Delhi High Court
Tarun Sawhney vs Uma Lal And Others on 5 February, 2019
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 6th July, 2017
Decided on: 5th February, 2019
+ CS(OS) 2051/2010 and Crl.M.A. 12418/2013 (u/S. 340 Cr.P.C. by
D-3 & 5) & IA 24611/2015 (for compensation by D-3 & 5)
TARUN SAWHNEY ..... Plaintiff
Represented by: Mr. Saurabh Kirpal, Mr.
Harpreet Singh and Mr. Rajesh
Gupta, Advocates.
versus
UMA LAL AND OTHERS ..... Defendants
Represented by: Mr. Arun Batta, Advocate for
defendant Nos. 1, 2 and 4.
Mr. Amiet Andlay, Advocate
for defendant No.3.
Defendant No. 5 in person.
CORAM:
HON'BLE MS. JUSTICE MUKTA GUPTA
1.
Tarun Sawhney, the plaintiff has filed the present suit seeking a decree
of specific performance of the two Agreements to Sell both dated 16th
September, 2009, the first Agreement to Sell being executed between the
plaintiff and defendant Nos. 1 to 5 in respect of undivided one half share of
the property No. 32, Nizamuddin East, New Delhi-110013 (in short 'Suit
Property') and the second Agreement to Sell of the even date executed
between the plaintiff and defendant No. 5 in respect of the other undivided
half share in the suit property. The plaintiff also seeks a decree of permanent
injunction against the defendants from creating any third party interest in the
suit property and mandatory injunction to execute and get registered the
Conveyance Deeds in his favour in respect of the suit property, in the
alternative the relief of damages.
2. Vide an ex-parte ad-interim order dated 4th October, 2010 the
defendants were restrained from creating any third party interest in the suit
property and vide order dated 4th February, 2011 the application of the
plaintiff under Order XXXIX Rule 1 and 2 CPC and that of defendant Nos. 3
and 5 under Order XXXIX Rule 4 CPC were disposed of restraining the
defendants from selling, transferring, assigning, mortgaging or parting with
the possession of the suit property or any part thereof or creating any third
party interest during the pendency of the suit, without prior permission of the
Court subject to the plaintiff depositing a sum of ₹30.68 crores by way of a
FDR in the name of the Registrar General of this Court.
3. Against the order dated 4th February, 2011 passed by this Court
disposing of the application under Order XXXIX Rule 1 and 2 CPC filed by
the plaintiff, the plaintiff filed an appeal being FAO (OS) No.104/2011
wherein the Division Bench of this Court directed that instead of depositing
FDR in the sum of ₹30.68 crores, the plaintiff would furnish a bank
guarantee of the same amount in the name of the Registrar General of this
Court to the satisfaction of the Registrar General.
4. Defendant Nos. 3 and 4 also filed an application being I.A. No.
10719/2011 under Order VII Rule 11 CPC which was dismissed by this
Court vide order dated 5th September, 2011.
5. On completion of pleadings the following issues were settled in the
suit by this Court vide order dated 1st August, 2011:
1. Whether the plaint does not disclose any cause of action
to file the present suit? (OPD).
2. Whether the Agreements to Sell dated 16.09.2009 does
not stand terminated and extinguished? (OPP).
3. Whether the plaintiff had always been ready and willing
to perform his part of the Agreements to Sell dated
16.09.2009? (OPP).
4. Whether the plaintiff is entitled to specific performance of
the Agreements to Sell dated 16.09.2009? (OPP).
5. If specific performance of the Agreements to Sell dated
16.09.2009 is not granted to the plaintiff, whether he is
entitled to damages and if so, to what amount? (OPP).
6. Whether the plaintiff is entitled to the mandatory
injunction sought by him? (OPP).
7. Whether the plaintiff is entitled to the permanent
injunction sought by him? (OPP).
8. Whether the suit is barred by estoppel? (OPD).
9. Whether the defendants have committed breach of the
Agreements to Sell dated 16.09.2009? (OPP).
10. Whether the suit is bad for misjoinder of causes of
action? (OPD-1, 2 and 4).
11. Relief.
6. Undisputed facts between the parties are that on 28th January, 1957
leasehold rights in respect of Plot No. 32, Nizamuddin East, Delhi measuring
approximately 1221 sq. yards were granted in favour of Usha Bhagat, the
unmarried sister of the five defendants. On 14 th August, 1969 an agreement
was executed between Usha Bhagat and her brother Vinoo Bhagat, defendant
No. 5 whereby Usha Bhagat agreed to transfer her right, title and interest in
undivided half share of the suit property in favour of Vinoo Bhagat. In a suit
for specific performance of the agreement dated 14th August, 1969 filed by
Vinoo Bhagat against Usha Bhagat being Suit No. 42/1983 later numbered
as Suit No. 706/2002, the learned Civil Judge vide the judgment dated 19 th
February, 2005 decreed the suit in favour of Vinoo Bhagat pursuant to which
a Transfer Deed Ex. PW-1/1 was executed in favour of Vinoo Bhagat who
became owner of half undivided share of the suit property. On 1 st March,
2006 Usha Bhagat passed away and on her death defendant Nos. 1 and 2,
that is, Uma Lall and Urmila Kapur, her two sisters applied for probate of
Will of Usha Bhagat by filing Probate Case No. 564/2006.
7. On 24th October, 2008 a Letter of Administration was granted in
favour of defendant Nos. 1 to 5 being the legal heirs of Usha Bhagat entitling
them to an equal share in the half undivided share of the suit property of
Usha Bhagat. On 3rd February, 2009 Vinoo Bhagat filed an application for
mutation of the half undivided share in the suit property with the L & DO.
8. On 27th March, 2009 defendant Nos. 1 to 5, that is, Uma Lall, Urmila
Kapur, Upma Khanna, Kapil Bhagat, Vinoo Bhagat, all daughters and sons
of late H.G. Bhagat and siblings of late Usha Bhagat filed a joint mutation
application with the L & DO for mutation of the other half of the suit
property. Along with the mutation application defendants inter alia filed
copies of the Will of late Usha Bhagat dated 10 th April, 2003 and the Letter
of Administration dated 24th October, 2008.
9. On 16th September, 2009 two Agreements to Sell were executed
between the plaintiff and the defendants, the first Agreement to Sell Ex. PW-
1/2 between plaintiff and the defendant Nos. 1 to 5 and the second
Agreement to Sell Ex.PW-1/3 between plaintiff and defendant No.5. On 16th
September, 2009 itself a Supplementary Agreement (Ex. PW-1/4) was also
executed between the plaintiff and the defendant No.5 wherein the plaintiff
revised the consideration and agreed to pay a sum of ₹15.90 crores to
defendant No.5.
10. On 7th April, 2010 an application was filed on behalf of the defendants
before L & DO withdrawing their joint mutation application dated 27 th
March, 2009 exhibited as Ex. PW-1/6 and a fresh application was filed on
19th April, 2010 for mutation of the half undivided share in the suit property
based on the Will of deceased Usha Bhagat and claimed to be signed by
defendant Nos. 1 and 2.
11. Memorandum of family settlement was executed by and between the
defendants vide Ex. PW-1/8 noting that the mutation understood not to
convey any title in the property and the application of mutation is made in
the names of defendant Nos. 1 and 2 only for expediency. Though the claim
of defendant Nos. 3 and 5 is that Ex. PW-1/8 has no bearing on the
Agreement to Sell however, the document is admitted. An application was
filed on behalf of defendant Nos. 1 and 2 for conversion of the suit property
to freehold with the L& DO vide Ex. PW-1/9 on 28th June/5th July, 2010. On
27th July, 2010 the L & DO mutated one half undivided share in the suit
property in favour of defendant No. 5 in terms of his application dated 3rd
February, 2009 and the other half in favour of defendant Nos. 1 and 2 as
Executors of the Will of Usha Bhagat on the basis of their application dated
19th April/4th May, 2010. On 4th September, 2010 plaintiff informed the
defendants to conclude the transaction and that he was ready to make the
balance payment followed by the letter dated 10 th September, 2010 by the
plaintiff informing about his readiness and willingness to complete the
transaction of sale by requesting them to execute Power of Attorneys in his
favour irrespective of freehold conversion and offered to deposit the balance
amount in Escrow account which could be withdrawn on execution of
documents or to take post-dated cheques or demand drafts requesting
encashment on execution of the Sale Deed. A response was sent by
defendant No. 5 vide his letter dated 11 th September, 2010 exhibited as Ex.
PW-1/15 denying the contents of letter dated 10 th September, 2010 of the
plaintiff and that the exclusion of nine months from the period of the two
agreements and new offers made, were afterthought and that Upma
Khanna/defendant No.3 and defendant No. 5 were ready and willing to
perform their part of Agreement to Sell in accordance with the terms and
conditions during the period of their validity as written in the said
agreements.
12. Defendant Nos. 1 and 2 wrote a letter dated 13th September, 2010
responding to the plaintiff's letter dated 4th September, 2010 extending the
time for conclusion of transaction of sale by three months which was
exhibited as Ex. PW-1/13. On 15th September, 2010 L & DO converted the
property from leasehold to freehold and invited defendant Nos. 1, 2 and 5 to
come with certain documents on 27th September, 2010 for execution of the
Conveyance Deed. However, on 22nd September, 2010 the defendant Nos. 3
and 5 wrote a letter to the plaintiff stating that the Agreement to Sell stood
terminated on 15th September, 2010 and sent him two cheques for the refund
of the earnest money received by them exhibited as Ex. PW-1/16 followed
by the plaintiff filing the suit for specific performance, permanent and
mandatory injunction on 1st October, 2010.
13. Before dealing with the issues individually it would be relevant to note
the rival stands of the parties in the plaint, written statements, evidence led
and the various contentions raised by the learned counsels.
14. Broadly the contentions of learned counsel for the plaintiff are that the
Agreements to Sell for the immovable property were not bound by the time
restriction and the plaintiff did his best to get the suit property mutated in the
name of the defendants and got it converted to freehold. Defendant Nos. 3
and 5 changed their minds and took the plea that on 15th September, 2010 the
two agreements stood terminated by afflux of time and hence the defendant
Nos. 3 and 5 were not obliged to execute the sale deeds. The two
applications for mutation before the L & DO were filed prior to the two
Agreements to Sell executed with the plaintiff which were pursued by the
plaintiff and the proceedings before the L & DO being beyond the control of
the plaintiff, the plaintiff could not be put to a prejudice. Since a confusion
arose because of claiming inheritance on the basis of the Will of the
deceased, fresh application was required to be filed on behalf of defendant
Nos. 1 and 2 which was followed by the family arrangement. Thus, the time
required in the proceedings before the L & DO was required to be excluded
whereafter the defendants were required to execute the sale deeds and
transfer the possession to the plaintiff after taking the entire balance
consideration.
15. It is further contended that the plaintiff was always ready and willing
to perform his part of the agreements as is evident from the various
communications. There is no suppression of material facts and while filing
the plaint all material documents were filed before the Court. The
defendants had sought rejection of plaint which application was dismissed
and the order upheld not only by the Division Bench but also by the Supreme
Court in SLP (C) No. 23845/2012. Necessary ingredients of a suit for
specific performance, permanent and mandatory injunction are pleaded in
the plaint. There was no automatic termination of the two Agreements to
Sell and in any case time for execution of the Agreements to Sell was
extended by defendant Nos. 1, 2 and 4. In view of the mala fide conduct of
defendant Nos. 3 and 5 the plaintiff cannot be made to suffer and a decree of
specific performance be passed in his favour.
16. Contention of learned counsel for defendants Nos. 1, 2 and 4 is that in
his cross-examination the plaintiff admitted that he did not do anything for
pursuing the applications before the L & DO as he did not visit office of the
L&DO. As per Clause 12 of the first Agreement to Sell vendor was to do
only those acts and execute documents which would have enabled the
vendee to get the mutation done. Thus, it was the duty of the vendee, that is,
the plaintiff herein and not the vendors, that is, the defendants to get the
mutation done by following up the matter before the L & DO.
17. It is further contended that though defendant Nos. 1, 2 and 4 extended
the time however, it was not required to be done as the plaintiff himself was
negligent. In any case defendant Nos. 1, 2 and 4 having extended the time
for execution of the sale deed, they are not liable to suffer a decree of
damages rather they are entitled to the interest on the amount so required to
be received by them.
18. Learned counsel for defendant No. 1, 2 and 4 further contends that
since two separate agreements were executed, the suit is liable to be
dismissed for misjoinder of causes of action and that no cause of action
arises in favour of the plaintiff and against defendant Nos. 1, 2 and 4.
19. Defendant No. 5 who addressed arguments in person which arguments
were adopted by the learned counsel for the defendant No.3 submits that
since the agreements to sell automatically terminated by afflux of time as the
sale deeds were not executed within the time period noted, the present suit is
liable to be dismissed as no valid agreements to sell were in existence at the
time when the suit was filed and thus the suit was filed without any cause of
action.
20. The plaint does not contain any prayer clause seeking declaration of
the termination of the agreements to sell as null and void in the absence
whereof specific performance of the non-existent Agreements to Sell cannot
be sought. Referring to the email of the plaintiff dated 4th September, 2009
wherein he claimed time was essence of the contract, it is contended the
plaintiff cannot now claim that the agreement being for an immovable
property, time is not essence of the contract. Despite legal advice and
clarification of the facts plaintiff failed to perform his part of the duty and
thus no specific performance of the agreements can be granted in his favour.
21. It is further contended that the plaint is bereft of the essential statutory
pleadings necessary for a suit for specific performance as no breach of
contract has been alleged by the plaintiff against the defendants. Time was
the essence of the agreement and the terms of the agreements to sell having
not been fulfilled within the prescribed period, no specific performance of
the two agreements to sell can be enforced. Plaintiff is not entitled to any
discretionary remedy because he has deliberately and dishonestly suppressed
admissions and pleaded contrary to the same in the plaint. The statutory
notices as required under clauses 18 and 15 of the first and second
Agreement to Sell respectively were not given thereby proving that the
plaintiff was not ready and willing to perform his part of the contract.
22. Since the defendants Nos. 3 and 5 immediately returned the earnest
amount by way of cheques which the plaintiff failed to encash, the
defendants are not even liable to pay damages to the plaintiff. The family
arrangement between the parties Ex. PW-1/8 does not create a right in favour
of the plaintiff who is a stranger to the family arrangement. Agreements Ex.
PW-1/2 and PW-1/3 were required to be enforced strictly according to their
terms. Further in view of the suppression of material facts in the plaint and
false claims having been raised, the plaintiff is neither entitled to the specific
performance of the two agreements nor damages.
23. The two Agreements to Sell dated 16th September, 2009 exhibited as
Ex. PW-1/2 and Ex. PW-1/3 respectively are pari materia the same except
that Ex. PW-1/2 is executed between the plaintiff and all the defendants for
undivided half share whereas Ex. PW-1/3 is executed between plaintiff and
defendant No. 5 for the remaining undivided half share in the suit property.
It would be appropriate to note Clauses 9, 12, 13, 19, 20 of the Agreement to
Sell Ex. PW-1/2 which correspond to Clauses 6, 10, 11, 16 and 17 of
Ex.PW-1/3 as under:
"9. This agreement as well as the other agreement with
vendor No. 5 relating to the remaining one-half of the property
has been entered into with the understanding of all parties to
both agreements that both agreements shall run concurrently
with each other so as to effect sale of the entire leasehold plot
No. 32 Nizamuddin East, New Delhi, and construction thereon
to the vendee.
10. .........
11. .......
12. The Vendors shall do all acts and execute all documents
including applications, affidavits, power of attorney and others
as may be requisite in the circumstances to enable the Vendee
to get mutation and conversion to freehold of the said property
effected; the documents will be furnished to the Vendee within
7 working days of request thereof; copies of the Vendors'
application for mutation and all correspondence with the
L&DO on the subject so far are annexed hereto as Annex 2.
The Vendors shall carry out further correspondence, if any,
with the L&DO with the Vendee's concurrence.
13. If the Vendee is ready and willing to perform his part of
the obligation hereunder but any one or more of the Vendors
defaults in performing his/their obligations hereunder the
Vendee shall have the following options independently of each
other:-
a) To seek specific performance and relief ancillary thereto.
b) to purchase that part of the said property from those
Vendors who are ready and willing to sell their shares, without
reference to defaults by any other Vendor(s).
c) To seek refund of earnest money from all Vendors and all
money lawfully paid by the Vendee to the L&DO on their
behalf on account of mutation, conversion to freehold and
other lawful charges. In addition to the above, each Vendor
shall pay a sum of Rs. 4 lac to the Vendee if any Vendor
defaults after mutation has been carried out. The defaulting
Vendor(s) shall be liable to pay double the amount of earnest
money in addition to the aforesaid charges.
14. .....
15. .....
16. .....
17. .....
18. ......
19. This agreement supersedes all earlier oral or written
negotiations between the Vendors and the Vendee pertaining to
the said property.
20. If this Agreement is not implemented within twelve
calendar months from the date hereof this Agreement shall
stand terminated and extinguished automatically without any
further act of parties and the Vendors shall be at liberty to sell
the said property to any other person after refund of earnest
money, as also other lawful charges hereinabove mentioned if
paid by the Vendee on behalf of the Vendor; the intention of the
parties is that they shall be restored to the same position as at
the date hereof and as if this Agreement had not be executed.
24. Issue No. 1:-Whether the plaint does not disclose any cause of action
to file the present suit? (OPD)?
25. Contentions raised by defendant Nos. 3 and 5 to support the issue that
the plaint does not disclose any cause of action are:
a) The plaint does not contain statutory averments that are
essential in a suit for specific performance, e.g. that
plaintiff gave notice to defendants to perform the
agreements and they failed to do so;
b) The plaint does not contain a prayer for a declaration
that the agreed automatic termination of the agreements
is bad in law;
c) The Suit is without cause of action because it is based on
non-existing Agreements to Sell;
d) Power of termination is part of the general law of
contracts; clear words of a termination clause must be
given effect to. The plaintiff admitted in writing that time
was of the essence, but has dishonestly suppressed his
admission and pleaded to the contrary in his plaint;
e) The plaint does not aver breach of contract by the
defendants;
f) The plaint does not aver that 30-day notice under clause
18 (& 15) that the sale deeds were ready for execution
was given, proving that the plaintiff was not ready and
willing;
g) The averment in para 25 of the plaint read with Ex.
PW1/14 proves that the plaintiff had abandoned the
agreements to sell and was not ready and willing to
perform them;
26. Sub-issues (a), (e) and (f) can be dealt with together. In respect of the
first sub-issue that the plaint does not contain statutory averment that is
essential for a suit for specific performance, that on a notice given to the
defendants to perform the agreements they failed to do so, defendant No. 5
besides stating that there was no such statutory averments essential in the
suit for specific performance, relies upon the decisions of the Supreme Court
reported as 1970 (I) SCR 921 Ouseph Varghese vs. Joseph Aley & Ors. and
2012 (8) SCC 706 Church of Christ Charitable Trust etc. vs. Ponniamman
Education Trust. In the two decisions Supreme Court held that it was
incumbent on the plaintiff not only to set out the agreement on the basis of
which he sues in all its details, but also to plead that he applied to the
defendant specifically to perform the agreement pleaded by him but the
defendant has not done so. Defendant No. 5 relies upon Form-47 in
Appendix-A to the Code of Civil Procedure which in para-2 provides that
"the plaintiff has applied to the defendant specifically to perform the
agreement on his part, but the defendant has not done so."
27. It is well settled that the Form so prescribed in the Appendix to the
Code of Civil Procedure is to be adhered to in sum and substance and it is
not necessary for the plaintiff to make an averment verbatim on the said
lines. If from the reading of the plaint, it is found that the plaintiff has given
details of the sequence of events, his efforts made to execute the contract,
expressing his readiness and willingness to fulfill his part of the obligation
including making of the payment of the balance sale consideration after
formal execution of the Conveyance Deed asking the defendants to conclude
the transaction at the earliest and in detail explaining how the defendants
sought to wriggle out of the contract, in sum and substance the plaintiff has
pleaded the requirement of Form-47 in Appendix-A to the Code of Civil
Procedure.
28. Paragraphs 21 to 37 of the plaint in detail set out the sequence of
events performed by the plaintiff wherein the plaintiff has stated that he
acted diligently and also sent a letter on 4th September, 2010 to which the
defendants reacted differently, followed by a letter dated 10th September,
2010 by the plaintiff spelling out that there was no delay or disinterest on his
part, he was ready to abide by his part of the obligation and was always
willing to do and ready to make the payment of balance sale consideration
which was to be done only after execution and registration of Conveyance
Deed after mutually fixing a convenient time and date for execution and
registration of the Sale Deed in terms of Clause-18 of the first Agreement to
Sell and Clause-15 of the second Agreement to Sell. Thus the plaintiff has
complied with the necessary requirements of a suit for specific performance
and the suit is not required to be dismissed on this count.
29. Sub-issues (b), (c) and (d) relate to the plaintiff not seeking a prayer
for declaration of the agreed automatic termination of the agreements and
there being no cause of action as there were no existing Agreements to Sell.
These sub-issues are common to issue No.2 and are therefore dealt with issue
No.2.
30. Sub-issue (g) Defendant No.5 seeking dismissal of the suit is on the
ground that the suit shows no cause of action in view of averments in para-
25 of the plaint read with Ex.PW-1/14 which proves that the plaintiff had
abandoned the Agreement to Sell and was not ready and willing to perform
them.
31. In para-25 of the plaint the plaintiff had stated about the dishonest and
evasive conduct of the defendant Nos. 3 and 5 compelling the plaintiff to
write letter dated 10th September, 2010 to the defendants wherein he
explained the entire circumstances leading to difficulties in getting mutation
and conversion of the suit property. It was clearly spelt out that there was no
delay on part of the plaintiff to perform his part of the obligations and the
plaintiff was willing to abide by his obligations particularly by making
payment of balance sale consideration. The plaintiff was not only ready to
make the balance sale consideration but to take subsequent tedious
administrative responsibilities upon himself for getting the title of the suit
property in his favour. In any case the plaintiff was required to pay the
remaining sale consideration only after execution and registration of the
Conveyance Deed and after mutually fixing convenient time and dates for
execution and registration of a sale deed. It was also stated that the plaintiff
is still ready and willing to perform all his obligations in terms of the two
Agreements to Sell dated 16th September, 2009.
32. Ex. PW-1/14 is the letter dated 10th September, 2010 sent by the
plaintiff to the defendants wherein he stated that he was still ready to
perform his part of obligation however, in view of the paucity of time the
plaintiff sought confirmation from the defendants on the alternative proposal
so that he could purchase the necessary stamp papers for completion of the
formalities for registration along with Conveyance Deed and when
defendants would be available for registration.
33. Defendant No. 5 relies upon Section 16 Clauses-(b) and (c) of the
Specific Relief Act which reads as under:
"16. Personal bars to relief.--Specific performance of a
contract cannot be enforced in favour of a person--
(a) who would not be entitled to recover compensation for its
breach; or
(b) who has become incapable of performing, or violates any
essential term of, the contract that on his part remains to
be performed, or acts in fraud of the contract, or wilfully
acts at variance with, or in subversion of, the relation
intended to be established by the contract; or
(c) who fails to aver and prove that he has performed or has
always been ready and willing to perform the essential
terms of the contract which are to be performed by him,
other than terms the performance of which has been
prevented or waived by the defendant.
Explanation.--For the purposes of clause (c),--
(i) where a contract involves the payment of money, it is not
essential for the plaintiff to actually tender to the
defendant or to deposit in court any money except when
so directed by the court;
(ii) the plaintiff must aver performance of, or readiness and
willingness to perform, the contract according to its true
construction."
34. As noted above both in the plaint and the letters written, plaintiff has
repeatedly stated that he has been performing his part of the obligation and
was ready, willing to perform the balance obligations and sought permission
for buying the stamp papers and time from the defendants when the sale deed
could be executed. It was in the alternative that the plaintiff sought variance
in case defendants so desire. Thus, the plea taken by defendant No. 5 that
the plaintiff was willfully acting at variance with the terms of the contract or
that he has failed to aver or prove his readiness and willingness to perform
the essential terms of the contract which were to be performed by him
deserves to be rejected.
35. In view of the aforenoted discussion, issue No. 1 read with findings on
contentions (b), (c) and (d) dealt within issue No.2, is decided in favour of
the plaintiff and against the defendants and the suit cannot be dismissed on
the ground that no cause of action is disclosed.
36. Issue No. 2: Whether Agreements to Sell dated 16th September, 2009
do not stand terminated and extinguished? (OPP)
37. As noted above clause 20 of the first Agreement to Sell Ex. PW-1/2
and Clause-17 of the second Agreement to Sell Ex.PW-1/3 provided that if
the agreement was not implemented within 12 calendar months from the date
thereof, the agreement shall stand terminated and extinguished automatically
without any further act of the parties and the vendor shall be at liberty to sell
the property to any other person after refunding the earnest money to the
vendee.
38. In this regard learned counsel for the plaintiff has relied upon the
Constitution Bench decision of the Supreme Court reported as 1993 (1) SCC
519 Chand Rani (Smt.) (dead) by LRs. vs. Kamal Rani (Smt.) (dead) by LRs.
In the said decision the Agreement to Sell contained a stipulation that the
sale deed was to be executed on or before 31 st October, 1971. Dealing with
the issue whether time was the essence of the contract, the Constitution
Bench held:
19. It is a well-accepted principle that in the case of sale of
immovable property, time is never regarded as the essence of
the contract. In fact, there is a presumption against time being
the essence of the contract. This principle is not in any way
different from that obtainable in England. Under the law of
equity which governs the rights of the parties in the case of
specific performance of contract to sell real estate, law looks
not at the letter but at the substance of the agreement. It has to
be ascertained whether under the terms of the contract the
parties named a specific time within which completion was to
take place, really and in substance it was intended that it
should be completed within a reasonable time. An intention to
make time the essence of the contract must be expressed in
unequivocal language.
20. We will now refer to the decisions of this Court.
In Gomathinayagam Pillai case [(1967) 1 SCR 227 : AIR 1967
SC 868] it was held at pages 231 to 233:
"... Section 55 of the Contract Act which deals with
the consequences of failure to perform an executory
contract at or before the stipulated time provides by
the first paragraph:
'When a party to a contract promises to do a
certain thing at or before a specified time, or
certain things at or before specified times, and
fails to do any such thing at or before the
specified time, the contract, or so much of it as
has not been performed, becomes voidable at the
option of the promisee if the intention of the
parties was that time should be of the essence of
the contract.'
It is not merely because of specification of time at or
before which the thing to be done under the contract is
promised to be done and default in compliance therewith, that
the other party may avoid the contract. Such an option arises
only if it is intended by the parties that time is of the essence of
the contract. Intention to make time of the essence, if
expressed in writing, must be in language which is
unmistakable: it may also be inferred from the nature of the
property agreed to be sold, conduct of the parties and the
surrounding circumstances at or before the contract. Specific
performance of a contract will ordinarily be granted,
notwithstanding default in carrying out the contract within the
specified period, if having regard to the express stipulations of
the parties, nature of the property and the surrounding
circumstances, it is not inequitable to grant the relief. If the
contract relates to sale of immovable property, it would
normally be presumed that time was not of the essence of the
contract. Mere incorporation in the written agreement of a
clause imposing penalty in case of default does not by itself
evidence an intention to make time of the essence. In Jamshed
Khodaram Irani v. Burjorji Dhunjibhai [ILR 40 Bom 289] the
Judicial Committee of the Privy Council observed that the
principle underlying Section 55 of the Contract Act did not
differ from those which obtained under the law of England as
regards contracts for sale of land. The Judicial Committee
observed:
'Under that law equity, which governs the rights
of the parties in cases of specific performance of
contracts to sell real estate, looks not at the letter but
at the substance of the agreement in order to ascertain
whether the parties, notwithstanding that they named a
specific time within which completion was to take
place, really and in substance intended more than that
it should take place within a reasonable time .... Their
Lordships are of opinion that this is the doctrine which
the section of Indian Statute adopts and embodies in
reference to sales of land. It may be stated concisely in
the language used by Lord Cairns in Tilley v.
Thomas [(1867) 3 Ch App 61]:
"The construction is, and must be, in
equity the same as in a Court of law. A Court of
equity will indeed relieve against, and enforce,
specific performance, notwithstanding a failure
to keep the dates assigned by the contract, either
for completion, or for the steps towards
completion, if it can do justice between the
parties, and if (as Lord Justice Turner said
in Roberts v. Berry [(1853) 3 De GM &G 284] )
there is nothing in the 'express stipulations
between the parties, the nature of the property,
or the surrounding circumstances' which would
make it inequitable to interfere with and modify
the legal right. This is what is meant, and all
that is meant, when it is said that in equity time
is not of the essence of the contract. Of the three
grounds ... mentioned by Lord Justice Turner
'express stipulations' requires no comment. The
'nature of property' is illustrated by the case of
reversions, mines, or trades. The 'surrounding
circumstances' must depend on the facts of each
particular case."
Their Lordships will add to the statement just quoted
these observations. The special jurisdiction of equity to
disregard the letter of the contract in ascertaining what the
parties to the contract are to be taken as having really and in
substance intended as regards the time of its performance may
be excluded by any plainly expressed stipulation. But to have
this effect the language of the stipulation must show that the
intention was to make the rights of the parties depend on the
observance of the time-limits prescribed in a fashion which is
unmistakable. The language will have this effect if it plainly
excludes the notion that these time-limits were of merely
secondary importance in the bargain, and that to disregard
them would be to disregard nothing that lay as its foundation.
'Prima facie, equity treats the importance of such time-limits
as being subordinate to the main purpose of the parties, and it
will enjoin specific performance notwithstanding that from the
point of view of a court of law the contract has not been
literally performed by the plaintiff as regards the time-limit
specified.' "
21. In Govind Prasad Chaturvedi v. Hari Dutt Shastri
[(1977) 2 SCC 539] following the above ruling it was held at
pages 543-544: (SCC para 5)
"... It is settled law that the fixation of the period
within which the contract has to be performed does not
make the stipulation as to time the essence of the
contract. When a contract relates to sale of immovable
property it will normally be presumed that the time is
not the essence of the contract. [Vide
Gomathinayagam Pillai v.Pallaniswami Nadar [(1967)
1 SCR 227: AIR 1967 SC 868] (at p. 233).] It may also
be mentioned that the language used in the agreement
is not such as to indicate in unmistakable terms that
the time is of the essence of the contract. The intention
to treat time as the essence of the contract may be
evidenced by circumstances which are sufficiently
strong to displace the normal presumption that in a
contract of sale of land stipulation as to time is not the
essence of the contract."
(emphasis supplied)
39. Supreme Court in the decision reported as 2004 (8) SCC 689
Swarnam Ramachandran (Smt.) & Anr. vs. Aravacode Chakungal Jayapalan
laid down the principle that in a contract of immovable property whether the
real intention of the party stating that time is the essence has to be seen by
looking into all the facts and circumstances of the case. It was held that a
vendor has no right to make time the essence of the contract, unless he is
ready and willing to complete the process and secondly, when the vendor
purports to make the time, essence of the contract, the purchaser must be
guilty of such gross default as to entitle the vendor to rescind the contract. It
was held:
"11. According to Pollock & Mulla: Indian Contract &
Specific Relief Acts [(2001), 12th Edn., p. 1086], the intention
can be ascertained from:
"(i) the express words used in the contract;
(ii) the nature of the property which forms the subject-
matter of the contract;
(iii) the nature of the contract itself; and
(iv) the surrounding circumstances."
12. That time is presumed not to be of the essence of the
contract relating to immovable property, but it is of the
essence in contracts of reconveyance or renewal of lease. The
onus to plead and prove that time was the essence of the
contract is on the person alleging it, thus giving an
opportunity to the other side to adduce rebuttal evidence that
time was not of essence. That when the plaintiff pleads that
time was not of essence and the defendant does not deny it by
evidence, the court is bound to accept the plea of the plaintiff.
In cases where notice is given making time of the essence, it is
duty of the court to examine the real intention of the party
giving such notice by looking at the facts and circumstances of
each case. That a vendor has no right to make time of the
essence, unless he is ready and willing to proceed to
completion and secondly, when the vendor purports to make
time of the essence, the purchaser must be guilty of such gross
default as to entitle the vendor to rescind the contract."
40. The defendant No. 5 has relied upon the decision reported as 2013
(15) SCC 27 I.S. Sikandar (Dead) by Lrs. vs. K. Subramani and Ors.
wherein the Supreme Court held that in a case of termination of an
Agreement to Sell the plaintiff must seek a declaratory relief of termination
to be bad in law and that not only as noted in Clause-20 of the first
agreement and Clause-17 of the second agreement, time was the essence of
the contract and the agreements stood automatically terminated. It is further
contended that there is an admission of the plaintiff in the email dated 4th
September, 2009 exhibited as Ex. PW-1/D3-C that time was the essence of
the two agreements.
41. Contention of defendant No.5 ignores the fact that Ex. PW-1/2 and Ex.
PW-1/3 were to run concurrently with each other so as to effect the sale of
the entire plot No. 32, Nizamuddin East, New Delhi as noted in Clause-9 of
the first agreement Ex. PW-1/2 and Clause-6 of second agreement Ex. PW-
1/3. As noted above the defendant Nos. 1, 2 and 4 extended time for
execution of the agreement and in view of three parties to one of the
agreements Ex. PW-1/2 extending the time and the two agreements to run
concurrently, it cannot be held that there was an automatic termination of the
two Agreements to Sell Ex. PW-1/2 and Ex. PW-1/3 in terms of Clauses-20
and 17 respectively of the said two agreements or that the suit was liable to
be dismissed for absence of prayer of declaration seeking automatic
termination of the two agreements as null and void.
42. In I.S. Sikandar (supra) Supreme Court was dealing with a case
wherein the agreement to sell stipulated a period of five months and when
the said period expired the defendant issued a legal notice pointing out to the
plaintiffs his failure to perform his part of the contract in terms of the
agreement of sale by not paying the balance consideration to them and
getting the sale deed executed. In reply whereto the plaintiff admitted his
default in performing his part of the contract and prayed time till 23 rd May,
1985 to get the sale deed executed whereafter the first defendant extended
the time asked stipulating that on failure to pay the sale consideration and
getting the sale deed executed on or before 10th April, 1985 the agreement to
sell dated 25th December, 1983 would terminate and since the plaintiff did
not avail of the extended time also it was held that the agreement to sell
between the parties stood terminated and hence the plaintiff suit for decree of
specific performance for execution of sale deed in respect of suit property
was based on a non-existing agreement to sell and hence unsustainable in
law. It was held:
"34. In the instant case, permission from the above authorities
was not obtained by Defendants 1-4. The period of five months
stipulated under Clause 6 of the agreement of sale for execution
and registration of the sale deed in favour of the plaintiff had
expired. Despite the same, Defendants 1-4 got issued a legal
notice dated 6-3-1985 to the plaintiff pointing out that he has
failed to perform his part of the contract in terms of the
agreement of sale by not paying the balance sale consideration
to them and getting the sale deed executed in his favour and
called upon him to pay the balance sale consideration and get
the sale deed executed on or before 18-3-1985.
35. The plaintiff had issued reply letter dated 16-3-1985 to
the advocates of Defendants 1-4, in which he had admitted his
default in performing his part of contract and prayed time till
23-5-1985 to get the sale deed executed in his favour. Another
legal notice dated 28-3-1985 was sent by the first defendant to
the plaintiff extending time to the plaintiff asking him to pay the
sale consideration amount and get the sale deed executed on or
before 10-4-1985, and on failure to comply with the same, the
agreement of sale dated 25-12-1983 would be terminated since
the plaintiff did not avail of the time extended to him by
Defendants 1-4.
36. Since the plaintiff did not perform his part of contract
within the extended period in the legal notice referred to supra,
the agreement of sale was terminated as per notice dated 28-3-
1985 and thus, there is termination of the agreement of sale
between the plaintiff and Defendants 1-4 w.e.f. 10-4-1985."
43. Undoubtedly there is an express stipulation in the two agreements to
sell that if the agreements are not implemented within 12 calendar months
the same shall stand terminated and extinguished automatically without any
further act of the parties and the parties shall be restored to the same position
as on the date of the agreements and as if the agreements to sell had not been
executed. However, as noted above such a stipulation cannot be used by a
vendor to scuttle the agreements to sell and in a case where there is no
default on the part of the vendee and the delay if any is beyond his control as
in the present case in view of the previous applications filed before the L &
DO accompanied by the Will of late Usha Bhagat causing delay in mutation
and conversion of the property to freehold which fact stands admitted by the
defendants in their memorandum of settlement Ex.PW-1/8 and coupled with
the fact that before the expiry of the date when the two agreements to sell
were to lapse by afflux of time, defendant No.1, 2 and 4 noted the unfairness
on the part of defendant No.3 and 5 and extended further time and the two
agreements were required to run concurrently, it cannot be held that in the
present case the two agreement to sell stood terminated and the present suit
seeking the relief of specific performance of the agreement without seeking a
declaration is not maintainable.
44. It would be relevant to note the contents of the terms of the
memorandum of settlement between the defendants Ex.PW-1/8 wherein the
defendants have virtually admitted the case of the plaintiff and also that due
to the earlier applications filed delay was being caused in the office of L &
DO as under:
"This memorandum recording the family settlement and
agreement pursuant thereto between the parties hereto is made
this the_____ day of June 2010 by and between (1) Mrs. Uma
Lall widow of Col. J.J. Lall and resident of 34 Nizamuddin East,
New Delhi, (2) Mrs Urmilla Kapur wife of J.C. Kapur and
resident of G-22 Maharani Bagh, New Delhi, (3) Mrs. Upma
Khana widow of Major A.C. Khana and resident of C-57
Defence Colony, New Delhi, (4) Kapil Bhagat son of the late
H.G. Bhagat and resident of 45 Friends Colony East, New
Delhi, and (5) Vinoo Bhagat son of the late H.G. Bhagat and
resident of 32 Nizamuddin East, New Delhi.
Whereas:
I. The parties are sisters and brothers being the
children of the late H.G. Bhagat,
II. The parties' eldest sister, Miss Usha Bhagat
was the lessee of plot BP 32 Nizamuddin East, New
Delhi, measuring about 1220 sq. yds. Under a
Government lease dated 28th January, 1957, and a 2½
story residential building consisting of two residential
units and a servants quarters block was constructed on it
(the said land and building are hereinafter referred to as
the said property).
III. Usha Bhagat and party No. 5 entered into an
agreement dated 14th August, 1969 that she would
transfer one-half of the said property to party No. 5 for
the consideration and reasons stated therein. Party No. 5
filed Suit No. 42 of 1983 in the Delhi High Court specific
performance of the aforesaid agreement.
IV. Usha Bhagat made a Will dated 10th April, 2003
bequeathing the said property as belonging solely to her
and demarcated in three different areas to parties Nos. 1,
2 and 5 in different ways, without referring to the
agreement dated 14th August, 1969 between her and party
No. 5 or to his said suit which was then pending for
twenty years.
V. By Judgement dated 19th February, 2005 in
party No. 5's said suit renumbered as Suit No. 706/2002
in the Court of Shri Vinay Singhal, Civil Judge, Delhi, the
Court decreed the suit for specific performance making
him owner of an undivided one-half of the said property,
leaving Usha Bhagat owner of the other one-half thereof.
VI. Usha Bhagat appealed against the said
judgement, but died on 1st March, 2006 (having remained
unmarried) without having altered her will to provide a
bequest for one-half of the said property that remained in
her ownership, and the existing clause could not be
applied to her one-half of the said property. After her
death, parties Nos. 1 - 4 were substituted as her legal
representatives along with party No. 5, and they withdrew
the aforesaid appeal rendering the said decree final.
VII. The Court of Ms. Vandana Jain, Civil Judge,
Delhi, executed a transfer deed dated 11th September,
2008 transferring an undivided one-half share in the said
property to party No. 5.
VIII. Parties 1 and 2 applied for probate of Usha
Bhagat's will modified by them to claim one-half of the
said property as set out in their Probate petition No.
564/2006. The Court of Ms. Bimla Makin, Addl. District
Judge, Delhi, did not grant probate, instead Letters of
administration dated 24th October, 2008 were issued
without the Will annexed confined to a part of Usha
Bhagat's estate and awarding 120 sq. yds of her one-half
share in the said property to party No. 5 confirming that
the said clause in Usha Bhagat's Will was adeemed.
IX. To avoid disputes and to promote family
harmony the parties hereto agreed by way of a family
settlement that the bequest in Usha Bhagat's will relating
to the entire said property was adeemed and rendered
incapable of implementation in respect of her remaining
one-half share in the said property. Accordingly her
undivided one-half share to the said property devolved by
intestate succession under the Hindu Succession Act upon
heirs, namely, the five parties hereto, as Usha Bhagat
was unmarried and her father, who was also the father of
all the parties, had died in 1963.
X. The parties made two applications to the L&DO
for mutation of the said property: one application for an
undivided one-half thereof by party No. 5 and the Second
for the remaining one-half in the joint names of all five
parties on the basis that all five were heirs of Usha
Bhagat on intestate succession.
XI. The parties hereto entered into agreements
th
dated 16 September, 2009 to sell the said property to
Mr. Tarun Sawhney; one agreement was by party No. 5
agreeing to sell his undivided one-half-share in the said
property, and the second by all five parties thereto for
sale of the remaining one-half as heirs of Usha Bhagat in
accordance with the family settlement.
XII. Because of inclusion of Usha Bhagat's will
amongst the papers accompanying the second aforesaid
application, the L&DO raised several unnecessary
objections, where are untenable in law.
XIII. The parties hereto have been advised that the
L&DO would effect mutation in the joint names of parties
Nos. 1 and 2 treating them as executors of Usha Bhagat's
Will. The alternative would be to file a writ petition for a
court direction to the L&DO to carry out the mutation,
but this may take considerable time. As a measure of
expediency and to avoid more delay the parties have
agreed to fill out mutation papers as insisted upon by the
L&DO, but with the alteration described in the
succeeding paragraph.
XIV. Accordingly, the application already made by
all parties for mutation of Usha Bhagat's one-half of the
said property was withdrawn and replaced by a fresh
application for mutation in the names of parties Nos. 1
and 2. In accordance with the family settlement that Usha
Bhagat's one-half devolved on all five parties hereto as
her heirs, the affidavits by all the parties in support of the
second application stated, amongst other things, that the
clause in Usha Bhagat's will relating to the said property
was adeemed, making clear that her will does not govern
succession to her one-half of the said property.
XV. The parties agree that mutation and conversion
to freehold of Usha Bhagat's aforesaid one-half of the
said property if and when made in the names of parties
Nos. 1 and 2 will be on behalf of all five parties hereto
and only as an expedient (mutation will not affect title).
XVI. The parties also agree that if it becomes
necessary for Parties Nos. 1 and 2 to execute a fresh
agreement to sell Usha Bhagat's one-half of the said
property with the aforesaid Mr. Tarun Sawhney, they will
enter into such agreement as representatives and on
behalf of all five parties hereto and the agreement will be
framed in such a way that the buyer is required to pay the
price payable for Usha Bhagat's one-half of the said
property separately in equal shares directly to all five of
the parties as owners of one-fifth share therein at the time
of execution of the sale deed as already agreed upon in
the agreement to sell dated 16th September, 2009.
XI) Now this deed witnesses and records that the parties had
agreed amongst themselves by way of family settlement that:
1. The clause relating to the said property in Usha
Bhagat's Will dated 10th April, 2003 bequeathing the said
property in its entirety as belonging solely to her and in
the manner therein set out was adeemed by the judgement
making party No. 5 owner of one-half of the said property
and/or the subsequent legal proceedings narrated above.
The undivided one-half thereof that remained in Usha
Bhagat's ownership devolved by intestate succession
under the Hindu Succession Act on her heirs, namely, the
five parties hereto in equal shares.
2. The Agreement to Sell Usha Bhagat's one-half of
the said property dated 16th September, 2009 entered into
with Mr. Tarun Sawhney correctly reflects the aforesaid
family settlement.
3. The parties hereby agree that if the L&DO
mutates and converts to freehold Usha Bhagat's
undivided one-half of the said property in the names of
parties Nos. 1 and 2 then that will only be as an expedient
for quick mutation and conversion. It will not affect
succession to Usha Bhagat's one-half of the said property
(mutation will not affect title), or the family settlement
recorded herein and expressed in the agreement to sell
dated 16th September, 2009 between all five parties
hereto and Mr. Tarun Sawhney. All the parties hereto will
continue to have legal title to one-fifth share each in
Usha Bhagat's undivided one-half share of the said
property by succession under the Hindu Succession Act
even if the L&DO mutates and converts to freehold the
said one-half in the names of parties Nos. 1 and 2 only.
Misuse charges, if levied by the L&DO or MCD after
Usha Bhagat's re-construction of par tof the building will
be deducted from the sale price for her one-half share.
4. The parties further agree that if
mutation/substitution is done in the names of parties Nos.
1 and 2 only and it becomes necessary or advisable to
enter into a fresh agreement to sell Usha Bhagat's
undivided one-half share in the said property then the
fresh agreement to sell shall reflect the provisions of the
family settlement recorded herein and abide by them:
specifically, the fresh agreement to sell shall stipulate
that the all five parties are owners in equal shares of
Usha Bhagat's one-half and the price therefore shall be
paid separately and directly to each of them at the time of
execution of the sale deed.
5. All acts, documents and things done for obtaining
mutation, converting the said property into freehold and
for selling it shall mutatis mutandis be done in a manner
so as to be in accord with the family settlement and this
agreement.
In witness whereof the parties hereto have signed this
Deed recording the Family Settlement and the Agreement
pursuant thereto the day and year first above written."
45. Defendant No.5 has heavily relied on the contents of email dated 4th
September, 2009 Ex. PW-1/D3-C wherein the plaintiff stated as under:
"Dear Mr. Bhagat,
I have enclosed a draft agreement to sell for the remaining
50% share of the property for your perusal. I would be happy
to meet you once you have had the opportunity to review this
document. I also had some minor changes in the document
you had mailed me which I Hope to discuss when we meet.
The only clause I have left out, and I would be happy to draft it
to your comfort, is the clause regarding the bank guarantee.
In addition to the time, the administrative challenge of my
collecting individual charges due to the L & DO from 5 parties
will be most difficult. Since time is of the essence I would like
to retain this clause in the agreement.
I would be very happy to meet you tomorrow either at 11.45
AM or 7.00 pm, if either time is convenient for you?
Alternatively, I will be free to meet on Sunday till 4.00 pm.
Best regards,
Tarun Sawhney"
46. From the email dated 4th September, 2009, defendant No.5 claims that
even the plaintiff admits that time was essence of the agreement. Plaintiff's
endeavour to conclude the performance of the agreements within the time
period specified would not lead to a conclusion that time was the essence of
the contract. As noted by the Constitution Bench of the Supreme Court and
the decision in Swarnam Ramachandran (supra) the Courts have to look into
the intention of the parties as to whether time was essence of the contract.
Further the email dated 4th September, 2009 was an email before the parties
entered into the two agreements to sell dated 16 th September, 2009 and were
negotiating the various terms.
47. Defendant No.5 has also addressed that since the plaintiff deliberately
suppressed the contents of the email Ex. PW-1/D3-C the suit is liable to be
dismissed for suppression of his admission in respect of time being the
essence of the agreements. As noted above the email dated 4th September,
2009 is prior to entering into the two agreements and an endeavour that the
agreements be performed within time and not that in no eventuality can the
time for performance of the agreements be extended. In this relation it
would be relevant to note the conduct of the parties and the hindrances
caused specifically by defendant No. 5 in performance of the agreements at
different stages. The two mutation applications (which documents have been
exhibited as Ex. PW-1/13 (Colly) had been filed prior to entering into the
two Agreements to Sell wherein a copy of the Will was annexed resulting in
taking of additional time in the proceedings before the L& DO.
48. The only claim of defendant No. 5 for the laxity on behalf of the
plaintiff in pursuing the matter is the admission of the plaintiff that he never
went to the office of L & DO himself. However, a perusal of emails
exchanged between the parties would reveal that from time to time plaintiff
was informing the defendants about the progress at the L & DO. Obviously
all actions before the L & DO were beyond the control of plaintiff. When
the proceedings before the L & DO were delayed the plaintiff had asked the
defendants to give some documents which they gave him belatedly and now
the defendants particularly defendant Nos. 3 and 5 cannot claim that plaintiff
showed laxity in performing his obligations.
49. To substantiate the findings as noted in the para above it would be
relevant to reproduce few communications between the parties exhibited as
Ex. PW-1/20 (Colly) in respect of various requirements as under:
i. Email from Vinoo Bhagat to Tarun Sawhney dated 17th March, 2010.
Dear Mr. Sawhney,
Lalit sachdeva and Surbhi Kapur met me last evening.
As I understood Mr. Sachdeva,
The L&DO will mutate one-half- the rear portion one-
half-in my name on the basis of the court's transfer deed.
When I pointed out that the transfer was of an undivided one-
half, and not of front or rear, and also that it is a single
undivided plot, he agreed it would be of an undivided one-half.
I don't quite understand the first reference to the rear one-
half.
The L&DO would treat the second application by five
successors as an application by only two sisters under the will.
This means,
a) The second agreement to sell with five successors-owners
is invalid:
b) The court order granting letters of administration
awarding me and 120 sq. yds ( i.e. one-fifth of the
remaining one-half) stands demolished.
It seems we have been running backwards these past six
months. A writ petition might have been a better choice.
As already explained, the bequest of the house in the will
stood 'adeemed' under S. 152 * of the Indian Succession Act,
1925, in its entirety after the court judgement made me owner
of one-half of the property. That bequest did not survive and
cannot be implemented in part or at all.
The will was also abandoned in the probate petition
which conceded that I own one half- in contradiction of the
will. It also stood abandoned by the order granting letters of
administration.
I am not prepared to accept any solution based on the
assumption that the will is operating in respect of any part of
this property. I doubt that it would suit you either.
Surbhi kapur telephoned this morning suggesting
mutation in two sisters' names, new agreement to sell with
them, family settlement, etc. This is harebrained, based on
illegal premises and likely to lead to more confusion and
conflicts. What has been done in the two agreements to sell is
correct and should not be altered.
Regards,
Vinoo Bhagat
* "152- If anything which has been specifically bequeathed
does not belong to the testator at the time of his death, or has
been converted into property of a different kind, the legacy is
adeemed: that is, it cannot take effect, by reason of the subject-
matter having been withdrawn from the operation of the will."
ii. Email from Tarun Sawhney to Vinoo Bhagat dated 20th March, 2010.
Dear Mr. Bhagat,
I have been looking to find a workable solution, that will cover
your reservations and those of the other owners, over the past
few days. Would it be possible for me to come and meet you
this coming Monday(22nd March) in the evening at 7pm, or at
a time that is convenient for you?
Best wishes,
Tarun Sawhney"
iii. Email from Vinoo Bhagat to Tarun Sawhney dated 23rd March, 2010.
Dear Mr. Sawhney,
This is a hurried mail.
On seeing the papers you left last evening, I find that the
application is for "Substitution of Title" in favour of the two
sisters. While the earlier applications were for "Mutation".
I cannot agree to an application for "Substitution of
title" in the names of two sisters based on the will. This is an
appalling situation.
If I had read and understood the papers before our
meeting yesterday I would have informed you accordingly. I
don't think anyone should ever contemplate such a blatantly
illegal and dishonest application, which is contrary to all the
real facts and court and orders.
Before I read the papers, I spoke to the senior colleague I
had mentioned on telephone to fix an appointment. He quizzed
me about the entire matter and on being told about it he was
emphatic that I must not do anything that is even slightly
wrong; no one can predict what may happen later on.
He suggested that we execute the sale deeds as agreed
upon and then give you a power of attorney ( Which can be
incorporated in the sale deed also) empowering you to take all
steps for mutation and conversion that may be required. The
legality or otherwise of what an attorney does will not reflect
as much on us after the sale.
My senior colleague asked me to telephone him
tomorrow morning for a time to meet, but had I read the new
papers first I wouldn't have called him in the first place.
Please consider if you find his proposal of sale as agreed
upon and your getting mutation done subsequently as
attorney( or otherwise) worth exploring. If not, what else can
be considered.
Regards,
Vinoo Bhagat"
iv. Email from Vinoo Bhagat to Tarun Sawhney dated 29th March, 2010.
Dear Mr. Sawhney,
I have considered the mutation application and also
consulted another colleague. There are two options.
Option I
The existing application and affidavits are modified to
say only that Usha Bhagat made a will and that the two sisters
were named its executors and the other heirs have no
objection if an undivided one-half of the property is mutated in
their names as executors.
But all statements in the existing papers such as the will
is valid, the property front/rear portion was bequeathed to
them etc. will be deleted (some of these existing statements
amount to perjury). The wording will reflect only the
preceding paragraph.
This option will provide the peg to hang the mutation on
and should suffice, especially since the mutation letter will not
mention the shares of ownership of persons named in it.
Option 2
All five of us apply to the district court that granted
letters of administration and have the letters of administration
revoked, with a finding that the clause in the will relating to 32
Niz. E did not survive and the eldest sister's one-half of this
property will devolve on all five siblings by intestate
succession.
I was told that the order on an application made jointly
by all of us could be obtained within a month.
I look forward to hearing from you.
Regards,
Vinoo Bhagat"
v. Email from Vinoo Bhagat to Tarun Sawhney dated 30th March, 2010.
Dear Mr. Sawhney,
Please have a look at the attached pages and give me your
feedback later this evening. Only paragraph 6 of the Affidavits
is being changed.
Regards,
Vinoo Bhagat"
vi. Email from Vinoo Bhagat to Tarun Sawhney dated 30th March, 2010.
There is one change on page 2 of the application. Probate
was not granted (Letters of Administration without the will
annexed do not constitute probate). This is important.
V.B.
vii. Email from Vinoo Bhagat to Tarun Sawhney dated 31st March, 2010.
Dear Mr. Sawhney,
The revised second page of the Indemnity Bond is
attached. Changes made in it appear in italics at the end of
the third recital.
Regards,
Vinoo Bhagat
viii. Email from Vinoo Bhagat to Tarun Sawhney dated 3rd April, 2010.
Dear Mr. Sawhney,
The change is only in the last paragraph of the Affidavits
of all five of us. I do not have the latest version of the Affidavit
but only know what Mrs. Khanna read out to me. I have
retained the part where it says that the will is genuine
(because that sister did make it). However, to protect everyone
legally for times, I have added that the clause relating to the
property was adeemed. Please try and persuade the L&DO to
accept it.
Regards,
Vinoo Bhagat
ix. Email from Vinoo Bhagat to Tarun Sawhney dated 10th April, 2010.
Dear Mr. Sawhney,
I've come down with a food poisoning like problem,
delaying the draft family settlement. Will let you know when it
is ready.
Regards,
Vinoo Bhagat"
50. Email dated 10th April, 2010 would show that time was even taken in
drafting the family settlement and new draft Agreements to Sell were also
prepared. Email dated 27th April, 2010 from Vinoo Bhagat to Tarun
Sawhney is reproduced as under:
"Dear Mr. Sawhney,
I've just had a quick look at the new draft agreement to sell.
1. Paragraph C) says "AND WHEREAS the Vendors above
named are the sisters and Executors of her will dated
10.4.2003;"
and paragraph D provides "AND WHEREAS the Vendors
above-named are accordingly owners of the remaining one-
half of the leasehold plot BP No. 32 Nizamuddin East, New
Delhi ( hereafter referred to as the said property), each having
one half share therein."
This is incorrect and not acceptable. Being an executor and
sister does not result in once becoming owner of property.
2. The affidavits of all five of us filed with the mutation
application state that the clause in Usha Bhagat's will relating
to the property was adeemed. Therefore, the question of the
two sisters (or anyone for that matter) becoming owners under
the will does not arise. Upon ademption, the property
devolves by intestate succession. And as already agreed upon,
mutation does not confer title.
3. Please have paragraph D (and any other similar
statement in the agreement) re-worded. It would help if the
agreement is in accord with the family settlement, which is
similar to the existing agreement to sell, and makes clear that
mutation in the names of the two sisters is only an expedient to
avoid more delay and does not affect legal title that vests in all
five of us, whichever way mutation occurs.
A suitable modification will also avoid possible problems with
payment of the price to all five of us.
4. Lastly, is an agreement with the two sisters not
premature at the moment? No one knows how the L&DO will
do the mutation. Would it not be better to wait until mutation
is done and then frame the second agreement accordingly?
Regards,
Vinoo Bhagat
At 06:44 23-04-10, you wrote:
Dear Mr. Bhagat, I have enclosed a draft of the new
agreement to sell. I have not had an opportunity to fully
comment on this and will endeavour to do so over this
weekend. Nevertheless, I thought I should send this to you in
its current form as soon as possible. Can we aim to have this
signed by the end of next week? I am also sending you a copy
of the mutation documents today. My driver will drop them by
7.30pm today.
Apologies for delay. Regards, Tarun Sawhney"
51. The family settlement was finally prepared two days prior to 2 nd June,
2010 as is evident from the mail dated 2nd June, 2010. Thus in view of the
Supreme Court decision where a vendor is a party to the delay, he cannot
claim that by afflux of time the agreement stands terminated.
52. For the discussion aforesaid Issue No. 2 read with sub-issue (b), (c)
and (d) of Issue No.1 are decided in favour of the plaintiff and against the
defendant.
53. Issue No. 3: Whether the plaintiff had always been ready and willing
to perform his part of Agreement to Sell dated 16th September, 2009? (OPP)
54. To contend that the plaintiff was not ready and willing to perform his
part of Agreements to Sell dated 16th September, 2009 learned counsel for
defendant Nos. 1, 2 and 4 states that the plaintiff was negligent in his
obligation for the reason the two Agreements to Sell provided that it was the
duty of the vendee and not the vendor to carry out the mutation etc. Plaintiff
in his cross-examination admitted that he never went to the office of L &
DO, thus he did not do anything for six months. Having wasted six months
period out of the twelve months period of contract, the plaintiff by sending
various mails and letters, when the agreement was about to lapse, cannot
claim that he was always ready and willing to perform his part of the
agreement.
55. Defendant Nos. 3 and 5 challenge the readiness and willingness of the
plaintiff to perform his part of the agreements to sell dated 16th September,
2009 on the following counts:
"(a) Plaintiff could not deposit the sale price in court as
directed by the order dated 4.2.2011. By appealing for
exemption, plaintiff proved that he did not have funds to
pay the sale price. The suit would not have proceeded if
exemption (in conflict with 2010 (169) DLT 487 Mohan
Overseas (P) Ltd.) had not been granted by order dated
3.5.2011 in FAO (OS) No. 104 of 2011.
(b) Plaintiff did not give the statutorily required notice to the
defendants to execute the sale deeds-proving that he was
not ready and willing.
(c) Plaintiff did not give notice under clauses 18 and 15 of
the Agreements to Sell, Ex.PW1/2 and PW1/3
respectively, that the sale deeds were ready for execution.
Non-compliance with contractual provisions also
disentitles the plaintiff to specific performance under s.
16(b) Specific Relief Act.
(d) The plaintiff asked for a new agreement to sell in place of
Ex. PW1/2 which would have only defendants 1 and 2 as
owners-sellers-Ex.D2 at pages 49-50 (also exhibited as
Ex.PW1/D3E). The defendants rejected the request in
Ex.D-2 at page 80, email dated 13.7.2010. By asking for
a new and different agreement to sell plaintiff proved that
he was not ready and willing to perform Ex.PW1/2.
(e) Ex.PW1/14 proves that the plaintiff was not ready and
willing to perform the agreements to sell according to
their true construction."
56. From the evidence on record it is evident that Applications for
mutations having already been filed before the Agreements to Sell dated 16th
September, 2009 were executed, all that the plaintiff could do was to pursue
the matter before the L & DO for which his personal visits were not required
and the same could also be done through the authorized person on behalf of
the plaintiff. The fact that the plaintiff had been pursuing the matter before
the L & DO is evident from the various letters and emails sent by the
plaintiff to the defendants repeatedly asking them to perform the various
formalities sought by the L & DO, hence merely for an admission that the
plaintiff never went to the office of L & DO no inference can be arrived at
that the plaintiff was negligent in his duty and did not fulfill part of his
obligation.
57. Before further proceeding to deal with the issue it would be
appropriate to note Clause 12 of Ex. PW-1/2 which corresponds to Clause 10
of Ex. PW-1/3 as under:
"12. The Vendors shall do all acts and execute all documents
including applications, affidavits, power of attorney and
others as may be requisite in the circumstances to enable the
Vendee to get mutation and conversion to freehold of the said
property effected; the documents will be furnished to the
Vendee within 7 working days of request thereof; copies of the
Vendors' application for mutation and all correspondence
with the L&DO on the subject so far are annexed hereto as
Annex 2. The Vendors shall carry out further correspondence,
if any, with the L&DO with the Vendee's concurrence."
58. When the two Agreements to Sell were entered into between the
parties two mutation applications had already been filed before the L & DO.
Though there was no dispute in respect of the application of mutation qua
half undivided share in the property which was in the name of defendant No.
5, however, in respect of the remaining half portion of the property which
was bequeathed on the five legal heirs of late Ms. Usha Bhagat, along with
the mutation application, attested copies of the registered Conveyance Deed,
death certificate of the lessee, copy of the Will, affidavit of the legal heirs
etc. were filed. The confusion to the L & D officer arose due to the filing of
the Will which was not acted upon as the Will dated 10 th April, 2003 of Ms.
Usha Bhagat named defendant Nos. 1 and 2 as the executors of the Will. On
a probate petition filed being Probate Petition No. 564/2006, learned
Additional District Judge vide order dated 25 th April, 2008 granted Letters of
Administration in respect of Will however, thereafter the five legal heirs of
Ms. Usha Bhagat decided to resolve the family matter and it was agreed that
all the legal heirs, that is, defendant Nos. 1 to 5 would equally share one half
undivided share in the property while other one half undivided share of the
suit property came to the exclusive ownership of defendant No. 5 in terms of
the decree passed in Civil Suit No. 706/2002.
59. In view of the impediment in grant of mutation, the joint mutation
application dated 27th March, 2009 was withdrawn by filing an application
on 7th April, 2010 on behalf of defendants before the L & DO and a fresh
application was filed on 19th April, 2010 for mutation of the half undivided
share in the suit property based on the Will of deceased Ms. Usha Bhagat
claimed to be signed by defendant Nos. 1 and 2. Though defendant No. 5
has challenged signatures of defendant No. 1 on the said application however
there is no challenge by defendant No.1 to the said signatures. It is thus
apparent that the time period spent on the mutation application dated 27 th
March, 2009 till 7th April, 2010 cannot be attributed to the plaintiff. Further
it was the plaintiff alone who was pursuing the matter of mutation before the
L & DO though not by personally visiting. It would be relevant to note an
email from defendant No. 5 to plaintiff dated 17th March, 2010 exhibited as
Ex. PW-1/20 wherein defendant No. 5 admits that the informations to the
defendants about the outcome of the mutation applications are from the
plaintiff. Email dated 17th March, 2010 reads as under:
"From: Vinoo Bhagat [[email protected]]
Sent: 17th March, 2010 12:33
To: Tarun Sawhney
Subject: Mutation
Dear Mr. Sawhney,
Lalit Sachdeva and Surbhi Kapur met me last evening.
As I understood Mr. Sachdeva,
The L&DO will mutate one-half- the rear portion one-
half- in my name on the basis of the court's transfer deed.
When I pointed out that the transfer was of an undivided one-
half, and not of front or rear, and also that it is a single
undivided plot, he agreed it would be of an undivided one-half.
I don't quite understand the first reference to the rear one-
half.
The L&DO would treat the second application by five
successors as an application by only two sisters under the
Will. This means,
a) The second agreement to sell with five successors-
owners is invalid; and
b) The court order granting letters of administration
awarding me 120 sq. yds (i.e. one-fifth of the
remaining one-half) stands demolished.
It seems we have been running backwards these past six
months. A writ petition might have been a better choice.
As already explained, the bequest of the house in the
Will stood 'adeemed' under S. 152 * of the Indian Succession
Act, 1925, in its entirety after the court judgement made me
owner of one-half of the property. That bequest did not survive
and cannot be implemented in part or at all.
The Will was also abandoned in the probate petition
which conceded that I own one half - in contradiction of the
Will. It also stood abandoned by the order granting letters of
administration.
I am not prepared to accept any solution based on the
assumption that the Will is operating in respect of any part of
this property. I doubt that it would suit you either.
Surbhi Kapur telephoned this morning suggesting
mutation in tow sisters' names, new agreement to sell with
them, family settlement, etc. This is harebrained, based on
illegal premises and likely to lead to more confusion and
conflicts. What has been done in the two agreements to sell is
correct and should not be altered.
Regards,
Vinoo Bhagat
"152 - If anything which has been specifically bequeathed
does not belong to the testator at the tie of his death, or has
been converted into property of a different kind, the legacy is
adeemed; that is, it cannot take effect, by reason of the subject-
matter having been withdrawn from the operation of the Will."
60. It would also be appropriate to note further emails between the parties
which would show that the plaintiff was in constant touch with defendant
No.5 who was raising various objections resulting in further delays.
i. Email from Vinoo Bhagat to Tarun Sawhney dated 15th April, 2010.
"Dear Mr. Sawhney,
I have finally finished the first draft of the family
settlement. The two pages containing its operative part are
attached. I will reflect on the draft, but in the meantime if
there are any observations you may wish to make then please
let me know. The final version can then be sent for approval
of the two sisters.
Regards,
Vinoo Bhagat"
ii. Email from Vinoo Bhagat to Tarun Sawhney dated 19th April, 2010.
"Dear Mr. Sawhney,
1. I am proceeding with the family settlement.
2. Please have a copy of the second mutation application as
filed dropped off at my place today.
3. Please keep me informed of any other developments there
may be.
Regards,
Vinoo Bhagat"
iii. Email from Tarun Sawhney to Mr. Kapur and Mrs. Lall dated 26th
April, 2010.
"Dear Mrs.Kapur and Mrs. Lall,
I am enclosing the latest draft of the agreement for your
perusal. I am also awaiting the comments of Mr. Vinoo Bhagat
regarding the above agreement. Please note that there are no
significant changes between this agreement and the previous
one. The specific changes are twofold - 1) the names of the
parties selling the property and the division of the funds, and
2) the mention of the family settlement.
I will revert to you once I have received any comments from
Mr. Vinoo Bhagat.
The mutation application is moving smoothly and I hope to
have some good new shortly.
Regards,
Tarun Sawhney"
iv. Email from Vinoo Bhagat to Tarun Sawhney dated 28th April, 2010.
Dear Mr. Sawhney,
It later occurred to me that once the freehold conversion
is done then this property will be out of the clutches of the
L&DO. Therefore the actual sale deed can be executed by all
five of us. A new agreement to sell is not very essential. Even
if the property is shown in the names of my two sisters and me
after conversion there can be no bar to all five of us joining in
the sale deed as sellers with an appropriate tracing of title.
All this needs to be thought out.
Regards,
Vinoo Bhagat"
v. Email from Vinoo Bhagat to Tarun Sawhney dated 10th May, 2010.
"Dear Mr. Sawhney,
It has been my understanding all along that the new
agreement to sell with the two sisters - in whose names
mutation is expected to be done of Usha Bhagat's one-half-
was only a formality needed for your bank and that the sale
deed would be executed according to the earlier Agreement to
sell, which would continue to operate subject to the names of
the Vendors being changed only in the new Agreement to Sell.
I have prepared the draft accordingly.
Your draft states that the Agreement to sell dated
16.9.2009 is being superseded altogether by the new
Agreement to sell. This is not correct.
The attached draft is a hurriedly prepared one. I have
not had time to look into it properly.
Regards,
Vinoo Bhagat"
vi. Email from Vinoo Bhagat to Tarun Sawhney dated 11th May, 2010.
"Dear Mr. Sawhney,
The family settlement is attached. A few minor
alterations have been made, but I am not satisfied yet. I will
review it once more after a day or two before engrossing it on
stamp paper.
Regards,
Vinoo Bhagat"
vii. Email from Vinoo Bhagat to Tarun Sawhney dated 2nd June, 2010.
"Dear Mr. Sawhney,
The family settlement document was prepared, signed by
me and sent to Mrs Lall two days ago. I have had no response
from her so far. I am leaving for my trip tonight.
Regards,
Vinoo Bhagat
At 11:39 PM 01-06-10, you wrote:
Dear Mr. Bhagat, thank you for your mail. As I had
mentioned to you I am currently in the US until next weekend.
I will incorporate your points in the document and perhaps
you can be the last person to sign it on your return. Could you
pl confirm whether your family agreement has been executed?
I would be grateful if you could have this signed prior to your
upcoming trip. In addition, I believe your brother will be in
India only until the 15th of this month. Thank you and I hope
have a please vacation. Regards, Tarun Sawhney
Sent from Blackberry on airtel
From: Vinoo Bhagat[ [email protected]]
date: Mon, 31 May 2010 17:47:09 +0530
To: Tarun
Sawhney[[email protected]]
Subject: 32 Niz E. New Agreement to Sell
Dear Mr. Sawhney,
I have two comments about the new agreement to sell
with the two sisters.
1. Paragraph 3 on page 4 should read-
"The vendors on the basis of their family settlement, a copy
whereof is annexed, have requested the Vendee to pay the
sale consideration in equal shares to the Vendors and their
sister and two brothers (i.e. five persons in all) as set out in
the earlier Agreement to Sell dated 16.9.2009 in the
following manner-"
2. Paragraph 17 on page 8 reads,
"...stands superseded with [by?] the present agreement
executed by the Vendors and signed by the other heirs i.e.
brothers and sister of Ms. Usha Bhagat as a consenting
party..."
Apart from the grammatical error 'a consenting party'
instead of 'consenting parties', these other heirs are
described as witnesses at the end of the agreement. Which
of the two are they - witnesses or consenting parties?
The rest of the agreement appears to be alright, but it is for
the two Vendors to decide.
I leave on 3 June early morning and expect to return by 22
or 23 June
Regards,
Vinoo Bhagat
viii. Email from Vinoo Bhagat to Tarun Sawhney dated 26th June, 2010.
"Dear Mr. Sawhney,
I found this notice from the L&DO on my return day
before yesterday. It is dated 16th June and must have arrived a
few days ago. The pages in the attachment are not in serial
order, P.2 comes first, followed by P.1 and then P.3.
The plastic sheets over my car constitute "construction"?
I can't understand the other 'breaches'. The notice wants the
breaches removed. Please consult and advise.
My sister Mrs. Khanna told me that you lawyer tried to
make her sign a legal document during my absence. This is
unnerving. I hope the sale will be dealt with in a
straightforward and above board manner. If there are any
surprises in store then it would be appropriate to disclose
them now.
I left after signing the family settlement, which is to be
attached to the new agreement to sell, and don't know who has
the original.
Regards,
Vinoo Bhagat"
ix. Letter from L & DO to Vinoo Bhagat dated 16th June, 2010.
"Dear Sir/Madam,
On inspection of the above premises on 17-05-2010 the
following breaches were noticed at site by the Inspection
officer:-
a) Misuse on leased land
S. type Floor Breach Location/ length breath area
No. use details
b)Unauthorised Construction on Leased Land
S. Type floor Breach Location/details length Breath area
use
no.
1 Completely Barsati residential /u/a pucca 0/0 0.0000/0.0000 318.7500qfeet/3
done construction of 18.7500/o
store near stair
case m/a
21ft3inx15ft
2 Completely ground residential /u/a plastic sheet 0/0 0.0000/0.0000 126.5600sq
done shed has been Feet/126.5600/
6ft9inx18ft9in
3 Completely Ground residential /u/a plastic sheet 0/0 0.0000/0.0000 184.3800sq
done shed has been Feet/184.3800/
14ft9inx12ft6in
4 Completely ground residential /u/a pucca 0/0 0.0000/0.0000 13.4700sq
done construction on Feet/13.4700/0
the right side m/a
5ft6inx3ft1.5in/2 x
3ft1.5in
C) Encroachment on Government Land
S. type Floor Breach Location/ length breath area
No. use details
D) Merger of properties on Leased Land
S. type Floor Breach Location/ length breath area
No. use details
E) Sub-division of properties on Leased Land
S. type Floor Breach Location/ length breath area
No. use details
2. These breaches are in contravention of clause/clauses
1(iv) (v) (vii) of the Lease Deed/Agreement for letter/Terms of
allotment
3. You are, therefore, hereby required to remedy the
breaches within 30 days from the date of receipt of this notice
failing which action to re-enter the premises under clause of
the lease deed will be taken against you without any further
notice in the matter."
4) You are also liable to pay the damage/misuse charges
(which will be intimated to you in due course) for having
committed the breaches of the terms of the lease deed shown in
Para-1 above for the period of their existence.
5) In case you have any point to clarify in connection with
the above notice, you may kindly see the undersigned by the
prior appointment on Telephone 23061296 between 2 PM to 4
PM. In the afternoon within a week of the date of receipt of
this notice. It may, however, be clearly understood that your
inability to avail of this opportunity of personal
hearing/discussion will not be accepted as a ground for not
taking further action in the matter under the terms of the lease
deed.
Yours faithfully,
(G H RATRA)
DEPUTY L&DO IV
For and on behalf of President of India
Copy to;-
Accounts Section
( G H RATRA)
DEPUTY L&DO IV
x. Email from Vinoo Bhagat to Tarun Sawhney dated 3rd July, 2010.
"Dear Mr. Sawhney,
The need for the disclaimer below has surfaced after
almost a year.
The document ends with the words ".... as I have already
surrendered my rights in their favour."
a) Mrs Khanna has neither surrendered nor will she
surrender any rights in the property. Why on earth should she
do so? Let the mutation be done in three names, if it comes to
it.
c) There is no statement that the clause in Usha Bhagat's
will relating to the property was adeemed. On the contrary,
the clause in the will is twisted in an attempt to apply it in a
twisted manner. The clause in the will having been adeemed,
nothing that suggests it exists and operates (in any form) is
acceptable.
b) Legal rights of persons in properties are outside the area
of mutation. The L&DO does not have any power, or function,
of adjudicating anyone's rights in property being mutated.
This kind of document is not acceptable. It can lead to endless
legal complications for succeeding generations in our families
if disputes break out amongst us.
If a writ petition had been filed last August or September, the
mutation would have been done months ago - at no cost at all.
There is no guarantee that more such perverse requirements
will not be trotted out by the L&DO. I am not prepared to
bend correctness for the L&DO's sake.
Regards,
Vinoo Bhagat
At 03:42 PM 03-07-10, you wrote:
Dear Mr. Bhagat,
I have received this draft disclaimer deed from the L&DO
after much discussion. When can I call you to discuss this
document, which is attached below? I would like to get this
registered on Monday if it meets with your approval. If there
are any changes it will require another round of discussion
with the Authorities.
Kind regards,
Tarun Sawhney
xi. Email from Vinoo Bhagat to Tarun Sawhney dated 6th July, 2010.
"Dear Mr. Sawhney,
1. Mutation: I saw a mutation done by the L&DO in the
early 1960s. It was simply a fresh lease deed issued in the
names of the two sons and one daughter of the deceased. If
mutation is similarly done in our case - without any reference
to any will - then it will be acceptable. If, however, the
mutation refers to rights under a will then it will not be
acceptable. I will have no option but to move the High Court.
2. New Agreement to Sell: If there is to be a new agreement
to sell then I must be one of the parties because I own 120 Sq.
yds. under the Letters of Administration. And the ownership
rights of the remaining two siblings must be specifically set out
- which will take us back to the existing Agreement to sell.
3. The sellers' property rights cannot be subservient to the
buyer's financial arrangements. I am not willing to agree to
any new agreement that purports to transfer my property
rights or those of the other two siblings as belonging to the
two sisters. Nor am I Prepared to play around with words in
this behalf. An agreement to sell by only my two sisters should
not even be suggested.
4. I would prefer to stay with the existing Agreements to
sell. The first time you met me you had said you could write
out a cheque for the full price. Please do some financial
jugglery at your end or try the HDFC for a home loan.
Regards,
Vinoo Bhagat"
61. The emails thus clearly reflect that it was the plaintiff who was
pursuing with the L & DO and he brought to the notice of the defendants the
problems arising in the mutation applications pursuant whereof a fresh
application was filed on 19th April, 2010 and a family settlement Ex. PW-1/8
was also arrived at between the defendants which took substantial time.
62. Learned counsel for the plaintiff from the exhibits as noted above
seeks to demonstrate that substantial time was spent by defendant No. 5 in
supplying relevant documents. Be that as it may even after filing the fresh
application another letter dated 27th July, 2010 Ex. PW-1/11 was received
from L & DO which sought further documents.
"GOVERNMENT OF INDIA
MINISTRY OF URBAN DEVELOPMENT
LAND & DEVELOPMENT OFFICE
NIRMAN BHAWAN, NEW DELHI
No. L&DO/PS-I/510 Dated 27.7.10
To,
Shri Vinoo Bhagar, Smt. Uma Lall,
32, Nizamuddin East, 34, Nizamuddin East
New Delhi. New Delhi.
Smt. Urmila Kapor,
G-22, Maharani Bagh,
New Delhi.
Subject:- Mutation-cum-Substitution in respect of property
No. BP-32, Nizamuddin East, New Delhi.
MEMORANDUM
With reference to your application dated 3.02.2009 and
4.05.2010 on the above cited subject Sh. Vinoo Bhagat is
hereby informed that in accordance with the Court Order in
Suit No.706/02 dated 19.2.2005 and transfer deed
dated11.9.2008 duly registered with Sub-Registrar vide
Registration No.14367 in addl. Book No.I Vol. No. 8816 on
page 29 to 35 dated 17.9.2008, the lease hold rights in respect
of undivided rear portion of property No. BP-32, Nizamuddin
East, New Delhi as laid down in the Lease Deed executed on
28.1.1957 has been mutated in the name of Sh. Vinoo Bhagat,
and further S/Smt. Uma Lall & Urmilla Kapoor are hereby
informed that consequent upon the death of Ms. Usha Bhagat
daughter of Sh. H.G. Bhagat on the basis of the Will dated
10.4.2003 left behind by the deceased lessee in favour of
S/Smt. Uma Lall & Urmila Kapoor sisters of Ms. Usha Bhagat
and further a disclaimer deed executed by Smt. Upma Khanna
sister of Ms. Usha Bhagat executed on 12.7.2010 duly
registered with the Sub-Registrar, Delhi under registration
No.4497, in Book No.I Volume No. 3607 on pages 30 to 32
dated 12.7.2010, the lease hold rights in undivided front
portion of property No. BP-32, Nizamuddin East, New Delhi
as laid down in the Lease Deed executed on 28.1.1957 has
been substituted in the names of S/Smt. Uma Lall & Urmilla
Kapoor as executors of the Will of Ms. Usha Bhagat.
The property now stands in the books of this office as
under:
1. Undivided share of rear portion of the property in the
name of Sh. Vinoo Bhagat S/o Sh. H.G. Bhagat.}
2. Undivided share of front portion of the property}
In the names of Smt. Uma Lall W/o Col. J.J. Lall} jointly
Smt. Urmilla Kapoor W/o Sh. J.C. Kapoor}
All are bound by the clauses of Lease Deed executed on
28.1.1957 and duly registered at serial No. 83, in Book No. 1
volume No.2 on pages 79 to 80 dated 18.2.1957.
Sub-division of the property will not be allowed at any
stage.
However, if it is found subsequently that certain facts
have not been brought to the notice of the government or the
facts have been misrepresented, the government reserves the
right to review the matter suo motto.
The Government dues are to be demanded separately
from you. You are further required to submit sanctioned
building plan or completion certificate or occupancy
certificate for the purpose of calculating the penalty for
belated construction which may be demanded from you later.
Yours faithfully,
Sd/-
[G.H. RATRA]
Dy. Land & Development Officer
For & on behalf of the President of India
Copy to:
1. MCD, Zonal Office, Lajpat Nagar.
2. Accounts Section.
3. The Commissioner of Income Tax, C.R. Bldg. I.P.
Estate, New Delhi.
Dy. Land & Development Officer."
63. Soon after the mutation of the property efforts were made for
conversion and the same was in the process when the time period stipulated
in the agreement was due to lapse. Thus, the plaintiff wrote a letter to
Urmila Kapur defendant No. 2 on 4th September, 2010 vide Ex. PW-1/12,
followed by notice to all the defendants on 10th September, 2010 detailing
the facts of the case and informing that out of the period of approximately
nine months, seven months were spent in pursuing the defective application
and two months in complying with the formalities, procuring documents,
execution of the same, without any fault of the plaintiff which needs to be
excluded or that the time be extended and that the plaintiff was ready and
willing to perform his part of obligation, that is, payment of balance sale
consideration at the time of execution of the sale deed in his favour. In the
meantime, on 13th September, 2010 the plaintiff received an email from
defendant No. 2 forwarding a communication between defendant Nos. 3 and
5 which noted that since the property prices had risen and time of the
contract has expired there was no obligation on their part to perform part of
the contract, contents whereof have been reproduced later on.
64. Though defendants claim no delay on their part, however further
emails between the parties as noted below will reveal the manner in which
delay was caused to the plaintiff.
i. Email from Vinoo Bhagat to Tarun Sawhney dated 8th July, 2010.
"Dear Mr. Sawhney,
Lalit Sachdeva telephoned this morning asking for a doctor's
certificate that Mrs Khanna cannot go to the registrar's office.
Mrs Khanna has been upset the past few days why she is being
singled out for giving up anything. I had no answers to give
her.
The earlier draft of surrender clearly was to make her
surrender her ownership rights in this property. The
surrender of her right to mutation can also be misused later on
in ways that no one can foresee.
It is unfair to make Mrs khanna give up anything connected
with this property.
Please ask the L&DO to do the mutation in a way by which no
one gives up any rights whatsoever.
Regards,
Vinoo Bhagat"
ii. Email from Vinoo Bhagat to Tarun Sawhney dated 9th July, 2010.
"Dear Mr. Sawhney,
Our telephone conversation yesterday that the mutation
may confer ownership rights on the two sisters under the will,
and that you have no influence over the L&DO, gave me a
sleepless night.
If the L&DO mutates illegally then it will be a serious
setback for us, the sellers. We will have to move the High
Court to have the illegal mutation set aside, and then seek that
the correct mutation be done - doubling our work. It would
have been much better if we had gone to the High Court a year
ago.
Mrs Khanna is signing the new document on the
understanding that it is nothing more than her no objection
Affidavit says, viz. the one- half of the property can be mutated
in the names of the two sisters. If the new document is used to
harm her substantive rights in the property then it will be a
case of the fraudulent use of the document.
Please avert disaster before it strikes.
Regards,
Vinoo Bhagat"
iii. Email from Tarun Sawhney to Vinoo Bhagat dated 15th July, 2010.
"Dear Mr. Bhagat,
This is in reference to your e-mails dated 6.7.2010 and
13.7.2010. Very honestly, I am surprised after reading the
mails.
At the outset, I would like to clarify that keeping the
differences within your family and the age of the sellers in
view, I took the onus of coordinating the paperwork with the
L&DO. To make myself further clear, I worked only as a
facilitator and all processes regarding the mutation and
conversion of the property at the L&DO are happening as per
law on the basis of the documents vetted by yourself and
members of your family. You would appreciate that even
recently, only after you cleared the necessary documents, I
deposited an amount of ₹11.76 lacs towards the L&DO
liability for mutation and conversion, for which I have
received a receipt from the L&DO.
Regarding our agreement to sell, you had wanted the sale
consideration for the front portion to be paid to all five in
order to avoid any future disputes amongst yourselves; I
agreed to pay the same to all the brothers and sisters in the
manner suggested by you which is reflected in our agreement
to sell and your family settlement. As I have mentioned to you
on the telephone, we expect the mutation and conversion
shortly and the execution of the Disclaimer Deed by Mrs
Khanna, which was approved by you and executed in your
presence, was a part of this process.
I am very keen and willing to conclude the transaction as early
as possible and I want to proceed as we had agreed, quickly.
I trust have answered your mails under reference.
As We have been meeting all along, please indicate the date
and time convenient for a meeting. I am in Delhi until this
Saturday and will be travelling until Tuesday next week.
Regards,
Tarun Sawhney
iv. Email from Vinoo Bhagat to Tarun Sawhney dated 4th August, 2010.
"No, I have not received the mutation letter yet.
Regards,
Vinoo Bhagat
At 21:07 3.8.2010, you wrote:
Dear Mr. Bhagat,
I hope you have received the mutation letter?
Would you be free to speak tomorrow?
Regards,
Tarun Sawhney
Sent from blackberry on Airtel"
v. Email from Vinoo Bhagat to Tarun Sawhney dated 5th August, 2010.
"Dear Mr Sawhney,
The mutation letter reached me later yesterday.
The mutation letter is appalling and quite illegal. A few of the
illegalities that appear at a first glace are-
1. Both our applications for mutation have been ignored/re-
written contrary to court judgments.
2. The court judgment awarding me an undivided one-half
has been altered to make it award me a rear one-half. It
appears the word front/rear in the applications were got
written for this purpose.
3. The Letters of Administration awarding me 120 sq. yds.
Out of the remaining one-half have been ignored (in an
attempt to affect my entitlement under the court order?).
4. The affidavits of the applicants and other heirs that the
clause in Usha Bhagat's will concerning the property was
adeemed have not been acted upon. Instead, the clause in will
has been re-written to make the bequest of the entire property
in three portions A, B and C to different persons as one of only
the ' front one-half' to the two applicants. This is ridiculous
5. Mrs. Khanna's disclaiming her entitlement to mutation
has been recorded in a manner suggesting that she has given
up her rights in the property. This is shocking.
Further reflection may reveal more concerns. We can
neither accept such a mutation nor any responsibility for its
legal effect or consequences now or at any time in the future.
You may consider the matter at your end also.
Regards,
Vinoo Bhagat
Date: Wed, 4th August, 2010 10:46:26 +0530
To: [email protected]
From: Vinoo Bhagat [email protected]
Subject: re:
No, I have not received the mutation letter yet.
Regards,
Vinoo Bhagat
At 21:07 03-08-2010, you worte:
Dear Mr. Bhagat,
I hope you have received the mutation letter?
Would you be free to speak tomorrow?
Regards,
Tarun Sawhney
Sent from Blackberry on Airtel
vi. Email from Vinoo Bhagat to Tarun Sawhney dated 7th August, 2010.
"Dear Mr Sawhney,
I do not wish to enter into any argument. The correct
position is set out in my email of 5th August. It explains,
amongst other things, how the L&DO's actions are not in
accord with the documents we signed. The Agreements to Sell
set out who is to do the mutation and conversion, and have to
be read as they are written.
Yours truly,
Vinoo Bhagat
At 19:09 5.8.2010 you wrote:
Dear Mr Bhagat,
I have received your mail and was surprised to note your
observations on the mutation letter. Let me clarify that I have
only worked as a facilitator, on your and your family's
request, in order to help the entire family and keeping the age
of the sellers in mind. The actions taken by the L&DO or that
are under process, are all based upon the documents filed by
yourself and your family members, and I am sure that the
Department must have examined these documents from all
angles before taking a decision on the same.
Let me assure you that I have no issue in making payment of
the sale consideration in the manner agreed to amongst all the
heirs of Ms Usha Bhagat, as per your family settlement.
I am ready and keen to conclude the transaction of sale at the
earliest and expect that you will execute the necessary
paperwork and documentation as required.
Yours truly,
Tarun Sawhney
65. A perusal of the emails abovenoted clearly show that on one pretext or
other there was an endeavour to not agree to the mutation constraining the
plaintiff to send the letter dated 4th September, 2010 (Ex.PW-1/12) followed
by the legal notice dated 10th September, 2010. The emails clearly show that
plaintiff was always ready and willing to perform his part of the agreements
of Sell.
66. Thus issue No.3 is decided in favour of the plaintiff and against the
defendants.
67. Issue No. 4: Whether the plaintiff is entitled to specific performance of
the Agreements to Sell dated 16th September, 2009? (OPP).
68. Learned counsel for the plaintiff submits that the plaintiff having
performed his obligations under the two Agreements to Sell and always been
ready and willing to perform the remaining obligations the plaintiff is
entitled to specific performance of the two Agreements to Sell dated 16th
September, 2009, mutations had taken place and conversions to freehold was
in process. There was no delay in getting necessary clearance from the L &
DO on account of the plaintiff. Reliance is placed on the decision reported
as AIR 1915 Privy Council 83 Jamshed Khoduram Irani vs. Burjorji
Dhunjibhai.
69. Opposing the relief of specific performance of the two Agreements to
Sell dated 16th September, 2009 in favour of the plaintiff, defendant No. 5
states that since a wrong mutation of one half of the suit property has been
carried out three of the five owners of the one half of the suit property have
lost their ownership, thus the plaintiff cannot seek specific performance of
the Agreement to Sell Ex. PW-1/2. The incorrect mutation was got done by
the plaintiff as had been claimed by him. One half of the suit property which
was agreed to be sold vide Ex. PW-1/2 devolved on all the five siblings of
late Usha Bhagat. However, mutation has been carried out only in the name
of defendant Nos. 1 and 2. Thus the Agreements to Sell executed by five
owners cannot be enforced by only two owners. Further in view of the fraud
played by the plaintiff he cannot seek specific performance of the
Agreements to Sell in terms of Section 16 (b) of the Specific Relief Act,
1963 as he made defendant No. 3 to surrender her right in the suit property
by making her execute a Disclaimer Deed Ex. D5/W1/A by dishonestly and
fraudulently representing in his email Ex. D-2 dated 3rd July, 2010 in respect
to the requirement of the L & DO for mutation. A perusal of the record of
the L & DO Ex. D5/W1/A shows no such requirement. Defendant No. 3 has
already filed a suit for cancellation of Disclaimer Deed which is pending
before the learned Civil Judge, New Delhi. Defendant No. 5 rendered proper
legal advice to the plaintiff vide his email dated 17th March, 2010 Ex. PW-
1/20 however the plaintiff failed to adhere to the same. Despite informing the
correct legal position to the plaintiff that mutation in two names under a Will
would be illegal and a writ petition was a right remedy, he took no steps.
Thus the second mutation application filed by the plaintiff in the name of
defendant Nos. 1 and 2 only, was entirely at his risk. Further since mutation
of one half portion of the suit property was granted in the name of defendant
Nos. 1 and 2 the plaintiff was required to get executed a fresh Agreement to
Sell in place of Ex. PW-1/2 which he failed to do so. The family settlement
entered amongst the defendants is irrelevant to the present suit proceedings.
The defendants having returned the amount received immediately on
automatic termination of the two Agreements to Sell, the plaintiff cannot
seek specific performance of the two Agreements to Sell dated 16th
September, 2009. Further a specific performance of a contract different from
the one proved in the suit cannot be granted. Reliance is placed on the
decision reported as 2004 (6) SCC 537 HPA International vs. Bhagwandas
Fateh Chand Daswani & Ors.
70. The main premises of the argument of defendant No. 5 duly supported
by learned counsel for defendant No. 3 for negating the relief of specific
performance of the two Agreements to Sell dated 16th September, 2009
Ex.PW-1/2 and PW-1/3 is that since on the fresh application filed at the
insistence of the plaintiff, half portion of the property was mutated in the
name of defendant Nos. 1 and 2 thereby defendant Nos. 3, 4 and 5 not
remaining owners of half share of the suit property, the Agreement to Sell
Ex. PW-1/2 which was executed between the plaintiff and defendant No. 1 to
5 cannot be enforced. It is the admission of the defendants particularly
defendant No. 5 in his various communications that mutation does not confer
title. Further even de-hors the admission it is well settled that mutation in the
name of one or two co-owners of the property does not oust the title of the
remaining co-owners. It is trite law that mutation of a property in the revenue
record does not create or extinguish title, nor has it any presumptive value on
title. It only enables the person in whose favour mutation is ordered to pay
the land revenue in question. [See: 1996 (6) SCC 223 Sawarni (Smt.) vs.
Inder Kaur (Smt.) & Ors.]. Even in 2015 (16) SCC 689, Municipal
Corporation, Aurangabad through its Commissioner vs. State of
Maharashtra & Anr. Supreme Court held that mutation does not confer any
right and title in favour of anyone or other, nor cancellation of mutation
extinguishes the right and title of the rightful owner.
71. In the decision reported as (2010) 10 SCC 51 Man Kaur Vs. Hartar
Singh Sangha Supreme Court succinctly laying the criteria of grant of
specific performance of the contract held:
"29. We may attempt to clarify the position by the following
illustrations (not exhaustive):
(A) The agreement of sale provides that in the event of
breach by the vendor, the purchaser shall be entitled to an
amount equivalent to the earnest money as damages. The
agreement is silent as to specific performance. In such a
case, the agreement indicates that the sum was named only
for the purpose of securing performance of the contract.
Even if there is no provision in the contract for specific
performance, the court can direct specific performance by
the vendor, if breach is established. But the court has the
option, as per Section 21 of the Act, to award damages, if it
comes to the conclusion that it is not a fit case for granting
specific performance.
(B) The agreement provides that in the event of the
vendor failing to execute a sale deed, the purchaser will not
be entitled for specific performance but will only be entitled
for return of the earnest money and/or payment of a sum
named as liquidated damages. As the intention of the parties
to bar specific performance of the contract and provide only
for damages in the event of breach, is clearly expressed, the
court may not grant specific performance, but can award
liquidated damages and refund of earnest money.
(C) The agreement of sale provides that in the event of
breach by either party the purchaser will be entitled to
specific performance, but the party in breach will have the
option, instead of performing the contract, to pay a named
amount as liquidated damages to the aggrieved party and
on such payment, the aggrieved party shall not be entitled to
specific performance. In such a case, the purchaser will not
be entitled to specific performance, as the terms of the
contract give the party in default an option of paying money
in lieu of specific performance."
72. Supreme Court in the decision reported as (2011) 12 SCC 658
Vimaleshwar Nagappa Shet v. Noor Ahmed Shariff held as under:
"11. It is settled law that Section 20 of the Specific Relief Act,
1963 confers discretionary powers. [Vide M.
Meenakshi v. Metadin Agarwal [(2006) 7 SCC 470], Nirmala
Anand v. Advent Corpn. (P) Ltd. [(2002) 5 SCC 481]
and Parakunnan Veetill Joseph's Son Mathew v. Nedumbara
Karuvila's Son [1987 Supp SCC 340].] It is also well settled
that the value of property escalates in urban areas very fast
and it would not be equitable to grant specific performance
after the lapse of a long period of time."
73. Supreme Court in the decision reported as 2017 (5) SCC 178,
Jayakantham & Ors. vs. Abaykumar did not award a decree for specific
performance on the basis of the material on record which indicated that the
terms of contract, conduct of parties at the time of entering into agreement
and the circumstances gave plaintiff unfair advantage over defendants, thus
the circumstances made it inequitable to enforce specific performance.
74. Further in the decision reported as (2011) 12 SCC 18 Saradamani
Kandappan v. S. Rajalakshmi it was observed:
37. The reality arising from this economic change cannot
continue to be ignored in deciding cases relating to specific
performance. The steep increase in prices is a circumstance
which makes it inequitable to grant the relief of specific
performance where the purchaser does not take steps to
complete the sale within the agreed period, and the vendor has
not been responsible for any delay or non-performance. A
purchaser can no longer take shelter under the principle that
time is not of essence in performance of contracts relating to
immovable property, to cover his delays, laches, breaches and
"non-readiness". The precedents from an era, when high
inflation was unknown, holding that time is not of the essence
of the contract in regard to immovable properties, may no
longer apply, not because the principle laid down therein is
unsound or erroneous, but the circumstances that existed when
the said principle was evolved, no longer exist. In these days of
galloping increases in prices of immovable properties, to hold
that a vendor who took an earnest money of say about 10% of
the sale price and agreed for three months or four months as
the period for performance, did not intend that time should be
the essence, will be a cruel joke on him, and will result in
injustice. Adding to the misery is the delay in disposal of cases
relating to specific performance, as suits and appeals
therefrom routinely take two to three decades to attain finality.
As a result, an owner agreeing to sell a property for rupees
one lakh and received rupees ten thousand as advance may be
required to execute a sale deed a quarter century later by
receiving the remaining rupees ninety thousand, when the
property value has risen to a crore of rupees.
75. In H.P.A International (supra) relied upon by the defendant No. 5,
Supreme Court was dealing with specific performance of an agreement
wherein the vendor had been bequeathed the right of enjoyment during his
lifetime of the estate of the testator but without bar of alienation. The vendor
entered into an Agreement to Sell of the suit property with H.P.A.
International, a partnership firm which as per the recital in the agreement
was necessitated because of the pressing demands of the public authorities
towards dues and tax liability. In the suit H.P.A. International also sought
for the alternative relief/lesser relief of transfer of only life interest in the suit
property of the vendor which was granted. Dealing with the issue whether
the terms of the contract justify grant of decree of specific performance for
lesser relief of conveyance of life interest of the vendor relying upon the
decision of the Privy Council in the decision reported as AIR 1924 PC 335
William Graham vs. Krishna Chunder Dey it was held:
"77. In our considered opinion, Section 12(3) of the
Specific Relief Act can be invoked only where terms of
contract permit segregation of rights and interest of parties in
the property. The provision cannot be availed of when the
terms of the contract specifically evince a intention contrary to
segregating interest of the vendor having life interest and spes
successionis of reversioners. Neither law nor equity is in
favour of the vendee to grant Specific Performance of the
Contract.
78. ....
79. .....
80. .....
81. .....
82. ......
83. .....
84. ......
85. The alternative claim for lesser relief of life interest of
vendor has been rejected by us. We find support for our
conclusion from the following observations of Privy Council
in William Graham vs. Krishna Chandra Dey], where on
similar provisions of section 16 of the old Specific Relief Act,
such claim for lesser relief was negatived on the ground that it
would amount to creating a different contract between the
parties not in contemplation by them when they entered into
the contract in question, which is sought to be enforced.
"Their Lordships think (1) that before a Court can
exercise the power given by section 16 it must have
before it some material tending to establish these
propositions, and cannot apply the section on a mere
surmise that, if opportunity were given for further
enquiry, such material might be forthcoming and
possibly might be found to be sufficient; and (2) that
the words of the section wide as they are, do not
authorise the Court to take action otherwise than
judicially, and in particular do not permit it to make
for the parties, or to enforce upon them a contract,
which in substance they have not already made for
themselves. .............
...............Hence section 16, both because it must be
something not covered by section 14 and because no
court can act unjugdicially without either statutory
warrant or consensual authority, must be limited
and the expression "stands on a separate and
independent footing" points to a limitation, which
would exclude any new bargain, that cannot be said
to be contained in the old one."
76. In the decision reported as (2017) 4 SCC 654 A. Kanthamani Vs.
Nasreen Ahmed Supreme Court dealing with the issue whether specific
performance of an agreement should be granted or not held:
"32. Coming now to the second and third submissions of the
learned counsel for the appellant, we are of the considered
opinion that they have also no merit and hence, deserve to be
rejected for more than one reason:
32.1 First, the plaintiff had pleaded the necessary
requirements of Section 16(c) of the Specific Relief Act, 1963
read with the requirement of Forms 47, 48 and Article 54 of the
Limitation Act in the plaint.
32.2 Second, the defendant did not dispute the execution of the
agreement with the plaintiff and, in fact, entered in
correspondence with the plaintiff for incorporation of some
clauses therein.
32.3 Third, the plaintiff proved her readiness and willingness
to perform her part of the agreement and also proved her
financial capacity to purchase the suit property by adducing
adequate evidence.
32.4 Fourth, the plaintiff had paid more than ₹2 lakhs to the
defendant prior to execution of the sale deed in terms of the
agreement dated 5-3-1989 and was, therefore, required to pay
balance sum of ₹1,47,200/- to the defendant.
32.5 Fifth, on the admitted facts, therefore, the plaintiff had
paid more than 50% of the sale consideration to the defendant
before the due date of execution of sale deed.
32.6 Sixth, the plaintiff had also proved that she had the
requisite financial capacity to pay the balance sale
consideration to the defendant inasmuch as she had arranged
the funds by obtaining loan from LIC.
32.7 Seventh, the plaintiff filed the suit immediately on expiry
of the period within 10 days to show her readiness and
willingness to purchase the property.
32.8 Eighth, once it was held that the defendant committed
breach in avoiding to execute the agreement, whereas the
plaintiff performed her part of agreement and was ready and
willing to perform her part, the trial court was justified in
exercising its discretion in favour of the plaintiff by passing a
decree for specific performance of the agreement against the
defendant."
77. In the decision reported as (2017) 5 SCC 178 Jayakantham & Ors. Vs.
Abaykumar Supreme Court refused to grant the discretionary relief of
specific performance of the contract for the reason it found that the
circumstances under which the contract was entered into gave plaintiff an
unfair advantage over defendants making it inequitable to enforce specific
performance. In the present case as noted above the plaintiff has fulfilled all
the 7 criteria laid down by the Supreme Court except payment of more than
half the price and has furnished bank guarantee for the sale consideration and
no unfair advantage has been drawn by him. The emails and documents
clearly show that the delaying tactics and avoidance of the agreements was
on part of the defendants particularly defendants No.3 and 5. The specific
performance of the two agreements can also not be refused for the escalation
of the price as the defendants have examined a witness DW-4 who has
exhibited photocopy of the sale deed which shows that there is no escalation
in the prices of the properties in the neighbourhood.
78. Contention of defendant No. 5 that by the second application seeking
mutation in the name of two defendants and getting the Deed of Disclaimer
executed from defendant No. 3, a fraud was played on the defendants
deserves to be rejected for the reason whatever applications were filed drafts
were sent to the defendants and all documents filed were in the knowledge of
the defendants and were filed with their consent. As noted above mutation
in the name of one or two co-owners does not wipe out the right of
ownership of the other co-owners.
79. Thus issue No.4 is also decided in favour of the plaintiff and against
the defendants.
80. Issue No. 5: If specific performance of the Agreements to Sell dated
16th September, 2009 is not granted to the plaintiff, whether he is entitled to
damages and if so, to what amount? (OPP).
81. Since this Court has decided issue No. 4 in favour of the plaintiff and
against the defendants no finding on this issue is required to be made.
82. Issue Nos. 6 and 7: Whether the plaintiff is entitled to the mandatory
injunction sought by him? (OPP) and Whether the plaintiff is entitled to the
permanent injunction sought by him? (OPP).
83. This Court has already held that the plaintiff did not commit any delay
in performing his part of the obligations and was always willing and ready to
perform his remaining obligations and that the two Agreements to Sell did
not terminate automatically hence, these issues are decided in favour of the
plaintiff and against the defendants.
84. Issue No. 8: Whether the suit is barred by estoppel? (OPD).
85. Defendant No. 5 states that since the plaintiff agreed to a stipulation in
the Agreements to Sell relating to automatic termination of the Agreements
to Sell the plaintiff was now estopped from taking plea contrary to his own
agreement.
86. In the decision reported as (2012) 11 SCC 1 Monnet Ispat and Energy
Ltd. Vs. Union of India & Ors. Supreme Court culled out the principles of
applicability of the doctrine of promissory estoppel as under:
"182. In my view, the following principles must guide a court
where an issue of applicability of promissory estoppel arises:
182.1. Where one party has by his words or conduct made to
the other a clear and unequivocal promise which is intended to
create legal relations or affect a legal relationship to arise in
the future, knowing or intending that it would be acted upon by
the other party to whom the promise is made and it is, in fact, so
acted upon by the other party, the promise would be binding on
the party making it and he would not be entitled to go back
upon it, if it would be inequitable to allow him to do so having
regard to the dealings which have taken place between the
parties, and this would be so irrespective of whether there is
any pre-existing relationship between the parties or not.
182.2. The doctrine of promissory estoppel may be applied
against the Government where the interest of justice, morality
and common fairness dictate such a course. The doctrine is
applicable against the State even in its governmental, public or
sovereign capacity where it is necessary to prevent fraud or
manifest injustice. However, the Government or even a private
party under the doctrine of promissory estoppel cannot be asked
to do an act prohibited in law. The nature and function which
the Government discharges is not very relevant. The
Government is subject to the rule of promissory estoppel and if
the essential ingredients of this doctrine are satisfied, the
Government can be compelled to carry out the promise made by
it.
182.3. The doctrine of promissory estoppel is not limited in its
application only to defence but it can also furnish a cause of
action. In other words, the doctrine of promissory estoppel can
by itself be the basis of action.
182.4. For invocation of the doctrine of promissory estoppel, it
is necessary for the promisee to show that by acting on promise
made by the other party, he altered his position. The alteration
of position by the promisee is a sine qua non for the
applicability of the doctrine. However, it is not necessary for
him to prove any damage, detriment or prejudice because of
alteration of such promise.
182.5. In no case, the doctrine of promissory estoppel can be
pressed into aid to compel the Government or a public authority
to carry out a representation or promise which is contrary to
law or which was outside the authority or power of the officer
of the Government or of the public authority to make. No
promise can be enforced which is statutorily prohibited or is
against public policy.
182.6. It is necessary for invocation of the doctrine of
promissory estoppel that a clear, sound and positive foundation
is laid in the petition. Bald assertions, averments or allegations
without any supporting material are not sufficient to press into
aid the doctrine of promissory estoppel.
182.7. The doctrine of promissory estoppel cannot be invoked in
abstract. When it is sought to be invoked, the court must
consider all aspects including the result sought to be achieved
and the public good at large. The fundamental principle of
equity must forever be present to the mind of the court. Absence
of it must not hold the Government or the public authority to its
promise, assurance or representation."
87. As noted above, one of the principles of application of doctrine of
promissory estoppel is that on the words and conduct of the party the other
party may have changed his/her position. As noted in the discussion on the
various issues, it was the defendants particularly defendant No.5 causing
delay on one account or the other, requiring the plaintiff to first ask the
defendants to perform their part of the contract within the specified period
and when not done asking for extension of time which was granted by
defendant No.1, 2 and 4. Thus, the suit is not liable to be dismissed on the
doctrine of estoppel.
88. Issue No. 9: Whether the defendants have committed breach of the
Agreements to Sell dated 16th September, 2009? (OPP).
89. From the correspondence as noted it is evident that though vide letter
of L & DO dated 8th July, 2009 documents were asked from defendant No. 5
who was in possession of the documents the same were supplied only on 23rd
November, 2009 whereby substantial time of 2½ months was lost after the
agreements to sell were executed. Further since there were problems in
getting the mutation done in view of the copy of the Will having been placed
along with the application seeking mutation, defendant Nos. 1 to 5 withdrew
the application only on 7th April, 2010 and filed an application on behalf of
defendant Nos. 1 and 2 pursuant to a family settlement arrived at between
the parties. The fact that defendants not only committed breach of the
agreements but the intention of defendant No. 5 was dishonest is evident
from the email sent by defendant No. 2 Urmila Kapur to the plaintiff on 13th
September, 2010 enclosing email dated 11th September, 2010 received from
Shri Kapil Bhagat, noting as under:
"Dear Urmilla,
I hope your secretary works on Saturdays and hopefully
you would have a hard copy of this message for your meeting
later today.
Uma spoke with in about the latest developments re No. 32
Nizamuddin East, and to say I was shocked would be an
understatement. How can any one think of sullying the Bhagat
name for a few pieces of silver. As far as I am concerned, we
morally accepted the deal by signing certain documents,
accepting the advance payment and depositing it in our
accounts and shaking hands over it.
Smart lawyers may find legal lacunae in documents, but that
does not nullify the fact we agreed and accepted the sale of 32
Nizamuddin East to Mr. Sawhney. It would be most
ungentlemanly on our part to find a legal loop hole to squiggle
out of a situation, already accepted in all manners of morality
and ethics.
Please give this message from me to Mr. Sawhney as my
protest to the proposed alleged action being considered.
Love to all,
Kapil"
90. From the documents as noted above it can safely be held that not only
did the defendants commit breach of contract but the action was aimed at
scuttling the execution of the sale deeds pursuant to the two Agreements to
Sell dated 16th September, 2009.
91. Hence issue No.9 is also decided in favour of the plaintiff and against
the defendants.
92. Issue No. 10: Whether the suit is bad for mis-joinder of cause of
action? (OPD-1, 2 and 4)
93. Learned counsel for defendant Nos. 1, 2 and 4 has taken the plea that
since there were two separate agreements, the suit is liable to be dismissed
for misjoinder of the causes of action.
94. As noted above, Clause-9 of Ex. PW-1/2 the first Agreement to Sell
and Clause-6 of Ex. PW-1/3 the second Agreement to Sell provided that the
said agreement as well as the other agreement relating to the remaining one
half of the property has been entered into with the understanding of all the
parties to both agreements that both agreements shall run concurrently with
each other for sale of the entire aforesaid property. It was thus a stipulation
in the Agreements to Sell that the two agreements were to run concurrently
as they related to one half each of the suit property. Thus, the plea of
defendant Nos. 1, 2 and 4 that the suit is liable to be dismissed for misjoinder
of causes of action is liable to be dismissed. Thus the issue is decided in
favour of the plaintiff and against defendants No.1, 2 and 4.
95. Issue No. 11: Relief
96. The suit is thus decreed in favour of the plaintiff and against the
defendants directing defendant Nos. 1 to 5 to execute sale deeds in favour of
the plaintiff of the half undivided share in the suit property No. 32,
Nizamuddin East, New Delhi-110013 by executing a Conveyance Deed and
getting the same registered on the plaintiff paying the balance consideration
with an interest at the rate of 9% per annum from the day the sale deeds had
to be executed i.e. 16th September, 2010. Decree is also passed in favour of
the plaintiff and against defendant No. 5 to execute a Conveyance Deed in
favour of the plaintiff with respect of the remaining undivided half share of
defendant No. 5 in the suit property and get the same registered on payment
of the sale consideration with an interest at the rate of 9% per annum from
16th September, 2010. Defendants are further permanently injuncted from
selling, alienating, parting with possession or otherwise creating any third
party interest in the suit property No. 32, Nizamuddin East, New Delhi-
110013. Decree of mandatory injunction is also passed in favour of the
plaintiff and against the defendants to get registered the Conveyance Deed in
favour of the plaintiff in respect of the suit property.
Crl.M.A. 12418/2013 (u/S. 340 Cr.P.C. by D-3 & 5)
By this application defendants No.3 and 5 have sought action against
the plaintiff under Section 340 Cr.P.C. and Section 151 Cr.P.C. as they
challenged the signatures of defendant No.1 on Ex.D-5/W-1/A.
Though the defendants No.3 and 5 challenge the signatures of
defendant No.1, however defendant No.1 herself has not challenged the said
signatures, thus it cannot be held that the deed given to the L & DO was a
forged and fabricated document.
Application is accordingly dismissed.
IA 24611/2015 (for compensation by D-3 & 5)
By this application defendants No.3 and 5 have sought restitution and
compensation.
In view of the fact that the suit has been decreed in favour of the
plaintiff, this Court finds no ground to grant compensation and restitution to
defendants No.3 and 5.
Application is dismissed.
(MUKTA GUPTA)
JUDGE
FEBRUARY 05, 2019
'vn'
