Case: Lalit Kumar Jain  Vs. Jaipur Traders Corpn. P.Ltd

is that the bank draft for the amount of Rs. 5,000/- received from the defendants was not returned and it is not the case of the plaintiff that the draft was not credited to their account. When Shri B.D. Meattle (P.W.1) was confronted with this fact, he came forward with a peculiar explanation that the relationship was not so much strained and therefore the bank draft was not returned. If at all, this is a factor which goes in favour of the defendants rather than the plaintiff. All this would show that the plaintiff consciously agreed to honour the understanding arrived at between the Director of the Company Shri R.K. Meattle and the defendants which was reduced into writing in the form of a letter. If that agreement is true and binding, as has been held by the Trial Court, the plaintiff could not have rescinded the contract in September 1973, despite the fact that the suit filed by the Seth Shanti Lal Jain was pending and the formalities requisite for completion of registration were not completed. It may be an imprudent act on the part of Shri R.K. Meattle, going by the tenor of arrangement, but, in the absence of any allegations of collusion and mis-representation, the Court cannot disregard the agreement embodied in the letter dated 12.8.1971 which was believed by the trial Court. We are, therefore, of the view that reversal by the High Court of the trial Courts finding on this aspect is unwarranted and as already noted, is vitiated by non-consideration of the relevant material on record. This Court has, therefore, no option but to disturb the factual finding reached by the High Court. 12. One more fact which disentitles the plaintiff to the equitable relief under Section 27/31 of the Specific Relief Act is the unexplained delay in filing the suit after the exchange of notices in September 1973. Almost three years later, the suit was filed. This inaction has its own revelation. Either the plaintiff did not stand by his declaration to rescind the contract, as held by the trial Court, or the plaintiff was sitting on the fence and waiting to see whether the turn of events would be to his advantage or disadvantage. 13. If the above facts and circumstances are cumulatively considered, the plaintiff has no legitimate ground to seek the equitable remedy. While these are the factors that can be put against the plaintiff, the defendants-appellants are not free from blame. We cannot lose sight of the fact that their conduct is also open to question. The defendants, in the initial stages, insisted on income-tax clearance certificate. When the defendants were informed of the readiness of the plaintiff to hand over the ITC subject to payment of balance money within 15 days, the defendants then raised the plea of pendency of the suit of Seth Shanti Lal which was by then dismissed for default. The factum of dismissal of suit was intimated to the defendants through the notice dated 3.7.1973, though the suit was subsequently restored and was finally dismissed in the year 1978. The fact remains that the defendants who, in the initial stages, were prepared to pay the balance sale price on receipt of ITC, for reasons best known to them, dodged to make the payment on the ground of pendency of suit. Though this conduct on the part of the defendants is not above board the conduct of the plaintiff, who has sought equitable remedy, should be kept uppermost in the mind of the Court. The plaintiff seeking equitable remedy cannot approach the Court with unclean hands or be guilty of laches. Irrespective of the conduct of the defendants we must hold that the plaintiff has, for various reasons discussed, above, disentitled himself to the relief of cancellation of instrument and for recovery of possession from the defendants that too after the property was substantially developed. 14. The result of the foregoing discussion is that the suit is liable to be dismissed and it has been rightly dismissed by the trial Court. However, in view of the fact that the defendants are not free from blame as discussed above and they have utilised the property to the best of their advantage right from day one without, at the same time, paying the balance sale price for several years we put it to the counsel for the appellants whether they are willing to pay to the plaintiff a substantial amount over and above the sale price already deposited in the Court, in order to do justice to the parties. In fact, in the course of arguments by the learned counsel for the appellants, there was an indication that the appellants were prepared to offer a reasonable amount, without prejudice to their contentions. The learned counsel for the appellants has filed a letter dated 18.4.2002 stating that "the appellants can pay and agree to pay a further sum of Rs. 35 lacs (Rupees thirty five lacs) in 3 instalments of Rs. 15 lacs and Rs. 10 lacs and Rs. 10 lacs", in three weeks, by the end of August and by the end of November, 2002 respectively. When we suggested to the learned counsel that it would be fair if some more amount is offered, the learned counsel for the appellants agreed on behalf of his clients for payment of Rs. 40 lacs in lump sum within a period of six months commencing from today. Having regard to the offer made in the letter coupled with the oral representation made today and to mere out justice to the parties, we direct that the undertaking to pay the sum of Rs. 40 lacs within six months should form part of the decree in the suit. This shall be in addition to the sale price already deposited in the Court. The same shall be deposited in the Court within a period of six months and the appellants are entitled to withdraw the same in addition to the amount already deposited.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]8. We are of the view that the High Court failed to address itself to certain crucial factors which disentitles the plaintiff to equitable relief. The High Court reversed a well considered judgment of trial Court without adverting to the reasoning of trial Court except in a cursory manner. In the view we are taking, it is not necessary for us to dilate on various legal issues debated before us. We shall proceed on the basis that in law the plaintiff could annul the contract of the sale before the act of registration got completed and title passed to the appellants. We shall further assume that the plaintiff in fact rescinded the contract with effect from the date of expiry of the time stipulated in the 4th and final notice dated 3.7.1973. If such rescission or termination of contract is not justifiable on facts or having regard to the conduct of the plaintiff, the equitable relief under Section 27 or 31 of the Specific Relief Act has to be denied to the plaintiff, no further question arises for consideration. In such a case, the appellantsâ€™ plea has to be accepted and the suit is liable to be dismissed.The result of the foregoing discussion is that the suit is liable to be dismissed and it has been rightly dismissed by the trial Court. However, in view of the fact that the defendants are not free from blame as discussed above and they have utilised the property to the best of their advantage right from day one without, at the same time, paying the balance sale price for several years we put it to the counsel for the appellants whether they are willing to pay to the plaintiff a substantial amount over and above the sale price already deposited in the Court, in order to do justice to the parties. In fact, in the course of arguments by the learned counsel for the appellants, there was an indication that the appellants were prepared to offer a reasonable amount, without prejudice to their contentions. The learned counsel for the appellants has filed a letter dated 18.4.2002 stating that "the appellants can pay and agree to pay a further sum of Rs. 35 lacs (Rupees thirty five lacs) in 3 instalments of Rs. 15 lacs and Rs. 10 lacs and Rs. 10 lacs", in three weeks, by the end of August and by the end of November, 2002 respectively. When we suggested to the learned counsel that it would be fair if some more amount is offered, the learned counsel for the appellants agreed on behalf of his clients for payment of Rs. 40 lacs in lump sum within a period of six months commencing from today. Having regard to the offer made in the letter coupled with the oral representation made today and to mere out justice to the parties, we direct that the undertaking to pay the sum of Rs. 40 lacs within six months should form part of the decree in the suit. This shall be in addition to the sale price already deposited in the Court. The same shall be deposited in the Court within a period of six months and the appellants are entitled to withdraw the same in addition to the amount already deposited.