Delhi High Court
Col. A.B.Singh(Through L.Rs) vs Shri Chunnilal Sawhney & Others on 5 October, 2011
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.96/2002
% Reserved on: 28th September, 2011
Pronounced on: 5th October, 2011
COL. A.B.SINGH(THROUGH L.RS) ...... Appellants
Through: Mr. Sanjeev Kumar Saxena, and Mr.
Mukesh Kumar, Advocates
VERSUS
SHRI CHUNNILAL SAWHNEY & OTHERS ...... Respondents
Through: Ms. Mala Goel, and Mr. Yashpal
Singh, Advocates
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers 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
VALMIKI J. MEHTA, J
1. The challenge by means of this Regular First Appeal, is to the
impugned judgment of the trial court dated 9.1.2002, and by which
judgment, the court below has decreed the suit for specific performance of
the plaintiffs, and who are now represented by the respondents no.1 to 9 -
the legal heirs of the original plaintiffs.
2. The reference in this judgment to the appellants will include and mean
reference to the defendant no.1-seller. The reference to the respondents
RFA 96/2002. Page 1 of 36
would mean reference to the plaintiffs. This is for the sake of convenience
inasmuch as not only both the original plaintiffs (the original respondents
no.1 and 2 in this appeal) have expired during the pendency of the present
appeal, even the original appellant, and who was the defendant no.1 in the
trial court, has also expired during the pendency of the appeal. The legal
heirs of the original appellant/defendant no.1 and the original respondent
nos. 1 and 2/plaintiffs are on record. For completeness on this aspect, it may
be stated that in the present appeal Delhi Development Authority (DDA) in
the original memo of parties in this appeal was the respondent no.3, and
which was sued as the defendant no.2 in the suit. DDA was made a party in
the suit because the subject plot was a leasehold plot given on lease by the
DDA. This respondent in the present judgment is referred to as DDA.
3. The facts of the case are that the plaintiffs/respondents as proposed
buyers, entered into an Agreement to Sell dated 13.7.1977 (Ex.P-3) with the
defendant no.1, as proposed seller, for the subject/suit plot admeasuring
209.032 sq. mts. having municipal number D-211, Malviya Nagar Extension,
now known as Saket, New Delhi for a total sale consideration of
Rs.1,60,000/-. The plaintiffs/respondents paid to the defendant no.1 a sum of
Rs.90,000/- by way of four cheques as part sale consideration at the time of
entering into the Agreement to Sell. The Agreement to Sell was got
registered before the Sub-Registrar two days later on 15.7.1977, and on
which date the possession of the suit property was delivered to the
RFA 96/2002. Page 2 of 36
plaintiffs/respondents by the defendant no.1. The balance price of
Rs.70,000/- was to be paid by the plaintiffs at the time of execution and
registration of the sale deed before the Sub-Registrar, Delhi. The defendant
no.1 as per the agreement had undertaken the responsibility to obtain all the
necessary permissions from the concerned authorities including the DDA for
conveying the suit property to the respondents. As per the Clause 6 of the
Agreement to Sell, after obtaining the necessary permissions for execution of
the sale deed from the Income Tax Authority and the Local Authority i.e. the
DDA, the defendant no.1 was to intimate the respondents of having obtained
such permissions. Thereafter within a period of 30 days of receipt of such
intimation by registered post AD, the respondents/plaintiffs were to get the
sale deed executed and registered in the office of the Sub-Registrar, New
Delhi and make payment of the balance sale consideration. It was the case
of the respondents/plaintiffs that the defendant no.1 applied to the DDA for
obtaining the permission, but the defendant no.1 failed to get the necessary
permission, and hence the sale deed could not be executed and registered.
It was the case of the plaintiffs that they were always ready and willing and
continued to be ready and willing to perform their part of contract for making
of payment of balance consideration of Rs.70,000/-. Ultimately, on the
failure of the defendant no.1 to execute the sale deed, a legal notice dated
18.2.1985 was served, which proved futile, and hence the subject suit for
specific performance was filed.
RFA 96/2002. Page 3 of 36
4. The defendant no.1 contested the suit by contending that the
Agreement to Sell was violative of Section 23 of the Indian Contract Act,
1872 inasmuch as, as per the perpetual lease deed executed by the DDA in
favour of the defendant no.1, the property could only have been transferred
after 10 years of 20.1.1972 and therefore, the Agreement to sell entered into
on 13.7.1977 was against public policy being against the terms of the
perpetual lease. It was also pleaded that no notice was served upon the
DDA prior to filing of the suit and consequently the suit was barred under
Section 53-B of the Delhi Development Act, 1957. It was further pleaded that
the suit was barred by limitation. It was also pleaded that the plaintiffs were
not ready and willing to perform their part of the contract and they were
guilty of breach of contract. Finally, it was pleaded that the relief of specific
performance should be denied because the same is a discretionary relief and
on account of delay, the defendant no.1 has lost out on receiving of the
balance consideration which ought to have been received in the year 1977
itself thereby making it unjust and inequitable to grant specific performance.
5. After the pleadings were complete, the trial court framed the following
issues:-
ISSUES:
"1. Whether the suit of the plaintiff is within time?
2. Whether the agreement date: 13.7.77 is illegal, void
and unenforceable?OPD
RFA 96/2002. Page 4 of 36
3. Whether the defendant had applied to the DDA
seeking permission to transfer the property in
question in terms of the agreement dated :
13.7.1977?OPD.
4. Whether the defendant/DDA had refused to grant the
permission as stated in para 1 of the preliminary
objections of defendant no.1 and the plaintiff was
duly informed?
5. Whether the plaintiff had been willing to perform his
part of the contract? OPP.
6. Whether the plaintiff is entitled to a decree of specific
performance?
7. Relief."
ADDITIONAL ISSUES:
"1. Whether the agreement to sell was contrary to the
terms of perpetual lease deed and is hit by Section 23/24
of the Indian Contract Act?OPD
2. Whether the suit is barred by Section 53 B of
D.D.Act?OPD
3. Whether the suit is barred under Article 54 of
Limitation Act?OPD"
6. The main issues which were argued before this court, and also before
the trial court were issues pertaining to the suit being barred by limitation,
that the relief should not be granted because DDA had been impleaded only
after filing of the suit, the Agreement to Sell was void as it was violative of
Section 23 of the Contract Act, 1872, the suit being barred on account of
failure to give requisite notice to the DDA under Section 53-B of the Delhi
Development Act, 1957 and finally that the discretionary relief for specific
performance ought not to be granted in the facts of the present case.
RFA 96/2002. Page 5 of 36
7. Ordinarily, I would have referred to in detail the submissions made by
the counsel for the appellants in this court with regard to each of these
issues and the response thereto by the counsel for the respondents,
however, since the impugned judgment exhaustively deals with each of
these issues, arguments of the parties, giving thereafter the appropriate
findings thereon, I would thus seek to reproduce the relevant paras of the
impugned judgment, inasmuch as, I agree with the reasoning as contained in
these paras. Wherever the additional reasoning is required to be given, I am
adding such additional reasoning in the relevant portions of this judgment.
Before reproducing the paras I note that there are some errors of grammar
and syntax in certain portions of the impugned judgment and which be
overlooked.
8. With respect to the issue of limitation, the court below has observed as
under:-
"10. Issue no.1 and Addl. Issue no.3: In the written
statement, it is alleged that suit of the plaintiff is barred
by time and merits dismissal on this ground alone.
According to Article 54 of Limitation Act, the suit requires
to be filed within the period of 3 years. Learned Counsel
for the defendant has contended that the defendant was
always ready and willing to perform his part of contract
and in support of this contention he cited various letters
issued by defendant no.1 to the office of DDA and other
higher authorities. Letter Ex.D1W1/P-1 to Ex.D1W1/P-5
dated:9.8.77, 1.5.78, 26.9.78, 23.8.79 and 25.5.82
respectively were issued by Col. A.B.Singh requesting the
office of DDA to grant permission to execute the sale
deed. When no positive response was received, he wrote
letters Ex.D1W1/P-6 dated: 31.8.81 to the Prime Minister
RFA 96/2002. Page 6 of 36
of India, Ex.D1W1/P-8 dated: 14.2.84 to the Vice-Chairman
of DDA. Some of the letters of Col. A.P.Singh were replied
by DDA. The record was summoned from the office of
DDA by issuing notice Ex.D1W1/3 dated: 16.9.2001
through postal receipts and AD cards Ex.D1W1/4 to
D1W1/7. Some of the letters were produced and the same
are Ex.D1/2 dated 4.4.78 Ex.D1W1/2 dated: 14.9.78
Ex.D1W1/1 dated 7.11.78 and Ex.D1W4/4 dated : 19.8.81.
These letters were issued by DDA to Col. A.B.Singh and in
all these 4 letters permission to sell was rejected by the
DDA on the ground that 10 years have not passed since
the execution of lease deed as per conditions of lease.
Therefore, ld. counsel contended that the date of refusal
are 4.4.78, 4.11.78 and 19.8.81, as above mentioned, the
period of limitation of 3 years will commence from the last
letter of refusal dated: 19.8.81. The present suit was filed
much beyond the period of 3 years i.e. on 12.3.85 hence
the suit of the plaintiff is liable to be dismissed on this
ground alone. On the other hand, ld. counsel for the
plaintiff has refused the above contention. He is relying
upon para 14 of the written statement of DDA, in which
DDA has submitted that defendant no.1 has never been
refused the grant of sale permission. DDA still can allow
the execution of conveyance lease only after the required
formalities are completed and 50% of unearned increase
in the value of plot is deposited. Besides the above
pleadings in the written statement, ld. counsel has further
gone to the extent that at the most, the time will
commence from the letter dated: 16.1.85 written by Col.
A.B.Singh in which he asked to vacate the premises. In
reply of this, a letter dated: 18.2.85 was written by the
plaintiffs asking the defendant no.1 to perform his part of
agreement. Immediately, thereafter, the suit was filed on
18.2.85. Thus, it has been contended that suit is within
the time.
11. From perusal of the agreement, that time is not the
essence of the contract. Clause 6 of the agreement Ex.P-3
dated: 13.7.77 is reproduced as below:
"That all the legal requirements relating to the
execution of the Sale Deed such as taking
permission to sell, income-tax clearance
Certificate, from the local authorities shall be the
obligation of the Vendor of the First Part at this
RFA 96/2002. Page 7 of 36
own cost. After obtaining the sale permission he
shall intimate the same to the Vendees of the
Second Part and within a period of 30 days from
the date of the Receipt of such intimation by
Registered Post under A.D. the vendees of the
second part shall get the Sale Deed executed and
registered in the office of the Sub Registrar, New
Delhi.
12. The above Clause states about the completion of
formalities from the government department such as
taking the permission to sell, income tax clearance
certificate by the vendor and after obtaining the same he
shall inform the vendee within 30 days by registered AD
post for registration of sale deed. It further shows that as
and when the permission is received, he shall inform to
the vendee. Thus, the information of refusal to grant
permission is not included in the agreement. In the first
para of agreement it is stated that it is the vendor who
has to act and the role of vendee comes later on. It
appears from the correspondence Ex.P4,P5 & Ex.D1/5 to
Ex.D1/22 from the side of plaintiff and Ex.D1W1/P1 to
Ex.D1W1/P8 from the side of defendant, that both were
eager to get the sale deed executed. But the main hurdle
coming in the way was the completion of 10 years from
the lease deed dated: 20.1.72 Ex.D2/1, Clause 4(a) of
conditions of lease is reproduced as below:
"The Lessee shall not sell, transfer,
assign or otherwise part with the possession
of the whole or any part of the Residential
plot except with the previous consent in
writing of the lessor which he shall be
entitled to refuse in his absolute discretion.
Provided that such consent shall not be
given for a period of ten years from the
commencement of this Lease unless, in the
opinion of the Lessor, exceptional
circumstances exist for the grant of such
consent."
13. Accordingly to the above clause, the parties are
bound by the condition of completion of 10 years from the
date of lease. No permission could be given before 10
RFA 96/2002. Page 8 of 36
years, provided there are exceptional circumstances.
There was no exceptional circumstances accrued to the
parties as per replies received by parties from the DDA.
However, from reading of all the letters mentioned above,
both the parties, without any exception, tried their utmost
to get the sale permission from the DDA. It also appears
from the letters of the defendant that he was in need of
money during the initial period of this agreement and he
was desperately interested to execute the sale deed prior
to completion of 10 years from the date of lease.
Similarly, the plaintiffs were also interested to get the sale
permission from the DDA and that is why he mentioned in
several letters to the plaintiffs to exert his influence for
getting the work done. There are sequence of letters from
both the parties conveying their intentions for the
execution of sale deed. The defendant happens to be in
active service in Army and most of the time he remained
out of Delhi. Correspondence entered into between them
about the progress of obtaining the permission of sale
from the DDA. The plaintiffs being stationed in visited the
office at Delhi on several occasions and apprised the
position from time to time to the defendant, wherever he
remained posted in the Army. The letters posted by the
plaintiffs to the defendant are Ex.P4,P5, D1/5 to D1/22 and
the same were filed by the defendant on record and
admitted by the plaintiffs during the stage of admission
denial of documents. The letters have been posted in the
span of period from 29.9.77 to 1.4.84. Similarly, letters
Ex.D1W1/P-1 to D1W/P-8 were written by Col. A.B.Singh to
various concerned authorities relating to grant to sale
permission and those authorities included income tax
office, Vice-chairman of DDA, Lt. Governor of Delhi,
Commissioner Land DDA, Prime Minister of India,
President of India etc. These letters were posted in the
above authorities with the request to expedite the sale
permission and for waiving the payment of unearned
increase. Although these letters were denied by the
defendant during the stage of admission/denial of
documents but the defendant could not escape from
denying his signatures on all the letters. In fact these
letters were written by the defendant no.1 and have been
denied with ulterior motive. These letters are admitted in
evidence. Despite, the aforesaid correspondence in
between the parties and also with the govt. authorities, no
RFA 96/2002. Page 9 of 36
permission to sell was received. Further, the letters were
received from the DDA regarding the reply from DDA
Ex.D1/2 dated : 4.4.78, Ex.D1W1/2 dated: 14.9.78,
Ex.D1W1 dt: 7.11.78 and Ex.D1W4/A dated 19.8.81. From
these letters it has been interpreted by learned counsel
for the defendant that the refusal for grant of permission
to sell was sent by DDA and has contended that the period
of limitation will commence from these dates. In this
respect learned counsel for the defendant is relied upon
1997 IV A.D. S.C. 380 IN VENKAPPA VS. KASAWWA and the
relevant extract is reproduced as below:
"Thus, it could be seen that the suit document
itself was denied as early as in 1971. As a
consequence mere issuance of notice dated:
August 22, 1972 does not stop the running of
limitation period. Once the same has began to
run it runs its full course. Therefore, the suit
having been filed after the expiry of 3 years from
the date of the knowledge, of denial, by operation
of Article 54 of this Schedule to the Limitation Act,
1963, the suit is hopelessly barred by limitation."
14. In the above case, the denial was from the side of
vendor whereas in the instant case, the denial of grant of
permission was from the DDA and that too, due to non
completion of period of 10 years from the date of
execution of perpetual lease. The aforesaid letters issued
by the DDA are not denial for obtaining permission to sell
but these letters referred to the compliance of the
provisions of terms and conditions of lease deed. The
terms and conditions are that the period of 10 years must
have expired after the issuance of perpetual lease deed
and 50% of the unearned increase must be paid. The
parties were initially interested to seek the said
permission but because of aforesaid two conditions the
matter was delayed. Otherwise any number of times the
letters were written to DDA either by the plaintiffs or by
the defendant, prior to completion of 10 years from the
execution of perpetual lease, for the purpose of grant of
permission to sell, the reply would have been always in
negative. Therefore, the 4 aforesaid letters dated: 4.4.78
Ex.D1/2, dt:4.9.78 Ex.D1W1/2, dated: 7.11.78 Ex.D1W1/1
and dated: 19.8.81 Ex.D1W4/A cited by ld. counsel for the
defendant no.1 would not be the dates from which the
RFA 96/2002. Page 10 of 36
period of limitation would begin to run. Besides this, the
agreement to sell does not provide any time limit for
execution of sale deed as the time was not the essence of
contract. Both were unable to get through with the
conditions to sell i.e. 10 years were not completed by that
time according to clause 4A of perpetual lease deed.
Thus, the time passed and the circumstances changed
with the passage of time. Nobody knows when the mind
of a person may change. Defendant admittedly wrote the
letter dated : 16.1.85 for taking back the possession of the
premises in question. This is the time to be considered as
the final words from the defendant that he did not want to
continue with the agreement to sell and from this time the
period of limitation will begin to run for the filing of suit
within the period of 3 years under Article 54 of Limitation
act. The present suit was filed on 12.3.85 immediately
after the receipt of final letter dated: 16.1.85. Thus, the
suit of the plaintiff is within the period of limitation under
Article 54 of Limitation Act. (underlining added)
9. A reference to the aforesaid paras read with Article 54 of the Limitation
Act, 1963 shows that the following conclusions have rightly been drawn by
the court below:-
(i) Time of performance was not the essence of the contract inasmuch as
the sale deed was to be executed after uncertain events/dates of the
permissions to sell being obtained by the defendant no.1 from DDA and the
Income Tax Authority. After obtaining of the permissions such intimation
was to be given to the plaintiffs by registered post AD and then within 30
days after receipt of this intimation by the plaintiffs that they were liable to
get the sale deed executed and registered by payment of balance sale
consideration. Accordingly in the facts of the case since a fixed/specified
RFA 96/2002. Page 11 of 36
date for performance was not there, limitation hence would only commence
when the plaintiffs had notice of refusal on part of the defendant no.1 to
perform the contract.
(ii) The defendant no.1 only on 16.1.1985 for the first time wrote a letter
for taking back possession of the premises and the suit was thereafter
immediately filed on 12.3.1985. The suit having been filed on 12.3.1989 was
thus within limitation period of three years of refusal to perform the
Agreement to Sell- the refusal coming into existence for the first time on the
defendant no.1 writing the letter dated 16.1.1985. During the entire period
from 1977 to 1985, no letter was ever written by the defendant no.1
terminating the contract or refusing to perform the contract and on the
contrary repeated efforts were made to get the permission from the DDA for
selling of the property. The contract was very much kept alive not only on
behalf of the defendant no.1 but also by the plaintiffs.
I therefore hold applying Article 54 of the Limitation Act that
since there was no specified date for performing of the contract; and since
the time of performance was not the essence of the contract on account of
the fact that it was the duty of the defendant no.1 to obtain the necessary
permissions and thereafter intimate by registered post AD to the plaintiffs;
the cause of action to file the suit for specific performance could only have
arisen on 16.1.1985 when the plaintiffs were put to notice that the defendant
no.1 had refused to perform the Agreement to Sell. I do not agree with the
RFA 96/2002. Page 12 of 36
argument as raised on behalf of the learned counsel for the appellant that
since the DDA refused permission on 4.4.1978, on this date the limitation to
file the suit for specific performance had arisen. The fact of the matter is
that even after 4.4.1978, the defendant no.1 kept on trying to get the
permission from DDA. A refusal by a third person, namely the DDA, to grant
permission cannot be equated to a refusal by the defendant no.1 to perform
the contract. As already stated, in fact the defendant no.1 himself had kept
the contract alive for the entire period from 1977 to 1985. I therefore hold
that the trial court has rightly held the suit not to be barred by limitation.
10. The second main issue which was argued before this court was the
issue with respect to denial of relief of specific performance as the DDA
ought to have been made a party since inception but it was made a party
only much after filing of the suit. This aspect has been dealt with by the trial
court in paras 15 and 16 of the impugned judgment and which read as
under:-
"15. The defendant has also raised preliminary
objection in his written statement that the suit is barred by
limitation by virtue of Article 21 of Limitation Act. 1963. It
has been submitted that the plaintiff had move I.A.
No.3644/85 in the suit before the Hon‟ble High Court of
Delhi for impleading DDA in the suit. The Hon‟ble High
Court vide its order dated 27.1.86 impleaded DDA as
defendant no.2 in the suit. Therefore, order 1 Rule 10 (5)
CPC steps into the matter. The suit becomes time barred
because the alleged agreement of sale is dated 13.7.77
and the impleadment is made on 21.1.86. In replication
the plaintiff has submitted that the defendant no.1 or
defendant no.2 DDA never challenged the order dated
RFA 96/2002. Page 13 of 36
21.1.86 before any court of law and as such the said order
has become final in all respects and as such it cannot be
said that the suit has become time barred. According to
order 1 Rule 10(2) CPC, the court may either upon or
without the application by either party may join plaintiff or
defendant as a party to the suit in order to enable the court
effectually and completely adjudicate upon and settle all
the questions involved in the suit. But that provision is
subject to Section 22 of Limitation Act, 1877 (now Section
21). Section 21 of Limitation Act provides that after
institution of the suit if new defendant is added the suit
shall, as regards with him, will be deemed to have been
instituted when he was made a party but this provision is
subject to the proviso that omission to implead, if bonafide,
the period of limitation may be any period. On this point,
learned counsel for the defendant is relied upon 2001 SAR
page 327 and the relevant extract is reproduced as below:
"Adding or substituting the new plaintiff or
defendant after institution of suit - suit shall as
regards such newly added or substituted party be
deemed to have been instituted when he was so
made a party - application for impleadment of such
a party allowed when time prescribed for
institution of the suit has already expired - suit
would stand barred - proviso to the substantive
provision of Section 21 can be of any avail to the
plaintiff only if the court is satisfied and direct that
the suit has regards newly added or substituted
party shall be deemed to have been instituted on
an earlier date."
16. Thus it has to be seen as to whether the plaintiff has
not added DDA by mistake or in good faith. The ground
cited by learned counsel for the plaintiff is that there is no
objection raised by the DDA in his written statement on this
point but this is no ground of exception on this point.
However, from perusal of the record it appears that at the
time of filing of the suit before the Hon‟ble High Court at
the initial stage no relief was claimed by the plaintiff
against the DDA, therefore, the plaintiff did not make DDA
as a party to the suit. The subsequent act of inclusion of
DDA as party is merely a source to achieve the desired
objective and it appears that it is the mistake in good faith
by the plaintiff for non-inclusion of DDA as a party to the
RFA 96/2002. Page 14 of 36
suit and it will be deemed that the suit has been filed on
the earlier date as per Section 21 of Limitation Act. The
plaintiff has satisfied on both the legal objections for filing
the suit within the period of limitation under Article 21 and
Article 54 of Limitation Act. The issues are, accordingly
decided in favour of the plaintiffs and against the
defendant no.1." (underlining added)
I completely agree with the aforesaid findings of the trial court
on this aspect because there was no need to make the DDA as a party
originally because no relief was claimed initially against the DDA. There
were therefore no malafides for not adding the DDA as a party from the
beginning.
11. At this stage I may add that this entire argument is actually without
any substance because the suit for specific performance could have been
decreed even if the DDA would not have been made a party to the suit.
When a suit for specific performance is decreed qua a lease hold property,
and where permission of the superior lessor has to be obtained for
transferring the property, a decree which is passed includes therein a
direction to the defendant/proposed seller to execute the sale deed after
obtaining the necessary permissions of the appropriate authorities and which
appropriate authorities do not have to be made parties to the suit. As per
Order 21 Rule 32 sub-Rule 5 CPC, if the defendant does not take the
necessary permissions, the court in execution proceedings can appoint a
Local Commissioner at the cost of the defendant/judgment debtor to take the
necessary permissions. In fact a contract of specific performance of the type
RFA 96/2002. Page 15 of 36
in question is a contingent contract and such a contingent contract is
enforceable without making the authority which has to give the permission
as party to the suit. It is only if for some valid reason that the concerned
authority denies permission, then the decree for specific performance cannot
be enforced, otherwise, the decree for specific performance will be enforced
by either the defendant no.1 getting the necessary permissions or on behalf
of the defendant no.1 appointment of a person by the court who will take the
necessary permissions and thereafter get the sale deed executed and
registered. The Supreme Court in the case of Chandnee Vidyawati Vs.
C.L. Katiyal AIR 1964 SC 978 has held that such type of contracts/
Agreements to Sell are contingent contracts and in terms of the decree in
such suits the proposed seller will have to take the necessary permissions
from the appropriate authorities after passing of the decree for specific
performance.
12. I therefore, hold that not only there is no bar for granting of the relief
of specific performance merely because the DDA was added as a party only
subsequently, and on the contrary DDA actually need not at all have been
added as a party as stated above. Further, the trial court has rightly held
that the DDA was added as a party for bonafide reasons and it should
therefore be treated as a defendant since the date of filing of the suit. I
therefore, reject the argument urged on behalf of the appellant that a suit for
specific performance could not have been decreed as the DDA was only
RFA 96/2002. Page 16 of 36
subsequently added as a party and that DDA ought to have been made a
party since the inception.
13. The next issue which was argued on behalf of the appellant was that
the Agreement to Sell in question was in violation of the terms of the
perpetual lease deed, which provided that there could not be a transfer of
the property for a period of 10 years from the date of the execution of the
lease deed, and thus such agreement would be violative of Section 23 of the
Contract Act, 1872 being against public policy and hence void and
unenforceable. In order to appreciate this contention, firstly, it is necessary
to refer to the relevant clause of the lease deed executed by the DDA in
favour of the defendant no.1 and which reads as under:-
Clause 4(a)
"The Lessee shall not sell, transfer, assign, or otherwise
part with the possession of the whole or any part of the
Residential plot except with the previous consent in writing
of the Lessor which he shall be entitled to refuse in his
absolute discretion.
Provided that such consent shall not be given for a period
of ten years from the commencement of this Lease unless,
in the opinion of the Lessor, exceptional circumstances
exist for the grant of such consent."
Firstly, it cannot be said by reading of the aforesaid clause that
there was an absolute bar against transferring the property during the period
of 10 years because for exceptional circumstances the permission could
have been granted. Therefore, it cannot be said that the Agreement to Sell
entered into within a period of 10 years of execution of the perpetual lease
RFA 96/2002. Page 17 of 36
deed would be violative of the terms of the lease deed. Secondly, what is
barred is an execution of a sale deed and not entering into of an Agreement
to Sell. It therefore cannot be said that execution of Agreement to Sell itself
would be violative of the terms of the lease deed. One can also in the facts
of the case press into application the principle/spirit of Section 43 of the
Transfer of Property Act, 1882 which provides that if a person at the time of
the transfer of the property if found not to have title and he subsequently
acquires the title, the agreement entered into at the time when the
transferor had no title can be enforced on account of the subsequent event
of the transferor having acquired title in the property. The said Section 43 of
the Transfer of Property Act, 1882 reads as under:-
"Section 43: Transfer by unauthorised person who
subsequently acquires interest in property
transferred-- Where a person erroneously represents
that he is authorised to transfer certain immoveable
property and professes to transfer such property for
consideration, such transfer shall, at the option of the
transferee, operate on any interest which the transferor
may acquire in such property at any time during which the
contract of transfer subsists.
Nothing in this section shall impair the right of
transferees in good faith for consideration without notice
of the existence of the said option."
Accordingly, for the aforesaid reasons, it is not possible to hold
that the Agreement to Sell in question was in violation of Section 23 of the
Contract Act, 1872.
RFA 96/2002. Page 18 of 36
14. This aspect has been rightly dealt with by the trial court, inter alia, in
the following words:
"20. Issue no.2 & Addl. Issue no.1: In the preliminary
objections of written statement of defendant no.1 it has been
alleged that the sale agreement dated 13.7.1977 is in
violation of terms of perpetual lease dated 20.1.1972 as the
agreement has been arrived at in between the parties prior to
the completion of 10 years from the date of perpetual lease.
It has also been alleged that the said agreement is contrary
to the terms of perpetual lease deed and being against public
policy and is covered under section 23/24 of India Contract
Act. These provisions have to be read jointly with Section
6(h) of the Transfer of Property Act. In reply the plaintiff in
his replication has denied the agreement to sell was in
violation of terms of perpetual lease dated 20.1.1972. It has
been submitted that as per clause 4 of said lease deed it is
the discretionary power of the Lessor/DDA to grant
permission for sale and accordingly the DDA i.e. defendant
no.2 granted permission to sell the property in dispute in
favour of the plaintiffs provided the defendant no.1 to
do/complete certain formalities, which the defendant never
completed with malafide and with ulterior motives to harass
the plaintiffs. Section 23 of Indian Contract Act provides that
the agreement is lawful if its is not forbidden by law. It is not
opposed to the public policy and it is not inequitable. If the
object or consideration of the agreement is unlawful then the
said agreement is void. Therefore, learned counsel for the
defendant no.1 has contended that the agreement to sell is
against the public policy, and it in violation of terms and
conditions of lease and is causing hardship to defendant no.1.
Under such circumstances, he pleaded that the said
agreement is void and not enforceable in law. With these
contentions of the defendant no.1, he will have to prove that
the agreement executed in between the parties is contrary to
law or opposed to public policy or the agreement is void etc.
21. First of all, it is necessary to state as to what type of
agreement the parties has entered into in regard to
provisions of Section 23 and 24 of the Indian Contract Act.
the defendant agreed to sell his plot of land and plaintiff
accepted to purchase for consideration mutually settled in
between them. The agreement to sell was registered before
RFA 96/2002. Page 19 of 36
the Sub-Registrar, the major part of the consideration was
paid, the delivery of possession of house in question was
handed over to the plaintiff and the defendant agreed to
executed the sale deed after obtaining the necessary
permission from the local authorities. According to the terms
and conditions of perpetual lease, the sale deed could be
executed after a period of 10 years from the date of lease.
25. Here, in the instant case, parties entered into agreement
knowing well that the permission to sell could not be granted
up to period of 10 years, therefore, it is alleged by ld. counsel
that the agreement is in violation of 10 years condition and is
forbidden by law under section 23 of Contract Act. Definitely,
the parties can enter into an agreement to sell but the
agreement is not executable prior to 10 years and the
entering into such agreement is not against any statute. In
certain cases, the condition of 10 years could be relaxed
under exceptional circumstances as provided under clause
4(a) of the perpetual lease. As such, it could not be said that
the agreement if forbidden by law. On similar grounds, the
case law cited in AIR 1975 SUPREME COURT 1223 AND AIR
1969 S.C. 504 are not applicable to the instant case."
(underlining added)
The trial court has therefore, rightly held that the Agreement to
Sell was not in violation of the Section 23 of the Contract Act,1872.
15. The next issue which was argued on behalf of the appellant was that
the suit against the DDA was barred under Section 53-B of the Delhi
Development Act, 1957 inasmuch as the requisite notice was not given prior
to filing of the suit. The trial court has correctly held that there was no bar to
the suit for lack of notice under Section 53-B of the Delhi Development Act,
1957 by observing as under:-
"17. Addl. Issue no. 2: In the amended written statement of
defendant no.1, a preliminary legal objection has been raised
RFA 96/2002. Page 20 of 36
that the suit is barred under section 53B of D.D.Act as no
notice has been issued to the DDA and as such the entire suit
must fail. In reply to this objection, the plaintiff has
submitted in the replication that the DDA was impleaded as
defendant no.2 under the orders of Hon‟ble High Court when
the plaintiffs moved an application. It has been further
submitted that the defendant no.2 DDA has not taken any
objection as such defendant no.1 cannot be permitted to take
the said objection. However, it is mandatory if the suit is
against the DDA, a notice must be issued prior to the filing of
the suit. Admittedly, in this case no notice has been issued by
the plaintiff before filing of this suit. As such, ld. counsel for
the defendant no.1 is relied upon 59 (1995) DLT 625 (DCM
Limited Vs. DDA) and the relevant extract is reproduced as
belows:
"A notice which is required to be served on
the defendant as is contemplated under section
53H of the Act is similar to the notice, which is
required to be served under section 80 of the
Code of Civil Procedure, in case a suit is to be
filed against the government or public
authority. Section 53B of Delhi Development
Act like section 80 of Code of Civil Procedure is
mandatory and its compliance is imperative.
The suit not complying with such like
procedures cannot be entertained by any court
and if instituted must be rejected under order 7
Rule 11 CPC."
18. Similar view has been held in various cases decided by
the courts, i.e. 1996 RLR 400, 61 (1996) DLT 757, 2001 RLR
100, AIR 1927 PREVY COUNSEL 176, AIR 1938 PATNA 127,
AIR (37) 1950 ORISSA 257, AIR 1931 MADRAS 175, AIR 1936
PATANA 339, AIR 1931 CALCUTTA 503, 63 1996 DLT 676,
1950 ORISSA 257 AND 1972 RLR 38. The construction of
Section 53B of DD Act is on the analogy of Section 80 of Code
of Civil Procedure. It is mandatory on the part of party suing
to issue notice under section 80 of CPC before filing of the
suit if the case has been filed against government authorities.
But in the case where the parties are in correspondence with
DDA for the sake of grant of permission to sell for the last
many years and several letters have been cited, as
mentioned above, and agitated before the DDA, these
correspondence and representations are sufficient notice to
RFA 96/2002. Page 21 of 36
the DDA. The main purpose of this provision of Section 53 B
of the DD Act is that the government authorities are not
surprised by filing of the case against them without their
information. Through these letters the DDA was informed
and apprised of the problem existing in between the DDA and
the parties, therefore, the purpose of Section 53B of DD Act
or Section 80 of CPC is fully served by way of previous
representations and correspondence with the DDA by the
plaintiffs or by defendant no.1. This view has been supported
from the case laws reported in 1994 RLR 71 (Moonlight
Electronics Industry vs. DDA) in which the following
observations have been made by our own High Court and the
extract is reproduced as below:
"The purpose of Section 53(H) of the Delhi
Development Act is to give notice to the deft. of
the facts on which the plaintiff wishes to rely for
purposes of seeking relief from this court.
I have seen the order which has been passed by
D.B. of B.N.Kirpal and Sunanda Bhandare, JJ. in
CWP No. 2716/88, D/25.01.91 which is Annexure-
A to the plaint.
It is not disputed that in the writ both the parties
in the suit were parties & order of 25.1.1991 was
passed. The writ was disposed of for the reasons
that the D.B. would not go into the rate which was
to be charged as market rate as on 8.1.81. The
amount payable has already been deposited by
the plaintiff in the instant suit, and the petitioner
in the W.P. with the DDA.
In my view, filing of the W.P. is sufficient notice. It
is also sufficient notice, in my view, that this suit
has been filed. Counsel for the petitioner also
refers to and relies upon 1991 Rajdhani LR 389.
Same view has been taken by P.K.Bahri, J.
I decide the preliminary issue in favour of the
plaintiff by holding that the suit is maintainable."
(underlining added)
16. To the aforesaid finding of the trial court, I may add that in fact, the
appellants/defendant no.1 had no locus standi to raise this issue as it is only
the DDA which can raise this issue, and which is not raising this issue. In any
case, this issue is no longer res integra inasmuch as, it has been held by a
Division Bench judgment of this court in the case of Yashoda Kumari Vs.
MCD AIR 2004 Del 225 that once there is a contest to the suit, the suit
cannot be held to be barred for not giving of the notice under Section 53-B
inasmuch as the basic object of Section 53-B, like Section 80 CPC is to
prevent the matters from coming to court and once the matter reach the
court and are contested, the suit should not be dismissed on such technical
grounds. The relevant observations of the Division Bench of this court in the
decision of the case Yashoda Kumari (supra) are as under:-
7. Section 80, CPC affords two options to the plaintiff. He may
either file a suit against the Government or the public officer
after serving two months notice under Sub-section 1 or he
may file it without serving the notice and for this seek the
leave of the Court under Sub-section 2 on satisfying it that an
immediate and urgent relief was required in the facts and
circumstances of the case. He can do this by filing an
accompanying application to show the urgency which is to be
considered and disposed of by the Court. In the event it is
rejected, the Court has to return the plaint to the plaintiff who
could refile it after service of two months notice under the
proviso of Section 80.
8. The object of Section 80 notice is to afford the Government
or the public officer an opportunity to examine the nature of
the claim to settle it, if so advised and to avoid any futile
litigation and to save the public money and time which would
be otherwise wasted on unnecessary litigation.
9. The Supreme Court in Raghunath Das v. Union of India and
Anr., MANU/SC/0406/1968 : [1969]1SCR450 , holding this:
"The object of the notice contemplated by Section
80, CPC is to give to the concerned Government
and public officers opportunity to reconsider the
legal position and to make amends or settle the
claim, if so advised without litigation. The
legislative intention behind that section is that
public money and time should not be wasted on
unnecessary litigation and the Government and the
public officers should be given a reasonable
opportunity to examine the claim made against
them lest they should be drawn into avoidable
litigation. The purpose of law is advancement of
justice. The provisions in Section 80 are not
intended to be used as booby trap against ignorant
and illiterate persons."
11. Apart from this, we find that the appellant's suit was
already registered by the Court first and ex parte interim
order was also passed in this. It was thereafter transferred to
District Court along with the application for grant of leave.
From this it could also be easily presumed that the Court had
impliedly granted the leave to institute the suit or that the
notice stood waived in the facts and circumstances of the
case. This aspect seems to have gone totally unnoticed with
Trial Court proceedings mechanically; in the matter to dismiss
the suit for want of notice under Section 80, CPC.
14. But this apart, taking in regard that this Court had
registered the suit and granted the stay order and that
respondents had contested it all through, even notice under
Section 53-B should be deemed waived in the facts and
circumstances of the case. After all the purpose of notice
under Section 53-B of DDA Act is the same as that of Section
80, CPC i.e. to bring the claim to the authority's notice so that
it may concede or contest it. Once the authority had
contested it on merits even at preliminary stage, it could not
complain of non-service of notice under Section 53-B now.
Nor could it be held fatal to justify the dismissal of the suit.
15. Viewed this, we allow this appeal and set aside the
impugned dismissal order. Technically this would revive
appellant's suit for consideration of appellant's application for
grant or refusal of leave but we feel that much water had
flowed down since and doing so would be an exercise in
futility because parties have already contested the suit on
merit all through and all these years. It would be ridiculous
and hyper-technical to take them back to square one for a
fresh debate on service of two months' notice under Section
80, CPC or Section 53-B of DDA Act. Both notices shall,
Therefore, be deemed waived in the facts and circumstances
of the case and appellant's suit No. 316 shall be revived and
disposed of under law on merit. (emphasis supplied)
17. The final issue which has been urged on behalf of the appellant is that
the relief for specific performance is a discretionary relief and in the facts of
the present case, the discretionary relief for specific performance ought not
to be granted. This argument seeking denial of the relief of specific
performance is based upon Section 20 of the Specific Relief Act, 1963 and
which provides that the court is not bound to grant specific performance
merely because it is lawful to do so. Sub-Section-2 of Section 20 gives
certain examples where specific performance may be denied. We are
concerned in the facts of the present case with Section 20(2)(b) of the
Specific Relief Act, 1963, which states that specific performance can be
denied where performance of the contract would involve of hardship on the
defendant which he did not foresee and non performance would not involve
hardship on the plaintiff. Explanation-1 of Section 20 adds a caveat that
mere inadequacy of consideration or that the contract is more onerous to the
defendant or improvident in nature will not be deemed to be considered as a
hardship within the meaning of Section 20 (2)(b). Keeping in view the
aforesaid position of law, in my opinion, specific performance in the facts of
the present case cannot be denied because of the reasons which are stated
below, although, the amount which would be awarded to the appellants
would have to be modulated. The factors for granting specific performance
and not denying the same are:-
(i) The defendant no.1 entered into a contract with open eyes knowing
that it is possible that permission to sell the property may not be granted
since 10 years had not expired from the date of the execution of the lease
deed with the DDA. It is not a case that the defendant no.1 was misled into
entering of the contract, because the subject clause is a clause in the lease
deed of the defendant no.1 himself with the DDA. It is the defendant no.1
who expected to get the necessary permission from the DDA by showing
exceptional hardship, and merely because, permission was not granted,
cannot mean that the plaintiffs are to blame.
(ii) The record shows that permission was denied by the DDA on account
of the faults not of the plaintiffs but of the defendant no.1. The first default
was that the necessary documentation was not completed by the defendant
no.1. Secondly, the defendant no.1 though was bound to pay 50% of the
unearned increase for getting the permission, failed to pay the same. There
is nothing which has emerged on record that the DDA refused to grant the
permission except for the reason of non-compliance of the requirements of
giving the necessary documentation and paying of the unearned increase by
the defendant no.1
(iii) The defendant no.1 very much in spite of a bar for selling of the
property for 10 years except on showing undue hardship, not only entered
into the contract but also received more than 50% of the consideration i.e.
Rs.90,000/- out of Rs.1,60,000/-. In fact, the possession of the property was
also delivered on 15.7.1977 when the Agreement to Sell was registered. No
seller transfers possession unless he has received the entire sale
consideration except the balance stated sale consideration. In terms of
Section 20(3) of the Specific Relief Act in the facts of the present case, the
court would exercise discretion to decree specific performance because the
plaintiff has done substantial acts in furtherance of the Agreement to Sell.
The trial court has by extensive discussion held that the plaintiffs were ready
and willing to perform their part of the contract and that the contract could
not be performed by execution and registration of the sale deed (and only
when the balance sale consideration was payable) on account of failure of
the defendant no.1 to complete the necessary documentation required by
the DDA including by making payment of 50% of the unearned increase.
(iv) The facts of this case are such that specific performance cannot be
denied because of the alleged hardship to the appellant because in terms of
Section 20(2)(b) there is a hardship on the plaintiff who has paid substantial
part of the price of over 50%, received possession and can claim the
prejudice of denial of the relief of specific performance.
(v) The facts of the present case show that the plaintiffs had a complete
right to the property in terms of the doctrine of part performance under
Section 53A of the Transfer of Property Act, 1882 inasmuch as there is a
written agreement to sell (duly registered) containing the necessary terms
and under the agreement the plaintiffs had received possession after paying
part sale consideration and they were always ready and willing to perform
their part of the contract which part was awaiting the permission from DDA.
The defendant No.1 and his successors thus can claim no right in the
property except on payment of the balance sale consideration.
18. The counsel for the appellants argued that prices of the property have
risen and balance sale consideration if now received would not be sufficient
to cover the actual price of the property causing hardship to the appellants.
Besides the fact that I am in the subsequent part of this judgment
modulating the amount which the appellants will receive, this argument
raised in my opinion is wholly fallacious because it was defendant No.1 who
was guilty of breach as he failed to complete the required formalities as
asked for by DDA and the plaintiffs were not guilty of breach and the
plaintiffs thus also cannot be prejudiced on account of rise in the prices of
property, more so when they are in possession since 1977 and that too as
per the doctrine of part performance contained in Section 53A of Transfer of
Property Act, 1882. The plaintiffs would have no advantage in retaining the
balance payment of sale price, and they were entitled to retain the same by
making its payment only after necessary permissions were obtained so that
the plaintiffs had the complete title to the property by execution and
registration of the sale deed in their favour.
19. While on this aspect of the appellants being prejudiced by not
receiving today‟s price of the property, I would like to bring on record the
argument of the counsel for the plaintiffs that the defendant no.1 had in
spite of the subject contract with the plaintiffs, entered into two further
Agreements to sell with certain persons and from which persons the
defendant no.1 has received lacs of rupees. The earlier counsel Sh. Saurabh
Tiwary who appeared for the appellants tried to wriggle away from the
situation, however, no effective reply was forthcoming , more so because at
least with respect to one other such person/prospective buyer of the
property, litigation is said to be pending in a civil court. The conduct of the
appellants/defendant no.1 is therefore such that it is not open to claim the
defence of denying the plaintiffs the discretionary relief of specific
performance.
Added to the above conduct of the appellants/defendant no.1, is
their conduct during the arguments of the present appeal. The case was
taken up first time in the „Regulars‟ in around the last week of July this year.
The earlier counsel, who appeared in the case after discussion of the broad
parameters sought to take time to take instructions from his clients. The
need for instructions arose because the Agreement to Sell was admitted and
it was also admitted that it was the defendant no.1 who was responsible for
not getting the necessary permissions from the DDA for selling of the
property which he did not obtain. The need for taking instructions was to
balance the equities because specific performance was argued to be a
discretionary relief. The earlier counsel Mr. Saurabh Tiwari, after seeking
adjournment for two weeks again sought adjournment on 17.8.2011 for
settlement. On 17.8.2011 though the matter was adjourned at request, it
was however made clear that appeal would have to be argued on the
adjourned date if there was no settlement by the next date i.e 9.9.2011. The
case was then called out on 20.9.2011 when it was found that the appellants
mid course the arguments had changed their advocate on record and who
was led by a senior counsel to argue the case. Once again repeated
requests for adjournment were made on 20.9.2011 which were declined, and
the arguments thus again commenced. Once again, during the course of
arguments, adjournment was prayed on behalf of the appellant, which was
first declined and thereafter granted because the new counsels were not
aware as to what had transpired in the court when the earlier counsel Sh.
Saurabh Tiwari had appeared for the appellants/defendant no.1 and the new
counsel wanted to discuss the modalities of adjusting equities with the
appellants and which were already discussed in the Court with the earlier
counsel. On 28.9.2011-the adjourned date, the matter was shown in the
„Admission List‟ because certain applications to bring on record the legal
heirs were filed on behalf of the appellants besides filing of an application for
adjournment. The matter was called out three times in the morning but no
one appeared on behalf of the appellants although the applications which
had come up were filed on behalf of the appellants and this specific date of
28.9.2011 was fixed for further final arguments in the matter. The matter
was then kept after lunch when one counsel appeared and sought a passover
that the senior counsel would just come. In view of the aforesaid conduct,
the matter was passed over making it clear on the next call, the matter
would have to be argued. Once again, on the next call, a pass-over was
prayed which was declined because the same had been granted for four
times since morning. It is at this stage it transpired that the son of the
original defendant no.1 was all the time from the morning sitting in the court
and quietly observing the court proceedings without causing an appearance
to be made on the first three calls when no one appeared for the appellants.
The matter was then ultimately argued on behalf of the appellants when this
court refused to grant any further accommodation. Thus, on behalf of the
appellants, the case was argued in bits and pieces on three dates of hearings
and finally on 28.9.2011 and during which period the strategy was to try and
avoid the conclusion of the arguments.
20. The issue therefore is how the relief with respect to the balance
payment should be modulated so as to balance the equities and not to cause
any injustice to either of the parties. This has to be done keeping in mind on
the one hand that the defendant no.1 was himself responsible for not getting
the permission due to his own faults, and on the other hand it has also to be
kept in mind that the appellants should still be compensated because of rise
in the value of the prices of the properties and the balance price continuing
to remain with the plaintiffs/respondents. I may at this stage add that when
the earlier counsel Mr. Saurabh Tiwari, Advocate had appeared, there was an
offer from the side of the plaintiffs to increase the sale price to five times its
original price or pay on the balance price due with a high rate of interest of
14% per annum to 18% per annum, and at one stage to ensure complete
equities are done, the counsel for the plaintiffs even raised the rate of
interest to 24% per annum simple. These alternatives were also given to the
new counsels who had appeared on 20.9.2011. On 28.9.2011, there was
only a wishy-washy response on such offers of the plaintiffs by the
appellants/defendant no.1, and in effect it was said that compromise was not
possible.
21. Though, it has not been argued on behalf of the appellants/defendant
no.1 for a claim of a higher price or other adjustments to the balance price
payable, however, considering the offer of the plaintiffs, and more so
keeping in mind the judgment of the Supreme court in the case of Nirmala
Anand Vs. Advert Corporation(P) Ltd. 2002 (8) SCC 146 I have thought
it fit not only to increase the sale price of the property but also grant a
substantially high rate of interest to alleviate the alleged loss to the
defendant No.1, although as stated above the situation which has emerged
today was mostly on account of the defendant No.1 himself. The Supreme
Court in the aforesaid case of Nirmala Anand (supra) has held that the
courts have power to increase the price of the property and balance the
equities keeping in view the facts of each individual case. Increase in price
of the property or other adjustments which are made have to be so done
keeping in view various factors as to who is the person responsible for
bringing the parties to the present stage, for what period should
compensation/increase in price be granted, what should be the rate of
interest or as to how else should the equities be balanced.
22. On this aspect, firstly, I must note that the maximum advantage at
best which the appellants/defendant no.1 can take is for increase of the
prices from 1977 to 1985 when the litigation commenced in court. After
1985, it is only because of the unjustified defence of the defendant
no.1/appellants that the case was contested otherwise the defendant
no.1/appellants would have definitely received the balance price in 1985
itself. In my opinion, taking any parameters, the price of the property would
have increased at best only by about three times from 1977 to 1985, and
therefore, the appellants/defendant no.1 would be entitled to a sum of
Rs.2,10,000/- (Rs.70,000/- multiplied by three) on the date of filing of the suit
in 1985. This also is being liberal towards the appellants because it was not
the fault of the plaintiffs that the case had come to the stage of filing of the
litigation and the suit had to be filed because the defendant no.1 turned
dishonest in 1985 by refusing to perform the contract by asking back the
possession of the suit property. On this amount of Rs.2,10,000/- the
appellants/defendant no.1 should be granted a rate of interest from the date
of filing of the suit till the date of payment by the plaintiffs, and period is a
huge period from 1985 till today i.e. approximately over 26 years. In my
opinion considering all aspects, 18% per annum simple interest can surely be
considered to be reasonable rate of return on the amount of Rs.2,10,000/-.
There were two options offered by the plaintiffs for
compensating the appellants/defendant no.1. One was to grant interest of
14% per annum simple wrenched up to 24% per annum simple on the
balance price payable from the date of filing of the suit till the date of
payment and the second was to grant interest at 14% and simultaneously
increasing the balance price which is payable.
Considering the facts and circumstances of the case, I deem it fit
that the appellant would be entitled to a sum of Rs.2,10,000/- as on the date
when the suit was filed for specific performance i.e. 13.3.1985 and thereafter
on such amount pendente lite and future interest till payment at 18% per
annum simple. I may note that the rate of interest of 18% being granted by
this court is very high considering the interest regime on the fixed deposits
as at present and in the past one decade or so. There has been a consistent
fall in the rates of interest over the last decade and a half. Also, it has to be
kept in mind that it was not necessary that the appellants if they would have
received the amount of Rs.2,10,000/- in 1985 then they would have had
consistent benefit of high rate of return on investment of Rs.2,10,000/- over
each and every year, because not only the rates of interest have varied, but
also there was a possibility that if the investment of Rs.2,10,000/- was not
wisely made by defendant no.1/appellants, they in fact besides earning a
much lesser rate of interest, may have suffered other consequences also.
23. In view of the above, I hold that the appeal is liable to be dismissed
modulating the price as stated in para 22 above. The impugned judgment
and decree stands sustained except that the appellants shall be granted a
money decree for a sum of Rs.2,10,000/- along with interest @ 18% per
annum simple from the date of filing of the suit till the date of payment. Let
the plaintiffs deposit this amount as directed by today‟s judgment in this
court within a period of three months from today and whereupon the
appellants are directed to get the necessary permissions for sale of the
property including from the DDA and thereafter to execute and register the
necessary sale deed with respect to the suit property bearing no.D-211,
Malviya Nagar Extension, now known as Saket, New Delhi situated on a plot
admeasuring 209.032 sq. mts. in favour of the plaintiffs/respondents no.1
and 2. I also clarify that as per the policy of the DDA if the property can be
converted to freehold on payment of conversion charges, and if the plaintiffs
are ready to pay these charges, the DDA will on payment of such charges
execute a Conveyance Deed instead of a Lease Deed in favour of the
plaintiffs/respondents no.1 and 2. The conversion charges will be paid
directly by the plaintiffs/respondents no.1 and 2 to the DDA on such
intimation of the amount being given to them. Appeal is accordingly
disposed of accordingly. Parties are left to bear their own costs.
OCTOBER 05, 2011 VALMIKI J. MEHTA, J.
ib
