Delhi District Court
Bhajan Singh vs Sushma Dua on 9 June, 2017
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IN THE COURT OF SH. RAKESH KUMARIV, ADJ06
WEST DISTRICT,TIS HAZARI COURTS
CS No. 11611/16
Bhajan Singh
S/o Late Sh. Lala Ganga Bishan
R/o J3, Rajouri Garden,
New Delhi110027
.........Plaintiff
Versus
1. Sushma Dua
W/o Sh Partap Kumar Dua
2. Shri Ankur Dua
S/o Sh Partap Kumar Dua
Both R/o V299, Second Floor,
Rajouri Garden,
New Delhi110027
...... Defendants
Date of Institution: 13.11.2009
Date reserved for judgment: 08.06.2017
Date of Judgment: 09.06.2017
JUDGMENT
1. By filing the present suit plaintiff seeking to pass decree
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for specific performance in favour of plaintiff and against the
defendant thus, defendant is directing to perform his part of obligation
as per agreement to sell dated 13.04.2009 Ex.PW1/1 or Ex.P1
(21.03.2011) interalia by executing and getting registered Sale deed in
favour of plaintiff coupled with the delivery of original possession and
original title deed of the property bearing in respect to the entire
Second Floor (back side) without roof and terrace right, built on land
area measuring 100 sq yard part of the property bearing no. V299,
Rajouri Garden, New Delhi27 subject to payment of balance
consideration amount, to pass a money decree to the tune of Rs.
41,00,000/ alongwith interest @ 12 % per annum w.e.f 13.04.2009 to
05.11.2009 and claimed damages equivalent to differentiate value
with pendentelite and future interest @ 12 % p.a, to pass the decree of
perpetual injunction in favour of plaintiff and against the defendant
thus restraining the defendant, legal heirs, successors, assignes and
other persons working under her or on her behalf for selling,
ailenating / transferred the property in question and to pass the decree
of mandatory injunction in favour of plaintiff and against the
defendant thus direction the defendant to accept the sum of Rs
20,00,000/ convey the title possession and executed the sale deed in
favour of plaintiff in respect to the property in question along with
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cost of the suit.
2. The suit of the plaintiff is that plaintiff and defendant
entered into the agreement to sell dated 13.04.2009 Ex.P1 or
Ex.PW1/1 in respect to the property in question for total sale
consideration of Rs 39,50,000/ out of total sale consideration,
plaintiff had paid Rs 7,00,000/ in cash to the defendant on 13.04.2009
Ex.P2 or Ex.PW1/2, Rs 2,00,000/ through cheque bearing no. 505566
dated 06.04.2009 drawn on Bank Of India, Rajouri Garden, New
Delhi which was also acknowledged and defendant issued the receipts,
also paid Rs 10,00,000/ on 15.04.2009 Ex.P3 or Ex.PW1/3 which
was paid in cash. Thereafter, a sum of Rs 50,000/ also paid through
cheque bearing no. 505567 dated 18.04.2009 Ex.P4 or Ex.PW1/4
against the receipts as such plaintiff has paid total sum of Rs
19,50,000/ to the defendant. It is further contented that as per
agreement to sell the balance payment of Rs 32,50,000/ was to be
paid upto 31.07.2009. But despite several request and payment
aforesaid, defendant failed to execute the title documents in favour of
plaintiff and even did not provide original titled documents/deed as
well as previous documents/deed of the property in question. It is
contented that at the time of agreement to sell, defendant assured to
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the plaintifff that the suit property/ property in question is free from all
sought of incumberrances registered or unregistered, But it was utter
shock to plaintiff when it came up to the knowledge of the plaintiff,
that the suit property is mortgage with the Gmoney Finance Services
Ltd. When these fact inquired from the defendant, defendant
confirmed the fact therefore, when it was further asked by the plaintiff
to the defendant to execute the titled documents in favour of plaintiff
in respect to the property in question, defendant contented and stated
that he has to clear the dues of the aforesaid Gmoney Finance
Services Ltd., defendant has to release the title documents of the
property in question and thereafter, he (defendant) will execute the
sale deed in favour of plaintiff. It is also contented that defendant had
extended the stipulated time of execution of sale deed in favour of
plaintiff from 31.07.2009 to 31.08.2009 vide addenda which forming
party of the original agreement to sell dated 13.04.2009 and got signed
from the plaintiff wherein he showed that defendant has handed
over the symbolic possession of one room to the plaintiff in the
property in question whereas in fact the defendant never handed
over the possession of the abovesaid room and further on
31.08.2009 possession shall get restored back to the defendant.
It is further contented that despite several request, defendant did
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not take any initiative to execute the title documents of the property in
question in favour of plaintiff. It is contented that no physical
possession of property in question has been handed over or agreed to
be handed over till the execution of sale deed and the interupted
possession was continued with the defendant. It is contented that
defendant has never taken any steps to execute the sale deed in favour
of plaintiff as property in question was in possession of bank G
money, Finance Services Pvt Ltd . Now it come to the knowledge of
the plaintiff on 30.11.2009 from some reliable source that defendant is
trying to sell out the property in question though Bhandari property
dealer, despite the fact that plaintiff is bonafide to purchase the same
and ready to perfom his part of contract and ready to pay balance sale
consideration. In respect to substantiate the capacity to pay the
balance consideration amount, the bank statement w.e.f 13.07.2009 as
well as 13.08.2009 attached / filed with the suit despite that defendant
failed to perform his part of contract resulting into filing the present
suit.
3. On the other hand joint WS to the plaint has been filed on
behalf of defendant no 1 and 2 wherein preliminary objection taken
that the suit of plaintiff is based on false and fabricated documents
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hence liable to be dismissed. Plaintiff has never been ready and
willing to complete the transaction and has been seeking time on
various pretext to complete the transactions. The suit is not
maintainable as the essence of contract as per agreement to sell dated
13.04.2009 and the addenda. The plaintiff failed to perform his part of
contract within stipulated time and filed present suit with malafide
intention without any cause of action and notice upon the defendant. It
has also contended in preliminary objection that plaintiff has only paid
Rs 50,000/ to the defendant through cheque bearing no 505567 dated
18.04.2009 at the time of execution of agreement to sell and got
executed and signed the agreement to sell with sole intention to
securing as past payment, gain more time to search out the good
purchaser to earn more profit as the value of the property in question
as sky rocketing. Plaintiff has not approached to the court with the
clean hand and has suppressed the material fact as such not entitled
the discretionary relief of specific performance. The signature on
addenda dated 30.07.2009 have been got procured and signed by
the plaintiff from the defendant by playing/practicising the fraud.
It is also contented that plaintiff is himself guilty on non performance
of contract and could not take advantage of his own wrong for non
performance of contract.
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4. On merits all the contention of the plaint are denied. It is
contended that para no.2 of the plaint is so far as it relates to the
execution of the agreement to sell dated 13.04.2009 Ex.PW1/1
between the parties for the said amount of consideration in respect of
the suit portion in question is not disputed. However, it may be added
that the contents of the said agreement are not truthful. It may be
stated that the said amount of Rs. 7,00,000/ was not at all paid by the
plaintiff to the defendants on 13.04.2009 at the time of execution of
the said agreement to sell. It may be stated that the plaintiff had 'in
fact' struck the deal for the purchase of the suit portion of the property
with the defendants through Sh Partap Kumar Dua, the husband of
defendant no.1 and as the general attorney of defendant no.2, in the
month of January 2008 by paying a sum of Rs. 50,000/ in cash
against written receipt dated 16.01.2008 on the terms and conditions
mentioned therein. However, the plaintiff despite his assurances could
not pay up the balance amount of consideration and had been seeking
time for payment of the same by making some payments by way of
installments and had paid a total sum of Rs. 19,00,000/ uptil
06.04.2009. The plaintiff in order to secure his payments regretted his
lapses and approached the defendants for execution of a regular
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agreement to sell dated 13.04.2009. The plaintiff out of the sum of Rs.
19,00,000/ earlier paid got mentioned the payment of Rs. 7,00,000/
in cash as an advance and also obtained a separate receipt showing the
payment of Rs. 10,00,000/ as having been paid on 15.04.2009. The
defendants who were mid stream had to oblige the plaintiff and thus
signed the agreement and the addenda under pressure from the
plaintiff. In fact only the payment of Rs. 50,000/ was made to the
defendants through post dated cheque no. 505567 dt 18.04.2009
drawn on Bank of India, Rajouri Garden, New Delhi at the time of
execution of the agreement to sell and no payment whatsoever has
been made thereafter as falsely claimed to have been made on
13.04.2009 at the time of execution of the agreement to sell or on
15.04.2009. The plaintiff has mischievously omitted to mention the
terms and conditions as originally settled forming basis of the
transaction. Even as per the terms of hte agreement to sell the plaintiff
could only claim the refund of the amount paid in cash if the deal was
cancelled for any reason whatsoever and was not even entitled to
claim any penalty or interest on the cancellation of the deal.
Furthermore, the deal was a contingent contract depending upon the
completion of the deal made by the defendants for a smaller house and
was only to be completed after the execution of the title deeds of the
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new house in their favour. It may further be added that since the deal
was struck by Sh Pratap Kumar Dua, the husband of defendant no.1
and as the general attorney of defendant no.2, it is he who is fully
apprised of the factual position and it is he who has been
acknowledging the payments under his own signatures.
It is further contended that the para no.7 and 8 of the plaint as
stated are not disputed excepting that the payments allegedly made in
cash were made during the year 2008 as mentioned in the receipts
acknowledging payments issued by Sh Pratap Kumar Dua under his
signatures and not on the dates as mentioned in the sale agreement. It
may be stated that the said cheque given to the defendants at the time
of execution was a post dated cheque.
It is further contended that para no.11 of the plaint as stated is
wrong and is denied. It may be stated that the plaintiff was fully
apprised of the fact of the property lying mortgaged and it was agreed
that the defendants would get the same released with the money to be
paid by the plaintiff before executing the requisite sale documents.
The defendant no.1 and her husband who had been dealing with the
plaintiff are senior citizens and have no regular source of income and
as such they never thought of cancelling the deal and kept on
accommodating the plaintiff while and the plaintiff taking the
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advantage of the same has been harassing the defendants by avoiding
the payment of the balance consideration and getting time by making
payments in small installments.
5. Replication filed on behalf of plaintiff to the WS of the
defendant in which all the contents of the plaint reiterated and denied
the contents and allegations made in the WS.
6. Upon completion of pleadings vide order dated 05.03.2014,
the following issues are framed :
(1) Whether the plaintiff was ready and willing
to perform his part of the agreement to sell dated
13.04.2009? OPP
(2) Whether the plaintiff is entitled to the decree
for specific performance? OPP
(3) Whether the payment receipts relied upon by the
plaintiff, are fabricated ? OPD
(4) Whether the agreement to sell and the addenda
dated 30.07.2009 was procured from the defendant by
practicising fraud ? OPD
(5) Relief
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7. In support of the case, plaintiff Sh Bhajan Singh examined
himself as PW1 by way of affidavit, Sh Deshbandhu Gosain
examined himself as PW 2 by way of affidavit, PW3 Smt Shashi
Kharbanda, Manager, BOI Rajouri Garden, PW4 Sh Pradeep
Yadav, Customer Assistant, State Bank of India, Rajouri Garden.
evidence has been closed by Ld LC vide order dated 03.10.2015
on the statement of plaintiff and also closed his evidence on
22.12.2015 after allowing his application under Order 18 Rule 17
CPC vide dt 17.12.2015.
8. In support of the case, defendant Sh Pratap Kumar Dua
examined himself as DW1 by way of affidavit and on the request
of defendant, evidence has been closed vide order dated
09.12.2016.
9. I have heard the Ld Counsel for parties and perused the case file.
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10. Prior to proceed further it is important to discuss the law /
precedent set by Hon'ble Apex Court : In case title Piara Singh and
Sons Vs Gurudwara Baba Jorawar Singh wherein it has been held
that " Evidence Act, 1872 Section 91 Secondary evidence- Objection
as to admissibility of certified copy, delay in raising , effect- Failure to
raise a prompt and timely objection amounts to waiver of the necessity
for insisting on formal proof of a document, the document itself which
is sought to be proved being admissible in evidence.
Evidence act, 1872 Sections 59,60 and 61 Oral evidence
vis-a-vis documentary evidence- Preference, scope-- It is rudimentary
principle of jurisprudence that the documentary evidence will always
get preponderance over the oral evidence because it is well known
axion of law than men may tell lies but the documents cannot.
11 Further in S.P. Chengalvaraya Naidu Vs Jagnnath (1994) 1
SCC 1
"Court of law are meant for imparting justice
between parties. One who comes to Court must
come with the clean hands. A person whose case is
based on false suit has no right to approach the
court. He can be summarily thrown out at any
stage of litigation and further held that a fraud is
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an act of deliberate deception with design of
securing something by taking unfair advantage of
another. It is cheating intending to get an
advantage. A litigant who approached the Court is
bound to produce all the documents executed by
him which are relevant to the litigation. However,
he withheld a false documents in order to gain
advantage over the other side then he would be
guilty of playing fraud on the Court as well as on
the opposite party", Meghmala Vs G. Narasimha
Reddy (2010) 8 SCC 383, wherein it has been held
that " Suppression of a material fact/ document
amounts to fraud on Court", Mayar(H.K.) Ltd Vs
Owner & parties, Vessel M.V. Fortune Express
(2006) 3 SCC 100, wherein it has held that "As
held in S.J.S Business Enterprise Ase, (2004) 7
SCC 166, suprression of material fact by a litigant
disqualifies such litigation from obtaining any
relief. This rule has been evolved out of need of the
deter a litigant from abusing the process of Court
by deceiving it."
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12. Now if examine legal preposition on question of limitation in suits
filed for relief of specific performance, as propounded by different
Superior Courts, without referring to many of those judgments, repeatedly,
first of all I would note here that issue of limitation in such cases is to be
ascertained keeping in mind conduct of parties, terms recorded in
agreement to sell, surrounding circumstances etc. There can not be any
straight jacket formula to examine whether any such suit would be covered
with first part or second part of Art. 54 of Limitation Act. Whether any date
is fixed for performance of other formalities before execution of Sale deed
or whether any date as mentioned in agreement is actually fixed for
execution of sale deed, for counting limitation period, must be examined
beside, above stated factors, also taking into consideration basic principles
of Law of Contract. Thus issue of limitation in suits of specific
performance is to be assessed with realistic and pragmatic approach, rather
than technical view point. Supreme Court in Gunwantbhai Mulchand
Shah & Ors. Vs. Anton Elis Farel & Ors., (2006) 3 SCALE 82, has
examined this issue in detail and has held as:-
"We may straightway say that the manner in which the question of
limitation has been dealt with the Courts below is highly unsatisfactory. It
was rightly noticed that the suit was governed by Article 54 of the
Limitation Act, 1963. Then, the inquiry should have been, first, whether
any time was fixed for performance in the agreement for sale, and if it was
so fixed, to hold that a suit filed beyond three years of the date was barred
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by limitation unless any case of extension was pleaded and established. But
in a case where no time for performance was fixed, the Court had to find
the date on which the plaintiff had notice that the performance was refused
and on finding that date, to see whether the suit was filed within three
years thereof. We have explained the position in the recent decision in R.K.
Parvatharaj Gupta Vs. K.C Jayadeva Reddy, 2006 (2) Scale 156. In the
case on hand, there is no dispute that no date for performance is fixed in
the agreement and if so, the suit could be held to be barred by limitation
only on a finding that the plaintiffs had notice that the defendants were
refusing performance of the agreement. In a case of that nature normally,
the question of limitation could be decided only after taking evidence and
recording a finding as to the date on which the plaintiff had such notice.
We are not unmindful of the fact that a statement appears to have been
filed on behalf of plaintiffs that they do not want to lead any evidence. The
defendants, of course, took the stand that they also did not want to lead any
evidence. As we see it, the Trial Court shold have insisted on the parties
leading evidence, on this question or the Court ought to have postponed the
consideration of the issue of limitation along with the other issues arising
in the suit, after a trial."
13. In Pancharan Dhara and Ors. Vs Monmatha Nath Maity (D)
by L.Rs. And anr AIR 2006 SC 2281, has observed as
" A bare perusal of Article 54 of the Limitation Act
would show that the period of limitation begins to
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run from the date on which the contract was to be
specifically performed. In terms of Article 54 of
the Limitation Act, the period prescribed therein
shall begin from the date fixed for the performance
of the contract. The contract is to be performed by
both the parties to the agreement......................We
have noticed herein before that the Courts below
arrived at a finding of fact that the period of
performance of the agreement has been extended.
Extension of contract is not necessarily to be
inferred from written document. It could be
implied also. The conduct of the parties in this
behalf is relevant. Once a finding of fact has been
arrived at, that the time for performance of the said
contract had been extended by the parties, the time
to file a suit shall be deemed to start running only
when the plaintiff had notice that performance had
been refused.....Performance of a contract may be
dependent upon several factors including grant of
permission by the statutory authority in appropriate
cases. If a certain statutory formality is required to
be complied with or permission is required to be
obtained, a deed of sale cannot be registered till
the said requirements are complied with. In a given
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situation, the vendor may not be permitted to take
advantage of his own wrong in not taking steps for
complying the statutory provisions and then to
raise a plea of limiation"
14. Similarly Apex Court in S. Brahmanand and Others Vs. K.R
Muthugopal (Dead) and others, (2005) 12 SCC 764, wherein this Court
laid down the law:
Thus, this was a situation where the original
agreement of 10.03.1989 had a "fixed date" for
performance, but by the subsequent letter of
18.06.1992 the defendants made a request for
postponing the performance to a future date
without fixing any further date for performance.
This was accepted by the plaintiffs by their act of
forbearance and not insisting on performance
forthwith. There is nothing strange in time for
performance being extended, even though
originally the agreement had a fixed date.
Section 63 of the Contract Act, 1872, provides that every promise may
extend time for the performance of the contract. Such an agreement to
extend time need not necessarily be reduced to writing, but may be proved
by oral evidence or, in some cases, even by evidence of conduct including
forbearance on the part of the other party. Thus, in this case there was a
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variation in the date of performance by express representation by the
defendants, agreed to by the act of forbearance on the part of plaintiffs.
What was originally covered by the first part of Article 54 now fell within
the purview of the second part of the article......"
15. In this regard reference can also be given observations of Supreme
Court in Keshavlal Lallubhai Patel and Ors. Vs Lalbhai Trikumlal
Mills Ltd, AIR (45) 1958 SC 512. Moreover in Smt Saraswathamma Vs.
H. Sharad Shrikhande and Ors AIR 2005 Karnataka 292,
it was observed that the meaning of the expression
'date fixed for the performance' has to be
understood in the context of the agreement, the
obligations undertaken by the respective parties in
the agreement. Even if a date is fixed initially for
the performance of the contract and if the
performance itself is dependent on the discharge of
several other obligations undertaken by the
promisor himself what should happen is a question
to be considered. Again in K. Venkoji Rao Vs. M
Abdul Khuddur Kureshi AIR 1991 Karnataka
119 following the judgment in Keshavlal Lallubhai
Patel (supra), it was held that the meaning of
expression 'date fixed for the performance' will
have to be understood in a correct perspective.
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Though the word 'date' is used in Art. 54 of
Limitation Act it should not be taken that a
particular date should be specifically stated in the
agreement. In fact, even if the time of performance
cannot be ascertained at the time of agreement
itself, if it could be ascertained at the time of
performance, it may be said to be a case where the
date is fixed for the performance of the contract.
For example, an agreement to execute a sale deed
after 'saguvali chit' is given can be construed as an
agreement where date is fixed. Further, the date
that can be fixed with reference to a future event
which is certain to happen is the date on which
such event takes place.
16. Further , in the case title : 2012 (127) DRJ 16 Anand Singh Vs
Anuraj Bareja & Ors., Contract Act 1872, it has been held that:
Section 74- Forfeiture of earnest money-scope of-Even if the
buyer is guilty of breach of performance of an agreement to sell-- Seller
can not forfeit the earnest money received under the agreement to sell--
Unless loss is pleaded and proved by him--As the forfeiture is hit by
section 74 of the Indian Contract Act--No pleading of any loss having
been caused to the appellant-- No issue framed in this respect--No
evidence led on how the breach of contract caused loss to the appellant--
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Held-- Appeal is allowed--Impugned decree is set aside--Suit decreed
against the respondent for a sum of Rs. 9,50,000/- alongwith interest at 12
% per annum.
Further, the section 74 is clearly an attempt to eliminate the sometime elaborate refinements made under the English common law in distinguishing between stipulations provinding for payment of liquidated damages and stipulations in the nature of penalty. Under the common law a genuine pre-estimate of damages by mutual agreement is regarded as a stipulation naming liquidated damages and binding between the parties: a stipulation in a contract in terrorem is a penalty and the Court refuses to enforce it, awarding to the aggrieve party only reasonable compensation. The Indian Legislature has sought to cut across the web of rules and presumption under the English common law, by enacting a uniform principle applicable to all stipulations naming amounts to be paid in case of breach, and stipulations by way of penalty.
10. Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to tbe paid in case of breach and (ii) where the contract contains any other stipulation by way of penalty. We are in the present case not concerned to decide whether a contract containing a convenant of forfeiture of deposit for due performance of a contract falls within the first class. The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for.
CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page20/42 21In assessing damages the Court has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case. Jurisdiction of the court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duly to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damges"; it does not justify the award of compensation when in consequence of breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things, or which the parties knew when they made the contract, to be likely to result from the breach.
17. Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties pre- determined, or where there is a stipulation by way of penalty. But the application of the enactment is not restricted to cases where the aggrieved party claims relief as a plaintiff. The section does not confer a special benefit upon any part; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for forfeiture of CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page21/42 22 any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated. The jurisdiction of the court is not determined by the accidental circumstance of the party in default being a plaintiff or a defendant in the suit. Use of the expression "to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract. The court has to adjudge in every case reasonable compensation to which the plaintiff is entitled from the defendant on breach of contract. Such compensation has to be ascertained having regard to the conditions existing on the date of the breach.
18. Further it would be appropriate to discuss the important essentials element of contract which is as under:
Free Consent It is essential to the creation of a contract that the parties are ad idem, i.e, they agree upon the same thing in the same sense at the same and that their consent is free and real. Section 10 also says that "all agreements are contracts if they are made by the free consent of parties........". Section 13 defines "consent" as follows:
"Two or more persons are said to consent when they agree upon the same thing in the same sense."CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page22/42 23
According to Sec. 14, consent is said to be free when it is not caused by:
(1) Coercion, or (2) Undue influence, or (3) Fraud, or (4) Misrepresentation, or (5) Mistake.
Legality of Object A contract must not only be based upon mutual assent of competent parties but must also have a lawful object. If the object of an agreement is the performance of an unlawful act, the agreement is un- enforceable. Section 23 declares that the 'object' or the 'consideration' of an agreement is not lawful in certain cases. The words 'object' and 'consideration' in Sec. 23 are not used synonymously. They are distinct in meaning. The word 'object' means purpose or design. In some cases, consideration for an agreement may be lawful but the purpose for which the agreement was entered into may be unlawful. In such cases the agreement would be void. As such both the object and the consideration of an agreement muts be lawful; otherwise the agreement is void.
When consideration or object is unlawful (Sec.23) CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page23/42 24 The consideration or object of an agreement is unlawful-
(1) If it is forbidden by law. If the object or the consideration of an agreement is the doing of an act forbidden by law, the agreement is void. An act is forbidden by law when it is punishable by the criminal law of the country or when it is prohibited by special legislation or regulations made by a competent authority under powers derived from the Legislature.
(2) If it is of such a nature that, if permitted, it would defeat the provisions of any law. If the object or the consideration of an agreement is such that, though not directly forbidden by law, it would defeat the provisions of any statutory law, the agreement is void. (3) If it is fraudulent. An agreement which is made for a fraudulent purpose is void. Thus an agreement in fraud of creditors with a view to defeating their rights is void.
(4) It is involves or implies injury to the person or property of another. If the object of an agreement is to cause injury to the person or property of another, it is unlawful.
(5) If the Court regards it as immoral, or opposed to public policy.
An agreement, the consideration or object of which is immoral or opposed to public policy, is unlawful [Sumitra Devi Vs. Sulekha Kundu, AIR (1976) Cal 197, 205].
CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page24/42 25Distinction between fraud and misrepresentation
1. Intention. In misrepresentation, there is a mis-statement or concealment of a material fact or facts essential to the contract, without any intention to deceive the other party. In fraud, the intention is clearly to deceive the other party. Misrepresentation is innocent, fraud is deliberate or wilful.
2. Belief. In the case of fraud, the person making the suggestion does not believe it to be true, while in the case of misrepresentation he believes it to be true [Ratan La Vs. Jai Janinder Parshad, AIR (1976) P & H 200]
3. Rescission and damages. In misrepresentation, the aggrieved party can rescind the contract or sue for restitution. There can be no suit for damages. In fraud, the remedy available to the aggrieved party is not limited to rescission alone. He can also claim damages.
4. Where truth can be discovered with ordinary diligence. In case of misrepresentation, the aggrieved party cannot avoid the contract, if it had the means to discover the truth with ordinary diligence. But in case of active fraud, the contract is voidable even though the aggrieved party had the means of discovering the truth with ordinary diligence.
UNLAWFUL AND ILLEGAL AGREEMENTS CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page25/42 26 An unlawful agreement is one which, like a void agreement, is not enforceable by law. It is void ab initio and is destitute of legal effects altogether. It affects only the immediate parties and has no further consequences. An illegal agreement, on the other hand, is not only void as between the immediate parties but has this further effect that the collateral transactions to it also become tainted with illegality. Every illegal agreement is unlawful, but every unlawful agreement is not necessarily illegal. It is sometimes difficult to decide as to whether an act is illegal or unlawful as many of the illegal and the unlawful acts lie on the borderline. It may,however, be observed that illegal acts are those which involve the commission of a crime or contain an element of obvious moral turpitude and "where the wicked attribute is reasonably obvious", or are, in some other way, contrary to public policy. A criminal act is one which is both forbidden by law and which is revolting to the moral sentiments of the society. A crime is something more than a disobedience to a law. As such illegal agreements include acts opposed to public morals, e.g, an agreement for illicit cohabitation, or an agreement to defraud the revenue or commit a crime, or an agreement which tends to endanger the public safety. On the other hand, unlawful acts are those which are less rigorous in effect and involve a "non-criminal breach of law". These acts do not affect public morals, nor do they result in the commission CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page26/42 27 of a crime. These are simply disapproved by law on some ground of public policy. These include agreement in restraint of trade, marriage or legal proceedings, etc. If an agreement is illegal, the law will help neither party to the agreement. This means that as a result of the refusal of the Court to help the plaintiff in recovering the amount, the defendant who is equally guilty stands to gain. But in such cases, the Court allows the defendant to have that advantage, not because it approves of his conduct, but because it is not prepared to grant any relief on the basis of the illegal agreement. The Court is, in fact, neutral in such cases and as a result of that neutrality, the defendant stands to gain.
Discharge by Agreement or Consent As it is the agreement of the parties which binds them, so by their further agreement or consent the contract may be terminated. The rule of law in this regard is as follows: Eodem modo quo quid constituitur, eodem modo destruitur, i.e a thing may be destroyed in the same manner in which it is constituted. This means a contractual obligation may be discharged by agreement which may be express or implied. Section 62 provides in this regards as follows:
"If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed."CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page27/42 28
The various cases of discharge of a contract by mutual agreement are as follows:
(a) Novation. Novation takes place when (i) a new contract is substituted for an existing one between the same parties, or (ii) there is a change of parties, the contrat remaining the same. The consideration for the new contract is the discharge of the old contract. It is essential for the principle of novation to apply that there must be the mutual or tripartite consent of all the parties concerned.
(b) Rescission. Recission of a contract takes place when all or some of the terms of the contract are cancelled. It may occur-
(i) by mutual consent of the parties, or
(ii) where one party fails in the performance of his obligation, the other party may rescind the contract without prejudice to his right to claim compensation for the breach of contract.
(c) Alteration. Alteration of a contract may take place when one or more of the terms of the contract is/are altered by the mutual consent of the parties to the contract. In such a case, the old contract is discharged.
SPECIFIC PERFORMANCE In certain cases of breach of contract, damages are not an adequate remedy. The Court may, in such cases, direct the party in breach to CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page28/42 29 carry out his promise according to the terms of the contract. This is a direction by the Court for specific performance of the contract. Some of the cases in which specific performance of a contract may, in the discretion of the Court, be enforced are as follows:
(a) When the act ageed to be done is such that compensation in money for its non-performance is not an adequate relief.
(b) When there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done.
(c) When it is probable the compensation in money cannot be got for the non-performance of the act agreed to be done. Specific Performance will not be granted where__
(a) Damages are an adequate remedy.
(b) The contract is not certain, or is inequitable to either party.
(c) The contract is in its nature revocable.
(d) The contract is made by trustees in breach of their trust.
(e) The contract is of a personal nature
(f) The contract is made by a company in excess of its powers as laid down in its Memorandum of Association.
(g) The Court cannot supervise its carrying out, e.g a building contract.CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page29/42 30
INJUNCTION Where a party is in breach of a negative term of a contract (i.e, where he is doing something which he performed not to do), the Court may, by issuing an order, restrain him from doing what he promised not to do. Such an order of the Court is known as an 'injunction'. The grant of an injunction by the Court is normally discretionary, but there seems no reason why the Court should refuse the grant of an injunction to restrain the breach of a contract__
(a) whereby a promisor undertakes not to do something, e.g, not to carry on a certain trader, or
(b) which is negative in substance although not in form.
19. Hence, it would become relevant to discuss that the terms and conditions of each contract/ agreement to sell. Since the filing of execution of documents I.e the sale deed or transfer deed in favour of the buyer, the relevant things which are taken into consideration is the period / time as it is well settled law that where there is any particular date of execution of documents ( sale deed etc) or not or whether there is any extension of time, return or impliedly or not. The extension of contract is not necessarily be inferred from the documents it can be implied also . The contact of the parties in this behalf is relevant.
CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page30/42 3120. In the case Prakash Rattan lal Vs Mankey Ram, 166 (2010) DLT 629, the Hon'ble Delhi High Court held that, "Evidence cannot travel beyond pleadings. The law provides a procedure for amending the pleadings and if there are new facts which the party wanted to bring on record, the party can amend pleadings, but without amendment of pleadings, a party cannot be allowed to lead evidence beyond pleadings. " Also in Abubakar Abdul Inamdar Vs. Harun Abdul Inamdar and ors, AIR 1996 SC 112, the Hon'ble Apex Court held that, "where plea is not raised in pleadings, no amount of proof can substitue pleadings which are the foundation of a litigation party. " In Siddik Mahomed Shah Vs Mt. Saran and Ors, AIR 1930 Privy Council 57 (1), it has been held that, "No amount of evidence can be looked into upon a plea which was never put forward."
21. In the present case, following facts have been admitted either in the pleading, at the stage of admission and denial and during cross examination of PW/DW. The admitted facts are as under:
(i) The fact of execution of agreement to sell dated 13.04.2009 EX.PW1/1 (Ex.P1) is admitted in pleading (in para no.2 of reply on merit of WS as well as during crossexamination of DW1).
CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page31/42 32(ii) The fact of execution of document Ex.PW1/DB (but disputed date and signature of DW1, and also admitted and identify the signature of Sh Suchi Bhandari on the document Ex.PW1/DB as well as Ex.PW1/DA).
(iii) The fact that deal/agreement to sell dt 13.04.2009 Ex.PW1/1 or Ex.P1 has been executed/done through Sh Suchi Bhandari has been admitted by PW1 during his cross examination and by the defendant in their WS but surprisingly none of parties examined him, moreover, this fact of Sh Suchi Bhandari has not been pleaded in the plaint . This fact/defence has been raised by the defendant during cross examination of PW.
(iv) Total payment of Rs. 19,50,000/ out of total consideratin of Rs. 39,50,000/ has been admitted by the defendant but not as per schedule/claimed by the plaintiff.
(v) The fact of execution of Ex.PW1/2 to Ex.PW1/4 (P2 to P4) but defence has been taken that same have been executed under compelling circumstances or under pressure from the plaintiff.
(vi) It is admitted by the defendant that since 16.01.2008 or 13.04.2009 and till date of filing of the suit, the property in question has been mortgaged but defendant's defence is that this fact has been apprised to the plaintiff and contented that it was agreed between the CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page32/42 33 parties that the defendants would get release the property in question with the money to be paid by the plaintiff before executing sale document but this fact has not been written in either of the documents ie Ex.PW1/1 to Ex.PW1/4 (P1 to P4) and Ex.PW1/DA and Ex.PW1/DB.
(vii) It is admitted that physical possession of the property in question have never given/handed over to the plaintiff (refer para no. 15 of reply of WS thereto)
(viii) It is also admitted that a money decree can be passed in favour of plaintiff in case, it is established that deal was cancelled for any reason whatsoever. Further pleaded by the defendant that deal was a contigent contract, but without any clause of interest or damages.
22. On the other hand, the disputed fact are as under:
(i) In respect to sale of the property in question, the transaction has been struck off since the date of first payment of Rs. 50,000/ ie 16.01.2008 for which receipt has been executed which is Ex.PW1/DB.
(ii) the agreement to sell dated 13.04.2009 Ex.PW1/1 and receipt of Rs. 10 Lacs dated 15.04.2009 Ex.PW1/2 are forged and fabricated documents (however execution of the documents has not been denied CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page33/42 34 but disputed that the signatures of defendant were obtained under compelling circumstances and which is not specifically pleaded in the WS).
(iii) the fact of mortgage of the property in question has been apprised to the plaintiff since 16.01.2008, 03.06.2008, 13.04.2009, 15.04.2009 and also on the documents ie Addenda but suprisingly the fact qua mortgage of the property has not been mentioned in either of the documents even in the WS itself.
23. My issuewise finding is as hereunder :
ISSUE NO 3 & 4 (3) Whether the payment receipts relied upon by the plaintiff, are fabricated ? OPD (4) Whether the agreement to sell and the addenda dated 30.07.2009 was procured from the defendant by practicising fraud ? OPD Since both the issues are interconnected as the same are related in respect to the documents ie receipt Ex.PW1/2 and Ex.PW1/3 and adanda dated 30.07.2009 Ex.PW1/4 and the onus to discharge these issues have been casted upon the defendant. Though the defendant at the stage of admission and denial, execution of documents Ex.PW1/2 and Ex.PW1/4 CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page34/42 35 has been admitted but only defence have been taken in WS by the defendant that the same have been executed under compelling circumstances or under pressure from the plaintiff as clear from the pleadings whereas it is contended that these documents are forged and fabricated. The grounds taken in respect to the forge and fabricated are basis of execution of two earlier receipts Ex.PW1/DA and Ex.PW1/DB but no cogent evidence qua the fact that what was the compelling circumstances under which defendant had executed the documents Ex.PW1/1 to Ex.PW1/4 (P1 to P4), moreover no cogent evidence has been led to discharge the onus qua the fact that documents Ex.PW1/2 to Ex.PW1/4 are forged and fabricated and it is also come up on record that no complaint to the police has been made in this regard.
Since the defendant himself admitted the execution of all the documents Ex.PW1/1 to Ex.PW1/4 either in the pleadings as well as during his cross examination, hence I am of the considered view that untill or unless any cogent evidence led or placed on record it can not be presumed on the basis of bald statement/deposition that signatures were obtained by the defendant on the documents Ex.PW1/2 to Ex.PW1/4 as well as PW1/5 under dueress/compelling circumstances and if it is so then contention itself is contradictory because if defendant admitted that he has executed the documents Ex.PW1/2 to Ex.PW1/4 then how the documents can be said to be forged and fabricated by the plaintiff. It is CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page35/42 36 also not the case of the defendant that these documents do not have his signatures/sign of defendant no.1 & 2, Hence I am of the considered ivew that defendant has completely failed to discharge the onus, accordingly these issues are decided in favour of the plaintiff and against the defendants.
24. Issue no.1 & 2 (1) Whether the plaintiff was ready and willing to perform his part of the agreement to sell dated 13.04.2009? OPP (2) Whether the plaintiff is entitled to the decree for specific performance? OPP Since both these issues are inter connected, hence, are taken together. The onus to discharge this issue has been casted upon the plaintiff that the plaintiff in support of discharge, plaintiff have examined himself by way of affidavit Ex.PW1/A in which he reproduce all the contents of plaint. On the other hand, defendant contended that since the agreement to sell dated 13.04.2009 Ex.PW1/1 as well as earlier receipts/agreement Ex.PW1/DA and Ex.PW1/DB are contigent contract in as much as the fact that the property in question has already been mortgaged with the Gmoney Finance Services Ltd. therefore plaintiff CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page36/42 37 had to make entire payment first which he failed by 31.08.2009.
So far as the execution of Ex.PW1/DB is concerned, contention of the plaintiff is that at the time of execution on 16.01.2008, though deal has been taken place through property dealer Mr Suchi Bhandari but at that time the document has not been signed by the defendant/DW1 however identified the signature of Mr Suchi Bhandari at point X. So far as the document Ex.PW1/DA is concerned, execution has been completely denied by the plaintiff.
The defendant in support of his contention qua the fact that (1) agreement to sell of the property in question has been taken place on 16.01.2008 but since the payment has not been regularly made hence the contract has been struck off and cancelled due to non performance of the plaintiff and in support of this contention defendant relied upon the document Ex.PW1/DA and Ex.PW1/DB which are receipt but admittedly these two receipts have not been signed by the plaintiff anywhere which is admitted by the defendant during his cross examination.
So far as the other contention of the defendant is concerned ie fact of mortgage has been apprised to the plaintiff since the date of first contract ie 16.01.2008 are also not trustworthy because none of the documents Ex.PW1/1 to Ex.PW1/4 as well as Ex.PW1/DA and CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page37/42 38 Ex.PW1/DB have any whisper in respect to this fact as such it is established by the conduct of the parties that this was not the term of the contract as alleged by the defendant moreover during cross examination of DW1, it is admitted that the total sale consideration of the property in question was Rs. 39,50,000/, out of which payment of Rs. 19,50,000/ made by the plaintiff to the defendant not as per schedule mentioned in the documents itself ie Ex.PW1/2 and Ex.PW1/3. In this regard it is settled law that the oral testimony can be considered against the documentary evidence and documentary evidence always preponde against oral testimony, h ence pleadings and evidence in this regard are appears to be concocted and not trustworthy.
Execution of the documents Ex.PW1/2 to Ex.PW1/4 and Ex.PW1/5 itself established that there was no date fixed for the final execution of the sale documents in favour of the plaintiff as clear from the conduct of the parties in as much as execution of the documents ex.PW1/1 to Ex.PW1/4 has been admitted by the defendant as well as it is also admitted no complaint has been made in respect to the forged and fabrication of documents ie Ex.PW1/2 to Ex.PW1/4.
On the other hand, plaintiff/PW1 remained affirmed on the point that he was not aware in respect to the fact that the property in CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page38/42 39 question was mortgaged with Gmoney Finance Services Ltd. In this regard, in his cross examination, PW1 deposed that "It is correct to suggest that as and when I used to request the power of attorney to execute the sale deed during this period, he used to demand more money in order to pay off his home loans raised from GE. I have no knowledge that defendant no.1 as well as her attorney are senior citizens and are leading retired life and are dependent on his son ie defendant no.2 to support them. It is incorrect to suggest that the power of attorney had always been insisting upon me that he should be paid the entire balance amount of the sale consideration to enable him to clear the home loans raised from GE to facilitate him to execute the sale deed of the suit property after clearing the loan. It is incorrect to suggest that I am not producing Mr. Suchi Bhandari as a witness in support of my case since he had refused to support my version. "
In view of the above testimony it became relevant that first time objection qua the fact that agreement to sell of the property in question or transaction of the agreement to sell has been done through Mr Suchi Bhandari, raised by the defendant, during crossexamination of PW1 as well as averment made in WS despite that defendant failed to examine him. The averment and testimony contrary to the documents CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page39/42 40 Ex.PW1/1 is not trustworthy keeping in view the Sec 59,60 and 61 of Evidence Act as in this regard reliance can be placed on Piara Singh and Sons Vs Gurudwara Baba Jorawar Singh (supra) . So far as issue no.1 is concerned, in support of the averment/testimony qua the fact that he was ready and willing to perform his part of agreement to sell dated 13.04.2009, PW 3 Smt Shashi Kharbanda, Manager, BOI was examined in respect to the fact that at the relevant time plaintiff has sufficient fund to make payment of sale consideration to the defendant and also it is come on record/ during crossexamination of PW1 that at the relevant time as well as during operation of the agreement to sell dated 13.04.2009 Ex.PW1/1 he used to keep money in cash for the purpose of payment of sale consideration. On the other hand, no as such contrary evidence produced by the defendant.
25. After taking into facts and circumstance, evidence led by the parties and the law discussed above, I am of the considered view that plaintiff has successfully discharged both issues and proved the documents i.e execution of agreement to sell dated 13.04.2009 Ex.PW1/1 and execution of Addenda Ex.PW1/5 through which extension has been given. Plaintiff has also proved the documents at at the relevant time or during operation of agreement to sell Ex PW1/1 and Ex PW1/5, he had sufficient fund for the balance payment qua sale CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page40/42 41 consideration, hence both these issues are decided in favour of the plaintiff and against the defendant
26. Relief.
In view of the facts and circumstances and discussion above, the suit of the plaintiff is decreed. Plaintiff is entitled for a decree of specific performance, thus defendant is directed to perform his part of obligation as per agreement to sell dated 13.04.2009 Ex.PW1/1 or Ex.P1 (21.03.2011) interalia by executing and getting registered Sale deed in favour of plaintiff coupled with the delivery of possession and original title deed of the property bearing in respect to the entire Second Floor (back side) without roof and terrace right, built on land area measuring 100 sq yard part of the property bearing no. V299, Rajouri Garden, New Delhi27 subject to payment of balance consideration amount, plaintiff is also entitled for a money decree to the tune of Rs. 41,00,000/ alongwith interest @ 6 % per annum w.e.f 13.04.2009 to 05.11.2009 and thereafter, damages equivalent to differentiate value with pendentelite and future interest @ 6 % p.a and the plaintiff also entitled for a decree of perpetual injunction in his favour against the defendant thus restraining the defendant, legal CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page41/42 42 heirs, successors, assignes and other persons working under her or on her behalf for selling, ailenating / transferred the property in question except to execute sale deed in favour of plaintiff and decree of mandatory injunction in favour of plaintiff and against the defendant thus directing the defendant to accept the sum of Rs 20,00,000/ which balance consideration for execution of sale deed in favour of plaintiff in respect to the property in question. Accordingly suit of the plaintiff is decreed. No order as to cost. Decree sheet be prepared. Original documents, if any, be returned to the parties on filing certified copies thereof. File be consigned to record room as per rules.
Announced in the Open Court on 09.06.2017.
(Rakesh KumarIV) Additional District Judge06 West District, THC CS No. 11611/16 Bhajan Singh Vs. Sushma Dua and ors Page42/42