Madhu Mangotra vs Veena Paintal
1999 Latest Caselaw 56 Del

JUDGMENT

S.K. Mahajan, J.

1. The parties allegedly entered into an agreement on 2.10.1997 whereby the defendant agreed to sell to the plaintiff the property bearing No. C410 defense Colony, New Delhi for a total consideration of Rs. 48 lacs. A sum of Rs.11 lacs was paid by means of a cheque drawn on the Corporation Bank, Greater Kailash II, New Delhi as advance by the plaintiff for purchase of the aforesaid property. A receipt dated 2.10.1997 was issued by the defendant acknowledging the receipt of the aforesaid amount towards sale of the aforesaid property to the plaintiff. This receipt is alleged by the plaintiff to be the agreement to sell. On the alleged refusal of the defendant to sell the property to the plaintiff the present suit for specific performance of the said agreement to sell was filed by the plaintiff. Alongwith the suit the plaintiff filed an application being IA No.4809/98 for an injunction restraining the defendant from selling, transferring, alienating and/or parting with possession of the property to any other person. The case came up for hearing before the Court on May 26,1998 when counsel for the defendant appeared in the court and accepted notice of the suit as well as of the application and the court directed the defendant not to dispose of the suit property till the next date of hearing. Another application being I.A. No. 5281/98 was filed during summer vacations of 1998 by the plaintiff alleging that the tenant who was occupying the first floor of the property had vacated the same on 23rd June,1998 and that the defendant should be restrained from letting out the same to any other person. The Court on June 26,1998 without notice to the defendant restrained her from letting out and/or parting with possession of the property in suit or any part thereof until further orders. On being served with the order of the court and notice of the application the defendant filed an application being I.A. No. 9006/98 under Order 39 Rule 4 CPC for vacating the order of injunction dated 26.6.1998 due to the plaintiff having made false and misleading statements in relation to the material particulars in I.A. No. 5281/98. Inspite of opportunity having been given to the plaintiff, reply was not filed to I.A. No. 9006/98, however,I have heard arguments both on IAs 4809/98 and 5281/98 filed by the plaintiff as well as the application of the defendant under Order 39 Rule 4 C.P.C. and this order will accordingly dispose of all the aforesaid applications.

2. Though it is the contention of the defendant that the receipt dated 2.10.1997 is not an agreement which could be specifically enforced, however,for the purpose of deciding these applications, I am at this stage not going into the question as to whether the receipt dated 2.10.1997 is an agreement which could be specifically enforced. The short question involved between the parties for deciding these applications is whether on the execution of the agreement to sell any charge is created on the property in favour of the plaintiff and whether the plaintiff is entitled to an order of injunction restraining the defendant from using the property in any manner he likes till the matter is finally decided by the court.

3. Relying upon the judgment reported as J.K. Rajgarhia Vs. Dr. Ravi Singh & Others, 1995 (34) DRJ 1999 and Kulbir Singh Vs.Yashbir, it is contended by Mr. Aggarwal, learned counsel for the plaintiff that directions can be given to the defendant to maintain status quo in regard to possession of the property.

4. In J.K. Rajgarhia Vs. Dr. Ravi Singh & Others (supra) the facts were that the defendant in that suit for himself and on behalf of other coowners had executed a memorandum of understanding agreeing thereby to sell the property to the plaintiff, therein, for a consideration of Rs. 2,35,00,000/ and had received a sum of Rs. 5 lacs through a bank draft but was refusing to proceed ahead with the execution of the sale deed. On a suit being filed, the defendant alleged that Dr. Ravi Singh had no authority to act on behalf of other coowners and as such the memorandum of understanding did not bind them. Receipt of the amount was, however, not denied. The defendant after the entering into the memorandum of understanding with the plaintiff in that suit, entered into another memorandum of understanding and the agreement to sell with M/s. Hotz Industries (P) Limited. That company also filed a suit for specific performance against the defendant. The court while holding that the memorandum of understanding embodied within it all the material terms also held that "it appears that the defendants have already entered into another agreement of sale. It is of a subsequent date. Does not the plaintiff need protection from its consequences." What had weighed with the court while directing the parties to maintain status quo with regard to the suit property and its possession till further orders was the execution of the second agreement to sell and memorandum of understanding after the defendant had entered into a memorandum of understanding with the plaintiff in that case. In my view, the said judgment will be of no assistance to the plaintiff inasmuch as in the said case another agreement had been executed by the defendant whereby the filing of the suit was sought to be made infructuous.

5. In the present case, no time has been mentioned in the receipt as to within which the parties will complete the sale transaction and even assuming this to be an agreement to sell there are no restrictions therein on the right of the defendant to deal with the property in any manner she likes till the sale was effected. The first floor of the property was under the tenancy of a tenant and the plaintiff had entered into the agreement to sell knowing fully well that in case the agreement was fulfillled by the parties, she would be getting the first floor of the property with a tenant. I, therefore, fail to see as to how the plaintiff can restrain the defendant from letting out the said property. Moreover, mere agreement to sell, in my view, does not create any interest in or charge on the property. Till such time the sale deed is executed, the defendant, in my view, has a right to deal with the property. For the present I am not going into the question as to whether in view of Section 54 of Transfer of Property Act the defendant can also not be restrained from disposing of the property as the arguments were confined in this case only on the right of the defendant to let out the property. In Jiwan Dass Rawal Vs. Narain Dass & Others, AIR 1981 Delhi 291 it was held:

"10.....Section 54 of the Transfer of Property Act in specific terms provides that a contract for sale does not, of itself, create any interest in or charge on such property. Such contract is merely a document creating a right to obtain another document in the form of sale deed to be registered in accordance with law. In other words, a contract for sale is a right created in person am and not in estate. No privity in estate can be deduced there from which can bind the estate, as is the position in cases of mortgage, charge or lease. Of course, such personal right created against the vendor to obtain specific performance can ultimately bind any subsequent transferee who obtains transfer of the property with notice of the agreement of sale [See in this re spect , Ram Baran Prasad Vs. Ram Mohit Hazra].

11. Till, therefore, a decree for specific performance is ob tained, the vendor or a purchaser from him is entitled to full enjoyment of the property. In fact, even if a decree for specific performance of contract is obtained, and no sale deed is actually executed, it cannot be said that any interest in the property has passed...."

6. In Vinod Saluja & Another Vs. Smt. Sita Rani, the Court while declining to pass an order of injunction against the defendants from transferring, selling or alienating or creating third party rights in property had only directed that the defendant shall inform the intending purchasers/transferees in writing about the pendency of the suit.

7. In K. Basavarajappa Vs. Tax Recovery Commissioner, Bangalore & Others, again it was held that the agreement to sell create no interest in the property.

8. In view of the above, I am of the opinion that a contract of sale being a right created in personam and not in estate, no restrictions can be placed upon the defendant from letting out the first floor of the property which was already under tenancy of another tenant. Till therefore, a decree for specific performance is obtained, in my opinion, the defendant is entitled to full enjoyment of the property. Enjoyment of the property includes fruits of the property meaning thereby that the defendant will be entitled to let out the property to any person till the matter is decided by this Court. While, therefore, holding that the plaintiff is not entitled to any order of injunction restraining the defendant from letting out the first floor of the property to any other person till the matter is finally decided by the court, I at the same time feel that with a view to protect the interest of the plaintiff under the alleged agreement to sell it would not be improper to put certain restrictions upon the defendant in letting out the property to a third party. While, therefore, dismissing I.A. No. 5281/98 I direct that in case the defendant intends to let out the premises to a third party she will not let the same for a period of more than five years in the first instance. The defendant is, however, directed not to sell, dispose of or alienate the property to any person till the disposal of the suit.

With these observations both the applications stand disposed of.