RAJ KUMAR GUPTA Vs. DES RAJ

JUDGEMENT

(1.) Plaintiffs are Chairman and Vice-Chairman, respectively of United Group of Industries, Chandigarh. Plaintiff No. 2 for and on behalf of plaintiff No, 1, entered into agreement for sale (Ex. DW- 1 / A) on 26/05/1981 with the defendants to purchase the suit land situated in village Kalyanpur, Pargna Dharampur, Teh. Nalagarh, District Solan for valuable consideration of Rs. 3,39,625.00 allegedly for the purpose of establishing an industry. An amount of Rs. 84,906.26 was paid by the plaintiff No. 2 to the defendants. According to its terms, the balance amount of sale consideration was to be paid in three instalments, the first instalment of Rs. 84906.2 5/08/1981, second instalment of Rs, 1,34,062.50 to be paid on 26/11/1981 and the third instalment along with all expenditures incurred on the execution of the sale deed, at the time of registration thereof. The sale deed was agreed to be executed within one year either in the name of purchaser or a company or companies in whose favour the necessary sanction was accorded. Plaintiffs assert that the land in question was agreed to be purchased for the purpose of establishing an industry. It is asserted that before the third instalment could be paid to the defendants, a Notification was issued by the Director, Town and Country Planning Organisation, Himachal Pradesh, Shimla notifying that the existing land use of Barotiwala Planning area including the suit land, stood frozen with immediate effect under Section 16 of the H. P. Town and Country Planning Act, 1977 (hereinafter shortly referred to as the 1977 Act). Plaintiffs further assert that agreement was frustrated and the sale deed could not be executed for the above said reasons, they laid a demand upon the defendants to refund the amount realised by them towards the sale of the aforesaid land. However, defendants instead of refunding the same, served a notice dated 24/12/1981 on the plaintiffs through their counsel, revealing that the amount stood forfeited because of breach of the terms of the contract. However, according to the plaintiffs, they are legally entitled to recover the said amount along with damages by way of interest @ Rs. 18% per annum from the defendants which the latter withheld, without any reasonable and sufficient cause. The above said facts and circumstances ultimately culminated into the filing of the instant suit for recovery of Rs. 2,57,700.00-.

(2.) Defendants resisted, and contested the claim of the plaintiff by raising various preliminary objections with respect to maintainability, estoppel and verification. On merits, the alleged purpose for which the land was to be purchased, was emphatically denied. As per the defendants, the plaintiffs wilfully avoided the contract. It has also been contended that the plaintiffs being non-agriculturists, were not entitled to purchase the land in question in view of Section 118(A) of the H. P. Tenancy and Land Reforms Act, 1972 (Act No. 8 of 1974) (hereinafter to be referred to as the Act) and, thus such an agreement being invalid, is unenforceable. Simultaneously, defendants contend that plaintiffs committed breach of the contract by their own acts and conduct, consequent to which the amount of the advance paid to the defendants stood forfeited. Publication of Notification under Section 16 of the 1977 Act has been denied. Further, it is contended that plaintiffs could obtain permission from the Director for the use of the land for a purpose other than the one mentioned in the Notification which the plaintiffs failed to seek and accordingly their being no cause of action against the defendants, plaintiffs' suit is not maintainable. Alternatively, defendants contend that under the Indian Interest Act, plaintiffs are not entitled to the payment of interest at the claimed rate of 18% per annum.

(3.) In replication, the plaintiffs reiterated the allegations made in the plaint and controverted the stand which cannot be taken by the defendants. The pleas taken by the defendants are self contradictory and self destructive. Defendants had no right to forfeit the amount paid by the plaintiffs towards the purchase of the suit land. Rather, plaintiffs have always been ready and willing to perform their part of the contract. It is further alleged that non-payment of the third instalment was because of frustration of the agreement and in any case, time was not the essence of the contract. According to them, defendants were aware of the purpose of establishing an industry on the land intended to be purchased by the plaintiffs.