PRAMOD BUILDINGS AND DEVELOPERS LTD Vs. SHANTA CHOPRA

JUDGEMENT

(1.) Leave granted. Heard.

(2.) The respondent entered into an agreement of sale dated 26.10.1988 agreeing to sell her property to the appellant for consideration of Rs.43,50,000/- and received Rs.9,50,000/- as advance. The agreement required the sale to be completed by the intending purchaser by paying the full balance consideration of Rs.34 lakhs within 30 days from the date of issue of a letter/telegram by the intending vendor informing the intending vendee that necessary NOC under Section 269 (UL) of the Income Tax Act, 1961 and Income Tax Clearance Certificate had been received. The agreement further provided that the time was the essence of the contract and it will not be extendable and if the intending vendee fails to pay the balance of Rs.34 lakhs, the entire earnest money of Rs.9.5 lakhs shall stand forfeited. Clause 5 related to property tax and is extracted below:-

(3.) The respondent cancelled the said agreement by notice dated 27.2.1989. However, subsequently the parties entered into a fresh agreement dated 2.5.1989 under which the cancellation was treated as withdrawn and the respondent undertook to execute the sale deed in terms of the agreement dated 26.10.1988 without any change in its terms. The said agreement recorded that the NOC (in Form 371) from the Income Tax authorities had been received. The agreement dated 2.5.1989 provided that on obtaining the Income Tax Clearance Certificate, the vendor should inform the purchaser within one week and within one month thereafter, the sale should be completed by execution of the sale deed and the purchaser should pay the balance amount in the presence of the Sub Registrar. On 16.5.1989, the respondent informed the appellant that the NOC in Form No.37-I and Clearance Certificate in Form No.34-A have been obtained and, therefore, the appellant should pay the balance consideration of Rs. 34,00,000/- within one month from the date of receipt of the said letter and get the sale deed registered. It is not in dispute that in terms of the supplemental agreement dated 2.5.1989, the sale had to be completed by 17.6.1989. It is not disputed that as 17.6.1989 and 18.6.1989 were holidays, the sale had to be completed by 19.6.1989. As the sale was not completed, the respondent alleged that the appellant was in breach and terminated the agreement, by notice dated 22.6.1989. This led to the filing of a suit for specific performance (Suit No.1660/1989) by the appellant in the High Court of Delhi. The main reliefs sought in the said plaint are relevant and extracted below: