LexMANICKLAL MUKHERJEE {KALI DURGA ESTATE), CALCUTIA versus COMMISSIONER OF SANCHAITA INVESTMENTS CALCUTTA
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MANICKLAL MUKHERJEE
{KALI DURGA ESTATE), CALCUTIA
v.
COMMISSIONER OF SANCHAITA INVESTMENTS CALCUTIA
OCTOBER 14, 199i
(S. RANGANATHAN, V. RAMASWAMI AND
YOGESHWAR DAYAL, JJ.)
Contract Act, I 872:
Agreement to sell-Conditions of sale-Non-perfonnance by buyer--
Held, agreement became unenforceable and stood cancelled.
Attachment order deeming property as of buyer-Validity of
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B
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The respondent was appointed by this Court as Commissioner in D
respect of matters of a firm. He attached the. premises in dispute treating
it as belonging to the said firm .. The Appellants filed an objection claiming
ownership of the premises. The objection petition Was forwarded to the
High Court.
The appellants conteded before the High Court that although under E
a registered agreement the appellant firm bad agreed to sell the premises
to the firm in respect of which the respondent was appointed as the
Commissioner, yet in vi.W of the default of the buyer firm, the agreement
. became void and unenforceable.
The case of the appellants was that under the agreement the buyer
was to pay the balance of the sale amount and take possession of the
premises within 15 days of receipt of the notice from the vendor in this
respect, and if the buyer failed to perform its part, the vendor was entitled
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to cancel the sale and to refund to the buyer the amount it had paid after
forfeiting Rs. 1,50,000 by way of liquidated damages. The appellants by G
notice dated 13.11.1980 informed the buyer that the premises was ready
for delivery of possession and the buyer could take possession thereof on
or before 30.11.1980. The buyer failed and neglected to pay the balance
amount and to take possession on or before the stipulated date and
accordingly the agreement to sell became unenforceable and void and it H
967
968
SUPREME COURT REPORTS [1992J.SUPP. l S.C.R.
A was also cancelled. The cancellation of sale was further confirmed by a
settlement entered into between the parties during the pendency or suit
filed by the appellants for the purpose. In pursuance or the settlement the
buyer firm not only received back all the money it bad paid to the vendor
but the latter also paid Rs.50,000 to the former besides forfeiting its claim
B to Rs.1,50,0oo which was agreed to be paid by the buyer to the vendor as
unliquidated damages In case the buyer failed to perform its part.
The High Court rejected the claim or the appellants and conftm1ed
the attachment order. The appellants filed the Instant appeal. ·
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Allowing the appeal, this Court,
HELD: 1.1. The agreement to sell is not enforceable and had been
cancelled. It has come to an end by non-performance or coodltloos or the
sale by the purchaser. [pp. 973-H; 974·A)
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1.2. Under the terms or agreement if the purchasers railed to take
possession within the stipulated period the vendor was entitled to fmfelt
the security deposit and the agreement itself would stand cancelled. Ad·
mittedly the vendor issued the notice dated 13.11.1980 to the buyer that
the premises was ready for delivery of possession cio or before 30.11.1980.
It was not' sb«iwn that the buyer ftrm was ready and willing to perform
E their part and the default, If any, was that or the vendors, or that the
purchaser was willing to take possession but It was not handed over.
F
G
[p. 972 F..-G)
1.3. The agreement to sell is dated 21.6.1980; the attachment was
effected on 14.4.1987 and the order was to sell the property in public
auction as if it had become the property of the buyer nrm without any
direction to the appellant to execute a sale deed In favour of the respon·
dent. Since the agreement had not frunctlfted into a sale, the buyer could
not become the owner of the property. [p. 973 F ·GI
1.4. The judgment of the High Court is set aside and the attachment
made by the respondent on 14.4.1987 is vacated. [p. 974 B·C)
CIVIL APPELLATE JURISDICTION : Civil Appal No. 3459 of
1991.
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From the Judgment and Order dated 7.111990 of the Calcutta High
MANICKLAL v. COMMR, SANCHAITA INVESTMENT [RAMASWAMI, J.) 969
Court in Matter No.6684 of 1988.
Dr. S. Ghosh, N.C. Mullick, P.K. Mullick and Kailash Vasdev for the
Appellants.
Gobind Mukhoty, H.K. Puri and Samir Ghosh for the Respondent. .
The Judgment of the Court was delivered by
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V. RAMASW AMI, J. The respondent-Commissioner Sanchaita Invest-
ments in exercise of the powers vested in him under orders of this Court
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