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2020 Supreme(Del) 1231
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Sahai Endlaw, J.
Al-faheem Meatex Pvt Ltd - Appellant
Versus
Mohd Yunus & Ors. - Respondent
Civil Suit (Os) No. 72 of 2019
Decided On : 07-01-2020
Amit Saxena, Advocate, Asim Naeem, Advocate, Sidharth Jalta, Advocate, Bhuvan Gugnani, Advocate, Samrath Rekhi, Advocate, Lakshay Ambauta, Advocate, Manish Sharma, Advocate, Kirish Gandhi, Advocate, Ninad Dogra, Advocate
The main legal point established in the judgment is that for a claim of specific performance, there must be privity of contract and ownership of the property at the time of the agreement. The court's decision was influenced by the lack of privity of contract and ownership, leading to the dismissal of the specific performance claim.
Headnote:
Specific Performance - Property Dispute - Transfer of Property Act, 1882 - Sections 53A, 12 - The court dismissed the claim for specific performance of an oral agreement to sell a property due to lack of privity of contract and ownership at the time of the agreement. The plaintiff was granted a decree for recovery of Rs.1.60 crores with interest against defendant no.1 Mohd. Yunus.
Fact of the Case:
The plaintiff filed a suit for specific performance of an Agreement to Sell a property, claiming that the defendants had agreed to sell the property to the plaintiff. The defendants contested the suit, denying the existence of a valid agreement and ownership of the property at the time of the alleged agreement.
Finding of the Court:
The court found that the plaintiff failed to establish a valid agreement with the defendants for specific performance. It held that the plaintiff did not have privity of contract with all the defendants and that the property was not owned by the defendants at the time of the alleged agreement. The court dismissed the claim for specific performance but granted a decree for recovery of Rs.1.60 crores with interest against defendant no.1 Mohd. Yunus.
Issues: The main issue was whether the plaintiff was entitled to specific performance of the alleged oral agreement to sell the property. The court also considered the ownership of the property and the privity of contract between the parties.
Ratio Decidendi: The court held that the plaintiff failed to establish a valid agreement for specific performance and lacked privity of contract with all the defendants. It also found that the property was not owned by the defendants at the time of the alleged agreement, leading to the dismissal of the specific performance claim. However, the court granted a decree for recovery of Rs.1.60 crores with interest against defendant no.1 Mohd. Yunus.
Final Decision: The court dismissed the claim for specific performance of the Agreement to Sell but granted a decree for recovery of Rs.1.60 crores with interest against defendant no.1 Mohd. Yunus.
JUDGMENT
Rajiv Sahai Endlaw, J. - The plaintiff, on 19th January, 2019 instituted (re-filed on 30th January, 2019 and 1st February, 2019) this suit against Mohd. Yunus and M.N. Buildcon Pvt. Ltd. (MNBPL), for specific performance of an Agreement to Sell the property bearing No.15, Jaipur Estate, Nizamuddin East, New Delhi, pleading that (i) Mohd. Yunus and MNBPL were the joint owners of the property; (ii) the plaintiff and the defendants have been personally known to each other for a long time; (iii) Mohd. Yunus and MNBPL represented to the plaintiff that they were intending to sell the property; (iv) the plaintiff enquired from Mohd. Yunus and MNBPL regarding any pending litigations / disputes with respect to the said property and to which Shailender Nigam, Director of MNBPL replied that due to the active role and intervention of Mohd. Yunus, all pending disputes / litigations relating to the property had been sorted out and the property was free from any encumbrances and that Mohd. Yunus and MNBPL jointly owned the property; (v) the plaintiff enquired from Mohd. Yunus and MNBPL the price of the property and after negotiations, the parties agreed to fix a sale price of Rs.16 crores, out of which Rs.6 crores was payable to Mohd. Yunus and the balance Rs.10 crores to MNBPL; (vi) the plaintiff agreed to purchase the property for the said price and further agreed to pay a sum of Rs.1.60 crores as advance towards the same; (vii) on enquiry by the plaintiff from Mohd. Yunus and MNBPL as to in whose name the payment hadto be made, there was huge discussion between Mohd. Yunus and MNBPL and after deliberation, the Director of MNBPL asked the plaintiff to make the entire advance payment to Mohd. Yunus as MNBPL did not want to incur any tax liability before the financial year ending 31st March, 2016; (viii) MNBPL also asked for payment of Rs.7.50 crores out of Rs.10 crores, being its share of the sale consideration, through Real-Time Gross Settlement (RTGS) /National Electronic Funds Transfer (NEFT) and the balance payment of Rs.2.50 crores in cash; (ix) Mohd. Yunus and MNBPL also agreed to handover a portion of the property to the plaintiff; (x) the plaintiff, in good faith, on 22nd January, 2016 paid the advance money of Rs.1.60 crores as per the Agreement to Sell and took possession of a portion of the property in furtherance of the Oral Agreement entered into between the parties and which portion remains in possession of the plaintiff; (xi) Mohd. Yunus and MNBPL did not come forward and execute the Sale Deed in favour of plaintiff and kept avoiding the same on one pretext or the other; (xii) in OctoberNovember, 2017, the plaintiff learnt that Mohd. Yunus and MNBPL, with mala fide intention to cheat and defraud the plaintiff, had filed a suit for partition being CS(OS) No.598/2016 in this Court, against each other; (xiii) the plaintiff applied for impleadment in the said suit for partition and which application was pending; (xiv) thereafter the parties sat together to negotiate for a settlement but no settlement could fructify; (xv) the plaintiff has always been ready and willing to pay the remaining sale consideration of Rs.14.40 lacs to Mohd. Yunus and MNBPL and to perform its other obligations; and, (xvi) Mohd. Yunus and MNBPL are liable to specifically perform the Agreement.
2. The suit aforesaid, unaccompanied with any application for interim relief, came up for admission before the Joint Registrar of this Court on 4th February, 2019, when summons thereof were ordered to be issued.
3. The defendant no.2 MNBPL, on receipt of summons of this suit, filed IA No.4566/2019 for tagging of the present suit along with CS(OS) No.598/2016 supra titled "Shailendra Nigam & Anr. Vs. Mohd Yunus" and denying each and every averment in the plaint and pleading the present suit to have been filed in collusion with Mohd. Yunus. It was further pleaded in the said application, that the owners of the property were Shailendra Nigam, Deepti Nigam and Mo
