Delhi District Court
Shri Sunil Kumar Saxena vs Shri Palicherla Govinda Reddy on 22 December, 2017
IN THE COURT OF SHRI SANJAY SHARMAI :
ADDL. DISTRICT JUDGE - 02 (EAST DISTRICT)
KARKARDOOMA COURTS : DELHI
Civil Suit No. 3147/2016
Shri Sunil Kumar Saxena
S/o Shri Krishan Murari Saxena
R/o A13, Gyandeep Apartments,
Mayur Vihar PhaseI,
Delhi - 110 091 ................Plaintiff
Versus
1.Shri Palicherla Govinda Reddy S/o late Shri Palicherla Venkatramana Reddy R/o 92268/K/11, Navodaya Colony, Road No. 2, Banjara Hills, Hyderabad - 500034 (Andhra Pradesh)
2. Shri Palicherla Navin Reddy S/o Dr. Palicherla Govinda Reddy R/o 706, Timarron Dr. Leandere, Texas - 78641, USA
3. Shri Palicherla Vikram Reddy S/o Dr. Palicherla Govinda Reddy R/o 3, Hamilton Ct. Kendall park New Jersey08824, USA Also at :
3508, Wild Wood Court, Monmouth Junction New Jersey, USA ................Defendants Date of institution : 11.11.2005 Date of reserving judgment : 18.12.2017 Date of judgment : 22.12.2017 Civil Suit No. 3147/2016 1 of 31 J U D G M E N T :
The plaintiff has preferred the present suit against the defendant, seeking specific performance of the contract and permanent injunction in respect of the Flat No. B15, first floor, Gyandeep Apartments, Plot No. 8, Mayur Vihar PhaseI, Delhi110 091 (hereinafter referred to as the suit property).
2. In brief, the facts as averred in the plaint are that the plaintiff, who was a government servant, had been residing on rent in the Gyandeep Apartments and he intended to purchase a flat in the said Society and came in contact with defendant No. 1 who was owing the suit property in the joint names with his sons, i.e. defendants No. 2 and 3, who were settled abroad. It has further been averred that in November 2002, negotiations started between the plaintiff and defendant No. 1 over the sale of suit property, telephonically and they entered into an oral agreement regarding the sale of the suit property on 15.2.2003 which was confirmed by defendant No. 1 through an email dt. 16.6.2003.
3. It has further been averred that the plaintiff wanted to avail loan for purchasing the suit property and was advised by an executive of HDFC that he would be able to get loan on the basis of a registered general power of attorney to be executed by the original allotees of the suit property, i.e. defendants No. 2 and 3 in favour of defendant No. 1.
Accordingly, defendant No. 1 got the GPA from defendants No. 2 and 3 in his favour and in February 2003, on the instructions of defendant No. 1, plaintiff took all pains for getting the GPA registered and also incurred expenses for the same.
Civil Suit No. 3147/2016 2 of 31
4. It has been submitted that the plaintiff and defendant No. 1 entered into an agreement to sellcumreceipt dt. 05.8.2004 vide which defendant No. 1 agreed to sell the suit property to the plaintiff for a consideration of Rs.29 Lacs and defendant No. 1 received a sum of Rs. 2 Lacs from the plaintiff as part consideration amount which was paid through two cheques. Thereafter, defendant No. 1 made a written request dt. 05.8.2004 to Secretary, IIT Delhi Teachers Cooperative Group Housing Society Ltd. to issue the necessary documents to the plaintiff so that the sale could be completed. It has also been averred that as per clause 2 of the receiptcumagreement to sell, the defendant No. 1 was under legal obligation to get the suit property registered in the name of plaintiff within 180 days or at the most, within one year and the plaintiff was under obligation to make balance payment of Rs.27 lacs to defendant No.1 at the time of registration of the sale deed. Thereafter, the possession of the suit property was agreed to be handed over to the plaintiff. It has further been averred that the plaintiff initiated process to arrange the funds including the loan from HDFC, but when he tried to contact defendant No. 1 on the given mobile numbers as well as through emails, defendant No. 1 did not gave any satisfactory answer. However, in his reply dt. 02.2.2005, defendant No. 1 informed that he is working in Namibia and is not sure as to when he will be able to come to Delhi and asked the plaintiff to either wait or he was ready to return his money. The plaintiff also averred in his plaint that thereafter he sent a number of e mails to the defendant No. 1 and through email dt. 01.8.2005, he inquired about the schedule of defendant No. 1 for his visit to Delhi but no reply was sent by defendant No. 1. However, on 24.8.2005, defendant Civil Suit No. 3147/2016 3 of 31 No. 1 wrote to the plaintiff that he has forfeited the advance payment of Rs.2 Lacs made by the plaintiff on the ground that an year from the date of agreement, as per Clause 2, has expired on 04.8.2005. Thereafter, the plaintiff sent a communication dt. 31.8.2005 to defendant No. 1 requesting him to enforce the agreement dt. 05.8.2004 but the same was returned as 'unclaimed'.
5. It has further been averred that the plaintiff then reported the matter to the Commissioner of Police as well as to SHO, Mayur Vihar PhaseI, on 26.9.2005.
6. Hence, through the present suit, the plaintiff has prayed for a decree of specific performance in his favour, directing the defendant No. 1 to execute regular Sale Deed/Conveyance Deed of the suit property in his favour and to permanently restrain the defendants, their legal heirs, successors and other persons from selling, alienating or transferring the suit property to anyone or creating any third party interest and to restrain defendants No. 2 and 3 from revoking, cancelling or withdrawing the GPA executed by them in favour of defendant No. 1.
7. Summons of the suit were served upon the defendants who put in their appearance and filed their respective written statement separately.
8. It has been submitted by defendant No.1 in the WS that the agreement to sell dt. 05.8.2004 stood terminated by the plaintiff's own admission as he defaulted in fulfilling his time bound obligations and has not challenged the termination of the said agreement and thus, is deemed to have accepted the termination. It was also submitted that the purported Civil Suit No. 3147/2016 4 of 31 contract sought to be enforced by the plaintiff falls within the ambit of Section 14 of the Specific Relief Act, 1963. It was also submitted that the plaintiff neglected to pay the balance amount of Rs.27 Lacs within the time contemplated under the agreement and therefore, defendant No. 1 did not execute the sale deed in favour of the plaintiff. It was also submitted that in order to conclude the formalities regarding transfer of property and to execute the sale deed, defendant No. 1 visited India on 28.6.2005 and had stayed at IIT Guest House, Delhi and had repeatedly contacted the plaintiff but he avoided meeting with him deliberately.
Defendants No. 2 and 3 also made similar submissions in their respective written statements.
9. The plaintiff filed the replication to the respective written statements of the three defendants, denying the counter allegations and reiterating the facts and pleas taken in the plaint.
10. From the pleadings of the parties, following issues were framed on 27.7.2010 :
ISSUES :
1). Does the plaintiff prove that he was ready and willing to perform his part of the contract, as alleged in the suit? OPP
2). Does the defendant prove that agreement to sell was validly terminated as contended in the written statement? OPP
3). Is the plaintiff entitled to decree for specific performance, as claimed? OPP
4). Is the plaintiff entitled to any injuctive relief as claimed in paragraph28 (b) & (c) of the suit?
Civil Suit No. 3147/2016 5 of 31
OPP
5). Relief.
11. The plaintiff led his evidence and examined himself as PW1, tendered his affidavit as Ex. PW1/A and also Ex.PW1/B which was regarding evidence under Section 65B of Indian Evidence Act. He relied upon documents Ex. PW1/1 to PW1/11. (The documents Ex.PW1/4 and PW1/5 mentioned in the affidavit, were also exhibited as Ex.P1 and P2 respectively at the time of admission/denial of documents on 19.7.2010).
12. The defendant No.1 examined himself as DW1 and tendered in evidence his affidavit Ex. DW1/A .
The defendants further examined Shri Rajesh - Manager, Faculty Guest House, IIT, Hauz Khas, New Delhi as DW2 who proved the reservation record of his guest house in respect of booking dated 09.8.2004 and 29.7.2005 done by defendant No. 1.
Defendant No. 2 examined himself as DW3 who also tendered his evidence by way of affidavit Ex.DW3/A and he closed his evidence on his behalf as well as on behalf of other defendants.
13. I have heard Shri CS Parashar - Ld. Counsel for the plaintiff, Shri Gaurav Bahl - Ld. Counsel for all the defendants and have carefully gone through the records of the case.
ISSUE No. 1 :
14. The main defence taken by the defendant in the written statement as well as during the arguments had been that the plaintiff was Civil Suit No. 3147/2016 6 of 31 never ready and willing to perform his part of the contract, that is to say, that he was not having sufficient funds to pay the consideration price. On the other hand, it was contended on behalf of the plaintiff that he was always ready and willing to perform his part and had sufficient funds to pay the balance at the time of execution of the sale deed but it was the defendant who was reluctant and did not perform the obligations on his part.
15. The Hon'ble Supreme Court in JP Builders & anr. Vs. A . Ramadas Rao & anr. VIII (2010) SLT 546 (relied upon by Ld. Counsel for the plaintiff) held as under :
"9. The words "ready" and "willing" imply that the person was prepared to carry out the terms of contract. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness".
16. The Court referred to the judgment in NP Thirugnanam Vs. Dr. R. Jagan Mohan Rao & ors. (1995) 5 SCC 115, wherein in para 5 it was observed :
"To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the Court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must by necessity be proved to be available".
17. The Hon'ble Court further relied on the decision in P. D'Souza Vs. Shondrilo Naidu (2004) 6 SCC 649, wherein it has been held as under :
"No straitjacket formula can be laid down in this behalf..... The readiness and willingness on the part of Civil Suit No. 3147/2016 7 of 31 the plaintiff to perform his part of the contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale".
18. In light of the above decisions, the conduct of the parties and their readiness and willingness to perform their part of the contract has to be evaluated.
19. The Ld. Counsel for the plaintiff heavily relied upon the various emails exchanged between the parties to impress upon the point that since beginning, the plaintiff was eager to execute the agreement to sell and had been repeatedly writing to the defendant, asking about his schedule of his visit to Delhi. Here, it is pertinent to mention that the defendant was based at Hyderabad and at the relevant time, was posted at Namibia . The printouts of the emails have been placed on record which commenced from 16.6.2003 and are till 01.8.2005.
20. At the very outset, the Ld. Counsel for the defendant had seriously opposed reliance upon these emails, submitting that the certificate under Section 65B of the Indian Evidence Act was not filed alongwith the printouts and further that the printouts are not original printouts but they have been copied on word document from the email and thereafter filed on record. It was also submitted that the computer from which the printouts of these emails were taken belonged to the employer of the plaintiff and was not under his control and supervision and therefore, he was not competent to give the affidavit under Section 65B of the Act which, in any case, was filed subsequently.
21. As per the records, the email printouts were filed by the plaintiff alongwith the plaint or just thereafter, in October 2005. The Civil Suit No. 3147/2016 8 of 31 affidavit in support under Section 65B of the Act was filed on 15.3.2013, i.e. after more than seven years.
22. The Hon'ble Apex Court in Anvar PV Vs. PK Basheer (2014) 10 SCC 473 held as under :
"An electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements under Section 65B are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the certificate in terms of Section 65B obtained at the time of taking the document, without which, the secondary evidence pertaining to that electronic record is inadmissible".
23. It would mean that the certificate under Section 65B of the Indian Evidence Act is required to be submitted alongwith the document when it is placed on record. However, a contrary view was taken by the Hon'ble High Court of Delhi in Eli Lilly & Co. & anr. Vs. Maiden Pharmaceuticals Ltd. 235 (2016) DLT 381 Delhi. The Hon'ble Court after examining the judgment in Anvar PV's case (supra), held as under :
"20. It thus but has to be held that plaintiffs are entitled to file the certificate under Section 65B of the Evidence Act, even subsequent to the filing of the electronic record in the Court. Order 11 Rule 6 of CPC as applicable to commercial suits is also not found to provide the contrary".
However, the Court added :
"I may however add a word of caution. Such certificate/affidavit/s under Section 65B of the Evidence Act and/or under Order 11 Rule 6 of CPC, though can be filed subsequently also, as any other document may be, but only if the party wanting to file the same makes out a case for reception thereof, as for late filing of documents beyond the prescribed limit. If the party so producing the said certificate/affidavit is unable to satisfy the Court as to the reasons for which the Civil Suit No. 3147/2016 9 of 31 certificate/affidavit was not filed at the appropriate time, may run the risk of the certificate/affidavit being not permitted to be filed and resultantly the electronic record, even if filed at the appropriate time, remaining to be proved, to be read in evidence..... Thus, merely because it has been held that the certificate/affidavit under Section 65B and/or Order 11 Rule 6 CPC can be filed at any subsequent stage, does not mean that the parties to a litigation do not file such certificate/affidavit alongwith electronic record produced before the Court. The proof of said certificate/affidavit, unlike other documents, will be much more stringent".
24. As already observed, the plaintiff filed the affidavit under Section 65B of the Evidence Act in support of the printouts of the e mails only on 15.3.2013, i.e. after more than seven years of the filing of the document. In the entire affidavit, there is no explanation for the delay in filing the said affidavit/certificate, nor any reason has been assigned as to why it was not filed at the appropriate time.
25. The plaintiff/PW1 was elaborately crossexamined on the said affidavit. He deposed that his department at Engineers India Limited used to maintain the server. He admitted that the server maintains the e mail at EIL but for a limited period which he could not depose. He further deposed that he had been using his own email id during the period when the said emails were exchanged and that he was using a desktop in the year 2004 but was not using it as on the date of deposition . He could not depose the date when he last used the desktop nor the date when his company changed the said desktop. It shows that the desktop which he was using belonged to his employer company and therefore, he could not be the only person having control over the use of the said computer. He further deposed that he had taken out the printouts Civil Suit No. 3147/2016 10 of 31 of the emails at the time of filing of the plaint, that is to say, that the printouts were not taken at the time when the emails were sent or received.
26. According to Section 65B (2) (c) of the Evidence Act, one of the condition to be fulfilled and contained in the affidavit/certificate must be that "Throughout the material part of the said period, the computer was operating properly, or, if not, then in respect of any period in which it was not operating properly or was out of operation during that part of the period, was not such as to affect the electronic record or the accuracy of its contents". This condition is found lacking in the affidavit filed by the plaintiff, purportedly under Section 65B of the Evidence Act.
27. PW1/plaintiff was confronted with email Ex.PW1/1 dt. 16.6.2003 and he admitted that there is no date or time or the name of the recipient in the reply to the email which shows that it is not the copy of the original email. It was further deposed by the plaintiff that the original emails were in possession and preserved in his email account. Accordingly, he was directed to produce the said emails on the next date but he failed to produce the same.
28. It is, thus, abundantly clear that firstly, the plaintiff failed to file the certificate/affidavit under Section 65B of the Evidence Act alongwith the emails relied upon by him and tendered no explanation for the delay in filing the said affidavit. Secondly, his crossexamination clearly reveals that even the printouts of the emails placed on record are not the original printouts and are copies of the original printouts and therefore, are not even secondary evidence. The certificate/affidavit filed Civil Suit No. 3147/2016 11 of 31 by the plaintiff is also not in consonance with the requirement of Section 65B (2)(c) of the Evidence Act, as pointed out herein above. Further more, the plaintiff has failed to satisfactorily prove that during the relevant period, the computer from which the printouts were taken remained solely under his control and use as required by Section 65B (2)
(a) of the Evidence Act. Hence, for the foregoing reasons, the emails relied upon the plaintiff become inadmissible and cannot be relied upon and therefore, the plaintiff cannot prove his readiness and willingness from the said emails.
29. The term "readiness' and "willingness" has been incorporated in Section 16 of the Specific Performance Act, 1963. According to Section 16 of the said Act, specific performance of a contract cannot be enforced in favour of a person
(c) Who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
Explanation for the purposes of Clause (c)
(i) Where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court.
30. A plain reading of the Section would show that it is mandatory for the plaintiff not only to aver in his plaint about his "readiness' and "willingness" to perform the contract but it is also incumbent upon him to prove that he had always been ready and willing to perform the terms of the contract. Thus, essentially the burden of proving "readiness' and "willingness" is upon the plaintiff to succeed in a suit for specific performance. However, in P. D'Souza's case (supra), the Civil Suit No. 3147/2016 12 of 31 Hon'ble Apex Court held that :
"The "readiness' and "willingness" on part of the plaintiff to perform his part of the contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of agreement for sale".
31. In the instant case, from the terms of agreement to sell dt. 05.8.2004 Ex.P1, as per Clause (3), the defendant was required to execute the sale deed and all necessary documents in favour of second party and as per Clause (6), was required to clear all the dues, such as DDA dues, House Tax, Electricity and Water charges, and RWA charges etc. up to the time of getting final payment. These were the only requirements on part of the defendant as per the agreement. There is not a whisper of averment in the plaint or even in the evidence of the plaintiff that the defendant did not clear the said dues or any due was pending on any account which he did not pay or clear despite demand. The question of executing the sale deed would have arisen only when the plaintiff tendered the balance consideration amount.
32. Ld. Counsel for the plaintiff submitted that in terms of Section 79 of the Delhi Cooperative Societies Act, 2003, the plaintiff was also required to obtained NOC from the Society where the suit flat is situated. Section 79 of the Delhi Cooperative Societies Act, 2003 provides as under :
Restriction on transfer of share or interest of a member.
79. Subject to the provisions of this Act, in the case of a cooperative housing society, no transfer of share or interest of a member or the occupancy right, except the transfer to his heir or a nominee, shall be effective, unless
(a) the previous permission of the cooperative housing society has been obtained by the transferor;
Civil Suit No. 3147/2016 13 of 31
(b) the dues of the cooperative housing society are paid or transferred to the transferee with the consent of the cooperative housing society;
(c) the transferor vacates and gives possession of the premises to the transferee; and
(d) the transferee applies and acquires membership of the cooperative society :
Provided that the transfer of share or interest in respect of lease hold properties shall be governed by the terms of the lease.
33. According to this provision, the transferor/seller of the flat/property situate in Cooperative Society has to take prior permission of the society before transferring/selling the flat/property. As already observed herein above, the defendant, at the relevant time, was working in Namibia . Even in his crossexamination , he categorically deposed that "At the time of execution of above said agreement to sell, I was in Namibia as Advisor to the University of Namibia". Thus, it was not possible for him to personally visit and seek the permission from the Society and accordingly, he had written a letter to the Society on 05.8.2004 itself for issuing necessary documents relating to his flat for processing to sell to the prospective buyer Shri SK Saxena , i.e. the plaintiff. The said letter Ex. P2 has been relied upon by the plaintiff himself and admitted in his crossexamination . It was also duly received by the Society. It was agreed by the parties in the agreement Ex.P1 itself that all the expenses for getting the suit property freehold, which would include transfer charges and registration charges of the society, would be borne by the plaintiff. Thus, it was incumbent upon the plaintiff to have pursued the matter with the Society which was also easier for him as he was residing in the same very Society in another flat on rent. The Civil Suit No. 3147/2016 14 of 31 defendant thus, completed his part of the duty to get the flat transferred in the name of the plaintiff to the best of his ability, considering the fact that he was not even in India what to say in Delhi.
34. The crossexamination of the plaintiff would show that he, on the contrary, took no steps for pursuing the transfer of the flat. He deposed "It is correct that I did not write to the Society concerned after letter Ex.P2. It is wrong to suggest that I did not deliberately followup with the Society for seeking permission . I do not know whether any payment was to be made with respect to the permission . (Vol. Society did not respond to the letter Ex.P2 even after my personal followup. I followed up with the Secretary of the Society whose name I do not remember. Again said, it was Mr. Shekhon , the Secretary of the Society".
35. Two things are clear from this deposition of the plaintiff; one, that it was his duty to obtain the necessary permission from the Society after paying the requisite transfer charges and second, that he did not diligently pursue the matter with the Society.
36. The second part to be performed by the defendant, though not mentioned in the agreement, was to obtain GPA in his favour from his two sons, i.e. defendant No. 2 and 3 who are the joint owners of the suit property for executing the sale deed. The defendant accordingly obtained the required GPA from both his sons which are dt. 27.2.2004 and 03.3.2004, respectively. It is pertinent to mention that both defendant No. 2 and 3 were residing in USA at the relevant time and he arranged for the attested GPA of both his sons and delivered it to the plaintiff well in time. The GPAs were accordingly registered at Delhi on 26.3.2004. The plaintiff claims that he got the said GPA registered and spent Rs.3100/ Civil Suit No. 3147/2016 15 of 31 for the purpose, but the defendant claims that he got them registered. However, since this issue is not relevant as to who got them registered, therefore, requires no discussion. The relevant fact is that the defendant acted bonafidely and well within time to get the GPA from his two sons, i.e. defendants No. 2 and 3. Lastly, the defendant No. 1 was required to execute the sale deed but then the balance was never tendered by the plaintiff. It is the case of the defendant, as deposed by him in his examinationinchief, that he was in Delhi for executing the sale deed and had apprised the plaintiff that he would be available at IIT Guest House and upon his arrival contacted the plaintiff and called upon him to fulfill his obligations but he neglected to do the needful for his entire duration of stay and did not contact him.
37. The plaintiff has disputed this fact. However, in the cross examination of DW1, a suggestion was put to him by Ld. Counsel for the plaintiff, highlighted by the Ld. Counsel for the defendant during the course of arguments, in response to which DW1 deposed that "It is correct that I was in Delhi w.e.f. 01.8.2005 to 05.8.2005". Thereafter, there was no crossexamination of DW1 on this aspect nor any suggestion to the contrary was given which proves that the defendant was in Delhi during the said period and further that this fact has been admitted by the plaintiff.
38. The defendant also examined DW2, the Manager - Faculty Guest House, IIT, Hauz Khas, New Delhi, who proved the booking record in respect of the defendant of the said Guest House and according to it, the Guest House was booked for the defendant between the period 01.8.2005 to 05.8.2005 (vide Ex.PW2/B). Similarly, he also proved the Civil Suit No. 3147/2016 16 of 31 record regarding his having booked the Guest House from 04.8.2004 to 10.8.2004 (Ex.PW2/A) which is the period when the agreement to sell was signed by the parties. Ld. Counsel for the plaintiff though questioned the booking for the period 01.8.2005 to 05.8.2005 but never questioned the witness regarding the previous booking, though both the documents are identical in nature. The witness proved the reservation order Ex.DW2/B submitting that it was under his signatures. Though DW2 deposed that it cannot be said on the basis of the said documents that the person who had made the bookings actually resided in the Guest House on the booked dates and admitted that sometimes bookings are also cancelled, but then he was not able to depose the fact whether the defendant actually resided on the given dates, as he was not in service of the Guest House during the relevant period. In my opinion, the record produced by this witness is sufficient to prove the stay of the defendant in the Guest House during the period mentioned above. The bookings were made in the name of the defendant and the payment was made in cash by the guest as per the said documents. It is obvious that the cash payment would be made by the guest only when he had been there and has occupied/stayed in the Guest House. Thus, the defendant has been able to prove that he was present and available at Delhi for execution of the sale deed between 01.8.2005 to 05.8.2005.
39. It is also noteworthy that DW1 in his crossexamination deposed that "However, the plaintiff also did not get in touch with me even after 05.8.2005 when the said agreement to sell was to expire that he is ready with funds. He also did not produce the no objection certificate from the Society for registration of the suit property, which Civil Suit No. 3147/2016 17 of 31 was mandatory as per the agreement which expired on 05.8.2005". It is noteworthy that there was no crossexamination of DW1 on this deposition and thus, it amounts to admission on part of the plaintiff of the said facts. It is, thus, clear that the defendant has proved his "readiness" and "willingness" to perform his part of the contract/agreement.
40. Now it comes for the "readiness" and "willingness" of the plaintiff. In order to show his readiness, the plaintiff was required to prove that he was having sufficient funds at the relevant time to pay the balance consideration amount of Rs.27 Lacs to the defendant No. 1 for registration of the sale deed. Ld. Counsel for the plaintiff submitted that the plaintiff was not required to prove sufficiency of funds and that it was only required to be proved that he had capacity and resources to pay the said amount.
41. Ld. Counsel for the plaintiff relied upon the judgment in JP Builders & anr. Vs. A . Ramadass Rao & anr. VIII (2010) SLT 546 SC, wherein the Court relied upon and referred to the judgment in NP Thirugnanan's case (supra) in which the Court held that :
"The amount of consideration which he has to pay to the defendant must of necessity be proved to be available".
42. He also relied upon the judgment in DC Khosla Vs. Vinod Kumar Jain 232 (2016) DLT 354 Delhi. However, in that case, the plaintiff had not only offered to pay the balance amount but which when not accepted, were deposited by him in the bank account of the defendant. Hence, the said judgment has no factual applicability upon the present case.
43. To judge the capacity and the availability of the funds with Civil Suit No. 3147/2016 18 of 31 the plaintiff at the relevant time, his crossexamination is required to be referred. He deposed in his initial crossexamination that his annual salary was Rs.14 Lacs at the time of execution of the agreement but later on he changed his version and deposed that it was only Rs.5 Lacs in the year 2004, however, he failed to place on record any document in support of the said fact and also admitted it that he had not filed any such document.
44. It is the case of the plaintiff that he had applied for bank loan to pay the consideration price. In his crossexamination , he deposed that he had applied for bank loan for Rs.20 Lacs from Standard Chartered Bank and also to HDFC Bank for Rs.20 Lacs. However, he again failed to place any document to show that he had actually applied for the bank loan except copies of two screenshots of the Calculator which only reflect a calculation chart of the interest and EMI, if one applies for a loan for Rs.20 Lacs. It was only a screenshot of a website providing Home Loan EMI Calculator in general without naming any particular Bank/financial institution . He also filed copies of three emails which he made to the Standard Chartered Bank asking for the documents required for applying a bank loan but no document was filed by him to show and prove that he had actually applied for any bank loan. He admitted in the crossexamination that he did not get the bank loan, submitting that he had not received the loan due to paucity of requisite documents from the defendant, i.e. share certificate of membership, possession letter and allotment letter. However, in the plaint, it has been averred that HDFC Bank had only asked for the GPA in favour of defendant No. 1 by defendants No. 2 and 3 for approving the loan. On being further Civil Suit No. 3147/2016 19 of 31 questioned if he had ever called upon the defendants for the aforesaid documents, PW1 replied that he called the said documents vide Ex.PW1/6, an email dt. 02.2.2005. On one hand, this email has already been held to be inadmissible and on the other hand, a perusal of this e mail would show that he had falsely communicated to the defendant that he had got the loan approved from HDFC Bank and that the Bank would be needing the balance documents before disbursement but without mentioning the nature of documents required from defendant No. 1. Thus, it is amply clear that neither the plaintiff ever applied for any loan nor any loan was approved or sanctioned to him. Apart from that, it is to be noted that as per the agreement to sell, the defendant was not obliged to provide any such documentation to the plaintiff or help him in his application for home loan. There is no such Clause in the said agreement.
45. The plaintiff/PW1 next deposed that he was having an amount of Rs.11,77,823/ in his provident fund as on 05.8.2005, but later corrected that the said amount was Rs.12,81,798/. However, in his crossexamination he deposed that he could not apply for the release of the said fund due to the fact that the requisite documents were not furnished by the defendant which were the same as mentioned above for the purposes of bank loan . On further questioning, he deposed that he cannot show any document which reflects that his employer EIL had asked for aforesaid documents for the release of the amount of Rs.11,77,823/ from the provident fund. Apart from that, the plaintiff failed to place on record any application form for the release of the said amount and rather admitted deposing "It is correct that I had deliberately not applied to the Organization for release of the aforesaid Civil Suit No. 3147/2016 20 of 31 amount as I wanted to avail home loan".
46. It is pertinent to mention that an application was filed by the plaintiff under Order 7 Rule 14 CPC dt. 06.9.2010, i.e. after almost five years of the filing of the suit and alongwith that he placed on record various documents Ex.PW1/10 (colly.) to show his capacity to pay the amount. On the first page is Annexure P1, which is captioned as 'statement of funds available with him as on 04.8.2005' but at the bottom of this statement, it is mentioned that the statement reflects funds available as on 04.8.2010 and the said funds were to the tune of Rs.32,24,691/ and included his provident fund, PPF, bank balance in three of his savings bank account, share certificates, fixed deposits and value of gold ornaments. However, there is nothing on record to suggest that these assets were readily available to him at the relevant time nor these documents or sources were pleaded by the plaintiff and mentioned in his plaint.
47. It has been averred in the plaint itself (para 3) that plaintiff is not a man of means and wanted to purchase the suit property by taking loan from the financial institution . Thus, the documents relied upon i.e. Ex.PW1/10 (colly.) are contrary to his pleadings. If he was having sufficient means to pay the consideration price, there was no occasion for him to avail home loan. These documents have only selfcontradicted the case of the plaintiff.
48. It was next deposed by the plaintiff in his crossexamination that his wife is not working but is having income from property. However, he admitted that he never stated this fact in his affidavit, nor filed any document to show that she was having income from any Civil Suit No. 3147/2016 21 of 31 property and that he had deposed this fact for the first time. The plaintiff/PW1 corrected himself during crossexamination and again said, that his wife is not having income from property but has income from her parents side and admitted that this fact has also not been pleaded by him in his plaint and affidavit and is not supported by any document. It shows that the plaintiff had been taking contradictory stands and changing his version frequently. Such a witness is not trustworthy.
49. On a specific question put to PW1 in the crossexamination , if he had ever told defendant No. 1 that he was having an amount of Rs.27 Lacs to meet the obligations of the agreement, he again gave an evasive reply deposing that he had told him (defendant No. 1) that he wanted to avail home loan but also informed him that the required amount was available with him. He further deposed that this fact was verbally informed while signing the agreement. He admitted that there was no record to the effect that he had ever informed the defendant that he had an amount of Rs.27 Lacs available with him but only informed him telephonically and added that his intention was to avail home loan .
50. In the later part of the crossexamination , the plaintiff/PW1 added that defendant No. 1 informed him that he will not be available in India before July 2005 and whenever he will come to India he will inform him well in advance so that registration of sale deed can be done and he could arrange finances for the same. It again reflects that till June 2005, he was not having sufficient finances to pay the balance amount though the stipulated period of executing the sale deed was to expire in August 2005.
51. The plaintiff had relied upon the holding of shares worth Civil Suit No. 3147/2016 22 of 31 Rs.4,92,908/ (market value) alongwith the documents filed by him Ex.PW1/10. This statement of holding of various shares is Annexure P6 and is as on 30.9.2005, i.e. after the expiry of the agreement period. It is a known fact that the price of shares keep on fluctuating and it is not known what was the worth of these shares during the relevant period. He has also mentioned in the statement of funds, Annexure P1 that he has gold ornaments worth Rs.5 Lacs but has not given any details or even the weight of ornaments and thus, this bald statement cannot be accepted in respect of the ornaments. In any case, the plaintiff has failed to prove that he had the capacity or the finances to pay a sum of Rs.27 Lacs to defendant No. 1 during the entire period from 05.8.2004 to 04.8.2005 or even at the time of filing of the suit. As already observed herein above, though he proposed to obtain home loan but took no steps for even applying for it during the entire period of one year nor made any efforts to apply for withdrawal of his provident fund or from the PPF account. Though the plaintiff alleged that he could not apply for home loan or provident fund because defendant No. 1 failed to provide documents, but it is a known fact that for a government employee or an employee of a public sector undertaking, approval of home loan is not cumbersome. It was at least expected from the plaintiff to have taken some tangible steps or should have made efforts to apply for the same.
52. Ld. Counsel for the plaintiff argued that it is not necessary that the plaintiff should have funds available with him and that his capacity to pay was sufficient and for that he had various plans. However, as is clear from the above discussion , the plaintiff neither had the funds available with him nor the capacity to pay the balance amount nor did Civil Suit No. 3147/2016 23 of 31 any overt act to materialize his various plans. Thus, the only conclusion which can be drawn is that he might be willing to perform his part of the contract but was not ready to perform it, that is to say, he was not having capacity to pay the consideration price. In order to succeed in a suit for specific performance, both factors are required to be fulfilled and if the plaintiff fails to prove anyone of it, his suit would fail.
53. It was next argued by Ld. Counsel for the plaintiff that the bonafides of the plaintiff are reflected from the fact that he had taken prompt actions against defendant No. 1 after the latter terminated the agreement on 24.8.2005. He pointed out that the plaintiff wrote back to the defendant on 31.8.2005 calling upon him to execute the agreement and when the defendant refused to receive his letter, he immediately filed the police complaint and then filed the present suit in 09.11.2005, i.e. after about three months of the expiry of the agreement. I again fail to agree with these contentions since the plaintiff has miserably failed to prove his capacity and readiness to perform his part of the contract by not only failing to prove that he had sufficient funds but also by not taking any steps for obtaining the requisite permission from the Society on behalf of defendant No. 1 vide letter Ex.P2 dt. 05.8.2004. There is nothing on record to show that he had made any efforts to purchase the stamp papers to register the sale deed or had ever informed defendant No. 1 that he had sufficient funds for paying the balance amount or called upon him to execute the sale deed. The Ld. Counsel for the plaintiff argued that the defendant never notified the plaintiff in advance within reasonable time about his availability for execution of the sale deed so that the plaintiff could have arranged the finances. I disagree with the Civil Suit No. 3147/2016 24 of 31 contention since under Section 16(c) of the Specific Relief Act, the onus is on the plaintiff to prove his "readiness" and "willingness" and therefore, it was the plaintiff who was required to intimate to the defendant that he was ready with the finances and to call upon him to execute the sale deed.
54. Though the acts of the plaintiff of having written letter dt. 31.8.2005, filing of the police complaint and the suit may show his willingness and eagerness to get the agreement executed but there is another hidden aspect which is reflected from the peculiar facts of the case. The plaintiff was already residing in the same very Society in another rented flat and was thus, based in Delhi. He was well aware that defendant No. 1 was a resident of Hyderabad and was away on job to Namibia and defendants No. 2 and 3 were permanently residing in USA. Thus, there was no one to pursue the case on behalf of the defendants. It was nothing but a desperate attempt on part of the plaintiff to bow the defendant and to agree him to his terms and conditions and buy time for making the payment at his whims or in other words, just to hold on the property. I thus, fail to appreciate the bonafides of the plaintiff in the present case. Hence, for the foregoing reasons, Issue No. 1 is decided against the plaintiff.
ISSUE No. 2 :
55. It is a matter of record that defendant No. 1 terminated the contract vide his letter dt. 24.8.2005 and this fact has been admitted by both the parties. The question is whether the defendant validly terminated the contract. The plea raised on behalf of the defendant had been that Civil Suit No. 3147/2016 25 of 31 since the plaintiff failed to perform his part of contract within the time frame fixed in the agreement, the defendant had the right to terminate the contract. On the contrary, Ld. Counsel for the plaintiff submitted that there was no timeline in the contract and therefore, time was not an essence and as such the defendant could not have terminated the contract.
It was also argued on behalf of the defendant that the present suit is not maintainable as it is based on a terminated contract, irrespective of the fact whether it was rightly or wrongly terminated, without seeking any declaration that the termination was illegal.
56. In respect of the last contention, Ld. Counsel for the plaintiff relied upon the judgment in A. Kanthamani Vs. Mrs. Nasreen Ahmed AIR 2017 SC 1236, wherein it has been held that "Mere fact that the plaintiff did not seek declaration that termination of agreement is bad, cannot be a ground to dismiss the suit as not maintainable". Hence, this contention of Ld. Counsel for the plaintiff is unacceptable.
57. Though no issue was framed regarding the time as an essence of the contract but since this fact was argued at length by both the Ld. Counsels and is always an integral part of the contract in suit for specific performance, requires discussion .
58. It is a settled proposition of law that in cases of contract for sale of immovable properties, time is not an essence unless expressly stipulated at the time of contract. The judgment delivered in DC Khosla's case (supra) and Chand Rani's case (supra) maybe referred to in this respect. However, in the latter judgment in Chand Rani's case, the Court held that "even if it is not of the essence of contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (i) Civil Suit No. 3147/2016 26 of 31 from the express terms of the contract;(ii) from the nature of the property; and (iii) from the surrounding circumstances, for example, the object of making the contract. In that case, the word 'only' was used in the agreement to qualify the amount and the period of payment and thus, it was held that time was an essence.
59. In DC Khosla's case (supra), the facts as discussed, revealed that it was the defendant who performed his part of the contract much after the expiry of the agreement period and thus, it was held that time was not an essence.
60. However, the facts of each and every case and the language of the agreement has to be seen to conclude whether time is an essence or not. In this particular case, the relevant clause of the agreement, i.e. Clause (2) is reproduced here under :
2. The balance amount of Rs. 27,00,000/ (Rupees Twenty Seven Lacs only) will be paid by the second party to the first party at the time of registration of sale deed, i.e. on or before 180 days or at the most within one year from the date of agreement".
61. Thus, according to this Clause, the sale deed was required to be registered within 180 days of the execution of agreement to sell, which period could have been extended to one year at the most. The word 'or at the most within one year from the date of agreement' assume great importance and shows the intention of the parties that it was the maximum outer limit for the execution of the sale deed. Thus, the time was an essence in the present contract.
62. In the judgment relied upon by the plaintiff in Chand Rani's case (supra), it has been held that :
"Intention to make time of the essence, if expressed in Civil Suit No. 3147/2016 27 of 31 writing must be in language which is unmistakable".
63. In my opinion, the dicta of this judgment has been followed in the present case as the language, referred to above, of the agreement is unmistakable and expressly reduced in writing, making time an essence of executing the contract.
64. Ld. Counsel for the defendant has also placed reliance on the judgment in Saradamani Kandappan Vs. S. Rajlakshmi AIR 2011 SC 3234. The Hon'ble Court while delving upon the question of time being an essence in contracts for immovable properties relied upon various previous pronouncements including that of Chand Rani (supra) and observed as under :
"24. The principle that time is not of essence of contracts relating to immovable properties took shape in an era when market value of immovable properties were stable and did not undergo any marked change even over a few years (followed mechanically even when value ceased to be stable). As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed.......... This principle made sense during the first half of the 20th century, when there was comparatively very little inflation in India . The third quarter of the 20th century saw a very slow but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the 20 th 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.
25. The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the Civil Suit No. 3147/2016 28 of 31 relief for specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or nonperformance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, latches, breaches and 'nonreadiness'....... In these days of galloping increase in prices of immovable properties, to hold that a vendor who took an earnest money of say of 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 the 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 Rs. One Lac and received Rupees Ten Thousand in 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.
26. It is now well settled that laws, which may be reasonable and valid when made, can , with passage of time and consequential change in circumstances, become arbitrary and unreasonable".
65. The Court also placed reliance on the judgment in KS Vidyanadan & ors. Vs. Vairavan (1997) 3 SCC 1, wherein almost similar observations were made and it was suggested that :
"(i) 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) Courts will apply greater scrutiny and strictness when considering whether the purchaser was 'ready and willing' to perform his part of the contract".
Civil Suit No. 3147/2016 29 of 31
66. Thus, in light of this judgment read with Clause (2) of the Agreement, it becomes abundantly clear that time was an essence for executing the agreement to sell which was expressed in unambiguous language and made mandatory in the agreement itself. Therefore, it was incumbent for the plaintiff to adhere to the time frame as stipulated in the agreement and to show his 'readiness and willingness' to perform his part of the contract within the stipulated period, which he failed to do. Hence, the defendant No. 1 was well within his rights to terminate the agreement to sell, which he did by serving a notice/letter upon the plaintiff dt.
24.8.2005 Ex.PW1/8.
67. In this regard, reference can also be made to Section 55 of the Indian Contract Act, 1872 which provides as under :
"When a party to a contract promises to do a certain thing at or before a specific time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, become voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract".
68. It has already been held that in the present case, time was an essence and therefore, the defendant was well within his legal rights in view of Section 55 of the Indian Contract Act to determine or terminate the contract. Hence, the contract was validly terminated by defendant No.
1. This issue is accordingly decided in favour of the defendants.
ISSUES No. 3 and 4 :
69. In view of the findings on Issues No. 1 and 2 above, it is clear that the plaintiff is not entitled either for a decree for specific Civil Suit No. 3147/2016 30 of 31 performance or for a decree of permanent injunction as claimed by him in the present suit and therefore, these issues are decided against the plaintiff.
ISSUE No. 5/Relief :
70. Clause (9) of the Agreement Ex.P1, provides as under :
"That if the second party fails to make the balance payment within above mentioned stipulated period, the advance amount paid by him will be forfeited and if the first party is unable to execute the said deal in favour of the second party, he will be liable to pay double of the advance amount to the second party".
71. Since it has been held that the plaintiff failed to pay the balance amount to the defendants within the stipulated period, therefore, in terms of Clause (9) of the Agreement Ex.P1, the amount of Rs.2 Lacs paid to the defendant No. 1 as advance money, would stand forfeited in favour of the defendant No. 1.
72. For the foregoing reasons and particularly on the findings returned while deciding Issues No. 1 and 2 above, the plaintiff is not entitled for any relief as prayed for. Accordingly, suit of the plaintiff stands dismissed. Costs of the suit are also awarded to the defendants.
Decree Sheet be prepared accordingly. File be consigned to
Record Room. Digitally signed by
ANNOUNCED IN OPEN COURT SANJAY SANJAY SHARMA
Location: Delhi
ON the 22nd day of December 2017 SHARMA Date: 2017.12.23
13:07:36 +0530
(SANJAY SHARMAI)
Addl. District Judge02 (East)
Karkardooma Courts, Delhi
Civil Suit No. 3147/2016 31 of 31