Dismissed

Air Marshal Shiv Dev Singh Thr v. Swadesh Bhardwaj

Delhi HC3 Sept 2012RFA/84/2007

Case brief

AI extract

What is this about?

Two appeals challenging a judgment decreeing specific performance of an 1984 Agreement of Sale. The court held that a subsequent decision dispensing with unearned increase dues removed the impossibility of performance, rejecting the claim to cancel the agreement.

What did the court decide?

Dismissed both appeals and the pending application without imposing costs.

Air Marshal Shiv Dev Singh Thr Vs Swadesh Bhardwaj — Specific Performance | Delhi HC (2012)

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

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Reserved on: August 23, 2012 Pronounced on: September 03, 2012

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(i) RFA No. 82/2007 & C.M. No. 2011/2007 AIR MARSHAL SHIV DEV SINGH ..... Appellant Through: Mr.Rajive Sawhney, Senior Advocate with Mr.Vineet Jhanji, Advocate

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versus

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SWADESH BHARDWAJ ..... Respondent Through: Mr.Kailash Vasudev, Senior Advocate with Mr.K.B.Rohtagi, Ms.Aparna Rohtagi Jain, Mr.Mahesh Kasana, Advocates + (ii) RFA No. 84/2007 AIR MARSHAL SHIV DEV SINGH ..... Appellant Through: Mr.Rajive Sawhney, Senior Advocate with Mr.Vineet Jhanji, Advocate

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versus

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SWADESH BHARDWAJ ..... Respondent Through: Mr.Kailash Vasudev, Senior Advocate with Mr.K.B.Rohtagi, Ms.Aparna Rohtagi Jain, Mr.Mahesh Kasana, Advocates

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CORAM: HON'BLE MR. JUSTICE SUNIL GAUR

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JUDGMENT

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The above titled two appeals assail common impugned judgment of 17^th October, 2006 vide which appellant's suit for possession and mesne profits stands dismissed whereas,

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RFA Nos. 82 & 84 of 2007

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Page 1 of 7

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respondent's counter claim for specific performance of Agreement of Sale of 23^rd January, 1984 stands decreed. Since the arguments addressed by both the sides in the above titled two appeals were the same, therefore, by this common judgment, the above titled two appeals are being disposed of.

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Appellant vide Agreement of sale of 23^rd January, 1984 had agreed to sell his leasehold residential premises, i.e, D-1/53, Vasant Vihar, New Delhi ( henceforth referred to as the subject premises ) to the respondent for a consideration of 14 lacs only, out of which sum of 13 lacs only was received by appellant from respondent and upon obtaining of requisite permission from the authorities concerned to transfer the leasehold rights in the subject premises, respondent was to pay the balance sale consideration of Rupees one lac only and to also pay the unearned increase of `8 lacs only or any such amount as determined by the DDA.

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At the time of execution of Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1), possession of the subject premises was handed over by appellant to respondent. Vide communication of 3^rd June, 1987, DDA had informed appellant that the unearned increase payable was `15,28,556/- and next very day, appellant had called upon respondent orally as well as vide letter of 4^th June, 1987 to pay unearned increase. Since aforesaid dues were not cleared, therefore, DDA vide its communication of 27^th November, 1987 (Ex.PW-1/2) had informed appellant that permission for transfer stood revoked. Aforesaid demand of unearned increase by DDA was challenged by the respondent by way of C.W. No.3846/1990, in which there was no interim order staying the impugned demand.

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As respondent was not willing to pay the unearned increase

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RFA Nos. 82 & 84 of 2007

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Page 2 of 7

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as demanded by the DDA and so, appellant vide notice of 24^th January, 1988 (Annexure A-11), terminated the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1) as fresh period for completion of the sale transaction stipulated by the appellant vide letter of 17^th May, 1988 (Ex.P-8) stood expired, thus, suit for possession of the subject premises alongwith claim of mesne profits was filed by appellant before the Trial Court. Respondent in her written statement to the suit of appellant had raised a counter claim for specific performance of Agreement of sale of 23^rd January, 1984 (Ex.DW1/1). During the pendency of suit before the Trial Court, the verdict returned in CW No.3846/1990 on 20^th October, 2003, in respect of the unearned increase was that it was a non-issue, thus not payable and conversion of the leasehold rights into freehold in respect of the subject premises were to await the outcome of this Civil Suit.

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The parties had led their evidence before the Trial Court and thereafter, finding returned vide impugned judgment of 17^th October, 2006 is that respondent is entitled to specific performance of Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1) as there was no violation of the Agreement in question by either side and the delay in its specific performance was due to exorbitant unearned increase demanded by DDA and since the requirement of payment of unearned increase has been dispensed with by virtue of the decision in CW No.3846/1990, so upon payment of the balance sale consideration of Rupees one lac only and on payment of charges for conversion of the subject premises from leasehold to freehold, the Agreement in question be performed.

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The challenge laid to the impugned judgment by learned senior counsel for appellant is on the premise that Agreement of

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RFA Nos. 82 & 84 of 2007

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Page 3 of 7

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sale of 23^rd January, 1984 (Ex.DW-1/1) became unenforceable as respondent had refused to pay the unearned increase, without which permission for sale of the subject premises could not be obtained and so, appellant is entitled to recover possession of the subject premises and the mesne profits as claimed.

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Senior counsel for appellant had drawn the attention of this Court to Section 39 of the Indian Contract Act, 1872, and to the decisions in K.Narendra vs. Riviera Apartments (P) Ltd., (1999) 5 SCC 77; Nirmala Anand vs. Advent Corp.(P) Ltd. & ors. , (2002) 5 SCC 481; and Dayal Singh vs. Collector of Stamps , AIR (1972) Delhi 131, to contend that appellant was entitled to cancel the agreement in question, as it was impossible for appellant to have obtained the requisite permission from DDA on account of respondent defaulting in paying the unearned increase.

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While relying upon the decision in Manjunath Anandappa vs. Tammanasa and ors., (2003) 10 SCC 390, it was contended that the respondent had failed to prove that she had means to pay the balance sale consideration and as per the dictum in N.P.Thirugnanam (D) by Lrs vs. Dr.R.Jaganmohan Rao & ors., JT 1995 (5) SC 553; M.Meenakshi and ors. Vs. Metadin Agarwal (D) & ors., (2006) 7 SCC 470, readiness and willingness to perform the agreement has to be proved but respondent's willingness to perform her part of the agreement does not stand proved. The decision in Rambhau Namdeo Gajre vs. Narayan Bapuji Dhotra (D), (2004) 8 SCC 614 was relied upon by appellant's counsel to assert that doctrine of part performance could not be invoked in favour of the respondent who had not paid the unearned increase.

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Finally, reliance was placed on behalf of the appellant upon

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RFA Nos. 82 & 84 of 2007

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Page 4 of 7

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decisions in N.P.Thirugnanam (D) by lrs vs. Dr.R.Jaganmohan Rao & ors., JT 1995 (5) SC 553; Aasman Investments vs. Shri K.L.Suneja & Anr, 2011(181) DLT 156; Boots Pharmaceuticals Ltd. Vs. Rajinder Mohindra, 177(2011) DLT 260; J.L.Gugnani (HUF) vs. O.P.Arora & Ors., (2011) IX AD (Delhi); Spring Valley Finance vs. Smt. Prakash Kaur, 148(2008) DLT 767; and Ravi Sood & anr vs. Veer Bala Sharma, 71(1998) DLT 254, to contend that the ingredients of Section 20 of the Specific Relief Act, 1963 have to be satisfied before specific performance of sale agreement can be ordered and in the instant case, there was clear lack of willingness on the part of respondent to pay the unearned increase, thereby frustrating the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1). Thus, it was vehemently urged by learned senior counsel for the appellant that the impugned judgment of 17^th October, 2006 deserves to be set aside and the suit of appellant ought to be decreed and the counter claim of respondent be dismissed.

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Submission of senior counsel for the respondent is that appellant had supported the respondent in questioning the quantum of unearned increase and so, there is no question of the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1) being frustrated on account of non-payment of unearned increase as the same was subject matter of challenge before the court of law.

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It is seriously disputed by learned senior counsel for the respondent that there was lack of willingness and readiness to pay the balance sale consideration as it was to be paid after the appellant had obtained the sale permission in respect of the subject premises and the decision in CW No.3846/1990 facilitates the

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RFA Nos. 82 & 84 of 2007 Page 5 of 7

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specific performance of the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1), as payment of conversion charges was never an issue and the decisions relied upon on behalf of appellant have no application to the facts of instant case. While relying upon the decision in Janaki Vashdeo Bhojwani and anr vs. Indusind Bank, (2005) 2 SCC 217; Man Kaur (Dead) by LRs vs. Hartar Singh Sangha, JT 2010 (10) SC 565, it was contended that respondent being in possession of the subject premises in part performance of the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1) is entitled to its specific performance as there was a specific covenant in the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1) entitling respondent to get the specific performance of this agreement and time was never the essence of the agreement in question. Thus, it is submitted on behalf of the respondent that there is no substance in these appeals, which merit outright dismissal.

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Having considered the submissions advanced, the record of this case and the decisions cited, this court finds that when appellant had filed the suit, there was some substance in it as DDA was demanding the unearned increase from appellant but due to supervening circumstance of onerous condition of payment of unearned increase being lifted by virtue of the decision in CW No.3846/1990, it cannot be said that the justification to terminate the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1) remains and infact it provides a cause for ensuring that the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1) is performed by the parties upon payment of balance sale consideration of Rupees one lac and the requisite charges as ordered by the Trial Court.

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In the aforesaid view of this matter, I do not find any

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RFA Nos. 82 & 84 of 2007

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Page 6 of 7

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substance in the contentions raised on behalf of appellant in the face of the evidence on record, which remains unassailable and so, the decisions relied upon by the appellant are of no avail, as the decision in CW No.3846/1990 takes out the wind from the sails of the appellant, requiring specific performance of the Agreement of sale of 23^rd January, 1984 (Ex.DW-1/1).

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Finding no illegality or infirmity in the impugned judgment of 17^th October, 2006, I dismiss both the appeals and the pending application while refraining to impose costs.

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(SUNIL GAUR) Judge

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September 03, 2012

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pkb/rs

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RFA Nos. 82 & 84 of 2007

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Page 7 of 7

Air Marshal Shiv Dev Singh Thr v. Swadesh Bhardwaj

Case brief

What is this about?

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Air Marshal Shiv Dev Singh Thr v. Swadesh Bhardwaj

Case brief

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