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IN THE HIGH COURT OF DELHI AT NEW DELHI
Amit Bansal, J.
G.G. Constructions Pvt. Ltd. - Appellant
Versus
Bikramjit Singh & Ors. - Respondents
CS(Comm) 70/2022
Decided On : 17-08-2022
Interim Injunction - Agreement to Sell - Code of Civil Procedure, 1908 - [INTERIM INJUNCTION] - [SPECIFIC PERFORMANCE OF AGREEMENT TO SELL] - [Order XXXIX Rule 1 and 2 of CPC] - [Summary of the acts and sections referenced and discussed by the court: The court discussed the relevant clauses of the Agreement to Sell and the obligations of the parties under the Code of Civil Procedure, 1908. The court also referred to the judgment of the Supreme Court in Panchanan Dhara v. Monmatha Nath Maity, (2006) 5 SCC 340, and U.N. Krishnamurthy v. A.M. Krishnamurthy, (2022) SCC OnLine SC 840, to interpret the obligations of the parties and the principles of specific performance of an Agreement to Sell. The court's decision was influenced by the interpretation of the Agreement to Sell and the legal principles established in the referenced judgments.]
Fact of the Case:
The plaintiff filed an application seeking interim injunction to restrain the defendants from creating third party rights in respect of a property covered by an Agreement to Sell. The plaintiff claimed specific performance of the Agreement to Sell, while the defendants argued that the agreement was terminated and the property's value had increased significantly.
Finding of the Court:
The court found that the plaintiff had made a prima facie case for grant of interim injunction based on the Agreement to Sell and the defendants' obligations. The court also noted that the plaintiff had shown readiness and willingness to perform the agreement, and that the defendants' delay in removing the lien of the property was a factor in the increased market value.
Issues: The issues revolved around the enforceability of the Agreement to Sell, the identification of the property covered by the agreement, and the parties' readiness and willingness to perform their obligations.
Ratio Decidendi: The court held that the plaintiff had demonstrated readiness and willingness to perform the Agreement to Sell, and that the defendants' delay in removing the property's lien contributed to the increased market value. The court also emphasized the principles of specific performance of an Agreement to Sell as established in the referenced judgments.
Final Decision: The court granted an interim injunction in favor of the plaintiff, restraining the defendants from disposing of the property or creating third party rights until the disposal of the suit.
JUDGMENT
I.A. 1534/2022(O-XXXIX R-1 & 2 of CPC)
1. By way of the present judgement, I shall decide the application filed on behalf of the plaintiff under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure, 1908 (CPC) seeking interim injunction to restrain the defendants from creating third party rights in respect of 500 square feet of the ground floor and 2,000 square feet of the basement and the undivided share in the land of Plot No. 8E, Rani Jhansi Road, Jhandewalan Extension, New Delhi admeasuring 597 square yards along with the building standing thereon admeasuring 16,000 square feet (suit property).
2. Notice in this application was issued on 20th January, 2022 and was accepted in Court by the counsel appearing on behalf of the defendants.
3. Subsequently, vide order dated 12th April, 2022, amendment application filed on behalf of the plaintiff was allowed and the amended plaint was taken on record. Written statement has been filed on behalf of the defendants.
4. The present suit was filed seeking specific performance of the Agreement to Sell dated 15th July, 2008 (Agreement to Sell) in respect of the suit property.
5. Brief facts leading to the filing of the present suit are as under:
i. The plaintiff entered into an Agreement to Sell with the defendants no.1 to 4 and Late Sh. Tejvir Singh, predecessor-in-interest of the defendants no.5 to 8 in respect of the suit property.
ii. In terms of the Agreement to Sell, the total consideration fixed was Rs.1,80,00,000/-, out of which Rs.40,00,000/- was paid at the time of signing of the agreement.
iii. The second payment of Rs.50,00,000/- was to be paid on issuance of settlement letter by the Punjab & Sind Bank and balance amount of Rs. 90,00,000/- was payable upon removal of lien of Punjab & Sind Bank on the said property by the defendants with the conveyance deed being simultaneously executed and registered. The said lien of Punjab & Sind Bank on the suit property was duly acknowledged in the Agreement to Sell.
iv. On 4th November, 2008, Late Sh. Tejvir Singh, on behalf of himself and the defendants no.1 to 4, executed four Lease Agreements with the plaintiff in respect of different portions of the entire property, being Plot No. 8E, Rani Jhansi Road, Jhandewalan Extension, New Delhi.
v. The plaintiff came into possession of the aforesaid portions of the property (rented premises) by way of the Lease Agreements being executed and continued to be in possession.
vi. Simultaneously, Maintenance Agreements were also executed between the parties in respect of the rented premises.
vii. An e-mail dated 18th November, 2020 was written by the defendant no.1 to the plaintiff in which a settlement letter dated 13th December, 2018 issued by Punjab & Sind Bank was attached. The said e-mail was immediately replied to by the plaintiff on 19th November, 2020, requesting the defendants to obtain NOC as per the conditions of the said settlement letter. There was no response from the defendants.
viii. Thereafter, the plaintiff came to know of the order dated 15th September, 2021 passed by the DRT, in terms of which the matter had been settled between the defendants and the Punjab & Sindh Bank.
ix. An e-mail dated 17th November, 2021 was written by the defendant no.6 to the plaintiff, wherein it was stated that the defendant no.1 is working on a solution and would visit India in February, 2022 and requested the plaintiff to wait till then. This was also confirmed by the defendant no.1 vide e-mail dated 18th November, 2021 addressed to the plaintiff.
x. A legal notice dated 23rd November, 2021 was also issued by the plaintiff, calling upon the defendants for specific performance of the Agreement to Sell. However, no response was received from the defendants.
6. The following submissions have been advanced on behalf of the plaintiff:
i. A sum of Rs.10,00,000/- was paid on 6th March, 2010 and Rs.40,00,000/- was paid on 5th April, 2010 by the plaintiff to the defendants towards the second payment under the Agree
AI
The main legal point established in the judgment is that readiness and willingness to perform an Agreement to Sell, as well as the obligations of the parties under the Agreement, are crucial factors ....
Doubt about the existence of a valid and binding agreement and the insignificance of the consideration paid by the plaintiffs disentitled them for grant of interim relief.
Time is not generally considered the essence of contracts for the sale of immovable property; however, specific circumstances may necessitate its strict enforcement. A valid agreement can only be mod....
The court emphasized the importance of proving continuous readiness and willingness to perform the contract, and the need to disclose financial capacity to fulfill payment obligations.
The delay in taking action after objections were raised, and the sale transaction to the new purchasers, did not warrant the grant of interim injunction.
It is well settled principle of law that in an appeal against the exercise of 'discretion' by Court of first instance, power of Appellate Court to interfere with exercise of discretion is restrictive....
(1) Merely because property is sold on lesser consideration then previous one, it does not ipso-facto make subsequent transaction illegal or malafide – Unregistered agreement to sell can be considere....
The main legal point established is the application of principles for granting interim injunctions, the interpretation of time as the essence of a contract, and the significance of fulfilling recipro....
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