High Court Of Delhi
HIGH WAY FARMS - Appellant
Versus
CHINTA RAMANDORS - Respondent
Interim Application 429 of 1994
Decided On : 03/03/2000
Temporary Injunction - Specific Performance of Land - Delhi High Court Act 1991, Section 315; 1996, Section 529 - The court examined the documents styled as receipts and concluded that they did not contain all the necessary concomitants of an agreement. The court referred to previous judgments to support its decision, emphasizing that the substance of the document should be seen, not just the form. The court highlighted that the agreements were yet to be reached based on the payment terms and lack of evidence of a formal agreement.
Fact of the Case:
The application for temporary injunction was filed in a suit for the specific performance of land based on two receipts. The defendants raised objections to the maintainability of the suit due to mis-joinder of parties and causes of action.
Finding of the Court:
The court found a complete failure on the part of the plaintiff to establish a prima facie case in his favor based on the examination of the receipts and the payment terms mentioned in them.
Issues: Mis-joinder of parties, mis-joinder of causes of action, existence of a prima facie case in favor of the plaintiff.
Ratio Decidendi: The court emphasized that the substance of the document should be seen, not just the form, and highlighted the payment terms as indicative that the agreements were yet to be reached.
Final Decision: The interim orders were recalled, and the application for temporary injunction was dismissed.
( 1 ) THIS application for temporary injunction has been filed in a suit for the specific performance of land situated in Khasra Nos. 314 (4-16), 313 (4- 16), 315 (4-16) situated in Village Shahroorpur, District Mehrauli, New Delhi. This agreement based on a receipt dated 22. 9. 1991 has allegedly been signed by defendant Nos. 1,3,9,10 and II. In this very suit specific performance of another piece of land has also been claimed on the basis of another receipt dated 3. 10. 1991. The land mentioned in the second receipt is situated in Khasra No. 311 (4-16), 312 (1- 4) situated in the same village and allegedly executed by defendant Nos. 13,14 and 15. There is no document witnessing any agreement between plaintiff and defendant Nos. 2,4,5,6,7,8 and 12 but they have all been impleaded in the suit.
( 2 ) LEARNED Counsel for defendants had raised an objection to the maintainability of the suit on the ground of mis-joinder of parties as well as mis-joinder of causes of action. Primafacie both these objections are well founded but in the view which I have taken, I need not expand on these objections.
( 3 ) AS lias been stated above, the suit is predicated on two documents styled as receipts. It is the contention of the learned Counsel for the plaintiff that the contents of these documents should be read holistically and meaningfully and that merely because these are styled as receipts, it would not necessarily lead to the conclusion that an Agreement to Sell had not been entered into. To this extent learned Counsel for the plaintiff is no doubt correct. In. all such cases a duty is cast on the Court to examine the document in question and to arrive at a conclusion as to whether it contains all the necessary concomitants of an agreement. In M/s. Nanak Builders and Investors Pvt. Ltd. v. Vinod Kumaralag, AIR 1991 Delhi 315, Aruri Kumar, J. had made the following observations :
"mere heading or title of a document cannot deprive the document of its real nature. It is the substance which has to be seen and not the form. Where the document acknowledging the receipt of earnest money towards the sale of plot of land contains all the essential and basic ingredients required for an Agreement to Sell the same is signed by both the vendor and the vendee and is also witnessed by any attesting witness and it does not contain any mention that a formal agreement of sale will be executed, the fact that the vendee parts with a substantial amount in favour of the vendor shows that the parties have reached a consensus on the various terms of the arrangement between them meaning thereby that a contract has been arrived at, and, merely because the document is titled as a receipt it does not render the document as a mere receipt. The document is a contract which is capable of being specifically enforced. "
( 4 ) SIMILAR observations are also contained in the order of S. K. Mahajan, J. in Vinod Saluja v. Sita Rani, 1996 (36) DRJ 529=61 (1996) DLT 790. Applying the ratio set down in the above judgment to the facts of the present case I am satisfied that there is a complete failure on the part of the plaintiff to establish the existence of a primafacie case in his favour.
( 5 ) IN respect of the first receipt dated 22. 9. 1991 the total consideration is Rs. 24,50,000. 00 and admittedly only Rs. 21,000. 00 has been paid. After witnessing the receipt of this payment this very document mentions that at the time of the "agreement" a further sum of Rs. 3,00,000. 00 would be paid. This sentence by itself is sufficient to non-suit the plaintiff. It is the normal practice in all transactions pertaining to the sale of property that Earnest Money representing approximately ten percent of the sale consideration is paid/received. Although this would not lead to the inescapable conclusion that every contract where a payment to this extent has been made is liable for specific performance, the non-receipt of an approximately similar sum would definitely
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