Asha Menon, J
1. This order will dispose of the objections raised by the defendants to the maintainability of the present suit.
2. The suit has been filed for specific performance, possession and injunction. It is stated in the plaint that the plaintiff was approached by the
defendant No.2 being the Karta of the defendant No.1 for the sale of the property bearing No 28A, Prithvi Raj Road, New Delhi, admeasuring 3727
square yards (""suit property""). After negotiations, it was agreed that the total sale consideration would be Rs.28,00,00,000/-. It was also agreed,
according to the plaintiff, that the total consideration would be paid in parts as the suit property was a leasehold property with the L&DO, New Delhi
and the defendants had undertaken to get the same converted into freehold before transferring it in the name of the plaintiff. The plaintiff paid a sum
of Rs. l,64,50,000/- to the defendant No.1 against various receipts issued by the defendants acknowledging the payments made by the plaintiff such as
on 12th April, 2004 of Rs. 31,00,000/-, on 14th April, 2004 of Rs. 20,00,000/-, on 22ndApril, 2004 of Rs. 10,00,000/-, on 26th April, 2004 of Rs.
10,00,000/-, on 7th May, 2004 of Rs. 8,00,000/-,on 25th May, 2004 of Rs. 10,00,000/-, on 29th May, 2004 of Rs. 18,00,000/-, on 3rd June, 2004 of Rs.
20,00,000/-, on 16th July, 2004 of Rs. 12,00,000/-, on 19th July, 2004 of Rs. 3,00,000/-, on 22nd July, 2004 of Rs. 10,00,000/-, on 2nd August, 2004 of
Rs. 10,00,000/-, on 24th December, 2004 of Rs. 2,00,000/- and on 3rd January, 2005 of Rs. 50,000/-. Hence, the total sum of Rs. 1,64,50,000/- was
paid as earnest money by the plaintiff to the defendants.
3. The plaintiff further claims that he was handed part physical possession of the suit property vide Letter of Possession dated 22nd April, 2004.
According to the plaintiff, the defendants had assured that the suit property was free from all encumbrances and, therefore, it was agreed that once
the title to the suit property would be cleared from all encumbrances and converted from leasehold to freehold, the remaining balance payment would
be made by the plaintiff to the defendants.
4. It is stated in the plaint that thereafter, in the month of June, 2020, the defendant No.2 approached the plaintiff for payment of the balance
consideration as the title had been cleared of all encumbrances, but when the plaintiff sought documentary proof of the clear title, the defendants did
not provide any such document to the plaintiff. Rather, on noticing the malafide conduct of the defendants, the plaintiff issued a public notice on 18th
July, 2020 in the Hindustan Times, notifying the public at large about the agreement between them for the sale of the suit property. One objection was
received on 20th July, 2020 sent by the Punjab and Sindh Bank, Rajendra Place, New Delhi staking claim over the suit property as it had been
mortgaged by the defendant No.2 for securing the loan granted to one, Montari Industries Limited. Two other objections were received both dated
22nd July, 2020, one from SREI Infrastructure Finance Limited and the other from SREI Equipment Finance Limited, also claiming that the suit
property had been mortgaged with them. On 23rd July, 2020, the defendant No.1 sent a letter to the plaintiff to the effect that there was no agreement
between the defendant No.1 and the plaintiff for sale of the suit property and sought documents on the basis of which the plaintiff was staking such a
claim.
5. Thus, the defendants for the very first time, vide this letter dated 23rd July, 2020, had refused to perform their obligations to conclude the sale
transaction in respect of the suit property. They also malafidely published a notice in the Hindustan Times on 13th August, 2020 refuting the
plaintiff’s public notice dated 18th July, 2020. The plaintiff also responded to the letter of the defendants on 27th August, 2020 which was again
refuted by the defendant No.1 vide its letter dated 22nd September, 2020, also claiming that it was not the defendant No.2, who was the Karta, but
rather the defendant No.4, who was the Karta of the defendant No.1 and thus defendant No.2 lacked any authority to act on behalf of the defendant
No.1.
6. Despite all the exchange of these communications, including a challenge by the plaintiff to the defendants’ claim that they had returned the
money received from the plaintiff to him, the defendant No.2 once again approached the plaintiff for further payments to conclude the transaction, but
he refused to pay the balance amount until and unless he was satisfied that the suit property was free from all encumbrances and it had been
converted into freehold and the documents thereof be shown to him.
7. Thereafter, on 28th July, 2021, the plaintiff was shocked to see a public notice issued by an Advocate Shri. Shrutikirti Kumar, declaring the interest
of an anonymous person in buying the suit property from the defendants to which the plaintiff sent an objection letter on 30th July, 2021, asserting his
claim in respect of the suit property and also issued another public notice on 31st July, 2021 in Hindustan Times (English) and Hindustan (Hindi),
declaring his claim over the suit property. Once again, the defendant No.1, SREI Infrastructure Finance Limited and SREI Equipment Finance Limited
and Mr. Shrutikirti Kumar, Advocate filed their objections to the public notice of the plaintiff. The plaintiff has duly replied to these letters on 9th
August, 2021 clarifying his lawful claim over the suit property.
8. Thus, the suit had been filed stating that the defendants, at every stage had given false assurances to the plaintiff and the plaintiff had always been
and was still willing to perform his part of the obligations of making the balance payment but the defendants had failed to discharge their liability and
had consequently failed to execute the Sale Deed in favour of the plaintiff. The bank account statements of the plaintiff have also been filed with the
plaint in support of his contention that the balance amount was readily available with the plaintiff to make the payments. The following prayers have
been made in the suit:-
“i. pass a decree for Specific Performance of the Agreement to Sell in favour of the Plaintiff and against the Defendants, thereby
directing the Defendants to clear all encumbrances over the property bearing no. 28A, Prithvi Raj Road, New Delhi, admeasuring 3727
square yards and execute Sale Deed of the same in favour of Plaintiff after accepting the balance payment of Rs.26,35,50,000/- (Rupees
Twenty Six Crores Thirty Five Lakhs Fifty Thousand Only);
ii. pass ad-interim ex-parte order restraining the Defendants, their members, servants, agents, attorneys or any other person acting through
them or on their behalf from entering into agreements or alienating, selling, transferring or creating any further third party interests or
rights in property bearing no. 28A, Prithvi Raj Road, New Delhi, admeasuring3727 square yards;
iii. award cost of litigation of the present Suit in favour of the Plaintiff; and
iv. pass such other/ further Order(s) as this Hon'ble Court may deem fit and proper.â€
9. When the suit came up for hearing on 22nd November, 2021, Mr. Amit Sibal, learned senior counsel appearing on advance notice on behalf of the
defendants, questioned the maintainability of the suit and sought its rejection under Order VII Rule 11 (a), (c) & (d) of the Civil Procedure Code
(CPC). Thus, arguments on this aspect have been heard at length as advanced by Mr. Amit Sibal, learned counsel on behalf of the defendants and
Mr. Jayant K. Mehta, senior counsel on behalf of the plaintiff. Both sides have also filed short notes as well as judgments relied upon by them. I have
considered the same.
10. This Court had occasion to deal with this question of whether an objection raised under Order VII Rule 11 CPC can be considered even before
summons were issued in the suit, in Ashwani Kumar v. Aditya Mannohar Bhide and Ors., 2021 SCC OnLine Del 4752. This Court took the view that
on receipt of the plaint, the Court would act well within its power to consider whether the summons have to be issued and whether the suit as framed
was maintainable or not. These powers were drawn from Order VII Rule 10 & Rule 11 CPC and the Court could hear both parties on the question of
the maintainability of the suit. While dealing with the question of maintainability under Order VII Rule 11, it needs no repetition that what is to be
considered are the averments in the plaint and the documents annexed thereto. What would form the defence would not be relevant to decide this
question nor can the merit of the matter or evidence be looked into and considered.
11. Mr. Amit Sibal, learned senior counsel for the defendants, has submitted that the suit has been premised on an oral Agreement to Sell an
immovable property. Relying on the judgments of this Court in M/S. Harison Traders Ltd. v. Raj Bhalla, 2006 SCC OnLine Del 824 and Pelikan
Estates Pvt. Ltd. v. Kamal Pal Singh, 2004 SCC OnLine Del 641, it was submitted that the threshold for an oral agreement was higher than where
there was a written agreement, which burden was very heavy on the plaintiff to discharge and establish that the essential concomitants of the contract
existed.
12. It was the submission of the learned senior counsel that there were some basic ingredients for a legally valid and enforceable contract. Reliance
was placed on the judgment of this court in T. Muralidhar v. PVR Murthy, 2014 SCC OnLine Del 2326 to submit that in an enforceable Agreement to
Sell, the date of the agreement, the particulars of the consideration, the certainty as to the identity of the seller and purchaser, the identity of the
property subject matter of the agreement, certainty as to the other terms relating to the cost of conveyance to be borne by each party, the time within
which the conveyance of the properties was to be effected and the consensus between the parties in respect of these stipulations were necessary and
in the event, any of these constituents were missing, it had to be held that there was no valid contract at all.
13. In this regard, learned senior counsel submitted that from Para No.30 of the plaint, it was clear that between 2004 and 2020, the plaintiff had done
nothing in furtherance of the so-called oral Agreement to Sell. After having paid the earnest money of Rs. l,64,50,000/-, it seems strange that the
plaintiff took no action to get a conclusion to the Agreement. Moreover, the plaintiff had not disclosed the date when this oral Agreement has been
entered into, nor has he stated a timeline within which the defendants were to get all clearances and the conversion of the property done from
leasehold to freehold. Thus, saying that the balance consideration would have become payable only after these formalities were concluded was not
sufficient as without timelines, it could not be that the defendants had time till eternity and thus, there could be no loose ended Agreement to Sell which
could be validly enforced.
14. The learned senior counsel also submitted that the suit had been filed belatedly, as a suit for specific performance of the Agreement to Sell, if any
had existed, had to be sought within three years of the Agreement. From the inaction of the defendants, if they were not doing anything to remove
encumbrances and convert the suit property from leasehold to freehold, the plaintiff would reasonably have concluded long back that the defendants
were not going to execute the Sale Deed and there was no reason for the plaintiff to have waited for 17 long years, doing nothing. Thus, the suit was
barred by limitation.
15. Next, it was argued that the plaintiff was under an obligation to establish under Section 16(c) of the Specific Relief Act, 1963 (SRA for short) that
he had the wherewithal to conclude the contract and in the present case, the bank statements filed by the plaintiff disclosed that he had no means,
either in 2004 or even now. Further, his inaction from 2004 to 2020 amply disclosed that he was neither willing nor ready to make the payments or had
the financial capacity to do so. Thus, the relief of specific performance cannot be granted to him, in any event.
16. It was further submitted by the learned senior counsel for the defendants that the current value of the suit property was Rs.2,40,00,00,000/- based
on current circle rate and when the defendants were proceeding to sell the suit property at a market rate, the plaintiff with malafide intentions has
sought to file the present suit. However, the sale had been effected for valuable consideration on 2nd December, 2021. Thus, no relief could be now
granted to the plaintiff in the suit. Reliance has been placed on the decision of the Supreme Court in Dwarka Prasad Singh v. Harikant Prasad Singh,
(1973) 1 SCC 179 to submit that the suit could not be now proceeded with, unless the purchaser was also made a party and that the instant suit had
been filed fully knowing about the decision of the defendants to transfer the suit property for valuable consideration to another person. Therefore, too,
as no relief can be granted to the plaintiff, the suit deserved to be rejected.
17. It was also submitted that the requisite Court Fees had not been filed within the stipulated time, and for that reason also, the plaint was liable to
rejected.
18. Thus, it was prayed that the suit be rejected under Order VII Rule 11 CPC.
19. These submissions have been countered by Mr. Jayant K. Mehta, learned senior counsel for the plaintiff, submitting that the averments in the
plaint sufficiently established the existence of an oral agreement between the parties. There was no bar to an oral agreement to sell an immovable
property. The consideration was fixed at Rs.28,00,00,000/-, the receipts that have been placed on the record by the plaintiff indicated that the same
were issued against receipt of consideration for the sale of the suit property being property bearing No 28A, Prithvi Raj Road, New Delhi. The
receipts were signed by defendant No.2, on behalf of the defendant No.1 but the other defendants were also witnesses to the receipts. It was also
submitted that apart from the part payment, the plaintiff was also put in part possession of the suit property, the Letter of Possession being at Page
No.10 of the Plaintiff’s Documents.
20. The learned senior counsel for the plaintiff submitted that the Court Fees had been filed within time and the suit had also been filed within time. It
was submitted that the refusal to perform was disclosed on 23rd July, 2020, when the defendant No.1 stated so in a letter to the plaintiff. Therefore,
the suit having been filed on 15th November, 2021, had been filed well within the period of limitation.
21. Learned senior counsel for the plaintiff submitted that the receipts placed at page No. 6 onwards, of the Plaintiff’s Documents, substantiated
the stand of the plaintiff that there was an oral agreement between the parties, since the 7 receipts of various dates clearly set out that the money was
being received against the sale of the property bearing No. 28A Prithvi Raj Road, New Delhi. The total sale consideration agreed upon was also
recorded as Rs. 28,00,00,000/-. Thus, the essential features of an agreement were recorded in the receipt. No doubt, a time was not specified, by
which date the seller was to get the property converted into freehold. Relying on the judgment of the Supreme Court in Gunwantbhai Mulchand Shah
v. Anton Elis Farel, (2006) 3 SCC 634, it was submitted that under Section 46 of the Indian Contract Act, 1872, a reasonable time is to be considered
for the execution of an agreement in which no time had been fixed. However, what would be reasonable time would depend on the facts of the case
and that would be a matter of evidence. Thus, the suit could not be rejected at the threshold on this basis.
22. Reliance has been placed on the judgment of the Supreme Court in Sughar Singh v. Hari Singh, 2021 SCC OnLine SC 975, to submit that it was
not necessary for the plaintiff to produce ready money or proof that he has means to generate the consideration amount and it was sufficient, if in the
plaint, no specific phraseology or language has been used, but in spirit and substance, the plaintiff has disclosed his readiness and willingness as
required under Section 16(c) of the SRA.
23. As regards the merits of the submissions, learned senior counsel for the plaintiff submitted that these were irrelevant and such submissions made
by the learned senior counsel for the defendants were necessarily to be ignored at this juncture. It was further submitted that in any case, the plaintiff
should be granted an opportunity to prove his ability to pay the consideration amount. It was thus prayed that the summons be issued in the suit and the
trial proceeded with.
24. The issue regarding Court Fees may be dealt with at the outset. On 22nd November, 2021 a week’s time had been granted to the plaintiff to
furnish the Court Fees. Though it was argued on 8th December, 2021 that the Court Fees had not been paid, the record reflects that the Court Fees
had been paid on 2nd December, 2021, i.e., the Court Fees has been paid not within seven days but within ten days. This Court is of the view that
delay of three days in complying with the orders has not been caused willfully and the delay of three days is accordingly condoned. This Court finds no
reason to reject this plaint on this ground.
25. The arguments of the learned senior counsel for the defendants can be divided into two parts, one that the suit has to be rejected as it disclosed no
cause of action and second, the plaint has to be rejected as being barred under law, i.e. the law of limitation. It is trite that while determining the
question of rejection of a plaint, the contents of the plaint and the annexed documents are alone to be considered. What the defence is and what are
the merits of the contentions are irrelevant. It has been held so by the Supreme Court in a catena of judgements including Srihari Hanumandas Totala
v. Hemant Vithal Kamat, (2021) 9 SCC 99, wherein the following observations were made-
17. Order 7 Rule 11(d) CPC provides that the plaint shall be rejected “where the suit appears from the statement in the plaint to be
barred by any lawâ€. Hence, in order to decide whether the suit is barred by any law, it is the statement in the plaint which will have to be
construed. The court while deciding such an application must have due regard only to the statements in the plaint. Whether the suit is barred
by any law must be determined from the statements in the plaint and it is not open to decide the issue on the basis of any other material
including the written statement in the case…â€
26. This court in both Harrison Traders Ltd.(supra) and Pelikan Estates(supra), had underlined that though a contract for sale can be oral, the burden
of proof was heavy on the plaintiff to show the existence of a concluded, valid and binding contract between the parties. The burden of proof being
heavy on the plaintiff would not suffice to conclude that the plaintiff in the present case may not be able to discharge the same. Merely, because the
averments in Para No.30 reflects a gap of 17 years, no conclusion can be drawn that there was no oral agreement, as urged by the learned senior
counsel for the defendants. The plaintiff has claimed that he had been following it up with the defendants by sending them letters. An opportunity must
be granted to the plaintiff to prove those letters placed on the record and to establish what action he had taken in the interregnum. A presumption such
as the one pressed on behalf of the defendants can possibly be drawn at the end of a trial if the plaintiff was unable to discharge the burden of proof.
27. The next point urged on behalf of the defendants to state that no cause of action has been disclosed is that the so-called oral agreement did not
have any of the features of a valid agreement, since there was no date for the agreement, there was no consideration, there was no time limit
prescribed for obtaining sanctions etc., and there was no time for conclusion of the transaction. On the other hand, the plaintiff has relied on the
receipts and the Letter of Possession placed on the record from pages No.6 to 20 of the Plaintiff’s Documents to submit that all the features of a
valid agreement were established through these documents.
28. One such receipt may be referred to fruitfully. The receipt has a revenue stamp on which the defendant No.2 has signed with the date 12th April,
2004. In the said receipt, it is recorded that a sum of Rs.31,00,000/-has been received as ‘earnest money’ from the plaintiff, ‘against the sale
of a property’ ‘and the total sale consideration agreed upon is Rs.28 Crores’. The property has been described as property No. 28-A,
Prithvi Raj Road, New Delhi admeasuring 3727 sq. yards. Thus, the essential details that form part of an agreement are mentioned in the receipt.
29. It is also recorded in the said receipt that the sale was subject to the suit property being free from all kinds of lien, charges, encumbrances prior
sales, mortgages, litigations, claims etc. and that the seller had agreed to get the property freehold from the concerned authorities at his own expense
‘before the transfer of the said property in favour of the purchaser’. The significance of this clause cannot be construed at this juncture as to
whether it was open ended or inconclusive as no time line has been mentioned, when the issue is whether the plaint ought to be rejected for non-
disclosure of cause of action or under any law. That would be impinging on the merits of the case. This Court refrains from doing so.
30. Similarly, with regard to the question whether the plaintiff was ready or willing to discharge his obligations under Section 16(c) of the SRA, the
Court in Sughar Singh(supra) has reiterated the view taken by the Supreme Court in Syed Dastagir v. T.R. Gopalakrishna Setty, (1999) 6 SCC 337
that no specific pleadings are required under Section 16(c) to disclose the readiness and willingness to perform essential terms of the contract. No
specific phraseology being required, in spirit and substance and not in letter and form, the plaintiff must disclose his readiness and willingness to
perform his part of the contract. The plaintiff has filed a bank statement for the period 5th May, 2004 to 18th August, 2004 which does not really
suffice to show the readiness and willingness or financial ability to make the payments. Also, because a payment is stated to have been made on 3rd
January, 2005 for sum of Rs.50,000/- to the defendant No.2 recording therein that the total amount received so far from Mr. Vipin Sharma is
Rs.1,64,50,000/-, this sole document cannot be determinative of the ability of the plaintiff to pay the balance consideration.
31. But it has been also held by the Supreme Court in CS Venkatesh vs A.S.C. Murthy (D) by Lrs and Ors. (2020) 3 SCC 280 that the willingness to
perform could be gleaned by the court from the conduct of the plaintiff prior to and subsequent to the filing of the suit along with other attending
circumstances and that it was not necessary for the plaintiff to produce ready money, though it would be mandatory on his part to prove that he has
means to generate the consideration amount. In other words, the plaintiff should be given an opportunity to prove that he has the financial wherewithal
to pay the total consideration amount. Only because the pleadings do not reproduce the terminology in Section 16(c) of the SRA or that the plaintiff
has not placed on record his up-to-date bank statement cannot suffice to reject the plaint on this ground. Particularly in the backdrop of the fact that a
sum of Rs.1,64,50,000/- had been paid as ‘earnest money’ and the receipts duly signed by the defendant No.2 are on the record, the plea of the
plaintiff that consideration has passed hands cannot be dismissed at the threshold.
32. It was observed by the Supreme Court in Gunwanthhai Moolchand Shah (supra) that the question whether a plaintiff would be entitled to the
discretionary reliefs of specific performance has to be decided after giving the plaintiff an opportunity to show that he had always been and is ready
and willing to perform his part of the contract and to show that he had paid consideration and had been put in possession of the property. It may be
noted at this juncture, that the plaintiff is also relying on the Letter of Possession dated 22nd April, 2004 to submit that in part performance, the
defendants had also put him into possession of the servant quarters of the suit property. Once again, the learned senior counsel for the defendants has
sought to run down this Letter of Possession by submitting that the servant quarters were but a minuscule part of the entire suit property and could
establish no right of the plaintiff in the suit property nor could the plaintiff set up a case of part performance. However, this again is a determination of
the merits of the plea and cannot be a ground for rejection of a suit.
33. The observations of the Supreme Court in Gunwantbhai Moolchand Shah(supra) would also meet the arguments of the learned senior counsel for
the defendants that since the completion of the sale transaction was premised on the conversion of the suit property into free hold and since no time
limit had been fixed for the performance of the same, it could not be that the agreement was open ended and unenforceable. In that case, the
Supreme Court has clearly held that under Section 46, what is reasonable time would depend on the facts of the case. It be noted that in that case,
that there was a gap of 29 years and it was observed that when no time for performance was fixed, the court had to find the date on which the
plaintiff had noticed that the performance was refused and on finding that date, the limitation of three years was to be calculated. This would also be a
question of evidence. On this ground also, therefore, the plaint cannot be rejected either under Order VII Rule 1(a) or (d).
34. Ultimately, the Court while considering the matter under Order VII Rule 11 will only see whether a bundle of facts have been pleaded that reflect
a grievance of the plaintiff for which he is seeking a legal remedy, as has been observed by the Supreme Court in Church of Christ Charitable Trust
and Educational Charitable Society v. Ponniamman Educational Trust (2012) 8 SCC 706, in the following words-
“13. While scrutinizing the plaint averments, it is the bounden duty of the trial Court to ascertain the materials for cause of action. The
cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff the right to relief against the defendant.
Every fact which is necessary for the plaintiff to prove to enable him to get a decree should be set out in clear terms. It is worthwhile to find
out the meaning of the words “cause of actionâ€. A cause of action must include some act done by the Defendant since in the absence of
such an act no cause of action can possible accrue.â€
Whether he would succeed in his plea is a totally different matter. It is clear that on the material on record i.e., the plaint and the plaintiff’s
documents, it is clear that the suit has been filed on the basis of a cause of action and Order VII Rule 11(a) is not attracted to this case.
35. The argument that the suit is barred by limitation has been premised on the alleged fact that for 17 years neither party had taken action and it
ought to have been apparent to the plaintiff that the defendants were not going to act on the oral agreement and within three years thereof, the suit
ought to have been filed. However, it needs to be underlined that when a suit is to be rejected, it cannot be on the basis of inferences that the
defendant would like the court to draw. The plaintiff on the other hand has placed on record the public notice issued by him dated 18th July, 2020, the
objections filed by the defendants to them on 23rd July, 2020, the public notice issued by them dated 13th August, 2020 and the letter dated 22nd
September 2020 where the defendants have disputed the existence of an oral agreement to sell and it has also been claimed that it is not defendant
No.2 but defendant No.4, who was the Karta of the defendant No.1. Calculated from these dates, the suit filed on 15th November, 2021 is well within
the period of limitation.
36. Thus, the suit is not barred under the law and the plea of the defendants for rejection of the plaint under Order VII Rule 11(d) is also not made
out.
37. In the light of these findings on the maintainability of the suit, which needless to say are not to be construed as an opinion on the merits of the case,
summons in the suit and notices in the applications are directed to be issued to the defendants through email and through the counsel appearing on their
behalf.
38. The defendants may file their written statements and replies within 30 days from the date of service of the summons. The defendants shall also
file the affidavit of admission/denial of the documents filed by the plaintiff, failing which the written statement(s) shall not be taken on record.
39. The plaintiff is at liberty to file replication(s) to the written statement(s) and rejoinder(s) to the reply(ies) filed by the defendants before the next
date of hearing following the filing of the written statement(s)/reply(ies). The replication(s) shall be accompanied by the affidavit of admission/denial in
respect of the documents filed by the defendant(s), failing which the replication(s) shall not be taken on record.
40. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines.
41. List before the Joint Registrar on 25th April, 2022 for completion of service and pleadings.
42. The order be uploaded on the website forthwith.
