RFA/100/2016 of URVASHI AGGARWAL & ANR Vs KUSHAGR ANSAL & ORS

14.11.2018 12:04

*IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on : 5[th]October, 2018Date of decision :12[th]November, 2018

+RFA 100/2016 & CM APPLs. 11818/2016, 482/2017, 21290/2018URVASHI AGGARWAL & ANR...... AppellantsURVASHI AGGARWAL & ANR...... Appellants

Through:Mr. Shanti Bhushan and Mr. AnilSapra, Senior Advocates with Mr.Shyam Agarwal, Ms. Akansha & Mr.SarthakKatyal,Advocates(M-[REDACTED]).

versus

KUSHAGR ANSAL & ORS.

..... Respondents

Through:Mr. Sachin Datta, Senior Advocatewith Mr. Vikas Tiwari & Mr. AmirJamal, Advocates for R-1 & 4 (M-[REDACTED])

CORAM:JUSTICE PRATHIBA M. SINGHJUDGMENT

Prathiba M. Singh, J.

1.The present appeal arises out of the judgment dated 23[rd]December,2015 passed by the Trial Court by which the relief of specific performancesought by the Appellants/Plaintiffs was rejected and the suit was dismissed.2.The background facts leading to the filing of the present suit date backto an agreement to sell executed on 5[th]October, 1974 in favour of thePlaintiffs, and the Defendant No.5 by Mrs. Suraj Kumari- Defendant No.1.The suit property is house in posh locality of South Delhi, whichexplains the long drawn litigation between the parties.

3.The suit property i.e. House No.82, Jorbagh, New Delhi consists ofthe Ground Floor, First Floor, and Second Floor. The father-in-law of Mrs.

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Urvashi Aggarwal- Plaintiff No.1 took the First and Second Floors of thesuit property on rent. Plaintiff No.2- Mr. Sanjeev Chander Aggarwal and theDefendant No.5- Mr. Rajeev Chander Aggarwal are the sons of PlaintiffNo.1. The father-in-law of Mrs. Urvashi Aggarwal passed away in 1973 andsubsequent to his death, the tenancy of the first floor was transferred to onefirm by the name M/s Vinod Industries Pvt. Ltd. (hereinafter, ‘M/s VinodIndustries’) Mrs. Urvashi Aggarwal’s husband was the Managing Directorof this Company and Mrs. Urvashi Aggarwal was one of the directors. Therent being paid was sum of Rs.500/- p.m. by M/s. Vinod Industries to Mrs.Suraj Kumari – Defendant No.1. For the purpose of brevity and easyunderstanding, Mrs. Urvashi Aggarwal-Plaintiff No.1, Mr. Sanjeev ChanderAggarwal and proforma Defendant No.5- Mr. Rajeev Chander Aggarwal aretogether referred to as the purchasers.

4.On 5[th]October, 1974, the purchasers entered into an agreement to sellwith Mrs. Suraj Kumari for sale of the entire property. It is the case of thepurchasers that the total sale consideration was Rs.1,85,000/- out of whichRs.20,000/- was paid by the purchasers at the time of the agreement, andthereafter, another Rs.50,000/- was to be paid in instalments. Along with theexecution of the agreement to sell, power of attorney was also executedauthorising Mrs. Urvashi Aggarwal to take action on behalf of the owneragainst the tenant of the ground floor, Mr. A. C. Deb. It is further thePlaintiffs’ case that sum of Rs.40,000/- and Rs.10,000/- thereafter, waspaid to the seller- Defendant No.1 and that the purchasers were put inproprietary possession of the suit property. It is the case of the Plaintiffs thatafter the payment of Rs.70,000/-, since the purchasers were put inproprietary possession, there was no requirement to pay any rent and hence

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Vinod Industries stopped paying rent. After the demise of Mr. A.C. Deb in1985, his family vacated the ground floor in September, 1987. TheDefendant No.4 i.e. son of the seller - Mrs. Suraj Kumari occupied theground floor and altercations took place sometime in 1987. This led todisputes between the parties and the purchasers then demanded the specificperformance of the agreement to sell dated 5[th]October, 1974.

5.Various offers appear to have been exchanged between the parties,but there was no settlement. Thus, suit was filed by the Plaintiffs seekingthe following reliefs:

“(a) decree this suit for specific performance anddirect the defendants to execute the sale deed forproperty at 82 Jor Bagh, New Delhi and for possessionof Ground Floor in favour of the plaintiffs and ShriRajiv Chander Aggarwal, Performa defendant No. 5 .

b) Issue prohibitory injunction to the defendants,restraining them from occupying or permitting any oneelse to occupy the ground floor of the property at 82,Jor Bagh, New Delhi.

c) Issue mandatory injunction to the defendantsdirecting them to remove the wall constructed in placeof the side gate of the property at 82, Jor Bagh, NewDelhi.

d) Award cost of this suit to the plaintiffs”

6.The suit was registered on 21[st]October, 1987 and an ad-interim

injunction order was passed in the following terms:

“I.A. No.8029/87:

Notice for the same date.In the meanwhile, thedefendants No.1 to 4 are restrained by way of atemporary injunction from letting out or otherwiseparting with the possession of the property in dispute.Dasti.

7.The Defendants, thereafter, filed their written statement. In the writtenstatement, the stand taken by the Defendants was that the Plaintiffs were atfault as they were not ready and willing to perform the essential terms of thecontract. It was further claimed that the tenancy of the purchasers was onlywith respect to the first floor along with barsati floor of the property andnot separate second floor as alleged. The single payment of Rs.20,000/-was denied. It was also denied that the purchasers were put in proprietarypossession. It was further alleged that the power of attorney in given by Mrs.Suraj Kumari in favour of Mrs. Urvashi Aggarwal, was never acted upon bythe purchasers. The receipt of Rs.10,000/- as part of the sum of Rs.50,000/-was also denied. It was averred that the sum of Rs.10,000/- was adjustedtowards the rent and that the sum of Rs.50,000/- was payable by 31[st]October, 1974. Thus, the Defendants took the stand that the sum ofRs.70,000/- was not received towards the sale consideration. Even the sumof Rs.40,000/- was paid on 31[st]January, 1975 i.e. after delay andRs.10,000/- was paid on 27[th]December, 1975 with delay of more than 1year and no further payment was made. The agreement dated 5[th]October,1974 was, however, not denied. Mr. Deb, the tenant on the ground floor,continued to pay rent to the sellers and not to the purchasers, despite therebeing power of attorney in favour of Mrs. Urvashi Aggarwal. It was alsoalleged that M/s. Vinod Industries, never became tenant of the purchasers,but continued as tenant of the seller, i.e., the Defendant No.1. According tothe Defendants, the stoppage of payment of rent by M/s. Vinod Industrieswas illegal. In 1980, an eviction petition was filed by the sellers against Mr.Deb. The purchasers never took any steps pursuant to the power of attorney.In fact, it was pleaded that it was not professor Deb, who was the tenant but

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an entity called Society for Advancement of Education, which was thetenant on the Ground Floor.

8.After the eviction of the tenant on the ground floor, the DefendantNo.1 agreed to let out the ground floor to Defendant No.4 for his business,who started carrying out repairs in 1987, which is when the disputes aroseand the purchasers started asserting the agreement to sell. According to thesellers, the purchasers had breached, repudiated, and abandoned theagreement. They were even not ready and willing to perform their part of thecontract and had given up the agreement and hence there was no cause ofaction as the sale deed had to be executed by 31[st]March, 1975, which rightwas never asserted until the filing of the suit in 1987, i.e., until almosttwelve years later.

9.The suit then proceeded for pleadings and evidence. On 10[th]May,1991, an order was passed that the Plaintiffs would not be dispossessed fromthe premises except in accordance with law in I.A. 6409/1991. On 4[th]February, 1994, it was directed as under:

“Till, the next date of hearing, no person other thandefendant No.4 shall occupy ground; floor of thepremises 82, Jor Bagh, New Delhi.”

10.Various other interim orders were passed allowing right of passagefor the Plaintiffs. In the meantime, an eviction petition was also filed byseller against M/s. Vinod Industries. The Supreme Court on 21[st]September,1995 passed the following order:

“After hearing the counsel for the parties, it appearsthat an application for eviction filed on behalf of thepetitioner against the respondent is still pending beforethe Rent Controller. suit for specific performance of

contract, filed on behalf of Smt. Urvashi Agrawal andher two sons in respect of the same premises is alsopending before the High Court of Delhi. We do notconsider it desirable to express any opinion on themerit of the petition for eviction or the suit because it islikely to prejudice one party or the other.Accordingtousthebestcourseunderthecircumstances is to request the High Court to disposeof O.S.No.2296/87 before 31[st]March, 1996. Bothparties have assured us that they will co-operate inearly disposal of the said suit. We also direct the RentControllertoproceedwiththehearingoftheapplication for eviction filed on behalf of the petitioneragainst the respondent. However, no decree foreviction shall be passed before the disposal of the suitby the High Court.

The Special Leave Petition is accordingly, disposedof.”

11.On 26[th]October, 1995 the following issues were framed in the suit:

“1.Whether the suit is within limitation?

2.Whether the suit is not bad for misjoinder ofparties in cause of action?parties in cause of action?

3.Whether the agreement to sell dated 5.10.74 wasamended and varied by the parties with regardto payment of Rs.50,000/- upto 31.10.74 and thebalance sale consideration in instalments ofRs.7,000/- P.M. commencing from Ist week ofJanuary, 1975 till full payment of the saleconsideration as alleged? If so, to what effect.amended and varied by the parties with regardto payment of Rs.50,000/- upto 31.10.74 and thebalance sale consideration in instalments ofRs.7,000/- P.M. commencing from Ist week ofJanuary, 1975 till full payment of the saleconsideration as alleged? If so, to what effect.4.Whether the amount of Rs.10,000/- paid by theplaintiff was towards instalment of Rs.50,000/-as alleged by the plaintiff?plaintiff was towards instalment of Rs.50,000/-as alleged by the plaintiff?

5.Whether the plaintiff was put in proprietorypossession of the entire property in suit bydefendant No.1 as alleged in para 15 of theplaint?possession of the entire property in suit bydefendant No.1 as alleged in para 15 of theplaint?

6.Whether there is subsisting agreement to sellcapable of specific performance as alleged?capable of specific performance as alleged?

7.Whether the defendant committed breach of thecontract?contract?

8.Whether the plaintiff has been ready and willingto perform the agreement to sell?to perform the agreement to sell?

9.Whether time for payment was not the essence ofthe contract as alleged by plaintiff?the contract as alleged by plaintiff?

10.Whether the agreement to sell was breachedrepudiated, abandoned and given up as allegedby the defendant?repudiated, abandoned and given up as allegedby the defendant?

11.Whethertheplaintiffsareentitledspecificperformance of the agreement to sell dated5.10.74 and to what other relief or reliefs theplaintiffs are entitled in the suit and againstwhom?performance of the agreement to sell dated5.10.74 and to what other relief or reliefs theplaintiffs are entitled in the suit and againstwhom?12.Relief.”

12.On the said date i.e., on 26[th]October, 1995, the application by M/s.Vinod Industries seeking impleadment in the suit was rejected. The sellerswere, however, permitted to make use of the ground floor of the property,however without obstructing the occupation by the purchasers.Evidencewas recorded of the following witnesses:

PW-1 - Shri Dal Chand, UDC from the L&DOPW-1 - Shri Dal Chand, UDC from the L&DO

PW-2 - Shri Vinod Chandra Aggarwal – Husband of Smt. UrvashiAggarwalPW-2 - Shri Vinod Chandra Aggarwal – Husband of Smt. UrvashiAggarwal

13.On behalf of the Defendants, evidence of DW1- Mr. Deepak Ansalwas recorded.

14.The suit was transferred to the District Court in the year 2000. TheDefendant No.1 had passed away in the meantime, on 15[th]October, 2000and the application filed to bring the LRs of Mrs. Suraj Kumari on recordi.e. Mr. Kushagr Ansal, was dismissed by the Trial Court. This application

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was carried in appeal and vide order dated 23[rd]July, 2007, the application ofimpleadment of Mr. Kushagr Ansal was allowed in the following terms:impleadment of Mr. Kushagr Ansal was allowed in the following terms:

“Both impugned orders are quashed. Application filedby the plaintiffs for impleadment of Kushagr Ansal asthe legal heir of deceased defendant No.1 is allowedtaking on record that the sons and daughters ofdeceased have accepted his claim under the willexecuted by their mother i.e. grandmother of KushagrAnsal.”by the plaintiffs for impleadment of Kushagr Ansal asthe legal heir of deceased defendant No.1 is allowedtaking on record that the sons and daughters ofdeceased have accepted his claim under the willexecuted by their mother i.e. grandmother of KushagrAnsal.”

15.Finally on 2[nd]March, 2010 the evidence of the Defendants was alsoclosed. An amendment application to amend the plaint was, thereafter, filedby the Plaintiffs. The same was allowed on 20[th]July, 2015. The suit wasthereafter finally heard and was dismissed on 23[rd]December, 2015.

16.Before going into the contentions of both the sides of the judgment ofthe Trial Court, summary of the evidence led is set out below:

PW1 – Shri Dal Chand, UDC from L&DO, Nirman Bhawan

17.PW-1 deposed that an application was made by the owner Mrs. SurajKumari seeking permission for sale of the property in favour of Mrs.Urvashi Aggarwal on 15[th]October, 1976.The same was granted on 10[th]October, 1977, and was communicated to the owner. In cross-examination,PW-1 confirmed that the first application, seeking permission to sell theproperty in favour of Mrs. Urvashi Aggarwal, was filed by Mrs. SurajKumari on 27[th]November, 1974. Reminders for the same were sent on 19[th]December, 1974, 6[th]December, 1974, and 17[th]April, 1975. letter dated26[th]June, 1975 was issued to Mrs. Urvashi Aggarwal intimating the variousterms and conditions for grant of permission to sell, to which reply wassent on 20[th]November, 1974. Mrs. Suraj Kumari had deposited sum of

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Rs.52,682.60 towards unearned interest, ground rent and damages on 9[th]May, 1977. The permission was valid for period of 90 days, during whichperiod, the sale deed was to be executed.

PW-2 Shri Vinod Chandra Aggarwal, husband of Mrs. UrvashiAggarwal

18.He confirmed most of the facts pleaded in the plaint including thetenancy of his father since 1957-58 in the suit property. He furtherconfirmed that he and his wife were the directors of M/s. Vinod Industries,which had its office in portion of the property. He confirmed the executionof the agreement to sell. He claimed that after the payment of Rs.20,000/- atthe time of execution of the agreement to sell and thereafter Rs.40,000/- inJanuary, 1975 and Rs.10,000/- in December, 1975, he did not make anypayments of any instalments. He claimed that the said payments were notmade as his friend Mr. Sushil Ansal told him not to pay any instalments, tillthe permission from L&DO for selling the property is obtained. Heconfirmed that though the agreement to sell provided that his wife couldreceive the rent from the ground floor tenant, he did not collect the same,presuming that the same could be adjusted towards the instalments.Herelied upon Ex.P2 an authority letter issued by Mrs. Suraj Kumariauthorising his wife to collect the rent for the ground floor. He furtherclaimed that though M/s. Vinod Industries stopped paying rent with effectfrom January, 1976, the owners, in fact, never demanded rent. Neither he,nor his wife were informed about the forfeiture of Rs.10,000/- towards therent. He claimed that he and the Defendant No.2 - Mr. Sushil Ansal werevery close friends. The agreement for the Jorbagh property was entered into

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in lieu of another sale of plot in Faridabad, which was to be sold to M/sAnsal & Saigal Properties. He claimed that the sellers never demanded theoutstanding consideration of Rs.1,15,000/-. He claimed that his family wasalways ready and willing as also had the financial capacity to pay the sum ofRs.7000/- per month which is evident from the fact that his father was aHigh Court Judge, and his brother was the Chief Justice of Allahabad HighCourt and Brother-in-law was Law Minister of India. There was never anydoubt of their capacity to pay. He also claimed that he himself was running afactory in Faridabad and had capacity to pay.

19.In cross-examination, he could not confirm the exact date when Mr.Sushil Ansal told him not to pay the instalments. He confirmed that the sumof Rs.50,000/- was to be paid by his wife and sons latest by 31[st]October,1974 and that the payment was not made by the said date. He confirmed thatM/s. Vinod Industries did not pay any rent from 17[th]January, 1975.However, sum of Rs.10,000/- was paid by M/s. Vinod Industries inDecember, 1975, and that there was no receipt issued as this amount wastowards the sale consideration of the suit property. He confirmed that Mrs.Suraj Kumari had filed an eviction petition against M/s. Vinod Industriesafter the filing of the present suit. He admitted that he did not know thedistinction between proprietary possession and possession. He was also notaware of any proceedings filed by Mrs. Suraj Kumari against the tenant ofthe ground floor Mr. Deb.

20.He further confirmed that no letter was written by his wife or sonsasking Mrs. Suraj Kumari as to whether the permission from L&DO wasobtained and he was also not aware if such an application for permissionwas made with the L&DO. He also confirmed that no notice was issued

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from the side of his family to Mrs. Suraj Kumari asking her to perform herpart of the agreement. He relied on the conversations with Mr. Sushil Ansalthat there were some difficulties in obtaining the permission from theL&DO, but his own family had not made any inquiries from the L&DO. Heconfirmed that no document was executed between M/s. Vinod Industriesand M/s. Ansal and Saigal Properties (P.) Ltd. (hereinafter, ‘Ansal andSaigal Properties’) in respect of any plot in Faridabad. He confirmed thatM/s. Vinod Industries was running in losses from 1974. He also confirmedthat no letter was written to Mrs. Suraj Kumari that the Plaintiffs were readyand willing to perform the obligations under the contract. He furtheradmitted that the prices of the properties had risen manifold between theperiod of 1974-1987. He confirmed that his wife did not take any steps tohave the property vacated by Mr. Deb and his family. He also confirmed thathis family had not made any payment of ground rent for the property to theL&DO.

DW1-Deepak Ansal

21.He is one of the sons of Mrs. Suraj Kumari. He confirmed thatwhenever any documents were required to be signed by Mrs. UrvashiAggarwal, she would sign the same and forward them to his mother, whowould then file the documents with the L&DO.He confirmed that hisbrothers are Mr. Sushil Ansal and Mr. Gopal Ansal, who were in the realestate business of Ansal Group of Companies. He stated that he was notaware of any agreement to sell dated 4[th]October, 1974 between M/s. VinodIndustries and Ansal & Saigal Properties for Faridabad property. Heconfirmed that he was not party in the negotiation process for the sale of

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the suit property. He stated that his parents were holding talks with Mrs.Urvashi Aggarwal and Mr. Vinod Aggarwal. He claimed that he was presentat the time when the agreement to sell dated 5[th]October, 1974 was executedin his house. One of his brothers Mr. Gopal Ansal was witness to theagreement. He confirmed that he had not signed as witness as per thedirections of his father. He relied on Ex.PW-1/7, the letter dated 26[th]June,1975 to state that it was the joint responsibility of his mother and thePlaintiffs to obtain the permission from the L&DO. He denied that it was hismother’s sole responsibility. DW-1 relied on clause 7 of the agreement tosell dated 5[th]October, 1974 and stated that whenever L&DO’s permission isto be taken, the vendor and the vendee have to apply jointly and that theinspection of the property is also conducted. He stated that the L&DOpeople came for inspection in the year 1974-75. He relied upon clause 2 ofthe agreement to sell to state that time was of the essence of the contract. Hedenied the existence of any understanding between the Plaintiffs and hisbrother Mr. Sushil Ansal. He claimed that his father had informed him thatthe amount of Rs.10,000/- paid by M/s. Vinod Industries was towards thepayment of rent. He categorically denied that Rs.70,000/- was paid towardspart sale consideration. He claimed that he and his mother had informed thePlaintiffs of the permission received from the L&DO. He further denied thesuggestion that his mother had intentionally not informed the Plaintiffs ofthe permission from L&DO. He, however, confirmed that there was nodocument to show that the Plaintiffs were told about the said permission.The suggestion about the adjustment of the ground floor rent towards thesale consideration was denied.

22.There were various documents filed by the parties, which were

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exhibited. Many documents were only marked for identification. Thefollowing are the lists of exhibits, which were exhibited during the evidence:A.Plaintiffs’ Exhibits

Ex.PW1/1 – Application for permission to sell the property by Mrs.Suraj Kumari to the L&DO;Suraj Kumari to the L&DO;

Ex.PW1/2 – Letter dated 10[th]October, 1977 from L&DO givingpermission to sell the property to Mrs. Suraj Kumari;permission to sell the property to Mrs. Suraj Kumari;

Ex. PW1/3 – Letter from Mrs. Suraj Kumari to L&DO dated 20[th]/27[th]November, 1974 seeking permission to sell the house;November, 1974 seeking permission to sell the house;

Ex.PW1/4 – Letter dated 19[th]December, 1974 from Mrs. SurajKuamri to L&DO seeking permission to sell the suit property;Kuamri to L&DO seeking permission to sell the suit property;

Ex. PW1/5 – Letter dated 6[th]February, 1975 from Mrs. Suraj Kuamrito L&DO seeking permission to sell the suit property;to L&DO seeking permission to sell the suit property;

Ex.PW1/6 – Letter dated 17[th]April, 1975 from Mrs. Suraj Kuamri toL&DO seeking permission to sell the suit property;L&DO seeking permission to sell the suit property;

Ex.PW1/7 – Letter dated 26[th]June, 1975 from L&DO to Mrs. SurajKumari stipulating terms and conditions to obtain permission fromL&DO;Kumari stipulating terms and conditions to obtain permission fromL&DO;

Ex.PW1/8 – letter dated 14[th]August, 1975 to L&DO enclosingaffidavit of Mrs. Urvashi Aggarwal in compliance with letter dated26[th]June, 1975;affidavit of Mrs. Urvashi Aggarwal in compliance with letter dated26[th]June, 1975;

Ex.P-1 – Agreement to Sell dated 5[th]October, 1974;

Ex.P-2 – Power of Attorney in favour of Mrs. Urvashi Aggarwal fromMrs. Suraj Kumari;Mrs. Suraj Kumari;

Ex.P-3 – Agreement to Sell, between M/s Vinod Industries and M/sAnsal and Saigal Properties (P.) Ltd. dated 4[th]October, 1974 qua theFaridabad property;Ansal and Saigal Properties (P.) Ltd. dated 4[th]October, 1974 qua theFaridabad property;

Ex.P-4 – Letter dated 7[th]December, 1978 from Mrs. Suraj Kumari toMr. Vinod Chander Aggarwal, asking them to allow inspection of theproperty by the L&DO;Mr. Vinod Chander Aggarwal, asking them to allow inspection of theproperty by the L&DO;

Ex.PW2/1 – Power of Attorney in favour ofMr. Vinod ChanderAggarwal from Mrs. Urvashi Aggarwal.Aggarwal from Mrs. Urvashi Aggarwal.

B.Defendants’ Exhibits

Ex.DW1/1 –Affidavit dated 20[th]November, 1974 accompanyingletter dated 27[th]November, 1974 by Mrs. Urvashi Aggarwal;letter dated 27[th]November, 1974 by Mrs. Urvashi Aggarwal;

Ex.DW1/2 – letter dated 9[th]May, 1977 sent by Mrs. Suraj Kumari toL&DO showing payment of Rs.52,682 to regularise the property;L&DO showing payment of Rs.52,682 to regularise the property;

Ex.DW1/3 – Letter dated 28[th]July, 1975 from L&DO to Mrs. SurajKumari, stating that affidavit of Mrs. Urvashi Aggarwal was not inorder;Kumari, stating that affidavit of Mrs. Urvashi Aggarwal was not inorder;

Ex. DW1/4 – Undertaking dated 9[th]May, 1977 given by Mrs. SurajKumari to L&DO to get the breaches regularised in the suit property;Kumari to L&DO to get the breaches regularised in the suit property;

Ex.DW1/5 – Undertaking given by Mrs. Urvashi Aggarwal to L&DOto get the breaches regularised in the suit property;to get the breaches regularised in the suit property;

Ex.DW1/5A – Endorsement of receipt of Rs.52,682 by L&DO;

Ex.DW1/6 – Permission letter from the L&DO dated 10[th]October,1977;1977;

Ex. DW1/7A – Ex.DW1/15 – house tax receipts in the name of Mrs.Suraj Kumari;Suraj Kumari;

Ex. DW1/16 - Receipt issued by Mrs. Roma Deb in favour of Mrs.Suraj Kumari for sum of Rs.1,50,000/-;Suraj Kumari for sum of Rs.1,50,000/-;

Ex.DW1/17 - Certificate of possession in favour of Mrs. SurajKumari signed by Mrs. Roma DebKumari signed by Mrs. Roma Deb

Ex.DW1/18 – Wealth tax receipt of the suit property dated 30[th]March, 1979;March, 1979;

Ex.DW1/P1 – Affidavit of Mrs. Urvashi Aggarwal dated 6[th]September, 1976September, 1976

Ex.DW1/P1 – Ex.DW1/P8 – rent receipts issue to M/s VinodIndustries for various periods between October, 1973 till January,1975Industries for various periods between October, 1973 till January,1975

23.The following were the documents marked for identification:

Marked Documents

Mark –house tax receipt from MCD to Mrs. Suraj Kumari dated22[nd]October, 1975;22[nd]October, 1975;

Mark – house tax receipt from MCD to Mrs. Suraj Kumari dated11[th]February, 1982;11[th]February, 1982;

Mark – house tax receipt from MCD to Mrs. Suraj Kumari dated28[th]March, 1985;28[th]March, 1985;

Mark – house tax receipt from MCD to Mrs. Suraj Kumari dated17[th]October, 1986;17[th]October, 1986;

Mark – house tax receipt from MCD to Mrs. Suraj Kumari dated10[th]April, 198710[th]April, 1987

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Mark – house tax receipt from MCD to Mrs. Suraj Kumari dated5[th]October, 19885[th]October, 1988

Mark – house tax receipt from MCD to Mrs. Suraj Kumari dated13[th]December, (illegible)13[th]December, (illegible)

Mark – house tax receipt from MCD to Mrs. Suraj Kumari dated22[nd]May, 197522[nd]May, 1975

24.Some other documents that are on record are as under:Other DocumentsOther Documents

Rent receipts for the first floor of the Suit Property in favour of M/sVinod Construction;Rent receipts for the first floor of the Suit Property in favour of M/sVinod Construction;

Legal notice of eviction dated 11[th]September, 1989 served on M/sVinod Industries;Legal notice of eviction dated 11[th]September, 1989 served on M/sVinod Industries;

Letter dated 16[th]April, 1975 from Mr. Vinod Chander Aggarwal toMrs. Suraj Kumari stating that there is encroachment of commonareas of ground floor;Mrs. Suraj Kumari stating that there is encroachment of commonareas of ground floor;

Wealth tax receipt for the year 1973-1974;Wealth tax receipt for the year 1973-1974;

Wealth tax receipt for the year 1992-1993;Wealth tax receipt for the year 1992-1993;

Will of Mrs. Suraj Kumari dated 11[th]May,1999.Will of Mrs. Suraj Kumari dated 11[th]May,1999.

Judgment of the Trial Court

25.The findings, of the Trial Court on the various issues, are as under:

A.Issue no. 2 – Whether the suit is not bad for mis-joinder of partiesto the cause of action?to the cause of action?

26.On this issue, the Trial Court came to the conclusion that the suit isnot bad for mis-joinder of parties. The submission was that the inclusion ofthe Defendant Nos.2 to 4 was irrelevant and hence the suit was bad for mis-not bad for mis-joinder of parties. The submission was that the inclusion ofthe Defendant Nos.2 to 4 was irrelevant and hence the suit was bad for mis-

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joinder. The Trial Court held that since Defendant No.1 Mrs. Suraj Kumaripassed away, her rights and interest in the property have devolved upon hergrandson – Mr. Kushagr Ansal. The Trial Court, thus, holds that upon thedemise of Defendant No.1, the Defendant Nos.2 to 4 are necessary parties.Thus, this issue was decided in favour of the Plaintiffs.

27.In the appeal, neither party has addressed submissions on this issueand hence the Trial Court’s findings on this issue are affirmed.

B.Issue 4 – Whether the amount of Rs.10,000/- paid by the plaintiffswas towards instalment of Rs.50,000/- as alleged by the plaintiff?

28.On this issue, the question was whether the payment of Rs.10,000/-was towards rent by M/s. Vinod Industries or towards the part saleconsideration. Admittedly, the amount was paid from the account of M/s.Vinod Industries in favour of Mrs. Suraj Kumari on 26[th]December, 1975.The initial payments of Rs.20,000/- and Rs.40,000/- are not disputed. Aftergoing through the evidence on record, the Trial Court comes to theconclusion that the amount of Rs.10,000/- paid by the Plaintiffs was towardsthe part sale consideration.

C.Issue no.3 – Whether the Agreement to sell dated 5/10/74 wasamended and varied by the parties with regard to payment ofRs.50,000/- upto 31/10/74 and the balance sale consideration ininstalments of Rs.7,000/- commencing from January 1975 till fullpayment of the sale consideration as alleged? If so, to what effect?amended and varied by the parties with regard to payment ofRs.50,000/- upto 31/10/74 and the balance sale consideration ininstalments of Rs.7,000/- commencing from January 1975 till fullpayment of the sale consideration as alleged? If so, to what effect?

29.On this issue, the case of the Plaintiffs was that the payment ofRs.50,000/- was admitted and accepted even in December, 1975. The TrialCourt, after considering the law of novation of contracts, has held that theagreement to sell was amended and varied by the parties with regard to

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payment of Rs.50,000/- upto 31[st]October, 1974. Thereafter, the Trial Courtconsiders the aspect of payment of Rs.7,000/-, monthly instalments. On this,the Trial Court held that in respect of payment of balance sale considerationin instalments, the agreement to sell was not amended.

D.Issue no.9 – Whether time for payment was not the essence of thecontract as alleged by the plaintiff?contract as alleged by the plaintiff?

30.The Plaintiffs claimed that time was not of the essence of the contractas there were provisions for payment of hefty rates of the interest in theagreement to sell dated 5[th]October, 1974. Further, the Defendants havingaccepted the payments in December, 1975, it is clear that the time was not ofthe essence. However, the Trial Court came to the conclusion that time wasof the essence of the contract.

E.Issue no.5 – Whether the plaintiff was put into proprietorypossession of the entire suit property by defendant no.1 as allegedin para 15 of the plaint?possession of the entire suit property by defendant no.1 as allegedin para 15 of the plaint?

31.On this aspect, the Trial Court came to the conclusion that thePlaintiffs were not put in proprietary possession.

F.Issues 6 – Whether there is subsisting Agreement to sell capableof specific performance as alleged?of specific performance as alleged?

G.Issue 8 – Whether the plaintiff has been ready and willing toperform the Agreement to sell?perform the Agreement to sell?

H.Issue 10 – Whether the Agreement to sell was breached,repudiated,abandoned,andgivenup,asallegedbythedefendants?repudiated,abandoned,andgivenup,asallegedbythedefendants?

32.These three issues were decided jointly. The Trial Court came to theconclusion that time was of the essence of the contract. The Plaintiffs hadfailed to establish their readiness and willingness. The Trial Court, finally,

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found that the Plaintiffs had breached, repudiated, abandoned and given upthe agreement to sell dated 5[th]October, 1974.

I.Issue 1 – Whether the suit is within limitation?

33.The Trial Court holds that the suit is barred by Limitation.

J.Issue no.7 – Whether the defendant committed breach of thecontract?contract?

34.The Trial Court held that the Defendants did not commit breach of thecontract.

K.Issue no.11 – Whether the plaintiffs are entitled to specificperformance of the Agreement to sell dated 05.10.1974 and towhat other relief or reliefs are the plaintiffs entitled to and againstwhom?performance of the Agreement to sell dated 05.10.1974 and towhat other relief or reliefs are the plaintiffs entitled to and againstwhom?

35.The Plaintiffs are not entitled to the relief of the specific performance.

Submissions on behalf of the Plaintiff

36.On behalf of the Appellants/Plaintiffs, Mr. Shanti Bhushan and Mr.Anil Sapra, learned Senior Counsels have made their submissions. The mainsubmission of the Plaintiffs is that the agreement to sell, in the present case,is not an ordinary agreement. The manner in which it was worded showsthat time was not of the essence of the contract. Since permission wasrequired from the L&DO for effecting the sale, which was received only inOctober, 1977, the clauses for payment stipulated in the agreement had nomeaning. Mr. Bhushan submitted that since Mr. Sushil Ansal and hisconduct was inextricably linked with this transaction. The fact that he didnot enter appearance, shows that an adverse inference ought to be drawn

against him. It is his further his submission that if the agreement was indeedrescinded, the sum of Rs.70,000/- ought to have been refunded. Since theDefendants continued to apply to the L&DO for permission till 1977, accordingto Mr. Bhushan, they themselves did not believe that time was of the essence ofthe contract. He relies on the following judgments in support of thesepropositions:

A.On adverse inference

a) Vidhyadhar v. Manikrao & Anr. (1999) 3 SCC 573;

b) Gurbaksh Singh v. Gurdial Singh CWN (XXXII) 119;

c) Union of India v. Ibrahimuddin & Anr. (2012) 8 SCC 148;

d) Habeeb Khan v. Valasula Devi AIR 1997 AP 53;

B. On limitation and time is not the essence of the contract

e) Laxminarayana Reddiar v. Singaravelu Naicker & Anr. AIR 1963Mad, 24Mad, 24

f) Govind Prasad Chaturvedi v. Hari Dutt Shastri & Anr. (1977) 2 SCC539;539;

g) Hind Construction v. State of Maharashtra (1979) 2 SCC 70;

h) Gomathinayagam Pillai & Ors. v. Pallaniswami Nadar AIR 1967 SC868.868.

37.As per entry 54 of the Limitation Act, 1963, the three year period incase of fixed date starts from the date of the agreement to sell but in thepresent case, the three year period would commence when the performanceis refused. Since the owners never refunded Rs.70,000/- and also did notdemand any rent from M/s. Vinod Industries from January, 1976, it wasclear that the contract was alive. No letter of termination of the agreement tosell has been issued, and any delay in payments can be compensated with

money by payment of interest. According to Mr. Bhushan, the date for paymentbecame immaterial. It is further submitted that the family of the Plaintiffs wasquite well off and never had any issue in making the balance payments. Neitherwas the rent demanded, nor the balance sale consideration was demanded.Since the Plaintiffs’ family was in proprietary possession after payment ofRs.70,000/-, the Plaintiffs also did not issue any notice. The family of thePlaintiffs was using the suit property as their residence since 1958 and underSection 53A of the Transfer of Property Act, 1882 (hereinafter, ‘Transfer ofProperty Act’), their rights in same became absolute. Mr. Bhushan furtherrelies upon the finding of the Trial Court that the agreement to sell came to beamended insofar as the extension of date is concerned. However, for thepayment of Rs.7000/- per month the Trial Court held that the amendment hadto be in writing. These are contradictory findings according to Mr. Bhushan.38.While admitting, under Section 20 of the Specific Relief Act, 1963, thatthe grant of specific relief is discretionary remedy, the fact, that Mr. SunilAnsal was arrested in respect of the Uphaar tragedy etc., ought to be consideredin favour of the Plaintiffs as he was unavailable during that period. In respectof the above propositions, the Plaintiffs rely on the following judgments:

a) Man Kaur v. Hartar Singh Sangha (2010) 19 SCC 512;

b) Nathulal v. Phoolchand (1969) 3 SCC 120;

c) Sant Lal v. Shyam Diwan AIR 1986 Del. 275;

d) Butchiraju v. Sri Ranga Satyanarayana AIR 1967 AP 69;

e) Satya Jain v. Anis Ahmed Rushdie (2013) 8 SCC 131;

f) K. Prakash v. B.R. Sampath Kumar (2015) 1 SCC 597;

g) Zarina Siddiqui v. A. Ramalingam (2015) 1 SCC 705.

39.Mr. Anil Sapra, learned Senior Counsel appearing for the Plaintiffs

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held that the sale deed in this case was to be executed even without thepayment of the entire consideration. Retention of Rs.10,000/- as rent wasaccording to Mr. Sapra, malafide. Vehement reliance is placed on Section 54of the Transfer of Property Act by Mr. Sapra. The payment of instalmentswas open ended and could be deferred. According to him, consideration wasnot the key in this transaction. The Defendants were to obtain clearancesfrom Income Tax, Department L&DO, Bank etc., which was never done intime. The contract was never cancelled. There was no forfeiture clause in theagreement and money was also not refunded. This goes to show that theagreement was alive.

Submissions on behalf of the Defendants

40.Mr.SachinDatta,learnedSeniorCounselappearingfortheDefendants, submits that the Plaintiffs are guilty of breaching each andevery term of the agreement to sell. It is his submission that none of thepayments were made in time. In fact, part consideration of Rs.70,000/- wasnot paid at all. Only Rs.60,000/- was paid. Rs.10,000/- was received fromM/s. Vinod Industries and that the payment could not be towards the saleconsideration as M/s. Vinod Industries was tenant of the Defendants. Asper the agreement to sell, the Plaintiffs were to collect the rent from theground floor tenant, which was never done. The Plaintiffs were to take stepsto evict the ground floor tenant, which was also not done. So long as theground floor remained tenanted, the Plaintiffs were not interested inpurchasing the suit property. It was only when the tenant was evicted afterpayment of Rs.1.5 Lakhs was made to Mr. Deb’s wife by his client thatsuddenly enormous interest was shown by the Plaintiffs. The cause of action

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for filing of the suit, according to Mr. Datta, is totally cooked up.

41.Further, the Defendants have been made to litigate for the last almost30 years to evict M/s. Vinod Industries by filing an eviction petition. Date ofthe eviction decree was 26[th]April, 2018 and six months time was granted toM/s. Vinod Industries to vacate the suit property. No rent has been receivedfrom M/s. Vinod Industries for the last four decades. According to Mr.Datta, the dates for payment do not govern the computation of limitation.Under Section 54 of the Transfer of Property Act, since there is no saledeed, no ownership had passed. For there to be any sale, the elementsrequired under Section 55 of the Transfer of Property Act have to beestablished. He relied on judgements of the Supreme Court to argue that theview that time is not the essence of the contract in transaction for sale ofimmoveale property no longer holds good. He relied on the followingjudgements:

a) Ravinder Nath Sahni v. Poddar Construction (2014) 211 DLT 561;

b) Rahul Gupta & Anr. v. Ashok Biswal (2013) 197 DLT 461;

c) Sardamani Kandappan v. S. Rajlakshmi (2011) 12 SCC 18;

d) Fatehji & Company & Anr. v. L.M. Nagpal & Ors. (2015) 8 SCC309;309;

e) Chand Rani v. Kamal Rani (1993) 1 SCC 309;

f) K.S. Vidyanandam v. Vairavan (1997) 3 SCC 1;

g) D.S. Paravathamma v. Srinivasan (2003) 4 SCC 705;

h) Ravinder Singh Chauhan v. Wings Wear Pvt. Ltd. [Co. App.31/2012 decision dated 28[th]March, 2012 – Delhi High Court];31/2012 decision dated 28[th]March, 2012 – Delhi High Court];

i) Karan Madan & Ors. v. Nageshwar Pandey (2014) 6 HCC (Del)738;738;

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j) H.S. Basavaraj & Anr. v. Canara Bank & Anr. (2010) 10 SCC 115;

k) N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao & Ors. (1995) 5SCC 115;SCC 115;

l) Ved Prakash Kharbanda v. Vimal Bindal (2013) 198 DLT 555;

m) Nanjegowda & Anr. v. Gangamma & Ors. (2011) 13 SCC 232;n) Ahmad Sahab Abdul Mulla (2) Dead v. Bibijan & Ors. (2009);

Rejoinder submissions by the Plaintiffs

42.In rejoinder submissions, Mr. Sapra has highlighted the uniquefeatures of the agreement to sell, which are as under:

a) Upon payment of 40% of the sale consideration the Plaintiffs becamethe landlords of the suit property;the landlords of the suit property;

b) Power of Attorney was executed in favour of the Plaintiffs to evict thetenant from the Ground Floor;tenant from the Ground Floor;

c) The sale deed was to be executed by 31[st]March, 1975 but theinstallments were to be paid thereafter.installments were to be paid thereafter.

d) Three part payments were made to the tune of Rs.70,000/-.

e) Even if the monthly installments were not paid, the payment could bedeferred by levying interest @ 12% per annum between January toMay, 1976 and at @24% per annum thereafter.deferred by levying interest @ 12% per annum between January toMay, 1976 and at @24% per annum thereafter.

f) The Plaintiffs could have raised the remaining sale consideration bymortgaging the property immediately after execution of sale deed.mortgaging the property immediately after execution of sale deed.

43.According to him, this agreement to sell is different from an ordinaryagreement. In fact, the Defendants sought permission from the L&DO sevenmonths after the last payment was due, which itself shows that the time was

not of the essence of the contract.

44.Insofar as the relationship between M/s. Vinod Industries and Mrs.Suraj Kumari are concerned, the Plaintiffs are the 85% shareholders of M/s.Vinod Industries. On 5[th]August, 1993, the eviction petition was stayed andon 21[st]September, 1995 the Supreme Court had directed that no finaleviction order would be passed.However, if such order is passed, sixmonths’ time would be given for eviction.

Proceedings in the Appeal

45.Before going into the merits of the appeal, some further facts need tobe noticed. The present appeal, challenging the impugned judgment dated23[rd]December, 2015 passed by the Trial Court, was filed on 24[th]February,2016. On 31[st]March, 2016, it was recorded by the Court that the ownershave initiated proceedings under the Delhi Rent Control Act against M/s.Vinod Industries. Thus, an order to the following effect was passed:

“3.Having regard to the submissions made by thelearned counsel for the parties, I feel that the interestof the appellants shall be sufficiently protected in casethe respondents are restrained from creating any thirdparty interest in respect of the title and possession ofthe suit property.

4.So far as the eviction proceedings againstM/s. Vinod Industries Private Limited are concerned,they may continue; however, in the event of any decreeof eviction being passed against the said tenant, thesame shall not be executed without seeking permissionof this court. The aforesaid order shall operate till thenext date of hearing.”

46.The appeal has since been pending. On 21[st]May, 2018, an applicationwas moved on behalf of the Defendants/Respondents, being CM No.

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21290/2018. By this application permission was sought to execute theeviction decree. On 30[th]May, 2018, the hearing in the matter wascommenced, and both the parties consented that the main appeal itself beheard. The matter was heard, thereafter, from time to time, and judgmentwas reserved on 5[th]October, 2018.

Analysis & findings

47.The present case demonstrates how an extremely valuable property inSouth Delhi can remain entangled in litigation for period of four decades.48.Before going into the issues raised, it is important to set out theconditions contained in the agreement to sell:

“AGREEMENT TO SELL

THIS AGREEMENT entered into at New Delhi onthis 5[th]day of October 1974, between Shrimeti SurajKumari w/o Shri Charanji Lal R/o 57-Jorbagh, NewDelhi, hereinafter referred to as the vendor (whichexpression shall unless excluded by or repugnant to thecontext,meanandincludeherheirs,executors,administrators, legal representatives or assigns) of theOne Part and Smt. Urvashi Agarwal w/o Shri VinodChander Agarwal and Master Rajiv chander Agarwal& Master Sanjiv Chander Agarwal (both minors)through their father and guardian Shri Vinod ChanderAgarwal R/o 82-Jorbagh, New Delhi, hereinaftercollectively referred to as the purchaser (whichexpression shall unless excluded by or repugnant to thecontext, mean and include their heirs, executors,administrators, legal representatives & assigns) of theOther Part.

WHEREAS by an Indenture of Perperual Lease Deeddated 5th February 1954 registered as document No.1477 in Addl. Book No.1, Vol. No.245 on 2nd June1954 on pages 25 to 32 in the officer of the Sub-Registrar New Delhi. The President of India granted to

the Vendor Lease in perperuity in respect of the plotof land being plot No.82, Block No.172 in new Capitalof Delhi (Popularly now known as 82-Jorbagh, NewDelhi-3) containing by admeasurement 575 sqds. orthereabout and more particularly described in theschedule hereunder written:

On the North by Service RoadOn the South by Main RoadOn the East by Plot No.81On the West by approach Road

On the terms and conditions contained herein:

AND WHEREAS the Vendor has erected on the saidland building in accordance with the building plansduly sanctioned by the competent authority and put upthe same to the use for purpose permissible under theIndenture of Perpetual Lease.

AND WHEREAS the Vendor is desirous of transferringall her rights, title and interest in the aforesaid plotandthebuildingconstructedthereonandthepurchaser is anxious to purchase the same.

NOW THIS AGREEMENT WITNESSETH ANDPARTIES HERETOMUTUALLY AGREE AS FOLLOWS:

1. The Vendor will sell and the purchaser will buy thesaid land and buildings erected thereon alongwithexisting tenants but free from all other charges, liens,suits, litigations on ay account whatsoever at price ofRs.1,85,000/- (Rupees one lac, eighty-five thousandonly) payable as under:said land and buildings erected thereon alongwithexisting tenants but free from all other charges, liens,suits, litigations on ay account whatsoever at price ofRs.1,85,000/- (Rupees one lac, eighty-five thousandonly) payable as under:

a) First instalment of Rs.20,000/- at the time of signing ofthis agreement, the receipt whereof the vendor herebyacknowledges.this agreement, the receipt whereof the vendor herebyacknowledges.

b) Second instalment of Rs.50,000/- latest by 31st October1974.1974.

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c) Balance amount payable at the rate of Rs.7,000/- permonth beginning from Ist week of January 1975 till thewhole amount is paid.month beginning from Ist week of January 1975 till thewhole amount is paid.

2. No interest will be payable on the above deferredpayment schedule until December 1975. From January1976 simple interest at the rate of 12% per annumwill be payable calculated on the balance amount.Interest will be payable every month (beginning fromFebruary1976)alongwiththeinstalmentsofRs.7,000/- mentioned above. If all the payments as perabove mentioned schedule are not completed by May1976 then the rate of interest shall be increased from12% to 24% on the balance amount of the Sale Deed.payment schedule until December 1975. From January1976 simple interest at the rate of 12% per annumwill be payable calculated on the balance amount.Interest will be payable every month (beginning fromFebruary1976)alongwiththeinstalmentsofRs.7,000/- mentioned above. If all the payments as perabove mentioned schedule are not completed by May1976 then the rate of interest shall be increased from12% to 24% on the balance amount of the Sale Deed.

3. The ground floor is occupied by Shri A.C. Deb,Principal Cambridge School who is paying regularly arent of Rs.450/- per month. The first floor is occupiedby M/s Vinod Industries (P) Ltd. is also paying rentat the rate of Rs.500/- per month.Principal Cambridge School who is paying regularly arent of Rs.450/- per month. The first floor is occupiedby M/s Vinod Industries (P) Ltd. is also paying rentat the rate of Rs.500/- per month.

4. After the receipt of first two instalments of Rs.20,000/-& Rs.50,000/- mentioned above the Vendor shall not beentitled to received any rent from the tenants. All rentsthenceforth shall be received and retained by thePurchaser.& Rs.50,000/- mentioned above the Vendor shall not beentitled to received any rent from the tenants. All rentsthenceforth shall be received and retained by thePurchaser.

5. The Vendor shall be responsible for payment of housetax, ground rent and other outgoings, if any, in respectof the property till she enjoys the rents and from whenthe purchaser starts receiving rents as mentionedabove, the house tax, ground rent & all other outgoingshall be borne by the purchaser.tax, ground rent and other outgoings, if any, in respectof the property till she enjoys the rents and from whenthe purchaser starts receiving rents as mentionedabove, the house tax, ground rent & all other outgoingshall be borne by the purchaser.

6. Simultaneously with the execution of this agreement tosell, the Vendor shall execute the favour of thepurchaserapowerofattorneyauthorisingthepurchaser to deal in the name and on behalf of theVendor with the tenants and other departments forgetting the tenants evicted.sell, the Vendor shall execute the favour of thepurchaserapowerofattorneyauthorisingthepurchaser to deal in the name and on behalf of theVendor with the tenants and other departments forgetting the tenants evicted.

7. The property is at present mortgaged with New Bank ofIndia Ltd Rajinder Nagar Branch, New Delhi, againstwhich Bank Guarantee for business purpose aresecured.India Ltd Rajinder Nagar Branch, New Delhi, againstwhich Bank Guarantee for business purpose aresecured.

8. The Vendor shall seek permission to sell from the Land& Development Office well before the date of executionof sale Deed and all the unearned increase or anothercharges payable by the Vendor shall be paid by theVendor.& Development Office well before the date of executionof sale Deed and all the unearned increase or anothercharges payable by the Vendor shall be paid by theVendor.

9. The Vendor shall obtain the necessary permission inform 34A from I.T.O. for the purpose of completing thetransaction of sale in favour of the purchaser.form 34A from I.T.O. for the purpose of completing thetransaction of sale in favour of the purchaser.

10. The Sale Deed shall be executed before 31-3-1975. Ifthe Vendor fails to execute the sale deed, the purchasershall be entitled to get the property conveyed byspecific performance through Court.At the time ofexecution of the Sale Deed the property which is atpresent mortgaged with New Bank of India Ltd.Rajinder Nagar Branch, New Delhi shall be releasedand all original papers handed over to the purchaser.the Vendor fails to execute the sale deed, the purchasershall be entitled to get the property conveyed byspecific performance through Court.At the time ofexecution of the Sale Deed the property which is atpresent mortgaged with New Bank of India Ltd.Rajinder Nagar Branch, New Delhi shall be releasedand all original papers handed over to the purchaser.

11. The title deeds of the plot shall not be mortgaged bythe Purchaser to any Bank, financial Institution,person or any other entity until the Vendor is fully paidand except for the purpose of raising loans to repayonly the Vendor. After full payment of the property hasbeen made, the Purchaser is free to utilise the title-deeds in any manner they deem fit.the Purchaser to any Bank, financial Institution,person or any other entity until the Vendor is fully paidand except for the purpose of raising loans to repayonly the Vendor. After full payment of the property hasbeen made, the Purchaser is free to utilise the title-deeds in any manner they deem fit.

12. All expenses in connection with the stamp duty andregistration of the Sale Deed etc. will be borne by thepurchaser.registration of the Sale Deed etc. will be borne by thepurchaser.

13. The Sale Deed may be got executed by the Purchaseri their own names or in the name of their nominee andthe Vendor will not have any objection to this,i their own names or in the name of their nominee andthe Vendor will not have any objection to this,

IN WITNESS WHEREOF the parties have set theirrespective hands unto this agreement at New Delhi onthe day, month and year mentioned hereinabove.”

49.The agreement to sell itself is an admitted document and exhibited asEx.P-1. The sale transaction was for the entire property along with theexisting tenants. The total sale consideration was Rs.1.85 Lakhs. Receipt ofRs.20,000/- was acknowledged at the time of the execution of theagreement. Rs.50,000/- was to be paid by 31[st]October, 1974. Interest waspayable on the monthly instalments of Rs.7000/- as contained in clause 2.The purchasers were entitled to receive rent from the tenants on the groundfloor against whom they were to initiate eviction proceedings as per thePower of Attorney in favour of Mrs. Urvashi Aggarwal. Permission from theL&DO was to be sought by the sellers. The last date for execution of thesale deed was 31[st]March, 1975. If the sale deed was not executed by then,the purchasers could seek specific performance. The existing mortgage onthe property was to be released at the time of execution of the sale deed. Forthe purpose of repaying instalments alone, the purchasers could mortgagethe property after the sale deed was executed and the title deeds were handedto them.50.The terms and conditions in the agreement do demonstrate that thepayment of the entire sale consideration was not pre-condition forexecution of the sale deed. The outstanding balance sale consideration wasto be paid after the sale deed was executed. To this extent, the agreement tosell was out of the ordinary. The question is, however, as to whether theopen-endedness for payment of the instalments rendered the entireagreement to sell, as being open-ended.

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51.The agreement clearly specifies date for the execution of the saledeed i.e. 31[st]March, 1975. Consequences of non-execution of the sale deedare also specified. The execution of the sale deed was not contingent uponthe payment of the instalments. Thus, clearly, the date for execution of thesale deed was not open ended. This is where the conduct of the parties has abearing. The Plaintiffs’ witness PW2 i.e., the husband of Mrs. UrvashiAggarwal, has clearly admitted that no notice was ever issued by thePlaintiffs seeking execution of the sale deed. The case of the Plaintiffs, thatthey did not seek execution of the sale deed as the L&DO’s permission wasnot obtained, even if accepted, does not take the case of the Plaintiffsforward. This is because the Plaintiffs were well aware of the documentationfiled with the L&DO between 1974-1977, seeking permission to sell theproperty. There is not single letter or notice calling upon the Defendants orseeking to know the status of the L&DO approval. Presuming that theapproval from the L&DO was obtained in 1977, as has now been establishedon record by PW-1, this fact could not have been beyond the knowledge ofthe Plaintiffs. Mrs. Urvashi Aggarwal was executing documents includingaffidavits and signing forms to enable seeking permission the suit property.Two sets of documents signed by Mrs. Urvashi Aggarwal, available onrecord, are dated 20[th]November, 1974 (Ex.DW1/1) and 6[th]September, 1976(Ex.DW1/P1). Thus, as of September 1976, Mrs. Urvashi Aggarwal was inthe know that the permission from the L&DO was yet to be obtained. Evenif the date of 1976 is taken to be when the Plaintiffs felt that the L&DO’spermission was still pending, there ought to have been some documents ornotice or letter issued by the Plaintiffs after 1976 seeking to know the statusof the said approval by the L&DO. The Defendants have exhibited on record

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Ex.DW-1/1, an affidavit of Mrs. Urvashi Aggarwal dated 20[th]November,1974. The undertaking dated 14[th]July, 1977 (Ex.DW-1/5) signed by Mrs.Urvashi Aggarwal clearly shows that she was aware that Mrs. Suraj Kumarihad taken steps to clear all the breaches upto 14[th]July, 1977. Text of thesaid undertaking is set out below:

“That I am intending purchaser of House built on plotNo. 82 Block No.172, known as 82-Jorbagh, NewDelhi.That I understand that there are certainbreaches in the above-said premises and those havebeen got regularised by Smt. Suraj Kumari (presentlessee) upto 14-7-1977.

I hereby undertake to get these breaches regularisedbeyond that date for the period for which these wouldremain in existence.

I shall have no hesitation in making the payment at therates which will be fixed by Government from time totime.

I have clearly understood that the Ground Rent andother charges for breaches shall be accepted from mesubject to the compliance of the terms of thisundertaking.”

52.Thus, as of May, 1977, Mrs. Urvashi Aggarwal was well aware of thefact that the L&DO is likely to grant permission shortly. Admittedly, theL&DO granted permission on 10[th]October, 1977, which was valid for aperiod of 90 days. Considering that Mrs. Urvashi Aggarwal was well awareof her undertaking which was submitted on 14[th]July, 1977, the absence ofany letter, notice or any communication seeking to know the status of thesaid permission, clearly shows that the Plaintiffs were not seriously pursuingthe agreement to sell.

53.The other facts, which go to prove that the agreement to sell was not

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followed up and acted upon by the Plaintiffs are as under:

a) The rent from the ground floor tenant was not collected by thePlaintiffs.Plaintiffs.

b) The eviction proceedings to evict the ground floor tenant were notfiled by the Plaintiffs, though Power of Attorney was executedauthorizing them to do so;filed by the Plaintiffs, though Power of Attorney was executedauthorizing them to do so;

c) The entire follow up with the L&DO was being done by theowners, who were getting the documents executed from Mrs.Urvashi Aggarwalowners, who were getting the documents executed from Mrs.Urvashi Aggarwal

d) After the date for execution for sale deed had passed, no noticewas issued by the Plaintiffs, exhibiting their readiness andwillingness or enquiring the status of the permission from theL&DO.was issued by the Plaintiffs, exhibiting their readiness andwillingness or enquiring the status of the permission from theL&DO.

e) Even after execution of the undertaking dated 14[th]July, 1977, noenquiry was made by the Plaintiffs about the status of the L&DOapproval.enquiry was made by the Plaintiffs about the status of the L&DOapproval.

f) From 1977 till 1987 when the ground floor was vacated by thetenant, not single letter was written by the Plaintiffs to theDefendants seeking closure of the transaction.tenant, not single letter was written by the Plaintiffs to theDefendants seeking closure of the transaction.

54.All the above facts go to show that even if the period for countinglimitation is stretched, the same cannot be considered to run beyond 14[th]July, 1977 when the last undertaking was executed by the Plaintiffs for filingin the L&DO. Even if limitation is taken to run from 14[th]July, 1977, theperiod within which specific relief ought to have been sought, ends on 13[th]July, 1980.

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55.Going strictly by the agreement to sell, the fixed date for execution ofthe sale deed having been given in the agreement as 31[st]March, 1975, theperiod of limitation starts to run from the said date, as the remainingpayments had no relationship with the execution of the sale deed. Open-endedness for making the payment, as contended by the Plaintiffs, does notrender the agreement insofar as execution of the sale deed, open-ended. Theperiod of limitation, thus, has to be reckoned from 31[st]March, 1975 andlatest by 14[th]July, 1977 in any case. Either way, the suit is barred bylimitation as the suit was filed only on 23[rd]October, 1987. This is not casewhere there is continuing cause of action or recurring cause of action.The eviction of the tenant on the ground floor, which was the responsibilityof the Plaintiffs, cannot create cause of action in favour of the Plaintiffs,when admittedly they failed to act upon and behave as landlords would.56.Insofar as the payment of Rs.10,000/- is concerned, the said paymentwas to come from the Plaintiffs. However, the cheque for the same wasissued by M/s. Vinod Industries. The Plaintiffs argued that the amount ofRs.70,000/- was paid which included the amount of Rs.10,000/- paid byM/s. Vinod Industries.The Defendants argued that the said amount wasadjusted towards the rent. The said entity M/s. Vinod Industries was aseparate legal entity being company, which was tenant in its own right,of the owners. In fact, due to the stand taken by the Plaintiffs that M/s.Vinod Industries is separate legal entity, though the Plaintiffs weredirectors and shareholders of the said company, the owners have had tocommenceseparateevictionproceedingsagainstthem.Undersuchcircumstances, the payment made by M/s. Vinod Industries, cannot beconsidered to be payment made by the Plaintiffs as part of the saleRFA 100/2016Page 34 of 41

consideration for the suit property. Thus, the said amount of Rs.10,000/-cannot be given credit as being part of the sale consideration under theagreement to sell. Issue. No.1 and Issue no.4 are decided accordingly,against the Plaintiff and in favour of the Defendants.

57.The next issue is in respect of whether the Plaintiffs, in fact, haddemonstrated readiness and willingness or had abandoned the agreement tosell. The Plaintiffs have never demonstrated serious interest towards the suitproperty, so long as the tenant remained in occupation of the ground floor.However, they fought long and hard thereafter. The Plaintiffs, have been inlitigation for the last more than 30 years with the Defendants. Admittedly,the entire sale consideration of Rs.1.85 Lakh has not been paid. Even if it isconsidered that the monthly instalments of Rs.7,000/- could be paid withinterest in an open ended manner, the same cannot be held to continue inperpetuity. Submission of counsels for the Plaintiffs that even today thePlaintiffs are willing to pay the interest on the remaining sale considerationat the rate specified is not appealing to this Court. Stipulation in any contracthas to be viewed on reasonable basis and cannot be interpreted in favour ofone party in manner so as to render the consequences of the same into anabsurdity.

58.The remaining sale consideration of Rs.1.15 Lakhs or Rs.1.25 Lakhs(either way with or without Rs.10,000/-) has not been paid since 1975. Everyterm in contract has to be construed reasonably and if no time is specified,time has to be construed as `reasonable time’ under Section 46 of the IndianContract Act, 1872. What would be reasonable time in the present case?The said time could not have been beyond the period of three years after1975 and in any case cannot be beyond three years from 14[th]July, 1977

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when the last undertaking for the L&DO was executed by Mrs. UrvashiAggarwal. The instalments ought to have been paid by 1978 or latest by1980. The agreement to sell specified rate of interest @12% p.a. for blockof five months, from January to May, 1976 and thereafter @ 24% p.a. Thesaid period beyond 1976, cannot be an unending period. Consequences ofnon-execution of the sale deed being that the Plaintiffs had to seek specificrelief, means that time has to be construed as `reasonable time’. By anystandard, the sale consideration having not been paid, it is clear that thePlaintiffs had abandoned the agreement to sell, until 1987, and were notinterested in seeking specific performance.

59.Moreover, the stand that the Plaintiffs were in proprietary possession,is defeated from the conduct of the Plaintiffs i.e. that they never exercisedthe alleged proprietary rights which were granted under the agreement.Section 53A of the Transfer of Property Act does not come to the aid of thePlaintiffs as they were never put in possession of the suit property. Theyremained in possession as Directors/shareholders of M/s. Vinod Industriesagainst whom eviction proceedings was initiated. The Defendants have dulyexercised their rights as the owners of the suit property by taking steps toevict the ground floor tenant, and thereafter, by pursuing till date an evictionpetition against M/s. Vinod Industries.

60.In order for Section 53A of the Transfer of Property Act to come tothe aid of the Plaintiffs, there ought to have been some document putting thePlaintiffs in possession under the agreement to sell. Such document doesnot exist. Insofar as Section 55(4)(b) of the Transfer of Property Act isconcerned, this provision would apply only when the ownership of theproperty has passed to the buyer. The only manner in which transfer of

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ownership can take place under Section 54 of Transfer of Property Act is bymeans of sale. This provision could have protected the Plaintiffs, if the saledeed has been executed and part consideration was paid and only someconsideration was remaining. However, in the present case, no sale deed wasexecuted. What was executed was only an agreement to sell. bare readingof Sections 54 and 55(4)(b) of the Transfer of Property Act clarifies thisposition.

61.Mr. Bhushan has vehemently urged before the Court that the oraltestimony of the Plaintiffs’ witness ought to be accepted as Mr. Sushil Ansaldid not appear in the witness box. Present is case where the transaction isin the form of written document. If any amendments were to be made tothe same, there had to be some documents in writing. The Plaintiffs couldnot have simply relied upon some oral assurances alleged to have been givenby one of the sons of Mrs. Suraj Kumari to the following effect:

a) That no part of the balance consideration was to be paid;

b) That contract was interlinked with sale of Faridabad property, thestatus of which is unknownstatus of which is unknown

c) That no rent needs to be paid by M/s. Vinod Industries.

d) That there was no time limit for payment of balance consideration.

62.All these inferences cannot be drawn merely on the basis of oraltestimony in the absence of written document. In any event, the Plaintiffsbeing legally well-advised, could not have simply relied on oral assurancesand wait for more than 10 years to seek specific relief. The cause of action,insofar as the Plaintiffs are concerned, for execution of the sale deed arisesin 1977 when undertaking was executed for the L&DO by Mrs. Urvashi

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Aggarwal and the L&DO granted permission in 1977. Execution of the saledeed did not depend on any other factor. Thus, the cause of action hadclearly arisen in 1977. The non-appearance of Mr. Sushil Ansal as witnesscannot lead to situation of adverse inference being drawn, as this is casebased on written documents and not on oral testimony.

63.Insofar as readiness and willingness is concerned, the Plaintiffsbelonged to well to do family. However, there is no notice orcommunication from their side expressing readiness and willingness.

64.It is submitted that the market value of the property as on date, even asper the circle rates, is around Rs.35 Crores. It is further submitted by Ld. SeniorCounsel for the Plaintiff that, considering the time that has elapsed, the grant ofspecific performance being discretionary remedy, the market rate would haveto be kept in mind as there would be windfall to the Defendants, for aproperty which has been in the part occupation of the Plaintiffs since 1958.

65.The doctrine that time is not the essence of the contract of specificperformance, has since undergone sea change., This is settled in SaradamaniKandappan v. S. Rajalakshmi & Ors. (2011) 12 SCC 18 (hereinafter,‘Saradamani Kandappan’) which is later in point of time than the judgmentsrelied upon by the Appellants/Plaintiffs. On this question, the Supreme Courtobserved as under:

“36. The principle that time is not of the essence ofcontracts relating to immovable properties took shape inan era when market values of immovable properties werestable and did not undergo any marked change even overa few years (followed mechanically, even when valueceased to be stable). As consequence, time forperformance, stipulated in the agreement was assumed tobe not material, or at all events considered as merelyindicating the reasonable period within which contract

should be performed. The assumption was that grant ofspecific performance would not prejudice the vendordefendant financially as there would not be muchdifference in the market value of the property even if thecontract was performed after few months. Thisprinciple made sense during the first half of the twentiethcentury,whenthere wascomparativelyverylittleinflation, in India. The third quarter of the twentiethcentury saw very slow but steady increase in prices.But drastic change occurred from the beginning of thelast quarter of the twentieth century. There has been agalloping inflation and prices of immovable propertieshave increased steeply, by leaps and bounds. Marketvalues of properties are no longer stable or steady. Wecan take judicial notice of the comparative purchasepower of rupee in the year 1975 and now, as also thesteep increase in the value of the immovable propertiesbetween then and now. It is no exaggeration to say thatproperties in cities, worth lakh or so in or about 1975to 1980, may cost crore or more now.37. The reality arising from this economic change cannotcontinue to be ignored in deciding cases relating tospecific performance. The steep increase in prices is acircumstance which makes it inequitable to grant therelief of specific performance where the purchaser doesnot take steps to complete the sale within the agreedperiod, and the vendor has not been responsible for any-delay or nonperformance. purchaser can no longertake shelter under the principle that time is not ofessenceinperformanceofcontractsrelatingtoimmovableproperty,tocoverhisdelays,laches,“”breaches and non-readiness. The precedents from anera, when high inflation was unknown, holding that timeis not of the essence of the contract in regard toimmovable properties, may no longer apply,not becausethe principle laid down therein is unsound or erroneous,but the circumstances that existed when the saidprinciple was evolved, no longer exist. In these days ofgalloping increases in prices of immovable properties, tohold that vendor who took an earnest money of say

about 10% of the sale price and agreed for three monthsor four months as the period for performance, did notintend that time should be the essence, will be crueljoke on him, and will result in injustice. Adding to themisery is the delay in disposal of cases relating tospecific performance, as suits and appeals therefromroutinely take two to three decades to attain finality. As aresult, an owner agreeing to sell property for rupeesone lakh and received rupees ten thousand as advancemay be required to execute sale deed quarter centurylater by receiving the remaining rupees ninety thousand,when the property value has risen to crore of rupees.”

66.The present suit for specific performance was filed in 1987, recordalof evidence was completed in 2010 and the judgment of the trial court wasrendered in 2015 i.e., after period of 28 years. The facts in this case fall inthe ratio of the above judgment, which holds that while granting specificperformance, the steep rise in the market rates of properties ought to be keptin mind, especially when litigation has been pending for more than 30 yearsand the agreement to sell is more than 40 years old.

67.Further, while granting discretionary remedy, equities on both sideswould have to be balanced. Admittedly, the Plaintiffs have been inoccupation of the property since 1958, i.e., for more than 60 years. The onlysums that they have paid are monthly amounts of Rs.500/- till January, 1975and the sum of Rs.60,000/-. Thus, total sum paid by the Plaintiffs is onlyRs.60,000/- under the agreement to sell dated 5[th]October, 1974 andRs.1,12,000/- as rentals, by M/s Vinod Industries for the entire period from1958 till 1976. No other payments have been made by the Plaintiffs. Grantof specific performance in such case would not only be inequitable, but alsoresult in travesty of justice. The market value of the property is more thanRs. 35 crores, even as per the Plaintiffs. Considering that the market price of

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the property, specific relief being discretionary remedy, the Court ought tosee the conduct of the parties, and their adherence to the terms andconditions of the agreements. The Plaintiffs are in serious breach of severalterms of the agreement and are not entitled to the relief of specificperformance. The suit is also barred by limitation. The relief of specificperformance and other reliefs sought are liable to be denied. Remainingissues are decided accordingly.

68.The sum of Rs.60,000/- paid by the Plaintiffs to the Defendants ishowever liable to be refunded along with simple interest @ 24% per annum,which is the interest rate stipulated as per clause 2 in the agreement to sell,within period of four weeks from today. The interest shall be payable from31[st]January, 1975 which is the date of payment of Rs.40,000/-.

69.The Respondents are free to execute the decree for eviction againstM/s. Vinod Industries in accordance with law. The Trial Court judgment is,accordingly, affirmed in the above terms.

70.The appeal is dismissed. All pending applications are disposed of. Inthe facts there shall be no order as to costs.

NOVEMBER 12, 2018/dk

PRATHIBA M. SINGH, J.JUDGE