Delhi High Court
Veena Sharma vs Raman Monga & Anr. on 31 January, 2018
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA 158/2007 & CRL.M.A.1993/2015 (u/s 340 Cr.P.C)
Reserved on : 4th January, 2018
Date of decision : 31st January, 2018
VEENA SHARMA ..... Appellant
Through: Mr. D.K. Rustagi & Mr. Mayank
Rustagi, Advocates.
Appellant in person
versus
RAMAN MONGA & ANR. .... Respondents
Through: Mr. Sandeep Khurana, Mr. Mohit
Gupta, Mr. Divij Soni and Ms.
Seemab Ali Fatima, Advocates for R-
2.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUDGMENT
Prathiba M. Singh J.,
1. The present appeal arises out of the final judgment/decree dated 24th
May, 2006 by which, the learned Additional District Judge rejected the
Appellant's prayer for specific performance and directed refund of
Rs.12,00,000/- (Rupees Twelve Lakhs) with costs and interest @ 6% per
annum.
Brief Background
2. The Appellant/Smt. Veena Sharma was the Plaintiff in the suit
(hereinafter 'Plaintiff') Respondent No. 1/Mr. Raman Monga was
Defendant No. 1 in the suit (hereinafter `D1') and Respondent No. 2/Sh.
Horam Singh was Defendant No. 2 in the suit (hereinafter 'D2').
3. The Plaintiff entered into an agreement to sell and purchase dated 28th
October, 2003 with the Defendants for the purchase of the second floor of
property bearing No. 29/39, West Patel Nagar, New Delhi, admeasuring 100
square yards. The total sale consideration was Rs.13 lakhs. The Plaintiff has
made a total payment of Rs.12 lakhs. The various payments and the dates on
which these payments were made are as under:-
Payment Chart
Date Amount Mode of Exb. No.
Acknowledgment
02.08.2003 Rs.2,00,000/- Receipt cum Agreement PW1/2
Signed by D1 & D2
05.09.2003 Rs.3,00,000/- Agreement to Sell & PW1/2
Purchase or
PW1/X
20.10.2003 Rs.4,00,000/- Agreement to Sell & PW1/2
Purchase or
PW1/X
20.05.2004 Rs.1,00,000/- Receipt PW1/3
Signed by D1
15.06.2004 Rs.2,00,000/- Receipt PW1/4
Signed by D1
4. The original owner of the property was one Sh. Ved Prakash Mahna
(hereinafter `Owner'). The Defendants, who were builders, entered into a
collaboration agreement dated 26thApril, 2003 with the Owner. As per the
said collaboration agreement, it was agreed that the following floors would
be constructed in the property:
(i) Lower Ground floor (hereinafter 'LGF');
(ii) Upper Ground floor (hereinafter 'UGF');
(iii) First floor;
(iv) Second floor; and
(v) Barsati floor.
5. It was further agreed that a basement would be constructed at the rear
side of the property equal to 50 square yards and the said basement shall be
given to the owner. Both the Defendants/builders were to construct the
entire property and the division between the owner and Defendants were to
take place as under:
(i) ½ Basement at the rear - Share of Owner;
(ii) the entire lower ground floor (floor finish level - road level
clear), and upper ground floor - Share of Owner;
(ii) the entire first floor, entire second floor and the entire Barsati
floor with roof terrace rights - Share of Defendants/builders.
6. Subsequent to this collaboration agreement, the Plaintiff entered into
an agreement to sell and purchase dated 28th October, 2003 with the
Defendants. There is some controversy as to whether this agreement to sell
related to the first floor or the second floor of the property. The authenticity
of the first page of this agreement has been disputed by D2.
Proceedings before the Trial Court
7. Since the Defendants did not execute the documents and handover
possession of the property, a suit was filed seeking specific performance and
other reliefs. The prayers made in the suit are as below:
"It is, therefore, most respectfully prayed that this
Hon'ble Court may pleased to pass a decree in
favour of the plaintiff and against the defendants
with cost of the suit, thereby:
a) Ordering and directing specific performance of
the AGREEMENT TO SELL AND PURCHASE
dated 28.10.03 and directing the defendants to
perform their part of contract and execute and
registered Sale Deed of IInd floor measuring 100 sq.
yds. of property bearing no 29/.39, West Patel
Nagar, New Delhi as shown red in the site plan
attached with the plaint after receiving the balance
sale consideration of Rs. 1,00,000/- and delivered its
possession to the plaintiff in performance of the
Agreement:
b) Restraining the defendants permanently from
selling, transferring, conveying alienating, part with
the possession conveying, alienating, part with the
possession and creating third party interest in
respect of IInd floor measuring 100 sq. yds. of the
property no. 29/39, West Patel Nagar, New Delhi as
shown Red in the site plan to any other person or
proposed buyers.
c) Pass a decree for recovery of Rs. 12,00,000/- plus
Interest @ 24% p.a. alongwith charges in favour of
the plaintiff and against the defendants
alternatively. Any other order / relief which this
Hon'ble Court may deems fit and proper in the facts
and circumstances of the case may also be passed in
favour of the plaintiff and against the defendants".
8. The written statement filed by D1 clearly and categorically states that
the said he is ready and willing to execute the sale deed in favour of the
Plaintiff, if she pays the balance amount of Rs. 1 lakh. D1 admitted the
existence of the agreement dated 20th October, 2003 as also the receipts
issued. D1, further, states that the Plaintiff is not in any manner concerned
with the litigations which are pending between the Defendants inter se. The
written statement of D1 reads as under:
"2. That para No. 2 of the plaint is a matter of
record. It is admitted that there is receipt dated
2.8.2003 and an agreement dated 20.10.2002 are not
denied. Defendant No. 1 is still ready and willing to
perform his part of the contract subject to payment of
the balance sale price to the defendant no.1. It is the
inter-se dispute between the defendants and the
plaintiff has nothing to do with the same, which
litigations are pending between the defendants in the
courts of law.
3. Para no. 3 of the plaint is wrong and denied.
The construction of the suit property stands completed
and the defendant no. 1 is still ready and willing to
perform his part of the contract, subject to the payment
of the balance sale price. Rest of the para are not
concerning the defendant no.1 and same are denied for
want of knowledge. It is submitted that the defendant
no. 1 is not at all liable to pay any interest because the
defendant no. 1 was/is willing and ready to execute the
documents in favour of the plaintiff qua the suit
property."
9. D2, however, takes a completely contrary stand and alleges that the
agreement to sell dated 28th October, 2003 is a document which is tampered
with. Though the signature of D2 on the second page of the agreement is not
disputed, the contents of the first page of the agreement are disputed. It is
further submitted that what was agreed to be sold to the Plaintiff was the
first floor of the property and not the second floor. D2 alleges collusion
between D1 and the Plaintiff. He further submits that he has not received the
amounts paid by the Plaintiff and that all the amounts have been received by
D1, except the initial sum of Rs.2 Lakhs. D2 further submits that the suit as
framed is not maintainable as it seeks specific performance qua the second
floor of the property which has already been sold to one Mr. Vikas Sharma
on 8th April, 2004.
10. The Plaintiff, D1 and D2 were examined before the Trial Court. Vide
the impugned judgment, the relief of specific performance had been rejected
and a decree for the sum of Rs.12 Lakhs along with interest @ 6% per
annum, from date of filing the suit, has been passed.
11. The Trial Court came to the conclusion that the second floor had
already been sold to Sh. Vikas Sharma and hence, the relief of specific
performance cannot be granted. The Court further held that the conduct of
the Plaintiff was not upright and fair as she has sought for specific
performance of the second floor, when the agreement appears to have been
only for the first floor. The Trial Court also concluded that the inter se
disputes between the Defendants are not the subject matter of the suit and
hence, when the Defendants jointly and severally admitted to have received
Rs.12 Lakhs, the said amount is liable to be refunded to the Plaintiff.
12. Initially, notice was issued in this appeal and the parties were directed
to maintain status quo. Vide order dated 25thAugust, 2009, this court
recorded as under:
"Learned counsel for the respondents, on instructions,
submit that in view of the fact that an early hearing of
the appeal has been ordered they would not execute
any kind of agreement in respect of the property in
question with any party till the disposal of the appeal.
The application stands disposed of accordingly and the
respondents shall be bound by the aforesaid statements
given by their respective counsel."
This order continues to subsist till date.
Submissions of the Appellant/Plaintiff
13. Learned counsel for the Plaintiff submits that the Plaintiff having paid
Rs. 12 Lakhs out of Rs.13 Lakhs, which was the agreed consideration, the
Plaintiff is entitled to the relief of specific performance. Mr. Rustagi, learned
counsel appearing for the Plaintiff submits that the disputes being raised
with respect to the authenticity of the agreement to sell is completely
misplaced inasmuch as D1 admits to the execution of the agreement to sell
and the documents. He further submits that D2 is taking advantage and
trying to create confusion as to the identification of the floor that was to be
sold to the Plaintiff. He submits that different terminologies are being used
by the Defendants in different documents for different floors in the property
and hence, the Court needs to uphold and give effect to the true intent and
purport of the same. He relies upon the following documents in support of
his submission that different terminologies are being used for identification
of different floors of the property:
(i) Collaboration agreement dated 26thApril, 2003;
(ii) Sale deed between the owner and D2 for the first floor of the
property, dated 20th February, 2004;
(iii) Agreement to sell between the defendants and Sh. Vikas
Sharma for the third floor of the property along with the roof
rights dated 25thDecember, 2003;
(iv) Sale deed between the defendants and Sh. Vikas Sharma, that
described defendants as the owners of the entire second floor
with terrace roof rights.
14. Mr. Rustagi further submits that the agreement to sell between the
Plaintiff and the Defendants, acknowledges the payment of Rs. 9 Lakhs out
of the total consideration of Rs. 13 Lakhs. The Plaintiff, thereafter, has made
a further payment of Rs. 3 Lakhs. He further submits that D2 does not
dispute the execution of the agreement to sell but merely argues that the
agreement relates to the first floor of the property and not the second floor.
He submits that it is not necessary to implead Sh. Vikas Sharma as a party to
the suit inasmuch as, in fact, Sh. Vikas Sharma has the third floor and roof
rights of the property. The second floor is lying vacant and is in the
possession of the Defendants. He relies upon Sections 43 and 42 of the
Indian Contract Act, 1872 to submit that when there is a joint liability, the
devolution of the said liability is on both the parties, however, even one
person can be compelled to fulfill the promise and perform the agreement.
Submissions of D2
15. Mr. Sandeep Khurana, with Mr. Mohit Gupta, addressed submissions
on behalf of D2. It was submitted by D2 that there are only three prayers in
the plaint namely, for grant of specific performance qua the second floor of
the property, for injunction, or for the alternative relief of payment of Rs. 12
Lakhs with interest. D2 submits that no declaration has been sought by the
Plaintiff qua the identification or the description of the floor, which is the
subject matter of the agreement to sell. D2 further submits that the
agreement to sell dated 28th October, 2003 is manipulated, as it does not bear
his signatures on the first page of the agreement. The written statement of
D2 categorically asserts that the second floor has been sold to Sh. Vikas
Sharma and despite the said fact, the Plaintiff chose not to implead Sh.
Vikas Sharma.
16. It was submitted that D1 filed a suit against Sh. Vikas Sharma seeking
a declaration that the floor is incorrectly described in the sale deed entered
into with Sh. Vikas Sharma. The said suit was dismissed. The Plaintiff has
not yet sought execution for the amount of Rs. 12 Lakhs with interest. D2
takes severe umbrage to the fact that the Plaintiff is making contradictory
submissions with respect to the original agreement to sell. In the plaint, the
Plaintiff stated that the original agreement is with ICICI Bank, from whom,
she has taken a loan, but thereafter, in a most surprising manner, the Plaintiff
issued a notice to the Defendants under Order XII Rule 8 of the Code of
Civil Procedure, 1908 (hereinafter 'CPC') seeking production of the
agreement to sell. As per the agreement, the sale was to be concluded by 30th
November, 2003 and since the same was not concluded, the property was
sold to Sh. Vikas Sharma. It was urged that both the agreement to sell and
the Receipt dated 2ndAugust, 2003 are forged and tampered with. On this
basis, D2 submits that they have not challenged the decree for payment of
Rs. 12 Lakhs along with interest and no fault can be found with the Trial
Court's judgment rejecting the relief of specific performance. D2, is thus,
agreeable to pay back the amount of Rs. 12 lakhs with interest.
Analysis and Findings
17. The facts of the case are extremely stark. The Plaintiff is a widow,
who has made payment of more than 90% of the sale consideration prior to
the filing of the suit. At the time of the execution of the agreement to sell
and purchase, an amount of Rs. 9 Lakhs out of the total sale consideration of
Rs. 13 Lakhs was paid and is acknowledged in the agreement to sell itself
and records that "second party/purchaser has paid a sum of Rs. 2,00,000/-
on dt. 2.08.2003 and Rs. 3,00,000/- on dt. 5.09.2003 and Rs. 4,00,000/- on
dt. 20.10.2003..." This constitutes more than 75% of the sale consideration
of Rs. 13 Lakhs. Receipt dated 2ndAugust, 2003, which is signed by both the
Defendants records as under:
"RECEIPT
Received with thanks a sum of Rs. 2,00,000/- (Rs Two Lack
Rupees only) as advance money/Part Payment from :Mrs.
Veena Sharma D/o Sh. T.R. Sharma, R/o EA-1/63 Inderpuri D-
12against the sale of Entire Second Floor (without Terrace
rights:out of property No. 29/39, West Patel Nagar, New Delhi
- 110008, comprising with three bed room set admeasuring 100
sq. yds.
WITNESS WHEREOF this Receipt is made at Delhi on
this 2/08/03 in present of following witness:
WITNESSES :
Sd/-
2.8.03 EXECUTANTS :
HORAM SINGH
R/O : 7/53, Old Rajinder
Nagar, N. Delhi.
RAMAN MONGA
R/O: 2944, GaliNo. T3,
Ranjeet Nagar, N.
Delhi."
18. D1 admits the existence, the authenticity and the validity of the
agreement to sell as also the receipts issued. D1 categorically asserts in his
written statement that Rs. 1 Lakh is due from the Plaintiff and that he is
willing to execute the sale deed in favour of the Plaintiff. The stand of D2 is
quite suspicious inasmuch as, while, D2 admits his signatures on the second
page of the agreement to sell as also the signatures on the receipts, what is
disputed by D2 is the identity of the floor which was to be sold to the
Plaintiff. Thus, the agreement to sell is taken to be proved, as there is no
serious dispute regarding the same and the allegation of manipulation or
forgery is not made out.
19. D1 and D2 appear to be having inter se litigations; however, this
Court is not concerned with the said inter se litigations between the
Defendants. D2, while admitting that there exists an agreement to sell has
not produced any other document in place of what the Plaintiff has
produced. D2 repeatedly states that what was to be sold to the Plaintiff was
the first floor and not the second floor of the property. On a specific query
put by the court, as to whether D2 has any copy of the agreement to sell
mentioning the first floor of the property, the answer is in the negative. What
appears to the Court, from the pleadings is that the Plaintiff has made
payment of more than 90% of the sale consideration, but the Defendants are
either creating a smoke screen of a dispute or are having a genuine dispute
between each other. However, what is clearly the admitted position is that
the payments have been made. D2 has raised a dispute as to the identity of
the floor that was to be sold to the Plaintiff.
20. In view of the above, it is necessary to notice a few facts. The
property is a 100 square yards property in a posh locality of New Delhi,
located at West Patel Nagar. It is a prime property. The practice of using
different terminologies for various floors of the building is extremely
prevalent in Delhi, which is also evident from the various documents, relied
upon by the Plaintiff. A perusal of the documents on record and the
description of the various floors is set out below:
Collaboration agreement dated 26th April, 2003 - Floors described as
LFG, UGF, first floor, second floor, and Barsati and Mumty Floor;
The sale deed between the owner Sh. Ved Prakash Mahna and D2
dated 28thFebruary, 2004 was for the sale of entire first floor without
the terrace roof rights. This sale deed also records that D2 can install
the T.V. Antenna on the terrace roof of the top floor of the property
and shall also go to the terrace/roof for the purpose of repair and for
checking of water tank, etc [Exhibit No.DW-2/X];
The agreement to sell and purchase between the Defendants and Sh.
Vikas Sharma dated 25thDecember, 2003 records that the Defendants
are the exclusive co-owners and co-sharers of the built-up entire third
floor with terrace and roof rights of the property bearing No. 29/39,
West Patel Nagar, New Delhi. As per this agreement, the
consideration was Rs.11,45,000/- [Exhibit No.DW-1/2]; and
The sale deed dated 8thApril, 2004 entered into between the
Defendants and Sh. Vikas Sharma. In this document, the Defendants
describe themselves as being the exclusive owners of the built-up
entire freehold property bearing No. 29/39, West Patel Nagar, New
Delhi with terrace roof rights with super structure. Vide this
document, the Defendants sold the entire second floor with terrace
roof rights for a sum of Rs. 5 Lakhs [Exhibit No.D2/W2]. Thus there
is an inconsistency between the agreement to sell and the sale deed
entered into with Mr. Vikas Sharma. In the former the floor sold is the
third floor with terrace rights and in the latter it is the second floor
with terrace rights.
21. A perusal of all the above agreements shows that the Defendants are
not being true and candid. The description of the property is different in
different documents and the fact that the agreement with the Plaintiff
described the floor of the Plaintiff as the second floor whereas D2 contends
the same to be first floor, appears to be a complete red herring. For the
purpose of clarity, as per the collaboration agreement, there were supposed
to be the following floors in the property:
(i) Basement at the rear of 50 square yards- owner's share;
(ii) Lower ground floor (floor finish level--ready level clear) -
owner's share;
(iii) Upper ground floor - owner's share;
(iv) First floor - Defendants' share;
(v) Second floor - Defendants' share;
(vi) Barsati floor with roof rights - Defendants' share.
22. A tabular representation of the various floors as per the collaboration
agreement is set out below:
Floor Floor description Share as per
Name as per Collaboration
Given Collaboration Agreement
by Agreement
Court
R Roof/Barsati DEFENDANTS
D 2ND FLOOR DEFENDANTS Second floor described as third
floor in the agreement to sell
between the Defendants and Sh.
Vikas Sharma. Therefore, this
constitutes the third floor.
C 1ST FLOOR DEFENDANTS Lying vacant - with the
Defendants, and constitutes the
second floor. This floor is
described as 2nd Floor in the
Agreement to Sell with the
Plaintiff.
B UGF OWNER UGF described as the first floor in
the sale deed between the owner
and D2
A LGF OWNER
23. From the above tabular representation, it is clear that the building has
five floors, apart from the basement at the rear. The floor described as `B'
which is described as the First Floor in the agreement between the owner
and D2, was purchased from the owner. This floor was obviously not in the
share of the defendants - which is why D2 purchased the same from the
owner. The floor above Floor B i.e., Floor `C' is the second floor which is
being called the First Floor by D2. This floor `C' which falls in the share of
the Defendants/Builders as per the collaboration, was the floor referred to as
the second floor in the agreement to sell with the Plaintiff and is not the
floor which was sold to Sh. Vikas Sharma. As admitted by the learned
counsel for D2, this floor is lying vacant as on date. The Floor sold to Sh.
Vikas Sharma is Floor `D', along with the terrace rights, which is the top
most floor of the building. In the Agreement to Sell with Sh. Vikas Sharma
it is described as the third floor but in the Sale deed, for whatever reason, it
is described as the second floor. That does not mean that the second floor
has been sold to Sh. Vikas Sharma. What is sold to him is Floor D. The
entire argument as to the description of the floor has been raised only to
conflate the issue and raise an argument that specific performance cannot be
ordered. Even during arguments, the counsel for D2, on instructions have
confirmed that Floor `C' above, described as the First floor in the
collaboration agreement and described as second floor in the agreement to
sell with the Plaintiff, is lying vacant and is in the possession of the
Defendants. Thus, the issue as to the identity of the floor rests. It is Floor `C'
- irrespective of whatever name it is described as in the various documents.
24. Coming to the relief that can be granted in the suit, it is the settled
position in law that specific performance is an equitable remedy and the
Court while granting specific performance is exercising discretionary
jurisdiction. In Zarina Siddiqui v. A. Ramalingam @ R. Amarnathan,
(2015) 1 SCC 705 (hereinafter, 'Zarina Siddiqui'), the Supreme Court held
as under:
"24. It is well settled that remedy for specific
performance is an equitable remedy. The court while
granting decree of specific performance exercises its
discretionary jurisdiction. Section 20 of the Specific
Relief Act specifically provides that the Court's
discretion to grant decree of specific performance is
discretionary but not arbitrary. Discretion must be
exercised in accordance with sound and reasonable
judicial principles."
25. Under Section 20 of the Specific Relief Act, 1963 the discretion
vested in the Courts is not to be limited in any manner and the boundaries to
the exercise of the said relief would depend on the facts of each case. In
Satya Jain (dead) through LRs & Ors. v. Anis Ahmed Rushdie (dead)
through LRs. (2013) 8 SCC 131, the Supreme Court held as under:
"40. The discretion to direct specific performance of
an agreement and that too after elapse of a long period
of time, undoubtedly, has to be exercised on sound,
reasonable, rational and acceptable principles. The
parameters for the exercise of discretion vested by
Section 20 of the Specific Relief Act, 1963 cannot be
entrapped within any precise expression of language
and the contours thereof will always depend on the
facts and circumstances of each case. The ultimate
guiding test would be the principles of fairness and
reasonableness as may be dictated by the peculiar facts
of any given case, which features the experienced
judicial mind can perceive without any real difficulty.
It must however be emphasized that efflux of time and
escalation of price of property, by itself, cannot be a
valid ground to deny the relief of specific performance.
Such a view has been consistently adopted by this
Court. By way of illustration opinions rendered in P.S.
Ramakrishna Reddy v. M.K. Bhagyalakshmi and more
recently in Narinderjit Singh v. North Star Estate
Promoters Ltd. may be usefully recapitulated."
26. It is also well settled that the Plaintiff has to show readiness and
willingness to perform his or her part of the contract. In Zarina Siddiqui
(supra) the Court also held that the conduct of the parties would also govern
the grant or non-grant of specific performance. The Court's observation as to
conduct of parties is as under:
"33. The equitable discretion to grant or not to grant a
relief for specific performance also depends upon the
conduct of the parties. The necessary ingredient has to
be proved and established by the plaintiff so that
discretion would be exercised judiciously in favour of
the plaintiff. At the same time, if the defendant does
not come with clean hands and suppresses material
facts and evidence and misleads the court then such
discretion should not be exercised by refusing to grant
specific performance. "
27. In Zarina Siddiqui (supra), finally the Supreme Court held that the
conduct of the Defendant disentitled them for exercise of discretion in their
favour. However, in the facts of the said case the Court granted a sum of Rs
15 lakhs in favour of the Plaintiff.
28. In Balraj Taneja & Anr. v. Sunil Madan & Anr. (1999) 8 SCC 396,
the Supreme Court held that the readiness and willingness should be pleaded
by the Plaintiff and the Court is under an obligation to scrutinize as to
whether all the elements of the conditions contained in Section 16 of the
Specific Relief Act, 1963 are complied with or not. The Supreme Court held
as under:
"30. Applying these tests to the instant case, it will be
noticed that in a suit for specific performance it is
mandatorily required by Section 16 of the Specific
Relief Act to plead readiness and willingness of the
plaintiff to perform his part of the contract. The court,
before acting under Order 8 Rule 10 has to scrutinize
the facts set out in the plaint to find out whether all the
requirements, specially those indicted in Section 16 of
the Specific Relief Act, have been complied with or not.
Readiness and willingness of the plaintiff to perform
his part of the contract is a condition precedent to the
passing of a decree for specific performance in favour
of the plaintiff. "
29. In a recent judgment - Nadiminti Suryanarayan Murthy v. Kothurthi
Krishna Bhaskara Rao & Ors. (2017) 9 SCC 622, the Supreme Court
granted relief of specific performance and recognized an agreement to sell
dated 18th January, 1983 and directed the Plaintiff therein to pay the balance
sale consideration. The Supreme Court noticed that the Defendants had
created a bogus agreement to sell only to disentitle the Plaintiff. Under these
circumstances, the Court followed the dictum of Justice Vivian Bose in
Durga Prasad v. Deep Chand AIR 1954 SC 75. The Supreme Court
recognized primacy of the prior transferee, despite subsequent transfer of the
property having taken place. Even in the circumstances where the same
property was sold to 'A' and then re-sold to person 'B', the Court came to
the conclusion that 'A' is entitled to specific performance and hence 'B'
would be obliged to transfer the property back to 'A'. Thus, even in cases
where there was a subsequent transfer of the same property, specific
performance was granted to the prior transferee - though in the present case,
as found hereinabove, there is no subsequent transferee as the floor sold to
Sh.Vikas Sharma is not the same floor that was sold to the Plaintiff.
30. In Krishna Sweet House v. Gurbhej Singh (in RFA 421/2003 dated
30th April, 2012), a learned Single Judge of this Court observed that where
substantial consideration i.e. 50 % of the consideration is paid and the
proposed buyer is vigilant, he has a right in filing the suit after entering into
an agreement to sell, then the Court may grant specific performance. The
Appellant has referred to Jinesh Kumar Jain v. Iris Paintlal 2012 (5) ILR
(Del) 678 which is to the same effect. This Court held as under:
"14. Sub-section 3 makes it clear that Courts decree
specific performance where the plaintiff has done
substantial acts in consequence of a
contract/agreement to sell. Substantial acts obviously
would mean and include payment of substantial
amounts of money. Plaintiff may have paid 50% or
more of the consideration or having paid a lesser
consideration he could be in possession pursuant to the
agreement to sell or otherwise is in possession of the
subject property or other substantial acts have been
performed by the plaintiff, and acts which can be said
to be substantial i.e., merely 5% or 10% etc of the
consideration is paid i.e., less than substantial
consideration is paid (and for which a rough
benchmark can be taken as 50% of the consideration),
and/or plaintiff is not in possession of the subject land,
I do not think that the plaintiff is entitled to the
discretionary relief of specific performance."
31. The propositions of law being settled, the same need to be applied to
the facts of the present case. The conclusions that can be drawn from the
factual conspectus are:
a) The agreement to sell with the Plaintiff is not disputed, though D2 has
attempted to raise doubts as to its authenticity without any basis.
b) The agreement to sell and its contents are duly corroborated by the
receipt of Rs. 2 lakhs, which is an admitted document by all the
parties.
c) The description of various floors by different terminologies cannot be
used as a ruse for refusing enforcement of the agreement to sell.
d) More than 90% of the consideration i.e. Rs.12 lakhs of Rs.13 lakhs
stands paid.
e) Rs.9 lakhs out of Rs.13 lakhs stood paid on the date of agreement to
sell.
f) The consideration for one floor is higher than what Mr. Vikas Sharma
paid for the top floor with terrace rights. Under the agreement with
the Plaintiff, the consideration was Rs.13 lakhs. In the subsequent
agreement to sell with Sh. Vikas Sharma, for a higher floor along with
terrace rights, the consideration was Rs.11.45 lakhs and the
consideration in the sale deed is only Rs. 5 lakhs.
g) Floor C i.e. 2nd floor of the property, which is described as the 1stfloor
by D2 continues to remain vacant and is in the possession of the
Defendants.
h) Only Rs.1 lakh remains to be paid.
32. The conduct of the Defendants in this case is far from being bona-
fide. They have deliberately created confusion in the terminology which led
to the Trial Court refusing the relief of specific performance. The objection
being raised that the Plaintiff ought to have prayed for specific performance
in relation to the 1stfloor of the property itself shows that the Defendants
have not acted fairly. The Defendants have enjoyed more than 90% of the
sale consideration for almost 15 years. The non-appearance of D1 and the
haze of the disputes being created between the two Defendants, has resulted
in the Plaintiff not enjoying the property for which she has paid such a huge
consideration. D2 has all along attempted to deceive the Plaintiff by
claiming that the floor which was meant for the Plaintiff has been sold to Sh.
Vikas Sharma. From an understanding of all the agreements, this position is
not true. Sh. Vikas Sharma has acquired rights to the floor above the
Plaintiff's floor (by whatever name it may be called) along with terrace
rights. The Defendants disentitle themselves for exercise of discretion in
their favour and render the Plaintiff fully entitled for the relief of the specific
performance. The Plaintiff has demonstrated readiness and willingness to
perform her part of the contract, which fact is not being disputed by the
Defendants.
33. In the overall facts and circumstances, the Plaintiff is held entitled to
the decree of specific performance. A decree for specific performance is
passed in favour of the Plaintiff against the Defendants. Accordingly, the
following directions are issued:
(i) Defendants are directed to deposit the keys of the suit property
in Court on the next date.
(ii) Plaintiff is directed to hand over the balance sale consideration
of Rs. 1 lakh to the Defendants by Demand Draft on the next date.
(iii) The Defendants are directed to execute the sale deed for Floor
No. C i.e., 2nd floor of the suit property (described as 2nd floor in the
agreement to sell and described as 1st floor by the Defendants) bearing
No. 29/39, West Patel Nagar, New Delhi.The sale deed shall be
executed by the Defendants in favour of the Plaintiff on or before 15th
February 2018.
Conduct of the Defendants
34. This case raises serious concerns as to the manner in which property
is being sold by real estate agents/builders like the Defendants. The Plaintiff
is an individual widow who has invested her hard earned money with the
Defendants. The facts that emerge from the record are;
(i) The agreement to sell is of 2003 and the suit for specific
performance was filed in 2004. The Plaintiff has been litigating with
the Defendants for the last over 14 years.
(ii) Both the trial court and the Plaintiff were repeatedly
misrepresented that the floor which was agreed to be sold to the
Plaintiff was sold to Sh. Vikas Sharma and a deliberate confusion was
created as to the terminologies used for the different floors;
(ii) It appears that the Defendants have also seriously undervalued
the property in their transactions. In the agreement to sell with the
Plaintiff, one floor has been sold for Rs. 13 lakhs. However, the
consideration for the top floor along with the Barsati was shown as
Rs. 11.45 lakhs in the agreement to sell with Sh. Vikas Sharma but in
the final sale deed the consideration is only Rs. 5 lakhs. It is not clear
as to how and why the consideration can be so different in two
documents relating to the same transaction and the same property.
(iii) In the sale deed with Sh.Vikas Sharma the defendants represent
themselves as being owners of the entire property.
(iv) From the facts it is clear that the floor sold to Sh. Vikas Sharma
is not the floor which was to be sold to the Plaintiff. The Defendants
appear to be making incorrect reprentations to buyers and also appear
to be depriving the government exchequer by not paying full stamp
duty;
35. D1 has not appeared before the Court in the appeal proceedings, but
as per his written statement filed before the Trial court, it is his stand that he
is ready and willing to execute a sale deed in favour of the Plaintiff on
payment of the balance consideration amount. D1 had also, in fact, filed a
suit for declaration against Sh. Vikas Sharma to declare the portion of
property sold to him as the third floor. This suit was however dismissed.
Thus, it appears from the record, that it is only D2 who is creating a dispute
with respect to the description of the suit property. D2's claim in his
pleadings to the effect that the floor meant for the Plaintiff has been sold to
Sh. Vikas Sharma appears to be, prima facie, a `false claim' as envisaged
under Section 209 of the Indian Penal Code, 1860 (hereinafter, 'IPC').
Section 209 is reproduced below:
"209. Dishonestly making false claim in Court -
Whoever fraudulently or dishonestly or with intent to
injure or annoy any person, makes in a Court of
Justice any claim which he knows to be false, shall be
punished with imprisonment of either description for a
term which may extend to two years, and also shall be
liable to fine."
36. The law on Section 209 is well settled. In H.S.Bedi Vs. NHAI 2016
(155) DRJ 259 (hereinafter, 'H.S. Bedi'), this Court has laid down the scope
of Section 209 of the IPC and held that the said provision has been enacted
to preserve the sanctity of the Court and as a deterrent against making of
false claims. The relevant part of the judgment reads:
"15.1 Section 209 of the Indian Penal Code makes
dishonestly making a false claim in a Court as an
offence punishable with imprisonment upto two years
and fine.
15.2 The essential ingredients of an offence under
Section 209 are:(i) The accused made a claim; (ii) The
claim was made in a Court of Justice; (iii) The claim
was false, either wholly or in part; (iv) That the
accused knew that the claim was false; and (v) The
claim was made fraudulently, dishonestly, or with
intent to injure or to annoy any person.
15.3 A litigant makes a 'claim' before a Court of
Justice for the purpose of Section 209 when he seeks
certain relief or remedies from the Court and a 'claim'
for relief necessarily impasses the ground for obtaining
that relief. The offence is complete the moment a false
claim is filed in Court.
15.4 The word "claim" in Section 209 of the IPC
cannot be read as being confined to the prayer clause.
It means the "claim" to the existence or non-existence
of a fact or a set of facts on which a party to a case
seeks an outcome from the Court based on the
substantive law and its application to facts as
established. To clarify, the word "claim" would mean
both not only a claim in the affirmative to the existence
of fact(s) as, to illustrate, may be made in a plaint, writ
petition, or an application; but equally also by denying
an averred fact while responding (to the plaint/petition,
etc.) in a written statement, counter affidavit, a reply,
etc. Doing so is making a "claim" to the non-existence
of the averred fact. A false "denial", except when the
person responding is not aware, would constitute
making a "claim" in Court under Section 209 IPC.
15.5 The word 'claim' for the purposes of Section
209 of the Penal Code would also include the defence
adopted by a defendant in the suit. The reason for
criminalising false claims and defences is that the
plaintiff as well as the defendant can abuse the process
of law by deliberate falsehoods, thereby perverting the
course of justice and undermining the authority of the
law.
15.6 The words "with intent to injure or annoy any
person" in Section 209 means that the object of injury
may be to defraud a third party, which is clear from
the Explanation to Clause 196 in the Draft Code
namely: "It is not necessary that the party to whom the
offender intends to cause wrongful loss or annoyance
should be the party against whom the suit was
instituted."
.....................
15.15 Section 209 was enacted to preserve the
sanctity of the Court of Justice and to safeguard the
due administration of law by deterring the deliberate
making of false claims. Section 209 was intended to
deter the abuse of Court process by all litigants who
make false claims fraudulently, dishonestly, or with
intent to injure or annoy.
15.16 False claims delay justice and compromise
the sanctity of a Court of justice as an incorruptible
administrator of truth and a bastion of rectitude.
........................
15.21 Filing of false claims in Courts aims at
striking a blow at the rule of law and no Court can
ignore such conduct which has the tendency to shake
public confidence in the judicial institutions because
the very structure of an ordered life is put at stake. It
would be a great public disaster if the fountain of
justice is allowed to be poisoned by anyone resorting
to filing of false claims.
15.22 The Courts of law are meant for imparting
justice between the parties. One who comes to the
Court, must come with clean hands. More often than
not, process of the Court is being abused. Property-
grabbers, tax-evaders, bank-loan-dodgers and other
unscrupulous persons from all walks of life find the
Court-process a convenient lever to retain the illegal
gains indefinitely. A person, who's case is based on
falsehood, has no right to approach the Court. He can
be summarily thrown out at any stage of the litigation.
15.23 The disastrous result of leniency or
indulgence in invoking Section 209 is that it sends out
wrong signals. It creates almost a licence for litigants
and their lawyers to indulge in such serious
malpractices because of the confidence that no action
will result.
15.24 Unless lawlessness which is all pervasive in
the society is not put an end with an iron hand, the very
existence of a civilized society is at peril if the people
of this nature are not shown their place. Further if the
litigants making false claims are allowed to go scot
free, every law breaker would violate the law with
immunity. Hence, deterrent action is required to
uphold the majesty of law. The Court would be failing
in its duties, if false claims are not dealt with in a
manner proper and effective for maintenance of
majesty of Courts as otherwise the Courts would lose
its efficacy to the litigant public."
37. However, before coming to a final conclusion on the above aspect, D2
is given notice to show cause as to why action under Section 209 should not
be taken.
38. Further with the enactment of the Real Estate (Regulation &
Development) Act, 2016 (hereinafter, 'RERA'), the Legislature has taken
serious note of the conduct of real estate agents and promoters of real estate
projects in treating customers unfairly. As per RERA, every State is
expected to set up a Real Estate Regulatory Authority (hereinafter,
'Authority'), which has to function for the promotion of the real estate sector
and to protect the interests of the allottees. The said Authority has to take
measures as contemplated under Section 32 of RERA. One of the functions
of the said authority is maintenance of a database with the names and the
photographs of the promoters and real estate agents who are defaulters, for
public viewing, so that members of the public are cautioned. From publicly
available records, it appears that an interim Regulatory Authority has been
established in Delhi.
Conclusion
39. In conclusion, the following directions are passed:
(i) Show cause notice is issued to D2 as to why proceedings under
Section 209 of the IPC be not initiated against him;
(ii) Show cause notice is issued to both the Defendants as to why
directions ought not to be issued to the Regulatory Authority under RERA
for uploading their names and photographs for public viewing, as defaulters.
A copy of this order be sent to the Standing Counsel, Govt of NCT for
assisting the Court on this issue on the next date;
(iii) In the facts and circumstances of this case, the Plaintiff would be
entitled to costs of Rs.2,00,000/- (Rupees Two Lacs) payable by the
Defendants within one week.
PRATHIBA M. SINGH, J.
(JUDGE)
JANUARY 31, 2018
j
