Delhi High Court

Neha Khalxo vs Saramma Kuriakose on 20 January, 2012

Author: J.R. Midha

*         IN THE HIGH COURT OF DELHI AT NEW DELHI

                      +      RFA No.498/2007

     %                      Date of decision : 20th January, 2012

         NEHA KHALXO                            ..... Appellant
                          Through : Mr. N.N. Aggarwal,
                                    Mr. Ashish Mohan and
                                    Mr. Rohit Gandhi, Advs.

                   versus

         SARAMMA KURIAKOSE                 ..... Respondent
                      Through : Mr. Manoj V. George and
                                Ms. Shilpa M. George, Advs.

CORAM :-
THE HON'BLE MR. JUSTICE J.R. MIDHA

                              JUDGMENT

1. The appellant has challenged the judgment and decree

passed by the learned Trial Court whereby her suit for specific

performance has been dismissed.

2. The appellant instituted a suit for specific performance

and permanent injunction against the defendant in respect of

property bearing plot No.A-32 & 33 measuring 200 sq. yds. out

of Khasra No.1678, Village Aya Nagar, Tehsil Mehrauli, New

Delhi, hereinafter referred to as "the suit property". For

convenience, the appellant and the respondents are referred

by their ranks in the suit as "plaintiff" and "defendant"

respectively.

3. On 9th September, 2004, the defendant agreed to sell the

suit property to the plaintiff for total sale consideration of

`13,00,000/- out of which the plaintiff paid earnest money of

`1,00,000/- to the defendant at the time of the sale agreement

and agreed to pay the remaining sale consideration of

`12,00,000/- within 30 days.

4. Vide legal notice dated 26th October, 2004, the defendant

notified the plaintiff that the plaintiff had failed to make the

payment of `12,00,000/- within 30 days of the agreement

which expired on 8th October, 2004. The defendant further

notified that she was still ready and willing to perform the

agreement and, therefore, she granted 15 days extension to

the plaintiff to make the payment of the balance sale

consideration of `12,00,000/- on or before 15th November,

2004. The defendant notified the plaintiff to remain present in

the Office of Sub-Registrar on 15th November, 2004 failing

which the agreement would stand cancelled and the earnest

money of `1,00,000/- would stand forfeited.

5. Vide reply dated 8th November, 2004, the plaintiff stated

that she had approached the defendant before the expiry of 30

days and repeatedly thereafter along with the balance sale

consideration of `12,00,000/- but the defendant delayed the

matter on the pretext that the sale permission from the

concerned authorities for execution and registration of the sale

deed could not been obtained by her.

6. On 23rd May, 2005, the plaintiff instituted the suit for

specific performance and permanent injunction against the

defendant. The defendant contested the suit on various

grounds inter alia : (i) The defendant had purchased the suit

property from Vijay Kumar on the basis of sale agreement

dated 31st December, 1992; all the documents relating to the

title of the defendant in respect of the suit property were

shown by the defendant to the plaintiff and the photocopies

thereof were given to the plaintiff much before the execution

of the sale agreement dated 9th September, 2004 and the

plaintiff executed the sale agreement after satisfying herself

with respect to the same; and the defendant agreed to sell the

suit property to the plaintiff on „as it is basis‟ i.e. whatever

documents the defendant had from the previous owner, same

set of documents would be executed in favour of the plaintiff

and the original documents as held by the defendant would be

handed over to the plaintiff. The suit property was agreed to

be sold on the basis of sale agreement, General Power of

Attorney, receipt, etc. and no sale permission was agreed to be

obtained by the defendant in respect of the suit property; (ii)

The plaintiff never approached the defendant within the period

of 30 days stipulated under the agreement dated 9th

September, 2004 as alleged by the plaintiff; (iii) The plaintiff

was never ready and willing to perform her part of the contract

as she could not arrange the balance sale consideration of

`12,00,000/-; and (iv) The plaintiff committed breach of the

sale agreement by defaulting in making the payment of

balance sale consideration of `12,00,000/- to the defendant in

terms of the sale agreement within 30 days of the sale

agreement or within even the extended period in terms of the

legal notice dated 26th October, 2004 and, therefore, the sale

consideration stood forfeited.

7. The plaintiff examined one witness to prove her case,

namely, Mr. Jayant Ghadia, PW-1 who appeared as a special

attorney of the plaintiff. PW-1 reiterated the plaintiff‟s case in

the plaint and proved the sale agreement as Ex.PW1/1, Special

Power of Attorney as Ex.PW1/2, legal notice dated 26th

October, 2004 as Ex.PW1/3 and the reply dated 8th November,

2004 as Ex.PW1/4. PW-1 had deposed that the suit property

was originally owned by Vijay Kumar who sold the same to the

defendant vide sale agreement dated 31 st December, 1992.

PW-1 deposed that he approached the defendant before the

expiry of 30 days of the sale agreement and repeatedly

thereafter along with the balance sale consideration of

`12,00,000/- but the defendant kept on delaying the matter on

the pretext that the sale permission for execution of the sale

deed could not be obtained. PW-1, in the cross-examination,

stated that he was engaged in real estate business. He

however, denied the knowledge of the fact that no registration

for transfer was permissible in respect of the suit property. No

proof of the availability of `12,00,000/- with the plaintiff was

placed on record by the plaintiff. Specific suggestion was

given to PW-1 that the plaintiff was not having `12,00,000/- in

her account and the same was never tendered to the

defendant and the cheque was not placed on record because

no cheque was drawn or tendered to the defendant within the

stipulated time. PW-1 chose not to place on record the cheque

or the proof of availability of `12,00,000/- in her account.

8. The defendant appeared in the witness box as DW-1 and

deposed the defence as set up by her in the written statement.

DW-1 deposed that she had agreed to sell the suit property on

„as it is basis‟ i.e. whatever documents the defendant had from

the previous owner, the same type of documents would be

executed in favour of the plaintiff. All the documents, on the

basis of which the defendant had become the owner of the suit

property, were shown to the plaintiff and the photocopies were

given to the plaintiff. The plaintiff had satisfied herself about

the documents before execution of the sale agreement. DW-1

further deposed that the plaintiff could not arrange balance

sale consideration of `12,00,000/- and sought more time and,

therefore, the defendant issued a notice dated 26th October,

2004 granting extension of 15 days to the plaintiff. The

defendant forfeited the earnest money of `1,00,000/- on

account of the failure of the plaintiff to pay the balance sale

consideration of `12,00,000/- within the stipulated time. In

cross-examination, DW-1 deposed that the NOC was necessary

for registration of the sale deed but since the suit property was

agreed to be sold through sale agreement/General Power of

Attorney, no NOC was required and, therefore, the defendant

did not make any attempt to obtain the NOC. DW-1 denied

that the defendant offered balance sale consideration of

`12,00,000/- to her at any stage.

9. The learned Trial Court dismissed the suit on the ground

that the plaintiff failed to prove that she was always ready and

willing to perform her part of contract; she was having

`12,00,000/- ready with her; and that she offered the same to

the defendant. The plaintiff was required to make the

payment of `12,00,000/- to defendant within 30 days of the

agreement which expired on 8th October, 2004. Since the

defendant disputed the plaintiff‟s claim that she approached

the defendant before expiry of 30 days along with a cheque of

`12,00,000/-, the plaintiff was required to place on record the

cheque for `12,00,000/- offered by her and the statement of

her saving bank account in which she had `12,00,000/-

available with her before the expiry of 30 days of the sale

agreement. In the absence of any evidence having been

placed on record, the learned Trial Court held that the plaintiff

did not have the balance sale consideration of `12,00,000/-

available with her. The learned Trial Court also drew adverse

inference against the plaintiff for not entering into the witness

box. The learned Trial Court also noted that the defendant was

first to issue legal notice to the plaintiff on 26th October, 2004

notifying that the plaintiff has committed breach of the sale

agreement by failing to make the payment of balance sale

consideration of `12,00,000/- within 30 days of the sale

agreement and granted further 15 days time to the plaintiff to

make the payment of balance sale consideration of

`12,00,000/-.

10. The plaintiff has challenged the impugned judgment on

the ground that the plaintiff was always ready and willing to

perform her part of contract and had `12,00,000/- available

with her which she offered to the defendant before the expiry

of 30 days and repeatedly thereafter; the defendant

committed the breach of the sale agreement by not obtaining

the sale permission for execution of the sale deed from the

concerned authorities; and no adverse inference can be drawn

against the plaintiff for failing to appear in the witness box.

The learned counsel for the plaintiff submitted that it was not

necessary for the plaintiff to place the proof of availability of

`12,00,000/- on record and the statement of PW-1 that the

plaintiff had `12,00,000/- available with her was sufficient to

prove the availability of `12,00,000/- with the plaintiff.

11. The learned counsel for the defendant submitted that the

plaintiff committed breach of the agreement by failing to make

the payment of balance sale consideration by 8th October,

2004 or within the extended period 15th November, 2004; the

balance sale consideration of `12,00,000/- was not available

with the plaintiff; the suit property is situated in an

unauthorized colony and the execution of the sale

agreement/General Power of Attorney and receipt were the

agreed mode of transfer and, therefore, the plea of obtaining

the NOC set up by the plaintiff is false and dishonest; and the

plaintiff did not appear in the witness box. The case before the

learned Trial Court as well as this Court was prosecuted by the

attorney who being a property dealer, was well aware of the

mode of transfer of the properties in the area in which the suit

property is situated. It was further submitted that the plaintiff

has made false statement on oath and is liable to be

prosecuted for perjury.

12. This Court vide order dated 6th September, 2011 directed

the plaintiff as well as her attorney to remain present in Court.

On 12th September, 2011, the plaintiff as well as her attorney

were examined on oath and their statement was recorded

under Section 165 of the Indian Evidence Act and they were

directed to produce the copies of their bank statements as well

as Income Tax Returns from the period 2004 onwards up to

date. On 14th September, 2011, the plaintiff placed on record

the copy of their passbook for the period 25th May, 2009

onwards which is not relevant. The plaintiff was given further

opportunity to produce the relevant documents on 19th

September, 2011 when the plaintiff made a statement that she

could not obtain the statement of her bank account for the

period 2004 to 24th May, 2009. The plaintiff did not produce

the statement of account for the relevant period despite

number of opportunities granted.

13. On a careful consideration of the rival contentions of both

the parties, record of the learned Trial Court, statement of the

plaintiff recorded by this Court on 12th September, 2011 and

the documents produced by the plaintiff on 14th September,

2011, this Court is of the considered opinion that the plaintiff

has miserably failed to prove that she had the availability of

`12,00,000/- with her on 8th October, 2004. The plaintiff

herself did not enter into the witness box before the Trial

Court. Her attorney who appeared as PW-1 made a false

statement on oath that the plaintiff went to the defendant

along with the cheque for `12,00,000/- before the expiry of 30

days of the agreement dated 20th September, 2004 and many

times thereafter. The plaintiff neither produced the statement

of her bank account before the learned Trial Court or even

before this Court. DW-1 deposed that the plaintiff told her that

she could not arrange balance amount of `12,00,000/- as she

has no specific and specified sources of income and sought

more time to arrange for the same. A specific suggestion was

given to PW-1 in cross-examination that the plaintiff was not

having `12,00,000/- in her account and she never tendered the

same and, therefore, the same has not been placed on record.

In that view of the matter, the onus was on the plaintiff to

place on record the cheque alleged to have been tendered by

her to the defendant as well as the statement of account from

which the said cheque was drawn. However, the plaintiff failed

to discharge the onus and did not produce the cheque for

`12,00,000/- alleged to have been tendered by her as well as

the statement of account from which the alleged cheque was

drawn. An adverse presumption can safely be drawn under

Section 114 Illustration (g) of the Indian Evidence Act that the

plaintiff was not having `12,00,000/- in her account and she

committed breach of the sale agreement by failing to make the

payment of `12,00,000/- to the defendant within the stipulated

period. The version and stand of the defendant appears to be

more probable. The findings of the learned Trial Court that the

plaintiff did not have the balance sale consideration of

`12,00,000/- are, therefore, correct. With respect to the

second contention of the plaintiff that the defendant has

committed breach of agreement by failing to obtain the sale

permission from the concerned authorities, it is clear from the

conduct of the parties that the parties had agreed to complete

the transaction by means of a sale agreement/general power

of attorney and the plaintiff raised a frivolous plea of NOC. The

suit property is situated in an unauthorized colony in which the

sale transactions are completed by means of sale agreement,

General Power of Attorney and receipt. The defendant had the

title on the basis of sale agreement from the previous owner

Vijay Kumar, documents regarding which she showed to the

plaintiff who agreed for execution of similar set of documents

in favour of the plaintiff. PW-1 is a property dealer and well

aware of the nature of documents executed for sale of the suit

property. The deal appears to be speculative in nature as the

plaintiff was without means to purchase the same. PW-1 has

made false statement on oath before the learned Trial Court as

well as before this Court in this regard.

14. This case is squarely covered by the principles of law laid

down by the Supreme Court in the following cases:-

14.1 His Holiness Acharya Swami Ganesh Dassji v. Sita

Ram Thapar, (1996) 4 SCC 526 - The Supreme Court held

as under:-

"2. There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to perform his part of the contract, the conduct has to be properly scrutinised. There is no documentary proof that the plaintiff had ever funds to pay the balance of consideration. Assuming that he had the funds, he has to prove his willingness to perform his part of the contract. According to the terms of the agreement, the plaintiff was to supply the draft sale deed to the defendant within 7 days of the execution of the agreement, i.e., by 27.2.1975. The draft sale deed was not returned after being duly approved by the petitioner. The factum of readiness and willingness to perform plaintiffs part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. The facts of this case would amply demonstrate that the petitioner/plaintiff

was not ready nor had the capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bide for the time which disentitles him as time is of the essence of the contract."

(Emphasis supplied)

14.2 N.P. Thirugnanam v. R. Jagan Mohan Rao, AIR 1996

SC 116 - The Supreme Court held that to adjudge whether the

plaintiff was ready and willing to perform his part of the

contract, the Court must take into consideration the conduct of

the plaintiff prior and subsequent to the filing of the suit along

with other attending circumstances. The amount of balance

sale consideration must be proved to be available with the

purchaser right from the date of execution till the date of

decree. The Court upheld the dismissal of the suit for specific

performance on various grounds inter alia that the plaintiff was

dabbing in real estate business without means to purchase the

suit property and the very contract was speculative in nature.

The relevant findings are reproduced hereunder:-

"5. ...Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance

is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was always ready and willing to perform his part of the contract."

(Emphasis supplied)

15. Conduct of the plaintiff

15.1 In Dalip Singh v. State of U.P., (2010) 2 SCC 114,

the Supreme Court noted as under:-

"1. For many centuries, Indian society cherished two basic values of life i.e. „Satya' (truth) and „Ahimsa' (non-violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justice-delivery system which was in vogue in pre-Independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post-Independence period has seen drastic changes in our value system. The materialism

has over-shadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings. In the last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final."

15.2 In Padmawati and Ors. v. Harijan Sewak Sangh, 154

(2008) DLT 411, this Court noted as under:

"6. The case at hand shows that frivolous defences and frivolous litigation is a calculated venture involving no risks situation. You have only to engage professionals to prolong the litigation so as to deprive the rights of a person and enjoy the fruits of illegalities. I consider that in such cases where Court finds that using the Courts as a tool, a litigant has perpetuated illegalities or has perpetuated an illegal possession, the Court must impose costs on such litigants which should be equal to the benefits derived by the litigant and harm and deprivation suffered by the rightful person so as to check the frivolous litigation and prevent the people from reaping a rich harvest of illegal acts through the Courts. One of the aim of every judicial system has to be to discourage unjust enrichment using Courts as a tool. The costs imposed by the Courts must in all cases should be the real costs equal to deprivation suffered by the rightful person."

"9. Before parting with this case, I consider it necessary to pen down that one of the reasons for over-flowing of court dockets is the frivolous litigation in which the Courts

are engaged by the litigants and which is dragged as long as possible. Even if these litigants ultimately loose the lis, they become the real victors and have the last laugh. This class of people who perpetuate illegal acts by obtaining stays and injunctions from the Courts must be made to pay the sufferer not only the entire illegal gains made by them as costs to the person deprived of his right and also must be burdened with exemplary costs. Faith of people in judiciary can only be sustained if the persons on the right side of the law do not feel that even if they keep fighting for justice in the Court and ultimately win, they would turn out to be a fool since winning a case after 20 or 30 years would make wrong doer as real gainer, who had reaped the benefits for all those years. Thus, it becomes the duty of the Courts to see that such wrong doers are discouraged at every step and even if they succeed in prolonging the litigation due to their money power, ultimately they must suffer the costs of all these years long litigation. Despite settled legal positions, the obvious wrong doers, use one after another tier of judicial review mechanism as a gamble, knowing fully well that dice is always loaded in their favour, since even if they lose, the time gained is the real gain. This situation must be redeemed by the Courts."