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2010 Supreme(Del) 845

IN THE HIGH COURT OF DELHI AT NEW DELHI
MR. JUSTICE VIKRAMAJIT SEN MS. JUSTICE MUKTA GUPTA
Sanjay Puri
Versus
Radhey Lal & Ors.
RFA(OS) No.84/2006 & CM No.14365/2010
Decided on : December 24, 2010

Advocates Appeared:
Mr. Amit S. Chaddha, Sr. Adv. with Mr. Kunal & Ms. Roopa Dayal, Advs.
Mr. Vineet Malhotra & Mr. Sidhartha Das, Advs. for Respondents 1A to C.

Headnote:

Contract Act, 1872 - Section 2(h)--Transfer of Property Act, 1882--Section 54--Agreement for sale of a flat--Receipt did not contain covenant to the effect that any formal Agreement to Sell would have to be executed--Even a document styled as a `Receipt', can operate and be enforceable as a contract--Jurisdiction to decree specific performance is discretionary--Conduct of owner endeavored to return the `Token Advance' of 50,000/- within ten days of the event--Repudiation, cancellation or refutation, had taken place within ten days--Specific performance declined for good and equitable reasons--Awarding of 1,00,000/- as damages set aside--Appeal disposed of.

Judgment

VIKRAMAJIT SEN, J.

1. This Appeal is directed against the Judgment dated 21.8.2006 whereby the learned Single Judge rejected the Suit filed by the Appellant praying for the Specific Performance of a purported agreement entered into on 16.6.2003. This alleged agreement pertains to the sale of a Ground Floor Flat owned by the Defendant/Respondent.

2. The document, on which the Suit is founded, is handwritten, inexorably leading to the conclusion that it was drawn on the spur of the moment. It is reproduced below:-

In the impugned Order, the learned Single Judge has arrived at the conclusion, after noticing Section 2(h) of the Indian Contract Act, 1872 and Section 54 of the Transfer of Property Act, 1882, that an enforceable contract had been arrived at by the parties. This appears to be predicated on the dialectic that in the said document the property was clearly delineated, the sale consideration was defined, and there was an undeniable acknowledgement of the factum of ` 50,000/- having been received albeit as a “Token Advance”. It was also noted by the learned Single Judge that the parties had agreed that vacant possession would be handed over by the Owner/Respondent to the Appellant in October, 2003. The learned Single Judge also found it salient that the Receipt does not contain a covenant to the effect that any formal Agreement to Sell would have to be executed.

4. There is no gainsaying that even a document styled as a „Receipt?, can operate and be enforceable as a contract. This view also finds articulation in Lalit Kumar Sabharwal –vs- Ved Prakash Vij, 2003 (68) DRJ 670 and Pellikan Estates Pvt. Ltd. –vs- Kamal Pal Singh, 2004 VI AD Delhi 185. In fact, an Agreement to Sell can even be established by parol evidence. That an oral Agreement to Sell is enforceable admits of no cavil in view of the authoritative pronouncement in Brij Mohan –vs- Sugra Begum, (1990) 3 SCR 413 wherein their Lordships enunciated the law in these terms:- “We have given our careful consideration to the arguments advanced by learned counsel for the parties and have thoroughly perused the record. We agree with the contention of the learned counsel for the appellants to the extent that there is no requirement of law that an agreement or contract of sale of immovable property should only be in writing. However, in a case where the plaintiffs come forward to seek a decree for specific performance of contract of sale of immovable property on the basis of an oral agreement alone, heavy burden lies on the plaintiffs to prove that there was consensus ad idem between the parties for a concluded oral agreement for sale of immovable property. Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were concluded between the parties orally and a written agreement if any to be executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agreement.”

5. After a perusal of Dobell –vs- Hutchinson, (1835) 3 A and E 355, the learned Single Judge has, in the impugned Order, expressed disagreement with the previous decision of a coordinate Bench in Lalit Kumar. In the first place, judicial propriety mandates that the previous view of a coordinate Bench should be followed; if the Judge is unable to be persuaded to apply its dicta, he is duty-bound to refer the question to a larger Bench. Having carefully considered Lalit Kumar, in our appreciation it does not state that a document, in the form of a „Receipt?, cannot ever conform to the character of a contract. CIT Punjab Haryana –vs- Panipat Woollen and General Mills, AIR 1976 SC 640, High Way Farms –vs- Chintaran, 85 (2000) DLT 355, Mayawanti –vs- Kaushalya Devi, (1990) 3 SCC 1 and Nanak Builders and Investors Private Limited –














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