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Ashwini Kumar Verma vs A.K.Tandon & Ors. on 14 August, 2014

Delhi High Court Ashwini Kumar Verma vs A.K.Tandon & Ors. on 14 August, 2014Author: Pradeep Nandrajog

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment Reserved on: August 04, 2014 Judgment Delivered on: August 14, 2014

+ RFA (OS) 87/2014

ASHWINI KUMAR VERMA ….. Appellant Represented by: Mr.Arvind Kumar Nigam,

Sr.Advocate instructed by Mr.Harsh

Prabhakar and Ms.Anjana Prabhakar,

Advocates

versus

A.K.TANDON & ORS. ….. Respondents Represented by: Mr.Manav Gupta, Advocate with

Ms.Esha Dutta, Advocate

CORAM:

HON’BLE MR. JUSTICE PRADEEP NANDRAJOG

HON’BLE MS. JUSTICE MUKTA GUPTA

PRADEEP NANDRAJOG, J.

1. Ashwani Kumar Verma is an Executive with M/s. Duncans Industries. He took on rent Flat No.39, Mandakini Enclave, Alakhnanda from A.K.Tandon. He seeks specific performance of an oral agreement to sell pleading that the agreed sale consideration was `35,00,000/- out of which he paid `5,00,000/- as earnest money-cum-part sale consideration. As per him he took a loan from HSBC Bank to finance the purchase of the flat. He claims that he spent `40,000/- to renovate the flat. He claims that after receiving `5,00,000/-, through his son Vijay Tandon, A.K.Tandon resiled from the agreement and sent a communication to him that he had forfeited the amount of `5,00,000/-. Pleading readiness and willingness to pay the

RFA(OS) No.87/2014 Page 1 of 15 sale consideration and alleging default by A.K.Tandon, the suit was filed.

2. In the written statement A.K.Tandon pleads that Ashwani Kumar Verma was in default. He disputes the sale consideration being `35,00,000/- and claims the same to be `61,00,000/-.

3. On the pleadings of the parties issues were settled on February 22, 2011 as under:-

“(i) Whether there is a valid and binding agreement to sell dated 15th June, 2006 between the parties?

(ii) If issue No.1 is answered in favour of the plaintiff, then whether the plaintiff was ready, willing and able to perform the agreement to sell dated 15th June, 2006? OPP

(iii) Whether the plaintiff is in breach of the agreement dated 15th June, 2006? OPD

(iv) Whether the plaintiff is entitled to specific performance of an agreement to sell dated 15th June, 2006? OPD

(v) Relief.”

4. A.K.Tandon was of the opinion that an issue concerning the very maintainability of the suit was required to be settled and thus he filed IA No.6818/2014 invoking Order 14 Rule 5 of the Code of Civil Procedure. He wanted an additional issue to be settled as under:-

“Whether the suit for specific performance is maintainable in light of the legal notice dated 05.07.2006 and rejoinder dated 17.08.2006 sent by the plaintiff.”

5. Pithily stated, on July 05, 2006 Ashwani Kumar Verma through his counsel had sent a legal notice to A.K.Tandon in which he referred to the oral agreement to sell between the parties and the agreed sale consideration

RFA(OS) No.87/2014 Page 2 of 15 being `35,00,000/- out of which he claimed to have paid `5,00,000/-. He stated in the notice that he had taken a personal loan from HSBC Bank. He raised the grievance that A.K.Tandon had resiled from the contract. He demanded return of `5,00,000/- with interest @ 18% per annum as also damages in sum of `20,000/- for causing harassment to him. A.K.Tandon did not respond to the notice but sent a notice of eviction dated July 27, 2006 to M/s. Duncans Industries Ltd. claiming that he had let out the flat to the company. Ashwani Kumar Sharma sent a response with reference to the said notice on August 17, 2006 in which he reiterated the demand raised by him in the notice dated July 05, 2006.

6. The exchange of correspondence being an admitted fact, vide impugned order dated April 16, 2014 the learned Single Judge has dismissed the suit seeking specific performance filed by Ashwani Kumar Sharma, holding that in view of the stand taken by him in the two notices dated July 05, 2006 and August 17, 2006 he was not entitled to specific performance because by demanding return of `5,00,000/- paid towards part sale consideration he had conveyed his not being ready and willing to perform his obligations under the contract.

7. The issue which arises for consideration in the appeal is : Whether a party under an agreement to sell on conveying an intention not to proceed ahead with the agreement can seek specific performance of the agreement? And this question would subsume the issue : Whether it would be a case where the party concerned has conclusively established by its conduct its non-readiness and non-willingness to complete the transaction.

8. It does happen that when parties find themselves in a awkward position after they have entered into a contract, they take positions which are

RFA(OS) No.87/2014 Page 3 of 15 merely leverage and no more or to put it differently to gain a technical advantage. It may also happen that a party wants to expedite itself from the sticky situation provided the other party is willing to cooperate. If the reciprocal cooperation is not extended, the offer made by the party to withdraw the extended hand may be withdrawn. It would then become a matter of fact to be determined after evidence is led as to what was the intention of the party for the reason abandonment of a right has to be proved by cogent evidence.

9. The nearest to the facts of the instant case is the judgment of the Calcutta High Court reported as 44 C.W.N. 541 Calcutta Improvement Trust Vs. Surbarnabala Dehi. The judgment was authored by the legendary Justice Ameer Ali and was delivered in the year 1938 after comprehensively reviewing the law on the subject and taking into consideration the pronouncements of the Privy Council and the English Authorities.

10. For the purpose of our discussion, it would be relevant to notice the facts of the case in some detail. The said case was a suit for specific performance filed before the Calcutta High Court in its Original Civil Jurisdiction by a vendor against a purchaser.

11. As facts of the case reveal, the parties to the suit had a chequered history, inasmuch as the purchaser had previously entered into a contract for the purchase of land from the vendor and had failed to discharge her share of obligations and had consequently suffered forfeiture of the sum of `8,000/- (Rupees Eight Thousand only) deposited as earnest money. However, in September, 1933 the purchaser entered into a fresh agreement by which she agreed to purchase another plot from the vendor corporation, provided the sum forfeited was realised and utilized for her benefit in the new transaction.

RFA(OS) No.87/2014 Page 4 of 15 The arrangement was embodied in a letter to the vendor corporation, which was in the form of an offer and came to be accepted by the corporation on September 13, 1933. The decision to accept the said arrangement was further ratified by the Board of the corporation on October 14, 1933.

12. By virtue of the fact that the purchaser had already defaulted in the previous contract, a stipulation was made that the purchaser would pay 50% of the estimated purchase price in cash within a period of seven days and the previously forfeited sum of `8,000/- (Rupees Eight Thousand only) would be adjusted in this amount. Facts reveal that on January 09, 1934, the husband of the purchaser addressed a letter to the vendor corporation raising a grievance that despite having made payment amounting to `20,000/- (Rupees Twenty Thousand only), no benefit had accrued in their favour. This letter was not answered and thereafter on January 23, 1934 another communication was addressed by the husband of the purchaser to the vendor corporation seeking interest at the rate of 7% per annum on the money deposited from the date of payment. On January 26, 1934 the vendor corporation addressed a letter to the purchaser and explained the circumstances leading to the delay. On February 23, 1934 the Estate Manager of the vendor corporation notified the date of call as March 12.

13. It would be relevant to highlight that the area had been measured and duly verified in the presence of the purchaser’s agent, and a balance sum of

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