( 1 ) PLAINTIFF filed this suit, inter alia, alleging that it is a Banking company having its registered office at Clock Tower, Udaipur (Rajasthan) and a branch office at 82, Janpath, New Delhi. Plaint has been signed, verified and suit instituted by L. N. Sapra (Manager of the said branch) who is the principal officer and also holds power of attorney in his favour. Defendants who are the owners of Plot No. G-39, Green Park, New Delhi, wanted to construct a building thereon. They approached the said branch of plaintiff Bank for grant of loan being short of funds. Bank agreed to advance loan of Rs. 75,000/- to them on the terms and conditions set out in the letter dated 25th August, 1975 salient features of this letter have been given inub-paras (a) to (i) of Para 4 of the plaint. It is further alleged that defendants on 3rd September, 1975 created equitable mortgage of the property to be constructed on said plot G-39, Green Park by depositing title deeds with the said branch of the Bank. Total amount of loan of Rs. 75,000. 00 was received by the defendants from plaintiff by 11th December, 1975. It is stated that a registered lease deed between the parties was executed on 9. 12. 1975 and the Bank agreed to take on rent the entire first floor and mezzanine floor of said property for running a branch therein. Salient features of the said lease deed are incorporated in para 9 of the plaint.

( 2 ) IT is further pleaded that defendants failed to complete the construction and deliver possession of first and mezzanine floors to the plaintiff Bank by the stipulated date which was 30th December, 1975. In the meantime plaintiff also came to know that said portions of property agreed to be let out, could be used only for residential purpose and its use for commercial purpose was an offence under the Delhi Development Act, 1957. Acccordingly, said L. N. Sapra approached the defendants and asked them to approach DDA to obtain permission for use of the said floors for commercial purpose. Instead of obtaining permission for commercial use, the defendants sent a letter which was received by the plaintiff Bank on 10th June, 1976, informing that construction was completed by the date stipulated in said lease deed and the plaintiff Bank was called upon to take possession within 10 days failing which said portions would be considered as having been taken on rent by the Bank. It is claimed that the averments made in the said letter were false to the knowledge of defendants as they never informed the Bank prior to issue of that letter that construction had been completed. Thus, the plaintiff through its Counsel sent a reply dated 22nd June, 1976 denying the averments made in the said letter. Defendants were further informed that after receipt of the said letter, L. N. Sapra alongwith Vinod Verma of M/s. Riviera Traders (P) Ltd. visited the said building on 22nd June, 1976 and it was found that no internal electric wires had been laid nor electric connection provided. Grills too were not provided and mezzanine floor was incomplete. Said two floors thus were not capable of occupation. The defendants were further informed that on enquiries made by plaintiff Bank it had transpired that said two floors could not be acquired for commercial purpose and the assurance given by defendants about commercial use thereof was untrue to their knowledge. Defendants were, therefore, asked to approach the concerned Authorities and obtain certificate that said two floors could be used for commercial purpose. It is stated that defendant No. 1 refused to take delivery of the said letter and same was received back with the report "avoid to take". Said letter sent to defendant No. 2 was initially received by him and he also signed AD in token of having received it but on second thought he scored off his signature on AD and refused to take delivery thereof. Thereafter defendants never intimated the plaintiff Bank that said two floors had been completed in every r