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2009 Supreme(Del) 204
IN THE HIGH COURT OF DELHI
Honble Judge: Rajiv Sahai Endlaw, J.
Canara Bank – Appellants
Vs.
K.L. Rajgarhia – Respondent
CS(OS)1669/1989
Decided On: 12.02.2009
For Appellant/Petitioner/Plaintiff: Pradeep Dewan and Rajiv Samaiyar, Advs.
For Respondents/Defendant: T.K. Ganju, Sr. Adv., A.K. Thakur, Bharat Gupta and R.K. Mishra, Advs.
Headnote:
SPECIFIC PERFORMANCE - SALE OF PROPERTY - AGREEMENT - CONSTRUCTION OF FLATS - INABILITY TO PERFORM CONTRACT - SECTION 12 OF SPECIFIC RELIEF ACT - RELIEF UNDER SECTION 12(3) - ELECTION BY PLAINTIFF - DECREE FOR SPECIFIC PERFORMANCE.
Fact of the Case:
Plaintiff bank entered into an agreement with the defendant to purchase residential flats to be constructed by the defendant on a plot of land owned by him. The defendant failed to complete the construction and deliver possession of the flats within the agreed time. The plaintiff filed a suit for specific performance of the agreement and other reliefs.
Finding of the Court:
The court found that the defendant was unable to perform the whole of his part of the contract due to the construction of 8 flats being not possible under the master plan and building bye laws. However, the court held that the agreement for sale of property with lesser number of flats, if permitted under Section 12 of the Specific Relief Act, was enforceable.
Issues: 1. Whether the agreement dated 27th December, 1984 was intended to be and is in fact a loan transaction? OPD 2. Whether the agreement dated 27th December, 1984 is vitiated by undue influence and coercion exercised by the plaintiff and is against public policy? OPD 3. Whether the suit is not maintainable and the plaintiff is not entitled to specific performance of the contract under Section 20 of the Specific Relief Act? OPD 4. Whether the refund to the plaintiff of total amount received by defendant along with interest 18% p.a. as per agreement disentitles plaintiff for specific performance of agreement under Section 14 of the Specific Relief Act? OPD 5. Whether the stipulation regarding refund of the total amount to the plaintiff along with interest @18% p.a. as per Clause 5 of the said agreement amounts to an alternative contract, the performance of which discharges the defendant from specific performance of agreement dated 27th December, 1984? OPD 6. Whether the plaintiff has been ready and willing to perform his part of the contract? OPD 7. Whether the agreement dated 27th December, 1984 is unenforceable, illegal and void under chapter XXC and Under Section 269UC of the Income Tax Act? OPD 8. Whether the plaintiff has been ready and willing to perform his part of the contract? OPD 9. Relief.
Ratio Decidendi: The court held that the plaintiff was entitled to relief under Section 12(3) of the Specific Relief Act, as the defendant was unable to perform the whole of his part of the contract due to the construction of 8 flats being not possible under the master plan and building bye laws. The court also held that the plaintiff was entitled to specific performance of the agreement, as he had elected to take the property as it is and waived all other claims or rights which may be impediment thereto.
Final Decision: The court decreed specific performance of the agreement dated 27th December, 1984 by directing the defendant to put the plaintiff into vacant, peaceful, physical possession of the property and to execute the conveyance/transfer deed in favour of the plaintiff within a specified time. The plaintiff was also entitled to costs of the suit from the defendants.
Rajiv Sahai Endlaw, J.
1. The suit for specific performance of an agreement dated 27th December, 1984 between the parties and for other reliefs is for final adjudication. The plaintiff approached the court with a case that in or about 1984 the plaintiff bank had felt the need for purchase of residential flats for the use of its officers; the plaintiff entered into negotiations with the defendant who owned the plot of land admeasuring 300 sq yards bearing No. B-9, East of Kailash, New Delhi; that the defendant agreed to construct residential flats on the said plot and to hand over the same to the plaintiff; that agreement dated 27th December, 1984 was entered into between the parties.
.2. At this stage, the salient terms of the said agreement, insofar as relevant for the present, may be discussed. In the said agreement, the defendant is described as the vendor and the plaintiff as the purchaser; the agreement records that in pursuance to payment of Rs 27,100/- the Delhi Development Authority on behalf of the President of India has granted a lease of the aforesaid plot of land to the defendant on the terms and conditions contained in the perpetual lease deed, copy whereof is annexed to the agreement; that the defendant had proposed that he will construct residential flats on the said plot of land in accordance with plan annexed to the agreement and of the area as specified in Schedule I to the agreement, at his own costs for the use of the plaintiff as residential premises and that the defendant had agreed to sell to the plaintiff the said flats alongwith the leasehold rights over the plot of land and the plaintiff had agreed to purchase the same. The plaintiff under the said agreement agreed to pay a total sum of Rs 32,07,500/- to the defendant as consideration for the flats set out in Schedule I to the agreement together with the leasehold rights over the land and at the rate of Rs 340/- per sq. ft. of covered area of the flat and Rs 250/- per sq. ft. of the covered area in the basement as described in Schedule II to the agreement and in the instalments set out in Schedule III to the agreement; that the total consideration had been arrived at by taking into consideration the approximate area of each flat as mentioned in Schedule I but the said consideration was subject to variation and was to be finally determined after completion of the construction in all respects and after the actual area was measured - the total consideration payable was on the actual covered area ascertained on actual measurement; that as per the then plan, the ground floor, first floor and second floor each was to contain two flats of approximate covered area of 1000 sq. ft. and mezzanine floor and the third floor of barsati each were to contain one flat of 1000 sq. ft., besides basement of an approximately covered area of 1950 sq ft. It was further provided that if the defendant constructed additional two flats, the defendant shall sell the same only to the plaintiff at the same rates and subject to the same conditions and specifications as applicable to the other flats. It was further agreed that the defendant shall not construct even if permissible to do in excess of ten flats and basement. The obligation for obtaining of the necessary permission from the DDA or other governmental authorities for transferring and conveying all rights, title and interest in respect of land and the flats to the plaintiff was of the defendant
.and all expenses, charges in connection with transfer including payment of any statutory dues or amount by way of unearned increase in the value of the plot to the Delhi Development Authority or any other authority was also to be borne by the defendant. The defendant had agreed to complete the flats within the period of 18 months from the date of the agreement.
.3. Some of the clauses of the aforesaid agreement which would be relevant for the discussion hereunder are set out hereinbelow.
3. It is agreed that on the plot of
