Mrs. Nisha Raj And Anr. vs Mr. Pratap K. Kaula And Ors.
2007 Latest Caselaw 2463 Del

JUDGMENT

Sanjay Kishan Kaul, J.

Page 0079

1. The plaintiffs 'the purchasers' have filed the present suit for specific performance of Agreement to sell dated 30-09-1986 (Ex. PW1/2 ) of the property situated at A-2, Pamposh Enclave, New Delhi admeasuring 698.60 sq. yds (hereinafter referred to as the said property). The defendant Nos. 1-4 in the present case are the legal heirs of Smt. Vijay Malini Kaula, the seller, of the said property.

2. A perpetual sub-lease (Ex. P1), duly registered, dated 05-02-1973 was executed in favor of the said seller by the President of India as the Lesser and the Kashmir Cooperative House Building society Ltd. as the lessee for a consideration of Rs. 13,105 towards development charges.

3. The said seller constructed a residential house with a covered area of 3723.08 sq. ft. at the cost of Rs. 2,48,000 on the said property (being a residential plot of land) for which an occupancy certificate was issued by the DDA on 29-12-1984. Later the seller decided to permanently settle in Nilgiris, Tamil Nadu and therefore appointed one Col. Janki Raina as her attorney by way of a Special Power of Attorney dated 13-12-1979 (Ex. PW1/1). On 01-03-1985, the said property was let out to M/s Tin Plate Company of India Ltd. for a period of three years.

4. It is stated that later, the aforesaid attorney of the seller expressed his inability to look after and manage the property on account of his old age. Hence, the seller decided to sell the said property to the plaintiffs vide Agreement to sell dated 30-09-1986 (Ex. PW1/2) for a consideration of Rs. 29 lacs. Accordingly, the plaintiffs paid a sum of Rs. 10,000 to the seller by way of advance vide Cheque No. 389984 dated 30-09-1986 in pursuance to the said Agreement to Sell (Ex. PW1/2). At that time the said property was under the occupancy of the aforesaid tenant.

Page 0080

5. An application was made under Section 230(A) of the Income Tax Act (hereinafter referred to as the said Act) to seek permission to sell the said property in favor of the Plaintiffs which was duly obtained by the seller on 30-10-1986 (Ex. PW1/4). In compliance with the provisions of Section 269UC of the said Act, the plaintiffs along with the seller filed the prescribed Form No. 37(I).

6. By an Order dated 26-12-1986 (Ex. PW 1/5), the Appropriate Authority exercised its pre-emptive right to purchase the said property for an apparent consideration of Rs. 29 lacs as disclosed in the said Agreement to Sell on behalf of the Central Government. Pursuant to the same, the possession was handed over to the Appropriate Authorities in January 1987 by the seller under protest. Accordingly, the Income Tax Authorities made a payment of Rs. 17,64,651/- vide a cheque dated 27-01-1987 enclosed with a letter (Ex. PW 1/9) to the said seller and also informed the seller that a sum of Rs. 11,35,349/- had been paid to the DDA towards their claim for unearned increase.

7. Subsequently, two writs being C.W. No. 225/1987 and C.W. No. 421/1987 were filed by the plaintiffs i.e. one on behalf of the seller and the other on behalf of the plaintiffs challenging the said pre-emptive purchase by the Appropriate Authority. For the said purpose, the plaintiffs approached the seller to sign certain papers and the seller at the request of the plaintiffs signed a blank vakalatnama (Ex. PW 1/13) and blank papers (Ex. PW 1/7) and sent the same to the plaintiffs.

8. The said two writs were allowed on 18-01-1994 with the observations that the Appropriate Authority may decide the matter afresh, complying with the directions laid down by the Apex Court in the case of C.B. Gautam v. UOI . Accordingly, objections before the Appropriate Authority were filed by the plaintiffs. All costs including the professional fees before the appropriate authorities were also borne by the plaintiffs. In compliance with the Orders of the Court, the Appropriate Authority reconsidered the matter and issued a 'No Objection Certificate' on 29-04-1994 (Ex. PW 1/14).

9. The plaintiffs state that since the seller was already in receipt of the entire sale consideration amount by the Income Tax Authorities, the plaintiffs offered to pay the said amount to the Tax Authorities and requested the possession of the said property to be handed over to the plaintiffs vide a letter dated 06-05-1994. However, the plaintiffs did not receive any reply to the same.

10. It is further stated that since then the plaintiffs had made a number of visits to the office of the Concerned Income Tax Authorities offering the payment of the said amount and requesting the possession of the said property thereto but to no avail.

11. It is stated that in consequence to the refusal of the Tax Authorities to hand over possession to the said plaintiffs, the plaintiffs filed C.W.P. No. 3314/1994.

Page 0081

12. In the meantime, the said seller passed away leaving behind her legal heirs (defendant Nos. 1-4 in the present case). It is the case of the plaintiffs that there was no dispute between the plaintiffs and the said seller as to the completion of the sale in favor of the plaintiffs in terms of the said Agreement to sell and that the present dispute is a creation of the defendant Nos. 1-4 as also recorded by this Court vide Order dated 10-11-1994 in C.W.P. No. 3314/1994.

13. It is stated that on 10-11-1994, during the hearing of the said writ, defendants Nos. 1-4 opposed to the plaintiffs' request to hand over possession of the said property to the plaintiffs and instead offered the payment of Rs. 29 lacs to the Tax Authorities vide Cash Order No. 550928 dated 09-11-1994(Ex. PW 1/17). Subsequently, this Court dismissed the writ ordering that the possession of the said property be delivered to defendants/owners leaving the question of interest to be decided between the owners/defendants and the Tax Authorities. Defendant Nos. 1-4 paid a total amount of Rs. 44.18 lacs to the Department and got back the possession

14. Defendant Nos. 1-4 entered into an alleged Agreement to sell with defendant No. 6 for a total sale consideration of Rs. 1.92 crores and also leased out the said property to defendant No. 7 on a monthly rent of Rs. 15,000/- (which is Rs. 20,000/- at present). It is stated that out of Rs. 1.92 crores, defendant No. 6 has paid an advance of Rs. 19.20 lacs i.e. 10% of the sale price to defendant Nos. 1-4. It is further stated that defendant No. 8 is a front company of defendant No. 7 who directly and indirectly owns and controls the said property. It is the case of the plaintiffs that the aforesaid transactions were created with a mala fide intention of defeating the plaintiffs' claims in the present suit with the object of preventing this Court from enforcing the said Agreement to sell dated 30-09-1986.

15. It is further stated that defendant Nos. 6-8 had full knowledge and notice of the plaintiffs' rights under the said Agreement to sell and of the present suit being filed even prior to the creation of the alleged Agreement to sell and the Lease Deed. It is stated that defendant No. 7 was personally present and supervising the proceedings of the writ petition being C.W.P. No. 3314/1994, filed by the plaintiffs.

16. It is averred by the plaintiffs that they had always been ready and willing to perform their part of the said Agreement to sell dated 30-09-1986 and enforce the same and it is defendant Nos. 1-4 who have been acting otherwise. The plaintiffs state that a sum of Rs. 5,35,349/- was also offered to the said defendants vide letter dated 28-10-1994 (Ex. PW 1/18) on account of the excess money demanded by DDA and also state that the plaintiffs are still ready and willing to abide by the terms of the said letter.

17. The stand of defendant Nos. 1-4 in the written statement is that the Agreement to sell dated 30-09-1986 stands frustrated and is null and void. It is the case of the defendants that the said agreement was rendered invalid and unenforceable upon the passing of the order dated, Page 0082 26-12-1986 of purchase of the property in question by the Appropriate Authority.

18. It is averred that the said agreement is also in violation of the terms and conditions of the perpetual sub-lease dated 05-02-1973. Since the plaintiffs are not members of the Kashmir Cooperative House Building Society Ltd., the said property could not have been sold to the plaintiffs by the seller.

19. It is further stated that the said agreement in any event had to be performed expeditiously as per Clause 7.1 and 8 of the said Agreement and in the present case the no objection certificate was issued by the Appropriate Authority almost after an expiry of 8 years, hence the agreement stands frustrated and incapable of performance.

20. The defendants state that the plaintiffs misrepresented the facts to the seller to obtain her signatures on blank papers by informing her that the proceedings before the Appropriate Authority would be concluded within a year's time where as the said writ petitions were disposed of in the year 1994. It is also stated that the seller was never appraised about the progress or otherwise of the proceedings.

21. It is averred that the plaintiffs were never ready and willing to perform the said agreement and never offered to pay any amount towards the consideration.

22. It is stated that the suit is barred by limitation and is liable to be dismissed.

23. The defendants have admitted that the said property has been let out at present and that an Agreement to sell was also executed between defendant Nos. 1-4 and defendant No. 6. Thus, admitting that third party rights have been created in the suit property. It is stated that the plaintiffs had paid only Rs. 10,000/- in 1986 whereas the defendants had to pay a sum in excess of Rs. 44.18 lacs to the Tax Authorities which is in excess of the consideration of Rs. 29 lacs.

24. The defendants have denied the fact that defendant Nos. 6, 7 and 8 were in full knowledge and notice of the plaintiffs' right in the suit property as alleged by the plaintiffs and state that it is only after the order dated 04-08- 1998 of this Court allowing the amendment of the plaint that such fact was brought to the notice of the said defendants.

25. The defendants state that defendant No. 7 is a director in defendant No. 8, having its own separate legal entity and deny that defendant No. 8 is a front company of defendant No. 7 who directly and indirectly owns and controls the said company. It is denied that the defendant Nos. 6-8 had advanced the sum of Rs. 44,18,000/- to defendant Nos. 1-4 for the purposes of depositing the same with the Tax Authorities to secure possession of the said property. It is stated that defendant No. 2 had taken a commercial loan from defendant No. 7 and the loan amount with interest was fully paid by 31-03-1999.

26. The defendants state that the plaintiffs have filed the present suit only for the reason that the price of the said property has risen significantly Page 0083 over the period of time. Thus, the defendants' case is that the plaintiffs' suit for specific performance is not maintainable and that in the facts and the circumstances of the case the plaintiffs are not entitled to specific performance.

27. On the basis of the pleadings of the parties, the following issues were framed on 13-11-1995 and 06-09-2002:

1. Whether the suit is within time? OPP

2. Whether the suit is not maintainable on the plea of the defendant that the agreement to sell dated 30-09-1986 had been frustrated, rendered invalid and null and void upon passing of the order dated 26-12-1986 Under Section 269UD(1) of the I.T.A.? OPD

3. Whether the agreement to sell dated 30-09-1986 is valid and enforceable in view of subsequent 'No Objection Certificate' dated 26-04-1984 granted by the Appropriate Authority Under Section 269UD of the Income Tax Act? OPP

4. Whether the agreement to sell dated 30-09-1986 is illegal, invalid and unenforceable as being contrary to the terms of the sub-lease as pleaded in para-6 of the preliminary objection of the written statement? OPD

5. Whether the agreement dated 30-09-1986 is unjust, inequitable and therefore unenforceable? OPD

6. Whether the plaintiffs were ready and willing to perform the agreement dated 30-09-1986 even after the grant of 'No Objection Certificate' dated 29-04-1994? OPP

Additional Issue No. 1: Whether plaintiffs are guilty of misrepresentation and fraud upon the mother of defendant Nos. 1-4 as alleged?

Additional Issue No. 2: Whether defendant No. 6 is a bonafide purchaser for valuable consideration without notice of the suit property? If so, its effect?

Additional Issue No. 3: Whether defendant No. 8 was validly inducted as tenant in suit property?

7. Relief.

28. In support of its case, the plaintiff examined two witnesses, Shri Ranjit Raj (PW1), plaintiff No. 2 in the present case and Shri H.K. Singh, working as Vice President, Human Resource with Nestle India Limited. The defendants have examined three witnesses namely Shri Pavan Kaula (DW1), defendant No. 2, Shri R.N. Sahni (DW2), defendant No. 7, Shri Varinder Sahni (DW3), defendant No. 6 in the present case.

29. In the affidavit of evidence, the PW1 has affirmed the various averments made in the plaint and proved the documents Ex. PW1/1 to Ex. PW1/24 tendered in evidence. PW1 has stated that the seller and the plaintiffs were family friends and that the seller was keen to sell the said property as she had no interests in Delhi. It is also stated that the plaintiffs had informed the seller that the said property would be bought by the plaintiffs by taking a loan from his Company. Further, PW1 affirmed that the total consideration Page 0084 of Rs. 29 lacs as per the Agreement to sell was inclusive of DDA charges towards unearned increase payable to it under the Perpetual Lease. In his affidavit, PW1 has also stated that an offer to pay an advance of 10% of the sale consideration was made to the seller at the time of signing of the said Agreement but it was at the insistence of the seller that only a sum of Rs. 10,000/- was paid to the seller by the plaintiff.

30. PW1 has stated that due to the said property being a leasehold property, the plaintiffs was restricted from buying any other property for the reason that the DDA did not give permission of sale of a leasehold property to a person who already owns another residential property. It is also averred by the said witness that the seller agreed to sign the requisite papers to challenge the Order of the Tax Authorities only after repeated requests of the plaintiffs on the condition that the seller would not incur any expenses or have any responsibility in relation to the same. In relation to the same the seller also signed several sheets in blank and forwarded to the plaintiffs. It is further affirmed that the seller washed her hands off the property, and handed over the originals of various documents.

31. PW1 in his affidavit has also affirmed that the plaintiffs kept the seller fully informed of the developments in the case proceedings from time to time. On reversal of the Order dated 26-12-1986 by the Appropriate Authority, the plaintiffs were eager to meet the seller to get the Sale Deed and other documents signed by the seller but was unable to meet the seller on account of her illness.

32. It is averred by the PW1 that the plaintiff was deprived of a minimum of Rs. 50,000/- per month during the period 01-04-1992 to 31-03-1995 and Rs. 58,000/- per month during the period 01-04-1995 to 31-07-1996 on account of monthly rent.

33. In his cross-examination, PW1 stated that there was no correspondence with the seller of the plaintiffs from beginning of 1994 to end of June 1994. On being asked about the dissatisfaction of the amount received by the seller from the Appropriate Authority, the plaintiffs stated that the seller felt that the amount handed over to her by the said authorities was less by around Rs. 5 lacs. PW1 also stated that the said Agreement to sell with the seller was done on the basis of mutual trust and agreement. It is stated that the plaintiffs were advised by Defendant No. 6 that the property was worth Rs. 2 crores and that the plaintiffs should prepare themselves to pay such amount in respect of the said property. On being confronted with the question of having ever served a legal notice to the seller or the defendants, the plaintiffs answered in the negative but at the same time stated that he had sent a letter dated 28-10-1994 (Ex. PW1/18) to the husband of the seller.

34. PW 2 in his affidavit has stated that he was responsible for implementing schemes for the benefit of the Company's employees including Housing Loan Scheme as part of his job responsibilities. He also affirmed to the fact that after the loan was sanctioned to the plaintiff No. 2, he did not take the disbursement of the same immediately on account of disputes having arisen with respect to the said property. Also, that it was on Page 0085 09-11-1994 that the plaintiff No. 2 requested the Company to arrange from its Bankers Punjab National Bank, a Pay Order for Rs. 29 lacs bearing No. 550928 dated 09-11-1994 drawn on Chief Commissioner of Income Tax. It is further stated by PW 2 that plaintiff No. 2 had a credit of Rs. 30,40,207/- in his Provident Fund Trust account as per the records of the Company as on 01-09-2003 and that the said plaintiff continues to be entitled to avail of a loan of Rs. 29 lacs from the Company for the purchase of the house.

35. In the cross-examination of PW 2, he stated that in the year 1986, plaintiff No. 2 was entitled to Rs. 28.1 lacs towards housing loan. He also brought forward the fact that the note of the Managing Director dated 04-11-1986 provided that the loan to plaintiff No. 2 was approved. He stated that since the draft dated 09-11-1994 was not utilized, it was returned to the Company and cancelled on 10-11-1994. PW 2 further affirmed that as on today the amount of Rs. 29 lacs towards housing loan was not available to the plaintiffs since the plaintiff No. 2 had retired in November 2004

36. On the other hand, DW1 stated that possession was handed over to the Tax Authorities in pursuance of the Order dated 26-12-1986 by the tenant (Tin Plate Company) of the said property. It is further stated that the plaintiffs chose not to give any particulars of their bank account as they did not have any funds in their bank account and were not in a position to pay the said sale consideration of Rs. 29 lacs. According to the DW1, no loan was applied for or sanctioned to the plaintiffs.

37. It is averred that the plaintiffs were close relatives of the seller and that there was an act of abuse of trust on the part of the plaintiffs as the seller was residing at Chennai and was not aware of the market value of the said property.

38. DW1 has also stated in his affidavit that the seller felt hurt with the attitude of the plaintiffs who did not pay or offer to pay any amount till such time when the seller was alive, to get the property restored from the Tax Department, knowing fully well that the defendants were out of pocket and were not in a position to pay the amount of Rs. 44.18 lacs. It was in these circumstances that financial assistance was taken from defendant No. 6.

39. It is also submitted that Rs. 24, 13, 360/- has been paid by defendant No. 7 from December, 1994 to 30th April, 2006. Defendant No. 6 has deposited a sum of Rs. 45, 000/- by way of security and has already paid Rs. 19.20 lacs towards sale price in terms of the Agreement to sell dated 30-12-1994.

40. In the cross-examination, DW1 has stated that his affidavit tendered in chief examination was not prepared by him. Later, DW1 has stated that he had dictated his affidavit taking the assistance of his lawyer and defendant No. 1. It is stated that DW1 was not consulted as to the sale of property in question.

41. On the question of the Tax Authorities issuing a No Objection Certificate on 29-04-1994, DW1 stated that the same came to his knowledge only after he read the Will of his mother though the Will did not refer to such Order of the Tax Authorities. Further in the cross-examination it has also Page 0086 been pointed out by DW1 that the Will did not contain any reference to the said suit property.

42. It is also stated that the said Agreement to sell between the plaintiffs and the seller was executed only after the seller had consulted her father and her husband (defendant No. 1 in the present suit) and that the seller had the benefit of independent advice which is contrary to what was deposed in the affidavit.

43. It is averred that there was a correspondence between the seller and the father of the seller in relation to the suit property which was never referred to in the written statement or the affidavit. DW1 also specified that he was not aware of the writ petition being WP No. 3314/1994 which is contrary to his affidavit and pleadings.

44. It is further stated that DW1 appointed defendant No. 6 as his attorney in relation to the proceedings pending in the court and also informed him about the plaintiffs claim in the suit property. DW1 stated that the court proceedings in WP No. 3314/1994 were attended by defendant No. 6, defendant No. 1 and himself. Whereas the plea of defendant No. 6-8 is that they are bona fide purchasers and were not aware of any proceedings being filed by the plaintiffs.

45. It is averred that the said Agreement to sell between the plaintiffs and the seller was never cancelled.

46. On the question of being aware of the pendency of the said suit at the time of signing the lease deed and agreement to sell, DW1 stated that he was aware and that he did take legal assistance regarding the finalization of the said two documents.

47. In the cross-examination, DW1 stated that the amount paid to income tax authorities to get the possession of the said property was forwarded to defendant Nos. 1-4 by defendant Nos. 6-8 and that such amount was not received on commercial terms i.e. on payment of interest while in the written statement, the stand taken by the defendants is that a loan on commercial terms was advanced to defendant Nos. 1-4 by defendant Nos. 6-8.

48. It is also stated that the defendant Nos. 1-4 were aware of the meetings and discussions held between defendant No. 6 and the plaintiffs in 1994 during the pendency of the writ petition No. 3314/1994.

49. DW1 in his cross has averred that he never notified the plaintiffs to pay Rs. 44 lacs demanded by the Income Tax Authorities for handing back the possession of the suit property.

50. DW2 (defendant No. 7) in his affidavit has stated that defendant Nos. 6-8 have adopted the pleas taken by defendant Nos. 1-4. He states that transactions of agreeing to purchase the said property and of tenancy were bonafide and executed in good faith, believing that defendant Nos. 1-4 were the lawful owners of the said property and were entitled to pass a marketable title in favor of defendant No. 6.

51. It has also been stated by DW2 that he was fully aware of the said Agreement to sell between the plaintiffs and the seller and the proceedings Page 0087 relating to the present matter which is contrary to the pleadings. He also admitted that he was appointed as the attorney on behalf of the heirs of the seller.

52. DW2 averred that in the year September, 1986, the said suit property was in possession of the tenant and that the vacant possession of such property was available in November, 1994 which was sought to be recovered by the plaintiffs for a sale consideration of Rs. 29 lacs.

53. It is further stated that defendant Nos. 1-4 were not in a position to pay a sum of Rs. 44.18 lacs to the Income Tax Authorities and that it was in these circumstances that defendant No. 6 advanced a substantial amount of money vide Agreement to sell with defendant No. 6 and the rent agreement with defendant No. 7.

54. It is stated that after December, 1994, defendant No. 7 had paid an amount of Rs. 24,33,284/- by way of rent, defendant No. 6 had paid a sum of Rs. 45,000/- by way of security and Rs. 19.20 lacs towards sale price in terms of the Agreement to sell to defendant Nos. 1-4.

55. During the cross-examination of DW2, he stated that he was the director in defendant No. 8 Company in the year 1986 and that all the contracts which were signed by the said Company were approved by the Board of Directors. In case of the lease Agreement, no lawyer's assistance was taken. He admitted that his affidavit was identical to that of Shri Pavan Kaula and that he had taken some of the relevant things from his affidavit.

56. DW2 also averred that he was present when the resolution was passed for entering into the said lease Agreement with defendant Nos. 1-4, but he did not inform the Board about him being the attorney of defendant Nos. 1-4 in relation to the suit property.

57. The affidavit of evidence of DW3 provides that defendant No. 6 was a bona fide purchaser and was not aware of the plaintiffs' alleged rights in the said suit property or the alleged transaction between the plaintiffs and the seller and came to know about the same only when defendant No. 6 was served.

58. DW3 (defendant No. 6) states that it was brought to his notice that as per the Will of the seller, the said property was bequeathed in favor of defendant Nos. 1-4 in equal shares and that they were free to dispose of the property.

59. DW3 has averred that defendant No. 2 and he discussed the sale and purchase of the said property on 30-12-1994 for the first time and that within a couple of hours of discussion the Agreement to sell was signed. The witness's testimony also specifies that before entering into such Agreement to sell, the transaction was discussed by him with defendant No. 7 (his father) and that defendant No. 7 was present when he had a discussion with his Chartered Accountant about the drafting of such Agreement.

60. It was also averred that he became acquainted with the Lease deed which defendant No. 2 signed in favor of defendant No. 8 only one day prior to it being signed.

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61. It is stated that defendant No. 2 had informed him that the original title documents in relation to the suit property were lost.

62. On perusal of the pleadings, documents and the oral evidence the findings on the issues are as under:

Issue No. 1: Whether the suit is within time? OPP

63. The Agreement to sell between the plaintiffs and the seller was executed on 30-09-1986 and on the same day a sum of Rs. 10,000/- was paid to the seller towards the sale consideration of Rs. 29 lacs. The present suit was filed on 23- 11-1994. The period of limitation for filing a suit for specific performance is three years and it commences from the date on which the cause of action for filing the suit has arisen.

64. It is the case of the plaintiffs that the said Agreement to sell did not stipulate any time period within which such sale transaction was to be completed and that such Agreement was subject to the provisions of Chapter XXC of the Income Tax Act.

65. The defendants on the other hand have stated that the cause of action for filing the present suit arose on 30-09-1986 as admitted by the plaintiffs in para 31 of the amended plaint. Accordingly, the period of limitation expired on 20-09-1989 but the suit being filed eight years after the date on which cause of action arose, is barred by limitation.

66. Learned Counsels for the defendants have stated that as per Clauses 3.2, 7.1, 7.2 and 8 of the said Agreement, time was the essence of the contract. The said clauses read as under:

3.2 The possession of the property shall be handed over by the Seller to the Purchasers only on the execution and at the time of registration of the Deed of Sale.

7.1 The Seller shall arrange to expeditiously obtain the necessary income tax clearance certificate under Section 230A of the Income Tax Act as also necessary permission from the Delhi Development Authority in terms of Clause 6 of the Perpetual Sub Lease for putting the said property to sale.

7.2 The Purchasers shall assist the seller to obtain the necessary permission from the DDA in terms of Clause 6(3) of the Perpetual Sub Lease.

8. Within 30 (thirty) days of the Purchasers making payment of the amount of the unearned increase demanded by the DDA as aforesaid in paragraph 3.1(i) above, the Seller shall execute and submit for registration the Deed of Sale and thereby transfer and convey the said property together with all the Seller's rights, titles and interests therein in favor of the Purchasers and/or their nominees.

67. In my considered view, the above-said clauses do not reflect anything as to the time frame being set out to complete the said transaction except to the extent that it had to be executed expeditiously.

68. In the present case, the agreement between the seller and the plaintiffs was executed on 30.12.1986. The order under Section 269UC of Page 0089 the Income Tax Act was passed by the appropriate authority on 26.12.1986 and on 27.1.1987 payment was tendered to the seller. In January and February 1987, the two writ petitions were filed challenging the said order of the appropriate authority which came to be allowed only on 18.1.1994, when the order of the appropriate authority was set aside and a direction was issued to examine the matter afresh. The agreement between the parties, on account of the action by the appropriate authority under the statutory provisions of the Income Tax Act thus put the operation of the agreement in abeyance. It cannot be said that the agreement became null and void for the reasons that the performance of the agreement was subject to the approval of the appropriate authority and on the appropriate authority exercising the rights of pre-emptive purchase, the appropriate authority stepped into the shoes of the plaintiffs. However this decision was challenged in the judicial proceedings both by the plaintiffs and the seller and thus the enforceability of the agreement remained in abeyance with none of the parties Realizing from the same. The agreement again became alive on 18.1.1994 when the challenge to the order of the appropriate authority succeeded. Thereafter afresh proceedings started before the appropriate authority and the order was passed only on 29.11.1994 whereby the appropriate authority took a decision not to exercise right of pre-emptive purchase.

69. The seller even till that stage did not refute the agreement and since possession was not being delivered to the plaintiffs as attorney of the seller, civil writ petition No. 3314/1994 was filed by the plaintiffs seeking possession of the Income Tax Authorities. It is only on 10.11.1994 that for the first time the legal representatives of the seller took a stand in the Court that they were objecting to the possession being handed over to the plaintiffs as they wanted to take possession on refund of the amount to the appropriate authority. The suit was filed on 23.11.1994 by the plaintiffs.

70. Thus, from the terms and tenor of the said agreement, it is crystal clear that both the parties had proposed and intended to sell and purchase the suit property subject to the compliance and materialization of the conditions under the Income Tax Act. The facts of the present case reveal that to get the preemptive purchase order dated 26-12-1986 passed by the Appropriate Authority set aside by this Court, the plaintiffs had filed the said two writs petitions and were even successful in getting such order quashed. The plaintiffs accordingly also obtained the NOC dated 29-04-1994 from the Appropriate Authority. Till the time the seller was alive, such agreement to sell was never cancelled and there was consensus between the parties so as to enforce the said Agreement. Admittedly, the plaintiffs had filed a writ petition to secure the possession of the said property after having obtained the NOC. It is during the proceedings of this writ that for the first time a dispute was raised with respect to the implementation of the said agreement by the heirs (defendant Nos. 1-4) of the seller. Before this, there does not seem to be a reason for the plaintiffs to have filed a suit for specific performance.

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71. At this point, the two maxims of equity, namely, actus curiae neminem gravabit - an act of court shall prejudice no man, and the other, lex non cogit ad impossibilia - the law does not compel a man to do what he cannot possibly perform come to the aid of the plaintiff. The plaintiffs and the seller right from the time the pre-emptive order for purchase of the said property was passed were engaged in getting the said order quashed by this Court. Till the time the seller was alive, there was no disagreement between the parties. The question of filing a suit for specific performance does not arise for the reason that as per the provisions of the Income Tax Act, the intended purchaser is disentitled to raise any claims against the transferor (intended seller). As per Section 269UM of the said Act, when order for purchase of any immovable property by the Central Government is made, transferor is indemnified from any claim that the transferee may have against him under the agreement for transfer. In so far as the passage of time of more than 8 years is concerned, it may be noted that the law itself and its administration is understood to disclaim as it does in its general aphorisms, all intention of compelling impossibilities, and the administration of law adopts that general exception in the consideration of particular cases.

72. In order to appreciate the aforesaid aspects and its two legal conspectuses the provisions of Article 54 of the Limitation Act are being reproduced hereinunder:

 Article  Description of Suit        Period of limitation   Time from which period
                                                                begins to run.
54.     For specific performance      Three Years          The date fixed for the perfor-
        of a contract.                                     mance, or, if no such date is
                                                           fixed, when the plaintiff  has
                                                           notice  that   performance  is
                                                           refused.
 

73. A reading of the aforesaid provision shows that the refusal of the performance is the relevant date which only occurred on 10.11.1994 and the suit was filed immediately thereafter on 23.11.1994. The seller during her life time as stated above never refuted the agreement nor was the agreement ever terminated. On the other hand the seller did everything to support the agreement by authorising the plaintiffs to take necessary actions for the plaintiffs to realise the benefits under the agreement to sell. The seller had obtained the no-due certificate in Form 34A under Section 230A under the Income Tax Act but for the order of the appropriate authority the transaction would have gone through between the parties.

74. The cause of action for filing the present suit arose only after defendant Nos. 1-4 raised a dispute as to handing over the possession to the plaintiffs during the writ proceedings before the court in 1994. Hence, the suit is not barred by limitation and has been filed well within time.

75. The aforesaid issue is decided accordingly.

Issue No. 2: Whether the suit is not maintainable on the plea of the defendant that the agreement to sell dated 30-09-1986 had Page 0091 been frustrated, rendered invalid and null and void upon passing of the order dated 26-12-1986 Under Section 269UD(1) of the I.T.A.? OPD

Issue No. 3: Whether the agreement to sell dated 30-09-1986 is valid and enforceable in view of subsequent 'No Objection Certificate' dated 26-04-1984 granted by the Appropriate Authority Under Section 269UD of the Income Tax Act? OPP

76. Since Issue Nos. 2 and 3 are concerned with the effect of the Order passed by the Appropriate Authority dated 26-12-1986 under Section 269 UD of the Income Tax Act, they are taken up together. The seller and the plaintiffs entered into an Agreement to sell dated 30-09-1986 in respect of premises bearing No. A-2, Pamposh Enclave, New Delhi admeasuring 698.60 sq. yds. The total consideration was fixed at Rs. 29, 00,000. The plaintiffs paid a sum of Rs 10,000 vide Cheque No. 389984 dated 30-09-1986 and the balance consideration was agreed to be paid at the time of registration of sale deed. The said parties to the Agreement were required to comply with the provisions of Chapter XX-C of the Income Tax Act, 1961 read with Rule 48-L of the Income Tax Rules, 1962 (in short 'the Rules') to file a statement in Form 37-I before the Appropriate Authority specified under Chapter XX-C. Accordingly, the seller and the plaintiffs filed Form 37-I along with certain documents. Thereafter, the Appropriate Authority passed an order dated 26-12-1986 purported to be under Section 269UD(1) of the Act, for preemptive purchase of the said property by the Central Government at an amount equal to the apparent consideration i.e. Rs. 29 lacs. The said order dated 26- 12-1986 was challenged before this Court in two separate Writ Petition Nos. 225- 421 of 1987 by the seller and the plaintiffs to quash the said order dated 26- 12-1986. In the meantime, the possession was handed over to the Appropriate Authorities by the seller on a payment of Rs. 17,64,651/- vide a cheque dated 27-01-1987 by the Appropriate Authorities to the seller and a sum of Rs. 11,35,349/- to the DDA towards their claim for unearned increase.

77. This Court allowed the said two writs on 18-01-1994 with the observations that the Appropriate Authority may decide the matter afresh, complying with the directions laid down by the Apex Court in the case of C.B. Gautam v. UOI . Accordingly, objections before the Appropriate Authority were filed by the plaintiffs. All costs including the professional fees before the appropriate authorities were also borne by the plaintiffs.

78. In compliance with the Orders of the Court, the Appropriate Authority reconsidered the matter and issued a 'No Objection Certificate' on 29-04-1994.

79. The Learned senior counsel for the plaintiffs stated that the said agreement was duly enforceable on issuance of the NOCs i.e. the NOC Page 0092 from the Appropriate Authority dated 29-04-1994 (Ex. PW 1/14) and Income Tax Clearance Certificate under Section 230A of the Income Tax Act dated 30-10-1986 (Ex. PW 1/4) were obtained from the Appropriate Authority.

80. It is averred that the Government's pre-emptive right to purchase the suit property being the mandatory statutory provisions have to be read into the said agreement. It is stated that the said agreement is not a contingent contract and even if it is considered to be a contingent contract, then the contingency was satisfied upon the receipt of the NOC from the Appropriate Authority.

81. It is the case of the plaintiffs that on passing of such order dated 26-12- 1986 by the Appropriate Authority, the agreement was performed and acted upon so much so that the seller was divested of the title and the government stepped into the shoes of the purchasers (the plaintiffs in the present case) and paid the consideration to the seller in terms of the said Agreement. The plaintiffs were divested of their rights against the seller pursuant to this order but these rights stood reinstated on passing of the order dated 18-01-1994 by this Court in the Writ petitions whereby the order dated 26-12-1986 stood quashed and with the NOC being issued to the parties dated 29-04-1994, the said agreement became legally enforceable in 1994.

82. It is further stated that even after such order dated 26-12-1986 was passed, both the parties sought to enforce their contractual obligations between themselves by challenging such order by way of writ petitions and filing applications before the Appropriate Authority for the issue of the NOC. Their actions and conduct do not give an impression of treating the said agreement to have come to an end.

83. It has been brought forth by the learned senior counsel for the plaintiffs that the performance of such agreement thus cannot be considered to have frustrated though the buyer's (plaintiffs') claims against the seller were suspended for the period such order dated 26-12-1986 was in operation.

84. Learned Counsels for the defendants on the other hand state that the said Agreement to sell stood frustrated and incapable of being performed on 26-12-1986 on passing of the pre-emptive purchase order by the Appropriate Authority. It is stated that the said Agreement could not be enforced on account of the fact that on the date of the said Agreement, the suit property was under tenancy which was protected under the Delhi Rent Control Act and that there has been an astronomical rise in prices of the property from 1986 to 1994. The defendants also stated that since there has been a passage of time of more than 8 years and that the plaintiffs had made an advance of a meager sum of Rs. 10,000/- only (which is only 0.3 % of the total sale consideration) with no further offer to pay or to perform the terms of the Agreement, the said agreement cannot be enforced and is invalid.

85. In order to arrive at a finding, it is important to review the statutory provisions of the said Act. Chapter XX-C consisting of Sections 269U to Page 0093 269UO was inserted in the Act by the Finance Act, 1986 with effect from 1-10-1986. This was to curb the menace of black money. The basic scheme of Chapter XX-C is that the immovable property can be acquired by the Central Government if the apparent consideration as agreed to between the transferor and the transferee under agreement to sell does not represent the true market value of the property. The provisions spread a wide net by expanding the definition of immovable property and the transfer of such property. They envisage transfer of immovable property yet to be constructed. "Agreement for transfer" is defined in Clause (a) of Section 269UA, "immovable property" in Clause (d) and "transfer" in Clause (f) thereof. For the performance of provisions under Chapter XX-C, an Appropriate Authority is constituted under Section 269UB. Section 269UC provides for restrictions on transfer of immovable property. Under Rule 48L Form 37-I is prescribed which is to be filed before the Appropriate Authority signed by both the transferor and the transferee within 15 days from the date on which the agreement for transfer is entered into. Section 269UD deals with the order by Appropriate Authority for purchase by the Central Government of immovable property subject matter of the agreement to sell. This the Appropriate Authority does after examining. Form 37-I. As to how the immovable property which is yet to be constructed could vest in the Central Government after order by the Appropriate Authority is mentioned in Sub-sections (6) and (7) of Section 269UH. If there is failure on the part of the Central Government to make payment as required under Section 269UE, the property revests in the transferor as provided under Section 269UH. Section 269UE provides that after Form 37-I has been filed the agreement for transfer could not be revoked or altered. Section 269UL places restrictions on the registering authority from registering a deed of transfer of immovable property unless no objection certificate has been issued by the Appropriate Authority. When order for purchase of any immovable property by the Central Government is made, transferor is indemnified from any claim that the transferee may have against him under the agreement for transfer (Section 269UM). The Apex court in Appropriate Authority v. Tanvi Trading and Credits P. Ltd. approved the decision of this Court in Tanvi Trading and Credits P. Ltd. v. Appropriate Authority explained the position in a nutshell by holding:

We agree that two alternatives are open under the scheme of the legislation-

(i) The Union of India through the Appropriate Authority could buy the property, or (ii) in the event of its decision not to buy, it has to issue a 'No Objection Certificate' leaving it open to the parties to deal with the property.

86. If we concentrate on the relevant provisions of Chapter XX-C as applicable in the present case, it will be seen that once the NOC was obtained by the plaintiffs for the said property the parties were left open to deal with the said property, hence making the said agreement duly enforceable. The case would have been different if the parties would have tried to cancel or Page 0094 repudiate the agreement, but it is not so in the present case. Both the parties sought to enforce their contractual obligations between themselves by challenging such order by way of writ petitions and filing objections before the Appropriate Authority for the issue of the NOC.

87. I also find force in the argument advanced by the learned senior counsel for the plaintiffs that the Government's pre-emptive right to purchase the suit property being the mandatory statutory provisions has to be read into the said agreement.

88. On passing of such order dated 26-12-1986 by the Appropriate Authority, the seller was divested of the title and the government stepped into the shoes of the plaintiffs and paid the apparent consideration to the seller. The plaintiffs were divested of their rights against the seller pursuant to this order but these rights stood reinstated on passing of the order dated 18-01-1994 by this Court in the Writ petitions whereby the order dated 26-12-1986 stood quashed. It would have been correct to say that the said agreement was unenforceable if during the pendency of the said writ petitions, the Government would have sold the said property to a third party, but in the present case the property in question was not sold and instead the plaintiffs were successfully able to obtain the NOC from the Appropriate Authorities. The aforesaid finds support from the observations made in the case of Krishnaswamy S. Pd. and Anr. v. Union of India (UOI) and Ors. where the Hon'ble Supreme Court held that Section 269UD would not apply to transactions which have become final and to transactions where the department has already auctioned the acquired property. There can be no interference as the property which is the subject matter of the compulsory purchase under Section 269UD has already been sold by public auction. Hence, the said agreement became legally enforceable in 1994.

89. I am in full agreement with the line of reasoning brought forth by the learned senior counsel for the plaintiffs that the performance of such agreement thus cannot be considered to have frustrated though the plaintiffs' claims against the seller were suspended for the period such order dated 26-12-1986 was in operation.

90. Hence, the aforesaid issues are accordingly decided in favor of the plaintiffs and against the defendants.

Issue No. 4: Whether the agreement to sell dated 30-09-1986 is illegal, invalid and unenforceable as being contrary to the terms of the sub-lease as pleaded in para-6 of the preliminary objection of the written statement? OPD

91. In relation to the above said issue, it is the case of the defendants that the plaintiffs are neither the members of Kashmir Cooperative House Building Society Ltd., Delhi nor are they Kashmiris as so required under Clause 6(a) of the Perpetual Sub Lease dated 05-02-1973 as also against the provisions of the Delhi Cooperative Society Act, 1972 Page 0095 and Rules framed there under and/or against the bye-laws of the Kashmir Cooperative House Building Society registered under the Delhi Cooperative Society Act, 1972. Hence, the Agreement to sell dated 30- 09-1986 is illegal, invalid and unenforceable as being contrary to the terms of the said Sub-Lease.

92. The oral evidence on record of DW1 is crucial to the extent where DW1 in his cross-examination has confirmed that there was never any objection raised by the said Society in respect of the transaction of the suit property between the plaintiffs and the seller. The testimony also states that DW1 had enquired about the same in 1992 that the said property in question could be sold to a nonKashmiri.

93. The position of law is also clear to the extent that permission from the Appropriate Authority is not a condition precedent for grant of decree for specific performance. This has been reiterated in a recent judgment of the Apex Court in Shri Vishwa Nath Sharma v. Shyam Shankar Goela and Anr. . It would be relevant to quote para 9 of the aforesaid judgment which reads as follows:

9. The Privy council in Motilal v. Nanhelal , laid down that if the vendor had agreed to sell the property which can be transferred only with the sanction of some government authority, the court has jurisdiction to order the vendor to apply to the authority within a specified period, and if the sanction is forthcoming, to convey to the purchaser within a certain time. This proposition of law was followed in Mrs. Chandnee Widya Wati Madden v. C.L. Katial , and R.C. Chandiok v. Chuni Lal Sabharwal . The Privy Council in Motilal's case (supra) also laid down that there is always an implied covenant on the part of the vendor to do all things necessary to effect transfer of the property regarding which he has agreed to sell the same to the Vendee. Permission from the Land and Development Officer is not a condition precedent for grant of decree for specific performance. High Court relied upon its decision in Mrs. Chandnee Widya Madden v. Dr. C.L. Katil (supra) and Maharo Saheb Shri Bhim Singhji v. Union of India to substantiate the conclusive. In Mrs. Chandnee Widya (supra) this Court confirmed the decision of the Punjab and Haryana High Court holding that if the Chief Commissioner ultimately refused to grant the sanction to the sale, the plaintiff may not be able to enforce the decree for specific performance of the contract but that was not a bar to the Court passing a decree for that relief. The same is the position in the recent case. If after the grant of the decree of specific performance of the contract, the Land and Development Officer refused to grant permission for sale Page 0096 the decree holder may not be in a position to enforce the decree but it cannot be held that such a permission is a condition precedent for passing a decree for specific performance of the contract.

94. The above being the position, the said issue is decided accordingly in favor of the plaintiffs and against the defendants.

Issue No. 5: Whether the agreement dated 30-09-1986 is unjust, inequitable and therefore unenforceable? OPD

Issue No. 6: Whether the plaintiffs were ready and willing to perform the agreement dated 30-09-1986 even after the grant of 'No Objection Certificate' dated 29-04-1994? OPP

95. Issue Nos. 5 and 6 being connected are taken up together. In a suit for specific performance, three main questions have to be examined i.e. readiness and willingness of the plaintiffs to perform their part of the Agreement; agreement being unjust, inequitable and unenforceable and conduct of the parties.

96. As far as the said Agreement dated 30-09-1986 is concerned, it is the case of the plaintiffs that no evidence in this regard has been brought forward by the defendants to support their claim.

97. The cross examination of DW1 states that the seller was an intelligent person and also had the benefit of advice of her husband (defendant No. 1), her father and her attorney, Col. Raina while entering into the said Agreement dated 30-09-1986. Further, it is an admitted fact that the said property in question was tenanted and since the seller had shifted to Coonoor, she wanted to sell the said property and therefore entered into the said Agreement with the plaintiffs.

98. Again, it is an admitted fact that after the seller received the order dated 26-12-1986 from the Appropriate Authorities for pre-emptive purchase of the said property, the seller received the sale consideration due within four months of the said Agreement from the Tax Authorities on handing over the possession of the said property.

99. The affidavit of evidence of PW 1 clearly states that the entire battle to get the possession back from the Tax Authorities right from the filing of the two writs till the filing of the present case has been fought by the plaintiffs alone at their own cost nd expense with the support and consensus of the seller till the time she was alive. The testimony reflects the fact that the seller had washed her hands off the said property and therefore had handed over the original documents files of title and DDA to the plaintiffs. The dissatisfaction of the seller was only to the extent of the amount received from the Tax Authorities according to her was some Rs. 5 lacs short of what she should have actually received after paying the DDA for the claim of unearned increase. It is also a matter of record that a sum of Rs. 5, 35, 349/- was offered to defendant Nos. 1-4 vide letter dated 28-10-1994 (Ex. PW 1/18) which the plaintiffs are ready and willing to pay even now.

100. After having successfully secured the NOC dated 29-04-1994 from the Appropriate Authority to transfer the suit property to the plaintiffs pursuant to the said Agreement to sell, the plaintiffs contacted the seller Page 0097 and wanted to visit her at Coonoor which is evident from the letters dated 17-05-1994 (Ex. PW1/15) and 25-09-1994 (Ex. PW1/16) but were discouraged to do the same.

101. Learned senior counsel for the plaintiffs states that in order to get back possession from the Tax Authorities, the plaintiffs even filed a writ petition being 3314 of 1994 (Ex. DW7/1) and also offered Rs. 29 lacs (photocopy of the Banker's cheque dated 09-11-1994 being Ex. PW 1/17) before this Court on 10-11- 1994 (Ex. DW 7/5) to the Tax Authorities.

102. It is the case of the defendants the said Agreement is unjust and inequitable as there is mala fide on the part of the plaintiffs. It is stated that the plaintiffs had undertaken to assist the seller to seek permission from DDA but no permission was ever applied for. The plaintiffs admittedly did not offer to pay the amount of Rs. 5, 35, 349/- charged in excess by DDA prior to 28-10-1994. It is further stated that offer of Rs. 29 lacs made by the plaintiffs in Court on 10-11-1994 could only be made available through an alleged loan from the plaintiff's office. Apart from the said pay order, the plaintiffs have produced no evidence to show that they have sufficient funds for payment of sale consideration. It is averred that the plaintiffs never called upon the seller to perform her part of the said Agreement. Admittedly, the plaintiffs never offered payment of Rs. 29 lacs to the seller during her lifetime or even to her legal heirs.

103. Learned Counsels for the defendants also state that as per Clause 3.2 of the said Agreement, the parties to the Agreement had agreed that the possession was to be delivered only on execution and registration of the sale deed but the plaintiffs after obtaining the NOC instead of approaching the seller or the defendant Nos. 1-4, directly approached the Authorities for possession of the said property.

104. In my considered view, the seller being a matured and sensible lady had full knowledge of what she was entering into, it cannot be said that the said Agreement was forced upon her; it was her independent decision to sell the said property in question to the plaintiffs at a sum agreed upon by both the parties. Though the amount forwarded as earnest money being Rs. 10, 000 is a meager amount but it was acceptable to both the parties and there seems to have been no dispute as to the amount sent across to the seller by the plaintiffs as advance at that time. It cannot be said that the seller was made to suffer since the entire sale consideration amount due to the seller was paid by the Tax Authorities. It is also important to note that PW-1 has made a categorical assertion in the examination-in-chief that the seller was through out kept informed of what was transpiring even though the seller had no interest in the proceedings. This was possibly because the plaintiffs were conscious of fact that at the relevant stage of time the seller may have to play a role. The assertion of such information being given to the seller made in paragraph 23 of the affidavit has remained unchallenged.

105. The defense taken in the written statement by defendants 1 to 4 that the agreement to sell dated 30.9.1986 was rendered invalid Page 0098 and unenforceable on passing of the order by the appropriate authority cannot be accepted nor is it possible to accept the plea that the specific performance would be highly inequitable, unjust and unfair as far as the defendants are concerned. A plea has been raised that the agreement was to be performed expeditiously but there is nothing in the agreement to show that there was any specific provision in this behalf. In the cross-examination DW-1 admits that the seller never addressed any notice to the plaintiffs canceling the agreement to sell nor was such a letter issued by the legal representatives. It appears from the testimony of DW-1 that he was never even in the picture when the transaction was being completed. Not only that the witness admits that the money received by the seller was kept in the scheme of the Unit Trust of India and that the seller had not paid capital gains tax possibly because of the particular scheme where the money was invested. The witness has even denied the awareness of the filing of the writ petition No. 3314/1994 though he admits that the plaintiffs offered a sum of Rs. 29.00 lacs during the course of the proceedings and had brought a pay order to the Court. The witness has also denied the stand taken by his father (husband of the seller) in those proceedings.

106. The factual matrix and the evidence on record leave no doubt that Shrimati Vijay Malini Kaula (the seller) had authorised the plaintiffs to take all necessary steps for completing the transaction and when the Government exercised the right of pre-emptive purchase, the seller really was not interested in anything more than realisation of the sale proceeds. These sale proceeds the seller received from the Government of India and the lapse of period was only four months. There is evidence on record to show that the seller was not very pleased with the quantum of unearned increase amount deposited with the DDA but took no steps to challenge the same and for the plaintiffs taking steps to further prosecute the matter by challenging the action of the appropriate authority the matter would have come to an end so far as the seller was concerned.

107. It was the plaintiffs who were really aggrieved by the competent authority exercising the right of pre-emptive purchase and thus filed a writ petition No. 225/1987 in January 1987. The plaintiffs Realizing the possibility of some technical objection being raised on account of a grey area as to whether the purchaser could challenge such an order or whether the seller could do so, persuaded the seller also to file another writ petition No. 421/1987 in February 1987. The said writ petition was also filed challenging the order of the appropriate authority but in the name of the seller. The testimony also shows that all the actions taken in this behalf were by the plaintiffs and in fact the seller had executed blank vakalatnamas (Ex. PW 1/13) and papers (Ex. PW 1/7) so that the plaintiffs could take whatever action was deemed proper to challenge the order of the competent authority. The intent of the seller is also apparent from the fact that all the original documents were handed over to the plaintiffs. Thus the seller really washed her hands off from the dispute after having received the money but left it to the plaintiffs to challenge the order of the competent authority, so that in case of their succeeding, the plaintiffs would step into the shoes of the appropriate authority, the seller having already realised the full consideration.

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108. It is the follow-up by the litigation on behalf of the plaintiffs that ultimately resulted in the writ petitions being allowed with the direction to the appropriate authority to give a hearing and decide the matter afresh as per the pronouncement of the Apex Court in C.B. Gautam's case (supra). The representation before the appropriate authority was by the plaintiffs including on behalf of the seller and ultimately the sale permission was granted on 25.4.1994 (Exhibit PW-1/14).

109. The seller during her life time stuck by the bargain and never expressed any intention to back out of the same. However, the seller unfortunately passed away in June 1994 and it appears that her legal heirs became greedy on account of appreciation in the real estate value of the suit property and attempted to back out of the transaction. This clearly shows that till the time the seller herself was alive she was ever willing to perform her part of the Agreement and so were the plaintiffs (as they are now) and it was only her heirs i.e. defendant Nos. 1-4 who have been deviating from the same (this was also the observation made by this Court during the proceedings of the WP No. 3314 of 1994). This can also be said from the oral evidence on record of the defendants which proves that defendant Nos. 6 and 7 were completely aware of rights of the plaintiffs in the said property even before the Agreement to sell and the lease deed between the defendant Nos. 1-4 and defendant Nos. 6-7 were executed and inspite of knowing the same, third party rights were created in the said suit property.

110. The appropriate authority did not deliver possession to anyone necessitating the filing of civil writ petition No. 3314/1994 on 6.8.1994 by the plaintiffs where the husband of the seller was imp leaded as respondent No. 3. The appropriate authority wanted to derive interest on the amount paid to the seller on account of the fact that the monies had been earlier paid by the appropriate authority. Interestingly, the appropriate authority was actually utilising the property in the mean time for residence of its officers and thus was getting the benefit from the property. However, the occasion to challenge such demand of interest did not arise in view of the conduct of the legal heirs of the seller. The plaintiffs came to Court with the sum of Rs. 29.00 lacs through a pay order (PW-1/17) but defendant No. 1 herein resisted the plaintiffs demand for taking over possession. The most important aspect is that defendant No. 7, who is the subsequent purchaser of the property was representing defendant No. 1 as his attorney in the said writ proceedings. In view of the resistance of the legal heirs of the seller to handing over possession to the plaintiffs, the Court had no option but to direct on 10.11.1994 that the possession should be handed over to the legal representatives of the seller. It is specifically recorded that the Legal heirs of the seller refused to accept the sum of Rs. 29.00 lacs plus (+) interest demanded by the Income Tax Department and did not want the possession to be given to the plaintiffs.

111. The plaintiffs took prompt action to file Civil Suit on 23.11.1994 impleading the legal representatives of the seller as defendants 1 to 4 and Page 0100 the Income Tax Department as defendant No. 5. No interim orders were immediately passed and a series of documentations took place soon thereafter. In December 1994 two Powers of Attorney were executed in favor of Mr. R.N. Sahni, defendant No. 7. This was followed up by an Agreement to sell dated 30.12.1994 in favor of defendant No. 6, the son of defendant No. 7. However, the legal heirs of the seller and defendants 6 to 8 were fully aware of the facts that in view of the provisions of Section 269UC of the Income Tax Act, the possession could not be handed over to the purchaser without first the appropriate authority passing the order. In order to defeat the said provision a day before the execution of the Agreement to sell on 29.12.1994 a lease was executed in favor of defendant No. 8 for Rs. 15, 000/- per month. Defendant No. 8 is a company totally controlled by defendants 6 and 7 as it emerges from the evidence. Thus the subterfuge was done to somehow show that the property which was being sold was a tenanted property and also to frustrate the interim orders, which may be granted in favor of the plaintiffs by showing the possession to already have been parted with.

112. At this point it may also be said that the defendant Nos. 1-4 have been at an advantageous position as compared to the others right from the beginning. Even after the pre-emptive purchase order dated 26-12-1986 was passed, the seller did not get affected as she was in receipt of the entire sale consideration. Though later to get back possession of the said property in 1994, they had to pay a sum of Rs. 44.18 lacs to the Tax Authorities but at the same time also received a sum of Rs. 19.20 lacs from defendant No. 6 as advance. With this, since 1994, they have also been enjoying the rental income of Rs. 15, 000/- to Rs. 20, 000/- per month from defendant No. 7.

113. Defendant No. 8 as stated above is a company with defendants 6 and 7 as Directors and shareholders. The said defendants 6-8 claim that there was a bonafide transaction. The facts set out above show to the contrary. One may state that not only was the transaction not a bonafide one but was also a mala fide attempt made by defendants 6 to 8 in collusion with the legal heirs of the sellers, defendants 1 to 4, to deprive the plaintiffs of their due rights in the property for which they had litigated with the Income Tax Department and the appropriate authority for the last number of years.

114. In so far as taking steps to seek permission from DDA is concerned, it may be said that the seller and the plaintiffs both had to take such an initiative and since such step was not taken, the parties had to bear the brunt of it. This being the position, the plaintiffs still had made an offer to pay a sum of Rs. 5, 35, 349/- to defendant Nos. 1-4 vide letter dated 28-10-1994 (Ex. PW 1/18) which the plaintiffs are ready and willing to pay even now (which they are not obliged to).

115. The affidavit of evidence of PW2 is sufficient to bring out the financial position and paying capacity of the plaintiffs. The testimony of PW2 states that the benefit of availing loan from his company was available to the plaintiffs till plaintiff No. 2's retirement i.e. till November 2004 Other than that, plaintiff No. 2 had a credit of Rs. 30, 40, 207/- in his Provident Fund Page 0101 Account as on 01-09-2003. Otherwise also, it is the plaintiffs who have been bearing and managing the cost and expenses of the litigation all through out only to get the possession of the suit property.

116. Looking at the totality of the facts and circumstances in the present case and the conduct of both the parties, in my opinion, neither can it be said that the said Agreement dated 30-09-1986 is unjust, inequitable and unenforceable nor that the plaintiffs were not willing to perform their part of the said Agreement even after the grant of 'No Objection Certificate' dated 29-04-1994.

117. Hence, Issue Nos. 5 and 6 are decided in favor of the plaintiffs and against the defendants.

Additional Issue No. 1: Whether plaintiffs are guilty of misrepresentation and fraud upon the mother of defendant Nos. 1-4 as alleged?

118. The plaintiffs state that there is no pleading of fraud in relation to the making and the signing of the Agreement to sell dated 30-09-1986 nor is there any evidence led in this behalf.

119. The oral evidence of DW 1 is of much relevance in this behalf. It clearly states that the seller (DW 1's mother) was an intelligent lady who was capable of taking decisions on her own. At the same time, it is stated that she also had the benefit of advice in relation to the same from her husband, father and her attorney. In the written statement, it has been contended that the plaintiffs had represented to the seller that they would be able to get the order dated 26- 12-1986 passed by the Appropriate Authority set aside within a period of one year but this contention has not been supported by evidence. Instead, DW1 in his cross examination has stated that he was not present when the said Agreement was signed nor was he present in any of the discussions between the plaintiffs and the seller.

120. It is the case of the defendants that the seller had imposed immense faith and confidence in plaintiffs and the plaintiffs have not lived up to the same. It is averred that since the seller was not staying in Delhi, she was not aware of the prices of real estate in Delhi and was completely dependant on the plaintiffs for the same and it is the plaintiffs who mistrusted her and quoted the wrong price to her.

121. In my opinion, even if it is assumed that this was the position, it cannot be lost sight of that the seller was advised by not only her father but her husband, her attorney and her son. Now, if the seller trusted the plaintiffs more than the aforesaid persons, then the plaintiffs cannot really be blamed for the same or held responsible for the same.

122. The aforesaid issue is decided accordingly. Additional Issue No. 2: Whether defendant No. 6 is a bonafide purchaser for valuable consideration without notice of the suit property? If so, its effect?Additional Issue No. 3: Whether defendant No. 8 was validly inducted as tenant in suit property?

123. It is the plaintiffs' case that defendant Nos. 1-4 as well as defendant nos.6-8 have knowingly taken the false plea of defendant No. 6 being a bonafide purchaser.

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124. The plaintiffs state the defendant No. 6 is the son of defendant No. 7. They live in the same house and work in the same office. Not only this, defendant No. 7 was the attorney of defendant Nos. 2 and 3 and also acted on the instructions of defendant No. 1 in Writ Petition No. 3314/1994 filed by the plaintiffs. This averment has been affirmed by DW1 in his affidavit and in his cross examination.

125. DW1 in his cross examination has admitted that he had discussed the matter of the suit property with the defendant No. 7 and that he had dealings with defendant No. 6 with respect to the lease deed. It is also stated that the amount received by defendant Nos. 1-4 as advance was used for making the requisite payment to the Income Tax Authorities.

126. It is an admitted fact that defendant No. 6 and 7 were directors of defendant No. 8. DW 2 in his cross examination has affirmed to the fact that the said lease deed entered into was approved by the Board of Directors.

127. The evidence on record of DW2 also states that he had been informed about the case by defendant No. 2 and about the Agreement to sell dated 30-12-1994 (Ex.DW6/1) entered into between the defendants before signing by defendant No. 6.

128. The cross examination of DW 3 is also very crucial in this regard. He has admitted that he discussed the said transaction with his father, that his father informed him about the court proceedings relating to the suit property and also that his father was present when he discussed the agreement to sell with his Chartered Accountant.

129. It may even be noted that the said agreement to sell dated 30-12-1994 (Ex.DW6/1) referred to the release of the suit property by the Income Tax Authorities.

130. To substantiate its case, the learned senior counsel for the plaintiffs has brought the attention of this Court to para 7 of the judgment of the Apex Court in Devalsab (Dead) by Lrs. v. Ibrahimsab F. Karajagi and Anr. which reads as under:

7. Learned Counsel for the plaintiff-appellant submitted that in fact exercise of discretionary relief in favor of Defendant No. 2 is not correct as this kind of discretion if exercised in favor of Defendant No. 2 then it is likely to lay down a bad precedent. This will give premium to unethical transaction and a bona fide purchaser will be left high and dry. Learned Counsel for the defendants submitted that it is true that Section 20 of the Specific Relief Act is a discretionary remedy that is not always necessary to grant a decree for specific relief if it appears to be inequitable and causes hardship to the other side. But looking to the facts of the present case we are of opinion that it will be unfair and inequitable not to grant a decree for specific relief in favor of the plaintiff-appellant herein because he is a bona fide purchaser and he Page 0103 has done everything which is possible, that he has purchased the stamp paper and was ready and willing to perform his part of the contract, that he went along with Defendant No. 1 to the Sub-Registrar's Office for registration but some how Defendant No. 1 sneaked away from that place as he had already entered into another agreement to sell the present premises, so much so that a sham suit was got filed by Defendant No. 2 against Defendant No. 1 and on the same day a compromise decree was obtained. These facts go to show that there is not much equity left in favor of Defendant No. 2 as it appears that the suit by Defendant No. 2 was a pre-arranged affair with connivance with Defendant No. 1. Otherwise the suit would not have been filed on the same day and a compromise decree would not have been obtained the very same day. This shows that there was a preconceived agreement between Defendant Nos. 1 and 2 in order to cheat the plaintiff-appellant herein. Therefore, we are of opinion that the discretionary power exercised by learned Single Judge of the High Court was not correct. In fact, it appears that Defendant No. 2 has purchased the litigation and therefore, there is no equity in his favor.

131. The plea taken by defendant Nos. 6-8 is that they assumed that the said Agreement to sell dated 30-09-1986 had frustrated and thus become unenforceable. Such a plea cannot be accepted.

132. Defendant No. 6 appeared in the witness box and denied knowledge of any prior transaction between the plaintiffs and the seller or of the suit proceedings. A similar stand was taken by defendants 7 and 8. This is completely contrary to what has ultimately emerged in the cross-examination as also the documents brought on record. It is admitted position that defendant No. 7 held Powers of Attorney in his favor on behalf of defendant No. 1 herein and such Powers of Attorney was executed on 11th and 14th November 1994. The application filed in Civil Writ Petition No. 3314/1994 by defendant No. 1 is dated 6.12.1994 (Exhibit DW-7/11). The same is supported by an affidavit of defendant No. 7, as attorney (Exhibit DW-2/2). The said application shows that defendants 1-4 also offered a sum of Rs. 29 lacs only on account of the fact that the possession was not being handed over to the attorney by the Income Tax Department. Thus all the parties understood at that time that only a sum of Rs. 29 lacs had to be paid and the question whether the Income Tax Department could recover any interest arose only subsequently. Paragraph 4 of the affidavit refers to the High Court order dated 1.12.1994 whereby possession was directed to be handed over to the Legal heirs of the seller without interest leaving the question of interest open to be decided between the parties. The application had been filed on behalf of defendant No. 1 seeking possession and a reference has been made to the institution of the suit by the plaintiffs as also the appeal filed against nongrant of interim order.

133. The aforesaid shows the falsity of the deposition of defendant No. 7 who has been denying knowledge of various aspects of the matter while in the cross-examination and as per the documents it emerged that the said Page 0104 defendant was fully in the picture. The credibility of defendant No. 6 as a witness is thus clearly breached and whatever defendant No. 6 has stated is to be taken with a pinch of salt.

134. The position of defendant No. 7 testimony is no better who appeared as DW-2. The said witness had admitted knowledge of the proceedings pending before the appropriate authority as also about the engagement of counsel. The witness, in fact, admitted that a wrong statement was made in the written statement and this stand cannot be explained away especially on account of the fact that defendant No. 7 was advised by the same counsel while filing the written statement as also while filing the application as attorney of defendant No. 1 for seeking possession. The said defendant also claims in his testimony that assistance was rendered to defendants 1 to 4 to pay the amounts to the Income Tax Department which was contrary to the stand taken by defendants 1 to 4.

135. Another aspect which emerges from the testimony is that he had admitted knowledge of the writ proceedings but denied knowledge of the prior agreement between the plaintiffs and the seller. Defendant No. 6 was a Director of defendant No. 8. Thus defendants 6 and 7 have been selectively showing signs of amnesia till in cross-examination they have been compelled to admit to the knowledge they had of the whole transaction in question.

136. The testimonies of defendants 6 and 7 also throw light on the camouflage of the agreement entered between the legal heirs of the seller and the lease agreement. DW-2/1 is the lease agreement while DW-6/7 is the agreement to sell. The stamp papers for both the documents were ultimately purchased on 29.12.1994. Surprisingly the serial numbers of both the stamp papers are same, i.e. 3737. As to how this could have happened only the said defendants would know.

137. The contradictions in the testimonies of the witnesses of the defendants leave little doubt that the said witnesses were in fact deposing falsely before this Court. There are contradictions between what is pleaded and what is deposed.

138. In view of the aforesaid findings arrived at, nothing more needs to be said about the false testimonies of all the defendants who have in fact admitted to misleading the Court by taking contradictory stands in their pleadings and contradicting each other in their pleadings. The clear fact which emerges is that all the defendants colluded on account of escalation in the real estate value to deny the plaintiffs the fruits of success in the proceedings initiated by the plaintiffs to challenge the order of the appropriate authority and there can be hardly any equities and favors of such defendants. The seller had received full consideration and was never at a loss. When the stage came for refunding the money the funds were made available by defendants 6 to 8. Not only that defendants 1 to 4 have been beneficiaries of rent from defendants 1 to 4 which is stated to be to the tune of Rs. 24, 33, 284/- as on 24.12.1994. Thus neither was the seller at a loss at the initial stage nor were the legal representatives out of pocket at any stage of time.

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139. If the equities are seen from the perspective of defendants 6 to 8 these were parties who jumped into a litigated property knowing fully well the consequences thereof. Not only that the possession has been enjoyed by them against rent. The defendants have also falsely deposed before this Court to hoodwink the Court. It is evident that the defendants were in full knowledge of all that has transpired and even adopted the subterfuge of creating a tenancy in the name of defendant No. 8. Hence, it does not lie in the mouth of any of the defendants to claim any equities or plead that by escalation in the value of the property the agreement to sell ought not to be performed.

140. It is not possible to thus accept the plea that since the plaintiffs only paid a sum of Rs. 10, 000/- the agreement ought not to be performed. There may have been some force in the contention on account of passage of time if the conduct of the defendants was bonafide or any actual loss would have been caused to them. The plaintiffs were always ready and willing to perform their obligation, contested the order of the appropriate authority, succeeded in the same but at the later stage were deprived of the benefit of the sum on account of the conduct of the defendants. It has already been stated that neither seller suffered nor the legal representatives who received the full consideration initially from the appropriate authority and thereafter from defendants 6 to 8. Even otherwise it is the said legal heirs of the seller who sought to back out of the transaction to deprive the plaintiffs of their due right.

141. In view of the aforesaid facts it cannot be said that the current high value of the property should be a factor to deny the plaintiffs their rights under the agreement to sell. Defendants 1 to 4 being the legal heirs of the seller conducted themselves only accentuated by greed even though the seller had received full consideration and defendants 6 to 7 jumped into the picture to somehow get the property which was already under litigation through a series of misleading transactions of lease and agreement to sell.

142. It is also the case of the plaintiffs that they never acquired another property since the property in question was leasehold and their acquisition of the suit property would disentitle them from acquisition of another property. The plaintiffs have volunteered to pay the Income Tax Authorities and the counsel of the plaintiffs even volunteered that the plaintiffs would be even willing to pay the additional amount of Rs. 5, 35, 349/-. As already discussed defendants 1 to 4 had been getting the rent @ Rs. 15, 000/- per month which was consequently increased to Rs. 20, 000/- per month and are also beneficiaries to that extent. Even though it is not the fault of the plaintiffs, the occasion to challenge the order of imposition of interest by the Income Tax Department never arose on account of subsequent developments.

143. At best the only equitable solution which this Court can think of in favor of defendants 1 to 4 is that they would be compensated to the full extent of Rs. 44. 18 lacs paid to the Income Tax Authorities albeit with the help of defendants 6 to 8. The plaintiffs have already volunteered to pay an additional amount of Rs. 5, 35, 349/- and this is the total amount payable by Page 0106 the plaintiffs apart from interest on the amount of Rs. Rs. 5, 35, 349/- which is quantified @ 12 per cent per annum from 1.2.1987 till date of payment. This is so since the Income Tax Authorities paid the amount to the seller in January 1987.

144. Whether defendants 6 to 8 are liable to recover any amounts from defendants 1 to 4 is a dispute between the said defendants which is not required to be gone into in this proceedings as defendants 6 to 8 are responsible for the state which they find themselves in apart from the fact that defendant No. 6 has enjoyed occupation of the property on account of tenancy created in favor of defendant No. 8.

145. In my considered view, the evidence placed on record in relation to the aforesaid issues is sufficient to indicate that defendant Nos. 6-8 were completely aware of the plaintiffs' rights in the said suit property and the aforementioned transactions i.e. the Agreement to sell and the lease deed were executed only to defeat/weaken the plaintiffs' right to specific performance in the present suit.

146. The additional issue Nos. 2 and 3 are accordingly decided. Relief.

147. A decree for specific performance of the agreement dated 30-09-1986 is passed in favor of the plaintiffs and against the defendants subject to the modifications that the plaintiffs will pay a sum of Rs. 49,43,349/- [Rs. 44.18 lacs (+) Rs. 5, 35, 349 (-) Rs. 10,000.00 paid earlier by the plaintiff] along with simple interest @ 12% p.a. on Rs. 5, 35, 349/- from 1.2.1987 till date of payment to defendants 1 to 4 as consideration and the possession of the property is to be handed over on payment of such amount to the plaintiffs. The Conveyance Deed would also be registered in favor of the plaintiffs by defendants 1 to 4 upon the payment of such amount at the cost of the plaintiff. The plaintiffs shall also be entitled to costs.

148. Decree sheet be drawn up accordingly.