Raksha Rani vs S.Krishan Sharma (Deceased ...
2018 Latest Caselaw 2592 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Date of decision: 25th April, 2018
 +             CS(OS) No.110/2010 & IAs No.873/2010(U/O.39 R.1
                    & 2) & 9429/2016(filed by D-2)
      RAKSHA RANI                                        .... Plaintiff
                          Through:     Mr. Lokesh Chopra, Adv.
                                      Versus
      S.KRISHAN SHARMA (DECEASED THROUGH LR)
      & ANR.                        ......Defendants
                   Through: None.

CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.

The plaintiff instituted this suit against two defendants namely S. Krishann Sharma and Santosh Devi, for specific performance of an agreement of sale of basement, ground and first floor of property No.D-38, Panchsheel Enclave, New Delhi and in the alternative for recovery of damages of Rs.3.66 crores, pleading:

(i) That the two defendants as owners vide Perpetual Lease Deed dated 21st May, 1976 of the land underneath the property, on 7th August, 2009 agreed to sell the said property to the plaintiff for a consideration of Rs.3.66 crores and on the other terms and conditions as contained in a receipt of Rs.6 lacs as earnest money.

(ii) That though the plaintiff was ready and willing to pay the next installment of Rs.45 lacs of sale consideration on/or before 15th August, 2009 but when the plaintiff visited the

property aforesaid where the defendants were residing, the plaintiff was informed that they were not at home.

(iii) That the defendants, when telephonically contacted by the plaintiff, told the plaintiff that the said installment be paid along with the next installment of Rs.15 lacs on/or before 23rd August, 2009.

(iv) However when the plaintiff visited the property on or around 25th August, 2009, the defendants refused to accept any payment.

2. The suit was entertained and vide an ex parte order dated 4 th February, 2010, while issuing summons of the suit, status quo qua the property aforesaid was directed to be maintained.

3. The defendants contested the suit by filing a joint written statement, pleading:-

(i) That the defendant No.1 is an artist by profession and his wife, the defendant No.2 is a housewife.

(ii) That the defendants along with their son and daughter-in-

law are directors of a family run company i.e. Third Dimension Architecture Pvt. Ltd.

(iii) That the said company, in the month of May, 2008 availed of cash credit limit facility worth Rs.2.92 crores from the Bank of Baroda and the defendants, in consideration of the same, as guarantors, created an

equitable mortgage of the aforesaid property by deposit of title deeds.

(iv) The company was unable to fulfill the terms of repayment of loan.

(v) That consequently, the Bank of Baroda vide notices dated 14th January, 2009, 27th February, 2009 and 8th April, 2009 required repayment of loan along with interest and on failure thereof threatened action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002 to take over the mortgaged property.

(vi) That the defendants and their son, to save the aforesaid property, were approaching friends and relatives and the son of the defendants, in the month of July, 2009, came in touch with one Mr. Sanjay who promised to arrange funds and the said Sanjay introduced the defendants and their son to Anil Kumar Gupta, husband of the plaintiff.

(vii) That the said Anil Kumar Gupta said that he would disburse the loan amount of Rs.3.66 crores from the name of his wife, i.e. plaintiff herein as he did not want to show the loan being disbursed in his own name; it was agreed that the entire amount of Rs.3.66 crores will be disbursed by 30th April, 2010 and would be repayable by 31st March, 2011 with interest at 2% per annum; the husband

of the plaintiff however then insisted upon the security for repayment of the said loan.

(viii) That since the defendants and their son had no other security to offer, the said Anil Kumar Gupta suggested that the defendants execute a receipt mentioning the entire loan amount agreed to be lent by him.

(ix) The defendants protested stating that their property was already mortgaged but the husband of the plaintiff insisted and assured that the receipt executed by the defendants would not be misused and would not, in any manner, affect the ownership of the defendants of the subject property.

(x) Since the bank was threatening immediate action, the defendants succumbed to the demands of the husband of the plaintiff and on the basis of the assurance meted out by the husband of the plaintiff executed the receipt.

(xi) That the initial amount of Rs.6 lacs was paid by cheque of Rs.5 lacs and Rs.1 lac in cash; however, the cheque for Rs.5 lacs was dishonoured when presented; the said amount of Rs.5 lacs was subsequently paid on 12th August, 2010.

(xii) That though the defendants thereafter approached the plaintiff through her husband for disbursement of the remaining amount which had been agreed to be loaned, but the plaintiff and her husband expressed inability.

(xiii) The defendants and their son thereafter arranged to pay further installments to the bank through other sources.

(xiv) That the plaintiff and her husband did not have any intention to loan any monies to the defendants but had tried to hoodwink the defendants, to take over the property of the defendants.

(xv) The receipt dated 7th August, 2009 was executed under coercion and undue influence.

(xvi) The receipt does not constitute Agreement to Sell and does not have necessary ingredients of Agreement to Sell.

(xvii) The plaintiff wants to usurp property of defendants worth Rs.9 crores, for a sum of Rs.3.66 crores.

(xviii) In consonance with the said design, the present suit has been filed.

(xix) The defendants offered to return Rs.6 lacs to the plaintiff but the plaintiff wanted Rs.50 lacs.

(xx) Even as per receipt, time was the essence and the plaintiff failed to pay within the time mentioned.

4. Though opportunity was given to the plaintiff to file replication but no replication is found to have been filed.

5. The plaintiff filed IA 368/2011 for impleadment of United Bank of India as defendant no.3, stating that the United Bank of India was threatening to take over the property under the SARFAESI Act. Vide order dated 16th March, 2012, though the earlier ex parte order of

status quo was continued against the defendants but it was observed that the rights of United Bank of India remained unaffected by the status quo order.

6. The defendants preferred FAO (OS) 128/2012 against the order dated 16th March, 2012, also refusing permission to them to sell the first floor of the property. However, the said appeal, on 26th March, 2012, was dismissed as withdrawn.

7. The plaintiff, on 12th April, 2013 withdrew his application for impleadment of United Bank of India, stating that the same had become infructuous.

8. The counsel who had been appearing for the defendants, on 31 st October, 2013, sought discharge and thereafter a new counsel started appearing for the defendants.

9. The order dated 12th May, 2014 records the statement of the counsel for the defendants that medical condition of the defendants was frail and they were unwell.

10. Vide order dated 18th January, 2016, in the absence of the counsel for the defendants the following issues were framed in the suit:-

"(i) Whether there is an agreement to sell dated 7.8.2009 for the plaintiff to purchase and the defendants to sell the suit property being the basement, ground and first floor of D-38, Panchsheel Enclave, New Delhi-110017? OPP

(ii) Whether the plaintiff has always been and continues to be ready and willing to perform his part

of the contract? OPP (this issue will cover the issue as to who is guilty of breach of contract)

(iii) Whether the plaintiff is entitled to the discretionary relief of specific performance? OPP

(iv) Whether the plaintiff is entitled to the alternative relief of damages of a sum of Rs.3.66 crores as prayed along with interest, if so at what rate? OPP

(v) Relief."

and the parties relegated to lead evidence.

11. The counsel for the defendants, on 31st May, 2016 informed that the defendant no. 1 had expired in the month of January, 2016; the suit was adjourned for the plaintiff to substitute the legal heirs of the deceased defendant no.1. The order dated 29th July, 2016 records the statement of the counsel for the plaintiff that the counsel who was earlier appearing for both the defendants and was then appearing for defendant no.2 only was refusing to supply the details of the legal representatives of the deceased defendant no.1; the personal presence of the defendant no.2 was directed. The order dated 24 th August, 2016 records that the counsel for the defendant no.2 had supplied the details of legal representatives of the deceased defendant no.1 to the counsel for the plaintiff. It was directed that the time consumed by the defendant no.2 in supplying the details of the legal representatives of the deceased defendant no.1 shall be excluded. The plaintiff thereafter sought substitution of the defendant no.2 and Nitin Sharma, son of the defendants no.1 and 2 as legal heir of the deceased defendant no.1 and which was allowed on 15th December, 2016.

12. Opportunity thereafter was given to the son of the deceased defendant no.1 to file his written statement. The order dated 29th May, 2017 records that no such written statement was filed and the right to file the same was closed.

13. Though the parties were referred to Mediation but the same failed and the parties were again relegated to evidence.

14. The counsel earlier appearing for the defendants stopped appearing and the plaintiff examined herself in her evidence and has closed her evidence.

15. Today also none appears for the defendants. Finding that there is no formal order proceeding ex parte against the defendants, the defendants are now proceeded against ex parte.

16. The counsel for the plaintiff has been heard.

17. The plaintiff, in her ex parte evidence, has repeated the contents of the plaint.

18. The receipt, on the basis whereof the suit has been filed is as under:-

"Receipt Receipt with thanks Rs.6,00,000/- (Rupees six lacs only) from Mrs. Raksha Rani W/o Shri Anil Kr Gupta R/o C6/39, FF, SDA, N. Delhi against the sale of Basement, Ground floor and first floor, of D-38, Panchsheel Enclave, N. Delhi, the total consideration amount is Rs.3,66,00,000/- (Rupees three crores sixty six lacs only). The part payment of Rs.45,00,000/- (Rupees forty five lacs) will be paid at the time of signing agreement to sale i.e. on or before 15th August 2009. The balance amount of Rs.3,00,00,000/- (Rupees three crores only) will be paid on or before 30th April 2010. The amount of

Rs.15,00,000/- (Rupees fifteen lacs) will be paid on 23rd August 2009. The mode of payment of Rs.6,00,000/- (six lac only) is as below:

1) Rs.1,00,000/- (Rupees one lac only) cash.

2) Rs.5,00,000/- (Rupees five lacs only) through cheque No.139637 dated 7/8/09 drawn on HDFC Bank Ltd. N.

               Delhi
       Sd/-                                         Sd/-
      Smt. Santosh Sharma                 Shri S. Krishan Sharma
      W/o Shri S. Krishan Sharma          S/o Lt. Shri Dal Chand
      R/o D-38, Panchsheel Enclave        R/o D-38, Panchsheel
      N. Delhi.                           Enclave, N. Delhi.
      Witnesses:
      1. Sd/-
         Nitin Sharma
        D-38, P. Encalve, N.D-17

      2. Sd/-
        Sanjiv Kumar
        B1/11, 21A Vasant Kunj, N. Delhi"

19. It is quite evident from the aforesaid document that signing by the parties of an Agreement to Sell on or before 15 th August, 2009 was stipulated. The said Agreement to Sell has not been signed. The ex parte case of the plaintiff is that the Agreement to Sell was not signed because the defendants turned dishonest. The pleaded case of the defendants, though ex parte, is that since an Agreement to Sell containing detailed terms and conditions was to be executed, the receipt aforesaid even otherwise does not constitute an Agreement to Sell and is for this reason not enforceable. The defendants in this regard have pleaded that the receipt does not contain the agreement of the parties qua the liability for charges for conversion of leasehold

rights in the land underneath the property into freehold and for the Stamp Duty on the Sale Deed to be executed.

20. Though undoubtedly the receipt does not contain the aforesaid particulars but as far as the Stamp Duty is concerned, not only is it as per the law required to be borne by the purchaser but that is even otherwise the norm. Thus for the reason of the receipt not providing therefor, it cannot be said that it is incomplete in any manner whatsoever. However the plaintiff indeed has failed to file a replication to the written statement and in her ex parte evidence depose her stand qua the charges for conversion of leasehold rights in the land underneath the property into freehold. It appears that the provision for the same was required to be made in the Agreement to Sell to be executed. Else, the receipt, though ambiguous in as much as dates for payment are not mentioned chronologically, has the necessary ingredients i.e. the particulars of the property agreed to be sold, the total sale consideration and the dates for payment of sale consideration and I would be reluctant to hold that the same does not constitute an enforceable Agreement.

21. That though the plaintiff in the plaint did not disclose knowledge of the property as on the date of execution of the receipt aforesaid being mortgaged with the Bank of Baroda but otherwise the same stands sufficiently proved not only from the documents placed by the defendants before this Court but also from the plaintiff herself filing the application for impleadment of United Bank of India along with the copy of the Public Notice got published by United Bank of

India of sale of the property under the SARFAESI Act. United Bank of India, in response to the application for its impleadment, filed a reply pleading that it had on request of the defendants taken over the loan account of the defendants with the Bank of Baroda and the defendants had failed to repay the loan and for which reason action under the SARFAESI Act was initiated. There also exists on record, orders of the Court of Chief Metropolitan Magistrate (CMM) of taking over of the possession of the property.

22. The plaintiff as aforesaid unilaterally withdrew the application for impleadment of Union Bank of India stating that it has become infructuous without disclosing the reasons for which it had become infructuous. The only inference is that the application had become infructuous because Union Bank of India, acting under the SARFAESI Act had effected sale of the property. The plaintiff, in her ex parte evidence also did not bother to explain the said aspect. The factum of the defendants, though earlier defending the suit, having stopped defending the same, is also indicative of the property having gone out of the hands of the defendants. The plaintiff cannot be entitled to the relief of specific performance for this reason alone.

23. As far as the readiness and willingness of the plaintiff is concerned, as per the receipt aforesaid, the plaintiff was to pay consideration of Rs.45,00,000/- on or before 15th August, 2009 Rs.6,00,000/- was paid on the date of the receipt aforesaid. However the cheque for Rs.5,00,000/- out of the said Rs.6,00,000/- admittedly was dishonoured and the bearer cheque in lieu thereof according to the

plaintiff also was given only on 12th August, 2009 when receipt Ex. PW1/3 was taken from the defendants therefor. From the conduct of the defendants, of executing the receipt on 12th August, 2009, the evidence of the plaintiff though unrebutted of the defendants refusing to accept the balance payment on or before 15 th August, 2009 does not inspire confidence. Moreover, once the plaintiff knew of the urgency of the defendants, merit is found in the plea of the defendants, of the time of payment being of essence. The plaintiff, though is proved to have been aware of the mortgage on the property, still did not implead the Bank of Baroda as party to the suit or offer to deposit the balance sale consideration with the Bank of Baroda. In fact the ex parte evidence of the plaintiff is not with respect to the availability of the balance funds with the plaintiff.

24. I am thus unable to find the plaintiff to be entitled to the relief of specific performance.

25. As far as the alternative relief claimed by the plaintiff of damages in the sum of Rs.3.66 crores in lieu of specific performance of contract is concerned, not only has the plaintiff in her ex parte evidence failed to prove any such loss but even otherwise the readiness and willingness of the plaintiff to perform her part of the agreement having not stood established, the question of the plaintiff being entitled to any damages does not arise.

26. The plaintiff is thus found entitled, only to recovery of Rs.6 lacs, payment whereof by way of part sale consideration was admitted by the defendants. The plaintiff is also found entitled to interest

thereon at 7% per annum from the date of institution of the suit till realization. The plaintiff shall also be entitled to proportionate costs of suit.

27. A decree is accordingly passed,

(a) of dismissal of the claim of the plaintiff of specific performance of the Agreement to Sell with respect to property No.D-38, Panchsheel Enclave, New Delhi; and,

(b) in favour of plaintiff and jointly and severally against the defendants of recovery of Rs.6 lacs with interest at 7% per annum from the date of institution of the suit, till realization and for recovery of proportionate costs of suit.

Decree sheet be prepared.

RAJIV SAHAI ENDLAW, J.

APRIL 25, 2018 'aruna' / pp (corrected and released on 23rd May, 2018).