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1996 DIGILAW 236 (DEL)

N. K. HATIA v. R. K. SOOD

1996-03-01

S.K.MAHAJAN

body1996
S. K. MAHAJAN ( 1 ) THIS order will dispose of the application of the plaintiff for the grant of an injunction for restraining the defendant from parting with possession or alienating any right or title of the terrace of the ground floor and first and second floor rights of the premises A/35, Panchsheel Enclave, New Delhi to a third party. ( 2 ) THE facts, in short, are that the plaintiff on March 17, 1992. paid a sum of Rs. 1 lakh to the defendant, who was the owner of the property being No A/35. Panchsheel Enclave, New Delhi, as part consideration of a collaboration agreement, under which the plaintiff had agreed to construct a new building on the first and second floor of the property with servant quarter on the terrace of the second floor. Under the arrangement agreed between the parties, the plaintiff was to pay to the defendant a total sum of Rs. 5,10,000. 00 and the defendant was to hand over the vacant possession of the terrace to the plaintiff and the plaintiff was to construct the first floor and the second floor. The defendant was to get complete first floor along with two servant quarter and 2/3 shares on the terrace of the second floor roof along with 2/3 undivided share in the land underneath and the builder was to get complete second floor along with 1/3 share of second floor roof for construction of the servant quarter. Clause 3 of this receipt/arrangement reads as under : - "that the builder shall pay a further sum of Rs. 4,10,000. 00 (Rs four Lakh ten thousand only ) at the time of handing over complete vacant possession of the terrace of the ground floor and execute a proper Agreement of Collaboration incorporating all terms and conditions as agreed upon and a further sum of Rs. 1,00,000. 00 (Rs. ONE LAKH Only) shall be paid at the time of execution of the General Power of attorney and will in favour of the collaborator as their nominee. " ( 3 ) A few days after the execution of this receipt, the defendant on 28th March, 1992 wrote a letter to the plaintiff informing him that it had come to her know ledge that the plaintiff was intending to undertake illegal construction on the second floor for which she did not like to be a party. " ( 3 ) A few days after the execution of this receipt, the defendant on 28th March, 1992 wrote a letter to the plaintiff informing him that it had come to her know ledge that the plaintiff was intending to undertake illegal construction on the second floor for which she did not like to be a party. She, therefore, requested the plaintiff to give an undertaking in writing that no illegal construction would be undertaken by him in her house. When no reply was received, another letter was written on April 24, 1992 to the same effect. The plaintiff sent a reply dated May 21. 1992 requesting the defendant to hand over vacant possession of the terrace to him so as to enable him to start construction as per building bye-laws. On receiving no undertaking from the plaintiff, the defendant terminated the arrangement by letter dated June 10, 1992 which resulted in the filing of the present suit by the plaintiff. ( 4 ) THE defendant in the written statement has taken the stand that after discussions between the parties on March 17, 1992. the terms of collaboration agreement were agreed between the parties and the plaintiff offered a sum of Rs. 1. 00 lakh as part consideration. In terms of the understanding which had been arrived at between the parties, a collaboration agreement was to be drawn up incorporating all the terms and conditions, including those which had been agreed upon at that time between the parties. According to the defendant, on this understanding, a cyclostyled form of receipt, which plaintiff had with him. was signed by the defendant in token other having received of a sum of Rs. 1. 00 lakh and the collaboration agreement containing the terms and conditions could be drawn up later. ( 5 ) IT is the case of the defendant that in the collaboration agreement it was agreed to be written that the plaintiff would undertake construction only after getting approval of the building plans and strictly in accordance therewith, and the defendant would give her consent to the construction only after getting the consent from the Delhi Development Authority, as required by clause 4 of the perpetual lease deed. It is also the case of the defendant that the parties had also agreed to have their disputes settled by arbitration which was also to form part of the collaboration agreement. It is also the case of the defendant that the parties had also agreed to have their disputes settled by arbitration which was also to form part of the collaboration agreement. It is, therefore, contended that as collaboration agreement had not been entered into, there is no agreement which can be specifically performed by the defendant and the receipt dated March 17,1992 is wholly uncertain and vague. ( 6 ) AS has been noticed above, in terms of the clause 3 of the receipt/arrangement which was signed by the defendant on March 17,1992, the parties had agreed to execute a proper agreement of collaboration incorporating all the terms and conditions as had been agreed between the parties. Admittedly, this agreement has not been entered into and signed by the parties. In the absence of this agreement which was agreed to be entered into by the parties, can it be said that the receipt dated March 17, 1992 is the agreement of collaboration and requires to be specifically performed? This is the question which has been urged by the parties before me. While the case of the plaintiff is that receipt is itself a complete agreement, the contention of the defendant is that unless a further agreement in terms of clause 3 of the receipt was executed, parties were not ad idem about the terms and conditions on which the parties were to collaborate for purposes of construction of a building and, as such, there is no question of specific performance of the receipt dated March 17, 1992. ( 7 ) IT is not disputed that in case the receipt dated March 17, 1992 is not a complete agreement and the parties were to enter into a further agreement of collaboration, the plaintiff maynot be entitled to the specific performance of the said receipt as it will not amount to a concluded contract between the parties. By letters dated March 28, 1992 and April 24, 1992, the defendant had written to the plaintiff that before any action is taken on the basis of the receipt/agreement dated March 17,1992, the plaintiff should give an undertaking by means of an affidavit that he would undertake construction only as per the sanctioned plans and would not deviate from the plans any time. No such affidavit or undertaking was given by the plaintiff. No such affidavit or undertaking was given by the plaintiff. It is an admitted position that construction cannot legally commence unless plans of the property have been duly approved by the competent authority and it is only after approval of the plans that the party can start construction without deviating therefrom unless so permitted by rules and bye-laws in that regard. In terms of clause 4 of the lease deed, permission is also required from the Delhi Development Authority before any construction is commenced. These and some other terms, according to the defendant, were required to be incorporated in the subsequent agreement which was agreed to be entered into by the parties. ( 8 ) MR. AGGARWAL, appearing on behalf of the plaintiff, places reliance upon a judgment of the Privy Council reported as Harichand Mancharam Vs. Govind Luxman Gokhale 1923 ILR 47 Bombay 335 in support of his contention that on a true construction of the receipt dated 17th March, 1992, a binding contract had come into existence between the parties. In the Privy Council judgment, it was held that the "documents may upon their true construction, constitute a binding contract for the sale and purchase of immovable property, enforceable by specific performance, although they stipulate for a contract to be prepared by a Vakil, and that stipulation, together with others, is described in the documents as a condition". The case of the defendant in that case was that the agreement which had been entered into between the parties was not a concluded contract inasmuch as one of the conditions of the agreement was that the papers shall be made through a Vakil within two days and at that time the vendor was to take from the vendee by way of earnest money a sum of Rs. 10,000. 00 The exact condition of the agreement was in the following terms. 10,000. 00 The exact condition of the agreement was in the following terms. "the bargain paper in respect of the said immovable property shall be made through a vakil within two days from this day and at the time of making the bargain paper I am to take from you by way of earnest money in respect thereof Rupees ten thousand that is you are to pay the same to me and as regards Rupees two lacs and five thousand being the balance you are to pay the same to me at the time of the execution of the sale deed by me and by way of earnest thereof I am to take from you that is to say you are to pay to me Rupees ten thousand at the time of the (execution of the) bargain paper and the balance of Rupees two lacs five thousand is to be paid to me by you at the time when the deed of sale is executed by me. " ( 9 ) IT was on these facts, while interpreting this agreement, that the Privy Council held that the documents clearly show that the parties had come to a definite and complete agreement on the subject of the sale. They embodied in the documents, that were exchanged, the principal terms of the bargain on which they were in absolute agreement, and regarding which they did not contemplate any variation or change. The reservation in respect of a formal document to be prepared by a Vakil only means that it should be put into proper shape and in legal phraseology, with any subsidiary terms that the Vakil might consider necessary for insertion in a formal document. ( 10 ) IN my opinion, this judgment will not be applicable to the facts of the present case as in clause 3 of the receipt dated March 17, 1992 what has been mentioned is that "the parties will execute a proper agreement of collaboration incorporating all terms and conditions as agreed upon and a further sum of Rs. 1. 00 lakh shall be paid at the time of execution of general power of attorney and Will in favour of the collaborator as their nominee". This clause clearly mentions that the terms and conditions which had been agreed upon were still to be incorporated in the proper agreement. 1. 00 lakh shall be paid at the time of execution of general power of attorney and Will in favour of the collaborator as their nominee". This clause clearly mentions that the terms and conditions which had been agreed upon were still to be incorporated in the proper agreement. What was the exact nature of construction to be raised on the 1st and 2nd floor has not been mentioned in the receipt. Parties were yet to decide as to how many rooms were to be constructed and what would have been the size of these rooms. Plans of the proposed construction had not yet been prepared what to speak of their approval by the municipal authorities. The condition about construction of a building strictly in accordance with the plans to be approved by the Municipal authorities is also a relevant condition which was required to be incorporated in the agreement, as also the condition that the plaintiff will not deviate from the sanctioned plans at the time of construction of the property. In case this second agreement which was to be entered into in terms of clause 3 of the receipt dated March 17, 1992 had not been entered into, prima facie, I feel receipt dated March 17, 1992, was only an intention of the parties to enter into a collaboration agreement for construction of a building on the first floor and second floor of the property and the broad terms and conditions were yet to be incorporated into a formal agreement. ( 11 ) IN my opinion, prima facie, no concluded contract had come into existence by signing the receipt dated March 17, 1992. To have a concluded contract, the parties were still required to execute a formal document incorporating the details of the terms and condition to which the parties had agreed. It is not a simple sale of property where a receipt would be said to be a complete agreement. In a collaboration agreement, many more things than the mere passing of the consideration are involved and it is in that context, and rightly so, that the defendant had been insisting upon the plaintiff to give an undertaking not to construct the first floor and the second floor without getting the plans sanctioned and not to deviate from the sanctioned plans. ( 12 ) AS. ( 12 ) AS. l am prima facie of the opinion that the receipt dated 17th March, 1992 was not a concluded contract between the parties, the plaintiff is not entitled to any injunction restraining the defendant from dealing with her property in any manner she likes. The application is, accordingly, dismissed with no order as to costs and interim order passed on May 28, 1993 is vacated. It is however, made clear that any action of the defendant dealing with the terrace of the ground floor and the first and second floor of the property will be subject to final decision in this suit. ( 13 ) ANY observation made in this order shall not affect the merits of the case.