Shri Anil Kumar Gupta v. Shri Ajit Kumar

1. By the present suit, plaintiff seeks a decree for recovery of a sum of ₹3,55,65,000/- along with pendente-lite and future interest @24% per annum till realisation of the decreetal amount besides a decree of permanent injunction against the defendant from disposing of, mortgaging or parting with the possession of the property No.C-1/7, Rana Partap Bagh, Delhi- 110007 (in short ‘suit property’) or creating any third party interest thereon.

2. Case of the plaintiff is that the plaintiff entered into an Agreement to Sell dated 4th June, 2014 to purchase the suit property with the defendant on the representation of the defendant that the property was free from any charge, encumbrances or lien and the title was clear. The sale price agreed for the suit property was fixed at ₹4.85 crores. The suit property was a 2019:DHC:6376 single storey building with two tenants and the last date fixed for the payment was 4th September, 2014. A bayana agreement dated 7th June, 2014 was signed by the plaintiff and defendant and on execution of the said bayana agreement the defendant received a total sum of ₹85 lakhs including the initial payment of ₹20 lakhs received on 4th June, 2014, ₹20 lakhs on 5th June, 2014 in cash and two cheques worth ₹45 lakhs on 7th June, 2014. Defendant also issued the receipt with regard to the total sum of ₹85 lakhs and the balance sale consideration left was ₹4 crores. It is claimed that the defendant extended the time for completion of the sale agreement which was revised to 6th October, 2014 mutually between the parties.

3. Plaintiff had explained the defendant that he has to arrange funds for the development of the property and thus he would seek help of a financer. The project was to be financed by one Mr.Sanjay Gupta, son of Shri Mool Chand Gupta, resident of C-7, Rana Partap Bagh, Delhi-110007. On the assurance that the property was free from all encumbrances the financer contributed in the project and paid another sum of ₹60 lakhs on 7th October, 2014 to the defendant in which regard the defendant issued another receipt. For payment of ₹60 lakhs, ₹25 lakhs were transferred through RTGS and for ₹35 lakhs cheque bearing No.439627 dated 7th October, 2014 was handed over to the defendant which was duly encahsed. Thereafter, when the original title deeds were sought, as the plaintiff had to avail the loan, the defendant failed to give the original title deeds. On 10th March, 2015 the defendant served a legal notice bearing caption ‘final legal notice for cancellation of the transaction and forfeiture of the earnest money’. It is at this stage it was revealed that the suit property was mortgaged with M/s Diwan Housing Finance Corporation which was never disclosed at the time of Agreement to Sell. Pursuant to the reply given by the counsel of the plaintiff, the defendant contacted the plaintiff with a broker and requested for payment of a sum of ₹50 lakhs with the assurance that he would pay the said amount to M/s Diwan Housing Finance Corporation. The plaintiff paid a further sum of ₹50 lakhs in cash for which also a receipt was executed by the defendant. Despite having paid a sum of ₹1.95 crores, the defendant neither handed over the original title deeds nor executed the sale deed nor took the balance sale consideration which the plaintiff claims was willing to pay and perform as part of the contract.

4. Along with the plaint, the plaintiff has filed original documents in the form of receipt-cum-agreement acknowledging payment of ₹20 lakhs which parties claim is dated 4th June, 2014, bayana agreement dated 7th June, 2014 duly signed by the plaintiff and the defendant acknowledging receipt of a sum of ₹85 lakhs accompanied by a receipt dated 7th June, 2014 with regard to receipt of a sum of ₹85 lakhs, photocopies of the cheques for a sum of ₹25 lakhs and 20 lakhs, original receipt dated 7th October, 2014 for a sum of ₹60 lakhs acknowledging the payment of ₹60 lakhs, a receipt dated 3rd April, 2015 acknowledging receipt of a sum of ₹15 lakhs against part payment and the copy of the legal notice and the reply thereof.

5. In the affidavit of admission/denial by the defendant the receipts, the bayana agreement, the receipts for a sum of ₹85 lakhs, ₹60 lakhs and ₹50 lakhs have been duly admitted. Thus it is the case of both the sides that a sum of ₹1.95 crores has been received from the plaintiff.

6. Claim of defendant is that after executing the Agreement to Sell and making part payment the plaintiff failed to perform his part of the agreement and did not make the balance payment thereby warranting the defendant to terminate the contract and that it was orally informed to the plaintiff that the property was mortgaged. The documents having been admitted a perusal of the agreement to sell between the parties reveals that the defendant had clearly assured as per the terms of the agreement that the suit property was free from all encumbrances like mortgage, burden, transfer, gift, charge, lien, court case, orders, encroachments, cancellation orders, acquisitions orders, notifications etc. and in case there was any defect in the title of the seller, the seller shall indemnify the purchaser to the extent of loss suffered by the purchaser.

7. Today the case of the defendant is that it was orally informed to the plaintiff about the property being mortgaged and in any case the same was duly intimated by the notice dated 18th February, 2015 that the property was mortgaged with M/s Diwan Housing Finance Corporation and that the balance payment was to be made to the said Corporation and thereafter also the plaintiff paid a sum of ₹50 lakhs on 3rd April, 2015 and the breach of the contract was on the part of the plaintiff as the plaintiff failed to make the further payment.

8. At this stage, since this Court is deciding the two applications under Order XII Rule 6 CPC, suffice it is to note that even as per the case of the defendant, the Agreement to Sell notes that in case of breach of contract the defendant would forfeit the sum of ₹85 lakhs paid as earnest money.

9. Admittedly, till 3rd April, 2015 the defendant had received ₹1.95 crores, that is, ₹1.10 crores beyond the sum of ₹85 lakhs and even based on the case of the defendant, the defendant had no right to retain the further amount of ₹1.10 crores paid over and above ₹85 lakhs by the plaintiff.

10. It is thus a clear case of undue enrichment where the defendant not only kept the property but also the excess amount. Since at this stage, this Court is only passing a preliminary decree and not returning a finding as to which of the parties has committed the breach of the contract which will be seen after the parties will lead their respective evidence, preliminary decree for a sum of ₹1.10 crores to be paid by the defendant to the plaintiff is passed.

11. A preliminary decree is thus passed in favour of the plaintiff and against the defendant based on the admissions directing the defendant to pay a sum of ₹1.10 crores to the plaintiff along with an interest @12% per annum from the last payment, that is, 3rd April, 2015 which the defendant took even after giving the final legal notice for cancellation of the transaction and forfeiture of the earnest money on 10th March, 2015 till the date of payment. The sum of ₹1.10 crores be paid by the defendant to the plaintiff along with the interest @12% per annum from 3rd April, 2015 within four weeks.

12. Applications are disposed of.

1. On perusal of the documents and with consent of learned counsel for the parties following issues are settled: i. Whether the plaintiff failed to fulfil his commitment to make the part payment out of the remaining sale consideration despite request and demand by the defendant? OPD ii. Whether the plaintiff is entitled to a decree for recovery of a sum of ₹85 lakhs from the defendant? OPP iii. Whether the plaintiff will be entitled to interest, if so, from what period and at what rate? OPP iv. Whether the plaintiff is entitled to a permanent injunction as prayed for in prayer (2)? OPP v. Cost vi. Relief

2. List of witnesses and evidence by way of affidavit of the plaintiff’s witnesses be filed within six weeks.

3. List of witnesses and evidence by way of affidavit of the defendant’s witnesses be filed within four weeks thereafter.