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1967 (6) TMI 44

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..... the execution of the conveyance. (b) The Defendants shall make out a good and marketable title and shall complete the transaction on approval of title of the said property by the Plaintiffs' Solicitor. (c) The transaction shall be completed within a period of three months from the date of the delivery of the title deeds by the Defendants to the Plaintiffs' Solicitor. (d) In the event of Defendants' failing to make out a good and marketable title, the Plaintiffs shall refund the said earnest money of ₹ 1,001 and shall also pay the costs of and incidental to the investigation of the title and of the said agreement which was settled at ₹ 150 and also actual costs out-of-pocket expenses to be incurred by the Plaintiffs. (e) If after approval of the title by the Plaintiffs' Solicitor the Defendants fail to execute the necessary conveyance, the Plaintiffs would be entitled to sue for specific performance of the contract and/or for damages. The plaint, after reciting the said terms of agreement, states that in pursuance of the said agreement for sale the Plaintiffs paid to the Defendants the sum of ₹ 1,001 by way of earnest money. The time .....

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..... eturn the earnest money and pay the actual costs incurred by the Plaintiffs. Immediately, thereafter, there was a talk of settlement between the parties and the Plaintiffs at the request of the Defendants agreed to treat the said agreement as abandoned. By a letter dated November 28, 1960, the Plaintiffs' Solicitor wrote to the Advocate for the Defendants demanding a sum of ₹ 5,400 in full settlement of their claim. The Defendants considered the said demand of ₹ 5,400 as exaggerated and, as such, refused to pay the same. The Defendants orally, as well as by their Advocate's letter dated November 23, 1960, offered to put an end to the said agreement which was accepted by the Plaintiffs. Under the circumstances the Defendants did not answer to the requisitions-of-title and there was no occasion for the Plaintiffs to send the draft conveyance on or about April 12, 1961, as alleged. The Defendants have denied that there was any extension of the date of performance of the agreement as alleged in para. 9 of the plaint. The Plaintiffs by their said letter dated November 28, 1960, admitted that pecuniary compensation for the non-performance of the said agreement would a .....

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..... ises, situate within the jurisdiction of this Court, are very close to each other and are places where either or more of the Defendants used to reside at the relevant time. The said agreement for sale dated June 20, 1960, (Ex. A) is an admitted document. Although various issues were raised, the substantial issue of fact is whether the Plaintiffs accepted the proposed offer of the Defendants to terminate the said agreement for sale. I, therefore, propose to discuss the issue No. 3 first. Issue No. 3. 4. According to the Defendants, Sri Panchu Gopal Ganguly, Advocate, wrote on their behalf to Sri N.N. Bhattacharjee, Solicitor for the Plaintiffs, on November 23, 1960, whereby the said Advocate offered to refund the earnest money and the actual costs incurred by the Plaintiffs inasmuch as on account of some unpleasant situation in the family, it would not be convenient for the Defendants to proceed with the said agreement for sale. This letter (Ex. E) is an admitted document and in this letter I find that at the bottom it is written 'Enclo: Requisitions-of-title'. The said letter has been tendered without the said enclosure. This letter shows that until November 23, 1960, .....

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..... for sale, there must have been a termination of the contract. In my view, the documents (Exs. E and F) indicate that the talk of settlement did not materialise. The absence of any letter from either party recording the termination of the said agreement for sale supports the Plaintiffs' case that the agreement for sale did not come to an end. Admittedly the Plaintiffs have sent requisitions-of-title but the Defendants returned the same unanswered. There is, however, conflict of evidence on the point whether the draft conveyance or the notice demanding specific performance was at all sent by the Plaintiffs to the Defendants. According to the Plaintiffs, they not only sent the requisitions-on-title and draft conveyance as referred to in the letter dated November 23, 1960, and letter dated April 12, 1961, respectively but also they in their notice of demand dated August 3, 1961, informed the Defendants that they approved the title of the said premises No. 37/1, Hindusthan Road, Calcutta, and asked the Defendants to execute and register the deed of conveyance. The notice of demand (Ex. G) was alleged to have been sent on August 3, 1961, and the present suit was instituted on October .....

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..... only be an inference or a guess work. He has admitted that he advised his clients to reply to the letter dated November 28, 1960, regarding the terms of settlement proposed by the Plaintiffs' Solicitor Sri N.N. Bhattacharjee, but the Defendants did not choose to give any instruction to him accepting the said proposed terms. Thus, it is clear from the evidence of Sri Ganguly that the settlement did not materialise. Sri Biren Biswas has also denied receipt of any draft conveyance or any notice of demand. But he has not also explained why he or the Defendants or their lawyer did not reply to the letter dated November 28, 1960, accepting the terms of settlement proposed by the Plaintiffs. On the contrary, the evidence of Sri Biswas is to the effect that there was difference of opinion as to the amount of compensation to be paid to the Plaintiffs in consideration of their agreeing to rescind the contract. According to Sri Biswas a sum of ₹ 2,000 in addition to ₹ 1,001 was agreed to be paid by the Defendants whereas the Plaintiffs as proposed in the said letter wanted ₹ 5,400 in full settlement of the matter. In fact, Sri Biswas has given evidence that as the Plaint .....

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..... urnt. Naturally the Plaintiffs' Solicitors very reasonably might have insisted, in the interests of his client, on the advertisements of the loss in newspapers and the execution of the deed of indemnity. The Defendants' definite case is that, after they returned the requisitions-of-title to the Plaintiffs' Solicitor, they did not take further steps because they thought that agreement for sale was abandoned by both the parties. Thus the usual steps that are generally taken after the agreement for sale and before the execution of the conveyance naturally could not be resorted to in this case. But the fact remains that the agreement for sale was made and the requisitions-of-title were sent. For reasons stated earlier, I have already come to the conclusion that there was no settlement although talks of settlement did take place between the parties. Accordingly the agreement for sale is subsisting and effective. Even assuming that the Plaintiffs' case is false, namely, that the draft conveyance was not sent, it cannot be stated that the Plaintiffs did not agree to complete the conveyance without the execution of the deed of indemnity by the Defendants or their lawyer. I .....

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..... n para. 3 being prior to those in para. 6, they should be given effect to in preference to the contents in para. 6 In my view, paras. 3 and 6 cannot be made applicable as the Plaintiffs have accepted the title to the said premises as good and marketable and were and are ready and willing to execute the conveyance unconditionally. It is not the Defendants' case that they made out a good and marketable title. The entire plea of the Defendants is that there was settlement between the parties and the agreement for sale was given up by the parties and, as such, the question of making out a good and marketable title did not ever arise. Mr. Panja overlooked this aspect of the matter and he has wanted me to look at the evidence from the point of view of the Plaintiffs' conduct in this matter. The Plaintiffs' conduct showed, according to him, that the Defendants failed to make out a good and marketable title to the said premises and, as such, the Plaintiffs would be entitled only to get the earnest money and a sum of ₹ 150 as the settled costs of the purchasers and some actual costs incurred as out-of-pocket expenses as mentioned in para. 3 of the said agreement. This aspe .....

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..... 's evidence on this point (vide Qq. 19, 20, 21). At best, it could be said that they might have asked for a deed of indemnity, but that does not mean that the Defendants agreed to comply with such request (Qq. 84, 93-107). Mr. N.N. Bhattacharjee's evidence on this point is also not very helpful (vide Qq. 22, 23, 39, 42, 75). P. Ganguly and Birendra Biswas who denied any such agreement were not cross-examined on this point. I accordingly answer the issue No. 1 in the negative. Issue No. 4. 7. According to para. 9 of the plaint, the time for completing the transaction was extended from time to time by mutual consent until April, 1961. It is also stated that in any event the month of April, 1961, was the reasonable time within which the transaction should have been completed. The Plaintiffs have denied the said contention in para. 10 of the written statement. By referring me to Clauses (3), (4) and (5) of the agreement for sale Mr. Panja has argued that the parties agreed that time would be of the essence of the contract and, as such, the necessary steps should have been taken by the Plaintiffs within the time mentioned in the agreement itself. The vendors were to return .....

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..... pplication to the facts and circumstances of this case. It is not the case of the Defendants that the Plaintiffs are not entitled to get a decree because the Plaintiffs were guilty of undue delay inasmuch as the Defendants asked the Plaintiffs to comply with all the requirements in the agreement itself within a fixed date. The Defendants' case is that in or about November, 1960, the entire contract was agreed to be abandoned because a settlement took place between the parties. Further Clauses (3), (4) and (5) of the agreement indicate that the Defendants were to comply with certain formalities like sending original documents of title, answering the requisitions-of-title, making out a good and marketable title and delivering vacant possession of the premises. In view of the plea of abandonment of the contract nothing was done by the Defendants and, as such, if the Plaintiffs are at all guilty of not performing their part of the contract within the scheduled dates, the Defendants were responsible, for the same. The Defendants by their inaction left the Plaintiffs with no alternative but to do whatever they could in the situation. Admittedly, on November 23, 1960, the Defendants r .....

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..... by the Defendants. There is evidence to the effect that Ajit Kumar Bose and Birendra Biswas had discussions on the subject, but the parties could not agree to a settled amount. On August 3, 1961, the Plaintiffs through their new Solicitors D.P. Sarbadhikari Co. wrote a letter to them calling upon the Defendants to execute and register the conveyance. As stated earlier the letter was not sent by registered post and P. Ganguly and Birendra Biswas have denied the receipt of such letter. The letter was sent on August 3, 1961, long after P. Ganguly ceased to work on behalf of the Defendants and naturally P. Ganguly could not give satisfactory evidence to that effect. Birendra Biswas also has stated that he did not receive such letter. The letter was not addressed to Birendra Biswas although Birendra Biswas in answer to my Q. 50 has stated that all steps relating to the said transaction were taken to him alone on behalf of the Defendants. The letter was addressed to the Defendant No. 1 with copies to other Defendants and she or any of the other Defendants was not called. Sri Ajoy Das, on behalf of the Plaintiffs, has stated that he has duly despatched the letter in the normal course a .....

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..... 4 in the following way: (a) No; the extension was not made by mutual consent until April, 1961, but such extension took place impliedly till November 23, 1960. (b) Question does not arise but, in any event, November 23, 1960, should be considered as a reasonable time within which the said transaction could be completed. Issue No. 5. 8. Mr. Panja has urged that the draft conveyance was not tendered by the Plaintiffs nor the despatch of the draft conveyance by the Plaintiffs' Solicitor was proved. He has also made a comment that the documents were disclosed by the Plaintiffs in their brief of correspondence showing the despatch of the draft conveyance to the Defendants, but those documents were not tendered. Mr. Bhattacharjee has given evidence that he sent the draft conveyance with a forwarding letter dated April 12, 1961, to Sri P. Ganguly, Advocate. But neither the original nor the copy was tendered. Mr. Bhattacharjee has admitted that the letter was sent by a peon book, but the peon book was not produced by him. In my opinion, Mr. Panja's criticism is not without foundation. The Plaintiffs could have proved the despatch of the draft conveyance in a more satisf .....

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..... the Plaintiffs. Accordingly I answer the issue in the following: (a) Yes. (b) Yes. 9. Issues Nos. 6 and 8 will be conveniently discussed together. But before I do so, the important issue on jurisdiction of the Court may be discussed first. Issue No. 7. 10. Mr. Panja's main contention on this issue is that the agreement for sale specifically provides that the vacant possession should be given after the agreement for sale and before the execution of the conveyance (vide. Clauses 5 and 6 of Ex. A) and the Plaintiff Ajit Kumar Bose has accepted that fact when in answer to Q. 172 in cross-examination he has admitted that peaceful vacant possession is a condition precedent to the execution of the deed of conveyance. Relying on Debendra Nath Chowdhury v. Southern Bank Ltd. (1960) 64 C.W.N. 439. Mr. Panja has ably contended that in a suit for specific performance of an agreement for sale of land outside the jurisdiction of this Court, the prayers asked for in the plaint are very material in order to determine whether this Court has jurisdiction or not. If the Plaintiffs would have prayed for the execution of the deed of conveyance without delivery of vacant possession of la .....

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..... ction of the Calcutta High Court, the suit can be validly instituted in the Calcutta High Court with leave under Clause 12 of the Letters Patent inasmuch as the cause of action is contractual in character and, as such, a right in personam is involved. The High Court in exercise of its equity jurisdiction under the Letters Patent can hear such suit but cannot grant possession of the land in the decree. A suit for specific performance simpliciter and a suit for specific performance and possession are different suits and have different causes of action. In the former case the decree binds only the contracting parties, whereas in the latter case all parties who are in possession of the land even though they happen to be persons other than the contracting parties have got to be impleaded, and it is only when they are impleaded that the decree would bind the contracting parties and also the parties in possession. Further, a decree for title or a decree for possession create interest in the land and, accordingly, where the plaint asks for such relief it wants a decree for an interest in the land outside the jurisdiction of the Court. Thus, suit being in the nature of a suit for land can o .....

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..... t to be instituted in the Court in the jurisdiction of which the land is situated. 11. Applying these principles to the facts and circumstances of this case, I am of opinion that this is not a suit for land. I quite appreciate the criticism of Mr. Panja that the plaint should have asked for execution of the deed of conveyance and nothing else. In fact, Mr. Datta orally applied for amendment of prayers but he did not press the point. But even of the prayer was asked in that Form, Mr. Panja could have logically argued that as the agreement involved prior delivery of vacant possession even a prayer for execution of the deed in this case could not avoid the mischief. But, in my opinion, Clause 6 of the agreement and the oral and other documentary evidence clearly show that the delivery of vacant possession of the premises in the instant case is not a condition precedent to the specific performance of the agreement. Clauses (5) and (6) of the agreement read as follows: (5) The purchase shall be completed within three months from the date of delivery of title deeds to the purchasers' said Solicitor subject to the vendors' making out a good and marketable title and deliverin .....

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..... or have not raised the point that vacant possession is to be given to them after delivery of the title deeds, as provided in Clause (5) of the agreement. Even assuming that delivery of possession is a condition in the agreement for sale, the party claiming for enforcement of his right under such agreement can relinquish a part of his right at any stage prior to the hearing of the suit unless the other party is materially prejudiced under the contract by such volte-face. This conclusion also follows from the provisions in Section 14, 15, 16 and 17 of the Specific Relief Act, 1877. It may be added here that the Plaintiffs have not asked for possession at all in the plaint. For all these reasons, I hold that this is a suit for specific performance simpliciter. In the premises, I answer this issue in the affirmative. Issues Nos. 6 and 8. 12. Mr. Panja has argued that in any event the Plaintiffs are not entitled to the specific performance of the said agreement for sale, nor the Defendants are bound to complete the said transaction by executing the deed of indemnity and the necessary conveyance. According to him, under Section 12(b) and (c) of the Specific Relief Act, 1877, specif .....

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..... mises subject to two conditions--advertisement being published in newspapers and a deed of indemnity being executed by the Defendants. The conditions imposed by them were not contemplated in the agreement itself and, as such, the Plaintiffs were responsible for not acting according to the terms of the agreement. (b) The Plaintiffs did not take any steps in performing their part of the contract since November 28, 1960, before instituting this suit on October 5, 1961. The letters dated April 12, 1961, and the notice of demand dated August 3, 1961, were not tendered or proved by the Plaintiffs. This inaction and delay on the part of the Plaintiffs should disentitle them to claim specific performance. (c) The readiness and willingness on the part of the Plaintiffs was also not proved because the Plaintiffs' ability to pay the sale price was not proved. (d) The readiness and willingness on the part of Plaintiff No. 2 to complete the contract has not been proved. (e) The Plaintiffs have in their correspondences and in the plaint insisted that the title can only be approved if advertisements are published in newspapers and deed of indemnity is executed by the Defendants. B .....

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..... 1961, were not received or cannot be considered to be reliable evidence as urged by Mr. Panja, it cannot be said that there is inaction or delay on the part of the Plaintiffs. The breach if at all on the part of the Defendants took place on November 23, 1960. A delay for 11 months when the period of limitation is three years cannot be a bar to the Plaintiffs' claim in a suit for specific performance. Delay does defeat the equity, but equity cannot be allowed in India to defeat the statutes. There is no doubt that the grant of specific performance is discretionary as stated in the statute itself, but that discretion should not be exercised simply because a person has not taken any interest in the matter for a period of 11 months, unless there are other circumstances which make it inequitable for the Court to grant him such relief. In this connection reliance may be placed on the following observations of the Supreme Court in Satyanarayana v. Yellowji Rao A.I.R. 1965 S.C. 1405 (1408): Under Section 22 of the Specific Relief Act relief of specific performance is discretionary but not arbitrary; discretion must be exercised in accordance with the sound and reasonable judicial p .....

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..... ering their bank pass books, but absence of such document does not necessarily lead to the conclusion that they have no money to buy the land. Admittedly they paid the earnest money. They had been writing since November, 1960, that they were losing interests on the purchase money for the Defendants' delay in completing the sale, but no protest was made orally or in writing that the story of such loss was a myth. Ajit kumar Bose has been asked on this point, and his emphatic answer to Qq. 24 and 162 is that he has the necessary fund. Nor the witnesses on behalf of the Defendant have stated that the Plaintiffs have no means to pay the balance purchase money. 14. Mr. Panja has also submitted that although time is not of the essence of contract in an agreement for sale of immovable property, in the instant case, the Plaintiffs have treated the contract to be one in which time is of the essence of contract. His contention is that the Plaintiffs themselves committed breach of contract inasmuch as they did not take necessary steps within the scheduled time as mentioned in the agreement itself. Accordingly, the Plaintiffs themselves having committed breach of contract, they should n .....

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..... ; it is conditioned by two clauses and such conditions are subject to the vendors' making out good and marketable title and delivering vacant possession. Thus the period fixed is intended to be altered until good and marketable title is made out or delivery of vacant possession is given. Further, it is not the Defendants' case that the transaction should have been completed by the Plaintiffs within a fixed period. The oral and documentary evidence do not substantiate such cases. It appears to me that the Plaintiffs were taking reasonable steps in completing the transaction. The delay, if any, is not unreasonable because, according to the Defendants' own case, the original of the title deeds was destroyed by fire, and naturally the Plaintiffs insisted on advertisement to be published in newspapers regarding such loss and execution of a deed of indemnity. Further, admittedly there was a talk of settlement between the parties, but it fell through because of their disagreement on the quantum of compensation payable by the Defendants to the Plaintiffs. Considering the fact that the agreement was executed in June, 1960, the last step was taken by the Plaintiffs on November 28 .....

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..... e specific performance is discretionary as the Court is not bound to grant such relief merely because it is lawful to do so. The section, however, adds that the discretion of the Court is to be exercised judicially and not arbitrarily. Reading Section 22 together with the explanation to Section 12, I am of opinion, the evidence in this case is not sufficient for me to hold that pecuniary compensation should be the adequate relief. The reasons why I say so may be stated as follows: (a) Clause (3) of the agreement provides that in default of the Defendants' making out a good and marketable title, the vendors will return the earnest money and pay the costs of the purchasers settled at ₹ 150 only besides the actual out-of-pocket costs. This clause contemplates a breach of contract on the part of the Defendants if they fail to make out a good and marketable title. It is not the Defendants' case that they failed to make out a good and marketable title, or that the Plaintiffs unreasonably withheld their approval to the title. Nor it is the Plaintiffs' case that the Defendants committed breach of agreement on the ground that they failed to make out a good and marketabl .....

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..... uld exercise their option to rescind the contract. It is not the Plaintiffs' case that the vendors failed to make out a good and marketable title. The delivery of possession is not being insisted upon by the Plaintiffs at any stage. The Plaintiffs have not exercised their option to rescind the contract. Thus the amount mentioned in this clause does not really contemplate a pecuniary compensation payable to the Plaintiffs in lieu of specific performance. (c) In the letter dated November 28, 1960, the Plaintiffs are asking in the first paragraph of that letter for completing the transaction as the Plaintiffs were suffering heavy loss in the shape of loss of interest on the purchase money which they kept ready at home for nearly six months, agreed costs of Solicitor and costs of investigation and searches. This statement cannot be construed in the sense that the Plaintiffs are asking for pecuniary compensation in lieu of specific performance of the contract. This letter is a reply to the letter dated November 23, 1960, addressed by the Plaintiffs' Solicitor to the Defendants' lawyer. The Defendants wanted the agreement to be abandoned on payment of certain costs and on .....

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..... hole idea is that if the terms are accepted then the dispute is settled. If the parties do not agree to the terms of settlement, their original right does not vanish. By adding the words 'without prejudice' they only safeguard their position that if the negotiation falls through, the proposed terms would not affect their original right. Accordingly, it is legitimate for every Court not to consider those proposed terms during the stage of negotiation if the words 'without prejudice' are written and if the proposed terms are not accepted by the other party. Mr. Panja's argument is that this letter has been tendered without any objection. In fact, it is a common document. According to him, I have got power not only to examine this letter but also to appraise the value of its contents. Mr. Panja has asked me to hold that, according to the Plaintiffs, the sum of ₹ 5,400 should be considered as full compensation acceptable to them if the agreement for sale is not implemented. I agree with Mr. Panja to this extent that I can certainly examine the contents of this letter because it is an admitted document. But that does not mean that I should overlook the circumst .....

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..... ered in determining the disputes between the parties, but their admissibility cannot be questioned. In fact, the writer himself can use such document in certain circumstances. It is, therefore, not correct to say that because both the parties by consent tendered the document, the Court is bound to accept the contents. The fact that both the parties tried to settle the matter cannot be ignored. The contents of such letters may not be always relevant, but the fact that such letter was, in fact, written might be relevant for other collateral purposes where, for instance, the questions of delay, latches, fraud are involved. Reference may be made to the following observations of Lindley, L.J. in the said decision at p. 338: That case is the only authority that I know of for the course taken by the learned Judge, and, when we come to consider the principle on which it was decided, it does not convince me that a Judge is entitled to look at letters written without prejudice unless he has the consent of both the parties who is so doing. No doubt there are cases where letters written without prejudice may be taken into consideration, as was done the other day in a case in which a questio .....

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..... this connection, reference may be made to Section 21, Clause (a) which reads as follows: 21. Following contracts cannot be specifically enforced: (a) A contract for the non-performance of which compensation in money is an adequate relief.... The illustration mentioned in the said section indicates that Clause 24(a) does not ordinarily contemplate cases relating to agreement for sale of immovable property. In its applicability to agreement for sale of lands or houses, the onus is heavy on the party who relies on such section. In my opinion, the Defendant has not been able to discharge such onus. (f) The agreement took place on June 20, 1960. The Defendants committed breach of the agreement by refusing to proceed with the transaction on November 23, 1960. The suit was instituted on October 5, 1961. No letter was written between November 23, 1960 and October 5, 1961, offering compensation to the Plaintiffs in consideration of the agreement specially in view of the fact that the Plaintiffs on November 28, 1960, agreed to settle the difference between the parties on the basis of a pecuniary compensation. The suit is being heard before me after about six years. There is no e .....

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..... livery of possession is important part of the agreement. But Clause (10) of the agreement read with Clause (6) makes it clear that even if the delivery of possession is not given, the Plaintiffs would be at liberty to enforce the contract. Thus the delivery of possession ceases to be a condition of the agreement. In any event, the Plaintiffs have not made out a case that the Defendants have committed a breach of contract for not giving delivery of possession. The Plaintiffs, in fact, in the notice of demand dated August 3, 1961, gave up their claim for prior delivery of possession. Even before me, at the hearing of the suit, the learned Counsel for the Plaintiffs has expressed his clients' willingness to get the transaction completed without delivery of possession. There is nothing which debars the Plaintiffs to relinquish their claim to delivery of possession. Such relinquishment is legitimate and cannot be overlooked. In my view, relinquishment of a right by a party can always be made at any stage of the suit provided, of course, such relinquishment does not seriously prejudice the other party's right in the agreement. Relinquishment of a right may be relevant in evaluati .....

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..... osts, etc. The issues are, therefore, answered in the following way: Issue No. 1: No. Issue No. 2: (a) Yes. (b) The Defendants are bound to do their parts in the contract. Issue No. 3: No. Issue No. 4: (a) No, but there was implied extension of time upto November 23, 1960. (b) November 23, 1960, is reasonable time. Issue No. 5: (a) Yes. (b) Yes. Issue No. 6: (a) Yes. (b) Yes. Issue No. 7: Yes. Issue No. 8: (a) No. (b) No. Issue No. 9: The .....

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