A. K. SIKRI, J. ( 1 ) THE plaintiff has filed the instant suit for specific performance in respect of the apartment bearing No. 27 2, Gulmohar Enclave, New Delhi. It is an apartment on the ground floor of the suit property. The suit is filed against the two defendants who are husband and wife and are stated to be the joint owners of the said apartment. The husband of the plaintiff is residing along with the plaintiff in the said property since 1st September, 2002. The husband of the plaintiff is an employee of GE Capital and the premises in question were let out to his employer for his occupation. It is alleged that in the middle of the year 2004, the defendants began to express a desire to sell the suit property and told the plaintiff that they were looking for a suitable buyer. As the plaintiff was also desirous for purchasing a residential property, she offered to buy this apartment at the current prevailing market price. After negotiations, the plaintiff ultimately agreed to purchase the suit property at Rs. 50 lacs. The plaintiff paid an advance of Rs. 1 lac which was deposited into the joint account of the defendants. It is also alleged by the plaintiff that in furtherance of this agreement, the plaintiff was put in possession of the premises in question. The plaintiff also applied for a housing loan to ICICI Bank which was duly sanctioned vide letter dated 30th July, 2004 As she was already in possession of the property and the prospective buyer thereof, she invested significant amount to improve and develop the said apartment. However, in spite of the plaintiff s contacting the defendants time and again and expressing her readiness and willingness to complete the transaction, the defendants dilly- dallied the matter. The plaintiff has narrated the circumstances on the basis of which she claims that the intentions of the defendants became dishonest. Therefore, the plaintiff sent a legal notice dated 19th April, 2005 which was duly delivered to the defendants. However, the defendants instead of complying with the demand in the said notice, sent a reply dated 27th April, 2005, dispatched on 12th May, 2005 through their counsel Mr. Himanshu Bajaj taking unjust and frivolous stand which has no basis in law and, therefore, present suit is filed for specific performance.
However, the defendants instead of complying with the demand in the said notice, sent a reply dated 27th April, 2005, dispatched on 12th May, 2005 through their counsel Mr. Himanshu Bajaj taking unjust and frivolous stand which has no basis in law and, therefore, present suit is filed for specific performance. ( 2 ) THE defendants have filed separate written statements contesting the suit to which the plaintiff has filed replications. However, at this stage, present application is filed by the defendant No. 2 under Order VII Rule 11 (a) read with Section 151 of the Code of Civil Procedure (CPC) for rejection of the plaint on the ground that it does not disclose any cause of action. Various pleas are taken in support of this ground. ( 3 ) MR. D. R. Bhatia and Mr. K. C. Bajaj, counsel appearing for the defendants state that even if the alleged Agreement to Sell is taken at its face value, it is not binding and has no legal validity in the eyes of law in view of the following:-" (i) As per the plaintiff s own admission the properties in question namely, Apartment No. 272, Gulmohar Enclave, New Delhi-49 in respect of which, purported Agreement entered into is the joint property of defendant no. 1 and 2. However, the Agreement is signed by defendant no. 1 alone for himself and it nowhere states that this Agreement is on behalf of defendant no. 2 also. It is further submitted that there is nothing on record to suggest that defendant no. 2 has consented for such an agreement with the aforesaid plaintiff. (ii) The agreement is not on any stamp paper, although stamp paper of a denomination of Rs. 50/- is required, therefore, it is not a valid document in the eyes of law. (iii) There is no averment in the plaint that the plaintiff was ready and willing to perform her part of contract. It is pointed out that as per purported agreement, the sale consideration fixed was Rs. 50 lakhs and as against this, the plaintiff had given the defendant no. 1 a sum of Rs. 1 lakh only. Thus, under this agreement balance consideration of Rs. 49 lakhs was to be given by the plaintiff to defendants.
It is pointed out that as per purported agreement, the sale consideration fixed was Rs. 50 lakhs and as against this, the plaintiff had given the defendant no. 1 a sum of Rs. 1 lakh only. Thus, under this agreement balance consideration of Rs. 49 lakhs was to be given by the plaintiff to defendants. However, it is not stated in the plaint that the plaintiff was having sufficient funds to discharge her obligation and there is also no averment to the effect that she was willing to perform her part in the contract. It is also pointed out that before filing this suit notice dated 19. 04. 2005 was sent by the plaintiff to the defendants and no such averment was made even in that notice. (iv) It is also contended that no requisite funds were available with the plaintiff to discharge her obligation. It is revealed from the documents filed by the plaintiff that she had applied for loan of Rs. 45 lakhs with a bank. However that loan was not sanctioned, it would be clear from e-mail dated 12. 05. 2005 sent by the bank to the husband of the plaintiff which reads as under:- with reference to your loan sanctioned by us for Rs. 45 lacs, we would like to inform you that agreement to sell on a stamp paper of Rs. 50/- would be required to be executed by you and the seller. This is necessary to get legal opinion done from our empanelled lawyer, without which we would not be able to disburse the loan. the submission of counsel is that not only this letter would show that there was no proper agreement as agreement was required to be executed on a stamp paper of Rs. 50/-, it would further show that even the bank had expressed its inability to disburse loan and, therefore, for want of loan, the plaintiff was not having any funds to enable her to pay balance consideration. (v) Arising out of this, another submission which is made is that the plaintiff has made false statement in the legal notice dated 19th April, 2005 wherein in para 2 thereof, it is alleged that after the purported agreement to sell, plaintiff had obtained loan from the bank.
(v) Arising out of this, another submission which is made is that the plaintiff has made false statement in the legal notice dated 19th April, 2005 wherein in para 2 thereof, it is alleged that after the purported agreement to sell, plaintiff had obtained loan from the bank. (vi) It is also contended that the plaintiff is a government servant, but no permission was sought by the plaintiff to enter into such a transaction which is required under the Conduct rules. " ( 4 ) LEARNED counsel relied upon the judgment of the Supreme Court in the case of Ganesh Shet vs Dr. C. S. G. K. Setty and ors. reported as AIR 1998 sc 2216 and of this court in the case of Prakash Chander vs Dev Dutt Malik reported as 27 (1985) DLT 23, in support of his plea and also referred to provision of Section 12 of the Specific Relief Act. ( 5 ) IN the case of Ganesh Shet (supra), property in respect of which agreement to sell was owned jointly by three brothers. However, one brother had entered into the agreement and the purchaser had himself stated that the said brother had stated that he had yet to consult his brothers about the sale consideration. On this basis and also after examining the contents of several letters exchanged between the parties, the court opined that the sale consideration was not finalized and, therefore, no concluded contract was arrived at between the parties and decree for specific performance could not be passed. In Prakash Chander (supra), this court held that a decree for specific performance could not be passed in the said case where clause 6 of the perpetual lease in favour of the defendant prohibited the defendant to transfer the plot of land in favour of a person who is not a member of the co-operative society. Learned counsel also relied upon another judgment of this court in the case of m/s Aggarwal Hotels (P) Ltd. Vs. M/s Focus Properties (P) Ltd. reported as 63 (1996) DLT 52. That was a case where receipt was executed by the defendant/owner of the property as per which the price of Rs. 34 lacs was fixed for transfer of shares of defendant No. 1 company along with its assets. The question was as to whether it amounted to agreement to sell.
That was a case where receipt was executed by the defendant/owner of the property as per which the price of Rs. 34 lacs was fixed for transfer of shares of defendant No. 1 company along with its assets. The question was as to whether it amounted to agreement to sell. The court held that the receipt does not disclose that Mr. S. P. Aggarwal, who was stated to have negotiated on behalf of the plaintiff/purchaser was authorised on behalf of the said company. The court came to the prima facie conclusion that the receipt dated 17th June, 1995 could not be said to be an agreement to sell the shares of the defendant No. 1 company to the plaintiff company. The relevant observations are contained in paras 5 to 7 and read as under:"the four ingredients necessary to make an agreement to sell are (i) particulars of consideration; (ii) certainty as to party i. e. the vendor and the vendee; (iii) certainty as to the property to be sold; and (iv) certainty as to other terms relating to probable cost of conveyance to be borne by the parties, time, etc. If the ingredients are lacking in the agreement, the obligations contemplated would not arise in this background that the receipt dated June 17, 1995 has to be examined. A perusal of the receipt which is said to be an agreement to sell, shows that neither the total sale consideration for which the shares of the defendant company were allegedly agreed to be sold to the plaintiff is mentioned nor it is mentioned the said receipt as to who will be the person in whose favour the said shares to be sold. Even the time during which the agreement was to be finalized has not been mentioned. The receipt/agreement is wholly uncertain, vague and indefinite as it appears that the parties were still negotiating to arive at the agreed terms as conditions for sale of shares by defendants to Mr. S. P. Aggarwal. Prima facie, I am , therefore, of the opinion that there was neither certainty as to the parties to the agreement nor about he total sale consideration which was to be paid for transfer of shares nor even the time during which the entire transaction was to be finalised.
S. P. Aggarwal. Prima facie, I am , therefore, of the opinion that there was neither certainty as to the parties to the agreement nor about he total sale consideration which was to be paid for transfer of shares nor even the time during which the entire transaction was to be finalised. Moreover, in the case of a company incorporated under the Companies Act, it is not the company which is sold but these are the shares of the company which are transferred by a shareholder in favour of another. Even assuming this agreement to be an agreement to sell, this has been signed only by defendant No. 2 not by defendant No. 3. Defendant No. 3 cannot be held to be bound by the agreement alleged to have been entered into by defendant No. 2. Defendant Nos 2 and 3 holds equal number of shares in the company and by stretch defendant No. 3 can be directed to transfer her share in favour of the plaintiff. The amount has been received as per the receipt from one Mr. S. P. Aggarwal whereas the suit has been filed by Aggarwal Hotels Private Limited. The receipt does not disclose that mr. S. P. Aggarwal was entering into the transaction for and on behalf of the plaintiff company. I am, therefore, prima facie, of the opinion that the receipt dated June 17, 1995 cannot be said to be an agreement to sell the shares of defendant No. 1 company to the plaintiff company. " ( 6 ) LEARNED counsel for the plaintiff, on the other hand, submitted that the application was totally misconceived and frivolous. No doubt the agreement was signed by the defendant No. 1 but he had the consent of the defendant No. 2 also which the plaintiff would prove through evidence. He further submitted that deposit of Rs. 1 lac in the joint account would signify the assent of the defendant No. 2 to the proposed transaction. In so far as submission that agreement to sell on stamp paper is concerned, it was submitted that the suit cannot be dismissed on this ground as, at the most, the agreement could be compounded and penalty levied. He further submitted that in para 11 of the plaint, it was categorically stated that the plaintiff was still ready and willing to complete the transaction of purchase.
He further submitted that in para 11 of the plaint, it was categorically stated that the plaintiff was still ready and willing to complete the transaction of purchase. With regard to loan, it was his submission that no false averment was made as email dated 12th May, 2005 sent by the bank itself would show that the loan was sanctioned but the bank was not prepared to disburse the loan in the absence of a formal agreement to sell on a stamp paper of Rs. 50/ -. Therefore, the loan had been sanctioned. In so far as permission from the Government to purchase the property is concerned, it was submitted that that was a matter between the plaintiff and the government and the transaction between the parties could not be avoided on this ground. The plaintiff could obtain such a permission in due course. In any case even if there was a violation of conduct rules, the consequence would be that the Government could take action against the plaintiff but that would not render the agreement between the parties illegal. ( 7 ) IT may be mentioned at the outset that I am dealing with an application under Order VII Rule 11 CPC and, therefore, it is the scope and contours of this provision which are to be kept in mind. At this stage, in order to see whether the plaint is founded on any cause of action, the averments made in the plaint alone are to be seen. ( 8 ) I find that specific averment is made in para 11 of the plaint to the effect that the plaintiff is ready and willing to perform her part of the contract and, therefore, this ground is not substantiated by the defendants. In so far as submission of the defendants that the false averment regarding sanction of loan is made, the defendants may not be right in this submission as well. Email dated 12th May, 2005 of the bank would clearly show that the bank has sanctioned the loan. This would clearly imply that the plaintiff had approached the bank for purpose of obtaining loan so that the plaintiff could pay the defendants balance consideration. However, before money could be disbursed, the bank wanted agreement to be written on a stamp paper of Rs. 50/- each. This may have bearing of other kind, as would be seen later.
This would clearly imply that the plaintiff had approached the bank for purpose of obtaining loan so that the plaintiff could pay the defendants balance consideration. However, before money could be disbursed, the bank wanted agreement to be written on a stamp paper of Rs. 50/- each. This may have bearing of other kind, as would be seen later. This also negates the contention of the defendants that the plaintiff has made false statement in the legal notice dated 19th April, 2005 wherein it is alleged that the plaintiff had obtained loan from the bank. ( 9 ) HOWEVER, the fundamental issue is as to whether the purported agreement is valid and binding on the applicant/defendant no. 2. Indubitably, the suit property is in joint name of the defendants 1 and 2. The agreement to sell, which is on a blank paper, is as under:"i, J. S. Grover S/o G. S. Grover, resident of M-12 (First Floor) Kailash Colony, new Delhi-48, have agreed in principle and in terms to sell my house (for a consideration of Rs. 50 lacs) which is a freehold joint property in my name and in my wife s name Smt Veena Grover, known as house bearing No. 272, Gulmohar enclave, New Delhi 110049. In this transaction I acknowledge the receipt of Rs. 1 lac as advance money by cheque number 044386 dt 18. 07. 2004 issued from ICICI Bank Vasant Vihar New Delhi and agree to furnish all the further relevant document such as Agreement to sale, Sale Deed, Will, Possession Certificate, NOCs, etc. for the purpose of transferring the above said property in the name of Ritu Saxena at present residing at 272, Gulmohar Enclave, New Delhi 110049 and a permanent resident of b-377, Indira Nagar, Lucknow, U. P. " ( 10 ) IT is clear from the reading of the aforesaid agreement that as per the agreement, only the defendant No. 1 agreed `in principle and in terms to sell the suit property. It is specifically mentioned in the said agreement that the property is in his name as well as in the name of his wife (defendant No. 2 ). However, the agreement does not stipulate that he is signing this agreement on his behalf as well as on behalf of his wife.
It is specifically mentioned in the said agreement that the property is in his name as well as in the name of his wife (defendant No. 2 ). However, the agreement does not stipulate that he is signing this agreement on his behalf as well as on behalf of his wife. It also does not show that he has any authority in his favour given by his wife to sell the suit property in favour of the plaintiff. Likewise, the amount of Rs. 1 lac as advance is taken by the defendant No. 1 alone and he has acknowledged the receipt thereof. The receipt is also executed by the defendant no. 1 in his name and in his individual capacity. Cheque was also given in his name and not in the joint name. It is a different matter since there is a joint account of defendants, this cheque was deposited in the said account. Mere deposit of this cheque may not alter the position. ( 11 ) IN this background, execution of a document on proper stamp paper become relevant. The plaintiff had applied for loan with the bank and vide request letter dated 30th July, 2004 the said loan was approved in principal. However, the ICICI Home Finance Co. Ltd. , to whom the plaintiff had applied for loan, categorically stated in the said letter itself that `we would able to disbursed the loan only we have received all income documents and property docs, as discussed with you . The bank, thereafter, expressed its inability to disburse the loan as it wanted agreement on a proper stamp paper. Obviously, the bank refused to act upon the agreement to sell dated 18th July, 2004. Formal agreement to sell was required and such an agreement was to be not only executed on proper stamp paper but additional requirement was to have this agreement signed by both the co-owners, namely, the defendants 1 and 2. In the absence of other co-owner party to this agreement, this agreement cannot be treated as valid as the defendant no. 1, in law, would have no authority to sell the suit property alone. ( 12 ) THEREFORE, there is no concluded contract in so far as the defendant No. 2 is concerned and the purported agreement to sell dated 18th July, 2004 cannot be enforced against the defendant no. 2.
1, in law, would have no authority to sell the suit property alone. ( 12 ) THEREFORE, there is no concluded contract in so far as the defendant No. 2 is concerned and the purported agreement to sell dated 18th July, 2004 cannot be enforced against the defendant no. 2. The judgments relied upon by the defendants counsel which are discussed above would have direct bearing on this issue. ( 13 ) LEARNED counsel for the plaintiff, however, argued that the defendant no. 2 had also given her assent to the said agreement and it would be a matter of evidence to show. Therefore, the plaintiff cannot be non-suited at this stage. The question that, however, arises is as to whether the plaintiff can be permitted to lead evidence to show that the defendant no. 2 had given her consent for this agreement. ( 14 ) AS pointed out above, agreement to sell nowhere states that the defendant No. 1 has signed this agreement on his behalf and on behalf of his wife. It also does not stipulate that the defendant No. 2 has given her consent. ( 15 ) THE defendant No. 2 has specifically denied having assented to this agreement. In such circumstances, the plaintiff cannot even be allowed to adduce oral evidence in support of her plea that the defendant No. 2 had allegedly consented. This would clearly be barred under Sections 91 and 92 of the Evidence Act. These provisions lay down the cardinal rule of evidence, not one of technicality, but of substance, which it is dangerous to depart from, that where written documents exist, they shall be produced as being the best evidence of their own contents. It is likewise a general and most inflexible rule, that whenever 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 instrument, or to contradict or alter them. This is a matter both of principle and policy. Of principle because such instruments are, in evidence. 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.
This is a matter both of principle and policy. Of principle because such instruments are, in evidence. 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. It is trite law that where the terms of agreement was reduced to writing, document itself, being constituted by the parties as the expositions of their intention, is the only instrument of evidence in respect of that agreement, which the law will recognize so long as it exists for the purpose of evidence. ( 16 ) NO doubt the plaintiff herein states that she will supplement and not supplant the terms of the agreement by adducing an oral evidence to the effect that the defendant No. 2 also agreed to the transaction in question. However, when there is an agreement on record reduced in writing, which nowhere stipulates that it is entered into only by the defendant No. 1, by oral evidence the plaintiff cannot prove that the defendant No. 2 also became party to such an agreement. ( 17 ) IT may be noted that in this agreement itself it was categorically mentioned that the suit property was a joint property of the defendant No. 1 and his wife (defendant No. 2 ). It is strange that inspite of this the plaintiff did not bother to find out as to whether the defendant No. 2 was also agreeing to such a deal and in case she was agreeable, the plaintiff did not bother to ensure that she also becomes party to the agreement and signs the agreement. The agreement, as noted above, does not even record that the defendant no. 1 was entering into the transaction on behalf of the defendant No. 2 as well or had the authority to enter into such an agreement on behalf of the defendant no. 2. ( 18 ) THE upshot of the aforesaid discussion would that the agreement is not valid and binding qua the defendant No. 2 who is the joint owner of the property and, therefore, there is no cause of action against the defendant no. 2. As a consequence, on the basis of such agreement to sell, the plaintiff cannot seek specific performance of property in which the defendant No. 2 is the joint owner.
2. As a consequence, on the basis of such agreement to sell, the plaintiff cannot seek specific performance of property in which the defendant No. 2 is the joint owner. The prayer made in this application is accordingly allowed and it is held that the suit is without any cause of action. The plaint is accordingly rejected. However, it would be open to the plaintiff to seek any other remedy available to her in law. No costs. .