Davender Kumar Sharma vs Mohinder Singh and Others

Vipin Sanghi, J.

C.M. No. 14864/2012 (for exemption)

Exemption allowed, subject to all just exceptions.

FAO (OS) No. 413/2012

The appellant assails the order dated 16.07.2012 passed by the learned Single Judge in I.A. No. 404/2012 (under Order 39 Rule 1 and 2 CPC) preferred by the plaintiff, and I.A. No. 8907/2012 (under Order 39 Rule 3 and 4 CPC) preferred by defendant nos.1 to 10. The learned Single Judge has dismissed the plaintiffs/appellants application to seek interim injunction under Order 39 Rule 1 and 2 CPC by the impugned order and, consequently, the other interim application stands allowed. The appellant has filed the aforesaid suit to seek specific performance of the agreement to sell executed between the parties. The case of the appellant is that vide agreement to sell dated 14.03.2011, and memorandum of understanding (MOU) of the same date, defendant nos.1 to 10, who are jointly the owners of property No. MPL No. WZ-14-C, built on Ahata No. 40 admeasuring 200 sq. yds. out of khasra nos. 217, 218, 219 and 220, Manohar Park, Delhi had agreed to sell to the plaintiff rights in the said immovable property for a total consideration of Rs. 95 lacs.

The appellant states that the said respondents had agreed to sell the ground floor of the property. It was further agreed that on receiving possession of the ground floor of the property, the appellant would demolish the same and construct a four storey building on it. The ground and third floor of the building to be so constructed, were to come to the share of the appellant, whereas the first and second floors were to go to the share of respondent nos.1 and 2. Respondent nos.3 to 10 were to get the amount of Rs. 95 lacs in lieu of their share in the property and, under the MOU, it was provided that respondent nos.3 to 10 shall relinquish their share and interest in the property in favour of respondent nos.1 and 2. The appellant admittedly paid an amount of Rs. 66,16,666/- to defendant nos.1 to 10.

The appellant preferred the aforesaid suit complaining of non compliance of the said agreement and the MOU by the respondents. It was alleged that the respondent nos.3 to 10 had not surrendered their share in the property in favour of respondent nos.1 and 2, nor the possession of the property had been delivered to the appellant.

The appellant preferred the aforesaid application under Order 39 Rule 1 and 2 CPC alongwith the suit to seek interim injunction against the respondents to restrain them from dealing with the suit property. The respondents also moved an application for vacation of the ad-interim injunction, being I.A. No. 8907/2012. Both these applications were disposed of by the impugned order.

The learned Single Judge has dismissed the appellants application for injunction pending the disposal of the suit by accepting the respondents submission that the agreement to sell and the MOU were incapable of being specifically enforced u/s 14(1)(b) and (d) of the Specific Relief Act (the Act). The learned Single Judge has drawn strength from the decision of the Supreme Court in Vinod Seth Vs. Devinder Bajaj and Another, . The learned Single Judge has held that since the agreement/MOU could not be specifically enforced, no injunction could be granted to prevent its breach in terms of Section 41(c) of the Act.

The learned Single Judge examined the present case on the parameters and considerations laid down by the Supreme Court in the aforesaid case. It was observed that there was no agreement between the parties as regards the specifications of the proposed construction on the suit property; the agreement does not say as to what would happen if the plan for construction of floors, agreed between the parties, is not sanctioned by the MCD/DDA; the agreement is silent as to what would happen if the parties do not agree on the specifications of the proposed construction; the agreement does not provide for any mechanism to carry out joint supervision and quality control during construction; the agreement does not say that the specifications of materials for construction would be unilaterally decided by the appellant and/or the quality of the construction will not be disputed by the respondents; there is no provision in the agreement for the respondent to supervise the construction; the agreement does not provide for the eventuality, where the construction raised by the appellant is not found acceptable by the respondents; the agreement does not prescribe any time within which the proposed construction would be completed; it does not provide as to what would happen if the appellant does not complete the construction or does not even commence it at all, after taking possession from the respondents.

In this background, the Court concluded that it is not possible for the Court, or even the Court Commissioner, to supervise the construction. Consequently, the learned Single Judge has concluded that the agreement cannot be specifically enforced by virtue of Section 14(1)(b) and (d) of the Act.

We find ourselves in agreement with the aforesaid reasoning adopted by the learned Single Judge. We may also note that the MOU is not an agreement which is enforceable, but only an agreement to agree, whereunder respondent nos.3 to 10 had agreed to, in future, agree to transfer their share in the property in favour of respondent nos.1 and 2. An agreement to enter into an agreement in future, cannot be enforced, much less specifically enforced.

Learned counsel for the appellant argues that the specifications could be as prescribed by the CPWD. That is not the issue in hand. This submission itself demonstrates that the parties had not agreed between themselves in respect of a very material and pertinent aspect. In any event, it is not possible for the Court to supervise, on a continuous basis, the construction on the property in question, particularly when the specifications have not been clearly set out. The Court cannot compel the respondent nos.3 to 10 to transfer their share in the property in favour of respondent nos.1 and 2.

The next submission of learned counsel for the appellant is that, atleast, the agreement in respect of the ground floor can be enforced, and the respondents can be directed to transfer the ground floor of the property to the appellant for a consideration of Rs. 95 lacs.

In our view, there is no merit in this submission either. The agreement is not only in respect of the ground floor, but also in respect of the other floors. Whereas the appellant was to get the ground and third floor, respondent nos.1 and 2 were to get the first and second floor, when constructed. The agreement and the MOU form part of the same transaction. They cannot be bifurcated. It cannot be stated that the third floor, which constitutes nearly half of the property agreed to be acquired by the appellant, constitutes a small fraction of the property. It cannot also be said that the amount of Rs. 95 lacs forms the only consideration for transfer of the ground floor premises. The appellant also had the obligation to construct the upper floors so that they would become available to the respondents.

Consequently, the decision in Gurdial Kaur (D) through LRs. Vs. Piara Singh (D) through LRs., as relied upon by the appellant, would have no application. Moreover, under the transaction, the rights of the respondents inter se were also required to be settled. The appellant cannot contend that only its rights should be partially settled leaving the respondents, particularly respondent nos.1 and 2 in the lurch.

For all the aforesaid reasons, we find no infirmity in the impugned order and dismiss the present appeal. We, however, make it clear that the observations made by us shall not come in the way of the appellant/plaintiff in prosecuting the suit, as the observations have been made only for the purpose of dealing with the present appeal arising out of the impugned order.

C.M. No. 14863/2012

In view of the aforesaid, no directions are called for in this application. The same is accordingly disposed of.