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2018 Supreme(Del) 1757
IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J.MEHTA, J.
Ritu Saxena - Appellant
Versus
J.S. Grover and Another - Respondents
RFA No.518 of 2018
Decided On : 17-07-2018
For the Appellant :Mr. Mandeep Singh Vinaik, Advocate with Ms. Anjali Sharma, Advocate, Mr. Deepak Bashta, Advocate and Mr. Manish Lamba, Advocate.
For the Respondents:Mr. Dalip Mehra, Advocate.
Headnote:
SPECIFIC PERFORMANCE - AGREEMENT TO SELL - READINESS AND WILLINGNESS - FINANCIAL CAPACITY - DISCRETIONARY RELIEF - SPECIFIC PERFORMANCE DENIED: 1. A proposed buyer is not entitled to specific performance of an agreement to sell if the buyer has not proved readiness and willingness to perform the contract, including having the financial capacity to pay the balance sale consideration. 2. The grant of specific performance is a discretionary remedy, and the court may decline to grant specific performance even if the buyer has proved readiness and willingness, if the court finds that the balance sale consideration is insufficient to enable the seller to purchase an equivalent property. 3. In the present case, the buyer paid only 2% of the total sale price and failed to prove financial capacity to pay the balance sale consideration. The court also found that the balance sale consideration was insufficient to enable the seller to purchase an equivalent property. Therefore, the court declined to grant specific performance.
Fact of the Case:
The appellant/plaintiff entered into an Agreement to Sell with the respondent no.1/defendant no.1 for the purchase of a property for Rs.50 lacs. The appellant/plaintiff paid Rs.1 lakh as earnest money and was put in possession of the property. The appellant/plaintiff's husband was an employee of a company that had taken the property on lease from the respondents/defendants. After the Agreement to Sell was entered into, the lease was extended for 11 months ending on 30.7.2005. The appellant/plaintiff claimed that she had spent Rs.5 lacs on renovation and repairs of the property. The respondents/defendants refused to complete the sale transaction and filed a suit for possession against the appellant/plaintiff and her husband. The respondents/defendants were successful in the suit for possession and obtained a decree for possession, which was upheld by the Apex Court.
Finding of the Court:
The court found that the appellant/plaintiff had failed to prove her readiness and willingness to perform the contract, including having the financial capacity to pay the balance sale consideration. The court also found that the balance sale consideration was insufficient to enable the seller to purchase an equivalent property. Therefore, the court declined to grant specific performance.
Issues: 1. Whether the appellant/plaintiff had proved her readiness and willingness to perform the contract, including having the financial capacity to pay the balance sale consideration? 2. Whether the balance sale consideration was sufficient to enable the seller to purchase an equivalent property? 3. Whether the court should grant specific performance in the present case?
Ratio Decidendi: 1. A proposed buyer is not entitled to specific performance of an agreement to sell if the buyer has not proved readiness and willingness to perform the contract, including having the financial capacity to pay the balance sale consideration. 2. The grant of specific performance is a discretionary remedy, and the court may decline to grant specific performance even if the buyer has proved readiness and willingness, if the court finds that the balance sale consideration is insufficient to enable the seller to purchase an equivalent property.
Final Decision: The appeal was dismissed with costs of Rs.50,000/- payable by the appellant to the respondents within six weeks from the date of the judgment.
VALMIKI J. MEHTA, J.
Caveat No.614/2018
1. Counsel appear for the caveators. Caveat accordingly stands discharged.
C.M. No.27008/2018(exemption)
2. Exemption allowed subject to just exceptions.
C.M. stands disposed of.
RFA No.518/2018 and C.M. No.27007/2018(stay)
3. This Regular First Appeal under Section 96 of Code of Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit impugning the judgment of the Trial Court dated 28.2.2018 whereby trial court has dismissed the suit for specific performance filed by the appellant/plaintiff of the Agreement to Sell dated 18.7.2004 with respect to the apartment bearing no.272, ground floor, Gulmohar Enclave, New Delhi-110049. Trial court has however passed a money decree in favour of the appellant/plaintiff and against the respondents/defendants for the amount of Rs.1 lakh along with interest @ 15% per annum, paid by the appellant/plaintiff/buyer to the respondents/defendants/sellers under the Agreement to Sell.
4. The facts of the case are that the appellant/plaintiff and the respondent no.1/defendant no.1 entered into an Agreement to Sell dated 18.7.2004 with respect to the suit property which was jointly owned by both the respondents/defendants who are husband and wife. The total sale price was fixed at Rs.50 lacs of which an amount of Rs.1 lakh was paid by the appellant/plaintiff to the respondents/defendants on the date of entering into of the Agreement to Sell. The suit premises was already in possession of the appellant/plaintiff as appellant’s husband was an employee of the company M/s GE Capital Services India Ltd and M/s GE Capital Services India Ltd had taken the suit premises on lease from the respondents/defendants for the residence of appellant’s husband. The monthly rent of the suit premises was Rs.13,000/- per month as per the lease commencing on 1.9.2002. Appellant/plaintiff claimed that pursuant to the Agreement to Sell the appellant/plaintiff was put in possession of the suit property and that the appellant/plaintiff has spent a sum of Rs.5 lacs towards decoration and renovation of the suit property and conducting extensive repairs. Pleading that the respondents/defendants deliberately was avoiding to complete the transaction and was intending to sell the suit property to another person, a Legal Notice dated 19.4.2005 was sent to the respondents/defendants to complete the transaction. The respondents/defendants replied to the same vide Reply dated 27.4.2005. It was pleaded by the appellant/plaintiff that she had been at all time ready and willing to perform the subject Agreement to Sell, and therefore, the suit for specific performance be decreed. It was also pleaded that the appellant/plaintiff had got the requisite loan sanctioned from M/s ICICI Home Finance Company Ltd.
5. Suit was contested by the respondents/defendants. They filed their separate written statements. In the written statement of the respondent no.1/defendant no.1, the fact that the Agreement to Sell was entered into as also receipt of Rs.1 lakh, was admitted, and it was also admitted that the suit property was on lease from September, 2002 to M/s GE Capital Services India Ltd at rent of Rs.13,000/- per month for the residence of the husband of the appellant/plaintiff. It was pleaded by the respondent no.1/defendant no.1 that his wife was the co-owner of the suit property and since she was not a party to the Agreement to Sell, the suit for specific performance did not lie. It was denied that the appellant/plaintiff was put in possession of the suit property pursuant to the Agreement to Sell and that no such fact is therefore mentioned in the subject Agreement to Sell and this was also never so agreed otherwise. It was also denied that the appellant/plaintiff spent a sum of Rs.5 lacs on renovation/repair of the suit property. It was also denied that M/s ICICI Home Finance Company Ltd had sanctioned a loan of Rs.45 lacs to the appellant/plaintiff as the sanction was subject to the appellant/pl
