Petroleum
\n    Corporation Ltd. & ors.<\/a>, AIR 1989 Bombay 170, it was
\n    held that readiness and willingness must be averred
\n    according to the interpretation the Court places upon<\/p>\n
    the agreement when the parties are not ad idem upon
\n    such interpretation.               In that case         the form required
\n    under Section 37I of the Income-tax Rules under Chapter
\n    XXC and under Chapter XXX, Section 269(4)(c) of the<\/p>\n
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\n                                           30<\/span><\/p>\n
    Income-tax Act was to be obtained within 4 months and
\n    if not done, it was agreed that the transfer would be<\/p>\n
    illegal. In that case the transfer of steel received by
\n    the   Plaintiff            was    under     an    allotment           letter          which<\/p>\n
    prohibited           the     transfer.            The       Plaintiff               sought
\n    repayment of the amount paid by the Plaintiff in excess<\/p>\n
    of the agreement. Taking into account the revised rates
\n    of steel the Plaintiff s readiness and willingness to
\n    carry     out    their           obligations      was      seen        as       per       the<\/p>\n
    interpretation of the agreement of transfer by them.
\n    It was held that such readiness and willingness was not<\/p>\n
    acceptable.          Similarly in the case of N.P. Thirugnanam
\n    (Dead) By LRS. vs. Dr.R. Jagan Mohan Rao & ors.<\/a>, (1995)<\/p>\n
    5 SCC 115, it was held that continuous readiness and
\n    willingness          on     the     part     of    the       Plaintiff              was       a<\/p>\n
    condition precedent for grant of relief of specific
\n    performance.          Hence the availability of consideration,<\/p>\n
    conduct         of        the      Plaintiff        and          the          attending
\n    circumstances were required to be seen.                              In that case,<\/p>\n
    the     Plaintiff          dabbled     in    real       estate          transactions
\n    without any means to purchase the property.                                        It was
\n    held that the Plaintiff was not ready and willing to
\n    perform his part of the contract,                       his averment to that<\/p>\n
    extent notwithstanding.                   Consequently, in such a case
\n    the Plaintiff s capacity to raise funds to deposit the
\n    amount ordered to be deposited and to comply with the
\n    necessary orders passed, would be the evidence to show<\/p>\n
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\n                                       31<\/span><\/p>\n
    his readiness and willingness.\n<\/p>\n
    In a case such as this only tender of consideration
\n    would     substantiate         the      Plaintiffs            averment              of<\/p>\n
    readiness and willingness.\n<\/p>\n
    40.        Similarly when the Plaintiffs were directed to
\n    deposit     the     amount     pending        the    Suit          which          the
\n    Plaintiffs failed to do so or to even furnish a Bank<\/p>\n
    Guarantee as per the Court s directions, it has been
\n    held in the case of N.P. Thirugnanam (D) L.R.s. vs.<\/p>\n
    Dr.R. Jagan Mohan Rao & ors.<\/a>, AIR 1996 SC 116 that
\n    readiness and willingness is not shown.\n<\/p>\n
    41.        In     the   case   of      His   Holiness       Acharya            Swami<\/p>\n
    Ganesh Dassji vs. Shri Sita Ram Thapar, AIR<\/a> 1996 SC
\n    2095 the vendor sent the draft sale-deed which under<\/p>\n
    the agreement was required to be finalised within 7
\n    days and registered. The purchaser did not approve the<\/p>\n
    draft sale-deed immediately, did not give any reply,
\n    did not have necessary cash for payment and did not
\n    offer     cash.     His    conduct      so    scrutinised            was        held
\n    inconsistent        with    his      averment       of     readiness              and<\/p>\n
    willingness       in    accordance       with    the       terms          of      the
\n    contract.\n<\/p>\n
                                                    ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                      32<\/span><\/p>\n
    42.        Consequently,      it      was    held    in       the       case        of
\n    Pushparani    S.    Sundaram     &    ors.     vs.    Pauline           Manomani<\/p>\n
    James (Deceased) & ors.<\/a>, (2002) 9 SCC 582 that mere
\n    filing the Suit and taking the plea that the Plaintiff<\/p>\n
    was ready and willing to perform the contract, is not
\n    sufficient where he had not sent any communication or<\/p>\n
    notice regarding his readiness and willingness, paid
\n    only an insignificant amount as advance, not obtained
\n    the permission of the ULC Authorities, not taken any<\/p>\n
    steps to ascertain the valuation of the structure as
\n    required under the Agreement for sale, etc.
\n                           ig                                                  It was
\n    observed    in     Para-5   of     that      judgment       that        what        is
\n    required is not a plea but a proof of the same under<\/p>\n
    Section 16(c) of the Act.                   In that case, the only
\n    circumstance relied upon by the Plaintiff was tendering<\/p>\n
    the amount of Rs.5,000\/- after the Agreement for sale
\n    was entered.       It was observed that              Such small feeder<\/p>\n
    to the vendor is quite often made to keep a vendor in
\n    good   spirit.          The      amount       was     observed             to       be<\/p>\n
    insignificantly short of the balance amount and                                     is
\n    too weak a filament to stand even to build an image of
\n    readiness and willingness.\n<\/p>\n
    43.        True construction of the suit contract is also
\n    required to be appreciated.                 In this contract, simple
\n    that it is, the Plaintiffs were to pay consideration to
\n    obtain title. The Defendant was to do nothing which<\/p>\n
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\n                                        33<\/span><\/p>\n
    would be condition precedent for the Plaintiffs to pay
\n    the consideration.             The payment of consideration was<\/p>\n
    towards     completing         the      sale     in         favour            of       the
\n    Plaintiffs.            Sale   could     never    be      completed             if      the<\/p>\n
    consideration is not paid.                  Sale would have had to be
\n    completed once consideration was paid or tendered to<\/p>\n
    the Defendant.           The Plaintiffs were given 10 months
\n    time to do so.            The Plaintiffs contend that 7 weeks
\n    time was fresh breather given to them.                        Even if that is<\/p>\n
    accepted, which the Defendant refutes, the Plaintiffs
\n    would    have     to    complete
\n                               ig         the    sale     which         would         be     by
\n    tender of consideration.                In a contract such as this,
\n    therefore, it would not be taken to the contract merely<\/p>\n
    for     payment    of     money.         It     is      the       contract             for
\n    completing the sale of an immovable property requiring<\/p>\n
    the Plaintiffs to tender as the only part of their
\n    contract the agreed consideration. Hence the averment<\/p>\n
    of the Plaintiffs that they were ready and willing
\n    would be an empty averment unless it is accompanied by<\/p>\n
    the actual offer of payment.\n<\/p>\n
    44.        In a contract such as this, therefore, a mere
\n    capacity to pay is also not enough.                        A party may have<\/p>\n
    the capacity to pay but may bind time and not make
\n    payment while prices escalate. A party may make a show
\n    of offer and not tender consideration in a bit to bind
\n    time despite his capacity to pay.                    Hence a contract of<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                      34<\/span><\/p>\n
    this     kind    goes    further      than     the        case         of          S.P.
\n    Narayaaswami Pillai (supra). If the Plaintiff only has<\/p>\n
    to make payment of consideration as the part of his
\n    contract he must tender consideration without which his<\/p>\n
    assurance       of   readiness   and      willingness             is     an      empty
\n    averment devoid of substantiation.\n<\/p>\n
    45.        In the case of Swarnam Ramchandran (supra), it
\n    has been held that requirement of fulfillment of the<\/p>\n
    condition of readiness and willingness in a Suit for
\n    specific performance is that the purchaser shows that<\/p>\n
    he was ready and willing to fulfill the terms of the
\n    Agreement, that he had not abandoned the contract and<\/p>\n
    that he had kept the contract subsisting.                           It was held
\n    that on the facts of those cases, those conditions were<\/p>\n
    fulfilled.       That was a contract of sale dated 18.2.1981
\n    for a lump sum consideration of Rs.10 Lakhs in which<\/p>\n
    earnest of Rs.1 Lakh was paid and under which an option
\n    was given to vendor to extend the date of sale upto<\/p>\n
    31.12.1981.          Time to complete the sale was extended.
\n    The vendor accepted part payment of Rs.75,000\/- and
\n    before     13.9.1981      made     time      the     essence            for        such
\n    payment.        In that case the purchaser sent a post-dated<\/p>\n
    cheque for Rs.45,000\/- which was dishonoured indicating
\n    that he had no funds on the due date i.e. on 13.9.1981.
\n    Since time to pay was extended the dishonour of the
\n    cheque was held not a non-compliance on the part of the<\/p>\n
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\n                                            35<\/span><\/p>\n
    Defendant and upon overall conduct of the purchaser it
\n    was held that he was ready and willing to perform his<\/p>\n
    part.      Since    time        was    not       the    essence          of      payment,
\n    purchaser s later payment was held enough to constitute<\/p>\n
    his readiness and willingness in that behalf.\n<\/p>\n
    46.         The     facts       of    the    case       being        dissimilar              to
\n    this,      it    cannot         be    said       in    this       Suit         that        the
\n    Plaintiffs         were    ready       and       willing        to      perform            the<\/p>\n
    contract as per its true construction.\n<\/p>\n
    47.         Mr.Parikh argued that the purchaser who sued<\/p>\n
    the   owner       did     not    require         to    show      the       command           of
\n    necessary finance throughout the life of the contract.\n<\/p>\n
    (See : S.P. Narayaaswami Pillai vs. Dhanakoti Ammal,
\n    AIR<\/a> 1967 Madras 220).                 That was the case of a contract<\/p>\n
    to    be    performed           within       3    months         by       payment            of
\n    consideration of Rs.9,700\/- upon an advance of Rs.500\/-\n<\/p>\n
    being received on 23.6.1958, the date of the execution
\n    of the agreement for sale. In that case the contract
\n    was   to    be     performed          by    the       Plaintiff          securing            an
\n    encumberance certificate for the property on 8.9.1958,<\/p>\n
    which the Defendant cleared only on 13.9.1958.                                             The
\n    Plaintiff purchased the stamp paper of the value of Rs.
\n    765\/- for engrossing the sale-deed on 20.9.1958 and
\n    sued on the last date shown in the agreement for sale<\/p>\n
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\n                                           36<\/span><\/p>\n
    for completing the transaction.                         Though he was not
\n    required to have the necessary finance throughout the<\/p>\n
    life of the contract, it was observed in paragraph 5 of
\n    the   judgment      that        the     Plaintiff       must       establish             his<\/p>\n
    readiness and willingness to perform his part of the
\n    contract at proper time i.e. within reasonable time and<\/p>\n
    if    time    could        be    reasonably           extended          and        if      he
\n    establishes his capacity to perform the contract within
\n    the extended time it would be sufficient.                              Relying upon<\/p>\n
    the case of Adeshir vs. Flora Samson, AIR 1928 PC 208
\n    at    page   216,     it    was
\n                                ig        observed        that     preparedness                to
\n    fulfill      obligations          was      to   be    only       when        the        time
\n    expired and not during the entire life of the contract<\/p>\n
    as    such   insistence          would      make      fixing       the       time        for
\n    performance meaningless.                   However, the contention of<\/p>\n
    Mr.Parikh     that     the       Plaintiffs          were    not       required            to
\n    tender consideration or to deposit any amount in Court<\/p>\n
    or to offer it to the Defendant at any time, is against
\n    what has been laid down in this case.                             The Plaintiffs<\/p>\n
    would have to establish their capacity to perform the
\n    contract at-least within time. The Plaintiffs claimed
\n    an extended time.               The Plaintiffs have not established
\n    any such capacity to perform even within the extended<\/p>\n
    time and consequently, their averment of readiness and
\n    willingness is futile.\n<\/p>\n
    Consequently,        the        readiness       and    willingness               of      the<\/p>\n
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\n                                   37<\/span><\/p>\n
    Plaintiffs cannot be seen as per the true construction
\n    of the simple contract of the sale of the immovable<\/p>\n
    property      essentially     in     the     possession                  of        the
\n    Plaintiffs on as is where is basis.                    Hence both these<\/p>\n
    issues are answered in the negative.\n<\/p>\n
    48. Issue No.(5) :         Under Clause-16 of the Agreement
\n    for    sale    dated   23.4.1981       the        execution               of       the
\n    conveyance was agreed to be in favour of the purchasers<\/p>\n
    or    their   nominees.      Hence     if     the         Plaintiffs               are
\n    otherwise entitled to have the conveyance executed in<\/p>\n
    their favour, it could be also in favour of Plaintiff
\n    No.3 as their nominee. Issue No.(5) is answered in the<\/p>\n
    affirmative to that extent.\n<\/p>\n
    49. Issue     No.(6)   :     The    settlement           alleged           by      the
\n    Plaintiffs is admittedly by and between one of the<\/p>\n
    Directors of the Defendant-Company                    Deviprasad Poddar
\n    acting on behalf of the Company and instructing the<\/p>\n
    Attorneys of the Company in that behalf. Mr.Parikh,
\n    though, argued that the Attorney who carried on the
\n    correspondence with the Plaintiffs was the Attorney of
\n    the   Defendant   Company     and    not     the       Attorney            of      one<\/p>\n
    individual     Director.    However,       the     settlement               of     the
\n    Suit has neither been agreed by the other Director of
\n    the Defendant nor ratified by that Director or the
\n    Defendant     Company.      The     settlement,             if        any,         is,<\/p>\n
                                                     ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                    38<\/span><\/p>\n
    therefore, not proved in view of the special contract
\n    between the parties to which the specifically named two<\/p>\n
    Directors of the Defendant had to act jointly since
\n    both of them were authorised to settle and finalise the<\/p>\n
    documents to be executed for completion of the sale.
\n    Consequently, there could be no settlement as alleged<\/p>\n
    by the Plaintiffs and the Defendant in the amended
\n    Plaint,   the     Attorneys    being     the      Attorneys              of      the
\n    Defendant,      notwithstanding.        Consequently,                  reliance<\/p>\n
    placed upon the judgment in the case of Chairman and
\n    M.D.,   N.T.P.C.    Ltd.,ig   2004    AIR   SCW      198       relating            to
\n    interpretation     of   the   term     without         prejudice               with
\n    regard to the correspondence and agreement would not be<\/p>\n
    applicable   to       this    case.     Hence        Issue         No.(6)          is
\n    answered in the negative.\n<\/p>\n
    50. Issue    No.(7)     :     As    aforesaid,        in     view        of      the<\/p>\n
    resolution of the Defendant enjoining the two Directors
\n    to act jointly and authorising both those Directors to<\/p>\n
    settle and finalise the documents for completion of the
\n    sale and to be present at the time of the execution of
\n    the conveyance and the Power of Attorney granted to the
\n    Plaintiffs to do all acts, deeds, matters and things<\/p>\n
    necessary for the purpose of completion of sale, it
\n    would be completely erroneous and even absurd to state
\n    or suggest that one of the Directors of the Defendant
\n    was unilaterally entitled to represent the Defendant or<\/p>\n
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\n                                      39<\/span><\/p>\n
    enter into any commitment or receive an amount without
\n    the consent or concurrence of the other Director. Each<\/p>\n
    of these acts of representing the Defendant, entering
\n    into any commitment (be it to settle the Suit), or to<\/p>\n
    receive any amount which would be part payment of the
\n    balance consideration, is the act which is necessarily<\/p>\n
    to be performed for completion of the sale.                            All these
\n    acts    had   to    be    specially         performed,              under          the
\n    resolution of the Company, by both the Directors. One<\/p>\n
    Director cannot, therefore, unilaterally perform those
\n    acts.    Mr.Parikh contended that the Defendant had not<\/p>\n
    led any evidence and hence its case that the Defendant
\n    was necessarily required to act only jointly could not<\/p>\n
    be accepted and, therefore, the Plaintiffs                            case that
\n    an agreement was entered into after filing of the Suit,<\/p>\n
    in terms of the without prejudice negotiations with the
\n    Attorneys     of    the   Defendant          who       represented                 the<\/p>\n
    Defendant     and   not   only        one   of   its       Directors,              was
\n    binding on the Defendant.\n<\/p>\n
    51.       Mr.Parikh relied upon a judgment in the case
\n    of     Ishwar Bhai C. Patel alias Bachu Bhai Patel vs.
\n    Harihar Behera &<\/a> anr., AIR 1999 SC 1341 in this regard.\n<\/p>\n
    That was a Suit for recovery of money upon a plea that
\n    the Plaintiff had given the money from his bank account
\n    to the Defendant through his father who operated the
\n    Plaintiff s bank account on the suggestion of Defendant<\/p>\n
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\n                                           40<\/span><\/p>\n
    No.1.         That      suggestion           was      not      controverted                 by
\n    Defendant No.1 by leading evidence.                          That evidence was<\/p>\n
    material        and    hence        upon     the       Defendant           not         being
\n    examined, an adverse inference was drawn under Section<\/p>\n
    114(g) of the Evidence Act.                       Further Mr.Parikh relied
\n    upon    the     judgment       in     the    case       of    Sardar          Gurbakhsh<\/p>\n
    Singh vs. Gurdial Singh &<\/a> anr., AIR 1927 P.C. 230 in
\n    which it was held that the Plaintiff not examining
\n    himself but calling the Defendant as his witness was<\/p>\n
    the     degrading       practice.            The       reliance           upon        these
\n    judgments is completely misplaced because in this case<\/p>\n
    it    is   essential         for     the     Plaintiff          alone         to      prove
\n    readiness        and     willingness             as   well       as      the        actual<\/p>\n
    performance of his part of the contract and to call
\n    upon       the         Defendant            to        perform           its            part.\n<\/p>\n
    Consequently, issue No.(7) is answered in the negative.\n<\/p>\n
    52.Issue No.(8) :             The Plaintiffs were the tenants of
\n    the     large     portion       of    the        suit    property             which         is<\/p>\n
    entirely        tenanted       and     completely            built         upon.          The
\n    Plaintiffs        also       obtained       rights       of      another            tenant
\n    mentioned        in    the     list    of        tenants       annexed            to      the
\n    Agreement for sale being one M\/s.Capco Private Limited.\n<\/p>\n
    It would be in the interest of the Plaintiffs to pay
\n    the municipal taxes to avoid the auction and sale of
\n    the premises in their possession and occupation even as
\n    tenants and whilst they continued to be so. Payments<\/p>\n
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\n                                 41<\/span><\/p>\n
    made to the Municipality, albeit in the name of the
\n    Defendant who was the owner of the suit property in the<\/p>\n
    revenue records, cannot, therefore, be taken towards
\n    part payments of the said Agreement for sale.                           Hence<\/p>\n
    issue No.(8) is answered in the negative.\n<\/p>\n
    53. Issue No.(9) :      The Plaintiffs may be taken to be
\n    entitled to file or prosecute the Suit.                This issue is
\n    not seriously pressed.     Hence it need not be answered.\n<\/p>\n
    54. Issue No.(10) :  ig   Time of the performance of the
\n    contract is not stated to be extended by the Defendant
\n    by the act of the two Directors who are both authorised<\/p>\n
    to   do   all   acts,   deeds    and   matters       necessary              for
\n    completing the sale.      The extension of time, if at all<\/p>\n
    granted, was so granted by one of the Directors acting
\n    singly . The Plaintiffs have not shown the act of both<\/p>\n
    the Directors in that behalf. This would be one of the
\n    acts towards the completion of the sale.                       Since for<\/p>\n
    want of its extension the agreement would come to an
\n    end on 23.2.1982, it is for the Plaintiffs to prove
\n    that time was extended by both the Directors who were
\n    authorised to act by the Company. That has not been<\/p>\n
    proved.    For whatever reason the time extended by one
\n    of the Directors of the Defendant acting singly is
\n    immaterial. Issue No.(10)is answered accordingly.\n<\/p>\n
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\n                                     42<\/span><\/p>\n
    55. Issue    No.(11)      :   The     Agreement     for        sale        dated
\n    23.4.1981 required the Plaintiffs to complete the sale<\/p>\n
    within 10 months from the execution of the agreement
\n    subject to the Defendant s marketable title and the<\/p>\n
    permission for transfer to be obtained by the Defendant
\n    under Section 27 of the ULC Act.            The 10 months                period<\/p>\n
    was expired on 23.2.1982.            The Defendant admittedly had
\n    marketable title.         The Plaintiffs were their tenants.
\n    The Defendant was the landlord.                 The Plaintiffs are<\/p>\n
    estopped from contending that the Defendant does not
\n    have      title.    The
\n                          ig      clause     relating           to         showing
\n    marketability of title was the usual clause which was
\n    redundant in this case.          The entire property was built<\/p>\n
    upon. There were 10 tenants shown in the list annexed
\n    to the agreement.         There was no vacant land.                        Hence<\/p>\n
    permission under Section 27 of the ULC Act was also not
\n    required.     This clause, which is also a usual clause,<\/p>\n
    is redundant in this case. The Plaintiffs had to pay
\n    balance consideration to complete the sale within 10<\/p>\n
    months.      That   was   Rs.19.5      Lakhs.       It      was      for       the
\n    Plaintiffs to pay that amount to complete the sale.
\n    That was the most essential part of the contract and
\n    indeed the only part of the contract actually required<\/p>\n
    to be performed other than, of course, obtaining the
\n    tax clearance certificate under Section 230-A of the
\n    Income-tax Act by the Defendant, but which was not a
\n    condition precedent to the payment of consideration and<\/p>\n
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\n                                      43<\/span><\/p>\n
    which, if not obtained, required only Rs.25,000\/- to be
\n    deposited       with     the     Plaintiffs             Advocate.                That<\/p>\n
    certificate could be obtained only upon the final draft
\n    of the conveyance being tendered to the Income Tax<\/p>\n
    Authority which the Plaintiffs would be required to
\n    send for completion of the sale.\n<\/p>\n
    56.       The    entire        contract    was,         therefore,               only
\n    relating to the payment of the consideration by the<\/p>\n
    Plaintiffs.\n<\/p>\n
    57.<\/p>\n
              The Defendant contends that time was of the
\n    essence because the Plaintiffs had to make payment of<\/p>\n
    consideration     for     a    large     portion       of      the       property
\n    already   in    their    possession        as    the       tenants.                The<\/p>\n
    Defendant contends that the Plaintiffs not having made
\n    payment on or before 23.2.1982, they were entitled to<\/p>\n
    terminate the contract which they did by their notice
\n    of the very next day being 24.2.1982.\n<\/p>\n
    58.       Clause 18(b) of the contract sets out that the
\n    Defendant would be entitled to make time the essence of
\n    the contract by giving 15 days              notice to complete the<\/p>\n
    transaction      and    on     failure     of    the        Plaintiffs               to
\n    complete the sale, it would be entitled to terminate
\n    the   agreement        and     forfeit     the      earnest             and        the
\n    Plaintiffs would be liable to pay costs, charges and<\/p>\n
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\n                                         44<\/span><\/p>\n
    expenses incurred by the Defendant under the agreement
\n    and the Defendant would be entitled to deal with and<\/p>\n
    dispose    of     the    property        agreed       to     be     sold        to      the
\n    Plaintiffs.\n<\/p>\n
    59.        This clause, therefore, sets out specifically<\/p>\n
    that   time      was    not   of    the        essence      in      the       contract
\n    itself.    It     was    to   be     made       of    the       essence.                The
\n    Defendant could make it of the essence. It had to be<\/p>\n
    made of the essence by giving the stipulated notice.
\n    That was notice of 15 days upon failure of performance.\n<\/p>\n
    Under such a notice, the Defendant would be entitled to
\n    terminate the contract.                  Consequently, time cannot be<\/p>\n
    taken to be of essence in that agreement.\n<\/p>\n
    60.        The    Defendant s        Notice          of    termination              dated
\n    24.12.1982 does not give the Plaintiffs 15 days                                       time<\/p>\n
    to make the payment.                It does not make time of the
\n    essence.         It    simpliciter         terminates           the       agreement.\n<\/p>\n
    Hence though, as discussed in relation to issue No.(2)
\n    above,    the    Defendant         was    entitled         to     terminate             the
\n    agreement, that would have been only upon and after
\n    giving 15 days          notice to make time the essence of the<\/p>\n
    contract      and      thereafter         if    the       contract            remained
\n    unperformed, to terminate it.\n<\/p>\n
    61.        It is settled law that time is not of the<\/p>\n
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\n                                        45<\/span><\/p>\n
    essence of the contract of immovable properties per se.
\n    (See   :   (1)   Govind      Prasad      Chaturvedi         vs.       Hari        Dutt<\/p>\n
    Shstri     &<\/a>   anr.,   AIR       1977    SC    1005     and       (2)       Swarnam
\n    Ramchandran      (Smt.)      &    anr.    vs.     Aravacode             Chakungal<\/p>\n
    Jayapalan, (2004) 8 SCC 689)                  It has to be made of the
\n    essence expressly.\n<\/p>\n
    62.        Mr.Parikh on behalf of the Plaintiffs drew my
\n    attention to the Law of Contract in Halsbury, Vol.9,<\/p>\n
    page 481 at page 338 which lays down the settled law
\n    thus:-\n<\/p>\n
                   The modern law, the case of contracts of<\/p>\n
               all types, may be summarised as follows. Time
\n               will not be considered to be of the essence<\/p>\n
               unless : (1) the parties expressly stipulate
\n               that conditions as to time must be strictly<\/p>\n
               complied with; or (2) the nature of the
\n               subject matter of the contract or the<\/p>\n
               surrounding circumstances show that time
\n               should be considered to be of the essence; or
\n               (3) a party who has been subjected to
\n               unreasonable delay gives notice to the party<\/p>\n
               in default making time of the essence.\n<\/p><\/blockquote>\n
    Further in paragraph 126 at page 498 of Vol.9 of
\n    Halsbury, the importance of date of completion is set<\/p>\n
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\n                                  46<\/span><\/p>\n
    out thus:-\n<\/p>\n
            126. Date of completion. A date is usually fixed
\n          by the conditions of sale for the completion of<\/p>\n
          the purchase, but, in the absence of express
\n          stipulation to that effect, or unless an intention<\/p>\n
          that it should be so can be implied from the
\n          circumstances, that date is not of the essence of
\n          the contract.   However, although time is not<\/p>\n
          originally of the essence of the contract in this
\n          respect, it may be made so by either party giving<\/p>\n
          proper notice to the other to complete within a
\n          reasonable time, provided that at the time of the<\/p>\n
          notice there has been some default or unreasonable
\n          delay by that other.        Even where time is not<\/p>\n
          originally of the essence a party who through his
\n          own default fails to complete on the contractual<\/p>\n
          date commits a breach of the contract and is
\n          liable in damages.   In a suitable case, a decree<\/p>\n
          of specific performance can also be obtained
\n          before the contractual date for completion if the
\n          other party repudiates the contract.\n<\/p><\/blockquote>\n
    63.       Further Mr.Parikh argued that the contract to
\n    be completed within 10 months could be completed within
\n    any reasonable time after 10 months because time is not
\n    of the essence.       (See : Jamshed Khodaram Irani vs.<\/p>\n
                                               ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                47<\/span><\/p>\n
    Burjorji Dhunjibhai, (1915) 40 ILR Bombay 289 P.C.).
\n    That is the correct proposition of law.                    However, in<\/p>\n
    this case, the Plaintiffs have not shown that within a
\n    reasonable time after 23.2.1982 the Plaintiffs actually<\/p>\n
    sought   to   complete   the    contract.          The        Plaintiffs
\n    instead filed this Suit on 9.3.1982 within a fortnight<\/p>\n
    of the notice of termination and without offering to
\n    complete the contract within any reasonable time of the
\n    initial period of 10 months having expired.\n<\/p>\n
    64.      In this case, though it is contended on behalf<\/p>\n
    of the Plaintiffs that the initial period of 10 months
\n    was extended only for a period of 7 further weeks which<\/p>\n
    was, in any event, a reasonable time for completion of
\n    the   sale    the   Plaintiffs     have      not        shown           their<\/p>\n
    willingness to complete by offering consideration which
\n    was the only part to be performed for completion of the<\/p>\n
    sale within such extended time also.\n<\/p>\n
    65.      The Defendant has not accepted any extension
\n    of time. This was essential because two Directors of
\n    the Defendant were to act jointly as aforesaid.\n<\/p>\n
    66.      However, it may be mentioned that even if the
\n    Plaintiffs relied upon the unilateral act of one of its
\n    Directors in contending that time was extended for a
\n    reasonable period of 7 weeks after the period of the<\/p>\n
                                              ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                          48<\/span><\/p>\n
    contract     expired,         the       Plaintiffs        could         have           been
\n    granted equitable and discretionary reliefs but only<\/p>\n
    upon the Plaintiffs actually showing how they were to
\n    complete the sale which, in this case, was only by<\/p>\n
    tendering consideration therefor.                         Issue No.(11) is,
\n    therefore, answered in the negative.\n<\/p>\n
    67. Issue No.(12) :                This issue is not pressed and
\n    hence it need not be answered.\n<\/p>\n
    68. Issue No.(13) :       ig      The Defendant has taken up this
\n    contention       in    the    amended        Written       Statement.                  The
\n    agreement does not provide for filing of Form No.37EE<\/p>\n
    under Chapter XXA of the Income-tax Act. Forms 37 EE
\n    and 37I under Chapters XXA and XXC of the Income-tax<\/p>\n
    Act    are   required        to    be     filed    upon     transfer              of   any
\n    immovable     property        being        made.    The      word          transfer<\/p>\n
    shows    that    parties          have     actually       executed            a     draft
\n    conveyance,           mortgage,          exchange,        gift           or         lease<\/p>\n
    constituting transfer under the Transfer of Property
\n    Act.    It is only upon the ultimate contract between the
\n    parties to transfer the immovable property from one
\n    party to another that the Income Tax Authority could be<\/p>\n
    required to be informed as per the forms set out in the
\n    Act.     This would be to enable the Income Tax Authority
\n    to     acquire    the     immovable          property         itself           if      the
\n    consideration that passes thereunder is not accepted by<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                   49<\/span><\/p>\n
    the Authority and a certificate to that effect granting
\n    its no objection to transfer the property is not given.\n<\/p>\n
    Any transfer effected without informing the Income Tax
\n    Authority   by   filling   the      aforesaid      forms,          would         be<\/p>\n
    void.\n<\/p>\n
    69.      The stage of transfer would come only when the
\n    draft conveyance duly settled by the parties is shown
\n    to the Income Tax Authority.          This would be only at the<\/p>\n
    last stage before the actual execution of the document.<\/p>\n
\n    Hence   though   it   would\n                           ig      be    a    stage      in      showing           the\n<\/pre>\n
    readiness and willingness on the part of the Plaintiffs
\n    non-filing of the form simpliciter would not render the<\/p>\n
    agreement for sale invalid.           This contention if taken
\n    separately and by itself as a question of law, would<\/p>\n
    come up for consideration only when the draft deed of
\n    conveyance is prepared and sent by the Plaintiffs to<\/p>\n
    the Defendant for execution.             Since that was not done
\n    and the Suit was filed, the invalidity of the contract<\/p>\n
    on that score would not come up for consideration.
\n    Hence though required by law, the suit contract would
\n    not ipso facto become invalid for want of Form 37EE or
\n    37I.    Hence this issue to that extent is answered in<\/p>\n
    the negative.\n<\/p>\n
    70. Issue No.14 : The reliefs to be granted to the
\n    Plaintiffs are essentially under the liability relating<\/p>\n
                                                 ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                    50<\/span><\/p>\n
    to specific performance under the Specific Relief Act,
\n    1963 (the Act)and the various precedents based upon the<\/p>\n
    aforesaid admitted facts and documents of the parties.
\n    The suit contract is a contract which would fall under<\/p>\n
    Section 10 of the Act since it is not barred under
\n    Section 14 of the Act.             However, the jurisdiction to<\/p>\n
    grant     the     decree      of      specific       performance                  is
\n    discretionary under Section 20 of the Act.                         The Court
\n    would, therefore, not be bound to grant reliefs merely<\/p>\n
    because    it   is   lawful      to   do    so,    but        to      exercise
\n    reasonable discretion guided by judicial principles to<\/p>\n
    grant or refuse the reliefs of specific performance.
\n    Decree of specific performance as per Section 20(2)(a)<\/p>\n
    of the Act after the Plaintiffs             non-action within the
\n    stipulated      period   under      the    contract        or       within          a<\/p>\n
    reasonable period thereafter would give the Plaintiffs
\n    an unfair advantage over the Defendant in terms of the<\/p>\n
    price payable under the contract entered into about 30
\n    years ago and which has since much escalated.                         Besides,<\/p>\n
    the Court could exercise discretion to decree specific
\n    performance if the Plaintiffs had done substantial acts
\n    or suffered losses in consequences of the suit contract
\n    as a contract capable of specific performance under<\/p>\n
    Section 20(3) of the Act.              In the instant case, the
\n    Plaintiffs have done nothing after entering into the
\n    agreement and paying the earnest of Rs.50,000\/-.                                The
\n    Plaintiffs have also not suffered any losses.                                   The<\/p>\n
                                                  ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                        51<\/span><\/p>\n
    Plaintiffs have continued in possession. The Plaintiffs
\n    have only paid municipal taxes to avoid the property in<\/p>\n
    their   possession         being       auctioned       or    sold        off.        The
\n    Plaintiffs have never tendered consideration or even<\/p>\n
    shown   or    offered      to     tender      consideration              within          a
\n    reasonable        time    after     the       initial        period          of      the<\/p>\n
    contract     also.         It     is     argued       on     behalf          of      the
\n    Plaintiffs by Mr.Parikh that the Court may take into
\n    account    the     various      amounts       paid     to      the       Defendant<\/p>\n
    (which were actually at the behest or request of and to
\n    one of the Directors of the Defendant and not accepted<\/p>\n
    or acknowledged by the Defendant) as also amounts by
\n    way   of   taxes        which   were     otherwise          payable          by      the<\/p>\n
    Defendant as the owners of the property.                                  The very
\n    premise      is    unreasonable,         if     not        egregious.                The<\/p>\n
    Plaintiffs        are    required        to     make        payment         of       the
\n    consideration       agreed.       Had     the    Plaintiffs            made        that<\/p>\n
    payment within 10 months or within a reasonable time
\n    thereafter, the Plaintiffs would have become owners of<\/p>\n
    the suit property.              They would then be required to
\n    incur all other costs, including the payment of taxes,
\n    etc. in respect of the suit property.                           The Defendant
\n    notionally continued as owner though it agreed to give<\/p>\n
    up its ownership rights to the Plaintiffs under the
\n    said Agreement and was hence not liable to pay the
\n    municipal taxes.          It is only because of the Plaintiff s
\n    default      in    completing           the     transaction             that         the<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                           52<\/span><\/p>\n
    Plaintiffs paid taxes though they were not entered as
\n    owners in the record of rights.                      Since the Plaintiffs<\/p>\n
    were already in possession of a large portion of the
\n    suit property as tenants, the Plaintiffs in fact had an<\/p>\n
    unfair advantage over the Defendant.                              The Defendant
\n    could    not     deal    with     or       dispose    of     the      property            to<\/p>\n
    another partly in view of the Plaintiffs                                  occupation
\n    and     possession.       It     would        be     most      inequitable                to
\n    consider       the      amounts        paid    by     way       of       taxes          for<\/p>\n
    preservation of the property towards the sale price.\n<\/p>\n
    71. In fact a strange position has arisen.                               The amount
\n    paid by the Plaintiffs towards the taxes by now (as<\/p>\n
    shown by the Plaintiffs in their statement of such
\n    payment) far exceeds the consideration to be paid by<\/p>\n
    the Plaintiffs agreed under the said Agreement to the
\n    Defendant to complete the sale.                        If the Plaintiffs<\/p>\n
    claim has to be accepted, it would tantamount to the
\n    Court     requiring       to     decree        the     Suit        for        specific<\/p>\n
    performance       without       the        Plaintiffs       having         to     pay       a
\n    single rupee to the Defendant and in fact the Defendant
\n    having     to     reimburse          the      Plaintiffs          of       what         the
\n    Plaintiffs       called        the     excess        amount        paid         by      the<\/p>\n
    Plaintiffs after the filing of the Suit and which is
\n    not   even      brought    on     record       as    an    amendment             to     the
\n    Plaint.\n<\/p>\n
                                                          ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                          53<\/span><\/p>\n
    72.         Even    rejecting        completely          the      appropriation
\n    sought by the Plaintiffs towards the purchase price for<\/p>\n
    the sale consideration, it has to be seen whether the
\n    Plaintiffs could be at all entitled, in view of the<\/p>\n
    answers     to     issue      Nos.(1),        (3)    and        (4)       that         the
\n    Plaintiffs be allowed to pay only the agreed balance<\/p>\n
    consideration of Rs.19.5 Lakhs to complete the sale 28
\n    years after the agreement was entered into. Knowing the
\n    inequities of such a relief, Mr.Parikh has contended<\/p>\n
    that the Plaintiffs may be directed to pay such higher
\n    amount as the Court may deem fit in its discretion to<\/p>\n
    grant the discretionary relief of specific performance
\n    upon such enhanced payment.                       Mr.Parikh has conceded<\/p>\n
    that in view of the lapse of time and non-payment of
\n    consideration coupled with the rise in prices, it would<\/p>\n
    be    inequitable        to     grant        the    relief          of       specific
\n    performance to the Plaintiffs.                     (See : K.S. Vidyanadam<\/p>\n
    &    ors.   vs.    Vairavan,     AIR<\/a>        1997    SC   1751).              However,
\n    Mr.Parikh argued that relief of specific performance<\/p>\n
    could not be refused merely because the prices have
\n    risen. (See : S.V.R. Mudaliar (dead) by LRs. & ors. vs.
\n    Mrs.Rajabu F. Buhari (Dead)<\/a> by LRs. & ors., AIR 1995 SC
\n    1607).\n<\/p>\n
    73.         Consequently,         Mr.Parikh          essentially                 relied
\n    upon a judgment in the case of Nirmala Anand vs. Advent
\n    Corporation        (P)   Ltd.    &        ors.<\/a>,    AIR   2002        SC      3396        to<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                        54<\/span><\/p>\n
    contend that any higher amount be determined by the
\n    Court    to   grant      specific       performance.               The       case        of<\/p>\n
    Nirmala Anand (supra), though for specific performance,
\n    is based upon a wholly different premise. She was one<\/p>\n
    of the flat purchasers in a building.                               For whatever
\n    reason the builders could not and did not complete the<\/p>\n
    construction of the flat after receiving payments from
\n    the flat purchasers, including Nirmala.                         Others settled
\n    with the builders.          Nirmala did not.                She tenanciously<\/p>\n
    litigated     for    a    number    of       years      when       the       relevant
\n    permission      could      be
\n                              ig    obtained           by     the       builders             to
\n    complete the construction.               Nirmala agitated her right
\n    of specific performance for being granted the flat for<\/p>\n
    which she had paid the entire agreed consideration. She
\n    was not a party who would obtain an unfair advantage by<\/p>\n
    escalation of prices.              She had performed her part of
\n    the contract completely.                She had made payment of the<\/p>\n
    entire consideration. She did not fall under Section
\n    20(2)(a) of the Act as do the Plaintiffs in this Suit.\n<\/p>\n
    She would not obtain any unfair advantage over the
\n    Defendant in that case merely because she would obtain
\n    possession of her flat by the Defendant specifically
\n    performing the agreement of the flat purchasers.                                       The<\/p>\n
    terms of the contract and the conduct of the parties
\n    is,     therefore,       material       to    exercise          discretion               to
\n    decree    specific       performance.           In       this        regard,           the
\n    specific      mandate     of    Section       20     which         makes         relief<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                     55<\/span><\/p>\n
    discretionary     and    enjoins           the    Court          to       exercise
\n    discretion      judiciously          and     reasonably                 and         not<\/p>\n
    arbitrarily is to be seen.\n<\/p>\n
    74.     The     relevant    portion         of    Section           20      of      the
\n    Specific Relief Act runs thus:-\n<\/p>\n
                       Discretion and powers of Court\n<\/p><\/blockquote>\n
            20.      Discretion          as     to    decreeing               specific<\/p>\n
            performance.       (1)       The    jurisdiction              to      decree
\n            specific performance is discretionary, and the<\/p>\n
            Court is not bound to grant such relief merely
\n            because     it     is    lawful          to    do      so;        but       the<\/p>\n
            discretion of the Court is not arbitrary but
\n            sound     and    reasonable,             guided          by       judicial<\/p>\n
            principles       and     capable         of     correction              by      a
\n            Court of appeal.\n<\/p><\/blockquote>\n
            (2) The following are cases in which the Court<\/p>\n
            may properly exercise discretion not to decree
\n            specific performance-\n<\/p><\/blockquote>\n
            (a)where the terms of the contract or the<\/p>\n
            conduct of the parties at the time of entering
\n            into the contract or the other circumstances
\n            under which the contract was entered into are
\n            such that the contract, though not voidable,<\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                          56<\/span><\/p>\n
                 gives the plaintiff an unfair advantage over
\n                 the defendant; or<\/p>\n<\/blockquote>\n
                 (b) . . . . .\n<\/p><\/blockquote>\n
                 (c) . . . . .\n<\/p><\/blockquote>\n
The terms of the contract in this case show, as aforesaid,
\nthat the Plaintiffs had only to make payment of the balance
\nconsideration to complete the sale. The Defendant had to<\/p>\n
perform no other part.             No action of the Defendant was
\ncondition precedent to the Plaintiffs paying the balance<\/p>\n
consideration.         In   a   simple        contract     such        as      this        the
\nPlaintiffs must actually tender or at-least show that they<\/p>\n
were prepared to tender the balance consideration within
\nthe     period    allowed       under     the     contract           or       within           a<\/p>\n
reasonable period thereafter.                 Suing instead of and without
\ntendering the balance consideration or without offering to<\/p>\n
tender it in Court or deposit in Court upon such suing
\nwould    give    the    Plaintiffs      an     unfair    advantage             over the<\/p>\n
Defendant.       The conduct of the Plaintiffs in view of the
\nterms of the suit contract and the following circumstance
\nof suing as soon as the Plaintiffs received the notice of
\ntermination without even requiring the Defendant to accept<\/p>\n
their performance within a reasonable time thereafter shows
\nthat even if the contract is not voidable at the instance
\nof the Defendant, (since it did not make time the essence
\nof the contract and give the Plaintiffs the 15-day agreed<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                      57<\/span><\/p>\n
notice of termination before terminating the contract,) the
\nPlaintiffs    would    obtain      an     unfair        advantage             over        the<\/p>\n
Defendant if after 28 years the contract is allowed to be
\nperformed albeit upon additional consideration.                              This is a<\/p>\n
case in which the Plaintiffs simpliciter refrained from
\nperforming their part of the contract, their averment of<\/p>\n
readiness and willingness notwithstanding.                           That averment
\ncame to be only made but not shown or substantiated. Hence
\nthe observation in the case of               Nirmala Anand (supra)that<\/p>\n
the Plaintiffs could not be denied the relief of specific
\nperformance merely on account of phenomenal increase in<\/p>\n
price during the pendency of the litigation, though it is
\none of the considerations, cannot be applied to this case<\/p>\n
where the Plaintiffs, unlike Nirmala Anand (supra), would
\notherwise not be entitled to the discretionary reliefs as<\/p>\n
having performed their part of the contract.\n<\/p>\n
    75.       The     case    of   Nirmala        Anand      (supra)          has       been<\/p>\n
    clarified    in    the    case      of   P.    D Souza          vs.       Shondrilo
\n    Naidu,<\/a> (2004) 6 SCC 649. The ruling in the case of
\n    Nirmala   Anand     (supra)is       held      not     to     be      the       law      in
\n    absolute terms in all such cases also requiring the<\/p>\n
    Court to either refuse to grant specific performance or
\n    to direct the Plaintiff to pay higher sum, that being
\n    the   case   where       the   Defendant        did       not       foresee           the
\n    hardship.    Explanation-1 to Section 20 relating to mere<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                         58<\/span><\/p>\n
    inadequacy of consideration not constituting an unfair
\n    advantage was applied.             In that case the Defendant was<\/p>\n
    the landlord of the Plaintiff.                    He had accepted part
\n    payment from time to time without any demur whatsoever.\n<\/p>\n
    He    had   redeemed         the   mortgage      upon      receipt           of      the
\n    requisite payment.             Immediately prior to the Suit he<\/p>\n
    had    accepted        the     further     payment.               Under          those
\n    circumstances,         the     Plaintiff         was    granted            specific
\n    performance without payment of any further amount upon<\/p>\n
    escalation       of     prices.            The     time        for         specific
\n    performance      of    theig   contract     was    held       not       to      be     of
\n    essence when the Defendant accepted part payment and
\n    also sought extension of time for registering the sale-\n<\/p>\n
    deed as in the case of P. D Souza (supra).                                Hence in
\n    the case of P. D Souza (supra), the Supreme Court held<\/p>\n
    when the Plaintiff was seen to be ready and willing to
\n    perform his part of the contract and had performed the<\/p>\n
    contract and in fact the Defendant had accepted part
\n    payment and applied for extension of time, specific<\/p>\n
    performance was rightly granted without ordering the
\n    Plaintiff to pay any higher price than that agreed in
\n    the agreement executed 27 years prior to the date of
\n    that order.\n<\/p>\n
    76.         It   can    be     seen      that    determination               of      the
\n    discretionary reliefs depends upon the facts of the
\n    case rather than upon the analogy drawn from other<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n                                 59<\/span><\/p>\n
    cases based on dissimilar facts.            Consequently, where
\n    there was an inaction on the part of the purchasers for<\/p>\n
    two and half years in violation of the terms of the
\n    agreement,   considering    the    rise     in      prices          specific<\/p>\n
    performance was refused in the case of K.S. Vidyanadam
\n    (supra). Where the Plaintiff had performed her part of<\/p>\n
    the   contract    by   paying    consideration           and        required
\n    possession   to   be   granted   of   the    flat        agreed          to     be
\n    purchased by her, in view of the large lapse of time<\/p>\n
    specific performance was granted albeit on slightly a
\n    larger amount directed to be paid by the Plaintiff<\/p>\n
    Rs.6.25 Lakhs instead of Rs.60,000\/- (Rs.35,000\/- + Rs.
\n    25,000\/-] as previously agreed before the escalation in<\/p>\n
    prices – in the case of Nirmala Anand (supra) and the
\n    specific performance was granted without having to pay<\/p>\n
    any additional amount by way of escalation of prices in
\n    the case of P. D Souza (supra).\n<\/p>\n
    77.      This is a case for rejection of the relief of<\/p>\n
    specific performance for want of performing the only
\n    part of the contract which had to be performed by the
\n    Plaintiffs alone.\n<\/p>\n
    78.      Hence the Suit is dismissed.                 No order as to<\/p>\n
    costs.\n<\/p>\n
                                       (SMT.ROSHAN DALVI, J.)<\/p>\n
                                                ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n            60<\/span><\/p>\n
                ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>
\n            61<\/span><\/p>\n
                ::: Downloaded on – 09\/06\/2013 15:56:35 :::<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court Pankaj Anantrai Bhuwa & Ors vs M\/S.Ramkumar Shivchandray & Sons on 7 May, 2010 Bench: R. S. Dalvi 1 PGK IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Suit No.391 of 1982 1.Pankaj Anantrai Bhuwa & ors. .. .. Plaintiffs v\/s. M\/s.Ramkumar Shivchandray & sons .. .. Defendant […]<\/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":[11,8],"tags":[],"class_list":["post-95548","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nPankaj Anantrai Bhuwa & Ors vs M\/S.Ramkumar Shivchandray & Sons on 7 May, 2010 - 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\/pankaj-anantrai-bhuwa-ors-vs-ms-ramkumar-shivchandray-sons-on-7-may-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pankaj Anantrai Bhuwa & Ors vs M\/S.Ramkumar Shivchandray & Sons on 7 May, 2010 - 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