Manmohan Singh, J.

1. This is an appeal preferred by the appellants (Defendants in CS(OS) No1890/2006) against the order of the learned Single Judge dated 25th March, 2008 dismissing the application filed by the appellants being is No. 4827/2007 seeking rejection of plaint under Order 7, Rule 11 of the Civil Procedure Code (CPC).

2. Briefly stated the facts of the case are that Shri Sajjan Singh was lessee of shop No. 57, Khan Market, New Delhi, the Lesser being the Land & Development Officer (L&DO). Shri Sajjan Singh, executed a registered will dated 25th June, 1964 at Bangkok bequeathing the above said property in favor of his son Shri Avtar Singh Narula, appellant No. 1. Appellant No. 2, Surender Singh Manchanda is an attorney of appellant No. 1. Shri Sajjan Singh died on 11th April, 1966 and left behind two more sons and a daughter besides appellant No. 1/ Shri Avtar Singh Narula.

3. Appellant No. 2 on the basis of power of attorney entered into an agreement to sell dated 25th March, 2004 of property bearing Shop No. 57-B situated at Khan Market, New Delhi measuring 59.5 sq. yds. (hereinafter referred to as suit property) with the respondents for a sum of Rs. 50 lakhs, and respondents paid Rs. 2.50 lakhs by cheque and Rs. 2.50 lakhs in cash to the appellants as initial payment. As per the agreement to sell a further sum of Rs. 20 lakhs was to be paid by the respondents to the appellants within two months from the date of mutation of the said property in the name of appellant No. 1. The balance sum of Rs. 25 lakhs was to be paid by the respondents to the appellants at the time of execution of the regular sale deed after obtaining sale permission from the L&DO. The relevant Clauses 2 and 7 of the agreement to sell are reproduced below:

Clause 2

A further sum of Rs. Twenty Five Lakhs will be paid by the Second party (i.e plaintiffs) to the attorney of the First party (i.e defendant No. 2) within two months from the date of mutation of aforesaid property in the record of L&DO in the name of S. Avtar Singh Narula, for which the First Party (defendant No. 2) has already applied.

The balance sum of Rs. 25 laksh (figures scratched) will be paid by the Second Party (plaintiffs) to the attorney of the First Party at the time of execution of the registration of regular sale deed after obtaining the permission in respect of sale.

Clause 7

That in case the mutation of aforesaid property is not sanctioned by the Land and Development Office, Nirman Bhavan, in the name of S. Avtar Singh Narula due to any reason within Sixty days then the bargain/agreement shall stand cancelled and the attorney of the first party will be liable to return the advance amount of Rs. 5,00,000/- (Rs. Five lakhs) only to the second party immediately within seven days from the date this fact comes to the notice and then this agreement will be destroyed in the presence of both the parties.

4. In the suit filed by the respondents, it was stated that a legal notice dated 2nd September, 2006 issued by Shri K.C. Bajaj, Advocate for the appellants sought to rescind and cancel the agreement to sell dated 25th March, 2004 relying on Clause 7 of the agreement to sell. Along with the said notice, the appellants also returned two demand drafts for a sum of Rs. 2.5 lakhs each.

5. It was alleged by the respondents that the appellants cannot unilaterally cancel the agreement to sell without informing the respondents, the appellants are trying to sell the suit property to somebody else at a higher price and trying to wriggle out of their contractual obligations. It is the appellants who have failed to perform their part of contractual obligations in not obtaining the mutation of the suit property from the L&DO or sanction for permission for sale from L&DO.

6. It is also stated by the respondents that they were always ready and willing to perform their part of the contractual obligations and were always in a position to arrange the balance sale consideration of Rs. 45