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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, J.
Subhash Aggarwal - Appellant
Versus
Mahender Pal Chabra & Anr. - Respondents
Cs (Os)(Civil Suit (Os)) No. 1765 of 2008
Decided On : 15-02-2021
Plaintiff sought a decree of specific performance of an agreement to sell (ATS) immovable property. Defendant resisted the suit and offered to refund the earnest money. Plaintiff declined the offer. Trial court decreed specific performance in favor of the plaintiff. Defendant appealed.
Fact of the Case:
Plaintiff paid Rs. 60,00,000/- as earnest money and a further sum of Rs. 30,00,000/- was paid by him, in cash, to the defendants on 24.03.2008. The ATS envisaged the purchase of the suit property by the plaintiff. The sale consideration was pegged at Rs. 6,11,00,000/-. At the time of the execution of the ATS, the plaintiff paid Rs. 60,00,000/- to the defendants - which is, duly recorded in what is Clause 4 of the said agreement. The balance amount i.e. Rs. 5,51,00,000/- was payable by the plaintiff on or before 10.05.2008 or on the date when the relevant documents were executed by the defendants in the office of the concerned Sub-Registrar in favour of the plaintiff or his nominee with the added requirement of handing over the possession of the suit property by the aforementioned date. This condition stands incorporated in Clause 5 of the ATS. The defendants, on the other hand, were required to get the suit property converted from leasehold to freehold, and have the same mutated in their name by 10.05.2008. Clause 6 of the ATS made a provision, in this behalf, and also indicated, in no uncertain terms, that the final payment, which was the balance amount, indicated hereinabove, would be made only if the conversion of the suit property from leasehold to freehold and mutation was carried out by the defendants. The defendants were, thus, required to deliver original title documents concerning the suit property to the plaintiff at the time of either receipt of the final payment or registration of the sale deed in the office of the concerned Sub-Registrar.
Finding of the Court:
The court found that the plaintiff was ready and willing to perform his part of the obligation under the ATS. The court also found that the plaintiff had the necessary financial wherewithal to pay the balance consideration. The court further found that there was no evidence to support the defendants' claim that the ATS was modified by an oral agreement.
Issues: 1. Whether the plaintiff is entitled to specific performance of the ATS? 2. Whether the sum of Rs 30 lacs paid by the plaintiff to the defendant on 24.03.2008 was pursuant to an oral agreement of even date (i.e., 24.03.2008) arrived between the plaintiff and the defendants? If so to what effect? 3. Relief(s)
Ratio Decidendi: The court held that the plaintiff was entitled to a decree of specific performance. The court reasoned that the plaintiff had performed his part of the obligation under the ATS and that he was ready and willing to pay the balance consideration. The court also found that there was no evidence to support the defendants' claim that the ATS was modified by an oral agreement.
Final Decision: The court decreed specific performance in favor of the plaintiff and against the defendants qua the ATS. The plaintiff will pay the balance sale consideration amounting to Rs. 5,21,00,000/- at the time of registration of the sale deed before the concerned Sub-Registrar. Before the defendants execute the sale deed, they shall get the suit property mutated in their name and have the same converted from leasehold to freehold. In the event, the defendants fail to execute the sale deed concerning the suit property, in favour of the plaintiff, he will be entitled to get the sale deed executed by taking recourse to the provisions of Order XXI Rule 32 of the CPC. In such a situation, the balance sale consideration will be deposited by the plaintiff with the Registry of this Court. Before monies are released to the defendants', adjustment will be made in respect of expenses incurred towards mutation, conversion and other charges that they were required to incur, to pass on to the plaintiff, a good and clear title to the suit property. The cost will follow the result of the suit. A decree sheet will be prepared accordingly. The instant suit is disposed of in the aforesaid terms. The pending application(s) shall stand closed. The case papers will be consigned to record.
JUDGMENT
Rajiv Shakdher, J. - Preface: -
1. Via the instant action, the plaintiff, essentially, is seeking a judgement and decree of specific performance qua an immovable property located at C20, Ashok Vihar, Phase-I, Delhi - 110052 [hereafter referred to as, "suit property"].
1.1. The suit property ad-measures 300 sq. yds. The defendants have a leasehold interest in the suit property; the lessor being the Delhi Development Authority [in short 'DDA'].
1.2. The plaintiff has also sought alternate reliefs. First, that the earnest money is returned in terms of Clause 12 of the Agreement to Sell dated 22.01.2008 [hereafter referred to as, "ATS"]. In terms of this clause, the plaintiff has sought the return of twice the amount paid as earnest money i.e. Rs. 1,20,00,000/- (2 x Rs.60,00,000). Second, Rs. 30,00,000/- paid towards sale consideration be returned. Lastly, for issuance of direction for payment of interest on the abovementioned amounts at the rate of 18% per annum from the date the said amounts were paid to the defendants till the date of refund to the plaintiff.
1.3. The defendants have resisted the suit, although, in the course of the final hearing, their counsel offered a refund of the amount received by them, albeit, without interest. This offer was, however, not acceptable to the plaintiff.
Background facts: -
2. Thus, to adjudicate upon this suit, the following backdrop, which emerges from the pleadings and the record, is required to be noticed.
2.1. As noticed above, the ATS was executed between the parties on 22.01.2008. The ATS envisaged the purchase of the suit property by the plaintiff. The sale consideration was pegged at Rs. 6,11,00,000/-. At the time of the execution of the ATS, the plaintiff paid Rs. 60,00,000/- to the defendants - which is, duly recorded in what is Clause 4 of the said agreement. The balance amount i.e. Rs. 5,51,00,000/- was payable by the plaintiff on or before 10.05.2008 or on the date when the relevant documents were executed by the defendants in the office of the concerned Sub-Registrar in favour of the plaintiff or his nominee with the added requirement of handing over the possession of the suit property by the aforementioned date. This condition stands incorporated in Clause 5 of the ATS.
2.2. The defendants, on the other hand, were required to get the suit property converted from leasehold to freehold, and have the same mutated in their name by 10.05.2008. Clause 6 of the ATS made a provision, in this behalf, and also indicated, in no uncertain terms, that the final payment, which was the balance amount, indicated hereinabove, would be made only if the conversion of the suit property from leasehold to freehold and mutation was carried out by the defendants. The defendants were, thus, required to deliver original title documents concerning the suit property to the plaintiff at the time when final payment was made or at the time when the sale deed concerning the same was registered as per the provisions of Clause 7 of the ATS.
2.3. The failure by the plaintiff to pay the balance amount, that is, to comply with his part of the bargain triggered the right of the defendants to forfeit the amounts already paid in terms of Clause 12 of the ATS. In contrast, if the defendants failed to perform their part of the obligations, as captured in the ATS, the plaintiff could either demand the refund of twice the amount of the earnest money paid by him or sue for having the transaction completed by taking recourse to an action for specific performance.
2.4. Admittedly, apart from the Rs. 60,00,000/- paid by the plaintiff at the time of the execution of the ATS, a further amount of Rs. 30,00,000/- was paid by him, in cash, to the defendants on 24.03.2008. The defendants, inter alia, take the plea that there was an oral agreement arrived at between the plaintiff and the defendants [hereafter collectively referred
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