Indian Kanoon - Search engine for Indian Law

The first defendant filed a written statement. Therein, he admitted execution of Ex.A1 agreement of sale and receipt of the initial part payment of Rs.10,00,000/- on 26.07.2006. He however stated that this agreement was executed as the plaintiff expressed his inability to pay the entire sale consideration in lump sum directly. He stated that the sale consideration was to be appropriated by the defendants towards purchase of lands in Nalgonda District for doing real estate business. He claimed that the plaintiff was informed of the purpose for which the land was being sold and that two months time was agreed upon for payment of the entire sale consideration so as to avoid future problems. The plaintiff agreed and promised to pay the entire consideration within two months. However, the sale agreement was drawn up stipulating four months time, contrary to the agreed terms and conditions. At that stage, the mediators, Vasantha Rao, a Real Estate Broker, Veeranki Satyanarayana, a Surveyor, Vemuri Satyanarayana and another person, by name Satyanarayana, who had settled the transaction, prevailed upon him and made him believe that the plaintiff would pay the entire sale consideration within two months. Believing their words, he agreed to execution of the agreement of sale in its existing form. However, the plaintiff did not pay the further sum of Rs.10,00,000/- within one month from the date of execution of the agreement as promised by him. Further, the plaintiff never informed him of his readiness to get the property registered in his name by paying the balance sale consideration. Having waited till 26.09.2006, he tried to secure the presence of the plaintiff to inform him that the balance sale consideration was urgently required to pay the sale price to his vendors at Nalgonda so as to avoid forfeiture of the amount of advance already paid by him. He claimed that the plaintiff was not traceable despite his best efforts. He further claimed that he contacted the mediators who had settled the suit transaction and requested them to bring the plaintiff to perform his part of the contract. Though they promised to do so, neither the plaintiff nor the mediators made good their promise. He gave details of the time stipulated by the mediators and the failure of the plaintiff and the mediators to turn up in accordance therewith. He claimed that on 24.11.2006, he informed the mediators that he would wait at Registrars Office on 25.11.2006 and asked them to bring the plaintiff and to see that he performed his part of the contract. According to him, he and his children, the second and third defendants, went to the Sub-Registrars Office, Eluru, at 10.00 AM on 25.11.2006 and again, the mediators were informed that they were waiting for the plaintiff and that if he failed to turn up, the suit agreement of sale would stand cancelled. However, neither the plaintiff nor the mediators came to the Sub-Registrars Office at Eluru till the evening of 25.11.2006. The first defendant stated that he then got issued Ex.A4 telegram to the plaintiff informing him that the suit agreement of sale stood cancelled and terminated. He stated that as the plaintiff failed to perform his part of the contract, they were not liable to pay the advance or register the property in his favour. He said that the plaintiff issued reply telegram dated 05.12.2006 saying that he was unable to come to Eluru because of his health and requesting extension of the agreement time, promising that he would pay interest on the balance. He further stated that when he approached the vendors at Nalgonda on 26.11.2006 and explained his predicament, he had to forfeit the advance amount of Rs.25,00,000/- paid by him. He claimed that he sustained loss as he failed to purchase lands at Nalgonda and the value of such lands increased abnormally. He claimed that he had lost a golden opportunity to capitalize on the boom in the land values at Nalgonda.

The first defendant examined himself as D.W.1. Nekkanti Narasimha Rao, a third party, was examined as D.W.2 and he spoke of the first defendants transaction at Nalgonda and his loss of the advance of Rs.25,00,000/-. He also claimed that he was present at the Sub-Registrars Office, Eluru, on 25.11.2006 with the first defendant from 10.00 AM onwards. The defendants also examined the Mandal Surveyor, Denduluru Mandal, as D.W.3 and their relation as D.W.4. They marked in evidence Exs.B1 to B6. Ex.B1 is the reply telegram dated 05.12.2006 issued by the plaintiff to the first defendant; Ex.B2 is the reply telegram dated 05.12.2006 issued by the plaintiff to the third defendant; Ex.B3 is the paper publication dated 19.12.2006 issued by the first defendant; Ex.B4 is the bill; Ex.B5 is the certificate dated 12.11.2007 issued by the Mandal Surveyor, Denduluru; and Ex.B6 is the cash bill, with arrival date 05.10.2006 and departure date 06.10.2006, issued by Siddhartha Hotel, Nalgonda.

Heard Sri Srinivasa Rao Velivela, learned counsel representing Sri Kambhampati Ramesh Babu, learned counsel for the appellants/defendants, and Sri K.Chidambaram, learned counsel for the respondent/plaintiff.

Sri Srinivasa Rao Velivela, learned counsel, would assert that a plain reading of Ex.A1 agreement of sale dated 26.07.2006 would demonstrate that time was very much the essence of the contract. He would point out that the agreement stipulated that the entire sale consideration had to be paid by 25.11.2006 and even when the plaintiff made the belated payment after the expiry of the stipulated one month period from the date of execution of the suit agreement of sale, the endorsement under Ex.A3 categorically required the plaintiff to make the payment of the balance sale consideration by 25.11.2006, the date initially fixed. Learned counsel would assert that the suit property was sold by the first defendant and his children, the second and third defendants, for the purpose of investment in lands at Nalgonda as a real estate venture and the failure on the part of the plaintiff to come through caused them irreparable loss. He would further state that though the agreement stated to the effect that time for payment was four months, the understanding between the parties was that the plaintiff would pay the balance consideration within two months and that was the reason why the first defendant, speaking as D.W.1, gave details of the various demands made by him for payment of the balance sale consideration long before 25.11.2006. He would assert that the first defendant waited at the Sub-Registrars Office, Eluru, on the stipulated date, 25.11.2006, and as the plaintiff failed to turn up, a telegram was gotten issued at 5.10 PM on the said day canceling the suit agreement of sale and terminating the transaction thereunder. The said telegram was received and the plaintiff got issued Exs.B1 and B2 telegrams on 05.12.2006 seeking extension of the agreement due date on the ground of ill- health. The first defendant thereafter got Ex.B3 public notice published through his Advocate in Eenadu Telugu newspaper dated 19.12.2006, West Godavari District Edition, informing the general public that the suit agreement of sale dated 25.11.2006 was cancelled. It was long thereafter that the plaintiff got issued Ex.A5 notice on 25.01.2007, wherein he claimed that he was always ready and willing to pay the balance sale consideration but the defendants were postponing on one pretext or the other by representing that the original title deeds were not available. He however admitted receipt of Ex.A4 telegram and the intimation thereunder that the defendants had cancelled and terminated the agreement of sale. He asserted through his Advocate that the defendants had not gone to the Sub-Registrars Office on 25.11.2006 and never informed him about their readiness. He claimed that the defendants had no right to revoke or terminate the contract of sale unilaterally and called upon the defendants to receive the balance sale consideration and execute a registered sale deed in his favour. In reply, the defendants issued Ex.A6 legal notice dated 07.02.2007, wherein they reiterated that their main interest in selling the suit schedule land was to develop their real estate business at Nalgonda and as the plaintiff had failed to fulfill the contract in terms of the time stipulations, the defendants had cancelled the suit agreement of sale. They adverted to the fact that a caveat petition had been lodged before the Senior Civil Judge, Eluru, and cautioned the plaintiff not to initiate any vexatious litigation.

Notably, the aforestated agreement of sale did not mention the pressing need for the sale consideration to enable the defendants to make payment for the land proposed to be purchased by them at Nalgonda. On the other hand, the agreement reads to the effect that the sale consideration was to be spent towards their family expenses and sundry debts and only the balance left thereafter was to be utilized for family improvement and development. That being said, it cannot be construed that merely because the defendants did not state this, it would mean that the agreement could be acted upon at any time that the plaintiff chose. Be it noted that there was a clear stipulation that both the parties to the agreement contemplated that the transaction should be concluded by 25.11.2006. The agreement reads to the effect that payments were to be made by the plaintiff within the time stipulated and the obligation cast on the defendants was that they would get the land measured in the presence of the plaintiff and neighbours by 25.11.2006 so that the exact extent sold thereunder could be delivered to the plaintiff. This was necessary as the agreement itself recorded that the second and third defendants inherited a larger extent of property from their grand father and settlement of the account was left open till the actual measurement was done so that it could be finalized thereafter, at the rate of Rs.6,00,000/- per acre. It is an admitted fact that the plaintiff failed to adhere to the first stipulation that he would pay Rs.10,00,000/- within one month from the date of execution of the agreement. As per this condition, he had to pay the said sum by 26.08.2006. It is however an admitted fact that he paid Rs.5,00,000/- on 02.09.2006 under Ex.A2 endorsement signed by the first defendant and Rs.6,25,000/- on 10.11.2006 under Ex.A3 endorsement by all the defendants. Significantly, Ex.A3 endorsement stipulated that the balance sale consideration of Rs.31,43,000/- had to be paid by the plaintiff in terms of the agreement date, i.e., 25.11.2006, and it was for the plaintiff to get the registration at his own expense.