- (1.) Appellant, a Limited Company, entered into an agreement to sell (Ex.PW-1/2) dated 01.01.1983 with respondent No.1, a Private Limited Company for sale of property bearing Municipal No.23 Plot No.172 Jor Bagh, New Delhi comprising a lease-hold tenure in the land and a building constructed thereon at a sale price of Rs. 41,50,000/- acknowledging having received Rs. 50,000/- on the date of the agreement towards sale consideration, also recording that by means of cheques the appellant had paid to respondent No.1 a total sum of Rs. 11 lakhs towards earnest money-cum-part sale consideration on September 02, 1982 and November 08, 1982. It stands recorded in the agreement that respondent No.1 had obtained a loan in sum of Rs. 20 lakhs from Punjab & Sind Bank and by way of equitable mortgage had pledged the title deed of the property with the bank and that as on the date of the agreement the amount outstanding and payable to the bank was Rs. 24,50,000/-. The agreement records that the appellant would clear the liability of the bank. The agreement records that respondent No.1 would obtain the necessary permissions from Land & Development Office and the Income Tax Authorities as required by Section 230-A and Section 269-AB of the Income Tax Act. It records that if any other permission was required, the same would be obtained. The agreement records that all permissions would be obtained within 6 months and thereafter the sale deed would be executed upon appellant paying to respondent No.1 the balance sale consideration. Possession of the property was handed over to the appellant.
(2.) Before the six months time expired, on February 01, 1983, at the asking of respondent No.1 the appellant gave Rs. 5 lakhs to respondent No.1 to be paid to Punjab & Sind Bank and on February 10, 1983, once again, at the asking of respondent No.1 the appellant gave Rs. 2.5 lakhs to respondent No.1 to be paid to Punjab & Sind Bank. Needless to state, these payments had not to be adjusted against the sale consideration since appellant had to clear the mortgage as per Ex.PW-1/2.
(3.) On May 26, 1983 appellant issued a legal notice Ex.PW- 1/15 calling upon respondent No.1 to produce, after obtaining, the sale permissions envisaged by the agreement to sell and receive balance sale consideration and simultaneously execute the sale deed. Vide letter dated June 30, 1983, Ex.PW-1/16, respondent No.2 wrote on behalf of respondent No.1 being its Director, that further time be granted to it to obtain the necessary permissions. Vide supplementary agreement Ex.PW- 1/17 dated July 07, 1983 the parties mutually extended time for completion of the sale transaction till October 31, 1983. The said date lapsed. Neither respondent No.1 obtained the necessary sale permissions; and nor there is any evidence that it ever applied for any sale permission and the parties executed another extension agreement dated November 17, 1983, Ex.PW-1/18, extending time till January 31, 1984 to complete the sale. Even said date lapsed. Another agreement dated February 06, 1984, Ex.PW-1/19, was executed extending time to complete the sale till April 07, 1984. Even said date lapsed and the parties executed yet another agreement dated April 16, 1984, Ex.PW-1/20, extending time to complete the sale by September 30, 1984. Even said date reached and on September 30, 1984, Ex.PW-1/21 was executed extending time to complete the sale by December 31, 1984 and three days prior thereto on December 28, 1984, the parties executed Ex.PW-1/22 extending time to complete the sale by March 31, 1985. Said date reached and on March 31, 1985 vide Ex.PW- 1/23 the parties extended the time to complete the sale by September 30, 1985. Six days prior, on September 24, 1985, parties executed Ex.PW-1/24 recording that the sale would be completed by March 31, 1986 and three days prior thereto on March 28, 1986, parties executed Ex.PW-1/25 recording time being extended till September 30, 1986. Four days prior on September 26, 1986, vide Ex.PW-1/26, the time was extended till September 30, 1987 and in the meanwhile a further sum of Rs. 2.5 lakhs was paid by the appellant to Punjab & Sind Bank to be adjusted against the amount overdue and payable by respondent No.1.;