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IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J.MEHTA, J.
DR. S.P. JINDAL AND OTHERS - Plaintiffs
Versus
FRIEIDRICH EBERT STIFTUNG - Defendant
CS(OS) Nos. 51/2006 & 2279/2006
Decided On : 28.07.2015
Specific Performance - Agreement to Sell - Clauses 1, 2, 3, 4, 5, 9, and 10 - Time of performance ceased to be of the essence after complete sale consideration was received by the proposed seller - Proposed buyer entitled to specific performance - Proposed seller not entitled to cancel the Agreement to Sell or claim possession or mesne profits - Proposed buyer to pursue case before RBI for obtaining necessary permission - CS(OS) No. 2279/2006 decreed, CS(OS) No. 51/2006 dismissed
Fact of the Case:
Two suits were consolidated by the court. The first suit was filed by the landlord seeking back possession of the property and mesne profits. The second suit was for specific performance filed by the tenant seeking execution of the sale deed. The Agreement to Sell was dated 1.11.2004, and the complete sale consideration was received by the proposed seller on 28.2.2005.
Finding of the Court:
The court held that time of performance ceased to be of the essence after the complete sale consideration was received by the proposed seller. The proposed buyer was entitled to specific performance, and the proposed seller was not entitled to cancel the Agreement to Sell or claim possession or mesne profits. The proposed buyer was directed to pursue its case before RBI for obtaining necessary permission.
Issues: The issues included whether time was the essence of the contract, whether the parties had deleted a clause in the original agreement, and whether the purported signatures of the proposed seller on an amendment agreement were forged and fabricated.
Ratio Decidendi: The court held that time of performance ceased to be of the essence after the complete sale consideration was received by the proposed seller. The proposed buyer was entitled to specific performance, and the proposed seller was not entitled to cancel the Agreement to Sell or claim possession or mesne profits.
Final Decision: CS(OS) No. 2279/2006 was decreed, and CS(OS) No. 51/2006 was dismissed. The proposed buyer was entitled to specific performance, and the proposed seller was not entitled to cancel the Agreement to Sell or claim possession or mesne profits.
VALMIKI J. MEHTA, J.
1(i). Two suits are being decided by the present judgment. The suits were consolidated by the Order of this Court dated 28.4.2009 in CS(OS) No.51/2006 when issues were framed. The first suit being CS(OS) No.51/2006 is a suit filed by the landlord/proposed seller under the Agreement to Sell dated 01.11.2004. By this suit, the landlord/proposed seller seeks back possession of the suit property bearing no. K-70B, Hauz Khas Enclave, New Delhi-110016 and also mesne profits at Rs.2.50 lacs per month from 1.7.2005. The suit is predicated on the cause of action that the Agreement to Sell dated 1.11.2004 no longer binds the landlord/proposed seller and consequently the proposed buyer/tenant having no rights of a lessee in the suit premises, should handover possession of the suit premises back. The landlord/proposed seller is Dr. Shiv Pal Jindal. The proposed buyer/tenant is a German NGO, M/s. Friedrich Ebert Stiftung. For completion of narration, it may be stated that though it was only Dr. Shiv Pal Jindal who was the owner of the suit property, landlords of the suit property were three in number i.e Dr. Shiv Pal Jindal, his HUF and Dr. Ms. Vijya Laxmi Jindal (wife of Dr. Shiv Pal Jindal).
(ii) The second suit, CS(OS) No.2279/2006 is a suit for specific performance filed by the tenant/proposed buyer seeking specific performance of the Agreement to Sell dated 1.11.2004. Proposed buyer/tenant seeks the execution of sale deed in its favour of the suit property from Dr. Shiv Pal Jindal.
2. If the suit for specific performance filed by M/s Friedrich Ebert Stiftung is decreed, then, automatically the suit for possession filed by the proposed seller/landlord would have to be dismissed. Putting it in another way, landlords being the plaintiffs in CS(OS) No.51/2006 can only succeed if M/s Friedrich Ebert Stiftung fails in its suit for specific performance.
3. The Agreement to Sell between the parties, Ex. P1, is dated 1.11.2004 and is an admitted document i.e there is no dispute that the parties entered into the same. Under this Agreement to Sell, sale consideration was fixed at Rs.2.30 crores. A sum of Rs.1 lakh was given to the proposed seller at the time of entering into the Agreement to Sell and balance sale consideration of Rs.2.29 crores was to be payable at the time of execution and registration of the sale deed, and for which a period of two months was fixed. This period of two months was extendable for another period of two months. Within this period, the proposed buyer had to take permission of the requisite authorities to buy the suit property; essentially being the RBI/Government of India; inasmuch as proposed buyer is not an Indian national but is a German NGO. Some of the relevant clauses of this Agreement to Sell, and which would be material for determination of the suits are Clauses 1, 2, 3, 4, 5, 9 and 10 of the Agreement to Sell, and these clauses read as under:-
“1. The Vendor agrees to sell and subject to clear and marketable title being established to the satisfaction of the PURCHASER, and the other terms and conditions set out in this Agreement. The PURCHASER agrees to purchase the aforesaid schedule property for a total consideration of Rs.2,30,00,000/- (Rupees Two crore and thirty lakhs only) free from all encumbrances.
2. As part of the sale consideration, the Purchaser, has at the time of execution of this Agreement, paid to the Vendor a sum of Rs.100,000/- (Rupees one lakh). The Vendor has delivered to the Purchaser certified copies of the title documents of the Property to the Purchaser in consideration of the Purchaser entering into this agreement and paying a sum of Rs.100,000/- as stated above. The title documents comprise of the following:
Sale deed (Old, notarised photocopy)
Partition deed
Court order
Mutation Order
Sanction letters and plans (notarised photocopy)
3. The Purchas
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