Kavi Ghei v. Rohit Vaid & Ors.

(iv) Cheque No. 299041 dated 21.03.2004 for Rs. 5,00,000/- drawn on Standard Chartered Bank, New Delhi in favour of Mrs. Ranjna Tandon,

(v) Cheque No. 29902 dated 21.03.2004 for Rs. 5,00,000/- drawn on Standard Chartered Bank, New Delhi in favour of Shri Rohit Vaid.

7. In terms of the Agreement to Sell, the Sale Deed was to be executed on or before 15.05.2004. For the purpose of raising the funds for the purchase of suit property, the plaintiff took a loan of Rs. 2,00,00,000/-(two crores) at an interest of 7.2% per annum from HDFC Bank, Capital Court, Munirka which was duly approved on 11.03.2004, for which the equal monthly instalment of Rs. 1,82,573/- per month was payable. In addition, the plaintiff also sold his Property bearing No. R-68, Greater Kailash-I, New Delhi at a price much lower than the market value, for a sum of Rs. 30,60,000/-. The plaintiff thus, was always ready and willing to performance his part of the Agreement and had taken various steps in fulfilling his obligations.

8. The plaintiff has claimed that to his shock, he received a Letter dated 21.04.2004 from the defendant Nos. 1 and 2 on 21.04.2004, wherein they took a complete volte-face and informed that they had decided not to sell the suit property to the plaintiff. The reason for such refusal was stated Digitally to be that the plaintiff himself had supposedly reduced the sale consideration of Rs. 2,00,00,000/- from the agreed sum of Rs. 3,22,50,000/- and also for supposedly socially objectionable behaviour of the plaintiff. The defendant Nos. 1 and 2 also annexed Bankers Cheque No. 01953[7] dated 19.04.2004 drawn on Standard Charted Bank, Greater Kailash-I and Cheque No. 558094 dated 19.04.2004 drawn on State Bank of India, Defence Colony for the amount of Rs. 10,71,000/- each (apparently including interest @ 24% from the date of signing of the Agreement received by them till then).

9. The plaintiff has claimed that all the allegations made in the Communication dated 20.04.2004 by the defendant Nos. 1 and 2 for resiling from the performance of the Agreement to Sell dated 21.03.2004, are an afterthought and cannot withstand the judicial scrutiny. Had the plaintiff desired the price to be reduced to Rs. 2,00,00,000/-, he would not have taken the loan of Rs. 2,00,00,000/- and additionally sold his Property bearing No. R-68, Greater Kailash-I for a sum of Rs. 30,60,000/- at a price much lower than the market value.

10. The plaintiff claims that he has always been and continues to be bound by the original price of Rs. 3,22,50,000/- as had been agreed in the Agreement to Sell dated 21.03.2004. The plaintiff claims that he had sufficient funds on the relevant date as envisaged in the Agreement to Sell dated 21.03.2004, to complete the transaction. The plaintiff has claimed that the defendant Nos. 1 and 2 have cheated him and are also guilty of criminal breach of trust, for which he reserves the right to take the separate legal action.

11. The plaintiff has further claimed that the defendant Nos. 1 and 2 have illegally and fraudulently subsequently sold and transferred the suit property Digitally to Shri Pradeep Wig, defendant No. 3 vide registered Sale Deed dated 21.04.2004 for a consideration of Rs. 3,15,00,000/-.

12. It is claimed that this Sale Deed dated 21.04.2004 had been executed despite the earlier Agreement to Sell dated 21.03.2004 in favour of the plaintiff. The mala fides of the defendant Nos. 1 and 2 are evident from the fact that the defendant No. 3 had applied for the requisite Stamp Duty to complete the sale consideration on 19.04.2004 itself despite there being a valid and subsisting Agreement to Sell dated 21.03.2004. The termination of the Agreement to Sell dated 21.03.2004 had been done by the defendant No. 2 vide his Letter dated 20.04.2004 which had been received on 21.04.2004 by the plaintiff. The defendant Nos. 1 and 2 had already entered into an Agreement to Sell of the suit property even prior to rescission of the Agreement to Sell dated 21.03.2004 vide Letter dated 20.04.2004.

13. It is also highlighted that both the documents i.e., Agreement to Sell dated 21.03.2004 in favour of the plaintiff and the Sale Deed dated 21.04.2004 executed in favour of the defendant No. 3 have the same witnesses i.e., Col. V.K. Vaid, father of the defendant No.1 and brother-inlaw of the defendant No. 2 who have been residing with the defendant Nos. 1 and 2 in the suit property. The second witness in the Agreement to Sell dated 21.03.2004 is Shri Rajesh Ahuja, resident of Nirmal Towers, Barakhamba Road, while in the Sale Deed dated 21.04.2004, the second witness is one Shri Sunil Jacob, residing at the same address, which is the address of the broker of the Deal between the plaintiff and the defendant Nos. 1 and 2.

14. It is claimed that the possession of the defendant No. 3 in the suit property after 21.04.204 is illegal and cannot be permitted to be continued. Digitally The defendant No. 3 has come in possession of the suit property on account of the fraud played by the defendant Nos. 1 and 2 on the plaintiff.

15. It is also asserted that the defendant No. 3 had prior knowledge of the valid and subsisting Agreement to Sell dated 21.03.2004 in favour of the plaintiff, which is apparent from the undue haste in which the Sale Deed dated 21.04.2004 had been executed. Moreover, the defendant No. 3 is residing in 79, Sunder Nagar, Delhi which is adjoining to the suit property with the common wall. The defendant No. 3 cannot be said to be unfamiliar with the existing situation at the time of the execution of the Sale Deed dated 21.04.2004.

16. The plaintiff has referred to the Clauses of breach incorporated in the Agreement to Sell dated 21.03.2004, wherein it was agreed that in case either party infringes the terms and conditions of the Agreement to Sell dated 21.03.2004, the other party shall be entitled to get the transaction enforced through Court of Law by Specific Performance of the Contract. Had the plaintiff been guilty of breach of Agreement to Sell dated 21.03.2004, as has been alleged by the defendant Nos. 1 and 2 in their Letter dated 20.04.2004, the defendant Nos. 1 and 2 would have sought the specific performance of the Agreement to Sell dated 21.03.2004. The defendant Nos. 1 and 2 by executing the Sale Deed dated 21.04.2004 in favour of the defendant No. 3, had committed the breach of the Agreement to Sell dated 21.03.2004.

17. Hence, the present Suit has been filed seeking Declaration that the Sale Deed dated 21.04.2004 in favour of the defendant No. 3 is illegal, non est and bad in law and that the defendant Nos. 1 and 2 be directed to specifically perform the Agreement to Sell dated 21.03.2004. Digitally

18. The defendant Nos. 1 and 2 in their Written Statement have denied all the allegations made in the Plaint. While it is admitted that the Agreement to Sell dated 21.03.2004 was executed with the plaintiff but they claimed that this Agreement to Sell dated 21.03.2004 was subsequently cancelled and the amount received from the plaintiff along with interest @ 24% per annum was duly returned. The defendant Nos. 1 and 2 had clearly indicated in their Letter of Revocation dated 20.04.2004 that the plaintiff wanted to sign a new Sale Agreement for a total consideration of Rs. 2,00,00,000/- and remaining money was not to be shown towards the sale of the suit property. The plaintiff was thus, not able to arrange the entire consideration and wanted to merely pay Rs. 2,00,00,000/- in cheque, which was not agreeable to the defendant Nos. 1 and 2. The defendant Nos. 1 and 2 were not interested in any black money and thus, they were compelled to cancel the Agreement to Sell dated 21.03.2004.

19. It is further claimed that the plaintiff was in a position to pay Rs. 2,00,00,000/- only and he was not able to arrange for the entire sale consideration as had also been conveyed to the defendant Nos. 1 and 2 telephonically by the plaintiff. Since the defendant Nos. 1 and 2 wanted the entire amount by cheque which was not acceptable to the plaintiff, the Agreement to Sell dated 21.03.2004 was rescinded by defendant Nos. 1 and

2.

20. The defendant Nos. 1 and 2 have further asserted that the Stamp Paper for executing the Sale Deed was purchased on 20.04.2004 and not on 19.04.2004 as has been claimed by the plaintiff to claim that there were mala fides on the part of the defendant Nos. 1 and 2 in rescission of the Agreement to Sell dated 21.03.2004. However, the Agreement to Sell dated Digitally 21.03.2004 was cancelled for the reasons as mentioned in the Letter dated 20.04.2004. It is, therefore, submitted that the present Suit of the plaintiff is liable to be dismissed.

21. The defendant No. 3 in his Written Statement has taken the preliminary objection that the present Suit is not maintainable as though it is not admitted that the breach had been committed by the defendant Nos. 1 and 2 resulting in loss to the plaintiff, the alleged damage caused to the plaintiff on account of cancellation of the Agreement to Sell dated 21.03.2004 by the defendant Nos. 1 and 2, can be compensated in terms of money. It is asserted that the remedy available to the plaintiff is by way of a Suit for Recovery and not for Specific Performance.

22. The defendant No. 3 has submitted that he is the bona fide purchaser of the suit property, having invested huge amount of money in the suit property and he has taken possession pursuant to the duly registered Sale Deed executed in his favour by the defendant Nos. 1 and 2. The defendant No. 3 has acquired the right, title and interest in the suit property.

23. It is claimed that there was no valid and subsisting Agreement to Sell between the plaintiff and the defendant Nos. 1 and 2 on the date when the defendant No. 3 purchased the suit property from the defendant Nos. 1 and

2. In any case, the defendant No. 3 was unaware of any such Agreement to Sell between the plaintiff and the defendant Nos. 1 and 2. Moreover, he has asserted that he has a superior right over all others in the suit property, he being a bona fide purchaser of the suit property for a valuable consideration.

24. On merits, all the averments made in the Plaint are denied and the defence taken in the preliminary objection is reiterated.

25. The plaintiff by way of his Replication to the respective Written Digitally Statement has reaffirmed his assertions made in the Plaint and has denied all the allegations made in the Written Statements of the defendant Nos. 1 to 3.

26. The issues on the pleadings were framed on 29.08.2005 which are as under: -

27. The plaintiff in support of his case, appeared as PW[1] and tendered his affidavit of evidence, Ex.PW1/A.

28. PW3/R.K. Saxena, Assistant Manager, State Bank of India, produced the summoned record, Ex.PW3/1. He has deposed that Rs. 25,20,000- had been deposited by the defendant No. 3 with the State Bank of India for the purchase of Non-judicial Stamp Paper for execution of the Sale Deed.

29. PW4/Ishwar Mishra, working as Public Relation Inspector (Postal) at Post Office, Malka Ganj, Delhi, produced the summoned record and deposed that the requisite record was not available as it is maintained in the Post Offices for the period of one year. The copy of the requisite Certificate of Sub-Postmaster, Malkaganj, Delhi is Ex. PW4/2.

30. PW5/Malik Singh, Public Relation Inspector (P), Post Office, at Lodhi Digitally Road, Head Office, produced the requisite record i.e., delivery list of the Registered letters and placed the photocopies on record which are Ex.PW5/2.

31. PW6/Jagdish Salwan, Manager, Citibank N.A., 124, Jeevan Bharti Building, Connaught Circus, New Delhi tendered his affidavit of evidence Ex. PW 6/A.

32. PW7/Shri Gorakh Nath, Dealing Officer, State Bank of India, Defence Colony, Delhi produced the summoned record of Statement of Account of defendant No. 1 and defendant No. 2 from period of March, 2004 to June, 2004 which are Ex. PW7/2.

33. PW8/Lal Sahib Mishra, Attending Clerk at Standard Chartered Bank, 10, Sansad Marg, Delhi produced the requisite summoned record including the Statement of Account of defendant No. 1, from month of January 2004 to September 2004 which are Ex. PW. 8/2. He further deposed that on 19.04.2004 a withdrawal entry of a sum of Rs. 10,71,000/- and deposit entry on 22.04.2004 for a sum of Rs. 1,57,50,000/- was borne out from the record.

34. PW9/Sher Singh, Record -In-Charge Office of Sub-Registrar of Assurances, Mehrauli, Delhi produced Sale Deed registered as Document No. 4645 dated 21.04.2004 in respect of Property No. 81, Sunder Nagar, New Delhi as Ex. PW 9/2. He further deposed that the Sale Deed had been duly registered with the Sub-registrar's office at 12:30 PM.

35. PW10/Annindya Banerjee, Assitant Manager (Legal) HDFC Ltd., Capital Court, OLOF Palme Marg, Munirka, Delhi, placed the summoned record including Certified true copy of Offer Letter dated 01.03.2004 Ex. PW10/2, Certificate issued by HDFC Ltd. Ex. 10/3 which show that the said loan of Rs. 2,00,00,000/- was sanctioned by HDFC Ltd. to the plaintiff. Digitally

36. PW11/Shri Bharat Bhatter, Assistant Vice President, Deutche Bank, New Delhi had produced the summoned record, Ex.PW11/1, Statement of Account of Mr. Kavi Ghei and Smt. Neeraj Ghei as on 24.04.2004, Ex. PW 11/2 and the mutual fund investments of Smt. Neeraj Ghei and Mr. Kavi Ghei as on 23.04.2004 with supporting Mutual Fund statements, Ex. PW 11/3.

37. PW12/Gulshan Arora, working as Nodal Officer, Hutchison Essar Mobile Services Ltd, Okhla Industrial Area, Phase -II, New Delhi had produced the summoned record, Ex.PW12/1 and billing records for month of April 2004 along with Statement pertaining to mobile phone number of defendant No. 1 was Ex. PW 12/2

38. PW13/R.K. Singh, Nodal Officer, Bharti Tele-Ventures Ltd, Okhla Industrial Area Phase-1, Delhi had produced the summons, Ex. PW 13/1. He further placed on record Statements pertaining to Mobile Phone NO. 9810001682 in the names Shri Rajesh Ahuja, C/o Cosmos Developers (P) Ltd., Flat No. 7, Ground Floor, Ansal Towers, New Delhi and mobile phone number 9810429190 in the name of Shri Rinku Biswas C/o Cosmos Developers (P) Ltd. and Shri Pradeep Wig /defendant No. 3 Ex. PW 13/2.

39. PW 14/ Rajesh Kumar produced the summoned record, including the Original Challan dated 19.04.2004 Ex. PW14/2 (OSR) and Copy of Stock Register of PO-6 showing credit entry at Sl. No. 198 dated 19.04.2004 Ex. PW14/2 (OSR).

40. The defendant No. 1, Sh. Rohit Vaid as DW[1], tendered his Affidavit of Evidence Ex. DW1/A.

41. DW2/Rajesh Ahuja, second witness to the Agreement to Sell dated 21.03.2004 tendered his affidavit of evidence as Ex.D1W2/A and deposed Digitally about the said facts.

42. The defendant No. 3, Mr. Pradeep Wig appeared as DW[3] and tendered his affidavit of evidence, Ex.DW3/A.

43. Learned Senior Counsel for the plaintiff has argued in detail and also submitted detailed Written Submissions. It is argued that admittedly the plaintiff entered into an Agreement to Sell dated 21.03.2004 with the defendant Nos. 1 and 2 in respect of the suit property for a sale consideration of Rs. 3,22,50,000/-. Pursuant to the Agreement to Sell dated 21.03.2004, a sum of Rs. 21,00,000/- was paid to the plaintiff which is not denied by the defendant Nos. 1 and 2. The Sale Deed was to be executed upto 15.05.2004, but defendant Nos. 1 and 2 with ulterior motive through their Letter dated 20.04.2004, unilaterally cancelled the Agreement to Sell dated 21.03.2004 alleging that the plaintiff wanted a re-negotiation of the cheque component to be reduced to Rs. 2,00,00,000/- and the balance to be accepted in cash.

44. It is argued that the reasons given by the defendant Nos. 1 and 2 in their Letter for rescission of the ATS before the completed date of Execution,, is patently not believable. The mala fide of the defendant Nos. 1 and 2 is further evident from the fact that the Sale Deed was to be executed by 15.05.2004 and there is no reason for the defendants to rescind the Contract before the said date. The defendant Nos. 1 and 2 turned fraudulent which is also evident from the fact that they had entered into the deal for sale of the suit property to the defendant No. 3 for a sale consideration of Rs. 3,15,00,000/- which was less than the sale consideration agreed between the plaintiff and the defendant Nos. 1 and 2. Further, the Stamp Paper for execution of the Sale Deed was purchased on 19.04.2004 by the defendant No. 3, while the letter for rescission of the Agreement to Sell dated Digitally 21.03.2004 had been sent on 20.04.2004 by the defendant No. 2. This reflects not only an undue haste on the part of the defendant Nos. 1 and 2 to execute the Sale Deed in favour of the defendant No. 3 despite there being a subsisting Agreement to Sell, but the reasons given for rescinding the Agreement to Sell dated 21.03.2004 are also not tenable.

45. Pertinently, within a day, the Sale Deed had been executed on 21.04.2004, while the Notice was received by the plaintiff in the evening of 21.04.2004, subsequent to the registration of the Sale Deed. It is, therefore, argued that the conduct of the defendant Nos. 1 and 2 reflects mala fide on its part and there was no justiciable reason for the defendant Nos. 1 and 2 to rescind the Agreement to Sell dated 21.03.2004 vide Letter dated 20.04.2004.

46. It is claimed that such unilateral termination of ATS without any basis is illegal, for which the plaintiff has relied upon Brahm Dutt v. Sarabjit Singh 2017 SCC OnLine P& H 5489; Brahm Dutt v. Sarabjit Singh,

┌─────────────────────────────────────────────────────────────────────────────────────────────────────┐
│                            SLP (C) Diary No. 12876/2018 dated 01.05.2018; S.K. Ravichandran v. M.   │
│                            Thanapathy MANU/TN/5230/2022; S.K. Ravichandran v. M. Thanapathy,        │
│                            SLP (C) Diary No. 20199/2022; Rakesh Kumar Jain v. Devender Singh        │
│                            Mehta, 2000 (52) DRJ 616; Vimla Devi v. Pushpa Devi 2017 SCC OnLine      │
│                            Del 8694.                                                                │
└─────────────────────────────────────────────────────────────────────────────────────────────────────┘

47. It is further submitted that the plaintiff was always ready and willing to perform his part of the Agreement for which reason, he not only took a loan of Rs. 2,00,00,000/- from HDFC Bank, Munirka, Delhi, but also sold his Property bearing No. R-68, Greater Kailash-I for a sum of Rs. 30,60,000/- at a price much lower than the market value, to garner the Digitally sufficient funds for payment.

48. It is further argued that the plaintiff has produced in evidence, the various bank statements of Deutsche Bank, Ex.PW11/2, Standard Charted Bank Statement, Ex.PW10/19 which also reflect that the plaintiff always had sufficient funds to honour his part of the Agreement. In support of the proposition that to show readiness to purchase property, 'Capacity to pay' is sufficient, he has placed reliance on Veeramalai Vanniar v. Thadikara Vanniar, 1967 SCC OnLine Mad 137; Jagan Nath v. Jagdish Rai (1998) 5 SCC 537;

49. It is submitted that in the Agreement to Sell dated 21.03.2004, it was specifically provided and agreed between the parties that in case either party fails to honour its part of the commitment, the other party shall be at liberty to seek Specific Performance of the ATS. It is claimed that rescission of the Agreement to Sell dated 21.03.2004 is bad in law and the defendant Nos. 1 and 2 are liable to be directed to execute the Sale Deed in favour of the plaintiff.

50. Learned Senior Advocate for the plaintiff has further argued that the defendant No. 3 who is claiming to be a bona fide purchaser having a registered Sale Deed dated 21.04.2004 in his favour, is equally a party to the fraud committed by the defendant Nos. 1 and 2. In the Sale Deed itself, it is mentioned that there was an earlier Agreement to Sell which is claimed to have been cancelled. Once the defendant No. 3 was aware of the existence of Agreement to Sell dated 21.03.2004, the least that could have been done was to confirm whether the ATS has been duly cancelled as is stated in the Sale Deed. Knowledge of fact of Agreement amounts to Notice as has been observed in the cases of Sukhbir Singh v. Brij Pal Singh (1997) 2 SCC Digitally 200; Raj Kumar Sharma v. Pushpa Jaggi, 2005 SCC OnLine Del 1244; Yassh Deep Builders v. Sushil Kumar Singh, 2023 SCC OnLine Del 1499;

51. It cannot be said that the defendant No. 3 is a bona fide purchaser or that his Sale Deed is liable to be cancelled. It is, therefore, submitted that the plaintiff whose Agreement to Sell is prior to the Sale Deed executed in favour of the defendant No. 3, is entitled to execution of the Sale Deed in his favour, after cancellation of the Sale Deed dated 21.04.2004 executed in favour of the defendant No. 3 by the defendant Nos. 1 and 2. The reliance is placed on Lala Durga Prasad v. Lala Deep Chand AIR 1954 SC 75; Thomson Press (India) Ltd. v. Nanak Builders & Investors Pvt. Ltd. (2013) 5 SCC 397; to state that Plaintiff is entitled to seek relief against person claiming under a title arising subsequently.

52. Ld. Senior Advocate has further argued that though the Law generally does not favour Specific Performance of an Agreement to Sell where the payment is not even ten percent of thee sale consideration, but it is not the thumb rule, especially in. the peculiar facts and circumstances of this case wherein not is their a unilateral termination of the Agreement much prior to the date of execution, but the Sale to the defendant No.3 has been done in a fraudulent and clandestine manner, reflecting the malafides of all the defendants. To substantiate that payment of consideration less than 10% is not a ground to deny decree and subsequent purchaser with notice of prior ATS cannot plead hardship as he could foresee the ensuing hardship, reliance has been placed on Pratap Lakshman Muchandi v. Shamlal Uddavadas Wadhwa, (2008) 12 SCC 67; Sargunam v. Chidambaram (2005) 1 SCC 162.

53. Learned Senior Advocate for the plaintiff has also submitted that Digitally though the plaintiff had paid less than 10% of the agreed sale consideration before the Agreement to Sell dated 21.03.2004 was cancelled, but this cannot be a relevant fact for the simple reason that the Agreement to Sell dated 21.03.2004 was still subsisting at the time when it had been illegally rescinded by the defendant Nos. 1 and 2. The plaintiff had all the requisite funds to honour the Agreement to Sell dated 21.03.2004 within the timeframe that had been agreed under the Agreement to Sell dated 21.03.2004. Section 20 of the Specific Relief Act cannot be invoked by the defendant No. 3, a mala fide purchaser. Explanation I to Section 20 of the Specific Relief Act stipulates that “mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b)”. Further, Explanation II states that hardship has to be seen in context when the contract was entered into and not subsequent thereto. This Section, therefore, does not come to the benefit of the defendants to avoid their obligation under the Agreement to Sell.

54. It is further argued by the Ld. Senior Advocate that the relief of Specific Performance is an equitable relief and a person who acts fraudulently, cannot be permitted to a premium for his wrongful acts. The market value of the property may have increased substantially, but in the circumstances of this case when the plaintiff has been bonafide in his conduct and always readiness of this case when the plaintiff has been bonafide in his conduct and always ready and willing to perform his part of the Agreement, he cannot be deprived of the relief on the ground of increase in the market value of the suit property. The plaintiff has drawn support Digitally from the judgements in K. Prakash v. B.R. Sampath Kumar, (2015) 1 SCC 597; Nirmala Anand v. Advent Corpn. (P) Ltd., (2002) 8 SCC 146; Zarina Siddiqui v. A. Ramalingam (2015) 1 SCC 705.

55. In the end, Ld. Senior Advocate for the plaintiff has asserted that the plea of the defendants that this Suit is not maintainable since no Declaration has been sought against cancellation of ATS, in not tenable at this stage as this plea was not raised earlier by Defendants in their Written Statement and no issue was framed regarding non maintainability of the suit on this ground. Even otherwise, since the ATS was valid and subsisting in favour of the plaintiff, no such declaration is required by law. Reliance is placed on Kushal Infraproject Industries India Ltd. v. Dalel Singh, 2019 SCC OnLine Del 8832; A. Kanthamani v. Nasreen Ahmed (2017) 4 SCC 654.

56. Learned counsel for the defendant Nos. 1 and 2 has countered all these argument orally as well as by submitting Written Arguments. It is argued that a sum of Rs. 10,50,000/- each to the defendant Nos. 1 and 2 had been paid totalling to Rs. 21,00,000/- which is about 6% of the total consideration of Rs. 3,22,50,000/-. The plaintiff was not able to arrange the entire consideration and had been insisting on signing of a new Agreement to Sell with sale consideration of Rs. 2,00,00,000/- through cheque and payment of remainder amount in cash. He was also breaching the terms of the Agreement to Sell by approaching the owners of first and second floor who were related to defendant Nos. 1 and 2. Further, the plaintiff wanted to remove the broker from the transaction to avoid payment of brokerage, to which the defendants were not agreeable. It is in these circumstances that the defendant Nos. 1 and 2 were constrained to cancel the ATS orally and Digitally thereafter vide Letter dated 20.04.2004. To show their genuineness, they returned the earnest money along with the interest @ 24% per annum, by annexing the cheque along with the Letter.

57. Learned counsel for the defendant Nos. 1 and 2 has submitted that because of the conduct of the plaintiff, they had to sell the suit property to defendant No. 3 at a lesser sale consideration of Rs. 3,15,00,000/-, on 21.04.2004. The plaintiff’s claim to get the Declaration of Sale Deed dated 21.04.2004 in favour of the defendant No. 3 as void and to seek specific performance of the Agreement to Sell dated 21.03.2004, is bad in law.

58. It is further argued on behalf of the defendant Nos. 1 and 2 that though the plaintiff is claiming that he had got a loan of Rs. 2,00,00,000/sanctioned from HDFC Housing Development Finance Corporation Limited but admittedly, it was an approval given in principal but no amount was ever disbursed to the plaintiff. Further, as per the Sanction Letter Ex.PW1/15, the disbursement of loan was subject to legal and technical clearance which was never done; also payment of Rs. 5,000/- for processing and administrative fee had also not been paid by the plaintiff. The EMI as per the Letter dated 11.03.2004 was Rs. 1,82,573/-, while the total income of the plaintiff was Rs. 13.25 and 13.36 lakhs as per the ITR of Assessment Year 2002-03 and 2003-04. The plaintiff has miserably failed to prove the grant of loan. The sanction letter itself stated that “in case you have not selected a dwelling unit, we will be pleased to provide you assistance in identifying a suitable one on a best efforts basis”. Thus, the plaintiff has failed to prove his readiness to perform his part of the contract and is not entitled to specific performance.

59. Furthermore, the so-called Sanction Letters Ex. PW1/15 and Ex. Digitally PW10/2 are distinct and as per the deposition of PW10, the plaintiff had not been issued any other letter, except PW10/2. The discrepancy in the Sanction Letters, again confirms that no loan of Rs. 2,00,00,000/- was sanctioned in favour of the plaintiff. Reliance has been placed on Ritu Saxena vs. J.S. Grover and Another, 2018 SCC OnLine Del 9880.

60. Ld. Counsel has further argued that assuming though not admitting that a loan of Rs. 2,00,00,000/- was sanctioned in favour of the plaintiff, the same is not sufficient to prove the readiness on the part of the plaintiff to pay the balance consideration of Rs. 3.01 crores. This fact that the plaintiff was not ready to pay Rs. 3.01 crores, gets credence from the fact that the plaintiff wanted to re-negotiate the white/through cheque amount. He wanted to make the cheque component as Rs. 2,00,00,000/-, while the balance to be paid in cash. Such endeavour or re-negotiation makes it abundantly evident that the plaintiff was not ready or willing to perform his part of the contract, which disentitles him from seeking specific performance. In fact, the plaintiff wanted to alter the terms and enter into a fresh Agreement to Sell, which shows that he was not willing to abide by the ATS.

61. It is also argued that neither the plaintiff nor his wife’s up-to-date Bank Statements were produced. Moreover, the wife has failed to enter into the witness box to prove that she had money/funds available to be utilised for the purchase of the suit property. Hence, no credence /weightage can be given to the bank statements of the wife, relied upon by the plaintiff.

62. Also, no evidence has been led by the plaintiff that he had the financial capacity to pay the balance consideration post April, 2004. The plaintiff had neither offered to pay the entire sale consideration by cheque Digitally till 20.04.2004 which is corroborated by the testimony of DW[2]. Further, the factum of conveying the cancellation of ATS telephonically, has been corroborated by DW[2] in his testimony. DW[2] has further corroborated that the plaintiff had threatened the defendant No. 1 that if the matter is taken to the Court, then it may take 10 to 20 years and the suit property would be at stake. Moreover, the readiness has not been proved as required under Section 16(C) of the Specific Relief Act as only 6% of the total sale consideration had been paid till the date of cancellation of the ATS and the said amount of 6% along with interest @ 24% per annum, was duly refunded along with the Letter of Cancellation.

63. The plaintiff has failed to make out a case for exercise of discretion by the Court under Section 20 of the Specific Relief Act. The plaintiff has not done any substantial act or has suffered losses and hence, the present Suit for Specific Performance cannot be decreed in his favour.

64. It is further argued on behalf of the defendant Nos. 1 and 2 that in the last 20 years, the prices of the suit property have galloped and the plaintiff who had only made 6% of the total sale consideration, cannot claim a Decree for Specific Performance. Reliance has been placed on the decisions in M/s HOTZ Industries Pvt. Ltd. vs. Dr. Ravi Singh (Since Deceased) Through LRs, decided by a Co-ordinate Bench of this Court vide CS(OS) 1261/1995, U.N. Krishnamurthy vs. A.M. Krishnamurthy, 2022 SCC OnLine SC 840, Jinesh Kumar Jain vs. Iris Paintal and Ors., MANU/DE/3387/2012 and Ritu Saxena (supra).

65. A legal objection has been taken to the relief of specific performance as claimed by the plaintiff, on the ground that he has sought a Declaration for cancellation of Sale Deed dated 21.04.2004 as illegal and void without Digitally seeking declaration of the Cancellation of ATS as void and, therefore, the relief of specific performance is not maintainable. The decision in judgment of Braham Dutt v. Sarabjit Singh, 2017 SCC OnLine P&H 5489 relied upon by the plaintiff is distinguishable as the service of Notice of Termination of Agreement to Sell was not proved in the said case whereas in the present case, the service of Notice of termination is admitted.

66. Reliance has also been placed on the decisions in Dharampal Satyapal Ltd. vs. Sanmati Trading and Investment Ltd. and Anr., 2017 SCC OnLine Del 7317, I S Sikandar (Dead) By LRs vs. K. Subramani & Ors., (2013) 15 SCC 27, Shridhar Bajaj vs. Gyanesh Chaudhary, 2023 SCC OnLine Del 2068, Ritu Saxena, (supra), HOTZ Industries Pvt. Ltd. (supra), Gayatri Gupta vs. Ruby Sharma and Others, 2019 SCC OnLine Del 6741 and U.N. Krishnamurthy (supra).

67. Learned counsel for the defendant No. 3 has argued in detail and also submitted the Written Submissions. It is claimed that the defendant NO. 3 is the bona fide purchaser of the suit property on payment of due sale consideration of Rs. 3,15,00,000/- pursuant to which, the Sale Deed dated 21.04.2004 had also been executed in his favour by the defendant Nos. 1 and 2 which was simultaneously followed with the handing over of the possession of the suit property to him.

68. Learned counsel for the defendant No. 3 submits that there was no valid and subsisting Agreement to Sell between the plaintiff and the defendant Nos. 1 and 2 at the time when the suit property was purchased by the defendant No. 3. In any case, the defendant No. 3 was not aware of the existence of any valid and subsisting Agreement to Sell at the time when he purchased the suit property. Digitally

69. Learned counsel on behalf of the defendant No. 3 has argued on the similar lines as of defendant Nos. 1 and 2, that merely Rs. 21,00,000/- which is 6% of the total consideration amount, had been paid by the plaintiff. The plaintiff admittedly, was seeking modification in the mode of payment of the sale consideration by tendering Rs. 2,00,00,000/- only by cheque, while the remaining portion, he wanted to pay in cash. These facts were conveyed to the defendant No. 1 through Shri Rajesh Ahuja, the Broker in the deal between the plaintiff and the defendant No. 2. It is on account of the unwillingness on the part of the plaintiff that the Agreement had been validly terminated before the suit property was purchased through registered Sale Deed dated 21.04.2004, by the defendant No. 3.

70. The factum of cancellation of Agreement to Sell dated 21.03.2004 has also been corroborated by DW2/Rajesh Ahuja who has deposed that the defendant No. 1 as well as the plaintiff had called him to inform that the deal stands cancelled.

71. It is submitted on behalf of the defendant No. 3 that on or about 11.04.2004, Col. Vaid, father of Rohit Vaid, defendant No. 1, called defendant No. 3 to ask if he was interested in purchasing the suit property. Since the defendant No. 3 was planning to leave for Goa on 12.04.2004, he sought time to think over it and that he would inform about the decision after returning from Goa. On 17.04.2004, upon the defendant No. 3’s return from Goa, the defendant Nos. 1 and 2 had informed him about the earlier Agreement to Sell with the plaintiff, but he was also informed that since the plaintiff wants to change the terms of the Agreement to Sell, it has been cancelled on 10.04.2004; a fact which was confirmed by Shri Rajesh Ahuja, Digitally the Broker. The defendant No. 3 thus, agreed to purchase the suit property for Rs. 3,15,00,000/- and consequently the Sale Deed was executed in his favour by the defendant Nos. 1 and 2. The factum of termination of Agreement to Sell dated 21.03.2004 vide Letter dated 20.04.2004 had been duly confirmed by the defendant Nos. 1 and 2. This factof cancellation of the earlier Agreement to Sell with the plaintiff has also been recorded in the MoU dated 21.04.2004 entered into between the defendant No. 3 and the defendant Nos. 1 and 2.

72. Learned counsel for the defendant No. 3 has further submitted that consequent to the registration of the Sale Deed dated 21.04.2004, the suit property has also been mutated in his name by MCD on 29.04.2004. Since then, the defendant No. 3 has been regularly paying the property tax in respect of the suit property. The defendant No. 3 has also made in the application in the Electricity and Water Department for change of electricity and water meter respectively in his name and has deposited the requisite charges. The defendant No. 3 has also sought enhancement of load sanction of the electricity meter for which he has paid an additional charges on 06.09.2004.

73. It is, therefore, submitted that the Declaration in regard to the Sale Deed 21.04.2004 as sought by the plaintiff is not tenable and is contrary to the judgment of the Apex Court in Lala Durga Prasad vs. Lala Deep Chand, AIR 1954 SC 75 which laid down that whereafter the Agreement to Sell, the Tile has been conveyed to the subsequent purchaser, the relief of Cancellation/Declaration of the Conveyance Deed in favour of the subsequent purchaser, must be claimed and granted only in a particular manner as provided under the law and de hors the pleadings in the Suit Digitally about the relief, the plaintiff is not entitled to the Declaration that the Sale Deed dated 21.04.2004 is bad in law.

74. Learned counsel on behalf of the defendant No. 3 as reaffirmed the arguments addressed on behalf of the defendant Nos. 1 and 2 that there was no readiness and willingness on the part of the plaintiff to honour his part of the Agreement to Sell. The alleged sanction of Loan was merely a paper sanction, as is also confirmed in the testimony of PW10/Annindya Banerjee, Assistant Manager (Legal), HDFC Housing Development Finance Corporation Limited and also from the admissions made by PW1/Kavi Ghei, the plaintiff in his cross-examination.

75. It is argued that the overwhelming evidence on record which has been established from the testimony of plaintiff and PW10/Annindya Banerjee, proves that the plaintiff had no financial capacity to pay the balance sale consideration and to perform his part of the Agreement to Sell dated

76. Furthermore, the readiness of the plaintiff to perform his part of the Agreement to Sell dated 21.03.2004 all throughout from the date of Agreement to Sell till the date of leading of evidence has also not been proved. It is also established that the plaintiff had no willingness to honour his obligation under the Agreement to Sell dated 21.03.2004 as he was seeking modification of the terms of the Agreement. These facts are established from the testimony of defendant Nos. 1 and 2 and Shri Rajesh Ahuja.

77. Learned counsel for the defendant No. 3 in his Additional Written Submissions has placed reliance on B. Vijaya Bharathi v. P. Savitri (2018) Digitally 11 SCC 761; Kadupugotla Varalakshmi v. Vudagiti Venkata Rao & Ors. 2021 SCC OnLine SC 365; and Azhar Sultana v. B. Rajmani & Ors. (2009) 17 SCC 27 to state that the plea of readiness and willingness is available to a subsequent purchaser. Additionally, defendant No. 3 asserts that the Plaintiff failed to show his continuous readiness and willingness even at the stage of evidence as he failed to file his bank statement and merely filed his wife's bank statement of the year 2004. Reliance is placed on N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao & Ors. (1995) 5 SCC 115 where the Apex court held that readiness and willingness is a condition precedent to relief of specific performance and thus, the amount of consideration which to be paid to the defendant must be proved to be available.

78. Further, reliance is placed I.S. Sikandar (supra); Mohinder Kaur v. Sant Paul Singh (2019) 9 SCC 358; and Shridhar Bajaj (supra) to state that the plaintiff is not entitled to relief of specific performance as the plaintiff has not challenged the termination of ATS by defendant No. 1 and 2, which is a condition precedent for relief of specific performance;

79. The defendant No.3 contends that unless substantial consideration is paid, courts would lean against grant of specific performance, reliance for the same is placed on M/s HOTZ Industries Pvt. Ltd. v. Dr. Ravi Ravi Singh (through LRs) 2018 SCC OnLine Del 7618; Farzana Ranjan v. Preeti Arora (2018) 251 DLT 709; Sushil Jain v. Meharban Singh & Ors. (2012) 131 DRJ 421; Raj Rani v. Prafulla Kumar (2018) 254 DLT 535; Baldev Behl & Ors. v. Bhule & Ors. 2012 (132) DRJ 247; A.K. Narula v. Iqbal Ahmed & Ors. ILR (2013) I Delhi 315; Saradamamani Kandappan v. S. Rajalakshmi 2011 (12) SCC 18; and Smt. Laxmi Devi v. Shri Mahavir Singh 2012 SCC OnLine Del 2478. Digitally

80. Learned counsel for the defendant No. 3 has placed reliance on the decision in Katta Sujatha Reddy and Another vs. Katta Sujatha Reddy and Another, (2023) 1 SCC 355, wherein it was held that 2018 Amendment to the Specific Relief Act, 1963, cannot be applied retrospectively and the benefit of this amendment, is not available in the present Suit.

81. It is further submitted on behalf of the defendant No. 3 that since only 6% of the total sale consideration was paid by the plaintiff, it is not equitable to grant him the specific performance of the Agreement to Sell dated 21.03.2004, even if the defendant Nos. 1 and 2 are accepted to be in breach of the Agreement, then too considering that the amount that had been paid by the plaintiff, he can be compensated by refund of the advance money of Rs. 21,00,000/- along with interest which has already been done by the defendant Nos. 1 and 2. It is thus, argued that the specific performance is an equitable remedy and the Court must exercise its discretionary jurisdiction while considering the grant of relief.

82. It is argued on behalf of the defendant No. 3 that without challenging the termination of Agreement to Sell dated 21.03.2004, the present Suit for Specific Performance is not maintainable under the law.

83. In the end, it is contended that any cancellation of the Sale Deed or grant of Decree of Specific Performance would result in undue hardship to defendant No. 3 who is a bona fide purchaser in whose favour the Sale Deed dated 21.04.2004 was duly executed way back in 2004 on payment of the entire sale consideration. The defendant No. 3 is also the owner of adjoining Property No. 79, Sundar Nagar, Delhi to the suit property and there is a common wall. The defendant No. 3 has already made substantial investments in the suit property by way of the improvements and Digitally renovations as per his own requirements. Moreover, this adjacent property had been purchased by him for his daughter, Ms. Sonu Wig. Therefore, the suit property has special use and value to defendant No. 3 and his family.

84. Learned counsel for the defendant No. 3 has further argued that the Agreement to Sell dated 21.03.2004 stood validly terminated vide Letter dated 20.04.2004 on account of the conduct of the plaintiff which is corroborated from the cross-examination of him. There was no reason for defendant No. 3 to disbelieve the statement of the father of the defendant No. 1 and that the Agreement to Sell dated 21.03.2004 with the plaintiff stands cancelled as the plaintiff intended to change the terms of the Agreement to Sell. It is, therefore, submitted that the discretion of the Court is not to be exercised in favour of the plaintiff.

85. Learned counsel for the plaintiff in his Rejoinder arguments has submitted that the judgment of HOTZ Industries Pvt. Ltd. (supra) is not applicable since the plaintiff has been able to prove not only through evidence but even at the stage of arguments that he had sufficient funds in his bank accounts for honouring his part of the Agreement to Sell. The defendants having hatched a conspiracy to commit the breach the Agreement to Sell, cannot assert any discretion to be exercised in their favour. The aspect of not even 10% of the sale consideration having been paid by the plaintiff or that 20 years have elapsed and the rates of the suit property have increased, cannot be raised by the defendant because of their illegal conduct in selling the suit property to defendant No. 3 who has been illegally enjoying the suit property for the last more than 20 years. The increase in price cannot be a ground to deny the Decree in favour of the plaintiff. Digitally

86. Furthermore, there is no requirement of depositing the balance money in the Court at the time of filing of the Suit as per Section 16, Explanation (i) of Specific Relief Act. The testimony of DW[2] cannot be believed as he is the broker who is the interested witness and has admitted in his cross-examination that his affidavit of evidence has been prepared by the counsel of defendant Nos. 1 and 2. Obviously, brokerage was also paid to him which makes him interested witness.

87. Learned counsel for the plaintiff has placed reliance on the decisions in K. Prakash v. B.R. Sampath Kumar, (2015) 1 SCC 597, Nirmala Anand v. Advent Corpn. (P) Ltd., (2002) 8 SCC 146 and Zarina Siddiqui v. A. Ramalingam, (2015) 1 SCC 705. The Apex Court in Pratap Lakshman Muchandi v. Shamlal Uddavadas Wadhwa, (2008) 12 SCC 67 had exercised its discretion to grant specific performance even though the plaintiff had paid consideration less than 10%. The persons who acts mala fide and commits a fraud, are defendant Nos. 1 and 2 and they cannot seek refuge under Section 20 of the Specific Relief Act which is not meant for mala fide purchasers. There is no hardship that would result to defendant No. 3 who has already enjoyed the suit property for more than 20 years. The defendant No. 3 has not proved that he has only one property as per his own submissions. The defendant No. 3 is also owner of the adjoining property.

88. It is submitted on behalf of the plaintiff that the defendant No. 3 was aware of the foreseeable hardship even when he entered into the Sale Deed dated 21.04.2004. The judgments relied upon by the defendant No. 3 are not applicable to the facts of the present case.

89. Learned counsel for the plaintiff has also explained that the property has not been sold at lesser price as claimed by defendant No.1&2. The sale Digitally consideration shown is Rs. 3,15,00,000/- in the Sale Deed i.e., the half of the amount was paid to the defendant No. 1 and other half of the amount was paid to the defendant No. 2 i.e., Rs. 1,57,50,000/-. However, the correspondence with the Income Tax Department of defendant No.1 for the Assessment Year 2005-06 proves that he got Rs. 1,61,25,000/- as a sale consideration and that he had unaccounted cash deposit of Rs. 12,40,000/- in his Standard Charted Bank account for that year. The defendant No. 1 has not produced the Invoices in regard to the cash amount in his account. The defendant No. 3 in his testimony, has deposed that the said cash was deposited on 23/24.04.2004.

90. Learned counsel on behalf of the plaintiff has also placed reliance on the decision in Sargunam vs. Chidambaram, (2005) 1 SCC 162, wherein it has been held that even though the subsequent purchaser was in possession of the property for many years, the mala fide purchaser having Notice of the Agreement to Sell, can foresee the ensuring hardship and Section 20 of the Specific Relief Act, shall not be applicable to the subsequent buyer.

91. It is sought to be explained that even though there was a slight difference in interest rate in the two Sanction Letters produced by the plaintiff and the Bank, but factum of sanction of loan is sufficient to prove that the conduct i.e., the willingness of plaintiff. The repayment capacity of plaintiff to pay loan is to be assessed not only from the Annual Income, but also from his other evidence and Investments. The Income Tax Returns of the wife also reflect that Rs. 1,20,00,000/- was the Annual return for the Assessment Year 2002-03, Ex. PW1/D[2]. These ITRs have not been challenged or disputed by the defendants.

92. Furthermore, in the case of Sukhbir Singh and Ors. vs. Brijpal Singh, Digitally AIR 1996 SC 2510, it has been observed that a law does not require the plaintiff to have ready cash but it is sufficient to establish that he had the capacity to pay the sale consideration not necessarily the plaintiff should always carry the money from the date of the Suit till the date of Decree.

93. In Rajesh Kumar vs. Manoj Jain, (1998) (47) DRJ 353, it has been held that the purchaser need not produce the money or vouch a concluded scheme for financing the transaction.

94. Likewise, in Rajesh Kumar Sharma vs. Pushpa Jaggi, 2005 SCC OnLine Del 1244, it has been held that the plaintiff should be capable and have the capacity to pay on demand whether from his account or after arranging the funds from the reliable sources, physical demonstration of money was not necessary.

95. Likewise, in Yash Deep Builders LLP vs. Sushil Kumar Singh & Anr., 2023 SCC OnLine Del 1499, it was observed by this Court that the readiness means financial capacity and willingness means conduct.

96. The plaintiff had filed the present Suit within two days of the alleged cancellation of the Agreement to Sell dated 21.03.2004 by defendant Nos. 1 and 2 and he did not violate any of the terms of the Agreement to Sell which proves his willingness to honour his part of the Agreement to Sell.

97. The plaintiff has also produced his latest Bank Account Statements dated 20.12.2023 from 01.12.2023 to 20.12.2023 during the final arguments to establish his financial capacity.

98. In the end, it has been explained that wife was not a material evidence in terms of Section 120 of Evidence Act. Even defendant No. 2 did not step into the witness box. The Bank Statements duly signed and certified under the Bankers Books Evidence Act, have been duly proved in the law. Digitally

99. It is thus, concluded that the plaintiff is entitled to the specific performance of the Agreement to Sell and the Decree in the present Suit.

100. Arguments addressed at length as well as the Written Submissions filed on behalf of the parties along with the evidence, documents and other record, perused. The issue-wise findings are as under: - Issue No. 1: Whether the suit is valued properly for the purposes of court fee and jurisdiction? OPP

101. The defendants have taken a preliminary objection that the plaintiff has not valued the Suit properly for the purposes of court fees and jurisdiction and that the plaintiff is liable to pay ad volorem court fees on the relief of Cancellation of the Sale Deed dated 21.04.2004.

102. The plaintiff has valued the suit at Rs. 3,22,50,000/- for the purpose of Court fee and Rs. 3,22,50,000/- for the purpose of jurisdiction and based on this amount the Court fee of Rs. 3,17,500/- has been paid on the suit amount. Further, for the relief of Declaration the suit is valued at Rs. 3,15,00,000/on which a fixed Court fee of Rs. 20/- is affixed.

103. Section 7 of the Court Fees Act, 1870 provides for computation of fees payable in suits. It envisages the calculation of the suit value to be done by the plaintiff himself according to the amount claimed in the relief. Section 7(i) states that the value of suit is decided as per the amount claimed in a suit for money.

104. Further, Section 8 of Suit Valuation Act, 1887 puts an obligation on the plaintiff to value the suit for the purpose of court fee and jurisdiction identically except for suits provides under Section 7 paragraph 5, 6, 9, 10 Clause (d) of the Court Fee Act, 1870. Digitally

105. The Apex Court in the case of Sri. Ratnavaramaraja v. Smt. Vimla, AIR 1961 SC 1299 determined how the valuation of court fees is to be done in suits seeking Declaration of a Sale deed as null and void. It was observed that whether proper Court Fees is paid or not is primarily a question between plaintiff and the State. It is not to arm the contesting party (defendant) with a weapon of defence to obstruct the trial. Further, the plaint allegations alone are decisive to determine Court fees and not written statement, pleas or final decision in the suit on merits.

106. The plaintiff has paid the Court fees of Rs. 3,17,500/-.

107. In so far as the Court Fees on the relief of Cancellation of Sale Deed in favour of defendant No.3 is concerned, in the celebrated case of Suhrid Singh @ Sardool Singh v. Randhir Singh & Ors, 2010 (12) SCC 112, the Apex court has observed as under:-

Digitally stated in the sale deed. If `B', who is a non-executant, is in possession and sues for a declaration that the deed is null or void and does not bind him or his share, he has to merely pay a fixed court fee of Rs. 19.50 under Article 17(iii) of Second Schedule of the Act. But if `B', a nonexecutant, is not in possession, and he seeks not only a declaration that the sale deed is invalid, but also the consequential relief of possession, he has to pay an advalorem court fee as provided under Section 7(iv)(c) of the Act. Section 7(iv)(c) provides that in suits for a declaratory decree with consequential relief, the court fee shall be computed according to the amount at which the relief sought is valued in the plaint. The proviso thereto makes it clear that where the suit for declaratory decree with consequential relief is with reference to any property, such valuation shall not be less than the value of the property calculated in the manner provided for by clause (v) of Section 7."

108. In the present case the plaintiff has sought cancellation of Sale Deed executed by DefendantNo.1&2 in favour of Defendant No.3 and is not a party to the Sale Deed. Therefore, in terms of Suhrid Singh @ Sardool Singh (supra), a fixed Court is required to be paid.

109. Hence, the plaintiff has paid the appropriate Court Fee on the Reliefs claimed by him. It is held that there is no deficient Court fee that is payable.

110. Therefore, this issue is decided against the defendants. Issue No. 4: Whether the agreement to sell dated 24th March, 2004 has been validly terminated as alleged in the written statement of defendant Nos. 1 and 2? OPD 1 & 2; Issue No. 5: Whether the defendant No. 3 is the bonafide purchaser not with prior notice in respect of the suit property? OPD[3] Digitally

111. The question which now needs deliberation is whether the Agreement to Sell dated 21.03.2004 Ex. PW 1/1 had been validly terminated by Defendant No. 1 and 2 vide Letter dated 20.04.2004 Ex. PW 1/16, before the stipulated period execution in the Agreement, which was 15.05.2004.

112. To evaluate the validity of a unilateral rescission of a contract, it would be apposite to refer to the judgment of the Madras High Court in Raja Rajeswara Dorai v. A.L.A.R.R.M. Arunachellan Chettiar, 1913 SCC OnLine Mad 276 where it was observed that a unilateral expression of rescission of a contract by one of the parties to the contact cannot be held to relieve him from his obligation to have the contract rescinded by Court under the substantive law and within the time allowed by statutory law if he wants as a plaintiff the assistance of the Court in obtaining certain reliefs on the basis that the contract has ceased to exist. It was observed that repudiation of a contract by one party alone cannot get the party any relief except as consequent of getting a declaration and a rescission by the Court. Thus, a contract can be properly rescinded without the intervention of a Court only by the act of both parties or if the original contract or Deed itself by Clauses of forfeiture or similar clauses, puts an end to the contract or transaction. However, even the latter case has to be determined by both the parties and only then the aid of the Court is not required. Therefore, even though a contract or transaction may be voidable at the instance of one party, its rescission is effectuated not by the mere repudiation of one party, but by the decree of Declaration of this Court.

113. It has been further explained by Punjab and Haryana High Court in the case of Brahm Dutt v. Sarabjit Singh, 2017 SCC OnLine P&H 5489 that unilateral cancellation of Agreement to Sell by one party, is not permissible Digitally in law except where the agreement is determinable in terms of Section 14 of this Specific Relief Act, 1963 and such cancellation cannot be raised as a defence in a suit for Specific Performance. If any such plea of cancellation/termination is raised by the defendant, the Court can just ignore the same and the plaintiff is also not required to challenge such a cancellation or revocation. It was further observed that if such unilateral cancellation of non-determinable agreements is permitted as a defence, then virtually every suit for specific performance can be frustrated by the defendant. On the contrary, if the defendant so claimed that he had valid reasons to terminate the contract or rescind the contract, then he ought to have sought a Declaration from the competent Court, as required under Sections 27 and 31 of Specific Relief Act, 1963.

114. Thus, once a party claims the right of revocation or rescission of the Agreement, then such party is required to seek a Declaration from the Court regarding the validity of revocation or rescission, as the case may be.

115. The facts of the present case may thus, be analysed to ascertain whether the unilateral termination of ATS, was justified. Admittedly, the parties entered into an Agreement to Sell dated 21.03.2004, Ex. PW 1/1 in regard to the suit property for the sale consideration of Rs.3,22,50,000/- and that a sum of Rs.21,00,000/- was paid by the plaintiff as advance money to the defendants and a balance amount of Rs.3,01,50,000/- remained to be paid at the time of registration of the Sale Deed at which time the physical vacant possession was to be handed over to the plaintiff. The relevant terms of the Agreement to Sell read as under:- “that the Vendors will execute and get the Sale Deed of the said portion of the said property registered, in favour Digitally of the Vendee or his nominee/s on or before 15.05.2004; … that pending completion of the sale, the Vendors neither shall enter into any Agreement of sale in respect of the said portion of the said property or any part thereof nor shall create any charge, mortgage, lien or any arrangement, in respect of the said portion of the said property in any manner whatsoever; … that in case any of the party hereto infringes any of the terms and conditions of this Agreement to Sell, then the other party shall be entitled to get this transaction enforced through the Court of Law by Specific Performance of the Contract, at the cost and expenses of the defaulting party.”

116. This Agreement to Sell was not only signed by the plaintiff and the defendants but was also witnessed by the two witnesses, namely, Colonel C.K. Vaid R/o B-1, Sunder Nagar, New Delhi and by Ms. Ranjana Ahuja R/o 903, Nirmal Towers, 26 Barakhamba Road. It was thus, clearly stipulated in terms of the Agreement to Sell that the Sale Deed was required to be executed by 15.05.2004.

117. However, before the expiry of the stipulated period for honouring the respective obligations, the defendant has admittedly terminated the Agreement on 20.04.2004 i.e. much prior to the date stipulated for completion of the obligations under the Agreement.

118. The explanations given by the defendant for earlier closure of the Agreement to Sell by way of its termination Letter dated 20.04.2004, Ex.DW-1/1 are that a telephone call was received on 10.04.2004 from the plaintiff, suggesting to sign a new Sale Agreement for total consideration of Rs.[2] Crores. Digitally

119. It is further stated in the Letter of termination that “instead of sticking to the terms and conditions agreed between the parties, the plaintiff had allegedly started approaching the owners of first and second floor, who are the family members and also through their neighbours. This is highly objectionable and against the spirit of signing the Agreement between us. We will appreciate that we made it very clear to you that we have been residing in this house for the past 50 years and we would like to inform the concerned people at an appropriate time. The act of yours going to the neighbours and informing them of your purchase of the property and their involvement during the pendency of the final sale is totally not acceptable to us.”

120. The Latter further stated that “you will recall that after signing Agreement to Sell no suggested to deal directly between us without the brokers M/s Cosmos Developers Pvt. Ltd. so that you could save the brokerage, which was totally unethical. However, your lack of sensibility and your aggressive conduct leaves us with no choices.” The defendants returned the amount received from the plaintiff by way of Pay Orders along with the Letter of Termination and also pay an additional amount of Rs.42,000/- as interest @24% p.a., from the date of signing of the Agreement to Sell.

121. From the Notice of termination, the three grounds stated for premature cancellation, are:

(i) Re-negotiations of terms in regard to the cash competent of the agreed sale consideration.

(ii) Informing the neighbours even though the sale had not been effected.

(iii) The endeavour to avoid the broker in order to save the brokerage amount.

122. The case of the defendants, is that on 10.04.2004, a call was received from the plaintiff to Mr. Rohit Vaid suggesting that the part sale consideration of Rs.2,00,00,000/- be received through the cheque while the balance amount may be received in cash. First and foremost, there is no cogent evidence in this respect. However, even if it is accepted that the plaintiff had made a call on 10.04.2004 suggesting that an adjustment in the cash and the cheque payment, it cannot be considered as any ground for cancellation/pre-mature termination of Agreement to Sell.

123. The defendants have asserted that plaintiff had wanted re-negotiations on the 'white component'; that in itself was not a sufficient ground and once the defendant had expressed its disinclination to re-negotiate, he should have waited till the expiry of the period contemplated in the Agreement to Sell, for completion of the sale transaction or at least should have written or in any other manner, conveyed its disinclination to now re-negotiate the terms. A unilateral assertion of there being a request by the plaintiff, for readjustments of the sale consideration which was not acceptable to the Defendant No.1&2, is no valid ground for pre-mature termination of the Agreement to Sell.

124. In Lala Durga Prasad (supra), same question came up for consideration, wherein Vivian Bose J. observed that mere request on the part of the plaintiff was not a re-negotiation having regard to the subsequent inflation or to insert inflated price in the already concluded Agreement to Sell which got rejected by the defendant, would not amount to a valid Digitally ground for termination of the Agreement to Sell by the defendant. Essentially, these are merely the requests which are not agreed to and it is only the terms of the executed Agreement to Sell that would prevail. It was held that a dispute arising subsequent to the Contract for Sale about a particular clause in the Deed during the negotiation about the form of the Deed, should not be taken to affect the completeness of the Contract already agreed between the parties.

125. Similar facts as in hand were considered in the case of Rakesh Kumar Jain (supra), wherein the defendant allegedly cancelled the Agreement to Sell since the plaintiff approached the defendant for re-negotiation of some terms and also proposed a change in the terms of the Agreement to Sell. It was held that even if an endeavour was made by the purchaser to propose some re-negotiation of the terms which were not accepted, then it is the original terms of the Agreement to Sell that would prevail and mere endeavour to re-negotiate does not give any right to the defendant to unilaterally terminate the Agreement to Sell. The original Agreement to Sell shall remain valid and subsisting according to its term till the timeframe agreed by the parties for the execution of the Sale Deed.

126. The second ground, which has been agitated is that the plaintiff despite being told not to make the Agreement to Sell public, had started informing the neighbours about the Agreement to Sell.

127. This contention needs to be appreciated in the context that the subsequent purchaser/defendant No. 3 to whom the property has been sold, had a keen interest in purchase of the suit property as the first floor and the second floor of the property in question, was occupied by his family Digitally members. It is deposed by the defendant No. 1 that the defendant No. 3 had a keen interest in purchase of the suit property and because of the finalised deal with the plaintiff, the defendant had an interest in keeping this transaction under covers till it got materialized.

128. While it is not in dispute that the family members of the defendant No. 3, occupied the first and second floor and defendant No. 3 may have had an interest in purchase of the property but the claim that the transaction was kept under covers, is absolutely demolished by the testimony of the broker PW-2, Mr. Rajesh Ahuja who in his cross-examination, had submitted that the proposal for the first time for sale of the suit property, came to him in January/February, 2004, at which time the value of the property was between 3.25 Crore to 3.50 Crore. The deal was brought to him by father of Mr. Rohit Vaid. He did not deal in regard to this transaction with Mr. Rohit Vaid or with defendant No. 2, Ms. Ranjana Tandon. He has further explained in his cross-examination that he circulated a Letter in entire Sunder Nagar mentioning that the property is up for sale. Thereafter, Mr. Sharma, the father of the plaintiff, contacted him for purchase of the property, for his son and daughter-in-law. He circulated the Letter pertaining to the sale of property to the residents, whose addresses were obtained from the Directory of Sunder Nagar Residents from the father of the defendant No. 1.

129. The admissions made by PW-2, Mr. Rajesh Ahuja thus, clearly establish that there was no secrecy attached to this transaction as the availability of this property for sale, got circulated through pamphlets way back in January/February, 2004 while the Agreement to Sell was entered on 21.03.2004. Thus, the second ground of early termination is also not borne Digitally out from the evidence on record.

130. The third ground stated in the Letter of Termination, was that after the Agreement to Sell was entered, he had proposed to defendant, to do direct talking in order to save the brokerage. Again, this ground is not acceptable for the simple reason that firstly, there is no such cogent evidence in this regard. Secondly, PW-2, Mr. Rajesh Ahuja has admitted in his crossexamination that his brokerage was paid by cheque by Mr. Wig, the subsequent purchaser. He deposed that “I think it was paid in two instalments. First after the completion of the Sale Deed and second after the completion of the Mutation etc. I did not get anything from defendant Nos. 1 and 2 as brokerage for the property as settled between us.”

131. From these admissions of PW-2, Mr. Rajesh Ahuja, it is apparent that it was the defendants, who were not inclined to pay the brokerage and had been looking for ways of avoiding it. They did not pay any brokerage to PW-2 even after the sale was effected in favour of the defendant No. 3. The entire brokerage got paid by the subsequent purchasers, which clearly reflects that there was no disinclination by the plaintiff to pay the brokerage to Mr. Rajesh Ahuja; in fact no such occasion arose for the plaintiff to pay the brokerage as the deal did not fructify. It is again a manufactured reason by the defendant, to justify his pre-mature termination.

132. Any of the reasons as stated in this Letter of Termination, Ex. DW- 1/1, has not been proved or established and it does not reflect to any conduct of the plaintiff which justify pre-mature termination of the Agreement to Sell.

133. Having concluded that there was no default on the part of the plaintiff, it is interesting to consider the circumstances in which the defendant Digitally terminated and also to infer his intent for doing so. As already observed above, the defendant No. 3, the subsequent purchaser was occupying the adjoining property, which has the common wall with the property in question. Admittedly, the first floor and second floor was in the possession of relatives of the defendant No. 1 and defendant No. 2. The defendant No. 3 did not initially come forth to purchase the property when the pamphlets got circulated in this regard in January/February, 2004.

134. The testimony of DW-1, Mr. Rohit Vaid is of extreme relevance on this account. He has deposed that on or about 10.04.2004, the plaintiff had called him to suggest that he was unable to arrange the entire amount of Rs.3,22,50,000/- by cheque that he would be able to arrange Rs.[2] Crores by sale of his two properties while the balance amount may be taken in cash. The defendant expressed its disinclination and insisted on not re-negotiating any of the terms, as agreed in the Agreement to Sell. The plaintiff threatened that in case he did not agree to the suggested terms, he would file the suit and obtain a stay from the Court, restraining the defendant from selling his property to anybody else and put it in litigation. He then talked to the broker, who told him to immediately look for another buyer. However, in his cross-examination, he has deposed that when he got the call from the plaintiff on 10/11.04.2004 asking him to adjust the cash component and threatened to take him to Court, he verbally told him that he was cancelling the Agreement with him. He further stated that he also informed the broker, Mr. Rajesh Ahuja about the recall of the deal with the plaintiff. He further stated that he does not know if Mr. Rajesh Ahuja would have told the plaintiff that the deals stand cancelled.

135. From the contrary explanations given by defendant No.1, it is quite Digitally evident that the defendant may have developed an apprehension on the alleged suggestion by the plaintiff of re-adjustment of the cash component, which prompted him to immediately cancel the deal out of the fear of the property getting stuck in litigation.

136. He has further stated that he sold the suit property to defendant No. 3 at a lesser amount that he had agreed to sell to the plaintiff, though the plaintiff has refuted the same. His explanation in the cross-examination is that he had already contracted for purchase of a flat at Bombay and because of his commitment at Bombay, he wanted to get away from this place so he had to sell the property at a lesser amount to the defendant No. 3.

137. PW-2, Mr. Rajesh Ahuja has also admitted in his cross-examination that immediately after receiving this alleged call from the plaintiff on 10.04.2004, the defendant No. 1, he informed him about his conversation between the plaintiff and Mr. Rohit Vaid and that after heated discussion, Mr. Rohit Vaid had cancelled the deal.

138. It is quite apparent that Mr. Rohit Vaid, defendant No. 1 may have got some apprehension of this property getting stuck in litigation, which prompted him to sell it of in a clandestine manner to defendant No. 3 even though there was a valid and subsisting Agreement with the plaintiff.

139. Even if for the sake of arguments, it is accepted that the plaintiff had called the defendant No. 1, to suggest if the cash component could be increased but he at no point of time, even as per the defendant Nos. 1 and 2, retracted or refused to pay the total sale consideration. Mere suggestion to vary the cash component, cannot be considered as a valid ground for termination of the Agreement especially when there was sufficient time for the plaintiff, to honour his commitment under the Agreement to Sell. Clearly Digitally it is pure apprehension of the defendant No. 1 that this deal may get stuck in litigation, that he chose to clandestinely in hush-hush manner, sell the property to the defendant No. 3.

140. In this regard, it is also pertinent to refer to the testimony of the parties, to examine the manner in which the Sale Deed got executed in favour of the defendant No. 3. According to the defendant Nos. 1 and 2, the Letter of Termination of Agreement to Sell was dated 20.04.2004 and the sale was executed thereafter on the next day.

141. The defendant No. 3, Mr. Pradeep Wig in his testimony, has deposed that on 11.04.2004, he received a call from Colonel Vaid, father of defendant No. 1, who enquired if he was interested in purchase of the suit property since he was planning to go to Goa. On 12.04.2004, he told him that he would think over it and inform him after his return from Goa. He negotiated with Colonel Vaid, for purchase of the property for sale consideration of Rs.3,50,00,000/-, on his return from Goa. On 17.04.2004, he was told that the defendant Nos. 1 and 2 had earlier agreed to sell the suit property to the plaintiff but because the plaintiff wanted to change the agreed terms, the Agreement got cancelled on 10.04.2004, a fact which was confirmed by the broker, Mr. Rajesh Ahuja. However, before making any payment, he asked the defendants to show him a written communication of cancellation addressed to the plaintiff. The defendant then had shown him the Letter dated 20.04.2004, addressed to the plaintiff, which was stated to have been sent to the plaintiff. He only thereafter, entered into the Sale Deed with the defendant Nos. 1 and 2. He has claimed that he was a bona fide purchaser of the suit property, who had ensured valid termination of the earlier Agreement to sell, before executing the Sale Deed. Digitally

142. Certain pertinent admissions have been made by DW-3, Mr. Wig in his cross-examination. He has clarified that when the suit property was first offered to him on 11.04.2004 by Colonel Vaid, the price range was hinted at something between 3 Crores to 3.25 Crores but the exact amount was not specified. The negotiations finally took place between 16th to 18.04.2004, during which the defendant No. 1 and the broker, Mr. Ahuja, were also present. He had asked for the document for cancellation of the earlier Agreement. The parties had signed the Memorandum of Understanding (MOU) dated 20-21.04.2004 and the Letter of cancellation dated 20.04.2004, was part of the MOU. Pertinently, he denied to have purchased the stamp paper for MOU dated 21.04.2004, Ex.DW-1/2.

143. PW-2, Mr. Rajesh Ahuja, has explained in his cross-examination that MOU and the Sale Deed, must have been typed on 20.04.2004 and that they may have been typed in his office. He further clarified that the MOU and the Sale Deed was signed on 21.04.2004 at 8.30 a.m., after which they straight away went to the Office of the Sub-Registrar where the Sale Deed was duly executed.

144. The claim of DW-3, Mr. Pradeep Wig that only after he satisfied himself by seeing the Letter of cancellation dated 20.04.2004 that he entered into the MOU, is completely belied by the testimony of Pw-14, Mr. Rajesh Kumar, who has produced the records of the purchase of the stamp paper. He produced the original Challan dated 19.04.2004 whereby non-judicial stamp paper for Rs.25,20,000/- was purchased in respect of the Residence No. 81/ Ground Floor, Sunder Nagar, New Delhi. The amount was deposited in favour of Mr. Pradeep Wig R/o 79, Sunder Nagar, New Delhi on 19.04.2004. This testimony thus, shows that pursuant to the negotiations Digitally between father of the defendant No. 1 and the defendant No. 3, the stamp paper for execution of MOU, got purchased even prior to the cancellation of the deal.

145. Similar is the testimony of PW-2, Mr. Amar Pal Singh from Delhi Treasury, Tis Hazari, Delhi, who has also corroborated that the stamp duty for MOU, had been purchased in the name of Mr. Pradeep Wig on 19.04.2004 and was released on 20.04.2004. The Challan Pass Register is exhibited as Ex.PW-2/D-1.

146. The evidence on record thus, shows that despite admittedly the defendant No. 3 being aware of the earlier Agreement to Sell, chose to enter into negotiations and agreed to purchase the suit property even before it was terminated by the defendant Nos. 1 and 2. This is evident from all the arrangements being done in this regard as the stamp paper got purchased on 19.04.2004 and was issued on 20.04.2004. Evidently, the defendant No.3 was conscious that except the oral assurances, there was no document of Recession of ATS and insisted on written Notice. The Letter of termination was thus, prepared on 20.04.2004 from which it is obvious that there was no termination at the time when the stamp paper was purchased for the execution of the Sale Deed in favour of the defendant No. 3.

147. Another significant aspect is the testimony of PW-4, Ishwar Mishra, PRI (P) Post Office Malka Ganj, Delhi. He produced the summoned record Ex.PW-4/1 and deposed that the original record stands weeded out as per the Office Order. As per the available record, the Register Letter No. 3281 dated 20.04.2004, was posted from the Post Office Malka Ganj. Pertinently, PW- 5, Mr. Malik Singh, PRI(P), Post Office Lodhi Road, New Delhi, has deposed that as per the summoned record, the Letter was delivered to the Digitally addressee on 21.04.2004 at 3:00 p.m. that is by when the Sale Deed was already executed, thereby establishing that the Sale Deed in favour of the Defendant No.3 got executed prior to the service of Legal Notice on the Plaintiff.

148. It has been argued on behalf of the plaintiff that both the parties were resident of Sunder Nagar and there is no logic of posting the Letter from Malka Ganj which is nowhere in the vicinity of Sunder Nagar. It is agued that the sole objective of doing so was to ensure that the Notice was served upon the Plaintiff only after the Sale Deed was executed.

149. From the manner in which the Letter of termination has been prepared, posted and delivered, leads much to be said. It is quite apparent that this Letter of Termination dated 20.04.2004, had been prepared only to satisfy the defendant No. 3 that the Agreement to Sell stands terminated because of his insistence to ensure that their prior Agreement to Sell stands cancelled, as is also admitted by him in his cross-examination. In this context, it would also be pertinent to refer to the admissions, made by the defendant No. 3, in his cross-examination that he had insisted on being satisfied about the cancellation of previous Agreement to Sell and only after the Letter for termination was shown to him, that he entered into the Memorandum of Understanding.

150. Secondly, the oblique way of preparing this Notice of termination, is also evident from the fact that it was shown in the morning of 20.04 2004 to the defendant No. 3 but had been posted from a faraway Post Office in Malka Ganj in the afternoon, clearly reflecting that while the documents were being prepared on 20.04.2024, the Notice of termination had not been served upon the plaintiff in regard to the termination. Digitally

151. Further, the Sale Deed has got executed in the morning of 21.04.2004 while the Notice of termination, has been served subsequently on the same day at 3:00 p.m. It needs no reiteration that there was no service of Notice of Termination upon the plaintiff prior to the execution of the Sale Deed. Defendant Nos. 1 and 2 have executed the Sale Deed on 21.04.2004 in favour of Defendant No.3 even though till that time, there was a valid and subsisting Agreement to sell in favour of the plaintiff.

152. It cannot be overlooked that even though the defendant No. 3 was being cautious in enter into this sale transaction and had been conscious and aware of the earlier subsisting Agreement to Sell, he has admitted that he did not in any manner contact the plaintiff or otherwise satisfy himself about the valid termination of the earlier Agreement to Sell. The manner in which the entire transaction has been executed, clearly establishes that the defendant No. 3 while has been a party to the creation and execution of the documents and has even mentioned about the earlier Agreement to Sell in the Sale Deed, Ex. PW 1/1 but has deliberately not contacted the plaintiff, to confirm from him about the alleged cancellation of the earlier Agreement to Sell, as any prudent reasonable person would do in the given circumstances especially when the consequences of the earlier Agreement to Sell, were well within the knowledge and of all the parties.

153. The defendant No. 3 has acted selectively and had chosen to ensure that there was proper paper work done and has not acted like a reasonable person, to ensure the cancellation of earlier Agreement to Sell. Though he has claimed himself to be a bona fide purchaser, but from the fact that earlier ATS was well within the knowledge of the defendants, manner in which the documents have been executed and also the fact that the Notice of Digitally termination of the Agreement to Sell has been served subsequently, the only inference that can be drawn is that the subsequent sale in favour of the defendant No. 3, has been made without there being any valid termination of prior Agreement to Sell with the plaintiff. The termination has neither been in accordance with any Clause of ATS nor is it with the consent of both the parties.

154. Thus, the unilateral cancellation/termination of Agreement To Sell dated 21.03.2024 Ex. PW 1/1 by defendants No. 1 & 2 is not valid and the Agreement to Sell is held to be subsisting and executable. Moreover, it is proved that the defendant No.3 is not a bona fide purchaser as claimed by him.

155. In conclusion, there being a valid subsisting Agreement to Sell, which was well within the knowledge of the defendant No. 3. He cannot defend the subsequent Sale Deed executed in his favour. The plaintiff continues to have a right to seek the execution of the Agreement to Sell, Ex.PW-1/1, in his favour.

156. Issue Nos. 4 and 5 are, therefore, decided in favour of the plaintiff.

157. The plaintiff has sought the declaration of the Sale Deed dated 21.04.2004 executed by the defendant Nos. 1 and 2 in favour of the defendant No. 3 to be non-est, illegal, bad in law and without effect.

158. There are two aspects which are involved in the present issue, the first Digitally aspect being whether there was a unilateral cancellation of the Agreement to Sell dated 21.03.2004 by the defendant Nos. 1 and 2 and whether the Sale Deed dated 21.04.2004 executed by the defendant Nos. 1 and 2 in favour of the defendant No. 3 despite the latter being aware of the earlier existing Agreement to Sell dated 21.03.2004, is liable to be declared as null and void. The second aspect is what would then be the rights of subsequent purchaser in regard to the prior valid and subsisting ATS.

159. The first aspect is in regard to the unilateral cancellation of the Agreement to Sell dated 21.03.2004 by the defendant No. 1 on their own perceived notions. It is the case of the defendant Nos. 1 and 2 that because the plaintiff wanted to re-negotiate the terms of the Agreement to Sell dated 21.03.2004 in regard to the cash component payable by the plaintiff, the defendant Nos. 1 and 2 immediately out of fear of being involved in the litigation cancelled the Agreement to Sell dated 21.03.2004 vide Notice dated 20.04.2004.

160. A reference may first be made to Bishambhar Nath Aggarwal vs. Ved Kishan Chand, AIR 1990 Allahabad 65, wherein it has been observed that if any Agreement states that a particular act relating to the furtherance of the contract as to be done in a particular manner, then it should be done in that manner and it is not open to the concerned parties to chalk out his own manner of performing his part of contract.

161. This aspect was considered by the Punjab and Haryana High Court in Brahm Dutt (supra) which has been upheld by the Apex Court vide SLP (C) Diary No. 12876/2018 dated 01.05.2018. It was observed that the defendant cannot unilaterally cancel the Agreement as it is not permissible in law, except where the Agreement is determinable in terms of Section 14 of the Digitally Specific Relief Act, 1963. Such cancellation cannot be raised as a defence in a Suit for Specific Performance. If such unilateral cancellation of nondeterminable Agreement is permitted as a defence then virtually every Suit for Specific Performance can be frustrated by the defendant. If such plea of cancellation/termination is raised by the defendant, the same can be ignored by the Court and the plaintiff need not challenge the alleged cancellation.

162. In the present case as well, there was a unilateral cancellation by the defendant Nos. 1 and 2 without any reason, cause or justification. Therefore, there is no duty cast upon the plaintiff to challenge the alleged cancellation of the Agreement to Sell dated 21.03.2004. It was for the defendant Nos. 1 and 2 to have proved that the termination of the Contract was for valid reasons which they have failed to establish.

163. Pertinently, merely by giving the Legal Notice dated 20.04.2004 which, in fact, got served upon the plaintiff after the execution of the Sale Deed on 21.04.2004 and mere enclosing the cheques returning the earnest amount along with the interest of 24%, would also not justify the unilateral cancellation, nor would it tantamount to determination of the Agreement to Sell dated 21.03.2004.

164. Therefore, the unilateral cancellation being no in accordance with the Sections 14 and 19 of the Specific Relief Act, 1963 and being without any basis, no separate Declaration in regard to the unilateral cancellation of the Agreement to Sell by the defendant Nos. 1 and 2, was warranted.

165. It is also evident that in the facts of the present case, no Declaration was required to be sought by the Plaintiff in regard to the Cancellation of ATS being invalid. Rather, it was for the defendant Nos. 1 and 2 to have filed the Suit for Declaration before the Competent Court to get the Digitally Declaration in regard to their termination of the Contract.

166. Reference may be made to the case of S.K. Ravichandran (supra), wherein no Declaration in regard to the cancellation of the Agreement was sought by the plaintiff in the Suit. It was observed that the unilateral cancellation is not permissible under law, except in terms of the Section 14 of the Specific Relief Act, 1963, where the Agreement is determinable. Such cancellation cannot be even agitated as a defence in the Suit for Specific Performance and no separate challenge to such unilateral cancellation needs to be made separately.

167. Therefore, the defendant Nos. 1 and 2 had no reason to unilaterally cancel the Agreement to Sell dated 21.03.2004 on the grounds as stated herein and no Declaration in this regard was required under law to be made by the plaintiff.

168. The next aspect which comes up for consideration is what are the rights of the defendant No. 3 on whose favour the Sale Deed 21.04.2004 has been executed by the defendant Nos. 1 and 2?

169. This aspect was considered in detail in the case of Lala Durga Prasad (supra), wherein it was observed that the rights of the subsequent purchaser who holds the property under an Agreement to Sell which is valid between the plaintiff and the defendant, can be considered from four aspects.

170. Section 91 of the Indian Trusts Act, 1882 does not make the subsequent purchaser with Notice a trustee properly so called, but saddles him with an obligation in the nature of a trust (because of Section 80) and directs that he must hold the property for the benefit of the prior Contractor, if we may so describe the plaintiff, to the extent necessary to give effect to the Contract. Digitally

171. Section 3 illustration (g) of the Specific Relief Act, 1877 reads as “(g) A buys certain land with notice that B has already contracted to buy it. A is a Trustee, within the meaning of this Act, for B, of the land so bought.” This illustration thus, reflects that the subsequent buyer becomes a Trustee for the plaintiff but only for the purpose of that act.

172. Section 40 of the Transfer of Property Act, 1882 enacts that this obligation can be enforced against a subsequent transferee with Notice, but not against one who holds for consideration and without Notice.

173. It was thus, held in Lala Durga Prasad (supra) that the proper form of decree is to direct the Specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the Conveyance so as to pass on the title which resides in him to the plaintiff.

174. Section 27 of the Specific Relief Act, 1963 is also to similar effect, which reads as under: - “Section 27. When rescission may be adjudged or refused. (1) Any person interested in a contract may sue to have it rescinded, and such rescission may be adjudged by the court in any of the following cases, namely: –– (a) where the contract is voidable or terminable by the plaintiff; (b) where the contract is unlawful for causes not apparent on its face and the defendant is more to blame than the plaintiff. (2) Notwithstanding anything contained in sub-section (1), the court may refuse to rescind the contract –– (a) where the plaintiff has expressly or impliedly ratified the contract; or (b) where, owing to the change of circumstances which has taken place since the making of the contract (not Digitally being due to any act of the defendant himself), the parties cannot be substantially restored to the position in which they stood when the contract was made; or

(c) where third parties have, during the subsistence of the contract, acquired rights in good faith without notice and for value; or

(d) where only a part of the contract is sought to be rescinded and such part is not severable from the rest of the contract.”

175. In the present case, in view of the aforesaid Sections the status of defendant No. 3 is nothing more than that of a trustee of the suit property for and on behalf of the plaintiff till the Sale Deed under the Agreement to Sell dated 21.03.2004 is executed in his favour.

176. This aspect also came up for consideration in Thomson Press (India) Ltd. (supra), wherein Justice T.S. Thakur in his separate judgment referred to Section 52 of the Transfer of Property Act, 1882 to observe that there is no room for any doubt that the transfer of the suit property pendete lite is not void ab initio and that the purchaser of any such property with Notice prior to Agreement to Sell, takes the bargain subject to the rights of the plaintiff in the pending Suit. The party committing the breach may doubtless incur the liability to be punished for the breach committed by it, but the sale by itself may remain valid as between the parties to the transaction subject only to any directions that maybe passed by the Competent Court in the Suit against the seller.

177. In Nagubai Ammal & Ors. vs. B. Shama Rao & Ors., AIR 1856 SC 593, the Apex Court, in the context of the Section 52 of the Transfer of Property Act, 1882, observed that the words “so as to affect the rights of any other party thereto under any decree or order which may be made therein”, Digitally S.52 makes it clear that the transfer is good except to the extent that it might conflict with rights decreed under the decree or Order. It is in this view that transfers pendente lite, have been held to be valid and operative as between the parties thereto.”

178. Likewise, in Vinod Seth vs. Devinder Bajaj, (2010) 8 SCC 1, the Apex Court noted that Section 52 TPA does not render transfers affected during the pendency of the Suit void but only renders such transfers subservient to the rights as may be eventually determined by the Court.

179. Similar observations were made in A. Nawab John & Ors. vs. V.N. Subramanyam, (2012) 7 SCC 738, wherein it was observed that Section 52 TPA only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the Suit unless the property was alienated with the permission of the Court.

180. In the present case, as has been discussed in detail, the suit property had been purchased by the defendant No. 3 with sufficient Notice of the earlier existing Agreement to Sell dated 21.03.2004 between the plaintiff and the defendant Nos. 1 and 2. The conduct of the defendant Nos. 1 and 2 and that of the defendant No. 3 clearly reflects that the defendants No. 1 and 2 were well aware that there was no valid termination of the Agreement to Sell dated 21.03.2004 and the defendant No. 3 also conveniently accepted the representations made by the defendant Nos. 1 and 2 who showed him a Legal Notice of termination of the Agreement to Sell dated 21.03.2004 prepared, though not served till then.

181. It is quite evident that the defendant No. 3 had full Notice of the valid Agreement to Sell dated 21.03.2004 between the plaintiff and the defendant No. 2, despite which he took the chance of purchasing the suit property. Digitally

182. It is, therefore, held that the rights of the defendant No. 3 are subservient to the rights of the plaintiff and he is bound by the final Decree that may be passed in the present Suit.

183. Therefore, the issue is answered accordingly.

184. Issue No. 3: Whether the plaintiff is entitled to a decree for specific performance against the defendants? OPP

185. This issue encompasses two aspects; firstly whether the plaintiff was ready and willing to perform his part of the contract; and secondly whether equity lies in his favour for execution of the Sale Deed.

186. Before evaluating the facts of the present case, it would be appropriate to first examine the principles of seeking Specific Performance in terms of an Agreement to Sell. Section 16 of the Specific Relief Act, 1963 stipulates the circumstances when a relief for specific performance shall not be granted by a court. The relevant part of the provision of it reads as under: “Section 16 Personal Bars to Relief - Specific performance of a contract cannot be enforced in favour of a person- (a) ….. (b) ….. (c) [who fails to prove] that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation - For the purpose of clause (c), -

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

(ii) the plaintiff [must prove] performance of, or readiness and willingness to perform, the contract according to its true construction.”

187. The principles relating to specific performance as contained in Digitally Sections 16(c), 20, 21, 22 and 23 of the Specific Relief Act, 1963 read with Forms 47/48 of Appendix A to C of the Civil Procedure Code, 1908 were succinctly summarized by the Supreme Court in Kamal Kumar v. Premlata Joshi, 2019 SCC OnLine SC 12 as under:

188. It was further observed by the Apex Court in Kamal Kumar v. Premlata Joshi (supra), that 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.

189. The first requirement is the existence of a valid and concluded Digitally agreement between the parties. It is an admitted fact that the impugned Agreement to Sell dated 21.02.2004 Ex. PW-1/1 was executed by Defendant Nos. 1 & 2 in favour of the plaintiff for a total consideration of Rs. 3,22,50,000/-. Consequently, the plaintiff paid the defendants two cheques bearing Nos. 299039 and 299040 of Rs. 5,00,000/- each along with Rs. 1,00,000/- paid to them in equal shares on 29.02.2004. Also, it is as admitted fact that there was a valid ATS executed between the parties.

190. Therefore, the first requirement is satisfied.

191. The second aspect for consideration is the “readiness and willingness” of the plaintiff to pay the balance sale consideration.

192. The Legislature has chosen to use two phrases, namely “readiness” and “willingness”. While the “willingness” indicates his state of mind which is determined through the conduct of the plaintiff, the “readiness” indicates the financial capacity of the plaintiff which is required to be proved through evidence that he had the financial capacity to perform the Agreement, as has been explained in the case of K.V. Balan (Dead) Through Legal Representatives v. Bhavyanath, 2015 SCC OnLine Ker 29875.

193. 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. Thus, to insist for mechanical production of the exact words of a statute is to insist for the form rather than essence. Therefore, the 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 Digitally 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.”

194. The evidence required to be pleaded and proved by the plaintiff to establish his “readiness” in the context of Section 16 was explained in Raghunath Rai v. Jageshwar Prashad Sharma, (1999) 50 DRJ 751. The intending purchaser need not produce the money or vouch a concluded scheme for financing the transaction; it is sufficient for the purchaser to establish that he has the capacity to pay. However, the financial capacity has to be 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.

195. It is the capacity of a person which is required to be established to show that he had the readiness for payment under the Agreement to Sell. In order to prove his readiness, the plaintiff in his testimony as PW-1 has deposed that he had obtained the sanction for Loan of Rs. 2,00,00,000/- at an interest of 7.2% per annum from HDFC Bank, Capital Court, Munirka. The sanction letter is Ex. PW1/15.

196. This is corroborated by PW10/Annindya Banerjee, working as Assistant Manager (Legal) HDFC Ltd., Munirka, Delhi who has produced the true copy of the Letter dated 11.03.2004 Ex.PW10/2 sanctioning the Loan of Rs. 2,00,00,000/- in favour of the plaintiff and his wife, Smt. Neeraj Ghei. The Certificate issued by the HDFC Bank is Ex.PW10/3 reflecting that the Loan of Rs. 2,00,00,000/- has been sanctioned in the name of the Digitally plaintiff and his wife. PW10/Annindya Banerjee has explained in his cross-examination that this Loan was sanctioned against the property but he also clarified that the Letter dated 11.03.2004, Ex.PW10/2 was only a Principal Offer Letter and did not pertain to any specific property for which a separate property is issued. He admitted that only the loan amount had been sanctioned, though not disbursed. He has further admitted that no subsequent letter after the Sanction Letter dated 11.03.2004 had been issued by the Bank in favour of the plaintiff. He also deposed that initial payment of Rs. 5,000/- made by the party normally gets adjusted in the Loan which eventually gets disbursed.

197. The perusal of the Sanction Letter dated 11.03.2004 shows that in-principle loan of Rs. 2,00,00,000/- was sanctioned on 11.03.2004. Clause 5 of the Sanction Letter stated that the loan would be disbursed, subject to the legal and technical clearance of the property financed. It further details the mode and the manner in which the loan disbursed shall be payable in instalments. It also stated that the amount of Rs. 5,000/- be deposited in the name of Housing Development and Finance Corporation towards the processing and the administrative fee and in case, the amount is already paid, the same may be ignored.

198. It had been argued on behalf of the defendants that the Sanction Letter dated 11.03.2004 Ex.PW1/15 produced by the plaintiff and the Sanction Letter dated 11.03.2004, Ex.PW10/2 are different in so much as they give different rate of interest. From a perusal of these two Letters PW1/15 and PW10/2, what emerges is that PW1/15 is a complete document while PW10/2 is not a complete document. The rate of interest in Ex.PW1/15 is specified as 7.25% while in the Letter Ex.PW10/2 produced by the Bank Digitally Official, the rate of Interest is reflected as 7.75% p.a.

199. Pertinently, in both these letters, it is indicated that the interest rate shall be as would be prevailing at the time of disbursement of Loan. Thus, there is no apparent contradiction or manipulation in the letter of Sanction. Moreover, it needs to be observed that this was only as in-principle Sanction of loan amount, reflecting the capacity of the plaintiff to pay and the actual interest rate would be specified at the time of disbursement.

200. Further, there is no denying that plaintiff did approach the Bank to ascertain if the loan would be granted to him, which stands established not only from his testimony but also from the independent testimony of PW-10, the Bank Official.

201. It is pertinent to note that this Sanction Letter Ex. PW1/15 is dated 11.03.2004, wherein it was mentioned in the Sanction letter itself that “in case you have not selected a dwelling unit, we will be pleased to provide you assistance in identifying a suitable one on a best efforts basis”. The plaintiff entered into the Agreement to Sell dated 21.03.2004. It makes it quite evident that since the plaintiff intended to buy the property in near future, he had made an effort to organise and arrange the funds. The plaintiff had approached the HDFC Bank to ensure that if he could get sufficient liquidated amount in his hand to be able to proceed further for identifying the property for purchase. It is evident that because till then Agreement to Sell dated 21.03.2004 had not been entered into with the defendant No. 1, there was no question of the details of the suit property being mentioned in the Sanction Letter or documents of ATS/ property being supplied to the Bank as that stage would have arrived at the time of disbursement of Loan.

202. It is pertinent to observe that the sanction was in-principle thereby Digitally implying that the Bank was ready to make the said amount available to the plaintiff. While the defendant Nos. 1 and 2 have challenged the financial capacity but the Sanction Letter was merely to establish that the plaintiff had sufficient financial credibility to take loan of Rs. 2,00,00,000/- from the HDFC Bank.

203. Similar facts as in hand were considered in the case of Bank of India Ltd. vs. Jamsetji A.H. Chinoy and M/s. Chinoy and Co., AIR 1950 PC 90 wherein the plaintiff therein had arrangement with the banker to enable him to draw the amount needed to be paid to the seller to prove himself right and willing.It was held that a purchaser need not necessarily produce the money or to vouch a concluded scheme for financing the transaction; the availability of the money was sufficient to establish his readiness.

204. The plaintiff has further explained that he had two properties i.e., Property bearing No. R-68, Greater Kailash-I, Delhi and the other property at Gulmohar Park, Delhi from the sale of which he intended to raise the balance amount. The Property bearing No. R-68, Greater Kailash-I, Delhi was sold by the plaintiff for a sum of Rs. 30,60,000/- which is not under challenge and the said amount of Rs. 30,60,000/- was thus, readily available with the plaintiff. The Sale Deed dated 20.04.2004 in respect of Property bearing No. R-68, Greater Kailash-I, Delhi is Ex.PW1/15.

205. In order to further prove his financial capacity, the plaintiff has proved his Bank Certificate dated 21.04.2004 of Standard Charted Bank, Ex.PW1/19, wherein the plaintiff had a sum of Rs. 47,99,305.13/- as on 21.04.2004.

206. The plaintiff in order to further substantiate that he had sufficient funds to execute the Sale Deed, has examined PW11/Bharat Bhatter, Digitally Assistant Vice President, Deutsche Bank, New Delhi Branch, who had produced the Statement of Account Number 1503663-30-0 of Smt. Neeraj Ghei and the plaintiff as on 24.04.2004, Ex.PW11/2 reflecting an amount of Rs. 10,032,594.06/- in their joint bank account. PW11/Bharat Bhatter also deposed that additionally, the Mutual Fund Statement Ex.PW11/3 reflected Mutual Fund investments of Smt. Neeraj Ghei and the plaintiff as on 23.04.2004, according to which the worth of the Mutual Fund investments was of Rs. 20,049,133.11/-.

207. The document and the Certificate/statement produced by PW11/Bharat Bhatter reflects that as on April, 2004, the plaintiff had the amount of approximately Rs. 3,00,00,000/- in his account and his wife’s account which was sufficient for him to honour his obligation under the Agreement to Sell dated 21.03.2004.

208. PW11/Bharat Bhatter in his cross-examination has further clarified that upto 30.04.2004, the balance in the account of plaintiff’s wife was Rs. 11,567,529.43/-. He also explained that the purchase value of the Mutual Funds as on 24.04.2004 was Rs. 6,14,57,461/-, while its market value was Rs. 6,36,10,623/-.

209. It was observed by the Apex Court in Sukhbir Singh (supra) that the plaintiff was a businessman of some means earning annual profits which were substantially enough to enable him to pay the balance sale consideration either on his own or through financial assistance of relatives.

210. The plaintiff established his financial assets to honour his commitment under the ATS, establishing his readiness to perform the Agreement. Digitally

211. Even otherwise, law mandates the financial capacity to pay the sale consideration; he is not required to always carry the money with him from the date of ATS till the date of Decree.

212. The other facet of “readiness” is that 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. It was observed 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 necessarily 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. The court may infer from the facts and circumstances whether the plaintiff was ready and willing to perform his part of the contract.

213. Similar observations have been made by the Apex Court in the case of H.P. Pyarejan v. Dasappa (Dead) By L.Rs., (2006) 2 SCC 496, wherein it was 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 Digitally willingness on the part of the plaintiff.

214. The evidence on record thus, proves the readiness of the plaintiff to honour his financial commitment in 2004 at the time of execution of the ATS and filing of the Suit on 24.04.2004.

215. In order to further establish that he continues to have financial capacity even as on date, the plaintiff along with the Written Submissions had also filed his latest saving Bank Account Statement as on 18.12.2023 showing a balance of Rs. 8,89,24.507/- in his bank account.

216. The plaintiff has been able to establish his financial capacity and thus, his readiness to perform his part of the Agreement to Sell dated 21.03.2004 as in 2004 as well as on the date of institution of the Suit. The plaintiff has also been able to demonstrate his financial capacity even as on date.

217. The plaintiff has thus, been able to prove his readiness to perform his part of the Agreement to Sell dated 21.03.2004. Willingness:

218. The other aspect is to ascertain the Willingness, the extent and the manner in which the Agreement has been performed and whether it was in conformity with the terms of contract and the conduct of the plaintiff needs to be further considered.

219. The concept of “Willingness” has been examined by the Apex Court in the case of Aniglase Yohannan v. Ramlatha, (2005) 7 SCC 534, where it was observed that the court would ascertain willingness so as to determine whether the plaintiff is entitled to grant of 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, it should not be denied. The Digitally averments in the plaint as a whole must clearly indicate the readiness and the willingness.

220. The timelines to be adhered by the parties and their intention to conclude the Agreement in a time bound manner, are reflected 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.

221. The willingness of the plaintiff can be well inferred from the fact that at no point of time, he requested the defendant Nos. 1 and 2 for extension of time. The termination of the Agreement to Sell dated 21.03.2004 as has been discussed above, had taken place on 20.04.2004 and the Sale Deed executed on the very next day i.e., 21.04.2004. The Suit of the plaintiff has been filed immediately thereafter on 24.04.2004 showing his willingness to perform his part of the Agreement to Sell dated 21.03.2004.

222. The defendants have not been able to produce even an iota of evidence to establish that the plaintiff at any point of time did not come forth to perform his part of the obligation under the Agreement to Sell dated

223. The readiness and willingness and the capacity of the plaintiff to honour his financial commitments stand duly established from the evidence as brought on record. Equity:

224. The second aspect of entitlement for Specific Performance, for consideration is: whether it is equitable in the given circumstances to grant the relief of specific performance to the plaintiff and direct the execution Digitally of the Sale Deed.

225. It has been vehemently argued on behalf of the defendant Nos. 1 and 2 that the plaintiff had merely paid Rs. 21,00,000/- under the Agreement to Sell as against the agreed sale consideration of Rs. 3,50,00,000/-. Merely by paying such meagre amount which was about 6% of the total sale consideration, the plaintiff cannot claim any equitable right to hold the property or prevent the defendant Nos. 1 and 2 from dealing with the suit property.

226. The defendant Nos. 1 and 2 has placed reliance on M/s HOTZ Industries Pvt. Ltd. vs. Dr. Ravi Singh (Since Deceased) Through LRs, decided by a Co-ordinate Bench of this Court vide CS(OS) 1261/1995, U.N. Krishnamurthy vs. A.M. Krishnamurthy, 2022 SCC OnLine SC 840, Jinesh Kumar Jain vs. Iris Paintal and Ors., MANU/DE/3387/2012 and Ritu Saxena (supra), wherein it has been held that whether the amount paid is less than 10%, the equity does not lie in favour of the proposed purchaser to seek specific performance of the contract. However, distinguishing factor in the present case is the manner in which the Sale Deed has been executed by the defendant Nos. 1 and 2 in favour of the defendant No. 3.

227. As has already been discussed in detail, the same has been executed in favour of the defendant No. 3 in a clandestine manner and that too has been done overnight, in a highly rushed manner. The Notice of termination of the Agreement to Sell dated 21.03.2004 had been prepared but not served upon the plaintiff before the execution of the Sale Deed dated 21.04.2004. Furthermore, without even giving any Notice, all the negotiations and the documents had been prepared for execution of the Sale Deed in favour of the defendant No. 3, without there being any Notice of termination being served Digitally upon the plaintiff.

228. In these circumstances, neither can the act of the defendant No.1& 2 nor that of the defendant No.3 be said to be of a bona fide purchaser, be termed as a bona fide or that the defendant No. 3 had no Notice of the earlier Agreement to Sell dated 21.03.2004.

229. Considering the manner in which the defendant No. 3 has purchased the suit property clearly reflects that the transaction was not bona fide and the equity cannot favour the defendant No. 3. There being no equity in favour of the defendants and there being no default on the part of the plaintiff who had always been ready and willing to perform his part of the Agreement, his right cannot be defeated by the acts of the defendants. Even though the plaintiff had paid barely 6% of the agreed amount, but in the light of aforesaid discussion, the equity lies in favour of the plaintiff to entitle him the Specific performance of the Agreement to Sell. Exponential Price Rise:

230. The next question is would the plaintiff be entitled to execution of the Sale Deed at the same consideration amount as was originally agreed between the parties. Ld. Counsel on behalf of the Defendants had vociferously agitated that long passage of time leading to exponential increase in the value of suit property, makes it highly inequitable for the defendants to be granted Specific Performance of ATS. Furthermore, the plaintiff had merely paid 6% approximately of the entire sale consideration and with the steep rise in the price with the passage of time, he cannot claim any equitable right for execution of Sale Deed in his favour especially when the Defendant No.3 had paid the entire Sale consideration in 2004 at the time of purchase of the suit property. Digitally

231. The question, which now arises is that when there has been exponential increase in the price of the suit property in the last about 20 years, would it be equitable to ask the defendant No. 3 to execute the Sale Deed in favour of the plaintiff for the agreed sale consideration of Rs. 3,50,00,000/-?

232. On the issue of whether time is of the essence for performance of Agreement to Sell, the Constitution Bench of the Supreme Court in Chand Rani v. Kamal Rani, (1993) 1 SCC 519 observed that “… it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time from the following conditions: (1) the express terms of the contract; (2) the nature of the property; and (3) the surrounding circumstances, for example, the object of making the contract.” In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the Agreement and determine whether its discretion to grant specific performance should be exercised.

233. However, while these observations were made in 1993, the Courts have not been oblivious to the social realities. While the earlier times did not witness drastic escalation in real estate with passage of time, the present times with the opening of economy and globalization, has seen sudden escalation in the rates of the properties. This aspect was noticed by the Apex Court in the case of K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1 wherein it was observed that the Court cannot be oblivious to the reality “as the reality is constant and continuous rise in the values of urban properties fuelled by large scale migration of people from rural areas to urban centres Digitally and by inflation.”

234. The defendant No. 3 has placed reliance on the decision in Saradamamani Kandappan (supra), wherein it has been observed that the time had not been considered as a essence of contract relating to immovable properties. But such concept had emerged in the year when market value of the immovable properties was stable and did not undergo marked change even for a few years. As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed. The assumption was that 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. However, there has now been a drastic change over the last quarter of 20th century when there has been a galloping inflation in the prices of immovable properties which have increased steeply by leaps and bounds. The market value of the properties is no longer stable or steady. It was further observed that it was no exaggeration to say that the properties in cities, worth a lakh or so in or about 1975 to 1980, it crossed crore or even more. The reality arising out of this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the steps have not been taken by the purchaser to complete the sale in the agreed time. The purchaser can no longer claim that time is not of essence to cover up his delay, laches, breaches and non-readiness. It was further observed that the vendor who took the earnest money, say about 10%, cannot be compelled to perform the Digitally specific performance as it would be a cruel joke on him and would result in injustice.

235. The judgment relied upon by the defendant No. 3, however, is absolutely not applicable on the facts in hand for the reason that though earnest money paid was about 6%, but here is the case where there is no breach of any kind on the part of the plaintiff. It is not the plaintiff who has failed to perform his part of the Agreement to Sell nor his conduct smitten with delay and laches.

236. The plaintiff has relied upon on the decision in K. Prakash (supra), wherein it has been observed that subsequent rise in the price shall not be treated as a hardship entailing refusal of Decree for Specific Performance. Rise in price is a normal change of circumstances and, therefore, the Decree for Specific Performance cannot be denied. However, the court may take notice of the fact that there has been an increase in the price of the property and considering the other facts and circumstances while granting Decree for Specific Performance can impose such condition which may to some extent compensate the defendant-owner of the property.

237. In the case of Nirmala Anand vs. Advent Corporation (P) Ltd. and Others, (2002) 8 SCC 146, the Apex Court observed that the Court in its discretion can impose any reasonable condition, including the payment of an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have the entire benefit of phenomenal increase of the value of the property during the pendency of the Digitally litigation. While balancing the equities, it is one of the considerations to be kept in view by the person who is the defaulting party. It must also be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance.

238. Likewise, in the case of Pratap Lakshman Muchandi (supra), the Apex Court, while allowing the specific performance of an Agreement to Sell executed way back in 1982, took into account the real estate value which had shot up and inequity considering that the litigation was prolonged for almost 25 years, held that an additional amount be paid to the defendant who was directed to execute the Sale deed.

239. Similar observations were made by the Apex Court in the case of Sargunam (supra), wherein the reference was made to Section 20(2)(b) of the Specific Relief Act, 1963 which stipulates that mere fact that the contract is onerous to the defendant or improvident in its nature, would not constitute an unfair advantage within the meaning of Section 20(2). It was thus, observed that where the defendant was well aware of the Agreement to Sell, he could still foresee ensuing hardship if the specific performance of ATS was allowed.

240. Likewise, the Apex Court in the case of Nirmala Anand (supra) and Zarina Siddiqui (supra), observed that the contract of the parties must be considered to ascertain if the plaintiff has approached the Court with clean hands and the defendant has conducted himself in such a manner that the discretion of the Court be not exercised in his favour. It was further observed that exercise of equitable jurisdiction under the Specific Relief Act, 1963 would not be denied merely because of escalation of price of the Digitally property due to efflux of time, there being no valid ground for refusal to exercise discretion to grant a Decree for Specific Performance of an Agreement to Sell. But at the same time while directing the specific performance of the Agreement to Sell, the Court may direct the plaintiff to pay an additional amount.

241. In view of the aforementioned judgments and also considering that the conduct of the defendants which has not been honest and smells of mala fide in defeating the bona fide claim of the plaintiff to the execution of the Sale Deed.

242. It is therefore, concluded that the plaintiff was always ready and willing to perform his part of the ATS and equity also lies in his favour to seek execution of Sale Deed on the ATS. As has been held in the case of Lala Durga Prasad (supra) and also in Thomson Press (India) Ltd. (supra), the Sale Deed in favour of the defendant No. 3 is not per se non-est, illegal or bad in law, but the right which the defendant No. 3 has derived, is subservient to that of the plaintiff. Therefore, instead of directing the Sale Deed in favour of subsequent purchaser as null and void, which it is not so interse the defendants, the subsequent purchaser was directed to join the defendants who had executed the Agreement to Sell in favour of the plaintiff. Similar methodology was followed by Calcutta High Court in the case of Khafiladdin v Samiraddin AIR1931 Cal 67 and also in Potter v Sanders 67ER 1057. Similar recourse is stated by Fry in Specific Performance, 6th Edn., p 90.

243. Since the plaintiff has been found to be entitled to execution of the Sale Deed, it is hereby directed that the defendant No. 3 along with Defendant No.1&2 shall execute the Sale Deed in favour of the plaintiff. Digitally

244. While it may be asserted by the defendant No. 3 that it is inequitable if the plaintiff by paying mere amount of Rs. 21,00,000/-, can stake a claim in the suit property, the market value of which is manifold higher, it cannot be overlooked that the defendant No. 3 had chosen to take his chance by entering this deal of Sale Deed way back in 2004. Not only this, the defendant No. 3 has enjoyed the suit property since 2004 till date. On the other hand, the plaintiff who had paid initial amount of Rs. 21,00,000/-, had throughout been prompt in trying to prevent breach of his right to seek a Sale Deed and had promptly filed the present Suit barely within two or three days of the execution of the Sale Deed. The plaintiff has been diligently pursuing his Suit and merely because it has taken 20 years to adjudicate the respective rights of the parties, it cannot be taken as a ground to deny the relief to the plaintiff merely on technical grounds.

245. While it has been asserted by the defendant No. 3 that it is inequitable if the plaintiff by paying mere amount of Rs. 21,00,000/-, can stake a claim in the suit property, the market value of which is manifold higher as on date, but it cannot be overlooked that the defendant No. 3 had chosen to take his chance by entering this deal of Sale Deed way back in 2004. Not only this, the defendant No. 3 has enjoyed the suit property since 2004 till date. On the other hand, the plaintiff who had paid initial amount of Rs. 21,00,000/-, had throughout been prompt in trying to prevent breach of his right to seek a Sale Deed and had promptly filed the present Suit barely within two or three days of the execution of the Sale Deed. The plaintiff has been diligently pursuing his Suit and merely because it has taken 20 years to adjudicate the respective rights of the parties, delay in adjudication cannot be taken as a ground to deny the relief to the plaintiff merely on the technical grounds. Digitally

246. To balance the equity between the parties, considering the exponential increase in the price of the suit property and also that the plaintiff aside from paying the initial amount of Rs.21,00,000, had enjoyed the balance amount which remained unpaid, it is hereby directed that the plaintiff shall pay the sale consideration at the rate of prevailing circle rate where the suit property is located.

247. Therefore, Issue No. 3 is decided in favour of the plaintiff. RELIEF: -

248. It is hereby held that the equity that the plaintiff is entitled to Specific Performance of the ATS dated 21.03.2004 and execution of the Sale Deed in his favour.

249. It is hereby directed that the plaintiff shall pay the sale consideration at the rate of prevailing circle rate where the suit property is located. The plaintiff shall tender the said amount to the defendant No. 3 in six months, on which the defendant No. 3 shall join the Defendant No.1&2 to execute the Sale Deed in favour of the plaintiff.

250. Accordingly, the present Suit is decreed in the aforesaid terms. Parties to bear their own costs.

251. The Decree Sheet be prepared accordingly.

JUDGE AUGUST 30, 2024 S.Sharma/RS Digitally