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PETITIONER: MRS.  CHANDNEE WIDYA VATI MADDEN

       Vs.

RESPONDENT: DR. C. L. KATIAI, & OTHERS

DATE OF JUDGMENT: 25/03/1963

BENCH: SINHA, BHUVNESHWAR P.(CJ) BENCH: SINHA, BHUVNESHWAR P.(CJ) SHAH, J.C. AYYANGAR, N. RAJAGOPALA

CITATION:  1964 AIR  978            1964 SCR  (2) 495  CITATOR INFO :  R          1970 SC 546  (5)  R          1986 SC1912  (14)  D          1987 SC 925  (13)

ACT: Specific performance-Contract to sell house property Implied term-Points not raised in the High Court, if be allowed  for the first time in this Court.

HEADNOTE: The  plaintiffs-respondents entered into a contract of  sale in  respect of a house property belonging to the  appellant. The deed of agreement provided that the vendor shall  obtain the permission of the Chief Commissioner to the  transaction of  sale within two months of the agreement and if the  said permission  was  not forthcoming, within that time,  it  was open  to the purchasers to extend the date or to  treat  the agreement as cancelled.  As the necessary permission was not forthcoming  within  the  Stipulated  time,  the  purchasers extended the time by another month.  The appellant  withdrew her application for the necessary permission.  The defendant having  failed  to  perform her part of  the  contract,  the plaintiffs  brought a suit for specific performance  of  the contract  for sale or in the alternative for  damages.   The trial court, although it found that the plaintiffs had  been throughout  ready  and willing, indeed anxious,  to  perform their part of the contract and that it was the defendant who had  backed out of it, refused the main relief  of  specific performance of the contract on the ground that the agreement was  inchoate,  as  the  previous  sanction  of  the   Chief Commissioner to the proposed transfer had not been obtained. The High Court came to the conclusion that there 496 was  a completed contract between the parties and  that  the condition in the agreement that the vendor would obtain  the sanction  of  the Chief Commissioner to the  transaction  of sale  did not render the contract incomplete and  the  trial court  was  in  error  in holding  that  the  agreement  was inchoate, Held that on the findings in this case, the court had got to enforce  the  terms of the contract and to enjoin  upon  the

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defendant-appellant to make the necessary application to the Chief  Commissioner, which was implied in the contract.   It will be for the Chief Commissioner to decide whether or  not to  grant  the  necessary sanction.  In  the  event  of  the sanction being refused, the plaintiffs shall be entitled  to the  damages as decreed by the High Court.  In this view  of the matter, the High Court was entirely correct in decreeing the suit for specific performance of the contract. Motilal v. Nanhelal (1930) L. R. 57 I. A. 33, referred to. Held further, that the points not specifically raised in the High  Court  nor  pleaded in the  pleadings  should  not  be allowed for the first time to be raised in this Court.

JUDGMENT: CIVIL APPELLATE JURISDICT1ON : Civil Appeal No. 559 of 1962. Appeal from the judgment and decree dated March 21, 1961, of the  Punjab High Court (Circuit Bench) at Delhi  in  Regular First Appeals Nos. 8 D and 21-D of 1960. A. Ranganadham Chetty, S. K. Mehta and K.    L.  Mehta,  for the appellant. M.   C.  Setalvad, Hardayal Hardy and S. N. Anand,  for  the respondents. 1963 March 25.  The judgment of the Court was delivered by SINHA C. J.-This appeal on a certificate granted by the High Court   of  Punjab  arises  out  of  a  suit  for   specific performance  of  a contract of sale in respect  of  a  house property  situate in Tughlak Road, New Delhi,  belonging  to the appellant and built on a lease-hold plot granted by  the Government  497 in  the year 1935, to her predecessor-in-title.  It  appears that  the  plaintiffs  entered into a contract  of  sale  in respect  of  the  disputed  property  for  the  sum  of  Rs. 1,10,000/-.   The deed of’ agreement is dated  September  4, 1956.   In so far as it is necessary to notice the terms  of the  document, the agreement provided that the vendor  shall obtain  the  permission  of the Chief  Commissioner  to  the transaction of sale within two months of the agreement,  and if the said permission was not forthcoming within that time, it was open to the purchasers to extend the date or to treat the agreement as cancelled.  As the necessary permission was not  forthcoming within the stipulated time, the  purchasers extended the time by another month.  The appellant had  made an  application to the proper authorities for the  necessary Permission,  but  withdrew  her  application  to  the  Chief Commissioner  by  her  letter dated  April  12,  1957.   The plaintiffs called upon the defendant several times to fulfil her  part of the agreement but she failed to do so.  It  was averred  on  behalf of the plaintiffs that they  had  always been ready and willing to perform their part of the contract and  that  it was the defendant who had backed  out  of  it. Hence, the suit for specific performance of the contract for sale  or  in the alternative for damages  amounting  to  Rs. 51,100/-.   The  suit  was contested on a  large  number  of grounds of which it is necessary now to take notice only  of the plea on which issue No. 8 was joined.  Issue No. 8 is as follows :               "(8) Is the contract contingent or  impossible               of performance and is uncertain and vague  and               is therefore void ?" The  other  material  issues were  concurrently  decided  in favour  of  the  plaintiffs, and,  therefore,  need  not  be referred to.

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The  trial Court in a very elaborate judgment dismissed  the suit for specific performance of contract 498 and  for a permanent injunction and decreed the sum  of  Rs. 11,550/-  by  way  of  damages,  with  proportionate  costs, against  the  defendant.  Though the Court  found  that  the plaintiffs  had  been throughout ready and  willing,  indeed anxious, to perform their part of the contract, and that  it was the defendant who backed out of it, it refused the  main relief of specific performance of the contract on the ground that the agreement was inchoate in view of the fact that the previous sanction of the Chief Commissioner to the  proposed transfer had not been obtained. The  High  Court on appeal came to the conclusion  that  the agreement was a completed contract for sale of the house  in question, subject to the sanction of the Chief  Commissioner before the sale transaction could be concluded, but that the Trial  Court was in error in holding that the agreement  was inchoate,  and  that,  therefore,  no  decree  for  specific performance  of  the contract could be  granted.   The  High Court  relied mainly on the decision of their  Lordships  of the  Judicial Committee of the Privy Council in  Motilal  v. Nanhelal (1), for coming to the conclusion that there was  a completed   contract  between  the  parties  and  that   the condition in the agreement that the vendor would obtain  the sanction  of  the Chief Commissioner to the  transaction  of sale  did not render the contract incomplete.  In  pursuance of that term in the agreement, the vendor had to obtain  the sanction of the Chief Commissioner and as she had  withdrawn her application for the necessary sanction, she was to blame for  not having carried out her part of the  contract.   She had  to  make an application for the  necessary  permission. The   High  Court  also  pointed  out  that  if  the   Chief Commissioner ultimately refused to grant the sanction to the sale,  the plaintiff may not be able to enforced the  decree for specific performance of the contract but that was no bar to  the Court passing a decree for that relief.   Though  it was not necessary in the view the High Court took of (1930) L. R. 57 1. A. 333.  499 the rights of the parties, it recorded a finding that a  sum of Rs. 5,775/- would be the appropriate amount of damages in the event of the plaintiffs not succeeding in getting  their main relief for specific performance of the contract. The main ground of attack on his appeal is that the contract is  not  enforceable being of a contingent  nature  and  the contingency  not  having been fulfilled.   In  our  opinion, there  is  no substance in this contention.  So far  as  the parties  to the contract are concerned, they had  agreed  to bind  themselves  by  the terms  of  the  document  executed between them.  Under that document it was for the defendant- vendor to make the necessary application for the  permission to the Chief Commissioner.  She had as a matter of fact made such  an application but for reasons of her own  decided  to withdraw the same.  On the findings that the plaintiffs have always  been ready and willing to perform their part Of  the contract, and that it was the defendant who wilfully refused to  perform her part of the contract, and that the time  was not  of  the essence of the contract, the Court has  got  to enforce  the  terms of the contract and to enjoin  upon  the defendant appellant to make the necessary application to the Chief  Commissioner.  It will be for the Chief  Commissioner to decide whether or not to grant the necessary sanction. In  this  view of the matter, the High  Court  was  entirely correct  in decreeing the suit for specific  performance  of

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the  contract.  The High Court should have further  directed the   defendant  to  make  the  necessary  application   for permission  to the Chief Commissioner, which was implied  in the  contract between the parties.  As the  defendantvendor, without  any  sufficient reasons, withdrew  the  application already  made  to the Chief Commissioner the  decree  to  be prepared  by  this  Court  will  add  the  clause  that  the defendant, within one month 500 from  to- day, shall make the necessary application  to  the Chief  Commissioner or to such other competent authority  as may  have been empowered to grant the necessary sanction  to transfers like the one in, question, and further that within one  month of the receipt of that sanction she shall  convey to the plaintiffs the property in suit.  In the event of the sanction being refused, the plaintiffs shall be entitled  to the  damages  as decreed by the High Court.   The  appellant sought  to  raise  certain other pleas which  had  not  been raised  in the High Court, for example, that this was not  a fit case in which specific performance of contract should be enforced  by  the  Court.  This plea  was  not  specifically raised  in the High Court and the necessary facts  were  not pleaded  in the pleadings.  It is manifest that  this  Court should not allow such a plea to be raised here for the first time. For  the  reasons  given  above, the  appeal  fails  and  is dismissed with costs.                                   Appeal dismissed.  501