Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(Del) 9912

IN THE HIGH COURT OF DELHI AT NEW DELHI
Anil Kshetarpal, Harish Vaidyanathan Shankar, JJ
TARUN SAWHNEY – Appellant
Versus
UMA LALL (DECEASED) THR LRS & ORS – Respondent
RFA(OS) 26/2019 | RFA(OS) 34/2019

Advocates:
For the Appellants/Petitioners: Mr. Saurabh Kirpal, Mr. Harpreet Singh, Mr. Rajesh Gupta
For the Respondents: Mr. Arun Batta, Abdul Vahid, Mr. Amiet Andlay, Mr. Arun Kumar Sharma

Specific performance requires the plaintiff to prove readiness and willingness; failure to act within stipulated timelines can lead to the agreement's automatic termination under the contract's own terms.

Headnote:(A) Specific Relief Act, 1963 - Section 20 - Suit for specific performance - Plaintiff sought enforcement of two agreements to sell property - Decree granted with conditions including payment of interest - Defendants' appeal against specific performance granted and plaintiff’s appeal against the interest directive - Court held plaintiff not 'ready and willing' to perform; delay established against him, leading to dismissal of his claim - Automatic termination clause in agreements upheld. (Paras 73-75)

(B) Contract Law - Time is of the essence - Court emphasized termination clauses are enforceable to prevent indefinite obligations; parties free to define compliance timeframes that must be adhered to. (Paras 70-72)

Facts of the case:
This judgment arose from disputes regarding specific performance of agreements to sell property between involved parties, where the plaintiff had allegedly failed to fulfill obligations under the agreement within stipulated timelines, leading to disputes. The plaintiff claimed the defendants were responsible for delays, despite evidence indicating his lack of cooperation and attempts to alter agreement terms post-execution. Defendants maintained that the agreements had lapsed and sought a dismissal of the suit.

Findings of Court:
The Court found that the plaintiff was not ready or willing to perform; he caused delays and was at fault in altering procedural aspects contrary to the agreement's terms. The automatic termination clause outlined in the agreements was enforceable.

Issues: The primary issues included whether the agreements had been terminated, whether the plaintiff had fulfilled his obligations, and whether the defendants' defaults justified the decree.

Ratio Decidendi: The Court concluded that substantial evidence exhibited the plaintiff’s failure to be ready and willing, thus holding that he could not claim specific performance. Additionally, the termination clause explicitly stipulated that failure to complete the transaction within the agreed-upon timeline resulted in the agreement lapsing.

Result: Appeals allowed; plaintiff's claim for specific performance dismissed; earnest money forfeited.

Judgement Key Points

Key Points: - Plaintiff must be ready and willing to perform for specific performance; delays by plaintiff lead to dismissal. (!) (!) (!) - Automatic termination clause: agreements lapse if not completed within 12 months; termination can extinguish the obligation to perform. (!) (!) (!) - Court upheld termination/forfeiture of earnest money; decree for specific performance not granted; interest directive set aside as moot. (!) (!) (!)

Question 1?

Question 2?

Question 3?

JUDGMENT

ANIL KSHETARPAL, J.

1. Through this judgment, two Regular First Appeals, one filed by the Plaintiff and second filed by the Defendants challenging the correctness of the judgment dated 05.02.2019 passed by the learned Single Judge, captioned Mr. Tarun Sawhney v. Smt. Uma Lall and Others [hereinafter referred to as „Impugned Judgment‟] while deciding the suit for specific performance of two Agreements to Sell shall stand disposed of.

2. The learned Single Judge [hereinafter referred to as „the LSJ‟] has granted a conditional decree for specific performance of two Agreements executed on 16.09.2009, while directing Mr. Tarun Sawhney, the Plaintiff, to pay the balance sale consideration along with interest @ 9% p.a. The Plaintiff, through RFA(OS) 26/2019 assails the correctness of the direction to pay interest @ 9% p.a. from 16.09.2010. On the other hand, Smt. Upma Khanna and Sh. Vinoo Bhagat, the Defendant Nos.3 and 5 through RFA(OS) 34/2019 dispute the correctness of the decree for specific performance granted by the LSJ.

3. For the sake of convenience, parties hereinafter shall be referred to in the accordance with their status before the LSJ.

FACTUAL MATRIX

4. In order to comprehend the issues involved in the present case, the relevant facts in brief are required to be noticed.

5. The present appeals arise out of a dispute concerning property bearing Bungalow Plot No.32, Nizamuddin East, New Delhi [hereinafter referred to as „the Suit Property‟]. Originally, leasehold rights of the Suit Property were granted in favour of Ms. Usha Bhagat, who was a spinster.

6. On 14.08.1969, she transferred half of the undivided share of the Suit Property in favour of her brother Sh. Vinoo Bhagat (Defendant No.5). This Transfer Deed was upheld by the Court, vide judgment and decree dated 19.02.2005. With respect to the remaining half Ms. Usha Bhagat allegedly executed a Will on 10.04.2003 in favour of Smt. Uma Lall and Smt. Urmilla Kapur, the Defendant Nos.1 and 2.

7. Thereafter, Ms. Usha Bhagat expired on 01.03.2006. Smt. Uma Lall and Smt. Urmilla Kapur, the Defendant Nos.1 and 2, instituted a Probate Case No. 564/2006 claiming half of the Suit Property as allegedly bequeathed onto them through the Will. On 24.10.2008 the Letter of Administration was issued in favour of all her siblings, i.e. Defendant Nos. 1 to 5. In other words, the Will was ignored and half of the Suit Property was inherited by heirs of Ms. Usha Bhagat (brother and sisters) on the basis of natural succession.

8. Thus, Sh. Vinoo Bhagat became owner of 60% (50%+10%) share in the Suit Property, whereas the remaining siblings of Ms. Usha Bhagat, namely, Smt. Uma Lall, Smt. Urmilla Kapur, Smt. Upma Khanna and Sh. Kapil Bhagat became owner to the extent of 10% each in the Suit Property.

9. Sh. Vinoo Bhagat filed an application for sanction of mutation to the extent of 50% of the Suit Property on 03.02.2009. Another application was submitted by all the five Defendants, on 27.03.2009, for sanctioning of mutation in their favour on the basis of letter of administration dated 24.10.2008, however, mutation was not sanctioned.

10. On 16.09.2009, two Agreements to Sell were executed between Mr. Tarun Sawhney (the Plaintiff) with the Defendants. Through, the first Agreement to Sell, Defendants 1–5 agreed to sell their collective half undivided share in the Suit Property for Rs.15.90 crores, against which the Plaintiff paid Rs.90 lakhs as earnest money and through the second agreement Sh. Vinoo Bhagat (Defendant No.5) agreed to sell the other half share in the Suit Property for Rs.12.90 Crore. There was a supplementary agreement executed on the same day between Sh. Vinoo Bhagat and the Plaintiff, acknowledging that the total sale consideration is Rs.15.90 Crore and not Rs.12.90 Crore, and Rs.10 lakhs was paid as earnest money. The relevant clauses of the Agreement to Sell read as under:-

“….5. Since the Vendors have requested the Vendee to pay all lawful charges for mutation and freehold con

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