Delhi High Court
Tarun Sawhney vs Uma Lal And Others on 4 February, 2011
Author: V.K. Jain
Bench: V.K. Jain
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 13.01.2011
Judgment Pronounced on: 04.02.2011
+ IA No. 13424/2010 & IA No..............(under
Order 39 Rule 4 of CPC) CS(OS) No. 2051/2010
TARUN SAWHNEY .....Plaintiff
- versus -
UMA LAL AND OTHERS .....Defendants
Advocates who appeared in this case:
For the Plaintiff: Mr. Sandeep Sethi, Sr. Adv. with
Mr. Harpreet Singh and Mr.
Rajesh Gupta, Advs.
For the Defendant: Mr. Arun Batta, Adv. for D-1, 2
& 4, Mr. J.P. Sengh, Sr. Adv.
with Ms. Zubeda Begum, Mr.
Sumeet Batra and Mr. Gaurav
Bhardwaj, Advs. for D-3 & 5 and
D-5 in person.
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported Yes
in Digest?
V.K. JAIN, J
1. This is a suit for specific performance of the two
agreements to sell both dated 16th September, 2009,
CS(OS)No. 2051/2010 Page 1 of 72
perpetual injunction and mandatory injunction. The
plaintiff has also made an alternative prayer for damages in
case specific performance of the agreement to sell is not
granted.
2. Property bearing BP No. 32, Nizamuddin East, New
Delhi, admeasuring 1021 sq. metres was owned by Ms.
Usha Bhagat. Vide agreement to sell dated 14th August,
1969, she agreed to sell her half undivided share in the
property to her brother defendant No. 5 Mr. Venoo Bhagat.
In a suit filed by Ms. Veenu, a decree for specific
performance of the agreement to sell dated 14 th August,
1969 was passed against Ms. Usha Bhagat, which led to
execution of a sale deed/transfer deed dated 11 th
September, 2008 in his favour, in respect of half undivided
portion of the suit property. During her lifetime, Ms. Usha
Bhagat had also executed a Will dated 10th April, 2003 in
respect of the suit property. In a petition, filed by the
Executor of the aforesaid Will dated 10th April, 2003, Letter
of Administration was granted by the Court in favour of
defendants 1 and 2, who were the Executors of the Will.
The defendants, who are also the legal heirs of Ms. Usha
Bhagat later agreed that all of them would equally share one
CS(OS)No. 2051/2010 Page 2 of 72
half undivided share in the suit property, while the
remaining undivided share would be owned exclusively by
defendant No. 5 in terms of the decree passed in his favour.
They also agreed to sell the suit property on or before 31st
December, 2008. The defendants vide two agreements both
dated 16th September, 2009 agreed to sell the suit property
to the plaintiff. One agreement was executed only by
defendant No.5, whereas the other agreement was executed
by all the five defendants together and both the agreements
contained reference to each other. Initially, the sale
consideration in respect of half undivided share owned
exclusively by defendant No.5 was fixed at Rs 12.90 crores,
but it was later revised to Rs 15.90 crores vide
Supplementary Agreement dated 16th September, 2009. A
sum of Rs 90 lakhs was paid by the plaintiff to defendant
Nos. 1 to 5 as advance money and the balance consideration
was to be paid in terms of clause 5 of the agreement. A sum
of Rs 10 lakhs was paid to defendant No. 5 in respect of the
second agreement and the remaining amount was payable
in terms of clause 3 of the said agreement.
3. At the time of execution of the agreements, the suit
property was yet to be mutated in the names of defendant
CS(OS)No. 2051/2010 Page 3 of 72
Nos. 1 to 5 and it was also required to be converted from
lease-hold to free-hold, the mutation and conversion being
pre-requisite conditions for the sale of the suit property. The
plaintiff paid a sum of Rs 11,76,000/- on 28th June, 2010
and another sum of Rs 2,10,000/- on 26th July, 2010
towards payment of conversion charges and misuse
charges/ground rent respectively. It was agreed between the
parties that if conversion of lease-hold rights into free-hold
rights is granted by L&DO in the name of the plaintiff, he
would intimate the defendants in this regard who would
then hand over the possession of the suit property to the
plaintiff on his making payment of the balance
consideration. In case of conversion being granted in the
name of the defendants, they were required to execute and
register a sale deed in favour of the plaintiff.
4. Both the Agreements provided for specific
performance in case the defendants/vendors refused to
complete the sale transaction and also provided for fixing a
convenient time and date for execution and registration of
sale deed and handing over the possession to the vendee.
5. Clause 20 of the first agreement and clause 17 of
the second agreement, which are identical clauses, provided
CS(OS)No. 2051/2010 Page 4 of 72
that if the agreement was not implemented within twelve
calendar months, it shall stand terminated and
extinguished automatically without any further act of
parties and the vendors shall be at liberty to sell the
property subject matter of the agreement to any other
person after refund of earnest money and other lawful
charges, if any, paid by the vendee.
6. It is alleged in the plaint that after execution of the
Agreements and in terms of the understandings between the
parties, the plaintiff and his representatives pursued the
case for mutation of the suit property in names of
defendants and for conversion of the suit property from
leasehold to freehold, in the office of L&DO and also
deposited all the requisite charges in this regard. The
processing of the mutation however, took time, firstly for
want of some basic documents such as certified copies of
Court Order and proceedings, secondly due to delay caused
by the defendants in agreeing upon a convenient time to
collectively come forward and sign the requisite documents
and thirdly on account of certain objections raised by L&DO
regarding mutation of the property in the name of the
defendants. This is also the case of the plaintiff that the
CS(OS)No. 2051/2010 Page 5 of 72
objections of L&DO came to be raised due to a mistake on
the part of the defendants in submitting an
incomplete/defective mutation application dated 27.3.2009
which they had submitted before executing the Agreements
to Sell in his favour. It is further alleged that it was with the
assistance and persuasion of the plaintiff that the objections
could be remedied by moving fresh application dated
19.4.2010 by the executors named in the Will dated
10.4.2003 and later supporting it with "Memorandum
Recording Family Settlement" of June, 2010 incorporating
the terms of the family settlement between the parties. It is
claimed that the plaintiff had also requested the defendants
to file conversion application dated 5.7.2010 in order to
convert the suit property to freehold. It is further claimed
that in August, 2010, the plaintiff came to know that the
case was ripe for conversion from leasehold to freehold and
would be completed by August, 2010 but then certain
questions emerged regarding payment of composition fee by
the defendants and the plaintiff had to make strenuous
efforts for his settlement.
7. It is alleged in the plaint that the plaintiff had been
diligently performing all his obligations under the
CS(OS)No. 2051/2010 Page 6 of 72
agreements and had always been willing, ready and
financially capable to perform all his obligations including
payment of the balance sale consideration, for which he
possesses ready and sufficient means. Vide letter dated
4.9.2010, the plaintiff informed the defendants that he was
ready with funds and was keen to conclude the transaction.
Defendants 1, 2 & 4 appreciated his efforts and agreed to
execute the sale deed at a mutually convenient date.
Defendants No.3 & 5, however, turned dishonest and
started blaming the plaintiff for the delay in obtaining
mutation and conversion. It is also alleged that time was
not the essence of the contract between the parties and they
did not intend with the sale deed shall be executed within
one year of the execution of the Agreement.
8. The plaintiff, besides seeking specific performance
of the Agreement to Sell dated 16.9.2009 executed in his
favour, is also seeking a permanent injunction restraining
the defendants from selling, alienating or parting with
possession of the suit property. In case of refusal of specific
performance of the Agreements, they have sought damages,
from the defendants.
9. IA 13424/2010 has been filed by the plaintiff
CS(OS)No. 2051/2010 Page 7 of 72
seeking interim injunction restraining the defendants from
selling, alienating or parting with possession of the suit
property and creating any third party interest therein during
pendency of the suit.
10. In their written statement, defendants No.3 & 5
have taken a preliminary objection that the plaint does not
disclose a cause of action since the suit is based on the
agreements which stood terminated on expiry of twelve
months from the date of their execution. Relying upon
clause 20 of the first Agreement and clause 17 of the second
Agreement, the defendants No.3 & 5 have claimed that the
time was made essence of the contract and since 12 months
from the date of the Agreement expired on 15.9.2010, the
agreements stood extinguished and the parties stand
restored to their position if the agreements had never been
entered into, the plaintiff would be entitled to refund of the
charges deposited by him whereas the defendants are free to
sell the property to anyone. It is further alleged that the
value of the suit property has since increased to Rs 40-50
crores and on account of change of circumstances
renovation of the property is now possible in view of recent
amendments made in Ancient Monuments Act, 1958.
CS(OS)No. 2051/2010 Page 8 of 72
11. On merits, it has been admitted that defendants 1
to 5 are the owners of undivided one half of land and
building on property No. BP-32, Nizamuddin East, New
Delhi, whereas defendant No.5 is the sole owner of the
remaining undivided one half of the property. The execution
of two agreements to sell both dated 16th September, 2009
has been admitted. It is claimed in the written statement
that the first agreement became impossible of performance
because the plaintiff got one half of the property mutated by
L&DO as if defendant Nos. 1 to 2 were its owners on the
basis of a Will, which was contrary to the statement made in
the application that the Will had been adeemed as stated in
the supporting affidavits. The Mutation Letter also
purported to wipe out defendant No.'s 5 rights in one half of
the suit property covered by the first agreement that were
granted to him by Letter of Administration. It is alleged that
the plaintiff was solely responsible for the wrong mutation
and was informed that it was not acceptable. It is claimed
that the second agreement to sell had ceased to exist when
the suit was filed on 1st October, 2010 since it did not
provide for sale of an undivided one half share in the suit
property and the residential unit in the rear portion. It is
CS(OS)No. 2051/2010 Page 9 of 72
alleged that though defendant No. 5 had informed the
plaintiff that the mutation was unacceptable, he went ahead
with conversion into free-hold based on wrong mutation. It
is claimed that the plaintiff wrongly forced the defendants to
withdraw their correct application and make a wrong
application, obtained wrong mutation and got conversion
letter based on a wrong mutation.
12. In their written statement, defendants 1, 2 and 4,
have admitted that they had agreed to extend the time for a
further period of three months from 13th September, 2010
for conclusion of the sale deed on the terms and conditions
contained in the agreement to sell dated 16 th September,
2009, making it clear that no further extension will be
granted for any reason whatsoever. They also have claimed
that the agreement to sell was to be implemented within 12
calendar months from its date and in case the sale deed was
not executed within that period, the agreement was to stand
terminated/extinguished automatically and the vendors
were at liberty to sale the suit property to another person
after refund of the earnest money. It is also stated that the
vendee was required to get the suit property mutated and
converted into free-hold on behalf of the vendors and the
CS(OS)No. 2051/2010 Page 10 of 72
charges to be paid by him to L&DO in this regard were to be
deducted from the sale consideration. It is further alleged
that on 17/18th October, 2010, they had received a call from
the office of the plaintiff, informing him that L&DO fixed
19th October, 2010 as the date for execution of the
Conveyance Deed. When they went to the office of L&DO on
19th October, 2010, neither defendant No. 3 nor defendant 5
was present there. Thereafter, they received a letter dated
1st November, 2010 from L&DO asking the defendants to
appear before it on 10th November, 2010. Since defendant
No. 1 was going out of station, L&DO was informed about
his non-availability on that date and requested to fix a date
in the first week of December, 2010 for that purpose.
13. In the replication, the plaintiff has stated that as
on 15th September, 2010, he had not only obtained the
mutation of the property in favour of the defendants, but
had also obtained a letter confirming its conversion from
lease hold to free-hold. Vide that letter, L&DO had called
upon the defendants to appear before it and complete the
formalities in respect of execution of the Conveyance Deed
in their favour.
CS(OS)No. 2051/2010 Page 11 of 72
14. IA No.................has been filed by defendants 3
and 5 for vacation of the interim order of this Court dated
4th October, 2010, whereby defendants were restrained from
creating any third interest in the suit property.
15. The following undisputed facts emerge from the
pleadings of the parties and the documents filed by them:-
(i) Property No.BP-32, Nizamuddin East, was owned by
late Ms. Usha Bhagat, the land underneath the
building having been leased to her by the Land and
Development Office.
(ii) Ms. Usha Bhagat had entered into an agreement
into an agreement dated 14 th August, 1969 to sale
half of the suit property to defendant No.5 Mr.
Venoo Bhagat.
(iii) Ms. Usha Bhagat executed a WILL dated 10th April,
2003 thereby bequeathing different portions of the
entire suit property to defendant No.1 Ms. Uma Lall,
defendant No.2 Ms. Urmila Kapur and defendant
No.5 Mr. Venoo Bhagat, without referring to the
agreement dated 14 th August, 1969 executed by her
in favour of defendant No.5 Mr. Venoo Bhagat.
(iv) A civil suit, which defendant No.5 Mr. Venoo Bhagat
had filed seeking specific performance of the
agreement dated 14th August, 1969, was decreed by
the Court on 19th February, 2005 and pursuant
thereto, a transfer deed dated 11 th September, 2008
CS(OS)No. 2051/2010 Page 12 of 72
was executed by the Court in favour of Mr. Venoo
Bhagat transferring undivided half share in the suit
property to him.
(v) Defendant No.1 Ms. Uma Lall and defendant No.2
Ms. Urmila Kapur being Executor of the WILL were
granted Letter of Administration dated 24th October,
2008 executed by Ms. Usha Bhagat without the
WILL annexed to it.
(vi) Vide Agreement to Sell dated 16th September, 2009
hereinafter referred to as the first agreement, all the
five defendants, agreed to sell undivided one half of
plot bearing No.BP-32, Nizamuddin East, New Delhi
to the plaintiff for a consideration of
Rs.15,90,00,000/- and received a sum of
Rs.90,00,000/- from him as earnest money. This
agreement contained a reference to the agreement
which defendant No.5 Mr. Venoo Bhagat executed
on the same date in favour of the plaintiff, agreeing
to sell the remaining one half of the property to the
plaintiff.
(vii) Defendant No.5, Mr. Venoo Bhagat, vide second
agreement to sell executed in favour of the plaintiff,
agreed to sell undivided one half share in Plot
No.BP-32, Nizamuddin East to the plaintiff for a
consideration of Rs.12,90,00,000/- and received a
sum of Rs.10,00,000/- from him as earnest money.
The amount of sale consideration was increased to
Rs.15,90,00,000/- vide supplementary agreement
CS(OS)No. 2051/2010 Page 13 of 72
executed on the same date. This agreement also had
a reference to the first agreement.
(viii) Vide application for mutation dated 3rd February,
2009, defendant No.5, Mr. Venoo Bhagat applied to
the Land and Development Office for mutation of
one half of the plot bearing No.BP-32, Nizamuddin
East in his name on the basis of the transfer deed
executed by the Court in his favour.
(ix) Another application was submitted by all the five
defendants to the Land and Development Office in
February, 2009 for mutation of the remaining one
half of the plot in their name, on the basis of the
WILL executed by Ms. Usha Bhagat in their favour.
(x) Vide application dated 19 th April, 2010, Defendant
No.1, Ms. Uma Lall and defendant No.2 Ms. Urmila
Kapur applied to the Land and Development Office
for mutation of plot bearing No.32, Nizamuddin
East, New Delhi in their favour on the basis of WILL
executed by Ms. Usha Bhagat. Along with this
application, no objection affidavit of defendant No.3,
Ms. Upma Khanna, defendant No.4, Mr. Kapil
Bhagat and defendant No.5, Mr. Vinoo Bhagat were
filed with the Land and Development Office. In
these affidavits, it was specifically stated that the
clause in the WILL dated 10th March, 2003
concerning the suit property stood adeemed vide a
subsequent Court judgment decreeing one half of
the said property in favour of Mr. Venoo Bhagat,
CS(OS)No. 2051/2010 Page 14 of 72
thereby leaving Ms. Usha Bhagat owner of an
undivided one half share thereof. They also stated
that they had no objection if undivided one half of
the property was mutated in the name of Ms. Uma
Lall an Ms. Urmila Kapur. Defendant No.5, Mr.
Venoo Bhagat further stated that this will not affect
the rights of the legal heirs of the deceased in her
undivided one half share.
(xi) Vide Memorandum of Family Settlement executed in
June, 2010, the defendants, after recording the
above referred chain of facts and events, agreed that
the bequest in Ms. Usha Bhagat's WILL to the entire
property was adeemed and rendered in capable of
implementation in respect of her remaining one half
share in the said property. They further agreed that
her undivided one half share in the property
devolved by intestate succession upon all the five
defendants, who were her legal heirs. Clauses XIII,
XIV and XV of the preamble to this document are
important and reads as under:-
"XIII) The parties hereto have been advised
that the L&DO would effect mutation in the
joint names of parties Nos. 1 and 2 treating
them as executors of Usha Bhagat‟s will. The
alternative would be to file a writ petition for
a court direction to the L&DO to carry out the
mutation, but this may take considerable
time. As a measure of expediency and to
avoid more delay the parties have agreed to
fill out the mutation papers as insisted upon
by the L&DO, but with the alteration
described in the succeeding paragraph.
CS(OS)No. 2051/2010 Page 15 of 72
XIV) Accordingly, the application already
made by all parties for mutation of Usha
Bhagat‟s one-half of the said property was
withdrawn and replaced by a fresh
application for mutation in the names of
parties Nos. 1 and 2. In accordance with the
family settlement that Usha Bhagat‟s one -
half devolved on allo five parties hereto as
her heirs, the affidavits by all the parties in
support of the second application stated,
amongst other things, that the clause in Usha
Bhagat‟s will relating to the said property
was adeemed, making clear that her will
does not govern succession to her one-half of
the said property.
XV) The parties agree that mutation and
conversion to freehold of Usha Bhagat‟s
aforesaid one-half of the said property if and
when made in the names of Parties Nos. 1
and 2 will be on behalf of all five parties
hereto and only as an expedient (mutation
will not affect title)."
(xii) Vide application No.104872, defendant No.1 Uma
Lall, defendant No.2 Urmila Kapur and Defendant
No.5 Mr. Venoo Bhagat applied to Land and
Development Office for conversion of lease hold
rights in respect of the plot No.BP-32, Nizamuddin
East, New Delhi into free hold.
(xiii) Vide letter dated 27th July, 2010 the Land &
Development Office, referring to applications of
defendant Nos. 1, 2 and 5 regarding mutation-cum-
substitution in respect of property bearing No.BP-
32, Nizamuddin East, New Delhi informed them that
in accordance with the Court Order, the lease hold
CS(OS)No. 2051/2010 Page 16 of 72
rights in respect of undivided rear portion of
property No.BP-32, Nizamuddin East, New Delhi
had been mutated in the name of Mr. Venoo Bhagat
and on the basis of the WILL dated 10th April, 2003
left behind by deceased Ms. Usha Bhagat in favour
of Ms. Uma Lall and Ms. Urmila Kapur and a
disclaimer deed executed by Smt. Upma Khanna,
the lease hold rights in undivided front portion of
aforesaid property had been substituted in the name
of Ms. Uma Lall and Ms. Urmila Kapur as executors
of the WILL of Ms. Usha Bhagat.
(xiv) Vide letter dated 4th September, 2010, the plaintiff
wrote to defendant No.2 Urmila Kapur that as she
was aware, their initial application filed for mutation
was not in proper order and necessitated filing of
fresh application, which was submitted only on 19 th
April, 2010, and substantial time was lost in the
process of completing the necessary formalities pre
and post filing the revised application. Informing
her that he was ready with funds, he requested that
the period of execution of sale deed be extended by
excluding the time spent in pursuing the defective
application or in the alternative, a period of 30 days
be given to him from the date the conveyance deed
is executed and registered in their favour.
(xv) Vide letter dated 10th September, 2010 written to all
the defendants, the plaintiff again claimed that
application which they had filed earlier was defective
CS(OS)No. 2051/2010 Page 17 of 72
and the process of withdrawal of their earlier
application and submission of fresh application was
thereby delayed for 9 months. He also informed
them that Form-C and Form-D and/or sanctioned
building plan and/or house tax receipts etc., which
could confirm that the property was constructed
with the period stipulated in the lease deed were not
provided to the L&DO, as a result of which he had
to make efforts to obtain old records from the office
of the MCD so that instead of depositing the
composition fee of about 15 lakhs, the seller would
receive a waiver and this process resulted in further
delay. He also informed that there was delay in
furnishing other documents such as Deed of
Disclaimer, which was to be executed by defendant
No.3 Ms. Upma Khanna. He sought confirmation
that the period of about 9 months wasted without
any fault on his part has to be excluded from the
time period. In the alternative, he requested that
the period for execution of the sale deed be extended
by 30 days from the date the conveyance deed is
executed and registered in their favour. He also
offered to deposit the balance sale consideration in
an escrow account from where it could be
withdrawn automatically by the seller, immediately
on execution of the documents specified in the letter
and/or sale deed in his favour and handing over of
peaceful possession. Another offer given by him was
to issue post dated cheques/demand drafts, which
CS(OS)No. 2051/2010 Page 18 of 72
could be encashed after execution of those
documents and/or sale deed in his favour. The
documents sought by the plaintiff, as a pre
condition to deposit the balance sale consideration
in an escrow account were:-
(a) A Special Power of Attorney in favour of his
nominee authorizing him to execute, register the
conveyance deed and also the sale deed in his
favour after conversion of the property is
intimated by the L&DO.
(b) A General Power of Attorney in his favour and
simultaneous Agreement to Sell in his favour for
which he was ready and willing to pay the
requisite stamp duty.
(c) Confirmation of the date of handing over the
possession.
(d) Handing over the original letter of mutation and
original lease deed against a proper
acknowledgement.
(xvi) In reply to the letter dated 10th September, 2010
written by the plaintiff, defendant No.1 Ms. Uma Lall
and defendant No.2 Ms. Urmila Kapur agreed to
extend the time for further period of three months,
without going into the controversy and reason for
delay in executing the sale deed within the time
stipulated in the agreement dated 16th September,
2009. Defendant No.5, Mr. Venoo Bhagat, writing
for himself and on behalf of defendant No.3. Ms.
CS(OS)No. 2051/2010 Page 19 of 72
Upma Khanna controverted the allegation imputing
delays to them and stated that they have always
been ready and willing to perform their part under
the agreement in accordance with the terms and
conditions during the period of their validity as
written in the said agreement. He, however, did not
accept the offer made by the plaintiff vide letter
dated 09th September, 2010.
16. The first plea taken by defendants No. 3 and 5,
who are the main contesting defendants, is that though
defendant No.5 Vinoo Bhagat owned 50% undivided share
in the suit property, in terms of the transfer deed executed
in his favour on 11th September 2008 and the remaining
half undivided share was jointly owned by all the five
defendants as legal heirs of late Ms. Usha Bhagat, the
mutation made by L&DO vide its letter dated 27 th July 2010
envisaged mutation of the undivided rear portion of the
property in favour of defendant No.5 Sh. Vinoo Bhagat in
terms of the transfer deed dated 11th September 2008 and
mutation of the lease hold rights in respect of undivided
front portion of the suit property, in favour of defendant
No.1 Uma Lal and defendant No.2 Urmila Kapur in terms of
the Will executed by Ms. Usha Bhagat on 10th April 2003
CS(OS)No. 2051/2010 Page 20 of 72
and the mutation made by L&DO being contrary to the legal
rights of the defendants, was not acceptable to them and
since the conversion of lease hold rights into free hold rights
was also bound to be in conformity with the mutation, they
could not have accepted the conversion deed in terms of the
mutation and consequently could not have executed a sale
deed in favour of the plaintiff.
17. As noted earlier, vide application dated 19th April
2010, defendants No.1 and 2 had applied to L&DO for
mutation of the suit property in their name. Admittedly,
NOC Affidavits by all the five defendants were submitted to
the L&DO along with this application. Vide her affidavit
dated 16th April 2010, defendant No.3 Upma Khanna stated
that she had no objection if the deceased's undivided one
half of the property (front/rear portion) was mutated in the
name of defendant No.1 Uma Lal and defendant No.2
Urmila Kapoor as the executors named in the Will. By
saying so, defendant No.3 Ms. Upma Khanna consented to
conversion of leasehold rights either in front portion or in
rear portion, in favour of defendant Nos. 1 and 2 without
insisting on conversion of half undivided share in the
CS(OS)No. 2051/2010 Page 21 of 72
leasehold in respect of the whole, without specifying any
particular portion in this regard. Defendant No.5 Sh. Vinoo
Bhagat, in his affidavit dated 16th April 2010, however,
stated that he had no objection if the deceased's undivided
one half of the property was mutated in the name of Uma
Lal and Smt. Urmila Kapur. He added that this will not
affect the rights of the heirs of the deceased in her
undivided one half of the property. Thus, all the
defendants, including the main contesting defendant, had
agreed to mutation of half share of late Ms. Usha Bhagat in
the suit property in favour of defendants No.1 and 2 and did
not insist upon it being mutated in the joint names of all the
five defendants. This obviously was done pursuant to an
agreement amongst the defendants as was recorded in the
family settlement recorded in June 2010. In para 12 of the
family settlement it was acknowledged that because of
inclusion of Usha Bhagat's Will amongst the papers, L&DO
had raised several objections which in the opinion of the
parties to the family settlement were untenable in law. They
further noted that it had been advised that L&DO would
effect mutation in the joint name of defendant No.1 and 2
treating them as executors of Usha Bhagat's Will. They
CS(OS)No. 2051/2010 Page 22 of 72
acknowledged that the alternative to this course would be to
file writ petition seeking a direction to the L&DO to carry
out mutation in terms of the application of the parties, but
that was likely to take considerable time. They accordingly
decided to fill out the mutation papers as insisted upon by
L&DO. They also acknowledged that the application made
earlier by them for mutation of Usha Bhagat's one half of
the suit property was withdrawn and replaced by a fresh
application for mutation in the name of defendants 1 and 2
and that mutation and conversion to free hold of Usha
Bhagat's one half of the property, if and when made in the
name of defendants 1 and 2, will be on behalf of all five
parties and was only an expedient, which would not affect
their title. They also agreed that if it becomes necessary for
defendants 1 and 2 to execute a fresh agreement to sell
Usha Bhagat's one half of the said property with Mr. Tarun
Sawhney, they will enter into such agreement as
representatives and on behalf of all five defendants and the
agreement will be framed in such a way that the buyer
would be required to pay the price payable for Usha
Bhagat's one half of the property separately in equal shares
directly to all five of the parties as owners of one fifth share
CS(OS)No. 2051/2010 Page 23 of 72
therein. They decided that all of them will continue to have
legal title to one fifth share each in Usha Bhagat's undivided
one half share of the property by succession under the
Hindu Succession Act even if the L&DO mutates and
converts to freehold the said one half in the name
defendants No.1 and 2 alone. They further decided that all
acts, documents and things done for obtaining mutation,
converting the said property into freehold and for selling it
shall mutatis mutandis be done in a manner so as to be in
accord with the family settlement and the agreement.
18. Having expressly agreed to, applied for and
obtained mutation as also conversion from leasehold rights
to freehold rights in respect of half share of Usha Bhagat in
the suit property in the name of defendants 1 and 2 alone, it
is not open to defendants 3 and 5 or any other defendant to
claim that the mutation was bad in law and, therefore, was
not binding on him. In any case, since defendants had
adequately safeguarded their interests by documentary
evidence that despite mutation and/or conversion of half of
the leasehold rights in the name of defendants 1 and 2, all
the five defendants, who are also the legal heirs of late Smt.
CS(OS)No. 2051/2010 Page 24 of 72
Usha Bhagat, will continue to have one fifth share each in
the one half owned by Usha Bhagat and the
conversion/mutation in the name of defendant No.1 and 2
alone will not affect their title in any manner, it is not open
to them to refuse to abide by their agreement with the
plaintiff, on the ground that the mutation granted by L&DO
was defective or was not in accordance with their legal
rights in the one half owned by Usha Bhagat. It would be
worthwhile to note here that the no objection was raised by
any of the defendants at any point of time of the mutation
granted by L&DO vide its letter dated 27th July 2010, which
in any case was based on the application submitted by
defendants 1 and 2 along with No Objection affidavit from
the other defendants. This clearly shows that mutation
allowed by L&DO in terms of its letter dated 27 th July 2010
was acceptable to all the defendants, including defendants
No. 3 and 5. Consequently, they could not have disputed
the conversion from leasehold to freehold, allowed by L&DO
in terms of the mutation.
19. What is more important in this regard is that the
defendants had agreed to sell whole of the suit property to
CS(OS)No. 2051/2010 Page 25 of 72
the plaintiff and there was reference to the second
agreement in the first agreement and to the first agreement
in the second agreement, thereby making the transaction as
one composite transaction for the sale of property bearing
BP No.32, Nizamuddin East, New Delhi to the plaintiff,
though vide two separate agreements executed on the same
date. The defendants had nothing to lose by executing a
sale deed in favour of the plaintiff in terms of the mutation
granted by L&DO on 27th July 2010 and the conversion of
leasehold rights into freehold rights which it had later
agreed to allow. If the mutation allowed by L&DO was
acceptable to the purchaser, there was no reason for the
sellers not agreeing to it particularly when it was pursuant
to an application submitted with their consent and along
with No Objection from them. The only concern of the
defendants in the transaction was the receipt of the balance
sale consideration and since the plaintiff was willing to pay
the balance sale consideration in terms of the agreements
dated 16th September 2009 to the defendants, without
insisting upon any correction/modification in the mutation
granted by L&DO, the defendants had no justification in law
to back-out of their contractual obligation on the ground
CS(OS)No. 2051/2010 Page 26 of 72
that the mutation was defective or was not in accordance
with their legal rights.
20. It would also be pertinent to note here
that vide his letter dated 10th September 2010 the plaintiff
had offered to deposit the entire balance sale consideration
in an escrow account which the defendants could withdraw
on execution of the sale deed and handing over possession
of the suit property to the plaintiff. The defendants could
well have secured their interests by accepting the offer made
by the plaintiff and could then have executed the sale deed
in favour of the plaintiff after obtaining conversion of
leasehold rights into freehold rights.
21. It was contended by defendant No.5 that
defendants No.3 and 5 were not in favour of the leasehold
rights in respect of one half share owned by Usha Bhagat
being mutated in the sole name of defendants No.1 and 2 as
would be evident from the mails exchanged between the
parties, but they agreed to it on account of continuous
pressure from the plaintiff. Be that as it may, the fact
remains that all the five defendants agreed to the mutation
of leasehold rights in respect of one half share of Usha
CS(OS)No. 2051/2010 Page 27 of 72
Bhagat in the sole name of defendants No.1 and 2 as
executors of her Will and having done so, they are now
stopped from saying that the mutation was defective and
could not have been accepted by them.
22. The second and main plea taken by the defendants
is that since, in terms of Clause 20 of the first agreement,
which is identical to Clause 17 of the second agreement,
since the agreements were not implemented within 12
months from their dates, the agreements stood terminated
and extinguished and the plaintiff is now entitled only to
refund of the earnest money and the charges deposited by
him with L&DO on behalf of the defendants.
23. The above referred Clause reads as under:
"If this Agreement is not
implemented within twelve calendar
months from the date hereof this
Agreement shall stand terminated
and extinguished automatically
without any further act of parties
and the Vendor shall be at liberty to
sell the said property to any other
person after refunding the earnest
money to the Vendee, as also other
lawful charges hereinabove
mentioned if paid for by the Vendee
on behalf of Vendor: the intention of
the parties is that they shall be
restored to the same position as at
the date hereof and as if this
CS(OS)No. 2051/2010 Page 28 of 72
Agreement had not been executed."
Clause 13 of the First Agreement and clause 11 of
the Second Agreement read as under:
"13. If the Vendee is ready and
willing to perform his part of the
obligation hereunder but any one or
more of the Vendors defaults in
performing his/their obligations
hereunder the Vendee shall have the
following options independently of
each other:-
a) To seek specific performance
and relief ancillary thereto.
b) To purchase that part of the
said property from those Vendors
who are ready and willing to sell
their shares, without reference to
defaults by any other vendor(s)
c) To seek refund of earnest
money from all vendors and all
money lawfully paid by the Vendee
to the L&DO on their behalf on
account of mutation, conversion to
freehold and other lawful charges. In
addition to the above, each Vendor
shall pay a sum of Rs 4 lac to the
Vendee if any Vendor defaults after
mutation has been carried out. The
defaulting Vendor(s) shall be liable
to pay double the amount of earnest
money in addition to the aforesaid
charges.
11. If the Vendor refuses and/or
fails to perform his part of this
agreement without good cause then
the Vendee shall have all rights
CS(OS)No. 2051/2010 Page 29 of 72
available in law to seek specific
performance hereof and relief
ancillary thereto, or in the
alternative the Vendee may demand
that the Vendor refund to the
Vendee double the amount of
earnest money paid to him along
with his proportionate share of
lawful freehold conversion and
related charges if these shall have
been paid by the Vendee.
24. One possible interpretation of the terms of the
agreement, particularly if the above referred first Clause is
read in isolation and without adverting to the surrounding
facts and circumstances, can be that since the conveyance
deed converting the leasehold rights into freehold rights was
not executed by 15th September 2010 when the term
stipulated for implementation of the term expired, time
being essence of the contract, the defendants are not bound
to fulfil their obligation under the agreements by executing
sale deeds in favour of the plaintiff and their obligation is
confined only to the return of the earnest money received
from the plaintiff and the charges deposited by him with
L&DO on their behalf. The expression used in above referred
Clause of the agreements and the preemptory consequences
acknowledged therein do tend to support the case setup by
CS(OS)No. 2051/2010 Page 30 of 72
defendants 3 and 5 in this regard and indicates that though
the agreement does say it in so many words, that the parties
intended the time to be essence of the contract and that is
why they agreed that on expiry of 12 months from the date
of agreement, the rights of the parties under the agreement
shall stand extinguished, the agreement shall stand
terminated and the defendants would be at liberty to sell the
property to any person of their choice.
25. However, it is difficult to dispute that Clause 20 of
the first agreement, which is identical to Clause 17 of the
second agreement, cannot be read divorced from other
terms of the agreements and the facts and circumstances in
which the agreements were executed cannot be excluded
from consideration, while deciding whether the parties
intended to treat the time as essence of the contract or not.
Admittedly, there is no express stipulation that time would
be essence of the contract in all circumstances and
irrespective of what the cause for the delay in
implementation of the agreement was and whosoever was
responsible for the delay. It is important to note here that
though the plaintiff had agreed to deposit requisite charges
CS(OS)No. 2051/2010 Page 31 of 72
for mutation and conversion with L&DO for and on behalf of
the defendants and he was also pursuing the matter of
mutation and conversion with L&DO, primarily it was the
responsibility of the defendants, they being the vendors to
obtain mutation of the suit property in their names as also
to get its leasehold rights converted into freehold rights
though nothing in law prevented the plaintiff to agree to
undertake this obligation on their behalf. It cannot be
disputed that the mutation and conversion could not have
been allowed unless all the requisite documents were
submitted to L&DO and the formalities prescribed by it for
the purpose duly complied. This was acknowledged by the
defendants when they agreed, vide Clause 12 of the first
agreement, which is identical to Clause 10 of the second
agreement, to do all acts and execute all documents
including application, affidavits, power of attorney, etc. to
enable the plaintiff to get mutation and conversion to
freehold of the suit property effected. They further agreed to
furnish the documents to the plaintiff within seven working
days of his making a request in this regard. They also
agreed to carry out further correspondence with L&DO with
the concurrence of the plaintiff. The case of the plaintiff, as
CS(OS)No. 2051/2010 Page 32 of 72
set-out not only in the plaint but also in the letter which he
had written to the defendants before filing this suit, is that
the applications which the defendants had earlier submitted
to L&DO were defective, Form C and Form D and/or
sanctioned building plan and/or house tax receipts which
could confirm that the property was constructed within the
time stipulated in the lease deed were not provided, the
plaintiff had to make efforts to obtain old record from the
office of MCD so that payment of composition fee of about
Rs.15 Lacs by the defendants could be avoided and there
was delay in furnishing documents such as Deed of
Disclaimer to be executed by defendant No.3 Smt. Upma
Khanna. At this stage, the Court cannot go into the
truthfulness or otherwise of the allegations made by the
plaintiff in this regard. If, however, the allegations are
correct and processing of the matter with L&DO office was
delayed on account of any default/lapse on the part of one
or more of the defendants, it would be difficult to dispute
that for the purpose of calculating the time of 12 months
envisaged in the agreements for their implementation, the
period of delay attributable to the defendants will not be
excluded. No person can be allowed to take advantage of
CS(OS)No. 2051/2010 Page 33 of 72
his own fault or inaction, whether deliberate or otherwise.
Hence, a person who causes delay in implementation of the
agreement or is guilty of contributing to the delay, cannot be
allowed to bereft from his own act or omission, by avoiding
the implementation of the agreement on the ground of
delay. This also was the view taken by Supreme Court in
Nirmala Anand vs. Advent Corporn (P). Ltd. (2002) 5 SCC
481.
26. Another important aspect in this regard is that
mutation and/or conversion of leasehold rights into freehold
rights was not in the hands of the plaintiff. He could at best
have pursued the matter sincerely and honestly on behalf
the defendants. There is no material on record to show that
there was any delay/default on the part of the plaintiff in
pursuing the matter with L&DO. If despite best efforts
made by him, the plaintiff could not obtain conversion of
leasehold rights into freehold before 15th September 2010, it
would be difficult to blame the plaintiff for the delay and
deny the specific performance of the agreement executed by
the defendants in his favour. While entering into
agreements with the plaintiff, the defendants knew it very
CS(OS)No. 2051/2010 Page 34 of 72
well that the grant of mutation and conversion was not in
his hands and he could at best make sincere efforts to
obtain them from L&DO at the earliest possible. They knew
that the plaintiff might or might not succeed in obtaining
mutation and/or conversion from L&DO on or before 15 th
September 2010. When the parties enter into an
agreement, which cannot be implemented in the absence of
an act required to be done by a third party, it is very much
possible that the parties did not intend to make the time for
implementation of the agreement as the essence of the
contract and the stipulation requiring the implementation of
the agreement within the time stipulated in the agreement
was intended just to keep the vendee on his tender hooks
and to maintain pressure on him to make sincere and bona
fide efforts to obtain clearance from the third party at the
earliest possible. Such a stipulation in my view can be
termed as a stipulation in terrorem, which is not intended to
be taken literally. Yet another peculiar feature of the
agreements between the parties is that in the event of the
agreements getting terminated in terms of clause 20 of the
first agreement and clause 17 of the second agreement,
compensating the plaintiff by payment of liquidated
CS(OS)No. 2051/2010 Page 35 of 72
damages or otherwise, for the time spent, efforts made and
money invested and arranged by him. The contracts which
can be implemented without an act to be performed by an
outsider in my view are to be treated differently, while
considering whether time was essence of the contract or
not, from the agreements which required no act to be
performed by a third party for their implementation. If for
example, the agreement between the parties stipulates that
in case the balance payment is not made by the vendee
within the time stipulated in the agreement in this regard,
the agreement would stand terminated and the vendor shall
be at liberty to sell the property to any person of his choice,
the vendor or the vendee as the case may be, may possibly
for a good case to say that since the express stipulation
contained in the agreements clearly expressed the intention
of the parties to treat the time as essence of the contract,
the agreement stood terminated on account of the default
on the part of the opposite party and, therefore, he was not
bound to honour his part of the agreement. But, it would
be difficult to appreciate such a contention where the
implementation of the agreement is delayed on account of
an act, which the parties knew, at the time of entering into
CS(OS)No. 2051/2010 Page 36 of 72
an agreement, was required to be performed by a third party
and there would be no guarantee that it would be possible
within a fixed time frame.
27. In his additional affidavit dated 6th January, 2011,
the plaintiff has stated that the application dated 6th July,
2010 which the defendant Nos. 1, 2 and 5 had filed with the
Land and Development Office for conversion of the suit
property from lease hold to free hold was accepted by the
Land and Development Office, which sent a letter dated 15th
September, 2010 confirming that the application on
examination was found to be in order and called upon the
addressees to attend its office on 27th September, 2010 with
the documents specified in the letter along with purchaser
and two witnesses in order to complete formalities for
execution of the conveyance deed. He has further stated
that on 27th September, 2010 only defendant No.5 attended
the Land and Development Office, though defendant Nos. 1,
2 and 5 were supposed to attend the office on that date. He
has further stated that on the request of defendant No.5,
the date and time for execution of the conveyance deed was
deferred for 19th October, 2010 but on that date, none of
CS(OS)No. 2051/2010 Page 37 of 72
these three defendants were present for execution of the
conveyance deed. His affidavit further shows that on 10 th
November, 2010, which the Land and Development Office
had fixed for execution of conveyance deed, defendant Nos.
1, 2 and 5 did not attend his office.
28. In their reply to the affidavit of the plaintiff,
defendant Nos. 3 and 5 have not denied the averments
made in the additional affidavit of the plaintiff dated 6 th
January, 2011 nor have they disputed the contents of the
letter of Land and Development Office dated 15th September,
2010 as reproduced in the affidavit. They only claimed that
the mutation was unacceptable to them and the conversion
from lease hold to free hold also would necessarily have
been on the basis of the mutation, thereby depriving
defendant Nos. 3 to 5 of title. They further stated that the
Land and Development Office's letter for free hold
conversion was based on wrong mutation and was not
acceptable to them. In her affidavit, defendant No.1 Ms.
Uma Lall has stated that neither she nor defendant No.2
Ms. Urmila Kapur received the communication dated 15th
September, 2010 from the Land and Development Office
CS(OS)No. 2051/2010 Page 38 of 72
and that is why they did not appear in his office on 27 th
September, 2010. She further stated that the representative
of the plaintiff informed them that the next date for
execution of the conveyance deed has been fixed as 19 th
October, 2010 by the Land and Development Office. On
that date, defendant Nos. 1 and 2, accompanied by another
representative of the plaintiff, visited the Land and
Development Office. However, no conveyance deed could be
executed as defendant No.5 was not present on that date.
On that date they also came to know that the
communication dated 15th September, 2010 was issued by
the Land and Development Office only to defendant No.5
and, therefore, they gave a letter to the concerned official of
the Land and Development Office requesting that in future
all communications should be sent to them as well.
Thereafter, they received a letter dated 1st November, 2010
from the Land and Development Office calling them to
appear before him on 10th November, 2010. Since at that
point of time, defendant No.1 was expecting to travel
abroad, she informed the Land and Development Office
accordingly and requested that execution of the conveyance
deed may be fixed after 5th December, 2010. However, in
CS(OS)No. 2051/2010 Page 39 of 72
the meantime, the husband of defendant No.2 fell seriously
ill and expired on 19 th November, 2010 and, therefore, she
(defendant No.1) had to cancel her plan to go abroad.
Copies of letter dated 1st November, 2010 received by them
from the Land and Development Office as also the copy of
the letter dated 8th November, 2010 written by her to the
Land and Development Office have been annexed to the
affidavit. Similar averments have been made in the
affidavit of defendant No.2 Ms. Urmila Kapur.
29. It is, thus, quite clear that by 15th September,
2010, which, according to the contesting defendants, was
the last date for implementation of the agreements dated
16th September, 2009, the Land and Development Office
had accepted the request made by defendant Nos. 1, 2 and
5 for conversion of free hold rights in respect of the suit
property into free hold rights. Once the application of
defendant Nos. 1, 2 and 5 for conversion of lease hold rights
into free hold rights was accepted, what remained to be
done was completion of formalities in connection with
execution of conveyance deed and execution of sale deed in
favour of the plaintiff, which were the acts to be done by the
CS(OS)No. 2051/2010 Page 40 of 72
defendants, without the plaintiff having to play any further
role in the matter. It is difficult to accept that the deadline
stipulated in the agreements dated 16th September, 2010
cannot be said to have been met despite the Land and
Development Office having accepted the application for
conversion of lease hold rights into free hold rights and
having communicated its decision to defendant No.5 vide its
letter dated 15th September, 2010. The defendants could
have requested L&DO to prepone the date for extension of
conveyance deed, but, they chose not to adopt such a
course of action. The time leg of a few days between issue of
communication dated 15th September, 2010 by the Land
and Development Office and execution of the sale deed by
the defendants would in any case be of no significance and
would not frustrate the agreement between the parties,
particularly when the plaintiff had made an unequivocal
offer to the defendants on 10th September, 2010, well before
expiry of the time stipulated in the agreements dated 16 th
September, 2009, to deposit the balance sale consideration
into an escrow account. Once the defendants had received
intimation from the Land and Development Office about
acceptance of their application for conversion of lease hold
CS(OS)No. 2051/2010 Page 41 of 72
rights into free hold rights, they could easily have written to
the plaintiff requiring him to deposit the balance
consideration in an escrow account in terms of his letter
dated 10th September, 2010. The conduct of the main
contesting defendants in not honouring their contractual
obligations despite receipt of communication dated 15th
September, 2010 from the Land and Development Office
indicates that they had decided not to perform their part of
the contract by executing the sale deed in favour of the
plaintiff, much before the deadline stipulated in the
agreement dated 16th September, 2010 expired. This
inference finds ample support from the conduct of the
defendants in not accepting the offer made by the plaintiff
vide his communication dated 10 th September, 2010. The
first document, which the plaintiff wanted the defendants to
execute in his favour as a condition for depositing the
balance sale consideration in an escrow account, was a
special power of attorney in favour of his nominee, who
would be authorized to execute, register the conveyance
deed as also the sale deed in his favour after conversion of
the property was intimated by the Land and Development
Office. Since the defendants had agreed to sell whole of the
CS(OS)No. 2051/2010 Page 42 of 72
property to the plaintiff, they could have no valid reason for
refusing to execute such a power of attorney in favour of his
nominee when the plaintiff was offering to deposit the
balance sale consideration in an escrow account and that
amount could have been withdrawn by the defendants
immediately on the execution of the documents mentioned
in the letter and handing over possession of the suit
property to him. The second document sought by the
plaintiff was a general power of attorney in his favour along
with an agreement to sell for which he was ready and willing
to pay the requisite stamp duty. I find no valid objection to
the defendants executing such a document when the
plaintiff was willing not only to pay the requisite stamp duty
but also to deposit the balance sale consideration in an
escrow account. The third requirement of the plaintiff was a
confirm date for handing over possession of the suit
property and the fourth requirement was to hand over the
original letter of mutation and original lease deed against
the proper acknowledgement along with other original
documents. Since the plaintiff was offering to deposit the
balance sale consideration in an escrow account and
defendants could have withdrawn that amount on executing
CS(OS)No. 2051/2010 Page 43 of 72
the above referred documents in respect of the suit
property, their refusal to accept this very fair offer made by
the plaintiff is a clear indicator that by that time they had
already decided not to honour their contractual obligation
and that is why this offer was not accepted by them.
30. It was contended by defendant No.5 that had he
accepted wrong mutation and wrong conversion of lease
hold rights into free hold rights, in the event of plaintiff
backing out of his contractual obligation, they would have
been saddled with a wrong document of title and that is why
they could not have accepted the wrong
mutation/conversion allowed by the Land and Development
Office. I, however, find no merit in this contention. As
noted earlier, the mutation by the Land and Development
Office was based on an application submitted by defendant
Nos. 1 and 2 along with no objection affidavit from all the
defendants and no objection to the mutation letter dated
27th July, 2010 was raised by the defendant at any point of
time. It is, therefore, not open to them to dispute the
mutation/conversion allowed by the Land and Development
Office. Moreover, when the plaintiff had offered to deposit
CS(OS)No. 2051/2010 Page 44 of 72
the balance sale consideration in an escrow account on the
defendants executing the documents mentioned in his letter
dated 10th September, 2010, there was no reasonable
possibility of the plaintiff not honouring his contractual
obligation by paying the balance sale consideration to the
defendants. The only concern of the defendants was with
the balance sale consideration and in case they were getting
that amount merely on execution of documents sought by
the plaintiff, the mutation/conversion even if defective could
not have been prejudicial to their interest in any manner.
In any case, if the defendants were so particular, after
correctness of the mutation letter/conversion, nothing
prevented them from filing objections before the L&DO and
seeking appropriate modification of the letters issued by it
after accepting the offer made by the plaintiff vide letter
dated 10th September, 2010.
31. In support of his contention that the time was not
the essence of the contract, learned senior counsel for the
plaintiff has relied upon Jamshed Khodaram Irani v.
Burjoji Dhunjibhai, AIR 1915 PC 83, Smt. Swarnam
Ramachandran and Anr v. Arvacode Chakungal
CS(OS)No. 2051/2010 Page 45 of 72
Jayapalan (2004) 8 SCC 689, Gomathinayagam Pillai &
Ors v. Pallaniswami Nadar AIR 1967 SC 686 and
Chand Rani (D) by Lrs. v. Smt. Kamal Rani (D) by Lrs.,
(1993)1SCC 519.
32. The learned counsel for defendant Nos. 3 and 5 as
also the defendant No.5, who himself is an advocate, have
on the other hand relied upon Chand Rani (D) by Lrs.
(supra), Steedam v. Drinkle, 1914-1915 All ER 298, K.S.
Vidyanadam & Ors. v. Vairavan, (1997)3 SCC1 and
Man Kaur v. Hartar Singh, (2010) 10 SCC 512
33. In the case of Jamshed Khodaram Irani (supra),
the respondent agreed in writing to sell the lease hold
interest in his property to the appellant for a consideration of Rs.85,000/- and had received a sum of Rs.4000/- from him as earnest money. The conveyance was to be prepared and received within two months from the date of the agreement. Rs.80,500/- were to be paid on signing the document of sale and the remaining Rs.500/- were to be paid after its registration. Clause 5 of the agreement provided that in the event of purchaser not paying the amount within the fixed period, he was to have no right to CS(OS)No. 2051/2010 Page 46 of 72 the earnest money paid by him, any claim of his was to be void and the vender was after that date at liberty to resell the property. During the course of judgment, the Privy Council referred to the following observations made by Lord Cairns in Tilley v. Thomas L.R. 3 Ch. 61:-
"The construction is and must be in equity the same as in a Court of Law.
A Court of Equity will indeed relieve against and enforce specific performance, notwithstanding a failure to keep the dates assigned by the contract; either for completion or for the steps towards completion, if it can do justice between the parties, and if (as Lord. Justice Turner said in Roberts v. Berry 3 D. M. & G. 284, at p. 289) there is nothing in the „express stipulations between the parties, the nature of the property, or the surrounding circumstances, which would make it inequitable to interfere with and modify the legal right. That is what is meant, and all that is meant, when it is said that in equity time is not of the essence of the contract. Of the three grounds mentioned by Lord Justice Turner „express stipulations‟ requires no comment. The „nature of the property‟ is illustrated by the case of reversions, trusts, or trades. The „surrounding circumstances‟ must depend on the facts of each particular case."
The Privy Council, inter alia, further observed as CS(OS)No. 2051/2010 Page 47 of 72 under:-
"The special jurisdiction of equity to disregard the letter of the contract in ascertaining what the parties to the contract are to be taken as having really and in substance intended as regards the time of its performance may be excluded by any plainly expressed stipulation. But to have this effect the language of the stipulation must show that the intention was to make the rights of the parties depend on the observance of the time limits prescribed in a fashion which is unmistakable. The language will have this effect if it plainly excludes the notion that these time limits were of merely secondary importance in the bargain, and that to disregard them would be to disregard nothing that lay at its foundation. Prima facie, equity treats the importance of such time limits as being subordinate to the main purpose of the parties, and it will enjoin specific performance notwithstanding that from the point of view of a Court of law the contract has not been literally performed by the plaintiff as regards the time limit specified. This is merely an illustration of the general principle of disregarding the letter for the substance which Courts of Equity apply, when, for instance, they decree specific performance with compensation for a nonessential deficiency in subject-matter."
10. But equity will not assist where there has been undue delay on the CS(OS)No. 2051/2010 Page 48 of 72 part of one party to the contract, and the other has given him reasonable notice that he must complete within a definite time. Nor will it exercise its jurisdiction when the character of the property or other circumstances would render such exercise likely to result in injustice. In such cases the circumstances themselves, apart from any question of expressed intention, exclude the jurisdiction.
Equity will further infer an intention that time should be of the essence from what has passed between the parties prior to the signing of the contract..."
Applying the aforesaid principles to the agreement before it, the Privy Council was of the view that there was nothing in the language or in the subject matter to displace the presumption that for the purposes of specific performance, time was not of the essence of the bargain.
34. Applying the above-referred decision to this case, time will not be essence of the contract, despite stipulations contained in Clause 20 of the first agreement and Clause 17 of the Second agreement, particularly when there was no default on the part of the plaintiff is pursuing the matter with L&DO.
35. In the case of Gomathinayagam Pillai and CS(OS)No. 2051/2010 Page 49 of 72 Others (supra), initially no time was fixed for completion of the sale. However, after receipt of advance, another agreement dated 15 th April, 1959 was executed wherein it was stated that parties have decided to consult the Vakil so as to settle the sale within 30 th April, 1959 and to bind themselves as per the conditions mentioned in the previous agreement should whomsoever fail to finalise the sale. The sale did not materialize by 30 th April, 1959. The trial Court held the time to be the essence of the contract and also held that the respondent was never ready and willing to perform his part of the contract. This finding was reversed by the High Court. The questions, which came up before the Supreme Court, were (i) as to whether the time was essence of the contract and (ii) whether the respondent was ready and willing to perform their part of the contract. Referring to Section 55 of the Contract Act, the Court inter-alia observed as under:-
"6. It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing, must be in language which is CS(OS)No. 2051/2010 Page 50 of 72 unmistakable: it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence..."
It was further observed that intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulations as to time are not of the essence. In that case, there was no express stipulation, and the circumstances were not such as to indicate that it was the intention of the parties that time was intended to be of the essence of the contract.
36. In Chand Rani (Smt.) (Dead) by LRs. (supra), a Constitution Bench of the Supreme Court during the course of the judgment, the Court, inter alia, observed as under:-
"19. It is well-accepted principle that in the case of sale of immovable property, time is never regarded as CS(OS)No. 2051/2010 Page 51 of 72 the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.
After considering the case law on the subject matter, the Court summed up the legal proposition as under:-
"25. From an analysis of the above case law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are:
1. from the express terms of the contract;
2. from the nature of the property; and
3. from the surrounding circumstances, for example: the object of making the contract."CS(OS)No. 2051/2010 Page 52 of 72
37. However, in the facts of the case before it, the Court found that the purchaser was not willing to pay the balance sale consideration of Rs.98,000/- unless vacant delivery of possession of one of the rooms on the ground floor was given to him and this, the Court felt, could not have been insisted upon by the purchaser.
38. In the case of Smt. Swarnam Ramachandran and Another (supra), the key issue before the Court was whether time was the essence for payment of the balance sale consideration of Rs.75,000/- on or before 30th September, 1981 and whether the said term was breached. The Court was of the view that this question does not depend only upon express stipulation made by the parties, but it also depends upon the intention of the parties. It was observed that notwithstanding that a specific date was mentioned in the agreement, one has not only to look at the letter but also at the substance of the contract. Whether time is of essence is a question of fact and the real test is intention of the parties. It depends upon facts and circumstances of each case. It was further observed that in CS(OS)No. 2051/2010 Page 53 of 72 cases where notice is given making time the essence, it is duty of the Court to examine the real intention of the party giving such notice by looking at the facts and circumstances of each case and that a vendor has no right to make time the essence, unless he is ready and willing to proceed to completion and secondly, when the vendor purports to make time of the essence, the purchaser must be guilty of such gross default as to entitle the vendor to rescind the contract.
Applying the proposition of law laid down in this case, the Court needs to see not only the terms contained in Clause 20 of the first agreement and clause 17 of the second agreement was also needs to consider the matter in the backdrop of the facts and circumstances in which the agreements were executed, as also the subsequent conduct of the parties, to determine whether they actually intended to make the time essence of the contract or not. In the facts and circumstances of a given case, despite a specific date fixed in the agreement for conclusion of transaction, the Court may, on considering the other terms contained in the agreement as also the other facts and circumstances of the CS(OS)No. 2051/2010 Page 54 of 72 case come to the conclusion that parties did not intend to treat the time as essence of the contract and the expression stipulation made in this regard was, in fact, intended to impress upon the parties to conclude the transaction, to the extent it is possible, within the time frame stipulated in the agreement between them. Admittedly, defendants 1 and 2 had agreed to extend the time for completion of the transaction by three months. This is yet another indicator that either the parties did not intend to treat the time as essence of the contract or they felt that the delay in completion of the transaction was not attributable to the plaintiff and that is why two of the five vendors, extended the time stipulated for completion of the transactions.
39. In Steedman (supra), it was agreed between the parties that in case the purchaser made default, in payment to be made to the vendor, the vendor would be at liberty without notice to cancel the agreement and declare it void and to retain payment on account of it by way of liquidated damages and to retail all improvements made on the premises or else to proceed to another sale. The Supreme Court of Saskatchewan in that case reversed the judgment CS(OS)No. 2051/2010 Page 55 of 72 of NEWLANDS, J., who had dismissed the action for specific performance. The Privy Council was of the view that the Supreme Court was wrong in reversing the judgment of NEWLANDS, J. During the course of judgment, the Privy Council, inter alia, observed as under:-
"....Courts of Equity, which look at the substance as distinguished from the letter of agreements, no doubt exercise an extensive jurisdiction which enables them to decree specific performance in cases where justice requires it, even through literal terms of stipulations as to time have not been observed, But they never exercised this jurisdiction where the parties have expressly intimated in their agreement that it is not to apply, by providing that time is to be of the essence of their bargain. If, indeed, the parties, having originally so provided, have expressly or by implication waived the provisions made, the jurisdiction will again attach. In the case referred to this appears to have been what happened."
However, this suit is at the initial stage and the Court at this stage is only required to take a prima facie view of the matter. The plaintiff has in the facts and circumstances of the case been able to make out a prima facie case and the facts and circumstances of the case do CS(OS)No. 2051/2010 Page 56 of 72 not necessarily indicate that the parties intended the time to be essence of the contract. Another noteworthy distinguishing feature is that in the case before the Privy Council, the purchaser could easily have avoided the default by making payment to the vendor within the time stipulated in this regard, whereas in the case before this court grant of mutation/conversion was in the hands of a third party and there is no material to indicate that there was any default on the part of the plaintiff in pursuing the matter with the Land and Development Office. Moreover, the plaintiff has always been ready and willing to perform his part of the contract as is evident, particularly from the letter dated 10th September, 2010 sent by him to all the defendants offering to deposit the balance sale consideration in an escrow account from where the defendants could withdraw the same on executing the documents specified therein.
40. In the case of K.S. Vidyanadam and Others v. Vairavan (supra), one of the issues before the Court was whether mere rise in price of the immovable property, subject matter of agreement to sell is a ground for denying the specific performance. During the course of the CS(OS)No. 2051/2010 Page 57 of 72 judgment, the Court, inter alia, observed as under:-
"We cannot be oblivious to the reality
- and the reality is constant and continuous rise in the values of urban properties - fuelled by larger- scale migration of people from rural areas to urban centers and by inflation. Take this very case. The plaintiff had agreed to pay the balance consideration, purchase the stamp papers and ask for the execution of sale deed and delivery of possession within six months. He did nothing of the sort. The agreement expressly provides that if the plaintiff fails in performing his part of the contract, the defendants are entitled to forfeit the earnest money of Rs. 5,000/- and that if the defendants fail to perform their part of the contract, they are liable to pay double the said amount. Except paying the small amount of Rs. 5,000/- [as against the total consideration of Rs. 60,000/-] the plaintiff did nothing until he issued the suit notice 2 1/2 years after the agreement. Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so.
The learned Counsel for the plaintiff says that when the parties entered CS(OS)No. 2051/2010 Page 58 of 72 into the contract, they knew that prices are rising; hence, he says, rise in prices cannot be a ground for denying specific performance. May be, the parties knew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said time-limit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such time-limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as non-existent?
All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribes certain time- limits for taking steps by one or the other party, it must have some significance and that the said time- limits cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties)."
Applying the view taken by the Supreme Court in this case, it cannot be said that the time limit laid down in Clause 20 of the first agreement and Clause 17 of the second agreement by itself amounts to making the time CS(OS)No. 2051/2010 Page 59 of 72 essence of the contract though, it is difficult to say that the time limit stipulated by the parties will be of no consequence in every case and despite express stipulation made in the contract in this regard, the time would never be an essence of the contract in any agreement for sale of an immovable property. As observed by the Supreme Court, while exercising its discretion whether to direct specific performance of the agreement or not, the Court needs to bear in mind all the relevant factors including the time limit laid down by the parties for completion of the contract but, this time limit cannot be the sole factor, particularly when the facts and circumstances of the case indicate an intention to the contrary. Moreover, in the case before Supreme court there was delay of 2½ years even in issuing notice to the seller whereas in the case before this Court, the plaintiff has invoked jurisdiction of the Court within a month of the time stipulated in the agreements and there is no default or inaction on the part of the plaintiff in pursuing the matter with L&DO.
41. In the case of Man Kaur (supra), the Supreme Court reiterated the principles that to succeed in a suit for CS(OS)No. 2051/2010 Page 60 of 72 specific performance, the plaintiff has to prove : (a) that the valid agreement of sale was entered into by the defendant in his favour and the terms thereof; (b) that the defendant committed breach of the contract; and (c) that he was always ready and willing to perform his part of the obligations in terms of the contract.
Yet another contention of contesting defendants is that since the plaintiff wanted execution of another agreement solely with defendant Nos. 1 and 2 so as to obtain a loan from the bank, he was not ready and willing to perform the agreement executed on 16th September, 2009. There is no document of the plaintiff which would indicate he wanted execution of another agreement, with a view to obtain loan from his bank, though the mails written by defendant No.5 to the plaintiff on 10th May, 2010 and 6th July, 2010 do indicate that a new agreement to sell only with the sisters was proposed by the plaintiff as a formality for his bank though the sale deed was to be executed as per the agreement dated 16th September, 2009, which were to continue to operate, subject to the names of the vendors being changed in the new agreement to sell. In my view, CS(OS)No. 2051/2010 Page 61 of 72 nothing really turns on this document for the simple reason that the plaintiff never backed out of his obligations as contained in the agreements dated 16th September, 2009 and there is no material on record to show that he was insisting on execution of a fresh agreement to sell only with defendant Nos. 1 and 2 despite the fact that the family settlement recorded in June, 2010, did provide for an agreement only with defendant Nos. 1 and 2. Probably, the intention was to expedite the clearance by L&DO, which might be insisting on mutation/conversion of one half in the name of defendant Nos. 1 and 2 alone. That the plaintiff was always ready and willing to perform his part of the contract is more than evident from the fact that even without execution of a fresh agreement to sell, he pursued the matter with the Land and Development Office on the basis of the application for mutation and conversion, which were submitted by the defendants to the Land and Development Office, obtained mutation letter dated 27 th July, 2010 from the Land and Development Office and offered the balance sale consideration to the defendants vide his letters dated 4th September, 2010 and 10th September, 2010.
CS(OS)No. 2051/2010 Page 62 of 72
A perusal of the certificate dated 25th September, 2010 issued by the Chartered Accountant of the plaintiff along with copy of his portfolio statement and portfolio report which the plaintiff has filed in the Court would show that the market value of the securities held in the portfolio of the plaintiff was Rs.166.65 crores as on 24th September, 2010 and none of the securities was pledged. Therefore, it cannot be said that the plaintiff was not ready and willing to perform his part of the contract. In any case, this is a matter on which a final view can be taken by the Court only after recording evidence. Prima facie, the material placed on record does not indicate any attempt by the plaintiff to wriggle out of his contractual obligation as contained in the agreements dated 16th September, 2009.
42. Now, I come to the contention of the defendants that since there has been steep escalation in the market value of the suit property during pendency of the suit, it will be unjust and unfair to compel them to accept the price agreed in September, 2009, despite failure of the plaintiff to get it implemented within the time agreed in this regard. In the case of Nirmala Anand (supra), Supreme Court (Hon'ble CS(OS)No. 2051/2010 Page 63 of 72 Mr. Justice D. Raju) observing that entire fault for the delay or default could not be squarely attributed solely to first and second respondent and considered the escalation in the value of the property while directing specific performance of the agreement directed the appellant to pay a sum of Rs 40 lakhs to respondents 1 and 2 in addition to the amount already paid. In passing this order, the Court felt that it would be not only unreasonable, but also inequitable for the Courts to make the appellant the sole beneficiary of the escalation of the real estate prices and the enhanced value of the flat in question which respondents 1 and 2 had preserved all along by keeping alive the issues pending with the authorities of the Government and the municipal bodies. The Court was of the view that before dealing the specific performance, it is obligatory for the Courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant , the extent of hardship that may be caused to the defendant and if it would render such enforcement inequitable, besides taking into consideration, the totality of the circumstances of each case. The view taken by Hon'ble Mr Justice Ashok Bhan in this case was that per se the delay or escalation of price is not a ground of CS(OS)No. 2051/2010 Page 64 of 72 denying the relief of specific performance though in certain cases, the Court in equity and to mitigate the hardship to the vendor, may direct the vendee to pay further compensatory amount though this is not a principle of universal application and would depend upon the facts and circumstances of each case. While deciding this case, Supreme Court had also considered a number of its earlier decisions, including K.S. Vidyanadam (supra) and Hon'ble Mr Justice Ashok Bhan, who was not in favour of directing payment of any additional amount by the vendee to the vendor, was of the view that none of those cases laid down an absolute rule that the proposed vendee would be required to compensate the proposed vendor for the escalation of the price of land and building during the pendency of the proceedings in Courts at different levels.
In P.D' Souza vs. Shoundrilo Naidu, (2004) 6 SCC 649, Supreme Court was of the view that there was no binding precedent to the effect that in all cases where there had been an escalation of prices, the Court should either refuse to pass a decree for specific performance of the contract or direct the plaintiff to pay a higher sum. Similar CS(OS)No. 2051/2010 Page 65 of 72 view was taken in P.S. Ranakrishna Reddy vs. M.K. Bhagyalakshmi and Anr. (2007) 10 SCC 231.
In Faquir Chand and Anr. vs. Sudesh Kumari (2006) 12 SCC 146, when it was submitted before the Court that the property value had gone up several times, the Court, without going into correctness of this submission and noticing that the to some extent the delay was also attributable to the respondent/vendee directed him to pay a sum of Rs 1 lakh to the appellant/vendor, failing which the suit filed by the vendee/respondent for specific performance was to stand dismissed. In case of payment of the aforesaid sum of Rs 1 lakh, the appellant/vendor was to execute the sale deed in favour of the respondent/vendee without any further delay and was also to hand over the vacant possession of the suit property to him.
43. As noted earlier, in the case before this Court, there is no material on record which would attribute any part of the delay which occurred in obtaining mutation/conversion from L&DO to the plaintiff. The last date for completion of the contract was 15th September, 2010. Application for conversion of leasehold rights into CS(OS)No. 2051/2010 Page 66 of 72 freehold rights had been accepted by L&DO by that time and, therefore, the sale deed in favour of the plaintiff could have been executed by the defendants within a few days thereafter. This suit itself has been filed on 1 st October, 2010, i.e., within 16 days of the last date stipulated for completion of the transaction. If the Court, after trial, comes to the conclusion, that the delay in completion of the transaction was attributable wholly or partly to the plaintiff, and there has been steep escalation in the value of the suit property in the meanwhile, it may in the event of granting specific performance of the agreements dated 16th September, 2009 direct the plaintiff to pay an appropriate amount to the defendants as a pre-condition for execution of the sale deed by them in his favour. The defendants in that case would have no grievance that they have suffered monetary loss on account of escalation in the value of the property, without any default in their part in meeting their contractual obligations.
44. For the reasons given in the preceding paragraphs, I am of the view that the plaintiff has been able to make out a rather strong prima facie case for specific performance of CS(OS)No. 2051/2010 Page 67 of 72 the Agreements to sell dated 16 th September, 2009.
45. In support of his contention that the suit property needs to be preserved during pendency of the suit and if injunction is not granted that would render the suit infructuous thereby causing irreparable loss to the plaintiff, the learned senior counsel for the plaintiff has placed reliance on N. Srinivasa v. Kuttukaran Machine Tools Ltd., (2009) 5 SCC 182. In that case noticing that the only ground taken by the respondent was that since time was the essence of the contract and the appellant had failed to perform his part of the contract within the time specified in the agreement and, therefore, the question of grant of injunction against transfer or alienation of the suit property did not arise at all, the Supreme Court observed that it must be kept in mind that it would be open to the respondent to transfer, alienate or create any third party interest in respect of property in dispute before passing the award in which one of the main issues would be whether time was essence of the contract or not. The Court was of the view that if at the stage when application of the appellant under Section 9 of the Arbitration and CS(OS)No. 2051/2010 Page 68 of 72 Conciliation Act was pending, if the respondent is permitted to transfer, alienate or create any third party interest in respect of the property in dispute then the award, if any, which may be passed in his favour would get nugatory and it would be difficult for him to ask the respondent to execute a sale deed when a third party interest has already been created by sale of property in dispute and delivering the possession to the third party. In the case before this Court since the plaintiff has made out at least prima facie case for specific performance of the agreements dated 16 th September, 2009, the suit property needs to be protected against creation of any third party interest so that in the event of the Court ultimately coming to the conclusion that time was not the essence of the contract, the decree passed in his favour may not turn nugatory and the Court may be able to execute it by directing the defendant to execute the sale deed in favour of the plaintiff and deliver the possession of the suit property to him.
46. For the reasons given in the preceding paragraphs, I am of the considered view that the suit property needs to be preserved against any sale, transfer, CS(OS)No. 2051/2010 Page 69 of 72 assignment or creation of any third party interest therein during pendency of the suit, so that in the event of the Court ultimately holding that the time was not the essence of the contract or that the plaintiff had fulfilled all his obligations under the agreements and had met the deadline stipulated in the agreements, by obtaining letter dated 15th September, 2010 from L&DO or that the delay in completion of the transaction was attributable to the defendants as claimed by the plaintiffs, the Court may be in a position to pass an effective and meaningful decree which does not carry with it the burden of a third part interest in the suit property created during pendency of the suit. In case interim order already granted to the plaintiff is not confirmed, the defendants may dispose of the suit property or may create third party interest therein, thereby defeating the very object behind filing of the suit. On the other hand, the defendants are not likely to suffer any irreparable loss in case they are restrained from selling, assigning or transferring the suit property and from creating any third party interest therein during pendency of the suit. They will continue to enjoy the suit property as they are doing at present. The balance of convenience thus lies in favour of CS(OS)No. 2051/2010 Page 70 of 72 maintaining status quo during pendency of the suit. However, in view of the decision of a Division Bench of this Court in Mohan Overseas P. Ltd vs. Goyal Tin & General Industries 169 (2010) DLT 487 (DB), it would be appropriate if the plaintiff is directed to deposit the balance sale consideration in this Court by way of an FDR in the name of Registrar General of this Court initially for a period of one year. Such a condition will also ensure that having obtained an interim order, the plaintiff does not protract the trial of the case and the final decision can be rendered at an early date.
47. In view of the above discussions, the defendants are hereby restrained from selling, transferring, assigning, mortgaging or parting with possession of the suit property or any part thereof in any manner including letting it out and from creating any third party interest therein during pendency of the suit, without prior permission of the Court, subject to the plaintiff depositing an amount of Rs 30.68 crores by way of an FDR initially for a period of one year in the name of Registrar General of this Court within four weeks from the date of this order. This amount has been CS(OS)No. 2051/2010 Page 71 of 72 arrived at by deducting the amount of Rs 1 crore which the plaintiff paid as earnest money and the amount of about Rs 12 lakhs which he claims to have spent in obtaining conversion of leasehold rights into freehold for and on behalf of defendants. In the event of the plaintiff failing to deposit the aforesaid amount of Rs 30.68 crores within a period of four weeks, the interim order granted by this Court shall stand automatically vacated, without any further order and the defendants shall be at liberty to deal with the property any manner they like. The observations made in this order being tentative, and necessary for the purpose of deciding on interim relief, will not affect the decision of the suit on merits. Both the IAs stand disposed of in terms of this order.
(V.K. JAIN) JUDGE FEBRUARY 04, 2011 Vk/bg CS(OS)No. 2051/2010 Page 72 of 72