Case: Kalawati (D) Through LRs. &amp; Others Vs. Rakesh Kumar &amp; Others

3. The subject matter of the appeal is an agreement to sell dated 29th May, 1986. A suit was filed by the plaintiff (Rakesh Kumar) in the Delhi High Court being Suit No.1193 of 1987 for specific performance of the agreement to sell. It appears that due to a change in pecuniary jurisdiction, the suit was transferred to the District Courts and wasrenumbered as Suit No.642 of 2001.A disturbing feature of the appeal is that even about 31 years later, the parties are not quite sure about the fate of the agreement to sell entered into in 1986. The period is extremely long and such a lapse of time for the enforcement (or otherwise) of a contract is good reason tothe procedures.4. The appellants (Kalawati and others) are aggrieved by the judgment and decree dated 10th December, 2013 passed by a learned Single Judge of the Delhi High Court in R.F.A. No.521 of 2004.5. In the plaint filed by the respondent (Rakesh Kumar), it was averred that he had entered into an agreement to sell on 29th May, 1986 in respect of land in Rectangle No.81, Killa Nos.21/1), 19/2), 20/2in all measuring 11 bighas and 1 biswa situated in Village Mehrauli, Tehsil Mehrauli, New Delhi. A part of the land was under the absolute ownership/bhumidari of Kalawati while the rest of the land was in the absolute ownership/bhumidari of defendant Nos.2 to 4 (Bishan Prakash, Om Prakash and Ved Prakash).6. As per the agreement to sell, the sale price of the land in dispute was Rs.1,32,000/per acre. An amount of Rs.30,000/was paid by Rakesh Kumar to the defendants as advance payment and part payment towards the sale price for which a receipt was given to him.7. According to Rakesh Kumar, the defendants were obliged to obtain a certain ‘no objectionfrom the appropriate authority for sale of the disputed land and also permissions and clearances but they failed to take any interest in this regard. Accordingly, Rakesh Kumar issued anotice dated 16th May, 1987 to the defendants to carry out their obligations but they failed to do so.8. Faced with this situation, Rakesh Kumar filed a suit before the High Court being Suit No. 1193 of 1987. As mentioned above, the suit was transferred to the District Courts andrenumbered as Suit No.642 of 2001.The prayer in the suit was for specific performance for the agreement to sell dated 29th May, 1986 and for possession of the land in dispute. Along with the plaint, an application was filed by Rakesh Kumar under Order XXXIX of the Code of Civil Procedure for an injunction against alienation of the land in dispute, in which notice was issued to the defendants therein. Rakesh Kumar was granted an interim injunction subject to his depositing the balance sale consideration for restraining the defendants from alienating the land in dispute. It has come on record that Rakesh Kumar did not deposit the balance sale consideration.9. At this stage, it may be mentioned that during the pendency of the suit, the defendants transferred the land in dispute in 1995 to defendant Nos.5, 6 and 7 and that is why the purchasers were impleaded as defendants in the suit.10. The parties filed their written statements to the plaint and the stand taken by the defendants was that the sale consideration of Rs.1,32,000/per acre was ridiculously low and illusory. Additionally, Rakesh Kumar himself was not ready and willing to perform his part of agreement and therefore no relief could be granted to him. It was also averred that Rakesh Kumar did not have the necessary finances to pay the consideration amount and so was not prepared to have the sale deed executed in his favour.11. On the pleadings before him, the Trial Judge framed several issues but we are only concerned with the issue whether the plaintiff (Rakesh Kumar) was at all times ready and willing to perform his part of the agreement. This issue was answered in the negative by the Trial Judge and against Rakesh Kumar resulting in the dismissal of the suit. Among the reasons given by the Trial Judge for coming to the conclusion that Rakesh Kumar was not ready and willing to execute the contract, at all times, was that at the time of grant of interim injunction prayed for by Rakesh Kumar in an application under Order XXXIX of Code of Civil Procedure while the suit was pending in the High Court, he was required to deposit the balance consideration as afor restraining the defendants from selling, mortgaging, alienating or otherwise parting with possession with the land in dispute. The balance sale consideration was not deposited by Rakesh Kumar and therefore, the interim injunction prayed for by him was not granted. In the absence of any injunction against alienating the land in dispute, the defendants transferred it to defendant Nos.5, 6 and 7 in 1995.12. The Trial Judge also noted that from hisit was evident that Rakesh Kumar did not have the resources and sufficient money to purchase the disputed land. He was in possession of only one truck and was earning Rs.10,000/per month. He was not assessed to income tax and he filed his income tax return for the first time in 1994. Earlier inhe had opened a bank account but never had a balance of more than Rs.52,000/in his bank account. Sometime in July, 2002 Rakesh Kumar took a loan of Rs.3.15 lakhs for the purpose of his business from his cousin but the loan was not taken for the purpose of buying the land in dispute. Taking all these factors into consideration, the Trial Judge held that Rakesh Kumar did not have the means to pay the balance consideration and was not ready and willing to perform his part of the contract at all times.13. Feeling aggrieved, Rakesh Kumar preferred a Regular First Appeal before the Delhi High Court. The High Court addressed itself only to the question whether Rakesh Kumar was ready and willing to execute his part of the agreement to sell, at all times. The High Court took the view that rather than Rakesh Kumar, it was the defendants who were not willing to execute the sale deed. The High Court came to this conclusion on the basis of the requirement in terms of the agreement to sell that the defendants were obliged to obtain a ‘no objectionfor executing the sale deed but they had not taken any steps in that regard. The High Court also relied on the affidavit by way of evidence filed by Rakesh Kumar about his capacity to pay the balance sale consideration. It was also noted by the High Court that thenotice sent by him on 16th May, 1987 had not been responded to by the defendants. On a consideration of these factors, it was clear that the defendants were not interested in executing the sale deed.14. On the other hand, as far as Rakeshreadiness and willingness to execute the sale deed is concerned, the High Court noted that in hisrecorded on 4th October, 2002 he explained that just prior to the date of entering into the agreement to sell, he had disposed of his house. Thus, he had sufficient funds available for investing and on this basis, he had agreed to purchase the land in dispute.15. The High Court noted that even though Rakesh Kumar did not deposit the balance consideration for the grant of injunction in his favour, that was of no consequence and could not be held against him.Taking all these factors into consideration, the High Court reversed the view of the Trial Judge and concluded that Rakesh Kumar was entitled to a decree for specific performance of the agreement to sell dated 29th May, 1986 and for delivery of vacant, peaceful and physical possession of the land in dispute.

Court's reasoning:
15. The High Court noted that even though Rakesh Kumar did not deposit the balance consideration for the grant of injunction in his favour, that was of no consequence and could not be held against him.We agree with the High Court only to this limited extent.Having heard learned counsel for the parties, we are not in favour of the view expressed by the High Court but subscribe to the view of the Trial Judge.In so far as the present appeal is concerned, the material on record clearly indicates that Rakesh Kumar did not have the necessary funds available with him to pay the balance consideration. His low income and low bank balance indicated his incapacity to make the balance payment. As far as his capacity to arrange for funds is concerned, it has come on record that Rakesh Kumar did take a loan from his cousin but that was only for his business and not for paying the balance consideration for the land in dispute. There is nothing on record to indicate that Rakesh Kumar could have not only repaid the loan taken from his cousin, but additionally, could have arranged sufficient funds to pay the balance consideration. It is very doubtful, and it is easy and reasonable to infer this, that Rakesh Kumar was incapable of meeting both liabilities.22. On the facts placed before us, we are satisfied that the Trial Judge was right in coming to the conclusion that Rakesh Kumar was not in a position to pay the balance consideration to Kalawati and the other vendors, and by necessary implication, it must be held that he was neither ready nor willing to perform his part of the agreement.23. It was submitted that Kalawati and the other vendors did not perform their part of the agreement despite Rakesh Kumar requesting them to do so. The contention of Rakesh Kumar was that the vendors did not obtain afrom the authorities concerned. We have gone through the agreement to sell dated 29th May, 1986 and the relevant clause of the contract is remarkably vague and reads asthe vendors will obtain the no objection certificate from the authorities concerned and will inform the vendee by registered post after getting the income tax clearance certificate.There is nothing to indicate the nature of thethat the vendors were required to obtain and who were the authorities from whom thewas required, nor is there any indication of the purpose for which thewas required. Similarly, there is no indication about the nature of the income tax clearance certificate required and for what purpose. This clause appears to have been inserted in the agreement to sell without any application of mind and it is quite possible, as alleged by the vendors that the agreement to sell wasafter the introduction of Sectionin the Income Tax Act, 1961. However, we need not go into this possibility in view of the vague nature of the clause.25. On an overall consideration of the facts and in the circumstances of the case, in our opinion, the High Court was in error in setting aside the judgment and decree of the Trial Judge.