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2006 Supreme(Del) 2211
High Court Of Delhi
ANIL KUMAR
KUSHAGR ANSAL - Appellant
Versus
ANSAL PROPERTIES AND INDUSTRIES LIMITED - Respondents
CS (OS) 1088 Of 2002
Decided On : 11/29/2006
R.S.Endlaw, SUHAIL DUTT
An agreement to sell does not create any right in the property and can not bind the Estate contrary to the position in the case of a mortgage or lease.
Headnote:
SPECIFIC PERFORMANCE - AGREEMENT TO SELL - CONCLUDED AGREEMENT - ESSENTIAL TERMS - INTENTION OF THE PARTIES - DISCRETION OF THE COURT - APPOINTMENT OF RECEIVER - IRREPARABLE LOSS - BALANCE OF CONVENIENCE - INJUNCTION - RESTRAINING ORDER - CAUSE OF ACTION - NECESSARY PARTY - REJECTION OF PLAINT.
Fact of the Case:
Plaintiff filed a suit for specific performance of an agreement to sell a flat, declaration, permanent injunction, and recovery of damages/mesne profits against the defendants. The plaintiff contended that he had paid the entire consideration for the flat and that the defendants were threatening to allot the flats of the plaintiff and his family members to EXIM Bank. The defendants raised a demand of Rs. 1,32,000/- for all the 11 flats of the plaintiff and his family members and also stated that they are agreeable to consider the matter on payment of said sum. The plaintiff filed an application for interim injunction contending that the defendants are apprehending illegal cancellation of allotment of the plaintiff and creating of third party interest in respect thereof. The defendants contested the application contending that the allotment of the flat in dispute was provisional by allotment letter dated 15th October, 1990. The total sale consideration of Rs. 8,75,000/- only by the said allotment letter did not tantamount to any concluded agreement for sale or purchase of any immovable property.
Finding of the Court:
The Court held that whether there is a binding contract between the parties or not depends upon the intention of the parties and the special circumstances of each particular case. The Court further held that an agreement to sell does not create any right in the property and can not bind the Estate contrary to the position in the case of a mortgage or lease. The Court also held that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. Where a valid and enforceable contract has not been made, the Court will not make a contract for the parties and the specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable. The Court further held that the discretion of the Court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract but if the stipulation and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all. The Court also held that a receiver cannot be appointed merely because it is expedient or convenient to one of the parties to do so or because it will do no harm to do so.
Issues: 1. Whether there was a concluded agreement to sell between the parties? 2. Whether the plaintiff was entitled to the appointment of a receiver? 3. Whether the plaintiff was entitled to an injunction restraining the defendants from transferring, selling, mortgaging or encumbering third party interest in the flat? 4. Whether the plaint was liable to be rejected against the defendant No. 2?
Ratio Decidendi: 1. The Court held that there was no concluded agreement to sell between the parties as the intention of the parties was not clear and the essential terms of the contract were not finalized. 2. The Court held that the plaintiff was not entitled to the appointment of a receiver as he had not made out a case of waste or damage to the property. 3. The Court held that the plaintiff was entitled to an injunction restraining the defendants from transferring, selling, mortgaging or encumbering third party interest in the flat as the plaintiff would suffer irreparable loss and damages if the defendants were allowed to do so. 4. The Court held that the plaint was not liable to be rejected against the defendant No. 2 as the plaintiff had made out a cause of action against him.
Final Decision: The Court dismissed the plaintiff's application for the appointment of a receiver and granted an injunction restraining the defendants from transferring, selling, mortgaging or encumbering third party interest in the flat. The Court also dismissed the defendant No. 2's application for rejection of the plaint against him.
ANIL KUMAR, J.
( 1 ) THIS order will dispose of plaintiff"s applications under Order 39 Rule 1 and 2 and another application under Order XL Rule 1 read with Order XXXIX rules 1 and 2 and Section 151 of the Code of Civil Procedure and the application of the Defendant no. 2 under order VII Rule 11 and in the alternative under order 1 rule 10 of the Code of Civil Procedure.
( 2 ) THE plaintiff has filed a suit for specific performance in respect of flat No. GF-26, B-148, Statesman House, Barakhamba Road, New Delhi besides a suit for declaration and permanent injunction and for recovery of damages/mesne profits against the defendants. Plaintiff, Shri Kushagr Ansal, contended that shri Sushil Ansal, is the brother of his father, Shri Deepak Ansal, Deepak ansal, Gopal Ansal and Sushil Ansal, Ansal brothers, were jointly in the management and control of Ansal Group of Companies including Ansal Properties and Industries Limited, defendant No. 1, and his father held majority share with his brother, Shri Gopal Ansal.
( 3 ) A family settlement was arrived at among the brothers with the object of giving separate ownership, management and control of companies to each brother and consequently, plaintiff"s father transferred all his shares in Ansal properties and Industries Limited to Shri Sushil Ansal, defendant No. 2 and his nominee.
( 4 ) A restructuring plan was executed for net worth equivalization of three flagship companies. The plaintiff contended that in 1988, defendant No. 1 proposed to construct a multi storey commercial building at plot No. B-148, statesman House, Barakhamba road, New Delhi comprising of independent flats and in that building he agreed to buy a commercial flat No. GF-26 comprising of 250 sq. ft. @ Rs. 3,500/- per sq. ft. for a total consideration of Rs. 8,75,000/ -. According to plaintiff, agreement to sell in respect of said flat is reflected and evidenced by the allotment letter dated 15th October, 1990 executed by the defendant No. 1 in favour of plaintiff in terms whereof defendants agreed to sell the said flat to the plaintiff. The plaintiff contended that besides the said flat, he, his father, Shri Deepak Ansal, his mother, his brother and Deepak ansal (HUF) also entered into similar agreements in respect of other flats in the same building. The plea of the plaintiff is that the entire consideration of rs. 8,75,000/- was paid. In respect of other flats in his name and in the name of other family members and his HUF where his father is Karta, a total consideration of Rs. 94,71,550/- has been paid representing the payment of sale consideration of 11 flats which were agreed to be sold to the plaintiff and his family members.
( 5 ) THE plaintiff asserted that with a view to defeat the rights of the plaintiff and his family members, the defendants had been threatening to allot the flats of plaintiff and his family members to EXIM Bank (i. e. , Export Import bank of India) and even a resolution to this effect was passed by the defendants necessitating a notice dated 21st March, 2000 sent by plaintiff to the defendant no. 1 and the Directors. In reply dated 22nd March, 2000 to the said notice, the defendant No. 1 confirmed that by reducing 2000 sq. ft from the area of EXIM Bank deal and adding to the already existing area with the company, the area of Shri gopal Ansal and Shri Deepak Ansal and their families would remain almost intact. According to plaintiff, thereafter despite assurances by the Directors of defendant No. 1, even after elapse of reasonable time, the possession of the flat was not given necessitating sending another notice dated 23rd May, 2002 calling upon the defendants to handover the possession of the flat to the plaintiff. In reply dated 5th June, 2002 to notice date 23rd May, 2002, the defendants raised a demand of Rs. 1,32,000,00/- for all the 11 flats of plaintiff and his family members and also stated that the defendants are agreeable to consider the matter on payment of said sum. The
