Devender Singh vs M/S Malik Buildcon Pvt Ltd
2018 Latest Caselaw 5148 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 800/2016

%                                                   29th August, 2018

DEVENDER SINGH                                           ..... Appellant

                          Through:       Mr. Rajiv Yadav, Advocate
                                         (Mobile No. 9811017900).

                          versus

M/S MALIK BUILDCON PVT LTD                              ..... Respondent

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

RFA No. 800/2016 and C.M. Appl. No. 37766/2016 (for stay)

1. This Regular First Appeal under Section 96 of the Code of Civil

Procedure, 1908 (CPC) is filed by the plaintiff in the suit impugning

the Judgment of the Trial Court dated 30.3.2016 by which the trial

court has dismissed the suit for specific performance and possession

filed by the appellant/plaintiff with respect to shop no. S-17, Buildcon

Plaza, Plot No. 6, Pocket 5, Sector 12, Dwarka, Delhi (hereinafter

referred to as the „suit property‟). Trial court has dismissed the suit

for specific performance essentially on two counts, with the first count

being that the Agreement to Sell being oral was not registered and an

unregistered agreement to sell cannot be a basis for a stay for specific

performance and second count being that no specific performance can

be granted of an oral agreement to sell.

2. The facts of the case are that appellant/plaintiff filed the subject

suit pleading that he as the purchaser and the respondent/defendant

company as the seller had entered into an Agreement to Sell the suit

property with the total price being agreed at Rs.3,80,000/-. This

Rs.3,80,000/- was to be paid in instalments as and when demanded by

the respondent/defendant. Appellant/plaintiff paid a booking amount

of Rs.5,100/- on 9.11.2003 and for which receipt no. 120 dated

9.11.2003 was given to the appellant/plaintiff. As per the demands

raised by the respondent/defendant from time to time a further amount

of Rs.2,66,000/- was deposited by the appellant/plaintiff with the

respondent/defendant upto 21.11.2004. Out of the total amount

payable, a sum of Rs.70% was already and the balance 30% was to be

paid on receipt of possession and the signing of the necessary

documents. Appellant/plaintiff further pleaded that on receiving a call

from the respondent/defendant in February, 2006 another sum of

Rs.1,15,000/- was paid by a cheque bearing no. 938812 dated 9.3.2006

of Syndicate Bank, Main Bijwasan Road, New Delhi. Thereafter, the

respondent/defendant informed the plaintiff that the area of the shop

had increased and along with other dues of transfer fees and

documentation charges a sum of Rs.62,075/- was to be paid and for

which the appellant/plaintiff issued a cheque bearing no. 938813 dated

24.3.2006 drawn on Syndicate Bank, Bijwasasn Road Branch, New

Delhi, but neither the receipt was given for this cheque nor the cheque

was encashed. Since inspite of repeated requests the

respondent/defendant failed to transfer the suit property in the name of

the appellant/plaintiff, and in fact claimed that the allotment was

cancelled by a letter dated 20.5.2006, the subject suit for specific

performance and possession was filed.

3. At the outset it may be noted that though the

respondent/defendant filed the written statement and initially

contested the suit, however, no evidence has been led by the

respondent/defendant. Right of the respondent/defendant to lead

evidence was closed as evidence was not led inspite of repeated

opportunities. The order closing the right of the respondent/defendant

to lead evidence was challenged in this Court as stated in para 8 of the

impugned judgment, but that challenge was also not successful.

4. In the written statement the main defence of the

respondent/defendant was that since the appellant/plaintiff failed to

pay the amount in time therefore the allotment was cancelled by the

respondent/defendant vide its Letter dated 20.5.2006.

5. The following issues were framed in the suit:-

"1) Whether the suit of the plaintiff is not maintainable in its present form? .... OPD.

2) Whether the suit of the plaintiff is barred by law of limitation? .... OPD.

3) Whether the plaintiff is entitled to the decree of specific performance in respect of title of the suit property as prayed for .... OPP

4) Whether the plaintiff is entitled to the decree of possession as prayed for?

...... OPP
5)     Relief."

6. Appellant/plaintiff filed his affidavit by way of evidence and proved various documents and this is recorded in paragraph 6 of the impugned judgment as under:-

"6. Thereafter parties were asked to lead the evidence. The plaintiff had examined him as PW 1. He has relied upon the receipt No. 120 dated 09.11.2003 against payment and same is Ex.PW1/1. He has filed several other receipts of payments which were exhibited Ex.PW1/2 to Ex.PW1/11. Photocopies of cheques which were allegedly given by the plaintiff were placed on record as Mark A and Mark B. Legal notice served on the defendant was exhibited as Ex.PW1/12 and the postal receipts as Ex. PW 1/13 and Ex. PW1/14. The plaintiff has denied a receipt of any letter

written by the defendant to the plaintiff on May, 20, 2006 and this has been placed on record as Ex.PW1/16. He was cross-examined by the Ld. Counsel for defendant."

7. In my opinion, the trial court has wrongly dismissed the suit on

the ground that the Agreement to Sell is not registered and is only an

oral agreement. In law an agreement to sell does not have to be

registered, and of which agreement to sell, relief of specific

performance is sought, and this is clearly stated so in the proviso to

Section 49 of the Registration Act, 1908. The finding of the trial

court therefore that the Agreement to Sell require registration being

completely illegal is therefore set aside.

8. So far as the finding of the trial court that the suit for specific

performance had to be dismissed because Agreement to Sell was an

oral Agreement to Sell, once again this finding is illegal because there

can be an oral Agreement to Sell of an immovable property. In the

facts of the present case there did take place an oral Agreement to Sell

of the property between the parties because respondent/defendant had

admittedly received various amounts totalling to Rs.2,66,000/- under

the oral Agreement to Sell with the total price being Rs.3,80,000/-. It

may be noted that appellant/plaintiff in the plaint pleaded the total

price of Rs.3,80,000/- in paragraph 4 of the plaint and this is not

denied to by the respondent/defendant in paragraph 4 of the written

statement. Therefore, even this finding of the trial court that specific

performance cannot be granted of an oral Agreement to Sell, this

finding is illegal and needs to be and is accordingly set aside.

9. That takes us to the question as to whether appellant/plaintiff is

entitled to relief of specific performance. As already stated above

total price was Rs.3,80,000/- of which a sum of Rs.2,66,000/- has

admittedly been paid because this is not disputed by the

respondent/defendant in its written statement. So far as the issue of

balance payment and as to whether the respondent/defendant was

entitled to cancel the Agreement in terms of its Letter dated 20.5.2006,

it will be necessary to refer to the admitted document being the Letter

Ex.PW1/DX1 dated 28.3.2006 of the appellant/plaintiff to the

respondent/defendant. This document is admitted because this

document was put by the counsel for the respondent/defendant in the

cross-examination of the appellant/plaintiff and being an admitted

document was therefore exhibited as Ex.PW1/DX1.

10. A reference to this letter shows that the total price of the suit

property was Rs.3,80,000/-. Appellant/plaintiff had paid Rs.2,66,000/-

with balance payment being Rs.1,15,000/-. Since the area of the shop

had increased a total amount of Rs.1,77,075/- was payable and which

the appellant/plaintiff went to deposit with the respondent/defendant,

but the office of the respondent/defendant refused to accept this

amount on account of two amounts of Rs.23,000/- towards interest and

Rs.10,000/- as advance maintenance for eight months. This letter

dated 28.3.2006 Ex.PW1/DX1 also shows that the appellant/plaintiff

asked the office of the respondent/defendant to receive Rs.1,77,075/-

which was brought by the appellant/plaintiff, but the office of the

respondent refused to receive the same by stating that along with this

amount of Rs.1,77,075/- and till amount of Rs.23,000/- an advance

maintenance charges of eight months of Rs.10,000/- are paid, the

office of the respondent/defendant will not receive the amount and in

fact will cancel the allotment. Along with this letter Ex.PW1/DX1 the

appellant/plaintiff had sent a sum of Rs.1,77,075/- as noted in the last

few lines of the letter. Therefore, the dispute really was only with

respect to interest claim of Rs.23,000/- and an advance maintenance

for the shop for eight months of Rs.10,000/- i.e. a total sum of

Rs.33,000/-. This shows that the total price of the property was

Rs.4,42,075/- and this total amount would stand paid as on 28.3.2006

in view of the amount of Rs.2,66,000/- having already been paid and

the cheques of Rs.1,77,075/- being attached with this letter

Ex.PW1/DX1 dated 28.3.2006. Essentially therefore in and around

between 90% to 95% of the total amount stood paid with part of this

amount paid by cheques totalling to Rs.1,77,075 being deliberately not

encashed by the respondent/defendant i.e an amount of Rs.1,77,075/-

was not received by the respondent/defendant by encashing the two

cheques of Rs.1,15,000/- and Rs.62,075/- as attached with the letter

Ex.PW1/DX1. The only balance payment would be a sum of

Rs.33,000/- as stated above with Rs.23,000/- interest towards interest

and Rs.10,000/- towards advance maintenance charges of the shop for

eight months.

11. With reference to the facts of each case whether or not time of

performance is essence of the contract has to be examined. This is so

held by the Constitution Bench judgment of the Supreme Court in the

case of Chand Rani (Smt) (Dead) by Lrs Vs. Kamal Rani (Smt)

(Dead) by Lrs, 1993 (1) SCC 519. In the facts of the present case

since admittedly interest has been asked for by the

respondent/defendant for late payment, obviously therefore time of

performance is not the essence as delayed payment had to be

compensated with interest. Once time of performance is not the

essence such an Agreement to Sell cannot be cancelled by Letter dated

20.5.2006 issued by the respondent/defendant without first having

made time of payment/performance as essence of the contract. It is

therefore held that the respondent/defendant could not have cancelled

the subject contract to sell the suit property by its Letter dated

20.5.2006.

12. In view of the aforesaid discussion it is held that there was an

Agreement to Sell of the suit property between the parties.

Appellant/plaintiff was not guilty of breach of contract.

Appellant/plaintiff was always ready and willing and continued to be

ready and willing and it was the respondent/defendant which did not

receive a minor balance amount of Rs.33,000/- out of the total amount

of Rs.4,75,075/-. Plaintiff therefore held entitled to specific

performance of the suit property by the respondent/defendant

executing the documents conveying title in the suit property to the

appellant/plaintiff as per the following directions:-

(i) Appellant/plaintiff will deposit in this Court a sum of

Rs.1,77,075/- plus Rs.33,000/- along with interest at 12% per

annum simple from 1.6.2006 within a period of three months

from today and which amount will be put by the Registry in a

fixed deposit so as to earn maximum rate of interest.

(ii) On such deposit being made, the respondent/defendant

will execute the necessary title documents in favour of the

appellant/plaintiff with respect to the suit property being shop

no. S-17, Buildcon Plaza, Plot No. 6, Pocket 5, Sector 12,

Dwarka.

(iii) On the title documents being executed and registered in

favour of the appellant/plaintiff for the suit property, the

respondent/defendant can thereafter withdraw the amount

deposited in this Court by the appellant/plaintiff along with

interest which will accrue thereon.

(iv) In case the respondent/defendant fails to execute the title

documents of the suit property in favour of the

appellant/plaintiff, the appellant/plaintiff can initiate execution

proceedings of the present judgment and decree including by

resorting to Order XXI Rule 32 CPC.

13. This appeal is accordingly allowed and disposed of by

decreeing the suit for specific performance filed by the

appellant/plaintiff in terms of the directions as given herein above.

Parties are left to bear their own costs.

AUGUST 29, 2018                                VALMIKI J. MEHTA, J
AK