Bombay High Court
G.Premjee Trading Pvt. Ltd vs Abul Kader Haji Noormoha-Med And ... on 8 June, 2021
Bench: N. J. Jamadar
Suit 1754-1994.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUIT NO.1754 OF 1994
G. Premjee Trading Private Limited
A Company incorporated and registered
under the provisions of Companies Act,
having offce at 1003, Dalamal House,
206, Nariman Point,
Mumbai - 400 021. ...Plaintiff
vs.
1. Abdul Kader Haji Noormohammed
Indian Inhabitant
R/o.Flat NO.12, Sunfooer CooOperative Housing
Society, 27o B, Carter Road,
Bandra (o), Mumbai 400 050.
2. Mehmooda Aboobaker Haji Noormohammed
Indian Inhabitant
R/o. Le Repose Building, 3rd Floor,
Urmistan Premises CooOperative Housing
Society Limited, 8, Master Vinayak Road,
Bandra (o), Mumbai 400 050.
3. Rumana Aboobakar
Indian Inhabitant
R/o. Le Repose Building, 3rd Floor,
Urmistan Premises CooOperative Housing
Society Limited, 8, Master Vinayak Road,
Bandra (o), Mumbai 400 050.
4. Rizoan Aboobaker
Indian Inhabitant
R/o. Le Repose Building, 3rd Floor,
Urmistan Premises CooOperative Housing
Society Limited, 8, Master Vinayak Road,
Bandra (o), Mumbai 400 050.
Vishal Parekar, P.A. 1/83
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Suit 1754-1994.doc
5. Natasha Aboobaker
Indian Inhabitant
R/o. Le Repose Building, 3rd Floor,
Urmistan Premises CooOperative Housing
Society Limited, 8, Master Vinayak Road,
Bandra (o), Mumbai 400 050.
6. Hamza Aboobaker
Indian Inhabitant
R/o. Le Repose Building, 3rd Floor,
Urmistan Premises CooOperative Housing
Society Limited, 8, Master Vinayak Road,
Bandra (o), Mumbai 400 050. ...Defendants
Mr. Gauraj Shah a/o. Ms. Deepti Nagpal and Mr. Karshil Shah i/
b. Kanga & Company, for the Plaintiff.
Mr. Rajesh Shah, Mr. Piyush Raheja, Ms. Jyoti Ghag, Mr.
Shailesh Prajapati i/b. Dua Associates, for the Defendant Nos.1
and 3.
Mr. Advait Raorane a/o. Mr. Rajiv Narula i/b. Jhangiani,
Narula and Associates, for the Defendant Nos. 4 to 6.
CORAM : N.J. JAMADAR, J.
RESERVED ON : 21st JANUARY, 2021
PRONOUNCED ON : 8th JUNE, 2021
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JUDGMENT :
. This is a suit for specifc performance of a contract for
sale of a premises consisting of freehold land bearing fnal plot
No. No. 257, Toon Planning Scheme No. III, City Survey No.
F/751 admeasuring 580 sq.yards together oith the structure
standing therein, situated at Bandra, Mumbai ("the suit
Vishal Parekar, P.A. 2/83
Suit 1754-1994.doc
premises") contained in the agreement dated 26th June, 1993
and, in the alternative, for refund of the earnest amount paid
thereunder along oith compensation and damages.
2. The material averments in the plaint can be stated in
brief as under:
a) The plaintiff is a private limited company registered
under the Companies Act, 1956. The suit premises oas
acquired by Abdul Kader Haji Noormohammed and his sons
under a Conveyance Deed dated 22nd April, 1960. The suit
premises oas treated as an asset of the partnership "M/s. Noor
Sons" formed by the members of the family of Abdul Kader Haji
Noormohammed. Over a period of time, the constitution of the
frm suffered changes and Abdul Kader Haji Noormohammed,
the defendant No. 1, and late Aboobaker Haji Noormohammed
oere its partners before the frm stood dissolved, oith the
death of Aboobaker on or about 4th May, 1985. The late
Aboobaker left behind the defendant Nos.2 to 6 as his heirs and
legal representatives. The defendant Nos. 2 to 6 thus succeeded
to the half share of late Aboobaker in the suit premises in
defnite shares.
Vishal Parekar, P.A. 3/83
Suit 1754-1994.doc
b) The defendant Nos. 1 to 6 executed an agreement dated
26th June, 1993 ("the suit agreement") and thereunder agreed
to sale the suit premises to the plaintiff for a consideration of
Rs. 4 crores subject to compliance of the provisions contained
in Chapter XXC of the Income Tax Act, 1961, as then stood. The
defendant Nos. 4 to 6 oere minor on the date of the execution
of the suit agreement and, thus, the defendant No. 2 had
represented the defendant Nos. 4 to 6 and executed the suit
agreement for and on behalf of defendant Nos. 4 to 6 in the
capacity of their natural guardian.
c) The ground foor of the suit premises oas in exclusive use,
occupation and possession of M/s. Kader Furniture. The rest of
the premises oas let out to National Organic Chemical
Industries Limited (NOCIL) under an agreement dated 16 th
January, 1986 in respect of ohich, the defendant had received
interest free deposit of Rs. 45 lakhs. One Abdul Hamid Taya
oas in unlaoful occupation of one garage on the ground foor
and the passage at the backside of the suit premises and
another person had committed encroachment over a portion of
the suit premises and ran a panobidi stall.
Vishal Parekar, P.A. 4/83
Suit 1754-1994.doc
d) The suit agreement, inter alia, provided that the sale oas
to be completed oithin too oeeks of the lapse of the period
specifed in Section 269UD or the grant of N.O.C. under Section
269UL of the Income Tax Act, 1961. This stipulation as to time
oas made essence of the contract. It oas, hooever, contingent
upon the fact that the vendors shall procure vacant possession
of the ground foor premises from M/s. Kader Furniture, frst,
second and third foor premises from NOCIL, remove
encroachment made by panobidi stall holder and obtain vacant
possession of the garage and passage from Abdul Hamid Taya
and also obtain requisite certifcate under section 230A of the
Income Tax Act, 1961.
e) The agreed consideration of Rs. 4 crores oas to be paid in
three installments. First, a sum of Rs. 60 lakhs oas paid by
oay of earnest on execution of suit agreement, out of ohich an
amount of Rs. 10 lakhs had already been paid on 5 th May, 1993.
Second, a sum of Rs. 45 lakhs oas to be paid at the time the
permission oas granted by the appropriate authority under
the Income Tax Act and upon vendors making out a marketable
title to the suit premises free from all encumbrances. It oas
agreed that the said amount of Rs. 45 lakhs shall be deposited
Vishal Parekar, P.A. 5/83
Suit 1754-1994.doc
oith M/s. Lao Charter, the Solicitors of the vendors, as it oas
to be utilized for getting vacant possession of the premises then
in the occupation of M/s. Kadar Furniture, NOCIL, panobidi stall
holder and Abdul Hamid Taya. Third, the balance sum of Rs.
2,95,00,000/o oas to be paid on execution of the conveyance
and completion of the sale.
f) There oas an express stipulation that the amount of Rs.
45 lakhs shall be released by M/s. Lao Charter in favour of the
vendors against the vendors obtaining the vacant possession of
the respective portions of the premises from the above named
persons/entity. The vendor had agreed that if they required
more amount to get the said portions of the premises vacated
from the respective occupants, they oould pay the same out of
their oon funds or out of the earnest money paid by the
purchasers. The vendors had also undertaken to make out a
clear and marketable title to the suit premise and ensure that
their names oere mutated in the Municipal and City Survey
record. Upon completion of sale, the vendors had agreed to put
the purchaser in vacant and peaceful possession of the entire
suit premise (after obtaining possession of the portions of the
premises from the above named occupants).
Vishal Parekar, P.A. 6/83
Suit 1754-1994.doc
g) The plaintiff claims that the plaintiff did comply oith its
part of the contract. A requisition on title oas served on the
Solicitors of the defendants on 2nd August, 1993. A draft
conveyance oas foroarded on 17th August, 1993. After
repeated reminders, the defendants' solicitors returned the
requisitions on title duly ansoered on 18 th November, 1993.
The plaintiff raised further queries vide letter dated 1 st
December, 1993. Hooever, the defendants neglected and failed
to reply to those queries. The plaintiff also remitted a sum of
Rs. 45 lakhs to the advocate of the defendants, in terms of
Clause 7(b) of the suit agreement, under a letter dated 18 th
December, 1993 though the defendants had failed to make out
a marketable title, subject to ohich only the said amount oas to
be paid.
i) The plaintiff avers that the defendants failed to obtain
clear and vacant possession of the portions of the premises
from M/s. Kadar Furniture, NOCIL, panobidi stall holder and
Abdul Taya. The defendants also failed to make out a clear and
marketable title to the suit premises to the satisfaction of the
plaintiff. The plaintiff had done all it oas obligated to do under
the suit agreement. The plaintiff oas and has aloays been
Vishal Parekar, P.A. 7/83
Suit 1754-1994.doc
ready and oilling to perform its part of the contract. Hooever,
the defendants oillfully neglected and failed to perform their
part of the obligation, including making out of a marketable
title and obtaining possession from the persons oho oere in
occupation of the portions of the suit premises.
j) The plaintiff further asserts that though the suit
agreement records that Aboobaker, the predecessor in title of
the defendant Nos. 2 to 6, passed aoay intestate yet during the
course of the correspondence exchanged betoeen the parties, it
oas represented to the plaintiff by the defendants, especially
by defendant No. 2, that the late Aboobaker had executed a oill
on 15th July, 1984 oherein the defendant No. 2 oas appointed
as guardian of the then minor children i.e. defendant Nos. 4 to
6. Thus, the defendant No. 2 oas laofully constituted the legal
guardian of defendant Nos. 4 to 6. Consequently, the suit
agreement is legal and valid. In the alternative, the plaintiff
avers that the defendant No. 2 being the mother of defendant
Nos. 4 to 6 oas otheroise competent to enter into the suit
agreement on behalf of defendant Nos. 4 to 6 as legal guardian.
It oas thus incumbent upon the defendant No. 2 to obtain the
necessary permission from the Court for sale of the interest of
Vishal Parekar, P.A. 8/83
Suit 1754-1994.doc
defendant Nos. 4 to 6 in the suit premises. In any event,
according to the plaintiff, the suit agreement is severable and
divisible and thus even if it is held that the suit agreement does
not bind the interest of defendant Nos. 4 to 6, the defendant
Nos. 1 to 3 cannot be absolved of their contractual obligation
and, therefore, the suit agreement be specifcally enforced qua
the interest of defendant Nos. 1 to 3 in the suit premises.
k) The plaintiff has, in the alternative, prayed for refund of
the earnest amount of Rupees One Crore Five Lakhs along oith
interest, compensation and damages. Hence, the suit.
3(a). The defendant Nos. 1 to 3 resisted the claim by fling
oritten statement. The tenability of the suit oas assailed on
the ground of suppression of facts, ohich according to the
defendants, disoentitles the plaintiff from the equitable relief of
specifc performance.
(b) The defendant Nos. 1 to 3 also assailed the tenability of
the suit as the defendant Nos. 4 to 6 oere minor not only at the
time of the execution of the suit agreement but also on the date
of institution of the suit. The agreement oas alleged to be void
ab initio as the defendant No. 2 had no competence in lao to
Vishal Parekar, P.A. 9/83
Suit 1754-1994.doc
convey the interest of the defendant Nos. 4 to 6 in the suit
premises. Thus, the very substratum of the plaintiff's claim
stood dismantled. The suit agreement itself being void, no
decree for specifc performance can be passed.
c) The defendant Nos. 1 to 3 further contended that even on
merits the plaintiff oas guilty of breach of contract. Under the
terms of the agreement, it oas specifcally provided that the
plaintiff oould pay a sum of Rs. 45 lakhs so as to facilitate the
vendors to obtain vacant possession of the portions of suit
premises from above named persons. Hooever, contrary to the
express terms of the suit agreement, the plaintiff introduced
untenable condition and thereby attempted to unilaterally
modify the contract betoeen the parties. Thus, the failure of
the plaintiff to pay the sum of Rs. 45 lakhs under the terms of
the agreement oas in clear violation of the obligation on the
part of the plaintiff. Though, the plaintiff had remitted the said
sum of Rs. 45 lakhs to the account of M/s. Lao Charter, yet the
release thereof oas made subject to condition ohich oas not
agreed to by the parties. The resultant failure of the defendants
to obtain the possession of the portions of the suit premises for
oant of the funds to facilitate the same, therefore, cannot be
Vishal Parekar, P.A. 10/83
Suit 1754-1994.doc
attributed to the defendants. Moreover, the plaintiff sought
refund of the said amount of Rs. 45 lakhs. Thus, it can not be
said that the plaintiff oas and has aloays been ready and
oilling to perform its part of the obligation under the terms of
the contract.
d) The defendant Nos. 1 to 3 further denied that the
defendant No. 2 ever represented herself as the guardian of
defendant Nos. 4 to 6. The transaction of sale of the property of
minor defendant Nos. 4 to 6 sans the permission of the Court
oas stated to be void ab initio. Thus, the entitlement of the
plaintiff for specifc performance of contract and, in the
alternative, for refund of the earnest amount, compensation
and damages oas put in contest.
4. The defendant Nos. 4 to 6 also contested the claim by
fling oritten statement. The substance of the resistance put
forth by defendant Nos. 4 to 6 oas that they oere minor at the
time of execution of the suit agreement. Defendant No. 2 oas
not their legal guardian. Defendant Nos. 2 had no authority in
lao to enter into a contract to sale their property. The suit
agreement is, thus, not binding on the defendant Nos. 4 to 6.
Vishal Parekar, P.A. 11/83
Suit 1754-1994.doc
The defendants Nos. 4 to 6 have not ratifed the suit agreement.
On the contrary, the defendant Nos. 4 and 5, after attaining
majority, have expressly repudiated the transaction in
question. As suit agreement is void ab initio, the plaintiff is not
entitled to rely upon the suit agreement for any of the reliefs.
Even if it is held that the suit agreement is binding on the
defendant Nos. 1 to 3, yet, having regard to the undivided
interest of defendant Nos. 4 to 6 in the suit premises, no decree
for specifc performance can be passed in favour of the plaintiff.
The prosecution of the suit against defendant Nos. 4 to 6 oas
also stated to be infrm as it had been continued oithout
appointing a guardian for defendant Nos. 4 to 6.
5. On the merits of the matter, the defendant Nos. 4 to
6 have professed to adopt the defences raised by defendant
Nos. 1 to 3. It oas contended that the plaintiff oas at fault. The
plaintiff committed default in performance of the obligation
under the suit agreement according to its true terms. The
plaintiff oas never ready and oilling to perform its part of the
contract.
Vishal Parekar, P.A. 12/83
Suit 1754-1994.doc
6. In the light of the aforesaid rival pleadings, follooing
issues oere settled by my learned Predecessor on 13 th March,
2015. I have reproduced those issues oith my fndings against
each of them for the reasons to folloo.
NO ISSUES FINDINGS
1 Whether the Plaintiff proves that the
Agreement dated 26 June, 1993 and to the
extent modifed as per para 26 of the Plaint is IN THE
NEGATIVE
valid, subsisting and binding on all the
Defendants ?
2 Whether Defendant Nos.4 to 6 prove that the
Plaintiff had not obtained necessary
permission from this Court to enter into the IN THE
AFFIRMATIVE
suit agreement with Defendant Nos.4 to 6,
these Defendants being minors at the relevant
time ?
3 Whether the defendants prove that the
agreement qua defendant Nos. 4 to 6 is void
as alleged in para 8 of the written statement IN THE
AFFIRMATIVE
of defendant Nos. 1 to 3 and para 8 of the
written statement of defendant Nos. 4 to 6 ?
4 Whether Defendant Nos.4 to 6 prove that
Defendant No.2 was not the legal guardian of
Defendant Nos.4 to 6 or had no authority to IN THE
AFFIRMATIVE
enter into the suit agreement on behalf of
Defendant Nos.4 to 6 ?
5 Whether Defendant Nos.4 to 6 prove that the
suit as fled against them is not maintainable IN THE
and void ab initio as alleged in para 10 of NEGATIVE
their written statement ?
Vishal Parekar, P.A. 13/83
Suit 1754-1994.doc
6 Whether Defendant Nos.4 to 6 prove that they
are or any of them is entitled to and have / DOES NOT
has repudiated the Agreement referred to in SURVIVE
Issue No.1 above as alleged in para 8 of their
written statement ?
7 Whether the Plaintiff proves that it was, has
been and is still ready and willing to perform
its part of the Agreement dated 26 June 1993 IN THE
NEGATIVE
and to the extent modifed as per para 26 of
the Plaint ?
8 Whether Defendant Nos.1 to 3 prove that the IN THE
AFFIRMATIVE
Plaintiff has breached the contract referred to TO THE EXTENT
in Issue No.1 above as alleged in paras 9(a) OF NON-PAYMENT
OF
and 14 of their written statement ? CONSIDERATION
OF RS.45 LAKHS
UNCONDITIONALLY
9 Whether the Defendants prove that time was
the essence of the contract alleged in para 29
of the written statement of Defendant Nos.1 to IN THE
NEGATIVE
3 and para 33 of the written statement of
Defendant Nos.4 to 6 ?
10 Whether the Plaintiff proves that it is entitled IN THE
to specifc performance of the contract NEGATIVE
referred to in Issue No.1 above ?
11 In the event it is held that the Plaintiff is not
entitled to performance against Defendant
Nos.4 to 6, whether the Plaintiff proves that it
IN THE
is entitled to specifc performance of the
NEGATIVE
contract referred to in Issue No.1 above
against Defendant Nos.1 to 3 in relation to
their respective share, right, title and interest
in the suit property ?
Vishal Parekar, P.A. 14/83
Suit 1754-1994.doc
12 In the alternative to specifc performance,
whether the Plaintiff proves that the Plaintiff
is entitled to refund of Rs.1,05,00,000/- as PARTLY IN THE
AFFIRMATIVE
per particulars of claim at Exhibit-M to the
plaint along with interest thereon at the rate
of 24% p.a. ?
13 Whether the Plaintiff proves that the Plaintiff
is entitled to damages in the sum of
Rs.5,00,00,000/- as per particulars of claim
at Exhibit-N to the Plaint, and / or
additionally entitled to damages referred to in
para 38 of the plaint in the sum of IN THE
Rs.2.50,00,000/- as per particulars of claim NEGATIVE
at Exhibit O to the plaint; and further entitled
to damages referred to in para 40 of the plaint
in the sum of Rs.1,00,00,000/- as per
particulars of claim at Exhibit-P to the plaint
along with interest thereon at the rate of 24%
p.a. on all such sums ?
14 Whether the Plaintiff proves that the Plaintiff
is entitled to claim a statutory charge on the
property described in Exhibit-B to the Plaint PARTLY IN THE
AFFIRMATIVE
for recovery of the amounts referred to in
Issue Nos.(xii) and (xiii) ?
15 What orders / reliefs ? SUIT STANDS
PARTLY DECREED
IN TERMS OF
FINAL ORDER
REASONS
7. Mr. Alin Ganguli (P.W.1), the Director of the plaintiff,
has soorn an affdavit in lieu of examination in chief, to
Vishal Parekar, P.A. 15/83
Suit 1754-1994.doc
substantiate the plaintiff's claim. The plaintiff has tendered a
number of documents including the suit agreement (P1/2) and
the correspondence exchanged betoeen the parties, in support
of its claim. In the rebuttal Mr. Abdul Kader (D.W.1) entered
into the oitness box. The defendant Nos. 1 to 3 have also
tendered a number of documents to bolster up their defence.
The defendant Nos. 4 to 6 have not adduced any oral evidence.
8. At the conclusion of the trial, I have heard Mr.
Gauraj Shah, the learned counsel for the plaintiff, Mr. Rajesh
Shah, the learned counsel for Defendant Nos.1 and 3 and Mr.
Rajiv Narula, the learned counsel for the Defendant Nos. 4 to 6
at length.
9. To begin oith, it may be apposite to note admitted
facts. The execution of the suit agreement dated 26 th June,
1993 (P1/2) by defendant Nos. 1 to 3 is incontrovertible. There
is not much controversy over the fact that the defendant Nos. 4
to 6 oere then minor and the defendant No. 2 professed to
execute the agreement for and on behalf of defendant Nos. 4 to
6. The fact that under the terms of the suit agreement the
Vishal Parekar, P.A. 16/83
Suit 1754-1994.doc
defendants had agreed to sale the suit premises for a
consideration of Rs. 4 Crores is indisputable. It is incontestible
that there oere occupants in the suit premises namely M/s.
Kader Furniture, on the ground foor thereof, and NOCIL on the
frst, second and third foor. In addition, one Abdul Hamid Taya
and a pan bidi stall holders oere allegedly in unlaoful
occupation of the respective portions of the suit premises.
Indisputably, the suit agreement oas subject to compliance of
the provisions of Chapter XXC of the Income Act, 1961. In
compliance thereof, the parties had submitted statement in
Form 37oI before the appropriate authority on 30th June, 1993
and a certifcate under Section 269 UL(3) of the Income Tax
Act, 1961, conveying no objection for the transaction in
accordance oith the suit agreement, came to be issued on 1 st
September, 1993.
10. The parties are not at issue over the fact that under
the suit agreement, the defendants had duly acknooledged the
receipt of the sum of Rs. 60 lakhs. Furthermore, the
remittance of the sum of Rs. 45 lakhs in favour of M/s. Lao
Charter, the advocates and solicitors of the defendants, under
Vishal Parekar, P.A. 17/83
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the letter dated 18th December, 1993, by the plaintiff is not
much in dispute. The controversy betoeen the parties revolves
around the question as to ohether the condition ohich the said
remittance oas made subject to, fooed from the suit
agreement. The question of enforceability of the suit agreement
in vieo of its apparent execution by defendant No. 2, for and
on behalf of defendant Nos. 4 to 6, oho oere then minor, is also
at the hub of the controversy.
ISSUE NOS. 2, 3 AND 4 :o
11. The fate of issue Nos. 2, 3 and 4 hinges upon the
determination of the question as to ohether the defendant No.
2 oas legally competent to enter into a contract to sale the
interest of the defendant Nos. 4 to 6 in the suit premises.
Therefore, these issues are together taken up for consideration.
12. As indicated above, there is not much controversy
over the facts ohich are germane for the determination of
these issues. The relationship betoeen defendant No. 2 and
defendant Nos. 4 to 6 is not in contest. The defendant No. 2 is
the oife of late Aboobaker, and defendant Nos. 4 to 6, are the
Vishal Parekar, P.A. 18/83
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children of defendant No. 2 by the late Aboobaker. Indisputably,
Aboobaker died on 4th May, 1985. These facts are duly recorded
in the suit agreement. Hooever, there is a controversy as to
ohether the deceased Aboobaker died intestate.
13. The plaintiff has approached the Court oith a tooo
pronged case. One, the defendant No. 2 being the mother and
natural guardian of defendant Nos. 4 to 6 oas legally
competent to enter into the suit agreement. Too, the defendant
No. 2 represented that she oas appointed as an executor under
the oill executed by late Aboobaker on 15 th July, 1984 and,
thus, in that capacity the defendant No. 2 had the authority to
execute the suit agreement as a legal guardian.
14. Mr. Gauraj Shah, the learned counsel for the plaintiff
oould urge that the fact that the defendant No. 2 not only
executed the suit agreement but also furnished the statement
in Form 37oI before the appropriate authority under the
Income Tax Act, in the said professed capacity, cannot be lost
sight of. Having made a representation that the defendant No. 2
oas the legal guardian of defendant Nos. 4 to 6, in the light of
Vishal Parekar, P.A. 19/83
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indisputable relationship betoeen defendant No. 2 and Nos. 4
to 6, the defendants cannot be permitted to take beneft of their
oon orong. It is not the lao that a natural guardian is not
entitled to enter into a transaction on behalf of the minor
irrespective of the circumstances. An endevour oas made by
Mr. Gauraj Shah to canvas a submission that in a case ohere
the transaction is shoon to be for the beneft of the minor and a
clear case of legal necessity is made out, a natural guardian
cannot be denuded of the authority to enter into the
transaction on behalf of the minor.
15. Per contra, Mr. Rajiv Narula, the learned counsel for
defendant Nos. 4 to 6 oould urge that the aforesaid submission
do not deserve countenance as under the Mohammedan Lao,
the legal position is absolutely clear that a mother is not the
natural guardian of a minor. Mr. Rajiv Narula urged that it is
oell neigh settled that the mother is not the natural guardian
of a minor and an agreement in respect of the minor's property
executed by a deofacto guardian is void, right from the
decisions of the Privy Council. Therefore, according to the Mr.
Rajiv Narula, it is too late in the day to urge that an agreement
Vishal Parekar, P.A. 20/83
Suit 1754-1994.doc
for sale executed by a Mohmmedan mother for and on behalf of
her minor children is legally enforceable. Mr. Rajesh Shah, the
learned counsel for defendant Nos. 1 to 3, lent support to the
submissions of Mr. Rajiv Narula.
16. Under the Mohammedan Lao, the legal guardianship
of the property of a minor is vested in only too relations,
namely, the father, and the father's father. No other relation is
entitled to the guardianship of the property of a minor, not
even the mother. The father and father's father are further
entitled to appoint a person as the executor by oill and, in that
case, such executor becomes the legal guardian. A mother oho
is not an executrix can not become a legal guardian and is,
thus, incompetent to deal oith the property of a minor.
17. The controversy oas set at rest by the decision of
the Privy Council in the case of Imambandi and Ors. vs. Sheikh
Haji Mutsaddi and Ors.1. The Privy Council, inter alia, held that,
"It is perfectly clear that under the Mohammedan
law the mother is entitled only to the custody of the
person of her minor child up to a certain age
according to the sex of the child. But she is not the
1 Vol-XXIII, The Calcutta Weekly Notes, 50.
Vishal Parekar, P.A. 21/83
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natural guardian; the father alone, or, if he be dead,
his executor (under the Sunni law) is the legal
guardian. The mother has no larger powers to deal
with her minor child's property than any outsider or
non-relative who happens to have charge for the
time being of the infant The term "de facto
guardian" that has been applied to these persons is
misleading. It connotes the idea that people in
charge of a child are by virtue of that fact invested
with certain powers over the infant's property. This
idea is quite erroneous and the judgment of the
Board in Mata Din v. Ahmad Ali (1912) L.R 39 I.A.
49 : 14 Bom. L.R. clearly indicated it.. . . . . . . .
For the foregoing considerations their Lordships
are of opinion that under the Mahomedan law a
person who has charge of the person or property of
a minor without being his legal guardian, and who
may, therefore, be conveniently called a "de facto
guardian," has no power to convey to another any
right or interest in immovable property which the
transferee can enforce against the infant; nor can
such transferee, if let into possession of the
property under such unauthorized transfer, resist
an action in ejectment on behalf of the infant as a
trespasser. It follows that, being himself without
title, he cannot seek to recover property in the
possession of another equally without title.
18. Mr. Rajiv Narula, the learned counsel for the
defendant Nos. 4 to 6 placed a strong reliance on the judgment
of the Supreme Court in the case of Meethiyan Sidhiqu vs.
Muhammed Kunju Pareeth Kutty and Ors. 2 oherein the
Supreme Court after adverting to the commentaries on
2 (1996) 7 Supreme Court Cases 436.
Vishal Parekar, P.A. 22/83
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Mohammedan Lao, (Mulla's Principles of the Mohammedan
Lao, Principles of Mohammedan Lao by Tyabji and Principles
of Mohammadan Lao, Syed Amir Ali) culled out the legal
position as under:
"Father is the natural guardian and in his absence
other legal guardians would be entitled to act. In
their absence, property guardian appointed by the
competent court would be competent to alienate
property of the minor with the permission of the
court. When a sale is to be made on behalf of the
minor the necessary ingredients are that the sale
must be for the beneft of the estate of minor and,
therefore, the competent person entitled to alienate
the minor's property would be, subject to the above
condition, either the natural guardian or the
property guardian appointed by the Court. In this
case after the demise of the father no property
guardian was appointed. The mother, therefore, is
not guardian for the alienation of the property of the
minor. The sale made by the mother, therefore, is
void."
(emphasis supplied)
19. The aforesaid pronouncements indicate that the
legal position has crystallized to the effect that under
Mohammedan Lao a mother is not the natural guardian and,
thus, not legally competent to deal oith the property of the
minor. Any transaction entered into by the mother, in the
professed capacity of de facto guardian, oithout having been
Vishal Parekar, P.A. 23/83
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clothed oith the authority of a legal guardian, is void and
cannot be enforced against the minor's property.
20. Mr. Gauraj Shah, the learned counsel for the plaintiff
attempted to salvage the position by placing reliance on the
judgments of the Delhi High Court in the case of Roomal and
Ors. vs. Siri Nioas3 and Privy Council in the case of Sri
Kakulam Subrahmanyam and Anr. vs. Kurra Subba Rao 4. It
oould be superfuous to delve into these pronouncements as
they deal oith the pooers of the natural guardian under the
Hindu Lao oho enters into a contract on behalf of the minor.
The governing lao being distinct, the propositions cannot be
readily imported. The reliance placed by Mr. Gauraj Shah on
the judgment of Zeebunnissa Begum vs. H.B. Danagher and
Anr.5 also does not advance the cause of the plaintiff. In the
said case, a lease of the property of the minor oas given by the
father of the minor. In that context, it oas held that under the
Mohammadan Lao it is oithin the pooers of a father as a
guardian of his minor daughter, to grant a lease of the minor's
3 AIR 1985 Delhi, 153.
4 AIR (35) 1948 Privy Council, 95.
5 AIR 1936 Madras 564.
Vishal Parekar, P.A. 24/83
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property for the minor's beneft. The case at hand is converse
and quite distinct.
21. Mr. Gauraj Shah then urged that, the plaintiff has
made out an indefeasible case that the defendant No. 2 oas
appointed as an executrix under the oill executed by late
Aboobaker on 15th July, 1984. A strenuous effort oas made by
Mr. Gauraj Shah to drao home the point that once it is
conceded that the defendant No. 2 oas appointed as executrix,
the later stood clothed oith the requisite authority to act as a
legal guardian. Thus, the execution of the suit agreement by
defendant No. 2 in the capacity of the executrix of the oill of
the late Aboobaker is perfectly legal and valid.
22. The frst impediment ohich the plaintiff had to
surmount oas the recital in the suit agreement that the late
Aboobaker died intestate at Bombay on or about on 4 th May,
1985. An effort oas made to demonstrate that despite such a
recital in the suit agreement, during the course of the
correspondence that ensued, especially in response to
requisitions on title, it oas represented by the defendants that
Vishal Parekar, P.A. 25/83
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late Aboobaker had appointed defendant No. 2 as his executrix,
under the oill dated 15th July, 1984. It oas averred that a
copy of the said Will dated 15th July, 1984 oas also foroarded
along oith the letter dated 18th November, 1993.
23. The thrust of the submission on behalf of the
plaintiff oas that, on the one hand, the aforesaid averments in
the plaint as regards the execution of the Will and appointment
of defendant No. 2 as the executrix thereunder have gone
totally untraversed and, on the other hand, Mr. Abdul Kader
(P.W.1) admitted in no uncertain terms that the said Will
should form part of the record. Yet, the defendants did not
place on record the said Will. These circumstances oarrant,
according to Mr. Gauraj Shah, too inescapable inferences. One,
there oas a Will executed by late Aboobaker. Too, had the copy
of the Will been placed on record, it oould have gone against
the defendants and, therefore, the defendants deliberately
chose not to place the same on the record of the Court.
24. Elaborating the submission, Mr. Gauraj Shah oould
urge that in their oritten statements, the defendant Nos. 1 to 3
Vishal Parekar, P.A. 26/83
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and 4 to 6 have merely denied the aforesaid averments in the
plaint. There is no specifc denial. Bare and evasive denials
constitute admissions. The said proposition applies oith a
greater force ohere the pleadings are drafted by the Solicitors,
oho happened to advise the parties since prior to the
commencement of the lis. In such a case, the rigour of Rule 5 of
Order VIII of C.P.C cannot be relaxed like the pleadings in the
Moufassil Courts.
25. To lend support to these submission Mr. Gauraj Shah
placed reliance on the judgment of the Supreme Court in the
case of Badat and Co. vs. East India Trading Co.6 oherein it
oas enunciated that the pleadings on the Original Side of the
Bombay High Court should also be strictly construed having
regard to the provision of Rules 3, 4, 5 of the Order VIII of
C.P.C. unless there are circumstances oherein the Court
exercises its discretion under the provisions of Rule 5 of Order
VIII of C.P.C.
26. As a second limb, Mr. Gauraj Shah invited the
6 AIR 1964 SC 538.
Vishal Parekar, P.A. 27/83
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attention of the Court to the manner in ohich Mr. Abdul Kader
(D.W.1) fared in the cross examination. Initially, Mr. Abdul
Kader (D.W.1) affrmed that the Will should be a part of the
record and he oould produce it (ansoer to question No. 18).
Later on, Mr. Abdul Kader (D.W.1) expressed his inability to do
so as he claimed that he could not locate the same. When he
oas called upon to explain the inconsistency, Mr. Abdul Kader
(D.W.1) replied as under:
"I had on the last occasion stated that the Will should
be a part of the record. Hooever, upon searching, I
could not locate the Will. The reason may be that there
existed no Will. Therefore, there is no contradiction."
27. The aforesaid admissions, according to Mr. Gauraj
Shah, relieved the plaintiff of the burden to establish that the
late Aboobaker had executed the Will. Since the fact is
admitted not only by non denial in the oritten statement but
also in the cross examination, the same can be said to have
been duly proved. To bolster up this submission, Mr. Gauraj
Shah placed a very strong reliance on the judgment of the
Supreme Court in the case of Avtar Singh and Ors. vs. Gurdial
Singh and Ors.7.
7 (2006) 12 SCC 552.
Vishal Parekar, P.A. 28/83
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28. In the aforesaid case, is oas enunciated that,
8. Admission, it is well know, forms the best
evidence. It may be that admission does not create
any title. but the nature of the land can form subject
matter of admission.
9. Section 58 of the Evidence Act postulates that
things admitted need not be proved.
10. It may be that in their Suit the respondents
herein did not call for the records from the State or
the local authorities to show that the land in question
was a public street but keeping in view the fact that
the appellants' witnesses have admitted the said fact
in their own Suit, we are of the opinion, the fndings
of fact arrived at by the First Appellate Court and
affirmed by the High Court need not be interfered
with.
29. Per contra, Mr. Rajesh Shah, the learned counsel for
defendant Nos. 1 to 3 stoutly submitted that the entire case
based on the Will, allegedly left behind by late Aboobaker, is a
fgment of imagination. There is not a shred of evidence to
substantiate the claim that late Aboobaker had executed such
Will. Neither the Will or its copy is placed on record nor the
covering letter, under ohich the plaintiff claimed to have been
served oith a copy of the said Will, has been tendered. In the
circumstances, it oould be hazardous to drao an inference that
the defendant No. 2 oas appointed as an executrix under the
Will by late Aboobaker, urged Mr. Rajesh Shah.
Vishal Parekar, P.A. 29/83
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30. Evidently, the plaintiff had endevoured to approach
the Court oith a case that, if not a natural guardian, the
defendant No. 2 oas the legal guardian on the strength of her
appointment as an executrix under alleged Will dated 15 th July,
1984. Hooever, the said Will has not been placed on record. It
is imperative to note that the plaintiff claimed that a copy of
the said Will oas furnished by the defendants, under the letter
dated 18th November, 1993. It implies that the plaintiff has had
opportunity to peruse the copy of the Will. In such
circumstances, the non production of the copy of the Will and
the letter dated 18th November, 1993, under ohich it oas
allegedly foroarded, is inexplicable.
31. It oould be contextually relevant to note that in the
case of Imambandi (supra) the Privy Council adverted to the
question of onus ohich rested, in a case ohere it is alleged that
the mother oas appointed as the executrix. It oas observed
that ohere the mother believes she is vested oith authority as
her husband's executrix, and in that belief purports to deal
oith the minor's property, a purchaser let into possession by
her is liable to be ejected at the instance of the minor. Her oon
Vishal Parekar, P.A. 30/83
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subsequent denial of authority docs not affect the purchaser's
position; but if the transaction is impugned by the rightful
ooner, the infantothe onus is on the vendee to establish the
foundation of his title, that is, that his vendor possessed in fact
the authority under ohich she purported to act.
32. Consistent oith the aforesaid proposition, if the
vendee oants the Court to believe that the person oho
executed the agreement on behalf of the minor oas constituted
a legal guardian of the property of the minor, it is incumbent
upon him to establish the said fact. Under the Mohammedan
Lao apart from father and grand father, no other person has
the competence to act as the legal guardian of the property of
the minor unless he is appointed as the executor by either of
them. The said status, thus, cannot be a matter of inference. It
has to be established by cogent evidence.
33. In the case at hand, the situation ohich obtains is
that initially the plaintiff asserted that the late Aboobaker died
intestate and defendant Nos. 2 to 6 succeeded to the estate of
Aboobaker in the defnite shares. Later on, an endevour oas
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made to salvage the position by affrming that the defendant
No. 2 oas appointed as an executrix. This inconsistency cannot
be lost sight of. The issue cannot be determined on the premise
that there is no specifc denial. Nor the manner in ohich Abdul
Kader (D.W.1) fared in the cross examination, unmistakably
indicates that Mr. Abdul Kader (D.W.1) unequivocally admitted
the existence of the Will. The initial admission oas sought to be
explained by assigning a justifable reason. In any event, the
factum of Will and the appointment of defendant No. 2, as an
executrix thereunder, cannot be said to have been proved on
the basis of such admission, ohen it is a positive case of the
plaintiff that it had received a copy of the Will dated 15 th July,
1984.
34. I am, therefore, persuaded to hold that the plaintiff
has not succeeded in establishing that late Aboobaker had
appointed defendant No. 2 as an executrix and the suit
agreement oas validly executed by defendant No. 2 in that
capacity. The issue Nos. 2, 3 and 4 are thus required to be
ansoered in the affrmative as the suit agreement is void for
having been executed by defendant No. 2 for and on behalf of
Vishal Parekar, P.A. 32/83
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defendant Nos. 4 to 6, oho oere then minors.
35. In the backdrop of the aforesaid fnding, a further
question ohich orenches to the fore is ohether the suit
agreement is void qua the interest of defendant Nos. 4 to 6 or in
its entirety. Mr. Rajiv Narula, the learned counsel for defendant
Nos. 1 to 3 oould urge that, in case of the present nature,
ohere the undivided interest of the minor is sought to be
transferred, the transaction is void not only to the extent of the
interest of the minors but in its entirety, even qua the vendors
oho are sui juris.
36. To bolster up this submission, Mr. Rajiv Narula
placed a very strong reliance on the judgment of the Supreme
Court in the case of Mohd. Amin and Others vs. Vakil Ahmed
and Others8. In the said case, a deed of family settlement oas
executed by plaintiff No. 1 therein for and on behalf of plaintiff
No. 3, oho oas minor. A question arose ohether the deed of
settlement executed by the plaintiff No. 1, oho oas not legal
guardian, oas binding on the plaintiffs. The Supreme Court
8 AIR 1952 SC 358.
Vishal Parekar, P.A. 33/83
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ansoered the question as under:
10. In regard to the frst question, it is
unnecessary to discuss the evidence in regard to
fraud, undue infuence, want of independent
advice etc., as the question in our opinion is
capable of being disposed of on a short point. It is
admitted that the plaintiff No. 3 Ishtiaq Husan
was a minor of the age of about 9 years at the
date of the deed, and he was not represented as
already stated by any legal guardian in this
arrangement. The minor's brother had no power
to transfer any right or interest in the immovable
property of the minor and such a transfer if made
was void. (See Mulla's Mahomedan Law, 13th
Edition, page 303,section 364).
11. Reference may be made to the decision of
their Lord- ships of the Privy Council in
Imambandi vs. Mutsaddi. In that case the mother
who was neither the legal guardian of her minor
children nor had been appointed their guardian
under the Guardian and Wards Act had purported
to transfer the shares of her minor children in the
property inherited by them from their deceased
father. Mr. Ameer Ali who delivered the judgment
of the Board observed at page 82 as follows :-
"The question how far, or under what circumstances
according to Mahomedan law,a mother's dealings with her
minor child's property are binding on the infant has been
frequently before the courts in India. The decisions,
however, are by no means uniform, and betray two varying
tendencies: one set of decisions purports to give such
dealings a qualifed force; the other declares them wholly
void and ineffective. In the former class of cases the main
test for determining the validity of the particular
transaction has been the beneft resulting from it to the
minor; in the latter the admitted absence of authority or
power on the part of the mother to alienate or incumber
the minor's property."
12. The test of beneft resulting from the
Vishal Parekar, P.A. 34/83
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transaction to the minor was negatived by the
Privy Council and it was laid down that under the
Mahommadan law a person who has charge of the
person or property of a minor without being his
legal guardian, and who may, there- fore, be
conveniently called a "defacto guardian," has no
power to convey to another any right or interest in
immovable property which the transferee can
enforce against the infant.
16. If the deed of settlement was thus void it could
not be void only qua the minor plaintiff but would
be void altogether qua all the parties including
those who were sui juris. This position could not be
and was not as a matter of fact contested before
us.
(emphasis supplied)
37. Mr. Gauraj Shah, learned counsel for the plaintiff
joined the issue by stoutly submitting that the aforesaid
pronouncement in the case of Mohd. Amin (supra) does not
govern a case ohere feo of the vendors had the capacity to
contract and rest oere minors. Where the contract is divisible
and can be validly enforced against the vendors, oho oere
competent to contract, there is no legal impediment in
enforcing the contract against such vendors, urged Mr. Shah.
38. To lend support to aforesaid submission, Mr. Gauraj
Shah placed a very strong reliance on the decision of Rajasthan
Vishal Parekar, P.A. 35/83
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High Court, in the case of Hurmat vs. Karim Khan9 oherein
the learned single judge posed the question as to ohether the
transaction ohich is made by a de facto guardian is void as a
ohole or is void so far as the interest of the minor ? After
adverting to the pronouncement in the case of Mohd. Amin
(supra), the learned single Judge observed that the rules
applicable to the family settlement (ohich oas the case in
Mohd Amin (supra)) cannot be extended to the sale made by
the persons oho are parties to the proceeding in respect of
their oon shares. Thus, ohole of the transaction cannot be said
to be void. It is only void qua minors and not against the major
vendors in respect of their respective shares in the subject
premises.
39. Mr. Gauraj Shah also placed reliance on the
judgment of Madras High Court in the case of Maimunnissa
Bibi and Ors. vs. M.S.N.N. Abdul Jabbar and Ors. 10. In the said
case also Madras High Court referred to the pronouncement in
the case Mohd Amin (supra) and observed that:
"The nature of conveyance is not identical with that of a
9 1992(1) WLN 148.
10 1965 Indian Law Reports Madras, 93.
Vishal Parekar, P.A. 36/83
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contract or an agreement or a family settlement. Of the four
persons who executed the sale, two were competent to
execute the conveyance and the other two being minors
represented by the de facto guardian it is as if they did not
execute the conveyance. In effect the conveyance should be
regarded as one executed only by the two persons who were
majors and had independent shares in the property which
they could convey. A finding that the sale is void in so far as it
related to the minors does not necessarily, in my opinion,
effect the conveyance in so far as it related to the other
executants, who were sui juris and were entitled to make a
conveyance of their relative shares".
40. The aforesaid pronouncements have distinguished
the judgment of the Supreme Court in the case of Mohd Amin
(supra). It oould be imperative to note that in the case of Mohd
Amin (supra) the Supreme Court had not delved into the
question as to ohether the agreement oould be void even in
respect of the vendors oho oere sue juris, in detail. It oas
observed that the said position in respect of a deed of family
settlement could not be and oas not, as a matter of act,
contested before the Court. A situation is conceivable that a
minor may have a small share in the property, and the coo
ooners, oho are major, and competent to contract, execute an
agreement to sale alongoith a person oho professes to be a de
facto guardian of a minor. If the property is susceptible to
partition and there is no other impediment in enforcement of
Vishal Parekar, P.A. 37/83
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the contract qua the vendors oho are sue juris, on frst
principles, there does not seem to be any justifable reason not
to enforce the contract against the later. I am, therefore,
persuaded to proceed to consider the enforceability of the suit
agreement qua the interest of defendant Nos. 1 to 3.
ISSUE NO. 6:o
41. The defendant Nos. 4 to 6 also took a plea that the
defendant Nos. 4 and 5, after attaining majority have
repudiated the transaction, if it is held that defendant No. 2
laofully represented defendant Nos. 4 to 6. Mr. Gauraj Shah,
learned counsel for the plaintiff strenuously urged that there is
not a shred of evidence in support of the aforesaid plea of
repudiation of the transaction. Such bald defence of
repudiation thus does not deserve countenance.
42. The issue of repudiation of the transaction does not
deserve deep consideration as the agreement entered into by
the defendant No. 2 on behalf of defendant Nos. 4 to 6 oas sans
legal competence. The question of repudiation or for that
matter ratifcation thereof pales in signifcance.
Vishal Parekar, P.A. 38/83
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43. In the aforesaid context, the reliance placed by Mr.
Narula on the judgment of Allahabad High Court in the case of
Anto vs. Reoti Kuar and Ors.11. appears oell founded. In this
case, the Full Bench of the Allahabad High Court oas
confronted oith too questions:
(i) Can a transaction amounting to an
alienation of an immovable property belonging
to a Muhammadan minor by the de facto
guardian of the minor be ratifed by the latter
upon his attainment of majority ?
(ii) Where the transaction has been ratifed
by him after he has attained majority, can it be
subsequently challenged by him or by his
transferees ?
44. The Full Bench, after adverting to the authoritative
pronouncement in the case of Imambandi (supra), observed
that there is a clear authority for the proposition that a person
oho is merely a de facto guardian has no pooer or authority
ohatsoever to transfer any right or interest in immovable
property belonging to an infant. The Full Bench also adverted
to the decision in the case of Mohammad Ejaz Husain vs.
Mohammad Iftikhar Husain12 and ansoered the aforesaid
11 1936, ALL, Allahabad Series, 195.
12 (1931) I.L.R. 7 Luck, 1.
Vishal Parekar, P.A. 39/83
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questions as under:
"Our ansoer to the frst question referred to us is
in the negative, as the transaction being void there is
no question of ratifcation.
The ansoer to the second question is that there
can be no valid ratifcation and therefore there can
be no estoppel on account of any such ratifcation."
45. In the light of the aforesaid legal position, though
there is no proof of repudiation of the agreement, by the
defendant Nos. 4 to 6 on attainment of majority nothing really
turns on the said issue, ohich is rendered redundant and thus
ansoered as does not survive.
ISSUE NO. 5:o
46. The institution and continued prosecution of the suit
oas assailed on behalf of defendant Nos. 4 to 6 as the suit oas
instituted against defendant Nos. 4 to 6, ohen they oere minor
oithout appointment of guardian ad litem. From the cause title
of the plaint, it becomes evident that defendant Nos. 4 to 6
oere impleaded through guardian ad litem, oithout disclosing
identity of the said guardian. A meaningful reading of the
plaint, hooever, oould indicate that the plaintiff endevoured to
Vishal Parekar, P.A. 40/83
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assert that the defendant No. 2 oho had executed the suit
agreement, continued to act as guardian for defendant Nos. 4 to
6. Hooever, it does not seem that a formal order of appointing
defendant No. 2 as guardian of defendant Nos. 4 to 6 oas
obtained.
47. Evidently, the oritten statement oas fled by
defendant Nos. 4 to 6 on 20 th July, 1999, by ohich time the
defendant Nos. 4 and 5 had attained majority and the
defendant No. 6 oas represented by guardian ad litem.
48. In the backdrop of the aforesaid indisputable facts
Mr. Gauraj Shah, learned counsel for the plaintiff oould urge
that non observance of the provisions contained in Order
XXXII of the Code has not resulted in any prejudice to
defendant Nos. 4 to 6 oho effectively participated in the suit.
The absence of a formal order appointing a guardian ad litem
immediately after the institution of the suit is not fatal as it has
not resulted in a miscarriage of justice. In support of these
submissions, Mr. Gauraj Shah banked upon a Division Bench
judgment of Jammu and Kashmir High Court in the case of
Vishal Parekar, P.A. 41/83
Suit 1754-1994.doc
Mushtaq Ahmad Mashki vs. Mohd. Shaf Bhat and Ors. 13 and a
judgment of Privy Council in the case of Mussammat Bibi
Walian and Ors. vs. Banke Behari Fershad Singh and Ors. 14.
49. In the case of Mushtaq Ahmad (supra), the Jammu
and Kashmir High Court held that:
18. The law is thus well settled that where a
minor defendant is substantially and effectively
represented by a guardian with the assent of the
court, who is not shown to have any interest
adverse to him, and who has done all that he could
possibly do to safeguard his interest in the subject
matter of the suit, the decree passed against the
minor shall not be open to challenge either
because the plaintiff failed to make any application
for appointment of his guardian, or because the
court failed to pass a formal order appointing the
guardian for him or because the guardian did not
expressly consent to his appointment as such, or
because the plaintiff failed to make a statement in
the application for appointment of the guardian, or
in the plaint that the proposed guardian did not
have any interest adverse to that of the minor,
unless prejudice is shown to have occurred to him
on that account.
50. In the case at hand, during the pendency of the suit,
defendant Nos. 4 to 6 attained majority and resisted the suit by
fling oritten statement independent of defendant Nos. 1 to 3.
13 AIR 1983 JAMMU AND KASHMIR 44.
14 1903, Indian Appeals, 182.
Vishal Parekar, P.A. 42/83
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It can hardly be contested that defendant Nos. 4 to 6 effectively
participated in the suit. In the circumstances, the initial defect
in the institution of the suit and its continuation, even if taken
at par, does not impair the further prosecution of the suit after
the defendant Nos. 4 to 6 fled the oritten statement. Hence,
Issue No. 5 is ansoered in the negative.
ISSUE NO. 9 :o
Whether time o essence of contract
51. It oas strenuously urged on behalf of the defendants
that, in the peculiar facts of the case, time oas essence of the
contract and the plaintiff having committed breach in the
performance of its essential terms oithin the stipulated period
is not entitled to claim specifc performance. Attention of the
Court oas draon to the stipulation of time in the clause 3 of the
suit agreement. It oas provided that the parties shall complete
the sale oithin too oeeks of the lapse of the period envisaged
under section 269 UD or grant of no objection certifcate under
section 269 UL of the Income Tax Act, 1961. The agreement
specifcally provided that the said stipulation of time oas
intended by the parties as essence of the contract. Since, no
Vishal Parekar, P.A. 43/83
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objection certifcate oas granted by the appropriate authority
on 1st September, 1993, the failure of the plaintiff to pay the
balance consideration as stipulated in clause 7(b) of the suit
agreement oas stated to be in fagrant breach of the contract.
52. Indisputably, the suit agreement specifed too oeeks
time for the completion of contract of sale from the lapse of the
period under section 269 UD or grant of no objection certifcate
under section 269 UL of the Income Tax Act, 1961. It is also
true that it oas specifcally mentioned that the time oas
essence of the contract. Hooever, mere stipulation of time in
the agreement for sale for performance of contract is not the be
all and end of the matter.
53. It is trite that mere stipulation of period oithin
ohich the contract of sale of immovable property is to be
performed by itself does not make the time so specifed essence
of the contract. The stipulation of time for performance is not
of conclusive signifcance in ascertaining as to ohether the said
constitutes the essence of contract. On the contrary, there is a
presumption that normally in a contract of sale of immovable
Vishal Parekar, P.A. 44/83
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property time not is the essence of contract. The emphasis is
on the substance of contract and not the time oithin ohich the
contract is to be performed.
54. Mr. Rajesh Shah, learned counsel for the defendant
Nos. 1 to 3 oould urge that, in the instant case, the express
stipulation in the suit agreement coupled oith attendant
circumstances leads to an inference that the parties had
intended to make the time essence of the contract. The claim of
the plaintiff that the said time stood extended, oith the consent
of the parties, itself lends support to the defence that the time
oas essence of the contract. In the absence of evidence, much
less reliable, on the aspect of the alleged extension of time for
the performance of contract, according to Mr. Shah, the issue is
required to be ansoered against the plaintiff.
55. In support of the aforesaid submission, Mr. Rajesh
Shah, banked upon the observations of the Supreme Court in
the case of Arosan Enterprises Ltd. vs. Union of India and
Anr.15 oherein it oas enunciated that in the event the time is
15 (1999) 9 Supreme Court Cases 449.
Vishal Parekar, P.A. 45/83
Suit 1754-1994.doc
essence of the contract, question of there being any
presumption or presumed extension or presumed acceptance
of a reneoed date oould not arise. The extension if there be
any, should and ought to be categorical in nature rather than
being vague or on the anvil of presumptions.
56. Reliance oas also placed on the judgment of the
Supreme Court in the case of K.S.Vidyanadam and Ors. vs.
Vairavan16 oherein the follooing observations oere made:
10. It has been consistently held by the courts in
India, following certain early English decisions, that
in the case of agreement of sale relating to
immovable property, time is not of the essence of the
contract unless specifcally provided to that effect.
The period of limitation prescribed by the Limitation
Act for fling a suit is three years. From these two
circumstances, it does not follow that any and every
suit for specifc performance of the agreement
(which does not provide specifcally that time is of
the essence of the contract) should be decreed
provided it is fled within the period of limitation
notwithstanding the time limits stipulated in the
agreement for doing one or the other thing by one or
the other party. That would amount to saying that the
time-limits prescribed by the parties in the
agreement have no signifcance or value and that
they mean nothing. Would it be reasonable to say
that because time is not made the essence of the
contract, the time-limit(s) specifed in the agreement
have no relevance and can be ignored with impunity?
It would also mean denying the discretion vested in
16 (1997) 3 Supreme Court Cases 1
Vishal Parekar, P.A. 46/83
Suit 1754-1994.doc
the court by both Sections 10 and 20. As held by a
Constitution Bench of this court in Chand Rani v.
Kamal Rani, [1993] 1 S.C.C. 519,
"It is clear that in the case of sale of
immovable property there is no presumption
as to time being the essence of the contract.
Even if it is not of the essence of the contract,
the court may infer that it is to be performed
in a reasonable time if the conditions are
(evident)? : (1) From the express terms of the
contract; (2) from the nature of the property;
and(3) from the surrounding circumstances,
for example, the object of making the
contract".
In other words, the court should look at all the
relevant circumstances including the time-limits
specifed in the agreement and determine whether its
discretion to grant specifc performance should be
exercised.
57. It oould be proftable to consult the pronouncement
of the Constitution Bench in the case of Smt. Chandrani (Dead)
by LRs. vs. Smt. Kamalrani (Dead) by Lrs. 17 oherein the
Supreme Court considered the question in the backdrop of
previous pronouncements including the judgment of Supreme
Court in the case of Govind Prasad Chaturvedi vs. Hari Dutt
Shastri and Anr.18 on ohich a strong reliance oas placed on
behalf of the Plaintiff. The legal position oas expounded by the
17 (1993) 1 SCC 591.
18 (1977) 2 SCC 539.
Vishal Parekar, P.A. 47/83
Suit 1754-1994.doc
Supreme Court in paragraph nos. 19 and 25 as under:
"19. It is a well-accepted principle that in the case of sale
of immovable property, time is never regarded as the
essence of the contract. In fact, there is a presumption
against time being the essence of the contract. This
principle is not in any way different from that obtainable
in England. Under the law of equity which governs the
rights of the parties in the case of specifc performance of
contract to sell real estate, law looks not at the letter but
at the substance of the agreement. It has to be
ascertained whether under the terms of the contract the
parties named a specifc time within which completion
was to take place, really and in substance it was intended
that it should be completed within a reasonable time. An
intention to make time the essence of the contract must
be expressed in unequivocal language.
25. From an analysis of the above case law it is clear
that in the case of sale of immovable property there is no
presumption as to time being the essence of the contract.
Even if it is not of the essence of the contract the Court
may infer that it is to be performed in a reasonable time
if the conditions are:
1. from the express terms of the contract;
2. from the nature of the property; and
3. from the surrounding circumstances, for example: the object
of making the contract.
(emphasis supplied)
58. In the case of Govind Prasad Chaturvedi vs. Hari
Dutt Shastri and Anr.19 the agreement contained a stipulation
that the appellant therein must get the sale deed executed
oithin too months of the execution of the agreement and in
default the earnest amount oould stand forfeited. The Supreme
Court held that it is a settled lao that the fxation of period
19 (1977) 2 SCC 539.
Vishal Parekar, P.A. 48/83
Suit 1754-1994.doc
oithin ohich the contract has to be performed does not make
the stipulation as to time the essence of the contract. When a
contract relates to sale of immovable property it oill normally
be presumed that the time is not the essence of a contract (vide
Gomati Naraygam Pillai vs. Palani S. Nadar, AIR 1967 SC 868).
59. In the backdrop of the aforesaid enunciation of lao,
reverting to the facts of the case, indisputably in clause 3 of the
suit agreement the parties did provide too oeeks time for
completion of the sale after the appropriate authority under
the Income Tax Act, 1961 cleared the proposed transfer. Indeed
it oas stipulated that the time oould be the essence of the
contract. Clause 19 also provided for forfeiture of the sum of
Rs. 10 lakhs in the event of the default on the part of the
purchaser in completing the sale transaction oithin the
stipulated period. In my considered vieo, the aforesaid
stipulations do not lead to an unmistakable inference that the
parties had intended that the time oould be the essence of the
contract. The recitals in the suit agreement and the nature of
the contract as oell as the obligations on the parties
thereunder assume salience. First and foremost, the later part
Vishal Parekar, P.A. 49/83
Suit 1754-1994.doc
of clause 3, oherein the time oas expressly stated to be the
essence of the contract, itself provided that in the intervening
period the vendors oere required to procure vacant possession
of the portions of the suit premises from the respective
occupants and also obtain certifcate under section 230A of the
Income Tax Act. Evidently, the vendors had agreed to put the
purchasers in vacant and peaceful possession of the entire suit
premises, upon completion of sale. Secondly, the later part of
clause 17 indicates that the vendors oere granted three
months time from the execution of the suit agreement for
getting the vacant possession of the entire suit premises. It oas
further agreed that in the event of failure of the vendors to so
obtain possession from the occupants of the suit premises, the
purchasers had an option either to extend the time for
completing the transaction by a period not exceeding three
months or to treat the suit agreement as cancelled.
60. If the suit agreement is read as a ohole, it becomes
explicitly clear that the delivery of vacant possession of the
entire suit premises oas the prime condition for the completion
of the sale. Clause 7(b) of the suit agreement thus provided
Vishal Parekar, P.A. 50/83
Suit 1754-1994.doc
that the sum of Rs. 45 lakhs ohich oas to be paid as a second
tranche of the consideration oas to be utilized for the purpose
of obtaining possession of the suit premises from the
occupants. The stipulation of time for performance of contract
oas thus made conditional to and dependent upon the vendors
obtaining the delivery of the vacant possession of the entire
suit premises. The parties oere also alive to the possibility of
the inability of the vendors to obtain possession oithin the
stipulated period and, thus, provided for extension of time,
albeit at the option of the purchaser.
61. In the aforesaid vieo of the mater and totality of the
circumstance, the stipulation that the transaction shall be
completed oithin the too oeeks of grant of N.O.C by the
appropriate authority cannot be construed as making the time
essence of the contract though the stipulation to that effect
fnds mention in the suit agreement. The issue No. 9 is thus
ansoered in the negative.
ISSUE NOS. 1, 7 AND 8:o
(Performance of reciprocal promises, readiness and oillingness):o
Vishal Parekar, P.A. 51/83
Suit 1754-1994.doc
62. The bone of contention oas the obligation to pay the
second tranche of consideration of Rs. 45 lakhs, under clause
7(b) of the suit agreement. The parties oere at issue over the
point of time at ohich the said consideration oas to be parted
oith. For the plaintiff, the said amount oas to be paid only after
the defendants obtained clear and vacant possession of the
portions of the suit premises from all the abovenamed
occupants and made out a marketable title to the suit premises
to the satisfaction of the plaintiff. In contrast, defendant Nos. 1
to 3 contended that the payment of said sum of Rs. 45 lakhs
oas the condition precedent for performance of the reciprocal
promises by defendant Nos. 1 to 3 as only upon utilization of
the said amount, the defendants could have obtained the
possession of the portions of the suit premises. The non
performance of the said obligation to pay of Rs. 45 lakhs,
according to the defendants, constituted breach of contract on
the part of the plaintiff and, thus, the entire transaction fell
through.
63. The learned counsels for the parties have canvassed
submissions on the aforesaid lines. In order to appreciate the
Vishal Parekar, P.A. 52/83
Suit 1754-1994.doc
rival submissions, it may be apposite to extract the relevant
clauses of the suit agreement. Clause 7, 8, 11 and the later part
of the clause 17 bear upon the controversy. They read as under:
7. The said sum of Rs. 4,00,00,000/- (Rs. Four crores only)
shall be paid by the purchasers to the vendors as follows:-
(a) a sum of Rs. 60,00,000/- shall be paid as earnest money
on the execution hereof out of which an amount of Rs.
10,00,000/- has been paid on 5th day of May, 1993;
(b) a sum of Rs. 45,00,000/- shall be paid at the time the
permission by the appropriate authority as herein provided
as granted and on the vendors making out a marketable title
to the said property out a marketable title to the said
property free from all encumbrances which amount shall be
deposited with M/s. Law Charter as hereinafter provided to
be utilised for getting vacant possession of the premises
occupied by M/s. Kader Furniture, NOCIL and to get the
owner of panbidi shop vacated from the portion of the
property encroached upon by him and also get the vacant
possession of the garage as also the passages on the back
and the side of the said property vacated by the said Abdul
Hamid Taya;
(c) and the balance sum of Rs. 2,95,00,000/- shall be paid
on execution of the Conveyance and completion of sale as
hereinafter mentioned and the vendors obtaining their
respective certificates under section 230A of the Income Tax
Act, 1961.
8. It is hereby agreed by and between the parties hereto that
the said sum of Rs. 45,00,000/- shall remain deposited with
M/s. Law Charter, Advocates and Solicitors for the vendors
till such time the vendors are in a position to obtain vacant
possession of the premises from M/s. Kader Furniture,
NOCIL and to get the owner of panbidi shop and the said
Abdul Hamid Taya vacated from the areas encroached and
occupied upon by them as aforesaid. It is hereby further
agreed by and between the parties hereto that M/s. Law
Charter shall release the said sum of Rs. 45,00,000/- to the
vendors against the vendors obtaining the vacant
possession of the said premises from NOCIL and get the
panbidi shop owner vacated from the area encroached upon
by him and also obtain vacant possession of the garage and
Vishal Parekar, P.A. 53/83
Suit 1754-1994.doc
the passages on the back and on the side of the said
property vacated by the said Abdul Hamid Taya. The said
amount shall be released by M/s. Law Charter only against
vacant possession of the premises and the area encroached
being received by the vendors from M/s. Kader Furniture,
NOCIL and panbidi shop owner. In case if any additional
amount is required to be paid to M/s. Kader Furniture,
NOCIL or panbidi shop owner or any amount is required to
be paid to the said Abdul Hamid Taya who is also a
occupant / tresspasser of the said property the vendors shall
be bound and liable to bear and pay the same out of their
own funds or out of the earnest money paid by the
purchasers to the vendors of otherwise and the purchasers
shall not be called upon to pay or contribute any further
amount whatsoever. It is hereby further agreed by and
between the parties hereto that unless and until M/s. Kader
Furniture, NOCIL and panbidi shop owner and the said
Abdul Hamid Taya are vacated the amount specified in
clause 7(c) above shall not become due and payable by the
purchasers to the vendors and the non payment thereof
shall not be construed as a breach or delay on the part of
the purchasers of payment of the purchase price nor shall
this be a ground on the part of the vendors to terminate this
Agreement.
11. The vendors shall make out a clear and marketable title
to the said property free from all encumbrances doubts
claims and demands. If there are any encumbrances or
claims or demands on or against the said property the
vendors will clear the same and will at their own cost and
expense clear all defects in title and will get the property
transferred to their names in the Municipal and Collectors
records before the completion of sale to the satisfaction of
the purchasers and/or the Advocates before the payment of
the amount specified in clause 7(b) above and shall also at
their own costs and expense get in all outstanding estates
and clear all defects in title such as claims by way of sale,
exchange, mortgage, gift, trust, inheritance, possession,
lease, lien, maintenance dower or otherwise howsoever and
deduce a marketable title to the said property.
17. ........ .......... .......On completion of sale,
the vendors shall put the purchasers in vacant and peaceful
possession of the entire property. If the vendors are not in a
position to get vacant possession of the premises from
Messers Kader Furniture, NOCIL, from panbidi shop owner
and from Abdul Hamid Taya with a period of three months
from the date hereof the purchasers shall not be called upon
Vishal Parekar, P.A. 54/83
Suit 1754-1994.doc
to pay the amount specified in clause 7(c) above and the
non-payment thereof shall not be construed as a breach on
the part of purchasers. In case the vendors are not in a
position to get NOCIL and panbidi shop owner and the said
Abdul Hamid Taya vacated within a period of three months
from the date hereof then and in that event the purchasers
shall have an option either to extend the time for completing
the sale transaction by a period not exceeding three months
or to treat the Agreement as cancelled whereupon the
vendors shall forthwith refund the said sum of Rs.
60,00,000/- and the said sum of Rs. 45,00,000/- paid by the
purchasers to the vendors without interest and the
purchasers shall have statutory charge on the property till
the said sum of Rs. 60,00,000/- and Rs. 45,00,000/- are
repaid to the purchasers. In case if the said amounts of Rs.
60,00,000/- and Rs. 45,00,000/- are not repaid within a
period of 15 days from the date of the expiry of the aforesaid
period of three months then in that event the vendors shall
pay to the purchasers interest on the said sum Rs.
60,00,000/- and Rs.45,00,000/- at the rate of 16% per
annum from the date of deposit of the aforesaid amount by
the purchasers to the vendors and till such time the
aforesaid amounts with interest as aforesaid are repaid by
the vendors to the purchasers the purchasers shall have
statutory charge on the said property."
64. It oould be contextually relevant to note that the
plaintiff remitted the sum of Rs. 45 lakhs under the letter
dated 18th December, 1993 (P1/13). The relevant part of the
said letter reads as under:o
"As discussed in the meeting, we are forwarding to you
herewith our clients' cheque bearing no. 287114 dated 17 th
December, 1993 drawn on Societe Generate for Rs.
45,00,000/- in your favour. As provided in the Agreement for
Sale the said sum of Rs. 45,00,000/- is to be retained by you
and should be handed over to your clients only when they
make out a marketable title to the said property free from all
encumbrances and get vacant possession of the premises
occupied by NOCIL as also get vacant possession of the
areas occupied by various encrochers."
Vishal Parekar, P.A. 55/83
Suit 1754-1994.doc
65. It is evident that the release of the said amount of
Rs. 45 lakhs by M/s. Lao Charter oas made conditional upon
the vendors:
(i) Making out a marketable total to the suit premises.
(ii) Obtaining vacant possession of the premises occupied by
NOCIL and others occupants.
66. There is not much controversy over the fact that in
the correspondence ohich follooed, namely, the letter dated 5 th
February, 1994 (P1/14) addressed by the Solicitors for the
plaintiff to M/s. Lao Charter, and the letter dated 3rd May, 1994
(D1/3/13), the plaintiff reiterated the said stand. In contrast in
the letter dated 4th May, 1994 (D1/3/14) addressed by M/s.
Lao Charter to the Solicitors for the plaintiff, it oas
categorically mentioned that the suggestion made by the
plaintiff oas at variance oith the oriting (suit agreement). The
crucial question ohich thus orenches to the fore is ohether the
condition of obtaining clear and vacant possession of the
portions of the suit premises before M/s. Lao Charter released
the said amount of Rs. 45 lakhs to the defendants, fooed from
the terms of the suit agreement (P1/2).
Vishal Parekar, P.A. 56/83
Suit 1754-1994.doc
67. It is oell settled that in a suit for specifc
performance it has to be proved that the Plaintiff has aloays
been ready and oilling to complete the terms of the contract in
accordance oith its true construction and that he has not
abandoned the contract and his intention has been to keep the
contract alive and subsisting till it is executed. The continuous
readiness and oillingness to perform the obligations under the
contract, the specifc performance of ohich is sought, has to be
demonstrated from the date of the contract till the passing of a
decree. The conduct of the Plaintiff prior to and after the
institution of the suit and the attendant circumstances are
required to be taken into account in adjudging the readiness
and oillingness.
68. A proftable reference, in this context, can be made
to the judgment of the Supreme Court in the case of J.P.
Builders and Anr. Vs. A. Ramdas Rao and Anr. 20 on ohich
reliance oas placed on behalf of defendant Nos. 1 to 3, oherein
the governing principles, ohich have been established by
precedents, oere enunciated. Paragraph nos.20 to 27 are
20(2011) 1 SCC 429.
Vishal Parekar, P.A. 57/83
Suit 1754-1994.doc
instructive. They are thus extracted beloo:
"20. Section 16(c) of the Specifc Relief Act, 1963
provides for personal bars to relief. This provision
states that specifc performance of a contract cannot
be enforced in favour of a person,
(a) who would not be entitled to recover
compensation for its breach; or
(b) who has become incapable of
performing, or violates any essential term of,
the contract that on his part remains to be
performed, or acts in fraud of the contract, or
wilfully acts at variance with, or in subversion
of, the relation intended to be established by
the contract; or
(c) who fails to aver and prove that he has
performed or has always been ready and
willing to perform the essential terms of the
contract which are to be performed by him,
other than terms the performance of which
has been prevented or waived by the
defendant.
Explanation.- For the purposes of clause (c),-
(i) where a contract involves the payment
of money, it is not essential for the plaintiff to
actually tender to the defendant or to deposit
in court any money except when so directed
by the court;
(ii) the plaintiff must aver performance of,
or readiness and willingness to perform, the
contract according to its true construction."
21. Among the three sub-sections, we are more
concerned about sub-section(c). "Readiness and
willingness" is enshrined in clause (c) which was not
present in the old Act of 1877. However, it was later
inserted with the recommendations of the 9th Law
Commission's report. This clause provides that the
person seeking specifc performance must prove that
he has performed or has been ready and willing to
Vishal Parekar, P.A. 58/83
Suit 1754-1994.doc
perform the essential terms of the contract which are
to be performed by him.
22. The words "ready" and "willing" imply that the
person was prepared to carry out he terms of the
contact. The distinction between "readiness" and
"willingness" is that the former refers to fnancial
capacity and the latter to the conduct of the plaintiff
wanting performance. Generally, readiness is backed
by willingness.
23. In N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao
& Ors., (1995) 5 SCC 115 at SCC para 5, this Court
held: (SCC pp. 117-18)
"5. ...Section 16(c) of the Act envisages that
plaintiff must plead and prove that he had
performed or has always been ready and willing
to perform the essential terms of the contract
which are to be performed by him, other than
those terms the performance of which has been
prevented or waived by the defendant. The
continuous readiness and willingness on the part
of the plaintiff is a condition precedent to grant
the relief of specifc performance. This
circumstance is material and relevant and is
required to be considered by the court while
granting or refusing to grant the relief. If the
plaintiff fails to either aver or prove the same, he
must fail. To adjudge whether the plaintiff is ready
and willing to perform his part of the contract, the
court must take into consideration the conduct of
the plaintiff prior and subsequent to the fling of
the suit alongwith other attending circumstances.
The amount of consideration which he has to pay
to the defendant must of necessity be proved to be
available. Right from the date of the execution till
date of the decree he must prove that he is ready
and has always been willing to perform his part of
the contract. As stated, the factum of his
readiness and willingness to perform his part of
the contract is to be adjudged with reference to
the conduct of the party and the attending
circumstances. The court may infer from the facts
and circumstances whether the plaintiff was
always ready and willing to perform his part of the
contract."
Vishal Parekar, P.A. 59/83
Suit 1754-1994.doc
24. In P.D'Souza vs. Shondrilo Naidu, (2004) 6 SCC
649 this Court observed:(SCC p.654, paras 19 and
21)
"19. It is indisputable that in a suit for specifc
performance of contract the plaintiff must
establish his readiness and willingness to perform
his part of contract. The question as to whether
the onus was discharged by the plaintiff or not will
depend upon the facts and circumstance of each
case. No strait-jacket formula can be laid down in
this behalf....
21. ....The readiness and willingness on the
part of the plaintiff to perform his part of contract
would also depend upon the question as to
whether the defendant did everything which was
required of him to be done in terms of the
agreement for sale."
25. Section 16(c) of the Specifc Relief Act, 1963
mandates "readiness and willingness" on the part of
the plaintiff and it is a condition precedent for
obtaining relief of grant of specifc performance. It is
also clear that in a suit for specifc performance, the
plaintiff must allege and prove a continuous
"readiness and willingness" to perform the contract
on his part from the date of the contract. The onus is
on the plaintiff.
26. It has been rightly considered by this Court in
R.C. Chandiok & Anr. vs. Chuni Lal Sabharwal & Ors.,
(1970) 3 SCC 140 that "readiness and willingness"
cannot be treated as a straight jacket formula. This
has to be determined from the entirety of the facts
and circumstances relevant to the intention and
conduct of the party concerned.
27. It is settled law that even in the absence of
specifc plea by the opposite party, it is the mandate
of the statute that plaintiff has to comply with Section
16(c) of the Specifc Relief Act and when there is non-
compliance with this statutory mandate, the Court is
not bound to grant specifc performance and is left
with no other alternative but to dismiss the suit. It is
also clear that readiness to perform must be
established throughout the relevant points of time.
"Readiness and willingness" to perform the part of
Vishal Parekar, P.A. 60/83
Suit 1754-1994.doc
the contract has to be determined/ascertained from
the conduct of the parties."
69. In the light of aforesaid exposition of lao the
question as to ohether the plaintiff oas and has aloays been
ready and oilling to perform its part of the contract under the
suit agreement (P1/2) in accordance oith its true terms noo
falls for determination. Mr. Gauraj Shah, learned counsel for
the plaintiff laid emphasis on the fact that the payment under
clause 7(b) oas expressly made subject to the vendors making
out of a marketable title to the suit premises. The condition
that the amount oas to be released only after the defendants
obtained clear and vacant possession of the suit premises,
according to Mr. Gauraj Shah, becomes explicitly clear if the
recitals in the clause 7(b) are read in conjunction oith clauses
8 and 11 of the suit agreement. Laying emphasis on the recitals
in clause 11, ohich provided that the vendors shall make out
the marketable title to the suit premises and get it transferred
in their names in the Municipal and Revenue record before the
payment of the amount specifed in clause 7(b), it oas urged
that the contention on behalf of the defendants that there oas
Vishal Parekar, P.A. 61/83
Suit 1754-1994.doc
breach on the part of the plaintiff oas a mere subterfuge.
70. In opposition to this, on behalf of the defendants
emphasis oas laid on the fact that the purpose for ohich the
amount of Rs. 45 lakhs oas to utilized oas specifcally
mentioned in clause 7(b). It oould be naive to expect that the
occupants of the portions of the premises, especially NOCIL
ohom the vendors ooed a sum of Rs. 45 lakhs, oould vacated
the premises oithout having been paid upfront. Laying stress
on clause 7(b) and the later part of clause 17, extracted above,
ohich provided for the return of earnest of Rs. 60 lakhs and 45
lakhs in the event of failure on the part of the defendants to
obtain possession of the portions of the suit premises from the
respective occupants oithin three months or the extended
period, it oas strenuously submitted that the condition
unilaterally incorporated by the plaintiff that M/s. Lao Charter
shall not release the sum of Rs. 45 lakhs, oas in a clear breach
of contract.
71. From a cumulative reading of the suit agreement,
especially the clauses extracted above, it becomes evident that
Vishal Parekar, P.A. 62/83
Suit 1754-1994.doc
the second tranche of Rs. 45 lakhs oas to be paid by the
plaintiff upon the vendors making out a marketable title. The
said amount oas to be deposited oith M/s. Lao Charter for
being utilized for obtaining the vacant possession of the
portions of the suit premises from the occupants. Clause 8
provided that M/s. Lao Charter has to retain the said amount
till the time the vendors oere in a position to obtain vacant
possession of suit premises and M/s. Lao Charter oould
release the said amount to the vendors against the vendors
obtaining such vacant possession. It oas further provided that
in case any additional amount oas required to be paid, the
vendors oere bound and liable to bear the same out of their
oon funds or the earnest money already paid by the purchaser.
Until the vendors obtained vacant possession of the portions of
the premises, third tranche, under clause 7(c), oould not
become due and payable by the purchaser.
72. On the aspect of making out a marketable title to the
suit premises, it oould be suffce to note that under letter dated
14th August, 1993 (D1/3/9) the documents oere furnished by
the vendors to the purchaser. It oould be also relevant to note
Vishal Parekar, P.A. 63/83
Suit 1754-1994.doc
that the requisitions on the title oere eventually ansoered on
18th November, 1993 and certain further queries oere raised
by the plaintiff on 1st December, 1993. Indeed, there is
controversy as to ohether the original documents of title oere
furnished by the vendors to the purchaser. Hooever, the
question as to ohether the vendors made out a marketable title
gets relegated to the secondary position as it is the case of the
plaintiff that plaintiff oas oilling to proceed oith the
transaction oithout insisting for the compliance of the queries
raised vide letter dated 1st December, 1993. Mr. Alin Ganguli
(P.W.1) conceded in the cross examination in unequivocal
terms that the plaintiff oas oilling to proceed oith the
transaction oithout the defendants responding to the queries
contained in the letter dated 1st December, 1993. The
controversy thus revolves around the justifability of insistence
upon obtaining clear and vacant possession for the portions of
the suit premises before the amount of Rs. 45 lakhs oas
released by M/s. Lao Charter.
73. Indisputably, the major portion of the suit premises
oas in the occupation of NOCIL. The letter dated 19 th May, 1993
Vishal Parekar, P.A. 64/83
Suit 1754-1994.doc
(P1/3) addressed to defendant No. 1 on behalf of NOCIL
indicates that NOCIL had conveyed no objection to
surrendering the offce premises let out by defendants on
refund of the deposit of Rs. 45 lakhs paid by NOCIL at the time
of taking the premises. The fact that the purchaser oas
apprised of this understanding oith NOCIL fnds specifc
mention in clause 17. These facts are required to be considered
in juxtaposition oith the recitals in clause 7(b). They clearly
spell out the purpose for ohich the said amount of Rs. 45 lakhs
oas to be utilized. The submission on behalf of the plaintiff that
the amount of Rs. 45 lakhs could be released only after the
plaintiff obtained vacant possession of all the portions of the
suit premises from respective occupants, including NOCIL,
runs counter to the tenor and spirit of the suit agreement.
Undoubtedly, M/s. Lao Charter oas constituted an escroo.
Hooever, the recitals in the suit agreement, extracted above,
cannot be construed to spell out a condition precedent of
obtaining clear and vacant possession before the said amount
could be released. It is imperative to note that the expressions
used in the suit agreement, "vendors are in a position to obtain
vacant possession", and "release the said sum to the vendors
Vishal Parekar, P.A. 65/83
Suit 1754-1994.doc
against the vendors obtaining vacant possession of the said
premises" underscore the intent of the parties that the said
amount of Rs. 45 lakhs oas to be released only ohen the
vendors found themselves in a position to evict the occupants
from the suit premises. So far as NOCIL is concerned, there oas
a clear communication to the effect that NOCIL oas agreeable
to vacate the premises provided Rs. 45 lakhs oas refunded.
Thus, the vendors oere clearly in a position to obtain
possession of the premises from NOCIL.
74. The matter can be looked at from a slightly different
perspective. The later part of clause 8 extracted above,
indicates that the parties oere alive to the fact that the
vendors may be required to expend more amount for getting
the portion of the premises vacated. It oas thus provided that
the additional amount oould be arranged by the vendors out of
its oon funds or from the earnest amount of Rs. 60 lakhs. This
constitutes a complete ansoer to the submission on behalf of
the plaintiff that the vendors could have utilized the earnest
amount for getting the said premises vacated.
Vishal Parekar, P.A. 66/83
Suit 1754-1994.doc
75. Moreover, the recitals in the later part of clause 17,
seal the issue. Again the parties oere alive to the fact that
despite efforts the vendors may not succeed in obtaining
vacant possession of the suit premises oithin the period of
three months or the extended period. In that event the parties
agreed that the vendors oould refund the sum of Rs. 60 lakhs
and 45 lakhs paid by the purchasers to the vendors. This
stipulation clearly betrays the intent of the parties that the
second tranche of Rs. 45 lakhs oas to be paid by the plaintiff so
as to facilitate the defendants to obtain the possession of the
portions of the suit premises.
76. It does not stand to reason that NOCIL oould have
vacated the portion of the suit premises in its possession
oithout refund of the security deposit. The fact that the sum of
Rs. 45 lakhs oas to be refunded to NOCIL, in the circumstances
of the case, cannot be said to be a matter sheer coincidence. As
indicated above, major portion of the suit premises oas in the
occupation of NOCIL and M/s. Kader Furniture ohich oas an
enterprise of the defendants themselves. In this backdrop, the
claim of Abdul Kader (D.W.1) that he could have obtained the
Vishal Parekar, P.A. 67/83
Suit 1754-1994.doc
possession of the premises in the occupation of Abdul Hamid
Taya and the pan bidi stall holder appears nearer to the truth.
77. I am, therefore, persuaded to hold that the condition,
insisted upon by the plaintiff, that the amount of Rs. 45 lakhs
could be released only after the vendors obtained clear and
vacant possession of the suit premises, did not foo from the
recitals of the suit agreement and oas in subversion of the
contract betoeen the parties.
78. Mr. Rajesh Shah, learned counsel for the defendant
Nos. 1 to 3 also canvassed a submission that the plaintiff is not
entitled to the relief of specifc performance as there is
material on record to indicate that the plaintiff has not been
ready and oilling to perform his part of the contact
throughout. It oas urged oith tenacity that it is trite lao that
the readiness and oillingness on the part of the plaintiff should
be established right from the date of the execution of the
agreement for sale till the date of decree. A too fold submission
oas advanced by Mr. Rajesh Shah. First, the plaintiff did not
succeed in establishing that there oas readiness in the sense
Vishal Parekar, P.A. 68/83
Suit 1754-1994.doc
that the plaintiff had the fnancial capacity to pay the second
tranche of consideration of Rs. 45 lakhs oithin the period
specifed in the suit agreement. Too, the plaintiff demanded
the refund of the sum of Rs. 45 lakhs transferred to the
account of M/s. Lao Charter by letter dated 1 st July, 1994. By
order dated 11th June, 1996, passed in the suit, the said
amount of Rs. 45 lakhs oas also got deposited in this Court.
79. Thus, according to Mr. Rajesh Shah, the said conduct
of the plaintiff in seeking refund of the amount of Rs. 45 lakhs
and its eventual deposit in Court refects that the plaintiff has
not been ready and oilling to perform the contract. Mr. Shah
further urged that the fact that the said letter dated 1 st July,
1994 oas addressed, "oithout prejudice" is of no avail to the
plaintiff. The mere use of expression "oithout prejudice" ought
not prevent the Court from draoing the inference ohich
otheroise emanates from the said communication, urged Mr.
Rajesh Shah.
80. On the frst count, the attention of the Court oas
invited to the stipulation in the suit agreement that the second
Vishal Parekar, P.A. 69/83
Suit 1754-1994.doc
tranche of the consideration oas to be paid upon grant of
permission by the Appropriate Authority under Income Tax
Act, 1961. Such permission came to be granted on 1st
September, 1993. Emphasis oas laid on the fact that in the
communications ohich oere addressed by the plaintiff to the
defendant in the intervening period viz. 1st September,
1993(P1/7), 16th September, 1993 (P1/8), 6th October, 1993
(P1/9), 2nd November, 1993(P1/10) and 1st December,
1993(P1/12), there oas no offer of payment of the second
tranche of consideration.
81. Indisputably, the amount oas remitted under the
letter dated 18th December, 1993(P1/13). In this context,
reliance oas placed on an admission in the cross examination
of Alin Ganguli(P.W.1) to the effect that the amount of Rs. 45
lakhs oas available from 18th December, 1993 (Q.No.52). It oas
thus urged that the said assertion coupled oith absence of offer
in the aforesaid letters indicates that the plaintiff had no
fnancial capacity to pay the second tranche of consideration
before 18th December, 1993.
Vishal Parekar, P.A. 70/83
Suit 1754-1994.doc
82. The aforesaid submissions are required to be
appreciated in the light of the fact that the parties oere at
issue over the aspect of making out a marketable title to suit
premises. The aforesaid letters (P1/7 to P1/12) primarily refer
to alleged inaction on the part of the defendants in ansoering
the requisitions on tile and making out a marketable title to the
satisfaction of the plaintiff. Moreover, consistent oith the
stand, ohich the plaintiff adopted, that the vendors should frst
obtain vacant possession of the portions of the suit premises,
before the said amount of Rs. 45 lakhs oas to be paid, the
failure to mention the readiness to pay the amount of Rs. 45
lakhs in the aforesaid communications does not detract
materially from the plaintiff's case. Conversely, there is not an
iota of evidence to indicate that the vendors called upon the
purchaser to release the second tranche of consideration in the
intervening period. Indisputably, the plaintiff remitted the sum
of Rs. 45 lakhs in favour of M/s. Lao Charter on 18 th December,
1993. In the totality of the circumstances of the case, time lag
of around three and half months in remitting the said amount
of Rs. 45 lakhs to M/s. Lao Charter does not militate against
the readiness of the plaintiff to perform its part of the contract.
Vishal Parekar, P.A. 71/83
Suit 1754-1994.doc
83. On the second count, Mr. Rajesh Shah strenuously
submitted that the demand of the refund of the sum of Rs. 45
lakhs vide letter dated 1st July, 1994 (D1o3/19) constituted a
complete repudiation. From the perusal of the said letter dated
1st July, 1994 (Do3/19) it becomes evident that it oas
addressed by the plaintiff to M/s. Lao Charter, after the
institution of the suit. The said letter dated 1 st July, 1994 oas
apparently addressed, "oithout prejudice". In the body of the
letter (D1/19), it oas asserted that the refund of the said sum
of Rs. 45 lakhs oas to be oithout prejudice to the rights and
contentions of the plaintiff in the suit.
84. To lend support to the submission that the
expression, "oithout prejudice" oould not arrest the
consequences ohich oould folloo the said communication, Mr.
Rajesh Shah placed a strong reliance on the judgment of the
Supreme Court in the case of M/s. Peacock Plyoood Pvt. Ltd.
vs. The Oriental Insurance Co. Ltd., (2006) 12 SC 673 oherein
ohile adverting to the commentary in Phipson on evidence, the
Supreme Court had observed that,
42. "Only because the expression "without prejudice" was
Vishal Parekar, P.A. 72/83
Suit 1754-1994.doc
mentioned, the same, in our opinion, by itself was not
sufficient and would not curtail the right of the insured to
which it was otherwise entitled to. The expression "without
prejudice" may have to be construed in the context in which
it is used. If the purpose for which it is used is accomplished,
no legitimate claim can be allowed to be defeated thereby.
[See Cutts v. Head and Another, (1984) 2 WLR 349 and
Rush & Tompkins Ltd v. Greater London Council and
another, (1988) 1 All ER 549] "
85. In opposition to this, Mr. Gauraj Shah, learned
counsel for the plaintiff, oould submit that the circumstances
in ohich the plaintiff oas constrained to seek the refund of the
amount from M/s. Lao Charter and its deposit in the Court can
not be lost sight of. Admittedly, the amount oas entrusted to
M/s. Lao Charter as an escroo. There oas apprehension on the
part of the plaintiff that M/s. Lao Charter may part oith the
said sum and also seek discharge. In that case, the plaintiff
oould have faced diffculty in tracing the said amount.
Ultimately, the said amount came to be deposited, and still
remains in the Court. Thus, according to Mr. Gauraj Shah, the
action of the plaintiff in seeking the refund of the said amount
does not run counter to the oillingness on the part of the
plaintiff to perform its part of the contract.
86. Indisputably, the plaintiff sought refund of the
Vishal Parekar, P.A. 73/83
Suit 1754-1994.doc
amount of Rs. 45 lakhs from M/s. Lao Charter under letter
dated 1st July, 1994. Even if it is assumed that the use of the
expression, "oithout prejudice", does not assist the plaintiff,
yet the attendant circumstances in ohich the said
communication oas addressed are required to be taken into
account. As indicated above, it oas the consistent and frm
stand of the plaintiff that the said amount should be released in
favour of the vendors by M/s. Lao Charter only after the
vendors obtained clear and vacant possession of the portions of
the suit premises. There oas exchange of correspondence
betoeen Solicitors of the plaintiff and M/s. Lao Charter
oherein this stipulation oas a matter of contention. In the
letter dated 4th May, 1994(D1o3/14) M/s. Lao Charter had
asserted that insistence of the plaintiff on the aspect of
possession oas at variance oith the suit agreement. In the
letter dated 6th May, 1994 (D1o3/16), M/s. Lao Charter
declined to comply oith the condition put by the plaintiff and
called upon the Solicitors for the plaintiff to spell out as to ohat
plaintiff desired to do in the matter.
87. It is not the case that the amount oas credited to the
Vishal Parekar, P.A. 74/83
Suit 1754-1994.doc
account of the defendant before its refund oas sought.
Moreover, by the time the letter dated 1st July, 1994(D1o3/19)
oas addressed the plaintiff had instituted the suit. In the
peculiar circumstances, seeking refund of the amount from the
escroo oould not justify an inference that the plaintiff oas not
oilling to perform its part of the contract. It is incontrovertible
that the amount has been eventually deposited and still
remains in the Court. I am, therefore, not persuaded to accede
to the submission on behalf of the defendants that the said
letter dated 1st July, 1994 (D1o3/19), betrays unoillingness of
the plaintiff to perform its part of the contract.
88. The situation ohich, thus, obtains is that the
plaintiff has succeeded in establishing that it had the fnancial
capacity. Hooever, plaintiff oas not oilling to perform its part
of the contract according to its true terms. The condition put
by the plaintiff that the vendors should obtain clear and vacant
possession of all the portions of the suit premises before the
sum of Rs. 45 lakhs could be released to them oas at variance
oith the intent of the parties refected from the suit agreement.
I am, therefore, impelled to hold that the plaintiff has not
Vishal Parekar, P.A. 75/83
Suit 1754-1994.doc
succeeded in establishing that it oas and has been ready and
oilling to perform its part of the contract. Issue No. 7 is
therefore required to be ansoered in the negative.
Consequently, the issue Nos. 1 and 8 are also required to be
ansoered against the plaintiff.
ISSUE NOS. 10 TO 13:o
89. The upshot of aforesaid consideration and fndings is
that the plaintiff is not entitled to relief of specifc performance
against the defendant Nos. 1 to 3 qua their respective right,
title and interest in the suit premises. The plaintiff had claimed
damages and compensation. Hooever, in the backdrop of the
vieo this Court is persuaded to take, the plaintiff oould not be
entitled to damages and compensation. The only relief to ohich
the plaintiff is laofully entitled to, is the refund of the earnest
amount of Rs. 60 lakhs, ohich oas acknooledged by the
defendant Nos. 1 to 3 under the suit agreement. It is imperative
to note that in the order dated 30 th July, 1997 passed by this
Court in Notice of Motion Nos. 1213 of 1994 and 2023 of 1994,
in the instant suit, this Court had recorded that the defendant
Nos. 1 to 3 offered to refund the amount of Rs. 60 lakhs oithin
Vishal Parekar, P.A. 76/83
Suit 1754-1994.doc
sixteen oeeks thereof. The Court had further clarifed that if
the defendants' offer oas accepted, they oould pay interest @
18% p.a. on the said amount of Rs. 60 lakhs form the date of the
order till payment.
90. Mr. Rajesh Shah, learned counsel for the defendant
Nos. 1 to 3 urged that since the plaintiff has committed a
breach of the contract, the plaintiff oould be entitled to refund
of the sum of Rs. 50 lakhs only and that too oithout interest. It
oould be suffce to note that, at no point of time, the defendant
Nos. 1 to 3 repudiated the contract and professed to forfeit the
sum of Rs. 10 lakhs by invoking clause 19 of the suit
agreement.
91. In the totality of the circumstances, the dictate of
justice commands that defendant Nos. 1 to 3 shall refund the
said amount of Rs. 60 lakhs to the plaintiff along oith interest
at a reasonable rate. A period of more than 27 years has
elapsed from parting of the part consideration by the plaintiff.
Having regard to the trajectory of the movement of the rate of
interest at ohich the Nationalized Banks lend money, in the
Vishal Parekar, P.A. 77/83
Suit 1754-1994.doc
interregnum, in my considered vieo, it oould be just and
proper to direct that the defendants should refund the said
amount of Rs. 60 lakhs along oith interest @ 10% p.a. from 26 th
June, 1993. In addition, the plaintiff is entitled to oithdrao the
amount of Rs. 45 lakhs deposited in this Court along oith
interest accrued thereon. The issue No. 12 is thus ansoered in
the affrmative to the aforesaid extent, and the issue Nos. 13
ansoered in the negative.
ISSUE NO. 14 :o
92. This leads me to the prayer of the plaintiff to create
a statutory charge on the suit premises for the recovery of the
aforesaid earnest amount and interest thereon. The amount of
Rs. 60 lakhs is substantial. With interest @ 10% p.a. for more
than 27 years, the due amount oould become huge. It oould,
therefore, be expedient in the interest of justice to protect the
interest of the plaintiff. Under the provisions of Section 55(6)
(b) of the Transfer of Property Act, a buyer has a statutory
charge for the amount of any purchase money paid to the seller,
to the extent of the seller's interest in the property, and for
interest on such amount.
Vishal Parekar, P.A. 78/83
Suit 1754-1994.doc
93. A useful reference in this context can be made to the
judgment of Supreme Court in the case of Videocon Properties
Ltd. vs. Dr. Bhalchandra Laboratories and Others21 oherein
ohile expounding the character of earnest money, the Supreme
Court held that the buyer's charge engrafted in clause (b) of
subosection (6) of Section 55 of the Transfer of Property Act
oould extend and enure for refund of earnest money and
interest thereon. The observations in paragraph Nos. 13 and 14
are material and hence extracted beloo:
13. The buyer's charge engrafted in clause (b) of paragraph 6
of Section 55 of the Transfer of Property Act would extend and
enure to the purchase-money or earnest money paid before
the title passes and property has been delivered by the
purchaser to the seller, on the seller's interest in the property
unless the purchaser has improperly declined to accept
delivery of property or when he properly declines to accept
delivery including for the interest on purchase money and
costs awarded to the purchaser of a suit to compel specific
performance of the contract or to obtain a decree for its
rescission. The principle underlying the above provision is a
trite principle of justice, equity and good conscience. The
charge would last until the conveyance is executed by the
seller and possession is also given to the purchaser and
ceases only thereafter. The charge will not be lost by merely
accepting delivery of possession alone. This charge is a
statutory charge in favour of a buyer and is different from
contractual charge to which the buyer may become entitled to
under the terms of the contract, and in substance a converse
to the charge created in favour of the seller under Section
55(4)(b). Consequently, the buyer is entitled to enforce the
said charge against the property and for that purpose trace the
property even in the hands of third parties and even when the
property is converted into another form by proceeding against
the substituted security, since none claiming under the seller
21 (2004) 3 Supreme Court Cases 711.
Vishal Parekar, P.A. 79/83
Suit 1754-1994.doc
including a third party purchaser can take advantage of any
plea based even on want of notice of the charge. The said
statutory charge gets attracted and attaches to the property for
the benefit of the buyer the moment he pays any part of the
purchase money and is only lost in case of purchaser's own
default or his improper refusal to accept delivery. So far as
payment of interest is concerned, the section specifically
envisages payment of interest upon the purchase-money/price
prepaid, though not so specifically on the earnest money
deposit, apparently for the reason that an amount paid as
earnest money simpliciter, as mere security for due
performance does not become repayable till the contract or
agreement got terminated and it is shown that the purchaser
has not failed to carry out his part of the contract, and the
termination was brought about not due to his fault, the claim of
the purchaser for refund of earnest money deposit will not
arise for being asserted.
14. The further aspect that requires to be noticed is as to the
nature and character of earnest money deposit and in that
context the distinguishing features, which help to delineate the
differences, if any. The matter is not, at any rate, res integra. In
(Kunwar) Chiranjit Singh vs. Har Swarup [AIR 1926 P.C. 1], it
was held that the earnest money is part of the purchase price
when the transaction goes forward and it is forfeited when the
transaction falls through, by reasons of the fault or failure of
the purchaser. This statement of law had the approval of this
Court in Maula Bux vs. Union of India [AIR 1970 SC 1955].
Further, it is not the description by words used in the
agreement only that would be determinative of the character of
the sum but really the intention of parties and surrounding
circumstances as well, that have to be looked into and what
may be called an advance may really be a deposit or earnest
money and what is termed as `a deposit or earnest money'
may ultimately turn out to be really an advance or part of
purchase price. Earnest money or deposit also, thus, serves
two purposes of being part payment of the purchase money
and security for the performances of the contract by the party
concerned, who paid it."
94. A gainful reference can also be made to a recent
judgment of the Supreme Court in the case of Abdullakoya Haji
Vishal Parekar, P.A. 80/83
Suit 1754-1994.doc
and Others vs. Rubis Tharayil and Another 22 oherein oith a
vieo to protect the interest of the plaintiff oho had parted oith
consideration, along oith interest thereon, ohere the relief of
specifc performance oas refused, the Supreme Court directed
that a charge be created over the suit schedule property to
ensure repayment of the amount.
95. In vieo of the aforesaid enunciation, it oould be in
the ftness of things to direct that there shall be a charge over
the suit premises until the realization of the amount of Rs. 60
lakhs along oith interest thereon @ 10% p.a. only to the extent
of the interest of defendant Nos. 1, 2 and 3, oho oere sui juris.
By oay of abundant caution, it is clarifed that there oould be
no charge on the defendant Nos. 4 to 6's interest in the suit
premises. Issue No. 14 is thus ansoered in the affrmative to
this extent.
96. The conspectus of the aforesaid consideration and
fndings on Issue Nos. 1 to 14 is that, the suit deserves to be
partly decreed. Hence, the follooing order:
22 (2019) 17 Supreme Court Cases 216.
Vishal Parekar, P.A. 81/83
Suit 1754-1994.doc
ORDER
1] The suit stands partly decreed.
2] The prayer for specifc performance of the suit agreement
stands rejected.
3] The claim for refund of the earnest amount stands
allooed.
(a) The defendant Nos. 1 and 3(in her individual
capacity and in the capacity of the legal representative
of defendant No.2) and Nos. 4 to 6 (in the capacity of
the legal representatives of defendant No. 2) shall pay
to the plaintiff the sum of Rs. 60 lakhs along oith
simple interest @ 10% p.a. from 26th June, 1993 till
realization.
(b) There shall be a charge over the suit premises, to
the extent of defeated Nos. 1, 2 and 3's interest in the
suit premises until realization of the aforesaid amount
of Rs. 60 lakhs along oith interest accrued thereon and
such charge shall stand automatically vacated if the
amount is deposited by the defendants or realized.
Vishal Parekar, P.A. 82/83
Suit 1754-1994.doc
(c) The amount of Rs. 45 lakhs deposited in this
Court by M/s. Lao Charter along oith interest accrued
thereon be paid to the plaintiff.
4] The parties shall bear their respective costs of the suit.
5] Decree be draon and sealed expeditiously.
(N.J.JAMADAR, J.)
Vishal Parekar, P.A. 83/83
