Delhi District Court
Date Of Institution : 04.12.2006 vs Sh. Rajesh Aggarwal on 7 July, 2015
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IN THE COURT OF SH SUMEDH KUMAR SETHI,
ACJ/CCJ/ARC(WEST),TIS HAZARI, DELHI
UID No. 02401C01125062006
CS No. 1416/2007
Date of Institution : 04.12.2006
Date of Decision : 07.07.2015
Smt. Kulwant Kaur
w/o Sh. Harbhjan Singh
R/o. 58/26, Ashok Nagar,
New Delhi-110018
........... Plaintiff
Versus
Sh. Rajesh Aggarwal
Resident of 5, Roop Nagar,
Shakti Nagar Chowk,
New Delhi-110007
ALSO AT
880, Keshav Building,
Near Shora Kothi,
Clock Tower, Subzi Mandi,
Delhi. .......... Defendant
JUDGMENT
1. The present suit was filed by the plaintiff under Order XXXVII of the CPC, 1908 for the recovery or Rs.1,54,000/-.
Plaintiff has alleged that :
1.1 The defendant represented to the plaintiff in the first week of November, 2003 that the defendant is the owner of the property bearing no. B-16, Christian Colony, Delhi and offered to sell the said property to the plaintiff.
1.2 The plaintiff then entered into and agreement for the purchase of the said property bearing no. B-16, Christian Colony, Delhi with the defendant for a total sale consideration of Rs.15,00,000/- against which CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 2 of 36 the plaintiff had paid a sum of Rs.25,000/- towards biana/earnest money to the brother of the defendant Sh. Praveen Aggarwal on 26th November, 2003 and a sum of Rs.75,000/- on 03rd December, 2003 towards biana/earnest money to the defendant in cash that is Rs.
1,00,000/- in total and against which the defendant had duly issued two receipts.
1.3 As per the said agreement the plaintiff was to pay the balance sum of Rs.14,00,00/- within 60 days of the agreement to the defendant. That although the plaintiff was ready to perform his part of the contract and willing to make the balance payment, the defendant was not ready to perform his part of the contract and to execute valid title deeds in favour of the plaintiff on the pretext that the defendant needs the said property for his personal use and in case the same is sold it would be sold to the plaintiff. The defendant has further had agreed to refund the agreed amount before the expiry date of the deal.
1.4 In spite of repeated visits and reminders from the plaintiff, the defendant failed to refund the agreed amount. That vide letter dated 04th April, 2004 the defendant was requested by the plaintiff to refund double the earnest money along with interest @ 36% per annum but the defendant failed to pay the said amount.
1.5 Again vide letter dated 29th April, 2004 the plaintiff requested the defendant to either transfer the property in her favour or refund the earnest amount to the plaintiff along with interest @ 36% per annum in addition to other charges within 7 days of the receipt of the letter but the defendant failed to do so.
1.6 The plaintiff has now come to know from reliable sources that the defendant has fraudulently sold the said property to one Sh. A. S. Sharma on 07th January, 2004 which is absolutely illegal and unlawful on his part and the same sale as such is absolutely illegal, null and void.
1.7 The defendant has a valid, legal subsisting contract in respect of the said property with the plaintiff and as such the defendant cannot back CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 3 of 36 out from the same and cannot sell the said property to Sh. A. S. Sharma. Hence the sale has been made to defraud with the plaintiff. Hence the plaintiff was left with no other option but to refund of her earnest amount but the defendant on one pretext or other kept on avoiding and ignoring the plaintiff.
1.8 Even after the receipt of legal notice dated 26th September, 2006 and a corrigendum notice dated 27.09.2006 but the defendant had failed to make the payment of above said earnest amount. Notice sent through registered at the Subzi Mandi address of the defendant was refused by the defendant but the notice sent at the Shakti Nagar address has been duly received by the defendant.
1.9 The defendant is liable to pay a sum of Rs.1,54,000/-(Rupees One Lac and Fifty Four Thousand only) i.e. Rs.1,00,000/- as earnest money and Rs.54,000/- as interest at the rate of 18% per annum for three years to the plaintiff but he has failed to make the above said payment.
2. Vide order date 21.12.2006 it was recorded that the plaintiff wanted the suit to be treated as an ordinary suit for recovery and hence summons were issued in ordinary/ normal course and not u/O XXXVII CPC. After service upon the defendant on 05/04/2008, appearance was put in on behalf of defendant. However, WS was filed on 23.08.2008. The same was taken on record vide order of the even date.
3. In the WS filed on behalf of the defendant he has alleged that the present suit was hopelessly barred by limitation and :
3.1 That in and around the month of September 2003 the plaintiff through a property dealer Mr. Ajay Mansi had approached the brother of the defendant Mr. Parveen Aggarwal and showed the interest in buying the property No. B-16, Christan Colony, Patel Chest Delhi, then owned by the defendant. With the knowledge, consent and authority on from the defendant, defendant's brother Mr. Parveen Aggarwal and the husband of the plaintiff entered into negotiations CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 4 of 36 and agreed to sell the said property for a sale consideration of Rs. 15 lacs. It is pertinent to mention here that the deal was negotiated by defendant's brother as the defendant was not in India from 11.09.2003 to 24.11.2003.
3.2 That after the deal was finalized, the plaintiff paid a sum of Rs.
25,000/- to the defendant's said brother Mr. Parveen Aggarwal who received the same on behalf of the defendant. Mr. Parveen Aggarwal, on behalf of the defendant, also executed a Receipt-cum-Agreement. It was agreed that the plaintiff would make the payment of the balance sale consideration within 60 days.
3.3 That after the defendant returned to India, the plaintiff paid another sum of Rs.75,000/- to the defendant. The defendant had acknowledged the receipt of the said sum of Rs.75,000/- on the photocopy of the earlier Receipt-cum-Agreement executed by defendant's brother Mr. Parveen Aggarwal.
3.4 That thereafter the defendant or his brother did not hear anything from the side of the plaintiff for many days and on contacting the aforesaid property dealer, the defendant and his brother were informed that the plaintiff was having difficulty in making arrangement for payment of the balance sale consideration of Rs.14 Lacs.
3.5 That as the plaintiff was not coming forward to make the payment despite the near expiry/expiry of the stipulated period, the defendant got sent across several messages, including telephonic message, to the plaintiff to immediately make the payment of the balance consideration and complete the formalities of the deal otherwise the deal shall stand canceled and the sum of Rs.1 lac paid by the plaintiff to the defendant shall also stand forfeited.
3.6 That as the plaintiff did not come forward to complete the contract by making the payment of the balance consideration even long after the expiry of the stipulated period the defendant had no other CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 5 of 36 alternative except to forfeit the amount of Rs.1 lac paid by the plaintiff and consequent to he cancellation the deal.
3.7 That the defendant thereafter, through the same property dealer Mr. Ajay Mansi, sold the property to one Mr. A. S. Sharma which fact was well within the knowledge of the plaintiff and the plaintiff never raised any objection to the sale of the property. The plaintiff admitted default and breach of the terms of the agreement on her own part and even accepted the forfeiture of Rs.1 lac without any demur.
3.8 That a perusal of the original Receipt-cum-Agreement executed by the defendant's brother and the photocopy of the said Receipt-cum- Agreement on which defendant acknowledged the receipt of Rs.75,000/- would show that they have been tampered and manipulated by the plaintiff and that they were and could not have been executed on the alleged dates i.e 26.11.2003 and 03.12.2003. In fact the execution of said Receipt-cum-Agreement and the acknowledgment of receipt of Rs.75,000/-, both, were much prior to the aforesaid alleged dates. Even the sale of the property by the defendant to Mr. A. S. Sharma was much after the expiry of the actual stipulated period of payment and not prior to it as alleged by the plaintiff.
3.9 That the present suit is a mere after thought, wherein, on the basis of manipulated documents, the plaintiff is trying her luck in taking a chance to effect the recovery of money which otherwise stands legally forfeited by the defendant. The plaintiff has only tried to capitalize the mistake of the defendant/his brother in not writing the date on the Receipt-cum-Agreement at time of receiving Rs.25,000/- as well at the time of receiving Rs.75,000/-. Had the plaintiff been able to arrange the balance sale consideration within the actual stipulated period of time or may be even thereafter, the plaintiff would have certainly and obviously filed a suit for Specific Performance of Contract against the defendant.
3.10 That it is not denied that the plaintiff paid a sum of Rs.25,000/- to CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 6 of 36 the brother of the defendant and then a sum of Rs.75,000/- to the defendant. It is however, specifically denied that the said sums were paid by the plaintiff to the brother of the defendant and the defendant on 26.11.2003 and 03.12.2003, respectively, as alleged. It is submitted that the said sums were paid by the plaintiff to the brother of the defendant and the defendant much prior to the alleged dates. Moreover, when the defendant was very much in Delhi on 26.11.2003 after having returned from abroad on 24.11.2003, there was no reason for defendant's brother to have executed the Receipt-cum-Agreement on behalf of the defendant. The very fact, as admitted by the plaintiff that the Receipt-cum-Agreement was executed by defendant's brother makes is amply clear that it was never executed on 26.11.2006, as alleged by the plaintiff, but much prior to that, when the defendant was not in India.
3.11 That it is submitted that the agreement came into force and became binding on the parties at the time of payment of initial Rs. 25,000/- and it was within 60 days of said payment that the balance of Rs.14.75 lacs was to be paid by the plaintiff to the defendant and that the contract was to be concluded. It is further submitted that there was no extension of time, whether express or implied or otherwise, at the time of payment Rs.75,000/-. The plaintiff is making submissions against the record by saying that the plaintiff was to pay the balance sum of Rs.14 lacs within 60 days of the agreement.
3.12 That the defendant had never agreed to refund any amount at any point of time.
3.13 That it is stated that the plaintiff could not make arrangement of the balance consideration within the actual stipulated period of time and any averment of the plaintiff to the contrary is liable to be ignored, more particularly in absence any documentary proof showing the plaintiff's ability to make the payment of the balance consideration or plaintiff having arranged the funds within the actual stipulated period or the period as alleged by the plaintiff to be stipulated period.
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3.14 That it is specifically denied that in spite of repeated visits and
reminders from the plaintiff the defendant failed to refund the amount or that vide any letter, much less letter dated 04.04.2004 the defendant was requested by the plaintiff to refund the double the earnest money along with interest @ 36% per annum but the defendant failed to pay it.
3.15 That neither any valid legal notice nor any corrigendum dated 27.09.2006 was ever received by the defendant. Otherwise also the plaintiff has not placed even a copy of the alleged corrigendum dated 27.09.2006 on the record.
4. Vide Order dated 19.11.2008, following issues were framed by the Court:
1) Whether plaintiff is entitled for recovery of Rs. 1,54,000/-?
OPP
2) Whether plaintiff is entitled for any interest, if yes at what rate? OPP
3) Whether suit is barred by limitation? OPD
4) Whether amount of Rs. 1 lac given towards earnest money was forfeited in terms of the agreement? OPD
5) Relief.
5. In order to prove its case, Smt. Kulwant Kaur was examined as PW-1 on behalf of petitioner. In her evidence, the she has tendered her affidavit which bears her signatures at point A and B, wherein she has relied upon the following documents:-
5.1 Ex. PW-1/1 and Ex. PW-1/2 are the receipts of bayana/earnest money.
5.2 Ex. PW-1/3 is the letter dated 04.04.2004.
5.3 Ex. PW-1/4 is the letter dated 29.04.2004.
5.4 Ex. PW-1/5 is the legal notice dated 26.09.2006.
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5.5 Ex. PW-1/6 is the postal receipt.
There is no documents Ex. PW-1/7. Accordingly the reference to Ex. PW-1/7 In the affidavit stood deleted.
PW-1 Smt. Kulwant Kaur was cross examined by Ld. counsel for defendant. In her cross examination she deposed that they were having negotiations with Mr. Parveen in the first week of November, 2003. She was not aware as to who is the owner of the property but they entered into negotiations with Mr. Parveen and have handed over the payment to him. She had handed over Rs.25000/- to Mr. Parveen. She had not made Mr. Parveen Aggarwal as party in the present suit. Vol. she had made payment to Rajesh Aggarwal also. She knew Ajay Mansi who was a dealer and through whom she had approached the defendant. She had met Mr. Ajay Mansi in the first week of November, 2003. Mr. Ajay Mansi told her regarding property of the Parveen Aggarwal and had taken her to him. Sh. Parveen Aggarwal told her that property bearing No. B-16, Patel Chest, Christen Colony was their property. She had met Rajesh Aggarwal on 03.12.2003 when she made the second payment. One or two times she had asked for executing sale deed but she did not remember the date & month. She knew that fact that the sale deed would be executed by Rajesh Aggarwal. She had given Rs.25000/- to Parveen Aggarwal as it had been impressed by Ajay Manshi and Parveen Aggarwal that there was no difference between them. Her husband had seen documents of property in question on 26.11.2003. After seeing the property documents her husband was quite satisfied in respect to the property in question which was in the name of Rajesh Aggarwal. Vol. As it had been impressed by the Parveen Aggarwal that there was no difference between Rajesh Aggarwal and Parveen Aggarwal. She did not ask any documents in respect to the property in question in the name of Parveen Aggarwal having been executed by Rajesh Aggarwal. She identified her signature on the document Ex.PW1/1 at point 'A'. Since she was illiterate so she could not tell which signature belongs to Parveen Aggarwal on the document Ex.PW1/1. It is correct that her CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 9 of 36 husband had looked into regarding the execution of Ex.PW1/1. She had made her husband as witness to her suit. Document Ex.PW1/1 was handed over to her husband on the date of execution. She had paid Rs. 75,000/- to Rajesh Aggarwal. Rajesh Aggarwal handed over her a receipt regarding payment of Rs.75,000/- on the photocopy of receipt-cum- agreement. She took Ex.PW1/1 with her while handing over Rs.75000/- to Rajesh Aggarwal. She asked Rajesh Aggarwal to endorse regarding the payment on original document Ex.PW1/1. She did not know regarding the fact that Rajesh Aggarwal was not available in India 11.09.03 to 24.11.03 that is why she had payment to Parveen Aggarwal. She denied that she had put the date on Ex.PW1/1 & PW1/2 subsequently to the execution of those documents. She did not tell her husband to ask Parveen Aggarwal and Rajesh Aggarwal to put date below their signatures on the document Ex.PW1/1 & Ex.PW1/2. Vol. It might be known to her husband. She did not place any document which shows that at the relevant time/transaction period, she had sufficient amount for making payment towards the transaction. Vol. But she had sufficient funds for payment towards the transaction. She denied that she did not have sufficient amount for making balance payment towards the transaction therefore earnest money of Rs.1 lac had been forfeited.
During her further cross examination PW-1 deposed that her case is only against Rajesh Aggarwal and not against Praveen Aggarwal that is why she had not made him a party to the suit. She denied that she did not have right to recover Rs.25,000/- from defendant because she had paid the said amount of Rs.25,000/- to Mr. Praveen Aggarwal. She came to know about sale of the property bearing No. B/16, Christian Colony, Delhi on 06.07.2006 when she went to Christian Colony. She never went to Christian Colony from 2003 till 05.07.2006. She had talked to Ajay Mansi and Rajesh Aggarwal during the period from 2003 till 06.07.2006. She had asked the defendant and Ajay Manshi to execute a sale deed. She did not remember any specific date when she had asked the defendant or the said Mr. Ajay Manshi to execute a sale CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 10 of 36 deed. She denied that she did not have the balance requisite amount of Rs.14,00,000/- during the period between 2003 till 2006 for executing the sale deed. She denied that she kept silent for these three years and did not demand the Rs.1 lakh given by her to the defendant as token money because the agreement was cancelled and the said amount forfeited. She had sent a letter in April, 2004 for refund of the earnest money alongwith interest.
She was asked the following question: Q. What was the reason to send the letter dated 04.04.2004?
She replied: Ans. Because she went to Christian Colony in 2006 and she came to know about sale of the said property and then asked the defendant to refund the earnest money vide the letter dated 04.04.2004.
At this stage witness was shown Ex.PW1/2. After seeing the same, witness stated that same bears her signatures at point 'B'. She did not know whose signature is at point C on Ex.PW1/2 as she is an illiterate. She denied that her signature at point B on Ex.PW1/2 had been inserted later on alongwith date. She denied that Ex.PW1/2 is a forged document.
She did not know who was the owner of the Christian colony property and that is why she could not say whether the defendant Mr. Rajesh Aggarwal did not take the amount of Rs.25,000/- personally. Vol. The payment of Rs.25,000/- was given to Praveen Aggarwal. She denied that amount of Rs.75,000/- was given to the defendant on 25.11.2003 when he returned from his trip abroad. Vol. She had made the payment of Rs.75,000/- on 03.12.2003. She denied that her suit was not within limitation and same was liable to be dismissed. She denied that she had rendered herself liable to be prosecuted and punished for various offences under sections of IPC. She denied that as she had not made Praveeen Aggarwal and Ajay Manshi parties to the suit, so the suit was liable to be dismissed for non joinder of necessary party. She denied that despite several massages including telephonic massages to her from the defendant she did not pay the balance consideration. She denied that CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 11 of 36 she admitted the default and breach of terms of the agreement on her part and accepted the forfeiture of Rs.1 lakh without any demur. She denied that Ex.PW1/2 had been tampered and manipulated by her and her husband and the same could not be executed on alleged dates of 26.11.2003 and 03.12.2003. She denied that if she had been able to arrange the balance sale consideration within actual stipulated period of time or even thereafter she would have certainly filed a suit for specific performance of contract. Vol. she had filed the correct suit. She denied that defendant had never agreed to refund any amount at any point of time. She denied that in absence of any documentary proof showing ability to make the payment of the balance consideration within the actual stipulated period, she was not entitled to refund of the forfeited amount. Vol. she had documentary proof which are on record. She denied that she was very well aware of the sale of Christian Colony property to another party much prior to July, 2006. She denied that neither any legal notice nor any corrigendum dated 27.09.06 was ever sent by her to the defendant. She denied that the corrigendum dated 27.09.06 is not even on the record. She denied that she was not entitled to any interest at whatsoever rate. She denied that as the earnest money had already been forfeited the interest of Rs.54000/- as prayed by her in her plaint was not liable to be paid to her. She denied that she was deposing falsely. She denied that her suit is false.
PW-2 Sh. Harbhajan Singh tendered his evidence by way of affidavit which is Ex.PW-2/A bearing his signatures at point A and B. He had relied upon the documents which were already exhibited as Ex. PW-1/1 to Ex. PW-1/6.
During his cross examination he deposed that the affidavit Ex.PW-2/A had been drafted by his counsel at his instance. Mr. Praveen Aggarwal offered his to sell the property. He visited alongwith plaintiff in the first week of November 2003 alongwith dealer Ajay Mansi. During this visit no property papers were shown to him. On 26.11.03 he had for the first time asked for the property papers after making the CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 12 of 36 payment of Rs. 25,000 by the plaintiff. During first week of November 2003 till 26.11.03 there were no negotiations between the plaintiff and Praveen Aggarwal. On 26.11.03 Mr. Praveen Aggarwal shown him the property papers. On examining they came to know that property papers were in the name of Mr. Rajesh Aggarwal (defendant), the brother of Praveen Aggarwal. On 26.11.03 the plaintiff alongwith him, property dealer Ajay Mansi and one more person Mr. J. S. Dayal who signed as witness and Mr. Praveen Aggarwal were present. On 26.11.03 he had seen the entire chain of property papers. He did not remember the exact documents of property shown to him at that time. On 26.11.03 sum of Rs. 25,000/- were paid by plaintiff to Sh. Praveen Aggarwal and Mr. Praveen Aggarwal had executed the receipt-cum-agreement acknowledging the payment. On 26.11.03 no document was executed between plaintiff and defendant. On 26.11.03 plaintiff also appended his signatures on the said receipt-cum-agreement which was handed over to plaintiff. There was only one document i.e. receipt-cum-agreement 26.11.03 was executed between the plaintiff and the brother of defendant, Mr. Praveen Aggarwal. He denied that as per above said receipt-cum- agreement the remaining balance payment was supposed to be made within 60 days. Vol. The limitation of 60 days was to be started from the day of second instalment for remaining payment. He denied that remaining balance of Rs. 14,75,000/- was to be made at the time of execution of sale deed. The second instalment of Rs. 75,000/- was made on 03.12.03 by the plaintiff. The second instalment of Rs. 75,000/- was paid to Sh. Rajesh Aggarwal. Mr. Rajesh Aggarwal had acknowledged the payment of Rs. 75,000/- on the photocopy of the receipt-cum- agreement executed on 26.11.03 which was exhibited as Ex.PW-1/1, which was kept with Mr. Praveen Aggarwal. He denied that Mr. Rajesh Aggarwal did not execute any document in favour of plaintiff. Vol. Rajesh Aggarwal acknowledged the payment of Rs. 75,000 on the photocopy of receipt-cum-agreement dated 26.11.03. He was not the witness on the receipt-cum-agreement dated 26.11.03. He denied that he was not CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 13 of 36 present at the time of execution of receipt cum agreement dated 26.11.03. He denied that he had deposed falsely in his affidavit that defendant had executed two receipts-cum-agreement in favour of plaintiff. He denied that the two receipts dated 26.11.03 and 03.12.03 have been executed much prior to that dates. The payment of Rs. 25,000/- made on 26.11.03 was not paid to the defendant as the defendant was not present there.
6. PE was closed vide order dated 25.03.2013.
7. In order to prove his case, the defendant examined himself as DW-1. In his evidence, he has tendered his affidavit Ex. DW-1/A wherein he has relied upon one document i.e. his passport Ex. DW-1/1(2 pages). The document as mentioned Ex. DW-1/2 was not on record. During his cross examination DW-1 Rajesh Aggarwal denied that contents of para-2 of his affidavit were wrong. He was aware of contents of his affidavit. He did not remember the date, month or year of preparation of his affidavit Ex. DW-1/A. The affidavit must had been prepared after filing of the case. He admitted that the affidavit EX. DW-1/A bears his signatures. The affidavit was signed at his office. Affidavit was prepared by his previous counsel at his office. He denied that contents of para-3 and 4 of his affidavit were incorrect. He admitted that Mr. Ajay Massi who was his agent as well as property dealer had got sold the property to Sh. A.K. Sharma. Vol. he was not his agent and he had brought the offer of A.K. Sharma to him. He was not in India at the time when negotiation of the property took place between his brother, plaintiff and her husband. vol. his brother had told him about negotiation on the phone and he took the token money. The negotiation transpired in the first week of September, 2003. He denied that the negotiations did not taken place in September, 2003 but rather took place on 26.11.2003.
At this stage, witness was confronted with the document Ex.PW1/1 wherein the date of 26.11.2003 is given under the signatures of the plaintiff.
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Witness deposed that the date was put by the plaintiff unilaterally. He stated that he was not in India when the document was executed. He denied that the document was signed on 26.11.2003 and hence bears the said date. Vol. the copy of the document which was signed by him afterward i.e. Ex.PW1/2 did not bear the aforesaid date when he signed the same. He denied that at the time of preparation of the document, 4-5 copies of the same were obtained without signatures of the plaintiff so that receiving could be given on subsequent dates as and when part payment was made. He admitted that he had signed Ex. PW-1/2. He admitted that Ex. PW-1/2 bears the signatures of the plaintiff and the same bears the date 03.12.2003. vol. However, these signatures were not put before him. He denied that whenever part payment was made, he, his brother, Kulwant Kaur and Harbhajan Singh were present. He had not put on record copy of notice sent by him to the Plaintiff for cancellation of the deal. He denied that he had not sent any such notice and hence the same had not been put on record. He denied that both of the receipts had not been manipulated. vol. there had been manipulation with respect to the dates. He had no proof to support his contention that he came to know about the plaintiff not being able to arrange the balance amount of Rs.14 lacs. vol. the same had been told to him by Ajay Massi. The 'stipulated period' mentioned in para-9 in his affidavit refers to the two months' period during which the plaintiff was supposed to make balance payment. He could not say whether he had referred to the two months' period in his WS. No date was fixed between the parties for execution of sale deed of the suit property. He admitted that plaintiff had sent him letters dated 04.04.2004 and 29.04.2004 i.e. Ex.PW1/3 & Ex.PW1/4 respectively. He had not replied to those letters. vol. after those letters, case itself came before the court. There was no document to show that he had sent repeated reminders to the Plaintiff for remaining payments. He denied that no such reminders were sent because he did not want to sell the suit property to the plaintiff. vol. whatever communication was there was made through Ajay CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 15 of 36 Massi. He denied that no such communication was made through Ajay Massi or for that reason Ajay Massi never appeared in the witness box. vol. Ajay Massi had called him a day before and told him that he was busy for some work at DDA and hence could not appear. He did not remember clearly but he thought a notice was sent to the plaintiff before 'bayana' was forfeited. No such notice had been filed by him on record. He denied that 'bayana' was never forfeited or that he had undertaken to pay double the amount of 'bayana' to the plaintiff as he needed the property for his personal use or that no such notice had been filed on record for the aforesaid reason. He denied that there was no failure on part of the plaintiff or that the deal was never canceled. He had sent a notice also, conveyed through Ajay Massi also and also informed the plaintiff about forfeiture of 'Bayana' on phone. He denied that his preceding statement was false. He denied that Ajay Massi was his agent or that he had colluded with Ajay Massi to usurp the 'bayana' given by the plaintiff. He denied that the plaintiff was not trying her luck to somehow get back the money or rather she was legally entitled to recover the said money. He admitted that first 'bayana' was negotiated between the plaintiff and his brother. He denied that the first bayana was paid on 26.11.2003 or for that reason his brother had not stepped in the witness box. He had no proof to show that the plaintiff had admitted the cancellation of the deal. vol. he was informed about the same by Ajay Massi. There was no written document to show that the deal was canceled. He could not say clearly whether the notice Ex.PW1/5 was received by him. Vol. 3-4 notices sent by the plaintiff received by him.
At this stage, witness was confronted with an undated AD card sent by Sh. Arun Duggal, Advocate. He admitted that the acknowledgment AD Card Ex.DW1/P1 bears his signatures at point A. He admitted that he had no replied to the said notice. He denied that contents of WS and the affidavit filed by him are not true. He denied that plaintiff was always ready to perform her part of contract or that he CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 16 of 36 backed out from performing his part of contract. He denied that he was deposing falsely.
Thereafter, DE was closed vide order dated 29.08.2014
8. Final Arguments have been heard. Material on record has been perused. Submissions considered. The issues are now taken up for deliberation and findings:
9. Whether plaintiff is entitled for recovery of Rs. 1,54,000/- and whether plaintiff is entitled for any interest, if yes at what rate?
9.1 The onus for both these issues was placed upon the plaintiff and it would be expedient to decide both these issues together. It is noteworthy that in the present case the defendant has not denied the payment of the initial earnest money amount of Rs.25,000/- to his brother or the Rs. 75,000/- amount to him. The defence taken by the defendant is that the plaintiff could not perform her part of the contract vis-à-vis payment of balance amount and that the dates on which the said amounts were paid were very different from the dates as stated by the plaintiff. It is interesting though that no dates are provided by the defendant regarding the payment of the said amounts. The plaintiff states that the said amounts were paid on 26.11.2013 and 03.12.2003 respectively. The defendant has stated that the plaintiff has only tried to capitalize the mistake of the defendant/his brother in not writing the date on the Receipt-cum-Agreement at time of receiving Rs.25,000/- as well at the time of receiving Rs.75,000/-. He has alleged manipulation of receipts issued for acknowledgment of the aforesaid amounts. He as alleged that the defendant was not in India from 11.09.2003 to 24.11.2003. On contacting the aforesaid property dealer, the defendant and his brother were informed that the plaintiff was having difficulty in making arrangement for payment of the balance sale consideration of Rs.14 Lacs. The defendant got sent across several messages, including telephonic message, to the plaintiff to immediately make the payment of the balance consideration. The sale of the property by the CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 17 of 36 defendant to Mr. A. S. Sharma was much after the expiry of the actual stipulated period of payment. When the defendant was very much in Delhi on 26.11.2003 after having returned from abroad on 24.11.2003, there was no reason for defendant's brother to have executed the Receipt-cum-Agreement on behalf of the defendant. There was no extension of time, whether express or implied or otherwise, at the time of payment Rs.75,000/-.
9.2 It is noteworthy that law provides for the exclusion of oral by documentary evidence. Sections 91 to 100 of the Indian Evidence Act are based upon the principle that the best evidence must always be given, and the acceptance of the fact that no matter how good a person's memory may be, the best evidence of the content of a document is the document itself.
9.3 The principle does not demand the largest amount of evidence - it simply requires the best evidence and since this is documentary evidence, oral evidence is excluded. The general rule excluding oral evidence in the presence of documentary evidence is laid down in Sections 91 and 92. The general rule is subject to the 'exceptions' contained in Sections 93 to 100 which speak of how oral evidence may be used to interpret documents. In this regard it has been held in the case of Roop Kumar v. Mohan Thedani, AIR 2003 S.C 2418:
"Section 91 relates to evidence of terms of contract, grants and other disposition of properties reduced to form of document. This section merely forbids proving the contents of a writing otherwise than by writing itself; it is covered by the ordinary rule of law of evidence, applicable not merely to solemn writings of the sort named but to others known some times as the "best evidence rule". It is in reality declaring a doctrine of the substantive law, namely, in the case of a written contract, that of all proceedings and contemporaneous oral expressions of the thing are merged in the writing or displaced by it. (See Thayer's Preliminary Law on Evidence p.397 and p.398; Phipson Evidence 7th Edn. P.546; Wigmore's Evidence p.2406.) It has been best described by Wigmore stating that the rule is in no sense a rule of evidence but a rule of substantive law. It does not exclude certain data because they are for one or another reason untrustworthy or undesirable means of evidencing some fact to be proved. It does not concern a CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 18 of 36 probative mental process - the process of believing one fact on the faith of another. What the rule does is to declare that certain kinds of facts are legally ineffective in the substantive law; and this of course (like any other ruling of substantive law) results in forbidding the fact to be proved at all. But this prohibition of proving it is merely that dramatic aspect of the process of applying the rule of substantive law. When a thing is not to be proved at all the rule of prohibition does not become a rule of evidence merely because it comes into play when the counsel offers to "prove" it or "give evidence" of it; otherwise, any rule of law whatever might reduced to a rule of evidence. It would become the legitimate progeny of the law of evidence. For the purpose of specific varieties of jural effects - sale, contract etc. there are specific requirements varying according to the subject. On contrary there are also certain fundamental elements common to all and capable of being generalised. Every jural act may have the following four elements:
(a) the enaction or creation of the act.
(b) its integration or embodiment in a single memorial when desired;
(c) its solemnization or fulfillment of the prescribed forms, if any; and
(d) the interpretation or application of the act to the external objects affected by it.
The first and fourth are necessarily involved in every jural act, and second and third may or may not become practically important, but are always possible elements.
The enaction or creation of an act is concerned with the question whether any jural act of the alleged tenor has been consummated; or, if consummated, whether the circumstances attending its creation authorise its avoidance or annulment. The integration of the act consists in embodying it in a single utterance or memorial commonly, of course, a written one. This process of integration may be required by law, or it may be adopted voluntarily by the actor or actors and in the latter case, either wholly or partially. Thus, the question in its usual form is whether the particular document was intended by the parties to cover certain subjects of transaction between them and, therefore, to deprive of legal effect all other utterances.
The practical consequence of integration is that its scattered parts, in their former and incohate shape, have no longer any jural effect; they are replaced by a single embodiment of the act. In other words, when a jural act is embodied in a single memorial all other utterances of the parties on the topic are legally immaterial for the purpose of determining what are the terms of their act. This rule is based upon an assumed intention on the part of the contracting parties, evidenced by the existence of the written contract, to place themselves above the uncertainties of oral evidence and on a disinclination of the Courts to defeat this object. When persons express their agreements in writing, it is for the express purpose of getting rid of any indefiniteness and to put CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 19 of 36 their ideas in such shape that there can be no misunderstanding, which so often occurs when reliance is placed upon oral statements. Written contracts 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. (See Mc Kelvey's Evidence p.294). As observed in Greenleaf's Evidence page 563, one of the most common and important of the concrete rules presumed under the general notion that the best evidence must be produced and that one with which the phrase "best evidence" is now exclusively associated is the rule that when the contents of a writing are to be proved, the writing itself must be produced before the Court or its absence accounted for before testimony to its contents is admitted.
It is likewise a general and most inflexible rule that wherever written instruments 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) In Section 92 the legislature has prevented oral evidence being adduced for the purpose of varying the contract as between the parties to the contract; but, no such limitations are imposed under Section 91. Having regard to the jural position of Sections 91 and 92 and the deliberation omission from Section 91 of such words of limitation, it must be taken note of that even a third party if he wants to establish a particular contract between certain others, either when such contract has been reduced to in a document or where under the law such contract has to be in writing, can only prove such contract by the production of such writing. Sections 91 and 92 apply only when the document on the face of it contains or appears to contain all the terms of the contract. Section 91 is concerned solely with the mode of proof of a document which limitation improved by Section 92 relates only to the parties to the document. If after the document has been produced to prove its terms under Section 91, provisions of Section 92 come into operation for the purpose of excluding evidence of any oral agreement or statement for the purpose of contradicting, varying, adding or subtracting from its terms. Sections 91 and 92 in effect supplement each other. Section 91 would be inoperative without the aid of Section 92, and similarly Section 92 would be inoperative without the aid of Section 91. The two sections are, however, differ in some material particulars. Section 91 applies to all documents, whether they purport to dispose of CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 20 of 36 rights or not, whereas Section 92 applies to documents which can be described as dispositive. Section 91 applies to documents which are both bilateral and unilateral, unlike Section 92 the application of which is confined to only to bilateral documents. (See: Bai Hira Devi and Ors. vs. Official Assignee of Bombay AIR 1958 SC 448). Both these provisions are based on "best evidence rule". In Bacon's Maxim Regulation 23, Lord Bacon said "The law will not couple and mingle matters of speciality, which is of the higher account, with matter of averment which is of inferior account in law". It would be inconvenient that matters in writing made by advice and on consideration, and which finally import the certain truth of the agreement of parties should be controlled by averment of the parties to be proved by the uncertain testimony of slippery memory.
The grounds of exclusion of extrinsic evidence are (i) to admit inferior evidence when law requires superior would amount to nullifying the law,
(ii) when parties have deliberately put their agreement into writing, it is conclusively presumed, between themselves and their privies, that they intended the writing to form a full and final statement of their intentions, and one which should be placed beyond the reach of future controversy, bad faith and treacherous memory." The bar arises only when the document is relied upon and its terms are sought to be varied and contradicted"
9.4 Thus, the documentary evidence provided by the plaintiff is much more creditworthy than the oral evidence of the defendant. The receipt cum agreement is a proof of its own terms and no manipulation as alleged by the defendant is apparent upon the same. The defendant's oral evidence to the contrary has to be discarded in view of the law discussed above and because the defendant has not denied execution of the receipts or the signatures thereon per se. It is equally noteworthy that the defendant has neither taken any action in civil law to get these receipts declared null and void on account of manipulation nor in criminal law against the plaintiff for alleged forgery till date. Thus, there is no reason to disbelieve the dates of payment as mentioned in the receipts and relied upon by the plaintiff.
9.5 It is also glaringly apparent that neither the defendant nor his brother chose to put a date upon the receipts. If that be the level of their carelessness then the Court does not find any reason to dispute the dates put by the plaintiff on the receipt and its copy, as the law does not CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal
21 of 36 favour the bald allegations of a negligent litigant. Moreover, defendant could not produce even his own brother as a witness despite numerous opportunities to substantiate his averments regarding the date of execution of the receipts.
9.6 Interestingly, no date has even been mentioned by the defendant regarding the payment of the amounts in his entire pleadings or his evidence. The sole suggestion put to the plaintiff during cross- examination in this regard was that that amount of Rs.75000/- was given to the defendant on 25.11.2003 when he returned from his trip abroad. She categorically denied the same and voluntarily stated that she had made the payment of Rs.75000/- on 03.12.2003. Not even a suggestion has been put to the plaintiff regarding the date of the initial payment of Rs.25000/-. Hence, the averments of the plaintiff in this regard remain uncontroverted.
9.7 The submission that the defendant was out of India when the first receipt was executed and had he been there he would have executed the receipt himself and not through his brother falls flat on its face as the defendant is stated to have gone outstation from 11.09.2003 to 24.11.2003. Whereas, in his cross examination he has stated that the negotiations took place in the first week of September, 2003. The defendant having gone abroad in the second week of the month, going by the same analogy, where was the need for the defendant's brother to negotiate with the plaintiff when the defendant was here in the first week? The relevant portion of the WS states: "In and around the month of September 2003 the plaintiff through a property dealer Mr. Ajay Mansi had approached the brother of the defendant Mr. Parveen Aggarwal and showed the interest in buying the property No. B-16, Christan Colony, Patel Chest Delhi, then owned by the defendant. With the knowledge, consent and authority on from the defendant, defendant's brother Mr. Parveen Aggarwal and the husband of the plaintiff entered into negotiations and agreed to sell the said property for a sale consideration of Rs.15 lacs. It is pertinent to CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 22 of 36 mention here that the deal was negotiated by defendant's brother as the defendant was not in India from 11.09.2003 to 24.11.2003"
9.8 Thus, the contents of the WS read with the contents of the defendant's cross-examination themselves give credibility to the submission of the plaintiff that despite the defendant being here, the negotiations were conducted and the first receipt was executed by his brother.
9.9 Thus, it is hereby held that the first receipt was executed and the first payment of Rs.25,000/- was made on 26.11.2003 and the second receipt was executed and the second payment of Rs.75000/- was made on 03.12.2003.
9.10 Now, the defendant has not denied the fact that the property was sold to one Sh. A. K. Sharma on 07.01.2004. In his cross-examination he admitted that Mr. Ajay Massi who was his agent as well as property dealer had got sold the property to Sh. A. Sharma. As a matter of fact, in written arguments filed on behalf of the defendant, the date of such sale is referred to as 06.12.2003 (but there is nothing on record to prove the same). The version of the defendant, as per the suggestion given to the plaintiff, is that the payment of Rs.75000/- was made on 25.11.2003. This is in stark contrast to the submissions of the defendant that he tried to contact the plaintiff several times for balance payment, as there is merely a short gap of 11 days between 25.11.2003 and 06.12.2003. In this short span of time, as per the defendant's own albeit fictitious version, despite having received an additional amount of Rs. 75000/- from the plaintiff, the defendant was able to negotiate and execute the sale of the property in favour of another person, all this while asking the plaintiff to arrange for balance payment. This is, by any stretch of imagination highly inconceivable.
9.11 Never the less, it has already been held by this Court that the payment of Rs. 25,000/- was made on 26.11.2003. Thus, if the period of 60 days is held to have started from the said date, then the defendant CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal
23 of 36 grossly violated the terms of the receipt cum agreement by selling the property to another person before the said period of 60 days got over. (Irrespective of whether the sale was made on 07.01.004 or 06.12.2003, the same falls well within 60 days of 26.11.2003). For the same reason, it is immaterial whether the plaintiff had the capacity to pay the balance amount as she had 60 days to arrange for the same but the defendant violated the agreement by selling the property to another person well before the expiry of the said period.
9.12 In view of the violation of the agreement on part of the defendant before expiry of the stipulated period of time, the plaintiff is entitled to refund of the money paid by her under the agreement. It is not for the defendant to dictate to the plaintiff to file a suit for specific performance rather than a suit for recovery as the relief to be sought by the plaintiff is entirely her prerogative. The Court cannot stop her from recovering her money and force her to seek performance of an agreement in respect of a property that has already been sold to another person.
9.13 In view of the aforesaid, it is hereby held that the plaintiff is entitled to recovery of Rs.1,00,000/- (Rs.25,000/- + Rs.75,000/-) as principal amount.
9.14 Interest: As far as the interest is concerned, the defendant has stated in his cross-examination that he could not say clearly whether the notice Ex.PW1/5 was received by him. He stated that 3-4 notices sent by the plaintiff were received by him. Thus, he has not denied receiving the same. Rather, when he was confronted with an undated AD card sent by Sh. Arun Duggal, Advocate, he admitted that the acknowledgment AD Card Ex.DW1/P1 bears his signatures at point A. It has been held in the case of Jagdish Singh Vs. Natthu Singh: AIR 1992 SC 1604 that where a notice is sent by registered post and the same is returned with an endorsement of refusal, it will be presumed that the notice has been served. The letters and the notice in the present case CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 24 of 36 have not even been refused by the defendant. Thus, in view of the law laid down above and by virtue of Section 27 of General Clauses Act 1897, the defendant is deemed to have been served with the letters and legal notice of demand in the present case. In the said notice, the plaintiff has referred to her earlier letters which seek interest @ 36% per annum. Thus, the defendant was aware that he ran the risk of facing the plaintiff's claim for interest at the said rate but still chose not to refund the money. In the plaint, the plaintiff has scaled down her demand for interest @ 18% per annum. The earliest communication sent by the plaintiff claiming interest is Ex. PW-1/3 and the same is dated 04.04.2004 sent on 05.04.2004.
9.15 Section 34 (1) of the Code of Civil Procedure (CPC) provides that:
Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent, per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit:
Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
9.16 Section 3(1) of The Interest Act, 1978 provides that:
In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of' any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say, -
(a) If the proceedings relate to a debt payable by virtue of written instrument at a certain time, then, from the date when the debt is payable CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 25 of 36 to the date of institution of the proceedings;
(b) If the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings:
Provided that where the amount of the debt or damages has bean repaid before the institution of the proceedings interest shall not be allowed under this section for the period after such repayment. 9.17 For the purpose of this Act, as per Section 2 (c) "Debt" means liability for an ascertained sum of money and includes a debt payable in kind, but does not include a judgment debt.
9.18 As per Section 2(b) "Current rate of interest" means the highest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained by charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949 (10 of 1949).
9.19 In the present case, though the liability of the defendant arises out of the receipt-cum-agreement, it cannot be strictly stated that the said amount is 'payable by virtue of written instrument' for the purpose of Section 3(1)(a) of the Interest Act. Moreover, the terms thereof do not provide for a date on which the money is payable/ refundable in case of violation of agreement. Hence, the present case would fall u/s 3(1)(b) of the Interest Act. Therefore, the interest would be payable from date mentioned in this regard and referred to in the notice/ intimation which was sent to the defendant claiming interest for the first time, i.e. the letter sent on 05.04.2004. In the said letter it is stated that interest for a period of five months will be claimed i.e. w.e.f. december, 2003. As far as the rate of interest is concerned, in the interests of justice and in view of the provisions of the interest Act as well as taking into account the hardship faced by the plaintiff, this Court is of the opinion that interest @ 10% per annum w.e.f. December, 2003 till the date of filing of suit and @ 6% per CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 26 of 36 annum from the date of filing of the suit till the date of disposal as well as future interest @ 6% per annum till the date of realization would be appropriate to the facts of the case.
9.20 Hence, this Court holds that the plaintiff shall be entitled to recover from the defendant, interest on the principal amount of Rs. 1,00,000/-, @ 10% per annum w.e.f. December, 2003 till the date of filing of suit and @ 6% per annum from the date of filing of the suit till the date of disposal as well as future interest @ 6% per annum till the date of realization.
9.21 These issues are accordingly decided in favour of the plaintiff and against the defendant.
10. Whether amount of Rs. 1 lac given towards earnest money was forfeited in terms of the agreement?
10.1 This issue does not require detailed deliberation in view of the findings given on the previous two issues. The onus to prove the same was upon the defendant. Despite, heavily relying upon the averment that he sent numerous messages to the plaintiff through property dealer Ajay Massi for performance of her part of the contract, the defendant failed to produce the said property dealer as a witness despite numerous opportunities. There is nothing on record to show that the defendant made any effort to contact the plaintiff seeking performance of her part of the contract except for bald submissions. Moreover, in Nand Kishore Arora And Anr. vs Adarsh Kumar Jain, 65 (1997) DLT 212 it was held that:
"(6) While in a suit for specific performance, it is essential to make an averment that the plaintiff was and has always been ready and willing to perform part of the contract in terms of Section 16(c) it does not appear to be so essential for seeking just recovery of earnest money that the plaint is bound to be rejected under Order 7 Rule 11, Civil Procedure Code for Section 16(c) does not refer to simple suits for refund of earnest money while Section 22 refers to a composite suit for specific performance of the contract, as well as for reliefs of possession and partition, and in the alternative relief of refund of earnest money where relief of specific performance has been refused."
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Thus, in a suit for simple recovery of earnest money such as the present case, it is not essential for the plaintiff to even aver that she was willing to perform her part of the contract. In any case, this Court has already held that the receipt-cum-agreement was executed on 26.11.2003 and in violation thereof, the property was sold by the defendant to another person on 07.01.2004 much before the expiry of 60 days within which balance payment had to be made. Hence, the defendant could not have forfeited the amount of Rs.1,00,000/- in terms of the receipt-
cum-agreement after himself violating the terms of this very agreement for no fault on part of the plaintiff.
10.2 The issue is accordingly decided in favour of the plaintiff and against the defendant.
11. Whether suit is barred by limitation?
11.1 This issue is being taken up last as it was essential to first give a finding regarding the date of execution of the receipt-cum-agreement and the date of violation thereof. Both these dates stand decided in the foregoing paragraphs. The onus to prove that the suit is barred by limitation was upon the defendant. However, there is nothing in the WS except for a mere allegation that the suit is time barred. Never the less, in the interests of justice, this Court proceeds to deliberate upon the issue on merits.
11.2 The suit has been filed on 02.12.2006. The provisions as per the Limitation Act, 1963, which may be relevant to determine the applicable limitation period in the present case are reproduced below for the sake of convenience:
Schedule Period of Limitations
Division I Suits
PART II - Suits relating to Contracts
SL.NO. DESCRIPTION OF PERIOD OF TIME FROM
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SUIT LIMITATION WHICH PEROID
BEGINS TO RUN
22. For money Three years When the demand
deposited under an is made.
agreement that it
shall be payable on
demanded,
including money of a
customer in the
hands of his banker
so payable.
47. For money paid Three years The date of
(akin to upon on existing failure.
Art. 97 consideration which
of the afterwards fails.
old
Act)
PART X - Suits for which there is no prescribed period
113. Any suit for which Three years When the right to (akin to no period of sue accrues.
Art. limitation is 120 of provided elsewhere the old in this Schedule. Act)
11.3 If the amount in question is considered as money deposited under agreement payable on demand then the suit could have been filed within three years of when the demand was made (as per Art. 22). In this regard, it has been held in the case of Harikumar Radhakisan And Ors. vs Uderam Ramkuwar And Ors., AIR 1970 Bom 262 that:
"15. For the aforesaid reasons, therefore, the period of limitation would start under Article 22 of the Indian Limitation Act when the demand is made. The demand made by the plaintiff in one suit is on 24-7-1952 and in the other on 8-10-1952. The period fa of three years. Therefore, the suits in both these matters are not tenable. The notice given afterwards by the plaintiff in the year 1957 will not be of any use to him. In this view of the matter, therefore, the suits in each of the appeals are CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 29 of 36 barred by limitation."
As per record, the demand was first made on 05.04.2004 and the suit was filed within three years thereof and thus, within time.
11.4 It is noteworthy, however, that the Courts in India have made considerable deliberations as far as recovery of earnest money is concerned. It has been held in Ram Lal Puri vs Gokalnagar Sugar Mills Co. Ltd. on 13 December, 1966, Supreme Court of India, AIR 1967 Delhi 91 that:
"Payment of earnest money, as the expression itself shows, is intended to serve as a proof of bona fides of the vendee so that if the transaction falls through by reason of the fault or failure of the vendee, this amount is liable to forfeiture. On the other hand, in case the transaction goes forward, the earnest money becomes a part of the purchase price. Distinction between earnest money and money paid in advance as part of the purchase price is thus both real and well-recognised. The amount of Rs.20,000/- paid in this case could, therefore, not be considered to be paid as a part of the purchase price under the contract which characteristic it could assume only when the transaction to sell went forward to the stage of completion."
"(6) In view of the foregoing discussion, I am inclined, as at present advised, to think that the vendee's claim in respect of the earnest money is not in terms covered either by Article 97 or by any other specific Article of the Indian Limitation Act. It is, therefore, governed by the residuary Article 120 and applying this Article, the claim would concededly be well within time. I may point out that the view taken by the learned Single Judge that the liability created under Section 63 of the Contract Act being initially a common law liability, its incorporation in the statute is immaterial, has not, speaking with all respect, appealed to us and indeed Shri Hardy has also frankly expressed his inability to support this view.
Quite a good portion of our Contract Act has its roots in the common law of England but that can scarcely be a cogent ground for holding that a liability created under the Contract Act would for that reason not be a statutory liability, though on the view we have taken of the character of earnest money in the present case, this aspect loses much of its importance.
(7) Coming now to the remaining sum of Rs.30,000/- paid as additional advance, it appears to us that on the evidence on the record, this amount was intended by the vendee to be paid towards the purchase price. It is undoubtedly true that under the contract to sell the balance money was to be paid at the time of registration of the sale- deed, but the correspondence between the parties which led to the CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 30 of 36 payment of Rs.30,000 clearly suggests that this payment was more appropriately made on the then existing consideration of the transfer of the property and not merely by way of earnest as is suggested on behalf of the vendee. Claims for this account has accordingly to be considered on a different footing from that of earnest money, as indeed this amount has no other characteristic than of payment towards the purchase price. This amount would thus be governed by the three-year period of limitation as prescribed by Article 97."
11.5 In view of the aforesaid authority, it would seem from the facts of the present case that the initial amount of Rs.25000/- was paid towards earnest money and the amount of Rs.75000/- was paid towards balance sale consideration. However, it is not so because in the present case, both the parties intended to treat the entire amount of Rs. 1,00,000/- as earnest money. This is very much apparent from the fact that the receipt-cum-agreement provides for forfeiture of only the earnest money. Had the parties not intended to treat the entire amount as earnest money, the defendant could not have forfeited the amount of Rs. 75,000/- in the first place even on the basis of his very own submissions. Hence, as the defendant sought to forfeit the entire amount and the plaintiff also treated the entire amount as earnest money, this Court finds that the said entire amount of Rs. 1,00,000/- was paid in the present case towards earnest money. Thus, the recovery for earnest money would be governed by Art. 113 of the new Limitation Act as it is pertinent to mention here that Article 120 of the old Act is akin to Article 113 of the new Act. In this regard, it has been held Shah Construction Co. Ltd. vs Municipal Corporation Of Delhi, AIR 1985 Delhi 358 that:
"(20) At this stage, reference may also be made to article 113 of the Limitation Act, 1963 which is a residuary article in its application to suits. This article is the same as article 120 of the old Limitation Act with a difference that under article 113, the period of limitation is 3 years while under article 120 it was 6 years. The. time from which the period begins to run is 'when the right to sue, accrues'. There is no difference in the words 'when the right to sue accrues' as given in article 113 and 'when the right to apply accrues' as given in article 137 of the Limitation Act, 1963. Article 120 of the old Limitation Act has been the subject-matter of decisions both by the Privy Council and the Supreme Court. The words 'when the right to sue accrues' have been construed to mean when the cause of action arises.
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(21) In Mt. Bala v. Mt. Koklan , Sir Binod Mitter, speaking for the Board with Deference to article 120 of the old Limitation Act, stated as under : "THERE can be no 'right to sue' until there is an accrual of the right asserted in the suit and its infringement or at least clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted."
IN Gobinda Narayan v. Sham Lal , it was held that the expression "right to sue" in article 120 means the right to bring the particular suit with reference to which the plea of limitation is raised and that the starting point for limitation is when the rights are invaded. (22) In Rukhmabai v. Laxminarayan the Supreme Court summed up the legal position as under : "THE legal position may be briefly stated thus : The right to sue under Art. 120 of the Limitation Act accrues when the defendant has clearly and unequivocally threatened to infringe the right asserted by the plaintiff in the suit. Every threat by a party to such a right however ineffective and innocuous it may be, cannot be considered to be a clear and unequivocal threat so as to compel him to file a suit. Whether a particular threat gives rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardizes the said right." (23) In Gannon Bunkerley & Co. v Union of India a contract was executed on 26th November, 1948 for construction of certain works at Sindri Fertilizer Factory to be completed by 26th February, 1950. The appellant company made certain demands by letter dated 20-9-1950 which were, however, rejected by the Additional Chief Engineer by his letter dated 13th September, 1950. [There appears to be a mistake in the dates, which is also there in the official report . In any case, the date of rejection could not be earlier than 13th September, 1950]. In September 1954. certain disputes were referred to arbitration under the contract. The company, however, instituted a suit against the Union of India on 9th August, 1956 for enhanced rate in respect of work not covered by the contract but which though carried out under the instructions of the Engineer-in-Charge did not arise out of the contract. It was not disputed that the claim in the suit was not covered under the arbitration clause and could not be the subject- matter of the reference. It was contended on behalf of the Union of India that the suit was barred by limitation under clauses 56 and 115 of the First Schedule to the Limitation Act. 1908. The Supreme Court held that the suit was covered under Article 120 and the period of limitation was 6 years. It was then contended that even if the claim fell within the terms of Article 120, it was barred, for the appellant company had in the suit made a claim for the work done more than 6 years before the institution of the suit and the period of limitation commenced to run from the date on CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 32 of 36 which the defendant (Union of India) obtained the benefit of the work done by the appellant company. The Supreme Court negatived the contention and observed as under : - "BUT under Art. 120 of the Limitation Act the period of six years for suits for which no period of limitation is provided elsewhere in the Schedule commences to run when the right to sue accrues. In our judgment, there is no right to sue until there is an accrual of the right asserted in the suit, and its infringement, or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted ..............." Thus, to the Supreme Court, the cause of action arose when the rejection was communicated to the party, and on this date the right to sue accrued.
(24) The touchstone is as to when the cause of action accrues because it is only then that there would be a right to apply. To constitute a cause of action first is the coming into existence of a right, and secondly, its infringement or threat to be infringed. Cause of action in substance denotes and determines the starting point of limitation. It is a settled proposition that the question as to when right to sue accrues depends largely upon the facts and circumstances of each particular case. The Division Bench in Vijay Construction Co. (supra) cannot be said to lay down the rule of law that in a case of contract cause of action would necessarily arise on the date of the rescission of the contract. That was so in the particular facts of that case, and, as has been noticed above, it was asserted in the application itself that the cause of action arose on the date of rescission of the contract. The nature of dispute or difference will have to be seen in each case and with reference to that it will have to be examined as to when the cause of action arose. A claim is not necessarily a difference between the parties unless that claim is disputed. Cause of action would, therefore, arise when the claim of one party, when it arises, is denied or there is a threat to deny. Only in that event, it becomes a dispute and cause of action arises from that date."
11.6 Thus, the limitation period would start running in the present case when the right to sue accrues or when the cause of action has arisen. In Somabhai Kanjibhai Patel vs Abbasbhai Jafarbhai Daginawala, (1993) 2 GLR 1337 it was held that:
"10. The learned trial Judge has not specifically referred to any Article of 4he Act for denying to the plaintiff his remedy of recovery of the Earnest Money as hit by the Law of Limitation. There appears to be no specific Article in the Act prescribing the period of limitation for recovery of the Earnest Money paid for the performance of the contract and it is not performed. The relief of the recovery of the Earnest Money can certainly not be part of Article 54 of the Act. It is restricted to the relief of CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 33 of 36 specific performance only. Article 47 of the Act will not be applicable for the reason that it applies to a suit for money paid for an existing consideration which afterwards fails. In the present case, the consideration cannot be said to have failed afterwards. Since there appears no specific Article in the Act for governing a suit for recovery of the Earnest Money, the residuary Article being Article 113 thereof will have to be resorted to for the purpose.
11. I am supported in this view of mine by the Division Bench ruling of the Delhi High Court in the case of Ram Lai Puri v. Gokalnagar Sugar Mills Co. Ltd. reported in AIR 1967 Delhi 91. In that case also, the contract was for sale of one building in Lahore. The contract could not be performed on account of partition of the country some time in 1947. The Court was approached inter alia for the relief of refund of the Earnest Money. In that context, it has been held by the Delhi High Court that Article 120 of the old Limitation Act, 1908, being a residuary Article, was applicable in such a case. It cannot be gainsaid that Article 120 of the old Act has been inserted as Article 113 in the new Limitation Act of 1963. The starting point of limitation thereunder would be when the right to sue accrued. The right to sue for recovery of the Earnest Money would accrue when performance of the contract was refused by the other side. As aforesaid, performance was refused when registration of sale of plot No. 12 by the deceased took place on 26th July, 1972."
11.7 In view of the legal propositions laid down above, it can be safely concluded that in the present case the cause of action arose and the right to sue accrued when the right of the plaintiff was violated when the contract was refused to be performed by the defendant and for this purpose, the sale of the property to another person on 07.01.2004 amounted to infringement of the plaintiff's right under the receipt-cum-agreement and refusal for performance of the said agreement. Hence, the limitation period started running from 07.01.2004 and the suit had to be filed within 3 years thereafter. The same was filed on 02.12.2006 that is within 3 years from the date when the cause of action had arisen. Thus, the suit of the plaintiff is not barred by limitation and is within time.
11.8 Moreover, it has been held in the case of Kailash Nath And Associates vs Delhi Development Authority And ... on 10 September, 2007, by the Delhi High Court that:
"74. It is pertinent to note that the extension of time as requested by the plaintiff was granted by the defendant no. 1 till 28-10-1982 vide its letter CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal 34 of 36 dated 11.08-1982. (Ex.P-8) Subsequent to that, a further extension of time was asked for by the plaintiff. Accordingly, defendant no. 1 vide its resolution no. 121 dated 14.05.1984 (Ex.DW2/P-4) resolved to decide each case (including plaintiff's case) on the basis of such recommendations. However, defendant no. 1 failed to take any decision in terms of resolution no. 121 dated 14.05.1984 qua the plot of the plaintiff in spite of the Page 2562 repeated letters sent to defendant no. 1 dated 9-12-1985 (Ex.P-11) , 20-10-1986 (Ex.P-12), 10-12-1986(Ex.P-13), 10-02- 1987(Ex.P-14), 11-04-1987(Ex.P-16), 10-08-1987(Ex.P-17), and 10-10-1987(Ex.P-18) calling upon defendant no. 1 to give an offer of deposit of balance 25% of the premium so as to bring the total payment equivalent to 50% of the total premium and to release the possession of the plot to the plaintiff for construction purposes as per the said resolution. In response to the same, defendant no. 1 vide its letter dated 01-12-1987 asked for the plaintiff's consent for making payment of the balance amount of the bid. But later vide its letter dated 06- 10-1993 (Ex.P-26) informed the plaintiff that the bid/allotment of the said plot in question had been cancelled and the earnest money amounting to Rs. 78 lakhs deposited by the plaintiff at the time of auction had been forfeited.
75. In the light of the aforesaid, I am of the view that all this while the plaintiff was made to believe that its case was under consideration and that a final decision in relation to its case was yet to be taken. It is only through the letter dated 06-10-1993 that the said bid/allotment of the plaintiff was ultimately cancelled following which the plaintiff filed the present suit on 17- 02-1994. Thus the present suit filed by the plaintiff is within the period of limitation as prescribed by the statute and hence is not barred by time."
11.9 It has also been held in Sh. Virender Kumar Jain vs M/S. Alumate (India) Pvt. Ltd. on 2 March, 2012 decided by Delhi High Court that:
"5. In my opinion, the suit of the appellant/plaintiff cannot be said to be barred by limitation inasmuch as the averments in the plaint show that the loan was given without fixing any date of repayment. Once that is so, the loan would be a loan which would be repayable on demand. The demand in this case is alleged to have been made upon the respondent/defendant for the first time by the notice dated 14.12.2001. The period of limitation therefore will be three years from 14.12.2001, and therefore the suit which was filed on 8.2.2002 would be within limitation. Suit for recovery of loan without a fixed period or a date of repayment is a suit governed by Article 113 of the Limitation Act, 1963 as per which the suit has to be filed within three years of arising of the cause of action. The cause of action in this case will arise on sending of the legal notice dated 14.12.2001. I therefore hold that the suit was not barred by limitation."
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11.10 In the present case, the plaintiff has categorically stated that she came to know about sale of the property bearing No. B/16, Christian Colony, Delhi on 06.07.2006 when she went to Christian Colony and she never went to Christian Colony from 2003 till 05.07.2006. There is nothing on record to show that she knew about the sale earlier. Hence, as per Kailash Nath (supra) the limitation period could be said to have started running when she came to know about the sale i.e. on 05.07.2006. Alternatively, if the principle of Virender Kumar Jain (supra) was to be applied then the limitation period would start running from the date of demand i.e. 05.04.2004.
11.11 Hence, considering all possible alternatives, there is no way that the suit of the plaintiff can be held to be barred by limitation by any stretch of imagination.
11.12 Accordingly, the issue is decided against the defendant and in favour of the plaintiff.
12. Relief:
12.1 In view of the law, facts and circumstances mentioned above, the suit of the plaintiff is decreed for the principal amount of Rs.
1,00,000- alongwith interest on the said principal amount, @ 10% per annum w.e.f. December, 2003 till the date of filing of suit and @ 6% per annum from the date of filing of the suit till the date of disposal as well as future interest @ 6% per annum till the date of realization.
12.2 Decree sheet be prepared accordingly.
12.3 The costs of the suit are also awarded to the plaintiff.
13. Original documents, if any, be returned to the parties after filing certified copies thereof and against acknowledgment of receipt as per rules.
14. File be consigned to the Record Room after due compliance.
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Announced in the open Court
On this 07th day of July, 2015
(SUMEDH KUMAR SETHI)
ACJ/CCJ/ARC(W)/07.07.2015
CS NO.1416/2007 Kulwant Kaur vs Rajesh Aggarwal