Brokers And Brokers Pvt. Ltd. vs Mr. Om Prakash Bhola And Anr.
2007 Latest Caselaw 1717 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. This is an application under Order 7 Rule 11 of the Code of Civil Procedure, 1908 filed on behalf of the defendant No. 1 for rejection of the plaint on the ground that the suit, from the statements in the plaint itself, appears to be barred by provisions of Section 14(1) (c) of the Specific Relief Act, 1963 (hereinafter referred to as the said Act). The learned Counsel for the defendant No. 1 / applicant drew my attention to the averments made in the plaint which essentially indicate that the plaint relies upon the agreement dated 01.07.2004 by and between the parties. It is an agreement to sell and the relevant clause pointed out by the learned Counsel for the defendant No. 1 reads as under:

That in the most unlikely event the vendor and the confirming party are unable to make the title of the said property marketable by getting the encumbrances mentioned herein above cleared due to genuine and absolutely unavoidable reasons, to the satisfaction of the vendee, and the vendor and the vendee mutually decide and agree to cancel this agreement, the vendor shall refund to the vendee the advance money in full, i.e. Rs 9,00,000/- (Rs. Nine Lacs only) without deducting any amount towards any expenses incurred by the vendor in the process of incomplete transaction. The vendor shall also not be liable to pay to the vendee any interest on the said advance money.

The learned Counsel for the defendant No. 1 then referred to the provisions of Section 14 (1) (c) of the said Act which stipulates that a contract which is in its nature determinable, cannot be specifically enforced. He consequently submitted that since the above mentioned clause of the agreement provides for determination of the agreement to sell, it cannot be specifically enforced and, therefore, the suit is barred by virtue of the statements made in the plaint itself. The learned Counsel for the defendant No. 1 also placed reliance on the decision of the Supreme Court in the case of Dadarao and Anr. v. Ramrao and Ors. ( in support of his contention that an agreement, which was itself determinable could not be specifically enforced.

2. The learned Counsel for the plaintiff submitted that the suit is not barred as sought to be suggested by the learned Counsel for the defendant No. 1. He submitted that the clause on which the defendant No. 1 relies upon is not an absolute clause. First of all, it clearly indicates that where a marketable title is not made out by getting the encumbrances cleared then the sale deed may not be executed. But this is subject to several conditions. The first condition being that the inability to make the title marketable would have to be due to genuine and absolutely unavoidable reasons. Secondly, it must be to the satisfaction of the vendee, i.e., the plaintiff. Thirdly, the vendor and the vendee must mutually decide and agree to cancel the agreement. It is only when all the three conditions are satisfied that the agreement comes to an end and, in that eventuality, the vendor is required to refund to the vendee the advance money in full without deducting any amount towards any expenses incurred by the vendor in the process of the incomplete transaction. He submits that it is the plaintiff's case that none of these conditions have been satisfied and, therefore, without the suit proceeding to evidence, there is no question of the applicability of Section 14 (1) (c) of the said Act.

3. I have considered the arguments advanced by the learned Counsel for the parties. At the outset, I may state that I am in agreement with those made by the learned Counsel for the plaintiff. The Supreme Court decision cited by the learned Counsel for the defendant No. 1 is on an entirely different set of circumstances. In Dadarao (supra), the material part of the clause reads as under:

In case the sale deed is not made to you or if you refuse to accept, in addition of earnest money an amount of Rs 500/- shall be given or taken and no sale deed will be executed.

Construing this clause, the Supreme Court observed that the relationship between the parties has to be regulated by the terms of the agreement between them. It observed that what is important is that the agreement itself provided as to what is to happen if either the seller refuses to sell or the purchaser refuses to buy. The agreement was very categorical in envisaging that a sale deed was to be executed only if both the parties agreed to do so and in the event of anyone of them resiling from the same, there was no question of the other party being compelled to go ahead with the execution of the sale deed. And, in the event of sale deed not being executed, Rs 500/-, in addition to the return of Rs 1,000/-, was the only sum payable. In the present case the situation is entirely different. Here, the agreement by virtue of the said clause could only be cancelled mutually by the parties. In the case before the Supreme Court even if one party resoled from the agreement, the agreement could be cancelled. In the present case, for the agreement to come to an end, there was a requirement of both the parties mutually deciding and agreeing to cancel the same. That event has not happened and therefore, the decision of the Supreme Court in the case of Dadarao (supra) would be of no help to the defendant No. 1.

4. It must also be noted that provisions of Section 14 (1) (c) are not, prima facie, attracted inasmuch as the pre-conditions for the cancellation of the agreement are not satisfied in view of the averments made in the plaint. It may eventually be that the defendant No. 1 is able to make out a case, after both the parties have led evidence, that the plaintiff is not entitled to a decree for specific performance of the said agreement. But, at this stage, it cannot be said that the plaint is liable to be rejected because it cannot be held that the suit is barred by law on the basis of averments made in the plaint itself.

In view of the foregoing discussion, this application is dismissed.