RATTAN LAL (SINCE DECEASED) THROUGH HIS LEGAL REPRESENTATIVESversusS.N. BHALLA & ORS.

                        [2012] 8 S.C.R. 100


A       RATTAN LAL (SINCE DECEASED) THROUGH HIS
                 LEGAL REPRESENTATIVES
                                 V.
                        S.N. BHALLA & ORS.
                  (Civil Appeal No. 5787 of 2012)
B                        AUGUST 08, 2012

        [ALTAMAS KABIR AND J. CHELAMESWAR, JJ.]

        Specific performance - Agreement to sell - Payment of
C earnest money - As per clause of the agreement, if
  permission for transfer not granted within a specific time, the
   vendors had the option to determine the agreement -
   Permission not granted - Vendor determined the agreement
  and returned the earnest money - Purchaser by a letter
D telling the vendors that they were willing to purchase the
  property even beyond the stipulated period and telling that
  they accepted the earnest money under protest - Suit for
  specific performance of the agreement - Dismissed by trial
  court - Order upheld by High Court - On appeal, held:
E Agreement was wrongly terminated - The purchaser was
  always ready and willing to perform his part of contract - The
  refund of earnest money was accepted under protest -
  Vendors were not entitled to determine the agreement having
  not made positive efforts in procuring the necessary sale
F permission and clearance certificates - Suit decreed -
  However, in view of the facts that the agreement was executed
  34 years ago, during which period price of real estate has
  escalated sharply, and that the purchaser has not suffered any
  material loss, direction to vendors to pay the purchaser the
G costs of litigation 1~e. Rs. 25,00,0001-.

        Respondents entered into an agreement to sell the
    property in question with the appellant in the year 1978.
    The appellant (purchaser) paid Rs. 50,0001- as earnest

H                              100
RATTAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 101
                  BHALLA
money. The agreement stipulated that the vendors were A
to apply within 15 days for permission to transfer and to
obtain Clearance Certificate from tax authorities. As per
clause 9 of the agreement, if despite applying for the
permission within stipulated time, the seller did not get
the permission within 6 months from the date of the B
agreement, the vendor had the option to determine the
agreement.

     The vendors made application for transfer to the
authority concerned within 15 days. The authority asked
the vendors to file certain documents. Ultimately the C
authority did not grant sale permission on the ground that
affidavit filed by one of the vendors was defective.
Thereupon the vendors determined the agreement to sell
in terms of Clause 9 of the agreement, on the expiry of 6
 months period. They also refunded the earnest money. D

     In the meantime, the purchaser sent a letter to the
 vendors requesting them to file necessary documents
 with the authority to enable the authority to give the sale
 permission. Purchaser also sent a telegram to the E
 vendors stating that he was ready to purchase the
 property even beyond 6 months. Since there was no
 response from the vendors, he ~ent a legal notice stating
 that he was ready and willing to purchase the property
 and that he had accepted the earnest money under F
 protest. Thereafter, the purchaser filed a suit for specific
 performance of the agreement. Trial court dismissed the
 suit on the ground that since the purchaser accepted the
 refund of earnest money, he abandoned his claim and
 was no longer ready and willing to purchase the property; G
 that it was the purchaser who was in default in
 submitting documents before the authority; and that
 since the suit was filed on the last day of limitation, this
 also showed that the purchaser was not ready and willing
 to complete the sale transaction. Appeal against the order
                                                              H
     102       SUPREME COURT REPORTS             [2012] 8 S.C.R.


 A   was dismissed by High Court. Hence the present appeal.

           Disposing of the appeal, the Court.

        HELD: 1. The Agreement to Sell dated 8th
   September, 1978, was wrongly terminated. The reasoning
B of both the trial court and the High Court, cannot be
   supported. The acceptance of refund of the earnest
   money paid by the appellant to the respondents was not
   considered by the trial court as also the High Court in its
   proper perspective, as both the courts appeared to have
C ignored the fact that such refund had been accepted by
  the appellant, without prejudice to his rights and
  contentions in the suit. That the said amount was received
  under protest, was not considered either by the trial court
  or by the High Court, which had relied mainly on the
o provisions of Clauses 2 and 9 of the Agreement to Sell
  in dismissing the appellant's suit for specific
  performance. It is not found from the materials on record
  that the appellant had ever given up his claim under the
  Agreement or that he was not ready and willing to
E perform his part of the contract. [Paras 23 and 28] [114-
  D-F; 116-E]

       2. The trial court also quite erroneously absolved the
  respondents of their obligation under the Agreement to
  obtain sale permission and Income Tax Clearance
F Certificate, which were required for completion of the
  sale. The role of the appellant was merely that of a
  facilitator and the primary responsibility for obtaining
  permission and clearance from the Income Tax
  Authorities remained with the Respondents. In fact, there
G is nothing on record to indicate that by his acts, the
  appellant ever agreed to play a role other than that of a
  supportive role and that too in his own interest, in
  obtaining the necessary clearances. [Para 24] [114-G-H,
  115-A]
H
RATIAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 103
                  BHALLA
     3. Clause 9 was never meant to provide the A
respondents with an escape route if they themselves
failed to discharge their responsibility of not only
applying for sale permission, but to also follow up the
matter with the authorities in order to obtain the same
within the stipulated period of six months. In the absence B
of any material on record to show that the respondents
had made positive efforts for procuring the necessary
sale permission and clearance certificates, they were not
entitled to determine the Agreement in terms of Clause
9. [Para 25] [115-B-D]                                     c
     4. In the absence of definite evidence to show that
the appellant/purchaser was not ready and willing to
conclude the sale transaction, the respondents cannot be
given the benefit of the delay in concluding the same. It
is not correct to say that appellant's filing the suit for     D
specific performance on the last day of limitation
indicated that the appellant was not ready and willing to
complete the sale transaction, as otherwise he would
have filed the suit earlier. The appellant filed the suit
within the period of limitation and his readiness and          E
willingness to conclude the sale transaction was quite
obvious from the fact that he had taken upon himself the
burden of pursuing the matter with the authorities for
obtaining sale permission and Income Tax Clearance
Certificate. The role played by the appellant in this regard   F
cannot, therefore, be applied to his disadvantage. The
fact that the appellant had made several requests to the
 respondents to file a proper affidavit, as requested by the
 ODA, is another indication that the appellant was ready
 and willing to complete the sale transaction. [Paras 26       G
 and 27] [115-E-H; 116-A-B] .

    5. Having regard to the fact that the Agreement to Sell
was executed 34 years ago and during this period the
price of real estate has escalated sharply; and that the
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    104      SUPREME COURT REPORTS             [2012] 8 S.C.R.


A appellant has not suffered any material loss, since only
  the earnest money of Rs.50,000/- had been paid by him
  and that too was returned to the appellant immediately
  upon termination of the Agreement and the said amount
  was duly accepted by the appellant, the appellant should
B be compensated for the time spent by him in pursuing
  his remedy in respect of the Agreement to Sell.
  Accordingly, the suit is decreed and the respondents are
  directed to pay the appellant costs for the litigation right
  throughout, assessed at Rs.25,00,000/-, without the
C appellant having to proceed in execution for recovery of
  the same. In the event, the respondents fail to pay the
  said amount to the appellant within the aforesaid period,
  the appellant will be entitled to put this decree for costs
  into execution before the trial court and the said amount
D will carry simple interest at the rate of 18% per annum
  from one month after the date of the decree till its
  realization. [Para 29 and 30] [116-E-G; 117-B-D]

         Balwantrai Chimanlal Trivedi vs. M.N. Nagrashna and
    Ors. (1961) 1 SCR 113 - referred to.
E
                        Case Law Reference:
        (1961) 1 SCR 113        Referred to.         Para 20

      CIVIL APPELLATE JURISDICTION : Civil Appeal No.
F 5787 of 2012.

        From the Judgment & Order dated 18.12.2008 of the High
    Court of Delhi at New Delhi in RFA No. 272 of 2004.
      Altaf Ahmad, Anil R. Kher, Bhargava V. Desai for the
G Appellant.
         Mukul Rohtagi, Ashok Mathur, P.S. Sudheer, Dharmveer,
    Rishi Maheshwari for the Respondents.

        The Judgment of the Court was delivered by
H
RATIAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 105
                  BHALLA
    ALTAMAS KABIR, J. 1. Leave granted.                              A
       2. The Respondents are perpetual Sub-lessees of Plot
 No.C-2/13, Vasant Vihar, New Delhi, measuring 600 sq. yards,
 allotted to them through the Government Servants Co-operative
 House Building Society Limited. They erected a single-storeyed B
 structure on the said land and vide Agreement dated 8th
 September, 1978, they agreed to sell the said property to the
 Appellant together with the building erected thereon for a
 consideration of Rs.5,90,000/-. The Appellant paid a sum of
  Rs.50,000/- to the Respondents in advance to enable them to C
  apply for necessary permission for transfer and to obtain
. Clearance Certificate from the Tax authorities. The Agreement
  stipulated that on receipt of the said Clearance, the
  Respondents were to inform the Appellant of its receipt, and,
  thereafter, the Appellant was required to complete the sale
  within 60 days by paying the balance consideration agreed to D
  between the parties. In case the Respondents failed to apply
  for permission to sell within 15 days from the date of the
  Agreement, the Appellant had the option to determine the
  Agreement whereupon the Respondents were required to
  refund the earnest money and to pay damages to the Appellant E
  assessed at Rs.50,000/-.

     3. The provision in the Agreement which is crucial for a
 decision in this Appeal is Clause 9, which is extracted
 hereinbelow :                                                       F

     "9. That if the Seller applies for sale permission within the
     time stipulated in clause 8 above, but does not get it within
     6 months, the Seller may determine this Agreement and
     the Seller shall refund to the Purchaser the earnest money
     received by him without any damages or interest, within a       G
     period of 15 days from the date of determination of the
     Agreement."

    4. Inasmuch as, the sale was not being completed by the
 Respondents, the Appellant filed Suit No.278 of 2003, in the        H
    106       SUPREME COURT REPORTS                [2012] 8 S.C.R.


A Court of Additional District Judge, Delhi, for specific
  performance of the contract.

        5. Clause 2 of the Agreement to Sell stipulates that upon
   execution of the Agreement, the Respondents would
B immediately apply to the Delhi Development Authority (DOA)
   and the Competent Authority under the Urban Land (Ceiling and
   Regulation) Act, 1976, for permission to transfer the said
   property to the Purchaser/Appellant free from all encumbrances,
  after obtaining requisite permissions from any other Body or
C Authority. In Clause 3 of the Agreement, the Respondents also
  undertook to obtain the Income Tax Clearance Certificate
  immediately on obtaining the sale permission from the
  concerned authorities and to inform the Purchaser/Appellant by
  Registered Post with Acknowledgment Due accordingly. As
  indicated hereinabove, Clause 4 of the Agreement stipulates
D that on being informed of the receipt of the requisite permission
  from the Respondents, the Appellant would have to complete
  the sale within a period of 60 days from the date of receipt of
  such intimation and on being furnished with the copies of the
  permission and the Income Tax Clearance Certificate.
E
       6. Clause 8 of the Agreement to Sell is of special
  significance to the facts of this case and is, accordingly,
  extracted hereinbelow :

        "8. That if for any reason the Seller fails to apply for
F       permission to sell the said property to the Purchaser within
        a period of 15 days from the date of signing this
        Agreement, the Purchaser shall have the option to
        determine this Agreement and in that event the Seller shall
        refund the earnest money of Rs.50,000/- (Rupees Fifty
G       Thousand only) as received by him and pay to the
        Purchaser damages which are assessed as the sum of
        Rs.50,000/- (Rupees Fifty Thousand only)."

      7. As will be evident from the aforesaid Clause, the
H Purchaser was given the option to exit from the Agreement in
RATTAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 107
         BHALLA [ALTAMAS KABIR, J.]
case the Seller failed to apply for permission for sale of the      A
property within a period of 15 days from the date of signing of
the Agreement. Clause 9 of the Agreement which is crucial for
a decision in this appeal, contains the right of the Seller to
determine the Agreement and is extracted hereinbelow :

      "9.   That if the Seller applies for sale permission within   B
            the time stipulated in clause 8 above, but does not
            get it within 6 months, the Seller may determine this
            Agreement and the Seller shall refund to the
            Purchaser the earnest money received by him
            without any damages or interest, within a period of     C
             15 days from the date of determination of the
            Agreement."

       8. In terms of Clause 9 of the Agreement extracted
hereinabove, the Respondents submitted a request application D
in terms of Clause 2 of the said Agreement dated 12th
September, 1978, i.e., well-within the period of 15 days
contemplated in the said Clause. In response to the said
application made to the Delhi Development Authority (DDA) for
grant of sale permission, a letter dated 23rd/27th November, E
1978, was addressed by DDA to the Respondents asking for
certain documents to be filed. Interestingly, although, the said
 letter was addressed to the Respondents, it was responded to
 by the Appellant. The said letter sent by the Appellant has been
 marked as Ex.PW-1/3. On 7th March, 1979, the DDA informed
                                                                   F
the Respondents of the decision not to grant sale permission
on the ground that the affidavit filed by Shri S.N. Bhalla, one of
the two vendors was defective. On receiving the said intimation
 from the DDA, the Respondents sent a telegram to the
Appellant on 8th March, 1979, determining the Agreement to G
 Sell in terms of Clause 9 of the Agreement, on the expiry of
 the 6 months' period for completion of the sale on 7th March,
 1979. The Appellant was also informed that the earnest money
  paid by him would be refunded within 15 days. Pursuant to such
  intimation, on 12th March, 1979, the Respondents sent a Bank
                                                                    H
     108      SUPREME COURT REPORTS                 [2012] 8 S.C.R.


 A   Draft of Rs.50,000/- to the Appellant, being the earnest money
     received in terms of Clause 9 of the Agreement to Sell dated
     8th September, 1978.

         9. Coincidentally, on 8th March, 1979 itself, the Appellant
    also addressed a letter to the Respondents stating that the
 B Lieutenant Governor, Delhi, had granted permission for sale of
    House No.C-2/13, Vasant Vihar, New Delhi (the property in
    question), in favour of the Appellant. However, the same could
    not be communicated since the affidavit filed by Shri S.N. Bhalla,
    the Respondent No.1 herein, was found to be defective and
C such permission could be conveyed only on production of the
    correct affidavit as required by the DOA. The Respondents
    were, accordingly requested by the Appellant to file a proper
    affidavit in the Department and to file all the necessary
   documents with the DOA to enable them to convey the required
D sale permission. It was also mentioned that the failure to do so
   would make the Respondents responsible for all costs and
   consequences thereof. The original letter No. F.H.(199)78-CS/
   DOA dated 7th March, 1979, was attached with the notice sent
   on behalf of the Appellant. The said letter was followed up by
E a telegram sent by the Appellant indicating that time was not
   the essence of the Agreement and that he was prepared to
   purchase the house of the Respondents even beyond the
   period of 6 months since, although, ODA was ready to give
   permission, the Respondents had defaulted in filing the correct
F affidavit to enable DOA to grant permission.

       10. Inasmuch as, no positive response was received by
  the Appellant from the Respondents to his communications, he
  sent a legal notice to the Respondents informing them that he
  was ready and willing to complete the transaction and to have
G the Sale Deed executed in his favour for the property in question
  by paying the balance price. The Respondents were asked to
  inform the Appellant as to how the transaction could be
  completed so that he could tender the sale consideration by
  Bank Draft. It was also indicated in the notice that the Bank
H
RATIAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 109
         BHALLA [ALTAMAS KABIR, J.]
Draft sent by the Respondents refunding the earnest money,           A
had been encashed under protest. but it did not mean that the
contract was repudiated. The contract continued to subsist and
the Appellant was always ready and willing to perform his part
of the contract.
                                                                     B
     11. In the absence of a positive response to the said notice,
the Appellant filed Suit No.278 of 2003, on 8th March, 1982,
for specific performance of the Agreement to Sell dated 8th
September, 1978. On the pleadings of the parties, the following
issues were settled by orders dated 1st November, 1983 and           C
19th February, 1991 :

      "(1)   Whether the Plaintiff has been ready and willing to
             perform his part of agreement dated 08.09.1978?

      (2)    Whether the Defendant has committed breach of           D
             the said Agreement?

      (3)    Whether the agreement dated 08.09.1978 stands
             terminated or frustrated as alleged by the defendant
             and there is no subsisting agreement to sell?
                                                                     E
      (4)    Whether the plaintiff is to be granted relief of
             specific performance in the facts and
             circumstances of the present case?

      (5)    Whether the agreement dated 08.09.1978 is void
                                                                     F
             for uncertainty?

       (6)   Whether the time was the essence of the contract
             and whether the agreement dated 08.09.1978 was
             rightly terminated?"
                                                                     G
     The last issue was an additional issue settled vide order
 dated 19th February, 1991.

      12. Considering Clauses 2, 8 and 9 of the Agreement to
 Sell dated 8th September, 1978, the Trial Court dismissed the       H
     110      SUPREME COURT REPORTS                 [2012] 8 S.C.R.


A suit, inter alia, upon holding that the Appellant had intentionally
   and without demur accepted refund of the earnest money sent
   to him by Bank Draft and, thereafter, he sent the lawyer's notice
   on 26th April, 1979, stating that the said Draft was encashed
  without prejudice to his rights and contentions in the Suit. The
B learned Trial Court held that encashing the Bank Draft amounted
  to acceptance of the contract being determined. The learned
  Trial Court also was of the view that in view of his conduct it
  would be clear that the Appellant had abandoned his claim
  under the contract and he was no longer ready and willing to
c pursue his remedies under the contract. The Trial Court also
  took note of the fact that although the Agreement contemplated
  that the Respondents would take steps to obtain the necessary
  sale permission and the Income Tax Clearance Certificate, the
  same was pursued by the Appellant and that it was the
D Appellant who was in default in complying with the requests
  made by DDA, which had resulted in the sale permission not
  being granted. The Trial Court categorically held that there was
  deficiency in respect of the documents to be filed. Even on the
  question of the Suit being filed on the last date of limitation, the
  same was construed to mean that the Appellant was not ready
E and willing to complete the sale transaction.

       13. Aggrieved by the judgment and decree passed by the
  learned Additional District Judge on 10th February, 2004, the
  Appellant filed a Regular First Appeal before the Delhi High
F Court, being RFA No.272 of 2004, which was dismissed by the
  impugned judgment.

       14. The Division Bench of the Delhi High Court in effect,
  accepted the reasoning of the Trial Court and indicated further
G that a contract, which is by its nature determinable, is incapable
  of being specifically enforced under Section 14(1)(c) of the
  Specific Relief Act, 1963. The Division Bench held that in terms
  of Clause 9 of the Agreement to Sell, the contract was
  determinable if the sale permission was not forthcoming within
  a period of 6 months from the date of execution of the
H
RATTAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 111
         BHALLA [ALTAMAS KABIR, J.]
Agreement. The Division Bench also referred to Section 20 A
of the aforesaid Act to indicate that relief of specific
performance is discretionary and in the instant case, such
discretion should not be exercised in favour of the Appellant
who had approached the Court on the last date of limitation,
i.e., within 3 years from the date when cause of action for the B
suit had accrued. Observing that it was a matter of common
knowledge that between 1979 and 1982 the price of property
 had risen very sharply in Delhi, the Division Bench also
 observed that it could not also be lost sight of that the Appellant
 had accepted the refund of Rs.50,000/-, which had been paid C
 by him to the Respondents as earnest money-cum-part Sale
 consideration. It is on the basis of such reasoning that the
 appeal was dismissed by the Division Bench of the Delhi High
  Court.

       15. Mr. Altaf Ahmad, learned Senior Advocate, who D
 appeared in support of the Appeal, contended that in terms of
 Clause 2 of the Agreement to Sell, the Sellers were under an
 obligation to apply to the DDA and the Competent Authority
 under the Urban Land (Ceiling and Regulation) Act. 1976, to
 obtain the requisite permission to transfer the property to the E
 Appellant, free from all encumbrances. Mr. Ahmad submitted
 that the liberty given to the Respondents/Sellers under Clause
 9 of the Agreement to exit therefrom could not be taken
 advantage of by the Sellers in case they were in default in
 obtaining the said permission within the stipulated time, without F
  making serious and conscientious efforts to obtain the same.
  Mr. Ahmad submitted that in the instant case, the Respondents
  had been informed by the DDA of the deficiencies in the
  affidavit fried by them, but they did not take any step to remove
  the deficiencies. Mr. Ahmad submitted that it is no doubt true G
  that the Appellant/Purchaser had taken upon himself the burden
  of acquiring the sale permission and Income Tax Clearance
  Certificate, but it was only to assist the Respondents and the
   same did not absolve the Respondents of their responsibility
   of performing the tasks that they were required to perform under H
        112     SUPREME COURT REPORTS                [2012] 8 S.C.R.


    A   the Agreement. Mr. Ahmad contended that the role played by
        the Appellant in the entire episode was at best that of a
        facilitator in his own interest.

          16. Mr. Ahmad submitted that both the Trial Court, as well
 8 as the High Court, had erred in holding that the Appellant was
     not ready and willing to complete the sale transaction and the
     same would be evident from the fact that he filed the suit for
    specific performance on the last date of limitation. Mr. Ahmad
     submitted that the very fact that the Appellant took on himself
C the burden of assisting the Respondents to procure the
    necessary sale permission and Income Tax Clearance
    Certificate, indicated his willingness and anxiety to complete
    the transaction. Learned counsel submitted that despite the
   Appellant's readiness and willingness to complete the sale
   transaction, he was unable to do so on account of the
D deficiencies on the part of the Respondents in complying with
   the instructions of the DOA. Learned counsel submitted that both
   the Courts below had dealt with the issues in the suit without
   properly understanding the case made out by the Appellant vis-
   a-vis the terms and conditions of the Agreement to Sell dated
E 8th September, 1978, and the judgment and decree of the Trial
   Court as well as the judgment of the High Court were liable to
   be set aside.

       17. On the other hand, appearing for the Respondents, Mr.
F Mukul Rohatgi, learned Senior Advocate, contended that
  despite the obligation cast upon the Respondents to obtain the
  necessary sale permission and Income Tax Clearance
  Certificate, the Appellant had taken upon himself the
  responsibility to obtain the same and the Respondents could
G not be made responsible for the Appellant's failure to obtain
  the same. Mr. Rohatgi submitted that the Respondents/Sellers
  were fully justified in invoking Clause 9 of the Agreement to Sell
  and to terminate the same.

          18. In order to drive home his point, Mr. Rohatgi submitted
H
RATTAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 113
         BHALLA [ALTAMAS KABIR, J.]

that the letters dated 27th November, 1978 and 7th March,             A
1979, which had been addressed to the Respondents by the
Executive Officer, DOA, requesting that a proper affidavit be
filed in the department to enable the ODA to take further steps
 in the matter, had been received by the Appellant and
 forwarded to the Respondents in original with his letter dated       B
 8th March, 1979.

     19. Mr. Rohatgi urged that from his conduct it would be
clear that the Appellant was not ready and willing to complete
the sale and both the Courts had rightly dismissed the                C
Appellant's suit.

      20. Mr. Rohatgi referred to various decisions on Section
 20 of the Specific Relief Act, 1963, to bolster his submissions,
 but the same are all peculiar to the facts of each case. Relying
 on the Constitution Bench decision of this Court in Shri             D
 Batwantrai Chimanlal Trivedi Vs. M.N. Nagrashna and
 Others [(1961) 1 SCR 113], Mr. Rohatgi lastly submitted that
 the Supreme Court is not bound to interfere under Article 136
 of the Constitution when dealing with an appeal where there is
 no failure of justice.                                                   E

       21. What emerges from the submissions made on behalf
 of the respective parties is that the Appellant's suit was
 dismissed by the Trial Court on the finding that he had
 intentionally and without demand, accepted refund of the                 F
 earnest money, though, without prejudice to his rights and
 contentions in the suit. The learned Trial Court also found that
  by encashing the Bank Draft, the Appellant had clearly
  indicated that he was no longer interested in completing the
 sale transaction. The Trial Court also took note of the fact that
  although under the Agreement it was for the Respondents to              G
  obtain the sale permission and Income Tax Clearance
   Certificate, it was the Appellant who had elected to pursue the
   matter and was, therefore, responsible for the failure to obtain
   the same within the stipulated period of six months, which
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      114        SUPREME COURT REPORTS                 [2012] 8 S.C.R.


  A   entitled the Respondents/Sellers to terminate the Agreement
      under Clause 9 thereof.

            22. The High Court approved the view taken by the Trial
       Court, but adding that in view of Section 14(1)(c) of the Specific
       Relief Act, 1963, the contract, which was by its very nature
 8
      determinable, was incapable of being specifically enforced. The
      High Court, for abundant caution, also referred to Section 20
      of the aforesaid Act to indicate that the relief of specific
      performance was purely discretionary and dependent on the
      facts of each case. The High Court also took note of the steep
 C    rise in the prices of real estate while dismissing the Appellant's
      suit for specific performance.

         23. In our view, the reasoning of both the Trial Court and
    the High Court, cannot be supported on several grounds. Firstly,
 D the acceptance of refund of the earnest money paid by the
   Appellant to the Respondents was not considered by the Trial
    Court as also the High Court in its proper perspective, as both
   the Courts appeared to have ignored the fact that such refund
   had been accepted by the Appellant, without prejudice to his
E rights and contentions in the suit. That the said amount was
   received under protest has not been considered either by the
   Trial Court or by the High Court, which had relied mainly on the
   provisions of Clauses 2 and 9 of the Agreement to Sell in
   dismissing the Appellant's suit for specific performance. We
F do not find from the materials on record that the Appellant had
   ever given up his claim under the Agreement or that he was
   not ready and willing to perform his part of the contract.
                                                   .
       24. Secondly, the Trial Court also quite erroneously
  absolved the Respondents of their obligation under the
G Agreement to obtain sale permission and Income Tax
  Clearance Certificate, which were required for completion of
  the sale. We reiterate that the role of the Appellant was merely
  that of a facilitator and the primary responsibility for obtaining
  permission and clearance from the Income Tax Authorities
H remained with the Respondents. In fact, there is nothing on
RATTAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 115
         BHALLA [ALTAMAS KABIR, J.]
record to indicate that by his acts, the Appellant ever agreed        A
to play a role other than that of a supportive role and that too in
his own interest, in obtaining the necessary clearances.

     25. The other point raised on behalf of the Respondents
regarding the import of Clause 9 of the Agreement to sell is          B
also not of much substance. In our view Clause 9 was never
meant to provide the Respondents with an escape route if they
themselves failed' to discharge their responsibility of not only
applying for sale permission, but to also follow up the matter
with the authorities in order to obtain the same within the
stipulated period of six months. In the absence of any material       C
on record to show that the Respondents had made positive
efforts for procuring the necessary sale permission and
clearance certificates, they were not entitled to determine the
Agreement in terms of Clause 9.
                                                                      D
     26. The last point, and, in our view the most substantive
point, is the steep hike in the value of real estate which has
been taken note of by the High Court. However, in the absence
of definite evidence to show that the Appellant/purchaser was
not ready and willing to conclude the sale transaction, the           E
Respondents cannot be given the benefit of the delay in
concluding the sarrie.

      27. Both the Courts below have attached a good deal of
 importance to the fact that the Appellant filed the suit for
 specific performance on the last day of limitation, which,           F
 according to the learned Judges, indicated that the Appellant
 was not ready and willing to complete the sale transaction, as
 otherwise he would have filed the suit earlier. We have no
 hesitation in rejecting the said contention, since the Appellant
 filed the suit within the period of limitation and his readiness     G
 and willingness to conclude the sale transaction was quite
  obvious from the fact that he had taken upon himself the burden
  of pursuing the matter with the authorities for obtaining sale
  permission and Income Tax Clearance Certificate. The role
\played by the Appellant in this regard cannot, therefore, be         H
      116       SUPREME COURT REPORTS               [2012) 8 S.C.R.


 A applied to his disadvantage. In our view, the approach of both
     the Courts below to the problem was coloured by the fact that
     the Appellant had actively involved himself in the matter of
     obtaining the sale permission as well as Income Tax Clearance
     Certificate. The fact that the Appellant had made several
 B requests to the Respondents to file a proper affidavit, as
    requested by the ODA, is another indication that the Appellant
    was ready and willing to complete the sale transaction. Both
    the Courts below dealt with the suit filed by the Appellant, as
   though the Respondents had no obligation under the agreement
 c for completing the sale and this appears to have influenced their
   judgment in dismissing the Appellant's suit for specific
   performance.

           28. Issue Nos.1, 3 and 4 as settled by the Trial Court on
     1st November, 1983 and 19th February, 1991, are, therefore,
 D answered in favour of the Appellant and the remaining issues
     are answered against the Respondents. In the light of what has
     been indicated hereinabove, we are of the view that the
     Agreement to Sell dated 8th September, 1978, has been
     wrongly terminated.
 E
          29. This, however, brings us face to face with a rather
    difficult situation having regard to the fact that the Agreement
    to Sell was executed 34 years ago on 8th September, 1978,
    in respect of the suit property. We cannot shut our eyes to the
F fact that during this period the price of real estate has escalated
   sharply. In addition to the above, the Appellant has not suffered
   any material loss, since only the earnest money of Rs.50,000/
   - had been paid by him to the Respondents and the balance
   consideration was yet to be paid when the agreement came
G to be terminated. Even the said sum of Rs.50,000/- was
   returned to the Appellant immediately upon termination of the
   Agreement and the said amount was duly accepted by the
   Appellant, though by recording his objections subsequently. The
   Appellant, therefore, has not suffered any monetary loss, and,
   on the other hand, the value of the property must have sky-
H
                                                                              I



RATTAN LAL (SINCE DECEASED) THR. LRS. v. S.N. 117
         BHALLA [ALTAMAS KABIR, J.]
rocketed during the period between the execution of the               A
Agreement till date. In fact, that is why there is no prayer in the
alternative for return of any sums advanced, which is one of the
usual prayers in suits for specific performance.

      30. However, we are also of the view that the Appellant B
should be compensated for the time spent by him in pursuing
his remedy in respect of the Agreement to Sell. Accordingly,
we decree the suit, but instead of decreeing the suit for specific
performance of the Agreement, we direct that the Respondents
shall pay the Appellant costs for the litigation right throughout, C
 assessed at Rs.25,00,000/-, to be paid by the Respo.ndents
 to the Appellant within one month from date, without the
 Appellant having to proceed in execution for recovery of the
 same. In the event, the Respondents fail to pay the said amount
 to the Appellant within the aforesaid period, the Appellant will
  be entitled to put this decree for costs into execution before the D
  Trial Court and the said amount will carry simple interest at the
  rate of 18% per annum from one month after the date of the
  decree till its realization.

       31. The Appeal is disposed of, accordingly.                        E
  K.K.T.                                      Appeal disposed Qf.