Gurnam Kaur And Ors. vs Tulsi Devi
1993 Latest Caselaw 278 Del

JUDGMENT

Vijender Jain, J.

(1) The facts leading to the filing of the present appeal are that the present appeal has been filed by the defendants against the order dated 30-9-1978 passed by Shri M.S. Rohilla. Sub Judge 1st Class,Delhi. Sunder Singh, ancestor of the present defendants (appellants herein)was allotted two houses bearing Nos. M/67-A and M/67B, Malviya Nagar,New Delhi by the Ministry of Rehabilitation, Government of India. The sale consideration whereof was required to be paid in Installments. The respondents filed the suit against the appellants in the Court valuing the suit at Rs. 8,580.00 thereby fixing the value of the property in question. The appellants-defendants in their written statement took the objection to thevaluation, the same being wrong as each quarter was more than Rs. 15,000.00at the relevant time. It is important to mention that for the first time suit was filed by the respondents in the year 1965 whereas the agreement in question was entered into on 22/06/1959. Prior to the filing of the suit in 1971 the respondents filed Suit No. 328 of 1965 in the Court of Shri S.C.Ahuja, Sub Judge 1st Class, Delhi.

(2) On 22/06/1959 the said Sunder Singh entered into an agreement with the respondent that in case the respondent pays the arrears of rent in respect of both the houses and the sum due in respect of house bearingNo. M/67-B, Malviya Nagar, New Delhi amounting to Rs. 5000.00, he would transfer the said house No. M/67-B to the respondents in part performance thereof. In consequence thereof said Sunder Singh transferred the said house to the respondents with vacant possession. It was further agreed between the said Sunder Singh and the respondent that on respondent's advancing a sum of Rs. 3,000.00 to the said Sunder Singh for payment to the Government which sum was due in respect of house No. M/67-A the said sum would be returned by the said Sunder Singh in five yearly Installments of Rs. 600.00 each commencing from 1/01/1960 in default whereof said Sunder Singh would convey the House No. M/67-A also to the respondent subject to the respondent's paying the sums due to the Government in respect of that house. The relevant clause of the said agreement reads as follows :-

"1.that the entire cost of the quarter and arrears of rent shall be deposited or caused to be deposited with the Government of India by the second party either in lump sum or by Installments orby offering claims or by one or more of these modes at the discretion of the second party or Shri D.N. Kaul husband of the second party.The said payments shall be made in the name of the first party and all other steps shall be taken by both the parties to have the ownership rights of the quarter in question transferred in favor of the first party and registration effected in his favor. The first party shall refund a sum of Rs. 3,000.00 only to the second party or her husband Shri D.N. Kaul, whosoever, shall demand the same, in five yearly Installments of Rs. 600.00 each year payable on or before the first day of January each year. The balance of the purchase price paid as also the arrears of rent paid shall be deemed and treated as advance payment of purchase price paid by or on behalf of the second party to the first party for the portion 67B agreed to be sold and transferred to her and shall represent the full and final consideration therefore.Should at any stage the Government of India increase or decrease the purchase price of the quarter or its demand with respect to arrears or rent, the first party shall not be liable to refund and repay more than Rs. 3,000.00 to the second party nor shall the first party demand any concession for the remission in the value paid in respect of the entire quarter or the arrears of rent deposited in respect thereof and whatever be the amount thus paid less by Rs. 3,000.00 to be repaid and refunded to the second party by the first party shall be treated as the full, final and adequate consideration for the said quarter No. 67B including half portion of total land area of 67A and B from the second party to the firstparty.

4.that the amount paid or caused to be paid or deposited on account of purchase price and arrears of rent in respect of the above quarter 67-A & B with the Government of India shall be treated as the first charge of the second party and her husband the said Shri D.N. Kaul on the property so long as 67B is not effectively transferred to the 2nd party and Rs. 3,000.00 repaid to them.

5.that if the first party fails to refund the said sum of rupees three thousand to the second party as stipulated and if any one Installment due remains unpaid after 30 days R.A.D., notice in that behalf the entire sum of Rs.3,000.00 or balance due shall become due at once and on the failure on the part of the first party to repay the same within 15 days next, he shall transfer the other portion of the property namely, 67A also to the second party or the said Shri D.N. Kaul or her nominee for the said consideration ofRs. 3,000.00 and give her/him or their nominee vacant and peaceful possession thereof and have a deed of transfer executed and registration duly effected before the proper registering authority.

8.that in case the first party shall fail to execute his part of the agreement and fail to transfer quarter No. 67B to the second party and execute sale deed in her favor and have it duly registered he shall be liable to pay the second party a sum of rupees five.thousand, plus the aforesaid amount paid or caused to be paid by the second party to the Government in respect of the said quarter on account of purchase price and arrears of rent and the monies spent on improvements and additions, as liquidated damages without prejudice to the second party's right to demand the specific performance of this agreement and to have the specified share, i.e.Quarter No. 67B transferred to herself compulsorily through a Court of law. The same provisions shall apply if and when the right to have the quarter No. 67A transferred in favor of second party or Shri D.N. Kaul arises and the first party fails to do soeffectively."

(3) In terms of the aforesaid agreement respondent was required to advance money to Government Authority. The respondent made all the payments to the Government through her husband pertaining to HouseNo. 67B, the possession of this portion was also given to the respondent as stated earlier. Sunder Singh died on or about 1964 and was survived by the present appellants as his legal heirs. Sunder Singh did not pay any Installments towards the loan advanced to him by the respondent on which account the respondent claimed that she was entitled to the transfer of House No.67A also as per the terms of agreement.

(4) After the death of Sunder Singh, appellant No. 1 Smt. Gurnam Kaur was entered a new allottee by Government in its record. The case of the respondent is that after the death of Sunder Singh, respondent was not allowed to deposit the money which was due as a consequence of which therespondent could not deposit the money in respect of the two houses and towards the dues of the Government. Before tiling of the present suit from which this appeal arises, the respondent had filed a suit bearing Suit No. 328of 1965 for perpetual injunction against the appellant for restraining them from transferring the said houses to any person against the interest of therespondent-plaintiff. During the pendency of the suit appellant No. 1(defendant therein) authorised the respondent to deposit the sum due against the said houses and in pursuance of the terms of the agreement. The case of the respondent is that she accordingly deposited the said amount as well.The case of the respondent before the Trial Court was that the sum ofRs. 3,000.00 advanced to the deceased Sunder Singh was not repaid therefore she was entitled for the transfer of House No. M-67/A as was stipulated by the agreement dated 27/06/1959. On the basis of the written statement filed by the appellant/defendant, the Trial Court framed the followingissues:- 1. Whether the plaintiff is entitled to the specific performance of the agreement dated 22/06/1959 ? OPP2. Whether the suit is not maintainable for the reasons mentioned in the preliminary objections 1 and 2 ? OPP3. Whether the suit is correctly valued for the purpose of Courtfee and jurisdiction ? OPP4. Whether the agreement dated 22/06/1959 is not enforceable? Opp

(5) RELIEF.

5.The Trial Court decreed the suit of the respondent-plaintiff and directed appellant No. 1 who was the allottee of House No. M-67/A andM-67/B, Malviya Nagar, New Delhi to get the necessary permission in performance of the agreement dated 22/06/1959 and execute the appropriate deed of transfer in favor of the respondent-plaintiff in respect of both the houses.

(6) Feeling aggrieved by the said order of the Trial Court the appellants preferred this appeal.

(7) The main ground urged by the learned Counsel for the appellant Shri R.L. Tandon before us was that on a proper consideration of the agreement respondent-plaintiff failed to perform her part of the agreement and was not entitled to invoke the provisions of Specific Relief Act in her favor.

(8) The second contention of Shri Tandon, learned Counsel for theappellants was that Section 74 of the Contract Act comes into play in relation to property No. M-67/A as there was no agreement in relation to the said property but it was merely a penalty clause for non-performance of the obligations by the appellants in relation to the payments made for propertyNo. M-67/A.Section 74 of the Contract Act reads as under :- "COMPENSATION for breach of contract where penalty stipulated for(When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether the not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be,the penalty stipulated for."

(9) In our opinion Section 74 of the Contract Act cannot help theappellant in view of the terms of the agreement dated 22/06/1959.

(10) The third leg of the argument of Shri Tandon was that the agreement dated 22/06/1959 was hit by the provisions of Section 23 of the Contract Act and the said agreement was opposed to public policy as Sunder Singh was allotted the premises under the Terms of Displaced Persons(Compensation and Rehabilitation) Act, 1954 and in relation to the said property, no contract of sale was lawful.

(11) It is the admitted case that the respondent-plaintiff made payments on various dates and according to Shri Tandon the respondent made payment of Rs. 8240.04 and Rs. 255.59 till 2/12/1965. Though according to the respondent she made payments, yet in the suit the total cost of the property was not mentioned but during the hearing of the appeal Counsel for the respondent filed C.M.P No. 346 of 1993. Notice of the same was issued to the Counsel for the appellant who filed reply to the saidapplication. This application was filed by the respondent to clarify the controversy raised in relation to the amount of Rs. 2221.10 paid on 2 5/03/1968. According to the Counsel for the appellant the said amount was paid by the appellant and according to the respondent the amount was not paid in 1968 but in 1965 that too by the respondent. According to respondent there is some over writing which shows that the number '5' was written and thereafter '8' was over written on the same which makes 1965to 1968. We think that at this stage it is not material to go into the controversy as in the written statement filed by the appellants nowhere stated that they had made the payment of the said amount. Moreover, if we carefully examine the agreement to sell which is Ext. PI/I which was drafted by Shri S. Watel, Advocate who was also examined as P.W.1. Shri Watel in his testimony has stated that the said agreement was drafted at the instance of Sunder Singh and plaintiff. The said agreement specifically states thatthe said Sunder Singh was not in a position to pay the purchase price of the said quarter or the first Installment thereof and after Sunder Singh received the final demand notice for payment of the first Installment to the Government with the warning that in case of non-payment the quarter would not be transferred to him with the consequence that it will be auctioned and sold to a third party. Further on the agreement says that for the aforesaid reasons Sunder Singh wanted to associate someone with him for the purchase of the said quarter in order to be able to continue to occupy the same and own at least a part of the said property. It was further stipulated in the agreement that respondent was eager and willing to cooperate with Sunder Singh and purchase half of the premises, namely, M/67-B with its kitchen,bath, lavatory and a common wall between M/67-A and M/67-B at a price of Rs. 5,000.00 and arrears of rent due in respect of the property to be paid to the Government in the account of Sunder Singh in cash. Sunder Singh further assured that he was entering into the said agreement for the betterment of his family and out of necessity. In view of the unequivocal terms of the agreement and in the absence of any specific plea raised in the written statement by the appellant that they had paid the aforesaid amount ofRs. 2221.10 it is too late in the day for them to take up such a plea.

(12) Another aspect of the matter is Ext. PW5/5 which is a registered letter sent by respondent-plaintiff dated 1/05/1962 to said Sunder Singh referring for the agreement of sale dated 22/06/1959 wherein in terms of Clause (1) of the agreement she had asked the said Sunder Singh to pay herRs. 600.00 on the 1st day of January each year beginning with the 1st day of January 1960. She has further stated in the said letter that three Installments of Rs. 600.00 each have become due by now, i.e. Installments due on 1-1-1960,1-1-1961 and 1-1-1962. She has further stated in the said letter that under Clause (5) of the said agreement she must receive the Installments due within30 days as provided in the aforesaid clause. The failure to pay shall invoke the consequences envisaged by the aforesaid clause of the agreement.

(13) Shri Tandon has argued that there was no question of Sunder Singh receiving the payment of Rs. 3,000.00 as no receipt was produced on record by the respondent. Needless to say that in view of the admitted receipt of the letter Ext. PW5/5 it was for Sunder Singh or his legal representatives to have denied or controverter the letter under reference and their resistible conclusion which one can derive is that Sunder Singh failed to adhere to the terms of Clause (5) of the agreement and by virtue of that failure respondent became entitled to get the transfer of the other portion of the property, namely, M-67/A also for the said consideration of Rs. 3,000.00as per the terms of the agreement. It is unfortunate that the agreement to sell was executed in the year 1959 and thirty-four years have gone by in the legal proceedings. The appellants are enjoying the fruits of the portion of the property M/67-A, Malviya Nagar without paying any charges on account of interim order passed from time to time by this Court.In view of our above discussion, the appeal is hereby dismissed withcosts. Interim order made earlier in this appeal are vacated. Counsel's feeRs. 1000/.