Delhi District Court
Shri Lajpat Rai Sharma ( Now Deceased) vs Shri Ram Prakash Gupta on 30 November, 2011
IN THE COURT OF SH. PITAMBER DUTT; ADJ (CENTRAL)17,DELHI
Suit No. 321/09/2001
Unique Case ID No. 02401C0461412002
Shri Lajpat Rai Sharma ( now deceased)
through his L.Rs.
(i) Satish Sharma
R/o 10-/A-8, Shakti Nagar,
Delhi
(ii) Sunil Sharma S/o Late Sh. Lajpat Rai Sharma
R/p 1/2-101, Sector 16, Rohini
Delhi .......Plaintiffs
Versus
1. Shri Ram Prakash Gupta
S/o Shri Shuji Ram
R/o 1956, Gali Neela Wali
Sita Ram Bazar
Delhi
2. Shri Deepak Gupta
S/o Shri Jai Kishan Gupta
R/o 1956, Gali Neela Wali
Sita Ram Bazar
Delhi
........Defendants
Date of Institution of Suit : 19.01.2001
Date when reserved for orders : 29.10.2011
Date of Decision : 30.11.2011
JUDGMENT
1 Vide this judgment I shall decide the suit for recession of agreement dated 11.06.1997 and 28.07.1997, declaration with consequential reliefs The brief facts necessitating in filing the present suit are given as under-:
2 That plaintiff is the owner of property no. 10-A/B, Shakti Nagar, Delhi consisting of ground floor, first floor and Barsati floor ( hereinafter called the 'suit property'). He became the owner of the suit property on the basis of the Suit no. 321/09/2001 Page 1/26 award passed by ld. Arbitrator. The said award was made rule of the court by the then Addl. District Judge, Delhi vide order dated 24.4.1981. The plaintiff vide agreement to sell dated 11.06.1997 agreed to sell the suit property to the defendant for a total sale consideration of Rs. 15,01,000/-( Fifteen lac one thousand only) . Out of the said amount a sum of Rs. one lac in cash was paid as an earnest money. However, defendants were unable to pay the total amount as agreed, therefore both the parties mutually agreed to execute a Supplementary Agreement dated 27.08.1997. Pursuant to which defendants paid another sum of Rs. 5.50 lacs to the plaintiff thus the plaintiff received a total sum of Rs. 7 lacs from the defendants. However, it was made clear that all other terms and conditions of the agreement to sell dated 11.06.1997 would remain as it is. The plaintiff on the assurance of the defendant that they shall pay the balance amount as agreed, handed over the possession of one room at the first floor and terrace on the second floor.
3 The plaintiff applied for certified copy of the award as well as the judgment and decree passed by the Ld. ADJ, same was received and delivered to the defendant on 12.11.97 and they were requested that they should immediately make the payment to the plaintiff as per the terms and condition of both the agreements. It was also pointed out to the defendants that time was the essence of the contract, therefore, they should make the payment as per the agreement, failing which plaintiff shall become entitle to forfeit the amount, however, defendants have failed to pay the remaining amount in spite of repeated requested the reminders consequently they were called upon to vacate the possession of the suit premises and hand over the vacant and physical possession to the plaintiff and the agreement dated 11.6.97 and 27.8.97 were terminated vide notice dated 17.01.98 in compliance of the terms and conditions of the agreement dated 11.06.1997. On the basis of the aforesaid averment, present suit has been filed.
Suit no. 321/09/2001 Page 2/264 Pursuant to the summons defendants appeared and filed their written statement taking preliminary objection that the suit neither been valued according to law nor proper court fees has been paid, that the claim of the plaintiffs for recession of agreement is barred by limitation. The possession of the defendant in the property in question is protected under Section 53-A of Transfer of Property Act, that the suit of the possession in respect of verandah is not maintainable.
5 On merit it is stated that two agreements to sell dated 11.6.97 and 27.08.97 were executed between the parties. It is further stated that plaintiff was not having enough funds to purchase another property for his son at Pitampura, therefore he requested the defendant firstly to pay sum of Rs. 50,000/- in cash and later on a sum of Rs. 5.50 lacs and made promise to execute the sale deed on the stipulated date i.e 11.11.97. Defendants relying on the promise of the plaintiff agreed to pay the sum which was duly acknowledged by the plaintiff in the additional agreement to sell dated 27.08.97. On receipt of Rs. 6 lacs the plaintiff handed over vacant possession of one room with common passage on the first floor and a roof on the second floor in the property in question. It is denied that defendants were unable to pay the total amount as agreed in the agreement. It is stated that from the perusal of the agreement dated 11.6.97 it is clear that plaintiff was to first hand over copy of the award, site plan and decree which made the award as rule of the court etc on the basis of which plaintiff claim to be the owner of the property in question. The plaintiff has violated the terms and condition of the said agreement. It is denied that plaintiff ever applied or handed over the certified copy of the award as well as judgment and decree or ever delivered the same to the defendant on 12.11.97. It is denied that balance payment was not made by the defendant in spite of the repeated requests and reminders. It is also denied that defendants have failed to act as per the terms of the agreement and the plaintiff had no option but to terminate the agreement and forfeit the amount. It is also denied that agreements were ever terminated vide notice dated 7.01.98.
Suit no. 321/09/2001 Page 3/26It is stated that defendants never received notice dated 7.1.98.
6 As per the defendants plaintiff handed over the possession of one room alongwith terrace on the second floor in part performance of the agreement dated 27.8.97. Therefore, under the law these agreements could not be terminated by the plaintiff by sending alleged notice dated 7.1.98 and 17.01.98 which were neither sent by the plaintiff nor ever received by the defendant. It is further stated that defendants were always ready and willing to perform their part of contract by making payments to the plaintiffs. The defendants went to the office of Sub- Registrar office on 11.12.97 and purchased the stamp papers for a sum of Rs. 28,000/- and waited for the plaintiff till 4 p.m in the office of sub- registrar but he did not turn up alongwith necessary documents and sale deed could not be typed without those documents. The defendants made all efforts to contact the plaintiff at his house but he was not traceable. All other averments of the plaint has also been replied specifically.
7 The plaintiffs filed replication to the written statement, thereby denied the averment made in the written statement and reiterated the averments made in the plaint.
8 On the basis of the pleadings of the parties, ld. Predecessor of this court vide order dated 8.8.2003 was pleased to frame the following issues for adjudication:-
1. Whether the suit of the plaintiff is liable to be stayed under Section 10 CPC?
2. Whether the suit has been properly valued by the plaintiff and proper court fees has been affixed? OPP
3. Whether this court has pecuniary jurisdiction to try & entertain the suit? OPP
4. Whether the suit of the plaintiff is within limitation? OPP Suit no. 321/09/2001 Page 4/26
5. Whether the possession of the defendants is protected under Section 53-A of the transfer of property Act? OPD
6. Whether the suit of the plaintiff is maintainable in the presence form? OPP
7. Whether the plaintiff is entitled to relief of declaration as claimed? OPP
8. Whether the plaintiff is entitled to recovery of possession as stated in the plaint? OPP
9. Relief
9 The Plaintiff initially filed the suit for possession and declaration, however subsequently he filed an application under Order 6 Rule 17 CPC thereby he sought to incorporate the relief of rescission of the sale agreement dated 11.6.97 and 28.07.97. The said application has been heard and decided by the ld. Predecessor of this court vide order dated 18.07.2008 whereby the plaintiff was permitted to incorporate the said relief in the plaint. Although plaintiff incorporated the relief of rescission of the aforesaid agreements but inadvertently ld. Predecessor of this court has not framed any additional issue with respect to the relief sought by the plaintiff. Consequently vide order dated 02.09.2011, following additional issue has been framed by this court for adjudication:-
Additional Issue :- Whether the plaintiff is entitled for rescission sale agreement dated 11.6.97 and 28.07.97 against the defendants ? OPD 10 During the pendency of the suit, plaintiff has expired, therefore, his son Satish Sharma has examined himself as PW-1 AND reiterated the averment made in the plaint in his examination in chief. PW-1 exhibited the certified copy of the will dated 1.4.2004 as Ex. PW-1/1, death certificate of the plaintiff as Ex.
PW-1/2, Certified coy of the Arbitration Award as Ex. PW-1/3, Certified copy of the agreement dated 11.6.97 as Ex. PW-1/4, Certified copy of the Sale Suit no. 321/09/2001 Page 5/26 Agreement dated 27.08.97 as Ex. PW-1/5, Legal notice dated 7.1.98 as Ex. PW-6/1, Legal notice dated 17.01.98 as Ex. PW-1/7, Postal receipt and A.D card as Ex. PW-1/8, Photographs as Ex. PW-1/9, Certified copy of the affidavit of the plaintiff as Ex. PW-1/10 & 11, the original site plan as Ex. PW-1/12.
11 During cross-examination PW-1 briefly deposed that house no. 1-2/101, Pocket-16, Rohini either be in the name of his brother Sunil Kumar or his wife. He admitted that house no. 1-2/101, Pocket 16, Rohini, Delhi was acquired after agreement to sell entered between the parties. He himself had applied for the certified copy of the Arbitration Award in the month of September/October 1997. He received the certified copy of the Award after about one month. He denied that he had applied for the certified copy of the award on 10.11.97 and same was prepared on 12.11.97 and might be delivered to him after one or two days of the preparation.
12 He further stated that once he gave the certified copy on 13.11.97 and second time on 6.12.97. He also gave Site Plan, NOC, Decree Sheet and other documents which have been filed in this file. He admitted that in the cross- examination of his father he stated that he had supplied the same to the plaintiff. He further stated that he has not brought the certified copy of the site plan annexed with the Award. He has not brought certified copy of the decree sheet mentioned in Ex. PW-1/D1. He denied that they have not given the certified copy of the decree sheet and site plan to any of the defendant herein. He further stated that they constructed the wall in the month of December 1997 before 11.12.97. He is not in possession of receipt of purchase of bricks, cement and sand. He further stated that he had not obtained any receipt of payment from the Messon and labours. He has not mentioned the date of construction of wall in the plaint. He denied that they have constructed the wall after filing of both the case in order to have a fake proof of the said construction of wall. He admitted that notice Ex. PW-1/6 was not prepared at his instructions. He stated that said notice Suit no. 321/09/2001 Page 6/26 was prepared in his presence. He further stated that said notice was despatched by the advocate from the post office and he was not present at that time. He denied that in those notices they have extended the time of payment of balance amount. He again said that in the first notice they had extended the time for the payment of balance sale consideration. He further stated that they have came to know about the facts mentioned in para 11 of his affidavit on 11.12.97 in the office of Sub- Registrar when defendant came with papers and requested them to sign the papers and assured them that they would make the balance payment later on. He further stated that they have no documentary proof to show that on 11.12.97 his father and he visited the office of Sub- Registrar. He stated that he has no knowledge as to whether defendants have returned the stamp papers which were purchased by them for preparation of sale deed for sale consideration of Rs. 3.5 lacs or not. He further stated that they demolished the partition wall on first and second floor within one and two days from 11.12.97 as defendants did not pay the balance amount. They have not taken any photographs of demolition of partition wall at both floors or even after demolition. He denied that defendants were having total balance amount of sale consideration with them on 11.12.97. He admitted that post man has not delivered the notice dated 7.01.98 and 17.01.98 to the defendant in his presence. He admitted that defendants were put in the possession of the property in pursuant of the agreement dated 11.06.97 and 27.08.97. They are not ready to fulfill the transaction took place between the parties even today. He volunteered since the same has already been revoked. He denied that the defendants were ready and willing to perform their part of obligation and get the transaction completed as on 11.12.97 and also till today. He denied that that they have no authority or right to revoke/cancelled the agreement dated 11.06.97 and 27.08.1997. He also denied that time was not the essence of the contract as they have extended the time for completion of the aforesaid transaction.
13 Plaintiff also examined Sh. Kamlesh Kumar Advocate as PW-2. In his Suit no. 321/09/2001 Page 7/26 examination in chief PW-2 deposed that the certified copy of the legal notice dated 7.1.98 Ex. PW-1/6 bears his signatures. He had also sent another notice dated 17.01.98 Ex. PW-1/7. During cross-examination PW-2 deposed that he does not remember who dispatch the notice dated 7.1.98 and 17.01.98. He further stated perhaps notices were dispatched from Malka Ganj post office. He gone through the agreement entered between the parties. He does not remember as whether it was between two parties or more parties. He stated that the name of his clerk is Mohan Lal who was working in his Chamber no. 522 with him.
14 Plaintiff also examined Sh. Mohan Lal, clerk of Sh. Kamlesh Kumar Advocate as PW-3. In his examination in chief PW-3 deposed that in January 1998 he was instructed by Sh. Kamlesh Kumar to dispatch a legal notice on behalf of Sh. Lajpat Rai Sharma. He was given two legal notice one dated 7.1.98 and another dated 17.01.98 on the respective dates for dispatch through post office. The notice dated 7.1.98 was booked by him by way of UPC for which he was having the UPC receipt. The notice was addressed to Shri Ram Parkash Gupta at the address of Sita Ram Bazar, Delhi. He had given the UPC receipt to Shri Kamlesh Kumar Advocate on the same date. Subsequently he was instructed to sent another notice dated 17.01.98 which was asked to send by registered A.D. He handed over the receipt to Sh. Kamlesh Kumar Advocate. A few days thereafter he was asked to locate the proof of service but despite best efforts UPC receipt could not be traced out with regard to the notice dated 7.1.98. Similarly A.D card of the second notice could not be traced out either because it was lost in the course of transmission or in the office of the advocate.
15 In cross-examination PW-3 deposed that he is working as clerk with Sh. Kamlesh Kumar Advocate since 1992. He is not in possession of any documentary proof which may shows that he is clerk of Sh. Kamlesh Kumar. He was given a notice dated 7.1.98 by Sh. Kamlesh Kumar for dispatching the same Suit no. 321/09/2001 Page 8/26 through UPC. He himself had written address on the envelope of the notice. He dispatched the said notice through UPC from Malka Ganj post office. He handed over the UPC receipt to Sh. Kamlesh Kumar Advocate on 7.1.98 itself. The said receipt was returned back to him by Sh. Kamlesh Kumar advocate after seeing the same and he kept the same in the file cover. He does not remember the date, month when Sh. Kamlesh Kumar asked him to search the said UPC receipt and given to him but it was in the year 1999. The said UPC could not be located by him in the office of Sh. Kamlesh Kumar Advocate. He further stated that he dispatched another notice dated 17.1.98 from Tis Hazari post office. He dispatched this notice through registered A.D and UPC. He handed over the postal receipt of the said notice to Sh. Kamlesh Kumar Advocate. He does not remember as to whether postal receipt of the second notice was kept by him or returned to him.
16 The Defendant examined Sh. Deepak Gupta, defendant no. 2 as DW-1 who reiterated the averment made in the written statement in his examination in chief. He exhibited the certified copy of the agreement and receipt dated 11.6.97 and 27.08.97 as Ex. DW-1/1 & 2 & DW-1/2/A, certified copy of the declaration and receipt, application for inspection of record and receipts as Ex. DW-1/3 to 10, certified copy of the banker's cheques as Ex. DW-1/11 to 14, certified coy of the legal notice and reply as Ex. DW-1/15 & 16, certified copies for papers for canceling the banker's cheque, returned the unused stamp papers purchased for execution of the sale deed to the treasury as Ex. DW-1/17 to 25.
17 During cross-examination DW-1 briefly deposed that till date no copy of the award has been supplied to him either by the plaintiff or by his son. He denied that the copy of the award was supplied to him on 13.11.1997 and 6.12.97. He made the inspection and search qua the ownership of the plaintiff qua the suit property on 11.12.97. He admitted that he had not given any notice to the plaintiff for not constructing the partition wall. He denied that the plaintiff Suit no. 321/09/2001 Page 9/26 raised the partition wall before 11.12.97. He stated that he was agreed to purchase the property even there was no partition wall. He volunteered that since the plaintiff told them that first they raise the partition wall and then execute the documents. He stated that neither he nor his grandfather given any notice to the plaintiff to comply with the terms of agreement. He admitted that in both the agreement it has not been mentioned that the sale deed is to be executed for 3.50 lacs . He admitted that he do not have any other document to show that it was agreed between him and the plaintiff that the sale deed is to be executed for a total sum of Rs. 3.50 lacs. He further stated that he cannot tell if the notice Ex. DW-1/P1 served upon him. He has not brought the Pass Book of his bank account and of his grandfather for the period 11.12.1997 and even prior to that to show that I was having a sufficient balance to honour the agreement. He further stated that he has not brought any document to show that he was having the arrangement of the balance amount to be paid on 11.12.97 as mentioned in the notice. He stated that he was having he draft of Rs. 3.50 as on 11.12.1997. He volunteered the he was also having the cash. The said cash was taken by him from his family account. He admitted that he has not filed any document to show that there was sufficient balance in the family account and he had taken the money from the same. He denied that he was not having the sufficient balance as on 11.12.97 and for the said reason the plaintiff refused to execute the documents of sale. He further stated that he purchased the stamp on the same day i.e 11.12.97. He alongwith his grandfather reached to Kashmiri Gate, Sub Registrar office about 10 a.m. He admitted that documents Ex. DW-1/20 are blank. He met the plaintiff before he leave for the Sub- Registrar. Thereafter he contacted the plaintiff again but he cannot tell the mode. He stated that he thereafter contacted the plaintiff who agreed to execute the documents of sale showing the value of Rs. 6.50 lacs. He admitted that no stamps of Rs. 6.50 were purchased by him or by his grandfather. He volunteered that it was agreed that same would be purchased only when the plaintiff would reach there. He denied that no such understanding had ever taken place. He also denied that the plaintiff Suit no. 321/09/2001 Page 10/26 refused on 11.12.97 to execute the documents and thereafter no conversation had taken place. He also denied that he received a notice from the counsel of the plaintiff on 7.1.1998. He also denied that he received the notice dated 17.01.1998 from the counsel for the plaintiff. He denied that he has not intimated the plaintiff about the Demand Drafts prepared by me after 11.12.1997.
18 I have heard Ld. Counsels for the parties and perused the pleadings, evidence and other material placed on record. However, I shall first decide additional issue framed on 9.2.1991 which is as under:-
Additional Issue:- Whether the plaintiff is entitle for rescission of sale deed dated 11.06.1997 & 28.07.97 against the defendants? OPP
19 The plaintiff has set up a case that he has become the owner of the property bearing no. 10-A/8, Shakti Nagar, New Delhi on the basis of an award passed by the Arbitrator which was subsequently made rule of the court vide order dated 2.4.1981. The plaintiff entered into an agreement to sell dated 11.6.1997 with the defendants with respect to the above property for a total sale consideration of Rs. 15,01000/- out of which defendants paid Rs. One lac as earnest money. The said transaction was to be completed on or before 11.12.97, however, defendants have failed to pay the remaining amount despite various requests. As per the plaintiff he complied all his obligations as per the agreement dated 11.6.97, however defendants have failed to perform their part of the agreement, consequently the earnest money and the part payment paid by the defendants stood forfeited due to the default. As per the plaintiff he is entitled for rescission of the sale agreement dated11.06.1997 & 28.07.1997.
20 The defendants have taken a plea that they entered into an agreement to sell dated 11.6.97 with the plaintiff and paid an earnest money of Rs. one lac. The plaintiff wanted to purchase some property but was not having Suit no. 321/09/2001 Page 11/26 enough funds, therefore, he requested the defendants to pay Rs.50,000/- in cash and later on Rs. 5.50 lacs with the promise to execute the sale deed on the agreed date. The defendants paid a sum of Rs. 5.50 lacs on 27.8.97 which was accepted by the plaintiff and an additional agreement to sell dated 27.8.97 was executed. The plaintiff also handed over the possession of one room with common passage on the first floor and roof of the second floor. As per the defendant they performed their part of the obligation by making part payment as demanded, however, plaintiff has failed to perform his part of agreement to sell dated 11.6.97. As per the defendants they were always ready and willing to perform their part of the agreement but plaintiff failed to perform his part as per the agreement to sell.
21 There is no dispute that an agreement to sell dated 11.6.97 Ex. PW-1/4 was entered into between the parties. It is contended on behalf of the plaintiff that time the essence of the contract. The Ld. Counsel for the plaintiff referred to Clause 2 of the agreement to sell. He contented that by virtue of Clause 10 of the agreement it was made clear that if the defendants failed to pay the balance sale consideration on the fixed date mentioned, the earnest money/part payment so paid shall be forfeited and in case plaintiff fails to execute the sale documents defendants can claim double of the amount and may also get the transaction enforce through the court. Therefore, according to ld. Counsel for the plaintiff the contract was clearly time bound. It was time bound with regard to payment to be made by the defendants. They failed to make it, thus the agreement to sell stood cancelled.
22 On the other hand ld. Counsel for the defendants contended that the contention of Ld. Counsel for the plaintiff that time was the essence of the sale agreement is not correct. Accordingly to him Clause 2 ought not to be read in isolation and has to be read in conjunction with the other clauses of the agreement. He further contended that the question whether time was the Suit no. 321/09/2001 Page 12/26 essence of the contract or not is to be seen from the contract itself and upon reading the documents as a whole. He submitted that it is no where mentioned in the agreement that time was the essence of the contract. He further contended that as per clauses 2 & 3 of the agreement the plaintiff was under obligation to deliver the certified copy of the Award, Site Plan and will to the defendants within a period of four months on the date of execution of agreement to sell Ex. PW-1/4. The plaintiff was also under obligation to construct a partition wall upon the first floor and at the terrace of the second floor, however, plaintiff failed to perform his part.
23 According to ld. Counsel for defendants time was the essence of the contract only upen the plaintiff performing with his obligation cast upon him and not otherwise.
In order to appreciate the arguments advanced by both the Ld. Counel for the parties it would be necessary to refer to Section 55 of Indian Contract Act 1872, same reads as under:-
1. Effect of failure to perform at fixed time, in contract in which time is essential- When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified time, 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, becomes voidable at the option of the promise, if the intention of the parties was that time should be of the essence of the contract.
2. Effect of such failure when time is not essential- If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure.
3. Effect of acceptance of performance at time other than that agreed upon- If in case of a contract voidable on account of the promisor's failure to Suit no. 321/09/2001 Page 13/26 perform his promise at the time agreed, the promisee accepts performance of such his promise at the time agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so.
24 Reading the first paragraph of Section 55 it is apparent that when party to contract promises to do a certain thing at or before a specific time and fails to do such things at or before specified time, the contract or so much of it as has not been performed, becomes voidable at the option of the promisee, If the intention of the parties was that time should be of the essence of the contract.
25 The Second paragraph of Section 55 provides that if it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such things at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure.
A constitution Bench of the Hon'ble Supreme Court in Chand Rani ( by LRs) Vs. Kamal ( by LRs) reported as 1993 ( 1) SCC 519 has held that, " it is well accepted principle that in case of sale of immovable property time is never regarded as the essence of the contract. In fact there is presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equality which governs the right of the parties in case of specific performance of contract to sell real estate law looks not at the latter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language"
Suit no. 321/09/2001 Page 14/26In Arosan Enterprises Ltd Vs. Union of Indian and another reported as AIR 1999 SC 380 the Hon'ble Supreme Court has held that mere fixation of a period of delivery or a time in regard thereto does not by itself make time as the essence of the contract. The agreement has to be considered in its entirety and on proper appreciation of the intent and purport of the clauses incorporated therein. The statement of facts and the relevant terms of the agreement ought to be noted in their proper perspective so as to assess the intent of the parties.
26 In view of the well settled legal preposition the question as to whether the time was the essence of the contract has to be ascertained from the terms of the contract read as a whole. It must also borne in mind as to what are the corresponding obligations of the parties. For instance, if it is held that there were certain obligations which were cast upon any party and that they did not fulfill the same, then surely that party would not be entitled to insist upon the completion of the contract within the stipulated time. In such a situation, unless those obligations were fulfilled, time can never be regarded as the essence of the contract.
27 A Perusal of the pleadings, evidence and documents place on record clearly, shows that the agreement to sell dated 11.6.97 Ex. PW-1/4 was executed between the parties whereby plaintiff had agreed to sell the suit property to the defendants for a total sale consideration of Rs. 15,01000/- out of which defendants paid a sum of Rs. One lac as earnest money. It is also an admitted case of the parties that an additional agreement dated 27.8.97 Ex. PW-1/5 was also executed, pursuant to which defendants paid another sum of Rs. 5.50 lacs to the plaintiff, however, rest of the terms of the agreement Ex. PW-1/4 remained as it is. As per clause 2 of the agreement to sell Ex. PW-1/4, defendants were required to pay the balance sale consideration to the plaintiff on or before 11.12.97 at the time of execution of the necessary sale documents. As Suit no. 321/09/2001 Page 15/26 per Clause 3 of the agreement the plaintiff was required to obtain certified copies of the award, site plan as well as order which made the said award as rule of the court and was bound to hand over the same to the defendants within the period of four months from the date of execution of the agreement. Further vide Clause 4 the plaintiff was required to construct a partition wall upon the first floor and at the terrace of the second floor.
28 A perusal of clause 3 & 4 of the agreement to sell Ex. PW-1/4 clearly shows that the plaintiff was required to supply the certified copy of these documents referred to in Clause 3 to the defendants within a period of four months i.e up to 11.10.97 he was also required to raise partition wall as per clause 4 of the agreement. The plaintiff himself mentioned in the plaint that the documents were delivered to the defendants on 11.11.97. The above stipulation in the plaint clearly shows that plaintiff has failed to supply the documents within four months in compliance of the agreement to sell. Similarly in para 6.1 of the plaint the plaintiff has pleaded that, " plaintiff even requested that he is prepared to construct partition wall also but the defendants should make the balance payment. The defendants failed to honour their commitments".
29 A perusal of the averment made in para 6.1 of the plaint shows that plaintiff sought to incorporate a condition for raising partition wall whereas as per Ex. PW-1/4 no such condition was ever agreed between the parties for raising partition wall.
In order to substantiate their plea plaintiff examined his son Satish Kumar as PW-1. In cross-examination PW-1 deposed that he himself had applied for the certified copy of the Arbitration award in the month of September/October 97. He received the certified copy of the award after one month. He denied that he applied on 12.11.97 and it might be delivered to him after one or two days of the preparation. He further stated that after obtaining certified copy of the award he handed over the same to Deepak Gupta in the Suit no. 321/09/2001 Page 16/26 presence of his father. He further stated that he given the certified copy twice once on 13.11.97 and second time on 6.12.97. He further stated that they constructed the wall in the month of December 1997 before 11.12.1997. He further stated that he has not mentioned the date of construction in the plaint.
30 PW-1 in his cross-examination has deposed that he applied the certified copy of award in the month of September/October 1997 which is Ex. PW-1/3. A perusal of Ex. PW-1/3 clearly shows that these documents were applied on 10.11.97 vide application no. 18422 and same were made available on 12.11.1997. The above fact clearly shows that the testimony of PW-1 qua the fact that he applied the certified copy in September/October 1997 and it took one month for preparation is not correct. The plaintiff has not placed any material on record which can show or suggest that they documents were supplied to the defendants either on 12.11.97 as averred in the plaint or on 13.11.97 as deposed by PW-1 in his testimony. PW-1 has also averred in para 13 of his examination in chief partition wall had been raised which he reiterated in his cross-examination, however the above deposition of PW-1 is beyond the pleadings. In para 6.1 of the plaint, the plaintiff himself has averred that he is prepared to construct partition wall which goes to show that plaintiff has not raised the partition wall till the filing of the suit, therefore the testimony of PW-1 qua the fact that they constructed the partition wall in compliance of clause 4 of the agreement to sell Ex. PW-1/4 is clearly beyond the pleadings and inadmissible in evidence.
The above facts clearly demonstrate that plaintiff himself fail to comply his obligation as per clauses 3 & 4 of the agreement to sell Ex. PW-1/4.
31 The plaintiff has further taken a plea that defendant did not come forward and paid the amount due under the agreement despite the notice dated 7.1.98 as well as 17.01.98 sent by the plaintiff. PW-1 in para 7 of the examination in chief averred that, " defendants did not turn up to make the balance payment by the stipulated date and consequently the plaintiff revoke the Suit no. 321/09/2001 Page 17/26 said sale agreement regarding which he had got sent a legal notice dated 07.01.98 through UPC and another legal notice dated 17.01.98. The defendants have pleaded that these notices were never served upon them. The plaintiff has not placed any material on record to show that the notice dated 7.01.98 Ex. PW-1/6 was ever dispatched. The notice dated 17.01.98 was sent to defendant no. 1 only through registered post and same had not been sent to defendant no.
2. PW-1 in para 7 & 8 of his examination in chief has mentioned that they revoked the agreement to sell vide legal notice dated 7.1.98 and 17.01.98. Although plaintiff has failed to prove that notice dated 7.1.98 was ever dispatched or severed upon the defendants. However, perusal of the notice Ex. PW-1/6 clearly shows that vide said legal notice plaintiff did not revoke the agreement to sell Ex. PW-1/4 as averred by PW-1 in his examination in chief but vide that notice plaintiff called upon defendant no. 1 to make the balance payment within a week from the service of the said notice. The above fact mentioned in the notice clearly shows that by that date the plaintiff himself treating the agreement to sell Ex. PW-1/4 subsisting. The aforesaid fact itself goes to show that time was not the essence of the contract nor the parties have treated the time as an essence at any point of time.
32 The plaintiff has further taken a plea that defendants have failed to perform their part of obligation as per agreement to sell. The defendants, however, averred that they were ready and willing to perform their part of the contract, however, plaintiff failed to execute the sale deed.
The defendants have placed on record copy of the bankers cheque bearing no. 000575 and 505717 dated 11.12.97 for a sum of Rs. 2 lacs and Rs. 1.50 lacs respectively Ex. DW-1/11 & DW-1/12. They also placed on record the bankers cheque no. 000278 dated 16.12.97 for Rs. 2 lacs, pay order no. 000271 dated 13.12.97 for Rs. One lac and these bankers cheques were subsequently got cancelled by the defendants vide letter Ex. DW-1/18 & 19. Defendants have Suit no. 321/09/2001 Page 18/26 also placed on record the certified copy stamp paper purchased on 11.12.97 as Ex. DW-1/20 as well refund voucher of the stamp paper Ex. DW-1/22 & 23. To show their presence at the office of Sub Registrar on 11.12.97 defendants have placed on record inspection receipt dated 11.12.97 issued by Sub-Registrar office as Ex. DW-1/8 & 10.
33 As per the defendants they reach at the office of Sub- Registrar on 11.12.97 and purchased the stamp papers Ex. DW-1/20 for the execution of the sale deed. However, plaintiff has not turned up for the execution of the sale deed in their favour. The defendants have pleaded the above fact in para 5.1 of the written statement. The plaintiffs in the replication of the corresponding para has not denied the said fact. During evidence, however plaintiff pleaded that they reached at the sub-registrar office but defendant did not bring the sufficient amount. The plaintiff has not placed any material on record to prove that he reached at the sub-registrar office on 11.12.97 i.e date fixed for execution of the sale deed vide agreement to sell Ex. PW-1/4. In cross-examination PW-1 deposed that they do not have any documentary proof to show that they reached on 11.12.97 in the office of the sub-registrar.
It is also pertinent to mention that PW-1 during cross-examination deposed that papers were typed on stamp papers. The defendants have placed the copy of stamp papers Ex. PW-1/20 which are blank and not typed one as alleged by PW-1, the said fact itself shows that plaintiff had not reached at the sub-registrar office on 11.12.97 as alleged by PW-1.
34 An examination of pleadings, evidence and documents placed on record and after reading clauses 3 , 4 & 10 of the agreement to sell Ex. PW-1/4 it become clear that plaintiff has not fulfilled his obligation as per agreement to sell Ex. PW-1/4. Therefore, he is not entitled for recession of contract as prayed by him.
On the other hand defendants have done all they could do and were Suit no. 321/09/2001 Page 19/26 ready and willing to fulfill their obligation by making the balance payment of Rs. 8,01,000/- as per the agreement however it is the plaintiff who did not reach at the sub-registrar office on the date fixed for completion of the transaction vide agreement to sell Ex. PW-1/4 or subsequently despite the service of the legal notice sent by the defendants.
In view of the above facts and circumstances I am of the considered view that time was not the essence of the contract. I am also of the considered view that plaintiff has failed to perform his part of the obligation as per the agreement to sell Ex. PW-1/4. Whereas defendants have performed their obligation as the agreement to sell. The plaintiff is thus not entitled for rescission of the agreement to sell dated 11.6.97 and dated 27.8.97. The plaintiff has thus failed to discharge the onus of additional issue, same is accordingly decided against the plaintiff.
Issue No.1: Whether the suit of the plaintiff is liable to be stayed under Section 10 CPC?
35 Both the parties have not pressed this issue at the time of advancing final arguments. Moreover this suit has already reached at its final stage and therefore same is not liable to be stayed as per Section 10 of the CPC. Issue no. 1 is accordingly decided.
Issue no. 2: Whether the suit has been properly valued by the plaintiff or proper court fees has been affixed ? OPP Issue no. 3: Whether this court has pecuniary jurisdiction to try & entertain the suit? OPD 36 Both these issues are taken together. The defendants in para 1 of the preliminary objection averred that the value of the suit for the purpose of court fees and jurisdiction cannot be less than Rs. 15,01000/- on that basis defendant has pleaded that the suit has not been properly valued for the purpose of court fees and jurisdiction and this court has no pecuniary jurisdiction. The plaintiff controverted the said plea.
Suit no. 321/09/2001 Page 20/26It is relevant to mention that initially the plaintiff filed the suit for possession and declaration and valued the suit at Rs. Three lacs. However, subsequently plaintiff to incorporated the relief of rescission of agreement to sell dated 11.06.97 and 28.07.97 by way of amendment. The said amendment application was allowed by ld. Predecessor of this court vide order dated 18.7.2008. As per the amended plaint, the plaintiff has valued the suit for the purpose of court fees and jurisdiction at Rs. 15,01000/- i.e the consideration amount as agreed vide agreement to sell Ex. PW-1/4. The defendants have failed to point out any infirmity in the valuation of the suit.
In view of the above, I am of the considered view that plaintiff has properly valued the suit for the purpose of court fees and jurisdiction and this court has pecuniary jurisdiction to entertain, try and decided the present suit. The plaintiff has thus, discharge the onus of issue no. 2 & 3 same is accordingly decided in favour of the plaintiff.
Issue no. 4: Whether the suit of the plaintiff is within limitation? OPP 37 The defendants have taken a plea that suit of the plaintiff for possession as well as for rescission of agreement is barred by limitation. The plaintiff has controverted the said plea in the corresponding para of the replication.
In order to substantiate their plea both the parties have lead their respective evidence.
The plaintiff initially filed the suit for possession and declaration against the defendants, however, subsequently he sought permission to incorporate the relief of rescission of agreement to sell dated 11.6.97 and 28.7.97, by way of amendment application under dated 5.5.2008. The said application was allowed by the ld. Predecessor of this court vide order dated 18.7.2008. Pursuant to which amended plaint have been filed on record.
The main question which requires adjudication at this stage is whether the suit for rescission of agreement to sell dated 11.6.97 & 28.7.97 filed Suit no. 321/09/2001 Page 21/26 by the plaintiff is within the period of limitation or not? The limitation for filing a suit for seeking recession of contract has been prescribed in Article 59 of Limitation Act which reads as under:
Description of suit Period of Limitation Time from which period begins to run
59. To cancel or set aside an Three Years When the facts entitling the instrument or decree or for plaintiff to have the the recession of a contract. instrument or decree cancelled or set aside or the contract rescinded first become known to him.
A perusal of Article 59 of Limitation Act clearly shows that a suit rescission of contract can be filed within a period of three years from the date when the contract rescinded first become known to the plaintiff.
Para 7 of the plaint stipulates as under:
" that the suit bearing no. 995 of 2000 titled Shri Ram Prakash Gupta & Anr. Vs Lajpat Rai is pending in the Hon'ble High Court of Delhi. The plaintiffs as defendants shall file their written statement, plaintiff shall crave leave to refer to the notices sent to the defendants dated 7.1.1998 and 17.2.1998 and in both the notices, it was made clear that since they have failed to act upon their own commitments, failed to tender the balance amount under the Agreement. Plaintiff, thus, was entitled to terminate the agreement forfeit the amount as stipulated in the agreement and the defendants should vacate the portion which was handed over to them in good faith."
38 A perusal of para 7 of the plaint clearly shows that plaintiff was aware about the fact that the contract has been violated by the defendants, therefore he got cause of action for filing the suit for rescission of agreement to sell dated 11.6.97 & 28.7.97 at the time when the notice dated 17.1.98 was delivered by the plaintiff upon the defendants or at best he got cause of action for filing the rescission of contract at the time of filing the present suit. The suit for Suit no. 321/09/2001 Page 22/26 rescission of contract under Article 59 of the Limitation Act could have been filed within three years i.e either up to 17.1.2001 or if the limitation is taken to have started from the date of filing of the suit then till 18.01.2004. However, the plaintiff has filed the amendment application for seeking incorporation of the relief of rescission of contract on 5.5.2008 which was allowed on 18.7.2008 consequently the said relief has been incorporated by the plaintiff in the present suit after the expiry of three years period as provided Article of 59 of Limitation Act. The suit for rescission of contract is thus barred by limitation.
As regard the suit for possession is concerned, as per Article 65 of the Limitation Act same could have been filed within 12 years from the origin of the cause of action. The plaintiff handed over the possession of the portion of the property to the defendant on 27.8.97 and the present suit has been filed on 18.9.2001 i.e within the period of 12 years from the date of handing over the possession of the portion to the defendants as provided under the law.
In view of the facts and circumstances, I am of the considered view that the suit for possession filed by the plaintiff is within the period of limitation whereas the suit for rescission of agreement to sell Ex. PW-1/4 & PW-1/5 is barred by limitation. Issue no. 4 is accordingly decided. Issue no. 5: Whether the possession of the defendant is protected under Section 53-A of the Transfer of Property Act? OPD Issue no. 6: Whether the suit of the plaintiff is maintainable in the present form? OPP Issue no. 7: Whether the plaintiff is entitled to relief of declaration as claimed? OPD Issue no. 8: Whether the plaintiff is entitled to recover the possession as stated in the pliant? OPP 39 Issue no. 5 to 8 are taken together as they are inter-connected. The defendant has taken a plea that they handed over the vacant possession of one room with common passage of the first floor and the second floor of the property in part performance of the agreement dated 27.8.97, therefore, in view of Section 53-A of the Transfer of Property Act their possession is protected. The plaintiff Suit no. 321/09/2001 Page 23/26 has admitted that possession was handed over at the time of execution of the agreement dated 28.7.97 however taken a plea that defendants have failed to perform their part of the contract, consequently, the agreement to sell stood canceled and defendants are liable to hand over the possession of the suit property.
40 Section 53 A of Transfer of Property Act speaks about the doctrine of part performance it provides that "Where any person contracts to transfer for consideration any immovable property by writing, signed by him or on his behalf from which the terms necessary to constitute, the transfer can be ascertained with reasonable certainty and the transferee has, in part performance of the contract, taken the possession of the property or any part thereof or the transferee being already in possession continues in possession in part performance of the contract has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract then he is entitle to protect his possession in respect of the property of which he was put in possession in part performance of the agreement to sell".
The Hon'ble Supreme Court of India in Nathulal Vs. Phool Chand reported as AIR 1969, Supreme Court 446 while interpreting section 53A called out following condition to be fulfilled for making out the defence of part performance to an action in ejectiment by the owner as under:-
(1) The transferor has contracted to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute, the transfer can be ascertained with reasonable certainty.
(2) That the transferee has in part performance of the contract, taken the possession of the property or any part thereof, or the transferee being already in possession continues in possession in part performance of the contract.
(3) That the transferee has done some act in furtherance of the contract Suit no. 321/09/2001 Page 24/26 (4) That the transferee has performed or is willing to perform his part of the contract.
Thus for seeking protection from the ejectment against the owner the transferee is required to show that there exists a written contract in pursuance of which the possession was handed over to them.
41 It the admitted case of the parties that the agreement to sell Ex. PW-1/4 dated 11.6.97 was executed between the plaintiff and defendants. It is also the admitted case of the parties that additional agreement Ex. PW-1/5 was executed. At the time of execution of said agreement defendants paid a sum of Rs. 5.50 lacs to the plaintiff and the plaintiff handed over the possession of the property in question. PW-1 during cross-examination has stated that defendants were in possession of the property in pursuance of the agreement dated 11.6.97 and 27.8.97. The above testimony of PW-1 clearly established that plaintiff delivered the possession of the property in question is the part performance of agreement to sell Ex. PW-1/4 & PW-1/5. Admittedly defendants have already filed a suit for specific performance. The plaintiff in the present case although pleaded that defendants violated the terms of the contract and were not ready and willing to perform their part, however, while deciding the additional issue, I have already held that defendants have succeeded to prove on record that they were ready and willing to perform their part as per agreement to sell Ex. PW-1/4 & Ex. PW-1/5 and it is the plaintiff who has failed to comply their part of the contract.
42 In view of the above discussion, my issue wise finding is as under:-
Issue no. 5: The defendants have proved on record that plaintiff has handed over the possession of the suit property pursuant to an agreement to sell Ex. PW-1/4 & Ex. PW-1/5 which has been executed in writing. The defendants have also proved that they have taken action for seeking enforcement of the said agreement to sell. The possession of the defendants are thus protected under Suit no. 321/09/2001 Page 25/26 Section 53-A of the Transfer of Property Act. The defendants have successfully discharged the onus of issue no. 5, same is accordingly decided in their favour. Issue no. 6: The suit filed by the plaintiff is maintainable in the present form. The defendants have failed to point out any informity in the present suit. The plaintiff has discharge the onus of issue no. 6 and same is decided in favour of the plaintiff.
Issue no. 7 & 8: In view of my findings on issue no. 5 as well as on additional issue, I am of the considered view that plaintiff is not entitled for the relief of possession and declaration as prayed for. The plaintiff has thus failed to discharge the onus of issue no. 7 & 8, same are accordingly decided against the plaintiff.
43 Relief In view of my above discussion, the suit filed by the plaintiff for rescission of agreement to sell dated 11.6.97 and 28.7.97 and declaration the consequential relief is dismissed. Decree Sheet be accordingly prepared. File be consigned to record room after due compliance.
Announced in the open court ( PITAMBER DUTT)
30th November, 2011 Additional District Judge
Delhi
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