HPA INTERNATIONAL versus BHAGWANDAS FATEH CHAND DASWANI AND ORS.

Citation: [2004] SUPP. 3 S.C.R. 31 · Decided: 13-07-2004 · Supreme Court of India · Bench: SHIVARAJ V. PATIL · Disposal: Dismissed

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Judgment (excerpt)

HPA INTERNATIONAL 
A 
v. 
BHAGWANDAS FATEH CHAND DASWANI AND ORS. 
JULY 13, 2004 
[SHIVARAJ V. PATIL AND D.M. DHARMADHIKARI, JJ.] 
B 
Contract Act, 1872 : 
Ss. 31 and 32-Contingent contract-Enforcement of-Contract for 
conveyance of entire life interest of vendor and reversionary interest of 
remaindermen though latter not a party to the contract-Conveyance C 
contingent on obtaining sanction of Court as to conveyance of interest of 
remainder men-Specific pe1formance-Permissibility of-Held, when 
sanction could not be obtained for reasons beyond the control of the 
parties, contract cannot be directed to be specifically enforced-Specific 
' 
Relief Act, 1963-Ss. 10 and 20. 
D 
Ss. 73, 53, 56 and 32-Fundamental or repudiatory breach-Test for 
ascertaining-Consequences if contract rendered unenforceable due to 
reasons beyond the control of the parties-Frustration of contract-
Question of facts to be decided in each case. On facts, held, vendor cannot E 
be held to be guilty of breach so as to entitle vendor to seek specific 
pe1formance of transfer of life interest of vendor-Specific Relief Act, 
1963-Section JO and 20. 
Section 43-Applicability of-Discussed. 
Specific Relief Act, 1963-S. 12(3)-Nature of power under-
Explained. 
Trusts Act, 1982-Ss. 90, 91 and 92-Property acquired with notice 
of existing contract-Constructive trust arising thereby-Parties that are 
bound-Discussed. 
Code of Civil Procedure, 1908 : 
S. 1 I-Finality of decree not appealed agail'st-Ejfect of 
F 
G 
S. 144-Reversal of decree transferring life interest in property to one H 
31 
32 
SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R. 
A vendee-Adjustment and payment of cost of construction raised on property 
by Vendee in period prior to reversal of said decree, ordered by Court 
reversing decree-Held, on principle of restitution contained in S. 144 
there was no ground to interfere with the said oder of adjustment and 
payment. 
B 
Constitution of India-Art. 136-Abuse of process-Direction of 
Division Bench of High Court ordering payment of a certain sum in favour 
of prior vendee against subsequent vendee for having misled the Court 
Held, the direction deserved no interference. 
C 
The vendor of the suit property, grandfather of respondent No. 
6 executed a Will and two Codicils on 7.3.1948, under which he was 
bequeathed the right of enjoyment during his life, of the estate of the 
testator, including the suit property but without powers of alienation. 
In the Will, it was provided that after the death of the vendor, his male 
D issue living at the time of his death would take all the properties 
absolutely. In the absence of any such male issue of the vendor, the 
properties would be taken by other descendants, the 'reversioners'. 
The testator died on 23.10.1956. On 26.6.1977, the vendor entered 
into an agreement of sale of the suit property with the appellant. It was 
E clearly recited in the agreement that the sale of the property was 
necessitated because of the pressing demands of public authorities 
towards dues and tax liabilities on the estate and likelihood of coercive 
recovery of public dues by attachment and sale by public auction. The 
vendor, therefore, agreed to sell and the purchaser agreed to purchase 
F the entire interest in the suit property inclusive of life interest of the 
Vendor and the interest of the reversioners (described as remainder 
men) free from all encumbrances, for a total price of 5.5 lacs. A sum 
of Rupees 25,000 was paid as advance. The balance of the sale 
consideration was to be paid by the purchaser by bank drafts in favour 
of the concerned public authorities for discharging the public dues and 
G taxes. The purchaser agreed to pay Rupees 18,000 to the tenant in. 
occupation of the property which was the liability of the vendor. The 
vendor agreed to obtain at his own cost and expense the sanction of the 
High Court of Madras for sale of life interest of the remainder men 
in the property. The agreement further provided that in case the 
H sanction of the Court was not accorded for the sale, the agreement shall 
HPA INTERNATIONAL v. B.F.C. DASWANl 
33 
forthwith stand cancelled and the vendors shall return the advance A 
amount of Rupees 25,000 to the purchaser. 
There was a separate stipulation in.the agreement that if after the 
sanction of the Court the vendor commits breach of the contract he 
shall return the advance money of Rupees 25,000 and pay a sum of 
Rupees 15,000 to the vendee by way of

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