Dharam Vir Kalra vs Ravinder Kumar

N.K. Kapoor, J.—This is defendant vendees regular second appeal against the judgment and decree of District Judge, Patiala, whereby the appeal filed against the judgment and decree dated 28.9.1987 was dismissed.

Briefly put, Punjab Financial Corporation issued an advertisement in the "Daily Tribune" dated 15.6.1980 inviting tender for the sale of movable and immovable property belonging to M/s Neelam Potteries situated on Patiala Road Rajpura through its Managing Director. Rattan Singh plaintiff now represented by the legal representatives submitted an offer for purchase of the property which was considered and accepted in its meeting of the Board of Directors on August 22, 1980, for a down payment of Rs. 1,10,000/-. Sh. Balraj Kumar, Assistant Manager, of the Corporation, was authorised to execute the sale deed on behalf of the Corporation. Rattan Singh was intimated regarding the acceptance of his offer through a letter dated 22.9.1980 who in turn made a request vide letter dated 26.9.1980 for purchase of the necessary stamp paper at his cost and to intimate him the cost of stamp paper to be purchased so that the demand bank draft could be submitted for completion of the sale transaction. It is the case of the plaintiff that Sh. Balraj Kumar, the authorised agent, did not turn up to execute the sale deed. It has further been stated by the plaintiff that he sent a demand draft of Rs. 11,000/- vide bank draft dated 28.1.1981 which was duly accepted by the Punjab Financial Corporation (for short ''the Corporation''). Since the Corporation failed to execute the sale deed, plaintiff brought a suit for specific performance on 28.4.1981. During the pendency of the suit, the Corporation sold this very property in favour of Sarv Sh. Daya Nand Kalra, Dharamvir Kalra and Madan Lal Kalra.

In the written statement filed by the Corporation, it was averred that the plaintiff was not ready and willing to get the sale deed executed. He was asked vide letter dated 22.9.1980 to supply the stamp paper and to get the sale deed executed vide letter dated 13.10.1980 but he failed to supply the stamp paper and even the notice issued on 24.11.1980 requiring him to complete the sale transaction within 10 days of the issuance of letter failed to yield any response. This way the plaintiff repudiated the contract. Thus, the Corporation had no alternative but to invite fresh tenders and thus has sold the property to defendants No. 4 to 6.

In the written statement filed by the defendants No. 4 to 6, they claimed themselves to be bona fide purchaser for value and without any notice and knowledge of the agreement of the plaintiff. In addition thereto, the defendants averred that they had incurred a sum of Rs. 5,00,000/- on raising fresh construction on the property in dispute.

On the pleadings of the parties, following issues were framed: -

Whether the plaintiff has been and is ready to perform his part of the contract ? OPP

Whether defendants No. 4 to 6 are bona fide purchasers for consideration and without notice of the subsisting contract between the plaintiff and defendant No. 1 ? OPD 4 to 6.

Whether the defendants No. 4 to 6 have raised a huge building by spending about rupees five lacs on the new construction, if so its effect ? OPD.

Whether the plaintiff is entitled to the'' specific performance of the contract ? OPP.

Relief.

The trial Court on the basis of evidence came to the conclusion that the plaintiff had been ready and willing to perform his part of the contract. Defendants No. 4 to 6 were held to have purchased the property for consideration but was held not to be bona fide purchaser as they had knowledge of the existing contract of sale by the plaintiff. It was also found by the trial Court that defendants No. 4 to 6 failed to prove that they have incurred any expense on the new construction as alleged.

Two appeals were filed, one by the Corporation and the other by defendants No. 4 to 6. The lower appellate Court once again examined the matter in all its details, on facts as well as on law. On reappraisal of evidence, the lower appellate Court found no infirmity in the judgment and decree of the trial Court and so dismissed both the appeals.

Almost identical pleas have been raised by the counsel for the appellants which somehow did not find favour with the trial Court as well as the first appellate Court.

Broad facts, as noticed by the Courts below, are, in fact, not in dispute i.e. pursuance to the advertisement in the ''Daily Tribune'' on 15.6.1980 plaintiff made an offer to purchase the existing factory along with its movable assets for a consideration of Rs. 1,30,000/-, payment to be made in instalments. In the alternative proposal was made to the effect that the plaintiff was willing to make the entire payment in lump sum and to purchase the property for a sum of Rs. 1,10,000/-. This latter proposal was accepted by the Corporation as is clear from the minutes of the meeting of item No. 33 which reads as under:-

"The said item is extracted as follows for a ready reference:

"Considered the Managing Director''s Memorandum No. BD/226/80 dated 19th August, 1980 and resolved that offer of Shri Rattan Singh, for purchase of properties belonging erstwhile M/s Neelam Pottaries (Regd). Rajpura for a down payment of Rs. 1,10,000/- be and is hereby accepted.

Further resolved that Shri Balraj Kumar Assistant Manager be and is hereby authorised to execute the sale deed on behalf of the Corporation, present the same before the Sub-Registrar, Rajpura, admit the execution and receive the consideration amount."

This acceptance was following by a communication dated 22.9.80 addressed to the plaintiff (Ex. P-5) which reads as under:-

"You are already aware that the Corporation is agreeable to transfer the property earlier known as M/s Neelam Potteries, Rajpura, for a consideration of Rs. 1,10,000/- (Rs. one lac ten thousand only). You are also aware that the cost of stamp papers, expenses on registration charges etc. etc., are to be born by you. You are, therefore, requested to send the stamp papers for the said consideration to be purchased in the name of Punjab Financial Corporation at an early date."

It is while acknowledging the aforesaid communication that the plaintiff in turn requested the defendant-Corporation to intimate the cost of stamp papers so that the demand draft/cheque drawn in its favour be sent. Another communication was sent by the plaintiff on 29.10.1980 requesting the defendant Corporation for splitting up the value of the movable/immovable property to enable him to purchase the stamp paper required in respect of the immovable property. This was duly replied by the Corporation wherein movable assets were assessed at Rs. 11,000/- and immovable property at Rs. 1,19,000/- Vide communication dated 24:11.1980 the plaintiff was further asked to complete the transaction within 10 days of the issuance of letter failing which Corporation was to presume that he was no longer interested in the deal.

Plaintiff sent a draft for a sum of Rs. 11,000/- on 28.1.1981. This amount till today is with the Corporation. The plaintiff apprehending that the property might be transferred to some other person in a clandestine manner made a complaint on 12.2.1981 to the Secretary Industries and the Commissioner of Finance complaining that the Corporation was being allured by some higher offer and so was dilly dallying/refusing to transfer the property despite offer having been accepted. With these uncontroverted material on record, the Corporation for reasons known to itself passed another resolution on 17.2.1981 to sell the property to the present appellants for a consideration of Rs. 1,25,000/-. The sale in favour of defendants No. 4 to 6 as noticed earlier also was effected vide sale deed dated 8.5.1981 i.e. during the pendency of the suit.

The Courts below on carefully examining the documentary as well as oral deposition of witnesses have returned a finding that the plaintiff was ever ready and willing to perform his part of the agreement i.e. payment of sale consideration of Rs. 1,10,000/- in lump sum. No plausible explanation has been given by the appellants as to what prompted them from backing out of the duly concluded agreement.

There is no merit in the contention of learned counsel for the appellants that the agreement fell through as the plaintiff failed to get the sale deed executed within the stipulated period i.e. 10 days from the issuance of notice in this regard. Time was not the essence of the contract. In fact, the plaintiff had been promptly replying to the letters issued by the Corporation and expressed his ever willingness to perform his part of the contract and to show his bona fide, remitted a sum of Rs. 11,000/- on account of stamp paper charges upon which the sale deed was to be drafted without any delay. Similarly, there is not much substance in the. plea of the appellants that they had no knowledge of the pending suit. Notices upon the Corporation and its functionaries were served for 4.5.1981. The sale deed in favour of defendant Nos. 4 to 6 were executed on 8.5.1981. The cortesting defendants have also admitted that they knew about the subsisting contract of Rattan Singh with the Corporation regarding the same very property. Statement of Daya Nand DW-1 to the effect that he knew of subsisting contract belies the stand taken in the written statement that they had no knowledge. The contesting defendants have failed to prove that the expenses, if any, incurred in raising fresh construction. Thus, the appeal is wholly devoid of merit is consequently dismissed. Parties, however, will bear their own costs.

Since the execution of the judgment and decree of the lower appellate Court was stayed vide order dated August 17, 1990, I allow two months time to the Corporation to comply with the directions of the trial Court as contained in its relief clause.