Shivjot Developers And Builders ... vs Sarup Singh
2025 Latest Caselaw 1035 P&H

Punjab-Haryana High Court

Shivjot Developers And Builders ... vs Sarup Singh on 17 January, 2025

                                   Neutral Citation No:=2025:PHHC:006983

RSA-4949--2019 (O&M)               -1-


IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

                                                                           109

1.           RSA
             RSA-4949-2019 (O&M)

Shivjot Developers and Builders Ltd.                   .... Appellant

                            Versus
Sarup Singh                                            .... Respondent

2.           RSA
             RSA-3938-2019 (O&M)

Shivjot Developers and Builders Ltd.                   .... Appellant

                            Versus
Sarup Singh                                            .... Respondent

                                            Date of Decision: 17.01.2025

CORAM: HON'BLE MS. JUSTICE NIDHI GUPTA

Present: -     Mr.. Munish Kumar Garg, Advocate for the appellant.

NIDHI GUPTA, J. (ORAL)

1. The plaintiff is in second appeal before this Court laying

challenge to the judgment and decree dated 17.8.2015 passed by the

learnedTrial dTrial Court whereby decree for specific performance was declined,

but refund of earnest ea money was ordered; and judgment and decree dated

5.3.2019 passed by the ld.

l 1st Appellate Court, whereby refund of earnest

money was set aside;

aside and thus praying for decretal of the suit in toto.

2. By way of this common judgment the 02 aforementioned

appeals are being disposed of, as both appeals have arisen out of common

impugned judgments of both the Courts below dated 17.08.2015 (trial

Court) and 05.03.2019 (1st Appellate Court) and similar facts are involved

therein. For brevity, the facts are being extracted from RSA RSA-4949-2019.

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3. The parties shall hereinafter be referred to as per their status

before the learned trial Court i.e. the appellant is being referred to as the

plaintiff whereas the respondent as defendant.

4. Brief facts of the case are that the plaintiff had filed a suit for

joint possession as owner by way of specific performance of agreement to

sell dated 03.08.2005 and 19.09.2005 regarding the suit land measuring

16 kanals-4¾ 4¾ marlas as described in the head note of the plaint; And suit

for permanent injunction restraining the defendant, its agent servants and

representative from selling, mortgaging, transferring alienating in any

manner the land as described in the second head note of the plaint; And

directing ng the defendant to execute the sale deed in favour of the plaintiff

or his nominee for Rs.17,97,65,600/ Rs.17,97,65,600/- after the adjustment of

Rs.23,96,000/ given as earnest money to the defendant. The plaintiff had Rs.23,96,000/-

exhibited his readiness and willingness to perform hhis part of contract.

5. The facts as set out in the plaint are that the plaintiff and

defendant entered into agreement on 03.008.2005 05 for sale of joint land

measuring 16 kanals k nals 4¾ marlas as fully described in the head note of the

plaint situated in the revenue estate of village Aujla Hadhbast No 182,

Tehsil Kharar Distt. SAS Nagar. The rate as settled between plaintiff and

the defendant initially was ₹93,50,000 93,50,000 per acre. In total six sale deeds

were agreed to be executed executed with regard to this land. It was agreed between

the parties that plaintiff would obtain the requisite permission from

PUDA/Town Planner Department and for the purpose Defendant would

furnish a consent deed in favour of plaintiff, for enabling plaintiff to apply

to PUDA/Town Planner Department for obtaining requisite permission

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RSA-4949--2019 (O&M) -3-

with respect to this land for building an infrastructure with respect to

developing residential colony. A total amount of ₹ 23,96,000/- was paid

by plaintiff towards the earnest money.

mo The total land agreed to be sold

was equally divided into six parts in order to affect six sale deeds at an

interval of four months each. Subsequently a fresh agreement dated

19.9.2005 05 was executed between defendant and plaintiff through which,

the basic sic terms and conditions as incorporated in the earlier agreement to

sell dated 3.8.2005 3.8. 05 were retained. However, substitution in the agreement

dated 19.9.2005 19.9. 05 were made and the rate of land was mutually agreed at

₹88,50,000 88,50,000 per acre, as it came to notice tthat hat this land agreed to be sold

through earlier agreement to sell dated 3.8.

3.8.2005, 05, was not within the

Municipal Limit of Municipal Council, Kharar. The date for effecting the

first registered sale deed would be within a period of four months, from

the date the Govt. issues necessary notification for bringing the land

within the Municipal of Municipal Council, Kharar. The rest of the terms

and conditions of earlier agreement to sell dated 3.8.

3.8.2005 05 were kept

intact. The substituted/amended agreement to sell da dated 3.8.2005 05 bears the

signature of the defendant as well as the signature oon behalf of plaintiff

and other marginal witnesses. The notification was issued by the Govt. of

Punjab on 20.2.2006.

20.2. Plaintiff on the basis of 'consent deed' furnished by

the defendant applied to Chief Town Planner lanner Govt. of Punjab for

obtaining required technical clearance of the building plans. Along with

the said application, plaintiff also appended the letter of consent which

had been prepared as per Section ection (2) (a) of the Punjab Apartment and

Property Regulation Regulation Act 1995 for a total 58 kanals 7 marlas of land. But

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in actual defendant had not handed over the physical possession of the suit

land. Baldev dev Singh who is also a co-share sharerr has already executed and

registered sale deed measuring 8 Kanal in favour of plaintiff on 25.5.

25.5.2006

vide vasika No 845 with respect to his exclusive holding, after receiving

the full sale consideration money. The actual physical possession has also

been handed over to plaintiff by Baldev Singh with respect to his land

holding on execution of the registered sale deed by said Baldev Singh in

favour of plaintiff. Earlier there were various correspondence between the

defendant and plaintiff. Keeping all these correspondences in abeyance

and in view of the fact that sufficient time has already lost after the

issuance of the notification by the Govt. of Punjab on 20.2.

20.2.2006 06 through

which the land agreed to be sold by the defendant, in favour of plaintiff

has come within the municipal limits of Municipal Council, Kharar, Distt.

Mohali. Plaintiff in order to assert its bonafide called upon the defendant

that he is ready to execute the sale deed in its favour regarding the

remaining land. Plaintiff further asserted tthat hat it is ready with the entire

sale consideration money and is willing to execute the registered sale deed

for the remaining land. Plaintiff has neither ever intended to prolong the

execution of the registered sale deed in its favour any further, nor it iiss

ever interested in any delay and time-consuming consuming litigations in court of

law, in the larger interest of itself, as well as the defendant. The plaintiff

intends to build up the requisite infrastructure on the land. Plaintiff has

already suffered enormous loss loss and damages for the undue delay in

execution of registered sale deed in its favour. The plaintiff has served a

legal notice dated 17.5.2007 17.5. 07 upon the defendant for the purpose of

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execution the registered sale deed on 4.7.2007 in favour of plaintiff. The

plaintiff also remained present in the office of Sub Registrar Tehsil

Complex on 20.6.2007 20 and 20.2.2008.

2008. It is pleaded that the plaintiff has

been throughout ready and willing and even now ready and willing to

perform his part of contract, but the contract has failed only because of

fault on the part of the defendants.

defendants. With these pleadings, the suit was

filed.

6. Upon notice, defendant/respondent respondent herein had put in

appearance and resisted the suit of the plaintiff on various grounds.

7. The plaintiff iff had filed replication reiterating the assertions

made in the plaint.

8. On the basis of the pleadings of the parties, following issues

were framed by the learned trial Court: -

"1. Whether the plaintiff is entitled for permanent injunction as prayed for for? OPP

2. Whether her the plaintiff is entitled for joint possession as owner by way of specific performance of the agreement to sell dated 03.08.2005 and 19.09 19.09.2005 2005 in the suit land as prayed for OPP 2a. Whether plaintiff company has always remained ready and willing to perform their part of contract? OPP

3. Whether the suit is not maintainable in the present form? OPD

4. Whether the suit is bad for delay and laches as prayed for? OPD

5. Whether the plaintiff is estopped stopped by his act and conduct to file the present suit? OPD

3. Relief."

9. On the basis of oral and documentary evidence adduced by

the parties, the learned trial Court decided issue No Nos.1, 2 and 2A in

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favour of the plaintiff and against the defendant; and issues No. 3 to 5

were not pressed during the course of arguments and as such those

issues were decided against the defendant and in favour of the plaintiff.

However,, the learned trial Court decreed th the suit of the plaintiff in

alternative for refund of earnest/advance money to the tune of

Rs.23,96,000/ with proportionate costs Rs.23,96,000/- costs, while relief of specific

performance and permanent injunction was denied. The learned trial

Court also granted the plaintiff pre-institution, institution, pendente lite and future

interest @ 6% on the said amount from the date of its advance till

realization.

10. The said judgment and decree dated 17.08.2015 of the

learned trial Court was challenged by both the parties i.e. plaintiff and

thee defendant by way of two separate appeals before the learned

Additional District Judge, SAS Nagar (Mohali) bearing Civil Appeal

No. RT-318/21.09.201 318/21.09.2015/18.08.2016 /18.08.2016 filed by the defendant defendant; and Civil

Appeal No. RT-271/24.09.2015/27.07.2016 RT 15/27.07.2016 filed by the appellant; and

vide common judgment and decree dated 05.03.2019, the appeal filed by

the defendant was allowed and the appeal filed by the plaintiff was

dismissed while setting aside the relief of recovery of earnest money to

the plaintiff. Hence, the present present second appeal appeals.

11. Learned counsel for the appellant appellant-plaintiff, inter alia,

submits that both the agreements dated 3.8.2005 and 19.9.2005 have

been duly proven on record. Even readiness and willingness on part of

the plaintiff to perform the contract was proven before the learned trial

court. Despite this the learned lower Appellate Court has erred in

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drawing an adverse inference against the plaintiff as it is clear from the

record that the plaintiff had appeared to execute the sale deed and had

therefore, fore, exhibited his readiness and willingness to perform the

contract. Moreover, the plaintiff was happy with the refund of earnest

money as granted to it by the learned trial Court. However, the learned

lower Appellate Court has set aside the money decree in favour of the

plaintiff only on the ground that the plaintiff had failed to demonstrate

his readiness and willingness to perform his part of contract and the

same is contrary to the evidence on record. In holding as above, the

learned lower Appellate Court Court has failed to appreciate that the plaintiff

had also sent a notice to the defendant to come to the Tehsil Office and

it is the defendant who had failed to put in appearance. Accordingly, it is

it prayed that the judgment of the learned 1st Appellate Court be set

aside.

12. No other argument is raised on behalf of the appellant.

13. I have heard learned counsel for the appellant and perused

the case file in great detail.

14. The learned trial court vide judgment and decree dated

17.8.2015 had denied the relief of specific performance and permanent

injunction to the plaintiff. The reasoning in this regard is contained in

para 19 of the trial court judgment dated 17.8.2015 17.8.2015, to the effect that

DW2 Director of the plaintiff company had deposed that the plaintiff

company was running short of funds because of which sale deed could

not be executed. It was further found that the contract between the

parties could not be concluded because of default and breach committed

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by plaintiff company. However,, as payment of earnest money was found

to have been made, the suit was decreed in the alternative for refund of

earnest/advance /advance money of ₹23,96,000/-- along with pre-institution,

pendente lite and future interest at the rate of 6% on the said amount.

15. In appeal, vide the impugned judgment and decree dated

05.03.2019 the learned lower Appellate Court has dismissed the

plaintiff's suit holding that the plaintiff was not entitled to recovery of

the earnest money as he had failed to prove his readiness and

willingness to perform his part of contract, despite the fact that

defendant had sent a notice to the plaintiff to come present in the Tehsil

Office on 24.07.2006.

24.0 It was found that on 24.7.2006, the plaintiff did

not turn up in the office of the Sub-Regis Sub egistrar, whereas the defendant

appeared in the Tehsil and got marked his presence through Affidavit

Ex. D-4;; and further held that from Ex. D1 to D3 it was clear that the

plaintiff was not ready and willing to perform his part of the contract.

Learned Appellate Court further returned the finding that there was no

evidence by plaintiff to show that he was having sufficient amount to get

the sale deed executed. Moreover, refund of earnest money was declined

on account of a definite recital in the agreement in question to the effect

that failure to execute the sale deed would automatically entail

cancellation and forfeiture of earnest money. The relevant findings of

the learned Ist Appellate Court are contained in para para-Nos. 17 and 18 of

the impugned impugned judgment and Decree dated 5.3.2019, and the same are

reproduced as under:-

under:

"17. Now the question is whether the respondent was ready and willing to perform its part of the contract or not.

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It is settled principle of law that mere filing of suit does not prove the readiness of a party to perform his part of the contract but readiness and willingness is to be inferred by the Court through the act and conduct of a party as well as other surrounding circumstances. In order to prove his readiness and willingness, ss, the respondent has merely placed on record affidavits Ex.P11/1 and Ex.P12/1 sworn by the representatives of respondent before the Executive Magistrate on 20.06.2007 and 22.02.2008 respectively. In this regard, a perusal of record shows that the appellaappellant had issued a legal notice dated 22.06.2006 Ex.D1 calling upon the respondent to get the sale deed executed from him as per the terms and conditions of agreement dated 03.08.2005. In reply to above legal notice, the respondent sent a legal notice Ex.D2 whereinherein it was averred that in addition to agreement dated 03.08.2005, a new agreement dated 19.09.2005 was executed between the parties and as per above agreement, the appellant agreed to sell his land to respondent at the rate of ₹88,50,000/ ₹88,50,000/- per acre. In the above legal notice, it was also mentioned that the parties also agreed that the appellant will execute first sale deed in favour of the respondent after four months from the date of issuance of notification by the government regarding the addition of the land of appellant in the limits of municipal council, Kharar. In the above legal notice, it was also mentioned by the respondent that the government has already issued notice qua land in dispute on 20.02.2006 in respect of the land measuring 2 Kanal 14 marlas. The appellant sent a rejoinder dated 12.07.2006 Ex.D3 to the respondent wherein it was stated that he has received additional amount of ₹3,96,000/ ₹3,96,000/- which was to be adjusted in the first sale deed whereas the remaining earnest money of ₹20 lacs was to be adjusted in the last sale deed since there was no such condition in the agreement. The appellant also stated that the total price of land measuring 2 kanal - 14 marla comes out to be ₹30,05,285/- out of which ₹3,96,000/- have already been received by him as additional amount and he is ready to execute the sale deed after receiving 26,04,000/- from the respondent. He also stated that he is in dire need of money for getting the sale deed executed from the person persons with whom he has entered into an agreement to sell for purchasing land and under these circumstances, without admitting the execution of agreement dated 19.09.2005, he is ready to sell his land to

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respondent at the rate of ₹88,50,000/ ₹88,50,000/- per acre. In the above bove notice, the appellant also requested the respondent to come present in the Tehsil Comlpex, Kharar on 24.07.2006 alongwith balance sale consideration for execution and registration of first sale deed and it was also mentioned in the above notice that iin case, the respondent failed to come present in the above office on 24.07.2006, agreement dated 03.08.2005 and 19.09.2005 shall stand cancelled and earnest money will be forfeited. Thereafter, on 24.7.2006, the respondent did not turn up in the office of the Sub Registrar, Kharar whereas the appellant appeared in the above office and got marked his presence through affidavit Ex.D4. From documents Ex.D1 to Ex.D3, it becomes clear that respondent was not ready and willing to perform his part of the contract. He has not produced any evidence on record to establish that he was having sufficient amount to get the sale deed executed from the appellant. On the other hand, the appellant has examined DW2 Jaiteg Singh, who was Director of respondent company in the year ar 2005 and through whom the suit was filed by the respondent in the year 2008. Above witness clearly stated that after the execution of agreement to sell in question, the sale deed could not be executed because there was slump in market and respondent com company had no money. The statement of above witness clearly shows that the respondent company was not having sufficient funds to get the sale deed executed.

18. The respondent got presence of its representative marked in the office of the Executive Magistra Magistrate through affidavit Ex.P11/1 on 20.06.2007 and on 20.02.2008 through affidavit Ex.P12/1. As respondent failed to get the sale deed executed on 24.07.2006 i.e. the date fixed in the reminder Ex.D3, the appellant was not required to appear in the office of the Sub Registrar either on 20.06.2007 or on 20.02.2008 and in view the express terms of agreement dated 03.08.2005 and 19.09.2005, above agreements got automatically cancelled and the earnest money got forfeited. On the one hand, the learned trial court hhas observed that the respondent was not ready and willing to perform its part of the contract, as such, the relief of specific performance was not granted to the respondent but on the other hand, the relief of recovery of earnest money has been granted to the respondent. As the respondent was not ready and willing to perform its part of the contract, in

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view of the express provisions of agreement to sell dated 03.08.2005 and 19.09.2005, the earnest money was liable to be forfeited. Moreover, in the plaint, the respondent has not claimed the alternative relief, so the learned trial court was not competent to grant above relief to the respondent. Reliance in this regard placed on cases titled as Surmukh Singh Vs. Swaran Singh (supra) and Harish Kumar and otherss Vs. Mohinder Singh and others (supra) (supra)."

16. Learned counsel for the plaintiff has very candidly admitted

before this Court that there were specific terms and conditions in the

agreements in question as per which failure to execute the sale deed

would automatically entail cancellation and forfeiture of earnest

money.Learned arned counsel for the appellant appellant-plaintiff is also unable to

dispute or controvert the above said evidence/findings or give any

satisfactory tory explanation for the same.

17. In view of the above facts and irrefutable evidence on

record,, I find that there is no infirmity in the impugned judgment and

decree dated 5.3.2019 passed by the learned 1st Appellate Court.

18. As such, the present appealss are dismissed.

19. Pending application(s) if any also stand(s) disposed of.

20. A photocopy of this order be placed on the file of other

connected case.

17.01.2025                                           ( NIDHI GUPTA )
rishu                                                     JUDGE

             Whether speaking/reasoned Yes/No

             Whether Reportable                Yes/No




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