Delhi High Court High Court

High Way Farms vs Sh. Chinta Ram & Ors. on 3 March, 2000

Delhi High Court
High Way Farms vs Sh. Chinta Ram & Ors. on 3 March, 2000
Equivalent citations: 2000 IIIAD Delhi 857, 85 (2000) DLT 355, 2000 (56) DRJ 201
Author: V Sen
Bench: V Sen


ORDER

Vikramajit Sen, J.

1. This application for temporary injunction has been filed in a suit for the Specific Performance of land situated in Khasra Nos. 314(4-16), 313(4-16), 315(4-16) situated in village Shahroorpur, District Mehrauli, New Delhi. This agreement based on a Receipt dated 22.9.1991 has allegedly been signed by Defendant Nos.1, 3, 9, 10 and 11. In this very suit Specific Performance of another piece of land has also been claimed on the basis of another Receipt dated 3.10.1991. The land mentioned in the second Receipt is situated in Khasra No.311(4-16), 312(1-4) situated in the same village
and allegedly executed by Defendant Nos.13, 14 and 15. There is no document witnessing any Agreement between Plaintiff and Defendant Nos. 2, 4, 5, 6, 7, 8 and 12 but they have all been imp leaded in the suit.

2. Learned counsel for Defendants had raised an objection to the maintainability of the suit on the ground of mis-joinder of parties as well as mis-joinder of cause of action. Prima facie both these objections are well
founded but in the view which I have taken, I need not expand on these objctions.

3. As has been stated above, the suit is predicated on two documents styled as Receipts. It is the contention of the learned counsel for the plaintiff that the contents of these documents should be read holistically and meaningfully and that merely because these are styled as Receipts, it would not necessarily lead to the conclusion that an Agreement to Sell had not been entered into. To this extent learned counsel for the Plaintiff is no doubt correct. In all such cases a duty is cast on the Court to examine the document in question and to arrive at a conclusion as to whether it contains all the necessary concomitants of an Agreement. In M/s. Nanak Builders and Investors Pvt. Ltd. Vs. Vinod Kumar Alag, AIR 1991 Delhi 315, Arun Kumar, J., had made the following observations:

“Mere heading or title of a document cannot deprive the document of its real nature. It is the substance which has to be seen and not the form. Where the document acknowledging the receipt of earnest money towards the sale of plot of land contains all the essential and basic ingredients required for an agreement to sell the same is signed by both the vendor and the vendee and is also witnessed by an attesting witness and it does not contain any mention that a formal agreement of sale will be executed, the fact that the vendee parts with a substantial amount in favour of the vendor shows that the parties have reached a consensus on the various terms of the arrangement between them meaning thereby
that a contract has been arrived at, and, merely because the document is titled as a receipt, it does not render the document as to mere receipt. The document is a contract which is capable of being specifically enforced.”

4. Similar observations are also contained in the order of S.K.Mahajan, J. in Vinod Saluja Vs. Sita Rani, . Applying the ratio set down in the above judgment to the facts of the present case I am satisfied that there is complete failure on the part of the plaintiff to establish the existence of a prima facie case in his favour.

5. In respect of the first Receipt dated 22.9.1991 the total consideration is Rs. 24,50,000 and admittedly only Rs. 21.000/- has been paid. After witnessing the Receipt of this payment this very document mentions that at the time of the “Agreement” a further sum of Rs. 3,00,000/- would be paid. This sentence by itself is sufficient to non-suit the plaintiff. It is the normal practice in all transactions pertaining to the sale of property that Earnest Money representing approximately then per cent of the sale consideration is paid/received. Although this would not lead to the inescapable
conclusion that every contract where a payment to this extent has been made is liable for Specific Performance, the non receipt of an approximately similar sum would definitely be indicative that an Agreement was yet to be arrived at. This is in fact what the Receipt specifically contemplates. Paraphrased, it states that when an Agreement to Sell is entered into a sum of Rs.3,00,000/- would be paid. The next sentence states that the deal would be finalised within a period of two months. The Receipt itself, therefore, is determinative of the fact that no `Agreement’ had taken
place. The observations of Arun Kumar, J, in M/s. Nanak Builders case (supra) that the document relied upon should not contain any mention that a formal Agreement to Sell is to be executed, is most significant. There is no averment in the plaint that an oral Agreement actually took place after the execution of Receipt even though an allegation to this effect has been made in the notice dated 18.3.1992 issued by Shri L.S. Rana, Advocate on behalf of Plaintiff. I am compelled to conclude that the parties had only agreed to enter into an Agreement, and in these circumstances a contract
was yet to come into being.

6. The position is similar in the case of second Receipt dated 3.10.1991. A total sale consideration is Rs.11,87,500 and the amount paid is Rs.15,000/- to each of the three Defendants. This document further mentions
that upon receipt of the sum equivalent to ten per cent of the total sale consideration, the executants would be ready to enter into an Agreement. As in the case of the first Receipt, a perusal of this document itself would lead to the conclusion that only an inchoate understanding, not an agreement, had been arrived at. The consensus ad idem was that on receipt of the payment of the larger sum of approximately ten per cent an Agreement was to be executed. On such documentation, it would not be possible to hold that a prima facie case had been made out. As has been laid down in Mayawanti Vs. Kaushalya Devi, , “burden of showing the stipulations and terms of the contract and that the minds were ad idem, lies on the Plaintiff. If the stipulations and terms are uncertain there can be no specific performance, for there is no contract at all. Where there are negotiations, the Court has to determined at what point, if at all, the parties have reached agreement”. There can be no manner of doubt that in the present case the Agreement was yet to be reached.

7. These considerations, to my mind, are sufficient reasons for rejecting the application. Learned Counsel for the plaintiff had emphasised that subsequent to the execution of the two Receipts, a total sum of Rs. 4,45,960.62 had also been paid by the Plaintiff to the Revenue Collector, Tis Hazari, being the amount received by the Defendant in respect of the land agreed to be sold to the Plaintiff. This is clearly a unilateral act of the Plaintiff, since the learned counsel for the Plaintiff has not been able to show any document which would indicate that this payment was made
on the request or behest of any of the Defendants.

8. The interim orders are recalled and the application is dismissed. Since substantial sums of money now stand deposited by the Plaintiff, I am desisting from imposing any costs.