Shri Sudhir Kumar Gupta Through ... vs Dr. Indra Chand Jain
2019 Latest Caselaw 3874 Del

*IN THE HIGH COURT OF DELHI AT NEW DELHI

                                         Reserved on: February 07, 2019
                                        Pronounced on: August 21, 2019

+     RFA 188/1982 & CM Nos. 1888/1993, 3709/2007, 15551/2010,
      7007/2011 & 4360/2007

      SHRI SUDHIR KUMAR GUPTA THROUGH LRs)
                                         .....Appellants
                    Through: Mr. Ashwin Vaish, Amicus
                             Curiae, Mr.Vinod Pandey &
                             Mr. Kunal Awana, Advocates


                          Versus
      DR. INDRA CHAND JAIN                        ....Respondent
                   Through:            Mr. Jai Sahai Endlaw,
                                       Mr. Shivansh Soni & Mrs. Deepika
                                       Mishra, Advocates for R-1.
                                       Mr. Vivek Sood, Sr. Advocate with
                                       Mr. Asim Shridhal & Mr. Manish
                                       Sharma, Advocates in CM No.
                                       4360/2007.

      CORAM:
      HON'BLE MR. JUSTICE SUNIL GAUR

                          JUDGMENT

Vide impugned judgment of 29th April, 1982 suit for specific performance of 'Agreement to Sell‟ (Exhibit PW-4/1) pertaining to right and interest of appellant in respect of 1/8th share in Kothi No. 1 Kasturba Gandhi Marg, New Delhi (hereinafter referred as suit property) stands decreed against appellant.

The operative paragraph of the impugned judgment reads as under:-

"In view of the decision of the above issues the suit of the plaintiff is decreed for specific performance of the contract against the defendant for sale of the rights titles and interest of 1/8 share of the defendant in Kothi No. 1 Kasturba Gandhi Marg, New Delhi for a sum of Rs.25,000/- out of which Rs.6,000/- has already been paid and on the payment of balance of Rs.19,000/- the defendant is directed to execute the sale deed and present the same for registration within one month from today and if he fails to execute the same official of the court will be appointed to execute the sale deed and present the same for registration on behalf of defendant with costs and decree sheet be prepared accordingly and file be consigned to record room".

The background facts emerging from the record are as under:-

Shri B.D. Gupta was the owner of perpetual lease rights of Property No. 1 Curzon Road (now known as „Kasturba Gandhi Marg, New Delhi, admeasuring 1.088 acres and comprising of main bungalow, annexe, garages, servant quarters etc. Shri B.D. Gupta died intestate on 20.10.1970 leaving behind the following as his only legal heirs, each admittedly inheriting a 1/8th share in 1, K.G. Marg.

 (i) Smt. Vidyawati                                        ...Widow
 (ii) Shri K.C. Gupta                                      ...Son
 (iii) Shri Sudhir Kumar Gupta                             ...Son
 (iv) Shri Ramnik Gupta                                   ...Son
 (v) Dr. (Mrs.) S.D. Gupta                                 ...Daughter
 (vi) Smt. Anita Kapoor                                   ...Daughter
 (vii) Smt. Prakash Gupta                                  ...Daughter
 (viii)Smt. Sneh Lata                                     ...Daughter

On 17.07.1971, the Defendant/Appellant entered into and executed an Agreement for sale for his one eighth undivided share in Property No.1 KG Marg with the Plaintiff/Respondent, in

consideration for a sum of Rs.25,000/- (Rupees Twenty-Five Thousand Only). Further, the Plaintiff/Respondent paid, a sum of Rs.6,000/- (Rupees Six Thousand Only) towards part payment of the sale consideration (as per clauses 3 & 5 of the Agreement for Sale), which amount was duly received by the Defendant/Appellant vide receipt dated 17.07.1971. The balance consideration was to be paid at the time of registration of the Sale Deed.

On 05.06.1973, the plaintiff/Respondent issued a notice to the Defendant/Appellant calling upon him to execute the sale deed as per the Agreement for Sale dated 17.07.1971. Pertinently, the Defendant/Appellant has not specifically denied the receipt of the said notice in his Written Statement, nor was suggestion denying receipt of the said notice in his Written Statement, nor was a suggestion denying receipt of the same put to the Plaintiff/Respondent during his cross- examination.

Before the trial court, plaintiff and the defendant had contested respondent's suit for specific performance on the following issues:- „1. Whether the suit as framed is not maintainable? OPD

2. Whether the suit is liable to be dismissed as preliminary objections No. 2 and 3 of the amended Written Statement? OPD

3. Whether the U.O.I. , is necessary party and a notice under Section 80 CPC was required to be given to it? If so, to what effect? OPD

4. Whether the Plaintiff is estopped and barred from filing the present suit as pleaded in the Written Statement? OPD

5. Whether the Defendant had 1/8 share in the property in suit and he agreed to sell his share to the Plaintiff by an agreement dated 17.7.71 and received Rs. 6,000/- as part payment and executed an Agreement and a receipt of the same date? OPP

6. Whether the Plaintiff is entitled to a Decree for Specific Performance of the Agreement or in the alternative the damages as claimed in the plaint? OPP‟

Respondent/plaintiff had deposed before trial court as PW-5 that on 17.07.1971, Defendant/Appellant had entered into an agreement for sale

of his one-eighth share in the Suit Property to him. He had deposed that the Defendant/Appellant had himself brought the 'Agreement to Sell‟ (Exhibit PW-4/1) duly typed, and signed. He identified the signature of Defendant/Appellant at Mark 'A', his own signature at Mark 'B', and that of Shri Lal Chand (first witness) at Mark 'C' and of Dr. Rizvi (the second witness) at Mark 'D'. Respondent/Plaintiff also identified the signatures of the Defendant/Appellant on the reverse of Stamp Paper. Respondent/Plaintiff proved payment Receipt dated 17.07.1971 and the Plan of Property No. 1 K.G. Marg.

Respondent/plaintiff had got examined hand-writing expert, R.P. Singh (PW-1), who had deposed that the disputed signatures marked Q-1 on the Receipt and Q-2 and Q-3 on the Agreement for sale are the genuine signatures in the handwriting of the same person who has written the said admitted and sample signatures as stated above. On behalf of respondent/plaintiff the concerned official (PW-2) has deposed in respect of the stamp paper on which agreement for sale was executed and the (PW-3) has deposed in respect of the entry of the reverse side of the stamp paper Ex. PW3/1 and had further deposed that he had sold the stamp paper to appellant/defendant and that the signatures had already been obtained on the reverse of the stamp paper as well as in the Register. Shri Lal Chand (PW-4) is an attesting witness of the agreement for sale, (Exhibit PW-4/1).

Appellant-Sudhir Kumar Gupta, had deposed as DW-2 before trial court and had taken the following stand:-

(i) the suit property is owned by an HUF;

(ii) the suit property had been re-entered by the L&DO and the rights of the Defendant/Appellant, if any, had already come to an end;

(iii) the suit property cannot be transferred without the L&DO‟s permission ;

(iv) the Defendant/Appellant denied execution of the Agreement for sale as well the receipt of Rs.6,000/-, claiming that his signatures were forged and that blank documents had been converted into the Agreement and the Receipt.

Before the trial court appellant/defendant had got examined, hand writing expert-Smt. R.K. Vijh. In the impugned judgment, trial court in the light of the above-referred evidence had decided the issue regarding maintainability of the suit against appellant/defendant and the second issue regarding the suit property being re-entered by the L&D.O. (Lessor Office). The bar to sell suit property in view of being re-entered has also been decided against appellant/defendant by holding that in a case pending in the Court Shri J.P. Sharma, ARC between the same parties, it has been admitted that the lease in respect of the suit property has been regularized and otherwise also respondent/plaintiff is prepared to pay ₹19,000/- in terms of agreement for sale (Exhibit PW-1/4) even if the lease is not regularized. While putting the burden on appellant/defendant, this issue has been decided against appellant.

The third issue regarding the Union of India being a necessary party and effect of not giving notice under Section 80 of Cr.P.C. Union of India has also been decided against appellant/defendant by holding that the Union of India is not a necessary party and is no notice under Section 80 of Cr.P.C. is required to be given.

The fourth issue of estoppel has also been decided against appellant/defendant by holding that on the strength of agreement for sale (Ex. PW-4/1), suit for specific performance of the suit property lies.

The fifth issue pertains to appellant/defendant having 1/8th share in the suit property and he is agreeing to sell his share to respondent/plaintiff vide agreement for sale of 17th July, 1771 after receiving ₹6,000/- as part payment and upon execution of receipt in token of the part payment and trial court has decided this issue in favour of plaintiff and against defendant by holding that appellant/defendant had 1/8th share in the suit property and upon receipt of ₹6,000/- as part payment he had agreed to sell his share in the suit property to respondent/plaintiff.

The sixth issue is of entitlement to a decree for specific performance for agreement for sale (Exhibit PW-4/1). The findings returned on this main issue in the impugned judgment is as under:-

"In view of the decision of the above issues, it is held that plaintiff is entitled to a decree for specific performance of the agreement. During the arguments counsel for the plaintiff argued that lease in the present suit property has already been regularised by Land and Development Officers the defendant and other co-owners of the property have produced the said orders in the court of Sh. J.P. Sharma, A.R.C. Delhi in eviction case filed by defendant and other co-owners against the plaintiff and even otherwise after passing the decree the court can direct the defendant to apply to regularisation of lease and further counsel for plaintiff argued that even if order of re-entry is not withdrawn the plaintiff is prepared to pay the balance sale price of Rs.19,000/- and defendant having failed to show that plaintiff is not entitled to the relief of specific performance of the agreement it is held that plaintiff is entitled to a decree for specific performance of the agreement and this issue is decided

accordingly in favour of the plaintiff and against the defendant".

During the pendency of this appeal, interim status-quo order was passed of which violation was alleged and this led to filing of the contempt petitions and application. On the insistence of the counsel for the parties, the hearing of the contempt petition and the applications were undertaken first, with the understanding that the contempt petitions would be heard and first decided.

Vide separate order, the contempt petitions have been already disposed of.

In the year 2007, applicant-M/s Evershine Pvt. Ltd. had filed an application bearing CM No. 4360/2007 in this appeal to step into the shoes of appellant before proceeding further, this application has to be first dealt with.

By way of this application M/s Evershine Pvt. Ltd. seeks to step into the shoes of appellant to claim 1/8 th undivided share in property no.1, Kasturba Gandhi Marg, New Delhi as applicant is said to have purchased the aforesaid undivided share in the subject property from one Sh.Ramnik Gupta, brother of late Sudhir Kumar Gupta on the basis of registered agreement to sell of 23rd May, 2006 in respect of 1/8th share of the suit property.

The opposition to this application of learned counsel for respondent is on the ground that in a suit for specific performance, applicant is not to be impleaded as he has separate remedy against the appellants in this appeal. It was pointed out that the agreement to sell has

been executed in violation of the interim order passed by this court in this appeal.

Learned Senior counsel for applicant submitted that applicant- M/s.Evershine Pvt. Ltd. has also purchased remaining share of the suit property vide separate sale deeds and relied upon Supreme Court's decision in Thomson Press (India) Ltd. vs. Nanak Builders & Investors Pvt. Ltd. & Ors., (2013) 5 SCC 397 to submit that in suit for specific performance, third party can be impleaded.

Submissions advanced on this application have been duly considered. On perusal of the record of this case, I find that applicant steps into the shoes of appellant on the basis of registered agreement to sell on 23rd May, 2006, therefore, this application for impleadment is required to be considered in the light of Thomson Press (India) Ltd Vs. Nanak Builders & Investors Pvt. Ltd & Anr., as applicant claims to be bona fide purchaser. Since the applicant had bona fidely purchased the suit property and so, it is entitled to be impleaded subject to any direction which this Court may eventually pass on merits.

Accordingly, this application is allowed while permitting the applicant to substitute the appellant to contest this appeal. Amended Memo of Parties be placed on record by the substituted appellant.

Before proceeding further, the pending applications are required to be dealt with. Mr. Jaideep Gupta, one of the legal heirs of appellant-S.K. Gupta, vide application No. 1888/1993 had sought to withdraw his claim in the appeal on the basis of some settlement arrived with the respondent. Similar application being CM No. 1647/1994 was filed by another legal heir of appellant-Mr. Sandeep Gupta. However, both these applications

were not pressed during the pendency of this appeal. As such, both these applications are disposed of, as not pressed.

However, application being CM No. 3709/2007 filed by respondent to seek dismissal of the appeal is pending, to be heard with the main appeal itself.

The challenge to impugned judgment is on the ground that trial court has erred in ignoring the evidence of handwriting expert and to return a finding on the basis of admissions made by the appellant/ defendant. It was pointed out that so called admissions by appellant/defendant are not in respect of alleged consideration for selling the suit property. It was pointed out that the first page of the agreement to sell is not signed by appellant/defendant and little money which respondent/ plaintiff had given to him, was the loan amount as appellant/defendant did not have good relations with his father. Thus, it was submitted that the impugned judgment is liable to be set aside. It was pointed out that the amount received from the plaintiff was not the part payment of the sale consideration of the suit property but was the loan amount which appellant/ defendant had taken from the plaintiff on different occasions and the said amount did not exceed from ₹4,000/-.

Learned Senior counsel for the applicant adopted the stand taken by learned counsel for the appellant/defendant and pointed out that alleged 'Agreement to Sell‟ is of 17th July, 1971 and as per this agreement, the consideration was ₹25,000/-. It was pointed out that the notice of re-entry was also given by L&DO prior to the alleged execution of the agreement to sell and as per the notice by L&DO, two years time was given to get the re-entry revoked and it was not got done and as per

the agreement to sell, if it is not done, then agreement to sell was to be revoked for ₹19,000/-.

Reliance was placed upon a decision of this court in 'Sarabjit Singh Vs. Anup Sharma & Ors‟. 2016 SCC Online Del 3140 to submit that the agreement to sell was of the year 1971 and suit for specific performance was filed in 1973 and there is no averment in the suit filed that the plaintiff was ready and willing to perform the agreement in question. Thus, it was submitted that the necessary averments to seek specific performance of 'Agreement to Sell‟ are lacking and so, this appeal deserves to be allowed.

Learned counsel for respondent/plaintiff submitted that in lieu of the part payment of ₹6,000/-, a receipt dated 17th July, 1971 (Exhibit PW5/1) was executed by the defendant. It was pointed out that no suggestion has been given by the defendant to the handwriting expert that the signatures on the agreement to sell are not of the defendant. So, it was submitted that the handwriting expert's report confirming that the signatures of the defendant on agreement to sell is sufficient to prove the case of the plaintiff. It was pointed out that the attesting witness (PW-4) has duly identified the signatures of the plaintiff as well as defendant on the agreement to sell, receipt, etc., and so the trial court has rightly decreed the plaintiff's suit. It was pointed out that the 'notice of the entry' issued by L&DO was withdrawn by virtue of the order of the Supreme Court. It was submitted that in the plaint it is specifically averred that the plaintiff has been ready and willing to perform the agreement and this fact was not considered by the trial court in decreeing the suit. It was also pointed out that to seek execution of the decree, the

respondent/plaintiff has already deposited entire sale consideration with the Executing Court and thereafter only, the decree stands executed in the year 1982. It was submitted that the evidence of handwriting expert relied upon by the appellant/defendant is not acceptable as she in her evidence stated that she had taken the help of other handwriting expert but she is not able to tell which portion of the report was prepared by other handwriting expert and the said handwriting expert who had helped her has not been produced by her in evidence. It was pointed out that the appellant/defendant has taken contradictory stand and has not established that the suit property is HUF property.

It was pointed out that the signatures of the appellant/defendant were also found in the register as per the deposition of the stamp vendor and so, the version put forth by the appellant/defendant of signing blank stamp papers has not been rightly accepted by the trial court. Thus, dismissal of the appeal is sought.

Upon indepth scrutiny of the evidence on record, in the light of the submissions advanced by both the sides, this Court finds that time was the essence of the contract. Appellant was to get re-entry notice in respect of the suit property withdrawn within a period of two years, which appellant had failed to do so. Clearly the suit property was encumbered and did not have a marketable title. Supreme Court in 'Saradamani Kandappan Vs. Rajalakshmi‟ has reiterated that even in law the obligation of the vendors is to convey an encumbrance-free, good and marketable subsisting title. Relevantly, respondent/plaintiff has not pleaded in the plaint that respondent/plaintiff was ready and wilful to perform his part of the agreement. Apart from paying earnest money of

₹6,000/- in cash, respondent/plaintiff had at no point of time offered, paid or deposited the balance sale consideration.

Though, trial court has proceeded on the premise that the lease of the suit property has been regularized by Land & Development Office, but there is nothing on record that the lease deed in respect of the suit property has been actually regularized.

Impugned judgment cannot be sustained for the reason that the contract between the parties actually stood negated as the lease deed in respect of the suit property has not been actually regularized. A clause in the 'Agreement to Sell‟ regarding the selling of suit property for lesser consideration in the event of lease deed in question being not regularized, is against public policy. Trial court has gravely erred in granting specific performance on the agreement to sell, while relying upon aforesaid clause. Title defect in the suit property bars specific performance of the agreement to sell. Execution of agreement to sell and receipt is not duly proved on record as the evidence of hand-writing expert has been found by the trial court to be in-conclusive. Trial court has solely relied upon the evidence of respondent/plaintiff to grant specific performance of the agreement to sell in question, which does not inspire confidence and there is no material on record on the basis of the receipt regarding earnest money of ₹6,000/- in cash could be proved. Trial Court has erred in blindly relying upon the evidence of respondent/plaintiff while ignoring that appellant has denied the execution of agreement to sell and the receipt as existence of these documents is not satisfactorily proved on record.

The evidence regarding appellant receiving loans from time to time and of his signing some papers has been given undue weightage by trial court as appellant had received little money from time to time, not in relation to this transaction and this stands explained by appellant who has categorically deposed that a decree for ₹35,000/- on account of loans obtained by appellant from defendant has been already passed in another suit, much later in point of time. Relevantly, respondent/plaintiff has not adjusted the earnest money of ₹6,000/- received in cash by him towards the outstanding loan amount and since the evidence of readiness and willingness to perform his part of agreement is lacking, therefore, this Court holds that trial court has erred in decreeing the suit for specific performance in favour of respondent/plaintiff. Otherwise also, since the suit property was not encumbrance free and the title of appellant in the suit property was not marketable and subsisting, therefore, impugned judgment, decreeing the suit for specific performance of the agreement to sell cannot be sustained and is accordingly set aside.

In the facts and circumstances of this case, while setting aside the impugned judgment, this appeal is disposed of with direction that the deposit made by respondent/plaintiff with the concerned authority be refunded back forthwith.

With aforesaid directions, this appeal and the applications are accordingly disposed of.

(SUNIL GAUR) JUDGE AUGUST 21, 2019 p‟ma