Legal Aspects of Business Essay

Facts of the Case: 1. The appellant herein Deokabai is an aged widow residing in a portion of a house with her daughter and grand children. On 18.1.79 she entered into an agreement to sell that portion of the house in her possession with Uttam, the respondent. The total sale consideration was fixed at Rs. 48,000/- out of which Rs. 5,000/- was paid to her as earnest money. The agreement for sale was reduced to writing. 2. Before registration of the sale deed of the house in Uttam’s name, permission of the competent authority, Nagpur, was necessary. Therefore, Deokabai shall immediately take steps to obtain the permission. After the date of getting the permission from the competent authority, when Deokabai would get another suitable house then she would get the sale deed of this house registered in Uttam’s name. 3. The entire cost of registration of the sale deed of the house shall be borne by Uttam. In case there is any complication or difficulty in getting the sale deed of the house registered in Uttam’s name or in case it becomes legally impossible for Deokabai to get the sale deed of the house registered in Uttam’s name, then Deokabai shall pay back to Uttam the amount of Rs. 5,000/- with interest thereon. Deokabai shall not put forth any excuse for the same. Legal Issues: So far as the present agreement for sale was concerned, she took the step of applying for necessary permission to the Competent Authority, Nagpur on March 3, 1979. The requisite permission for selling the house was granted to her in the month of May, 1979. On 9.7.79, a notice was sent by the respondent to the appellant requiring her to get the sale deed executed and registered’ in his favour on 9.7.1979 and to remain present in the office of Registrar at 11 a.m. Since the appellant failed to turn up at the appointed time and place and the respondent allegedly had taken all steps necessary towards completion of the sale deed, like purchase of stamp papers and buying of drafts of money, he filed a suit for specific performance on July 26, 1979. The respondent firstly prayed for a decree for specific performance and possession of the property in dispute, but in the alternative claimed return of the earnest money of Rs. 5,000/with interest in case specific performance was not all owed. Law Applicable: Section 32 provides that contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until the event has happened. If the event becomes impossible, such contracts become void. Similar Cases: The following cases have cited the above case (Deokabai (Smt) vs Uttam on 27 July, 1993) to give a Judgment. 1. Bhagwan Singh vs Teja Singh Alias Teja Ram on 6 January, 1994 2. Kum. Maria Eliza Marques vs Shri Madhukar M. Moraskar & Others on 19 November, 1997 3. Kec International Limited & †¦ vs Union Of India & Others on 8 July, 2009 4. Bharat Sanchar Nigam Ltd. & Ors vs Kec International Ltd. & Ors on 15 September, 2009 5. W.P. No. 7513 (W) Of 2011 Smt. †¦ vs The State Of West Bengal & Ors on 18 May, 2011 Conclusion: The respondent, in the situation, could not straightway ask the appellant to specifically perform the contract unless he initially had put the appellant to notice, to seek and get another suitable accommodation within a reasonable time within which it could reasonably be available in the town of Nagpur. Such a notice obviously could be given only after the grant of permission to sell by the Competent Authority, Nagpur, because in the event of non-grant of permission the search for another suitable accommodation would have become unnecessary. Thus we are of the view that in the facts and circumstances, the two important contingencies are the appellant getting a suitable accommodation before she could be asked to specifically perform the contract of sale and, in case of a genuine difficulty arising, to opt for returning the earnest money with interest. She cannot, in the present set of facts, be obliged to part with her property by effecting a sale. Resultantly, the appeal to grant refund of Rs. 5,000/- with interest at the rate of 8% calculated from 18.1.79 till payment or recovery is allowed.