Delhi District Court
Syed Hasan Miyan Zaidi vs Sabir on 12 August, 2008
1
IN THE COURT OF Sh. SANJEEV AGGARWAL
ADDL. SR. CIVIL JUDGE : DELHI.
MCA No. 84/2008
Syed Hasan Miyan Zaidi
S/o Late Mr. S.A.H Zaidi
R/o B65A, Gali No. 5,
New Govindpura
Delhi110051 ...APPELLANT
V e r s u s
1. Sabir
2. Javed
Both R/o 35, Shahi Masjid,
Rasheed Market
Delhi110051. ...RESPONDENTS
Date of institution:24.07.2008
Date of decision :12.08.2008
J U D G M E N T
1 By this judgment, I will dispose off an appeal preferred by the appellant against the impugned order dated 16.07.2008, passed by the ld. Civil Judge, Delhi whereby the application U/O 39 Rules 1 and 2 CPC of the appellant/plaintiff was dismissed,( hereinafter the parties are being referred to by their respective status before the trial court for the sake of convenience ). 2 2 Brief facts which can be culled out from the trial court record are:
"Plaintiff in his plaint and in his application under consideration has inter alia stated that the defendants are the owner of a property bearing no. B67, measuring area 61.6 sq. yds. situated at Gali No. 5, New Govindpura, Delhi110051, fitted with electric connection. That the defendants wanted to sell the suit property and the plaintiff wants to purchase the same. That the plaintiff and the defendants came in contact through a property dealer namely Sh. Raza Hasan and after negotiation the defendants agreed to sell the above said suit property to the plaintiff for a total sum of Rs. 28,50,000/ and the plaintiff agreed to purchase the same vide a deed of sale agreement dtd. 17/04/2008. That the plaintiff has paid Rs. 1,00,000/ to the defendants on 17/04/2008 as an earnest money and according to the said agreement, the last date of payment of the balance amount and execution of the sale documents of the said suit property in the name of the plaintiff or in the name of his nominee was fixed for 18/08/2008, in the presence of the witnesses.
The plaintiff has further stated that on 30/05/2008 the defendants alongwith the said dealer approached him and told him that they were in dire need of Rs. 2,00,000/ and they both made request to the plaintiff to pay them Rs. 2,00,000/ more as part payment towards balance sale consideration of Rs. 27,50,000/. That on their request the plaintiff arranged Rs. 1,00,000/ and paid the same to the defendants as part payment of the total sale consideration, in the presence of the said dealer and other respectable witnesses. That being in good faith, the 3 plaintiff did not get receipt of the said part payment i.e. Rs. 1,00,000/. That the defendant also assured the plaintiff that they would not decline the payment of Rs. 1,00,000/. That thereafter, the plaintiff, who resides near the suit property, saw that the defendants, alongwith another dealer, were showing the said suit property to some other persons and on enquiry the plaintiff came to know that the defendants wanted to sell the suit property to some other persons for a higher amount. That the plaintiff further came to know through some reliable resources that they were going to sell the suit property to some other persons, so the plaintiff sent a legal notice to the defendant through his counsel therein making request to the defendants not to sell the said suit property to some other persons. That thereafter the defendants came to the plaintiff and told him that they would not sell the said property to any other person other than the plaintiff. That the defendants again contacted some other person and have agreed to sell the said suit property to him for higher amount and when the plaintiff contacted the defendants and asked from them about the same, they did not give reply to the plaintiff but asked the plaintiff to receive back his amount of Rs. 2,00,000/, but the plaintiff refused to receive the said amount. That according to the agreement executed between the plaintiff and the defendants, it is clearly mentioned that " in case the sellers back out from the commitment and does not fulfill the terms of the agreement then the defendants would have to return the advance money to the plaintiff with a penalty which is equal to the above advance, or the purchase is entitled to get the necessary sale documents registered through the 4 court of Law by Specific Performance suit on the cost and expenses of the seller". The plaintiff has lastly stated that as the defendants have tried to back out of the agreement to sell, therefore the plaintiff has filed the present suit.
Defendants in their written statement in preliminary objections, have inter alia stated that the present suit is not maintainable and is liable to be dismissed. That the plaintiff has filed the present suit knowingly and believing it to be false. That the suit is barred under Section 41 (h) and other provisions of Specific Relief Act.
Defendant in their written statement, in reply on merits, have denied most of the averments of the plaintiff and have further stated that nothing was paid by the plaintiff to the defendants after the execution of the said agreement to sell as alleged. That the agreement to sell dated 17/04/2008 has mutually cancelled by the parties vide cancellation of agreement to sell dtd. 09/06/2008 and all accounts have been fully settled between the plaintiff and answering defendants and therefore, nothing remains unpaid and the transaction has come to an end. That all the allegations are sheer concoction and have been levelled by the plaintiff with malafide intention and with a view to blackmail the answering defendant. That after the cancellation of agreement to sell on 09/06/2008, answering defendants are free to do anything so far as the property in question is concerned. That the plaintiff has nothing to do with the suit property and that the contents of alleged notice are absolutely false, frivolous and concocted. That the plaintiff has paid a sum of Rs. 1,00,000/ on 17/04/2008 which he has 5 received back on 09/06/2008, vide cancellation of agreement to sell in presence of witnesses and other respectable persons of locality. That the transaction between the plaintiff and defendants has come to an end on 09/06/2008 and now the plaintiff has nothing to do with the answering defendant."
3 Vide detailed order dated 16.07.08, the application of the plaintiff/appellant U/O 39 Rule 1 & 2 CPC was dismissed as it was held by the ld. trial court that the plaintiff had an equally efficacious remedy of filing a suit for specific performance of agreement to sell dated 17.04.08, in view of the express and implied anticipatory breach of contract hence, as the plaintiff having a contract for sale in his favour has the equally efficacious remedy by way of suit for specific performance, his suit for injunction to restrain the defendants from selling the suit property to others is not maintainable. It is against the said order, the plaintiff/appellant has approached this court on the following main grounds:
i) That the impugned order was not legally sustainable, as the ld. trial court had not correctly appreciated the grievances of the appellant and the said order is liable to be set aside, as the suit of specific performance can only be filed after the other party refuses to comply with the mutually agreed terms and conditions on the date specified in the agreement, more particularly, where the time is essence of the agreement. It is further stated 6 that the date which is fixed for execution of documents for the transfer of the title of the suit property was 18.08.2008 and the respondents without caring about the agreement to sell, were trying to sell out the suit property to a third property before expiry of the date mentioned in the agreement. Consequently, the appellant has preferred a suit for permanent injunction against the respondents thereby restraining them from alienating the suit property to third party till the date of agreement, so that the agreement to sell could not become infructuous.
ii) That the ld. trial court had further wrongly relied upon the judgments AIR 992 All. 35 and AIR 1991 P& H. 194 for the proposition, that the plaintiff was not competent to file the suit for permanent injunction as an equally efficacious remedy was available in the nature of the suit for specific performance. It is stated that in both the aforesaid cases, the time of agreement to sell had expired, whereas in the present case, time is still to expire and further, the concerned party in the said case had not gone for suit for specific performance Act, whereas facts of the present case, are entirely different from the said cases as both the parties vide mutual agreement had agreed to sell the property on 18.08.2008, which is yet to come and the respondents are intentionally trying to sell the property to the third party, therefore, suit for injunction is the best remedy available to the plaintiff for enforcing his legal rights. In any case, the agreement to sell is violated prior to the date of maturity of the agreement to sell, in such circumstances, the appellant had no other option but to file the suit for injunction, as he cannot file the suit for specific performance of contract Act till the date/period of agreement to sell matures.
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Hence, it is stated that the order of the ld. trial court dated 16.07.2008 is not at all sustainable for the reasons stated above and the same deserves to be set aside.
4 I have heard ld. counsel for the appellant, ld. counsel for the respondent and also gone through the order of the ld. trial court. 5 Ld. trial court had held in the impugned order that the plaintiff in the present case had the option to file a suit against the defendant for breach of contract/for specific performance of a contract, because of the anticipatory breach of agreement to sell dated 17.04.2008. It was further held that the plaintiff had an equally efficacious remedy for filing the suit for specific performance of agreement to sell. The trial court had arrived at the said conclusion on the basis of Section 39 of Indian Contract Act, 1872, which embodies the concept of anticipatory breach of contract and in arriving at said conclusion, the ld. trial court had relied upon averments made by the plaintiff in his plaint, where the plaintiff had claimed that defendant was showing the suit property to the property dealers and had agreed to sell the same to a third party for higher consideration, more specifically the allegations made in para 8 of his plaint, wherein the plaintiff had alleged that "
the plaintiff has come to know that the defendants have contacted some 8 other persons and have agreed to sell the said suit property to him in higher amount and when the plaintiff contacted the defendants and asked from them about the same so they did not give clear reply to the plaintiff but asked the plaintiff to receive back his amount i.e. Rs. 2,00,000/ but the plaintiff refused to receive his amount, but he[the plaintiff] told them that he would purchase the same after making the balance amount of Rs. 26,50,000/ on this the defendants are making lame excuses."
and accordingly, it was observed by the ld. trial court from the reading of the aforesaid para, that the defendants have not only renunciated the agreement to sell dated 17.04.2008 by way of their conduct i.e. by trying to sell the property to the third property but they have also renunciated the said agreement to sell by expressly telling the plaintiff to receive back his earnest money of Rs. 2 Lakhs.
6 Now, the counsel for appellant has argued, that the judgments relied upon by the counsel for respondents before the ld. trial court, are not applicable to the peculiar facts and circumstances of the present case, as the time was the essence of the execution of the agreement to sell dated 17.04.2008, wherein the date of execution of the sale deed had been 9 prescribed as 18.08.2008, which date is yet to arrive and since the said date has still not matured, therefore, the appellant/plaintiff had no other remedy available to him other than to file the present suit for injunction for redressal of his grievances. Counsel for plaintiff/appellant has also argued that the appellant can only file the suit for specific performance, after expiry of date mentioned in the said agreement to sell, which is 18.08.2008 and not before that and therefore, he has argued that the plaintiff/appellant had no other efficacious remedy available to him except to file the present suit for injunction.
7 Counsel for appellant has further argued that the signatures of the plaintiff/appellant have been forged on the alleged cancellation agreement dated 09.06.2008, which has been filed on the trial court record and he has also argued that the defendants/respondents have though stated that the suit property has been sold to a third person but no documentary proof has been filed before the ld. trial court or before this court by the respondents/defendants to show, that the suit property had indeed been sold to a third party as alleged.
8 On the other hand, counsel for defendants/respondents has argued that the agreement to sell dated 17.04.08 does not confer any interest upon 10 plaintiff in the suit property, as the said agreement to sell has already been cancelled vide cancellation deed dated 09.06.2008 and by virtue of the said cancellation agreement, the earnest money has also been returned to the plaintiff/appellant and the suit property in question has already been disposed off to some other person and the respondents have been left with no interest in the suit property and therefore, it is argued that there is no infirmity in the impugned order of the ld. trial court and as per Section 39 of the Indian Contract Act, there is a anticipatory breach of contract Act, therefore, the plaintiff has an equally efficacious remedy to file the suit for specific performance of Contract, which he has not done, therefore, the present suit for injunction is not maintainable.
9 In view of the rival contentions addressed by the counsel for parties, I have perused the impugned order and the documents filed on the trial court record. I am of the considered opinion that the suit of the plaintiff, as observed by the ld. trial court, is well covered under the principles, enshrined U/S 39 of Indian Contract Act, 1872, which embodies the principle of English law, pertaining to the anticipatory breach of contract i.e. if one party to a contract resiles from the contract, the other party i.e. the innocent party has an option. He may accept the repudiation and sue for damages or breach of 11 contract. Whether or not the time for performance has come or he may if he chooses disregard or refuse to accept it and then, the contract remains in full effect. The anticipatory breach simply means that a party is in breach from the moment his actual breach becomes inevitable ( Mulla on Indian Contract th and Specific Relief Act, 12 Edition) 10 It has been further laid down in Mulla on Indian Contract and Specific th Relief Act, 12 Edition, Page 1006 which is as under:
" The rule also applies to situations where the performance is contingent. The defendant promised to marry the plaintiff on the death of his (defendant's) father. While the father was still alive, he announced his intention of not fulfilling the contract and the plaintiff brought a suit for damages. It was held by the Court of Exchequer, that the promisee could treat the repudiation of the other party as wrongful putting an end to the contract and may at once bring an action for damages for breach of contract, subject to abatement in respect of any circumstance which may have afforded the means of mitigating his loss. The effect of 'anticipatory breach' was summed up in this judgment before this Act came into force.
The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed, an then hold the other party responsible for all the consequences of non performance: but in that case he keeps the contract alive for the benefit 12 of the other party as well as his own; he remains subject to all his own obligations and liabilities under it, and enables the other party not only to complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstance which would justify him in declining to compete it.
On the other hand, the promisee may, if he thinks proper, treat the repudiation of the other party as wrongful, put an end to the contract, and bring his action at once as on a breach of it; and in such action, he will be entitled to such damages as would have arisen from the non performance of the contract at the appointed time, subject, however, to abatement in respect of any circumstances which may have afforded him the means of mitigating his loss.
The innocent party has an option either to accept the wrongful repudiation or to affirm its continuance. There is no third choice, as a sort of via media, to affirm the contract and yet be absolved from tendering further performance, unless and until the party who refused to perform obligations gives reasonable notice that he is once again able and willing to perform. Such a choice would negate the contract being kept alive for the benefit of both parties and would deny the party who successfully sought to rescind the right to take advantage of any supervening circumstance which would justify him in declining to complete."
11 The law discussed above, is squarely applicable to the facts and circumstances of the present case, as the defendants/respondents by their 13 conduct and actions have clearly indicated to the plaintiff/appellant that the defendants had cancelled the agreement to sell dated 17.04.2008, as the defendants by way of their conduct as mentioned in para 8 of the plaint, whereby they were trying to sell the property to a third party, had clearly indicated that they had no intention to continue with the agreement to sell dated 17.04.08 and they had even expressly asked the plaintiff to take back his earnest money. Hence, there are two options available to the plaintiff/appellant, firstly, the plaintiff/appellant can wait for the time mentioned in the said agreement to sell, to mature and then he can sue the defendants for breach of contract and secondly, the plaintiff may immediately, if he thinks proper, treat the repudiation of the other party as wrongful, put an end to said agreement to sell and bring his action at once for breach of said contract and in such action, he will be entitled for such damages as would have been arisen from the nonperformance of the contract at the appointed time. Hence, in the present case, the ld. trial court had rightly held that the plaintiff had an equally efficacious remedy by filing suit for specific performance under Section 41 of Specific Relief Act, 1963.
12 In any case, it is settled law that the appellate court has no powers to substitute its own discretion in place of the discretion exercised by the trial 14 court, except in the cases where the said discretion has been exercised by the trial court perversely or malafidely, which is not the case in hand.
In view of the above discussion, the impugned order dated 16.07.08 does not suffer from any infirmity and illegality and which is well supported by the reasons. Consequently, the appeal has no merits, same is dismissed. Trial court record be sent back alongwith a copy of judgment and appeal file be consigned to Record Room.
Announced in the open court (Sanjeev Aggarwal) on 12.08.2008 Addl. Senior Civil Judge : Delhi. one spare copy attached.