Delhi District Court
25 vs Sh. Rakesh Bawa on 2 April, 2019
IN THE COURT OF SH. HARGURVARINDER SINGH JAGGI,
ADDL. DISTRICT JUDGE - 02, SOUTH WEST, DWARKA
COURTS, NEW DELHI
CS DJ ADJ No. 15165/2016
CNR No. DLSW01-000042-2016
IN THE MATTER OF:
Sh. Sanjay Kapoor
S/o Sh. Jagdish Kapoor
R/o C-2/374, Janak Puri
New Delhi -110058
Presently residing at --
251, Surya Apartments
Plot No.14, Sector 6
Dwarka, New Delhi ... Plaintiff
VERSUS
Sh. Rakesh Bawa
S/o Late G.S. Bawa
E-708, Rail Vihar
Sector 15, Part-II
Gurgaon, Haryana - 122001 ... Defendant
Date of institution of plaint : 18.10.2010
Date of arguments : 21.01.2019
Date of pronouncement : 02.04.2019
CS DJ ADJ No. 15165/2016
Sanjay Kapoor v. Rakesh Bawa
Page No. 1/51
JUDGMENT
1. This is a suit for specific performance and permanent injunction. The plaintiff namely, Sanjay Kapoor (hereinafter "the plaintiff") has instituted the suit against the defendant namely, Rakesh Bawa (hereinafter "the defendant"). The suit has been filed by the plaintiff with regard to a flat bearing No. 213, Surya Apartment, plot No. 14, sector 6, Dwarka, New Delhi (hereinafter "suit property").
FACTS
2. The facts of the case in capsulated form are that the plaintiff and defendant entered into an agreement to sell dated 12.02.2010 with regard to the suit property for an amount of ₹90,00,000/- (Rupees Ninety lakhs only) and out of which the plaintiff has paid an amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) to the defendant against the total sale consideration. The suit property is a leasehold property and the defendant subsequent to entering to an agreement to sell dated 12.02.2010 failed to get the suit property converted into a freehold property and after receiving substantial money from the plaintiff, the defendant failed execute the sale deed in favour of the plaintiff. The defendant terminated the contract and forfeited not only the earnest money but also the part payment paid by CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 2/51 the plaintiff to the defendant. Hence, the suit for specific performance and permanent injunction.
3. As per the averments in the plaint, the plaintiff and defendant entered into an agreement to sell dated 12.02.2010 for a total sale consideration of Rs.90,00,000/- (Rupees Ninety lakhs only). The defendant agreed to sell the suit property to the plaintiff after getting the suit property converted into freehold from leasehold and to which the plaintiff agreed and duly entered into an agreement to sell dated 12.02.2010. A sum of ₹6,00,000/- (Rupees Six lakhs only) was paid in cash on 12.02.2010 and the receipt of the same is acknowledged by the defendant in the agreement itself and also by a separate receipt dated 25.02.2010 at the time of receiving second instalment. The plaintiff further paid a sum of ₹12,11,000/- (Rupees Twelve lakhs and eleven thousand only) to the defendant on 25.02.2010. Thus, an amount of ₹71,89,000/- (Rupees Seventy one lakhs and eighty nine thousand only) remains unpaid out of the total consideration.
4. The plaintiff has averred in the plaint that on 12.03.2010, the defendant approached the plaintiff and informed the plaintiff that the defendant had to visit Canada and will be staying there for some time and would return to India only after sometime. The defendant issued a letter dated 12.03.2010 to the plaintiff, whereby the defendant extended the date for completion of his obligations till the end of September 2010, which was agreeable to the plaintiff.
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5. The plaintiff has also averred in the plaint that at the time of signing of the agreement to sell, the broker who stitched the deal between the plaintiff and defendant, namely, Pradeep Chawla of M/s Multi Link Properties agreed to pursue the application for conversion of the suit property from leasehold to freehold. It is also averred in the plaint that as per the information of the plaintiff, necessary application with requisite documents was moved with Delhi Development Authority (hereinafter "DDA"). However, the process of conversion from leasehold to freehold was delayed because the defendant had left for Canada on 15.03.2010. The plaintiff has also averred in the plaint that the plaintiff was to make the balance payment within 30 days from the date of conversion of the suit property into freehold.
6. The plaintiff in the plaint has also averred that at the time of entering into an agreement with the defendant, the plaintiff had orally represented to the defendant that the plaintiff would be arranging a loan from the bank and the same would be released by the bank directly to the defendant on behalf of the plaintiff at the time of registration of sale deed. The plaintiff applied for a loan with ICICI bank and the same was sanctioned through a letter dated 27.03.2010. The plaintiff in the plaint has also averred that other than a loan from ICICI bank the balance amount was lying ready with the plaintiff since 27.03.2010.
7. As per the averments in the plaint, the plaintiff has been ready and willing to make the entire balance payment to the defendant, CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 4/51 however, the defendant defaulted and breached the terms of contract, as the defendant failed to get the suit property converted into a freehold. The plaintiff has averred in the plaint that defendant on his return from Canada started to demand extra money from the plaintiff, the plaintiff declined to accede to such illegal requests of the defendant.
8. On 08.10.2010, the plaintiff visited the residence of the defendant to enquire about the probable date of conversion and also the date of execution of sale deed. The defendant did not commit anything to the plaintiff, however, the defendant started fighting with the plaintiff and even called the police. It is averred in the plaint that when the plaintiff informed the police that he had gone to the house of the defendant with regard to fixing a date for execution of the sale deed, the police took no action against him.
9. On 11.10.2010, the plaintiff received a telephonic call from the defendant, the defendant not only threatened the plaintiff but also demanded an enhanced amount of ₹8,00,000/- (Rupees Eight lakhs only) towards the sale consideration. It is averred in the plaint that the demand of ₹8,00,000/- (Rupees Eight lakhs only) made by the defendant is illegal and contrary to the terms and conditions of the agreement duly entered between the parties. On 13.10.2010, the plaintiff through a notice called upon the defendant to intimate the date of execution of a sale deed, as the plaintiff is ready and willing to CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 5/51 execute the sale deed and also make the entire balance payment to the defendant.
10. Subsequent to the issuance of the notice dated 13.10.2010 by the plaintiff, on 15.10.2010, the plaintiff received a notice dated 11.10.2010 on from the defendant, wherein the defendant had terminated the agreement to sell dated 12.02.2010. The plaintiff has averred in the plaint that the termination notice dated 11.10.2010 is illegal and based on wrong facts. The plaintiff has also averred in the plaint that the stage of payment of the balance sale consideration had never arrived, as the suit property has not been converted into freehold from leasehold property, which was the responsibility of the defendant under the agreement to sell. Though, the said responsibility was given by the defendant to Sh. Pradeep Chawla. The plaintiff has also averred in the plaint that the delay in conversion of the suit property happened on account of the default of the defendant, as the defendant left the country and failed to fulfil the necessary formalities required for conversion of the property from leasehold to freehold. The plaintiff in his plaint has stated that in no manner the delay in conversion of the suit property can be attributable to the plaintiff. Lastly, the plaintiff has averred that on 15.10.2010, the defendant threatened the plaintiff that in case the plaintiff is not going to oblige and accede to the demands of the defendant, the defendant would sell the suit property to someone else at a higher price and the defendant is also contemplating CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 6/51 to leave the country after selling the property to some other person other than the plaintiff.
11. In short, the case put forward by the plaintiff is that subsequent to the entering into an agreement to sell, the plaintiff had not only paid substantial amount of money towards the total sale consideration but also the plaintiff had been ready and willing to execute the sale deed and also pay the balance sale consideration to the defendant. It is the defendant who is at fault and has breached the contract, as the defendant failed to get the suit property converted from leasehold to freehold.
12. The defendant filed his written statement. The defendant in his written statement has urged the defence that it was clearly recorded in the agreement to sell dated 12.02.2010 that it shall be the sole responsibility of Pradeep Chawla to get the suit property converted from leasehold to freehold with DDA. The defendant has also urged that in fact the responsibility was undertaken by Pradeep Chawla and the plaintiff. The defendant has stated in his written statement that he had inducted a tenant only a few months, prior to entering into an agreement to sell dated 12.02.2010, regardless, the defendant issued an eviction notice dated 22.03.2010 to his tenant that he has entered into an agreement to sell and would be alienating the suit property, sometime in October 2010. The defendant in his written statement has admitted that the balance sale consideration was to be paid within 30 days from the date of conversion of the suit property from leasehold CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 7/51 property to freehold property. The defendant has also stated in his defence that the entire deal was to be finalised by 30.09.2010. The defendant has placed reliance on a written note dated 22.03.2010 with regard to the finalising, closing of the deal by 30.09.2010. The defendant in his written statement has averred that, as a matter of fact, the defendant handed over a demand draft of ₹52,220/- (Rupees Fifty two thousand two hundred and twenty only) to Pradeep Chawla in favour of DDA. It is also averred by the defendant that he had taken all the necessary steps with regard to conversion of suit property. The defendant in his written statement has averred that at the time of signing of the agreement to sell not only the defendant informed Pradeep Chawla and the plaintiff but also the said fact has been duly mentioned in the agreement to sell dated 12.02.2010 that the defendant does not reside at the given address and he has no residence proof with regard to the suit property. The plaintiff opened the defendant's bank account with Union Bank of India, Sector 6, Dwarka, Delhi, as a proof of residential address of defendant.
13. The defendant in his written statement has averred that after reaching USA, the defendant was in constant touch with the plaintiff and Pradeep Chawla through email. The defendant has also averred in the written statement that the plaintiff informed the defendant in July 2010 that Pradeep Chawla and the plaintiff have applied for the conversion of suit property. The defendant has also stated in the written statement that an email was sent by the plaintiff to the CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 8/51 defendant that the defendant will be required to be present for execution of sale deed on 29.09.2010. Subsequent to receiving an email from the plaintiff, the defendant changed all his travel plans and reached India in the last week of September 2010, so that he can execute the sale deed, as per the terms and conditions of the agreement to sell dated 12.02.2010. The defendant has stated in his written statement that once he reached India, the defendant realised that the suit property has not been converted into freehold and he contacted Pradeep Chawla and the plaintiff that why he had been called when the conversion of the suit property was still pending.
14. On 19.04.2011, admission- denial of documents was undertaken by the parties. The defendant out of the various documents filed by the plaintiff, only admitted four documents filed by the plaintiff - agreement to sell and purchase dated 12.02.2010 (Ex.P-1), receipt dated 25.02.2010 (Ex.P-2), letter dated 12.03.2010 bearing signature of the defendant, plaintiff and Pradeep Chawla (Ex.P-3), notice dated 11.10.2010 of cancellation of agreement to sell dated 12.02.2010 (Ex.P-4). The plaintiff out of the various documents filed by the defendant, only admitted two documents - receipt dated 25.02.2010 (Ex.D-1) and letter cum receipt dated 20.02.2010 (Ex.D-2). QUESTIONS
15. On 25.05.2011, the following issues were framed:
i. Whether the plaintiff has been and still ready and willing to perform his part of the contract? OPP.CS DJ ADJ No. 15165/2016
Sanjay Kapoor v. Rakesh Bawa Page No. 9/51 ii. Whether the plaintiff under the Agreement took any responsibility to get the property converted from leasehold to freehold, as alleged by the defendant? OPD. iii. Whether the plaintiff has failed to perform his part of the Agreement as alleged? If so, its effect? OPD. iv. Whether the present suit for specific performance is not maintainable in view of the preliminary objections taken by the defendant in paras 3, 4 and 5 of the preliminary objections? OPD.
v. Whether the defendant under the Agreement has any right to forfeit the sum of Rs.18.11 lakhs paid by the plaintiff towards the Agreement dated 12.02.2017? If so, whether any circumstances for forfeiture exist as alleged? OPD. vi. Whether the plaintiff is entitled for a decree of specific performance of the contract? OPP.
vii. Whether the plaintiff is entitled for a decree of permanent injunction? OPP.
viii. Relief.
16. Though the list of witnesses filed by the plaintiff had four witnesses mentioned in the said list, however, only two witnesses were examined by the plaintiff, plaintiff himself (PW1) and Sh. Vinay Kumar Tiwari, Manager, ICICI Bank, Udyog Vihar, Phase - II, Gurgaon - (PW2). As per the list of witnesses filed by the defendant, the names of four witnesses were mentioned in the same. However, CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 10/51 only two witnesses stepped in the witness box for the defendant, DW1
-- defendant himself and DW2 -- Sh. Dashrath, SSA from the office of DDA, Vikas Sadan, INA, Delhi.
17. PW1 in his cross-examination stated that there was no services (sic) by real estate agent in the present deal since he telephoned after seeing the advertisement in a newspaper. PW1 also stated that Pradeep Chawla had a shop in Dwarka and he does not know whether he was a resident of Dwarka. PW1 admitted that he telephoned Pradeep Chawla after seeing his advertisement and met him thereafter.
18. PW1 during his cross-examination voluntarily stated that the witnesses to Ex.P-1 had no role in getting the property converted into freehold and the responsibility to get the conversion of the property was of Mr. Chawla and Mr. Bawa (defendant herein). PW1 denied that Pradeep Chawla was his broker and was assisting him throughout in the transaction with Mr. Bawa.
19. PW1 admitted that Mr. Bawa told him on 12.03.2010 that he would be out of India during summers. PW1 also admitted that he did ask Mr. Bawa, as to how the property could be converted into freehold when he is travelling abroad. PW1 voluntarily stated that Mr. Bawa told him that he would get it converted after his return. PW1 admitted that Mr. Bawa told him that he would be coming back to India during September.
20. PW1 admitted he is an income tax payee. However, he cannot tell his monthly or yearly income. PW1 stated that the same is taken CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 11/51 care by his CA. PW1 during his cross-examination stated that he can produce his income tax returns for the financial years 2007 - 2010, if ordered by court. PW1 admitted that the equated monthly instalment (EMI) payable to the bank would be ₹62,654/- (Rupees Sixty two thousand six hundred and fifty four only) only if he had taken the loan of ₹60,00,000/- (Rupees Sixty lakhs only). PW1 admitted that his wife is also an earning member of the family, whose income at that time was around ₹3,00,000/- (Rupees Three lakhs only) per annum. PW1 during his cross-examination stated that he can produce the income tax returns of his wife for the financial years 2007 - 2010, if ordered by court.
21. PW1 stated that he had informed the defendant through the brokers (sic) about the sanction of the loan but there was no direct intimation by him. PW1 stated that there could have been some emails between the defendant and himself, when the defendant was away at USA. PW1 denied that the defendant wrote an email dated 21.06.2010 to the plaintiff asking about the development on the conversion of the suit property. PW1 admitted that he wrote an email dated 11.09.2010 to the defendant asking him to come back for executing the sale deed. PW1 denied that Mr. Bawa in reply told him that he would be executing the sale deed on 29.09.2010 after his arrival on 27.09.2010. PW1 voluntarily stated that Mr. Bawa told him that he would get the suit property converted into freehold by 29.09.2010. PW1 denied that Mr. Bawa wrote an email dated 13.09.2010 intimating him about his CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 12/51 anguish for not informing him about the development of getting the suit property converted from the authority.
22. PW1 admitted the fact of visiting the house of Mr. Bawa on 08.10.2010 at 7:00 p.m. along with Pradeep Chawla and Aman Makkar (his brother-in-law).
23. PW1 stated that the defendant did not give any document to him for the purpose of conversion of the property into freehold before the defendant left for USA. PW1 admitted his signatures on Ex.P3. PW1 voluntarily stated that Ex.P3 is a letter in the handwriting of the defendant. On PW1's attention being drawn to portion marked as Mark A to A-1 of Ex.P3, PW1stated that the suggestion, the documents were delivered to me is incorrect. PW1 voluntarily stated that the documents might have been given to Pradeep Chawla. PW1 denied that there was a condition in the agreement Ex.P1 that the suit property shall be converted into freehold before executing the sale deed.
24. PW2 was summoned by the plaintiff. PW2 proved the loan sanction statement dated 09.10.2010 - Ex.PW2/1 pertaining to plaintiff's loan account No. LBGUR00001829275 with the ICICI bank. As per the loan sanction statement - Ex.PW2/1, the sanctioned amount was ₹50,00,000/- (Rupees Fifty lakhs only). PW2 during his cross-examination stated that he has not brought the loan application submitted by the plaintiff with the bank. PW2 admitted that the loan was never disbursed to the plaintiff.
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25. DW1 in his evidence proved receipts dated Ex.DW-1/A, eviction notice dated 22.03.2010 Ex.DW1/B and emails exchanged amongst the defendant, plaintiff and Pradeep Chawla - Ex DW1/C. It is observed that an objection to the mode of proof of want of a certificate under Section 65B of the Indian Evidence Act was taken by the counsel for the plaintiff. Ld. Predecessor of this court dealt with the objection and the emails were taken on record Ex.DW-1/C, as the defendant filed the certificate in accordance with law. DW-1 also placed on record his discharge slip by Atrium Medical Center, Middletown, Ohio, USA.
26. DW1 in his cross-examination stated that he is suffering from heart ailment, asthma, Parkinson's disease, myclonus, nerves problems, lower back issues, etc. DW1 also stated that after execution of the agreement to sell, another purchaser approached him in February 2010 for purchase of the suit property. DW1 stated that he does not remember the name of the purchaser who offered him ₹1,00,00,000/-(Rupees One Crore only ).
27. DW1 in his cross examination stated that the parties agreed that the entire transaction shall be completed within the period of 60 days and he referred to the clause 'C' of Ex.P-1 which records the same. DW-1 denied the suggestion that he had to pay serparate fee to Pradeep Chawla for conversion of the suit property. DW1 admitted that he did not come to India between the intervening period from CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 14/51 March 2010, till 28.09.2010. DW1 further stated that he had gone to USA for his medical treatment and his children reside in USA.
28. DW1 stated that he had handed over all the required documents for the purpose of conversion of the suit property to Sanjay Kapoor(plaintiff herein) and after taking his receiving handed over it to Pradeep Chawla. DW1 during his cross examination stated that he had prepared a demand draft for ₹52,000/- (Rupees Fifty two thousand only) for the purpose of conversion of suit property.
29. DW1 during his cross examination admitted that Ex.P-1 provided a period of 30 days after the conversion of the suit property to leasehold to freehold, the complete payment was to be made by the plaintiff. DW-1 denied the suggestion that he had requested the plaintiff that sale deed would be executed after expiry of the lease period of tenancy. DW1 voluntarily stated that he had terminated the tenancy of his tenant before expiry of the lease term. DW-1 also denied the suggestion that he had given time till 30.09.2010 to Pradeep Chawla for conversion of the suit property. DW1 voluntarily stated that he had given the said deadline to Pradeep Chawla and Sanjay Kapoor (plaintiff herein).
30. DW1 admitted that he had to pay 1% of the whole transcation amount to Pradeep Chawla. DW1 voluntarily stated that even the plaintiff had to pay similar commission to Pradeep Chawla.
31. DW1 admitted the receipt of email dated 19.06.2010 from Pradeep Chawla, wherein Pradeep Chawla had intimated him that CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 15/51 conversion of suit property would take 60 to 65 days. DW1 admitted that on 26.02.2010, Sanjay Kapoor (plaintiff herein) requested him to come to India so that all the formalities for the conversion of suit property may be completed. DW1 admitted that suit property is still a leasehold property. DW1 stated that he did not receive letter from DDA bearing letter No.(2766)/10/GH/DDA/1002 dated 11.10.2010 - (Ex.DW2/1). DW1 denied receiving the letter dated 11.10.2010 - (Ex.DW2/1). DW1 stated that the Ex.DW2/1 wrongly states his address and upon being asked, DW1 stated that he has never resided at the address of the given flat i.e the suit property. DW1 denied the suggestion that he had received Ex.DW2/1 and failed to appear before DDA on 15.10.2010 alongwith relevant documents.
32. DW2, was a summoned witness and proved the letter No. (2766)/10/GH/DDA/1002 dated 11.10.2010 - (Ex.DW2/1). Submissions by the Ld. Counsels for the parties
33. Sh. Madhurender Jha, Ld. Counsel for the plaintiff and Sh. Anirudh Mehrotra, Ld. Counsel for the defendant advanced final arguments.
34. Sh. Jha submitted that the defendant is the owner of the suit property and entered into an agreement to sell dated 12.02.2010 with the plaintiff for ₹90,00,000/- (Rupees Ninety lakhs only). Ld. counsel further submitted that against the total sale consideration of ₹90,00,000/- (Rupees Ninety lakhs only) the plaintiff has already paid ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) to the CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 16/51 defendant and the agreement to sell dated 12.02.2010 - Ex.P1 is undisputed agreement between the parties.
35. Ld. counsel for the plaintiff further submitted that the balance amount of ₹71,89,000/- (Rupees Seventy one lakhs and eighty nine thousand only) was to be paid by the plaintiff to the defendant within 30 days from the date of the conversion of the suit property from leasehold to freehold by DDA. Ld. counsel for the plaintiff submitted that it is the case of the plaintiff that defendant did not take any steps to get the property freehold. The defendant in September 2010 sought extension from the plaintiff, as he was travelling to USA. Ld. counsel drew attention of the court to the - Ex.P3, a handwritten letter of the defendant dated 12.03.2010, wherein the defendant has agreed that it is the responsibility of the broker Shri Pradeep Chawla to get the suit property converted from leasehold to freehold.
36. With regard to the readiness and willingness of the plaintiff, Ld.counsel for the plaintiff submitted that the plaintiff had already arranged a loan of ₹60,00,000/- (Rupees Sixty lakhs only) from ICICI bank, a loan sanction letter dated 27.03.2010 Ex.PW1/1 had been proved by the plaintiff. Ld.counsel for the plaintiff further submitted that with regard to the balance amount of ₹12,00,000/- (Rupees Twelve lakhs only) not being a huge amount, was readily available with the plaintiff and at his disposal.
37. Ld. counsel for the plaintiff submitted that the conversion of the suit property from leasehold to freehold was to be done in a time CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 17/51 bound manner i.e. within reasonable time. Ld. counsel strenuously argued that the defendant failed to get the suit property converted from leasehold to freehold within reasonable time. Ld. counsel for the plaintiff submitted that there has been blatant breach of contract on the part of the defendant and the defendant has turned greedy and started to demand more money from the plaintiff and once the plaintiff refused to accede to the illegal demands of the defendant, the defendant illegally terminated the agreement to sell dated 12.02.2010 by a termination notice dated 11.10.2010. Ld. counsel further submitted that the termination notice dated 11.10.2010 was only received by the plaintiff on 15.10.2010, whereas, the plaintiff had prior to receipt of the aforesaid termination notice issued a notice dated 13.10.2010 to the defendant, requesting him to fulfil his obligations and apprise the plaintiff about the prospective date of the execution of the sale deed.
38. Ld. counsel for the plaintiff submitted that the plaintiff regularly informed the defendant via email to get the suit property freehold from DDA. Ld. counsel for the plaintiff submitted that Pradeep Chawla was the defendant's agent and if at all there is default it is of the defendant and Pradeep Chawla. Ld. counsel submitted that the plaintiff was always ready and willing to perform the contract.
39. Per contra, Sh. Anirudh Mehrotra, Ld. Counsel for the defendant flanked challenge to the submissions advanced by the Ld. Counsel for the plaintiff.
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40. Sh. Mehrotra, Ld. Counsel for the defendant submitted that the plaintiff has neither shown nor proven his readiness and willingness to pay the balance sale consideration and discharge his obligations, as per the contract. Ld. counsel submitted that the defendant has failed to lead any evidence with regard to the sufficiency and sources of the balance payment. Ld. counsel for defendant submitted that other than the loan sanction letter issued by the ICICI bank - Ex.PW1/1, the plaintiff has failed to prove any source of funds to substantiate and corrobatrate his claim that the plaintiff had funds ready and at his disposal. Ld. Counsel for the plaintiff submitted that the plaintiff has neither filed any income tax returns nor any bank statements to support and prove his claim that the plaintiff had enough money at his disposal to honour the commitment, as per the agreement to sell dated 12.02.2010.
41. Ld. counsel for the defendant submitted that the suit property date is a leasehold property. Ld. counsel submitted that the plaintiff and Pradeep Chawla failed to get the suit property converted from leasehold to freehold and it was their obligation, as per the terms and conditions of the agreement to sell dated 12.02.2010.
42. Ld. counsel for the defendant further submitted that the bona fide of defendant are unquestionable, as the defendant had not only issued eviction notice to his newly inducted tenant but also the defendant had returned from U.S.A., regardless of his state of health. Ld. counsel for the defendant submitted that the defendant to honour CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 19/51 his commitments and at the behest of the plaintiff, returned to India well in advance and even scheduled his pick-up and drop with Pradeep Chawla and the plaintiff from his residence to the concerned Sub Registrar's office to execute the sale deed and backwards. Ld. counsel submitted that once the defendant was back from USA and the date of his return informed well in advance to the plaintiff and Pradeep Chawla, thus the defendant was ready to sign an execute the sale deed, provided the entire sale consideration was paid by the plaintiff to the defendant.
43. Ld. counsel for the defendant further submitted that the present suit by the plaintiff against the defendant is a counterblast to the criminal complaint against the incident of 08.10.2010 which culminated into a FIR No. 636 dated 20.11.2010, Police Station - Civil Lines, Gurgaon, lodged by the defendant against the plaintiff, Pradeep Chawla and Aman Makkar with regard to the incident of 08.10.2010 at the house of the defendant. Ld. counsel further submitted that the plaintiff and Pradeep Chawla are hand in glove and it was the plaintiff and Pradeep Chawla who had undertaken to get the suit property converted from leasehold to freehold. Ld. counsel further submitted that Pradeep Chawla has knowingly evaded the process of law and regardless of the summons issued by this court, Pradeep Chawla did not appear before this court as a witness. Ld. counsel further submitted that Pradeep Chawla and the plaintiff had jointly moved a quashing petition before the Hon'ble High Court of Punjab & CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 20/51 Haryana and were represented by a common counsel, thus, it is apparent nay evident that why Pradeep Chawla has been evading the process of law.
44. Sh. Mehrotra, Ld. counsel for the defendant further submitted that Pradeep Chawla is a signatory to the agreement to sell dated 12.02.2010 but the plaintiff has not impleaded Pradeep Chawla, as a party to the suit. Ld. counsel for the defendant submitted that with Pradeep Chawla being a necessary party to the suit and him not being impleaded as a party, the suit is bad for non-joinder of parties.
45. Ld. counsel for the defendant submitted that the defendant returned from USA on 27.09.2010, as the plaintiff had informed the defendant by email that the conversion of suit property is in the last phase and the sale deed would be executed anytime between 29.09.2010 to 10.10.2010. It was only when the defendant reached India, the defendant was informed that the property has not yet been converted into a freehold property.
46. Subsequent to the incident of 08.10.2010, the defendant issued a termination notice dated 11.10.2010 - Ex.PW1/10 to the plaintiff and terminated the contract between the parties. Ld. counsel for the defendant further submitted that the notice dated 13.10.2010 purportedly issued by the plaintiff to the defendant seeking performance of contract is an afterthought, as the defendant had already terminated the contract vide notice dated 11.10.2010.
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47. Ld. counsel for the defendant further submitted that the defendant has summoned a witness from DDA, the whole purpose of summoning of witness from DDA (DW2) was to show that it was plaintiff and Pradeep Chawla's obligation to get the suit property converted from leasehold to freehold.
48. Ld. counsel for the defendant drew attention of the court to the cross examination of PW1, and submitted that the plaintiff has admitted that he owns another property in the same society, and as per the bye-laws of the society and applicable Rules of DDA, a person who already owns a flat in a given society cannot purchase a subsequent flat in the very same society.
49. Sh, Jha rejoined his arguments and submitted that the plaintiff purchased property in the year 2013 in the joint name of his wife. Ld. counsel submitted that the plaintiff had already sold the property, which he purchased in the joint name of his wife and himself, thus, the plaintiff owns no property in the given society.
50. Sh. Jha, Ld. Counsel for the plaintiff submitted that the present suit by the plaintiff is not a counterblast to the FIR. Ld. counsel for plaintiff further submitted that quashing petition had been preferred by the plaintiff before the Hon'ble High Court of Punjab & Haryana in the year 2010 and by judgment dated 20.07.2018 passed by the Hon'ble High Court of Punjab & Haryana in Sanjay Kapoor & Ors. v. State of Haryana & Anr. - CRM-M No. 38638 of 2013, the FIR No. 636 dated 20.11.2010 stands quashed.
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51. Ld. counsel for the plaintiff further submitted that the legal notice dated 13.10.2010 issued by the plaintiff was duly delivered upon the defendant, vide Ex.PW1/2 - Ex.PW1/4. Ld. counsel further submitted that whereas the plaintiff received the notice issued by the defendant only on 15.10.2010 vide Ex.P-4.
52. Lastly, Ld. counsel for the plaintiff submitted that the defendant in his cross-examination has admitted that the prices of property, particularly in the residential society where the suit property is situated and also in the neighbourhood have soared. Ld. counsel for the plaintiff submitted that with the prices of suit property having skyrocketed the defendant has resiled out of the contract, as the defendant has become greedy and has made illegal demands of more money from the plaintiff.
53. The counsels for the parties also advanced submissions on an application moved by the plaintiff against the defendant under Order XXXIX, Rule 2A, CPC.
54. Ld. counsel for the plaintiff submitted that the defendant stands in breach of the order dated 03.03.2014, passed by the Hon'ble High Court wherein the defendant was only granted permission to let out the suit property to a tenant for 11(eleven) months. The defendant has let out the suit property for a duration longer than 11(eleven) months and the defendant stands in breach of the court's order, hence the application under Order XXXIX, Rule 2A, CPC.
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55. Sh. Mehrotra, Ld. counsel for the defendant, has opposed the application moved by the plaintiff and submitted that the defendant within his lawful right and realm of the interim order dated 03.03.2014 and 20.10.2010, had let out the suit property. Ld. counsel for the defendant further submitted that there has been no occasion for wilful breach of the orders passed by this court. Ld. counsel for the defendant submitted that the defendant is a law abiding citizen and under no manner and occasion the defendant has subdued the majesty of the court.
REASONING & FINDINGS
56. I have perused the complete case record and considered and deliberated the submissions advanced by the Ld. counsels for the parties.
57. However, I deem appropriate to reproduce the agreement to sell dated 12.02.2010, as the same is the bone of contention between the parties. The reproduction of the AOS dated 12.02.2010 is expedient for proper adjudication of the dispute between the parties, which as under:
"Ex. P-1 Agreement to Sale & Purchase This agreement is made at New Delhi on This day of February 12, 2010 between Rakesh Bawa S/o Late Shri G.S. Bawa resident of E-708 Rail Vihar, Sector - 15, Part- II, Gurgaon, Haryana, 122001.CS DJ ADJ No. 15165/2016
Sanjay Kapoor v. Rakesh Bawa Page No. 24/51 (Hereinafter called the "First party") of the one part AND Shri Sanjay Kapoor s/o Shri Jagdish Kapoor resident of C-2/374 Janak Puri, New Delhi:
110058 (Hereinafter called the "second party") of the other part respective heirs, executors, administrators and assignees unless and until it is repugnant to the context or meaning thereof. WHEREAS the First party is the expression of the terms First party and second party wherever they occur in the body of this Agreement shall mean and include their legal owner of premises Flat No. 213, Surya Apartment, Plot No. 14, Sector -6, Dwarka, New Delhi: 110075 (hereinafter called the said property).
And whereas the first party have agreed to sell and the second party have agreed to purchase the said property absolutely and forever on the following agreed terms and conditions for this agreement. This deal is being made through Property Dealer 'M/s Multilink Property' being represented by Mr. Pardeep Chawla, M/s Multilink Property having their office at G-8, Wadhwa Plaza, Plot No. 11, Sector 16, Dwarka, New Delhi-110075.
NOW THE AGREEMENT WITNESS AS UNDER:
A) That buyer wish to buy the property only after it gets the status of free hold property by CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 25/51 DDA (Delhi Development Authority) hereinafter called DDA.
B) That the seller has agreed to pay the official fee of DDA for getting the flat free hold.
C) That Mr. Pardeep Chawla has taken the responsibility to get the property free hold from DDA within maximum 60 days from the date of all the documents provided to him by the seller detail of which is hereunder.
D) That Mr. Pradeep Chawla has informed the seller (Rakesh Bawa) in the presence of the buyer (Mr. Sanjay Kapoor) that the following documents will be needed to get the said property Free hold from DDA:
a. Copy of the share Certificate showing membership of the seller in Surya CGHS Limited. b. Copy of the allotment letter.
c. Copy of the possession letter.
d. No due certificate from the Surya Society with plinth area shown.
e. Copy of the House Tax (Property Tax) receipt. f. Nine photographs of the seller Mr. Rakesh Bawa. g. Bank A/c to be opened, Mr. Pardeep Chawla's responsibility.
h. All the documents will be self attested.
It has been categorically informed to the broker (Mr. Pardeep Chawla) as well as to the buyer (Mr. Sanjay Kapoor) that the seller (Mr. Rakesh Bawa) does not live at the property being sold vide this agreement and therefore he does not possess the residential proof of the Flat No. 213, Surya CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 26/51 Apartments, Plot No. 14, Sector -6, Dwarka, New Delhi: 110075 as it is currently leased to Mr. Vikas Mahajan.
Further it was decided that the Seller will pay 20% of the sales consideration as Bayana (Advance as earnest money) totaling amount of Rs.
18,000,00.00 (Eighteen Lacs Only). Sales price being Rs. 90,000,00.00. (Rs. Ninety Lacs Only).
Further it was also agreed between buyer and the seller that after the above flat is registered as Free Hold by the Delhi Development Authority the buyer will make the balance payment of Rs.
72,000,00.00 (Rs. Seventy Two Lacs) within thirty days from the date it is registered with DDA as free hold property, failing which the entire Bayana will be forfeited.
Beside this agreement there are two more documents which are part and parcel of this agreement which are attached hereto. One dated February 12, 2010 and other dated February 20, 2010. These documents also show that the buyer has defaulted once and hence have no legal right for this sales deed and the entire amount paid until this day can be forfeited. Seller being generous have mentioned in these two documents that he will hold only 50% of the bayana given on February 12, 2010 and rest will be returned and this agreement will become null and void. It was categorically made clear to the buyer that if there is any additional default on his part , the entire amount of the bayana will be forfeited and this agreement will become null and void. To this CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 27/51 buyer has accepted in the presence of Mr. Pardeep Chawla (Representative of Broker M/s Multilink Property).
That no verbal commitment or assurance has been given by the seller to buyer and the entire deal will be governed by this written agreement. This fact is acknowledged and accepted by the buyer as well as the broker Mr. Pardeep Chawla (Representative of Broker M/s Multilink Property).
A) That the entire consideration amount of the rights. Interests, Liens & Lease, and titles of the first party in the said property is fixed between the parties at Rs. 90,000,00.00 (Rupees Ninety Lacs Only) out of which a sum of Rs. 600,000.00 (Rupees Six Lacs only) has been received by the first party from the second party as advance money in respect of the said property, and the first party hereby confirm and acknowledges the same in following manners:
Amount Cash/ Date Drawn
Cheque No.
Rs. 6,00,000.00 Cash 12.02.2010
(Rupees Six Lacs
only)
Any additional payment as and when received, a separate receipt will be issued to the buyer by the seller.
1) That the balance amount of Rs. 84,000,00.00 (Rupees Eighty Four Lacs Only) will be paid by the second party to the first party in the manner described here below:CS DJ ADJ No. 15165/2016
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i) Balance of Bayana Rs.12,000,00.00 (Rupees Twelve Lacs) to make it complete twenty percent will be paid on or before March 4, 2010.
ii) And the remaining Rs. 72,000,00.00 (Rs. Seventy Two Lacs will be paid within 30 days from the day the said property is declared as free hold by DDA.
iii) The first party shall execute all the necessary document in favour of second party or his / her/ their nominee/s at the time of final payment.
2)That the peaceful physical and vacant possession of the said property shall be handed over by the first party to the second party on receipt of the balance sale consideration amount and registration of the said flat in the name of the buyer as mentioned in clause No. 2.
3)That the first party has assured and second party that, the said property is free from all sorts of encumbrances like mortgage, sale, gift, exchange, court, injunction etc., and if it is proved otherwise, first party will be liable and responsible for all the damages sustained by the second party and will make good the same to the second party.
4)That all the liabilities upto the date of finalisation of the deal will be paid by the first party and the same will be paid by the second party after finalisation of the deal.
5)That the First party further assures the second party that prior to this agreement to sell, it has not CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 29/51 entered into any kind of agreement of any nature whatsoever, and also during this next forty five days granted for getting the property free hold the first party shall not enter into any agreement.
There after it will be free from this agreement.
6)That if the second party fails to make the balance payment within above mentioned stipulated period, the advance amount paid by him will be forfeited and if the first party is unable to execute the said deal in favour of the second party, the first party will be liable to pay double of the said advance amount to the second party or the second party can get the transaction completed through court of law under specific performance of this agreement at their own cost. In case of any such condition arising no commission will be liable to the broker M/s Multilink Properties.
7)That both the parties will pay a commission of 1%(One percentage each to M/s Multilink Property).
8)That this agreement is irrevocable
9) If due to any reason this deal does not go through the broker M/s Multilink Property will neither be entitled to any commission nor will be entitled to any reimbursement of any kind of expenses by either party.
IN THE WITNESS WHEREOF, the parties, hereto have set their respective hands on this day, month, and year herein above first mentioned in the presence of the following witnesses.
CS DJ ADJ No. 15165/2016Sanjay Kapoor v. Rakesh Bawa Page No. 30/51 WITNESSES
1. FIRST PARTY
2. SECOND PARTY Place: Gurgaon, Haryana: 122001 BROKER MR. PARDEEP CHAWLA REPRESENTATIVE MULTILINK PROPERTY Date: February 12, 2010"
58. My issue wise findings ensue in the following paragraphs of this judgment.Issue No. 1
Whether the plaintiff has been and still ready and willing to perform his part of the contract?
59. The onus to prove this issue was casted upon the plaintiff. With respect to readiness and willingness on the part of the plaintiff to perform his obligation under the agreement to sell dated 12.02.2010, I observe that Section 16(c) of the Specific Relief Act, 1963 (hereinafter "SRA") requires that the plaintiff in a suit for specific performance must aver and prove that he has always been ready and willing and continues to be ready and willing to perform his part of the contract.CS DJ ADJ No. 15165/2016
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60. The principle, which can be enunciated is that where the plaintiff brings a suit for specific performance of contract for sale, the law insists upon a condition precedent to the grant of decree for specific performance - that the plaintiff must show readiness and willingness to perform his part of the contract in accordance with its terms from the date of contract to the date of hearing. It is true, as contemplated under Section 20 of the SRA, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirement for getting such a decree are established then the court has to exercise its discretion in favour of granting relief for specific performance.
61. The Courts have interpreted the expression "readiness" under Section 16(c), SRA, to mean capacity to perform i.e. financial capacity of a purchaser to pay the balance consideration. Willingness is the intention to go ahead with the agreement.
62. I observe and hold that the plaintiff has miserably failed to prove his readiness and willingness i.e. his financial capacity with respect to making available the balance sale consideration of ₹71,89,000/- (Rupees Seventy one lakhs eighty nine thousand only) precisely. It is observed that the plaintiff did not file any income tax returns either for the year of entering the agreement to sell dated 12.02.2010 or thereafter and/or of the year when the suit was filed until the plaintiff stepped into the wintess box. It is further observed CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 32/51 that the plaintiff has failed to file any bank statement, certificate to substantiate and corroborate his pleadings that the plaintiff was always ready and willing to perform the contract. It is further observed that the Ex.PW1/1 is a loan sanction letter dated 27.03.2010. It is further observed that the loan sanction letter unequivocally states the stipulations and conditions for the disbursal of the loan amount. He is observed that plaintiff knew well in march, 2010 that the sale deed would be signed, executed and registered post September, 2010. It is also observed that the disbursed of funds by ICICI Bank to the plaintiff was conditional to execution of conveyance deed and execution of conveyance deed was conditional to conversion of suit property from L to R. It is further submitted that other than Ex.PW1/1, the plaintiff has not filed any further letter, correspondence of his banker, as late as September 2010 and/or even of the date, when the plaintiff stepped into the witness box.
63. Assuming, for the sake of arguments, the submissions advanced by the Ld. counsel for the plaintiff that the stage of balance sale consideration would only come once the suit property was converted from leasehold to freehold and as per the agreed terms and conditions of the contract, the plaintiff would need to make balance payment within 30 days from the date of conversion of the suit property.
64. It is observed that the submissions advanced by the Ld. counsel for the plaintiff that with conversion of the suit property not CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 33/51 happening, the very stage of payment of balance consideration never arose, does not take the case of the plaintiff any far.
65. I am of the opinion that readiness and willingness of a plaintiff, who seeks specific performance of a contract is of primordial importance.
66. I am also of the view that merely stating in the legal notices, replies or averring in the plaint that the plaintiff is ready to perform his part of the contract is neither here nor there inasmuch as the issue of readiness is a crucial aspect and pivot on which the decree of specific performance hangs. It is for this reason that the aspect of readiness requires clear - cut evidence, which can be believed by the Court, the plaintiff proves his financial capacity.
67. PW1 during his cross examination stated that he can produce not only his income tax return but also of his wife for the financial years 2007 to 2010. It is observed that no income tax return was filed by the plaintiff. It is also observed that the plaintiff not only in his plaint has pleaded that he has arranged a loan of ₹60,00,000/-(Rupees Sixty lakh only) from ICICI Bank and the balance amount of ₹12,00,000/-(Rupees Tweleve lakhs only) was not much of an issue for the plaintiff, as he is a man of sufficient means. It is observed that PW2 witness from ICICI Bank proved Ex.PW2/A and as per which the amount of loan sanctioned to the plaintiff was ₹50,00,000/- (Rupees Fifty lakh only) and not ₹60,00,000/-(Rupees Sixty lakh only). Not only the averments in the plaint but also the submissions CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 34/51 advanced by Ld. Counsel for the plaintiff are self serving and self contradictory. It is observed that the plaintiff failed to prove his financial capacity and sufficiency with regard to the balance sale consideration.
68. I place reliance on the judgment passed by the Hon'ble High Court of Delhi in the case of Shri Jinesh Kumar Jain v. Smt. Iris Paintal & Ors. - CS(OS) No. 1154/1989 decided on 10.07.2012. His Lordship, Valmiki J. Mehta, J., eruditely culled out and applied the legal principle with regard to the readiness of a plaintiff, wherein the plaintiff had failed to prove his readiness and willingness, as the plaintiff had not filed any income tax return, statement of bank accounts to show the sufficiency and availability of funds.
69. On applying the ratio of Shri Jinesh Kumar Jain v. Smt. Iris Paintal & Ors. (supra), I hold that the plaintiff has failed to comply with the requirement of Section 16(c) of the Specific Relief Act, 1963, and therefore, the plaintiff is not entitled to the relief of specific performance. The issue No. 1 is decided against the plaintiff and in favour of the defendant.Issue No. 2
Whether the plaintiff under the Agreement took any responsibility to get the property converted from leasehold to freehold, as alleged by the defendant?
70. The onus to prove this issue is casted upon the defendant. The defendant in his written statement has urged that it was the CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 35/51 responsibility of Pradesh Charla and the plaintiff, to get the suit property converted from leasehold to freehold.
71. On perusal of the agreement to sell dated 12.02.2010, which is an undisputed document it is evident that the obligation to get the suit property converted from leasehold to freehold was casted upon Pradesh Charla. The conversion of the suit property from the leasehold to freehold is a condition precedent. The agreement to sell unequivocally states not only Pradesh Charla shall get the suit property converted but also certain prerequisites documents for the purpose of conversion were handed over to by the defendant to Pradesh Charla. It is observed that Pradesh Charla had been a signatory to the agreement to sell. The agreement to sell also has one of the terms and conditions, as commission of 1% of the total sale consideration to be paid by each party to Pradesh Charla. However, Pradesh Charla had not been arrayed as a party to the suit. Further, Mr. Chawla has remained elusive and the process for him being summoned as a witness by defendant came back unserved on the given address. It is observed that the address of Pradesh Charla, on which the process was issued by this court, is same as that mentioned in the memo of parties of the quashing petition preferred by plaintiff Pradesh Charla and Man Markka, before the Hon'ble High Court of Punjab & Maryanna.
72. The obligations to be discharged by the plaintiff, as per the agreement to sell dated 12.02.2010 is to pay the balance sale CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 36/51 consideration of ₹72,00,000/- (Rupees Seventy two lakhs only) within 30 days of the conversion of the suit property from the leasehold to freehold.
73. I hold that as per the agreement to sell dated 12.02.2010, the plaintiff did not undertake to get the suit property converted from leasehold to freehold. The conversion of suit property was an obligation undertaken by Pradesh Charla and not the plaintiff. Clause 'C' of agreement to sell dated 12.02.2010 clearly caste the obligation on Pradesh Charla and Pradesh Charla is a signatory to the agreement to sell dated 12.02.2010.
74. The issue No. 2 is decided against the defendant and in favour of the plaintiff.Issue No. 3
75. Whether the plaintiff has failed to perform his part of the Agreement as alleged? If so, its effect?
76. The onus to prove this issue is casted upon the defendant. I could from the reading of the agreement to sell dated 12.02.2010 trace the following obligations directly and/or indirectly casted upon the plaintiff:
i. to pay the balance sale consideration within 30 days from the date of conversion of the suit property from leasehold to freehold. ii. in case the plaintiff fails to pay the balance sale consideration within stipulated period, the entire payment made by the plaint shall be forfeited by the defendant.CS DJ ADJ No. 15165/2016
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77. As mentioned in the preceding paragraphs of this judgment, the conversion of the suit property from leasehold to freehold is of primordial importance and a condition precedent. The agreement to sell unequivocally records that Pradesh Charla would get the suit property converted with DDA. It is not out of place to mention the observation that Pradesh Charla is a signatory to the agreement in question. This court cannot lose sight of the fact that Pradesh Charla being a necessary party was neither imp leaded by the plaintiff nor Pradesh Charla made himself available, as he was summoned as a witness by the defendant. Interestingly, Pradesh Charla and the plaintiff had preferred a joint petition before the Hon'ble High Court of Punjab & Maryanna seeking quashing of the FIR No. 636 dated 20.11.2010 under Section 452,323 and 506, IPC lodged at PS - Civil Lines, District Purgation. The plaintiff and Pradesh Charla were represented before the High Court of Punjab & Maryanna by a common counsel, yet Pradesh Hallway kept himself away and evaded the process of law and did not appear before this court as a witness
78. Be that as it may, I observe and hold that the conversion of the suit property was solely the responsibility of Pradesh Charla and not of the plaintiff. With the condition precedent not being fulfilled, the suit property as on today is also a leasehold property, which means that the occasion for the obligation casted upon the plaintiff did not arise.CS DJ ADJ No. 15165/2016
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79. Above all, the defendant has failed to lead any evidence to shift the onus casted upon him with regard to the present issue under consideration. I hold this issue against the defendant and in favour of the plaintiff.
Issue No. 480. Whether the present suit for specific performance is not maintainable in view of the preliminary objections taken by the defendant in paras 3, 4 and 5 of the preliminary objections?
81. The onus to prove this issue is upon the defendant. The preliminary objections taken by the defendant in paragraph No. 3, 4 and 5 of the preliminary objections of the written statement are the plaint be dismissed for want of cause of action, suit is not maintainable as the plaintiff has concealed material facts from this court, and suit is not maintainable, as the agreement in question is a contingent contract and executable after the conversion of the suit property into freehold.
82. With regard to the non maintainability of the suit for want of cause of action, it is observed that with the agreement to sell dated 12.02.2010 being undisputed and payments to the tune of 20% of the total sale consideration been paid by the plaintiff to the defendant, I need not delve any further, as there is substantial cause of action to institute the present suit.
83. With regard to the concealment of facts and wrong mentioning of facts, I observe and hold that the defendant has failed to lead any CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 39/51 evidence to prove the concealment on the part of plaintiff. On the contract being a contingent contract, the defendant has averred that the impugned agreement is only executable after the conversion of the suit property from leasehold into freehold property. It is observed that the argument advanced by the defendant qua the maintainability of the suit that the agreement in question is a contingent contract does not knock out the suit of the plaintiff. Section 31 of the Indian Contract Act,1872 (hereinafter "Contract Act") defines a contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. Section 32 of the Contract Act provides the enforcement of contingent contract on an event happening, which states that the contingent contract to do or not to do anything if an uncertain future event happens, cannot be enforced by law until and unless that event has happened. If the event become impossible such contracts become void.
84. This court observes that the parties are not in dispute that the execution of the sale deed and payment of balance of total sale consideration was contingent to the conversion of suit property from leasehold to freehold. Clause 'C' of Ex.P-1 i.e agreement to sell dated 12.02.2010 unequivocally states that Pradeep Chawla has taken the responsibility to get the property freehold from DDA within maximum 60 days from the date of all the documents provided to him by the seller. It is observed that the letter dated 12.03.2010 (Ex.P-3) is not in dispute and an admitted document, which states that all the CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 40/51 documents with regard to the conversion of the suit property has been received by San jay Kickapoo (plaintiff herein) and Pradeep Chawla from Rakes Baa (defendant herein). It is an admitted position that the conversion of the suit property did not happen and the the suit property till date is a leasehold property. DW1 admitted the said fact of the suit property being leasehold property during his cross examination. This court cannot loose sight of the fact that the person on whom the obligation of conversion of suit property was casted has not appeared before the court and has become a ghost person. In short, the very contingency on which the contract between the parties hinged, did not happen at all, Section 35 of the Contract Act, provides that the same may be enforced by law. Hence, the present suit for specific performance filed by the plaintiff is maintainable, as by way of the present suit the plaintiff has sought enforcement of the contract between the parties is within the realm of law. The suit filed by the plaintiff is maintainable and the preliminary objections to the maintainability of the suit are denuded.
85. In view of the above observations, I hold that the defendant has failed to shift the onus casted upon him. The issue No. 4 is also decided against the defendant and in favour of the plaintiff.
Issue No. 5Whether the defendant under the Agreement has any right to forfeit the sum of Rs.18.11 lakhs paid by the plaintiff towards the Agreement CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 41/51 dated 12.02.2017? If so, whether any circumstances for forfeiture exist as alleged?
86. The onus to prove this issue is casted upon the defendant. Though, I need not labour much on this issue, as the position in law is well settled that regardless of an agreement, a seller cannot forfeit the earnest money and particularly, the part payment. An amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) is on a higher side to be treated as an earnest money.
87. I place reliance upon the latest judgment passed by the Hon'ble High Court of Delhi in Vandana Jain v. Rita Mathur and Ors. - RFA No. 38/2018 date of decision 20.04.2018 in a regular first appeal filed by the plaintiff in the suit impugning the judgment of the trial court dated 10.10.2017, by which the trial court dismissed the suit for specific performance filed by the appellant/plaintiff with respect to the agreement to sell dated 03.08.2011, a property situated at Nai Sarak, Delhi - 110006.
88. The appellant/plaintiff before the Hon'ble High Court of Delhi did not press the appeal for seeking the relief of specific performance but the appeal was only pressed for seeking the relief of recovery of amount of ₹14,00,000/- (Rupees Fourteen lakhs only), which the appellant/plaintiff had paid to the respondent/defendants under the agreement to sell. It is pertinent to mention herein that the entire sale consideration in the said case was around ₹1,08,00,000/- (Rupees One crore and eight lakhs only).
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89. His Lordship, Valmiki J. Mehta, J., relied upon the judgment passed in M.C. Luthra v. Ashok Kumar Khanna - RFA No. 780/2017 decided on 27.02.2018, wherein His Lordship had distinguished the judgment of the Hon'ble Supreme Court in the case of Satish Batra v. Sudhir Rawal (2013) 1 SCC 345 and relied upon the Constitution Bench judgment of the Hon'ble Supreme Court in the case of Fateh Chand Vs. Balkishan Dass AIR 1963 SC 1405 and a recent judgment of the Hon'ble Supreme Court in the case of Kailash Nath Associates Vs. Delhi Development Authority and Another (2015) 4 SCC 136. The Hon'ble Supreme Court judgment in the case of Kailash Nath Associates (supra) clarified the legal position that the earnest money paid under an agreement to sell cannot be forfeited in the absence of proving that any loss was caused to the seller.
90. I hold and observe that the ratio of the Vandana Jain v. Rita Mathur and Ors. - (supra) and M.C. Luthra v. Ashok Kumar Khanna - (supra) applies on its fours to the facts of the present case and disentitling the defendant to forfeit the entire amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only). In the present case, the defendant has led no evidence of any loss caused to him and therefore, assuming that plaintiff is guilty of breach of contract, yet, the defendant cannot forfeit the amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) lying with him. It is observed that a huge amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) out of the total sale consideration of CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 43/51 ₹90,00,000/- (Rupees Ninety lakhs only), which is slightly more than 20% cannot in law be called earnest money. The position in law is well settled that by giving a stamp of earnest money to advance price, the advance price cannot transform in earnest money. What is to be seen is the substance and not the label. It is observed that only a nominal amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) can be said to be earnest money out of the total sale consideration of ₹90,00,000/- (Rupees Ninety lakhs only) would be called as earnest money by the parties, that would not take away the fact that such amount cannot be earnest money but would in fact be part of the price to be paid for sale.
91. The defendant has failed to prove any loss be it monetary loss caused to him on account of the breach of contract by the plaintiff. Thus, the defendant has no right to forfeit the sum of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only). I decide this issue against the defendant and in favour of the plaintiff.
Issue No. 692. Whether the plaintiff is entitled for a decree of specific performance of the contract?
93. The onus to prove this issue is upon the plaintiff. As per my findings on the Issue No. 1, in the preceding paragraphs, the plaintiff has been found short of readiness and willingness on the ground of lack of financial capacity. The plaintiff failed to prove his readiness. I CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 44/51 hold that the plaintiff is not entitled for the discretionary relief of specific performance of the contract.
94. This issue is decided against the plaintiff and in favour of the defendant.
Issue No. 795. Whether the plaintiff is entitled for a decree of permanent injunction?
96. The onus to prove this issue is casted upon the plaintiff. There are three charastics of an injunction. An injunction is a judicial process, the relief obtain thereby is a restrain or prevention, and the act prevented or restrained is a wrongful. An injunction will not be granted where damages are appropriate remedy, where injunction is not an appropriate relief, where plaintiff is not entitled to an injunction on account of his conduct, where the contract cannot be specifically enforced, where the injunction would operate inequitably. Section 37 of the Specific Relief Act, 1963 provides from temporary and perpetual injunction. Section 38, of Specific Relief Act states the circumstance in which a permanent injunction can be granted. Grant of an injunction is a discretionary relief. Section 38 expressesly states that where such obligation arises from a contract, the court shall be guided by the principles and rules given in connection with the specific performance of contracts. Thus, permanent injunction will be granted to prevent breach of contract only in those cases where the contract is capable of specific performance. It is again made clear by CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 45/51 the language of Section 41(e) of the Specific Relief Act, 1963 that an injunction will not be granted to prevent a breach of contract which is not capable of specific performance.
97. In the preceeding paragraphs of this judgment, I have ruled that the plaintiff is not entitled for specific performance and thus the relief sought by the plaintiff for permanent injunction shall also fail in tandem with my findings and also the discussion in the preceeding paragraph.
98. The plaintiff has failed to discharge the onus casted upon him and this issue is accordingly decided against the plaintiff and in favour of the defendant.
99. Lastly, with regard to the application under Order XXXIX, Rule, 2A CPC this court observes that the defendant had complied with the interim orders passed by this court and the tenant was inducted subsequent to the grant of leave of court.
100. I, observe that the plaintiff is harping on violation of order dated 03.03.2014, wherein on perusal of order sheet it is traced that the court vide order dated 29.07.2011 disposed of the interim application under Order XXXIX, Rule, 1 and 2 CPC with the submission of the defendant that he has no objection, if interim order dated 20.10.2010 is confirmed, till the disposal of the subject suit on the condition that he may be granted permission to let out the suit property. It is observed that the court confirmed the interim order dated 20.10.2010 subject to the clarification that it would be open to the defendant to negotiate CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 46/51 with the prospective tenants for giving the suit property on rent. The defendant shall bring to the notice of the tenant the pendancy of the present litigation and the tenant would also be informed that the tenancy is subject to the final orders of the court. In case the defendant finds the tenant, the defendant will move an appropriate application before the court to seek permission.
101. I observe that with regard to the averment by the plaintiff that the defendant has breached the order dated 03.03.2014, it is the order dated 29.07.2011 which holds water and is to be read holistically and not myopically. The court granted liberty to the defendant to approach the court at the time of induction of tenant. I, hold that the application under Order XXXIX, Rule 2A CPC is to be dismissed, as the same is without any merits.
102. With the plaintiff not being entitled to the discretionary relief of specific performance and permanent injunction, where do we go from here. I would like to add it is not out of place to mention herein that Section 21 and 22 of Specific Relief Act, 1963, does contemplate different scenarios such as compensation, refund of earnest money as alternative relief and it is for this reason it provides amendment at any stage of the proceedings. I must note that the plaintiff should have been cautious enough to claim the alternative relief of damages/compensation and which a prospective purchaser is always entitled to. Unfortunately, the present suit is a suit for specific performance and permanent injunction and the plaintiff not even at the CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 47/51 stage of the final arguments urged that the plaintiff intends to amend the plaint and seek alternative relief of damages/compensation.
103. I, place reliance upon the judgments passed by Hon'ble High Court of Delhi in Ashok Kumar Arora v. D.S. Sodhi - RFA No. 152/2013 decided on 21.03.2013 and Shri Jinesh Kumar Jain v. Smt. Iris Paintal & Ors. - CS(OS) No. 1154/1989 decided on 10.07.2012.
104. His Lordship, Valmiki J. Mehta, J., in Shri Jinesh Kumar Jain v. Smt. Iris Paintal & Ors. - CS(OS) No. 1154/1989 decided on 10.07.2012,has found a middle path for such cases. The relevant paragraphs of Shri Jinesh Kumar Jain (supra) are reproduced as under:
"19. At this stage, I must note that actually the plaintiff should have been cautious enough to claim the alternative relief of damages/compensation and which a prospective purchaser is always entitled to. Unfortunately, the subject suit is only a suit for specific performance in which there is no claim of the alternative relief of compensation/damages. Not only is there no case set out with respect to the claim of damages/compensation, the plaintiff has led no evidence whatsoever as to difference in market price of the subject property and equivalent properties on the date of breach, so that the Court could have awarded appropriate damages to the plaintiff, in case, this Court came to the conclusion that though the plaintiff was not entitled to specific performance, but he was entitled to damages/compensation because it is the defendants who are guilty of breach of contract.CS DJ ADJ No. 15165/2016
Sanjay Kapoor v. Rakesh Bawa Page No. 48/51
20. The question is therefore what ought to be done. Though this has not been at all argued on behalf of the plaintiff, I think in exercise of my power under Order 7 Rule 7 CPC I can always grant a lesser relief or an appropriate relief as arising from the facts and circumstances of the case. It cannot be disputed that the defendants have received a sum of `4,50,000/under the agreement to sell dated 26.9.1988. Considering all the facts of the present case as detailed above, I consider it fit that though an agreement itself was void under the 1972 Act, the plaintiff should be entitled to refund of the amount of `4,50,000/- alongwith the interest thereon at 18% per annum simple pendente lite and future till realization.
21. In view of the above discussion, suit of the plaintiff claiming the relief of specific performance is dismissed. The plaintiff however will be entitled to a money decree for a sum of `4,50,000/-
alongwith pendente lite and future interest at 18% per annum simple till realization.
22. Parties are left to bear their own costs. Decree sheet be prepared."
105. I, also place reliance upon the latest judgment of the Hon'ble High Court of Delhi in Anuja Sharma v. Memo Devi & Ors. - RFA No. 157/2019 decided on 22.02.2019, wherein the Hon'ble High Court upheld the findings and reasoning of the trial court applying the provision of Order VII, Rule 7, CPC, as this provision entitles every CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 49/51 court, depending on the facts of each case, to give reliefs which otherwise arise from the position of the facts as found on record in terms of the pleadings and evidence in the case.
106. This court cannot lose sight that the plaintiff paid an amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) to the defendant in March 2010. The defendant had been in possession of the suit property throughout and had even let out the suit property and been enjoying the rent of the suit property ever since.
107. I deem appropriate to exercise the power vested in this Court under Order VII, Rule 7, CPC. The Court can always grant a lesser relief or an appropriate relief as arising from the facts and circumstances of the case. It cannot be disputed that the defendant received an amount of ₹18,11,000/- (Rupees Eighteen lakhs and eleven thousand only) under the agreement to sell dated 12.02.2010. Given due weightage to all the facts and circumstances of the present case, I consider it appropriate that the plaintiff should be entitled to refund of ₹17,00,000/- (Rupees Seventeen lakhs only) alongwith simple interest @9%p.a. pendente lite and future till realization. DECISION
108. In light of the above findings and discussions, the suit of the plaintiff seeking specific performance is dismissed. However, the plaintiff will be entitled to a money decree for a sum of ₹17,00,000/- (Rupees Seventeen lakhs only) alongwith simple interest @9%p.a. pendente lite and future till realization. The interim orders dated CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 50/51 20.10.2011 and 29.07.2011 are vacated. All interim applications, if any, are dismissed.
109. Parties to bear their own costs. Decree sheet be prepared, accordingly.
110. File be consigned to record room only after due compliance and necessary action. Digitally signed by HARGURVARINDER SINGH HARGURVARINDER JAGGI SINGH JAGGI Date: 2019.04.02 17:48:33 +0530 Pronounced in the open court (HARGURVARINDER S. JAGGI) on 02.04.2019 Addl. District Judge-02 South West Dwarka Courts Complex New Delhi CS DJ ADJ No. 15165/2016 Sanjay Kapoor v. Rakesh Bawa Page No. 51/51