Delhi High Court
Jafar Imam vs Devender Chauhan & Others on 15 May, 2014
IN THE HIGH COURT OF DELHI AT NE W DELHI
Order Reserved on: 26 th March, 2014
Order Pronounced on: 15 th May, 2014
CS(OS) 1843/2013
J AFAR I MAM ..... P LAINTIFF
Through Mr. Kamal Mehta with Mr.
Sudeep Singh, Advocates.
versus
D EVENDER C HAUHAN & O THERS ..... D EFENDANTS
Through Mr. Nikil Mehra, Advocate for
the Defendant No.1
Mr. Ravi Gupta, Sr. Advocate
with Mr. Ankit Jain, Advocate
for the Defendant No.2.
Mr. Darpan Wadhwa with Mr.
Arjun Syal, Advocates for
Defendant No.5.
CORA M:
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
SANJEEV SACHDEVA, J.
IA No. 20314/2013 in CS(OS) 1843/2013 (By Defendant
No. 2 under Order 7 rule 11 CPC)
1. The Defendant No. 2 has filed the present application
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under order 7 rule 11 of the Code of Civil Procedure
(Hereinafter referred to as the CPC) seeking rejection
of the plaint on the ground that the Plaintiff has not
correctly valued the suit for the purposes of Court fees
and jurisdiction and has not paid the requisite court
fees on the same.
2. The Plaintiff has filed the present suit for specific
performance of agreement to sell dated 15.09.2003.
Along with the relief of specific performa nce the
Plaintiff has claimed cancellation of five sale deeds
dated 20.04.2004, 05.07.2004 and 11.06.2004. The sale
deeds the cancellation of which has been sought by the
Plaintiffs have been executed after the agreement to
sell in favour of the Plaintiff.
3. As per the applicant/Defendant No. 2, the Plaintiff has
sought cancellation of five sale deeds which are
registered at different values and the Plaintiff has
valued the relief for cancellation of the sale deeds at
Rs.200/- each and not at the values mentioned in the
respective sale deeds and has not paid the requisite
Court fees on the same. As per the applicant, since the
Plaintiff is not in possession of the property, the suit
should have been valued on the basis of the
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consideration mentioned in the respective sale deeds
and ad valorem court fees should have been paid there
on.
4. The Plaintiff has opposed the application and has
contended that the Plaintiff has to value the suit for
substantive relief of specific performance and the
consequential/ancillary reliefs of cancellation of sale
deed are all covered in the main relief of specific
performance and do not require separate ad valorem
court fees.
5. Learned counsel for the Plaintiff has relied on the
judgment of the Bombay High Court in the case of
DILIP BASTI MAL JAIN V. B ABBAN AIR 2002 BOMBAY 279
to contend that in a suit for specific performance
substantive relief is the relief of specific performance
of contract and the declaration of invalidity of the sale
deeds in favour of the subsequent transferees is nothing
but an ancillary relief and it is not necessary for the
Plaintiff to ask for any declaration for cancellation of
the sale deeds and as such there was no question of
payment of Court fees in respect of the said relief and
the relief of cancellation of sale deeds would be
superficial and unnecessary.
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6. Learned counsel for the Defendant has relied upon the
judgment in case of J ASMEET V ERSUS S. S URENDER
SINGH; (2009) 159 DLT 517 to contend that in a suit
for cancellation and declaration of sale deeds as null
and void, the Plaintiff is bound to pay court fees on
value of jurisdiction and pay ad valorem court fees.
7. To settle the controversy, it is necessary to determine
the nature of the suit filed by the Plaintiff and the
nature of reliefs claimed. The Plaintiff has sought
specific performance of an agreement to sell and
further cancellation of the sale deed of the purchasers
subsequent to the agreement to sell in favour of the
Plaintiff. If the two reliefs were independent of each
other then the Plaintiff would necessarily have to value
the suit based on the two independent reliefs and pay
the appropriate court fees thereon.
8. In terms of section 7 (x) of the Court Fees Act, 1870,
the Plaintiff has valued the relief of specific
performance on the basis of the sale cons ideration
mentioned in the agreement to sell. The issue relates to
the court fees paid on the relief seeking cancellation of
the sale deeds executed in favour of the purchasers post
the date of the agreement to sell.
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9. The relief of cancellation of the sale deeds is a relief
completely dependent on the relief of specific
performance. The relief of cancellation of sale deeds
cannot be granted independent of the relief of specific
performance. If the relief of specific performance is
refused then the relief of cancellation would
automatically be rejected. It is only when the relief of
specific performance is granted in favour of the
Plaintiff that the Plaintiff would be entitled to claim the
relief of cancellation.
10. The Bombay High Court in the case of D ILIP B ASTI
M AL J AIN (SUPRA) relying upon the decision of the
Supreme Court of India in D WARKA P RASAD SINGH &
O THERS VS H ARIKANT P RASAD SINGH & O THERS AIR
1973 SC 655 laid down that in order to decide the
question relating to the pecuniary jurisdiction of the
court, what is required to be seen is the allegations
made, and relief claimed in the plaint.
11. Further it is held that if in a suit the Plaintiff seeks the
substantive relief of specific performance of contract,
the declaration of the invalidity of the sale deed in
favour of the subsequent transferees would be an
ancillary relief. If the Plaintiff is able to establish his
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case of the specific performance against the seller then
it would be enough, if the subsequent transferees are
joined as parties, to the suit because the only decree to
be passed in the suit for specific performance against
the subsequent transferees would be to ask them to join
in conveyance with seller/owner. In that sense, it was
not necessary at all for the Plaintiff to ask for any such
declaration for cancellation of Sale Deed. It would have
been enough for the Plaintiff to have joined them as co-
Defendants so as to contend that the subsequent sale
deeds were not binding on him. The argument that the
relief of declaration prayed for against the subsequent
transferees was required to be valued in terms of
money was rejected.
12. The Bombay High Court in DILIP B ASTI MAL J AIN
(SUPRA ) further relied upon the Judgments in the case
of Vimala Ammal v. C. Suseela, Dwarka Prasad Singh
v. Harikant Prasad Singh, and Durga Prasad v. Deep
Chand wherein it has been laid down that when an
action is brought for specific performance, the
subsequent transferee would be a necessary party to the
suit as the only decree that is required to be passed in
such a suit (for specific performance) is against the
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original vendor. The subsequent transferees are
required to be directed to join in the sale which is
directed by a decree for specific performance of
contract. It has been held that the proper form of decree
is to direct specific performance of the contract
between the vendor and the prior transferee and direct
the subsequent transferee to join in the conveyance so
as to pass on the title which resides in him, to the prior
transferee. He does not join in any special covenants
made between the prior transferee and his vendor, all
that he does is to pass on his title to the prior
transferee.
13. The Bombay High Court in DILIP B ASTI MAL J AIN
(SUPRA ) has laid down that the law as laid down by the
Supreme Court dispenses with the necessity of
obtaining any specific declaration against the
subsequent transferee. It would not, therefore, be
necessary at all to claim a declaration as such. Thus it
was not at all necessary for Plaintiff to claim
declaration of invalidity of transfer of property made in
favour of the subsequent transferees.
14. Clause (b) of Sub-section (1) of Section 19 of the
Specific Relief Act lays down as under:
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"19(1). Except as otherwise provided by this
Chapter, specific performance of a contract
may be enforced against-
(b) any other person claiming under him by
a title arising subsequently to the contract,
except a transferee for value who has paid
his money in good faith and without notice
of the original contract;"
15. The Section speaks of the enforcement only. It does not
speak in terms of a decree being claimed against such
persons. For enforcing the decree of specific
performance, all that is necessary is to implead the
subsequent transferee as a party and the decree is
required to direct the subsequent transferee to be a
party to conveyance to be executed by the origin al
vendor in favour of the vendee.
16. Section 7 of the Court Fees Act 1880 lays down as
under:
"7. Computation of fees payable in certain
suits.-The amount of fee payable under this
Act in the suits next hereinafter mentioned
shall be computed as follows : -
for specific performance.-(x) In suits
for specific performance- (a) of a
contract of sale-according to the
amount of the consideration;"
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17. In respect of suits falling under Sub-section (x) (a), a
departure has been made and liberty has been given to
the Plaintiff to value his suit claim for the purposes of
court-fees according to the amount of the
consideration. The substantive relief claimed in the suit
is not a relief of declaration or the alternate relief
relating to the damages, but is of specific perfor mance
of contract based on agreement of sale as such the suit
claim was is to be valued under Section 7 (x) (a) of the
Court Fees Act according to the amount of
consideration.
18. In D WARKA P RASAD SINGH & O THERS ( SUPRA), the
supreme Court of India following the decision in the
case of L ALA D URGA P RASAD & A NOTHER V. L ALA
D EEP C HAND & O THERS AIR 1954 SC 75, 1954 SCR
360 held that in a suit instituted by a purchaser against
the vendor and a subsequent purchaser for specific
performance of the contract of sale the proper form of
the decree is to direct specific performance of the
contract between the vendor and the Plaintiff and
further direct the subsequent transferee to join in the
conveyance so as to pass on the title which resides in
him to the Plaintiff. The conveyance has to be executed
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by the vendor in favour of' the Plaintiff who seeks
specific performance of the contract in his favour and
the subsequent transferee has to join in the conveyance
only to pass his title which resides in him. It has been
made quite clear that he does not join in any special
covenants made between the Plaintiff and his vendor.
All that he does is to pass on his title to the Plaintiff.
Further the Supreme Court laid dow n that if there are
any special covenants and conditions agreed upon in
the contract for sale between the original purchaser and
the vendor those have to be incorporated in the sale
deed although it is only the vendor who will enter into
them and the subsequent purchaser will not join in
those special covenants. The whole idea and the
purpose underlying a decree for specific performance is
that if a decree for, such a relief is granted the person
who has agreed to purchase the property should be put
in the same position which would have obtained in case
the contracting parties, i.e., vendor and the purchaser
had, pursuant to the agreement, executed a deed of sale
and completed it in every way .
19. The Supreme Court of India in the case o f L ALA
D URGA P RASAD A ND A NOTHER ( SUPRA) noticed that 3
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different practises were being followed by the courts in
India:
37. The practice of the courts in India has not
been uniform and three distinct lines of
thought emerge. (We are of course
confining our attention to a Purchaser's suit
for specific performance). According to one
point of view, the proper form of decree is
to declare the subsequent purchase void as
against the Plaintiff and direct conveyance
by the vendor alone. A second considers
that both vendor and vendee should join,
while a third would limit execution of the
conveyance to the subsequent purchaser.
38. The only statutory provisions which bear on
this point are section 91 of the Indian Trusts
Act, 1882, section 3 of the Specific Relief
Act, 1877, illustration (g), and section 27 of
that Act, and section 40 of the Transfer of
Property Act.
39. Section 91 of the Trusts Act, does not make
the subsequent purchaser with notice a
trustee properly so called but saddles him
with an obligation in the nature of a trust
(because of section 80) and directs that he
must hold the property for the benefit of the
prior "contractor", if we may so describe the
Plaintiff,
"to the extent necessary to give effect
to the contract."
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Section 3 illustration (g) of the Specific
Relief Act makes him a trustee for the
Plaintiff but only for 'the purposes of that
Act. Section 40 of the Transfer of Property
Act enacts that this obligation can be
enforced against a subsequent transferee
with notice but not against one who holds
for consideration and without notice.
Section 27 of the Specific Relief Act does
not carry the matter any further. All it savs
is that specific performance may be
enforced against
(a) either party thereto;
(b) any other person claiming under him
by a title arising subsequently to the
contract, except a transferee for value
who has paid his money in good faith
and without notice of the original
contract.
None of this helps because none of these
provisions directly relate to the form of the
decree. It will there- fore be necessary to
analyse each form in the light of other
provisions of law.
40. First, we reach the position that the title to
the property has validly passed from the
vendor and resides in the subsequent
transferee. The sale to him is not void but
only voidable at the option of the earlier
"contractor". As the title no longer rests in
the vendor it would be illogical from a
conveyancing point of view to compel him
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to convey to the Plaintiff unless steps are
taken to re-vest the title in him either by
cancellation of the subsequent sale or by
reconveyance from the subsequent
purchaser to him. We do not know of any
case in which a reconveyance. to the vendor
was ordered but Sulaiman C. adopted the
other course in Kali Charan v. Janak Deo
A.I.R. 1932 All. 694. He directed
cancellation of the subsequent sale and
conveyance to the Plaintiff by the vendor in
accordance with the. contract of sale of
which the Plaintiff sought. :specific
performance. But though this sounds logical
the objection to it is that it might bring in its
train complications between the vendor and
the subsequent purchaser. There may be
covenants in the deed between them which
it would be inequitable to disturb by
cancellation of their deed. Accordingly, we
do not think that is a desirable solution.
41. We are not enamoured of the next
alternative either, namely, conveyance by
the subsequent purchaser alone to the
Plaintiff. It is true that would have the effect
of vesting the title to the property in the
Plaintiff but it might be inequitable to
compel the subsequent transferee to enter
into terms and covenants in the vendor's
agreement with the Plaintiff to which he
would never have agreed had he been a free
agent; and if the original contract is varied
by altering or omitting such terms the court
will be remaking the contract, a thing it has
no power to do; and in any case it will no
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longer be specifically enforcing the original
contract but another and different one.
42. In our opinion, the proper form of decree is
to direct specific performance of the
contract between the vendor and the
Plaintiff and direct the subsequent transferee
to join in the conveyance so as to pass on
the title which resides in him to the
Plaintiff. He does not join in any special
covenants made between the Plaintiff and
his vendor; all he does is to pass on his title
to the Plaintiff. This was the course
followed by the Calcutta High Court in
Kafiladdin v. Samiraddin A. I. R. 1931 Cal.
67, and appears to be the English practice.
See Fry on Specific Performance, 6th
edition, page 90, Paragraph 207; also Potter
v. Sanders 67 E. R. 1057. We direct
accordingly.
20. The legal position thus emerges is that:
(i) If in a suit the Plaintiff seeks the substantive
relief of specific performance of contract,
the declaration of the invalidity of the sale
deed in favour of the subsequent transfe rees
would be an ancillary relief.
(ii) It is not necessary at all for the Plaintiff to
ask for any such declaration for cancellation
of Sale Deed.
(iii) It would be enough for the Plaintiff to have
joined subsequent transferees as co-
Defendants so as to contend that the
subsequent sale deeds were not binding on
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him.
(iv) The proper form of decree is to direct
specific performance of the contract
between the vendor and the prior transferee
and direct the subsequent transferee to join
in the conveyance so as to pass on the title
which resides in him, to the prior transferee.
(v) Subsequent transferee does not join in any
special covenants made between the prior
transferee and his vendor, all that he does is
to pass on his title to the prior transferee.
(vi) If the court reaches the conclusion that the
title to the property has validly passed from
the vendor and resides in the subsequent
transferee. The sale to him would not be
void but only voidable at the option of the
earlier "contractor".
(vii) If there are any special covenants and
conditions agreed upon in the contract for
sale between the original purchaser and the
vendor those have to be incorporated in the
sale deed although it is only the vendor who
will enter into them and the subsequent
purchaser will not join in those special
covenants.
(viii) The whole idea and the purpose underlying
a decree for specific performance is that if a
decree for, such a relief is granted the
person who has agreed to purchase the
property should be put in the same position
which would have obtained in case the
contracting parties, i.e., vendor and the
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purchaser had, pursuant to the agreement,
executed a deed of sale and completed it in
every way.
(ix) The relief of declaration prayed for against
the subsequent transferees is not required to
be valued in terms of money.
(x) There would be no necessity of claiming
any declaratory relief as against the
subsequent transferee. Consequently, there
will be no question of payment of court -fees
in respect of said relief. The said relief
claimed would be superficial and
unnecessary in the facts and circumstances
of the case.
21. In the present case the Plaintiff has sought for specific
performance of the agreement to sell dated 15.09.2003.
Along with the relief of specific performance the
Plaintiff has claimed cancellation of five sale deeds
dated 20.04.2004, 05.07.2004 and 11.06.2004. The sale
deeds the cancellation of which has been sought by the
Plaintiffs have been executed after the agreement to
sell in favour of the Plaintiff. The relief of specific
performance of agreement to sell is the substantive
relief and the declaration of the invalidity of the sale
deed in favour of the subsequent transferees is only an
ancillary relief. It is not necessary for the Plaintiff to
ask for any such declaration for cancellation of Sale
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Deed. It is sufficient for the Plaintiff to ask for the
subsequent transferees to join in the execution of the
sale deed by the Defendant No. 1 in favour of the
Plaintiff.
22. There would be no necessity of claiming any
declaratory relief as against the subsequent transferee.
Consequently, there will be no question of payment of
ad valorem court-fees in respect of said relief. The said
relief claimed would be superficial and unn ecessary in
the facts and circumstances of the case.
23. The Judgment in the case of JASWANT SINGH (SUPRA )
relied upon by the Counsel for the Defendant is not
applicable in the facts of the present case as in the said
case the court was not dealing with a suit for specific
performance and the Plaintiff therein had sought
cancellation of sale deed on the ground that the
Defendant had fraudulently made the Plaintiff execute
the sale deed without payment of consideration. It was
in those facts the court held that since the relief of
declaration and the consequential relief of cancellation
was sought, court fees was payable.
24. In view of the above, the application of the Defendant
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No. 2 is without any merit and is thus dismissed, with
no orders as to costs.
IA No. 20554/2013 (by Plaintiff under Order 6 Rule 17
read with Order 1 Rule 10 CPC)
1. The Plaintiff by the present application has sought
impleadment of Defendants No. 6 to 8. The Plaintiff
has contended that Defendant No.2 in the written
statement has disclosed that the suit property has been
further sold to Defendants No. 6, 7 and 8 vide sale deed
dated 2.11.2010 and 9.11.2010. The Plaintiff has
contended that the sale deed executed by Defendant
No.2 in favour of the said Defendants is collusive and a
fraudulent exercise in order to frustrate the rights of the
Plaintiff in the prior agreements to sell. The Plaintiff
has sought impleadment of the subsequent purchasers,
i.e., Defendants No. 6 to 8 and the consequential
amendments to the plaint.
2. No reply has been filed by the existing Defendants to
the said application. Notice to the proposed
Defendants was directed to be served by order dated
17.12.2013. They have not been served.
3. Issue fresh notice to the proposed Defendants 6 to 8 by
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ordinary process and speed post returnable on 05 th
August, 2014 before the Roster Bench. Reply be filed
by the Defendants 1 to 5 within four weeks, rejoinder if
any by the Plaintiff within four thereafter.
SANJEEV SACHDEVA, J
May 15, 2014
sv
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