Delhi High Court

Shridhar Bajaj vs Gyanesh Chaudhary on 10 April, 2023

Author:
Neena Bansal Krishna

Bench:
Neena Bansal Krishna

NEUTRAL CITATION NUMBER: 2023:DHC:2429

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Pronounced on: 10th April, 2023

+ CS(OS) 2248/2008 & I.A. 13053/2008

SHRIDHAR BAJAJ
S/o Late Shri Baij Nath Bajaj,
A-118, Ground Floor,
New Friends Colony,
New Delhi-110065 .....Plaintiff
Through: Mr. Rakesh Kumar, Sr. Advocate
with Mr. Vinod Kumar & Mr.
Shashank Sharma, Advocates.
versus
GYANESH CHAUDHARY
S/o Shri. Desh Raj Chaudhary,
24, Daryaganj,
Delhi .....Defendant
Through: Mr. Vinayak Mehrotra, Advocate.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G E M E N T
NEENA BANSAL KRISHNA, J.

1. The plaintiff has sought Specific Performance of Agreement to Sell
dated 09.02.2006 in respect of the Property bearing D.S.I.D.C. Shed No. 83-
84 situated at Okhla Industrial Area, Phase-II, Scheme-I, New Delhi-110020
(hereinafter referred to as "the suit property") and Permanent Injunction for
restraining defendant from creating third party rights in the suit property.

2. The facts in brief are that the plaintiff entered into an Agreement to
Sell dated 09.02.2006 in respect of the suit property with the defendant for a
total consideration of Rs. 1,24,00,000/-. The plaintiff paid a sum of Rs.

Signature Not Verified CS(OS) 2248/2008 Page 1 of 37

Digitally Signed

By:SAHIL SHARMA

Signing Date:10.04.2023

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24,00,000/- through cash and cheque with the acknowledgement in the
Agreement itself. Clause 2 of the Agreement provided that the balance
amount of Rs. 1,00,00,000/- would be paid by the plaintiff within 15 days of
the registration of the Conveyance Deed in respect of suit property in the
name of the defendant by Delhi State Industrial Development Corporation
(hereinafter referred to as "D.S.I.D.C.") and the defendant shall deliver the
vacant possession of the suit property to the plaintiff thereof.

3. Clause 7 of the Agreement provided that if the Conveyance Deed is
not received from D.S.I.D.C by 30.04.2006, the Agreement shall be treated
as cancelled and the first party (defendant) shall be entitled to the refund of
entire amount. However, it is also stated that the Agreement may be
extended at the discretion of the plaintiff herein. Further, Clause 9 of the
Agreement provided that it is an irrevocable Agreement. The three clauses
read as under:

"2. That the balance amount of Rs. 1,00,00,000/- (Rupees
One Crore only) will be paid by the Second Party to the First
Party after getting the Conveyance Deed in favour of the
First Party of the said property and within 15 days of
registered conveyance deed of the said property in favour of
first party; and the First Party; will deliver the vacant
physical possession of the said property to the Second Party
at the time getting the final payment and execute the required
documents in favour of the Second Party.

...

7. In case the offer from D.S.I.D.C is not received by the first
party by 30.04.2006 then this agreement will be treated as
cancelled and first party will refund the entire amount
received from the second party to the second party within 7
days or the Agreement will be extended at the discretion of
the second party.

...

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9. That this Agreement is irrevocable and if any of the parties
fails to complete the transaction, the aggrieved party shall
get it enforced through court of law and the defaulting party
shall be liable for all expenses, costs, incurred and damages
suffered."

4. Admittedly, on 30.04.2006, the parties mutually consented to extend
the Agreement upto 30.06.2006. The plaintiff has claimed that the defendant
on an erroneous interpretation of the Agreement, wrote a letter dated
06.07.2006 stating that since the Conveyance Deed from D.S.I.D.C. has not
been received on 30.04.2006 and thereafter till 30.06.2006, the Agreement
has come to an end in terms of the Clause 7 of the Agreement and the
amount of Rs. 24,00,000/- was returned by way of Bank Pay Order.

5. The plaintiff on receipt of the said letter gave a Legal Notice through
his counsel dated 12.07.2006 to the defendant stating that it was the
discretion of the plaintiff to extend the time as per Clause 7 of the
Agreement and the time stood extended to such time till the Conveyance
became available to the defendant and that the plaintiff was ready and
willing to complete the transaction as he had sufficient funds for completion
of the transaction; time was not the essence of the Contract and that the
refund of the amount was on false and frivolous assertions. The plaintiff
called upon the defendant to complete the transaction, lest he would initiate
legal proceedings for Specific Performance of the Agreement to Sell. The
defendant reiterated vide letter dated 28.07.2006 asserting that the
Agreement has come to an end as no Conveyance Deed has been received
from D.S.I.D.C.

6. The plaintiff has claimed that the defendant has interpreted the
Agreement incorrectly since Clause 7 provided for extension of the

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Digitally Signed

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Signing Date:10.04.2023

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Agreement by the plaintiff and Clause 9 specifically provided that the
Agreement was irrevocable. The plaintiff till date has not encashed the Pay
Orders.

7. It is asserted that the defendant has taken a false plea of D.S.I.D.C.
not having given any Conveyance Deed; rather the defendant has become
dishonest as he wants more money. The plaintiff has asserted that the
damages can neither be computed in terms of money nor is it an adequate
compensation for the failure on the part of the defendant to perform the
Agreement. The plaintiff has thus sought Specific Performance of the
Agreement dated 09.02.2006 and Permanent Injunction for restraining the
defendant from selling, alienating, transferring, parting with possession or
creating any third-party rights, by way of this suit.

8. The defendant in his Written Statement has admitted having
entered into an Agreement dated 09.02.2006. It is explained that the sheds
were made available by D.S.I.D.C. to various entrepreneurs on Hire-
Purchase basis. However, the terms of Hire-Purchase Agreement could not
be finalized by D.S.I.D.C., thought it continued to charge the monthly lease
rent from the entrepreneurs with the understanding that the same would be
adjusted against the cost of Hire-Purchase.

9. Eventually, D.S.I.D.C. made some offer of Hire-Purchase to the
defendant, but like many other entrepreneurs, he did not accept the offer.
Litigation was commenced under
Public Premises (Eviction of Unauthorized
Occupants) Act, 1971
which continued for more than a decade at various
legal fora.

10. D.S.I.D.C. vide its Letter dated 27.07.2005 sought acceptance by
10.08.2005 of its offer given vide Letter dated 29.01.2004, so that thereafter

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the dues statement could be made available to the allottees. The defendant
accepted the offer vide Intimation Letter dated 10.08.2005 and requested
D.S.I.D.C. to send the statement of account at the earliest. However, because
of the background of the litigation and the manner it had culminated, there
was uncertainty whether D.S.I.D.C. would agree to sell the suit property to
the allottees. The defendant thus, entered into the Agreement to Sell with the
plaintiff.

11. The defendant did not receive the offer from D.S.I.D.C. till
30.04.2006. Mutually, parties agreed to extend the Agreement till 30.6.2006
with an endorsement to that effect on the Agreement which was signed by
both the parties. Even thereafter no offer was received from D.S.I.D.C. till
30.06.2006 and accordingly in terms of the Clause 7 of the Agreement, the
defendant refunded the sum of Rs. 24,00,000/- by way of Pay Orders along
with the Letter dated 06.07.2006 informing the plaintiff that the Agreement
stood cancelled as final purchase offer from D.S.I.D.C. had not been
received till 30.06.2006 and the plaintiff had also not exercised his
discretion to extend the Agreement. The plaintiff responded through a Legal
Notice dated 12.07.2006 incorrectly claiming that it was in the discretion of
the plaintiff that time was extended till 30.06.2006, when in fact, it was
extended by mutual consent of the parties. The defendant has denied that he
ever made any representation to the plaintiff that the Conveyance Deed shall
become available to him by 30.06.2006 after which the transaction may be
completed. The defendant has further asserted that it was incorrectly claimed
by the plaintiff that the time was not the essence of the Contract. Earlier too,
on 30.04.2006 which was the date of expiry stipulated under Clause 7 of the
Agreement, the plaintiff met the defendant and extended the date further till

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Digitally Signed

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Signing Date:10.04.2023

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30.06.2006, by mutual consent. The subsequent conduct of the parties makes
it abundantly clear that time was the essence of Contract. The receipt of the
Pay Order in the sum of Rs. 24,00,000/- has also been acknowledged by the
plaintiff. Though in the Legal Notice dated 12.07.2006, the plaintiff had
asserted that the Conveyance Deed may be executed and physical possession
be handed over within 15 days of receipt of the reply failing which a Suit for
Specific Performance of the Contract shall be filed against the defendant,
but there is no explanation as to why the plaintiff continued to retain the Pay
Order or not inform the defendant of his intention to not encash it. The
plaintiff‟s conduct in retaining the Pay Order clearly conveys his acceptance
of revocation of Agreement to Sell.

12. The defendant has further asserted that the Contract was a contingent
Contract and the amount was liable to be refunded to the plaintiff in the
event the terms of the Contract did not materialize within the fixed time. It is
further asserted that since the Agreement was extended with the mutual
consent of both the parties on the first occasion on 30.04.2006, the clause
leaving the discretion to the plaintiff to extend the Agreement automatically
stood rescinded and modified to the extent that the mutual consent of both
the parties became necessary for further extension of the Agreement. It is
claimed that even if it is assumed that the plaintiff had discretion to extend
the Agreement, this should have been exercised by 30.06.2006 as was done
before the earlier deadline, and on his failure to do so, the Agreement stood
cancelled. The defendant became bound to refund money within 7 days
according to terms of the Agreement, which was refunded by way of Pay
Order to the plaintiff. This also reaffirms that time was the essence of the
Agreement.

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Digitally Signed

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Signing Date:10.04.2023

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13. The defendant has also stated that on account of his strenuous and
sustained efforts and various letters, D.S.I.D.C. ultimately sent a Letter
dated 11.08.2006 in which it made a reference to the defendant‟s Letter
dated 24.07.2006 addressed to the Chief Secretary, Government of N.C.T. of
Delhi and the Chairman, D.S.I.D.C., and informed that the request of the
allottees had been acceded to, meaning thereby that D.S.I.D.C. agreed to
give the suit property to the allottees on their making one time full payment.
The defendant vide his Letter dated 14.08.2006 informed D.S.I.D.C. about
the co-allottees, namely, Shri B.K. Gupta, Smt. Chitra Chaudhry and Shri
K.C. Bothra, having retired voluntarily from the partnership business and
sought the transfer in his name vide Letter dated 14.08.2006. The request
was accepted by the D.S.I.D.C. vide its Letter dated 22.08.2006. The total
cost of suit property and the transfer charges was calculated as Rs.
73,38,096.38/- and after adjustments of various amounts, the total demand
of Rs. 18,82,375.62/- was raised on the defendant. The defendant paid the
entire amount by arranging the requisite amount through loan of Rs.
16,00,000/- by mortgaging the suit property from Jain Co-operative Bank
Limited.

14. The defendant has asserted that it was not within the power of the
defendant to get the Conveyance Deed executed within the period as
mentioned in the Legal Notice, and infact, no Conveyance Deed till date has
been executed in his favour by D.S.I.D.C. Irrespective of this, no further
communication was received from the plaintiff after his Legal Notice, and
the present Suit was filed by the plaintiff on 15.10.2008 i.e. after about 2½
years.

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Digitally Signed

By:SAHIL SHARMA

Signing Date:10.04.2023

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15. The defendant has further explained that during the period between
1983 and 2005, the defendant was consistently getting bulk orders for
manufacturing electronic and electro-mechanical equipment for Indian Air
Force. However, the defendant‟s business suddenly dried up from October,
2005 and did not foresee any improvement in future and on account of sheer
frustration, the defendant decided to sell the suit property and entered into
the Agreement with the plaintiff. However, the sluggishness of the business
was a temporary phase and thereafter, the business again picked up. Since
the plaintiff did not extend the Agreement after its expiry on 30.06.2006, it
led the defendant to believe that the plaintiff has accepted that the
Agreement no longer survived, and the defendant decided to retain the suit
property. It is asserted that Specific Performance of the Agreement would
now result in extreme hardship. Moreover, since the terms of the Contract
were never complied with, the plaintiff is not entitled to any Decree of
Specific Performance.

16. The plaintiff in his Replication has reaffirmed his assertions as
contained in the Plaint.

17. The issues were framed on 22.09.2009 which read as under:

"1. Whether the plaintiff proves that he was ready and
willing to perform his part ofthe contract and continues to be so
(to perform his part of the contract) dated09.02.2006? OPP;

2. Whether by reason of clause-9 of the agreement to sell
dated 09.02.2006, the contract is irrevocable? OPP;

3. Whether time was the essence to the contract, as claimed
by the defendant? OPD.

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4. Whether the contract between the parties cannot be
enforced, as claimed for the reason that it was a contingent
contract? OPD;

5. Whether the plaintiff is disentitled to any relief as he did
not seek extension of the contract beyond the extended period
i.e., 30.06.2006;

6. Is the plaintiff entitled to a decree for specific
performance of the agreement to sell dated 09.02.2006? OPP;

7. Relief."

18. PW1/plaintiff tendered his evidence by way of affidavit Ex. PW1/A.
The Advance Receipt-cum-Agreement to Sell dated 09.02.2006 is Ex.
PW1/1; endorsement of extension of time upto 30.04.2006 on the
Agreement to Sell is Ex. PW1/2; the Letter dated 06.07.2006 of the
defendant written to the plaintiff is Ex. PW1/3; Recall Notice dated
12.07.2006 is Ex. PW1/4 and the Reply dated 28.07.2006 is Ex. PW1/5.
The testimony and the documents in detail shall be considered subsequently.

19. DW1/defendant tendered his evidence by way of affidavit i.e. Ex.
DW1/A. The DW1 proved the Letter dated 27.07.2005 received from
D.S.I.D.C. and his Letter of Acceptance dated 10.08.2005 are Ex. DW1/1
and Ex. DW1/2 respectively. The copy of the Letter dated 31st January,
2006, vide which part payment of Rs. 12,00,000/- by two cheques was made
by the defendant is Ex. DW1/3. The endorsement of extension made by the
plaintiff and the defendant on the Original Agreement is Ex. DW1/4. The
Letter dated 08.05.2006 and 24.07.2006 written by the defendant to the
Chairman, D.S.I.D.C. are Ex. DW1/5 and Ex. DW1/6 respectively. The
Letter dated 24.07.2006 written by the defendant to the Chief Secretary,

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Government of N.C.T. of Delhi is Ex. DW1/7. The testimony and the
documents in detail shall be considered subsequently.

20. Learned Senior Counsel on behalf of the plaintiff has submitted
that essentially the facts are not in dispute; no time was prescribed for
concluding the Sale and in terms of Clause 4, all the formalities were to be
fulfilled by the defendant. The Agreement could have been cancelled in
accordance with Clause 7 only if D.S.I.D.C. refused to execute the
ownership documents in favour of the defendant. Admittedly, the defendant
has acquired ownership in the suit property and since the Contract never
stood rescinded and was irrevocable in terms of Clause 9 of the Agreement
where no time limit was prescribed for its execution, the plaintiff is entitled
to the execution of the Sale Deed. It is further argued that the plaintiff by not
encashing the Pay Order in the sum of Rs. 24,00,000/- clearly manifested his
intention of not recalling the Agreement. Clause 7 of the Agreement was
explicit in providing that the Agreement could be cancelled if the offer was
not received from the D.S.I.D.C. Admittedly, the defendant has received the
Conveyance Deed and has also been handed over the possession.

21. According to the terms of the Agreement, if any of the party failed to
complete the transaction, the aggrieved party had a right to get it enforced
through court of law and the defaulting party was liable for all expenses
incurred and damages suffered.

22. It is further argued on behalf of the plaintiff that the time was not the
essence of the Agreement to Sell and the same still subsists, giving the right
to the plaintiff to seek a Decree for Specific Performance of the Agreement
to Sell.

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23. Learned Senior Counsel on behalf of the plaintiff has placed reliance
on the decisions in
Ferrodous Estates (Pvt) Ltd. vs. P. Gopirathnam (Dead)
and Ors.
SCC OnLine 825, Chandee Widyawati Vati Madden vs. Dr.
C.L. Katial

AIR 1964 SC 978, R.C. Chandiok & Anr. vs. Chuni Lal
Sabharwal & Ors.
(1970) 3 SCC 140, Ajit Parshaad Jain vs. N.K.
Widhani&Ors.

AIR 1990 Del 42, Vinod Singh vs. Phutori Devi(
2006) 87
DRJ 567, Rattan Lal vs. S.N. Bhalla
(
2012) 8 SCC 659 and A. Kanthamani
vs. Narseen Ahmed
(2017) 4 SCC 654.

24. Learned counsel on behalf of the defendant has contended that the
Agreement to Sell was extended till 30.06.2006 mutually by the parties by
an endorsement made on the Agreement to Sell/Ex. PW1/1. In terms of the
Agreement, since the Conveyance Deed was not forthcoming from
D.S.I.D.C., the Contract stood rescinded as is evident from the conduct of
the parties. The defendant immediately refunded the sum of Rs. 24,00,000/-
on 06.07.2006 in terms of the Agreement to Sell vide Pay Order which was
admittedly received by the plaintiff. The plaintiff thereafter did not express
any readiness and willingness but merely claimed that the Sale Deed may be
executed in his favour after the Conveyance Deed is received by the
defendant from D.S.I.D.C. There is no equity in favour of the plaintiff in
terms of the unamended
Specific Relief Act, 1963
.

25. It is further submitted that in terms of the Agreement, the payment
had been returned to the plaintiff through Pay Order and was not aware of
non-encashment of the Pay Order. The plaintiff maintained stoic silence
after his Legal Notice and the present suit was filed after 28 months in 2008.

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26. It is submitted that the plaintiff had sought re-validation of Pay Order
during the trial, but the same was rejected vide Order dated 16.01.2019 in
terms of
Section 22
of the Specific Relief Act, 1963.

27. It is further argued that after the expiry of the Agreement on
30.06.2006 about which a definite Notice was given by the defendant, there
was no renewal/extension of the Agreement by the plaintiff and the
Agreement stood concluded on 30.06.2006. No Agreement to Sell survived
thereafter for the plaintiff to claim its execution. Moreover, the plaintiff
never ever made any enquiry about the execution of the Conveyance Deed
by D.S.I.D.C in favour of the defendant. The plaintiff has also failed to show
that he had the funds available or that he was ready and willing to perform
his part of the Agreement.` Moreover, the plaintiff has not sought any
declaration that determination of Contract was bad in law. In the absence of
any such declaration, the Suit for Specific Performance is not maintainable.

28. The fundamental requirements of specific performance of an
Agreement to Sell as mentioned in
Section 55
of the Specific Relief Act,
1963 have neither been pleaded nor proved; for which reason the Suit is
liable to be dismissed.

29. Learned counsel on behalf of the defendant has placed reliance on the
decisions in
Om Prakash Aggarwal v. Raj Kumar Mittal
2019 SCC OnLine
Del 7486, Mohinder Kaur v. Paul Singh (
2019) 9 SCC 358, Dharampal
Satyapal Ltd. v. Sanmati Trading and Investment Ltd. &Anr.judgement

dated 16th January, 2020 in FAO(OS) 219/2016, Shenbagam&Ors.

v.
K.K.Rathinavel 2022 SCC OnLine SC 71, U.N. Krishnamurthy (since
deceased) v. A.M. Krishnamurthy 2022 SCC OnLine SC 840KattaSujatha

Reddy &Anr. v. Siddamsetty Infra Projects Pvt. Ltd. &Ors.
2022 SCC

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OnLine SC 1079 and KolliSatyanarayana (Dead) by LRs v.
ValuripalliKesavaRaoChowdhary (Dead) through LRs &Ors. 2022 SCC
OnLine SC 1306.

30. Submissions heard. My issue-wise findings are as under:

ISSUE NO. 1:

1. "Whether the plaintiff proves that he was ready and willing to
perform his part of the contract and continues to be so (to perform
his part of the contract) dated 09.02.2006?

31. The plaintiff has sought the relief Specific Performance of the
Agreement to Sell dated 09.02.2006 Ex. P1.

32. The principles relating to specific performance contained in
Sections
16(c)
,
,
,
and
of the Specific Relief Act, 1963 read with Forms
47/48 of Appendix A to C
of the Code of Civil Procedure
, 1908 were
summarized by the Supreme Court in
Kamal Kumar v. Premlata Joshi
SCC OnLine SC 12 as under:

"10. It is a settled principle of law that the grant of relief of
specific performance is a discretionary and equitable relief. The
material questions, which are required to be gone into for grant
of the relief of specific performance, are First, whether there
exists a valid and concluded contract between the parties for
sale/purchase of the suit property; Second, whether the plaintiff
has been ready and willing to perform his part of contract and
whether he is still ready and willing to perform his part as
mentioned in the contract; Third, whether the plaintiff has, in
fact, performed his part of the contract and, if so, how and to
what extent and in what manner he has performed and whether
such performance was in conformity with the terms of the
contract; Fourth, whether it will be equitable to grant the relief
of specific performance to the plaintiff against the defendant in
relation to suit property or it will cause any kind of hardship to
the defendant and, if so, how and in what manner andthe extent
if such relief is eventually granted to the plaintiff; and lastly,

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whether the plaintiff is entitled for grant of any other alternative
relief, namely, refund of earnest money etc. and, if so, on what
grounds.

11. In our opinion, the aforementioned questions are part of the
statutory requirements (See
Sections 16 (c)
,
,
,
,
of
the Specific Relief Act, 1963 and the forms 47/48 of Appendix A
to C
of the Code of Civil Procedure
). These requirements have
to be properly pleaded by the parties in their respective
pleadings and proved with the aid of evidence in accordance
with law. It is only then the Court is entitled to exercise its
discretion and accordingly grant or refuse the relief of specific
performance depending upon the case made out by the parties
on facts."

33. Admittedly, there was a valid and concluded Agreement to Sell dated
09.02.2006 between the parties in respect of the suit property, which
satisfies the first condition.

34.
Section 16(c)
of the Specific Relief Act, 1963, though does not
require any specific phraseology, but it mandates that the plaintiff has to
necessarily aver that he has performed or has always been willing and ready
to perform his part of the Contract.

35. The second aspect which is of extreme significance is whether the
plaintiff had been, and is still ready and willing to perform his part as
mentioned in the Agreement. The extent and the manner in which the
Agreement has been performed and whether it was in conformity with the
terms of the Contract, needs to be further considered.

36. The legislature has chosen to use two phrases, namely readiness and
willingness. The readiness indicates the financial capacity of the plaintiff to
perform the Agreement, while the willingness indicates his state of mind.
In
so far as readiness is concerned, further question is required to be proved

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through evidence that he had the financial capacity, as has been explained in
the case of
K.V. Balan (Dead) Through Legal Representatives v. Bhavyanath

2015 SCC OnLine Kel 298.

37. In Syed Dastagir v. T.R. Gopalakrishna Setty (1999) 6 SCC 337, the
Apex Court while construing the connotation of readiness and willingness,
observed that the compliance of "Readiness and willingness has to be in
spirit and substance and not in letter and form. So to insist for mechanical
production of the exact words of a statute is to insist for the form rather than
essence. So absence of form cannot dissolve an essence if already pleaded."
It was also observed that the plea of readiness and willingness is not an
expression of art and science, but an expression through words to place fact
and law of one‟s case for a relief. In order to gather true spirit behind a plea
it should be read as a whole and to test whether the plaintiff has performed
his obligations, one has to see the pith and substance of the plea. Unless
statute "specifically require a plea to be made in any particular form, it can
be in any form. No specific phraseology or language is required to take such
a plea."

38.
In
H.P. Pyarejan v. Dasappa (Dead) By L.Rs. &Ors.
(2006) 2 SCC
496, the Apex Court observed that the plaintiff is required to prove
continuous readiness and willingness from the date of the contract to the
time of the hearing, to perform the contract on his part. Failure to make good
that averment brings with it and leads to the inevitable dismissal of the
Suit.

In
Motilal Jain v. Ramdasi Devi
(2000) 6 SCC 420, the Apex Court
had expounded the same principle that averments in the plaint must reflect
the readiness and willingness on the part of the plaintiff.

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39. The connotation of readiness in the context of
Section 16
was
explained in
Raghunath Rai & Another v. Jageshwar Prashad Sharma

(1999) 50 DRJ 751 that the intending purchaser need not produce the money
or to vouch a concluded scheme for financing the transaction; it is sufficient
for the purchaser to establish that he has the capacity to pay. The financial
capacity has to be however, proved strictly and self-serving statements
cannot discharge the burden of proving existence of financial capacity as
noted by this Court in the case of Baldev. v. Bhule (2012) 132 DRJ 247.

40. Similar view has been expressed in M/s
Hotz Industries Pvt. Ltd. v.
Dr. Ravi Singh
2018 SCC OnLine Del7618 and Manhor Lal Khetrapal and
Ors. v. Hari Chand and Ors. MANU/DE/2934/2018.

41. Mere establishing "readiness" in the plaint itself is not sufficient to
meet the rigors of
Section 16
of the Specific Relief Act, 1963. It has to be
continuous as explained by the Apex Court in the case of
N.P. Thirugnanam
v. Dr. R. Jagan Mohan Rao
(1995) 5 SCC 115, by stating that "the
continuous readiness and willingness on the part of the plaintiff is a
condition precedent to grant the relief of specific performance..... If the
plaintiff fails to either aver or prove the same, he must fail. To adjudge
whether the plaintiff is ready and willing to perform his part of the contract,
the court must take into consideration the conduct of the plaintiff prior and
subsequent to the filing of the suit along with other attending circumstances.
The amount of consideration which he has to pay to the defendant must of
necessity be proved to be available. Right from the date of the execution
till date of the decree he must prove that he is ready and has always been
willing to perform his part of the contract. As stated, the factum of his
readiness and willingness to perform his part of the contract is to be

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adjudged with reference to the conduct of the party and the attending
circumstances. The court may infer from the facts and circumstances
whether the plaintiff was ready and willing to perform his part of the
contract."

42.
In
Aniglase Yohannan v. Ramlatha and Others
(2005) 7 SCC 534, the
Apex Court further observed that the court has to grant relief on the basis of
the conduct of the persons seeking relief. If the pleadings manifest that the
conduct of the plaintiff entitles him to get the relief on perusal of the plaint,
he should not be denied the relief. The averments in the plaint as a whole
must clearly indicate the readiness and the willingness.
Section 16(c)
of the
Specific Relief Act, 1963 mandates the plaintiff not only to make averments
in the plaint but also to establish fact by evidence aliunde about his
readiness and willingness to perform the Contract.

43. In Man Kaur (Dead) By LRs. v. Hartar Singh Sangha (2010) 10 SCC
512, it was further qualified by the Supreme Court that even assuming that
the defendant has committed breach, it is for the plaintiff to aver in the plaint
and prove that he has always been ready and willing to perform the essential
terms of the contract which required to be performed by him.

44. The Supreme Court in
Madhukar Nivrutti Jagtap v. Pramilabai
Chandulal Parandekar2019
SCC OnLine SC 1026 held that the requirement
to prove readiness and willingness is not that the plaintiff should
continuously approach the defendant with payment or make incessant
requests for performance. The requirement of readiness and willingness of
the plaintiff is not theoretical in nature but is essentially a question of fact
which needs to be determined in reference to the pleadings and the evidence
led by the parties.

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45. Similar observations were made by the Apex Court in
Bhavyanath v.
K.V. Balan (Dead) Through Legal Representatives
(2020) 11 SCC 790
where the Apex Court, while considering the financial capacity to pay the
consideration, explained that the law is not that the plaintiff must prove that
he has cash in his hand from the date of Agreement till the relevant date. But
what is important to be proved is that he had the capacity to allow the deal to
go through. Therefore, if the plaintiff is able to prove his assets which can be
converted into cash either by sale or by loan, it is sufficient to prove the
financial capacity of the plaintiff. Even if the plaintiff is able to establish
that the defendant has refused to execute the Sale Deed and thereby
committed a breach, is not sufficient to entitle him for specific performance
unless he is also able to prove his own readiness and willingness.

46.
In the recent judgment of
U.N. Krishnamurthy (Since Deceased) v.
A.M. Krishnamurthy
2022 SCC OnLine SC 840, the Apex Court has
reiterated that in order to prove "readiness and willingness" to perform the
obligation to pay money in terms of the contract, the plaintiff would have to
not only make the requisite averments in the plaint but also adduce evidence
to show the availability of funds to make payment in terms of the contract.
The plaintiff would have to prove that he had sufficient funds or was in a
position to raise funds in time to discharge his obligations under the
contract. If he does not have sufficient funds with him to make the required
payment of money, he would have to specifically show how the funds would
be made available by him. Such readiness and willingness have to be proved
all along till the decision of the Suit.

47. In view of the above discussed cases, the law of evidence of the
parties may be considered.

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48. The plaintiff has stated one line in his plaint and his affidavit of
evidence Ex. PW1/A that he is ready and willing to perform his part of the
Contract, but the same is not supported by any details as to whether he has
the financial capacity or has sufficient means/money to pay the balance
consideration amount.

49. The plaintiff, except a bald averment, has failed to substantiate his
assertions or to prove the same with any evidence whatsoever. The only
conclusion that can be drawn out is that there was no "readiness" on the part
of the plaintiff to honour the Agreement to Sell.

50. The other aspect which needs consideration is whether or not the
plaintiff was willing to perform his part of the Contract.

51. As already noted above, the „willingness‟ is in reference to conduct,
past and future, of the plaintiff.

52. It would be pertinent to refer to the affidavit of evidence of the
plaintiff Ex. PW1/A, where he has deposed that the defendant had
deliberately and intentionally delayed in getting the permissions form
D.S.I.D.C for execution of Conveyance Deed with a view to avoiding the
extension of the Agreement, but he has himself admitted in his cross-
examination that after the termination of the Agreement on 30.06.2006, he
did not write any letter seeking extension of the Agreement in terms of
Clause 7 of the Agreement to Sell. The plaintiff has deposed that he had
approached the defendant on 30.06.2006, but he was not found available in
the factory. He has also claimed that he had visited the defendant after
30.06.2006 to state that he intended the Agreement to be extended but he has
admitted that neither he wrote any letter nor gave any Notice to the
defendant expressing his intention to extend the Agreement to Sell.

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53. The defendant has categorically deposed that immediately after
30.06.2006 in accordance with the terms of the Agreement to Sell, he not
only wrote a letter informing the plaintiff about termination of the
Agreement, but also returned a sum of Rs. 24,00,000/- which he had
received from the plaintiff.

54. The defendant has further deposed that a sum of Rs. 24,00,000/- had
got debited from his account on preparation of the Pay Order. The defendant
could not have possibly known about the non-encashment, especially unless
he was informed by the plaintiff which he admittedly did not do.

55. Interestingly, the plaintiff himself has admitted in his
cross-examination his intention to not continue with the Agreement and the
same is also evident from the fact that despite having received Pay Orders
along with Letter dated 06.07.2006 Ex. P3 from the defendant, he admittedly
did not mention about non-encashment of the Pay Orders in his Legal Notice
dated 12.07.2006 Ex PW 1/4. Had there been any intention on the part of
the plaintiff to continue with the Agreement, there was nothing which
prevented him from mentioning the same in his Legal Notice dated
12.07.2006 Ex PW 1/4. The very fact that there is no mention of extension
of the Agreement reflects the conduct of the plaintiff that he had intention to
extend the Agreement beyond 30.06.2006. In addition to this, it is the
plaintiff‟s own admission in his cross-examination that he retained the Pay
Order of Rs. 24,00,000/- even after sending the Legal Notice dated
12.07.2006/ Ex PW 1/4. This act of retaining the Pay Order lends no
credibility to the intention of extending the Agreement that was expressed
through Legal Notice dated 12.07.2006 and the testimony of the plaintiff.

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56. Another significant admission made by the plaintiff in his
cross-examination is that after receiving the Pay Orders in the sum of Rs.
24,00,000/- sent by the defendant, he went to meet the defendant who told
him that as per the instructions of his wife, the suit property was not to be
sold. According to the plaintiff himself, the defendant had claimed that he
did not want to sell the suit property, though it is denied by the defendant in
his testimony that the plaintiff ever met him after 30.06.2006. But even if
this assertion of the plaintiff is accepted, it only conveys that he did not seek
any further extension as the defendant also did not want to continue with the
Agreement.

57. In the end, the cross-examination of the defendant to the effect that
neither did he try to find out the status of the suit property nor did he make
any enquiry from D.S.I.D.C as to whether the Sale Deed has been executed
in favour of the defendant reflects his inaction and disinterest to continue
with the Agreement to Sell. This fact was also admitted by the plaintiff in
his cross-examination. The subsequent conduct of the plaintiff reaffirms that
he had no intention to continue with the Agreement to Sell.

58. There is abundant evidence on record and the admissions made by the
plaintiff himself to prove that he himself had no intention or willingness to
continue with the Agreement.

59. It is thus proved that the plaintiff was neither willing nor ready for the
execution of the Agreement to Sell, and for this reason, he did not seek any
extension of the Contract beyond 30.06.2006 which disentitles him from
seeking specific performance of the Agreement to Sell.

60. The Issue No. 1 is decided against the plaintiff.

ISSUE NOS. 3 & 5:

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"3. Whether time was the essence to the contract, as claimed by the
defendant?"

"5. Whether the plaintiff is disentitled to any relief as he did not seek
extension of the contract beyond the extended period i.e.,
30.06.2006."

61. An objection has been taken by the defendant that the time as
prescribed under the Agreement was the essence and since the plaintiff did
not come forth till 30.06.2006 which was agreed to be the date for execution
of the Agreement as was provided in Clause 7, the Agreement stood vitiated.

62. To appreciate this contention, it would be pertinent to reproduce the
relevant clause of the Agreement to Sell Ex. P1 which is as under:

"Clause 7-
In case the offer from D.S.I.D.C is not received by the
first party by 30.04.2006 then this agreement will be treated as
cancelled and first party will refund the entire amount received
from the second party to the second party within 7 days or the
Agreement will be extended at the discretion of the second
party."

63. Before considering this contention on the facts of this case, it would
be pertinent be consider whether the time principally, is the essence of an
Agreement to Sell. In earlier days, Time for performance of Agreement to
Sell was not considered as essence.

64. The Madras High Court in
S.V. Sankaralinga Nadar v. P.T.S.
Ratnaswami Nadar
AIR 1952 Mad 389 observed that the time difference of
six months that was agreed in the Agreement to Sell for execution of the
Sale Deed may not amount to essence of Contract, but it must have some
meaning. Not for nothing could such time-limit would have been prescribed.
Neither can it be posted as a rule of law or rule or prudence where time is

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not made the essence of Contract, all stipulations of time provided in the
Contract would have no significance or meaning or that they are as good as
non-existent. All it means is that while exercising its discretion, the Court
should also bear in mind that when the parties have prescribed certain
limits for taking steps by one or the other party, it must have some
significance and the time limits cannot be ignored altogether on the ground
that the time has not been made the essence of the Contract where there is
total inaction on the part of the plaintiff for two and a half years which itself
is in clear violation of the terms of the Agreement which required him to do
certain things, such delay along with other accompanying circumstances
which would make it inequitable to grant the relief of Specific Performance,
would become relevant in a case of Specific Performance.

65. The logic as to why in earlier judgments, time was not being held as
of essence in the Agreement to Sell, was given by the Apex Court in
K.S.
Vidyanadam and Others v. Vairavan
(1997) 3 SCC 1, wherein it was
observed that the Courts of India following certain early decisions of
English Courts have held that in the Agreement to Sell, time is not an
essence of the Contract unless specifically provided to that effect. However,
the Court cannot be oblivious to the reality of the constant and continuous
rise in the values of urban property fueled by the large-scale migration of the
people from rural areas to urban centers and by inflation and thus, the rigor
of rule evolved by the court that the time is not an essence of the Contract in
the case of immoveable properties requires to be relaxed, if not modified,
particularly in the case of urban immoveable properties.

66. It was further observed in
K.S. Vidyanadam
(supra) that there was
total inaction on the party of the plaintiff for two and a half of years to

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perform his party of the Agreement and such delay between the date of
Agreement and the filing of the Suit would make it inequitable to grant the
relief of Specific Performance to the plaintiff.

67. Similar explanation prevailed with the Apex Court in
Saradamani
Kandappan Kandappan v. S. Rajalakshmi and Others
(2011) 12 SCC 18
where it was observed that the assumption for holding that time was not an
essence for the grant of specific performance would not prejudice the vendor
defendant financially as there would not be much difference in the market
value of the property even if the Contract was performed after a few months.
This principle made sense during the first half of the twentieth century,
when there was comparatively very little inflation in India. The third quarter
of the twentieth century saw a very slow but steady increase in prices. But a
drastic change occurred from the beginning of the last quarter of the
twentieth century. There has been a galloping inflation and prices of
immoveable properties have increased steeply by leaps and bounds. Market
values of properties are no longer stable or steady. A judicial notice can be
taken and, in such scenario, the readiness and the willingness on the part of
the plaintiff. The conduct of delay, laches and prejudice has become relevant
to ascertain if the time was the essence in the Agreement.

68. The change in the prevailing market scenario has brought a change in
perspective as is reflected in
Saradamani
(supra) where the Apex Court
observed that it may not be correct to say that the time is not the essence for
performance of the Contract of an immoveable property, but whether the
time is an essence would depend upon the nature of delay and the terms of
Agreement, especially the readiness and willingness of the plaintiff to
execute the Agreement. It was observed that the time can be said to be the

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essence where the purchaser does not take steps to complete the sale within
the stipulated period and the vendor is not responsible for any delay. The
fact that there has been a steep rise in the price within the stipulated time
would be a circumstance which may make it inequitable to grant the relief of
specific performance. Thus, time for performance as stipulated in the
Agreement, may be assumed to be not material, or at all events be
considered as merely indicating the reasonable period within which the
Contract should be performed.

69.
In
Ferrodous Estates (Pvt.) Ltd. v. P. Gopirathnam (Dead) and
Others
2020 SCC OnLine SC 825, the Supreme Court after referring to the
aforesaid judgments observed that while exercising discretion in the Suit for
Specific Performance, the Court must keep in mind the time/period
prescribed by the parties for taking certain steps or for completion of the
transaction which must be given significance and the prescribed time limits
are not to be ignored.

70. The time frames for performance of Agreement to Sell has to be
evaluated in conjunction with the conduct and intention of the parties in the
context of surrounding circumstances and the prevailing market scenario. As
observed in the case of
Ferrodous
(supra), the greatest scrutiny and
strictness of readiness and willingness on the part of the plaintiff may be
applied to ascertain the time-frames.

71. In this case, the Agreement provided the extended date of
performance as 30.06.2006. The significant aspect is that after receipt of the
letter dated 06.07.2006/Ex. PW1/3 from the defendant specifically
indicating that since the Conveyance Deed had not been received from
D.S.I.D.C on 30.06.2006 and the plaintiff had not extended the Contract

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further, he was returning the money received by him under the Agreement
and it has come to an end. In response thereto, the plaintiff sent the Legal
Notice dated 12.07.2006/ Ex. PW1/4 claiming that the time stood extended
under Clause 7 and called upon the defendant to complete the transaction
within a period of 15 days, failing which the plaintiff shall institute a Suit for
Specific Performance. The defendant vide Reply dated 28.07.2006/Ex.
PW1/5 to the said Legal Notice dated 12.07.2006, reiterated that the
Agreement had come to an end as the Conveyance Deed had not been
finalized by the D.S.I.D.C.

72. The Agreement to Sell/ Ex. PW1/1 had stipulated in Clause 7 that if
the offer from D.S.I.D.C was not received till 30.04.2006, then the
Agreement were being treated as cancelled and the money shall be refunded
by the second party within 7 days or unless the Agreement is extended at the
discretion of the second party (plaintiff). Though the plaintiff had served the
defendant with the Legal Notice dated 12.07.2006/ Ex PW 1/4 about the
extension of the time for execution of the Conveyance Deed, but the conduct
of the parties needs to be further considered to ascertain the true intention.

73. In the first instance, the Agreement was to get concluded on
30.04.2006 and admittedly, the Agreement was extended by mutual consent
by both the parties on 30.04.2006 by making an endorsement Ex. PW1/2 on
the Agreement to Sell/ Ex. PW1/1. No such extension was made either by
the plaintiff or mutually after 30.06.2006. Nothing prevented the plaintiff to
have sought extension or to make an endorsement to that effect before or
upon expiry of the relevant date i.e., 30.06.2006. But no endeavour
whatsoever was made by the plaintiff for extension of the date, the second
time. There being no extension by the plaintiff or mutually by both the

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parties as was done in the first instance, clearly reflects that there was no
intention to further extend the Agreement by the plaintiff.

74. The conduct of the plaintiff after termination of the Contract further
reinforces that the "time" in this particular case became an essence of the
Contract since the plaintiff had no further intention of extension of the time.

75. The defendant on the other hand, on expiry of the date i.e., 30.06.2006
for the execution of the Sale Deed, immediately informed the plaintiff vide
Letter dated 06.07.2006 Ex. P3 about the termination of the Agreement and
also returned Rs. 24,00,000/- by way of Pay Orders in terms of Clause 7 of
the Agreement. It is the defendant‟s Letter dated 06.07.2006 which
promoted the plaintiff to immediately resort to a Legal Notice dated
12.07.2006/ Ex. P4 asserting that the time stood extended and called upon
the defendant to complete the transaction within a period of 15 days. The
contents of the Legal Notice dated 12.07.2006/ Ex. P4 itself was merely an
endeavour to meet the legal requirement of there being some expression of
intention to continue in terms of
Section 16
of the Specific Relief Act. The
pre-requisite for performance of the Agreement was execution of the Sale
Deed by D.S.I.D.C which did not happen till the contemplated date i.e.,
30.06.2006 and there was no question of execution of Sale Deed by
defendant in the circumstances. It is only to meet the legal requirement that
perfunctory Legal Notice was sent without any genuine intention to continue
with the Agreement.

76. This becomes evident as interestingly, the plaintiff has not referred to
the contention of the defendant about non-execution of Conveyance Deed by
D.S.I.D.C, but merely has stated that there is an extension of time under
Clause 7 of the Agreement. Furthermore, even though Rs. 24,00,000/- that

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had been paid by the plaintiff in part performance were returned by way of
Pay Orders, the plaintiff has not uttered a word in respect of the Pay Orders
in his Legal Notice. The plaintiff has failed to indicate whether he was
encashing or refusing to accept the money. The consequence of the same
was that the Pay Orders had been retained in his possession by the plaintiff.
Though the plaintiff may not have encashed them, but he failed to so inform
the defendant. The money has already been debited from the account of the
defendant and he had no way to know that the Pay Orders have not been
encashed. The only inference that could have been drawn by the defendant
was that the return of money has been accepted by the plaintiff, and the
Agreement to Sell stands concluded.

77. Further, the defendant in his evidence has explained that there was
much litigation/ correspondence exchanged with D.S.I.D.C. for clarity on
conferment of ownership rights in respect of suit property and uncertainty
shrouded about acquisition of ownership rights. Therefore, the plaintiff, who
was aware of uncertainty about the defendant ever being able to get
ownership rights, insisted on insertion of Clause 7 fixing the deadline for
concluding the Agreement. For this reason, the extension was made only for
two months as plaintiff was not inclined to be bound with this transaction for
a long time. Also, it was at his insistence that clause giving him unilateral
right to extend the Agreement was inserted subsequently in writing instead
of being typed in the main body. The circumstances coupled with the
conduct of plaintiff and term of Agreement was explained by defendant lead
to only one conclusion that once the offer from D.S.I.D.C. was not received
till 30.06.2006, the plaintiff decided not to seek further extension and let the

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Agreement lapse on account of uncertainty around the D.S.I.D.C. executing
the Deed in favour of defendant.

78. The conduct of the plaintiff thereafter is equally significant to gather
his intention. The plaintiff, despite being informed about the cancellation of
Agreement immediately on expiry of stipulated time, maintained stoic
silence for 28 months to institute the Suit on 06.10.2008. Though the Suit
may have been filed within the period of limitation, but it is a case of total
inaction on the part of the plaintiff for almost 28 months, which itself speaks
of the intention of the plaintiff not to extend the Agreement beyond the
stipulated time.

79. Similar facts as in hand came up for consideration in
Atma Ram v.
Charanjit Singh
(2020) 3 SCC 311. After issuing a Legal Notice on
12.11.1996, the petitioner filed the Suit after the long delay of three years.
The Supreme Court observed that there was no explanation forthcoming for
such inordinate delay. The conduct of the plaintiff is very crucial in a Suit
for Specific Performance. A person who issues a Legal Notice on
12.11.1996 claiming readiness and willingness, but institutes a Suit only on
13.10.1999 and that too only with a prayer for a mandatory injunction
carrying a fixed court fee, would not be entitled to the discretionary relief of
Specific Performance.

80. The timelines to be adhered by the parties and their intention to
conclude the Agreement in a time bound manner, are circumscribed by their
conduct. To grant a Decree for Specific Performance lies in the discretion of
the Court which the Court may not exercise due to the conduct of the
plaintiff, as observed by the Apex Court in
Nirmala Anand v. Advent
Corporation (P) Ltd.
, (2002) 8 SCC 146.

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81. Similar observations were made in
Zarina Siddiqui v. A. Ramalingam

(2015) 1 SCC 705 that the equitable discretion to grant a relief for specific
performance depends upon the conduct of the parties. Though efflux of time
and escalation of price of the property by itself cannot be a valid ground to
deny the relief of Specific Performance, but it is necessary on the part of the
plaintiff to establish and prove the circumstances so that the discretion can
be judiciously exercised in his favour.

82.
In
Ferrodous Estates (Pvt.) Ltd.
(supra), it was observed that mere
delay by itself without more, cannot be the sole factor to deny specific
performance. The greater scrutiny and strictness of "readiness and
willingness" on the part of the plaintiff may be applied to ascertain the
time-frames.

83. The facts, as in hand, came up for consideration in
Koli
Satyanarayana (Dead) by LRs v. Valuripalli Kesava Rao Chowdary (Dead
)
through LRs & Ors. 2022 SCC OnLine SC 1306, wherein the Supreme
Court observed that the defendant had communicated to the plaintiff on
12.04.1982 that since the requisite permission from the concerned authority
could not be obtained, as the plaintiff cancelled the Agreement. The
plaintiff, however, did not initiate any proceedings against the defendant. It
was almost after a period of two years after the defendant gave the
intimation about cancellation of their Agreement that the plaintiff chose to
file the Suit. The learned Single Judge considered it relevant as the conduct
of the plaintiff disentitling him from exercising discretion in favour of the
plaintiff in the Suit for Specific Performance even though it had been filed
within the period of limitation as prescribed for filing such Suit. This
conclusion not only met with approval by the Division Bench of the High

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Court, but was also upheld by the Apex Court which observed that despite
being intimated about the cancellation of the Agreement, the plaintiff‟s
conduct in not taking any action for more than two years, disentitled him
from exercising discretion in his favour.

84.
In
Gulshan Kumar & Ors vs. Sat Narain Tulsian (Deceased
) 206
(2014) DLT 443, reference was made to the observations of the Apex Court
in
K.S. Vidyanadam
(supra) and
Sardamani Kandappan vs. Rajalakshmi

(2011) 12 SCC 18, that the courts frown upon Suits which are not filed
immediately after breach/refusal and the fact that limitation is three years
does not mean that a purchaser can wait for one year or two years to file a
Suit and obtain specific performance. It was held that the three-year period
is provided to assist the purchasers in special cases, where major part of the
consideration has already been paid and possession delivered in part
performance thereof.

85. Similarly, the defendant in the present case, was duly informed by the
plaintiff about the cancellation of the Agreement to Sell on account of
Conveyance Deed being not received by D.S.I.D.C by 30.06.2006 vide his
Letter dated 06.07.2006/Ex. P3 despite which the plaintiff did not take any
steps whatsoever, for more than 28 months before filing the Suit on
06.10.2008. Therefore, even though the present Suit has been filed within
the limitation, there is an unexplained delay of more than 28 months which
disentitles the plaintiff from exercise of discretion to grant the relief of
Specific Performance to him.

86. It may, thus, be summed up that though time in given cases may not
be an essence of Agreement to Sell, but herein the present case, since it was
linked to getting a Conveyance Deed by 30.06.2006 which actually did not

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happen, and further considering that the defendant cancelled the Agreement
to Sell vide his Letter dated 06.07.2006/ Ex. P3 and also returned the amount
of ₹24,00,000/- by way of Pay Orders which were not repudiated by the
plaintiff, except that he sent a Legal Notice dated 12.07.2006 Ex. P4
claiming specific performance, but he remained silent about cancellation or
return of money received by him by way of Pay Orders, clearly reflects that
the time was treated as an essence in the Agreement to Sell which was
cancelled on expiry of the stipulated time. Accordingly, the plaintiff was not
entitled to seek extension of time beyond 30.06.2006.

87. Moreover, the plaintiff‟s conduct in not taking any concrete steps
until about 28 months further corroborates not only that the Agreement to
Sell stood cancelled on 30.06.2006 but also delayed action on the part of the
plaintiff disentitles him to exercise discretion in his favour.

88. Reliance for coming to this conclusion, may be placed on the
observations of Apex Court in
Ramathal v. Maruthathal
(2018) 18 SCC
303, that the specific performance is an equitable relief and granting relief is
the discretion of the Court which has to be exercised judicially within the
settled principles of law.

89. Accordingly, the issue no. 3&5 are decided against the plaintiff.

ISSUE NO. 2:

"2. Whether by reason of clause-9 of the Agreement to Sell dated
09.02.2006, the contract is irrevocable?"

90. The plaintiff has referred to Clause 9 of the Agreement to claim that
this Agreement is irrevocable. Clause 9 of the Agreement to Sell reads as
under:

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"Clause 9-
That this Agreement is irrevocable and if any of the
parties fails to complete the transaction, the aggrieved party
shall get it enforced through court of law and the defaulting
party shall be liable for all expenses, costs incurred and
damages suffered."

91. It is not doubt true that this Clause 9 of the Agreement to Sell
provided that the Agreement would be irrevocable, but it was circumscribed
by Clause 7 of the said Agreement which clearly provided that in case offer
from D.S.I.D.C was not received by the first party by 30.04.2006, the
Agreement shall be treated as cancelled and the first party i.e., the defendant
shall refund the entire amount received under the Agreement. Clause 7
contained a condition precedent and unequivocally provided the
circumstance when the Agreement shall be treated as cancelled. Since no
offer was received from D.S.I.D.C till 30.06.2006, the defendant repudiated
the Contract vide his Letter dated 06.07.2006/ Ex. P3 which was not
seriously contested by the plaintiff who merely sent a Legal Notice dated
12.07.2006 Ex. P4 seeking specific performance of the Agreement. The
requisite offer from D.S.I.D.C was a condition precedent and till such time
the offer was received, the defendant would not have acquired any
ownership right by virtue of which he could have executed the Sale Deed in
favour of the plaintiff.

92. Clause 9 of the Agreement would have kicked in only if the
permission had been received within the time frame after which neither
party would have had any occasion to revoke the Agreement to Sell. Since
the condition precedent, which was to get the Conveyance Deed from
D.S.I.D.C was not fulfilled within the given time frame, Clause 9 would not

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become applicable. Therefore, Clause 9 cannot be read dehors the other
clauses of the Agreement and it is, therefore, held that Clause 9 did not
make the Contract irrevocable under all circumstances.

93. The Issue No.2 is decided against the plaintiff.

ISSUE NO. 4:

"4. Whether the contract between the parties cannot be enforced, as
claimed for the reason that it was a contingent contract?"

94. A preliminary objection has been taken on behalf of the defendant
that the Agreement inter se the parties was a contingent contract and its
performance was dependent on the receipt of the offer by the defendant from
D.S.I.D.C by 30.06.2006 and in the absence thereof, the period for execution
of the Sale Deed could not be extended by mutual consent beyond
30.06.2006.

95. The term "contingency" is defined in the Concise Oxford English
Dictionary, Indian Edition Revised Eleventh Edition at Page 308, as a
future event or circumstance which is possible but cannot be predicted with
certainty. Black's Law Dictionary by Bryan A. Garner Eighth Edition
defines contingent at Page 338 as (1) an event may or may not occur, a
possibility, (2) the condition of being dependent on chance; uncertainty.
Advanced Law Lexicon by P. Ramanatha Aiyar 3 rd Edition defines
contingency at Page 1012 as (1) a situation in which may an event may or
may not happen, (2) something that is liable, but not certain, to happen at
some time in the future.

96.
Section 31
of the Indian Contract Act, 1872 defines the Contingent
Contract as under:

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"31. "Contingent Contract" defined.--A "contingent contract"

is a contract to do or not to do something, if some event,
collateral to such contract, does or does not happen. --A
"contingent contract" is a contract to do or not to do
something, if some event, collateral to such contract, does or
does not happen." Illustration A contracts to pay to B Rs.10,000
if B's house is burnt. This is a contingent contract. A contracts
to pay to B Rs.10,000 if B's house is burnt. This is a contingent
contract."

97. The contingency is thus, essentially based upon uncertainty,
independent of the Contract of the parties. If the contingency occurs, the
Contract may be affected as has been provided under
Section 32
of the
Indian Contract Act, 1872.

98. In the present case, as per Clause 7 of the Agreement to Sell Ex. PW
1/1, it was to be treated as cancelled in case no offer was received by the
defendant from D.S.I.D.C by 30.04.2006 and the defendant was liable to
refund the entire amount received from the plaintiff within 7 days unless the
Agreement was extended by the second party in its discretion.

99. Admittedly, D.S.I.D.C had sent its offer on 27.07.2005 much prior to
the execution of the Agreement, which was accepted by the defendant vide
his Letter dated 10.08.2005. Since the offer was already received by the
defendant at the time of execution of Agreement on 09.02.2006, it cannot be
said that it was a contingent Contract dependent on some uncertain event.
The execution of the offer to execute the conveyance deed may have been
delayed, but this is not a situation where there existed no property or where
there were no proprietary rights in the defendant. Mere delay cannot make
any agreement as dependent on uncertain terms.

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100. The offer of letter had already been received and it was the defendant
who had to do the needful. Therefore, the execution of the requisite
documents in favour of the defendant was not an uncertain event, but was
well-defined with the only variable being the time. It cannot be said that it
was a contingent Contract and, therefore, void as claimed by the defendant.

101. The issue is decided against the defendant.

ISSUE NO. 6:

"6. Is the plaintiff entitled to a decree for specific performance of the
agreement to sell dated 09.02.2006? OPP"

102. Another aspect which has been argued by the defendant and needs
consideration is that even though the defendant vide his Letter dated
06.07.2006/ Ex. P3 had cancelled the Agreement, but no relief for
declaration that the cancellation of the Agreement to Sell by the defendant
was void and illegal, has been sought by the plaintiff. Without first
challenging the cancellation, no specific performance of the cancelled
Agreement can be sought as has been held in
I.S. Sikandar (Dead) By Lrs.&
Ors. vs. K. Subramani & Ors.
(2013) 15 SCC 27.

103. The plaintiff has failed to seek the relief of declaration that the
termination of the cancellation of Agreement to Sell by the defendant was
illegal and non-est. In the absence of any such prayer, the Suit filed by the
plaintiff for grant of Decree of Specific Performance is not maintainable in
law, for the simple reason, that a Decree for Specific Performance is sought
in respect of the Agreement to Sell which has become non-existent pursuant
to its cancellation. The plaintiff was, thus, required to seek a specific
declaration in respect of the cancellation of the Agreement as void and in the

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absence of the same, he cannot seek the specific performance of the
Agreement to Sell.

104. Therefore, the Issue No. 6 is decided against the plaintiff.

ISSUE NO. 7:

"7. Relief."

105. In view of the findings in Issue Nos. 1, 5 and 6, the present Suit of the
plaintiff is hereby dismissed.

106. Litigation costs shall be borne by the plaintiff.

(NEENA BANSAL KRISHNA)
JUDGE
APRIL 10, 2023
S.Sharma/A.Sharma

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