Delhi High Court
Spring Valley Finance & Trade Ltd vs Parkash Kaur & Anr. on 17 April, 2012
Author: Pradeep Nandrajog
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: April 17, 2012
+ RFA (OS) 24/2008
SPRING VALLEY FINANCE & TRADE LTD. ..... Appellant
Represented by: Mr.C.P.Vig, Advocate.
versus
PARKASH KAUR & ANR ..... Respondents
Represented by: Mr.Ravinder Sethi,
Sr.Advocate, Mr.Raman
Kapur, Sr.Advocate
instructed by Mr.Dhiraj
Sachdeva and Mr.Rajiv
Kumar, Advocates.
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL
PRADEEP NANDRAJOG, J. (Oral)
1. At the outset, Shri Ravinder Sethi, learned senior counsel for
the respondents states that without prejudice to the stand taken
by the respondents of the suit filed being barred by limitation,
they are prepared to refund the earnest money in sum of `42
lakhs received by them from the appellant when the Agreement to
Sell, Ex.PW-1/2, was executed on August 02, 1988 together with
interest (simple) @6% per annum, reckoned from the said date till
the date when the amount would be deposited by them in the
name of the Registrar General of this Court, to be paid to the
appellant provided the appellant agrees to the said offer so that
there is no further litigation between the parties.
2. Shri C.P.Vig, learned counsel for the appellant states that the
offer is not acceptable to the appellant and that the appellant
desires a decision on merits.
3. We have thus heard learned counsel for the parties and
having concluded the hearing, proceed for judgment.
4. Relevant facts, briefly stated are, that on August 02, 1988,
Agreement to Sell, Ex.PW-2/1, was executed; as per which late
Smt.Prakash Kaur and Smt.Darshan Kaur, wives of S.Raghubir
Singh, agreed to sell 8, Tolstoy Marg, New Delhi to the appellant
for a sale consideration of `3.5 crores and received `42 lakhs
towards earnest money cum part sale consideration.
5. As per clause-3 of the Agreement to Sell, balance sale
consideration in sum of `3.08 crores had to be paid by the
appellant when sale deed was executed and vacant possession of
such portions which were capable of being physically delivered
were handed over and symbolic possession of such portions of the
property which could not be physically delivered was given. As
per clause 5, 6 and 7 of the Agreement to Sell, necessary
permissions had to be obtained from the Competent Authority
under the Urban Land (Ceiling and Regulation) Act, 1976, Section
269 (UC) of Chapter XXC of the Income Tax Act, 1961, L&DO and
under Section 230(A) of the Income Tax Act.
6. As per Clause 8, the moment the necessary permissions as
per Clauses 5 to 7 were obtained and intimation sent to the
appellant, within 90 days balance sale consideration had to be
paid by the appellant requiring the respondents to execute the
sale deed.
7. In compliance with their obligation to obtain the necessary
permissions from the various authorities, respondents submitted
necessary applications and vide Ex.D-1, letter dated September
23, 1989, informed the appellant that mutation had been effected
in the records of L&DO in their name and vide another letter dated
October 31, 1989 informed that necessary no objection had been
obtained under Chapter XXII(C) of the Income Tax Act. The letter
has not been exhibited at the trial, but we are referring to the
same as learned counsel for the appellant does not dispute the
appellant having received said letter. With respect to the
necessary permission from the Competent Authority under the
Urban Land (Ceiling and Regulations) Act, 1976, it transpired that
no permission was required, inasmuch as vide order dated April
16, 1986, the Competent Authority had already held that there
was no excess vacant land.
8. Vide letter dated September 23, 1989 Ex.D-1, respondents
informed the appellant that they were enclosing photocopies of all
the necessary sale permissions required and called upon the
appellant to pay the balance sale consideration and get the sale
deed registered. The appellant responded vide letter dated
September 22, 1989, Ex.D-2, informing that it had not received the
photocopies of the letters allegedly sent and also raised an issue
of the respondents requiring to pay all rates, cesses, taxes etc. in
relation to the property in question. The respondents responded
vide letter dated September 30, 1989, Ex.D-4, and forwarded
another set of documents to the buyer, being the necessary sale
permissions obtained by them from all the authorities, which fact
was acknowledged by the appellant vide Ex.D-5, a letter dated
October 07, 1989, written by the Advocate of the appellant to the
respondents, in which it was intimated that upon the respondents
furnishing proof of having made payments of all taxes, ground rent
etc. the necessary sale consideration would be paid.
9. There was a lull for the next six months. On April 02, 1990,
vide Ex.D-7, the respondents informed the appellant that they
have performed all their obligations under the Agreement to Sell
and once again called upon the appellant to pay the balance sale
consideration and along with the letter, enclosed documents
evidencing that ground rent, house tax etc. had been cleared upto
date.
10. The appellant did not come forward to tender the balance
sale consideration and ultimately vide letter dated February 12,
1992, Ex.D-8, the respondents intimated to the appellant that they
had cancelled the agreement and had forfeited the earnest
money.
11. The suit seeking decree for specific performance was filed
by the appellant on March 30, 1995.
12. At the forefront of the written statement was the plea of
limitation by pointing out that way back on April 02, 1990, vide
Ex.D-7, the respondents had intimated to the appellant of having
obtained all necessary permissions and also having paid all dues
with respect to the property in question and that since the
appellant did not come forward to execute the sale deed, vide
notice dated February 12, 1992 Ex.D-8, they had cancelled the
Agreement to Sell and had forfeited the earnest money-cum-part
sale consideration paid. On merits, it was pleaded that the
appellant was not ready and willing to perform its obligation under
the Agreement to Sell, inasmuch as the appellant had not paid the
balance sale consideration after the respondents had obtained,
and intimated, to the appellant the proof of having obtained all
necessary permissions and even having cleared the pending dues
with respect to the property on April 02, 1990.
13. On the pleadings of the parties, vide order dated August 21,
1997, four issues were settled and thereafter vide order dated
April 19, 2004, three more issues were settled. The seven issues
read as under:-
1. Whether the suit is barred by time?
2. Whether the suit is barred under Order 2 Rule 2 of the
Code of Civil Procedure as contended in paragraph 2 of
the Written Statement?
3. Whether the plaintiff is entitled to relief of specific
performance and for recovery of the amount as stated
in the plaint?
4. Relief.
5. Whether the suit is instituted by a duly authorized
person? OPP.
6. Whether the plaintiff was and is always ready as well as
willing to perform its part of the agreement for sale
dated 2.8.88 at the relevant time(s)?OPP.
7. Whether the plaintiff is entitled to damages as a relief
in the alternative? OPP.
14. In view of Ex.D-1 to Ex.D-7, to which we have made a brief
reference hereinabove, the learned Single Judge has returned a
finding that the respondents had proved having been in a position
to execute the sale deed, and with reference to Ex.D-8 i.e. the
letter dated February 12, 1992, written by the respondents to the
appellant, the learned Single Judge has held that the right to sue
accrued on said date. The suit being filed on March 30, 1995, has
been held to be barred by limitation.
15. With respect to the same evidence, on the issue of the
appellant being ready and willing to perform its obligation under
the agreement to sell, the obvious conclusion reached is that the
evidence establishes that the appellant was not ready and willing
to perform its part of the agreement to sell, in that, was not ready
to pay the balance sale consideration.
16. Thus, the learned Single Judge has held that the appellant
was not entitled to the relief of specific performance. As regards
the earnest money in sum of `42 lakhs, the learned Single Judge
has held that the appellant was not even entitled to a refund
thereof since the suit was filed beyond limitation.
17. The issue pertaining to the authorization of the person to
institute the suit has been decided in favour of the appellant.
18. It needs to be noted by us that probably fearing
dispossession by the builders, one Ms.Vimal Kapoor and her
children who were tenants in a portion of the annexe of the
building filed a suit for injunction on the Original Side of this Court
which was registered as Suit No.987/1989 in which, vide order
dated April 10, 1989 a sweeping ex-parte injunction was granted
restraining the respondents from even entering into an agreement
to sell the portion of the property under the tenancy of Ms.Vimal
Kapoor and her children and unfortunately the injunction
continued till when the appellant filed a suit seeking specific
performance of the agreement to sell.
19. Challenging the finding returned by the learned Single Judge
of the suit being barred by limitation, Sh.C.P.Vig, learned counsel
for the appellant contends that in view of the injunction obtained
by Ms.Vimal Kapoor and her children on April 10, 1989, the
respondents came under a legal disability to execute a sale deed
in favour of the appellant; and since the injunction continued to
operate till when the appellant filed the suit it cannot be said that
limitation commenced against the appellant.
20. The injunction related only to an insignificant fraction of the
subject property which was agreed to be sold by the respondents
to the appellant. That apart, the argument ignores the fact that
the appellant did file the suit in question notwithstanding the
injunction subsisting. Further, the injunction restrained the
respondents to enter into an agreement to sell the portion of the
property under the tenancy of Ms.Vimal Kapoor and her children,
by which date i.e. the date when the injunction was granted, the
agreement to sell, Ex.PW-1/2 had already been executed on
August 02, 1988 and thus the injunction was incapable of clouding
the right of the respondents.
21. Suffice would it be to state that on February 12, 1992,
vide Ex.D-8 the respondents cancelled the agreement to sell and
intimated appellant that they were forfeiting the earnest money
received by them. The right of the appellant came under a cloud
when said communication was sent and thus right to sue accrued
on said date. The use of the words 'right to sue' as synonymous
with the words 'cause of action' would be correct only when one
uses the word 'arises' or the word 'accrues' with it. Thus, when a
fact is born which give rise to an enforceable claim, i.e. the right is
infringed, it can be said that the cause of action accrues. This
right i.e. the right to sue accrues when a right asserted by a party
is either infringed or there is a clear and unequivocal threat to
infringe the right. The origin of a right is not contemporaneous
with the right to sue. Thus, the suit which was filed on March 30,
1995 was clearly barred by limitation.
22. That apart, from the documentary evidence noted by us in
paragraphs 7 to 10 above it is clear that the respondents had
obtained all necessary permissions and sanctions to sell the
property and it was the appellant who in spite of being called upon
to pay the balance sale consideration and get executed the sale
deed in question did not come forward to tender the balance sale
consideration and thus it can safely be said, a finding returned by
the learned Single Judge, that the appellant was not ready and
willing to perform its obligation under the agreement to sell.
23. We therefore need not decide the effect of the suit being
filed after six years and eight months after the agreement of sell
being executed and the rise in the prices of property thereby
making it inequitable to enforce the bargain against the
respondents. It is settled law that right to obtain a decree for
specific performance pertaining to an agreement to sell
immovable property is not an absolute right and even where the
purchaser is able to establish all the ingredients of the right, relief
can be denied if it is iniquitous to grant the relief.
24. Regretfully noting that the appellant has failed to avail the
benefit of a very fair offer made by the respondents as noted in
para 1 above, probably for the reason the appellant intends to
avail the remedy before the Supreme Court; and the offer made by
the respondents is intended to bring a quietus to the dispute and
hence the condition for the offer, we dismiss the appeal leaving
the parties to bear their own costs in the appeal.
25. Noting that as a condition to restrain the respondents from
selling the subject property during pendency of the appeal, as per
order dated March 18, 2010 the appellant deposited `3.08 crores
in this Court i.e. the balance sale consideration, we direct that said
deposit together with interest accrued thereon be refunded to the
appellant.
(PRADEEP NANDRAJOG)
JUDGE
(SIDDHARTH MRIDUL)
JUDGE
APRIL 17, 2012
KA
