Delhi High Court
Ms. Rekha Nankani vs Mr. Kulwant Singh Sachdeva & Another on 18 December, 2008
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS)No.2629/1996
%18.12.2008 Date of decision:18.12.2008
MS. REKHA NANKANI ... Plaintiff
Through: Mr. Anil Airi, Advocate
Versus
MR. KULWANT SINGH SACHDEVA & ANOTHER ... Defendants
Through: Exparte
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? YES
2. To be referred to the reporter or not? YES
3. Whether the judgment should be reported
in the Digest? YES
RAJIV SAHAI ENDLAW, J.
1. The plaintiff has sued for specific performance of an agreement to sell dated 25th September, 1992 by the defendant No.1 in favour of the plaintiff with respect to property No. 77 Block B-2, Safdarjang Enclave, New Delhi ad-measuring 265 sq. yds, for total sale consideration of Rs.75 lac. The plaintiff claims to have paid advance sale consideration of Rs.23,51,000/- to the defendant No.1. The defendant No.2 Mrs. Shashi Garg was impleaded as a party to the suit on a application of the plaintiff under Order 1 Rule 10 r/w Order 6 Rule 17 of the CPC on the plea that the defendant No.1 had on 17 th October, 1996, after the agreement to sell with the plaintiff executed sale deed of the property in favour of the defendant No.2. CS(OS)No.2629/1996 Page 1 of 8
2. The defendant No.1 in spite of service of summons of the suit never appeared and was vide order dated 3rd November, 1998 proceeded against ex-parte and remains ex-parte. The defendant No.2 contested the suit by filing a written statement. It is inter-alia the case of the defendant No.2 that the mother of the defendant No.1 Smt. Kaushalya Devi had entered into an agreement dated 13 th June, 1986 to sell the property to the defendant No.2; the defendant No.1 had also confirmed and ratified the said agreement on 29th May, 1987; however the defendant No.1 and his mother failed to abide by the agreement leading to the institution of suit No.1989/1990 in this court by the defendant No.2 against the defendant No.1 and his mother for specific performance of the said agreement to sell; that in the said suit for specific performance, on 7th October, 1996 a compromise was arrived at whereunder the defendant No.1 agreed to honour the agreement to sell in favour of the defendant No.2 and which compromise was accepted by this court on 9th October, 1996 and in terms whereof the suit No.1989/1990 (Supra) was decreed. On the said pleadings of the defendant No.2 the following issues were framed on 5th September, 2000:-
1. Whether the plaintiff is entitled for decree of specific performance as prayed for in the suit? OPP
2. Whether plaintiff is ready and willing to perform his obligations under the Act? OPP
3. Whether defendant No.1 had agreed to sell property to defendant No.2 prior to agreement to sell dated 25.09.1992?
OPP CS(OS)No.2629/1996 Page 2 of 8
4. Whether the suit of the plaintiff is not maintainable in view of the decree dated 09.10.1996 in suit No.1989/90 and sale deed dated 17.10.1996? OPD
5. Relief.
3. The defendant No.2 also subsequently stopped appearing and was vide order dated 8th August, 2008 ordered to be proceeded against ex-parte. The plaintiff has led ex-parte evidence of her husband Mr. Moti Nankani, who has filed his affidavit by way of examination in chief as Exhibit PW1/A.
4. Section 19 (a)&(b) of the Specific Relief Act, 1963 provided as under:-
"19 Relief against parties and persons claiming under them by subsequent title - Except as otherwise provided by this chapter, specific performance of a contract may be enforced against -
a. either party thereto;
b. any other person claiming under him by a title arising subsequently to the contract, except transferee for value who has paid his money in good faith and without notice of the original contract"
5. It follows from the above that even though the defendant No.2 is not a party to the agreement of which specific performance is claimed by the plaintiff, if the title to the property in favour of the defendant No.2 has passed subsequent to the agreement to sell with the plaintiff, specific performance can be enforce against the defendant No.2 also. In the present case, it is the admitted position that the title has passed to the defendant No.2 vide sale deed dated 17th October, CS(OS)No.2629/1996 Page 3 of 8 2006 i.e. on a date subsequent to the agreement to sell dated 25 th September, 1992 by the defendant No.1 in favour of the plaintiff.
6. However, the matter does not rest at that. Though the title has been conveyed by the defendant No.1 to the defendant No.2 subsequent to the agreement to sell by the defendant No.1 in favour of the plaintiff, but such conveyance by the defendant No.1 in favour of defendant No.2 is in pursuance to an agreement to sell of a date prior to the agreement to sell by the defendant No.1in favour of the plaintiff.
7. Though, both the defendants are ex-parte but the defendant No.2 had placed before this court the certified copy of the order dated 9th October, 1996 in suit No. 1989/1990 of this court as well as the compromise application in that suit which was accepted in the order dated 9th October, 1996. This court cannot shut its eye to the said judicial record of this court itself. In fact, the order sheet of the present suit reveals that at one point of time the file of suit No.1989/1990 was called for in the present proceedings for perusal.
8. Lord Buckmaster speaking for a five judge bench in Mt. Fatima Bibi Vs. Saadat Ali AIR (1930) Privy Council 99 interpreting para materia provisions of Section 27 (b) of the old Specific Relief Act held that even though the title may be subsequent to the agreement to sell of which specific is claimed but if that title was in pursuance to an agreement of a date earlier to the date of the agreement of which CS(OS)No.2629/1996 Page 4 of 8 specific performance was claimed, then the plaintiff is not entitled to the relief of specific performance.
9. Ordinarily, specific performance can be ordered only against parties to the contract. However, Section 19 (b) (Supra) allows specific performance to be enforced against persons acquiring title subsequent to the date of the agreement on the principle of equity. It was felt that after entering into an agreement to sell the vendor was in a position of trust qua the purchaser and if conveys title to a 3 rd party, such third party takes such title subject to the agreement of its vendor. The principle was that a vendor could not convey more than what he himself has. If property was bound by the agreement of the owner/vendor, then merely because the vendor had transferred the property, the transferee will not acquire rights better than that of the vendor and will be subject to the liability of the vendor. The division bench in Sampat Ram Vs. Baboo Lal AIR (1955 ) Allahabad 24 held that the plaintiff can claim no equities against a subsequent title holder whose agreement was of a date prior to that of the plaintiff. I respectfully concur with the views of Lord Buckmaster and of the division bench of the Allahabad High Court and find the plaintiff in the present case not entitled to the relief of specific performance, against defendant No.2, agreement to sell in whose favour is of a date prior to that in favour of plaintiff. Section 19 (b) of the Specific Relief Act, 1963 has thus to be read to mean that even if title in favour of defendant is of a date subsequent to the date of agreement to sell of which specific performance is claimed, but if such title is relatable to an agreement to sell of a date prior to the date of the agreement of which specific performance is claimed, the relief will not be granted. CS(OS)No.2629/1996 Page 5 of 8
10. The plaintiff has also claimed the alternative relief of recovery of damages of Rs.75 lac with pendente lite and future interest against the defendant No.1 only. The plaintiff would naturally be not entitled to such relief against the defendant No.2.
11. In this regard, it has to be noticed that the plaintiff claims to have paid advance sale consideration of Rs.23,51,000/- to the defendant No.1. However, the plaintiff has proved receipt for payment of Rs.7,51,000/- only as Exhibit PW1/2; except for the bare statement of the witness of the plaintiff there is nothing else to show that the plaintiff has paid to defendant No.1 advance sale consideration of Rs.23,51,000/-. However, on the failure of the defendant No.1 to challenge the said statement of the witnesses of the plaintiff, the same is believed. The plaintiff would thus in any case be entitled to refund of the said sum of Rs.23,51,000/-. It is to be noticed that the plaintiff has not claimed such refund separately from the claim for damages of 75 lac.
12. The next question which arises is, whether the plaintiff is entitled to anything over and above Rs.23,51,000/- from the defendant No.1. The agreement to sell of the defendant No.1 in favour of the plaintiff itself records that the entire property was occupied, ground floor by Mr. Garg husband of the defendant No.2 and the first floor by one Mr. Banarjee, as tenants. At the time of agreement to sell by the defendant No.1 in favour of the plaintiff, the suit for specific performance filed by the defendant No.2 against the defendant No.1 was pending. The said suit was by none else than the wife of the tenant on the ground floor. The plaintiff in the plaint was described CS(OS)No.2629/1996 Page 6 of 8 as the resident of nearby colony of Green Park. The address of the husband of the plaintiff in the affidavit by way of examination in chief is of the same colony as where the suit property is situated. A bonafide purchaser of immovable property is ordinarily expected to make inquiries with respect to the property subject matter of intended purchase. In the present case, the defendant No.1 at the time of agreement to sell in favour of the plaintiff was not in possession of any portion of the property. The agreement to sell proceeds on the premise that Mr. Banerjee, tenant with respect to the first floor was likely to vacate shortly. A prudent purchaser is expected to satisfy himself/her self by visiting the property and speaking to the occupants, more so when the premise of the agreement was the imminent vacation of the property by one of the occupants. On such inquiries the plaintiff is bound to have come to know, if not knowing earlier, of the previous agreement to sell by the defendant No.1 in favour of defendant No.2 and the pending litigation. This fact, coupled with the manner in which the entire case has been conducted leads me to believe that the plaintiff at the time of entering into the agreement dated 25th September, 1992 with the defendant No.1 was in the know of the earlier agreement to sell and litigation with the defendant No.2. As aforesaid, though it is not the case that no receipts were given for advance consideration stated to have been paid in excess of Rs.7,51,000/-, but no such receipts have been proved; after the framing of issues on 5th September, 2000 no evidence whatsoever was led by the plaintiff for eight years; even at the time of institution of the suit, ex-parte orders were obtained first against the defendant No.1 and thereafter against defendant No.2 and which were subsequently vacated. An appeal preferred against the order dismissing application for interim relief was not pursued and CS(OS)No.2629/1996 Page 7 of 8 was dismissed in default. Keeping all these facts in mind I do not find the plaintiff entitled to anything more than, refund of Rs.23,51,000/-.
13. As far as the claim for pendente lite interest is concerned, again, the plaintiff having delayed the disposal of the suit is not found entitled to the same. However, the plaintiff shall be entitled to future interest at 10% per annum on the said sum of Rs.23,51,000/- w.e.f. 30 days of this judgment and in which time the defendant No.1 is expected to comply with the same.
14. Accordingly, the suit is decreed for recovery of Rs.23,51,000/- against the defendant No.1 only together with future interest at 10% per annum w.e.f. 30 days of the judgment. In the circumstances the parties are left to bear their own costs.
RAJIV SAHAI ENDLAW (JUDGE) December 18, 2008 PP CS(OS)No.2629/1996 Page 8 of 8