JUDGMENT - SHAH S.K., J.:—The plaintiffs have filed the suit for specific performance of the agreement of sale of a flat, in the alternative for refund of earnest money and for compensation. 2. Defendant No. 1 is a partnership firm of which defendants Nos. 2 to 4 are the partners. Defendant No. 5 is a subsequent purchaser for value. 3. Defendant No. 1 is a firm of builders. Their business is to build buildings and sell the flats. By an agreement dated 27th March, 1976, the plaintiffs agreed to purchase a Flat No. 304 comprising of three rooms and a kitchen and two toilets and bathrooms on the 3rd floor of the proposed building admeasuring about 970 sq. ft. built up area for a total consideration of Rs. 1,05,100/-. By way of earnest money, the plaintiffs paid to the defendants a sum of Rs. 21,000/-. Under the agreement, the next instalment of Rs. 21,000/- was agreed to be paid by the plaintiffs to the defendants by end of April, the second instalment of Rs. 21,000/- was agreed to be paid by the plaintiffs to the defendants by end of May and the last instalment of Rs. 42,100/- was agreed to be paid by the plaintiffs to the defendants at the time of getting possession of the flat. It is undisputed that none of the amounts of the instalments were paid by the plaintiffs to the defendants. Lot of correspondence ensued between the plaintiffs and the defendants. The plaintiffs had raised dispute about the marketable title. Lastly, by defendants letter dated 7th June, 1977, the defendants stated that they were unable to produce the promised documents of title and that for the said reason the defendants put an end to the said agreement. With that letter, the defendants forwarded a cheque for a sum of Rs. 21,000/- by way of refund of earnest money to the plaintiffs. 4. It is further undisputed that subsequent thereto, again lot of correspondence ensued between the plaintiffs and the defendants. The defendants did not pay heed to the plaintiffs request and ultimately sold the said flat to defendant No. 5 under an agreement dated 28th February, 1978. 5. The plaintiffs alleged that for purchase of the said flat the plaintiffs had a talk with defendants Nos. 2 and 4 who were representing the defendants. The defendants did not pay heed to the plaintiffs request and ultimately sold the said flat to defendant No. 5 under an agreement dated 28th February, 1978. 5. The plaintiffs alleged that for purchase of the said flat the plaintiffs had a talk with defendants Nos. 2 and 4 who were representing the defendants. The last meeting took place on 27th March, 1976 between the plaintiffs and defendant No. 2 for finalisation of the agreement. During the said agreement, defendant No. 2 produced a printed copy of the agreement for sale and stated that the plaintiffs should pursue the same and sign the same. At that time, defendant No. 1 had agreed to acquire the said plot of land from Bipinbhai Nagindas Patel and others under an agreement for sale dated 17-7-1975. It was also mentioned that the certificate of marketability of the title was issued by M/s. Shah Sanghavi, Advocates of the defendants. It was mentioned in the printed form of agreement in Clause 2 that a copy of such certificate was annexed as Exhibit "A" to the agreement. However, the plaintiffs noticed that no such copy was annexed to the agreement which the plaintiffs executed on 27-3-1976. In the recital made in the printed agreement, there was also mention that inspection of all documents have been given by the defendants to the plaintiffs. However, in fact, no such inspection was given by the defendants to the plaintiffs, although the defendants were under an obligation to do so. When this was pointed out to the defendants, it is alleged by the plaintiffs, defendant No. 2 stated that the said agreement was similar to the other agreements entered into by the 1st defendants with other purchasers and that the plaintiffs should execute the said agreement. At that time, defendant No. 2 assured the plaintiffs that the defendants had a marketable title in respect of the said plot of land free from all encumbrances and that they would satisfy the plaintiffs about the same and that they would deliver to the plaintiffs a clear certificate of title issued by their Advocates before demanding further instalments of the purchase price. It is under these circumstances that the plaintiffs executed the said agreement although the documents pertaining to the marketable title of the defendants were not shown to them and no inspection of such documents was given to them. 6. It is under these circumstances that the plaintiffs executed the said agreement although the documents pertaining to the marketable title of the defendants were not shown to them and no inspection of such documents was given to them. 6. The plaintiffs further alleged that despite such oral agreement by the defendants not to demand the balance consideration, the defendants by their letter dated 31-12-1976 wrongfully called upon the plaintiffs to pay a sum of Rs. 63,100/- towards further instalment of the purchase price. The plaintiffs replied to this letter and pointed out that the demand was unjustified and contrary to the agreement between the parties. By that letter, the plaintiffs also pointed out that the defendants had not till then produced and delivered the certificate of their clear and marketable title and called upon them to do so whereupon the plaintiffs stated that they would pay the instalments as per the agreement. The defendants however failed and neglected to produce and deliver to the plaintiffs the certificate of their clear marketable title. Thereafter, in the first week of March, 1977 the plaintiffs alleged, the first plaintiff contacted defendant No. 2 when the defendant No. 2 handed over to the plaintiffs a copy of the certificate dated 17-1-1977 issued by M/s. Shah Sanghavi, defendants attorneys, certifying with reservations title to the said plot of land. The plaintiffs showed the said certificate to their Advocates. Thereafter, the meeting took place between the plaintiffs Advocate, Shri Wadia of M/s. Mulla Mulla Craigie Blunt Caroe and Shri Jassubhai Shah of M/s. Shah Sanghavi which was attended by the plaintiff No. 1. At that meeting, the defendants Advocates showed copies of certain documents of title. However, from the said certificate, it became apparent that the original agreement for sale dated 17-7-1975 entered into between the vendors of the said plot and the 1st defendants was varied by a deed of modification dated 17-12-1976. As such, the said certificate of title was not satisfactory to the plaintiffs and their Advocates. Therefore, the plaintiffs by letter dated 25-5-1977, addressed by their Advocates to the defendants Advocates, pointed out that the defendants had to make out a marketable title and had to give inspection of the title deeds. As such, the said certificate of title was not satisfactory to the plaintiffs and their Advocates. Therefore, the plaintiffs by letter dated 25-5-1977, addressed by their Advocates to the defendants Advocates, pointed out that the defendants had to make out a marketable title and had to give inspection of the title deeds. By the said letter, the plaintiffs also raised various queries regarding title of the said plot of land and called upon the defendants to give inspection of the title deeds and also carry out certain requisitions contained therein. By that letter, it was also pointed out that in view of the deed of modification dated 17th December, 1976 between the vendors and the defendants, the vendors were entitled to terminate the agreement and forfeit all the monies received by them from the purchasers. By letter dated 23-5-1977, the defendants Advocates pointed out that the query regarding registration of the gift deed dated 31-3-1970 had been satisfied by reason of the issuance of certificate under section 230-A of the Income-tax Act. The plaintiffs replied the said letter by their letter dated 2-6-1977 and required the defendants to obtain a letter from the Sub-Registrar of assurances stating that no queries were then outstanding regarding registration of the deed of gift. 7. The plaintiffs, therefore, alleged that the defendants had to make out marketable title before the defendants can ask for further payment from the plaintiffs. However, the defendants by their letter dated 7-6-1977 wrongly stated that the defendants were unable to produce the promised documents of title and for that reason, they were putting an end to the said agreement. The plaintiffs alleged that the purported termination of the agreement was illegal and unjustified. The plaintiffs alleged that they were always ready and willing to perform their part of the agreement, viz. payment of balance consideration. The plaintiffs were entitled to demand from the defendants clear marketable title. 8. The plaintiffs further alleged that the Bombay District Central Co-operative Bank Ltd. had taken possession of the premises in the said building and, therefore, on enquiry with the Bank authorities, they learnt that the Bank authorities were satisfied about the defendants title which was depicted by the defendants Advocates certificate of clear marketable title dated 3-8-1977 was pointed out to the defendants. 9. 9. Under these circumstances, the plaintiffs alleged that the termination of the agreement by the defendants was wrongful and illegal. The subsequent sale of the flat to the defendant No. 5 was also illegal. Defendant No. 5 had knowledge of the agreement between the plaintiffs and the defendants. The plaintiffs further alleged that defendant No. 5 is a nominee of the defendants and that defendant No. 5 is not a bona fide purchaser for value without notice. 10. With these allegations the plaintiffs filed the aforesaid suit. 11. Defendants Nos. 1, 2 and 4 resisted the suit by filling written statement. They denied all the allegations made by the plaintiffs. They contend that the plaintiffs themselves were not able to perform their part of the obligations under the agreement. The agreement dated 27-3-1976 between them and the plaintiffs has been cancelled and/or abandoned and/or terminated and/or abandoned by the parties. They denied to have had any oral agreement as alleged by the plaintiffs. As such, they contend that plaintiffs are not entitled to any specific performance of the said agreement or, in the alternative, to any damages or compensation. They contend that plaintiffs have committed breach of the agreement and that the plaintiffs failed and neglected to perform their part of the obligation under the agreement. It is thereafter that the defendants have, by an agreement dated 28-2-1978, sold the suit flat to defendant No. 5 and handed over the possession of the flat to the defendant No. 5 on the same day i.e. 28-2-1978. They contend that defendant No. 5 is a bona fide purchaser of the suit flat for value without notice and, as such, the plaintiffs are not entitled to specific performance of the said agreement. The agreement dated 28-2-1978 with the defendant No. 5 has been registered with the sub-registrar on 17-3-1978. The agreement with the plaintiffs dated 27-3-1976 is an unregistered agreement and, therefore, it is null and void and unenforceable in law. The plaintiffs, therefore, are not entitled to any relief whatsoever in the suit and the suit is liable to be dismissed with costs. 12. While denying that there was any oral agreement or assurance given by them to the plaintiffs, they contend that what is stated and set out in the agreement is correct. They denied that copy of the certificate was not given to the plaintiffs as alleged. 12. While denying that there was any oral agreement or assurance given by them to the plaintiffs, they contend that what is stated and set out in the agreement is correct. They denied that copy of the certificate was not given to the plaintiffs as alleged. They also denied that they did not comply with the provisions of Maharashtra Ownership Flats Act. All the instalments and payments towards consideration were to be made by the plaintiffs as set out in the agreement and the plaintiffs failed and neglected to make payment. The plaintiffs cannot be permitted to set up any oral agreement as alleged by them which is contrary or inconsistent with the terms and conditions of the agreement. While denying that they failed to make out marketable title, they contend that there was no question of making out any marketable title as required by the plaintiffs. They contend that on true and proper interpretation of the correspondence between the plaintiffs and themselves, it was clear that the plaintiffs were neither ready nor willing nor able to perform their obligations under the agreement. They contend that they had rightly terminated the agreement and/or cancelled and/or revoked the agreement. The plaintiffs illegally and wrongly failed to encash the cheque of Rs. 21,000/- sent to the plaintiffs along with the termination of contract. They contend that the plaintiffs have not suffered any loss or damage as alleged by them. They contend that they are not liable to make good any such damage caused to the plaintiffs. On these grounds, the defendants claimed dismissal of the plaintiffs suit either for specific performance or for refund of consideration and compensation. 13. Defendant No. 3 resisted the suit by a separate written statement whereby they adopted all the contentions raised by defendants Nos. 1, 2 and 4 in their written statement. 14. Defendant No. 5 failed to appear and resist the plaintiffs suit. 15. In view of the pleadings of the parties, the following issues were framed to which I record my findings for the following reasons : Issues Findings 1. Whether the plaintiffs prove that they Yes have been ready and willing at all time to perform their part of the obligations? 2. Whether the defendants prove that the No agreement dated 27th March, 1976 is null and void and unenforceable in law? 3. Whether the plaintiffs prove that they Yes have been ready and willing at all time to perform their part of the obligations? 2. Whether the defendants prove that the No agreement dated 27th March, 1976 is null and void and unenforceable in law? 3. Wether the agreement dated 27th No March, 1976, has been cancelled and/ or abandoned and/or terminated as alleged in paragraph 2 of the written statement of defendant Nos. 1 to 4? 4. Wether the plaintiffs failed and neglec- No ted to perform their part of agreement dated 27th March, 1976, as alleged in paragraph 3 of the written statement of defendant Nos. 1 to 4? 5. Whether the defendant Nos. 1 to 4 No have sold the suit flat to the 5th defendant on 28th February, 1978 and put him in possession thereof as alleged in paragraph 3 of the written statement of defendant Nos. 1 to 4? 6. Whether the 5th defendant was a No bona fide purchaser for value of suit flat without notice as alleged in paragraph 3 of the written statement of defendant Nos. 1 to 4? 7. Whether the suit as against the 5th No defendant is misconceived, bad in law, false, frivolous, baseless and vexatious as alleged in paragraph 2 of the written statement of defendant No. 5? 8. Whether the suit is bad for misjoinder Does not survive. of parties and, therefore, liable to be dismissed as alleged in paragraph 3 of the written statement of the defendant No. 5? 9. Whether the defendant Nos. 1 to 4 No failed to furnish to the plaintiffs inspection of documents and/or title certificate as alleged in paragraphs 3 and 4 of the plaint? 10. Whether the Certificate of Title dated Yes 17th January, 1977, issued by M/s. Shah Sanghavi, certified the title of defendant Nos. 1 to 4 with reservations and thus, defendant Nos. 1 to 4 failed to make out a marketable title to the said property as alleged in paragraph 5 of the plaint? 11. Whether the purported termination and/ Yes or cancellation and/or revocation of agreement was illegal and unjustified? 12. Whether the defendants Advocate had Yes issued a certificate of clear marketable title on 3rd August, 1977 to Bombay District Central Co-operative Bank Ltd.? 13. Whether the 5th defendant is a nominee Yes of and has been put up by the defendant Nos. Whether the purported termination and/ Yes or cancellation and/or revocation of agreement was illegal and unjustified? 12. Whether the defendants Advocate had Yes issued a certificate of clear marketable title on 3rd August, 1977 to Bombay District Central Co-operative Bank Ltd.? 13. Whether the 5th defendant is a nominee Yes of and has been put up by the defendant Nos. 1 to 4 to defeat the claim of the plaintiffs has no right, title or interest in the suit flat and agreement dated 28th February, 1978 between the defendant Nos. 1 to 4 and the 5th defendant is colourable, bogus and sham as alleged in paragraphs 9(b), 9(c) and 9(d) of the plaint? 14. Whether the plaintiffs are entitled to No specific performance of the Agree- ment dated 27th March, 1976 as modified by oral agreement contained in paragraphs 2 and 3 of the plaint? 15. In the event that this Honble Court As per order. does not grant specific performance to the plaintiffs, then in that event only, are the plaintiffs entitled to damages in the sum of Rs. 81,67,105.05 paise. 16. To what reliefs, if any, are the As per order. plaintiffs entitled? 16. Issue Nos. 2, 3, 9,10, 11 and 12. There is no dispute that there was agreement between the plaintiffs and the defendants Nos. 1 to 4 executed on 27-3-1976 which is produced at Exhibit "C". By that agreement, defendant Nos. 1 to 4 agreed to sell and the plaintiffs agreed to purchase Flat No. 304, situate on 3rd floor of the building which the defendants were to construct on the plot. The flat was comprising of three bedrooms, a kitchen and two toilets and bathrooms on the 3rd floor of the proposed building. The flat was admeasuring 970 sq. ft. built up area. The aggregate consideration was Rs. 1,05,100/-. The earnest money which the plaintiffs paid to the defendants was Rs. 21,000/-. 17. As per the agreement, the plaintiffs were to pay to the defendants 1 to 4 part of the consideration of Rs. 21,000/- by end of April, 1976 the second instalment of Rs. 21,000/- was to be paid by the plaintiffs by end of May and the remaining amount of Rs. 42,100/- was agreed to be paid by the plaintiffs to the defendants on or before the date of taking possession. 18. 21,000/- by end of April, 1976 the second instalment of Rs. 21,000/- was to be paid by the plaintiffs by end of May and the remaining amount of Rs. 42,100/- was agreed to be paid by the plaintiffs to the defendants on or before the date of taking possession. 18. The plaintiff stated in his evidence that when the agreement was executed, there was averment that the defendants were in possession of the plot of land bearing C.S. No. EX/76 admeasuring 6000 sq. yards as described in the schedule annexed to the agreement. A further averment was that the plaintiffs had taken inspection of the agreement for sale of the said plot and are fully conversant with the terms and conditions and convenants contained therein. The averment also was to the effect that the defendants supplied to the plaintiffs such of the documents mentioned in Rule 4 of the Maharashtra Ownership Flats Act, 1964 as demanded by the plaintiffs. Further averment was that the defendants had, prior to the execution of the agreement, satisfied about the title of the property of the defendants to the said plot and the plaintiffs shall not be entitled further to investigate the title of the defendants with regard to the said plot. There was also averment to the effect that the declaration made by the defendants that the tenure of the plot was freehold and was free from encumbrance and claims. 19. The case of the plaintiffs is that although such recitals were made in the agreement, actually no document of title of the defendants was shown to the plaintiffs nor any certificate of title was attached the agreement when the agreement came to be executed. The plaintiff states that at the time of execution of the agreement, there was talk between him and the defendant Nos. 2 and 4 on the day of execution of the agreement i.e. 27-3-1976. These lacunas were brought by the plaintiff to the notice of the defendant No. 2 and at that time the defendant No. 2 informed the plaintiffs that all the intending purchasers were signing similar agreements and the agreement which was placed before the plaintiffs was identical with those agreements and that the plaintiff and his wife should execute the agreement. These lacunas were brought by the plaintiff to the notice of the defendant No. 2 and at that time the defendant No. 2 informed the plaintiffs that all the intending purchasers were signing similar agreements and the agreement which was placed before the plaintiffs was identical with those agreements and that the plaintiff and his wife should execute the agreement. The plaintiff also states that the 2nd defendant assured that the defendants had marketable title in respect of the plot of land and he would be able to satisfy the plaintiffs and give to the plaintiffs the certificate of title issued by defendant No. 1s Advocate within a day or two and, in any event, before the defendant No. 1 demanded any further instalments. The plaintiffs further state that 2nd defendant also informed the plaintiff that all the purchasers were given facility of instalments to pay the price of the flat and on such assurance that, the plaintiff states, he and his wife executed the printed agreement given to them by the 2nd defendant and they handed over a cheque of Rs. 21,000/- towards payment of earnest money. 20. Though the defendants have denied of such talk having taken place, what is pertinent to be noted is that the 2nd defendant has not entered the witness box. The evidence is given by the defendant No. 3. According to the case of the plaintiffs and the plaintiffs evidence, this talk had taken place between the plaintiffs and the 2nd defendant at which time other defendants were not present. Therefore, the defendant No. 3 cannot say anything with regard to what transpired between the plaintiffs and defendant No. 2 at the time when the plaintiffs executed the agreement of sale. Moreover, it has to be noted that the plaintiffs evidence has gone unchallenged. There is no cross-examination by the defendants to the plaintiffs witness i.e. plaintiffs No. 1. 21. In this regard, the learned Counsel representing the defendants vehemently submitted that such subsequent oral agreement with regard to the production of certificate of title was an after thought. In his submission, no such averment was made in any of the correspondence that ensued between the plaintiffs and the defendants. 21. In this regard, the learned Counsel representing the defendants vehemently submitted that such subsequent oral agreement with regard to the production of certificate of title was an after thought. In his submission, no such averment was made in any of the correspondence that ensued between the plaintiffs and the defendants. Be that as it may, it is clearly admitted by the defendants witness in cross-examination that at the time of execution of the agreement by the plaintiffs, the certificate of title was not annexed to the agreement nor was it available with the defendants. The witness admitted in cross-examination that the process with regard to obtaining the clear title was in progress and specifically admitted in cross-examination that on 17-1-1977, for the first time, they received the certificate of tile from their solicitors, viz. M/s. Shah Sanghavi. In view of this admission, it is clear that when the plaintiffs executed the agreement, the certificate of title was not in existence at all and, therefore, the averments with regard thereto made in agreement were totally false and incorrect. It is but natural for the plaintiffs to withhold the payment till the defendants satisfied him their title to the plot and the entitlement to make construction on the said plot. It is undisputed that the plot belongs to some different person and there was an agreement between the said third person and the defendants with regard to the sale of the plot in favour of the defendants. Showing existence of certificate of title or the marketable title in favour of the defendants was the statutory requirement under the provisions of section 3 of the Maharashtra Ownership Flats Act, 1963. It was, therefore, obvious that there was understanding between the plaintiffs and the defendant No. 2 that no payment would be insisted by the defendants from the plaintiffs till such certificate of title and marketable title is shown to the plaintiffs. In this regard, the plaintiffs evidence has gone unchallenged and, therefore, the same shall have to be relied and accepted. 22. The defendants had made a demand of Rs. 63,100/- being the payment of part consideration from the plaintiffs by their letter dated 31-12-1976, Exhibit "D". In this regard, the plaintiffs evidence has gone unchallenged and, therefore, the same shall have to be relied and accepted. 22. The defendants had made a demand of Rs. 63,100/- being the payment of part consideration from the plaintiffs by their letter dated 31-12-1976, Exhibit "D". The letter specifies that the work of completion of the wing of the building consisting of the said flat sold to the plaintiffs was in progress and that the defendants were making all efforts to complete the same by February, 1977. It is under this pretext that they demanded Rs. 63,100/-. It is an admitted position that till that time the certificate of title was not available with the defendants. The defendants witness admitted that the certificate of title was issued by their Solicitors, M/s. Shah Singhavi only on 17-1-1977. This demand, therefore, was obviously improper and untenable. In this regard, the learned Counsel for the defendants attempted to submit that the time of payment of the instalments was essence of the contract. This aspect is a question of fact. Therefore, it ought to have been pleaded by the defendants in their written statement. However, no such pleading appears in the written statement. No issue has been suggested nor issue has been framed in this regard. Apart from this, I would like to deal with it to decide the suit completely. 23. The submission made on behalf of the defendants is that the time of payment of the instalments was essence of the contract. For making this submission, he relied on the decision of the Apex Court in the case of (Chand Rani v. Kamal Rani)1, reported in A.I.R. 1993 S.C. 1742. The learned Counsel for the defendants submitted that the payment of instalment was by end of April, the second instalment was to be paid by end of May and the last one at the time of possession. None of the instalments were paid by plaintiffs on time and even after notice of demand dated 31-12-1976, Exhibit "D". Therefore, the defendants had rightfully terminated agreement by letter dated 7-6-1977, Exhibit "I". It is however, settled law that the fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of contract and particularly when the contract relates to sale of immovable property. Therefore, the defendants had rightfully terminated agreement by letter dated 7-6-1977, Exhibit "I". It is however, settled law that the fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of contract and particularly when the contract relates to sale of immovable property. It will normally be presumed that the time was not the essence of contract (Gomathinayagam Pillai v. Palaniswami Nadar)2, A.I.R. 1967 S.C. 868. In the present case, there is no specific stipulation in the agreement that the time of payment of instalments would be the essence of contract. There are also no surrounding circumstances wherefrom it can be seen that time of payment of instalments was the essence of contract. From the defendants own showing it was not so. The instalments were payable by end of April, end of May and the last one at the time of possession. The first two instalments were not paid by the plaintiffs. The possession of the flat was also not offered by the defendants to the plaintiffs. Despite this, there was no demand of the first and second instalments by the defendants from the plaintiffs till the demand came to be made for the first time on 31-12-1976 by letter at Exhibit "D". This itself clearly indicates that neither the plaintiffs had gathered nor the defendants had gathered that time of payment of the instalments was the essence of the contract. The facts of the case before the Apex Court in the aforecited judgment were entirely different. In the case before the Apex Court, there was specific stipulation about the payment and there was further obligation to be discharged by the vendor on such payment being made by the purchaser. That is not the case here. On the contrary, as discussed above, the defendants did not have in their possession the certificate of title when the demand was made by letter at Exhibit "D". Therefore, I do not find any merit in this submission that the time of payment of instalments was the essence of the contract. Moreover, the demand that was made by Exhibit "D" was not of first two instalments, but of first and third instalments or second and third instalments. The agreement makes it clear that third instalment was payable on delivery of possession. Moreover, the demand that was made by Exhibit "D" was not of first two instalments, but of first and third instalments or second and third instalments. The agreement makes it clear that third instalment was payable on delivery of possession. There is nothing on record to indicate that the flat was ready for handing over possession. For all these reasons the demand of Rs. 63,100/- made by the defendants by letter dated 31-12-1976, Exhibit "D", was totally uncalled for. 24. The next question is whether the termination of the contract/agreement by the defendants was proper and legal. In this regard, the plaintiffs witness states that after they received the letter of demand of money, he personally contacted the 2nd defendant and pointed out to him that the demand made by them by letter dated 31-12-1976 was unjustified and contrary to the agreement arrived at. The plaintiffs also pointed out to the defendant No. 2 that the latter had not yet delivered the certificate of their title and they should immediately do so. The plaintiffs further told defendant No. 2 that on producing the certificate, he would make payment of instalments under the agreement. This version has gone unchallenged as there is no cross-examination by the defendants. The plaintiffs witness further states that in March, 1977, he again contacted the 2nd defendant and it is at that time the 2nd defendant had handed over to him a copy of the certificate dated 17-1-1977 which is produced at Exhibit "E". He further avers that after getting the copy of certificate, he showed it to his Advocates. Thereafter, there was meeting between his Advocate, Mr. S.K. Wadia, partner of M/s. Mulla Mulla and the Advocate of the defendants Mr. Jassubhai Shah of M/s. Shah Sanghavi. At that meeting, the defendants Advocate showed copies of certain documents. From this, it was noticed that the original agreement dated 17-7-1975 entered into by the defendants with the owners of the plot was varied by a deed of modification dated 17-12-1976. In the opinion of the plaintiffs Advocates, the certificate of title dated 17-1-1977 issued by M/s. Shah Sanghavi was not satisfactory. Therefore, the plaintiffs Advocates addressed a letter dated 25-5-1977 (Exhibit "F") on behalf of the plaintiffs to the defendants raising certain queries and further asking for inspection of the title deeds. Thereafter, there was further exchange of letters between the partners of the Advocates. Therefore, the plaintiffs Advocates addressed a letter dated 25-5-1977 (Exhibit "F") on behalf of the plaintiffs to the defendants raising certain queries and further asking for inspection of the title deeds. Thereafter, there was further exchange of letters between the partners of the Advocates. By letter dated 2-6-1977, Exhibit "H", the plaintiffs insisted that defendants should satisfy the plaintiffs with regard to the queries and with regard to the clear marketable title and certificate of title. In reply thereto, the defendants by their letter dated 7-6-1977, Exhibit "I", the defendants terminated the agreement. The recitals in the letter are as under: "With reference to your letter dated the 2nd June, 1977 in the above matter raising certain queries as regards the title deeds in the above matter, our clients are unable to produce the same. In view of the said circumstances, our clients put an end to the agreement for sale and return to you herewith the cheque for the sum of Rs. 21,000/- in your favour being the amount of earnest paid by your clients. Pleaded note that the said agreement stands cancelled and/or revoked." Along with this letter, the defendants sent a cheque of Rs. 21,000/- to the plaintiffs by way of refund of earnest money. By subsequent correspondence, the plaintiffs made it clear to the defendants that the termination was illegal and also intimated that they had not encashed the cheque of Rs. 21,000/-. 25. The question is whether this termination was proper and legal. Now as discussed above, the plaintiffs by the letter dated 25-5-1977, Exhibit "F" had raised certain queries after taking inspection of the documents and after discussion between the Advocates of the parties. Therefore, it was necessary for the defendants to answer those queries. However, instead of answering the queries, they kept quiet. The plaintiffs again wrote to them on 2-6-1977 (Exhibit "H") to answer the queries and satisfy the marketable title. There was nothing wrong or illegal on the part of the plaintiffs to raise the queries and requiring the defendants to satisfy their title. However, instead of replying and satisfying the queries, the defendants abruptly terminated the contract/agreement by letter dated 7-6-1977 (Exhibit "I"). This was totally uncalled for and illegal. In the first place, certificate of title as required by the law was not annexed to the agreement not was it made available to the plaintiffs. However, instead of replying and satisfying the queries, the defendants abruptly terminated the contract/agreement by letter dated 7-6-1977 (Exhibit "I"). This was totally uncalled for and illegal. In the first place, certificate of title as required by the law was not annexed to the agreement not was it made available to the plaintiffs. That came in possession of the defendants for the first time on 17-1-1977. The defendants made the wrongful demand of instalments by letter dated 31-12-1976, although it was agreed not to make such demand till the certificate of title is delivered. The abrupt termination was, therefore, totally uncalled for. 26. In this regard, the learned Counsel for the defendants vehemently submitted that the plaintiffs insisted for clear title which was not contemplated by the provisions of law. In his submission, the certificate of title dated 17-1-1977, Exhibit "E" was sufficient as required by law. In his submission, the defendants title was clearly disclosed in the certificate at Exhibit "E" and that was sufficient for the plaintiffs to act upon and make payment and perform their part of the contract. For making this submission, he relied on the decision of this Court in the case of (Ramniklal Tulsidas Kotak others v. Varsha Builders others)3, reported in 1992(2) Bom.C.R. 492 : 1993 Mh.L.J. 323. 27. In para 17 of the judgment this Court observed as under : "17. It is clear from the scheme of the Act that the promoter need not necessarily be the absolute owner of the land or a long term, lessee thereof. At the same time, it is imperative that the promoter must have sufficient entitlement and right to construct on the land and dispose of the flats on ownership basis so as to bind the owner of the freehold and the leasehold interest. If the promoter is not the owner of the land or is not the duly authorised lessee of the property but is developing the same as a mere developer under an agreement, the owner or the authorised lessee must necessarily be made a confirming party to the transaction in respect of agreement to sell the flat with each of the flat buyers so as to bind the owner or the lessee with the transaction and not to leave the flat buyer in a lurch later on. If the promoter is developing the land as agent of the owner, such agency must be irrevocable. The above construction follows by necessary implication and is supported by the scheme of the Act and its object is to protect the flat purchasers and check the malpractices." 28. The learned Counsel for the defendants submitted on the basis of these observations that the certificate of title dated 17-1-77 at Ex. E sufficiently discloses the right of the defendants to construct on the land. However, the plaintiffs insisted upon clear marketable title in favour of the defendants by subsequent correspondence, viz. the letter dated 2-6-1977 (Exhibit "H"). It is in view of this that the defendants took it that the plaintiffs were not ready and willing to perform their part of the contract and thus terminated the contract. In this submission, the termination is legal and proper. However in this regard, as observed above, what is required to be noted is that there was a meeting between the Advocates of the parties where the Advocate of the plaintiffs had inspected the documents shown to him and even then he was not satisfied about title of the defendants, the title in the sense the legal right to construct and deliver possession of the flat without any legal hindrance. It is with this view in mind that the Advocates of the plaintiffs had addressed the letter dated 2-6-1977, Exhibit "H" insisting upon the defendants to answer the queries raised in their earlier letter dated 25-5-1977, Exhibit "F" before the plaintiffs could make further payment under the agreement. It is not the case of the defendants that the queries that were made in the letter at Exhibit "F" dated 25-5-1977 were frivolous or irrelevant or were made for the purpose of avoiding the payment to be made. Thus, where the queries were relevant, the defendants were bound to answer them so as to remove all doubt from the mind of the plaintiffs who were investing large sum of money for purchasing the flat and to create a sense of security in the mind of the plaintiffs. It is further to be noted that subsequently, the said Solicitors of the defendants, viz. M/s. Shah Sanghavi, had issued the certificate of title dated 3-8-1977, Exhibit "Q". It is further to be noted that subsequently, the said Solicitors of the defendants, viz. M/s. Shah Sanghavi, had issued the certificate of title dated 3-8-1977, Exhibit "Q". The learned Counsel for the defendants however pointed out that there is no difference between the certificate of title at Exhibit "E" dated 17-1-1977 and the certificate of title at Exhibit "Q" dated 3-8-1977 except few words and the only difference was that at the time of issuing certificate of title dated 17-1-1977, the gift deed was not registered, whereas there is no such mention in the latter certificate dated 3-8-1977. Therefore, in his submission, the plaintiffs had avoided to make payment on the untenable pretext 29. A perusal of the first certificate dated 17-1-1977, Exhibit "E", would indicate that in the last but one paragraph it has been mentioned "However, the said Indenture of gift is pending registration". In the last paragraph, further it has been mentioned as "save and except what is hereinabove set out the title to the above property appears to be free from all encumbrances and Marketable." The plaintiffs had raised valid queries in the letter dated 25-5-1977, Exhibit "F" after considering this certificate and after taking inspection of the documents. If this was so, it was the duty of the defendants to answer the queries and satisfy the defendants as discussed above. It however appears that subsequent thereto and subsequent to the issuance of certificate of title dated 3-8-1977 at Exhibit "Q" large number of flats were purchased by the Bombay District Central Co-operative Bank. That however does not matter. There was no explanation for having abruptly putting an end to the agreement by letter dated 7-6-1977 at Exhibit "I" when there was discussion between the Advocates of both parties and certain valid queries were made in Exhibit "F". Even though it is taken that the defendants were in need of money to get back the money which they had invested in construction, the queries that were raised by the plaintiffs were only on 25-5-1977 and repeatedly then the letter dated 2-6-1977 at Exhibit "H". Within a few days thereafter on 7-6-1977, there was no reason for the defendants to terminate the agreement. In fact by letter dated 2-6-1977, the plaintiffs had made it clear that they were anxious to complete the matter by making further payment as per the agreement. Within a few days thereafter on 7-6-1977, there was no reason for the defendants to terminate the agreement. In fact by letter dated 2-6-1977, the plaintiffs had made it clear that they were anxious to complete the matter by making further payment as per the agreement. By this letter, it was also made clear to the defendants that the plaintiffs were ready and willing to perform their part of the contract, viz. making payment of the balance consideration. Therefore, there was no justification on the part of the defendants to terminate the agreement by letter dated 7-6-1977. It is vehemently submitted on behalf of the defendants that by letter dated 17-6-1977. Exhibit "J" i.e. after the termination of the agreement, the plaintiffs raised for the first time the plea of having not been supplied with the certificate of title, etc. and also for the first time mentioned that the plaintiffs were ready and willing to perform their part of the contract and to complete the purchase of the flat. The learned Counsel for the defendants further submitted that this was an after thought and it was put forth for the first time after the agreement was terminated only with a view to blackmail the defendants. However, this submission is not acceptable. It has to be noted, and it is an admitted position, that at the time of execution of the agreement the certificate of title was not in existence as agreed by the defendants. That came into existence only on 17-1-1977. Thereafter there was meeting between the Advocate of the parties and some queries raised in the hope that the defendants would answer them. In the letter dated 2-6-1977. Exhibit "H", it was clearly mentioned by the plaintiffs that they were anxious to make further payment and to complete the transaction and get possession of the flat as soon as possible. Therefore, I do not find any force in the submission made on behalf of the defendants. 30. Under these circumstances, the Issues Nos. 2, 3 and 9 are answered in the negative, whereas the Issue Nos. 10, 11 and 12 are answered in the affirmative. Issue Nos. 1 4. 31. Therefore, I do not find any force in the submission made on behalf of the defendants. 30. Under these circumstances, the Issues Nos. 2, 3 and 9 are answered in the negative, whereas the Issue Nos. 10, 11 and 12 are answered in the affirmative. Issue Nos. 1 4. 31. With regard to these issues, as observed earlier, there was no question of the plaintiffs making payment of the balance consideration as agreed under the agreement, as admittedly, the defendants had not issued the certificate of title required by the provisions of law. After the demand of Rs. 63,100/- made by the defendants by their letter dated 31-12-1976, Exhibit "D", there is no obligation of plaintiff to pay that amount as the certificate of title was not made available to the plaintiffs by the defendants. The certificate of title was issued by the defendants Solicitors only on 17-1-1977. That was also not sent to the plaintiffs by the defendants on their own. As indicated by the plaintiffs witness it is the plaintiffs who approached the defendants in the month of March, 1977 and contacted the defendant No. 2. It is at that time the defendant No. 2 handed over the said certificate of title, Exhibit "E" dated 17-1-1977. Thereafter, there was meeting between the Advocates and thereafter by a letter dated 25-5-1977, Exhibit "F" certain valid queries were made to the defendants. Therefore, the plaintiffs could not have made payment. Moreover, by letter dated 2-6-1977, Exhibit "H", the plaintiffs made it clear that they were anxious to make payment and complete the contract. This is sufficient to indicate that the plaintiffs were ready and willing to perform their part of the contract. Moreover, the plaintiffs have produced the certificate issued by Union Bank of India at Exhibit "T". It indicates that eight fixed deposit receipts of Rs. 12,000/- each and two fixed deposit receipts of Rs. 6,000/- each all dated 8-3-1976 were in force on 27-3-1976, 7-6-1976, 31-12-1976 and 1-3-1977. Thus, the total amount which was lying in the fixed deposit was to the extent of Rs. 1,08,000/-. The balance consideration was Rs. 84,100/-. This indicates that the amount was very much available with the plaintiffs and they were ready and willing to pay that amount to the defendants subject however to the defendants producing the certificate of title or the marketable title the term used by them. 1,08,000/-. The balance consideration was Rs. 84,100/-. This indicates that the amount was very much available with the plaintiffs and they were ready and willing to pay that amount to the defendants subject however to the defendants producing the certificate of title or the marketable title the term used by them. The defendants did not answer the queries raised by the plaintiffs by their letter dated 2-6-1977 and clarified the position of their title and abruptly terminated the agreement. Therefore, Issue No. 1 has to be answered in the affirmative and Issue No. 4 will have to be answered in the negative. Issue Nos. 5, 6, 7 and 13. 32. The defendants witness has stated that since the defendants were in need of money, they agreed to sell the suit flat to defendant No. 5 for a consideration of Rs. 87,000/- which was lesser than the agreed consideration to the plaintiffs. The witness states that defendant No. 5 approached the defendant No. 1 for purchase of the suit flat and settled at Rs. 87,000/-. On 6-2-1978, the defendant No. 5 paid a sum of Rs. 21,000/- to the defendant No. 1 and paid balance of consideration of Rs. 66,000/- on 8-2-1978 which was the final instalment. The defendants have produced two receipts at Exhibits D-1 and D-2. They also produced the agreement dated 28-2-1978 which is the similar printed agreement as was executed between the plaintiffs and the defendants. 33. With regard to those documents, it is vehemently submitted on behalf of the plaintiffs that defendant No. 5 was the nominee of defendants Nos. 1 to 4 and the sale transaction was only for the purpose of defeating the plaintiffs claim. The learned Counsel for the plaintiffs pointed out that both the receipts, Exhibits D-1 and D-2 dated 6th and 8th February, 1978 respectively, the cheque number is same. When the defendant No. 3 was asked to explain this, he was unable to explain this. The learned Counsel for the defendants however, submits that there was mistake in putting the number as 854282 which should have been 854281. The number appearing on the second receipt is 854282. That may be so. The learned Counsel for the plaintiffs further pointed out a letter dated 8-2-1978 issued by the defendants in favour of defendant No. 5. The learned Counsel for the defendants however, submits that there was mistake in putting the number as 854282 which should have been 854281. The number appearing on the second receipt is 854282. That may be so. The learned Counsel for the plaintiffs further pointed out a letter dated 8-2-1978 issued by the defendants in favour of defendant No. 5. The letter recites that "Pursuant to the agreement made by you with us, we hereby handover you the vacant and peaceful possession of the above flat, which is duly completed in all respects." No such recital however is found in the agreement dated 28-2-1978 which was executed subsequently after issuance of this letter dated 8-2-1978. Moreover, the agreement was executed on 28-2-1978, this letter could not have mentioned that pursuant to the agreement, vacant and peaceful possession was handed over. In the submission of the learned Counsel for the plaintiffs, therefore, it was a fishy and, in fact, there was no sale of the flat to defendant No. 5. On the other hand, the learned Counsel for the defendants submits that the plaintiffs have not disputed the payment of the amounts paid vide receipts Exhibits D-1 and D-2 to defendant No. 1. 34. It is however, the question whether the defendant No. 5 can be said to be the bona fide purchaser for value without notice of the previous agreement with the plaintiffs with regard to the same flat. In this regard, it is the defendant No. 3 who has stated that defendant No. 5 is the bona fide purchaser for value without notice. However, defendant No. 5 has not appeared in the Court and resisted the suit. This burden was on the defendant No. 5 to prove that he was the bona fide purchaser for value and without notice of the first agreement with the plaintiffs. However, he has kept himself away from the Court. All these circumstances and the manner in which the agreement dated 28-2-1978 was executed are indicative of the fact that defendant No. 5 is not a bona fide purchaser for value without notice of the earlier agreement with the plaintiffs. There is also no evidence led by the defendants to prove that they had actually put the defendant No. 5 in possession of the said flat. Under these circumstances, Issue Nos. There is also no evidence led by the defendants to prove that they had actually put the defendant No. 5 in possession of the said flat. Under these circumstances, Issue Nos. 5, 6 and 7 shall have to be answered in the negative and Issue No. 13 shall have to be answered in the affirmative. Issue No. 8. 35. This does not survive. Issue No. 14. 36. Whether the plaintiffs are entitled to specific performance of the agreement dated 27-3-1976, is a discretionary relief. The learned Counsel for the plaintiffs vehemently submitted that this relief shall have to be granted to the plaintiffs. However, considering the circumstances of this case, and particularly when number of years have passed now since after the execution of the agreement dated 27-3-1976 and after the correspondence that ensued between the parties which continued upto the year 1978, now more than 25 years have passed. Therefore, I am not inclined to grant specific performance in favour of the plaintiffs. This issue is answered in the negative. Issue No. 15. 37. The alternative prayer of the plaintiffs is for refund of Rs. 21,000/- with interest at the rate of 15% per annum from 27-3-1976 till payment and compensation being the difference between the market price of the said flat on the date of decree less the price of the flat of Rs. 1,05,100/-, with interest at the rate of 18% per annum from the date of decree till the date of payment. In this regard, the plaintiffs are entitled to refund of earnest money of Rs. 21,000/- with interest. However, interest to be calculated from the date of the agreement i.e. 27-3-1976, but interest can be calculated only from 7th June, 1977 when the cheque was refunded to the plaintiffs shall be at the rate of interest would be 9% per annum. 38. As regards compensation, it is undisputed position that the plaintiffs son purchased a flat admeasuring 454 sq. ft., built up area under the agreement dated 9-7-1998 for the consideration of Rs. 15,89,000/-. The suit flat was admeasuring 970 sq. ft. built up area. Therefore, it is submitted on behalf of the plaintiffs that the compensation will be twice the amount of consideration of 454 sq. ft. less Rs. 1,05,100/-. That means Rs. 31,78,000/- minus Rs. 1,05,100/-; Rs. 30,72,900/-. He further submits that the price of Rs. 15,89,000/-. The suit flat was admeasuring 970 sq. ft. built up area. Therefore, it is submitted on behalf of the plaintiffs that the compensation will be twice the amount of consideration of 454 sq. ft. less Rs. 1,05,100/-. That means Rs. 31,78,000/- minus Rs. 1,05,100/-; Rs. 30,72,900/-. He further submits that the price of Rs. 15,89,000/- was for a smaller flat prevailing in 1998 when the agreement was entered into. Today the price would be much more than that. 39. As regards this, the learned Counsel for the defendants submitted that the plaintiffs have not produced any evidence of having suffered any damages on account of failure of the agreement. He further submits that damages have to be proved 40. The compensation which the plaintiffs have computed cannot be awarded to the plaintiffs. It was clear to the plaintiffs that the defendants have terminated this contract by letter dated 17-6-1977. It was also clear to the plaintiffs that the flat was sold to the defendant No. 5 in February, 1978. The suit came to be filed in 1978 for specific performance of the agreement. If he was badly in need of the flat, he could not have waited for such a long time for securing a flat for himself. The plaintiff could have acquired a flat either in 1978 or few years thereafter if he was badly in need of a flat. However, no evidence had been led by the plaintiffs as to what was the price prevailing then. The plaintiffs are not entitled to compensation as computed by them on the basis of the prices prevailing in 1998 or the price prevailing today. Under the circumstances, taking the price of the flat in Dadar area where the suit flat situates somewhere in 1978, the compensation could be awarded. Although the evidence is not led, we can take into consideration the escalation of prices. From the prices that were prevailing at the time of agreement which was entered into in 1976, the escalation could be taken at the rate of 20% per year. Thus, till the filing of the suit, addition of value would have been around Rs. 45,000/- if the plaintiffs were to purchase similar flat at the time of filing of the suit. This amount can be awarded by way of compensation to the plaintiffs. Thus, the plaintiffs can be awarded Rs. Thus, till the filing of the suit, addition of value would have been around Rs. 45,000/- if the plaintiffs were to purchase similar flat at the time of filing of the suit. This amount can be awarded by way of compensation to the plaintiffs. Thus, the plaintiffs can be awarded Rs. 21,000/- as refund of earnest money with interest at the rate of 9% per annum from 7-6-1977 when the cause of action for suit arose till payment and compensation of Rs. 45,000/- with interest thereon at 9% per annum from the date of the suit till payment. Hence the suit shall have to be partly decreed. Hence, the order. The suit is partly decreed. The prayer for specific performance of the contract is rejected. The alternative prayer is granted as under :-- (1) Defendants Nos. 1 to 4 shall pay to the plaintiffs Rs. 21,000/- by way of earnest money with interest at 9% per annum from 7-6-1977 till payment. (2) Defendants Nos. 1 to 4 shall pay to the plaintiffs Rs. 45,000/- by way of compensation with interest thereon at the rate of 9% per annum from the date of the suit till payment. (3) Defendants Nos. 1 to 4 shall pay to the plaintiffs proportionate costs of suit. Decree be drawn accordingly. Order accordingly. -----