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2015 Supreme(Del) 2327
IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J.MEHTA, J.
HARVINDER PAL SINGH & ANR. - Plaintiffs
Versus
S.K. MUKHERJEE & ANR. - Defendants
CS(OS) No. 572/2006 & CS(OS) No. 380/2009
Decided on : 21st AUGUST, 2015
Mr. M. Dutta, Advocate
The main legal point established in the judgment is that a proposed buyer's readiness and willingness to perform the contract, along with the availability of means to make the payment, are crucial factors in granting specific performance. The court also emphasized the significance of substantial payments by the proposed buyer and the court's discretion to increase the sale price in specific performance suits.
Headnote:
specific performance - property dispute - Agreement to Sell - Specific Relief Act, 1963 - Section 20 - Section 20(3) - Nirmala Anand Vs. Advent Corporation (P) Ltd. And Other (2002) 8 SCC 146 - Nathulal Vs. Phoolchand (1969) 3 SCC 120 - Nehru Place Hotels Ltd. Vs. Kanta Aggarwal, 2011 (123) DRJ 148
Fact of the Case:
The case involved two suits, CS(OS) No. 572/2006 and CS(OS) No. 380/2009, concerning a property in New Delhi. The former was a suit for specific performance, while the latter was a counter suit by the proposed sellers seeking back possession of the property. The dispute centered around the Agreement to Sell dated 21.10.2004, the agreed sale consideration, and the alleged breach of contract by the proposed buyers and sellers.
Finding of the Court:
The court found that the proposed buyers had paid a substantial amount of the total sale consideration, approximately 70%, and were ready and willing to perform their part of the contract. The court held that the proposed sellers had not sent any legal notice or letter regarding the alleged breach of contract, indicating an understanding to extend the time for payment of the balance sale consideration. The court also noted the proposed buyers' financial capacity to make the payment and their efforts to ensure the availability of funds. The court decreed the suit for specific performance in favor of the proposed buyers and dismissed the counter suit by the proposed sellers.
Issues: The issues included determining the entitlement to specific performance, possession of the property, recovery of use and occupation charges, damages/compensation, and interest on the balance payment.
Ratio Decidendi: The court's decision was influenced by the interpretation of Section 20(3) of the Specific Relief Act, 1963, which favors granting specific performance when a proposed buyer has made substantial payments. The court also relied on the legal principle established in Nathulal Vs. Phoolchand (1969) 3 SCC 120, which states that a proposed buyer need not have liquidated moneys but must show availability of means for payment. Additionally, the court considered the judgment in Nirmala Anand Vs. Advent Corporation (P) Ltd. And Other (2002) 8 SCC 146, which allows courts to increase the sale price in suits for specific performance.
Final Decision: The court decreed the suit for specific performance in favor of the proposed buyers, directing the proposed sellers to execute the Sale Deed of the property. The proposed buyers were required to deposit the balance payment with interest, and upon deposit, the proposed sellers were to execute the Sale Deed. The court also dismissed the counter suit by the proposed sellers and left the parties to bear their own costs.
VALMIKI J. MEHTA, J (ORAL)
1. Two suits are being disposed of by the present judgment, being CS(OS) No. 572/2006 and CS(OS) No. 380/2009. The 2006 suit is a suit for specific performance. The suit of 2009 is a counter suit by the proposed sellers seeking back possession of the property which was agreed to be sold in terms of the Agreement to Sell dated 21.10.2004. It is conceded before me on behalf of the plaintiffs/proposed sellers in the 2009 suit namely Sh. S.K. Mukherjee and Smt. Neelam Mukherjee that if the 2006 suit is decreed, then automatically the 2009 suit would stand dismissed. The proposed purchasers under the Agreement to Sell dated 21.10.2004 are Sh. Harvinder Pal Singh Dua and Smt. Harjinder Kaur, and who are the plaintiffs in CS(OS) No. 570/2006. In this suit the defendants are Sh. S.K. Mukherjee and Smt. Neelam Mukherjee, who are proposed sellers under the Agreement to Sell dated 21.10.2004, and they are the plaintiffs in CS(OS) No. 380/2009. The Agreement to Sell is with respect to ground floor and first floor of the property bearing no.8/70, Punjabi Bagh (West), New Delhi-110 026 (hereinafter referred to as the ‘suit property’). The sale consideration fixed under the Agreement to Sell dated 21.10.2004 is a sum of Rs.91,51,000/- (Rupees ninety one lac and fifty one thousand only).
2. These two matters were on the ‘Finals’ Board of this Court since 29.06.2015. Yesterday when the matters were heard, the matters were effective item nos.1 and 2 on the ‘Finals’ Board. Since no one appeared for the proposed buyers being plaintiffs in CS(OS) No. 572/2006, I heard the counsel for the defendants/proposed sellers, Sh. S.K. Mukherjee and Smt. Neelam Mukherjee. I have also gone through the entire record with the assistance of the counsel for the proposed sellers being defendants in CS(OS) No. 572/2006. Since there was no time yesterday to dictate the judgment on account of a Full Court Reference, the matters were adjourned to today for dictating the judgment.
3. The facts of the case are that the parties admittedly entered into the Agreement to Sell on 21.10.2004 with respect to the suit property. It is also admitted that the agreed sale consideration was Rs.91,51,000/- (Rupees ninety one lacs and fifty one thousand only) and out of which amount, a sum of Rs. 10,21,000/- (Rupees ten lacs and twenty one thousand only) was paid by the proposed buyers to the proposed sellers on 21.10.2004 (receipt Ex.PW-1/2/Ex.PW1/2). It is also the agreed position that thereafter three payments were made by the proposed buyers to the proposed sellers; Rs.25,30,000/- (Rupees twenty five lacs and thirty thousand only) on 30.11.2004 (receipt Ex.P-5/Ex.PW-1/6), Rs.15,00,000/- (Rupees fifteen lacs only) on 03.01.2005 (receipt Ex.P-3/Ex.PW-1/4) and another sum of Rs.15,00,000/- (Rupees fifteen lacs only) which as per the proposed buyers was paid on 11.03.2005, whereas, the proposed sellers say that this payment of Rs.15 lacs was made but actually the date of payment was of 01.03.2005 and not 11.03.2005 inasmuch as the numerical ‘1’ before 1.3.2005 has been added to the date of this document afterwards by the proposed buyers. This receipt of Rs.15 lacs is Ex.P-4/Ex.PW-1/5.
4. The dispute between the parties is as to who has committed breach of contract i.e whether the proposed buyers failed to pay the balance sale consideration of Rs.26 lacs as envisaged as per the payment date/period under the Agreement to Sell or it is that the proposed sellers refused to accept the balance sale consideration, and which is the case of the proposed buyers.
5. In the suit for specific performance filed by the proposed buyers CS(OS) No. 572/2006, issues were framed on 6.1.2010 and these issues read as under:-
“1. Whether the plaintiff is entitled to decree of specific performance directing the defendant to execute the sale deed of the Ground Floor a
