2012 Supreme(Del) 2014

High Court of Delhi
THE HONOURABLE MR. JUSTICE V.K. JAIN
Sundeep Khanna
Versus
A. Das Gupta & Others
CS(OS) 576 OF 2005 & CCP NO. 94 OF 2008
Decided on : 17-10-2012

A party cannot seek specific performance of an agreement when it was not ready and willing to perform the agreement as per the terms agreed between the parties.

Headnote:

AGREEMENT TO SELL - SPECIFIC PERFORMANCE - READY AND WILLINGNESS - MISJOINDER OF PARTIES - SUIT FOR SPECIFIC PERFORMANCE OF AGREEMENT TO SELL - ESSENTIAL TERMS OF AGREEMENT - UNCERTAINTY - ORAL EVIDENCE - SECTION 92 OF EVIDENCE ACT - SECTION 16(C) OF SPECIFIC RELIEF ACT - EXECUTION OF SALE DEED - STAMP DUTY - RIGHT OF FIRST REFUSAL - BASEMENT RIGHTS - ENDORSEMENT ON ORIGINAL TITLE DEED - READINESS AND WILLINGNESS TO PERFORM - SECTION 21(2) OF SPECIFIC RELIEF ACT - DAMAGES.

Fact of the Case:

Plaintiff and defendant No. 1 entered into an agreement to sell on 29.01.2005, whereby defendant No. 1 agreed to sell the ground floor of the property along with basement rights and 40% undivided interest in the land as also the right of first refusal in respect of first and second floor to the plaintiff, for a consideration of Rs 3.30 crores. Plaintiff paid Rs 10 lakh as advance. Plaintiff carried out due diligence and it transpired that the property was actually an HUF property. Defendant No. 1 sent a draft sale deed showing himself to be the sole owner of the property and agreeing to split the sale into two parts, one a sale deed and the other a fittings and fixtures agreement. The draft sale deed, therefore, had to be changed and defendant No. 1 agreed that he would get defendants 2 and 3 signed the sale deed. Plaintiff sent two separate drafts, one of the sale agreement and another of a fittings and fixtures agreement, but they were not as per the terms of the agreement to sell between the parties. There was further exchange of correspondence between the parties. Defendant No. 1 met the plaintiff on 17.03.2005 and agreed to the draft sent to him by the plaintiff except to the extent that he wanted to confirm from his lawyer with respect to making an endorsement on the original title deed. Defendant No. 1, however, sent a draft on 21.03.2005, which was virtually the same as the draft which was sent earlier and was rejected by the plaintiff. The plaintiff then sent a draft sale deed to defendant No. 1, along with a letter dated 21.03.2005. Defendant No. 1, however, returned the cheque of Rs 10 lakh received from the plaintiff along with a letter dated 24.03.2005 stating therein that the transaction stood cancelled. Plaintiff sought specific performance of the agreement to sell dated 29.01.2005 or in the alternative a decree for recovery of Rs 1 crore as damages for the losses suffered by him on account of rise in the property prices and the cost of the time and effort spent by him, etc.

Finding of the Court:

1. The agreement dated 29.01.2005 was a concluded contract for sale of the property subject-matter of the agreement to the plaintiff for consideration of Rs 3.30 crores. 2. The plaintiff was not entitled to 40% undivided share in the land underneath the building. 3. The plaintiff was not ready and willing to abide by all this essential term of the agreement between him and defendant no.1. 4. The plaintiff was seeking to introduce a term which was not agreed between the parties on 29.01.2005 or at any time thereafter. 5. Defendant no.1 Shri A. Das Gupta wanted to introduce certain terms which were not agreed between the parties and was not ready to complete the transaction in true spirit of the terms agreed between the parties. 6. The plaintiff was not entitled to specific performance of the agreement dated 29.01.2005. 7. The suit was bad for misjoinder of defendants no.2 and 3 namely Mrs. Shurobhi Das Gupta and Shri Probal Das Gupta in their individual capacity. 8. The plaintiff was not entitled to any damages.

Issues: 1. Whether there was concluded contract between the parties and the receipt dated January, 29, 2005 acknowledging the receipt of cheque for a sum of Rs 10.00 lakh is a concluded agreement between the parties which can be enforced? 2. If issue No. 1 is decided in favour of the plaintiff then whether the plaintiff is entitled for a specific performance of agreement? 3. Whether the plaintiff had always been ready and willing to perform his part of the agreement? 4. Whether the defendant No. 1 was the sole owner of the property and could enter into the agreement to sell with the plaintiff? 5. Whether suit is bad for mis-joinder of parties?

Ratio Decidendi: 1. An agreement to sell an immovable property must contain all the essential ingredients necessary to make an agreement to sell an immovable property, as laid down by this Court in Aggarwal Hotels (P) Ltd.(supra) and Braham Singh (supra). 2. The mere fact that the suit was filed after one year from the date when defendant no.1 returned the cheque to the plaintiff was not a ground to deny the relief to which the plaintiff was otherwise entitled. 3. Specific performance will not be ordered if the contract itself suffers from some defects which make it invalid or unenforceable. 4. Even if the contract is valid and enforceable, it is in the discretion of the Court whether to pass a decree or not. 5. The stipulations in terms of the contract have to be certain and the parties must have been consensus ad idem. 6. Oral evidence to the effect that defendant No.1had agreed to sell 40% undivided share in land to the plaintiff, is not admissible and has to be excluded from consideration. 7. Specific performance of a contract cannot be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. 8. The plaintiff was required to prove the financial capacity to pay the balance sale consideration at all point of time i.e. for the period of 45 days which had been stipulated in that case for making payment and even thereafter when evidence was led. 9. Since the plaintiff was not ready and willing to complete the transaction as per the term agreed between the parties on 29.1.2005 and was seeking to introduce certain terms which had never been agreed between them, he is not entitled to any damages.

Final Decision: Suit dismissed.