Gian Chand And Ors vs M/S York Exports Ltd. & Anr

The petitioners shall pay the principal amount to the respondent within a period of six weeks from today.

7. At the time of issuing notice in the Special Leave Petition on 03.12.2012, after hearing the learned counsel on behalf of the defendants, this Court issued notice only on the question of payment of interest by the defendants and the amount which they had received towards the part consideration from the plaintiffs in furtherance of the principal as well as the additional agreement. The learned senior counsel Mr. Jayant Bhushan has questioned the correctness of the impugned judgment of the High Court in affirming the award of interest at the rate of 9% per annum on the part of consideration amount paid to the defendants. The interest was to be paid at the rate of 9% per annum prior to the institution of the suit and 6% on the said amount from the date of decree till the date of payment. The learned senior counsel contended that the defendants are not liable to pay the same as the plaintiffs have committed breach of agreement entered with them in not purchasing the agricultural land to an extent of 145 bighas of land in respect of which the State Government in exercise of its power under Section 118 of the Land Reforms Act granted permission to purchase the same by the plaintiffs for the purpose of establishing their factory, though the agreement of sale was intended to purchase 164 bighas 7 biswas of land in Khata Khatauni No. 98/105, Khasra No. 245, Mauza Beerh Plassi, Pargana Plassi, Tehsil Nalagarh, District Solan, Himachal Pradesh. The case of the plaintiffs is that as per the agreement between the parties entered on 2.8.1995, the defendants agreed to sell the aforesaid property at the rate of [pic]50,000/- per bigha and further agreed that the sale deed was to be executed on 31.5.1996 but prior to that date, the plaintiffs were required to pay a sum of [pic]15,03,500/- to the defendants. Undisputedly, this amount was also paid to the defendants on 21.8.1995. The sale deed could not be executed by the defendants in favour of the plaintiffs by 31.5.1996 as the State Government granted permission to the plaintiffs for purchase of only 125 bighas of land under Section 118 of the Land Reforms Act. Thereafter the parties renewed the agreement on 31.5.1996. As per the renewed agreement, the plaintiffs were to pay [pic]18,00,000/- more which was also paid on 4.6.1996. As per this agreement, the sale deed was to be got executed by 31.12.1996. The State Government did not grant permission to the full extent of land, which is agreed to be sold in favour of the plaintiffs. On the other hand, the State Government allowed only to the extent of 145 bighas of land in all to be purchased by the plaintiffs. The plaintiffs did not get the sale deed executed. As to the extent of land for which permission was granted by the State Government, according to the plaintiffs, it was not sufficient for establishing the factory. Therefore, the plaintiffs contended that the contract is frustrated and therefore, they filed Civil Suit No. 31 of 1997 before the learned single Judge of the High Court for recovery of the amount paid towards the part consideration along with interest at the rate of 9% per annum up to the date of finalization of the suit and 6% per annum from the date of institution of the civil suit. The said claim was opposed by the defendants traversing plaint averments contending that the contract is not frustrated as pleaded by the plaintiffs under Section 56 of the Indian Contract Act, 1872 and the plaintiffs are not entitled for the decree of money including the interest as claimed by them and hence they have prayed for dismissal of the suit.

11. In view of the reasons stated supra, we do not find any reason whatsoever to interfere with the impugned judgment and decree wherein the award of interest at the rate of 6% per annum on the amount decreed by the learned single Judge from the date of institution of the suit need not be set aside by this Court. Accordingly, the Civil Appeal is dismissed, but with no order as to costs.