Delhi District Court
Sh. Pramod Kumar Jain vs Dr. Raman Kumar Juneja on 27 September, 2018
IN THE COURT OF MR. SUNIL BENIWAL ,
ADDITIONAL DISTRICT JUDGE -02, ( CENTRAL), DELHI
Suit no. 103/16
Case No. 16661/16
1. Sh. Pramod Kumar Jain
S/o Sh. Hem Chand Jain,
R/o 32, Kapil Vihar, Pitampura,
Delhi-110034.
2. Smt. Kiran Mala Jain (now deceased)
Wife of Mr. Hem Chand Jain
died on 01.07.2017 and substituted by:
(i) Mr. Hem Chand Jain
(ii) Mr. Pramod Kumar Jain
(iii) Mr. Subodh Jain
(iv) Mr. Vinod Jain
(v) Mrs. Renu Jain
All residents of 32, Kapil Vihar, Pitampura, Delhi-110034.
3. Sh. Akhil Jain
S/o Sh. Hem Chand Jain,
R/o 32, Kapil Vihar, Pitampura,
Delhi-110034.
...........Plaintiffs
Versus
Dr. Raman Kumar Juneja
S/o Sh. Gian Singh Juneja (Gian Chand Juneja)
Resident of 20/2, Civil Lines, Raj Pur Road, Delhi-110054
Also at: Plot No. 568, Sector 21-A, Faridabad, Haryana.
.........Defendant
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 1 of 101
Date of Institution of Suit : 20.11.2009
Date of pronouncement of judgment : 29.07.2018
SUIT FOR RECOVERY OF RS.1,70,00,000/- ALONG WITH
PENDENTE LITE AND FUTURE INTEREST
Vide this judgment, I shall decide the suit of the plaintiff for
recovery of Rs.1,70,00,000/- alongwith interest pendent-lite and future.
There are three plaintiffs, plaintiff no.1 Mr. Pramod Kumar Jain, plaintiff
not.2 Smt. Kiran Mala Jain, W/o Sh. Hemchand Jain and plaintiff No.3
Mr. Akhil Jain, S/o Mr. Pramod Kumar Jain.
Facts of the plaint are as follows:
1 That the defendant is a doctor by profession. In the month of December 2007 plaintiffs were approached by the defendant. Defendant informed the plaintiffs that he is the sole and absolute owner of double storey built up property no. 20/2, Rajpura Road, Delhi with roof rights upto sky admeasuring 442 sq. yards alongwith passage ownership rights from main Rajpur right to the suit property (building known as Kailash) with freehold rights underneath and defendant expressed his desire to sell the property alongwith passage ownership right. Impressed by the offer of defendant, various meetings took place between the plaintiffs and defendant where defendant claimed, represented and informed the plaintiffs that he is the absolute and exclusive owner of the building Kailash admeasuring 442 sq. yards and that the property is free from all encumbrances. Based on the assurances of defendant, plaintiff agreed to buy Kailash building land admeasuring 442 sq yards alongwith the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 2 of 101 passage ownership right from main Rajpur Road to double storey built up property i.e. building Kailash for a total consideration of Rs.6,74,00,000/-. An agreement to sell/purchase dated 18.01.2008 was executed between the parties. At the time of entering abovementioned agreement, plaintiffs made part payment of Rs.80,00,000/-. An amount of Rs.20,00,000/- was paid in cash and remaining amount of Rs.60 lacs was paid through cheques. It is stated that, "inadvertently" in the agreement dated 18.01.2008 it was scribed that "the first party (defendant) is the owner of building known as Kailash Block situtated at Rajpura Road alongwith passage rights from main Rajpur Road to Kailash building with freehold rights of the land underneath" in lieu of "the first party (defendant) is the owner of double storey building known as Kailash Block alongwith passage ownership rights from main Rajpur Road to Kailash Building with freehold rights of the land underneath". Since the defendant always assured and represented that defendant is the owner of passage from main Rajpur Road to Kailash building i.e. 20/2, rajpur Road, Delhi with freehold rights of the land underneath, plaintiff apprised the same to defendant and defendant admitted the said mistake and agreed to execute fresh agreement inter alia modifying the words from "passage rights" to "passage ownership rights" in respect of the passage as "inadvertently" the word "ownership" was not mentioned in agreement dated 18.01.2008 viz a viz passage area from main Rajpur Road to Kailash Building.
2 As agreed, as per the assurances of the defendant, agreement CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 3 of 101 to sell dated 07.07.2008 was executed between the plaintiffs and defendant where it was specifically mentioned that defendant is the owner of Kailash Building land admeasuring 442 sq. yards alongwith passage ownership rights from main Rajpura Road to Kailash Building. In terms of agreement dated 07.07.2008 defendant agreed to sell and transfer double storey built up property i.e. Kailash Building alongwith passage ownership right for a total sale consideration of Rs.6.74 crores. As per agreed terms and conditions of agreement to sell dated 07.07.2008, plaintiff made payment of Rs.20 lacs to the defendant as earnest money and amount of Rs.70 lacs were paid as part payment.
3 It was agreed between the parties that the balance of Rs.5.84 crores shall be paid by the plaintiff to defendant on or before 18.08.2008 and defendant shall hand over the actual physical vacant possession of the Kailash Building alongwith passage ownership right. It is pertinent to mention that as per clause 7 of agreement to sell dated 07.07.2008, the parties specifically agreed "7. that in case the second party (plaintiffs) fails to make payment of balance sale consideration within a stipulated period mentioned in this agreement, in that case earnest money so paid by the second party shall be forfeited in favour of first party (defendant)".
4 Paragraph 8 of agreement dated 07.07.2008 provides "that in case first party (defendant) fails to execute sale deed of above mentioned property and get the same registered in favour of second party or his nominee then second party can claim double of the earnest money so paid CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 4 of 101 by the second party to the first party and may get the said transaction enforced through a court of law by specific performance of suit, at the risk, cost and expenses of the first party".
5 It is an admitted fact between the parties that as per the mutual understanding between the parties, time period for execution of documents was extended from 18.08.2008 to 15.09.2008 and the plaintiffs, apart from the payment of Rs.90 lacs at the time of execution of agreement dated 18.08.2008 had also paid another amount of Rs.60 lacs to the defendant. Payment of Rs.1.5 crores is an admitted fact in the judicial proceedings. The plaintiffs paid a sum of Rs.1.5 crore in the following manner:-
a. Rs.20 lacs paid in cash on 18.01.2008 b. Rs.10 lacs paid in cash on 30.06.2008 c. Cheques of Rs.60 lacs on 07.07.2008 d. Rs.60 lacs paid in cash on 07.09.2008 6 It is submitted that the defendant always represented that
alongwith Kailash Building, land area admeasuring 442 sq. yards, he was also the owner of the passage leading from main Rajpur Road to Kailash Building but in fact the defendant did not have any ownership of the passage leading from Rajpur Road to Kailash Building. Thus, the representations of the defendant emerged as false and admittedly the defendant could not execute the documents of the property i.e. Kailash Building alongwith passage ownership right as stated above. Since the defendant had no documents in support of his claim of being the owner of CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 5 of 101 passage, upon realizing that the plaintiffs have been cheated, the plaintiffs preferred a complaint before Police officials in which FIR No. 09/2009 was registered in police station Civil Lines u/s 420/406/120-B IPC. Since the defendant was not the owner of passage rights as stated above, he could not execute the sale deed as per agreement dated 07.07.2008 and therefore, failed to comply with the terms and conditions of agreement dated 07.07.2008. Therefore, as per Clause 8 of the agreement, plaintiffs are entitled to double of the earnest money i.e. Rs.40 lacs. 7 The plaintiffs are preferring the present suit for recovery of Rs.20 lacs paid as earnest money and for recovery of Rs.130 lacs paid as part payment as per agreement dated 07.07.2008 and another Rs.20 lacs as double of the earnest money. It is prayed that the court be pleased to pass a decree of recovery of Rs.1.70 crores alongwith interest pendent-lite and future from the date of filing of the suit till its realization and also the costs of the suit.
8 In his reply in preliminary objections of written statement, it is submitted by the defendant that the plaintiff is guilty of suppression- varie-suggestio falsi having approached the court with unclean hands. It is submitted that agreements dated 18.01.2008 and 07.07.2008 are hit by provisions of Indian Registration Act as they are unregistered documents and cannot be looked into evidence. It is further submitted that in contravention of the Indian Stamp Act, the agreements to sell dated 18.01.2008 and 07.07.2008 are insufficiently stamped and therefore liable to be impounded. Suit of the plaintiff is hit by Specific Relief Act. Suit of CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 6 of 101 the plaintiff is hit by Order 7 Rule 11 as it is filed without any cause of action. It is submitted that the plaintiffs have malafidely described earnest money being Rs.20 lacs whereas infact the earnest money is Rs.1.5 crores. It is a matter of record that initially in the month of December 2007, plaintiff no.1 & 3 alongwtith their property brokers approached the defendant and showed interest to purchase the suit property. In fact they were accompanied by their lawyer as well who had inspected the title documents of the suit property, took zerox copies of the same and after being satisfied, paid a sum of Rs.25 lacs i.e. Rs.20 lacs in cash and Rs.5 lacs through cheque bearing no. 225962 dated 19.12.2007 drawn on Oriental Bank of Commerce in order to repose the confidence and show their genuineness of being a genuine buyer. The plaintiffs further assured the defendant that they would get the documents of sale and purchase prepared and thereafter on 18.01.2008 the plaintiffs brought agreement to sell duly typed and further paid a sum of Rs.55 lacs by way of two cheques on which date the agreement to sell was signed. Even the condition/term under which the answering defendant permitted the plaintiffs to carry on construction in the suit property was added subsequently. Subsequently, since the plaintiffs could not succeed in fixing their ties for carrying out additional construction in the suit property, the plaintiffs stopped the payment of cheques referred above which were to the tune of Rs.60 lacs and since the agreement dated 18.01.2008 was to expire on 17.07.2008, plaintiffs with malafide intentions further requested to carry the transaction forward and sought CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 7 of 101 time and requested for the same to be reduced in writing. However on 30.06.2008 plaintiffs paid a sum of Rs.10 lacs in cash of which a receipt was also given at the back side of agreement dated 18.01.2008 and the said request to carry the transaction forward resulted into another agreement to sell dated 07.07.2008 which the plaintiffs themselves again got typed and prepared. In order to carry the transaction of sale and purchase forward, the plaintiffs paid an additional sum of Rs.70 lacs, i.e. Rs.10 lacs in cash on 30.06.2008 and Rs.60 lacs by way of cheques in order to keep the transaction alive and to carry it forward and in the agreement dated 07.07.2008 the time for execution of sale deed was fixed uptil 18.08.2008. By this time, the time period for execution of sale deed had expired. However, since the plaintiffs by this time had been arranging bank loans which had not been successful, therefore, plaintiffs requested to carry on construction/additions in the suit property at their own risk. Plaintiff paid a further sum of Rs.60 lacs in cash in the month of September 2008 in order to carry forward the transaction and keep it alive. It is submitted that the real Estate market during the abovementioned period had been fluctuating, the plaintiffs kept on extending the time period for execution of sale documents and payment of balance sale consideration. It is submitted that the plaintiffs had paid a sum of Rs.1.5 crores as earnest money in order to carry forward the transaction of sale. The plaintiffs have deliberately concealed the fact that by virtue of legal notice dated 07.10.2008, sent through their counsel, received by the defendant in the late afternoon of 14.10.2008 as a CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 8 of 101 telegram on 15.10.2008 i.e. the last date of execution of sale deed and payment of balance sale consideration, demanded that in case the defendant shall not execute the sale deed, he shall be liable to make payment of Rs.3 crores i.e. double of the earnest money of Rs.1.50 crores. Defendant replied to the same on 15.10.2008 itself and called upon the plaintiffs to get the sale transaction executed after payment of balance sale consideration thereby showing his willingness to perform his part of the agreement. It is submitted that the plaintiffs have deliberately, intentionally and mischievously concealed the abovementioned documents from the court. It is submitted that the plaint is hit by the Rule of Caveat Emptor, qui ignorare non debuit quod jus alienum emit "let the buyer beware; who ought not to be ignorant that he is purchasing rights of another and buyer beware about the thing which he wishes to purchase". The plaintiffs had properly satisfied themselves and obtained copies of the documents of title deeds and plans from the defendant, and had them inspected by their lawyer in their presence and even property brokers of the plaintiffs have lived in the suit property as tenants for about two decades and thus it cannot be presumed that the plaintiffs were not conversant and aware of the status of the suit property and the common passage which fact duly finds correct mention in agreement dated 18.01.2008 but because of the mischievous conduct of the plaintiffs, the said fact of common passage was distorted with oblique motives and rather it was the defendant who was kept in dark and made to sign agreement dated 07.07.2008 under a bonafide impression and belief that it CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 9 of 101 was in fact a verbatim and continuation of the same previous agreement dated 18.01.2008 except for mentioning and filling up new cheques numbers/details. It is submitted that the plaintiffs cannot be allowed to take advantage of their own wrongs and benefit from their misdeeds. The plaintiff because of their own conduct has broken the agreement to sell, has allowed the period of specific performance to expire because of his inability to pay periodically from time to time and has been seeking extension for payment of balance sum and kept on taking the transaction forward which was lastly extended upto 15.10.2009 and thereafter, allowed the transaction to be broken up. Thus, it was the failure of the purchaser/plaintiff who did not come forward to pay the balance sale consideration which resulted into the breach of contract and therefore the plaintiff is not entitled for the recovery of amount prayed for because the amount of Rs.1.5 crores stands forfeited being the earnest money as per the terms and conditions of agreement to sell. It is submitted that the plaintiffs firstly raised unauthorised construction in the suit property which resulted in sealing of the premises by the municipal authority giving a stigma to the suit property thereby resulting in the falling of prices of the suit property. It is also submitted that the plaintiffs got registered a FIR on the basis of manipulated and fabricated documents and concocted facts resulting into the impounding of the passport of the defendant because of which he could not visit United Kingdom during the said period and benefit of free medical facility and right to enter United Kingdom unrestrictedly has been lost CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 10 of 101 besides defamation to the status and name of the defendant. Defendant has further suffered mental torture and physical harassment apart from huge monitory losses for which a separate counter claim has been preferred by the defendant against the plaintiffs besides forfeiture of earnest money. It is submitted that the suit is bad for mis-joinder of parties as a bare perusal of agreement dated 18.01.2008 and 07.07.2008 show that plaintiff no.2 namely Smt. Kiranmala Jain w/o Sh. Hemchand Jain has never been a party to any of the agreements and as such she has no locus standi.
9 In his reply on merits, the defendant has submitted that the case of the plaintiff is false and devoid of merits. It is denied that the plaintiffs were approached by the defendant and that the defendant represented himself to be the sole and absolute owner of the suit property as alleged. It is asserted that the defendant is the sole and absolute owner of the suit property admeasuring 442 sq. yards with right of common passage from main entrance from Rajpur Road to the suit property and he has always represented so to plaintiffs no.1 & 3, since plaintiff no.2 never came forward for any negotiations or dealings. It is specifically denied that the answering defendant represented himself to be the owner of the passage from main entrance of Rajpur Road to the suit property. It is submitted that for the matter to be understood in its proper and right perspective, both the agreements dated agreement dated 18.01.2008 and agreement dated 07.07.2008 and FIR no. 09/2009 dated 14.01.2009 be read in chronological order. The defendant not having CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 11 of 101 known the plaintiffs nor having even been acquainted with them prior to 2007 when the defendant was introduced to the plaintiffs no. 1 & 3 by their own agents could not have approached the plaintiffs directly, as claimed by the plaintiffs. This claim of the plaintiffs is belied by their own claim made by them in FIR no. 09/2009 which is filed on record. On the contrary, it is the plaintiffs who approached the defendant after being briefed by their principal broker/agent Mr. Bipin Jain and Mr. Anuj Jain along with their cousin Mr. Sharad Jain. The abovementioned brokers told the plaintiffs of all relevant facts pertaining to the suit property and in particular, the size of the plot as it was clearly stated in the gift deed and the Will. Both Mr. Bipin Jain and Mr. Anuj Jain are brothers and they resided in the suit property i.e. Kailash Block for nearly 20 years until they vacated the same in November 1999. Copies of the surrender letters are enclosed. It is submitted that the plaintiffs are deliberately concealing that their interest in purchasing the suit property began in the last week of November 2007. After the initial meeting which was attended by the plaintiffs alongwith their brokers following the assurances that they received from their brokers of the clean title of ownership of the defendant alongwith the rights enjoyed by them during their stay in the defendant's property as tenants, plaintiffs not only inspected the entire file relating to the ownership of the suit property but also took a spare set of such document and thereafter inspected the premises. Following this, on several occasions the plaintiffs (as was their habit) would arrive un- announced to the premises with their wives with a view to show the place CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 12 of 101 to them. During the second week of December 2007, plaintiff no.1 & 3 arrived accompanied by their lawyers and brokers. Property broker Mr. Anish Gupta of the defendant was also present. Plaintiff no. 1 & 3 claimed that their lawyer wanted to inspect the documents. Request was allowed after which the plaintiffs and their lawyer felt satisfied. Their lawyer further insisted that the defendant should provide a No Objection Certificate from all the relatives and other owners in the entire Kothi i.e. both property bearing no. 20 and 20-A, Rajpur Road. Request of counsel for plaintiff was turned down on the grounds that since the defendant was the rightful owner, it was not incumbent upon him to go through this exercise. Defendant told the plaintiffs that they were free to get out of the property deal if they felt their requirements were not being met. Thereafter the plaintiffs alongwith their agents Mr. Bipin and Mr. Anuj Jain arrived on 19.12.2007 and in order to show their genuineness as buyer gave a token money of Rs.20 lacs in cash and Rs.5 lacs through cheque. Plaintiffs said this was a token till the agreement was drawn and expressed their wish that the defendant should not sell the place to anyone else. Said amount was handed over to the defendant in good faith though no written receipt was drawn up. It is submitted that there are tape recorded conversations, transcripts of which are submitted alongwith a compact disk.
10 That the land area admeasuring 442 sq. yards alongwith right of passage is shown in gift deed and the Will is correctly reflected in first agreement dated 18.01.2008. The claim made by the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 13 of 101 plaintiffs relating to the passage namely "passage ownership right from main Rajpur road to double storey" is false and is not shown anywhere in the gift deed or in the Will. It is submitted that it is only on account of the calculated intentions of the plaintiffs to cheat and harm the defendant because of which the defendant inadvertently missed out the fraud played upon him by the plaintiffs on 07.07.2008 at the time of the execution of the second agreement to sell dated 07.07.2008 in which the word "ownership" has been deceptively and unknowingly added to the original wording of "right of passage" the total sale consideration of Rs.6.74 crores was settled as far back as 19.12.2007 i.e. before 18.01.2008 and not on the said date, which is why they paid in advance of Rs.20 lacs in cash and Rs.5 lacs by cheque on 19.12.2007. It is submitted that the claim made by the plaintiffs that they paid Rs.80 lacs following the agreement of 18.01.2008 coming into effect on the very same date is a deliberate attempt on the part of the plaintiffs to cover up and extort the facts of the case to mislead this court as the plaintiffs having already paid Rs.20 lacs in cash and Rs.5 lacs by cheque on 19.12.2007, paid two further cheques of value of Rs.15 lacs and Rs.5 lacs respectively on 18.01.2008. It is denied that the defendant admitted that a mistake has been committed in the agreement dated 18.01.2008 and agreed to execute fresh agreement in view of any alleged mistake after modifying the words "passage rights" to "passage ownership rights". It is further denied that inadvertently the word ownership was not mentioned in agreement dated CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 14 of 101 18.01.2008 viz a viz the passage area as alleged. It is submitted that correct particulars of the property alongwith its registration numbers were mentioned in agreement dated 18.01.2008 and rather it is in agreement dated 07.07.2008, due to inadvertence on the part of defendant, the word "ownership" remained unread which infact was the mischievous invention of the plaintiffs. The answering defendant has placed on record tape recorded conversation alongwith the compact disk to establish the abovementioned fact. A bare perusal of FIR no. 09/2009 would show that the plaintiffs mentioned that "a dispute" arose which existed for nearly 6 months whereafter a fresh agreement was entered into but in the present civil case the plaintiffs have stated that the plaintiffs apprised the defendant and defendant admitted the said mistake and agreed to execute fresh agreement. It is submitted that had there been a dispute as abovementioned, the plaintiff would not have waited for nearly 6 months to get the same rectified. It is submitted that if this so called mistake was admitted by the defendant then it would not have taken the parties six months to rectify the same and if it had resulted into a dispute, then the defendant would not have executed a fresh agreement to sell dated 07.07.2008 in which he would have agreed to mention the word passage ownership rights knowingly and deliberately. It is submitted that the entire claim of the plaintiffs is concocted on account of them having purchased the non judicial stamp papers on both occasions and having got the terms of agreements themselves typed in the aforesaid manner. It is submitted that true and correct version of the terms of purchasing the suit property CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 15 of 101 were, as are correctly mentioned in the first agreement dated 18.01.2008 which agreement in fact is a correct reflection of the gift deed and Will through which the defendant inherited the suit property and copies of which were handed over by the defendant and were always in possession of the plaintiffs. It is submitted that there was never any dispute in existence with regard to passage ownership rights as alleged by the plaintiffs. The real facts are that two factors came into play, one being that since the plaintiff wanted to construct on the partly built up double storey as is clearly stated in handwriting in first agreement which the plaintiffs found out from the local corporation that they could not raise the construction and secondly because of the global recession, the property prices had begun to slump/dive, the plaintiffs began playing for time and thus started prolonging the matter. During this period, brokers of the plaintiffs, at the behest of the plaintiffs had several meetings with the defendant with a view to cajole and entice the defendant to continue the deal. It is relevant to mention that the plaintiffs though crying foul and hoarse claiming that a dispute arose as stated in the FIR or as claimed through the suit that the defendant admitted its mistake and thereafter entered into second agreement on 07.07.2008 were more than happy to part with another sum of Rs.10 lacs in cash on 30.06.2008 without even bothering to get hold of all relevant and required documents as would be expected of any aggrieved party or a diligent person, reason being that the plaintiffs were in possession of the said documents right from the beginning. It CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 16 of 101 is submitted that the plaintiffs got typed the fresh agreement dated 07.07.2008 also on their own and inserted the word "ownership" capriciously and suspiciously as the plaintiffs had assured the defendant that agreement dated 07.07.2008 was exactly the same in letter and spirit and believing the words of the plaintiffs, the defendant signed this agreement. It is submitted that if the plaintiffs' version with respect to ownership rights of the passage is taken to be true, then the surface area of the passage should also have been added to the actual measurement of the suit property which in fact comes to more than 442 sq. yards, what the plaintiffs were buying and the same should have also been mentioned and added and incorporated in the total measurement of the area being purchased by the plaintiffs and the land which the plaintiffs agreed would have gone higher from 442 sq. yards to at least about 1000 sq. yards which fact ought to have been mentioned in the agreement dated 07.07.2008, the absence of so clearly establishing that there was no such agreement, assurance, admission of mistake, since even the agreed consideration remains the same. Agreement of 07.07.2008 only came into existence because first agreement dated 18.01.2008 was coming to expiry which in hindsight, the defendant realized was a planned strategy by the plaintiffs in order to delay and enforce a second agreement through which they could try their luck by way of altering the terms of the agreement and in fact actually succeeded in duping the defendant.
11 It is correct that as per the new agreement of 07.07.2008 it CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 17 of 101 was agreed to complete the sale transaction by 18.08.2008, however, this date could not be adhered to for two reasons. Firstly, because the plaintiffs had been unsuccessful in obtaining the bank loan/mortgage for the purchase of the property for payment of balance sale consideration and secondly, because the plaintiffs insisted on being allowed to construct the first floor on the adjacent side of the premises to which the answering defendant consented also. It is submitted that first of all it needs to be established conclusively as to what was the amount agreed between the parties that would constitute earnest money. For all practical purposes, earnest money is Rs.1.5 crores. It is submitted that even a perusal of the agreements and the receipts which have been executed from time to time between the parties, amount of earnest money has been changing and increasing as the transaction of sale proceeded further. Further, the plaintiffs have never once made an issue anywhere either through their FIR or through their civil suit that this was also a matter that became disputed. It is submitted that the only concocted story of the plaintiff throughout has been the matter related to the ownership of passage which according to the plaintiffs "inadvertently" got omitted in the first agreement of 18.01.2008 thereby resulting in an alleged dispute because of which they put a stop on their cheques, which they issued at the time of execution of agreement dated 18.01.2008. Thus, having paid only Rs.20 lacs in cash in order to repose the confidence as stated above, if ever there was going to be a revival of the sale, it would be incumbent upon the plaintiffs to stand by the original amount agreed before proceeding further.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 18 of 101This the plaintiffs did, when on 07.07.2008 they signed the second agreement and handed over to the defendant a supporting letter categorically stating "to whom it may concern". This letter was specifically for the bank which required the same as per Banking Rules and which the plaintiffs after reneging from their agreement in January following the agreement reached on 18.01.2008, deliberately withheld. A bare perusal of the letter clearly states that an amount of Rs.60 lacs is being given by cheque as earnest money for the purchase of property. A simple addition of the two amounts i.e. the one forwarded on 19.12.2007 and 07.07.2008 adds upto Rs.80 lacs and further Rs.10 lacs were paid in cash uptil 07.07.2008, they, in all add up to Rs.90 lacs uptil 07.07.2008. The plaintiffs continued to pay earnest money in parts to extend and keep alive the transaction from time to time which amounts to a grand total of Rs.1.5 crores till the last extension for the time period for execution of sale deed which was lastly extended upto 15.10.2008. Since the plaintiff did not come forward with the balance amount to purchase the property, under the Clause relied upon by the plaintiffs, the plaintiffs are liable to face the consequence of forfeiture of earnest money of Rs.1.5 crores. Moreover, the same amount has been demanded by the plaintiffs from the answering defendants through their legal notice as well as their telegram dated 15.10.2008. It is specifically denied that the earnest money is Rs.20 lacs as alleged. It is specifically denied that there is any averment of earnest money being Rs.20 lacs in clause 7 of the agreement dated 07.07.2008 for the answering defendant having received the earnest CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 19 of 101 money of Rs.20 lacs only, as alleged. It is submitted that the defendant has never failed to execute documents of sale and is still ready to do so but for the conduct of the plaintiffs, who malafidely did not come forward to pay the balance sale consideration as agreed between the parties and therefore cannot be allowed to take advantage of their own wrongs and defendant is entitled to forfeit the earnest money and suit of the plaintiffs is liable to be dismissed. It is denied that there was a mutual understanding as alleged that earnest money was only Rs.20 lacs or that there was a part payment of Rs.70 lacs and further Rs.60 lacs as alleged. The defendant claims that earnest money of the sale transaction was Rs.1.5 crores which the plaintiffs no. 1 & 3 paid to the defendant. The defendant has given correct schedule. It is denied that the defendant represented himself to be the owner of the passage as alleged.
12 It is submitted that the plaintiffs managed to lodge a false FIR bearing no. 09/2009 in PS Civil Lines but till the date of filing of WS the prosecuting agency could not complete the investigation and file a chargesheet. It is submitted that in the FIR bearing no. 09/2009, the plaintiffs had alleged that a dispute had arisen between both the parties because of fraudulent misrepresentation by the defendant but strangely enough the plaintiffs no. 1 & 3 were more than happy to part with further sum of Rs.10 lacs to the defendant unconditionally despite claiming that a dispute arose immediately following the agreement dated 18.01.2008. It is stated that no man of ordinary prudence would part with a sum of Rs.10 lacs and that too in cash which CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 20 of 101 were done by the plaintiffs on 30.06.2008 while the previous agreement dated 18.01.2008 was still in force which was being challenged by the plaintiffs claiming that there was a dispute because of which reason the plaintiffs alleged that they had to put a stop on all the cheques issued both in December 2007 and January 2008. it is submitted that by any stretch of imagination, any sane person whilst writing down the said clause before parting with further money would in the least and given the fact that an alleged dispute exists, add the conditions and clause under which further money is being advanced, for his own safety and safety of the further payment that was being made. It is submitted that failure to execute the sale documents in favour of the plaintiffs, is purely because of the calculated deceit of the plaintiffs themselves, who in order to wriggle out of the agreement, on account of falling prices in the property market, on a global scale, had to invent something to make their escape. Agreement dated 18.07.2008 and 07.07.2008 are to be read in continuity and connectivity and not in isolation. It is submitted that the plaintiffs themselves through their legal notice have demanded Rs.3 crores from the defendant being double of the earnest money of Rs.1.5 crores, which legal notice and telegram the plaintiffs have deliberately intentionally and mischievously concealed and withheld in the plaint. It is denied that earnest money is Rs.20 lacs only and that Rs.1.3 crores are part payments as alleged and that the plaintiffs are entitled for double of Rs.20 lacs as earnest money. It is submitted that there was no misrepresentation or inducement from the side of defendant which can CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 21 of 101 be gauged from the fact that not only did the defendant not bother to cash in the cheque of Rs.5 lacs given to him as far back as 19.12.2007 but also the fact that he took into consideration, the cash amount of Rs.20 lacs that he received as part earnest money on 19.12.2007 when agreeing to get into agreement of 18.01.2008. Thereafter while entering into agreement dated 07.07.2008, defendant not only once again took into account all the previous payments made, but despite having been duped by the plaintiffs into believing that agreement dated 07.07.2008 was merely a repetition of the main terms and conditions of the agreement dated 18.01.2008 barring the new cheque numbers, there was no change in the sale consideration. It is the own admission of the plaintiffs that the date of completion of sale transaction was brought forward through mutual consensus. The defendant prays for dismissal of the suit on the abovementioned grounds. It is submitted that suit of the plaintiffs has no merits except for the mistake of the defendant who inadvertently could not detect the fraud played on him by the plaintiffs. Earnest money of Rs.1.5 crores has already been forfeited in terms of agreement.
13 Plaintiff no. 1 examined himself by way of evidence affidavit. In his evidence affidavit, he deposed that plaintiff no. 2 & 3 had given special power of attorney in his favour to depose on their behalf as well. Power of attorney is Ex.PW1/1. In his evidence affidavit, he deposed that defendant alongwith his property dealer Mr. Anish Kumar Gupta had approached the plaintiffs for sale of Kailash Building admeasuring 442 sq. yards alongwith passage ownership rights and based on his representations CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 22 of 101 and various other meetings between the parties, parties negotiated sale consideration at Rs.6.74 crore and entered into agreement Ex.P-1 dated 18.01.2008. The plaintiffs paid a sum of Rs.20 lacs in cash to the defendant and also issued cheques worth Rs.60 lacs and balance sale consideration was made payable on or before 15.07.2008. Soon thereafter plaintiffs realized that in said agreement Ex.P-1, inadvertently the word ownership of passage was not recorded and therefore, plaintiffs so informed the defendant and they also withheld cheque payments and dispute arose between the parties. It is deposed that defendant had specifically represented, assured and informed the plaintiffs that he was the absolute owner of the passage from main Rajpur Road to double storey built up property. In June, July 2008 parties again negotiated the sale and at this stage plaintiffs made a payment of Rs.10 lacs in cash to the defendant on 30.06.2008 who had agreed for sale of ownership rights of the said passage and the parties were ad-idem on the special matter of the proposed sale and thus executed Ex.P-2 agreement to sell dated 07.07.2008 for sale of the suit property known as Kailash Block alongwith passage ownership rights as stated above. In terms of Ex.P-2 defendant agreed. Earnest money was agreed to be Rs.20 lacs only in Ex.P-2 as per agreed terms and conditions of Ex.P-2. Plaintiffs had paid Rs.70 lacs towards part payment to the defendant out of which Rs.10 lacs were paid in cash as advance on 30.06.2008 was adjusted while Rs.60 lacs were paid by cheques as detailed in Ex.P-2. Balance of Rs.5.84 crores was made payable on or before 18.08.2008 and on the same day defendant was to CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 23 of 101 hand over actual physical and vacant possession of the sale property to the plaintiffs and also to execute sale deed on the same day. Thus, the plaintiffs paid to the defendant Rs.90 lacs in total including Rs.20 lacs as earnest money. In para 6 of the evidence affidavit, it is deposed that even though the home loan of Rs.320 lacs of plaintiff no.3 was sanctioned and the parties as per mutual understanding extended the time period from 18.08.2008 to 15.09.2008 for the possession of the property and final payment instead of 18.08.2008 at the instance of defendant. It is deposed that a note to that effect was written and signed by the parties on Ex.P-2. The plaintiffs further paid Rs.60 lacs as further part payment in cash to defendant on 07.09.2008. As per the mutual understanding again extended time period upto 15.10.2008 for possession of the property and final payment again at the instance of defendant and a note to that effect was also written and signed by parties on Ex.P-2. Thus total sum paid under Ex.P-2 is Rs.150 lacs. It is deposed that since the defendant had no right of ownership in the said passage therefore, the defendant could not execute the documents of sale and realizing that the defendant had no document in support of his claim for ownership of the said passage, the plaintiffs asked the defendant to provide photocopies of his title deeds for the portion under sale of its passage and also to produce original title deeds and the defendants were also notified at the same time that the plaintiffs were ready and willing to perform their part of contract under Ex.P-2 and that the plaintiffs were ready with the balance payment of Rs.5.24 crores and for execution of sale deeds but the defendant did not CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 24 of 101 offer the photocopies of his title deeds in the portion under sale and its passage and also failed to produce original title deeds. Even though plaintiffs were ready and willing to perform their part of contract under Ex.P-2 and were ready with balance payment of Rs.5.24 crores. Copy of such notice by plaintiffs and reminder telegram and the reply of the defendant were filed by the defendant in this case. It is submitted that the plaintiffs could not have with ordinary care discovered that the defendant was not the owner of the passage and defendant was bound to disclose the same to the plaintiffs. It is deposed that the defendant was bound to produce all document of title related to the property under sale including its passage for the examination of the plaintiffs but he failed to do so. The defendant also failed to send all relevant documents as required by the plaintiff in their notice to the defendant. The plaintiffs were cheated by the defendant and therefore, preferred a complaint to the police upon which FIR No. 09/2009 was registered at PS Civil Lines. It is deposed that defendant failed to comply with the terms and conditions of agreement Ex.P-2 by non-execution of sale documents therefore, the plaintiffs are entitled for double of earnest money. In their legal notice dated 07.10.2008 plaintiffs had filed documents showing that the balance sale consideration was ready for payment. Son namely Mr. Akhil Jain of the plaintiff is a partner in the business concern of the plaintiff namely M/s Vardhaman Industries and after execution of subsequent agreement to sell Ex.P-2 said Mr. Akhil Jain submitted an application for home loan to G.E Money Housing Finance, a unit of G.E Money Financial Services Ltd. whereby CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 25 of 101 home loan of Rs.320 lacs was sanctioned by the said finance company in favour of Mr. Akhil Jain through letter dated 10.09.2008. Sanction was accepted by Mr. Akhil Jain and original letter dated 10.09.2008 is marked as Ex.P-1/2. It is deposed that when the defendant raised frivolous disputes and failed to fulfil his obligations under Ex.P-2 said loan was canceled by said finance company through its letter dated 14.10.2008, original of which letter is Ex.PW1/3. In order to obtain refund of the processing fees paid by Mr. Akhil Jain in this regard to the said finance company, he had to take insurance policies having premium of Rs.4 lacs as per the copy of 4 pay orders dated 17.10.2008 which are Mark A to Mark D respectively. The said finance company had disbursed such loan to Mr. Akhil Jain in the sum of Rs.320 lacs vide 8 disbursement advices dated 13.09.2008 and its cheques, true copy had been filed which are Mark E to Mark L respectively.
14 It is also stated that Mr. Sunil Gupta, friend of PW1 also gave friendly loan of Rs.550 lacs vide his letter dated 05.08.2008 which is Ex.PW1/4 to buy the property under sale under Ex.P-2. It is also stated that Mr. Piyush Jain, son of PW1 also agreed to give a loan of Rs.52.8 lacs to him and Mr. Akhil Jain, for purchase of said property vide his letter dated 02.09.2008 which is Ex.PW1/5. It is also stated that besides the sum of Rs.320 lacs Home Loan and Rs.52.82 Lacs arranged from Mr. Piyush Jain to pay the balance sale consideration, the plaintiffs had with them a sum of Rs.1,61,98,847/-. Out of which PW1 had a sum of Rs.32,85,554/- with him as on 15.10.2008 while his son Mr. Akhil Jain had a sum of CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 26 of 101 Rs.62,19,115/- as on 15.10.2008 and his mother Smt. Kiran Mala Jain also had a sum of Rs.66,94,178/- with her.
15 On 15.10.2008 account balance of PW1 was Rs.9,21,913/-. Certified copy of cash book has been filed as Ex.PW1/6. Statement of account of HDFC Bank savings account having balance as on 15.10.2008 of Rs.4,46,852/- is Ex.PW1/8, Oriental Bank of Commerce savings account was having balance of Rs.2,15,041/- as on 15.10.2008. Statement is Ex.PW1/9. Statement of account of FDR account of Oriental Bank of Commerce savings account was having balance of Rs.79,800/- is Ex.PW1/11. Statement of account of second FDR account with Oriental Bank of Commerce having balance of Rs.58,599/- is Ex.PW1/12. Third FDR account having balance of Rs.1,23,397/- of Oriental Bank of Commerce is Ex.PW1/13. Certified copy of cash book of son of PW1 namely Piyush Jain having balance of Rs.40,55,177/- on 15.10.2008 is Ex.PW1/14. Statement of account of savings bank of Mr. Piyush Jain with Oriental Bank of Commerce having balance of Rs.1,00,191/- is Ex.PW1/16. Statement of account of Oriental Bank of Commerce FDR account having balance of Rs.5,24,264/- of Mr. Piyush Jain is Ex.PW1/17. Second FDR of Mr. Piyush Jain having balance of Rs.53,316/- is Ex.PW1/18. Third FDR having balance of Rs.5,49,825/- is Ex.PW1/19. Plaintiff has also filed certified copy of cash book of his other son Mr. Akhil Jain who was having Rs.17,07,700/- as on 15.10.2008, copy of which is Ex.PW1/20. Another PNB savings account of Rs.27,347/- and having in its Auto Sweep Account showing balance of Rs. 35,65,000/-
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 27 of 101(total of Rs.35,92,347/-) of Mr. Akhil Jain are Ex.PW1/22 and Ex.PW1/23. Plaintiff has also filed statement of account of wife of Mr. Akhil Jain namely Ms. Nikita Jain with Oriental Bank of Commerce having balance of Rs.24,052/- as Ex.PW1/24. FDR Account of Mr. Akhil Jain with Oriental Bank of Commerce showing balance of Rs.3,95,146/- is Ex.PW1/25. Second FDR of Mr. Akhil Jain with Oriental Bank of Commerce showing balance of Rs.4,46,165/- as Ex.PW1/26. Third FDR with Mr. Akhil Jain with Oriental Bank of Commerce showing balance of Rs.53,705/- is Ex.PW1/27. Certified copy of cash book of Ms. Kiran Mala Jain, mother of PW1 Mr. Pramod Kumar having balance of Rs.59,07,089/- on 15.10.2008 is Ex.PW1/28. Statement of account of savings account of Ms. Kiran Mala Jain is with Oriental Bank of Commerce showing balance of Rs.21,650/- is Ex.PW1/30. Second savings account of Ms. Kiran Mala Jain showing balance of Rs.2,16,273/- is Ex.PW1/31. FDR account with Oriental Bank of Commerce showing balance of Rs.98,081/- of Ms. Kiran Mala Jain is Ex.PW1/32. Second FDR account with Oriental Bank of Commerce showing balance of Rs.58,421 is Ex.PW1/33. Third FDR showing balance of Rs.2,15,426/- is Ex.PW1/34. 4Th FDR account showing balance of Rs.1,77,238/- is Ex.PW1/35.
16 PW1 deposed that plaintiffs are entitled to total of earnest money of Rs.20 lacs paid to the defendant i.e. Rs.40 lacs in addition to the refund of prior payment of Rs.130 lacs. In total, plaintiffs are entitled to decree of Rs.170 lacs with costs against the defendant which includes interest pendentalite and future at prevailing market rate of 18% per CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 28 of 101 annum. It is deposed that plaintiffs have legal charge over the property under sale to the extent of money paid by them to the defendant in anticipation of delivery and interest accrued thereon with cost. Plaintiffs are ready with full payment to buy all the property in question even today in case the defendant is able to transfer ownership rights of the plaintiff together with the ownership of its passage. Suit was filed by the plaintiffs on 18.11.2009 and after four weeks defendant agreed to refund all money received by him as per order dated 15.12.2009 passed by Hon'ble High Court in Criminal Misc. No. 3022/2009. Plaintiff even deposited a sum of Rs.50 lacs in the Hon'ble High Court voluntarily in terms of order dated 15.12.2009. Plaintiff is entitled to release of all this amount of Rs.50 lacs in his favour and to further direct the defendant to deposit another amount of Rs.80 lacs. In the absence of ownership rights over the passage in question, there is no independent passage to the property under sale. Since the defendant was not in a position to transfer the ownership rights of the abovementioned passage of the property under sale, the plaintiffs properly declined to accept the delivery as in the absence of independent passage, plaintiffs could not have enjoyed the property under sale in an optimum manner despite spending Rs.7 crores. No lawyers ever accompanied the plaintiffs in December 2007 or on 19.12.2007 or at any point of time to meet the defendant and therefore question of inspecting documents or taking their copies does not arise.
17 It is denied that the estate market was fluctuating. Plaintiffs had not broken agreement Ex.P-1 or Ex.P-2 by their conduct and they CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 29 of 101 never allowed the time period to expire and were never seeking extension of time to make the payment. Even otherwise, defendant has not suffered any loss by alleged breach of contract and in fact the defendant is guilty of causing breach of contract and failure of Ex.P-2. Therefore, defendant has no right to forfeit the money of plaintiff paid Ex.P-1 and Ex.P-2. Defendants have never given possession of the property under Ex.P-1 or Ex.P-2 to the plaintiff therefore the question of any construction of such property by the plaintiffs does not arise. No separate set of documents showing title of defendants over the passage or the said property were inspected by the plaintiffs or given to the plaintiffs by the defendant. The alleged tape recorded conversation/transcripts are vague, false and fabricated by the defendants and also against the facts of the case and are not reliable being subjected to cuts and pastes. It is submitted that the chargesheet with respect to criminal case no. 09/2009 of PS Civil Lines has already been filed by the plaintiffs against the defendant. But what is the fate and final outcome of that chargesheet has not been told by the plaintiffs. It is deposed that document filed by the defendant in the name of Mr. Akhil Jain bearing date of 07.07.2008 is false and illegal and is not binding upon the plaintiffs as there was no occasion or need for its issuance.
18 PW1 tendered his evidence affidavit as Ex.PW1/A. PW1 was thoroughly cross examined by the defendants. PW1 relied upon Ex.P-1, Ex.P-2 and documents marked as Ex.PW1/1 to Ex.PW1/36. Documents Ex.PW1/1 to Ex.PW1/36 were objected to on the ground of mode of CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 30 of 101 proof. PW1 was the only witness that was examined by the plaintiffs. PW1 is in the business of manufacturing of electrical appliances. During his cross examination, PW1 deposed as follows :-
19 He deposed that he owns business premises and also residential property in Pitampura. Factory of PW1 is in Rajasthan Udyog Nagar. Other factories are in Delhi. One in Badli Industrial Area, one more factory at Rajasthan Udyog Nagar, Delhi, all relating to electrical appliances. PW1 deposed that he is aware of property prices in Delhi. Witness deposed that the prevailing prices of property at the time of sale purchase of the suit property was Rs.1.5 lakh per sq. yard. He visited the suit property about 5 to 6 times between 2007-2008. PW1 came to know about the property being available for sale through Mr. Anuj Jain and Nr. Anish Gupta who are the brokers. PW1 knows them since November- December 2007. Witness deposed that he did not know the defendant prior to the sale. It is correct that all negotiations for the present deal were held at Rajpur Road. The suit property under sale is about 442 sq. yds. Plus passage from main Rajpur Road to the suit property. Witness cannot give any approximation of the passage from main Rajpur Road to the suit property as he has not measured it. Witness was put a specific question that he never measured the passage leading to the suit property from main Rajpur Road because the passage was never part of the deal to which the witness replied that passage was part of the deal but he did not measure it. This fact seems unbelievable. In his next line of deposition witness deposed that the witness has even never measured the suit property.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 31 of 101Witness was asked as to on what basis the witness had deposed that the suit property is 442 sq yards to which witness deposed that the defendant told him that the area of suit property is 442 sq. yards. In the next line, witness deposed that his deal is for 442 sq. yards i.e. the suit property and also the passage from main Rajpur Road to the suit property. Witness deposed that the distance from main Rajpur Road to the suit property is 30-40 meters approximately.
20 It is correct that there are other properties in the same complex. The width of the passage is approximately 8-10 yards. Witness was asked a specific question that in the earlier part of his cross examination, witness has deposed that he did not measure the passage therefore witness was asked that if this passage was part of the deal and if it was so important then why did the witness not measure it, to which witness replied that the passage is passage. One cannot build anything on it and therefore, witness never measured it. When the deal was happening the defendant and the brokers told him that nothing can be built on the passage. Witness denied the suggestion that this passage was not part of the deal and was common easementary right of the other property owners also, hence it could not be sold and no construction could have taken place on the said passage. Family of the witness owns about 3 to 4 other residential properties. In relation to the joint residential properties, PW1 had prepared the agreement to sell but witness deposed that with respect to this property he did not prepare the agreement to sell. Education qualification of this witness is B.Tech. Witness deposed that he inspects CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 32 of 101 the title deeds in some transactions but not in other transactions. In response to question no. 37 of cross examination dated 29.01.2014. Witness deposed that he was shown the title deeds at the time of negotiations of the present transaction (from this part of deposition, it is clear that there was no room for error with respect to the ownership of the passage rights as alleged as the witness had in fact seen the title deed at the time of negotiations). In response to question no. 41, witness deposed that the defendant did not contact him directly and that witness was contacted through Mr. Anish Gupta and Mr. Anuj Jain i.e. the brokers. At this stage, witness was confronted with para 3 of the plaint which statement is in contradiction with abovementioned deposition of the witness to which witness replied that out of the two statements made in para 3 of the plaint and in response to question no. 41 of the cross examination, the correct statement is that plaintiff approached the defendant through the broker.
21 Witness was also confronted with Ex. P-3 which is FIR No. 9/2009 with portion marked from point A to A at page no. 29 in which it is stated that in the month of January 2008 the property dealer Mr. Bipin Jain approached the witness. Witness was asked as to who amongst Mr. Bipin Jain and Mr. Anuj Jain approached the witness to which witness replied that both Mr. Bipin Jain and Mr. Anuj Jain approached him together as they were brothers. Witness was again asked the question that in para 3 of FIR Ex. P-3 it was stated that the defendant/brokers approached the plaintiff in the month of December 2007. Whereas in FIR Ex. P-3 at point CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 33 of 101 A to A it was stated by the witness that Mr. Bipin Jain approached the witness in the month of January 2008. Witness was asked as to what statement was correct, one made in the FIR or one made in para no. 3 of the plaint to which witness replied that both the statements were correct. Witness does not remember as to when he was approached for the first time in relation to this deal. Witness was given a suggestion that the defendant was approached for the first time in the December 2007 and the payment of Rs. 5 Lakh was made to the defendant to which witness replied in affirmative. Witness deposed that apart from above mentioned Rs. 5 lakh he had also paid Rs. 20 Lakh in cash in December 2007. Witness does not remember whether he took receipts for the above mentioned payments of Rs. 5 lakhs and Rs. 20 lakhs (This fact is also strange as the witness is B. Tech and a businessman and he does not remember whether he had taken receipt for payments of Rs. 5 lakhs and Rs. 20 lakhs). In his very next line witness deposed that it is correct that he did not take the receipts of Rs. 5 lakhs and Rs. 20 lakhs as he was satisfied with the title of the property. Stamps Paper Ex. P-1 was not purchased by the witness and witness could tell who purchased this stamp paper. It is correct that witness resides at Pitam Pura. Witness was confronted with page 2 of Agreement to Sell dated 18.01.2008 from the defendant's documents, wherein the stamps paper is purchased from a vendor in Pitam Pura, to which witness replied in affirmative that it is correct.
22 Witness deposed that stamp paper was either purchased by CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 34 of 101 the property dealer or by the defendant. (This statement also appears to be unbelievable as in the normal course of practice the stamp papers are always purchase by the purchaser of the property and not by the seller). Witness was put specific question that defendant could not purchase the stamp paper from Pitam Pura as he is resident of Civil Lines which is close to Tis Hazari Courts, to which witness replied that one can purchase stamp paper from anywhere in Delhi. It is correct that plaintiff paid Rs. 80 Lakhs under Agreement dated 18.01.2008 Ex. P-1. Witness deposed that it is correct that Rs.80 lakh was paid towards earnest money under Ex.P/1. Witness knows the difference between earnest money, part payment and advance payment as deposed by him in response to question no. 62. Witness was confronted with statement made from point B to B in FIR Ex.P/3 wherein it is mentioned that Rs.80 lacs was paid towards part payment at the time of agreement to sell however, in the earlier part of testimony, he had stated that Rs.80 lakhs was paid towards earnest money, witness was asked as to which of his abovementioned statements are correct to which witness gave an evasive reply and deposed that he had paid Rs.80 lakhs. Witness did not clarify despite being put a specific question. Witness was again asked the same question and witness again gave evasive reply "80 lacs was paid". Witness confirmed that the receipt at page no. 67 of defendant's documents which is Ex.PW1/X1 was the same receipt of Rs.80 lacs. Witness does not remember if he had the original of said receipt and deposed that the original may have been torn of. Witness deposed that he CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 35 of 101 did not get agreement dated 18.01.2008 typed himself and denied that the agreement to sell was got prepared by him and under his instructions. It is correct that witness read the agreement to sell before signing the same. (In view of the statement Court does not understand that if the witness had read the agreement to sell before signing it, then where was the confusion with respect to ownership of passage rights as the witness himself is admittedly a Bachelor of Technology Graduate and a businessman).
23 Witness admitted that it is correct that a couple of clauses were additionally written in agreement to sell Ex.P/1. Couple of clauses were written by hand and they were not typed. It is correct that the hand- written additions were written by Mr. Vinod Gupta who is the brother in law of his brother Mr. Vinod Jain. It is correct that Mr. Vinod Gupta resides in Civil Lines. It is incorrect to suggest that Mr. Vinod Gupta took active participation in this deal. Witness was asked if he knew the meaning of words "ad idem" to which witness replied that he knew the meaning and it means "to the knowledge of all". Witness deposed that he does not remember whether he suggested any change in Ex.P/1 which is agreement dated 18.01.2008 and in the next line, witness deposed that it is correct that the handwritten clause in Ex.P/1 were carried out on his suggestions. Witness again volunteered that the handwritten clauses were carried out with consent of both the parties. Witness deposed that the construction stated in clause 8 of Ex.P/1 was not carried out by him. Witness again pointed out in document from record evidencing the fact CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 36 of 101 that agreement to sell was bad as passage of ownership rights were not mentioned. Witness volunteered to depose that he verbally told the defendant and therefore stopped the cheque payments. It is wrong to suggest that property prices fell in the month of January to June 2008. Witness deposed that he could not point out any document from record however, he verbally asked Rs.20 lacs to be returned. Witness paid Rs.10 lacs on 30.06.2008 only because defendant agreed to give ownership rights of the passage. Receipt of Rs.10 lacs was recorded on 30.06.2008 on Ex.P/1 because it was mutually agreed that ownership rights will be mentioned in the new agreement. The transfer of passage ownership right was not recorded in Ex.P/1 on 30.06.2008 as a new agreement was to be executed. (Court also finds it difficult to believe that when addition of new clauses was being made by handwritten mode on Ex.P/1 and further payment of Rs.10 lacs was made by the witness to defendant on 30.06.2008 then what was the hitch in recording this term of alleged transfer of passage ownership right also if the parties were "ad idem" as per testimony given by this witness?).Witness denied the suggestion that transfer of ownership of passage was not recorded in Ex.P/1 on 30.06.2008 as it was not an issue and the same agreement was to continue. Witness was put a specific question as to why did the witness remained silent from January 2008 to June 2008 when the witness knew within a couple of days of signing the agreement that the agreement is bad, to which witness replied that he was verbally asking the defendant to return Rs.20 lacs and the defendant assured him that CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 37 of 101 he will make solution of the passage or otherwise return the money. (over here in answer no. 98 the witness has somewhat reconciled to the fact as per his own deposition that defendant was not the owner of passage rights which is the bone of contention in the present case and that the defendant assured him to make some kind of solution with respect to the passage. This testimony is also unbelievable, what kind of solution defendant would have given to the plaintiff if he was not the owner of the passage in dispute?).
24 Witness cannot point out from any document on record to show that he had the requisite money to complete the deal because the deal was in turmoil. Witness applied for a home loan after new agreement dated 07.07.2008 Ex.P/2. Witness does not remember as to what documents pertaining to the suit property were shown to the witness during negotiations. Witness could not tell as to when witness asked for the documents from the defendant even after reading the plaint. Witness denied the suggestion that copies of title documents were handed over to the plaintiff and that is why the same has not been mentioned in the plaint. It is correct to suggest that the defendant was a stranger to the plaintiffs prior to 17/18.12.2007. Witness gave Rs.20 lacs in cash to the defendant without taking any receipt for the same. Receipt of Rs.10 lacs on 30.06.2008 was obtained so that one does not forget the said payment having been made. Rs.20 lacs in cash were paid to the defendant at the suit property but witness does not remember where Rs.10 lacs were paid. Witness deposed that even after giving time to the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 38 of 101 witness, witness was not able to remember where Rs.10 lacs were given to the defendant. Witness did not compare the contents of agreement to sell Ex.P/1 with the title documents of the suit property at the time of signing Ex.P/1. Witness does not know whether his broker have copies of the title deeds. Witness applied for the home loan after 07.07.2008. Home loan was sanctioned to the witness through sanction letter Ex.PW1/2 dated 10.09.2008. Witness deposed that the plaintiffs were ready with the money payable under agreement to sell Ex.P-2 between 10 to 15 th August 2008. Witness deposed that there were other sources other than home loan to meet the obligations to pay the balance amount of Rs.5.84 crores under the agreement to sell Ex.P-2. Witness has pointed out documents dated 05.08.2008 Ex.PW1/4. Witness deposed that plaintiffs have not filed any document to show that Mr. Sunil Gupta, scribe of the letters did possess the requisite funds as per letter Ex.PW1/4.
25 Witness denied the suggestion that Ex.PW1/4 has been procured just for the purpose of the suit. Witness deposed that Mr. Sunil Gupta has not transferred any amount to the account of plaintiff on or before 15.08.2018 or thereafter. A specific question was put to the plaintiff witness who is also plaintiff no.1 that the plaintiff did not possess the requisite funds in their account to make the balance payment to the defendant on or before 15.08.2008 to which witness replied that he did not have the requisite funds in the account of the plaintiff on 15.08.2008 because the agreement was extended to 15.09.2008. Witness denied the suggestion that the date was extended to 15.09.2008 because the witness CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 39 of 101 did not have the requisite funds to meet his obligations under the agreement to sell. Witness deposed that the reason for applying for home loan was that the interest on home loan was cheaper. Witness does not remember the interest rate of home loan. Witness does not remember whether Mr. Sunil Gupta was to charge interest at a lower rate than that of GE Money. Witness is confronted with Ex.PW1/2 and Ex.PW1/4 where the interest rate is indicated as GE Money Floating reference rate @ 16.75 per annum. Rate of interest calculated at monthly rests @ 11.8% per annum and Ex.PW1/4 where interest rate is specified at 14% per annum. Witness was given suggestion that the home loan applied by the plaintiff was at higher rate then what was offered to the witness under Ex.PW1/4 which suggestion was denied by the witness. Witness received letter Ex.PW1/4 from Mr. Sunil Gupta by hand. Witness does not know whether Mr. Sunil Gupta is in the business of lending money in the market. Witness received document Ex.PW1/4 one or two days after the date of letter. Mr. Sunil Gupta came to the office of the witness to deliver letter Ex.PW1/4 by hand. Witness was asked a specific question as to why did the witness not mention Ex.PW1/4 either in his plaint or FIR when it was available with the witness within 2-3 days from 15.08.2008, to which witness replied that he had stated that he was ready with the money therefore he did not refer to this document Ex.PW1/4 by Mr. Sunil Gupta. 26 Witness had shown Ex.PW1/4 to his advocate at the time of preparation of plaint. Witness did not file letter Ex.PW1/4 at the time of filing of the suit upon instructions of his advocate regarding CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 40 of 101 filing of documents. Witness denied the suggestion that letter Ex.PW1/4 was not in existence at the time of filing of the plaint and the FIR and has been procured subsequently only for the purpose of evidence. Witness does not remember the exact date that he approached Mr. Sunil Gupta for the purpose of obtaining loan. Witness had not submitted the title deeds of the suit property along with his loan application form to GE Money since the defendants may have given it directly to GE Money. Witness was put a specific question no. 145 that when home loan is applied, photocopy of title deeds is a mandatory requirement to be given along with loan application to which witness replied that GE Money did not ask for the title deeds from the plaintiff. Witness deposed that he submitted the financial statement of his company Vardhman industries and agreement to sell Ex.PW1/2 along with his loan application. Witness deposed that GE Money had sanctioned the loan only after conducting due diligence and after verification of title documents. (This point is also very relevant). Witness did not submit any sanction plan with GE Money after Ex.PW1/2. The loan which was sanctioned got cancelled through letter dated 14.10.2008, Ex.PW1/3 because of dispute between the plaintiff and defendant. Plaintiff was confronted with documents marked E to L at pages 82 to 89 and marked as D to D and asked as to who had done the blackening of cheque numbers to which witness replied that GE money would have done it. Witness was confronted with his own document Ex.PW1/X-2 as per which the loan money of Rs.320 lacs has not been transferred CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 41 of 101 to the bank account of any of the plaintiffs. Witness does not remember when he informed GE money about the dispute between the plaintiff and defendant but the date could be 8th or 9th October 2008. Plaintiff did not purchase the requisite stamp paper for execution and registration of sale deed as is answered in question no. 166. Witness deposed that he did not go to the Registrar office for execution of sale deed on 15/16.10.2008. Witness was asked whether he went to the registrar office without purchasing the requisite stamp paper required for registration of sale deed to which witness did not reply directly and gave an evasive reply and when this question was repeated, witness replied that it is correct that he went to the registrar office without the requisite stamp papers. Plaintiff denied the suggestion that they never purchased stamp paper because they never intended to go ahead with the sale transactions.
27 Witness is confronted with document Ex.P/3 marked as D to D and asked if the witness could show any document from record which would show that the plaintiffs were ready with requisite funds to go ahead and complete the sale transaction as stated in Ex.P/3 from point D to D to which witness replied that except that Ex.PW1/4 which is letter from his friend Sunil Gupta, Ex.PW1/2 which is a sanction letter from GE Money and Ex.PW1/6 to Ex.PW1/35 statements of accounts, no other documents have been filed by the plaintiffs. Document Ex.PW1/6 has not been written by this witness personally but has been prepared by his accounts person. Witness is aware of the transaction recorded in Ex.PW1/6. Witness was shown document Ex.PW1/6, Ex.PW1/7, Ex.PW1/14 & CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 42 of 101 Ex.PW1/15 and asked if he could show from the above documents if any payment was made to the defendant to which witness replied in negative. Witness deposed that he had not personally taken the print out from the printer of Ex.PW1/8 to Ex.PW1/13, Ex.PW1/16 to Ex.PW1/19, Ex.PW1/22 to Ex.PW1/27, Ex.PW1/30 to Ex.PW1/35 being bank statements. Witness deposed that out of the special conditions mentioned in Ex.PW1/2 at point A to A, witness fulfilled condition no. 2, 5, 6 & 8 at a later stage. Witness deposed that he did not fulfill the rest of the conditions other than condition no. 2, 5, 6 & 8 because he did not possess required documents. There is no letter/document on record to show that the plaintiffs requested the defendant to hand over these documents.
28 During further cross-examination of PW1, PW1 deposed that it is not the normal practice that at the time of execution of agreement for the sale of property, the seller hands over to the buyer a photostat copy of the earlier documents of title of the property. Clause 4 of the special conditions of GE money housing finance uses the words "subject to positive verification of all documents provided". Witness deposed that he had not provided any document to GE money housing finance. Even plaintiff no.3 Mr. Akhil Jain did not provide copies of the title deeds. GE Money housing finance sanctioned a loan to Vardhman Industries after taking on record financial record of Vardhman industries. Witness deposed that title deeds and bank account number of the defendant were provided by the defendant. In his very next line of CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 43 of 101 deposition, witness deposed that he does not know if the title deeds of the property were provided to GE Money. Witness was put a specific question that copies of title deeds were handed over to the witness and that is why details of the suit property are correctly mentioned in Ex.P-1 and Ex.P-2 to which witness replied that he has not prepared Ex.P-1 and Ex.P-2 and the documents might have been prepared either by the seller or by his associates. Witness deposed that it is correct that the original of agreement to sell Ex.P-1 as well as Ex.P-2 were kept by the witness. Witness was put a specific question whether a witness can point out any document from the record to show that ownership of the passage vested in the defendant other than page 2 of Ex.P-2 to which witness replied that no other document was shown to him but defendant verbally told him several times about his ownership of the passage. Witness was again asked this question to which witness replied that he does not know. Witness denied the suggestion that page no. 2 of Ex.P-2 was fabricated at the instance of this witness but admitted that it is correct that font of page no.2 of Ex.P-2 is different from the other pages of Ex.P-2. Witness deposed that Rs.20 lacs paid around 18/19.12.2007 might have been paid as earnest money. A separate receipt was not issued in this regard. A specific question was put to the witness that various separate receipts were issued by defendant in favour of the witness and that the above mentioned statement made by the witness during his cross- examination that no separate receipt was issued in regard to the payment of Rs.20 lacs is incorrect. This suggestion was denied being incorrect CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 44 of 101 by the witness but then at that very stage the witness was confronted with document Ex.P-6 which is receipt of the payment to which witness replied that receipt Ex.P-6 was executed along with agreement Ex.P-2. Witness could not recollect whether the gift deed dated 10.12.1969, Will dated 11.07.1973 and sale deed dated 27.06.1950 were shown to this witness in the month of December 2007 to January 2008 prior to execution of first agreement to sell Ex.P-1.
29 Witness was asked a specific question whether he made any inquiry from any neighbor about the correct position with respect to the ownership of the passage after signing the first agreement Ex.P-1 when the witness came to know that passage ownership was not recorded in the said agreement to which witness replied in negative. Witness did not enquire from any neighbor about the passage. It was in the last week of September 2008 that it was for the first time that witness learnt that the defendant was not the owner of the passage of the suit property. Witness denied the suggestion that earnest money was Rs.1.5 crores as stated by the witness in Ex.P-3 and also in the legal notice dispatched by the witness to the defendant. Witness was asked a specific question as to on what basis the plaintiff had claimed Rs.3 crores from the defendant as mentioned in Ex.P-3 and also mentioned in legal notice and telegram dated 15.10.2008, to which witness replied that since he paid Rs.1.5 crores to the defendant he claimed double of that amount. Witness could not tell under which clause of Ex.P-2 he had claimed an amount of Rs.3 crores from the defendant. Witness deposed that earnest CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 45 of 101 money was Rs.20 lacs.
30 Witness was put a specific question with respect to his notice dated 07.10.2008 as per which witness had alleged that the defendant is liable to pay a sum of Rs.3 crores i.e. double the amount already paid to the defendants in terms of clause 8 of the agreement to sell dated 07.07.2008, to which witness replied that he does not understand legal terms of the facts mentioned in legal notice. Witness deposed that he had not filed the legal notice dated 07.10.2008 and also telegram dated 15.10.2008 along with plaint as per legal advice. Witness does not remember if he had showed the legal notice and telegram to his counsel before filing the suit. Witness was put a specific question that he did not write the legal notice as well as telegram along with suit as in the abovementioned two documents the earnest money has been recorded to be Rs.1.5 crores to which witness replied that that was not the intention of the witness in not filing the abovementioned two documents along with the plaint. Witness deposed that it was the dispute of ownership of passage from main Rajpur road and the earnest money which led to execution of agreement Ex.P-2 after filing of first agreement to sell Ex.P-1. Witness deposed that as per Ex.P-1 earnest money was Rs.80 lacs. Witness could not show any document on record as per which prior to 07.10.2008 there was any dispute with regard to either the passage leading upto the suit property from main Rajpur Road or earnest money. Witness did not write any letter to the defendant regarding the dispute of ownership of passage despite the fact that the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 46 of 101 ownership of passage is central issue in dispute that was specifically raised between the plaintiff and defendant which led to solution of present deal. Witness denied the suggestion that there was no dispute with respect to ownership of passage between both the parties. Witness never sent any notice to the defendant for refund of Rs.40 lacs and the witness only asked verbally to refund the money. Witness was put a specific question that neither any notice was sent for title deeds nor for refund of Rs.20 lacs as there was no dispute with respect to either of them to which initially witness replied that there was no dispute but subsequently volunteered to say that he could not understand the question to which he replied. The question was again asked to which witness replied that defendant was verbally asked that he would come out with solution of the passage or refund the money, therefore, witness did not send any notice to the defendant. In his very next line of deposition, witness again deposed that his dispute is with regard to passage only and not with regard to earnest money. Witness was put a specific question that the abovementioned deposition of the witness meant that there was no dispute about the copies of title deed being handed over to the witness on or before 18.01.2008 or thereafter to which witness replied that it is correct. 31 Now this part of testimony of witness is in complete contradiction to his earlier testimony given before. Thereafter, witness could not recollect the answers to most of the questions asked by counsel for defendant. Mostly the witness deposed that he did not purchase the requisite stamp paper as the defendant was not able to produce the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 47 of 101 document required by the witness in his legal notice. The relevant part of testimony of cross-examination of PW1, the sole witness examined by the plaintiffs is over.
32 Defendant examined himself by way of evidence affidavit Ex.DW1/A. He deposed that the suit property was purchased by maternal grandfather of the deponent DW1 on 27.06.1950. Sale deed dated 27.06.1950 is Ex.DW1/1. On 10.12.1969 Dr Mathra Das Pahwa gifted the property to his wife Smt. Kaushalaya Devi Pahwa. Gift deed is Ex.DW1/2. Smt. Kaushalaya Devi Pahwa (Nani of the deponent) executed a Will dated 11.07.1973 in favour of the deponent which was registered on 24.09.1973. Through this Will she gifted the suit property alongwith easementary rights from main gate Rajpur Road. Will dated 11.07.1973 is in Urdu and is Ex.DW1/3. True translated copy is Ex.DW1/3A. On 23.03.1979 MCD issued letter of mutation in the name of deponent and by virtue of the said mutation deponent became the sole and absolute owner of the suit property with easementary rights from main gate Rajpur Road. Mutation letter dated 23.03.1979 is Ex.DW1/4. Deponent uncle Dr. R.L Pahwa being the attorney holder was looking after the suit property as deponent was settled abroad and working as a doctor for National Health Services in UK. Property dealers of the plaintiff namely Mr. Bipin Jain and Anuj Jain are sons of Mr. Brij Bihari Lal Jain and they also lived in the suit property with their families and were fully aware of the title possessed by the deponent alongwith having enjoyed the rights of the property in question. To reach the property in question, one enters from CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 48 of 101 main Rajpur Road with common passage. About 14-15 meters on the right there is a big gate about 8-9 feet wide leading to the main kothi which is occupied by some of the LRs of late Mathra Dass Pahwa. Ex.DW1/9C shows one gentleman Mr. Arun Pahwa with whom the plaintiffs are well acquainted entering his main kothi from the interconnecting gate from the common passage. The said gate is so evident and prominent that no one can miss noticing it that it is interconnected and leads to the main kothi and not to the property in question.
33 After serving the National Health Service in UK for 30 years, the deponent returned to India to spend time with his mother. Deponent's mother was living in Faridabad. Deponent owned a 1000 sq. yds. Plot in Faridabad and decided to construct a new house there. The said construction began in the year 2007 and since the brokers came to know that the deponent was to shift to Faridabad they started approaching the deponent to sell the house. In second week of December 2007 plaintiff no. 1 and 3 alongwith their property dealer namely Mr. Bipin Jain and Mr. Anuj Jain approached the deponent for buying the property in question. In the first meeting itself, deponent informed the plaintiff that he was absolute owner of property in question alongwith right of easement/passage from main Rajpur Road. Plaintiffs asked for all the documents of title deed such as sale deed, gift deed, Will, mutation letter etc. and were also supplied the same. These letters clearly show the deponent to be owner of suit property with right of easement to the common passage from main Rajpur Road. Plaintiffs inspected the title CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 49 of 101 documents and also took a full set of Xerox copies thereof. Plaintiffs visited on two more occasions alongwith their family members to see and inspect the premises alongwith their legal advisor and agent to inspect the property documents. After being satisfied and being fully aware of the facts relating to the suit property they left with a full set of all relevant property documents.
34 On 19.12.2007 plaintiffs arrived late in the evening and announced as was their habit alongwith their brokers Mr. Bipin and Mr. Anuj Jain as well as broker of the deponent Mr. Anish Gupta and claimed that they were interested in purchasing the suit property. After some discussion the price of the property was settled at Rs. 6.74 Crores. Even without the deponent asking for any deposit since there was no agreement in hand, plaintiffs persisted that the deponent accept Rs. 20 Lacs in cash and also handed cheque of Rs. 5 Lacs dated 19.12.2008 bearing No. 225962 as token of earnest money. This was towards the earnest money of Rs. 1 Crore agreed to be paid at the time of signing of the agreement. It was explained to the plaintiffs that since the deponent was in the middle of building his house at Faridabad, it will not be possible to complete the transaction straight away and therefore a period of six months was required, the same was agreed to. Thereafter the plaintiffs had almost a month to satisfy themselves if they so wished. Even though the deponent could have encashed the cheque of Rs. 5 lacs they did not do so and waited for about a month for execution of agreement to sell. Agreement to sell dated 18.01.2008 Ex. P-1 was CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 50 of 101 entered and on the same day plaintiffs paid sum of Rs. 55 lacs by two cheques dated 18.01.2008 and it was specifically mentioned in the agreement to sell dated 18.01.2008 that the amount of Rs. 80 lacs was the earnest money. The details of the property were correctly mentioned and agreement was read over few times before signing the same by both the parties. Receipt dated 18.01.2008 was also executed in which the description of the property and the amount of earnest money alongwith cheque was also mentioned. Copy of said receipt dated 18.01.2008 which was not filed by the plaintiffs intentionally and deliberately but was filed by the deponent is an admitted document which has already been executed as Ex. PW1/X1. Stamp paper for execution of agreement to sell was purchased by the plaintiffs at Pitampura as the plaintiffs lived at Pitampura. Deponents states with all sense of responsibility that he neither purchased stamp paper nor got the agreement typed. Deponent was staying at civil lines and if he had to buy stamp paper, he would have bought the same from the nearby Tis Hazari Courts and not from Pitampura. Deponent had never visited the house of plaintiff at Pitampura either before or after the transaction nor he was acquainted with them prior to first meeting in the week of December 2007.
35 After execution of agreement to sell Ex. P-1, Plaintiffs requested the deponent to allow them to carry on construction on the adjacent unconstructed portion of double storey saying that they had already paid Rs. 80 Lacs as earnest money so that they could move into the property immediately after execution of sale deed.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 51 of 101Handwritten clauses by plaintiffs at clause no. 8 and 9 were inserted in the agreement to sell dated 18.01.2008. After 2-3 days of execution of agreement to sell, deponent went to his bank to deposit 3 cheques, however, deponents bank asked for a letter from the issuer of the cheques showing the purpose of the payment as it was mandatory for payment of Rs. 50 Lacs as per RBI guidelines. Deponent contacted plaintiff no. 1 from his bank itself and requested to issue a letter but plaintiff no. 1 did not. Next day the deponent learnt that the plaintiffs had stopped the payments of above mentioned three cheques. Plaintiff did not bother to meet the deponent and explain the reasons for putting a stop to the payment of above mentioned three cheques. After more than a month of 27.02.2008, plaintiffs alongwith their brokers Mr. Bipin Jain, Anuj Jain, one Mr. Sharad Jain and broker of deponent Mr. Anish Gupta met the deponent and started giving excuses namely that one Mr. Arun Pahwa, the cousin of the deponent, might create problems if the plaintiffs carried out any construction that the reason for backing out was because there was a problem in carrying out the construction on the adjacent side of the double storey. Later on plaintiffs called one Mr. Vinod Gupta (plaintiff's brother's brother in law) to mediate. Since the deponent had got an indication of the nefarious designs of the plaintiffs he recorded the conversations held in the said meeting so as to avoid any future complication/ambiguity regarding agreement to sell. Transcript of that conversation held in the meeting of 27.02.2008 Ex. DW1/10 is self-explanatory and is an admitted document which would show that the plaintiffs have also CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 52 of 101 admitted that they paid fees to their lawyer for due diligence of the property in question. During the course of that conversation deponent clearly proposed that if the plaintiffs were not willing to proceed further with the agreement to sell, he would in all fairness return 50% of the amount received. The deponent was ready to refund Rs. 10 Lacs out of Rs. 20 Lacs received as earnest money as on 27.02.2008.
36 Two weeks after the meeting of 27.02.2008 i.e. on 13.03.2008 the cousin of Mr. Bipin Jain namely Mr. Sharad Jain who is also a property broker came with Mr. Anish Gupta to meet the deponent unannounced. The gist of the meeting is that he tried to convince the deponent on behalf of the plaintiffs that plaintiffs were not interest in purchasing the property in question and the deponent should return their earnest money or in the alternative the deponent should do the construction on behalf of the plaintiffs after which the plaintiffs would have no problem in purchasing the suit property. Deponent clearly told him that he was not obliged under the agreement to do the construction for the plaintiffs nor was he liable to refund earnest money, however, deponent was prepared to return 50% i.e. Rs. 10 Lacs subject to the condition that the plaintiffs should also return complete file of the property documents in their possession. Broker Mr. Sharad Gupta assured the documents in the possession of the plaintiffs would be returned on 29.06.2008. Principal broker of plaintiffs Mr. Bipin Jain arrived with Mr. Anuj Jain alongwith the broker of deponent Mr. Anish Gupta to discuss future course of action since the first agreement dated 18.01.2008 was CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 53 of 101 about to lapse in two weeks time. The gist of the meeting was that there never existed any dispute in relation to the passage and the plaintiff's main broker wanted to know from the deponent on how to proceed further to conclude the deal. Deponent explained that since the plaintiffs had reneged on the agreement, Rs. 20 lacs given as earnest money on 19.12.2007 stood forfeited. Broker informed that the plaintiffs were keen to go ahead with the deal and upon his instance deponent became ready to revive the agreement to sell dated 18.01.2008. Broker of the plaintiffs insisted that the deal be concluded in the time left in the first agreement to sell before it expired. Deponent explained that it was not possible on account of delay caused not just by the plaintiff's conduct but also because there was no pressure on the deponent on account of the delay of plaintiffs as his own construction was also going forward at a slow pace. For this reason, deponent could not vacate the premises on the time as agreed earlier and because the plaintiffs had put a stop to their cheque, new agreement would have to be entered into to consider new time frame of completion of sale alongwith new cheques that would have to be issued to replace the ones pertaining to the earnest money to which the plaintiffs had earlier put a stop to. Broker of the plaintiffs then stated that Rs. 60 lacs would be forwarded if the plaintiffs were allowed to construct within the time left for the first agreement to expire. This request was declined. Therefore it means that the purpose of new agreement was only to carry forward first agreement dated 18.01.2008 by way of fresh agreement on the very same terms minus the construction clause thereby indicating a CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 54 of 101 new date of completion of sale and mentioning of new cheques in lieu of old ones. It was broadly agreed that time would be extended till August - September 2008. It was also agreed that alongwith new cheques plaintiffs would also issue a letter to the bank explaining the purpose for which the cheques were forwarded. Broker of the plaintiffs asked for some concession to be given to the plaintiffs for coming back into the deal, say Rs. 10 to 20 lacs reduction in sale transaction and was told in no uncertain terms that it was out of question. On the issue of construction that the plaintiffs wished to commence, they were told that any construction if done by the plaintiffs would strictly be at their own cost and risk to which the broker of the plaintiffs agreed and accepted. Given their conduct, broker of the plaintiff was asked to ensure 50% down payment. Broker of the plaintiffs further stated that once the construction of the plaintiff was complete, he would forward another sum of Rs. 1 crore. The broker then called up plaintiff no. 1 Mr. Pramod Jain and requested him to come at 6 pm on that very day. Since the deponent had prior engagement on 29 th June broker of the plaintiffs then fixed the meeting between his clients and deponents for the following day. The conversation tape/CD alonwith transcript of the meeting dated 29.06.2008 at page 4 to 47 is submitted on 18.01.2013 as Ex. DW/11. On 30.06.2008 plaintiffs arrived in the morning and in order to earn the confidence of the deponent that they were serious for the deal, further gave cash payment of Rs. 10 lacs unconditionally to the deponent even without the deponent having asked for it. They also got this payment of Rs. 10 lacs signed on the back page of first agreement CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 55 of 101 dated 18.01.2008 by the deponent. Therefore as on 30.06.2008 the deponent had received Rs. 30 lacs in total of the agreed amount of Rs. 80 lacs of earnest money. Plaintiffs stated that they had the property documents and would get a new agreement prepared shortly showing the payments received by the deponent alongwith letter for the bank which was outstanding since January 2008 and without which the new agreement would not be completed. They asked for the return of their old cheques against the first agreement dated 18.01.2008. Deponent assured that the old cheques would be returned once he had the new cheques as replacement alongwith the letter to the bank. Therefore it is evident that if there was any dispute with regard to passage ownership rights then the plaintiffs would not have waited for six months for executing the second agreement to sell merely for mentioning the passage ownership rights. Second agreement was signed on 07.07.2008 and Ex. P-2 filed by the plaintiffs. Deponent entered into a new agreement as the property details by way of registration no., book no., volume no. etc. in relation to the gift deed and Will was matching correctly. In doing so deponent missed reading the deliberate insertion of word "ownership" incorporated by the plaintiffs in relations to the actual words "right of passage". Thereafter deponent concentrated on checking the right cheque no. having been typed alongwith new date for completion of sale and the details shown in the receipt to be signed on said date i.e. 07.07.2008. Details stated in the receipt showed earnest money of Rs. 90 lacs to dates as well as property being 442 square yards with their being no mention of ownership of CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 56 of 101 passage. Said receipt was signed by deponent alongwith property broker Mr. Anuj Jain and Anish Gupta. Plaintiffs presented the mandatory letter for the bank stating that for what purpose, amount of Rs. 60 lacs were being given as well as stating that the same was earnest money towards the property, the deponent being unaware of the plaintiffs plan signed the said agreement dated 07.07.2008 in good faith. Since the cheque no. and amount shown in the note was correctly mentioned in the second agreement dated 07.07.2008, deponent unaware at the time of the plaintiffs' scheme to play fraud upon him had no problem in entering into the second agreement. For this reason it can be rightly claimed by the deponent that it was in fact the deponent who was enticed, lured duped by the plaintiffs into entering into the second agreement in which the plaintiffs had not only planned to play fraud on the deponent but also later on twist the facts and make a false claim of the earnest money being 1.5 crores and later changed it to Rs. 20 lacs to suit their requirements. On the said date plaintiffs also took possession of their old cheques lying with the deponent. The purpose of entering into new agreement dated 07.07.2008 was to carry forward first agreement dated 18.01.2008 which was about to expire on account of plaintiffs deliberate delay in concluding the deal and in order to enter the new cheque numbers as replacement of the old ones alongwith agreeing to finalize the deal for a new date and for the plaintiffs to forward the mandatory letter to the deponent bank explaining the purpose for the same.
37 On 02.09.2008 plaintiff no.1 arrived unannounced with his CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 57 of 101 dealer Mr. Bipin Jain. The plaintiff brought out a chit and explained by reading it that it was about extending the completion date to 15.10.2008 which he wanted the deponent to sign. When asked about the actual agreement Mr. Pramod Jain claimed that he tried locating it but could not find it. He feigned that it might have got lost. Plaintiff kept pressurizing the deponent to sign the slip to extend the date of completion to 15 th October. Broker Mr. Bipin Jain also insisted that the deponent signed the said chit after which both Mr. Bipin Jain and plaintiff were told to get the agreement first alongwith further necessary payment towards the agreed earnest money. It is relevant to submit that during this time the deponent was still unaware of his mistake in inadvertently overlooking the fraud played upon him by the plaintiffs by way of having planned and deliberately inserted the work "ownership" into the second agreement dated 07.07.2008. In order to prevent the deponent from seeing the second agreement again, this is the reason the plaintiffs tried to claim that same is misplaced or lost. CD and transcript of the conversation of the meeting of 02.09.2008 is on record filed on 18.01.2013 Ex.DW1/12. 38 On 07.09.2008 plaintiff came to meet deponent and handed over Rs.60 lacs in cash towards earnest money. Plaintiff further requested the deponent to extend the date of execution of sale deed to 15.10.2008. Plaintiffs requested the deponent to carry on construction as they had paid earnest money of Rs. 1.5 Crores and was serious to carry forward the deal. Deponent allowed this concession with a clear understanding that the plaintiffs would do so but at their own cost, risk and responsibility.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 58 of 101Plaintiffs insisted that the deponent give them a receipt acknowledging the payment of Rs.60 lacs. Plaintiffs brought along a note that had prehandwritten paragraphs pertaining to the money forwarded and the date of the sale transaction to be extended to 15.10.2008 and very surreptitiously mentioned that it was part payment. The deponent being an innocent person was not able to sense the nefarious designs and could not stop the plaintiffs from mentioning the expression "part payment". The said chit/note is part of the document enclosed in the list of documents filed by the plaintiffs. The deponent states that there are two receipts to this effect signed on the same date i.e. 07.09.2008, one receipt showing Rs.60 lacs as part payment and another receipt showing the same amount as a part payment towards sale consideration. Plaintiffs raised construction on a portion of property in such an unauthorized manner that the suit property was subsequently sealed by MCD and same is under litigation. (here is part of testimony given by the deponent defendant with respect to loss suffered by him by the dishonest acts of the plaintiff due to the act and conduct of the plaintiffs the value of plaintiff property has gone down considerably).
39 On 26.09.2008 there was another conversation between the parties and the transcript to this conversation is Ex.DW1/13. Transcript is self explanatory and reveals the true picture regarding the common passage. The transcript leaves no manner of doubt that the common passage was meant for use by all the persons living there and this fact was very well known to the plaintiffs. Until this point the deponent was CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 59 of 101 completely unaware having signed the second agreement where it was so mentioned that he was selling the property to the plaintiffs alongwith ownership rights of passage. On 30.09.2008 there was first telephonic conversation between the plaintiffs property dealer Mr. Bipin Jain and the deponent as listed through CD/tapes submitted by the deponent through his list of documents Ex.DW1/14. It is through this conversation that for the first time the deponent became aware of his mistake in overlooking the fraudulent and deliberate insertion of the word "ownership" to go alongwith words "passage rights". Having signed the second agreement in good faith, which was purely for the purpose of extension of time period it then dawned upon the deponent that it was not an innocent typing mistake on the part of the plaintiffs but a planned and deceitful act. It was told to the broker that this fact was well known to the plaintiffs as well as to the deponent that the deponent was not the owner of the passage and therefore, the same clause had to be removed or struck out, the said broker explained that the plaintiff Mr. Pramod Jain claimed that he will take advantage of it. Broker stated that once the money of the plaintiff is returned, the said agreement would be torn up. Broker suggested returning the plaintiffs money and told him that he would get another buyer for the suit property.
40 On 30.09.2008 there was yet another telephonic conversation between the deponent and Mr. Bipin Jain, same is Ex.DW1/15. On 07.10.2008 plaintiffs issued legal notice to the deponent claiming sum of Rs.3 crores being double the earnest money in terms of clause 8 of CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 60 of 101 agreement to sell dated 07.07.2008. The said legal notice was not filed by the plaintiffs alongwith their suit nor the fact mentioned in the plaint. But the deponent filed the said legal notice alongwith list of documents as Ex.DW1/17. The said notice clearly establishes that the plaintiffs also considered Rs.1.5 crores as earnest money. Plaintiffs also sent a telegram dated 15.10.2008 wherein they claimed refund of double the amount of money so paid. Said telegram was also not filed by the plaintiffs in their list of documents nor the said fact was mentioned in the plaint. Said telegram is filed as Ex.DW1/18. Deponent replied to legal notice and refuted the false averments made in the same and categorically stated that he had never represented that he possessed passage ownership rights. In that very reply deponent clearly stated that if the plaintiffs did not come forward to get the sale deed executed and showed their genuine intentions after the expiry of date of payment i.e. 15.10.2008 the agreement stood terminated and money forfeited. Reply is Ex.DW1/19. Earnest money of Rs.1.5 crores stood forfeited in terms of clause 7 of the agreement to sell dated 07.07.2008. Plaintiffs lodged FIR under Section 406/420 IPC with PS Civil Lines on false and frivolous allegations. Deponent could not get anticipatory bail and had to surrender. The petitioner remained in jail for a day. Deponent had to deposit his passport before the Ld. Court of Metropolitan Magistrate which granted bail to the deponent. Subsequently deponent tired to get his passport released but the same was declined due to the false prosecution deponent suffered a huge loss and he lost the privilege to enter into UK without a visa which he had earned after CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 61 of 101 serving the National Health Service in UK for 30 years. The only requirement for continued enjoyment of the said privilege was that the deponent had to visit UK once in two years. Since the passport of the deponent was not released, deponent could not visit UK. The quantum of such a loss can never be assessed in terms of money. Apart from this deponent also lost his right of free medical health care in the UK. Apart from this deponent has suffered immensely both mentally and emotionally due to the false prosecution. Deponent's children are settled in UK and deponent goes to visit them once a year. If the petitioner suffers any major ailment while in UK he and his family will have to bear the expenses of the said treatment which in UK is huge. Deponent reserves his right to initiate appropriate proceedings including malicious prosecution against the plaintiffs. Supplementary affidavit Ex.DW1/B was also filed by the deponent in which he deposed that in para 15 of the earlier evidence affidavit Ex.DW1/A deponent has mentioned about the execution of hand written note by the plaintiffs On 07.07.2008 at the time when the said agreement was entered into. Deponent states that the handwritten note was written was by none other than the plaintiff no. 3 clearly acknowledging the amount of Rs. 90 lacs including the amount of Rs. 60 lacs paid through cheque no. 439881 dated 07.07.2008 paid towards earnest money. The said receipt was handed over to the deponent at the time of signing the agreement and since the said document clearly showed Rs. 90 lacs as earnest money, deponent signed the agreement. The said handwritten note executed by plaintiff no. 3 is an admitted document and same is Ex.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 62 of 101DW1/20. On 07.07.2008 plaintiffs took back their cheques issued by them under the first agreement. Plaintiff no 1 issued a receipt in its own handwriting showing that he took back three cheques issued on 19.12.2007 and 18.01.2008, copy of receipt is Ex. DW1/21. 41 Defendant was thoroughly cross examined by the counsel for the plaintiff. During his cross examination deponent deposed that he had executed both the agreements P-1 and P-2 with free consent but in doing so he inadvertently missed out reading the extra word the ownership surreptitiously to go alongwith right of passage. Also the deponent observed that the plaintiffs had mentioned Rs. 20 lacs as earnest money in cash having been paid which tallied with the amount paid on 19.12.2007 and alongwith Ex. P-2 deponent was shown and forwarded a letter written by Mr. Akhil Jain to the bank in which it was written "to whom it may concern" which stated that Rs. 60 lacs is being paid towards the property concerned by cheque towards the earnest money. This brought the earnest money to Rs. 80 lacs as already agreed earlier in relation to Ex. P-1. Rs. 10 lacs were shown as part payment in Ex. P-2 which tallied with the receipt shown to the deponent that earnest money was Rs. 90 lacs. Witness deposed that he is not a property dealer therefore he could not tell with approximation as to when and how much the value of this suit property went down or came up during the intermediate period when the deal of suit property was going on. He deposed that he came to know about the value prices by reading news paper. He also came to know about the fall in the pricing in real estate market through various persons apart from CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 63 of 101 news paper. He does not remember the exact date of market crash. Witness was put various questions about his knowledge of stock market and the real estate market to which he replied that he is not a property dealer and got information and knowledge regarding the stock market and real estate market either by oral sources or by reading news papers. Cited Judgments 42 Before deciding the issues, I would like to discuss all the relevant case laws that has been filed before me by both parties. First of all, I shall discuss the citations filed by the defendant. Counsel for defendant has relied upon the following judgments:
1. Satish Batra Vs Sudhir Rawal cited as (2013) 1 SCC 347 in which rupees seven lakhs earnest money was forfeited.
2. V. Chandra Shekhran and Anr. Vs Administrative Officer & Ors. Cited as (2012) 2 SCC 133, this judgment talks about the parties coming to the court with clean hands and the conduct of the parties.
3. Dalip Singh Vs State of U.P. & Ors. (2010) 2 SCC 114 in which court has once again talked about the conduct and new bread of litigants to mislead the court. It was opined that such litigants who mislead the court deserve no relief from the court and should be thrown out.
4. State of Andhra Pradesh and Anr. Vs Star Bone Mill and Fertilizers company cited as (2013) 9 SCC 319. This judgment says that the person cannot confer better title what he possess.
5. Naresh Chander Guhar Vs Samantha AIR 952 Calcutta 953, this judgment talks abuot the golden rule of intention.CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 64 of 101
6 State ... Vs Surjeet Kaur & Ors. (2012) 12 SCC 155 which again says that a person cannot confer the better title what he possess.
7. Videocon properties Ltd. Vs Dr. Balchandra Laboratories and Ors (2004) 3 SCC 711, talks about the intention of the parties and surrounding circumstances.
8. Shri Hanuman Cotton Mills and Ors. Vs Tata Air Craft Ltd. Ltd. (1969) 3 SCC 522.
9. "Ram Singh and Ors. Vs Col. Ram Singh (1985) Supplementary SCC
611. 43 Now I shall deal with the crux of each judgment. First judgment of Satish Batra Vs Sudhir Rawal says that if the payment is made towards the part payment of consideration and not intended as earnest money then forfeiture clause will not apply. This judgment further says in para no. 15 about the law is therefore clear that to justify the forfeiture of advance money being part of earnest money the term of contract should be clear and explicit. Earnest money is part paid or given when the contract is entered into and as pledged for its due performance by the depositor to be forfeited in case of non-performance by the depositor. There can be converse situation also that if the seller fails to perform the contract, the purchaser can get doubled amount, if it is so stipulated. It is also the law that part payment of purchase price cannot be forfeited unless it is a guarantee for the performance of the contract. In other words, if the payment is made only towards the part payment of consideration and not intended as earnest money then forfeiture clause CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 65 of 101 will not apply.
44 Judgment No. 2 relied upon by the defendant is "V. Chander Shekhran Vs Administrative Officer, it talks about the pre-requisite for the entitlement to relief of equity. Whenever a person approaches the court for equity in the exercise of its extra ordinary jurisdiction, it is expected that he will approach the court not only with clean hands but also with clean mind, clean heart and clean objectives. Thus, he who seeks equity must do equity. The legal maxim "jure Naturae Qequum Est Neminem Cum Alterius Deterimento Et Injuria Fieri Locupletiorem"
means that it is a law of nature that one should not be enriched by causing loss or injury to another. The judicial process cannot become an instrument of oppression or abuse, or a means in the process of court to subvert justice for the reason when the court exercises its jurisdiction, only in furtherance of justice, the interest of justice and public interest coalesce and therefore, they are very often one and the same. A petition or affidavit containing a misleading and inaccurate statement, only to achieve an ulterior purpose, amounts to an abuse of process of the court. In "Dalip Singh Vs State of U.P. & Ors, this court noticed an altogether new creed of litigants, i.e. dishonest litigants and went on to strongly deprecate their conduct by observing that, the truth constitutes an integral part of the justice delivery system. The quest for personal gain has become so intense that those involved in litigation do not hesitate to seek shelter of falsehood, misrepresentation and suppression of facts in the course of court proceedings. A litigant who attempts to pollute the stream of justice CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 66 of 101 or who touches pure fountain of justice with tainted hands is not entitled to any relief interim or final. The truth should be the guiding star in the entire judicial process. Every trial is a voyage of discovery in which truth is quest. An Action at law is not of chess, therefore, a litigant cannot prevaricate and take inconsistent positions. It is one of those fundamental principles of jurisprudence that litigants must observe total clarity and candour in their pleadings.
45 In Maria Margarida Sequeria Fernandes and Ors. Vs Erasmo Jack De Sequeria, this court taking notice of its earlier judgment in "Ramrameshwari Devi Vs Nirmala Devi" held that false claims and defenses are really serious problems with real estate litigation, predominantly because of ever-escalating prices of the real estate. Litigation pertaining to valuable real estate properties is dragged on by unscrupulous litigants in the hopes that the other party will tire out and ultimately would settle with them by paying huge amount. This happens because of the enormous delay in adjudication of cases in our court. If pragmatic approach is adopted, then this problem can be minimized to a large extent. Court further observed that wrong doers must be denied profit from their frivolous litigation and they should be prevented from introducing and relying upon, false pleadings and forged or fabricated documents in record furnished by them to the court. In view of the above, the appellants have dis-entitled themselves from any equitable relief. 46 In the judgement of Dalip Singh versus state of Uttar Pradesh it was held, "the materialism has overshadowed the old ethos and CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 67 of 101 the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings. In the last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for the truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final. It was further held that the appellant's efforts to mislead the authorities and the courts got transmitted through 3 generations and the conduct of the appellant and his son to mislead the High Court and the Supreme Court cannot, but be treated as reprehensible. They belong to the category of persons who not only attempt, but succeed in polluting the course of justice. It was further held that a party which has misled the court in passing an order in its favour is not entitled to be heard on the merits of the case. A person who invokes the High Court's jurisdiction under article 226 of the Constitution is duty bound to place all the facts before the court without any reservation. If there is suppression of material facts or twisted facts have been placed before the High Court then it will be fully justified in refusing to entertain a petition filed under article 226 of the Constitution. In S.P.Chengalvaraya Naidu versus Jagannath (cited as (1994) 1 SCC 1) the court held that where a preliminary decree was CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 68 of 101 obtained by withholding an important document from the court, the party concerned deserves to be thrown out at any stage of the litigation. 47 In the case of State of Andhra Pradesh and others versus star bone mill and fertiliser company it was held, "no person can grant a better title than he himself possesses. In the instant case, unless it is shown that the seller had valid Paramount title, the respondent plaintiff (i.e. the buyer) could not claim any relief whatsoever from court. The courts below failed to appreciate that the sale deed dated 11 November 1959 was invalid and inoperative, as the documents on record established that the seller was merely a lessee of the government. The documents show that the government was the absolute owner of the suit land since at least 1920. Hence, the judgements of the courts below decreeing the suit filed by the respondent plaintiff for declaration of Paramount title are hereby set aside and the suit was dismissed. The principle enshrined in section 110 of the evidence act is based on public policy with the object of preventing persons from committing breach of peace by taking law into their own hands, however good their title over the land in question may be. It is for this purpose, that the provisions of section 6 of specific relief act, 1963, section 145 of the code of criminal procedure 1973, sections 154 and 158 of the penal code 1860 were enacted. All the aforementioned provisions have the same object. The said presumption is read under section 114 of the evidence act and applies only in a case where there is either no proof or very little proof of ownership on either side. The Maxim possession follows title is applicable in cases where proof of actual possession CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 69 of 101 cannot reasonably be expected, for instance, in the case of waste lands, or where nothing is known about possession one way or another. Presumption of title as a result of possession can arise only where facts disclose that no title vests in any party. Possession of the plaintiff is not prima facie wrongful and title of the plaintiff is not proved. 48 In the judgement of Naresh Chandra Guha versus Ramchandra Samanta, honourable High Court of Calcutta has talked about "the Golden rule of intention". In para number 12, it was held "one aspect of the matter which has often caused considerable anxiety to judges had reference to the nature of the money in question, whether described as earnest money or deposit or deposit money, namely, whether it was intended to serve as earnest money in the real sense of the term, i.e., whether it was intended to serve as earnest or security for the performance of the contract in question, necessarily implying a liability to forfeiture in case of default on the part of the payer or deposit, i.e. the purchaser. This difficulty has always been resolved by judges by applying what may appositely be described as 'golden rule of intention'. In such cases, courts have at times wandered into regions of fancy but the rule itself has seldom been seriously questioned. It is also clear from the authorities that in applying this rule, judges have uniformly accepted the view that in the absence of a contrary intention, express or implied, in the agreement for sale, money paid by the purchaser to the vendor at the time of such agreement, be it described as earnest money or deposit or deposit money or by any other name, is presumed to be earnest or security for the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 70 of 101 performance of the contract of sale, liable to be forfeited if the contract fails by reason of default on the purchaser's part. In other words, law raises in such cases, an initial presumption in favour of the vendor, clothing him with a right to forfeit the money, the presumption, however, being rebuttable and the right defeasible by proof of contrary intention, express or implied, the contract in question. In the light of these higher authorities, the true meaning of the expression "not merely a part payment but also in earnest or security" seems to me to be that, until the contract was performed, the earnest money remains a security or earnest for performance of the contract of sale but it becomes a payment of the price of purchase money immediately on such performance. In para 27 it is held, 'as a result of the above discussion, I have come to the conclusion that the earnest money, is in the absence of a contract to the contrary, liable to be forfeited by the vendor when the contract goes off for default on the part of the purchaser and such liability exists, notwithstanding sections 64, 65 and 74 of the Indian contract act and is not affected by any of the said provisions, although when the vendor sues the purchaser for compensation for breach of contract, in the matter of assessment of such compensation, forfeited earnest money has to be taken into account and the purchaser would get ready for the same'.
49 In the judgement of Videocon properties Ltd versus Dr Bhal Chandra laboratories and others it was held in para 14, 'further aspect that requires to be noticed is as to the nature and character of earnest money deposit and in that context the distinguishing features, which help CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 71 of 101 to delineate the differences, if any. The matter is not, at any rate, res Integra. In (kunwar) Charanjit Singh versus Har Swaroop it was held that earnest money is part of the purchase price when transaction goes forward and it is forfeited when the transaction falls through, by reason of the default or failure of purchaser. The statement of law had the approval of this court in Maula Bux versus Union of India. Further, it is not the description by words using the agreement only, that would be determinative of the character of the sum but really the intention of parties and surrounding circumstances as well, that have to be looked into and what may be called an advance may really be a deposit or earnest money and what is termed as, "a deposit or earnest money" may ultimately turn out to be really an advance or part of purchase price. Earnest money or deposit also thus serves 2 purposes of being part payment of the purchase money and security for the performances of the contract by the party concerned who paid it.' 50 In the judgement of Shri Hanuman cotton Mills and others versus Tata aircraft Ltd it was held that the buyer was bound to pay the full value less the deposit before taking delivery of the stores. In case of default by the buyer, company was entitled to forfeit unconditionally the earnest money paid by the buyer and cancelled the contract. Appellant advance a sum of ₹ 250,000 (being 25% of total amount) agreeing to pay the balance in 2 instalments on certain dates. On the appellants failing to pay any further amount, respondent forfeited the sum of ₹ 250,000 which according to it was earnest money and cancelled the contract. Appellant CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 72 of 101 filed a suit for recovery of aforesaid amount. Trial court held that the sum was paid by way of deposit or earnest money which was primarily a security for the performance of the contract and that the respondent was entitled to forfeit the deposit amount when the appellants committed a breach of the contract and dismissed the suit. High Court confirmed the decision of the trial court. On appeal to the Supreme Court, the appellants contended that sum being part of the purchase, the respondent was not entitled to forfeit the same and that the respondent was entitled only to a reasonable compensation under section 74 of the contract act. Held, that the following principles emerge regarding "earnest":-
(1) it must be given at the moment at which the contract is concluded (2) it represents a guarantee that the contract will be fulfilled or, in other words, 'earnest' is given to bind the contract; (3) it is part of the purchase price when the transaction is carried out; (4) it is forfeited when the transaction falls through by reason of the default or failure of the purchaser;
(5) unless there is anything to the contrary in the terms of contract, on default committed by the buyer, seller is entitled to forfeit earnest.
51 There is no controversy that the appellants deposited the sum of ₹ 250,000 under clause 9 of the contract representing 25% of the purchase price, it is, therefore, clear that this amount is earnest money under clause 9. The contract, read with the terms of business of the company clearly refers to the earnest money being paid and to the fact of ₹ 250,000 having been paid. Therefore, there is no ambiguity regarding the nature of above payment and the right of respondent to forfeit the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 73 of 101 same, under the terms of the contract, when the appellants admittedly had committed breach of the contract, cannot be assailed.
52 In para 10 of the judgement it was held, 'the plea that the plaintiffs entered into the contract under a mistake of fact and that they were induced, to so enter into the contract due to misrepresentation of the defendants regarding the quantity of scrap available, was also given up. The appellants have also accepted the position that there has been a concluded contract between the parties and the said contract was concluded by the correspondence between the parties consisting of the letters, dated November 18, 1946 and November 20, 1946. Plaintiff has further abandoned the plea that the defendants were not ready and willing to perform their part of the contract. Therefore, the questions that ultimately survived for consideration by the court were: (1) as to whether the sum of 2,50,000 was paid by the plaintiffs by way of part payment or as earnest deposit; (2) as to whether the defendants were entitled to forfeit the said amount. Para 11. The learned single judge and on appeal the division bench have held that the sum of ₹ 250,000 paid by the appellants was so paid by way of deposit or earnest money and it is only when the plaintiffs pay the entire price of goods and perform the conditions of contract that the deposit of 2,50,000 will go towards the payment of the price. It is further view of the court that the amount representing earnest money is primarily a security for the performance of the contract and in the absence of any provision to the contrary in the contract, defendants are entitled to forfeit the deposit amount when the plaintiffs have committed a CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 74 of 101 breach of the contract. In this view, defendant's right to forfeit the sum of 2,50,000 was accepted and it has been held that the plaintiffs are not entitled to claim refund of the said amount. The plaintiff's suit, as a result was dismissed by the learned single judge and on appeal the decree of dismissal has been confirmed. In para 15 characteristics of 'earnest' were discussed according to the author Burrows "an earnest must be a tangible thing... That which must be given at the moment at which the contract is concluded because it is something given to bind the contract and therefore it must come into existence at the making or conclusion of contract. The thing given in that way must be given by the contracting party who gives it, as an earnest or token of good faith and as a guarantee that he will fulfil his contract and subject to the terms that if owing to his default the contract goes off, it will be forfeited. If on the other hand, contract is fulfilled, an earnest money may still serve the purpose and operate by way of part payment.
Now I shall discuss the judgments filed by the plaintiffs. 53 In the judgment of M C Luthra, it is held that, "In sum and substance what is held by the Constitution Bench of the Supreme Court in the cases of Fateh Chand (supra) and the recent judgment in Kailash Nath Associates (supra) is that whenever there is a breach of contract then earnest money which is forfeited because of the breach, whether by a plaintiff or a defendant in the contract, the forfeiture is of that amount which are in fact liquidated damages specified under a contract and that CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 75 of 101 for claiming damages under a contract, whether liquidated under Section 74 of the Contract Act or unliquidated under Section 73 of the Contract Act, existence of loss is a sine qua non. In other words, if no loss is caused to a seller who has in his pocket monies of buyer, then the seller can only forfeit a nominal amount unless the seller has pleaded and proved that losses have been caused to him on account of the breach of contract by the buyer. Once there is no pleading of loss suffered by a seller under an agreement to sell, then large amounts cannot be forfeited though so entitled to a seller under a clause of an agreement to sell/contract entitling forfeiture of 'earnest money' because what is forfeited is towards loss caused, and that except a nominal amount being allowed to be forfeited as earnest money, any forfeiture of any amount, which is not a nominal amount, can only be towards loss if suffered by the seller. Thus, if there is no loss which is suffered by a seller then there cannot be forfeiture of large amounts which is not a nominal amount, simply because a clause in a contract provides so. The following has been held in the judgment in the case of Kailash Nath Associates (supra):-
(i) As per the facts existing in the case of Kailash Nath Associates (supra) the Single Judge of the High Court had held that since no damages were suffered by DDA therefore DDA could not forfeit the earnest money. (Para 30 of Kailash Nath Associate's case (supra)).
(ii) The Division Bench of the High Court however set aside the judgment of the Single Judge by holding that amount tendered as earnest money can be forfeited in terms of the contract. (Para 30 of Kailash Nath CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 76 of 101 Associates' case (supra) reproducing Para 39 of the Division Bench judgment of the High Court).
(iii) Supreme Court in the case of Kailash Nath Associates' case (supra) as per Para 44 of its judgment holds that the Division Bench of the High Court had gone wrong in principle because compensation can be awarded (where there is breach of contract) only if loss or damage is suffered i.e. where there is no loss or damage suffered as a result of breach of contract no compensation can be awarded as law does not provide for a windfall i.e. large amounts though called contractually as earnest money cannot be forfeited unless loss is pleaded and proved to have been suffered. These observations have cross-reference to Para 34 of the judgment of Kailash Nath Associates' case (supra) where with reference to the para of Fateh Chand's case (supra) it is held that the language of Section 74 of the Contract Act that 'whether or not damage or loss is proved to have been caused by breach' is the language that such language only discharges proof of actual loss but that does not justify award of compensation where in consequence of breach no injury/loss has at all resulted.
(iv) Earnest money is an amount to be paid in case of breach of contract, and named in contract as such, and that forfeiture of earnest money is covered under the entitlement to liquidated damages under Section 74 of the Contract Act vide Para 40 in the case of Kailash Nath associate's case (supra).
(v) The language of Section 74 of the Contract Act that "whether or not CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 77 of 101 actual loss or damage is proved to have been caused thereby" means only that where it is difficult or impossible to prove loss caused by the breach of contract then the liquidated damages/amount (being the amount of earnest money) can be awarded vide Para 43(6) of Kailash Nath associate's case (supra) but where nature of contract is such that loss caused because of breach can be assessed and so proved then in such cases loss suffered must be proved to claim the liquidated damages of earnest money. This finding has cross reference to Para 37 of judgment in Kailash Nath associate's case (supra) where the observations of Supreme Court in Para 67 of the case of ONGC Ltd. V Saw Pipes Ltd. (2003) 5 SCC 705 are quoted that liquidated damages are awarded where it is difficult to prove exact loss or damage caused as a result of breach of contract.
(vi) Even where liquidated damages can be awarded under Section 74 of the Contract Act because loss or damages cannot be proved in a contractual breach yet if the liquidated damages (earnest money) are a penalty amount by its nature i.e. prescribed liquidated damages figure is unreasonable, then for the liquidated damages amount or earnest money amount forfeiture cannot be granted/allowed and that only reasonable amount is allowed as damages with the figure of liquidated damages being the upper limit vide Para 43(1) of Kailash Nath associate's case (supra).
54 Similar ratio as has been laid down by the Supreme Court in Kailash Nath associates's case (supra) was also the ratio of the judgment of the Supreme Court in the case of V.K Ashokan v. Assistant Excise Commissioner (2009) 14 SCC 85 and paras 66 to 71 of this judgment CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 78 of 101 reads as under:-
"66. There is another aspect of the matter which cannot be lost sight of. If damages cannot be calculated and the terms of the contract provides therefore only for penalty by way of liquidated damages, having regard to the provisions contained in Section 74 of the Indian Contract Act a reasonable sum only could be recovered which need not in all situations even be the sum specified in the contract. (See Maula Bux v. Union of India and Shree Hanuman cotton Mills v. Tata Air Crat Ltd.)
67. Section 74 of the Contract Act reads as under:
"74. Compensation for breach of contract where penalty stipulated for- When a contract has been broken, if a sum is named in the contact as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for."
68. There are authorities, no doubt coloured by the view which was taken in English cases, that Section 74 of the Contract Act would have no application to cases of deposit for due performance of a contract which is stipulated to be forfeited for breach, e.g., Natesa Aiyar v. Appavu Padayachi, Singer Manufacturing Company v. Raja Prosad; Manian Patter v. the Madras Railway Company, but this view no longer is good law in view of the judgment of this Court in Fateh Chand v. Balkishan CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 79 of 101 Das.
69. This Court in Fateh Chand case observed at pp. 526-27 (of SCR):
"10. Section 74 of the Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach, and (ii) where the contract contains any other stipulation by way of penalty. ...The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for." The Court also observed: (AIR p. 1411, para 11) "11. It was urged that the section deals in terms with the rights to receive from the party who has broken the contract reasonable compensation and not the right to forfeit what has already been received by the party aggrieved. There is however no warrant for the assumption made by some of the High Courts in India, that Section 74 applies only to cases where the aggrieved party is seeking to receive some amount on breach of contract and not to cases where upon breach of contract an amount received under the contract is sought to be forfeited. In our judgment the expression 'the contract contains any other stipulation by way of penalty' comprehensively applies to every covenant involving a penalty whether it is for payment on breach of contract of money or delivery of property in future, or for forfeiture of right to money or other property already delivered. Duty not to enforce the penalty clause but only to award reasonable compensation is statutorily imposed upon courts by Section 74. In all cases, therefore, where there is a stipulation in the nature CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 80 of 101 of penalty for forfeiture of an amount deposited pursuant to the terms of contract which expressly provides for forfeiture, the court has jurisdiction to award such sum only as it considers reasonable, but not exceeding the amount specified in the contract as liable to forfeiture." and that, "14. ...There is no ground for holding that the expression 'contract contains any other stipulation by way of penalty' is limited to cases of stipulation in the nature of an agreement to pay money or deliver property on breach and does not comprehend covenants under which amounts paid or property delivered under the contract, which by the terms of the contract expressly or by clear implication are liable to be forfeited." (AIR p. 1412, para 14)
70. Forfeiture of earnest money under a contract for sale of property whether movable or immovable, if the amount is reasonable, would not fall within Section 74. That has been opined in several cases. (See Kunwar Chiranjit Singh v. Har Swarup; Roshan Lal v. Delhi Cloth and General Mills Co. Ltd.; Mohd. Habib-ullah v. Mohd. Shafi; Bishan Chand v. Radha Kishan Das.) These cases have explained that forfeiture of a reasonable amount paid as earnest money does not amount to imposing a penalty. But if forfeiture is of the nature of penalty, Section 74 applies.
71. Where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he has already paid to the party complaining of a breach of contract, the undertaking is of the nature of a penalty. (See Maula Bux and Saurabh CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 81 of 101 Prakash v. DLF Universal Ltd.)"
55 All the judgments of the Supreme Court which have been relied upon in Satish Batra's case (supra) are of a Bench strength lesser than the Constitution Bench strength of the Supreme Court in Fateh Chand's case (supra) and the law is well settled that it is the judgment of the larger Bench of the Supreme Court which will prevail over the judgment of a Bench strength of lesser number of judges. Also, as already stated above, in the recent judgment of Kailash Nath associate's case (supra) Supreme Court has now clarified that a forfeiture of an earnest money necessarily falls under Section 74 of the Contract Act i.e. before forfeiture can take place it must be necessary that loss must be caused.
Also, Supreme Court has further clarified in Kailash Nath associate's case (supra) that it is very much possible that forfeiture of an amount can be in the nature of penalty and if the amount which is allowed to be forfeited under the contract is in the nature of penalty then Courts are empowered to treat the amount of liquidated damages (earnest money) as one in the nature of penalty clause and that earnest money amount only represents the upper limit of damages which are allowed to be forfeited in terms of the forfeiture clause, and actual forfeiture only of a lesser and a reasonable amount should be allowed instead of the large amount/penalty as stated under a contract as being entitled to be forfeited and that too merely because a contractual clause allows such a forfeiture.
21 In view of the aforesaid discussion, this appeal is allowed to a limit extent that the appellant/defendant is held entitled to forfeit only a CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 82 of 101 nominal sum of Rs.50,000/- and not a sum of Rs.9,00,000/- as claimed by the appellant/defendant inasmuch as no loss is pleaded and proved to be caused to the appellant/defendant on account of the breach of the agreement to sell by the respondent/plaintiff. The impugned judgment of the trial court therefore is partly modified in that the judgment and decree in favour of the respondent/plaintiff will be only of an amount of Rs.8,50,000/- and not Rs.9,00,000/-. Also, in exercise of powers under Order XLI Rule 33 CPC, and as prayed before this Court on behalf of the respondent/plaintiff, since the trial court has not granted pre-suit interest, I hold that the impugned judgment and decree which only grants pendente lite and future interest will be modified in view of the judgment of the Supreme Court in South Eastern Coalfileds Ltd. v. State of M.P. (2003) 8 SCC 648 (as per paras 21 and 22 thereof) that the respondent/plaintiff will be entitled to interest at the rate granted by trial court of 12% per annum from the date of the agreement to sell being 15.9.2005 till the filing of the suit also i.e. respondent/plaintiff will be entitled to interest at 12% per annum on the amount of Rs.8,50,000/- from 15.9.2005 till the filing of the suit, and thereafter pendente lite and future till payment. Decree sheet be drawn accordingly.
22. Amount deposited by the appellant/defendant in this Court in terms of the order dated 12.9.2017 be paid to the respondent/plaintiff by the Registry of this Court in appropriate satisfaction of the present judgment and since the amount deposited in this case by the appellant/defendant is not sufficient for satisfaction of the judgment and CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 83 of 101 decree passed today in favour of the respondent/plaintiff, the respondent/plaintiff is always at liberty to initiate execution proceedings for recovery of the balance amount against the appellant/defendant." Issues part 56 On 07.11.2013, following issues were framed:-
1. Whether the earnest money deposit was Rs.20 lacs as claimed by the plaintiff or Rs.1.50 crores as claimed by the defendant? Onus upon parties
2. Whether the plaintiff was in breach of the agreement dated 07.07.2008? OPD
3. Whether the defendant was in breach of the agreement dated 07.07.2008? OPP
4. Whether the plaintiff is entitled to the amount claimed in the suit?
OPP
5. Whether the defendant is entitled to forfeit the amount of Rs.1.50 crore paid by the plaintiff to the defendant? OPD
6. Whether the plaintiff is entitled to claim any interest and if so, at what rate and for what period? OPP
7. Relief.
I have discussed all the relevant case law cited before me in the present case. My issuewise findings are as follows:-
Issue No.1:
Whether the earnest money deposit was Rs.20 lacs as claimed by CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 84 of 101 the plaintiff or Rs.1.50 crores as claimed by the defendant? Onus upon parties
57 I have discussed all the pleadings, evidences brought on record by the parties and the judgments cited before me with respect to this issue. Counsel for defendant has filed several judgments. Since the beginning it has been the claim of the defendant that the earnest money in the present case is Rs.1.50 crores, even as per the admission of the plaintiff during the course of evidence and the correspondences exchanged between the plaintiffs and the defendant. During the course of arguments, it was submitted on behalf of the defendant that in agreement Ex.P-1 dated 18.01.2008 earnest money was shown as Rs.80 lacs. Rs.20 lacs was given in cash on 19.12.2007 and a cheque of Rs.5 lacs was also tendered. On 18.01.2008 cheques worth Rs.55 lacs were tendered but later on the plaintiffs stopped payment of cheques worth Rs.60 lacs. Thus, Rs.20 lacs remained with the defendant. It is submitted that there was no dispute regarding the earnest money under the first agreement. It is further submitted that again a cheque no. 439881 was tendered on 07.07.2008 and total earnest money was shown as Rs.90 lacs which is apparent from receipt Ex.P/6 prepared by the plaintiffs, signed by the defendant and witnessed by the property brokers of both the sides. On 07.09.2008 Rs.60 lacs cash was given at the time of seeking extension of time for execution of sale deed from 15.09.2008 to 15.10.2008. Therefore, the total amount received in the form of earnest money by defendant as on 07.09.2008 was Rs.1.5 crores. It is submitted that the plaintiffs have also treated the CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 85 of 101 amount of Rs.1.5 crores as earnest money which is clear from perusal of legal notice dated 07.10.2008 (para 11 Ex.DW1/17) and telegram dated 15.10.2008 Ex.DW1/18 as they included the clause in the agreement providing payment of double the amount of earnest money. It is submitted that the contention of the plaintiffs that earnest money was Rs.20 lacs is misconceived and a result of fraudulent act. Except for one place i.e. the second page of the agreement Ex.P/2 (changed font of computer and different from other pages thus showing manipulation by the plaintiffs), there is no document whatsoever to show that earnest money was Rs.20 lacs. Signatures on the said page were obtained by fraud and deception and hence not binding on the defendant. The plaintiffs have themselves treated the amount of Rs.1.5 crores as earnest money in legal notice dated 07.10.2008 where they have demanded that in case of failure to execute sale deed, defendant shall be liable to make payment of Rs.3 crores i.e. double the amount of earnest money. Counsel for defendant has submitted that plaintiffs themselves have claimed the earnest money to be Rs.1.5 crores in the hope of pressurizing the defendant to pay double the amount of Rs.1.5 crores. It is argued by the defendant that the plaintiffs have claimed the earnest money to be Rs.1.5 crore in the hope that the defendant shall cave in to their demands and at least return the entire amount of Rs.1.5 crores if not double the amount. But according to the judgments cited above, more specifically the judgment of Fateh Chand vs Bal Kishan Das cited as AIR 1963 Supreme Court 1405 and judgment of Kailash Nath associate's vs DDA cited as (2015) 4 SCC 136 and judgment CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 86 of 101 of M.C Luthra vs Ashok Kumar Khanna 2018 SCC OnLine Del 7462 which has been upheld by the Hon'ble Supreme Court, it has been opined that it is not the nomenclature which is given by the parties that decides whether the amount given is to be treated as earnest money or deposit but in fact it is the notional value of the entire sale consideration that is to be considered as earnest money. It has been conclusively held that parties may decide to give any name or nomenclature to the amount advanced as a guarantee for finalizing the deal but only a notional amount can be forfeited as earnest money. In the present case, it is admitted fact that the initial amount so given by the plaintiffs to the defendant was Rs.20 lacs which was given in cash and thereafter regular payments have been made by the plaintiff towards finalizing the deal. In view of the judgments discussed above, this court is of the opinion that the initial amount of Rs.20 lacs was the earnest money and by no stretch of imagination Rs.1.5 crore can be termed as earnest money in the present case. Issue No.2:
Whether the plaintiff was in breach of the agreement dated 07.07.2008? OPD 58 Before this issue can be decided, the Court has to give findings whether the agreement dated 07.07.2008 is a valid agreement or not. After going through the evidences on record, this court has come to the conclusion that agreement dated 07.07.2008 is not a valid agreement as there was no consensus ad idem between both the parties with respect to the passage ownership rights. It is submitted on behalf of the defendant CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 87 of 101 that the plaintiffs were not in a position to make payment of balance sale consideration at any point of time. As per Ex.PW1/2 and Ex.PW1/3, plaintiffs applied for grant of loan with GE Money only after the second agreement. However, it has come on record that the home loan was never released. Rather the records adduced by the plaintiffs show that the provisional approval of home loan was cancelled on 14.10.2008 and therefore, it is clear that the plaintiffs were not in a position to honour their part of agreement. Plaintiffs have produced a letter dated 05.08.2008 Ex.PW1/4 from one Mr. Sunil Gupta stated to be friend of the plaintiffs.
This letter has not been produced in accordance with law nor the said Mr. Sunil Gupta has been examined by the plaintiff to prove its contents. If this letter was available with the plaintiffs since 2008, same should have been filed alongwith the suit. It is submitted that this letter is fabricated. It is established that plaintiffs were in a clear breach of agreement dated 07.07.2008. It is submitted that the transcripts of recorded conversations also show that the purported ownership of the common passage was not the actual reason why the plaintiffs did not honour the agreement. After going through the evidence, this court believes that defendant never represented to the plaintiffs that he was the owner of passage ownership rights over which the entire dispute of this case seems to revolve. After going through the entire evidence, it is clear that plaintiff was aware right from the beginning that the defendant was not the owner of passage rights and was merely a permissive user of the same. This fact is clear from the surrounding circumstances. The suit property is one of many properties in CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 88 of 101 that cluster of properties that the property is situated in, alongwith other properties having different owners. Even the brokers of the plaintiffs have resided in the same property as tenants. By no stretch of imagination can it be presumed that the brokers of the plaintiffs and the plaintiffs did not know that the defendant was not the owner of passage ownership rights. The suit property is not a single isolated property. No person of sound and reasonable mind would presume otherwise in the absence of clear cut proof to the contrary that the defendant was the exclusive owner of passage rights leading from the suit property to the main Rajpur Road. It appears that the submissions of the defendant with respect to the fact that the plaintiff cleverly, surreptitiously and unknowingly to the defendant, inserted the word "ownership" in the second agreement dated 07.07.2008 are correct and it was never intended so and agreed upon by the defendant. From the entire deposition of the plaintiff it is clear that the plaintiff is trying to mislead this court into thinking that it was the defendant who had misled the plaintiffs into believing that he was the owner of passage ownership rights which is the main bone of contention of the present case. Plaintiff no.1 is a graduate having decree in B.Tech and claims to be owner of several properties both commercial as well as residential. It is not believable that the plaintiffs did not inspect the title documents of the suit property before purchasing the same. Moreover, the submissions of the plaintiff with respect to purchase of stamp papers also appears to be false. So far as regards the issue of breach of agreement dated 07.07.2008 is concerned, plaintiff has not been able to prove and show that he had CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 89 of 101 requisite means and financial capacity to go through with the agreement dated 07.07.2008. Willingness to go through with the contract is different from readiness and the ability of the parties to fulfill and execute the contract. Despite leading evidence regarding money in his bank account, plaintiff has not been able to put together the balance amount that was required to complete and execute the sale deed. Fact that the plaintiffs were capable to execute the sale deed after borrowing different sums of money from different people cannot be construed as readiness of the plaintiffs to execute the sale deed. Necessary bank balance to execute the sale deed has to be shown by the purchaser which is not the case in the present suit. Despite quoting bank balance of all his family members, plaintiff has been unable to put together the balance sale consideration. Therefore, this issue is decided in favour of the defendant and against the plaintiffs. It appears that the plaintiffs were in breach of agreement dated 07.07.2008. But so far as regards the tape recorded conversations between the plaintiffs, defendant and their property brokers are concerned, the recorded conversations have not been proved in accordance with law and the rules of evidence. Counsel for plaintiffs have asked a question during cross examination of the defendant, whether the defendant has filed the necessary certificate under Section 65B of the Evidence Act which is a mandatory requirement for making the tape recorded conversations as admissible evidence to which the defendant witness/defendant has replied in negative. Till date the deficiency has not been improved upon by the defendant. Therefore, in the absence of the mandatory certificate under CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 90 of 101 Section 65B, tape recorded conversations of which CDs have been filed on record cannot be admitted into evidence and relied upon. Issue No.3:
Whether the defendant was in breach of the agreement dated 07.07.2008? OPP 59 Onus to prove this issue was upon the plaintiffs. In the opinion of the court, plaintiffs have not been able to prove this issue in their favour. It is an undisputed fact that defendant is the exclusive owner in possession of the suit property. It appears that the plaintiffs got these documents verified through their lawyers and only after ascertaining the veracity, agreed to pay a sum of Rs.6.74 crores. Defendant never misrepresented about ownership of passage as he possessed merely easmentary right of passage. None of the document or records of the case, except one page of agreement Ex.P/2 show that the defendant ever promised to convey ownership of passage. The allegation that the defendant played a fraud upon the plaintiffs by misrepresenting that he was the owner of passage has not been reaffirmed by the plaintiffs as replication has deliberately not been filed by the plaintiffs despite grant of several opportunities. In his evidence, the defendant has categorically stated that he was in a position to execute the sale deed at all points of time after the first agreement and the second agreement. In fact, in his reply to the notice Ex.DW1/19, defendant clearly stated that he was ready and willing to execute the sale deed and called upon the plaintiffs to come forward with balance sale consideration. Plaintiffs knew from the very CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 91 of 101 beginning that the defendant only possessed easementary rights of passage as plaintiff no.1 has admitted in his evidence that all property papers were shown to him and he had read documents of title deeds which clearly showed that the defendant had only easementary rights over the common passage. The plaintiffs have not produced any document of title supporting their claim that defendant is the owner of the passage. The first agreement Ex.P1 clearly acknowledges that only the right to use this common road was transferred. The plaintiffs have made a false statement that they were not provided with documents of title before entering agreement P-1 and P- 2 but during the evidence it has come on record that the plaintiffs had submitted the title deeds alongwith their home loan application to GE Money. In any case, it is unbelievable that a person of ordinary and reasonable prudence would not exercise due diligence and would purchase a property worth crores without first obtaining copies of title deeds.
Moreover, the hon'ble high Court while quashing the FIR No. 09/2009 registered at PS Civil Lines against the defendant for offences punishable under Section 406/420/120B IPC also observed "merely because in the second agreement to sell dated 07.07.2008, petitioner/defendant failed to notice the insertion in a different typing on the second page where unscrupulously the words 'alongwith the passage ownership rights' were introduced, petitioner cannot be said to have cheated or committed breach of trust. It was further observed the said agreement to sell clearly noted how ownership of property admeasuring 442 sq. yards devolved on the petitioner/defendant. It was stated that the property was acquired by Smt. CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 92 of 101 Kaushalya Devi Pahwa by virtue of a gift deed duly registered on 10.12.1969 whereafter Smt. Kaushlya Devi Pahwa executed a will dated 11.07.1973 in favour of the petitioner/defendant. A perusal of both the documents i.e. gift deed and the Will show that Dr. Mathra Dass Pahwa who donated the property to his wife Smt. Kaushalya Devi Pahwa and Smt. Kaushalya Devi Pahwa who executed a Will in favour of the petitioner only had a right of easement of passage from the main gate. At the time of agreement to sell dated 7.07.2008, the total sale consideration continued to be Rs.6.74 crores with a further cash advance of Rs.10 lacs. The second agreement notes that Rs.60 lacs have been paid through cheque no. 439881 drawn on Punjab National Bank and the same is type written this could have been done only by the complainant/plaintiff who had in his possession the cheque and had drawn the same. There is no mention in the two receipts executed by the defendant regarding ownership rights of the passage. If the version of the plaintiffs is to be accepted that the petitioner/defendant informed him that he owned the passage and thus the same was also a part of the agreement to sell, receipt would have mention the area of the passage besides the area of the double storeyed built up property which measures 442 sq. yards. Further, the petitioner/defendant has placed on record, the statement of plaintiff no.1 on oath recorded in CS(OS) 2205/2009 where he admitted that he was shown the title deeds at the time of negotiations. In the said statements, he did not state that the title deeds shown at the time of negotiations were not the ones which are now recovered during the course of investigation."
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 93 of 10160 As already discussed above, this court has come to the conclusion that plaintiffs were unable to put together the balance sale consideration. Plaintiffs were not in a position to execute sale deed by paying the balance amount. Therefore, in order to circumvent this problem of the plaintiffs not being ready, the plaintiffs concocted the entire drama that the defendant misrepresented to the plaintiffs that he was the owner of passage having exclusive ownership right over that passage. It is clear that the plaintiff surreptitiously and without the knowledge of the defendant added the word "ownership" in the passage ownership right in the second agreement dated 07.07.2008. Defendant has been able to prove that right from the beginning he had given a clear picture to the plaintiffs regarding his rights qua the suit property and the passage leading from the suit property to the main Rajpur Road. Defendant was ready to execute the sale deed after payment of entire sale consideration by the plaintiff which was not done by the plaintiffs despite repeated requests, reminder and opportunities. Plaintiffs raised a frivolous issue of ownership of passage right which was never there to begin with, therefore, this issue is decided in favour of the defendant and against the plaintiff.
Issue No.4:
Whether the plaintiff is entitled to the amount claimed in the suit? OPP
61 Chapter 6 of the Indian contract act deals with consequences of breach of contract. Section 73 of the Indian Contract Act talks about compensation for loss or damage caused by breach of contract. It says, CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 94 of 101 'when a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of business from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
62 Such compensation is not to be given for any remote and indirect loss or damage sustained by the reason of the breach. Compensation for failure to discharge obligation resembling those created by contract-when an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person has contracted to discharge it and had broken his contract.
Explanation-in estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the nonperformance of the contract must be considered. General damages are those which arise naturally and in the normal course of events. Special damages are those which do not arise naturally out of the defendants breach and they are recoverable only where they are in reasonable contemplation of the parties at the time they made the contract. In case of general damages, the plaintiff is only required to assert such damage as has been suffered on account of the breach committed by the defendant whereas in the case of special damages, the plaintiff has to CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 95 of 101 specifically plead and prove the same. Special damages are those losses, which can be calculated in financial terms and they represent the precise amount of pecuniary loss which the claimant proves to have suffered from the set of facts pleaded. Section 73 of the contract act is declaratory of the common law as to damages. Law imposes an obligation or implies the terms that upon breach of contract, damages must be paid. 63 In view of my discussion already held above and the relevant case law of Kailash Nath Associate's vs DDA, Fateh Chand vs Bal Kishan Dass and M.C Luthra vs Ashok Kumar Khanna, it is clear that plaintiffs are entitled to suit amount minus the earnest money which the defendant is liable to forfeit on account of failure of the plaintiff to perform his part of contract and on account of fact that the defendant suffered damages on account of sealing of the property because of illegal construction raised by the plaintiffs. As admitted by both the parties in the present case, construction was raised before sale deed was to be executed by the plaintiffs at their own risk and repercussions and the construction was found to be illegal by the concerned authorities because of which the entire suit property was sealed. It is common knowledge that once the suit property is sealed, the value of the suit property deprecates in the eyes of general public and it is not easy to find alternate buyer for the same. Moreover, the defendant has alleged loss of general health facilities and permission to enter United Kingdom as per his wish and requirement because of his detention in judicial custody in the criminal case filed by the plaintiff against the defendant. General damages are covered by CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 96 of 101 Section 73 of the Contract Act. In the opinion of the Court, defendant has sufficiently proved that he suffered general damages on account of plaintiffs' actions and failure to conclude the contract. No special proof is required for proving general damages. Therefore, the initial amount of Rs.20 lacs which has been decided as earnest money in the present case is allowed to be forfeited because in comparison to the entire sale consideration of Rs.6.74 crores an amount of Rs.20 lacs can be regarded as a notional amount and earnest money in the present case. An amount of Rs.50 lacs has already been deposited by the defendant in the Hon'ble high Court of Delhi upon which interest is accrued. Admittedly, Rs. 1.5 crores in total were paid by the plaintiff to the defendant out of which Rs.50 lacs are in fixed deposit in the High Court of Delhi. Rs.20 lacs being earnest money is allowed to be forfeited because of actions of the plaintiff and the general damages caused to the defendant by actions of the plaintiffs. 64 Therefore, an amount of Rs.80 lacs is left with the defendant which in the opinion of the court should be returned to the plaintiffs along with interest. Therefore, this court decrees an amount of Rs.80 lacs to be paid by the defendant to the plaintiffs along with interest @ 12% per annum from the date of filing of the suit till the date of its realization and further interest of 6% per annum from the date of decree till its actual realization. It is also decreed that the sum of Rs.50 lacs deposited as FDR in the Hon'ble High Court should also be given back to the plaintiff along with interest that has accrued upon the FDR. Therefore, this issue is partly decreed in favour of the plaintiff.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 97 of 101Issue No.5:
Whether the defendant is entitled to forfeit the amount of Rs.1.50 crore paid by the plaintiff to the defendant? OPD
65 Onus to prove this issue is upon the defendant. All the relevant pleadings, evidences and judgments cited before this Court have already been discussed above. In view of the judgments of Kailash Nath Associate's vs DDA, Fateh Chand vs Bal Kishan Dass and M.C Luthra vs Ashok Kumar Khanna, it is decided that the defendant is not entitled to forfeit the entire amount of Rs.1.5 crores but is entitled to forfeit an amount of Rs.20 lacs which was paid as earnest money by the plaintiffs to the defendant at the time Ex.P-1 was entered into being notional amount in comparison to the entire sale consideration and that too on account of the loss suffered by the defendant because of sealing of the property caused by illegal construction that the plaintiff did which was construed as illegal by the concerned authorities.
66 Chapter 6 of the Indian contract act deals with consequences of breach of contract. Section 73 of the Indian contract act talks about compensation for loss or damage caused by breach of contract. It says, 'when a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of business from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 98 of 10167 Such compensation is not to be given for any remote and indirect loss or damage sustained by the reason of the breach. Compensation for failure to discharge obligation resembling those created by contract-when an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person has contracted to discharge it and had broken his contract.
Explanation-in estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the nonperformance of the contract must be considered. General damages are those which arise naturally and in the normal course of events. Special damages are those which do not arise naturally out of the defendants breach and they are recoverable only where they are in reasonable contemplation of the parties at the time they made the contract. In case of general damages, the plaintiff is only required to assert such damage as has been suffered on account of the breach committed by the defendant whereas in the case of special damages, the plaintiff has to specifically plead and prove the same. Special damages are those losses, which can be calculated in financial terms and they represent the precise amount of pecuniary loss which the claimant proves to have suffered from the set of facts pleaded. Section 73 of the contract act is declaratory of the common law as to damages. Law imposes an obligation or implies the terms that upon breach of contract, damages must be paid.
CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 99 of 10168 Therefore, this issue is partly decided in favour of the defendant and partly in favour of the plaintiff.
Issue no.6:
Whether the plaintiff is entitled to claim any interest and if so, at what rate and for what period? OPP
69 As already stated above, it has been decreed that plaintiff is entitled to total amount of Rs.01.30 crores to be received back. Out of the said Rs.1.3 crores, Rs.50 lacs are lying in the form of an Fixed Deposit with Hon'ble High Court which is to be returned back to the plaintiff as it is alongwith all the interest that has accrued on it. Apart from Rs.50 lacs plaintiff is entitled to interest @ 12% per annum as discussed above from the date of filing of the suit till the date of decree on an amount of Rs.80 lacs and further to interest of 6% per annum on the sum of Rs.80 lacs from the date of decree till its actual realization by the plaintiff. Issue No.7:
Relief.
70 As already discussed above, it is hereby ordered that plaintiff is entitled to the following relief(s):-
Plaintiff is entitled to Rs.1.3 crores after forfeiture of Rs.20 lacs as earnest money on account of general damages being suffered by the defendant because of the acts of the plaintiffs and acts of the sealing of the suit property on account of illegal construction as determined by concerned authorities. Plaintiff be returned back Rs.1.3 crores in the manner as already discussed above.CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 100 of 101
Suit of the plaintiff is partly decreed.
Decree sheet be prepared accordingly. File be consigned to record room after due compliance. Digitally signed by SUNIL SUNIL BENIWAL BENIWAL Date: 2018.09.27 16:20:08 +0530 (SUNIL BENIWAL) ADJ-02, Central,THC/Delhi This Judgment contains 101 Pages and all the pages are checked and signed by me.
(SUNIL BENIWAL) ADJ-02, Central,THC/Delhi CS No 16661/16 Pramod Kr. Jain vs Raman Kumar Juneja Page 101 of 101