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TMI Blog2009 (10) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... h was owned by one Rai Bahadur Saheb Pannalal Lahoti. By a Will, he bequeathed all his properties including the property in question and appointed Respondent no. 2 B.M. Bhandari and one Bhima Bai as joint executors of his Will. According to the Will of Rai Bahadur Saheb Pannalal Lahoti, one-fourth of the fund of his estate was to be used for hospitals and educational institutions in equal shares as the executors would deem fit. After the death of Bhima Bai, who was one of the joint executors of the Will, her heirs Govind Bai Vinani and Suresh Chandra Lahoti (Respondents no. 2 and 5 respectively) came into the picture. By a trust deed as per the wishes of the Late Rai Bahadur Saheb Pannalal Hiralal Lahoti, a Charitable Trust by the same name was set up. The trust owned properties in Hyderabad, Andhra Pradesh and Hingoli in Maharashtra. The registered office was in Kolkata, West Bengal. Respondent no. 2 on behalf of the trust entered into a written contract for sale with appellant no. 1 on 6th of December 1978 agreeing to sell the property in question measuring 9400 sq. yards along with constructions thereon. The contract contained certain terms and conditions. The first of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otostat copy of a cheque of ₹ 1 lakh towards return of the advance amount simply terminating the agreement and threatening to forfeit the advance amount. The written communication mentioned that Respondent no. 2 was kind enough to offer the earnest amount back to the appellants on the condition that the latter would not agitate the matter further. The appellants were directed to collect the amount within three days of the receipt of the letter; otherwise the earnest money would be forfeited. The said letter mentioned that by this communication the respondents would not be waiving any of their rights to pursue the matter further. 7. The appellants then filed a suit being O.S. No. 317/1985 in the Court of The Principal Subordinate Judge, R.R. District, Hyderabad for specific performance of the said contract for sale by the seller- respondents. The trial court framed no less than 17 issues in all. After examining witnesses, hearing arguments of both the parties and deliberating upon the issues, the Trial Court, inter alia, held that the appellants by insisting upon the trustees to perform additional conditions were not ready and willing to perform their part of the contract a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions, which is not permissible and which is beyond the terms of the contract. To address this question, a look at the contract for sale is pertinent. From a bare perusal of clauses 4, 7, 8 and 9 of the Contract for sale, it would be evident that the onus is on the appellants to obtain clearance from the competent authorities under the ULC Act. The respondents were nevertheless bound to extend their full cooperation to the vendees and to sign all necessary papers and documents. In clauses 7 to 9 of the said contract, the respondents agreed to obtain non-encumbrance and clearance certificates from the Income Tax Department and also to settle all payments to be made towards Municipal taxes, water tax, non- agricultural land assessment tax, etc. In the Contract, there is no such clause where the certificate from the Endowment Department was also to be taken for specific performance of the contract. The first appellant who was one of the executors of the said contract had admitted in his evidence that the transaction was finalized in the presence of a real estate broker and neither he nor any of the other appellants had asked the respondent to get permissions from the Endowment Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these words `contract to the contrary'. 13. Mr.K.K.Venugopal, learned senior counsel for the appellants relying on sub-section (b) and (c) of Section 55 (1) of the T.P.Act sought to contend that it was open to the appellants to seek clarifications regarding the procurement of clearance or exemption from the Endowment Department and in view of the fact that such exemption was not taken by the respondents from the Endowment Department, the terms and conditions of the contract entered into by the parties were not satisfied and, therefore, the question of refusing a decree for specific performance of the contract for sale could not arise at all on this ground alone. This submission of the learned senior counsel appearing for the appellants was, however, contested by Mr.P.S.Patwalia, learned senior counsel appearing for the respondents. According to the learned senior counsel for the respondents, since the clearance or exemption of the Endowment Department was not a condition to be fulfilled by the parties to execute the agreement for sale, it was not open to the appellants to say that before such clearance or exemption from the Endowment Department was not taken, the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need to obtain any permission from the Endowment Department for the purpose of transferring the title in respect of the property in question as the laws of the West Bengal applicable in this case, were not required to take such permission for alienation of trust property. In view of the above, we are, therefore, of the view that there was no obligation on the part of the respondents to get clearance of permission or exemption from the Endowment Department of the State for the purpose of transferring the title of the property in question. 14. It was next contended by Mr Venugopal, learned senior counsel appearing for the appellants, that the High Court was in error in not giving any due regard to all the clauses of the contract for sale especially Clause 11 of the agreement for sale. We do not find any merit in this contention of the learned senior counsel for the appellants. From a mere glance through the judgment of the High Court, it would be evident that the entire agreement was reproduced verbatim and the High Court in the impugned order truly went in depth into the discussion of the terms and conditions embodied in the contract for sale. We are in agreement with the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y which by his non payment of the balance amount as afore-said shall irrevocably stand forfeited. 17. A reading of this clause, namely, clause 3 of the agreement for sale would clearly show that what was the intention of the parties to make time to be the essence of the contract. If we read clause 3 and clause 10 of the agreement for sale conjointly, it would not be unsafe for us to conclude that the intention of the parties to enter into the agreement for sale incorporating clauses 3 and 10 in the same for the purpose of making the time being the essence of the contract. Mr.Venugopal, however, in support of his contention that time was not the essence of the contract strongly relied on a decision of this Court in the case of Swarnam Ramachandram (Smt) Anr.. v. Aravacode Chakungal Jayapalan [(2004) 8 SCC 689] and argued that even if clause 10 clearly stipulates that time was the essence of the contract, then also, in the surrounding circumstances, it can always be held that the agreement must be performed within a reasonable time and time was not the essence of the contract. In our view, this decision of this Court would not be applicable in the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of the evidence on record came to the conclusion that the appellants were not ready and willing to perform the terms and conditions of the agreement for sale. In view of our discussions made herein above and in order not to execute the agreement for sale on the part of the appellants, it is evident from Exts.P3, P5 and P7 which would show that the appellants sought clarifications regarding the joining of all trustees in execution of the sale deed, asking the second respondent to enter into another agreement by way of indemnifying the appellants for any loss due to defect in the title, etc. We do not find any justification to say in the facts and circumstances of the case that the demands of the appellants were justified and reasonable. On the other hand, this demand on the part of the appellants, in our view, was not only unjustified and unreasonable but it was in fact imaginary as rightly pointed out by the trial court in its judgment. In order to show that the appellants were all ready and willing to perform their part of their obligation to complete the agreement was to bear the remaining amount of the contract and then agitate the matter for specific performance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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