Sh. K.L. Sethi vs Sh. S. Kishan Singh
2009 Latest Caselaw 1790 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+      IA No. 5824/2009 in CS(OS) No. 1185/2008

%                                         Date of decision: 01.05.2009

 SH. K.L. SETHI                                   .......        Plaintiff
                               Through: Mr. M.G. Vacher, Advocate

                                         Versus

SH. S. KISHAN SINGH                               .......     Defendant
                               Through: None.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.     Whether reporters of Local papers may
       be allowed to see the judgment?       yes

2.     To be referred to the reporter or not?               yes

3.     Whether the judgment should be reported
       in the Digest?                                       yes


RAJIV SAHAI ENDLAW, J. (ORAL)

1. The plaintiff seeks modification of the order dated 6th April,

2009 to the extent directing the plaintiff to furnish undertaking to

this Court to, in the event of failing in his case for specific

performance, pay to the defendant the difference of the admitted

agreed price of Rs. 1,82,50,000/- and Rs. 2.50 crores which was

disclosed by the counsel for the plaintiff himself on 6th April, 2009 to

be the present market value of the property.

2. The said order was made because in this case, the plaintiff, out

of agreed sale consideration of Rs. 1,82,50,000/- has paid only Rs. 10

lacs to the defendant. The written agreement to sell dated 4th July,

2007 provides that the balance Rs. 1,72,50,000/- shall be paid by the

plaintiff to the defendant within 90 days of 4th July, 2007; that the

defendant shall execute sale deed/document in favour of the plaintiff

at the time of receiving full consideration and also deliver vacant,

peaceful, physical possession of property and title documents of

property. It is also a term of the agreement that if the defendant

does not pay the balance consideration, then earnest money of Rs. 10

lacs shall be forfeited and agreement stand cancelled. Admittedly the

balance sale consideration was not paid within 90 days; according to

the plaintiff because the defendant did not get freehold conversion

and according to the defendant because the plaintiff had no money.

There is no term in the agreement to sell requiring the defendant to

get free hold conversion before receiving balance consideration.

Execution of sale deed or other document at the time of receiving

balance consideration was envisaged. Prima facie it appears that had

freehold conversion had taken place within 90 days, sale deed would

have been executed and if not, other documents which could be

executed even without such conversion.

3. Prima facie finding this weakness in the case of the plaintiff,

while confirming the interim order restraining the defendant from

dealing with the property, condition was imposed on the plaintiff to

file undertaking to the Court in the form of affidavit, to, in the event

of failing in his suit, make good to the defendant, the loss caused to

the defendant by injunction restraining the defendant from dealing

with his property.

4. It has been held by this Court in Delhi Automobile Ltd. vs.

Economy Sales 55 (1994) DLT 39 that the Court while granting

interim orders can impose conditions on party seeking the same.

5. In fact, even in absence of such injunction, owing to

applicability of Section 52 of Transfer of Property Act, the defendant

will not be able to freely deal with his property, owing to mere

pendency of this suit.

6. The disposal of such suits takes long. It is thus felt that in

cases where the plaintiff is prima facie not found entitled to the relief

of specific performance, but at the same time, owing to procedure

prescribed for disposal thereof, it cannot be dismissed summarily,

provision should be made for compensating the defendant for loss

caused by the plaintiff, by mere filing and pendency of such suit. The

measure of damages adopted in this case is the loss to the defendant

for being unable to sell at price prevailing today. The defendant in a

given case may be requiring to urgently sell his property for other

requirements of money for business or personal. The signing of an

agreement to sell becomes necessary as purchaser cannot be

expected to arrange for monies and spend money on stamp paper for

sale deed without certainty of seller being bound. However, it is

often found that property brokers and investors, posing as

purchaser enter into agreements, with no intention to pay the

balance sale consideration within the time stipulated and merely to

find an actual buyer and to take advantage of the general trend of

increase in prices. The sole motive of such persons is to, by entering

into agreement, prevent the seller from selling to others, freeze the

price and to profiteer from same. The hard reality is that the sellers,

even if the agreement provides that the same shall stand cancelled,

on non-payment are unable to sell to others even after default by

purchaser; for others do not want to purchase a property with

potential litigation.

7. The defendant cannot be compelled to institute separate

proceedings for recovery of losses suffered owing to an action of the

plaintiff which on trial is found to be false. The measure of damages

in the present case was on the basis of the difference in the

agreement price and the prevalent prices as per the plaintiff himself.

Without the undertaking specifying quantum of damages, it would be

vague and unenforceable. On the contrary, if damages are left to be

computed in a separate proceeding, experience shows that the

defendant, after contesting suit for specific performance for long,

rarely institutes proceedings for recovery of damages. It would be

too cumbersome to ask the defendant to do so. The result is that the

plaintiff, even if unsuccessful, goes scot free. Often, the sellers, if

unable to contest for long will be coerced into settling with such

plaintiff, to their prejudice and disadvantage.

8. Justice cannot be the casualty in the game of litigation. The

courts, even after finding the claim to be prima facie not made out

and to be vexatious and specious, cannot be silent spectators and

allow their process to be abused and ought to ensure that the loss

occasioned to other party is made good in the same proceedings.

Mere costs of litigation are not enough.

9. The Apex Court in S.P. Chengalvaraya Naidu vs. Jaganath

MANU/SC/0192/1994 has already noticed that property grabbers,

tax evaders, bank loan dodgers and other unscrupulous persons from

all walks of life find the court process a convenient lever to retain

the illegal gains indefinitely.

10. Imposition of such condition on a plaintiff in another suit for

specific performance, by this Court has already been upheld by the

Division Bench in order dated 27th January, 2009 in FAO (OS) No.

19/2009.

11. In the circumstances, no case is found for modification/recall

as prayed. The application is dismissed.

RAJIV SAHAI ENDLAW (JUDGE) May 1, 2009/rb