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In substance, the main submission advanced by learned counsel Shri K. Parasaran on behalf of the vendee is that the vendor clearly committed a breach of the terms of the sale agreement Ex. P-1. During pendency of the suit seeking sanction of the court, the contract was formally terminated by lawyer's notice dated 11.9.1979 sent by him. It is submitted that actions such as of sending notice of terminating the contract, thereafter instructing his lawyer to withdraw the suit for sanction followed by the negotiations which were proved to have been held to sell the suit property to the subsequent vendee, were clearly mala fide attempts on the part of the vendor to resile from the contract for getting higher price for the property. It is pointed out that an attempt was made to mislead the Court by creating confusion that Bob Daswani and Bhagwandas Daswani were two different persons and the subsequent vendee had no knowledge of the prior agreement entered with the plaintiff- vendee. This deception sought to be practised on the opposite party and the court was exposed during trial and the learned single judge has imposed penalty on the subsequent vendee for the misconduct of misleading the court. It is submitted that the subsequent vendee having purchased the property with knowledge of the prior agreement holds the property in trust for the benefit of the prior vendee and is obliged in law to make over the property to the prior vendee under decree for specific performance of the prior contract. Sections 90, 91 & 92 of the Indian Trusts Act are relied for the above proposition and need reproduction at this stage for better appreciation of the arguments advanced on this point on behalf of the vendee :-

In reply to the argument that the sanction suit was not prosecuted by the vendor deliberately to render it infructuous with a design to back out from the contract in conspiracy with the subsequent vendee, it is pointed out that despite service of notice terminating the contract, the suit was not in fact withdrawn. Soon thereafter the vendee got himself impleaded and later transposed in the suit as co-plaintiff. In the course of trial of sanction suit with suit for specific performance, the vendee exercised option by an affidavit of claiming lesser relief of life interest. He himself was thus responsible for rendering the sanction suit infructuous. It is argued that if it was possible to obtain sanction of the court on the ground of continuous pressure on the property for recovery of public dues, the order of the single judge on original side dismissing the sanction suit as infructuous should have been challenged in appeal by the vendee. In any case when the subsequent vendee had gone in appeal against the decree granted for life interest in the suit for specific performance, the vendee could not have allowed the dismissal of the sanction suit to attain finality by not filing cross appeal against the same. Even in this Court, there is no appeal preferred and no ground urged challenging the dismissal of the sanction suit as infructuous. It is, therefore, submitted that one of the essential terms of the contract of obtaining sanction of the court having been rendered impossible of performance, the contract for sale of the property was rightly held by the Division Bench of the High Court to have failed rendering it incapable of specific performance.

The main contention advanced against the vendor is that the contract term clause (4) imposed a liability on him to seek sanction of the court for transfer of full title in the property. During pendency of suit for sanction, actions on the part of the vendor such as terminating the contract by sending a lawyer's notice and instructing his lawyer to withdraw the suit for sanction, amounted to committing breach of the contract.

The agreement was entered into on 26.6.1976. The reversioners opposed sanction by filing written statements on 16.1.1978. It is long after, on 11.9.1979 by lawyer's notice, the vendor terminated the contract. The sanction suit was pending from 26.6.1976. Even after two years, the sanction was not granted. The question is whether the agreement Ex.P-1 contemplated that the vendor should have waited for grant of sanction by the court for an indefinite period of time. The recitals of the agreement of sale clearly mention the necessity of sale arising from the pressure of public dues and taxes. The vendor could not have waited for an unreasonably long period of pendency of sanction suit when commencement of recovery proceedings for public dues and taxes could have commenced any time. There is no period fixed in the terms of the contract for obtaining sanction of the court, but keeping in view the other terms of the contract and the pressing requirement for sale of the property to clear public dues, it has to be held that obtaining of court's sanction within a reasonable period and in any case within a period well before commencement of recovery proceedings for dues and taxes, was in contemplation of the parties as an implied term. Notice served for terminating the contract, after waiting for two years for sanction by the court, cannot be held to be a breach of the contract on the part of the vendor. The argument that the vendor rescinded the contract only because he had entered into secret negotiations with the subsequent vendee to obtain higher price for the property is not borne out from the evidence. We cannot attach too much importance to the fact of initial attempt made by subsequent vendee to conceal knowledge of the existing contract with the vendee when sale-deed was obtained by the former. For the misconduct of misrepresentation and attempt to mislead the court, the Division Bench of the High Court has rightly deducted a sum of Rs. 5.5 lacs from the rental income found payable to the subsequent vendee. We propose not to disturb the same. But the aforesaid misconduct of subsequent vendee does not render the act of vendor in rescinding the contract to be an act of breach of contract which can be said to have been committed solely with desire to obtain higher price of the property.

As we have mentioned above, only life interest was sold to the subsequent vendee for higher price. Out of the agreed sale consideration, major portion of money was directly paid by the subsequent vendee to satisfy dues and taxes of public authorities. The notice served for terminating the contract, anticipating remote prospect of grant of sanction by the Court within a reasonable period and after waiting for two years from date of the contract, cannot be termed to be a breach to justify grant of any specific relief to the vendee.