U.P.Small Industries Corporation Ltd. vs Anupam Housing (P.) Ltd. and another

P.C. Verma, J.—This appeal has been filed by the U.P. Small Industries Corporation Ltd., Kanpur (hereinafter referred to as the "UPSIC") against the judgement and decree dated 31.03.2008 passed by learned Additional District Judge, Court No. 1, Agra (hereinafter mentioned as the "impugned judgment") whereby the suit instituted by M/S Anupam Housing (P) Ltd., Agra (in brief as "AHPL") for specific performance was decreed against the UPSIC to execute a transferdeed in favour of the AHPL (Respondent No. 1) regarding the leasehold interest of the suit property being Block No. 86/4, measuring 606.17 sq. mtrs. situated in the Sanjay Place Commercial Complex at Agra after obtaining ''No Objection Certificate'' in its respect from the Agra Development Authority (ADA) (Defendant No. 2).

2.The brief facts giving rise to the present appeal are:

(i) The AHPL instituted a suit in the Court of the Civil Judge (SD), Agra being Original Suit No. 306 of 1998, arraying therein the UPSIC and the ADA as the Defendant Nos. 1 and 2. The plaint (paper no. 4A) allegations were:

(ii). The plaintiff is a private limited company duly incorporated under the Indian Companies Act, 1956 and Inder Chand Jain is its Director having a right and authority to file the suit. The Defendant No. 1, UPSIC, is also a company. The ADA granted a lease in favour of UPSIC in respect of the plot of land bearing Block No. 86/4, measuring 606.17 sq. mtrs. situated in Sanjay Place Commercial Complex, Agra for a period of 80 years vide leasedeed dated 24.09.1992.

(Iii). It was further averred in the plaint that UPSIC decided to dispose of the above plot and invited tenders for its disposal after giving wide publicity in various National daily newspapers on 19.01.1996, 20.01.1996 and 21.01.1996. Pursuant thereto, five offers were received by UPSIC including one dated 01.02.1996 (Annexure P1 to the plaint) of the AHPL for a sum of Rs. 55,21,000/ along with its earnest money of Rs. 50,000/, and subject to the condition that the transfer charges for the grant of permission by the ADA or the nonconstruction levy, if payable to the ADA, were to be borne by the UPSIC. On 02.02.1996, the AHPL revised its offer by raising price to Rs.75,51,000/ and maintained the other terms mentioned in its initial offer (Annexure P2 to the plaint). The UPSIC, thereafter, invited the tenderers for negotiations in its office on 08.03.1996 vide its letter dated 01.03.1996 (Annexure P3 to the plaint). Before the Committee constituted by the UPSIC, all tenderers appeared and AHPL, in continuation of its offer dated 01.02.1996 and revised offer dated 02.02.1996, further revised and enhanced the amount to Rs.75,11,000/ (Annexure P4 to the plaint), which worked out to Rs. 12,391/ per sq. mtr. On 10.04.1996, the AHPL requested the UPSIC to take an early decision (Annexure P5 to the plaint). The UPSIC, vide its communication dated 20.05.1996 (Annexure P6 to the plaint), called AHPL''s representative and two other tenderers for further negotiations on 25.05.1996 in connection with their offers pending with the UPSIC. Pursuant thereto, the representative of AHPL reached the office of UPSIC on 25.05.1996 and explained to the Committee about the reasonableness of the price offered by it. It was brought to the notice of the Committee that the ADA was selling its commercial plots with permission to construct 8 (eight) storeys in Sanjay Place at Agra @ Rs. 12,500/ per sq. mtr., while on the disputed land, the constructions could be raised only upto 4 floors. Being satisfied, the Committee of UPSIC recommended the offer of AHPL for its acceptance to the Board of Directors of the UPSIC vide its report dated 25.05.1996 (Annexure P7 to the plaint). Thereafter, this matter was taken up in the 179th meeting of the UPSIC as agenda Item No. 18 on 02.07.1996 (Annexure P8 to the plaint), but no decision could be taken. Then the matter remain pending and the representative of AHPL used to meet and send letters to the Managing Director of UPSIC. In the second fortnight of December, 1996, AHPL gave its letter dated 16.12.1996 to the M.D. of the UPSIC agreeing to enhance the price to Rs. 12,500/ (Annexure P9 to the plaint) which was followed by another communication dated 17.12.1996 (Annexure P10 to the plaint).

(iv). It was also averred in the plaint that the 181st meeting of the Board of Directors of the UPSIC was held on 28.12.1996 wherein the offer of the plaintiff was accepted with variation of price (premium) (Annexure P11 & 12 to the plaint). Further, the offer of the AHPL was never revoked either by the lapse of time or otherwise and both the parties i.e. AHPL and UPSIC accepted the offer made by AHPL, as revised and reiterated from timetotime, remained pending all through. The letter of acceptance dated 27.02.1997 was given to AHPL (Annexure P13 to the plaint). Since there was variation of price as was offered by AHPL, the said acceptance, under law, amounted to a "counter offer". AHPL acknowledged the above letter dated 27.02.1997 vide its letter dated 28.02.1997 (Annexure P14 to the plaint) and also further confirmed its acceptance of the aforesaid counter offer and thus a concluded contract raised between the parties. It was also averred that the execution of a formal contract was not necessary to conclude the contract and, therefore, none insisted upon it. The acceptance of the offer of the AHPL was also communicated by the Managing Director of the UPSIC to the Government vide letter dated 09.05.1997 (Annexure P15 to the plaint).

(v). AHPL further averred in its plaint that despite its repeated reminders, the UPSIC did not fulfil the conditions and execute the transfer deed in its favour. However, the UPSIC, acting upon the terms of the contract so arrived at, sent letters to the ADA for grant of permission to execute transfer deed of its lessee rights and ultimately the ADA accorded its permission to the UPSIC subject to payment vide its communication dated 28.08.1997 (Annexure P16 to the plaint). Thereafter, the UPSIC did not take any further steps, although AHPL remained always ready and willing to perform its part of contract. AHPL wrote a number of letters to invite the attention of UPSIC to fulfil its obligation, but they fell on the deaf ears and ultimately a notice by the counsel of AHPL dated 22.11.1997 was served but despite that the UPSIC did not comply with the demand made therein, leading to filing of a Civil Misc. Writ Petition No. 41103 of 1997 on 03.12.1997 but the High Court refused to issue any writ to the UPSIC vide its order dated 21.02.1998 by observing that it involved questions of facts. Aggrieved therefrom, AHPL filed Special Leave Petition, which was finally withdrawn on 30.04.1998 and, thereby, AHPL was left with no alternative but to file the suit. It was also averred that AHPL has always been and still is ready and willing to perform its part of contract according to the true construction of the contract. The ADA was arrayed as Defendant No. 2 as a proper party. AHPL, in the plaint, prayed for a decree of specific performance of the contract of transfer of the suit land and also for directing the UPSIC to fulfil its obligations under the contract to obtain necessary permission or sanction from the ADA to transfer its lessee rights in the suit property and to seek extension of time for the completion of the construction. If the UPSIC failed to perform its part of contract and to obtain sanction, permission and extension, the same might be allowed to be taken by AHPL and the expenses be allowed to be adjusted against the balance of the price to be paid to the UPSIC. Future compensation/damages were also prayed for delaying the execution of the transfer deed.

(vi). The UPSIC, arrayed as defendant no. 1 in the suit, filed its written statement (paper no. 49A) in the Court below. UPSIC did not dispute any of the annexures to the plaint except Annexure No. P9. In its written statement, UPSIC alleged that the offers of AHPL dated 01.02.1996, 02.02.1996 and 08.03.1996 lapsed on the expiry of their validation period of one month. The offers stood lapsed due to expiry of time and stood revoked. UPSIC was never authorized to accept the offer as it was the Government which alone could have given acceptance. UPSIC made its offer through letter dated 27.02.1997 for giving the land to AHPL at the rate of 12,500/ per sq. mtr. and no terms and conditions were mentioned in the said letter. The communication dated 27.02.1997 was subject to obtaining NOC from ADA. The execution of a formal contract was necessary. The offer of UPSIC was for a total consideration of Rs. 75,77,125/ which AHPL did not pay. The transfer deed could not be executed as AHPL did not obtain ''No Objection Certificate'' and AHPL did not agree to pay the charges to the ADA. AHPL was not ready and willing to perform its obligation. In additional pleas, UPSIC alleged that no concluded contract came into existence. AHPL was not ready and willing to pay the charges to the ADA for obtaining the ''No Objection Certificate''. The charges for obtaining ''No Objection Certificate'' were not included in the amount of Rs. 75,77,125/ and the offer of the said price made by UPSIC to AHPL was not accepted by AHPL. The UPSIC could not be considered any authorization for entering into contract with AHPL because of Article 125 of Association. The suit deserves to be dismissed with costs.

(vii). The ADA, arrayed as defendant no. 2 in the said suit, filed its written statement (paper no. 55A). It was alleged therein that the M.D. of UPSIC requested ADA for granting permission for transfer of the disputed plot on 31.12.1996 and the ADA wrote to UPSIC to deposit an amount of Rs. 29,74,154/ but UPSIC did not deposit the aforesaid amount and wrongly put an advertisement for auction of the plot.

Pursuant to the pleadings of the parties, the Trial Court framed 10 issues. Issue No. 1 was decided in the favour of the plaintiff holding that a concluded contract existed between AHPL and UPSIC. Issue No. 2 was decided holding that UPSIC was liable to pay the charges for obtaining permission to ADA. While deciding Issue No. 3, it was held that there was no need for writing of any formal document by the parties. Vide Issue No. 4, AHPL was held to be always ready and willing to perform its part. Suit was also held not to be premature while deciding Issue No. 5. Issue No. 6 was also decided in favour of AHPL by holding that the offer given by AHPL did not expiry by afflux of time. Vide Issue No. 7, AHPL was held to be an incorporated company and Inder Chand Jain was held to be authorized to institute, verify and sign the plaint on its behalf. The suit was held to be properly valued (vide Issue No. 8) and the suit was found to be not bad for misjoinder of ADA (vide Issue No. 9) and vide Issue No. 10, AHPL was given the relief of decree of the specific performance of the concluded contract.

On behalf of AHPL, Inder Chand Jain and Anil Kumar Agarwal were examined as PW1 and PW2, on behalf of UPSIC, Sunil Chauhan was examined as DW1 and on behalf of the ADA Anwar Hussain Qureshi was examined as DW2. Since the UPSIC and AHPL both were companies, there are large number of documents on record.

Heard learned counsel for the parties.

The points of determination arising in the present appeal are formulated as under:

1.Whether the proposal/offer given by AHPL to the UPSIC stood lapsed by efflux of time and, therefore, no contract could have arrived at on its basis?

2.Whether the alleged contract between the UPSIC and AHPL required compulsory registration under the provisions of the Registration Act and for want of its registration, no decree of specific performance on its basis could have been passed?

3.Whether the alleged contract was unenforceable by reason of its contingent nature as the ''No Objection Certificate'' was required from the ADA for execution of a transfer deed by the UPSIC?

4.Whether the amount payable to the ADA by the UPSIC for seeking its ''No Objection Certificate'' to transfer its leasehold interest and extension of time for construction was to be borne by the UPSIC or AHPL?

5.Whether there existed a concluded contract between the UPSIC and the AHPL?

6.Whether the AHPL has always been ready and willing to perform its part of contract according to the true construction of the contract?

7.Whether the Trial Court rightly exercised its discretion to decree the suit of AHPL for specific performance of the contract?

Point No. 1:

7.It has been contended on behalf of the UPSIC that the proposal/offer given by AHPL had a validity period of one month and with its expiry, it lapsed automatically by the efflux of time and, therefore, no contract pursuant to such offer could have been arrived at between the UPSIC and AHPL. Issue No. 6 in this regard was framed by the court below which after consideration held that the offer of AHPL did not lapse by reason of the efflux of time.

8.The facts on record clearly establish that the offer given by AHPL remained pending for consideration through out and none of the parties ever treated it to have lapsed by efflux of time. Initially, when AHPL gave its offer on 01.02.1996 (Ex. A24), it contained a validity period of one month from its date. This offer stood revised by the AHPL on 02.02.1996 (Ex. A25). Admittedly, the UPSIC thereafter invited AHPL for negotiations vide its communication dated 01.03.1996 (Ex. 4), and pursuant thereto, the AHPL revised its offer on 08.03.1996 (Ex. A26). Not only that, the UPSIC then again vide its communication dated 20.05.1996 (Ex. 8) invited AHPL for further negotiations, which were held on 25.05.1996 and its minutes were prepared by the concerned Committee of the UPSIC (Ex. A19), wherein the recommendations were made to the Board of Directors of UPSIC to accept the offer made by AHPL. The matter of acceptance was then taken to the Board in its 179th meeting held on 02.07.1996 and its copy of agenda (Ex. A20) is on record. Then again, several communications were sent by AHPL to the UPSIC to take the decision and finally, the matter of the acceptance of the offer of AHPL was taken to the Board of the UPSIC in its 181st meeting held on 28.12.1996 and a copy of the agenda is on record being Ex. A23. A decision was taken in said meeting also to accept the offer of AHPL and the copy of the resolution so passed in the said meeting of the Board of Directors of the UPSIC is Ex. A1. Finally, AHPL was informed about the acceptance of its offer vide communication dated 27.02.1997, which is Ex. A16 on record. The said acceptance was acknowledged unconditionally by AHPL vide its communications dated 28.02.1997 (Ex. A11) and dated 12.05.1997 (Ex. A12). All these documents on record categorically prove the fact that the offer, which was made and revised by AHPL remained pending for consideration all throughout the period and neither AHPL nor the UPSIC ever treated the offer to have lapsed by the efflux of time. If the UPSIC were to treat the offer of AHPL as having lapsed, there was no occasion for the UPSIC to seriously consider the offer of AHPL and taking the matter of its acceptance to its Board meeting twice on 02.07.1996 and 28.12.1996. Further, AHPL also by its conduct of the constant communications with the UPSIC and the participation in the negotiations waived the initial limitation of one month which it mentioned, for its own benefit, in its initial offer dated 01.02.1996.

9.Accordingly, the argument raised on behalf of, the UPSIC to that effect that the offer of AHPL lapsed by reason of the efflux of time is devoid of any substance. In fact, the offer of AHPL remained pending and was finally accepted by the UPSIC.

Point No. 2:

Another contention raised on behalf of the UPSIC is that the alleged contract between the UPSIC and AHPL was in respect of an immoveable property which required its compulsory registration under the provisions of Sec. 17(2)(v) of the Registration Act, 1908 and since it was not registered, no decree pursuant thereto could have been passed by the trial court below. As to this contention, the stand taken on behalf of AHPL is that the requirement for the compulsory registration is meant only for a "contract of sale" of an immoveable property and since, in the present case, it was not a "contract for sale" but was a "contract for assignment of leasehold rights" of the suit land, such contract did not fall within the ambit of Section 17 of the Registration Act, 1908.

An examination of the relevant provisions of the Registration Act, 1908 (as applicable to State of U.P.) would show that the contention so raised by the UPSIC is unfounded and de hors the Act. It is not in dispute that the UPSIC is the lessee of the suit land which was given to it on lease by the ADA on 24.09.1992 for a period of 80 years and, as such, the UPSIC is admittedly not its owner but the lessee for a fixed period. Prior to 01.01.1977, there was no statutory requirement in the State of U.P. for compulsory registration of any contract regarding an immoveable property, but such requirement was first time introduced in U.P. by an amendment made by the U.P. Act. No. 57 of 1976 which amended Section 17(2)(v) of the Registration Act. A perusal of Section 17 of the Act would show that while its subsection (1) enumerates the documents requiring compulsory registration, its subsection (2) provides for the exceptions, but its subclause (v) (quoted below) specifically excludes a "contract for sale":

"Sec. 17(2)(v). Nothing in clauses (b) and (c) of subsection (1) applies to

(v) any document other than the documents specified in subsection

(1A) other than contract for sale not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immoveable property, but merely creating a right to obtain another document which will, when executed, create, declare assign, limit or extinguish any such right, title or interest; or"

A plain reading of Section 17(1) read with Section 17(2)(v) of the Registration Act would show that the compulsory registration is not required for every contract of transfer of an immoveable property but limited only to a "contract for sale".

Now the question arises, what is a "sale"? The expression "sale" is a term defined in Section 54 of the Transfer of Property Act, 1882 (in brief, the "T.P. Act"), which means

"Sale is a transfer of ownership in exchange for a price paid or promised or partpaid and partpromised."

In Section 54, the "contract for sale" has also been defined as

"A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property".

As against the above definition of sale, the term "lease" is also defined in Section 105 of the T.P. Act as under:

"A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms."

In view of the above statutory provisions, for a contract for sale, it is essential that it should be a contract by an "owner" of a land to transfer his ownership rights and, therefore, a lessee cannot enter into a contract for sale, in as much as the transfer of ownership rights qua the lessee rights are two distinct transactions. In view of this statutory backdrop, since the UPSIC is a lessee of the suit land, the contract made by it with AHPL for transfer of its lease rights could not be termed to be a "contract for sale" and required no compulsory registration.

In this connection, the decision of the Supreme Court in Mohd. Noor & ors. v. Mohd. Ibrahim & ors., AIR 1995 SC 398 is also relevant, wherein it was clearly laid down that the transfer of ownership was different than the transfer of an interest of a property as a lessee. In its paragraph no. 5, it was held:

"..........A tenant under various legislations either urban or rural property, agricultural or otherwise, enjoys right of heritability and transferability. At the same time, he does not become owner of the property. Transfer of ownership is distinct and different from transfer of interest in the property. A licensee or even a tenant may be entitled by law to transfer his interest in the property but that is not a transfer of ownership. For instance, a lessee from a corporation to a local body or even State Government to raise building may have heritable and transferable right but such a person is not an owner and the transfer in such a case is of his interest in the property and not the ownership...... "

In view of the above, the argument raised on behalf of UPSIC regarding the unenforceability of the contract of transfer of leasehold interest of the suit land for want of its compulsory registration under Section 17 of the Registration Act has no legal force and deserved rejection. The Trial Court below also vide paragraph nos. 25 & 26 of the impugned judgment rightly rejected this plea and the same is maintained.

Point No. 3:

The another argument raised on behalf of UPSIC is that the alleged contract between UPSIC and AHPL was contingent in its nature as UPSIC has only leasehold interest in the suit land which could not have been assigned to AHPL without the prior permission of the lessor i.e. ADA.

A contingent contract, vide Section 31 of the Indian Contract Act, 1872 is "a contract to do or not to do something, if some event, colateral to such contract does or does not happen". Vide Section 32 of the said Act, the contingent contracts "cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void."

In the present case, UPSIC (as lessee) applied to ADA (as lessor) for the grant of its permission to transfer its leasehold interest in the suit land to a third party, which was granted to it vide its communication dated 28.08.1997 (Ex. A33) subject to a payment of a sum of Rs. 29,74,154/. This fact was also reiterated in the evidence by the witness, Anwar Hussain Qureshi (DW2). As such, since in the present case, ADA accorded its permission/NOC to UPSIC as above, the question of the contract being contingent did not arise. Even otherwise, the Court is always competent to direct the transferor to do all things necessary to give effect to and effectuate his contractual obligations including obtaining necessary permissions and sanctions.

The decision of Hon''ble Supreme Court in Mrs. Chandnee Widya Vati Madden v. Dr. C.L. Katial & ors., AIR 1964 SC 978 may also be usefully referred to wherein the Trial Court refused the relief of specific performance of the contract on the ground that the agreement was inchoate as the previous sanction of the Chief Commissioner to the proposed transfer was not obtained. The High Court, on appeal, came to the conclusion that agreement was a completed contract for sale of the suit property subject to the sanction of the Chief Commissioner. The Supreme Court, while upholding the High Court''s judgment, held:

"The main ground of attack on this appeal is that the contract is not enforceable being of a contingent nature and the contingency not having been fulfilled. In our opinion, there is no substance in this contention. So far as the parties to the contract are concerned, they had agreed to bind themselves by the terms of the document executed between them. Under that document it was for the defendantvendor to make the necessary application for the permission to the Chief Commissioner. She had as a matter of fact made such an application but for reasons of her own decided to withdraw the same." (pr. 4)

It was also held:

"In this view of the matter, the High Court was entirely correct in decreeing the suit for specific performance of the contract. The High Court should have further directed the defendant to make the necessary application for permission to the Chief Commissioner, which was implied in the contract between the parties." (pr. 5)

In view of the facts on record and also the salutary principle laid down by the Hon''ble Supreme Court in Mrs. Chandnee Widya Vati Madden (supra), the contention of the appellant about the contingent nature of the contract is wholly unfounded and has no legal force. The Trial Court, vide paragraph no. 15 of the impugned judgment, also rightly took the view that the contract was not contingent in its nature. The contention of the appellant deserves rejection and is, accordingly, rejected.

Point No. 4:

The other contention on behalf of UPSIC that it could not be compelled to obtain the ''No Objection Certificate'' from ADA as the amounts payable to ADA for obtaining such certificate to transfer its leasehold interest to AHPL and for seeking extension of time for construction were liable to be borne by AHPL and not by UPSIC and the contrary view taken by the Trial Court below is unsustainable.

A perusal of the overwhelming number of documents on record would clearly prove that UPSIC was bound to have obtained the requisite permissions/No Objection Certificate and the liability in that regard was that of UPSIC. The Court below, while deciding Issue No. 2, also recorded its clear finding of fact to the above effect.

Significantly, when AHPL gave its initial offer on 01.02.1996 (Ex.A2), it was admittedly mentioned therein that such charges payable to ADA, would be borne by UPSIC. Such condition was reiterated by AHPL in its revised offers dated 02.02.1996 (A25) and 08.03.1996 (Ex. A26). The copy of the minutes of the Committee (Ex. A19) of the UPSIC, which held negotiations with the tenderers including AHPL on 25.05.1996 also stated that AHPL expressed its inability to change its terms and conditions. When this matter was placed for consideration before the Board of Directors of UPSIC on 02.07.1996 vide agenda Item No. 18 (Ex. A20), a calculation was placed clearly depicting that the charges to the ADA were payable by UPSIC and this own document of UPSIC is conclusive and clinching in its nature. Again, when the offer of AHPL was taken to the Board of Directors of UPSIC for its consideration on 28.12.1996 vide agenda Item No. 11 (Ex. A23), a resolution was passed to accept the offer of AHPL and its copy has been produced by UPSIC being Ex. A1. In the said resolution, the Board of Directors of UPSIC did not mention that the amounts payable to ADA were to be borne by AHPL. In fact, the acceptance of the bid and offer of AHPL was without any such stipulation or condition. The Board further gave certain internal directions for making efforts for the reduction/waiver of the charges payable to ADA. again confirming the unconditional acceptance of the offer of AHPL as to the liability of payment of charges to ADA. Finally, when the letter of acceptance was given to AHPL on 27.02.1997 (Ex. A16), no such condition was mentioned that AHPL were required to bear such charges. Instead, it was specifically mentioned that the process of the transfer of the suit land would be completed after obtaining NOC from ADA. Moreover, UPSIC also made its efforts including sending numerous communications to ADA to obtain the requisite permission including sending a communication to request the Government on 09.05.1997 (Ex. A15) and finally, UPSIC could get the permission from ADA subject to payment on 28.08.1997 (Ex. A33).

In view of all the above documentary evidence on record, it was crystal clear that the liability to bear the amounts payable to ADA was of UPSIC.

Moreover, it is well settled law that there always exists an implied agreement on the part of a vendor to do all things necessary to give effect to an agreement including obtaining requisite permissions at its own cost to transfer the suit property. In Nathulal v. Phoolchand, 1969 (3) SCC 120, the Hon''ble Supreme Court held:

"Again by virtue of Sec. 70(4) of the Madhya Bharat Land Revenue and Tenancy Act 66 of 1950, Phoolchand not being an agriculturist the land could not be sold to him without the sanction of the State Government. In the absence of any specific clause dealing with this matter, a condition that Nathulal will secure the sanction under Sec. 70(4) after paying the appropriate fee must be implied for it is well settled that where by statute property is not transferable without the permission of the authority, an agreement to transfer the property must be deemed subject to the implied condition that the transferor will obtain the sanction of the authority concerned." (pr. 5)

Similarly, in Rojasara Ramjibhai Dahyabhai v. Jani Narottamdas Lallubhai, (1986) 3 SCC 300, it was categorically held by the Hon''ble Supreme Court:

".....There is always in such contracts an implied covenant on the part of the vendor to do all things necessary to give effect to the agreement, including the obtaining of the permission for the transfer of the property. The principles on which a term of this nature may be implied in contracts are wellsettled.... "

In view of the above, UPSIC''s contention in respect of the point under consideration is unfounded having no substance. UPSIC was liable to have secured the requisite NOC from ADA on payment of necessary charges and the conclusion of the Trial Court in that regard while deciding Issue No. 2 was well reasoned based on documents and is confirmed.

Point No. 5:

On behalf of UPSIC, it was also contended that there existed no concluded and binding contract between UPSIC and AHPL and, therefore, no decree for specific performance pursuant to such alleged contract could have been passed by the Trial Court below. Regarding this point under consideration, the Trial Court framed Issue No. 1, and after exhaustive and analytical examination of the pleadings as well as the evidence on record came to a reasoned conclusion that a concluded contract existed between UPSIC and AHPL vide paragraph nos. 12 to 16 of the impugned judgment.

A detailed consideration and analysis of the entire evidence on record would clearly establish that the contention of UPSIC raised in this Court has no force and as a matter of fact, a binding contract between UPSIC and AHPL stood clearly concluded. In fact, an abundance of convincing documentary evidence is on record to substantiate the fact that a final contract stood concluded arrived with definite terms and conditions.

As the admitted facts would show, UPSIC invited offers for disposal of the suit land by giving wide publicity in the various national daily newspapers on 19.01.1996, 20.01.1996 and 21.01.1996. Pursuant to it, five offers were received by UPSIC including one dated 01.02.1996 (Ex. A2) from AHPL alongwith the requisite earnest money. The price offered by AHPL was Rs. 55,21,000/ which was subject to the condition that all charges, whether transfer charges for grant of permission by ADA or for nonconstruction levy, if payable, to ADA were to be borne by UPSIC. Thereafter, AHPL revised its offer on 02.02.1996 (Ex. A3) by raising the price to Rs. 72,51,000/ and maintaining other terms of its initial offer. Then, UPSIC invited all five tenderers for further negotiations vide communication dated 01.03.1996 (Ex. 4) and the representative of AHPL and other tenderers appeared before the Committee constituted for that purpose by UPSIC on 08.03.1996. On that date, AHPL further revised its offer by increasing it to Rs. 75,11,000/ which worked out to Rs. 12,391/ per sq. mtr. and also agreed to pay the consideration at one time on the terms and conditions mentioned in the communication dated 08.03.1996 (Ex. A4). AHPL then also sent its communication to the UPSIC on 10.4.1996 (Ex. A5). UPSIC thereafter, sent its communication dated 20.05.1996 (Ex. 8) to AHPL and other two tenderers and pursuant thereto the representative of AHPL appeared before the Committee of UPSIC on 25.05.1996. The representative of AHPL explained to the Committee about the reasonableness of the price offered by it and, in turn, the Committee made its recommendation dated 25.05.1996 to the Board of Directors of UPSIC for the acceptance of the offer of AHPL, which is Ex. A19 on record. It is an admitted fact that the offer so made by AHPL was the highest one and no other tenderer offered more than that sum. The recommendations of the said Committee of UPSIC were placed in the 179th meeting held on 02.07.1996 vide agenda Item No. 18 and a copy of the agenda so placed for consideration has been filed by UPSIC before the trial court as Ex. A20. Its perusal would clearly shows that the entire background leading to the disposal of the suit land was stated therein which also specifically mentioned that as per the conditions of the offer of the AHPL, the UPSIC were to bear the levies, if any, payable by UPSIC. A computation to show the amount to be borne for profit sharing with ADA as well as nonconstruction levy were stated and, finally, in the agenda proposal, a request was made to the Board of Directors to grant its permission to transfer the suit land as per the offer and conditions of AHPL. In the said meeting, no decision was taken. AHPL kept pursuing its offer by sending its several communications. This matter was again placed for consideration before the Board of Directors of UPSIC on 28.12.1996 vide agenda Item No. 11 and its copy was placed on record by UPSIC in the Trial Court as Ex. A23. The decision taken thereupon in the said meeting on 28.12.1996 is also on record as Ex. A1. Both of these documents are significant. The agenda proposal placed before the Board of Directors on 28.12.1996 (Ex. A23) would show that a request was made to the Board of Directors to reconsider the proposal which was placed for consideration in the 179th meeting dated 02.07.1996 of the Board of Directors and a request was also made to take a decision in the interest of UPSIC. As such, what was placed for consideration on 28.12.1996 was infact the proposal dated 02.07.1996 wherein the offer including the terms and conditions of AHPL were recommended for acceptance. The Board of Directors of UPSIC, in its meeting on 28.12.1996 resolved after due consideration to transfer the suit land to AHPL for Rs. 75,76,500/. It was also internally directed by the Board that the efforts be made for the exemption from the payment of the nonconstruction levy and the calculation of the profit sharing with the ADA be got made favourably in the mode as indicated therein. After the aforesaid resolution, the communications were sent by the UPSIC to the ADA for exemption of the nonconstruction levy and also for grant of permission on 28.12.1996 and 31.12.1996 which are Ex. B1 & B2 on record. However, the decision of the Board of the UPSIC was not communicated to AHPL and, therefore, AHPL sent its two communications dated 07.02.1997 (Ex. A9) and 20.02.1997 (Ex. A10) to UPSIC. Pursuant thereto, finally, UPSIC sent a communication to AHPL on 27.02.1997 (Ex. A16), clearly mentioning therein that the Board of Directors of UPSIC in its meeting on 28.12.1996 has granted its approval to the tender of AHPL for transfer of the suit land for a sum of Rs. 75,77,125/at the rate of Rs. 12,500/ per sq. mtr. After obtaining ''No Objection Certificate'' from ADA for transfer of this plot, the process of its transfer would be completed on the payment of the remaining amount after adjustment of the earnest money. The terms of this communication dated 27.02.1997 (Ex. A16) are unequivocal and unambiguous. It clearly refers to the grant of the approval to the tender of AHPL by the Board of Directors on 28.12.1996. It also mentioned the total amount payable for the suit land, besides mentioning that it would be transferred after obtaining the ''No Objection Certificate'' from ADA. It nowhere required AHPL to obtain any ''No Objection Certificate'' from ADA or to bear the charges in connection thereto. AHPL unconditionally acknowledged and confirmed the receipt of the above communication dated 27.02.1997 by sending its communication dated 28.02.1997 (Ex. A11) and further by its communication dated 12.05.1997 (Ex. A12). It may be mentioned that since there was variation of price, as was offered by AHPL, the said acceptance dated 27.02.1997 (Ex. A16) under law amounted to a counter offer. Since AHPL absolutely and unconditionally confirmed the acceptance of the aforesaid counter offer by its communication dated 28.02.1997 (Ex. A11) and 12.05.1997 (Ex. A12), a contract stood concluded which bound the parties, namely, UPSIC and AHPL with definite terms and conditions. All these facts also stood confirmed by the communication dated 09.05.1997 (Ex. A15) which was sent by the Managing Director of UPSIC to the Government. It referred to the approval by the Board of Directors in its 181st meeting on 28.12.1996 and also the letter of acceptance given to AHPL on 27.02.1997. From the review examination and analysis of the various documents, communications, personal negotiations and the conduct of the parties, it could be easily inferred that the parties intended to bring into existence a mutually binding contract, which clearly came into existence.

On behalf of UPSIC, it was contended that UPSIC was not competent to transfer the suit land without prior approval of the State Government in view of the stipulation in Article 125 of its Article of Association. Such contention is again wholly unfounded and bereft of any substance. The aforesaid communication dated 09.05.1997, which was filed by UPSIC in the Court below as Ex. A15, clearly mentioned to the meeting dated 13.09.1996 of the Government wherein it was decided that if maximum price was obtained from any private party, the Board of Directors after consideration would transfer the suit land to it. The said recital in the above communication dated 09.05.1997 ex facie belies the contention of UPSIC that any permission of the Government was needed to transfer the suit land to AHPL. The Board of Directors of UPSIC resolved to transfer the suit land on 28.12.1996 only after the Government permitted it on 13.09.1996. UPSIC cannot take any such stand in view of the above communication dated 09.05.1997.

In this connection, additionally, it may be noted that Sunil Chauhan (DW1) who is the Superintending Engineer is working in UPSIC since year 1987 and was looking after the suit property and the matter connected therewith. He admitted in clear terms in his crossexamination that UPSIC never mentioned in its communications dated 01.03.1996 (Ex. 4), 20.05.1996 (Ex. 8) and 27.02.1997 (Ex. 20) which were sent by UPSIC to AHPL about the requirement of any permission of the State Government. He further expressed his inability to mention any document wherein AHPL was also apprised of the requirement to obtain the permission from the Government. He further showed his ignorance as to whether UPSIC was in possession of any document which could mention that the need of any approval of the Government was also orally communicated to AHPL or its representative. He also could not tell that the requirement of such approval was even mentioned in the advertisements for disposal of the suit land. No such advertisement was also placed on record leading to an adverse inference that such requirement of approval was not mentioned therein. Not only this, DW1 further admitted that neither in the counter affidavit (Paper No. 120CEx. 43) filed on behalf of the UPSIC in the High Court in Writ Petition No. 41103 of 1997 nor in the affidavit (Paper No. 22C) filed before the Trial Court to oppose the injunction application, any such need of Government''s approval was mentioned. All these facts on record clearly established that UPSIC never communicated to AHPL about the requirement for any approval of the State Government to transfer the suit land.

In this regard, the statement made on behalf of AHPL by Inder Chand Jain (PW1) is also relevant. He stated on oath in paragraph no. 44 of his statement that UPSIC never intimated to AHPL that it was not authorized to transfer the suit land and AHPL took the conduct and the actions of UPSIC naturally and in good faith. AHPL always believed without any doubt and in good faith that UPSIC was competent and authorized to approve its offer and to transfer the suit land in its favour. The communication dated 09.05.1997 was also referred to by PW1. Importantly, the statement of the PW1 on the above Court remained uncontroverted for want of any crossexamination. The uncontroverted statement of Inder Chand Jain (PW1) coupled with the statement of Sunil Chauhan (DW1) hence proved to the hilt that AHPL acted in a bona fide manner and in good faith and it believed that UPSIC was competent and authorized to transfer the suit land in its favour. It is well settled law that the issue of an approval under these circumstances under the Articles of Association of UPSIC would be a matter of its Indoor Management and AHPL could not be subjected to any prejudice or disadvantage, since UPSIC failed to apprise AHPL for the requirement of any such approval and AHPL acted in good faith and in bona fide manner and from the conduct of UPSIC rightly inferred that the Board of Directors of UPSIC was competent and authorized to transfer the suit land to it and to enter into contract in its respect. It may be mentioned that the doctrine of Indoor Management of a company is based on justice, equity and good conscience and also on the general principles of law and practical presumption of regularity. It is well known that the details of the internal procedure of a company are not open to public inspection and what may or may not taken place within the doors of a company that are closed to an outsider could not be presumed to be known to him. Undoubtedly, the wheels of commerce would not go rounds smoothly if persons dealing with the companies were compelled to investigate thoroughly its internal machinery to see and embark an enquiry whether something is not wrong. As such, the doctrine of Indoor Management would also come to rescue to AHPL. in the entirety of the facts, the doctrine of Indoor Management and particularly in view of the communication dated 09.05.1997 (Ex. A15), the conclusion of the contract between UPSIC and AHPL could not be assailed on any such ground of want of approval of the State Government. It seems unreasonable on the part of UPSIC, which in its own document i.e. the communication dated 09.05.1997 mentioned about the Government''s approval dated 13.09.1996 but took a contrary stand in this Court.

Lastly, in the context of whether a contract stood concluded or not, it may also be relevant to reproduce paragraph no. 47 of the counter affidavit of Sunil Chauhan (Ex. 43) which was filed on behalf of UPSIC in this Court in CMWP No. 41103 of 1997, which reads as under:

".....the communication dated 27.2.1997 was an independent offer from the Corporation to the petitioner and since the offer had been accepted by the petitioner for a consideration of Rs. 75,77,125/ being the sum totally independent of any of the consideration of his earlier offer, therefore, the petitioner is now responsible for nonperformance of the contract and the Corporation will not loose its right under the contract. Thus, the petitioner will have to deposit Rs. 75,77,125/ with the Corporation and also to seek "No Objection Certificate" from Agra Development Authority.

The above categorical stand taken by UPSIC before this Court was that a contract stood concluded though UPSIC frivolously disputed its liability to pay the charges to ADA. UPSIC cannot be permitted to take any stand as to the conclusion of the contract contrary to one taken by it before this Court in the year 1997.

It would not be also out of context to mention that the CMWP No. 41103 of 1997 was filed by AHPL in this Court, which was disposed of vide judgment made on 21.02.1998 (Ex. 44). The view taken was that the writ petition "involved disputed question of fact" which was considered to be beyond the scope of the writ jurisdiction and, therefore, this Court felt "it wise to leave the question open and do not propose to undertake the exercise to decide the question" and did not "like to interfere in the matter at that stage". As such, the above decision was not on merits and did not adjudicate the rights and liabilities of the parties. The SLP (C) No. 5671 of 1998, filed against the above judgment of this Court, was also dismissed as withdrawn on the application of AHPL by the Supreme Court vide its order dated 30.04.1998 (Ex. 38). Thereafter, the suit being O.S. No. 306 of 1998 was filed by AHPL in the Court below. The above judgment dated 21.02.1998 of this Court or the order dated 30.04.1998 of the Supreme Court had no bearing on the issue of conclusion of the contract between the parties and its enforcement.

Further, it may also be relevant to mention that after conclusion of the contract between the parties in February, 1997, none of the parties (i.e. UPSIC and AHPL) ever insisted upon execution of a formal document of a contract and since a binding contract stood concluded by the exchange of letters, it in law bound UPSIC and became enforceable on a suit of specific performance at the instance of AHPL. The trial court below rightly decided the Issue No. 1 in favour of AHPL and against UPSIC regarding the conclusion of the contract and the findings of fact recorded is based on correct and sound appreciation of facts which in all fairness and the entirety of the facts is confirmed.

Point No. 6:

The next point for determination is whether AHPL has always been and still ready and willing to perform its part of contract according to the true construction of the contract? AHPL, in paragraph no. 28 of the plaint, specifically averred that it "has always been and still is ready and willing to perform its part of contract according to the true construction of the contract". The Trial Court thereupon framed Issue No. 4 and recorded its finding of fact in favour of AHPL. An examination of the documents on record would show that the finding so recorded by the Trial Court is well reasoned which calls for no interference by this Court. In fact, it has been proved beyond any doubt that AHPL had the financial capacity and resources to pay the agreed consideration and has also always been willing to perform its part of contract.

The record would show that before the Trial Court, AHPL filed its Audit Reports for the year ending on 31.03.1998 and 31.03.1999 as Ex. 52 and 56 respectively. The letters of Directors, being Ex. 59 to 67 were also produced, which proved their preparedness to finance AHPL to provide it the necessary funds. AHPL also filed an undertaking in its favour of M/s Anna Finance Ltd. vide Exhibit No. 58 and PW2 also deposed before the Court below to substantiate it. Inder Chand Jain (PW1), on behalf of AHPL, stated on oath about their readiness and willingness vide paragraph nos. 33 to 41, which remained uncontroverted. In view of all these documents and the depositions of PW1 and PW2, the readiness and willingness of AHPL stood duly proved. It may also be mentioned that AHPL approached this Court in its writ jurisdiction by filing CMWP No. 41103 of 1997 and then filed SLP (C) No. 5671 of 1998 before the Supreme Court for enforcing the contract. After disposal of the SLP on 30.04.1998, AHPL with its promptitude filed its suit for specific performance on 13.05.1998. This established the readiness willingness of AHPL for performance of its part of contract.

The record would further show that there is no contrary document on record to indicate that AHPL ever failed to perform its part of contract and rather it was UPSIC which wrongly refused to transfer the suit land in favour of AHPL on false pretext.

Further, the law is wellsettled that a plaintiff is to establish its capacity to pay the sale consideration and it is not necessary for him that he should always carry the money with him from the date of suit till the date of decree. It is also settled that a purchaser can be called upon to pay the balance of agreed consideration only after the seller performs his part of contract. The explanation (i) to Section 16 of the Specific Relief Act, 1963 also stipulates that "where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court". In Nathulal v. Phoolchand, (1969) 3 SCC 120, it was held by the Supreme Court that:

"Phoolchand could be called upon to pay the balance of the price only after Nathulal performed his part of the contract. Phoolchand had an outstanding arrangement with his Banker to enable him to draw the amount needed by him for payment to Nathulal. To prove himself ready and willing a purchaser has not necessarily to produce the money or to vouch a concluded scheme for financing the transaction." (pr. 6)

Similar view was again expressed by the Supreme Court in Sukhbir Singh & ors. v. Brij Pal Singh, AIR 1996 SC 2510, wherein it was stated that ".....It is sufficient for the respondents to establish that they had the capacity to pay the sale consideration. It is not necessary that they should always carry the money with them from the date of the suit till date of the decree...."

In fact, the stage of payment of the balance price never arose in this case as UPSIC failed to obtain the requisite ''No Objection Certificate'' from ADA and AHPL was never called upon to pay the amount to UPSIC and no document has also been filed by UPSIC that it ever asked AHPL to pay money.

In view of the forgoing, the finding recorded by the Trial Court while favourably deciding the Issue No. 4 about AHPL''s readiness and willingness to perform its part of contract was well reasoned and is maintained.

Point No. 7:

The last point for consideration is whether the Trial Court rightly exercised its discretion to decree the suit of AHPL against UPSIC for specific performance of the contract? The Trial Court dealt with this question in Issue No. 10 framed by it and after due consideration of all facts, circumstances, judicial pronouncements and evidences on record exercised its discretion in favour of AHPL to decree the suit vide paragraph no. 32 to 35 of the impugned judgment. Such finding recorded by the Trial Court were based on relevant and cogent evidence and no circumstance or document has been pointed out which could vitiate such reasoned finding.

It cannot be also said that payment of compensation in money could be adequate relief for the breach of a contract to transfer the suit land. In this context, Explanation (i) to Section 10 of the Specific Relief Act, 1963 is also relevant which envisages that "unless and until contrary is proved, the Court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money." UPSIC failed to bring any evidence on record to rebut this statutory presumption and to prove otherwise. Moreover, UPSIC which entered into a contract with AHPL ought to be not allowed to avoid its performance to suit its own convenience. UPSIC also never pleaded to give such compensation in its W.S. AHPL also did not claim any compensation and, therefore, the statutory bar of Section 21 (5) of the Specific Relief Act against award of compensation also applied.

The Trial Court gave its anxious consideration while exercising its discretion and kept in its mind the judicial principles alongwith the statutory provisions of Section 20 of the Specific Relief Act. The Trial Court rightly took into consideration the circumstances of the case, the conduct of the parties and their respective interest under the contract and was satisfied that it was equitable to make a decree of specific performance in favour of the plaintiffAHPL and no reason exists to interfere with the sound exercise of discretion of the Trial Court.

None of the circumstances, as mentioned in Section 20(2) of the Specific Relief Act also existed so as to deny the relief of the specific performance of the contract. It cannot be said that AHPL was given any unfair advantage over UPSIC as both the parties were always on equal footing. UPSIC invited offers after giving wide publicity in the national newspapers in February, 1996 and the offer of AHPL was highest after several rounds of negotiations. The matter was considered by the Board of UPSIC twice on 02.07.1996 and 28.12.1996 and then a conscious and well considered decision was taken by the Board of Directors of UPSIC on 28.12.1996 as to the fair market value of the suit land and also to the various terms and conditions of contract. In particular, it may be mentioned that UPSIC itself enquired from ADA about the reserved price of the auction of the similar lands situated in Sanjay Place at Agra which confirmed the reserved price to be Rs. 12,500/ per sq. mtr., as is evident from perusal of the List of Interrogatories (paper no. 232C) and its answer (paper no. 241C) furnished by ADA. Further, several advertisements which were put in the newspapers by ADA to auction the plots in the year 1995 and 1996 are on record of the Trial Court, being Ex. 69 to Ex. 76, which showed that ADA advertised to auction its several plots in Sanjay Place Scheme. The reserved price for such auctions in the year 1995 and 1996 was Rs. 11,391/ and Rs. 12,500/ per sq. mtr. respectively but no bidder, even at the said reserved price, could take any plot except plot no. E14/6 at Rs. 11,412.50 per sq. mtr., as is clear from the answer to the interrogatories (paper no. 232C).

In view of the above facts, it is evidently clear that the price of the suit plot @ Rs. 12,500/ per sq. mtr. was ex facie fair, reasonable and adequate at the time of the conclusion of the contract and it could not be said that AHPL had any unfair advantage over UPSIC. On the contrary, it is unfair for UPSIC not to transfer the suit plot to AHPL which led to avoidable litigation and AHPL had to approach the Court.

Explanation 1 to Section 20 of the Specific Relief Act is also relevant which lays down the statutory policy that mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature shall not be deemed to constitute an unfair advantage or hardship. Further, the Explanation 2 clarifies that the question of hardship would be determined with reference to the circumstances existing at the time of the contract. As UPSIC took a decision to transfer the suit plot after due consideration, the question of any unforeseen hardship to UPSIC would not arise. It may also be mentioned that subsequent auction by the UPSIC of the suit plot was made on 30.3.1998 i.e. after the expiry of the period of more than one year of the conclusion of the contract in question and any such auction or bid therein at an higher rate would not adversely affect the enforceability of the contract which stood concluded much earlier in February, 1997. In all fairness, such concluded contract could not be defeated by any subsequent auction or a price rise.

It is no more in dispute that AHPL has always been ready and willing to perform its part of contract and the law, justice, equity and good conscience was in favour of AHPL but UPSIC grossly failed to perform its part. AHPL approached this Court by filing its Writ Petition (CMWP No. 41103 of 1997) and also the Supreme Court by filing SLP (C) No. 5671 of 1998. After its disposal on 30.04.1998, AHPL with expediency and promptitude instituted the Original Suit No. 306 of 1998 on 19.05.1998 after paying a huge amount of Court fee of more than Rs. 6 lacs. In view of above, the discretion exercised by the Trial Court to decree the suit for specific performance was based on sound principles of law, justice and equity and does not call for any interference by this Court in appeal.

Keeping in view of the forgoing facts, circumstances, evidence and the case law cited above, the appeal filed by UPSIC merits dismissal and is accordingly dismissed with cost throughout to the respondent no. 1.