Delhi District Court
S.P. Gupta vs . Ruchi Aggarwal on 4 May, 2019
S.P. Gupta vs. Ruchi Aggarwal
IN THE COURT OF MS. JYOTI KLER, ADDL. DISTRICT JUDGE05,
ROOM NO. 605, SOUTH DISTRICT, SAKET COURTS, NEW DELHI
CS No. 8768/16
Case ID No. DLST010037322016
In the matter of
Sh. S.P. Gupta
S/o Late V.P. Gupta
R/o Flat no. F3, Ground Floor,
N.D.S.E. PartII
New Delhi - 110049
.............Plaintiff
Versus
Ms. Ruchi Aggarwal
W/o Late Rakesh Aggarwal
R/o 68, Ground Floor
Uday Park
New Delhi110049
..............Defendant
Date of Institution : 06.11.2007
Date of reserving the judgment : 08.04.2019
Date of pronouncement : 04.05.2019
Decision : Dismissed
CS No.8768/18 Page 1 of 72
S.P. Gupta vs. Ruchi Aggarwal
JUDGMENT IN THE SUIT FOR SPECIFIC PERFORMANCE,
DECLARATION AND PERMANENT INJUNCTION
Preliminary
1. Parties to this suit are related. Plaintiff is brother in law of
the defendant who is cousin of plaintiff's wife. Subject matter of
the suit is a residential flat bearing no. F3, New Delhi South
Extension, PartII, New Delhi (hereinafter referred as the "suit
property").
Case of the Plaintiff
2. Plaintiff avers that in the year 1992 defendant & her
husband approached him and requested for a loan of Rs. 5 lacs.
They offered to mortgage the suit property in favour of the
plaintiff. The plaintiff had saved the said money for purchasing
a two bedroom residential flat which would have been sufficient
for him & his wife since they had no offspring. Defendant, on
coming to know about it, offered the suit property to the
plaintiff for his residence. It was agreed that plaintiff will stay in
the suit property as a tenant and pay rent. The defendant shall
make efforts to return the borrowed money within six years
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S.P. Gupta vs. Ruchi Aggarwal
with interest @1% per month. In case defendant is unable to
return the money within the aforesaid period, the suit property
shall become sole and absolute property of the defendant.
3. In pursuance to this understanding, defendant shifted in
the suit property with his wife in January, 1993. He used to pay
rent in cash and defendant would issue receipt. The rent was
Rs. 1,000/ per month in the year 1993, it was increased to Rs.
1,250/ per month in the year 1995 and to Rs. 1,500/ per
month in the year 1998.
4. Husband of the defendant was unwell in the year 1998 so
she informed the plaintiff that she would not be able to return
the borrowed money within the agreed period and requested for
extension of time. It was then agreed that borrowed money be
returned by the defendant to the plaintiff with interest by
March, 1999, failing which the suit property will become sole
and absolute property of the defendant. This agreement was
reduced in writing on 14.05.1998. The plaintiff, due to
aforesaid understanding, also started paying house tax from the
year 1997 and paid it till the year 2002.
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S.P. Gupta vs. Ruchi Aggarwal
5. Borrowed money was not returned by the defendant till
31.03.1999. Defendant then asked the plaintiff to stop paying
rent and parties agreed & understood that plaintiff became
absolute owner of the suit property since then. Plaintiff however
did not insist upon execution of title documents in his favour
because there was a lot of trust and faith between the parties
during that time.
6. Husband of the defendant expired in October, 2004.
Father of the defendant approached the plaintiff in December,
2006 and asked him to vacate the suit property. The plaintiff
informed him about the agreement between him & the
defendant and in order to protect his interest got an
advertisement published in newspapers Statesman & Navbharat
Times both dated 11.12.2006, regarding his legal rights in the
suit property.
7. Son of the defendant approached the plaintiff in
February / March 2007 and asked him to vacate the suit
property. Plaintiff explained about the agreement to the son of
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S.P. Gupta vs. Ruchi Aggarwal
the defendant also but he threatened to take forcible possession.
Hence, plaintiff issued a legal notice dated 10.04.2007 to the
defendant to which no reply was received. Son of the defendant
rather filed a Civil Suit in September, 2007 claiming ownership
over the suit property by way of a family settlement dated
23.12.2006. Hence, plaintiff also filed the present suit with
following prayers:
"A) Pass a decree of Specific Performance directing the
defendant to execute the Deed of Sale in favour of the
plaintiff for property bearing Flat no. F3, Ground Floor,
NDSEPart II, New Delhi.
B) Pass a Decree of Declaration in favour of the plaintiff
thereby declaring the plaintiff to the owner in possession of
property bearing Flat no. F3, Ground Floor, N.D.S.E. Part
II, New Delhi;
C) Pass a Decree of Permanent Injunction thereby
restraining the defendant, her heirs, assigns, servants,
agents, representatives, etc. from disturbing peaceful
possession and/or occupation of the plaintiff and / or
occupation of the plaintiff in property bearing Flat no. F3,
Ground Floor, N.D.S.E. Part II, New Delhi;
D) In the alternative of prayer (A) not being granted in
favour, pass a decree of recovery for a sum of
Rs.40,00,000/ (rupees forty lakh only) in favour of the
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S.P. Gupta vs. Ruchi Aggarwal
plaintiff and against the defendant;
E) In case of prayer (D) being granted, pass a decree in
favour of the plaintiff directing the defendant to pay
damages/compensation amounting to Rs. 10,00,000/
(rupees ten lakh only);
F) In case of prayer (D) and (E) being granted, award
interest on the amount claimed @24% per annum in favour
of the plaintiff and against the defendant;
G) Pass any other or further orders, as this Hon'ble Court
may deem fit and proper.
Case of the Defendant
8. Defendant raised several preliminary objections. It is
stated that the suit has been filed without any cause of action. It
is also stated that this Court has no jurisdiction to entertain and
try the suit. It is further stated that the suit is barred by
limitation.
9. Defendant denied the case of the plaintiff in entirety. It is
stated by the defendant that wife of the plaintiff is her cousin.
Plaintiff was staying with a joint family consisting of seven
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S.P. Gupta vs. Ruchi Aggarwal
adults and three children, in a small house which was
insufficient for the family of 7 adults & 3 children. Hence,
defendant offered the suit property to the plaintiff and his wife
for their residence purely on license basis because suit property
was lying vacant. Defendant denied that plaintiff was ever
inducted in the suit property as a tenant. She also denied that
she borrowed a sum of Rs. 5 lacs from the plaintiff. She further
denied having signed the document dated 14.05.1998 and
stated that it is a forged and fabricated document created by the
plaintiff. It is averred by her that her husband used to take care
of their business and she would keep blank signed stamp papers
with him for smooth running of the business. Plaintiff frequently
visited the office of her husband, must have laid hands upon
some of the blank stamp papers and fabricated the document
dated 14.05.1998 on one such paper.
10. Defendant averred that the suit property initially was
owned by her mother in law who bequeathed it in favour of her
father in law through a Will. The suit property was mortgaged
to the State Bank of Indore in 1989 and is still lying mortgaged
there. Plaintiff wants to usurp the suit property and therefore is
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S.P. Gupta vs. Ruchi Aggarwal
raising false plea. It is also averred that husband of the
defendant was not unwell in the year 1998. It is moreover
averred that beneficiary of the suit property is son of the
defendant, as per wishes of her late father in law, and she was
only managing the suit property till her elder son attained
majority.
Statement under Order X CPC
11. On completion of pleadings, statement of the parties was
recorded by the Hon'ble High Court of Delhi under Order X CPC
on 25.09.2008.
12. Defendant admitted her signatures on the document dated
14.05.1998 during her statement and the document was given
Mark A. She also admitted her signature on the four rent
receipts which were given Mark B to Mark E. She was asked to
explain why the document dated 14.05.1998 was signed by her
to which she replied that she may have given blank signed
stamp papers to her husband who must have given those papers
to the plaintiff in good faith. She however admitted that there
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S.P. Gupta vs. Ruchi Aggarwal
was no business relationship between her husband and the
plaintiff. While recording her statement under Order X CPC, the
Hon'ble High Court of Delhi also noted her demeanour. It was
noted that the defendant was uncomfortable while answering
the question why she signed the document dated 14.05.1998.
13. Statement of plaintiff was also recorded wherein he stated
that he had paid Rs. 5 lacs to the defendant in cash and did not
show the said amount in his income tax return. He said that no
interest on the borrowed amount was ever paid by the
defendant; that there was no business relationship between
husband of the defendant and him; that no agreement to sell
was executed between the parties in writing; and that the only
document on which he is relying upon is one dated 14.05.1998.
Issues
14. On the basis of pleadings, following issues were framed
vide order dated 25.09.2008. The issues are as follows:
"i) Whether the suit is barred by limitation? OPD
ii) Whether this Court does not have pecuniary
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S.P. Gupta vs. Ruchi Aggarwal
jurisdiction to try the present suit? OPD
iii) Whether there was any oral agreement to sell between
the plaintiff and the defendant in respect of ground floor,
rear portion of flat no. F3, NDSEII, New Delhi? OPP
iv) What is the nature and effect of document dated 14th
May 1998 and whether any right accrues in favour of the
plaintiff on the basis of the said document? OPP
v) Whether document dated 14th May, 1998 is under
stamped or requires registration and effect thereof? (Onus
on both parties)
vi) Whether the plaintiff is entitled to decree of specific
performance in respect of ground floor, rear portion of Flat
no. F3, N.D.S.E. Part II, New Delhi? OPP
vii) Whether the plaintiff is entitled to decree of
declaration as prayed for in prayer B? OPP
viii) Whether the plaintiff is entitled to permanent
injunction as prayed for in prayer C? OPP
ix) Whether the plaintiff is entitled to decree of recovery of
Rs.40,00,000/or for any amount, in case prayer for decree
of specific performance is refused? OPP
x) If issue nos. 3 and 9 are decided in favour of the
plaintiff, whether the plaintiff is entitled to interest on the
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S.P. Gupta vs. Ruchi Aggarwal
amount awarded? If so, at what rate and for which period?
OPP"
15. Son of the defendant, namely Sh. Nikesh Aggarwal, filed
another civil suit against the plaintiff and the said suit was
transferred to the same Court where the present suit was
pending, vide order dated 03.03.2009. It was decided by the
Hon'ble High Court of Delhi vide order dated 08.02.2011 that
the present suit shall be the lead suit and evidence in this suit
shall be recorded first.
Plaintiff's Evidence
16. Plaintiff examined himself as PW1 by way of evidence
affidavit Ex.PW1/A wherein he reiterated contents of the plaint
and relied upon the following documents:
S. No Description Exhibited as
1. Rent receipt dated 03.11.1993 Ex. P1
reflecting payment of rent for the (also Mark 'B')
month of January, 1993
2. Rent receipt dated 05.11.1996 Ex. P2
reflecting payment of rent for the (also Mark 'C')
month of January, 1996
3. Rent receipt dated 07.01.1998 Ex. P3
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S.P. Gupta vs. Ruchi Aggarwal
reflecting payment of rent for the (also Mark 'D')
month of January, 1998
4. Rent receipt dated 07.05.1998 Ex. P4
reflecting payment of rent for the (also Mark 'E')
month of May, 1998
5. The document dated 14.05.1998 Ex. P5 (also
admittedly signed by the Mark A)
defendant (objected by the
defendant on the ground that
document was unstamped &
unregistered and this objection
was directed to be taken up at
the stage of final arguments
vide order dated 28.03.2014),
executed on a stamp of Rs.10/
6. Notice dated 02.08.2007 received Ex. P6
by the plaintiff from MCD
7. Reply dated 10.08.2007 sent by Ex.P7
the plaintiff to the MCD qua
notice dated 02.08.2007
8. Self Assessment Property Tax Ex.P8
Form for the year 20072008
9. Newspaper "The Statesman" Ex.P9
dated 11.12.2006 reflecting
publication of a notice by the
plaintiff
10. Newspaper "Navbharat Times" Ex.P10
dated 11.12.2006 reflecting
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S.P. Gupta vs. Ruchi Aggarwal
publication of a notice by the
plaintiff
11. Legal notice dated 10.04.2007 Ex.P11
sent by the plaintiff to the
defendant
17. Plaintiff was cross examined by the defendant in detail. He
deposed during his cross examination that Rs. 5 lacs was given
by him to the defendant in cash and the suit amount was not
shown in the ITR. He was asked if he had filed his ITR on record
which he denied. He further stated that Rs. 5 lacs was available
with him in cash from his personal savings that he was keeping
with him since the year 1974. He denied that he was a licensee
in the suit property and stated that he was a tenant. He also
stated that he never asked for rent receipts from the defendant
and it is the defendant herself who used to issue the same. He
further deposed that there was no written rent agreement
between him and the defendant; that he used to pay rent in
cash; and that the rent amount was not shown by him in his
ITR. He also admitted that the document Ex.P5 provided that
the rate of interest to be paid against the borrowed amount was
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S.P. Gupta vs. Ruchi Aggarwal
Rs.1% per year but stated that it was incorrectly mentioned in
the document. When questioned further, he admitted that he
did not specify about this fact in his plaint and no notice of the
error was ever given by him to the defendant. He moreover
deposed that husband of the plaintiff was suffering from heart &
kidney disease since 1990 till 2003 but admitted that he did not
file any document on record to prove this fact. He denied that
husband of the defendant was not unwell during the period
from 1990 till 2003. He also deposed that he paid house tax qua
the suit property for the first time in the year 19971998
through cheque and has been paying house tax since then.
When questioned why no steps were taken by him for transfer
of the suit property in his favour till issuance of legal notice, he
explained that parties were having cordial relations. He deposed
that no rent was paid by him after the year 1999 due to an oral
understanding between the parties. Defence of the defendant
was put to him in the form of suggestions which were denied by
him. He also disclosed that the suit property was given to the
defendant by her father in law through Will. He denied that
Nikesh Aggarwal, the elder son of the defendant, had become
owner of the suit property on account of a family settlement &
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S.P. Gupta vs. Ruchi Aggarwal
that he was liable to pay damages for illegally occupying the
suit property.
18. PW2, Sh. Vinod Kumar Gupta, deposed by way of affidavit
Ex.PW2/A, that he is the cousin of defendant and brother in law
of the plaintiff. The plaintiff was looking for a house in the year
19921993 and defendant was in a bad financial condition
because of misdeeds of her husband since 1991 till 2005.
Therefore, defendant borrowed a sum of Rs. 5 lacs from the
plaintiff against sale / mortgage of the suit property in his
presence. He was called by the defendant on 14.05.1998 and
she requested him to witness the mortgage deed dated
14.05.1998. Hence, he signed the said deed as a witness in the
presence of plaintiff, defendant and Sh. J.P. Gupta.
19. PW2 was cross examined by the defendant. He deposed
during his cross examination that his real sister was wife of the
plaintiff. He also deposed that he was not aware what business
was being done by the defendant and what was her financial
condition. When questioned about the payment of Rs.5 lacs, he
deposed that the said amount was given by the plaintiff to the
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S.P. Gupta vs. Ruchi Aggarwal
defendant in cash in his presence at Gulmohar Park which was
the residence of defendant. When questioned further about this
residence, he deposed that he was aware that defendant had
shifted from this residence but he did not know when she had
shifted. He deposed that he was called by the defendant in May,
1998 on phone to visit the suit property and the document
dated 14.05.1998 was executed in his presence. He also
deposed that he visits the plaintiff frequently, like once in a
month, and plaintiff had requested him to depose in the present
case.
20. PW3 Sh. J.P. Gupta deposed by way of evidence affidavit
Ex.PW3/A on the same lines as PW2. He stated during cross
examination that the transaction of Rs.5 lacs between plaintiff &
defendant did not take place in his presence and he was
informed about it later on by the plaintiff. He also stated that he
is brother of the plaintiff but he was called in May, 1998 by the
defendant to visit the suit property. He accordingly went there
in the evening of 14.05.1998 after office hours and witnessed
the execution of document dated 14.05.1998.
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S.P. Gupta vs. Ruchi Aggarwal
Defendant's Evidence
21. Defendant stepped in the witness box and deposed by way
of evidence affidavit Ex.DW1/A wherein she reiterated contents
of her written statement. She did not rely upon any document
in her examination in chief. However, during her cross
examination certain documents were put to her which are
Ex.DW1/P1 (AD card bearing signature of her younger son
Nishchal with date 17.04.2007), Ex.DW1/A (Copy of the
register of stamp vendor) and Mark 'A' (Copy of Will executed
by her Father in Law).
22. She deposed during her cross examination that the suit
property was initially owned by her mother in law who had
bequeathed it to her father in law. She denied at first that a Will
was executed in her favour by her father in law but later
admitted it when copy of Will Mark A was shown to her. She
further deposed that her in laws wanted her to hand over the
suit property to her elder son when he turned 25 years old. She
deposed that the suit property was mutated in her favour in the
year 1991. When she was questioned about the alleged signing
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S.P. Gupta vs. Ruchi Aggarwal
of the blank stamp paper, she stated that she had some business
interests but when further questioned, she revealed that she was
the managing director of only one company i.e. Apojee
International and of no other company. When questioned about
the period during which she allegedly signed the blank stamp
paper, she stated that she did not remember and also deposed
that she could not say when did she realize that the blank stamp
papers had gone missing. She deposed that there was no
business relationship between the plaintiff and her husband.
She admitted that she filed no complaint regarding the alleged
forgery of the document dated 14.05.1998. She was questioned
about health of her husband to which she replied that her
husband was ill in the year 1996 and also in the year 1999,and
was hospitalized about 23 times during this period till his death
in the year 2004. She denied that the document Ex.P5 was
voluntarily executed by her. She denied having purchased the
stamp paper and also her signatures on the register of stamp
vendor, which is Ex.DW1/A. When questioned about the
mortgage of the suit property with State Bank of Indore, she
deposed that the mortgage money had already been paid to the
bank. She further deposed that the plaintiff never paid any rent
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S.P. Gupta vs. Ruchi Aggarwal
since 1993 till 2006 and rent receipts were signed by her at the
request of the plaintiff who required the same for showing to
the bank with which property had been mortgaged because the
bank officials used to visit the suit property. She also deposed
that the plaintiff paid house tax only when the present case was
filed and not before that. It was suggested to her that property
located at Gulmohar Park belonging to her husband's family
was sold due to financial crunch and hotel Banjara was
auctioned in the year 20012002 by DRT, which suggestions
were denied by her. Further suggestions regarding the case of
the plaintiff were also denied by her.
Final Arguments
23. Detailed final arguments were advanced on behalf of
either side.
24. Ld. Counsel for the plaintiff contended that the instant suit
is for specific performance of agreement to sell with respect to
the suit property. It was contended that the defendant was
owner of the suit property and she had agreed to sell the same
to the plaintiff in case she failed to return the loan amount of
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S.P. Gupta vs. Ruchi Aggarwal
Rs. 5 lacs by March, 1999. Ld. Counsel contended that since suit
is for specific performance, the document Ex.P5 can be looked
into and given effect to even though it is not registered. It was
also contended by Ld. Counsel for the plaintiff that document
Ex.P5 contains understanding between the plaintiff and
defendant with respect to the suit property and its contents
reflect that the parties intended to execute a mortgage deed by
conditional sale, but sale documents were not executed by the
defendant in favour of plaintiff, so a suit for specific
performance has been filed. Ld. Counsel relied upon Section 49
of the Registration Act, 1908 and Section 58 (c) of the Transfer
of property Act, 1882 in support of his contentions. He further
relied upon the following judgments in support of his
contentions:
Legal Preposition: Unregistered Document can be read in a Suit for
Specific Performance
(i) S. Kaladevi Vs. V.R. Somasundaram and Ors.:
(2010) 5 SCC 401:
"11. Section 49 gives teeth to Section 17 by providing
effect of nonregistration of documents required to be
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S.P. Gupta vs. Ruchi Aggarwal
registered. Section 49 reads thus:
"49. Effect of nonregistration of documents
required to be registered. - No document
required by Section 17 or by any provision of
the Transfer of property Act, 1882 (4 of 1882),
to be registered shall -
(a) affect any immovable property
comprised therein, or
(b) confer any power to adopt, or
(c) Be received as evidence of any
transaction affecting such property or
conferring such power,
unless it has been registered:
Provided that an unregistered document
affecting immovable property and required by
this Act or the Transfer of Property Act, 1882 (4
of 1882), to be registered may be received as
evidence of contract in a suit for specific
performance under Chapter II of the Specific
Relief Act, 1877 (1 of 1877), or as evidence of
any collateral transaction not required to be
effected by registered instrument."
12. The main provision in Section 49 provides that
any document which is required to be registered, if not
registered, shall not affect any immovable property
comprised therein nor such document shall be received
as evidence of any transaction affecting such property.
The proviso, however, would show that an
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S.P. Gupta vs. Ruchi Aggarwal
unregistered document affecting immovable property
and required by the 1908 Act or the Transfer of
Property Act, 1882 to be registered may be received as
an evidence to the contract in a suit for specific
performance or as evidence of any collateral
transaction not required to be effected by registered
instrument. By virtue of the proviso, therefore, an
unregistered sale deed of an immovable property of
the value of Rs.100 and more could be admitted in
evidence as evidence of a contract in a suit for specific
performance of the contract. Such an unregistered sale
deed can also be admitted in evidence as an evidence
of any collateral transaction not required to be
effected by registered document. When an unregistered
sale deed is tendered in evidence, not as evidence of a
completed sale, but as proof of an oral agreement of
sale, the deed can be received in evidence making an
endorsement that it is received only as evidence of an
oral agreement of sale under the proviso to Section 49
of the 1908 Act."
(ii) K.B. Saha and Sons Private Limited Vs.
Development Consultant Limited:(2008) 8 SCC 564:
"34. From the principles laid down in the various
decisions of this Court and the High Courts, as referred
to hereinabvoe, it is evident that:
1. A document required to be registered, if
unregistered is not admissible into evidence
under Section 49 of the Registration Act.
2. Such unregistered document can however
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S.P. Gupta vs. Ruchi Aggarwal
be used as an evidence of collateral purpose as
provided in the proviso to Section 49 of the
Registration Act.
3. A collateral transaction must be
independent of, or divisible from, the
transaction to effect which the law required
registration.
4. A collateral transaction must be a
transaction not itself required to be effected by a
registered document, that is, a transaction
creating, etc. any right, title or interest in
immovable property of the value of one hundred
rupees and upwards.
5. If a document is inadmissible in evidence
for want of registration, none of its terms can be
admitted in evidence and that to use a document
for the purpose of providing an important clause
would not be using it as a collateral purpose.
Legal Preposition: Admissibility of an Insufficiently Stamped
Document
(iii) Jagdish Vs. Smt. Deep Shika Garg:AIR 2013
Rajasthan 89:
"19. Relevant portion of Para no. 4 of the judgment
of the Supreme Court in the case of Javer Chand &
Ors.,(AIR 1961 SC 1655)(supra):
"In our opinion, the High Court misdirected
itself, in its view of the provisions of S.36 of the Stamp
Act. Section 36 is in these terms:
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S.P. Gupta vs. Ruchi Aggarwal
"Where an instrument has been admitted in
evidence, such admission shall not, except as provided
in Section 61, be called in question at any stage of the
same suit or proceeding on the ground that the
instrument has not been duly stamped."
That section is categorical in its terms that when
a document has once been admitted in evidence, such
admission cannot be called in question at any stage of
the suit or the proceeding on the ground that the
instrument had not been duly stamped. The only
exception recognised by the section is the class of cases
contemplated by S.61, which is not material to the
present controversy. Section 36 does not admit of
other exceptions. Where a question as to the
admissibility of a document is raised on the ground
that it has not been stamped, or has not been properly
stamped, it has to be decided then and there when the
document is tendered in evidence. Once the Court,
rightly or wrongly, decides to admit the document in
evidence, so far as the parties are concerned the matter
is closed. Section 35 is in the nature of a penal
provision and has farreaching effects. Parties to a
litigation, where such a controversy is raised, have to
be circumspect and the party challenging the
admissibility of the document has to be alert to see
that the document is not admitted in evidence by the
Court. The Court has to judicially determine the
matter as soon as the document is tendered in evidence
and before it is marked as an exhibit in the case. The
record in this case disclose the fact that the hundis
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S.P. Gupta vs. Ruchi Aggarwal
were marked as Exs.P1 and P.2 and bore the
endorsement 'admitted in evidence' under the signature
of the Court. It is not, therefore, one of those cases
where a document has been inadvertently admitted,
without the Court applying its mind to the question of
its admissibility. Once a document has been marked as
an exhibit in the case and the trial Court proceeded all
along on the footing that the document was an exhibit
in the case and has been used by the parties in
examination and crossexamination of their witnesses,
S.36 of the Stamp Act comes into operation. Once a
document had been admitted in evidence, as aforesaid,
it is not open either to the Trial Court itself or to a
Court of Appeal or revision to go behind that order.
Such an order is not one of those judicial orders which
are liable to be reviewed or revised by the same Court
or a Court of superior jurisdiction.
22. On consideration of the aforesaid judgments, it
is now well settled that an unregistered sale
deed/agreement to sell is admissible in evidence in a
civil suit for specific performance on account of proviso
to Section 49 of the Act of 1908. As regard the
document is insufficiently stamped, it is also well
settled that when the document is exhibited and the
entire trial has proceeded all along on the footing that
the document was an exhibit in the case and has been
used by the parties in examination and cross
examination of their witnesses, then Section 40 of the
Stamp Act, 1998 comes into operation and it is not
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S.P. Gupta vs. Ruchi Aggarwal
open to be called in question at any stage of the same
suit or proceeding on the ground that the instrument
has not been duly stamped. The said principle is
equally applicable to the appellate Court which is
exercising the same jurisdiction of the trial Court. The
defendant appellant is debarred from taking such an
objection at any stage of the same suit or in the
present appeal on this ground, therefore, agreement to
sell (Ex.2) has rightly been admitted by the trial Court
in evidence.
Legal Preposition: Status of a Statement recorded under Order X
CPC
(iv) Rajiv Srivastava Vs. Sanjiv Tuli and another:AIR
2005 Delhi 319:
"10. The use of the expression otherwise in the
aforesaid context came to be interpreted by the Court.
Considering the expression the Court had interpreted
the said word by stating that it permits the Court to
pass judgment on the basis of the statement made by
the parties not only on the pleadings but also dehors
the pleadings i.e. either in any document or even in the
statement recorded in the Court. If one of the parties'
statement is recorded under O.10 Rr. 1 and 2 of the
Code of Civil Procedure, the same is also a statement
which elucidates matters in controversy. Any
admission in such statement is relevant not only for
the purpose of finding out the real dispute between the
parties but also to ascertain as to whether or not any
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S.P. Gupta vs. Ruchi Aggarwal
dispute or controversy exists between the parties.
Admission if any is made by a party in the statement
recorded, would be conclusive against him and the
Court can proceed to pass judgment on the basis of the
admission made therein. Even otherwise, without
making any reference to the said statement a decree of
the nature, in our opinion, could have been passed
when the terms and conditions of the registered lease
deed are referred to, which is a part of the pleadings of
the parties. Even in the pleadings, no dispute is raised
with regard to execution of the registered lease deed
between the parties. The registered lease deed was
executed between the parties on the specific terms and
conditions mentioned therein. The trial Court has
referred to the same terms and conditions and after
scrutinising the same has held that the rate of rent of
the premises was Rs.12,000/ per month and that
relationship of landlord and tenant is admitted and
that the said registered lease deed had come to an end
by efflux of time. The notice dated 25th March, 1999,
terminating the tenancy, was also examined by the
learned trial Court in depth and on scrutinizing the
same it was held that the said notice was served on the
appellant and that the said notice is legal and valid.
We find no infirmity in the aforesaid conclusions and
findings of fact recorded by the learned trial Court.
Considering the entire facts and circumstances of the
case, we also hold that the parties were bound by the
terms and conditions of the lease agreement, which
was a registered document. The said tenancy had come
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S.P. Gupta vs. Ruchi Aggarwal
to an end by efflux of time, which was also terminated
by notice dated 25th March, 1999 terminating the
tenancy, which was by way of abundant caution. An
oral lease of extension was pleaded, which was struck
out by the learned trial Court on the ground that the
same was contradictory to the written agreement filed
and, therefore, cannot be looked into in terms of the
provisions of O.6 R.16 of the Code of Civil Procedure.
When the original lease is registered and comes to an
end by efflux of time, the plea of renewal of lease
through oral agreement is vexatious. The said plea,
therefore, was rightly struck out."
Legal Preposition: Difference in Mortgage by Conditional Sale and
Sale with Right to Repurchase
(v) C. Cheriathan Vs. P. Narayanan Embranthiri:AIR
2009 SC 1502:
"7. Whether a document is a mortgage by
conditional sale or a sale with a condition of
repurchase is a vexed question.
Section 58(c) of the Transfer of Property Act,
1882 reads thus:
"Section 58 - "Mortgage", "mortgagor",
"mortgagee", "mortgagemoney" and "mortgage deed"
defined -
(a) ...
(b) ...
(c) Mortgage by conditional sale. - Where, the
CS No.8768/18 Page 28 of 72
S.P. Gupta vs. Ruchi Aggarwal
mortgagor ostensibly sells the mortgaged property -
on condition that on default of payment of the
mortgagemoney on a certain date the sale shall
become absolute, or
on condition that on such payment being made
the sale shall become void, or
on condition that on such payment being made
the buyer shall transfer the property to the seller,
the transaction is called a mortgage by
conditional sale and the mortgagee a mortgagee by
conditional sale:
Provided that no such transaction shall be
deemed to be a mortgage, unless the condition is
embodied in the document which effect or purports to
effect the sale."
9. A document, as is well known, must be read in
its entirety. When character of a document is in
question, although the heading thereof would not be
conclusive, it plays a significant role. Intention of the
parties must be gathered from the document itself but
the circumstances attending thereto would also be
relevant; particularly when the relationship between
the parties is in question. For the said purpose, it is
essential that all part of the deed should be read in
their entirety.
(vi) Vanchalabai Raghunath Ithape (Dead) by LR Vs.
Shankarrao Baburao Bhilare (Dead) by LRs. and Ors.:
(2013) 7 SCC 173:
CS No.8768/18 Page 29 of 72
S.P. Gupta vs. Ruchi Aggarwal
"10. ............The only question for consideration
before us and which has rightly been considered by the
first appellate court, is as to whether the transaction in
question is mortgage transaction or it is a sale
transaction with a condition of repurchase.
14. In Williams v. Owen, a similar question arose
for consideration as to whether a conveyance by the
plaintiff's father to the defendant was to be considered
as having been a mortgage as contended by the
plaintiff, or as having been a sale, with a right of
repurchase at a given date? It was held that in a
mortgage the debt subsists and a right to redeem
remains with the debtor, but a sale with the condition
of repurchase is not a lending and borrowing
arrangement; no debt subsists and no right to redeem
is reserved by the debtor, but only a personal right to
purchase. The personal right can only be enforced
strictly according to the terms of the deed and at the
time agreed upon.
16. In Vasudeo Bhikaji Joshi v. BHAU Lakshman
Ravut a Bench (comprising Sir C. Farran. Kt., C.J. and
Mr. Justice Parsons) of the High Court of Bombay
considered a similar question in which the fact was
that the plaintiffs sued to redeem an alleged mortgage
made in 1823 by their ancestor to the ancestor of the
defendant. The alleged mortgage recited a previous
mortgage under which the mortgagee Gopal Gokhale
was in possession, and it stated that a sale had been
CS No.8768/18 Page 30 of 72
S.P. Gupta vs. Ruchi Aggarwal
contemplated, but the parties could not agree as to
price, but that they had now settled it at Rs.125 and
the amount due on the mortgage at Rs.200, and that
is was agreed that if within four years the mortgagor
paid Rs.125 with interest, he should get back the land;
if not, that the land should be the absolute property of
Gokhale. On these facts, the Court held that:
"This was not a mortgage but a sale. It was an
agreement which put an end to the previously
existing mortgage. A mere stipulation for
repurchase does not make a transaction a
mortgage. To make a mortgage there must be a
debt, and here there was no debt, nor was the
property here conveyed as security."
(vii) Sanjeev Narula Vs. Tata Capital Financial Services
Ltd.:2017 (165) DRJ 539[DB],:
25. The Court now deals with the appellants'
contention with respect to the transaction being either
a mortgage by conditional sale or a sale with a
condition of repurchase, or its being an English
mortgage, with the further contention that the right
to redeem was not extinguished. The guiding
principles on this aspect are embodied in clause (c) of
section 58 of the Transfer of Property Act, 1886 (the
"TP Act") which defines "Mortgage by conditional
sale" as follows:
"(c) Mortgage by conditional sale.
Where the mortgagor ostensible sells the
CS No.8768/18 Page 31 of 72
S.P. Gupta vs. Ruchi Aggarwal
mortgaged property on condition that on default
of payment of the mortgage money on a certain
date the sale shall become absolute, or on
condition that on such payment being made the
sale shall become void, or on condition that on
such payment being made the buyer shall
transfer the property to the seller, the
transaction is called a mortgage by conditional
sale and the mortgagee a mortgagee by
conditional sale.
Provided that no such transaction shall be
deemed to be a mortgage, unless the condition is
embodied in the document which effect or
purports to effect the sale."
26. The contents of the transaction evidenced by the
deed executed between the parties largely give form to
the nature of such transaction. However,
nomenclature of the transaction - given by the parties
is always inconclusive of its true nature; it is guided
by intention of the parties entering into the
transaction; in addition to the conditions of
repurchase and the extent of a debtorcreditor
relationship between the parties, contained within
such document.
(viii) Tamboli Ramanlal Motilal (dead) by L.Rs. Vs.
Ghanchi Chimanlal Keshavlal (dead) by L.Rs. and
another:AIR 1992 SC 1236:
"16. In order to appreciate the respective contentions,
CS No.8768/18 Page 32 of 72
S.P. Gupta vs. Ruchi Aggarwal
it is necessary for us to analyse Ex.26 dated
11.12.1950. Before that, it is necessary to utter a
word of caution. Having regard to the nice distinctions
between a mortgage by conditional sale and a sale
with an option to repurchase, one should be guided by
the terms of the document alone without much help
from the case law. Of course, cases could be referred
for the purpose of interpreting a particular clause to
gather the intention. Then again, it is also settled law
that nomenclature of the document is hardly
conclusive and much important cannot be attached to
the nomenclature alone since it is the real intention
which requires to be gathered. It is from this angle we
propose to analyse the document. No doubt the
document is styled as a deed of conditional sale, but as
we have just now observed, that is not conclusive of the
matter.
17. What does the executant do under the
document? He takes a sum of Rs.5,000/ in cash. The
particulars are (a) Rs.2,499/ i.e. Rs.899/ by
mortgage of his house on 27.01.1944 and (b)
Rs.1,600/ by a further mortgage on 31.05.1947
totalling to Rs.2,499/. Thereafter, an amount of
Rs.2,501/ in cash was taken form the transferee. The
purpose was to repay miscellaneous debts and
domestic expenses and business. It has to be carefully
noted that this amount of Rs.5,000/ was not take as
a loan at all. As rightly observed by the High Court, by
executing this document the executant discharges all
CS No.8768/18 Page 33 of 72
S.P. Gupta vs. Ruchi Aggarwal
the prior debts and outstanding. Where, therefore, for
a consideration of a sum of Rs.5,000/ with the
conditional sale is executed, we are unable to see how
the relationship of the debtor and the creditor can be
forged in. In other words, by reading the documents as
a whole, we are unable to conclude that there is a debt
and the relationship between the parties is that of a
debtor and a creditor. This is a vital point to
determine the nature of the transaction.
18. The property is sold conditionally for a period of
five years and possession is handed over. At the same
time, the document proceeds to quote "therefore, you
and your heirs and legal representatives are hereafter
entitled to use, enjoy and lease the said house under
the ownership right."
It is this distinguishing point which has to be
borne in mind because an argument was levelled that
in Chunchun Jha's case, (AIR 1954 SC 345) (supra),
also there was a clause transferring possession. But in
this case the enjoyment by the transferee has to be
under the ownership right. That makes all the
difference.
19. The further clause in the document is to the
effect that the executant shall repay the amount within
the period of five years and in case he fails to repay
neither he nor his heirs or legal representatives will
have any right to take back the said properties. Here
only the right of the transferee to foreclose the
CS No.8768/18 Page 34 of 72
S.P. Gupta vs. Ruchi Aggarwal
mortgage is not spoken to. That would be so, if the
document were to be a mortgage by conditional sale.
Only in such a case the first condition spoken to under
Section 58(c) will come into play. It is well settled in
law that the right of redemption and foreclosure are
coextensive. The absence of such a right of the
mortgage could only mean that it is a conditional sale.
20. The last important clause is after the period of
five years the transferee will have a right to get the
municipal records mutated in his name and pay tax.
Thereafter, the transferee will have an absolute right
to mortgage, sell, or gift the suit property. Neither
executant nor anyone else could dispute the title. All
the above clauses are clearly consistent with the
express intention of making the transaction a
conditional sale with an option to repurchase. Ex.39
was pressed into service. But we do not think much
assistance can be derived by the appellant. That only
shows there were dealing between the parties. Further,
it also contains account relating to the betel leaves.
That has nothing to do with the suit transaction.
21. We may now turn to Chunchun Jha's case,
(1955 (1) SCR 174:AIR 1954 SC 345) (supra). Apart
from the distinguishing feature which we have pointed
out in relation to possession earlier, another
distinguishing feature is what occurs at page 180 (of
SCR):(at p.347 of AIR) of the report which is as
under:
CS No.8768/18 Page 35 of 72
S.P. Gupta vs. Ruchi Aggarwal
"The deed purports to be a sale and has the
outward form of one but at the same time it calls itself
a "conditional sale". It has, however, no clause for
retransfer and instead says (clause 6) that if the
executants pay the money within two years, the
property "Shall come in exclusive possession and
occupation of us, the executants". That is clear about
the possession but is silent about the title. In the
context we can only take these words to mean that if
there is payment within the specified time, then the
title will continue to reside in the executants; for what
else can a right of exclusive possession import in these
circumstances?"
25. Ld. Counsel for the defendant contended that in case of
mortgage by conditional sale, the suit property should have
been sold by the defendant to the plaintiff and the condition
that it shall vest in the seller in case the mortgage money was
paid within the stipulated period, should have been embodied
in the same document, which is not so in the present case. Ld.
Counsel contended that the document Ex.P5 effects a simple
mortgage but it is unregistered and therefore does not affect
any right in the suit property which is an immovable property of
value above Rs.100/. Ld. Counsel also contended that there
was no agreement to sell between plaintiff & the defendant and
CS No.8768/18 Page 36 of 72
S.P. Gupta vs. Ruchi Aggarwal
therefore the suit for specific performance could not have been
filed. It is further contended vehemently on behalf of the
defendant that the relief claimed in the present suit is barred by
limitation and the suit per se is liable to be dismissed. Ld.
Counsel for the defendant relied upon following judgments in
support of his contentions:
Legal Preposition: Prerequisites of a Mortgage by Conditional Sale
(i) Srinivasaiah Vs. H.R. Channabasappa (since
deceased) by his L.Rs. and Ors.:MANU/SC/0502/2017:
"19. The only question involved in this appeal is
what is the true nature of the document dated
28.07.1969 (Ex.P1). Is it a "mortgage by conditional
sale" or a "sale out and out with a condition to
repurchase"?
20. This question needs to be answered keeping in
view the requirement of Section 58(c) of the Trnasfer
of Property Act, 1882 (hereinafter referred to as "the
T.P. Act") and the law laid down by this Court in
Chunchun Jha v. Ebadat Ali and
Anr.:MANU/SC/0111/1954:AIR 1954 SC 345.
22. In Chunchun Jha's case (supra), this Court
examined this very question as to what constitutes "a
mortgage by conditional sale or a sale out and out
with a condition of repurchase".
CS No.8768/18 Page 37 of 72
S.P. Gupta vs. Ruchi Aggarwal
23. The learned Judge, Vivian Bose J., in his
distinctive style of writing speaking for the Bench
posed the question as under:
This is a Plaintiff's appeal in a suit for
redemption of what the plaintiff calls a
mortgage dated 15.04.1930. The only question
for determination is whether this is a mortgage
by conditional sale or a sale out and out with a
condition of repurchase. If the former the
Plaintiff succeeds. If the latter he is out of Court.
24. His Lordship then examined the question in the
context of several leading English authorities on the
subject and Section 58(c) of T.P.Act and laid down
the following test for deciding the true nature of the
document. This is what his Lordship held:
5. The question whether a given transaction
is a mortgage by conditional sale or a sale
outright with a condition of repurchase is a
vexed one which invariably gives rise to trouble
and litigation. There are numerous decisions on
the point and much industry has been expended
in some of the High Courts in collating and
analysing them. We think that is a fruitless task
because two documents are seldom expressed in
identical terms and when it is necessary to
consider the attendant circumstances the
CS No.8768/18 Page 38 of 72
S.P. Gupta vs. Ruchi Aggarwal
imponderable variables which that brings in its
train make it impossible to compare one case
with another. Each must be decided on its own
facts. But certain broad principles remain.
6. The first is that the intention of the
parties is the determining factor:see Balkishen
Das v. Legge. MANU/PR/0026/1899:22 Ind.
App. 58 (P.C.)(A). But there is nothing special
about that in this clause of cases and here, as in
every other case where a document has to be
construed, the intention must be gathered, in
the first place, from the document itself. If the
words are express and clear, effect must be given
to them and any extraneous enquiry into what
was thought or intended is ruled out. The real
question in such a case is not what the parties
intended or meant but what is the legal effect of
the words which they used. If, however, there is
ambiguity in the language employed, then it is
permissible to look to the surrounding
circumstances to determine what was intended.
As Lord Cranworth said in Alderson v. White
(1858) 44 E.R. 924 at P.928 (B)
The Rule of law on this subject is one
dictated by commonsense; that prima
facie an absolute conveyance, containing
nothing to show that the relation of
debtor and creditor is to exist between the
CS No.8768/18 Page 39 of 72
S.P. Gupta vs. Ruchi Aggarwal
parties, does not cease to be an absolute
conveyance and become a mortgage
merely because the vendor stipulates that
he shall have a right to repurchase....In
every such case the question is, what,
upon a fair construction, is the meaning
of the instruments?"
Their Lordships of the Privy Council
applied this Rule to India in Bhagwan
Sahai v. Bhagwan Din and in Jhanda
Singh v. Wahiduddin MANU / PR /0107
/ 1916:AIR 1916 P.C. 49 at p. 54 (D).
7. The converse also holds good and if, on
the face of it, an instrument clearly purports to
be a sale by reference to a host of extraneous
and irrelevant considerations. Difficulty only
arises in the border line cases where there is
ambiguity. Unfortunately, they form the bulk of
this kind of transaction.
8. Because of the welter of confusion caused
by a multitude of conflicting decisions the
legislature stepped in and amended Section
58(c) of the Transfer of Property Act.
Unfortunately that brought in its train a further
conflict of authority. But this much is now
clear. If the sale and agreement to repurchase
are embodied in separate documents, then the
CS No.8768/18 Page 40 of 72
S.P. Gupta vs. Ruchi Aggarwal
transaction cannot be a mortgage whether the
documents are contemporaneously executed or
not. But the converse does not hold good, that is
to say, the mere fact that there is only one
document does not necessarily mean that it
must be a mortgage and cannot be a sale. If the
condition of repurchase is embodied in the
document that effects or purports to effect the
sale, then it is a matter for construction which
was meant. The legislature has made a clear cut
classification and excluded transactions
embodied in more than one document from the
category of mortgage, therefore it is reasonable
to suppose that persons who, after the
amendment, choose not to use two documents,
do not intend the transaction to be a sale,
unless they displace that presumption by clear
and express words; and if the condition of
Section 58(c) are fulfilled, then we are of
opinion that the deed should be construed as a
mortgage.
25. .............when we examine the nature of
document in question (Ex.P1), we are of the opinion
that the document (Ex.P1) is a mortgage with
conditional sale as defined under Section 58 (c) of the
T.P. Act. This we say for following reasons:
26. First, it is not in dispute that the Plaintiff was
the owner of the suit land. Second, the parties
CS No.8768/18 Page 41 of 72
S.P. Gupta vs. Ruchi Aggarwal
concluded the transaction in question by executing
one document (Ex.P1). Third, the document (Ex.P1)
is styled as a "Deed of Conditional Sale". Fourth, it
contains a condition that Defendant no. 1 will be
allowed to remain in possession of the suit property
for 5 years and enjoy the fruits of the land and that
during this period, the Plaintiff will be entitled to get
the suit property reconveyed in his name on paying
Rs.1500/ by getting the sale deed executed in his
name and obtain possession of the suit land from
Defendant no. 1. Fifth, the Plaintiff offered to pay Rs.
1500/ to Defendant no. 1 with a request to resale
the land to him."
ii) Chunchun Jha Vs. Ebadat Ali and Anr.:AIR 1954
S.C. 345 (Vol. 41, C.N. 83);
iii) Patel Ravjibhai Bhulabhai (D) Thr. Lrs. Vs.
Rahemanbhai M. Shaikh (D) Thr. Lrs. and others:AIR
2016 SC 2146:
"7. At the outset we may state that issue of
limitation is not pressed before us as Article 60(a) of
Limitation Act, 1963 provides thirty years period for
filing the suit for redemption. The question before us
is that whether document Exh. 23, in its true
interpretation, is mortgage by conditional sale, as
interpreted by High Court, or the sale with option to
repurchase as held by the two courts subordinate to it.
8. Section 58 (c) of the Transfer of Property Act,
CS No.8768/18 Page 42 of 72
S.P. Gupta vs. Ruchi Aggarwal
1882 defines mortgage by conditional sale, and reads
as under:
"(c) Mortgage by conditional sale. - Where, the
mortgagor ostensibly sells the mortgaged
property -
on condition that on default of payment
of the mortgagemoney on a certain date the
sale shall become absolute, or
on condition that on such payment being
made the sale shall become void, or
on condition that on such payment being
made the buyer shall transfer the property to
the seller,
the transaction is called mortgage by
conditional sale, and the mortgagee, a
mortgagee by conditional sale:
Provided that no such transaction shall be
deemed to be a mortgage, unless the condition
is embodied in the document which effects or
purports to effect the sale."
Section 60 of the Transfer of Property Act,
1882 provides right of mortgagor to redeem the
property.
9. Distinguishing features between 'mortgage
by conditional sale' and 'sale with an option to
repurchase' are enumerated in Mulla's Transfer
of Property Act (11th Edition) as under:
"(i) In a mortgage with conditional sale,
CS No.8768/18 Page 43 of 72
S.P. Gupta vs. Ruchi Aggarwal
the relation of a debtor and a creditor subsists
while in a sale with an option of repurchase,
there is no such relationship and the parties
stand on an equal footing.
(ii) A mortgage by conditional sale is
effected by a single document, while a sale with
an option of repurchase is generally effected
with the help of two independent documents.
(iii) In a mortgage with conditional sale
the debt subsists as it is a borrowing
arrangement, while in a sale with an option of
repurchase, there is no debt but a consideration
for sale.
(iv) In a mortgage with conditional sale,
the amount of consideration is far below the
value of the property in the market but in a sale
with an option of repurchase the amount of
consideration is generally equal to or very near
to the value of the property.
(v) In a mortgage with conditional sale, since
this is a mortgage transaction, the right of
redemption subsists in favour of the mortgagor
despite the expiry of the time stipulated in the
contract for its payment. The mortgagor has the
option to redeem the mortgage and take back
the property on the payment of the mortgage
money, after the specified time, but in a sale
with an option to repurchase, the original seller
must repurchase the property within the
stipulated time period. If he commits a default
CS No.8768/18 Page 44 of 72
S.P. Gupta vs. Ruchi Aggarwal
the option of repurchase is lost."
(iv) Dal Bahadur Lama and others Vs. Smt. Ratna
Kumari Basnet:AIR 1986 Sikkim 10:
"8. Whether the transaction is essentially a
mortgage or an absolute sale with a condition for
repurchase, the Courts are required to find out the
intention of the parties at the inception of the
transaction. The original intention and meaning
determine the nature of the transaction. If the real
purpose of the transaction is to secure a debt it will be
deemed to be a mortgage rather then a conditional
sale. As the line of demarcation between a mortgage
by conditional sale and a sale with a right to
repurchase may very often be obscure, it usually is a
matter of considerable perplexity to determine to
which category the given transaction belongs. In so far
as the intention of both the parties at the execution of
the deed is a determining factor, the Courts have
formulated certain tests, by no means inflexible or
conclusive, to help in arriving at the truth.
9. The first principles for ascertaining parties'
intention as to whether an instrument is a conditional
sale or mortgage is that the Courts should look more
to the substance than to the form of the transaction. It
is not infrequent that a transaction of mortgage in
substance is disguised as one of ostensible sale. In such
a case, the grantor is not estopped from showing the
true nature of the seeming sale and the form of the
CS No.8768/18 Page 45 of 72
S.P. Gupta vs. Ruchi Aggarwal
deed is not in itself conclusive as often the form is used
as a cover, designed to veil the reality. If the
transaction of ostensible sale is a mere device or a
cloak to conceal loan secured by mortgage, the Courts
will disregard the cloak and look at the real
transaction. In other words, the Courts should not
content themselves by merely looking to the deed but
they should look through it in order to ascertain
whether the real nature of the transaction has been
disguised by giving it a form and an appearance
which is contrary to what is actually is.
10. The character of the transaction is fixed
according to what the intention of the parties was
when entering into it. It is always the parties'
intention which stamps the transaction infallibly as a
mortgage or a sale. If more than one instrument is
executed contemporaneously, then the intention of the
parties will be gathered by reading all the instruments
together as they will be deemed to constitute one
transaction."
Legal Preposition: Effect of NonRegistration
(v) Mhadagonda Ramgonda Patil and others Vs.
Shripal Balwant Rainade and others:AIR 1988 SC
1200:
"11. Section 60 of the Transfer of Property Act
confers a right of redemption on the mortgagor. The
proviso to section 60 reads as follows:
CS No.8768/18 Page 46 of 72
S.P. Gupta vs. Ruchi Aggarwal
"Provided that the right conferred by this section has
not been extinguished by the act of the parties or by
decree of a Court."
11A. It is thus manifestly clear that the right of
redemption will be extinguished (1) by the act of the
parties, or (2) by the decree of Court. We are not
concerned with the question of extinguishment of the
right of redemption by the act of the parties. The
question is whether by the preliminary decree or final
decree passed in the earlier suit, the right of the
respondent to redeem the mortgages has been
extinguished. The decree that is referred to in the proviso to Section 60 of the Transfer of Property Act is a final decree in a suit for foreclosure, as provided in subrule (2) of Rule 3 of Order XXXIV and a final decree in a redemption suit as provided in Order XXXIV, Rule 8(3)(a) of the Code of Civil Procedure. Subrule (2) of Rule 3, inter alia, provides that where payment in accordance with subrule (1) has not been made, the court shall, on an application made by the plaintiff in this behalf, pass a final decree declaring that the defendant and all persons claiming through or under him are debarred from all right to redeem the mortgaged property and also, if necessary, ordering the defendant to put the plaintiff in possession of the property. Thus, in a final decree in a suit for foreclosure, on the failure of the defendant to pay all amounts due, the extinguishment of the right CS No.8768/18 Page 47 of 72 S.P. Gupta vs. Ruchi Aggarwal of redemption has to be specifically declared. Again, in a final decree in a suit for redemption of mortgage by conditional sale or for redemption of an anomalous mortgage, the extinguishment of the right of redemption has to be specifically declared, as provided in clause (a) of subrule (3) of Rule 8 of Order XXXIV of the Code of Civil Procedure. These are the two circumstances - (1) a final decree in a suit for foreclosure under Order XXXIV, Rule 3(2); and (2) a final decree in a suit for redemption under Order XXXIV, Rule 8(3)(a) of the Code of Civil Procedure - when the right of redemption is extinguished.
(vi) K.B. Saha and Sons Private Limited Vs. Development Consultant Limited:(2008) 8 SCC 564: "34. ........5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it is as a collateral purpose."
Legal Preposition: Effects of Expiry of Limitation
(vii) Lachhman Singh (Deceased) Through LRs & Ors. Vs. Hazara Singh (Deceased) Through LRs & Ors.:
(2008) 5 SCC 444: "13. ......Limitation is a question of jurisdiction.
Section 3 of the Limitation Act puts an embargo on the Court to entertain a suit if it is found to be barred CS No.8768/18 Page 48 of 72 S.P. Gupta vs. Ruchi Aggarwal by limitation."
26. Written arguments were also filed by the plaintiff on 24.12.2018 which have been perused.
Findings
27. I have considered the rival contentions and perused the record carefully.
28. My issue wise findings are as below: Issue no. (iii): Whether there was any oral agreement to sell between the plaintiff and the defendant in respect of ground floor, rear portion of flat no. F3, NDSEII, New Delhi? OPP and Issue no. (iv): What is the nature and effect of document dated 14 th May 1998 and whether any right accrues in favour of the plaintiff on the basis of the said document? OPP and Issue no. (v): Whether document dated 14th May, 1998 is under CS No.8768/18 Page 49 of 72 S.P. Gupta vs. Ruchi Aggarwal stamped or requires registration and effect thereof? (Onus on both parties)
29. Issue no. (iii), (iv) and (v) are taken up first and together because these issues are interconnected and other issues are dependent upon the decision qua these issues.
30. The issue no. (iv) mainly pertains to the nature and effect of the document dated 14.05.1998 which is Ex.P5. In order to understand the nature and effect of this document, it is necessary that the contents of Ex.P5 are reproduced herein: Contents of Ex.P5 "I, Ruchi Agarwal wife of Sh. Rakesh Agarwal aged 40 years, R/o A5, Gulmohar Park, New Delhi had mortgaged my property bearing House No. F3, NDSEII (Flat consisting of 2 bed rooms, drawing, dining & open area) on Ground Floor in consideration against receipt Rs.5,00,000/ (Rupees five lacs only) in favour of Sh. S.P. Gupta S/o Sh. V.P. Gupta whom earlier I had inducted in the premises in question as a tenant and as such now he has dual capacity, i.e. one as of the tenant and secondly as of a Mortgagee.
2. That the mortgage is without any possession as the possession of the premises in question had already been with the Mortgagee as a tenant. I had mortgaged CS No.8768/18 Page 50 of 72 S.P. Gupta vs. Ruchi Aggarwal the property in question by a simple mortgage for a period of six years running from Jan.93 with the stipulation that the entire amount of mortgage money would be repaid alongwith interest @1% per annum by the lapse of period of six years, otherwise thereafter mortgagee will have the right to sell the property/premises to procure its mortgage money. In case I pay the said amount alongwith the agreed rate of interest @1% per annum, the mortgagee shall not be entitled to sell the property/premises in question. The mortgage has been conditional that on the default of payment of the mortgage money within a period of six years i.e. latest by March, 1999, the sale shall become absolute in case of nonpayment by that time. If the amount is paid within time, the sale become void.
The document has been executed by me of my free will and volition, there being no pressure or coercion on me to keep the record and relations straight.
IN WITNESSES WHEREOF I have put my hand on this document on this 14th day of May, 1998.
Witnesses:
1. EXECUTANT 2.
31. Plaintiff has filed this suit for specific performance averring that there was an oral agreement to sell between CS No.8768/18 Page 51 of 72 S.P. Gupta vs. Ruchi Aggarwal plaintiff and defendant with respect to the suit property because when the plaintiff had advanced loan of Rs.5 lacs to the defendant, she had agreed to sell the property to the plaintiff in case she was unable to return the loan amount within six years.
The plaintiff also states that this understanding was incorporated in the document Ex.P5 on 14.05.1998.
32. Defendant has denied that there was any such understanding or that any loan amount in the sum of Rs. 5 lacs was borrowed by her or she ever executed the document Ex.P5. However, during her examination under Order X CPC by the Hon'ble High Court of Delhi, defendant admitted her signature on Ex.P5 as well as on rent receipts Mark B to Mark E. When she was questioned why Ex.P5 was signed by her, she stated that her signatures were obtained on blank stamp papers. She was uncomfortable while answering this as is recorded by the Hon'ble High Court while noting her demeanour. She admitted that there were no business relations between the plaintiff and her husband, and could not explain why the plaintiff would then visit her husband at his business place frequently that could have occasioned removal of the blank stamp papers by CS No.8768/18 Page 52 of 72 S.P. Gupta vs. Ruchi Aggarwal him. The defendant also admitted that no complaint was lodged by her with respect to the alleged misuse of the stamp papers by the plaintiff. This conduct of the defendant is unnatural. She further could not explain the purpose for which, and the period when, she handed over blank signed stamp papers to her husband. All this suggest on balance of probability that the document Ex.P5 was executed by her.
33. Now, in order to appreciate the nature and effect of the document Ex.P5, it is necessary to understand what the document provides for. As is clear from the contents of Ex.P5 in para no. 1, it mentions that the defendant had taken a loan of Rs. 5 lacs from the plaintiff. So, the document reflects that there is a relationship of debtor and creditor between the plaintiff and defendant.
34. The document Ex.P5 further reflects that when a sum of Rs.5 lacs was borrowed by the defendant from the plaintiff, she had simultaneously inducted the plaintiff as tenant in the suit property. She also agreed to mortgage the suit property to the plaintiff 'without any possession' for a period of six years. This CS No.8768/18 Page 53 of 72 S.P. Gupta vs. Ruchi Aggarwal reflects that the plaintiff occupied the suit property as a tenant and not as a mortgagee because mortgage was without possession as is specifically recorded in the first line of second para of Ex.P5.
35. Ex.P5 also notes that if the money is not repaid within six years, plaintiff shall have the right to sell the suit property to procure the mortgage money, and if money is repaid, plaintiff would have no right to sell the property. This essentially recognizes the right of redemption & foreclosure.
36. It is thus clear from a reading of para no. 1 and initial portion of para no. 2 (which is put in bold with underline) of Ex.P5 that the defendant had agreed to mortgage the suit property to the plaintiff for securing payment of the sum of Rs.5 lacs borrowed by her, without delivering possession, and plaintiff was permitted to reside in the suit property as a tenant. The document thus reflects a simple mortgage of the suit property. The term mortgage and simple mortgage are defined in Section 58(a) and (b) of the Transfer of Property Act, 1882 that reads as below: CS No.8768/18 Page 54 of 72 S.P. Gupta vs. Ruchi Aggarwal "58. "Mortgage", "mortgagor", "mortgagee", "mortgagemoney" and "mortgagedeed" defined. - (a) A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgage, the transferee a mortgagee, the principal money and the interest of which payment is secured for the time being are called the mortgagemoney, and the instrument (if any) by which the transfer is effected is called a mortgagedeed.
(b) Simple mortgage. - Where without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgagemoney, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgagemoney, the transaction is called a simple mortgage and the mortgagee a simple mortgagee."
37. Contention raised on behalf of plaintiff is that there was an oral understanding between him and defendant to the effect that the suit property shall be sold to the Plaintiff in case defendant was unable to return the loan amount of Rs.5 lacs by March, 1999. This understanding is contrary to the document CS No.8768/18 Page 55 of 72 S.P. Gupta vs. Ruchi Aggarwal Ex.P5 which clearly states that plaintiff was given right to sell the suit property only for realizing the borrowed sum. It essentially means that in the eventuality of sale of suit property, in case a sum more than the due loan amount is fetched, defendant shall be entitled for the balance amount. This right of defendant however shall get effected, in case suit property was to be sold to the plaintiff against loan amount as consideration. So, the oral understanding alleged by the plaintiff and contents of document Ex.P5 regarding sale of the suit property are contrary to each other & cannot coexist. It is the settled law that no oral evidence can be led with respect to any term which shall be contrary to the terms of a document proved on record, as laid down in Section 91 & 92 of the Indian Evidence Act, 1872. The plaintiff is thus barred from proving any oral understanding qua the suit property which is contrary to the terms of Ex.P5. Section 91 & 92 of the Indian Evidence Act, 1872 are quoted hereinbelow: "91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of documents.
- When the terms of contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter CS No.8768/18 Page 56 of 72 S.P. Gupta vs. Ruchi Aggarwal is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained.
Exception 1. - When a public officer is required by law to be appointed in writing, and when it is shown that any particular person had acted as such officer, the writing by which he is appointed need not be proved.
Exception 2. - Where there are more originals than one, one original only need be proved.
Exception 3. - The statement, in any document whatever, of a fact other than the facts referred to in this section, shall not preclude the admission of oral evidence as to the same fact.
92. Exclusion of Evidence of oral agreement. - When the terms of any such contract, grant of other disposition of property, or any matter required by law to be reduced to the form of a document have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives an interest, for the purpose of contradicting, verying, adding to, or subtracting from, its terms:
Proviso (1). - Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want CS No.8768/18 Page 57 of 72 S.P. Gupta vs. Ruchi Aggarwal of capacity in any contracting party want of failure of consideration, or mistake in fact or law:
Proviso (2). - The existence of any separate oral agreement, as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document:
Proviso (3). - The existence of any separate oral agreement, constituting a condition precedent to the attaining of any obligation under any such contract, grant of disposition of property, maybe proved:
Proviso (4). - The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents:
Proviso (5). - Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of any description, may be proved:
Proviso (6). - Any fact may be proved which shows in what manner the language of a document is related to existing facts."
38. The later portion of para no. 2 of Ex.P5 (which is put in bold) reflects that mortgage is conditional and on default of CS No.8768/18 Page 58 of 72 S.P. Gupta vs. Ruchi Aggarwal payment of loan amount, the sale shall become absolute. If amount is paid in time, sale shall be void. The contents of this portion are picked up from Section 58(c) of the Transfer of Property Act, 1882, that reads as below: "(c) Mortgage by conditional sale. - Where, the mortagor ostensibly sells the mortgaged property -
On condition that on default of payment of the mortgagemoney on a certain date the sale shall become absolute, or On condition that on such payment being made the sale shall become void, or On condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:
Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale."
39. It is clear on reading of Section 58(c) of the Transfer of Property Act, 1882, that for a mortgage by conditional sale, the prerequisit is an ostensible sale of the property between the mortgagor and mortgagee. Admittedly, no sale transaction occurred in the present case between the plaintiff and the defendant, because there is no sale deed in existence. Hence, CS No.8768/18 Page 59 of 72 S.P. Gupta vs. Ruchi Aggarwal even though the contents laid down in Section 58 (c) of the Transfer of Property Act, 1882 are found mentioned in Ex.P5, the transaction cannot be called a 'Mortgage by Conditional Sale' because there was no sale of the suit property by the defendant in favour of the plaintiff.
40. Ld. Counsel for the plaintiff contended that the above referred second portion of para no. 2 of Ex.P5 reflects that there was an agreement between the parties to sell the suit property to the plaintiff in case loan was not repaid within the agreed time i.e. by March, 1999. No such intention is however reflected in the document Ex.P5 which merely refers to the sale of the suit property for realising the mortgage money and does not refer to any intended future sale between the plaintiff and defendant. The contention raised by Ld. Counsel for the plaintiff is therefore without basis.
41. Ld. counsels for the either parties relied upon various judgments which draw distinction between a 'Mortgage by Conditional Sale' and 'Sale with Right to Repurchase'. These CS No.8768/18 Page 60 of 72 S.P. Gupta vs. Ruchi Aggarwal judgments are already quoted in foregoing paragraphs. It has been held by the Hon'ble Higher Courts in the cases referred above that in mortgage, a relationship of debtor and creditor exists between the mortgagor and mortgagee. Foreclosure and redemption are the two statutory rights available to a mortgagor & mortgagee which don't exist in case of a 'Sale with Right to Repurchase' in case of a mortgage.
42. In the present case, Ex.P5 clearly reflects that there was a relationship of Debtor and Creditor between plaintiff and the defendant. The document Ex.P5 also provides for right of foreclosure of the plaintiff when it states that the mortgagee i.e. plaintiff will have the right to sell the suit property to procure mortgage money. It also provides that mortgagee shall not be entitled to sell the suit property in case mortgage money was returned in time. Since the document Ex.P5 reflects relationship of debtor & creditor between the plaintiff & defendant and provides for right of foreclosure & redemption, the irresistible conclusion is that Ex.P5 is a mortgage deed, creating simple mortgage in favour of plaintiff and against the CS No.8768/18 Page 61 of 72 S.P. Gupta vs. Ruchi Aggarwal defendant. Ex.P5 is not a mortgage by conditional sale because admittedly there was no ostensible sale of the suit property to the plaintiff. Ex.P5 also does not contain any agreement to sell between plaintiff & defendant, and rather provides for sale to realize mortgage amount which condition is contrary to the alleged oral agreement to sell the suit property to the plaintiff against loan amount as consideration and thus no such oral agreement can be proved by the plaintiff.
43. Section 59 of the Transfer of Property Act, 1882, provides that a mortgage can be effected only by way of a registered instrument. The Section reads as below: "59. Mortgage when to be by assurance. - Where the principal money secured is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of title deed can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.
Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by a registered instrument signed and attested as aforesaid or except in the case of a simple mortgage by delivery of the property."
CS No.8768/18 Page 62 of 7244. It is clear on reading of Section 59 of the Transfer of Property Act, 1882 that a mortgage can be effected only by way of a registered document. Now, in case the document is unregistered, it shall not affect any immovable property. Hence, mortgagee cannot proceed against the property claiming right of foreclosure in case the mortage deed is unregistered. The document Ex.P5 is admittedly unregistered and thus cannot be considered except for the purpose allowed by Section 49 of the Registration Act, 1908, that reads as under: "49. Effect of nonregistration of documents required to be registered. - No document required by section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 CS No.8768/18 Page 63 of 72 S.P. Gupta vs. Ruchi Aggarwal (3 of 1877), or as evidence of any collateral transaction not required to be effected by registered instrument."
45. The document Ex.P5, in view of Section 49 of the Registration Act, 1908, can be read as evidence of a collateral transaction which does not require registration and not for the purpose of granting any rights in immovable property. In a nutshell, the document Ex.P5 cannot be used to enforce mortgage over the suit property.
46. Ld. Counsel for the plaintiff contended that plaintiff was placing reliance upon Ex.P5 as evidence of a contract of which specific performance is sought in the suit. The contention, I am afraid, is fallacious. Plaintiff is seeking specific performance of an agreement to sell. There is however nothing in Ex.P5 which reflects that there ever was an agreement to sell between the plaintiff & defendant. It rather is the case of plaintiff that there was an oral agreement to sell between him & defendant. If that is so, where is the question of placing reliance on Ex.P5 as evidence of a contract.CS No.8768/18 Page 64 of 72
47. Ex.P5 can certainly be used as evidence of a collateral transaction which does not require registration. The document Ex.P5 not only reflects 'simple mortgage' but also a loan transaction which is collateral to mortgage & does not require registration. Ex.P5 reflects that the defendant had borrowed a sum of Rs. 5 lacs from the plaintiff against interest @1% per annum and the suit property was given by her on rent to the plaintiff. The rent receipts Mark B to Mark E, were denied by the defendant, initially. She admitted her signatures late and could not explain satisfactorily why these receipts were issued by her to the plaintiff.
48. The plaintiff has averred in the plaint that loan was taken with interest @1% per annum. Ex.P5 however shows that the rate of interest was @1% per annum. Since Ex.P5 is a written document, its contents shall prevail over any oral testimony qua rate of interest. Plaintiff did not prove anything on record to suggest that on having noticed that rate of interest was incorrectly reflected in the document Ex.P5, he ever made any attempt to communicate the same to the plaintiff and amend CS No.8768/18 Page 65 of 72 S.P. Gupta vs. Ruchi Aggarwal the rate of interest. It is clearly reflected from the material on record that the defendant had borrowed a sum of Rs.5 lacs from the plaintiff against interest @1% per annum and had mortgaged the suit property. Since mortgage creates a right in the immovable property, which is the suit property and the document Ex.P5 is unregistered, the mortgage cannot be given effect to but the document Ex.P5 can be used as an evidence of loan transaction. It is also clearly established that there was no oral agreement to sell the suit property between plaintiff & the defendant.
49. In view of the discussion above, Issue no. (iii) is answered in favour of the defendant to the effect that there was no oral agreement to sell the suit property between the plaintiff and defendant. Issue no. (iv) & (v) are also partly answered in favour of defendant to the effect that document dated 14.05.1998 (Ex.P5) is a mortgage deed creating simple mortgage over the suit property and thus it required registration under Section 59 of Transfer of Property Act, 1882. Since the document is unregistered, no right in favour of plaintiff is CS No.8768/18 Page 66 of 72 S.P. Gupta vs. Ruchi Aggarwal created in the suit property as a mortgagee. The document Ex.P 5 can however be used as an evidence of the loan transaction between the plaintiff and the defendant.
Issue no.(ii): Whether this Court does not have pecuniary jurisdiction to try the present suit? OPD
50. Onus to prove issue no. (ii) was upon the defendant.
However, during hearing on 06.11.2017, Ld. Counsel for the defendant submitted that he shall not press decision qua issue no. 2. Since issue no. (ii) was voluntarily abandoned by the defendant, same is not being decided herein.
Issue no.(vi): Whether the plaintiff is entitled to decree of specific performance in respect of ground floor, rear portion of Flat no. F3, N.D.S.E. Part II, New Delhi? OPP Issue no.(vii): Whether the plaintiff is entitled to decree of declaration as prayed for in prayer B? OPP and Issue no. (viii): Whether the plaintiff is entitled to permanent injunction as prayed for in prayer C? OPP CS No.8768/18 Page 67 of 72 S.P. Gupta vs. Ruchi Aggarwal
51. Onus to prove issue no. (vi), (vii) and (viii) was upon the plaintiff. Plaintiff, in order to be entitled for specific performance, or for declaration regarding his ownership and permanent injunction to protect his possession, was bound to show that he has some right in the suit property. It is already held that document Ex.P5, on the basis of which plaintiff is claiming right over the suit property, being unregistered, does not affect the suit property at all. It is also held already that there was no oral agreement to sell the suit property between the plaintiff and the defendant. Hence, the plaintiff has no right in the suit property.
52. It is the specific case of the plaintiff himself that he stopped paying rent to the defendant in March, 1999. Tenancy in the suit property therefore ended in March, 1999, and plaintiff occupied the suit property since then merely because he was permitted to occupy it by the defendant. The status of plaintiff as on date is therefore merely that of a permissive occupant without any right, title or interest in the suit property.
CS No.8768/18 Page 68 of 72S.P. Gupta vs. Ruchi Aggarwal The plaintiff thus is occupying the suit property without any legal right and is not entitled for relief of specific performance, declaration and permanent injunction.
53. Issue no. (vi), (vii) & (viii) are accordingly decided against the plaintiff and in favour of the defendant.
Issue no. (ix): Whether the plaintiff is entitled to decree of recovery of Rs.40,00,000/or for any amount, in case prayer for decree of specific performance is refused? OPP and Issue no. (x): If issue nos. 3 and 9 are decided in favour of the plaintiff, whether the plaintiff is entitled to interest on the amount awarded? If so, at what rate and for which period? OPP"
54. Onus to prove issue no. (ix) and (x) was upon the plaintiff. Plaintiff is seeking recovery of Rs.40 lacs, in alternative to the relief of specific performance and Rs.10 lacs towards damages and compensation with interest. It is already held that the plaintiff is not entitled for specific performance because CS No.8768/18 Page 69 of 72 S.P. Gupta vs. Ruchi Aggarwal there was no agreement to sell between him and the defendant. Hence, no question of recovery of damages or compensation arises.
55. So far recovery of Rs.40 lacs is concerned, there is no averment in the entire suit which forms the basis to claim Rs. 40 lacs. Plaintiff has only been able to prove that he lent a sum of Rs.5 lacs to the defendant. Plaintiff is thus entitled to recover only this amount of Rs. 5 lacs from the defendant.
56. The rate of interest against the loan amount of Rs.5 lacs is already specified in Ex.P5. Since interest rate is already agreed, plaintiff is entitled for interest at the agreed rate only i.e. 1% per annum as specified in Ex.P5.
57. Issue no. (ix) and (x) are accordingly decided partly in favour of the plaintiff.
Issue no. (i): Whether the suit is barred by limitation? OPD CS No.8768/18 Page 70 of 72 S.P. Gupta vs. Ruchi Aggarwal
58. Onus to prove issue no. (i) was upon the defendant. The instant suit is for specific performance and recovery based upon document Ex.P5.
59. It is clear from a reading of the document Ex.P5 that the loan amount was to be repaid by defendant to the plaintiff by March, 1999. A suit for recovery can be filed within three years from the date cause of action arose, i.e. when the loan became due, as per Article 113 of the Limitation Act, 1963. The loan became due in March, 1999 and limitation period accordingly started from 01.04.1999.
60. The suit for specific performance also can be filed within three years from the date fixed for performance, as laid down in Article 54 of the Limitation Act, 1963. If case of the plaintiff is taken to be correct, the specific performance as per plaint became due in March, 1999 and suit thus should have been filed within three years from 01.04.1999.
CS No.8768/18 Page 71 of 7261. The instant suit was filed in the year 2007 i.e. much after the lapse of period of three years and thus is barred by limitation. Issue no. (i) is accordingly decided in favour of the defendant and against the plaintiff.
Relief
62. In view of findings qua issue no. (i), (iii), (iv), (v), (vi),
(vii) and (viii), the suit is dismissed.
63. No orders as to Costs.
64. Decree sheet be prepared accordingly.
Digitally signed by
65. File be consigned to Record Room. JYOTI JYOTI KLER Date:
KLER 2019.05.22
16:18:04
+0530
Announced in the open (JYOTI KLER)
Court on 04.05.2019 ADJ05 (SOUTH DISTRICT)
(Judgment contains 72 pages) SAKET COURTS, NEW DELHI CS No.8768/18 Page 72 of 72