Delhi District Court
Sh. Satinder Singh vs Smt. Surjeet Kanwar on 26 August, 2019
Satinder Singh & Anr. V. Surjeet Kanwar
IN THE COURT OF SH. ARUN SUKHIJA,
ADDITIONAL DISTRICT JUDGE - 07, (CENTRAL DISTRICT)
TIS HAZARI COURTS, DELHI.
SUIT NO.: 28/2019
UNIQUE CASE ID NO.: 618834/2016
IN THE MATTER OF :
1. Sh. Satinder Singh
S/o Sh. Raghbir Singh
R/o 1, Curzon Road,
New Delhi.
2. Sh. Vinay Chhabra
S/o Shri D.R. Chhabra
R/o 1/16, East Patel Nagar,
New Delhi110008. ....Plaintiffs
VERSUS
Smt. Surjeet Kanwar
W/o Late Sh. S.S. Kanwar
R/o B12, Greater KailashI,
New Delhi110048. ....Defendant
SUIT FOR SPECIFIC PERFORMANCE OF THE CONTRACT
AND PERMANENT INJUNCTION
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Satinder Singh & Anr. V. Surjeet Kanwar
Date of institution of the Suit : 17/09/2007
Date on which Judgment was reserved : 17/07/2019
Date of Judgment : 26/08/2019
:: J U D G M E N T ::
By way of present judgment, this court shall adjudicate
upon suit for specific performance of the contract and permanent
injunction filed by the plaintiffs against the defendant.
CASE OF THE PLAINTIFFS AS PER PLAINT
Succinctly, the necessary facts for just adjudication of
the present suit, as stated in the plaint, are as under:
(a) The defendant represented to plaintiffs that the defendant is
the owner of 50% undivided share of property no. 6B/6, Old
Rajinder Nagar, New Delhi, measuring 802 sq. yds. and the
defendant was the owner of first floor portion with terrace
along with garage of the said property. The defendant agreed
to sell the same to the plaintiffs vide Agreement to Sell dated
26.9.2006 for a total consideration of Rs.1,62,50,000/, out of
which the defendant received a sum of Rs.26.00 Lacs i.e.
Rs.11.00 Lacs in cash and Rs.15.00 Lacs by cheque no.
298190, drawn on Punjab & Sind Bank, Janpath, New Delhi
from the plaintiffs.
(b) The defendant represented to the plaintiffs that the defendant
would handover the possession of entire first floor along with
terrace over it and the garage of the said property to the
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plaintiffs, but it came to the knowledge of the plaintiffs that
defendant is not in possession of the first floor portion along
with terrace over it and the garage of the said property
consisting of three bed rooms, attached bath rooms, drawing,
dining, situated at Old Rajinder Nagar, New Delhi and some
other person is in possession of the said portion of the
property which had been agreed to be sold to the plaintiffs.
(c) As per agreement dated 26.9.2006, the defendant was
required to execute all the documents in favour of the
plaintiffs and receive the balance payment from plaintiffs
before the SubRegistrar on or before 1 st January, 2007. The
plaintiffs contacted the defendant several times, but the
defendant avoided to execute the necessary documents in
favour of the plaintiffs when the plaintiffs were ready and
willing to perform their part of the contract and were ready
with the balance payment of Rs.1,36,50,000/ but the
defendant did not come forward to perform her part of the
contract and handover the possession of the property as per
Agreement dated 26th September, 2006.
(d) The defendant had assured the plaintiffs that the property in
question is free from all encumbrances of any nature,
whatsoever, but the same is occupied by some other person
and the defendant failed to handover the vacant possession
of the premises to the plaintiffs, which the defendant had
agreed to sell to the plaintiffs, as per Agreement dated
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26.9.2006. The plaintiffs served a Notice dated 4.1.2007
through their Advocate and this notice was duly served upon
the defendant. Thereafter, the defendant entered into
Memorandum of Understanding with the plaintiffs in January
2007 and the defendant sought the extension of time for the
performance of the contract and the Agreement was extended
by a period of two months. The defendant was not willing to
perform her part of the contract and therefore, the defendant
entered into another Memorandum of Understanding with the
plaintiffs dated 19.03.2007 and she sought the extension of
time to perform her part of contract by further two months
and the time was extended till 30th April, 2007. The defendant
undertook to execute the sale deed by 30th April, 2007
positively in respect of the portion which had been agreed to
be sold to the plaintiffs.
(e) The defendant has not come forward to perform her part of
the contract even after the expiry of period, as mentioned in
the Memorandum of Understanding dated 19th March, 2007
and therefore, the plaintiffs have been asking the defendant
time and again to perform her part of contract as the plaintiffs
have always been ready and willing to perform their part of
contract, have performed their part of contract and are still
ready and willing to perform the same but the defendant is
not coming forward to execute the Sale Deed in respect of the
entire first floor alongwith terrace over it and the garage of the
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property bearing no. 6B/6, Old Rajinder Nagar, New Delhi
and the plaintiffs are even ready with the balance payment.
(f) Immediately after 30th April, 2007 the plaintiffs contacted the
defendant and asked her to execute the Sale Deed in respect
of the portion which had been agreed to be purchased by the
plaintiffs but the defendant whiled away the matter and did
not come forward to register the Sale Deed in respect of the
portion, as mentioned in the Agreement to Sell dated 26 th
September, 2006. The plaintiffs even have served another
notice dated 23rd May, 2007 on the defendant asking her to
come forward and register the Sale Deed in respect of the
premises in question in favour of the plaintiffs.
(g) The defendant has now become dishonest and in a wrong and
illegal way has started threatening to sell, alienate and create
third party interest in respect of the entire first floor alongwith
terrace over it and the garage of the property bearing no.
6B/6, Old Rajinder Nagar, New Delhi and even threats are
being extended by the defendant in this regard. If the
defendant sells, alienates and creates third party interest in
respect of the entire first floor along with terrace over it and
the garage of the said property, the plaintiffs will suffer
irreparable loss and injury. There is no equally efficacious
remedy available to the plaintiffs than to file this suit for
specific performance of the contract and for injunction against
the defendant.
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CASE OF THE DEFENDANT AS PER WRITTEN STATEMENT
Summons for settlement of issues were issued to the
defendant and the defendant has filed her written statement in the
present case. Succinctly, the case of the defendant is as under:
(a) The plaintiffs have come to this Court with unclean
hands. The plaintiffs have not disclosed true and
correct facts relating to the dealings between the parties.
(b) The property no. 6B/6, Uttari Marg, Old Rajinder Nagar,
New Delhi110060 originally belonged to Late Smt.
Binder Kaur, W/o Late Sh. Nihal Singh. Smt. Binder
Kaur died on 24.12.1968, leaving behind the following
legal heirs:
(i) Late Sh. Raunaq Singh (Son)
(ii) Late Sh. S.S. Kanwar (Son).
(iii) Smt. Harbhajan Kaur (Daughter)
(iv) Smt. Harcharan Kaur (Daughter)
(c) Sh. Raunaq Singh had also died on 30.9.2002 leaving
behind the following legal heirs:
(i) Late Smt. Satwant Kaur (Wife) (Since died)
(ii) Sh. Narinder Jeet Kanwar (Son)
(iii) Sh. Onkar Singh Kanwar (Son)
(iv) Late Sh. Arvinder Pal Kanwar (Son)
(v) Smt. Rani Kapur (Daughter)
(vi) Sh. Surinder Pal Kanwar (Son)
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Legal heirs of Late Sh. S.S. Kanwar:
(i) Smt. Surjeet Kanwar (Wife)
(ii) Sh. Tejinder Pal Singh Kanwar (Son)
(iii) Sh. Jatinder Pal Singh Kanwar (Son)
(iv) Smt. Kamalpreet Chatwal (Daughter)
(v) Smt. Jasmine Bedi (Daughter)
(d) After the demise of Sh. Swaran Singh Kanwar, all his
children relinquished their share in the said property in
favour of the defendant.
(e) As regards the legal heirs of Sardar Raunaq Singh, they
continued to be the owners of the share of their father in
the property in question.
(f) The property no. 6B/6, Uttari Marg, Old Rajinder Nagar,
New Delhi110060 was originally a lease hold property
and Smt. Binder Kaur was the original lessee vide lease
agreement dated 7.2.1955 with the Delhi Improvement
Trust. However, Delhi Improvement Trust was taken
over by the Delhi Development Authority under the
Delhi Development Act, 1957 and thereafter, Delhi
Development Authority issued a Perpetual Lease on
18.04.1977 in favour of Mr. Raunaq Singh and Mr.
Swaran Singh, the sons of Mrs. Binder Kaur as Smt.
Binder Kaur had died on 24.12.1968. The said property
is a dwelling house constructed on a total area of 802.55
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square yards and it comprises of ground floor, first floor
and barsati floor alongwith annexe portion and garage.
(g) Smt. Harbhajan Kaur, one of the daughters of Smt.
Binder Kaur occupied the ground floor of the said
property after the demise of her husband in the year
1952 with the consent of her mother and other family
members. After the demise of Mrs. Binder Kaur on
24.12.1968, Mrs. Harbhajan Kaur is continuing to
occupy the ground floor and annexe portions. The
defendant had no knowledge about the title of the said
property before the demise of her husband.
(h) The defendant lives at B12, Greater Kailash PartI, New
Delhi and has never lived in the property in question.
The first floor of the property was, however, given on
rent by the defendant with the consent of other legal
heirs of Mrs. Binder Kaur. The plaintiff no.2, Mr. Vinay
Chabra is one of the brokers in Rajinder Nagar area and
was fully aware of the ownership and of the possession
of property. In September 2005, the plaintiff no.2
approached the defendant that he was in the process of
negotiating with the other coowners of the property and
that he would also like to purchase her share in the
property. Mr. Vinay Chabra, however, had no means to
buy the property and the fact that he was a broker only,
was not disclosed by him to the defendant. Believing
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the representations of the plaintiff no.2, the defendant
signed an agreement dated 11.9.2005 with the plaintiff
no.2 for a sale consideration of Rs.1,62,50,000/ for
selling her 50% undivided share in the property. The
plaintiff no.2 assured the defendant that he would be
able to strike his deal with the other coowners
including Smt. Harbhajan Kaur, who has been
occupying large portion of the property along with her
grand children. In the said agreement, it was also
stipulated that the balance payment of Rs.1,51,50,000/
would be paid by the 2nd party on or before 1.3.2006.
The agreement also stipulated that the possession of the
first floor, terrace and garage of the property would be
handed over by the defendant to Mr. Vinay Chabra only
on receipt of the full sale price. In fact, the plaintiffs are
not bonafide purchasers and they have a reputation of
property grabbers in the area of Rajinder Nagar and
Patel Nagar. It was also stipulated in the agreement
that if the balance payment is not made within the
stipulated period, the advance of Rs.11,00,000/ paid
under the agreement would stand forfeited.
(i) Mr. Vinay Chabra (plaintiff no.2), however, failed to
enter into any agreement with the other coowners of the
property and he also failed to make the balance payment
of Rs.1,51,50,000/ to the defendant on or before
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1.3.2006 and the earnest money of Rs.11,00,000/ thus
stood forfeited. The plaintiff no.2 has, in fact, concealed
the said agreement dated 11.9.2005 from this Court. In
fact, the plaintiff no.2 had no money to pay by 1.3.2006.
(j) Thereafter, the plaintiff no.2 approached the defendant
and stated that he was still keen to complete the
transaction and introduced the plaintiff no.1, who is
also a broker in the area. Both the plaintiffs pleaded
before the defendant that they would complete the deal
with the other coowners of the entire dwelling house by
1.1.2007 and would also pay her the balance amount of
Rs.1,36,50,000/. Simultaneously, with the signing of
the agreement dated 26.9.2006, the plaintiffs paid a
further sum of Rs.15,00,000/ by cheque to the
defendant. It was again stipulated in the agreement that
the possession of the property i.e. first floor with terrace
along with garage of the property would be handedover
by the defendant to the plaintiffs after receiving the
entire sale price. The plaintiffs, however, failed to pay
the balance amount by 1.1.2007 to the defendant and
the amount of earnest money of Rs.26,00,000/ stood
forfeited as per the agreement.
(k) Thereafter, on 12.1.2007, the plaintiffs signed yet
another Memorandum of Understanding (MOU) with the
defendant, extending the period of performance of the
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agreement by another period of two months. In the
MOU dated 12.1.2007, the plaintiffs had made additions
in para 1 of the agreement and the said additions are
without the knowledge of the defendant. The MOU
dated 12.1.2007 was signed to give further time to the
plaintiffs to negotiate and settle the purchase of the
shares of the other coowners of the property. The said
agreement was, in fact, totally contrary to the notice
dated 4.1.2007.
(l) Thereafter, the plaintiffs again approached the
defendant for extending the time for performance of the
agreement upto 15.4.2007. In the said agreement, it
was specifically agreed by way of a new clause that in
case, the defendant fails to perform her part of the
agreement, she would refund the amount of
Rs.26,00,000/ alongwith interest @ 24% per annum.
The said agreement/ MOU dated 19.3.2007 seems to
have been tampered with and the date has been
changed from 15.4.2007 to 30.4.2007. The said
alterations have been made in order to show that the
plaintiffs were ready and willing to perform their part of
the agreement. All these extension documents were
signed by the defendant on the representations of the
plaintiffs that the plaintiffs would be able to purchase
the shares of the other coowners of the property. The
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plaintiffs were all along aware that the defendant was
not having possession of the property even at the time of
signing of the first agreement. The plaintiffs were also
aware that the property is jointly owned by the
defendant and the legal heirs of Sardar Raunaq Singh.
It was represented by the plaintiffs that they would have
a deal with the coowners of the property and would
purchase their shares before they complete the
transaction with the defendant. The defendant was
never in a position to handover the possession of the
first floor of the property to the plaintiffs. The
possession could have been only handedover jointly by
the defendant and the legal heirs of Sardar Raunaq
Singh. One of the rooms on the first floor was in
occupation of the family of Mrs. Harbhajan Kaur, the
sisterinlaw of the defendant, who is occupying the
ground floor and other portions of the building. The
plaintiffs had also represented the defendant that they
would purchase the share of Mrs. Harbhajan Kaur also
in the property in question. Since the plaintiffs failed to
acquire the shares of the other coowners, the
agreement became incapable of performance. On
9.4.2007, the defendant received a notice from Mrs.
Harbhajan Kaur, stating therein, interalia that she is
owner of the ground floor of the property and also part
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owner of the first floor and barsati floor and that the
defendant was not entitled to sell the same to any
outsider. The said notice was received only after the
plaintiffs have failed to negotiate with the said
defendants, who were claiming ownership and part
possession of the property in question. On receipt of the
said notice dated 9.4.2007, the defendant's son gave a
copy of the said notice to the plaintiffs and requested
them to take back their earnest money as she was not in
a position to perform the agreement without the consent
of the other coowners. The property is a leasehold
property and the subdivision of the property is not
possible. Since, there has been no partition of the
property and since the sisterinlaw of the defendant is
claiming ownership and part possession of the property,
the defendant had no option but to seek cancellation of
the agreement in question, which was signed and
executed in the false representations of the plaintiffs
that they would purchase the shares of the other co
owners of the property.
(m) After receiving the copy of the notice dated 9.4.2007, the
plaintiffs did not come back to the defendant to receive
the refund of Rs.26,00,000/. The defendant is,
therefore, seeking leave of this Court to deposit the said
amount in this Court to be paid to the plaintiffs and for
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cancellation of the agreement relied upon by the
defendant.
(n) The defendant is 72 years old and taking advance of her
old age, the plaintiffs have been making her sign
documents so as to pressurize the other coowners for
selling the property to them at a throw away price. The
plaintiffs, who are property dealers by profession, were
fully aware of the ownership and possession of the
property. In order to set up a false case before this
Court, the plaintiffs issued a notice dated 4.1.2007. The
plaintiffs were fully aware that the property is a
leasehold property and the Sale Deed can only be
executed by all the coowners of the property. It was
also falsely stated that the balance payment was to be
made in front of the SubRegistrar. Plaintiffs were fully
aware about the possession of the property at the time
of signing of the agreement and handing over of the
possession was only on payment of balance amount and
the execution of Sale Deed could only be done if the
plaintiffs have succeeded in purchasing the shares of
the other coowners.
(o) As per the last document (MOU dated 19.3.2007), the
plaintiffs as agreed by them can only claim refund of
Rs.26,00,000/ with interest @ 24% per annum. The
plaintiffs are, however, not entitled to interest or any
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legal cost, and the defendant had offered to refund the
amount to the plaintiffs after she had received a notice
dated 9.4.2007 from her sisterinlaw, Mrs. Harbhajan
Kaur. The defendant is, however, ready to pay upto due
interest (without prejudice) to resolve the dispute.
(p) The suit is also bad for misjoinder of necessary parties
i.e. the other coowners of the property. The suit is
liable to be dismissed, as the plaintiffs were not ready
and willing to perform their part of agreement. The
notice dated 4.1.2007 is totally contrary to the
documents signed between the parties. In the said
notice, the plaintiffs have tried to make out a false case
to make out a cause of action for filing the present suit.
The plaintiffs also issued another notice dated
23.5.2007 to the defendant in which once again a false
case was set out by the plaintiffs. It has been falsely
stated in the notice dated 23.5.2007 that the defendant
was to execute the sale deed by 30.4.2007. It was also
wrongly stated that the balance payment was to be
made only on execution of the sale deed. Keeping in
view the said conduct of the plaintiffs, the defendant
humbly submits that no discretion can be exercised in
favour of the plaintiffs under Section 20 of the Specific
Relief Act in the present case.
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(q) In the year 200506, the value of the property in
question was much more than the price agreed between
the parties. The plaintiffs had agreed to receive less than
market value, keeping in view the fact that all the co
owners were not in agreement with one another and that
the vacant possession of the property and the execution
of the Sale Deed could be done only by all the coowners
and occupiers of the property.
(r) The plaintiffs were always aware that the defendant was
not in possession of any portion of the property. In the
notice dated 4.1.2006, the plaintiffs admit that someone
else is in possession of the first floor of the property, but
thereafter, they have relied upon MOU dated 12.1.2007
and 19.3.2007, in which, for the first time, a clause
seems to have been added about the execution of the
Sale Deed without the knowledge and consent of the
defendant. The MOU of 19.3.2007 seems to have been
tampered with by the plaintiffs.
REPLICATION AND ISSUES
The Plaintiffs have filed the Replication to the Written
Statement filed by defendant controverting the allegations/
contentions in the Written Statement of the defendant and contents
of the plaint have been reiterated and reaffirmed.
From the pleadings of the parties, following issues were
framed by Hon'ble High Court vide order dated 24/02/2009:
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ISSUES
1. Whether the plaintiffs are entitled for specific performance
of agreements to sell alleged by the plaintiff in respect of
half share of the property bearing no. 6B/6, Old Rajinder
Nagar, New Delhi? OPP
2. Whether the plaintiffs have always been ready and are
ready and willing to perform their part of agreements?
OPP
3. Whether the suit is bad for misjoinder of parties, as
alleged by the defendant? OPD
4. Whether the plaintiffs are not the bonafide purchasers of
the property, as alleged by the defendants, if so, to what
effect? OPD
5. Relief.
EVIDENCE OF THE PLAINTIFFS AND DEFENDANTS AND
DOCUMENTS RELIED UPON BY THEM:
The Plaintiffs, in order to prove their case, led plaintiffs'
evidence and got examined only one witness namely Sh. Satinder
Singh plaintiff No. 1 as PW1, who filed his evidence by way of
affidavit which was exhibited as Ex.PW1/A. PW1 in his affidavit
relied on the following documents:
1. The Agreement to Sell dated 26.9.2006 is Ex.PW1/1.
2. Notice dated 4.1.2007 is Ex.PW1/3.
3. UPC/ Registry Slip/AD card are Ex.PW1/4 (Colly.).
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4. Memorandum of Understanding dated 12.01.2007 and
19.03.2007 are Ex.PW1/5 and Ex.PW1/6 respectively.
5. Notice dated 23.5.2007 is Ex.PW1/7 and UPC/ Registry
Slip/AD card are Ex.PW1/8 (Colly.).
6. Copy of Lease Agreement dated 01.04.2005 executed by the
defendant in favour of Shri L.R. Pahwa is Ex.PW1/9.
7. Copy of the Lease Agreement dated 01.03.2006 executed by
the defendant in favour of Sh. L.R. Pahwa is Ex.PW1/10.
8. Copy of letter dated 01.03.2006 written by the defendant to
the plaintiff no.2 is Ex.PW1/11.
On the other hand, the defendant has examined only
one witness namely Sh. Tejinder Pal Singh Kanwar as DW1, who
filed his affidavit which was exhibited as Ex.DW1/A. Defendant has
relied upon only one document i.e. Discharge Summary, which was
exhibited as Ex.DW1/1.
This Court heard final arguments, as advanced by
Ld. counsels for the parties. I have perused the material available
on record.
ISSUE WISE FINDINGS
ISSUE NO.3
3. Whether the suit is bad for misjoinder of parties, as alleged by
the defendant? OPD
FINDINGS AND CONCLUSIONS OF THE COURT
The Ld. Counsel for the Plaintiffs has argued and filed
his written submissions and the arguments of the Plaintiffs are:
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The onus of proving this issue was on defendant
and defendant has failed to show in his evidence
as how the present suit is bad for misjoinder of
the parties and how the other co- owner of the
property were the necessary parties. No cross
examination has been conducted by the counsel
for the defendant on this issue and more over the
evidence given by the defendant cannot be relied
upon as the witness DW1 appeared was neither
the party to the agreements nor he was the
witnesses to those agreements. He even has not
appeared as the attorney of the defendant. For the
sake of argument DW1 in his cross examination
conducted on 20.09.2017 has admitted that "I and
my mother has cordial relationship with Sh.
Raunaq Singh and his legal heirs". Sh. Raunaq
Sigh was the other co owner of the property and
DW1 further stated that " I have not written any
letter to verify from the other co owners of the suit
property about the negotiations regarding the sale
of their share in the suit property". This clearly
shows that entire story of purchase of remaining
portion of the property by the plaintiffs has been
cooked up by the defendant. More over the present
suit is with regard to the 50% share of Surjeet
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Kaur. Sh Ranunaq Singh or his legal heirs has
nothing to do with the same, there is no privities of
contract between the plaintiffs and Sh. Raunaq
Singh or his legal Heirs. Therefore, defendant has
fail to prove this issue, therefore the present issue
be decided in favour of plaintiffs and against the
defendants.
There is substance in the argument of the Plaintiffs that
the suit is not bad for nonjoinder of necessary parties as
admittedly the agreement was arrived between the parties i.e. the
Plaintiffs and defendant and not the other coowners of the suit
property. Accordingly, the issue No.3 is decided in favour of the
Plaintiffs and against the defendant.
ISSUES NO.1, 2 AND 4
1. Whether the plaintiffs are entitled for specific performance
of agreement to sell alleged by the plaintiff in respect of
half share of the property bearing no. 6B/6, Old Rajinder
Nagar, New Delhi? OPP
2. Whether the plaintiffs have always been ready and are
ready and willing to perform their part of agreement? OPP
4. Whether the plaintiffs are not the bonafide purchaser of
the property, as alleged by the defendants, if so, to what
effect? OPD
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The aforesaid issues no. 1, 2 and 4 are interrelated and
interconnected to each other and accordingly, they are decided
together.
ARGUMENTS OF THE PLAINTIFFS
ON ISSUE NO.1
The onus of proving this issue was on the plaintiffs. The
plaintiffs have categorically stated in the plaintiffs that an
Agreement to Sell dated 26.09.2006 was executed between the
plaintiffs and the defendant for the purchase of 50% undivided
share in property bearing no.6B/6, Old Rajinder Nagar, New Delhi
for the consideration of Rs. 1,62,50,000/. The said agreement to
sell dated 26.09.2006 was exhibited as PW1/1 in his affidavit. The
factum of execution of the above mention agreement to sell dated
26.09.2006 was never been denied by the defendants in their
written statement, rather it was categorically admitted by the
defendant in para 1 (L) of the written statement that
"Simultaneously with the signing of the agreement to sell Dt.
26.09.2006 the plaintiffs further paid sum of Rs. 15,00,000/ by
cheque to the defendant". Even Dw1 who has appeared on behalf of
the defendant has admitted the signature of her mother on
Agreement dated 26.09.2006. Hence the execution of the Agreement
to sell has not been disputed by both the parties, hence the
agreement to sell dated 26.09.2006 stands proved.
The plaintiffs have further relied on the MOU dated
12.01.2007 which has been exhibited as PW1/5 in his affidavit and
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stated that after the receipt of the Notice dated 04.01.2007 the
defendant entered into a MOU with the plaintiffs and the defendant
sought the extension of time for the performance of the contract.
The defendant in para 1 (M) of the written statement has admitted
the execution of the said MOU dated 12.01.2007 but alleged that
there is some additions in para 1 of the MOU and further stated
that it was the plaintiffs, who sought time from the defendant and
the MOU dated 12.01.2007 was executed. The bare reading of para
2 of the said MOU demolishes the defence of the defendant that it
was plaintiffs who sought time from the defendant, the para 2 of the
MOU "Now the first party has approached the second party and has
expressed her inability to perform her part of contract by executing
sale deed within stipulated and has requested the second party for
extension of period of 2 months". This clearly shows that it was the
defendant who failed to perform her part of contract and has asked
for the extension of the time. The defendant has never disputed the
execution of the said document rather alleged that plaintiffs have
made certain additions in para 1 of the MOU, but defendant has
never disputed the para 2 of the MOU which clearly shows that
defendant has himself relied on the said MOU dated 12.01.2007.
The onus of proving the alleged additions made by the plaintiffs
were on the defendant but defendant failed to prove it. DW1
appeared on behalf of the defendant has also failed to tell about the
additions made in the said MOU and further has admitted the
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signature of her mother on the said MOU. Hence the said document
is not required to be proved being admitted.
The defendant again entered into another MOU dated
19.03.2007 and sort time to perform her part of the contract by
further two months. The defendant in her written statement 1 (N)
further admits the execution of the MOU dated 19.03.2007, but
alleged that the alterations has been made by the plaintiffs in the
said MOU as the date has been changed from 15.04.2007 to
30.04.2007. The defendant further alleged that the alteration has
been made to show that plaintiffs have always been ready and
willing to perform their part of the agreement. The bare reading of
para 2 of the said MOU demolishes the defence of the defendant
that it was plaintiffs who sought time from the defendant, the para
2 of the MOU on "And due to the non compliance on the part of the
first party, the agreement dated 26.09.2006 could not be
materialized and the second party had to issue a legal notice Dt.
04.01.2007 on the first party and thereafter on the request of the
first party both the parties entered into a MOU on January 2007
whereby time was extended for 2 months which too has expired but
the deal has not been materialized due to the negligence and
inability of the first party to perform her party of the obligation and
first party has again approached and requested the second party to
further extend the period upto 30.04.2007 for performance of her
obligation as per the agreement dated 26.09.2006. This clearly
shows that it was the defendant who failed to perform her part of
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contract and has asked for the extension of the time. The defendant
has never disputed the execution of the said document rather only
alleged that plaintiffs have made certain alteration in the MOU, but
defendant has never disputed the para 2 of the MOU which clearly
shows that defendant has himself relied on the said MOU dated
19.03.2007 and hence the said document is not required to be
proved being admitted. The onus of proving the alleged alterations
made by the plaintiffs were on the defendant but defendant failed to
prove it either in his evidence or in cross examination conducted on
the plaintiffs. DW1 appeared on behalf of the defendant has also
failed to tell anything about the alterations made in the said MOU
and further has admitted the signature of her mother on the said
MOU. Hence the said document is not required to be proved being
admitted.
No material cross examination has been conducted by
the defendant on issue no. 1 except one suggestion given by the
counsel for the defendant in the cross examination conducted on
12.01.2017 "It is incorrect to suggest that Agreement to sell Ex.
PW1/1 was executed by misrepresentation". It is pertinent to
mention herein that the suggestion given by the counsel the
defendant was beyond his pleadings and it has never been the case
of the defendant that the agreement to sell dated 26.09.2006 was
executed by misrepresentation. More over the evidence given by the
defendant cannot be relied upon as the witness DW1 who appeared,
was neither the party to those agreements nor he was the witnesses
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to those agreements. He even has not appeared as the attorney of
the defendant. The evidence given by DW1 cannot be relied upon on
the reason stated above. From the above arguments, plaintiffs have
able to establish that "plaintiffs are entitled for specific performance
of the agreement to sell ". Therefore it is prayed that the issue no. 1
be decided in favour of plaintiffs and against the defendant.
ON ISSUE NO.2
The onus of proving this issue was on plaintiffs and this
issue has been proved by the plaintiffs beyond the reasonable
doubt. The PW1 in his affidavit has Exhibited Notice Dt.
04.01.2007 as PW1/3, wherein the PW1 has categorically
submitted in para 3 that "My clients are ready and willing to
perform their part of the agreement and are ready with the balance
Payment of Rs. 1,36,50,000 but you did not come forward to
perform your part of agreement...." and PW1 has also exhibited its
postal receipt, UPC, AD card as PW1/ 4 Colly. The Defendant in
para 5 reply on merits of written statement has not disputed the
service of notice dated 04.01.2007 upon the defendant, clearly
shows that notice was duly served upon the defendant and
plaintiffs were always willing to perform their part of the contract.
Moreover, the MOU dated 19.03.2007 and its contents has also
been admitted by the defendant whereby in para 4 it has been
categorically stated that "..the second party has already made
arrangement for the balance amount of the sale consideration".
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No material cross examination has been conducted by
the counsel for the defendant on this issue and more over the
evidence given by the defendant cannot be relied upon as the
witness DW1 appeared was neither the party to those agreements
nor he was the witnesses to those agreements. He even has not
appeared as the attorney of the defendant. After proving the above
documents relied by the plaintiffs the burden shifts upon the
defendant which defendant has failed to prove. From the above
arguments, plaintiffs have able to establish that plaintiffs were
having sufficient funds and was always read to complete the terms
of the agreement but it was the defendant who has always sort time
and on the saying of the defendant the MOU were executed. This
clearly shows that "plaintiffs were always ready and willing to
perform their part of the agreement". Therefore it is prayed that
issue no 2 be decided in favour of plaintiffs and against the
defendant.
ON ISSUE NO.4
The onus of proving this issue was on the defendants
and defendant has not lead any evidence on this issue neither any
material cross examination has been conducted by the counsel for
the defendant on this issue. The entire allegation of that plaintiff
No. 2 Mr. Vinay Chabra is one of the broker and was fully aware of
the ownership and of the possession of the property. In September
2005 the Plaintiff no. 2 approached the defendant that he was in
the process of negotiating with the other coowners of the property
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and he would also like to purchase her share in the property and
believing the representation of the plaintiff no. 2, the defendant
signed an agreement dated 11.09.2005 with plaintiff no. 2 for the
sale consideration of Rs. 1,62,50,000/ for selling her 50%
undivided share in the property. It was further alleged that the
Plaintiff no. 2 assured the defendant that he would be able to strike
the deal with the other co owners including Harbhjan Kaur, who
has been occupying the larger portion of the property. It was further
alleged by the defendant that in the said agreement, it was also
stipulated that the balance payment of Rs. 1,51,50,000/would be
paid by the second party on or before 01.03.2006. It was further
alleged that it was also stipulated in the agreement that if the
balance payment in not made within the stipulated period, the
advance of Rs. 11,00,000/ paid under the agreement would stand
forfeited. It was further alleged by the defendant that plaintiff no. 2
however failed to enter into any agreement with the other co owners
of the property and he also failed to make the balance payment of
Rs. 1,51,00,000/ to the defendants on or before 01.03.2006 and
the earnest money of Rs. 11,00,000/ thus stand forfeited.
The onus of proving the allegations were on the
defendant and it was the defendant who was required to show that
prior to the agreement dated 26.09.2006 another agreement was
also executed between the plaintiff no. 2 and the defendant. But
defendant has failed to produce the alleged agreement dated
11.09.2005. The defendant even failed to prove the allegation that
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plaintiff no. 2 has agreed to strike the deal with the other co owners
including Harbhjan Kaur which he failed to do so. The defendant
herself has not appeared in the witness box more over defendant
has failed to produce any witness which would have prove the case
of the defendant beyond the reasonable doubt. Therefore defendant
has fail to prove this issue, therefore the present issue be decided in
favour of plaintiffs and against the defendants.
ARGUMENTS OF THE DEFENDANT
ON ISSUE NO.2
It is submitted on behalf of the Defendant that Plaintiffs
have miserably failed to prove this issue. Except for bare averment
in the plaint as well as in the Affidavit of Evidence, the Plaintiffs
were always ready and willing to perform their part of the contract,
there is no averment that Plaintiffs had sufficient funds at the time
of execution of the contract and on the date of the breach and
during the pendency of the case and till today. The Affidavit of
Evidence as filed has simply repeated in paragraph 11 the
averments of the plaint. No documents to show that Plaintiffs had
funds on the date of the breach, during the pendency or today have
been produced or proved or placed on the record. The Plaintiffs
have also not given any documents to show that Plaintiffs were
willing to perform his part of the contract. There is no proof that
demand draft having been prepared, draft of the sale deed ever
executed, have been produced by the Plaintiffs. The law requires
that Plaintiffs have to be ready and willing all throughout i.e. as on
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the date of the Agreement, on the date of breach and even during
the pendency of the case. The Defendant relies upon the following
Judgments of the Hon'ble Apex Court and Hon'ble High Court:
i) Ved Prakash Kharbanda Vs. Vimal Bindra reported as
198 (2013) Delhi Law Times 555. Relevant pages are 615
and 617. The Hon'ble High Curt has held that readiness and
willingness are two separate issues. The former refers to
financial capacity whereas the later depends upon intentions
of the purchaser. The readiness and willingness of the
plaintiffs have to be determined from the entirety of facts and
circumstances relevant to the intention and conduct of the
party concerned. It has been further held that readiness and
willingness of the party has to be throughout the period before
the completion of the sale transaction and normal parlance
both the parties are bound to remain in touch with each other
prior to the execution of the sale deed. It has been further
held that relief of specific performance is discretionary relief
and not be granted if readiness and willingness is not proved.
ii) 2015 III AD 607 titled as Fine Properties (P) Ltd. (M/S) Vs.
Vishnu Bhatnagar. Relevant paragraph 14. Held - It is
settled law that the discretion has to be exercised on the basis
of the conduct of the Plaintiffs and the Plaintiffs have failed to
show readiness and willingness to perform their part of the
contract. Reference may also be seen to the Judgments of the
Hon'ble Apex Court as relied upon by the Hon'ble Court.
Suit No. 28/2019 Page 29 of 59
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iii) Laxmi Devi Vs. Shri Mahavir Singh - RFA No.556/2011.
Relevant paragraphs 9 and 11. Relevant paragraphs 9
and 11. The Hon'ble Court held that no bank account
statement was filed, no income tax return was filed, no details
of any property given by which Respondent plaintiff has to pay
the balance consideration. Therefore, held that Plaintiffs were not ready and willing to perform his part of the contract.
iv) 228 (2016) DLT 10 titled as Shree Aadhiya Build Well Pvt. Ltd. Vs. Kartar Singh & Others. Relevant paragraphs 9, 12, 14 and 19. Held - Plaintiff failed to prove his readiness and willingness to perform his part of the Agreement or his financial capacity to pay. Held - Specific performance cannot be granted.
v) 1 (2018) SLT 746. Relevant paragraph 17. Held that Defendants are not bonafide purchasers and lack of readiness and willingness which is a basic condition for grant of specific performance, the suit ought to be dismissed at the threshold.
vi) 244 (2017) DLT Page 423. Relevant paragraph 5. Held -
onus to prove that Plaintiff was always ready and willing is on the Plaintiff and such readiness and willingness has to prove all throughout and having funds in one year does not mean that readiness and willingness has been proved.
vii) 2017 V.11 AD (Delhi) page 9 Suit No. 28/2019 Page 30 of 59 Satinder Singh & Anr. V. Surjeet Kanwar
viii) 2011 I X AD (Delhi) page 66 (Para 17)
ix) 2018(3) AD Delhi Page 366 titled as Ashok Nanda Vs. Mohinder Kunar by Hon'ble Mr. Justice Valmiki Mehta, Relevant Paragraphs 6 and 7. Held - Self serving averment of financial capacity cannot be held to be discharge of onus of proving readiness and willingness and the Plaintiff failed to prove his readiness and willingness which is sine qua non as per Sec. 16(c), court is justified in dismissing the suit.
x) 250 (2018) DLT Page 1 Gulshan Kumar Vs. Shyam Lal by Hon'ble Mr. Justice Valmiki Mehta. Held - The Plaintiff filed no documentary evidence with respect to having any properties, movable or immovable. The Plaintiff failed to prove the readiness and willingness. Suit dismissed.
xi) Vol. 5 (2018) SLT Page 502 titled as P. Meenakshisundaram Vs. P. Vijayakumar & Anr. Relevant paragraph 8. Held - In a suit for specific performance law is very clear and Plaintiff must lead and prove his readiness to perform his part of the contract right from the date of the contract till the date of hearing of the suit.
From the evidence produced and the law cited, it is clear that there is no document produced by the Plaintiffs on proving their financial capacity. The Plaintiffs herein filed an application for permission of the Hon'ble Court to place additional documents and lead additional evidence but by and Suit No. 28/2019 Page 31 of 59 Satinder Singh & Anr. V. Surjeet Kanwar order passed by Sh. Amit Kumar, ADJ, Ld. Predecessor this Hon'ble Court, the said application was rejected without notice to the Defendant and no Appeal or Revision was preferred by the Plaintiffs. Therefore, it is clear that there is no document on the record to show the financial capacity. Therefore, the readiness and willingness to pay has not been proved at all. Issue No.2, therefore, stands proved against the Plaintiffs and as per Judgment of the Hon'ble Supreme Court, the suit is liable to be dismissed on this ground itself.
ON ISSUES NO.1 AND 4The Plaintiffs have sought decree of specific performance without referring to the details of the Agreement to Sell. From the averments made in the plaint and the written statement, the first agreement was executed with the Plaintiff No.2 on 26.09.2006 when part payment was paid. The Plaintiff No.2 did not carry out his obligations and therefore, the said agreement was cancelled and the amounts given in advance forfeited. The Plaintiff No.2 executed an MOU on 19.03.2007 that only related to extension of time. Name of the Plaintiff No.1 was added in the last agreement. It is submitted that Plaintiffs have no right to seek performance of the Agreement to Sell. The Plaintiffs are not bonafide purchasers. They are professional and builders which has been established from the cross examination of PW1. PW1 in his cross examination has admitted about other suit for performance filed by the Plaintiffs.
Suit No. 28/2019 Page 32 of 59Satinder Singh & Anr. V. Surjeet Kanwar The discretionary relief cannot be passed in favour of the Plaintiffs as they are not bonafide purchasers.
(i) The Defendant relies the judgment reported as Vol.2 (2015) SLT Page 173 where the Hon'ble Supreme Court held that "specific performance is discretionary yet the court is not bound to grant such relief as the Respondent will suffer significant hardship. From the evidence and the averments it is clear that neither the Defendant is in possession nor is owner of the entire property. It is a lease hold property and Plaintiffs have never been ready and willing to resolve the issues with the other owners. The Plaintiffs have deliberately delayed and therefore, the Plaintiffs are not entitled to the specific performance.
(ii) The Defendant further relies upon the judgment reported as 2017 (7) AD Page 9. Relevant paragraph 10 where the Hon'ble High Court held "there could not take place any Agreement to Sell by cosharer of specific portion of land especially without identification of specific area and the plot when there no partition has taken place". Applying the said principles, it is submitted that even in the present case, no specific portion has been identified nor specific portion is in possession of the Defendant.
(iii) Defendant further lies upon the judgment reported as 231 (2016) DLT Page 414. Relevant paragraph 11 where the Hon'ble High Court observed that "in addition to holding that Suit No. 28/2019 Page 33 of 59 Satinder Singh & Anr. V. Surjeet Kanwar in urban areas, the time for performance should not be ignored and merely because suit for specific performance is filed within in limitation that would not mean that suit for specific performance has necessarily to be decreed".
(iv) 257 (2019) DLT Page 197 titled as Rajender Kumar Vs. Rama Bala Gupta by Hon'ble Justice Valmiki Mehta. Held
- The Plaintiff has only paid approximate about 17% of the total sale consideration as advance. Discretionary Relief of specific performance cannot be granted in such a case.
(v) 254(2018) DLT Page 188 Jitender Kumar Vs. Vijender Kumar by Hon'ble Justice Valmiki Mehta. It was held that in specific performance of Agreement to Sell - discretionary relief - failure to prove financial capacity or readiness to go ahead with subject agreement to sell - Payment of nominal consideration of 5%, 10% or 20% will not entitle grant of a discretionary relief of specific performance, out of total sale consideration.
FINDINGS AND CONCLUSIONS OF THE COURT The entire controversy which boils down in the present case is whether the Plaintiffs have been able to aver and prove the readiness and willingness in true sense and spirit as per the object of Section 16(1)(c) of the Specific Relief Act,1963. The Ld. Counsel for the defendant has relied upon the Judgment of our Hon'ble High Court passed in Ved Prakash Kharbanda Vs. Vimal Bindra reported as 198 (2013) Delhi Law Times 555 and our Suit No. 28/2019 Page 34 of 59 Satinder Singh & Anr. V. Surjeet Kanwar Hon'ble High Court has vividly explained the entire principles which are required to be dealt up while deciding the Suit for Specific Performance. The paras No. 19.2 to 19.14.3 and 20.1 to 20.9.10 of the said Judgment are reproduce hereinbelow for apposite understanding: 19.2 The "readiness" and "willingness" are two separate issues. The former depends on the availability of requisite funds whereas the latter depends on the intention of the purchaser.
19.3 The "readiness" has to be proved by the purchaser by leading evidence relating to the availability of the funds whereas the intention has to be inferred from the various circumstances on record.
19.4 If there is no availability of funds with the purchaser, he can be nonsuited on the ground of nonreadiness alone.
19.5 If the plaintiff is able to prove the availability of the balance sale consideration with him at the time fixed for performance in the agreement, it is an indication of his readiness but his willingness/intention to perform cannot be inferred from readiness alone.
19.6 When the parties enter into an agreement relating to an immovable property, they amicably agree on the sale consideration, earnest money as well as the payment of the balance sale consideration. If both the parties are ready and willing, they usually complete the transaction within the stipulated time in the following manner: Suit No. 28/2019 Page 35 of 59 Satinder Singh & Anr. V. Surjeet Kanwar 19.6.1 The purchaser makes arrangement for the balance sale consideration within the stipulated time.
19.6.2 The purchaser informs the seller about the arrangement having been made.
19.6.3 The purchaser drafts the sale deed and sends the draft sale deed to the seller for approval.
19.6.4 The seller approves the draft sale deed and returns it back to the purchaser.
19.6.5 The purchaser purchases the requisite stamp duty for the sale deed.
19.6.6 The purchaser prepares the sale deed on the requisite stamp papers.
19.6.7 Both the parties fix the date, time and place for payment of balance sale consideration, execution of sale deed, registration of the sale deed and handing over of the possession.
19.6.8 The parties complete the sale transaction on the agreed date, time and place.
19.6.9 In normal parlance, both the parties remain in touch either personally or through the property dealer.
19.7 The problem arises when one of the two parties turn dishonest. However, the party in Suit No. 28/2019 Page 36 of 59 Satinder Singh & Anr. V. Surjeet Kanwar breach purports to be ready and willing and creates evidence to that effect. At times, both the parties visit the office of SubRegistrar on the last day of performance for obtaining a receipt of having attended the office of the SubRegistrar to later on contend that they were ready and willing to perform and were waiting for other party. If the seller is in breach, he creates false evidence of readiness to avoid specific performance by the purchaser and to illegally forfeit the earnest money. On the other hand, if the purchaser is in breach, he creates false evidence of readiness and willingness to file a case of specific performance.
19.8 It is the duty of the Court to find out which party has not performed and is trying to wriggle out.
19.9 The Court has to take into consideration the human probabilities, ordinary course of human conduct and common sense to draw necessary inference. Drawing presumptions is the backbone of the judicial process.
19.10 The silence or absence of correspondence by any party may be indicative of his dishonest intention. The dishonest intention of the seller can be inferred where the purchaser repeatedly contacts the seller for providing copies of the title documents or approval of the draft sale deed or fixing time for payment of balance sale consideration or execution/ registration of the sale deed but the seller does not respond or avoids contact. On the other hand, the dishonest intention of the purchaser can be inferred where the purchaser does not contact the seller for approval of the sale deed and fixing date, time and place for Suit No. 28/2019 Page 37 of 59 Satinder Singh & Anr. V. Surjeet Kanwar payment of balance sale consideration and execution/registration of the sale deed and unilaterally visits the office of the SubRegistrar to prepare a false ground that he was ready and willing to complete the sale. By the time the suit is finally decreed, the purchaser would get the property at the price fixed in the agreement although the prices would have increased manifold. The Court has to minutely examine the conduct of the parties in order to ascertain the truth. The purchaser would not be entitled to a decree merely because he had the sale consideration with him and had visited the office of the SubRegistrar before the time fixed in the agreement.
19.11 Upon refusal of the seller to complete the sale in terms of the agreement, the purchaser is expected to issue a notice to place on record the refusal on the part of the seller to furnish copies of the documents or giving a response to the draft sale deed or fixing the schedule for execution and registration of sale deed. The purchaser can also notify the date and time for visiting the office of the SubRegistrar along with the proof of the balance sale consideration to the seller. The purchaser is also expected to immediately file a suit for specific performance. Any delay in this regard may indicate his intention that he was not ready and willing and the Court may refuse to grant specific performance.
19.12 In a rising market, the purchaser makes a profit by the delay. He may tie down a seller by creating false excuses and use the money for buying some other property. If the purchaser is in a property trade, he may tie down several properties and then decide on which one he can make more profit on. These factors have to be taken into Suit No. 28/2019 Page 38 of 59 Satinder Singh & Anr. V. Surjeet Kanwar consideration by the Court for deciding the "readiness" and "willingness".
19.13 Once a seller has entered into an agreement to sell an immovable property, he is looking for the sale consideration within the period stipulated in the agreement. If he does not get the money within the stipulated period, his plan to use the money for whatever purpose he has intended would get frustrated. He may have a plan to buy some other property or for some other purpose. Secondly, the delay in completion of sale also causes injustice to the seller as the property prices keep on increasing in normal parlance. As such more the delay, the seller may suffer loss due to rise in property price and greater is the profit which the purchaser would derive by tying down a property and not paying the sale consideration within the stipulated period.
19.14 The relevant judgments relating to Section 16(c) of the Specific Relief Act, 1963 are as under: 19.14.1 In J.P. Builders v. A. Ramadas Rao, (2011) 1 SCC 429, the Supreme Court explained the distinction between "readiness" and "willingness". The former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance.
19.14.2 In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115, the Supreme Court held that the Court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances to adjudge the "readiness" and "willingness" of Suit No. 28/2019 Page 39 of 59 Satinder Singh & Anr. V. Surjeet Kanwar the plaintiff. The amount of balance sale consideration must be proved to be available with the purchaser right from the date of execution till the date of decree. The Court upheld the dismissal of the suit for specific performance on various grounds inter alia that the plaintiff was dabbing in real estate business without means to purchase the suit property and the very contract was speculative in nature.
"19.14.3 In R.C. Chandiok v. Chuni Lal Sabharwal, (1970) 3 SCC 140, the Supreme Court held that "readiness" and "willingness"
cannot be treated as a straitjacket formula. It has to be determined from the entirety of facts and circumstances relevant to the intention and conduct of the party concerned.
20.1 The specific performance is an equitable relief. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion. The Court is not bound to grant specific relief merely because it is lawful to do so. The relief sought under Section 20 is not automatic as the Court is required to see the totality of the circumstances which are to be assessed by the Court in the light of facts and circumstances of each case.
20.2 The specific performance is usually granted where substantial sale consideration has been paid and the possession of the property has been delivered to the purchaser.
20.3 In the event of any delay/inaction on the part of the purchaser, it would be inequitable to give the Suit No. 28/2019 Page 40 of 59 Satinder Singh & Anr. V. Surjeet Kanwar relief of specific performance to the purchaser. The rationale behind refusal of the Court to grant the specific performance where long time has gone by is that the prices of the property may have increased many times with the passage of time and it would be injustice to a person who has not received the sale consideration within the time stipulated in the agreement.
20.4 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.
20.5 If the sale consideration fixed under the agreement is given to the seller years after the agreement, great prejudice may be caused to a seller who may have intended to purchase another property with the sale consideration.
20.6 While a purchaser cannot be made to suffer because of Court delays, one cannot lose sight of the fact that he retained the sale consideration with him and the seller could not use the money when he wanted. The Court also has to consider that whereas the value of the property may have risen manifold with the passage of time, the value of the sale consideration would have reduced due to inflation. These factors have to be taken into consideration by the Court.
Suit No. 28/2019 Page 41 of 59Satinder Singh & Anr. V. Surjeet Kanwar 20.7 The party who seeks specific performance being an equitable relief, must come to the Court with clean hands. In other words, the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief.
20.8 While exercising the discretion, the Court would take into consideration the circumstances of the case, the conduct of parties, and the motive behind the litigation.
20.9 The relevant judgments relating to Section 20 of the Specific Relief Act, 1963 are as under: 20.9.1 In K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1, the Supreme Court held that in case of delay/inaction on the part of the plaintiff for two and a half years, it would be inequitable to give a relief of specific performance to the plaintiff. The finding of the Supreme Court is reproduced hereunder: "13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2 ½ years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices - according to the defendants, three times - between the date of agreement and the date of suit notice.
The delay has brought about a situation where it would be Suit No. 28/2019 Page 42 of 59 Satinder Singh & Anr. V. Surjeet Kanwar inequitable to give the relief of specific performance to the plaintiff."
(Emphasis supplied) 20.9.2 In S aradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18, the Hon'ble Supreme Court declined to grant the discretionary relief of specific performance to the purchaser who had made payment of nominal advance to the seller. The finding of the Supreme Court is reproduced hereunder: "36....The third quarter of the twentieth century saw a very slow but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the twentieth century. There has been a galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are no longer stable or steady. We can take judicial notice of the comparative purchase power of a rupee in the year 1975 and now, as also the steep increase in the value of the immovable properties between then and now. It is no exaggeration to say that properties in cities, worth a lakh or so in or about 1975 to 1980, may cost a crore or more now.
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 Suit No. 28/2019 Page 43 of 59 Satinder Singh & Anr. V. Surjeet Kanwar 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 non performance. 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 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 Suit No. 28/2019 Page 44 of 59 Satinder Singh & Anr. V. Surjeet Kanwar 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.
xxx xxx xxx
43. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam [(1997) 3 SCC 1]:
(i) The courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored.
(ii) The courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract.
(iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the timelimits stipulated in the agreement. The courts will also "frown" upon suits which are not filed Suit No. 28/2019 Page 45 of 59 Satinder Singh & Anr. V. Surjeet Kanwar immediately after the breach/refusal. The fact that limitation is three years does not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The threeyear period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser."
(Emphasis supplied) 20.9.3 In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son, 1987 Supp SCC 340, the Supreme Court held that 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.
20.9.4 In Lourdu Mari David v. Louis Chinnaya Arogiaswamy, (1996) 5 SCC 589, the Supreme Court held that the party who seeks to avail of the equitable jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. In other words the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief.
Suit No. 28/2019 Page 46 of 59Satinder Singh & Anr. V. Surjeet Kanwar 20.9.5 In K. Narendra v. Riviera Apartments (P) Ltd., (1999) 5 SCC 77, the Supreme Court held that the performance of the contract involving some hardship on the defendant which he did not foresee while nonperformance 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. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant.
20.9.6 In A.C. Arulappan v. Ahalya Naik (smt), (2001) 6 SCC 600, the Supreme Court held that 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. 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.
20.9.7 In Bal Krishna v. Bhagwan Das, (2008) 12 SCC 145, the Supreme Court held that while exercising the discretion, the Court would take into consideration the circumstances of the case, the conduct of parties, and their respective interests under Suit No. 28/2019 Page 47 of 59 Satinder Singh & Anr. V. Surjeet Kanwar the contract. No specific performance of a contract, though it is not vitiated by fraud or misrepresentation, can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee.
20.9.8 In G. Jayashree v. Bhagwandas S. Patel, (2009) 3 SCC 141, the Supreme Court held that the plaintiff is expected to approach the Court with clean hands. His conduct plays an important role in the matter of exercise of discretionary jurisdiction by a Court of law. The Courts ordinarily would not grant any relief in favour of the person who approaches the Court with a pair of dirty hands.
20.9.9 In Krishna Sweet House v. Gurbhej Singh, MANU/DE/2851/2012, this Court held that in certain cases where substantial consideration i.e. at least 50% of the consideration is paid, or possession of the property is delivered under the agreement to sell in addition to paying advance price, the proposed buyer is vigilant for his rights and he files the suit soon after entering into the agreement to sell, then in accordance with totality of facts and circumstances, Courts may decree specific performance.
20.9.10 In Laxmi Devi v. Mahavir Singh, MANU/DE/1930/2012, this Court held that unless substantial consideration is paid out of the total amount of sale consideration, the Courts would lean against granting the Suit No. 28/2019 Page 48 of 59 Satinder Singh & Anr. V. Surjeet Kanwar specific performance inasmuch as by the loss of time, the balance sale consideration which is granted at a much later date, is not sufficient to enable the proposed seller to buy an equivalent property which could have been bought from the balance sale consideration if the same was paid on the due date."
The Hon'ble Supreme Court recently in paras No.10 and 11 in the case title Kamal Kumar VERSUS Premlata Joshi & Ors. (CIVIL APPEAL No. 4453 OF 2009) decided on 7.1.2019 had reiterated and laid down the guidelines for dealing the cases of specific performance of contract and the same are reproduced herein for apt understanding: "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 the parties for sale/purchase of the suit property; Second, whether the plaintiff 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 plaintiff has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed and 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 plaintiff 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 Suit No. 28/2019 Page 49 of 59 Satinder Singh & Anr. V. Surjeet Kanwar relief is eventually granted to the plaintiff; and lastly, whether the plaintiff is entitled for grant of any other alternative relief, namely, refund of earnest money etc. and, if so, on what grounds.
"11. In our opinion, the aforementioned questions are part of the statutory requirements (See Sections 16 (c), 20, 21, 22, 23 of the Specific Relief Act, 1963 and the forms 47/48 of Appendix A to C of the Code of Civil Procedure). These requirements have to be properly pleaded by the parties in their respective pleadings and proved with the aid of evidence in accordance with law. It is only then the Court is entitled to exercise its discretion and accordingly grant or refuse the relief of specific performance depending upon the case made out by the parties on facts."
The defendant has cited various Judgments and the crux of the said Judgments is that readiness i.e. financial capacity is required to be proved by the Plaintiffs throughout i.e. not only at the time of execution of the Agreement/making of the payment in terms of the agreement to sell but also throughout the pendency of the case and atleast till the conclusion of the evidence of the Plaintiffs as thereafter, the plaintiffs will not get the opportunity to prove the financial capacity.
Even assuming the entire case of the Plaintiffs that they have been able to prove the entire documents of Agreement and MOU's and the same are valid in the eyes of law, the question arises whether the Plaintiffs are able to prove that they were/are having the financial capacity to pay admittedly the huge amount of Suit No. 28/2019 Page 50 of 59 Satinder Singh & Anr. V. Surjeet Kanwar Rs.1,36,50,000/. In the light of the aforesaid Judgment and Judgments relied upon by the defendant, can the selfserving affidavit of PW1 will be suffice to prove that the Plaintiffs have been able to prove that they were/are having the financial capacity to pay the said amount. Dehors the Agreement and MOU's, the perusal of the record reveals that the Plaintiffs have not produced even a single documentary evidence to reflect that whether the Plaintiffs were possessed with the requisite balance amount of Rs.1,36,50,000/ even on the last date of payment i.e. 30.04.2007. Although, in terms of the Agreement and MOU's, time was extended on behalf of the defendant but the Plaintiffs are atleast required to show by cogent, convincing and authentic documentary evidence that the Plaintiffs were having the readiness i.e. financial capacity to honour the said Agreement and MOU's. The PW1 except relying upon the selfserving statement by way of affidavit has not produced even a single document regarding their possession of the requisite amount for completion of the transaction at that time or even during the pendency of the present case. It is well settled law by way of catena of Judgments and also as per the mandate of Section 16 of the Specific Relief Act,1963, the Plaintiffs are not only require to aver but they have also to prove that the Plaintiffs were/ are always ready and willing to perform their part of the contract. There is averment in the MOU dated 19.03.2007 that the Second party has already made arrangement for the balance amount of sale consideration but the said averment is mere averment and there is Suit No. 28/2019 Page 51 of 59 Satinder Singh & Anr. V. Surjeet Kanwar no iota or scintilla of evidence produce by the Plaintiffs to show that they possessed the balance amount at that time and also during the entire case.
There is another aspect of the matter. The Para No.7 of the Agreement to Sell dated 26.09.2006 i.e. Exhibit PW1/1 is reproduced as under: "7. That if the Second party fails to make balance payment withing the above mentioned stipulated period, the advance amount paid by them will be forfeited and if the First party is unable to execute the said deal in favour of second party, they will be liable to pay double of the said advance amount to the second party or the Second party can get the transaction completed through court of law under specific performance of this agreement at the cost and risk of Second party."
The last date of payment in terms of the said Agreement was 1.1.2007 and it appears that the Plaintiffs have not taken any steps to complete the transaction prior to the said date as there is not even single communication which has been produced on record. However, after elapse of the said date i.e. 1.1.2007, in order to put burden on the defendant, who is the old aged lady the Plaintiffs have given the Legal Notice dated 04.01.2007 and in the said Notice, the entire burden was put by the Plaintiffs on the defendant by alleging that the defendant is not in possession of entire first floor along with terrace over it and the garage of the said property and it is with some other person. The same has also pleaded by the Suit No. 28/2019 Page 52 of 59 Satinder Singh & Anr. V. Surjeet Kanwar Plaintiffs in their plaint. If the Plaintiffs were ready with entire balance amount then it was the duty of the Plaintiffs to produce the entire documentary evidence on the record but they have failed to do so. Now, putting the gun on the shoulders of the defendant i.e. old aged lady by means of the Notice dated 4.1.2007, the Plaintiffs have appeared to have got prepared and drafted the MOU's dated 12.01.2007 and 19.03.2007, as the language of the said MOU's clearly disseminates that the same are totally one sided and the Plaintiffs, who were otherwise not possessed the requisite balance amount were also in apprehension that they were not able to get the possession of the portion, as reflected in the original Agreement dated 26.09.2007, therefore, in the MOU dated 19.03.2007, they changed and substituted the clause relating to consequences of the breach of contract and the said clause is reproduced as under: "And due to the non compliance on the part of the first party, the agreement dated 26.9.2006 could not be materialized and the second party had to issue a legal notice dated 4.1.2007 on the first party and thereafter on the request of the first party both the parties entered into a Memorandum of Understanding on________January, 2007 whereby time was extended for two months which too has expired but the deal has not been materialized due to the negligence and inability of the first party to perform her part of obligation and the first party has again approached and requested the second party to further extend the period upto 30.4.2007 (15 strike off & written 30) for performance of her obligation as per the agreement dated 26.9.2006 and also requested to compensate the second party Suit No. 28/2019 Page 53 of 59 Satinder Singh & Anr. V. Surjeet Kanwar in case she fail to perform her part of contract as per the agreement to compensate the second party by paying interest @ 24% per annum on the earnest money from the date of receipt of the earnest money of Rs.26,00,000/ (Rs. Twenty Six Lacs only) and till the realization of the earnest money and also undertake to compensate the second party by paying the litigation and court fee charges etc. In case the first party fail to perform her part of obligation even within the extended period of further i.e. on or before on 30th.4.2007. (15 strike off & written 30).
It is made clear that no further extension of time would be given or sought by any party and the time is essence of this Memorandum of Understanding and the second party has already made arrangement for the balance amount of sale consideration."
The words "till realization of amount of earnest money"
hereinabove reveal that the parties have put to end of initial contract as far as consequences of the breach of the contract and substituted/novated the same with the aforesaid clause in terms of Section 62 of the Indian Contract Act. The consequences which are decided by the parties is that in case there is a breach of Contract by the defendant and then defendant would be liable to pay the earnest money alongwith interest @ 24% per annum till its payment i.e. realization thereof. There was specific clause of forfeiture on the part of the defendant in the initial Agreement dated 26.09.2006 but the same did not find mention in the MOU/Agreement dated Suit No. 28/2019 Page 54 of 59 Satinder Singh & Anr. V. Surjeet Kanwar 19.03.2007. Moreover, there was no need to put new clause in the Agreement dated 19.03.2007 when admittedly there was clause regarding the consequences in case of breach of contract in the original contract dated 26.09.2006 and moreover the clause put in the Agreement dated 19.03.2007 appears to be unilateral clause i.e. one sided and there was no mention about consequences if there is breach of contract on the part of the plaintiffs. The cross examination of PW1 clearly reveals that the plaintiffs have not got prepared any draft/pay order of the balance amount or purchased any stamp paper or done anything towards his part performance of the contract and as already discussed hereinabove that the mere writing that the plaintiffs possessed with balance amount in the MOU/agreement dated 19.03.2007 does not absolve the onus upon the Plaintiffs to prove on record that they possessed the sufficient balance amount to perform their part of the contract. In terms of aforesaid clause which were got incorporated by the Plaintiffs themselves in the MOU dated 19.03.2007, now it does not lie to the mouth of the Plaintiffs to claim Specific Performance, as the Plaintiffs have admittedly changed their agreed position which was existed in the Agreement dated 26.09.2006. It is further worthwhile to note that the intent of the aforesaid clause in the MOU/Agreement dated 19.03.2007 which was substituted in place of the original contract dated 26.09.2007 does not appear to be incorporated only for the purpose of performance of the contract but the same appears to be done in the light of changed Suit No. 28/2019 Page 55 of 59 Satinder Singh & Anr. V. Surjeet Kanwar circumstances i.e. since the defendant was not in possession of the aforesaid portions, which is also sufficiently reflected in the Notice dated 04.01.2007 and the averments made in the plaint.
The Ld. Counsel for the defendant has argued that although, the Plaintiffs have failed to prove that the plaintiffs were possessed with balance amount, however, the defendant is not intending to forfeit any amount and on the contrary, the defendant has filed I.A. No.2655/2008 before the Hon'ble High Court of Delhi (before transfer of the matter to this Court on account of pecuniary jurisdiction) and deposited the total amount of Rs.37,20,378/ in terms of substituted clause in MOU/Agreement dated 19.03.2007. The relevant portion of the order dated 24.02.2009, whereby the aforesaid I.A. was disposed off, is reproduced as under: "This is an application by the defendant seeking permission to deposit an amount of Rs.26.00 lakh on account of refund of advance money and Rs.11,20,378/ on account of interest accrued. Learned counsel for the plaintiff/nonapplicant opposes the same on the ground that the money was not to be refunded and the plaintiff is entitled for specific performance of the agreement to sell. Without prejudice to rights and contentions and pleas of both the parties, the defendant is permitted to deposit Rs.37,20,378/ as prayed by him in this Court. The amount be deposited in the name of Registrar General of this Court and be kept in a fixed deposit initially for a period of two years to be renewed periodically till the disposal of the suit."Suit No. 28/2019 Page 56 of 59
Satinder Singh & Anr. V. Surjeet Kanwar The aforesaid amount is kept in the FDR. Although, in the aforesaid order the plaintiffs have argued that the plaintiffs are entitled to specific performance of the contract but has failed to prove even the basic ingredients of readiness i.e. financial capacity possessed by the Plaintiffs to perform their part of the contract. Moreover, the plaintiffs, in order to show their bonafide, could have submitted at that time and/ or even thereafter that the plaintiffs are ready to deposit the balance amount but the plaintiffs have not even shown their bonafide at any point of time in the present case.
There is another aspect of the matter in the MOU/Agreement dated 19.03.2007, the Plaintiffs have himself admitted that the amount of Rs.26,00,000/ was given as the earnest money and not as part consideration and furthermore, the said amount covers only about 15% of the total consideration amount as provided in the Agreement dated 26.09.2006. In Jinesh Kumar Jain V. Iris Paintal, MANU/DE/3387/2012, our Hon'ble High Court has held as under: "that the plaintiff is entitled to decree of specific performance where the plaintiff has done substantial acts in consequence of a contract/agreement to sell. Substantial acts obviously would mean and include payment of substantial amounts of money. The plaintiff may have paid 50% or more of the consideration or having paid a lesser consideration he could be in possession pursuant to the agreement to sell or otherwise is in the possession of the subject property or other substantial acts have been performed by the plaintiff, and acts which can be Suit No. 28/2019 Page 57 of 59 Satinder Singh & Anr. V. Surjeet Kanwar said to be substantial acts under Section 20(3). However, where the acts are not substantial i.e. merely 5% or 10% etc of the consideration is paid i.e. less than substantial consideration is paid, (and for which a rough benchmark can be taken as 50% of the consideration), and/or plaintiff is not in possession of the subject land, the plaintiff is not entitled to the discretionary relief of specific performance."
The said Judgment was also quoted with approval by our own Hon'ble High Court in various Judgments and including in the Judgment of Ved Prakash Kharbanda Vs. Vimal Bindra (Supra).
Accordingly, in view of discussions made hereinabove, the Plaintiffs are not entitled to the relief of Specific Performance of the Contract dated 26.09.2006. The defendant during the course of arguments had specifically argued that the defendant has no objection in case the amount of Rs.37,20,378/ deposited by the defendant which is kept in FDR be released to the Plaintiffs with accrued interest till the date of release in favour of the plaintiffs and in my considered opinion that it will also cater the litigation expenses of the Plaintiffs. In view thereof, the plaintiffs are entitled to Rs.37,20,378/ alongwith accrued interest thereof till the date of release of the said FDR.
Considered from any view point, from the discussions made hereinabove, the issues no.1, 2 and 4 are accordingly decided in the aforesaid terms.
Suit No. 28/2019 Page 58 of 59Satinder Singh & Anr. V. Surjeet Kanwar RELIEF:
From the discussions, as adumbrated hereinabove, I hereby pass the following FINAL ORDER
(a) The suit of the plaintiffs qua reliefs (a) & (b) relating to specific performance and permanent injunction respectively are hereby dismissed.
(b) A money decree is passed in favour of the Plaintiffs and against defendant and Rs.37,20,378/ deposited by the defendant, which is kept in FDR, be released to the Plaintiffs with accrued interest till the date of release of the FDR in favour of the plaintiffs and it is made clear that it will also cater the litigation expenses of the Plaintiffs.
(c) The defendant shall bear her own costs of litigation.
Decreesheet be prepared accordingly in terms of this decision.
File be consigned to Record Room after due compliance. Announced in the open court on this 26th day of August, 2019.
(ARUN SUKHIJA) ADJ07 (Central) Tis Hazari Courts, Delhi Suit No. 28/2019 Page 59 of 59