Naveen Gupta v. Bharat Lal Meena & Anr.

8. On the other hand, the Defendants contended that the Trial Court’s judgment is as per law. Since the DDA had merely given an allotment, but the conveyance deed was yet to be executed, no title in the property could have been transferred. The Defendants relied on Section 54 of the Transfer of Property Act to contend that for any transaction to constitute sale, a registered document needs to be executed. Ld. Counsel also contends that the contract is hit by Section 23 and Section 27 of the Indian Contract Act, as it is forbidden by law. The object of the contract is unlawful. The Defendants rely upon Satish Kurma v. Taran Singh (2016) 4 SCC 352.

9. The following documents are exhibited: i) Agreement to Sell dated 20th July, 2007- Ex.P[1]; ii) Receipts of payment of Rs.[4] lakhs in cash – EX.P[2]; iii) Certificates issued by HSBC and proof of payment to the DDA- EX.PW1/3 and EX.PW1/4; iv) Challan dated 18th July, 2007 issued by Central Bank of India showing payment of Rs.31,82,310/- to the DDA - EX.PW1/5; v) Copy of demand draft showing payment of Rs.[2] lakhs to the Defendants along with certificates from ICICI Bank confirming the said payment – EX.P[3] and Ex.PW1/2; vi) Letter dated 19th January, 2007 issued by the DDA showing that the Defendants have been successful for allotment of a flat with the flat number and the amount to be paid – EX.P[4]; vii) Original cheque in favour of Collector of Stamps dated 19th July, 2007 for Rs.2,57,545/- EX.PW1/11; viii) Challan issued by the Treasury showing payment of Stamp Duty and the demand draft issued by ICICI Bank – EX.PW1/12 and EX.P1/13; ix) Legal notice dated 10th March, 2008- EX.PW1/15, along with postal receipt and ID Cards – EX.P1/16 to PW.1/20; x) Original brochure of the DDA Housing Scheme, 2006 dated 22nd August, 2006 to 12th October, 2006 for allotment of 3500 ready for occupation flats in Sarita Vihar, Dwarka and Rohini and other areas in Delhi - DW.1/1; xi) Original allotment letter dated 7th October, 2008 and other supporting letters under the financial scheme issued by DDA to the Defendants –EX.D[1], D[2], D[3], D[4], D[5], D[6], D[7], D[8].

10. The Court has considered the rival contentions, pleadings, evidence and judgment of the Trial Court. Insofar as issues no. 1, 2 and 3 are concerned, there is no serious dispute between the parties qua these issues. The only question, that remains to be adjudicated which has been argued and raised by the parties, is as to whether in the light of the clauses contained in the DDA Housing Scheme, 2006, the relief of Specific Performance can be granted in favour of the Plaintiff.

11. The relevant clauses of the DDA Housing Scheme, 2006 are set out herein below: “5 (B) II.

FOR POSSESSION OF FLAT a. Payment proof of Allotment money deposited. b. Conveyance deeds duly stamped from the office of collector of stamps. Blank Conveyance deeds would be sent to allottees alongwith the demand letter. c. Affidavit as per proforma given in Annexure-C, D &

1. g. Identity proof and address proof.

7. RESULT OF ALLOTMENT

I. The results of the draw shall be displayed on the

Notice Board of DDA at Vikas Sadan, D-Block, INA, New Delhl-23. In addition the result shall be displayed on the website of DDA with the address http://www.dda.org.in. The result will also be published in the leading National Newspapers.

II. The allotment-cum-demand letters will be dispatched through Speed Post/Courier/Registered Post but it shall be the sole responsibility of the applicant to check the result of the draw if he/she does not get information despite the aforementioned means. In case applicant has given address of a place/office, where entry (of courier) is restricted, all communication including dispatch of refund cheque/demand letter on failure of courier would be through available mode. Applicant is advised to contact nodal officer of the bank as given in Annexure B In such cases. DDA/Banks in such cases would not be responsible for delay/ non receipt of communication by applicant/allottee.

III. A separate waiting list of 200 applicants will also be declared in order of priority. The waiting list will be valid only for 9 months from the date of issue of demand letters. The registration money of the wait listed registrants shall be refunded along with unsuccessful registrants. However, before going for the draw in case the same takes place for filling up the vacancies, all such eligible waitlisted shall be asked to deposit the registration money. 15 days time shall be given to them to do so and only those names shall be included who would be depositing their registration money prior to the draw. A draw will be held only once after six months, from date of issue of demand letters, for allotment of the surrendered flats to the wait listed registrants as per the priority decided initially. Only those flats which are surrendered within six months from date of issue of demand letters would be included for allotment to waitlisted registrants. The waiting list is created just to ensure that the surrendered flats (if any) are allotted to same registrants rather than keeping them vacant and the list will be valid only for 9 months, hence it doesn‟t create any right of the wait listed registrants if they fail to get a flat from the surrendered ones. If successful, the cost would be the cost of the flat on the date of the demand-cumallotment letter is issued.

9. STATUS OF ALLOTTEE

I. All allotments shall be made on free hold basis.

However, the title shall be transferred only when conveyance deed is executed in favour of the allottee and is registered in the office of Sub-Registrar.

13.

DISPOSAL COST OF THE FLATS a) The tentative cost of the flats is given in annexure 'A'. The above cost includes land premium and cost of construction and 20% surcharge on land premium and cost of construction in case of flats situated in South Delhi. Cost of construction includes departmental charges and Interest during construction period. The land premium is normally revised every year on first April while cost of construction is revised twice during the year on every 1st Oct. and 1st April. The variation in cost within category is due to variation in plinth area of the flats. There may be some more flats added or deleted (at the discretion of DDA). If the area changes, the cost of newly added flats will change accordingly. b) In addition to above, allottee is liable to pay Free hold charges. Present provisional, free hold charges are given in Annexure 'A', if these rates are revised upward, difference will be claimed from the allottee.

15.

PERIOD FOR PAYMENT Allottee is liable to make the payment within 90 days from the date of issue of demand letter without interest. Thereafter, the allottee is liable to deposit the amount in not more than next 90 days along with interest @ 15% p.a. compounded as on 31st March. If the payment is not made within 180 days, including interest, from the date of demand letter, allotment of the flat will be automatically cancelled. No show cause notice/intimation will be given by the DDA for cancellation. No time extension for payment beyond the date of automatic cancellation would be given in this scheme. Also no restoration is allowed once the flat is automatically cancelled due to non payment. If the allottee fails to deposit the demanded amount within 180 days i.e. date of automatic cancellation, the amount deposited will be refunded without interest and after deduction of cancellation charges as mentioned in para 12.

18.

POSSESSION OF FLATS i. The allottees shall be entitled to take delivery of possession only after he/she has completed all the formalities, paid all dues and furnished/executed all the documents as required in the demand cum allotment letter or the Delhi Development Authority (Management & Disposal of Housing Estate) Regulations, 1968. ii. If the allottee does not take possession of the flat within 3 months from the date of issue of possession letter shall be liable to pay watch and ward charges at the prescribed rates beyond a period of 3 months from the date of issue of possession letter up to a maximum period of one year from the date of issue of possession letter. At present watch & ward charges are Rs 1250/per month for three bed room flats and Rs 1000/- per month for two bed room flats & expendable houses. iii.If the physical possession is still not taken over then the allotment shall be automatically cancelled. No show cause notice shall be served before cancellation. However, in exceptional cases the physical possession can be given beyond 12 months and up to 24 months on payment of said charges in addition to prescribed restoration/ cancellation charges provided prior permission of DDA is obtained. Any amount deposited towards the cost of the flat shall be refundable without interest in such a case of cancellation after deduction of penalties. iv.The property is being offered on "as is where is basis. The DDA will not entertain any request for additions or alterations or any complaints, whatsoever regarding Property Circumstances except as defined in para 19 of the Regulation referred to above or about cost of flats, its design, the quality of material used, workmanship or any other defect.

19.

EXECUTION OF CONVEYANCE DEED Conveyance deed (Free Hold Deed) paper will be issued by the DDA along with the demand cum allotment letter. These are required to be stamped from the Collector of stamps, Govt. of NCT of Delhi and submitted to DDA before the possession letter is issued. Stamp duty and other expenses in this regard shall be borne by the allottees. Allottee shall not be entitled to transfer or otherwise part with the possession of the whole or any part of the flat without execution of conveyance deed, such sale/transfer shall not be recognized by the Authority and it shall be open to the Authority to cancel the allotment and resume the flat.”

12. Under the above Housing Scheme of 2006, the DDA had allotted the property on 19th January, 2007 to the Defendants. A perusal of the allotment letter shows that the allottees had the option of paying the initial deposit in the following manner: “12. Initial deposit payable by (**) 31-Mar-07 Initial deposit if paid by payable including interest 20-JAN-07 31-MAR-07 3068806.00 01-APR-07 19-APR-07 3068806.00 20-APR-07 19-MAY-07 3106641.00 20-MAY-07 18-JUN-07 3144475.00 19-JUN-07 18-JUN-07 3182310.00

13. Automatic cancellation, if initial deposit is not paid, by 18-JUL-07”

13. Thus, despite the allotment having been made on 19th January, 2007, the Defendants had not been able to arrange for the necessary funds to make the deposit with the DDA almost until the last date i.e., 18th July, 2007. As stated by the Plaintiff, it was finally when the Plaintiff met the Defendants through a local property dealer and the transaction was agreed upon, in principle, the Plaintiff paid the amount to the DDA and not the Defendants. If the amount had not been paid on 18th July, 2007, the allotment was liable for “automatic cancellation” as per the Housing Scheme of 2006. Thus, the Plaintiff has invested a huge amount and has not merely paid the DDA the initial deposit for allotment of the flat, but also arranged for the stamp duty amount, and over and above that, paid a sum of Rs.[4] lakhs to the Defendants. This shows that the Defendants took complete advantage of the Plaintiff and his funds which became available to them. The agreement to sell was entered into on 20th July, 2007, after almost the entire payment was made by the Plaintiff. The salient clauses of the agreement to sell are as under:

14. The above agreement records the transaction as it took place in its chronology except the payment of Rs.[4] lakhs in cash which is evidenced by Receipts - EX.P[2]. Clause 5 makes it clear that the possession was not handed over at the time of the agreement to sell. Thus the transaction was not a sale as contemplated under clause 19 of the DDA Housing Scheme,

2006. It was merely an agreement by which the parties had agreed upon the terms for the conveyance deed to be executed by the DDA. The Defendants were to execute the requisite deed and hand over vacant and peaceful possession of the flat.

15. The Plaintiff who appeared as PW-1 categorically stated in his crossexamination: “It is correct that till the time the amount of Rs.31,82,310/- was paid to DDA, there was no agreement to sell between the plaintiff and the defendants. It is correct that when the said amount was paid to the DDA, till then DDA had not handed over the possession to teh defendants and there was no transfer of title in favour of defendants by the DDA. I did not take any permission from the DDA to enter into any transaction with the defendants in respect of the suit property. It is correct that stamp duty and convergence charges were paid to the DDA before execution of agreement to sell.”

16. PW-3 who appeared as a witness confirmed the payment of Rs.[4] lakhs in cash. DW-1, Mr. Bharat Lal Meena admitted the signatures in the documents including the agreement to sell, receipts etc. Though, he made a statement that he tried to repay the loan amount, he was not able to produce any evidence to support the statement that he went to deliver the repayment of loan to the property dealer. He admitted that he had not written any letter to the Plaintiff to enquire and pay the instalments of the loan. He admitted to having not replied to the legal notice issued by the Plaintiffs. He further admitted that he had taken the possession of the property from the DDA. He further stated that DDA had not executed any conveyance deed in favour of the Defendants till 2nd February, 2015 i.e., the date of his cross-examination.

17. The facts of the present case demonstrate that this is a case of dishonesty on the part of the Defendants. The Defendants, who had gotten the allotment of the flat from the DDA in January, 2007, had not been able to arrange for funds to make the initial deposit to the DDA. It was due to the intervention of the property dealer that the Defendants came in touch with the Plaintiff, who not only paid the entire amount due to the DDA, but also paid the amounts for the stamp duty as also the consideration of Rs.[4] lakhs out of Rs.[5] lakhs to the Defendants. Baring the payment of Rs.[1] lakh which was to be paid at the time of the execution of the sale documents, the Plaintiff has paid the entire amount to the Defendant. However, the Defendants have been anything but scrupulous. They have enjoyed the entire money for more than 11 years. They have also obtained possession of the flat from the DDA and also did not make any attempts to repay the amounts paid by the Plaintiff which they claimed to be a loan. They kept completely silent even when the legal notice was issued and hence the Plaintiff has been made to litigate for all these years for a decade to obtain what is due to him. The Plaintiff has spent a huge amount of money and has also not been able to enjoy the property.

18. The defences of the Defendant are twofold namely, that the transaction was a loan and that the transfer was barred under the DDA Housing Scheme, 2006. The Trial Court has already held that there was no loan paid by the Plaintiff to the Defendants and neither has a loan transaction been established in the written or oral evidence. Thus, the defence that the transaction is a loan transaction has been rightly rejected by the Trial Court.

19. Insofar as the bar under clause 19 of the DDA Housing Scheme, 2006 is concerned, the clause deals with “transfer or part with possession” of the property. The word transfer has been later used synonymously with sale. The agreement to sell dated 20th July, 2007 does not constitute sale as no possession was handed over and the agreement was also not registered. Thus, under the provisions of the Transfer of Property Act, the transaction did not constitute a sale/transfer.

20. Reliance by the Defendants on the judgment of the Supreme Court in Satish Kumar (Supra) is misplaced because in the said case the receipt cum agreement to sell did not mention the correct sale consideration. The payment made to the DDA was higher than the amounts settled in the agreement to sell and the suit was valued for a higher amount than what was paid. Moreover, the property which was allotted to the Defendants therein by the DDA was on a leasehold basis with a condition that the plot would be non-transferable for the period of 10 years. In the present case, however, the status of the allottee is on a free hold basis and not on a leasehold basis. Thus, the allottee could not sell the property until possession was given and conveyance deed was executed. However, once the payments were made and the transaction with the DDA had fructified, the status of the allottee was that of an owner and not a lessee. Thus the judgment in Satish Kumar (supra) is clearly distinguishable. The status of the allottee being on a free hold basis, the allottee could have entered into any transaction which could constitute sale/transfer once the allotment was made. The clauses of the scheme were well within the knowledge of the Defendants who, therefore made a categorical assertion in the agreement to sell under clause 7 and gave an indemnity to the Plaintiff in respect of their title.

21. In fact two similar cases decided by the Delhi High Court, including the Division Bench’s Judgment in Yogesh Tyagi v. Kela Devi 2007 (107) DRJ 242 (DB), Vinod Singh v. Phutori Devi 2006 (87) DRJ 567 (hereinafter, „Vinod Singh‟) and A.B. Singh v. Chunnilal Sawhney & Others 2011IX AD (Delhi) 235 (hereinafter, „A.B. Singh‟ are relevant. In Vinod Singh (supra), a Ld. Single Judge of this court following Kuldip Singh Suri v. Surinder Singh Kalra (1999) 48 DRJ 463 where it was held categorically as under: "The argument of learned counsel for the plaintiff that if the transaction is considered to be an agreement to sell, then in that event the same would be clearly void as no prior permission for entering into such a transaction was taken from the DDA for the transfer of the land, is devoid of force. An agreement to sell does not amount to sale or transfer of the immovable property. Therefore, under clauses 6(a) and (b) of the perpetual sub lease, there is no bar for a sub lessee to enter into an agreement to sell.”

22. The Ld. Single Judge in Vinod Singh (supra) thereafter concluded that the agreement to sell is enforceable and is not contrary to public policy. In A.B. Singh (supra) also the Court followed Vinod Singh (supra) and held that an agreement to sell is not barred. The subsequent judgment of the Supreme Court in Satish Kumar (supra) may have however changed the landscape as far as lease hold property is concerned. However, in the present case, the allotment itself is on a freehold basis and as per clause 19, there is no sale or transfer of the property. This is a case where the Defendants were well aware of the clauses of the DDA Housing Scheme, 2006 but still entered into the agreement to sell. The Defendants have completely enjoyed the consideration amounts as paid by the Plaintiff. Only a balance of Rs.[1] lakh is to be paid. In Jayakantham & Ors. v. Abhaykumar (2017) 5 SCC 178 the Supreme Court has held as under:

23. Applying the above ratio to the present case, it is held that the Plaintiff does not get any advantage over the Defendants who may have in fact lost the allotment itself if the Plaintiff had not made the payment to the DDA. There is no hardship to the Defendants but in fact the hardship would be to the Plaintiff who has almost made the entire payment and has litigated for more than a decade. The grant of specific performance under these circumstances is in fact equitable. The Plaintiff has also prayed for an alternative relief of payment of double the amount of sale consideration. Considering the overall conspectus of the case and the current market value of the property, merely directing the refund of the entire amount, with interest, would not be equitable.

24. Though the Plaintiff is held entitled to the relief of specific performance, considering that the Plaintiff would have to undergo further formalities, etc., and there may be a serious issue of transferring of ownership in his name and also keeping in mind that more than 99 % of the sale consideration has already been paid, the Plaintiff is held entitled to enhanced compensation. The Plaintiff has prayed for grant of double the amount of the sale consideration as an alternative prayer to the decree of specific performance. The circle rates of the property are in the range of Rs.85,000 to Rs. 87,000/- per sq. metre. Thus the market value of the property would be much higher. It is the settled law that in a suit for specific performance, the Court can either grant specific performance of the contract or grant compensation/damages in lieu thereof.

25. Under the facts and circumstances of the present case, the suit is decreed for a sum of Rs.76 lakhs which is double the amount paid by the Plaintiff, along with simple interest @ 12% p.a. from 20th July, 2007 till the date of payment. In addition, the Plaintiff is also held entitled for a sum of Rs.50,000/- as costs of the litigation. The payments shall be made within a period of 8 weeks.

26. Until the payments are made in favour of the Plaintiff, it is directed that the Defendants shall maintain status quo as to title and possession of the flat. The DDA is also directed not to execute the conveyance deed in favour of the Defendants until and unless a no objection is received in writing from the Plaintiff. A copy of this order be sent to the Vice-Chairman of DDA for compliance.

27. Appeal is allowed in the above terms. Decree sheet be drawn accordingly. All miscellaneous applications are also disposed of.

PRATHIBA M. SINGH, J. JUDGE MAY 15, 2018