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2017 DIGILAW 2492 (RAJ)

Luthra Export v. Vipin Luthra

2017-11-13

VIRENDRA KUMAR MATHUR

body2017
JUDGMENT Virendra Kumar Mathur, J. - This Civil First Appeal under section 96 CPC has been filed against judgment & decree dated 03.02.2017 passed by Additional District Judge No. 2, Udaipur in Civil Original Suit No. 15/2013 (82/2013) {Vipin Luthra vs. M/s. Luthra Export, Udaipur} whereby suit was decreed for specific performance and permanent injunction against appellant-defendant. 2. Briefly stated, the respondent-plaintiff filed a suit for specific performance and permanent injunction against the appellant defendant. It was averred in the plaint that a plot was allotted to defendant-appellant by RIICO (Plot No. G-1-406), ad-measuring 1000 square meters, for business. It was also stated that the plot was given by RIICO on lease for 99 years to appellant-defendant vide lease-deed dated 12.12.2006. Thereafter, construction on 2200 square feet was raised, with other amenities as mentioned in para 4 of the plaint. 3. It was further stated that the appellant-defendant proposed to sell aforesaid plot to respondent-plaintiff. The respondent agreed to defendant''s proposal and executed three agreements, dated 15.09.2011, 22.09.2011 and 30.11.2011. It was averred that vide agreement dated 15.09.2011, out of total amount of Rs. 33,00,000/-, a sum of Rs. 2.00. 000/- was paid by the plaintiff to defendant. It was also averred that vide agreement dated 22.09.2011, further amount of Rs. 4,00,000/- was paid by plaintiff to the defendant and vide agreement dated 30.11.2011, further sum of Rs. 6,00,000/- was paid by plaintiff to the defendant, out of which Rs. 1,00,000/- were in cash and Rs. 5.00. 000/- were paid through two cheques of Rs. 3 Lacs & Rs. 2 Lacs. 4. It was also stated that there was a loan on the suit premises, obtained from Bank of Baroda, which the defendant agreed to pay off from the sale proceeds. It was also stated that in the agreement dated 30.11.2011 it was mentioned that an amount of Rs. 12 Lacs has been received by appellant-defendant and remaining Rs. 21 Lacs will be paid by the plaintiff to pay off the loan. It was stated that the defendant did not do anything to transfer the loan in respondent-plaintiff''s name and therefore, respondent-plaintiff had to take loan from HDFC Bank to clear loan on suit property, however, the defendant never gave statement regarding due loan to the plaintiff. 21 Lacs will be paid by the plaintiff to pay off the loan. It was stated that the defendant did not do anything to transfer the loan in respondent-plaintiff''s name and therefore, respondent-plaintiff had to take loan from HDFC Bank to clear loan on suit property, however, the defendant never gave statement regarding due loan to the plaintiff. Thereafter, vide notice dated 23.01.2012,the defendant cancelled the agreement, therefore, it was prayed that decree for specific performance be granted in favour of the plaintiff and it was further prayed that the defendant be restrained from further alienate the suit property by creating third party rights and to maintain status of suit property. 5. The appellant-defendant filed written statement on 24.05.2013 and denied the averments made in the plaint. In the written statement, it was averred that Rs. 2 Lacs as alleged by the plaintiff were never received by the defendant vide agreement dated 15.09.2011. It was also averred that Rs. 4 Lacs as alleged by plaintiff were never received by the defendant vide agreement dated 22.09.2011 and further, it was stated that amount of rupees One Lac was never received by defendant vide agreement dated 30.11.2011. It was further stated that the contract was contingent contract and as per the agreement, the respondent-plaintiff agreed to clear the loan and to pay to the appellant-defendant due amount of loan, since the property was mortgaged with the Bank and therefore, the agreement could not have been concluded till the loan was paid off and in absence of clearing of the loan by respondent-plaintiff, the agreements were null & void. 6. On the basis of pleadings of the parties, trial court framed 5 issues. After recording evidence of the parties, the trial court decreed the suit. Being aggrieved by the judgment & decree dated 03.02.2017, the appellant-defendant has preferred this appeal on various grounds. 7. It was contended by the appellant that the trial court has failed to appreciate the documentary evidence Ex. 1 agreement dated 15.09.2011. In the aforesaid agreement, it was specifically mentioned in clause 3 that due amount of Rs. 21 Lacs, which is loan in the name of appellant, was to be paid by the respondent plaintiff to the appellant by 30.11.2011. However, the respondent plaintiff did not clear the loan amount and the same is clear from clause 3 of Ex. 2 agreement dated 22.09.2011. 21 Lacs, which is loan in the name of appellant, was to be paid by the respondent plaintiff to the appellant by 30.11.2011. However, the respondent plaintiff did not clear the loan amount and the same is clear from clause 3 of Ex. 2 agreement dated 22.09.2011. As per agreement dated 30.11.2011, it was mentioned in clause 3 thereof that the outstanding amount of Rs. 21 Lacs will be paid by the plaintiff by taking loan from another Bank, through Demand Draft/Pay Order/Cheque, directly instead of making payment to Bank of Baroda, Sukher Branch and after completing the aforesaid requirement, registry of the sale deed will be executed between the parties. 8. It was contended that, however, the trial court failed to consider this aspect of and gave wrong finding that no such date of execution was ever agreed between the parties. Furthermore, the trial court gave a finding that the appellant-defendant never mentioned in the notice about the amount, which was already accepted by the appellant and relied upon respondent-plaintiff''s averment that the respondent tried to approach the appellant regarding clearing of Bank loan. This finding of the trial court is completely perverse, as till 30.11.2011 the loan was not clear and therefore, the appellant had sent notice through his advocate and in the notice it was clearly mentioned that since conditions of the agreement were not complied with, therefore, the agreement stood null and void. 9. It was also contended that the trial court failed to consider the law regarding contingent contract as per section 32 of the Indian Contract Act. In the present case, the due loan was to be cleared and paid off by the respondent-plaintiff by 30.11.2011 and on clearing the same, the suit property was to be transferred in favour of the plaintiff but the respondent-plaintiff did not comply with the aforesaid contingency and therefore, the agreement was hit by section 37 of the Indian Contract Act and has now become null and void. This aspect of the matter was totally ignored by the learned trial court. 10. It was also contended that the trial court has given completely perverse finding regarding payment of money and it is surprising that the trial court has observed that the statement given by witnesses on behalf of respondent-plaintiff regarding partial payment were not enough but still held the exhibits produced in this context to be proved. 10. It was also contended that the trial court has given completely perverse finding regarding payment of money and it is surprising that the trial court has observed that the statement given by witnesses on behalf of respondent-plaintiff regarding partial payment were not enough but still held the exhibits produced in this context to be proved. Furthermore, the trial court also committed illegality in considering the fact the fact that there was discrepancy in the amount paid by cheque and by cash but the trial court at own whims & fancies ignored this aspect. 11. It was also contended that the trial court failed to consider that the time was essence of the contract, as in the present case, the terms of the agreement were explicit, providing that the loan was to be repaid within a particular date. Admittedly, up to the date in question, the respondent-plaintiff has not repaid the loan amount and therefore, the appellant-defendant was within his right to rescind the contract. The trial court failed to consider that once the contract was rescinded then without challenging rescinding of the contract, no decree for specific performance could have been passed. 12. On the allegations raised by the appellant, perused the pleadings and evidence placed on record. 13. So far as contentions raised in respect of issue No. 1 are concerned, perused the Agreements Ex. 1 dated 15.09.2011, Ex. 2 dated 22.09.2011 and Ex. 3 dated 30.11.2011. Upon perusal, it is found that the appellant-defendant for his business needs made a proposal for sale of the disputed plot for Rs. 33 Lacs and received cash amounts of Rs. 2 Lacs on 15.09.2011, Rs. 4 Lacs on 15.09.2011 and rupees One Lac on 30.11.2011, along with two cheques for Rs. 5 Lacs, one of Rs. 3 Lacs and one for Rs. 2 Lacs on 30.11.2011 from the respondent-plaintiff and executed receipts Ex. 4 and Ex. 5 and copies of Bank account statements of Canara Bank and Union Bank Exs.11 & 12 were also placed on record. In this way, the appellant-defendant received Rs. 12 Lacs from the respondent-plaintiff out of sale price as advance and also acknowledged receipt of this amount by Ex. 3 Agreement. 14. The appellant-defendant had obtained loan from Bank of Baroda, Sukher Branch and executed equitable mortgage on the disputed plot. In this way, the appellant-defendant received Rs. 12 Lacs from the respondent-plaintiff out of sale price as advance and also acknowledged receipt of this amount by Ex. 3 Agreement. 14. The appellant-defendant had obtained loan from Bank of Baroda, Sukher Branch and executed equitable mortgage on the disputed plot. It was agreed by aforesaid Agreements with the respondent-plaintiff that on payment of this loan, the defendant will execute sale deed of the plot in favour of the plaintiff and get the sale deed registered. However, the defendant instead of paying the loan and getting the sale deed executed, through his advocate gave a notice dated 23.01.2012, in which no reference has been made as to receipt of Rs. 12 Lacs as advance. 15. In fact, the appellant-defendant himself was not ready and willing to perform his part of the contract. The notice was replied by the plaintiff vide Ex. 7 dated 30.01.2012, for which postal receipts Exs. 8 & 9 and AD receipt Ex. 10 were placed on record. It was informed to the defendant to get the balance money of Rs. 21 Lacs and comply with the terms of the Agreement and get the sale deed registered before the Registrar. In spite of this reply of notice, the defendant did not comply with the Agreement and sale deed was not executed. It was also agreed between the parties that the defendant will get the loan transferred from Bank of Baroda, Sukher Branch, Udaipur in the name of respondent plaintiff but the defendant did not got the loan transferred as per para 2 of the Agreement dated 30.11.2011. It was also agreed between the parties that the defendant will help the plaintiff in obtaining loan and in repayment of outstanding loan, however, the defendant has shown no interest in this respect nor has he given any statement of outstanding loan from his Bank and has not performed his part of the contract. 16. The plaintiff in his cross-examination admitted that up to 30.11.2011 if defendant is paid Rs. 21 Lacs or deposits in the Bank of Baroda then the Bank would have issued NOC and thereafter the execution and registration of sale deed would have been possible. 16. The plaintiff in his cross-examination admitted that up to 30.11.2011 if defendant is paid Rs. 21 Lacs or deposits in the Bank of Baroda then the Bank would have issued NOC and thereafter the execution and registration of sale deed would have been possible. It was also admitted that it is true that between 15.09.2011 to 30.11.2011 he has not made any arrangement for payment of outstanding loan with the Bank of Baroda and between the period 22.09.2011 to 30.11.2011 no efforts were made for getting loan sanctioned from any Bank. He had knowledge of the fact that on payment of the loan amount only title would have cleared and thereafter the execution of sale deed and its registration would have been possible. It was also admitted that no notice was issued to defendant before filing of the suit. 17. It was stated by him that the Bank loan was sanctioned vide Ex. 6 dated 07.01.2012 and it is true that Ex. 6 does not contain the date 25.02.2015 nor is there any signature of Bank officer on Ex. 6. It was also admitted that from reply to the notice Ex. 7 dated 30.01.2012 till date of filing of the suit on 15.02.2013, the plaintiff has not given any proposal to the defendant that he is having sufficient money and therefore, sale deed should be executed after receiving the money nor any document has been placed on record from which it can be inferred that he has made arrangement for payment of Rs. 21 Lacs. 18. P.W.2 Smt Sushma Luthra in her cross-examination stated that she was not present on 15.09.2011. She also admitted that at the time of execution of Ex. 2 she was not present and admitted that she signed Exs. 1 & 2 at the instance of her husband. PW3 Govind Mathur has signed Ex. 3 as witness and admitted that Ex. 3 was executed before him and Vipin Luthra had given two cheques of Rs. 3 Lacs and Rs. 2 Lacs and paid rupees One Lac in cash to the defendant. In the cross-examination, he stated that the sale agreement was not executed before him and he has not read the sale agreement and is unaware as to conditions written in the agreement. He signed Ex. 3 because he is friend of Vipin. 19. 3 Lacs and Rs. 2 Lacs and paid rupees One Lac in cash to the defendant. In the cross-examination, he stated that the sale agreement was not executed before him and he has not read the sale agreement and is unaware as to conditions written in the agreement. He signed Ex. 3 because he is friend of Vipin. 19. P.W.4 Sushil Kumar Purohit also stated that he was known to plaintiff and at the instance of defendant had signed as witness on the agreement Ex.. He also stated that the plaintiff and defendant signed before him and the defendant received money as per the agreement. In his cross-examination, he stated that he has not read Ex. 1 but signed on the document at the instance of both the parties. PW5 Nakuldev Sharma in his statement admitted that the defendant received amount as mentioned in the agreement before him and thereafter he notarized the document and attested receipts Exs. 4 and 5 and also placed on record Notary Registers Exs. 13 and 14. 20. DW1 Jitendra Luthra in his statement and affidavit stated that he received loan on the plot No. G-1-406 from the Bank and the plot can not be sold unless the loan amount is repaid and also stated that amounts of Rs. 4 Lacs on 22.09.2011, Rs. 2 Lacs on 15.09.2011 and rupee One Lac on 30.11.2011 were not paid in cash by the plaintiff and without consideration, said agreements stood cancelled. He stated that neither he received cash payment as per agreements nor loan on the plot was cleared. 21. The defendant also stated that the disputed plot was under equitable mortgage with Bank of Baroda, Sukher Branch and therefore, payment of loan was essential and the plaintiff assured him that for repayment of the loan he will provide money, which he will deposit in the Bank and obtain nOc. On fulfillment of this conditions, further proceeding may be undertaken. The plaintiff neither paid cash nor balance money and therefore, the agreements had stood cancelled automatically. He also stated that statement of the plaintiff that he has received loan from HDFC Bank for Rs. 15,40,000/- and arranged Rs. 5,60,000/- from other source, is wrong. 22. On fulfillment of this conditions, further proceeding may be undertaken. The plaintiff neither paid cash nor balance money and therefore, the agreements had stood cancelled automatically. He also stated that statement of the plaintiff that he has received loan from HDFC Bank for Rs. 15,40,000/- and arranged Rs. 5,60,000/- from other source, is wrong. 22. From the evidence placed on record, it is manifestly clear that the defendant Jitendra Luthra, who was proprietor of M/s. Luthra Export Udaipur, was elder brother of the plaintiff and he admitted in his cross-examination that Ex. 1 dated 15.09.2011, Ex. 2 dated 22.09.2011 and final agreement Ex. 3 dated 30.11.2011 as also the receipts Ex. 4 & Ex. 5 bear his signatures. He admitted that he signed on these documents in court premises. Sale agreements Exhibits 1, 2 and 3 and receipts Exs.4 & 5 were attested by Notary, who appeared before court as P.W.5 and deposed in his statement about execution of the documents and signatures of defendant before him. The stamps, which were purchased for execution of these documents, were purchased by defendant Jitendra Luthra. 23. From the evidence placed on record, the plaintiff was able to prove execution of documents Exhibits 1 to 5. The defendant only denied facts but could not produce substantial evidence in rebuttal. As per section 92 of the Indian Evidence Act, no oral evidence is admissible to disprove the documentary evidence. It is important to note that in his written statement, the defendant admitted execution of agreement for consideration of Rs. 33 Lacs and in his cross-examination admitted that for typing of the agreements he had given consent to the plaintiff and signed those documents. In this way, he partly admitted the documents. So far as payment of money, no oral evidence can be admissible to disprove the documentary evidence as per provisions of section 92 of the Indian Evidence Act. 24. From perusal of all the documentary evidence placed on record, it emerges that vide Ex. 1 dated 15.09.2011 agreement executed between the parties for sale of the plot in question for Rs. 33 Lacs, out of which Rs. 2 Lacs were paid to the defendant by plaintiff, which amount was mentioned in Ex.1. In continuation of this, on 22.09.2011 Ex. 2 agreement was executed, thereby Rs. 2 Lacs paid earlier were confirmed and further Rs. 1 dated 15.09.2011 agreement executed between the parties for sale of the plot in question for Rs. 33 Lacs, out of which Rs. 2 Lacs were paid to the defendant by plaintiff, which amount was mentioned in Ex.1. In continuation of this, on 22.09.2011 Ex. 2 agreement was executed, thereby Rs. 2 Lacs paid earlier were confirmed and further Rs. 4 Lacs were paid to the defendant, for which receipt Ex. 5 was written and another receipt against payment of Rs. 2 Lacs on 15.09.2011 was written as Ex. 4 on 22.09.2011. For the balance amount of Rs. 6 Lacs to be paid to defendant on 30.11.2011 was also mentioned in this agreement. In continuation of this, the last agreement dated 30.11.2011 Ex. 3 was executed, in which the defendant admitted payments of Rs. 2 Lacs on 15.09.2011, Rs. 4 Lacs on 22.09.2011 and rupees One Lac cash on the same day as also receiving two cheques for Rs. 5 Lacs. Admission of receiving total Rs. 12 Lacs was mentioned in para 3 of agreement Ex. 3 dated 30.11.2011. The defendant has admitted receipt of Rs. 7 Lacs in cash and Rs. 5 Lacs through cheque in the Agreement dated 30.11.2011. The cheques were encashed by him, for which Bank statements Exs.11 and 12 were placed on record. 25. On appreciation of evidence placed on record, the trial court rightly observed that the plaintiff was able to prove that with regard to disputed property, the defendant executed sale agreements in favour of plaintiff for sale consideration of Rs. 33 Lacs, against which on 15.09.2011 Agreement Ex. 1, on 22.09.2011 Agreement Ex. 2 and lastly on 30.11.2011 Agreement Ex. 3 were executed. The defendant has received Rs. 7 Lacs in cash and Rs. 5 Lacs through cheques against payment of consideration. 26. So far as question of readiness and willingness is concerned, as per plaintiff he was ready to pay balance amount of Rs. 21 Lacs but the defendant has not provided details of the Bank loan. It is also important that there was no mention in the Agreements as to the term within which the conditions mentioned in the Agreement is to be fulfilled and as the defendant issued notice for cancellation of the Agreement, in fact, the defendant himself was not ready and willing to perform his part of the contract. 27. The defendant stated that total Rs. 27. The defendant stated that total Rs. 28 Lacs were outstanding and the plaintiff had paid only Rs. 5 Lacs under the Agreement and the plaintiff has not paid nor made any arrangement for payment of balance amount. From perusal of Ex. 3 Agreement dated 30.11.2011 it was found that there was no mention of any fixed term for fulfillment of the conditions mentioned in the Agreement, within which the balance money of Rs. 21 Lacs was to be paid by the plaintiff. It was mentioned in Ex. 3: 28. From perusal of the Agreement Ex. 3, it is manifestly clear that the time was not essence of the contract. The balance amount of Rs. 21 Lacs was to be paid by the plaintiff to defendant. There was a condition that the plaintiff will pay the balance loan amount but before that the defendant has to tell the plaintiff how much amount is to be deposited in the Bank. The defendant was the only person who was well acquainted with the balance amount of the loan, which was to be paid by the plaintiff. The defence of the defendant is not worth to be believed that he has not received amount of Rs. 7 Lacs cash from the plaintiff. From perusal of Ex. 6, which was placed on record by the plaintiff, it is also clear that he has received loan of Rs. 15.40 Lacs from HDFC Bank in his name and he has also made arrangement for Rs. 5.60 Lacs in addition to the loan amount obtained from the HDFC Bank. 29. From the evidence placed on record, the statement of plaintiff stands proved that he was ready and willing to perform his part of the contract. The defendant has, just to show his willingness and readiness, issued notice Ex.A1. In the notice Ex. A1, he has not disclosed the fact that he has not received amount of Rs. 7 Lacs up to issuance of Ex. A1 notice. There was no occasion for the defendant to cancel the Agreement because for performance of the contract, no term has been fixed within which the plaintiff has to perform/fulfill the conditions of the Agreement. Notice Ex. A1 was replied vide Ex. 7, which was received by the defendant. 7 Lacs up to issuance of Ex. A1 notice. There was no occasion for the defendant to cancel the Agreement because for performance of the contract, no term has been fixed within which the plaintiff has to perform/fulfill the conditions of the Agreement. Notice Ex. A1 was replied vide Ex. 7, which was received by the defendant. In the reply, averments of the notice were denied and secondly, it was mentioned that the defendant should receive the balance amount and repay the loan and execute the sale deed. The trial court has rightly appreciated the evidence placed on record and decided issue No. 2 in favour of the respondent-plaintiff and against the appellant-defendant. 30. On behalf of the appellant, it was also argued that the agreement between parties was a contingent contract. The appellant has not paid the balance loan amount, which was agreed to be paid by him and the mortgage was not cleared, therefore, specific performance of the contract can not be enforced. 31. Learned counsel for the respondent opposed the contention raised by the appellant in this respect and argued that the Apex Court in J.P. Builders vs. A. Ramadas Rao, (2011) 1 SCC 429 considered whether or not a contract is contingent. In that case, the plaintiff, who was purchaser, agreed with the defendant, who was the vendor, to purchase the property. The defendant had created a mortgage of the Bank which was to be cleared. The defendant applied for One Time Settlement (OTS), which was not accepted by the Bank. The mortgage was not cleared. It was held that not obtaining clear title redeeming the mortgage cannot be construed as an impossible event allowing the vendor not to complete the sale. The contract was held to be not a contingent contract. The Supreme Court held that non-occurrence of contingency dependent upon acts & omissions of parties had to be distinguished from the non-occurrence due to acts or omissions independent of the acts & omissions of the parties. 32. The Supreme Court considered that for the contract to be contingent, the contingency would not be based upon collateral events dependent upon the performance of the promisor''s obligation. Events dependent upon the duties of the vendor cannot make a contract contingent. 32. The Supreme Court considered that for the contract to be contingent, the contingency would not be based upon collateral events dependent upon the performance of the promisor''s obligation. Events dependent upon the duties of the vendor cannot make a contract contingent. Default of the mortgagor-vendor in obtaining the no objection certificate would be his default in nonperformance of his implied covenants for securing a clear title by clearing the mortgage loan. Non-performance of such obligation by not obtaining the clearance did not render the contract a contingent one. 33. The ratio of aforesaid decision is equally applicable in the facts and circumstances of the present case. The defendant himself has not made any efforts to disclose to the plaintiff balance amount of loan, which was to be paid off by the plaintiff for clearing the loan. The plaintiff has proved by evidence and placed on record Ex. 6 whereby it is clear that he obtained loan from HDFC Bank to the tune of Rs. 15.40 Lacs and he has also made arrangement from other sources for Rs. 5.60 Lacs, which shows readiness & willingness of the plaintiff. Non performance of such obligation by not obtaining the NOC from Bank will not render the contract between the parties as contingent contract. 34. The respondent-plaintiff has also argued that the appellant defendant could not have avoided the contract as time was not the essence of the contract. He placed reliance on judgment in case of Ayang Rinpoche vs. Smt Suraksha Gupta & another: 2008 (151) DLT 678 and contended that it had to be normally presumed that time is not essence of the contract on contracts of sale of immovable property. In the present case, the money stood paid on the date of Agreement, as proved by the plaintiff through receipts signed by the defendant, which clearly stated that the same was received by the defendant in cash, as part payment towards sale of the disputed property. As per terms and conditions of the agreement to sale, no contrary evidence has been produced by the appellant-defendant to prove that the money was not received by him from plaintiff as indicated in the receipts. The respondent-plaintiff has clearly indicated his readiness & willingness with all material terms. As per terms and conditions of the agreement to sale, no contrary evidence has been produced by the appellant-defendant to prove that the money was not received by him from plaintiff as indicated in the receipts. The respondent-plaintiff has clearly indicated his readiness & willingness with all material terms. It was for the appellant defendant to comply with his part of the Agreement, by parting with information regarding outstanding amount for repayment of the loan to the plaintiff by virtue of agreement to sale. The trial court has rightly observed that time was not the essence of the contract in the present matter. 35. There is no ground for interference with the judgment & decree passed by the trial court. The appeal is devoid of merits and hence, dismissed.