Amarjeet Singh v. Sharda Obhrai

Vikramajit Sen, J.—

IAs No. 1149/2006

1. This Order shall dispose of an application filed by the Plaintiff under order xxxix rule 1 & 2 read with section 151 of the code of civil procedure praying for an ad interim injunction restraining the Defendant from selling, disposing off, alienating, transferring or creating any third party interest in the Suit property bearing No. BP-3, NH-IV, Lajpat Nagar, Part-III, New Delhi. The Plaint seeks to specific performance of a document which the Plaintiff asserts to be an agreement for the sale of a Suit property. The document reads as follows:

“I, Mrs. Sharda Obhrai W/o Late Shree G.L Obhrai R/o BP-3, NH IV Part III Lajpatnagar do hereby acknowledge the receipt of Rupees 60 lacs in the following manner from Amarjit Singh S/o Nanak Singh R/o D-III/9 Lajpatnagar New Delhi-

Rupees 25 lakhs in cash

Rupees 21 lakhs by pay order on No. 705897 drawn on Punjab National Bank and Rupees 14 lakhs drawn on Standard Chartered Bank (both dated 28th Oct 2005) Pay Order 109976.

Sharda Obhrai”

2. It is this document that forms the fulcrum of the dispute, and therefore has to be meticulously and carefully construed by the Court. In doing so, the ratio in C.I.T Punjab Haryana. J. & K. H.P and that of Union Territory of Chandigarh v. Panipat Woolen and General Mills Co. Ltd., Chandigarh, AIR 1976 SC 640 would indubitably have to be understood and applied. The Apex Court had enunciated that while construing any document preference should be given to its substance over its form; the nomenclature or title must make way for its essence. Thereafter in Mayawanti v. Kaushalya Devi, (1990) 3 Supreme Court Cases 1, the Court found that the alleged oral agreement was surrounded by uncertainties and it observed as follows:

“8. In a case of specific performance it is settled law, and indeed it cannot be doubted, that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. The Law of Contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts. Where a valid and enforceable contract has not been made, the court will not make a contract for them. Specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable. The discretion of the court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract. It is, therefore, necessary first to see whether there has been valid and enforceable contract and then to see the nature and obligation arising out of it. The contract being the foundation of the obligation the order of specific performance is to enforce that obligation.

18. The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the courts direct the party in default to do the very thing which he contracted to do. The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem. The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff. If the stipulations and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all. Where there are negotiations, the court has to determine at what point, if at all, the parties have reached agreement. Negotiations thereafter would also be material if the agreement is rescinded.”

In Aggarwal Hotels (P) Ltd. v. Focus Properties (P) Ltd. 63 (1996) Delhi Law Times 52, S.K Mahajan, J. on first principles, distilled four ingredients must be contained in a document if it is to be effective or efficacious as an Agreement to Sell viz- (i) particulars of consideration; (ii) certainty as to party; (iii) certainty as to the property to be sold; and (iv) certainty as to other terms relating to probable cost of conveyance, time etc. He observed that in the absence of any of these constituents, all the obligations contemplated under Section 16 for the specific performance of immoveable property would not arise. The learned Judge thereafter held that the Receipt before him could not be construed as an Agreement to Sell as it did not possess all these characteristics. A similar approach was preferred by Dr. Mukundakam Sharma, J. in Amarjit Singh Johar & Company (DC) v. Shri Prakash Chand Brahmin, 79 (1999) Delhi Law Times 289 : 1999 (50) DRJ 169 who found it incredible that only an oral agreement had been entered into in respect of the purchase of the suit property for an amount of Rs. 50 lakhs, where the land in question was of prime location, as is the case in hand. In High High Way Farms v. Chinta Ram & Ors.., 2000 III AD (Delhi) 857 : 2000 (56) DRJ (Suppl) 201, the Plaintiffs attempt to rely on a Receipt as evidencing an Agreement to Sell was rejected by me. In Lalit Kumar Sabharwal v. Ved Prakash Vijh, 2003 (68) DRJ 670 R.C Chopra, J. declined to view a receipt for Rs. 1 lac as establishing a valid and legally enforceable Agreement to Sell immoveable property.

3. So far as the facts of the present case are concerned the Suit property, admeasuring 1066.66 sq.yds was allotted to the late husband of the Defendant by the L&DO and appears to have been converted to free-hold in favour of the Defendant on 9.7.2003 The Defendant is an aged lady who was being regularly treated by Dr. Ashwini Gupta who was instrumental in introducing the Plaintiff to her. The Plaint specifically records that Dr Ashwini Gupta had assured the Plaintiff that an Agreement to Sell would be signed on or before 30.10.2005, but the allegedly Defendant procrastinated in doing so. Keeping the special relationship between a doctor and his patient in perspective the repeated asseverations in the Plaint to the effect that Dr Ashwini Gupta had assured the Plaintiff that requisite action would be taken by the Defendant, leaves a lot to be answered by Dr. Ashwini Gupta. The Plaint further mentions the filing of a Suit for Mandatory Injunction by the Defendant praying therein that the Plaintiff be directed to accept the refund of the sum of Rs. 60 lakhs.

4. Learned counsel for the Plaintiff has vehemently contended that on a reading of the pleadings filed on behalf of the Defendant in the present proceedings as well as the Plaint by her in the District Court, an Agreement to Sell had come into existence. He has contended that a large sum of money, Rs. 60 lakhs, had been paid to and received by the Defendant. He, therefore, argues that the Plaintiff would be entitled to an ad interim injunction.

5. I do not find any merit in the contention of the Plaintiff. The sum of Rs. 60 lakhs is approximately five percent of the total sale consideration if the Plaintiff's case is to be accepted. As I have expressed in High Way Farms (supra) normally at least 10% is paid as earnest money, thereby manifesting that a sale contract has emerged from negotiations. The Receipt in question can at best be seen as indicating that negotiations or talks in respect of the sale of the Suit property were underway. The Plaintiffs pleading that an Agreement to Sell was to be executed, in fact, destroys his case. Apart from the Receipt not fulfilling all the ingredients which are required for advancing to the conclusion that an Agreement had taken place between the parties, the pleadings or understanding that an Agreement to Sell was to be executed can lead only to the conclusion other than that a concluded contract had not come into existence. If the parties were consensus ad idem on all necessary points, an Agreement to Sell would inevitably have been executed.

6. I have no hesitation in concluding that a prima facie case has not been disclosed by the Plaintiff. Since no Agreement to Sell had emerged the usual and normal presumption that a contract for the conveyance of immoveable property would not normally be compensated in terms of money, does not come into operation. The balance of convenience is not in favour of the Plaintiff who has, prima facie, merely thrown in a small fraction of the price being negotiated between the parties with a view to, at the highest, give some semblance of formality or seriousness to his offer. The Plaintiff would therefore not suffer any irreparable loss or injury. The interest of justice would be adequately met if the Defendant is directed to deposit the said sum of Rs. 60 lakhs with the Registrar General of this Court within four weeks from today. I order accordingly. If the Plaintiff is desirous of withdrawing his Suit, the said sum would be made over to him.

7. The application is dismissed.

IA No. 5072/2006

8. The Defendant's application under Order XXXIX Rule 4 of the Code of Civil Procedure stands allowed in the light of the foregoing discussion.

IA No. 5073/2006

9. Section 21 of the Specific Relief Act, 1963 recognizes the power of the Court to award compensation in lieu of or in addition to a decree for specific performance of a contract. Sub-section (5) indubitably states that compensation shall not be awarded under this section unless it has been claimed for in the Plaint, as has not been done in the present case. The proviso thereto, however, clarifies that if compensation has not been claimed in the Plaint, the Court shall at any stage of the proceedings allow the Plaintiff to amend the Plaint on such terms that may be just, for including a claim for such compensation. Section 22 also envisages a person suing for the specific performance of a contract for the transfer of immovable property and permits asking for possession or partition and separate possession of immovable property in addition to such performance or the refund of any earnest money or deposit paid by the Plaintiff if specific performance is refused. Sub-section (2), in a manner akin to sub-Section (5) of Section 21 restricts the grant of above-mentioned relief unless it has been claimed in the Plaint, as has not been done in the present case. The proviso, in similar fashion to proviso to sub-Section (5) of Section 21 mandates the Court to allow the Plaintiff to amend the Plaint with a view to incorporating this relief. It would, therefore, not be proper to dismiss the Suit at this stage. This observations, however, should sound sufficient caution to the Plaintiff that if requisite action is not taken within a reasonable time, the Court would be fully justified in passing appropriate Orders including the dismissal of the Suit. Although I have declined to grant any ad interim injunction in favour of the Plaintiff, even though no prayer for damages has been made in the Plaint, I do not think it will be proper to dismiss the Suit at this stage. The Defendant's application is therefore rejected in these terms.

CS (OS) No. 196/2006

10. Renotify this matter on 4th December, 2006 for further proceedings.