Satya Jain(D) & Ors vs Anis Ahmed Rushdie(D) Tr.Lrs.& Ors

2. The appellants, apart from the appellant Narendra Jain (Plaintiff No.2), claim to be the Legal heirs and representatives of the original plaintiffs 1 and 3 who had instituted suit No. 994/1977 in the High Court of Delhi seeking a decree of specific performance in respect of an agreement dated 22.12.1970 executed by and between original plaintiff No.1 (Bhikhu Ram Jain) and the original defendant Anis Ahmed Rushdie in respect of a property described as Bungalow No.4, Flag Staff Road, Civil Lines, Delhi (hereinafter referred to as the ‘suit property’). The plaintiff Nos.2 and 3 were/are the sons of the original plaintiff No.1. The suit was decreed by the learned trial judge. The decree having been reversed by a Division Bench of the High Court the present appeals have been filed by the original plaintiff No.2, Narendra Jain and the other appellants who claim to be vested with a right to sue on the basis of the claims made by the original plaintiffs in the suit. It is, however, made clear at the very outset that though all such persons claiming a right to sue through the deceased plaintiffs 1 and 3 are being referred to hereinafter as the plaintiffs and an adjudication of the causes/claims espoused is being made herein the said exercise does not, in any way, recognize any right in any such impleaded ‘plaintiffs’ which Question(s) are left open for decision if and when so raised.

3. The pleaded case of the respective parties may now be briefly noticed.

In the suit filed by the original plaintiffs it was pleaded that the defendant, who was the owner of the suit property, after inducting the plaintiff No. 1 as a tenant in respect of the half portion of the suit property at a monthly rent of Rupees three hundred w.e.f. 20.12.1970 had executed an agreement dated 22.12.1970 to sell the suit property to the said plaintiff No.1. According to the plaintiffs the price fixed under the agreement was Rupees 3,75,000/- (Rupees three lakh and seventy five thousand only) out of which an amount of Rupees 50,000/- (Rupees fifty thousand only) was paid to the defendant by the plaintiff No.1 as part payment. Under clauses 4, 5 and 7 of the agreement dated 22.12.1970 the defendant was required to obtain necessary Tax Clearance Certificate from the Income Tax Authorities for sale of the suit property and intimate the said fact and also deliver to the plaintiff No.1 a copy of such certificate within twelve months from the date of the execution of the agreement dated 22.12.1970. Within three months thereafter, the plaintiff No.1 was required to pay the balance sale consideration on receipt of which the defendant was under an obligation to execute the sale deed in favour of the plaintiff. Under clause (7) of the agreement dated 22.12.1970 the plaintiff No.1 was to pay to the Income Tax Authorities such amount as may be desired by the defendant (not exceeding the balance sale price of the property) against the tax dues of the defendant so as to facilitate the grant of the required tax clearance certificate. Clause (7) of the agreement also contemplated that such money as may be paid by the plaintiff No.1 to the Income Tax Authorities in the defendant-vendor’s account was to be deducted by the plaintiff from the balance of the sale price at the time of the execution of the sale deed.

4. According to the plaintiffs, as the plaintiff No.1 had not received any intimation from the defendant in the matter of execution of the sale deed he had written a letter dated 27.12.1971 to the defendant enquiring about the steps taken to obtain the necessary Tax Clearance certificate from the Income Tax Authorities. The plaintiffs had pleaded that the said letter was not replied to. Instead a legal notice dated 6.11.1972 was issued on behalf of the defendant wherein it was, inter alia, claimed that defendant had written a letter to the plaintiff No.1 as far back as on 9.9.1971 calling upon him to pay a sum of Rupees One lakh so as to enable the defendant to furnish a bank guarantee to the Income Tax Authorities in order to facilitate the issuance of the necessary Tax Clearance certificate. The request of the defendant was not responded to by the plaintiff No.1. Accordingly, by the notice dated 6.11.1972, the defendant had asked/required the plaintiff to pay the aforesaid amount of Rupees One lakh within three days failing which, it was mentioned, the agreement dated 22.12.1970 would stand terminated and the earnest money (Rupees fifty thousand) paid shall stand forfeited. According to the plaintiffs, in response to the aforesaid notice dated 6.11.1972, the plaintiff No.1 wrote a letter dated 14.11.1972 denying the receipt of any communication from the defendant that he had applied for the tax clearance certificate or any intimation to the effect any amount is required to be paid to the Income Tax Authority for processing the matter of grant of the clearance certificate. In the aforesaid letter the plaintiff No.1 had further stated that under clause (7) of the agreement he was obliged to deposit, at the request of the defendant, any amount not exceeding the total sale consideration with the Income Tax Authorities and no further/additional amount was required to be tendered to the defendant after payment of the initial amount of Rupees Fifty Thousand. In the said letter dated 14.11.1972 the plaintiff No.1 had also reiterated his readiness to tender any payment as may be due under the aforesaid clause (7) of the agreement. As the letter dated 14.11.1972 was not responded to, the plaintiff No.1 had addressed another letter dated 15.12.1972 to the Advocate of the defendant reiterating the contents of his earlier letter dated 14.11.1972. Thereafter, there was no correspondence between the parties for about five years until the suit was filed on 3.11.1997. It may be specifically noted, at this stage, that according to the plaintiffs the suit could not be instituted earlier as the defendant was all along residing in London. Another relevant fact that would be required to be noticed is that on 16.9.1977 the plaintiff No.1 had received a notice terminating the tenancy qua half portion of the suit property which had commenced on and from 20.12.1970. It is in these circumstances that the plaintiff had filed the suit seeking a decree of specific performance of the agreement dated 22.12.1970 and, in the alternative, for a decree of a sum of Rs.1,30,120.50 being the total of the part amount paid to the defendant and damages along with interest thereon.

16. To answer the next question that would arise consequent to our decision on the first issue the clauses of the agreement between the parties will have to be noticed in some detail. The total sale price was agreed at Rs. 3,75,000/- out of which a sum of Rs.50,000/- had been acknowledged to have been paid by the purchaser(plaintiff No.1) to the vendor (defendant) by means of an account payee cheque. Under clause 4 of the agreement, the vendor was required to obtain, at his own cost, a Wealth Tax clearance certificate to enable the transfer of property to be made and to intimate the said fact along with a copy of the tax clearance certificate to the purchaser not later than 12 months from the date of the agreement. Under Clause 5 of the agreement, the vendor was to execute the sale deed within a period of 15 months from the date of the agreement. The purchaser, in turn, was to pay to the vendor the balance sale consideration after deducting the amount of Rs.50,000/- at the time of the registration of the sale deed which was to be within three months after receipt of the necessary intimation that the tax clearance certificate has been obtained along with the copy thereof as contemplated under clause 4 of the agreement. Under Clause 7 of the agreement, the purchaser was obliged to pay to the Income Tax authorities such amount as may be desired by the vendor (not exceeding the balance sale price payable) in order to enable the vendor to get the required Wealth Tax clearance certificate. The aforesaid clause further stipulated that such money as may be paid to the Income Tax authorities, at the request of the vendor and on the vendor’s account, will be deducted by the purchaser from the balance sale consideration at the time of the execution of the sale deed. It must also be noted that under the terms of the agreement between the parties apart from the payment contemplated by Clause 7 to the authority and in the manner specified therein the purchaser had no obligation to tender any further payment directly to the vendor.

31. All the appeals shall accordingly stand allowed in terms of our above conclusions and directions.