GURDIAL SINGH Vs. PEAREY LAL MALHAN

JUDGEMENT

(1.) This first appeal has arisen out of a suit filed by the respondent for recovery of Rs. 10,300.00 on account of refund of Rs. 10,000.00 paid by him to the defendant-appellant in pursuance to an agreement to sell dated 24th July, 1965 and Rs. 300.00 as interest. The plaintiff paid Rs. 10,000.00 to the defendant-appellant on 24th July, 1965 as per receipt Ex. P-12. According to this receipt the appellant agreed to sell his property at plot No. 8/37, Kaila Colony, New Delhi for a consideration of Rs. 75.000.00 The balance amount was payable before the Sub-Registrar. Initially the parties had agreed to execute the sale deed within 15 days from the date of the said receipt but subsequently the said period was extended to 45 days ending 7th September, 1965. It is not disputed that the time was the essence of the contract. This extension was made by making amendment in the original receipt duly signed by the parties. The plaintiff alleges that he has always been ready and willing to perform his part of the contract but the defendant committed breach of contract and also cancelled the same. The plaintiff, therefore, as already stated, claimed the refund of Rs. 10,000.00 and interest thereon. The trial court by the impugned judgment passed a decree for Rs. 10,000.00 with costs.

(2.) Learned counsel for the appellant submits that the appellant had always been ready and willing to perform his part of the contract. He says that the defendant obtained income-tax clearance certificate, that he vacated the suit property and took another premises for his occupation with a view to execute the sale deed and deliver possession to the respondent. He further says that the plaintiff was not ready and willing to perform his part of the contract and that he was not possessed of Rs. 65,000.00 , the balance of sale consideration for the purchase of the property. The trial court after referring to the evidence on record held that the plaintiff was possessed of funds to pay the balance of sale consideration and get the sale deed executed, that the defendant cancelled the agreement on 6th September, 1965 although the last date for the perfomance of the contract was 7th September, 1965, that the defendant \\as not possessed of a genuine income-tax clearance certificate for getting the sale deed registered, that the breach was committed by the defendant and therefore a decree for Rs. 10,000.00 was passed in favour of the plaintiff-respondent.

(3.) The appellant says that in terms of the agreement of sale he was not required to obtain any income-tax clearance certificate and that the plaintiff committed the breach. The sale consideration is Rs. 75,000.00 and for getting the sale deed registered for a consideration of more than Rs. 50,000.00 the registering officer under the Indian Registration Act is not authorised to register the same unless the income-tax officer concerned issues a clearance certificate as provided in section 230A of the Income-tax Act, 1961. It is correct that in the agreement to sell there is no condition for the production of income-tax clearance certificate but when the parties enter into an agreement to sell and the law prescribes a condition before a document can be registered, the condition prescribed by the statute becomes a part and parcel of the agreement. In other words, it seems that the requirement of section 230A of the Income-tax Act should be deemed to be an implied condition of an agreement to sell between the parties when the sale consideration is more than Rs. 50,000.00 . From the record it appears that the defendant never informed the paintiff that he had applied or obtained the income- tax clearance certificate. Nothing has been brought to my notice on behalf of the appellant to show that any such intimation was ever given by the appellant to the respondent. On the other hand, the case set up by the plaintiff is that the defendant expressed his inability to secure the income- tax clearance certificate on 2nd September, 196^. The defendant, it is alleged therefore suggested that instead of one sale deed two sale deeds be executed one for 3/5th of the house in consideration of Rs. 45,000.00 and the other for 2/5th of the house in consideration of Rs. 30,000.00 . The plaintiff further says that in pursuance of this suggestion he purchased a non-judicial stamp paper for the execution of a sale deed in consideration of Rs. 45)000.00 on 3rd September, 1965 which was handed over to the defendant for getting the sale deed written thereon. The plaintiff further says that the defendant got the sale deed typed out but he got the sale deed of the entire property and not for 3/5th of the house. He further says that the defendant wanted him to pay the balance of the sale price under the table. This was not acceptable to the plaintiff and obviously for the reasons that the property might be acquired under section 269-C of the Income tax Act on the ground that the sale consideration of Rs. 45,000.00 was not a fair market value. There is a dispute between' the parties about the bifurcation of the transaction into two documents. This, however, is not a material dispute for the decision of the present appeal.