Ashwini Kumar Verma vs Vijay Tandon & Ors
2014 Latest Caselaw 1916 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Date of decision: 16th April, 2014.

+                                 CS(OS) 1743/2008

       ASHWINI KUMAR VERMA                        ..... Plaintiff
                   Through: Ms. Anjana Prabhakar, Advocate.

                                  Versus

       VIJAY TANDON & ORS                                 ..... Defendants
                   Through:             Mr. Manav Gupta & Ms. Esha Dutta,
                                        Advocates.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

I.A. No.6818/2014 (of defendants u/O 14 R-5 CPC)

1.

The plaintiff has instituted this suit for specific performance of an oral

Agreement to Sell by the defendants of sale of property No.39, Mandakini

Enclave, Alaknanda, New Delhi to the plaintiff for a total sale consideration

of Rs.35 lakhs out of which the plaintiff claims to have paid a sum of Rs.5

lakhs as token money (bayana).

2. Since the suit was not accompanied with any application for interim

relief, the same was listed before the Joint Registrar and summons of the

suit were issued to the defendants who filed written statement thereto and to

which a replication was filed by the plaintiff.

3. On the pleadings of the parties, on 22nd February, 2011, the following

issues were framed:

"(i) Whether there is a valid and binding agreement to sell dated 15th June, 2006 between the parties? OPP

(ii) If issue no.1 is answered in favour of the plaintiff, then whether the plaintiff was ready, willing and able to perform the agreement to sell dated 15th June, 2006? OPP

(iii) Whether the plaintiff is in breach of the agreement dated 15th June, 2006? OPD

(iv) Whether the plaintiff is entitled to specific performance of an agreement to sell dated 15th June, 2006? OPD

(v) Relief."

and the suit posted for trial.

4. The counsel for the plaintiff states that the affidavits by way of

examination-in-chief of all the witnesses of the plaintiff have been filed,

though cross-examination has not commenced as yet.

5. The defendants have filed this application which has come up for the

first time today, seeking framing of the following issue:

"Whether the suit for specific performance is maintainable in light of the legal notice dated 5th July, 2006 and rejoinder dated 17th August, 2006 sent by the plaintiff? OPP"

and for the same to be treated as a preliminary issue.

6. The counsel for the plaintiff appears on advance notice.

7. Having gone through the application aforesaid of the defendants and

finding that the issue as proposed does arise and goes to the root of the

claim of the plaintiff for specific performance, I have enquired from the

counsel for the plaintiff as to how, the suit, in the light of the legal notice

and the rejoinder aforesaid issued by the plaintiff prior to the institution of

the suit, is maintainable.

8. The counsel for the plaintiff has fairly agreed to address arguments on

the aspect of maintainability of the suit today itself. The counsels have been

heard.

9. The plaintiff, prior to the institution of the suit, issued a legal notice

dated 5th July, 2006 to the predecessor in interest of the defendants and has

along with the plaint filed an office copy of the same. The said notice was

issued by the same counsel who is appearing for the plaintiff today. Since,

much turns on the language of the said notice, it is deemed appropriate to set

out the same in its entirety herein below:

"Sir,

On behalf and instruction of my client Shri Ashwani Kumar Verma, r/o 39, Mandakini Enclave, Alaknanda, New Delhi, I am sending you the legal notice on following facts :

1. That my client, who is an Executive with M/s Duncan Industries, is your tenant in the above said premises, vide Licence Agreement for rent of Rs.5000/- per month and Hire Agreement rent of Rs.4000/- per month dated April 2002. These agreements expired on 31st March, 2003. However, the same were renewed for a period of three years with the consent

of both the parties 19th July, 2003. The same had expired on 31st March, 2006. It is pertinent to mention that three months advance rent and security deposit of Rs.27,000/- is in your possession for both the abovesaid agreements.

2. That you had expressed your desire to sell your flat to my client in April 2006 for Rs.35,00,000/- (Rupees Thirty Five Lakhs only) that you had verbally instructed my client to pay the amount of Rs.5,00,000/- (Rupees Five Lakhs only) as token money (Byana) with immediate effect.

3. That my client was constrained to take personal loan from HSBC Bank @ 15% p.a. to fulfil your direction and presented you a cheque bearing No.337881 dated 24.04.06 drawn on ICICI Bank, amounting Rs.5,00,000/- (Rupees five lakhs only) in your name which was duly encashed by you as it was credited in your account on 03.05.06. My client had requested you to instruct him the payment schedule for the rest of the amount to be paid to you. However, you had informed my client that you will be away on a vacation to USA for two months. And you will convey the schedule of payment only when you get back.

4. That your son Mr. Vijay Tandon suddenly started giving telephonic and SMS message to my client indicating that the verbal deal of selling the flat has been called off as you are getting better price for the flat now. Your son had been threatening my client to evict the premises within two or three days as the new deal has to be formalised and the buyer has to take possession of the flat.

5. That my client Mr. Ashwani Kumar Verma had requested him to give at least one month notice of eviction and return the amount of Rs.5,00,000/- which you had got in your possession as token money for selling your flat to my client. Your son had expressed his inability to return the amount and conveyed that the amount will be given only after deduction at the time of eviction of premises by my client.

6. That there are no deductions as you have already got three months rent in advance which has settled the rent amount from 1st April 2006 to 30.06.06. My client had incurred expenditure of Rs.40,000/- for renovating the flat for which he has sufficient proof by way of bills etc. in his possession. However, my client is ready and willing to adjust the rent of July & August 06, as he will be able to give the vacant possession of the flat only on 31st August 2006. The amount will be adjusted after deducting the expenditure incurred by him in renovating the flat.

7. That I put it you that by calling off the verbal agreement to sell the flat, you have put my client to lot of personal and financial inconvenience/harassment. My client was constrained to take personal loan from HSBC Bank for buying flat on interest @ 15% p.a., which he has to pay on monthly basis. The amount of Rs.5,00,000/- (Rupees Five Lakhs only) is in your illegal possession, as you do not incline to sell the flat to my client. In addition to this you have unilaterally called off the verbal agreement to sell your flat to my client, without any reasonable cause and totally on your whims and fancies.

I call upon you to return the principal amount of Rs.5,00,000/- (Rupees Five Lakhs only) @ 18% p.a. and amount of Rs.20,000/- for causing harassment and litigation charges to my client, who has to now invest fresh amount elsewhere to buy a Residential Flat at higher rate, within 10 days of receiving this legal notice, failing to which my client has instructed me to proceed against you in court of law for violating various provisions of Code of Civil Procedure and Indian Penal Code for your illegal acts of cheating and misappropriation of the abovesaid huge amount of my client with malafide intention to usurp the same.

The copy of this notice is kept in my office for further reference.

Sd.

ANJANA PRABHAKAR"

10. The defendants, though did not reply to the aforesaid notice, got sent

a notice dated 27th July, 2006 of eviction to M/s. Duncan Industries Limited

and M/s. Duncans Tea Limited to whom the defendants claimed to have let

out the said flat and in lieu of which letting the defendants claimed the

plaintiff to be in occupation of the flat as an employee of the said

companies. Though the said notice dated 27 th July, 2006 was not addressed

to the plaintiff, but the plaintiff got sent a "rejoinder" dated 17 th August,

2006 thereto and since again, much turns on the language thereof also, it is

deemed appropriate to set out the same also herein below in its entirety.

"To Mr. Rahul Pandya Advocate A-306, Sujal Apt., Ramdev Nagar, Satelite Road, Ahmdabad-380015.

Rejoinder to reply dated 27th July 2006 to the legal notice dated 05.07.06 sent on behalf of my client Mr. Ashwani Verma.

Sir,

My client had received your much delayed reply dated 27.07.06 on 12th August 2006. My client has instructed me to send rejoinder to the reply, which is not only sent on wrong facts but also an attempt to usurp a huge amount of Rs.5,00,000/-

(Rupees Five Lakhs only) with malafide intentions:

The rejoinder to the reply dated 7.07.06 is on the following facts:

1 to 3. The contents in these paras are absolutely wrong thus denied. The legal notice dated 05.07.06 is very specific demand notice to return the amount of Rs.5,00,000/- (Rupees Five Lakhs) with interest @ 18% till the day when the amount is received by my client. In addition to this my client had demand the amount of Rs.20,000/- for causing harassment and litigation charges. The mere denial by your client without any specific documentary proof and without any explanation, are not sufficient.

4. That the contents of this para are absolutely wrong thus denied. It is specifically denied that amount of Rs.27,000/- was not deposit of advance rent in Licence Agreement and Hire Agreement. The rent of Rs.27,600/- had been deducted from the pay of my client in the month of July, 2006. Therefore, your mere denial of not receiving the rent till June 2006 has been proved wrong by the documentary proof in possession of my client.

5 & 6. That the contents of this para of your reply are absolutely wrong thus denied. It is specifically denied that amount of Rs.61,00,000/- (Rupees Sixty One Lacs) were verbally agreed for the purchase of flat by my client. On the contrary the agreed amount was Rs.35,00,000/- (Rupees Thirty Five Lakhs only)) and Rs.5,00,000/- (Rupees Five Lakhs only) was received by your client. It was mutually agreed that remaining amount of Rs.30,00,000/- (Rupees Thirty Lakhs only) will be given at the later stage. It is specifically stated that your son Vijay Kumar Tandon had sent SMS Communications to my client and had insisted for yet another amount to be paid as remaining amount for the flat. Therefore, your averments for the amount of the Rs.61,00,000/- (Sixty One Lakhs only) was the amount agreed for the sale of flat is not only wrong but

highly inflated with malafide intention to extort huge amount from my client. It is specifically denied that it was mutually and verbally agreed that amount of Rs.5,00,000/- (Rupees Five Lakhs only) will be forfeited if the payment is not received on or before 15.06.06 and my client will not be able to claim the said amount in future. It is specifically stated that your client with malafide intentions to usurp the huge amount has unilaterally decided to call off the contract and unilaterally decided to forfeit advance money of Rs.5,00,000/- (Rupees Five Lakhs only). It is also specifically stated that my client had neglected to pay the amount of Rs.56,00,000/- (Rupees Fifty Six Lakhs only).

7 & 8. That the contents of these paras are absolutely wrong thus denied and the contents of para 4 & 5 of the legal notice are reiterated. It is specifically stated that contents in para No.5 of the legal notice are not vague but very specific and my client has proof of the same in his possession which clearly indicate the malafide intentions of your client and his son.

9 & 10. That contents of these paras are absolutely wrong thus denied. It is reiterated that my client has all the proofs of alterations and renovations which are to be deducted from the advance rent only. It is specifically denied that my client is in illegal possession of the flat and your client will be constrained to take civil, criminal proceedings against my client. On the contrary my client will immediately initiate proceedings against your client for his unilaterally vitiating the agreement and will face proceeding for specific performance and criminal proceedings for misappropriate the amount of Rs.5,00,000/- (Rupees Five Lakhs only). It is also specifically denied this your client gave several reminders for the payment of the remaining amount of Rs.56,00,000/- (Rupees Fifty Six Lakhs only) and my client neglected to pay the remaining amount as per the mutual agreement the advance payment was forfeited and the said oral agreement was null and void.

12 & 13. That the contents of these paras are wrong thus denied. You have malafidely worded the "reply" as "Notice" my client would be giving appropriate reply to whatever legal notice, if, he receives from your client in future in counter-blast to the legal notice dated 05.07.06.

It is reiterated that you instruct your client to return the principal amount of Rs.5,00,000/- (Rupees Five Lakhs) with interest @ 18% till the amount is received by my client and additional amount of Rs.20,000/- within a week of receiving this communication, failing which my client has further instructed me to proceed against your client in court of appropriate jurisdiction for your acts of misappropriation, cheating and for violating the various provisions of Code of Civil Procedure and violation of specific performance of contract.

The copy of this rejoinder is kept in my office for reference in proceedings in court of law.

Sd.

ANJANA PRABHAKAR"

11. Needless to state, the plaintiff in the plaint has pleaded and has also

referred to the aforesaid notice dated 5th July, 2006 and "rejoinder" dated

17th August, 2006.

12. What is unequivocally borne out from the above is that the plaintiff,

owing to the defendants having "called off the verbal agreement to sell the

flat" to the plaintiff, demanded from the defendants refund of the amount of

Rs.5 lakhs paid to the defendants as token money/bayana, along with

interest and a sum of Rs.20,000/- by way of damages. The plaintiff

reiterated the said position in the "rejoinder" dated 17th August, 2006 also.

The question which arises is, whether a purchaser, who, prior to the

institution of the suit for specific performance, has sought refund of the

advance/earnest money/token money/bayana paid, is still entitled to

maintain a claim for specific performance. If it were to be the position that

such a plaintiff is not entitled to maintain a claim for specific performance, I

fail to see as to what purpose would be served in allowing the suit to

languish and to go through the rigmarole of trial.

13. I find the question to be no longer res integra.

14. A Division Bench of this Court in Gopal Devi Vs. Kanta Bhatia AIR

1994 Delhi 349, referring to Adeshir M. Mama Vs. Flora Sassoon AIR

1928 PC 208, Sundarramayyar Vs. K. Jagdeeshan AIR 1965 Madras 85

and Ayissabi Vs. Gopala Konar AIR 1989 Kerala 134 held that where the

plaintiff prior to the institution of the suit for specific performance issues

notice claiming double the amount of the earnest money, the plaintiff is not

entitled to the relief of specific performance.

15. I have in Rajiv Mehra Vs. Sudhir Kumar Sachdeva

MANU/DE/0150/2009 (against which no appeal is found to have been

preferred), following the said judgments held that once it is found that the

plaintiff seeking specific performance was willing to let go of the

Agreement to Sell, such a plaintiff under Section 16(c) of the Specific Relief

Act, 1963 cannot enforce the Agreement to Sell inasmuch as the demand for

refund of advance sale consideration is in contravention of the requirement

of being always ready and willing to perform the essential part of the

contract.

16. The same view was taken by me in Chameli Farms Pvt. Ltd. Vs.

DDA MANU/DE/4345/2011 and appeal whereagainst being LPA

No.143/2012 also titled Chameli Farms Pvt. Ltd. Vs. DDA was dismissed

by the Division Bench vide judgment dated 27th February, 2012.

17. Similarly, in Madan Lal Bansal Vs. Roshan Lal Singla 153 (2008)

DLT 278, it was held that a purchaser plaintiff has two options, either to

seek specific performance of the Agreement to Sell or to seek refund from

the seller defendant of the earnest money/advance or double thereof if the

contract so provides and once a purchaser plaintiff has elected for

refund/double the earnest money, he cannot be permitted to change his mind

and having once elected to abandon the Agreement and to sue for

refund/double the earnest money, is not entitled to the relief of specific

performance.

18. The counsel for the plaintiff has in this regard invited attention to

paras 9 & 10 and concluding para of the "rejoinder" dated 17 th August,

2006, where the plaintiff has also threatened the defendants with an action

for specific performance and has contended that the plaintiff was thus

seeking specific performance and not refund.

19. I am unable to agree. The notice dated 5th July, 2006 of the plaintiff

was unequivocal and only called upon the defendants to refund the sum of

Rs.5 lakhs with interest and damages. Though the plaintiff in the rejoinder

dated 17th August, 2006 used the word „specific performance‟ but in the

context of non-refund of Rs.5 lakhs with interest and damages claimed.

20. The case law hereinabove cited is squarely applicable.

21. While the order is being dictated, the counsel for the plaintiff has also

invited attention to paras 5 & 6 of the notice dated 5 th July, 2006 but the

same also do not convey the readiness and willingness of the plaintiff to

perform his obligations under the contract and are merely by way of recitals

to the demand ultimately made in the notice.

22. The matter is thus squarely covered by the judgments aforesaid and

the plaintiff in accordance therewith is not entitled to the relief of specific

performance which is the only relief claimed in the plaint. The plaintiff

though has in addition to the relief of specific performance also claimed the

relief of compensation of Rs.1 lakh but once it is found that the plaintiff

himself was not ready and willing to perform his part of the Agreement to

Sell, the question of the plaintiff being entitled to any compensation from

the defendants does not arise.

23. The counsel for the plaintiff at this stage also argues that it is the

matter of evidence, whether the plaintiff backed out from the agreement or

the defendants.

24. The aforesaid argument is also misconceived. As aforesaid, the

plaintiff, prior to the institution of the suit having clearly claimed merely the

refund of Rs.5 lakhs and having not sought specific performance, was not

entitled to sue for specific performance. No evidence is required on the said

aspect.

25. Before parting with the case, I may also record that there is no

document to show the total price orally agreed between the parties; while

the plaintiff claims the price agreed to be of Rs.35 lakhs, the defendants

claim the price agreed to be of Rs.61 lakhs.

26. The application of the defendants is allowed and the suit is thus

dismissed as not maintainable. The plaintiff is also burdened with costs of

Rs.20,000/- for having engaged in frivolous litigation.

27. Decree sheet be drawn up.

28. The date of 29th April, 2014 before the Joint Registrar is cancelled.

RAJIV SAHAI ENDLAW, J.

APRIL 16, 2014.

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