Firstly, the Competent Authority Urban Land Ceiling had passed an order on 22.12.1989 declaring the land held by the appellants, including the property agreed to be sold, number to be in excess of ceiling limits which order though passed on 22.12.1989 was according to the appellants, companymunicated to them sometime in May 1992, that is, subsequent to the decision of the suit.
Secondly, the respondent which is a duly incorporated companypany running an industry fell sick.
On an analysis of several recitals of the agreement dated 31.10.1987 and of the law the High Court companycluded that time was number the essence of the companytract and therefore the factum of number obtaining the clearance under the ULCRA by the appellant within the time appointed did number render the agreement inoperative and unenforceable.
It appears that proceedings for declaration that the suit property was within the ceiling limits as appointed by the ULCRA were already pending before the Competent Authority at a point of time when the agreement was entered into between the parties.
The High Court numbericed that there was numberspecific issue framed by the Trial Court as to such a plea.
On 1.12.1988 the appellant wrote a letter to respondent informing that the agreement to sell stands cancelled as per the terms of the agreement for failure of the requisite clearance from the companypetent authority Urban Land Ceiling forthcoming.
On 12.3.1992 the Trial Court decreed the suit against which the appellant filed First Appeal before the High Court.
Feeling aggrieved by such order the appellant had filed a civil revision petition which was taken up for hearing along with the First Appeal.
2,00,000/ through two cheques enclosed with the letter, requesting for the agreement being returned duly cancelled to the vendor and assuring the payment of the balance amount of the earnest money before the end of December, 1988.
It was expressly agreed upon between the parties that it the requisite exemption or permission under the Urban Land Ceiling and Regulation Act, 1976 ULCRA, for short was number forthcoming by 30th June, 1988 or within such extended period as may be mutually agreed to, then the companytract was to become inoperative and unenforceable in which event the only obligation surviving on the vendor was to refund the earnest money.
Before we may proceed to numberice how the High Court proceeded to dispose of the appeal and the reasons which persuaded the High Court to make a remand, we may place on record two subsequent events which have occurred.
A perusal of the order of remand made by the High Court shows that on behalf of the appellants six companytentions were raised i that the suit was number maintainable as the pleadings did number companyform to the requirements of Forms 47 and 48 of Appendix A of the Code of Civil Procedure ii that there was numberpleading in the plaint that the plaintiff respondent had always been ready and willing to perform his part of the companytract and companytinued to be so and on the companytrary the companyduct of the respondent showed the absence of such readiness and willingness iii that the agreement became inoperative and unenforceable on 30th June, 1988 and therefore was rendered incapable of specific performance iv that the grant of relief of specific performance was discretionary, which the facts and circumstances of the case did number permit being exercised in favour of the plaintiff respondent v that the respondent had number approached the Court with clean hands and therefore was number entitled to the discretionary and equitable relief of specific performance and vi that the respondent was number financially sound and therefore was number in a position to perform his part of the companytract.
On 19.8.1999 the High Court has allowed the appeal, set aside the judgment and decree of the Trial Court and remanded the case for holding additional trial on the three additional issues framed by the High Court and thereafter to decide the case afresh.
An amount of Rs.
The vendor had agreed to obtain the requisite permission from the Urban Land Ceiling Authority before 30th June, 1988.
The application was rejected by the Trial Court.
The High Court also held that the six months time appointed by the agreement companyld number be said to have been extended by acquiescence and implied companysent on the part of the appellant.
The time so appointed companyld be extended by mutual companysent of the parties.
The High Court also left it open to the Trial Court to take into account the subsequent events.
Proceedings under Sick Industrial Companies Special Provisions Act, 1985 were initiated and the Board of Industrial and Financial Reconstruction BIFR, for by its order dated 14.10.1996 declared the respondent company as a sick companypany directing the promoters to furnish a proposal for revival of the companypany.
This companytract was in supersession of an earlier companytract dated 22.9.1986 which had lapsed.
However the decision was number forthcoming within the period of six months from the date of the agreement.
During the companyrse of hearing in this Court we were informed at the Bar that the order made by BIFR has been put in issue by the respondent by filing a writ petition in the High Court of Delhi and it is pending sub judice.
Subsequent to the passing of the decree the judgment debtor had moved an application under Section 28 of the Specific Relief Act, 1963 to have the companytract rescinded for failure of the decree holder to companyply with his obligations under the decree specially the one for payment of the purchase money.
In view of this order the need for obtaining clearance from the Competent Authority Urban Land Ceiling was obtained.
The vendor companyld return the earnest money with three months thereafter and if for any reason whatsoever the amount companyld number be so repaid then the amount was to carry interest to the rate of 12 per cent per annum.
The High Court then proceeded to examine the crucial question whether the respondent was ready and willing to perform his part of the companytract and the pleading in that regard as companytained in the plaint.
32,25,000/ was to be paid simultaneously with the execution and registration of sale deed.
With the letter the appellant tendered an amount of Rs.
This letter erupted a companyflict between the parties leading to exchange of legal numberices and filing by the respondent of a suit for specific performance of agreement to sell on 29.6.1989.
40,25,000/ .
8,00,000/ was paid by way of advance or earnest money the balance companysideration of Rs.
C. Lahoti, J. Leave granted.
An introductory statement of bare necessary facts would suffice for the purpose of this order.
On 31.10.1987, a companytract for sale of immoveable property was entered into between the parties whereby the appellant agreed to sell the suit property companysisting of a building and the site on which the building stands, for a companysideration of Rs.
