Sh. Arun Batra vs Ms. Bimla Devi Thru Lr???S And Ors.
2010 Latest Caselaw 3041 Del

*            HIGH COURT OF DELHI : NEW DELHI

+      I.A. Nos. 4011/1992, 7308/2001 and 7896/2008
                   in CS(OS) No.1578/1992

SH. ARUN BATRA                                             ....Plaintiff
             Through :           Ms. Nandani Sahni, Adv.

             Versus

MS. BIMLA DEVI THRU LR'S AND ORS.                ....Defendants
              Through : Mr. Sandeep Sethi, Sr. Adv. with
                        Mr. Lalit Gupta, Adv. for Def. Nos. 2-6
                        Mr. J.P. Gupta, Adv. for Def. No. 7
                        Mr. Manish Vashisht, Adv. for LR 1 (a)
                        Mr. K. Datta with Mr. Manish Srivastava,
                        Advs. for Def. No. 9

Decided on: July 02, 2010

Coram:
HON'BLE MR. JUSTICE MANMOHAN SINGH

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

2. To be referred to Reporter or not?                             Yes

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

MANMOHAN SINGH, J.

1. By this order I shall dispose of the three pending applications filed

by the parties, the detail of which are given as under:

a) IA No.4011/1992 under Order 39 Rules 1 & 2 of the Code of

Civil Procedure, 1908 filed by the Plaintiff.

b) IA No.7308/2001 under Order 39 Rule 4 of the Code of Civil

Procedure, 1908 for vacation of status-quo order passed on 30th April,

1992 filed by the Defendant No.9.

c) IA No.7896/2008 under Order 39 Rule 4 of the Code of Civil

Procedure, 1908 filed by the Defendants No.2 to 6.

2. The common facts in the applications are that the plaintiff has

filed the present suit seeking specific performance of an alleged oral

agreement to sell entered into between plaintiff and defendants No.1 to 8

in respect of property bearing No.42/44, Sunder Nagar, New Delhi. The

said property is jointly owned by the Defendant No.1 (owner of 1/3rd

undivided share), Defendant No.7 (owner of 1/3rd undivided share) and

Defendants No.2 to 6 (joint owners of 1/3rd share).

3. The suit along with IA No.4011/1992 was listed before this Court

on 30th April, 1992. On that date, this Court while issuing summons in

the main suit passed the interim orders in the application restraining the

Defendants No.1 to 6 and 8 from selling, alienating, transferring or

encumbering their respective shares in the property.

4. It is the case of the plaintiff that in or about April, 1989 the

defendants approached the plaintiff with a proposal about the sale of two

houses. After some negotiations a deal was struck between the plaintiff

on the one hand and the defendants on the other, whereby the defendants

agreed to sell both the houses to the plaintiff for a total consideration of

Rs.1,53,00,000/-. Defendant No.1 was to get a sum of Rs.51 lacs

towards her share in the property and similarly defendants No.2 to 6

being one branch of the family were jointly to get Rs.51 lacs for their

share and likewise defendant No.7, Smt. Pushpa Devi, was to get a sum

of Rs.51 lacs for her share in the property.

5. It is further submitted that documents in the form of separate

receipts were prepared, witnessing the above transaction. So far as Smt.

Bimla Devi, defendant No.1, is concerned, she received a sum of

Rs.1,00,000/- and sum of Rs.2,00,000/- by way of pay order No.015127

of Allahabad Bank, South Extension Branch, New Delhi, dated

23.4.1989 drawn in her name i.e. a total sum of Rs.3,00,000/- through

her son Sh. Umesh Kumar, defendant No.8 who represented to the

plaintiff that he had full authority to receive the consideration and sign

the receipt for the same and had all the power to enter into any

transaction of sale or otherwise on behalf of his mother, Smt. Bimla

Devi. The pay order referred above was encashed by Smt. Bimla Devi

in her account in the bank.

6. As far as defendants No.2 to 6 are concerned, they also received a

sum of Rs.3,00,000/- towards earnest money/part consideration in

respect of their 1/3rd share in the aforesaid properties and executed a

receipt on 23.4.1989 witnessing the receipt of a sum of Rs.1,00,000/- in

cash and another sum of Rs.2,00,000/- vide pay order No.015126 of

Allahabad Bank, South Extension, New Delhi. The said receipt was

signed by Sh. Mohinder Kumar Gupta and Sh. Deepak Gupta

(defendants No.2 and 5 herein) who represented to the plaintiff that they

had the authority to sign on behalf of defendants No.3,4 and 6 as well.

The receipt of the amount towards part consideration was acknowledged

by defendants No.3, 4 and 6 later on as per the case of the plaintiff and

the amount received by Sh. Mohinder Kumar, defendant No.2 and Sh.

Deepak Gupta, defendant No.5, was shared by defendants No.2 to 6. As

far as defendant No.7 is concerned, the case of the plaintiff is that she

had agreed to sell her 1/3rd individual share to the plaintiff for a total

consideration of Rs.51,00,000/- and received a sum of Rs.1,00,000/- in

cash from the plaintiff on 23.4.1989. According to the plaintiff, a pay

order bearing No.015125 for a sum of Rs.2,00,000/- Allahabad Bank,

South Extension, New Delhi, was handed over to her and she assured the

plaintiff that she will sign the receipt and encash the pay order after 2-3

days. However, on 25.4.1989 she sent back the pay order through her

representative and never came to execute the receipt of Rs.1,00,000/-

which was received by her in cash.

7. Upon filing of the application filed by the Plaintiff M/s. Caravan

Commercial Co. Ltd. was impleaded as Defendant No.9 who thereafter

filed the IA No.7308/2001 to vacate the ex-parte order of injunction

dated 30th April, 1992. The Defendant No.9 had stated that it entered

into a written agreement to sell with the defendant no. 1 to 7 to purchase

the suit property. Two agreements were executed between defendant No.

1 to 7 and defendant No.9 on 15th November, 1991 and 16th November,

1992.

8. The defendant No.9 also filed a suit for declaration, injunction and

specific performance of the abovesaid two agreements being Suit No.

2443/1993 titled as Caravan Commercial Company Limited V. Pushpa

Devi & Ors., wherein the defendants in the said suit were restrained

from creating third party rights in the suit property.

9. The defendant No.1 Smt. Bimla Devi expired on 6.10.2003 during

the pendency of the suit. Her legal representatives were brought on

record vide order dated 9.4.2009. The issues were framed on

10.12.1998. The plaintiff's evidence by way of affidavit is already on

record. Some original documents of the plaintiff are missing.

Directions have already been issued to the registry to trace out them.

These applications are pending for long time. With the consent of the

parties, these are heard after filing photocopies of the missing documents

by the plaintiff.

10. The main case of the defendants in the written statement is that

defendants No.2 and 5 in their written statement dated 19 th August, 1993

have categorically denied the existence of any concluded agreement of

sale with the plaintiff in respect of suit property. The said defendants

have also denied execution of the alleged receipts and have stated that

the said receipts are forged and fabricated documents.

11. Defendants No.3, 4 and 6 who are claiming to be co-owners of

1/3rd undivided share in the suit property in their written statement

have denied existence of any agreement of sale with the plaintiff.

The said defendants have stated, inter alia, that they have not executed

any document in favour of the plaintiff and have also had not any

negotiations regarding sale of the suit property with the plaintiff. The

said defendants have alleged that defendants No.2 and 5 in any

event, have no authority to negotiate or enter into an agreement of

sale on their behalf and they have denied execution of any receipt in

favour of the plaintiff and have alleged that the so called receipt is

forged and fabricated.

12. The defendants prayed for vacation of status quo order, inter

alia, on the following grounds:-

(i) No negotiations were held for sale of the suit property between

the Plaintiff and Defendant no. 1. Defendant no. 1, it is

reiterated, is the owner of 1/3rd undivided share in the suit

property.

(ii) No negotiations for sale of the suit property were held between

the Plaintiff and Defendant no. 3,4 & 6 who are all co-owners

of the suit property.

(iii) Further, there is no evidence of any negotiations regarding sale

of the suit property between the Plaintiff and Defendant no. 7

who is also a co-owner (of 1/3rd undivided share) of the suit

property.

(iv) Defendant no. 8 has averred that he had no authority, written

or oral to negotiate on behalf of Defendant no. 1 for sale of her

share in the suit property.

(v) In any event and assuming whilst denying that there are

receipts validly executed by Defendants no. 2 & 5 and

Defendant no. 8, the said receipts, it is submitted do not

amount to a concluded contract and / or an Agreement of Sale

in respect of the suit property in the eyes of law and cannot be

relied upon the Plaintiff to prove his case for specific

performance.

13. Defendants No.2 to 6 are the sons/legal heirs of late Smt. Shanti

Devi, who was admittedly a co-owner of the suit property to the extent

of 1/3rd undefined and undemarcated share. Upon the demise of late

Smt. Shanti Devi defendants No.2 and 6 inherited her undefined share in

the suit property in equal shares as claimed by them.

14. It is the contention of the defendants that the alleged agreement to

sell is not reduced into writing and thus, it is in contravention of Section

296UC of the Income Tax Act, 1961. Another contention of defendant

No. 2 to 6 is that though the alleged receipts were executed in 1989, the

suit has been filed by the plaintiff in 1992 on the last date of expiry of

the limitation period for filing the suit.

15. It is averred that even as per the case of the plaintiff, he only

negotiated for sale of the suit property with defendants No.2 and 5 and

not with defendants No.3, 4 and 6. No authority has been disclosed

which would enable defendants No.2 and 5 to negotiate on behalf of

defendant Nos.3, 4 and 6. Hence, taking the plaintiff's case at the

highest he has only entered into an agreement to sale with two out of

the five co-owners of a 1/3rd undivided share in the suit property.

16. The defendant No.7 in his written statement has denied the fact

that he had received a sum of Rs.1,00,000/- in cash from the plaintiff or

any pay order was handed over to him. The defendant No.7 has also

denied any consultation or having signed the receipt and encashed the

pay order as alleged by the plaintiff.

17. It is argued that in the absence of any contract, even prima facie

between plaintiff and defendant Nos.3, 4, 6 and 7 no decree for specific

performance can be passed qua the said defendants. Therefore, the

interim order granted on 30th April, 1992 is to be vacated as the suit

itself is not maintainable.

18. Mr. Sandeep Sethi, senior counsel for the defendants, refers

Section 20 of the Specific Relief Act, 1963 which mandates that the

jurisdiction of a court to grant a decree of specific performance is

discretionary and the court is not bound to grant such relief merely

because it is lawful to do so. In other words even where the plaintiff

succeeds in proving his case, the court has the discretion to refuse to

grant specific performance.

19. He submits that Section 16 of the said Act mandates that specific

performance of a contract cannot be enforced in favour of a person who

fails to aver and/or prove that he has performed or has always been

ready and willing to perform the essential terms of the contract which

are to be performed by him. He further submits that in the present case,

from the conduct of the plaintiff, it is evident from the following as per

the case of the defendants:

a. The plaintiff alleges that the agreement to sell between him

and the defendants came into being on 23rd April, 1989; the

plaintiff filed the present suit on the last date of limitation

i.e. 23rd April, 1992. In fact the plaintiff took no steps in

furtherance of the alleged agreement to sell till April, 1992

when, for the first time he sent a notice dated 10th April,

1992 followed by two public notices on 14th April, 1992

and 16th April, 1992 and he remained quiet for about three

years. As admitted by him he received a notice from the

counsel of defendant No.2 and 5 asking the plaintiff to

enforce the alleged agreement in March, 1990 yet there is

no explanation for the plaintiff remaining silent for a

period of two years thereafter.

b. The plaintiff has failed to take any steps or called upon the

defendants to take any steps to obtain the following

permissions:

i. No objection certificate under Chapter 20 (c) of

the Income Tax Act, 1961, for which an

application has to be filed jointly by the

proposed purchaser and sellers (the plaintiff's

contention that it is only the defendants who are

liable to obtain this no objection is therefore

wholly incorrect);

ii. Permission from the competent authority from

the Urban Land (Ceiling and Regulation) Act,

1976;

iii. Permission from the L&DO for

transfer/assignment of the said property.

20. Mr. Sethi, Sr. Advocate, appearing on behalf of the defendants

No.2 to 6 has argued that the ex-parte ad-interim order is a non-speaking

order as no reasons have been given and further no compliance of

provisions of Order 39 Rule 3 CPC has been made by the plaintiff after

obtaining the ex-parte ad-interim order. Therefore, injunction otherwise

is liable to be vacated.

21. Per contra, Ms. Nandani Sahni, learned counsel for the plaintiff,

has argued that the defendant No. 2 and 5 had executed the receipt and

received part consideration on behalf of defendants No.3, 4 and 6 also.

The contention of the learned counsel for the plaintiff is that the

agreement to sell can be enforced against the joint owner who became

party to the contract and the relief of Specific Performance can be

granted. She has referred paras 3 to 12 of the plaint wherein the details

of the advance payments had been mentioned by the plaintiff.

22. Further submission of the counsel for the plaintiff is that since the

interim order in this matter was granted in 1992, the defendants had not

taken any interest for vacation of the same, even the application for

vacation of the interim order was filed after number of years, as matter is

at the final stage, therefore, till the suit is decided, status quo order

already passed 18 years ago should be continued by the Court.

According to the counsel for the plaintiff, no doubt it is a discretionary

relief but it cannot be curtailed or taken away by claiming the damages.

23. She submits that in case the claim of the plaintiff is found to be

baseless then the defendants can be awarded cost and compensation. It

is further argued by the plaintiff that the submission of the learned

counsel for the defendants has no force in saying that the plaintiff had

not taken any interest for more than three years after execution of the

alleged receipts nor the plaintiff had shown readiness and willingness as

there are documents on record by way of bank certificate, to show that

the plaintiff was capable to make the balance payment as agreed by the

parties.

24. Her further submission is that the seller of the property who had

entered into an agreement is not entitled to wriggle out from the

contract. Therefore, in the interest of justice, equity and good conscious,

the interim order must continue.

25. The next submission of the learned counsel of the plaintiff is that

the defendants' conduct is totally dishonest as after passing the interim

order on 30.4.1992, the defendants had entered into an agreement with

the defendant No.9 and defendants have to purge themselves in this

regard and the contempt application is pending for disposal, therefore,

no indulgence be given in favour of the defendants for discretionary

relief sought by the plaintiff, rather the plaintiff has no objection if this

Court may expedite the trial.

26. The other reason for continuation of interim order is that the

defendant No.9 has to prove before this Court that he is a bona fide

purchaser of the said property as it has purchased the property without

any notice to the plaintiff which is contrary to the provision of Section

19 of the Act. Thus the status of the property be preserved in order to

strike balance between the parties. Since the defendants No.2, 5 and 8

have not denied their signatures on the receipts, no harm would be

caused if the interim is continued for further period.

27. The learned counsel for the plaintiff has argued that as far as the

compliance of Order 39 Rule 3 CPC is concerned, the said objection has

not been taken by the defendants in the pleading. Secondly, it has been

argued that before filing of the suit, the defendant Nos.1, 2 and 5 filed a

caveat petition on 16.4.1992 through their Advocate. The interim order

was passed on 30.4.1992, the Advocate of defendant No.7 Smt. Pushpa

Devi filed the Vakalatnama and had inspected the file on 1.5.1992. She

submits that by implication thereof the defendants were aware about the

interim order passed by the Court, hence non-compliance is not fatal to

the interim order passed by the Court.

28. The following judgments have been referred by the plaintiff in

support of her submissions made in the matter:

1. Kuldip Gandora Vs. Shailendra Nath Endlay, 2007 AIR (Del) 1.

2. Govind Prasad Chaturvedi Vs. Hari Dutt Shastri and Another, (1977) 2 SCC 539.

3. Swarnam Ramachandran (Smt) and Another Vs. Aravacode Chakungal Jayapalan, (2004) 8 SCC

4. A. Abdul Rashid Khan (Dead) and Others Vs. P.A.K.A. Shahul Hamid and Others, (2000) 10 SCC

5. Kartar Singh Vs. Harjinder Singh and Others, (1990) 3 SCC 517.

6. Sardar Singh Vs. Smt. Krishna Devi & Anr., JT 1994 (3) S.C. 465.

7. A. Venkatasubbiah Naidu Vs. S. Chellappan and Others, (2000) 7 SCC 695.

8. Smt. Indira Kaur and Others Vs. Sheo Lal Kapoor, (1988) 2 SCC 488).

9. M.L. Devender Singh and Others Vs. Syed Khaja, AIR 1973 SC 2457).

10. N.R. Dongre and Others Vs. Whirlpool Corporation and Another, (1996) 5 SCC 714.

11. Gujarat Bottling Co. Ltd. and Others Vs. Coca Cola Co. and Others, (1995) 5 SCC 545.

12. R.K. Goel & Ors. Vs. Amrit Singh & Ors., 80 (1999) DLT 331 (DB).

13. Mahrwal K. Trust Vs. Baldev Das, 2005 RLR 15 (NSC).

14. Gobind Ram Vs. Gian Chand, 2000 RLR 515 (SC).

15. Rakesh Kumar Jain Vs. Devender Singh Mehta, 2000 (52) DRJ.

16. Joginder Singh Bedi vs. Sardar Singh Narang and Another, 26(1984) DLT 162.

17. Pandurang Ganpat Tanawade Vs. Ganpat Bhairu Kadam and others, AIR 1997 SC 463.

18. Agricultural Engineering Co. Vs. Birla Cotton Spinning Weaving Mills, 1971 RLR (NOTE) 36.

19. Kaulashwari Devi (Smt.) and Another Vs. Nawal Kishore and Another, 1995 Supp (1) SCC 141.

20. Satyabratta Biswas Vs. K.K. Kishu & Ors., 1995 RLR (SC 90.

21. Prem Grover Vs. Balwant Singh, 126 (2006) DLT

22. Ashok Kumar Goenka Vs. Shri Krishan Kumar Gupta, 107 (2003) DLT 569.

23. Shashi Malhotra Vs. Lakshman Kumar Aggarwal, 1996 (38) DRJ 363.

24. Prakash Chandra Vs. Angadlal and Others, (1979) 4 SCC 393.

25. Nanak Builders Vs. Vinod Kumar, 1991 RLR 87.

26. Sargunam (Dead) By LR. Vs. Chidambaram and Another, (2005) 1 SCC 162.

27. S.K. Gupta Vs. Avtar Singh Bedi & Ors., 122 (2005) DLT 437.

28. Ajit Prasad Jain Vs. N.K. Widhani and Others, 38(1989) DLT 456.

29. Let me now examine the submissions made by both parties. The

plaintiff has produced two receipts of advance amount allegedly issued

by defendant No.1 and defendants No.2-6 in favour of the plaintiff. I

shall discuss each receipt separately. First, I will take the receipt which

is allegedly signed by defendant No.8 on behalf of defendant No.1. The

defendant No.8 is the son of Smt. Bimla Devi, defendant No.1. The

defendant No.1 was alive at that time as she died during the pendency of

the suit. The same reads as under:

"RECEIPT Received a Sum of Rs.3,00,000/- (Three lacs only) one lac cash and Rs.2,00,000/- (Two lac only) vide pay order No. 015127 of Allahabad Bank, South Ext. New Delhi dt. 23.4.89 in favour of Smt. Bimla Devi w/o Late Mai Dayal Aggarwal R/o B-508, New Friends Colony, New Delhi as earnest money for sale of 1/3 share of Property bearing No.42 & 44, Sunder Nagar New Delhi. The Total Consideration of the both the houses has been settled between both the parties as 1,53,00,000/- (One Crore & fifty three lacs only), out of which my 1/3rd share come to 51,00,000/- (fifty one lacs only) from Sh. Arun Batra S/o Sh. K.L. Batra R/o B-5, Housing Society South Ext.-I, New Delhi.

            Sd/-                                        Sd/-
            Prem Dhawan                     (UMESH KUMAR)
            S/o Kanshi Ram                  S/o L. Mai Dayal Aggarwal
                                            B-508, New Friends
                                            Colony, New Delhi.
            Sd/-
            Vinod Kumar Khanna
            S/o Sh. R.N. Khanna
            R-167Greater kailash
            New Delhi"

30. It appears from the receipt that it has been signed by Umesh

Kumar, defendant No.8, in the present case. The said receipt is

admittedly not signed by the defendant No.1. The contention of the

learned counsel for the plaintiff is that Umesh Kumar received Rs.3 lacs

(Rs.1 lac in cash and Rs.2 lac by way of pay order) from the plaintiff on

behalf of Smt. Bimla Devi, defendant No.1, who had 1/3rd share in the

suit property and the pay order issued in favour of defendant No.1 had

been duly encashed in her account.

31. The submission of the learned counsel for the defendants is that

defendant No.1 has not signed the said receipt. Defendant No.1 has

denied any negotiations or authority in favour of defendant No.8 to sell

her share. It is also contended by defendant No.1 that the defendant

No.8 might have received the pay order of Rs.2 lac issued by the

plaintiff, but later on, when it came to the knowledge of defendant No.1

that he had deposited the pay-order in the account of defendant No.1

without any authority, the defendant No.8 was asked by the defendant

No.1 to return the money to the plaintiff. But she was informed later on

by the defendant No.8 that the plaintiff refused to take back the money

from him. The contention of the learned counsel for the defendant No.1

is that no part consideration whatsoever has been received by her as per

allegations made in the plaint. The defendant No.8 has admitted the

receipt of pay order of Rs.2 lac from the plaintiff in the name of

defendant No.1 and had deposited the same in the account of defendant

No.1 without authority. It is also the case of the defendant No.8 that

when he tried to return the money plaintiff who had refused to accept the

same.

32. The second receipt dated 23.4.1989 which is allegedly executed

by defendants No.2 to 6 reads as under:

"Receipt Received (strike off) a Sum of Rs.3,00,000/- (Three lacs only) one lac cash and Rs.2,00,000/- (Two lac only) vide Pay order No. 015126 of Allahabad Bank, South Ext. New Delhi from Sh. Aurn Batra S/o Sh. K.L. Batra R/o B-5, Housing Society South Ext., N. Delhi as earnest money for the Sale of Property No. 42 & 44, Sunder Nagar, New Delhi. Our Share of out of this property is 1/3rd. The Total Consideration of the both the houses has been settled between both the Parties as 1,53,00,000/- (One Crore &

fifty three lacs only) out of which our Share comes to Rs.51,00,000/- (fifty one lacs only)

Sd/- Sd/-

Prem Dhawan 1. (MOHINDER KUMAR GUPTA) S/o Kanshi Ram

2. (MAHESH KUMAR GUPTA)

3. (RAMESH GUPTA) Sd/-

4. (DEEPAK GUPTA)

5. (SURINDER KUMAR GUPTA) Sd/-

Vinod Kumar Khanna S/o Sh. R.N. Khanna R-167Greater kailash New Delhi"

33. It is admitted position that the two receipts referred by the

plaintiff have not been signed by the defendant No.1, 3, 4, 6 & 7 who are

the co-owners of the suit property. The second receipt is only signed by

defendants No.2 and 5. Both the receipts are admittedly undated. From

the said receipts, it appears that no timeframe was stipulated for

conclusion of sale transaction or execution of formal written agreement

between the parties. Nothing is mentioned in the said receipts about the

necessary approvals and no objections which are required from the

various departments in order to conclude the transaction. The

permission from the perpetual lessor, conversion of the property from

leasehold to freehold and the detail and particular of the parties about the

authority is also not mentioned in the two receipts. There is no other

written agreement or any document between the parties.

34. There was no written agreement to sell in the matter. It is the

admitted fact that after execution of the two receipts dated 23.4.1989,

there was no communication/reminder from the plaintiff calling upon the

defendants to enforce the agreement till 10th April, 1992 when the notice

was issued by the plaintiff through his Advocate to the defendants No.1

to 7 asking them to obtain clearance, permission and sanction from the

Income Tax Department and other concerned department and to take

immediate steps in order to execute the sale deed in his favour after

obtaining the said permission and the two caution notices published in

the newspaper by the plaintiff.

35. It is settled law that in a suit for specific performance of contract,

the evidence and proof of agreement must be absolutely clear and

certain. (Ganesh Shet Vs. Dr.C.S.G.K. Shetty and others, AIR 1998 SC

2216)

36. In Mayawanti Vs. Kaushalya Devi, (1990) 3 SCC 1, it has been

held by the Supreme Court at page 5 in para 18 as under:

"18. In a case of specific performance it is settled law, and indeed it cannot be doubted, that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. The Law of Contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts. Where a valid and enforceable contract has not been made, the court will not make a contract for them. Specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unforceable. The discretion of the court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract. It is, therefore, necessary first to see whether there has been a valid and enforceable contract and then to see the nature and obligation arising out of it. The contract being the foundation of the obligation the order of specific performance is to enforce that obligation."

37. It is settled law that where the plaintiff comes before the Court in

order to seek a decree for specific performance of contract of sale of

immovable property on the basis of oral agreement alone, heavy burden

lies on the plaintiff to prove that there was consensus ad-idem between

the parties for a concluded oral agreement for sale of immovable

property.

38. The grant of injunction is a discretionary relief. It has to be

exercised subject to the Court satisfying that: (1) there is a serious

disputed question to be tried in the suit and that there is probability of

the plaintiff being entitled to the relief asked for; (2) irreparable injury or

damage would ensue before the legal right would be established at the

trial; and (3) that the comparative hardship or mischief or inconvenience

which is likely to occur from withholding the injunction will be greater

than that would be likely to arise from granting it.

39. The Court while granting or refusing to the injunction should

exercise sound judicial discretion to find 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.

40. In the case of M/s Pelikan Estates Pvt. Ltd. Vs. Shri Kamal Pal

Singh and Ors., 2004 VI AD 185 decided on 20.8.2004, where specific

performance was sought on the basis of oral agreement and interim

injunction was sought during the pendency of the suit, Vikramajit Sen, J.

declined the injunction with the observation that "where immovable

property is in question I would always be reluctant if not loathe to accept

the evolution of a transaction which is not evidenced in writing.

Learned Judge further observed that "where emergence of an oral

agreement is being set up, there must be no possibility of doubt in

essential concomitants of the contract".

41. In the present case, admittedly the defendants No.1, 3, 4, 6 & 7,

the co-owners of the property, have not signed the documents produced

by the plaintiff. The present case is not a case of written agreement.

The base of the claim of the plaintiff is two receipts which according to

the plaintiff were signed by the defendants No.2, 5 & 8 and on behalf of

other defendants i.e. 1,3,4,6 & 7. The basic question which requires

consideration in the present matter is that whether prima facie there was

a concluded agreement for sale of the respective shares of the defendants

in the property is made out by the plaintiff or not. The four ingredients

necessary to make an agreement to sell are: (i) particulars of

consideration; (ii) certainty as to party i.e. the vendor and the vendee;

(iii) certainty as to the property to be sold; and (iv) certainty as to other

terms relating to probable cost of conveyance to be borne by the parties,

time, etc.

42. In view of the said ingredients, as referred above, perusal of the

receipts shows that the receipts are undated, no timeframe was stipulated

for concluding the sale transaction, full particulars and detail of

respective authority are also not mentioned in the receipts. These

relevant details are missing in the receipts/oral agreement. In view of

the above, it appears that receipts are uncertain and undefinite which

prima facie indicate that the parties were still to negotiate to arrive at the

agreed terms and conditions for sale of the suit property. Admittedly

after the issuance of alleged receipts till the filing of the present suit

there were no negotiations/communications between the parties. At this

stage, prima facie it does not appear that there was any consensus

between the parties to formally execute an agreement to sell and

defendants No.1,3,4,6 & 7 cannot be held to be bound by the said

agreement alleged to have been entered into (even after assuming) by

way of two receipts signed by the defendants No.2,5 & 8. There is no

doubt that the Court can grant the relief to the extent of joint owners

who had become party to the contract and it can be enforced against part

of the co-owner. But fact remains that is not the case of plaintiff nor has

the relief been claimed in that manner. In the present case, the plaintiff

wants to enforce the agreement between the plaintiff and defendants

No.1 to 8 for the entire property in dispute.

43. In case of Brij Mohan & Ors. Vs. Smt. Sugra Begum & Ors., JT

1990 (3) S.C. 255, it was observed inter alia ...... "Whether there was

such a concluded oral contract or not would be a question of fact to be

determined in the facts and circumstances of each individual case. It has

to be established by the plaintiffs that vital and fundamental terms for

sale of immovable property were concluded between the parties orally

and a written agreement if any to be executed subsequently would only

be a formal agreement incorporating such terms which had already been

settled and concluded in the oral agreement." Thus, the decisions

referred by the plaintiff on this aspect and for other issues do not help

the case of the plaintiff. Therefore, this Court is of the considered view

the issues involved in the matter need trial. The interim order under

these facts and circumstances cannot be sustained. Further, the plaintiff

has also claimed the relief for damages. In case, after the trial if the

plaintiff is able to prove his case on merit, the principle of lis pendens

will apply, the Court will also have to consider the claim of the plaintiff

for the relief of damages.

44. There is no force in the submission of the learned counsel for the

plaintiff that the interim order has continued for the period of more than

18 years and the defendants have hardly taken any interest for vacation

of the same thus it should continue till the disposal of the suit. I do not

agree with the learned counsel for the plaintiff as each matter has to be

decided on its own merit by the Court, a mere delay in disposal of the

interim application by the Court, no benefit can be derived by any party.

This Court also does not agree with the submission of the plaintiff that

the application for vacation of the order has been filed after number of

years by the defendants and hence not maintainable. I am of the view

that since the main application under Order 39 Rules 1 & 2 CPC is still

pending for disposal, the delay in filing the application for vacation of

the order is not much material. Even, if these two applications under

Order 39 Rule 4 CPC are not maintainable, still the Court is to decide

the main application under Order 39 Rule 1 & 2 CPC in which the

interim order was passed.

45. As regard the objection raised by the defendants that the interim

order passed by the Court is non-speaking one and there is failure on

behalf of the plaintiff to comply the provision of Order 39 Rule 3 CPC is

concerned, this Court agrees with the submission of the defendants.

Admittedly the compliance of the provision of Order 39 Rule 3 CPC was

not made by the plaintiff. The Court is not impressed with the

justification given by the plaintiff during the course of hearing because

of filing of caveat by the few defendants and inspection of file by the

defendant No.7 on the next day after passing the order. This Court feels

that it is the duty of the party who had obtained the interim order to

comply the said provision.

46. In A. Venkatasubbiah Naidu Vs. S. Challapan and Ors. (supra),

in para 12 the Court observed as under:

"12. What would be the position if a Court which passed the order granting interim ex-parte injunction did not record reasons thereof or did not require the applicant to perform the duties enumerated in Clauses (a) & (b) of Rule 3 of Order 39. In our view such an Order can be deemed to contain such requirements at least by implication even if they are not stated in so many words. But if a party, in whose favour an order was passed ex-parte, fails to comply with the duties which he has to perform as required by the proviso quoted above, he must take the risk. Non- compliance with such requisites on his part cannot be allowed to go without any consequence and to enable him to have only the advantage of it."

47. In S.B.L. Ltd. Vs. Himalaya Drug Co., 1998 AIR (Del) 126, the

Court in paras 34 and 35 observed as under:

"34. Looking to the scheme of Order 39 CPC, it is clear that ordinarily an order of injunction may not be granted ex

parte. The opposite party must be noticed and heard before an injunction may be granted. Rule 3 carves out an exception in favour of granting an injunction without notice to the opposite party where it appears that the object of granting injunction would be defeated by the delay. Conferment of this privilege on the party seeking an injunction is accompanied by an obligation case on the court to record reasons for its opinion and an obligation cast on the applicant to comply with the requirements of Clauses

(a) and (b) of the proviso. Both the provisions are mandatory. The applicant gets an injunction without notice but subject to the condition of complying with Clauses (a) and (b) above said.

35. We may refer to several observations made by their Lordships of the Supreme Court in Shiv Kumar Chadha v. MCD, (1993) 3 SCC 161. Though the observations have been made primarily on the obligation of the Court to record the reasons but in our opinion they equally apply to the obligation cast on the applicant by the proviso. The provisions are mandatory. Their Lordships have observed:

"The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code. Before the proviso aforesaid was introduced, Rule 3 said "the court shall in all cases, excepts where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party". The proviso was introduced to provide a condition, where court proposes to grant an injunction without giving notice of the application to the opposite party being of the opinion that the subject of granting injunction itself shall be defeated by delay. The condition so introduced is that the court "shall record the reasons" why an ex party order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3 the procedure prescribed under the proviso has been followed. The party which invokes the jurisdiction of the court for grant of an order of restraint against a

party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and court has to consider briefly these factors in the ex party order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authorities concerned to record reasons before exercising power vested in them. In respect of some of such non-compliance therewith will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The Parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side under exceptional circumstances. Such ex parte orders have far-reaching effect, as such a condition has been imposed that court must record reasons before passing such order. If it is held that the compliance with the proviso aforesaid is optional and not obligatory, then the proviso by the Parliament shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purposes. Proviso to Rule 3 of Order 39 of the Code, attracts the principle that if a statute requires a thing to be done in a particular manner it should be done in that manner or not all."

48. Therefore, the interim order is not sustainable on this ground also.

49. Considering the overall facts and circumstances of the present

case, the interim order granted on 30.4.1992 is vacated. IA

No.4011/1992, IA No.7308/2001 and IA No.7896/2008 are disposed of

accordingly with no order as to cost. However, in the interest of justice,

equity and fair play, the suit proceedings are expedited. Joint Registrar is

expected to complete the evidence of the parties within twelve months

from today.

50. It is clarified that the observations made in the order are tentative

and shall have no bearing when the matter is listed for final hearing of

the suit.

CS(OS) No. 1578/1992

List the matter before the Joint Registrar on 11th August, 2010

for further proceedings.

JULY 02, 2010                      MANMOHAN SINGH, J.
jk