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2011 Supreme(Del) 66
HIGH COURT OF DELHI : NEW DELHI
HON'BLE MR. JUSTICE MANMOHAN SINGH
M/s. Boots Pharmaceuticals Ltd.-Plaintiff
Versus
Rajinder Mohindra & Anr –Defendants
CS (OS) No. 705/1994
Decided on : 17th January, 2011
Mr Neeraj Kishan Kaul, Sr. Advocate with Mr Darpan Wadhva, Mr R.N. Karanjawala, Mr Akhil Sachar, Ms Simran Brar and Mr Abhishek Roy, Advocates.
Mr S. Vaidialingam, Advocate.
Headnote:
Specific Relief Act, 1963 - Sections 16 & 20--Specific performance of Agreement to Sell--Readiness and willingness cannot be treated as a Strait-jacket formula and that had to be determined from the facts and circumstances which are relevant to the intention and conduct of the parties concerned--Failure to obtain any permission will render the agreement inoperative--If the discretion of the relief of Specific Performance is exercised in favour of the plaintiff, it would give the plaintiff an unfair advantage over the defendants within the meaning of Section 20(2)(a) of the Act--Court is also not inclined to exercise its discretion to grant the relief for Specific Performance under the facts and circumstances of the present case as Clause 6 of the Contract is hit by Section 14(c)--Suit dismissed.
Specific Relief Act, 1963 - Sections 14 & 20--Agreement to sell the property to lessee--Conditional agreement subject to availing necessary permissions--No consideration paid by the vendee to the vendor--Specific clause in the agreement providing that failure to obtain approval shall render the contract `inoperative'--Not a fit case to grant relief specific performance--Suit dismissed.
MANMOHAN SINGH, J. 1. The present suit has been filed by the plaintiff for specific performance of Agreement to Sell dated 20.11.1989 executed between the plaintiff and the defendants. The prayers sought in the present suit are as under:
a) Pass a decree for specific performance of the Agreement dated 20th November, 1989 in relation to property No.E/44-10, Okhla Industrial Area, Phase II, New Delhi-110020 in favour of the Plaintiff, directing the Defendant Nos.1 and 2, their servants, agents successors and assignees to sell, transfer assign and convey the property to the Plaintiff;
b) alternatively pass a decree for recovery of Rs.23 lakhs against the Defendant Nos. 1 and 2 in case this Hon‘ble Court comes to the conclusion that the Plaintiff is not entitled to specific performance;
c) award cost of the suit; and
d) pass such other and further decree as this Hon‘ble Court may deem fit and proper in the facts and circumstances of the case.
2. The brief facts leading up to the filing of this suit are that the plaintiff company was a lessee of property no. E-44/10 Okhla Industrial Area (Phase I), New Delhi – 110020 measuring approximately 501.67 square meters (hereinafter referred to as the =demised premises‘) and the defendants were owners thereof, having purchased the demised premises at a bid. The lease deed dated 08.04.1986 between the parties was for a period of five years, initially renewable by the lessee for two successive periods of five years at an enhanced rate each time of 25% and thereafter on mutually agreeable terms.
3. The thrust of the plaint is that when the demised premises were bought the defendants were Indian citizens but by virtue of staying abroad for very long, they both acquired the citizenship of the United States of America. At this juncture, the defendants were directed by the Reserve Bank of India to dispose of the demised premises as the policy as it stood then did not allow foreign nationals of Indian origin to own/hold any commercial property for investment purposes like earning rental income etc.
4. Being unable to find any buyers for the demised premises, the defendants approached the plaintiff and after negotiations and discussion it was agreed that the said premises would be sold to the plaintiff for a total sale consideration of Rs.23 lac and agreement to sell dated 20.11.1989 was executed between the parties. Various permissions were to be obtained by the parties from different departments and authorities including the Appropriate Authority under Chapter XX-C of the Income Tax Act, 1961, DDA and the RBI for enforcement of the agreement to sell.
5. The above-said Appropriate Authority i.e the Income Tax Department by order dated 19.01.1990 decided to acquire the property stating that under sub-section (1) of section 269 UE the right over property vests in the Central Government from 19.01.1990 which was challenged by the plaintiff before this Court in WP (C) No. 310/1990. The order of acquisition was set aside by the Court and thereafter the appropriate authority granted the =no objection‘ certificate permitting the defendants to sell the demised premises.
6. The plaintiff was informed in June, 1993 that the necessary approvals have been granted vide RBI‘s letter dated 10.05.1993. The plaintiff thereafter sent the amount of Rs. 3 lac vide demand draft no. 298670 dated 08.06.1993 along with letter dated 09.06.1993 to the defendants.
7. Admittedly, the approval of the DDA was not granted to the defendants and they were not interested to go ahead with the agreement as pointed out by the plaintiff in its letter dated 04.12.1993. However, the defendants rescinded the agreement dated 20.11.1989 through their letter dated 28.12.1993 stating that they were using the option given to them in Clause 6 of the said agreement as the RBI had granted permission to NRI‘s to retain/hold property in India and the defendants did not wish to enforce the agreement to sell in view of the same. The bank draf
