Ashok Aggarwal vs Bhagwan Das Arora
2000 Latest Caselaw 1176 Del

JUDGMENT

K.S. Gupta, J.

1. Out of six issues framed on 27th January 2000 issues 1 & 5 which were treated as preliminary issues, are as under :--

"1. Whether the present suit is barred under Order II Rule 2 CPC by virtue of a previously instituted suit for injunction in the District courts having been dismissed? OPD

5. Whether the specific performance of the contract cannot be granted in view of the specific stipulation in the contract providing for forfeiture of the earnest money paid by the purchaser and seller's liability to pay double the earnest money in case of refusal to complete the bargain? OPD"

2. It is admitted case of parties that the plaintiff before instituting this suit had filed suit No. 673/89 which was dismissed in default under Order IX Rule 8 CPC on 28th September 1992. Application filed under Order 9 Rule 9 and Section 151 CPC by the plaintiff for setting aside that order was dismissed in default on 3rd April 1995. Application filed for restoration of the said application was also dismissed in default on 12th August, 1997.

3. Submission advanced by Sh. H.L. Narula for defendant was that the present suit and also suit No. 673/89 are based on the same cause of action and as plaintiff did not seek the relief of specific performance which is now being sought, in said suit No. 673/89, this suit is barred by Order II Rule 2 (3) CPC. On the other hand, contention advanced by Sh. Vinod Kumar Srivastava for plaintiff was that in both the suits causes of actions are different and, therefore, provision of said Rule 2 (3) of Order II has no applicability. Certified copy of plaint in said Suit No. 673/89 filed by the defendant is placed on pages 1 to 14 on Part III file. In that suit the relief claimed by the plaintiff was to restrain the defendant by issuing decree of prohibitory injunction from selling mortgaging/encumbering or otherwise parting with possession as also causing any additions/ alterations/modifications and/or damages to property No. CU/1, Pitampura, Delhi which was agreed to be sold under the sale agreement dated 30th June 1989 by the defendant/owner to plaintiff for a total consideration of Rs. 26,65,000/-. Decree of mandatory injunction was also sought to be passed against the defendant to apply and obtain permission/sanctions/clearances from the prescribed authorities for transfer of said property in favour of the plaintiff. Certified copy of the written statement filed by the defendant is placed on pages 14 to 25. By way of preliminary objection No. 1 in the written statement it had been pleaded that suit is barred under Section 41(h)(i) of the Specific Relief Act in as much as equally efficacious remedy of specific performance of the agreement dated 30th June 1989 was not sought by the plaintiff. On a bare reading of the plaints in both the suits it is manifest that the averments made in present suit are the reproduction of the allegations made in previous Suit No. 673/89. That being so, I am not inclined to agree with the said submission advanced on behalf of plaintiff that causes of actions in both the suits are distinct.

4. It is not in dispute that by the time Suit No. 673/89 came to be filed, four months time for execution of sale deed of property bearing No. CU/1, Pitampura by the defendant as provided in the agreement dated 30th June, 1989 had elapsed and it was thus open to the plaintiff to have filed suit for specific performance of the said agreement and in alternative for refund of amount of Rs. 2 lakhs paid by way of earnest money as also for damages against the defendant. However, in said Suit No. 673/89 neither relief for specific performance of said agreement was sought nor any application filed under Order II Rule 2 (3) seeking leave of the Court to sue for the relief of specific performance afterwards. In this background, present suit is clearly barred by said Order II Rule 2 (3) CPC as urged on behalf of defendant.

5. Photostat copy of agreement to sell/receipt filed by the plaintiff is at page 23 of the file. Heavily relying on the decision in Dadarao v. Ramrao (1999) 9 SLT 240 : (1999 AIR SCW 4818) further contention advanced on behalf of defendant was that in the said agreement itself it had been stipulated as to what would happen if the sale deed was not executed within the period of 4 months of its execution and the plaintiff could have only claimed double the amount of earnest money if the default in completing sale transaction was on the part of defendant. Last para of the agreement which is material for deciding the issue on hand, is reproduced below :--

"If the purchaser of the house fails to make the payment within the time agreed above his earnest money will be forfeited and if the seller of the house refuses to complete the bargain, he will have to pay double amount of the earnest money under all circumstances. This deal is done through Mr. Jai Bhagwan Garg who will claim and receive 1% commission from the purchaser and 1% commission from the seller of the house under all circumstances. If either party fails to finalise the deal Mr. Jai Bhagwan will be paid all the 2% commission from the defaulter party."

6. In the para preceding the above para, 4 months time is stipulated for completing the sale transaction including payment of amount of balance sale consideration. In Dadarao's case (1999 AIR SCW 4818) (supra) in the agreement dated 24th April 1969 executed between Balwantrao Ganpatrao Pande and Tukaram Devsarkar regarding sale of 3 acres of agricultural land the total amount of sale consideration agreed was Rs. 2,000/- out of which Rs. 1,000/- were paid to the seller at the time of its execution. In terms of the agreement, sale deed was to be executed by 15th April 1972 and in case the same was not executed by the seller or if the purchaser refused to get it executed, then in addition to said amount of Rs. 1,000/- towards earnest money an amount of Rupees 500/- was to be given or taken. Suit filed by Tukaram Devsarkar, purchaser for specific performance of said agreement was dismissed by the Trial Court. However, in appeal the lower appellate Court while setting aside the order of Trial Court passed a decree of Specific performance and required the defendants to execute sale deed on plaintiffs depositing Rs. 1,000/- being the balance amount of sale consideration. Appeal filed by the defendants against the order of lower appellate Court was dismissed in limine by the High Court. While allowing the appeal by the special leave against the order of High Court (on page 243) it was held :-- (Paras 7 & 8 at Page 4819 of SCW)

"If the agreement had not stipulated as to what is to happen in the event of the sale not going through, then perhaps the plaintiff could have asked the court for a decree of specific performance but here the parties to the agreement had agreed that even if the seller did not want to execute the sale deed he would only be required to refund the amount of Rs. 1,000/- plus pay Rs. 500/- in addition thereto. There was thus no obligation on Balwantrao to complete the sale transaction.

Interpreted in such a way as we have indicated hereinabove, it appears to us that the lower appellate court and the High Court erred in coming to the conclusion that the successors-in-interest of Tukaram Devsarkar were in any way entitled to a decree of specific performance requiring the sale of three acres of land pursuant to the agreement dated 24th April, 1969. The order of the High court and the lower Appellate Court, therefore, has to be set aside."

7. Taking note of the stipulation extracted above of the agreement dated 30th June 1989, said ratio in Dadarao's case (1999 AIR SCW 4818) (supra) applies on all fours to this case. Thus I am inclined to agree with the submission advanced on behalf of defendant that remedy available to the plaintiff was to claim double the amount of earnest money from the defendant instead of seeking relief of specific performance of the said agreement. Issue is answered in favour of the defendant and against the plaintiff.

8. In view of my findings on said issues, the suit is dismissed being not maintainable. No order as to costs.