IN THE HON’BLE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. Civil Suit No. 27 of 2001. Judgment Reserved on 9.9.2008. Date of decision 26th September 2008. Lt. Col. S.J.Chaudhri …Plaintiff. Versus Mr. Raj Kumar Brijendra Singh(deceased) through his Legal Representatives …Defendants. Coram: The Hon’ble Mr. Justice Dev Darshan Sud, J. Whether approved for reporting?1 Yes. For the plaintiff. Mr. Bhupinder Gupta, Sr. Advocate, with Mr. Neeraj Gupta, Advocate. For the defendants Mr. Rakesh Jaswal, Advocate. Dev Darshan Sud, J. This suit has been preferred by the plaintiff on the allegations that late Shri Raj Kumar Brijendra Singh is the owner in possession of land measuring 2-1-0.1659 bighas, bearing khasra Nos. 22, 23, 24 and 25, situated in Mauza Jandrighat, Pargna Bathri, Tehsil Bhattyat, 1 Whether Reporters of Local Papers are allowed to see the judgment? Yes. - 2 - District, Chamba as per Khata Khatouni No. 1/1 min of the Jamabandi of 1987-88 (hereafter referred to as the suit land). By an agreement to sell dated 4.9.1993 Ex.PW-1/A executed between the plaintiff and the defendant, the suit land was agreed to be sold by the defendant to the plaintiff for a total consideration of Rs.35 lakhs. The plaintiff pleaded that a sum of Rs.51,000/- was paid when the terms were finalized and Rs.4,49,000/- was paid at the time of execution of the agreement Ex.PW-1/A and the balance was payable by the defendant on or before 30.10.1993 when the sale deed was to be executed and registered. Ex.PW-1/A inter alia stipulated: i) the defendant shall get all clearances and approvals required for the sale and transfer of the suit property by 30th October, 1993 from the relevant authorities. ii) In the event of failure on the part of the plaintiff to make the balance payment within the stipulated time, amount paid as advance will be forfeited and in case the defendant was unable to execute the documents and put the plaintiff in physical possession of the suit property, the plaintiff will - 3 - be entitled to claim specific performance of the Agreement to Sell and damages from the defendant. iii) The defendant shall execute the sale deed and all other documents in favour of the plaintiff or unto his order and submit the sale deed for registration and transfer of the suit property in the plaintiff’s name by 30th October, 1993. The plaintiff pleads that it was for the defendant to have got all clearances and approvals required for the sale of the property on or before 30.10.1993. The plaintiff was under the bonafide belief that these acts will be performed by the plaintiff. However, when nothing was heard from him, by a letter dated 28.10.1993 Ex.PW-1/B, the plaintiff called upon the defendant to send to him the clearances and approval from the income tax authority. A copy of this letter was sent to one Sardar Paramjit Singh, who was the Broker involved in the transaction with the request that the defendant should expedite the matter. A telegram Ex.PW-1/E was sent in continuation of the letter requesting the defendant to obtain approvals and permissions as promised. The plaintiff avers that - 4 - inspite of repeated reminders having been sent to the defendant and despite the fact that it was the duty of the defendant to have obtained all such clearances, the defendant did not comply with the request of the plaintiff. Again, the plaintiff by his telegram dated 15.11.1993 requested the defendant to complete the transaction and this was followed by a number of meetings / letters, but the defendant failed to meet his contractual obligation(s). The plaintiff pleads that he has always been ready and willing to perform his part of the contract but till as late as September 1998, the title of the defendant was under a cloud in Court proceedings instituted by his brother against him and the demand of the defendant for payment of balance consideration did not arise at all. In the written statement filed by the defendant, he has pleaded that the suit is not maintainable in the present form; the suit is barred by limitation etc. The main defence set out by the defendant is that he had all the necessary approvals/clearances required before 30.10.1993 but the plaintiff did not perform his part of the contract and the amount paid by the plaintiff was - 5 - forfeited. The defendant then submits that it is the plaintiff who had failed to perform his part of the contract and that the sale consideration was fixed at Rs.37,50,000/- and not Rs.35 lakhs as pleaded. He states that he is ready and willing to perform his part of the agreement in case the balance out of the total consideration of Rs.37,50,000/- is paid to him. The sole defendant died during the pendency of the suit and the defendants are his legal representatives. On the pleadings of the parties, the following issues are framed: 1. Whether the plaintiff has always been ready and willing to perform his part of the agreement dated 4th September, 1993, as alleged? OPP. 2. In case issue No. 1 (supra) is proved, whether the plaintiff is entitled to a decree for specific performance of the said agreement and on what terms and conditions? OPP. 3. Whether the plaintiff is entitled for the grant of permanent prohibitory injunction as prayed for? OPP. 4. Whether the suit is not maintainable in the present form, as alleged? OPD. - 6 - 5. Whether the plaintiff is estopped from instituting the present suit by his own act and conduct, as alleged? OPD. 6. Whether there had been part novation of the agreement between the parties in August/September, 2001 whereby the plaintiff agreed to pay a sum of Rs.37, 50,000/- as consideration for the agreed sale and the defendant has always been ready and willing to perform the agreement subject to this condition, as alleged? OPD. 7. Whether the suit is time barred? OPD. 8. Relief Issues 4, 5, 6 and 7 These issues are taken up together for discussion first. The onus of these issues was on the defendants. On the question of maintainability and estoppel, there is no evidence on record. Despite repeated opportunities having been granted, the defendant did not choose to lead any evidence. His pleadings in the preliminary objections are extremely terse and lack particulars. Merely saying that the suit is not maintainable or that the suit is barred is not sufficient to disentitle the plaintiff from bringing an action against the defendant. On the question of novation - 7 - as covered by issue No. 6, again there is no evidence on record. Ex.PW-1/A is the agreement to sell which provides for the sale consideration of Rs.35 lakhs and beyond that there is no evidence to show that the sale amount was fixed at Rs.37,50,000/-. There is no evidence on the issue of limitation, nor do the facts pleaded suggest or point to the fact that the plaintiff has approached this Court after the expiry of the statutory period. It was for the defendant to have led some evidence on the issues having taken the burden on himself. Even in cross examination, there is nothing to show or suggest that the issues the burden of which was on the defendant have been established. These issues are therefore, decided against the defendant. Issue No. 1 This is the crucial and pivotal issue. The plaintiff has appeared as his own witness. He states on oath that the sale transaction was negotiated through one Paramjit Singh of Dalhousie, who was a property agent and agreement to sell Ex.PW-1/A was executed. On 30.7.1993, the matter was settled and a sum of Rs.51,000/- was paid by cheque as earnest money. On 4.9.1993, when - 8 - agreement to sell Ex.PW-1/A was executed, another sum of Rs.4,49,000/- was paid to the defendant. He proves Ex. Ex.PW-1/A and his signatures at point ‘A’, the signatures of the defendant at point ‘B’, the signatures of the property dealer who was a witness at point ‘C’ and that of his daughter at point ‘D’. Each page of the agreement was signed by the parties. According to the terms and conditions of Ex. Ex.PW-1/A, the sale deed was to be executed and registered on or before 30.10.1993. The plaintiff states that he was ready and willing to perform his part of the agreement but it was the defendant who failed to perform his obligation in terms of the agreement. The plaintiff further states on oath that vide Ex. PW-1/B which is registered letter, (sent vide receipt Ex.PW-1/C and postal receipt Ex.PW/1-D), no act was performed by the defendant. Thereafter, by telegram Ex.PW-1/E sent to the defendant calling upon him to send to the plaintiff the clearances etc., no action was taken. This was again followed by telegram Ex.PW- 1/G requesting the defendant to furnish the permission and approvals etc. These telegrams were - 9 - sent by receipts Ex.PW-1/F and PW-1/H. He then states that in June, 1994, he received a notice from Raja Prem Singh, elder brother of the plaintiff claiming a share in the suit property. He (Raja Prem Singh) had instituted a suit in the Court of Sub Judge, Chamba and obtained an injunction qua the suit property. This litigation continued till the year 1998 and in the meanwhile public notices were also issued by Raja Prem Singh claiming the suit property to be his co ownership. Ultimately, the suit was dismissed by the Court vide Ex.PW/1-J, order passed on 1.4.1998. The plaintiff states that he was always ready and willing to have purchased the property and even during the pendency of the suit the defendant had approached him for amicable settlement asking the plaintiff to have the stay order vacated etc. A further sum of Rs.10 lakhs and 1.5 lakhs was paid to the defendant. Vide Exts. PW- 1/K and PW-1/L, the defendant acknowledged the receipt of payment of Rs.7.25 lakhs and a total sum of Rs. 15 lakhs from the plaintiff. The plaintiff claims that a total sum of Rs.21,50,000/- has been paid to him and a balance consideration of Rs.13,50,000/- remains to be paid which he is ready - 10 - and willing to pay. This witness has been cross examined at length, but there is nothing on record to show that the defendant had always been ready and willing to perform his part of the contract. The suggestions put by the defendant to the plaintiff are that the letters are fabricated and forged, the postal record is also not correct and that original clearances were not required to be taken by the defendant. He also denied the suggestion that total sale consideration was fixed at Rs.37,50,000/-. This is the only evidence on record. Learned counsel appearing for the plaintiff submits that the evidence on record conclusively establishes that after the agreement Ex. Ex.PW-1/A had been executed, despite repeated requests having been made by the plaintiff by letter Ex. PW-1/B, Ex.PW/1-M and two telegrams Ex.PW-1/E and PW-1/G and inspite of the fact that the plaintiff having met the financial demands of the defendant during the pendency of the suit, no act/ action was taken by him in furtherance of his obligation to execute the sale deed. There is also nothing on record to show or suggest that the sale consideration was fixed at Rs.37,50,000/- or that - 11 - the payments made by him amounting to Rs.21,50,000/- , namely Rs.51,000/- before the execution of the agreement, Rs.4,49,000/- as evidenced by Ex.PW-1/A, Rs.15 lakhs as evidenced by Ex.PW-1/K and Ex.PW-1/L and Rs.1,50,000/- as evidenced by Ex.PW-1/M, were not received by the defendant, who appropriated them for his own use. Coupled with the fact that the plaintiff was always ready and willing to perform his part of the contract and to pay the balance sale consideration, he is entitled for specific performance of the contract Ex. PW-1/A. In the totality of the facts and circumstances and in view of the fact that the evidence of the plaintiff having remained unrebutted, there being no positive evidence led by the defendant to establish his case, nor there being anything elicited in the cross examination of the plaintiff that he had either not paid the amount nor considered the request of the defendants claim that clearances had been obtained etc. as the defendant was bound to do, I hold that the plaintiff was always ready and willing to perform his part of the contract. This issue is decided in favour of the plaintiff and against the defendants. - 12 - Issues 2 and 3 These two issues are taken up together for consideration. Having held that the plaintiff was always ready and willing to perform his part of the contract, the plaintiff would be entitled to a decree of permanent prohibitory injunction restraining the defendants from transferring, alienating, encumbering or parting with possession of the while of the suit property measuring 2-1- 0.1659 bighas bearing khasra Nos. 22, 23, 24 and 25 situated in Mauza Jandrighat, Pargna Bathri, Tehsil Bhattyat, District Chamba as per Khata Khatouni No. 1/1 min of the Jamabandi of 1987-88 or any part thereof. On the question of granting a decree for specific performance, learned counsel for the defendant submits that the plaintiff not having obtained clearances as required under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, which is a bar to any sale transaction there would be a statutory prohibition for passing of the decree. - 13 - I cannot agree with this submission made by learned counsel for the defendant. Clause 3 of Ex. Ex.PW-1/A reads: “ The Buyer on receipt of the acknowledgment of the balance amount will be put in physical possession of the entire land under reference which has been defined in the Aks Tatima attached along with the Jamabandi. The Seller will simultaneously execute the sale deed and all other documents in favour of the Buyer or unto his order and submit the sale deed for registration and transfer of the said property to the buyer’s name by 30th October, 1993. The seller shall get all clearances and approvals required for the sale and transfer of the said property by that date from relevant authorities.” This clause specifically requires the seller to get all clearances and approvals qua the sale and transfer of the property from the relevant authorities. This submission, therefore, cannot be accepted. Even otherwise in law, passing of a decree for specific performance is not prohibited. In Mrs. Chandnee Widya Vati Madden v. Dr.C.L.Katial and others, AIR 1964 SC 978, the Supreme Court held: - 14 - “ 4. The main ground of attack on this appeal is that the contract is not enforceable being of a contingent nature and the contingency not having been fulfilled. In our opinion, there is no substance in this contention. So far as the parties to the contract are concerned, they had agreed to bind themselves by the terms of the document executed between them. Under that document it was for the defendant-vendor to make the necessary application for the permission to the Chief Commissioner. She had as a matter of fact made such an application but for reasons of her own decided to withdraw the same. On the findings that the plaintiffs have always been ready and willing to perform their part of the contract, and that it was the defendant who willfully refused to perform her part of the contract, and that time was not of the essence of the contract, the Court has got to enforce the terms of the contract and to enjoin upon the defendant-appellant to make the necessary application to the Chief Commissioner. It will be for the Chief Commissioner to decide whether or not to grant the necessary sanction.” In Ajit Prashad Jain v. N.K.Widhani and others , AIR 1990 Delhi 42, the High Court of Delhi dealing with the question as to whether in the - 15 - absence of permission under Urban Land (Ceiling & Regulation) Act, a decree for specific performance could be passed. The Court held: “ The permission from Land and Development Office is not a condition precedent for grant of decree for specific performance. In Mrs. Chandnee Widya Vati Madden v. Dr. C.L.Katial, (1964) 2 SCR 495: (AIR 1965 SC 978) the Supreme Court confirmed the decision of the Punjab High Court holding that if the Chief Commissioner ultimately refused to grant the sanction to the sale the plaintiff may not be able to enforce the decree for specific performance of the contract but that was no bar to the court passing a decree for that relief. The same is the position in the present case. If after grant of the decree of specific performance of the contract the Land and Development Office refuses to grant permission for sale the decree holder may not be in a position to enforce the decree but it cannot be held that such a permission is a condition precedent for passing a decree for specific performance of the contract….” In Anjali Das v. Bidyut Sarkar , AIR 1992 Calcutta 47, the High Court of Calcutta on a similar objection to the grant of relief ruled: - 16 - “40. On behalf of the respondent No.1 the decision of the Privy Council reported in AIR 1947 PC 182 : 52 Cal. WN 472 (Dalsukh Versus Guarantee Life Employment Insurance Company) has been referred to. In that case when the plaintiff entered into contract for sale with the defendant subject to approval of the Court and when the approval of the Court was not granted the Privy Council has held that it was a contingent contract and the approval not having been obtained the specific performance of the contract cannot be granted by the Court. 41. We are of the view that facts of that case are different. In this case the Cooperative Society has not yet refused the permission and the contract has not been unenforceable. 42. On the contrary the Supreme Court in Nathumal v. Phulchand, AIR 1970 SC 546, has relied upon the Privy Council decision of (Motilal v. Nanhelal) reported in AIR 1930 PC 287. In that case the contract for transfer of rip land was subject to approval of the Revenue Officer under the provision of Control Provinces Tenancy Act, 1920. The Privy Council has held that there was an implied covenant on the part of the vendor to do all things necessary to effect the transfer which would include - 17 - an application to the Revenue Officer for such permission and when no such permission was obtained the Court can direct the defendant to obtain such permission and execute a conveyance on receipt of such sanction. 43. On behalf of the appellant the Delhi High Court decision in AIR 1990 Delhi 224 has been referred to in which on the approval being given by Co-operative Society the Court granted decree for specific performance of contract for sale of a number of Co-operative Society. This has been referred to in order to demonstrate that the contract for sale of a flat of a Co-operative Society can be transferred subject to Society’s approval. 44. In view of the above legal position we are of the view that the contract in this case is enforceable and when the appellant has already applied for such approval and also filed an application for membership we can grant the decree and direct the respondent No.1 and respondent No.2 to execute sale deed in respect of the flat in suit on the respondent No.2 considering the application for membership of the appellant and the prayer for transfer of the flat in accordance with law and in terms of the bye-laws.” - 18 - In K.Raheja Construction Ltd. v. Alliance Ministries and others , AIR 1995 SC 1768, holding that a decree for specific performance will be subject to grant of permission as contemplated by law, the Court held: “4. It is seen that the permission for alienation is not a condition precedent to file the suit for specific performance. The decree of specific performance will always be subject to the condition to the grant of the permission by the competent authority. The petitioners having expressly admitted that the respondents have refused to abide by the terms of the contract, they should have asked for the relief for specific performance in the original suit itself. Having allowed the period of seven years elapsed from the date of filing of the suit, and the period of limitation being three years under Article 54 of the Schedule to the Limitation Act, 1963, any amendment on the grounds set out, would defeat the valuable right of limitation accrued to the respondent.” In Raghunath Rai and another v. Jageshwar Prashad Sharma and another , AIR 1999 Delhi 383, the Court held that merely because - 19 - permission from the authorities is not obtained does not deprive the plaintiff of his right to pray for a decree of specific performance. The precedent on the point need not be multiplied any further. In these circumstances, the objection raised by learned counsel for the defendant needs to be rejected. This issue is therefore, decided in favour of the plaintiff and against the defendant. Relief (Issue No. 8) The suit of the plaintiff for specific performance is decreed. A decree is passed in favour of the plaintiff and against the defendants for specific performance of the contract Ex.PW-1/A with respect to the suit property measuring 2-1-0.1659 bighas, bearing khasra Nos. 22, 23, 24 and 25, situated in Mauza Jandrighat, Pargna Bathri, Tehsil Bhattyat, District, Chamba as per Khata Khatouni No. 1/1 min of the Jamabandi of 1987- 88 with respect to and in terms of the agreement to sell Ex.PW-1/A entered into between the parties. A decree for possession in favour of the plaintiff and against the defendant for the suit land is also passed. This will be subject to the plaintiff paying the balance sale consideration of - 20 - Rs.13,50,000/- to the defendant within a period of eight months from the date of this judgment. As held by me, it was the defendant who had to obtain permission under Ex.PW-1/A. In case such permission is not obtained by the defendant, the period of eight months shall not be considered to be mandatory and it will be open to the plaintiff to apply for such permissions from the authorities and if and when so applied, the authorities shall consider the application(s) in accordance with law. On such permission having been obtained, the defendants shall be bound to execute the sale deed for which a clear notice of 30 days shall be given by the plaintiff. In case of the defendant failing to execute the sale deed, the plaintiff shall be at liberty to approach this Court for appointment of Commissioner to execute the sale deed. In case the registration of the sale deed shall become impermissible, the alternate relief prayed for by the plaintiff that damages be awarded to him, is allowed. The plaintiff would be entitled to a sum of Rs.21,50,000/- alongwith costs and interest @ 12% per annum from the date of filing the suit till its realization. The suit is accordingly allowed with - 21 - costs awarded to the plaintiff. Let a decree sheet in terms of the judgment be drawn up accordingly. Pending application(s) shall stand disposed of. September 26, 2008 (PC). (Dev Darshan Sud), J. 3