REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2244 OF 2018
(Arising out of Special Leave Petition (C) No.28275 of 2014)
Kalawati (D) Through LRs. & Ors. ...Appellants
versus
Rakesh Kumar & Ors. ...Respondents
J U D G M E N T
Madan B. Lokur, J.
1. Leave granted.
2. “Ease of business” and “enforcement of contract” are the two new
buzzwords and rightly so. For ease of doing business insofar as justice
delivery is concerned, it is time to introspect and introduce case
management programmes to streamline the system so that suits and
appeals can be decided more efficiently. The present appeal exemplifies
the need for case management system.
3. The subject matter of the appeal is an agreement to sell dated 29th
May, 1986. A suit was filed by the plaintiff (Rakesh Kumar) in the Delhi
High Court being Suit No.1193 of 1987 for specific performance of the
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 1
agreement to sell. It appears that due to a change in pecuniary
jurisdiction, the suit was transferred to the District Courts and was
re-numbered as Suit No.642 of 2001. A disturbing feature of the appeal is
that even about 31 years later, the parties are not quite sure about the fate
of the agreement to sell entered into in 1986. The period is extremely
long and such a lapse of time for the enforcement (or otherwise) of a
contract is good reason to re-think the procedures.
4. The appellants (Kalawati and others) are aggrieved by the
judgment and decree dated 10th December, 2013 passed by a learned
Single Judge of the Delhi High Court in R.F.A. No.521 of 2004.
5. In the plaint filed by the respondent (Rakesh Kumar), it was
averred that he had entered into an agreement to sell on 29th May, 1986 in
respect of land in Rectangle No.81, Killa Nos.21/1 (1-2), 22/1 (4-5), 19/2
(4-0), 19/1 (0-12), 20/2 (1-2) in all measuring 11 bighas and 1 biswa
situated in Village Mehrauli, Tehsil Mehrauli, New Delhi. A part of the
land was under the absolute ownership/bhumidari of Kalawati while the
rest of the land was in the absolute ownership/bhumidari of defendant
Nos.2 to 4 (Bishan Prakash, Om Prakash and Ved Prakash).
6. As per the agreement to sell, the sale price of the land in dispute
was Rs.1,32,000/- per acre. An amount of Rs.30,000/- was paid by
Rakesh Kumar to the defendants as advance payment and part payment
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 2
towards the sale price for which a receipt was given to him.
7. According to Rakesh Kumar, the defendants were obliged to obtain
a certain ‘no objection certificate’ from the appropriate authority for sale
of the disputed land and also permissions and clearances but they failed
to take any interest in this regard. Accordingly, Rakesh Kumar issued a
lawyer’s notice dated 16th May, 1987 to the defendants to carry out their
obligations but they failed to do so.
8. Faced with this situation, Rakesh Kumar filed a suit before the
High Court being Suit No. 1193 of 1987. As mentioned above, the suit
was transferred to the District Courts and renumbered as Suit No.642 of
2001. The prayer in the suit was for specific performance for the
agreement to sell dated 29th May, 1986 and for possession of the land in
dispute. Along with the plaint, an application was filed by Rakesh Kumar
under Order XXXIX of the Code of Civil Procedure for an injunction
against alienation of the land in dispute, in which notice was issued to the
defendants therein. Rakesh Kumar was granted an interim injunction
subject to his depositing the balance sale consideration for restraining the
defendants from alienating the land in dispute. It has come on record that
Rakesh Kumar did not deposit the balance sale consideration.
9. At this stage, it may be mentioned that during the pendency of the
suit, the defendants transferred the land in dispute in 1995 to defendant
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 3
Nos.5, 6 and 7 and that is why the purchasers were impleaded as
defendants in the suit.
10. The parties filed their written statements to the plaint and the stand
taken by the defendants was that the sale consideration of Rs.1,32,000/-
per acre was ridiculously low and illusory. Additionally, Rakesh Kumar
himself was not ready and willing to perform his part of agreement and
therefore no relief could be granted to him. It was also averred that
Rakesh Kumar did not have the necessary finances to pay the
consideration amount and so was not prepared to have the sale deed
executed in his favour.
11. On the pleadings before him, the Trial Judge framed several issues
but we are only concerned with the issue whether the plaintiff (Rakesh
Kumar) was at all times ready and willing to perform his part of the
agreement. This issue was answered in the negative by the Trial Judge
and against Rakesh Kumar resulting in the dismissal of the suit. Among
the reasons given by the Trial Judge for coming to the conclusion that
Rakesh Kumar was not ready and willing to execute the contract, at all
times, was that at the time of grant of interim injunction prayed for by
Rakesh Kumar in an application under Order XXXIX of Code of Civil
Procedure while the suit was pending in the High Court, he was required
to deposit the balance consideration as a pre-condition for restraining the
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 4
defendants from selling, mortgaging, alienating or otherwise parting with
possession with the land in dispute. The balance sale consideration was
not deposited by Rakesh Kumar and therefore, the interim injunction
prayed for by him was not granted. In the absence of any injunction
against alienating the land in dispute, the defendants transferred it to
defendant Nos.5, 6 and 7 in 1995.
12. The Trial Judge also noted that from his cross-examination it was
evident that Rakesh Kumar did not have the resources and sufficient
money to purchase the disputed land. He was in possession of only one
truck and was earning Rs.10,000/- per month. He was not assessed to
income tax and he filed his income tax return for the first time in 1994.
Earlier in 1988-89, he had opened a bank account but never had a balance
of more than Rs.52,000/- in his bank account. Sometime in July, 2002
Rakesh Kumar took a loan of Rs.3.15 lakhs for the purpose of his
business from his cousin but the loan was not taken for the purpose of
buying the land in dispute. Taking all these factors into consideration, the
Trial Judge held that Rakesh Kumar did not have the means to pay the
balance consideration and was not ready and willing to perform his part
of the contract at all times.
13. Feeling aggrieved, Rakesh Kumar preferred a Regular First Appeal
before the Delhi High Court. The High Court addressed itself only to the
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 5
question whether Rakesh Kumar was ready and willing to execute his
part of the agreement to sell, at all times. The High Court took the view
that rather than Rakesh Kumar, it was the defendants who were not
willing to execute the sale deed. The High Court came to this conclusion
on the basis of the requirement in terms of the agreement to sell that the
defendants were obliged to obtain a ‘no objection certificate’ for
executing the sale deed but they had not taken any steps in that regard.
The High Court also relied on the affidavit by way of evidence filed by
Rakesh Kumar about his capacity to pay the balance sale consideration. It
was also noted by the High Court that the lawyer’s notice sent by him on
16th May, 1987 had not been responded to by the defendants. On a
consideration of these factors, it was clear that the defendants were not
interested in executing the sale deed.
14. On the other hand, as far as Rakesh Kumar’s readiness and
willingness to execute the sale deed is concerned, the High Court noted
that in his cross-examination recorded on 4th October, 2002 he explained
that just prior to the date of entering into the agreement to sell, he had
disposed of his house. Thus, he had sufficient funds available for
investing and on this basis, he had agreed to purchase the land in dispute.
15. The High Court noted that even though Rakesh Kumar did not
deposit the balance consideration for the grant of injunction in his favour,
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 6
that was of no consequence and could not be held against him. We agree
with the High Court only to this limited extent.
16. Taking all these factors into consideration, the High Court reversed
the view of the Trial Judge and concluded that Rakesh Kumar was
entitled to a decree for specific performance of the agreement to sell
dated 29th May, 1986 and for delivery of vacant, peaceful and physical
possession of the land in dispute.
17. Having heard learned counsel for the parties, we are not in favour
of the view expressed by the High Court but subscribe to the view of the
Trial Judge.
18. The law on the subject of specific performance of contracts is quite
clear and it is not necessary to cite the dozens of judgments delivered by
this Court on the issue. However, it is necessary to refer to two decisions
which are quite apposite to the facts of the case before us.
19. In His Holiness Acharya Swami Ganesh Dassji v. Sita Ram
Thapar1
this Court drew a distinction between readiness to perform the
contract and willingness to perform the contract. It was observed that by
readiness it may be meant the capacity of the plaintiff to perform the
contract which would include the financial position to pay the purchase
price. As far as the willingness to perform the contract is concerned, the
1 (1996) 4 SCC 526
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 7
conduct of the plaintiff has to be properly scrutinised along with attendant
circumstances. On the facts available, the Court may infer whether or not
the plaintiff was always ready and willing to perform his part of the
contract. It was held in paragraph 2 of the Report:
“There is a distinction between readiness to perform the contract
and willingness to perform the contract. By readiness may be
meant the capacity of the plaintiff to perform the contract which
includes his financial position to pay the purchase price. For
determining his willingness to perform his part of the contract,
the conduct has to be properly scrutinised…... The factum of
readiness and willingness to perform plaintiff's part of the
contract is to be adjudged with reference to the conduct of the
party and the attending circumstances. The court may infer from
the facts and circumstances whether the plaintiff was ready and
was always ready and willing to perform his part of the contract.
The facts of this case would amply demonstrate that the
petitioner/plaintiff was not ready nor had the capacity to perform
his part of the contract as he had no financial capacity to pay the
consideration in cash as contracted and intended to bide for the
time which disentitles him as time is of the essence of the
contract.”
20. In I.S. Sikandar (Dead) by Lrs. v. K. Subramani &Ors.
2
this Court
noted that the plaintiff is required to prove that from the date of execution
of the agreement of sale till the date of the decree, he was always ready
and willing to perform his part of the contract. In this case, looking the
attendant facts and circumstances, the Court upheld the view of the Trial
Judge that the plaintiff had no money to pay the balance sale
consideration and was apparently not capable of making necessary
2 (2013) 15 SCC 27
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 8
arrangements for payment of the balance consideration. It was held in
paragraph 45 and paragraph 47 of the Report:
“45.……..Further, the plaintiff is required to prove the fact that
right from the date of execution of the agreement of sale till the
date of passing the decree he must prove that he is ready and has
always been willing to perform his part of the contract as per the
agreement……”
“47. Further, there is nothing on record to show that the plaintiff
could have made arrangement for payment of the balance
consideration amount to them. But, on the other hand the trial
court has recorded the finding of fact to the effect that the
correspondence between the parties and other circumstances
would establish the fact that the plaintiff had no money for
payment of balance sale consideration…….”
21. In so far as the present appeal is concerned, the material on record
clearly indicates that Rakesh Kumar did not have the necessary funds
available with him to pay the balance consideration. His low income and
low bank balance indicated his incapacity to make the balance payment.
As far as his capacity to arrange for funds is concerned, it has come on
record that Rakesh Kumar did take a loan from his cousin but that was
only for his business and not for paying the balance consideration for the
land in dispute. There is nothing on record to indicate that Rakesh Kumar
could have not only repaid the loan taken from his cousin, but
additionally, could have arranged sufficient funds to pay the balance
consideration. It is very doubtful, and it is easy and reasonable to infer
this, that Rakesh Kumar was incapable of meeting both liabilities.
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 9
22. On the facts placed before us, we are satisfied that the Trial Judge
was right in coming to the conclusion that Rakesh Kumar was not in a
position to pay the balance consideration to Kalawati and the other
vendors, and by necessary implication, it must be held that he was neither
ready nor willing to perform his part of the agreement.
23. It was submitted that Kalawati and the other vendors did not
perform their part of the agreement despite Rakesh Kumar requesting
them to do so. The contention of Rakesh Kumar was that the vendors
did not obtain a “no objection certificate” from the authorities concerned.
We have gone through the agreement to sell dated 29th May, 1986 and the
relevant clause of the contract is remarkably vague and reads as follows:
“That the vendors will obtain the no objection certificate from the
authorities concerned and will inform the vendee by registered
post after getting the income tax clearance certificate.”
24. There is nothing to indicate the nature of the “no objection
certificate” that the vendors were required to obtain and who were the
authorities from whom the “no objection certificate” was required, nor is
there any indication of the purpose for which the “no objection
certificate” was required. Similarly, there is no indication about the
nature of the income tax clearance certificate required and for what
purpose. This clause appears to have been inserted in the agreement to
sell without any application of mind and it is quite possible, as alleged by
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 10
the vendors that the agreement to sell was ante-dated after the
introduction of Section 260-UC in the Income Tax Act, 1961. However,
we need not go into this possibility in view of the vague nature of the
clause.
25. On an overall consideration of the facts and in the circumstances of
the case, in our opinion, the High Court was in error in setting aside the
judgment and decree of the Trial Judge. Accordingly, the appeal is
allowed and the judgment and decree passed by the High Court is set
aside. No costs.
………………………J
(Madan B. Lokur)
New Delhi; ...……………………..J
February 16, 2018 (Deepak Gupta)
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 11
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2244 OF 2018
(Arising out of Special Leave Petition (C) No.28275 of 2014)
Kalawati (D) Through LRs. & Ors. ...Appellants
versus
Rakesh Kumar & Ors. ...Respondents
J U D G M E N T
Madan B. Lokur, J.
1. Leave granted.
2. “Ease of business” and “enforcement of contract” are the two new
buzzwords and rightly so. For ease of doing business insofar as justice
delivery is concerned, it is time to introspect and introduce case
management programmes to streamline the system so that suits and
appeals can be decided more efficiently. The present appeal exemplifies
the need for case management system.
3. The subject matter of the appeal is an agreement to sell dated 29th
May, 1986. A suit was filed by the plaintiff (Rakesh Kumar) in the Delhi
High Court being Suit No.1193 of 1987 for specific performance of the
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 1
agreement to sell. It appears that due to a change in pecuniary
jurisdiction, the suit was transferred to the District Courts and was
re-numbered as Suit No.642 of 2001. A disturbing feature of the appeal is
that even about 31 years later, the parties are not quite sure about the fate
of the agreement to sell entered into in 1986. The period is extremely
long and such a lapse of time for the enforcement (or otherwise) of a
contract is good reason to re-think the procedures.
4. The appellants (Kalawati and others) are aggrieved by the
judgment and decree dated 10th December, 2013 passed by a learned
Single Judge of the Delhi High Court in R.F.A. No.521 of 2004.
5. In the plaint filed by the respondent (Rakesh Kumar), it was
averred that he had entered into an agreement to sell on 29th May, 1986 in
respect of land in Rectangle No.81, Killa Nos.21/1 (1-2), 22/1 (4-5), 19/2
(4-0), 19/1 (0-12), 20/2 (1-2) in all measuring 11 bighas and 1 biswa
situated in Village Mehrauli, Tehsil Mehrauli, New Delhi. A part of the
land was under the absolute ownership/bhumidari of Kalawati while the
rest of the land was in the absolute ownership/bhumidari of defendant
Nos.2 to 4 (Bishan Prakash, Om Prakash and Ved Prakash).
6. As per the agreement to sell, the sale price of the land in dispute
was Rs.1,32,000/- per acre. An amount of Rs.30,000/- was paid by
Rakesh Kumar to the defendants as advance payment and part payment
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 2
towards the sale price for which a receipt was given to him.
7. According to Rakesh Kumar, the defendants were obliged to obtain
a certain ‘no objection certificate’ from the appropriate authority for sale
of the disputed land and also permissions and clearances but they failed
to take any interest in this regard. Accordingly, Rakesh Kumar issued a
lawyer’s notice dated 16th May, 1987 to the defendants to carry out their
obligations but they failed to do so.
8. Faced with this situation, Rakesh Kumar filed a suit before the
High Court being Suit No. 1193 of 1987. As mentioned above, the suit
was transferred to the District Courts and renumbered as Suit No.642 of
2001. The prayer in the suit was for specific performance for the
agreement to sell dated 29th May, 1986 and for possession of the land in
dispute. Along with the plaint, an application was filed by Rakesh Kumar
under Order XXXIX of the Code of Civil Procedure for an injunction
against alienation of the land in dispute, in which notice was issued to the
defendants therein. Rakesh Kumar was granted an interim injunction
subject to his depositing the balance sale consideration for restraining the
defendants from alienating the land in dispute. It has come on record that
Rakesh Kumar did not deposit the balance sale consideration.
9. At this stage, it may be mentioned that during the pendency of the
suit, the defendants transferred the land in dispute in 1995 to defendant
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 3
Nos.5, 6 and 7 and that is why the purchasers were impleaded as
defendants in the suit.
10. The parties filed their written statements to the plaint and the stand
taken by the defendants was that the sale consideration of Rs.1,32,000/-
per acre was ridiculously low and illusory. Additionally, Rakesh Kumar
himself was not ready and willing to perform his part of agreement and
therefore no relief could be granted to him. It was also averred that
Rakesh Kumar did not have the necessary finances to pay the
consideration amount and so was not prepared to have the sale deed
executed in his favour.
11. On the pleadings before him, the Trial Judge framed several issues
but we are only concerned with the issue whether the plaintiff (Rakesh
Kumar) was at all times ready and willing to perform his part of the
agreement. This issue was answered in the negative by the Trial Judge
and against Rakesh Kumar resulting in the dismissal of the suit. Among
the reasons given by the Trial Judge for coming to the conclusion that
Rakesh Kumar was not ready and willing to execute the contract, at all
times, was that at the time of grant of interim injunction prayed for by
Rakesh Kumar in an application under Order XXXIX of Code of Civil
Procedure while the suit was pending in the High Court, he was required
to deposit the balance consideration as a pre-condition for restraining the
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 4
defendants from selling, mortgaging, alienating or otherwise parting with
possession with the land in dispute. The balance sale consideration was
not deposited by Rakesh Kumar and therefore, the interim injunction
prayed for by him was not granted. In the absence of any injunction
against alienating the land in dispute, the defendants transferred it to
defendant Nos.5, 6 and 7 in 1995.
12. The Trial Judge also noted that from his cross-examination it was
evident that Rakesh Kumar did not have the resources and sufficient
money to purchase the disputed land. He was in possession of only one
truck and was earning Rs.10,000/- per month. He was not assessed to
income tax and he filed his income tax return for the first time in 1994.
Earlier in 1988-89, he had opened a bank account but never had a balance
of more than Rs.52,000/- in his bank account. Sometime in July, 2002
Rakesh Kumar took a loan of Rs.3.15 lakhs for the purpose of his
business from his cousin but the loan was not taken for the purpose of
buying the land in dispute. Taking all these factors into consideration, the
Trial Judge held that Rakesh Kumar did not have the means to pay the
balance consideration and was not ready and willing to perform his part
of the contract at all times.
13. Feeling aggrieved, Rakesh Kumar preferred a Regular First Appeal
before the Delhi High Court. The High Court addressed itself only to the
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 5
question whether Rakesh Kumar was ready and willing to execute his
part of the agreement to sell, at all times. The High Court took the view
that rather than Rakesh Kumar, it was the defendants who were not
willing to execute the sale deed. The High Court came to this conclusion
on the basis of the requirement in terms of the agreement to sell that the
defendants were obliged to obtain a ‘no objection certificate’ for
executing the sale deed but they had not taken any steps in that regard.
The High Court also relied on the affidavit by way of evidence filed by
Rakesh Kumar about his capacity to pay the balance sale consideration. It
was also noted by the High Court that the lawyer’s notice sent by him on
16th May, 1987 had not been responded to by the defendants. On a
consideration of these factors, it was clear that the defendants were not
interested in executing the sale deed.
14. On the other hand, as far as Rakesh Kumar’s readiness and
willingness to execute the sale deed is concerned, the High Court noted
that in his cross-examination recorded on 4th October, 2002 he explained
that just prior to the date of entering into the agreement to sell, he had
disposed of his house. Thus, he had sufficient funds available for
investing and on this basis, he had agreed to purchase the land in dispute.
15. The High Court noted that even though Rakesh Kumar did not
deposit the balance consideration for the grant of injunction in his favour,
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 6
that was of no consequence and could not be held against him. We agree
with the High Court only to this limited extent.
16. Taking all these factors into consideration, the High Court reversed
the view of the Trial Judge and concluded that Rakesh Kumar was
entitled to a decree for specific performance of the agreement to sell
dated 29th May, 1986 and for delivery of vacant, peaceful and physical
possession of the land in dispute.
17. Having heard learned counsel for the parties, we are not in favour
of the view expressed by the High Court but subscribe to the view of the
Trial Judge.
18. The law on the subject of specific performance of contracts is quite
clear and it is not necessary to cite the dozens of judgments delivered by
this Court on the issue. However, it is necessary to refer to two decisions
which are quite apposite to the facts of the case before us.
19. In His Holiness Acharya Swami Ganesh Dassji v. Sita Ram
Thapar1
this Court drew a distinction between readiness to perform the
contract and willingness to perform the contract. It was observed that by
readiness it may be meant the capacity of the plaintiff to perform the
contract which would include the financial position to pay the purchase
price. As far as the willingness to perform the contract is concerned, the
1 (1996) 4 SCC 526
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 7
conduct of the plaintiff has to be properly scrutinised along with attendant
circumstances. On the facts available, the Court may infer whether or not
the plaintiff was always ready and willing to perform his part of the
contract. It was held in paragraph 2 of the Report:
“There is a distinction between readiness to perform the contract
and willingness to perform the contract. By readiness may be
meant the capacity of the plaintiff to perform the contract which
includes his financial position to pay the purchase price. For
determining his willingness to perform his part of the contract,
the conduct has to be properly scrutinised…... The factum of
readiness and willingness to perform plaintiff's part of the
contract is to be adjudged with reference to the conduct of the
party and the attending circumstances. The court may infer from
the facts and circumstances whether the plaintiff was ready and
was always ready and willing to perform his part of the contract.
The facts of this case would amply demonstrate that the
petitioner/plaintiff was not ready nor had the capacity to perform
his part of the contract as he had no financial capacity to pay the
consideration in cash as contracted and intended to bide for the
time which disentitles him as time is of the essence of the
contract.”
20. In I.S. Sikandar (Dead) by Lrs. v. K. Subramani &Ors.
2
this Court
noted that the plaintiff is required to prove that from the date of execution
of the agreement of sale till the date of the decree, he was always ready
and willing to perform his part of the contract. In this case, looking the
attendant facts and circumstances, the Court upheld the view of the Trial
Judge that the plaintiff had no money to pay the balance sale
consideration and was apparently not capable of making necessary
2 (2013) 15 SCC 27
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 8
arrangements for payment of the balance consideration. It was held in
paragraph 45 and paragraph 47 of the Report:
“45.……..Further, the plaintiff is required to prove the fact that
right from the date of execution of the agreement of sale till the
date of passing the decree he must prove that he is ready and has
always been willing to perform his part of the contract as per the
agreement……”
“47. Further, there is nothing on record to show that the plaintiff
could have made arrangement for payment of the balance
consideration amount to them. But, on the other hand the trial
court has recorded the finding of fact to the effect that the
correspondence between the parties and other circumstances
would establish the fact that the plaintiff had no money for
payment of balance sale consideration…….”
21. In so far as the present appeal is concerned, the material on record
clearly indicates that Rakesh Kumar did not have the necessary funds
available with him to pay the balance consideration. His low income and
low bank balance indicated his incapacity to make the balance payment.
As far as his capacity to arrange for funds is concerned, it has come on
record that Rakesh Kumar did take a loan from his cousin but that was
only for his business and not for paying the balance consideration for the
land in dispute. There is nothing on record to indicate that Rakesh Kumar
could have not only repaid the loan taken from his cousin, but
additionally, could have arranged sufficient funds to pay the balance
consideration. It is very doubtful, and it is easy and reasonable to infer
this, that Rakesh Kumar was incapable of meeting both liabilities.
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 9
22. On the facts placed before us, we are satisfied that the Trial Judge
was right in coming to the conclusion that Rakesh Kumar was not in a
position to pay the balance consideration to Kalawati and the other
vendors, and by necessary implication, it must be held that he was neither
ready nor willing to perform his part of the agreement.
23. It was submitted that Kalawati and the other vendors did not
perform their part of the agreement despite Rakesh Kumar requesting
them to do so. The contention of Rakesh Kumar was that the vendors
did not obtain a “no objection certificate” from the authorities concerned.
We have gone through the agreement to sell dated 29th May, 1986 and the
relevant clause of the contract is remarkably vague and reads as follows:
“That the vendors will obtain the no objection certificate from the
authorities concerned and will inform the vendee by registered
post after getting the income tax clearance certificate.”
24. There is nothing to indicate the nature of the “no objection
certificate” that the vendors were required to obtain and who were the
authorities from whom the “no objection certificate” was required, nor is
there any indication of the purpose for which the “no objection
certificate” was required. Similarly, there is no indication about the
nature of the income tax clearance certificate required and for what
purpose. This clause appears to have been inserted in the agreement to
sell without any application of mind and it is quite possible, as alleged by
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 10
the vendors that the agreement to sell was ante-dated after the
introduction of Section 260-UC in the Income Tax Act, 1961. However,
we need not go into this possibility in view of the vague nature of the
clause.
25. On an overall consideration of the facts and in the circumstances of
the case, in our opinion, the High Court was in error in setting aside the
judgment and decree of the Trial Judge. Accordingly, the appeal is
allowed and the judgment and decree passed by the High Court is set
aside. No costs.
………………………J
(Madan B. Lokur)
New Delhi; ...……………………..J
February 16, 2018 (Deepak Gupta)
C.A No. _________ of 2018 (@ out of SLP (C) No.28275 of 2014) Page 11
