Delhi High Court
Mera Baba Infrastructure Pvt Ltd vs Chailu (Deceased) Through Lrs on 1 November, 2019
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 1st November, 2019
+ CS(OS) 400/2016 & IAs No.9770/2016 (u/O XXXIX R-1&2
CPC) & 10614/2019 (u/O XII R-6 CPC)
MERA BABA INFRASTRUCTURE PVT LTD ..... Plaintiff
Through: Mr. Asit Tiwari and Mr.
Virender Singh Rana, Advs.
Versus
CHAILU (DECEASED) THROUGH LRS ..... Defendant
Through: Mr. R.C. Gupta and Mr. O.P.
Upadhyay, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The plaintiff has instituted this suit for recovery of
Rs.4,48,31,000/- pleading (i) that the defendant, vide agreement to sell
dated 19th April, 2013 agreed to sell his agricultural land to the
plaintiff for a total sale consideration of Rs.35,28,80,000/- and the
plaintiff paid a sum of Rs.3,53,00,000/- to the defendant as advance
payment i.e. 10% of the total amount and the receipt whereof the
defendant acknowledged; (ii) that though the plaintiff approached the
defendant to complete the sale and to deliver possession of the land as
well as original title deeds, but subsequently came to know that the
land which was shown by the defendant to the plaintiff was not owned
by the defendant and the defendant also failed and avoided to take 'No
Objection Certificate' from the Competent Authority for taking Tatima /
demarcation of the land and/or for partition of the land; (iii) that the
defendant, despite extension of time for taking steps, failed to comply
with his part of the agreement; and, (iv) that the defendant was thus
CS(OS) No.400/2016 Page 1 of 8
liable to refund the advance payment of Rs.3,53,00,000/- received, but
failed to do so inspite of demand. Hence, the suit for recovery of
Rs.3,53,00,000/- along with interest @ 9% per annum from 31st July,
2013 to 30th July, 2016 amounting to Rs.95,31,000/- i.e. for total
amount of Rs.4,48,31,000/-.
2. The suit came up first before this Court on 12 th August, 2016,
when summons thereof were ordered to be issued. The order dated
20th December, 2016 records that written statement had been filed by
the defendant. However, the defendant died soon thereafter and vide
order dated 28th August, 2017 his legal representatives (LRs) were
substituted. The order dated 28th August, 2017 also records that
written statement had already been filed by the deceased defendant
and the plaintiff was directed to file replication thereto. However, the
subsequent order dated 14th November, 2017 records that the LRs of
the deceased defendant had filed a fresh written statement and the
plaintiff was directed to file replication thereto. There was however
no adjudication, whether the LRs of the deceased defendant were
entitled to file a fresh written statement.
3. On the pleadings of the parties, the following issues were
framed in the suit on 7th September, 2018:
"1. Whether the suit is barred by limitation? OPD
2. Whether the plaint does not disclose any cause of
action in favour of the plaintiff? OPD
3. Whether the suit is barred under the provisions of
the Section 41(h) of the Specific Relief Act, 1963?
OPD
CS(OS) No.400/2016 Page 2 of 8
4. Whether the plaintiff is entitled to a money decree
for the recovery of Rs.4,48,31,000/- against the defendant?
OPP
5. Whether the plaintiff is entitled to recovery of
interest @ 9% pa on the suit amount pendentelite
and future interest from the date of filing of suit?
OPP
6. Relief."
and the parties relegated to trial.
4. The counsel for the plaintiff, on enquiry states that though the
affidavits by way of examination-in-chief of the witnesses of the
plaintiff have been tendered in evidence but cross-examination has not
commenced as yet.
5. The plaintiff has filed IA No.10614/2019 under Order XII Rule
6 of the Code of Civil Procedure, 1908 (CPC) and to which reply has
been filed by the defendant.
6. The counsel for the plaintiff has contended, (i) that there was no
clause in the agreement to sell entitling the defendant to forfeit the
monies received as advance from the plaintiff; (ii) that the defendant
has not made any counter-claim for any loss or compensation suffered on
account of breach of the agreement to sell, even if any by the plaintiff;
(iii) that the plaintiff in accordance with the dicta of the Supreme
Court in Kailash Nath Associates Vs. Delhi Development Authority
& Anr. (2015) 4 SCC 136 is entitled to a decree for refund forthwith with
interest at such rate as may be awarded by the Court.
7. The counsel for the plaintiff has however also pointed out that
though in the written statement filed by the deceased defendant no loss
CS(OS) No.400/2016 Page 3 of 8
even was pleaded, but in the fresh written statement filed by the LRs
of the deceased defendant, in paragraphs 7 to 9 of the preliminary
objections, it has been pleaded (a) that the deceased defendant had
distributed the earnest money received from the plaintiff and forfeited
for breach of the agreement by the plaintiff, equally between his three
sons impleaded as LRs No.2, 3 & 4, with the consent of the LRs No.1,
5 & 6 and had also transferred the subject land in favour of LRs No.2
to 4; (b) that LRs No.2 to 4 invested the monies so received from their
father, by purchasing land property in their names; and, (c) that the
price of the property has fallen down in the area to the extent of 20%
and the plaintiff was not willing to purchase the land for this reason.
8. In the face of the aforesaid, I have enquired from the counsel for
all the LRs of the deceased defendant, why the suit should not be
decreed forthwith.
9. The counsel for the LRs of the deceased defendant states that
issues have already been framed in the suit and the defendant, in
evidence will show that it was the plaintiff who was in breach of
various obligations under the agreement to sell.
10. I have however further enquired from the counsel for the LRs of
the deceased defendant, that even if the LRs of the deceased defendant
succeed in establishing the plaintiff to be in breach of the agreement to
sell, whether not in accordance with the dicta in Kailash Nath supra
followed by this Court in Palm Art Apparels Pvt. Ltd. Vs. Enkay
Builders 2017 SCC OnLine Del 12766, Mera Baba Pvt. Ltd. Vs. Ram
Lubhaya Puri 2018 SCC OnLine 9502, Klintoz Parmaceuticals Pvt.
Ltd. Vs. Ravinder Shankar Mathur 2018 SCC OnLine Del 11954,
CS(OS) No.400/2016 Page 4 of 8
Satish Verma Vs. Garment Craft (India) Pvt. Ltd. 2018 SCC OnLine
Del 6829 and Mahendera Verma Vs. Suresh T. Kilachand 2019 SCC
OnLine Del 9333, the defendant would still remain liable for refund of
the monies received from the plaintiff under the agreement to sell,
having not made any claim for compensation on account of loss, if any
suffered on account of breach of the agreement to sell, by the plaintiff.
11. The counsel for the LRs of deceased defendant then seeks
adjournment of 15-20 days to argue.
12. The suit is listed today for arguments on the application under
Order XII Rule 6 of the CPC and the counsel for the LRs of deceased
defendant, before filing a reply to the said application, is expected to
study the law and in fact today initially opposed the application and
only on finding himself in a sticky wicket is requesting adjournment.
Such adjournments cannot be granted and have to be refused. Such
adjournments sought, when faced with adversity, only lead to
pendency of cases, with none of the cases coming to be decided owing
to the counsels wanting to ward off the evil day. The adjournment is
thus refused.
13. No other argument has been made by the counsel for the
defendant.
14. A perusal of the agreement to sell dated 19th April, 2013 which
is not in dispute and has been admitted into evidence as Ex.P-1 shows,
(i) the amount of Rs.3,53,00,000/- described as 'earnest money' i.e.
10% of the total amount; (ii) providing in Clause 9 thereof that if the
deceased defendant did not perform his part of the agreement within
the stipulated period, the plaintiff will be free to get the sale deed done
CS(OS) No.400/2016 Page 5 of 8
in its favour at the same price without any extra compensation but not
providing for consequences of forfeiture of earnest money in the event
of the plaintiff being in breach.
15. Though the written statement subsequently filed by the LRs of
the deceased defendant ought not to have been taken on record
without specific permission of the Court for filing of a fresh written
statement by the LRs of the deceased defendant as the LRs ordinarily
are bound by the pleadings of their predecessor, but a perusal of even
the written statement filed by the LRs of the defendant does not show
any plea of any loss suffered by the LRs. All that is pleaded is
forfeiture of earnest money on breach by the plaintiff and distribution
of the monies amongst the three sons of the deceased defendant and
who are pleaded to have invested the same in purchase of other
properties. It is not the plea that in the matter of said purchase of other
properties also, any loss was suffered. The plea of fall in prices is
only in relation to the reason for the plaintiff to not go ahead with
transaction and it is not the plea that the deceased defendant sold the
property at any value lesser than that at which the plaintiff had agreed
to purchase. Rather, it is merely pleaded that the deceased defendant,
with the consent of his widow and daughters, gifted the land earlier
agreed to be sold to the plaintiff to LRs No.2 to 4.
16. It has been held in Poorna Radiology Services Pvt. Ltd. Vs.
Philips Electronics India Ltd. MANU/DE/8456/2007; Lalit Kumar
Bagla Vs. Karam Chand Thapar & Bros. (CS) Ltd. 204 (2013) DLT
392 and Mahendra Verma Vs. Suresh T. Kilachand
MANU/DE/2352/2019 that without a Counterclaim for recovery of
CS(OS) No.400/2016 Page 6 of 8
compensation for loss alleged to be suffered, mere plea in the written
statement of the defendant for breach of agreement to sell by the
plaintiff having suffered a loss is of no avail.
17. Thus, the plaintiff is found to be entitled to a decree.
18. However in the issues framed in the suit, an issue of limitation
has been framed and which needs adjudication. The LRs of the
deceased defendant, in their written statement, have pleaded breach of
agreement to sell by the plaintiff. The agreement to sell dated 19 th
April, 2013 provides for completion of sale by 15 th July, 2013.
However, the deceased defendant vide legal notice dated 31 st July,
2013 admitted into evidence as Ex.P-3, though claimed the earnest
money received to be liable to be forfeited as on 15 th July, 2013 and
again after expiry of extended period on 26th July, 2013, but extended
the time for completion of sale to 14th August, 2013. Thus, the date
fixed for performance of the agreement to sell was 14th August, 2013.
This suit is found to have been instituted on 30 th July, 2016 and came
up first before this Court on 12th August, 2016 i.e. within three years
from the date of forfeiture and is within time.
19. The plaintiff is thus found entitled to a decree for refund of
monies.
20. A perusal of the pleadings and the documents however does
indicate that it was the plaintiff who was reneging from the agreement
to sell. The said factor though not relevant for entitlement of the
plaintiff to refund of earnest money, but is relevant for the purpose of
fixing the rate of interest. The plaintiff, along with its documents has
not filed copy of any communication which may have been sent to the
CS(OS) No.400/2016 Page 7 of 8
defendant, demanding refund of the monies for recovery of which the
present suit has been filed. On the contrary, the defendant is found to
be writing to the Additional District Magistrate within whose
jurisdiction the land subject matter of the agreement to sell is situated,
to not register any sale deed of the land owing to the monies of the
plaintiff lying with the defendant. In this view of the matter, the
plaintiff is not found entitled to any pre-suit interest. The plaintiff is
however found entitled to interest pendente lite @ 6% per annum and
future interest @ 9% per annum.
21. A decree is accordingly passed, in favour of the plaintiff and
jointly and severally against all the legal heirs of the deceased
defendant and of whom the LR No.1 being the wife of the deceased
defendant is stated to have died, of recovery of Rs.3,53,00,000/- with
interest pendente lite @ 6% per annum and future interest @ 9% per
annum, leaving the parties to bear their own costs.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
NOVEMBER 01, 2019 'bs' CS(OS) No.400/2016 Page 8 of 8