Monthly Archives: November 2013

Agreement for sale – time specified for payment of sale price

In an agreement for sale relating to immovable property if time is specified for Payment of sale price but not in regard to execution of sale-deed, it will become essence only with reference to payment of sale price but not in regard to execution of sale deed. Ordinarily in relation to agreements to sale of immovable properties, time is not considered to be the essence of contract unless such an intention can be gathered either from express terms of contract or by necessary implication, if it is or can be borne out from the terms of the contract as to what is the intention of the parties.
A constitution bench of the Hon’ble Apex Court in Chand Rani v. Kamal Rani, (1993) 1 SCC 519 explained this principle as under:
“It is well accepted principle that in the case of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.”
In Saradamani Kandappan v. S. Rajalakshmi and others, (2011) 12 SCC 18, it was held as under:
“The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale, set out in the agreement….Even if the urgent need for the money within the specified time is not set out, if the words used clearly show an intention of the parties to make time the essence of the contract, with reference to payment , time will be held to be the essence of the contract.” Narayan Sharma v. Devendra Kumar Sharma, 2013 (121) RD 365.

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Auction Sale – Absence of Adequate Publicity

In the absence of adequate publicity of auction sale there could not be maximum participation of bidders on the basis of the land sought to be auctioned could fetch reasonable price as intending bidders are not able to know details of land or itemized valuation of land sought to be auctioned, as such auction sale cannot be said to be in accordance with law. If publicity and maximum participation is to be attained, all the bidders must know the details of asset and valuation thereof. As held by the Hon’ble Apex Court in various decisions that reasonableness of price is to be tested against the dominant consideration to secure best price for the property to be sold and this can be achieved only when there is maximum public participation in the process of sale and everybody has opportunity of making offer. Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price. Bhanu Pratap Singh v. Board of Revenue, 2013 (121) RD 339.

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Cognizance taken by Magistrate

In Black’s law Dictionary the word “cognizance” has been defines as under:
“Cognizance/Ko(g) nezens/ Jurisdiction or the exercise of jurisdiction or power to try and determine causes; judicial examination of a matter or power and authority to make it. Judicial notice or knowledge; the judicial hearing of a cause; acknowledgment; confession; recognition.”
In oxford Dictionary the word “cognizance/ko (g) niz(e)ns/(also cognizance)” n.1. Formal knowledge or awareness –Law the action of taking judicial notice. 2. Heraldry a distinctive device or mark, especially as formerly worn by retainers of a noble house. PHRAZES take cognizance of formal attend to; take account of.”
In the New Lexicon Webster’s Dictionary of the English Language the word “cognizance” has been defined as under:—
“cog-ni-zance (kgnizens, konizens) n. the range of mental observation or awareness/the fact of being aware, knowledge/(law) the power given to a court to deal with a given matter, jurisdiction/(heraldry) a distinguishing device beyond one’s cognizance not one’s concern, outside one’s terms of reference to have cognizance or to take into one’s reckoning cognizant adj., cognize (kbgnaiz) pres. Part. Co. gniz.ing past and past part, cog.nized v.t. To make (something) an objection of cognition (O.F. conoissance, knowledge).”
The Hon’ble Apex Court has elaborately dealt with the expression “taking cognizance” in Re Chief Enforcement Officer v. Videocon International Ltd. And others, (2008) 2 SCC 492. In paras 19 and 20 the Hon’ble Apex Court deals with the expression cognizance as under:
“ The expression cognizance has not been defined in the Code. But the word (cognizance) is of indefinite import. It has no esoteric or mystic significance in criminal law. It merely means “become aware of” and when used with reference to a court or a judge, it connotes to take notice of judicially.” It indicates the point when a court or a Magistrate takes judicial notice of an offence with a view to initiating proceedings in respect of such offence said to have been committed by anyone.
“Taking cognizance” does not involve any formal action of any kind. It occurs as soon as a Magistrate applies his mind to the suspected commission of an offence. Cognizance is taken prior to commencement of criminal proceedings. Taking of cognizance is thus a sine qua non or condition precedent for holding a valid trial. Cognizance is taken of an offence and not of offender. Whether or not a Magistrate has taken cognizance of an offence depends on the facts and circumstances of each case. And no rule of universal application can be laid down as to when a Magistrate can be said to have taken cognizance.”
In view of the legal position, it is crystal clear that cognizance of an offence is taken depending on the facts and circumstances of the case.
Once the Magistrate takes cognizance of an offence either without discussing what are the reasons behind it, it shall be presumed that on the basis of material available before him he is satisfied that there is sufficient material for taking cognizance and if he is satisfied with those materials for taking cognizance, the detailed discussion of those materials by the learned Magistrate is not required. Further once he issues process, even without writing word ‘cognizance’ it is presumed that he has taken cognizance, the writing of word ‘cognizance is taken’ is not necessary. The reason is that by issuance of process he proceeds with the case and the accused who has been summoned for trial have sufficient opportunity to defend himself at the appropriate stage provided in the Code. In response of issuance of process/summons it is not open for the accused to challenge the summoning order on the ground that no cognizance has been taken or no satisfaction has been shown or there is no detail discussion of the material available rather he has to follow the next step of the process. Ms. Sonia Gobind Gidwani v. State of U.P., 2013 (83) ACC 312.

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