Delhi High Court
Harvinder Pal Singh & Anr. vs S.K.Mukherjee & Anr. on 21 August, 2015
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) No. 572/2006 & CS(OS) No. 380/2009
% 21st AUGUST, 2015
+ CS(OS) No. 572/2006
HARVINDER PAL SINGH & ANR. ..... Plaintiffs
Through None.
versus
S.K.MUKHERJEE & ANR. ..... Defendants
Through Mr. M. Dutta, Advocate
+ CS(OS) No. 380/2009
SHRI S.K.MUKHERJEE & ANR. ..... Plaintiffs
Through Mr. M. Dutta, Advocate
Versus
SHRI HARVINDER PAL SINGH DUA & ANR. ..... Defendants
Through None.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. Two suits are being disposed of by the present judgment, being CS(OS) No. 572/2006 and CS(OS) No. 380/2009. The 2006 suit is a suit for CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 1 of 30 specific performance. The suit of 2009 is a counter suit by the proposed sellers seeking back possession of the property which was agreed to be sold in terms of the Agreement to Sell dated 21.10.2004. It is conceded before me on behalf of the plaintiffs/proposed sellers in the 2009 suit namely Sh. S.K. Mukherjee and Smt. Neelam Mukherjee that if the 2006 suit is decreed, then automatically the 2009 suit would stand dismissed. The proposed purchasers under the Agreement to Sell dated 21.10.2004 are Sh. Harvinder Pal Singh Dua and Smt. Harjinder Kaur, and who are the plaintiffs in CS(OS) No. 570/2006. In this suit the defendants are Sh. S.K. Mukherjee and Smt. Neelam Mukherjee, who are proposed sellers under the Agreement to Sell dated 21.10.2004, and they are the plaintiffs in CS(OS) No. 380/2009. The Agreement to Sell is with respect to ground floor and first floor of the property bearing no.8/70, Punjabi Bagh (West), New Delhi-110 026 (hereinafter referred to as the 'suit property'). The sale consideration fixed under the Agreement to Sell dated 21.10.2004 is a sum of Rs.91,51,000/- (Rupees ninety one lac and fifty one thousand only).
2. These two matters were on the 'Finals' Board of this Court since 29.06.2015. Yesterday when the matters were heard, the matters were effective item nos.1 and 2 on the 'Finals' Board. Since no one appeared for CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 2 of 30 the proposed buyers being plaintiffs in CS(OS) No. 572/2006, I heard the counsel for the defendants/proposed sellers, Sh. S.K. Mukherjee and Smt. Neelam Mukherjee. I have also gone through the entire record with the assistance of the counsel for the proposed sellers being defendants in CS(OS) No. 572/2006. Since there was no time yesterday to dictate the judgment on account of a Full Court Reference, the matters were adjourned to today for dictating the judgment.
3. The facts of the case are that the parties admittedly entered into the Agreement to Sell on 21.10.2004 with respect to the suit property. It is also admitted that the agreed sale consideration was Rs.91,51,000/- (Rupees ninety one lacs and fifty one thousand only) and out of which amount, a sum of Rs. 10,21,000/- (Rupees ten lacs and twenty one thousand only) was paid by the proposed buyers to the proposed sellers on 21.10.2004 (receipt Ex.PW-1/2/Ex.PW1/2). It is also the agreed position that thereafter three payments were made by the proposed buyers to the proposed sellers; Rs.25,30,000/- (Rupees twenty five lacs and thirty thousand only) on 30.11.2004 (receipt Ex.P-5/Ex.PW-1/6), Rs.15,00,000/- (Rupees fifteen lacs only) on 03.01.2005 (receipt Ex.P-3/Ex.PW-1/4) and another sum of Rs.15,00,000/- (Rupees fifteen lacs only) which as per the proposed buyers CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 3 of 30 was paid on 11.03.2005, whereas, the proposed sellers say that this payment of Rs.15 lacs was made but actually the date of payment was of 01.03.2005 and not 11.03.2005 inasmuch as the numerical '1' before 1.3.2005 has been added to the date of this document afterwards by the proposed buyers. This receipt of Rs.15 lacs is Ex.P-4/Ex.PW-1/5.
4. The dispute between the parties is as to who has committed breach of contract i.e whether the proposed buyers failed to pay the balance sale consideration of Rs.26 lacs as envisaged as per the payment date/period under the Agreement to Sell or it is that the proposed sellers refused to accept the balance sale consideration, and which is the case of the proposed buyers.
5. In the suit for specific performance filed by the proposed buyers CS(OS) No. 572/2006, issues were framed on 6.1.2010 and these issues read as under:-
"1. Whether the plaintiff is entitled to decree of specific performance directing the defendant to execute the sale deed of the Ground Floor and First Floor of suit property bearing no.8/70, Punjabi Bagh West, New Delhi-26 and if so, its effect? OPP
2. Relief."CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 4 of 30
6. In the suit of the proposed sellers for possession being CS(OS) No.380/2009, the following issues were framed on 21.7.2010:-
"i) Whether the plaintiff is entitled to possession of the ground and the first floor of property bearing no. 8/70, Punjabi Bagh West, New Delhi? OPP
ii) If the answer to the issue No.(i) is in affirmative, whether the plaintiff is entitled to recovery of an amount of Rs.72,00,000/- on account of use and occupation charges from the defendant? OPP
iii) Whether the plaintiff is entitled to a decree of damages/ compensation to the tune of Rs.15,00,000/- from the defendant? OPP
iv) Whether the plaintiff is entitled to pendente lite and future interest @ 12% per annum, if so, on what amount and for what period? OPP
v) Relief."
7. As already stated above, and as conceded before me by the counsel for the proposed sellers, decision on issues in CS(OS) No.380/2009 will abide by the decision of the issues in the suit for specific performance being CS(OS) No.572/2006 inasmuch as if the suit for specific performance is decreed, then, the suit for possession being CS(OS) No.380/2009 will have to be dismissed. I am therefore discussing the issues in the suit for specific performance being CS(OS) No. 572/2006, the evidence which is led by both the parties in this suit and the arguments urged. Common evidence has been led by the parties in both these suits.
CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 5 of 30
8. Issue No.1 "1. Whether the plaintiff is entitled to decree of specific performance directing the defendant to execute the sale deed of the Ground Floor and First Floor of suit property bearing no.8/70, Punjabi Bagh West, New Delhi-26 and if so, its effect? OPP"
There is only one issue framed as above in the suit for specific performance and this issue will include sub-issues as to who is guilty of breach of contract, whether plaintiffs are ready and willing to perform their part of the contract, and whether plaintiffs are entitled to the relief of specific performance?
9(i). The undisputed position which emerges from the record is that out of the total sale consideration of Rs.91,51,000/- (Rupees ninety one lacs and fifty one thousand) an amount of Rs.65,51,000/- (Rupees sixty five lacs and fifty one thousand only) stands paid leaving the balance of Rs.26 lacs payable. In fact the balance sale consideration will not be Rs.26 lacs but will be Rs.22.50 lacs as detailed below inasmuch as proposed buyers have paid a sum of Rs.3.5 lacs to the local electricity company towards past dues of the suit property payable.
(ii) Of course, as stated above, there is a dispute as to whether the last instalment of Rs.15 lacs which was paid by the proposed buyers to the CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 6 of 30 proposed sellers was paid on 11.03.2005 as per the case of the proposed buyers or this amount was paid on 1.3.2005 as is the case of the proposed sellers but the fact that this payment of Rs.15 lacs was made is undisputed.
This aspect requires examination inasmuch as counsel for the proposed sellers has argued that by paying the amount of Rs.15 lacs on 1.3.2005, and not on 11.3.2005, there did not take place any extension of date/period of payment under the contract/Agreement to Sell.
(iii) In terms of clause 1(iii) of the Agreement to Sell after making the payment under the Agreement to Sell of an amount of Rs.10.21 lacs, two instalments of Rs.25.30 lacs and Rs.15 lacs were payable on or before 30.11.2004 and 15.1.2005 respectively, and the balance amount of Rs.41 lacs was to be payable on or before 7.3.2005. If the amount of Rs.15 lacs is paid on 11.3.2005 i.e after 7.3.2005, the same will show an understanding that the parties did not agree to strictly continue with the time limits provided under the contract. It is for this reason that the proposed sellers claim that payment of Rs.15 lacs was made on 1.3.2005 before 7.3.2005 and not on 11.3.2005 i.e after 7.3.2005 because payment received by the proposed sellers after 7.3.2005 i.e on 11.3.2005 will be an indication of an understanding for extension of time of payment beyond 7.3.2005. CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 7 of 30
10. To have an answer on this aspect we will have to refer to the receipt in question and which receipt has been proved and exhibited as Ex.P- 4/Ex.PW-1/5. This receipt is written by a pen of black ink. In order to appreciate the dispute in this document as regards whether the date thereof is 1.3.2005 or is 11.3.2005, let me reproduce below the scanned copy of this receipt. The scanned copy is as under:-
CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 8 of 30
11(i). A reading of the aforesaid receipt in my opinion shows that the contention of the counsel for the proposed sellers is misconceived that the numerical '1' has been added before the date 1.3.2005 for making the payment made on 1.3.2005 as for being shown on 11.3.2005. This conclusion can be arrived at because the date of 11.3.2005 appears not once but on as many as four places on this document. The first time the date appears is at the top right hand corner. Second time this date appears is after the signatures on the revenue stamp. Third time the date appears is when this document/receipt was taken possession of by the proposed buyers and which date appears immediately on the left hand side below the signatures appearing of the proposed sellers across the revenue stamp. The fourth time this date of 11.3.2005 appears is after signatures of the witness at the left hand bottom portion of this document. I therefore do not agree with the contention of the counsel for the proposed sellers that the date of this document was 1.3.2005 and not 11.3.2005 and which is found as many as four times on this document.
(ii) In my opinion, there is another very strong reason to hold that the date of this document Ex.P-4/Ex.PW-1/5 is 11.3.2005 and not 1.3.2005, inasmuch as, if there was no extension of the date for payment beyond CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 9 of 30 7.3.2005, then, the proposed sellers would have, if not sent a legal notice, they at least would have sent a normal letter to the proposed buyers mentioning about the breach of contract by the proposed buyers in failing to keep the time-line of payment of last instalment of Rs.41 lacs by 7.3.2005.
Admittedly, and as conceded before me by the counsel for the proposed sellers, neither any legal notice nor any letter whatsoever was written by the proposed sellers to the proposed buyers that the proposed buyers had committed breach of contract by failing to pay the last instalment of Rs.41 lacs on or before 7.3.2005. In my opinion, therefore, not only the date of the document Ex.P-4/Ex.PW-1/5 is 11.3.2005, this factual event shows that the time of performance and payment did not remain of the essence of the contract.
(iii) Even if time of performance/payment was of the essence of the contract initially, parties by conduct of extending the time beyond 7.3.2005 i.e of the proposed sellers accepting only a part payment of Rs.15 lacs and not the complete balance payment of Rs.41 lacs, and that too after 7.3.2005 on 11.3.2005, caused the effect that there is no breach of contract on behalf of the proposed buyers and parties agreed to extend the time line beyond 7.3.2005 for payment of the balance payment of Rs.41 lacs. CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 10 of 30
(iv) In fact, I may note that not only around March - April, 2005 there is no letter or legal notice on behalf of the proposed sellers to the proposed buyers that the proposed buyers have committed breach of contract in not making payment of balance sale consideration of Rs.41 lacs by 7.3.2005, counsel for the proposed sellers concedes that in the entire year 2005 as also till 1.4.2006, no legal notice or letter was at all sent on behalf of the proposed sellers to the proposed buyers that the proposed buyers are guilty of breach of contract in failing to make the payment of balance sale consideration of Rs.41 lacs by making the payment of only Rs.15 lacs and that too beyond 7.3.2005 on 11.3.2005. I therefore hold that proposed buyers are not guilty of breach of contract and in fact parties had agreed to extend the time of payment beyond 7.3.2005.
12. Once time for payment of balance sale consideration has been extended beyond 7.3.2005, the time of performance can once again become essence of the contract only if a specific notice is sent by the proposed sellers to the proposed buyers once again making the time, essence of the contract, but as stated above, no letter or legal notice was ever sent by the proposed sellers to the proposed buyers, and therefore there is no fresh extended date giving the outer date for making of balance payment by the CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 11 of 30 proposed sellers to the proposed buyers, and therefore time of performance after being extended beyond 7.3.2005 was never made the essence of the contract by fixing of a cutoff date for payment by the proposed sellers.
13. Now let us examine the issue as to whether plaintiffs/proposed buyers were ready and willing to perform their part of the contract. This aspect of readiness and willingness would be the aspect that whether the plaintiffs/proposed buyers had the financial capacity to make the payment of the balance sale consideration of Rs.22.50 lacs. This aspect will be examined simultaneously as to whether plaintiffs are entitled to the discretionary relief of specific performance in view of Section 20 of the Specific Relief Act, 1963.
14. Let me first take up the aspect of whether plaintiffs are entitled to the discretionary relief of specific performance. As per Section 20(3) of the Specific Relief Act, 1963, if a proposed buyer has done various acts in furtherance of the agreement to sell, and which various acts would include payments of substantial amount of money by different instalments, this is one of the factors which the court will favourably consider for grant of specific performance. Where a proposed buyer has only paid a nominal portion of the sale consideration i.e around 10% or 20% only of the total sale CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 12 of 30 price, or may be some such other near percentage, then courts depending upon facts of a case, are disinclined to grant specific performance because substantial acts i.e substantial payments have not been made by the proposed buyer under the agreement to sell. On the contrary, when substantial payments have been made by a proposed buyer under an agreement to sell, courts are ordinarily inclined depending upon facts of each case, to decree the suit for specific performance.
15. In the present case, it is noted that out of the total sale consideration of Rs.91.51 lacs, the proposed buyers have paid to the proposed sellers an amount of Rs.65.51 lacs i.e approximately around 70% of the total sale consideration. Once 70% of the total sale consideration is paid, in my opinion, unless there are grave reasons and circumstances to decline specific performance, this Court would ordinarily grant specific performance of the contract for the reason that 70% amount received by the proposed sellers at the relevant point of time could/would have been invested by them as per their choice including in an immovable property, with the related proposition that if this amount had remained with the proposed buyers, then, proposed sellers would have suffered a disadvantage of not utilizing these moneys for investing in an immovable property. Also if CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 13 of 30 the substantial amount of the total sale consideration would not have been paid to the proposed sellers, then the proposed buyers would have got the benefit of returns on this substantial amount of total sale consideration which would have remained in their hands. Therefore looking at it any way, whether of the proposed sellers not having moneys in their pockets which they therefore could not have invested in an immovable property and the proposed sellers having money in their pockets which they could have invested in an immovable property once such substantial consideration is received by them, specific performance in a case such as the present ought to be granted in favour of the proposed buyers and against the proposed sellers.
16. Now let us examine the aspect that whether plaintiffs have shown their financial capacity to make the payment of the balance amount of Rs.22.50 lacs. In this regard, it must be noted that it is not the law that for payment of balance sale consideration, proposed buyers must show availability of liquid moneys in their hands and it is sufficient if the proposed buyers show means and finances available to them for making payment of balance sale consideration. The Supreme Court in the judgment in the case of Nathulal Vs. Phoolchand (1969) 3 SCC 120 has held that the proposed buyer need not have liquidated moneys with him and it is CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 14 of 30 sufficient if he shows availability of means. In para 6 of this judgment, the Supreme Court has held that to prove the readiness and willingness a buyer need not necessarily have to produce moneys or vouch a concluded scheme for financing a transaction. This ratio will be relevant in the facts of the present case where a substantial part of the sale consideration being 70% has already been paid by the proposed buyers to the proposed sellers.
17. With respect to the capacity of the proposed buyers to pay the balance sale consideration of Rs.22.50 lacs, the proposed buyers have led evidence of not only the plaintiffs/proposed buyers but also of their relatives and friends who are said to have given loans and finances to the plaintiffs with respect to the payment of balance sale consideration so that moneys are available to the proposed buyers for payment of balance sale consideration. I may in this regard also note that plaintiffs are middle class persons and not big businessmen and evidence shows that they have used all available means and made a thorough effort so as to ensure that the balance sale consideration is available with them including by sale of their jewellery.
18. In my opinion, part of the evidence led by the proposed buyers on their financial capacity is credible and some part of it is not, and in order to understand the evidence led on behalf of the proposed buyers for payment CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 15 of 30 of balance sale consideration, it will be necessary to refer to the following chart filed by the proposed buyers to show payment of balance sale consideration. This chart reads as under:-
"SH. HARVINDER PAL SINGH DETAIL OF CASH AND BANK BALANCE AS ON 23.03.2006 DETAIL OF AMOUNT RECEIVED FROM GOLD SALE S.NO. NAME AMOUNT
1. JOGINDER SINGH DUA 18,648.00
2. KULWANT KAUR DUA 19,206.00
3. HARKISHAN SINGH DUA 19,866.00
4. GURMEET KAUR DUA 19,040.00
5. H.P. SINGH 19,250.00
6. HARJINDER KAUR DUA 18,830.00
7. GURPREET SINGH DUA 19,075.00
8. JASPREET SINGH DUA 19,180.00
9. MASNJIT SINGH BHANDARI 19,110.00
10. DAVINDER KAUR BHANDARI 19,250.00
11. PARAMJEET SINGH GULATI 18,865.00 ______________ TOTAL AMOUNT 210,320.00_ DETAIL OF AMOUNT RECEIVED FROM PUBLIC PROVIDENT FUND ACCOUNT NO. AMOUNT
1. 110810 50,000.00
2. 110807 50,000.00
3. 110812 50,000.00
4. 110808 50,000.00
5. 110806 50,000.00
6. 110805 50,000.00
7. 110811 50,000.00
8. 110809 50,000.00 ______________ TOTAL AMOUNT 400,000.00 CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 16 of 30 CASH RECEIVED FROM HK DUA 435,500.00 CASH RECEIVED FROM INDERPREET SINGH 456,500.00 CASH RECEIVED FROM PPF ACCOUNT 400,000.00 CASH WITHDRAWN FROM OBC 23.03.06 315,000.00 CASH RECEIVED FROM FRIENDS & RELATIVE 578,550.00 (AS PER GIFT DEED ATTACHED 29 DEED) BANK BALANCE WITH OBC, MANASROVER GARDEN 160,668.00 BANK BALANCE WITH PNB, CUSTOME HOUSE 81,763.00 TOTAL AMOUNT OF CASH AND BANK ______________ BALANCES WITH SH. H.P. SINGH DUA 3,038,301.00"
19. So far as serial nos.1 to 11 with respect to sale of jewellery/ornaments are concerned, the documents in this regard which have been proved and exhibited are Ex.PW-1/13 to Ex.PW-1/24. Plaintiffs therefore have shown availability of consideration of Rs.2.10 lacs. The next set of documents are of availability of funds in the Provident Fund account of the plaintiffs and these documents have been proved and exhibited as Ex.PW-1/M(Colly). The plaintiffs therefore have further proved their financial capacity with respect to an amount of Rs.4 lacs. For completion of narration, it may be noted that there is no cross examination that Ex.PW- 1/M(Colly) are forged and fabricated documents and no objection is raised that they cannot be read as evidence in the case.
CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 17 of 30
20. Before I proceed further, at this stage, it is required to be stated that out of the balance amount originally payable of Rs.26 lacs, a sum of Rs.3.50 lacs is to be reduced inasmuch as the proposed sellers had to give to the proposed buyers, property which was free from all charges payable up to the date of the Sale Deed and it is noted that the proposed buyers have filed as evidence, proof of the fact that a sum of Rs.3.50 lacs was due and payable to the electricity department and this amount was cleared by the proposed buyers. This cheque of Rs.3.50 lacs which was paid towards payment of electricity dues to BRPL has been proved and exhibited by summoning the witness of the bank PW11, Sh. Anand Kumar, Chief Manager, Oriental Bank of Commerce, Mansarover Garden as Ex. PW11/2. The plaintiffs' statement of accounts in the bank showing the clearing entry with respect to this cheque of Rs.3.50 lacs has been proved and exhibited as Ex.PW11/1. Therefore, proposed buyers have/had to show capacity for payment of balance consideration of only Rs.22.50 lacs and not Rs.26 lacs.
21. That takes us to the evidence led by the proposed buyers of Sh. Harkishan Singh Dua (PW3), Sh. Inderpreet Singh (PW2), Sh. Surinder Singh (PW10) and other cash receipts from friends and relatives. Though in my opinion, not much weight can be given to the evidence led by the proposed buyers to the evidence of Sh. H.K. Dua (PW3) and Sh. Inderpreet Singh (PW2) CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 18 of 30 inasmuch as these persons have only made statements without being backed by the documents that they gave moneys to the proposed buyers, however, in my opinion, their evidence cannot be totally discarded inasmuch as no doubt they have not led proof of making actual payments or availability of moneys with them, but it cannot be ignored that Sh. H.K. Dua has deposed that the proposed buyer no.1/plaintiff no.1 is his elder brother and that Sh. H.K. Dua is a garment exporter having a showroom at Rajouri Garden. There is no cross-examination on behalf of the proposed sellers that Sh. H.K. Dua is not having a showroom at Rajouri Garden and is not doing garment export business and which aspect will reasonably show some extent of financial capacity of Sh. H.K. Dua. Also, deposition of Sh. H.K. Dua (PW3) shows that he is an income tax assessee since the year 1987. Therefore being a close relative ie being a brother, Sh. H.K. Dua, finances would have been available to proposed buyers.
22. So far as the evidence of Sh. Surinder Singh (PW10) of his paying a sum of Rs.10 lacs in cash to the proposed buyers is concerned, it is noted that it is not shown as to how this amount was made available to the proposed buyers as there is no documentary evidence filed by Sh. Surinder Singh, PW10 of his actually having available with him Rs.10 lacs and having paid the said amount of Rs.10 lacs to the proposed buyers. However, in my opinion, the statement of Sh. Surinder Singh (PW10) cannot once again be completely CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 19 of 30 disbelieved because Sh. Surinder Singh (PW10) is the 'Samdhi' (in law) of proposed buyer no.1/plaintiff no.1 and he also was a friend of proposed buyer no.1/plaintiff no.1 for a long period of time. In his deposition it has come out that he is engaged in the supply of building material and pays income tax. Therefore, in my opinion, some amount of moneys would have been available to the proposed buyer from PW10, Sh. Surinder Singh.
23. It is also to be noted that it has come in evidence that the proposed buyers have two sons both of whom are working and therefore they would have also contributed towards arranging payment of balance sale consideration.
24. There is further an important reason for this Court to hold that proposed buyers had financial capacity to pay the balance sale consideration inasmuch as the proposed buyers have filed on record and proved the documents that they had purchased stamp papers for completing the sale transaction. The stamp papers were purchased from the Government Treasury on 21.11.2005 vide Ex.PW12/1 and Ex.PW12/2 and when they were not utilized refund was taken vide application dated 30.8.2006 with the amount being paid of Rs.50,400/- for refund of the stamp duty on 11.12.2006. These documents have been proved and exhibited as CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 20 of 30 Ex.PW1-/35 to Ex.PW-1/37. These documents establish that stamp duty of Rs.56,000/- was purchased and after deducting 10% penalty of Rs.5,600/- the Collector of Stamps paid back the amount of Rs.50,400/- to the proposed buyers. In my opinion, there was no need of the proposed buyers to have purchased the stamp papers unless they had the necessary finances ready with them and this in my opinion is one of the important aspect to hold that proposed buyers had the financial capacity to make the payment of the balance sale consideration.
25. Proposed buyers/plaintiffs have also proved and exhibited as Ex.PW-1/7 a Declaration dated 23.3.2006 registered with the Sub-Registrar that they appeared before the Sub-Registrar on 23.3.2006 along with the moneys but proposed sellers did not appear for taking the moneys and execution of the Sale Deed. This document Ex.PW-1/7 alongwith the documents evidencing the purchasing of stamp papers in my opinion will considerably be of substantial assistance to the proposed buyers to show their readiness and willingness and capacity to pay the balance sale consideration inasmuch as there was no need to appear before the Sub- Registrar for registration of the Sale Deed including by purchasing the stamp CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 21 of 30 papers if the proposed buyers did not have the necessary finances available for making the payment of the balance sale consideration.
26. In my opinion, there is yet another reason to hold that proposed buyers are not guilty of breach of contract and they did have the requisite finances because on going through the cross-examination of PW1, Sh. Harvinder Pal Singh (proposed buyer no.1/plaintiff no.1) it is seen that on behalf of the proposed sellers there is no cross-examination by putting a suggestion that proposed buyers have committed breach of contract by failing to pay the balance sale consideration on or before 07.03.2005 or even subsequently during the years 2005-2006. Also, there is no cross- examination by the proposed sellers that the proposed buyers did not have the requisite finances for making payment of the balance sale consideration. PW1, Sh. Harvinder Pal Singh in his cross-examination in fact has categorically deposed that he had with him an amount of Rs.27 lacs on 23.03.2006 to complete the sale transaction. This part of the deposition also refers to purchasing of stamp papers for completing the sale transaction.
27. I have already stated above that the proposed buyers are middle class persons. Obviously such persons would have to ensure that they are able to get moneys so that the sale transaction does not fail for non-payment CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 22 of 30 of 30% of the balance sale price. Without going therefore into the exacting mathematics to the last rupee, in my opinion, taking note of the fact that since 70% of the total sale consideration already stood paid and reasonable evidence has been led to show payment of balance sale consideration, therefore plaintiffs have established their readiness and willingness and financial capacity to pay the balance sale consideration. In view of the above, I am of the view that proposed buyers by preponderance of probabilities have proved that they had with them the necessary finances for making payment of the balance sale consideration. Plaintiffs/proposed buyers are therefore held to be ready and willing to perform their part of the contract. Issue no.1 is therefore decided in favour of the proposed buyers and against the proposed sellers by holding that the proposed sellers and not the proposed buyers are guilty of breach of contract and that proposed buyers had the financial capacity and were ready and willing to perform their part of the contract.
28. For completion of narration it is noted that there are disputes between the parties as to whether proposed buyers illegally and forcibly took possession of the suit property from the proposed sellers on 01.04.2006, and for which both the parties have led oral evidence of various witnesses. I CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 23 of 30 may however state that issue with respect to possession will possibly pale into insignificance once it is held and decided by this Court that plaintiffs/proposed buyers are entitled to the relief for specific performance and which will mean possession will have to be of the proposed buyers and consequently, the issue with respect to possession really becomes immaterial. I therefore need not refer to such depositions in detail including because depositions which are given by witnesses of both the parties are only oral depositions in favour of the respective parties, and therefore really nothing will stand proved from the oral depositions of these witnesses. In my opinion, what possibly may clinch the issue with respect to the proposed sellers having given possession to the proposed buyers on 01.04.2006 is that on a query to the counsel for the proposed sellers, it is stated by the counsel that though the proposed sellers were not actually living in the suit property, however the complete household items, furniture, goods, television, refrigerator, kitchen utensils etc etc were lying in the suit property, but I note that if the proposed buyers had forcibly thrown out all these goods of the proposed sellers on 01.04.2006, then surely proposed sellers should have proved photographs of these goods lying scattered on the road but photograph(s) or any other documentary evidence is not proved that the entire household goods including furniture etc etc were thrown on the road CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 24 of 30 when the proposed buyers are alleged to have taken forcible possession of the suit premises from the proposed sellers. I am also not making any definitive and final observations with respect to possession being taken or not being taken on 01.04.2006, inasmuch as, I am informed by the counsel of the proposed sellers that criminal proceedings are initiated on this aspect in the criminal court, and thus I really therefore do not want to prejudice any of the parties in the criminal trial, and this is also so agreed before this Court by the counsel for the proposed sellers.
29. (i) That takes me to the issue as to what relief should be granted to the proposed sellers with respect to the payment of balance sale consideration i.e instead of balance sale consideration should a higher amount be paid or the balance sale consideration should be paid with interest. It bears note that the Supreme Court in the judgment in the case of Nirmala Anand Vs. Advent Corporation (P) Ltd. And Other (2002) 8 SCC 146 has held that courts while deciding/decreeing suits for specific performance has power to increase the sale price.
(ii) There were thus two options which were available to this Court. First option was in view of the case of the proposed sellers that parties had more or less negotiated for increase of the price of the property from CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 25 of 30 Rs.91.51 lacs to Rs.1.25 crores payable in March, 2006. This aspect of parties having agreed for a higher price was however very strenuously disputed on behalf of the proposed buyers. Another option was that I can give the balance payment of Rs.22,50,000/- along with a high rate of interest @ 21% p.a., and which is the course of action of awarding high rate of interest on balance payment I have adopted in the case of RFA No. 95/1998 decided on 11.03.2011 titled as Nehru Place Hotels Ltd. Vs. Kanta Aggarwal, 2011 (123) DRJ 148. In that case I have awarded interest on the balance payment @ 21% p.a. simple and the relevant paragraph of that judgment is para 18 and which reads as under:-
"18. There is finally one aspect which I need to address in favour of the appellant/defendant, though no argument was raised before me, being grant of interest on the charges which have been held to be payable by the trial Court in favour of the appellant/defendant and against the respondent/plaintiff. I note that the trial Court has not granted any interest to the appellant/defendant for the monies which are required to be paid by the respondent/plaintiff to the appellant/defendant. No doubt, it is because of the appellant/defendant that the situation came to the present pass inasmuch as the appellant/defendant wrongly changed the allocation of space from the prime location of upper ground floor to the lower ground floor and also reduced the area from 403 Sq. feet to 372 sq. feet, however, the respondent has used these monies which are held payable by her to the appellant/defendant. However, while dealing with this aspect I must hasten to add that so far as the portion of charges relating to maintenance etc. under Clause 17, the respondent/plaintiff has not received the benefit of possession which would have been received by her on payment of these charges and the escalation charges, and also that the appellant/defendant itself has CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 26 of 30 been using this allocated space as its own office space. Therefore, balancing the equities, though interest should be awarded to the appellant/defendant on the escalated cost portion of the price payable, the issue really would be of the rate of interest which ought to be awarded in favour of the appellant/defendant and against the respondent/plaintiff with respect to the escalation charges which are payable to the appellant/defendant as per the impugned judgment and whether interest should be payable on the charges other than the escalation charges. Nowadays the Supreme Court has been directing that the rates of interest which should be awarded by the Courts should be at a lower side in view of the changed economic scenario, liberalization of the economy and the consistent fall in the rates of interest. The recent judgments of the Supreme Court, in this regard, are Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority and others, 2005 (6) SCC 678, McDermott International Inc. v. Burn Standard Co. Ltd. and others, 2006 (11) SCC 181, Rajasthan State Road Transport Corporation v. Indag Rubber Ltd., (2006) 7 SCC 700 & Krishna Bhagya Jala Nigam Ltd. v. G.Harischandra, 2007 (2) SCC 720 and State of Rajasthan Vs. Ferro Concrete Construction Pvt. Ltd (2009) 3 Arb. LR 140 (SC). The Supreme Court has granted rates of interest varying between @ 6% to 9%. per annum simple.
In the facts of the present case, however, I find that instead of a lower rate of interest, the appellant/defendant should get a higher rate of interest considering that the transaction pertains to an immovable property and benefit of which will go to the respondent/plaintiff. Therefore, I hold the appellant/defendant entitled to pendente lite and future interest @ 21% per annum simple on the amount of escalation charges as decreed by the trial Court. For the other charges which are payable by the respondent/plaintiff to the appellant/defendant which have been granted by the trial Court, the same however would be without payment of any interest because the said charges are towards maintenance and other related charges with respect to the property and the respondent has not enjoyed the property during all this period which in fact the appellant/defendant has used." (underlining added) CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 27 of 30 I may note that both the parties in the case of Nehru Place Hotels Ltd. (supra) had filed SLP Nos. 22130/2011 and 22065/2011 before the Supreme Court but SLPs of both the parties against the judgment dated 11.03.2011 were dismissed by the Supreme Court on 19.03.2012.
30. On which of the two options I should exercise, I have taken suggestion from the counsel for the proposed sellers that which option is more acceptable to the proposed sellers that whether they would want to receive the figure being the difference of higher sale price of Rs.1,25,00,000/- and the original sale price of Rs. 91,51,000/- plus balance due of Rs. 22.50 lacs ie a total of Rs. 55,99,000/- with interest @ 6% p.a. simple from the date of the suit filed by the proposed sellers ie 12.2.2009 or proposed sellers would want to receive the balance price of Rs.22.50 lacs along with interest @ 21% p.a. simple with the date of commencement of interest being 7.3.2005 and which date is taken assuming the Agreement to Sell would have been performed as originally envisaged. Both these options were put to the counsel for the proposed sellers and counsel for the proposed sellers says that whichever option will give a higher benefit to the proposed sellers, that option is being exercised by the proposed sellers. Of course, it is clarified that exercise of option by the proposed sellers as per the counsel for CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 28 of 30 the proposed sellers will obviously not amount to consenting to the decree for specific performance and the consent is limited to the exercise of the option. Since the first option gives a total higher payment to the proposed sellers, hence this option is exercised by the proposed sellers.
31. In view of the above, suit for specific performance of the proposed buyers, Sh. Harvinder Pal Singh Dua and Smt. Harjinder Kaur, is decreed against the proposed sellers, Sh. S.K. Mukherjee and Smt. Neelam Mukherjee, with respect to the suit property being ground floor and first floor of property bearing no.8/70, Punjabi Bagh (West), New Delhi-110 026 along with proportionate rights in the land. Plaintiffs/proposed buyers will be entitled to continue in possession of the suit property provided the proposed buyers/plaintiffs deposit in this Court an amount of Rs. 55,99,000/-
(Rupees fifty five lacs and ninety nine thousand only) along with interest @ 6% p.a. simple from 12.02.2009 till the date of passing of this judgment within a period of three months from today. On this amount being deposited by the proposed buyers/plaintiffs, the defendants/proposed sellers thereafter within a period of one month will execute the necessary Sale Deed of the suit property in favour of the plaintiffs/proposed buyers by taking all steps which are required for executing the Sale Deed. With respect to execution CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 29 of 30 and registration of the Sale Deed, the necessary charges of stamp duty and registration will be borne by the proposed buyers.
32. In view of CS(OS) No.572/2006 being decreed in favour of the proposed buyers, CS(OS) No.380/2009 will stand dismissed by deciding all issues framed therein against the proposed sellers and in favour of the proposed buyers. Parties are left to bear their own costs with respect to both these suits. Decree Sheets be prepared.
VALMIKI J. MEHTA, J AUGUST 21, 2015 nn/ne/godara CS(OS) No. 572/2006 & CS(OS) No. 380/2009 Page 30 of 30