Agreement in contravention of provisions of the Act is considered to be against public policy and void.

P.K. MISRA, J.

Defendants are the appellants against the judgment and decree of the learned single Judge directing the defendants to execute sale deed. Such suit for specific performance was filed by the plaintiff / respondent, which was a private limited company engaged in the construction of multi-storeyed building flats.

.2. Defendant No.1 is the father (now deceased) and Defendant Nos.2 to 4 are the sons. On the death of Defendant No.1, the other heirs were brought on record as Defendant Nos.5 and 6. The agreement on which specific performance sought for was dated 16. 1980. The extent of schedule property is 8 grounds and 2354 sq.ft. According to the case of the plaintiff, the defendants agreed to sell such property described in the schedule free from all encumbrances for a net price of Rs.5,40,000/-, out of which a sum of Rs.1 lakh was deposited by the plaintiff with Auditor M/s. Venkataraman & Co., and balance of Rs.4,40,000/- was agreed to be paid by the plaintiff to the Syndicate Bank to discharge the loan borrowed by the defendants on the mortgage to the said bank, subject to the said bankers giving certificate of discharge. In the agreement it was further indicated that the defendants should arrange to secure income tax clearance certificate, permission from competent authority under the Urban Land Ceiling Act and such other permits as may be necessary for completing the transaction. It was indicated that the sale transaction should be completed within a period of six months from the date of the agreement, which was subject to the defendants obtaining the necessary clearance certificate from the appropriate authorities and giving vacant possession. Under Clause 10 of the agreement, it was agreed that in the event of any default by the defendants, the plaintiff shall be entitled to without prejudice to the right of specific performance to the refund of the advance of Rs.1,00,000/-and damages. It was further indicated that if the plaintiff commits any default, the defendants shall be entitled to forfeit the advance of Rs.1,00,000/-. It was further stated in the plaint that out of Rs.1,00,000/- deposited with the Auditor under the direction of the defendants, a sum of Rs.65,000/- had already been received by the defendants. It is further averred that the plaintiff was always ready and willing to deposit the balance of sale price before the court to show its bonafide. It was indicated that the defendants were bound to secure income tax clearance certificate and permission from the competent authorities which were pre-requisite for completion of the sale transaction and thereafter to complete the sale transaction in accordance with the terms and conditions. But, the defendants were evading to do so and, on the other hand, trying to alienate the property to other persons ignoring the agreement for sale. The suit was thus filed in the month of February, 1981.

.3. A joint written statement was filed on behalf of the defendants 1 to 3 and a separate written statement was filed by Defendant No.4. The substance of the written statement of the defendants 1 to 3 was to the effect that one G. Narayanasamy, who was a partners of M/s. Venkataraman & Co., and his brother were holding substantial interest in the plaintiffs company. The said auditors, being the auditors of the defendants were in a fiduciary position with the defendants and they did not disclose that they were negotiating or acting on behalf of the company wherein they had substantial shares. At the time of the agreement, Syndicate Bank had obtained a mortgage decree on the suit property for about Rs.7.8 lakhs and until the said sum was paid, the property could not have been sold free of encumbrances. The price offered to the defendants was Rs.1,02,000/- per ground and therefore the allegation that the total consideration was Rs.5,40,000/- was incorrect. While admitting that a sum oif Rs.1 lakh has been kept with M/s. Venkataraman & Co., a sum of Rs.65,000/