# HPA INTERNATIONAL v. BHAGWANDAS FATEH CHAND DASWANI AND ORS - **Citation:** [2004] Supp. 3 S.C.R. 31 - **Court:** Supreme Court of India - **Decided:** 2004-07-13 - **Case number:** Civil Appeal No. 6006 of 2001 - **Bench:** Shivaraj V. Patil, D.M. Dharmadhikari - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hpa-international-v-bhagwandas-fateh-chand-daswani-and-ors-20006 - **Pages:** 62 ## Headnote B Contract Act, 1872 : Ss. 31 and 32-Contingent contract-Enforcement of-Contract for conveyance of entire life interest of vendor and reversionary interest of remaindermen though latter not a party to the contract-Conveyance C contingent on obtaining sanction of Court as to conveyance of interest of remainder men-Specific pe1formance-Permissibility of-Held, when sanction could not be obtained for reasons beyond the control of the parties, contract cannot be directed to be specifically enforced-Specific ' Relief Act, 1963-Ss. 10 and 20. D Ss. 73, 53, 56 and 32-Fundamental or repudiatory breach-Test for ascertaining-Consequences if contract rendered unenforceable due to reasons beyond the control of the parties-Frustration of contractQuestion of facts to be decided in each case. On facts, held, vendor cannot E be held to be guilty of breach so as to entitle vendor to seek specific pe1formance of transfer of life interest of vendor-Specific Relief Act, 1963-Section JO and 20. Section 43-Applicability of-Discussed. Specific Relief Act, 1963-S. 12(3)-Nature of power underExplained. Trusts Act, 1982-Ss. 90, 91 and 92-Property acquired with notice of existing contract-Constructive trust arising thereby-Parties that are bound-Discussed. Code of Civil Procedure, 1908 : S. 1 I-Finality of decree not appealed agail'st-Ejfect of F G S. 144-Reversal of decree transferring life interest in property to one H 31 32 SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R. A vendee-Adjustment and payment of cost of construction raised on property by Vendee in period prior to reversal of said decree, ordered by Court reversing decree-Held, on principle of restitution contained in S. 144 there was no ground to interfere with the said oder of adjustment and payment. B Constitution of India-Art. 136-Abuse of process-Direction of Division Bench of High Court ordering payment of a certain sum in favour of prior vendee against subsequent vendee for having misled the Court Held, the direction deserved no interference. C The vendor of the suit property, grandfather of respondent No. 6 executed a Will and two Codicils on 7.3.1948, under which he was bequeathed the right of enjoyment during his life, of the estate of the testator, including the suit property but without powers of alienation. In the Will, it was provided that after the death of the vendor, his male D issue living at the time of his death would take all the properties absolutely. In the absence of any such male issue of the vendor, the properties would be taken by other descendants, the 'reversioners'. The testator died on 23.10.1956. On 26.6.1977, the vendor entered into an agreement of sale of the suit property with the appellant. It was E clearly recited in the agreement that the sale of the property was necessitated because of the pressing demands of public authorities towards dues and tax liabilities on the estate and likelihood of coercive recovery of public dues by attachment and sale by public auction. The vendor, therefore, agreed to sell and the purchaser agreed to purchase F the entire interest in the suit property inclusive of life interest of the Vendor and the interest of the reversioners (described as remainder men) free from all encumbrances, for a total price of 5.5 lacs. A sum of Rupees 25,000 was paid as advance. The balance of the sale consideration was to be paid by the purchaser by bank drafts in favour of the concerned public authorities for discharging the public dues and G taxes. The purchaser agreed to pay Rupees 18,000 to the tenant in. occupation of the property which was the liability of the vendor. The vendor agreed to obtain at his own cost and expense the sanction of the High Court of Madras for sale of life interest of the remainder men in the property. The agreement further provided that in case the H sanction of the Court was not accorded for the sale, the agreement shall HPA INTERNATIONAL v. B.F.C. DASWANl 33 forthwith stand cancelled and the vendors shall return the ## Text _Characters 0–39,404 of 144,528. This is a partial read: ask again with offset=39404 for what follows._ HPA INTERNATIONAL A v. BHAGWANDAS FATEH CHAND DASWANI AND ORS. JULY 13, 2004 [SHIVARAJ V. PATIL AND D.M. DHARMADHIKARI, JJ.] B Contract Act, 1872 : Ss. 31 and 32-Contingent contract-Enforcement of-Contract for conveyance of entire life interest of vendor and reversionary interest of remaindermen though latter not a party to the contract-Conveyance C contingent on obtaining sanction of Court as to conveyance of interest of remainder men-Specific pe1formance-Permissibility of-Held, when sanction could not be obtained for reasons beyond the control of the parties, contract cannot be directed to be specifically enforced-Specific ' Relief Act, 1963-Ss. 10 and 20. D Ss. 73, 53, 56 and 32-Fundamental or repudiatory breach-Test for ascertaining-Consequences if contract rendered unenforceable due to reasons beyond the control of the parties-Frustration of contractQuestion of facts to be decided in each case. On facts, held, vendor cannot E be held to be guilty of breach so as to entitle vendor to seek specific pe1formance of transfer of life interest of vendor-Specific Relief Act, 1963-Section JO and 20. Section 43-Applicability of-Discussed. Specific Relief Act, 1963-S. 12(3)-Nature of power underExplained. Trusts Act, 1982-Ss. 90, 91 and 92-Property acquired with notice of existing contract-Constructive trust arising thereby-Parties that are bound-Discussed. Code of Civil Procedure, 1908 : S. 1 I-Finality of decree not appealed agail'st-Ejfect of F G S. 144-Reversal of decree transferring life interest in property to one H 31 32 SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R. A vendee-Adjustment and payment of cost of construction raised on property by Vendee in period prior to reversal of said decree, ordered by Court reversing decree-Held, on principle of restitution contained in S. 144 there was no ground to interfere with the said oder of adjustment and payment. B Constitution of India-Art. 136-Abuse of process-Direction of Division Bench of High Court ordering payment of a certain sum in favour of prior vendee against subsequent vendee for having misled the Court Held, the direction deserved no interference. C The vendor of the suit property, grandfather of respondent No. 6 executed a Will and two Codicils on 7.3.1948, under which he was bequeathed the right of enjoyment during his life, of the estate of the testator, including the suit property but without powers of alienation. In the Will, it was provided that after the death of the vendor, his male D issue living at the time of his death would take all the properties absolutely. In the absence of any such male issue of the vendor, the properties would be taken by other descendants, the 'reversioners'. The testator died on 23.10.1956. On 26.6.1977, the vendor entered into an agreement of sale of the suit property with the appellant. It was E clearly recited in the agreement that the sale of the property was necessitated because of the pressing demands of public authorities towards dues and tax liabilities on the estate and likelihood of coercive recovery of public dues by attachment and sale by public auction. The vendor, therefore, agreed to sell and the purchaser agreed to purchase F the entire interest in the suit property inclusive of life interest of the Vendor and the interest of the reversioners (described as remainder men) free from all encumbrances, for a total price of 5.5 lacs. A sum of Rupees 25,000 was paid as advance. The balance of the sale consideration was to be paid by the purchaser by bank drafts in favour of the concerned public authorities for discharging the public dues and G taxes. The purchaser agreed to pay Rupees 18,000 to the tenant in. occupation of the property which was the liability of the vendor. The vendor agreed to obtain at his own cost and expense the sanction of the High Court of Madras for sale of life interest of the remainder men in the property. The agreement further provided that in case the H sanction of the Court was not accorded for the sale, the agreement shall HPA INTERNATIONAL v. B.F.C. DASWANl 33 forthwith stand cancelled and the vendors shall return the advance A amount of Rupees 25,000 to the purchaser. There was a separate stipulation in.the agreement that if after the sanction of the Court the vendor commits breach of the contract he shall return the advance money of Rupees 25,000 and pay a sum of Rupees 15,000 to the vendee by way of liquidated damages for failure B to complete the sale. The agreement further provided that if after the sanction of the Court, vendee commits breach and does not complete the sale, he shall be liable to pay to the vendor a sum of Rupees 15,000 by way of liquidated damages. At the time of execution of the agreement Ex. Pl dated 26.6.1977 the Testator's only daughter and the three sisters of the vender were the reversioners in accordance with the terms of the Will because by that time the vendor had no male issue. The vendor filed a Civil Suit c on the original side of the High Court for seeking sanction of the court D for sale of full interest in the property inclusive of his own life interest and the interest of the reversioners. The reversioners were impleaded as parties to that suit. As the sanction sought from the Court was opposed by two reversioners, the vendor sent a lawyer's notice on 11.9.1979. E The suit was prosecuted by the vendee himself who got himself transposed in the suit as co-plaintiff. In reply to the lawyer's notice the vendee alleged breach of contract on the part of the vendor with intention of selling the property for higher price to third parties. It was p reiterated that the vendee was always ready to discharge the tax liability in accordance with the sale agre,ement. In his reply sent through his lawyer to the lawyer's notice of the vendor cancelling the agreement, the vendee did not express desire to purchase life interest of the vendor without insisting on transfer of G interest of the reversioners which was subject matter of the suit filed for seeking sanction of the Court. On 29.12.1979, the vendor sold his life interest in the suit property for a sum of Rs. 4.40 lacs by execution registered instrument in favour H 34 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R. A of respondents I to 5. What is apparent from the contents of the subsequent sale deed is that large part of the sale consideration in different sums aggregating to Rs. 2.68 lacs was paid directly by the subsequent vendee to various authorities to discharge public dues and taxes like Corporation Property Tax, Urban Land Tax and Income B Tax arrears. The subsequent vendee by separate release deeds dated 21.10.1980, 22.11.1980, 22.2.1980 and 29.4.1980 obtained surrender of rights individually from the reversioners by paying each of them a sum of Rs. 20,000. After receiving the lawyer's notice and cancellation of the sale C agreement, the vendee on 25.3.1981 got himself impleaded as a partydefendant in the suit which was field to seek sanction of the Court. On 16.8.1981 the vendee filed a Civil Suit seeking Specific Performance of the Agreement of Sale. D The two suits seeking court sanction for sale under the agreement Ex.Pl and Civil Suit No. 423/81 seeking Specific Performance of the Agreement of Sale, were clubbed and tried together by the Single Judge. After the pleadings were completed in the two suits, the vendee E on 25.11.1986 filed an affidavit purporting to be under Section 12(3) of the Specific Performance Act of 1963 stating therein that without prejudice to his claim for transfer of full interest in the suit property to him the agreement of sale, if he was found not entitled to maintain the suit seeking sanction of the Court for sale of full interest in the F property a decree be granted for Specific Performance of transfer of life interest of the vendor in the suit property. In view of the averment made in the affidavit filed by the vendee in which he alternatively claimed lesser relief of transfer of only life interest in the suit property of the vendor; single judge by common G judgment dated 6.9.1988 dismissed Civil Suit No. 471177 seeking sanction of the Court for sale as infructuous. This part of the common judgment dismissing Civil Suit No. 471177, in which sanction for sale sought from the Court, has not H been appealed against bdore this Court although counsel for the i HPA INTERNATIONAL v. B.F.C. DASWANI 35 vendee has contended that no separate appeal was required to be A filed against dismissal of the suit for court's sanction as infructuous because the common judgment passed in the suit seeking sanction of the suit for sale and the suit for specific performance is already under appeal. The single judge by the impugned common judgment decreed Civil Suit No. 423/81 in favour of the vendee to the extent of directing conveyance of life interest in the suit properties of the vendor under B the Agreement Ex.Pl. It was further held that as the subsequent vendee has purchased the property with knowledge of the prior sale agreement with the vendee the former should join in re-conveying the property C to the latter. The subsequent vendee has not disputed in this appeal that the sale in favour of the subsequent vendee was with notice of the prior sale agreement Ex.Pl with the vendee. D Against the judgment granting decree of specific performance of sale of life interest of vendor in the suit property, an appeal was preferred by the subsequent vendee to the Division Bench of the High Court. The Division Bench concluded hearing of the appeal on 22.3.1989 E but pronounced judgments almost five years after, on 24.1.1994 and dismissed th!! appeal. The judgment has been set aside by this Court by order dated 13.1.2000 reported in !2000] 2 SCC 13. This Court remanded the appeal for re-hearing by the Division Bench of the High Court. After re-hearing, the Division Bench by the impugned judgment F dated 24.4.2001 has allowed the appeal preferred by the subsequent vendee. The decree granted for conveying life interest of the vendor in the suit property has been set aside. The only relief granted to the plaintiff, is that out of the rental income realised by the plaintiff during long pendency of the appeal, a sum of Rs. 5.5. lacs has been deducted to deprive the subsequent vendee of that sum for his misconduct of G projecting Bob Daswani and Fateh Chand Daswani as two persons when, in fact, they were one. Rest of the rental income recovered by the plaintiff vendee has been directed to be paid to the subsequent vendee as a consequence of successs of appeal and setting aside of the decree for specific performance. H 36 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R. A Dismissing the appeals, the Court HELD: 1.1. From the recitals of the sale agreement Ex. P-1 and particularly those requiring the vendee to discharge public debts and dues directly as part of the consideration of sale, it is clear that the B necessity of sale for the vendor arose for safeguarding the property from being put to auction and sale through coercive process of recovery of public dues. Naturally, the vendor wanted to obtain market price of the property and desired to avoid sale of the property through a coercive process at a lesser price. That there were outstanding taxes and public dues have not been disputed by the vendee and in fact, they C are acknowledged by him in reply to the lawyer's notice sent by the vendor terminating the contract. In the reply sent through lawyer by the vendee, it is clearly acknowledged that tax dues were there but it is stated that the alleged pressure from tax authority was merely as an excuse to terminate the agreement. The motive attributed to the D vendor that he tried to wriggle out of the sale agreement Ex. P-1, only to obtain higher price of his property by selling it to the subsequent vendee, is not borne out from the evidence on record. The contends of the sale-deed Ex. D-1 dated 29.12.197 executed in favour of the subsequent vendee clearly show that a substantial portion of agreed consideration E of Rs. 4,40,000 was paid directly by cheques towards the property tax (Rs. 50,383.98) to Corporation of Madras, Urban Land Tax to Tehsildar (Rs. 36,860.70) and income tax (Rs. 1,10,000) to Income-Tax Officer. The above payments made by the subsequent vendee to public authorities justify the stand of the vendor that there were pressing demands of public authorities on the property and the sale of the property, well F before the impending initiation of coercive recovery by public '"' authorities, was an urgent necessity. [70-G-H; 71-A-DJ 1.2. The recitals of the agreement of sale clearly mention the necessity of sale arising from the pressure of public dues and taxes. The G vendor could not have waited for an unreasonably long period of pendency of sanction suit when commencement ofrecovery 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 H pressing requirement for sale of the property to clear public dues, it HPA INTERNATIONAL v. B.F.C. DASWANI 37 has to be held that obtaining of court's sanction within a reasonable A 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 B 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. Too much importance cannot be attached to the fact of initial attempt made by subsequent vendee to conceal knowledge of the existing contract with C 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. This Court does not propose to disturb the same. But the aforesaid misconduct of subsequent vendee does not render the act of vendor in D 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. (71-G-H; 72-A-D] 1.3. Only life interest was sold to the subsequent vendee for higher E 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 F specific relief to the vendee. It is also relevant to state that although by lawyer's notice, the vendor terminated the contract and instructed his lawyer to withdraw the suit for sanction, but in fact, the suit was not withdrawn. The vendee got himself impleaded initially as defendant to the suit and then sought his transposition as co-plaintiff. That part G of the action of the vendee cannot be castigated as self-defeating because he was naturally interested in prosecuting the suit for sanction diligently to obtain conveyance of full rights in the property. However, the further act on the part of the vendee of filing an affidavit restricting his claim only to life interest resulted in dismissal of the suit for H 38 SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R. A sanction as infructuous. The learned single judge trying jointly the two suits came to the conclusion that as the vendee gave up his claim for transfer of interest of the reversioners, the court's sanction was not required. [72-E-H; 73-A) B 2. When decree granted for conveyance of life interest of the vendor in the suit for specific performance was challenged by the subsequent vendee before the Division Bench of the High Court, the vendee could as well have preferred cross appeal against the dismissal of the suit for sanction as infructuous. He was a co-plaintiff in that suit C and had an independent right of appeal. The non-filing of any appeal against dismissal of sanction suit as infructuous is a clear indication that the vendee was satisfied with the grant of decree merely of specific D performance of conveyance of life interest of the vendor. It is not open to the vendee now to question the correctness of the dismissal of the suit for sanction as infructuous. 173-C-EJ 3. I. At the time when the sale agreement was entered into, the parties were conscious that the vendor laid only life interest in the property and he could not convey more than his own interest. It was open to the vendee to obtain conveyance of interest of the reversioners by obtaining E release deeds from them by paying them consideration for surrender for their interest, as was done by the subsequent vendee. Another course open to him was to enter into separate agreement with the reversioners or insist on the reversioners joining the sale agreement. It seems the vendee entered into a speculative deal for obtaining full interest in the F property depending upon the sanction to be granted by the court. It seems to be in contemplation of the parties that if the reversioners objected, the court might refuse sanction. They could as well foresee that despite the reversioners' objection, the court might grant sanction. The transfer of full interest in the property was, therefore, dependent on sanction of the court. To meet this contingency, there were specific G terms such as clauses (4) and (6) incorporated in the contract whereby it was clearly agreed that the vendor shall obtain sanction of the court at his own expense and costs and ifthe sanction was not accorded by the court, the agreement would stand cancelled and the advance money refunded to the vendce. Clause (15) of the agreement could come into H operation only ifthe court granted sanction and any ofthe parties failed ... HPA INTERNATIONAL v. B.F.C. DASWANI 39 to complete the sale. Clause (15) had no operation when the sanction A was not accorded to the sale. [73-G-H; 74-A-D] 3.2. If the vendee intended to seek conveyance separately of the life interest of the vendor, the earliest opportunity for him was when he had received notice dated 11.9.1979 sent through lawyer by the B vendor cancelling the contract. Assuming that at that time he could not opt for lesser relief as the suit for sanction was pending, he could have, in any case, opted for conveyance of life interest of the vendor soon after he came to know of the negotiations for sale with took place in the presence of one of the partners of the plaintiff-vendee. Even after C deriving the knowledge of the execution of the sale deed dated 29.12.1997 Ex. D-1, the option to obtain lesser relief of transfer of life interest was not exercised. It was exercised as late on 25.11.1986 by filing an affidavit and at the time when pleadings of the parties were complete and the joint trial in the two suits had already commenced. D During long pendency of the suit between 1979 and 1986, the parties interested in the property changed their positions. The vendor by executing registered sale deed in favour of the subsequent vendee got his public dues paid to relieve the pressure on the property and obtained market price of the property. After obtaining possession of E the property pursuant to the sale deed, the subsequent vendee has raised construction and inducted tenants. Accepting the legal stand based on sections 90, 91& 92 of the Indian Trusts Act that the subsequent vendee, being a purchase with knowledge of prior agreement, is holding the property as a trustee for the benefit of the prior vendee, the vendor, who changed his position by effecting subsequent sale cannot be F compelled to convey his life interest when such lesser relief was not claimed at the earliest opportunity and the terms of the contract did not contemplate transfer of life interest alone. On duly appreciating the evidence on record, construing specific terms of the contract and considering the conduct of the parties, it is concluded that the recession of the contract due to non-grant of sanction by the court within two years after execution of the contract and filing of the suit for sanction, was not an act of breach of contract on the part of the vendor to justify grant of relief of specific performance of the contract to the prior G vendee. 174-H; 75-A-F] H 40 SUPREME COURT REPORTS [2004] SOPP. 3 S.C.R. A 3.3. The subsequent vendee, by his own act in the pending suits, was responsible for rendering the suit for sanction as infructuous. He was guilty of lapse in not seeking conveyance of life interest of the vendor at the earliest opportunity when notice of recession of the contract was received by him and later when he derived the knowledge B of execution of registered sale-deed in favour of the subsequent vendee. The option was exercised conditionally in the midst of the joint trial of the two suits. There was one integrated and indivisible contract by the vendor to convey full interest in the property i.e., his own life interest and the interest of the reversioners with sanction of the court. As the court had not granted the sanction, the contract could not be C specifically enforced. The lesser relief of transfer of life interest was not claimed within a reasonable time after the vendor had intimated that the contract, as agreed for full interest, was not possible of performance. There is neither equity nor law is in favour of the plaintiff. (75-G-H; 76-A-B) D 4.1. The reversioners have surrendered their interest by accepting consideration separately and executed separate release deeds in favour of the subsequentvendee. Even though the subsequent vendee has acquired property with knowledge of sale agreement Ex. Pl existing with the E prior vendee, the latter has no equity in his favour as to bind the reversioners and in any manner adversely affect their interest. They were not parties to the sale agreement and have already by separate release deeds, on accepting separate consideration, surrendered their interest in favour of the subsequent vendee. Any grant of relief transfer of life interest of the vendor to the prior vendee would involve the F reversioners in further litigation. If only life interest of the vendor is allowed to be conveyed to the prior vendee, after death of vendor, the reversioners are likely to be involved in litigation in future to help in restoring possession of the property to the subsequent vendee and effectuate the release deeds executed in his favour by them. Grant of G such equitable relief would adversely affect the immediate efficacy of the release deeds and would create various hurdles in working qut the rights and remedies of the reversio11ers vis-a-vis the subsequent vendee. It would not be a proper exercise of discretion by the Court to grant such partial relief of directing con;veyance of life interest of the vendor H as that would adversely affect the interest of the reversioners. (77-E-HJ • i ... HPA INTERNATIONAL v. RF.C. DASWANI 41 4.2. The contracting parties were fully aware that reversioners, who had a mere chance of succession, were not parties to the agreement. The parties to the contract could have taken care of the eventuality of refusal of sanction by the Court and possibility of the vendor transferring only his life interest to the vendee*+, but such eventuality of separate transfer of life interest is conspicuously absent in the terms of the agreement. Such obligation on the part of the vendor to transfer his life interest, if sanction for transfer of reversioners' interest was not granted, cannot be read in the contract by implication and recourse to Section 12(3) of the Specific Relief Act, therefore, is impermissible. Sectionl2(3) of the Specific Relief Act can be invoked only where terms of contract permit segregation of rights and interest of parties in the property. The provision cannot be availed of when the terms of the contract specifically evince intention contrary. to segregating interest of the vendor having life interest and spes successionis of reversioners. Neither law nor equity is in favour of the vendee to grant Specific Performance of the Contract. [78-C-F) 4.3. The single judge of the High Court was in error in granting decree of specific performance of transfer of life interest of the vendor on a finding that the vendor had committed breach by rescinding contract during pendency of sanction suit. The Division Bench of the High Court, rightly reversed the decree and dismissed the suit. [78-G I Dalsukh M Pancholi v. The Guarantee Life and Employment Insurance Co. Ltd. & Ors., AIR (1947) 34 PC 182, relied on . Narain Pattro v. Aukhay Narain Manna & Ors, ILR 152; Sreemati Kalidasi Dassee & Ors. V: Sreemati Nobo Kumari Dassee & Ors., 20 CWN 929, approved. M V. Shankar Bhat & Anr. v. Claude Pinto Since (dead) by LRs. & Ors., (2003) 4 SCC 86, referred to. 5.1. The alternative claim for lesser relief of life interest of vendor is also rejected. (81-DI A B c D E F G William Graham v. Krishna Chandra Dey, AIR (1925) PC 45; and Govinda Naicken & Anr. v. Apathsahaya Iyer alias Ayawaiyer, 37 Madras H 42 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R. A Series 403, referred to. 5.2. In the present case, the terms ofthl! contract fully indicate that the parties did contemplate that if the sanction of the court was not granted for transfer of the interest of the reversioners, the contract B could not be enforced. Clause (6) specifically provided that in case sanction by the court was not granted, the advance money of Rs. 25,000 shall be refunded to the purchaser. It was known to the parties that the vendor had only life interest in the property and the reversioners were not the parties to the agreement. Even with this knowledge of limited C right to the vendor and the reversioners being not signatories to the sale agreement, there is no stipulation made in the contract that if court's sanction was not obtained for transfer of reversioners' interest, the vendor shall convey his life interest to the vendee. [83-E-Gl 5.3. That the parties had agreed to wait for the whole period D during which the suit for sanction was pending and till its finalisation including appeal proceedings, if any. Such a course was not in contemplation of the parties because the vendor had agreed that the vendee would directly discharge the tax liabilities form the total amount of sale consideration. It was not possible for the vendor to have waited E indefinitely for final orders on the suit for sanction when the reversioners had objected to the sanction and there was remote possibility of the grant of sanction in foreseeable near future. [85-A-BI Suisse At/ant v. NV. Rotterdam, (1966) 2 All ER 61, referred to. F 5.4. It would be purely in the field of speculation as to what would have actually happened had the vendor continued to prosecute the suit despite the objection of the reversioners. The complications in disposal of sanction suit on merit were created by the vendee himself by getting himself transposed as co-plaintiff and then filing an affidavit restricting G his claim to transfer of life interest. It is, thereafter, that the sanction suit was dismissed as infructuous. If the order of the court refusing sanction was erroneous and when an appeal was filed by the subsequent vendee against grant of decree of specific performance oflife interest to the vendee, the vendee could have appealed against dismissal of suit for H sanction as infructuous. It is argued that the two suits wer.! clubbed for • • '( .... HPA INTERNATIONAL v. B.F.C. DASWANI 43 trial and as the lesser relief of transfer of life interest was granted in suit A for specific performance, it was not necessary for the vendee to have appealed against dismissal of the sanction suit. There is no need to deal with this argument any further as the sanction was not granted for sale by the court within a reasonable period of two years and the possibility of commencement of coercive proceedings of tax recovery loomed large, B the vendor cannot be held to have committed a breach of the contract when he served a notice of termination of contract. (85-D-G) 5.5. The vendor could not have waited indefinitely for the final result of the sanction suit as coercive proceedings for recovery of tax c were likely to be initiated at any time. As already held, reasonable period for obtaining sanction from the court has to be read as an implied condition of the contract in view of urgent necessity of sale to satisfy the tax dues and save the property from coercive recovery. The vendor had agreed for transfer of full interest in the property including his own life interest and of the reversioners. As the reversioners objected D and ultimately the sanction suit failed, the performance of contract, as agreed for transfer of full interest in the property, had become impossible. There was no agreement between the parties that if sanction was not granted, the vendor would transfer his life interest. On the contrary, the agreement clause specifically stated that if the E sanction was not obtained, the advance money shall be returned. This stipulation shows an intention contrary to the parties agreeing for transfer of life interest of vendor, if transfer of reversioners' interest was not possible for want of court's sanction. (86-E-HI Satyabratae Ghose v. Mugneeram Bangur & Co., [19541 SCR 310 F and The Humma Masjid v. Kodimaniandra Deviah, [19621 Supp. 2 SCR 554, referred to. 5.6. This is not a case where the vendor had o·nty right of spes successionis and after execution of agreement of sale, he subsequently G acquired full interest in the property to be held bound by section 43 of the Transfer of Property Act. The reversioners were not parties to the agreement of sale. When in the suit for sanction to transfer their interest they were made parties and were noticed, they expressly objected to the proposed transfer. No principle ofestoppel or provisions H 44 SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R. A of section 43 of the Transfer of Property Act can, therefore, operate against them. So far as the subsequent vendee is concerned, in the course of suit, he was pushed to a position in which he could not take a stand that he had no knowledge of the prior agreement with the vendee but he separately purchased life interest from the vendor and obtained B separate release deeds, on payment of consideration, from the reversioners. The reversioners being not parties to the sale agreement Ex. P-1 entered into with the vendee, the latter could not enforce the contract Ex. P-1 against the former. [87-F-H; 88-A) 5. 7. It is not found that the vendor was guilty of rendering the suit C for sanction infructuous. It did terminate the contract pending the suit for sanction but never withdrew that suit. The vendee himself prosecuted it and rendered it infructuous by its own filing of an affidavit giving up his claim for the interest of reversioners. In such a situation where the vendor was not in any manner guilty of not obtaining the sanction D and the clause of the contract requiring court's sanction for conveyance ,. of full interest, being for the benefit of both the parties, the contract had been rendered unenforceable with the dismissal of the sanction suit. [88-F-G) E Dr. Jiwanlal & Ors. v. Brij Mohan Mehra & Anr., [1972) 2 SCC 757, referred to. 5.8. The vendor waited for a reasonable period for grant of sanction to the sale by the court. The was a pressing need for sale as the public F dues and taxes could have been recovered from the property by coercive process at any time. The vendor, therefore, advisedly withdrew from the contract, negotiated sale on different terms with the subsequent vendee and ultimately entered into the contract with the latter. The vendor did not actually withdraw the suit for sanction. The vendee himself became co-plaintiff to the suit and unsuccessfully tried to prosecute it. The G sanction suit was rendered infructuous by vendee's own conduct of filing affidavit restricting his claim to life interest. He suffered the dismissal of sanction suit as infructuous and did not question the correctness of the court's order in appeal before the Division Bench, although the subsequent vendee, against grant of decree of specific H performance of life interest, had preferred an appeal. [90-A-C) HPA INTERNATIONAL v. B.F.C. DASWANI 45 5.9. The vendor cannot be held guilty of breach as to entitle the A vendee to seek specific performance of life interest of the vendor. The contract entered into between the parties was for conveying full interest in the property namely life interest of vendor and chance of succession of reversioners. The contract was one and indivisible for full interest. There is no stipulation in the contract that if sanction was not B obtained, the vendor would transfer only his life interest for the same or lesser consideration. On the contrary, the contract stipulated that if the sanction was not granted, the contract shall stand cancelled and the advance money would be refunded to the purchaser. [90-E-F] c 6.1. After execution of the decree and registered sale-deed the vendee plaintiff was placed in possession of the property on 25.2.1995. The basement and ground floor have been constructed by the subsequent vendee after obtaining possession on the basis of his sale deed. Thereafter plaintiff - vendee, on obtaining possession pursuant to the execution of D decree granted by the single judge, has constructed two floors above