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2018 Supreme(Del) 1496
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
ASHA ROHILLA - Appellant
Versus
PARAMPREET SINGH & ANR – Respondents
RFA 902 of 2016 & CM APPL. 19098 of 2017
Decided on : 04-07-2018
For the Respondent:Mr. S.S. Bhatia & Mr. Naveen Arya, Advocates
Readiness and willingness to perform a contract must be determined from the conduct of the parties.
Headnote:
Specific Performance - Agreement to Sell - 1.01.2005 - 35, 36, 18% - The court discussed the Agreement to Sell dated 1st January, 2005, the payment of earnest money, extensions of the agreement, and the readiness and willingness of the Plaintiff to perform the contract. The court highlighted the Plaintiff's demonstration of availability of funds, the Defendants' failure to inform about the settlement with HSBC Bank, and the baseless plea regarding stamp papers.
Fact of the Case:
The Plaintiff sought specific performance of an Agreement to Sell for a property. The Defendants failed to execute the sale deed despite repeated extensions and the Plaintiff's readiness and willingness to perform the contract.
Finding of the Court:
The Defendants were in breach of the Agreement to Sell, and the Plaintiff was ready and willing to perform her part of the contract. The Defendants were liable to pay double the amount of earnest money as per the Agreement to Sell.
Issues: The issues included whether time was the essence of the contract, which party was guilty of breach, the Plaintiff's readiness and willingness to perform the contract, the Defendants' entitlement to forfeit the earnest money, and the Plaintiff's entitlement to specific performance.
Ratio Decidendi: The Plaintiff's conduct demonstrated readiness and willingness, and the Defendants failed to prove lack of readiness and willingness on behalf of the Plaintiff. The Defendants' silence and failure to communicate the forfeiture of the amount indicated lack of bonafides.
Final Decision: The Defendants were decreed to pay the Plaintiff a sum of Rs.16 lakhs along with interest at 12% from the date of the legal notice. The appeal was allowed, and status quo was to be maintained in respect of the suit property until the payment was made.
Prathiba M. Singh, J.
1. In this appeal, the Plaintiff/Appellant (hereinafter ‘Plaintiff’) challenges the judgment/decree dated 9th September, 2016 by which the suit for specific performance filed by her was dismissed and a decree of refund of the earnest money paid has been granted in the following terms :
“35. Admittedly, defendants have received a sum of Rs.8 Lacs from the plaintiff. Admittedly, sum of Rs.5 lacs was received by defendants on 01.01.2005. Further, a sum of Rs.3 lacs was received by defendants from the plaintiff on 07.09.2005.
36. As noted in decision on issue no.4, it has been submitted by defendants in written submissions that defendants are willing to refund the said advance/earnest money to plaintiff, on such terms as the Court may deem proper. In view of this stand of defendants, they are directed to refund the sum of Rs. 8 lacs to the plaintiff.
Plaintiff is entitled to interest @ 18% per annum on the amount of Rs.8 lacs i.e. w.e.f. 01.01.2005 on Rs. 5 lacs and w.e.f. 07.09.2005 on Rs.3 lacs, till realization.”
2. The case in brief of the Plaintiff is that she entered into an Agreement to Sell dated 1st January, 2005 in respect of property bearing no.226, Raja Garden, New Delhi including the entire Ground Floor without roof rights along with proportionate rights of the land beneath the building with common rights for use of stair case, passage and gate and other common facilities (hereinafter ‘suit property’). The total consideration agreed was Rs.31 lakhs. The salient terms and conditions of the agreement are as under:
“AND WHEREAS first party have agreed to sell and the second party has agreed to purchase the above said ENTIRE GROUND FLOOR WITHOUT ROOF/TERRACE RIGHTS, out of built up property bearing No.226, situated at Raja Garden, New Delhi, along with proportionate rights of the land measuring 221.2/9sq.yds., beneath the said building, with common rights of staircase passage, and gate, and all other common facilities of the said building, with all rights and titles thereto, for a sum of Rs.31,00,000/- (Rs. Thirty One Lacs Only), out of which the first party have received a sum of Rs.5,00,000/- (Rs. Five Lacs Only) from the second party being the earnest money of sale proceeds and the receipt of which the first party hereby acknowledges.
That within one hundred fifty days from the date of execution of this agreement, the first party shall execute sale document and to have the same registered in favour of the second party or his nominees on receipt of the balance consideration amount of Rs.26,00,000/-(Rs. Twenty Six Only), before the Sub-Registrar Delhi.
That the first party shall deliver the vacant physical possession of the said property at the time of execution of this agreement.
That all the expenses of stamp papers, registration fee etc. shall be paid by the second party.
…
That the said property is mortgaged to the bank and its original documents are in the bank. Before the registration of the sale deed the first party shall hand over the documents to the second party after clearance from the bank. …
That in case the first party backs out from the said transaction on any grounds then they will pay the double amount of earnest money to the second party or second party will get the transaction completed through court of law by specific performance of suit.
That in case the second party backs out from the said transaction, on any ground, then his earnest money shall stand forfeited in favour of the first party. That this deal has been done through Arora Properties at Bali Nagar, New Delhi, each party will 2% commission to the property dealer and defaulter will pay both side commission.”
3. The Plaintiff paid a sum of Rs.5 lakhs as earnest money on 1st January, 2005. The parties further agreed that the sale deed would be executed within three months. The Plaintiff’s case is that the property was mortgaged with HSBC bank and Defendants had assured the Plaintiff that the original title deeds which were lyin
