Delhi District Court
Surinder Pal Singh And Anr vs Gurdeep Singh on 23 May, 2025
IN THE COURT OF SH. NARESH KUMAR MALHOTRA :
DISTRICT JUDGE (COMMERCIAL)-06
TIS HAZARI COURTS, WEST: DELHI
CS (COMM) No. 567/2024
CNR No. DLWT010054702024
23.05.2025
1. Sh. Surinder Pal Singh
S/o late Sd Dharam Singh Bindra,
R/o BD/81, Janak Puri,
New Delhi-110058
2. Sh. Jaspal Singh,
S/o Late Sd Dharam Singh Bindra
R/o WZ-28, Upper Ground Floor, Gali No. 2
Shiv Nagar, Janak Puri,
New Delhi-110058.
Also at:
Shop No. 3, Property No. 16/28,
A & B, Tilak Nagar,
New Delhi-110018.
.....Plaintiffs.
Vs.
Sh. Gurdeep Singh,
S/o Late S Harnam Singh,
R/o 16/28A, Tilak Nagar,
New Delhi-110018.
....Defendant.
Date of filing : 24.06.2024
Date of arguments : 23.05.2025
Date of judgment : 23.05.2025
SUIT FOR SPECIFIC PERFORMANCE, PERPETUAL &
MANDATORY INJUNCTION IN THE ALTERNATIVE
RECOVERY OF Rs. 53,00,000/-.
JUDGMENT:
1. Vide this judgment, I am deciding the suit for specific
performance, perpetual & mandatory injunction in the alternative
CS (Comm.) No. 567/2024 -1-
recovery of Rs. 53,00,000/- filed by the plaintiffs against the
defendant.
2. In the plaint, it is mentioned that the plaintiffs before filing
the present suit have approached Ld. Secretary, DLSA (West) for
mediation but defendant did not appear for Pre-institution
Mediation proceedings on 30.03.2024 & 26.04.2024 and non-
starter report was issued by Ld. Secretary, DLSA (West). It is
mentioned that the plaintiffs are joint tenants and in the physical
possession of built up Shop No. 3, Ground Floor, in property
bearing No. 16/28 A & B, Tilak Nagar, new Delhi-110018
measuring 14.3′ x 20.4′ feet (hereinafter will be referred as suit
property) and running their business under the name and style of
“Royal Steel Center” vide rent agreement dated 16.01.1991. On
06.11.2021, pursuant to an oral understanding for sale and
purchase of the suit property between the parties, the plaintiffs
jointly paid a sum of Rs 1,00,000.00 (Rs. one lakh only) to the
defendant as part of Advance/Earnest/Bayana vide Cheque No.
794751, Drawn on Indian Bank, Tilak Nagar, New Delhi-110018.
In continuation of the earlier oral understanding, an Agreement to
Sell & Purchase dt. 17.12.21 was entered between the parties in
respect of the suit property for a sale consideration of Rs.
1,40,00,000/- (Rs. One crore forty lakhs only). The plaintiffs paid
an earnest money of Rs. 10,00,000.00 (Rs ten lakhs only) and on
06.11.21 had already jointly paid a sum of Rs1,00,000/- prior to
execution of the said Agreement to Sell dated 17.12.21. The
plaintiffs paid the second installment of the earnest money of Rs.
9,00,000/- (Rs. nine lakhs only) at the time of signing of the said
Agreement to Sell vide two different cheques bearing No.
CS (Comm.) No. 567/2024 -2-
853128 & 794752, both dated13.12.21, drawn on Indian Bank,
Tilak Nagar, New Delhi-110018 and in the sum of Rs. 5,00,000/-
and Rs. 4,00,000/- respectively. It is mentioned that as per
Clause 3 of the said Agreement to Sell the balance sale
consideration of Rs. 1,30,00,000/- (Rs. One crore thirty lakhs
only) was payable on or before 28.02.22 at the time of execution
of the Sale Deed by defendant in favour of plaintiffs before the
Sub Registrar concern. Clause-3 of the agreement which reads as
under:-
“3. That the balance sale consideration of Rs
1,30,00,000.00 (Rs. One crore thirty lakhs only) shall be paid by
the Second Party (plaintiffs) to the First Party (defendant) on or
before 28.02.22 and at the time of registration of the sale deed for
the Demised Shop before the Sub-Registrar concerned by the
First Party (defendant) in favour of the Second Party (plaintiffs)
without fail or any hesitation and/or after the conversion of the
said property from Leasehold to Freehold by the first party at his
own expenses.”
The plaintiffs have further mentioned that the balance sale
consideration was payable by plaintiffs, subject to fulfillment of
the legal obligation cast upon the defendant by virtue of Clause
4 of the said Agreement to Sell and Purchase dated 07.12.2021
which reads as under:-
“4. That it is sole responsibility of the First Party
(defendant) to get the said property, including the Demised Shop,
from Leasehold to Freehold at his own expenses and indeed it
has to be completed before the execution of the sale deed by the
First Party (defendant) in favour of the Second Party (plaintiffs)
on receipt of the balance consideration”.
CS (Comm.) No. 567/2024 -3-
The plaintiffs have further averred that defendant
miserably failed to get the suit property converted to Freehold
before or by the date of conclusion of the contract i.e.
28.02.2022. Though, defendant made various hollow promises to
get the suit property converted soon and took Rs. 1,20,000/- vide
cash on 15.02.2022, Rs. 30,000/- vide cash on 26.02.2022, Rs.
2,00,000/- vide cash on 22.03.2022 and Rs. 2,00,000/- vide
cheque bearing no. 794754 dated 24.03.2022 drawn on Indian
Bank, Tilak Nagar, New Delhi-110018 from plaintiffs and
acknowledged the same in writing. The plaintiffs have further
averred that defendant has extracted a sum of Rs. 26,50,000/-
(Rs. Twenty six lakhs fifty thousand only) out of the total sale
consideration of Rs. 1,40,00,000/- (Rs. One crore forty lakhs
only) in the following manner:-
S. No. Particulars Amount (Rs)
1. Cheque No. 794751 dated 06.11.2021 1,00,000/-
drawn on Indian Bank, Tilak Nagar, New
Delhi-110018
2. Cheque No. 853128 dated 13.12.2021 5,00,000/-
drawn on Indian Bank, Tilak Nagar, New
Delhi-110018
3. Cheuqe No. 794752 dated 13.12.2021 4,00,000/-
drawn on Indian Bank, Tilak Nagar, New
Delhi-110018
4. Vide cash on 05.01.2022 6,00,000/-
5. Cheque No. 794753 dated 04.01.2022 2,50,000/-
drawn on Indian Bank, Tilak Nagar, New
Delhi-110018
6. Cheque No. 853127 dated 04.01.2022 2,50,000/-
drawn on Indian Bank, Tilak Nagar, New
Delhi-110018
7. Vide cash on 15.02.2022 1,20,000/-
8. Vide cash on 26.02.2022 30,000/-
9. Vide cash on 22.03.2022 2,00,000/-
10. Cheque No. 794754 dated 24.03.2022, 2,00,000/-
CS (Comm.) No. 567/2024 -4-
drawn on Indian Bank, Tilak Nagar, New
Delhi-110018
Total 26,50,000/-
The defendant after receiving the amount of Rs.
26,50,000/-, which is almost 19% of the sale consideration,
escaped his liability and through his counsel sent a frivolous
notice dated 27.06.2023 to which plaintiffs through their counsel,
sent reply dated 05.07.2023. The plaintiffs have further averred
that defendant is having criminal bend of mind & antecedents, a
fraudster and has duped series of people of their hard earned
money resulting into series of litigation. As per the plaintiffs,
defendant has no right to unilaterally revoke the aforementioned
agreement. The plaintiffs were always ready and willing to
perform the essential terms of the contract and can pay the
balance sale consideration within a week of the conversion of the
suit property from Leasehold to Freehold. It is prayed by the
plaintiffs to pass a decree for specific performance in favour of
the plaintiffs and against the defendant thereby directing the
defendant to perform his part of obligation under Agreement to
Sell dated 17.12.2021 by getting the suit property converted from
Leasehold to Freehold and handing over the original title deeds
in respect of built up Shop No. 3, Ground Floor, in property
bearing No. 16/28A & B, Tilak Nagar, New Delhi-110018
measuring 14.3′ x 20.4′ in favour of the plaintiffs against receipt
of balance sale consideration and in the alternative a decree in the
sum of Rs. 53,00,000/- i.e. double of the money already paid
along with past, pendent-lite and future interest till the recovery
@ 18% per annum. The plaintiffs have also prayed for a decree
of Perpetual Injunction in their favour and against the defendant
CS (Comm.) No. 567/2024 -5-
thereby perpetually restraining defendant, his family members,
agents, servants, assignees and representatives etc. from further
selling, alienating or transferring the suit property. The plaintiffs
have also prayed for a decree of mandatory injunction in favour
of the plaintiffs and against the defendant thereby directing the
defendant to accept the balance sale consideration sum of Rs.
1,13,50,000/-, to convey the title and execute the sale deed in
respect of suit property i.e. Built up Shop No. 3, Ground Floor, in
property bearing No. 16/28 A & B, Tilak Nagar, New
Delhi-110018 measuring 14.3′ x 20.4′.
3. The defendant has filed written statement taking
preliminary objections that vide agreement to sell and purchase
executed on 17.12.2021, plaintiffs have agreed to purchase shop
bearing No. 3 situated on the ground floor of property no. 16/28
A & B, Tilak Nagar, New Delhi-110018 without roof for total
sale consideration amount of Rs. 1,40,00,000/-. The entire sale
consideration amount was payable by plaintiffs on or before
28.02.2022 and upon its receipt the defendant was required to
execute sale documents in favour of plaintiffs. The defendant was
to get the property converted from leasehold to freehold from
L&DO. It was categorically stipulated in the said agreement that
in case the transaction is not completed on or before 28.02.2022,
earnest money amount of Rs. 10,00,000/- shall stand forfeited.
It is mentioned that due to extension of Chajja by plaintiffs on the
public street, the conversion of this property from lease hold to
freehold was not possible until removal of the said extended
Chajja. The defendant repeatedly called upon the plaintiffs to
remove the Chajja so that the pending process for conversion of
CS (Comm.) No. 567/2024 -6-
property into free hold could be completed but plaintiff did not
pay any heed to such numerous requests. Consequently, the free
hold proceedings could not be concluded. The plaintiffs had
apprised the defendant that sale transaction even for the leasehold
property can be registered & that a circular has been released by
the GNCTD. The plaintiffs had also proposed to get the
agreement to sell registered by or before 30.06.2022 to which
defendant had agreed. After this settlement, certain part payments
were also made by the plaintiffs for which receipts were issued.
It is mentioned that at the time of oral extension of time, it was
agreed mutually that if the payment is not made by the plaintiffs
by 30.06.2022, the entire money paid by the plaintiff would be
forfeited. However, plaintiffs have failed to make the complete
payment of agreed amount of sale consideration even up to the
extended date of 30.06.2022. In fact, even till date plaintiffs
have failed to offer the payment of entire sale consideration
amount. In view of conduct of the plaintiffs, the entire amount
paid by them stood forfeited which was orally agreed at the time
of extension of cut off date from 28.02.2022 to 30.06.2022. The
defendant due to non-performance of that agreement by the
plaintiffs has suffered loss of more than Rs. 90,00,000/- which
the defendant would have earned from the shop which he wanted
to purchase from the sale consideration to be paid by the
plaintiffs. As per the defendant, the aforesaid agreement to sell
executed on 17.12.2021 stood revoked & the entire amount paid
so far was forfeited. This fact was made known to the plaintiffs
through the notice dated 27.06.2023. It is mentioned that the
already existing tenancy in favour of the plaintiffs in respect of
the said shop was surrendered by the plaintiffs when the above
CS (Comm.) No. 567/2024 -7-
mentioned agreement to sell was executed. No rent was paid by
the plaintiffs with effect from 17.12.2021 till date. The present
occupation of suit premises by the plaintiffs is illegal. The
defendant reserves his right to recover possession of the shop
from the plaintiffs. The possession of the said shop with effect
from 17.12.2021 has been retained by the plaintiff in furtherance
of & on the basis of agreement to sell dated 17.12.2021 and for
the reason plaintiffs had agreed to purchase the said shop upon
making payment of entire agreed sale consideration amount. It is
mentioned that due to breach of contract on the part of plaintiffs,
the agreement of sale and purchase was revoked by defendant
through notice dated 27.06.2023. No cause of action ever arose in
favour of the plaintiffs to institute the present suit. It is
mentioned that plaintiffs always insisted upon the defendant to
accept substantial part of sale consideration in cash whereas
defendant was not interested. Making payment of more than Rs.
20,000/- in cash is not permitted in law as per Section 269 SS of
the Income Tax Act and for this reason, the agreement to sell is
not enforceable. It is mentioned that the property in question has
been allotted by L&DO as residential. Due to the road being
notified for mixed land use, the allottees have started using
ground floor for commercial purposes. The properties have been
allotted on lease hold basis as residential and its conversion is
also being undertaken by the L&DO as residential. The property
in question is still lease hold and the lease does not permit sale
without prior permission of L&DO. The transaction in question is
not commercial and as such the suit is not maintainable. No
cause of action has arisen in favour of plaintiffs as the plaintiffs
do not allege in the plaint that they are ready and willing to
CS (Comm.) No. 567/2024 -8-
perform their part of obligation. Merely stating that within a
week of being notified, they will arrange the funds does not
fulfill the requirements of law. It is mentioned that the relief of
specific performance is a discretionary relief. The conduct of the
plaintiffs do not entitle them to claim discretionary relief of
specific performance. It is mentioned that the verification of
plaint and the affidavits has been made “to the best of
knowledge”. It is no verification in the eyes of law and therefore,
unverified plaint is liable to be rejected. The plaintiffs in the
alternative have claimed the relief of double the amount of Rs.
26,50,000/- but no case has been made out that any loss or
damage has been suffered by the plaintiffs. Nonetheless it implies
that the entire amount paid by the plaintiffs was earnest money.
The defendant has made out the case for its forfeiture. In reply on
merits, similar averments are made. Dismissal of suit is prayed
by the defendant.
4. The plaintiffs have filed replication and controverted the
allegations made in the written statement and further reaffirmed
the averments made in the plaint.
5. On the basis of pleadings of the parties, following issues
were framed by this Court on 07.03.2025, which are as under:-
(i) Whether the suit is bad for non-joinder of L&DO as
necessary party ? (OPD)
(ii) Whether the present suit is filed by the plaintiffs
within the period of limitation ? (OPP)
(iii) Whether the plaintiffs are entitled for a decree of
Specific Performance in their favour and against theCS (Comm.) No. 567/2024 -9-
defendant in respect to agreement to sell dated
17.12.2021 ? (OPP)
(iv) Whether the plaintiffs are entitled for a decree of
permanent injunction, as prayed ? (OPP)
(v) Whether the plaintiffs are entitled for a decree of
mandatory injunction, as prayed ? (OPP)
(vi) Whether the plaintiffs are entitled for a decree of
Rs. 53,00,000/- in alternative from the defendant, as
prayed ? (OPP)
(vii) Whether the plaintiffs are entitled to the interest on
the amount of Rs. 53,00,000/-, if yes then at what rate
and for what period ? (OPP)
(viii) Relief.
6. In evidence plaintiff no. 1 has examined himself as PW-1.
This witness has filed affidavit on the lines of plaint. This witness
has relied upon the Agreement to sell and purchase dated
17.12.2021 which is Ex. P-1, Acknowledgment of the defendant
15.02.2022 which is Ex.P-2, Receipt dated 05.01.2022 which is
Ex.P-3, Legal notice sent by the defendant and reply to the same
which are Ex. P4 and P5, Photographs and videos containing in
pen drive is Ex.P-6 (colly).
This witness is duly cross examined by Ld. Counsel for
defendant. In cross examination, this witness has admitted that he
had not shown the cash payment given to the defendant in his
any books of account or in his ITR. He has admitted that at
present suit property is lease hold property. This witness has
voluntarily stated that the defendant had conveyed him that he
will convert the property from lease hold to free hold. This
CS (Comm.) No. 567/2024 -10-
witness has stated that he has no knowledge if the suit property is
mentioned as residential in the record of L&DO ( Land and
Development Office). He has admitted that agreement to sell was
executed in respect of the shop which is in his possession. This
witness has stated that he was having balance payment to pay to
the defendant as per agreement on 28.02.2022. This witness has
stated that he had not annexed any document to show that he was
having sufficient amount to pay the balance payment on
28.02.2022. This witness has admitted that he was tenant in the
property at the time of execution of agreement to sell. This
witness has admitted that he had not paid any rent after the
execution of agreement to sell with the defendant. This witness
has stated that he is in possession of the suit property as he had
executed agreement to sell with the defendant.
7. On the other hand, defendant has examined himself as
DW-1. This witness has filed affidavit on the lines of written
statement. This witness is duly cross examined by Ld. Counsel
for plaintiff. During cross examination, this witness has stated
that he cannot say if his counsel has placed on record any
document to show that he had filed any application for
conversion of suit property from lease hold to free hold. This
witness has voluntarily stated that he had deposited amount of
Rs. 1,19,700/- with L&DO as conversion fee. This witness has
stated that he had completed all the formalities at the time of
submission of his application with L&DO for conversion. He
has voluntarily stated that some officials of the L&DO also
visited the premises and conveyed him that the plaintiff had
erected Chhajja and until the Chhajja is demolished, the property
CS (Comm.) No. 567/2024 -11-
cannot be converted to free hold. He has admitted that L&DO
department has not conveyed in writing to him that due to
erection of Chhajja, property cannot be converted from lease
hold to free hold. This witness has stated that he had completed
all the formalities in respect of property No. 16/28A, Tilak
Nagar, Delhi. He has stated that all the shops are in the property
No. 16/28A, Tilak Nagar, Delhi. This witness has admitted that
he had not communicated to the plaintiff in writing that L&DO
has refused to convert the property from lease hold to free hold
due to erection of Chhajja. This witness has voluntarily stated
that he has conveyed this fact to the plaintiff orally many times.
He has stated that plaintiff has requested him orally to extend the
time till 30.06.2022 to make the payment. This witness has
admitted that he had signed the written statement and affidavit in
evidence after reading both the documents. This witness has
admitted that he is facing 4-5 complaint cases u/s 138 NI Act by
different persons. This witness has stated that he had not
executed any agreement to sell earlier in respect of property No.
16/28A, Tilak Nagar, New Delhi. This witness again admitted
that he had executed an agreement to sell with respect to above
mentioned property with Mr. Gurpreet Singh in the year, 2012
but he had not fulfilled the conditions of the agreement and the
agreement was also not registered.
8. Defendant has also examined Sh. Narendra Prasad
Srivastava, Consultant, L&DO, Nirman Bhawan, New Delhi as
DW-2. This witness has stated that Defendant has applied online
for conversion of suit property from lease hold to free hold. The
office has issued an acknowledgment of having received the said
CS (Comm.) No. 567/2024 -12-
application and fee of Rs. 1,19,700/-. Copy of said
acknowledgment is Ex. DW-2/1. He has stated that the said
property in the records of L&DO is residential. He has stated
that if there is no commercial activity in the subject property, it
can be processed for conversion into free hold.
This witness is duly cross examined by Ld. Counsel for
plaintiff. In cross examination this witness has admitted that it is
no where mentioned in Ex. DW-2/1 that if there is no
commercial activity in the suit property, it can be processed for
conversion into free hold. He has voluntarily stated that in Ex.
DW-2/1 there is mention of suit property as residential. This
witness has admitted that he is deposing on the basis of record.
He has admitted that as per the record maintained with the
department, the defendant is owner of the properties no. 16/28A
& 16/28B, Tilak Nagar, New Delhi. He has stated that defendant
has applied for conversion of property no. 16/28A. This witness
has voluntarily stated that property no. 16/28B was already
converted into free hold on 08.09.2000. This witness in a specific
question replied that defendant has not completed all the
formalities. He has admitted that there is no mention about
conversion status of property in document Ex. DW-2/1. This
witness is re-examined and cross examined. This witness in a
specific question has replied that he cannot tell without checking
the record as to what are the formalities which the defendant did
not comply with to get the suit property converted from lease
hold to free hold.
9. I have heard Ld. Counsels for the parties at length and
perused the record carefully.
CS (Comm.) No. 567/2024 -13-
10. My issue-wise findings are as under:-
11. Issue No. 1- Whether the suit is bad for non-joinder of
L&DO as necessary party ? (OPD)
The burden to prove this issue is upon the defendant. It is
contended by Ld. Counsel for defendant that present suit is bad
for non-joinder of L&DO as a party. It is also contended by Ld.
Counsel for defendant that L&DO is a necessary party.
On the other hand, Ld. Counsel for plaintiffs submits that
L&DO is not a necessary party. It is also contended by Ld.
Counsel for plaintiffs that DW-2 has admitted that the other
property of defendant bearing No. 16/28B has already been
converted into free hold on 08.09.2000, so L&DO is not a
necessary party.
In the present case, defendant has examined Sh. Narendra
Prasad Srivastava, Consultant, L&DO, Nirman Bhawan, New
Delhi as DW-2 and this witness has stated that defendant has
made payment of Rs. 1,19,700/- for converting the property
from leasehold to freehold. The defendant has executed an
agreement to sell with the plaintiffs and one of the condition in
the agreement to sell is that the defendant was required to convert
the suit property from leasehold to freehold. The defendant has
represented himself to be the absolute owner of the suit property
and agreed to sell the suit property to the plaintiffs. I am of the
view that present suit is not bad for non-joinder of L&DO as
party. The defendant is not able to prove this issue and
accordingly, this issue is decided in favour of the plaintiffs and
against the defendant.
CS (Comm.) No. 567/2024 -14-
12. Issue No. 2- Whether the present suit is filed by the
plaintiffs within the period of limitation ? (OPP)
The burden to prove this issue is upon the plaintiffs.
During arguments, Ld. Counsel for defendant has conceded that
present suit is filed within limitation. I have perused the record.
Perusal of file reveals that photocopy of agreement is proved on
record as Ex. P-1 and this agreement is dated 17.12.2021.
Admittedly, plaintiff have made payment of Rs. 2,00,000/- on
24.03.2022. The present suit was filed in July, 2024. Thus, if we
count the period of limitation from 24.03.2022, the present suit is
filed within limitation. Accordingly, this issue is decided in
favour of the plaintiffs and against the defendant.
13. Issue No. 3- Whether the plaintiffs are entitled for a decree
of Specific Performance in his favour and against the defendant
in respect to agreement to sell dated 17.12.2021 ? (OPP), Issue
No. 4-Whether the plaintiffs are entitled for a decree of
permanent injunction, as prayed ? (OPP) & Issue No. 5-Whether
the plaintiffs are entitled for a decree of mandatory injunction, as
prayed ? (OPP)
The Issues No. 3, 4 & 5 are interconnected and can be
decided together. The burden to prove all the issues is upon the
plaintiffs. It is the contention of Ld. Counsel for plaintiffs that
defendant has executed agreement to sell in respect of Shop No.
3, on the ground floor, in the property bearing No. 16/28 A & B,
Tilak Nagar, New Delhi-110018 measuring 14.3′ x20.4′ and
agreed to sell the suit property for sale consideration of Rs.
CS (Comm.) No. 567/2024 -15-
1,40,00,000/-. As per this agreement the defendant has received
payment of Rs. 26,50,000/- as on 24.03.2022.
14. The defendant has also executed receipt Ex. P-2 and
acknowledgment Ex. P-3. So, defendant has admitted to execute
agreement to sell and also admitted to receive a sum of Rs.
26,50,000/- from the plaintiffs. It is admitted fact that plaintiffs
were tenants in respect of suit property under the defendant and
during their occupation in the suit property as tenants, an
agreement to sell Ex. P-1 was executed between the parties. It is
also admitted fact that defendant was required to convert the suit
property from leasehold to freehold. Clause-4 of the agreement
reads as under:-
“4. That it is the sole responsibility of the First Party to get
the said property, including the demised shop, from leasehold to
freehold at his own expense and indeed it has to be completed
before the execution of the sale deed by the First Party in favour
of the Second party on receipt of the balance consideration”.
15. The main contention of Ld. Counsel for defendant is that
plaintiffs have erected a chhaja on the suit property so this
property was not converted from leasehold to freehold. This
contention of Ld. Counsel for defendant is devoid of any merits
as it is no where stated by DW-2 that due to erection of chhaja
the suit property cannot be converted from leasehold to freehold.
The defendant has not placed on record any letter of the L&DO
to show that suit property cannot be converted from leasehold to
freehold due to erection of chhaja by the plaintiffs. Even
defendant has not placed on record any letter written by L&DO
CS (Comm.) No. 567/2024 -16-
to him that suit property cannot be converted from leasehold to
freehold as chhaja was erected by the plaintiffs. DW-2 has clearly
stated that property no. 16/28B (belonging to the defendant) was
already converted into freehold on 08.09.2000. During
arguments, it is contended by Ld. Counsel for plaintiffs that the
defendant’s own shop in portion 16/28-B has a Chajja or the
structural similarity with plaintiff’s shop and this Chajja is in
existence much prior to its conversion from leasehold to freehold
that took place on 08.09.2000. This argument is not rebutted by
Ld. Counsel for defendant. I have also perused the cross
examination of DW-2. DW-2 has specifically stated that property
no. 16/28B was already converted into freehold on 08.09.2000.
Moreover, in the written statement the defendant has admitted
that he was owner of property No. 16/28 A & B, Tilak Nagar,
New Delhi and this property was converted from leasehold to
freehold. I am of the view that this contention of Ld. Counsel for
defendant carries no force.
16. The next contention of Ld. Counsel for defendant is that
DW-2 has proved the acknowledgment for online payment for
conversion application as Ex. DW-2/1 and L&DO has issued an
acknowledgment of having received the application and fee of
Rs. 1,19,700/-. Ld. Counsel for defendant vehemently contends
that on this document Ex. DW-2/1 the property in the records of
L&DO is mentioned as residential. As per Ld. Counsel for
defendant if there is no commercial activity in the subject
property, it can be processed for conversion into free hold.
DW-2 has clearly stated that property no. 16/28B was
already converted into freehold on 08.09.2000. This fact is not
CS (Comm.) No. 567/2024 -17-
denied by Ld. Counsel for defendant. The commercial property
of the defendant bearing No. 16/28B has already been converted
from leasehold to freehold. The defendant has given the suit
property to the plaintiffs for running business. It is not the case
of the defendant that suit property was given on rent to the
plaintiffs for residential purpose only. The shop was given on
rent by the defendant to the plaintiffs. Taking into consideration
that vide agreement to sell Ex. P-1, the defendant has agreed to
sell shop to the plaintiffs, this contention of Ld. Counsel for
defendant carries no force.
17. It is contended by Ld. Counsel for defendant that
defendant has applied for conversion of suit property from
leasehold to freehold and plaintiffs have failed to pay balance
sale consideration till 30.06.2022. Thus, earnest money paid by
the plaintiffs is forfeited.
I am not inclined to accept this contention of Ld. Counsel
for defendant. As per clause-3 of agreement to sell, the plaintiffs
have to pay the balance sale consideration on or before
28.02.2022 at the time of registration of the sale deed for the
demised shop before the Sub-Registrar concerned. It is admitted
fact that this agreement to sell was orally extended between the
parties and time was extended upto 30.06.2022. As per
document on record Ex. DW-2/1, defendant has applied for
conversion from leasehold to freehold of suit property on
14.06.2022 and made the payment on 14.06.2022. Till
28.02.2022 the defendant has not applied with L&DO for
conversion of suit property from leasehold to freehold. I am of
the view that as the suit proeprty was required to be converted
CS (Comm.) No. 567/2024 -18-
from leasehold to free hold before the execution of sale deed by
the defendant in favour of the plaintiffs and without converting
the property from leasehold to freehold the defendant cannot
execute sale deed in favour of the plaintiffs.
18. DW-2 in the cross examination has clearly stated that
defendant has not completed all the formalities for converting
the property No. 16/28A from leasehold to freehold. The
defendant was required to show that he has completed all the
formalities for conversion of the suit property from leasehold to
freehold. The examination-in-chief of DW-2 is silent as to what
formalities is to be completed by the defendant. If the defendant
has only applied for conversion of suit property from leasehold to
freehold and deposited the fees of Rs. 1,19,700/-, it cannot be
said that defendant has completed all the formalities to convert
the suit property from leasehold to freehold. It is specifically
mentioned in para no. 4 of the agreement to sell that it is the sole
responsibility of the First Party (defendant) to get the said
property, including the demised shop, from leasehold to freehold
at his own expense and indeed it has to be completed before the
execution of the sale deed by the First Party in favour of the
Second party on receipt of the balance consideration. Thus,
conversion of suit property from leasehold to freehold was one of
the condition precedent before execution of sale deed by the
defendant in favour of the plaintiffs. The DW-2 has not made it
clear as to what formalities defendant has completed and what
formalities are yet to be completed by the defendant for
conversion of suit property from leasehold to freehold. Moreover,
in receipt Ex. P-2 it is written by the defendant that plaintiffs will
CS (Comm.) No. 567/2024 -19-
make the payment of balance amount within one week of
conversion of suit property from leasehold to freehold. As per
Ex. DW-2/1, the defendant has made the payment of Rs.
1,19,700/- only on 14.06.2022. DW-2 has only proved online
payment receipt of Rs. 1,19,700/-. I am of the view that
defendant was required to convert the suit property from
leasehold to freehold before execution of sale deed in favour of
the plaintiffs. So, this contention of Ld. Counsel for defendant
carries no force.
19. It is contended by Ld. Counsel for defendant that plaintiffs
in the plaint have only prayed for directions to the defendant to
get the suit property converted from leasehold to freehold and for
handing over the original title deeds of the suit property to the
plaintiffs and there is no prayer for execution of sale deed. So,
this relief cannot be granted to the plaintiffs.
I have perused the prayer clause. The plaintiffs in prayer
clause- (a) have prayed to pass a decree for specific performance
in favour of the plaintiffs and against the defendant thereby
directing the defendant to perform his part of obligation under
Agreement to Sell dated 17.12.2021 by getting the suit property
converted from Leasehold to Freehold and handing over the
original title deeds in respect of built up Shop No. 3, Ground
Floor, in property bearing No. 16/28A & B, Tilak Nagar, New
Delhi-110018 measuring 14.3′ x 20.4′ against receipt of balance
sale consideration and in the alternative a decree in the sum of
Rs. 53,00,000/- i.e. double of the money already paid along with
past, pendent-lite and future interest till the recovery @ 18% per
annum. The plaintiffs in prayer clause- (b) have also prayed for a
CS (Comm.) No. 567/2024 -20-
decree of Perpetual Injunction in their favour and against the
defendant thereby perpetually restraining defendant, his family
members, agents, servants, assignees and representatives etc.
from further selling, alienating or transferring the suit property.
The plaintiff in prayer clause-(c) have also prayed for a decree of
mandatory injunction in their favour and against the defendant
thereby directing defendant to accept the balance sale
consideration sum of Rs. 1,13,50,000/-, to convey the title and
execute the sale deed in respect of suit property i.e. Built up Shop
No. 3, Ground Floor, in property bearing No. 16/28 A & B, Tilak
Nagar, New Delhi-110018 measuring 14.3′ x 20.4′. As the
plaintiff has specifically prayed for a decree of specific
performance in the prayer clause (a), this contention of Ld.
Counsel for defendant carries no force.
20. The next contention of Ld. Counsel for defendant is that
plaintiffs have only pleaded that they are ready and willing to
perform the contract and can pay the balance sale consideration
amount within a week of the conversion of suit property into
freehold. As per Ld. Counsel for defendant, the plaintiffs were
required to prove that they are in possession of sufficient funds to
make payment of balance sale consideration amount. As per the
defendant, the proof of possession of sufficient funds has to be
pleaded and proved from the date of performance of agreement
till passing of decree and merely making payment of a meager
amount as part sale consideration amount will not entitle the
plaintiffs to a decree for specific performance. Ld. Counsel for
defendant has placed reliance on judgment titled as P.
Ravindranath & Anr. Vs. Sasikala & Ors. [SLP(C) No.
CS (Comm.) No. 567/2024 -21-
2246/2017] passed by Hon’ble Supreme Court of India, wherein,
it is held as follows
22 (i) Relief of specific performance of contract is a
discretionary relief. As such, the Courts while exercising power
to grant specific performance of contract, need to be extra
careful and cautious in dealing with the pleadings and the
evidence in particular led by the plaintiffs. The plaintiffs have
to stand on their own legs to establish that they have made out
case for grant of relief of specific performance of contract. The
Act, 1963 provides certain checks and balances which must be
fulfilled and established by the plaintiffs before they can
become entitled for such a relief. The pleadings in a suit for
specific performance have to be very direct, specific and
accurate. A suit for specific performance based on bald and
vague pleadings must necessarily be rejected. Section 16(C) of
the 1963 Act requires readiness and willingness to be pleaded
and proved by the plaintiff in a suit for specific performance of
contract. The said provision has been widely interpreted and
held to be mandatory.
In this judgment, the judgment titled as U.N. Krishnamurthy
(Since Deceased) Thr. Lrs. V. A.M. Krishnamurthy is discussed,
wherein, it has been held that for a plaintiff to succeed in a
specific performance suit, they must consistently prove their
readiness and willingness to fulfill their contractual obligations
throughout the entire duration of the case, up until the final
judgment. Relevant paragraph has been reproduced here:-
46. It is settled law that for relief of specific performance, the
Plaintiff has to prove that all along and till the final decision of
the suit, he was ready and willing to perform the part of the
contract. It is the bounden duty of the Plaintiff to prove hisCS (Comm.) No. 567/2024 -22-
readiness and willingness by adducing evidence. This crucial
facet has to be determined by considering all circumstances
including availability of funds and mere statement or averment
in plaint of readiness and willingness, would not suffice.
Ld. counsel for defendant has also placed reliance on judgment
titled as M.K. Chabbra Vs. Damanjit Kaur [RFA No. 2/2019]
passed by Hon’ble High Court of Delhi, wherein, it is held that
mere past transactions are not enough, proof regarding financial
capacity must cover the entire litigation period.
“7(ii) …………….Thus, it is abundantly clear that the amount
of consideration, which a buyer must pay to the seller, must be
necessarily proved to be available and only on proof of which
readiness & willingness would stand established………….”
“9. Admittedly, in the record of the trial court, there is not even
a single document filed by the appellant/plaintiff to show his
financial capacity, being the documents of income tax returns
of the appellant/plaintiff or the bank accounts of the
appellant/plaintiff or any other property papers or any other
documents which show the financial capacity of the
appellant/plaintiff.”
Ld. counsel for defendant has further placed reliance on
judgment titled as Asha Verma & Anr. Vs. Monika Singla [2019
III AD (Delhi) 101], Rajender Kumar Vs. Rama Bala Gupta,
Poonam (Now deceased) Through Lrs (Smt.) Vs. Sh. Pradeep
Tyagi [2018 VIII AD (Delhi) 389] and Ashok Nanda Vs.
Mohinder Kumar Sharma & Anr [2018 III AD (Delhi) 366] to
prove that financial capacity is to be proved by the plaintiff by
CS (Comm.) No. 567/2024 -23-
adducing clinching documentary evidence to show that he was
having financial capacity to pay balance consideration amount.
21. On the other hand, Ld. counsel for plaintiffs has placed
reliance of judgment titled as Babasaheb Dhondiba Kute Vs.
Radhu Vithoba Barde [2024 INSC 122] passed by Hon’ble
Supreme Court of India, wherein, it is held as under:-
It may be noted that the plaintiff had relied upon Nathulal v.
Fulchand 1969(3) SCC 120 wherein, it was held that when an
agreement to sale is executed but it cannot be specifically
performed without permission or sanction of any authority, the suit
can be decreed and decree for specific performance can be granted
subject to obtaining such permission/sanction from the competent
authority. The sanction in the said case pertained to Section 70(4)
of the Madhya Bharat Land Revenue and Tenancy Act, 1950 as it
postulated that a purchaser of agricultural land, not being an
agriculturist would require permission from the State Government
for the sale to take place. This court had allowed for the operation
of the doctrine of part performance while reasoning that it was
well settled that if a property is not transferable without the
permission of the authority, an agreement to transfer the property
must be deemed subject to the implied condition that the transfer
will obtain the sanction of the authority concerned.
Ld. counsel for plaintiffs has also placed reliance on
judgment titled as P. Daivasigamani Vs. S. Sambandan [CA No.
9006/2011] passed by Hon’ble Supreme Court of India, wherein,
the Hon’ble Apex Court elaborated on the concept of readiness
and willingness as prescibed under Section 16 of the Specific
Relief Act. Relevant paragraph has been reproduced here:-
15. Readiness and willingness are not one, but separate
elements. Readiness means the capacity of the plaintiff to
perform the contract, which would include the financial position
to pay the purchase price. Willingness refers to the intention of
the plaintiff as a purchaser to perform his part of the contract.
CS (Comm.) No. 567/2024 -24-
Willingness is inferred by scrutinising the conduct of the
plaintiff/purchaser, including attending circumstances.
Continous readiness and willingness on the part of the plaintiff/
purchaser from the date the balance sale consideration was
payable in terms of the agreement to sell, till the decision of the
suit, is a condition precedent for grant of relief of specific
performance.
16. The expression “readiness and willingness” used in Section
16 (c) of the said Act, has been interpreted in catena of decisions
by this Court, in the light of facts and circumstances of the cases
under consideration for the purpose of granting or refusing to
grant the relief of Specific Performance of a contract. The said
expression cannot be interpreted in a straitjacket formula.
Ld. counsel for plaintiffs has also placed reliance on
judgment titled as Aniglase Yohannan Vs. Ramlatha and
Ors.”[CA No. 6260/2004] passed by Hon’ble Supreme Court of
India, wherein, it is held as under :-
It is thus clear that an averment of readiness and willingness in
the plaint is not a mathematical formula which should only be in
specific words. If the averments in the plaint as a whole do
clearly indicate the readiness and willingness of the plaintiff to
fulfil his part of the obligations under the contract which is the
subject matter of the suit, the fact that they are differently worded
will not militate against the readiness and willingness of the
plaintiff, and that they were disposed and able to complete it had
it not been renounced by the defendant.
Ld. counsel for plaintiffs has also placed reliance on judgment
titled as Motilal Jain Vs. Smt. Ramdasi Devi & Ors. [AIR 2000
SUPREME COURT 2408] passed by the Supreme Court of India
wherein, it is held that ” This Court observed that readiness and
willingness could not be treated as a strait-jacket formula and
that had to be determined from the entirety of facts andCS (Comm.) No. 567/2024 -25-
circumstances relevant to the intention and conduct of the party
concerned”. In this judgment, it is also held that ” The language in
Section 16(c) of the Specific Relief Act, 1963 does not require
any specific phraseology but only that the plaintiff must aver that
he has performed or has always been and is willing to perform
his part of the contract. So the compliance of readiness and
willingness has to be in spirit and substance and not in letter and
form”. Ld. Counsel for the plaintiff has relied on Ramesh
Chandra v. Chuni Lal, AIR 1971 SC 1238 and R.C. Chandiok &
Anr. Vs. Chuni Lal Sabharwal & ors . which reiterates the
proposition that readiness and willingness cannot be treated as a
strait-jacket formula.
Ld. counsel for plaintiffs has also placed reliance on
judgment titled as Syed Dastagir Vs. T.R. Gopalakrishnasetty
passed by the Hon’ble Supreme Court wherein, it is held as
under:-
Courts cannot draw any infrerence in abstract or to give such
hyper technical interpretation to defeat a claim of specific
performance which defeats the very objective for which the said
act was enacted. The Section makes it obligatory to a plaintiff
seeking enforcement of specific performance, that he must not
only come with clean hands but there should be a plea that he
has performed or has been and is ready and willing to perform
his part of the obligation. Unless this is there, Section 16 (c)
creates a bar to the grant of this discretionary relief.
22. Admittedly, in the present case plaintiffs have not placed
on record any document to show that they were in position to pay
the balance consideration amount. Plaintiffs have not placed on
record any bank passbook, bank statement or any other document
to show that they were in position to pay the balance
consideration amount. PW-1 has also admitted that he had notCS (Comm.) No. 567/2024 -26-
annexed any document to show that he was having sufficient
amount to pay the balance payment on 28.02.2022. The plaintiffs
were required to mention in the plaint that they were having
sufficient funds from the date of agreement to sell till the passing
of the judgment to pay the balance consideration amount to the
defendant. Ld. Counsel for plaintiffs has vehemently contended
that plaintiffs have to make the balance sale consideration within
one week of conversion of property from leasehold to freehold
and the suit property was never converted from leasehold to
freehold by the defendant. Ld. Counsel for plaintiffs has drawn
my attention towards the receipt Ex. P-2 wherein the defendant
has mentioned that when the property is converted from
leasehold to freehold, plaintiffs will make the payment in one
week. As in the present case, property is to be converted from
leasehold to freehold and it is for the L&DO to convert the
propety from leasehold to free hold or not on fulfilling certain
conditions/ formalities by the defendant. I am of the view that in
view of the judgments relied upon by Ld. Counsel for defendant
that plaintiffs have not annexed any document to show that they
were having sufficient funds i.e. Rs. 1,30,00,000/- to pay to the
defendant. I am also of the view that this court cannot give
directions to the government authority to convert the property
from leasehold to freehold without fulfilling all necessary
formalities by the defendant. I am of the view that plaintiffs are
not entitled for a decree of specific performance of contract in
their favour.
23. It is contended by Ld. counsel for defendant that defendant
has sent a legal notice dated 27.06.2023 which is Ex. P-4 andCS (Comm.) No. 567/2024 -27-
defendant has revoked the agreement to sell dated 17.12.2021
and plaintiffs cannot file suit without claiming relief of
declaration declaring that revocation as null and void. As per the
defendant, the plaintiffs have not sought any relief of declaration
declaring that revocation of the document by the defendant was
not lawful. Ld. counsel for defendant has placed reliance on
judgment titled as I.S. Sikandar (D) by LRs. Vs. K. Subramani
& Ors. [AIRONLINE 2013 SC 32] to the effect that it is
mandatory to seek declaration before the grant of decree for
specific relief and that suit is not maintainable in case relief of
declaration has not been asked for. I am not inclined to accept
this contention of Ld. Counsel for defendant as admittedly
plaintiffs have also sent reply to the legal notice and denied that
plaintiffs are solely liable for breaching the agreement to sell.
The plaintiffs have also mentioned in the reply that the agreement
to sell cannot be unilaterlly rescinded by defendant. Ld. Counsel
for plaintiffs has placed reliance on judgment titled as A.
Kanthamani Vs. Nasreen Ahmed CA No. 2714/2008 passed by
the Hon’ble Supreme Court of India. In this judgment, the
judgment titled of I.S. Sikander (Dead) by LRs (supra) has also
been discussed. In this judgment, it is held as under:-
34. Coming first to the submission of the learned counsel for the
appellant about the maintainability of suit, in our considered
view, it has no merit for more than one reason.
35. First, as rightly argued by learned counsel for the respondent,
the objection regarding the maintainability of the suit was neither
raised by the defendant in the written statement nor in first appeal
beore the High Court and nor in grounds of appeal in this Court.
36. Second, since no plea was raised in the written statement, a
fortiori, no issue was framed and, in consequence, neither theCS (Comm.) No. 567/2024 -28-
Trial Court nor the High Court could render any finding on the
plea.
37. Third, it is a well-settled principle of law that the plea
regarding the maintainability of suit is required to be raised in the
first instance in the pleading (written statement) then only such
plea can be adjudicated by the Trial Court on its merits as a
preliminary issue under Order 14 Rule 2 of the Code of Civil
Procedure. Once a finding is rendered on the plea, the same can
then be examined by the first or/and second appellate Court.
38. It is only in appropriate cases, where the Court prima facie
finds by mere perusal of plaint allegations that the suit is barred
by any express provision of law or is not legally maintainable
due to any legal provision; a judicial notice can be taken to avoid
abuse of judicial process in prosecuting such suit. Such is,
however, not the case here.
39. Fouth, the decision relied on by the learned counsel for the
appellant in the case of I.S. Sikander (supra) turns on the facts
involved therein and is thus distinguishable.
40…..
41. For the aforementioned reasons, we find no merit in the first
submission of learned counsel for the appellant, which is rejected.
In respect of the aforementioned judgment, I am of the view that
plaintiffs are not requiered to pray for the relief for declaration
declaring that revocation of the defendant as null and void as
plaintiffs have sent reply rebutting the averments of legal notice
sent by the defendant to the plaintiffs. Therefore, this contention
of Ld. Counsel for defendant carries no force.
24. The next contention of Ld. counsel for defendant is that
payment made in cash amounting to Rs. 9,50,000/- is not
permitted in law. PW-1 has admitted in his cross-examination
CS (Comm.) No. 567/2024 -29-
that the cash payment made by him has not been shown in his
books of account or ITR. As per the defendant the payment
made illegally cannot be legalised through the decree of specific
performance. Ld. counsel for defendant has placed reliance on
judgment titled as “The Correspondence, RBANMS Educational
Institute Vs. B. Gunashekhar & Anr.” 2025 INSC 490 decided
on 16.04.2025 that the cash transactions will not be encouraged
and a mandate has been issued for the court to report the
transaction for more than Rs. 2,00,000/- paid in cash mentioned
in any suit to the Income Tax Authority. The defendant has
admitted to receive cash payments from the plaintiffs, I am of the
view that it is not proved on record by the defendant that amount
paid in cash by the plaintiff to the defendant was black money.
Admittedly, the defendant has only received payment of Rs.
9,50,000/- in cash and rest of the amount was paid through
cheques. The plaintiff has not asked any question to the plaintiff
during cross examination as to from where he had arranged the
cash of Rs. 9,50,000/-. In absence of any question, it cannot be
said that amount of Rs. 9,50,000/- paid by the plaintiff was black
money.
25. In view of my findings on the above said issues, all the
issues are decided against the plaintiffs and in favour of the
defendant.
26. Issue No. 6- Whether the plaintiffs are entitled for a
decree of Rs. 53,00,000/- in alternative from the defendant, as
prayed ? (OPP)
CS (Comm.) No. 567/2024 -30-
The burden to prove this issue is upon the plaintiffs. To
prove this issues, the plaintiff no. 1 appeared as PW-1 and filed
affidavit on the lines of the plaint. The plaintiffs have prayed for
a decree in the sum of Rs. 53,00,000/- i.e. double of the money
already paid along with past, pendent-lite and future interest till
the recovery @ 18% per annum.
I have perused the agreement to sell. In para no. 7 of
agreement to sell, it is mentioned that ” if the First Party does not
perform his part of the contract for any reason whatsoever then
the Second Party will be entitled to pay the double of the earnest
money, as paid to the First Party”.
27. It is contended by Ld. counsel for defendant that it is
settled proposition of law that consequences of breach of contract
are subject to Section 73 of the Contract Act. As per Ld. counsel
for defendant merely because the agreement provides for double
the amount of earnest money do not entitle the plaintiffs to claim
the same. The plaintiffs were required to plead and prove that
they have suffered losses and damages at least upto the extent of
the amount of earnest money and there is no pleadings and
evidence on record on this issue. Ld. counsel for defendant has
placed reliance on judgment titled as Kirpal Singh Vs. Manjit
Singh (2019) 193 PLR 730 passed by the Hon’ble High Court of
Punjab and Haryana, wherein, it is held as under:-
No doubt, it has been consistently held by the Hon’ble Supreme
Court that before a decree for double of the earnest money is passed
in favour of the plaintiff, he is required to prove that he has suffered
damages to that extent and in absence of any evidence, the decree
for the amount which is double of the earnest money cannot be
passed although, it is provided in the agreement. To that extent, theCS (Comm.) No. 567/2024 -31-
argument of learned counsel for the cross-objector has force and
therefore, accepted.
Ld. counsel for defendant has has further placed reliance
on judgment titled as M.K. Chabbra (Supra). In this judgment,
the judgment titled as ” M/s. Hotz Industries Pvt. Ltd. v. Dr. Ravi
Singh (Since Deceased Through LRs) & Ors. ” 2018 SCC Online
Del 7618 is also discussed and in view of the observation made
in this judgment, it has been held as under :-
12. ……I have also observed that in such a case, in fact an
alternative relief of damages is efficacious and sufficient relief
and therefore, a plaintiff/buyer in the cases filed seeking specific
performance must necessarily lead evidence that the
appellant/plaintiff has suffered loss on account of increase in the
value of the property, and this difference of price is granted by the
civil court as damages/mandatory relief as per Section 73 of the
Contract Act, 1872 and admittedly, in the present case, there is no
evidence led by the appellant/plaintiff to prove the difference in
the market price i.e. on account of the rise in market values and
therefore, the appellant/plaintiff cannot even be granted relief of
damages. Therefore, I am of the opinion, that the trial court has
rightly denied the discretionary relief of specific performance”.
28. In the present case plaintiffs have not pleaded that due to
non-execution of sale deed by the defendant, they have suffered
damages, even damages are not pleaded by the plaintiffs in the
plaint nor any evidence has been adduced by the plaintiffs that
due to non-execution of sale deed by the defendant, he has
suffered losses. Admittedly, the plaintiffs were tenants in respect
of the suit property. The plaintiffs have not pleaded that they had
suffered any damages in respect of non-execution of sale deed. In
para no. 4 of the agreement to sell, it is specifically mentioned
that “it is sole responsibility of the First Party to get the said
CS (Comm.) No. 567/2024 -32-
property, including the demised shop, from leasehold to freehold
at his own expenses and indeed it has to be completed before the
execution of the sale deed by the first party in favour of the
second party on receipt of the balance consideration”. As per
Section 21 (2) of the Specific Relief Act “If, in any such suit, the
court decides that specific performance ought not to be granted,
but that there is a contract between the parties which has been
broken by the defendant, and that the plaintiff is entitled to
compensation for that breach, it shall award him such
compensation accordingly”. Admittedly, the defendant has not
fulfilled all the formalities for converting the suit property from
leasehold to freehold. DW-2 in clear terms stated that defendant
has not completed all the formalities for converting the property
from leasehold to freehold. During re-examination, DW-2 has
stated that he cannot tell without checking the record as to what
are the formalities which the defendant did not comply with to
get the suit property converted from leasehold to freehold. In
view of the Section 21 (2) of Specific Relief Act, I am of the
view that plaintiffs are entitled for compensation as defendant
has breached the terms and conditions of agreement dated
17.12.2021. The plaintiffs have not adduced any evidence to
show that how much damages they have suffered. I am of the
view that in the interest of justice will met if the defendant is
directed to refund the amount of Rs. 26,50,000/- received by him
from the plaintiffs as an earnest money. Accordingly, issue no. 6
is decided in favour of the plaintiffs and against the defendant.
CS (Comm.) No. 567/2024 -33-
29. Issue No. 7- Whether the plaintiffs are entitled to the interest
on the amount of Rs. 53,00,000/-, if yes, then at what rate and for
what period ? (OPP)
The plaintiffs have claimed interest @ 18% per annum
from the defendant. Ld. Counsel for plaintiffs have not adduced
any evidence to show that plaintiffs are entitled to interest. As the
defendant has utilized the amount of the plaintiffs which he has
received from the plaintiffs, the plaintiffs are entitled to interest.
Reliance can be placed in this regard on the judgment of Central
Bank of India Vs Ravindra & Ors MANU/SC/0663/2001 passed
by Hon’ble Supreme Court of India. In this judgment it is held
that according to stroud’s Judicial dictionary of Words and
Phrases interest means, inter alia, compensation paid by the
borrower to the lender for deprivation of the use of his money.
In Secretary, Irrigation Department, Government of Orissa &
Ors Vs G. C. Roy Manu/ SC/0297/1992 (1992) 2 SCC 508, it is
held that the constitution bench opined that a person deprived of
the use of money to which he is legitimately entitled has a right
to be compensated for the deprivation, call it by any name. It
may be called interest, compensation or damages. This is the
principles of Section 34 CPC.
In this judgment, Judgment of Dr. shamlal Narula Vs
CIT Punjab MANU/ SC/0109/1964 (53) was also relied upon
wherein it is held that interest is paid for the deprivation of the
use of the money. In this judgment it is also held that in whatever
category “interest in a particular case may be put, it is a
consideration paid either for the use of money or for forbearance
in demanding it, after it has fallen due, and thus, it is charge for
the use of forbearance of money. In this sense, it is a
CS (Comm.) No. 567/2024 -34-
compensation allowed by law or fixed by parties, or permitted by
customs or usage, for use of money, belonging to another, or of
the delay in paying money after it has become payable.
Reliance can also be placed on the judgment of
Aditya Mass Communication (P) Ltd Vs APSRTC
MANU/SC/0759/2003 wherein Hon’ble Supreme Court granted
interest @ 12% p.a. Reliance can also be placed on the judgment
of “M/s IHT Network Limited Vs. Sachin Bhardwaj” in RFA No.
835/2016 & CM Appl.14617/2020 wherein the Hon’ble High
Court of Delhi has granted interest @12% per annum. I am of the
view that interest claimed by the plaintiffs is every excessive and
plaintiffs are entitled to interest @ 12% p.a. which is reasonable
and usually prevailing market rate of interest on the amount of
Rs. 26,50,000/- from 24.03.2022 till realization.
30. RELIEF:
In view of my above discussions, the suit of the
plaintiffs is partly decreed and a decree of Rs. 26,50,000/- is
passed in favour of the plaintiffs and against the defendant. The
plaintiffs are also entitled to interest @ 12% per annum on the
amount of Rs. 26,50,000/- from 24.03.2022 till realization.
Plaintiffs are also entitled to the cost of the suit. Decree sheet be
prepared accordingly. File be consigned to record room, after
necessary compliance.
Announced in the (NARESH KUMAR MALHOTRA)
open court on 23.05.2025 District Judge, Comm. Court-06
West, Tis Hazari Courts
Digitally signed
by NARESH
Extension Block, Delhi/23.05.2025
NARESH KUMAR
KUMAR MALHOTRA
MALHOTRA Date:
2025.05.23
16:32:42 +0530
CS (Comm.) No. 567/2024 -35-