JUDGMENT

TARUN CHATTERJEE, J. 1. Leave granted.

2. This appeal by way of a Special Leave Petition has been filed by the appellants to challenge the judgment and decree dated 23rd of February 2002 of the High Court of Andhra Pradesh at Hyderabad in C. C. C. A. no. 88/1993 and A.S no. 673 of 1995, which was filed by the defendants/respondents in so far as the direction given by the trial Court to refund a sum of Rs.1,00,000/- to the plaintiffs/appellants, which they had paid to the defendants/respondents as an advance, was concerned.

3. The relevant facts leading to the filing of this appeal are:-

The dispute in this appeal involves a property marked no. 1-11- 251 in Begumpet, Hyderabad (hereinafter referred to as the ‘property in question ) which was owned by one Rai Bahadur Saheb Pannalal Lahoti. By a Will, he bequeathed all his properties including the property in question and appointed Respondent no. 2 B.M. Bhandari and one Bhima Bai as joint executors of his Will. According to the Will of Rai Bahadur Saheb Pannalal Lahoti, one-fourth of the fund of his estate was to be used for hospitals and educational institutions in equal shares as the executors would deem fit. After the death of Bhima Bai, who was one of the joint executors of the Will, her heirs Govind Bai Vinani and Suresh Chandra Lahoti (Respondents no. 2 and 5 respectively) came into the picture. By a trust deed as per the wishes of the Late Rai Bahadur Saheb Pannalal Hiralal Lahoti, a Charitable Trust by the same name was set up. The trust owned properties in Hyderabad, Andhra Pradesh and Hingoli in Maharashtra. The registered office was in Kolkata, West Bengal.

Respondent no. 2 on behalf of the trust entered into a written contract for sale with appellant no. 1 on 6th of December 1978 agreeing to sell the property in question measuring 9400 sq. yards along with constructions thereon. The contract contained certain terms and conditions. The first of such condition was that Appellant no. 1 would advance a sum of Rs.1 lakh and the rest of the balance amount, i.e., Rs.5 lakhs would be paid by the appellants on or before 5th of June 1979. Under the contract, the appellants also agreed to obtain the necessary permission or exemption from the competent authorities under the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as “the ULC Act”). It was also alleged that the respondents shall cooperate with the appellants in getting all such necessary permissions from the competent authority under the ULC Act. Clause 10 of the Contract emphatically mentioned that time was the essence of the contract. It reads as under:

“”Time will be of essence of the contract.”

4. The said contract also mentioned that in case of failure of the appellants to pay the balance amount within the stipulated time, the respondents would forfeit the balance amount.

5. Thereafter, the competent authority under the ULC Act informed the appellants of being granted exemption provided that the land was continued to be used for the purposes of the trust. Due to such intimation, the Appellants sought clarifications from Respondent no. 2 regarding procurement of permissions from the Endowment Department in a telegraphic notice on 29th of May 1979. This was followed by a registered notice on 31st of May 1979. Respondent no.2 sent a reply to the appellants on 4th of June 1979 without clarifying the doubts raised on procurement of permission from the Endowment Department. In response, the appellants sent a detailed communication to the respondent enquiring about the state of affairs on 5th of June 1979. The respondent no. 2 sent a reply on 6th of June 1979 informing the appellants that there was no requirement of obtaining permission from the Endowment Department as the laws of West Bengal, which were applicable in this case, did not require any particular procedure for alienation of the trust property.

6. Thereafter, the appellants sent a communication enclosing a Photostat copy of a cheq