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2009 DIGILAW 158 (DEL)

RAJEEV MEHRA v. SUDHIR KUMAR SACHDEV

2009-02-06

RAJIV SAHAI ENDLAW

body2009
RAJIV SAHAI ENDLAW, J. 1. The plaintiff seeks decree for specific performance of an agreement of sale of immovable property under Order 12 Rule 6 CPC. The application has been filed after the framing of issues. .2. The plaintiff instituted the suit on 19th January, 2004 on the averments that the defendant had vide agreement to sell dated 15th February, 2001 agreed to sell the full terrace rights above the second floor of the building situated on plot of land admeasuring 725 square yards and bearing No. 33, NH-IV, Lajpat Nagar, New Delhi 110 024 for a total sale consideration of Rs 40 lacs out of which the plaintiff had paid Rs 15 lacs at the time of agreement to sell on 15th February, 2001 and remaining sale consideration was payable at the time of execution of the sale deed after conversion of lease hold rights in the land underneath into freehold. The plaintiff claimed that on 15th February, 2001 the defendant in part performance of the agreement to sell had handed over the vacant, physical possession of the said open terrace to the plaintiff and which fact was also mentioned in the agreement to sell. Besides the agreement to sell, a receipt and an affidavit, also stated to have been executed by the defendant on 15th February, 2001, have also been filed. The agreement to sell provided that the defendant, after obtaining of the requisite permissions, will inform the plaintiff within a period of 12 months by registered AD letter and also send photocopies of the said permissions and the defendant will take the balance sale consideration from the plaintiff at the time of registration of the sale deed within 60 days of the receipt of the said registered AD letter. The plaint further avers that on the request of the defendant the plaintiff gave a further sum of Rs 8 lacs to the defendant on 10th April, 2001 for which also a receipt was issued; it is averred that the defendant had represented that the said amount was required by him for getting the leasehold rights in the land converted into freehold. As per the plaint, the defendant failed to perform his part of the agreement and to get the requisite permissions for execution of the sale deed; that on 15th February, 2002 the defendant had issued a letter to the plaintiff unequivocally acknowledging that he had not been able to complete the formalities for registration of the sale deed. The plaintiff claims that on 1st March, 2003 he noticed from outside that he may have been dispossessed from the terrace aforesaid and on attempts was not allowed by the defendant to go up to the terrace. The said instances are averred to have been repeated on 8th March, 2003. Para 11 of the plaint is important and is reproduced hereinbelow: That on 16.03.2003 the plaintiff along with his father and Shri Gurinder Singh met the defendant at his office there at about 11.30 a.m. and requested him to return the Rs.23,00,000/- (Rupees Twenty Three Lakhs Only) received by the defendant from the plaintiff along with interest in case the defendant does not wish to execute the sale deed in terms of the agreement to sell dated 15.02.2001. The defendant got flared up and asked his goons to physically throw out the plaintiff, his father and Shri Gurinder Singh ... 3. The plaintiff claims to have lodged a complaint with the police on 17th March, 2003 and upon the failure of the police to take action, approached the Metropolitan Magistrate and as per whose directions FIR was registered against the defendant on 16th April, 2003. The plaintiff thus claimed the relief of specific performance by directing the defendant to obtain various permissions and clearances and for permanent injunction restraining the defendant from dealing with the terrace aforesaid and a money decree for damages of Rs 3 lacs with interest at 26% per annum from 6th December, 2003 till the date of realization as well as pendente lite damages of Rs 30,000/- per month. The plaintiff also claims an alternative relief of recovery of Rs 23 lacs alongwith interest at 26% per annum and the money decree for an amount of Rs 40 lacs towards damages with interest at 26% per annum. .4. The defendant filed a written statement. The defendant did not deny the agreement to sell or the receipt or the affidavit all dated 15th February, 2001 stated to have been executed by him. .4. The defendant filed a written statement. The defendant did not deny the agreement to sell or the receipt or the affidavit all dated 15th February, 2001 stated to have been executed by him. The defendant also admitted receipt of further payment of Rs 8 lacs and execution of receipt therefor. The defendant, however, contested the relief of specific performance averring that though it was so mentioned in the agreement but the possession of the terrace was not delivered to the plaintiff and was to be delivered on the execution of the sale deed only; that the defendant made repeated reminders to the plaintiff for balance payment so as to hand over the possession of the terrace to the plaintiff but the plaintiff was delaying the matter; that the defendant had applied for conversion of leasehold rights into freehold which was still pending as the LandDO had raised a demand of Rs 18 lacs; however, the plaintiff came to the office of the defendant in December, 2001 alongwith Mr Gurinder Singh and told the defendant that he was no longer interested in the said deed and asked for refund of the money; that the defendant agreed to the cancellation of the agreement to sell and to refund the sum of Rs 23 lacs received under the agreement to sell from the plaintiff; that in the month of January, 2002 the defendant paid a sum of Rs 15 lacs in different phases to the plaintiff but the plaintiff did not issue any receipt on the ground that he will issue full and final receipt after entire refund; that the plaintiff insisted upon security for the balance of Rs 8 lacs and for which purpose the defendant issued three cheques and promissory notes to the plaintiff wherein the name of the payee was left blank; that the plaintiff had however filled up the name of his father on the cheques and the promissory notes and the father of the plaintiff had instituted the suit under Order 37 CPC and complaint under Section 138 of the Negotiable Instrument Act against the defendant. The defendant further pleaded that subsequently since the plaintiff had meted threats to the defendant, the defendant had also lodged complaints against the plaintiff. The defendant thus contested that, the plaintiff having himself cancelled the agreement to sell, was not entitled to specific performance thereof. 5. The defendant further pleaded that subsequently since the plaintiff had meted threats to the defendant, the defendant had also lodged complaints against the plaintiff. The defendant thus contested that, the plaintiff having himself cancelled the agreement to sell, was not entitled to specific performance thereof. 5. By filing of the replication by the plaintiff and the documents since placed on record, the following facts emerging from the written statement and stated in tabular form hereinbelow are not disputed. S.No. Date Particulars 1. 18.02.2002 The father of the plaintiff is stated to have advanced loan in cash to the defendant on these dates of a total sum of Rs 8 lacs and which the defendant had agreed to repay with interest at 3% p.m. 2. 18.03.2002 3. 25.03.2002 4. 16.03.2003 The defendant is stated to have issued post dated cheques of these dates for refund of the loan aforesaid of 8 lacs advanced by the father of the plaintiff to the defendant. 5. 15.03.2003 6. 17.03.2003 7. 27.03.2003 A notice of dishonoure of cheque is stated to have been issued by the father of the plaintiff to the defendant. 8. 17.09.2003 The defendant was summoned in a complaint of offence under Section 138 of the Negotiable Instruments Act filed by the father of the plaintiff. 9. 21.01.2004 A summary suit is instituted by the father of the plaintiff for recovery of Rs 8 lacs with interest against the defendant. 10. 03.02.2004 This suit for specific performance is listed for the first time. 11. 21.02.2004 The defendant applies for leave to defend the summary suit filed by the father of the plaintiff. 12. 13.07.2004 The summary suit filed by the father of the plaintiff is decreed against the defendant. The appeal against the same was informed to be pending at the time of hearing arguments. The aforesaid dates may be contrasted with the dates in the present suit. S.No. Dates Particulars 1. 15.02.2001 Agreement to sell with payment of Rs 15 lacs out of 40 lacs 2. 10.04.2001 Further payment of 8 lacs by the plaintiff to the defendant. 3. 15.02.2002 Letter of the defendant to the plaintiff. 4. 01.03.2003 The plaintiff for the first time notices that he may have been dispossessed from the terrace. 5. 08.03.2003 The plaintiff was not allowed by the defendant to go up to the terrace. 6. 10.04.2001 Further payment of 8 lacs by the plaintiff to the defendant. 3. 15.02.2002 Letter of the defendant to the plaintiff. 4. 01.03.2003 The plaintiff for the first time notices that he may have been dispossessed from the terrace. 5. 08.03.2003 The plaintiff was not allowed by the defendant to go up to the terrace. 6. 16.03.2003 The plaintiff in the plaint itself says that he asked the defendant for refund of advance sale consideration paid. 7. 17.03.2003 Complaint by the plaintiff to the police. 8. 16.04.2003 FIR against the defendant at the instance of the plaintiff. 6. At this stage the letter dated 15th February, 2002 of the defendant to the plaintiff may be noticed. The same is as under: To, Date-15-2-2002 Mr Rajeev Mehra C-144, Defence Colony New Delhi 110024 Sir, Reg: Agreement to sell dated 15-2-2001 pertaining to sale of Full Terrace rights of the second floor of property No.33, NH-IV, Lajpat Nagar New Delhi to you. I have to inform you that inspite of my best efforts I have not been able to complete the formalities that I was to complete under the said agreement within 12 months from 15-2-2001 for registration of the sale deed of the said terrace in your favour. I request you to please extend the time for registration of the aforesaid sale deed by another four months i.e., upto 15.6.2002. I will complete the said formalities within this period and inform you by registered A.D. letter soon. Sincerely yours (Sudhir Kumar Sahdev) 7. The defendant, during admission/denial, admitted the signatures but denied the contents of the said document. However, in the written statement vis-a-vis the said document the defendant in para 8 of the reply on merits stated as under: 8. The contents of para under reply are misconceived, wrong, vexatious, incorrect and hence denied. The letter dated 15.2.2002 is a matter of record. However, the same on the contrary only reiterates the contents of the defendants that the registration of the sale deed was not possible in the given time period due to the complexities of formalities of having the lease hold rights in the property converted into the freehold. .8. On 4th October, 2005 as many as 17 issues were struck in the suit and evidence ordered to be recorded. .8. On 4th October, 2005 as many as 17 issues were struck in the suit and evidence ordered to be recorded. The defendant thereafter in or about March, 2006 moved IA.No.3411/2006 for amendment of the written statement to take a plea that the suit property was constructed in the year 1971 and has become weak; that the pillars and beams of the existing construction could take the load of three storey only and any further construction on the terrace without demolition of the entire building would be dangerous and may collapse if the load increases; that even if the plaintiff is found entitled to the relief of specific performance, the agreement is incapable of being performed for the said purpose. The defendant has averred that he could not take the aforesaid plea earlier in spite of due diligence. Pleadings in the said application were ordered to be completed and accordingly the trial was held up. After the said application had been pending for over two years, in or about April, 2008 this application under consideration under Order 12 Rule 6 CPC was filed. 9. The counsel for the plaintiff relying upon Shri Satya Bhushan Kaura v Smt Vijaya Myne as well as a host of other judgments has argued that the defence of the defendant of the cancellation of the agreement to sell by the plaintiff and of refund of Rs 15 lacs out of advance sale consideration of Rs 23 lacs is a moonshine and vexatious in view of the letter dated 15th February, 2002 (supra) which has been admitted by the defendant. It is argued that the said letter is after the date of the alleged cancellation and the content of the said letter totally falsify the defence set up in the written statement as an afterthought. It is stated that the defence of the defendant to the relief of specific performance cannot stand in view of the aforesaid letter. During the course of hearing, it also transpired that the judgment of the single Judge of this court in Shri Satya Bhushan Kaura (supra) was upheld by the Division Bench and the judgment of the Division Bench is reported as Vijaya Myne v Satya Bhushan Kaura 142 (2007) DLT 483(DB). It was informed by the counsel for the plaintiff that the Special Leave Petition has also been dismissed by the Apex Court. 10. It was informed by the counsel for the plaintiff that the Special Leave Petition has also been dismissed by the Apex Court. 10. In Satya Bhushan Kaura, the single judge as well as the division bench found the facts established from admissions sufficient to pass a decree. The defences in that case were that the responsibility of getting the property converted to freehold was of the purchaser plaintiff and which he had failed to do and was accordingly not ready and willing to perform his part of the agreement. The court found the agreement in writing between the parties placed obligation for freehold conversion on seller defendant and further that no such plea was taken by the defendant in the correspondence preceeding the suit and was taken for the first time in the written statement. The court also found a receipt of payment of charges for conversion. Thus the court found the defence to be an after thought, malafide and sham. The court also held that evidence contrary to written agreement could not be tendered by seller defendant and was barred by Sections 91 and 92 of the Evidence Act. It was further found from admitted documents on record that all steps for freehold conversion had been undertaken by the seller defendant and only conveyance deed was to be executed. 11. It is thus argued by the counsel for plaintiff in the present case, that on the basis of the admissions in written statement of the agreement to sell and other documents and the falsity of the defence set up in the written statement as apparent from the letter dated 15th February, 2002, the plaintiff is entitled to a decree for specific performance forthwith. 12. I am not inclined to allow a decree for specific performance on admissions in the present case. The reasons therefor are crystallized hereinbelow. .13. Under Section 20 of the Specific Relief Act the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so. Of course, the discretion is to be exercised not arbitrarily but .in accordance with the sound and reasonable principles, including those laid down in Section 20 itself. 14. In my view, in the present case, the discretion to grant specific performance in favour of the plaintiff cannot be exercised at this stage and requires recording of evidence. Of course, the discretion is to be exercised not arbitrarily but .in accordance with the sound and reasonable principles, including those laid down in Section 20 itself. 14. In my view, in the present case, the discretion to grant specific performance in favour of the plaintiff cannot be exercised at this stage and requires recording of evidence. 15. The plaintiff has, in the plaint itself in para 11, stated that on 16th March, 2003 i.e. after the letter dated 15th February, 2002 (Supra) he informed the defendant that in case the defendant does not wish to execute the sale deed in terms of the agreement to sell, the defendant should return the sum of Rs 23 lacs. Of course, according to the plaintiff, the defendant did not agree to such refund. The defence of the defendant also is that the agreement to sell was mutually cancelled, though according to defendant, in December, 2001 and further pleads that he also refunded Rs.15 lacs out of advance sale consideration of Rs.23 lacs received by him, in different phases thereafter. 16. However, the fact remains that the plaintiff as on 16th March, 2003 was willing to let go of the agreement to sell. Under Section 16(c) of the Specific Relief Act specific performance of contract cannot be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him. Similarly, under Section 16(b) a person who willfully acts at variance with or in subversion of the relation intended to be established by the contract is also not entitled to the relief of specific performance. The Division Bench of this court in Gopal Devi v Kanta Bhatia (AIR 1994 Delhi 349) referring to (1) Adeshir M. Mama v. Flora Sassoon (AIR 1928 PC 208); (2) Sundarramayyar V K. Jagdeeshan and Anr ( AIR 1965 Mad 85 ) and (3) Ayissabi v Gopala Konar ( AIR 1989 KER 134 ) held that where plaintiff had prior to institution of suit for specific performance issued notice claiming double the amount of earnest money, the plaintiff is not entitled to the relief of specific performance. The plaintiff having himself averred demanding refund of advance sale consideration paid to, from the defendant, whether would be entitled to the relief of specific performance or not is a question to be determined after the plaintiff has been cross examined by the defendant. .17. Neither counsel had, during the hearing, invited the attention of this court to the IA.No.3411/2006 of the defendant for amendment of the written statement which had been pending for two years prior to the filing of the application under Order 12 Rule 6 CPC. The said application was found while perusing the file after reserving the orders on this application. Though the application for amendment ought to have been dealt with prior to the application under Order 12 Rule 6 CPC but the judgment having been reserved, and this court for other reasons also being of the opinion that the plaintiff is not entitled to relief under Order 12 Rule 6, it is not deemed appropriate to defer the orders on the application under Order 12 Rule 6 CPC. The defendant by way of the said amendment if allowed intends to take a plea which would also have a bearing on the exercise of discretion in the grant of the relief of specific performance. In this regard it may be noticed that the property subject matter of agreement to sell in the present case is a terrace above the second floor. From the record, it also transpires that the basement in .the said property has been acquired by Mr Gurinder Singh, brother of the wife of the plaintiff, who is running the business in the name of Planet Pool therein. It further transpires that in the remaining property guest house in the name of Kumar Holiday Inn is being run. The agreement between the parties in this regard also makes an interesting reading. Though it is for a terrace above the second floor but the same does not contain any provision with respect to the construction thereon as would normally have been found in an agreement to sell of terrace rights. In fact, there is no provision at all in the agreement that the plaintiff would be entitled to raise construction or to what extent. In fact, there is no provision at all in the agreement that the plaintiff would be entitled to raise construction or to what extent. In clause (1) thereof it is generally mentioned that the defendant had agreed to sell the terrace of the second floor with common rights, passages and facilities but there is no detailed working of use of the second floor or regarding construction etc. I find all this strange and in my view again all these matters can be tested only in evidence and for which issues have already been framed. Further if the defendant is allowed the amendment and if the defendant succeeds in proving that the construction is not possible above the second floor owing to the weak structure, and which he did not foresee, the same would definitely involve hardship on the defendant within the meaning of Section 20(2) (b) of the Specific Relief Act. .18. Yet another reason, to my mind, for declining the discretionary relief of decree on admission in favour of the plaintiff is the factum of the plaintiff in its plaint having not made a clean breast of affairs. The dates set out hereinabove would show that at about the same time as the institution of the suit and or just prior thereto, much was happening relating to the transaction alleged between the father of the plaintiff and the defendant. The plaintiff though disclosing the FIR in the plaint made no mention whatsoever of the said transaction. Undoubtedly, the defendant till then had had no opportunity to plead his case vis--vis the said transaction; but still, in my view it was incumbent upon the plaintiff to inform this court of the transaction of the defendant with his father. The dates of the two transactions i.e. one of agreement to sell and other of loan if juxtaposed, at least without evidence show certain overlapping. To my mind, it requires evidence to find out as to why the defendant in February/March, 2002 would take the loan in cash from the father of the plaintiff at a high rate of interest of 3% per annum when the defendant by that time already had an agreement to sell with the plaintiff and whereunder monies were due from the plaintiff to the defendant. According to the plaintiff while on the one hand his father had lent Rs 8 lacs to the defendant in February/March, 2002 and for which post dated cheques were obtained and which were dishonoured on or about 16th March, 2003 and on the same date i.e. 16th March, 2003 the plaintiff also claims to have asked for refund. Though undoubtedly the letter dated 15th February, 2002 is not in sync with the defence set up but the other facts which have emerged are such which favour exercise of discretion in not granting a decree for specific performance on admissions. The father of the plaintiff in the suit filed for recovery of Rs 8 lacs filed by him has averred that he granted loan to the defendant of Rs 8 lacs owing to the defendant being a friend of his son. However, no such averment is made in the plaint in the present suit or in the criminal complaint or in the FIR. I find the coincidence of the two amounts being Rs 8 lacs to be such which can be explained only by way of examination and cross examination and not otherwise. Similarly, in the plaint in the summary suit filed by the father of the plaintiff there is no reference whatsoever to the sale transaction subject matter of the present suit. .The relationship between the two transactions can be explored only in evidence and not at this stage. 19. The Division Bench, in Satya Bhushan Kaura in para 12 of the judgment though laying down the purpose of Order 12 Rule 6 and that admissions can be constructive and can be inferred from vague and evasive denial in written statement has nevertheless held that admissions have to be unequivocal, unqualified, unambiguous. It was further held that inconsistent pleas and contrary stand have to be ignored. The division bench also went into the question of specific performance being discretionary but held the pleas raised by defendant seller in that regard to be outside the ambit of Section 20 of Specific Relief Act. 20. However, in the present case, the defence taken of subsequent agreement of parties to cancel the earlier agreement to sell is not contrary to the agreement to sell and leading evidence with respect to such subsequent agreement is not barred under Section 91 and 92 of Evidence Act, as in Satya Bhushan Kaura. 20. However, in the present case, the defence taken of subsequent agreement of parties to cancel the earlier agreement to sell is not contrary to the agreement to sell and leading evidence with respect to such subsequent agreement is not barred under Section 91 and 92 of Evidence Act, as in Satya Bhushan Kaura. Of course the defendant though at the stage of admission/denial admitting only signatures and denying contents of letter dated 15th February, 2002 has not in the written statement pleaded any explanation with respect thereto. However, the same is but a letter and not an agreement to which Sections 91 and 92 of Evidence Act would apply. In the light of loan transaction aforesaid, and even otherwise an opportunity ought to be given to defendant to lead evidence and the defence of defendant of cancellation of agreement to sell cannot be ignored for the purposes of Order 12 Rule 6, specially since plaintiff also in plaint admits having approached the defendant for cancellation and refund. Further the agreement in Satya Bhushan Kaura was for the entire property. Here it is only with respect to terrace above second floor. The considerations of enforceability and hardship are thus entirely different. For all these reasons, this case does not fall into the unambiguous category. 21. Section 16 (C) Specific Relief Act requires not only averment but even proof of readiness and willingness of plaintiff in a suit for specific performance. When such readiness and willingness is controverted in the pleadings, in my view there can be no proof of the same without opportunity of cross examination. 22. Another Division Bench of this court in Charanjit Singh v Kehar Singh 2006 V Apex Decisions Delhi 667 and in Raj Kumar Chawla v M/s Lucas Indian Service 2006 VI Apex Decisions Del. When such readiness and willingness is controverted in the pleadings, in my view there can be no proof of the same without opportunity of cross examination. 22. Another Division Bench of this court in Charanjit Singh v Kehar Singh 2006 V Apex Decisions Delhi 667 and in Raj Kumar Chawla v M/s Lucas Indian Service 2006 VI Apex Decisions Del. 166 held that admission in Section 70 of the Evidence Act relates only to admission of a party in the course of trial of suit and not the attestation of a document by the party executing it; the essential feature of admission that it must not be something which was not intended and was not the intention of the party and prerequisite of admission is that it should be intended to be read and construed as admission; there must be a claim laid down in the plaint which is admitted for the ground stated therein and not simply an admission of cause of action. Reliance was also placed on Chanchal v Jalaludin AIR 1971 SC 1081 drawing a fine distinction between unambiguous and specific admission on which decree under Order 12 Rule 6 can be passed and vague averments of facts which if proved could even tantamount to admission decree under Order 12 Rule 6 should normally be declined in latter category. 23. Yet another Division Bench of this court in Puran Chand Packaging Industrial Pvt Ltd v Smt Sona Devi 154 (2008) DLT 111 seems to suggest that the court at the stage of acting under Order 12 Rule 6 of the CPC cannot decide the respective contentions of the parties. In that case the Single Judge had passed a decree for ejectment of a tenant whose tenancy has been terminated, notwithstanding the plea of the defendant of the notice of determination of tenancy having been waived by acceptance of rent. Even though the Division Bench noticed the judgment of another Division Bench of this court to the effect that acceptance of rent does not amount to waiver of notice, it still reversed the decree of the Single Judge holding that such a plea can be decided only after the parties are given time to adduced evidence. 24. In the light of aforesaid legal position it is apposite to refer to Bharat Petroleum Corpn. 24. In the light of aforesaid legal position it is apposite to refer to Bharat Petroleum Corpn. v N.R. Vairmani AIR 2004 SC 779 laying down that courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation. Lord Denning was quoted therein to the effect, a single significant detail may alter the entire aspect and one should avoid the temptation to decide cases by matching the colour of one case against colour of another. 25. Thus the temptation of plaintiff to have his case decreed without trial on the basis of judgment in Staya Bhushan Kaura is not enough for me, in the light of different significant details in this case, noted hereinabove. 26. `Under Order 12 Rule 6 CPC it is the discretion of the court even where admissions of facts have been made whether to decree the suit or not. The court even in the face of admission is empowered to make such order as may be deemed fit. In the present case, even if there are to be any admissions, I deem it fit not to grant the relief of specific performance on admissions but to put the same to trial on the issues already framed. 27. The application of the plaintiff is dismissed, however with no order as to costs.