1. The applicant Bank filed IA-893/99 before the Presiding Officer, DRT-I, Chennai, for sale of house, ground after defraying the expenses of sale towards the petitioner Bank's claim or direct the 4th respondent in IA to take over the liability of the defendants 1 to 3 in respect of claim made by the applicant Bank and pay the entire amount as claimed in the Original Application. The Tribunal by its order dated 18.3.2002 allowed the IA with certain conditions. The Tribunal passed order stating the defendant is at liberty to deposit the sale consideration amount on or before 28.3.2002 failing which the 3rd party purchaser is at liberty to negotiate with the Bank to purchase the said property from the Bank and may purchase the property for the sale consideration agreed by the Bank and the amount be paid by 31.3.2002.
2. The Presiding Officer, DRT-I, has also observed in the order that in case the above said sale is not materialized, 3rd party purchasers Jayanthilal G. Surana and Anita Jain shall be at liberty to order to bring the property for sale by public auction in recording the sale.
Aggrieved against that order the appellant has come forward with this appeal.
3. Counsel for the appellant submitted that the order passed by the Presiding Officer, DRT-I, is not sustainable and order for sale of property cannot at all be ordered and the order is liable to be set aside. On the other hand, Counsel for the respondent Bank submitted that an agreement of sale was entered into between the appellant and the purchaser Shri Jayantilal G. Surana on 22.3.2001 and by virtue of that agreement the purchaser paid the entire sale consideration and deposited and amount in the Bank as per the directions contained in that agreement and the appellant also received advance amount and the entire sale consideration now has been paid and the purchaser is entitled for that property and for execution of the sale deed in his favour and the order passed by the Presiding Officer, DRT-I, is sustainable.
4. Counsel for the appellant further submitted that the period mentioned in the agreement for sale is six months by which the transaction of sale should be completed, that period was over and as it is there is no agreement at all and as the transaction was not completed within that period of six months mentioned in the agreement, the purchaser is not entitled for purchase of the property and the order passed by the Presiding Officer, DRT-I, has to be set aside, 5. The agreement of sale is a registered one. It is seen that two agreements of sale were executed between the appellant and the purchaser for a sale consideration of Rs. 24 lakhs each. The appellant has also received advance amount of Rs. 3 lakhs under one agreement and the vendor-agreed to receive the balance consideration of Rs. 21 lakhs at the time of execution of registration of the sale deed. In para 3 of the agreement, it is further recited that the vendor namely, the appellant, has availed loan on the security of the A-Schedule property by creating mortgage by deposit of title deeds in favour of the Bank of Madura, Mount Road Branch, in the sum of Rs. 18 lakhs and on that account there is due in the sum of Rs. 12 lakhs towards the said loan as on that date and the vendor agrees that if the said encumbrance is not cleared by the vendor within the time stipulated therein, the purchaser will be entitled at his option to clear the same from and out of the balance consideration payable to the vender and the vendor, the appellant, will be entitled only to the balance amount remaining after such payment for clearing the said loan, and in the alternative at the option of the purchaser, the purchaser will be entitled to continue the said loan and get the sale deed in his favour or his nominee.
6. There is specific recital in the agreement that if the vendor, the appellant, does not clear the encumbrance, the purchaser will be entitled at his option to clear the same from and out of the balance consideration payable to the vendor and the purchaser is also entitled to continue the said loan and get the sale deed in his favour or his nominee. So it is crystal clear from the agreement that if the appellant does not clear the loan amount due to the Bank the purchaser is entitled to clear the same and get the sale deed executed in his favour. Only as per the terms and conditions of the agreement of sale the purchaser has paid the loan amount due by the appellant to the Bank.
7. Counsel for the appellant submits that now the period of six months mentioned in the agreement is over and the purchaser cannot enforce terms of the agreement. The appellant on 14.9.2001 has written a letter to the purchaser stating that the agreements have been partially performed on both sides and with regard to the Bank loan he is negotiating with the bank officials for settlement of the amount and as soon as it is finalized the sale deed will be executed and registered in favour of the purchaser by the DRT as the case is pending before the DRT and the appellant has requested the purchaser to wait till 15.11.2001 so that he could finalise with the Bank and reach the settlement of the loan account and if it is hurried he will not be able to get any concession and the appellant was trying for concession if possible for reduction of the amount payable towards the loan account.
In the last paragraph of his letter, the appellant has specifically stated that he would definitely reach settlement before 15.11.2001 and he would complete the transaction. The letter written by the appellant to the purchaser dated 14.9.2001 proves that time was not the essence of the contract, and the appellant was prepared to extend the time mentioned in the agreement beyond six months and he asked the purchaser to wait till 15.11.2001 so that he could finalise with the Bank and reach the settlement of the loan account.
8. The letter dated 14.9.2001 clearly establishes that the appellant extended the agreement period and by his own conduct the appellant has asked the purchaser to wait till 15.11.2001 for completing the transaction. So it is evident that the appellant was not very particular to complete the transaction within the period of six months and time is not the essence of the contract. It is obvious that the intention of the appellant was not to complete the transaction within that period and his intention was to extend the period for completing the transaction. As the appellant himself has extended time in his letter dated 14.9.2001 it is futile on the part of the appellant now to contend that as the transaction was not completed within the period of six months as stated in the Agreement the purchaser is not entitled for his relief asked for. Only as per the agreement entered into between the parties the purchaser has paid the loan amount due to the Bank.
Para 3 of the Agreement clearly proves this.
9. Counsel for the respondent Bank also submitted that the purchaser has paid the entire loan amount due to the Bank. The sale consideration mentioned in the agreement is for discharge of the loan amount due to the Bank and the purchaser was entitled to clear the loan and to pay the balance amount only to the appellant and the purchaser is also entitled to get the sale deed in his favour or in favour of his nominee. Even in the letter dated 14.9.2001 the appellant has specifically stated that on making payment due to the Bank the sale deed will be executed and registered in favour of the purchaser by the DRT. So the appellant has also agreed for execution of the sale deed by the DRT in his letter dated 14.9.2001. Only as per the terms and conditions set out in the agreement of sale, the purchaser has paid the sale consideration and cleared the entire loan amount due to the Bank.
As the purchaser has deposited the sale consideration and the amount due to the Bank, the purchaser is entitled for execution of the sale deed in his favour after paying the balance amount of the sale consideration to the appellant, if any.
10. Counsel for the respondent Bank further submitted that the purchaser has cleared the entire loan amount by deposit of Rs. 30 lakhs. It has been represented by the Counsel for the Bank that the purchaser has paid an advance of Rs. 10 lakhs to the appellant. The entire sale consideration is Rs. 48 lakhs. As per the agreement entered into between the parties the appellant is entitled only for the balance sum of Rs. 8 lakhs towards the sale consideration. The 3rd party purchaser is entitled for the execution of the sale deed on settlement of the balance amount of Rs. 8 lakhs to the appellant. Under such circumstances, the order passed by the Presiding Officer, DRT-I, Chennai, does not warrant any interference by this appellate Tribunal.