Bangalore District Court
Mr.Raghavan Rajagopalan vs Mr. M.V.Ashok on 27 September, 2022
KABC010099132007
IN THE COURT OF THE XI ADDL. CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY (CCH-8)
PRESENT
SRI SANTHOSHKUMAR SHETTY N., B.Com., LL.M.
XI Addl. City Civil & Sessions Judge,
Bengaluru City.
DATED THIS THE 27 th DAY OF SEPTEMBER, 2022
O.S.No.1 402/2007
Plaintiff:- Mr.Raghavan Rajagopalan,
S/o.K.Rajagopalan,
Aged about 45 years,
R/a B-1, Rukmini Nilayam,
A193, 9th Main, 2nd Cross,
Annanagar, Chennai-40.
(In person)
Vs.
Defendants:- 1. Mr. M.V.Ashok,
S/o.late Venkatesh,
Major by Age,
No.A-302, Brigade Majestic,
No.25, 1st Main Road,
Kavikalidasa Road,
2 O.S.No.1402/2007
Gandhinagar, Bangalore.
2. M/s.Brigade Constructions (P) Ltd.,
The same merged with
M/s.Brigade Enterprises(P) Ltd.,
Brigade Towers, No.135,
Brigade Road,
Bangalore-25.
Represented by its Managing Director.
3. Mr.M.Nagendra,
S/o M.Mallaiah,
Major by Age,
R/a No.823,
18th Cross Road,
BSK 2nd Stage,
Bangalore-560 070.
(D1 & D2 by Adv. Sri. V.Srinivas Raghavan
D3 - Exparte)
Date of institution of the suit : 17.02.2007
Nature of the suit : Specific Performance of
Contract
Date of commencement of : 04.06.2012
Recording of the evidence
Date on which the Judgment : 27.09.2022
was pronounced
Total Duration : Years Months Days
15 07 10
XI ADDL., CITY CIVIL & SESSIONS JUDGE,
BENGALURU CITY.
3 O.S.No.1402/2007
JUDGMENT
This is a suit filed by the plaintiff for the relief of specific performance of contract to direct the defendants to execute the Regular Sale Deed in his favour as per the Letters of Allotment and for permanent injunction to restrain the defendants from alienating, encumbering or creating charge in respect of schedule "B" to "D" properties or in the alternative, for refund of sale consideration received by the defendants with interest at the rate of 24% per annum from the date of Agreement till realisation and for the cost of suit.
2. The brief facts of the case of the plaintiff is that, the defendant No.1 is the owner of suit "A" schedule property. The defendant No.2 being the Developer has entered into a Development Agreement with defendant No.1 and formulated the scheme for construction of six residential buildings in suit "A" schedule property. Accordingly, the defendant No.2 had taken out several advertisements in various newspapers inviting the prospective purchasers to own a flat in their name in the new project of the defendants namely "Brigade Millennium-II". Subsequently, changed as "Brigade Gardenia". The defendant No.2 informed the plaintiff that, they are also the Power of Attorney Holder of defendant No.1 and sole Authority to take decision in selling the flats, which are going to be constructed in the suit "A" schedule property. On hearing from the defendants, the plaintiff showed interest in purchasing flats bearing Nos.101, 4 O.S.No.1402/2007 102 and 1211, each measuring built up area of 1050 square feet morefully described in suit "B" to "D" schedule properties. As per the agreed terms, the price of the suit "B" to "D" schedule properties was confirmed at Rs.13,34,550/- (Rupees Thirteen Lakhs Thirty Four Thousand Five Hundred and Fifty only) for each flat. The defendant No.2 also promised to complete the project within 1½ years from November 2002. After finalisation of the terms and conditions of each flats, the defendant No.2 had issued Letters of Allotment on 18.11.2003 and 29.10.2003, allotting suit "B" & "C" schedule properties and Letter of Allotment dated 28.10.2003, allotting suit "D" schedule property. At the time of issuance of Letter of Allotment, the defendant No.2 had informed the plaintiff that, they have taken the consent of defendant No.1. After finalising the cost of construction, the prevailing market value and the appreciation, the price of each of the flat had been finalised by the defendants and the statements in that behalf had also been displayed at the Office of defendant No.2. The defendant No.2 had shown the statement while negotiating to buy the suit "B" to "D" schedule properties. The defendant No.2 had confirmed that, the Letters of Allotment shall be treated as Agreement of Sale and same has to be acted upon by both of them. However, the defendant No.2 had informed and confirmed during the course of discussion that, if the project is delayed the payment schedule shall be relaxed and that the plaintiff is at liberty to make payments on the basis of the progress of the construction. On the aforesaid agreed terms and conditions, both the parties 5 O.S.No.1402/2007 have considered the Letters of Allotment as the contract. As per its terms and subsequent instructions, the plaintiff has paid in all a sum of Rs.8,13,570/- (Rupees Eight Lakhs Thirteen Thousand Five Hundred and Seventy only) to the defendant No.2 in respect of suit "B" schedule property. Likewise, he has released a sum of Rs.5,59,800/- (Rupees Five Lakhs Fifty Nine Thousand and Eight Hundred only) for suit "C" schedule property and a sum of Rs.5,39,000/- (Rupees Five Lakhs and Thirty Nine Thousand only) for suit "D" schedule property and they have acknowledged the receipt. In between the Letters of Allotment and the exchange of notices, there were couple of continuous lapses on the part of defendant No.2 in fulfilling their contractual obligations in completing the project. Though the payment schedule has been shown in the Letters of Allotment to be acted upon, the project came to be delayed by defendant No.2 and that the terms of payment has not at all strictly acted upon by both the plaintiff and defendant No.2. Inspite of the agreed period, as well as the extended period having lapsed, the defendant No.2 could not able to complete the project even after the expiry of more than four years. As the project was under progress, the real estate values have gone up in and around Bangalore. By looking at the appreciation, the defendants became too greedy and started showing their true colours by one way or the other imposing additional costs, introducing new additions etc., though the same were not in the terms of the Letters of Allotment. To name one, the defendant No.2 has called upon the plaintiff to pay the additional 6 O.S.No.1402/2007 amount for the purpose of park and open space maintenance though it was included in the project. In addition to the existing contract, the defendant No.2 had also demanded the plaintiff to pay the VAT and other additional amount which did not figure in any of the discussions and reduced the same in writing. When the plaintiff refused to comply the illegal demands, the defendant No.2 gave a go bye to the contractual obligations, sent Letter of Cancellation addressing in the name of the father of plaintiff by enclosing the demand drafts for part of the consideration paid by the plaintiff. The plaintiff after coming to know about the hasty one sided decision of the defendants, refused to accept the payment and the cancellation of contract. The demand drafts, which were sent to the plaintiff are with the defendant No.2. In the absence of consent for the cancellation, the Letter of Cancellation has no significance. Inspite of his repeated requests and showing his readiness and willingness in performing his part of the contract to pay the balance sale consideration and to get the Sale Deed registered either in his name or in any of his nominees, the defendants have totally ignored their contractual obligations. Hence left with no alternative, the plaintiff issued a legal notice on 22.09.2006, calling upon the defendants to notify the place and date of registration so as to complete the sale formalities. The notice sent under RPAD to defendant No.1 returned with endorsement as "not claimed" and the notice sent under Certificate of Posting was duly served on him. For which no reply has been caused nor comply with the demands made in the notice. The 7 O.S.No.1402/2007 notice sent to defendant No.2 was duly served. For which, an untenable reply dated 26.10.2006 had been sent through their advocate. All the sincere and honest efforts made by the plaintiff went invain. Hence he was constrained to file this suit.
3. In response to the suit summons, the defendants 1 and 2 appeared through their counsel and defendant No.2 filed the detailed written statement and same was adopted by defendant No.1. The defendant No.3 remained absent and placed him exparte. The defendant No.1 and 2 have taken contentions that, when the prelaunch offer was made, the project was still in the conceptual stage and to grab the imagination of market, price was kept below the then prevailing market rate. The plaintiff, being interested in the said project and to be benefited with the early bird offer made by the defendant No.2, had obtained the application form for allotment of flats. After perusing and accepting the terms and conditions set out in the said forms and the annexures thereto, the plaintiff singed and submitted those applications on 14 th and 18th November 2002, for allotment of three flats. The terms and conditions of allotment stipulated that, in the event of there being any delay on the part of the plaintiff in payment instalments beyond the dates indicated in the schedule of payments, the defendant No.2 would be entitled to cancel the allotment and would further have the right to retain 20% of the total consideration, with interest due, from the the amounts already remitted by the plaintiff. The terms and conditions further stipulated that, all the expenses towards electricity, water, telephone, cable, service charges and all 8 O.S.No.1402/2007 applicable taxes and levies including sale tax on works contract and other Government levies would be met by the plaintiff. It was further stipulated that, the delivery dates proposed was only indicative and subject to force majeure and that the defendant No.2 would not be responsible for any delays in obtaining the serivces, occasioned by factors beyond their control. The annexure to the said application forms made it clear that, club membership and maintenance deposits/charges were to be paid separately and the purchaser would have to bear all additional expenses including stamp duty, registration, legal fee, external infrastructure etc. Subject to condition, on 18.11.2003, the defendant No.2 issued the Allotment Letters for the suit schedule flats. In terms of the said schedule, payment of instalments was required to commence from October/November 2003 and was spread over 1½ years. The plaintiff was required to make payments of instalments towards each flat in accordance with the said schedule, failing which, the defendant No.2 would be entitled to interest at the rate of 15% per annum on the overdue amounts. Accepting the terms and conditions, the plaintiff made payments as under:
(i) One payment of Rs.2,25,000/- (Rupees Two Lakhs and Twenty Five Thousand only) through cheque dated 12.01.2004 No.655036 of Indian Overseas Bank, J.P.Nagar, Bangalore. As desired by the plaintiff, the same was apportioned at the rate of Rs.75,000/- for each of the flats booked, towards part of balance 9 O.S.No.1402/2007 15% EMD which was due in the month of October/November 2003.
(ii) A payment of Rs.4,49,800/- (Rupees Four Lakhs Forty Nine Thousand and Eight Hundred only) was made through cheque dated 25.05.2004 No.416015 of lCICI Bank, Bangalore to be apportioned towards balance of 15% EMD, instalments which was due for the month of January 2004 and March 2004 (portion) in respect of flat A-101. A further payment of Rs.2,53,770/-
(Rupees Two Lakhs Fifty Three Thousand Seven Hundred and Seventy only) was made through DD dated 06.08.2004 No.590573 of ICICI Bank, Bangalore, to be apportioned towards instalment due for the month of March 2004 (portion), May 2004 and July 2004 (portion). No more payments were received for the remaining instalments in respect of flat A-101, which were due in the month of July (portion), September, November of 2004, January and March of 2005.
(iii) A payment of Rs.4,49,800/- (Rupees Four Lakhs Forty Nine Thousand and Eight Hundred only) was made through cheque dated 25.05.2004 No.340000 of lCICI Bank, Bangalore to be apportioned towards balance of 15% EMD, instalments which was due for the month of November 2003, January 2004 and March 2004 (portion) in respect of flat A-102. No more payments were received for the remaining instalments in respect of flat A- 102, which were due in the month of March 2004 (portion), July, September, November of 2004 and January and March of 2005.
10 O.S.No.1402/2007(iv) a payment of Rs.4,25,000/- (Rupees Four Lakhs and Twenty Five Thousand only) was made through DD dated 14.03.2005 No.426400 of ICICI Bank, Bangalore, to be apportioned towards balance of 15% EMD, instalments which were due for the month of November 2003, January 2004 and March 2004 (portion) in respect of flat A-1211. No more payments were received for the remaining instalments in respect of flat A-1211, which were due in the month of March 2004 (portion), July, September, November of 2004 and January and March 2005.
4. From the very beginning, the plaintiff defaulted in paying the instalments inspite of regular reminders. On 06.03.2004 itself, the Agreement to Sell and Agreement to Build setting out all the terms and conditions for the purchase of suit schedule flats were sent to the plaintiff. These are not merely formal documents, but set out the terms and conditions of the contract between the parties in detail. However, the plaintiff failed to sign and return the said Agreements. On 25.05.2004, the defendant No.2 received a letter dated 14.05.2004 from the plaintiff, wherein it was alleged that, the project was delayed beyond the alleged original schedule of March 2004, that the size and scope of the project had been changed. The defendant No.2 replied to the said letter on 01.06.2004 addressing the various concerns raised by the plaintiff. As the payments were not made as on due dates, the defendant No.2 was forced to apply the interest at the rate of 15% per annum from due dates. As the plaintiff had refused to sign the Agreements, there is no binding, enforceable contract between the 11 O.S.No.1402/2007 parties. As a result of plaintiff's refusal to sign the said Agreements, the defendant No.2 was fully entitled to cancel the allotment. As such, the present suit for specific performance of contract and the plaintiff's demand that Sale Deeds in respect of the schedule flats be executed in his favour, are without basis. Further, of the three suit schedule flats, the defendant No.2 has already sold the flat referred in suit "D" schedule property in favour of defendant No.3 through a Registered Sale Deed dated 15.12.2006. Hence, amongst other grounds prayed for dismissal of the suit with exemplary costs.
5. On the basis of the pleadings of the parties, my predecessor-in-office has framed the following issues for determination:-
ISSUES
1. Whether the plaintiff proves that the Letter of Allotment dated 17.11.2002 is the contract and he is entitled for the Specific Performance?
2. Whether the plaintiff proves that for the schedule property flats he has paid the advance sale consideration to the defendants No.1 & 2?
3. Whether the plaintiff proves that he has always ready and willing to perform his part of contract?
4. Whether the defendants No.1 & 2 prove that the Letter of Allotment dated 17.11.2002 has been cancelled?
5. Whether the defendants No.1 & 2 prove that the Sale Deed executed by them in the name of the 3 rd 12 O.S.No.1402/2007 defendant is valid during subsistence of the contract?
6. What decree or order?
6. After settlement of issues, the plaintiff alone has entered into the witness box as PW-1 and Ex.P.1 to Ex.P.37 were marked through him and closed his side. On behalf of the defendants No.1 and 2, the Senior Deputy General Manager-Sales of defendant No.2 has entered into the witness box as DW-1 and Ex.D.1 to Ex.D.18 were marked through him and closed their side.
7. As the learned counsel appeared for plaintiff retired from the case, the plaintiff himself further prosecuting the matter and files written arguments. Heard the arguments of the learned counsel for the defendants No.1 and 2.
8. My findings on the above issues are as under:-
Issue No.1: In the negative.
Issue No.2: In the affirmative.
Issue No.3: In the negative.
Issue No.4: In the affirmative.
Issue No.5: In the affirmative.
Issue No.6: As per final order
for the following:
REASONS
9. Issues No.1 to 5:- Since all these Issues are interconnected, taken up together for discussion to avoid 13 O.S.No.1402/2007 repetition. Before looking to the points in controversy, first of all, it is necessary to notice some of the undisputed facts. The defendant No.1 is the owner of landed property referred in plaint "A" schedule. There was Joint Development Agreement between the defendants No.1 and 2 and thereby the defendant No.2 was authorised to construct the residential apartments in plaint "A" schedule property. The plaintiff came to know the proposed construction of defendant No.2, approached the defendant No.2 and expressed his desire to purchase three flats, morefully described in the plaint "B" to "D" schedule. Responding to the Application of the plaintiff, the defendant No.2 issued three separate Letters of Allotment in favour of plaintiff with respect to plaint "B" to "D" schedule flats.
10. According to the plaintiff, it was agreed to sell three flats in his favour for Rs.13,34,550/- (Rupees Thirteen Lakhs Thirty Four Thousand Five Hundred and Fifty only) each. But the defendant No.2 failed to complete the project within 1½ years as promised by it and also changed his version and claiming more money from him than what was agreed between them. Since it is contrary to the contract arrived between them, left with no alternative, the plaintiff has instituted this suit. In his examination- in-chief, PW-1 has reiterated the averments made in plaint.
11. The defendant No.2 along with defendant No.1 have taken their common defence that, as per the terms and conditions of Letters of Allotment, even if there was any delay in paying the 14 O.S.No.1402/2007 instalments, the plaintiff is liable to pay interest on delayed payments and in case of cancellation of allotment, the defendant No.2 is entitled to retain 20% of the total consideration. As the plaintiff failed to pay the instalments in terms of the conditions stipulated therein and he also refused to bear the expenses towards electricity, water and other services and also refused to sign the Sale Agreement and refused to pay VAT and other charges, the defendant No.2 was constrained to cancel the Letters of Allotment. Thereafter deducting 20% in the said amount, they have returned the sum of Rs.11,07,640/- (Rupees Eleven Lakhs Seven Thousand Six Hundred and Forty only) by way of demand drafts drawn on Corporation Bank. But the plaintiff refused to receive the amount refunded in his favour by way of demand drafts and filed this false suit against the defendants No.1 to 3 with an ulterior motive. Hence the plaintiff is not entitled for any relief as prayed for. In his examination-in-chief, DW-1 has reiterated the defence set by the defendants No.1 and 2.
12. The plaintiff prosecuting the matter on his own. In his written arguments, the plaintiff has reiterated the points set down in the plaint. Regarding Issue No.1, he has much relied on certain admissions given by DW-1 in the course of cross-examination and the documents marked through him at Ex.P.2 to P.4 i.e., Letters of Allotment in respect of plaint "B" to "D" schedule properties. Regarding Issue No.2, he has relied on Ex.P.6 to P.16 i.e., Receipts issued by defendant No.2 for having received the payments, Ex.P.35 & P.36 i.e., Sanctioned Plan and License 15 O.S.No.1402/2007 issued by BDA. Further he relied on certain admissions given by DW-1 in the course of his cross-examination. Regarding Issue No.3, the plaintiff has relied on Ex.P.31 & P.32. Further, he has canvassed before the court that, in view of Ex.P.2 to P.4, as well as Ex.D.1 to D.3, there is no scope to cancel the allotment. As such, the cancel one made by defendant No.2 and alienation of plaint "D" schedule flat in favour of defendant No.3 are contrary to the terms of contract. From the beginning itself, the specific case of the plaintiff is that, the Letters of Allotment themselves are the Agreements. In support of the said contention, he relied on the decision of Delhi High Court, in the case of Shikha Birla Vs. Ambience Developer Pvt. Ltd., decided on 20.12.2008 in CS(OS) No.50/2008. At para No.34 of the said decision, it was held as under:
"It is not a case where the parties were entering into a temporary understanding, which may or may not fructify in a binding bargain and execution of flat / Commercial Space Buyers Agreement was a condition precedent for creating permanent obligations. A concluded contract therefore had come into existence. The letters therefore cannot be regarded as an understanding which do not create an enforceable agreement in law but only an understanding between the parties to enter into an enforceable agreement in future."
13. Further, the plaintiff relied on two orders, which were passed by Maharasthra Real Estate Regulatory Authority, Mumbai, in the case of Nikhil Chopra Vs. Dilpesgh Laxman Bhagtani - JVPD properties Pvt. Ltd. (Serenity - Bldg. - 1) 16 O.S.No.1402/2007 and Mr.Sunil Devnani Vs. M/s.Geopreneur Spire Realty and another. In one of the proceedings, the Authority passed an order directing the respondent therein to refund the earnest money. In another proceeding, the Authority has directed the respondent to execute the Regular Registered Document in favour of proposed buyer.
14. Refuting each and every contentions taken by the plaintiff, the learned counsel for the defendants No.1 and 2 has vehemently argued that, this suit is based on mere Letters of Allotment. In the absence of any Agreement, the suit for specific performance of contract is not maintainable. Further argued that, even though defendant No.3 was arrayed as party, no relief being claimed against him, this suit is not maintainable. As per the Condition No.2 stipulated in the Application For Allotment, the defendant No.2 has got right to deduct 20% in total consideration, in case of cancellation of allotment. Since the plaintiff was the signatory to Ex.D.1, the terms and conditions incorporated therein are binding on him.
15. The para No.10 of the plaint is with respect to the cause of action. Relying much on the same, the learned counsel for defendants No.1 and 2 argued that, the contention taken therein itself is sufficient to hold that, the suit is barred by limitation. In page No.7 of cross-examination PW-1 has admitted that, his father being his GPA Holder put his signature on the prescribed application and he has not produced the terms and conditions 17 O.S.No.1402/2007 incorporated therein. He has further admitted that, the defendants No.1 and 2 gave payment schedule and as per said schedule, it was mandatory to make payments as per time schedule. Further admitted that, there was delay in making payments. Relying much on said admissions, it was argued that, as there were latches on the part of the plaintiff, he is not entitled for any relief as prayed for. Further relying on Ex.P.7 it was argued that, the plaintiff himself has admitted his financial incapacity in paying the balance sale consideration. On that score also, the plaintiff is not entitled for any relief as prayed for. In support of said arguments, he relied on the following decisions:
1. 2022 SCC OnLine SC 840; U.N.Krishnamurthy (Since deceased) through LRs Vs. A.M.Krishnamurthy.
2. (2018)15 SCC 80; P.Meenakshisundaram Vs. P.Vijayakumar and another.
3. (1996) 4 SCC 526; His Holiness Acharya Swami Ganesh Dassji Vs. Sita Ram Thapar.
16. The other point urged by the learned counsel for defendants No.1 and 2 is that, the Letters of Allotment is not a contract. Since there is no concluded Agreement, the suit is not maintainable. In support of said contention, he relied on the following decisions:
1. (2013) 12 SCC 776; Hansa V.Gandhi Vs. Deep Shankar Roy and others.18 O.S.No.1402/2007
2. (1990) 3 SCC1; Mayawanti Vs. Kaushalya Devi.
3. (2009) 4 SCC 369; Chaman Lan Singhal Vs. Haryana Urban Development Authority and others.
4. AIR 2010 SC 387; Greater Mohali Area Development Authority and others Vs. Manju Jain and others.
17. The learned counsel for defendants No.1 and 2 further argued that, as the alleged understanding came into existence much prior to amendment of the Specific Relief Act, the unamended Act is applicable to the case on hand. As per Section 20 of the Act, the relief one claimed in this suit is discretionary. In support of the said contention, he relied on the Division Bench decision of our Hon'ble High Court reported in ILR 2021 KAR 3212; M.Suresh Vs. Mahadevamma and others. On the said point, I have gone the recent decision of the Apex Court in the case of Katta Sujatha Reddy and another v. Siddamsetty Infra Project, reported in 2022 SCC OnLine SC 1079 . In paras No.53 and 56 of the said decision, it was held as under:
"When a substantive law is brought by amendment, there is no assumption that the same ought to be given retrospective effect. We do not hesitation in holding that, the 2018 amendment to the Specific Relief Act is a prospective and cannot apply to those transactions that took place prior to its coming into force."
18. Apart from seeking the relief of specific performance of contract, the plaintiff also sought for the relief of injunction, to 19 O.S.No.1402/2007 restrain the defendants or anybody claiming through them from alienating the suit "B" to "D" schedule properties. The learned counsel for defendants No.1 and 2 has argued that, injunction of that nature cannot be granted to, when the plaintiff failed to establish his right, title or interest over the property in question. To substantiate his arguments, he placed reliance on the following decisions of Apex Court:
1. Kayalulla Parambath Moidu Haji Vs. Namboodiyil Vinodan; Civil Appeal Nos.5575-5576/2021.
2. T.V.Ramakrishna Reddy Vs. M.Mallappa and another; Civil Appeal Nos.5577/2021.
19. Keeping in mind, the law laid down in the aforesaid decisions relied by both plaintiff and the learned counsel for defendants Nos.1 and 2, I have carefully gone through the contentions taken by the plaintiff and the defence set up by defendants No.1 and 2, as well as the evidence before the court. According to the plaintiff, Letters of Allotment themselves are the contract entered into between him and defendant No.2. As such, he is entitled for the relief of specific performance of contract. After going through the contents of documents and evidence given by both PW-1 and DW-1, I have carefully gone through the law laid down by the Hon'ble Supreme Court in the case of Hansa V.Gandhi Vs. Deep Shankar Roy and others cited by the learned counsel for defendants No.1 and 2. At para No.18 and 19, it was held as under:
20 O.S.No.1402/2007"It is not in dispute that the letter of intent was issued by the Developer to the plaintiffs wherein certain conditions had been incorporated and upon fulfillment of those conditions, agreements for sale of the flats were to be executed. Upon perusal of the letter of intent closely, one would find that certain conditions had been incorporated in the letter of intent. The said conditions clearly imposed a duty on the part of the intended purchasers to make payment of all the installments payable in respect of the purchase price of the flat. It is also not in dispute that it was open to the Developer to vary the price or the area to be covered by a flat in certain cases. It is not in dispute that the Developer had raised the price because of the delay caused on account of the litigation faced by the Society. On account of the delay caused in construction of the flats, the cost had gone up and therefore, the Developer had asked for a rise in the price which was approved by the majority of the intended purchasers of the flats. Accordingly, all the other purchasers had started paying the increased price of installments but the plaintiffs had refused to the same and in fact they had stopped paying the installments which were becoming due and payable after the price had been increased. It is also worth noticing that the plaintiffs did not make payment even as per the rate prescribed under the letter of intent and the terms and conditions agreed upon by them with the Developer.
It is a fact that the plaintiffs had not entered into any formal agreement with regard to the purchase of the flats with the Developer. The mere letter of intent, which was subject to several conditions, would not give any right to the plaintiffs for purchase of the flats in question till all the conditions incorporated in the letter of intent were fulfilled by the plaintiffs i.e. the proposed purchasers. It is also a fact that all the 21 O.S.No.1402/2007 conditions, which were to be fulfilled, had not been fulfilled by the plaintiffs.
20. Looking to the facts and circumstances of this case, the law laid down by the Apex Court in the case of Mayawanti Vs. Kaushalya Devi cited above, is also relevant for consideration. In para No.8 of the said decision, it was held as under:
"The jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. Where a valid and enforceable contract has not been made, the court will not make a contract for them. Specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable. The discretion of the court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract. It is, therefore, necessary first to see whether there has been a valid and enforceable contract and then to see the nature and obligation arising out of it. The con- tract being the foundation of the obligation the order of specific performance is to enforce that obligation."
21. Ex.P.2 to P4 relied by the plaintiff are only Letters of Allotment, wherein it is clear that, the plaintiff has paid a sum of Rs.25,000/- (Rupees Twenty Five Thousand only) each towards EMD expressing his desire to purchase flats. The Letters of Allotment contains only the payment schedule. Except that, the terms and conditions are not forthcoming in those Letters. It is pertinent to note that, before cancelling the allotment, the defendant No.2 sent Draft Sale Agreements to the plaintiff for approval. But in 22 O.S.No.1402/2007 the meantime, the dispute arose between the plaintiff and defendant No.2 regarding payments schedule. The defendant No.2 insisted the plaintiff to pay Rs.10,000/- (Rupees Ten Thousand only) well in advance, regarding club membership fee and also insisted him to pay Rs.68,666/- (Rupees Sixty Eight Thousand Six Hundred and Sixty Six only) towards VAT for the month of June 2005, Rs.26,415/- (Rupees Twenty Six Thousand Four Hundred and Fifteen only) for Service Tax for the month of June 2005 and sum of Rs.84,000/- (Rupees Eighty Four Thousand only) towards Electricity and Water Charges, Rs.12,000/- (Rupees Twelve Thousand only) towards Property Assessment & Khatha Transfer Charges, Rs.75,000/- (Rupees Seventy Five Thousand only) towards Stamp Duty & Registration Charges and Rs.12,000/- (Rupees Twelve Thousand only) towards Legal Fee. Denying his obligation to make such payments, the plaintiff did not give his consent to the Draft Agreement and thereafter, the defendant No.2 has cancelled the allotment and deducting the sum of Rs.2,66,910/- (Rupees Two Lakhs Sixty Six Thousand Nine Hundred and Ten only) each in respect of three flats and refunded the sum of Rs.11,07,640/- (Rupees Eleven Lakhs Seven Thousand Six Hundred and Forty only) in total to the plaintiff by way of demand drafts. Hence it is clear that, the Sale Agreements never executed between the plaintiff and defendants. Hence in view of law laid down in the aforesaid decisions, no reason to hold that the Letters of Allotment themselves are the contract.
23 O.S.No.1402/200722. As discussed earlier, the payment of Rs.19,08,370/- (Rupees Nineteen Lakhs Eight Thousand Three Hundred and Seventy only) in respect to suit "B" to "D" schedule properties in favour of defendant No.2 are supported by Receipts, marked at Ex.P.6 to P.16. However the contention of defendant No.2 is that, in Ex.D.1, the terms and conditions have been specifically mentioned. The plaintiff put his signature on the said Application Form accepting the conditions stipulated therein. Wherein it is clear that, the Developer has right deduct 20% of the total consideration and interest due and the balance sale consideration should be refunded to the purchaser. Accordingly, deducting the sum of Rs.8,00,730/- (Rupees Eight Lakhs Seven Hundred and Thirty only), the defendant No.2 issued the demand draft for Rs.11,07,640/- (Rupees Eleven Lakhs Seven Thousand Six Hundred and Forty only). But the defence set up by the defendants No.1 and 2 is that, neither the Application For Allotment nor the Letters of Allotment are the concluded contract. As such, the plaintiff cannot maintain a suit for the relief of specific performance of contract. As the defendant No.2 itself is contending that there is no valid contract, it cannot strictly rely on conditions incorporated therein. As contended by the defendants, Ex.D.1 is only an Application for Allotment and it contains the signature of plaintiff alone. Hence there are reasons to believe that, it is not a concluded contract. As such, the defendant No.2 while cancelling the allotment has to refund the entire amount paid by the plaintiff. Since the defendant No.2 himself is not relying on Ex.D.1 as a concluded contract, it is unreasonable on his part in 24 O.S.No.1402/2007 deducting the sum of Rs.8,00,730/- (Rupees Eight Lakhs Seven Hundred and Thirty only) in the amount paid by the plaintiff. As such, the observation made by the Hon'ble Apex Court in the case of Hansa V.Gandhi Vs. Deep Shankar Roy and others cited above, is squarely applicable to the case on hand. In the reported decision, the Trial Court by holding, the Letter of Intent as the contract, directed the Developer to execute the Sale Deed in accordance with the terms stipulated therein. Feeling aggrieved and dissatisfied with the said order, the Developer approached the Hon'ble High Court. Wherein the judgment and decree of the Trial Court was set aside holding that, the plaintiff therein would be entitled to get refund of the amount paid by them to the Developer with interest at the rate of 9% per annum from the date of Letter of Termination sent by the Developer to the plaintiff till date of payment of said amount. Against which, the plaintiffs therein have preferred the Civil Appeal on the file of Hon'ble Supreme Court. But the appeal came to be dismissed with modification that, the plaintiffs were entitled for interest at the rate of 12% per annum.
23. The other contention taken by the plaintiff is that, the Letters of Allotment themselves are the contract and he was always ready and willing to pay the balance sale consideration. But looking to the contention taken by the defendant No.2 and the documents relied by him, there are reasons to believe that, the plaintiff did not make payments in periodical instalments, as referred in the payment schedule. But the explanation offered by him is that, as the defendant No.2 did not finish the construction work within 1½ years, 25 O.S.No.1402/2007 it was agreed between them that, the plaintiff need not follow time schedule. But the other contention taken by the plaintiff is that, as per agreed terms, the defendant No.2 is required to execute the Sale Deed for total consideration of Rs.13,34,550/- (Rupees Thirteen Lakhs Thirty Four Thousand Five Hundred and Fifty only) without insisting anything towards VAT and other expenses. It is needless to mention that, in each and every transaction, it is the duty of the purchaser to pay the tax as contemplated under law. One cannot evade tax and it is the bounden duty of every citizen to pay tax to the State Exchequer. This being the state of affair, refusing to pay the VAT cannot be accepted. Hence this court is of the opinion that, the refusal to pay VAT itself shows that, there is no justification in his contention that, he was every ready and willing to perform his part of the contract.
24. According to the plaintiff, the certain charges imposed by the defendant No.2 are contrary to the agreed terms. On perusal of correspondence taken place between the plaintiff and defendant No.2, it is clear that, the defendant No.2 insisting the plaintiff to pay Rs.10,000/- (Rupees Ten Thousand only) well in advance towards club membership fee. The subsequent correspondence made by defendant No.2 shows that, apart from club membership fee, the defendant No.2 insisted the plaintiff to pay Rs.17,873/- (Rupees Seventeen Lakhs Eight Hundred and Seventy Three only) towards Service Tax for the month of June , Rs.84,000/- (Rupees Eighty Four Thousand only) towards Electricity and Water Charges, Rs.12,000/- (Rupees Twelve Thousand only) towards Property Assessment & 26 O.S.No.1402/2007 Khatha Transfer Charges and Rs.1,224/- (Rupees One Thousand Two Hundred and Twenty Four only) towards Service Tax on KT & PA. The said fact is forthcoming in Ex.D.9 to D.11 and in Ex.P.24 to P.26. Ex.P.24 to P.26 makes it clear that, even the defendant No.2 insisted the plaintiff to pay Service Tax for the month of June 2005, they are intending to deliver the possession to the plaintiff only on 30.09.2005. That itself shows that, much prior to handing over the possession of the property, the defendant No.2 insisted the plaintiff to pay Service Tax and other charges, from the month of June 2005 itself. Looking to those documents, it can be said that, there is some force in the objection raised by the plaintiff. Hence he refused to accord consent to the Draft Sale Agreements and thereby the transaction was not materialised.
25. Even though the defendant No.3, the purchaser of plaint "D" schedule property was arrayed as party to this proceeding, no relief was claimed against him. Hence the suit against defendant No.3 is not maintainable. As plaint "D" schedule flat was sold to defendant No.3, same is not available for consideration. DW-1 in his evidence has admitted that, the flats referred in "B" and "C" schedule are not sold to anybody and available for alienation as on the date of his evidence. But looking to the over all facts and circumstances of the case it is crystal clear that, there is no consensus-ad-idem between the plaintiff and defendants. As the plaintiff is not ready to pay the VAT, there is occasion to this court to grant the relief of specific performance of contract in favour of the plaintiff. That apart, as discussed earlier, no reason to believe that, 27 O.S.No.1402/2007 Letters of Allotment themselves are the contract and it can be enforced in the court of law.
26. It is relevant to mention that, in order to show his readiness and willingness the plaintiff has deposited the sum of Rs.20,95,280/- (Rupees Twenty Lakhs Ninety Five Thousand Two Hundred and Eighty only) through cheque bearing No.76337 dated 29.05.2007. Thereafter the plaintiff changed his mind and filed an application for its withdrawal. Since the defendants No.1 and 2 resisted the said application, his claim for refund of said amount was rejected. Since this court is not going to grant the relief of specific performance of contract, the plaintiff is entitled to get back the said sum of money, which was deposited in the court. With these observations, Issues No.1 & 3 are answered in the negative and Issues No.2, 4 & 5 in the affirmative.
27. Issue No.6:- While answering the aforementioned issues, this court has come to the conclusion that, the Letters of Allotment issued by defendant No.2 in favour of plaintiff are not the concluded contract and relying on those documents, the plaintiff cannot seek the relief of specific performance of contract. This court has further held that, as the suit "D" schedule property was already alienated in favour of defendant No.3 and no relief claimed against defendant No.3, the suit of the plaintiff with respect to plaint "D" schedule property became infructuous. Further, for the reasons stated above, the relief of specific performance of contract cannot be granted in favour of plaintiff with respect to plaint "B" and "C"
28 O.S.No.1402/2007schedule properties. Looking to the facts and circumstances of the case and in the light of law laid down by the Hon'ble Supreme Court in the case of Hansa V.Gandhi Vs. Deep Shankar Roy and others, it is just and proper to hold that, the sum of Rs.8,00,730/- (Rupees Eight Lakhs Seven Hundred and Thirty only) deducted by defendant No.2 was arbitrary and against the principles of natural justice. According to the plaintiff, in all he paid the sum of Rs.19,13,170/- (Rupees Nineteen Lakhs Thirteen Thousand One Hundred and Seventy only) to defendant No.2. Ex.P.6 to P.16 are the Receipts relied by him. While considering them it is clear that, the plaintiff had paid in all the sum of Rs.19,08,370/- (Rupees Nineteen Lakhs Eight Thousand Three Hundred and Seventy only). Since there is no documentary evidence for the remaining sum, it can be held that, the plaintiff is entitled for Rs.19,08,370/- (Rupees Nineteen Lakhs Eight Thousand Three Hundred and Seventy only). Hence it is just and proper to direct the defendant No.2 to pay the sum of Rs.19,08,370/- (Rupees Nineteen Lakhs Eight Thousand Three Hundred and Seventy only) in favour of the plaintiff with interest at the rate of 10% per annum from the date of Letter of Cancellation (i.e., 15.02.2006) till realisation. Hence, I proceed to pass the following:
ORDER Suit of the plaintiff is partly decreed with cost as under:
The defendants No.1 and 2 are jointly and severally directed to pay the sum of Rs.19,08,370/- (Rupees Nineteen Lakhs Eight Thousand Three Hundred and Seventy only) with 29 O.S.No.1402/2007 interest thereon at the rate of 10% per annum from the date of Letter of Cancellation (i.e., 15.02.2006) till realisation.
Suit against defendant No.3 is hereby dismissed.
In view of refusal to grant the relief of specific performance of contract, the plaintiff is at liberty to withdraw the sum of Rs.20,95,280/- (Rupees Twenty Lakhs Ninety Five Thousand Two Hundred and Eighty only) deposited through cheque bearing No.76337 dated 29.05.2007 with interest accrued thereon, forthwith.
Draw decree accordingly.
(Dictated to the Judgment Writer, typed by her, the transcript thereof corrected and then pronounced by me, in the open court, this the 27th day of September, 2022) ( SANTHOSHKUMAR SHETTY N.) XI ADDL., CITY CIVIL & SESSIONS JUDGE BENGALURU CITY.
ANNEXURE List of witnesses examined for plaintiff:
PW.1 - Mr.Raghavan Rajagopalan
List of documents exhibited for plaintiff:
Ex.P.1 : Broacher
30 O.S.No.1402/2007
Ex.P.2 to 4 : Allotment Letters dated 17.11.2002
Ex.P.5 : Letter dated 17.11.2003
Ex.P.6 to 16 : Receipts
Ex.P.17 to 19 : Letters dated 03.04.2004 regarding
Progress of Project & Documentation
Ex.P.20 : Letter dated 11.04.2005 regarding
Demand Note & Progress of Project
& Documentation
Ex.P.21 & 22 : Letters dated 03.01.2005 regarding
Demand Note & Progress of Project
& Documentation
Ex.P.23 : Letter dated 13.06.2005 regarding
resolving of issues
Ex.P.24 to 26 : Letters dated 13.06.2005 regarding
Demand Note & Progress of Project
& Documentation
Ex.P.27 : Letter dated 09.12.2005
Ex.P.28 : Letter dated 25.02.2006
Ex.P.29 : Receipt
Ex.P.30 : Postal Acknowledgement
Ex.P.31 : Copy of Legal Notice dated
22.09.2006
Ex.P.32 : Reply Notice dated 26.10.2006
Ex.P.33 : UCP Receipt
Ex.P.34 : RPAD Cover
Ex.P.35 : Plan
Ex.P.36 : RTI Document
Ex.P.37 : RTI Document
List of witnesses examined for defendants :
DW.1 - Mr.Anees Khan
List of documents exhibited for defendants :
Ex.D.1 : Application for Allotment
Ex.D.2 : Application for Allotment
Ex.D.3 : Application for Allotment
Ex.D.4 : Authorisation Letter
31 O.S.No.1402/2007
Ex.D.5 & 6 : Office copies of Letters
dated 18.08.2003
Ex.D.7 : Letter dated 14.05.2004
Ex.D.8 : Office copy of Letter
dated 01.06.2004
Ex.D.9 & 10 : Office copies of Letters
dated 02.08.2005
Ex.D.11 to 13 : Office copies of Letters
dated 09.12.2005
Ex.D.14 to 16 : Original Letters dated 15.02.2006
Ex.D.17 : Office copy of Letter
dated 11.03.2006
Ex.D.18 : Certified copy of Sale Deed
dated 15.12.2006
XI ADDL., CITY CIVIL & SESSIONS JUDGE
BENGALURU CITY.