Lalit Kumar Sabharwal vs Ved Prakash Vijh
2002 Latest Caselaw 1578 Del

JUDGMENT

R.C. Chopra, J.

1. This is a suit for specific performance of an agreement to sell dated 8.11.1994 in respect of House No. 8/15-A, West Patel Nagar, New Delhi measuring 100 sq. yards.

2. The case of the plaintiff, briefly stated, is that the defendant is the co-owner of a House constructed on Plot No. 8/15-A, West Patel Nagar, New Delhi-8. The defendant approached the plaintiff for sale of his share in the said house measuring about 100 sq. yards and showed him the copies of the documents in support of his title. The plaintiff agreed to purchase the said house for a sum of Rs. 27 lacs and accordingly, an agreement dated 8.11.1994 was entered into between the parties. The plaintiff paid a sum of Rs. 1 lac to the defendant. Rs. 50,000/- were paid in cash and Rs. 50,000/- were paid by a crossed cheque. The agreement was signed by the parties and attested by two witnesses. It was also agreed that a formal agreement on a non-judicial stamp paper of Rs. 2/- would be executed on 9.11.1994 recording the terms and conditions which were orally agreed upon by the parties. The plaintiff purchased a stamp paper of Rs. 2/- for the said purpose and got the agreement typed out. However, when he approached the defendant for signing the same, the defendant did not sign it on one pretext or the other and thereafter avoided the specific performance of the agreement to sell. The plaintiff sent him a legal notice dated 10.2.1995. The defendant sent a reply dated 22.2.1995 along with a draft of Rs. 1 lac claiming it to be loan amount allegedly taken by the defendant from the plaintiff. The plaintiff alleged that he was always ready and willing to perform his part of the agreement for the execution of the sale deed and hence the suit for the decree of a specific performance.

3. The defendant filed a written statement disputing that there was any agreement to sell between the parties in respect of the property in question. According to him, the marriage of his daughter was fixed on 11.2.1995 and that of his son on 14.10.1995 and as such, he was in need of money. He approached a property broker Nirmal Singh who introduced him to the plaintiff. The plaintiff assured to arrange a loan of Rs. 6 lacs within two months and advanced him loan of Rs. 1 lac on interest of 20% per annum. The property in question was to remain a security against the loan but since the plaintiff failed to pay the balance loan and the answering defendant had to make alternative arrangements from other sources, the loan of Rs. 1 lac received from the plaintiff was returned vide a pay order dated 22.2.1995. The defendant emphatically denied that any agreement to sell was entered into between the parties and averred that the plaintiff was harassing and blackmailing him. It was alleged that the plaintiff was a builder and was eyeing his property. It was also stated that the document dated 8.11.1994 was merely a receipt and not an agreement to sell. The plaintiff filed replication to the written statement of the defendant controverting the pleas raised by the defendant.

4. On the pleadings of the parties, following issues were framed:

1. Whether there is valid and legal contract for sale of the suit property? OPP

2. Whether plaintiff had advanced a loan of Rs. 1,00,000/- out of agreed sum of Rs. 6,00,000/- for the marriage of the children of the defendant @ 20% against the security of suit property? OPD

3. Whether defendant returned a sum of Rs. 1,00,000/- on 22.2.1995 received by the plaintiff on 6.3.1995 and if so, what is the effect? OPD

4. Relief.

5. The parties filed only affidavits in support of their pleas. The plaintiff filed his own affidavit and the defendant his own. I have heard learned counsel for the parties and gone through the records. My findings on the issues are as under:

6. Both these issues are being taken up together as these are inter-linked and based on common pleas and evidence. The decision of one is to affect the disposal of the other. According to the plaintiff, the document Exhibit P-1 dated 8.11.1994 is an agreement to sell by which the defendant had agreed to sell his property whereas according to the defendant, this document was merely a receipt executed by him in connection with a loan of Rs. 1 lac advanced to him by the plaintiff.

7. Before coming to the scrutiny and interpretation of Exhibit P-1 to find out as to whether it is an "Agreement to Sell" or a "receipt" only, this Court must keep in mind the principles incorporated in Section 10 of the Contract Act and the judgment of the Apex Court in CIT Punjab Haryana v. Panipat Woollen and General Mills reported in AIR 197 Supreme Court p-640 which lays down in no uncertain terms that in order to construe an agreement the Court has to look to the substance or the essence of it rather than to its form. It was held that no party can escape the consequences of law merely by describing an agreement in a particular form though in essence and substance it may be different transaction. In Mayawanti v. Kaushalya Devi the Apex Court while examining the controversies between the parties, in regard to the validity and enforceability of a contract in regard to an agreement to sell, held that the jurisdiction of the Courts to order specific performance of a contract is based on the existence of a valid and enforceable contract and the Court will not make a contract for them where the contract suffers from some defect and renders the contract invalid or un-enforceable. It was held that the stipulations and the terms of the contract should be certain and the parties must be consensus ad idem. The acceptance must be absolute and correspond with the terms of the offer. It was held that burden of showing the existence of a valid contract is on the plaintiff who has to establish a valid and binding contract between the parties. A learned Single Judge of this Court in Nanak Builders and Investors Private Limited v. Vinod Kumar and Ors. reported in AIR 1991 Delhi p-315 had categorically held that the mere heading or title of a documents cannot deprive the document of its real nature. It was held that the substance has to be seen and not the form. Therefore, the use of a word "receipt" on a document receiving earnest money towards the sale of plot of land containing all essential and basis ingredients required for an agreement to sell which was signed by both the vendor and the vendee, was held to be an agreement of sale.In another judgment of this Court in High Way Farms v. Chintaram and Ors., a learned Single Judge while examining two documents titled as receipts came to the conclusion that where the parties had merely agreed to enter into an agreement and a contract was yet to come into being the receipt could not be held to constitute an agreement to sell.

8. Applying the aforesaid principles of law to the facts of the present case, this Court is to examine as to whether the document Exhibit P-1 is an "agreement to sell" as contended by the plaintiff or is merely a "receipt" which was to be followed by an agreement to sell but never came into existence. A perusal of Exhibit P-1, which is in the handwriting of the defendant himself, shows that this document is merely a receipt for the reason that it was not signed by both the parties which is an essential attribute of an agreement between the parties. It is true that the defendant who had signed Exhibit P-1 had acknowledged part payment against the total value of the property in suit but certain essential stipulations relevant to an agreement to sell immovable property were conspicuously missing. No time frame was fixed for the execution of the sale deed not there was any stipulation as to who was to apply for permissions from the concerned authorities in regard to the sale of the property. There was no recital in regard to the consequences of default either by the so called seller or the purchaser and most important of all, there was no description of the property proposed to be sold under this document. The mere municipal number of the property was not enough for the reason that the defendant was only a co-owner of the 50% share in the suit property. It was not clarified as to what was the portion in his possession and what was the portion he proposed to sell to the plaintiff. Another important aspect is that this document was not all signed by the plaintiff and as such, in case of default on his part, there was no stipulation in favor of the defendant to put some penalty upon plaintiff by way of forfeiture of the amount or claim of damages from him. It assumes further importance for the reason that no time limit was prescribed for the payment of the balance amount by the plaintiff to the defendant. The least that can be said is that agreements to sell regarding immovable properties are not drafted this way.

9. This Court, therefore, is not inclined to hold that Exhibit P-1 is an agreement to sell between the parties. It has to be termed as a "receipt" only executed by defendant on receipt of Rs. 1 lac from the plaintiff. This Court may not be impressed with the explanation tendered by the defendant is regard to the receipt of Rs. 1 lac from the plaintiff, but the fact remains that the burden of establishing a valid and legally enforceable "agreement to sell" was upon the plaintiff which he has failed to discharge and as such, whatever might have been the transaction between the parties, this Court is unable to hold that the document Exhibit P-1 is an "agreement to sell" the suit property to the plaintiff. The conclusion that Exhibit P-1 is not an agreement to sell stands fortified byu the pleadings and affidavit of the plaintiff which show that a stamp paper of Rs. 2/- was purchased by the plaintiff next day and an agreement to sell was drafted thereon. The said agreement to sell was never signed by the parties and as such, it never came into existence. The move to purchase a stamp paper and draft an agreement to sell thereon containing various terms and conditions clearly suggests that Exhibit P-1 was not an agreement to sell and the agreement to sell which was drafted next day was never signed by the parties. Had Exhibit P1 been an agreement to sell, there was no need to purchase a stamp paper of Rs. 2/- and get another agreement to sell drafted next day.

10. In view of the evidence on record and the facts and circumstances of the case, this Court therefore, has not hesitation in holding that Exhibit P-1 does not fulfil the essential conditions of an agreement to sell. It is merely a "receipt" evidencing receipt of Rs. 1 lac by the defendant from the plaintiff. The issues, therefore, stand disposed of by holding that there was no valid an legal agreement for the sale of the suit property between the parties and the Exhibit P-1 merely shows that the plaintiff had paid a sum of Rs. 1 lac to the defendant on 8th November, 1994.

11. In view of the decision of issues No. 1 & 2, there remains no doubt that the plaintiff is entitled to the refund of Rs. 1 lac from the defendant. The pay order issued by the defendant was not encashed by the plaintiff and was deposited in the Court on which a Fixed Deposit was ordered to be obtained vide orders dated 3.11.1999. It is held that the plaintiff is entitled to the amount of this FD. Issue stands disposed of.

RELIEF

12. In view of the decision of the issues, the suit filed by the plaintiff stands dismissed.

Decree sheet be prepared.