Delhi High Court
M/S Ritu Mercantiles Pvt Ltd & Anr vs Leelawati on 17 May, 2013
Author: Manmohan
Bench: Manmohan
30
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 1396/2011
M/S RITU MERCANTILES PVT LTD & ANR ..... Plaintiffs
Through: Mr. B.K. Sood, Advocate with
Mr. Manharjit Singh and Mr. Manik
Sood, Advocates.
versus
LEELAWATI ..... Defendant
Through: Mr. Ravi Gupta, Senior Advocate with
Mr. J.K. Jain and Mr. Ankit Jain,
Advocates.
% Date of Decision: 17th May, 2013
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
JUDGMENT
MANMOHAN, J: (Oral) I.A. 9288/2011 in CS(OS) 1396/2011
1. Present injunction application has been filed in the suit for Specific Performance of Agreement to Sell dated 03rd February, 2011 for purchase of 1/3rd share of defendant in agricultural land admeasuring 42 Bighas and 6 Biswas (14 Bighas and 2 Biswas) in village Jhatikara, New Delhi-110043 for a total consideration of Rs.5 crores. The admitted position is that as of date, the plaintiffs have paid to the defendant only Rs.50 lacs.
CS(OS) 1396/2011 Page 1 of 202. It is stated that in December, 2010, one Mr. Prem Raj introduced the plaintiff No.2, director of plaintiff No.1, to the defendant‟s son to negotiate the aforesaid Agreement to Sell on behalf of the defendant. It is further stated in the plaint that Rs.10 lacs was paid to the defendant in December, 2010 to enable her to discharge a loan of Rs.8 lacs taken from Punjab National Bank.
3. According to the plaintiff, it was agreed that in accordance with the standard practice, the balance sale consideration was to be paid after the defendant obtained the „No Objection Certificate‟ from the statutory authority under the Delhi Land (Restrictions on Transfer) Act, 1972 (hereinafter referred to as "Act, 1972").
4. Mr. B.K. Sood, learned counsel for plaintiffs states that the task of preparing the Agreement to Sell was left to Mr. Manoj Tyagi, son of the defendant as he was a lawyer. He further states that the Agreement to Sell was prepared in Hindi language with which plaintiff No.2 is not proficient and taking advantage of the said fact, the liability of obtaining „No Objection Certificate‟ was fraudulently cast upon the plaintiffs. According to him, the Agreement to Sell was signed by the plaintiffs believing that the representation made at the time of entering into the contract was faithfully reproduced.
5. Mr. Sood, learned counsel further states that as clause 2 was contrary to what was agreed between the parties, defendant on 08th March, 2011 i.e. one month after the execution of the Agreement to Sell, sought to resile from the Agreement and forfeited the advance.
6. Mr. Sood submits that the obligation to obtain „No Objection Certificate‟ from the Tehsildar under the Act, 1972 is upon the owner/seller CS(OS) 1396/2011 Page 2 of 20 by virtue of its Section 4. In support of his submission, Mr. Sood relies upon a judgment of this Court in Shri Dharam Pal vs. Shashi Kant Saini, 2011 (122) DRJ 334, wherein it has been held as under:-
"7. Learned counsel for the appellant very strongly pressed the following points in support of the appeal:
(i) The respondent/plaintiff had committed breach of contract because a sum of Rs.1,50,000/- was not paid vide receipt Ex.PW1/3.
(ii) There was no reason why in spite of the appellant
allegedly not getting the NOC, the
respondent/plaintiff continued to pay further amounts, if really the appellant had committed a breach of the contract.
(iii) It is the practice that NOC is obtained by the buyer of a property and not the seller/appellant/defendant.
(iv) The suit was barred by limitation and for which reliance was placed upon Ahmmadsahab Abdul Mulla (dead) proposed Lrs. V. Bibijan and Ors., 2009 (5) Scale 437, Janardhanam Prasad v.
Ramdas, JT 2007 (3) SC 187: 2007 (94) DRJ 7(SC) and Manjunath Anandappa URF Shivappa Hanasi v. Tammanasa and Others, (2003) 10 SCC 390. The decision in the case of Ahmmadsahab (supra) was relied upon to canvass the proposition that a date fixed necessarily implies a definite date which must be a crystallized date with reference to evidence and materials brought on record. The decision in the case of Janardhanam Prasad (supra) was relied upon in support of the proposition that when there is a refusal of performance, the trial Court has to crystallize a date of refusal of specific performance for commencement of period of limitation. The decision in the case of Manjunath (supra) was relied upon to canvass that there should not be an uncertain long date even if no period is fixed for performance of contract CS(OS) 1396/2011 Page 3 of 20 for commencement of limitation.
8. ...........So far as the argument that it is "practice" that NOC should be obtained by the buyer of the property, once again this argument is misconceived because firstly in law it is always the seller who has to make himself capable of transferring the property and which capability is achieved when the seller gets the necessary NOC from the revenue authorities....."
7. On that other hand, Mr. Ravi Gupta, learned senior counsel for defendant contends that the plaintiffs having failed to obtain the „No Objection Certificate‟ and further having failed to get the Agreement to Sell executed within the stipulated time i.e. till 05th March, 2011, is not entitled to any relief from this Court. Mr. Gupta vehemently denies that under the Act, 1972 only the owner/seller has to obtain „No Objection Certificate‟. He refers to the Form to be filled under the Act, 1972 to show that both the transferor and transferee have to obtain the permission. He contends that plaintiffs were never ready and willing to perform their obligations under the aforesaid Agreement to Sell. Mr. Gupta, learned senior counsel points out that plaintiffs had not even applied for obtaining a „No Objection Certificate‟ within the stipulated period.
8. Mr. Ravi Gupta, learned senior counsel states that it was the plaintiffs who had purchased the stamp paper and who had got the Agreement to Sell drafted. According to him, the plaintiffs had intentionally got the Agreement to Sell prepared in Hindi language so as to avoid any objection in future from the defendant that she did not know English.
9. Mr. Ravi Gupta also submits that time was the essence of the Agreement to Sell executed between the parties. In support of his CS(OS) 1396/2011 Page 4 of 20 submission, he relies upon a judgment of the Supreme Court in M/s. Citadel Fien Pharmaceuticals vs. M/s. Ramaniyam Real Estates Pvt. Ltd., AIR 2011 SC 3351 wherein it has been held as under:-
"37. In a case where time is of the essence of the contract, the consequence of non-performance of such term has been very succinctly explained by Chitty on Contracts, (Volume 1, Thirteenth Edition, Sweet & Maxwell in paragraph 21-015) and the same is set out:
"Consequences of time being "of the essence". In determining the consequences of a stipulation that time is to be "of the essence" of an obligation, it is vital to distinguish between the case where both parties agree that time is to be of the essence of the obligation and the case where, following a breach of a non-essential term of the contract, the innocent party serves a notice on the other stating that time is to be of the essence. In the former case the effect of declaring time to be of the essence is to elevate the term to the status of a "condition" with the consequences that a failure to perform by the stipulated time will entitle the innocent party to: (a) terminate performance of the contract and thereby put an end to all the primary obligations of both parties remaining unperformed; and (b) claim damages from the contract-breaker on the basis that he has committed a fundamental breach of the contract ("a breach going to the root of the contract") depriving the innocent party of the benefit of the contract ("damages for loss of the whole transaction. (page 1410)
38. Fry in his Treaties on the Specific Performance of Contracts (Sixth Edition) has dealt with this aspect in paragraph 1075:
"Time is originally of the essence of the contract, in the view of a Court of Equity, whenever it appears to have been part of the real intention of the parties that it should be so, and not to have been inserted as a merely formal CS(OS) 1396/2011 Page 5 of 20 part of the contract. As this intention may either be separately expressed, or may be implied from the nature or structure of the contract, it follows that time may be originally of the essence of a contract, as to any one or more of its terms, either by virtue of an express condition in the contract itself making it so, or by reason of its being implied.... (page 502)
39. In paragraph 1079, the learned author has explained the position further by saying the time may be implied as essential in a contract from the nature of the subject matter with which the parties are dealing. The learned author explained this by saying:
1079. Time may be implied as essential in a contract, from the nature of the subject-matter with which the parties are dealing. "If, therefore," said Alderson B., "the thing sold be of greater or less value according to the effluxion of time, it is manifest that time is of the essence of the contract: and a stipulation as to time must then be literally complied with in Equity as well as in Law.... (page 504)
40. At paragraph 1081 page 505, the learned author made it very clear that in a contract relating to commercial enterprise the Court is strongly inclined to hold time to be essential, whether the contract is for the purchase of land or for such purposes or more 'directly for the prosecution of trade'. The elaboration of this point by the learned author is as follows: 1081. And so, again, where the object of the contract is a commercial enterprise, the Court is strongly inclined to hold time to be essential, whether the contract be for the purchaser of land for such purposes, or more directly for the prosecution of trade. This principle has been acted on in the matter of a contract respecting land which had been purchased for the erection of mills, also in relation to a sale of pasture lands, required by the purchaser, as the vendor knew, for stocking, and in several cases of contracts for the sale of public-houses as going concerns.... (page 505) CS(OS) 1396/2011 Page 6 of 20
41. The aforesaid principles squarely apply to the facts of the present case. Here the purchaser is admittedly in the business of building construction and is entering with agreement for purchasing the plot on commercial basis."
10. Mr. Gupta states that the defendant in anticipation of receipt of the consideration under the Agreement to Sell had demolished her house with intent to reconstruct it and had even entered into a further agreement for purchase of another property wherein Rs.32 lacs was paid as advance. He states that as plaintiffs failed to comply with the terms of the present Agreement to Sell, the defendant could not comply with her obligation under the Agreement to Sell with the third party and as a consequence thereof, her entire advance of Rs.32 lacs has been forfeited.
11. In rejoinder, Mr. B.K. Sood, learned counsel for plaintiffs refers to Form 1 under the Delhi Lands (Restrictions on Transfer) Rules to contend that application under Section 5(1) of the Act, 1972 has to be obtained only by the owner/seller. He further submits that time was not the essence of the Agreement to Sell. In this connection, he relies upon Balasaheb Dayandeo Naik (Dead) Through L.Rs. & Ors. Vs. Appasaheb Dattatraya Pawar, AIR 2008 SC 1205 wherein it has been held as under:-
"10. It is clear that in the case of sale of immoveable property, there is no presumption as to time being the essence of the contract. Even where the parties have expressly provided that time is the essence of the contract, such a stipulation will have to be read along with other provisions of the contract. For instance, if the contract was to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week, the work undertaken remains unfinished on the expiry of the time provided in the contract, such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of CS(OS) 1396/2011 Page 7 of 20 contract. In the case on hand, though the parties agreed that the sale deed is to be executed within six months, in the last paragraph they made it clear that in the event of failure to execute the sale deed, the earnest money will be forfeited. In such circumstances, the above-mentioned clauses in the last three paragraphs of the agreement of sale would render ineffective the specific provision relating to the time being the essence of contract.
xxxx xxxx xxxx
12. As observed in the said decision, in the case on hand the appellants/plaintiffs clearly established their claim to secure specific performance of the agreement by leading cogent evidence whereas the respondent/defendant having pleaded that time was the essence of the contract neither entered the witness box nor led any evidence whatsoever. The High Court lost sight of the above material aspect and the conduct of the defendant in not strengthening his plea by placing acceptable evidence. In such circumstances, as rightly argued by learned counsel for the appellants, the High Court should have confirmed the decree of specific performance granted by the trial Court. On the other hand, the High Court wrongly placed reliance on the decision of this Court in K.S. Vidyanadam and Others vs. Vairavan, (1997) 3 SCC 1 as in the facts of that case, this Court found that granting for specific performance was inequitable, however such aspect of the matter was totally absent in the case on hand. Even otherwise, para 11 of the judgment shows that the subject matter of the property was an urban immoveable property and in such special circumstance relaxed the general rule that time is not the essence of the contract in the case of immoveable properties. In the case on hand, the details furnished in the agreement clearly show that the subject- matter of the property is an agricultural land situated in Kolhapur Dist., Maharastra. In such circumstances, the decision in K.S. Vidyanadam and Ors. (supra) is not applicable to the facts on hand. In the facts of the present case, which we have already adverted to, neither the terms of agreement nor the intention of CS(OS) 1396/2011 Page 8 of 20 the parties indicate that the time is an essence of the agreement. We have already pointed that having raised such a plea the respondent even did not bother to lead any evidence.
xxxx xxxx xxxx
13. It is true that the defendant in his written statement has made a bald claim that the time was the essence of contract. Even if we accept the recital in the agreement of sale (Exh. 18) that the sale deed has to be executed within a period of six months, there is an express provision in the agreement itself that failure to adhere the time, the earnest money will be forfeited. In such circumstances and in view of recital pertaining to forfeiture of the earnest money makes it clear that time was never intended by the parties to be of essence. The Constitution Bench decision in Chand Rani vs. Kamal Rani (supra) also makes it clear that mere fixation of time within which contract is to be performed does not make the stipulation as to the time as the essence of contract. Further, we have already pointed out that the defendant has not bothered to prove his claim on oath before the Court to the effect that it was the plaintiffs who avoided performing their part of contract. All the above-mentioned material aspects were correctly appreciated by the trial Court and unfortunately the High Court failed to adhere to the well known principles and the conduct of the defendant. When the third plaintiff deposed before the Court explaining their case with reference to the recitals in the agreement of sale including the reference to the legal notice to the defendant, in the absence of contra evidence on the side of the defendant, we are unable to agree with the conclusion arrived at by the High Court in non- suiting the plaintiff. The High Court commented the conduct of the plaintiffs in praying for refund of the earnest money, namely, Rs.20,000/- paid as advance. As rightly pointed out, the claim for refund of earnest money is only their alternative claim. It is not in dispute that in all suits for specific performance, the plaintiff is entitled to seek alternative relief in the event the decree for specific performance cannot be granted for any reason, hence there is no infirmity in the alternative plea of refund.CS(OS) 1396/2011 Page 9 of 20
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15. The civil appeal is allowed on the above terms.
However, in the facts and circumstances of the case, there shall be no order as to costs.
12. Having heard the learned counsel for parties, this Court is of the view that the first issue that needs to be adjudicated upon is whether the obligation to obtain the „No Objection Certificate‟ under the Act, 1972 is statutorily cast upon the owner/seller/defendant.
13. Upon a detailed reading of the Act, 1972, this Court is of the view that its intent is to impose certain restrictions on transfer of lands which have either been acquired by the Central Government or in respect of which acquisition proceedings have been initiated.
14. There is no provision in the Act, 1972 which casts a mandatory duty upon the owner/seller/defendant to obtain the „No Objection Certificate‟. Just because the owner/seller/defendant has to sign the „No Objection Certificate‟ and produce the same at the time of registration of the Sale Deed, it cannot be said that there is a legal obligation cast only upon the owner/seller to obtain the same.
15. The judgment of Shri Dharam Pal vs. Shashi Kant Saini (supra) relied upon by the plaintiffs is clearly distinguishable on facts as in that case the Agreement between the parties specifically provided that the „No Objection Certificate‟ would be obtained by the owner/seller/defendant. The relevant portion of the said judgment of Shri Dharam Pal vs. Shashi Kant Saini (supra) reads as under:-
"8. ........... Also, there was no doubt in the present case as to who had to obtain the NOC because the agreement itself CS(OS) 1396/2011 Page 10 of 20 provided that the NOC will be obtained by the appellant/defendant...."
(emphasis supplied)
16. Under the Agreement to Sell executed between the parties in the present case, the obligation to obtain the „No Objection Certificate‟ was admittedly upon the purchaser/plaintiffs. The English translation of Clause 2 of the Agreement to Sell is as under:-
"2. That before the date of registration, the purchaser should bring the N.O.C. certificate and inform the seller in this regard. The first party would not take any legal action before the court of Tehsildar regarding the NOC till the fixed date."
(emphasis supplied)
17. Further the plaintiffs‟ argument that Clause 2 of the Agreement to Sell was contrary to the oral understanding reached between the parties prior to its execution, is untenable in law. Sections 91 and 92 of the Indian Evidence Act, 1872 read as under:-
"91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of document.--When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence 3 shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained.
Exception 1.--When a public officer is required by law to be appointed in writing, and when it is shown that any particular CS(OS) 1396/2011 Page 11 of 20 person has acted as such officer, the writing by which he is appointed need not be proved.
Exception 2.--Wills4[ admitted to probate in5[ India]] may be proved by the probate.
Explanation 1.--This section applies equally to cases in which the contracts, grants or dispositions of property referred to are contained in one document and to cases in which they are contained in more documents than one.
Explanation 2.--Where there are more originals than one, one original only need be proved.
Explanation 3.--The statement, in any document whatever, of a fact other than the facts referred to in this section, shall not preclude the admission of oral evidence as to the same fact."
92. Exclusion of evidence of oral agreement.--When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:
Proviso (1).--Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, [want or failure] of consideration, or mistake in fact or law.
Proviso (2).--The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard CS(OS) 1396/2011 Page 12 of 20 to the degree of formality of the document.
Proviso (3).--The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved.
Proviso (4).--The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents.
Proviso (5).--Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved:
Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract.
Proviso (6).--Any fact may be proved which shows in what manner the language of a document is related to existing facts."
18. A Division Bench of this Court in Shailendra Nath Endlay & Anr. vs. Kuldip Gangdotra, 180 (2011) DLT 769 (DB) has held as under:-
"7. In the present case, it is an admitted position that the parties entered into an agreement to sell dated 31st March, 2004 Exhibit P-1. It is also observed that Clause 4 of the said agreement to sell dated 31st March, 2004 reads as under:-
"4. That after getting the property converted into freehold the VENDOR will sign and execute proper Sale Deed in favour of the VENDEE or his nominee(s) and will get same registered with Sub-registrar, New Delhi however the CS(OS) 1396/2011 Page 13 of 20 expenses for conversion of flat into free hold will be borne by vendee."
8. From a plain reading of Clause 4, it is apparent that the Appellant (Vendor) after getting the property converted into freehold was required to sign and execute proper Sale Deed in favour of the Respondent (Vendee) and was required to get the same registered with the sub-Registrar, New Delhi, however, subject to the expenses for conversion of flat into freehold being borne by the Respondent (Vendee). As was correctly observed by the learned Single Judge all the obligations preceding the word "however" were cast upon the Appellant (Vendor) and the obligations as regards the expenses which follow the word "however" was cast upon the Respondent (Vendee). Further, it is an admitted position that the Respondent had paid the requisite fee of Rs.41,275/- and Rs.24,765/- being the stamp duty and transfer duty respectively to fulfill his obligations as stipulated in the Clause 4 of the said agreement to sell. It is also noted that the Respondent has further paid a sum of Rs.
11,075/- as service charges to the DDA. Furthermore, by his letter dated 9th July 2004 (Ex. D-2) the Respondent had requested the Appellants to take necessary steps to adhere to the time stipulated in the said agreement to sell i.e. 15th July, 2004. It was also indicated in this letter that the Respondent was ready with the balance consideration amount which was payable to the Appellants at the time of execution of the Sale Deed before the sub-Registrar to meet the time stipulated in the said agreement to sell. The Respondent has been able to demonstrate that he was ready with the balance amount of Rs. 31.5 lakhs as was further demonstrated by his depositing Fixed Deposit Receipts RFA (OS) 88-89/2006 maintained in this behalf with the Registry of this Court. This clearly indicates that not only was the Respondent ready and willing on the due date of performance, but his readiness and willingness continued at the time of institution of the Suit as well. Thus, it is seen that as provided by the said Clause 4 the obligation of getting the said flat converted from leasehold to freehold was on the Appellant (Vendor) but the expenses for such conversion were to be borne CS(OS) 1396/2011 Page 14 of 20 by the Respondent (Vendee). In this behalf, it is seen that the learned Single Judge came to the conclusion that when the plain meaning of the said clause is clear, then the assistance of extrinsic evidence could not be availed of.
9. From the above discussion it is clear that the obligation of getting the said flat converted into freehold was on the Appellants and not on the Respondent. Insofar as, the Respondent was concerned his obligations under the said agreement to sell dated 31st March, 2004 were to make payment of the advance amount of Rs.1lakh; to make the payment for conversion charges and fee; and to pay the balance amount of Rs.31.5 lakhs as also the stamp duty and registration fee necessary for the execution and registration of the Sale Deed. The first two acts were admittedly done by him and the occasion did not arise for him to perform the last because the Appellants failed to get the suit property converted from leasehold to freehold. On the other hand, the Appellants were required to vacate the tenant from the said flat which they did; and get the said flat converted from leasehold to freehold prior to the execution of the Sale Deed and hand over the physical possession to the Respondent at the time of Registration, which acts the Appellants failed to perform. As regards the contention raised on behalf of the Appellants, that it was orally agreed between the parties that the Respondent would be responsible for getting the said flat converted into freehold, is concerned the said assertion is devoid of merit. It is a well settled principle of interpretation that Evidence Act forbids proving the contents of a writing other than by the writing itself. This doctrine described by the Supreme Court as "best evidence rule" is in reality a doctrine of substantive law, namely, that in case of a written contract all proceedings and contemporaneous oral expressions of the thing are merged in the writing and displaced by it. In other words, when persons express their agreement in writing, it is for the express purpose of getting rid of any indefiniteness and to put their ideas in such shape that there can be no misunderstanding, which so often occurs when reliance is placed upon oral statements. Written contracts CS(OS) 1396/2011 Page 15 of 20 presume deliberation on the part of the contracting parties and it is natural they should be treated with careful consideration by the courts and with a disinclination to disturb the conditions of matters as embodied in them by the act of the parties. The Supreme Court in Roop Kumar (supra) has observed:
"17. It is likewise a general and most inflexible rule that wherever written instrument are appointed, either by the requirement of law, or by the contract of the parties, to be the repositories and memorials of truth, any other evidence is excluded from being used either as a substitute for such instruments, or to contradict or alter them. This is a matter both of principle and policy. It is of principle because such instruments are in their own nature and origin, entitled to a much higher degree of credit than parol evidence. It is of policy because it would be attended with great mischief if those instruments, upon which men's rights depended, were liable to be impeached by loose collateral evidence. (See Starkie on Evidence, p. 648.)"
10. Thus, it is seen that the provisions of the Evidence Act come into operation for the purpose of excluding evidence of any oral agreement or statement for the purpose of contradiction, varying, adding or subtracting from its terms, after the document has been produced to prove its terms.
11. In the circumstances, the present Appeal is devoid of merit and is hereby dismissed. The Appellants shall carry out the conversion of the said flat from leasehold to freehold within a period of two months and shall thereafter execute and register the Sale Deed within ten days. Since the Respondent is already in possession as a Receiver of the said flat, the payment of the balance amount by the Respondent shall take place simultaneously with the execution of the Sale Deed. The Respondent is permitted to utilize the Fixed Deposit Receipts deposited with the Court for the purposes of making the payment of the balance consideration amount. The Respondent shall be entitled to refund of Rs.18,000/- per month paid to the CS(OS) 1396/2011 Page 16 of 20 Appellants towards the occupation charges of the said flat from 1st November, 2010 and may adjust the said amount whilst paying the balance consideration towards the purchase of the said flat. No order as to costs."
(emphasis supplied)
19. Consequently, as in the present case, the terms of a contract have been reduced in the form of a document, no evidence of any oral agreement or statement can be admitted as between the parties to any such instrument for the purpose of contradicting, varying, adding or subtracting from its terms.
20. Further, if the plaintiffs‟ case of fraud or mistake of fact is accepted, then it would render the entire Agreement to Sell void or voidable and in that eventuality the plaintiffs would not be entitled to seek specific performance.
21. Even illustration (e) under Section 92 of the Indian Evidence Act offers no assistance to the plaintiffs as the said illustration pertains to an instance of mistake of law--which as held hereinabove is not the case.
22. In fact, this Court on similar facts in Prem Grover vs. Balwant Singh, 126 (2006) DLT 575 declined injunction. The relevant portion of the said judgment reads as under:-
"10. A perusal of the terms and conditions of the Agreement to Sell shows that the NOC had to be obtained by the defendant in favour of the plaintiff or his nominee. Thus, the plea of the defendant that the plaintiff is only an intermediary and, thus, the Agreement to Sell ought not to be specifically performed cannot be accepted for the reason that the defendant had agreed to obtain the NOC and execute the Sale Deed either in favour of the plaintiff or his nominee. The obligation to obtain the NOC has been clearly put on the defendant.CS(OS) 1396/2011 Page 17 of 20
11. It may be stated that other than the notice, nothing has been pointed out by the plaintiff whereby any prior intimation was sent that the NOC should be obtained in favour of any party, though it is alleged that the same was informed. This aspect can only be examined once evidence is recorded. What is, however, material is that it is not the case of the defendant that he obtained NOC in the name of the plaintiff. In fact, the NOC has not been obtained at all. The defendant has, on the other hand, tried to make out a case as if the NOC had to obtained by the plaintiff for which the defendant signed it and gave it to him. This is not the obligation under the Agreement and at least at this prima facie stage there cannot be a finding arrived at in favour of the defendant."
(emphasis supplied)
23. As far as the issue whether time is the essence of the contract or not, the Constitution Bench of the Supreme Court in Smt. Chand Rani (dead) by L.Rs. vs. Smt. Kamal Rani (dead) by L.Rs., AIR 1993 SC 1742 has held as under:-
"24. From an analysis of the above case-law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are:
1. from the express terms of the contract;
2. from the nature of the property; and
3. from the surrounding circumstances, for example: the object of making the contract."
24. The relevant terms of the Agreement to Sell with regard to the time being the essence of the contract are reproduced hereinbelow:-CS(OS) 1396/2011 Page 18 of 20
"3. In case due to any reason the purchaser, the second party refuses to purchase the property, the transaction will be considered cancelled and the amount taken as token money will be forfeited. Thereafter the seller would not be bound to get it registered. If the transaction is cancelled, the seller would be free to sell his land.
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6. Before the registration, the second party would make balance payment to the first party. In the event it does not so happen, the deal would stand cancelled, and the second party would not take any legal action in this regard."
(emphasis supplied)
25. In the presence case, upon a conjoint reading of Clauses 3 and 6 of the Agreement to Sell, this Court is of the view that time was the essence of the contract.
26. Further, the plaintiffs in the plaint have themselves averred that rates in area have risen substantially and have claimed an amount of Rs.1.50 crores as the quantum of loss suffered by them. In the opinion of this Court, as the plaintiffs themselves admit that within a period of about three months, the value of suit property has increased by at least Rs.1.50 crores, the same clearly shows that the time was the essence of the contract.
27. The judgment of Balasaheb Dayandeo Naik (Dead) Through L.Rs. & Ors. Vs. Appasaheb Dattatraya Pawar (supra) also offers no assistance to the plaintiffs as it deals with agricultural land and not with an urban immovable property. The said distinction has been drawn by the said judgment itself in para 12.
CS(OS) 1396/2011 Page 19 of 2028. Consequently, this Court is prima facie of the view that the plaintiffs neither performed their obligations nor were ready and willing to perform the same under the Agreement to Sell. Accordingly, the present application is dismissed and injunction order dated 31st May, 2011 is hereby vacated.
CS(OS) 1396/2011 List the matter for framing of issues on 23rd October, 2013.
MANMOHAN, J MAY 17, 2013 js CS(OS) 1396/2011 Page 20 of 20