Full Judgment Text
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CASE NO.:
Appeal (civil) 2957 of 1997
PETITIONER:
LALIT KUMAR JAIN & ANR.
Vs.
RESPONDENT:
JAIPUR TRADERS CORPORATION PVT. LTD.
DATE OF JUDGMENT: 24/04/2002
BENCH:
R.P. Sethi & P. Venkatarama Reddi
JUDGMENT:
P.VENKATARAMA REDDI, J.
By the impugned judgment, the High Court at Allahabad
allowed the first appeal filed by the respondent-plaintiff, decreed the
suit and ordered that the plaintiff should be put in physical possession
of the suit properties and the indenture (sale deed) dated 22.2.1971
should be deemed to be void and cancelled and therefore be delivered
up to the plaintiff-vendor. A decree was also granted for a sum of
Rs.95,000/- being the value of properties wrongfully demolished and
sold, after adjustment of Rs.55,000/- received by the plaintiff towards
the sale consideration. The suit was ostensibly filed under Section 31
of the Specific Relief Act for cancellation of indenture dated
22.2.1971 and also for physical possession of the property in dispute
and for recovery of Rs.95,000/- being the value of property
wrongfully demolished after adjusting an amount of Rs.55,000/-.
The Trial Court dismissed the suit. At the same time, it granted a
decree in favour of the plaintiff for a sum of Rs.1,45,000/-
representing the balance sale consideration.
The facts giving rise to the suit and the appeal are these :
The plaintiff-Company executed a sale deed on 22.2.1971 in
favour of the defendants in respect of an oil mill located at Khurja in
UP State with the structures, open land, machinery and fixtures, lease-
hold rights in the land etc. for a consideration of Rs.2 lakhs. A sum
of Rs.50,000/- was to be paid before the Sub-Registrar at the time of
registration and it was stipulated in the sale deed that the balance
amount will be paid in two instalments falling on 15.3.1971 and
30.4.1971. It was further stipulated that the transferee shall not be
entitled to deal with, sell, transfer or assign the property sold, till such
time as the entire balance sale price of Rs.1.50 lakhs was paid to the
transferor. A sum of Rs.50,000/- was accordingly paid to the
transferor on the date of registration. Possession was admittedly
handed over to the defendants. The respondent-plaintiff produced the
income tax clearance certificate on the date of registration i.e.
22.2.1971. However, before the formalities of registration viz.,
copying out the deed was completed, the Sub-Registrar received a
communication from the Income Tax Officer that the I.T.C. was
cancelled and therefore the Sub-Registrar should stop registration of
the property till a fresh certificate was issued by him. Therefore, the
Sub-Registrar did not take further steps in the matter. Moreover, the
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sale deed was impounded on the ground of insufficient stamp and it
was sent to the District Registrar for adjudication. By an order dated
4.1.1972, the Income Tax Officer revoked his earlier order and
restored the certificate issued by him earlier. On appeal by plaintiff,
the Commissioner of Income Tax directed the Income Tax Officer to
issue a fresh I.T.C. instead of validating the earlier one. On
13.6.1972, a fresh I.T.C. was issued. The document which was sent
for assessment of deficient stamp duty was received back by the Sub-
Registrar on 3.5.1973. When there was a notice from the Sub-
Registrar in August 1973 to furnish the I.T.C. for the purpose of
registration, the plaintiff in its reply dt. 28.8.1973 maintained that the
document was no longer effective as the contract stood rescinded on
account of the breach committed by the defendants in declining
payment of balance sale price. Sub-Registrar was requested to return
the document without registration. The Sub-Registrar, by his order
dated 19.9.1973, refused to register the document as ITC was not
produced. An appeal was filed against the said order by the
appellants-defendants before the District Registrar. On 16.10.1973
the appellants also filed a civil suit impleading the respondent, Sub-
Registrar and also the I.T.O. for a direction that I.T.C. should be
issued and the Sub-Registrar should register the sale deed. On
3.7.1976, the suit out of which the present appeal arises was filed
seeking the relieves as stated above. In that suit, a disclosure was
made as to obtaining the fresh I.T.C. On 24.12.1976, the District
Registrar allowed the appeal and directed the Sub-Registrar to register
the sale deed. In view of this subsequent event, the Income Tax
Officer also sent a copy of I.T. clearance certificate to the Sub-
Registrar. The formalities of registration of sale deed were then
completed on 28.12.1976. The suit filed by the appellants therefore
became infructuous. The appellants amended the plaint in the
present suit questioning the legality of the order of Dy.Registrar and
the consequential action of Sub-Registrar in registering the sale deed.
On 27.08.1979, offer was made to pay the balance consideration by
issuing a notice but the respondent refused to accept payment taking
the stand that the matter was sub-judice. The suit in question was
dismissed on 2.5.1980 subject to the direction as to the payment of
balance of sale money. The money was deposited in court thereafter.
The first appeal to the High Court filed by the respondent herein was
allowed by the impugned judgment dated 5.7.1996.
It is now necessary to advert to certain other events that
happened between the date of presentation of sale deed for registration
and the date of filing of the suit including the exchange of
correspondence. On 16.3.1971, plaintiff issued notice to defendants
to pay Rs.50,000/- towards the first instalment specified in the
indenture of sale. The defendants expressed their willingness to pay
the amount provided that the plaintiff obtained a fresh ITC. On
12.1.1972, a second notice was issued from the plaintiff’s side
informing the defendants that they have illegally withheld the
payment due under the terms of sale for which they were liable to pay
interest and further protesting against the demolition of portions of
building and sheds and disposing of the building material and
machinery. This was replied to by the defendants stating that in the
absence of valid Income Tax Clearance Certificate the sale deed could
not be delivered after due registration and therefore they were not
liable to pay the balance sale price. Moreover, the defendants referred
to the fact that one of the Directors of the plaintiff-Company by name
Raj Kumar Meattle agreed not to demand the balance unless the fresh
clearance certificate was obtained and other formalities connected to
the sale were fulfilled. The alleged settlement took place on
17.1.1972 on which date a sum of Rs.5,000 was paid to the said
Director. One more fact, which according to the defendants justified
the withholding of payment, was the suit filed by one Seth Shanti Lal
questioning the validity of the sale. In the concluding para it is stated
: "I would request you not to stick to your unreasonable demand for
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the balance money and let the clear picture emerge". I again assure
you that the balance will be paid the moment these formalities are
complied". A third notice was issued by the plaintiff on 25.5.1973.
By that time it may be noted that a fresh ITC was issued to the
plaintiff and the document which was impounded for assessment of
deficient duty was received back in the office of the Sub-Registrar,
Khurja. By the notice dated 25.5.1973, the plaintiff found fault with
the defendants in declining payment of balance money on the ground
of cancellation of ITC and alleged that the defendants committed
breach of contract by wrongfully withholding the payment and also
demolishing and dealing with the property quite contrary to the
prohibition contained in the sale deed. The plaintiff then gave last
opportunity ’to make the balance sale price together with interest at
the rate of one per cent per month within a period of 15 days upon
which the requisite certificate under Section 230-A of the Income Tax
Act will be produced’. The defendants were further warned that in
case of failure to make the payment, the contract of sale dated
22.2.1971 will stand rescinded and the defendants will be liable to
restore the possession of all the properties covered by the sale deed
and to compensate the plaintiff for the damage done to the properties.
The defendants sent a reply reiterating that there was a clear
agreement on 17.6.1971 arrived at on the intervention of plaintiff’s
Director Shri Raj Kumar Meattle and the payment of Rs.5,000/- made
pursuant to such agreement. The defendants once again referred to
the suit filed by Seth Shanti Lal Jain impleading both the plaintiff and
the defendants. The defendants also called upon the plaintiff to bear
the amount of Rs.2,980/- on account of extra stamp expenses. In the
concluding para it is stated, "I hope you will wait for the payment till
the formalities are completed and the suit of Seth Shanti Lal is
decided finally". A month later, i.e. on 3.7.1973, the 4th and final
notice came to be issued by the plaintiff. In that notice it was stated
that Shri Raj Kumar Meattle had no authority to give any assurance or
make any commitment on behalf of the plaintiff-Company, that too
without any resolution of the Board of Directors. The plaintiff offered
to give credit to the additional stamp duty said to have been paid by
the defendants of Rs.2,980/-. The defendants were then informed of
the dismissal of the suit filed by Shanti Lal Jain for default.
Moreover, the plaintiff took the stand that the suit of Shanti Lal Jain
was a frivolous suit and that the pendency of the suit ought not to be a
ground to withhold the payment. The plaintiff was even willing to
waive the claim for interest and handover the requisite certificate
under Section 230-A of the Income Tax Act, provided that balance
consideration of Rs.1.50 lakhs subject to adjustment of Rs.5,000 and
the excess stamp duty, was paid to it within 15 days. The defendants
were warned that if they failed to make the payment as aforesaid
within the stipulated time which is of essence, the contract of sale
dated 22.2.1971 shall stand rescinded in which case the defendants
will have to restore all the properties to it within 15 days thereafter.
On 19.7.1973, the defendants sent a reply through their lawyers
wherein it was asserted that the plaintiff was legally bound to
complete the formalities pertaining to registration and to deliver the
sale deed before they could ask for the balance sale money. Further,
the plaintiff was notified that the demand of balance money even
before the suit of Seth Shanti Lal was finally decided, was unjustified.
An assurance was given that the entire balance amount will be paid
when all the formalities are completed and the title was proved in the
pending litigation. The plaintiff was called upon to produce the ITC
before 3.9.1973 as per the requisition made by the Sub-Registrar.
Thereafter, the plaintiff sent a letter on 28.8.1973 to the Sub-Registrar
stating that the defendants committed breach of contract of sale and
therefore, the contract stood rescinded. The Sub-Registrar was
informed that the document was no longer effective and the question
of registration of that document on the production of ITC as required
in his letter did not arise at all. The Sub-Registrar was requested to
return the document without registration. It appears that the suit of
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Seth Shanti Lal Jain which was filed on 7.4.1971 was finally
dismissed on 10.4.1978. It was dismissed for default earlier and
restored.
The Trial Court held that the defendants did not commit breach
of the contract in not paying the balance price before the registration
of the sale deed and the plaintiff had no right to rescind the contract.
In fact, there was no rescission because the plaintiff did not send
specific intimation of rescission of contract with effect from a
particular date. The learned trial Judge further held that the contract
was neither voidable nor terminable by the plaintiff and therefore
Section 27 or 31 of the Specific Relief Act was not attracted.
According to the trial court, the sale was complete and title passed
irrespective of non-payment of balance sale price. The following were
the circumstances relied upon by the Trial Court for reaching the
conclusion that no breach was committed by the defendants and the
plaintiff was not entitled to put an end to the contract are :-
1. The plaintiff got the I.T.C. cancelled by setting up his relative
by name Shri R.K. Meattle to file a complaint;
2. After the certificate was restored on 4.1.1972, the plaintiff
instead of filing the order of I.T.O., challenged that order on
the ground that fresh certificate should have been issued, for
which there was no bona fides on the part of the plaintiff.
Moreover, the factum of restoration or issuance of fresh
clearance certificate was not intimated to the Sub-Registrar;
3. The plaintiff having knowledge of the fact that the document
has not been registered for want of I.T.C. was not justified in
making demand for payment of balance money;
4. On the intervention of Shri R.K. Meattle one of the Directors
of the plaintiff-Company, a binding agreement came into being
according to which the terms of the contract as to the payment
of balance money got altered. The undertaking given by Shri
R.K. Meattle on 17.8.1971 was binding on the plaintiff and in
fact the plaintiff acted according to that undertaking by not
demanding the payment for about a year; and
5. On account of the suit filed by Seth Shanti Lal Jain in the year
1971 claiming to be the co-owner of the properties, there was a
bona fide doubt in the mind of the defendants as regards title
and that is the reason why a commitment was made by the
plaintiff through its Director, Shri R.K. Meattle.
6. In the circumstances of the case the time for payment stipulated
in the sale deed cannot be regarded as the essence of the
contract.
The learned trial Judge observed thus :-
"In fact, it was a breach of the contract from the
side of the plaintiff, who deliberately did not
manage the affairs in such a way that the clearance
certificate may be produced before the Sub
Registrar, Khurja, at an earliest and the registration
of the document could be completed. It appears to
me that the plaintiff was only interested in the
payment of balance sale consideration of Rs. One
lac fifty thousand and he was not interested in the
registration of the document. The circumstances
and conduct of the plaintiff are as such which go
against the plaintiff and show that it was the
plaintiff on whose account the document could not
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be registered. The non payment on the stipulated
dates by the defendants was justifiable because the
time was not the essence of the contract."
The High Court was of the view that under the contract title to
the property would pass only on the payment of the entire sale
consideration, that the Trial Court committed an error of law by
holding that time was not essence of the contract and title had passed
even before the payment of balance money. The High Court then
observed that Section 47 of the Registration Act does not come to the
aid of the defendants because the contract was terminated for valid
reason before the document was registered. Referring to the suit of
Seth Shanti Lal jain, the High Court observed that the defendants
having enjoyed property after taking possession should have made the
payment first and sue the plaintiff for indemnification, if necessary.
Referring to the alleged agreement entered into between Shri R.K.
Meattle and the defendants, the High Court observed that the alleged
agreement was not believable. The High Court then observed that
the appellant should have made the payment at least after the final
notice sent in July, 1973, wherein it was mentioned that I.T.C. was
procured and the sale deed could be got registered on payment of
balance money. The High Court was therefore of the view that the
defendants failed to fulfil the contractual obligation on their part and
therefore the contract was voidable and could be repudiated by the
plaintiff. The appeal was therefore allowed and the suit was decreed.
It is the contention of the appellants that the requirements of
either Section 31 or 27 are not attracted to the present case and
therefore the suit itself is misconceived. It is contended that the
rescission of executed contract on account of non-payment of balance
sale consideration does not arise as the title passed to the appellants
with the registration of document and delivery of possession. Though
the formalities of registration were completed on 24.12.1976, the
registration, by virtue of Section 47 of Indian Registration Act must
be deemed to have related back to the date the sale deed was executed
i.e. 22.2.1971. Therefore, the so-called rescission for the alleged
breach of the terms of the contract subsequent to its execution has no
legal sanctity. The only remedy of the plaintiff was to recover the
balance sale price for which a statutory charge is provided in respect
of the property. It is pointed out that the view taken by the High
Court that the payment of balance money on the stipulated dates was a
condition precedent for passing the title is erroneous in law. The
restriction against sale, transfer or assignment offends Section 10 of
the Property Act; moreover, such a condition does not detract from the
irrevocable nature of sale transaction. It is submitted that the contract
is neither voidable nor terminable by the plaintiff and therefore the
conditions requisite for seeking relief under Section 27 or 31 of the
Specific Relief Act are not attracted. The plaintiff could not
unilaterally put an end to the contract under Section 39 of the Contract
Act on the ground that the defendants refused to perform the promise
to pay the balance money within the stipulated time as Section 39 is
wholly inapplicable to the contract which was complete and which
had been acted upon. In any case, it is submitted that there was no
breach of the contractual terms by the appellant and there was ample
justification for non-payment of balance sale price within the time
stipulated in the sale deed or in the notice issued by the plaintiff.
Reliance in this connection is based on the findings of the Trial Court.
On the other hand, it is contended on behalf of the respondents
(defendants) that there was no general rule that mere registration of
the document without reference to other circumstances would operate
to transfer the title. The clause in the sale deed prohibiting transfer or
assignment by the vendor till the balance money was paid spells out
an intention to make the passing of title conditional on payment
thereof. In any case, it is submitted that the plaintiff was well justified
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in rescinding the contract in the year 1973 before the actual
registration of the document and therefore the registration does not
impart any sanctity to the purported sale. Section 47 of the
Registration Act has no application in this fact situation and the theory
of dating back cannot be invoked by the defendants. The refusal to
pay the balance sale consideration on the ground of pendency of suit
of Seth Shanti Lal and the alleged agreement with one of the Directors
of the plaintiff-Company is wholly untenable and amounts to refusal
to perform the contract within the meaning of Section 39 of the
Contract Act. The contract, it is submitted, is voidable on account of
persistent refusal by the defendants to pay the balance sale
consideration even after the notice was given by the plaintiff making
the time the essence of contract. Having thus clarified the legal
position, the learned senior counsel for the respondents have taken us
through the correspondence and the findings of the High Court in
support of his argument that the plaintiff was amply justified in
putting an end to the contract when it became apparent that the
defendants were in no mood to fulfil the essential promise under the
contract. Finally, the learned senior counsel contended that the
conduct of the defendants was most reprehensible. Having taken
possession and started enjoying the property soon after the execution
of the sale deed and even gone to the extent of demolishing the
structures, failed to pay the balance money. On these grounds, the
judgment under appeal is sought to be supported by the learned
counsel for the respondents.
We are of the view that the High Court failed to address itself to
certain crucial factors which disentitles the plaintiff to equitable relief.
The High Court reversed a well considered judgment of trial Court
without adverting to the reasoning of trial Court except in a cursory
manner. In the view we are taking, it is not necessary for us to dilate
on various legal issues debated before us. We shall proceed on the
basis that in law the plaintiff could annul the contract of sale before
the act of registration got completed and title passed to the appellants.
We shall further assume that the plaintiff in fact rescinded the contract
with effect from the date of expiry of the time stipulated in the 4th and
final notice dated 3.7.1973. If such rescission or termination of
contract is not justifiable on facts or having regard to the conduct of
the plaintiff, the equitable relief under Section 27 or 31 of the
Specific Relief Act has to be denied to the plaintiff, no further
question arises for consideration. In such a case, the appellants’ plea
has to be accepted and the suit is liable to be dismissed.
Before we proceed further, we would like to make it clear that
it is not our endevour to re-appreciate the evidence on record and to
disturb the findings of fact, had they been arrived at on a
consideration of all the relevant matters and the evidence on record.
Let us now take stock of those relevant and important aspects. The
first aspect which needs to be adverted to is the conduct of the
plaintiff vis--vis the production of Income Tax clearance certificate.
On a petition filed by the nephew of one of the Directors of plaintiff-
Company, the ITC was cancelled when the document was about to be
registered. This fact was admitted by Shri B.D. Meattle, Director of
the plaintiff-Company, who was examined as a witness for the
plaintiff. The finding of the trial Court is that the complaint was filed
at the instance of the plaintiff. This part of the finding of the trial
Court is based on probabilities, though not positive evidence, coupled
with the fact that the circumstances in which the nephew filed the
petition were not explained by the plaintiff’s witness. The second
aspect which evoked adverse comments of the trial Court is the fact
that after the ITC was restored by the Income Tax Officer, the
plaintiff challenged the order of the ITO contending that it was an
illegal order and a fresh certificate should have been issued. This
move on the part of the plaintiff was evidently meant to delay the
process of registration and casts any amount of doubt on the bona
fides of plaintiff. Moreover, even after obtaining a fresh certificate
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pursuant to the order passed by the higher authority, the plaintiff did
not make the defendants or the Sub-Registrar aware of this fact for
more than a year. It was only in the letter dated 3.7.1973, an
indication was given that the certificate under Section 230(A) of
Income Tax Act was available. What is more surprising is that the
plaintiff returned the certificate to Income Tax Office on 10.9.1974
(vide paras 34 and 35 of trial Court’s judgment). These facts noticed
and commented upon by the Trial Court were not at all adverted to by
the High Court. The plaintiff cannot on the one hand withhold the
production of I.T.C. which was essential for registration and on the
other hand take the stand that the defendants committed breach of
contract.
The other important aspect which did not receive due
consideration from the High Court is the agreement or understanding
arrived at between the Director of the plaintiff-Company - Shri R.K.
Meattle and the defendants on 12.8.1971. By that time, a suit was
filed by one Shri Shanti Lal Jain claiming rights over the suit schedule
property. The plaintiff and the defendants in the present suit were
also impleaded therein. At that juncture, informal agreement was
reached.
Tfhoellaogwrse:e-ment couched in the form of a letter reads as
Dear Sir,
Yesterday Shri R.K. Meattle, a Director of
your firm came to us and requested to pay a sum of
Rs.5,000/- against the arrears of the sale deed
executed by your firm in our favour for the
expenses to get the dispute decided so that
formality of sale deed may be completed soon with
the assurance that your firm will not claim further
any amount, out of arrears till all the formalities
are finally completed.
Yours faithfully
(Raj Kr. Poddar)
(Lalit Kumar Jain, Khurja)
Yes, this is our proposal and
our firm agrees on this
settlement
(Sd) 12.8.1971
Director
For Jaipur Trading Corp. (P) Ltd.
The commitment made in this letter was construed by the trial
Court as a change in the terms of the contract by reason of which the
demand for the payment of balance sale consideration was deferred
till all the formalities were completed and the litigation was settled.
The contention that Shri R.K. Meattle acted without authority and
therefore the commitment made by him was not binding on the
plaintiff-Company was not accepted by the Trial Court. The High
Court reversed this finding on the ground that no prudent person
would agree to such arrangement which had the effect of postponing
the demand of balance sale price till the dispute was settled and/or the
formalities of registration were completed. The High Court observed
that in the absence of proper authorisation by the Company, the
alleged undertaking was not believable. Whether the alleged
agreement is true and binding is no doubt primarily a question of fact.
But for the fact that the High Court overlooked certain material
factors which have vital bearing in arriving at a finding on this point,
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this Court would not have though of probing into a factual aspect.
The averments in the plaint and the material portion of the deposition
of the plaintiff’s witness were not adverted to while reaching a finding
in this regard. In the plaint, the factum of sending Shri R.K. Meattle
to the defendants and Shri R.K. Meattle signing the letter are
admitted. But, what is stated in the plaint is that Shri Meattle was not
authorised to do so. When we come to the deposition of Shri B.D.
Meattle examined as P.W.1, a version was put forward that the letter
was got forcibly written by the defendants. If that is so, and if the
private limited company having two Directors at the relevant point of
time (R.K. Meattle and B.N. Ahuja) did not approve of the action of
R.K. Meattle, why did the plaintiff keep silent for nearly two years
without questioning the authority of Shri Meattle? This question
remained practically un-answered. Shri B.D. Meattle merely stated
that the defendants had no money and therefore they sought time. It is
needless to say that this explanation is vague and irrelevant. Another
important fact is that the bank draft for the amount of Rs.5,000/-
received from the defendants was not returned and it is not the case of
the plaintiff that the draft was not credited to their account. When
Shri B.D. Meattle (P.W.1) was confronted with this fact, he came
forward with a peculiar explanation that the relationship was not so
much strained and therefore the bank draft was not returned. If at all,
this is a factor which goes in favour of the defendants rather than the
plaintiff. All this would show that the plaintiff consciously agreed to
honour the understanding arrived at between the Director of the
Company Shri R.K. Meattle and the defendants which was reduced
into writing in the form of a letter. If that agreement is true and
binding, as has been held by the Trial Court, the plaintiff could not
have rescinded the contract in September 1973, despite the fact that
the suit filed by Seth Shanti Lal Jain was pending and the formalities
requisite for completion of registration were not completed. It may be
an imprudent act on the part of Shri R.K. Meattle, going by the tenor
of arrangement, but, in the absence of any allegations of collusion
and mis-representation, the Court cannot disregard the agreement
embodied in the letter dated 12.8.1971 which was believed by the trial
Court. We are, therefore, of the view that reversal by the High Court
of the trial Court’s finding on this aspect is unwarranted and as
already noted, is vitiated by non-consideration of the relevant material
on record. This Court has, therefore, no option but to disturb the
factual finding reached by the High Court.
One more fact which disentitles the plaintiff to the equitable
relief under Section 27/31 of the Specific Relief Act is the un-
explained delay in filing the suit after the exchange of notices in
September 1973. Almost three years later, the suit was filed. This
inaction has its own revelation. Either the plaintiff did not stand by
his declaration to rescind the contract, as held by the trial Court, or the
plaintiff was sitting on the fence and waiting to see whether the turn
of events would be to his advantage or disadvantage.
If the above facts and circumstances are cumulatively
considered, the plaintiff has no legitimate ground to seek the equitable
remedy. While these are the factors that can be put against the
plaintiff, the defendants-appellants are not free from blame. We
cannot lose sight of the fact that their conduct is also open to question.
The defendants, in the initial stages, insisted on income-tax clearance
certificate. When the defendants were informed of the readiness of the
plaintiff to hand over the ITC subject to payment of balance money
within 15 days, the defendants then raised the plea of pendency of the
suit of Seth Shanti Lal which was by then dismissed for default. The
factum of dismissal of suit was intimated to the defendants through
the notice dated 3.7.1973, though the suit was subsequently restored
and was finally dismissed in the year 1978. The fact remains that the
defendants who, in the initial stages, were prepared to pay the balance
sale price on receipt of ITC, for reasons best known to them, dodged
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to make the payment on the ground of pendency of suit. Though this
conduct on the part of the defendants is not above board, the conduct
of the plaintiff, who has sought equitable remedy, should be kept
uppermost in the mind of the Court. The plaintiff seeking equitable
remedy cannot approach the Court with unclean hands or be guilty of
laches. Irrespective of the conduct of the defendants we must hold
that the plaintiff has, for various reasons discussed above, disentitled
himself to the relief of cancellation of instrument and for recovery of
possession from the defendants that too after the property was
substantially developed.
The result of the foregoing discussion is that the suit is liable to
be dismissed and it has been rightly dismissed by the trial Court.
However, in view of the fact that the defendants are not free from
blame as discussed above and they have utilised the property to the
best of their advantage right from day one without, at the same time,
paying the balance sale price for several years we put it to the counsel
for the appellants whether they are willing to pay to the plaintiff a
substantial amount over and above the sale price already deposited in
the Court, in order to do justice to the parties. In fact, in the course of
arguments by the learned counsel for the appellants, there was an
indication that the appellants were prepared to offer a reasonable
amount, without prejudice to their contentions. The learned counsel
for the appellants has filed a letter dated 18.04.2002 stating that "the
appellants can pay and agree to pay a further sum of Rs. 35 lacs
(Rupees thirty five lacs) in 3 instalments of Rs. 15 lacs and Rs. 10 lacs
and Rs. 10 lacs," in three weeks, by the end of August and by the end
of November, 2002 respectively. When we suggested to the learned
counsel that it would be fair if some more amount is offered, the
learned counsel for the appellants agreed on behalf of his clients for
payment of Rs.40 lacs in lump sum within a period of six months
commencing from today. Having regard to the offer made in the letter
coupled with the oral representation made today and to mete out
justice to the parties, we direct that the undertaking to pay the sum of
Rs.40 lacs within six months should form part of the decree in the
suit. This shall be in addition to the sale price already deposited in the
Court. The same shall be deposited in the Court within a period of six
months and the appellants are entitled to withdraw the same in
addition to the amount already deposited.
The judgment of the High Court is set aside and the appeal is
allowed subject to the direction as given above. With regard to the
deposit of the said additional sum of Rs.40 lacs, the decree of the trial
Court shall stand modified accordingly. Parties are left to bear their
own costs.
J.
(R.P. Sethi)
J.
(P.Venkatarama Reddi)
April 24, 2002.