Delhi District Court
Sh. Arvinder Singh vs Mr. Jai Raj Seth on 31 July, 2023
IN THE COURT OF MR. SATYABRATA PANDA, ADJ-04,
PATIALA HOUSE COURTS, NEW DELHI
CS No. 59416 of 2016
Date of Institution : 24.07.2006
Final arguments heard : 07.07.2023
Date of Judgment : 31.07.2023
Sh. Arvinder Singh
S/o Sh. Bhaginder Singh,
R/o 107, AGCR Enclave, Delhi-92 .....Plaintiff
VS.
Mr. Jai Raj Seth
S/o Late Sh. B.D. Seth
R/o BB-1-8, Munirka Flats
New Delhi-67 .....Defendant
JUDGMENT
1. The plaintiff has filed the present suit seeking decree for specific performance of agreement dated 11/01/2006 and for execution of sale document in respect of property bearing no. UG-35, Ansal Chamber-I, 3, Bhikaji Cama Place, New Delhi and delivery of physical possession.
2. The case of the plaintiff as pleaded in the plaint is as follows. It is stated that the plaintiff alongwith his partner was running a business under the name and style of 'Ageiss Infotech' and was the authorized service agent for phones of LG Electronics Pvt. Ltd. Since the plaintiff was in need of commercial space for expanding his business, therefore he decided to purchase a shop CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 1 of 51 in Bhikaji Cama Place in his own name. The defendant was interested in selling his shop bearing No. UG-35, admeasuring 444 Sq. ft. situated at Ansal Chamber-1, 3, Bhikaji Cama Place, New Delhi-66 (hereinafter referred to as the suit property), and accordingly the defendant approached the plaintiff for sale of the said shop. After negotiations, a receipt-cum-agreement dated 11/01/2006 was executed between the defendant and plaintiff and it was agreed that the suit property would be sold to the plaintiff for a total sale consideration of Rs. 66 lacs. A sum of Rs. 6 lacs was paid to the defendant by plaintiff in cash and it was agreed that the defendant had to get the suit property transferred/registered in the name of the plaintiff or his nominee after permission from the Estate Office within a period of 95 days from the date of receipt-cum-agreement. The defendant was also to clear the dues of the suit property till the date of handing over of possession. It was also agreed that the transfer charges were to be borne by plaintiff. The balance sale consideration of Rs.60 lacs was to be paid by the plaintiff on or before 15/04/2006 subject to the defendant getting the shop transferred/registered in the name of the plaintiff within a period of 95 days and also obtaining the no-dues certificates in respect of the suit property. The receipt-cum-agreement dated 11/01/2006 was executed in the presence of Mr. Neeraj Anand, who was the property dealer in the transaction, and Mr. Atul Gupta, who was the partner of the plaintiff. It is further stated in the plaint that since the plaintiff was in dire need of the premises, therefore the defendant also gave the suit property on rent to the plaintiff's partnership firm i.e. Ageiss Infotech vide lease deed dated 13/01/2006. The said CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 2 of 51 lease commenced w.e.f. 16/01/2006 and was to remain in force till 15/04/2006, i.e. the date by which the sale transaction was to be completed under the receipt-cum-agreement dated 11/01/2006.
3. It is further stated in the plaint that the defendant by the end of January 2006 pressurized and persisted with the plaintiff to complete and close the whole deal by 15/02/2006 as the defendant was in a serious financial crunch. The same came as a shock to the plaintiff as he had arranged his finances in terms of agreement-cum-receipt and was to pay the balance by the first week of April, 2006. However, since the plaintiff was always ready and willing, therefore he immediately wrote a letter and sent it to defendant on 26/01/2006 stating that as per the request of the defendant, the plaintiff was arranging the funds so that the deal could be finalized immediately. The plaintiff had arranged the money through friendly loans. However, the defendant was requested to clear the electricity, water, maintenance charges and also obtain no-objection certificate along with receipts so that the deal could be finalized.
4. It is further stated in the plaint that since, according to the defendant and plaintiff everything was finalized, therefore, the lease deed dated 13/01/2006 was also cancelled on 28/01/2006 and the payment received by the defendant as rent was also returned to Mr. Atul Gupta, partner of plaintiff.
5. It is further stated in the plaint that on 29/01/2006, the plaintiff was informed by another property dealer and by a friend of his CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 3 of 51 that the defendant was trying to sell the suit property to some other persons through some other property dealer/agent behind the back of plaintiff. Immediately, a letter dated 30/01/2006 was written by the plaintiff to Ansal Properties & Industries Ltd. informing about the receipt-cum-agreement for sale of the suit property between the parties and requesting not to grant any permission for transfer of the said shop to any other person/firm. Further, since the plaintiff became very apprehensive, therefore he also sent a legal notice dated 13/02/2006 to the defendant stating that the plaintiff was ready and willing to perform his part of the agreement-cum-receipt and called upon the defendant to not to sell the said shop.
6. It is further stated in the plaint that the defendant wrote a letter dated 13/02/2006, in response to the plaintiff's letter of 26/01/2006, which was received by the plaintiff in or around the third week of February wherein the defendant made false and baseless allegations and alleged some oral understanding. The defendant falsely alleged in the said letter that in pursuance to the receipt dated 11/01/2006, the plaintiff had agreed orally to pay a sum of Rs. 20 lacs on 21/01/2006, Rs. 20 lacs on 28/01/2006 and balance Rs.20 lacs at the time of registration. It was also alleged that the plaintiff failed to perform his part of understanding till 31/01/2006. It is the case of the plaintiff that these false and baseless allegations were made by the defendant with a view to wriggle out of the receipt-cum-agreement dated 11/01/2006. In the said letter, the defendant also alleged that since the plaintiff failed to comply with the terms of the contract therefore the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 4 of 51 defendant was not in a position to buy other big properties.
7. It is further stated in the plaint that the defendant also replied to the legal notice sent by plaintiff on 13/02/2006 through his counsel vide reply legal notice dated 28/02/2006 in which again a false stand was taken by the defendant. The plaintiff issued another letter dated 03/03/2006 to Ansal Properties & Industries Ltd. again requesting them to not to entertain any application for the transfer of the subject shop. Thereafter, the plaintiff addressed a letter dated 17/03/2006 to the defendant by registered post and informed that he was ready with the funds for the final execution of the documents and also requested the defendant to clear all the dues such as electricity, water and other charges and obtain no- objection certificate from the concerned authorities. However, since there was no response from the defendant, therefore, the plaintiff became apprehensive and as per the legal advice received filed a suit for permanent and mandatory injunction in the Court of the Ld. Civil Judge in Tees Hazari, Delhi. The defendant filed written statement contesting the said suit and also questioned the maintainability of the said suit. Accordingly, a preliminary issue was framed and the Ld. Civil Judge vide order dated 01/05/2006 dismissed the suit on the ground that the suit was not maintainable as the cause of action had not arisen and therefore such a suit would not lie.
8. It is further stated in the plaint that, without prejudice to the suit filed by the plaintiff, the plaintiff vide letter dated 06/04/2006 requested the defendant to obtain the no-dues certificates for the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 5 of 51 various services and the no-objection certificate from the transferring authority as the funds were lying ready with him. It was again pointed out that plaintiff was ready with the funds and was only waiting for confirmation and the documents. However, again there was no response from defendant. On 13/04/2006 and 15/04/2006, the plaintiff accordingly prepared the pay orders of value of Rs.60 lacs in the name of defendant and also prepared the agreement to sell dated 15/04/2006 between defendant and plaintiff and wrote a letter to defendant dated 15/04/2006 requesting the defendant to execute the relevant documents and give possession and no-objection and no-dues certificate in favour of plaintiff of the aforesaid shop and take the pay orders. However, there was no response from defendant. Thereafter, the plaintiff sent another legal notice dated 22/04/2006 calling upon the defendant to execute the agreement to sell, take payment and hand over the possession of the shop to plaintiff within 10 days of the receipt of the notice. The plaintiff also found out that during this period, the defendant had also not cleared the dues of the various authorities and had also not cleared the electricity and water charges. The said legal notice was replied by defendant through his counsel on 12/05/2006 in which again a false stand was taken by the defendant.
9. It is further stated in the plaint that it became evident that the defendant was not interested in executing the sale document in plaintiff's favour and was also not interested to honour the agreement-cum-receipt dated 11/01/2006 by making false and frivolous allegations despite the fact that the plaintiff was ready CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 6 of 51 and willing to pay the defendant the balance amount of Rs. 60 lacs since the last week of January, 2006. The plaintiff was left with no alternative but to send a legal notice dated 27/05/2006 to the defendant through registered post which was received by the defendant on 30/05/2006, however, no reply was given by the defendant. It is stated that the plaintiff has always been ready and willing to perform his obligations. The defendant for the reasons best known to him was acting in a fraudulent manner and had no intention to execute and register the agreement to sell and get a no-objection from the Estate Officer. It is stated that the plaintiff from day one was ready and willing to perform his part of the contract and has taken every possible step to complete the transaction. However, the defendant had at every stage tried to delay and avoid the execution of the sale deed in favour of the plaintiff.
10.On the basis of the aforesaid pleadings, the plaintiff has filed the present suit seeking the following reliefs:
"It is, therefore, most respectfully prayed that this Hon'ble Court be pleased to pass a decree of specific performance of agreement 11.01.2006 in favour of the plaintiff and against the defendant in respect of the property no. UG-25, Ansal Chamber- I, 3, Bhikaji Cama Place, New Delhi and direct the defendant to execute the agreement to sell in respect of the suit property in favour of the plaintiff or her nominee and to hand over/deliver the actual vacant CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 7 of 51 physical possession of the suit property to the plaintiff free from encumbrances, charges, third party interest etc. after obtaining no dues certificates, permission from Estate Office.
This Hon'ble Court be also pleased to pass a decree of permanent injunction of agreement
11.01.2006 in favour of the plaintiff and against the defendant in respect of the property no. UG-25, Ansal; Chamber-I, 3 , Bhikaji Cama Place, New Delhi.
If the defendant fails to comply with the above directions, then it is prayed that the Hon'ble Registrar or any other officer of this Hon'ble Court may be appointed to execute the decree which may be passed in favour of the plaintiff in terms of the above prayer.
Award costs of the suit in favour of the plaintiff and against the defendants.
Such other and further orders, which this Hon'ble Court deems fit and proper in the facts and circumstances of the case be also passed in favour of the plaintiff and against the defendants."
11.The defendant has filed written statement in his defence. The CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 8 of 51 case of the defendant as pleaded in his written statement is as follows. It is stated that sometime around the month of January 2006, one Mr. Neeraj Anand, a property dealer having his office at Bhikaji Cama Place, approached the defendant several times to sell the shop to the plaintiff. The ostensible reason given was that the plaintiff was looking for space where he would open a service centre and the plaintiff urgently required to open the service centre in that particular area. The defendant originally refused to sell the shop, however after repeated and persistent requests by Mr. Neeraj Anand and upon the said Mr. Neeraj Anand offering to get a larger shop within the Bhikaji Cama Place complex, the defendant relented. Thereafter, on 11/01/2006 certain negotiations took place between the plaintiff and the defendant. As per the case of the defendant, the salient points of discussion were as follows:
i) The defendant would sell the said shop for consideration of ₹ 66 lakh; and
ii) Approximately 10% of the sale consideration i.e. ₹ 6 lakhs would be paid upfront and immediately;
and
iii) The balance amount would be paid in 3 instalments of ₹ 20 lakh each; and
iv) The first and second instalments would be paid on or before 21/01/2006 and 28/01/2006, respectively, and the last instalment would be paid at the time of registration.
12.It is further stated in the written statement that the plaintiff CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 9 of 51 informed the defendant that there were certain problems in providing draft/pay order that very day and therefore requested the plaintiff to accept ₹ 6 lacs in cash with the commitment to provide draft/pay order within 3 working days, whereupon the cash was to be returned. It is stated that spurred by the assurances of the plaintiff and Mr. Neeraj Anand, the defendant agreed to the said scheme. It is stated that the plaintiff gave sum of ₹ 6 lacs to Mr. Neeraj Anand which was handed over to the defendant and the defendant signed the receipt dated 11/01/2006. It is further stated that at this stage there was a clear understanding that a formal agreement to sell would be executed between the plaintiff and the defendant in terms of the understanding agreed upon as described above.
13.It is further stated in the written statement that on 12/01/2006, acting upon the representations of the plaintiff and Mr. Neeraj Anand, the defendant agreed to enter into a lease deed whereby the front portion of the shop in question was leased out to the plaintiff. In this manner, the defendant entered into a lease agreement dated 13/01/2006 with M/s. Aegiss Infotech, which was the partnership firm of the plaintiff and one Sh. Atul Gupta.
14.It is further stated in the written statement that immediately thereafter, based on the assurances of the plaintiff, the defendant in the capacity of a prospective buyer received an offer to purchase Shop Nos. 7, 8, 33 and 34 forming one unit and admeasuring about 772 square feet, for total consideration of ₹ 90 lacs, based on the commitment made by the plaintiff to make CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 10 of 51 payment of ₹ 20 lacs by 21/01/2006 and another ₹ 20 lacs by 28/01/2006. It is stated that in this manner, on the basis of the commitments made by the plaintiff, the defendant took upon himself certain obligations on the bona fide belief that the plaintiff would honour his commitment in respect of the purchase of the said shop within the stipulated time frame and in the stipulated manner.
15.It is further stated in the written statement that however, the plaintiff failed to honour his commitment to replace the cash of ₹ 6 lacs with a demand draft/pay order and also to make payment of ₹ 20 lacs on 21/01/2006 and another ₹ 20 lacs on 28/01/2006 and to execute a registered agreement to sell. It is stated that upon being approached by the defendant, the plaintiff agreed to execute the registered agreement to sell and to replace the cash with bank draft/pay order and to make payment of the two instalments of ₹ 20 lacs on 28/01/2006. However, the plaintiff again failed to honour his commitments on 28/01/2006. Thus, the message was loud and clear to the defendant that a fraud had taken place with the defendant. Without honouring his commitments and having induced the defendant into executing the rent agreement, the plaintiff had not only entered into and was using the defendant's premises, but was going to misuse the receipt issued by the broker not only to deprive the defendant of his premises but also to leave the defendant without any premises, since the defendant could not have bought alternative property to shift to as a result of the plaintiff's failure to keep his aforesaid promises. It is stated that the defendant in mental agony CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 11 of 51 spoke to the partner of the plaintiff on 28/01/2006 and demanded that the commitments made by the plaintiff and the partner be honoured to return the rent amount, vacate the premises and cancel the rent agreement as it had become obvious that the plaintiff was not interested in going through with his commitment anymore.
16.It is further stated in the written statement that after such failure on 28/01/2006 and upon hearing the demand for compliance made by the defendant, the plaintiff's business partner peacefully vacated the tenanted portion of the property of the defendant after cancelling the lease agreement on 28/01/2006. It was evident that the plaintiff had voluntarily withdrawn from his commitment and the earnest money was liable to be forfeited. As a consequence of the failure of the plaintiff to keep to his promises, the defendant was unable to buy any alternative property as planned. On this basis, the defendant has sought the dismissal of the suit.
17. The plaintiff has filed replication to the written statement in which the plaintiff has denied the defence put forward by the defendant and has reiterated the averments made in the plaint.
18. Vide order dated 08/04/2008, the following issues were framed in the suit:
1. Whether the plaintiff is entitled to a decree of specific performance of agreement to sell dated 11/01/2006 in respect of the suit property? OPP CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 12 of 51
2. Whether the plaintiff was ready and willing to perform his part of the contract under the agreement to sell dated 11/01/2006 and if not, to what effect? OPP
3. Whether the defendant could forfeit the advance of ₹ 6 lakh paid by the plaintiff to the defendant pursuant to the purported agreement to sell dated 11/01/2006 and if so, to what effect? OPD
4. Relief.
19. In support of his case, the plaintiff has examined himself as PW- 1 and has tendered his affidavit in evidence Ex.PW-1/A in which he has deposed along the lines of the averments made in the plaint. The plaintiff has relied upon the following documents:
1) Receipt cum agreement dated 11.01.2006
Ex.PW1/1.
2) Lease Deed dated 13.01.2006 Ex.PW1/2 (already admitted as Ex.P-1)
3) Letter sent on 27.01.2006 to defendant and its registry receipts Ex.PW1/3 and Ex.PW1/4.
4) The cancelled lease deed Ex.PW1/5 (already admitted as Ex.P-2)
5) Letter dated 30.01.2006 Ex.PW1/6.
6) Legal notice dated 13.02.2006 and its registry and UPC receipts Ex.PW1/7 to Ex.PW1/8.
7) Letter dated 13.02.2006 Ex.PW1/9 (already admitted as Ex.P-3)
8) Reply notice dated 28.02.2006 Ex.PW1/10 (already admitted as Ex.P-4) CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 13 of 51
9) Public notice published in newspaper TOI, Delhi on 28.02.2006 Ex.PW1/11.
10) Letter dated 03.03.2006 Ex.PW1/11 A.
11) Letter dated 17.03.2006 and its registry
receipt Ex.PW1/12 to Ex.PW1/13.
12) The office copy of letter dated 06.04.2006 and
its registry receipt re Ex.PW1/14 to Ex.PW1/15.
13) Letter dated 15.04.2006, photocopy of six pay orders and draft agreement to sell dated 15.4.2006 Ex.PW1/16 to Ex.PW1/23.
14) The notice dated 27.04.2006 and reply notice dated 12.05.2006 are Ex.PW1/24 to Ex.PW1/25. (already admitted as Ex.P-5)
15) Office copy of legal notice dated 27.05.2006 and its registry and UPC receipts and AD cards Ex.PW1/26 to Ex.PW1/29.
16) Memo of parties admitted as Ex.P-6.
20. The plaintiff has also examined his partner Mr. Atul Gupta as PW2 who tendered his affidavit in evidence as Ex.PW2/A in which he has also deposed along the lines of the plaint.
21. The plaintiff also examined the property broker Mr. Neeraj Anand as PW3 and he tendered his affidavit in evidence as Ex.PW3/A. However, after his part cross-examination, PW-3 did not again appear for his further cross-examination and the plaintiff chose to close his evidence, and it was observed vide order dated 22.08.2017 that the testimony of PW-3 would not be CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 14 of 51 read in evidence.
22. In support of his case, the defendant has examined himself as DW-1 and tendered his affidavit in evidence as Ex.DW-1/A in which he has deposed along the lines of the averments made in the written statement. He has relied upon the following documents:
1) Detailed terms and conditions contained in letter dated 16.01.2006 Ex.DW1/1.
2) Letter dated 23.01.2006 with endorsement made by Ashok Luthra Ex.DW1/2.
23. The defendant has also examined as DW-2 Sh. Ashok Luthra, with whom the defendant is supposed to have entered into an agreement to sell as a buyer. DW-2 has tendered his affidavit in evidence Ex.DW-2/A and he was cross-examined by the plaintiff.
24. The learned counsel for the plaintiff has referred to the relevant pleadings and evidence in support of the plaintiff and has submitted that the plaintiff has been able to prove his case as pleaded in the plaint and that the plaintiff is entitled to decree as prayed for. It is submitted that the plaintiff has proved the receipt-cum-agreement dated 11/01/2006 which was a valid agreement to sell between the parties. It is submitted that the defendant had in his cross examination admitted that he had signed the receipt-cum-agreement dated 11/01/2006 and other than this agreement there was no other understanding in writing for sale of the property between the parties. It is submitted that CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 15 of 51 even otherwise the defendant had admitted the execution of the receipt-cum-agreement dated 11/01/2006 in the written statement. It is submitted that the defendant has also admitted that he had received the advance sum of Rs. 6 lacs under the receipt-cum-agreement dated 11/01/2006. It is submitted that the defendant had failed to lead any reliable evidence to show that there was any other oral agreement between the plaintiff and the defendant or there was any novation of the agreement to sell.
25. It is further submitted that the plaintiff has proved the necessary ingredients for specific performance of the agreement to sell. It is submitted that the plaintiff has been able to prove his readiness and willingness to perform his part of the obligations. It is submitted that the defendant had admitted the receipt of the legal notices and letters from the plaintiff where time and again the plaintiff has stated that he had sufficient funds and was ready and willing to perform his part of the obligations. It is further submitted that the conduct of the plaintiff was bona fide which was evident from the fact that six pay orders dated 13/04/2006 and 15/04/2006 totaling to an amount of ₹ 60 lacs were drawn by him in favour of the defendant which established that the plaintiff was possessed of sufficient funds. It is further submitted that in the cross-examination, no question was put to the plaintiff by the defendant regarding availability of necessary funds with him. It is further submitted that there was no evidence from the defendant to show that the plaintiff did not have funds to perform his obligations. The learned counsel for the plaintiff has relied upon the following case laws in support of his claim for specific CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 16 of 51 performance: Devinder Singh vs Virender Aran (CS(OS) No. 2589/2011) Delhi High Court; and P. Ramasubbamma vs V. Vijayalakshmi & Ors. (Civil Appeal No. 2095/2022).
26. It is further submitted that the objection of the learned counsel for the defendant under Order II Rule 2 CPC raised during the course of oral arguments is liable to be rejected as this objection was never taken in the written statement. It is submitted that the defendant ought to have specifically raised this objection in the written statement on the basis of which a specific issue would have been framed giving the plaintiff an opportunity to demonstrate that the cause of action in the subsequent suit was different. It is submitted that the defendant cannot raise this objection at the stage of final arguments. In this regard, the learned counsel for the plaintiff has relied upon the following case law: Coffee Board v. Ramesh Exports (P) Ltd., (2014) 6 SCC 424. It is further submitted that, in any case, the objection under Order II Rule 2 CPC does not hold as the cause of action in the previous suit and the subsequent suit were different in as much as the earlier suit was premature and was rejected as such.
27. It is further submitted by the learned counsel for the plaintiff that the testimony of the PW-3 Mr. Neeraj Anand, who was the property broker, cannot be discarded even if his cross- examination was not concluded. It is submitted that he had already been substantially cross-examined and he did not deliberately avoid his further cross-examination. It is submitted that in case the defendants were inclined to further cross-examine CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 17 of 51 PW-3, then the defendants ought to have sought recall of PW-3.
28. It is further submitted that there were various contradictions in the pleadings and the evidence of the defendant as there was no mention of any alternate arrangement between Mr. Ashok Luthra DW-2 and the defendant in any of his notices/letters and the same was alleged for the first time after filing of the suit. It is further submitted that PW-2 in his cross-examination conducted on 10/11/2021 specifically admitted that no formal agreement to sell between him and the defendant was reduced in to writing and that he had never sent any communication/letter to the defendant cancelling the oral agreement between them. It is submitted that thus, the letters dated 16/01/2006 and 23/01/2006 which were filed by the defendant along with his written statement were false and fabricated.
29. On the other hand, the learned counsel for the defendant has referred to the relevant pleadings and evidence in support of the defendant and has submitted that the suit is liable to be dismissed. It is argued that the suit was not maintainable under Order II Rule 2 CPC as an earlier suit filed by the plaintiff being Suit No. 819/2006 for permanent injunction restraining the defendant from parting with the possession of the suit property was dismissed vide order dated 01/05/2006 passed by the Ld. Civil Judge, Delhi.
30. It is further submitted that during the negotiations, there was an understanding as pleaded in the written statement that the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 18 of 51 plaintiff was to pay the first, second and third instalments on or before 21/01/2006, 28/01/2006 and at the time of registration, respectively. It is submitted that the defendant had signed the receipt dated 11/01/2006 on the assurance of the plaintiff and the broker Mr. Neeraj Anand with the clear understanding that a formal agreement to sell would be executed incorporating these conditions. It is submitted that the receipt dated 11/01/2006 was only a receipt and not an agreement to sell.
31. It is further submitted that the broker Mr. Neeraj Anand, who had been called as a witness as PW-3 had abandoned his testimony and evaded his further cross-examination and that the plaintiff had dropped him as a witness. It is submitted that an adverse inference would be drawn against the plaintiff for failing to call PW-3 for conclusion of his cross-examination and for dropping him as a witness.
32. It is further submitted that the parties had concurrently also entered into a lease deed dated 13/01/2006 which was executed between the defendant and the plaintiff's partnership firm. It is submitted that it is the admitted position that the lease deed was mutually cancelled between the parties on 28/01/2006. It is submitted that the lease deed had been cancelled as the entire sale transaction itself had been cancelled.
33. I have heard the submissions of the learned counsels for the parties and I have perused the record.
CS No. 59416 of 2016ARVINDER SINGH Vs. J.R. SETH Page No. 19 of 51
34. My issue-wise findings are as follows.
Re: Objection of defendant under Order II Rule 2 CPC
35. During the course of the final arguments, the learned counsel for the defendant has raised the objection that the suit was barred under Order II Rule 2 CPC in as much as the plaintiff had filed a previous suit for permanent injunction against the defendant herein in respect of the suit property before the Ld. Civil Judge being Suit No. 819/2006 entitled as Sh. Arvinder Singh v. Sh. Jai Raj Singh which came to be dismissed as not maintainable vide order dated 01/05/2006. I am afraid this objection would not be available to the defendant at the final stage of arguments when no such objection was raised by the defendant in the written statement and no specific issue was framed thereon. It would be appropriate to refer to the decision of the Hon'ble Supreme Court in Coffee Board (supra) in which it was held as under:
"11. The bar of Order 2 Rule 2 comes into operation where the cause of action on which the previous suit was filed, forms the foundation of the subsequent suit; and when the plaintiff could have claimed the relief sought in the subsequent suit, in the earlier suit; and both the suits are between the same parties. Furthermore, the bar under Order 2 Rule 2 must be specifically pleaded by the defendant in the suit and the trial court should specifically frame a specific issue in that regard wherein the pleading in the earlier suit must be examined and the plaintiff is given an opportunity to demonstrate that the cause of action in the subsequent suit is different. This was held by this Court in Alka Gupta v. Narender Kumar Gupta [(2010) 10 SCC 141 : (2010) 4 SCC (Civ) 73] which referred to the decision of this Court CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 20 of 51 in Gurbux Singh v. Bhooralal [AIR 1964 SC 1810] wherein it was held that: (Alka Gupta case [(2010) 10 SCC 141 : (2010) 4 SCC (Civ) 73] , SCC p. 147, para 13) "13. ... '6. In order that a plea of a bar under Order 2 Rule 2(3) of the Civil Procedure Code should succeed the defendant who raises the plea must make out: (1) that the second suit was in respect of the same cause of action as that on which the previous suit was based; (2) that in respect of that cause of action the plaintiff was entitled to more than one relief; (3) that being thus entitled to more than one relief the plaintiff, without leave obtained from the court omitted to sue for the relief for which the second suit had been filed. From this analysis it would be seen that the defendant would have to establish primarily and to start with, the precise cause of action upon which the previous suit was filed, for unless there is identity between the cause of action on which the earlier suit was filed and that on which the claim in the latter suit is based there would be no scope for the application of the bar.' (Gurbax Singh case [AIR 1964 SC 1810] , AIR p. 1812, para
6)"
12. The courts in order to determine whether a suit is barred by Order 2 Rule 2 must examine the cause of action pleaded by the plaintiff in his plaints filed in the relevant suits (see S. Nazeer Ahmed v. State Bank of Mysore [(2007) 11 SCC 75] ). Considering the technicality of the plea of Order 2 Rule 2, both the plaints must be read as a whole to identify the cause of action, which is necessary to establish a claim or necessary for the plaintiff to prove if traversed. Therefore, after identifying the cause of action if it is found that the cause of action pleaded in both the suits is identical and the relief claimed in the subsequent suit could have been pleaded in the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 21 of 51 earlier suit, then the subsequent suit is barred by Order 2 Rule 2."
(Emphasis supplied by me)
36. Thus, the defendant ought to have taken a specific objection as to the bar of Order II Rule 2 CPC in its written statement, so that the plaintiff would have had the opportunity to respond in its replication. Since no objection was raised by the defendant, even no specific issue was framed in the suit regarding the bar of Order II Rule 2 CPC, and even as such the plaintiff did not have the opportunity to present his stand in the trial in this respect. Thus, I cannot permit the defendant to now raise the objection of bar of Order II Rule 2 CPC. Furthermore, no pleadings of the previous suit have been filed on the record in the present suit, which makes it impossible to analyse as to what was the nature and cause of action of the previous suit. Even as such, the objection of the defendant under Order II Rule 2 CPC cannot be sustained. Even otherwise, it does not appear that the cause of action in the two suits is similar. Vide the order dated 01/05/2006 passed by the Ld. Civil Judge in the previous suit being Suit No. 819/2006, the previous suit for permanent injunction was dismissed on a preliminary issue of maintainability on the basis that the appropriate remedy of the plaintiff was to file a suit for specific performance and damages. Subsequently, the present suit came to be filed for the relief of specific performance.
Issue 1- Whether the plaintiff is entitled to a decree of specific performance of agreement to sell dated 11/01/2006 in respect of the suit property? OPP CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 22 of 51 Issue 2- Whether the plaintiff was ready and willing to perform his part of the contract under the agreement to sell dated 11/01/2006 and if not, to what effect? OPP
37. The factum of execution of the receipt dated 11/01/2006 Ex.PW- 1/1 is admitted between the parties. This receipt dated 11/01/2006 Ex.PW-1/1 was executed between the plaintiff and the defendant with the witnesses being Mr. Neeraj Anand PW-3, who was the broker in the deal and Mr. Atul Gupta PW-2, who was the partner of the plaintiff. It would be appropriate to extract the said receipt Ex.PW-1/1 as follows:
"RECEIPT Received with thanks a sum of Rs. 6,00,000/- (Rupees SIX LACS ONLY only) in cash from Sh. ARVINDER SINGH R/o. 107, AGCR Enclave, Delhi 92 through M/s. Noble Estates as Earnest money against Sale of our Shop No. UG-35 measuring 444 sqft (Super Area) situated at ANSAL CHAMBERS-I, 3, BHIKAJI CAMA PLACE, N.D. - 66.
This shop is my/our self acquired property and is free from all sorts of encumbrances, mortgages, lien on it. The sale price of the shop/flat has been settled at Rs. 66,00,000/- (Rupees SIXTY SIX LACS ONLY only). The balance amount of Rs. 60,00,000/- (Rupees SIXTY LACS ONLY only) shall be paid on or before the 15th April 06 the date of registration/transfer. I/we undertake to get the said flat transfer/registered in the name of the buyer or its nominees after permission from the estate officer within the period of Ninety Five days. The Transfer Charges to be borne by the Seller.
With the intending buyer or its nominees fails to arrange the payment of the balance sale consideration as agreed upon within the period specified above, the transaction shall stand CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 23 of 51 cancelled and the earnest money forfeited. In case, I failed to complete the transaction, I/we shall pay the double amount of the earnest money to the buyer. In case I/we fail to complete the transaction and do not execute or evade the execution of the transfer or sale as stipulated above then the buyer or his nominee has the right to get the sale executed through the special performance of this undertaking to the court of law at my costs & expenses and also to recover the expenses & damages.
The maintenance charges shall be paid & cleared by the Seller & the Seller shall obtain objection Certificate from ........
All dues Property tax, Transfer Charges, Electricity and other dues outstanding if any, till the date of handing over the physical vacant possession/transfer date will be paid by the Seller/and thereafter by the buyer.
I/we shall give the vacant physical possession of the said Flat to the buyer on the spot at the time of Registration/Transfer.
............
I/we accept and confirm the above stated terms and conditions.
Dated 11th JAN 06 Signature of the Seller (OWNER) (Signature of Sh. Jai Raj Seth) Name Mr. JAI RAJ SETH S/o. Late Sh. B.D. Seth R/o. BB-1-B, MUNIRKA FLATHS NEW DELHI - 110007 WITNESSES:-
.....
....
...
Accepted.
(Signatures of Sh. Arvinder Singh)"
(Note- The underlined portion are handwritten) CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 24 of 51
38. Simultaneously, on 13/01/2006 there was a lease agreement Ex.D-1 executed between the defendant as lessor and M/s. Aegiss Infotech, which was the partnership firm of the plaintiff and Mr. Atul Gupta, as the lessee in respect of the suit property. The execution of this lease is also admitted between the parties. This lease was for a period of 3 months with effect from 16/01/2006 till 15/04/2006 and the rent amount was Rs. 14,000 per month and it was recorded in the lease that the lessee had paid a sum of Rs. 14,000 towards the rent of the first month from 16/01/2006 to 15/02/2006. Mr. Neeraj Anand PW-3 was also a witness to the lease agreement Ex.D-1. The lease was till 15/04/2016, i.e. the date when the sale was to be completed as per Ex.PW-1/1.
39. It is the case of the defendant that at the time of negotiations only when the receipt Ex.PW-1/1 was executed it was the understanding between the parties that the balance sale consideration of Rs. 60 lacs was to be paid in three instalments of Rs. 20 lacs each out of which the first two instalments were to be paid on or before 21/01/2006 and 28/01/2006, respectively, and the last instalment was to be paid at the time of registration.
40. The receipt dated 11/01/2006 Ex.PW-1/1 provides that the balance amount of Rs. 60 lacs was to be paid on or before 15/04/2006. I cannot accept the claim of the defendant that at the time of execution of the receipt itself the parties were of the agreement that the balance sale consideration of Rs. 60 lacs was to be paid in three instalments of Rs. 20 lacs each out of which CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 25 of 51 the first two instalments were to be paid on or before 21/01/2006 and 28/01/2006 and the last instalment was to be paid at the time of registration. If such was the case, then there is no reason why Ex.PW-1/1 would not have stated so. The defendant has as DW-1 in his cross-examination admitted that these terms of payment of instalments of Rs. 20 lacs each were not incorporated in any document. It is hard to believe that any such terms would not have found place in Ex.PW-1/1 when the said document, although titled only as a 'receipt' contained the terms of agreement between the parties. Furthermore, as per the case of the defendant, the last instalment was to be paid at the time of the registry. However, the defendant has not specified when the registry was to be done. The defendant has denied that the payment was to be completed on or before 15/04/2006. This would mean that there would have been no outer-limit for execution of the sale document and again it seems hard to believe that the parties would not have agreed to a specific timeline for conclusion of the deal by payment of balance consideration and execution of the sale document. The defendant as DW-1 has in the course of his cross-examination sought to develop a stand that he had signed the Ex.PW-1/1, however, at that time the said document was not fully filled. He has also deposed that when he signed Ex.PW-1/1, no date was mentioned in Ex.PW-1/1 when it was signed by him showing as to when the transaction was to be completed. In my view, the defendant has only sought to improve his case in cross-examination. It seems unlikely for any ordinary prudent man to sign a blank document in the nature of an agreement to sell in relation to immoveable property for CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 26 of 51 valuable consideration. It is not the case of the defendant that he had any old acquaintance or relationship with the plaintiff or with the broker Mr. Neeraj Gupta, which could have made it possible for the defendant to blindly trust them. The parties were strangers to each other and it is hard to believe that the defendant would have blindly signed Ex.PW-1/1 even when it was blank and not filled. Furthermore, this version of the defendant that Ex.PW-1/1 was not filled when he had signed it seems to be an afterthought since the defendant failed to state this anywhere in his correspondence with the plaintiff or even in his written statement or even in his affidavit in evidence Ex.DW-1/A. It is very hard to believe that in case, the defendant had been cheated by the plaintiff in such a manner by agreeing to different terms and then filling in different terms in the Ex.PW-1/1 then such an issue would not have been raised by the defendant. Any ordinary person would have raised this issue at the very first instance. However, the defendant does not bring up this issue in any of his correspondence with the plaintiff. Thus, the stance of the defendant is not believable.
41. It is the case of the plaintiff in the plaint that although as per the receipt dated 11/01/2006 Ex.PW-1/1, the balance amount of Rs. 60 lakh was to be paid on or before 15/04/2006, subsequently, the defendant by the end of January 2006 had pressurized the plaintiff to complete and close the deal by 15/02/2006 as the defendant was in serious financial crunch. It is further the plaintiff's case that as per the request of the defendant the plaintiff had arranged the funds so that the deal could be finalized CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 27 of 51 immediately by 15/02/2006 and the plaintiff sent a letter to this effect to the defendant on 26/01/2006.
42. It does appear that immediately subsequent to the execution of the receipt dated 11/01/2006 Ex.PW-1/1 some developments had taken place in the understanding between the parties. The lease deed dated 13/01/2006 Ex.D-1 was mutually cancelled between the parties on 28/01/2006 and this does point to a direction that the original understanding under the agreement Ex.PW-1/1 had undergone some change. It is pertinent that the lease deed Ex.D-1 was simultaneous with the sale transaction and was to expire on 15/04/2006 i.e. the date when the sale was to complete.
43. It is the admitted position that the lease deed Ex.D-1 was mutually cancelled on 28/01/2006 and the advance of one month's rent of Rs. 14,000 was returned. The endorsement dated 28/01/2006 on the lease Ex.D-1 which is signed by the partner of the defendant i.e. Mr. Atul Gupta, reads as follows:
"Received back advance of Rs. 14,000/- & this deal is cancelled as rent agreement.
-sd.-
(Atul Gupta) 28/1/06"
44. It is the stand of the plaintiff in the plaint that the lease agreement Ex.D-1 was mutually cancelled on 28/01/2006 in as much as "everything was finalized" as stated by him in paragraph 7 of the plaint. This is stated by the plaintiff in the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 28 of 51 context of his claim that the defendant had by the end of January 2006 pressurized and persisted with the plaintiff to complete and close the whole deal by 15/02/2006 and that in as much as the plaintiff was always ready and willing, the plaintiff had arranged the funds to finalize the deal immediately as desired by the defendant. In the plaintiff's letter Ex.PW-1/3 (which does not bear a date but is stated by the plaintiff to have been written and sent to the defendant on 26/01/2006), the plaintiff had stated that as per the defendant's request to finalize the deal by 15/02/2006, the plaintiff had arranged the funds so as to enable him to execute the documents and the deal could be finalized by 15/02/2006. The plaintiff has as PW-1 deposed on the same lines as the plaint in his affidavit in evidence Ex.PW-1/A in paragraph 11 where it is stated that "since according to the defendant and the deponent every thing was finalized therefore the lease deed dated 13.1.2006 was also cancelled on 28.1.2006 and the payment received by defendant as rent was also returned to Mr. Atul Gupta, partner of deponent". Thus, the plaintiff's stand is that the lease Ex.D-1 was mutually cancelled on 28/01/2006 as the parties had agreed to prematurely close the deal by 15/02/2006 as had been desired by the defendant.
45. On a balance of probabilities, I find it difficult to accept that the lease Ex.D-1 was mutually cancelled on 28/01/2006 as the parties had agreed to close the transaction by 15/02/2006 as claimed by the plaintiff. It is the version of the plaintiff in the plaint that the lease deed Ex.D-1 was mutually cancelled as the parties had finalized everything i.e. it was now agreed that the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 29 of 51 deal would be closed prematurely on 15/02/2006. The plaintiff as PW-1 has reiterated this in his affidavit-in-evidence Ex.PW-1/A. However, in his cross-examination, the plaintiff has given a different reason for cancellation of the lease deed Ex.D-1. PW-1 has stated in his cross-examination as follows:
"... since, the defendant refused to renovate and carry out the operation property, therefore we had to take another premises on rent immediately and the lease dated 13.01.2006 was cancelled on 28.01.2006. ... ... ... It is correct to suggest that I had cancelled the lease agreement and vacated the suit premises voluntarily. Volunteered, it was according to the circumstances as we had to urgently start the business. ... ..."
46. Thus, in his cross-examination, the plaintiff has deposed that the lease was cancelled and the suit premises was vacated voluntarily as the defendant refused to renovate the suit property and according to the circumstances, the plaintiff had to start the business urgently. This deposition contradicts the position adopted by the plaintiff in the plaint that the lease was cancelled as everything had been finalized and the deal was to close on 15/02/2006, and thus the stand of the plaintiff to this effect appears doubtful. Furthermore, it does not appear plausible that the plaintiff would have chosen to vacate the suit property on 28.01.2006 when it was already agreed by the parties to finalize everything and close the deal by 15/02/2006.
CS No. 59416 of 2016ARVINDER SINGH Vs. J.R. SETH Page No. 30 of 51
47. As already observed, it does appear that immediately subsequent to the execution of the receipt dated 11/01/2006 Ex.PW-1/1 some changes had taken place in the understanding between the parties which is evident from the mutual cancellation of the lease deed Ex. D-1 on 28/01/2006. However, the version of the plaintiff that the lease was cancelled as the deal was to be closed on 15/02/2006 appears to be doubtful.
48. I have rejected the defendant's stand that at the time of the execution of Ex.PW-1/1 on 11/01/2006 there was any agreement under which the plaintiff was to make part-payment of the balance amount in January 2006. However, on a balance of probabilities, it appears to be more plausible in the circumstances of the cancellation of the lease Ex.D-1 that, in the end of January 2006, subsequent to the execution of Ex.PW-1/1, there developed an understanding for payment of some balance amount in the end of January 2006 and when the same could not be performed by the plaintiff, then the sale transaction fell through and consequently, the lease Ex.D-1 was also mutually cancelled on 28/01/2006. This appears to be the more likely reason for mutual cancellation of the lease Ex.D-1.
49. Significantly, the broker in the deal i.e. Mr. Neeraj Anand PW-3 was a material witness. He had been a part of the transactions involving both the sale as well as lease of the suit property. He was a material witness to answer on the understanding between the parties and as to why the lease agreement Ex.D-1 came to be CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 31 of 51 cancelled on 28/01/2006 prematurely. PW-3 had been called as a witness by the plaintiff and he tendered his affidavit in evidence in which he had deposed in favour of the plaintiff on the lines of the plaintiff's stand. He was also partly cross-examined on one date, however, he was not produced for further cross-examination and as such, his evidence cannot be read.
50. The learned counsel for the plaintiff has submitted that even if PW-3's cross-examination remained incomplete, the same could to be read in evidence since he had already been substantially cross-examined on one date and that if the defendant was inclined for further cross-examination, then it was for the defendant to have applied to the Court for recall of PW-3 for further cross-examination. The learned counsel for the plaintiff has relied upon the following case laws to argue that the testimony of PW-3 has to be considered even if his cross- examination remained incomplete: Maharaja of Kolhapur vs. S. Sundaram Ayyar and others MANU/TN/0487/1924; Mt. Horil Kuer Vs. Rajab Ali AIR 1936 Pat 34; Tinku Ram Vs. State MANU/DE/3698/2011; and Krishan Dayal Vs. Chandu Ram ILR1969 Delhi1090.
51. I am unable to accept the submission of the learned counsel for the plaintiff. PW-3 had tendered his affidavit in evidence Ex.PW- 3/A and he was cross-examined in part on 05/03/2015 and his further cross-examination was deferred. The ostensible reason given by the plaintiff on 25/07/2017 as well as on 22/08/2017 for non-availability of PW-3 was due to ill-health. However, as CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 32 of 51 observed by the Court in the order dated 22/08/2017, no document in proof of the ill-health had been filed. On 22/08/2017, the learned counsel for the plaintiff stated that the plaintiff wanted to close his evidence. Accordingly, the plaintiff's evidence was closed. It was further specifically observed that since the cross examination of PW-3 Sh. Neeraj Anand was not completed, therefore, his evidence would not be read. This observation was never challenged by the plaintiff and would be deemed to have been accepted by him. Thus, the plaintiff cannot now claim that it was for the defendant to recall PW-3 for his cross-examination.
52. The case laws relied upon by the plaintiff are distinguishable on facts. In Maharaja of Kolhapur (supra), the facts were that the witness had died before cross-examination could resume. It was in these circumstances that it was observed that there was nothing in the Evidence Act which rendered the evidence already recorded as inadmissible. Furthermore, it was observed that the correct rule was that the evidence was admissible but the weight to be attached to such evidence should depend upon the circumstances of each case and that, though in some cases the Court may act upon it, if there is other evidence on record, its probative value may be very small and may even be disregarded. Ultimately, in the said case, the Hon'ble Court observed that it was not disposed to attach any weight to the evidence of the concerned witness.
53. In Horil Kuer (supra), the facts were that the deposition of the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 33 of 51 witness was being recording by a Commissioner as the witness was too ill to come to the Court, and that he was examined in chief and cross-examined in part, and that the witness died before his cross-examination could be resumed. It was also observed by the Hon'ble High Court of Patna in the said case that it was through no fault of either the witness or the party calling him that the cross-examination could be completed. It is in these circumstances that it was held that there could be no legal objection to receiving in evidence the deposition of the said witness.
54. In Tinku Ram (supra), which was a criminal case, the facts were that the witness did not appear despite repeated summons issued and the police was also unable to enforce his attendance. In these facts, it was held by the Hon'ble High Court that the law insists that to accept the testimony of every witness who deposes in Court, he should be cross-examined, however, if it is shown that the witness after deposing in examination in chief could not present himself for cross-examination, the Court has to probe further reasons for absence of such a witness, and if the reasons point to unavailability of the witness for genuine reasons, beyond the prosecution's control, such as death, serious illness or the witness becoming untraceable, the deposition recorded during examination in chief can be read, provided it is complete and the Court is satisfied that there are no elements in that deposition or the record which can shake the testimony.
55. In Krishan Dayal (supra), the facts were that the witness had CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 34 of 51 died subsequent to his examination in chief and before the cross- examination.
56. The factual scenarios in all the aforesaid cases is completely different from the present case. In Maharaja of Kolhapur (supra), Horil Kuer (supra), and Krishan Dayal (supra), the concerned witness had died subsequent to the examination in chief and prior to the cross-examination. In Tinku Ram (supra), the appearance of the concerned witness for cross-examination could not be enforced by the prosecution despite efforts. In the present case, the plaintiff has been unable to show any good cause as to why PW-3 was not called to complete his cross- examination. The plaintiff had been seeking adjournments for recording of evidence of PW-3 on the pretext of ill-health, however, there were no medical documents to prove this. Even if PW-3 was not coming on his own, he could have been summoned by the plaintiff through the process of the Court. However, this was not done. The submission of the plaintiff that PW-3 had already been substantively cross-examined on one date and his further cross-examination was unnecessary is also without merit. Merely because PW-3 had been cross-examined on one date when his testimony had supported the case of the plaintiff, it cannot be presumed that even if PW-3 had come for further cross-examination, there would have been nothing substantial which could have come out on such date. It cannot also be simply assumed that since on one date of cross- examination PW-3 had supported the plaintiff's case, then even on the next date the defendant would have been unable to shake CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 35 of 51 the testimony of PW-3.
57. In the ultimate result, Mr. Neeraj Anand PW-3 did not present himself for further cross examination and completion of his testimony. It was specifically observed in the order that his evidence would not be read, and this was never challenged by the plaintiff. Hence, his evidence cannot be read. Also, an adverse inference would be drawn against the plaintiff for failure to call the PW-3 for completion of his cross examination.
58. Now, even assuming that the plaintiff has been able to prove his stance that the parties had agreed to complete the transaction by 15/02/2006 and that is why the lease was cancelled on 28/01/2006, then it was necessary for the plaintiff to clearly prove that he was ready and willing to complete the transaction by 15/02/2006. The plaintiff then cannot now fall back upon the original timeline under which the payment was to be made by 15/04/2006. However, I find that the evidence which has been led by the plaintiff in the present suit is primarily regarding his readiness and willingness to comply with the original agreement under which the plaintiff was to make the balance payment of Rs. 60 lacs by 15/04/2006. The plaintiff has in this regard relied upon his letter dated 15/04/2006 Ex.PW-1/16 whereby he had sent to the defendant six pay orders Ex.PW-17 to Ex.PW-1/22 for total sum of Rs. 60 lacs. In my considered view, once it was the plaintiff's own case that the parties had agreed to prematurely close the deal by 15/02/2006, even if at the request of the defendant, then it was for the plaintiff to clearly prove that he CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 36 of 51 was ready and willing to make the balance payment by 15/02/2006, which was the new agreed timeline to close the deal. However, the plaintiff has not led any evidence to show that he was ready with the requisite funds as on 15/02/2006. Although in his letter Ex.PW-1/3 (which is stated by the plaintiff to have been written to the defendant on 26/01/2006), the plaintiff has stated that he had arranged the funds so that the deal could be finalized by 15/02/2006, the plaintiff has not led any evidence to corroborate his statement in his letter Ex.PW-1/3 to show that he had the requisite funds as on 15/02/2006.
59. I am aware that there are holes in the case set up by the defendant. I have already rejected the stand of the defendant that at the time of execution of the receipt PW-1/1 there was an understanding of making of payment of instalments on 20/01/2006 and 28/01/2006 for Rs. 20 lacs each. It appears most likely that the understanding regarding payments in January 2006 had developed only subsequent to the execution of the Ex.PW- 1/1. Also, the story of the defendant regarding his sale arrangement with Mr. Ashok Luthra DW-2 also does not inspire confidence. There is no mention of any sale arrangement of the defendant with the DW-2 in any of the defendant's correspondence with the plaintiff. Even in his written statement, the defendant does not specifically mention any sale arrangement with Mr. Ashok Luthra. In his affidavit in evidence Ex.DW-2/A, Mr. Ashok Luthra as DW-2 has deposed that his offer for sale was accepted by the defendant in the presence of the plaintiff who assured the defendant in his presence that he would make CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 37 of 51 the payments within January 2006. However, this story does not inspire confidence and is most likely to have been concocted by the defendant. The defendant had never stated anything like this in his correspondence with the plaintiff or even in his pleadings in the written statement. Thus, this appears to be only an attempt by the defendant to improve his case at the time of trial. Rather, in his cross-examination, DW-2 has admitted that the plaintiff was not present at the time of the oral agreement between the DW-2 and the defendant. The letter dated 16/01/2006 Ex.DW-1/1 and letter dated 23/01/2006 Ex.DW-1/2 also appear to have been fabricated by the defendant subsequently. The letter dated 16/01/2006 Ex.DW-1/1 is a letter purported to have been written by DW-2 to the defendant making an offer for sale to the defendant on the terms and conditions stated therein. There is an endorsement by the defendant purporting to have accepted the terms and conditions. The letter dated 23/01/2006 Ex.DW-1/2 is a letter purported to have been written by the defendant to DW-2 asking for time till 31/01/2006 to make the payment and there is an endorsement thereon purportedly by DW-2 stating that the time was extended till 31/01/2006. These documents were never referred to by the defendant in his correspondence with the plaintiff. In case the sale arrangement between the defendant and DW-2 had been made in the presence of the plaintiff as claimed by DW-2 in his affidavit in evidence, then definitely this would have been stated by the defendant in his correspondence with the plaintiff. However, in his correspondence with the plaintiff, the defendant does not mention anything about any sale arrangement between the defendant and DW-2. Thus, the story developed by CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 38 of 51 the defendant regarding his sale arrangement with DW-2 appears to be wholly fabricated.
60. However, the weakness in the case of the defendant cannot assist the plaintiff as his case has to stand on its own legs. It is the own case of the plaintiff that the defendant was having financial crunch and wanted to close the deal early as he needed the money. On a balance of probabilities, the factum of mutual cancellation of the lease deed Ex.D-1 makes it plausible that the entire sale transaction had fallen through. Furthermore, even assuming that the plaintiff has been able to show that the parties had agreed to close the deal by 15/02/2006 and that is why the lease was mutually cancelled on 28/01/2006, the plaintiff has failed to show that he had the funds ready as on that date i.e. 15/02/2006.
61. In view of the aforesaid discussion, I would hold that the plaintiff would not be entitled to the relief of specific performance as prayed in the suit. Accordingly, both the Issues Nos. 1 and 2 are decided against the plaintiff and in favour of the defendant.
Issue 3- Whether the defendant could forfeit the advance of ₹ 6 lakh paid by the plaintiff to the defendant pursuant to the purported agreement to sell dated 11/01/2006 and if so, to what effect? OPD
62. Although, I have declined the prayer for specific performance, I would hold that the defendant has been unable to show that he was entitled to forfeit the advance sum of Rs. 6 lacs. The earnest CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 39 of 51 money of Rs. 6 lacs was paid under the receipt dated 11/01/2006 Ex.PW-1/1 under which the balance payment was to be made by 15/04/2006. I have already given a finding that it was only subsequently that the parties had changed this understanding and ultimately, the sale transaction could not go through and was cancelled, and simultaneously, the lease deed Ex.D-1 was also cancelled. The sum of Rs. 6 lacs had been paid by the plaintiff to the defendant under the agreement under Ex.PW-1/1 when the original understanding was that the balance payment was to be paid by 15/04/2006. The defendant has failed to show that there was any agreement for forfeiture of the said amount upon the new/changed understanding. The onus to show this was upon the defendant and the defendant has failed to discharge this onus. In such a case, the defendant would not be entitled to retain the sum of Rs. 6 lacs which was paid under the original agreement Ex.PW-1/1 and was liable to return the same to the plaintiff when the sale transaction fell through. Even otherwise, the defendant has failed to show that the defendant had suffered any actual loss or damages on account of failure of the sale transaction. The onus was upon the defendant to show that the defendant had suffered loss and damages which would entitle the defendant to retain the sum of Rs. 6 lacs already paid. Thus, for this reason also the defendant is not entitled to retain the earnest/advance money.
63. The question arises whether the plaintiff can be granted the relief of refund of the sum of Rs. 6 lacs already paid along with interest when the said relief has not been expressly prayed for in the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 40 of 51 alternative in the prayer clause. In this regard, it would be appropriate to refer to the judgment of the Hon'ble High Court of Delhi in Anuja Sharma Vs. Memo Devi and Others 2019 SCC OnLine Del 7288, the relevant portion whereof is extracted hereunder:
"7. No doubt, the provision of Section 22 of the Specific Relief Act does provide that where a relief is not claimed with respect to refund of earnest money or advance price/deposit, the courts will not grant such a relief. The provision of Section 22 of the Specific Relief Act however allows amendment of the plaint at any stage of the proceedings to seek refund of the amount paid under an agreement to sell. In the facts of the present case, there was no specific prayer in the plaint with respect to the refund of the price. The issue is that whether non- mention in the plaint by writing and seeking refund of the advance price paid results in a complete prohibition for the courts to refund the price received by a seller under an agreement to sell, once it is found that the agreement to sell does not have to go through and the suit for specific performance is being dismissed.
8. In order to interpret the provision of Section 22, it is necessary to note as to what is the object and requirement of a pleading to be filed by a party.CS No. 59416 of 2016
ARVINDER SINGH Vs. J.R. SETH Page No. 41 of 51 Pleading is defined under Order VI CPC. A pleading will include a plaint and a written statement. What is a plaint is specified under Order VII CPC, and what is a written statement is specified under Order VIII CPC. It is now a settled law by virtue of a catena of decisions of the Hon'ble Supreme Court that object of a pleading is to give notice of a case to the other party. The object of giving notice of a case to the other party is to ensure that the other party can meet the case. On this principle, the appellate courts have allowed issues which are pure questions of law even at the appellate stage, even in cases till the Hon'ble Supreme Court, if the issue of law goes to the root of the matter, and even if there is no specific pleading, but the issue does arise from the admitted facts and the pleadings on record. Thus, the trial court as also the appellate courts can, depending on facts of a particular case, allow a pure issue of law to be raised, at any stage of the legal proceedings. This is being stated by this Court because when the object of Section 22 of the Specific Relief Act is seen, and of the requirement of seeking a relief with respect to the advance price paid under an agreement to sell to be included in the plaint, it is found that the object of stating/praying in a pleading for refund of the advance price and/or earnest moneys paid is to allow a defendant/seller to take up a defence as to CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 42 of 51 why the advance price and/or earnest money should not be repaid. Obviously, defence of a defendant/seller would be that the advance price and/or earnest money is not to be re-paid because it is forfeited or liable to be forfeited either because of a specific term of the agreement to sell or because the defendant/seller has suffered a loss and consequently for the loss suffered by the defendant/seller, the advance price and/or earnest money paid under the agreement to sell has to be forfeited by applying the provision of Section 74 of the Indian Contract Act, 1872.
9. It is settled law that unless a seller proves a loss being caused to him on account of breach by a buyer in purchasing a property under an agreement to sell, the advance price and/or earnest money received under the agreement to sell cannot be forfeited because forfeiture is in the nature of forfeiture being liquated damages under Section 74 of the Indian Contract Act, and that Section 74 of the Indian Contract Act cannot come into play if the nature of the contract is such that the loss which is caused on account of the breach of contract can be proved and assessed in a court of law. This is the law as laid down way back by the Constitution Bench of the Hon'ble Supreme court in the case of Fateh Chand v. Balkishan Dass, AIR 1963 SC CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 43 of 51 1405, and such ratio being elaborated and expounded in the recent judgment of the Hon'ble Supreme Court in the case of Kailash Nath Associates v. Delhi Development Authority, (2015) 4 SCC 136. I have had an occasion to consider the ratios of the aforesaid judgments of the Hon'ble Supreme Court in the cases of Fateh Chand (supra) and Kailash Nath Associates (supra) along with a slightly divergent ratio of the judgment of the Hon'ble Supreme Court in the case of Satish Batra v. Sudhir Rawal (2013) 1 SCC 345, and this Court has held that it is the ratio of the judgment of the Constitution Bench in the case of Fateh Chand (supra) which will prevail, that a seller who has received an advance price and/or earnest moneys under an agreement to sell cannot forfeit an advance price and/or earnest moneys except a very nominal amount in case of a breach by the buyer, unless and until loss is pleaded and proved. It is trite that breach of contract is actionable not because of the breach itself but because the breach causes loss to the aggrieved party. Once there is no loss to the aggrieved party, and the same is a sine qua non under Section 73 of the Indian Contract Act, and the nature of the contract is such that the loss can be proved because the contract is one which falls under Section 73 of the Indian Contract Act and not Section 74 of the Indian Contract Act, in CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 44 of 51 such a scenario, the advance price and/or earnest money received by a seller surely cannot be forfeited in the face of the ratios of the judgment of the Hon'ble Supreme Court in the cases of Fateh Chand (supra) and Kailash Nath Associates (supra). I may note that the ratios of the aforesaid judgment of the Hon'ble Supreme Court were considered in detail in the case of M.C. Luthra v. Ashok Kumar Khanna, 2018 (248) DLT 161. An SLP filed against the judgment passed by this Court in the case of M.C. Luthra (supra), has been dismissed by the Hon'ble Supreme Court on 15.05.2018 in SLP (C) No. 11702/2018.
10. In the facts of the present case, it is an undisputed position that as per the pleading/written statement filed by the appellant/defendant no. 1, it was pleaded by the appellant/defendant no. 1/seller that appellant/defendant no. 1/seller had forfeited the amount of Rs. 15,00,000/- received under the subject Agreement to Sell on account of breach by the respondent/plaintiff/buyer to fulfill her part of the bargain in not paying the balance price of Rs. 2,00,000/- under the subject Agreement to Sell, it was also pleaded by the appellant/defendant no. 1 that monetary loss was caused to the appellant/defendant no. 1. But, as already stated above, the appellant/defendant no. 1 has not led any CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 45 of 51 evidence by stepping into the witness-box and thus he has failed to prove the loss. The appellant/defendant no. 1 having had no courage to depose and stand the test of cross-examination to establish the loss that was suffered by him, the appellant/defendant no. 1 is thus not entitled to forfeit the advance price received. Therefore, it is held that the appellant/defendant no. 1 had already raised his defence with respect to the disentitlement of the respondent/plaintiff to receive back the advance price and/or earnest money paid under the contract, and hence the present case is not a case where the appellant/defendant no. 1 is taken by surprise on the relief being granted of refund of advance price and/or earnest moneys. Once appellant/defendant no. 1 is not taken by surprise, the object of Orders VI to VIII CPC are met, that the pleading has to give notice of a person's case to the opposite party.
11. Therefore in my opinion the word 'pleading' in Section 22 cannot be strictly interpreted in the sense that the requirement being only of a written pleading and nothing else, and in law the expression pleading under Section 22 of the Specific Relief Act should be read only and essentially to mean notice of a party's case to the other side.CS No. 59416 of 2016
ARVINDER SINGH Vs. J.R. SETH Page No. 46 of 51
12. I am fortified in the aforesaid conclusions as regards the interpretation of Section 22 of the Specific Relief Act on account of the observations made by a Ld. Singe Judge of this Court, (Avadh Behari Rohtagi, J.) in the judgment in the case of Ex-Servicemen Enterprises (P) Ltd. v. Samey Singh, AIR 1976 Delhi 56, wherein it is held that the expression which is used in Section 22 of the Specific Relief Act that amendment is to be allowed 'at any stage' of a 'proceeding' i.e. the words 'at any stage of the proceedings' will mean thereby not only at any stage of the suit proceedings or appeal proceedings, and therefore, in the case of Samey Singh (supra), the Ld. Single Judge of this Court allowed amendment of the plaint at the stage of execution to seek possession in a suit for specific performance. In fact, in my opinion, para 33 is the most relevant part of the judgment wherein the Ld. Single Judge has very aptly and thoughtfully reproduced the words of Paul of Tarsus that "the letter killeth, but the spirit giveth life". This para 33 of the judgment in the case of Samey Singh (supra) reads as under:--
"33. It is said that rules of construction do not permit such a wide interpretation. Of rules of construction Lord Reid has said:
"They are not rules in the ordinary CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 47 of 51 sense of having some binding force. They are out servants not our masters.
They are aids to construction, presumptions or pointers. Not infrequently one 'rule points in one direction, another in a different direction. In each case we must look at all relevant circumstances and decide as a matter of judgment what weight to attach to any particular rule." [Maunsell v. Olins, (1975) All. E.R. 16].
On a consideration of all relevant circumstances my conclusion is this. The power of the judge is not gone. It remains in him as an indwelling spirit. So long as anything remains to be done in the case he can exercise that power for the sake of justice. When the judge finds that a verbal interpretation of law might lead to injustice he calls to mind as a comforting thought the words of Paul of Tarsus:"the letter Killeth, but the spirit giveth life".
For these reasons I grant the application. I allow the amendment of the plaint on payment of Rs. 300/- as costs.
13. Therefore, in my opinion the expression CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 48 of 51 'pleading' which has to be interpreted with respect to Section 22 of the Specific Relief Act, has to be interpreted only to mean that whether the opposite party had notice of the case of the other side, and in the present case, the appellant/defendant no. 1 did have notice of the case of the respondent/plaintiff for seeking the refund of the advance price and/or earnest money, inasmuch as, the appellant/defendant no. 1 took up a specific defence of being entitled to forfeit the amount received under the subject Agreement to Sell.
14. Therefore, I may note that the trial court, in the facts of the present case, has rightly applied the provision of Order VII Rule 7 CPC, as this provision entitles every court, depending on the facts of each case, to give reliefs which otherwise arise from the position of the facts as found on record in terms of the pleadings and evidence in the case."
(Emphasis supplied by me)
64. In the present case, the plaintiff has pleaded in the plaint regarding the forfeiture of the sum of Rs. 6 lacs as being illegal, whereas the defendant has pleaded in the written statement that the defendant was entitled to forfeit the said amount. A specific issue has also been framed as Issue No.3 as follows: "Issue 3- Whether the defendant could forfeit the advance of ₹ 6 lakh paid by the plaintiff to the defendant pursuant to the purported CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 49 of 51 agreement to sell dated 11/01/2006 and if so, to what effect? OPD" on which the onus to prove was upon the defendant. Thus, in the present case, the defendant clearly had notice of the case of the plaintiff for refund of the advance already paid. I have already held that the defendant has been unable to prove that he was entitled to retain the earnest/advance money. The retention of the advance money by the defendant not only was illegal but also was mala fide. The defendant was well aware that the advance was given at the time when the agreement was for payment of the entire balance amount by 15/04/2006. It was only subsequently that the parties had decided to prepone the payment schedule, which happened only at the insistence of the defendant. I have already held that it appears most likely that the sale transaction fell through as the new payment schedule could not be adhered to by the plaintiff. The lease appears to have been mutually cancelled on 28/01/2006 for this reason. The defendant ought to have in such event returned the advance payment to the plaintiff, however, it appears that the defendant became greedy and sought to usurp the advance payment which had come into his hands. Accordingly, the plaintiff would be entitled to refund of the earnest/advance money. The plaintiff would also be entitled to interest on the said money for deprivation of the use of his money. In these facts and circumstances, I am inclined to resort to Order VII Rule 7 CPC to grant the plaintiff relief of refund of the sum of Rs. 6 lacs along with pendente lite and future interest. In the facts and circumstances of the present case, I consider it reasonable to award the plaintiff interest @ 10% p.a. from the date of filing of the suit till actual realization to compensate the CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 50 of 51 plaintiff for the deprivation of the use of his money.
65. In the result, although the prayer for relief of specific performance is dismissed, the suit is decreed for a sum of Rs. 6,00,000/- (Rupees six lacs) to be paid by the defendant to the plaintiff along with interest at the rate of 10 % p.a. from the date of filing of the suit till actual realization. In the facts and circumstances of the present case, I would award half of the costs to the plaintiff. Let the decree-sheet be prepared accordingly.
File be consigned to record room after due compliance.
Judgment pronounced in open Court.
(SATYABRATA PANDA) Additional District Judge-04 Judge Code- DL01057 PHC/New Delhi/31.07.2023 CS No. 59416 of 2016 ARVINDER SINGH Vs. J.R. SETH Page No. 51 of 51