Sourabh Taparia vs Lalit Kumar
2014 Latest Caselaw 3433 Del

$~36
*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+       CS(OS) 581/2013
        SOURABH TAPARIA                         ..... Plaintiff
                    Through: Mr. Gyan Mitra, Adv.

                             versus

        LALIT KUMAR                                ..... Defendant
                             Through: Mr.S.N. Gupta and Mr.Sahil Dhawan, Advs.

        CORAM:
                  HON'BLE MR. JUSTICE G.S.SISTANI
                      ORDER

%                     31.07.2014
IA NO. 8325/2014

1. Plaintiff has filed the present suit under the provisions of Order XXXVII of the Code of Civil Procedure. The suit is based on an agreement to sell dated 10.7.2012 with respect to sale of property bearing No. 535/5 (Old) and new No.IX/6184, measuring area 50 sq. yds., out of Khasra No. 823/611-612/64/2/1, situated in Abadi Gali No.2, Jain Mandir Gali, Gandhi Nagar, Village Sellampur, Illaqa Shahdara, Delhi. Defendant being the absolute owner, had agreed to sell the said property with all rights, title and interest, etc. upto second floor for a total consideration of Rs. 2,70,00,000/-.

2. As per the plaint, Rs.30,00,000/- was paid as earnest money by the plaintiff to the defendant. After receiving the earnest money, the defendant was trying to wriggle out of the agreement and despite repeated requests by the plaintiff, the defendant has not returned the sum of Rs.30,00,000/-.

3. Further, the plaintiff also sent a legal notice dated 05.01.2013 to the

defendant, calling upon the defendant to repay the advance amount of Rs. 30,00,000/- with a penalty of Rs. 30,00,000/- as per terms and condition of agreement to sell, on the basis that the defendant failed to perform his part of obligation, wherein he undertook to repay double of the advance amount of Rs. 30,00,000/-, in case he failed to perform his part of obligation and execute sale deed within stipulated period, but the defendant did not return the advance money. Defendant replied to the said notice taking false and vague stand though he admitted receipt of advance of Rs. 30,00,000/- as part sale consideration.

4. Counsel for the defendant submits that the suit of the plaintiff is liable to be dismissed, as the plaintiff has not approach this court with clean hands. The plaintiff has suppressed and withheld the material facts from the court and on this ground alone the defendant is entitled to unconditional leave to defend.

5. In the application for leave to defend it is pointed out that initially the parties had entered into an agreement for 50 Sq. Yds. Subsequently, as the plaintiff was unable to make arrangement for the total sale consideration of Rs.2,70,00,000/-, the plaintiff suggested that a sale deed may be executed for 25 Sq. Yds and it was agreed that the earnest money of Rs.30,00,000/- would be adjusted towards the sale consideration of the sale deed of half of the property. Consequently a sale deed in respect of half of the property measuring 25 sq. yds. was executed on 12.10.2012 giving adjustment to the said earnest money.

6. Counsel for the applicant submits that the legal notice sought to be relied upon by the plaintiff is undated which was issued on 3.11.2013 i.e. after the sale deed was executed for 25 Sq. Yds on 12.10.2012 and after the entire earnest money was adjusted. Counsel has also relied upon an undertaking and affidavit signed by the plaintiff wherein the plaintiff has

categorically stated that he has no claim left for the remaining 25 Sq. Yds.

7. Mr.Gupta submits that the undertaking is a clear indication that Rs.30,00,000/- stood adjusted. It is also submitted that all these facts have not been stated in the plaint.

8. Counsel prays for unconditional leave to defend the suit as vital and material facts have been suppressed and withheld from the Court. Statement of the plaintiff has been recorded.

9. I have heard counsel for parties and given my thoughtful consideration to the matter. The present suit has been filed under the provisions of Order XXXVII of the Code of Civil Procedure based on a written agreement. The original agreement has not been placed on record by the plaintiff. It is stated by counsel for the plaintiff that the original agreement has been lost. The photocopy of the agreement which is relied upon by the plaintiff would show that plaintiff had agreed to purchase the property bearing No.535/5 (Old) and new No.IX/6184, measuring area 50 sq. yds., out of Khasra No. 823/611-612/64/2/1, situated in Abadi Gali No.2, Jain Mandir Gali, Gandhi Nagar, Village Sellampur, Illaqa Shahdara, Delhi. The total sale consideration was fixed at Rs.2.70 crores; earnest money of Rs.30.0 lacs was paid in cash by the plaintiff to the defendant; another sum of Rs.30.0 lacs was to be paid by 10.10.2012 and the balance amount of Rs.2.10 crores was to be paid at the time of delivery of vacant physical possession.

10. As per the plaint, the plaintiff approached the defendant with Rs.30.0 lacs on 7.10.2012, but the defendant was not available. Plaintiff also informed the defendant on a number of occasions that he had arranged the balance amount, but the defendant was not positive to complete the transaction. It has also been averred in the plaint that the plaintiff visited the office of Sub-Registrar with all preparations including balance sale consideration

on 9.11.2012 and waited for the defendant, but the defendant did not reach the office of Sub-Registrar. A legal notice was served on the defendant.

11. The defendant has sought unconditional leave to defend on the ground that the plaintiff has suppressed and withheld the material facts, the plaintiff has not approached this court with clean hands. In fact it is the plaintiff, who did not have the funds to complete the transactions and thus the plaintiff requested the defendants to sell 25 sq. yrds. out of 50 sq. yrds. The request of the plaintiff was agreed, the defendant executed a sale deed in favour of the plaintiff and the sum of Rs.30.0 lacs paid as earnest money stood adjusted. It is also the case of the defendant that the original agreement to sell was torn, since the transaction could not be completed and the plaintiff signed an undertaking duly attested before the Notary Public that in future he and his legal heirs are left with no claim of any kind regarding the other shop in any court of law by virtue of the agreement to sell dated 10.7.2012.

12. Mr. Gupta, counsel for the defendant submits that the suit under Order XXXVII C.P.C. is not maintainable. The suit is neither based upon bills of exchange, hundies and promissory notes nor to recover debt or liquidated demand in money arising out of a written contract or an enactment, where the money sought to be recovered is fixed sum of money or in nature of debt other than a penalty or a guarantee.

13. It is further submitted that in the instant case the money paid by the plaintiff was got adjusted towards the sale consideration of a shop purchased by the plaintiff from the defendant under the same agreement under which an amount is claimed to have been paid to the defendant by the plaintiff. The plaintiff has concealed this very material fact from this Hon'ble Court and is liable to be non-suited on this ground alone.

14. Counsel also submits that the Earnest money paid by the plaintiff was liable to be forfeited but defendant being a peaceful Law Abiding citizen agreed to plaintiff's request and consequently executed the Sale Deed in respect of Half of his property measuring 25 sq. Yds on 12/10/2012 after giving adjustment of the above mentioned Earnest money amounting to Rs.30,00,000/- and delivered the peaceful vacant possession of the property that is subject matter to the above Sale Deed to plaintiff.

15. Mr.Gupta further contended that the plaintiff has made a false statement that the Original Agreement to Sell has been lost. In fact the plaintiff along with his father Sh. Shiv Rattan Taparia torn off the original Agreement Deed and printed copy thereof in the presence of defendant and witnesses of the Sale Deed present in Sub Registrar Office at the time of Execution of Sale Deed.

16. It is also submitted that the plaintiff further gave an affidavit/undertaking to defendant in writing dully signed, executed and attested inter-alia stating:-

"2. Due to some circumstances and causes I agreed to purchase only one shop, measurement 8.25 ft. x 27 ft (approx.) of ground floor, with roof rights, bearing above said property no.535/5 (old), and New No.IX/6184, situated at Gali No. 2 Jain Mandir Gali, Gandhi Nagar, Delhi-110031, and bounded as under:-

                  North :-    Portion of the said property No.IX/6184
                  South :-    Remaining Portion
                  East :-     Others Property
                  West :-     Gali Jain Mandir, Gali No.2

And the said seller Sh. Lalit Kumar (H.U.F.) agreed with the same.

3. I hereby assure and undertake to the said Sh. Lalit Kumar that in future I and my legal heirs shall have left no any claim of any kind regarding the said another shop in any Court of Law towards him by virtue of said agreement to sell executed on

10/07/2012."

17. Thus plaintiff gave up all his right under the agreement and got adjusted the earnest money towards the Sale Consideration of the Sale Deed and that is why the Original Agreement was torn off and an Affidavit/undertaking was got signed and executed by the Deed writer from the plaintiff.

18. It is submitted that all the above facts were suppressed by the plaintiff, which shows the malafide intention of the plaintiff.

19. In the case of M/s. Mechalee Engineers & Manufacturers Vs. M/s. Basic Equipment Corporation reported at AIR 1977 SC 577 has drawn up the parameters to be considered by the court while dealing with the application for leave to defend. Relevant paras of the judgment read as under:

"8. In Smt. Kiranmoyee Dassi and Anr. v. Dr. J. Chatterjee 49 C.W.N. 246 , Das. J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by order 37 C.P.C. in the form of the following propositions (at p.

253):

(a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend.

(b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend.

(c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear

that he has a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.

(d) If the Defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend.

(e) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the Plaintiff is entitled to leave to sign judgment, the Court may protect the Plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to prove a defence."

20. Applying the settled law to the facts of the case, it is noticed that the plaint is completely silent with respect to the plaintiff purchasing 25 sq. yrds. out of 50 sq. yrds. which was the subject matter of the agreement to sell dated 10.7.2012; the documents placed on record show that the plaintiff had addressed a legal notice to the defendant dated 9.10.2012, postal receipts placed on record show that this legal notice was dispatched on 3.11.2012. The legal notice shows that the plaintiff had prepared four bank drafts in the name of the defendant totalling to a sum of Rs.30.0 lacs. Two bank drafts in the sum of Rs.7.50 lacs each bearing 195686 and 195687 both dated 6.10.2012 were part of the sale consideration of the sale deed executed by the defendant in favour of the plaintiff, which is evident from a copy of the sale deed handed over in court today by counsel for the defendant. In case the plaintiff was aggrieved by the

conduct of the defendant and the plaintiff had decided to issue a legal notice to the defendant there was no explanation why the plaintiff used two bank drafts which were reflected in the legal notice dated 9.10.2012. The conduct of the plaintiff also shows that after the sale deed for 25 sq. yrds. was executed on 12.10.2012 why legal notice dated 9.10.2012 was posted on 3.11.2012. There is also no explanation on the part of the plaintiff either during the course of argument or in the statement made under Order 10 in Court today.

21. It may also be noticed that the statement of the plaintiff was recorded in court, wherein he has admitted that a sale deed was executed in respect of 25 sq. yrds. The statement reads as under:

"Statement of Shri Saurabh Taparia S/o Sh. Shiv Ratan Taparia, aged about 33 years, R/0 X/1803, Rajgarh Colony, Delhi-110031. On S.A.

I entered into an agreement with the defendant on 10.7.2012 for purchase of built-up property No.535/5 (Old), new No. being IX/6184, measuring 50 Sq. Yds. I have filed a copy of the said agreement. A total sale consideration was fixed at Rs.2,70,00,000/- out of which I paid Rs.30,00,000/- as bayana in cash. Thereafter a sale deed was executed with respect to 25 Sq. Yds. for which I paid a sum of Rs.1,05,00,000/-. Two bank drafts in the sum of Rs.7,50,000/- each bearing No.195686 and 195687 which were issued on 6.10.2012 by Oriental Bank of Commerce, Raj Garh Colony, Delhi were also handed over to the defendant but I did not adjust Rs.30,00,000/- which were paid as bayana. Again said, I paid Rs.30,00,000/- as bayana and Rs.1,05,00,000/- in cash and further I handed over four bank drafts. Two of which are mentioned in the sale deed and other two bank drafts were handed over to the defendant. Further Rs.30,00,000/- was paid by me as bayana in cash.

I identify my signatures on the undertaking at point A and A1. At the time of signing the undertaking, I did not mention that Rs.30,00,000/- is still to be recovered by me from the defendant."

22. Prima facie the dishonesty of the plaintiff is writ large on the face of the record. The plaintiff has not been able to render any explanation neither the plaintiff has been able to render explanation with regard to the undertaking signed by him, a copy of which has been handed over in court.

23. Apex Court in the case of S.P.Chengalvaraya Naidu vs. Jagannath reported at AIR 1994 SC 853 observed as under:

"........ A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party."

24. In order to establish the case for unconditional leave to defend, the applicant must ensure that he has a strong, cogent and reasonable defence and, to the contrary, in case the defence is false and stands to moonshine the plaintiff is entitled to a decree.

25. The grounds raised in the application for leave to defend require consideration, which can only be decided on the basis of evidence on record and not in summary proceedings. I am of the view that the defendant has been able to establish a good defence to the claim on the merits. The defendant has also raised triable issues indicating that he has fair, bona fide and reasonable defence. Thus the defendant is entitled to unconditional leave to defend.

26. Application stands disposed of.

CS(OS) 581/2013

27. Written statement be filed within 30 days. Replication be filed within 30

days thereafter.

28. List the matter before the Joint Registrar on 3.9.2014.

29. List the matter before Court on 27.10.2014.

G.S.SISTANI, J JULY 31, 2014 ns