Delhi District Court
Sultan Singh Gujjar vs Sanjay Sharma on 10 September, 2024
CS DJ ADJ 126/22 Page 1 of 40
IN THE COURT OF SH. DIVYANG THAKUR
DISTRICT JUDGE-03:
SOUTH WEST DISTRICT: DWARKA COURTS:NEW DELHI
Civil Suit -CS DJ ADJ- 126/2022
CNR No. DLSW01-001035-2022
In the matter of :
Shri Sultan Singh Gujjar
S/o Late Laxman Singh Gujjar
R/o H. No. 115-116, Vipin Garden,
Near Dwarka Mor, Uttam Nagar,
New Delhi-110059 ....Plaintiff
Versus
Sh. Sanjay Sharma
S/o Sh. Mohan Lal Sharma
R/o 1/5039, Gali No. 1,
Balbir Nagar, Shahdara, Delhi-110032 ......Defendant
Date of institution of the suit : 14.02.2022
Final Arguments Heard on : 06.08.2024
Date of Judgment : 10.09.2024
Decision : DECREED
Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma
CS DJ ADJ 126/22 Page 2 of 40
SUIT FOR SPECIFIC PERFORMANCE, POSSESSION,
COMPENSATION AND INUNCTION
JUDGMENT :
1. Present suit has been filed by the Plaintiff seeking (a) decree of specific performance with respect to the contract dated 07.08.2021 seeking directions to the Defendant to execute and register sale documents / sale deed of suit property bearing plot nos. 117 and 118, street / block / khasra no. 159, colony known as Vipin Garden, Uttam Nagar, New Delhi-59, area measuring 135 sq. yards having built up first floor and second floor in favour of the Plaintiff with delivery of its vacant physical possession to him; (b) decree of injunction thereby restraining the Defendant and his agents from conveying, selling, transferring, alienating, creating third party interest and parting with possession of the aforesaid suit property to anyone in any manner whatsoever, except the Plaintiff and (c) in the alternative, a decree of recovery of sum of Rs. 10,00,000/- along with interest towards compensation.
PLAINT
2. The brief facts of the case as mentioned in the plaint are Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 3 of 40 reproduced here as under:
(i) It is averred that the Defendant had represented himself as owner in possession of plot bearing nos. 117 and 118, street / block / khasra no. 159, colony known as Vipin Garden, Uttam Nagar, New Delhi-59, area measuring 135 sq. yards having built up ground floor and first floor and that he agreed to sell and transfer the same to the Plaintiff for a total consideration of sum of Rs. 95,00,000/- according to the terms and conditions of the agreement to sell and purchase / bayana agreement dated 07.08.2021 entered into and executed between the parties. It is further averred that a payment of Rs.
10,00,000/- was given by the Plaintiff in cash to the Defendant and a cheque bearing no. 107212 dated 15.08.2021 for Rs. 5,00,000/- drawn on Allahabad Bank as advance / part payment and that the Defendant had agreed to complete the sale transaction in favour of the Plaintiff on or before 07.01.2022 and balance sale consideration to the tune of Rs. 80,00,000/- was to be paid by the Plaintiff to the Defendant.
(ii) It is alleged that the Defendant had not presented the aforesaid cheque for its encashment for the reasons best known to him. It is further submitted that the Plaintiff had approached the Defendant Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 4 of 40 several times for completing the sale transaction but the Defendant kept on avoiding the same on one pretext or the other. It is submitted that the Plaintiff had called the Defendant on 05.01.2022 but the Defendant had shown his inability to complete the sale transaction and perform his part of the agreement to sell. Consequently, Plaintiff served a notice dated 08.01.2022 upon the Defendant and a reply dated 01.02.2022 was received by the Plaintiff wherein the Defendant had denied the receipt of the aforesaid part sale consideration.
(iii) Aggrieved, Plaintiff has filed the present suit for specific performance, possession, injunction and compensation. PROCEEDINGS OF THE CASE
3. Summons for settlement of issues along with notice of the application under Order XXXIX R 1 and 2 of CPC were issued to the Defendant and thereafter, Written Statement was filed on behalf of the Defendant to which Replication was also filed by the Plaintiff. Thereafter, arguments were heard on the application under Order XXXIX R 1 and 2 of CPC and vide order dated 21.05.2022, the aforesaid application was dismissed and disposed off.
4. It is alleged by the Defendant in the written statement that the Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 5 of 40 suit filed by the Plaintiff is not maintainable and is liable to be dismissed. It is further alleged that the Plaintiff has himself not performed his part of the agreement to sell. It is submitted that the Defendant has not received any amount from the Plaintiff towards sale consideration. It is alleged that the cause of action does not arise in favour of the Plaintiff and the suit be dismissed under the provisions of Order VII R 11 of CPC. It is further alleged that the Plaintiff has not approached the Hon'ble Court with clean hands and has also concealed the material facts from the Court.
5. The Defendant has admitted in his written statement that the an agreement was prepared between the parties but the same was never executed / complied with by the Plaintiff. It is submitted that in the meeting for the proposal for the sale and purchase of the property amongst the Plaintiff and Defendant being the buyer and seller, the agreement was typed, the Plaintiff had proposed the cash amount of Rs. 10,00,000/- and a cheque of Rs. 5,00,000/- to be given to the Defendant and in that meeting, the Defendant had denied to receive the amount of Rs. 10,00,000/- in cash being the offence under the provisions of Income Tax Act after having conversation with his Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 6 of 40 Chartered Accountant and thereafter, the Plaintiff agreed to prepare a demand draft or would give the cheque to the Defendant for the earnest amount of Rs. 15,00,000/-. However, the said amount was not given by the Plaintiff to the Defendant as alleged in the WS.
6. In Replication filed by the Plaintiff, the Plaintiff has denied the averments of the Defendant in the written statement and reiterated the contents of the plaint.
FRAMING OF ISSUES
7. Admission-denial of documents was not recorded on behalf of the parties. On basis of the aforesaid pleadings, on 27.09.2022, the following issues were framed:-
(a) Whether the Plaintiff and Defendant had concluded and executed an agreement to sell dated 07.08.2021 marked as Mark A? (OPP)
(b) Whether the Plaintiff was ready and willing to perform his part of the agreement to sell dated 07.08.2021 (Mark A)? (OPP)
(c) Whether the Plaintiff is entitled to a decree of specific performance of contract (Mark A)? (OPP) Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 7 of 40
(d) Whether the Plaintiff is entitled to a decree of permanent injunction as against the Defendant? (OPP)
(e) Whether the Plaintiff had paid sum of Rs. 10,00,000/- to t he Defendant as earnest money? (OPP)
(f) If relief of specific performance is not granted, whether the Plaintiff is entitled to relief of refund of Rs.
10,00,000/- from the Defendant? (OPP)
(g) Relief.
No other issue arose or claimed by the parties and matter was proceeded for plaintiff's evidence.
EVIDENCE LED BY THE PARTIES
8. On 20.03.2023, PW-1 Sh. Sultan Singh Gujjar had tendered his evidence by way of affidavit exhibited as Ex. PW1/A and relied upon the following documents:
(a) Original agreement to sell dated 07.08.2021 as Ex. PW1/1;
(b) Screenshot of unanswered calls made by the deponent to the Defendant from his mobile on 05.01.2022 and call received from his whatsapp mobile number as Ex. PW1/2 and Ex. PW1/3 respectively;
(c) True copy of legal notice dated 08.01.2022 with original postal Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 8 of 40 receipts, net tracking reports and original reply dated 01.02.2022 received from Sh. Mukesh Kumar Sharma as Ex. PW1/4 to Ex. PW1/8 respectively;
(d) Certificate u/s 65B of the Indian Evidence Act as Ex. PW1/9 and
(e) Photocopy of sale deed dated 22.12.2021 as Mark A.
9. It was deposed by the PW-1/Plaintiff in his cross-examination that he did not know that the transaction of an amount of Rs. 10,00,000/- in cash is a punishable offence under the provisions of Income Tax Act. The witness admitted that the cheque of Rs. 5,00,000/- given to the Defendant was never encashed by the Defendant. Relevant portion of the cross-examination of the Plaintiff is extracted herein:
"........It is correct that at the time of execution of the agreement, there were two witnesses present, namely Advocate Sh. Jyoti Tiwari and my son namely Sh. Gautam. It is also correct that both the aforesaid persons have signed the agreement as witnesses. It is correct that the agreement Ex. PW1/1 is the same agreement executed between me and the defendant. It is correct that Sh. Gautam, i.e. one of the witness Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 9 of 40 does not have signatures at point 2 at the column of witnesses in the agreement.............." The Plaintiff has admitted in his cross- examination that he had not prayed for double the amount of earnest money in his suit. It was deposed by the Plaintiff that he had not placed on record his bank account statements and that no separate receipt of payment of Rs. 10,00,000/- was prepared between the parties. The witness denied the suggestion that he had backed out from the terms and conditions of the agreement to sell Ex. PW1/1. The Plaintiff denied the suggestion that at that time, only the cheque of Rs. 5,00,000/- was returned to him by the Defendant.
10. Thereafter, on 02.09.2023, PW-2 Sh. Anil, Senior Assistant was examined and the summoned record brought by him was exhibited as Ex. PW2/1. He was cross examined and discharged. On 18.11.2023, PW-3 Mrs. Jyoti Tewari had tendered her evidence by way of affidavit exhibited as Ex. PW3/A. During her cross-examination, she deposed that she was paying the rent to the Plaintiff for her office situated at the ground floor of the premises of the Plaintiff. She denied the suggestion that no amount of Rs. 10,00,000/- in cash was given by the Plaintiff to the Defendant. She was questioned by the Ld. Counsel for Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 10 of 40 Defendant as to whether being an Advocate, was it in the knowledge of the witness that the transaction of cash was an illegal transaction or not. The witness answered that the transaction of cash was not illegal so long as the person is paying the taxes for the same. Thereafter, the witness was discharged.
11. No other witness was examined on behalf of the Plaintiff and therefore, PE was closed vide separate statement of the Ld. Counsel for Plaintiff on 18.11.2023 and matter was proceeded for Defendant's evidence.
12. On 20.04.2024, DW-1 / Defendant had tendered his evidence by way of affidavit exhibited as Ex. DW1/A and during cross- examination, he admitted that the suit property was purchased by him from the Plaintiff in the year 2012 and that he had paid the entire sale consideration amount in cash. The witness further admitted that the entire sale consideration for the sale and purchase of the suit property in the year 2021 was of Rs. 95,00,000/-. The Defendant deposed that he had known Ms. Jyoti Tewari at least one month prior to the execution of the agreement dated 07.08.2021. The witness had denied the suggestion that a sum of Rs. 10,00,000/- was paid to him in cash Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 11 of 40 on the day of the agreement and also denied that a cheque of Rs. 5,00,000/- was also handed over to him on the same day itself. The Defendant had voluntarily stated that the Plaintiff wanted to give the cash and cheque but the Defendant refused to accept the cash after talking with his CA. He further deposed that he did not ask for the return of the original agreement to sell. The witness further deposed that he had returned the cheque on 07.08.2021. The witness / Defendant deposed that the Plaintiff was to pay the consideration amount through account transfer or cheque which was not done by him. Defendant admitted that it is not mentioned that a sum of Rs. 15,00,000/- was required to be paid by RTGS by the Plaintiff. The Defendant had denied the suggestion that the Plaintiff had called him on 05.01.2022 on his mobile number. It was deposed by the Defendant that he is not willing to sell the property to the Plaintiff.
13. No other witness was examined on behalf of the Defendant and DE was closed vide separate statement of the Defendant. Matter was thereafter, proceeded for final arguments. CONTENTIONS OF THE PARTIES
14. Final arguments were heard on behalf of the parties. Rebuttal Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 12 of 40 arguments also heard. Following judgments were filed on behalf of the Plaintiff:
(a) V. Anantha Raju and Ors. Vs. T.M. Narasimhan and Ors in civil appeal no. 6469/2021 dated 26.10.2021 passed by Hon'ble Supreme Court of India and
(b) Global Music Junction Pvt. Ltd. Vs. Shatrughan Kumar and Ors FAO (OS) (COMM) 7/2023 dated 05.09.2023 passed by Hon'ble High Court of Delhi.
15. Ld. Counsel for Plaintiff has argued that the plaintiff has been able to prove his case on a preponderance of probabilities. He has relied heavily on the provisions of Section 91 & 92 of the Indian Evidence Act, 1872, to say that the defendant cannot be heard to say that he never received 10,00,000 in cash from the plaintiff or that he never received or that he returned the cheque of Rs 5,00,000. He has submitted that post the 2018 Amendment to the Specific Relief Act, the Court is left with no discretion to refuse specific performance.
16. Per contra, Ld. Counsel for Defendant has argued that the Plaintiff could not prove his case and that the suit should be dismissed. He submitted that the witnesses to the agreement to sell were Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 13 of 40 interested witnesses being the son of the plaintiff who was never examined and the second being the lawyer who was also a tenant of the plaintiff and therefore they would not depose to the facts truthfully. He has submitted that the understanding between the parties was that the plaintiff would pay the earnest money by way of a demand draft and therefore, the defendant had turned down the offer of cash payment and returned the cheque of Rs 5 lakhs. He submitted that as the plaintiff did not comply with the agreement therefore the same stood nullified and hence the plaintiff does not deserve the specific performance.
FINDINGS
17. The following observations and inferences can be drawn from the record and evidence adduced by the parties :-
a) The central fact of the case that gets established from the record is the execution of the agreement to sell and purchase dated 07.08.2021 (Ex PW1/1) between the plaintiff and defendant. The said agreement was proved in original. That the said agreement bears the signatures of the defendant is an admitted fact. Notably, the defendant does not Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 14 of 40 plead that his mind did not accompany the act i.e. the plea of non est factum. During cross examination he deposed that " it is correct that I had read the contents of the agreement to sell Ex PW1/1 before signing the same....it is correct that my signatures are reflecting on each and every page of the agreement to sell.....it is further correct that the said agreement to sell bears my photograph as well as my thumb impression on the first page". Therefore the defendant intentionally signed the agreement to sell and therefore this is not a case where any fact has been pleaded which would make the contract void or voidable. Here it would be apposite to refer to the relevant recitals of the agreement which have bearing on the controversy, the portion extracted herein :- "Whereas the First Party has agreed to sell/transfer the aforesaid property to the Second Party who has agreed to purchase for the total consideration amount of Rs 95,00,000....1. That in consideration of the above mention amount the first party has received a sum of Rs 10,00,000..by cash and 5,00,000 by cheque no 107212 dated 15/08/2021........."
b) The point of divergence and dispute between the two parties arises Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 15 of 40 because of the specific stand taken by the defendant in the Written statement where the defendant pleads that " the true and correct events which took place are that in the meeting for the proposal for the sale and purchase of the property was exchanged amongst the plaintiff and defendant being the buyer and the seller, the agreement was typed, the plaintiff proposed the cash amount of Rs 10 lakh and a cheque of Rs 5 lakh to be given to defendant. The date of the meeting was 7 of august 2021 and the day was Saturday. Upon this in that very meeting the defendant denied and refused to receive the amount of Rs 10 lakh in cash being the offence under the provisions of Income Tax Act after having conversation from his C.A. The plaintiff in that very meeting accepted that on Monday or by Tuesday I.e. 9 th or by 10th of August 2021, he will prepare demand draft or will give the cheque to the defendant for the amount of earnest money....thereafter the plaintiff himself had not given any of the amount and has miserably failed to perform his part which was necessary to initiate to deal. Hence in this manner the defendant had not received any of the amount from the side of the plaintiff and the agreement along with the cheque of Rs 5 lakhs was taken by the plaintiff.....".
Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 16 of 40
(c) During the cross examination DW-1 deposes that " I had called my CA after signing the agreement. I had asked Ms Jyoti Tewari to prepare fresh agreement to sell. I did not ask for the return of the original agreement to sell. She had asked me to cut the relevant portion of the agreement and to sign on the same. I do not remember whether I had done so....I had not sent any written legal notice for alteration and preparation of fresh agreement. (Vol. I had called the plaintiff but he was not accepting my calls).....".
(d) The plaintiff has proved that he sent the legal notice Ex PW1/4 to the defendant dated 08/01/2022, as the last date of performance of the agreement was set at 07/01/2022, and that the defendant received the said legal notice on 13/01/2022 as per deliver report Ex PW1/7, and that the defendant replied to the legal notice by way of reply dated 01/02/2022 which was proved as Ex PW1/8. None of the aforesaid facts are seriously disputed between the parties or at the bar.
(e) Once the defendant admitted the signing of the agreement without Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 17 of 40 pleading any fraud, misrepresentation and coercion, and once the agreement contains the recital of acceptance of Rs 10 lakhs in cash and Rs 5 lakhs by way of cheque, the onus fell upon the defendant to prove his version of the story, even assuming he could do so in the teeth of Section 91 & 92 of the Indian Evidence Act.
(f) I find that the defendant has not led cogent evidence to discharge this onus. The reasons for coming to the said conclusion are (i) The crucial story is that after signing of the agreement, the defendant called his Chartered Accountant to seek advice on the acceptance of cash. The name of such chartered accountant was not mentioned, he was not produced as a witness and no proof of his phone number or call records produced to corroborate this version; (ii) the stand of the defendant qua the acceptance of the cheque of Rs 5 lakhs is contradictory and unreliable since whereas in his written statement and reply to legal notice Ex PW 1/8 the defendant states that he never was handed over any cheque of 5 lakhs by the plaintiff and that he refused to accept the cash or cheque (incidentally, whether the cheque was offered or not is kept unclear in these versions), the defendant in Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 18 of 40 his cross examination deposes that "I had handed over the cheque of Rs 5 lacs by hand. I did not take any receiving for return of cheque. I had returned the cheque on the same day i.e. 07.08.2021. ...It is wrong to suggest that I am still having the cheque of Rs 5 lacs in my possession and that I deliberately did not present the same (Vol. The same may be in possession of Ms Jyoti Tewari as I had returned the cheque by hand on the same day). This version, which was never mentioned anywhere else crops up as a major improvement on the previous statements during the cross examination. In the reply Ex PW1/8, the defendant avers that "it is submitted that as there is no any kind of transaction between your client and my client as the alleged cheque was not given by your client to my client, hence no question arose that my client did not present the same for encashment or return the same to your client...". The said versions are therefore directly contradictory to each other, and therefore, the adverse inference has to be drawn against the defendant, and his testimony is rendered unreliable and untrustworthy; (iii) the agreement was admittedly signed on 07.08.2021 and admittedly as per the defendant's version dispute over the mode of payment arose on the same day, he had Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 19 of 40 signed the agreement acknowledging the receipt of Rs 15,00,000 by way of cheque and cash, however for reasons best known to the defendant, he remained silent and never protested to the plaintiff, even as per his own version in the cross examination. Even though, it can be reasonably presumed that the defendant must be savvy enough to know that the agreement containing the incriminating recitals could be used against him, nary a whisper arose from his lips before the reply in response to the legal notice in February of 2022, more than 5 months later, and well after the due date of performance. The agreement of 07.08.2021 does not appear in fact to be a light hearted caper but rather the same was signed, and even thumb impressions were affixed, a lawyer was involved in the drafting as per the admitted case between the parties, who also witnessed the agreement. After going through these earnest rituals, if the defendant remained silent and paid no heed to the same, surely an adverse inference can be drawn against the defendant and it has to be found that the recitals regarding the acceptance of the cash and handing over of the cheque are true; (iv) the defendant could not dislodge the evidence of PW-3 Ms Jyoti Tiwari who deposed in favour of the plaintiff. The only Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 20 of 40 ground to impeach the witness was that she was the tenant of the plaintiff, but that is hardly sufficient ground to show that the witness had completely compromised on her professional integrity, especially when the defendant does not refute the contents or the execution of the agreement. Surprisingly, the defendant, though well aware of the contents at the time of signing of the agreement, did not insist that the necessary recitals be scratched off with the consent of the parties, nor did he follow up at any time with PW-3 for the drawing up of an addendum to the agreement showing the true state of the facts as per the version of the defendant. Instead, the defendant remained aloof and silent.
(g) The defendant's version, having been found to be unreliable and unproved, the contents of the agreement of Ex PW1/1 must be taken to be representing the true version of the affairs as they existed between the plaintiff and defendant. Therefore I find that the plaintiff has been able to prove his version viz. that he paid as sum of Rs 10,00,000 in cash to the defendant, that he also handed over a cheque of Rs 5,00,000 that was never encashed by the defendant. Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 21 of 40
(h) The central factual controversy being settled, it has to be then considered whether the plaintiff is eligible for the relief of specific performance. Due to the crucial amendment carried out in the Specific Relief Act, 1963 with effect from 01/10/2018, which amendment was prospective in nature and therefore, the said amendment would be applicable to the present dispute, the agreement being executed in the year 2021, well after the coming into force of the relevant provisions of the amending act, it has to be considered that the present regime is very different from the earlier regime, inasmuch as the discretion of the court in granting the specific performance of contract has been done away with. In Global Music Junction (P) Ltd. v. Shatrughan Kumar, 2023 SCC OnLine Del 5479, which was cited at bar by the Ld Counsel for the Plaintiff, the Hon'ble High Court of Delhi has discussed the impact of the same in lucid detail, the relevant observations are extracted herein :-
"38. This Court is of the view that the Amendment Act, 2018 introduces a paradigm shift in law regarding contractual enforcement in India. A glaring instance of the legislative shift is the amendment of Section 14 of Act, 1963 which deletes the earlier sub-clause (a) which Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 22 of 40 prescribed that the contracts for the non-performance of which compensation in money was an adequate relief would not be specifically enforced, meaning thereby that the plea that a party could be compensated in monetary terms as damages for breach of the contract and resultant refusal of interim injunction on the said ground, is no longer a ground to refuse specific performance of the contract. Consequently, the Amendment Act, 2018 does away with the primacy given to damages as a relief over specific performance. It shifts the focus from the previous default remedy of award of damages for breach of contract to enforcing specific performance of contracts. To highlight the change some of the provisions of the Act, 1963 and the Amendment Act, 2018 are contrasted herein below:--
Section Act of 1963 Act as amended, effective on 01.10.2018 Section 10 10. Cases in which specific 10. Specific performance performance of contract in respect of contracts. enforceable-
The specific performance Except as otherwise of a contract shall be provided in this Chapter, enforced by the court the specific performance of subject to the provisions any contract may, in the contained in subsection (2) discretion of the court, be of section 11, section 14 enforced- and section 16.
(a) when there exists no Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 23 of 40 standard for ascertaining actual damage caused by the non-performance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation: Unless and until the contrary is proved, the court shall presume-
(i) that the breach of a
contract to transfer
immovable property cannot
be adequately relieved by
compensation in money;
and
(ii) that the breach of a
contract to transfer
movable property can be so
relieved except in the
following cases:
Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 24 of 40
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff.
Section 14 14. Contracts not 14. Contracts not specifically enforceable.- specifically enforceable.- (1) The following contracts The following contracts cannot be specifically cannot be specifically enforced, namely,- enforced, namely:--
(a) a contract for the non- (a) where a party to the performance of which contract has obtained compensation is an substituted performance of adequate relief; contract in accordance with the provisions of
(b) a contract which runs section 20;
into such minute or
numerous details or which (b) a contract, the
is so dependent on the performance of which
Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 25 of 40 personal qualifications or involves the performance volition of the parties, or of a continuous duty which otherwise from its nature is the court cannot supervise;
such, that the court cannot
(c) a contract which is so
enforce specific
dependent on the personal
performance of its material
qualifications of the parties
terms;
that the court cannot
(c) a contract which is in its enforce specific
nature determinable; performance of its material
terms; and
(d) a contract the
performance of which (d) a contract which is in
involves the performance its nature determinable.
of a continuous duty which the court cannot supervise.
(2) Save as provided by the Arbitration Act, 1940, no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than arbitration agreement to which the provisions of the Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 26 of 40 said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.
(3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases:
(a) where the suit is for the enforcement of a contract,-
(i) to execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once:
PROVIDED that where only a part of the loan has been advanced the vendor Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 27 of 40 is willing to advance the remaining part of the loan in terms of the contract; or
(ii) to take up and pay for any debentures of a company;
(b) where the suit is for,-
(i) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership;
or
(ii) the purchase of a share of a partner in a firm;
(c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land:
PROVIDED that the following conditions are Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 28 of 40 fulfilled, namely,-
(i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work;
(ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-
performance of the contract is not an adequate relief;
and
(iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 29 of 40 executed.
Section 16 16. Personal bars to relief.- 16. Personal bars to relief.-
Specific performance of a Specific performance of a contract cannot be enforced contract cannot be in favor of a person- enforced in favour of a person-
(a) who would not be
entitled to recover (a) who has obtained
compensation for its substituted performance of
breach; or contract under section 20;
or
(b) who has become
incapable of performing, or (b) who has become
violates any essential term incapable of performing, or of, the contract that on his violates any essential term part remains to be of, the contract that on his performed, or acts in fraud part remains to be of the contract, or willfully performed, or acts in fraud acts at variance with, or in of the contract, or wilfully subversion of, the relation acts at variance with, or in intended to be established subversion of, the relation by the contract; or intended to be established by the contract; or
(c) who fails to aver and prove that he has (c) who fails to prove that performed or has always he has performed or has been ready and willing to always been ready and Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 30 of 40 perform the essential terms willing to perform the of the contract which are to essential terms of the be performed by him, other contract which are to be than terms of the performed by him, other performance of which has than terms of the been prevented or waived performance of which has by the defendant. been prevented or waived by the defendant.
Explanation: For the
purposes of clause (c),- Explanation.-For the
purposes of clause (c),-
(i) where a contract
involves the payment of (i) where a contract
money, it is not essential involves the payment of for the plaintiff to actually money, it is not essential tender to the defendant or for the plaintiff to actually to deposit in court any tender to the defendant or money except when so to deposit in court any directed by the court; money except when so directed by the court;
(ii) the plaintiff must aver performance of, or (ii) the plaintiff must prove readiness and willingness performance of, or to perform, the contract readiness and willingness according to its true to perform, the contract construction. according to its true construction.
Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 31 of 40 Section 20 20. Discretion as to 20. Substituted decreeing specific performance of contract.- performance.-
(1) Without prejudice to (1) The jurisdiction to the generality of the decree specific provisions contained in the performance is Indian Contract Act, 1872 discretionary, and the court (9 of 1872), and, except as is not bound to grant such otherwise agreed upon by relief merely because it is the parties, where the lawful to do so; but the contract is broken due to discretion of the court is non-performance of not arbitrary but sound and promise by any party, the reasonable, guided by party who suffers by such judicial principles and breach shall have the capable of correction by a option of substituted court of appeal. performance through a third party or by his own (2) The following are cases agency, and, recover the in which the court may expenses and other costs properly exercise discretion actually incurred, spent or not to decree specific suffered by him, from the performance:
party committing such
(a) where the terms of the breach.
contract or the conduct of (2) No substituted the parties at the time of Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 32 of 40 entering into the contract or performance of contract the other circumstances under sub-section (1) shall under which the contract be undertaken unless the was entered into are such party who suffers such that the contract, though breach has given a notice not voidable, gives the in writing, of not less than plaintiff an unfair thirty days, to the party in advantage over the breach calling upon him to defendant; or perform the contract within such time as specified in
(b) where the performance the notice, and on his of the contract would refusal or failure to do so, involve some hardship on he may get the same the defendant which he did performed by a third party not foresee, whereas its or by his own agency :
non-performance would
Provided that the party
involve no such hardship
who suffers such breach
on the plaintiff; or
shall not be entitled to
(c) where the defendant
recover the expenses and
entered into the contract
costs under subsection (1)
under circumstances which
unless he has got the
though not rendering the
contract performed through
contract voidable, makes it
a third party or by his own
inequitable to enforce
agency.
specific performance.
(3) Where the party
Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 33 of 40 Explanation 1: Mere suffering breach of inadequacy of contract has got the consideration, or the mere contract performed through fact that the contract is a third party or by his own onerous to the defendant or agency after giving notice improvident in its nature, under sub-section (1), he shall not be deemed to shall not be entitled to constitute an unfair claim relief of specific advantage within the performance against the meaning of clause (a) or party in breach.
hardship within the
(4) Nothing in this section
meaning of clause (b).
shall prevent the party who
Explanation 2: The has suffered breach of
question whether the contract from claiming
performance of a contract compensation from the
would involve hardship on party in breach. the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 34 of 40 the time of the contract.
(3) The court may properly
exercise discretion to
decree specific
performance in any case
where the plaintiff has
done substantial acts or
suffered losses in
consequence of a contract
capable of specific
performance.
(4) The court shall not
refuse to any party specific
performance of a contract
merely on the ground that
the contract is not
enforceable at the instance
of the party.
Section 21 21. Power to award 21. Power to award
compensation in certain compensation in certain cases- cases.-
(1) In a suit for a specific (1) In a suit for specific performance of a contract, performance of a contract, the plaintiff may also claim the plaintiff may also claim Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 35 of 40 compensation for its compensation for its breach, either in addition breach in addition to such to, or in substitution of, performance. such performance.
(2) If, in any such suit, the (2) If, in any such suit, the court decides that specific court decides that specific performance ought not to performance ought not to be granted, but that there is be granted, but that there is a contract between the a contract between the parties which has been parties which has been broken by the defendant, broken by the defendant, and that the plaintiff is and that the plaintiff is entitled to compensation entitled to compensation for that breach, it shall for that breach, it shall award him such award him such compensation accordingly. compensation accordingly.
(3) If, in any such suit, the (3) If, in any such suit, the court decides that specific court decides that specific performance ought to be performance ought to be granted, but that it is not granted, but that it is not sufficient to satisfy the sufficient to satisfy the justice of the case, and that justice of the case, and that some compensation for some compensation for breach of the contract breach of the contract should also be made to the Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 36 of 40 should also be made to the plaintiff, it shall award him plaintiff, it shall award him such compensation such compensation accordingly.
accordingly.
(4) In determining the
(4) In determining the amount of any
amount of any compensation awarded
compensation awarded under this section, the
under this section, the court court shall be guided by shall be guided by the the principles specified in principles specified in section 73 of the Indian section 73 of the Indian Contract Act, 1872 (9 of Contract Act, 1872. 1872).
(5) No compensation shall (5) No compensation shall be awarded under this be awarded under this section unless the plaintiff section unless the plaintiff has claimed such has claimed such compensation in his plaint: compensation in his plaint:
PROVIDED that where the Provided that where the plaintiff has not claimed plaintiff has not claimed any such compensation in any such compensation in the plaint, the court shall, the plaint, the court shall, at any stage of the at any stage of the proceeding, allow him to proceeding, allow him to amend the plaint on such amend the plaint on such Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 37 of 40 terms as may be just, for terms as may be just, for including a claim for such including a claim for such compensation. compensation.
Explanation.-The
Explanation: The
circumstances that the
circumstance that the
contract has become
contract has become
incapable of specific
incapable of specific
performance does not
performance does not
preclude the court from
preclude the court from
exercising the jurisdiction
exercising the jurisdiction
conferred by this section.
conferred by this section.
18. This Court is of the view that by virtue of the changes brought about by the Amendment Act, 2018, the Courts will now grant specific performance unless the claim for relief is barred under limited grounds prescribed in the statute. This change is aimed at providing greater protection of contractual expectations by ensuring that a non-
defaulting party can obtain the performance it bargained for. The Amendment Act, 2018 intends to discourage errant parties who may deem it more viable to breach a contract than perform it, as the cost of damages may still be less than the cost of the performance.
19. The Amendment Act, 2018 has also brought the Indian Specific Performance Act in line with the UNIDROIT Principles of International Commercial Contracts, as it aspires to achieve Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 38 of 40 harmonization in international law governing commercial contracts."
(i) Therefore, the aspect to be considered is whether the plaintiff was ready and willing to perform his portion of the contract i.e. whether he was ready and willing to pay the sale consideration. If he was, the plaintiff's suit must be decreed. In support of his averment, the plaintiff has pleaded that in fact, in order to arrange the funds he had sold another of his properties, and to prove the same he produced PW- 2 who was the formal witness to prove the sale dated executed by him in favour of one Sunita Yadav which was proved as Ex PW 2/1 dated 24.12.2021. He testified that he had called the defendant on his mobile phone repeatedly and was given one excuse after another. He proved that he had sent the legal notice dated 08.01.2022, only one day after the last date of performance of the agreement. Pertinently, there is no cross examination of the plaintiff on this point, as the cross examination was solely focused upon the payment of Rs 10,00,000 cash, which has been discussed above. In the absence of any relevant cross examination, and considering the surrounding facts and circumstances, I find that the plaintiff has been able to prove that he was ready and willing to perform his portion of the agreement. The plaintiff was not required to prove that he had the exact cash in hand, but only that he was having the financial wherewithal, and the willingness to comply with the agreement. The defendant never invited the plaintiff to come forward with the sale consideration and it was not even his defence that the the plaintiff did not have the ready available cash with him. The plaintiff had given a legal notice one day Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 39 of 40 after the last date fixed for performance of the agreement. The present suit has been filed on 14.02.2022, soon after the plaintiff received notice of the refusal of the defendant to comply with the agreement, which would be earliest on 01.02.2022 which was the date of the reply of the legal notice Ex PW 1/8. The fact that plaintiff approached the Court of law promptly is yet another circumstance to show that the plaintiff was interested in performing the agreement.
(j) In light of the above, the issues I to IV are decided in favour of the plaintiff and against the defendant, and as the relief of specific performance has to be granted, Issue no V becomes infructuous. RELIEF
20. In view of the aforesaid discussion, the suit of the Plaintiff is decreed with the following reliefs :- a decree of specific performance is passed in favour of the plaintiff in the following terms : the plaintiff is directed to offer to pay the balance sale consideration of Rs 85,00,000 (Eighty Five Lacs) to the defendant within 4 weeks, accordingly, as per the agreement to sell Ex PW 1/1, a sale deed in respect of the suit property being Plot bearing no 117 & 118 Kh no 159, Vipin Garden, Uttam Nagar New Delhi-59 will be executed by the defendant in favour of the plaintiff on the sale consideration being tendered. In case the sale deed is not executed it would be open to the Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma CS DJ ADJ 126/22 Page 40 of 40 plaintiff to seek execution of the decree under Order XXI Rule 32 CPC. The defendants are also permanently injuncted from creating any third party interest other than in accordance with the present decree and judgment in the suit property. The requisite stamp duty and other charges for execution of sale deed would also be paid by the plaintiff. Costs of the suit are awarded to the plaintiffs.
21. Decree sheet be prepared accordingly.
22. File be consigned to Record Room after due compliance.
Digitally signed by DIVYANG DIVYANG THAKUR THAKUR Date: 2024.09.10 16:31:59 +0530 Announced in the open court (Sh. Divyang Thakur) On 10.09.2024 DJ-03/South West Dwarka / New Delhi
Sh. Sultan Singh Gujjar Vs. Sh. Sanjay Sharma