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2016 Supreme(Del) 587
IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J.MEHTA, J.
SOBHAG NARAIN MATHUR - Plaintiff
Versus
PRAGYA AGRAWAL AND ORS. - Defendants
CS(OS) No.176/2007
Decided on : 4.2.2016
Advocate Appeared:
Mr. Aman Lekhi, Senior Advocate with Mr. Arjun Harkauli, Advocate and Mr. Satyawan Shekhawat, Advocate.
Mr. Pradip Diwan, Senior Advocate with Mr. Vikas Mahajan, Advocate, Mr. Deshraj, Advocate, Mr. Davender Kaushik, Advocate, Mr. Rohan Gupta, Advocate and Mr. S.S. Rai, Advocate.
Headnote:
SPECIFIC PERFORMANCE - AGREEMENT TO SELL - SUIT FOR - DOCUMENT DATED 7TH DECEMBER, 2006 - WHETHER CONSTITUTES AN AGREEMENT TO SELL - INTERPRETATION OF DOCUMENT - ESSENTIAL INGREDIENTS OF AN AGREEMENT TO SELL - PAYMENT OF PRICE - MODE AND MANNER OF PAYMENT - UNCERTAINTY - COURT'S ANALYSIS AND CONCLUSION - SUIT DISMISSED.
Fact of the Case:
Plaintiff filed a suit for specific performance of an agreement to sell, relying on a document dated 7th December, 2006, which was claimed to be a complete agreement to sell. The defendants contended that the document was not a complete contract, and that the plaintiff was not ready and willing to perform his part of the contract. The court framed issues to determine whether the document constituted an agreement to sell, whether the defendants were entitled to forfeit the part payment of Rs.20 lacs, and whether the plaintiff was entitled to specific performance of the document.
Finding of the Court:
The court held that the document dated 7th December, 2006 was not a complete contract, and that there was no final and binding contract between the parties. The court found that the document specifically stated that a proper agreement would be entered into only upon receipt of an additional amount of Rs.42 lacs, and that the parties intended to enter into a formal agreement. The court also found that the document lacked the finality required for it to be binding in law, as it did not specify the mode and manner of payment of the price, and the dates thereof.
Issues: 1. Whether document dated 7th December, 2006 titled as ‘Bayana Receipt’ does not constitute an Agreement to Sell? If so, its effect? 2. Whether the defendants are entitled to forfeit the part payment of Rs.20 lacs as alleged in the written statement? 3. If issue No.1 & 2 are decided in the negative, whether plaintiff is entitled to specific performance of the document dated 7th December, 2006 with all consequential benefits?
Ratio Decidendi: The court held that an agreement to sell must contain certain essential ingredients, including the identity of the parties, the subject matter of the agreement, the total price, and the mode and manner of payment of the price. The court found that the document dated 7th December, 2006 lacked the finality required for it to be binding in law, as it did not specify the mode and manner of payment of the price, and the dates thereof. The court also found that the parties intended to enter into a formal agreement, and that the document was only a receipt for the part payment of Rs.20 lacs.
Final Decision: The court dismissed the suit for specific performance, holding that there was no final and binding contract between the parties, and that the document dated 7th December, 2006 did not constitute an agreement to sell.
VALMIKI J. MEHTA, J (ORAL)
1. This is a suit for specific performance filed by the plaintiff Sh. Sobhag Narain Mathur who is the proposed purchaser. Defendant no.1 Smt. Pragya Agrawal, the owner of the suit property is the proposed seller. The subject matter of the agreement to sell as propounded by the plaintiff are four contiguous plots admeasuring 82.5 sq metrs each and situated in the Local Shopping Center, Madangir, New Delhi. The Agreement to Sell in question is a Receipt dated 7.12.2006 and which document as per the plaintiff is a complete agreement to sell as required by law hence entitling the plaintiff to specific performance on account of the plaintiff being ready and willing to perform his part of the contract and defendants breaching the contract contained in the Receipt-cum-Agreement to Sell dated 7.12.2006.
2. On behalf of the defendants, defendant no.2 being the husband of the owner/defendant no.1, signed the Receipt dated 7.12.2006. The stand of the defendants is that the document being the Receipt dated 7.12.2006 is not a complete contract, of an agreement to sell, in the eyes of law. There are also other issues raised by the defendants with respect to the plaintiff not being ready and willing to perform his part of the contract assuming that the Receipt dated 7.12.2006 is a contract as per law, as to who is guilty of breach of contract i.e. whether the plaintiff or the defendants, and as to whether the plaintiff is entitled to the discretionary relief of specific performance, but, in my opinion, decision on these issues are not called for in the facts of the present case in view of Order XX Rule 5 of the Code of Civil Procedure,1908 (CPC) and that the decision with respect to the first issue in the case; whether or not the Receipt dated 7.12.2006 is a complete contract as required in law for it to be an agreement to sell capable of being enforced through the subject suit for specific performance; is sufficient for disposal of the suit.
3. The following issues were framed by this Court on 14.11.2007:-
“1. Whether document dated 7th December, 2006 titled as ‘Bayana Receipt’ does not constitute an Agreement to Sell? If so, its effect? OPD.
2. Whether the defendants are entitled to forfeit the part payment of Rs.20 lacs as alleged in the written statement? OPD
3. If issue No.1 & 2 are decided in the negative, whether plaintiff is entitled to specific performance of the document dated 7th December, 2006 with all consequential benefits? OPP
4. Relief.”
Issue No.1
4. As stated above the first issue is being decided at the outset inasmuch as only if there is a complete contract in the eyes of law would there arise the issue of grant of specific performance.
5. Let me therefore reproduce, at this stage, the document dated 7.12.2006 which is relied upon by the plaintiff as being a complete contract in the eyes of law i.e the same is an agreement to sell as required by law capable of being specifically enforced by this Court. The original document dated 7.12.2006, Ex.P6/Ex.DW1/X is in vernacular language and I am reproducing the english translation of the same given by the plaintiff since basically there is no dispute that this is the correct english translation of the document dated 7.12.2006, the same reads as under:-
“BAYANA RECEIPT
DATE: 7.12.2006
I, Pragya Aggrawal w/o Sh. Manoj Agrawal, resigning at R/o 58A/4 Sainik Farms, New Delhi-110062. I have agreed to sell my plots no. A,B, C,D Local Shopping Centre, Madangir, area is 82.5 meters per plot, altogether 330 meter, approximately 400 guz, to S.N. Mathur, s/o Late Sh. Swarup Narainji Mathur r/o 152/10 Swarup Narain Mathur Marg Civil Lines Ajmer for a total consideration of Rs.6,20,00,000/- (Six crores, twenty lacs), I hereby acknowledge the acceptance of Rs.20 lacs in cash as bayana. The remaining payment of Rs.6 crores shall be paid by 15.2.2007. Instalments towards the same as part payment will be decided as per this agreement on the day of payment o
