Delhi High Court
Durga Nath Sharma And Anr. vs Shyam Shanker Goela on 4 September, 2001
Equivalent citations: 95(2002)DLT545, 2002(61)DRJ848
Author: Mukul Mudgal
Bench: Mukul Mudgal
JUDGMENT Devinder Gupta, J.
1. Defendants have filed this Regular First Appeal under Section 96 of the Code of Civil Procedure against the judgment and decree passed by Shri R.K. Sain, Additional District Judge, Delhi in Civil Suit No. 129/80 decreeing the suit of plaintiff/respondent and thereby granting a decree for specific performance of agreement to sell directing defendant/appellant to execute necessary sale deed within a period of two months during which period the defendants were asked to take necessary steps for completing necessary formalities towards execution of sale.
2. Facts in brief are that on 12.12.1979 plaintiff filed the suit claiming decree for specific performance of agreement to sell dated 24.3.197, inter alia, alleging that Delhi Development Authority had granted a lease of a big plot of land in favor of New Friends Co-operative House Building Society and the Society had granted sub lease in favor of its members. Durga Nath Sharma, defendant No. 1 being one of the members of the Society was granted a sub lease with respect of plot No. 334 measuring 524 sq. yards under sub lease dated 2.7.1974. The said defendant with a view to sell the said plot entered into an agreement with plaintiff on 24.3.1978 at a fixed price of Rs. 85,000/-. A sum of Rs. 8,500/- was received towards part payment of the price, the balance was payable within 15 days after receipt of approval of building plan by Delhi Development Authority. The said defendant also agreed to execute necessary documents in favor of the plaintiff such as, (a) construction agreement, (b) General and special power of attorney, (c) Will, (d) Agreement to sell and (e) any other necessary document. These documents were to be executed by the defendant in order to avoid possibility of complication in transfer of the plot to the plaintiff, although the intention of defendant No. 1 was to sell the plot to the plaintiff for which necessary deal was struck. The plaintiff further alleged that he got a building plan prepared from an architect, to suit his requirements, which was sent Along with draft of the other documents with a covering letter dated 17.5.1978 to the defendant. More documents were sent with another letter of the same date for signatures of defendant No. 1. Both the letters were sent under registered cover and were duly received by the defendant but no reply was received. On 17.8.1978 another letter under registered cover was sent to the defendant, which though received was not replied to by the defendant. The plaintiff further alleged that the defendant appears to have changed his mind later on and in an attempt to wriggle out of the deal had fraudulently transferred the plot by way of gift in favor of his son (defendant No. 2)/appellant No. 2, which the plaintiff alleged was not binding on him and for that reason appellant No. 2 was imp leaded in the suit. it is further alleged that on 289.8.1978 defendant No. 1 wrote a letter to the plaintiff cancelling the agreement to sell and returned the amount by cheque of Rs. 8,510/-, which included bank collection charges. Since defendant No. 1 could not have unilaterally cancelled the agreement, which still subsisted, the plaintiff declined to accept the cheque and did not encash it. The plaintiff had always been ready and willing to perform his part of the contract and is still ready and willing to purchase the plot on payment of the balance price but defendant No. 1 had unilaterally backed out. Therefore, plaintiff was left with no option except to send a notice on 17.8.1978 calling upon defendants to execute necessary sale deed. No steps were taken by the defendants, therefore, the suit was filed.
3. The defendants contested the suit by filing a joint written statement alleging that the suit was false and frivolous based upon incorrect allegations. Defendant No. 1 never agreed to sell his plot to the plaintiff. The plot was not saleable and even if there was an agreement to sell, the same was void since there was no contract to sell the said plot, transfer of which was prohibited under Clause II, Sub-clause (6)(a) and 6(b) of the lease deed executed between President of India and the New Friends Co-operative House Building Society and of the sub lease executed between the Society and the defendant. The defendant gave his own explanation about the receipt of the amount and of the nature of transaction with the plaintiff stating that at one point of time the defendant was interested in sale of the plot, if he could get a reasonable price and in case there was no legal implication, for which purpose he contacted Pandit Brothers Estate Agency, Lajpat Nagar, a broker. When on his visit from Jamshedpur to Delhi he consulted the Society officials and was informed that he could not sell, transfer or mortgage the plot, therefore there was no question of sale of plot. At that time the defendant thought of constructing a house on the plot. Since he was residing at Jamshedpur the said broker informed him that he could get the services of a building contractor, who could construct the building. The plaintiff agreed to construct a house on the plot according to the plan sanctioned by the authorities in favor of defendant No. 1. The plaintiff asked defendant No. 1 to execute an agreement for building construction. The plaintiff also deposited with defendant No. 1 a sum of Rs. 8,500/- as part security for carrying out the construction, as per the desire of the defendant within the stipulated time. The plaintiff promised to send draft of the agreement. Some rough drafts were sent by the plaintiff in May, 1978, which were not acceptable to defendant, therefore, he wrote back to plaintiff that he was not prepared to accept the same. Defendant No. 1 further alleged that he came to Delhi with a draft of Rs. 8,500/-. The plaintiff refused to accept the same. It was specifically pleaded that the defendant never agreed to sell or transfer or convey the plot. There was a complete prohibition in a sub lease to transfer the plot to anybody, who was not a member of the Society. Therefore, the suit was liable to be dismissed. The defendant denied the allegations of plaintiff that there was an agreement to sell or that he ever agreed to sell the plot. He stated that bona fide and in good faith he made an application to the Delhi Development Authority for permission to gift the plot to his son, defendant No. 2 and accordingly after obtaining necessary a permission gift deed dated 18.7.1978 was executed, which was accepted by the donee and possession of the plot had also been handed over to defendant No. 2.
4. The plaintiff filed replication denying the defendants' version. Learned trial court framed the following issues:-
1. Whether defendant No. 1 on 24.3.78 agreed to sell the plot in dispute to the plaintiff at Rs. 85,000/0?
2. If issue No. 1 is proved, whether this agreement of sale is void bring not permissible by law? OPD
3. if issue No. 2 is not proved in favor of the defendant whether the plaintiff was ready and willing to perform his part of the contract?
4. Whether Rs. 85000/- were received by defendant No. 1 as a security for carrying out the construction on the plot in dispute by the plaintiff on behalf of defendant No. 1 as alleged in para 4 of the written statement? OPD
5. Whether defendant No. 2 is not bound by any agreement to sell in between the plaintiff and defendant No. 1, if issue No. 1 is proved? OPD-2
6. Relief.
5. Parties produced oral and documentary evidence. Learned trial court decide issues 1 and 4 together holding that defendant No. 1 on 24.3.1978 had agreed to sell the plot in dispute to the plaintiff for Rs. 85,000/- out of which a sum of Rs. 8,500/- was received by defendant No. 1 as earnest money. Plea of defendant that the deal between him and the plaintiff was with respect to construction of house was held to be patently an after thought, since no such plea was raised by him till reply was sent to the notice of the plaintiff. Even such a plea was not tenable since there was no question of the defendant agreeing to execute Will, General power of attorney, special power of attorney and agreement to sell etc. had it been a building contract. Issue No. 2 was decided against the defendants holding that despite the two clauses in the sub lease deeds the agreements to sell was not void, since sale is permissible for which only permission has to be granted by the concerned authorities. Issue No. 3 was decided in favor of the plaintiff holding that he was always ready and willing to perform his part of contract and had in fact performed his part of contract but it was the defendant who was not ready and willing to perform his part of contract. Issue No. 5 was decided against defendant N. 2. In view of these findings learned trial court decreed the suit calling upon the defendants to execute necessary sale deed in favor of the plaintiff.
6. Learned counsel for the parties were heard who took us through the entire oral and documentary evidence. It was vehemently contended by Sh. L.R. Gupta, learned Sr. Advocate appearing for the defendant/appellants that there was no agreement to sell, therefore, there was no question of specific performance of the same as pleaded in the plaint. There was variance in pleading and proof. Evidence had been led with respect to an oral agreement to sell dated 11-13.3.78, which had not been pleaded. Even assuming that on 24.3.1978 the alleged agreement was entered into, which according to the plaintiff is evidenced by receipt Ex.P-1, at best it can be said to be only an agreement to sell. Ex facie by the said receipt, the defendant agreed to execute documents, namely, construction agreement, Will, General power of attorney, special power of attorney, affidavits, agreement to sell and any other relevant documents. No specific performance of such an agreement could be granted since the defendant could not be specifically directed to enter into a construction agreement or to execute an agreement to sell. At the most on the basis of receipt Ex.P-1 decree could be passed in favor of the plaintiff only to execute necessary documents as are specified in receipt Ex.P-1, which would be of no consequence. Learned counsel for the appellant also urged that there was no evidence adduced by the plaintiff of his readiness and willingness and the fact that he was at all relevant points ready and willing to perform his part of contract. He further contended that decree for specific performance is a discretionary relief and in order to grant such a relief it was necessary to take into consideration an important aspect of comparative hardship likely to be caused to the defendant being more in comparison to the plaintiff. The plaintiff is alleged to have paid a paltry sum of Rs. 8,500/- and that also 23 years ago. The balance was agreed to be paid later. It is urged by learned counsel for the defendants that prices of the property have increased manifold. The defendants would e deprived of the plot of land for a paltry sum of money thereby comparative hardship to be suffered by the defendants would be ore than the plaintiff, who could have purchased any other property in Delhi, after the defendants had lawfully rescinded the contract of entering into a construction agreement with the plaintiff. It was further urged by learned counsel for the defendants that for the alleged oral agreement.], alleged to have been arrived at between 11-13.3.1978, no terms are spelt out in the plaint. Therefore, it was an unenforceable agreement of which specific performance could not be ordered. Learned counsel further urged that since sub lease prohibited transfer of the plot to a non member, the DDA cannot be asked, in as suit for specific performance of a contract to sell, to grant its consent for transfer of plot to a non member. This clause in the lease being statutory in nature is also hit by public policy and such a contract being void under Section 23 of the contract Act, suit ought to have been dismissed.
7. Shri Ishwar Sahai, learned Senior Advocate appearing for the plaintiff urged that on an entire reading of the plaint it would become clear that though negotiations took place earlier but it was on 24.3.1978 that final deal was struck when Rs. 8,500/- was paid. It was an agreement to sell lease hold rights for which defendant agreed to execute the usual documents, which are executed in such like transaction in Delhi. It was a single transaction for which negotiations took place and culminated in executing the receipt dated 24.3.1978. There was no variance between pleading and proof. There is unrebutted evidence led by the plaintiff that he had been ready and willing to perform his part of the contract at all material points. He urged the agreement was not void and there was no prohibition for entering into an agreement to sell even lease hold rights. The only direction which the Court would be required to give would be to call upon the defendants to apply for sanction and on their failure even the plaintiff on their behalf can be permitted to apply for the requisite approval/sanction. Only on sanction being accorded by the Society decree for specific performance would become executable. However, there is no legal bar in passing a decree for specific performance.
8. Learned trial court took pains in minutely examining oral and documentary evidence. Since it was urged before us that there was no valid agreement it will be necessary for us also to deal with the manner in which parties entered into negotiations and the circumstances under which receipt Ex.P-1 was executed.
9. It is an admitted fact that though the Society had allotted the plot to defendant No. 1 in 1974 for which lease deed was executed on 2.7.1974, the plot was not built upon by defendant No. 1 till 1978. It is also admitted that he was interested to sell the plot provided he could get a reasonable price. The defendant No. 1 was also not residing in Delhi. he was posted at jamshedpur. Ex.P-4 is a letter dated 27.9.1977 addressed by him to the property dealer, Pandit Brothers saying that he was interested in sale, if the value received is reasonable and there are no legal implications for him and for his children in future. Ex.P-5 is another letter dated 16.10.1977 by which the defendant asked by property dealer that on permission being granted by the DDA, the buyer shall have to pay 50% of difference between the original purchase price and the market value. Ex.P-6 is letter dated 10.1.1978 by defendant No. 1 to the same property dealer by which the defendant informed the property dealer that the price offered was on lower side and it was very difficult for him to get a big plot. He also appears to have asked that how much amount the prospective buyer would pay by way of draft. Ex.P-7 is another letter dated 1.2.1978 by defendant No. 1 to the broker stating that in his previous letter he had asked for a little more than what was offered by the prospective purchaser and form the said letter it appears that the defendant expected a price between 150 to 160. It was stated by him that he was going to Ambala in connection with a marriage, therefore, deal should be finally struck. Again on 9.2.1978 letter Ex.P-8 was sent by defendant No. 1 to the property dealer informing that he would be available on 19th, 20th and 21st in Delhi before proceeding to Ambala, therefore, he should have the last offer readily available. Ex.P-9 is letter dated 24.2.1978 from defendant to the property dealer that he would be in Delhi in first week of March or by 4th of March and would be bringing all necessary papers with him.
10. The above documents, which are admitted, would suggest that defendant No. 1 was aware of the fact that there was an embargo in the lease deed that transfer could not take place without permission. It appears that he was also aware of the fact that permission, if accorded, by Delhi Development Authority for affecting transfer, would be subject to payment of unearned increase and for that reason alone, it appears in one of his letter he specifically informed the property dealer that while making offers this be kept in view that 50% of the unearned increase should be paid by the transferee. It also appears from the tenor of letters that the property dealer must have informed the defendant of the tentative offers received for the plot but the defendant informed that he would be satisfied in case anything between 150 to 160 is received for which purpose, he in his subsequent letter Ex.P-8 and P-9 informed that he would be interested in finalising the deal on his next visit to Delhi, which was expected somewhere in the first week of March. These letters are prior to the date of execution of receipt Ex.P-1. The defendant NO. 1 has not denied authorship of these letters and the fact that these letters were in fact addressed by him to the property dealer. Ex.P-1 is the receipt dated 24.3.1978 and it reads:-
RECEIPT Received with thanks Rs. 8500/- (Rupees) Eight thousand five hundred only) from Shri Shyam Shankar Goela, 6, Shankra Charya Marg (Metcalfe Road), Delhi as part payment of "the security amount for the plot No. B-334, measuring 524 sq. yds. in New Friends Colony, New Delhi" vide Bank draft no. 002767 dated 13.3.78, on the Bank of India, Jamshedpur Branch.
Shri Goela shall make the payment of balance amount within 15 days from the date of plan is approved by the D.D.A., amounting to Rs. 76500/- (Rupees Seventy Six thousand five hundred only).
I undertake to execute all the document i.e. Construction Agreement, Will, General Power of Attorney, Special Power of Attorney, Affidavits, Agreement to Sell and any other relevant document regarding the above mentioned plot, at the time of payment of the balance amount.
New Delhi Sd/- The 24th March, 1978 (D.N. Sharma) C/o V.P. Sharma, E-279, Greater Kailash New Delhi. WITNESSES Sd/- 1. Sh. Ishar Chander Sharma, 22, Subhash Marg, Darya Ganj, Delhi. sd/- 2. Sh. Mohan Lal Goela, 3, Bhamashah Marg (Pambari Road) Delhi.
11. Receipt was proved by the plaintiff in his statement as P.W.1. In fact it is an admitted document, since defendant No. 1 had to disputed the execution thereof. According to the plaintiff's deposition he was interested to purchase a plot of land and stated that there was an advertisement in the newspaper, inserted on behalf of Pandit Brothers, property dealer. On being contacted the property dealer told him that there was a plot o land available with him. This happened in February, 1978. Property dealer, therefore, introduced him to defendant No. 1. There was a meeting between the plaintiff and defendant in which the father and brother of the plaintiff were also present besides broker. he further stated that defendant No. 1 told that he was the owner of the plot and was interested in sale thereof. It is stated that after a couple of meetings defendant No. 1 agreed to sell the plot to him for a sum of Rs. 85,000/-. He also agreed to put the plaintiff in possession of the plot on payment of 10% of earnest money. But again told that let the plans be got prepared by the plaintiff, according to his requirement, which will be submitted to DDA under signatures of defendant No. 1 for sanction and when the plans are sanctioned by the DDA he would put the plaintiff in possession of the property after receiving the balance amount of consideration. The defendant also agreed to execute the usual documents such as power of attorney, Will etc. in order safeguard the plaintiff's interest. The property dealer informed the plaintiff, that defendant No. 1 was man of his words and would honour his commitment. It was during this process that defendant No. 1 in his own hand wrote slip Ex.P-1. Property dealer also appeared as P.W.3 and corroborated the plaintiff's statement that this receipt was in the hand of the defendant. The property dealer also corroborated the plaintiff in all material particulars as regards the manner in which the deal was struck. it is interesting to note that neither the plaintiff who appeared as P.W. 1, nor the property dealer, who appeared as P.W. 3 were put any question during cross examination, on behalf of defendants that it was not a deal for sale of property by defendant No.1 in favor of the plaintiff but it was a deal for entering into construction agreement. During the plaintiff's cross examination it was got reaffirmed that no separate agreement to sell was reduced into writing. The terms were settle orally between 11th to 13 March, 1978 and it was on 13.3.1978 that he purchased the demand draft from the bank in favor of the defendant in the sum of Rs. 8,500/-. Therefore, in these circumstances there is absolutely no legal infirmity in findings recorded by the trail court that defendant intended to sell the property, for which a deal was struck with the plaintiff. Agreement was to transfer and convey all his rights, title and interest in the property on payment of Rs. 85,000/-, out of which party payment of Rs. 8,500/- was received by defendant No. 1 who had agreed that on plans being got approved under his signatures by the DDA and on making the balance payment the plaintiff would be put in possession and in order to safeguard his interest usual documents would be executed, which is the normal practice in Delhi.
12. At this stage we may make mention of a few judicial pronouncement about the practice which has been prevalent in Delhi to enter into such deals rather than executing a proper document expressing true intention of the parties. In Usha Malhotra v. G.S. Uppal 1991 RLR 223 learned Single Judge of this Court (Mr. Justice D.P. Wadhwa as he then was) in para 10 of the report noticed of the practice prevalent in Delhi, because of various restrictions on sale of properties, for the buyers and sellers to manipulate things by executing various documents like Wills, Power of attorneys, affidavits etc. Paras 10 and 11 of the report are quoted as under:-
"10. It is a matter of common knowledge that in Delhi due to various restrictions imposed on the owners of plots held by them on perpetual leasehold basis, they devise methods to dispose of their plots by entering into various documents like in the present case. The construction agreement is not to be read in isolation. I find, when the Uppals filed the present petition u/S.20 of the Act, they withheld material information from the Court. They said nothing except the construction agreement. After written statement was filed, they, in their replication, admitted execution of various documents mentioned above. They said that agreement to sell was o doubt executed by the parties on 1.8.1978 itself, but said that the parties immediately thereafter discussed the matter the same day and in view of the fact that such a contract was forbidden by law, decided to execute the construction agreement superseding the agreement to sell. This cannot be true. They have been then unable to explain the execution of the wills and the general power of attorney wills and the general power of attorney which was presented for registration on 2.8.1978. They have woefully failed to explain their letter dated 15.7.1981. If the stand that the agreement to sell was superseded with the construction agreement is to be believed, they have no answer to the execution of other documents. Prima facie, it does appear to me that the parties agreed to the sale of the plot in question by Uppals to Usha. Otherwise, it is difficult for Uppals explain the delay as to why for five years after the construction agreement dated 1.8.1978 till April 1983 they kept quiet, and particularly when Usha was not in any construction business.
11. Uppals have also taken a stand that if agreement to sell is allowed to prevail it will be contrary to law and would be against the provisions of the Delhi Development Act and the provision of bye-laws of the society, which had developed the colony and that such a transaction was opposed to public policy and was hit by s. 23 of the Contract Act, and further that the agreement to sell could not amount to transfer and give any right to Usha and it could not be enforced by her. Uppals have also said that some of the documents being affidavit for land ceiling, affidavit that plot was free from all encumbrances, affidavit of non-transfer by Uppals to their children and power of attorney favoring Harish Narang were executed only with a view to enable Usha to construct the building on the suit plot. This again cannot be true. In the replication they denied even the execution of the Will by them favoring Usha and so also their letter dated 15.1.1981. This letter, Usha had contended, was postdated and executed at one and the same time when various documents were executed on 1.8.1978. Uppals have also not given any explanation as to why they did not cancel all the documents like will, etc. all this period."
13. Recently another Single Judge of this Court in Kuldip Singh Suri Vs. Surinder Singh Kalra also noticed this practice of manipulating different documents and also took note of the observations made in Usha Malhotra's case (supra) vis-a-vis the restriction placed by Clause 6 inn the perpetual sub lease deed and similar other pleas as are taken in the instant case and observed:-
"It is a matter of common knowledge that in all sub leases executed on behalf of the President of India such like restrictive clauses have been incorporated. It is also a matter of common knowledge that due to such like restrictions the power of attorney sales in thousands have been effected. If the instant transaction is held to be illegal then in that eventuality thousands of such transactions on the same token would have to be declared as illegal. This would cause colossal loss and misery to the vendees. Though both the vendors and the vendees are in pari delicto, the vendors would be making capital out of their breach by getting back their properties which over the years have appreciated astro-nomically. It would be wholly inequitable to declare such agreements being violative of perpetual sub leases. Learned counsel for the plaintiff contended that the fetter imposed by clause 6 of the perpetual sub lease Ext. D-3 is meant to protect public interest as the land in Delhi has become a scarce commodity and therefore, any violation of the same would not only give impetus to the illegal sales but would also be conflict with public policy."
14. Argument that transaction is illegal in view of clause 6 of perpetual lease deed were repelled by holding:-
"Argument though attractive must be repelled. Public policy is not a immutable concept. It must change with the march of time. The Supreme Court in Central Inland Water Transport Corporation Limited and another v. Brojo Nath Ganguly and another, , has observed that public policy connotes some matter which concerns the public good and the public interest. The principles governing the doctrine of public policy must be and are capable, on the proper occasion, of expansion or modification.
In Gherulal Parakh v. Mahedeodas Maiya and Others, 1959 SC 781, the Supreme Court summarizing the doctrine of public policy observed as follows:-
The doctrine of public policy may be summarized thus: Public Policy or the policy of law is an illusive concept; it has been described as "untrustworthy guide", "variable equality", uncertain one", "unruly house", etc. Thus it is clear that doctrine of public policy is a variable concept which must be fine tuned with demands of time and changing concerns for public goods and public interest. Whether in the instant case the above said policy had achieved its desired goal is a question to be considered. The answer is not far to seek. Despite the incorporation of the restrictive clauses in the perpetual sub leases executed by and between the DDA or L&DO on the one hand and the sub lessees on the other properties have been changing hands through, what are known as, power of attorney sales. This has deprived the state of the stamp duty and registration fee chargeable on the sale deeds. Restrictions have created a situation whether there is no incentive for observing honesty. Rather the policy has given boost to dishonesty. If such restrictive clauses did not exit, the sellers and buyers would have entered into straight and regular sale transactions resulting in generation of revenue for the State in as much as the buyers would have been liable to pay the stamp duty and registration fee. In practice the restrictive clauses have worked to the detriment of the State. In order to get over the restrictions a method of sale of the property through execution of power of attorneys, Wills, affidavits and agreement to sell has ben devised. it may be mentioned that Government of India on February 14, 1992 has introduced a Scheme whereby lease hold properties acquired from the Government can be converted into free hold. This decision also provides for regularisation of power of attorney sales on payment of penalty. The Scheme originally applied to the DDA and the L&DO plots measuring 500 sq. meters. However, by a subsequent office order No.V.11-6/92 dated June 2, 1994 the Notification dated February 14, 1992 has been made applicable to plots 505 sq. meters. Therefore, by virtue of the office order plots measuring up to 505 sq. meters are to be treated as falling under the Scheme dated February 14, 1992. This policy decision of the Government is an eloquent testimony of the fact that the requirements of public interest change with the times and are not static. A time had come where in keeping with the ground realities the Government had to introduce a Scheme for regularising the sales on the basis of the power of attorneys. Experience shows the unnecessary restrictions lead to deceitfulness in arranging ones affairs. The Government had rightly recognised the need for removal of such restriction."
15. The defendants did not dispute the fact that he did receive the two letters Exs. P-12 and P-13 and also some drafts of documents which were sent by the plaintiff but stated that the same were not acceptable to him. By letter Ex.P-12 the plaintiff informed defendant No. 1 that building plans were finalised and were ready for DDA's sanction. Along with the said letter he enclosed 11 sheets of documents, particulars of which are mentioned therein and requested the defendants to put his signatures at respective places and return the documents at the earliest so as to enable the plaintiff to submit the same to DDA. By letter Ex.P-13 dated 17.8.1978 the plaintiff informed defendant No. 1 that Along with 11 sheets he had also sent two affidavits and informed defendant No. 1 that document had not been returned so far by the defendant and requested that the same be returned to him. Thus as per the terms of receipt Ex.P-1 the plaintiff was rightly held by the trial court to have performed his part of agreement. The defendant No. 1 had to return the documents after putting his signatures so as to enable the plaintiff to have the building plan got sanctioned and the possession of the plot was to be handed over to the plaintiff on balance payment made. This aspect has been duly considered by the learned trial court. Instead of performing his part of the agreement it appears that defendant No. 1 Realizing that since property prices were on increase and had in fact increased by that time he backed out from his commitment and transferred that plot by way of gift in favor of his son after obtaining requisite permission for transfer. In his deposition he admitted that he applied for requisite sanction for transfer of plot on 20.6.1978. Sanction was accorded on 13.7.1978 and the gift deed was executed on 18.7.1978. The plaintiff on 17.10.1978 sent notice Ex.P-17 of which reply Ex.P-11 dated 28.10.1978 was received. The suit was filed on 12.12.1978.
16. In order to show that the plaintiff was always ready and willing to perform his part of contract, the plaintiff besides deposing in his statement that whatever was necessary for him to do he had also examined P.W. 2 Shri P. Narayan, Architect, who had prepared detailed plans. This witness also proved letter Ex.P-19 dated 23.4.1978 with reference to the discussion he had with the plaintiff on 21.3.1978 detailing therein the architectural services to be rendered by him and also the fee thereof. Exs. P-22 and P-23 are the receipts and copy of cheque to evidence the payment having been made to the architect by the plaintiff in getting the plans prepared. Exs.P-23 and P-24 are the receipts of brokerage paid by the plaintiff for having struck the deal and Ex.P-25 is the receipt of an amount paid to the advocate for getting various documents drafted which the plaintiff sent to defendant No. 1 for his signatures. This documentary evidence in the light of the oral evidence on record is sufficient to affirm the findings of the trial court. The trial court was perfectly justified in holding that the version of defendant No. 1 that it was a construction agreement was an after thought and only a ruse to get rid off and avoid the plaintiff's claim.
17. As regards Clauses (6)(a) and (6)(b) of the lease agreement in order to appreciate the respective submissions of learned counsel for the parties, the same are being reproduced hereunder:-
"(6)(a) The sub lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part with the possession of the whole or any part of the residential plot in any form or manner, benami or otherwise, to a person who is not a member of the lease.
(6)(b) The sub lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the residential plot to any other member of the lessee except with the previous consent in writing of the Lesser which he shall be entitled to refuse in his absolute discretion."
18. Clause (6)(a) puts restriction on sale, transfer or assignment or parting with possession of the plot, in any form, to a person who is not a member of the Society and part (b) puts a restriction that to any other member transfer will not be made except with a previous consent in writing. The plaintiff examined P.W. 4 Shri J.R. Sharma, Assistant from Delhi Development Authority and Shri J.K. Misra, P.W. 5, in order to prove the practice which has been prevalent in grating consent by DDA on receipt of unearned increase. The practice being followed has been that on sanction being accorded to transfer the plot, the transferee is accepted as a member of the Society in place of the transferor. The plaintiff also placed reliance upon documents Ex.P.W.4/B and P.W.4/C, the two advertisements dated 10.2.1979 and 16.2.1979. By the first advertisement final notice was given to all persons, who had taken possession of plots of DDA Residential/Industrial/Commercial Schemes or Co-operative Societies on or after 1.1.1969 but before 1.1.1977, informing them that they have to apply for extension of time for completing construction by 21.12.1979 and in case no application is received by 28.2.1977 lease will be determined. By the second advertisement general public was notified that last date of receipt of application for regularisation of transfer of plots affected surreptiously has been extended up to 17.3.1979. it has been the policy of the Government and has also been judicially noticed that such regulations of transfers where restriction is put, have been relaxed and permissions were accorded on a receipt of unearned increase in order to implement this policy. Even amendment is stated to have been carried out in corporating legislations by incerting Rule 34-A in the Delhi Co-operative Societies Rules. Procedure which is followed or adopted by DDA is that whenever an application is made seeking permission to transfer, on acceptance of unearned increase, DDA asks the Society to admit such person as a member in the Society in place of the transferor Prevalence of this practice has been duly corroborated by P.W. 4 and P.W. 5 and it is also evidenced by document P.W.4/A, when permission was granted in respect of plot C-1, Chirag Co-operative House Building Society. Exs.P.W.5/1, P.W.5/2 and P.W.5/3 are also documents to corroborate such a practice.
19. In Kuldip Singh's case (supra) such a submission about illegality of the transfer in violation of Clauses (6)(a) and (6)(b) was considered and it was turned down that there was no bar for a sub lessee to enter into an agreement to sell. As per Clause (6)(a), if sub lessee desires to sell an unbuild plot to any person, he is required to obtain consent in writing of the Lesser and in case the vendor had to sell property, which of course can be transferred only on sanction being accorded, the court while granting a decree for specific performance of such an agreement directs the vendor to apply to the concerned authority within a specified period and if sanction is forthcoming to convey to the purchaser within a certain time such property. Observation of learned Single Judge in the said decision are to the following effect:-
The argument of the learned counsel for the plaintiff that if the transaction is considered to be an agreement to sell, then in that event the same would be clearly void as no prior permission for entering into such a transaction was taken from the DDA for the transfer of the land, is devoid of force. An agreement to sell does not amount to sale or transfer of the immovable property. Therefore, under clauses 6(a) and (b) of the perpetual sub lease, there is no bar for a sub lessee to enter into an agreement to sell. As per clause 6(a) if the sub lessee desires to sell or transfer an unbuilt plot to any person who is not a member of the lessee, he is required to take the consent in writing of the Lesser. The Privy Council in Motilal vs. Nanhelal, laid down that if the vendor had agreed to sell the property which can be transferred only with the sanction of some government authority, the court has jurisdiction to order the vendor to apply to the authority within a specified period, and if the sanction is forthcoming to convey to the purchaser within a certain time. This proposition of law was followed in Mrs. Chandnee Widya Wati Madden v. C.L. Katial, , and R.C. Chandiok v. Chuni Lal Sabharwal, . The Privy Council in Motilal v. Nanhelal (supra) also laid down that there is always an implied covenant on the part of the vendor to do all things necessary to effect transfer of the property regarding which he has agreed to sell the same to the vendee. In Ajit Prashad Jain v. .N.K. Widhani and others, , this Court held that the permission from the Land & Development Officer is not a condition precedent for grant of decree for specific performance. While holding so this court relied upon the decision of the Supreme Court in Mrs. Chandnee Widya Vati Madden v. Dr. C.L. Katial (supra) and Mahro Saheb Shri Bhim Singhji v. Union of India, . At this stage it would be appropriate to reproduce the law laid down by this Court:-
"The permission from Land and Development Office is not a condition precedent for grant of decree for specific performance. In Mrs. Chandnee Widya Vati Madden v. Dr. C.L. Katial, the Supreme Court confirmed the decision of the Punjab High Court holding that if the Chief Commissioner ultimately refused to grant the sanction to the sale the plaintiff may not be able to enforce the decree for specific performance of the contract but that was no bar to the court passing a decree for that relief. The same is the position in the present case. If after grant of the decree of specific performance of the contract the land and Development Office refuses to grant permission for sale the decree holder may not be in a position to enforce the decree but it cannot be held that such a permission is a condition precedent for passing a decree for specific performance of the contract. I may also notice that S.27(1) of the Urban Land (Ceiling and Regulation) Act, in so far as it imposes a restriction on transfer of any urban or unbanisable land with a building or a portion of such building, which is within the ceiling area, was declared invalid by Supreme Court in Maharo Saheb Shri Bhim Singhji v. Union of India , and as such it may not be necessary to obtain permission under the said Act but that is not a matter with which I am concerned at this stage. Assuming such a permission is required that would be a matter for consideration after passing of the decree and at the stage of execution. No fault can be found out with the plaintiff's anxiousness to take possession in terms of the agreement on payment of the amounts stipulated therein.
Therefore, having regard to the principle laid down in the above said decision of the Privy Council, which was subsequently reiterated by the Supreme Court and various High Courts, appropriate direction can be issued to the vendor to apply for permission of the appropriate authority as required under Clauses 6(a) and (b) of the sub lease."
20. The decision in Kuldip Singh Suri's case (supra) was duly affirmed when Regular First Appeal (RFA (OS) 3/2000) against the said judgment and decree was dismissed by a Division Bench on 22.11.2000. Both of us were the Members of the Bench.
The very fact that prices of properties have increased and today the property may be worth several times of the consideration, which was agreed between the plaintiff and defendant No. 1, cannot be a ground to deny relief to the plaintiff, in case he is otherwise entitled to it. In S.V.R. Mudaliar (dead) by L.Rs. and ors v. Mrs. Rajabu F. Buhari (dead) by L.Rs. and others it was held that merely the prices have risen during the pendency of litigation cannot be a ground to deny specific relief, if the same is otherwise due.
21. The plaintiff in the instant case came to the Court with clean hands and has been successful in proving due execution of the agreement by which defendant No. 1 agreed to sell, transfer or convey his plot of land to him for a consideration of Rs. 85,000/-. The plaintiff did perform his part of the contract and there was no inaction on his part. The mere fact that the suit was filed by him after a period of almost one year from the date when defendant No. 2 returned the cheque to him also cannot be a ground to deny relief to which the plaintiff otherwise is entitled. Such a delay in filing the suit cannot defeat the legitimate right of the plaintiff, when law permits limitation of three years in filing the suit. Submission made by learned counsel for the appellant that there was a reference for future formal contract being entered into and there was no concluded contract has also no force, in view of the fact that the parties are at least bound by what is stated in Ex.P-1. In order to safeguard the interest of the plaintiff, in case defendant No. 1 had agreed to execute more documents, which also include therein an agreement to sell, cannot defeat the right of the plaintiff, since it has been proved by the plaintiff that defendant No. 1 intended to transfer the property to him and it was in furtherance of that intention that receipt Ex.P-1 was executed, after price was settled, which otherwise is a necessary ingredient for a valid agreement to sell. In Kollipara Sriramulu (dead) by his legal representation vs. T.Aswatha Narayana (dead) by his legal representative and others it was held that a mere reference to a future formal contract in an oral agreement will not prevent a binding bargain between the parties. The fact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put in a more formal shape does not prevent the existence of a binding contract. The question depends upon the intention of the parties and special circumstances of each case.
22. The fact that defendant No. 1 transferred the property in favor of defendant No. 2 also prevent the court from passing an appropriate decree. There is also no question of defendant No. 2 being a transferee without notice. He is the son of defendant No. 1 and defendant No. 1 has executed a gift deed in his favor. The course to be followed is such like cases is the one which was followed by Supreme Court in Ramesh Chandra Chandiok and another vs. Chuni Lal Sabharwal (dead) by his legal representatives and others holding that proper form of decree would be to direct specific performance of contract between defendant-vendor and the plaintiff and to direct the subsequent transferee to join in the conveyance so as to pass on the title residing in him. In holding so the Supreme Court followed an earlier decision in Durga Prasad and another vs. Deep Chand and others .
23. Consequently we find no force in the appeal which is hereby dismissed with costs. We make it clear that the learned trial court rightly directed the defendants/appellants to apply for necessary permission within the period specified therein. In case permissions are not applied for, it will be permissible for the plaintiff to make such an application and in case requisite permission is accorded, on receipt thereof the plaintiff will call upon the defendants/appellants to execute requisite sale deed in accordance with law and no failure to do so execution and resignation of the sale deed will be as per law.