Shri Ravinder Singh vs Shri Chuckles Kohli & Ors
2010 Latest Caselaw 5513 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment Reserved on: 30.11.2010
                      Judgment Pronounced on: 03.12.2010

+            CS(OS) No. 1440/2008

SHRI RAVINDER SINGH                                .....Plaintiff

                             - versus -

SHRI CHUCKLES KOHLI & ORS                         .....Defendant

Advocates who appeared in this case:
For the Plaintiff: Mr. Jasmeet Singh with
                   Mr. K.D. Sengupta, Mr. Saurabh Tiwari
                   and Ms. Aahuti Sharma, Advocates.

For the Defendant: Mr. S.K. Mehra with Ms. Mamta Mehra,
                   Ms. Mukta Kapur and Mr. Yasir Rauf
                   Ansari, Advocates.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

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 Yes in Digest?

V.K. JAIN, J

IA No. 9657/2008 (under Order 7 Rule 11 of CPC)

1. This is an application for rejection of plaint on the

ground that it does not disclose any cause of action.

2. This is a suit for specific performance of an

agreement dated 23rd December, 2005, executed by the

defendants, in favour of the plaintiffs, for sale of their

undivided share in plot No.15, Block No.172, Jor Bagh, New

Delhi. It is alleged in the plaint that vide agreement dated

23rd December, 2005, the defendants agreed to sell their

undivided one-third share in the aforesaid property to the

plaintiff for a total sale consideration of Rs 3,87,50,000/-.

It is alleged that the plaintiff issued a cheque of Rs 21 lacs

to the defendants, which was later replaced by a cheque of

Rs 25 lacs. Initially, the date for making final payment was

fixed as 09th January, 2006, but later defendant No.1,

acting for himself as well as on behalf of defendant Nos. 2 to

4, agreed to extend the date and also received a sum of Rs

25 lacs from the plaintiff. It is also alleged that despite

receiving Rs 25 lacs from the plaintiff, the defendants have

been delaying fulfillment of their contractual obligations and

have not come forward to complete the transactions. The

plaintiff also claims to have sent one letter dated 02 nd

August, 2006 and another letter dated 07th May, 2007 to the

defendants, asking them to do the needful in this regard.

This was followed by yet another letter dated 04th April,

2008.

3. In the application under consideration, the

defendants have alleged that since the Memorandum of

Understanding (MoU) dated 23rd December, 2005,

contemplated execution of a proper agreement by 10th

January, 2006 and no such proper agreement was executed

between the parties, the suit is liable to be dismissed. It is

further alleged that the plaintiff himself committed breach of

the MoU dated 23rd December, 2005 and abandoned the

same. It is also alleged that the receipt dated 23 rd February,

2006 and the letter dated 09th January, 2006, extending the

MoU are forged and fabricated documents. It is also stated

in the reply that the cheque dated 23rd December, 2005,

issued by the plaintiff for Rs 11 lacs, was dishonoured when

presented to the bank and the schedule of payment

stipulated in the MoU dated 23rd December, 2005, was

never adhered to by the plaintiff. It has, however, been

admitted that the plaintiff made two payments to the

defendants; one for Rs 21 lacs by demand draft and other of

Rs 14 lacs vide cheque dated 23rd February, 2006. It is also

claimed that the sale consideration was agreed at Rs

3,87,50,000/- and the earnest money on the aforesaid

amount came to Rs 38,70,000/-, which was never paid by

the plaintiff.

4. The legal proposition in the matter is well- settled.

The Court while considering an application for rejection of

the plaint can look into only the averments made in the

plaint and the documents filed by the plaintiff. The defence

taken by the defendant is not to be considered while

examining such an application and validity of the

documents filed by the plaintiff also cannot be examined at

this stage.

5. A Division Bench of this Court in Inspiration

Clothes & U Vs. Colby International Ltd., 88 (2000) DLT

769, held that the power to reject the plaint can be

exercised only if the Court comes to the conclusion that

even if all the allegations are taken to be proved, the plaintiff

would not be entitled to any relief whatsoever. It was also

observed that where the plaint is based on a document, the

Court will be entitled to consider the said document also to

ascertain if a cause of action is disclosed in the plaint or not

though the validity of the document cannot be considered at

this stage. In Avtar Singh Narula & Anr. Vs. Dharambir

Sahni & Anr. 150 (2008) DLT 760 (DB), this Court reiterated

that the power to reject the plaint has to be exercised

sparingly and cautiously though it does have the power to

reject the plaint in a proper case.

In Popat and Kotecha Property v. State Bank of

India Staff Assn. 2005 7 SCC 510, Supreme Court noted

that the real object of Order 7 Rule 11 of the Code of Civil

Procedure is to keep irresponsible law suits out of the

Courts and discard bogus and irresponsible litigation. It was

further held that dispute questions cannot be decided at the

time of considering an application filed under Order 7 Rule

11 of CPC.

6. The first question, which comes up for

consideration in this case, is as to whether the MoU dated

23rd December, 2005 amounts to an agreement to sell one-

third share of the defendants in Property No. 15, Jor Bagh,

New Delhi or not. The contention of the defendants is that

since this document envisaged execution of a proper

agreement by 10th January, 2006, this, by itself, does not

constitute an agreement.

7. A perusal of the MoU dated 23rd December, 2005

which is an admitted document discloses the following:- (i) it

is between the defendants and the plaintiff (ii) the document

pertains to sale of one-third share of the defendants in

property No. 15, Jor Bagh, New Delhi; (iii) the total sale

consideration was fixed at Rs 3,87,50,000/-; (iv) a cheque of

Rs 21 lac was received by the defendant No.1 Chuckles

Kohli, from the plaintiff, towards the sale of defendant's one-

third share in property No. 15, Jor Bagh, New Delhi; (v) a

further payment of Rs 79 lacs was to be made to the

defendants at the time of execution of a formal agreement to

sell and; (vi) the balance amount of Rs 2,87,5000/- was to

be paid on or before 10th February, 2006.

8. Thus, the aforesaid MoU contains all the essential

ingredients of an agreement to sell an immovable property.

It contains the names of the seller and purchaser, it

contains complete description of the property subject matter

of the agreement, it contains the amount of sale

consideration, it contains the amount of initial payment and

it also contains the last date for payment of the balance

consideration. It would be useful to take note of the

provisions of Section 92 of Evidence Act at this stage.

Section 92 of Evidence Act, to the extent it is relevant,

provides that when the terms of any such contract, grant or

other disposition of property have been proved according to

Section 91, no evidence of any oral agreement shall be

admitted, as between the parties to any such instrument or

their representatives in interest, for the purpose of

contradicting, varying adding to, or subtracting from, its

term. The second proviso to aforesaid Section, however,

provides that the existence of any separate oral agreement

as to any matter on which a document is silent and which is

not inconsistent with its term may be proved. Illustration (f)

and (g) read as under:

(f) A orders, goods of B by a letter in which nothing is said as to the time of payment and accepts the goods on delivery. B sues A for the price. A may show that the goods were supplied on credit for a term still unexplored.

               (g) A sells     B a horse and verbally
               warrants him    sound. A gives B a paper in
               these words      "Bought of A horse for
               Rs.500". B       may prove the verbal
               warranty.

Therefore, if the MoU dated 23rd December, 2005 is

silent with respect to some matter relating to the

transaction between the parties, it is permissible in view of

the proviso (2) of Section 92 of Evidence Act, for him to lead

oral evidence with respect to the agreement between the

parties in relation that matter. Therefore, it is difficult to

dispute that this document by itself constitutes a valid

agreement to sell one-third share of the defendants in

property No. 15, Jor Bagh, New Delhi, to the plaintiff for a

total consideration of Rs 3,87,50,000/-. It does lose its

character of an agreement to sell merely because it

envisaged execution of a formal agreement to sell between

the parties. Though it is not signed by the plaintiff, this is

not the requirement of law that a document in order to

constitute a valid agreement to sell, must necessarily be

signed by the purchaser. This is more so when the party

which has not signed the document, is not disputing it and

is rather relying upon it. In fact, an agreement to sell a

property need not necessarily be in writing and even an oral

agreement, if valid in law and duly proved, can be enforced

by the Court.

It is an admitted case of the parties that the

defendants have received a sum of Rs 25 lacs from the

plaintiff in respect of the aforesaid transaction. Receipt of Rs

25 lacs, Rs 11 lacs by way of demand draft and Rs. 14 lacs

by way of cheque dated 23rd February, 2006 ha been

expressly admitted in para 7 of the application.

9. In J.K. Rajgarhia Vs. Ravi Singh and Ors. 59

(1995) DLT 231, the defendant Dr. Ravi Singh for himself

and on behalf other co-owner of property No. A-63,

Maharani Bagh, New Delhi, executed an MoU agreeing to

sell that building for a consideration of Rs 2,35,00,000/-

and received a payment of Rs 5 lacs. Since the defendants

refused to go and with the execution of the sale deed and

were alleged to have entered into another agreement of sale

with respect to that very property, with another person, the

purchaser filed a suit seeking specific performance of the

Memorandum of Understanding. It was contended on behalf

of the defendants that the Memorandum of Understanding

needed to be ignored since it was merely a contract to enter

into and, therefore, unenforceable. The MoU executed in

that case specifically provided that the purchaser would

finalize the "agreement to sell" within a period of 21 days

which would subject to mutual agreement of both the

parties, then be signed by both vendors and purchasers. In

that case, it was contended by the defendants that Dr. Ravi

Singh has no authority to enter into an agreement on behalf

of other co-owners. It was also pointed out that the cheque

of Rs 5 lacs which he had received from the purchaser was

bogus and no agreement to sell in terms of Section 269 UC

of Income-Tax Act had been entered into between the

parties. Rejecting the contention and granting interim order,

directing the defendants to maintain status-quo, this Court

referred to the following proposition of law enunciated in

Von Hutzfeldt - Wildenburg v. Alexander (1912) I Ch. 284:

"It appears to be well settled by the authorities that if the documents or letters related on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is a binding contract....."

The following observations made by Lord Dunedin

in May and Butcher v. The King ( 1934) 2 Kb 7 were also

quoted by this Court during the course of the judgment:

"To be a good contract there must be a concluded bargain and a concluded contract is one which settles everything that is necessary to be settled and leaves nothing to he settled by agreement between the parties. Of course it may leave something which has still to be determined but then that determination must he a determination which does not depend upon the agreement between the

parties."

10. In Mohan Lal Ahuja and Ors Vs. Tarun Chandra,

157 (2009 DLT 216, one Tarun Chandra entered into a

transaction with Smt. Veena Ahuja, with respect to a flat in

property No. 34, Firozshah Road, New Delhi. On the failure

of the defendant to execute a sale deed, the purchasers filed

a suit for specific performance of the contract or in the

alternative for damages. The document evidencing the

transaction between Tarun Chandra and Smt. Veena Ahuja,

was a receipt dated 30th January, 1988, whereby Tarun

Chandra acknowledged receipt of Rs 2 lacs from Smt. Veena

Ahuja towards provisional booking of a flat, measuring 1866

square feet in Group Housing Scheme at 34, Firozshah

Road, New Delhi on the 4th floor at the rate of Rs 723/-

square feet. Noticing that the receipt gave a description of

the flat by area, floor and price, it was held by this Court

that use of the expression "provisional booking of a flat"

does not defeat the intent with which the receipt was

executed. The question as to whether execution of merely

the receipt in the absence of an agreement makes the

agreement incapable of being performed was answered by

this Court in the negative.

11. The next contention of the learned counsel for the

defendants/applicants was that since the cheque which the

plaintiff paid to the defendants at the time of execution of

the MoU was dishonoured when presented to the bank and

since the plaintiff did not make payment of the balance sale

consideration of the defendants by 10th February, 2006,

which was the last date stipulated in the Memorandum of

Understanding for this purpose, the document itself was

referred void and incapable of enforcement on account of

this reason.

12. The case of the plaintiff is that on 09 th January,

2006, a day prior to the last date fixed in the MoU for

making balance payment, defendant No.1 Chuckles Kohli,

had a discussion with the plaintiff and they mutually agreed

to extend the date of MoU till 10th February, 2006, which

was to be the final date of payment unless more time was

required, which they were to mutually settle at that time.

Though the defendants have claimed that the document

dated 9th January, 2006 is a fabricated document, they have

not claimed that it does not bear signature of defendant

No.1 Chuckles Kohli. As noted earlier, while considering an

application for rejection of plaint, the Court needs to take all

the allegations made in the plaint as correct and the

genuineness or the validity of the documents relied upon by

the plaintiff cannot be examined at this stage. Therefore, for

the purpose of this application, the document dated 09 th

January, 2006 has to be taken a genuine document signed

by defendant No.1 Chuckles Kohli. If that be so, the last

date for making payment in terms of the MoU dated 23 rd

December, 2005 was extended by the parties to 10th

February, 2006 and, therefore, it cannot be said that MoU

became void or unenforceable on account of failure of the

plaintiff to make payment of the balance sale consideration

by 10th February, 2006. Nothing prevents the parties to an

agreement from modifying one or more of its terms at a later

date and if the parties decide to do so, it is only the modified

terms which need to be taken into consideration. Therefore,

in view of the modification made on 09th January, 2006, the

last date for making payment of the balance sale

consideration stood extended to 10th February, 2006.

13. The plaintiff has also relied upon a document

purporting to have been executed by defendant No.1

Chuckles Kohli on 23rd February, 2006, while receiving a

cheque of Rs 14 lacs from the plaintiff. Vide this document,

he acknowledged payment of Rs 14 lacs vide cheque No.

106391 dated 23rd February, 2006 drawn on HSBC Bank in

respect of one-third undisputed rights regarding plot No.15,

Jor Bagh, New Delhi as described in MoU dated 23rd

February, 2005. He further acknowledged receipt of a total

sum of Rs 25 lacs from the plaintiff, including the aforesaid

cheque of Rs 15 lacs drawn on HSBC Bank. It was further

agreed by him that a further sum of Rs 25 lacs will be paid

on or before 08th March, 2006 and the balance amount of

Rs 3,37,50,000/- would be paid on or before 09th May,

2006. He also confirmed a valid general Power of Attorney

from all the legal representatives of late Shri K.K. Kohli to

sign on their behalf in connection with the aforesaid rights

and assured assistance to the plaintiff to have formalities

further with respect thereto in mutual consultation. Again,

though the defendants have claimed that this document is a

forged and fabricated document, they have not claimed that

it is not signed by defendant No.1 Chuckles Kohli. On 22nd

November, 2010, the learned counsel for the defendants

took a short adjournment to take instructions from

defendant No.1 as to whether the document dated 23rd

February, 2006 bears his signatures or not. When this

matter was taken up on 30 th November, 2010, the learned

counsel stated that he had not been able to get in touch

with defendant No.1 and, therefore had not been able to

take instructions from him, in this regard. The Court,

however, need not wait for instructions from defendant No.1

to his counsel in this regard, since at this stage, the

document set up by the plaintiff is to be taken as a genuine

document and the application under Order 7 Rule 11 of

CPC needs to be considered on that assumption. The terms

and conditions with respect to payment of the balance sale

consideration, therefore, stood further modified in terms of

the document dated 23rd February, 2006.

14. As regards non-payment of the balance sale

consideration even in terms of the document dated 23 rd

February, 2006, the case of the plaintiff, as set out in the

plaint, is that the defendants had been delaying in

fulfillment of their contractual obligations and failed to come

forward to complete the transaction, as agreed upon

between the parties and even after accepting the amount of

Rs 25 lacs, they, on one pretext or the other, failed to

produce the relevant documents. This is also the case of

the plaintiff that the defendants belatedly mentioned that

there is litigation pending for the entire property, though the

suit property was clear from the said litigation. It is also

alleged in the plaint that the plaintiff repeatedly requested

to defendants to produce the details of the litigation and to

produce documents to establish that there was no

impediment on the sale of the suit property, but, those

documents were never produced by them.

15. The plaintiff has placed on record copies of letters

dated 02nd August, 2006, 07th May, 2007 and 04th April,

2008, alleged to have been written by him to the defendants

and has claimed that he had always been ready and willing

to perform his part of the agreement, but, the transaction

could not be completed due to non-cooperative attitude of

the defendants. This is also his case that the defendants

are attempting to jeopardize his rights under the agreement

by engaging with third party for sale/transfer of the suit

property. Vide letter dated 02nd August, 2006, addressed to

all the defendants, the plaintiff wrote to the defendants that

they had executed some other contract with a third party

which he had brought to their knowledge and they had

undertaken to make arrangements for cancellation and

termination of that contract and inform the plaintiff

accordingly. They were asked to inform the plaintiff

regarding cancellation of the alleged agreement with the

third party and were also requested to execute and register

the necessary documents so that the transaction could be

duly completed.

Vide letter dated 07th May, 2007, which purports to

be addressed to all the defendants, the plaintiff, referring to

his earlier communication dated 02nd August, 2006, called

upon them to do the needful and close the deal within 15

days. He also conveyed his readiness and willingness to

perform his part of the agreement.

Vide letter dated 04th April, 2008, the plaintiff

wrote to the defendants that they had some disputed with

the third party in respect of their share in the aforesaid

property and that they had assured him that they were in

the process of resolving the said dispute. Referring to his

previous communication dated 02nd August, 2006 and 07th

May, 2007, he requested them to fulfil their commitments

under the Memorandum of Understanding/agreement and

again conveyed his readiness and willingness to perform his

part of the obligations.

16. For the purpose of this application, the Court

needs to presume that the plaintiff had actually sent these

letters to the defendants and that, as claimed by him, they

did not respond to any of them. If the averments made in

these letters are proved to be correct, the plaintiff may have

justification for not making payment of the balance sale

consideration to the defendants in terms of the document

dated 23rd February, 2006, whereby the last date for making

payment of the balance consideration in terms of the MoU

dated 23rd February, 2005 was extended up to 09th May,

2006. The plea taken by the plaintiff in this regard needs

investigation which can be done only during trial.

In Vijay Pratap Singh Vs. Dukh Haran Nath

Singh and Anr., AIR 1962 SC 941, Supreme Court observed

that the Court has not to see whether the claim made by the

petitioner is likely to suceed, it has merely to satisfy itself

that the allegations made in the petition, if accepted as true,

would entitle the petitioner to the relief he claims. It was

further observed that in ascertaining whether the petition

shows a cause of action, the Court does not enter upon a

trial of the issues affecting the merits of the claim made by

the petitioner and it cannot take into consideration the

defences which the defendant may raise upon the merits

nor is the Court competent to make an elaborate enquiry

into doubtful or complicated questions of law of act.

17. The learned counsel for the defendants has

referred to the decisions in T. Arivandandam Vs. T.V.

Satyapal and Anr. AIR 1977 SC 2421, Raj Narain Sarin

(Dead) through Lrs. and Ors. Vs. Laxmi Devi and Ors.

2002 (10) SCC 501, Liverpool and London S.P. and I

Asson. Ltd. Vs. M.V. Sea Success I and Anr. (2004)9 SCC

512, Sh. Anil Kumar Vs. Smt. Seema Thakur and Ors.

(166) 2010 DLT 619, Mayawanti Vs. Kaushalya Devi JT

1990 (3) SC 205, High Way Farms Vs. Sh. Chinta Ram &

Ors 2000 (56) DRJ 201, Lalit Kumar Sabharwal Vs. Ved

Prakash Vijh 2003 (68) DRJ 670, Randhir Singh Chandok

v. Vipin Bansal & Anr. 135 (2006) DLT 56, Rishi Dev

Batra v. Dr. (Mrs.) Anup Suri 2007 V AD (Delhi) 65, Naresh

Bhutani v. Vijay Kumar Khurana DRJ 97 (2007) 117,

Ganesh Shet Vs. Dr. C.S.G.K. Setty & Others AIR 1998 SC

2216, M/s. Mirahul Enterprises and others v. Mrs. Vijaya

Sirivastava AIR 2003 Delhi 15.

18. In the case of T. Arivandandam (supra), Supreme

Court in the context or Order 7 Rule 11 of CPC observed

that reading of the plaint needs to be meaningful and not

formal. There is no quarrel with this proposition of law, but,

reading the averments made in the plaint and the

documents filed by the plaintiff and taking them as correct,

it is difficult to dispute that the plaint does disclose a bona

fide cause of action against the defendants. In the case of

Raj Narain Sarin (supra), Supreme Court reiterated the

settled principle of law that the plaint should be taken as it

is and the application under Order 7 Rule 11 of CPC should

be considered on the basis of the averments made in the

plaint without any external aid being available to the Court

for the purpose. It was also observed that the Court should

be rather hesitant to exercise the jurisdiction under Order 7

Rule 11 of the Code unless the factual score warrants such

exercise and the matter in issue falls within the four corners

of the requirement of the Statute.

In the case of Liverpool and London S.P. and I

Asson. Ltd. (supra), Supreme Court again reiterated the

same proposition of law when it said that whether the plaint

discloses a cause of action or not must be found from

reading the plaint itself and for this purpose the averments

made in the plaint in their entirety must be held to be

correct, the test being as to whether if the averments made

in the plaint are taken to be correct in their entirety, a

decree would be passed. In para 152 of the judgment, the

Court, referring to its earlier decision of Mohan Rawale Vs.

Damodar Tatyaba alias Dadasaheb and Ors. (1994) 2 SCC

392, reiterated that so long as the claim discloses some

cause of action or raises some questions fit to be decided by

a Judge, the mere fact that the case is weak and not likely

to succeed is no ground for striking it out and that the

purported failure of the pleadings to disclose a cause of

action is distinct from the absence of full particulars. This

judgment is hardly of any benefit to the defendants since

the allegations made in the plaint and the documents filed

by the plaintiff do disclose a triable cause of action against

the defendants and at this stage, there is no ground to hold

them to be vexatious or frivolous.

In the case of Anil Kumar (supra), a learned Single

Judge of this Court, referring to the agreement to sell

subject matter of the suit before him, and to the decision of

Supreme Court in V.R. Sudhakara Rao and Ors. Vs. T.V.

Kameswari 2007 (6) SCC 650 and Kollipara Sriramulu Vs.

T. Aswathanarayana and Ors. AIR 1968 SC 1028 observed

that there can be binding oral agreement to sell immovable

property and the question in such cases was as to whether

the material and pleadings on record show that an

agreement to sell had come into existence. Noticing that

four essential ingredients to an agreement to sell immovable

property are (i) particulars of consideration (ii) certainty

about identity of parties; (iii) certainty about the property to

be sold and; (iv) certainty as to other terms relating to

probable cost of conveyance time etc., it was observed that

in the absence of any of these elements, it can be concluded

that there was no binding agreement. However, the suit

before this Court is not based on an oral agreement and the

documents relied upon by the plaintiff, including the MoU

dated 23rd December, 2005, the writing dated 09 th January,

2006 and the second writing dated 23rd February, 2006

disclose all the essential ingredients of a valid agreement to

sell, including consideration, identity of parties, the property

subject matter of the agreement and the time for payment of

the balance sale consideration and completion of the

transaction. The ancillary ingredients of the agreement, if

any, can in view of proviso (2) to Section 92 of Evidence Act,

can be proved by oral evidence. It is, therefore, difficult to

say at this stage that there was no concluded agreement to

sell in favour of the plaintiff.

In the case of Mayawanti (supra), Supreme Court

held that where a valid and enforceable contract has not

been made, the Court will not make a contract for the

parties and specific performance will not be ordered if the

contract itself suffers from some defect which makes it an

invalid or unenforceable contract between the parties. The

stipulations and terms contained in the document filed by

the plaintiff disclose all essential ingredients of an

agreement to sell immovable property. None of the terms of

the stipulations can be said to be uncertain nor can it be

said that the parties were not ad idem.

In the case of High Way Farms (supra), the

transaction between the parties was evidenced by two

documents styled as receipts. The Court, while dealing with

an application under Order 39 Rule 1 and 2 CPC was called

upon to interpret those documents to ascertain whether

there was an agreement to sell executed in favour of the

plaintiff. However, at this stage, the Court is not required a

prima facie view on the merits of the case and is considering

an application under Order 7 Rule 11 of CPC and for the

purpose of deciding this application all the averments made

in the plaint have to be taken as correct. This judgment,

therefore, is of no help to the defendants, particularly at this

stage.

In the case of Lalit Kumar Sabharwal (supra),

while deciding the suit on merits, Supreme Court found that

the document relied upon by the plaintiff was merely a

receipt and did not fulfil the essential conditions of an

agreement to sell. It was noticed that no time frame was

fixed for execution of the sale deed nor 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 consequences of default

and most importantly there was no description of the

property proposed to be sold in the document relied upon by

the plaintiff. These ingredients are not missing in the

documents to relied upon by the plantiff. Considering the

fact that the nature of the document relied upon by the

plaintiff in that case was different from the nature of the

documents relied upon by the plaintiffs before this Court

and more importantly the fact that the Court at this stage is

not deciding the matter finally but is only taking a view on

an application under Order 7 Rule 11 of CPC for rejection of

plaint on the ground that it does not disclose a cause of

action, this judgment does not help the defendant.

In the case of Randhir Singh Chandok (supra), the

Court, after examining the document before it, found that

the document in question was not an agreement to sell and

was at best a memorandum of a tentative understanding

between the parties that the rate of land at which sale

would be effected would be Rs 72.5 lacs per acre. During

the course of judgment, it was observed that normal

practice in Delhi is to receive at least 10% of the total sale

consideration as earnest money, whereas the plaintiff before

the Court had received a meager sum of Rs 5 lacs. In this

case also the Court was taking a view while deciding an

application of the plaintiff under Order 39 Rule 1 and 2 of

CPC for grant of interim injunction, restraining the

defendants from selling or encumbering the suit land. Since

this Court is considering an application under Order 7 Rule

11 of CPC and not an application for grant of temporary

injunction, this judgment, to my mind, does not clinch the

issue in favour of the defendants. Moreover, this is not a

statutory requirement that the earnest money should be at

least 10% of the sale consideration. Nothing prevents the

parties from agreeing on a lesser amount as earnest money.

The amount of earnest money, in my view, loses significance

where the transaction is evidence by documents.

In the case of Rishi Dev Batra (supra), the Court was

taking a view at the time of final decision of the suit on

merits after recording evidence. The Court noticed that that

the plaintiff did not write any letter to the defendant to fulfil

his obligation and there was no correspondence between the

parties for about 1 ½ years. The plaintiff in that case was

also unable to prove that he had sufficient money with him

to make payment of the balance sale consideration. It was,

in these circumstances, that the suit was dismissed. This

judgment, therefore, is of no help to the defendants before

this Court.

In the case of Naresh Bhutani (supra), the Court was

deciding a Regular First Appeal after a decision of the suit

on merits. It was found on the basis of the evidence

produced during trial that the requirements of a document

to constitute an agreement were missing and, therefore, no

valid and enforceable agreement was made out. Again, this

judgment would be of no help to the defendants when the

Court is considering an application under Order 7 Rule 11

of CPC.

In the case of Ganesh Shet (supra), Supreme

Court observed that where in a suit for specific performance

of a contract, the contract on which relief was based was

found to be not a concluded contract, the relief cannot be

given on the basis of another contract alleged by plaintiff to

be concluded contract, when it was not proved that it was a

fresh or independent contract.

In the case before this Court the allegations made

in the plaint and the documents relied upon by the plaintiff

contain all the essential ingredients of a concluded contract

for sale of immovable property. This judgment, therefore,

can give no help to the defendants.

In the case of M/s. Mirahul Enterprises and others

(supra), the Court found that there was no consensus

between the parties as to price payable and, therefore, held

that the specific performance could not be ordered. Again,

this judgment does not help the defendants in any manner.

I have also gone through the decision of the Supreme Court

in the Mayawanti (supra). It does not contain any such

proposition of law which makes out the case for rejection of

the plaint.

19. For the reasons given in the preceding

paragraphs, I find no merit in the application under Order 7

Rule 11 of the CPC and the same is hereby dismissed.

CS(OS) No. 1440/2008 and IA No. 8621/2008 (under Order 39 Rule 1&2) and IA No. 11000/2009 by plaintiff

under Section 151 of CPC for sending the documents dated 09.01.2006 as well as receipt dated 23.02.2006 to Forensic Science Laboratory for comparison of signatures of D-1

List for consideration on 10th January, 2011.

(V.K. JAIN) JUDGE

DECEMBER 03, 2010 bg