Delhi High Court

Om Prakash vs Santosh Chaddha on 31 October, 2013

Author: Rajiv Sahai Endlaw

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                    Date of decision: 31st October, 2013.

+                               RFA 18/2003

       OM PRAKASH                                             ..... Appellant
                         Through:     Mr. B.K. Sood, Adv.

                                   Versus

    SANTOSH CHADDHA                             ..... Respondent
                  Through: Ms. Divya Attri, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The appeal impugns the judgment and decree (dated 18th October,

2002 of the Court of the Additional District Judge (ADJ), Delhi in Suit

No.197/2001 filed by the appellant/plaintiff) insofar as declining the relief

of specific performance of an Agreement to Sell of immovable property to

the appellant/plaintiff, though decreeing the suit for refund of the earnest

money paid by the appellant with interest.

2. The appeal was admitted for hearing and vide ad-interim order dated

28th January, 2003 status quo directed to be maintained with respect to the

suit property. It appears that the respondent/defendant had also preferred

RFA No.769/2002 against the same judgment and decree. Vide order dated

27th November, 2009 this appeal was clubbed with RFA No.769/2002 and

both appeals were ordered to be heard and listed together. The counsel for

the appellant/plaintiff on the same day made a statement that the

appellant/plaintiff was not wishing to press CM No.37/2003 for interim

relief and on which the earlier interim order directing maintenance of status

quo was made. Accordingly, the said application was dismissed as not

pressed. On 16th February, 2010 the counsel for the appellant/plaintiff

stated that the only reason the appellant/plaintiff had been denied the relief

of specific performance was on account of interim order passed in Suit

No.1776/1998 titled Raj Kumar Chaddha Vs. Smt. Santosh Kapoor &

Others and he was not aware of the outcome of the said suit; accordingly,

the records of the said suit were requisitioned. On 18th February, 2011,

none appeared for either of the parties and both appeals were dismissed in

default. However, the appellant/plaintiff applied for restoration and which

was allowed vide order dated 31st July, 2012 and the present appeal restored

to its original position. No application was however filed for restoration of

RFA No.769/2002 preferred by respondent/defendant against the same

decree. None appeared for the respondent/defendant thereafter and vide

order dated 30th August, 2013 the appeal was directed to be listed with

notation in the Cause List of this Court of 'notice of default to the counsel

for the respondent'. Since the file of Suit No.1776/1998 supra was not

available, the same was again requisitioned. The counsel for the

appellant/plaintiff was heard on 4th September, 2013 and certain queries

were made from him and the matter adjourned to 6 th September, 2013. The

counsel for the appellant/plaintiff was also requested to telephonically

inform the Advocate for the respondent/defendant. The counsels were

further heard on 9th September, 2013 when the respondent/defendant also

appeared in person and the judgment was reserved.

3. The file of Suit No.1776/1998 has also been received. The file of

RFA No.769/2002 since destroyed in physical form has also been called for

in digital form.

4. The appellant/plaintiff filed the suit from which this appeal arises,

pleading:

(i) that the respondent/defendant had vide Agreement to Sell dated

24th May, 2001 agreed to sell her house No.RP-29, Pitampura,

Delhi admeasuring 126 sq. mtrs. to the appellant/plaintiff for

total sale consideration of Rs.4,60,000/-;

(ii) that the respondent/defendant had acquired the said house form

her husband Sh. Raj Kumar Chaddha by virtue of Agreement to

Sell dated 1st July, 1998 for a sum of Rs.4,50,000/- and had

represented to the appellant/plaintiff that she was the owner of

the said house by virtue of Agreement to Sell, registered

General Power of Attorney (GPA) and registered Will executed

by her husband in her favour and that she was duly authorized

to sell the said house;

(iii) that the respondent/defendant had further represented to the

appellant/plaintiff that the respondent/defendant required the

money for herself and for her family needs;

(iv) that out of the total agreed sale consideration of Rs.4,60,000/-,

the appellant/plaintiff paid a sum of Rs.1,00,000/- to the

respondent/defendant by bankers cheque dated 23rd May, 2001

and Rs.50,000/- by way of cash at the time of execution of the

Agreement to Sell and the balance sale consideration of

Rs.3,10,000/- was to be paid at the time of execution and

registration of the Sale Deed and delivery of vacant, peaceful

and physical possession of the house on or before 30th June,

2001;

(v) that the respondent/defendant was required to obtain income

tax clearance or any other clearances, if required for

transferring of the property;

(vi) that it was also a term of the Agreement to Sell that in case the

respondent/defendant was not able to transfer the said house to

the appellant/plaintiff free from all encumbrances, then the

respondent/defendant will make good all the losses suffered by

the appellant/plaintiff besides being liable to pay compensation

of Rs.10,00,000/- to the appellant/plaintiff over and above

actual losses suffered by the appellant/plaintiff;

(vii) that the respondent/defendant did not intimate to the

appellant/plaintiff about having obtained the requisite

clearances/permissions for sale of the property, though the

appellant/plaintiff was ready and willing to perform his part of

the contract;

(viii) that upon the appellant/plaintiff approaching the

respondent/defendant, she initially sought further time on

account of her husband being not well but thereafter started

avoiding the appellant/plaintiff and ultimately in September,

2001 stated that she was willing to go ahead with the

transaction provided sale consideration thereof was increased

by Rs.1,00,000/-;

       (ix)      that in the circumstances, the appellant/plaintiff got issued a

                 legal   notice      dated   24th    September,     2001     to     the

respondent/defendant calling upon her to perform her part of

the Agreement to Sell;

(x) that the respondent/defendant in reply to the said legal notice

falsely disputed the entire transaction;

(xi) that the respondent/defendant had turned dishonest;

(xii) that the appellant/plaintiff accordingly sued for specific

performance and in the alternative for recovery of

Rs.4,60,000/- with interest.

5. The respondent/defendant contested the suit, by filing a written

statement, on the grounds:

(a) that the appellant/plaintiff in collusion with the husband of the

respondent/defendant had played a fraud on the

respondent/defendant and had obtained signatures of the

respondent/defendant on various papers under threat and force;

(b) that the respondent/defendant was married to Sh. Raj Kumar

Chaddha; the respondent/defendant purchased the said house

from her husband; that for some time the respondent/defendant

lived peacefully with her husband in the said house but

thereafter the husband of the respondent/defendant started

harassing the respondent/defendant and their relations became

strained and the husband of the respondent/defendant filed a

petition for divorce and a suit for injunction against the

respondent/defendant and which proceedings were then still

underway;

(c) that the husband of the respondent/defendant however

continued to live with the respondent/defendant in the said

house;

(d) that in the second week of May, 2001, the husband of the

respondent/defendant asked the respondent/defendant to

compromise the matter and to which she agreed; in pursuance

thereto the appellant/plaintiff along with attesting witnesses to

the Agreement to Sell namely Sh. Manoj Chauhan and Sh. Raj

Kumar Gupta took the respondent/defendant representing that

her husband was also sitting in their office, for sale of the

house; however the respondent/defendant did not find her

husband at the premises of the appellant/plaintiff but the

appellant/plaintiff and other persons made the

respondent/defendant put her signatures on some papers and

the said persons only took her to Punjab National Bank (PNB),

Karol Bagh, New Delhi and opened an account in her name and

deposited Rs.1,00,000/- therein and which was also

subsequently withdrawn by the husband of the

respondent/defendant; all this was done to throw the

respondent/defendant out of the property;

(e) that else the value of the property was approximately Rs.70

lakhs as on 9th November, 2001 when the suit was filed and it

was incomprehensible that she would agree to sell for

Rs.4,60,000/-.

6. The appellant/plaintiff filed a replication but with no new plea

therein.

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

framed in the suit on 12th July, 2002:

"1. Whether the present suit of the plaintiff is not maintainable as has not been properly valued as alleged in P.O. No.3?OPD

2. Whether the suit of the plaintiff is not maintainable as there is no cause of action as alleged in P.O. No.4?OPD

3. Whether the plaintiff is entitled for the decree of specific performance of agreement to sell and possession of suit property? OPP

4. Whether the plaintiff is entitled for damages?OPD

5. Relief."

8. The appellant/plaintiff besides himself examined three other

witnesses. The respondent/defendant besides herself examined the witness

from the Delhi Development Authority (DDA).

9. The learned ADJ declined the relief of specific performance and

decreed the suit for recovery of double of earnest money,

finding/observing/holding:

(i) that the suit as filed was maintainable and properly valued;

(ii) that the appellant/plaintiff had cause of action for the suit;

(iii) that the appellant/plaintiff had proved that the

respondent/defendant had entered into an Agreement to Sell;

(iv) that the respondent/defendant had failed to prove as to how she

was forced, influenced and coerced into signing the Agreement

to Sell and her said plea was false and concocted;

(v) that however since the respondent/defendant, vide interim order

dated 25th August, 1998 in Suit No.1776/1998 (supra) filed by

her husband against her, had been restrained from alienating,

encumbering or parting with possession of the said house, the

appellant/plaintiff was not entitled to the relief of specific

performance;

(vi) that the respondent/defendant had not disclosed to the

appellant/plaintiff that there was an interim order dated 25 th

August, 1998 restraining her from dealing with the property

and on the contrary had represented to the appellant/plaintiff

that she was entitled to sell the property;

(vii) that the respondent/defendant had thus failed to perform her

part of the Agreement and was liable to pay double the amount

received from the appellant/plaintiff to the appellant/plaintiff;

(viii) that the appellant/plaintiff was also awarded interest @ 8% per

annum on the said amount of Rs.3,00,000/- from the date of

filing of the suit till payment.

10. The counsel for the appellant/plaintiff has argued:

(a) that the appellant/plaintiff has been declined the relief of

specific performance only for the reason of the interim order

dated 25th August, 1998 in Suit No.1776/1998 filed by the

husband of the respondent/defendant, restraining the

respondent/defendant from dispossessing her husband from the

property and/or transferring, alienating or disposing of the

property to any other person;

(b) that the husband of the respondent/defendant died in the year

2010 (the respondent/defendant appearing in person on 9 th

September, 2013 has informed that her husband died on 31 st

December, 2011);

(c) that the respondent/defendant even in the written statement in

the suit from which this appeal arises did not disclose of the

interim order restraining her from dealing with the property;

(d) that though the Agreement to Sell is of the year 2001 and the

interim order in Suit No.1776/1998 restraining the

respondent/defendant from selling the property was operative

till the husband of the respondent/defendant was alive but there

is now no impediment to decreeing the suit for specific

performance by balancing the equities; reliance in this regard is

placed on Surinder Kumar Vs. Brahm Prakash (2012) IV AD

Delhi 466 where a Single Judge of this Court finding the case

of genuine hardship, directed payment of additional

compensation by the purchaser to the seller to bring the sale

price at par with the prescribed circle rates; it is argued that the

appellant/plaintiff is willing to pay the sale consideration as per

the circle rate, even if higher than the agreed sale consideration,

to the respondent/defendant.

11. It was on 4th September, 2013, enquired from the counsel for the

appellant/plaintiff whether an Agreement to Sell in violation of an

injunction order would be void and even if not void, whether discretion

implicit in the grant of relief of specific performance was to be exercised in

favour of the appellant/plaintiff in such circumstance.

12. The counsel for the appellant/plaintiff in response to the aforesaid

query, on 9th September, 2013 invited attention to Thomson Press (India)

Limited Vs. Nanak Builders and Investors Private Limited (2013) 5 SCC

397 and A.K. Chatterjee Vs. Ashok Kumar Chatterjee 156 (2009) DLT 475

to contend that transfer/sale pendente lite in disregard of injunction/restraint

order of the Court though may make the party committing breach liable to

be punished therefor but sale by itself remains valid between the parties,

subject to any directions which competent Court may issue and that such

sale is not a nullity. It was further argued:

(i) that an interim injunction is against a person and not against the

property;

(ii) relying upon Sewa Singh Vs. R.S. Malhotra AIR 2004 Delhi

152, it is contended that specific performance of an Agreement

to Sell entered into by the vendor in violation of an interim

injunction of the Court should be granted, subject to the interim

injunction being vacated; it is argued that upon the demise of

the husband of the respondent/defendant, the interim injunction

stands vacated and now there is no such impediment to the

grant of the relief of specific performance. Relying on

Yeshoda Rani Vs. Maneesh Kumar 67 (1997) DLT 340 (DB),

it is contended that the respondent/defendant cannot be allowed

to take advantage of her own wrong;

(iii) that appeal is a continuance of the suit and the relief which

could have been granted in suit can also be granted in the

appeal taking note of the subsequent event of the vacation of

the interim injunction on account whereof the relief of specific

performance has been declined in the suit;

(iv) relying on Kusuma Dei Vs. Malati Bewa AIR 1969 Orissa 195

and Pranakrushna Vs. Umakanta Panda AIR 1989 Orissa

148, it is argued that an Agreement to Sell in violation of an

interim injunction is voidable at the instance of the purchaser

and not at the instance of the seller who has acted in violation

of the interim order;

(v) attention is invited to Kuldip Gandotra Vs. Shailendra Nath

Endlay AIR 2007 Delhi 1 laying down that a seller in breach of

the Agreement to Sell cannot be permitted to resile from his

commitment simply because the seller could now get a better

deal elsewhere or simply because ex post facto other party

stands to gain from the transaction and further laying down that

the sanctity of the binding contract would be otherwise lost.

13. The counsel for the respondent/defendant has not addressed any

argument and on enquiry has only informed that the husband of the

respondent/defendant has not left any children.

14. I have perused the file of Suit No.1776/1998 filed by the husband of

the respondent/defendant. The case of the husband of the

respondent/defendant was, (i) that his first two marriages in the year 1958

and in the year 1968 resulted in divorce; (ii) that he was thereafter residing

only with his mother who also died in June, 1994; (iii) that he married the

respondent/defendant on 10th November, 1997 at the age of 66 years when

he was the owner of the property No.RP-29, Pitampura, Delhi and residing

there; and (iv) that the respondent/defendant in conspiracy with her son and

daughter from previous marriage stole the documents of the said property

and started harassing him and the respondent/defendant openly told him that

she had married him for his property and his money and started threatening

to sell the property and to dispossess him therefrom. Accordingly, on 21st

August, 1998 i.e. in less than one year from the marriage, the suit was filed

for injunction restraining the respondent/defendant from dealing with the

property or from dispossessing him from the property. Vide ex-parte ad-

interim order dated 25th August, 1998 in the said suit, the

respondent/defendant was, as aforesaid, restrained from dispossessing her

husband or in any manner transferring, alienating or disposing of the

property. The respondent/defendant of course contested the said suit

pleading that her husband had transferred the said house to her vide

Agreement to Sell, GPA etc. The said suit remained pending with the said

interim order. One Sh. Hari Chand and Sh. Wazir Chand applied for

impleadment therein pleading that the respondent/defendant had vide

Agreement to Sell dated 10th July, 1998 agreed to sell the said property to

them and had delivered possession thereof to them and her husband had

filed the said suit in collusion with her. The respondent/defendant in her

reply denied any Agreement to Sell in favour of said Sh. Hari Chand and

Wazir Chand. The husband of the respondent/defendant also filed a reply to

the said application stating that he was even then in possession of the

property and in fact the said Sh. Hari Chand and Wazir Chand had

attempted to kidnap him and in which regard an FIR No.40/2006 was

registered with the Police Station Shalimar Bagh. The said application was

however dismissed on 26th February, 2009. Issues were framed in the suit

and during the recording of the examination-in-chief of the husband of the

respondent/defendant, the respondent/defendant on 18th April, 2009 made a

statement that she and her husband were in possession of the suit property

and she had not sold the property to any third party and that she was not

going to sell the property or part with possession thereof during her lifetime

or the lifetime of her husband, whichever is later in time and that she would

not dispossess her husband from the property without due process of law.

Binding the respondent/defendant thereto, the suit was disposed of.

15. A perusal of the evidence in the suit from which this appeal arises,

reveals:

(i) that the Agreement to Sell of which specific performance is

claimed was executed neither in the suit property where the

respondent/defendant was residing nor at the residence of the

appellant/plaintiff but at the office in Karol Bagh of one Sh.

Subhash Chand carrying on business of food grains and

transportation and who did not know the respondent/defendant

and who admitted to being a childhood friend of the

appellant/plaintiff and from whom enquiries were made by the

police within about four months of the Agreement to Sell dated

24th May, 2011, on the complaint of the respondent/defendant;

(ii) that though the Agreement to Sell is attested by a Notary Public

but the said Sh. Subhash Chand admitted that the said

attestation was not at the time of execution;

       (iii)     that PW-2 Sh. Manoj Chauhan who claimed to have brokered


                  the   deal,   claimed   to   have   been   introduced      to    the

respondent/defendant by his friend and could not establish that

he was carrying on business as a broker and could not even tell

the name of the husband of the respondent/defendant;

(iv) that the Notary Public who had attested the Agreement to Sell

had not made entry of such attestation in the register usually

and mandatorily required to be maintained by him and could

not even identify the respondent/defendant;

(v) that a complaint was made by the respondent/defendant on 1st

June, 2001 with the Police Station Prasad Nagar about her

signatures having been taken on some documents on 24th May,

2001;

(vi) that upon action being taken by the police on the complaint

dated 1st June, 2001 of the respondent/defendant, the

respondent/defendant filed a criminal complaint on 16 th

October, 2001 about the said incident on 24th May, 2001;

(vii) that the appellant/plaintiff at least on 18th September, 2002 i.e.

on the date of cross-examination of the respondent/defendant,

if not earlier, was aware of the suit filed by the husband of the

respondent/defendant against the respondent/defendant and in

which there was interim injunction restraining the

respondent/defendant from selling the property;

(viii) that the record of PNB, Karol Bagh in which the bank draft

aforesaid of Rs.1 lakh was deposited was summoned in the

Court and which confirmed that the said account was opened

only on 25th May, 2001 and the respondent/defendant was

introduced by PW-2 Sh. Manoj Chauhan and the sum of Rs.1

lakh was withdrawn by a self cheque on 31 st May, 2001 and the

account closed on 11th September, 2001;

(ix) that the signatures behind the self cheque vide which the

amount of Rs.1 lakh was withdrawn are not of the

respondent/defendant;

(x) that the land rate as per the DDA in the Pitampura area as on 1st

April, 2002 was Rs.22,000/- per sq. mtr. and the price of a

similar property in that area as per DDA as on 24th September,

2002 was Rs.29,83,816/-;

       (xi)      that a criminal complaint of offences under Section 420, 468,

                 471,    341,     506    &     34      I.P.C.   was   filed    by      the


                  respondent/defendant    against   her       husband      and      the

appellant/plaintiff and Sh. Manoj Chauhan etc. of having

coerced her into signing of the documents on 25th May, 2001.

16. Neither the counsel for the appellant/plaintiff during the hearing nor

the counsel for the respondent/defendant, who chose not to address any

arguments, highlighted the aforesaid facts, which have emerged on perusal

of the record. For the same reason, the outcome of the complaint filed by

the respondent/defendant also cannot be known, though I recollect the

counsel for the appellant/plaintiff informing that the same is still pending

consideration. I feel no hesitation in taking into consideration the record of

Suit No.1776/1998 filed by the husband of respondent/defendant, in

adjudication of this appeal, the same having been requisitioned at the

instance of the appellant/plaintiff.

17. The first question for consideration is, what is the status of an

Agreement to Sell entered into by the seller in violation of an order of

injunction by a Court of Law restraining the seller from

alienating/encumbering/selling the property - whether it is a nullity and

void or merely voidable at the instance of the purchaser if the purchaser at

the time of entering into the agreement was not in the know of injunction

order. The question arises because if such an agreement were to be a nullity

and void, the question of specific performance thereof would not arise.

18. I find the Supreme Court, in Surjeet Singh Vs. Harbans Singh

(1995) 6 SCC 50, to have held that if alienation/assignment made in

defiance of an injunction order is permitted, it would defeat the ends of

justice and the prevalent public policy. It was further held that when Courts

intend a particular state of affairs to exist while in seisin of a lis, that state of

affairs is not only required to be maintained but also presumed to exist till

the Court orders otherwise and the Court in these circumstances has the duty

as also the right to treat the alienation/assignment as having not taken place

at all and the alienee/assignee in violation of the interim order thus cannot

claim to be impleaded on the basis of assignment as the same would be in

disobedience of the order of injunction.

19. The Supreme Court again in Vidur Impex & Traders Private Limited

Vs. Tosh Apartments Private Limited (2012) 8 SCC 384 held that the

agreement of sale in clear violation of order of injunction does not have any

legal sanctity and does not confer any right upon the alienee/assignee and no

valid title or interest can be said to have been acquired thereunder. The

aforesaid observation in Surjit Singh was reiterated

20. The aforementioned two judgments suggest that an Agreement to Sell

entered into in violation of an injunction order is void and a nullity. If that is

so, then the question of specific performance of such an agreement would

not arise.

21. That brings me to Thomson Press (India) Limited and A.K.

Chatterjee supra relied upon by the counsel for the appellant. The Supreme

Court in Thomson Press India Ltd., noticed not only Surjeet Singh and

Vidur Impex & Traders Pvt. Ltd. supra but also a host of other judgments

and:-

(i). held that the question involved in Surjit Singh was of

impleadment of an assignee under an Assignment Deed

executed in violation of the injunction order and impleadment

was refused for the reasoning aforementioned;

(ii). further held that subsequently a three Judge Bench in Savitri

Devi Vs. District Judge, Gorakhpur (1999) 2 SCC 577 also

faced with the question of impleadment of an assignees in

violation of an injunction order had allowed such impleadment,

holding that the plea of the assignees of being a bona fide

transferee for value in good faith may have to be decided

before it could be held that the assignment in their favour

created no interest in the property and that if the application for

impleadment is thrown out without a decision on the said plea,

the assignees will certainly come up with a separate suit to

enforce their alleged rights and which would result in

multiplicity of proceedings; the assignees were thus held to be

necessary and proper parties; Surjit Singh was distinguished by

observing that in that case there was no dispute that the

assignees had knowledge of order of injunction whereas the

same was to be decided in Savitri Devi;

(iii). gave no reasoning as to why the observations aforementioned

in Vidur Impex & Traders Pvt. Ltd. did not apply;

(iv). held the impleadment of subsequent transferee to be

permissible by Section 19(b) of Specific Relief Act;

(v). found the assignee seeking impleadment to have entered into a

clandestine transaction with full knowledge of injunction order

but nevertheless allowed impleadment as a party for enforcing

performance against him;

(vi). Justice T.S. Thakur in his supplementing judgment held that it

was a settled legal position that a transfer pendente lite is not

illegal ipso jure but remains subservient to the pending

litigation and further held that though it was so held in the

context of lis pendens and not in the context of transfer in

breach of an order of injunction but there was no reason why

the breach of any such injunction should render the transfer

ineffective in as much as though the party committing breach

may incur liability for consequences thereof but the sale or

transfer by itself may remain valid as between the parties

thereto subject only to any direction which the Court which had

granted the injunction may issue against a transferor or vendor.

22. Thus, we on the one hand have judgments of Surjit Singh and Vidur

Impex & Traders Pvt. Ltd. holding a sale/transfer or assignment in violation

of injunction order to be not conferring any title and to be ignored and on

the other hand the judgment in Thomson Press holding such transfer/sale

assignment in violation of injunction order to be valid between the parties

thereto though remaining subject to directions/orders of the Court granting

the injunction. All the said three judgments are by Benches presided by two

Judges. Savitri Devi which is a judgment of a three Judge Bench does not

deal with the said aspect.

23. In view of the subsequent judgment in Thomson Press, need is not

felt to deal with my own judgment in A.K. Chatterjee.

24. Though there appears to be a dichotomy of views as aforesaid but it is

worth highlighting that all the cases aforesaid were concerned with the

question of allowing impleadment or not of assignee in violation of an

injunction order in the proceeding/suit in which the injunction order was

issued. While in Surjit Singh and Vidur Impex & Traders Pvt. Ltd., for the

reason of holding such assignment to be conferring no title, impleadment

was refused, in Thomson Press it was allowed, not by holding such

assignment to be valid but for the reason of such assignee being bound by

the final judgment/decree in such suit/proceeding. Savitri Devi though also

allowed impleadment, but for the reason of adjudicating whether the

assignee had knowledge of order of injunction or not

25. The factual matrix at hand is however different. Even though an

assignee in violation of injunction order may be entitled to impleadment in

the suit in which injunction order was granted, for the reason of being bound

by the ultimate judgment in such suit/proceeding, the question in hand is

whether a Court other than the Court which had granted injunction can,

inspite of being informed of such injunction, grant specific performance of

an agreement entered into in violation of injunction order and make the

same subject to the final outcome of the suit/proceeding in which injunction

order was granted.

26. I have wondered whether not the same would tantamount to the Court

before which specific performance of such an agreement is sought, aiding

and abetting violation of the order of injunction issued by another Court and

whether not the same would result in conflicting orders or decisions. I have

also wondered whether not in such a situation the principle of Comity of

Courts, though generally raised in the context of international law, would be

applicable.

27. In my view, the Court which is approached for specific performance

of an agreement entered into in violation of the order of injunction of

another Court, cannot after acquiring knowledge of such violation of order

of injunction of another Court proceed with the adjudication of the suit for

specific performance or pass a decree therein and make the same subject to

the outcome of the suit/proceeding in which injunction has been granted.

The proper course in such a situation would be to direct the plaintiff in such

a suit to approach the Court which had granted the injunction for permission

to proceed with his claim for specific performance and only if that Court

grants such permission, to proceed with the suit for specific performance. If

the Court, inspite of being informed that the claim for specific performance

before it is of an agreement entered into in defiance of an order of

injunction of another Court, proceeds with the suit, it would defeat the ends

of justice and the prevalent public policy and result in one Court which had

granted injunction proceeding with the presumption that the state of affairs

which was required to be maintained continues to exist and treating

alienation /assignment in breach thereof having not taken place at all and the

other Court proceeding to adjudicate claims, cause of action whereof is

seeped in such violation.

28. The contention of the counsel for the appellant/plaintiff that the

decree for specific performance should have been granted, subject to the

outcome of the other suit, is incomprehensible. Reliance on judgments

where specific performance was granted subject to the grant of permissions

requisite/necessary for sale, is misconceived. The restrictions in law or in

perpetual lease of land, prohibiting alienation without prior permission, have

in Vishwa Nath Sharma Vs. Shyam Shanker Goela (2007) 10 SCC 595, K.

Raheja Constructions Ltd. Vs. Alliance Ministries 1995 Supp. (3) SCC 17

and Van Vibhag Karamchari Griha Nirman Sahkari Sanstha Maryadit

Vs. Ramesh Chander (2010) 14 SCC 596 been held to be not a bar for

entering into the Agreement to Sell, only after execution of which the

permission can be sought/applied for. However an interim injunction of a

Court, restraining a person from dispossessing the person in possession of

the property or from alienating, encumbering or parting with possession of

the property in any manner whatsoever, stands on a different footing and is

an express bar to the very entering into of the argument and decreeing a suit

for specific performance subject to the outcome of the interim injunction

would clearly be a case of the Court becoming privy in violation of the

interim order in another proceeding. It is only the Court which has granted

the injunction which is competent to permit such suit for specific

performance to be pursued.

29. Merely because the Supreme Court in Savitri Devi and in Thomson

Press (India) Limited allowed the assignees in violation of injunction order

to be impleaded in the same lis for the reason of binding them with the final

order and did not decline impleadment for the reason of such assignment not

conferring any rights as was done in Surjit Singh and Vidur Impex &

Traders Pvt. Ltd. does make such agreement independently enforceable

before other Courts.

30. The doctrine of comity of jurisdictions of Courts was invoked before

the Supreme Court in Vidur Impex supra. The Supreme Court held that if

the Calcutta High Court had been apprised of the interim order earlier

passed by the Delhi High Court, it would have been slow in passing an order

in conflict with the order passed by the Delhi High Court and approved of

the order of the Calcutta High Court, upon being subsequently apprised of

the earlier order of the Delhi High Court, showing due respect to the same

and making its order subject to the orders of the Delhi High Court. The said

course of action was held to be in consonance with the notion of judicial

propriety.

31. The question however arises as to the course of action to be taken by

the Court from which the relief is claimed in conflict of an earlier order in

another proceeding - whether the Court has to restrain its hands or is to

proceed to decide the lis on its own merits and to proceed to pass an order

even though in conflict with the earlier order in another proceeding and

making it subject to the outcome/order in the proceedings in which the

earlier order had been made. In my view, judicial propriety demands the

Court to restrain its hands and to leave it open to the parties to approach the

Court which had granted the earlier order of injunction for appropriate

direction/enforcement of their rights.

32. I find the Supreme Court, as far back as in Mulraj Vs. Murli

Raghunathji Maharaj AIR 1967 SC 1386, to have also held that the Court

which unknowingly acts in defiance of a stay order is required to, upon

subsequently being apprised of the stay order, undo what was done in

violation of stay, again indicating that the Court cannot knowingly allow to

be done or order what has been injuncted by another Court.

33. Unless such comity is observed by the Courts, the Courts would

become a tool in the hands of unscrupulous litigants who by obtaining

conflicting orders from different Courts will spin a web of litigation to their

own advantage and thereby subverting the judicial process.

34. Reference in this regard can be made to Section 41 (b) of the Specific

Performance Act, 1963 which bars an injunction from being granted to

restrain any person from instituting or prosecuting any judicial proceeding

in a Court not subordinate to that from which injunction is sought and which

illustrates the principle of the inter se relation of the Courts. The suit filed

by the husband of the respondent/defendant was instituted on the original

side of this Court and was till the impugned judgment pending in this Court,

though subsequently was transferred to the Court of the learned ADJ, Delhi.

Grant of relief of specific performance in the suit from which this appeal

arises by the learned ADJ would have been in conflict with the restraint

order of this Court against dispossession and alienation.

35. I may mention that Section 52 of the Transfer of Property Act, 1882

itself prohibits alienations during the pendency of a lis. Though at one time

a view was taken, particularly by the Punjab and Haryana High Court that

owing to the doctrine of lis pendens enshrined in Section 52 of the Transfer

of Property Act, there is no need for grant of injunction but the view of this

Court in Ashoka Builders & Promoters Vs. Edward Keventer Pvt. Ltd.

MANU/DE/0577/1993 and Mohan Overseas Pvt. Ltd. Vs. Goyal Tin &

General Industries 169 (2010) DLT 487 (DB) has been that there is a need

for restraining alienation in appropriate cases and the parties cannot be left

to rely on the doctrine of lis pendens alone for the reason of the inherent

delays in impleadment of transferees pendente lite and to protect innocent

alienees/transferees/purchasers and as equities may arise in favour of such

alienees and yet further that fear of contempt acts as a deterrent against

such alienation. This Court, after having held so, cannot possibly take a

view that the injunctions issued by it can be so violated with the assistance

of another Court.

36. I have wondered, why the appellant/plaintiff, though aware prior to

the impugned judgment, of the injunction operating against sale, did not file

an application in the suit filed by the husband of the respondent/defendant

for impleadment or for directions for permitting specific performance in his

favour, subject to the ultimate decision in that suit. That would have been a

natural thing to have been done by the appellant/plaintiff, if his conduct had

been bona fide. On the contrary, the appellant/plaintiff continued to press

for specific performance of the entire Agreement and as per which

Agreement, not only was the Sale Deed to be executed by the

respondent/defendant in favour of the appellant/plaintiff but possession of

the property also to be delivered to the appellant/plaintiff against payment

by the appellant/plaintiff of the balance sale consideration and both of which

were not possible in view of the interim injunction order. The

appellant/plaintiff at that time did not state that upon learning of the

injunction order, he was willing to purchase the property and pay the

balance sale consideration subject to the outcome in the suit filed by the

husband of the respondent/defendant. In my view, the appellant/plaintiff

ought to have at that stage shown his willingness to perform his part of the

Agreement by taking such a stand and which he did not do and which

axiomatically means that he was not ready and willing to perform his part of

the Agreement to Sell without the respondent/defendant performing entire

part of her Agreement and which she could not be asked to perform owing

to the interim injunction in the other suit.

37. The appellant/plaintiff cannot now be heard to express his readiness

and willingness.

38. The next question which arises is as to what is the effect of the

subsequent event of the demise of the husband of the respondent/defendant

on 31st December, 2011 and the implicit vacation of the injunction order. In

my view, the said subsequent event of ten years after the date contemplated

in the Agreement to Sell for completion of the transaction cannot make an

Agreement enforceable which was unenforceable on the date fixed for

completion. The test to be applied in such cases is of the date fixed for

completion and not of the vagaries of circumstances happening at any time

thereafter.

39. Moreover, the grant of relief of specific performance is discretionary

under Section 20 of the Specific Relief Act and I am for the reasons

hereinafter appearing not inclined to exercise such discretion in favour of

the appellant/plaintiff:

(i) The execution of the Agreement to Sell is shrouded in

suspicious circumstances;

(ii) The learned ADJ has failed to notice the factum of the

respondent/defendant having within about a week of the date of

the signing of the Agreement to Sell made a complaint to the

police station about the circumstances in which her signatures

were taken and upon the police not taking any action in the

matter having filed a criminal complaint about the same and

which criminal complaint at least till the impugned judgment

was not reported to have been dismissed;

(iii) Though a payment of Rs.1,50,000/- out of which Rs.1 lakh was

by way of a bank draft is shown under the Agreement to Sell

but the opening of the bank account, in which the said draft of

Rs.1 lakh was deposited, on the same day as of the Agreement

to Sell and under introduction from Sh. Manoj Chauhan who

has otherwise been unable to show to have acted as a broker, is

also suspicious;

(iv) Similarly, the withdrawal of the said amount of Rs.1 lakh by a

self cheque from the said account within few days of deposit

and the signatures on the reverse of the said cheque made while

obtaining money thereunder being different from those of the

respondent/defendant also raises suspicion;

(v) The aforesaid also raises a doubt about the payment of

Rs.50,000/- in cash;

(vi) The aforesaid transaction of deposit and withdrawal of Rs.1

lakh being the only transactions in the bank account is also a

suspicious circumstance;

(vii) The filing of application for impleadment in the Suit

No.1776/1998 by Sh. Hari Chand and Sh. Wazir Chand in the

suit for injunction filed by the husband of the

respondent/defendant, claiming to be purchasers and the said

Sh. Hari Chand and Sh. Wazir Chand having not pursued the

matter further, shows diverse claims being made with respect to

the property not only by the husband of the

respondent/defendant and the respondent/defendant but also by

others and the property being a disputed one;

(viii) All the aforesaid circumstances, in my opinion gave the

appellant/plaintiff an unfair advantage over the

respondent/defendant;

(ix) The sale consideration of Rs.4,60,000/- is found to be much

below the then prevalent price of Rs.29,83,816/- deposed by

the DDA witness;

(x) Even if it were to be believed that the plea of the

respondent/defendant of being forced to enter into the

Agreement to Sell is not established, the dispute then pending

between the respondent/defendant and her husband relating to

the property and for the reason whereof the Agreement by the

respondent/defendant was an act of one-upmanship on her

husband, would make it inequitable to enforce specific

performance;

(xi) The fact that the sale consideration under the Agreement to Sell

by the husband of the respondent/defendant in favour of the

respondent/defendant is Rs.4,50,000/- would not reflect the

prevalent market price owing to the relationship between them;

moreover, the said Agreement itself was disputed;

(xii) A perusal of the file of Suit No.1776/1998 filed by the husband

of the respondent/defendant against the respondent/defendant

unequivocally establishes that the dispute between the

respondent/defendant and her husband was genuine and not

collusive and the settlement ultimately reached between them is

also not found to be collusive but on account of old age and the

two being exhausted by litigation;

(xiii) The appellant/plaintiff in the Agreement to Sell of which

specific performance is claimed had sufficiently protected

himself by making the respondent/defendant liable for

compensation of Rs.10 lakhs over and above the actual loss

suffered by him in the event of it being proved that the

representation made by the respondent/defendant to him of the

property being free from all injunctions, was false;

(xiv) An Agreement to complete a transaction within a certain time,

if incapable of being performed within that time, cannot be

made timeless in a suit for specific performance inasmuch as

the parties having entered into an Agreement on the premise of

the transaction being completed within a short time, cannot be

forced to abide by the transaction, if the same is incapable of

being complete within that time;

(xv) It is the case of the respondent/defendant that the

appellant/plaintiff is in collusion with her husband. The

complaint to the police as well as criminal complaint filed is

not only against the appellant/plaintiff but also against the

husband of the respondent/defendant;

(xvi) The Trial Court failed to address the issue whether the

appellant/plaintiff was aware of the injunction order or not,

inasmuch as if it were to be held that the appellant/plaintiff

entered into the Agreement to Sell with the knowledge of the

injunction order, then he is equally to blame and in any case the

discretion implicit in the grant of the relief of specific

performance cannot be exercised in his favour and a violator of

injunction order of the Court is not entitled to any relief;

(xvii) Though there is no evidence of the knowledge of the

appellant/plaintiff of the said injunction order but it is not in

dispute that the husband of the respondent/defendant was in

possession of the property;

(xviii) Once, it is so, in my view, the appellant/plaintiff as purchaser is

deemed to have notice of all the claims of the husband of the

respondent/defendant to the property and consequently of the

injunction order;

(xix) Section 3 of the Transfer of Property Act, 1882 provides that a

person is said to have notice of a fact when he actually knows

that fact, or when, but for wilful abstention from an enquiry or

search which he ought to have made, or gross negligence, he

would have known it. Explanation II thereof provides that any

person acquiring any immovable property or any share or

interest in any such property shall be deemed to have notice of

the title, if any, of any person who is for the time being in

actual possession thereof;

(xx) The Supreme Court in R.K. Mohammed Ubaidullah Vs. Hajee

C. Abdul Wahab AIR 2000 SC 1658 has held that such notice

under Section 3 is deemed not only of the title of the person in

possession when entering the property but of subsequent claims

and interest of such person also. It was thus held that

subsequent purchaser is deemed to have notice of the mortgage

in favour of the tenant in possession of the property. The same

view was followed in Guruswamy Nadar Vs. P. Lakshmi

Ammal (2008) 5 SCC 796 and in Har Narain Vs. Mam Chand

(2010) 13 SCC 128 as well;

(xxi) The appellant/plaintiff is thus from the admitted fact of

possession of the husband of the respondent/defendant of the

property deemed to have notice of all the disputes raised by the

husband of the respondent/defendant of the documents under

which the respondent/defendant was claiming title to the

property and also of the injunction order in the suit filed by the

husband of the respondent/defendant;

(xxii) It is not the case of the appellant/plaintiff that the son or

daughter from the previous marriage or any other family

members of the respondent/defendant was present at the time

of execution of the Sale Deed. Had the transaction taken place

in the normal course, the appellant/plaintiff would have made

the said son or daughter of the respondent/defendant from

previous marriage, witness to the Agreement to Sell if

voluntarily executed by the respondent/defendant and even if

the respondent/defendant till then did not have a bank account,

the draft received under the Agreement to Sell would have been

deposited in a bank account introduced by the said son or

daughter of the respondent/defendant.