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2014 Supreme(Del) 1642
High Court of Delhi
JAYANT NATH, J.
M/s. BDR Builders & Developers Pvt. Ltd
Versus
Shyam Lal Arora
CS(OS) No. 1042 of 2008 & CC No. 13 of 2009
Decided on : 04-07-2014
For the Plaintiff :Harish Malhotra, Senior Advocate with Sanjay Goswami, Advocate.
For the Defendant :M.P. Raju, Mary Scaria, Advocates.
The judgment emphasizes the importance of valid and enforceable agreements, the non-essential nature of time in contracts for the sale of immovable property, and the requirement for evidence to support claims of representations made outside the written agreement. It also highlights the need for the plaintiff to demonstrate readiness and willingness to perform the agreement to be entitled to specific performance.
Headnote:
Specific Performance - Agreement to Sell - Indian Evidence Act - Contract Act - Specific Performance of Agreement to Sell - Gomathinayagam Pillai & Ors. v. Pallaniswami Nadar AIR 1967 SC 868 - Sukhbir Singh and Ors. vs. Brij Pal Singh and Ors, AIR 1996 SC 2510 - Saradamani Kandappan vs. S.Rajalakshmi and Ors. AIR 2011 SC 3234 - Maula Bux vs. Union of India, 1969(2) SCC 554 - Shree Hanuman Cotton Mills and Anr. vs. Tata Air Craft Ltd., AIR 1970 SC 1986
Fact of the Case:
The plaintiff filed a suit seeking specific performance of an Agreement to Sell for a property in New Delhi. The defendant admitted the agreement but claimed the plaintiff failed to make the payment within the stipulated time. The defendant also counterclaimed for damages and sought to retain the advance payment.
Finding of the Court:
The court found that the Agreement to Sell was valid and enforceable. It held that time was not the essence of the contract. The court rejected the plaintiff's claim that the defendant had represented the property as commercial. It found the plaintiff was not ready and willing to perform the agreement and was not entitled to specific performance. The court also allowed the defendant to retain the advance payment but dismissed the counterclaim for damages.
Issues: Validity of Agreement, Time as Essence of Agreement, Defendant's Representation of Property, Plaintiff's Willingness to Perform, Specific Performance Entitlement, Forfeiture of Advance Payment, Damages Claim, Relief
Ratio Decidendi: The court emphasized the validity and enforceability of the Agreement to Sell, the non-essential nature of time in the contract, and the lack of evidence supporting the plaintiff's claim of the property's commercial use representation. It also highlighted the plaintiff's failure to demonstrate readiness and willingness to perform the agreement, leading to the denial of specific performance. The court allowed the defendant to retain the advance payment but rejected the counterclaim for damages.
Final Decision: The court dismissed the plaintiff's suit for specific performance and the defendant's counterclaim for damages. It allowed the defendant to retain the advance payment.
The maintainability of the recovery suit depends on several factors, including whether the suit was filed within the prescribed statutory period, whether the proper parties were involved, and whether the claim falls within the scope of recoverable amounts under the relevant law.
Based on the information provided, the suit appears to have been filed appropriately, and the claims are related to a breach of agreement, which generally falls within the realm of civil suits for recovery of dues or damages. If the suit was filed within the limitation period and the necessary procedural requirements were met, then the recovery suit would likely be maintainable (!) .
However, without specific details regarding the procedural aspects, such as whether the suit was filed within the limitation period or if the proper jurisdiction was chosen, a definitive conclusion cannot be reached. Generally, if these procedural requirements are satisfied, the recovery suit would be maintainable under civil law principles (!) .
In summary, based on the typical legal framework and the information available, the recovery suit appears to be maintainable provided it adheres to procedural and statutory requirements.
Jayant Nath, J.
1. The present suit is filed seeking a decree of specific performance of Agreement to Sell dated 28.10.2005 pertaining to property No.E-4, Kalkaji, New Delhi measuring 280 sq.yds. owned by the defendant. As per the Agreement to Sell the agreed sale/transfer price was Rs.3.60 crores. An amount of Rs.20 lacs was paid at the time of signing of the agreement by the plaintiff to the defendant. The Agreement further provided that an additional sum of Rs.1.10 crores will be paid to the defendant on demand by the defendant or within two weeks of the date of signing of the Agreement, whichever occurs earlier. The balance sum of Rs.2.30 crore was to be received by the defendant at the time of handing over the vacant physical possession of the property to the plaintiff within five months i.e. by 27.03.2006. Simultaneously the defendant was to sign and execute all relevant documents such as sale deed etc.
2. As per the plaintiff, at the time of the agreement there were a number of positive representations and claims made by the defendant regarding the utility and market value of the said property and that the plaintiff was given an impression that the user of the property was for commercial purposes as it was located on the main Kalkaji Road and that commercial user had been approved by the defendant by depositing all necessary charges under various ad hoc schemes of MCD and L&DO inasmuch as the defendant was running his Information Technology (IT) unit under the name and style M/s. Irish Infotech Pvt. Ltd. It is also stated that there was an understanding between the plaintiff and the defendant that the requisite documents like title deeds, completion certificate, and permission from MCD etc. would be handed over by the defendant before the next payment. It is further averred that the defendant thereafter did not show any inclination to conclude the transaction and kept on avoiding the issue of execution of the Sale Deed on one pretext or the other and also never handed over the requisite documents though it is averred that the plaintiff was always ready and willing and was possessed with sufficient funds to purchase the property in question. It is further stated that in the meantime prices of real estate were also on the rise and the same was also the reason for the reluctance of the defendant to conclude the deal.
3. The plaintiff thereafter issued a legal notice dated 09.03.2006 through his counsel to the defendant reiterating the above averments and seeking production of necessary permission from DDA/L&DO as regard the land use. The counsel for the defendant sent a reply on 18.03.2006 which denied the contentions and allegations of the plaintiff. It was denied in the notice that the defendant had at any stage made any representation stating that the property in question can be used as commercial. It was further reiterated that there are also no such terms in the Agreement to Sell dated 28.10.2005 between the parties. It was averred that as the plaintiff has failed to make necessary payment in terms of the Agreement, the plaintiff is now coming up with false and concocted pleas. It was also pointed out that the plaintiff is a builder and developer by profession dealing in real estate and cannot make false contentions relating to issues which are available in public records inasmuch as the Master Plan of Delhi is a public document and the plaintiff cannot claim user contrary to the Master Plan.
4. The plaintiff thereafter sent a second legal notice on 24.09.2007. Counsel for the defendant sent a reply on 3.10.2007. The present suit for specific performance was filed on 26.05.2008. The defendant has filed the written statement. In the written statement it is admitted that the defendant set up a professional I.T. unit in a small permissible portion of the ground floor of the house about 14 years ago. As the unit grew and there was not enough space available in the house, the defendant decided to shift his unit to
