Ajit Pal Singh Bindra vs Bharat Bhushan Chadha

Prathiba M. Singh, J.

I.As. 4533/2017 (u/O VII Rule 11 CPC), 13083/2017 (u/O XXXIX Rule 4 CPC)

The brief background of the present suit is that an agreement to sell in the form of receipt-cum-agreement was entered into in respect of property

bearing No.J-2/16, Ground Floor, Rajouri Garden, New Delhi along with 50% rights in the land underneath (hereinafter ‘suit property’) between

the Plaintiff and the Defendant. The document was in the form of a receiptcum-agreement dated 23rd February, 2011, which reads as under:

“RECEIPT CUM AGREEMENT

J2/16, G.F., Rajouri Garden, New Delhi

Received A sum of rupees 5,00,000/- (Five Lakh Only) in cash from Shri Ajit Pal Singh. As advance sale consideration in respect of sale of property

No.J-2/16, measuring 176 sq. yards (entire Ground Floor) with 50% rights in the property (in the Land Beneath) for a total sale consideration of

Rs.4,11,00,000/- (Four crores eleven lac only). The balance sale consideration will be paid within 90 days at the time of Registration of the sale deed

and at title time of handing over the original documents of the property and the possession of the property. Rs.35,00,000 (Rupees Thirty Five lacs only)

towards part part and signing of the property agreement on 2nd March 2011 will be paid.â€​

As per the said receipt-cum-agreement, the Plaintiff had paid to the Defendant a sum of Rs.5 Lakhs as advance sale consideration. The total sale

consideration amount was Rs.4,11,00,000/-, which was to be paid within 90 days i.e. on or before 23rd May, 2011. As agreed in the above receipt, the

Plaintiff paid to the Defendant a further sum of Rs.35 Lakhs vide demand draft dated 26th February, 2011 and on 24th May, 2011, a further sum of

Rs.25 Lakhs (Rs.20 Lakhs in cash and Rs.5 Lakhs by way of cheque) was also paid. Remaining amount was, however, not paid. It is the

Plaintiff’s case that the Defendant had to hand over the complete vacant and peaceful physical possession and also execute sale deed before 24th

May, 2011 which he did not do. The Plaintiff claimed that he issued letters dated 7th July, 2011 and 20th July, 2011, however, the Defendant did not

honour his commitment. Thereafter, the Plaintiff got issued legal notice dated 3rd November, 2011 calling upon the Defendant to execute the sale

deed upon the receipt of the sale consideration. However, vide reply dated 14th November, 2011, the Defendant took the stand that some part of the

property was tenanted and the property was agreed to be purchased by the Plaintiff on ‘as is where is basis’. Thus, there were disputes

between the parties which led to the filing of the present suit.

The suit was filed and listed on 22nd December, 2014 for the first time and there was no interim injunction sought at that stage. After almost two

years i.e. on 30th September, 2016, an application for interim injunction was filed by the Plaintiff. Same was listed on 17th April, 2017 on which date

statement of learned counsel for Defendant was recorded that no third party interest would be created in the suit property till disposal of the suit.

According to the learned counsels for the parties, mediation was also explored, however, the same did not fructify. The Defendant thereafter

moved an application under Order VII Rule 11 CPC seeking rejection of the plaint. The Plaintiff then moved an application under Order VI Rule 17

CPC seeking amendment. The amendment sought by the Plaintiff is sought to include some other proceedings, which are pending in respect of the suit

property.

The Defendant has also filed an application under Order XXXIX Rule 4 CPC seeking setting aside of the ex-parte injunction order. Thus, both the

I.As. are being disposed of by means of the present order.

The application under Order VII Rule 11 CPC has been primarily filed seeking dismissal of the suit on the ground that the Plaintiff was never ready

and willing to pay the balance sale consideration. It is also submitted that the suit is barred by limitation.

On the issue of limitation it is the case of the Defendant that the limitation ought to run from the date when the 90 days period expired and in any

case it cannot be after the date when the reply to the legal notice was received by the Plaintiff i.e. on 18th November, 2011. Thus, the present suit

that has been filed on 28th November, 2011, is barred by limitation.

It is the settled position in law that for the purpose of application under Order VII Rule 11CPC only the plaint and the documents thereof can be

looked at. A perusal of the receipt-cum-agreement clearly shows that the entire amount was to be paid by the Plaintiff on or before 23rd May, 2011.

The payment made by the Plaintiff on 24th May, 2011 was merely Rs.25Lakhs. Thus, as on 24th May, 2011 out of the entire amount of

Rs.4,11,00,000/- only Rs.65 Lakhs stood paid. The letters dated 7th March, 2011 and 7th July, 2011 are claimed to have been sent and refused by the

Defendant. What is however clear is the stand of the Defendant as contained in the reply to the legal notice. Relevant portions of which are extracted

herein below:

“2. That the contents of para No.2 of your notice is wrong and denied. At the time of striking of deal with your client the situation regarding

handing over the possession of the portion occupied by my client was made clear and my client was liable to handover physical vacant possession of

the rear portion of the property in question and only symbolic possession of the portion occupied by the tenant in the front portion of the property. It is

wrong and denied that my client undertook to negotiate with the tenant or to get the same vacated as alleged. The property was agreed to sold by my

client to your client on “as it is where it is basis†and no undertaking was made wrt negotiating with tenant or to handover physical vacant

possession of the front portion of the property in question which infact was/is in possession of the tenant. The allegations regarding asking for payment

of Rs.35 lacs on 02.03.2011 for negotiations with the tenant are false. Your client was liable to pay Rs.35 lacs on or before 02.03.2011 as agreed at

the time of receiving of the earnest money which payment was received by my client on 02.03.2011 against separate duly executed receipt.

That the contents of para No.3 of your notice are wrong and denied. My client never undertook to either negotiate or settle with the tenant as

alleged and there was no question to obtain the vacant possession from the old tenant as alleged. In fact your client approached my client on the due

date i.e. on 23.05.2011 and requested for extension of the time by one week due to his financial constraints which request was acceded by my client

subject to further payment of Rs.25 lacs which amount was also paid by your client to my client vide duly executed separate receipt Dt 23.5.2011.

The allegations made in para under reply are false and concocted. Your client be put to strict proof of the same.

4.......6........

That the contents of para No.7 of your notice are wrong and denied. The out of the amount already received by my client on various dates from

your client, an amount of Rs.18 lacs was given as advance for purchase of another property which is well with in knowledge of your client, but due to

the non-performance of your client in making balance payment, the said advance amount of Rs.18,00,000/- have been forfeited for which your client

solely liable. My client is still ready to execute transfer document in favour of your client subject to reimbursement of Rs.18 lacs along-with balance

sale consideration of Rs.3.46 crores along-with interest @ 18% p.a. w.e.f. 01.06.2011 till date and hereby call upon him to make the requisite payment

within next 15 days to my client otherwise the amount already paid by your client shall be forfeited without any further notice in this regard.â€​

Thus, by the reply to the legal notice dated 14th November, 2011 the Defendant expressed his willingness to honour the agreement subject to

payment of balance sale consideration along with the sum of Rs.18 Lakhs, which he had incurred as payment towards another property.

Further, the reply also clearly avers that there was no agreement to hand over the vacant peaceful possession of the front portion but only the rear

portion as the agreement between the parties was to sell the property on ‘as is and where is basis’. The Defendant’s stand was that the

Plaintiff was always aware that the front portion of the property was tenanted. No reply was sent by the Plaintiff to this letter.

The receipt-cum-agreement provides that the balance sale consideration would be paid at the time of registration of the sale deed and at the time

of handing over the original documents and possession of the property. It is the clear position on record that the Defendant is in part possession of the

property. But what is conspicuously absent in the receiptcum-agreement are the words ‘vacant and peaceful possession’. While the agreement

merely used the word ‘possession of the property’, all the letters written thereafter by the Plaintiff state that ‘vacant and peaceful

possession’ was to be handed over. Moreover, it was the case of the Defendant that the Plaintiff was always aware that a portion of the property

was tenanted and hence sale consideration that was agreed, was also lesser than the prevalent market value.

The Defendant, further, in his reply clearly states that he is still willing to honour the agreement which, obviously, the Plaintiff did not want.

Following facts clearly show that the Plaintiff merely wishes to keep the property entwined in litigation and is not interested in purchasing the property.

1) No reply was sent to the letter dated 14th November, 2011 written by the Defendant agreeing to honour the agreement.

2) No injunction was sought at the initial stage and no offer for deposit was made of the balance sale consideration.

3) Even during the oral arguments, when it was put to learned counsel for the Plaintiff, if he wishes to still purchase the property, it was stated that the

Plaintiff is willing to pay the balance sale consideration even with the tenant.

These three facts go to show that the Plaintiff was always aware of the front portion of the property being tenanted. Both the parties admitted

during submissions that part of the property continues to be tenanted even as on date.

If the Plaintiff’s understanding is that the vacant and peaceful possession is to be given to him, that is in fact an impossibility, inasmuch as part

of the property continues to be tenanted. Thus, the relief of specific performance with vacant and physical possession, in any case, is not a possibility

and is not liable to be granted. As per the pleaded case, Plaintiff wishes to have vacant and peaceful possession of the property.

The Plaintiff has prayed for alternate relief of Rs.3 Crores in monetary terms against the Defendant. The Plaintiff has paid a sum of Rs.65 Lakhs

towards the agreement to sell and despite the Defendant having offered to honour the agreement, subject to some conditions, he chose not to accept

the same. Even today, learned counsel for the Defendant has made a statement in the Court that the Defendant was willing to pay three times the

advance amount i.e., Rs. 65 lakhs multiplied by 3 = Rs.1.95 crores, to the Plaintiff as settlement amount. However, the Plaintiff is not willing to accept

the same. Under such circumstances, interim injunction cannot be continued, inasmuch as the relief of specific performance cannot be granted. The

only issue that remains is as to the monetary compensation. The Plaintiff’s interest can be safeguarded, if the Defendant is directed to deposit a

sum of Rs.65 Lakhs along with simple interest @ 6% per annum from 24th May, 2011 till today within a period of eight weeks before this Court. This

amount would secure the interest of the Plaintiff and the money, he has already paid to the Defendant. The plaint, insofar as the relief of specific

performance is concerned, is rejected.

The question of limitation as is appearing from the pleadings is a mixed question of facts and law, inasmuch as even as of November, 2011

correspondence had been exchanged between the parties. An issue in respect of limitation would be framed and the said issue would be decided post

trial. At this stage, the Court is unable to hold that the suit is barred by limitation.

Upon the above deposit being made, interim injunction granted vide order dated 17th April, 2017 shall stand vacated. The relief in the plaint, so far

as it relates to specific performance, stands rejected. Both the I.As. are disposed of.

I.A. 6972/2018 ( u/O VI Rule 17 CPC)

By way of the present application, the Plaintiff seeks amendment of the plaint to add two paragraphs relating to the other litigations in respect of

the suit property. For the reasons stated in the application, the prayer for amendment is allowed. I.A. is disposed of.

CS (OS) 3989/2014

Let amended plaint be filed within four weeks. Amended written statement, if any, be filed within four weeks thereafter. Affidavits of

admission/denial be filed with the pleadings.

List before the Joint Registrar on 17th December, 2018 for completion of pleadings and marking of exhibits.