Delhi High Court - Orders
M. L. Kapoor & Anr vs Din Dayal Agrawal on 25 April, 2022
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 174/2021
M. L. KAPOOR & ANR. ..... Plaintiffs
Through: Ms. Jaya Goyal and Ms. Manpreet
Kaur, Advocates.
versus
DIN DAYAL AGRAWAL ..... Defendant
Through: Mr. Kunal Sabharwal, Ms. Sakshi
Jaiswal and Mr. Raghav Mittal,
Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 25.04.2022 I.A. 15686/2021 (for directions on behalf of Plaintiffs under Section 151, Code of Civil Procedure, 1908 ('CPC'))
1. By way of this application, the following prayers are made:
"(a) Direct the defendant to produce and file the original Conveyance Deed of the suit property dated 15.03.2017 in respect to Flat No. 102, Mahavir Apartments, Plot No. SA, Sector 22, Dwarka, New Delhi-11 0077 and submit an affidavit of no existing charge, lien, dispute on the suit property.
(b) Allow the plaintiffs to withdraw the FDR for a sum of Rs. 50,00,000 (Indian Rupees Fifty Lakhs Only) along with accrued interest which is lying deposited before this Hon'ble Court vide order dated 19.03.2021."
2. Briefly stated, the parties entered into an Agreement to Sell date 15 th December, 2014 and three Supplementary Agreements thereto on 6th December, 2016, 13th May, 2019 and 19th September, 2019 respectively, qua property bearing Flat No. 102, Mahavir Apartment, Plot No. 5A, Sector 22, Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 1 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:57 Dwarka, New Delhi-110075 [hereinafter, "Suit Property"]. As per the Plaintiff, an amount of Rs. 1.50 crores stood paid as on 19th September, 2019. Further, in terms of order dated 19th March, 2021, while issuing summons in the suit and restraining the Defendant from creating any third-party interest as to title and possession of the Suit Property, the Court also directed the Plaintiff to deposit an amount of Rs. 50 lakhs, which according to him was the balance sale consideration payable under the Agreement to Sell.
3. The said amount stands deposited and has been kept in a fixed deposit. According to the Plaintiff, the Suit Property is under a mortgage created by the Defendant, as a result of which, the Suit Property is not free from encumbrance. In these circumstances, the Plaintiff submits that since the matter would take time as trial would have to be undertaken to adjudicate the claims, the Plaintiff should in the meantime be allowed to withdraw the amount of Rs. 50 lacs, which is lying deposited in the form of FDR.
4. To a query of the Court, counsel for the Defendant confirms that the Suit Property is mortgaged with a Non-Banking Finance Company ('NBFC'). He is however unable to give full details of the banking institution. Nevertheless, he states that there is an outstanding amount of Rs. 1.5 - 2.0 crores, payable by Defendant to the said NBFC, and the original title deeds qua the Suit Property are lying deposited with the NBFC. On merits, Counsel for the Defendant controverts the assertion of the Plaintiff and states that the arrangement between the parties was never an Agreement to Sell, and was in the nature of a loan instead, and he would establish the same during the course of trial.
Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 2 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:575. Considering the afore-noted facts, the Court is inclined to accept the request made by the Plaintiff/Applicant.
6. In view of the above, the present application is allowed.
7. Accordingly, it is directed that the FDR for a sum of Rs. 50 lakhs along with accrued interest which is lying deposited before this Court vide order dated 19th March 2021 be released to the Plaintiff by the Registry. The withdrawal of the amount shall not prejudice the Plaintiff in the event they succeed in the present suit.
8. In so far as the original title documents are concerned, since the same are deposited with the NBFC, no direction is being issued, as prayed for I.A. 4208/2021 (on behalf of the Plaintiffs under Order XXXIX Rules 1 and 2 read with order XXXVIII and Section 151 of the CPC)
9. The Plaintiff has filed the instant suit for specific performance of the Agreement to Sell date 15th December, 2014 read with Supplementary Agreements on 6th December, 2016, 13th May, 2019 and 19th September, 2019. The total sale consideration of the Agreement as mentioned in the afore- noted document is Rs. 2 crores, against which as per the Addendum dated 19th September, 2019, Defendant has acknowledged the receipt of Rs. 1.50 crores.
10. In terms of the Addendum to Agreement to Sell dated 19 th September, 2019, the final date fixed for execution of the Sale Deed was agreed as 15 th Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 3 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:57 January, 2020. According to the Plaintiff, they were ready and willing to execute the Sale Deed and had even offered to make the balance payment, however the Defendant never came forward. A letter dated 4th January, 2020, sent by the Plaintiff to the Defendant in this regard, reads as follows:
"Subject: Execution of the Sale Deed / Registration of the Subject Property / Need for Providing of Remaining Documents in Original Dear Mr. Agrawal, This is in pursuance of the "Agreement To Sell" dated 15.12.2014 whereby you agreed to sell Flat No. 102, Mahavir Apartments, Plot No. SA, Dwarka (hereinafter referred to as the "Subject Property") to the undersigned for a total sale consideration of Rs. 2,00,00,000 {Indian Rupees Two Crores Only), out of which the undersigned has already paid Rs. 1,50,00,000 (Indian Rupees One Crore Fifty Lakhs Only) to you, and the same has also been already acknowledged by you at several occasions.
It was decided that the balance sale consideration would be paid to you by the undersigned at the time of Registration of the Sale Deed for the Subject Property on 31.08.2015. However, due to unforeseen circumstances and your repeated requests, the Sale Deed could not be registered and you requested that the date of Registration be extended and hence, the Supplementary Agreement dated 06.12.2016 was executed thereby postponing the date of Registration of Sale Deed to 31.12.2017.
Yet again, you requested for postponement and considering the long standing personal relationship with you, the undersigned agreed to extend the date to 30.09.2019 vide Supplementary Agreement dated 13.05.2019.
However, you still requested for another extension. Now vide the Supplementary Agreement dated 19.09.2019, a final opportunity· has been given to you to execute the Sale Deed and register the Subject Property on 15.01.2020.
In order to complete the same, you are hereby requested to provide the undersigned with the following documents in accordance with the terms and conditions of the "Agreement To Sell" within 7 days from the receipt of this letter, so the Sale Deed can be registered as the undersigned has always been / is ready and willing to pay the balance sale consideration amount qua the Subject Property.
1. Original Share Certificate of the Subject Property Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 4 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:57
2. Updated Statement of Account from the Mahavir Society (upto 31.12.2019)
3. Original Free-Hold papers of the Subject Property
4. NOC from DCHFC Ltd. Pursuant to your assurances (verbal and written and signed) that the loan against the Subject Property has been paid in full by you
5. NOC from any other bank/ institution/ person from where any loan has been availed by you against the Subject Property Upon receipt of the above mentioned documents, the stamp paper shall be purchased by the undersigned, the necessary TDS (amounting to Rs. 2,00,000 {Indian Rupees Two Lakhs Only)) shall be submitted, and the balance sale consideration amount of Rs. 48,00,000 (Indian Rupees Forty Eight Lakhs Only) shall be paid to you by the undersigned at the time of registration of the Sale Deed.
Please revert with the above mentioned details at the earliest to enable proceeding with the smooth execution of the Sale Deed and registration of the Subject Property in favor of the undersigned."
11. The Plaintiff also sent a communication dated 15th January, 2020 to the Office of the Sub Registrar intimating the afore-noted facts. In reply to Plaintiff's notice dated 4th January, 2020, the Defendant, through his advocate, sent a letter dated 28th January, 2020 stating as follows:
"It is intimated that my client is not having possession of following documents so that reply can be sent to you. Kindly supply following documents at the earliest:- (i) Agreement to Sale dated 15.12.2014 for the sale of Flat No. 102, Mahavir Apartment, Dwarka, New Delhi for Rs. 2 Crores. (ii) Supplementary Agreements to Agreement to Sale dated 15.12.2014.
Present communication is without prejudice towards filing detailed reply on merits after receiving abovementioned documents from your side."
12. In response to the same, the Plaintiff once again called upon the Defendant to complete all the requisite formalities and execute and register the Sale Deed in their favour. This was followed by a communication dated 18 th February, 2020, sent by Defendant's counsel, again calling upon the Plaintiff to provide copies of the Agreement to Sell. In the replies sent by the Defendant, the Court does not find any denial of the Agreement to Sell or any of the payments Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 5 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:57 stated to have been mentioned therein. The case now put forth before the court that the real transaction between the parties was that of a loan, is prima facie not borne out from the record.
13. As of now, only a prima facie case coupled with balance of convenience and possibility of causing irreparable loss has to be examined. Counsel for the Defendant has stated that the injunction should be vacated as the Plaintiff has no right to seek specific performance, even if the Defendant has not executed the sale deed. He states that Plaintiff's only recourse is to seek recovery of the alleged amount paid under the Agreement to Sell. He places reliance on Clause No. 9 of the Agreement to Sell, which reads as under:
"9. In case by any reason the First Party fails to execute the sale deed or transfer the said property in favour of the Second Party within aforesaid period, the first party shall be bound to refund to the second party, the total amount received by him alongwith 18% per annum interest on that money and the 2nd party shall not enforce to complete this sale."
[Emphasis supplied]
14. To a query of the Court as to whether the Defendant would be willing to refund the amount received under the Agreement, he responds in the negative, stating that no such amount has been received. Thus, the bounded duty to refund the amount as envisaged under the afore-noted clause not being honoured does not prima facie vitiate the remedy of specific performance.
15. Considering the afore-noted facts, as of now, the Court finds that the Plaintiffs have established a prima facie case and has also shown their bona fide by depositing the balance sale consideration before this Court, which has been allowed to be withdrawn in light of the fact that the property continues to be mortgaged and unless the same is redeemed, the execution of the Sale Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 6 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:57 Deed would not be possible.
16. In light of the documents, signature whereon is not disputed by the Defendant, the Application deserved to be allowed and accordingly the injunction passed on 19th March, 2021, stands confirmed and shall continue to operate during the pendency of the suit.
17. In view of the above, the present application is allowed.
CS(OS) 174/2021
18. The following issues are framed:
(i) Whether there was no transaction between the parties for sale and purchase of the property bearing No. Flat No. 102, Mahavir Apartment, Plot No. 5A, Sector 22, Dwarka, New Delhi-110075, and whether the Agreement to sell was in fact a loan transaction? If so, to what effect? OPD
(ii) Whether the Plaintiff is entitled to a decree of specific performance for the property bearing No. Flat No. 102, Mahavir Apartment, Plot No. 5A, Sector 22, Dwarka, New Delhi-110075? OPP
(iii) Relief.
19. Parties are directed to file their list of witnesses within a period of fifteen days.
20. Considering the fact the defence advanced is contrary to the documents on record on which the signatures are not denied, the principal question/issue Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 7 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:57 is Issue No. (i). Therefore, Defendant is called upon to lead the evidence first. Affidavits of witnesses to be filed within a period of four weeks.
21. List before the Joint Registrar for scheduling the dates of trial on 20th July, 2022.
SANJEEV NARULA, J APRIL 25, 2022 nk Signature Not Verified Digitally Signed CS(OS) 174/2021 Page 8 of 8 By:NITIN KAIN Signing Date:28.04.2022 21:35:57