Delhi High Court
Shri Ravinder Singh vs Shri Chuckles Kohli & Ors on 3 December, 2010
Author: V.K. Jain
Bench: V.K. Jain
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 30.11.2010
Judgment Pronounced on: 03.12.2010
+ CS(OS) No. 1440/2008
SHRI RAVINDER SINGH .....Plaintiff
- versus -
SHRI CHUCKLES KOHLI & ORS .....Defendant
Advocates who appeared in this case:
For the Plaintiff: Mr. Jasmeet Singh with
Mr. K.D. Sengupta, Mr. Saurabh Tiwari
and Ms. Aahuti Sharma, Advocates.
For the Defendant: Mr. S.K. Mehra with Ms. Mamta Mehra,
Ms. Mukta Kapur and Mr. Yasir Rauf
Ansari, Advocates.
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1.Whether Reporters of local papers may be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported Yes in Digest?
V.K. JAIN, J IA No. 9657/2008 (under Order 7 Rule 11 of CPC)
1. This is an application for rejection of plaint on the ground that it does not disclose any cause of action.
2. This is a suit for specific performance of an CS(OS)No. 1440.08 Page 1 of 29 agreement dated 23rd December, 2005, executed by the defendants, in favour of the plaintiffs, for sale of their undivided share in plot No.15, Block No.172, Jor Bagh, New Delhi. It is alleged in the plaint that vide agreement dated 23rd December, 2005, the defendants agreed to sell their undivided one-third share in the aforesaid property to the plaintiff for a total sale consideration of Rs 3,87,50,000/-. It is alleged that the plaintiff issued a cheque of Rs 21 lacs to the defendants, which was later replaced by a cheque of Rs 25 lacs. Initially, the date for making final payment was fixed as 09th January, 2006, but later defendant No.1, acting for himself as well as on behalf of defendant Nos. 2 to 4, agreed to extend the date and also received a sum of Rs 25 lacs from the plaintiff. It is also alleged that despite receiving Rs 25 lacs from the plaintiff, the defendants have been delaying fulfillment of their contractual obligations and have not come forward to complete the transactions. The plaintiff also claims to have sent one letter dated 02 nd August, 2006 and another letter dated 07th May, 2007 to the defendants, asking them to do the needful in this regard. This was followed by yet another letter dated 04th April, 2008.
CS(OS)No. 1440.08 Page 2 of 29
3. In the application under consideration, the defendants have alleged that since the Memorandum of Understanding (MoU) dated 23rd December, 2005, contemplated execution of a proper agreement by 10th January, 2006 and no such proper agreement was executed between the parties, the suit is liable to be dismissed. It is further alleged that the plaintiff himself committed breach of the MoU dated 23rd December, 2005 and abandoned the same. It is also alleged that the receipt dated 23 rd February, 2006 and the letter dated 09th January, 2006, extending the MoU are forged and fabricated documents. It is also stated in the reply that the cheque dated 23rd December, 2005, issued by the plaintiff for Rs 11 lacs, was dishonoured when presented to the bank and the schedule of payment stipulated in the MoU dated 23rd December, 2005, was never adhered to by the plaintiff. It has, however, been admitted that the plaintiff made two payments to the defendants; one for Rs 21 lacs by demand draft and other of Rs 14 lacs vide cheque dated 23rd February, 2006. It is also claimed that the sale consideration was agreed at Rs 3,87,50,000/- and the earnest money on the aforesaid amount came to Rs 38,70,000/-, which was never paid by CS(OS)No. 1440.08 Page 3 of 29 the plaintiff.
4. The legal proposition in the matter is well- settled. The Court while considering an application for rejection of the plaint can look into only the averments made in the plaint and the documents filed by the plaintiff. The defence taken by the defendant is not to be considered while examining such an application and validity of the documents filed by the plaintiff also cannot be examined at this stage.
5. A Division Bench of this Court in Inspiration Clothes & U Vs. Colby International Ltd., 88 (2000) DLT 769, held that the power to reject the plaint can be exercised only if the Court comes to the conclusion that even if all the allegations are taken to be proved, the plaintiff would not be entitled to any relief whatsoever. It was also observed that where the plaint is based on a document, the Court will be entitled to consider the said document also to ascertain if a cause of action is disclosed in the plaint or not though the validity of the document cannot be considered at this stage. In Avtar Singh Narula & Anr. Vs. Dharambir Sahni & Anr. 150 (2008) DLT 760 (DB), this Court reiterated that the power to reject the plaint has to be exercised CS(OS)No. 1440.08 Page 4 of 29 sparingly and cautiously though it does have the power to reject the plaint in a proper case.
In Popat and Kotecha Property v. State Bank of India Staff Assn. 2005 7 SCC 510, Supreme Court noted that the real object of Order 7 Rule 11 of the Code of Civil Procedure is to keep irresponsible law suits out of the Courts and discard bogus and irresponsible litigation. It was further held that dispute questions cannot be decided at the time of considering an application filed under Order 7 Rule 11 of CPC.
6. The first question, which comes up for consideration in this case, is as to whether the MoU dated 23rd December, 2005 amounts to an agreement to sell one- third share of the defendants in Property No. 15, Jor Bagh, New Delhi or not. The contention of the defendants is that since this document envisaged execution of a proper agreement by 10th January, 2006, this, by itself, does not constitute an agreement.
7. A perusal of the MoU dated 23rd December, 2005 which is an admitted document discloses the following:- (i) it is between the defendants and the plaintiff (ii) the document pertains to sale of one-third share of the defendants in CS(OS)No. 1440.08 Page 5 of 29 property No. 15, Jor Bagh, New Delhi; (iii) the total sale consideration was fixed at Rs 3,87,50,000/-; (iv) a cheque of Rs 21 lac was received by the defendant No.1 Chuckles Kohli, from the plaintiff, towards the sale of defendant's one- third share in property No. 15, Jor Bagh, New Delhi; (v) a further payment of Rs 79 lacs was to be made to the defendants at the time of execution of a formal agreement to sell and; (vi) the balance amount of Rs 2,87,5000/- was to be paid on or before 10th February, 2006.
8. Thus, the aforesaid MoU contains all the essential ingredients of an agreement to sell an immovable property. It contains the names of the seller and purchaser, it contains complete description of the property subject matter of the agreement, it contains the amount of sale consideration, it contains the amount of initial payment and it also contains the last date for payment of the balance consideration. It would be useful to take note of the provisions of Section 92 of Evidence Act at this stage. Section 92 of Evidence Act, to the extent it is relevant, provides that when the terms of any such contract, grant or other disposition of property have been proved according to Section 91, no evidence of any oral agreement shall be CS(OS)No. 1440.08 Page 6 of 29 admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying adding to, or subtracting from, its term. The second proviso to aforesaid Section, however, provides that the existence of any separate oral agreement as to any matter on which a document is silent and which is not inconsistent with its term may be proved. Illustration (f) and (g) read as under:
(f) A orders, goods of B by a letter in which nothing is said as to the time of payment and accepts the goods on delivery. B sues A for the price. A may show that the goods were supplied on credit for a term still unexplored.
(g) A sells B a horse and verbally
warrants him sound. A gives B a paper in
these words "Bought of A horse for
Rs.500". B may prove the verbal
warranty.
Therefore, if the MoU dated 23rd December, 2005 is silent with respect to some matter relating to the transaction between the parties, it is permissible in view of the proviso (2) of Section 92 of Evidence Act, for him to lead oral evidence with respect to the agreement between the parties in relation that matter. Therefore, it is difficult to dispute that this document by itself constitutes a valid CS(OS)No. 1440.08 Page 7 of 29 agreement to sell one-third share of the defendants in property No. 15, Jor Bagh, New Delhi, to the plaintiff for a total consideration of Rs 3,87,50,000/-. It does lose its character of an agreement to sell merely because it envisaged execution of a formal agreement to sell between the parties. Though it is not signed by the plaintiff, this is not the requirement of law that a document in order to constitute a valid agreement to sell, must necessarily be signed by the purchaser. This is more so when the party which has not signed the document, is not disputing it and is rather relying upon it. In fact, an agreement to sell a property need not necessarily be in writing and even an oral agreement, if valid in law and duly proved, can be enforced by the Court.
It is an admitted case of the parties that the defendants have received a sum of Rs 25 lacs from the plaintiff in respect of the aforesaid transaction. Receipt of Rs 25 lacs, Rs 11 lacs by way of demand draft and Rs. 14 lacs by way of cheque dated 23rd February, 2006 ha been expressly admitted in para 7 of the application.
9. In J.K. Rajgarhia Vs. Ravi Singh and Ors. 59 (1995) DLT 231, the defendant Dr. Ravi Singh for himself CS(OS)No. 1440.08 Page 8 of 29 and on behalf other co-owner of property No. A-63, Maharani Bagh, New Delhi, executed an MoU agreeing to sell that building for a consideration of Rs 2,35,00,000/- and received a payment of Rs 5 lacs. Since the defendants refused to go and with the execution of the sale deed and were alleged to have entered into another agreement of sale with respect to that very property, with another person, the purchaser filed a suit seeking specific performance of the Memorandum of Understanding. It was contended on behalf of the defendants that the Memorandum of Understanding needed to be ignored since it was merely a contract to enter into and, therefore, unenforceable. The MoU executed in that case specifically provided that the purchaser would finalize the "agreement to sell" within a period of 21 days which would subject to mutual agreement of both the parties, then be signed by both vendors and purchasers. In that case, it was contended by the defendants that Dr. Ravi Singh has no authority to enter into an agreement on behalf of other co-owners. It was also pointed out that the cheque of Rs 5 lacs which he had received from the purchaser was bogus and no agreement to sell in terms of Section 269 UC of Income-Tax Act had been entered into between the CS(OS)No. 1440.08 Page 9 of 29 parties. Rejecting the contention and granting interim order, directing the defendants to maintain status-quo, this Court referred to the following proposition of law enunciated in Von Hutzfeldt - Wildenburg v. Alexander (1912) I Ch. 284:
"It appears to be well settled by the authorities that if the documents or letters related on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is a binding contract....."
The following observations made by Lord Dunedin in May and Butcher v. The King ( 1934) 2 Kb 7 were also quoted by this Court during the course of the judgment:
"To be a good contract there must be a concluded bargain and a concluded contract is one which settles everything that is necessary to be settled and leaves nothing to he settled by agreement between the parties. Of course it may leave something which has still to be determined but then that determination must he a determination which does not depend upon the agreement between the CS(OS)No. 1440.08 Page 10 of 29 parties."
10. In Mohan Lal Ahuja and Ors Vs. Tarun Chandra, 157 (2009 DLT 216, one Tarun Chandra entered into a transaction with Smt. Veena Ahuja, with respect to a flat in property No. 34, Firozshah Road, New Delhi. On the failure of the defendant to execute a sale deed, the purchasers filed a suit for specific performance of the contract or in the alternative for damages. The document evidencing the transaction between Tarun Chandra and Smt. Veena Ahuja, was a receipt dated 30th January, 1988, whereby Tarun Chandra acknowledged receipt of Rs 2 lacs from Smt. Veena Ahuja towards provisional booking of a flat, measuring 1866 square feet in Group Housing Scheme at 34, Firozshah Road, New Delhi on the 4th floor at the rate of Rs 723/- square feet. Noticing that the receipt gave a description of the flat by area, floor and price, it was held by this Court that use of the expression "provisional booking of a flat"
does not defeat the intent with which the receipt was executed. The question as to whether execution of merely the receipt in the absence of an agreement makes the agreement incapable of being performed was answered by CS(OS)No. 1440.08 Page 11 of 29 this Court in the negative.
11. The next contention of the learned counsel for the defendants/applicants was that since the cheque which the plaintiff paid to the defendants at the time of execution of the MoU was dishonoured when presented to the bank and since the plaintiff did not make payment of the balance sale consideration of the defendants by 10th February, 2006, which was the last date stipulated in the Memorandum of Understanding for this purpose, the document itself was referred void and incapable of enforcement on account of this reason.
12. The case of the plaintiff is that on 09 th January, 2006, a day prior to the last date fixed in the MoU for making balance payment, defendant No.1 Chuckles Kohli, had a discussion with the plaintiff and they mutually agreed to extend the date of MoU till 10th February, 2006, which was to be the final date of payment unless more time was required, which they were to mutually settle at that time. Though the defendants have claimed that the document dated 9th January, 2006 is a fabricated document, they have not claimed that it does not bear signature of defendant CS(OS)No. 1440.08 Page 12 of 29 No.1 Chuckles Kohli. As noted earlier, while considering an application for rejection of plaint, the Court needs to take all the allegations made in the plaint as correct and the genuineness or the validity of the documents relied upon by the plaintiff cannot be examined at this stage. Therefore, for the purpose of this application, the document dated 09 th January, 2006 has to be taken a genuine document signed by defendant No.1 Chuckles Kohli. If that be so, the last date for making payment in terms of the MoU dated 23 rd December, 2005 was extended by the parties to 10th February, 2006 and, therefore, it cannot be said that MoU became void or unenforceable on account of failure of the plaintiff to make payment of the balance sale consideration by 10th February, 2006. Nothing prevents the parties to an agreement from modifying one or more of its terms at a later date and if the parties decide to do so, it is only the modified terms which need to be taken into consideration. Therefore, in view of the modification made on 09th January, 2006, the last date for making payment of the balance sale consideration stood extended to 10th February, 2006.
13. The plaintiff has also relied upon a document CS(OS)No. 1440.08 Page 13 of 29 purporting to have been executed by defendant No.1 Chuckles Kohli on 23rd February, 2006, while receiving a cheque of Rs 14 lacs from the plaintiff. Vide this document, he acknowledged payment of Rs 14 lacs vide cheque No. 106391 dated 23rd February, 2006 drawn on HSBC Bank in respect of one-third undisputed rights regarding plot No.15, Jor Bagh, New Delhi as described in MoU dated 23rd February, 2005. He further acknowledged receipt of a total sum of Rs 25 lacs from the plaintiff, including the aforesaid cheque of Rs 15 lacs drawn on HSBC Bank. It was further agreed by him that a further sum of Rs 25 lacs will be paid on or before 08th March, 2006 and the balance amount of Rs 3,37,50,000/- would be paid on or before 09th May, 2006. He also confirmed a valid general Power of Attorney from all the legal representatives of late Shri K.K. Kohli to sign on their behalf in connection with the aforesaid rights and assured assistance to the plaintiff to have formalities further with respect thereto in mutual consultation. Again, though the defendants have claimed that this document is a forged and fabricated document, they have not claimed that it is not signed by defendant No.1 Chuckles Kohli. On 22nd November, 2010, the learned counsel for the defendants CS(OS)No. 1440.08 Page 14 of 29 took a short adjournment to take instructions from defendant No.1 as to whether the document dated 23rd February, 2006 bears his signatures or not. When this matter was taken up on 30 th November, 2010, the learned counsel stated that he had not been able to get in touch with defendant No.1 and, therefore had not been able to take instructions from him, in this regard. The Court, however, need not wait for instructions from defendant No.1 to his counsel in this regard, since at this stage, the document set up by the plaintiff is to be taken as a genuine document and the application under Order 7 Rule 11 of CPC needs to be considered on that assumption. The terms and conditions with respect to payment of the balance sale consideration, therefore, stood further modified in terms of the document dated 23rd February, 2006.
14. As regards non-payment of the balance sale consideration even in terms of the document dated 23 rd February, 2006, the case of the plaintiff, as set out in the plaint, is that the defendants had been delaying in fulfillment of their contractual obligations and failed to come forward to complete the transaction, as agreed upon CS(OS)No. 1440.08 Page 15 of 29 between the parties and even after accepting the amount of Rs 25 lacs, they, on one pretext or the other, failed to produce the relevant documents. This is also the case of the plaintiff that the defendants belatedly mentioned that there is litigation pending for the entire property, though the suit property was clear from the said litigation. It is also alleged in the plaint that the plaintiff repeatedly requested to defendants to produce the details of the litigation and to produce documents to establish that there was no impediment on the sale of the suit property, but, those documents were never produced by them.
15. The plaintiff has placed on record copies of letters dated 02nd August, 2006, 07th May, 2007 and 04th April, 2008, alleged to have been written by him to the defendants and has claimed that he had always been ready and willing to perform his part of the agreement, but, the transaction could not be completed due to non-cooperative attitude of the defendants. This is also his case that the defendants are attempting to jeopardize his rights under the agreement by engaging with third party for sale/transfer of the suit property. Vide letter dated 02nd August, 2006, addressed to CS(OS)No. 1440.08 Page 16 of 29 all the defendants, the plaintiff wrote to the defendants that they had executed some other contract with a third party which he had brought to their knowledge and they had undertaken to make arrangements for cancellation and termination of that contract and inform the plaintiff accordingly. They were asked to inform the plaintiff regarding cancellation of the alleged agreement with the third party and were also requested to execute and register the necessary documents so that the transaction could be duly completed.
Vide letter dated 07th May, 2007, which purports to be addressed to all the defendants, the plaintiff, referring to his earlier communication dated 02nd August, 2006, called upon them to do the needful and close the deal within 15 days. He also conveyed his readiness and willingness to perform his part of the agreement.
Vide letter dated 04th April, 2008, the plaintiff wrote to the defendants that they had some disputed with the third party in respect of their share in the aforesaid property and that they had assured him that they were in the process of resolving the said dispute. Referring to his CS(OS)No. 1440.08 Page 17 of 29 previous communication dated 02nd August, 2006 and 07th May, 2007, he requested them to fulfil their commitments under the Memorandum of Understanding/agreement and again conveyed his readiness and willingness to perform his part of the obligations.
16. For the purpose of this application, the Court needs to presume that the plaintiff had actually sent these letters to the defendants and that, as claimed by him, they did not respond to any of them. If the averments made in these letters are proved to be correct, the plaintiff may have justification for not making payment of the balance sale consideration to the defendants in terms of the document dated 23rd February, 2006, whereby the last date for making payment of the balance consideration in terms of the MoU dated 23rd February, 2005 was extended up to 09th May, 2006. The plea taken by the plaintiff in this regard needs investigation which can be done only during trial.
In Vijay Pratap Singh Vs. Dukh Haran Nath Singh and Anr., AIR 1962 SC 941, Supreme Court observed that the Court has not to see whether the claim made by the petitioner is likely to suceed, it has merely to satisfy itself CS(OS)No. 1440.08 Page 18 of 29 that the allegations made in the petition, if accepted as true, would entitle the petitioner to the relief he claims. It was further observed that in ascertaining whether the petition shows a cause of action, the Court does not enter upon a trial of the issues affecting the merits of the claim made by the petitioner and it cannot take into consideration the defences which the defendant may raise upon the merits nor is the Court competent to make an elaborate enquiry into doubtful or complicated questions of law of act.
17. The learned counsel for the defendants has referred to the decisions in T. Arivandandam Vs. T.V. Satyapal and Anr. AIR 1977 SC 2421, Raj Narain Sarin (Dead) through Lrs. and Ors. Vs. Laxmi Devi and Ors.
2002 (10) SCC 501, Liverpool and London S.P. and I Asson. Ltd. Vs. M.V. Sea Success I and Anr. (2004)9 SCC 512, Sh. Anil Kumar Vs. Smt. Seema Thakur and Ors. (166) 2010 DLT 619, Mayawanti Vs. Kaushalya Devi JT 1990 (3) SC 205, High Way Farms Vs. Sh. Chinta Ram & Ors 2000 (56) DRJ 201, Lalit Kumar Sabharwal Vs. Ved Prakash Vijh 2003 (68) DRJ 670, Randhir Singh Chandok v. Vipin Bansal & Anr. 135 (2006) DLT 56, Rishi Dev CS(OS)No. 1440.08 Page 19 of 29 Batra v. Dr. (Mrs.) Anup Suri 2007 V AD (Delhi) 65, Naresh Bhutani v. Vijay Kumar Khurana DRJ 97 (2007) 117, Ganesh Shet Vs. Dr. C.S.G.K. Setty & Others AIR 1998 SC 2216, M/s. Mirahul Enterprises and others v. Mrs. Vijaya Sirivastava AIR 2003 Delhi 15.
18. In the case of T. Arivandandam (supra), Supreme Court in the context or Order 7 Rule 11 of CPC observed that reading of the plaint needs to be meaningful and not formal. There is no quarrel with this proposition of law, but, reading the averments made in the plaint and the documents filed by the plaintiff and taking them as correct, it is difficult to dispute that the plaint does disclose a bona fide cause of action against the defendants. In the case of Raj Narain Sarin (supra), Supreme Court reiterated the settled principle of law that the plaint should be taken as it is and the application under Order 7 Rule 11 of CPC should be considered on the basis of the averments made in the plaint without any external aid being available to the Court for the purpose. It was also observed that the Court should be rather hesitant to exercise the jurisdiction under Order 7 Rule 11 of the Code unless the factual score warrants such CS(OS)No. 1440.08 Page 20 of 29 exercise and the matter in issue falls within the four corners of the requirement of the Statute.
In the case of Liverpool and London S.P. and I Asson. Ltd. (supra), Supreme Court again reiterated the same proposition of law when it said that whether the plaint discloses a cause of action or not must be found from reading the plaint itself and for this purpose the averments made in the plaint in their entirety must be held to be correct, the test being as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed. In para 152 of the judgment, the Court, referring to its earlier decision of Mohan Rawale Vs. Damodar Tatyaba alias Dadasaheb and Ors. (1994) 2 SCC 392, reiterated that so long as the claim discloses some cause of action or raises some questions fit to be decided by a Judge, the mere fact that the case is weak and not likely to succeed is no ground for striking it out and that the purported failure of the pleadings to disclose a cause of action is distinct from the absence of full particulars. This judgment is hardly of any benefit to the defendants since the allegations made in the plaint and the documents filed CS(OS)No. 1440.08 Page 21 of 29 by the plaintiff do disclose a triable cause of action against the defendants and at this stage, there is no ground to hold them to be vexatious or frivolous.
In the case of Anil Kumar (supra), a learned Single Judge of this Court, referring to the agreement to sell subject matter of the suit before him, and to the decision of Supreme Court in V.R. Sudhakara Rao and Ors. Vs. T.V. Kameswari 2007 (6) SCC 650 and Kollipara Sriramulu Vs. T. Aswathanarayana and Ors. AIR 1968 SC 1028 observed that there can be binding oral agreement to sell immovable property and the question in such cases was as to whether the material and pleadings on record show that an agreement to sell had come into existence. Noticing that four essential ingredients to an agreement to sell immovable property are (i) particulars of consideration (ii) certainty about identity of parties; (iii) certainty about the property to be sold and; (iv) certainty as to other terms relating to probable cost of conveyance time etc., it was observed that in the absence of any of these elements, it can be concluded that there was no binding agreement. However, the suit before this Court is not based on an oral agreement and the CS(OS)No. 1440.08 Page 22 of 29 documents relied upon by the plaintiff, including the MoU dated 23rd December, 2005, the writing dated 09 th January, 2006 and the second writing dated 23rd February, 2006 disclose all the essential ingredients of a valid agreement to sell, including consideration, identity of parties, the property subject matter of the agreement and the time for payment of the balance sale consideration and completion of the transaction. The ancillary ingredients of the agreement, if any, can in view of proviso (2) to Section 92 of Evidence Act, can be proved by oral evidence. It is, therefore, difficult to say at this stage that there was no concluded agreement to sell in favour of the plaintiff.
In the case of Mayawanti (supra), Supreme Court held that where a valid and enforceable contract has not been made, the Court will not make a contract for the parties and specific performance will not be ordered if the contract itself suffers from some defect which makes it an invalid or unenforceable contract between the parties. The stipulations and terms contained in the document filed by the plaintiff disclose all essential ingredients of an agreement to sell immovable property. None of the terms of CS(OS)No. 1440.08 Page 23 of 29 the stipulations can be said to be uncertain nor can it be said that the parties were not ad idem.
In the case of High Way Farms (supra), the transaction between the parties was evidenced by two documents styled as receipts. The Court, while dealing with an application under Order 39 Rule 1 and 2 CPC was called upon to interpret those documents to ascertain whether there was an agreement to sell executed in favour of the plaintiff. However, at this stage, the Court is not required a prima facie view on the merits of the case and is considering an application under Order 7 Rule 11 of CPC and for the purpose of deciding this application all the averments made in the plaint have to be taken as correct. This judgment, therefore, is of no help to the defendants, particularly at this stage.
In the case of Lalit Kumar Sabharwal (supra), while deciding the suit on merits, Supreme Court found that the document relied upon by the plaintiff was merely a receipt and did not fulfil the essential conditions of an agreement to sell. It was noticed that no time frame was fixed for execution of the sale deed nor there was any CS(OS)No. 1440.08 Page 24 of 29 stipulation as to who was to apply for permissions from the concerned authorities in regard to the sale of the property. There was no recital in regard to consequences of default and most importantly there was no description of the property proposed to be sold in the document relied upon by the plaintiff. These ingredients are not missing in the documents to relied upon by the plantiff. Considering the fact that the nature of the document relied upon by the plaintiff in that case was different from the nature of the documents relied upon by the plaintiffs before this Court and more importantly the fact that the Court at this stage is not deciding the matter finally but is only taking a view on an application under Order 7 Rule 11 of CPC for rejection of plaint on the ground that it does not disclose a cause of action, this judgment does not help the defendant.
In the case of Randhir Singh Chandok (supra), the Court, after examining the document before it, found that the document in question was not an agreement to sell and was at best a memorandum of a tentative understanding between the parties that the rate of land at which sale would be effected would be Rs 72.5 lacs per acre. During CS(OS)No. 1440.08 Page 25 of 29 the course of judgment, it was observed that normal practice in Delhi is to receive at least 10% of the total sale consideration as earnest money, whereas the plaintiff before the Court had received a meager sum of Rs 5 lacs. In this case also the Court was taking a view while deciding an application of the plaintiff under Order 39 Rule 1 and 2 of CPC for grant of interim injunction, restraining the defendants from selling or encumbering the suit land. Since this Court is considering an application under Order 7 Rule 11 of CPC and not an application for grant of temporary injunction, this judgment, to my mind, does not clinch the issue in favour of the defendants. Moreover, this is not a statutory requirement that the earnest money should be at least 10% of the sale consideration. Nothing prevents the parties from agreeing on a lesser amount as earnest money. The amount of earnest money, in my view, loses significance where the transaction is evidence by documents.
In the case of Rishi Dev Batra (supra), the Court was taking a view at the time of final decision of the suit on merits after recording evidence. The Court noticed that that the plaintiff did not write any letter to the defendant to fulfil CS(OS)No. 1440.08 Page 26 of 29 his obligation and there was no correspondence between the parties for about 1 ½ years. The plaintiff in that case was also unable to prove that he had sufficient money with him to make payment of the balance sale consideration. It was, in these circumstances, that the suit was dismissed. This judgment, therefore, is of no help to the defendants before this Court.
In the case of Naresh Bhutani (supra), the Court was deciding a Regular First Appeal after a decision of the suit on merits. It was found on the basis of the evidence produced during trial that the requirements of a document to constitute an agreement were missing and, therefore, no valid and enforceable agreement was made out. Again, this judgment would be of no help to the defendants when the Court is considering an application under Order 7 Rule 11 of CPC.
In the case of Ganesh Shet (supra), Supreme Court observed that where in a suit for specific performance of a contract, the contract on which relief was based was found to be not a concluded contract, the relief cannot be given on the basis of another contract alleged by plaintiff to CS(OS)No. 1440.08 Page 27 of 29 be concluded contract, when it was not proved that it was a fresh or independent contract.
In the case before this Court the allegations made in the plaint and the documents relied upon by the plaintiff contain all the essential ingredients of a concluded contract for sale of immovable property. This judgment, therefore, can give no help to the defendants.
In the case of M/s. Mirahul Enterprises and others (supra), the Court found that there was no consensus between the parties as to price payable and, therefore, held that the specific performance could not be ordered. Again, this judgment does not help the defendants in any manner. I have also gone through the decision of the Supreme Court in the Mayawanti (supra). It does not contain any such proposition of law which makes out the case for rejection of the plaint.
19. For the reasons given in the preceding paragraphs, I find no merit in the application under Order 7 Rule 11 of the CPC and the same is hereby dismissed. CS(OS) No. 1440/2008 and IA No. 8621/2008 (under Order 39 Rule 1&2) and IA No. 11000/2009 by plaintiff CS(OS)No. 1440.08 Page 28 of 29 under Section 151 of CPC for sending the documents dated 09.01.2006 as well as receipt dated 23.02.2006 to Forensic Science Laboratory for comparison of signatures of D-1 List for consideration on 10th January, 2011.
(V.K. JAIN) JUDGE DECEMBER 03, 2010 bg CS(OS)No. 1440.08 Page 29 of 29