Ravinder Kumar Sinha vs Smt. Manjula Bhushan
2009 Latest Caselaw 4538 Del

*          IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                  Date of Reserve: October 23, 2009
                                                   Date of Order: November 09, 2009

+CS(OS) 549 of 2008 and IA 3658 of 2008
%                                                                           09.11.2009
     Ravinder Kishore Sinha                                         ...Plaintiff
     Through: Mr. A.K. Singh, Advocate

       Versus

       Smt. Manjula Bhushan                                         ...Defendant
       Through: Ms. Rachna Agarwal, Advocates


       JUSTICE SHIV NARAYAN DHINGRA

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

2.     To be referred to the reporter or not?

3.     Whether judgment should be reported in Digest?


       ORDER

1. By this Order, I shall dispose of the issue of maintainability of this suit as raised

by defendant.

2. Brief facts relevant for the purpose of deciding this are that the plaintiff entered

into an agreement with the defendant on 31st March, 2005 for sale of property bearing

number E-1, East of Kailash ad measuring 500 sq. yards with all the construction thereon

including basement, ground floor, first floor, second floor and the third floor (including

terrace) as well as servant quarters. The parties agreed for total sale consideration of the

entire property at Rs.6.15 crore. The property was lying mortgaged with Standard

Chartered Bank as defendant had taken loan from the aforesaid bank on mortgaging the

property and the loan amount showed balance payable by defendant of Rs.88.78 lac. The

CS(OS) 549 of 2008 Page 1 Of 12 defendant had other needs and had agreed to sell the property. The relevant clauses

contained in the agreement and having bearing on this issue read as under:

"xxxx

(iii) The total consideration for the sale of the entire aforesaid property with all the rights belonging and appurtenant thereto shale be Rs.6.15 crore (Rupees six crores fifteen lakhs) out of which an amount of Rs.11 lakhs (Rupees eleven lakhas) has been paid as an earnest money vide cheque no.355128 dated 25.03.2005 drawn on HDFC Bank Limited, Opp. Deer Park, Safdarjung Enclave, New Delhi, (the receipt of which the VENDOR hereby acknowledges) and, the balance shall be paid in the manner provided hereinbelow:

a. Rs.1 crore (Rupees one crore) within 30(thirty) days from date of the execution of the Agreement of sale, which amount will be utilized by the VENDOR towards liquidating the dues of the Standard Chartered Bank, Connaught Place Branch, New Delhi and obtain all documents of title submitted with the Standard Chartered Bank or otherwise.

b. Rs.3.08 crores (Rupees three crores and eight lakhs) within a period of 60 days (sixty) days from the date of liquidation of the loan dues of Standard Chartered Bank by the VENDOR and release of the document of titles.

c. Rs.1.96 crores (Rupees one crore and ninety six lakhs) within a period of three years from the date of execution of this agreement of sale.

iv) That the VENDEE shall bear the expenses for the purchasing of registration stamp paper and registration fee regarding registration of sale deed/ deeds which shall be in

CS(OS) 549 of 2008 Page 2 Of 12 phases as hereunder:

a. The VENDOR shall get the sale deed in respect of basement, ground floor and first floor duly executed and registered in favour of the VENDEE and/or his nominee(s) at the time of the payment of the installment of Rs.3.08 crores as aforesaid such that there is a total payment of Rs.4.15 crores (i.e. Rs.1 crore of first installment, Rs.3.08 crores of second installment and adjustment of Rs.7 lakhas out of the advance, part payment of Rs.11 lakhs made at the time of execution of the agreement of sale) at the time of execution and registration of the sale deed in respect of the basement, ground floor and first floor which is just and proper.

b. The VENDOR shall get the sale deed in respect of the second and third floor duly executed and registered in favour of the VENDEE and/or his nominee(s) within three years of the date of execution of this agreement of sale at the time when balance consideration money of Rs.1.96 crores is paid and the amount of Rs.4 lakhs out of the advance part of total sale consideration is adjusted, such that there is a total payment of Rs.2 crores at the time of execution and registration of the sale deed in respect of the second and third floors which is just and proper.

v) The VENDOR shall handover self certified photocopies of all the original documents of title to the VENDEE at the time of registration of sale deed in respect of basement, ground floor and first floor of the aforesaid property. The VENDOR shall handover peaceful possession of the basement, ground floor and first floor of the aforesaid property to the VENDEE and or his nominee(s) at the time of payment of Rs.1 crore as stated hereinabove in

CS(OS) 549 of 2008 Page 3 Of 12 paragraph (iii) a.

vi) That the VENDOR shall be entitled to retain possession of the second floor and third floor (including terrace) for a maximum period of three years from the date of execution of this agreement of sale. The VENDOR may get the sale deed/ deeds in respect of the second and third floor (including terrace) executed and registered in favour of the VENDEE/ his nominee(s) either collectively for a sale consideration of Rs.2 crore for both second and third floor as aforesaid, or individually and separately for any fot he balance floors, i.e. second and third floor on payment of pro rata sale consideration of Rs.1 crore for each floor including the proportionate adjustment of the advance part of the total sale consideration paid at the time of the execution of this agreement of sale. Possession of the second and third floor of the aforesaid property would be delivered by the VENDOR to the VENDEE at the time of registration of the sale deed/ or the respective sale deeds as the case may be.

vii) That the VENDOR shall be entitled to receive interest on the balance sale consideration of Rs.1.96 crore which remains to be paid after execution and registration of the first sale deed and such interest shall be paid by the VENDEE at the rate of 6% per annum for the period commencing the date of the execution of the agreement of sale till the dates of registration of the sale deed/ deeds in respect of the second and third floor only. Such interest shall be paid at the interval of every six months from the date of execution of the agreement of sale.

CS(OS) 549 of 2008 Page 4 Of 12

3. After this agreement was entered into, a sale deed was executed between the

parties in respect of basement, ground floor and first floor on 11th May, 2005 along with

one servant quarter with undivided, indivisible, proportionate shares in the land rights of

the plot against a sale consideration of Rs.4.15 crore in terms of the agreement. However,

copy of the sale deed shows that the entire amount of Rs.11 lac given in advance was

adjusted towards the sale consideration of basement, ground floor and first floor. It also

shows that the amount of Rs.1 crore which was to be paid by plaintiff to defendant in

terms of the agreement was in fact not paid and only a cheque of Rs.92 lac was handed

over on 11th May, 2005. The balance consideration of Rs.3.12 crore was paid vide pay

order of State Bank of Patiala. After execution of the sale deed, plaintiff took over the

possession of the property sold to him and started residing in it and the defendants

continued to live in second floor and third floor as owner. Vide letter dated 28 th March,

2007 plaintiff told defendant that the balance sale consideration of Rs.1.96 crore was

ready with him and asked defendant to execute the sale deed in respect of second and

third floor(terrace) and remaining servant quarter in favour of the plaintiff. The defendant

replied to this letter and stating that the letter dated 28th March 2007 was a pre-dated letter

as it was dispatched to her on 26th April, 2007. Defendant brought it to the notice of

plaintiff that the amount of Rs.4 lac which was to serve as earnest money for second and

third floor was adjusted by plaintiff at the time of getting sale deed executed in respect of

basement, ground floor and first floor. It was also told by defendant that the entire amount

paid by plaintiff was adjusted against the sale consideration of basement, ground floor

and the first floor and thus the balance consideration for second and third floor even at the

time of execution of the earlier sale deed was Rs.2 crore. Defendant also took the stand

that the plaintiff not only got the earnest money for second and third floor adjusted but

had also failed to pay the interest @ 6% per annum at six monthly rests as provided in the

CS(OS) 549 of 2008 Page 5 Of 12 agreement and this only showed that the sale deed executed on 11th May, 2005 brought

the agreement to sale to an end and the plaintiff himself rescinded rest of the agreement to

sell by adjusting the earnest money and by not acting on the clauses of payment of

interest at the interval of six months. Thus, the agreement to sell stood terminated with

the sale of ground floor, first floor and basement. It was also informed that the cheque of

Rs.92 lac drawn by plaintiff on HDFC Bank towards consideration was also taken back

by him and instead a sum of Rs.90,40,000/- was paid to Standard Chartered Bank by the

defendant and the balance amount of Rs.1.60 lac was not given to the defendant.

4. A reply was given to above response of the defendant wherein plaintiff reiterated

its right to get the sale deed in respect of second floor and third floor and terrace executed

in his favour. Regarding adjustment of entire amount of Rs.11 lac towards sale

consideration of basement, first floor and ground floor it was stated that it was done with

the consent of defendant and the plaintiff by this had not given up his right in sale of

second floor, third floor with terrace in his favour. Regarding non-payment of interest @

6% per annum it was stated that the interest was not paid on the suggestion of defendant

herself who had told plaintiff to pay interest at one go along with sale consideration. It

was also stated that defendant had not put plaintiff on notice to above interest amount

and, therefore, it would be deemed that non-payment of interest was compounded by the

conduct of the defendant. It was denied that a sum of Rs.1.6 lac, as alleged by the

defendant was payable by the plaintiff to the defendant against sale consideration of even

first transaction.

5. It is submitted by the counsel for the defendant that the agreement entered into

between the parties shows that the parties had bifurcated the agreement in two parts and

CS(OS) 549 of 2008 Page 6 Of 12 had fixed appropriate sale consideration in respect of the two parts of the property. The

sale consideration of Rs.4.15 crore was fixed for basement, ground floor and first floor

and sale consideration of second floor and partly built third floor (as per FAR) with

terrace rights was separately fixed in the agreement to sell and the agreement to sell

specifically recorded that the sale consideration being fixed for two parts was just and

proper and it also provided that the plaintiff may either get the second and third floor

transferred in his own name or in the name of his nominee. It is submitted by counsel for

defendant that plaintiff was short of money even at the time of execution of the sale deed

of the basement, ground floor and first floor and for this reason plaintiff abandoned the

agreement of purchasing whole of the property and could arrange money only for the

basement, ground floor and first floor. He submitted that in terms of the agreement only

rupees seven lac was to be adjusted against the purchase price of basement, first floor,

and second floor out of rupees eleven lac of earnest money, but since plaintiff had

abandoned the idea of purchasing rest of the property, the plaintiff asked defendant to

adjust the entire earnest money of Rs.11 lac towards the sale consideration of basement,

ground floor and first floor. He further argued that plaintiff failed to pay Rs.1 crore as

agreed under the agreement and could hardly arrange the amount required for discharging

the liability of the bank towards mortgage of the property. Even the cheque of Rs.92 lac

was taken back and only the due amount was paid directly to the bank. This shows the

money crunch with the plaintiff and his inability to arrange sufficient funds even at the

time of purchasing the basement, ground floor and first floor. He submitted that the

plaintiff after purchasing the property, returned the original agreement to defendant since

the agreement had come to an end and told the defendant of abandoning the rest of the

agreement with the result that defendant took back the original agreement. If the

agreement between plaintiff and defendant for sale of the rest of the property had

CS(OS) 549 of 2008 Page 7 Of 12 survived, the plaintiff would have abide by the terms of the agreement and would have

paid 6% interest to the defendant every six months and would have also re-deposited the

balance earnest money of Rs.4 lac immediately. The very fact that plaintiff did not

deposit the amount of rs.4 lac which was got adjusted towards the sale consideration of

part of the property and the fact that plaintiff did not pay interest on the balance sale

consideration as agreed between the parties and the fact that the original sale agreement

was returned to defendant all show that the plaintiff had abandoned the contract and it is

only later on when the prices of properties in the subsequent years increased

phenomenally that the plaintiff became greedy and issued letter to defendant reviving his

interest in the property. However, prices of the properties by that time had gone

considerably up. Had the agreement between the parties been surviving the defendant

would have asked plaintiff to pay consideration along with interest within a reasonable

time so that defendant could arrange some alternative accommodation for herself. It is

only because the agreement was abandoned that the defendant did not communicate to

plaintiff and when she received letter from plaintiff then only she replied to the plaintiff.

It is submitted that the contract between the parties had come to an end and this was

reflected from the undisputed and admitted conduct of parties.

6. Per contra, counsel for plaintiff argued that the period as stated in the agreement to

sell, for execution of the sale deed for entire property was three years. It was so agreed

only because the plaintiff was not in a position to arrange funds immediately and this fact

was very well known to defendant. Had plaintiff been in a position to arrange funds

immediately for the entire building, the parties would not have agreed for a period of

three years for execution of the sale deed in respect of the second and third floor. He

further submitted that the adjustment of Rs.4 lac towards the sale consideration of

CS(OS) 549 of 2008 Page 8 Of 12 basement, ground floor, first floor could not be said to be an adjustment of the earnest

money. The bifurcation of Rs.11 lac into Rs.7 lac and then Rs.4 lac was only for the sake

of convenience and Rs.4 lac could not be treated as earnest money. Regarding non-

payment of interest, it is submitted that plaintiff had been ready and willing to pay interest

but interest was not paid only because defendant expressed her desire to receive interest

together with the sale consideration.

7. Plaintiff relied on M.P. Housing Board v Progressive Writers & Publishers JT

2009 (4) SC 219 wherein the Supreme Court has observed that the time was not normally

an essence of any agreement qua immovable property and even if there was an express

covenant of the time being an essence, the overall agreement had to be looked into to see

whether the time was the essence or not. Mere expression of the stipulated time would not

make the time an essence of the contract. It is ruled that in case of contract relating to an

immovable property, the Court has to look on the essence of the contract and whether the

time was the essence of contract is a question of facts and law. The real test is intention of

parties and it depends upon the facts and circumstances of each case [Swarnam

Ramachandran and Anr. v Aravacode Chakungal Jayapalan 2004(8) SCC 68]. The

intention of the parties can be ascertained from the express terms used in the contract; the

nature of property; the nature of contract; surrounding circumstances; and conduct of the

parties.

8. It is an undisputed fact that in this case at the time of entering into the agreement

in respect of entire property, the parties had assessed the market value of the two portions

of the property, one part consisting of basement, ground floor and first floor and the

second part consisting of second floor and particularly built third floor with terrace. The

CS(OS) 549 of 2008 Page 9 Of 12 agreement itself provides that the amount of Rs.4.15 crore was a reasonable market value

of basement, ground and first floor and Rs.2 crore was proper value of second and third

floor. Even in case of second floor and third floor, the value was put at Rs.1 crore for

each floor since plaintiff had agreed, for convenience sake that in respect of these two

floors he could get the sale deed executed either in his or in favour of his nominee for this

value. Defendant who was the owner of the property had to remain in occupation of the

second floor and third floor all along since she had agreed to receive the consideration of

second and third floor within a period of three years. It is apparent that it was in the minds

of the parties that the prices of the property keep on increasing. To compensate this, the

parties had agreed that defendant will continue to receive 6% interest over the unpaid

consideration on interval of every six months. Rs.4 lac was to remain as earnest money

with her for second floor and third floor.

9. It is an undisputed fact that the plaintiff did not keep even that Rs.4 lac with the

defendant as a token of his surviving interest for second floor and third floor. If the

interest of the plaintiff had still been there after 11th October 2005 when he got the sale

deed executed in respect of one portion, he would have at least kept that token amount of

Rs.4 lac with defendant against the total sale consideration of Rs.2 crore. It cannot be

presumed that a person who could spend Rs.4.15 crore on purchasing basement, ground

floor and first floor would not spare Rs.4 lac to keep his interest surviving in rest of the

property. It only shows that looking at the market situation at that time, plaintiff thought

that the deal in respect of part of the property was good enough and he scrapped rest of

the agreement and did not keep even Rs.4 lac with defendant. The agreement provided

that the plaintiff had to pay every six months interest on balance consideration @ 6% per

annum, which to my mind was a very moderate interest and six monthly interest on Rs.2

CS(OS) 549 of 2008 Page 10 Of 12 crore amounted to Rs. six lac. If the plaintiff had not abandoned the agreement he would

have paid Rs.6 lac every six months to the defendant to show that his interest was

surviving. The first payment of interest of the agreement had become due on 1st October,

2005 and the second payment of Rs.6 lac had become due on 1st April, 2006, third

payment on 1st October 2006 and the 4th payment on 1st April, 2007. Plaintiff had not

offered any of these dues on account of interest to defendant. No cheque or draft was sent

and even in the letter written by plaintiff dated 28th March 2007, there is no talk of

interest payable by the plaintiff to the defendant after every six months. Plaintiff only

talked of Rs.1.96 crore being ready with him although even Rs.4 lac was not lying with

defendant and had already been adjusted. It is not mentioned in the letter that the

defendant at any point of time refused to receive the interest or had asked for the

adjustment of the interest. A subsequent reply given to the response of the defendant is

not reflective of the true intention of plaintiff. If it had been agreed by defendant as is

alleged in the subsequent reply of plaintiff that the accumulated interest was to be paid

along with the consideration, then plaintiff in its letter dated 28th March 2007 would have

made this offer to defendant. It only shows that the plaintiff, looking at the rise in real

estate price wanted to revive an abandoned contract and wanted to drag defendant in

unnecessary ligation thinking that under the coercion of litigation, defendant may come to

some compromise.

10. I consider that conduct of the parties at the time of execution of the sale deed of

adjusting the entire earnest money lying with defendant towards the sale consideration of

basement, ground floor and first floor and not leaving even Rs. four lac as earnest money

for rest of the property and thereafter non-payment of six monthly interest as agreed, not

writing any letter or communication by plaintiff to defendant and there being no

CS(OS) 549 of 2008 Page 11 Of 12 correspondence between the parties for two years shows that the contract between the

parties in respect of second floor and third floor was abandoned and no part of the

contract survived which could be specifically enforced.

11. In view of the foregoing discussion, I find that the present suit is not maintainable

and is hereby dismissed. All interim applications also stand dismissed.

November 09, 2009                                   SHIV NARAYAN DHINGRA J.
rd




CS(OS) 549 of 2008                                          Page 12 Of 12