Veena Arora vs Devinder Kumar Mahndru
2010 Latest Caselaw 2307 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI


+      CS(OS) No.649/2006 & IA No.4360/2006


                               Date of Decision: April 30, 2010


VEENA ARORA                                            .....Plaintiff
                         Through:    Mr.Chetan Sharma, Senior
                                     Advocate with Mr.Amit
                                     Bhardwaj, Advocate.

                              VERSUS

DEVINDER KUMAR MAHNDRU                 .....Defendant
             Through: Mr.S.P.Kalra, Senior Advocate
                       with Mr.O.P.Wadhwa,
                       Advocate.
%    CORAM:
     HON'BLE MS. JUSTICE ARUNA SURESH

(1)    Whether reporters of local paper may be allowed to
       see the judgment?
(2)    To be referred to the reporter or not?     Yes

(3)    Whether the judgment should be reported in the
       Digest?                                   Yes
                              JUDGMENT

ARUNA SURESH, J.

IA No.4360/2006 (under Order 39 Rules 1 & 2 CPC)

1. Plaintiff has filed this application seeking

temporary injunction against the defendant for

restraining him from forcibly dispossessing the plaintiff

from second floor roof with terrace rights of the suit

property and also restraining him, his servants, agents,

assignees, representatives, attorneys or any other

person acting on his behalf from creating any third party

interest in the second floor roof with terrace rights of the

suit property till pendency of the suit.

2. In brief, case of the plaintiff is that suit

premises i.e. M-31, Rajouri Garden, New Delhi was

initially owned by one Shri Ashok Narang and Smt.Geeta

Narang. The said two persons sold ground floor of the

said premises to one Shri Devinder Mahna, first floor to

Shri Gagandeep and second floor to Shri Devinder Kumar

Mahindru, the defendant for a consideration of

Rs.5,00,000/- each vide separate Sale Deeds dated 31st

March, 2005. Later on all aforesaid three persons sold

their respective shares in the suit premises to plaintiff‟s

husband Shri Raj Kumar Arora, plaintiff‟s son Gaurav

Arora and herself for Rs.6,00,000/- each, which was paid

by Raj Kumar Arora vide three cheques dated 15th May,

2005. On 18th May, 2005 defendant had received full

amount for selling his share in the suit premises

consisting of second floor/terrace in favour of the

plaintiff. Plaintiff and her family members received

complete physical possession of the suit premises. Shri

Devinder Mahna executed requisite Sale Deed in respect

of ground floor in favour of Raj Kumar Arora on 22nd July,

2005 which was got registered on 18th August, 2005.

However, Gagandeep and Devinder Kumar Mahndru

refused to execute the Sale Deed and demanded more

money from the plaintiff and her family on the plea that

prices of the property had increased. Since defendant

refused to execute Sale Deed in favour of the plaintiff in

respect of the suit property, plaintiff filed the present suit

seeking declaration as owner of the second floor of the

suit premises, mandatory injunction against defendant to

direct him to execute the Sale Deed in respect of the suit

premises and a decree for permanent injunction to

restrain him from creating any third party interest in the

suit property.

3. During pendency of the suit, plaintiff moved

an application under Order 6 Rule 17 of the Code of Civil

Procedure (hereinafter referred to as „CPC‟) and sought

amendment of the plaint with permission to claim a relief

of specific performance of the contract. The said

application was allowed by this Court on 6th August,

2007.

4. Controverting the claim of the plaintiff,

defendant has alleged in his written statement that in

May, 2005 he along with Gagandeep had agreed to sell

their respective portions of the suit property for a total

sum of Rs.69,00,000/-(Rs.35,00,000/- for the first floor

and Rs.34,00,000/- for the second floor). Raj Kumar

Arora had handed over three cheques for Rs.6,00,000/-

each to defendant and Gagandeep as earnest money and

further gave a cheque of Rs.57,00,000/- as security not

to be encashed as he wanted to apply for a bank loan. In

February 2006, Raj Kumar Arora gave him photocopies of

three bankers‟ cheque of Rs.7,00,000/- each dated 27th

February, 2006 issued by Indian Overseas Bank, New

Rajinder Nagar, New Delhi and requested defendant and

Gagandeep to execute the sale documents on assuring

that Rs.21,00,000/- each would be paid at the time of

registration of the Deed in two different installments, to

which the defendant and Gagandeep did not agree. It is

also the case of the defendant that a false criminal

complaint was also lodged by the plaintiff against him

and his relatives and Gagandeep and after getting a stay

order from this Court forced them to sell two portions of

the suit premises for Rs.62,00,000/- instead of

Rs.69,00,000/- as agreed before and thus an Agreement

to Sell dated 2nd May, 2006 was entered into duly signed

by both the parties as well as Advocate of the plaintiff‟s

husband. According to said Agreement, Rs.41,00,000/-

were to be paid at the time of execution of the sale

documents for first and second floor and the balance

amount of Rs.9,00,000/- in two interest free installments

by 2nd August 2006, which plaintiff‟s husband and son did

not comply with. Therefore, it is prayed that plaintiff is

not entitled to the reliefs claimed by her.

5. Mr.Chetan Sharma, learned senior counsel

appearing on behalf of the plaintiff has argued that

interim order was granted by this Court on 20th April,

2006. Since there is no change in circumstances on

facts and law, the said order is not required to be

vacated. Plaintiff has come to the court with clean hands

and no facts have been suppressed. He has further

argued that in case third party interest is created by the

defendant, irreparable loss and injury would be caused to

the plaintiff, which cannot be compensated in terms of

damages. It is further submitted that since plaintiff is in

possession of the suit premises, her possession has to be

protected till her rights are determined on merits. It is

pointed out by him that no counter-claim has been made

by the defendant and no suit has been filed under

Section 6 of the Specific Relief Act to claim back the

possession of the suit premises from the plaintiff and

therefore, the only efficacious legal remedy available to

plaintiff was to file the present suit for declaration,

mandatory and permanent injunction as well as for

specific performance of the contract.

6. Mr. S.P.Kalra, learned senior counsel

appearing on behalf of the defendant has submitted that

agreement is alleged to be of 2005 and the possession

was also delivered in 2005, whereas suit was filed in

2006. He has submitted that a criminal case was filed by

the plaintiff against the defendant and Gagandeep and in

the said criminal proceedings an Agreement dated 3rd

May, 2006 was executed. This Agreement is a

modification of the previous Agreement and by virtue of

it, previous Agreement stood revoked. In view of Section

62 of the Contract Act, plaintiff cannot enforce the

original oral contract for sale of the property. Therefore,

since plaintiff has failed to pay the consideration amount

against purchase of the said property, she is not entitled

to any relief as claimed by way of this application. He

has referred to para 6 of the replication to emphasize

that execution of Agreement dated 3rd May, 2006 is

admitted by the plaintiff and she is bound by the same.

Even after the amendment of the plaint, no further

payment has been made by the plaintiff nor she has

issued any cheque for Rs.57,00,000/-. Plaintiff has not

come to the court with clean hands and is not entitled to

any discretionary relief of injunction as prayed.

7. Learned counsel for the defendant has also

argued that alleged Agreement to Sell was oral and

therefore, plaintiff cannot sought protection of her

possession under Section 53A of the Transfer of Property

Act (hereinafter referred to as „TP Act‟). He further

submitted that sale of immovable property needs

compulsory registration under Section 17 of the

Registration Act. Since agreement was oral and no

written agreement was executed between the parties nor

registered, plaintiff is not entitled to any interim relief of

injunction as prayed. In support of his submissions, he

has referred to 'Mool Chand Bakhru & Anr. Vs. Rohan

& Ors., JT 2002 (1) SC 465, 'Sanjay Kaushish Vs.

D.C. Kaushish & Ors., AIR 1992 DELHI 118 and

'Rambhau Namdeo Gajre Vs. Narayan Bapuji

Dhotra (Dead) Through LRs., (2004) 8 SCC 614.

9. Following are the admitted facts:-

(i) Shri Ashok Narang and Smt. Geeta Narang were the

previous owners of the suit property from whom

defendant purchased second floor and Gagandeep

purchased first floor. Whereas ground floor was

purchased by Devinder Mahna for consideration of

Rs.5,00,000/- each.

(ii) The area of land underneath the suit property

measures 200 square yards.

(iii) Devinder Mahna sold ground floor of the property in

favour of Raj Kumar Arora, husband of the plaintiff,

Gagandeep sold the first floor of the suit property in

favour of Gaurav Arora whereas defendant sold the

second floor with terrace rights to the plaintiff.

(iv) Devinder Mahna executed a registered Sale Deed

dated 22nd July, 2005 in respect of the ground floor of the

property in favour of Raj Kumar Arora and got it

registered on 11th August, 2005.

(v) Cheques for Rs.6,00,000/- each (three cheques),

being value of each floor, were issued in faovur of

defendant, Gagandeep and Devinder Mahna by Raj

Kumar Arora.

(vi) Possession of the suit property was handed over to

the plaintiff, her husband and her son respectively.

Plaintiff along with her family members is residing in the

entire suit property since the date of purchase of the

property.

10. Plaintiff claims that Rs.6,00,000/- for the

second floor were paid in full and final settlement of the

consideration amount whereas according to defendant, it

was payment of earnest money only and total

consideration amount which was required to be paid for

the second floor was Rs.34,00,000/-.

11. Order 39 CPC regulates grant of temporary

injunction and interlocutory orders, which a court can

grant during the pendency of a suit. Order 39 Rule 1 CPC

speaks of cases in which temporary injunction can be

granted by the Court. Pre-requisites for grant of

injunction which the plaintiff is required to satisfy the

Court are when:-

(a) any property in dispute in a suit is in danger of being

wasted, damaged or alienated by any party to the suit, or

wrongfully sold in execution of a decree, or

(b) there is a threat from the defendant, or he intends, to

remove or dispose of his property with a view to

defrauding his creditors,

(c) there is threat from the defendant to the plaintiff of

his dispossession or otherwise to cause injury to him in

relation to any property in dispute in the suit.

12. In any of the abovesaid circumstances, Court

can grant a temporary injunction to restrain such act, or

make such other orders for the purpose of staying and

preventing the wasting, damaging, alienation, sale,

removal or disposition of the property or dispossession of

the plaintiff, or otherwise causing injury to the plaintiff in

relation to any property in dispute in the suit as the Court

thinks fit, until the disposal of the suit or until further

orders.

13. Order 39 Rule 2 CPC speaks of injunction to

restrain repetition or continuance of breach. As per this

clause, Court has the power to grant injunction on such

terms as to the duration of injunction, keeping an

account, giving security, or otherwise in a suit for

restraining the defendant from committing a breach of

contract or other injury of any kind, whether

compensation is claimed in the suit or not, on an

application moved by the plaintiff seeking temporary

injunction to restrain the defendant from committing

breach of contract or injury complained of, or any breach

of the contract or injury of a like kind arising out of the

same contract or relating to the same property or right.

14. Section 38 of the Specific Relief Act

(hereinafter referred to as „the Act‟) speaks of perpetual

injunction when can be granted and Section 39 of the Act

speaks of mandatory injunction when can be granted.

15. Section 41 of the Act restricts the power of the

Court to grant injunctions under Sections 38 and 39 of

the Act. Relevant part of Section 41 of the Act, material

to the present case, reads as follows:-

"Section 41. Injunction when refused. -An injunction cannot be granted-

(a) to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;

xxx xxx xxx xxx

(e) to prevent the breach of a contract the performance of which would not be specifically enforced;

--- --- --- ---

(g) to prevent a continuing breach in which the plaintiff has acquiesced;

(h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;

(i) when the conduct of the plaintiff or his agents has been such as to disentitle him to the assistance of the court;

--- --- --- ---"

16. Thus, it is clear that a party would be entitled

to relief of temporary injunction under Order 39 Rules 1

and 2 CPC, provided it satisfies the Court that it has a

prima facie case; that balance of convenience is in its

favour and that irreparable loss and injury would be

caused to it if interim relief is not granted. These three

phrases are not rhetoric phrases but elastic words to

meet a wide range of situation in given set of facts and

circumstances. The burden is always on the plaintiff to

satisfy the Court that a prima facie case exists in his

favour that non-interference by the Court would result in

irreparable injury to him which cannot be compensated

by way of damages and that balance of convenience,

under the circumstances of a case, tilted in his favour.

Court has to exercise sound judicial discretion to find out

the amount of substantial mischief or injury which is

likely to be caused to one party if injunction is refused

and compare it with mischief or injury that is likely to be

caused to the other party if the injunction is granted.

17. In 'S.C.Shukla & Ors. Vs. Delhi

Development Authority & Anr., 1998 973) DLT 131,

this Court has observed:-

"5. --------As per settled law, culled out from various decisions, relief under Order XXXIX Rule 1 and 2 can be given to an applicant provided the applicant is in a position to satisfy the Court that the applicant has a 'prima facie case'; that the 'balance of convenience' is in his favor and that 'irreparable loss/injury' would be caused to him if the relief is not granted to him. The phrases 'prima facie case'; balance of convenience' and 'irreparable loss' are not rhetoric phrases for incantation, but words of width and elasticity to meet myriad situations, presented by men's ingenuity in given facts and circumstances, hedged with sound exercise of judicial discretion to meet the end of justice. The burden is always on the applicant/plaintiff to satisfy the Court that there is a 'prima facie case' in his favor which needs adjudication at the trial. The existence of prima facie right and infraction of the enjoyment of his property or the right, is a condition for the grant of temporary injunction. However, satisfaction that there is a 'prima facie case' by itself is not a sufficient ground to grant injunction. The Court further has to satisfy itself that non- interference by the Court would result in irreparable injury to the party seeking relief and that there is no other remedy available to the party except the one to grant injunction and

that the applicant needs protection from the consequences of apprehend injury. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury but means only that the injury must be a material one, namely, one that cannot be adequately compensated by way of damages. While granting relief under the above provisions the Court has also to see that the 'balance of convenience' must be in favor of granting injunction. In other words, the Court, while granting or refusing to grant injunction, is expected to exercise sound judicial discretion to find out the amount of substantial mischief or injury which is likely to be caused to the parties if the injunction is refused and compare it with that it is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit the subject matter should be maintained in status quo, an injunction under the above provisions would be granted by the Court. Their lordships of the Supreme Court in case Dalpat Kumar Vs . Prahlad Singh reported as AIR1993SC276 have held that before granting injunction the Court would be circumspect and look to the conduct of the party, the probably injuries to either party and whether the plaintiff could be adequately compensated if the injunction is refused."

18. Similarly in 'Pepsi Co. Inc. & Anr. Vs.

Hindustan Coca Cola & Ors.' 2001 (94) DLT 30, it

has been observed by this Court:-

"13. A party would be entitled to relief under Order 39 Rules 1 and 2 provided it satisfies the Court that it has a prima facie case; that balance of convenience is in his favor and that irreparable loss and injury would be caused to him if interim relief is not granted. The aforesaid three phrases are not rhetoric phrases but elastic words to meet a wide range of situation in given set of facts and circumstances. The burden is always on the plaintiff/applicant to satisfy the Court that a prima facie case exists in his favor. The Court must further satisfy itself that non-interference by the Court would result in irreparable injury to a party seeking relief. Irreparable injury means that the injury must be a material one, one that the Court cannot adequately compensate by way of damages. The Court is expected to exercise sound judicial discretion to find out the amount of substantial mischief or injury which is likely to be caused to one party if injunction is refused and compare it with mischief or injury that is likely to be caused to the other party if the injunction is granted."

19. Keeping in mind the above said principles of

law and coming back to the facts of case in hand,

admittedly, plaintiff is in possession of the suit property

by virtue of Agreement to Sell between her and the

defendant. True that, no written contract was executed

between the parties. Plaintiff purchased the requisite

stamp papers for executing the Sale Deed from the

defendant. However, defendant did not execute the Sale

Deed as was required nor got it registered. Only dispute

raised by the defendant is that amount of Rs.6,00,000/-

was paid as earnest money whereas he was to be paid

balance amount of Rs.28,00,000/- at the time of

execution of the Sale Deed, which plaintiff or her

husband failed to do.

20. Even if plea of the defendant is prima facie

accepted as correct, admittedly, plaintiff was put in

possession of the suit property in part-performance of

the contract. It is pertinent that previous owners of the

property sold their respective portions to three members

of plaintiff‟s family. One of the sellers; Devinder Mahna

executed the requisite Sale Deed in respect of ground

floor in favour of Mr.Raj Kumar Arora, husband of the

plaintiff. It seems that defendant and Gagandeep

became dishonest and refused to execute the Sale Deeds

for first and second floors of the suit property. Another

suit, being CS(OS) No.651/2006, has been filed by

Gaurav Arora against Gagandeep, claiming the same

relief in respect of the first floor of the property, which

has been claimed in the present suit. Plaintiff has placed

on record various documents like water, electricity bills,

telephone bills, gas connection bills and letters received

from Bank to show that she is in possession of the

property since after its purchase.

21. As pointed out above, possession of the

plaintiff is not in dispute. Therefore, plaintiff has a prima

facie case in her favour.

22. Section 53A of TP Act is an equitable doctrine

which creates a bar or estoppel in favour of the

transferee against the transferor. Many a times it is

noted that transferee takes possession of the property in

part-performance of the contract and he is willing to

perform his part of the contract. However, transferor for

one reason or the other does not complete the

transaction by executing a Registered Deed in favour of

the transferee as required under the Law. At times, he

tries to get back the possession of the property.

Therefore, Section 53A was added to the Transfer of

Property Act in the form of equity of part-performance.

This was done to disallow the transferor to take unfair

advantage of his fault and evict the transferee from the

property.

23. Doctrine of part-performance aims at

protecting the possession of such transferee provided

certain conditions contemplated in the said Section are

fulfilled. These essential conditions are:-

"(1) there must be a contract to transfer for consideration of any immovable property;

(2) the contract must be in writing, signed by the transferor, or by someone on his behalf;

(3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;

(4) the transferee must in part performance of the contract take possession of the property, or of any part thereof;

(5) the transferee must have done some act in furtherance of the contract; and

(6) the transferee must have performed or be willing to perform his part of the contract."

24. If these conditions are fulfilled, then in a given

case there is equity in favour of the proposed transferee

who can protect his possession against the proposed

transferor even though a registered Sale Deed conveying

the title is not executed by the proposed transferor. In

such a situation, equitable doctrine of part-performance

provided under Section 53-A of TP Act comes into play

and it provides that:

"the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract.

25. It is submitted by counsel for the defendant

that principal condition to invoke Section 53-A of TP Act

is a written contract signed by the defendant or by

someone on his behalf and such writing must be in such

words from which terms necessary to constitute the

transfer can be ascertained. Whereas in the present

case, there is no written contract of transfer executed by

the defendant containing a clear and unambiguous terms

of transfer and in absence of a written agreement,

plaintiff is not entitled to any protection under Section

53-A of TP Act.

26. It is argued by counsel for the plaintiff that

payments were made by cheque and possession was

given to the plaintiff. There was an oral agreement

between the parties and Sale Deed was to be executed

to which defendant refused. Therefore, terms and

conditions of the oral contract could not be reduced into

writing and this, in no manner, disentitled the plaintiff to

claim protection to her possession.

27. I do not find much force in the submissions of

counsel for the plaintiff for the simple reason that

defendant has admitted that he handed over the

possession of the suit property to plaintiff after receiving

a sum of Rs.6,00,000/-, which according to plaintiff was

for full and final consideration amount, whereas,

according to defendant, the same was paid as earnest

money.

28. Be that as it may, it is for the Trial Court to

adjudge at the relevant stage whether Rs.6,00,000/-

were paid as an earnest money or were paid as full

consideration amount of the sale. I need not interpret

the entire provisions contained in Section 53-A of TP Act

for deciding this application. It is left open for the Trial

Court to consider the scope of Section 53-A of TP Act vis-

à-vis the facts and circumstances of this case while

deciding the case on merits. Fact remains, plaintiff is in

possession of the suit property. She, therefore, has a

strong prima facie case in her favour. Under the

circumstances, when she was given possession in view of

part-performance or in full performance of the contract,

as the case may be, her possession is required to be

protected.

29. In Mool Chand Bakhru's case (supra),

appellant had filed a suit for possession and mesne

profits against the transferee alleging that transfer of the

possession could not be protected under Section 53-A of

TP Act as there was no written contract between the

parties and in absence of a written agreement,

defendant‟s possession could not be protected. The said

case was decided on merits after trial was complete.

30. However, in the present case, oral Agreement

to Sell is not in dispute. Plaintiff has sought declaration

to the fact that she is owner and in possession of the suit

property and has claimed relief of specific performance

of the contract. Whether an oral agreement for sale can

be construed as part-performance of the contract, is

again a question to be looked into and decided by the

Trial Court at the relevant stage. I need not go into

details of the case on merits while disposing of this

application, which, if done, would prejudice the case of

the parties on merits.

31. Rambhau Namdeo Gajre's case (supra),

was filed by the respondent for possession of the land

claiming himself to be the owner with averment that

appellant had wrongfully dispossessed him of the suit

land. In the said case, appellant had taken a defence

and invoked the doctrine of part-performance enshrined

in Section 53-A of TP Act. Under the circumstances, it

was observed by Supreme Court that appellant was not

entitled to any protection under the said Section as he

had not purchased the property from the respondent but

from someone else.

32. None of the above cited cases, therefore, are

of any help to the defendant under the facts and

circumstances of this case. True that, Agreement to Sell

does not create any interest of the proposed vendee in

the suit property but the fact remains, once vendee is

put in possession of the property and has sought relief of

specific performance and declaration claiming herself to

be owner of the suit property having paid the full

consideration amount and on refusal of the defendant to

execute Sale Deed in her favour, she is entitled to

protection of her possession may be as owner till rights

of the parties are decided on merits.

33. Defendant has placed on record certified copy

of Agreement to Sell dated 2nd May, 2006 executed

between Gagandeep, himself and Gaurav Arora and

Veena Arora, plaintiff in respect of first and second floor

of the property in suit. As per this agreement, it was

admitted by the defendant that plaintiff was already in

physical possession of the suit property for the last about

eleven months of execution of the said agreement. Price

of the property was settled at Rs.62,00,000/- to be paid

by the purchaser to the seller, out of which

Rs.12,00,000/- had already been paid. It is on the basis

of this agreement that defendant claimed that initially

the sale consideration amount was agreed at

Rs.69,00,000/-, which was subsequently reduced to

Rs.64,00,000/-. Present suit had already been filed when

this agreement was executed. Probably this agreement

was executed when plaintiff lodged a criminal complaint

against defendant and Gagandeep.

34. Be that as it may, defendant has not sought

any counter-claim seeking enforcement of this

agreement or seeking payment of balance amount from

the plaintiff. Fact remains that agreement in question is

the agreement which was entered into between the

parties on oral terms in May, 2005. Effect of this

agreement, is again to be analyzed by Trial Court while

deciding the case on merits. Plaintiff has placed on

record stamp papers which were purchased by her for

execution of the Sale Deed.

35. Under the circumstances of the case, balance

of convenience tilts in favour of the plaintiff. It is she

who will suffer irrepairable loss and injury, if her

possession is not protected and defendant creates third

party interest in the suit property as it would not only

lead to multiplicity of litigation but would also cause

discomfort and inconvenience to the plaintiff and her

family members, who are residing therein. It is pertinent

to mention here that staircase for going to the first and

second floors is from inside the courtyard in ground floor

and there is no independent access to the first floor and

second floor from outside the building. Probably that was

one of the reasons that the entire property by three

previous owners, including the defendant, was sold to

three different members of plaintiff‟s family by virtue of

three separate Sale Deeds.

36. Injury would be such, which cannot be

compensated in terms of damages, whereas in case the

defendant succeeds, he shall have every right to sell the

suit property in favour of third person and that too at the

rate prevalent in the market at the relevant time. Hence,

application is allowed. Ex parte order dated 20th April,

2006 is hereby confirmed. This is without prejudice to

the rights of the parties on merits.

37. List before Regular Bench on 12th May, 2010.

ARUNA SURESH (JUDGE) APRIL 30, 2010 sb