Delhi District Court
M/S. Virendra Paul Daga (Huf) vs M/S. Rkkr Steels (P) Ltd on 31 October, 2019
DLCT010000521998
IN THE COURT OF SH. SANJEEV KUMARI, ADDITIONAL DISTRICT
JUDGE12, TIS HAZARI COURTS, DELHI
CS No. 13996/16
M/s. Virendra Paul Daga (HUF),
Through Sh. Krishan Kumar Daga and
Sh. Ramesh Kumar Daga,
Both S/o Sh. Virendra Paul Daga,
R/o A2, Soami Nagar, New Delhi. .... Plaintiff.
Versus
1. M/s. RKKR Steels (P) Ltd.,
403, T.H. Road, Tirvottiyour,
Chennai.
2. M/s. Northern Steel & General Mills,
A2, Soami Nagar,
New Delhi. ..... Defendants.
Date of institution : 06.10.1998
Date of reserving Judgment : 05.08.2019
Date of decision : 31.10.2019
Suit No. 13996/16 & Suit No. 9908/16 Page No. 1 of 83
M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND
RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
SUIT FOR SPECIFIC PERFORMANCE AND PERPETUAL
INJUNCTION.
AND
CS No. 9908/16
M/s. RKKR Steels (P) Ltd.,
403, T.H. Road, Tirvottiyour,
Chennai - 600019. .... Plaintiff.
Versus
1. M/s. Northern Steel & General Mills,
A2, Soami Nagar,
New Delhi.
2. M/s. Virendra Paul Daga (HUF),
Through Sh. Krishan Kumar Daga and
Sh. Ramesh Kumar Daga,
Both S/o Sh. Virendra Paul Daga,
R/o A2, Soami Nagar, New Delhi. ..... Defendants.
Date of institution : 05.07.1999
Date of reserving Judgment : 05.08.2019
Date of decision : 31.10.2019
SUIT FOR RECOVERY OF POSSESSION AND MESNE PROFITS /
DAMAGES.
Suit No. 13996/16 & Suit No. 9908/16 Page No. 2 of 83
M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND
RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
JUDGMENT
1. Vide this common Judgment, I shall decide both above mentioned suits out of which, suit bearing No. 13996/16 was filed by Sh. Virender Pal Dagar (HUF) and suit No. 9908/16 has been filed by M/s. RKKR Steel Private Limited.
CS No. 13996/16
2. Brief facts as stated by the plaintiff Virender Paul Daga (HUF) is that defendant No. 1. M/s R.K.K.R. Steels Pvt. Ltd. entered into an agreement to sell dated 25.09.1985 with the plaintiff for the sale, transfer and assignment of the Industrial plot bearing No. 95 in Block BII in the area of Mohan Cooperative Industrial Estate Ltd. Near Badarpur, Mathura Road, New Delhi for a total consideration of Rs. 4,50,000/. Out of which plaintiff paid Rs. 50,000/ to the defendant No. 1 through cheque which was prepared in the name of Mohan Cooperative Industrial Estate Ltd. at the request of defendant No. 1. The balance consideration of Rs. 4,00,000/ was payable by the plaintiff to the defendant No. 1 at the time of registration of the sale deed. The defendant No. 1 had represented that as long as it is not able to execute the sale deed, it should be paid interest @ 15% per annum and that the Suit No. 13996/16 & Suit No. 9908/16 Page No. 3 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. plaintiff should take possession of the property and secure payment of interest of Rs.5,000/ by getting a tenancy in the name of defendant No. 2, Northern Steel who was at that time owned by M/s Vikas Fittings Pvt. Ltd. a family concern of the plaintiff. Clause No. 7 was inserted in the Agreement to Sell with the sole object that the possession should remain with the plaintiff either in the name of M/s Northern Steel & General Mills or if it is vacated by the said M/s Northern Steel & General Mills, the premises shall be let out to the plaintiff at the same rent. The said intention was also clear from clause No. 3 by which the property tax was to be paid by the plaintiff. The said agreement dated 15.09.1985 was only a camouflage for payment of Rs. 5,000/ as interest to defendant No.1. It is further submitted that both the agreement to sell on which the date of execution was mentioned as 25.09.1985 and the Rent Agreement on which the date of execution was mentioned as 15.09.1985 were executed on the same day i.e. 25.09.1985 which is evident from para No. 1 of the rent agreement. It is further averred that later on defendant No. 2 become the sole proprietorship concern of Sh. Sanjay Daga and Rs. 5,000/ per month were being paid by the defendant No. 2 to defendant No. 1. The plaintiff several times called Suit No. 13996/16 & Suit No. 9908/16 Page No. 4 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. upon the defendant No. 1 to obtain the necessary permissions for executing the sale deed in favour of the plaintiff but defendant No. 1 had always been representing that they are pursuing the matter and whenever they got the required permission, it will be informed to the plaintiff but defendant No. 1 all of a sudden a letter dated 30.03.1998 intimating that permission for transfer is not given by DDA in the area of Mohan Cooperative Industrial Estate Ltd. and therefore become void and accordingly they are returning the amount of Rs. 50,000/ advanced by them. Thus, defendant No. 1 tried to avoid the performance of the agreement to sell on the false ground that it has not been able to get the permission of the Delhi Development Authority for transfer. Defendant No. 1 has never applied for permission and hence there was no question of refusal of permission of DDA hence in these circumstances, plaintiff is entitled to specific performance of the agreement dated 25.09.1985 against the defendant No. 1 and also decree of perpetual injunction.
3. Defendant No. 1, RKKR Steel has filed written statement in which preliminary objection was taken that specific performance of agreement to sell is impossible as no sale deed in pursuance to the agreement to sell can be executed in favour of the plaintiff. The property Suit No. 13996/16 & Suit No. 9908/16 Page No. 5 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. subject matter of agreement relied upon by the plaintiff comprises of sub lease hold rights granted to the defendant No. 1 by means of perpetual sub - lease. Copy of the said perpetual sublease was given to the plaintiff prior to the agreement to sell. Clause 6 (a)(b) of the said perpetual sublease provides that the defendant No. 1 is not entitled to transfer, assign or otherwise part with possession of the said plot in any form or manner to a person who is not a member of the lessee i.e. Mohan Cooperative Industrial Estate Ltd. Further objection has been taken that the plaintiff has not been ready and willing and has not taken any steps to perform his part of the agreement. Plaintiff itself is in breach of his agreement and the defendant No. 2 on the date of letting it is stated by the plaintiff to be a unit of M/s Vikas Fittings Pvt. Ltd. to have sublet/assigned or parted with possession of the property to Mr. Sanjay Daga of the plaintiff and which is contrary to the agreement to sell relied by the plaintiff. It is further stated that specific performance of the agreement to sell made for the first time by way of amendment of plaint cannot be relate back to the date of institution of the suit and is deemed to have been brought before the court on the date on which the application seeking the amendment was filed and on which date it was Suit No. 13996/16 & Suit No. 9908/16 Page No. 6 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. barred by time.
4. On merits, defendant No. 1 has admitted the entering into an agreement to sell and paying of Rs. 50,000/ by the plaintiff to the defendant No. 1 in the name of Mohan Cooperative Industrial Estate Ltd. and total value of sale consideration of Rs. 4,50,000/. However, defendant No. 1 has denied that defendant No. 1 represented that so long as it is not able to execute the sale deed, it should be paid interest at the rate of 15% per annum and the plaintiff should take possession of the property and secure payment of interest of Rs.5,000/ by getting a tenancy in the name of defendant No. 2. It is further stated that clause 7 was inserted in the agreement to sell for the said purpose. It is also relied that the agreement dated 15.09.1985 was only a camouflage for payment of Rs. 5,000/ as interest to the defendant No. 1. It is also denied that defendant No. 2 was become the sole proprietorship concern of defendant No. 2 Sh. Sanjay Daga. It is also denied that the property in dispute can be sold to the plaintiff. It is further averred that the specific performance of the agreement depend upon permission from DDA since same has not been permitted therefore the said agreement become void and in this regard notice was sent.
Suit No. 13996/16 & Suit No. 9908/16 Page No. 7 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Defendant has denied that power of attorney dated 25.9.1985 in favour of Sh. Raj Kumar Daga and Prabhat Kumar was executed by defendant No. 1 as alleged but same was given to them for appearance before the assessment authority since the defendant No. 2 was in occupation at the relevant time. It is denied that plaintiff has always been or still is ready and willing to perform the agreement as alleged at all. Thus, the defendant has prayed for dismissal of the suit.
5. In the replication filed to the written statement filed by the plaintiff Virender Kumar Daga (HUF), the contents of written statement were denied as incorrect and contents of plaint were reiterated as true and correct. It is averred that the defendant No. 1 has never applied for permission to transfer the suit property and DDA has never refused the permission, hence, false ground was taken by the defendant No. 1 to avoid the performance of agreement to sell.
6. No Written statement was filed by defendant No. 2. Suit No. 9908/16
7. Brief facts of the case that plaintiff RKKR is a company and landlord/ owner of the suit property measuring 2191 sq. yards situated at Plot no. 95, BlockII, Mohan Corporate Industrial Estate Limited, near Suit No. 13996/16 & Suit No. 9908/16 Page No. 8 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Badarpur, Mathura, New Delhi. Whereas defendant is also a company and it was inducted as tenant for a monthly rent of Rs.5,000/ for initial lease for a period of one year from 15.9.1985.The said lease deed was terminated by the plaintiff vide registered notice dated 02.4.1998 which was duly received by the defendant. Since rent was above Rs. 5000/ hence, protection of Delhi Rent Control Act is not available to the defendant but despite of termination of the tenancy, defendant continued in illegal and wrongful occupation beyond 31.4.1998. Hence, the defendant is liable to pay Rs. 15 per sq. yards as means profit which comes to Rs. 32,865/ per month. Plaintiff has prayed for decree of possession and decree of recovery of Rs. 32,865/ per month from 01.5.1988 till delivery of the possession.
8. Defendant No. 1 Northern Steel has filed written statement in which, he has taken preliminary objections that since the suit for specific performance has been filed by Virender Paul Daga (HUF) against the plaintiff therefore, the present suit is liable to be stayed till the decision of said suit.
On merits, the defendant No. 1 has denied the contents of the plaint. It is denied that the plaintiff RKKR is the landlord. It is also Suit No. 13996/16 & Suit No. 9908/16 Page No. 9 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. stated that at one time defendant was the sole proprietorship concern of M/s Vikas Fitting Private Limited however, now Sh. Sanjay Daga is the sold proprietor of the defendant firm. It is further denied that the defendant was inducted as tenant for an initial lease for a period of one year w.e.f. 15.9.1985. It is averred that the tenancy was only a camouflage for payment of Rs. 5,000/ per month to the plaintiff by M/s Virendra Paul Daga (HUF), defendant No. 2. It is further stated that the plaintiff has agreed to sell the suit property to M/s Virendra Paul Daga (HUF) vide agreement to sell dated 25.9.1985 for a consideration of amount of Rs. 4,50,000/. A sum of Rs. 50,000/ was paid as part consideration by M/s Virendra Paul Daga (HUF). The plaintiff represented that so long it is not able to execute the sale deed, it should be paid interest @ 15% p.a. and that M/s Virendra Paul Daga (HUF) should take possession of the suit property and secure payment of interest of Rs. 5,000/ per month by getting tenancy in the name of defendant No. 1 who was at that time owned by M/s Vikas Fittings Pvt. Ltd. a family concerned of M/s Virendra Paul Daga (HUF) and accordingly, defendant No. 1 was shown to be tenant. The plaintiff had no right to take possession of the suit property in dispute from the Suit No. 13996/16 & Suit No. 9908/16 Page No. 10 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. defendant. It is further stated that after entering into agreement to sell, M/s Virendra Paul Daga (HUF) got the plan sanction for construction of building plot of land and spent huge amount. The completion certificate was issued in the name of plaintiff. The plaintiff has given general power of attorney in favour of Sh. Prabhat Kumar and Shri Raj Kumar Daga. Sh. Raj Kumar Daga is a relative of Virendra Paul Daga being son in law of Sh. Krishan Kumar Daga son of Virendra Paul Daga and Sh. Prabhat Kumar is also grand child of Sh. M/s Virendra Paul Daga being the son of daughter of Sh. Virendra Paul Daga (HUF), who was pursuing all the proceedings for assessment of property on behalf of the plaintiff before the MCD and also in appeal before the Addl. District Judge, Delhi and M/s Virendra Paul Daga (HUF) is paying a house tax of the said building and M/s. Virender Paul Daga (HUF) is necessary party. Thus the defendant has prayed for dismissal of the suit.
9. Plaintiff has filed replication in which, he has denied the contents of the WS as wrong and incorrect and reiterated the contents of the plaint as true and correct. Further it is submitted that plaintiff had entered into agreement to sell with Sh. Vijay Paul vide agreement to sell dated 25.9.1985 but the said agreement was cancelled by the plaintiff Suit No. 13996/16 & Suit No. 9908/16 Page No. 11 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. and the amount received as earnest money was given back. It is denied that the amount of Rs. 5,000/ per month on account of interest and the amount of Rs. 4,00,000/ which was to be paid by Virendra Paul Daga to the plaintiff but reiterated that the same was the rent which the defendant was liable to pay.
10. Later on, on the application under Order 1 Rule 10 CPC, M/s. Virender Paul Daga (HUF) was impleaded as defendant No. 2 vide order dated 30.4.2002. Defendant No. 2 Virender Paul Daga (HUF) has adopted the written statement of defendant No. 1. ISSUES.
11. Following issues were framed in suit No. 13996/16 on 21.04.1999:
1. Whether the plaintiff is entitled for a decree of possession by specific performance and for perpetual injunction, as alleged? OPP
2. Whether the suit is not maintainable as alleged? OPD
3. Whether the suit has been signed, verified and Suit No. 13996/16 & Suit No. 9908/16 Page No. 12 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. instituted by a duly authorized person? OPP
4. Relief.
In suit No. 9908/16 following issues were framed on 18.08.2017 :
1. Whether the plaintiff is entitled to a decree for possession as prayed for? OPP
2. Whether plaintiff is entitled to a decree for damages, if yes, at what rate and for what period, if yes, at what rate of interest? OPP
3. Relief.
EVIDENCES.
Suit No. 13996/16
12. In order to prove the same, the buyer/plaintiff examined Sh. Ramesh Kumar Daga as PW1. He in his examinationinchief, has deposed that they had an HUF with name of Virender Paul Daga HUF as Sh. Virender Paul Daga was Karta of the HUF, who was his father and was the eldest member of the family. He has further deposed that the defendant no.1 had agreed to sell plot No.95, BII, Mohan Cooperative Suit No. 13996/16 & Suit No. 9908/16 Page No. 13 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Industrial Estate Ltd., Mathura Road, New Delhi alongwith boundary wall, gate and security room for a sale consideration of Rs. 4,50,000/ and Rs. 50,000/ was paid to the defendant no.1 through cheque issued in the name of Mohan Cooperative Estate Ltd. He has identified the signatures of his father on the said Agreement, which is Ex.PW1/1. He further deposed that a sum of Rs. 4,00,000/ was to be paid at the time of registration of the Agreement to Sell and the defendant no. 1 was to obtain permission from the concerned authority and was to inform them about obtaining such permission and then they were to pay the balance consideration and to get the sale deed executed within three months. He further deposed that the defendant no.1 represented that so long as it is not able to execute the sale deed, they shall pay Rs. 5,000/ per month by getting a tenancy executed in favour of defendant no.2 which is the family concern of the plaintiff. The figure of Rs. 5,000/ was agreed so that defendant no. 1 is able to get interest @ 15% p.a. on unpaid consideration. He further deposed that clause no.7 in the agreement Ex. PW1/1 was inserted with the sole object that the possession should remain with the plaintiff. He further deposed that a tenancy agreement dated 15.09.81 was a camouflage for payment of Suit No. 13996/16 & Suit No. 9908/16 Page No. 14 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Rs.5,000/ and rent agreement was actually executed on 25.09.85 and the same was antedated. He further deposed that Rs.30,000/ was paid to defendant no.1 as advance rent for six months by issuing a cheque in the name of Sh. Mukesh Gupta. He further deposed that on 25.09.85 alongwith agreement to sell, a power of attorney was also executed by Sh. Jaswant Rai on behalf of defendant no.1 in favour of Sh. Raj Kumar Daga and Sh. Prabhat Kumar. He further deposed that the said power of attorney is signed by Sh. Jaswant Rai and Sh. Raj Kumar Data and Prabhat Kumar, which he proved as Ex.PW1/2. He further deposed that after 25.09.85, they constructed an industrial shed on the plot agreed to be sold to the plaintiff. He further deposed that Sh. Raj Kumar Daga is related to them being the son of brotherinlaw of his brother Sh. Kishan Kumar Daga and Sh. Prabhat Kumar Daga is his sister's son and these attorneys dealt with the proceedings on behalf of defendant no.1 for assessment of property before the MCD. He further deposed that they also prosecuted the appeal on behalf of defendant no.1 against the assessment order in the court. He further deposed that they had been calling upon defendant no.1 to obtain necessary permission required for executing the sale deed and the defendant no.1 had been representing Suit No. 13996/16 & Suit No. 9908/16 Page No. 15 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. them that they were pursuing the matter. He further deposed that they were always ready and willing to perform their part of the contract and they were still ready and willing to perform their part of the contract. He further deposed that Sh. Virender Paul Daga had deposited an amount of Rs. 21,50,000/ in the shape of fixed deposits and besides the above said FDR, they also have FDR in the name of family members to the tune of Rs.1.5 crore. He further deposed that Virender Paul Daga HUF had deposited more than Rs.10,00,000/ in the defendant no.2 and that amount is still lying credited in the name of Virender Paul Daga HUF. He further deposed that defendant no.1 served a notice Ex.PW1/3 and alongwith this notice they had sent a cheque for Rs.50,000/ which he exhibited as Ex.PW1/4 but he stated that the contents of the notice are false and untrue. He further deposed that the defendant never applied to DDA for permission. He further deposed that defendant never informed them that they were going to apply for permission. He further deposed that defendant no.2 was holding possession for the benefit of plaintiff. He further deposed that defendant no.1 has no right to give possession of the plot in dispute to anybody else and even if defendant no.1 take possession, he is bound to let out the same to them. Beside above Suit No. 13996/16 & Suit No. 9908/16 Page No. 16 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. mention documents he has relied upon Power of Attorney dt. 25.09.1985 executed by defendant no.1 in favour of Raj Kumar Daga and Prabhat Kumar as PW2/1, copy of cheque of Rs. 50,000/ sent by defendant no.1 with notice as PW1/4.
13. In his crossexamination by the Ld. Counsel for defendant No. 1, he admitted the suggestion that negotiations for the transaction was done by late V.P. Daga but voluntarily stated that it was done in his presence. He admitted the suggestion that the copy of the sale deed in favour of the defendant no.1 was given to them prior to agreement to sell. He has denied the suggestion that copy which was supplied was of perpetual lease deed. He stated that the perpetual lease deed copy of which was supplied by defendant no.1 to them prior to agreement of sale was executed in favour of defendant no.1 by Mohan Cooperative Society. The plaintiff V.P. Daga HUF never applied to Mohan Co operative Society for becoming a member. He denied the suggestion that sale permission could not be given in favour of the plaintiff by the DDA without the plaintiff becoming a member of the Cooperative Society. The permission was to be taken from DDA and Urban Land Ceiling Authority by the defendant no.1. He denied the suggestion that Suit No. 13996/16 & Suit No. 9908/16 Page No. 17 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. the plaintiff had not applied to become member of Mohan Coopertive Society because the plaintiff was never ready and willing to perform his part of the duty. He cannot say if an HUF cannot become a member of Mohan Cooperative Society since they have not applied for that. He stated that he did not write any letter to the defendant after the receipt of letter Ex.PW1/3. He admitted that the plaintiff did not write any letter to defendant no.1 to perform their part of contract since 1985 till the registration of the present suit but they had requested so many time orally. He denied the suggestion that he still does not want the sale deed to be executed in his favour nor have filed a suit for execution of the sale deed. He admitted the suggestion that the defendant no.2 was the existing tenant in the suit property a the time of agreement to sell. He stated that he is Karta of V.P. Daga HUF but has not brought any document to that effect. He stated that he has not brought any document in respect to Vikas Fittings Pvt. Ltd. regarding its Directors or share holders. He stated that the present agreement is an agreement to sell and there was a separate agreement for rent. He admitted that he received notice Ex. PW1/D1. He has not brought any document demanded in the said notice as they are not with him. He admitted the Suit No. 13996/16 & Suit No. 9908/16 Page No. 18 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. suggestion that on the date of letting to the defendant no.2 the defendant no.2 was a unit of Vikas Fitting Pvt. Ltd. He do not know if Vikas fittings Pvt. Ltd. had no right to sublet. He stated that Sanjay Daga became the proprietor of defendant no.2 in April, 1996. He stated that agreement was entered into in September, 1985 which is referred to in para 10 of the plaint. He stated that the building was constructed by the plaintiff after the agreement in 198586. The expenses for building are reflected in the books of account of the plaintiff but he has not brought the same. He has not brought any sanctioned building plan or completion certificate. He denied the suggestion that the plaintiff had no right to construct building on this plot in terms of the agreement. He was specifically asked a question whether the construction was made by the plaintiff or defendant no.2 on which he stated that he can reply this after seeing the record i.e. account books.
14. The plaintiff has examined PW2 Sh. Kanhaiya Lal Parikh, who is the accountant of the plaintiff. He proved the account books for the year 199899 as Ex.PW2/1. The account books upto 31.03.2000 as Ex. PW2/2 and copy of account statement as Ex. PW2/3. In his cross examination, he denied the suggestion that the entry in the accounts Suit No. 13996/16 & Suit No. 9908/16 Page No. 19 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. book is made without any basis.
15. On the other hand, defendant no.1 has examined Sh. Ramesh Chand, LDC from the SubRegistrar office, who prove the perpetual sublease deed executed by DDA in favour of defendant no.1 as mark A and stated that the same was issued from their office.
16. DW2 Sh. Shakeel Ahmed has deposed that he has been authorized by R.K.K.R. Steels Ltd. to appear in the case and proved Resolution Ex. D1. He stated that as per the agreement, the plaintiff was to become a member of Mohan Cooperative Society before the plot is transferred to the plaintiff and permission from concerned authority to be taken. He further stated that the plaintiff has not contacted the defendants for making the balance payment of consideration amount. He prove the copy of sub lease deed issue by DDA in favour of plaintiff as DW2/1.
17. In his crossexamination, he has stated that he has never been employed with the defendant company. He has read the agreement yesterday. He has not brought the Minutes book containing the resolution dated 30.06.2003. He cannot say if Jaswant Rai was authorized to sign the agreement on behalf of the defendant company. Suit No. 13996/16 & Suit No. 9908/16 Page No. 20 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. The terms of agreement were not settled in his presence. As per the agreement, the defendant was to approach the DDA for permission. He cannot say if the defendant applied for permission to transfer the plot in the name of the plaintiff. He cannot say if the plaintiff was to only pay Rs. 4,00,000/ as balance and the rest of the work was to be done by the defendant. He cannot say if the defendant did not do its part of the obligation. He was recalled and again examined on 08.10.2003. In his examinationinchief on recalling, he stated that document of title in favour of the defendant no.1 is a lease deed executed by DDA. He further deposed that the original lease deed might be in the possession of the defendant, copy of which he exhibited as Ex.DW2/1. Defendant no.2 has not handed over the possession of the property to defendant no.1 and had sublet the same to one Mr. Sanjay Daga. In his cross examination, he stated that he has not seen the original lease deed till today. He cannot say upto which time the original lease deed remained in possession of the defendant. He has never inquired from Mr. Rajiv Rai whether the original lease deed is with the company or not. He looks after the cases in which Jasant Rai or his family members are party alongwith the company. One of such matter is Canara Bank vs. R.K.K.R. Suit No. 13996/16 & Suit No. 9908/16 Page No. 21 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. International pending before the Debt Recovery Tribunal. He had not looked after any work of the company of Rajiv Rai or any matter of Rajiv Rai. He cannot say who were the share holders of the defendant in 1985. He has not brought any record to show who are the present directors of the defendant. He cannot say whether Jaswant Rai lost control of he defendant in 1985 or thereafter. He had not asked Rajiv Rai since when and upto which time Jaswant Rai remained in control of the defendant company. He stated that as far as he knows there was no litigation between Jaswant Rai and Rajiv Rai and there is no conflict between the two which came out in his presence. He cannot say if holding of Jaswant Rai in the defendant company is still substantial. He cannot say if Sanjay Daga is the proprietor of the defendant no.2. He was asked a question whether defendant no.1 has filed any application for transfer of membership from the defendant with respect to the suit property on which he replied that so far as he knows no such application was given by the defendant to Mohan Cooperative Society and voluntarily stated that plaintiff was to make such request. Suit No. 9908/16
18. PW1 Rajeev Rai through his affidavit Ex. PW1/A almost Suit No. 13996/16 & Suit No. 9908/16 Page No. 22 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. deposed the same facts as stated by plaintiff RKKR in its plaint therefore same are not repeated here. Besides this he relied upon site plan of suit property as PW1/1, rent agreement mark A which was later on exhibited as DW1/ P1, legal notice dt. 02.04.1998 sent through Dutta & Menon as PW1/3, its postal receipt receipt as PW1/4 & acknowledgement card as PW1/5.
19. In his cross examination he has filed the present suit it its signature. He admitted that plaintiff has entered into agreement to sell EXPW1/ D21 with defendant no.2 Virender Kumar Daga (HUF). The lease agreement mark A was executed prior to agreement to sell. Present suit has been filed for eviction of the defendant no.1 from suit premises. He is not aware plaintiff company passing a board resolution for creating a lease deed measuring 2000 Sq.yard in favour of anybody much less defendant no.1. he has not brought any document that defendant no.1 paid any rent on 15.09.85 or immediately thereafter. He has denied that lease agreement (mark A) was to run concurrently with the agreement to sale Ex. PW1/D21. He also denied the suggestion that whatever interest was recoverable at the time of execution of PW1/D2 1 the same was to be treated as the rent of the lease agreement Mark Suit No. 13996/16 & Suit No. 9908/16 Page No. 23 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. A. He admitted that he did not write to M/s Vikas Fitting Pvt. Ltd. and offered them premises in question in compliance to clause 7. He deposed that he do not know when the document Ex. PW1/D21 was executed and he has seen the same few days back. He is not aware as to what steps were taken by the company after execution of PW1/D21 to fulfill the obligations under the said document. He deposed that the property was let out on 15.09.1985 and it was decided to sell the same to defendant no.2 on 25.09.1985. He stated that the date on the back side of the document Ex. PW1/D21 is 19.09.1985. As per stamp paper of PW1/ D2 same was purchased on 19.02.85. He is not aware who purchased the same. He did not know what has purchased amount. He denied the suggestion that the bill for the sale of property was struck prior 25.09.1985. He has not file any documents to show prevalent rent in Mohan Cooperative Industrial area. He admitted that he has no personnel knowledge of the case and has deposed on the basis of record.
20. On the other hand on behalf of defendant no.1 Northern steel has examined Sh. Sanjay Daga as DW1. In its testimony led through affidavit Ex. DW1/A he has deposed that he is proprietor of Suit No. 13996/16 & Suit No. 9908/16 Page No. 24 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. defendant no.1. He almost deposed the same facts as stated by defendant no.1 Northern Steel in its written statement. He has deposed that plaintiff has agreed to sell the suit property to defendant no. 2 for a sale consideration of Rs. 4,50,000/ in terms of agreement to sale Ex. PW1/D21. Plaintiff had represented that so long sale deed is not executed it should be paid interest @15% per annum and the defendant no.2 shall take the possession of the suit premises and to secure the payment of interest an ostensible tenancy in respect to suit property is taken in the name of defendant no.1 which was at that time owned by M/s. Vikas Fittings Pvt. Ltd., a family concern of defendant no.2. After entering the agreement defendant no.2 got plan sanction and raised the construction of the building on the said plot.
21. In his crossexamination he stated that M/s Northern Steel & General Mills. Vikas Fitting is a private limited company where as M/s Northern Steel & General Mills was a proprietorship concern. He admitted that signature of his father on the rent agreement Ex. DW1/P1 and stated that except that no other agreement was executed by the plaintiff no.1 and defendant no.1. He stated that Ramesh Kumar Daga is his uncle (Chacha) who is one of the Directors of M/s Vikas Fitting. He is Suit No. 13996/16 & Suit No. 9908/16 Page No. 25 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. not aware till when the amount of Rs. 5000/ was paid to the plaintiff. The CA look after the balance sheet in respect to payments/expenses made by M/s Northern Steel. He could not tell about the execution of rent agreement dated 15.09.1985 was seen and verified at the relevant time or not. The property was given in possession to rent agreement dated 15.09.1985 which was given to the Virender Daga (HUF). He has not seen any document that premise was given by the plaintiff to Virender Daga (HUF). He denied that by virtue of rent agreement dated 15.09.1985, the relationship of tenant and landlord between the plaintiff and defendant no.1. He denied the suggestion that no construction was raised by the defendant no. 2 on the suit property.
22. Defendant No. 2 Virender Paul Daga has examined Sh. Ramesh Kumar Daga as D2W1 who almost repeated the same facts in his affidavit Ex.DW2/A which was stated by the defendant No. 2 in his written statement.
23. In his cross examination, he has deposed that he has not brought any document to prove that he is the Karta of M/s. Virender Paul Daga HUF. He stated that agreement to sell dated 25.9.1985 was executed in his presence. At the time of execution of of said agreement, Suit No. 13996/16 & Suit No. 9908/16 Page No. 26 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Sh. Jaswant Rai, his father, Rakesh Jain, Raj Kumar Daga, Prabhat Kumar and Krishan Daga were also present. He was shown the extracts of minutes of meeting dated 10.9.1985 which he admitted as Ex. D2W1/P1 that it was signed by him. He denied the suggestion that the suit property was in tenancy of defendant No. 1 prior to execution of agreement to sell dated 25.9.1985. He stated that the agreement to sell dated 25.9.1985 and rent agreement dated 15.9.1985 were executed on the same day. No payment was made to the plaintiff RKKR Steel after agreement to sell dated 25.9.1985 except for payment of Rs. 50,000/ as paid initially. No letter / written communication was made by Sh. Virender Paul Daga HUF to the plaintiff to comply with the condition of clause 7 of the agreement to sell and voluntarily stated that oral communication was made by his father during his lifetime and by him after his death to Sh. Jaswant Rai. He stated that he has not contacted Sh. Jaswant Rai since last 34 years. He do not know Rajiv Rai. He do not know any other son of Jaswant Rai. There is no written document to the effect that interest @ 15% would be given to the plaintiff towards balance sale consideration and voluntarily stated that there was oral agreement in this regard. He stated that there is no document to the Suit No. 13996/16 & Suit No. 9908/16 Page No. 27 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. effect of payment of Rs. 5000/ to the plaintiff. He cannot tell that the said amount of Rs. 5000/ was paid. Said amount used to be paid in cheque to the plaintiff. Cheque used to be signed by any of directors. ARGUMENTS
24. In both the cases common arguments were advanced by Sh. Bakshi Siri Rang Singh, Ld. Counsel for Virender Paul Daga (HUF) and Sh. Anand Singh, Ld. Counsel for RKKR.
25. Ld. Counsel for the Virender Paul Daga (HUF) has argued that the Virender Paul Daga (HUF) and RKKR has entered into agreement to sell dated 25.09.1985 by which RKKR agreed to sell the suit property to Virender Paul Daga (HUF) for a sum of Rs. 4,50,000/ out of which Virender Paul Daga (HUF) has paid a sum of Rs. 50,000/ as earnest money and balance sale consideration was to be paid with in one month after RKKR obtained requisite permission from the concerned authority to execute the sale deed but RKKR did not apply for the sale permission before any authority and all of sudden sent notice on 30.03.1998 terminating the agreement by saying that it did not get permission of DDA to transfer the suit property. He contended that RKKR has never applied before the DDA to take permission to transfer Suit No. 13996/16 & Suit No. 9908/16 Page No. 28 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. the suit property and has taken the lame excuse that it did not get permission as prices of property has increased. He further argued that Virender Paul Daga (HUF) is always ready and willing to perform its part of contract and always has requisite money to pay the balance sale consideration therefore decree for specific performance be passed in favour of plaintiff directing RKKR to execute the sale deed.
26. Ld. Counsel for plaintiff further argued that on the day of executing the agreement to sell another agreement was executed for leasing the suit property to Northern Steel which was actually a camouflage and actually it was agreed that Virender Paul Daga (HUF) will pay interest @ 15% over the balance sale consideration of Rs. 4,00,000/ which comes to Rs. 5000/ till the sale deed is executed by RKKR in favour of plaintiff which is clear from clause 7 of agreement to sale and also from the date of purchase of stamp paper of lease agreement as same was purchase on 19.09.1985 though rent agreement bears the date of 15.09.1985. He argues that as per clause 7 of the agreement to sale after termination of rent agreement defendant no.1 was to handover the suit premises to the plaintiff but same was not done and thus defendant no.1 has violated the terms of agreement. In Suit No. 13996/16 & Suit No. 9908/16 Page No. 29 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. support of his contention he has relied upon Raghunath Rai & Another vs Jageshwar Prashad Sharma & Another 81(1999) DLT228.
27. Ld. Counsel for the RKKR has argued that in order to get the relief of Specific Performance Agreement, Virender Paul Daga (HUF) is not only required to prove that it was always ready and willing to perform its part of contract and for this the plaintiff has to prove that not only on the date when the agreement was executed but also when he had filed the present suit but till the date of evidence led in the suit but M/s. Virender Paul Daga (HUF) failed to prove the same. He further contended that Virender Paul Daga (HUF) did not produce any documents that it has balance sale consideration to perform its part of the contract. Hence in these circumstances plaintiff is not entitle to decree of specific performance. Ld. Counsel for defendant further argued that since more that 30 years has expired and plaintiff has paid only Rs. 50,000/ out of total sale consideration which is just about 10% of sale consideration M/s. Virender Paul Daga (HUF) is not entitled to discretionary relief of specific performance of contract of sale as now suit property is worth of crores and it would cause great injustice to RKKR if specific performance is ordered.
Suit No. 13996/16 & Suit No. 9908/16 Page No. 30 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
28. Ld. Counsel for RRKR further argued that the contention of the Ld. Counsel for M/s. Virender Paul Daga (HUF) that lease agreement with defendant was not a camouflage but a genuine lease agreement by which RKKR has rent out the suit property to M/s. Northern Steel and since RKKR has terminated the lease agreement hence it is entitled to decree of possession of suit property. In support of his contention he has relied upon Vijay Kumar & others vs Om Parkash 2018SCC online SC1913, Farzana Ranjan vs Preeti Arora, 2018 SCC online Del 9776, Ms. Hotz Industries Pvt. Ltd., vs Dr. Ravi Singh since deceased through LR & ors 2018 SCC online Del 7618.
FINDING Suit No. 13996/16 ISSUE NO.1:
"Whether the plaintiff is entitled for a decree of possession by specific performance and for perpetual injunction as alleged?"
29. The issue was framed as plaintiff/ buyer in the unamended prayer has sought in prayer (a) "a decree for possession by specific performance of the Agreement to Sell dated 25.09.85" but later on, on behalf of plaintiff/ buyer filed an application for amendment U/o 6 R.17 Suit No. 13996/16 & Suit No. 9908/16 Page No. 31 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. CPC seeking amendment in prayer "(a) as decree of specific performance of agreement to sell dt. 25.09.1985" and the said application was allowed by the Hon'ble High Court vide order dated 02.05.2007 passed in CM(M) 879/2016 but it appears that even after the amendment in the prayer, inadvertently, the issue has not been amended hence I am of the opinion that the issue should be "whether the buyer/plaintiff is entitled to the decree of specific performance of the Agreement to Sell dated 25.09.85.
30. On analyzing of testimonies of witnesses of both the parties and pleading of the parties following undisputed facts emerge:
(a) Both the parties entered into an agreement to sale for sale of the suit property Ex.PW1/1, for which Virender Paul Daga (HUF) has agreed to pay a total amount of Rs. 4,50,000/ to RKKR and out of which, the plaintiff had paid Rs. 50,000/ to become member of NonCorporative Industrial Society on the asking of defendant on 25.9.1985, which was considered to be advance money for the suit property.
(b) Further, as per Clause 5 of the agreement, the first party i.e. the defendant RKKR was required to obtain requisite Suit No. 13996/16 & Suit No. 9908/16 Page No. 32 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
permission to enable execution of suit property in favour of second party within three months of obtaining the requisite permissions and the plaintiff was required to pay all the balance amount.
(c) Defendant RKKR has sent notice dt. 30.03.1998 EXPW1/3 termination the agreement to sell on the ground that they could not get permission from DDA and returning the advance payment of Rs. 50,000/ by sending cheque.
31. I am agree with the contention of Ld. Counsel for the plaintiff that since the agreement to sell entered into between plaintiff and defendant was not a void or voidable contract and even was not a contingent contract therefore, the same cannot be terminated by the defendant No. 1 RKKR by alleging that no permission has been granted by the DDA to transfer the property. In this regard, I rely upon the Judgment of Raghunath Rai & Anr. Vs. Jageshwar Prashad Sharma & Anr., 81(1999) DLT228. In para 17 of said Judgment, the Hon'ble High Court has held that the law is settled that if vendor agreed to sale the property which can be transferred only after sanction of some Government authority, the court has jurisdiction to order the vendor to Suit No. 13996/16 & Suit No. 9908/16 Page No. 33 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. apply to such authority within a specific period and if sanction is forthcoming, to convey the property to purchaser within certain time, hence in this case also, if the plaintiff is able to prove that specific performance of agreement to sell dated 25.9.1985 is to be granted then this court can do so. Even otherwise, since defendant RKKR has admitted the execution of agreement to sell Ex. PW1/1 by which it agreed to sell the suit property to plaintiff and termination the same vide notice Ex. PW1/3 on the ground that plaintiff did not get permission from DDA. The onus is shifted upon the defendant RKKR to prove that permission for sale was refused by DDA but the defendant RKKR has neither in the plaint nor their witnesses i.e. DW1 and DW2 have deposed that RKKR had applied before DDA or any authority seeking permission to sell the suit property to M/s. Virender Paul Daga (HUF), hence no question of refusing the permission by the DDA arise.
32. Further, in the testimony of the DW2 Shakeel Ahmad, he has not deposed that agreement to sell was terminated due to refusal of permission by DDA but he deposed that as per the agreement with Virender Paul Daga (HUF), M/s. Virender Paul Daga (HUF) was to become a member of the MohanCooperative Society to get Suit No. 13996/16 & Suit No. 9908/16 Page No. 34 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. permissions from DDA, but since M/s. Virender Paul Daga did not become member hence, transfer cannot be permitted. Hence through the testimony of DW2, defendant no. 1 has changed the defence from DDA not granting permission to plaintiff not becoming member of Mohan Cooperative Society.
33. On perusal of terms of agreement to sale Ex PW1/1, I find that there is no such clause which says that it is necessary to the plaintiff to become a member of abovesaid society to get the property transferred in its name. Further defendant witnesses have not deposed in their testimony that they had applied before DDA seeking permission to sale the suit property to plaintiff. Neither the defendant RKKR has examined any witness from the Mohan Cooperative society or from DDA to prove that suit land can be sold only after, Virender Paul Daga (HUF) become member of their society. I am fully agree with the contention of Ld. Counsel for the plaintiff that M/s. Virender Paul Daga can become member of Mohan Cooperative Society only after transfer of suit property in its name. Even otherwise, if I presume that same was mandatory for transfer/sale of suit property to plaintiff, M/s. Virender Paul Daga, defendant could asked but it is not the case of defendant that it Suit No. 13996/16 & Suit No. 9908/16 Page No. 35 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. has ever informed the plaintiff in writing or even orally that it has to become member of Mohan cooperative society only then DDA will grant the permission to sale of suit property. In view of this, I am in full agreement with the contention of the Ld. Counsel for the plaintiff that the defendant has taken a false and fabricated ground to cancel the agreement Ex. PW1/1 that it did not get permission from DDA to execute the sale deed or the DDA would grant permission only when M/s. Virender Paul Daga become member of Mohan Cooperative Society.
34. In view of above facts and circumstance, I held that it was defendant No. 1 RKKR who was guilty for breach of the contract as it was its responsibility to apply before concerned authority for permission to sale but it did not take any action and all of sudden on 30.03.1998 repudiated the agreement without valid reason.
35. The next issue which arises is that even if the defendant RKKR is guilty of the breach of terms of the agreement to sell dated 25.09.1985, whether the plaintiff is entitled to specific performance of the subject agreement to sell. In order to decide the issue of entitlement of the plaintiff to get specific performance of the agreement to sell, plaintiff has to prove that it always ready and willing to perform its part of the Suit No. 13996/16 & Suit No. 9908/16 Page No. 36 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. agreement to sell as required by Section 16(c) of the Specific Relief Act, 1963.
36. In Madan Mohan vs Sheel Gulati 2015 (3) CLJ 806 Del, Hon'ble Supreme Court has held that in order to get the relief of specific performance should always ready and willing to perform its part of contract. The relevant portion of the Judgment is reproduced as below: "22. In N.P. Thirugnanam v. R. Jagan Mohan Rao:
(1995) 5 SCC 115, the Court found that the Appellant was dabbling in real estate transaction without means to purchase the property and observed: (SCC pp.117 18, para 5) "5....Section 16(c) of the Act envisages that Plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the Defendant. The continuous readiness and willingness on the part of the Plaintiff is a condition precedent to grant the relief of specific performance.
This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the Plaintiff fails to either aver or prove the same, he must fail. To adjudge Suit No. 13996/16 & Suit No. 9908/16 Page No. 37 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. whether the Plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the Plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the Defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the Plaintiff was ready and was always ready and willing to perform his part of the contract."
(underlining added)
(iii) In the above reproduced para 22 of the judgment in the case of Narinderjit Singh (supra), the Supreme Court has relied upon its earlier judgment in the case of N. P. Thirugnanam Vs. R. Jagan Mohan Rao (1995) 5 SCC 115 [para 5 of which judgment has been reproduced in para 22 of the judgment in the case of Narinderjit Singh (supra)] and this para makes it more than abundantly clear that amount of consideration Suit No. 13996/16 & Suit No. 9908/16 Page No. 38 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. which a buyer must pay to the seller must be necessarily proved to be available and only on proof of which readiness and willingness would stand established.."
37. In Vijay Kumar Vs. Om Prakash, 2018 SCC Online SC 1913, the Hon'ble Supreme Court has held that in order to obtain a decree of specific performance, the plaintiff has to prove his readiness and willingness to perform his part of contract and the readiness and willingness has to be shown throughout and has to be established by the plaintiff. Further, in para 8 of the said Judgment, the Hon'ble Supreme Court has held that the relief of specific performance is purely discretionary though the respondent / plaintiff has alleging that he was ready and willing to perform his part of contract, the First Appellate Court ought to examine whether the respondent / plaintiff was able to show his capacity to pay the balance money.
38. In M/s. Hotz Industries Pvt. Ltd vs Ms. Ravi Singh through LR & others CS(OS) no. 1261/1995 dated 28.02.2018, the Honble High Court has held that:
"16. In my opinion the expression "has always been and continues to be ready and willing to perform the contract"
Suit No. 13996/16 & Suit No. 9908/16 Page No. 39 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. includes that plaintiff must show that he always has had the financial capacity to perform its part of the contract for making payment of balance sale consideration of Rs.2.10 crores/Rs.2.18 crores. No doubt financial capacity which is to be proved under the term readiness and willingness is not that plaintiff has to show that it had with it liquid moneys, but however it is equally necessary for the plaintiff to show its financial capacity, and having much assets, for being able to pay the balance sale consideration.
Further in para 17it is held that:
17(ii) ...... I cannot agree with the argument urged on behalf of the plaintiff that plaintiff had proved its readiness and willingness as required by Section 16(c) of the Specific Relief Act. As already observed above, readiness and willingness has to be a continuous act from the date of entering into the agreement to sell till at least the leading of evidence by the plaintiff in the suit, if not even as on date at the stage of final arguments, and in this regard it is seen that the plaintiff has at best proved that it had the balance consideration with it only in May, 1995. Having financial capacity in May, 1995 in the opinion of this Court will not enable the plaintiff to show financial capacity of the plaintiff for the period from after May, 1995 till the evidence has been concluded by the plaintiff in the present suit in August, 2010. In fact the plaintiff has to be held to be guilty Suit No. 13996/16 & Suit No. 9908/16 Page No. 40 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. of the concealing documents from this Court, and which documents are in the special knowledge of the plaintiff and therefore required to be proved by the plaintiff in terms of Section 106 of the Indian Evidence Act. These documents in possession of the plaintiff with respect to its financial capacity would be the documents of the bank accounts of the plaintiff, any fixed deposit receipts of the plaintiff of amounts in its bank, audited Balance Sheets and Profit and Loss accounts of the plaintiff from the year 1995 till plaintiff‟s evidence was closed in August, 2010 in terms of the statement made on behalf of the plaintiff. Section 16(c) of the Specific Relief Act deliberately requires continuous rediness and willingness i.e continuous financial ability to complete the transactions. The stage of complying with obligations under the agreement to sell by a proposed buyer even if does not arise, yet Section 16(c) of the Specific Relief Act requires the plaintiff to show continuous financial capacity to prove the balance sale consideration. In my opinion, it has to be held that the plaintiff in this regard has miserably failed because merely by showing financial capacity as on date on 22.5.1995 cannot mean that the plaintiff had financial capacity from 23.5.1995 till the plaintiff concluded its evidence in August, 2010. As already stated above the plaintiff has not filed any document with respect to its financial capacity like Balance Sheets, Profit and Loss Suit No. 13996/16 & Suit No. 9908/16 Page No. 41 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. accounts and therefore against the plaintiff adverse inference has to be drawn under Section 114 of the Indian Evidence Act on account of the plaintiff having deliberately not filed such documents. It is therefore held that the plaintiff cannot be held to have complied with Section 16 (c) of the Specific Relief Act merely because plaintiff has proved the certificate of bank Ex.PW1/8 dated 5.1.2004 showing that plaintiff had prepared pay orders with respect to balance sale consideration on one day and date of 22.5.1995. Also and simply because the plaintiff has paid a sum of Rs.42.50 lacs to defendant no. 4 in February, 2005 would also not mean that plaintiff is to be held that it had always the capacity to pay the entire balance sale consideration to defendant nos. 1 to 3 with the fact that payment by plaintiff to defendant no. 4 of a sum of Rs.42.50 lacs will only show financial capacity of the plaintiff of Rs.42.50 lacs and not with respect to total balance sale consideration payable by the plaintiff to the defendant nos. 1 to 3 of Rs.2.18 crores.
(iii) It was argued on behalf of the plaintiff that plaintiff‟s Managing Director has deposed in plaintiff‟s favour that plaintiff had the financial capacity, and this is sufficient evidence to prove readiness and willingness. This argument is however misconceived not only because PW1 Sh. Arun Suit No. 13996/16 & Suit No. 9908/16 Page No. 42 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Kumar Jain had been crossexamined appropriately by suggesting that plaintiff did not have financial capacity and plaintiff was not ready and willing but also because self serving deposition cannot be held to be discharge of onus of proof and so observed by this Court in the case of Baldev Behl & Ors. Vs. Bhule & Ors. (2012) 132 DRJ 247, paras 26
(i) and (ii) of which reads as under: "26(i). This issue pertains to plaintiff No.1 being ready and willing to perform his part of the agreement to sell. As per Section 16(c) of the Act, every plaintiff in a suit for specific performance must aver and prove that the plaintiff has always been and continues to be ready and willing to perform his part of the contract/agreement to sell. Readiness is financial capacity to go ahead with the agreement to sell and willingness is the intention. I may, at this stage, specifically invite attention to the observations of the Supreme Court in the case of Balraj Taneja and Anr. (supra), and relevant paras have been reproduced above, and which show that in a suit for specific performance even if there is no defence of the defendant, yet, the aspect of readiness and willingness has to be specifically proved by the plaintiff. This is stated by the Supreme Court in para 30 of the said judgment. The question is whether the plaintiff No.1 has proved his readiness and willingness at the Suit No. 13996/16 & Suit No. 9908/16 Page No. 43 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. relevant time and also continues to be ready and willing to perform his part of the contract/agreement to sell.
(ii) Readiness to perform the obligations by a proposed purchaser is a very important aspect and it has to be proved by categorical evidence. Mere oral evidence and self serving depositions cannot be a substitute for categorical evidence on the specific statutory requirement of Section 16(c). It is not disputed on behalf of the plaintiff No.1 that plaintiff No.1 has not filed any income tax returns or any bank account or proof of any other assets/properties or any other evidence to show the financial capacity of the plaintiff No.1 to pay the balance sale consideration".
39. In Farzana Ranjan Vs. Preeti Arora, 2018 SCC Online Del 9776, the Hon'ble High Court has again reiterated the Judgment of M/s. Hotz Industries Pvt. Ltd. (supra.). In para 22 of the said Judgment, the Hon'ble High Court has held that, "After all it is not that the plaintiff has pleaded and proved why it wants to be the owner only and only of the suit property and that why any other property in the same or similar area would not be sufficient for the plaintiff's needs. Therefore since plaintiff with the balance sale consideration with it plus an additional amount could well have purchased a similar property in the same or similar area Suit No. 13996/16 & Suit No. 9908/16 Page No. 44 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. in around May, 1995 and within some reasonable time thereafter, but yet plaintiff has chosen not to, hence the plaintiff is held disentitled to the discretionary relief of specific performance. It is therefore held that since the plaintiff has only paid approximately 14.5% of the sale consideration as on the date of entering into the agreement to sell being the amount of Rs. 37 lacs, therefore plaintiff is not entitled to the discretionary relief of specific performance".
40. Now reverting to back to the plaintiff. In para 13 of the plaint, it has been stated that plaintiff was always ready and willing to perform its part of contract. The PW1 Sh. Ramesh Kumar Daga also in his examination in chief has deposed that the they were always ready and willing to perform his part of the contract and still they are ready to perform their part of contract. Their family deals in Iron steel business in the name of Daga Trading Pvt. Ltd., and Northern steel and General Mills and have one crore capital in the business. Sh. Virender Paul Daga had fixed deposit of Rs.21,51,000/ with Oriental Bank of Commerce, Punchsheel Park, New Delhi and has brought the original FDRs, beside the same they had FDRs in the names of other family members to the tune of Rs. 1.5 crores and he had brought the photocopies of all the Suit No. 13996/16 & Suit No. 9908/16 Page No. 45 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. bank FDRs.
41. On analyzing the testimony of PW1 except his self serving statement plaintiff did not produce any document to corroborate his testimony. Though he deposed about the FDRs in the name of plaintiff and others firms of plaintiff family members but no such FDRs or their copies has been file on judicial record, hence this court is unable to ascertain for which period above said FDR pertain and that plaintiff at the time of filing of the suit has balance consideration of Rs. 4,00,000/ . Plaintiff has not produce any document i.e. bank passbook, FDR or any other documents to prove that plaintiff has balance sale Rs. 4,00,000/ at the time of filing of the suit. PW1 has further deposed that Sh. Virender Paul Daga had deposited more than rupees Ten Lacs in the the account of Defendant no.2 and that amount is still lying credited in the name of Sh. Virender Paul Daga and the PW2 has produce the computerized copy of account ledger of defendant no.2 of year 199899, 992000, PW2/1 to PW2/3 maintain by plaintiff to prove that plaintiff own a sum of Rs. 10,46,120/ from defendant no.2 in year 199899 to 26 July 2000, but in my view said ledger does not help the plaintiff. Even if plaintiff have to take the said money from defendant no.2 it was required to Suit No. 13996/16 & Suit No. 9908/16 Page No. 46 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. prove the account of defendant no.2 is having said money so it could pay to the plaintiff on demand. Hence plaintiff has failed to prove that it has requisite balance sale consideration, at the time of filing of the suit or at the time of leading evidence by the Plaintiff. Hence, specific performance is liable to be declined on this ground alone.
42. Even otherwise, since it is a discretionary relief, the court has to see whether same is to be granted in favour of plaintiff or not. The agreement to sell was entered way back into 1985 and defendant no.1 inform the plaintiff about termination of the same in year 1998 hence more than 13 year has gone but plaintiff admittedly did not send anything in writing to the defendant no.1 asking it to perform its part of contract. Though PW1 claimed to orally asking the defendant to execute the sale agreement but I did not find the same much convincing and the same appeared to be an afterthought. Undoubtedly it was the responsibility of the defendant no.1 to obtain necessary permission from the concerned authorities for executing sale deed in favour of the plaintiff but plaintiff cannot slept over it for infinite period if defendant no.1 is not taking any step for getting permission from DDA to transfer the property.
43. I am also in agreement with Ld. Counsel for the defendant Suit No. 13996/16 & Suit No. 9908/16 Page No. 47 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. that the contract was entered into way back in the year 1985 for a sum of Rs. 4,50,000/ and the plaintiff had paid only a sum of Rs. 50,000/, which is less than 10% of the total amount and therefore, the relief of Specific Relief have discretionary relief should not be given to it as it would cause immense hardship. In this regard, I again rely upon the Judgment titled as M/s Hotz Industries Pvt. Ltd. Vs. Ravi Singh (since deceased through LRs) & Ors. Hon'ble High Court in this case has that even if a party is able to prove that proposed buyer has financial capacity even then relief being discretionary can be refused. The relevant para is reproduced as below:
"20.(i) The next aspect to be considered is as to whether plaintiff is entitled to the discretionary relief of specific performace. In law, merely because there is an agreement to sell, and that the proposed seller is found to be guilty of breach of agreement to sell, yet it does not automatically follow that a proposed buyer is only for that reason entitled to the specific performance of the agreement to sell. In fact, besides the defendants/proposed sellers being guilty of breach of contract, and that even if the proposed buyer/plaintiff proves that there was financial capacity in the plaintiff to pay the balance sale consideration, yet the plaintiff is not necessarily and automatically entitled to Suit No. 13996/16 & Suit No. 9908/16 Page No. 48 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. specific performance, and this is because the grant of relief of specific performance is a discretion vested in the Court as per Section 20 of the Specific Relief Act. (ii) An agreement to sell is a contract between the parties and contracts between the parties are subject matter of the Indian Contract Act, 1872. The effect of breach of contract is provided under Section 73 of the Indian Contract Act. If there is a breach of contract then an aggrieved party is entitled to monetary damages as per Section 73 of the Indian Contract Act and which monetary damages is the amount of loss which is caused to the aggrieved party under the contract. An aggrieved party who was the proposed buyer under the agreement to sell will suffer loss if in case on the date and in around the date of breach, the value of a similar property as the contracted property under the agreement to sell, which could be purchased by the plaintiff as a proposed buyer, had increased. To the extent of increase of price of the property a plaintiff who is a proposed buyer suffers loss when a proposed seller/defendant does not sell the property under an agreement to sell, because a buyer has to pay a higher price for purchase of a similar property, and thus ordinarily whenever there is a breach of contract of an agreement to sell on account of the breach by the defendant/proposed seller, then the plaintiff/proposed buyer becomes entitled Suit No. 13996/16 & Suit No. 9908/16 Page No. 49 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. ordinarily to damages/loss under Section 73 of the Indian Contract Act being the difference of the contract price and the higher price of a similar property in around the date of breach. The Specific Relief Act contains provisions that in spite of a plaintiff who is the proposed buyer, and against whom breach of contract is caused by a defendant in the suit being the proposed seller, the plaintiff/proposed buyer need not ask for and be granted damages in such a case where the plaintiff/proposed buyer pleads and seeks that there should be specific performance of the contract and not the breach of the contract. In a way therefore the provisions of Specific Relief Act directing specific performance of a breached agreement to sell are in the nature of Exceptions or Provisos to Section 73 of the Indian Contract Act. What is being stated by this Court is that if there is a breach of contract then an aggrieved party on account of the breach of the contract gets under Section 73 of the Indian Contract Act monetary damages but where instead of grant of damages because of the contract being broken, a plaintiff/proposed buyer instead seeks/prays that the contract should be specifically performed, then such a scenario is in the nature of an Exception or a Proviso to the ordinary situation comprised in Section 73 of the Indian Contract Act that breach of contract entitles a person to monetary damages on account of the loss caused. Suit No. 13996/16 & Suit No. 9908/16 Page No. 50 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Therefore once the provisions of Specific Relief Act with respect to specific performance are not the normal consequence of a breach of contract being of grant of damages as per Section 73 of the Indian Contract Act, therefore the provisions of the Specific Relief Act; with the important provision therein being Section 20 of the Specific Relief Act; provides that Court has the discretion whether or not to grant specific performance and that merely because it is lawful to do so, the Court will not grant specific performance but instead may only grant damages with the measure of damages being those as provided in Section 73 of the Indian Contract Act. This aspect has been considered by this Court in detail in the judgment in the case of Jinesh Kumar Jain Vs. Iris Paintal and Ors. ILR (2012) 5 Delhi 678. The relevant paras of this judgment are paras 13 to 18 and these paras read as under: "13. Now let us assume that the agreement to sell dated 26.9.1988 was not hit by the 1972 Act; the defendants were guilty of breach of their obligation to perform their part of contract; and that the plaintiff was ready and willing to perform his part; even then, can it be said that the plaintiff is yet entitled to the discretionary relief of specific performance. It will be appropriate at this stage to refer to Section 20 of the Specific Relief Act, 1963, and more Suit No. 13996/16 & Suit No. 9908/16 Page No. 51 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
particularly subSection 3 thereof. Section 20 reads as under:
20. Discretion as to decreeing specific performance. (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capably of correction by a court of appeal.
(2) The following are cases in which the court may properly exercise discretion not to decree specific performance:
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its nonperformance would involve no such hardship on the plaintiff; or
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. (3) The court may properly exercise discretion to decree specific performance in any case where the Suit No. 13996/16 & Suit No. 9908/16 Page No. 52 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party."
14. SubSection 3 makes it clear that Courts decree specific performance where the plaintiff has done substantial acts in consequence of a contract/agreement to sell. Substantial acts obviously would mean and include payment of substantial amounts of money. Plaintiff may have paid 50% or more of the consideration or having paid a lesser consideration he could be in possession pursuant to the agreement to sell or otherwise is in the possession of the subject property or other substantial acts have been performed by the plaintiff, and acts which can be said to be substantial acts under Section 20(3). However, where the acts are not substantial i.e. merely 5% or 10% etc of the consideration is paid i.e. less than substantial consideration is paid, (and for which a rough benchmark can be taken as 50% of the consideration), and/or plaintiff is not in possession of the subject land, I do not think that the plaintiff is entitled to the discretionary relief of specific performance.
15. The Supreme Court in the recent judgment of Saradamani Kandappan vs. Mrs. S. Rajalakshmi, 2011 Suit No. 13996/16 & Suit No. 9908/16 Page No. 53 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. (12) SCC 18 has had an occasion to consider the aspect of payment of a nominal advance price by the plaintiff and its effect on the discretion of the Court in granting the discretionary relief of specific performance. Though in the facts of the case before the Supreme Court, it was the buyer who was found guilty of breach of contract, however, in my opinion, the observations of the Supreme Court in the said case are relevant not only because I have found in this case the plaintiff/ buyer guilty of breach of contract, but also because even assuming the plaintiff/buyer is not guilty of breach of contract, yet, Section 20 subSection 3 of the Specific Relief Act, 1963 as reproduced above clearly requires substantial acts on behalf of the plaintiff/proposed purchaser i.e. payment of substantial consideration. Paras 37 and 43 of the judgment in the case of Saradamani Kandappan (supra) are relevant and they read as under:
"37. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or nonperformance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts Suit No. 13996/16 & Suit No. 9908/16 Page No. 54 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. relating to immovable property, to cover his delays, laches, breaches and "nonreadiness". The precedents from an era, when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for rupees one lakh and received rupees ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining rupees ninety thousand, when the property value has risen to a crore of rupees.
xxxxx xxxxx xxxxx Suit No. 13996/16 & Suit No. 9908/16 Page No. 55 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanandam.
(i) The courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored.
(ii) The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.
(iii)Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time limits stipulated in the agreement. The courts will also "frown" upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The threeyear period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser."
(emphasis is mine) Suit No. 13996/16 & Suit No. 9908/16 Page No. 56 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
16. A reading of the aforesaid paras shows that Courts have a bounden duty to take notice of galloping prices. Surely it cannot be disputed that the balance of convenience i.e. equity in the present case is more in favour of the defendants who have only received 10% of the consideration. If the hammer has to fall in the facts of the present case, in my opinion, it should fall more on the plaintiff than on the defendants inasmuch as today the defendants cannot on receiving of the balance consideration of `44,00,000/, and even if exorbitant rate of interest is received thereon, purchase any equivalent property for this amount. Correspondingly, the plaintiff has had benefit of 90% of sale consideration remaining with him (assuming he has any) and which he could have utilized for purchase of assets including an immovable property. In specific performance suits a buyer need not have ready cash all the time and his financial capacity has to be seen and thus plaintiff can be said to have taken benefit of the 90% balance with him. It is well to be remembered at this stage that in a way that part of Specific Relief Act dealing with specific performance is in the nature of exception to Section 73 of the Contract Act, 1872 i.e. the normal rule with respect to the breach of a contract under Section 73 of the Contract Act, 1872 is of damages, and, the Specific Relief Act, 1963 only provides the alternative discretionary remedy that Suit No. 13996/16 & Suit No. 9908/16 Page No. 57 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. instead of damages, the contract in fact should be specifically enforced. Thus for breach of contract the remedy of damages is always there and it is not that the buyer is remediless. However, for getting specific relief, the Specific Relief Act, 1963 while providing for provisions of specific performance of the agreement (i.e. performance instead of damages) for breach, requires discretion to be exercised by the Court as to whether specific performance should or should not be granted in the facts of each case or that the plaintiff should be held entitled to the ordinary relief of damages or compensation.
17. I have recently in the case titled as Laxmi Devi vs. Mahavir Singh being RFA No. 556/2011 decided on 1.5.2012 declined specific performance, one of the ground being payment of only nominal consideration under the agreement to sell. Para 11 of the said judgment reads as under: "11. Besides the fact that respondent/plaintiff was guilty of breach of contract and was not ready and willing to perform his part of the contract lacking in financial capacity to pay the balance consideration, in my opinion, the facts of the present case also disentitle the respondent/plaintiff to the discretionary relief of specific performance. There are two reasons for declining the discretionary relief of specific performance. The first reason is that the Supreme Court has Suit No. 13996/16 & Suit No. 9908/16 Page No. 58 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. now on repeated occasions held that unless substantial consideration is paid out of the total amount of consideration, the Courts would lean against granting the specific performance inasmuch as by the loss of time, the balance sale consideration which is granted at a much later date, is not sufficient to enable the proposed seller to buy an equivalent property which could have been bought from the balance sale consideration if the same was paid on the due date. In the present case, out of the total sale consideration of `5,60,000/, only a sum of `1 lakh has been paid i.e. the sale consideration which is paid is only around 17% or so. In my opinion, by mere payment of 17% of the sale consideration, it cannot be said that the respondent/plaintiff has made out a case for grant of discretionary relief or specific performance..............."
18. Therefore, whether we look from the point of view of Section 20 subSection 3 of the Specific Relief Act, 1963 or the ratio of the judgment of the Supreme Court in the case of Saradamani Kandappan (supra) or even on first principle with respect to equity because 10% of the sale consideration alongwith the interest will not result in the defendants even remotely being able to purchase an equivalent property than the suit property specific performance cannot be granted. In fact, on a rough estimation, the property prices would have galloped to at Suit No. 13996/16 & Suit No. 9908/16 Page No. 59 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. least between 30 to 50 times from 1988 till date. I take judicial notice of this that in the capital of our country, like in all other megapolis, on account of the increase in population and rapid urbanization, there is a phenomenal increase in the prices of urban immovable property.
I therefore hold and answer issue no. 5 against the plaintiff and in favour of the defendants holding that the plaintiff is not entitled to discretionary relief of specific performance. "
(underlining added)
21. The ratio of the judgment passed by this Court in Jinesh Kumar Jain (supra) has been thereafter followed by this Court in the following cases:
(i) Sushil Jain Vs. Meharban Singh and Others (2012) 131 DRJ 421.
(ii) Baldev Behl & Ors. Vs. Bhule & Ors. (2012) 132 DRJ 247 (In para 25 of this judgment it is noted that the appeal against the judgment in the case of Jinesh Kumar Jain (supra) being RFA(OS) No.75/2012 stands dismissed by a Division Bench of this Court on 31.8.2012).
(iii) A.K. Narula Vs. Iqbal Ahmed and Others ILR (2013) I Delhi 315.
22.(i) A reading of the ratio of the aforesaid judgment of this Court in the case of Jinesh Kumar Jain (supra) shows that a Suit No. 13996/16 & Suit No. 9908/16 Page No. 60 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. proposed buyer as a plaintiff when only has paid a very limited amount of consideration, then such a plaintiff may not ordinarily be entitled to the discretionary relief of specific performance when the grant of specific performance is being decided after a long period of time having elapsed after entering into the agreement to sell and the suit for specific performance coming up for final disposal. The logic is very simple that from the balance sale consideration which has to be paid by the plaintiff/proposed buyer under an agreement to sell to the defendant/proposed seller, even by adding thereto interest, surely the defendant/proposed seller from the balance sale consideration plus interest cannot purchase a property of an equivalent type as would have been purchased by receipt of the sale consideration at the time when the agreement to sell was entered into many many years earlier.
(ii) As a result of rise in the prices of a property, that in the facts of the present case this Court can take judicial notice that prices of properties in Delhi, and that prices in the year 1995 would be far far lesser than the prices of the property today in the year 2018, and that too more so with the fact of the suit property being situated in one of the prime colonies of the Delhi being Maharani Bagh, grant of specific performance will severly and gravely prejudice the Suit No. 13996/16 & Suit No. 9908/16 Page No. 61 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. defendants. On a conservative estimate the value of the suit property as on today would be at least around 20 times more than what was the price of the suit property in the year 1995 and that therefore with the balance sale consideration payable to the defendants as on today even with interest, the defendants will not be able to purchase the property as the defendants could have purchased with the value of the balance sale consideration in the year 1995.
(iii) In my opinion in such cases as the present the plaintiff in fact should be extremely careful in such a suit for specific performance; that when evidence is led the plaintiff also leads requisite evidence as to the loss which would be caused to the plaintiff on account of the breach of contract by the defendants/proposed sellers, so that the Court can grant monetary damages to the plaintiff/proposed buyer on account of the breach of contract by the defendants/proposed sellers along with the interest, but indubitably the position on record in the present case is that the plaintiff has led no evidence whatsoever as to what was the difference of the property price in around April/May, 1995 than what was the price of the property on the date of entering into agreement to sell on 10.2.1995. Once a plaintiff fails to lead any evidence whatsoever to prove loss, then the plaintiff harms its own case because the Court in Suit No. 13996/16 & Suit No. 9908/16 Page No. 62 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. equity when it exercises discretionary power to deny specific performance because of Section 20 of the Specific Relief Act, and that the Court wants to grant damages on the principles under Section 73 of the Indian Contract Act, the Court cannot do so since it does not have any evidence before it in order to grant monetary damages to the plaintiff/proposed buyer and which loss/monetary damages the plaintiff would have been entitled to on account of defendants/proposed sellers held guilty of breach of agreement to sell. After all it is not that the plaintiff has pleaded and proved why it wants to be the owner only and only of the suit property and that why any other property in the same or similar area would not be sufficient for the plaintiff's needs. Therefore since plaintiff with the balance sale consideration with it plus an additional amount could well have purchased a similar property in the same or similar area in around May, 1995 and within some reasonable time thereafter, but yet plaintiff has chosen not to, hence the plaintiff is held disentitled to the discretionary relief of specific performance. It is therefore held that since the plaintiff has only paid approximately 14.5% of the sale consideration as on the date of entering into the agreement to sell being the amount of Rs.37 lacs, therefore plaintiff is not entitled to the discretionary relief of specific performance.
Suit No. 13996/16 & Suit No. 9908/16 Page No. 63 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
(iv) It is also relevant that since plaintiff has over this period from the year 1995 to 2018 had moneys in its pocket of the balance sale consideration of Rs.2.18 crores, the plaintiff would/could have invested wisely for obtaining returns on this amount of balance sale consideration.
(v) Therefore on the one hand defendants cannot purchase a similar property in similar area as in the year 1995 when the agreement to sell was entered into with respect to the sale consideration of 1995 in the year 2018, on the other hand the plaintiff has had benefit of having enjoyed and put to use and derived benefits of the balance sale consideration of Rs.2.18 crores, assuming the plaintiff had such a balance sale consideration amount with it (and in reality though it does not have as held while deciding issue no.6) therefore if the plaintiff is granted specific performance in the facts of the present case there would result not only in grave jeopardy to the defendants but that situation would be accompanied by the benefit which the plaintiff has had by having with it and having used or could have used the balance sale consideration of Rs.2.18 crores.
23. I therefore hold that plaintiff in the facts of this case is not entitled to the benefit of being granted the discretionary relief of specific performance".
Suit No. 13996/16 & Suit No. 9908/16 Page No. 64 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
44. Now returning to the case, the case was entered into in the year 1985, almost 30 years have passed since then and the balance amount of Rs. 4,00,000/ for a property situated in Mohan Corporative area Delhi is like a peanut. The defendant had only paid an amount of Rs. 50,000/ which is around 10% of the total amount. Therefore, considering all the facts and Judgments discussed above, I am of the considered view that the plaintiff is not entitled to discretionary relief of specific performance of contract Ex. PW1/1. However since it was defendant No. 1 who breached the agreement, I hold that it would be in the interest of justice and to maintain the equity that defendant be directed to return the amount of Rs. 50,000/ to plaintiff along with an compound interest @ 15% interest (compounded every year) as defendant has terminated the agreement after 13 years and plaintiff will not be able to buy the property at such rate as agreed between the parties and plaintiff or defendant No. 2 (which is a family concern of plaintiff) has spent the amount in carrying construction in the property. Issue No. 1 decided accordingly.
Suit No. 13996/16 & Suit No. 9908/16 Page No. 65 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. ISSUE No. 2
"Whether the suit is not maintainable as alleged? OPD"
45. The onus to prove this issue is upon the defendant no.1. The defendant no.1 in the written statement has taken the preliminary objection that specific performance of the contract depend upon permission from the DDA for transfer of the suit property but same has not been permitted and no consent has been obtained from DDA hence agreement to sell dated 25.09.1985 has become void therefore suit is not maintainable. In this regard I have already discussed in issue No. 1 that:
"Since defendant RKKR has admitted the execution of agreement to sell EXPW1/1 by which it agreed to sell the suit property to plaintiff and termination the same vide notice EXPW1/3 on the ground that plaintiff did not get permission from DDA. The onus is shifted upon the defendant to prove that permission for sale was refused by DDA. I am agree with the contention of Ld. Counsel for plaintiff that the defendant has neither in the plaint nor in the testimony of the witnesses examined by it, i.e. DW1 and DW21 have stated that they had applied before DDA or any authority seeking permission to sell the suit property to plaintiff hence no question of DDA refusing the permission by the DDA Suit No. 13996/16 & Suit No. 9908/16 Page No. 66 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. arise.
Further in the testimony of the DW2 Shakeel Ahmad, he has not stated that agreement was terminated due to refusal of permission by DDA but he stated that as per the agreement with the plaintiff, the plaintiff was to become a member of the NonCorporative Society to get permissions from DDA. Hence in the testimony defendant no.1 has changed the defense from DDA not granting permission to plaintiff not becoming member of Mohan Cooperative Society. On perusal of terms of agreement to sale EX PW1/1, I find that there is no such clause which says that it is necessary to the plaintiff to become a member of above said society to get the property transferred in its name. Further defendant witnesses has not stated in their testimony that they had applied before DDA seeking permission to sale the suit property to plaintiff. Neither the plaintiff has examined any witness from the Mohan Co operative society or from DDA to prove that suit land can be sold only after plaintiff become member of the society. Even otherwise if I presume that same was mandatory for transfer/sale of suit property to plaintiff defendant could asked but it is not the case of defendant that it has ever informed the plaintiff in writing or even orally that it has to become member of Mohan cooperative society only then DDA will grant the permission to sale of suit property. Suit No. 13996/16 & Suit No. 9908/16 Page No. 67 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. In view of this, I am in full agreement with the contention of the Ld. Counsel for the plaintiff that the defendant has taken a fabricated ground to cancel the agreement Ex. PW1/1 that it did not get permission from DDA to execute the sale deed."
46. In these circumstances I held that defendant no.1 has failed to prove that suit is not maintainable. Hence issue no.2 is decided in favour of plaintiff and against the defendant no.1. ISSUE No. 3
"Whether the suit been signed, verified and instituted by a duly authorized person?. OPP."
47. The unamended suit as per memo of party was file by M/s. Virender Pal Daga (HUF) through its Karta Sh. Virender Kumar Daga whereas after amendment in plaint same was file through M/s. Virender Pal Daga (HUF) through Sh. Krishan Kumar Daga and Ramesh Kumar Daga both sons of Virender Kumar Daga.
48. PW1 Ramesh Kumar Daga in his examination in chief has deposed that they has an HUF with the name of Virender Paul Daga (HUF) and his father Virender Paul Daga was the Karta of the said HUF Suit No. 13996/16 & Suit No. 9908/16 Page No. 68 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. and was eldest member of the family. The plaint has been signed and verified by his father. He identify signature of his father as he signed in his presence. The suit was instituted by his father. In his cross examination no suggestion has been given that Virender Paul Daga is not Karta of Virender Paul Daga (HUF) or that plaint does not bear his signature. Rather the suggestion that negotiation for the transaction done by late Sh. V.P. Daga prove that he was the Karta of HUF. Further Defendants witness i.e. defendant no.1 &2 no where deposed that Virender Paul Daga is not karta of Virender Paul Daga HUF or that plaint does not bear his signature. HUF is legal entity as Hindu Law and can sue or be sued through its Karta, hence in these circumstances I held that plaintiff has been able to prove that the suit been signed, verified and instituted by a duly authorized person. In view of above issue no.3 is decided in favour of plaintiff.
ISSUE No.4 "Relief"
49. In view of my finding of issue no. 1, I held that the plaintiff Virender Paul Daga (HUF) is not entitled to the relief of specific performance of contract Ex. PW1/1 however it is entitled to refund of Suit No. 13996/16 & Suit No. 9908/16 Page No. 69 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. earnest money hence, I pass a decree in favour of plaintiff directing the defendant to return the amount of Rs. 50,000/ to plaintiff along with an interest @ 15% compound interest (compounded annually) from the date of payment i.e. 25.09.1985 till the date of filing of suit and from the date of filing of suit till its realization. Plaintiff is also entitled to cost of the suit. Suit No. 9908/16 ISSUE No.1 "Whether the plaintiff is entitled to a decree for possession as prayed for? OPP"
50. The onus to prove this is upon the plaintiff. According to testimony of PW1 plaintiff is the landlord/ owner of suit property which was let out to defendant no.1 vide rent agreement dated 15.09.1985 Ex. DW1/P1 for a monthly rent of Rs. 5000/. It has terminated the rent agreement vide notice dated 02.04.1998 and demanded the defendant no.1 to put plaintiff into possession from 02.04.1998. Since rent of suit property is Rs. 5000/ defendant is ceased to enjoy protection under Delhi Rent Control Act.
51. According to the testimony of Sh. Sanjay Daga DW1 led through affidavit EXDW1/A the rent agreement EXDW1/P1 was a Suit No. 13996/16 & Suit No. 9908/16 Page No. 70 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. camouflage. In fact, plaintiff has entered into agreement to sale with defendant no.2 on 25.09.1985 for a sale consideration of Rs. 4,50,000/ out of which Rs. 50,000/ was paid as earnest money and remaining was to be paid at the time of sale deed and plaintiff wants interest @ 15% per annum i.e. Rs. 5000/ per month and to secure the said interest the rent agreement Ex. DW1/P1 was entered between plaintiff and defendant no.1 which was a camouflage only and did not created any landlordtenancy relationship and plaintiff has also handed over possession of the suit property to defendant no.2.
52. Sh. Ramesh Kumar Daga D2W1 appearing on behalf of defendant no. 2 also almost deposed on the same line as deposed by DW1.
53. Both plaintiffs and defendants witnesses have stick to their oral testimony in their respective cross examination. On analyzing the testimony of plaintiff as well defendants following undisputed facts emerge:
(i) plaintiff is the owner of suit premises being sub lessee of DDA as a sub lease was executed in its favour.
(ii) the rent agreement Ex. DW1/ P1 was executed between Suit No. 13996/16 & Suit No. 9908/16 Page No. 71 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
plaintiff R.K.K.R. and defendant no.1 M/s. Northern Steel was executed.
(iii) Plaintiff and defendant no. 2 entered into agreement to sale dated 25.09.1985 for a sale consideration of Rs. 4,50,000/.
54. Only dispute left to be decided whether the rent agreement Ex. DW1/P1 was a camouflage as an instrument to secure 15% per annum interest on the balance sale consideration of Rs. 4,00,000/ qua the agreement to sale entered between plaintiff and defendant no. 2 as alleged by the defendants or it was a creation of tenancy between plaintiff and defendant no.1 as alleged by plaintiff RKKR.
55. In my view once defendant has admitted execution of written rent agreement between the plaintiff and defendant no.1 regarding creation of tenancy, no oral evidence can be given contrary to the contents in the said agreement as it would be bar under Sections 91 and 92 of Indian Evidence Act. Section 91 of the Indian Evidence Act is reproduced as below: "91. Evidence of terms of contract, grants and other dispositions of property reduced to form of documents. When the terms of a contract, or of a grant, or of any other Suit No. 13996/16 & Suit No. 9908/16 Page No. 72 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence, is admissible under the provisions hereinbefore contained." Thus as per Section 91 of the Indian Evidence Act, a document is the best evidence of a contract, grant between the parties and no oral evidence in respect of the same can be led, however, Section 92 of Indian Evidence Act is an exception to the provisions of Section 91, Indian Evidence Act. Section 92 of The Indian Evidence Act provides that: "92. Exclusion of evidence or oral agreement. When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:
Suit No. 13996/16 & Suit No. 9908/16 Page No. 73 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. Proviso (1). Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contradicting party, (want or failure) or consideration, or mistake in fact or law".
56. Further, I am fully agree with the contention of Ld. Counsel for the plaintiff that once execution of rent agreement is admitted by the defendant no.1 onus is shifted upon the defendants to prove that same was camouflage. But except self serving oral evidence given through DW1 and D2 W1 no other evidence has been led to prove that rent agreement Ex. PW1/P1 was a camouflage. One of the main ground taken by defendant to prove that same was camouflage is that agreement was allegedly executed on 15.09.1985 but the stamp paper on which it is written is of dated 20.08.1985. Undoubtedly the same was written on stamp paper dated 20.08.1985 but merely on this ground it cannot be said that same was not executed on 15.09.1985 as it cannot be rule out that the talks for taking rent probably going on prior to the date of execution of rent agreement therefore stamp paper were purchased earlier. The agreement to sale is dated 25.09.1985 and Suit No. 13996/16 & Suit No. 9908/16 Page No. 74 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
stamp paper of the same has been purchased on 17.09.1985 hence this also prove that talks for purchase of suit property was held earlier between plaintiff and defendant no.1 and agreement to sale was executed on 25.09.1985. Further from clause 7 of agreement to sell relied upon by the defendants to prove that rent agreement was camouflage itself it is evident that tenancy agreement was executed between plaintiff and defendant no.1. Clause 7 of agreement to sale (not exhibited in this case but in suit no. 13996/16 but admitted by all the parties) is reproduce as below: "7. That the plot and the superstructure constructed thereupon is presently rented out by the First Party to M/s. Northern Steel & General Mills through its Sole Proprietor M/s. Vikas Fittings Private Ltd. of New Delhi at a monthly rental of Rs. 5,000/ (Rupees five thousand only). The First Party shall be entitled to realise this rental until the finalization of the sale in favour of the Second Party. However, in the event of the premises being vacated by M/s. Northern Steel & General Mills or its Sole Proprietor Vikas Fittings Private Ltd., then the Second Party shall have the first option to become a tenant therein on similar terms and conditions".
Suit No. 13996/16 & Suit No. 9908/16 Page No. 75 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
57. Thus, from clause 7, it is evident that the suit property was already rented out by the plaintiff to Northern Steel. Reserving the right of having first option by the defendant No. 2 to become tenant of plaintiff in case defendant no.1 Northern Steel vacate the rented premises does not prove that the rent agreement between plaintiff and defendant No. 1 was camouflage but it proves otherwise that defendant no.1 was the tenant and was in possession of the premises when the agreement to sell was executed otherwise there was no need for the defendant no.2 to mention said condition. This also prove that Rs. 5000/ was not interest on the balance sale consideration but it was monthly rent on which plaintiff has let out the suit premises to defendant no.1.
58. I am also agree with the contention of Ld. Counsel for the plaintiff that where was the need for the plaintiff to enter such a complicated procedure of making defendant no.1 as its tenant to secure the interest on the balance sale consideration as it could directly entered into rent agreement with defendant no. 2. The entering into rent agreement with defendant no.1 itself prove that earlier it let out the premises on rent to the defendant no.1 and later on plaintiff and defendant 2 entered into agreement to sale of the suit property and that Suit No. 13996/16 & Suit No. 9908/16 Page No. 76 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. is why in order to safeguard the interest of defendant no.2 a clause 7 was made that in case suit premises is vacated by defendant no.1 then defendant no.2 will have first option to take the suit premises on rent till the sale is finalized between the parties.
59. In view of the aforesaid discussion, I do not find testimony of DW1 and D2W1 reliable and held that they failed to prove that rent agreement between plaintiff and defendant no.1 was camouflage, executed to secure interest of Rs. 5000/ per month to the plaintiff and possession of the suit property was handed over to the defendant no.1 and not to defendant no.2. Further, I held that plaintiff R.K.K.R is able to prove that defendant no.1 was the tenant of plaintiff on a monthly rent of Rs. 5000/ and possession of the suit property was handed over to the defendant no.1 and plaintiff terminated the tenancy of defendant no.1 vide legal notice dated 02.04.1998. Further, I am agree with the contention of Ld. Counsel for plaintiff that since the rent is above Rs. 3500/ per month therefore, Delhi Rent Control Act is not applicable and tenancy will be governed by the provisions of Transfer of Property Act.
60. Section 106 of Transfer of Property Act provides as under: Suit No. 13996/16 & Suit No. 9908/16 Page No. 77 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
"106. Duration of certain leases in absence of written contract or local usage. (1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice. (2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in subsection (1) shall commence from the date of receipt of notice. (3) A notice under subsection (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that subsection, where a suit or proceeding is filed after the expiry of the period mentioned in that subsection.
(4) Every notice under subsection (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property)".
Suit No. 13996/16 & Suit No. 9908/16 Page No. 78 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
61. Further as per Section 111 of Transfer of Property Act provides how a lease can be determined. Section 111 of Transfer of Property Act is reproduce as below: "111. Determination of lease. A lease of immovable property determines -
(a) by efflux of the time limited thereby;
(b) where such time is limited conditionally on the happening of some event by the happening of such event;
(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event by the happening of such event;
(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right;
(e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them;
(f) by implied surrender;
(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may reenter or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated Suit No. 13996/16 & Suit No. 9908/16 Page No. 79 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. an insolvent and the lease provides that the lessor may re enter on the happening of such event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease;
(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other".
62. Since rent agreement Ex. DW1/P1 was not registered and period is mention as mention as 16.09.1985 to 15.09.1985 but tenancy continue after the said period, hence after said period it shall be a lease from year to year as per provision of section 106 of Transfer of Property Act 1885, it is an industrial plot therefore must have been let out for manufacture purpose. Once plaintiff is able to prove that defendant no.1 was its tenant tenant for a monthly rent of Rs. 5000/ and that plaintiff terminated the tenancy of defendant no.1 vide legal notice EXPW1/3. in my view occupation of the defendant become unauthorized after 6 month from the date of service of legal notice which as per postal receipt Ex. PW1/4 was posted on 02.04.1998 and as per acknowledgement card was received by defendant no.1 though no date of receiving is mention in the said card but I presume same would have Suit No. 13996/16 & Suit No. 9908/16 Page No. 80 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. been received by defendant no.1 at the best with in one week. Hence tenancy of defendant no.1 stood terminated therefore occupation of defendant no. 1 or any other person i.e. defendant no. 2 if same is occupied by defendant no. 2 as alleged by defendant no.1 and defendant no.2 in their respective pleading and evidence is unauthorized since 02.10.1998 and therefor plaintiff is entitle to decree of possession of the suit property from the defendant no.1 and from any other person who has occupy the same through defendant no.1 which include defendant no.2. Issue no.1 is decided accordingly in favour of plaintiff and against the defendants.
ISSUE No.2 "Whether plaintiff is entitled to a decree for damages, if yes, at what rate and for what period, if yes, at what rate of interest? OPP"
63. Plaintiff has claimed mesne profits / damages of Rs. 4,27,245/ till May 1999 and further claim future damages @ 32,865/ per month as future damages. PW1 in his testimony has demanded the said damages of Rs. 32,865/ per month @ Rs. 15 per Sq. mt or at any rate court deem fit . But he has not produce any documentary evidence in support of its claim for above said damages/ mesne profits Suit No. 13996/16 & Suit No. 9908/16 Page No. 81 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.
64. As held in issue no.1 above defendants are in unauthorized occupation of the suit property since 02.10.1998 hence in normal circumstance the defendant no.1 would be liable to pay the mesne profit/ damages for the period they have remain in unauthorized occupation. But as held in suit no. 13996/16 there was also an agreement to sale between plaintiff and defendant no.2 by which plaintiff was to sell the suit property to defendant no.2 for a sale consideration of Rs. 4,50,000/ and plaintiff has breached the said agreement as it did not fulfill the condition to obtain necessary permission from requisite authority to transfer the same to the defendant no.2 and since there was also a condition in the said agreement to sell that in case of termination of rent agreement defendant no. 2 will have first option to take the premises on rent therefore in these circumstance it would not be in the interest of justice to award mesne profits /damages to the plaintiff from the date termination of tenancy till the date of decree. However defendants will be liable to pay future damages from the date of decree @ 1,79,500/ per month (Rs. 100/ per Sq mt x 1795 Sq. Mt.) which I am determining considering the steep rise in the rate of rent for industrial property in Delhi, in case defendants failed to handover the suit property. Issue no. Suit No. 13996/16 & Suit No. 9908/16 Page No. 82 of 83 M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr. 2 is decided accordingly RELIEF.
65. In view of my findings on issue Nos. 1 and 2, I pass a decree of possession in favour of plaintiff and against the defendants directing the defendants, their agents etc. to hand over the vacant possession of the suit premises to the plaintiff. Further, I held that the plaintiff is not entitled for decree of damages in view of my findings on issue No. 2 however, plaintiff is entitled to recover future damages from the date of decree @ Rs. 1,79,500/ per month till the date of handing over possession. Plaintiff is also held entitled to the costs of the suit.
66. Deficient Court fees, if any be paid. Thereafter, decree sheets be prepared accordingly in both the suits. Both files be consigned to record room after necessary compliance.
Announced in the open court (Sanjeev KumarI)
on 31.10.2019 Additional District Judge12, Central
Tis Hazari Courts, Delhi
Digitally signed by
31.10.2019
SANJEEV SANJEEV KUMAR
KUMAR Date: 2019.10.31
12:27:30 +0530
Suit No. 13996/16 & Suit No. 9908/16 Page No. 83 of 83
M/s. Virendra Paul Daga (HUF) Vs. RKKR Steel Pvt. Ltd. & Anr. AND RKKR Steel Pvt. Ltd. v. Northern Steel General Mills & Anr.