Delhi High Court
Somani Marketing Pvt. Ltd. And Anr. vs Subhash C. Raswant on 31 August, 1998
Equivalent citations: 75(1998)DLT625, 1998(47)DRJ427
Author: M.S.A. Siddiqui
Bench: M.S.A. Siddiqui
JUDGMENT M.S.A. Siddiqui, J.
1. The plaintiffs filed the present suit seeking, inter alia, the following reliefs :-
a) pass a decree of specific performance against the Defendant, thereby directing the Defendant to specifically perform his obligation to register the relevant Lease Deed for the period from 1st August, 1998 to 31st July, 2000 in respect of the suit premises.
b) in case the Defendant fails to have the Lease Deed or Lease Deeds referred to in paragraph (a) above registered, this Hon'ble court may appoint an Officer of the court to have the Lease Deed registered;
c) pass a decree of declaration that the Plaintiff No. 1 is entitled to continue as tenant of the said premises and is entitled to remain in possession thereof as such tenant on payment of the agreed monthly rental of the demised premises.
d) pass a decree of permanent injunction restraining the Defendant his servants & agents from of dispossessing of the plaintiffs from the suit premises being the Ground and First Floor of building and property situated at No. D-979, New Friends Colony, New Delhi -110 065.
e) pass a decree of permanent injunction restraining the Defendant his servants & agents in interfering in the peaceful enjoyment of the suit premises being the Ground and First Floor of building and property situated at No. D-979, New Friends Colony, New Delhi -110 065;
f) the costs of this suit be awarded;
According to the plaintiffs, the defendant is the owner of the premises bearing No. D-979, New Friends Colony, New Delhi (hereinafter to be referred as the suit premises). Both the companies (plaintiffs Nos. 1 and 2) are under the common management and control of their Chairman Mr. D.K.Somani. On 19th July, 1990, the plaintiff No.2 took the suit premises on rent for a period of three years. After the expiry of the said lease, a fresh lease was entered into by the parties on 8th February, 1993 whereby the rent of the suit premises was increased to Rs. 25,000/- per month. On expiry of the said lease, the same was renewed for a further period of three years under the lease deed dated 25th July, 1995 and the rent was increased to Rs. 30,000/-. It is stated in the plaint that on 20th July, 1998, the defendant expressed his intention to renew the lease and after negotiations, the defendant agreed to renew the lease for a further period of two years and for that purpose, the parties agreed to enter into a fresh lease agreement. According to the terms of the agreement, the suit premises were to be let out to the plaintiff No.1 at a rent of Rs. 37,500/- per month and the plaintiff No. 1 was also required to pay to the defendant an amount of Rs. 1,25,000/- as security deposit. It is further pleaded that pursuant to the advice of the defendant, the plaintiff No. 1 got a draft lease agreement prepared and handed it over to the defendant for his approval. On 1st August, 1998, defendant made certain corrections in the draft and returned it to the plaintiff No. 1. By the letter dated 1st August, 1998 the plaintiff No.1 conveyed its approval to the defendant with regard to the terms and conditions as amended by the defendant in the said draft. In consideration of the said agreement, the plaintiff No. 1 also paid to the defendant a sum of Rs.2,25,000/- towards advance rent and hire charges of the fixtures and fittings for three months vide two cheques dated 1st August, 1998. The defendant accepted both the aforesaid cheques and asked the plaintiff No. 1 to procure the necessary stamp papers for the execution and registration of the lease deed. On 18th August, 1998, the plaintiff No. 1 purchased the requisite stamp papers for an amount of Rs. 9,000/- for the purpose of execution and registration of a lease deed between the parties. Surprisingly, on 19th August, 1998, the defendant left the country without executing the deed of lease. Hence this suit.
3. The document dated 1st August, 1998 is the foundation of the plaintiffs' main relief for specific performance of the alleged contract of tenancy and other reliefs claimed by the plaintiffs are consequential to the main relief. Learned counsel for the plaintiffs has fairly conceded that in view of the decisions of the Supreme Court in AIR 1968 SC 694 and , the plaintiffs can not invoke the equitable doctrine of part-performance embodied in Section 53-A of the Transfer of Property Act as the basis of the present suit. According to the averments made in the plaint, it appears that the plaintiff No. 1 had sent to the defendant the draft of agreement to lease dated 1st August, 1998. After receipt of the said draft, the defendant made certain changes in the draft and sent it back to the plaintiffs with a note (at page 36 of the paper book) to the effect that he would like to have a final look at the draft before its finalisation. Learned counsel relies strongly on these changes/corrections alleged to have been made by the defendant in the draft agreement dated 1st August, 1998 for his contention that the said document was a concluded contract of tenancy.
4. The question is whether the document dated 1st August, 1998, read with the note (at page 36 of the paper book) constitutes a final and concluded contract which the parties intended to be binding, or whether it was only a part of the negotiations which were not intended to be binding at the stage. Needless to say that a contract is an agreement enforceable by law and is the result of a proposal and acceptance of the proposal. Ordinarily, there are three well defined stages in a contract of tenancy. The first of these stages is the period of negotiations in which suggestions and counter suggestions are bandied to and fro. When this stage is concluded, we reach the second stage at which the parties have reached agreement. At this point they can either settle the matter finally or agree to reduce their points of agreement to writing and agree to have drawn up in a formal document. The execution of the formal document is the third stage.
5. In the instant case, the document dated 1st August, 1998 has not been signed by any party. It is merely a draft of an agreement to lease which was sent to the defendant for his approval. According to the plaintiffs, after receipt of the draft, the defendant made certain changes/corrections and sent it back to the plaintiffs with a note (at page 36 of the paper book) for its resubmission for final approval of the defendant. While returning the draft to the plaintiffs, the defendant clearly intended not to bind himself at that stage to the terms and conditions contained in the draft. Most persons prefer to "sleep over" an important question before committing themselves finally. They want to see what it all looks like in its formal shape before deciding one way or the other irrevocably. This is explained by Lord Blackburn in Rositer Vs. Miller (1877) 3 A.C. 1124 at page 1152, as under:
"Parties often do enter into a negotiation meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, & then (if on seeing the result in that shape they find they are agreed) signed & made binding; but that each party is to reserve to himself the right to retire from the contract, if, on looking at the formal contract he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think that the parties ought not to be held bound till they have executed the formal agreement."
6. It is worth mentioning that it is not the case for the plaintiffs that possession of the suit premises was delivered to the plaintiff No.1 in pursuance of the document dated 1st August, 1998. A combined reading of the draft dated 1st August, 1998 and the note (at page 36) clearly shows that the proposal for creating a contract of tenancy was still in the stage of negotiations and these negotiations did not form a binding agreement of tenancy between the parties. The offerer (plaintiff No. 1) cannot impose upon the offeree (defendant) an obligation to accept the offer. Thus, the draft dated 1st August, 1998 was only a part of the negotiations which were not intended to be building at the stage. In this view of the matter, the proviso to Section 49 of the Registration Act is not applicable to the present case. Consequently, the plaintiffs are not entitled to claim specific performance of contract on the basis of the document dated 1st August, 1998.
7. For the foregoing reasons, the plaint is rejected under Order 7 Rule 11 CPC.