MANU/DE/9261/2006

Equivalent/Neutral Citation: 2006(2)C TLJ305(Del), 2007(94)DRJ762

IN THE HIGH COURT OF DELHI

CS (OS) No. 1599/1999
Decided On: 21.08.2006
Sandvik Asia Pvt. Ltd. Vs. Vardhman Promoters Pvt. Ltd.
Hon'ble Judges/Coram:
Pradeep Nandrajog, J.
Counsels:
For Appellant/Petitioner/plaintiff: Harpreet Oberoi, Adv
For Respondents/Defendant: Sanjay Goswami, Adv.
JUDGMENT
Pradeep Nandrajog, J.
1 . Suit seeks recovery of Rs. 21,00,000 (Rupees Twenty one lacs only) which the
plaintiff paid to the defendant under an agreement to sell dated 19.11.1998 entered into
between the parties. As per the agreement to sell (hereinafter referred to as the
'agreement'), the plaintiff had agreed to purchase the entire third floor having a super
area of 3802 sq. ft. in the building constructed by the defendant on Plot No. 4, Block J,
Community Center, Rajouri Garden, New Delhi for a sale consideration of Rs.
84,82,262. It is alleged by the plaintiff that the amount of Rs. 21,00,000 was paid as
advance towards the sale consideration. Case of the defendant is that the sum received
was by way of earnest money and as plaintiff failed to perform its obligations to pay the
balance sum, the amount was forfeited.
2. Under the terms of the agreement proved as Ex. D-l, which is an admitted document,
the defendant was to obtain requisite no objection from the Income Tax department
under Section 249 UL (3) of the Income Tax Act in Form 37-1 and on receipt of the no
objection, the plaintiff was to be informed and thereupon the balance sum of Rs.
63,82,262 (Rupees Sixty three lacs eighty two thousand two hundred and sixty two
only) had to be paid within 10 days. The agreement further stipulated that
simultaneously, on receipt of payment, the defendant was to execute an irrevocable and
registered general power of attorney, no objection affidavits for mutation in DDA, an
indemnity bond for property tax and other encumbrances, and/or any other relevant
document requested for by the plaintiff. Clause 4 of the agreement stipulated that if the
vendee, i.e. plaintiff fails to make the payment of the balance sale consideration within
10 days from the knowledge of the permission having being obtained from the IT
department, the vendor, i.e. defendant shall be entitled to send a notice calling upon
the vendee to make the payment within 10 days, failing which the said sum of Rs. 21
lacs was to be forfeited by the vendor. Clause 5 of the agreement stipulated that if the
transaction is not completed within a period of 5 months, the vendor shall immediately
refund to the vendee the sum of Rs. 21 lacs, except where the same has been forfeited
in accordance with Clause 4. Under Clause 7 of the agreement, it was the duty of the
vendor to ensure that the property is free from all kinds of encumbrances and under
Clause 9 of the agreement the liability to pay house tax, property tax, water and
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electricity charges, lease money, etc. was of the vendor up to the date of the
agreement.
3. On the pleadings of the parties, the following issues were framed on 08.01.2004:
(1) Whether the suit has been filed by a duly authorized and competent person
? OPP
(2) Whether the sum of Rs. 21 lacs paid by the plaintiff under the agreement to
sell dated 19.11.1998 was an advance or earnest money ? OP Parties
(3) If the aforesaid issue is decided in favor of the plaintiff, holding the same to
be an advance money, could the same be forfeited by the defendant ? OPD
(4) Whether the plaintiff was willing to fulfill the terms of agreement to sell and
was ready and willing to perform the same ? OPP
(5) Whether the plaintiff is entitled to refund of Rs. 21 lacs or any part thereof,
and if so, at what interest ? OPP
(6) Whether any damages have been suffered by the defendant by any breach
of contract, if any, committed by the plaintiff, and if so, what amount ? OPD
(7) Relief.
4. Several letters and communications have been exchanged between the parties. These
have been duly proved. Vide letter dated 31.03.1999 (Ex. D-l/12) defendant informed
the plaintiff of the IT clearance as provided for in Clause 2 of the agreement, and
requested it to make balance payment within 10 days. plaintiff acknowledged receipt of
Ex. D-l/12 on 06.04.1999 and vide reply dated 07.04.1999 (Ex. PW-1/3) expressed its
willingness to complete transaction and requested for the execution of the following
documents:
(1) Sale Deed
(2) Power of Attorney
(3) No Objection Affidavit
(4) Indemnity Bond
(5) Possession Letter
5 . Vide letter dated 09.04.1999 (Ex. D-4), defendant replied to Ex. PW-1/3 and
informed plaintiff that as per the agreement it had to pay balance sale consideration
within 10 days of receipt of no objection from the income tax authorities and,
Therefore, requested for payment. Defendant offered possession and said that it would
execute the necessary documents envisaged under the agreement. Vide letter dated
15.04.1999 (Ex. PW-1/5), the defendant informed the plaintiff that in case they failed to
make balance payment, the amount of Rs. 21 lacs would be deemed to be forfeited
without any further notice. Furthermore, they would also be liable to pay damages due
to the breach of the agreement. plaintiff replied vide letter dated 16.04.1999 (Ex. PW-
1/16). Making a reference to its earlier letter dated 07.04.1999, reiterating that the
required documents had not been executed and, in addition, various payments, taxes,
bills have not been cleared, plaintiff said that same be done and thereafter it would
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make payment. Vide its notice dated 19.04.1999 (Ex. D-7), the defendant offered an
extension by a period of 21 days for plaintiff to make the balance payment and accept
possession. The defendant reiterated its willingness to execute the necessary
documents, on getting balance sale consideration. Vide Ex. PW-1/7, plaintiff served
legal notice dated 23.04.1999 on the defendant, asking for the refund of the advance
money of Rs. 21 lacs within 21 days. Reply to the notice was given vide letter dated
03.05.1999 (Ex. DW-1/21). Defendant stated that since plaintiff had failed to pay the
balance sum and since it was ready to hand over possession and give possession letter
and execute general power of attorney and other documents (except sale deed), sum of
Rs. 21 lacs was forfeited.
6 . Evidenced by the contents of the letters exchanged between the parties, the major
bone of contention between the parties was regarding the non-execution of the sale
deed. Whereas, the plaintiff insisted on execution of the sale deed in its favor,
defendant stated that sale deed was not to be executed and offered to execute a general
power of attorney and hand over possession.
7. The plaintiff examined one witness, PW-1, Sh. Sudhir Malik, Regional Sales Manager,
Coromat Division, Delhi, M/s. Sandvik Asia Limited. He deposed that M/s. Sandvik Asia
is a multinational company and that he is duly authorized to sign, verify, file, present
and prosecute the present suit on behalf of M/s. Sandvik Asia vide a Board Resolution
dated 13.05.1999 (Ex. PW-1/I). He deposed that the company wanted a property with a
clear and clean title and hence, it was agreed that the seller, i.e. defendant would take
all requisite permissions, sanctions and would sell the property without any charge,
encumbrance, claim or demand to the buyer, i.e. plaintiff. To quote in verbatim,
deposition of PW-1 further records:
Being a multinational company, the deponent was not interested in taking any
property solely on the basis of a power of attorney without the corresponding
conveyance deed. Defendant assured us a simultaneous request for execution of
deed of apartment, sale permission would be taken provided we give bulk
payment (at least 25 %) in advance. Since we had bona fide intentions to
purchase the same and believed the defendant to be sincere, we agreed to all
his conditions including that of payment of Rs. 21,00,000 as advance money. It
was also negotiated in such agreement to sell that upon the sale permission
been given by DDA, the defendant would execute sale deed in favor of the
deponent. Therefore, in Clause 3 of the agreement to sell it was added that the
defendant will execute 'any document so requested by the deponent'.
8. He deposed that when dispute surfaced it was orally conveyed to the plaintiff by the
defendant's office that they shall not execute any document other than what was
expressly written in the agreement to sell even though they had promised to execute the
sale deed and had explicitly agreed to execute any other relevant document requested
for. In his cross-examination PW-1 stated that the assurance was given to him verbally
by Mr. Jain, Director of defendant company. On further cross-examination, PW-1
admitted that plaintiff wrote to the defendant for the execution of the sale deed for the
first time vide their letter dated 07.04.1999.
9 . Defendant examined 4 witnesses. DW-1, Mr. Ashok Kumar Jain, Director, M/s.
Vardhman Promoters Pvt. Ltd., deposed that he never agreed to execute a sale deed in
favor of the plaintiff. He stated that what was agreed under the agreement to sell was
the execution of receipt, General Power of Attorney (GPA), Will, Indemnity or such
collateral documents as the plaintiff may require as the plaintiff at that point of time

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required immediate possession of the premises, as it was required to vacate a tenanted
office in Connaught Place, New Delhi, and the formalities for execution of sale deed
required certain permissions to be obtained from the DDA on fulfillment of formalities
and payment of Rs. 100 only. He deposed that it was, Therefore, agreed that initially on
payment of sale consideration, only documents in the nature of agreement to sell and
other documents would be executed till the time the necessary sale permission was
obtained for the execution of a formal sale deed for which in any case, GPA would be
executed by the defendant in favor of the plaintiff. He further stated that as a result of
breach committed by the plaintiff, defendant suffered a loss of more than Rs. 44 lacs
due to the reason that third floor was sold in different portions to 16 parties who paid
to the defendant the amounts as reflected in the flat buyer agreements, office copies
whereof were Ex. DW-1/22.
10. Since it would be relevant, it may be noted here itself that DW-1 was not cross-
examined on the loss suffered by the defendant. No cross-examination was conducted
in relation to Ex. DW-1/22 collectively. The documents were not challenged. Total
amount received by the defendant for sale of the entire third floor is Rs. 25,31,385.
11. DW-2, Shri A.K. Jain, Jr. Engineer (Bldg.), DDA proved the completion certificate
issued by DDA on 14.11.1996 as Ex. DW-1/3 and that as per record of DDA no
unauthorized construction was noted.
12. DW-3, Shri Shiv Dayal, Asstt. Director, DDA (CL) stated that DDA charged a token
sum of Rs. 100 from the space buyers in case of first sale of a floor or a flat by the
original allot tee and that only copy of agreement to sell was enough to do so. He
stated that relating to the suit property no intimation was received from the defendant
pertaining to the sale.
1 3 . DW-4, Shri D.D. Rana, Inspector from the Income Tax department proved no
objection granted by the department in March 1999, being Ex. DW-4/1.
14. On issue No. 1, in view of deposition of PW-1 and proof of PW-1/1 being the Board
Resolution dated 13.05.1999, suit filed on behalf of the plaintiff by Shri Sudhir Malik,
Regional Sales Manager is held to be filed by a duly authorized person. It also has to be
held that the plaint has been signed and verified by a competent person. Indeed, Shri
Sanjay Goswami, learned Counsel for the defendant did not dispute the authority and
competence of Shri Sudhir Malik to file the suit on behalf of the plaintiff as also to sign
and verify the pleadings.
15. Before deciding issue Nos. 2, 3, 5 and 6 which I propose to decide together, issue
No. 4 needs to be decided because decision on said issue would have a bearing on the
remaining issues and the relief.
16. Ex. D-l is the foundation of the dispute. A proper interpretation of the clauses of
the contract would lead us to the ultimate meaning and import of the contract.
17. On the question of interpretation of contracts, courts have time and again reiterated
the principle of harmonious construction of the terms of a contract. Chitty, in Chitty on
Contracts, Volume 1, 29th Edition, observes:
12.063. The whole contract is to be considered. Every contract is to be
construed with reference to its object and the whole of its terms Tlirocmerton v.
Trucey (1585) 1 Plow 145 and accordingly, the whole context must be
considered in endeavoring to collect the intention of the parties, even though
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 the immediate object of inquiry is the meaning of an isolated word or clause.
International Fina Services AG v. Katrina Shipping Limited (1995) 2 LR 344. It
is true rule of construction that the sense and meaning of the parties in any
particular part of an instrument may be collected ex antecedent bus el
consequent bus ; every part of it may be brought into action in order to collect
from the whole one uniform and consistent sense, if that may be done. Coles v.
Hulme (1828) 8 B&C 568. And so Lord Davey said in N.E. Raihvaij v. Lord
Hastings (1900) AC 260 quoting Lord Watsons Chamber Colliery Ltd. v.
Tivyerould (1915) 1 Ch. 268. The deed must be read as a whole in order to
ascertain the true meaning of its several clauses, and the words of each clause
should be interpreted so as to bring them into harmony with the other
provisions of the deed, if that interpretation does no violence to the meaning of
which they are naturally susceptible.
18. The principle ex antecedent bus et consequent bus fit optima interpretation (the
whole of the agreement) is also referred to by Mulla in Indian Contract and Specific
Relief Acts, 12th Edition at Page 267:
The deed must be read as a whole in order to ascertain the true meaning of its
several clauses, and the words of each clause should be interpreted so as to
bring them into harmony with the other provisions of the deed, if that
interpretation does no violence to the meaning of which they are naturally
susceptible. North Eastern Railway v. Lord Hastings (1900) AC 260 per Lord
Davey at 267 (1900) All ER 199 quoting Lord Watsons in Chamber Colliery Ltd.
v. Twyerould (supra). The document must be construed as a whole in order to
ascertain the meaning of several clauses. Thakkar Hemraj Keshavji v. Shah
Haridas Jethabhai MANU/SC/0036/1963 : [1964]3SCR686 ; Navnit Lal and Co.
v. Kishan Chand and Co. MANU/MH/0104/1956 : AIR1956Bom151 ; State of
W.B. v. Narendra Nath Roy MANU/WB/0004/1958 : AIR1958Cal21 ; Gulabchand
Gambhirlal v. Kudilal Govindram MANU/MP/0052/1959 : AIR1959MP151 ;
Soundararajan and Co. Ltd. v. Kpat Annamali Nadar MANU/TN/0152/1960 :
AIR1960Mad480 ; Ram Laljagan Nath v. Punjab State MANU/PH/0068/1966;
Abdul Kader Laskar v. State of W.B. MANU/WB/0036/1967 : AIR1967Cal99 ;
Unidroit Principles, Article 4.4. All terms in the contract must be given effect
rather than deprive some of them of the effect. M. Ami Jothi v. Lajja Bal
MANU/SC/0141/2000 : [2000]2SCR1 .
1 9 . This principle is further substantiated by Kim Lewison, QC in his book The
Interpretation of Contracts, 2nd Edition:
6.02. 'In order to arrive at the true interpretation of a document, a clause must
not be considered in isolation, but must be considered in the context of the
whole of the document.
In Chamber Colliery Ltd. v. Twyerould (supra), Lord Watsons said:
'I find nothing in this case to oust the application of the well-known
rule that a deed ought to be read as a whole in order to ascertain the
true meaning of its several clauses, and that the words of each clause
should be interpreted so as to bring them into harmony with the other
provisions of the deed, if that interpretation does no violence to the
meaning of which they are naturally susceptible.'
The expression of this principle of construction is no more than an enlargement
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 of the general proposition that an individual word takes its meaning from the
context in which it is found. So too an individual clause takes its meaning from
the context of the document in which it is found. Thus, in Batron v. Fitz Gerald
(1812) 15 East 530, Lord Ellenborough, CJ said:
'It is a true rule of construction that the sense and meaning of the
parties in any particular part of an instrument may be collected ex
antecedent bus et consequent bus ; every part of it may be brought
into sense, if that may be done.'
In Re. Strung Music Hall Co. Ltd. Lord Romilly MR (1865) 35 Beav 153 said:
The proper mode of construing any written instrument is to give effect
to every part of it, if this be possible, and not to strike out or nullify
one clause in a deed, unless it be impossible to reconcile it with
another and more express clause in the same deed'.
20. A plethora of cases have upheld and applied this principle in interpreting terms of a
contract. In the report published as Bihar SEB v. Green Rubber Industries
MANU/SC/0075/1989 : [1989]2SCR275 it was observed:
Every contract is to be considered with reference to its object and the whole of
its terms and accordingly the whole contract must be considered in endeavoring
to collect the intention of the parties, even thought the immediate object of
enquiry is the meaning of an isolated clause.
21. The above stated principle has been referred to and applied in the report published
as MANU/SC/0783/2006 : AIR2006SC963 SO-Shin Satellite Public Co. Ltd. v. Jain
Studios Ltd.
22. Therefore, in light of the above stated principles, a harmonious construction of the
clauses of the agreement in question has to be done. The relevant clauses in question
are Clauses 3, 4 and 5. The same read as under:
3. That within 10 days from the knowledge of the date of receipt of permission
from the appropriate authorities in Form 37-1, under Section 249 UL (3) of
Income Tax Act, 1961 the vendee will pay to the vendor the balance
consideration amount of Rs. 63,82,262 (Rupees Sixty three lacs eighty two
thousand two hundred sixty two only). At the same time vendor will execute an
irrevocable and registered general power of attorney, no objection affidavits for
mutation in DDA and indemnity bond for property tax, water, electricity or other
encumbrances and/or any other relevant document requested by vendee in
favor of the vendee, failing to which vendee shall be entitled to get transaction
enforced through the court of law by specific performance of the contract or
enforce any other appropriate legal remedy at the cost and expense of the
vendor.
4. It is also agreed that in case the vendee fails to make the payment within 10
days from the knowledge of the receipt of aforesaid permission from Income
Tax department, the vendor shall be entitled to send a notice under registered
AD and UPC at the registered office and Delhi office (M/s. Sandvik Asia Ltd.,
Indra Palace, Connaught Place, New Delhi - 110001) of the vendee as aforesaid
mentioned, demanding from the vendee to make the balance payment within 10
days. Even after the expiry of 10 days from the receipt of the notice, if the
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 vendee fails to pay the balance consideration, the advance money amounting to
Rs. 21,00,000 (Rupees Twenty one lacs only) will be forfeited by vendor.
5 . Except when the advance money of the vendee has been forfeited in
accordance with paragraph 4 above, if the parties, for whatsoever reasons or
even for any reasons attributed to any of the parties, fail to sign and execute
the irrevocable and registered power of attorney within a period of 5 months of
signing of this agreement to sell, the vendor shall immediately refund the
vendee of its advance of Rs. 21,00,000 without any interest for the period of 5
months. However, in case of any further delay beyond 5 months, the advance of
Rs. 21,00,000 shall carry a penal interest of 24% per annum till its refund
and/or recovery. The refund of the said advance shall be without prejudice and
in addition to the right of the vendee to have the specific performance of this
agreement enforced through the court of law or any other appropriate legal
remedy.
23. Clause 3 contemplates the execution of the following documents:
(1) An irrevocable and registered general power of attorney.
(2) No objection affidavits for mutation in DDA.
(3) Indemnity bond for property tax, water, electricity and other encumbrances.
(4) And/or any other relevant document, requested by the vendee.
2 4 . He who reads Clause 3 may infer that the vendee may request for any other
relevant document to be executed, along with those provided for. But when Clause 3 is
read along with Clause 5, the position changes and this inference falters. Clause 5
provides that if the parties fail to sign and execute the irrevocable and registered
general power of attorney within a period of 5 months of the signing of the agreement
(i.e. till 18.04.1999), then the vendor shall refund the vendee advance of Rs. 21 lacs
without any interest for the 5 months period. On harmoniously construing these two
clauses, the logical conclusion which flows out is that it was only the irrevocable and
registered general power of attorney, the execution of which, would have satisfied
Clause 3. In other words, completed the transaction. It is true that on perusal of only
Clause 3, it would seem that the vendee can ask for the execution of a sale deed, but
reading the agreement as a whole, i.e. Clause 3 together with Clause 5, would make it
crystal clear that the power of attorney was the document which was of consequence.
The sale deed was not a requirement, but just an ancillary document, if a request had
been made. Though it may have been requested for, its non-execution would not be
fatal to the transaction.
25. Sale by way of power of attorney is not uncommon in Delhi. The issue of a power
of attorney sale was gone into depth by this court in the decision reported as Kuldeep
Singh Suri v. Surinder Singh Kalra MANU/DE/0357/1998 : 76(1998)DLT232 , wherein
Anil Dev Singh, J. opined:
3 5 . The instant case is not an isolated case of power of attorney sale. The
power of attorney sales are a reality which cannot be wished away. The practice
of disposal of plots by executing various documents short of sale deeds is
clearly reflected by the decision of this court in Usha Malhotra v. G.S. Uppal
1991 RLR 223, wherein this court noticed the practice of entering into
construction agreement to use it as a camouflage for an agreement to sell. This
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 was a case where along with a construction agreement the sub-lessee of the
plot executed inter alia, the following documents in favor of the purchaser:
(1) Two Wills, one by himself and the other by his wife bequeathing
the property to the purchaser.
(2) General power of attorney appointing husband of the purchaser as
the lawful attorney of the sub-lessee.
(3) Agreement to sell stating that since the sub-lessee was not able to
construct a building on the plot, Therefore, she agreed to sell the same
to the purchaser....
Under the scheme whereby DDA has given the liberty to the plot holders to
obtain freehold title, the position of purchases by sale on power of attorney has
been recognized notwithstanding the fact that such a sale could not be
considered to be a sale of the property in the eye of law under Transfer of
Property Act....
3 8 . It is a matter of common knowledge that in all sub-leases executed on
behalf of the President of India such like restrictive clauses have been
incorporated. It is also a matter of common knowledge that due to such like
restrictions the power of attorney sales in thousands have been effected. If the
instant transaction is held to be illegal then in that eventuality thousands of
such transactions on the same token would have to be declared as illegal.
26. The plaintiff asserts that it had asked for the execution of a sale deed, which was
not done by the defendant, and hence it did not pay the balance consideration. Its
witness deposed to the effect that being a multinational company and wanting a clear
title, plaintiff necessarily wanted a sale deed to be executed for the property. PW-1
deposed that the part ".... and/or any other relevant document requested by the
vendee" was specifically added in Clause 3 because plaintiff wanted a sale deed for the
property. However, in his cross-examination he admitted that the alleged assurance by
the defendant that a sale deed would be executed had verbally been given by the
defendant. He also admitted that a written request for the execution of the sale deed
was made for the first time vide plaintiff's letter dated 07.04.1999, i.e. barely eleven
days before the transaction was to be completed as per the agreement.
2 7 . I fail to appreciate the plaintiff's stand, because if it was so adamant on the
execution of a sale deed, what prevented it from specifically recording in the agreement
that a sale deed would be executed. Surely, when three documents were specifically
mentioned, when agreement was drawn, as to be executed when balance sale
consideration was to be paid, the fourth, i.e. sale deed could also have been mentioned,
more so if the same was supposedly of utmost importance.
28. Evidence led by the defendant to show that the defendant did not execute the sale
deed for any of its other buyers, and that they had been given oral assurance, etc. are
wholly immaterial as it is a settled principle of law that once the parties reduce their
dealing into the form of a contract, the intention of the parties is to be construed from
the contract itself and nothing else. Similarly, the fact that the plaintiff is a
multinational company and, Therefore, obviously wanted a clear title in the property as
stated by its witness, is of no consequence.
29. Chitty in his book on contracts (supra) says:
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 12.043. Intention of parties-The task of ascertaining the intention of the parties
must be approached objectively; the question is not what one or other of the
parries meant or understood by the words used, but 'the meaning which the
document would convey to a reasonable person having all the background
knowledge which would reasonably have been available to the parties in the
situation in which they were at the time of the contract'. The cardinal
presumption is that the parties have intended what they have in fact said, so
that their words must be construed as they stand. That is to say the meaning of
the document or of a particular part of it is to be sought in the document itself.
One must consider the meaning of the words used, not what one may guess to
be the intention of the parties. Smith v. Lucas (1881) 18 Ch. D 531. See also
Prenn v. Simmonds (1971) 1 WLR 1381.
30. Kim Lewison in his book on The Interpretation of Contracts (supra) has taken the
similar view. He propounds that the intention of the parties must be ascertained from
the language they have used, considered in the light of the surrounding circumstances
and the object of the contract, insofar as that has been agreed or proved.
3 1 . In Delta International Ltd. v. Shyam Sundar Ganeriwalla AIR 1999 SC 260, the
Hon'ble Supreme Court held:
15. (2) The intention of the parties is to be gathered from the document itself.
Mainly, intention is to be gathered from the meaning and the words used in the
document except where it is alleged and proved that the document is a
camouflage....
If the dispute arises between the very parties to the written instrument, the
intention is to be gathered from the document read as a whole.
32. The Hon'ble Supreme Court took note of the following extract from Kim Lewison's
book:
1.03. For the purpose of the construction of the contracts, the intention of the
parties is the meaning of the words they have used. There is no intention
independent of that meaning.
33. In addition to the above, the court also placed reliance on Fausset v. Carpenter
(1831) 2 D& C 232, wherein the House of Lords accepted the submission of the counsel
that the court:
.... in judging of the design and object of a deed, will not presume that a party
executing the deed meant to do and did what he was wrong in doing, when a
construction may be put on the instrument perfectly consistent with his doing
only what he had right to do.
3 4 . Similarly, in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd.
MANU/SC/0314/2003 : [2003]3SCR691 (SO, the Hon'ble Supreme Court held (para 40
of Arb. LR):
It cannot be disputed that for construction of the contract, it is settled law that
the intention of the parties is to be gathered from the words used in the
agreement. If words are unambiguous and are used after full understanding of
their meaning by experts, it would be difficult to gather their intention different
from the language used in the agreement. If upon a reading of the document as

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 a whole, it can fairly be deduced from the words actually used therein that the
parties had agreed on a particular term, there is nothing in law which prevents
them from setting up that term. Re. Modi and Co. v. Union of India
MANU/SC/0051/1967 : [1968]2SCR565 . Further, in construing a contract, the
court must look at the words used in the contract unless they are such that one
may suspect that they do not convey the intention, correctly. If the words are
clear, there is very little the court can do about it. Re. Provash Chandra Dalui
and Anr. v. Biswanath Banerjec and Anr. MANU/SC/0422/1989 :
[1989]2SCR401 .
35. Also worth a mention in this regard is Sections 91 and 92 of the Evidence Act. The
courts have propounded that where the terms have been reduced to writing, Section 91
excludes oral evidence of the agreement as well as of what took place when the
agreement was made. Therefore, the decisive consideration is the intention of the
parties, as it flows from the contract between them. And this intention has to be
ascertained on a consideration of all the relevant provisions in the agreement.
36. The defendant did not resile from its obligation under the contract to execute the
documents which were enunciated in the agreement. This stand of the defendant was
reiterated time and again as can be gathered from Ex. PW-1/4, Ex. PW-1/5 and Ex. D-7.
37. I, accordingly, decide issue No. 4 holding that the plaintiff was insisting on the
defendant executing a document which was not agreed to between the parties and
defendant was prepared to execute the required documents and hand over possession.
Since plaintiff did not tender balance sale consideration within the agreed period, I hold
against the plaintiff and in favor of the defendant on issue No. 4.
38. As noted above, testimony of DW-1 pertaining to sale of the third floor to third
parties and amount realised has not been challenged by the plaintiff. Total sale
consideration between the parties was Rs. 84,82,262 out of which defendant received
Rs. 21 lacs when agreement was entered into. Balance amount receivable was Rs.
63,82,262. From third parties defendant realised a sum of Rs. 25,31,385. It is obvious
that the defendant suffered a loss as a result of breach by the plaintiff. The loss is more
than Rs. 21 lacs paid by the plaintiff to the defendant. But, there is no counter-claim.
Since loss suffered by the defendant is more than Rs. 21 lacs no useful purpose would
be served in discussing issue Nos. 2 and 3 for the reason whatever be the nature of the
payment of Rs. 21 lacs paid at the time of execution of the agreement, since damages in
excess have been established the amount was liable to be forfeited as per the
agreement. I, accordingly, hold on issue No. 5 that the plaintiff is not entitled to a
refund of Rs. 21 lacs.
39. The suit fails. It stands dismissed.
40. However, on the facts and circumstances there shall be no order as to costs.
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