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DELHI HIGH COURT
Valmiki J. Mehta, J.
Dr. D.C. Khosla (Deceased) Through Lrs. —Petitioner
versus
Vinod Kumar Jain —Respondent
RSA No.132 of 2004
Decided on 14.7.2016
Counsel for the Parties:
For the Petitioner:Mr. Ashish Dholakia, Advocate with Mr. Gautam Bajaj, Advocate
For the Respondent:Ms. Monisha Handa, Advocate with Mr. Mohit D. Ram, Advocate
Headnote:(a) Property law – Specific performance – Respondent/defendant claiming time being essence of agreement for sale and transaction had to be completed by March, 1979 – However respondent/defendant applying to authorities under Urban Land (Ceiling and Regulation) Act, 1976 in July, 1980 – First appellate court rightly holding that time was not of essence of the agreement. (Para 6)
(b) Property law – Specific performance – Readiness and willingness of plaintiff to perform his part of the agreement – Financial capacity – Plaintiff bringing original passbook and receipts of deposits to court and making a statement – Respondents not contesting contents of pass book – Not filing copies of deposit receipts or the pass book immaterial – Plaintiff already depositing balance consideration in respondent’s account, thus performing his part of the contract – But respondents refusing to accept the deposit – Held, plaintiff was ready and willing to perform his part of the contract. (Para 8)
1995 (34) DRJ 86 – Distinguished
(c) Property law – Specific performance – Agreement providing for grant of damages – Not a ground to deny specific performance – Section 53A of the Transfer of Property Act, 1882. (Para 11)
(2004) 6 SCC 649 – Relied upon
(1999) 8 SCC 416 – Referred
(d) Property law – Specific performance – Clause 8 of the agreement – Order XLI Rule 24, Civil Procedure Code, 1908 – Clause 8 providing right to claim damages by the plaintiff/proposed purchaser without prejudice to his rights to claim specific performance. (Para 12)
(2015) 11 SCC 782 – Relied upon
(e) Property law – Specific performance – Plaintiff put in possession of suit property – Normally done after receipt of full consideration amount – Plaintiff held entitled to specific performance. (Para 14, 15)
(f) Property law – Specific performance – High Court directing specific performance of agreement of sale – Equity – Respondent granted 21% interest on the consideration paid. (Para 17)
2011 (123) DRJ 148 – Relied upon
Result: Second appeal allowed.
Valmiki J. Mehta, J—This Regular Second Appeal under Section 100 of the Code of Civil Procedure, 1908 (CPC) is filed by the appellants/plaintiff against the impugned Judgment of the First Appellate Court dated 10.2.2004 whereby the first appellate court instead of granting specific performance of the Agreement to Sell dated 30.11.1978 only granted compensation to the appellants/plaintiff as stated in the agreement to sell. The original plaintiff has expired pendente lite and is now represented by his legal heirs. Appellants are aggrieved because in spite of holding that there did exist an agreement to sell, there was breach of contract on behalf of the defendant/respondent, time was held not to be of the essence of the contract, and, the plaintiff had proved his readiness and willingness, yet, the first appellate court instead of granting specific performance only granted compensation. It is argued by the appellants that the conclusion of the first appellate court is based upon the judgment of the Supreme Court in the case of Dadarao and Another vs. Ramrao and Others (1999) 8 SCC 416: [1999] 9 Supreme 103. but the ratio of this judgment in the case of Dadarao (supra) has been held to be per incuriam as per the subsequent judgment in the case of P. D’Souza vs. Shondrilo Naidu (2004) 6 SCC 649: [2004] 6 Supreme 28 wherein it is observed that the judgment in the case of Dadarao (supra) had failed to take note of the earlier binding ratio of the judgment of the Supreme Court in the case of M.L. Devender Singh and Others vs. Syed Khaja (1973) 2 SCC 515.
2. Learned counsel for the appellants/plaintiff accordingly argues that the substantial question of law framed by this Court on 31.10.2013 that whether the judgment of the first appellate court below suffers from perversity should be answered in favour of the appellants/plaintiff inasmuch as the first appellate court has not followed the correct law and wrongly relied upon a judgment which has been held to be per incuriam.
3. The facts of the case are that admittedly the parties entered into an Agreement to Sell dated 30.11.1978 whereby the defendant/respondent agreed to sell to the erstwhile plaintiff shop no.865 and garage no.870 situated at Kedar Building, Subzi Mandi, Delhi. The agreed sale consideration as per the Agreement to Sell dated 30.11.1978 was Rs. 23,500/– of which the respondent/defendant has received a sum of Rs. 5,000/– leaving the balance payment due of Rs. 18,500/–. This balance payment under the agreement to sell was payable at the time of execution and registration of the sale deed. Though as per the agreement to sell the transaction was to be completed by March, 1979, the defendant himself applied for permission to sell the property to the authority under the Urban Land (Ceiling and Regulation) Act, 1976 on 1.7.1980 and which was granted on 30.7.1980 and therefore time was not of the essence of the contract. The case of the appellants/plaintiff further was that the plaintiff repeatedly contacted the defendant to execute the sale deed but the respondent/defendant failed to do so. Ultimately the plaintiff purchased the stamp papers of Rs.1,880/– and got the Sale Deed typed on 7.1.1981 and again requested the respondent/defendant to execute the sale deed. The respondent/defendant failed to do so. The plaintiff was ready with an amount of Rs. 18,500/– with him but since the respondent/defendant failed to come forward and execute the sale deed, thereupon, plaintiff deposited this amount in his account no.7215, State Bank of India, Clock Tower, Subzi Mandi, Delhi on 17/18.1.1981.Plaintiff thereafter sent a telegram Ex.PW1/3 vide postal receipt Ex.PW1/2 and thereafter wrote a Letter on 23.3.1981 Ex.PW1/4 and since no effective response was received from the respondent/defendant hence the Legal Notice dated 5.11.1981, Ex.PW1/5 was sent and thereafter the present suit for specific performance was filed on 24.3.1982.
4. The respondent/defendant appeared in t
