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2024 Supreme(Online)(DEL) 32956
HIGH COURT OF DELHI
Swarana Kanta Sharma, J
NEW METAL VISION PRIVATE LIMITED – Appellant
Versus
JITENDER KUMAR KHARBANDA & ANR. – Respondent
CS(OS) 879/2024
For the Appellants/Petitioners: Mr. Siddharth Yadav, Ms. Niharika Khanna, Ms. Hanshika Sharma, Mr. Pushyak Panchal
For the Respondents: Mr. Amit Sibal, Mr. Prateek Kumar, Ms. Raveena Rai, Mr. Siddhant Gaur
The court emphasized that specific performance requires the plaintiff to demonstrate readiness and willingness to fulfill contractual obligations, and the defendants' failure to provide title deeds warranted an injunction to maintain the status quo.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXXIX Rule 1 and 2 - Specific Relief Act, 1963 - Application for ad-interim injunction - Plaintiff seeks specific performance of agreements to sell concerning a property - Defendants failed to provide original title deeds despite substantial payments made by plaintiff - Court finds prima facie case in favor of plaintiff for injunction to maintain status quo regarding the property. (Paras 1, 18, 31)
(B) Specific Performance - Readiness and willingness of the plaintiff to perform obligations under agreements are essential for relief - Court emphasizes that the obligation to execute sale deed is contingent upon the vendor's compliance. (Paras 21, 30)
Facts of the case:
The suit arises from agreements to sell property, with the plaintiff alleging that despite paying substantial amounts, the defendant failed to deliver a clear title and is attempting to sell the property to another party. (Paras 2-6)
Findings of Court:
The court finds that the plaintiff has a prima facie case and would suffer irreparable harm if the defendants are not restrained from disposing of the property. (Paras 30-31)
Issues: The primary issue is whether the plaintiff has demonstrated readiness and willingness to perform the contract and if an injunction is warranted to prevent the defendants from selling the property. (Paras 18, 21)
Ratio Decidendi: The court rules that the plaintiff's significant payments indicate readiness and willingness to perform, and the defendants' failure to communicate their readiness to execute the sale deed undermines their position. (Paras 30-31)
Result: Defendants are restrained from transferring the suit property pending further hearings.
| Table of Content |
|---|
| 1. the factual background of the property dispute and agreements. (Para 2 , 3 , 4 , 5 , 6 , 7) |
| 2. plaintiff's argument on breach of contract and readiness. (Para 8 , 9 , 10 , 11) |
| 3. defendant's argument on plaintiff's lack of readiness. (Para 13 , 14 , 15 , 16) |
| 4. court's analysis on prima facie case and balance of convenience. (Para 18 , 19 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 5. court's final order and procedural directions. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40) |
JUDGMENT
SWARANA KANTA SHARMA, J. I.A. 44238/2024 (Under Order XXXIX Rule 1 and 2 CPC)
1. The present application under Order XXXIX Rule 1 and 2, read with Section 151 of the Code of Civil Procedure, 1908 [hereafter „ CPC ‟ ] has been filed on behalf of the applicant/plaintiff, seeking grant of ad-interim ex-parte injunction in favour of the plaintiff and against the defendants.
Digitally Signed FACTUAL BACKGROUND
2. The present suit arises from a series of transactions concerning the property bearing number B-4/43, Paschim Vihar, New Delhi [hereafter „ suit property ‟] , which forms the subject matter of dispute between the parties.
3. The facts, as set out in the plaint and the present application, are that the defendant no. 1 is a partner in a partnership firm, namely Bharat Steel Traders, which is engaged in the business of importing finished steel products, including tinplate sheets and coils. In 2015, Bharat Steel Traders extensively borrowed funds from banks and financial institutions, including Bank of India. The loans were secured by a mortgage created by defendant no. 1 over the suit property in favor of Bank of India. Subsequently, a settlement was reached between Bharat Steel Traders and Bank of India, under which Bharat Steel Traders was required to pay a sum of ₹ 7,00,00,000/- in quarterly installments of ₹ 75,00,000/- for the release of the mortgage and the return of the original title deeds of the suit property. Since Bharat Steel Traders did not have funds to fulfil the said settlement, the defendant no. 1 started to explore buyers for the suit property.
4. On 15.12.2015, defendant no. 1 approached the plaintiff with
an offer to sell the suit property. An Agreement to Sell [hereafter „ ATS-I ‟] was executed between the plaintiff and defendant no. 1. It was agreed that the total sale consideration of ₹ 7,00,00,000/- would be paid by the plaintiff to defendant no. 1 or to any person, firm, or
bank nominated by defendant no. 1 in quarterly installments, starting in December 2015. In return, defendant no. 1 undertook to clear all liabilities with Bank of India and to transfer a clear and marketable title of the suit property to the plaintiff. It is averred that between December 2015 and April 2019, the plaintiff paid an amount of ₹ 2,22,94,626/- to Bharat Steel Traders, as nominated by defendant no. 1.
5. However, on 02.04.2019, a fresh Agreement to Sell [hereafter „ ATS-II ‟] was executed between the plaintiff and defendant no. 1, since the defendant no. 1 failed to produce the original documents of the suit property by that point of time, and accordingly, ATS-I was cancelled, save and except for the payment already made by the plaintiff. In the new agreement, the sale consideration for the suit property was revised to ₹ 12,00,00,000/-. Under Clause 4 of ATS-II, defendant no. 1 was obligated to deliver a clear and marketable title of the suit property along with the original title deeds to the plaintiff by March 2022. Clause 6 of ATS-II further clarified that the amount of ₹ 2,22,94,626/- already paid by the plaintiff would be adjusted against the total sale consideration, and only the balance amount was to be paid.
6. Between 02.04.2019 and 31.03.2022, the plaintiff paid an additional sum of ₹3,71,08,096 /- (out of remaining sum of ₹9,77,05,374/ -) to defendant no. 1 and to various persons nominated by defendant no. 1. However, the grievance of the plaintiff is that despite receiving substantial pa
