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Krishan Kumar Wadhwa & Ors vs Arjun Som Dutt & Ors on 22 February, 2018

Author: Manmohan

Bench: Manmohan

$~11
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+      CS(OS) 3316/2015 & IA Nos. 23298/2015, 15617/2017 & 420/2018

       KRISHAN KUMAR WADHWA & ORS                  ..... Plaintiffs
                   Through: Mr. Jayant Mehta, Mr. Samar Bansal,
                            Ms. Sheya Singh and Mr. Sajal Jain,
                            Advocates
                   versus

       ARJUN SOM DUTT & ORS                                  ..... Defendants
                    Through:            Mr. Sanjeev Mahajan, Advocate for
                                        D-1
                                        Mr. Munindra Dvivedi & Ms. Tanya
                                        Chanda, Advocates for D-2&4.
                                        Mr. Dhruv Mohan, Advocate for D-3,
                                        Along with D-3, in person.

%                                   Date of Decision: 22nd February, 2018
       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN

                           JUDGMENT

MANMOHAN, J (Oral):

IA No. 6255/2017 (Under Order 12, Rule 6, CPC)

1. Present application has been filed by the plaintiffs under Order 12 Rule 6 of Code of Civil Procedure for recovery of Rs.

7,50,00,000/- (Rupees Seven Crore and Fifty Lakhs only) out of the advance sale consideration of Rs. 10,00,00,000/- (Rupees ten crores only) paid to defendant nos. 1 to 4 along with interest @ 15% per annum.

2. Learned counsel for the plaintiffs states that on 3rd January, 2012, the defendant nos. 1 to 4 had entered into an Agreement to Sell for property bearing No. B-8, Maharani Bagh, New Delhi.

3. Since learned counsel for the plaintiffs places heavy reliance on Clause 2(a) and 3 of the said Agreement to Sell, the same are re-produced here-in-below :-

"2. (a) That out of the total consideration of Rs.65,00,07,000/- (Rs. Sixty Five Crores Seven Thousand Only), the Vendees have paid to the Vendors a sum of Rs.10,00,00,000/- (Rs. Ten Crores Only), (i.e. Rs.2,50,00,000/-

as earnest money and Rs.7,50,00,000/- as part sale consideration), at the time of execution of this Agreement to Sell in the following manner:-

Rs.83,33,333/- vide cheque No.671011, dt. 03.01.2012 Rs.83,33,333/- vide cheque No.671526, dt. 03.01.2012 Rs.83,33,334/- vide cheque No.672007, dt. 03.01.2012 All favouring Ms.Roop Talwar;

Rs.1,25,00,000/- vide cheque No.671008, dt. 03.01.2012 Rs.1,25,00,000/- vide cheque No.671527, dt. 03.01.2012 Rs.1,25,00,000/- vide cheque No.672008, dt. 03.01.2012 All favouring Shri Vivan Som Dutt;

Rs.62,50,000/- vide cheque No.671012, dt. 03.01.2012 Rs.62,50,000/- vide cheque No.671530, dt. 03.01.2012 Rs.62,50,000/- vide cheque No.672011, dt. 03.01.2012 All favouring Shri Arjun Som Dutt;

Rs.62,50,000/- vide cheque No.671013, dt. 03.01.2012 Rs.62,50,000/- vide cheque No.671531, dt. 03.01.2012 Rs.62,50,000/- vide cheque No.672012, dt. 03.01.2012 All favouring Ms.Pritha Som Dutt;

all drawn on Bank of Mahrashtra N.D.S.E.-I, Branch, New Delhi, The receipt of which the Vendors hereby admit and acknowledge.

xxx xxx xxx

3. That time of payment of the balance sale consideration is the essence of this agreement for sale and it is upon this assurance and undertaking of the Vendees, the Vendors have agreed to sell the said property to the Vendees. In the event the Vendees fail to make the balance payment within the stipulated period, despite the Vendors being ready, willing and having complied terms of this agreement, the Vendors shall forfeit a sum of Rs.2,50,00,000/- (Rs. Two Crores Fifty Lacs Only), paid under this Agreement and the balance shall be refunded immediately by way of demand drafts to the Vendees.

The Vendees shall upon such refund have no objection and claim to the said property and the Vendors shall be free to sell the said property to any other prospective buyer(s) without any let or hindrance from the Vendees."

4. Learned counsel for the plaintiffs points out that defendant no.1 had terminated the Agreement to Sell on 29th May, 2013 and had forwarded three cheques totalling to Rs. 1,40,62,500/- (Rupees One Crore forty lakh sixty two thousand and five hundred only). The said cheques were returned by the plaintiffs to the defendant no.1 by way of a communication dated 7th June, 2013. Only one out of the three cheques amounting to Rs. 46,87,500/- (Rupees forty six lakh eighty seven thousand and five hundred only) was encashed and kept in a separate interest bearing 'no lien account' by plaintiff no.1.

5. On 22nd August, 2013, defendant no. 3 asked the plaintiffs to make the payment of balance sale consideration as all the compulsory requirements stood fulfilled.

6. In any event, on 22nd October, 2015, the Agreement to Sell in question was terminated by the plaintiffs.

7. Learned counsel for the plaintiffs on demurrer states that as the Agreement to Sell in question is an admitted document and the defendants are entitled to only forfeit 25% of the amount in accordance with Clause 3 of the Agreement to Sell dated 3rd January, 2012 being Rs. 2,50,00,000/- (Rupees two crore and fifty lakh only), the balance advance amount i.e. Rs. 7,50,00,000/- (Rupees seven crore and fifty lakh only) needs to be refunded to the plaintiffs. To this extent, he prays for a decree on admission.

8. Per contra, learned counsel for the defendant No.1 contend that as despite termination of the said Agreement to Sell, the plaintiffs continued to assert their right in respect of the property and prevented the defendants from selling the same, they are entitled to a set off Rs.1,71,00,280/- (Rupees one crore seventy one lakh and two hundred and eighty only) being the interest on the amount of unpaid sale consideration.

9. Learned counsel for defendant No.3 states that the said defendant was and is still ready and willing to sell the suit property to the plaintiff. He further states that the property could not be sold initially to the plaintiffs due to the intransigent attitude of the defendant No.1. He lastly states that defendant No.3 being a single mother has no money to refund. He points out that in an execution petition between the defendants, there is a possibility of the suit property being sold on the next date of hearing in May, 2018.

10. Learned counsel for the defendant Nos. 2 and 4 adopts the arguments advanced by the learned counsel for the defendant No.1 and states that the plaintiffs never had the capacity to pay the balance sale consideration.

11. Having heard the learned counsel for the parties, this Court is of the view that the intent and object of Order 12 Rule 6 CPC is to enable a party to obtain a speedy judgment to the extent the relief is admitted by the defendant. The Supreme Court in Uttam Singh Duggal & Co. Ltd. Vs. United Bank of India & Ors., (2000) 7 SCC 120, has held as under:-

"12. As to the object of Order 12 Rule 6, we need not say anything more than what the legislature itself has said when the said provision came to be amended. In the Objects and Reasons set out while amending the said Rule, it is stated that "where a claim is admitted, the court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled". We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where the other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which it is impossible for the party making such admission to succeed."

12. While it is the plaintiffs' case that the transaction of sale was not concluded due to inter se problems between the defendants, it is the case of the defendants that the plaintiffs never had the wherewithal to pay the balance sale consideration.

13. However, in the present case, the existence, execution and validity of the Agreement to Sell dated 3rd January, 2012 is an admitted fact. It is further admitted that Rs. 10,00,00,000/- (Rupees ten crores only) was paid as advance by the plaintiff to the defendants in accordance with Clause 2(a) of the said Agreement to Sell. Further, Clause 3 of the Agreement to Sell specifically provides that in the event of its termination, the defendants shall be entitled to forfeit 25% of the earnest money paid at the time of execution of the agreement.

14. Consequently, this Court is of the opinion that the remaining 75% amount being Rs. 7,50,00,000/- (Rupees seven crore and fifty lakhs only) has been admitted to be refunded by the defendants to the plaintiffs.

15. The fact that the defendants have made a claim for set off would make no difference as no Court fees has been paid on the amount claimed as set off. A Coordinate Bench in Ashoka Estate Pvt. Ltd. & Ors. Vs. Dewan Chand Builders Pvt. Ltd. and Ors. 2009 (113) DRJ 193 has held that in absence of Court-fees there is no valid set off. The relevant portion of the said judgment is as under:-

"Though the defendants have made claims of over Rs. 20 crores against the plaintiffs and have used the words of set off/adjustment/claims therein but neither any counter claim has been preferred nor any court fees on set off paid. In the absence thereof, there is no such plea of the defendants for consideration before this Court."

16. Moreover, this Court is of the view that the defendants would have to prove set off under Order 8 Rule 6 CPC before retaining any part of the admitted sum. The defendants will have to abide by the CS(OS) 3316/2015 Page 6 of 7 terms of admitted Agreement to Sell dated 3rd January, 2012. A Division Bench of this Court in Indian Oil Corporation Ltd. Vs. International Building & Company (Pvt.) Ltd., 93 (2001) DLT 566 (DB) has held as under:-

"Another aspect which disentitles the appellant to seek set off is that a set off is normally for an ascertained sum as per provisions of Order VIII Rule 6, CPC. In the present case, the appellant wants to claim set off for claims which are to be adjudicated upon on evidence. Set off is being claimed on account of risk purchase and damages for alleged delay in execution of work. Such claims cannot be said to be claims for ascertained sums of money. Therefore, even on merits, a claim for set off cannot be entertained."

17. Consequently, the present application is allowed and suit is decreed partially against the defendants for Rs.7,03,12,500/- (being Rs.7,50,00,000/- minus Rs.46,87,500/-, amount already received by the plaintiff as aforesaid). However, the prayer for interest is declined at this stage as the rate of interest has not been stipulated either in the Agreement to Sell or in any other contemporaneous document. It is clarified that the issue of interest shall be considered at the stage of final disposal of the suit after considering the evidence led. The payment of Rs.7,03,12,500/- (Rupees Seven Crore, Three Lakh, Twelve Thousand and Five Hundred only) shall be made by the defendants on or before 2nd July, 2018, to the plaintiffs.

18. List the matter for framing of issues on 26th July, 2018.

MANMOHAN, J FEBRUARY 22, 2018/P CS(OS) 3316/2015 Page 7 of 7