LexA. K. LAKSHMIPATHY (DEAD) & ORS. versus RAI SAHEB PANNALAL H. LAHOTI CHARITABLE TRUST & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
476 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.
A collect the earnest amount. Appellant filed suit for specific
performance of the contract for sale by respondents. Trial
Court held that appellant by insisting upon the
respondents to perform additional condition were not
ready and willing to perform their part of contract and
s time was not essence of contract. It dismissed the suit
but passed a decree directing the respondent to refund
the earnest money to the appellant. High Court upheld the
decree and held that the time was the essence of the
contract. Hence the present appeal.
c
D
Partly allowing the appeal, the Court
HELD: 1. The judgment of the High Court so far as
the suit for specific performance of the contract for sale
is concerned is upheld. [Para 19] [494-A-B]
2.1. From a bare perusal of clauses of the contract
for sale, it would be evident that the onus is on the
appellants to obtain clearance from the competent
authorities under the Urban Land (Ceiling and
E Regulation) Act,
1976. The respondents were
nevertheless bound to extend their full cooperation to the
vendees and to sign all necessary papers and
documents. In the contract, there is no such clause
where the certificate from the Endowment Department
was also to be taken for specific performance of the
F contract. The first appellant who was one of the executors
of the said contract had admitted in his evidence that the
transaction was finalized in the presence of a real estate
broker and neither he nor any of the other appellants had
asked the respondent to· get permissions from the
G Endowment Department at that juncture. The first
appellant had further deposed that he started entertaining
doubts about the motives of the sellers from 28th of May,
1970 because there were allegedly other brokers
approaching the respondent. Further PWs. 1 and 3 had
H
..
AK. LAKSHMIPATHY (DEAD) & ORS. v. RAI SAHEB
477
PANNALAL H. LAHOTI CHARITABLE TRUST & ORS.
affirmed at the trial court level that they had entered into
A
the agreement only after having satisfied themselves of
the title of the sellers and that they were ready to go ahead
to complete the contract. [Para 10] (486-A-F]
2.2. It is generally the prerogative of the buyer to find
6
out the defects in a property before buying it and also to
make the seller rectify such defects. Section 55 of the
Transfer of Property Act, 1882 deals with rights and
liabilities of buyer and seller. Sub-section (b) of s. 55(1)
clearly says that it would be open to the buyer to ask the C
seller to produce for examination all documents of title
relating to the p·roperty which are in the possession of
the seller or buyer. A plain reading of the provision would
amply show that documents of title relating to the
property in respect of which agreement for sale was
entered into must be in the possession or power of the D
seller which should be produced to the buyer for
examination. [Paras 11 and 13] (486-G; 488-E-G]
2.3. In the instant case, sub-section (c) of s. 55 of the
T.P. Act is pertinent: A reading of the provisions u/s. 55
E
· which starts with "In the absence of a contract to the
contrary' would clearly mean thats. 55 (1) (b) and (c) of
the Act would become applicable only in the absence of
these words 'contract to the contrary'. [Para 12] [487-E-
F]
F
2.4. The condition regarding the clearance or
exemption from the Endowment Department is not a
document of title relating to the property which would
benefit the buyer for examination for the purpose of
completing the agreement for sale. Sub-section (c) of s.
G
55(1) also equally cannot be applicable in the facts and
circumstances of the instant case. It is evident from a
plain reading of s. 55 that this section becomes
applicable only in the absence of contract to the contrary.
H
478
SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.
A There is admittedly a contract for sale which clearly lays
{
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down the terms and conditions to govern the sale
transaction. The views expressed by the High Court that
since the Head Office of the Trust is registered at Kolkata
which would be enough to show that the relevant law
~~
B applicable to a charitable trust would be that of the State
in which the Head Office of the Trust is registered, is
accepted. The respondents had fulfilled their part of the
obligation when respondent No.2 sent a reply dated 6th
of June, 1979 intimating the appellants tExcerpt shown. Read the full judgment & AI analysis in Lexace.