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Issues Involved:
1. Whether the company was in default in not completing the sale transaction in accordance with the provisions contained in the agreement dated March 6, 1975? 2. Whether the respondent has proved financial loss as asserted by her on account of the default of the company, if any, and in that circumstance whether she is entitled to any compensation from out of the advance paid to her? Issue-wise Detailed Analysis: 1. Default in Completing the Sale Transaction: The official liquidator filed an application under section 446(2)(b) of the Companies Act, 1956, seeking a decree against the respondent for Rs. 25,000 plus interest due to breach of a sale agreement dated March 6, 1975. The agreement was for the purchase of dry land and required the respondent to obtain necessary sanctions for land conversion by September 30, 1975. The respondent failed to secure the sanction within the stipulated time, causing the agreement to lapse and rendering her liable to refund the advance payment. The respondent argued that she was always ready and willing to complete the transaction and that time was not the essence of the contract. She claimed that her husband had asked the company's managing director, Mr. R.P. Agarwal, to obtain the necessary permissions, which he did only on October 8, 1975. She also stated that there was a deemed sanction by September 19, 1975, and that she had prepared a draft sale deed which was corrected by Mr. Agarwal. The court found that the respondent's silence and lack of action until the official liquidator's notice indicated that she avoided the sale without sufficient cause. The evidence suggested that the company was willing to complete the sale as late as February 1977, as evidenced by their correspondence. Therefore, the court concluded that the company had not defaulted, and the respondent was at fault for not completing the sale. 2. Financial Loss and Compensation: The respondent claimed financial loss due to the company's alleged default, stating that she had rejected other offers for the land and suffered losses, including doubled bank loans. However, the court held that since the respondent was at fault, any loss incurred by her could not be compensated at the company's expense. The court found no credible evidence to support her claims of financial loss beyond her self-serving testimony. Conclusion: The court ruled in favor of the official liquidator, modifying the interest calculation. Interest at 18% per annum on Rs. 10,000 was to be calculated from the date of the company's last letter (Ex. P-8) until the date of the application, and at 6% per annum from the date of the application until realization. Any amount already paid by the respondent would be deducted with corresponding counter interest. The order was supplemental to an earlier order by Venkatachaliah J. Final Judgment: The application of the official liquidator succeeded with modifications regarding the interest calculation, and the respondent was ordered to refund the advance amount with specified interest.
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