Kishore Sindhu v. Sh. Hemant Dhawan & Anr.

Delhi High Court · 31 Aug 2022 · 2022:DHC:3590

Anup Jairam Bhambhani

CS(OS) 611/2019

2022:DHC:3590

civil appeal_allowed Significant

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The Delhi High Court vacated an ex-parte interim injunction in a suit for specific performance of an alleged oral agreement to sell immovable property due to lack of prima facie case, absence of essential contract terms, and limitation bar.

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CS(OS) 611/2019
HIGH COURT OF DELHI
Date of Decision: 31st August, 2022

CS(OS) 611/2019
KISHORE SINDHU ..... Plaintiff
Through: Mr. Sanjeev Saraswat with Mr. Rajesh Kumar, Advocates.

VERSUS

SH. HEMANT DHAWAN & ANR. ..... Defendants
Through: Mr. J.P. Sengh, Senior Advocate, Ms. Zubeda Begum, Senior Advocate with
Ms. Venessa Singh, Mr. R.L. Sinha with Ms. Ishita Mohanty and Mr. Gurkhi Singh, Advocates.

CORAM:

HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI

JUDGMENT

(Judgment released on 12.09.2022)

ANUP JAIRAM BHAMBHANI J. I.A.2410/2022
By way of this application filed under Order XXXIX Rule 4 of the Code of Civil Procedure 1908 („CPC‟) the defendants seek vacation of interim order dated 29.11.2021 made in I.A. No.
16529/2019 under Order XXXIX Rules 1 and 2 CPC, whereby at the ex-parte, ad-interim stage an order of status quo was granted on the title and possession of the First and Second Floors of property bearing
No. D-371 Anand Vihar, Delhi („Anand Vihar property‟/„subject property‟) till the next date of hearing.

2. Notice on this application was issued on 29.11.2021; whereupon reply dated 21.02.2022 has been filed by the plaintiff. 2022:DHC:3590

3. Mr. J.P. Sengh, learned senior counsel appearing on behalf of the defendants submits, that for one, the plaintiff has only alleged an oral agreement to sell in respect of the subject property; which agreement is also vague, bereft of any details of the date of proposal or acceptance, or even whether such alleged oral agreement was with defendant No. 1 or with defendant No. 2. Mr. Sengh further submits that the plaintiff also does not disclose any other specifics of the alleged oral agreement, inasmuch as there is no mention of any stages or schedule or time-frame or mode for payment of earnest money or the balance sale consideration, nor any other essential particulars that must attend an agreement to sell immovable property. It is further argued that no payment has been made or received by either of the defendants against the alleged agreement to sell the subject property.

4. It is also pointed-out that in a criminal complaint made by the plaintiff to the Economic Offences Wing of the Delhi Police („EOW‟) in 2016, the plaintiff gave an inconsistent version of payments alleged to have been made against purchase of the subject property and also did not produce any material to substantiate the transaction, by reason of which that complaint was closed. However, the closure of that complaint has intentionally not been mentioned in the plaint.

5. It is also the submission on behalf of the defendants that since the said criminal complaint was filed way back in 2016 and the alleged oral agreement refers back to sometime in 2013, the claim for specific performance would be time-barred; and in any case, passing of an exparte, ad-interim order was not made-out.

6. Most importantly, it is submitted that the subject property is owned only by defendant No. 2 (wife); and even on his own allegations, the plaintiff has transacted only with defendant No. 1 (husband), who (latter) had no authority or right over the subject property in any way. Attention is drawn to the fact that there is no allegation that any sum of money was paid by the plaintiff to defendant No. 2, in consideration of the alleged oral agreement to sell.

7. In support of the contentions, the defendants have placed on record a copy of communication dated 03.03.2017, whereby the EOW closed the criminal complaint, observing as under: “Further regarding the property of Anand Vihar, fact of offer of sale by the alleged Hemant Dhawan could not be proved as no document to this effect is produced by you. Thus the allegation of cheating leveled in the complaint could not be substantiated. Accordingly the complaint has been filed.” (emphasis supplied)

8. Furthermore, the defendants have also filed on record a copy of an email dated 14.08.2015 sent by the plaintiff to defendant No. 1 enclosing therewith a tabulated summary of payments made by the plaintiff to defendant No. 1. It is submitted that this tabulated summary, drawn-up by the plaintiff himself, names various properties in Noida against which payments are stated to have been made by the plaintiff from time-to-time; however, in this summary there is no reference whatsoever to the Anand Vihar property; and that accordingly, even on his own reckoning, the plaintiff has not made any payment against any transaction relating to the subject property.

9. It is also submitted that though the suit may be maintainable at the instance of the plaintiff acting through his power of attorney holder, at least at the stage of granting an interim order on an application under Order XXXIX Rules 1 and 2 CPC, based solely on an alleged oral agreement, the requisite threshold of satisfaction has not been fulfilled, since a power of attorney holder could not possibly have had any personal knowledge of the alleged oral transaction; and that therefore, the interim order granted on 29.11.2021 in relation to the Anand Vihar property deserves to be vacated.

10. In response, Mr. Sanjeev Saraswat, learned counsel appearing for the plaintiff has drawn attention inter-alia to paras 6, 8, 9(j) and 9(k) of the plaint, to contend that on the basis of representations and assurances extended by defendants Nos. 1 and 2, the plaintiff had agreed to purchase from them 05 different properties, including the subject property; and that payments as detailed in the plaint were made towards sale consideration for such properties. Mr. Saraswat submits that further payments as averred in para 9(k) of the plaint were also made against the subject property as late as in December

2013.

11. It is noticed however that, firstly, para 9(j) of the plaint recites that the alleged transaction in relation to the Anand Vihar property happened in June-July 2013; and besides, admittedly payment for such transaction was made by the plaintiff only to defendant No. 1, statedly “upon his insistence”; but no payment whatsoever was made to defendant No. 2. Although in para 9(k) of the plaint it is alleged that defendant No. 2 ratified the transaction and payments made to defendant No. 1, admittedly there is not a shred of a document in support of such allegations, which are purely the ipse-dixit of the plaintiff.

12. It is also important to note that the criminal complaint to the EOW, alleging that the defendants had refused to perform their part of the agreement to sell in respect of the subject property, was made on 07.04.2016; but the suit came to be filed only on 23.11.2019. Evidently therefore, the plaintiff had notice of refusal of performance by the defendants at least by April 2016, if not earlier; but the suit was filed beyond the 03-year limitation period provided in Article 54 of the Schedule to the Limitation Act 1963 for filing a suit for specific performance of a contract for sale of immovable property. On a prima-facie view of the matter therefore, the suit appears to be timebarred.

13. At this stage, it would be appropriate to refer to the dictum of the Hon‟ble Supreme Court as regards the enforceability of an oral agreement to sell immovable property, whereby in K. Nanjappa vs. R.A. Hameed[1] the Hon‟ble Supreme Court has said:

“20. Before we express our view on the findings recorded by both the trial court and the High Court while passing a decree for specific performance, we would like to discuss first the settled proposition of law in this regard. ***** “21. There is no dispute that even a decree for specific performance can be granted on the basis of oral contract. Lord Du Parcq in a case [Shankarlal Narayandas Mundade v. New Mofussil Co. Ltd.,

1946 SCC OnLine] observed, while deciding a suit for specific performance, that an oral contract is valid, binding and enforceable. A decree for specific performance could be passed on the basis of oral agreement. This view of a Privy Council was followed by this Court in Kollipara Sriramulu v. T. Aswatha Narayana [AIR 1968 SC 1028] and held that an oral agreement with a reference to a future formal contract will not prevent a binding bargain between the parties. “22. However, in a case where the plaintiff comes forward to seek a decree for specific performance of contract of sale of immovable property on the basis of an oral agreement or a written contract, heavy burden lies on the plaintiff to prove that there was consensus ad idem between the parties for the concluded agreement for sale of immovable property. Whether there was such a concluded contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were concluded between the parties.

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14. Furthermore, a brief reference to the cardinal principles for grant of ex-parte, ad-interim orders, as reiterated by the Hon‟ble Supreme Court in Ambalal Sarabhai Enterprise Ltd. v. KS Infraspace LLP Ltd 2 would also be beneficial at this point:

“15. Chapter VII, Section 36 of the Specific Relief Act, 1963 (hereinafter referred to as “the Act”) provides for grant of preventive relief. Section 37 provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. A plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong prima facie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for

purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily. “16. The cardinal principles for grant of temporary injunction were considered in Dalpat Kumar v. Prahlad Singh [(1992) 1 SCC 719] observing as follows: “5. … Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in “irreparable injury” to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely, one that cannot be adequately compensated by way of damages. The third condition also is that “the balance of convenience” must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject-matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit.”

15. Interim orders must not be granted lightly; and a decision to continue an interim order must be taken with equal circumspection. An adinterim order, especially one granted ex-parte, must be re-considered at the earliest, giving due weightage to the contentions of the opposing party. Interim orders must not continue to operate out of sheer inertia.

16. Upon a conspectus of the foregoing, it is seen that the plaintiff‟s case proceeds purely on his ipse-dixit as to the existence of an oral agreement to sell. Furthermore, the plaintiff has been unable to show any co-relation between the monies transferred to defendant No. 1 and the alleged oral agreement to sell the subject property. The plaintiff has not even alleged, to borrow the words of the Hon‟ble Supreme Court, the “vital and fundamental terms”, that usually attend a transaction for sale of immovable property: such as the total sale consideration; the stages or schedule for payment of sale consideration, including earnest money; the mode or manner of such payment; and the time-frame for execution of documents for transfer of title and suchlike other aspects. Admittedly, even the amounts that the plaintiff alleges were paid towards sale consideration for the Anand Vihar property, were admittedly not paid to the credit of defendant No. 2 but only to defendant No. 1, who (latter) is not even the owner of the property. To add to this, the allegation of an oral agreement to sell has been made, not by the plaintiff himself but through a power of attorney holder, who has signed and verified the plaint and has also filed an affidavit in support thereof. To be sure, the plaintiff has not even exercised the effort of filing an affidavit in support of the plaint, which could have been drawn and filed even if he is presently residing abroad.

17. Without expressing a final opinion on this aspect, as discussed above, it also appears on a prima facie view that the claim for specific performance of the alleged oral agreement to sell may even be timebarred, since it has been filed beyond the 03-year limitation provided in law.

18. In view of the foregoing, this court is of the opinion that order dated 29.11.2021, insofar as it relates to the First and Second Floor of property bearing No. D-37 Anand Vihar, East Delhi deserves to be vacated.

19. It is ordered accordingly.

20. Application stands disposed of.

21. It is clarified that nothing in this order is a reflection on the merits of the matter.

22. Replication is yet to be filed.

23. List before the learned Joint Registrar for completion of pleadings and for other proceedings on 26th September 2022.

24. List before court thereafter.

ANUP JAIRAM BHAMBHANI, J AUGUST 31, 2022 ds

Kishore Sindhu v. Sh. Hemant Dhawan & Anr.

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