Pramod Building & Developers P.Ltd vs Shanta Chopra

3. The respondent cancelled the said agreement by notice dated 27.2.1989. However, subsequently the parties entered into a fresh agreement dated 2.5.1989 under which the cancellation was treated as withdrawn and the respondent undertook to execute the sale deed in terms of the agreement dated 26.10.1988 without any change in its terms. The said agreement recorded that the NOC (in Form 371) from the Income Tax authorities had been received. The agreement dated 2.5.1989 provided that on obtaining the Income Tax Clearance Certificate, the vendor should inform the purchaser within one week and within one month thereafter, the sale should be completed by execution of the sale deed and the purchaser should pay the balance amount in the presence of the Sub Registrar. On 16.5.1989, the respondent informed the appellant that the NOC in Form No.37-I and Clearance Certificate in Form No.34-A have been obtained and, therefore, the appellant should pay the balance consideration of Rs. 34,00,000/- within one month from the date of receipt of the said letter and get the sale deed registered. It is not in dispute that in terms of the supplemental agreement dated 2.5.1989, the sale had to be completed by 17.6.1989. It is not disputed that as 17.6.1989 and 18.6.1989 were holidays, the sale had to be completed by 19.6.1989. As the sale was not completed, the respondent alleged that the appellant was in breach and terminated the agreement, by notice dated 22.6.1989. This led to the filing of a suit for specific performance (Suit No.1660/1989) by the appellant in the High Court of Delhi. The main reliefs sought in the said plaint are relevant and extracted below:

5.1) The appellant's case is as under: It is a builder. It agreed to purchase the property for construction of a residential apartment building. The respondent failed to furnish the mutation certificate showing that the property was registered in her name in the records of the Municipal Corporation and failed to produce the up to date tax paid receipts. Appellant therefore demanded that the respondent should give an affidavit and bank guarantee confirming that all municipal taxes had been paid and there were no arrears of municipal taxes. Subsequently, it did not even insist upon the affidavit and required the respondent to give a letter of undertaking and indemnity bond to that effect. Respondent did not comply with the said reasonable demand and refused to clear the tax dues. The respondent was duty bound to make out a good and satisfactory title and that meant that she had to satisfy the appellant that all municipal taxes had been paid in regard to the property. The respondent failed to discharge this basic obligation and thereby committed breach. 5.2) The case of the respondent is as under: There was an arbitrary assessment of tax by the Municipal authorities in regard to the property and therefore, she had filed a suit (Suit No.712/1976 on the file of the Sub Judge, First Class, Delhi). The Court had decreed the said suit and directed the Municipal authorities to make a fresh assessment in the light of its observations. There was no fresh assessment or demand by the Municipal Corporation for payment of tax. Therefore, she could not pay the municipal taxes and produce receipts. She had informed the appellant about the said dispute and had confirmed that in terms of the agreement, if and when the municipal authorities made the final assessment and made a demand in terms of such assessment, she would bear and pay the said taxes up to the date of sale. In this background, the question of her giving any affidavit or other document confirming that all taxes up to date were paid did not arise, as the sale agreement itself contained appropriate provision in that behalf. When matters stood thus, though the appellant had secured a demand draft towards the balance price of Rs.34,00,000/- and she was ready to attend the Sub- Registrar's Office and execute the sale deed by receiving the said sum, the appellant insisted that she should either pay Rs.5,00,000/- to it towards municipal taxes or clear all municipal taxes due before the sale, as he apprehended that his construction project was likely to be affected. As she was not agreeable to meet the said illegal demand and pay Rs.5,00,000/-, the appellant was not ready to proceed with the sale. As the appellant refused to pay the entire balance consideration of Rs.34,00,000/- in terms of the agreement and get the sale completed, she had no alternative but to terminate the contract on 22.6.1989.

After considering the pleadings, the evidence and the arguments, a learned single Judge of the High Court, by judgment dated 8.1.2008, dismissed the suit. He held that the plaintiff-appellant was not ready and willing to perform the contract in terms of the agreement and had failed to tender Rs.34,00,000/- within the stipulated date. However with reference to the alternative prayer, the court granted a decree for refund of Rs.9,50,000/- with interest at 10% per annum from the date of payment till the date of repayment was granted. Feeling aggrieved, the appellant filed an intra- court appeal and a Division Bench of the High Court, by the impugned judgment dated 2.7.2008 affirmed the decision of the learned Single Judge and dismissed the appeal with costs of Rs.10,000/-. The said judgment is challenged in this appeal by special leave.

5. The suit has been dismissed on the basis of concurrent findings of fact that the appellant was in breach and not the respondent. We may refer to the controversy between the parties.

9. We find no reason to interfere with the decision of the High Court. The appeal is, therefore, dismissed.

February 09, 2011.