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2009 Supreme(Del) 802
IN THE HIGH COURT OF DELHI
S.MURALIDHAR
MANOJ KUMAR - Appellant
Versus
VINOD KUMAR - Respondent
IA Nos. 5897/08 (u/O 39 R 1 & 2), 8690/08 (u/O 39 R 4 CPC) in CS(OS) 918/2008
Decided On : 24-07-2009
Mr. Rajiv Talwar with Mr. Tarun Rana and Mr. Sandeep Khatri, Advocates.
Mr. Hemant Chaudhary with Mr. S.W. Haider, Advocate.
The main legal point established in the judgment is that the default clause in the agreement does not preclude the plaintiff from seeking specific performance, and the seller cannot take advantage of being in breach by denying specific performance to the purchaser.
Headnote:
Specific Performance - Property Dispute - Specific Relief Act, 1963 - Section 14, Section 20 - Judgment in Dadarao v. Ramarao (1999) 8 SCC 416, M.L. Devender Singh v. Syed Khaja AIR 1973 SC 2457, P.S. Ramakrishna Reddy v. M.K. Bhagyalakshmi III (2007) SLT 704 - The court held that the suit for specific performance is maintainable despite the default clause entitling the purchaser to be refunded twice the earnest money in the event of a breach of the agreement being committed by the seller.
Fact of the Case:
The plaintiff filed a suit for specific performance of an agreement for the sale of a property. The defendant was alleged to be in the process of selling the property to a third party without informing the plaintiff.
Finding of the Court:
The court found that the suit for specific performance was maintainable despite the default clause in the agreement, entitling the purchaser to be refunded twice the earnest money in the event of a breach by the seller.
Issues: The main issue was whether the suit for specific performance was maintainable in light of the default clause in the agreement.
Ratio Decidendi: The court held that the default clause in the agreement did not preclude the plaintiff from seeking specific performance, and the seller could not take advantage of being in breach by denying specific performance to the purchaser.
Final Decision: The court decided in favor of the plaintiff, holding that the suit for specific performance was maintainable. The interim order restraining the defendant from alienating the property to a third party was made absolute, and the suit was set down for trial on the remaining issues.
1. These are applications by the plaintiff under Order XXXIX Rules 1 and 2 CPC and by the Defendant under Order XXXIX Rule 4 CPC in a suit for specific performance of an agreement dated 23rd August 2007 whereby the defendant agreed to sell to the plaintiff property at 381, Pocket 5, Ground Floor, Sector 22, Rohini, Delhi admeasuring 60 sq. m. The total consideration of the property was Rs. 21 lakhs. The plaintiff paid to the defendant an earnest money of Rs.2 lakhs as part of the total consideration. It was agreed that the plaintiff would pay Rs. 2 lakhs after execution of the conveyance deed in favour of the defendant and the balance consideration would be paid at the time of the execution of final conveyance deed and handing over of the physical possession of the property. This was agreed to be done within forty-five days from the date of conversion of the property into freehold.
2. The Plaintiff states that thereafter the plaintiff had been requesting the defendant verbally as well as telephonically to get the property converted into freehold. In March 2008, the plaintiff learnt that the defendant was in the process of selling the premises to a third party without informing the plaintiff. The plaintiff apprehended that the defendant was entering into a fresh transaction with the third party since the market value of the property had increased. on behalf of the plaintiff on 12March 2008 to the defendant. The notice reiterated the plaintiffV readiness and willingness to perform his part of the contract by offering to pay the balance sale consideration. Despite receipt of the notice, the defendant failed to respond. Thereafter the present suit was filed.
3. It is stated in the plaint that the plaintiff is still ready to pay the balance sale consideration of Rs.19 lakhs to the defendant. On 14th May 2008 while directing notice to issue in the application (IA No.5897 of 2008) under Order 39 Rules 1 and 2, this Court passed an interim order restraining the defendant from alienating or transferring or parting with the possession of the suit property to any other third person. After the written statement was filed by the defendant along with an application (IA No. 8690 of 2008) under Order XXXIX Rule 4 CPC, issues were framed by order dated 24th November 2008.
the agreement to sell is not specifically enforceable for the reason of onus to prove was on the parties. By n order dated 20 March 2009 the case was then set down for hearing on the aforesaid issue which was to be treated as a preliminary one. This order disposes of the aforementioned preliminary issue.
4. According to learned counsel for the Defendant, the agreement dated 23rd August 2007 stipulates that upon the failure of the defendant to carry out his obligation thereunder twice the earnest money would be refunded to the Plaintiff and the agreement would be treated as cancelled. It is submitted that in view of such a clause in the agreement, the prayer for specific performance was not capable of being granted to the plaintiff particularly in light of the Section 14 of the Specific Relief Act, 1963 read with Section 20 thereof. Reliance has been placed on the judgment in Dadarao v. Ramarao (1999) 8 SCC 416. On the other hand, the learned counsel for the plaintiff relies upon the judgments of the Supreme Court in M.L. Devender Singh v. Syed Khaja AIR 1973 SC 2457 and the subsequent judgment in 3__VRX]D_ v. Shondrilo Naidu (2004) 6 SCC 649 in which it is held that the decision in Dadarao v. Ramarao was per incuriam. A reference is also made to the decision in P.S. Ramakrishna Reddy v. M.K. Bhagyalakshmi III (2007) SLT 704.
5. In order to appreciate the respective contentions of the parties, the receipt for the bayana paid by the Plaintiff needs to be examined. The original is in Hindi and its translation in English as filed by the Defendant reads as under:
³(DUQHVW Money receipt I, Vinod Kumar son of Sh Hansraj Resident of 146, Bharat Nagar, Delhi 52
