Delhi District Court
Sh. Maqsood Hussain vs Ms. Vijaya Lakshmi on 31 May, 2022
IN THE COURT OF MS. MONA TARDI KERKETTA,
ADDITIONAL DISTRICT JUDGE-1,
NORTH EAST DISTRICT, KARKARDOOMA COURTS, DELHI
CS No.545/16
CNR No. DLNE01-004371-2016
Sh. Maqsood Hussain
S/o Late Sh. Hamid Hasan
R/o H.No.505-D, Stree No.8,
Moonga Nagar, Karawal Nagar Road,
Delhi-110094. ............Plaintiff
Vs.
Ms. Vijaya Lakshmi
W/o Sh. Shiv Kumar Sharma
R/o 424, Gali No.7, Moonga Nagar,
Shahdara, Delhi-110094 ..........Defendant
Date of filing of the Suit : 16.11.2016
Date of Final Arguments : 13.12.2021
Date of the Judgment : 31.05.2022
Appearances :
For plaintiff : Sh. H. Rehman, Adv.
For defendant : Sh. R.N. Dubey, Adv.
Suit for recovery of Rs.10,00,000/- (Ten Lakhs Only)
JUDGMENT:
1. The present suit has been filed by plaintiff for recovery of Rs.10 lakhs. The brief facts of the case as disclosed in the plaint are that in the year 2013, defendant through one of the acquaintances, approached plaintiff for selling the property situated in Village Karawal Nagar, Gali No.7, Moonga Nagar, being property no.426/7, Ilaqa Shahdara, Delhi, admeasuring 50 sq. yards, out of khasra no.63 consisting of two and a half storey (hereinafter referred to as "Suit CS No.545/16 Page 1 of 24 ADJ-01/NE/KKD/Delhi Property"), representing herself to be owner of the same. Plaintiff agreed to purchase the same for a total sale consideration of Rs.51,50,000/- and accordingly, a Bayana Agreement was executed on 19.05.2013 on the payment of Rs.5,00,000/- to defendant. It was agreed that balance sale consideration would be paid at the time of execution of sale deed to be executed on or before 18.11.2013. It is further stated that plaintiff time and again requested defendant to give the ownership documents of the suit property alongwith entire chain but defendant on one pretext or the other, continued to delay handing over of the same.
2. It is further stated that on or around 18.11.2013, defendant represented to plaintiff that on account of certain family issues, defendant would not be able to execute the sale deed in favour of plaintiff at that stage and sought for time for execution of sale documents. Defendant assured plaintiff that the earnest money given by him would remain safe with her and in case she was not able to execute the sale deed in favour of plaintiff then the entire earnest money with damages would be refunded to plaintiff alongwith 18% interest from the date of execution of the Bayana agreement dated 19.05.2013. Plaintiff was always ready and willing to perform his part of the agreement and to pay the balance sale consideration to defendant upon execution of the sale deed in his favour.
3. It is further stated that due to lack of time and busy schedule of plaintiff, the deal in question evaded his memory, however in September, 2016 plaintiff realized while going through the documents that defendant had neither come forward to execute the sale deed nor handed over the ownership documents and as such he contacted defendant on 04.09.2016. Looking the attitude of defendant, CS No.545/16 Page 2 of 24 ADJ-01/NE/KKD/Delhi plaintiff warned defendant of legal recourse against only then defendant handed over some ownership documents of the suit property in the shape of GPA, agreement to sell, receipt, affidavit, Will etc. alongwith a letter to the effect that said documents were being handed over to plaintiff for the purpose of execution of sale deed but did not provide the complete chain.
4. It is further stated that defendant misrepresented plaintiff about her ownership of the suit property and illegally entered into Bayana agreement 19.05.2013 with intention to defraud and usurp the money of plaintiff to cause wrongful gain to herself and wrongful loss to plaintiff. It was apparent from the document handed over that defendant fraudulently and dishonestly already sold the suit property to her son on 23.03.2014 vide registered sale document dated 26.03.2014, as such defendant was not having any right to sell the suit property to plaintiff and that she was now not in a position to execute and honour the terms of the agreement dated 19.05.2013 and therefore defendant was liable to refund Rs.5,00,000/- and to pay damages of Rs.5,00,000/- to plaintiff in terms of Bayana agreement dated 19.05.2013 alongwith interest @ 18% per annum w.e.f. 18.11.2013 till paid. Defendant failed to respond the legal notice dated 03.11.2016 sent by plaintiff. Hence, the present suit.
5. Plaintiff prayed to pass the following relief in his favour and against defendant:-
5.1) A money decree for recovery of Rs.10,00,000/-; 5.2) Grant of pendente-lite and future interest @ 18% per annum;
5.3) Cost of the suit.
5.4) Any other or further relief which this Court deems fit and CS No.545/16 Page 3 of 24 ADJ-01/NE/KKD/Delhi proper in the facts and circumstances of the case
6. Defendant contested the present suit on the following grounds:
6.1) The suit of plaintiff is not maintainable because plaintiff himself is guilty of non-compliance of the terms and conditions of the Bayana agreement dated 19.05.2013.
6.2) The suit of plaintiff is barred under Order II Rule 2 CPC. It is not explained as to why the relief of specific performance was not claimed.
6.3) Plaintiff was under obligation to know the status of the suit property and after filing of the suit, plaintiff can't take plea that on the date of execution of agreement dated 19.05.2013, defendant was not the owner of the suit property. Defendant is in possession of the suit property for the last 20 years holding electricity and water connection and ration card in her name.
6.4) Plaintiff could not show his bonafide at any point of time either through the notice or despite offer of defendant through notice to execute the Bayana agreement dated 19.05.2013. Plaintiff also did not file either statement of account, Demand Draft, cheque or any other document to show balance sale consideration amount lying with plaintiff. The Bayana agreement dated 19.05.2013 automatically attained the finality by which it was seized after 18.11.2013 and cannot be enforced by plaintiff.
6.5) Defendant by way of reply to the notice, offered plaintiff to get executed documents against the payment, however despite the notice, plaintiff avoided performances of his part of the contract. Even the time extended for getting the property transferred to plaintiff in his name with the title and possession, was not accepted and followed by plaintiff.
CS No.545/16 Page 4 of 24 ADJ-01/NE/KKD/Delhi 6.6) The Bayana agreement dated 19.05.2013 is unregistered document and requisite stamp duty has not been paid and therefore, the present suit can be maintained by plaintiff. 6.7) Defendant had appeared before the office of Sub Registrar on 18.11.2013 and waited till the closing of the office but none came forward from the side of plaintiff either to pay the money or to get the sale deed executed.
6.8) The suit of plaintiff is barred by limitation. (Ref: Rishi Aggarwal vs. Vipul Infrastructure Developers Ltd. & Ors., reported as 235 (2016) DLT 460).
6.9) On Bayana agreement dated 19.05.2013, signature and thumb impression of defendant have been obtained fraudulently. It does not create any obligation upon defendant to execute the documents in favour of plaintiff.
6.10) Plaintiff was never willing and ready to perform the contract on his part dated 19.05.2013 nor was having money to pay the sale consideration.
6.11) The suit of plaintiff is also liable to be dismissed because of non-joinder of the necessary parties.
7. Replication was filed by plaintiff wherein he denied the contents of written statement and reiterated and reaffirmed the contents of the plaint. In addition, following arguments were submitted:
7.1) Plaintiff was always ready with the balance consideration amount as plaintiff had sold a plot measuring 30 sq. yards, khasra no.45, Chandu Nagar, Street No.5, in front of Masjid, Delhi-110094 for a total sale consideration of Rs.25,25,000/- in the month of April, 2013 and in first week of May, 2013, plaintiff sold another built up property CS No.545/16 Page 5 of 24 ADJ-01/NE/KKD/Delhi bearing H.no.898A, Khasra No.380, Gali No.11, Rajeev Gandhi Nagar, New Mustafabad, Delhi, measuring 25 sq. yards for total sale consideration of Rs.24,10,000/-.
7.2) It was only on 04.09.2016, defendant produced the chain of documents in her favour but the said chain of documents did not confer title in favour of defendant. Moreover, it was also revealed that defendant had already sold the suit property to her son through registered GPA on 23.03.2014.
7.3) The relief of specific performance was not claimed as defendant was having no right, title or interest to execute registered sale deed in respect of suit property. Defendant committed fraud upon plaintiff as defendant was having knowledge that she could not confer title to plaintiff and despite of it, she entered into an agreement and took huge amount of Rs.5 lakhs from plaintiff. As such, defendant is liable to pay damage to the extent of double of the earnest money. 7.4) Under Section 55 of Transfer of Property Act, it is the duly of the seller to disclose to the buyer and material defects in property as well as defect in title of the seller. Seller is bound to produce to buyer for examination of all the title documents which defendant failed to do so till 04.09.2016.
7.5) When defendant herself had no absolute title then she could not have performed her part of the agreement and could also execute registered sale deed in favour of plaintiff. 7.6) Defendant was not entitled to execute the registered sale deed in respect of suit property as the agreement to sell for execution of sale deed couldn't be enforced but the damages clause in the event to failure to perform could always be enforced and plaintiff was therefore always entitled to refund of earnest money and damages as agreed between the parties.
7.7) Registration of an agreement to sell is mandatory only for CS No.545/16 Page 6 of 24 ADJ-01/NE/KKD/Delhi the purposes of Section 53 of Transfer of Property Act and not for other purposes under Section 17(1)(A) of the Registration Act, 1908. It is only the benefit of Section 53A that can be claimed on the basis of unregistered contract of sale.
7.8) Admittedly, 18.11.2013 was the date fixed for performance of the agreement and the present suit filed on 11.11.2016 is well within period of limitation of three years.
7.9) It was fraudulent on the part of defendant that she took huge sum of Rs.5 lakhs from plaintiff as earnest money for executing a registered sale deed in favour of plaintiff. However, despite having knowledge that sale deed could not have been executed as the suit property was located within the area of unauthorized colony. 7.10) There is a valid and an enforceable contract for sale between parties and the said agreement is still enforceable before the Court of law.
7.11) It is well settled by the judgment delivered by the Hon'ble Supreme Court that the stipulation of penalty clause in an agreement is by way of damages only.
8. Vide orders, dated 16.11.2017, the following issues were framed by Ld. Predecessor of this court, on the basis of the pleadings of the parties:
1. Whether plaintiff has committed default in terms of the agreement dated 19.05.2013? OPD
2. Whether the suit of plaintiff is barred under Order II Rule 2 CPC? OPD
3. Whether the suit of plaintiff is barred due to non-
registration of the agreement as well as non- payment of proper stamp duty? OPD
4. Whether the suit is bad for non- joinder of parties?
CS No.545/16 Page 7 of 24 ADJ-01/NE/KKD/Delhi OPD
5. Whether plaintiff is entitled for recovery of Rs.10,00,000/- as claimed? OPP
6. Whether the plaintiff is entitled to any interest and if so at what rate and for which period? OPP
7. Relief.
9. Subsequent thereto, the matter was fixed for plaintiff's evidence. In order to prove his case, plaintiff examined himself as PW- 1 and tendered his evidence by way of affidavit Ex.PW-1/A and relied upon the following documents:
i) Ex.PW-1/1 : Original agreement dated 19.05.2013.
ii) Ex.PW-1/2 : Copy of letter dated 04.09.2016 (objected to the mode of proof by learned counsel for defendant being photocopy only).
iii) Ex.PW-1/3 : Office copy of legal notice dated 03.11.2016.
iv) Ex.PW-1/4 : Original postal receipt.
10. Plaintiff further examined Sh. Gopal Dutt, Record Keeper, Office of Sub Registrar-IV, Seelampur who proved receipt bearing no.8769 dated 18.11.2013 issued in the name of plaintiff exhibited as Ex.PW-2/A. Ld. counsel for defendant duly cross-examined both plaintiff's witness. Plaintiff's evidence was closed in affirmative on 20.11.2018.
11. Subsequent thereto, the matter was fixed for defendant's evidence. Defendant examined herself as DW-1 and tendered her evidence by way of affidavit Ex. DW-1/A. Ld. Counsel for plaintiff duly CS No.545/16 Page 8 of 24 ADJ-01/NE/KKD/Delhi cross-examined defendant. Defendant's evidence was closed on 24.02.2020.
12. Subsequent thereto, the matter was fixed for final arguments which were addressed by both the parties. Parties also filed their written arguments. The list of reliance of plaintiff is as under :-
a) Fateh Chand Vs. Balkishan Dass (1964) I SCR 515
b) Satish Batra Vs. Sudhir Rawal (2013) 1 SCC 345
c) Kailash Nath Associates Vs. Delhi Development Authority (2015) 4 SCC 136
d) M.C. Luthra Vs. Ashok Kr, Khanna(2018) SCC Online Del.7462 The list of reliance of defendant is as under :-
a) Bimla Devi Vs. Nisar Ahmed FAO No.17/2013.
b) Ved Prakash Kharbanda Vs. Bimal Jindal 198(2013)DLT 555.
c) J.P. Builders Vs. A. Ramdas Rao 2011(1) SCC 429.
d) N.P. Thirugnanam Vs. D.R. Jagan Mohan Rao(1995)5 SCC 115.
e) R.C. Chandiok Vs. Chuni Lal Sabharwal(1970) 3 SCC 140.
f) Ramesh Chand Vs. Suresh Chand & Anr. 188(2012) DLT 538.
g) O.P.Aggarwal & Anr. Vs. Akshay Lal & Ors. 188(2012) DLT 525.
h) Jeevan Industries Pvt. Ltd. Vs. Kamlesh Rani Budhiraja
208(2014) DLT 589.
i) Sky Land International Pvt. Ltd. Vs. Kavita P. Lalwani.
j) Ranga Mal Vs. Kuppuswami & Anr.
13. The issue-wise findings of the court are discussed as under: -
Issue no.2: Whether the suit of plaintiff is barred under Order II Rule 2 CPC? OPD CS No.545/16 Page 9 of 24 ADJ-01/NE/KKD/Delhi Issue no.3: Whether the suit of plaintiff is barred due to non-
registration of the agreement as well as non - payment of proper stamp duty? OPD Issue No.4: Whether the suit is bad for non-joinder of parties ?
OPD
14. Issue No.2,3 and 4 are being dealt with first being the legal objections. The onus to prove these issues was fixed upon defendant.
Regarding Issue No.2, defendant argued that plaintiff has not explained in the plaint as to why the relief of specific performance has been omitted and not claimed. On the other hand, plaintiff argued that the relief of specific performance has not been claimed as defendant was having no right, title or interest to execute registered sale deed in respect of the suit property; defendant committed fraud upon plaintiff as she could not have conferred title to plaintiff and despite that entered into an agreement and obtained Rs.5 lakhs from plaintiff. Plaintiff also argued that defendant had already sold the suit property in question to his son because of which also plaintiff could not have claimed the relief of specific performance of Bayana agreement dated 19.05.2013.
15. To make this rule applicable, the essential conditions to be satisfied are :
a) The second suit must be in respect of the same cause of action as that on which the previous suit was based;
b) In respect of that cause of action, plaintiff was entitled to more than one relief;
c) Being thus entitled to more than one relief, plaintiff without leave of the court omitted to sue for the relief for which the second suit CS No.545/16 Page 10 of 24 ADJ-01/NE/KKD/Delhi has been filed.
16. From the aforesaid, it is clear that the essential three conditions of order II Rule II CPC are not applicable to the facts and circumstances of the present case. Had there been second suit in respect of the same cause of action and plaintiff omitted to sue for or intentionally relinquished any portion of his claim then only he would have not been allowed to sue in respect of the portion so omitted or relinquished. The Court is also of the view that plaintiff is well within his right to claim only the relief of recovery of advance money and damages in the shape of double of earnest money of Rs.10 lakhs, being master of his own case.
17. So far as Issue No.3 is concerned, defendant has argued that agreement to sell dated 19.05.2013 is an unregistered document and in view of Section 17 of Indian Registration Act, the said document is not enforceable without payment of requisite stamp duty. On the other hand, plaintiff argued that the registration of agreement to sell is mandatory only for the purposes of Section 53 of Transfer of Property Act and it is only the benefit of Section 53A of Transfer of Property Act that can't be claimed on the basis of unregistered contract of sale. It is well settled that a document necessary to be registered, if it is unregistered, will not be admissible in evidence however, such an unregistered agreement can still be used as evidence for collateral purposes as per proviso to section 49 of the Registration Act,1908. In The judgment titled as Ameer Minhaj Vs. Dierdre Elizabeth(Wright) Issar, Civil Appeal No.18377 of 2017 decided on 04.07.2018, the Hon'ble Supreme Court held that an unregistered agreement to sell can be received as evidence of a contract in a suit for specific performance however, the protection under section 53-A of Transfer of CS No.545/16 Page 11 of 24 ADJ-01/NE/KKD/Delhi Property Act 1882 would not be available in case of unregistered agreement to sell.
18. Regarding Issue No.4, defendant has argued that the suit is liable to be rejected because of non- joinder of necessary parties i.e., son of defendant as in para no.12 of the plaint, plaintiff has averred that defendant sold the property in question to her son on 23.03.2014 but plaintiff did not join son of defendant in the array of parties. On the other hand, plaintiff has argued that there was no need to implead son of defendant in the array of parties as he did not claim the relief of specific performance in respect of agreement to sell dated 19.05.2013.
19. On this aspect, it is observed that defendant did not lead any evidence to prove how the suit of plaintiff is not maintainable on account of above said legal objection. In fact, the court is in agreement with the arguments as submitted on behalf of plaintiff.
In view of the above, the Issue Nos.2,3 & 4 are decided against defendant and in favour of plaintiff.
20. Issue no.1: Whether plaintiff has committed default in terms of the agreement dated 19.05.2013 ? OPD Issue no.5: Whether plaintiff is entitled for recovery of Rs.10,00,000/- as claimed? OPP Issue No. 6:Whether the plaintiff is entitled to any interest and if so at what rate and for which period? OPP
21. The onus to prove Issue No.1 was fixed upon defendant and of Issue No. 5 & 6 on plaintiff. Ld. Counsel for plaintiff has argued that plaintiff was always ready & willing to perform his part of contract under the agreement. After entering into the agreement CS No.545/16 Page 12 of 24 ADJ-01/NE/KKD/Delhi with defendant, plaintiff time and again requested defendant to provide copies of ownership documents with entire chain for preparation of relevant documents to be executed and plaintiff also acceded the request of defendant for extension of time. Plaintiff had even arranged the funds to pay the balance sale consideration by selling his properties situated at Chandu Nagar and Mustafabad. Plaintiff had also visited the office of Sub-Registrar-IV, Seelampur as proved vide Ex.PW-2/A. It was also argued that after going through the property documents handed over by defendant on 04.06.2016, it came to the notice of plaintiff that defendant had already transferred the property in question to his son and also the title documents as provided by defendant could not have conferred ownership right to plaintiff not being sale deed and property being situated at an unauthorized area.
22. On the other hand, apart from the preliminary objections regarding the enforcement of the agreement, Ld. Counsel for defendant has argued that in terms of Bayana agreement 19.05.2013, plaintiff completely failed to perform his part of the obligations. Plaintiff could not show his bonafide either by sending any notice to defendant or offer of defendant through notice; Plaintiff also did not file either statement of account, Demand Draft, cheque or any other document to show balance sale consideration amount was lying with him; Even by extension of time for getting the property transferred to plaintiff in his name with the title and possession, was not accepted and followed by plaintiff; Defendant had appeared before the office of Sub Registrar on 18.11.2013 and waited till the closing of the office but none came forward from the side of plaintiff either to pay the money or to get the sale deed executed. It was argued that because of the acts of plaintiff, sale deed could not be executed in his favour. Thus, plaintiff was not at all entitled to the relief as claimed in the plaint.
CS No.545/16 Page 13 of 24 ADJ-01/NE/KKD/Delhi
23. It is well settled that the remedy of specific performance being an equitable relief, the burden is always on plaintiff to prove the positive facts of readiness & willingness on his part and defendant is not required to prove the negative. Reference may be had to the judgment titled as N. P. Thirungnanam v. R. Jagan Mohan Rao, (1995) 5 SCC 115. Paragraph 5 of the said judgment is reproduced herein-under:
"....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 defendant. The continuous readiness and willingness on the part of 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 to aver or prove the same, he must fail. To adjudge whether plaintiff is ready and willing to perform his part of the contract, the Court must take into consideration the conduct of 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 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."
Further on this aspect, reliance is placed upon the judgment of Shree Aadhiya Build Well Pvt. Ltd. Vs. Kartar Singh & Ors, 228 (2016) DLT 10:
CS No.545/16 Page 14 of 24 ADJ-01/NE/KKD/Delhi "....This provision (Section16(c) of Specific Relief Act, 1963) requires that a proposed purchaser has always to be and continues to be ready and willing to perform its part of the agreement to sell. It is settled law that the expressions 'readiness' and 'willingness' refer to the capacity to pay so far as the expression 'readiness' is concerned and the intention to go through with the transaction as reflected in the expression 'willingness'.
These are the meanings of the expressions 'readiness' and 'willingness' as held in various judgments of the Supreme Court and one such judgment of the Supreme Court in this regard is in the case of J.P. Builders and Another v. A. Ramadas Rao and Another, VIII (2010) SLT 546 IV (2010) CLT 492 (SC)(2011) 1 SCC 429. We will therefore have to examine as to whether the plaintiff was always ready and willing to enter into the sale deed till the time of the present final arguments and from the date of entering into the agreement to sell. At the time of considering this issue, no doubt, it is borne in mind that the plaintiff has to be willing to perform its part of the contract only when the defendants have obtained the NOC, however, Section 16(c) of the Specific Relief Act requires not one but two aspects to be proved by the plaintiff i.e. both readiness and willingness. In law the aspect of willingness being there is one which is to be acted upon by making the payment when the defendants make themselves capable of performing the agreement to sell by taking the necessary NOC, however, as contrasted from willingness, readiness is an aspect which has to be independently proved. Readiness pertains to the financial capacity of a proposed purchaser to make payment of the balance consideration under the agreement to sell. The issue with respect to readiness and willingness is overlapping with the issue to defendants being guilty of breach of contract, but, the expression "has always been ready and willing" is an expansive expression not only encompassing therein that it has to be shown that the defendants are guilty of breach of contract, but also that it has to be shown that plaintiff had necessary financial capacity to pay the balance sale consideration at all points of time after the agreement to CS No.545/16 Page 15 of 24 ADJ-01/NE/KKD/Delhi sell was entered into. The aspect of a plaintiff/proposed purchaser always being ready to perform its part of the contract i.e., having the necessary capacity to pay the sale consideration is because specific performance is a discretionary relief and an alternative to the relief of grant of damages...."
24. Reliance is also placed upon the judgment of Hon'ble Delhi High Court passed in RFA No.518/2018 decided on 17.07.2018 in the case of Ritu Saxena v. J.S. Grover & Anr., wherein the aspect of readiness & willingness and the grant of discretionary and the principles governing grant of discretionary relief of specific performance and agreement regarding sale of property, was dealt with in detail. Reliance therein was placed upon the judgment of CS(OS) No.1261/1995 titled as M/s Hotz Industries Pvt. Ltd. Vs. Dr. Ravi Singh (Since Deceased Through LRs) & Ors. Paras 14 to 17 reads as under:
"14. The next issue which arises is that even if the defendants have to be held guilty of the breach of contract being the agreement to sell dated 10.2.1995, 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, two issues have to be decided in favour of the plaintiff. One issue is that the plaintiff has to prove that it always has been and continued to be ready and willing to perform its part of the agreement to sell, and as is so required by Section 16(c) of the Specific Relief Act, 1963, the subject matter of the issue no.6. I note that the issue no.6 framed is not happily worded as it does not contain the requirement of continuous readiness and willingness as the requirement of Section 16(c) of the Specific Relief Act is that a plaintiff in a suit for specific performance must always be and continues to be ready and willing to perform his part under the agreement to sell, and therefore issue no.6 is read as modified in terms of the requirement of the language of CS No.545/16 Page 16 of 24 ADJ-01/NE/KKD/Delhi Section 16(c) of the Specific Relief Act. One other issue would be whether plaintiff is entitled to discretionary relief for specific performance.
25. Let us now examine as to whether plaintiff has led evidence and proved in this suit that plaintiff has always been and continues to be ready and willing to perform his part of the contract.
26. In the opinion of the court, the expression "has always been and continues to be ready and willing to perform the contract"
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. 51,50,000/- 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 money, but however it is equally necessary for plaintiff to show his financial capacity, and having such assets, for being able to pay the balance sale consideration. When the facts of the present case are examined, it is found that plaintiff in order to prove readiness and willingness has relied upon the aspect is the availability of the balance sale consideration on the due date on sale of a plot at Chand Nagar and Mustafabad for total sale consideration of Rs. 25,25,000/- and 24,10,000/- respectively.
27. This court can't agree with the argument urged on behalf of plaintiff that plaintiff had proved his readiness and willingness as required by Section 16(c) of the Specific Relief Act. As already observed above, readiness and willingness have to be a continuous act from the date of entering into the agreement to sell till at least the leading of evidence by plaintiff in the suit, if not even as on date at the stage of final arguments, and in this regard it is seen that plaintiff CS No.545/16 Page 17 of 24 ADJ-01/NE/KKD/Delhi has not been able to prove the same. Thus, it is abundantly clear that the amount of consideration, which a buyer must pay to the seller, must be necessarily proved to be available and only on proof of which readiness & willingness would stand established.
28. Now testing the case of the plaintiff on the above touchstone, it has to be seen whether plaintiff has been able to prove the necessary ingredient i.e. the readiness & willingness. On this aspect, it is observed that plaintiff did not lead any evidence to prove that he actually sold the abovesaid properties. In cross-examination, plaintiff deposed that he did not remember whether he had withdrawn Rs. 5 Lacs from his saving account. He admitted that he had not shown the payment of Rs. 5 Lacs to defendant in his ITR or Balance sheet. He further admitted that he was not having the amount of Rs. 46,50,000/- in his bank account on 18.11.2013. He further deposed that he had sold Chand Nagar property to one Mr. Siddiqui for Rs. 25,25,000/- and Mustafabad property to Mr. Mehfooz Alam for Rs. 24,10,000/-. However, plaintiff neither produced sale documents nor examined them as witness. In fact, the given details are not mentioned in either in the pleadings of plaintiff nor in his evidentiary affidavit. Plaintiff claimed to have received the entire amount in cash but admitted that he did not disclose the sale of the aforesaid properties in his ITR. Plaintiff also admitted the he had not got any demand draft prepared in the name of defendant, prior to 18.11.2013.
29. Thus, in the absence of there being any evidence regarding availability of funds with plaintiff, the averment is nothing more than a bald averment carrying no weight. In this regard it would be important to note down the observations made by Hon'ble Delhi High Court in the case of Madan Mohan v. Sheel CS No.545/16 Page 18 of 24 ADJ-01/NE/KKD/Delhi Gulati, 223 (2015) DLT 57. In the said case, it was observed that mere selfserving ipse dixit can't be held to be discharge of onus of prove with respect to a very important issue of readiness & willingness which is required to be proved by a proposed buyer in terms of Sec.16(c) of The Specific Relief Act, 1963.
30. Thus, plaintiff has not at all been able to show that he had, at any point of time, the balance consideration of Rs. 46,50,000/- and thus the essential ingredient of readiness on his part, is not established. And because of this reason, the arguments of plaintiff regarding default on the part of defendant etc. due to defective title or technical issues concerning transfer of title of the property in question to plaintiff etc. are of no relevance and need not to be discussed.
31. The Hon'ble Supreme Court in the judgment of Saradamani Kandappan vs. Mrs. S. Rajalakshmi, 2011 (12) SCC 18, had also considered the aspect of payment of a nominal advance price by plaintiff and its effect on the discretion of the Court in granting the discretionary relief of specific performance. Para 37 and 43 of the said judgment are extracted herein-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 relating to immovable property, to cover his delays, laches, breaches and "non-readiness". The precedents from an era, when high inflation was unknown, holding that time is not of the CS No.545/16 Page 19 of 24 ADJ-01/NE/KKD/Delhi 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.
32. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanandam & Ors. Vs. Vairavan 1997(1) SCR 993 that "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. The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract. 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 CS No.545/16 Page 20 of 24 ADJ-01/NE/KKD/Delhi not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three-year 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."
33. Also, Hon'ble Delhi High Court in the case of Baldev Behl & Ors. v. Bhule & Ors., 2012 SCC OnLine Del 4730, while giving interpretation to the term 'substantial acts' as mentioned in Sec.20(3) of Specific Relief Act, has held that where substantial consideration is not paid (and for which a rough benchmark can be taken as 50% of the consideration) and where the plaintiff is not in possession of the subject property, the plaintiff is not entitled to the discretionary relief of specific performance.
34. Reverting to the facts of the case, dehors the fact that there was no readiness and willingness on part of plaintiff, on the basis of these guidelines, as no substantial act has been done by plaintiff, even otherwise he is not entitled to the discretionary relief of specific performance. Having held that plaintiff is not entitled to the relief of specific performance, the next question that comes up for consideration is whether plaintiff is entitled to return of Rs.5 lacs paid to defendant at the time of entering into Agreement to Sell or can the defendant be permitted to forfeit the said amount ?
35. Regarding forfeiture of the earnest money paid under an Agreement to Sell, earlier there were two divergent views taken by Hon'ble Supreme Court. One in the case of Fateh Chand v. Balkishan Das, 1964 (1) SCR 515 wherein it was held that once CS No.545/16 Page 21 of 24 ADJ-01/NE/KKD/Delhi loss is not pleaded and proved to be caused to the seller, then earnest money amount cannot be forfeited. This judgment was later on followed and relied upon in the case of Kailash Nath Associates v. DDA, (2015) 4 SCC 136. The other divergent view was taken in the case of Satish Batra v. Sudhir Rawal, (2013) 1 SCC 345, wherein it was held that earnest money in an Agreement to Sell can always be forfeited without pleading and proving any requirement of the seller having suffered any loss.
36. These judgments came up for discussion in a recent judgment of Hon'ble Delhi High Court in the case of M.C. Luthra v. Ashok Kumar Khanna, 2018 SCC OnLine Del 7462. Para 20 of the said judgment is reproduced herein-under:
"20. All the judgments of the Supreme Court which have been relied upon in Satish Batra's case (supra) are of a Bench strength lesser than the Constitution Bench strength of the Supreme Court in Fateh Chand's case (supra) and the law is well settled that it is the judgment of the larger Bench of the Supreme Court which will prevail over the judgment of a Bench strength of lesser number of judges. Also, as already stated above, in the recent judgment in Kailash Nath Associates case (supra) Supreme Court has not clarified that a forfeiture of an earnest money necessarily falls under Section 74 of the Contract Act i.e. before forfeiture can take place it must be necessary that loss must be caused. Also, Supreme Court has further clarified in Kailash Nath Associates case (supra) that it is very much possible that forfeiture of an amount can be in the nature of penalty and if the amount which is allowed to be forfeited under the contract is in the nature of penalty then Courts are empowered to treat the amount of liquidated damages (earnest money) as one in the nature of penalty clause and that earnest money amount only represents the upper limit of damages CS No.545/16 Page 22 of 24 ADJ-01/NE/KKD/Delhi which are allowed to be forfeited in terms of the forfeiture clause, and actual forfeiture only of a lesser and a reasonable amount should be allowed instead of the large amount/penalty as stated under a contract as being entitled to be forfeited and that too merely because a contractual clause allows such a forfeiture."
37. Thus, the legal proposition that emerges out is that the earnest money can be forfeited only where the loss is caused to the seller and for that it is necessary that the loss must be pleaded and proved by the seller. Reverting to the facts of the case, it would be relevant to reproduce extract from Ex.PW-1/1, which contains the forfeiture clause. The same states that an advance payment (BAYANA) of Rs.5,00,000/ (Rupees Five lacs only) was made by plaintiff and duly received by defendant on 19.05.2013 and the balance amount of Rs. 46,50, 000/- to be payable by plaintiff to defendant by 18.11.2013. And that if plaintiff fails to make the payment of the said balance at the time of execution of the sale deed, his advance money (BAYANA) shall be forfeited.
38. Now, admittedly, defendant has neither pleaded nor proved any actual loss suffered by him for non-performance of the contract. Further, the question of forfeiture of amount paid, even otherwise, does not arise in as much as a reading of the Bayana Agreement Ex.PW-1/2 makes it apparent that the amount paid by plaintiff was in the nature of advance payment and not earnest money. Advance payment, being part-consideration, otherwise also cannot be forfeited. Hence, in view of the aforesaid discussion, this court holds that plaintiff is entitled to be returned of Rs.5 lac paid to defendant at the time of entering into the Agreement to Sell along with interest @ 8% per annum from the date of payment i.e. 18.11.2013 till recovery thereof.
CS No.545/16 Page 23 of 24 ADJ-01/NE/KKD/Delhi Issues accordingly stand decided.
39. Relief:
In view of the above discussion on the aforesaid issues, the suit of plaintiff is disposed off in the following terms:
(i) Plaintiff is entitled to recovery from defendant the advance money i.e. Rs.5 lacs along with interest @8% per annum from the date of payment i.e. 18.11.2013 till recovery thereof.
(ii) Plaintiff is entitled to the cost as well.
40. Decree sheet be prepared accordingly.
41. File be consigned to Record Room after necessary compliance.
Announced in the open court MONA TARDI KERKETTA on this 31st May, 2022 Addl. District Judge(NE)-01 Karkardooma Courts, Delhi.
CS No.545/16 Page 24 of 24 ADJ-01/NE/KKD/Delhi