Mirahul Enterprises And Ors. vs Mrs. Vijaya Sirivastava And Mr. R.R. ... on 10 May, 2002

[Cites 7, Cited by 18]

Delhi High Court

Mirahul Enterprises And Ors. vs Mrs. Vijaya Sirivastava And Mr. R.R. ... on 10 May, 2002

Equivalent citations: AIR2003DELHI15, 100(2002)DLT290, AIR 2003 DELHI 15, (2002) 49 ARBILR 235 (2002) 100 DLT 290, (2002) 100 DLT 290

Bench: Mukul Mudgal

JUDGMENT
 

Devinder Gupta, J.

1. These four appeals have been preferred against the common judgment passed by learned Single Judge in two separate suits. Two appeals are by the plaintiffs Smt. Vijaya Srivastava and Rear Admiral R.R. Sood (Suit No. 451/86 and Suit No. 450/86) and the other two appeals are by the defendants.

2. Facts giving rise to the filing of the suits may be given as are alleged in the suit filed by Mrs. Vijaya Sirivastava, in which the facts and circumstances, as alleged by her pertaining to her suit as also of the suit of Rear Admiral R.R. Sood are mentioned. Learned Single Judge described the plaintiffs as "V" (Mrs. Vijaya Srivastava) and "S" (Rear Admiral R.R. Sood). At this stage, it may be mentioned that Brig. K.K. Sirivastava (Retd.), the husband of Mrs. Vijaya Sirivastava has singed the plaint in both the suits, as holder of General Power of Attorney of his wife Smt. Vijaya Sirivastava and as Special Power of Attorney of Rear Admiral R.R. Sood. He alleged in the plaint that Mirahul Enterprises, a partnership firm with Shri S.B. Kishore, defendant No. 2 as the Managing Partner and defendants 3 to 5, the other partners were engaged in the business of promoters and builders of multi-storeyed residential fasts in the name and style of Mirahul Enterprises. In the courses of the business, the defendants promoted the construction of multi storeyed residential flats. The plaintiff Realizing a need for suitable accommodation approached the defendants in June/July, 1982 and expressed desire to have a flat. Defendants apprised him that the plaintiff would be benefitted by making payments of advance money for booking a flat and formal agreement to sell would be executed later on. Relying on such representation, on 16.7.1982 Rs. 10,000/- was advanced and flat No. S-1 was booked in the said project. From 16.7.1982 till 9.10.1983, Rs. 3,15,000/- had been paid by cheques/cash against receipts except for one receipt of Rs. 5,000/-, which could not be traced. Agreement to sell was to be executed. In the meanwhile desire was also expressed to have another flat in the name of Rear Admiral Sood. Later on a letter was sent on 7.1.1983 by the defendants to the plaintiff confirming that residential flat measuring covered area of 1869 sq.ft. in flat Nos. S-2 and S-4 had been booked as per the drawings attached. Several discussions and negotiations took place. On 24.10.1983 it was agreed that a sum of Rs. 40,000/- would be paid by Mr. Sood to the defendants and out of Rs. 3,15,000/- already paid by the plaintiff, a sum of Rs. 1,40,000/- would be transferred and stand adjusted as advance money received on account of Rear Admiral R.R. Sood. This arrangement was evidenced by letter dated 25.10.1983. Accordingly, on 24.10.1983 Rear Admiral Sood paid a sum of Rs. 40,000/- in cash and Rs. 1,40,000/- was adjusted from out of the advance paid by the plaintiff.

3. The plaintiff further alleged that on 2.11.1983 defendant No. 2 brought two agreements prepared by him, one was to be executed by the plaintiff and the other by Rear Admiral Sood. While the plaintiff and Rear Admiral Sood had signed the agreements, it was noticed that the defendant had illegally, dis-honestly and without the consent of the plaintiff and Rear Admiral Sood included certain terms for payment of some additional amount, other than the agreed amount. In the case of the plaintiff such illegal terms were mentioned in the last page of the agreement being page No. 5 and in the case of Rear Admiral R.R. Sood such illegal terms appeared in the last two pages namely pages 4 and 5 of the agreement. While the plaintiff and Rear Admiral R.S. Sood protested to defendant No. 2, some corrections and change were attempted to be carried out. Defendant No. 2 got returned to him both the aforesaid tow documents so that the two agreements could be prepared, as earlier agreed without including the other illegal terms, nor agreed to either by the plaintiff or Rear Admiral R.R. Sood. Thus on 2.11.1983 itself defendant No. 2 got two agreements prepared afresh incorporating the agreed terms of the payments between the parties. Two agreements were thus duly executed by the plaintiff as well as by the said Rear Admiral R.R. Sood at Delhi on the aforesaid date, the original of which were delivered by defendant No. 2 to Admiral R.R. Sood on 2.11.1983 and whereas the original agreement as entered into with the plaintiff was delivered to the plaintiff only on 5.11.1983.

4. Mrs. Sirivastava in her plaint alleged that as per the said agreement date 2.11.1983 the defendant agreed to sell to the plaintiff an area approximately measuring 1156 sq. ft. at second floor (flat No. S-2) in Mirahul Apartments, as per plan annexed to the said agreement (hereinafter referred to as "the said flat). Total cost of the flat was Rs. 2,64,261/ out of which the defendants had already received Rs. 1.70 lakhs and the balance was to be paid in 8 Installments. The possession was to be delivered to the plaintiff on 21.8.1984.

5. With respect to the agreement of Rear Admiral R.R. Sood, Mrs. Sirivastava in her plaint alleged that Rear Admiral R.R. Sood had paid a sum of Rs. 40,000/- by cheque to defendant No. 1 and with the consent of the plaintiff, the defendants as will as Rear Admiral R.R. Sood had mutually agreed that the sum of Rs. 1,40,000/- stood adjusted out of the total payments of Rs. 3,15,000/-, earlier received from the plaintiff as advance for booking of the flat in the name of Rear Admiral R.R.Sood. Accordingly, in the agreement to sell dated 2.11.1983, entered into between the Rear Admiral R.R. Sood and the defendants a sum of Rs. 1.70 lakhs had been stated to have been received against the total cost of the flat at Rs. 2,64,261/-. Thus a similar agreement on similar terms and conditions, except to the extent that it pertains to flat No. S-1 measuring approximately 950/- sq.ft. was also entered into between Rear Admiral R.R. Sood and the defendants.

6. It was further alleged that although the plaintiff had paid and the defendants had received a total sum of Rs. 3,15,000/-. as per details given in the statement filed with the plaint yet at the time of execution of the two agreements, referred to above, an amount of Rs. 5,000/- could not be reconciled as the plaintiff was not having the receipt of Rs. 5,000/- paid in cash, issued by the defendant No. 1. However, on 14.12.1983 on re-conciliation the said amount of Rs. 5,000/- paid don 4.10.1983, was accounted for. It was further alleged that pursuant to the agreement dated 2.11.1983, Mrs. Sirivastava paid a sum of Rs. 88,000/- between 9.11.1983 to 9.3.1984 thus making an aggregate payment of Rs. 2,63,000/- without taking into account Rs. 5,000/- paid on 4.10.1983 against the total consideration of Rs. 2,64,261/- thereby leaving a balance of only Rs. 1,261/-. It was alleged that the plaintiff was always ready and willing to perform her part of the contract and complete all formalities under the agreement. In accordance with the agreement the flat had to be completed and possession delivered in March, 1984. However, progress in the construction was very slow.

7. In February, 1984 when plaintiff's husband approached defendant No. 2, it was revealed that defendants were facing acute shortage of funds. The defendant requested for interest free loan. Plaintiff offered to provide the loan on the condition that the defendants would return the loan on completion of the building or soon thereafter on demand by the plaintiff and interest at the rate of 15% p.a. will be charged, in the event the loan is not returned. This offer was accepted. Thus it is alleged that from 11.2.1984 till 23.5.1984, a sum of Rs. 1,45,000/- was advanced by the plaintiff to the defendants as a simple loan. In this way, the plaintiff alleged that she had paid a sum of Rs. 4,03,000/-.

8. Plaintiff further alleged that in August, 1984, the plaintiff learnt that defendant No. 2 with his family had already shifted to one of the flats on the ground floor. The plaintiff requested the defendants to apprise her of a suitable date for taking possession of her flat but received no response from the defendants. On 8.10.1984 a letter was written to defendant No. 2 to let her know, inter alia, the suitable date when the plaintiff may start fitting the flat with almirah etc. The plaintiff was surprised to receive a letter dated 12.12.1984 from defendant No. 1. In the said letter, for the first time the defendant preferred to claim for execution of a regular agreement to sell for an area of approximately 950 sq. ft. in respect of the said flat and further threatened that if this was not done by 31.12.1984, provisional allotment of flat would stand cancelled. The plaintiff thus alleged that it was a dishonest ac ton the part of the defendant. The plaintiff had made all payments, in accordance with the agreement dated 2.11.1983. Only a small amount was left, which was to be p aid at the time of handing over of the possession. The plaintiff also protested that there was only provisional allotment. There was a regular agreement to sell dated 2.11.1983. The defendants had no right to reduce the area to 950 sq. ft. But without prejudice, the plaintiff was prepared to take 950 sq. ft. as intimated by defendant No. 1. The plaintiff thereafter narrated as to what transpired till 31.12.1984. By letter dated 29.12.1984 the defendant wrongly alleged that as mutually agreed, unless the loan money given to defendant N. 1 by the plaintiff was returned, it was not possible to have a regular agreement to sell finalised and as such the date to sign the regular agreement to sell was extended to 31.3.1985. On 31.12.1984 the plaintiff's husband wrote a letter to defendant No. 1, in response to letter dated 29.12.1984 refuting the allegations. The plaintiff thereafter made an effort to obtain possession but without any success. In January, 1985, the plaintiff learnt that the defendants had advertised for sale of certain flats. The plaintiff apprehended that her flat might also be sold by the defendants. On 15.1.1985 a suit was filed by the plaintiff for injunction not to dispose of or part with the possession of flat to any person. In the suit ex parte ad interim injunction was granted restraining the defendants from disposing of, transferring or creating any charge or parting with possession of the flat in question. Suit was still pending.

9. Thus, in the above back ground, the plaintiff filed the suit for grant of a decree for specific performance alleging that the defendants willingly and deliberately were delaying the handing over of flat and completion of other formalities. The plaintiff, therefore, is entitled to specific performance of the agreement dated 2.11.1983. The plaintiff had already made payment in excess, over and above the agreed amount. In the event of the Court finding, in the alternative that the plaintiff was liable to pay any excess amount, the plaintiff was always and was still ready and willing to perform her part of the agreement by paying the said amount. The plaintiff thus prayed that the defendants be ordered to specifically perform the agreement dated 2.11.1983. A joint and several decree for Rs. 1,59,681.25 be passed against the defendants, being the amount of loan together with interest at the rate of 15% p.a. with future interest at the rate of 15% p.a. from the date of suit till payment. In the alternative the plaintiff prayed for a decree for a sum of Rs. 8,23,027.18 together with interest at the rate of 15% p.a.

10. Similar prayers were made by Rear Admiral R.R. Sood in his plaint. Both the suits were contested by the defendants, who in the written statement denied that on 2.11.1983 any agreement was entered into. It was pleaded that there was no regular, binding or final agreement arrived at between the parties. The plaintiff had to sign a regular agreement with the defendants. The so called agreement dated 2.11.1983 was written only at the instance of the plaintiff and her husband as they had approached the defendants with a request to create such a document as he wanted the same to have a loan from HDFC. It was precisely for that purpose and for no other purpose that the said writing was executed between the parties on 2.11.1983. The defendants were surprised to learn later on that the real intention for creating this document was not to take loan from HDFC but as a tool to later on black mail the defendants.

11. The defendants further pleaded that the husband of the plaintiff approached the defendants and wanted to have the flats in the building, being constructed by the defendants. He expressed his inability to buy in his own name, due to official reasons, therefore, he wanted to purchase one flat in the name of his wife and one in the name of Rear Admiral R.R. Sood. The defendants asked him to execute a regular agreement. However, the plaintiff did not wish to execute any such regular agreement and it was told that they will be placing various sums with the defendants and would execute a regular agreement at the time when the building is complete. The defendants denied having received the amount as alleged by the plaintiff. The defendants gave their own version of the transaction by denying that any agreement was executed between the plaintiff and defendants or between Rear Admiral R.R. Sood and the defendants. It was alleged that plaintiff's husband approached the defendants that he wanted some documents to be executed for the purpose of facilitating loan to the plaintiff's husband from H.D.F. C. Only for that purpose document dated 2.11.1983 was executed. The understanding was that the plaintiff had to pay the price of the flat at the rate prevailing at the time of execution of regular agreement, while taking possession. As such in the document dated 2.11.1983 it was clearly mentioned that the plaintiff had to make payment of Rs. 4,35,975/, as price of the flat. It was specifically denied that any unauthorised addition or interpolation was done by the defendants. The documents were fully written up when signed by the parties in the presence of Notary Public. Original was immediately handed over to the plaintiff and copy to the defendants and thereafter nothing has been added in the copy retained by the defendants. The defendants further pleaded that at no stage any regular or firm "agreement to sell" was executed between the parties. A regular agreement was yet to be executed between them; which the plaintiff failed to agree and execute. In the alternative it was alleged that even in terms of the so-called agreement dated 2.11.1983, the plaintiff had to pay an amount of Rs. 4,35,975/- whereas she has paid only an amount of Rs. 3,77,000/- only, and in case Rs. 1,40,000/- is to be transferred to the account of R.R. Sood in that case only an amount of Rs. 2,37,000/- would remain in her account and no flat could be given to her as she never came forward to execute the necessary documents in time; which was originally extended to 31st December, 1984 and then further extended to 31st March, 1985. It was alleged that unless regular agreement was singled and possession letter of flat given, income tax clearance in form 34-A cannot be obtained without which no registration of flat can be done. IN fact the plaintiff was not interested in buying the flat. She only wanted to make a speculative gain by exploiting inflationary market conditions resulting in increase of prices in general and landed property ion particular.

12. Thus in substance the defendants pleaded that the document dated 2.11.1983 did not evidence any concluded agreement between the parties. The price had yet to be worked out at the time of execution of regular agreement, at the then prevailing market rate, and even a per the so-called agreement dated 2.11.1983 price to be paid by the plaintiff was Rs. 4,35,975/- and not Rs. 2,64,261/-.

13. As regards interest free loan, the defendants pleaded that there was no mention made by the plaintiff in her suit filed for grant of decree for injunction of any loan advanced by the plaintiff to the defendants. Defendants, however, admitted that the plaintiff had advanced certain moneys to defendants, as interest free loan, but at no point of time there was any stipulation to pay interest. Defendants pleaded that the amount paid on account of intended purchase of flat and those advanced as interest free loan are two separate and distinct transactions and could not be used for the purpose of acquiring the flat. The plaintiff at no point of time instructed the defendants to transfer this interest free loan amount towards the price of intended purchase of the flat. These are two separate and distinct transactions and could not be clubbed together for any purpose whatsoever. The defendants thereafter have pleaded about certain acts on the part of the plaintiff, which according to the defendant were the use of influence of Delhi Police by making false complaint of cheating for which defendant No. 2 had to obtain anticipatory bail but despite that the defendant alleged that last and final opportunity was given to the plaintiff till 31.3.1985 to have agreement to sell executed, which was not done. Thus the defendant pleaded that the plaintiff got the document dated 2.11.1983 prepared for her owns purpose for which the defendants obliged her and her husband. The defendant pleaded that the plaintiff and her husband made additional writings on these documents with their own hand writing and the same were duly singed by the plaintiff and her husband before the Notary Public making it clear that it was only a provisional agreement and not a final agreement. It was further alleged that the plaintiff ought to have sought relief for specific performance, when suit for injection was filed but the plaintiff deliberately failed to claim such relief, therefore, the suit was barred under Order 2 Rule 2 C.P.C. The defendants denied that the plaintiff was entitled to decree prayed for since the plaintiffs had no intention of obtaining the flats for which they failed to come forward and enter into a proper agreement to sell. Similar is the version in the suit filed by Rear Admiral R.R. Sood.

14. On the pleadings of the parties, following issues were framed:-

"Suit No. 451/86

1. Whether the plaint has been singed and verified by a person competent to do so and suit instituted by a duly authorised person? OPP.

2. Whether the agreement dated 2.11.1983 executed between the plaintiff and the defendants 1-5 and set up by the plaintiff, is binding in all respects on the parties? OPP

3. If issue No. 2 is held in favor of the plaintiff, whether defendants 1-5 are not liable to execute the sale deed and transfer possession of the flat measuring 1156 sq. ft. to the plaintiff? OPDs 1-5.

4. Whether the plaintiff is liable to pay to defendants 1-5 any sum over and above the admitted sum of Rs. 2,64,261/-

in execution of agreement to sell? OPDs 1-5.

5. Whether the plaintiff was ready and willing to perform his part of the agreement at all material points of time? OPP.

6. Whether the plaintiff/her husband made any additional writings as part of the agreement to sell dated 2.11.1983, as alleged by defendants 1-5? 2.11.1983, what effect? OPDs 1-5.

7. Whether any sum by way of loan was advanced to defendants 1-5 by the plaintiff? If so, what amount and during what period and on what terms and whether plaintiff can seek relief in respect to said loan in the present suit? OPP

8. In case defendants are held entitled to recover from the plaintiff in the event of specific performance being granted, any amount of Rs. 2,64,291/-, then whether the plaintiff is entitled to claim adjustment for the excess claim against the alleged loan amount?

9. Whether the sale or parting with possession by defendants 1-5 of one bed room of the flat in question in favor of defendant No. 6 is fraudulent, illegal and not binding on the plaintiff for the reasons stated in paras 24(a) to 23(i) of the plaint? OPP

10. Relief. OPP Suit No. 450/86

1. Whether the plaint has been signed and verified by a person competent to do so and suit instituted by a duly authorised person? OPP

2. Whether the agreement dated 2.11.1983, executed between the plaintiff and the defendants 1-5 and set up by the plaintiff, is binding in all respects on the parties? OPP.

3. It issue, No. 2 is held in favor of the plaintiff, whether defendants 1-5 are not liable to execute the sale deed and transfer possession of the flat measuring 955. ft. to the plaintiff? OPDs 1-5.

4. Whether 4 the plaintiff is liable to pay to defendants 1-5 any sum over and above the admitted sum of Rs. 2,68,000/- in execution of agreement to sell? OPDs 1-5.

5. Whether the plaintiff was ready and willing to perform his part of the agreement at all material points of time? OPP.

6. Whether the plaintiff/her husband made any additional writings as part of the agreement to sell dated 2.11.1983, as alleged by defendants 1-5? If so, to what effect? OPDs 1-5.

8. In case defendants are held entitled to recover from the plaintiff int eh event of specific performance being granted, any amount of Rs. 2,68,000--, then whether the plaintiff is entitled to claim adjustment for the excess claim against the alleged loan amount?

9. Relief. OPP

15. Evidence was jointly led in both the suits. Mrs. Sirivastava appeared as PW.1 and her husband Mr. K.K. Sirivastava, appeared as PW2. Rear Admiral Sood did not appear as his witness. Shri K.K. Sirivastava claimed himself to be the Special Attorney of Rear Admiral Sood. On behalf of the defendants, defendants No. 2 appeared as DW.1. In addition to this oral evidence documentary evidence has also been produced and proved on record.

16. Before proceeding further in the matter, it will be necessary to make a reference to some intervening events, which had happened. Two separate applications were filed by the plaintiffs for being put in possession of the property alleging that substantial payment had already been made to the defendants. On 21.8.1987 an interim order was passed directing that the plaintiffs be put in possession of the property. Appeal against the said order was dismissed in liming by the Division Bench. Supreme Court also upheld the said order. Local Commissioner was appointed to had over the possession. While executing commission, it was noticed that one of the rooms of the flat for which Mrs. Sirivastava had filed suit was in possession of some one else. Therefore, the plaintiff sought amendment to the plaint challenging the transfer made by the defendants in favor of defendant No. 6 of a part of the flat, who imp leaded as a party in the suit. Such transfer made in favor of defendant No. 6 was challenged alleging that it was a sham transaction and sale deed dated 9.6.1987 was also bad in law and that the plaintiff was not bound by it. In the amended plaint, decree was prayed to that effect also.

17. Learned Single Judge held that there was a concluded contract between the plaintiff Mrs. Sirivastava and the defendants and plaintiff Rear Admiral Sood and the defendants and that all the amounts paid by the plaintiffs would go to the costs of the flats. On various issues in both the suits, it was held that the plaint had been signed and verified by a competent person; there was a concluded agreement dated 2.11.1983; the defendants are liable to execute sale deeds; and that the plaintiffs have always been ready and willing to perform their part of the contract. It was also held that agreement marked Ex.DPW. 1 was executed but it was not binding on the parties. As regards 6th defendant, it was held that he was bound to convey to the plaintiff and defendants 1 to 3 the third bed room, which formed part of the agreement between the parties. It was also held that the defendants were not obliged to make any payment to the plaintiffs since the entire amount paid by the plaintiff had to be utilised towards the sale considerations. Thus decree was passed for specific performance.

18. The defendants have felt aggrieved against that part of the decree by which suits of the plaintiffs have been decreed for specific performance whereas the plaintiffs have preferred appeals by which their suits for recovery of the loan amount have been dismissed or in other words decree has not been granted for the said amount and also against certain observations made by learned Single Judge about the sale considerations.

19. Learned counsel for the parties were heard at length two took pains to go through minutely the oral and documentary evidence led by the parties. Their submissions have been duly considered and noted.

20. On behalf of the defendant/appellants it was urged that following points would arise for determination:-

1. By not disclosing the exact nature of transaction inter se the parties the plaintiffs have made themselves disentitled for the discretionary relief of specific performance of contract.

2. Agreements on which the suits for specific performance were filed were not the correct agreements between the parties.

3. Thee was no agreement for a three bed room flat with Mrs. Sirivastava.

Arrangement proposed in the agreement was for two bed rooms.

4. No relief could have been granted with respect to a portion of the property for which sale deed had been executed in favor of defendant No. 6.

21. It was also contended that there was no concluded contract. Neither the parties were adidem on the area and consideration nor were these discernible from the evidence. Therefore, there was no reason why the plaintiffs be held entitled to specific relief. At the most the plaintiffs were entitled only to refund of the amount advanced by them. There was no readiness or willingness to perform since in para 6 of the plaint and in para 7 of the written statement, parties gave their respective version of the alleged agreement of 2.11.1983. Defendants explained Ex.DPW. 1/A and Ex.PW. 1/2 but no such explanation was offered by the plaintiffs. Ex.DPW. 1/A is not attested by the witnesses. Plan is not attached. Total cost of Rs. 2,64,261/- is in consistent with the amount mentioned in the last page of the agreement.

22. Learned counsel for the plaintiffs urged that the plaintiffs had fully explained the circumstances leading to the singing of two agreements Ex.PW. 1/2 and Ex.DPW. 1/A. No such explanation was offered by the defendants. When there were two versions, some explanation ought to have come forward from defendants, who had not explained the same. Learned Single Judge was wrong in relying upon both the agreements. Reading of the documents together, it cannot be inferred that it was a provisional agreement. Learned Single Judge has rightly came to the conclusion that there was a concluded agreement, which came into being.

23. Moreover, for both documents Ex.PW. 1/2 and Ex.DPW. 1/A there were enough pleadings made by the plaintiff and proof. Adequate evidence was led about plaintiff's readiness and willingness to perform both the contracts. The plaintiffs had stated in the plaint that it for any reason whatsoever, it is found that full amount had not been paid by plaintiffs, they were ready and willing to pay any amount, which is found payable or to have the amount of loan adjusted towards such payment and moreover no such objection had been raised by the defendants in the appeals to the effect that the plaintiffs were not ready and willing to perform their part of the contract.

24. Before we proceed to analyses the evidence in thais case and to appreciate the submissions made at the bar, it will be put necessary to take into consideration the provisions of Specific Relief Act and the requirements of law before a decree for specific performance be granted. Grant of decree for specific performance under Section 20 of the Specific Relief Act, 1963 rest in the discretion of the Court and cannot be claimed as of right. Parties seeking performance of contract must satisfy all the requirements necessary for seeking relief in equity. In exercising discretion, Court is obliged to take into consideration circumstances of the case, conduct of the parties and the respective interests under the contract. at the same time, it should not be lost sight of that the discretion has to be exercised by the Court not arbitrarily but based on sound judicial principles. The first fundamental, which must be proved beyond all reasonable doubts is the existence of a valid and enforceable contract. Where a valid and enforceable contract has not been made, Court will not make a contract for the parties. Specific performance will not be ordered it the contract itself suffers from some defect, makes the contract invalid or unenforceable. Reference at this stage be made to a decision of the Supreme Court in Mayawanti v. Kaushalya Devi .

25. Section 10 of the Contract Act defines as to what agreements are contracts. All agreements are contracts, it they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. A true contract thus requires the agreement of the parties freely made with full knowledge and without any feeling of restraint. Parties must be ad-idem on the essential terms of the contract In case, it is an agreement to sell of immovable property, the law requires that it must with certainty identify the property agreed to be sold and the price fixed as consideration paid or agreed to paid. Price has not been defined in Transfer of Property Act but that expression has to be understood in the same sense as is understood in the Sales of Goods Act. Every sale implies a contract of sale and like any other contract, the contract for sale of immovable property must be based on mutuality.

26. Where in a suit for specific performance of contract, the contract on which relief is based is found to be not a concluded contract, relief cannot be given on the basis of another contract alleged by the plaintiff to be a concluded contract, for which we make reference to the decision of the Supreme Court in Ganesh Shet. v. Dr. C.S.G.Setty and Ors. . The facts in the said case were that the property was owned jointly by three brothers. The purchaser clearly stated that at their meeting with one of the brothers, he told that he is yet to consult his two brothers about sale consideration. Tenor of several letters between the parties showed that sale consideration was not finalised in their meeting. It was held that there was no concluded contract between the parties on which decree for specific performance could not be passed. In the said case, Supreme Court held that in a suit for specific performance the evidence and proof of agreement must be absolutely clear and certain. Reference was made in the said decision of Pomeroy on "specific Performance of Contracts" (3rd Edn) (para 159) wherein it is stated clearly that a "greater amount or degree of certainty is required in the terms of an agreement, which is to be specifically executed in equity, than is necessary in a contract which is to be the basis of an action at law for damages. An action at law is founded upon the mere non-performance by the defendant, and this negative conclusion can often be established without determining all the terms of the agreement with exactness. The suit in equity is wholly an affirmative proceeding. The mere fact of non-performance is not enough; its object is to procure a performance by the defendant and this demand a clear, definite and precise understanding of all the terms; they must be exactly ascertained before their performance can be enforced. This quality of certainty can best be illustrated by examples selected from the decided cases. In the said decision of Ganesh Seth's case (supra) before Supreme Court culled out for points for consideration, namely:-

"1. Whether there was a concluded contract between the parties on 25.1.1984 at Delhi when plaintiff and PW.2 (Mr. Kalankar) met the 1st defendant at his Delhi residence?

2. Having not agreed in the High Court to amend the plaint and plead that there was a concluded contract at Bangalore on 28.4.1984 and having thus refused to seek for a relief for specific performance of an agreement dated 28.4.84, whether the plaintiff could contend that there was an agreement of sale dated 28.4.84 at Bangalore?

3. What are the legal principles applicable to suits for specific performance under Section 20 of the Specific Relief Act, 1963 where there is variation between pleadings and evidence in regard to the date or other terms of the contract? To what extent can relief be given under the heading general relief in suits for specific performance under Order 7 Rule 7 CPC?

4. Alternatively, whether on the plaint as it stands, and the prayer made therein without seeking amendment, the plaintiff an get a decree for specific performance of an agreement dated 28.4.84 said to have been concluded at Bangalore."

27. On the first point, it was held that there was no concluded agreement on 25.1.1984 at Delhi, therefore, no decree for specific performance of an agreement dated 25.1.1984 could be passed since no agreement had been concluded on that date. On point 2, it was held that though prayer was made to grant relief in respect of the agreement concluded at Bangalore on 28.4.1984 but when despite opportunity to file amended plaint and claim enforcement of the said agreement, such amendment was not sought, it was held that the plaintiff cannot be given any relief for specific performance of any such agreement allegedly concluded at Bangalore. Point 3 and 4 were dealt with together and it was held that in accordance with general rules, the relief awarded in a suit for specific performance would be based on the issues raised by the pleadings and supported by the proof. More specifically, relief awarded for the plaintiff must be authorised by or be in conformity with pleadings in respect of the contract to be enforced. In other words, the other relief to be granted must be consistent with both pleading and the proof.

28. Therefore, in the light of the principles laid down in Ganesh Seth's case (supra) it will have to be examined whether there has been a concluded contract between the parties or not.

29. Plaintiffs in both suits, after making reference to the factual back ground pleaded that on 2.11.1983 a concluded agreement was entered into. This agreement has been proved on record by Mrs. Vijaya Sirivastava as Ex. PW.1/2 and in the case of Rear Admiral Sood as Ex. PW.2/19 saying that the said agreement was prepared afresh incorporated therein the agreed terms of payment between the parties. The said two agreements were duly executed at Delhi. Under the said agreement with Mrs. Vijay Sirivastava, the defendant agreed to sell to the plaintiff an area approximately measuring 1156 sq. ft. at the second floor flat No.S-2 in Mirahul Apartments, as per the plan annexed with the agreement, total cost of the flat was Rs. 2,65,261/-, out of which the defendants had already received Rs.1,70,000/- and the balance was payable in the manner as mentioned in the agreement. Similarly, Rear Admiral Sood in the plaint alleged that under the agreement dated 2.11.1983 the defendant agreed to sell to the plaintiff an area approximately measuring 950 sq. ft. at the second floor flat No.S-1 in Mirahul Apartments, as per plan attached and the total cost of the flat is Rs. 2,68,000/-, out of which the defendant had already received Rs.1,80,000/- and the balance to be paid in 8 Installments referred to in the agreement.

30. Needless to add that the plaintiffs, in order to succeed, must establish and prove that it was a concluded contract and the terms agreed upon conclusively were the same as are referred to by them in para 8 in the plaint of Mrs. Sirivastava's plaint and in para 9 in the plaint of Mr. Sood. These agreements were proceeded by amounts advanced from time to time. Each payment was received against receipts issued by the defendants. From 16.7.1992 to 14.12.1993 the receipts are Ex. P.19 to Ex. P.45. Except Ex.P.37 and Ex.P.38. These receipts are for payment of Rs. 3,70,000/- and show the amount to have been received by the defendants by way of advance. But description and particulars of the flat number varies. In Ex.P.19, Ex. P.21, Ex.P.24 and Ex.P.25 flat number shown as S-1. In Ex.P.22, Ex.P.23, Ex.P.26, Ex.P.27, Ex.P.30, Ex.P.32, Ex.P.33, Ex. P.39 to Ex.P.41 flat number shown is S-4; whereas in Ex.P.29, Ex. P.34, Ex.P.34, Ex.P.35, Ex.P.36 Ex.P.42 to Ex.P.45 the flat number shown is S-2 and in Ex.P.28 flat number shown as S-3. Receipts Ex.P.46 to Ex.P.54 are for a sum of Rs.1,73,000/-. The amount shown therein is stated to have been received by the defendants towards interest free loan. Similarly, Ex.P.17 and Ex.P.18 in suit filed by Mr. Sirivastava are the two receipts for Rs.25,000/- and Rs.45,000/- respectively towards interest free loan. Ex.P.10 to Ex.P.16 are the receipts for payment of Rs. 1,23,000/- by way of advance for flat No.S-1. It includes receipt Ex.P.10 of Rs. 40,000/- showing that it is transfer payment of S-4 to S-1. Total amount of receipts issued in favor of Shri K.K. Sirivastava and Mrs. Sirivastava from 16.7.1982 to 14.12.1983, as evidenced by Ex.P.19 to P.36 Ex.P.39 to Ex.P.45 is Rs. 3,90,000/- and towards interest free loan from 11.2.1994 to 23.5.1994, as reflected in Ex.P.46 to Ex.P.54, received from Mrs. Sirivastava by defendants is Rs. 1,73,000/-. From Rear Admiral Sod the amount received, as shown in receipts Ex.P.10 to Ex.P.16 from 24.10.1983 to 14.6.1984 is Rs. 1,23,000/- by way of advance and another sum of Rs. 70,000/- to 9.7.1984 by way of interest free loan. In addition to this, there is another payment reflected to in Ex.P.38, which is not shown in either of the receipts. Said sum of Rs. 5,000/- is stated to have been received from Mrs. Sirivastava. There are three other payments, which are not found any where else having been received from Mrs. Sirivastava are as per the certificate of the Bank Ex.P.W.2/1 The said payments are of Rs. 8,000/- on 1.12.1984 and Rs. 10,000/- each on 29.2.1984 and 19.3.1984 total amount is Rs. 28,000/-. In this manner taking all payments into consideration, Rs. 5,76,000/- has been paid by Mrs. Sirivastava and Rs. 1,93,000/- by Mr. Sood. As per the payments, shown to have been received by defendant No. 2 in the Income Tax Returns, Rs. 5,80,000/- is shown to have been received from Mrs. Sirivastava and Rs. 1,86,000/- from Mr. Sood. As per Income Tax Returns total amount of Rs. 7,66,000/- is shown to have been received whereas the receipt proved on record account for a sum of Rs. 7,69,000/-.

31. Learned Single Judge did not go into the details of these receipts but for us it is necessary to find out the crucial aspect that whether there was a concluded contract or not.

32. Now we come to the contracts. As per the statement of P.W.1 and P.W.2 and as is pleaded in the plaint, two typed agreements were produced in defendant No. 2 on 2.11.1983, when they visited his place. The plaint states that defendant No. 2 brought two agreements prepared by him, one agreement was to be executed by Mrs. Sirivastava and the other by Rear Admiral Sood. While Mrs. Sirivastava and Rear Admiral Sood had signed two agreements brought by defendant No. 2, simultaneously it was noticed that the defendants had illegally, dis-honestly, without the consent of the plaintiff and Rear Admiral Sood had included certain terms for payments of some additional amount, other than the agreed amount. In the case of Mrs. Sirivastava, such illegal terms were mentioned on the last page of the agreement being page No. 5, whereas in the case of Rear Admiral Sood, such illegal terms were in the last two pages, namely, pages 4 and 5. Mrs. Sirivastava and Rear Admiral Sood protested to defendant No. 2 and some corrections or changes were attempted to be carried out. Defendant No. 2 got returned to him both the documents so that fresh two agreements could be prepared, as earlier agreed, without including the other illegal terms, not agreed to either by the plaintiff or by Rear Admiral Sood.

33. It is thus urged that on 2.11.1983 defendant No. 2 got the two agreements prepared afresh, incorporating the agreed terms of the payments between the parties. The said agreements, as noticed above, are Ex.P.W.1/2 in the case of Mrs. Sirivastava and Ex.P.W.2/19 in the case of Rear Admiral Sood. Defendant No. 2 denied the manner in which the plaintiffs pleaded and the defendants gave their own version, as has been noticed by us.

34. Now we turn to the evidence. Plaintiff No. 1

stated that in November, 1983, after signing the agreement to sell, defendant No. 2 insisted for witnessing the same by her husband in the meanwhile Rear Admiral Sood noticed that he had put some money to be paid. After some arguments, defendant No. 2 changed the agreement to sell. He went inside A-13, Green Park and changed the last page. In his statement Shri K.K. Sirivastava, who has all along been dealing with defendant No. 2, stated that on 2.11.1983 defendant No. 2 met them at A-13, Green Park Extension. He had brought two agreements, one for Admiral R.R. Sood and the other for his wife for signing stating that these are usual flat buyers agreements and stated he had already signed those. Therefore, wherever he had signed Mrs. Sirivastava and Mr. Sood can sign. One set was given to Mrs. Sirivastava. She started signing it and the second set was given to Rear Admiral Sood, who also started signing it. After his wife had signed it, it was given to him for witnessing and Mr. Sirivastava states that he had already witnessed it. At this stage when Rear Admiral Sood was signing the document and also gave the same to Mr. Sirivastava for witnessing defendant No. 2 told Adm. Sood to sign some corrections. Therefore, Mr. Sirivastava states that he started reading the document Ex.DPW.1/A and on the last page he found objectionable terms, which were not agreed. When they protested defendant No. 2, told them that this agreement was for usual future buyers and not for them and he suggested certain corrections, which were in the carbon copy of the agreement of both the flat buyers. Mr. Sirivastava and Admiral Sood did not agree with these modifications. Therefore, defendant No. 2 readily agreed to change the entire agreement and told them that they will have to go to High Court for typing and notarising the same. It is further stated that all of them came to the High Court. Admiral Sood had some official meeting in the evening, so fresh agreement in his case was typed first and was signed by both the seller and the buyer and witnessed by Mr. Sirivastava and was Notarised in the High Court. After that his wife's agreement was also typed. Mr. Sirivastava stated that his wife had gone away since children were to come from school. He continued to remain with defendant No. 2. Both returned home and were to meet in the evening for signing and notarising the document at Green Park where Notary Public resides. He stated that they met at Notary's place. Agreement was signed by both the parties and witnessed by him and Mr. Sood. The Notary had not come, therefore, he had go to Air Port. Agreement was not notarised. The same was notarised on 5.11.1983. According to him the agreement is Ex.Pw.1/2. Version of defendant No. 2 while appearing DW.1 in the witness box is totally different as has been pleaded in the written statement that there was no concluded agreement. Plaintiffs wanted a document to be shown by them in order to raise loan from HDFC.

35. We have already noticed above the difference in the two agreements. We will make a mention of the difference in the two documents Ex.PW.1/2 and Ex.DPW.1/A. There is no change in the first four pages. They are verbatim the same. The only difference is on in 5th page. 5th page of Ex.Pw.1/2 reads:--

"IN WITNESSETH WHEREAS of the parties aforementioned have set their respective hands on this Agreement and have signed the same on the day, month and the year as written above.

for M/s. MIRAHUL ENTERPRISES WITNESSES

1. Sd/- K.K. Sirivastava Seller Sd/-

2. Sd/- R.R. Sood Purchaser Sd/-"

36. The last page of the other document Ex.DPW.1/A reads as under:-

"This agreement is provisional and a proper sale deed will be made when the flat will be ready and is drawn up for the purchaser to get a loan from HDFC and shall be treated as cancelled, at the time of issue of possession letter by the builders when a fresh agreement will be entered into between the seller and the purchaser.

Over and above and amount of Rs. 264261/- and Rs. 171712/- shall be due when giving the letter of possession of the flat. This included the value as stated in Clause 10 of this agreement.

IN WITNESS WHEREAS of the parties 6aforementioned have set their respective hands on this agreement and have signed the same on the day, month and the year as written above.

for M/s. MIRAHUL ENTERPRISES WITNESS

1. Sd/- K.K. Sirivastava Seller Sd/-

2. Purchaser S/d-"

37. In case document Ex.DPW.1/A is taken to be an agreement to sell number of factors are there, which cannot be reconciled. The total cost of flat is shown as Rs. 2,64,261/- with additional amount, which the seller was also required to pay i.e. a sum of Rs. 1,71,712/- payable when giving letter of possession of the flat. This includes the value as stated in Clause 10 of the agreement. Similar is the position of the agreement executed with Rear Admiral Sood, where also similar additions are on in the last pages and the value of the flat is shown as Rs. 2,68,000/- with additional amount to be paid by the purchaser, total amount being Rs. 3,89,000/-. It may noticed at this stage that the defendants were handicapped during trial of the suit. At the stage of evidence they were not represented by a counsel. The proceedings were conducted by defendant No. 2.

38. According to the defendants, the amount reflected on the last page was the correct amount, which would have been payable by the plaintiffs for the flat in question but still it was a provisional agreement. The final agreement had not been arrived at. Neither the amount had been settled nor the flat had been ascertained. The price was to be settled on completion of the flat. The price had to be worked out on the market value, as per settlement between the parties. According to the plaintiff only a sum of Rs. 2,64,261/- was paid by Mrs. Sirivastava for the portion of building measuring approximately 1156 sq.ft. at the second floor i.e. S-2 whereas in the case of Mr. Sood, the total amount payable was Rs. 2,68,000/- for a part of the portion of the building admeasuring approximately 950 sq.ft. at the second floor (flat S-1). This entire discussion lead to one conclusion that still there was no consensus between the parties as regards the price payable for the transfer of the flats, in the absence of which it is not possible to order specific performance in view of the ratio of the two decisions aforementioned. According to the plaintiffs they had paid the entire agreed amount, which otherwise was not correct. The theory of interest free loan is also not in consonance with the conduct of the parties though not seriously agitated by the defendants. In case the said amount of interest free loan is taken as a part of the sale transaction, it will be an amount almost near to the amount, which according tot he agreement Ex.DPW1/A was to be the total amount payable. As such the decree for specific performance granted in favor of the plaintiff is liable to be set aside.

39. Consequently, the defendants will be liable to refund the entire amount paid by the plaintiffs to the defendants but without any interest or damages, as claimed, since the plaintiffs have been enjoying the benefit of being in occupation of the two flats.

40. Consequently, the appeals RFA. 29 and 30 of 1996 are allowed and RFA Nos. 41 and 42 are dismissed. The judgment and decree for grant of specific performance are set aside. Plaintiffs suits for specific performance are dismissed. Decree of learned Single Judge in the two suits stands modified and substituted by a decree for recovery of Rs. 4,04,000/- in favor of plaintiff against defendants in suit No. 451 of 1986 and for Rs. 3,33,000/- in favor of the plaintiff against the defendants in suit No. 450 of 1986 along with interest at the rate of 10% p.a. from the date of institution of suit till payment. The plaintiffs will hand over possession of the flats to the defendants. As the plaintiffs have been in possession of the flats pursuant to an interim order, they are allowed four months time to vacate the flats and hand over physical and vacant possession to the defendants and on their failure to do so they will be liable to pay damages to the defendants at the market rate from the date of the deposit of the decretal amount by the defendants or within period of four months from today, whichever is later till delivery of possession, which will be ascertained by learned Single Judge in case that eventuality would arise and the said amount of damages would be liable to be adjusted by the defendants from the amount deposited by the defendants in Court. The amount on being deposited by the defendants will not be handed over to the plaintiffs till they have handed over possession of the flats. Parties are left to bear their respective costs throughout.

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