Delhi District Court
Inderjeet Arya vs Ts Chowdhary Others on 13 March, 2026
IN THE COURT OF DISTRICT JUDGE-06, SOUTH EAST
DISTRICT, SAKET COURTS: NEW DELHI
Presiding Judge: Neha, DHJS
CNR No. DLSE01-000065-2008
CS DJ 9546/2016
In the matter of:-
Sh. Inderjeet Arya
S/o Late Sh. Jagdish Chander
R/o H.No. 1/D, Tower-B,
Viceroy Park, Thakur Village
Kandivali East
Mumbai-400101. ...Plaintiff
Versus
1. Sh. T.S. Chowdhary
S/o Ch. Harnam Singh
2. Smt. Satwinder Kaur
W/o Sh. T.S. Chowdhary
Both residents of:
A-602, Rishi Apartment,
Alaknanda, New Delhi-110019. ...Defendants
Date of Institution : 26.11.2008
Date of concluding Final Argument : 11.02.2026
Date of judgment : 13.03.2026
JUDGMENT
1. Vide this judgment, this Court shall decide suit filed by the plaintiff for Specific Performance of Agreement to Sell and Purchase dated 20.10.2007, declaration, recovery of possession, CS DJ 9546/16 Page 1 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
arrears of rent, mesne profits / damages and permanent injunction.
2. Brief facts as per the plaint are as under:-
2.1. The plaintiff (purchaser) had entered into an agreement to sell and purchase dated 20.10.2007 (herein referred to as 'agreement') with the defendant no. 1 (seller) in respect of flat bearing No. A-602, Block-A on sixth floor, Rishi Apartment, Alaknanda, New Delhi-110019 (herein referred to as 'suit property') alongwith its proportionate undivided and indivisible rights/share in the land underneath the said property together with the right to use / avail common areas like entrance, passages, stair case, terrace or use of sewer connection and common overhead water tank and facilities provided in the building and easements attached thereto etc. At the time of entering into the said agreement, the defendant no. 1 conveyed to the plaintiff that the defendant no. 1 is absolute owner of the suit property and he had full authority and right to deal with the same.
The defendant no. 1 had agreed to sell the suit property to the plaintiff for a total consideration of Rs. 50 lakhs which was paid by the plaintiff to the defendant no. 1 by way of account payee cheques prior to signing of the said agreement and the same were duly cleared on their presentation. The defendant no. 1 issued a separate receipt in proof of acknowledgment of Rs. 50 lakhs in favour of the plaintiff.
2.2. The actual, vacant and physical possession of the suit property alongwith original documents of its erstwhile CS DJ 9546/16 Page 2 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
owner(s) were handed over to the plaintiff by defendant no. 1 on 20.10.2007. It was further agreed that the defendant no. 1 will get the suit property mutated, transferred and substituted in favour of the plaintiff and execute / sign all relevant documents in favour of the plaintiff as and when required in future, without demanding any charge. The defendant no. 1 duly executed receipt, possession letter, Indemnity Bond, Will, Affidavit and GPA in favour of the plaintiff on 20.10.2007 to complete the transaction.
2.3. After handing over physical possession of the suit property to the plaintiff, the defendant no.1 inquired from plaintiff whether the suit property shall be used as residence by plaintiff and the plaintiff informed the defendant no. 1 that he had purchased the suit property for investment purposes and desired to let out the same to earn rent. The defendant no. 1 expressed his willingness to take the suit property on rent. The defendant no. 1 claimed that it would take some time for him to find a suitable accommodation and he requested the plaintiff to let out the suit property for a period of eleven months and by that time, the defendant no. 1 will find a suitable accommodation. Believing upon the defendant no. 1, the plaintiff agreed to let out the suit property to the defendant no. 1 on a monthly rent of Rs. 23,000/- for a period of eleven months. The plaintiff and defendant no. 1 entered into a rent agreement on 20.10.2007 in which it was inter-alia agreed by the parties that the period of tenancy would be for 11 months from 01.11.2007 to 30.09.2008.
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2.4. The plaintiff and the defendant no. 1 in the course of time had developed healthy friendship. The defendant no. 1 informed the plaintiff that he had suffered certain business losses and to cover up its outstanding liabilities, he needed to borrow money from market as loan on interest. The defendant no. 1 pleaded that in case the plaintiff helped him financially, it would be of great help to him. The defendant no. 1 requested the plaintiff to lend him a sum of Rs. 60,00,000/- as loan on interest. In good faith, the plaintiff agreed to give a sum of Rs. 60,00,000/- as loan to defendant no. 1. The defendant no. 1 took a cash loan of Rs. 60,00,000/- from the plaintiff and had issued six post dated cheques of Rs. 10,00,000/- each towards return of the said loan from the bank account maintained in the name of his company M/s Richfields Developers Private Limited, payable on Centurion Bank of Punjab Limited, Alaknanda, New Delhi-110019. None of the cheques was encashed on presentation, however the defendant no. 1 returned a sum of Rs. 10,00,000/- to plaintiff out of loan of Rs. 60,00,000/-. The plaintiff had already taken a separate legal recourse for recovery of unpaid loan amount.
2.5. The defendant no. 1 shockingly and in utter disregard to his promises has failed to meet with his commitment and has neither paid monthly rent of Rs. 23,000/- nor returned the unpaid loan amount to the plaintiff. Whenever the plaintiff reminded the defendant no. 1 to return his loan amount and to pay the rent of the suit property, the defendant no. 1 avoided the plaintiff on one pretext or another. On persuasions made by the CS DJ 9546/16 Page 4 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
plaintiff, the defendant no. 1 informed that as and when he would be having sufficient funds, he would make the payment. The defendant no. 1 was unable to give any satisfactory reply to the plaintiff.
2.6. The defendant no. 1 has not paid monthly rent to the plaintiff from the very inception of tenancy and ultimately the rent agreement executed on 20.10.2007, expired on 30.09.2008. After expiry of the rent agreement on 30.09.2008, the defendant no. 1 is an unauthorized occupant in the suit property and have no right to remain in suit property.
2.7. The plaintiff made various requests to the defendant no. 1 to vacate the suit property and pay the agreed monthly rent of Rs. 23,000/- and return the unpaid loan amount. The plaintiff notified the defendant no. 1 vide legal notice dated 04.09.2008 demanding to vacate the suit property, to pay agreed monthly rent of Rs. 23,000/- and to return the unpaid loan amount to plaintiff. The aforesaid legal notice was duly served upon the defendant No. 1. However despite receipt of the same, the defendant no. 1 did not adhere to the requisitions made by the plaintiff in aforesaid legal notice. The defendant no. 1 had sent a reply to plaintiff dated 24.09.2008 in which the defendant no.1 claimed that the suit property is a H.U.F. Property of which the defendant no. 1 was one of the share holder and he raised false and wrong claims and mentioned ill motivated and malafide assertions.
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2.8. The plaintiff, on receipt of reply from the defendant no. 1, remained under shock and went to the locality, where suit property is situated. He has come to know that the defendant no. 1 has already sold the suit property to his wife i.e. defendant no. 2 by a registered sale deed. The plaintiff obtained the certified copy of the sale deed executed by the defendant no. 1 in favour of the defendant no. 2 and confronted the defendants with a certified copy of the sale deed of suit property. The plaintiff requested the defendants to peacefully handover physical vacant possession of suit property and get the sale deed dated 04.06.2008 cancelled.
2.9. In terms of agreement to sell and purchase dated 20.10.2007, the defendant no. 1 was also required to mutate, transfer and substitute the suit property in favour of plaintiff. The defendant no. 1, instead of performing his part of obligations, has malafidly executed a sale deed in respect of the suit property in favour of the defendant no. 2/his wife, which is liable to be declared null and void ab initio. The plaintiff has in fact performed his part of obligations qua the said agreement. Defendant no. 1 is required to perform his part of obligations in terms of agreement to sell and purchase and accordingly, the plaintiff is entitled to a decree of specific performance against the defendant no. 1 requiring defendant no. 1 to specifically perform his part of obligations in terms of agreement to sell and purchase dated 20.10.2007 and consequently directing the defendant no. 1 to execute registered sale deed in respect of the suit property in favour of the plaintiff.
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2.10. The defendants are intending to create a third party interest in suit property by sub-letting, assigning or part with possession of the suit property to any third person and for the same purpose, the defendants have approached property dealers. Hence, the plaintiff has filed the present suit seeking following reliefs:-
a) Pass a decree for specific performance in favour of the plaintiff and against the defendant no. 1 thereby directing the defendant no. 1 to specifically perform his part of obligations as detailed in agreement to sell and purchase dated 20.10.2007 entered between the plaintiff and defendant no.1 and consequently execute and register the Sale Deed in respect of the suit property.
b) Pass a decree in favour of the plaintiff and against the defendants of declaration by declaring the sale deed dated 04.06.2008 executed by the defendant no. 1 in favour of defendant no. 2 registered with the Sub Registrar of properties, Delhi vide document no. 8,634 on page 101 to 112 dated 04.06.2008 as null and void and is of no consequence any more.
c) Pass a decree for possession in favour of the plaintiff and against the defendants thereby directing the defendants to hand over the vacant and peaceful possession of the suit property.
d) Pass a decree in favour of the plaintiff and against the defendants for recovery of arrears of rent for Rs. 2,53,000/- being monthly rent @ Rs. 23,000/- per month which was remain unpaid from 01.11.2007 till 30.09.2008.
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e) Pass a decree for damages/mesne profits in favour of the plaintiff and against the defendants for illegal use and occupation of the suit property at the rate of Rs. 30,000/- per month with effect from 01.10.2008 till 31.10.2008.
f) Pass a decree for pendentelite and future damages/mesne profits in favour of the plaintiff and against the defendants for illegal use and occupation of the suit property at the rate of Rs. 30,000/- per month with effect from filing of the present suit till the date of handling over and delivering back the vacant, actual, peaceful and physical possession of the suit property to the plaintiff.
g) Pass a decree in favour of the plaintiff and against the defendants for permanent injunction thereby restraining the defendants, their agents or representatives from selling, assigning, alienating, creating any third party interest or in any other manner transferring, parting with the suit property of its any portion to any person.
3. Summons were issued to both defendants. Both defendants have contested the case and filed their separate written statement.
4. The defendant no.1 has contested the suit on the following grounds:-
4.1. The suit filed for specific performance of agreement is not maintainable as no averments have been made that the plaintiff has performed or has always been ready and CS DJ 9546/16 Page 8 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
willing to perform the essential terms of contract. The allegations made in the plaint that the plaintiff has paid a sum of Rs 50 lakhs by means of three account payee cheques for purchase of the suit property is false.
4.2. The plaintiff has filed this suit allegedly on the basis of agreement to sell and power of attorney which is unstamped and unregistered and these documents being not admissible in law, the present suit filed on the basis of said documents is not liable to be dismissed.
4.3. The defendant No. 1 has never agreed to sell the suit property for a sum of Rs.50,00,000/-. The defendant no.1 never met the plaintiff till date. Sh. Manoj Kumar had introduced the defendant No.1 to one Sh. R.R.Kumar, Managing partner of M/S Trimurti Constructions Developers and Builders. Sh. Manoj Kumar helped the defendant No.1 to get the sub-contract for the construction of four barracks of C.R.P.F at Greater Noida, U.P. and for that Sh. Manoj Kumar asked the defendant no.l to arrange Rs. 32 Lakhs for security / quotation money to be submitted for getting the sub-contract and Sh. Manoj kumar assured to arrange the working capital of Rs.50,00,000/-.
4.4. The defendant No.1 believed and acted on the assurance of Sh. Manoj Kumar and arranged Rs.32,00,000/- and deposited the same as security money with M/s Trimurti Constructions. Apart from that, the defendant No.1 spent Rs. 18,00,000/- on office at site, laboratory and initial dumping of building material. Sh. Manoj Kumar only arranged CS DJ 9546/16 Page 9 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
Rs.40,00,000/- and the same was given to the defendant No.1 by way of one cheque of Rs.20,00,000/-, and two cheque of Rs.10 Lakhs each on different date, respectively. The said cheques were issued by the plaintiff who was unknown to the defendant No.1.
4.5. Sh. Manoj Kumar prevailed upon the defendant No.1 to execute some property documents against Rs.40,00,000/- in the name of the plaintiff who was financing the funds to Sh. Manoj Kumar to be given to the defendant No.1 to be used as a working capital in the business. The defendant No.1 executed the documents of his flats in name of the plaintiff and at time of execution of documents, Sh. Manoj Kumar assured the plaintiff that this execution of documents is simply a security and the moment, he would pay the profits out of the business being carried on and these documents would be given back to the defendant no.1 immediately. All these documents were blank when signed and given to Sh. Manoj Kumar. It was also stated by Sh. Manoj Kumar that since these documents are neither stamped nor registered, they are not admissible and therefore, these documents have no value in law and property remain the property of the defendant No.1.
4.6. The defendant No.1 only received Rs.40,00,000/- and out of Rs.40,00,000/-, the defendant No.1 has already returned Rs.15,00,000/-, (i.e. Rs. 10,00,000/- by means of draft dated 12.03.2008 and Rs.5,00,000/- by cash through Sh. Manoj Kumar who signed the receipt) in the name of the plaintiff.
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4.7. The suit filed for specific performance on the ground that total sum of Rs.50,00,000/- has been given is on the face of it false. The amount of only Rs. 40,00,000/- was given for carrying on the business out of which Rs.15,00,000/- has already been returned to the plaintiff.
4.8. Sh. Manoj Kumar asked the defendant no. l to prepare a project report with regard to business expenditure and profit which was prepared by the defendant No. 1 and the same was sent to the plaintiff on his FAX number 02266949929 on 13.10.2007.
4.9. Sh. Manoj Kumar, in a very calculated manner, came to the defendant No.1 in his office at A-602, Rishi Apartments, Alakhananda, New Delhi and said that the plaintiff was asking for profit into the business also and therefore, the defendant No.1 had to issue some cheques just for security to assure that the defendant no.1 will repay the amount of profit against the amount of Rs.25,00,000/- contributed by the plaintiff.
4.10. Since the defendant No. 1 was trapped by Sh. Manoj Kumar and the plaintiff and therefore, he had no option but to issue cheques to Sh. Manoj Kumar in favour of the plaintiff, hence the defendant No.I issued six cheques of Rs.10,00,000/- each dated blank with the assurance of Sh. Manoj Kumar that these cheques will not be used and were being kept as additional security. The defendant no.1 had no authority to issue cheques of the company or on behalf of the company.
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4.11. For carrying on business in partnership with the defendant no.1, the plaintiff only issued three cheques amounting to Rs. 40 Lacs out of which Rs. 15 Lacs has already been returned to the plaintiff through Sh. Manoj Kumar on 12.03.2008 by way of DD of Rs. 10 Lacs and Rs. 5 Lacs in cash and Sh. Manoj Kumar had issued receipt on behalf of the plaintiff. No amount is payable to the plaintiff. The balance amount of Rs. 25 Lacs was put into partnership of the plaintiff to be carried between the plaintiff through Sh. Manoj Kumar and the defendant no.1. The agreement dated 20.10.2007 is unregistered, unstamped and inadmissible in evidence. The defendant no.1 has denied the averments made in the plaint.
5. The defendant no.2 has contested the present suit on the following grounds:-
5.1. The suit is bad for mis-joinder of necessary party. The defendant no. 2 has no privity of contract with the plaintiff. The defendant no. 2 is a bonafide purchaser of the suit property. The property was purchased after inspecting the record of the Sub-Registrar and other authorities and after going through the same, the defendant no. 2 purchased the property.
5.2. The plaintiff had not disclosed the true facts that he had filed a suit for declaration, recovery of possession, arrears of rent, mesne profits, permanent injunction. In the said suit, there was no prayer for specific performance of agreement to sell, accordingly the plaintiff moved an application on 21.01.2019 for amendment of the suit under Order 6 Rule 17, this CS DJ 9546/16 Page 12 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
application dated 21.01.2009 was supported by an affidavit executed at Bombay dated 17.01.2019 where it was mentioned that the plaintiff is aware of the facts of the case and filed the application u/s 6 rule 17 CPC for seeking relief of amendment of the suit. The amendment could not be allowed because the affidavit was dated 17.01.2009 whereas the application was dated 21.01.2009.
5.3. The suit filed for specific performance of agreement is not maintainable as no averments have been made that the plaintiff has performed or has always been ready and willing to perform the terms of contract.
5.4. The defendant no. 2 has always been in possession of the property and possession was never handed over to the plaintiff by defendant no. 1. Therefore, the allegation that the plaintiff is in possession of the property is false, because the defendant no. 2 has already sold the suit property vide sale deed dated 03.07.2009 and handed over the possession to the purchaser Sh. Kamal Deep Mainrai and Mrs. Anita Mainrai. Therefore, the suit filed by the plaintiff is not maintainable and has become infructous.
5.5. The defendant no. 2 purchased the suit property bonafide after verifying from the sub-registrar office and other government authorities regarding sale of the property and after satisfying that the property has not been sold purchased the same on 04.06.2008 and at that time, there was no stay from any Court for sale of the property. The documents on which the CS DJ 9546/16 Page 13 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
plaintiff is relying has no value in eye of law and cannot form the basis of any sale between the plaintiff and the defendant no. 1 and does not give any ownership rights to the plaintiff on the basis of these documents. The purchase of the property by defendant no. 2 is a legal transaction and the same cannot be cancelled on the basis of documents which are inadmissible, unstamped, unregistered and therefore, no suit is maintainable on the basis of such documents. The averments made in the plaint are denied by the defendant no. 2.
6. Replication 6.1. The plaintiff has filed separate replication to the written statement filed by the defendant no. 1 and defendant no. 2 and reiterated the averments made in the plaint and denied the averments made in the written statement of defendant no. 1 and 2.
7. From the pleadings of the parties, the following issues were framed on 19.03.2010 :-
(i) Whether the plaintiff is entitled to a decree of specific performance in terms of the agreement to sell dated 20.10.2007 of suit property bearing no.602, measuring 1482 sq. ft. situated at Rishi Apartment, Alaknanda, New Delhi? OPP
(ii) Whether the plaintiff is entitled to a decree of declaration declaring that the sale deed dated 4.6.2008 executed by defendant no.1 in favour of defendant no.2 as null and void? OPP CS DJ 9546/16 Page 14 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
(iii) Whether the plaintiff is entitled to a decree of possession of the aforenoted suit property as shown and delineated in red colour in the site plan attached to the plaint? OPP
(iv) Whether the plaintiff is entitled to a decree of arrears of rent in sum of Rs.2,53,000/- at rate of Rs.23000/- per month from 1.11.2007 to 30.9.2008? OPP
(v) Whether the plaintiff is entitled to decree of damages/mesne profit at rate of Rs.30,000/- per month with effect from 1.10.2008 till realization? OPP
(vi) Whether the plaintiff is entitled to the interest, if any, on the awarded amount? OPP
(vii) Whether the suit is bad for misjoinder of parties? OPD-2.
(viii) Relief.
8. Plaintiff Evidence 8.1. In order to prove his case, the plaintiff examined himself as PW-1. PW-1 Sh. Inderjeet Arya tendered his evidence by way of affidavit Ex.PW-1/A and relied upon the documents:- (1) Original agreement dated 05.10.1985 as PW1/1 dated 05.10.1985 (already Ex.P1 at the stage of admission- denial), (2) Agreement to sell and purchase dated 20.10.2007 between the defendant no. 1 and the plaintiff is Mark A (mentioned as Ex.PW1/2 in affidavit), (3) Original GPA dated 20.10.2007 executed by defendant no. 1 is Ex.PW1/3, (4) Original receipt dated 20.10.2007 executed by defendant no. 1 is Ex.PW1/4, (5) Original possession letter dated 20.10.2007 executed by defendant no.1 is Ex.PW1/5, (6) Original affidavit CS DJ 9546/16 Page 15 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
dated 20.10.2007 executed by defendant no. 1 is Ex.PW1/6, (7) Original Will dated 20.10.2007 executed by defendant no. 1 is Ex.PW1/7, (8) Original indemnity bond dated 20.10.2007 executed by defendant no. 1 is Ex.PW1/8, (9) Rent agreement dated 20.10.2007 between the defendant no. 1 and plaintiff is Mark B (mentioned as Ex.PW1/9 in affidavit), (10) Original office copy of legal notice dated 04.09.2008 is Ex.PW1/8 (already exhibited as Ex.P10 during admission-denial), (11) Original reply by the defendant no. 1 to legal notice dated 04.09.2008 is Ex.PW1/11 (already exhibited as Ex.P11 during admission-denial), (12) Original certified copy of sale deed dated 04.06.2008 executed by defendant no. 1 in favour of defendant no. 2 is Ex.PW1/12 (already exhibited as Ex.P12 during admission-denial) and (13) Original GPA executed by the plaintiff in favour of Mr. Dilip Kumar Sharma dated 08.10.2008 is Ex.PW1/13.
8.2. The plaintiff also examined his brother Sh. Rajender Singh as PW2, who tendered his evidence by way of affidavit Ex.PW-2/A. PW-1 and PW-2 were cross examined by Ld. Counsel for defendants. PE was closed vide order dated 23.02.2024.
9. Defendant Evidence 9.1. In order to prove his case, the defendant no.1 examined himself in defence as DW-1. DW-1 Sh. T.S. Chowdhary tendered his evidence by way of affidavit Ex.DW1/A and relied upon the documents:- (1) Certified copy of judgment CS DJ 9546/16 Page 16 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
dated 07.06.2018 passed by the Court of Ld. ADJ, South-East, Saket in Suit RBT No. 10283/16 titled as Inderjeet Arya Vs. T.S. Chowdhary as DW-1/1, (2) photocopy of agreement to sell and purchase, GPA, possession letter, Will, Indemnity Bond, rent agreement, all dated 18.10.2007 is Mark A to Mark F, (3) copy of draft of Rs. 10 lakh is Mark G, (4) copy of receipt of cash Rs. 5 lakh signed by Sh. Manoj Kumar is Ex.DW1/9 (OSR), (5) copy of undated cheque is Ex.DW1/10 (OSR), (6) copy of statement of account of the defendant no. 1 of Centurion Bank of Punjab showing payment of 4 cheques totaling Rs. 40,00,000 is Mark H, (7) copy of feasibility report alongwith business association contract in respect of agreement between M/s Richfield Developers Pvt. Ltd and M/s Trimurti Construction Developers and Builders with copy of fax is Mark I, (8) Photocopy of money spent till 21.12.2007 on CRPF project alongwith photocopy of sending report by fax is Mark J, (9) Copy of complaint to Addl. Commissioner, Income Tax against Sh. Inderjeet Arya is Mark K, (10) Reply dated 03.11.2008 of Sh. Abdul Samad, Advocate to legal notice sent by the plaintiff through his advocate is Mark L. 9.2. DW-1 was cross-examined by the Ld. Counsel for the plaintiff. DE was closed vide order dated 14.10.2025.
10. Final arguments were addressed by Ld. Counsels for the parties. Written arguments were also filed on behalf of the plaintiff.
11. Arguments on behalf of the plaintiff CS DJ 9546/16 Page 17 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
11.1. Ld. Counsel for the plaintiff would argue that total sale consideration for the suit property was Rs. 50 lacs and that the consideration was paid vide cheques by the plaintiff and thereafter, the defendant no.1 had executed agreement to sell and purchase, possession letter, GPA, receipt, affidavit, indemnity bond all dated 20.10.2007. Thereafter, the defendant no. 1 had requested the plaintiff to take the property on rent and the property was given on rent at monthly rent of Rs. 23,000/-. In his evidence, the plaintiff has produced all the original documents i.e. agreement to sell, GPA, receipt, possession letter, affidavit, Will, indemnity bond and rent agreement. The plaintiff was cross-examined by the Ld. Counsel for the defendants and during cross-examination of the plaintiff, suggestion was given to the plaintiff that there was no occasion for handing over possession on 20.10.2007 as entire payment of Rs. 50 lacs was not yet paid. PW-2 (brother of the plaintiff) was also cross-examined and during cross-examination of PW-2 also, suggestion was given to him that he did not have any personal knowledge about the property transaction between the plaintiff and the defendant. Further, suggestion has been given to PW-2 " It is correct that I visited the Tis Hazari with regard to transaction of suit property. I visited there on on 20.10.2007 with regard to transaction of suit property." The cross-examination of PW-1 and PW-2 conducted by Ld. Counsel for defendants is an admission on the part of the defendants that there was property transaction between the plaintiff and the defendant no. 1 and that the defence taken by the defendant no. 1 that there was no property transaction is false.
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11.2. Ld. Counsel for the plaintiff would further argue that it is settled that an unregistered document is not admissible in evidence to enforce the document but it can be seen for collateral purpose as provided in Section 49 of Registration Act. The agreement to sell and purchase can be seen for collateral purpose to determine the relation between the parties. The plaintiff has performed his part under the agreement and the defendant no.1 has not only failed to perform his part under the agreement but he also violated the agreement by selling the suit property to the defendant no.1. Hence, the suit of the plaintiff may be decreed as prayed.
11.3. Ld. Counsel for the plaintiff has relied upon the judgments passed in the matter 'S.Kaladevi vs V.R.Somasundaram & Ors on 12.04.2010, Civil Appeal No. 3192/2010, 'Ravi Somani Vs. Sandeep Tayal CS (OS) 2585/2014 and 'A.K.Pathak, J. IA No. 10259/2015 in CS (OS) 2585/2014.
12. Arguments on behalf of the Defendants 12.1. Ld. Counsel for the defendants would argue that the plaintiff has not stated in the plaint that he is ready and willing to perform his obligation under Agreement to Sell dated 20.10.2007 and in the absence of such specific averment, the plaintiff is not entitled to decree of specific performance. Further, the Agreement to Sell is not duly stamped and therefore, this document is inadmissible in evidence and objection regarding inadmissibility was taken at the time the document was tendered in examination in chief of the PW-1. The plaintiff despite specific CS DJ 9546/16 Page 19 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
order of the Collector of Stamps has failed to deposit the deficient stamp duty on the agreement to sell and rent agreement and both documents are inadmissible in evidence and no relief can be granted to the plaintiff on these documents.
12.2. It is further argued that the Agreement to sell and other documents were signed by the defendant no. 1 only for security purpose to secure the amount of Rs. 40 lakhs which was arranged by Sh. Manoj Kumar for construction of CRPF baracks and these documents were not signed with intent to sell the suit property and the plaintiff has admitted in his cross examination that he has received an amount of Rs. 15 lakhs out of this amount of Rs. 40 lakhs. The testimony of the plaintiff/PW-1 would also prove that these documents were executed only for the purpose of securing amount of Rs. 40 lakhs invested in the CRPF project. The plaintiff has failed to prove his case on preponderance of probability and therefore, the plaintiff is not entitled to any relief and the suit may be dismissed.
12.3. Ld. Counsel for the defendants has relied upon judgment passed in the matter of (1) Om Prakash v. Laxminarayan & Ors., Civil Appeal No. 9032 of 2013 dated 07.10.2013 and (2) Bidyut Sarkar & Anr. v. Kanchilal Pal, Civil Appeal Nos 10509-10510 of 2013 dated 28.08.2024.
Issue-wise Findings of the Court
13. Issue No.1: Whether the plaintiff is entitled to a decree of specific performance in terms of the agreement to sell dated 20.10.2007 of suit property bearing no.602, measuring 1482 sq. CS DJ 9546/16 Page 20 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
ft. situated at Rishi Apartment, Alaknanda, New Delhi? OPP- Whether the plaintiff is entitled to a decree of specific perfor- mance in terms of the agreement to sell dated 20.10.2007 of suit property bearing no.602, measuring 1482 sq. ft. situated at Rishi Apartment, Alaknanda, New Delhi? OPP 13.1. The onus to prove this issue was upon the plaintiff.
13.2. The claim of the plaintiff is that he entered into an agreement to sale and purchase of the suit property with the defendant no.1 on 20.10.2007 for a total sale consideration of Rs. 50 Lacs and that he had paid the said amount by way of 3 cheques as mentioned in the agreement to sell itself. It is also claimed by the plaintiff that the defendant no.1 had handed over physical possession of the suit property to him and also executed the possession letter, receipt, Will, GPA, Indemnity Bond, all dated 20.10.2007. Thereafter, the defendant no.1 asked the plaintiff to give the suit property on rent. The plaintiff agreed and he gave suit property on rent to the defendant no.1 and rent agreement dated 20.10.2007 was executed between them.
13.3. The defendant no.1 has not disputed his signatures on the documents. However, he has claimed that he did not intend to create any such documents to sell his property. He has taken defence that the documents were signed as security towards amount of Rs. 40 lacs arranged by one Mr. Manoj Kumar for construction of CRPF barracks and he never intended to sell the suit property to the plaintiff.
CS DJ 9546/16 Page 21 of 42Inderjeet Arya v. T.S Chowdhary & Ors.
13.4. This Court shall first deal with this defence of the defendant no. 1.
13.5. The defendant no. 1 has examined himself as DW1 to prove his defence that the documents were signed only to secure amount of Rs. 40 Lacs taken for construction business. In his cross examination, DW1 has stated, "There is no documentary proof that Sh. Manoj Kumar helped me to get the sub contract for the construction of 4 barrack at CRPF at Greater Noida, U.P.....It is correct that I signed the documents properly i.e. agreement to sell and power of attorney as mentioned in my evidence affidavit Ex. DW1/A....It is correct that contract of construction of four CRPF barracks was got to me by Mr. Manoj Kumar......It is correct that Mr. Manoj Kumar assured me that he would manage working capital of Rs. 50,00,000/-...... It is correct that Mr. Manoj Kumar as per understanding was entitled for sharing the profit of construction work....The responsibility of construction of barracks was of Mr. Manoj Kumar and myself and we both were entitled for profits and losses.... I did not ask Mr. Manoj Kumar that it was his responsibility to repay the money of Rs. 40,00,000/- as he himself arranged for the same. (Vol. Naturally it was responsibility of Mr. Manoj Kumar to repay back the money of Rs. 40,00,000/- as he had himself managed the same......I did not have any liability towards the amount of Rs. 40,00,000/-. The documents I executed for security was for the satisfaction of Mr. Manoj Kumar and they were not for any specific surety for anything." Specific question was put to the defendant no.1, "As per you Rs. 40,00,000/- was CS DJ 9546/16 Page 22 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
contribution of Mr. Manoj Kumar in the construction work of barracks, what is the reasons you executed documents of your flat as security in favour of plaintiff. What do you have to say?"
and the defendant no.1 avoided to answer this question and gave evasive reply saying, "I crossed all the original documents and then signed for satisfaction of Mr. Manoj Kumar."
13.6. The defendant no. 1 has not denied his signature on the documents i.e. Agreement to Sell, GPA, receipt, possession letter, affidavit, Will, Indemnity bond, all dated 20.10.2007. The defence of defendant no. 1 that he had crossed all the documents before he signed the same is apparently false as the original Agreement to Sell, GPA, receipt, possession letter, affidavit, Will, Indemnity bond, all dated 20.10.2007 have been produced by the plaintiff and the same are not crossed anywhere.
13.7. It is also clear from the testimony of DW1 Sh. T. S. Choudhary that Mr. Manoj Kumar was partner in the construction of CRPF baracks, Mr. Manoj Kumar had share in profit and loss of that project, the defendant no. 1 had to arrange the security deposit of Rs. 32 lakhs while Mr. Manoj Kumar had to arrange the working capital of Rs. 50 lakhs for that project and Mr. Manoj Kumar had arranged Rs. 40 lakhs for that project from the plaintiff. If Mr. Manoj Kumar had arranged amount of Rs. 40 lakhs from the plaintiff for construction business and said Sh. Manoj Kumar was also a partner in profit and loss with the defendant no.1, there is no reason as to why the defendant no. 1 would execute GPA, Agreement to Sell etc. in respect of his CS DJ 9546/16 Page 23 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
property to secure amount of Rs. 40 lakhs which was arranged by Mr. Manoj Kumar. Since the defendant no.1 and Mr. Manoj Kumar were partners in the construction business, it was equal responsibility of Mr. Manoj Kumar and the defendant no.1 to arrange funds for the project. Even on specific question to DW-1 / Sh. T. S. Chaudhary as to why he executed documents of his flat when Rs. 40 Lacs was contribution of Mr. Manoj Kumar in the project, the defendant no.1 did not answer it. The testimony of DW-1 castes doubt on defence of the defendant no.1 that he had signed the documents to secure amount of Rs. 40 Lacs arranged by Mr. Manoj Kumar as working capital for CRPF project.
13.8. The defendant no.1 has failed to prove, on preponderance of probability, that he had signed the documents as security to assure return of amount of Rs. 40 lacs arranged by Mr Manoj Kumar as working capital for CRPF project. Further, Mr. Manoj has not been examined by the defendant no. 1 as witness to prove that the documents were executed only to secure amount of Rs. 40 lakhs. In these facts and circumstances, this Court holds that the defendant no. 1 has not been able to prove his defence, on the preponderance of probability, that Agreement to Sell, GPA, receipt, possession letter, affidavit, Will, Indemnity bond, all dated 20.10.2007 were signed only as security for amount of Rs. 40 lakhs which was arranged by Mr. Manoj Kumar for CRPF project. Hence, the plaintiff has proved, on preponderance on probability, that the defendant no.1 had CS DJ 9546/16 Page 24 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
executed those documents with intention to sell the suit property to the plaintiff.
13.9. Be that as it may, in a suit for specific performance, the plaintiff is not only entitled to prove execution of the agreement, he is also required to prove that he had capacity to perform his part of the agreement as well as he was always ready and willing to perform his part.
13.10. As per the plaintiff, the consideration amount of the suit property was Rs. 50 Lacs which was paid by him by way of three cheques dated 19.10.2007. However, the material on record has proved that the plaintiff had only paid Rs. 40 Lacs to the defendant no.1 by way of three cheques. The plaintiff himself has admitted the said fact in the cross-examination. Question was put to PW1, "Is it correct that you had only paid sum of Rs. 40 lac to the defendants till date?" to which plaintiff / PW-1 has answered, "I had initially given three cheques. Two cheques were of Rs. 20 lac each and one cheque was of Rs.10 lac. Subsequently against one cheque of Rs. 20 lac, Sh. T. S. Choudhary asked for two cheques of Rs. 10 lac each which I have but I have no idea as to how many of the aforesaid cheques he deposited for clearance." PW-1 has further stated, "It is correct that sum of Rs. 40 lac was shown was credited in account of defendant no.1 in Ex. PW-1/D1. The remaining sum of Rs. 10 lac cheque was cleared from my another bank account in defendant no.1."
CS DJ 9546/16 Page 25 of 42Inderjeet Arya v. T.S Chowdhary & Ors.
13.11. The plaintiff has not produced any other bank account statement except that of PNB account Ex. PW-1/D1 to show that any other payment apart from Rs. 40 lac was credited in the account of the defendant no.1 towards sale consideration of the suit property. It is shown on record that only payment of Rs. 40 lacs was made to the defendant no.1 by the plaintiff, out of total consideration of Rs. 50 lacs. Therefore, as per the plaintiff himself, he had to pay Rs. 10 Lacs more to the plaintiff as balance sale consideration amount.
13.12. The defendant no.1 claimed that he repaid Rs.10 lacs to the plaintiff by way of demand draft and also paid Rs. 5 lacs in cash. The plaintiff admitted receiving of amount of Rs.10 lacs from the defendant no.1 by way of demand draft, but he denied receiving of any cash amount of Rs. 5 lacs from the defendant no.1. The plaintiff also claimed that he had given Rs. 60 lacs in cash to the defendant no.1 as loan and out of said loan amount, the defendant no.1 repaid Rs. 10 Lacs by way of demand draft. The defendant no.1 denied receiving of any such loan of Rs. 60 lacs from the plaintiff. During trial, it has been proved that the plaintiff herein had filed a suit for recovery of Rs. 50 Lacs towards loan vide CS RBT no. 10283/2016 titled as Inderjeet Arya vs. T. S. Choudhary & Anr and the said suit was dismissed by the Court of Ld. ADJ-07, South East District vide judgment and decree dated 07.06.2018. Thus, the plaintiff has failed to prove payment of any cash amount as loan to the defendant no.1. Therefore, the defendant no.1 has proved, on balance of probability, that he had repaid amount of Rs. 10 lacs to the CS DJ 9546/16 Page 26 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
plaintiff, out of payment of Rs. 40 lacs paid by the plaintiff to the defendant no.1 as part sale consideration. Hence, at the time of legal notice dated 04.09.2008, the plaintiff had to pay an amount of Rs. 20 Lacs as balance consideration amount under the agreement to sell.
13.13. It is also one of the defence of the defendant no.1 that the plaintiff did not aver in the plaint that he was ready and willing to perform his obligations under the contract and that he had capacity to perform his part.
13.14. Ld. Counsel for the plaintiff would submit that during cross-examination, the plaintiff has clarified that para no.12 of the amended plaint contains reference that the plaintiff was ready and willing to perform his part of the contract.
13.15. The plaintiff has relied upon para no.12 of the amended plaint in support of his plea that he was ready and willing to perform his part under the agreement. Para no. 12 of the amended plaint is reproduced as under:-
"The plaintiff humbly submits that the defendants are however not in a mood to get the sale deed dated 04.06.2008 cancelled or to handover the peaceful possession of suit property to plaintiff or to pay monthly rent to plaintiff and were/ are willing to adopt a hostile attitude. It has been reliably learnt that the defendants are intending to create a third party interest in suit property by sub-letting, assigning or part with possession of the suit property to any third person and for the same purpose the defendants have approached property dealers. Hence the plaintiff is constrained to file the present suit seeking recovery of possession of suit property, recovery of arrears of rent, mesne profits/damages, declaration and permanent injunction against the defendants and both the defendants are liable for the same jointly and severally."CS DJ 9546/16 Page 27 of 42
Inderjeet Arya v. T.S Chowdhary & Ors.
13.16. Perusal of the para no. 12 of the amended plaint would show that the plaintiff has nowhere stated in the said para that the plaintiff was ready and willing to perform his part by paying the balance amount of Rs. 20 lakhs and that he is ready to pay for stamp paper and other charges for registration of sale deed.
13.17. Initially, the plaintiff had filed the suit for declaration, recovery of possession, arrears of rent, mesne profits/ damages and permanent injunction. Thereafter, the plaintiff filed an application for amendment of plaint which was allowed vide order dated 23.01.2009 and amended plaint was taken record wherein he had prayed for relief of specific performance of agreement to sell and purchase dated 20.10.2007, declaration, recovery of possession, arrears of rent, mesne profits/ damages and permanent injunction.
13.18. Perusal of original plaint and amended plaint would show that in either of the plaint, the plaintiff has not stated that he is ready and willing to perform his part of the contract.
13.19. It is settled position of law that in a suit for specific performance, there should be specific averment and proof that the plaintiff was ready and willing to perform his part under the contract.
13.20. In the case of PYDI RAMANA @ RAMULU DAVARASETY MANMADHA RAO Civil Appeal no. 434/2013 dated 10.07.2024, Hon'ble Supreme Court has reiterated that the plaintiff must aver and prove that he was always ready and CS DJ 9546/16 Page 28 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
willing to perform his part of the contract. The relevant para of the judgment is reproduced as under:-
"At the outset, it requires to be clarified and made clear that in the instant case the amendment brought to the Specific Relief Act by Act 18 of 2018 would be inapplicable. The amendment is prospective in nature and cannot be applied to those transactions which took place prior to amendment.1 In order to prove2 that the plaintiff is entitled to the specific performance as per the law existing prior to amendment, the plaintiff has to establish:
1Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd & Ors (2023) 1 SCC 355] 2Man Kaur v. Hartar Singh Sangha (2010) 10 SCC 512 7 a. that a valid agreement of sale was entered into by the Defendant in his favour; b. that the defendant committed breach of the agreement; and c. that he was always ready and willing to perform his part of the obligations in terms of the agreement. 12. Section 16 of the Specific Relief Act provides certain bars to the relief of specific performance. "16. Personal bars to relief.- Spe- cific 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 of the performance of which has been prevented or waived by the de- fendant. Explanation- For the purpose of clause (c),- (i) where a contract in- volves 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 di- rected by the court; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction."
8 READINESS AND WILLINGNESS NOT PROVED 13. In order to ob- tain a decree for specific performance, the plaintiff must aver and prove that he has performed his part of the contract and has always been ready and willing to perform the terms of the contract which are to be performed by him. Section 16(c) of the Specific Relief Act mandates 'readiness and will- ingness' of the plaintiff to be averred and proved and it is a condition prece- dent to obtain the relief of specific performance. 14. There is a distinction between the terms 'readiness' and 'willingness'.3 'Readiness' is the capacity of the plaintiff to perform the contract which includes his financial position to pay the sale consideration. 'Willingness' is the conduct of the party. In the instant case, even according to the concurrent findings recorded by the courts below, it would emerge that the plaintiff had been able to successfully prove the sale agreement dated 07.06.1993 Ex.A1 on which date Rs.2,005/- was paid by the plaintiff to the defendant. The evidence on record tendered by plaintiff came to be accepted by all the courts and judgments of courts below would also indicate that further amount towards sales consideration CS DJ 9546/16 Page 29 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
in a sum of Rs.17,000/- was paid by plaintiff to defendant on 23.06.1993 and same was endorsed by him. As per the recital in the agreements, the de- fendant was 3His Holiness Acharya Swami Ganesh Dassji v Sit ram Thapar (1996) 4 SCC 526 9 required to get the suit land surveyed and as such the total consideration was agreed to be settled after such survey. On the one hand, the plaintiff contends that defendant never got surveyed the suit land. On the other hand pleadings and evidence of plaintiff is silent on steps taken by the plaintiff as expected of a reasonable person which has not been taken in the instant case namely the plaintiff has not produced any evidence either oral or documentary to establish that there was any demand made by him for the land being surveyed by defendant. No witnesses have been examined on behalf of the plaintiff to establish that at any point of time there has been de- mand made by the plaintiff with the defendant by calling upon him to get the suit land surveyed as agreed under the agreement of sale Ex.A1. It is for the first time after a period of 3 years from the date of agreement Ex.A.1 namely on 30.05.1996 legal notice (Ex.A3) was got issued or in other words plaintiff was silent for a period of 3 years in enforcing of the agreement of sale. It is for this specific reason the trial court while rejecting the prayer for decree of specific performance has recorded a categorical finding to the fol- lowing effect: 21. The terms of the agreement xxx the period of one year. The plaintiff got issued a legal notice on 30.05.1996 Ex.A.3 expressing his readiness to go ahead with the transaction and calling upon the vendors to execute the sale deed. That means nearly for two years after the expiry of one year period. The plaintiff vendee did nothing to act in furtherance of the agreement. Excepting a bald and vague assertion that he was contacting the vendors but they were dodging nothing more is brought on record to satisfy the court that the plaintiff was at all material times interested 10 is in finaliz- ing the deal and showing his readiness and willingness to perform the essen- tial terms of the agreement. Though the suit was filed within the period of limitation, it is not sufficient. In assessing the question of readiness and will- ingness of the party to perform his part of the contract. It highly essential to take into account the long unexplained silence and inaction on the part of the plaintiff. 22. Plaintiff must perform his part of the contract within rea- sonable time. There was total inaction on the part of the plaintiff for 2 ½ years which was not consistent with the terms of agreement. From 6.6.94 to 30.5.96 i.e., for a period of 23 months, plaintiff sat quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of one year, within which he was expected to urge the defendant vendor to get measurements of land and fix the sale price and to tender the balance amount and call upon the defendants to execute sale deed and deliver possession of the property. As rightly pointed out by the trial court, the respondent-plaintiff has not produced any satisfactory ev- idence to prove his readiness and willingness. As regards 'willingness' of the plaintiff to perform his part of the contract, the conduct of the plaintiff warranting the performance has to be looked into. The following conduct of the plaintiff warrants consideration: a. Plaintiff got issued legal notice nearly after two years after the expiry of one year period as prescribed in the CS DJ 9546/16 Page 30 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
agreement. b. Plaintiff has not brought anything on record to prove that he contacted the Defendant after the expiry of one year period and was inter- ested in finalising the deed. c. There was total inaction of the Plaintiff from 06/06/1994 (expiry of one year period) to 30/05/1996 (Date of issuance of legal notice) 11 d. Suit was filed on 09/06/1997 i.e. after a period of more than one year from the date of issuing of legal notice. Said delay has not been sufficiently explained by the Plaintiff. The continuous readiness and willingness is a condition precedent to grant the relief of specific perfor- mance.4 The trial Court has rightly held that plaintiff has not sufficiently ex- plained and proved that he was always ready and willing to perform his part of the contract. As such the High Court and the First Appellate Court had erred in holding that plaintiff had proved his readiness and willingness." (emphasis supplied) 13.21. In the present case, the plaint lacks such specific averment that the plaintiff is ready and willing to perform his obligations under the agreement to sell. Nor only there is no such averment in the plaint, there is no evidence produced by the plaintiff to prove that he was ready and willing to perform his part. At no point of time, the plaintiff has stated that he was ready to pay balance sale consideration and he was ready to bear other charges (stamp paper etc) for registration of sale deed. During the entire proceedings, the plaintiff did not lead any evidence that he had Rs. 20 Lacs ready with him to be paid to the defendant no.1 as balance sale consideration amount and that he had amount to purchase the stamp for registration of the sale deed. There is nothing on record to even suggest that the plaintiff had capacity to perform his part of the agreement and that he was ready and willing to do so. The totality of facts and circumstances do not show that the plaintiff has been ready and willing to perform his part of the contract. Therefore, this Court holds that in such circumstances, the plaintiff is not entitled to discretionary relief of specific performance as prayed by him.
CS DJ 9546/16 Page 31 of 42Inderjeet Arya v. T.S Chowdhary & Ors.
13.22. Further there is one more aspect which is worth mentioning here that vide order dated 03.12.2010, in view of Section 33 of Indian Stamp Act, Original Agreement to Sell dated 20.10.2007 and Original Rent agreement dated 20.10.2007 were impounded by the Court and both original documents were sent to Collector of Stamps for adjudication of stamp duty and penalty, if any to be paid by the plaintiff. Report of Collector of Stamps was received as recorded in the order dated 20.12.2012 whereby the deficient stamp amount payable by the plaintiff calculated by the Collector. The order of Collector of Stamps reads as under:-
"Ref. Case: CS(OS) No. 2470/2008 Shri Inderjeet Arya V/s Sh. TS Chowdhary.
Whereas Hon'ble court vide its order of 3rd Dec. 2010 has impounded two documents namely Agreement to sell and Rent agreement executed between Sh TS Chowdhary R/o A-602, Rishi Apaetments, Alaknanda. New Delhi as first party and Sh Inderjeet Arva S/o Late Sh jagdish Chander R/o HNo-1/D, Tower-B, Viceory Park, Thapaur Village, kandi Valli East Mumbai as second party U/s 33 of the Indian Stamp Act, 1989 on the ground that instruments are not properly stamped Agreement to sell as well as the rent Deed was executed on stamp paper of Rs.50/- each.
Whereas on receipt of documents mentioned above notices were issued to both the parties for 07/05/2012 and 05/10/2012 to put forward their explanation but neither of the parties appeared in this office so far nor any written submission received from any of the party.
Therefore, now on the basis of contents of impounded documents, the stamp duty is assessed/calculated as under:-
1. Duty payable on agreement to sell and purchase:
Locality of the property A-602. Rishi apartments.
Alaknanda, New Delhi
Type of property Private built up Flat
Total plinth area 1485 Sq/ ft or137.96 Sqm. Approx.
Consideration set-forth in the document Rs.50,00,000/- Duty Chargeable under article 23A & 23 of schedule 1A @ 5% on date of Execution 20/07/2007. Rs.2,50,000/-
Transfer duty u/s 147 DMC Act CS DJ 9546/16 Page 32 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
@3% : Rs. 1,50,000/- Stamp duty paid : Rs. 50/- Deficient Duty : Rs. 4,00,000-50-399950/- penalty imposed U/s 40(b) : Rs. 19,99,750/- Total : Rs. 23,99.750/- 2. Duty payable on rent agreement ; Monthly rent shown in the instrument : Rs. 23000/- Period specified for rent : 11 month Deliverable amount during the period : Rs.11x23000 Rs.253000/- Stamp Duty Chargeable u/a 35(1) Schedule 1A of the Indian stamp act @ 2 : Rs: 5060/- Security paid : Rs. 23000/- Duty chargeable u/a 57 of schedule 1A : Rs.100/- Stamp Duty paid : Rs.50/- Deficient amt. : Rs 5160-50- Rs 5110/- Penalty imposed u/s 40(b) Rs. 25550/- Total Rs. 30660/-
Since both the parties were provided due opportunity but they failed to do so. It is therefore requested that Hon'ble court may direct both the parties to deposit requisite stamp duty by collecting the challan from the office of the undersigned. Thereafter, the impounded documents can only be released after removing/rectifying and charges of deficient stamp duty with applicable penalty u/s 40(b) of Indian stamp Act, 1899 on the said Instrument.
Given under seal this court on dated 17/10/12 2012.
13.23. It is matter of record that during hearing on 12.02.2015, Ld. Counsel for the plaintiff submitted that the Collector of Stamp has determined stamp duty payable on the documents at Rs. 25 Lacs approximately but the plaintiff is not in a position to pay the amount. During hearing on 17.03.2015, the plaintiff was made aware that in view of non-payment of stamp duty, consequences of Section 35 of Stamp Act shall follow in respect of the documents impounded i.e. agreement to sell dated 20.10.2007 and rent agreement dated 20.10.2007. Thereafter, the Collector of Stamps was directed to return the original documents. At the time of examination in chief, the plaintiff has CS DJ 9546/16 Page 33 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
tendered the agreement to sell and purchase dated 20.10.2007 as mark A and rent agreement as mark B. 13.24. The plaintiff has admittedly failed to deposit deficient stamp duty on the agreement to sell and rent agreement as per the order of Collector of Stamps. During examination-in- chief of the plaintiff, the defendants, at the time of marking of agreement to sell and rent agreement as mark A and B respectively, has taken objection regarding marking of documents in view of the original documents being impounded and penalty not paid by the plaintiff.
13.25. This Court shall now discuss the law regarding impounding of document not duly stamped and effect of non-payment of deficient stamp duty.
13.26. In the matter of Om Prakash v. Laxminarayan & Ors., Civil Appeal No. 9032 of 2013 dated 07.10.2013, the plaintiffs filed suit for specific performance, possession and injunction. The plaintiff had claimed that on part payment of the consideration money, possession of the property was delivered to them. The defendant in the written statement denied that any agreement to sell was executed or that possession was handed over. The Trial Court had framed several issues and the Trial court held that the agreement to sell cannot be admitted in evidence as it was not duly stamped. The plaintiffs challenged the order of the Trial Court before the Hon'ble High Court. Hon'ble High Court held that the possession of the property was not actually delivered and therefore, recital in the agreement CS DJ 9546/16 Page 34 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
regarding handing over of possession is of no consequence. The Hon'ble Supreme Court was dealing with SLP filed by the defendant against the order of the Hon'ble High Court. Hon'ble Supreme Court held that at the time of considering the question of admissibility of a document, it is the recital of the document which shall govern the issue. Hon'ble Supreme Court set aside of the order passed by Hon'ble High Court and restored the order of the Trial Court. The relevant para of the order of Hon'ble Supreme Court is produced as under:-
"From a plain reading of the aforesaid provision, it is evident that an authority to receive evidence shall not admit any instrument unless it is duly stamped. An instrument not duly stamped shall be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped, of the amount required to make up such duty together with penalty. As we have observed earlier, the deed of agreement having been insufficiently stamped, the same was inadmissible in evidence. The court being an authority to receive a document in evidence to give effect thereto, the agreement to sell with possession is an instrument which requires payment of the stamp duty applicable to a deed of conveyance. Duty as required, has not been paid and, hence, the trial court rightly held the same to be inadmissible in evidence."
13.27. In the case of Bidyut Sarkar & Anr. v.
Kanchilal Pal, Civil Appeal Nos 10509-10510 of 2013 dated 28.08.2024, the plaintiff's filed suit for specific performance. 12 issues were framed by the Trial court and one of the issue was whether the agreement to sell can be admitted in evidence. The trial court decided all the issues in favour of the plaintiff. However, regarding the admissibility of the agreement to sell, Trial court dismissed the suit on the finding that agreement to sell was not admissible in evidence and thereafter, the Trial court CS DJ 9546/16 Page 35 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
dismissed the suit for specific performance. Hon'ble High Court proceeded to decree the suit for specific performance of the plaintiff. The defendant filed appeal before the Hon'ble Supreme Court. Hon'ble Supreme Court upheld and restored the judgment of the Trial court and set aside the order passed by the Hon'ble High Court. The relevant para of the judgment is reproduced as under:-
"19. The Trial Court thereafter proceeded to consider the statutory provisions of the Stamp Act namely sections 35, 36, 40 and 42. After discussing the same in detail, it proceeded to hold that the document was inadmissible in evidence, as the plaintiff failed to further pursue the proceedings before the Collector resulting into non-determination of the deficiency and the penalty and consequently, the non-deposit of the deficiency and penalty, which could have been determined by the Collector. The High Court, unfortunately, has not considered the statutory provisions and only proceeded to rely upon the statement of the plaintiff that he had accepted to deposit the deficiency in stamp duty and penalty, if any, imposed by the Collector. It would be worthwhile to mention here that even till date, the plaintiff has not made any efforts before the Collector to get the deficiency and penalty determined on the impounded document and to clear the same.
XXXXX
21. According to the language of the section 35 of the Stamp Act, instruments not duly stamped would be inadmissible in evidence, and any instrument chargeable with duty would be admissible in evidence only and only if such instrument is duly stamped. The proviso gives illustration as to how the instrument would become admissible upon payment of duty with which it was chargeable or in case of instruments insufficiently stamped, the payment is made to make up such duty along with penalty mentioned therein. It also refers to exceptions where a document could be admissible in evidence under a given situation. As elaborated in clauses (b), (c), (d) and (e) of the proviso, the instrument in question i.e. agreement to sell dated 23.03.1999 does not fall under any exception.
22. Section 36 of the Stamp Act provides for admissibility of an instrument not being questioned if the same had been admitted in evidence on the ground that it is not duly stamped except as provided under section 61 of the Stamp Act. In the present case, the instrument in question was admitted subject to objection as CS DJ 9546/16 Page 36 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
noted in the deposition of the plaintiff (PW-1) and recorded in the order sheet of the Trial Court dated 07.03.2003. As such section 36 of the Stamp Act will not come to the rescue of the plaintiff.
23. Section 40 of the Stamp Act gives power to the Collector to stamp such instruments which have been impounded. The Collector will determine the proper duty payable on such instrument along with penalty as provided in clause (b) of section 41.
24. Section 42 of the Stamp Act provides that when duty and penalty, if any, leviable in respect of any instrument has been paid under sections 35, 40 or 41 upon endorsement by the Collector that such duty has been paid, instrument shall thereupon be admissible in evidence.
25. In the present case, the agreement to sell dated 29.03.1999 was found by the Trial Court to be insufficiently stamped. Consequently, the matter was referred to the Collector for determination of proper stamp duty and any applicable penalty. As per the provisions of Section 42 of the Stamp Act, such a document can only become admissible in evidence after deficiency in stamp duty and the penalty, if any, have been assessed by the Collector, and the requisite amounts have been paid. Once the deficiency and penalty are cleared, the Collector is required to certify the document by endorsement, indicating that the required duty and penalty have been paid. Only upon such certification can the document be admitted into evidence and acted upon legally.
26. Despite the Trial Court's referral of the matter to the Collector, no determination regarding the deficiency in stamp duty or penalty was made by the Collector under Section 40 of the Stamp Act. As a result, the document remains inadmissible in evidence under the express bar imposed by Section 35 of the Stamp Act. Failure to resolve the deficiency in stamp duty prevents the document from being considered as admissible and valid in evidence. Therefore, until the necessary stamp duty and penalty are duly paid and endorsed by the Collector, the instrument remains legally barred from being admitted in evidence.
XXXXX
30. We find no reason to disagree with the findings of the Trial Court regarding the inadmissibility of the agreement to sell dated 29.03.1999. The document, being insufficiently stamped, was rightfully barred from being admitted as evidence in the absence of the requisite stamp duty and penalty being paid and certified by the Collector. The High Court, in treating this document as admissible without resolving the stamp duty deficiency, overlooked the statutory mandate under the Stamp CS DJ 9546/16 Page 37 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
Act. As the document is foundational to the suit, the failure to comply with the statutory requirements renders the entire claim unenforceable. Consequently, the suit must be dismissed, as it is based on an instrument that is legally inadmissible as evidence. The plaintiff cannot claim relief on the basis of a document that has not satisfied the legal requirements for admissibility."
13.28. It is settled through judicial pronouncements that failure to resolve deficiency in stamp duty prevents the document from being considered as admissible and valid in evidence and the plaintiff cannot claim relief on the basis of a document which is not legally admissible.
13.29. In the present case, Agreement to Sell and rent agreement are not duly stamped and despite specific order of Collector of Stamps to deposit deficient stamp duty, the plaintiff failed to deposit stamp duty. Even though the plaintiff was made aware that the documents would be inadmissible in evidence if deficiency was not removed, the plaintiff opted not to deposit deficient stamp duty. Therefore, both the documents i.e. agreement to sell and rent agreement are inadmissible in evidence.
13.30. Ld. Counsel for the plaintiff has relied upon three judgments in support of the plea that the documents can be considered for collateral purpose. The judgments relied upon by the Ld. Counsel for the plaintiff are distinguishable from the facts of the present case. In the case of S Kala Devi, the plaintiffs purchased adequate stamp papers for the execution of sale deed and the defendant had put the plaintiff in possession of the suit property, however, the registration of the sale deed was refused CS DJ 9546/16 Page 38 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
by the Sub-Registrar because there was attachment order in respect of the suit property. When the plaintiffs filed suit for specific performance, the objection was taken by the defendant that the said document is unregistered sale deed. Hon'ble Supreme Court was dealing with Section 49 of Indian Registration Act and there was no issue regarding Section 33 and 35 of Indian Stamp Act before the Hon'ble Supreme Court. In the case of Murugan, the Hon'ble Supreme Court was dealing with appeal against the dismissal of interlocutory application filed by the plaintiff before the Trial court. The plaintiff had filed copy of agreement to sell along with the plaint and before evidence, the plaintiff filed an application to produce the original agreement. The trial court dismissed the application and Hon'ble High Court dismissed the appeal filed against order of the trial court. In that case also, the Hon'ble Supreme Court was dealing with appeal against interlocutory order and the order was not passed at the stage of final judgment. Hon'ble Supreme Court, while allowing the plaintiff to place original agreement on record, also observed that the court had not expressed any opinion on the contents of the document and it was also open for the defendant to raise and contest the relevancy and validity of the document as permissible under the law. In the case of Ravi Somani, Hon'ble High Court of Delhi was dealing with application u/o 12 rule 6 CPC filed by the plaintiff/Landlord against the defendant/tenant. The defendant had admitted landlord tenant relationship and the defendant has taken objection that agreement was unregistered and it cannot be read in evidence. All three judgments relied upon by the Ld CS DJ 9546/16 Page 39 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
Counsel for the plaintiff is distinguishable from the facts of the present case.
13.31. As already held above, the documents i.e. agreement to sell and purchase dated 20.10.2007 and the rent agreement dated 20.10.2007 are not duly stamped and therefore, these documents are inadmissible in evidence. Further, the plaintiff has failed to plead and prove that he was ready and willing to perform his part of obligations under the agreement. Therefore, this Court holds that the plaintiff is not entitled to decree of specific performance. The issue is accordingly decided against the plaintiff.
14. Issue No-2 Whether the plaintiff is entitled to a decree of declaration declaring that the sale deed dated 4.6.2008 executed by defendant no.1 in favour of defendant no.2 as null and void? OPP 14.1. The onus to prove this issue was upon the plaintiff. In view of my findings on issue no. 1, this Court holds that the plaintiff is not entitled to decree of declaration. This issue is accordingly decided against the plaintiff.
15. Issue No-3 Whether the plaintiff is entitled to a decree of possession of the aforenoted suit property as shown and delineated in red colour in the site plan attached to the plaint? OPP 15.1. The onus to prove this issue was upon the plaintiff. The plaintiff is not the owner of the suit property. The CS DJ 9546/16 Page 40 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
defendant no. 1 has denied that the plaintiff is the landlord of the suit property. The rent agreement relied upon by the plaintiff is inadmissible in evidence. No relief can be granted to the plaintiff on the basis of the said rent agreement. Therefore, this Court holds that the plaintiff is not entitled to decree of possession. This issue is accordingly decided against the plaintiff.
16. Issue No-4 Whether the plaintiff is entitled to a decree of arrears of rent in sum of Rs.2,53,000/- at rate of Rs.23000/- per month from 1.11.2007 to 30.9.2008? OPP 16.1. The onus to prove this issue was upon the plaintiff. In view of my findings that the plaintiff is not entitled to decree of specific performance or decree of possession, this Court holds that the plaintiff is not entitled to decree of arrears of rent. This issue is accordingly decided against the plaintiff.
17. Issue No-5 Whether the plaintiff is entitled to decree of damages/mesne profit at rate of Rs.30,000/- per month with effect from 1.10.2008 till realization? OPP 17.1. The onus to prove this issue was upon the plaintiff. In view of my findings that the plaintiff is not entitled to decree of specific performance or decree of possession, this Court holds that the plaintiff is not entitled to decree of damages/mesne profits. This issue is accordingly decided against the plaintiff.
18. Issue No-6 Whether the plaintiff is entitled to the interest, if any, on the awarded amount? OPP CS DJ 9546/16 Page 41 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.
18.1. In view of my findings on aforesaid issues, this Court holds that the plaintiff is not entitled to any interest. This issue is accordingly decided against the plaintiff.
19. Issue No-7 Whether the suit is bad for misjoinder of parties? OPD-2.
19.1. The onus to prove this issue was upon the defendant no. 2. The defendant no. 2 has not led any evidence. No argument has been addressed on this issue. Accordingly, this issue is decided against the defendant no. 2.
20. Relief- In view of my findings on aforesaid issues, this Court holds that the plaintiff is not entitled to any relief. The suit of the plaintiff is therefore, dismissed. Parties to bear their own costs. Decree sheet be prepared accordingly. File be consigned to Record Room.
Pronounced in the open Court today on 13th March, 2026 (NEHA) District Judge-06, South East, Saket Court, New Delhi Neha Digitally signed by Neha Date: 2026.03.13 16:27:27 +0530 CS DJ 9546/16 Page 42 of 42 Inderjeet Arya v. T.S Chowdhary & Ors.