PANKAJ ANANTRAI BHUWA Vs. RAMKUMAR SHIVCHANDRAY AND SONS

JUDGEMENT

(1.) The Plaintiffs have sued for specific performance of the Agreement for sale dated 23.4.1981 (the said Agreement), for a declaration that the agreement is valid and subsisting and for an order to convey and hand over possession of the property agreed to be sold under the said Agreement to Plaintiff No. 3, who is nominated by Plaintiff Nos. 1 and 2. The Defendant- Company (the Defendant) is the owner of the suit property being land with buildings and structures standing thereon at Prabhadevi Road, Final Plot No. 942, C.S. No. 1064 of Lower Parel, Mumbai, admeasuring 3883 sq. yards equivalent to 3248 sq. meters (the suit property).

(2.) The said Agreement dated 23.4.1981 is executed by way of a letter from the Defendant to the Plaintiffs and countersigned by the Plaintiffs.

(3.) Under the said Agreement, the Defendant agreed to sell, transfer and convey the suit property to the Plaintiffs on as is where is basis, free from all encumbrances for consideration of Rs. 20 Lakhs. The Defendant received an earnest of Rs. 50,000/-. The balance amount of Rs. 19.5 Lakhs was to be paid to the Defendant on completion of the sale as per the said Agreement. The said Agreement was subject to all tenancies. The Plaintiffs also were tenants of the Defendant in respect of a very large portion of the suit property. The Defendant was to pay municipal taxes and collect and receive the rents in respect of the suit property. The Defendant was to make out a marketable title and forward the title deeds to the Plaintiffs. The Defendant agreed not to transfer tenancies or deal with the tenants. The Defendant also executed a Power of Attorney in favour of the Plaintiffs for submitting building plans for development of the suit property and recovering rent and compensation thereof, which came to be revoked / terminated on 27.2.1989. The Defendant had to obtain its income tax clearance certificate under Section 230A of the Income-tax Act, 1961 and if the certificate was not produced, the Plaintiffs were not to withhold the completion of sale for want of 230A certificate, but in that event the Defendant was to deposit with the Plaintiffs' Advocate Rs. 25,000/- by way of security deposit for its obtaining 230A certificate, but the Plaintiffs were to complete the sale notwithstanding. The Defendant also agreed to comply with the formalities and requirements of registration and admission of documents apart from obtaining the 230A certificate. The Plaintiffs were to be entitled to recover all the arrears of rent and compensation payable by the other tenants and occupants till the time of the completion of sale. The sale was to be completed within a period of 10 months from the date of the said Agreement subject, of course, to the Defendant' s title being marketable and the Defendant obtaining permission for transfer of the suit property under Section 27 of the Urban Land Ceiling (and Regulations) Act, 1976 (ULCRA). On account of the wilful default of the Defendant if the sale was not completed, the Plaintiffs were entitled to ask for specific performance and for payment of interest on the earnest money and the costs, charges and expenses incurred by the Plaintiffs and on account of the wilful default of the Plaintiffs if the sale was not completed, the Defendant was entitled to specific performance of the Agreement making time the essence of the contract by giving 15 days' notice to complete the sale transaction and upon the failure of the Plaintiffs to be entitled to terminate the Agreement and forfeit the amount of earnest paid in addition to be liable for payment of costs, charges and expenses incurred by the Defendant and to be entitled to deal with or dispose of the suit property.