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TMI Blog1980 (7) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... that order came to be set aside in Company Application No. 130/1978 by Venkatachaliah J. While setting aside the ex parte order and decree, the learned judge partially decreed the Company Application No. 102/1978 in the sum of Rs. 15,000 which claim was admitted by the respondent and left it open for the disputed amount of Rs. 10,000 to be decided in the proceedings. The official liquidator has stated in his application that the company and the respondent entered into an agreement of sale dated March 6, 1975, for purchase of dry land measuring 3.20 guntas approximately, with a pump house and shed standing thereon, situated in Bhattarahalli village, Hoskote Taluk, bearing section No. 27. The land was agricultural land and the price agreed as consideration was for Rs. 40,000 per acre plus Rs. 2,000, being the value of the pump house. On the date of the agreement, the promoter of the company paid by a cheque drawn in favour of the respondent the sum of Rs. 25,000 as an advance towards the agreed sale consideration. The agreement of sale provided for the respondent-vendor to get the necessary sanction from the appropriate revenue authorities for the conversion of the land for non-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in proceedings for voluntary liquidation of the company in Company Petition No. 13/1978, the provisional liquidator issued a letter dated May 4, 1978, calling upon her to remit the aforementioned sum of Rs. 25,000 together with interest thereon from the date of receipt of the said letter. A reply was received through the advocate of the respondent bearing the date June 8, 1978. In the said reply, the respondent took the stand that only a sum of Rs. 15,000 was due and payable by her and that she would pay the amount within six months. Therefore, the official liquidator has moved this court for a decree alleging breach of agreement on the part of the respondent. The cause of action for the application arose on September 30, 1975. The provisional liquidator was appointed On March 2, 1978. The application filed was in time. In the objections filed by the respondent, the respondent took the stand that she did not commit any default in respect of the sale agreement and the default was committed by Mr. R. P. Agarwal. She further took the stand that she was always ready and willing to sell the land and complete the transaction. The time specified in the agreement, according to the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchaser. She has alleged that soon after the agreement, there were several parties who were prepared to purchase the land at Rs. 45,000 per acre. On account of the agreement with the company, offers are said to have been rejected. In these circumstances, she has stated that Rs. 10,000 is a reasonable compensation for the loss sustained by her on account of the default of the company and, therefore, she is entitled to return only Rs. 15,000 and that too in instalments as she did not have any income to pay the entire sum at once. On account of the rival contentions as above, an enquiry became necessary and the official liquidator examined Mr. Agarwal, the managing director of the company in liquidation, at the relevant time and marked as many as 10 documents including the agreement dated March 6, 1975. The respondent has examined her husband, Mr. Joseph, and Mr. Saptharishi, her advocate, and marked as many as 9 documents including the conversion order dated October 27, 1975, copies of the draft sale deed, corrected copies of the draft sale deed, chit containing the address of the financier at Madras and some correspondence between Canara Bank, Bangalore, and herself. In the light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation he has admitted carrying on the negotiations of sale with the husband of the respondent, Mr. Joseph. He has denied knowledge of Ex. R-1, the permission granted for conversion of the land. He has denied that he ever declined to purchase the lands in question. He has denied that any draft sale deed was ever given to him or that he settled the same with Mr. Joseph and the Advocate, Mr. Saptharishi. He has asserted that he has not met or seen Mr. Saptharishi. He has further denied that the company lacked funds for purchasing the lands or that he made a trip to Madras to raise funds for the purchase. In fact nothing useful has been elicited from this witness in cross-examination to support the stand of the respondent. Mr. Saptharishi, Advocate, is R.W. 1. He has in his evidence stated that Mr. Joseph and P.W. 1 came to him in November, 1975, in connection with the preparation of a sale deed. He was given instructions by Mr. Agarwal in that behalf. He has produced his office copy of the draft sale deed as per Ex. R-9. He has stated that Ex. R-2 is the other carbon copy similar to Ex. R-9. He has stated that one copy of the draft sale deed was sent to P.W. 1 by post and another c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced by Ex. P-8. If the respondent took a firm stand and sent a reply to the official liquidator's letter, Ex. P-9, nothing prevented her from acting in the same manner a little over a year before. Her explanation that she maintained silence on legal advice at the relevant time is not easy to believe when she admittedly was in a bad position financially with her bank and would have normally jumped at the chance of completing the sale and pay off her debts. These circumstances compel me to conclude that the respondent had avoided the sale without sufficient cause and the company had not committed any default. This answers the first point determined for consideration. The next point for consideration is whether the respondent has suffered loss on account of the default of the company in regard to Ex. P-1. As I have held that the company was not in default but the respondent, loss, if incurred at all by her, cannot be compensated at the expense of the company. There is no evidence that any loss was suffered by the respondent except the self-serving testimony of R.W. 2. Shri section V. Subramaniam, learned counsel, has relied upon the decision of the Supreme Court in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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