H.K. Chhabra vs Manmeet Kaur
2014 Latest Caselaw 1792 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                       Date of decision: 2nd April, 2014.

+             CS(OS) 127/2012 & IA No.958/2012 (u/O 39 R-1&2 CPC)

       H.K. CHHABRA                                         ..... Plaintiff
                          Through:     Mr. Kuldeep Kumar, Adv.

                                   Versus

    MANMEET KAUR                                             ...Defendant
                  Through: None.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.

The present suit has been instituted by the plaintiff praying for

specific performance of an Agreement to Sell dated 26.05.2010, or in the

alternative, for compensation of Rs. 1 Crore, pleading:

(I) that the plaintiff and one Sh. Subhash Dhingra were business

partners and owners of property bearing No. 43, Samrat Enclave,

Pitampura, in the ratio of 40% and 60% respectively, vide a registered

Sale Deed dated 18.01.2010 executed in their favor by Smt. Gurdeep

Kaur and Pradeep Kaur;

(II) that subsequently the plaintiff and his partner Sh. Subhash

Dhingra sold the aforesaid property to the defendant for a total sale

consideration of Rs.48,00,000/- vide a registered Sale Deed dated

29.05.2010;

(III) that thereafter the plaintiff agreed to purchase back from the

defendant, the first floor (without roof rights) of the aforesaid

property (hereinafter referred to as the suit property) for a total

consideration amount of Rs.50,00,000/- and the parties executed the

Agreement to Sell dated 26.05.2010 for the said purpose;

(IV) that as per the said Agreement to Sell, the defendant received a

sum of Rs.30,00,000/- from the plaintiff as earnest money amount,

with the balance being payable at the time of handing over possession

of the suit property by the defendant to the plaintiff and execution of

sale/transfer documents with regard thereto;

(V) that though the defendant had promised to hand over

possession of the suit property upon its construction, which was to be

completed within a year, the defendant did not even commence the

construction of the first floor and had not even got the building plan

sanctioned from the MCD for the said purpose till the time of

institution of the suit;

(VI) that 19 months had lapsed since the Agreement to Sell was

executed between the parties and the defendant had all along

deliberately avoided performance of his obligations under the same;

(VII) that the plaintiff is ready and willing to pay the remaining

amount of Rs.20,00,000/- but the defendant is not willing to transfer

the suit property in favor of the plaintiff;

(VIII) that on 27.07.2011, the defendant along with her husband Sh.

Surjit Singh, in response to a legal notice dated 26.07.2011 got sent

by the plaintiff calling upon them to perform their obligations under

the contract, agreed to register the Sale Deed by 01.08.2011 and

requested the plaintiff to tender the balance payment of

Rs.18,00,000/- (at a concession of Rs.2,00,000/- for delay) with the

assurance that the cheques so issued for the said purpose would not be

presented by them prior to execution of Sale Deed;

(IX) that however the plaintiff was shocked to learn that the cheques

so issued by him and one Sh. Jagdish Singh (a relative of the plaintiff)

for Rs.10,00,000/- & Rs.8,00,000/- respectively in favour of the

plaintiff, had been presented for payment before the agreed date and

been dishonored on account of insufficient funds;

(X) that when the plaintiff attempted to bring up the said matter

with the defendant, she harassed and intimidated him with the threat

that she would put him behind bars under a forged case of cheating;

(XI) that the plaintiff thus filed a Criminal Compliant under Section

200 of the Cr.P.C. against the defendant and her associates, and which

is pending disposal before Ms. Manika Sehrawat, MM, New Delhi.

2. Summons of the suit were issued and upon non-appearance of the

defendant, the defendant was proceeded ex-parte on 23.02.2012.

3. The plaintiff has led his ex-parte evidence by examining himself as

the sole witness. The contents of the affidavit filed by the plaintiff in

evidence are a reiteration of the averments in the plaint culled out above.

The plaintiff, in addition, has tendered the following documents in evidence

to support his case:

I. Photocopy of Sale Deed dated 18.01.2010 in favor of the plaintiff

and his partner, exhibited as PW1/1;

II. Photocopy of Sale Deed dated 28.05.2010 executed by the

plaintiff and his partner in favor of the defendant, exhibited as

PW1/2;

III. Original Agreement to Sell dated 26.05.2010 between the plaintiff

and the defendant along with receipt of payment executed by the

defendant for Rs.30,00,000/-, exhibited as PW1/3 (Colly.);

IV. Copy of Legal Notice dated 26.07.2011 sent to the defendant

along with postal receipts thereof, exhibited as PW1/4, PW1/4A

and PW1/4B respectively;

V. Original Bank Statement of the plaintiff from 01.07.2011 to

29.07.2011 to evidence the presentation and dishonor of two

cheques of Rs.10,00,000/- and Rs.8,00,000/-; exhibited as PW1/5;

VI. Complaint dated 30.07.2011 addressed to the Station House

Officer, Police Station Hauz Khas, exhibited as PW1/6, and;

VII. Compliant dated 30.07.2011 addressed to the D.C.P/A.C.P,

Economic Offences Wing, exhibited as PW1/6A.

4. When the matter was listed for ex-parte hearing on 01.11.2013, this

Court adjourned the matter directing the plaintiff to satisfy it regarding

whether a decree for specific performance can be granted with respect to a

first floor, when no construction at all has been raised by the defendant on

the plot in question and there is no first floor in existence. The plaintiff, to

address the query posed by this Court, relies on Canara Bank Vs. K.L.

Rajgariha 157 (2009) DLT 344, Silvey Vs. Arun Varghese AIR 2008 SC

1568 and M.K. Sehgal Vs. Mohinder Kaur MANU/DE/8651/2006.

However, a perusal of the judgments reveals that none of them bear any

relevance to the issue flagged by this Court on 01.11.2013. I may also

notice that Canara Bank supra has been overruled vide judgment dated

08.05.2012 of the Division Bench of this Court in RFA(OS) NO.47/2009

titled K.L. Rajgarhia Vs. Canara Bank, though S.L.P. No.26205/2012

thereagainst stands granted.

5. The Agreement to Sell dated 26.05.2010, of which specific

performance is sought, simply provides for sale of the suit property for a

consideration of Rs.50,00,000/- and records that the "second party

(plaintiff) shall pay balance amount of Rs.20,00,000/- to the first party

(defendant) at the time of completion of construction work and handing

over the possession of the complete constructed property under sale to the

second party (plaintiff)". There are no other terms or details in the

Agreement pertaining to the nature, extent or scale of such „construction

work‟ to be undertaken for bringing into existence the suit property agreed

to be sold. The Agreement also fails to specifically mention the party on

whom the responsibility of construction and obtaining necessary

sanctions/approvals therefor would rest or the time frame within which the

construction is to be completed (though the plaintiff has pleaded that the

defendant had agreed to hand over the suit property within a year, there is

no mention of the same in the Agreement). In fact, the Agreement does not

even record whether the land upon which the suit property was to be

constructed was vacant or if there was already any construction thereupon.

6. In my opinion, an agreement bereft of such vital particulars, even if

assumed to be not attracting Section 29 of the Indian Contract Act, 1872

which renders such agreements void for uncertainty, definitely cannot be

permitted specific enforcement.

7. It is to be noted that though Section 14(3)(c) of the Specific Relief

Act, 1963 empowers the Courts to grant enforcement of any contract which

entails the construction of any building or the execution of any other work

on land, but the proviso thereto stipulates that for the Courts to exercise

such power, such building or other work must be described in the contract in

terms sufficiently precise to enable the Court to determine the exact nature

of the building or work.

8. It is evident that the Agreement to Sell dated 26.05.2010 is woefully

short of details or particulars to enable this Court to even vaguely determine

the nature of the building or work, if any, which is required to be undertaken

to bring the suit property into existence. The prayer for specific performance

therefore has to be necessarily refused.

9. The plaintiff has in the alternative sought compensation of Rs.1 crore

on account of increase in the price of the suit property. However, no

evidence has been led to support such a claim. Though the Agreement to

Sell dated 26.05.2010 also permits the plaintiff, in the event of breach by the

defendant, "to recover the double amount of earnest money", but the

plaintiff has not placed any reliance on the said clause for award of the

compensation sought and further even such a clause for payment of a

liquidated sum requires some proof of damages (see my judgment in

Praveen Oberoi Vs. Raj Kumari MANU/DE/0056/2014). In such

circumstances, the plaintiff cannot be held to be entitled to anything more

than refund of the amount already advanced under the Agreement, and the

receipt of which by the defendant stands proved as Exhibit PW1/3. The rate

of interest accompanying repayment however shall be a notch above the

prevailing market rate to factor in any damages flowing from increase in

property prices in the interregnum. I may also notice that though the

plaintiff has made a claim for Rs.1 crore but has neither valued the suit for

the said relief nor paid any court fees thereon.

10. The plaintiff is accordingly permitted recovery of Rs.30,00,000/- paid

as earnest money under the Agreement to Sell along with interest from the

date of such payment viz. 26.05.2010 till realization of the amount, at 14%

per annum. The plaintiff shall also be entitled to costs of the suit with the

counsel‟s fees quantified at Rs.15,000/-.

Decree Sheet be drawn up.

RAJIV SAHAI ENDLAW, J.

APRIL 02, 2014.

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