Rakesh Kumar vs Kalawati (Deceased) Through Lrs & ...
2013 Latest Caselaw 5698 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                Date of decision: 10th December, 2013

+                             RFA No.521/2004

      RAKESH KUMAR                                    ..... Petitioner
                 Through:            Mr. Sumit Bansal & Mr. Ateev
                                     Mathur, Advs.

                                 Versus

    KALAWATI (DECEASED) THROUGH LRS & ORS... Respondents

Through: None.

CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1. The appeal impugns the judgment and decree dated 17.03.2004 of the

Court of the Additional District Judge (ADJ), Delhi in suit No.642/2001,

declining the relief of specific performance of an agreement dated

29.05.1986 of sale of immovable property as well as alternative relief

claimed of recovery of damages of Rs.3,00,000/- but directing the

respondents / defendants No.1 to 4 to refund to the appellant / plaintiff

Rs.30,000/- paid as advance under the said Agreement to Sell together with

interest thereon at 12% per annum from the date of filing of the suit till

realization.

2. Notice of the appeal was issued and the Trial Court record

requisitioned. Vide subsequent order dated 19.01.2005, the appeal was

admitted for hearing. Vide order dated 04.03.2005, the respondents were

directed to maintain status quo with regard to the nature, title and possession

of the subject land subject to the appellant / plaintiff depositing the total

consideration payable in terms of Agreement to Sell dated 29.05.1986 in this

Court. In compliance therewith a sum of Rs.2,73,875/- was deposited. Vide

order dated 26.07.2006, the interim order already granted was ordered to

continue pending further orders. The respondents were served with the

notice of the appeal but only the counsel for the respondents No.1 to 4

appeared and none appeared for the respondents/defendants No.5 to 7. The

respondent No.2 was stated to have died and amended memo of parties was

filed and his legal heirs were served. The counsel earlier appearing for the

respondents No.1 to 4 also stopped appearing after 26.07.2006 inspite of

appeal being repeatedly listed for hearing. Vide order dated 31.07.2013, the

appeal was directed to be listed with notation in the cause list of notice of

default to the counsel for the respondents / defendants but inspite thereof,

none appeared for the respondents / defendants. The counsel who had

earlier appeared for the respondents No.1 to 4 upon being contacted

telephonically stated that he is not the counsel in the matter. In the

circumstances, the respondents were proceeded against ex parte and the

counsel for the appellant / plaintiff was heard and the judgment reserved.

3. The Ld. ADJ has in the impugned judgment and decree:

(a) decided the Issue No.(i) "Whether the agreement to sell

dated 29.05.1986 was brought about by misrepresentation

and fraud?" against the respondents / defendants No.1 to 4

sellers;

(b) decided the Issue No.(ii) "Whether the agreement to sell in

question (is) unconscionable? If so, its effect?" also against

the respondents / defendants No.1 to 4;

(c) decided the Issue No.(iii) "Whether the plaintiff was at all

relevant times ready and willing to perform his part of the

contract?" against the appellant / plaintiff;

(d) decided the Issue No.(iv) "Whether the defendants did not

commit default in the performance of the contract to sell in

question?" against the respondents / defendants and held that

the respondents / defendants No.1 to 4 sellers did commit

default in performance of the contract in question;

(e) decided the Issue No.(v) "Whether the plaintiff is not

entitled to relief of specific performance?" against the

appellant / plaintiff for the reason of having held under

Issue No.3 that the appellant / plaintiff was not ready and

willing at all relevant times to perform his part of the

contract;

(f) decided the Issue No.(vi) "To what amount of damage is the

plaintiff entitled?" against the appellant / plaintiff for the

reason of there being nothing to show that the appellant /

plaintiff had actually suffered any loss of Rs.3,00,000/- for

non performance of contract by the respondents / defendants

No.1 to 4;

(g) decided the Issue No.(vii) "Whether the defendants No.5 to

7 are bona fide purchasers of the suit property for valuable

consideration and without notice of the prior agreement of

sale and pendency of suit between the defendants No.1 to 4

and the plaintiff?" against respondents / defendants No.5 to

7 and held the respondents / defendants No.5 to 7 to have

not acted in good faith and not being capable to being

termed as bona fide purchasers and further held the

respondents / defendants No.5 to 7 to have acted in collusion

with the respondents / defendants No.1 to 4; and,

(h) held that the amount of Rs.30,000/- paid by the appellant /

plaintiff under the Agreement to Sell to the respondents /

defendants No.1 to 4 was not liable to forfeiture in the

absence of any clause to the said effect in the Agreement to

Sell and the same being not by way of earnest money and

accordingly directed refund thereof with interest.

4. No cross-objections / counter appeal is reported to have been filed by

the respondents / defendants. The respondents / defendants having chosen to

be proceeded against ex parte and having not opposed this appeal, need is

not felt to go into the findings of the learned ADJ in the impugned judgment

in favour of the appellant / plaintiff and against the respondents / defendants

No.1 to 7. The learned ADJ having declined the relief of specific

performance and in the alternative for damages to the appellant / plaintiff

only for the reason of finding the appellant / plaintiff to have been not ready

and willing to perform his part of the Agreement to Sell at all relevant times,

it is deemed expedient to examine the correctness only of the said finding of

the learned ADJ.

5. The learned ADJ has held so for the following reasons.

(i) that at the time of issuance of summons of the suit, vide order

dated 06.07.1987 on the application of the appellant /

plaintiff for interim relief, the respondents / defendants were

restrained from selling, mortgaging, alienating or otherwise

parting with possession of the property agreed to be sold on

the condition that the appellant / plaintiff deposits within two

weeks, the balance sale consideration of Rs.2,73, 875/- in the

Court for a period of one year;

(ii) this condition was not complied with by the appellant /

plaintiff as noted in the order dated 07.09.1987 in the suit and

owing to non compliance of which condition, the stay order

granted was vacated;

(iii) however vide subsequent order dated 09.08.1988, upon the

failure of the respondents / defendants to file any reply to the

stay application, the stay granted on 06.07.1987 was

confirmed till the decision of the suit;

(iv) that sometimes in 1999, the respondents / defendants No.1 to

4 filed application for clarification of the order dated

09.08.1988 and vide order dated 24.02.1999 thereon, it was

observed that the injunction granted on 06.07.1987 was a

conditional one i.e. subject to deposit of the amount in the

Court; that the appellant / plaintiff had not deposited the

amount in the Court then also and accordingly it was clarified

that there was no stay;

(v) the aforesaid order showed that the appellant / plaintiff had

failed to deposit the balance sale consideration in terms of the

orders passed by the Court; in other words, the appellant /

plaintiff was not ready with the amount and also did not

seemingly show his willingness to comply with the order by

depositing the balance sale consideration;

(vi) that though the appellant / plaintiff had prior to the institution

of the suit given a notice dated 16.05.1987 calling upon the

respondents / defendants No.1 to 4 for specific performance

but it appeared that thereafter the appellant / plaintiff was not

ready and willing to perform his part of the contract;

(vii) that the law requires the readiness and willingness of the

appellant / plaintiff at all stages;

(viii) that even if the stay order was vacated for non deposit of the

amount in the Court, the appellant / plaintiff had not been

able to show his readiness with the balance consideration;

(ix) that the appellant / plaintiff did not have proper resources and

sufficient money to purchase the suit property. The appellant

/ plaintiff had only one truck; he was earning Rs.10,000/- per

month; he was not even assessed to income tax; he filed his

income tax return first time in 1994; he opened his bank

account in 1988-89; he is said to have taken loan of

Rs.3,15,000/- in July, 2002 from his cousin‟s company for

the purpose of his business and not for purchasing the suit

property. Though the appellant / plaintiff stated having sold

his house to make money available but price of the sale

amount received were not disclosed; the statement of account

filed by the appellant / plaintiff showed that the appellant /

plaintiff never carried a balance of more than Rs.52,000/-

except on 23.07.2002 when he took loan of Rs.3,15,000/-;

             and,


      (x)    it was thus clear that the appellant / plaintiff was not

             possessed   of   sufficient   means    to   pay   the    balance

consideration and was not ready to perform his part of the

contract.

6. The counsel for the appellant / plaintiff, (a) has invited attention to

Section 52 of the Indian Contract Act, 1972 providing for performance of a

contract with reciprocal obligations / promises and has contended that the

balance sale consideration was payable by the appellant / plaintiff purchaser

to the respondents / defendants No.1 to 4 sellers only after the respondents /

defendants No.1 to 4 sellers had obtained the No Objection Certificate

(NOC) required for execution of the sale deed and at the time of registration

of the sale deed and the appellant / plaintiff could not be said to be not ready

and willing for the reason of having not deposited the money in the Court;

(b) has contended that the only effect of non deposit by the appellant /

plaintiff of the sale consideration in the Court as directed could be of there

being no order restraining the respondent / defendants from dealing with the

property; however, the principle of lis pendens as provided in Section 52 of

the Transfer of Property Act, 1882 would still apply; (c) has further

contended that the appellant / plaintiff under the Agreement was to pay the

balance sale consideration against sale deed and delivery of possession of

the land and could not have been directed to deposit the entire sale

consideration in this Court without being entitled to any benefit therefrom;

(d) has yet further contended that the order dated 26.07.1999 in the suit

again restraining the respondents / defendants from selling, encumbering,

parting with possession or creating any third party interest in the property

escaped the attention of the learned ADJ; (e) has argued that the appellant /

plaintiff could have arranged for the funds at the time of execution of the

sale deed; (f) invited attention in this regard to the affidavit dated 08.08.2002

by way of examination-in-chief of the appellant / plaintiff at pages 231 to

235 of the Trial Court record wherein the appellant / plaintiff has deposed

about his capability to pay the balance sale consideration; (g) has relying on

Silvey Vs. Arun Varghese (2008) 11 SCC 45 contended that while judging

readiness and willingness of the plaintiff, the conduct of the defendant

cannot be ignored; (h) has argued that from the conduct of the respondents /

defendants in the present case taking false pleas in their pleadings on which

issues were framed and findings whereon had been returned against the

respondents / defendants, it ought to have been held that the Agreement

remained to be performed for reasons attributable to the respondents /

defendants and not attributable to the appellant / plaintiff; (i) reliance in

this regard is placed on P.D'Souza Vs. Shondrilo Naidu (2004) 6 SCC 649

holding that the readiness and willingness on the part of the plaintiff to

perform his part of the contract would also depend upon the question as to

whether the defendant did everything which was required by him to be done

in terms of the Agreement to Sell and that where owing to the default of the

defendant, the sale deed could not have been executed, the question of the

plaintiff‟s readiness and willingness would not arise; (j) reference is also

made to Paras No. 48 and 50 of Saradamani Kandappan Vs. S.

Rajalakshmi (2011) 12 SCC 18 on the aspect of performance of reciprocal

promise.

7. I have looked at the written Agreement to Sell between the

respondents / defendants No.1 to 4 as sellers and the appellant / plaintiff as

purchaser and find:

(A) that the respondent / defendant No.1 Smt. Kalawati had

represented herself as to be the absolute owner / bhumidar in

possession of agricultural land measuring 9 bighas 7 biswas,

Mustatil No.81, Killa Nos.21/1 (1-2), 22/1 (4-5), 19/2 (4-0)

and the respondent No.2 Sh. Bhisham Prakash, respondent

No.3 Om Parkash and respondent No.4 Ved Parkash had

represented themselves to be the absolute owners in

possession of the remaining agricultural land measuring 1

bigha and 14 biswas, Mustatil No.81, Killa No.19/1(0-12),

20/2 (1-2), situated in village Mehrauli, Tehsil Mehrauli,

New Delhi;

(B) respondents / defendants No.1 to 4 had agreed to sell and the

appellant / plaintiff had agreed to purchase the said land at

the rate of Rs.1,32,000/- per acre and advance money of

Rs.30,000/- was paid at the time of Agreement to Sell and the

balance consideration was agreed to be received by the

respondents / defendants No.1 to 4 from the appellant /

plaintiff at the time of registration of the sale deed;

(C) that the actual physical possession of the said land was

agreed to be delivered by the respondents / defendants No.1

to 4 vendors to the appellant / plaintiff / purchaser at the time

of registration of the sale deed;

(D) that the respondents / defendants No.1 to 4 sellers had agreed

to obtain the NOC from the authorities concerned and to

inform the appellant / plaintiff / purchaser by registered post

after getting the income tax clearance certificate;

(E) the respondents / defendants No.1 to 4 had agreed to execute

the sale deed in favour of the appellant / plaintiff or his

nominee upto 08.08.1986 failing which the appellant /

plaintiff was to be entitled to get the sale deed registered

through the Court of law; and,

8. A perusal of the Trial Court record shows the appellant / plaintiff to

have in his examination-in-chief deposed, (i) that the respondents /

defendants No.1 to 4 put off performing their part of the agreement on one

pretext or the other; (ii) that he finally got sent a legal notice dated

16.05.1987 to the respondents / defendants No.1 to 4 to execute and get

registered the sale deed in favour of the appellant / plaintiff; (iii) that the

respondents / defendants No.1 to 4 still did not comply with the demand

in the notice; (iv) that the respondents / defendants No.1 to 4 disclosed

during the pendency of the suit that they had sold / transferred the suit

property to the respondents / defendants No.5 to 7 who were impleaded as

defendants to the suit; (v) that he was of sound financial means and

capacity to pay the balance sale price and as on that day i.e. 08.08.2002

had more than the amount of the balance sale consideration in his bank

account; (vi) certified copy of the statement of account was proved as

Ex.PW1/4; and, (vii) that he was always and was even then willing to

perform his part of the contract.

9. The appellant / plaintiff in his cross-examination recorded on

04.10.2002 by the counsel for the respondent / defendants No.1 to 4

explained that he had just prior to the date of entering into the Agreement to

Sell disposed of his house and thus money was available with him and for

investing which he had agreed to purchase the subject land. No further

questions on the said aspect were put by the counsel for the respondents/

defendants No.1 to 4. The only inference can thus be of the respondents /

defendants No.1 to 4 being satisfied with the said statement of the appellant /

plaintiff and being of the view that any further questioning on the said aspect

would be counterproductive to the respondents/defendants no.1 to 4.

However in response to yet another question in cross-examination as to why

he had not deposited the money in this Court, he explained that the

respondents / defendants No.1 to 4 had approached him at about that time

and had offered to get the sale deed registered in his favour after obtaining

NOC and had represented that if the money was deposited in the Court, it

would unnecessarily linger the matter.

10. The appellant / plaintiff in his cross examination on the same day by

the counsel for the respondents / defendants No.5 to 7 also stated that he was

in business and had taken the loan of Rs.3,15,000/- on 23.07.2002 for the

purpose of his business.

11. The witnesses of the respondents / defendants admitted that the

respondents / defendants had in fact not applied for NOC in terms of the

Agreement to Sell and did not make any deposition about the non

availability of funds with the appellant / plaintiff.

12. The learned ADJ has not held the appellant / plaintiff to be not ready

and willing to perform his part of the Agreement to Sell till the filing of the

suit from which this appeal arises. The learned ADJ has held the appellant /

plaintiff to be not ready and willing only for the reason of his having, in

compliance of the order of the Court not deposited the balance sale

consideration in the Court.

13. I have perused the order sheet of the Suit Court. The condition of

deposit by the appellant / plaintiff of the balance sale consideration was

imposed by the suit Court to balance the equities arising from restraining the

respondents / defendants from dealing with their property. The appellant /

plaintiff was nowhere informed that it was essential for him to deposit the

said amount in the Court to show his readiness and willingness within the

meaning of Section 16(c) of the Specific Relief Act, 1963 or that inference

of non readiness and willingness shall be drawn from non deposit. Even if

the appellant / plaintiff had failed to deposit, the only consequence thereof

would have been of vacation of stay and not dismissal of the suit for specific

performance. Had the purport for imposing such a condition been to test the

readiness and willingness of the appellant / plaintiff, the natural corollary, of

default in deposit, would have been of the appellant / plaintiff being not

ready and willing and dismissal of the suit. The same was not done.

14. I am therefore, in the facts and circumstances of the case, not able to

agree with the learned ADJ that the penalty with which the appellant /

plaintiff could be punished for non deposit, extended beyond the vacation of

the stay and to strike at the very root of the suit. To hold so now would in

my opinion be contrary to the principles of natural justice and fair play.

15. Otherwise merit is found in the contention of the counsel for the

appellant / plaintiff that as per the Agreement to Sell, the appellant / plaintiff

was entitled to part with the balance sale consideration only against delivery

of title and physical possession of the land to him. To make the appellant /

plaintiff part with the balance sale consideration without delivery of title and

possession of the land to him, would be contrary to the agreement and the

jurisdiction of specific performance thereof. To hold, that though as per the

Agreement, the appellant / plaintiff is liable to part with the balance sale

consideration only against the delivery of title and possession, but to test his

readiness and willingness he can be directed to part therewith even without

delivery of title and possession would amount to the Court making a new

contract and which is beyond the scope of jurisdiction of specific

performance. I may however add that in a given case where the Court

entertains doubts about the readiness and willingness of the appellant /

plaintiff till the date of institution of the suit itself, the Court may to test the

readiness and willingness, direct such deposit. However in the present case,

finding of the learned ADJ is of the appellant / plaintiff being ready and

willing till coming to the Court.

16. The Division Bench of this Court in Ansal Properties Vs. Rajinder

Singh 41 (1990) DLT 510, referring to the Explanation to Section 16(c) of

the Specific Relief Act held that normally no money is to be tendered and it

is only in cases where the Court feels that though an averment as postulated

in Section 16 is made but the plaintiff may not actually have the money to

pay the consideration, can the Court to satisfy itself about the truthfulness of

the averment, direct to deposit money in Court. It was however held that this

course should be adopted rarely. It was yet further held that the question of

payment would arise only after the trial of the suit and when the rights of

parties are determined and such a direction should be issued when the final

decree is passed and not at an earlier point of time. The said view has been

consistently followed in R.N. Bakshi Vs. Varun Kumar Datt

MANU/DE/1385/2000 and the Division Bench of this Court in Mohan

Overseas P. Ltd. Vs. Goyal Tin & General Industries

MANU/DE/3071/2009 held that the question of payment of consideration

would ordinarily arise only when the Court directs the purchaser to do so

and which directions will be issued only after the trial of the suit and at the

time when the rights of the parties are being determined. To the same effect

is the judgment of another Division Bench in R.K. Goel Vs. Amrit Singh 80

(1999) DLT 331. It cannot also be lost sight of that the balance sale

consideration is lying deposited in this Court for the last nearly eight years

without the appellant / plaintiff reaping any benefit therefrom.

Unfortunately, the learned ADJ, inspite of noticing the dicta of the Division

Bench of this Court, has not applied the same. Notice may however be

taken of N.P. Thirugnanam Vs. Dr. R. Jagan Mohan Rao (1995) 5 SCC

115 where the inference drawn by the High Court of non readiness and

willingness of the plaintiff, from non deposit of the amount of the sale

consideration or furnishing of the bank guarantee therefor, was held to be

justified. However a reading of the judgment shows that the plaintiff in that

case was directed to deposit the balance sale consideration or furnish bank

guarantee therefor on the application of the defendant of the plaintiff being

even then not able to pay the balance sale consideration. That is not the case

here.

17. The appeal thus succeeds. The impugned judgment and decree of

dismissal of the suit filed by the appellant / plaintiff is set aside and a decree

for specific performance of the Agreement to Sell dated 29.05.1986 is

passed by directing the respondents / defendants No.1 to 4 as well as the

respondents No.5 to 7 claiming under the respondents / defendants No.1 to 4

by a title arising, subsequent to the contract / Agreement to Sell with the

appellant / plaintiff, to within one month of the communication of the order

obtain the requisite permission / NOC, if still required, for execution of the

sale deed in favour of the appellant / plaintiff and within one month thereof

execute and register a Deed of Conveyance/Transfer in favour of appellant /

plaintiff in terms of the Agreement to Sell dated 29th May, 1986 and deliver

vacant peaceful physical possession of the subject land to the appellant /

plaintiff. The respondents / defendants No.1 to 7 or such of them who may

be entitled shall thereafter be entitled to withdraw the balance sale

consideration lying deposited in this Court. Though the respondents /

defendants No.1 to 7 having been found to be in default are not entitled to

interest which may have accrued on the balance sale consideration while the

same was deposited in this Court, but are permitted to withdraw the said

interest also.

18. However the respondents / defendants having not contested the

appeal, no costs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J th DECEMBER 10 , 2013 „gsr‟..