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RAJIV SAHAI ENDLAW
Tanu Goel – Appellant
Versus
Girish Chopra – Respondent
Key Points: - The court held that a seller of mortgaged property cannot refuse to take steps to clear the mortgage to avoid a binding Agreement to Sell, and the property remains saleable subject to the mortgage (!) (!) . - Mere availability of funds is insufficient for readiness and willingness; the plaintiff must also communicate this readiness to the seller, which was established via emails and a legal notice (!) (!) (!) . - The defendants failed to prove that the mortgagee bank refused to discharge the mortgage, and since the bank discharges mortgages floor-wise, the mortgage was not an impediment to sale (!) (!) . - The clause in the Agreement allowing refund of advance with interest applies only if the purchaser is in breach, not if the seller fails to perform, thus not negating the right to specific performance (!) (!) . - The plaintiffs were found ready and willing as they had secured a home loan sanction and communicated their intent to pay the balance consideration despite the delay caused by the defendants (!) (!) (!) . - The suit was allowed by passing a decree for specific performance, directing defendants to execute the Sale Deed after clearing the mortgage or allowing plaintiffs to pay off the bank directly (!) (!) . - The defendants were held liable for costs if they fail to comply with the decree within three months (!) . - The court ruled that the seller is not concerned with the source of funds (e.g., home loan) used by the purchaser to arrange the balance sale consideration (!) .
1. The two plaintiffs have sued for specific performance of an Agreement of Sale of third floor along with terrace rights of property No.9, Sukhdev Vihar, New Delhi constructed over land admeasuring 450 sq. yds, together with one servant quarter having common WC on the terrace floor and one car parking space in the drive way, and in the alternative, for recovery, of Rs.1 crore already paid as advance to the three defendants and Rs.3,25,00,000/-as damages, pleading:
(i) that the defendants No.1 & 2 i.e. Sh. Girish Chopra and Smt. Ashima Chopra vide Agreement to Sell dated 15th June, 2010 agreed to sell the aforesaid property to the two plaintiffs for a total sale consideration of Rs.4,25,00,000/-;
(ii) that in terms of the said Agreement to Sell, the plaintiffs paid a sum of Rs.50 lakhs in the name of the defendant No.1 as earnest money at the time of signing of the Agreement to Sell and a further sum of Rs.25 lakhs on 9th July, 2010;
(iii) that the balance sale consideration of Rs.350 lakhs was payable at the time of execution of the Sale Deed on or before 15th August, 2010, after the defendants No.1 & 2 had cleared the dues in respect of the home loan taken by them fro
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