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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Anil Kshetarpal, J.
M/s Victor Cycles Private Limited - Appellant
Versus
Sh.Sarvesh Kumar Jindal – Respondent
RSA-3921-2019 (O&M)
Decided On : 01-09-2023
Specific Performance - Agreement to Sell - Code of Civil Procedure, 1908 - Section 19(b) of the Specific Relief Act, 1963 - [OWNERSHIP, FRAUD, READINESS AND WILLINGNESS, ORDER II RULE 2 CPC] - 17, 19(b) of the Specific Relief Act, 1963 - The court examined the ownership of the property, the plea of fraud, the plaintiff's readiness and willingness, and the objection under Order II Rule 2 CPC. The court found that the appellant did not contest the suit on the ground of ownership, failed to prove fraud, and the plaintiff was ready and willing to perform the contract. The court also held that the subsequent suit was not barred under Order II Rule 2 CPC. The appeal was dismissed.
Fact of the Case:
The suit for possession by way of specific performance of the agreement to sell was decreed. The defendant challenged the concurrent findings of fact arrived at by the courts below. The agreement to sell was executed with respect to a property, and the plaintiff paid earnest money as per the agreement. The defendant claimed that the agreement was executed as collateral security for a loan. The plaintiff filed a suit for specific performance after the agreed date for execution and registration of the sale deed.
Finding of the Court:
The court found that the appellant did not contest the suit on the ground of ownership, failed to prove fraud, and the plaintiff was ready and willing to perform the contract. The court also held that the subsequent suit was not barred under Order II Rule 2 CPC.
Issues: The issues included the ownership of the property, the plea of fraud, the plaintiff's readiness and willingness, and the objection under Order II Rule 2 CPC.
Ratio Decidendi: The court held that the appellant did not contest the suit on the ground of ownership, failed to prove fraud, and the plaintiff was ready and willing to perform the contract. The court also held that the subsequent suit was not barred under Order II Rule 2 CPC.
Final Decision: The appeal was dismissed.
JUDGMENT :
Anil Kshetarpal, J.
1. The correctness of the concurrent findings of fact arrived at by the courts below while decreeing the suit for possession by way of specific performance of the agreement to sell, is challenged by the defendant in this Regular Second Appeal. The agreement to sell was executed on 07.01.2006 with respect to property bearing MC No.B.XXXIII 2175 measuring 2425 sq. yards area for a total sale consideration of Rs.1,31,00,000/-. The execution of the agreement to sell is not in dispute between the parties, although the defendant claims that this document was executed as a collateral security for the repayment of loan. The agreement to sell is scribed on as many as five non-judicial papers of Rs.50/-. Each page is signed by two Directors of the appellant (defendant-Company). It has also come on record that on 06.01.2006 i.e a day prior to the agreement to sell, a resolution was passed in the Board meeting of the Company authorizing Sh. Revti Raman Gupta and Sh. Vinay Gupta, Directors of the Company to sign the agreement to sell in favour of the plaintiff (Sh.Sarvesh Kumar Jindal).
2. As per the agreement to sell dated 07.01.2006, Rs.20,00,000/- was paid as an earnest money, out of which Rs.2,00,000/- was paid in the form of a cheque dated 08.12.2005 whereas the remaining amount of Rs.18,00,000 was paid in cash. As stipulated in the agreement to sell, the plaintiff paid another sum of Rs.10,00,000/- on 15.02.2006 to the defendant-Company and an endorsement was made on the reverse side of last page of the agreement to sell, which was again signed by both the Directors. On 01.08.2006, another sum of Rs.5,00,000/- was paid against a similar endorsement, which was again signed by both the Directors. It has also come on record that in the balance sheet of the appellant-Company, a receipt of Rs.30,00,000/- as an earnest money for sale of the suit property is duly recorded. The appellant, while filing the written statement, has denied the passing of the resolution and pleaded that there was no intention to sell. As per the agreement to sell, the sale deed was to be executed on or before 31.03.2006. The appellant has stated that they received a loan of Rs.2 , 00,000 on 08.12.2005. Another sum of Rs.8,00,000 was received on the same day whereas on 03.12.2005, the appellant received Rs.4,00,000, on 17.12.2005, Rs.2,00,000, on 22.12.2005 Rs.2,00,000 and on 24.12.2005 Rs.2 ,00,000 was paid.
3. It has come on record that the appellant-Company is a Private Ltd. Company run by Sh. Revti Raman Gupta, his wife and son. Both the courts have found that the agreement to sell is proved.
4. Provisionally the plaintiff (respondent herein) filed a suit for the grant of decree of permanent injunction dated 18.11.2006, which was withdrawn on 24.04.2007.
5. An application under Order XLI Rule 27 of the Code of Civil Procedure, 1908 (hereinafter referred to as ‘CPC’) for permission to lead the additional evidence in order to produce certified copy of the plaint of the previous suit filed by the respondents for grant of decree of permanent injunction, filed on 18.11.2006 has also been filed. The suit for specific performance of the agreement to sell was filed on 11.04.2007 i.e after a period of 11 days from the agreed date for the execution and registration of the sale deed.
6. Heard the learned counsel representing the parties at length and with their able assistance perused the paperbook, alongwith the requisitioned record. It may be noted here that on permission granted, the learned counsel representing the parties have also filed their written note of submissions. The brief synopsis filed by the appellant runs into 22 pages.
7. Learned senior counsel representing the appellant contended that the the appellant is not the owner of the suit property and therefore, the suit for specific performance of the agreement to sell could not be decreed. While elaborating, he submitted that originally this property was allotted to a partnership firm
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 subsequent suit for specific performance of the agreement to sell based on a different cause of action is maintainable.
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.
PONT OF LAW: readiness and willingness in completing her part of the sale transaction at the earliest point of time, all would only go to disclose that as the sale agreement had not been really execu....
The cause of action of the earlier suit for permanent injunction has to furnish the cause to institute the subsequent suit for specific performance also, to hold that the latter is barred under Order....
The court ruled that a suit for specific performance was not barred by Order 2, Rule 2 CPC as the appellants were permitted to withdraw a prior suit and file a new one.
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