CS(OS) 2489/1998 Page 1 of 24 THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 14.12.2010 CS(OS) No. 2489/1998 SHRI NARESH JAIN ..... PLAINTIFF Vs SMT KRISHNA RANI ..... DEFENDANT Advocates who appeared in this case: For the Plaintiff : Mr Gurbaksh Singh with Ms Manjeet Kaur, Advs. For the Defendant: Mr Neeraj Jain alongwith Mr Ashok Malhotra & Mr Vinod Kumar LRs of deceased defendant. CORAM :- HON'BLE MR JUSTICE RAJIV SHAKDHER 1. Whether the Reporters of local papers may be allowed to see the judgment ? No 2. To be referred to Reporters or not ? No 3. Whether the judgment should be reported in the Digest ? Yes RAJIV SHAKDHER, J 1. The instant suit has been filed to claim reliefs of specific performance and possession. The specific performance is sought by the plaintiff qua an agreement to sell dated 25.09.1995 (Ex. P-1) in relation to an immovable property situate at 58, Block B, Dera Ismail Khan Co-operative Housing Building Society Limited, Delhi consisting of basement, ground floor, first floor, second floor alongwith roof, admeasuring 173.33 sq. yds. (hereinafter referred to as „the said property‟). In addition to the above, the plaintiff has made consequential prayers requiring appointment of a court official to execute the sale deed in his favour in the event the defendant refuses to comply with the decree of specific performance in order to effectuate the sale. Similarly, prayer is also made to the effect that the defendant be directed to pay arrears of water, electricity and house tax upto the execution of the sale deed or in the alternative, the plaintiff be permitted to adjust the amount against the balance consideration payable to the defendant. There is one other CS(OS) 2489/1998 Page 2 of 24 prayer of the plaintiff whereby, the plaintiff seeks damages on account of delay in execution of the sale deed and for use of money given as advance by the plaintiff to the defendant under the afore-mentioned agreement to sell (Ex.P-1). 2. There is no dispute, it appears, with respect to the fact that the plaintiff paid towards sale consideration a sum of Rs 6,50,000/- in three tranches; the first two tranches were in the sum of Rs 2 lacs and the third was in the sum of Rs 2,50,000/-. The payments were made by the plaintiff evidently on 23.09.1995 (Ex.P-2), 24.09.1995 (Ex.P-3) and 25.09.1995 (Ex.P-4). This fact, as noticed above, has not been disputed by the defendant. 2.1 It is pertinent to note it is averred in the plaint that the defendant was required to execute the sale deed on or before 31.01.1996. It is the case of the plaintiff that despite a legal notice dated 29.01.1996 (Ex.PW2/1) issued by the plaintiff to the defendant calling upon it to fulfill the pre-requisites for execution of the sale deed, the defendant did not do the needful in that regard. As a matter of fact, it is alleged that the defendant neither replied to nor complied with the request made by the plaintiff in the afore-mentioned notice. It is alleged that the plaintiff thereafter on number of occasions called upon the defendant to fulfill its obligations, in particular, obtain the necessary approvals from the Income Tax authorities which at the relevant point of time were applicable to the transaction in issue. It is alleged that since the defendant procrastinated in the matter, the plaintiff apprehending that his action would be barred by limitation issued another notice dated 23.10.1998 (Ex.PW2/27). Since the defendant failed to comply with the request made by the plaintiff and, apprehending that the defendant would create third party interest in the property, the instant suit was filed on 03.11.1998. 3. The case set up by the defendant, on the other hand, is that it is the plaintiff who had breached obligations undertaken by him under the agreement to sell. The peculiar aspect of this stand is that while the defendant has accepted that an agreement to sell (Ex.P-1) was executed between herself and the plaintiff; a dispute has been raised with respect to the agreement to sell (Ex.P-1) filed by the plaintiff; which is dated 25.09.1995. It is the defendant‟s contention that the agreement to sell (Ex.P-1) which is dated CS(OS) 2489/1998 Page 3 of 24 25.09.1995 and is filed by the plaintiff is not the document which was executed between the plaintiff and the defendant. This defence is sought to be made out by adverting to the fact that the date of purchase of stamp paper on which the purported agreement to sell (Ex. P-1) has been drawn up is 26.09.1995, whereas the document on the face of it has been executed on 25.09.1995. It is, therefore, the contention of the defendant that the agreement to sell (Ex.P-1) produced by the plaintiff is not genuine or the actual agreement which was executed between her and the plaintiff. 3.1 Furthermore, in her defence, the defendant has said that since time was of the essence and the plaintiff was in breach of his obligations the relief of specific performance ought not to be granted to the plaintiff. The defendant has averred that since the prices of immovable properties had fallen, the plaintiff took no interest in effectuating sale, despite the defendant calling upon him to do so for more than two years. In these circumstances, the defendant says that the relief for specific performance at this stage has become unrealistic in so far as the defendant is concerned. 3.2 The defendant furthermore has submitted that the delay has adversely affected her interest, in as much as, the defendant on the assurance that she would receive money against property in issue had entered into a back-to-back agreement with one, Prem Wati on 29.09.1995. By virtue of this agreement, the defendant agreed to purchase from Prem Wati, an immovable property situate at Ganesh Nagar-II, Gali No.8, Shakarpur Khas, Shahadra, Delhi-52 admeasuring 100 sq.yards (hereinafter referred to in short as „Ganesh Nagar property‟). In view of the agreement evidently arrived at between her and Prem Wati on 29.09.1995, the defendant paid a sum of Rs 4,50,000/- to Prem Wati. The balance consideration in respect of Prem Wati‟s property was to be paid by the defendant by 28.02.1996. The defendant has in this regard filed a receipt dated 29.09.1995 (Ex. DW1/3) issued by the Prem Wati. 3.3 Since the plaintiff failed to effectuate the sale transaction with regard to property in issue in the instant suit; it had a cascading effect on the defendant and consequently defendant in turn failed to fulfill her obligations towards Prem Wati and hence, the sum CS(OS) 2489/1998 Page 4 of 24 of Rs 4,50,000 was forfeited by the Prem Wati. This caused pecuniary loss and damage to the defendant. Therefore, for these reasons the defendant avers that she has forfeited the sum of Rs 6,50,000/- paid to her, by the plaintiff. 3.4 It is also the stand of the defendant that the property being lease hold property, it did not require a No Objection Certificate (hereinafter referred to as „NOC‟) from the Income Tax Department. It is averred that title of the property could have been transferred by execution of a General Power of Attorney (in short „GPA‟), agreement to sell, Special Power of Attorney (in short „SPA‟) and receipt etc. 3.5 The plaintiff‟s stand was that he was ready and willing to effectuate the sale transaction qua the property in issue; has been refuted by the defendant. It is specifically averred that the defendant had brought to the knowledge of the plaintiff that she had entered into an agreement with the afore-mentioned Prem Wati for purchase of another property from the amount she was to receive against the sale of the property in issue from the plaintiff. Furthermore, the defendant has averred that the plaintiff did not have the wherewithal, i.e., the balance funds for purchase of the property in issue. 4. In the replication, the plaintiff while refuting the stand of the defendant taken in the written statement has reiterated the averments made in the plaint. It has been specifically highlighted that the legal obligation for obtaining the approval of the Income Tax Authorities was that of the defendant. In this connection the plaintiff has asserted that if the defendant was also ready and willing as was averred to effectuate the sale then, the defendant should have as well initiated the process of executing a GPA, agreement to sell and SPA as was contended by her in her defence. The fact was that, the plaintiff reasserted that not only was he ready and willing to perform his obligations under the agreement to sell, but also had the necessary wherewithal to do so. In this connection, it was asserted that the defendant, on the other hand, did not supply the plaintiff with the copy of the title deeds so that he could prepare the necessary documentation for effecting a sale. CS(OS) 2489/1998 Page 5 of 24 4.1 As regards the agreement to sell (Ex.P-1) not being the original agreement to sell, the plaintiff has refuted the said allegation of the defendant. The plaintiff has submitted that the defendant has while impugning the agreement to sell filed by the plaintiff not stated the terms and conditions of the agreement to sell supposedly entered into between the plaintiff and the defendant and how was it different from the one which is placed on record by him. 5. In support of their pleadings, the plaintiff cited two witnesses these being: Mr Naresh Jain (PW-1) and Mr Ramesh Kumar (PW-2); while the defendant examined only one witness i.e., Mr Ashok Malhotra (DW-1), the son and power of attorney holder of the defendant. The examination-in-chief of witnesses was carried out by way of affidavits of evidence. 5.1 In his examination-in-chief PW-1, replicated the stand taken in the plaint. PW- 1 proved the agreement to sell (Ex.P-1). PW-1 stated that the agreement to sell (Ex.P-1) was executed in his presence and bore his signatures at point A, on each page of the said agreement. PW-1 went on to say that at point B, on each page of the agreement to sell (Ex.P-1), are appended signatures of the defendant. PW-1 identified the signatures of the defendant and, stated that she had signed the said agreement to sell (Ex.P-1) in his presence. PW-1 further stated that the signatures of the witnesses at points C and D were also appended on the said agreement to sell (Ex.P-1), in his presence. Similarly, the witness proved the three receipts dated 23.09.1994 (Ex.P-2), 24.09.1995 (Ex.P-3) and 25.05.1995 (Ex.P-4) evidencing the payment of Rs 6,50,000/- to the defendant in three tranches, out of which, two were in the sum of Rs 2 lac each and, the third, amounting to Rs 2,50,000/-. The witness accepted the fact that the total consideration agreed to between the parties was a sum of Rs 63,50,000/- and that the transaction had to be completed before 31.01.1996; subject to the caveat that the defendant would obtain the approvals of the Income Tax Authorities and the society; and clear all pending dues in respect of the property in issue before 31.01.1996. The society, according to the witness, had to give a NOC for the sale of property in issue. The witness further deposed that CS(OS) 2489/1998 Page 6 of 24 since the defendant had failed to execute the sale deed and documents to effectuate transfer of the property in issue the instant suit for specific performance was filed by him. PW-1 further stated that prior to instituting the instant suit, a legal notice dated 29.01.1996 (Ex.PW2/1) was issued to the defendant calling upon her to fulfill the pre- requisites for effecting a sale. In this regard PW-1 relied upon the said notice and the following receipts to establish that the said notice had been dispatched by various modes. These being: three original postal receipts (Exs.PW2/2, PW2/3 and PW2/4), UPC (Ex.PW2/5), three receipts of speed post (Exs.PW2/6, PW2/7, and PW2/8), and two courier receipts (Exs.PW2/9 and PW2/10). The witness also relied upon the telegram dated 29.01.1996 alongwith postal receipt issued in that connection being (Ex.PW1/18 and Ex.PW1/19). Since the notice sent through speed post was sent back, PW-1 also relied upon the return being (Exs.PW2/20, PW2/20, PW2/22). The witness further deposed that a second notice dated 29.02.1996 (Ex.PW2/19) was issued to the defendant. In this connection, the witness relied upon the postal receipts, UPC, two Acknowledgment Due cards and one return envelop which were marked as Ex.PW1/23 to PW1/30 respectively. There was, according to the witness PW-1, a third notice issued through his lawyer dated 23.10.1998 (Ex.PW2/27) prior to institution of the present suit. The witness, once again relied upon the said legal notice and three postal receipts, UPC which were exhibited as Exs.PW1/28, PW2/29, PW2/30, PW2/31. The witness testified that he was ready and willing to perform his part of the obligations including payment of balance consideration of Rs 57 lacs. The witness testified that since the defendant did not fulfill her obligations despite personal visits, telephonic calls and legal notices, he was constrained to institute the present suit. 5.2 In his cross-examination PW1 accepted the fact that he was not aware whether the property was freehold property or with the society. PW1 further accepted that he had approached the defendant for the first time between 10th and 15th January 1996 to ascertain whether the necessary documents, i.e., the NOC and approval of the income tax authority had been obtained, and if it were so, he would arrange for the balance CS(OS) 2489/1998 Page 7 of 24 consideration. PW1 further put the onus of obtaining the NOC from the society on the defendant. To a specific question as to whether he had produced any document evidencing the fact that he had arranged the balance consideration of Rs 57 lacs, the witness answered by saying that his uncle, who was a diamond exporter, had assured him regarding the availability of the amount. The witness went on to say that he was to obtain the amount from his uncle only after necessary approvals were obtained by the defendant. The witness refuted the suggestion that he was told either by the defendant or her husband that the husband had utilized the money received from the plaintiff towards purchase of the property of Prem Wati. The witness further went on to state that he was unaware of the fact that if he were not to effectuate the sale transaction in respect of the property in issue, the sum of Rs 4.50 lacs paid to Prem Wati by the defendant would stand forfeited. Importantly, PW1 accepted the fact in his cross-examination that, he had for the first time, asked for the original title documents, only in, January, 1996 and furthermore, at the time of agreement to sell he had seen photocopy of the documents of the property in issue. PW1 further accepted the fact that no notice prior to 29.01.1996 was issued to the defendant to effectuate the sale transaction. 5.3 The other witness, i.e., Mr Ramesh Kumar (PW2) referred to the legal notice dated 29.01.1996 (Ex.PW2/1) and the three postal receipts (EXs. PW2/2, PW2/3 and PW2/4), the UPC (Ex. PW2/5) and the speed post receipts (Ex. PW2/6, PW2/7 and PW2/8) as well as the proof of delivery of return notice of the courier (EXs. PW2/9, PW2/10, PW2/11 and PW2/12), the return envelops (EXs. PW2/13, PW2/14, PW2/15, PW2/16, PW2/17 and PW2/18) as also the postal receipts (EXs. PW2/20, PW2/21 and PW2/22), UPC (Ex. PW2/23), and two A.D. cards (Exs. PW2/24 & 25). He also placed reliance on the returned envelop (Ex. PW2/26). PW2 also went on to depose that notice dated 23.10.1998 (Ex. PW2/27) was sent. He also referred to the postal receipts (Exs. PW2/28, PW2/29 and PW2/30) and UPC (Ex. PW2/31) for this purpose. The said witness accepted the fact that the cut off date for effectuating the sale transaction was 31.01.1996, as per the information he had received from the plaintiff. Importantly, PW2 CS(OS) 2489/1998 Page 8 of 24 accepted the fact that notice dated 29.01.1996 (PW2/1) was dispatched only on 31.01.1996 by all three modes, that is, registered post, courier and UPC. According to him, the said notice was sent by speed post on 30.01.1996. The witness deposed that defendant received the notice by courier on 31.01.1996. The witness went on to say that on the return envelopes (Ex. PW2/13-18) there was no date mentioned which indicate as to when they were returned to him. PW2 accepted the fact that both parties were required to perform their respective obligations before 31.01.1996. He testified that he was not in a position to say that to effectuate the transaction whether a sale deed had to be executed or other mode of conveyance were required to be employed. 5.4 To be noted in the examination-in-chief, DW1 basically rebutted the stand taken in the written statement. As indicated above, the defendant examined DW1. DW1 deposed that he was son of the Power of Attorney (POA) holder of the defendant. In this regard he proved his signatures on the Special Power of Attorney (SPA) (Ex. DW1/1) executed in his favour by the defendant at points „A‟ and „B‟. He testified that since the defendant, that is, his mother was old; being: 70 years of age, she could not attend court. In support of his contention, he relied upon a medical certificate (Ex. DW1/2). He also proved the receipt (Ex. DW1/3) executed by Prem Wati in favour of the defendant. DW1 refuted the suggestion that he had obtained a forged medical certificate on 23.01.2005 and immediately thereafter, on the next date got a SPA executed in his favour. DW1 asserted that the stamp paper, on which the agreement to sale (Ex. P-1) was drawn up, was purchased on 26.09.1995. He also stated that therefore, the agreement to sell (Ex. P- 1) could not have been executed prior to the date of purchase of stamp paper. DW1, however, testified that the date on the agreement to sell (Ex. P-1) was written as 25.09.1995, since the document was executed on the said date, i.e., 25.09.1995. He also deposed that exhibits P-1 to P-4 had already been drawn up, and that the plaintiff and the defendant had put their signatures on the document. He categorically accepted the fact that dates were not mentioned by the signatories on the agreement to sell (Ex. P-1). It is important to note that the DW1 accepted the fact that apart from documents, i.e, (Ex. P-1 CS(OS) 2489/1998 Page 9 of 24 to P-4 “no other document was executed between the defendant, i.e., his mother and the plaintiff”. He categorically accepted the fact that on the said document at point ‘X’ are appended the signatures of the defendant, i.e, his mother and similarly, at point ‘Y’ are appended the signatures of the plaintiff. In regard to the payment of dues, with regard to the property in issue, DW1 stated that at the relevant point in time all dues stood paid, and intimation in that regard had been sent to the plaintiff, through the property dealer who was acting as the intermediary in the matter of sale of property in issue. 5.5 To a specific question whether the defendant, i.e., his mother was required to obtain an approval of the income tax authority, and a NOC from the society, the witness answered as follows: “The suit property is on the lease hold plot of the society and the sale deed was not required to be executed and only GPA was to be executed and as such no income tax clearance was required”. To another question as to whether the aforementioned fact was intimated to the plaintiff, the witness answered as follows: “We had informed the property dealer well in advance a week before the date of execution of document that income tax/ society clearance was not required.” 5.6 DW2 further submitted that 15 days prior to the date provided for execution of the sale deed, they had informed the property dealer that they were ready to perform their part of the contract. To another question as to when the defendant became aware of the fact that the plaintiff was not responding to the intimation given by defendant to the property dealer, the DW1 stated as follows: “On the last day of agreement, i.e., 31.1.1996 we were informed by the property dealer that the plaintiff had no arrangement of money and as such agreement could not be completed.” 5.7 The witness further went on to say that they did not contact the plaintiff directly; the transaction was effectuated through the property dealer, who was claiming fee from both sides. DW1 stated that they did not know the plaintiff personally. DW1 further went on to say that the money receipts P-2, P-3 and P-4 were executed in the presence of CS(OS) 2489/1998 Page 10 of 24 the plaintiff and the property dealer. The DW1 accepted the fact that the defendant had not written any letters to the plaintiff in connection with execution of the sale agreement. DW1 refuted the fact that they had received a telegram (Ex. PW1/18). DW1 testified that he was present when the agreement/receipt (Ex. DW1/3) was executed between the plaintiff and the defendant and that the said exhibit bears his signatures at point „A‟. To a specific question as to whether any documents have been filed to demonstrate the genuineness of the transaction entered into between the defendant and Prem Wati; the witness stated that they did not feel that it was necessary to file such document as the receipt (Ex. DW1/3) was signed in their presence, and because Prem Wati was the owner of the property, which the defendant intended to buy. DW1 accepted the fact that they have not sent any notice to Prem Wati or filed a suit against her. He also accepted the fact that Prem Wati also, had not issued any notice to the defendant or filed any suit against them. Suggestions that DW1/3 was fabricated or that Prem Wati did not exist or even that her signatures on DW1/3 were forged – was refuted. The witness also refuted the suggestion that defendant had not advanced any money to Prem Wati, as stated in exhibit DW1/3. The witness also refuted that because in January, 1996 there was escalation in the price of property to the extent of Rs 15-20 lacs, she did not come forward to effectuate the sale. The witness also refuted the suggestion that the plaintiff had arranged the funds and that since approvals, as provided in clause 6 and 7 of the agreement to sale (Ex. P-1) were not obtained, he did not come forward to perform his part of the obligation. The suggestion that: because the defendant did not come forward to perform her part of the agreement, the plaintiff was forced to issue the notice (Ex. PW2/1) and telegram (Ex. PW1/18 & 19), was negatived by the witness. The witness also refuted the suggestion that because of the conduct of the defendant, the plaintiff had suffered a loss. 6. In the light of the pleadings and evidence placed on record Mr Gurbaksh Singh addressed arguments on behalf of the plaintiff, while submissions on behalf of the defendant were made by Mr Neeraj Jain. In support of the plaintiff‟s case Mr Gurbaksh CS(OS) 2489/1998 Page 11 of 24 Singh apart from drawing my attention to the averments in the plaint and the documentary evidence placed on record laid stress on the following:- (i) there is no dispute that a sum of Rs 6.50 lacs has been paid to the defendant; (ii) the plaintiff has always been ready and willing to perform his part of the obligations undertaken under the agreement to sell (Ex.P-1). It was reiterated that the plaintiff was ready and willing to perform his part of the obligations even today; (iii) it is the defendant who was in breach of her obligations under the agreement to