Delhi District Court
Pienne Industrial Consultants P. Ltd vs Ram Niwas on 8 April, 2024
Suit No. 17138/16 Page 1 of 61
IN THE COURT OF SH. DIVYANG THAKUR
ADDL. DISTRICT JUDGE-03:
SOUTH WEST DISTRICT: DWARKA COURTS:NEW DELHI
Civil Suit No. 17138/2016
CNR No. DLSW01-003093-2016
In the matter of :
M/s Pienne Industrial Consultants (P) Ltd.
A Company Incorporated under the Indian Companies Act, 1956
having its registered office at:
226, 2nd Floor, Vardhaman Plus Citi Mall,
LSC, Sector 23, Dwarka, New Delhi-110075
....Plaintiff
Versus
Sh. Ram Niwas
S/o Sh. Rattan Lal
R/o V.P.O. Badusarai, New Delhi
......Defendant
Date of institution of the suit : 06.05.2015
Final Arguments Heard on : 04.04.2024
Date of Judgment : 08.04.2024
Decision : Decreed
M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas
Suit No. 17138/16 Page 2 of 61
SUIT FOR SPECIFIC PERFORMANCE AND PERMANENT
INJUNCTION
JUDGMENT :
Brief background of the case
1. Initially, the present suit was filed before the Hon'ble High Court of Delhi being CS (OS) 1270/2015 wherein summons for settlement of issues along with notice of the application under Order XXXIX R 1 and 2 of CPC were issued to the Defendant and vide the order of even date i.e. 06.05.2015, the Defendant was restrained by an ex-parte ad interim injunction from selling, alienating or transferring the suit property. However, on the next date of hearing, the interim order was confirmed during the pendency of the suit being unopposed by the Ld. Counsel for Defendant and therefore, the application under Order XXXIX R 1 and 2 of CPC was disposed off. Thereafter, the matter was transferred to the Ld. District Judge, South-West, Dwarka Courts, New Delhi vide order dated 18.02.2016.
2. Present suit has been filed by the Plaintiff seeking (a) decree of specific performance of the Agreement to Sell/Contract dated 19.09.2012 in respect of the 1/4th share of the Defendant in the land M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 3 of 61 measuring 14 Bighas 19 Biswas comprised in Mustatil No. 8, Killa No. 20 West (4-13), Mustatil No. 11, Killa No. 1 (1-12), Mustatil No. 12, Killa No. 25 (3-04), Mustatil No. 19, Killa No. 5 (1-16), Mustatil No. 20, Killa No. 1 (0-11), Mustatil No. 21, Killa No. 4 east (1-04), 5 (1-19), situated in the Revenue Estate of Village Badusarai, Tehsil Najafgarh (Palam), Distt. South-West, New Delhi seeking directions to the Defendant to perform his part and execute the sale deed pertaining to ¼ th share in the said land in favour of the Plaintiff or in the alternative, seeking directions to the Defendant to pay / refund the amount of Rs. 77,86,500/- which was paid as consideration under the agreement to sell dated 19.09.2012 along with interest at the rate of 24% per annum and (b) costs of the suit.
PLAINT
3. The brief facts of the case as mentioned in the plaint are reproduced here as under:
(i) It is averred that Plaintiff is a company incorporated under the laws of India and having its registered office at 226, 2nd Floor, Vardhaman Plus Citi Mall, LSC, Sector 23, Dwarka, New Delhi-
110075. It is averred that the subject-matter of the present suit is 1/4th M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 4 of 61 share of the Defendant in the land measuring 14 Bighas 19 Biswas situated in the Revenue Estate of Village Badusarai, Tehsil Najafgarh (Palam), District South-West, New Delhi. It is submitted that Defendant was having 1/4th share in the land bearing Mustatil No. 8, Killa No. 20 West (5-00), Mustatil No. 9, Killa No. 15 east (0-6), 16 east (0-11), Mustatil No. 11, Killa No. 1 (1-12), Mustatil No. 12, Killa No. 25 (3-04), Mustatil No. 19, Killa No. 5 (1-16), Mustatil No. 20, Killa No. 1 (0-02), Mustatil No. 21, Killa No. 4 east (1-00), 5 (1-08). It is submitted by the Plaintiff that the lands of village Badusarai had been subject-matter of consolidation proceedings and during the said proceedings, vide resolution no. 62 dated 31.01.2015, changes have been carried out in the aforesaid land holding of the Defendant and as such, in place of land bearing Khasra nos. 9//15 (0-06), 16 (0-11) and 8//20 (0-07), the land bearing Khasra nos. 20//(0-09), 21//4 (0-04) and 21//5 (0-11) were added into the khata of the Defendant.
(ii) It is further submitted that as a result of the aforesaid changes, the current holding of the Defendant is land measuring 14 Bighas 19 Biswas comprised in the land bearing Mustatil No. 8, Killa No. 20 West (4-13), Mustatil No. 11, Killa No. 1 (1-12), Mustatil No. 12, M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 5 of 61 Killa No. 25 (3-04), Mustatil No. 19, Killa No. 5 (1-16), Mustatil No. 20, Killa No. 1 (0-11), Mustatil No. 21, Killa No. 4 east (1-04), 5 (1-
19) (hereinafter referred to as the 'said land').
(iii) It is averred that in the year 2012, the Defendant had approached the Plaintiff with an offer to sell his 1/4th share and assured the Plaintiff that though, he is a co-owner to the extent of 1/4th share, however, in terms of the family settlement amongst various co-owners, he holds exclusive possession of the land measuring 3 bighas and 15 biswas bearing Mustatil No. 11, Killa No. 1 (1-12), Mustatil No. 12, Killa No. 25/2 (0-07), Mustatil No. 19, Killa No. 5 (1-16). It is further submitted that the total sale consideration was agreed at Rs. 77,86,500/- and subsequently, the parties had entered into an agreement to sell dated 25.07.2012 and the Plaintiff had paid a total sum of Rs. 7,75,000/- as part sale consideration, out of which a sum of Rs. 1,00,000/- was paid in cash and remaining sum of Rs. 6,75,000/- was paid vide cheque bearing no. 047337 dated 25.07.2012 drawn on ICICI Bank, Kailash Colony, New Delhi and the said payment was acknowledged by the Defendant by way of a separate receipt. It is further averred in the plaint that the remaining M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 6 of 61 amount of Rs. 70,11,500/- of the total sale consideration was paid to the Defendant on 19.09.2012, out of which a sum of Rs. 69,25,000/- was paid vide cheque bearing no. 047354 dated 19.09.2012 drawn on ICICI Bank, Kailash Colony, New Delhi and balance sum of Rs. 86,500/- was paid in cash. Subsequently, Defendant had executed a fresh agreement to sell recording the payment of full sale consideration.
(iv) It is averred that the Defendant had executed the following documents in favour of the Plaintiff on 19.09.2012:
(a) Agreement to Sell dated 19.09.2012 in favour of the Plaintiff;
(b) Registered SPA in favour of Vidhu Sharma i.e. the signatory of the plaint being document no. 1432, Book No. 4, Vol. No. 1603 on pages 180 to 182;
(c) GPA dated 19.09.2012 in favour of Vidhu Sharma and duly notarized by notary public;
(d) Indemnity bond duly notarized by notary public;
(e) Affidavit duly notarized by notary public and
(f) Will in favour of Sh. Prem Raj Sharma who was one of the Directors of the Plaintiff company and duly notarized by notary M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 7 of 61 public.
(v) It is alleged that neither the agreement to sell dated 25.07.2012 nor the agreement to sell dated 19.09.2012 had prescribed any specified time or outer limit for execution of the sale deed. It is further alleged that the consolidation proceedings in the village had been completed in the month of February 2015 and that the revenue authorities had started issuing NOC / Permission for sale and thereafter, the Defendant stated that he would execute the sale deed in the month of April 2015 and in the meanwhile, NOC / Permission for sale would be obtained. It is further alleged that the signatory of the plaint had received a notice dated 13.04.2015 on behalf of the Defendant through his Advocate wherein it was stated that the SPA dated 19.09.2012 had been cancelled by the Defendant and subsequently, Plaintiff tried to contact the Defendant. It is also alleged that Defendant stated that he would execute the sale deed only if the Plaintiff agreed to pay him the additional money as there had been manifold increase in the price of the said land. It is alleged that Defendant had also threatened the Plaintiff to create third party rights and aggrieved, Plaintiff had filed the present suit for specific M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 8 of 61 performance and permanent injunction against the Defendant Ram Niwas.
PROCEEDINGS OF THE CASE
4. Summons for settlement of issues along with notice of the application under Order XXXIX R 1 and 2 of CPC were issued to the Defendant and vide the order of even date i.e. 06.05.2015, the Defendant was restrained by an ex-parte ad interim injunction from selling, alienating or transferring the suit property. However, on the next date of hearing, the interim order was confirmed during the pendency of the suit being unopposed by the Ld. Counsel for Defendant and therefore, the application under Order XXXIX R 1 and 2 of CPC was disposed off. Thereafter, the matter was transferred to the Ld. District Judge, South-West, Dwarka Courts, New Delhi and WS was filed by the Defendant and matter was referred to mediation for exploring the possibility of settlement, however, the same could not be settled. Thereafter, an application under Order XII R 6 of CPC along with Replication to the WS of the Defendant was filed on behalf of the Plaintiff. Application of the Plaintiff under Order XII R 6 of CPC was dismissed as not pressed vide order dated 21.02.2019. M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 9 of 61 DEFENCE TAKEN UP IN THE WRITTEN STATEMENT
5. It is alleged by the Defendant in the written statement that the Plaintiff has not approached the Court with clean hands and suppressed the material facts and therefore, the suit of the Plaintiff is liable to be dismissed. It is further alleged that the Plaintiff had played fraud against the Defendant by preparing the documents with lesser amount than the agreed amount between the parties and therefore, the Defendant had cancelled the SPA in favour of the Plaintiff company after knowing this fact. It is further alleged that the Plaintiff has ongoing dispute against many villagers namely Rajesh S/o Mehar Singh, Ashok S/o Hari Ram, Deen Dayal S/o Hari Ram, Om Prakash S/o Hari Ram, Nand Kishore S/o Hari Ram, Rajesh S/o Hari Ram and Rajender S/o Sher Singh, all residents of Village Badusarai, P.S. Chhawla, Delhi-110043. It is further alleged that the suit of the Plaintiff shall be dismissed as the documents filed by the Plaintiff are not registered and no cause of action arises against the Defendant. It is submitted that the consolidation proceedings have not been completed in the village and numbers of litigations are pending before higher authorities. It is further alleged that the suit is not maintainable as it is M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 10 of 61 not clarified that under what capacity, Sh. Vidhu Sharma had been authorized to file the present suit.
6. It is submitted by the Defendant that the Defendant had never approached the Plaintiff, rather it was the broker of the company i.e. Jai Singh S/o Ram Swaroop R/o 49, Nanak Heri, New Delhi-71 who had approached the Defendant with respect to the sale and purchase of the land of the Defendant and it was agreed between the Defendant and Jai Singh that his 1/4th share would be sold for a total sale consideration of Rs. 3,20,00,000/- and when the Defendant noticed the said fact, then he immediately got cancelled the SPA in favour of Vidhu Sharma and notice to the said effect was sent to the Plaintiff. It is further submitted that no Shizra plan showing the portion of the Defendant had been supplied to the Defendant. It is further submitted that the Defendant was under the impression that total amount of sale consideration would be Rs. 3,20,00,000/- and the Defendant also insisted to get the agreement registered. It is alleged that the consideration of Rs. 77,86,500/- is contrary to the oral agreement that had taken place between the parties. It is further submitted that a number of objections had been pending in the Court of Deputy M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 11 of 61 Commissioner and other authorities. It is alleged that it was the Plaintiff who wanted to grab the property of the Defendant by way of SPA to get transfer the land of the Defendant to the Plaintiff company and it is also submitted that Prem Raj Sharma and Vidhu Sharma are father and son and therefore, they have colluded to cheat the Defendant. It is averred by the Defendant that he is ready to return the amount received by him from Plaintiff company without interest. It is further submitted that the Defendant is ready to get his share transferred in favour of the Plaintiff upon the payment of balance sale consideration of Rs. 2,42,13,500/- and subsequent execution of the sale deed thereupon.
FRAMING OF ISSUES
7. Admission-denial of documents was not recorded on behalf of the parties. On basis of the aforesaid pleadings, on 21.02.2019, the following issues were framed:
(i) Whether plaintiff is entitled to decree directing defendant to perform his part of agreement to sell dated 19.09.2012 by executing registered sale deed in respect of his 1/4th share in the land in favour of plaintiff and / or its nominee? (OPP) M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 12 of 61
(ii) Whether plaintiff, in the alternative, is entitled to decree directing defendant to refund Rs. 77,86,500/- along with interest @ 24% per annum w.e.f. 19.09.2012 till the date of actual payment? (OPP)
(iii) Whether fraud has been played by the plaintiff upon defendant by preparing documents mentioning lesser amount? (OPD)
(iv) Whether plaintiff's suit is not maintainable as consolidation proceedings in Village Badu Sarai have not been completed? (OPD)
(v) Relief.
No other issue arose or claimed by the parties. Matter was proceeded for plaintiff's evidence.
EVIDENCE LED BY THE PARTIES
8. On 11.04.2019, PW-1 Sh. Prem Raj Sharma had tendered his evidence by way of affidavit exhibited as Ex. PW1/A and relied upon the following documents:
(a) Certified copy of certificate of incorporation bearing no. 19408 of 1984-85 as Ex. PW1/1;
(b) Extract of resolution of the meeting dated 13.04.2015 as Ex.
M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 13 of 61 PW1/2;
(c) Certified copy of list of directors along with Form 32 issued by Ministry of Corporate Affairs as Ex. PW1/3 and Ex. PW1/4 (running in 5 pages);
(d) The Shizra plan as Ex. PW1/5 was de-exhibited;
(e) Agreement to sell dated 25.07.2012 as Ex. PW1/6;
(f) Receipt dated 26.07.2012 as Ex. PW1/7; (g) Agreement to sell dated 19.09.2012 as Ex. PW1/8; (h) Receipt dated 19.09.2012 as Ex. PW1/9; (i) Registered SPA dated 19.09.2012 in favour of Sh. Vidhu Sharma as Ex. PW1/10; (j) GPA dated 19.09.2012 in favour of Sh. Vidhu Sharma as Ex. PW1/11; (k) Indemnity Bond dated 19.09.2012 as Ex. PW1/12; (l) Affidavit dated 19.09.2012 as Ex. PW1/13; (m) Will dated 19.09.2012 as Ex. PW1/14; (n) Bank statement of account no. 662705110273 of M/s ICICI
Bank w.e.f. 01.04.2012 to 31.03.2013 as Mark A;
(o) Certificate of encashment issued by M/s ICICI Bank as Ex. M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 14 of 61 PW1/16;
(p) Legal notice dated 13.04.2015 as Ex. PW1/17 and
(q) Copy of order dated 13.12.2016 passed by the Consolidation officer as Mark B.
9. It was deposed by the PW-1 in his cross-examination that he had prayed to deliver the possession of the suit property and that he had also purchased the e-stamp papers for execution of agreement to sell dated 25.07.2012 and 19.09.2012 and indemnity bond dated 19.09.2012 whereas the e-stamp papers for execution of the SPA and GPA dated 19.09.2012 were not purchased by him and the same were purchased by Vidhu Sharma who is the son of PW-1. It is further deposed by PW-1 that the contents of para no. 3 of Ex. PW1/6 are correctly written. It is further deposed by PW-1 that at the time of agreement, the suit property was under consolidation proceedings and in lieu of the said proceedings, new land and khasra numbers were allotted to the Defendant and at the time of filing of the present suit, Defendant was holding the possession of the land. It is further deposed by PW-1 that he did not remember whether he had placed any document with respect to completion of consolidation proceedings M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 15 of 61 with respect to Village Badusarai. It is further stated by him that he had not contacted any mediator for purchasing the suit property from the Defendant and the Defendant himself had contacted PW-1 as being known to him, however, PW-1 did not remember the exact date. It is also submitted that he had made inquiries from the co-bhumidars and also from Revenue Department and Patwari. It is stated by him that Ex. PW1/6 to Ex. PW1/14 were drafted in the office of Deed Writer Sh. Mukesh Dahiya at Kapashera in his presence along with Defendant, Gulshan and Jai Singh. PW-1 voluntarily stated that on subsequent agreement dated 19.09.2012, PW-1 along with Defendant and one Om Prakash and Jai Singh and Vidhu Sharma were present, however, for another agreement dated 25.07.2012, Gulshan, Jai Singh, Defendant and PW-1 were present. It is further deposed by PW-1 that he did not remember at which time aforesaid documents were executed. It is further deposed that PW-1 had no ancestral property in the village Badu Sarai and that he had purchased the agricultural land measuring about 12-15 acres in the name of the company in village Badusarai.
10. PW-1 was further cross examined on 03.09.2019 and he had M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 16 of 61 deposed that he was authorized by the company to enter into agreement with Defendant at the time of execution of agreement dated 25.07.2012 and 19.09.2012. He had correctly deposed that Sh. Vidhu Sharma was not authorized to enter into agreement with the Defendant. He has further deposed that the possession of the suit property was handed over to the Defendant at the time of agreement dated 19.09.2012 and he had come to know about the completion of consolidation proceedings in the year 2015, however, he was not aware about the month. He has further stated on oath that no written document / record of completion of consolidation proceedings had been filed. He has further correctly deposed that his son was authorized by Defendant to execute the sale deed in his favour vide SPA dated 19.09.2012. During cross-examination of PW-1, a suggestion was given by the Ld. Counsel for Defendant that the parties had orally agreed for sale / purchase of suit property for sale consideration of Rs. 2,00,00,000/- which was stated to be incorrect by the PW-1. PW-1 also deposed that the suggestions that signatures of Defendant were fraudulently obtained upon the sale documents for lesser sale consideration and that the documents were executed in the M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 17 of 61 presence of attesting witnesses are incorrect. It was also suggested to the PW-1 that the documents were executed in the presence of the attesting witnesses but he denied the suggestion. It was also suggested that consolidation proceedings were not completed before filing of the present suit which was also denied by the PW-1. PW-1 further deposed that he was not aware about any litigation in respect of consolidation proceedings of Village Badu Sarai, Delhi. It was suggested to the witness PW-1 that he had filed the false and frivolous suit for harassing the Defendant which was also denied by the witness PW-1.
11. Thereafter, Ld. Counsel for Plaintiff had sought permission of the Court to re-examine PW-1 with respect to the authorization / SPA in favour of Sh. Vidhu Sharma and copy of completion of consolidation proceedings filed along with Replication which was allowed by the Court. PW-1 further deposed that he had not applied for obtaining photocopy of order dated 13.12.2016 of Consolidation Officer, Village Badu Sarai, District South-West, New Delhi.
PW-1 was duly cross examined and discharged on 03.09.2019.
12. On 10.02.2020, PW-2 Sh. S.K. Srivastava who was a M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 18 of 61 summoned witness was examined and discharged. He had proved the legal notice dated 13.04.2015 already exhibited as Ex. PW1/17 for cancellation of SPA dated 19.09.2012 executed in favour of Sh. Vidhu Sharma S/o Sh. Prem Raj Sharma. Thereafter, on 25.11.2021, PW-3 Sh. T.Minz, Office Kanungo, SDM Office, Najafgarh, New Delhi was examined and discharged. He had proved the summoned record i.e. Resolution no. 62 dated 31.01.2015 passed by Consolidation Officer of Village Badu Sarai and the certified copy of the same was exhibited as Ex. PW3/A (OSR) (colly). Opportunity to cross examine PW-3 was closed vide order dated 25.11.2021 for non appearance. Thereafter, on 17.10.2022, PW-4 Sh. Leela Dhar Sharma, Patwari, SDM Office, Kapashera, New Delhi was examined, cross examined and discharged. Following documents were exhibited by PW-4:
(a) Mark PW4/4A i.e. copy of order dated 13.12.2016;
(b) Ex. PW4/B i.e. original letter issued by the Tehsildar, Kapashera and
(c) Ex. PW4/C i.e. certified copy of Khatauni of Khata no. 132/143 of Village Badu Sarai, New Delhi.
13. Thereafter, on 08.12.2022, PW-5 Sh. Ashok Pandey, M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 19 of 61 Relationship Manager, ICICI Bank, Sector 23, Gurugram, Haryana was examined, cross examined and discharged. He had proved the certified copy of the bank statement of account number 662705110273 registered in the name of M/s Pienne Industrial Consultants Pvt. Ltd and the said statement was exhibited as Ex. PW5/1 (colly). He was cross examined and discharged on the even date.
14. On 21.02.2023, PW-6 Sh. Vidhu Sharma had tendered his evidence by way of affidavit exhibited as Ex. PW6/A and relied upon already exhibited documents i.e. Ex. PW1/10; Ex. PW1/11; Ex. PW1/14 and Ex. PW1/2.
15. During cross-examination, PW-6 had deposed that he knew Sh. Ram Niwas since the year 2012 and that notarized GPA was executed by Sh. Ram Niwas in his favour. He had further deposed that Plaintiff company had authorized him by way of execution of Board Resolution. It was suggested to the witness that he was never authorized by the Plaintiff company for execution of the documents i.e. agreement to sell dated 19.09.2012 to which the witness denied. It was further deposed by PW-6 that agreed consideration amount between the Plaintiff company and Defendant was Rs. 77,86,500/- and M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 20 of 61 he had voluntarily deposed that the entire consideration amount was already paid to the Defendants. He had further deposed that all the documents relating to the property were not registered by the Sub- Registrar.
16. PW-6 was discharged and no other witness was examined on behalf of the Plaintiff and therefore, PE was closed vide separate statement of PW-6 Sh. Vidhu Sharma on 21.02.2023. Matter was proceeded for Defendant's evidence.
17. On 30.10.2023, DW-1 Sh. Ram Niwas had tendered his evidence by way of affidavit exhibited as Ex. DW1/A and had relied upon the copy of his Aadhar Card which was exhibited as Ex. DW1/2 (OSR). DW-1 was cross examined by the Ld. Counsel for Plaintiff.
18. During cross-examination, DW-1 had deposed that he did not have any knowledge about the contents of the evidence affidavit and he had not entered into any agreement to sell with the Plaintiff company. Thereafter, witness was confronted with agreement to sell dated 25.06.2012, receipt dated 26.07.2012, agreement to sell dated 19.12.2012, SPA dated 19.12.2012, GPA dated 19.12.2012, Indemnity Bond dated 19.12.2012 and Will dated 19.12.2012. The witness had M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 21 of 61 deposed that all the aforesaid documents bear his signatures, thumb impression and photographs at point A and the name of Sh. Jai Singh was not reflected as a buyer. DW-1 had further deposed that he had never lodged any police complaint or filed any case before the competent Courts seeking cancellation of the agreement to sell and other ancillary documents. He had further deposed that he had already received a sum of Rs. 77,86,500/-. The witness further deposed that he had got issued a legal notice to Sh. Vidhu Sharma for cancelling the SPA dated 19.09.2012. The witness was again confronted with the document Ex. PW1/17 to which witness deposed that it is not mentioned that the SPA had been cancelled due to mentioning of lesser amount as mentioned in agreement to sell Ex. PW1/8. DW-1 further deposed that he had executed cancellation deed of SPA dated 19.09.2012 on 17.04.2015 and the cancellation deed was drafted on his instructions and he had also disclosed all the facts at the time of preparation of the cancellation of SPA. The witness could not say whether Jai Singh was holding any authorization from the company for determining the consultation amount of the subject land.
19. It was suggested to the witness that the agreed consideration M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 22 of 61 amount between the Plaintiff and Defendant was Rs. 77,86,500/- which was denied by DW-1. It was also suggested to the witness that the Plaintiff company had assured the witness to pay a consideration amount of Rs. 3,20,00,000/- in respect of the said land which was also denied by the witness.
20. DW-1 had further deposed that consolidation proceedings were completed in the year 2016 and that he had not filed any case before the revenue authorities in respect of the subject land. He had further deposed that vide resolution no. 62, certain portion of the holding was changed and that after passing of the said resolution no. 62, no other resolution was passed by the revenue authorities in respect of the subject land. It is further deposed that DW-1 is holding the land in terms of resolution no. 62 passed by the consolidation officer and he did not have any document in which the consideration amount of the subject land is shown as Rs. 3,20,00,000/-.
21. It was further suggested to DW-1 that he was not having any document showing the consideration amount as Rs. 3,20,00,000/- as no such document was ever executed and that the agreed consideration amount was Rs. 77,86,500/- which was denied by the witness. M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 23 of 61
22. DW-1 further deposed that post execution of the agreement to sell, he had never applied for the NOC from the revenue authorities for execution of sale deed in respect of the subject land.
23. It was also suggested to the witness that the total amount was fixed at Rs. 77,86,500/- and that he had not executed the sale deed as he had not received the total consideration amount. The said suggestion was denied by the witness. It was also suggested to the witness that the company had already paid the total consideration amount and nothing was due towards the company as balance consideration amount which was also denied by DW-1.
24. DW-1 was discharged on 30.10.2023 and matter was thereafter, fixed for final arguments as no other witness was examined on behalf of the Defendant and DE was closed vide separate statement of the Defendant.
25. Thereafter, Ld. Counsel for Defendant had orally requested to recall the Defendant's witness which was allowed subject to payment of cost. Thereafter, on 26.02.2024, DW-2 Sh. Ram Khilari had tendered his evidence by way of affidavit exhibited as Ex. DW2/A. During cross-examination, DW-2 had deposed that he was not aware M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 24 of 61 about the contents of the evidence affidavit and he had known Ram Niwas for the last 20 years. He had further deposed that agreement to sell was executed in his presence, however, he could not tell whether he had signed the same or not. The witness was confronted with document Ex. PW1/6 and Ex. PW1/8 to which the witness deposed that the said documents do not bear his signature. DW-2 further deposed that he does not know whether the Plaintiff company is having any litigation with any other person. It was further deposed by DW-2 on oath that agreement was executed in the year 2012 but he could not tell the exact date and the same was done in Village Kanganheri but he could not tell the exact place. He further deposed that the entire consideration amount was Rs. 77,86,500/- which was paid by the Plaintiff to the Defendant. He further deposed that no dispute in respect of the suit land was pending before the Revenue Court and he could not tell whether Ram Niwas had applied for NOC or not.
26. DW-2 was discharged on 26.02.2024 and DE was closed on the even date vide separate statement of the Ld. Counsel for Defendant.
Matter was proceeded for final arguments.
M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 25 of 61 CONTENTIONS OF THE PARTIES
27. Final arguments were heard on behalf of the parties. Ld. Counsel for Plaintiff has argued that the Plaintiff had been able to establish his case for specific performance and that it was the admitted fact that the entire sale consideration had already been paid. He has further submitted that the Defendant has tried to escape the agreement and that no proper defence has been taken to show as to why this Court could not grant specific performance in the favour of the Plaintiff. Ld. Counsel for Plaintiff has relied heavily upon the cross- examination of the Defendant to submit that there is no evidence to show that there was any fraud or mistake in the execution of agreement to sell. He has submitted that it has been admitted by the Defendant that he had affixed his thumb impression and signatures at the relevant documents.
28. Per contra, it was submitted on behalf of the Defendant that the sale consideration as mentioned was not correct and the remaining sale consideration has not been paid by the Plaintiff and that the wrong contents were mentioned in the agreement to sell. It has been further submitted that as the agreement to sell is not registered, no specific M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 26 of 61 performance can be granted. The Ld. Counsel for Defendant has relied upon the judgment of the Hon'ble Supreme Court in Ramathal and Ors. Vs. K. Rajamani (Dead) Through LRs and Anr in CA No. 8830/2012 (2023) INSC 737. It has been pleaded that the Defendant was an illiterate person and completely unaware that the Plaintiff intended to play fraud by mentioning lesser sale consideration than the one agreed upon. It has been further submitted that the market value of the suit property was much more than the one shown on the agreement to sell.
FINDINGS
29. I have heard the parties and perused the record. My issue wise findings are here as under:
Issue no. (iii) "Whether fraud has been played by the plaintiff upon defendant by preparing documents mentioning lesser amount? (OPD)"
The onus was upon the Defendant to prove his pleadings qua the mentioning of lesser amount by the Plaintiff. To understand the nature of the plea, and the law to be applied, the defence of the Defendant has to be examined as given in his written statement. M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 27 of 61 It is a specific plea in the written statement that "the plaintiff has played fraud against the defendant thereby preparing the documents lesser amount than the agreed amount between the parties and when this factum was known to the defendant, he got cancelled the special power of attorney executed by defendant in favour of the plaintiff company" (Para 2 of Preliminary submissions of WS). It has been specifically pleaded that "it was broker of the company i.e. Jai Singh S/o Ram Swaroop R/o 49, Nanakheri, New Delhi-110071 approached the defendant with respect to sale and purchase of land of the defendant and it was agreed between the defendant and witness Jai Singh that his 1/4th share will be sold for total consideration of Rs. 3,20,00,000/- and when the defendant noticed regarding this fact, then he immediately got cancelled special power of attorney in favour of Vidhu Sharma..........." (Para 6 of the Reply on Merits of the WS). It has been pleaded that "it is clarified that the defendant is not having knowledge of English and as such, he could not go through the contents of the agreement........... the defendant was under impression that total amount will be Rs. 3,20,00,000/-..............." (Para 9 of the Reply on Merits of the WS).
M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 28 of 61
30. The proof of the aforesaid averments was upon the Defendant. Therefore, it has to be examined whether the Defendant could establish the aforesaid facts. Before proceeding further, as the present plea is essentially a plea of non est factum, the legal ingredient of the plea as laid down in the various judicial authorities must be examined.
31. In Ramathal v. K. Rajamani, 2023 SCC OnLine SC 1022, Hon'ble Supreme Court of India has observed as under:
"17. A plea of non est factum can be taken by an executor or signatory of the deed to plead that the said document is invalid as its executor/signatory was mistaken about its character at the time of executing/signing it. It is a latin maxim which literally means "it is not the deed." A plea of non est factum is a defence available in Contract Law allowing a person to escape the effect of a document which she/he may have executed/signed.
18. As already noted above, the plea of non est factum basically means, "it is not my deed." The said plea has been a subject matter of consideration of this court in the case of Bismillah v. Janeshwar Prasad (supra). In the said M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 29 of 61 case, the plaintiff/appellant therein had claimed herself to be a Pardanashin lady and on the representation of the defendant/respondents, had appointed them as agent to manage the estate under a written document which was drafted in Hindi, a language not known to her. Later on, she discovered that it contained an unauthorized clause empowering sale of properties. Taking advantage of the same, the said agents had executed fraudulent and elusive sale of the said property. The said case set up the plaintiff/appellant was considered and dealt with in paras 12 and 13 of the report. A further issue which this Court considered in the said case was a distinction between fraudulent misrepresentation as to the character of the document and fraudulent misrepresentation as to the contents thereof. Such defense of non est factum was held to be available only where the mistake was as to the very nature or character as to the transaction. This Court also relied upon an earlier decision in the case of Ningawwa v. Byrappa12. This Court further placed reliance upon the M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 30 of 61 judgment of the House of Lords in case of Saunders v. Anglia Building Society13 to fine tune the distinction between the document being void or voidable. Paras 11 to 15 of Bismillah (supra) are reproduced hereinunder:
"11. The assumption underlying the reasoning of the High Court is that if the action had really been one based on the need for the cancellation of the deeds, without which possession could not be granted, the civil court would have had jurisdiction. The cause of action in the appellant's suit does admit of being brought within this class of cases.
12. The common law defence of non est factum to actions on specialities in its origin was available where an illiterate person, to whom the contents of a deed had been wrongly read, executed it under a mistake as to its nature and contents, he could say that it was not his deed at all. In its modern application, the doctrine has been extended to cases other than those of illiteracy and to other contracts in writing. In most of the cases in which this defence was pleaded the mistake was induced by fraud; but that was not, M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 31 of 61 perhaps, a necessary factor, as the transaction is "invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signor did not accompany the signature; in other words, that he never intended to sign, and therefore, in contemplation of law never did sign, the contract to which his name is appended"
13. Authorities drew a distinction between fraudulent misrepresentation as to the character of the document and fraudulent misrepresentation as to the contents thereof. It was held that the defence was available only if the mistake was as to the very nature or character of the transaction.
14. In Foster v. Mackinnon [[L.R.] 4 C.P. 704 : 38 LJCP 310], Mackinnon, the defendant was induced to endorse a bill of exchange on the false representation that it was a guarantee similar to one he had signed on a previous occasion. He was held not liable when sued even by an innocent endorsee of the bill. Byles, J. said:
"... The defendant never intended to sign that contract or any such contract. He never intended to put his name to any M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 32 of 61 instrument that then was or thereafter might become negotiable. He was deceived, not merely as to the legal effect, but as to the 'actual contents' of the instrument."
15. This decision was referred to with approval by this Court in Ningawwa v. Byrappa [(1968) 2 SCR 797 : AIR 1968 SC 956]. It was observed : (SCR pp. 800-01) "It is well established that a contract or other transaction induced or tainted by fraud is not void, but only voidable at the option of the party defrauded. Until it is avoided, the transaction is valid, so that third parties without notice of the fraud may in the meantime acquire rights and interests in the matter which they may enforce against the party defrauded."
This would be a voidable transaction. But the position was held to be different if the fraud or misrepresentation related to the character of the document. This court held : (SCR p.
801) "The legal position will be different if there is a fraudulent misrepresentation not merely as to the contents of the M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 33 of 61 document but as to its character. The authorities make a clear distinction between fraudulent misrepresentation as to the character of the document and fraudulent misrepresentation as to the contents thereof. With reference to the former, it has been held that the transaction is void, while in the case of the latter, it is merely voidable." (emphasis supplied) However the House of Lords in Saunders v. Anglia Building Society [[1971] A.C. 1004 : [1970] 3 All ER 961] reviewed the law and held that the essential features of the doctrine, as expressed by Byles, J. in Foster v. Mackinnon [Chitty on Contracts, 25th edn., p. 341], had been correctly stated. Lord Reid, however, observed : (AC headnote at p. 1005) "The plea of non est factum could not be available to anyone who signed without taking the trouble to find out at least the general effect of the document. Nor could it be available to a person whose mistake was really a mistake as to the legal effect of the document. There must be a radical or fundamental difference between what he signed and what M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 34 of 61 he thought he was signing.""
19. The ingredients of the plea of non est factum as laid down not only in the case of Bismillah (supra) are existing in the present case, but also the three parameters as can be deduced from Saunders (supra) were in existence in the present case as well. The aforementioned test for a successful plea of non est factum requires that:
A. The person pleading non est factum must belong to "class of persons, who through no fault of their own, are unable to have any understanding of the purpose of the particular document because of blindness, illiteracy or some other disability". The disability must be one requiring the reliance on others for advice as to what they are signing. As Lord Pearson had aptly put:
"In my opinion, the plea of non est factum ought to be available in a proper case for the relief of a person who for permanent or temporary reasons (not limited to blindness or illiteracy) is not capable of both reading and sufficiently understanding the deed or other document to be signed. By M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 35 of 61 "sufficiently understanding" I mean understanding at least to the point of detecting a fundamental difference between the actual document and the document as the signer had believed it to be."
B. "The "signatory must have made a fundamental mistake as to the nature of the contents of the document being signed", including its practical effects. Lord Wilberfore has succinctly put this aspect:
"In my opinion, a document should be held to be void (as opposed to voidable) only when the element of consent to it is totally lacking, that is, more concretely, when the transaction which the document purports to effect is essentially different in substance or in kind from the transaction intended"
C. The document must have been radically different from one intended to be signed. As Lord Reid Remarked in the judgment:
"There must, I think, be a radical difference between what he signed and what he thought he was signing -- or one M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 36 of 61 could use the words "fundamental" or "serious" or "very substantial." But what amounts to a radical difference will depend on all the circumstances."
Therefore, the first ingredient to be established by the Defendant was that he, due to no fault of his own, could not understand the document and that he required help to understand the document being signed by him. The plea taken in the present case is that of illiteracy and inability to understand the language of English.
32. The Defendant has examined two witnesses i.e. himself and DW-2 Sh. Ram Khilari. In his affidavit of evidence, the Defendant has merely replicated the averments in the written statement and has not further elaborated with regard to the pleas made by him. During the cross-examination, the Defendant has deposed that he had not entered into any agreement to sell with the Plaintiff company. Thereafter, the Defendant was confronted with the agreement to sell dated 25.06.2012 and 19.12.2012, receipt dated 26.07.2012, SPA, GPA, Indemnity Bond and Will, all dated 19.12.2012. The Defendant thereafter, admitted that the aforesaid documents were all bearing his signatures and thumb impressions. He has admitted the fact that in the agreement, the total M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 37 of 61 consideration amount is mentioned as Rs. 77,86,500/-.
33. The Defendant has not produced a single document to show as to what was the standard till which he attended school. He has not specifically averred that he never went to any school in his lifetime. Therefore, the Defendant's bland averment qua his illiteracy has remained unproved in absence of specific evidence or averments in his written statement as well as affidavit of evidence.
34. Moreover, it is pertinent to note that the Defendant's plea of non est factum relates to the consideration amount only. From the facts, it very much appears that the Defendant was well aware about the character of the document being signed by him. He was well aware that he was entering into a sale purchase agreement for his land. Even the identity of the land being sold by him, is not disputed. It is pertinent to note that the Plaintiffs have proved Ex. PW1/6 which is the agreement to sell dated 26.07.2012, receipt Ex. PW1/7 dated 26.07.2012, the subsequent agreement to sell dated 19.09.2012 which is Ex. PW1/8. A perusal of the aforesaid documents i.e. Ex. PW1/6, Ex. PW1/7 and Ex. PW1/8 would show that the amount of sale consideration has been mentioned in figures / numbers apart from M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 38 of 61 being written in words. It has nowhere been pleaded or proved by the Defendant that he is completely unable to even understand mathematical figures and numbers. He has admitted his signatures and thumb impressions on all the aforesaid documents. It is the admitted position that the Defendant had initially received a sum of Rs. 7,75,000/- and thereafter, he had also received the remaining sum of Rs. 69,25,000/- vide cheque and Rs. 86,500/- through cash, thereby, coming to a total of Rs. 77,86,500/-. It would be the most natural conduct for a person selling his land to see the sale consideration figures as the same would be the most important clause of the whole agreement. The said agreement to sell Ex. PW1/6 and Ex. PW1/8 not only bear his signatures but also bear his thumb impressions. It would be extremely reasonable to arrive at a conclusion that the transaction was entered into by the Defendant after knowing fully well that the total sale consideration was for a sum of Rs. 77,86,500/- and not Rs. 3,20,00,000/-. The Defendant has led no evidence to show that his illiteracy is of such nature as to preclude him from even understanding the sale consideration as written in figures or that his mental ability is so less that he could not understand the nature of the transaction. Once M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 39 of 61 it has been established that he has appended his signatures and thumb impressions upon the agreement, it is the general presumption that he is presumed to know the contents of the documents as well as the consequences of his actions. The onus was upon the Defendant to show otherwise and to rebut the presumption which naturally arises from the admitted facts of the case.
35. Moreover, it is not clear as to why the Defendant, on coming to know that such fraud has been played upon him, made no complaint and also made no efforts to contact the Plaintiff company and to give back the sale consideration already received by him till 19.09.2012. Such conduct of the Defendant clearly shows that there was no fault in the sale consideration mentioned in Ex. PW1/6 and Ex. PW1/8 and the story of the Plaintiff has to be accepted in this regard.
36. It is also pertinent to note that the Defendant has given no particulars as to how he came to know that lesser sale consideration has been mentioned in the agreement to sell. No specific date has been mentioned in this regard by him either in his pleadings or in his evidence.
37. It is further pertinent to note that the Defendant executed a M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 40 of 61 special power of attorney which is Ex. PW1/10 and which is also a registered document which mentions the total sale consideration of Rs. 77,86,500/-.
38. During the cross-examination, the Defendant admitted the document Ex. PW1/17. The said document is a legal notice which was sent at the instructions of the Defendant through his Advocate to Vidhu Sharma in whose favour the SPA Ex. PW1/10 was executed. It is pertinent to note that this document was produced by the Plaintiff and not by the Defendant who in fact, did not produce any document whatsoever. The Defendant has offered no explanation that the said notice was not issued at his instructions and in fact, vide para 16 of the Reply on Merits in the WS, has admitted the issuance of the said legal notice.
39. A reading of the document is also instructive. The said legal notice mentions the details of the SPA Ex. PW1/10 along with its registration number. In para 3 of the said notice, it is written that "my client have delivered only power through special power of attorney of the abovesaid land in your favour but due to some unavoidable circumstances, I inform you through this legal notice, my client cancel M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 41 of 61 the said special power of attorney." The said legal notice which is dated 13.04.2015 almost three years after the execution of the agreement to sell and payment of a huge amount of Rs. 77,86,500/- to the Defendant, does not mention any of the facts as pleaded by the Defendant. As per the Defendant's case, when he came to know that an alleged fraud had been played by the Plaintiff, he immediately got cancelled the SPA (reference can be had to para 6 of the Reply on Merits in the WS). It is unclear that if the cause of cancelling the special power of attorney was that the Defendant came to know that a lesser sale consideration was mentioned in the agreement to sell, then why the said fact is not mentioned in the legal notice Ex. PW1/17 dated 13.04.2015. In fact, apart from the said legal notice, there is not a single notice sent by the Defendant to the Plaintiff mentioning his grievance qua the sale consideration mentioned in the agreement to sell and other related documents. The conduct of the parties to a civil dispute can be judged to determine the truth of their claims before the Court. It is against the natural course of conduct that a person, on coming to know of such a fraud as alleged by the Defendant, would stay silent and not address a single communication mentioning the M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 42 of 61 factum of the lesser sale consideration and the actual sale consideration as per him. The Defendant was aware enough to contact an Advocate as would be apparent from a perusal of Ex. PW1/17 which has been sent by Advocate S.K. Srivastava whose enrollment number and stamp is also affixed on the said document. It is inconceivable that such an important fact would be completely omitted in a communication which purports to cancel a registered document executed by the Defendant three years before.
40. Therefore, after reading the evidence as a whole and taking into consideration all the facts and circumstances, I find that the Defendant has completely and miserably failed to prove his plea of non est factum and fraud, the burden of which was firmly upon him. The Defendant was well aware about the nature and character of the transaction as well as the actual sale consideration agreed to by him. Therefore, the said issue is decided against the Defendant and in favour of the Plaintiff.
Issue no. (iv) Whether plaintiff's suit is not maintainable as consolidation proceedings in Village Badu Sarai have not been completed? (OPD) M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 43 of 61
41. The onus of the said issue was upon the Defendant. He has taken a plea that the agreement could not be executed as the consolidation proceedings were pending. Curiously enough, the Defendant during his cross-examination, has admitted the suggestion that in the year 2016, the consolidation proceedings have been completed. It appears that the said ground is a complete afterthought and frivolous in nature. The Plaintiff in order to rebut the claim of the Defendant has summoned the Office Kanungo PW-3 and the Patwari PW-4 to prove that the consolidation proceedings were completed in the year 2016 itself. From a reading of the documents Mark PW4/A, it is apparent that the consolidation proceedings under the East Punjab Holdings Act, 1948 have been completed and consigned by the Consolidation Officer and in fact, no such proceedings are pending. Moreover, the Defendant has been unable to show that the pendency of such proceedings would be a bar to a suit for specific performance under law.
Therefore, the said issue is decided against the Defendant and in favour of the Plaintiff.
Issues no. (i) and (ii) M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 44 of 61 Whether plaintiff is entitled to decree directing defendant to perform his part of agreement to sell dated 19.09.2012 by executing registered sale deed in respect of his 1/4th share in the land in favour of plaintiff and / or its nominee? (OPP);
Whether plaintiff, in the alternative, is entitled to decree directing defendant to refund Rs. 77,86,500/- along with interest @ 24% per annum w.e.f. 19.09.2012 till the date of actual payment? (OPP)
42. The onus was upon the Plaintiff to show that the suit for specific performance should be decreed or in the alternative, that the Plaintiff should receive the refund of the amount already paid by him.
43. Firstly, it has to be considered whether the Plaintiff can have the suit decreed for relief of specific performance.
In Kamal Kumar v. Premlata Joshi, 2019 SCC OnLine SC 12, the Hon'ble Supreme Court of India has held as under:
"10. It is a settled principle of law that the grant of relief of specific performance is a discretionary and equitable relief. The material questions, which are required to be gone into for grant of the relief of specific performance, are First, whether there exists a valid and concluded contract between M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 45 of 61 the parties for sale/purchase of the suit property; Second, whether the appellant has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract; Third, whether the appellant has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed an whether such performance was in conformity with the terms of the contract; Fourth, whether it will be equitable to grant the relief of specific performance to the appellant against the defendant in relation to suit property or it will cause any kind of hardship to the defendant and, if so, how and in what manner and the extent if such relief is eventually granted to the appellant; and lastly, whether the appellant is entitled for grant of any other alternative relief, namely, refund of earnest money etc. and, if so, on what grounds."
In my view, all the requirements which require to be proved for the grant of relief of specific performance are present in the present case. The fact that there exist a valid and concluded contract between M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 46 of 61 the parties for specific performance stands proved. This Court has already held in its findings under issue no. (iii) that the Defendant could not prove his claim of fraud and non est factum. The Defendant has also admitted his signatures and thumb impressions on the agreement to sell Ex. PW1/8. The natural presumption is that a party who signs a contract has entered into the same fully knowing the consequences. The only objection raised by the Defendant and which has been dealt with and rejected was qua the sale consideration which as per him, was Rs. 3,20,00,000/- as against the sale consideration written in the contract which is Rs. 77,86,500/-. The Defendant has taken no pains to prove that the actual market value of the property was in the region of Rs. 3,00,00,000/-. Therefore, the provisions of Section 91 and 92 of the Indian Evidence Act, 1872 would come into play.
44. The second aspect to be seen is the readiness and willingness of the Plaintiff. It has been proved successfully by the Plaintiff that the entire sale consideration has already been paid by them. In this regard, the documents Ex. PW1/8 and Ex. PW1/9 mention the same. The said fact has also been admitted in the pleadings. Reference can be had in M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 47 of 61 this regard to para no. 9 and 10 of the plaint and the corresponding paras in the WS. After going through the agreement Ex. PW1/8, it appears that there is no other recital or act which was to be performed by the Plaintiff and therefore, I find that the Plaintiff had already performed his portion of the agreement and nothing more was to be done for performance of the contract. I find that it has also been proved that the performance of the contract by the Plaintiff was in conformity with the terms of the contract. Therefore, readiness and willingness and performance of the contract by the Plaintiff also stands proved. Here, I may also deal with the objection taken during the course of final arguments by the Ld. Counsel for Defendant that as the agreement to sell is unregistered, the same cannot be admitted as an evidence. The said contention is clearly in teeth of the specific law laid down by the Hon'ble Supreme Court in R. Hemlata Vs. Kashthuri (2023) SCC OnLine SC 381 : (2023) 10 SCC 725 wherein it has been held that the unregistered agreement is very much admissible in evidence and can be acted upon to grant the relief of specific performance.
45. Now, it is to be considered whether it would be equitable to M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 48 of 61 grant the relief of specific performance to the Plaintiff.
The Specific Relief Act, 1963 as it was before the Amending Act of 2018 gave the Court the discretion on basis of equity to grant or refuse the relief of specific performance. Here we may advert to the provisions of Section 20 of the Act as applicable to the present dispute:-
"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 capable 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 M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 49 of 61 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 non-performance 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. Explanation I.--Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b).
Explanation II.--The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff, subsequent to the contract, be determined with reference to M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 50 of 61 the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the 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 other party."
46. The Hon'ble Supreme Court in the judgment of Jayakantham v. Abaykumar, (2017) 5 SCC 178, has observed as hereunder:-
"7. While evaluating whether specific performance ought to have been decreed in the present case, it would be necessary to bear in mind the fundamental principles of law. The court is not bound to grant the relief of specific performance merely because it is lawful to do so. Section 20(1) of the Specific Relief Act, 1963 indicates that the jurisdiction to decree specific performance is discretionary. Yet, the discretion of the court is not arbitrary but is "sound M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 51 of 61 and reasonable", to be "guided by judicial principles". The exercise of discretion is capable of being corrected by a court of appeal in the hierarchy of appellate courts. Sub- section (2) of Section 20 contains a stipulation of those cases where the court may exercise its discretion not to grant specific performance. Sub-section (2) of Section 20 is in the following terms:
"20. (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 non-performance would involve no such hardship on the plaintiff; (c) where the defendant entered M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 52 of 61 into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance."
8. However, Explanation 1 stipulates that the mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, will not constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Moreover, Explanation 2 requires that the issue as to whether the performance of a contract involves hardship on the defendant has to be determined with reference to the circumstances existing at the time of the contract, except where the hardship has been caused from an act of the plaintiff subsequent to the contract.
9. The precedent on the subject is elucidated below:
9.1. In Parakunnan Veetill Joseph's Son Mathew v.
Nedumbara Kuruvila's Son [Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son, 1987 Supp SCC 340 : AIR 1987 SC 2328], this Court held that : (SCC p. M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 53 of 61 345, para 14) "14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff."
9.2. A similar view was adopted by this Court in Sardar Singh v. Krishna Devi [Sardar Singh v. Krishna Devi, (1994) 4 SCC 18] : (SCC p. 26, para 14) "14. ... Section 20(1) of the Specific Relief Act, 1963 provides that 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 capable of M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 54 of 61 correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract."
9.3. Reiterating the position in K. Narendra v. Riviera Apartments (P) Ltd. [K. Narendra v. Riviera Apartments (P) Ltd., (1999) 5 SCC 77], this Court held thus : (SCC p. 91, para 29) "29. ... Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognised in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 55 of 61 nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy [Lourdu Mari David v. Louis Chinnaya Arogiaswamy, (1996) 5 SCC 589] by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court." 9.4. These principles were followed by this Court in A.C. Arulappan v. Ahalya Naik [A.C. Arulappan v. Ahalya Naik, (2001) 6 SCC 600], with the following observations : (SCC pp. 604 & 606, paras 7 & 15) "7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 56 of 61 exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff. ***
15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court. ..."
M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 57 of 61 9.5. A Bench of three Judges of this Court considered the position in Nirmala Anand v. Advent Corpn. (P) Ltd. [Nirmala Anand v. Advent Corpn. (P) Ltd., (2002) 8 SCC 146], and held thus : (SCC p. 150, para 6) "6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 58 of 61 consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen."
47. Applying the principles as aforesaid, one of the factors to be seen is that as to who is the defaulting party and the conduct of the parties as well. The Plaintiff has clearly pleaded that the NOC was required to be obtained by the Defendant which is also borne out from the terms of the agreement Ex. PW1/8. It is pleaded by the Plaintiff that the Defendant had taken a stand that the consolidation M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 59 of 61 proceedings were pending and therefore, NOC was not being granted. This pleading is also probable. The Defendant has taken the specific stand that consolidation proceedings were still pending. The Plaintiff has also proved the factum of the consolidation proceedings through witnesses PW-3 and PW-4. It is reasonable to assume that due to this reason, there was no time limit in the agreement and that is why, the sale deed was not executed soon after the payment of the entire sale consideration in the year 2012. Therefore, the Plaintiff cannot be faulted for not pressing the execution of the sale deed between the year 2012 and 2015. The Plaintiff has also pleaded that they came to know in February 2015 that the consolidation proceedings have been completed and that they approached the Defendant to execute the sale deed. This is also probable and would explain the sudden issuance of the legal notice Ex. PW1/17 by the Defendant in April of 2015. It appears that the Defendant got cold feet, perhaps, due to the increase in real estate prices and decided that he did not want to honor his commitment any more. This would also explain the cryptic wordings of the legal notice Ex. PW1/17. The Plaintiff has also lost no time in approaching the Court as the present suit was filed in May of 2015 i.e. M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 60 of 61 soon after the issuance of the legal notice Ex. PW1/17. The conduct of the Plaintiff therefore, has been unblemished whereas, on the other hand, the conduct of the Defendant has been unfair and inequitable. In fact, it is the Defendant who has defaulted upon his obligations. Little sanctity would be left in a contract if parties are allowed to nullify the same in such a willful and coarse manner. The Defendant cannot be allowed to reap the benefit of such conduct and the Plaintiff cannot be non suited when the conduct of the Plaintiff has not been found wanting in any manner.
48. Accordingly, I find that the Plaintiff has to be granted the benefit of the relief of specific performance. Issues no. (i) and (ii) are decided accordingly in favour of the Plaintiff and against the Defendant.
RELIEF
49. In view of the aforesaid discussion, the suit of the Plaintiff is decreed. The Defendant shall execute the sale deed in accordance with the terms of the Ex. PW1/8 in favour of the Plaintiff and shall perform all acts necessary for the said purpose including the act of obtaining the necessary permissions for transfer of the land. The M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas Suit No. 17138/16 Page 61 of 61 Defendant is also injuncted from creating any third party interest in the suit property till the execution of the sale deed. Costs of the suit are also awarded to the Plaintiff.
50. Decree sheet be prepared accordingly.
51. File be consigned to Record Room after due compliance. Digitally signed by DIVYANG THAKUR
DIVYANG Date:
THAKUR 2024.04.08
16:08:03
+0530
Announced in the open court (Sh. Divyang Thakur)
On 08.04.2024 ADJ-03/South West
Dwarka / New Delhi
M/s Pienne Industrial Consultants (P) Ltd. Vs. Sh. Ram Niwas