KISHANLAL ONKARDAS GOYANKA Vs. SURYADATTA GOVINDLAL

JUDGEMENT

(1.) THIS is defendant's appeal from a decision of the Additional District Judge of mandsaur decreeing the claim of the plaintiff respondents Suryadatta and bhupatrai for the refund of a part of the consideration money paid by them in respect of a contract for the sale of a ginning factory together with the land attached to it belonging to the defendants.

(2.) THE plaintiffs' case was that in December 1946, the defendants issued a notice (Ex. P/1) that their ginning factory, known as Laxmivillas Ginning Factory situated at Piplia together with lands attached to it and machinery, would be auctioned on 19-1-1946; that in response to this notice, the plaintiffs made an offer for purchasing the property for Rs. 47000/-; that the offer was accepted on 19-11946, and the plaintiffs paid Rs. 11000/- to the defendants as a part of the price by a draft on the Laxmi Bank Ltd. , Akola. The plaintiffs further averred that it was agreed between the parties that the sale would be completed and registered soon; that accordingly they, that is the plaintiffs, went to Piplia in the months of July and October, 1947 for the registration of the sale deed, but on account of the negligence and laches of the defendants the deed could not be registered; that in October 1947 they learnt that as the land on which the factory stood was agricultural land, it could be sold only to a bona fide agriculturist, and that too with the previous sanction of the competent revenue authority; that the defendants did not disclose this fact to the plaintiffs who were not agriculturists; and that while the notice (Ex. P/1) gave the area of the land to be sold as fourteen acres, the land which was actually being sold to the plaintiffs was only six acres. It was further stated that when the registration of the deed was held up for want of sanction, the defendants assured the plaintiffs that they would obtain the necessary sanction, but despite this assurance the defendants did not take early and vigorously such steps as were necessary to obtain the sanction for the sale of the land; and that ultimately an application which the defendants had filed before the Suba for sanction was dismissed on 28-11-1949, due to their negligence and default of appearance. The plaintiffs proceeded to say that time was of the essence of the contract and as the defendants have failed to complete the sale within a reasonable time, they were compelled to cancel it; and that the contract was in any case void for want of sanction of the competent authority for the sale of the land. On these allegations, the plaintiffs claimed that the defendants had committed a breach of the contract and were under an obligation to return with interest the amount of Rs. 11000/paid to them as part of the purchase money. The plaintiffs claimed Rs. 2970/- as interest on Rs. 11000/- from 30-12-1946, till the date of the institution of the suit at the rate of nine per cent per annum. A claim for interest from the date of the suit was also made.

(3.) THE defendants admitted the contract for the sale of the ginning factory and the land attached to it. They, however, resisted the suit on the grounds that the notice (Ex. P/1) was not the basis of the contract; that the terms of the contract were oral and not reduced to writing that there was no agreement that land of particular acreage would be sold to the plaintiffs; that it was not necessary for the defendants to inform the plaintiffs that the sale of the land required the previous sanction of the revenue authorities and that this was a matter of public record and it was for the plaintiff's to get themselves informed of it. In the written statement, which the defendants filed to the amended plaint, they denied that the land was agricultural land or that the sanction of the Suba was required for its sale or that the plaintiffs were non-agriculturists. The defendants also denied that the contract was void. The defendants pleaded that they did all they could do in the matter of obtaining sanction; that their application for sanction, which was dismissed for default of appearance on 28-11-1948, was restored again, but in the proceedings after the restoration the plaintiffs themselves created obstacles in obtaining the sanction and ultimately declared that they did not want to take part in those proceedings or purchase the land; and that it was on account of this attitude of the plaintiffs that the revenue authorities refused to sanction the transaction and the sale could not be completed. The defendants further suggested that the amount of Rs. 11000/- was paid to them not as a deposit or a part of the purchase money, but as earnest money. According to the defendants, the contract between the parties still subsisted and the sale could be completed after obtaining the sanction of the revenue authorities to the sale of the land and that in these circumstances the plaintiffs were not entitled to the refund of the amount paid by them.