Judicial Analysis Court Copy Headnote Facts Arguments Court observation

DELHI HIGH COURT
Chandra Dhari Singh, J.
Sanghi Bros (Indore) Pvt. Ltd. – Plaintiffs
versus
Kamlendra Singh – Defendant
CS(OS) 475 of 2004 and Crl.M.A. 7125 of 2012, I.A. 15641 of 2010, I.A. 8319 of 2012, I.A. 11016 of 2012, I.A. 19951/2012, I.A. 19952/2012 and I.A. 12878 of 2013
Decided on 6.9.2023

Counsel for the Parties:
For the Plaintiffs:Mr. Arvind Varma, Sr. Advocate with Mr. A. S. Mathur, Mr. Prabal Mehrotra, Mr. Shubhankar, Mr. Umang Kataria, Ms. Mahima Singh and Ms. Smridhi Sharma, Advocates with and Mr. H. Joshi, AR for plaintiff nos.1 and 2(i)-(iii) Mr. Sankalp Goswami, Advocate for plaintiff no.2(iv) (Through VC)
For the Defendant:Mr. Jayant Mehta, Sr. Advocate with Mr. Vijay K. Singh and Ms. Ashita Chhibber, Advocates, Mr. Akhil Sibal, Sr. Advocate with Ms. Fareha Ahmad Khan, Advocate for non-applicant in I.A 8319/2012

IMPORTANT POINTS
1. Specific performance – Readiness and willingness on part of plaintiff is condition precedent for obtaining relief of grant of specific performance.
2. Specific performance – Unregistered agreement to sell can be admitted as evidence in suit for specific performance.
3. Specific performance – In cases concerning immovable property irrespective of fact whether time is of essence or not as per terms of contract, Court may infer that it is to be performed in reasonable time.
4. Specific performance – Compewnsation- In Sections 20, 21 of SRA, Court is vested with discretion to award compensation to party aggrieved in lieu of specific performance

Headnote:
(A) Specific performance - Execution of document – Unregistered – Unregistered agreement to sell can be admitted as evidence in suit for specific performance – Upon reading terms and conditions of Agreement, intention of parties is clear that Agreement belongs to sale of Suit Property – Execution of same has not been denied by defendant, though defendant has pleaded coercion by plaintiffs, to execute MOU. [Paras 76, 77]
(B) Specific Relief Act, 1963 – Section 16 (c) – Specific performance – Grant of – Readiness and willingness – Bare perusal of Plaint and evidence on record clear that plaintiff has always been ready and willing to perform his part of contract – MOU was executed in year 1998 – Since then, almost 25 years have elapsed – Performance of contract would involve considerable hardship on parties – Third party interest has been created to such extent that revocation of that contract would lead to increase in hardships warranting unjustified litigations – Specific performance of part of contract can be directed only where part which is left unperformed bears small portion to whole in value – Part which is to be left unperformed bears substantial part whole house – Portion of property against which specific performance has been sought, cannot be granted – Readiness and willingness of both parties to Contract has to be continuous – There cannot be any gap in said conduct, on behalf of either of both parties – There is no continuity in defendant readiness and willingness which is also supported by developments that have occurred in regard to Suit Property. [Paras 65, 79, 85, 100, 101, 102]
(C) Specific Relief Act, 1963 – Section 20 – Specific performance – Grant of – Essence of time – In cases concerning immovable property irrespective of fact whether time is of essence or not as per terms of contract, Court may infer that it is to be performed in reasonable time – Time is not essence of Contract, in case of immovable property evolved in times when prices and values were stable and inflation was unknown – Where prices of property increases in multi-fold manner, this factor plays important role – Valuation of property has steeply increased to Rs.60 crores – Said increase in value is drastic increase in comparison to value ascertained by parties in dispute before this Court i.e. Rs.2.5 Crore – Court cannot grant specific performance by payment of Rs.2.50 Crores by plaintiff to defendant since price of property has increased substantially – Third-party interest has been created in property against which plaintiff is seeking specific performance – Such a circumstance makes it inequitable to grant and enforce specific performance decree – Decree for specific performance is not to be granted – Undue hardship caused to defendant as well as to third party in case plaintiff is granted specific performance –Plaintiff are not entitled for decree of specific performance of contract. [Paras 106, 109, 110, 111, 112, 113]
(d) Specific Relief Act, 1963 – Section 21 – Indian Contract Act, 1872 – Section 73 – Evidence Act, 1872 – Section 102 – Compensation – Money decree – Entitlement –Plaintiffs have prayed for grant of compensation in lieu of specific performance – Court has not granted relief of specific performance to plaintiffs, in terms of Section 20 and 21 of Act plaintiffs is entitled for grant of compensation – For determination of quantum of compensation, Court shall adhere to Section 73 of Act – Court shall award only such damages which has been suffered by party – Burden of proof in regard to same, shall lie on party which is claiming such damages – Plaintiffs have to prove preponderance of events that they are entitled to compensation as sought, by showing that expenses which are being claimed were duly incurred by plaintiffs – Sum of Rs. 15,00,000/-, as lump-sum compensation in lieu of claim sought for specific performance is granted – Amount payable shall carry interest @ 12 % p.a., till such payment or realization. [Paras 123, 125, 128, 129, 130, 132, 135, 139, 140, 144, 146, 147, 148, 149]
Result: Suit partly decreed.

JUDGMENT

Chandra Dhari Singh, J.—The instant Civil Suit has been filed on behalf of the plaintiffs seeking the following reliefs:—

“(A) pass a decree for specific performance against the Defendant and in favour of the plaintiffs and to direct the Defendant to transfer/ assign / sell to the Plaintiffs the property (including land; admeasuring about 1200 square yards and structures thereon) bearing No. A-9/29 Vasant Vihar, New Delhi; and

(B) If this Hon’ble Court were pleased not to grant a decree for specific performance pass a decree for payment of money in favour of the Plaintiffs and against the Defendants in the sum of Rs.20,79,049/- alongwith interest @ 18% p.a. from the date of the suit and till the date of actual realization of the same; and

(C) pass a decree for permanent injunction in favour of the Plaintiffs and against the Defendant, his servants, agents, heirs, successors and others claiming under or through him, permanently restraining the Defendant from transferring/ assigning/ selling or otherwise disposing of his right, title, and interest in the said property bearing No. A-9/29 Vasant Vihar, New Delhi to any other person(s).

(D) pass a decree for permanent injunction in favour of the Plaintiffs and against the Defendant, his servants, agents, heirs, successors and others claiming under or through him, permanently restraining the Defendant from transferring/ assigning/ selling or otherwise disposing of his right, title, and interest under or relatable to the Will and Testament dated 5-11-1984 of the late Shri Surendra Sinh ji of Alirajpur to any other person(s) and

(E) pass such further or other orders as are deemed just, fit and necessary in the circumstances of the case.”

2. The plaintiff No. 1 is a company registered under the Companies Act, 1956. The present Suit is being instituted on behalf of the plaintiff Company through the Managing Director of plaintiff No. 1, i.e., plaintiff No. 2.

3. The defendant is the younger brother of Late Shri Surendra Sinh ji. Late Shri Surendra Sinh ji possessed various properties including land and structure at property bearing No. A-9/29, Vasant Vihar, New Delhi (hereinafter “Suit Property”). The said Suit Property is, inter alia, the subject matter of the present Suit.

4. The said Suit Property admeasuring about 1200 square yards, was the owned by Late Shri Surendra Sinh ji, who had executed a Will dated 5th November 1984 (hereinafter “Will of 1984”). Under the said Will, the defendant inter alia bequeathed the said property subject to the condition that if the property was let out, the rental income was to be distributed in accordance with the provisions of the said Will and if the property was sold by the defendant, the net sale proceeds were to be apportioned in the ratio, to the persons specified therein.

5. During the pendency of the present Suit, the said Will, was sub-judice before the High Court of Madhya Pradesh, as there was a conflict inter alia with regard to the validity of the said Will with another Will dated 28th March 1996, produced by one Mrs. Jyoti Rathore (hereinafter “Will of 1996”). As regards the Suit Property, the keys of the said property were in the custody of the Registrar of the High Court of Madhya Pradesh.

6. The defendant and the plaintiff No. 1 through plaintiff No. 2 executed an Agreement dated 2nd December 1998, in the form of a Memorandum of Understanding (hereinafter “MOU/Agreement”), wherein, the defendant had agreed, inter alia, that he shall assign and/or sell and/or dispose of all his interest in the Suit Property, including the rights, hereditaments, entitlements and claims comprised therein, to which he is entitled as the major beneficiary as per the Will of 1984. The parties had agreed that the plaintiffs shall pay to the defendant a sum of Rs 2.50 Crore as a consideration for the said assignment/transfer/disposal.

7. In the said MOU dated 2nd December 1998, the following was agreed upon by the parties:—

(a) The parties