S. Raunaq Singh vs Tule Ram

V.K. Jain, J.—This is a suit for specific performance of the Agreement to Sell dated 11th November, 2006 for sale of agricultural land measuring 12 bigha, bearing Khasra Nos. 34/6/2(3-8), 34/15(4-16), 34/16/1(3-11) and 34/27 (0-5) situated at village Kangan Heri, New Delhi. Since the Plaintiff was a minor at the time the agreement was executed, it was signed by his father Shri Randhir Singh on his behalf. The total sale consideration was agreed at Rs 80.01 lakh per acre which comes to roughly Rs 2 crore and a sum of Rs 20 lakh was admittedly paid as earned money to the Defendant. The transaction was agreed to be completed by 16th February, 2007. The Defendant was required to obtain No. Objection Certificate and income tax clearance and inform the Plaintiff for registration of the sale deed within one week from the date of issue of the certificate.

The Defendant did obtain a No. Objection Certificate dated 14th February, 2007 from the office of Deputy Commissioner (South West), Kapashera, New Delhi which was valid for 30 days from the date of issue. The sale deed, on the stamp papers purchased by the Plaintiff, was also got typed and signed by the parties to the agreement on 15th February, 2007.

The case of the Plaintiff, as set out in the plaint, is that when he reached the office of the sub-Registrar on 15th February, 2007 and the demand drafts of Rs 1,80,00,000/-, representing the balance sale consideration, were shown to the Defendant, he informed that the No. Objection Certificate, duly issued by the concerned authority, was on its way and would be attached to the sale deed when it is presented to the sub-Registrar for registration. According to the Plaintiff, the sale deed was got prepared on the aforesaid representation made by the Defendant. This is also the case of the Plaintiff that after signing of sale deed, the Defendant furnished the No. Objection Certificate, which he (the Plaintiff) suspected, was not a genuine document and when questioned about it, the Defendant could not give any satisfactory response and left the office of the sub-Registrar. This is also the case of the Plaintiff that despite his contacting to Defendant on several occasions and requesting him to fulfil his contractual obligations arising out of the agreement to sell dated 11th November, 2006, he did not come forward to do so and rather sent a notice dated 26th February, 2007, making false and frivolous allegations against him and also filed a criminal complaint against him with the police.

The case of the Defendant, on the other hand, is that the Plaintiff/his father was never ready and willing to perform his part of the contract though the Defendant had fulfilled his part of the contract by obtaining the No. Objection Certificate and signing the sale deed, got prepared by the father of the Plaintiff. This is also the case of the Defendant that the Plaintiff had No. intention to pay the balance sale consideration and, therefore, he had sent legal notice dated 26th February, 2007 to him, forfeiting the earnest money. The Defendant had also got his presence recorded in the office of sub-Registrar on 15th February, 2007, after the father of the Plaintiff allegedly failed to honour his part of the contract by not paying the balance sale consideration.

As noted earlier, the Defendant after obtaining the No. Objection Certificate was required to inform the Plaintiff in this regard and the sale deed was to be executed within one week thereafter. This is not the case of the Defendant that he had given prior intimation to the Plaintiff regarding the No. Objection Certificate, obtained by him from the Competent Authority. In fact, during the course of arguments, the learned Counsel for the Defendant stated that the No. Objection Certificate was received by the Defendant only on 15th February, 2007. Thus, it cannot be disputed that the Plaintiff/his father had No. opportunity to verify the genuineness of the No. Objection Certificate at any time prior to 15th February, 2007.

It is an admitted case that Pay Orders of Rs 1,80,00,000/- were obtained by the Plaintiff/his father and were shown to the Defendant though the contention of the Defendant is that probably the Plaintiff had borrowed some money for obtaining these pay orders and later he got them encashed. The learned Counsel for the Plaintiff, however, maintains that those pay orders were not got encashed by the Plaintiff/his father during the period of their validity. Be that is as it may, prima facie, I am unable to make out what advantage the Defendant could have derived by obtaining the pay orders for the balance amount, going to the office of sub-Registrar, purchasing the stamp papers, executing the sale deed and then backing out of the agreement on the very same day on which the sale deed was executed. Prima facie, if a person has agreed to purchase the property, paid the earnest money, obtain pay orders for the balance sale consideration, has gone to the office of sub-Registrar along with the pay orders, has purchased stamp papers and got the sale deed prepared, there should be No. reason for him to back out unless he develops some doubt with respect to either the title of the seller or with respect to documents, such as the No. Objection Certificate, which was compulsorily required for registration of the sale deed.

During the course of arguments, it was contended by the learned Counsel for the Defendant that this suit is barred by limitation having been filed on 04th August, 2010, though the alleged breach of the agreement took place on 15th February, 2007. Admittedly, the Plaintiff was a minor, up to 29th December, 2009. Section 6 of Limitation Act, to the extent it is relevant, provides that where a person entitled to institute a suit is a minor, at the time from which the period of limitation is to be reckoned, he may institute the suit within the same period after the disability has ceased, as would otherwise have been allowed from the time specified in the Schedule for this purpose. Computed after giving benefit of Section 6 of Limitation Act, the suit is well within the prescribed period of limitation.

Prima facie, what I find rather unusual on the part of the Plaintiff is that No. written notice was sent by him/his father to the Defendant, alleging therein that he had some doubt on the genuineness of the No. Objection Certificate and for that reason had sought time to verify the authenticity of the document. But, these are the matters on which No. final view can be taken at this stage. What is important at this stage is that the suit property needs to be preserved so that the Plaintiff is not presented with a fait accompli in case it is ultimately held by the Court after trial that he had always been ready and willing to perform his part of the contract and it was the Defendant who had backed out of his contractual obligation under the agreement. In N. Srinivasa Vs. Kuttukaran Machine Tools Ltd., Supreme Court noticing that the only ground taken by the Respondent was that since time was the essence of the contract and the Appellant had failed to perform his part of the contract within the time specified in the agreement and, therefore, the question of grant of injunction against transfer or alienation of the suit property did not arise at all, the Supreme Court observed that it must be kept in mind that it would be open to the Respondent to transfer, alienate or create any third party interest in respect of property in dispute before passing the award in which one of the main issues would be whether time was essence of the contract or not. The Court was of the view that if at the stage when application of the Appellant u/s 9 of the Arbitration and Conciliation Act was pending, if the Respondent is permitted to transfer, alienate or create any third party interest in respect of the property in dispute then the award, if any, which may be passed in his favour would get nugatory and it would be difficult for him to ask the Respondent to execute a sale deed when a third party interest has already been created by sale of property in dispute and delivering the possession to the third party.

In case interim protection is not granted to the Plaintiff, the Defendant may dispose of the suit property or may create third party interest therein, thereby defeating the very object behind filing of the suit. On the other hand, the Defendant is not likely to suffer any irreparable loss in case he is restrained from selling, assigning or transferring the suit property and from creating any third party interest therein during pendency of the suit. He will continue to enjoy the suit property as he is doing at present. The balance of convenience thus lies in favour of maintaining status quo during pendency of the suit.

In view of the decision of this Court in Mohan Overseas P. Ltd. v. Goyal Tin & General Industries 169 (2010) DLT 487 (DB), the learned Counsel for the Plaintiff, was asked as to whether the Plaintiff is ready to deposit an FDR or furnish a Bank Guarantee for an amount equivalent to the balance sale consideration of Rs 1,80,00,000/- and interest on that amount @ 10% per annum w.e.f. 15th February, 2007 till today. He, however, states that he has not been able to contact the Plaintiff and take instruction from him in this regard. In these circumstances, it is directed that subject to the Plaintiff depositing FDR for the amount equivalent to the balance sale consideration of Rs 1,80,00,000/- and interest on that amount @ 10% per annum w.e.f. 15th February, 2007 till today within four weeks, the Defendant will maintain status quo with respect to title and possession of the land subject matter of this suit during pendency of the suit.

The application stands disposed of. The observations made in this order being tentative and prima facie, would not affect the decision of the suit on merits.

CS(OS) 1591/2010

The following issues are framed on the pleadings of the parties:

Whether the Plaintiff has always been ready and willing to verify his part of the agreement to sell dated 11th November, 2006? OPP

Whether the Defendant committed breach of the agreement to sell dated 11th November, 2006? OPP

Whether the Plaintiff is entitled to relief claimed?

Relief.

Affidavit by way of evidence be filed within four weeks. The parties to appear before the Joint Registrar for fixing a date for cross-examination of witnesses of the Plaintiff on 05th October, 2011