Delhi District Court
Krishna Chaudhary vs . M/S Imb Infrastructure Pvt. Ltd. on 7 August, 2013
Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
IN THE COURT OF MS. SHREYA ARORA MEHTA, CIVIL JUDGE1,
ROOM NO. 3, SAKET COURTS, SOUTH DISTRICT, NEW DELHI
In the matter of :
Suit No. 86/10
Case ID No.02403C0174992010
Krishna Chaudhary
S/o Mr. Shravan Choudhary
R/o 82, Dhuleshwar Garden,
Jaipur, Rajasthan
Through his Power of Attorney Holder
Mr. Manoj Agarwal ...... Plaintiff
Versus
M/s IMB Infrastructure Pvt. Ltd.
Having its registered office at:
10, Rauz Avenue, Fourth Floor,
Punjabi Bhawan, New Delhi. ...... Defendant
ORDER
1. Vide this order I shall dispose of the application under Order XII Rule 6 of the Code of Civil Procedure, 1908 moved on behalf of the plaintiff for decreeing the suit in view of the admissions made by the defendant in the written statement. Before adverting to the admissions highlighted in the present application, I deem it appropriate to take note of the facts of the case in brief. The facts of the case in brief are as under:
2. The plaintiff is seeking relief of specific performance of the agreement to sell CS No. 86/10 1 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
dated 26.10.2009 executed by the defendant in favour of the plaintiff. It is averred that the defendant company through its Director Mr. Abhay Aggarwal represented to the plaintiff that it is the sole and absolute owner of the land ad measuring 12 Bighas 5 Biswas bearing Must No.8 Kila Nos.9 min (406), 9 min (018), 11 (205), 12 min (308), 12 min (108) situated in the revenue estate of village Salahpur, Tehsil Vasant Vihar, New Delhi having purchased the same from M/s Saj Properties Pvt. Ltd., a company incorporated under the Companies Act, 1956 vide registered sale deed. It was also represented to the plaintiff that erstwhile landowners had applied for sanction of building plan of a "Farm House" over the said land and plan was accordingly sanctioned by MCD vide sanction No.1807/B/HQ/2007. In fact farm house has also been constructed over the portion of the said land. That the defendant further represented to the plaintiff that it is competent to sell 1400 sq. meters out of the above said land to the plaintiff.
3. It is further averred that believing the aforesaid representation of the defendant to be true and correct, the plaintiff agreed to purchase the said non agricultural land admeasuring 1400 sq. meters forming part of Must No.8 Kila Nos.9 min situated in the revenue estate of village Salahpur, Tehsil Vasant Vihar, New Delhi which is bounded by a separate and independent boundary wall and there is a temple inside this boundary wall which temple forms part of the abovesaid 1400 sq. meters of nonagricultural land (hereinafter referred to as the suit property). Site plan of the suit property is annexed herewith as Annexure A.
4. It is stated that the defendant agreed to sell the suit property for a total CS No. 86/10 2 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
consideration of Rs.1,00,000/ and the plaintiff has already paid the sale consideration of Rs.1,00,000/ to the defendant which has been acknowledged by the defendant in the said agreement to sell. It is stated that in view of the clause in the agreement to sell, the defendant had agreed to execute sale deed within 15 days from the date of mutation of the said land in favour of the defendant company and in any case latest within 6 months from the date of agreement to sell meaning thereby the sale deed was agreed to be executed latest by 26.04.2010. Apart from the aforesaid agreement to sell, the parties also executed "deed of handing over and taking over" on the said date which document evidences the fact that the defendant handed over the actual physical possession of the suit property to the plaintiff. The defendant has also acknowledged that it has received the entire sale consideration and is left with no right or interest in the suit property. The defendant assured the plaintiff that the sale deed would be executed as soon as the suit land gets mutated in the name of the defendant but not later than 6 months i.e. upto 26.04.2010. It is averred that in the month of November, 2009, the plaintiff contacted the defendant and enquired about the status of the mutation and requested the defendant to fix a date for execution and registration of formal sale deed. The defendant then represented to the plaintiff that it was in the process of getting the mutation done in its favour and it will soon execute the sale deed in favour of the plaintiff. Again the plaintiff contacted the defendant in the third week of December, 2009 with a request to execute and register the sale deed of the suit property, the defendant asked the plaintiff to wait for some time and assured that the defendant is bound by the agreement to sell dated 26.10.2009 and is duty bound to execute sale deed in favour of the plaintiff within 6 months i.e. on or before 26.04.2010. It is the grievance of the CS No. 86/10 3 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
plaintiff that the plaintiff kept waiting for the call of the defendant but did not hear anything from the defendant till 24.04.2010 and in such circumstances the plaintiff call upon the defendant on 24.04.2010 and asked the defendant to execute sale deed in terms of the agreement to sell but the plaintiff was shocked and surprised to know that the defendant had not taken any steps to execute the sale deed. On 17.05.2010 from some property dealers the plaintiff learnt that the defendant was intending to execute a sale deed in the name of third party for higher consideration.
5. The plaintiff has already performed his part of contract by making full payment of the entire consideration amount. But the defendant is not complying with its obligations under the agreement to sell to execute and register a formal sale deed in favour of the plaintiff. The plaintiff, thus, entitled for specific performance of the aforesaid agreement to sell in favour of the plaintiff. The relief clause of the plaint reads as under:
"(a) Pass a decree of specific performance of the Agreement to Sell dated 26.10.2009 in favour of the plaintiff and/or its nominee and against the defendant directing the defendant to execute and register sale deed with respect to the suit property being land admeasuring 1400 sq. meters forming part of Must No.8 Kila Nos.9 min situated in the revenue estate of Village Salahpur Tehsil Vasant Vihar, New Delhi more particularly shown in the site plan annexed as Annexure A. OR In the alternative, pass a decree for declaration in favour of the CS No. 86/10 4 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
plaintiff and against the defendant and thereby declare that the plaintiff is the sole and absolute owner of suit property being land admeasuring 1400 sq. meters forming part of Must No.8 Kila Nos.9 min situated in the revenue estate of Village Salahpur Tehsil Vasant Vihar, New Delhi more particularly shown in the site plan annexed as Annexure A. If the defendant fails to perform his part of obligation, to get the sale deed executed in favour of the plaintiff through the agency of this Hon'ble Court.
(b) Pass a decree of permanent injunction in favour of the plaintiff and against the defendant restraining the defendant, its agents, employees representatives or any body claiming through the defendant from selling, alienating or creating any third party interest in the suit property and also restrain the defendant, its agents, employees, representatives or any body claiming through defendant from interfering in any manner with the possession of the plaintiff with respect to the suit property:
(c) Award cost of the suit in favour of the plaintiff and against the defendant: and
(d) Pass such other and further orders as this Hon'ble Court deems fit and proper in the present facts and circumstances of the case."
6. The defendant has contended that in view of the amendment of Section 17 of the Registration Act, the agreement to sell is compulsorily required to be registered. Further, the agreement to sell is neither stamped nor registered. Hence, the said agreement to sell dated 26.10.2009 does not create any right, CS No. 86/10 5 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
title or interest in favour of the plaintiff.
7. It is further averred that the time stipulated for execution of the sale deed in the agreement to sell was 6 months from the date of the agreement. During the stipulated period the defendant did not even approach the plaintiff once for execution of the sale deed and the said agreement to sell in any event stands cancelled by efflux of time. There is no written communication placed on record by the plaintiff which demonstrate that he has been ready and willing to specifically perform the agreement or to show that the plaintiff ever approached the defendant for the said purpose. Since the plaintiff failed to take steps to have the sale deed registered within the stipulated time of 6 months, the agreement to sell stands cancelled and no suit for specific performance thereof can be legally sustained.
8. The defendant has not denied the execution of the agreement to sell on 26.10.2009 by the Director of the defendant company Mr. Abhay Aggarwal. The only plea of the defendant is that the agreement to sell is neither stamped nor registered and has no evidentiary value in the eyes of law.
9. In the present application, the plaintiff submits that in the written statement, the defendant in paragraph 4 of the parawise reply on merits has admitted "it is not denied that the agreement to sell was executed on 26.10.2009 by Mr. Abhay Aggarwal, director of the defendant company". The defendant further admitted the same in paragraph 6 of the parawise reply on merits of the written statement that agreement to sell was duly signed and executed between the parties and the plaintiff has made the payment of entire CS No. 86/10 6 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
consideration amount. In paragraph 8 of the parawise reply of the written statement, the defendant has not denied that the defendant agreed to execute the sale deed latest by 26.04.2010. The defendant has also admitted having executed the deed of handing over the possession of the suit property to the plaintiff. In view of the above, the plaintiff submitted the following admissions:
(a) Agreement to sell dated 26.10.2009 pertaining to the suit property was executed between the plaintiff and the defendant.
(b) The plaintiff has already made the payment of entire consideration amount and the possession has already been delivered to the plaintiff.
(c) The defendant was to execute the sale deed latest by 26.04.2010 either in favour of the plaintiff or in the name of the nominee of the plaintiff, which the defendant failed to do.
10.I have heard the counsel for the parties and have perused the record.
11.The execution of the agreement to sell dated 26.10.2009 and receiving of the entire consideration under this agreement is admitted. It is also not disputed that the sale deed has not been executed so far. The prime contention of the defendant is to the effect that since the said document was unregistered and unstamped, it cannot creat any right, title or interest in favour of the plaintiff.
12.By inserting sub section 1(A) in Section 17 of the Registration Act,1908 registration of even such a document is made compulsory. This amendment was made by Act 48 of 2001, which came into effect from 24.09.2001. However, the effect of nonregistration is also provided in that very provision. To find out CS No. 86/10 7 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
that, let me reproduce provisions of sub section 1(A) of Section 17 hereunder: 1(A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A."
13.It is clear from the above that if such documents are not registered, then they have no effect for the purposes of Section 53A of the Transfer of Property Act. That is limited purpose for which this document will not have effect. In the present case, the plaintiff is not enforcing his right under Section 53A of the Transfer of Property Act. Instead, he wants specific performance of this very agreement, as according to him, the defendant is not coming forward to execute the sale deed and registration thereof. In essence, the plaintiff seeks to do the same in respect of which the defendant is raising an objection, namely, registration of this document by way of proper sale deed.
14.To give complete effect to the provisions of Section 1(A), the Legislature also added proviso to Section 49 of the Registration Act, 1908. Section 49 of the Registration Act deals with the effect of nonregistration of the documents required to be registered which, inter alia, provides that such a document would not be received as evidence of any transaction affecting such property or conferring such power. At the same time, this proviso amply clarifies that such a document would still be admissible as evidence of a contract in a suit for specific performance, as is clear from the reading of this proviso.
CS No. 86/10 8 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
15. The aforesaid provision has received the attention of various High Courts and is interpreted in the manner indicated above. In A. Rama Rao and others Vs Raghunath Patnaik and others, AIR 2002 Orissa 77, a Division Bench of the Orissa High Court precisely dealt with the said issue in the following manner: "Mr. Mukherjee referred to Section 35 of the Stamp Act and stated that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, unless such instrument is duly stamped.
The document Ext1 is an unregistered agreement for sale. On the basis of the said document, no right or liability is created and/or transferred, limited, extended, extinguished or recorded. Thus, Ext1 in our conscious opinion does not satisfy the definition of "instrument" which required to be stamped.
Section 17 of the Registration Act enumerates the category of documents which require registration. Section 17(1)(b) of the Act provides for registration of non testamentary instruments which purports or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property. Section 17(2)(v) of the Act stipulates that nothing in Clauses (b) and (c) of Sub section (1) of Section 17 applies to any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immoveable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest. An agreement for sale of immoveable property is a nontestamentary instrument which does not create, declare, assign, limit or extinguish, any right, title or interest, whether vested or contingent in immoveable property. Section 17(2)
(v) makes the position clear that a document not itself creating a right in immoveable property of the value of Rs. 100/ and upwards, but merely creating a right to obtain CS No. 86/10 9 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
another document which will, when executed, create any such right need not be registered. It has been held in the case of Narasimhaswamy v. Venkatalingam MANU/TN/0075/1927 (FB) that a document which does not by itself convey property but merely gives a right to call for another document does not require registration. Explanation to Section 17(2) of the Act makes it clear that even an unregistered document affecting immoveable property may be received as an evidence of contract in a suit for specific performance. This explanation was added by Section 2 of the Indian Registration (Amendment) Act, 1927. The explanation states that a document purporting or operating to effect a contract for the sale of immoveable property shall not be deemed to require or ever to have required registration by reason only of the fact that such a document contains a recital of the payment of any earnest money or of the whole or of any part of the purchase money.
Therefore, the conclusion is irresistible that the suit for specific performance can be based on an unregistered agreement. Thus, a cumulative reading of Section 17(2)(v) and the proviso to Section 49 of the Registration Act leads to an irresistible conclusion that an agreement for sale of immoveable property even though not registered, can form the basis for specific performance. The Hon'ble Single Judge was, thus, right in holding that Ext1 can be enforced. The decision of this Court reported in MANU/OR/0093/1964 also supports the above view.
We are, therefore, not agreeable to accede to the submissions advanced by Mr. Mukherjee and negative the argument that the agreement (Ext1) being unregistered and unstamped, cannot be accepted nor can be enforced."
16. Same is the thinking of the Andhra Pradesh High Court depicted in Javvadi Koteswara Rao v Sonti Sambasiva Rao, 2004(1) APLJ 186, as is clear from the following discussion therein: "11. The learned Counsel for the respondent drew the attention of this Court to a judgment of this Court in Dadi CS No. 86/10 10 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
Reddi Sivanarayana Reddy v. Kasi Reddi Chinnamma, MANU/AP/0070/2001 : 2001 (1) ALD 349, wherein a learned Single Judge of this Court while considering the scope of Sections 17 and 49 of the Act categorically laid down that when there is a description in an agreement of sale that the vendor shall execute another document at the office of the SubRegistrar as and when required, it is an indication that the document by itself did not conclusively extinguish rights in vendor, therefore, by virtue of proviso to Section 49 the said document does not require registration.
12. In the light of the provisions of the Act and the judgments referred supra, I am of the view that the agreement of sale dated 1881999 does not require registration and it can be marked on behalf of the plaintiff in the suit which was filed for specific performance of the said agreement of sale. The Lower Court was therefore right in admitting the document for the purpose of marking on behalf of the plaintiff. I do not find any infirmity or illegality in the impugned order and it needs no interference."
17. In view of the aforesaid, the present suit for specific performance can be filed on the basis of unregistered agreement of sell dated 26.10.2009. Thus, I do not find any merit in the submission of the defendant that the agreement to sell dated 26.10.2009 being unregistered and unstamped cannot create right, title or interest in favour of the plaintiff.
18. The next contention of the defendant is that the time was essence of the contract and the plaintiff never called the defendant to execute the sale deed within 6 months. Hence, the agreement has ceased due to efflux of time. It is further submitted that the plaintiff did not demonstrate proper readiness and willingness to perform the agreement to sell within the period of 6 months as time was the essence of the contract. No communication has been filed on CS No. 86/10 11 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
record to demonstrate the same by the plaintiff whereby showing that the plaintiff ever called the defendant to execute the sale deed as stipulated in the agreement.
19. The paragraph 5 of the agreement to sell stipulates "that it has been agreed between the parties that the sale deed will be executed within a period of 15 days from the date of mutation of the said land in favour of the first part/ vendor (the defendant herein). Parties to the present agreement has understood that sale deed should be executed within 6 months from today."
20. It is further stipulated in paragraph 8 of the agreement to sell "that if the vendor fails and/or neglects to complete the sale or fulfil its other obligations, under this agreement or as required by law, the vendee will be at liberty to enforce specific performance of the agreement by institution of legal proceedings and other proceedings at the risk and cost of the proposed vendor."
21. In view of the aforesaid clauses in the agreement to sell deed dated 26.10.2009, it is clear that if the agreement to sale deed was not executed by the defendant, the plaintiff becomes entitled to institute a suit for specific performance for directing the defendant to execute the sale deed in favour of the plaintiff. There is no requirement either in law or in the aforesaid agreement to sell that the plaintiff must send prior notice to the defendant. Therefore, the submission of the defendant to the effect that there is no communication of the plaintiff is totally meritless.
CS No. 86/10 12 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
22. So far as the readiness and willingness of the plaintiff for execution of the sale deed is to be established, during the course of trial, same is equally meritless in view of the fact that the entire sale consideration has already been paid by the plaintiff. The plaintiff has already performed his part and it is not disputed that the possession has also been handed over. The only thing left is the execution of the sale deed by the defendant in terms of the agreement to sell. For the same, the plaintiff cannot be said to not have shown proper readiness and willingness. No fault can be attributed upon the plaintiff. It is beyond comprehension that why the plaintiff would not be ready and willing to execute the sale deed when he has discharged all his obligations under agreement to sell dated 26.10.2009.
23. The plea of the defendant as to the agreement to sell has expired/lapsed in view of the nonexecution of the sale deed within 6 months is devoid of any merit in view of the fact that there is no law that on expiry of period stipulated in the agreement to sell for execution of sell deed, the agreement to sell would lapse. Rather the cause of action to sue for specific performance arises only after nonexecution of sale deed within the prescribed period in the agreement to sell by the seller.
24.The material on record therefore, establishes that there was a valid agreement to sell between the parties for the sale of the suit property and it was the defendant who failed to perform his part. The plaintiff is entitled to a decree of specific performance with direction to the defendant to perform his part of the contract.
CS No. 86/10 13 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
25. In these facts and circumstances, a decree of specific performance is granted in favour of the plaintiff and against the defendant directing the defendant to execute and get registered the sale deed in respect of the suit property i.e. land admeasuring 1400 sq. meters forming part of Must No.8 Kila Nos.9 min situated in the revenue estate of village Salahpur, Tehsil Vasant Vihar, New Delhi in favour of the plaintiff. The expenses of the sale deed and registration thereof would be borne by the plaintiff.
26.On perusal, it is seen that the sale consideration stipulated in the agreement to sell dated 26.10.2009 appears to be inadequate/negligible. This issue is not before me and I cannot determine the same. However, I leave it to the Sub Registrar to examine whether consideration reflected in the agreement to sell dated 26.10.2009 is adequate or not and represents market value or not, at the time when the sale deed is presented before him for registration.
27.The plaintiff is also claiming a decree for permanent injunction for restraining the defendant, its agents, employees, representatives or any body claiming through the defendant from selling, alienating or creating any third party interest in the suit property and from interfering in any manner with the possession of the plaintiff with respect to the suit property. The plaintiff has not averred on what basis/threat the said relief is sought for. For want of pleadings to this effect, such a relief is not warranted. The plaintiff is accordingly not entitled to a decree of permanent injunction as prayed for.
28. The application under Order XII Rule 6 of the Code of Civil Procedure, 1908 is allowed in the aforesaid terms. The suit is decreed in these terms under Order CS No. 86/10 14 of 15 Krishna Chaudhary vs. M/s IMB Infrastructure Pvt. Ltd.
XII Rule 6 of the Code of Civil Procedure, 1908 in favour of the plaintiff and against the defendant. Parties are left to bear their own costs. Decree sheet be drawn accordingly. Thereafter, file be consigned to the record room.
Announced in the open (SHREYA ARORA MEHTA) Court on 07.08.2013 CIVIL JUDGE1 (SOUTH DISTRICT) ( Judgment contains 15 pages) SAKET COURTS, NEW DELHI CS No. 86/10 15 of 15