Nitin Arora v. Yashoda Nand Sharma & Others

1. Whether Reporters of local papers may be allowed to see the judgment? No

2. To be referred to the Reporter or not? No

3. Whether the judgment should be reported in Digest? No V.K. JAIN, J. (ORAL) IA 14338/2011 (u/S. 5 of Limitation Act for condonation of delay in depositing Bank Guarantee)

1. Vide order dated 31st March 2011, the plaintiff undertook to deposit the balance amount of Rs.3.75 Crore by way of an FDR or furnish a bank guarantee in the name of the Registrar General of this Court within two weeks. Vide order dated 30th May 2011, the time to furnish the 2011:DHC:4767 bank guarantee was extended till 5th July 2011. In terms of the aforesaid orders, the plaintiff furnished bank guarantee of Rs.[3] Crore. A cheque of Rs.75 Lacs was tendered for the balance amount of Rs.75 Lacs. The cheque, however, was returned by the Registry which wanted either FDR or bank guarantee. The plaintiff has accordingly filed bank guarantee for the balance amount of Rs.75 Lacs as well on 25th August 2011. The time to file the bank guarantees in terms of the order dated 31st March 2011 is extended till the time the bank guarantee was actually filed. The application stands disposed of. CS(OS) 2528/2008 & IA 14318/2009 (u/O 12 R 6 CPC)

1. This is a suit for specific performance of Agreement to Sell dated 8th January 2006 executed by the defendants in favour of the plaintiff. Vide aforesaid agreement, the defendants agreed to sell property No.K-1, Malviya Nagar, New Delhi measuring 774.44 Sq. Yds. along with entire constructions on it, to the plaintiff, for a consideration of Rs.4,25,00,000/- (Rupees Four Crore Twenty Five Lacs). The plaintiff made payment of Rs.50 Lacs to the defendants, Rs.25 Lacs by cheque and Rs.25 Lacs in cash. The balance payment was to be made at the time of handing over the complete vacant physical possession to the plaintiff and execution of proper Sale Deed or other requisite document for conveying/transferring the property in favour of the plaintiff or his nominee. It was also stipulated in the agreement that if the vendee fails to execute the Sale Deed within 30 days after getting the letter of mutation and freehold from L&DO to the vendor, the earnest money shall stand forfeited. The grievance of the plaintiff is that the defendants have turned dishonest, were demanding Rs.50Lacs over and above the agreed sale consideration and have failed to complete the transaction despite legal notice dated 23rd October 2007. The plaintiff has accordingly sought specific performance of the Agreement to Sell dated 8th January 2006.

2. The defendants have failed written statement contesting the suit. The execution of the agreement has not been disputed in the written statement. It is also alleged that there was no question of the conversion of the property into freehold since the property was purchased on the basis of a Sale Deed. As regards mutation, it is alleged that it is not in the hand of the defendants and it is prerogative of the government/department concerned. It has been admitted that the plaintiff was to pay the balance amount at the time of execution of the Sale Deed. According to the defendants though they approached L&DO for mutation, that could not be done since the files were not available with the department.

3. Clause 2 and 7 of the Agreement to Sell dated 8th January 2006, which is an admitted document, are relevant and read as under:-

2. That the balance amount of Rs.3,75,00,000/- (RUPEES THREE CRORE FIVE LAKH ONLY) shall be paid by the SECOND PARTY to the FIRST PARTY at the time of handing over the complete vacant physical possession of the said property to the SECOND PARTY and also at the time of execution of the proper sale deed or other requisite documents for conveying/transferring the said property in favour of the SECOND PARTY or their nominee, within 30 days, i.e. on or before ____________, subject to the following conditions: a. The FIRST PARTY shall clear all dues and demands towards the house tax, electricity water bills, ground rent and all other charges in respect of the said property. b. The FIRST PARTY shall apply and get converted the leasehold rights of the said property (plot of land) converted into freehold from the L&DO and all the expenses in this regard, such as conversion charges, stamp duty, registration fee and incidental expenses etc. shall be borne and paid by the FIRST PARTY. c. The FIRST PARTY shall apply and get the said property mutated in their joint names in the records of L&DO.

7. Let the SECOND PARTY shall be liable to execute this sale deed within the stipulated period of 30 days, after getting the letter of mutation and freehold from L&DO to the FIRST PARTY. The SECOND PARTY fails to register the sale deed in that case the advance/earnest money shall be forfeited without any notice.

4. It would thus be seen that as per the agreement between the parties, the balance sale consideration of Rs.3.75 Crore was to be paid to them only at the time of the defendants executing the Sale Deed in favour of the plaintiff and handing over possession of the property subject matter of the agreement, to him. The plaintiff was under obligation to obtain execution/registration of the Sale Deed within 30 days of the defendants obtaining mutation and conversion of the property from lease hold to freehold.

5. The learned counsel for the defendants states that though the defendants had applied for mutation, the department took the stand that they had no document of the property available in their record, which compelled the defendants to file a writ petition against L&DO in this regard. The writ petition is stated to be pending. Regarding conversion of the property from leasehold to freehold, the learned counsel for the defendants states that the defendants were not sure whether the property was leasehold or freehold and, therefore, they have not applied for its conversion.

6. The learned counsel for the plaintiff states that the plaintiff is ready and willing to obtain specific performance of the agreement dated 8th January 2006 from the defendants even without mutation in their name and without conversion of the property from leasehold to freehold. Hence, absence of the mutation and/or conversion, therefore, cannot be a valid ground to resist the suit.

7. Since the balance payment of Rs.3.75 Crore was to be made only at the time of execution of the Sale Deed and handing over possession to the plaintiff, and this is not the case of the defendants that they had at any point of time offered to execute the Sale Deed and/or hand over a physical possession of the property to the plaintiff, the time stipulated for making balance payment of Rs.3.75 Crore to the defendants has not commenced as yet. The plaintiff, however, is willing to make payment of the aforesaid amount to the defendants without waiting for conversion and mutation.

8. It has been alleged in para 18 of the plaint that the plaintiff was always and is ready and willing to perform his part of the contract. It is also alleged in para 12 of the plaint that the defendants kept on seeking extension of time on the premise that their application for conversion of the leasehold to freehold was pending before L&DO and as soon as the said work was done they would intimate the plaintiff and execute Sale Deed in his favour. It is further alleged that the plaintiff believed their representations and the assurances and expressed his readiness and willingness to get the Sale Deed executed in his favour by making payment of the balance sale consideration. In para 15 of the plaint it is alleged that the defendants expressed their willingness to receive the balance amount of Rs.3.75 Crore and the plaintiff assured them that he was equally keen to pay them. In their written statement, the defendants have not claimed that the plaintiff was not ready and willing to perform his part of the contract. There is no allegation in the written statement that the plaintiff did not have sufficient funds with him to make payment of the balance sale consideration of Rs.3.75 Crore to them or that he was not willing to purchase the property subject matter of the agreement. A notice dated 23rd October 2007 was also issued by the defendants to the plaintiff besides publishing a notice in the newspaper on 27th October 2007. The receipt of the legal notice has been admitted by the defendants in the written statement and they also claimed to have sent reply dated 25th July 2008. The legal notice sent to the defendants as also the notice published in the newspaper is yet another proof that the plaintiff was always ready and willing to perform his part of the contract.

9. For the reasons given in the preceding paragraphs, I find that the defendants have absolutely no defence to the case setup in the plaint and have no valid ground to resist specific performance of the Agreement to Sell executed by them in favour of the plaintiff on 8th January 2006. The application is allowed and a decree for specific performance of the Agreement to Sell dated 8th January 2006 as also for possession of property No.K-1, Malviya Nagar, New Delhi is hereby passed in favour of the plaintiff and against the defendants, subject to the plaintiff depositing balance sale consideration of Rs.3.75 Crore in the Court within four weeks from today. On deposit of the aforesaid amount in the Court, the plaintiff will be entitled to take back the bank guarantee filed by him pursuant to interim order passed by the Court. The defendants will execute the Sale Deed and do all such acts, including signing of the documents required by L&DO and other authorities, as may be necessary for transfer of property No.K-1, Malviya Nagar, New Delhi in the name of the plaintiff. The amount of Rs.3.75 Crore will be released to the defendants on transfer of title in favour of the plaintiff and delivery of possession to him. In the facts and circumstances of the case, there shall be no order as to costs. Decree sheet be prepared accordingly. The suit and IA stand disposed of.