1. The plaintiffs filed this suit for specific performance alternatively for damages and declaration stating that the plaintiffs had entered into a contract for sale and purchase of basement and ground floor of property bearing No.N-241, Greater Kailash-I, New Delhi measuring 300 sq. yds. along with a servant quarter at mezzanine floor and 1/3rd terrace rights on the second floor of the property in December 1992 with defendants No.1 to 3, the owners of the property. The negotiations of sale and purchase had started in October 1992. In pursuance of these negotiations the plaintiffs paid a sum of Rs.5 lakh as advance to defendants No.1 to 3. Later on, three agreements to sell were executed between the plaintiffs and defendants on 27.12.1992 containing terms and conditions of the sale. One agreement was in respect of basement executed between Dr.Amulya Chadda, plaintiff No.3, Mrs.Shefali Chadda, plaintiff No.4 AND Mrs.Anvita Oberoi, defendant No.3 for a consideration of Rs.7 lakh. A sum of Rs.4 lakh was paid as advance vide cheque No.738507 dated 27.12.1992. The second and third agreements were executed in respect of the front and rear portion of the ground floor of the property between Brig. J.K. Chadda, plaintiff No.1 AND Smt.Mona Oberoi and Amit Oberoi, defendants No.1 and 2 for a consideration of Rs.7.50 lakh for each portion out of which a sum of Rs.3 lakh each was paid as advance/earnest money as per details given in the plaint.

2. Plaintiffs submitted that the defendants No.1 to 3 were to obtain income-tax clearance under section 230A of the Income-tax Act, 1961 as well as other necessary permissions for executing sale deeds in favour of the plaintiffs. However, defendants No.1 to 3 did not obtain said permissions for a long time. The plaintiffs approached defendants Nos.1 to 3 to know the reasons for not obtaining necessary permissions. The defendants informed them that they required some more money to sort out their income-tax problem and only after the problem got sorted out, they will be able to take permission under section 230A of the I.T. Act. The plaintiffs agreed to advance another sum of Rs.10 lakh to defendants No.1 to 3 provided they hand over vacant and peaceful possession of the basement and one room on the ground floor. Thus another amount of Rs.10 lakh was received by the defendants from the plaintiffs under the aforesaid agreements. At the time of receiving this further amount of Rs.10 lakh, defendants executed a receipt dated 20.2.1993. Out of Rs.10 lakh, Rs.3 lakh was paid by way of cheque and Rs.7 lakh was paid in cash. Thus defendants No.1 to 3 received a total amount of Rs.20 lakh from the plaintiffs against a total consideration of Rs.22 lakh and handed over peaceful possession of the basement and one rear bed room on the ground floor to the plaintiff No.1.

3. It is submitted that the above transaction had taken place through property broker Mr.Prem Bhardwaj and he had witnessed and signed all the documents executed between the parties.

4. Despite obtaining Rs.20 lakh from plaintiffs, defendants No.1 to 3 did not obtain clearance from the Income-tax authority and expressed inability to complete the transaction. On this, the plaintiffs told the defendants No.1 to 3 that in case they were not able to complete the transaction, parties may revoke the agreement and the defendants may refund the amount received by them to the plaintiffs. Plaintiffs made this proposal since a huge amount of Rs.20 lakh was stuck up with defendants No.1 to 3. Thus an agreement was reached between plaintiff No.1 and defendant No.1 on 7.5.1993 that the agreements to sell will stand terminated in case the defendants returned the sum of Rs.20 lakh received by them within 3 days. However, defendants failed to honour this commitment also and did not pay the money back to plaintiffs. The plaintiffs later on learnt that the defendants were trying to negotiate the sale of the property with a third person. To ensure that defe