Neha Arya vs Veena Gupta
2012 Latest Caselaw 2475 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No.91/2012

%                                                             17th April, 2012

         NEHA ARYA                                            ..... Appellant
                               Through :   Mr. Sunil K. Mittal, Adv.


                      versus


         VEENA GUPTA                                        ..... Respondent
                               Through :   Mr. Samrat K. Nigam with
                                           Mr. Kartikey Mahajan, Advs.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?                           Yes.


VALMIKI J. MEHTA, J (ORAL)

1.             In view of the fact that a new counsel appears for the appellant

the earlier counsel Mr. Sanjeev Anand, Advocate stands discharged.

2.             This appeal came up for the first time on 17.2.2012 when in

the facts of the present case interim orders were not prayed for. The order

dated 17.2.2012 also records that husband of the appellant is also an

Advocate who is present in Court. Trial Court records were summoned by

special messenger and the case was listed for arguments on 15.3.2012. On

15.3.2012 after some arguments, it was said that there is a possibility of

RFA No.91/2012                                                   Page 1 of 14
 settlement, and therefore, an adjournment was prayed.         Order dated

15.3.2012 however makes it clear that in case there is no compromise, the

appeal will be argued on the next date of hearing and no adjournment shall

be granted.

3.            Today the new counsel who appears for the appellant again

prays for adjournment. In my opinion, there are no grounds for seeking an

adjournment on the ground that the appellant seeks to further challenge in

the Supreme Court an order dismissing his application for leading

evidence, and which order on being challenged in this Court, the challenge

was declined by an order dated 17.2.2012 passed in a CM(M) petition. I

may note that the dismissal of the challenge in this Court on 17.2.2012 was

in fact a second round of litigation inasmuch as the evidence of the

appellant was closed much earlier vide an order dated 05.03.2011, and

against which a challenge was laid to this Court which was dismissed on

06.05.2011. I, therefore, do not find any reason to grant any adjournment.

Since the counsel for the appellant refuses to argue, I have heard counsel

for the respondent and after perusing the record, am proceeding to dispose

of the appeal.

4.            The challenge by means of this Regular First Appeal filed

under Section 96 of the Code of Civil Procedure, 1908 is to the impugned


RFA No.91/2012                                             Page 2 of 14
 judgment of the Trial Court dated 23.12.2011 decreeing the suit of the

respondent/plaintiff for specific performance of an agreement to sell dated

5.12.2008 pertaining to suit property bearing no.20/5, First Floor, West

Patel Nagar, New Delhi-110008.

5.           The facts of the case are that the respondent/plaintiff filed the

subject suit for specific performance relying on the agreement to sell/

Memorandum of Understanding dated 5.12.2008 with respect to the suit

property and under which the suit property was agreed to be sold for a

consideration of `10,00,000/- of which a sum of `7,50,000/-(i.e.75% of the

price) was paid on the date of entering into the agreement to sell. The

balance amount of `2,50,000/- was payable at the time of execution of the

sale documents. It was also agreed that the appellant/defendant would

hand over physical vacant possession of the suit property within one week

of signing of the agreement. On entering into the agreement to sell dated

5.12.2008, the original title documents of the suit property were delivered

to the respondent/plaintiff.    The respondent/plaintiff pleaded that the

appellant/defendant in spite of requests, avoided to execute the sale

documents.    It was pleaded that a bank draft for a sum of `2,50,000/- was

prepared in the name of the appellant/defendant on 11.8.2009 , and the

respondent/plaintiff wrote a letter to the appellant/defendant to accept the

RFA No.91/2012                                                Page 3 of 14
 demand draft by a registered post dated 13.8.2009. The husband of the

appellant/defendant and who is an Advocate, as already stated above, gave

a telephonic call to the husband of the respondent/plaintiff and agreed to

meet the respondent/plaintiff in the office of the sub-Registrar on 20.8.2009

at 10.00 A.M. for execution of the sale documents, however, the

appellant/defendant failed to appear resulting in filing of the subject suit for

specific performance.

6.           The appellant/defendant appeared and contested the suit.

Execution of the agreement dated 5.12.2008 was admitted by the

appellant/defendant. It was pleaded that the respondent/plaintiff was guilty

of breach of contract as despite repeated requests and reminders the balance

amount was not paid and therefore amount paid under the agreement to sell

was forfeited. It was, therefore, prayed that the suit be dismissed.

7.           After completion of pleadings, Trial Court framed the

following issues:

         "1. Whether the plaint has been properly verified as per the
             provisions of law? OPP.

         2. Whether the plaintiff is entitled for a decree of specific
            performance as prayed in the plaint? OPP

         3. Whether the plaintiff is entitled for a decree of permanent
            injunction as prayed in the plaint? OPP

         4. Relief."
RFA No.91/2012                                                 Page 4 of 14
 8.          The appellant/defendant failed to fully cross-examine the

witness of the respondent/plaintiff namely Sh. D.P.Arya, husband of the

respondent/plaintiff, appeared as PW1 and thus after granting a number of

opportunities, the right of cross-examination was closed.                  The

appellant/defendant also did not lead any evidence. As already stated

hereinbefore, his right of leading evidence was also closed and the order

closing the right of the appellant/defendant to lead evidence was challenged

in this Court in CM(M) No.543/2011, and which petition was dismissed by

a learned single Judge of this Court on 6.5.2011. A Review Petition was

also filed and which was also dismissed on 17.2.2012.

9.          Counsel for the appellant/defendant states that as on date there

is no further challenge laid to the order dated 6.5.2011 passed in CM(M)

No.543/2011.

10.         Trial Court has decided the relevant issues being issue nos. 2

and 3 in paragraphs 14 to 23 of the impugned judgment and these paras

read as under:-

          "14.      ISSUE NOS. 2 AND 3:-

                  2. Whether the plaintiff is entitled for a decree of
                  specific performance as prayed in the plaint? OPP

                  3. Whether the plaintiff is entitled for a decree of
                  permanent injunction as prayed in the plaint? OPP
RFA No.91/2012                                              Page 5 of 14
          15.       Onus of proof of both these issues lies upon the
         plaintiff and since both these issues are interconnected, I
         deem it appropriate to decide both these issues together.

         16.        In support of the contentions of the plaintiff, PW1
         Sh.D.P.Arya, the husband of the plaintiff has categorically
         stated that he is well conversant with the facts of the present
         case as he has been actively involved in the talks during the
         transaction with the defendant and he was having dealings
         with the husband of the defendant on behalf of his wife. He
         has filed his affidavit and the same is proved on record as
         Ex.PW1/8. This witness has categorically stated that the
         plaintiff had entered into an „Agreement to Sell‟ (Memo of
         Understanding) dated 5.12.2008, in respect of the property
         bearing no. 20/5, First Floor, West Patel Nagar, New Delhi-
         110008, for a total sale consideration of `10 lakhs, out of
         which, a sum of `7.5 lakhs was paid to the plaintiff on the
         same day and it was agreed between the parties that the
         remaining amount of `2.5 lakhs shall be paid to the plaintiff
         at the time of execution of the sale documents. Execution of
         Agreement to Sell (Memorandum of Understanding) is not
         in dispute. It is further stated by this witness that the
         original documents (including the original chain of
         documents showing the title of respective owners) were
         delivered to the plaintiff on the date of execution of
         „Memorandum of Understanding‟ and the possession of the
         suit property was to be delivered within a period of one
         week, but, despite repeated demands, the defendant refused
         to hand over the possession of the property and despite
         repeated requests, reminders and service of demand notice,
         the defendant has not executed the sale documents. It is
         further stated that on 11.8.2009, the plaintiff again tried to
         contact the defendant by writing a letter but despite service
         of the said letter, the defendant has failed to execute the sale
         documents. The letter dated 11.8.2009 has been proved on
         record as Ex.PW1/3 and the speed post and courier receipts
         have been proved as Ex.PW1/5 and Ex.PW1/6 respectively.
         It is further stated by this witness that he plaintiff even got
         prepared a bank draft of `2.5 lakhs for the remaining sale
RFA No.91/2012                                                Page 6 of 14
          consideration and the defendant agreed for execution of the
         sale documents but despite her promises, she failed to
         appear at the office of the Sub Registrar, Janak Puri to
         execute the sale documents. The plaintiff has also filed on
         record, the receipt of her presence at the office of the Sub
         Registrar, Janak Puri as Ex.PW1/7 and the original stamp
         papers and draft sale deed as Ex.PW1/8. This witness has
         further deposed that on 22.8.2009, he got a public notice
         published in two daily newspapers in respect of the
         Agreement to Sell (Memorandum of Understanding). These
         two newspapers have been placed on record as Ex.PW1/9
         and Ex.PW1/10. This witness has been cross-examined at
         length but no incriminating evidence has come on record to
         discard his testimony. The execution of the „Memorandum
         of Understanding‟ Ex.PW1/1 is not in dispute. No evidence
         has been led by the defendant to rebut the evidence of the
         plaintiff despite ample opportunities.

         17.       During the final arguments, the main contention of
         learned Counsel for the defendant has remained that the sale
         consideration of `2.5 lakhs was to be paid by the plaintiff to
         the defendant within a period of one week wand thereafter,
         possession of the suit property was to be handed over by the
         defendant. Execution of „Memorandum of Understanding‟
         Ex.PW1/2 has been duly admitted by the defendant and his
         Counsel. Learned counsel for the defendant has submitted
         that the time was the essence of the „Memorandum of
         Understanding‟ and, therefore, the suit of the plaintiff be
         dismissed. The relevant portion of the „Memorandum of
         Understanding‟, Ex.PW1/2, is reproduced below:-
              "Whereas the first party hereby agreed to sell the said
              flat to the Second Party. The total amount of the said
              flat is fixed between the parties is comes to `10 lacs.
              In which the first party have received a sum of `7.5
              lac from the second party.
              And Whereas the balance amount of `2.5 lac will be
              paid by the second party to the first party at the time
              of registration of the said flat in favour of the second
              party or his nominee/s.
              And Whereas the first party hereby agreed that she
RFA No.91/2012                                              Page 7 of 14
                  will deliver the peaceful and vacant possession of the
                 said flat within one week from the date of
                 commencement of this MOU.
                 And Whereas the first party hereby deliver the
                 original papers relating to the said to the second arty
                 with her own free will."

         18.      Perusal of the above contents clearly indicates that
         there was no time frame prescribed for registration of the
         sale documents. However, it was agreed between the parties
         that the defendant shall hand over the vacant and peaceful
         possession of the suit property within one week of execution
         of the „Memorandum of Understanding‟ Ex.PW1/2.

         19.      It has been held by the Hon‟ble Supreme Court of
         India in case titled as Gurdial Kaur (D) through LRs. Vs.
         Piara Singh (D) through LRs as follows:
              "...............................................
              13. A suit for specific performance of contract
              provides for a discretionary remedy. The Court in
              terms of Section 20 of the said Act may for sufficient
              and cogent reasons refuse to grant a decree for
              specific performance of contract. In a case of this
              nature, the Court essentially would be concerned with
              the identity of the land which was the subject matter
              of agreement. Like any other suit, the Court in terms
              of Order 7 Rule 7 of the Code of Civil Procedure may,
              however, take into consideration the subsequent
              events including the change in the revenue survey
              numbers in respect of a particular land. In other
              words, if the land in suit remains the same which was
              the subject manner of an Agreement of Sale, a decree
              for specific performance can be granted.
              .............................................

19..........................................

The rigours of Section 16(c) of the Act, however, are not such which would for all intent and purport to be strictly construed. Indisputably, it is necessary to make averments in regard to the readiness and

willingness as is required under Section 16(c) of the Act in terms of Form 47 appended to the Code of Civil Procedure."

20. It is also held by The Hon‟ble High Court of Punjab and Haryana in case titled as Shri Ram vs. Puran Mal, reported as (2000) 125 PLR 16 as under:

"9. No doubt, the relief of specific performance is discretionary, but discretion has to be exercised according to the judicial principles. It is a case of agreement of sale immovable property. As per Explanation (i) of Section 10, the Court has to presume unless and until the contrary is proved, that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money.

........................................ Also my attention was drawn to Section 20 of the Act which shows that the jurisdiction of the civil Court to grant decree for specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of Appeal. Explanation I added to Section 20 also makes it abundantly clear that mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of Clause (a) or hardship within the meaning of Clause

(b) of Sub-section (2) of Section 20.

........................................."

21. It is also held by the Hon‟ble Supreme Court of India in case titled as Prakash ChandraVs. Angadial and Ors., reported as AIR 1979 SC 1241, as under:

"8. The next question is whether the relief for specific performance being a discretionary relief granted in equity should be refused to the appellant.

9. The ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief. In the present case the conduct of the appellant has not been such as to disentitle him to the relief of specific performance. He has acted fairly throughout, and there is nothing to show that by any act of omission or commission he encouraged Mohsinali and Qurban Hussain to enter into the sale with the first and second respondents. There is no evidence that the appellant secured an unfair advantage over Mnhsia and Qurban Hussain when he entered into the agreement. Nor is there anything to prove that the performance of the contract would involve the respondents in some hardship which they did not foreses. In our opinion, there is no reason why the appellant should not be granted be relief of specific performance."

22. Similar view is taken by The Hon‟ble Supreme Court of India in case titled as P.D'souza Vs. Shondrilo Naidu, 2005 (5) ALLMR(SC) 15.

23. In view of the legal proposition, as discussed above, and the facts and circumstances of the present case, these issues are decided in favour of the plaintiff and against the defendant." (underlining added)

11. A reading of the aforesaid paras shows that the Trial Court has

referred to the agreement entered into between the parties, which was

proved and exhibited as Ex.PW1/2. The trial Court also adverts to the

factum that 3/4th of the sale consideration of `7,50,000/- was paid pursuant

to the agreement to sell. There is further noting of the fact that a letter was

sent by the respondent/plaintiff dated 11.8.2009 showing the preparation of

the bank draft of `2,50,000/- being the balance consideration and request to

the appellant/defendant to execute the sale documents which was proved as

Ex.PW1/3, and the speed post and courier receipts thereof were exhibited

and proved as Ex.PW1/5 and Ex.PW1/6. The presence of the

respondent/plaintiff before sub-Registrar at Janakpuri was proved by means

of a receipt before the sub-Registrar as Ex.PW1/7. The original stamp

papers purchased for the sale deed and the draft sale deed were proved and

exhibited as Ex.PW1/8. An important fact noted is that the original title

deeds of the suit property were handed over by the appellant/defendant to

the respondent/plaintiff at the time of entering into of the Agreement to

Sell.

12. In my opinion, once the agreement between the parties is

admitted, and the respondent/plaintiff is proved to have paid a very

substantial amount, i.e. 75% of the sale consideration, and also has with

him possession of the original title documents of the property, the Trial

Court rightly decreed the suit for specific performance inasmuch as

readiness and willingness was proved by preparation of the bank draft of

sale consideration of `2,50,000/- and with respect to which notice dated

11.8.2009, Ex.PW1/3 was given to the appellant/defendant.

13. I may note that the Trial Court has rightly arrived at a finding

that there is nothing in the agreement, Ex.PW1/2 dated 5.12.2008 that the

balance sale consideration of `2,50,000/- has to be paid by the

respondent/plaintiff to the appellant/defendant within one week of the

entering into the MoU, and, on the contrary the MoU recites the fact that

the appellant/defendant had to hand over the possession within one week

which he failed to do.

14. The Supreme Court in the recent judgment of Mrs.

Saradamani Kandappan vs. Mrs. S. Rajalakshmi & Ors., 2011 (12) SCC

18 has held that once substantial consideration is paid under an agreement

to sell, ordinarily, Courts can rightly exercise the discretion to grant

specific performance. Similar is the view of the Supreme Court in the

judgment in the case of Nirmala Anand Vs. Advent Corporation (P) Ltd.

(2002) 8 SCC 146 and in which judgment the Supreme Court holds that

once substantial consideration is paid and the seller is found guilty of

breach the Court acts rightly when it exercises discretion to decree the suit

for specific performance. Considering the fact that in this case 75% of the

sale consideration was paid, and the balance sale consideration was not

received by the appellant/defendant due to his own refusal, I do not find

any fault in the impugned judgment decreeing the suit for specific

performance. However, in order to balance the equities, in terms of the

judgment of the Supreme Court in the case of the Nirmala Anand (supra),

I direct that the respondent/plaintiff in addition to `2,50,000/- towards

balance consideration, will also be liable to pay interest at the rate of 18%

per annum from 5.12.2008 till the passing of today‟s judgment, and which

balance sale consideration be deposited in the Trial Court within a period

of two months from today. On deposit of the balance sale consideration,

Trial Court will take necessary steps, on the execution petition being filed,

for execution of the sale documents of the suit property in favour of the

respondent/plaintiff. Of course, at the first blush interest at 18% per annum

against the respondent/plaintiff may be seen as excessive as per the today‟s

scenario where rates of interest have fallen down but I am awarding the

high rate of interest considering that the transaction pertains to immovable

property and the payment of interest is to partly compensate the

appellant/defendant, for the balance price payable with respect to the suit

property. I have given the benefit of interest to the appellant/defendant,

although this issue has not been argued before me, only as a matter of

equity and justice so as to reasonably compensate the appellant/defendant,

although, the appellant/defendant is himself guilty of bringing the position

to the present from pasts.

15. In view of the above, there is no merit in the appeal which is

accordingly dismissed, leaving the parties to bear their own costs.

VALMIKI J. MEHTA, J.

APRIL 17, 2012 ak