On January 13, 2023, the Punjab and Haryana High Court, observed that if an agreement in question was executed by the joint holders of the property jointly and they accepted the earnest money jointly, acceptance of a part of the sale consideration by one of them subsequently, could not said to be in a person’s individual capacity.
Brief Facts:
A suit for specific performance of an agreement to sell dated 24.02.2011 for the remaining half share in the suit property/residential house, was filed by the respondents/plaintiffs. The agreement to sell was voluntarily executed by the appellant/defendant along with his brother in favour of the respondents on receiving the earnest money of Rs. 7 lakhs. The target date for execution of the sale deed was fixed as 30.11.2011. On that date, due to inter se dispute between the two brothers/executants, the sale deed was not executed. Vikas Kumar, appellant’s brother accepted the balance sale consideration of 6 lakh from the respondents on 13.01.2012, which was endorsed by him at the reverse of the agreement to sell in the presence of witness Deepak Kumar. The respondents served a legal notice dated 28.03.2012 to both the brothers calling upon them to execute the sale deed in terms of the agreement to sell, giving them a week’s time to do so but they did not execute the same.
The presence of the respondents was got marked before the Sub-registrar by way of an affidavit of presence dated 09.04.2012. Thereafter, they met both the brothers and agreed to perform their part of the contract. On 11.04.2012, a sum of 3 lakh was paid to Vikas Kumar, appellant’s brother vide cheque bearing No.22690. A receipt to that effect was issued on the reverse of the agreement to the plaintiffs by him. On 18.04.2012, only the appellant’s brother, executed the sale deed of his half share in the suit property and got it registered in a part performance of the agreement to sell executed in favour of the respondents by both the brothers. The appellant, refused to do so leading to the institution of the suit in question. The judgments of the trial court and the lower appellate court were against the appellants, hence giving rise to the present appeal.
Contentions of the Appellant:
The counsel for the appellant submitted that there was no readiness and willingness on the part of the respondents to perform their part of the transaction, and they failed to make a payment of the balance sale consideration for execution of the sale deed on the date fixed, i.e., 30.11.2011 leading to a forfeiture of the earnest money. It was further submitted that the respondents were not able to establish their financial capability to pay the balance sale consideration on that date. Moreover, Merely because a part of the sale consideration was accepted by his brother, it could not be said that he would also be bound by the same, or that the time for execution of the sale deed would stand extended by an endorsement made by his brother Vikas Kumar after receiving the part sale consideration. Additionally, the legal notice was issued only to his brother Vikas Kumar and not to him.
Observations of the Court:
The Hon’ble court observed that although the payment of a part of the sale consideration amounting to 6 lakh was received by one of them, i.e., the defendant’s brother Vikas Kumar, on 13.01.2012, and another sum of 3 lakh was also received by him on 11.04.2012, still it could not be said the same was in his individual capacity, and would not bind the appellant. Moreover, as the agreement in question was executed by both of them jointly and they accepted the earnest money jointly, acceptance of a part of sale consideration by one of them subsequently, could not be said to be in that person’s individual capacity. It would bind both of them as they remain joint holders of the suit property, he two were not separate legal entities.
The court further observed that there was no evidence of any overt act on the part of the appellant to dispel the fact of his being the joint holder of the suit property or being bound by the agreement to sell. Additionally, the appellant in his cross-examination admitted that after execution of the agreement to sell, there arose a dispute between him and his brother. It could not be said that the respondents, failed to perform their part of the agreement, they established their financial capabilities and readiness and willingness by purchasing half share of the suit property and filing the suit in question seeking specific performance against the defendant.
The Decision of the Court:
The appeal was dismissed and the judgments passed by the trial court and the lower appellate court were upheld.
Case Title: Narinder Kumar Vs. Balram Kumar and another
Coram: Hon'ble Justice Tribhuvan Dahiya
Case No.- RSA No.2481 of 2022 (O&M)
Advocate for Appellant: Mr. Vishal Aggarwal
Advocate for Respondent no. 2: Mr. Akhil Ahuja
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