R. C. Chandiok vs Chuni Lal Sabharwal

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1970 Supreme(SC) 411

SUPREME COURT OF INDIA
J.C. SHAH AND A.N. GROVER, JJ.
Ramesh Chandra Chandiok and another, Appellants
Versus
Chuni Lal Sabharwal (dead) by his legal representatives and others, Respondents.
Civil Appeal No. 1776 of 1966, D/- 12-10-1970.
Advocates appeared
Mr. Bishan Narain. Sr, Advocate, (Mr B. P. Maheshwari, Advocate, with him) for Appellants: Mr. N. N. Keswani, Advocate: for Respondent No. 2; Mr. C. B. Agarwala, Sr. Advocate, (Mrs. Urmila Kapoor,, Advocate, with him) for Respondent No. 3.

Advocates:
B.P.MAHESHVARI, BISHAN NARAIN, C.B.AGARWAL, N.N.KESHVANI, URMILA KAPUR

Headnote:
Contract - Agreement - Decreed - Appeal by special leave - Appellants entered into an agreement with respondents for purchase of plot No. 8 measuring 1500 Sq. Yds - Contract was evidenced by receipt Exhibit P 6 which was in following terms - Received with thanks from Messrs. sum as earnest money of the purchase money for sale of Plot No. 8 measuring 1500 sq. yds. in B. purchased from Rehabilitation Ministry and owned by Court - balance of shall be paid to Court by them within one month of the execution of this receipt on execution of the sale deed by Court in their favour - It is common ground that aforesaid plot had been allotted by Rehabilitation Ministry to respondents and that its possession was to be delivered after payment of rent of lease money up-to-date and after execution of lease deed - Whether appellants were in a position to pay balance of sale price was after when sanction had been obtained by respondents for transfer of plot from Rehabilitation Ministry– Held, propositions are so well known that no possible exception can be taken to them - In present case, however, above rule cannot apply because appellants had by consistent and unequivocal conduct, made it clear that they were not willing to accept judgment of the trial Court as mcorrect - It was stated in this application that plaintiffs would be preferring an appeal but it would take time to secure certified copies - An appeal was in fact preferred and seriously pressed before High Court on relief relating to specific performance - This relief is discretionary but not arbitrary and discretion must be exercised in accordance with sound and reasonable judicial principles – Court are unable to hold that conduct of appellants, which is always an important element for consideration, was such that it precluded them from obtaining a decree for specific performance - Appeal allowed.

Judgement Key Points

Based on the provided legal document, here are the key points:

The Supreme Court allowed an appeal by special leave regarding a contract for the sale of a plot, reversing the High Court's decision that denied specific performance.
On July 18, 1955, the appellants entered into an agreement with the respondents to purchase Plot No. 8 (1500 Sq. Yds) in Jangpura B, New Delhi, for Rs. 22,500/-, with Rs. 7,500/- paid as earnest money (!) (!) .
The original contract required the balance of Rs. 15,000/- to be paid within one month of the execution of the sale deed by the respondents (!) .
The plot was subject to a lease from the Rehabilitation Ministry, requiring the respondents to obtain government sanction before transferring the property (!) (!) .
On August 11, 1955, the respondents sent a letter acknowledging that the sale deed could not be executed without the Ministry's sanction and agreed to execute it within a week of receiving such sanction (!) .
The respondents later attempted to cancel the agreement in June 1956, claiming uncertainty regarding the sanction, but eventually obtained the sanction on November 20, 1956 (!) (!) .
The appellants had consistently sought to complete the transaction, making inquiries about the sanction and publishing advertisements declaring the existence of the agreement (!) (!) .
The trial court and High Court had held that the appellants were not ready and willing to perform the contract, partly due to a lack of clear funds and the delay in obtaining sanction (!) (!) (!) (!) .
The Supreme Court rejected the finding that the appellants were not ready and willing, noting that the relevant period for fund availability began after the sanction was obtained in November 1956, and the appellants had sufficient means (!) (!) .
The High Court had denied specific performance partly because the appellants had executed the trial court's decree for the refund of earnest money during the appeal (!) (!) .
The Supreme Court held that the appellants could not be said to have "approbated and reprobated" because their conduct (seeking an injunction and pressing the appeal) clearly showed they did not accept the trial court's judgment as correct (!) (!) .
The Supreme Court ruled that the respondents were bound by their own letter of August 11, 1955, to wait for the Ministry's sanction before demanding the balance payment (!) .
The appeal was allowed, and the proper form of the decree was determined to be that indicated in Lala Durge Prasad v. Lala Deep Chand (!) .

Judgment

GROVER, J.:- This is an appeal by special leave from a decree of the Punjab High Court (Circuit Bench, Delhi).

2. On July 18, 1955, the appellants entered into an agreement with the respondents for the purchase of plot No. 8 measuring 1500 Sq. Yds in Jangpura B. New Delhi for Rs. 22,500/-. The contract was evidenced by receipt Exhibit P 6 which was in the following terms;

"Received with thanks from Messrs. Ramesh Chandra Chandiok and Kailash Chander Chandiok the sum of Rs. 7,500/- (Rupees Seven thousand and five hundred only) as earnest money of the purchase money of Rs. 22,500/- (Rupees Twenty two thousand and five hundred) for the sale of Plot No. 8 measuring 1500 sq. yds. in Jangpura B. purchased from the Rehabilitation Ministry and owned by us. The balance of Rs. 15,000 (Rupees Fifteen Thousand only) shall be paid to us by them within one month of the execution of this receipt on the execution of the sale deed by us in their favour." It is common ground that the aforesaid plot had been allotted by the Rehabilitation Ministry to the respondents and that its possession was to be delivered after payment of rent of lease money up-to-date and after execution of the lease deed. The lease deed was actually executed in favour of the respondents on April 21, 1956. Meanwhile on August 11, 1955 the respondents wrote a letter to the appellants as follows:

"With reference to the receipt dated 18-7-1955 executed by us in your favour, acknowledging receipt of Rs. 7,500/- as earnest money for the sale of Plot No. 8 measuring 1500 sq. yds in Jungpura B. owned by us and agreed to be sold to you by us, since it will take about a month more to obtain sanction of the Rehabilitation Ministry, the execution of the sale deed by us cannot be complete without the said sanction, it is hereby mutually agreed between us or orally that the period for execution of the sale deed shall remain extended till the time of the receipt of the said sanction and we hereby confirm the said oral agreement. We will inform you as soon as the said sanction is received and within a week thereof, we will execute the necessary sale deed in your favour and get the same registered against payment of the Balance money. Please sign the duplicate of this letter in confirmation of the said oral arrangement."

A notice dated June 15, 1956 was served by counsel for the respondents on the appellants saying that the balance of consideration according to the terms of the agreement dated July 18, 1955 was to be paid by the appellants and the sale deed was to be got registered within one month of 18-7-1955. It was further stated that extension had been given as desired by the appellants but the balance amount had not been paid. In para 3 it was stated "my clients are not prepared to wait indefinitely and therefore cancel your agreement for want of certainty and hereby give you an offer, without prejudice to their legal rights, to receive back the sum of Rs. 7500/- paid by you as earnest money less the amount of loss suffered by them on account of lease and interest etc. within one week of the receipt of this letter, failing which my clients would be entitled to forfeit the earnest money and treat the agreement cancelled."

3. A reply dated June 22, 1956 was sent by counsel for the appellants in which reference was made to the letter dated August 11, 1955 and it was pointed out that no information had been sent by the respondents about the sanction having been obtained from the Rehabilitation Ministry. The respondents were called upon to obtain the requisite sanction and to execute the sale deed against receipt of balance of purchase money. On July 4, 1956 counsel for the respondents sent a reply saying that sanction had not been granted till then and inquiries made by respondents revealed that it might not be forthcoming for an indefinite period and that it was absolutely uncertain as to when it would be granted. It was claimed that the agreement had become void on account of uncert

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1970 Supreme(SC) 411

Cases Referred (1)