Gulshan Kumar & Ors vs Sat Narain Tulsian (Deceased) ...
2013 Latest Caselaw 5649 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                   Date of decision: 6th December, 2013

+                                RFA 388/2011

       GULSHAN KUMAR & ORS                       ..... Appellants
                  Through: Mr. G.L. Rawal, Sr. Adv. with Mr.
                           Kuljeet Rawal, Amarjeet Singh and
                           Mr. Jagjit Singh, Advocates.

                                Versus

       SAT NARAIN TULSIAN (DECEASED)
       THROUGH LRS.                             ..... Respondents

Through: Mr. Ashutosh Dubey, Adv. for R-1, 2 & 4.

Mr. Jayant K. Mehta, Mr. Sukant Vikram and Mr. Anuj Kapoor, Advs for R-3.

Mr. Madan Gera & Mr. Aman Vachher for subsequent purchaser.

CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. The appeal impugns the judgment and decree (dated 30th April, 2011

of the Court of the Addl. District Judge (Central-07) Delhi in Suit

No.383/2010/1980 filed by the four appellants against Shri Sat Narain

Tulsian being the predecessor of the respondents no.1 to 6 in this appeal) of

dismissal of the suit for specific performance of a contract for sale of

property No.H-3/11, Model Town, Delhi constructed over land ad

measuring 1250 sq. yds.

2. Notice of the appeal was issued and though the appeal was

accompanied with an application for interim relief but the same was not

pressed. The Trial Court record was requisitioned. The appellants/plaintiffs

however within about ten days moved another application for interim relief

to restrain the respondents/defendants from demolishing the subject

property. The said application came up before this Court on 11th August,

2011, in order of which date it was observed that the senior counsel for the

appellants/plaintiffs was heard at length on the application for interim relief

on the date when notice of the appeal was issued but upon the Court being

not inclined to grant any interim relief had not pressed the application. The

second application for interim relief was thus held to be in abuse of the

process of the Court. The application was thus dismissed. The

respondents/defendants on that date also informed that the subject property

had already been sold by them. The respondent/defendant no.1Shri Raj

Kumar Tulsian died during the pendency of this appeal and his legal heirs

were substituted vide order dated 9th November, 2011. The

appellants/plaintiffs also sought impleadment of Smt. Veena Gupta to whom

the respondents/defendants no.1 to 6 had sold the property and the said

application was also allowed on 9th November, 2011 and the said Smt.

Veena Gupta impleaded as a respondent to the appeal (respondent no.9 as

per the amended memo of parties). On the same date i.e. 9th November, 2011

the appeal was also admitted for hearing. Hearing of the appeal was

expedited as some of the parties thereto are senior citizens. The senior

counsel for the appellants/plaintiffs and the counsel for the

respondent/defendant no.3 have been heard. The counsel for the subsequent

purchaser Smt. Veena Gupta and the counsel for the respondent/defendant

no.3 have also filed written submissions/propositions of law which have

been perused.

3. The appellants/plaintiffs on 12th May, 1980 instituted the suit from

which this appeal arises, pleading:-

(a) that the defendant Shri Sat Naraian Tulsi was the owner of the

property;

(b) that Shri Bhagat Ram, being father of the present

appellants/plaintiffs and husband of the then plaintiff no.5 along

with the appellant/plaintiff no.1 Shri Gulshan Kumar intended

to purchase the said property and negotiations were going on

which matured on 13th April, 1978 when the defendant agreed

to make sale of the said property to the said Shri Bhagat Ram

and appellant/plaintiff no.1 for total consideration of

Rs.4,50,000/-;

(c) that the terms orally settled were that the defendant was to take

necessary permission from the Competent Authority under the

Urban Land (Ceiling and Regulation) Act, 1976 (ULCR) and to

obtain Clearance Certificate from the Income Tax Department

and to otherwise remove impediments to make himself fit to

execute the Sale Deed for the purpose of passing appropriate

title to the purchasers and to execute deed and get the same

registered within a period of six months computed from 13th

April, 1978; it was assured that the property was free from all

encumberances; that the appellants/plaintiffs were to meet the

stamp registration charges; the actual and physical possession

was to be delivered at the time of execution and registration of

the Sale Deed; that if the defendant failed, neglected or refused

to transfer the property with its clean title, the

appellants/plaintiffs would be entitled to get the property

transferred by an action of suit for specific performance and no

amount of compensation would compensate in any

circumstances; that if the purchasers refused or neglected in any

manner or did not comply with their part of the contract, a sum

of Rs.25,000/- shall stand forfeited;

(d) that earnest money to the tune of Rs.25,000/- as advance part

payment as agreed was paid to the defendant by cheque drawn

by M/s. Bhagat Ram Gulshan Kumar in which the said Shri

Bhagat Ram and the appellant/plaintiff no.1 Gulshan Kumar

were partners; the balance Rs.4,25,000/- was payable at the

time of registration of the Sale Deed;

(e) that the defendant executed a receipt for Rs.25,000/- admitting

therein the agreement to make sale of the said property and to

execute the Sale Deed within the period of six months;

(f) that Shri Bhagat Ram died on 2nd April, 1979 leaving the

appellant/plaintiff no.1 and the remaining appellants/plaintiffs

as his sons, daughter and widow;

(g) that the appellant/plaintiff no.1 was suing as a party to the

contract as well as an heir of Shri Bhagat Ram and the

remaining appellants/plaintiffs as the heirs of Shri Bhagat Ram;

(h) that the defendant "now it seems" had not taken any steps for

making him fit to execute the Sale Deed and had not obtained

the permissions which he had agreed to take;

(i) that during the lifetime of Shri Bhagat Ram, defendant was

being approached by the appellant/plaintiff no.1 and had been

promising that he was taking steps to get the necessary

permissions and clearances and the purchasers had been

believing the defendant;

(j) that even after the death of Shri Bhagat Ram, the

appellants/plaintiffs had been following up with the defendant

and were always ready and willing and even then ready and

willing to perform their part of the Agreement;

(k) that the appellants/plaintiffs got issued a notice dated 29th

January, 1980 to the defendant to comply with the formalities

and deliver vacant peaceful physical possession of the property;

and,

(l) that the defendant by telegraphic reply falsely denied having

ever agreed to sell the property.

4. The original defendant Shri Sat Naraian Tulsian contested the suit by

filing a written statement, pleading:-

(i) that there was no agreement between the parties;

(ii) in any event the alleged agreement was vague, indefinite,

incomplete and incapable of enforcement;

(iii) that the property belonged to the joint family of the defendant;

(iv) that the firm M/s. Bhagat Ram Gulshan Kumar had expressed

desire to the defendant to purchase the property but no

concluded agreement was arrived at and the negotiations never

entered the domain of a concluded contract;

(v) that at no time consideration of Rs.4,50,000/- was agreed;

(vi) that the defendant had very good relations with Shri Bhagat

Ram, both being in the same trade; in January, 1978 the

defendant had casually expressed a desire to Shri Bhagat Ram

that he was thinking of disposing of his property; Shri Bhagat

Ram on behalf of M/s. Bhagat Ram Gulshan Kumar started

negotiating with the defendant; while the defendant demanded

Rs.12,50,000/- as the price of the property, Shri Bhagat Ram

offered Rs.11,50,000/- and the negotiations failed;

(vii) ultimately in the beginning of April, 1978 Shri Bhagat Ram, on

behalf of the firm M/s Bhagat Ram Gulshan Kumar again

approached the defendant and started negotiations;

(viii) on 13th April, 1978 it was agreed that the price of the property

in question would be settled with the intervention of common

friends namely Shri Dhanpat Rai of M/s Parma Nand Dhanpat

Rai, Shri Shiv Shankar Tulsian and Shri Gian Chand and

within six months from that date a sale will be executed by the

defendant in favour of M/s. Bhagat Ram Gulshan Kumar after

the defendant had also obtained the consent of other members

of the family;

(ix) in order to bind the defendant, lest he should dispose of the

property to any other person, a cheque for Rs.25,000/- was

thrust upon the defendant with a condition that the price will be

settled with the intervention of the aforesaid common friends;

(x) that Shri Dhanpat Rai, Shri Shiv Shankar Tulsian and Shri

Gian Chand had been having meetings with Shri Bhagat Ram

and also with the defendant;

(xi) in the end of June, 1978, Shri Dhanpat Rai, Shri Shiv Shankar

Tulsian and Shri Gian Chand settled the price at Rs.11,95,000/-

and directed Shri Bhagat Ram and the defendant to enter into a

formal agreement incorporating all the terms thereof and M/s

Bhagat Ram Gulshan Kumar should pay another sum of rupees

one lac as advance to the defendant on the execution of the

agreement;

(xii) both parties agreed to the price and the modus aforesaid;

(xiii) however M/s. Bhagat Ram Gulshan Kumar did not pay the

amount by the end of August, 1978 nor any final agreement was

executed between the parties;

(xiv) before the agreement could be recorded in writing, there were

unprecedented floods in the area of Model Town, Delhi on 5th

September, 1978 and the entire property was submerged in

water and the said floods remained in the locality for more than

ten days;

(xv) due to this calamity, the prices of the properties in the locality

immediately fell;

(xvi) that when the floods subsided, the defendant approached Shri

Bhagat Ram to pay rupees one lac and get the agreement

engrossed and to get a draft sale deed prepared to enable the

defendant to apply to the Income Tax Department for clearances

and to the Land Ceiling Authority for permission under the

ULCR Act but Shri Bhagat Ram expressed his inability to do so

because of change of circumstances and because of the rumor

then prevalent of such floods being likely to re-occur every

year;

(xvii) that the contract thus came to an end;

(xviii) that the defendant thereafter extensively repaired his property

to make it habitable; and,

(xix) that owing to the Central Government having made

arrangements to prevent such floods in future, the prices of the

properties in the locality had gone up and the suit had been filed

taking advantage thereof.

5. The appellants/plaintiffs filed a replication denying the averments in

the written statement and reiterating their case.

6. On the pleadings aforesaid of the parties, the following issues were

framed in the suit on 8th December, 1980:-

"(1) Was there any valid and concluded agreement of sale with regard to the property in dispute between the parties? If so, when and on what terms and conditions?

(2) Is the property in dispute Joint Hindu Family property of the defendant and his sons etc.? (3) Was the defendant not competent to enter into any agreement of sale with respect to the property in dispute on account of its being HUF property? (4) Have the plaintiffs locus standi to sue? (5) Did the plaintiff abandon the transaction in question at any time as alleged in the written statement?

(6) Have the plaintiffs been ready and willing to perform their part of the contract and they are still willing to do so? If not, to what effect?

(7) Relief."

7. The appellants/plaintiffs examined in all four witnesses. The

defendant examined himself in his defence.

8. The learned Addl. District Judge, vide judgment and decree dated 6th

April, 2002 dismissed the suit of the appellants/plaintiffs ignoring the oral

evidence led by the parties holding that in view of Sections 91 & 92 of the

Indian Evidence Act, 1872, the same could not be looked at.

9. The appellants/plaintiffs preferred RFA No.363/2002 to this Court

which was disposed of vide judgment dated 11th September, 2008. It was

held that the agreement pleaded by the appellants/plaintiffs was not

predicated on the receipt for Rs.25,000/- for Sections 91 & 92 supra to be

invoked; the case of the appellants/plaintiffs was of an oral agreement with

the receipt being an evidence thereof and thus Sections 91 & 92 were not

attracted. However since the learned Addl. District Judge had not returned

any finding on the basis of the evidence led, though the judgment and decree

dated 6th April, 2002 of dismissal of the suit was set aside but the suit

remanded to the Addl. District Judge for decision afresh on the existing

pleadings, issues framed and evidence led, after hearing the counsels for the

parties.

10. The learned Addl. District Judge has now vide the impugned

judgment and decree dated 30th April, 2011 again dismissed the suit,

finding/observing/holding:-

A. that the plea of the defendant that since the cheque for

Rs.25,000/- was issued by the partnership firm M/s Bhagat Ram

Gulshan Kumar from the bank account of the partnership firm,

the appellants/plaintiffs had no locus standi to file the suit had

no merit as it was not the requirement of the law that the person

who intend to purchase the property must have made payment

out of his account; accordingly issue no.4 was decided in favour

of the appellants/plaintiffs and against the defendant;

B. that the Sale Deed of the property was in the individual name of

the defendant and though the HUF of the defendant was an

Income Tax assessee but in the Income Tax Return of the said

HUF the said property was not shown; thus issue no.2 was also

decided in favour of the appellants/plaintiffs and against the

defendant;

C. resultantly it was held that the defendant was competent to enter

into an agreement for sale of the property and issue no.3 was

decided in favour of the appellants/plaintiffs and against the

defendant;

D. that it was the contention of the defendant that if everything

was settled between the parties at the time of execution of the

receipt, as contended by the appellants/plaintiffs, then those

terms would have been incorporated in the receipt itself in the

form of an Agreement;

E. that as per the deposition of the appellants/plaintiffs, the price

of Rs.4,50,000/- and other terms and conditions as pleaded were

settled on 13th April, 1978 only and the defendant had told them

that he would get the agreement for sale prepared recording the

said terms and conditions; however subsequently the defendant

told them that there was no need to execute the agreement as he

would execute the Sale Deed and get it registered;

F. that the appellants/plaintiffs in their cross examination deposed

that though the defendant was to send the agreement within

two/three days of 13th April, 1978 and had not sent the same but

they themselves did not get any agreement prepared nor sent it

to the defendant and did not even given any notice to the

defendant till the issuance of the notice on 29th January 1980;

G. that the appellants/plaintiffs in their deposition admitted heavy

flood in which Model Town was submerged on 5th September,

1978 and that the water had remained for five days;

H. that the appellants/plaintiffs in their deposition also stated that

they had verbally agreed to pay one percent commission to the

property dealer Shri Dharamvir Verma;

I. Shri Dharamvir Verma, Property Dealer examined by the

appellants/plaintiffs deposed that though the

appellants/plaintiffs had asked the defendant to write down the

sale consideration of Rs.4,50,000/- which had been agreed upon

in the receipt, however the defendant had stated that there was

no need thereof; however in cross examination he agreed that

usually sale consideration is mentioned in the document when

the earnest money is given though explained that in the subject

transaction it was not done because of the intimacy between the

parties;

J. that the defendant in his cross examination stated that the

amount of Rs.25,000/- received by him was being still shown as

credit to the account of M/s. Bhagat Ram Gulshan Kumar in his

account book and he had not till then forfeited the same;

K. that the defendant also admitted that he had not given any

notice of demand of rupees one lac;

L. that the defendant in his deposition deposed the value of the

property to be Rs.13,50,000/- on the basis of Valuation Report;

M. that since the appellants/plaintiffs had not pleaded about the

property broker, his evidence was beyond pleadings;

N. that the onus to prove the sale consideration and the other terms

and conditions settled, was on the appellants/plaintiffs;

O. that the defendant had failed to examine the three mediators

who were pleaded to have been agreed upon to settle the sale

consideration;

P. that though the counsel for the defendant had in arguments

explained that two mediators died before the recording of the

evidence and one suffered a brain stroke but no evidence to the

said effect or proof thereof was produced;

Q. that though the defendant had approached the High Court

during the trial to allow his two sons to be examined as

witnesses and the said request was allowed but had failed to

examine them also;

R. that the defendant had thus deliberately avoided to examine the

mediators as well as his sons who were alleged to be part of the

negotiations;

S. the defendant had thus failed to substantiate that the said three

persons acted as mediators or had settled the sale consideration

for Rs.11,95,000/-;

T. however the failure of the defendant to prove the sale

consideration of Rs.11,95,000/- in itself was not sufficient to

believe the version of the appellants/plaintiffs of the sale

consideration of Rs.4,50,000/-having been agreed;

U. that though the appellants/plaintiffs had pleaded that on 13th

April, 1978 the agreement was concluded and as per which

agreement the defendant was to execute the Sale Deed within

six months and that there was no need to execute the written

agreement to sell after 13th April, 1978 but the

appellants/plaintiffs in their testimony had deposed having

asked the defendant to mention the sale consideration in the

receipt for Rs.25,000/- and the defendant to have responded that

he would get the Agreement to Sell prepared on the terms

agreed including the sale consideration but of the defendant

subsequently saying that there was no need for the Agreement

to Sell also; the other witnesses examined by the

appellants/plaintiffs had also deposed so;

        V.     the deposition of the appellants/plaintiffs and their witnesses to

              the   said   effect   was    contrary       to   the   case   of    the

              appellants/plaintiffs in their pleadings;

       W.     that the appellants/plaintiffs in their evidence had failed to

mention the date, month and year when the defendant stated

that there was no need to execute Agreement to Sell and he

would execute the Sale Deed directly;

X. that in the receipt not only the fact of payment of Rs.25,000/-

was mentioned but it was also mentioned that the Sale Deed

will be executed within six months; it implied that the receipt

was not merely an acknowledgment of payment but was

something more than that;

Y. if other terms & conditions including sale consideration were

agreed between the parties then, there was no reason to not

mention the same in the receipt;

Z. there was in-consistency as aforesaid in the reasons given by

the appellants/plaintiffs for not mentioning the other terms &

conditions in the receipt;

AA. that the reason given by the appellants/plaintiffs for not

mentioning the sale consideration and other terms in the receipt

was not a plausible one;

AB. that the appellants/plaintiffs were running a number of

partnership firms and were not laymen but businessmen, having

full knowledge of the nature of the transaction, its formalities

and the practice prevalent in the market; it was not their case

that the defendant executed the said receipt unilaterally; it

implies that they were vigilant of the fact that they had to secure

the fact of payment of Rs.25,000/-; that is why they got the

receipt executed from the defendant despite the fact that the

payment was made via cheque and not in cash; in fact the

appellants/plaintiffs had also deposed that they had insisted to

have a proper and formal Agreement of Sale meaning that they

were not satisfied with the oral terms & conditions; however

that was not done; it is not the case of the appellants/plaintiffs

that they had blind faith upon the defendant; it is also not their

case that the defendant had refused the request to execute the

Agreement to Sell as well as to mention the sale consideration

in the receipts; as such the appellants/plaintiffs had completely

failed to explain that once they got recorded in the receipt the

fact of payment and the time period for execution of the Sale

Deed, then why they left the total sale consideration as well as

the other terms alleged to be settled to be mentioned in the

receipt;

AC. that the property broker examined by the appellants/plaintiffs

had also admitted the prevalent practice of mentioning of total

sale consideration in the receipt;

AD. that the appellants/plaintiffs had completely failed to assign a

single reason for deviation from the normal practice to mention

the sale consideration in the receipt;

AE. that the appellants/plaintiffs had also failed to explain the basis

on which Rs.25,000/- was paid or towards what percentage of

the sale consideration the said amount was paid;

AF. the appellants/plaintiffs had failed to explain why everything

contrary to the usage and practice was done;

AG. thus it has to be held that the terms as pleaded in the plaint and

the sale consideration of Rs.4,50,000/- was not fixed on 13th

April, 1978 and only whatever was agreed between the parties

on 13th April, 1978 was mentioned in the receipt;

AH. that though the appellants/plaintiffs had relied upon sale dated

29th September, 1980 regarding property No.H-3/12, Model

Town, Delhi to show the prevalent rate but the same was of no

avail as the appellants/plaintiffs had failed to prove sale

consideration of Rs.4,50,000/- to have been agreed on 13th

April, 1978;

AI. admittedly there were floods in the colony in September, 1978

and it implies that when the Sale Deed was executed in the year

1980 the prices had fallen and thus the said Sale Deed of the

year 1980 cannot give prevalent market price on 13th April,

1978;

AJ. that the appellants/plaintiffs in their deposition had admitted

that the construction of the suit property was of very good

quality;

AK. that the appellants/plaintiffs had failed to establish that the

location as well as the quality of construction of suit property

and of property No.H-3/12 of which Sale Deed dated 29th

September, 1980 was proved, were identical;

AL. even otherwise on the basis of a single Sale Deed, that too for a

different period, it cannot be held that the same rate was

prevalent in the year 1978;

AM. that there was no inconsistency in the stand of the defendant in

the reply to the legal notice and in the written statement as

contended by the appellants/plaintiffs;

AN. that though there was a contradiction in the stand of the

defendant qua the status of Rs.25,000/-, with the defendant in

written statement stating that the said amount was forfeited and

in his deposition deposing that the same was still standing to the

credit of the appellants/plaintiffs and though the defendant had

failed to examine the mediators nor had established any

explanation therefor but the said contradictions could not lead

to a conclusion that the oral agreement pleaded by the

appellants/plaintiffs existed when the appellants/plaintiffs had

failed to prove the same;

AO. that the introduction by the appellants/plaintiffs of the property

dealer and of the execution of Agreement to Sell being agreed

to be executed, in the evidence and which did not exist in

pleading put a question mark on the manner of negotiations and

existence of the agreement itself;

AP. the contradictions of the appellants/plaintiffs were more fatal

than the contradiction in the defence of the defendant;

AQ. that the receipt itself could not constitute an Agreement to Sell

and was not enforceable;

AR. the receipt was not on a Revenue Stamp and did not speak

about the sale of the property;

AS. that since no concluded Agreement to Sell was

proved/established to have been reached between the parties,

the question of specific performance thereof did not arise;

AT. though in the absence of the appellants/plaintiffs proving a

concluded Agreement to Sell to have been reached, the issue

No.6 relating to readiness and willingness of the

appellants/plaintiffs was irrelevant but the appellants/plaintiffs

had proved that they were financially sound at the relevant time

and were also in a position to arrange the balance sale

consideration;

AU. however the appellants/plaintiffs had failed to prove their

willingness; though it was their case that the Sale Deed was to

be executed within six months and though they pleaded that

they had approached the defendant with a request to execute the

Sale deed but no specific date of having so approached the

defendant was pleaded/proved and the first missive from the

appellants/plaintiffs was only on 29th January, 1980;

AV. thus though the appellants/plaintiffs were financially capable

but have not proved themselves to have been ready and willing

to perform their part of the agreement pleaded by them;

accordingly issue No.6 was decided against the

appellants/plaintiffs and in favour of the defendant;

AW. the conduct of the appellants/plaintiffs of neither sending any

letter/notice till 29th January, 1980 nor pleading or proving any

date on which they may have approached the defendant for

execution of the Sale Deed coupled with the admitted floods in

the colony in September, 1978 i.e. within six month of the

alleged Agreement dated 13th April, 1978 indicated that the

appellants/plaintiffs had not shown any interest to go ahead

with the transaction; and,

AX. that the appellants/plaintiffs had also deposed that two years

prior to 1980 they had purchased a plot of land in Derawala

Nagar and were raising construction thereon and had started

living therein ; it was not their case that despite the same they

wanted to purchase the suit property also for their residence;

this was also indicative of the appellants/plaintiffs being not

interested in the suit property - accordingly issue No.5 was

decided against the appellants/plaintiffs and in favour of the

defendant.

and resultantly the suit was dismissed.

11. Before I proceed to record the respective contentions, it is deemed

appropriate to re-produce the English translation of the receipt aforesaid in

Hindi proved as Ex.P4 as given in the impugned judgment and to which

translation no objection has been raised by either counsel. The same is as

under:-

"Shree Ganeshay Namah"

Bavat Kothi No.H-3/11, Model Town Walon Ki Bawat advance ka cheque Rs.25,000/-, cheque No.762815 Indian Overseas Bank, Model Town upar ka Sh. Bhagat Ram Gulshan Kumar Ji se vasool paaye. Registry 6 maah tak karva denge."

12. The senior counsel for the appellants/plaintiffs has argued:-

A. that the defendant has not denied the Agreement to Sell of the

property with the appellants/plaintiffs and the oral Agreement

to Sell is thus not in dispute;

B. the only controversy is of the terms thereof;

C. that the defendant did not examine either of the three mediators

who according to the defendant had fixed the price; the version

of the defendant is thus to be disbelieved; and,

D. from the defendant taking a false plea in the written statement

of the property belonging to his HUF also it ought to be inferred

that the version of the defendant of the terms of the oral

Agreement to Sell is false.

13. The counsel for the respondent no.3 has argued:-

I. that while issuing notice of the appeal, no interim stay as sought

restraining the respondents / defendants from dealing with the

property was granted and the respondents / defendants

accordingly sold the property;

II. that the appellants/plaintiffs in the plaint did not plead that on

13th April, 1978 they had asked the defendant to mention the

total sale consideration agreed in the receipt or that the

defendant had avoided the same stating that he would within

two or three days have a formal Agreement to Sell drafted

recording terms and conditions agreed and send it to the

appellants/plaintiffs for execution, as deposed by the

appellants/plaintiffs and their witnesses in evidence and the

same showed that the appellants/plaintiffs in the plaint had not

pleaded the entire agreement;

III. that Form 34A under the Income Tax Rules requires the

consideration to be mentioned and it is not the plea of the

appellants/plaintiffs that any Form 34A was signed by the

defendant; the only conclusion is that no sale consideration had

been agreed upon between the parties on 13th April, 1978;

IV. that there was absolutely no communication from the

appellants/plaintiffs till the six months from 13th April, 1978 in

which time according to the appellants/plaintiffs the

permissions were to be obtained and Sale Deed to be executed;

V. there was no communication for over one year after the expiry

of the said six months also, till the notice dated 29th January,

1980 was issued;

VI. no dates on which the appellants/plaintiffs claim to have

contacted the defendant have been pleaded or proved;

VII. that ordinarily a party to an agreement does not issue a notice

straightway and issuance of such a notice shows that the same

was in preparation to file a suit;

VIII. though the appellants/plaintiffs had not pleaded but had deposed

involvement of a broker; that there are inconsistencies in the

versions of the agreement in the depositions of the

appellants/plaintiffs and their witnesses;

IX. attention is invited to V.R. Sudhakara Rao Vs. T.V. Kameswari

(2007) 6 SCC 650 laying down tests for an oral Agreement to

Sell;

X. that though the appellants/plaintiffs in their evidence sought to

justify non-mentioning of the sale consideration in the receipt

on account of intimacy with the defendant but have not pleaded

such intimacy;

XI. acquaintance in trade is not intimacy;

XII. that the conduct of the appellants/plaintiffs as has emerged is

not of a prudent person;

XIII. reliance is placed on Lalit Kumar Sabharwal Vs. Ved Prakash

Vijh 2003 (68) DRJ 670 to contend that merely a receipt signed

by one party only cannot be an Agreement to Sell;

XIV. reliance is placed on Ameer Mohammed Vs. Barkat Ali AIR

2002 Raj 406 to contend that when the plaintiff bases the suit on

the basis of oral Agreement of Sale then it is the duty of the

plaintiff to disclose all material facts and particulars with all the

conditions of the agreement and the surrounding circumstances

including in whose presence the agreement was entered into and

what negotiations took place and the plaintiff is required to

prove the oral agreement as a whole, by trustworthy evidence;

XV. that the grant of the relief of specific performance is a

discretionary one and the said discretion ought not to be

exercised in favour of the appellants/plaintiffs 33 years after the

Agreement to Sell; and,

XVI. appellants/plaintiffs have not acted with promptitude.

14. The senior counsel for the appellants/plaintiffs in rejoinder has

contended:-

(A) that the application for permission in Form-34 A under Section

230A of the Income Tax Act is not required to be signed by the

purchaser;

(B) reliance is placed on Maman Chand Vs. State 2008 VII AD

(Delhi) 21 & M/s. Chuni Lal Dwarka Nath Vs. Hartford Fire

Insurance Co. Ltd. AIR 1958 Punjab 440 on the effect of non-

cross examination of a witness on any particular aspect;

(C) that in cases of Agreement of Sale of immovable property,

specific performance is the norm and refusal an exception;

reliance in this regard is placed on Ajit Prashad Jain Vs. N.K.

Widhani AIR 1990 Delhi 42;

(D) that the defendant had been taking adjournments in the suit and

is responsible for the long delay and cannot now use the same

to defeat the just claim of the appellants/plaintiffs for specific

performance;

(E) that the defendant by taking false plea of property belonging to

his HUF forced the appellants/plaintiffs to summon the Income

Tax records, further delaying the proceedings;

(F) that when a identical property in the year 1980 has been proved

to have been sold for Rs.6 lacs, the price agreed upon on 13th

April, 1978 as pleaded by the appellants/plaintiffs of

Rs.4,50,000 is believable;

(G) that the discrepancies, in the statements of the witnesses of the

appellants/plaintiffs, relied upon by the respondents /

defendants are owing to their testimony being recorded after

long passage of time;

(H) that the perusal of the Trial Court record shows that the

defendant tried for three years to prevail upon the mediators

named in the written statement to depose in his favour but

failed;

(I) that once the version of the defendant of the terms & conditions

of the oral Agreement to Sell has not been proved, the version

of the appellants/plaintiffs has to be accepted;

(J) that Section 16 (c) of the Specific Relief Act, 1963 does not

require any particulars of readiness and willingness to be

pleaded; reliance is placed on Syed Dastagir Vs. T.R.

Gopalakrishna Setty (1999) 6 SCC 337 and on Motilal Jain

Vs. Ramdasi Devi (2000) 6 SCC 420 in this regard;

(K) reliance is placed on Smt. Shakuntla Devi Vs. M/s. Mohanlal

Amrit Raj Jain Market, Pali AIR 1994 Rajasthan 259 to

contend that the purchaser is required to show his readiness and

willingness to pay the balance sale consideration only as and

when the occasion therefor arises i.e. when the seller has

obtained permission and not prior thereto;

(L) that the appellants/plaintiffs were not required to plead what

was deposed as a reason/explanation for non-mentioning of the

sale consideration in the receipt; and,

15. The counsel for the subsequent purchaser in his written submissions

has contended:-

(i) for specific performance to be ordered, the terms & conditions

agreed upon between the parties must be certain and specific;

reliance in this regard is placed on M/s Mirahul Enterprises

Vs. Mrs. Vijaya Sirivastava AIR 2003 Delhi 15 and M/s

Trimurthy Constructions Vs. Vijaya Laxmi Gadgil AIR 1993

Andhra Pradesh 95;

(ii) that the receipt proved in the present case is not an enforceable

agreement and is at best an agreement for entering into an

Agreement to Sell;

(iii) inconsistencies in the version of the transaction, given in the

testimonies of the four witnesses examined by the

appellants/plaintiffs are pointed out;

(iv) that from the testimony of all the witnesses, it is established that

a regular agreement for sale was agreed to be executed later on

between the parties and which admittedly was not executed and

there is thus no concluded contract between the parties; reliance

in this regard is placed on Mayawanti Vs. Kaushalya Devi

(1990) 3 SCC 1 and Ganesh Shet Vs. Dr. C.S.G.K. Setty

(1998) 5 SCC 381 and on Rabindra Nath Sahu Vs. Mrs. Maya

Devi AIR 1991 Patna 192;

(v) non-mentioning of the total sale consideration on the receipt

can lead to only one conclusion that on the date of execution of

the receipt, the same had not been agreed upon;

(vi) that the evidence of the property broker being beyond pleadings

cannot be looked at;

(vii) that the learned Addl. District Judge has erred in holding the

appellants/plaintiffs to be financially capable even though the

appellants/plaintiffs had not led any evidence in this regard and

the finding of the learned Addl. District Judge is based on mere

oral assertions of the appellants/plaintiffs appearing as

witnesses; and,

(viii) that from the facts it is clear that the defendant had abandoned

the agreement.

16. The counsel for the respondent No.3 in the list of cases on relevant

propositions of law has referred to a large number of other judgments than

which were cited at the time of hearing but the same cannot be permitted;

thus no cognizance thereof is being taken. Mention may however be made of

Brij Mohan Vs. Sugra Begum (1990) 4 SCC 147 and V.R. Sudhakra Rao

Vs. T.V. Kameswari (2007) 6 SCC 650 laying down the tests to be applied

in specific performance of an oral agreement. Reference may also be made

to Pelikan Estates Pvt. Ltd. Vs. Shri Kamal Pal Singh 2004 VI AD (Delhi)

185 though concerned with the grant of interlocutory relief in suits for

specific performance of an oral agreement to sell.

17. I have considered the rival contentions.

18. I had during the hearing enquired from the senior counsel for the

appellants/plaintiffs whether not the application for permission under ULCR

Act which according to the appellants/plaintiffs was agreed to be obtained in

a time span of six months between the date of the oral Agreement to Sell i.e.

13th April, 1978 and the date fixed for completion of sale, was required to be

signed by the purchaser also in as much as the said permission could not

have been granted without the authority granting the said permission being

satisfied that the purchaser was eligible to acquire the property. Though the

senior counsel for the appellants/plaintiffs had stated that he will revert to

the said aspect in his rejoinder, but no answer has been given.

19. My own study shows that Section 27 of the ULCR Act prohibited

transfer by way of sale of any urban land with a building or a portion only of

such building except with the previous permission in writing of the

Competent Authority constituted under the said Act. Sub Section (2) of

Section 27 required the person desiring to make a transfer to make an

application in writing to the Competent Authority in such form and in such

manner as may be prescribed. Sub Section (3) provided for the Competent

Authority to, after making such enquiry as it deemed fit, by order in writing,

grant or refuse to grant permission applied for; Sub Section (4) provided that

if refusal of the permission was not communicated to the applicant within 60

days of the receipt of the application, the permission would be deemed to

have been granted. The Urban Land (Ceiling Regulations) Rules, 1976, by

Rule 14 prescribed the application under Section 27(2) to be in Form-VIII to

the said Rules. A perusal of the said prescribed form shows that the

application was required to be not only signed by the transferer and was

required to be accompanied with a copy of the document to be executed in

regard to the transfer but was also required to be signed by the transferee and

the transferee was also required to state in the said form the purpose for

which the transferee intended to utilize the property as well as to furnish a

declaration that he did not hold any urban or urbanizable land with a

building or give particulars of such urban land with building held by him.

20. That being the position, even if the version of the appellants/plaintiffs

as set out hereinabove were to be believed, the appellants/plaintiffs do not

claim that they took any steps for preparation/drafting of the document to be

executed in regard to the transfer and copy of which was to be attached to

the application for permission under the ULCR Act. Also it is not the case of

the appellants/plaintiffs that they prepared the statement required to be

furnished by them under Form-VIII supra or the declaration required to be

made by them of the purpose for which they intended to use the property or

handover the same to the defendant for submission as part of the application

to the Competent Authority under the ULCR Act. The only inference can be,

of the appellants/plaintiffs having not pursued the Agreement to Sell and

having not done what they were required to do.

21. In the light of the deemed permission within 60 days as provided

under Section 27(4), a doubt also arises as to why the parties had agreed to a

time of six months for execution of the Sale Deed. If the agreement of the

parties, as set up by the appellants/plaintiffs was of the said period of six

months having been stipulated for obtaining the permission under the ULCR

Act, a period of say about three months was sufficient. The fixation of a

period of six months as borne out from the receipt thus does not appear to be

in consonance with the agreement pleaded by the appellants/plaintiffs, of

being for the purpose of permission under the ULCR Act.

22. The matter can be looked from another aspect also. From the absence

of any pleading or deposition by the appellants/plaintiffs of the

appellants/plaintiffs being eligible for permission under Section 27 of the

ULCR Act or of the appellants/plaintiffs having not taken any steps for

submission of the said application to the Competent Authority under the said

Act and which application could not have been submitted by the defendant

on his own, a doubt also arises whether an agreement as pleaded by the

appellants/plaintiffs was at all reached. If such an agreement had been

reached, the appellants/plaintiffs certainly in accordance therewith would

have taken steps for submission of application in Form VIII for permission

under the ULCR Act.

23. Thus whichever way one looks at, the conclusion is inescapable that

either the terms of the oral Agreement to Sell pleaded by the

appellants/plaintiffs are false or if they are true, the appellants/plaintiffs are

guilty of non-performance thereof.

24. I may add that the Supreme Court in Maharao Sahib Shri Bhim

Singhji Vs. Union of India AIR 1981 SC 234 had declared Section 27(1) of

the ULCR Act as invalid in so far as it imposed a restriction on transfer of

any urban land with building which was within the ceiling area. However the

subsequent declaration of 27(1) as unconstitutional to the said extent would

have no bearing on the transaction of the year 1978 when the parties were

required to act in accordance therewith. It may also be mentioned that the

ULCR Act was finally repealed in the year 1999.

25. I am also unable to accept the contention of the senior counsel for the

appellants/plaintiffs, that of the two versions of the terms & conditions of the

Agreement to Sell put up by the contesting parties, this Court is bound to

accept one or that since the witnesses material to the version of the

defendant had not been examined and the said version is to be disbelieved

for the said reason, the version of the appellants/plaintiffs is bound to be

accepted. Though the counsel for the subsequent purchaser cited Ganesh

Shet supra on the aspect of grant of the relief of specific performance being

discretionary but I find the Supreme Court in the said judgment to have also

held:-

a. that the plaintiff in a suit for specific performance cannot be

permitted to abandon the case made out in the plaint and to

invite the Court to examine whether a completed agreement

may or may not be spelt out of the antecedent correspondence;

b. that the Court would not permit the plaintiff to depart from the

case made in the plaint as the Court discourages as a rule,

variance between pleading and proof;

c. that when the plaintiff alleged a contract of which he sought

specific performance and failed to establish the same, the Court

would not make a decree for specific performance of a different

contract;

d. that a plaintiff who has sought specific performance of a

contract reached in the month of August cannot get a decree on

the basis of evidence of a contract having been reached in May;

e. that the plaintiff having failed to prove an agreement which he

had set up will be refused specific performance of a different

agreement admitted by the defendant; and,

f. that the contract sought to be enforced by the plaintiff must be

established.

26. It thus follows that merely because this Court may not find the

defendant to have proved his version of the transaction, is no reason for this

Court to believe the appellants/plaintiffs, unless the appellants/plaintiffs

have proved the oral contract pleaded by him.

27. I otherwise agree in entirety with the reasoning given by the learned

Addl. District Judge on a correct appreciation of the evidence recorded in the

suit and thus do not feel the need to reiterate the same.

28. I may only add that though the appellants/plaintiffs had not pleaded

the agreement having been arrived at through a broker as was deposed in

evidence but even if that were so, it belies any logic as to why the said

broker Shri Dharamvir Verma who was examined as PW2 did not follow up

the matter of obtaining permission under the ULCR Act. The said broker in

his deposition has not deposed having taken any such steps as the brokers in

the transactions, are expected to and normally do.

29. I also find merit in the contention of the counsel for the

respondent/defendant no.3 that ordinarily the fist missive from a party to an

agreement to the other is not a legal notice unless some altercations have

taken place between the parties. No such altercation is pleaded; rather the

appellants/plaintiffs have built up a case of intimacy with the defendant. In

the ordinary course of human behavior, if any oral agreement as pleaded by

the appellants/plaintiffs had been reached, the appellants/plaintiffs would

have definitely written to the defendant enquiring about the status of the

permissions which had been agreed to be taken or offering to assist in the

same. Nothing of the sort was done. The only inference is of no such

agreement having been reached.

30. The relief of specific performance is undoubtedly a discretionary one.

The facts of the present case are such which also require the discretion to be

not exercised in favour of the appellants/plaintiffs. The agreement pleaded

by the appellants/plaintiffs is of 13th April, 1978 with a date of completion

thereof within six months i.e. by 12th October, 1978. The fist missive as

aforesaid from the appellants/plaintiffs is dated 29th January, 1980 i.e. after

nearly one year and three months of the date stipulated for completion. The

Supreme Court in K.S. VidyanadamVs. Vairavan (1997) 3 SCC 1 reiterated

in Sardamani Kandappan Vs. S. Rajalakshmi (2011) 12 SCC 18 has held

that the Courts will frown upon suits which are not filed immediately after

breach/refusal and the fact that limitation is three years does not mean that a

purchaser can wait for one or two years to file a suit and obtain specific

performance. It was further held that the three year period is provided to

assist the purchasers in special cases, as where major part of the

consideration has been paid and possession delivered in part performance.

The bare pleas and statements of the appellants/plaintiffs of having

approached the defendant from time to time would not suffice. The

appellants/plaintiffs as aforesaid were also required to join in making the

application for permission under the ULCR Act and had the

appellants/plaintiffs been following up the matter as claimed by them, the

question of the appellants/plaintiffs joining in the same would also have

arisen. The Supreme Court in Umabai Vs. Nilkanth Dhondiba Chavan

(2005) 6 SCC 243 has held that mere bare statement in the plaint or in the

examination-in-chief of readiness and willingness would not suffice and 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.

31. There is yet another aspect of the matter. Admittedly the property was

inundated with flood waters, towards the end of the six months time for

completion of the sale according to the oral agreement pleaded by

appellants/plaintiffs. It is axiomatic that the prices of such a property would

fall and there would be few takers thereof. Even if the entire story set up by

the appellants/plaintiffs is to be believed, the waking up of the

appellants/plaintiffs after one year and three years of the date fixed for the

sale, has necessarily to be seen in the said context and which is sufficient to

exercise the discretion against the appellants/plaintiffs.

32. No merit is thus found in the appeal which is dismissed. I however

refrain from imposing any costs on the appellants/plaintiffs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J

DECEMBER 06, 2013 pp