TREACHER AND CO LTD Vs. MAHOMEDALI ADAMJI PEERBHOY

JUDGEMENT

(1.) The plaintiffs in this suit are a limited liability Company which was incorporated in the early sixties. They acquired the business and the properties of certain individuals, who were previous to the formation of this Company, carrying on business in Bombay in the name of Treacher & Co. The plaintiffs since their incorporation have continued to carry on their business in Bombay in the name of Treacher & Co. Ltd. Amongst the properties acquired by the Company, were certain lands and buildings thereon situated at Byculla at the corner of Duncan and Bellasis Junction roads. The property was conveyed to the plaintiff Company soon after its formation and the Company has been in occupation and possession of the lands and building thereon ever since. It appears that the Company were desirous of selling their Byculla property and they attempted to sell the same by public auction on the 18 of November 1907. As however there was no attendance of bidders, the property was not put up for sale. The defendant, who is a merchant and one of the sons of a well-known citizen of Bombay, Sir Adamji Peerbhoy, hearing of the desire of the plaintiffs to sell their property, opened negotiations with Mr. Knowles, the General Manager of the plaintiff Company, with a view to purchase this property. The negotiations culminated in a letter which the defendant addressed to the plaintiff Company on the 28 of November 1907. In that letter the defendant offered to purchase the Byculla property for a sum of Rs. 2,50,000/ on certain terms and conditions mentioned by him therein. The principal terms with which we are concerned in this case are, first, that a portion of the plaintiffs land which was Sanadi land should be converted by the plaintiffs and sold by them " as of quit and ground rent tenure free from all claims of Government or Municipality but subject to the payment of quit and ground rent and Municipal taxes as from the date on which the sale is completed"; and secondly, that the plaintiffs were " to deduce a marketable title to the permises to the satisfaction of" the purchaser's solicitors. In this offer the defendant gave the plaintiffs option to complete the sale within three months or ten months from the date of the acceptance of his offer. After certain correspondence had taken place between the parties, the defendant's offer was eventually accepted by the plaintiffs. The defendant paid Rs. 50,000 by way of earnest money and it was arranged that the sale should be completed at the end of ten months. Under this arrangement the defendant would have , had to pay the balance of the purchase money and complete the sale by the e September, 1908. The plaintiffs were ready and willing to complete the sale in September. The defendant, however, seems to have been in some difficulty about completing the sale at the end of September. By their letter of the 31 of August 1908 the plaintiffs intimated to the defendant that they were ready to complete at the end of September. On the 9 of September the defendant, addressing the plaintiffs General Manager Mr. Knowles, says:- You will recollect that the writer had mentioned to you that the completion of the sale of the property should be allowed to stand over for about eight months from the 1 instant, the purchasers in the meantime paying interest on the balance of the purchase money at 5 p. c. and all taxes and insurance.

(2.) He asks Mr. Knowles to place this proposal before the directors and to request them to accept the same. On the 12 of September the plaintiffs acceded to the defendant's request to postpone completion of the same on certain terms which are set out in their Manager's letter to the defendant of that date. After some further correspondence, it was eventually agreed between the parties that the completion should be put off for eight months on certain terms, one of which that the defendant was to pay to the plaintiffs a further sum of Rs. 50,000 towards the purchase money. The defendant accepted the plaintiffs terms and ultimately on the n November, 1908 he paid in a further sum of Rs. 50,000 and the completion was postponed for eight months. It is not quite clear whether the eight months were to be calculated from the 1 of September or the 1 of October. The plaintiffs in their letter of the 12 of September say : The Board are prepared to allow you to defer the same (meaning completion of purchase) for eight months from the 1 instant.

(3.) In their letter of the 11 of November, their General Manager says:- I note that the balance of a lac and fifty thousand will be paid within eight months from the 1 of October last, according to the conditions laid down in my letter of the 12 of September last.