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IN THE HIGH COURT OF DELHI AT NEW DELHI
Neena Bansal Krishna, J.
Suresh Shah & Ors. - Appellants
Versus
Mrs. Sarita Gupta & Ors. - Respondents
CS(OS) No. 1384 of 2012 & I.As. No. 6375 of 2016, 8542 of 2016
Decided On : 09-01-2024
Specific Performance - Agreement to Sell - Specific Relief Act, 1963 - Section 16, 20, 21, 22, 23 - The court found that the Agreement to Sell dated 20.05.2008 was only a precursor to the subsequent Agreement to Sell dated 26.05.2008, which was duly implemented and possession handed over. The plaintiffs were not entitled to the relief of specific performance of the Agreement to Sell dated 20.05.2008. The suit of the plaintiff was dismissed.
Fact of the Case:
The plaintiffs filed a suit for Specific Performance of Agreement to Sell dated 20.05.2008 for the purchase of a property in New Delhi. The plaintiffs claimed that they were ready and willing to perform their part of the contract and offered the balance sale consideration, but the defendant failed to perform her obligations under the Agreement to Sell.
Finding of the Court:
The court found that the Agreement to Sell dated 20.05.2008 was only a precursor to the subsequent Agreement to Sell dated 26.05.2008, which was duly implemented and possession handed over. The plaintiffs were not entitled to the relief of specific performance of the Agreement to Sell dated 20.05.2008. The suit of the plaintiff was dismissed.
Issues: The issues included whether the suit was filed within the period of limitation, whether the plaintiffs were ready and willing to perform their obligations, and whether the plaintiffs were entitled to specific performance of the Agreement to Sell dated 20.05.2008.
Ratio Decidendi: The court applied the principles of Specific Relief Act, 1963 - Section 16, 20, 21, 22, 23 to determine the readiness and willingness of the plaintiffs to perform their part of the contract. It concluded that the plaintiffs were not entitled to the relief of specific performance of the Agreement to Sell dated 20.05.2008.
Final Decision: The suit of the plaintiff was dismissed.
JUDGMENT
Neena Bansal Krishna, J. - A suit for Specific Performance of Agreement to Sell dated 20.05.2008 and Permanent Injunction, has been filed by the plaintiffs.
2. The plaintiffs entered into an Agreement to Sell dated 20.05.2008 for the purchase of property bearing No.E-1091, Saraswati Vihar, New Delhi with land underneath admeasuring 156 sq. mts. and superstructure standing thereon (hereinafter referred to as "suit property"), with defendant No.1, represented herself to be the exclusive owner and in possession of the suit property. Defendant No.2 Mrs. Sushila Shah is the wife of plaintiff No.1.
3. The total sale consideration was agreed to be Rs. 4,00,00,000/-(Rupees Four Crores) out of which the plaintiffs paid Rs. 2,00,00,000/-(Rupees Two Crores) in cash to defendant No.1 for which a receipt was duly issued.
4. According to the terms of the Agreement to Sell, the balance of Rs. 2,00,00,000/- (Rupees Two Crores) was to be paid upon execution of the Sale Deed post conversion of suit property from leasehold to freehold. The plaintiffs reserved the prerogative to decide the name of the person in whose favour the transfer of the rights, title and interest in the suit property was to be made by defendant No.1.
5. The possession of Ground Floor of the suit property was agreed to be handed over to the plaintiffs at the time of applying for conversion of the suit property, the charges for which were to be borne by defendant No.1 exclusively. However, in part performance of the Agreement of Sell, vacant physical possession of the First Floor and Terrance of the suit property was handed over to the plaintiffs.
6. The plaintiff asserted that the parties agreed that the possession of First Floor and Terrance shall be secured under a registered Agreement to Sell and Power of Attorney in pursuance whereof the documents were executed by defendant No.1 in favour of defendant No.2 and were registered on 26.05.2008. The husband of defendant No.1 acting as Attorney, also executed a General Power of Attorney for consideration in favour of defendant No.2 (wife of plaintiff no.1) qua the said portion of the suit property. The consideration paid under this Agreement was to be adjusted from the balance amount.
7. In the month of June, 2008 plaintiffs contacted defendant No.1 seeking an update on the status of conversion of the suit property to freehold and transfer of possession qua remaining portion of the suit property. However, defendant No.1 sought more time to perform his obligations on the ground that she was not keeping well and was unable to apply for conversion. The plaintiffs faced same excuse when he approached defendant No.1 again in July, 2008.
8. Thereafter, in September, 2008 during the course of discussions between the plaintiffs and defendant No.1, the latter informed that she has misplaced the original Power of Attorney qua the suit property under which she had acquired title to the suit property, and is in the process of searching the documents. The original Power of Attorney being a condition precedent for conversion, she was unable to move the appropriate application.
9. Defendant No.1 informed the plaintiffs on 03.01.2009 that all the documents required for the conversion application are ready and assured that she would file the application without delay. The application was then filed in the 3rd week of January, 2009.
10. In March, 2009 when the plaintiffs contacted defendant No.1, she informed that the property has been inspected recently by the officials of DDA and it would take another two months for the completion of the task of conversion. Subsequently, in May, 2009 defendant No.1 informed that the status remained the same because of some reshuffling of the staff of DDA.
11. However, in June, 2009, defendant No.1 updated the plaintiffs that DDA has demanded an exorbitant amount of Rs. 60,00,000/- under various heads for the conversion of the property to freehold and she is taking steps to challenge the demand.
12. The plaintif
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 subsequent suit for specific performance was not barred under Order II Rule 2 CPC, and the plaintiff was ready and willing to perform the contract.
The continuous readiness and willingness of the plaintiff to perform her part of the contract is a condition precedent to grant the relief of specific performance.
The court affirmed that to obtain specific performance, a party must demonstrate readiness and willingness to fulfill contractual obligations, which the plaintiffs failed to do.
Agreement to Sell – Suit for specific performance based on bald and vague pleadings must necessarily be rejected – There is distinction between readiness to perform contract and willingness to perfor....
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