Raj Gopal Saxena Vs. Nisha Gopal Saxena and anr - Court Judgment

* IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on:

23. 10.2013 EFA (OS) 22 OF2013RAJ GOPAL SAXENA Through: ..... Appellant Mr. Praveen Chauhan with Mr. Vijay Kumar & Mr. Sharvan Sahny, Advs. versus NISHA GOPAL SAXENA & ANR Through: Nemo. ..... Respondents CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI % 1. MR. JUSTICE S.RAVINDRA BHAT(Open Court) The present appeal is directed against an order of the learned Single Judge dated 11th August, 2013 dismissing the appellant‟s execution petition.

2. The facts necessary for deciding this case are that the appellant and the respondents are brothers; they entered into a settlement on 22.5.2008 which was embodied in a compromise decree, in Suit No.179/2004. In terms of the compromise decree, the appellant was entitled to the first floor and portions above in property No.B-5/111, Safdarjung Enclave, New Delhi. The respondents on the other hand were entitled to the ground floor thereof. In terms of the compromise, both the parties had a right to sell their respective portions provided they first offered it to the other. The conditions embodied in Clauses 8 and 9 of the compromise decree also specified a time limit of 2 weeks within which the party given the choice of purchasing had to respond. In this case, the respondent sought to sell his share of the property and notified the appellant on 24.2.2010 through Registered AD notice, stating that the property was proposed to be sold for Rs.1.6 crores. The appellant/decree holder, upon receipt of this notice, replied on 8.3.2012. In the reply, the appellant denied that the market value of the property offered to be sold to the third party was Rs.1.6 crores and had stated that “the said Clause does not envisage that the judgment debtor could ask for an unrealistic price for the property which in fact is not a real market price of the property”. The reply to the notice went on to state that the appellant was ready and willing to purchase the property. However, no figure was mentioned. After expiry of the period of 2 weeks, the property was in fact sold and the sale deed executed in favour of the third party/proposed vendee.

3. The appellant had contended before the learned Single Judge in the execution proceedings preferred by him that the rights embodied in Clauses 8 and 9 were defeated in the circumstances of the case. It was contended that the respondent had indicated a sham transaction and not disclosed that he had received Rs.5,00,000/- from the third party even before the purported offer to sell was made. After considering the submissions, the learned Single Judge was of the opinion that the respondents‟ conduct could not be characterized as objectionable. The impugned order recorded that:

“On the other hand, learned counsel appearing for the judgment debtor submits that for the purposes of finalising a price, it was necessary for his client to enter into an agreement and take an advance payment. In the absence of any confirmed agreement, any offer that was made to the decree holder would a hypothetical offer. He further points out that in the conveyance deed executed by the judgment debtor a specific clause is made that the terms and conditions of the compromise deed dated 22.05.2008 shall be binding upon the vendee.

4. It is urged by the counsel that the learned Single Judge fell into an error in holding that there was nothing objectionable in the respondents entering into an agreement to sell and even accepting Rs.5,00,000/- as an advance. Counsel relied upon the decision in the case of Patel Rajnikant Dhulabhai vs. Patel Chandrakant Dhulabhai, 2008 (14) SCC561to contend that even entering into an agreement to sell amounts to creation of third party interest. In the present case, it is submitted by the counsel, such third party interest was created even before the offer was put to the appellant on 24.2.2010 rendering it a sham.

5. This Court is of the opinion that the interpretation placed by the appellant is unacceptable. Read together, Clauses 8 and 9 confer a right to either party to be notified about the proposal by the other to sell his share or portion of the property. In the event the second party – i.e. one issued with notice – intends to purchase it, the transaction has to be settled within 2 weeks. In the present case, the notice of 24.2.2010 had clearly mentioned the figure of Rs.1.6 crores as the consideration for the respondents‟ portion offered by the third party. In the reply dated 8.3.2010, the appellant did not mention a figure and merely characterized the consideration, offered by the third party i.e Rs.1.6 crores as „unrealistic‟. This contextual background is important to examine whether the acceptance of Rs.5,00,000/- by the respondent from the third party amounted to the offer – through the notice itself being „sham‟.

6. The execution petitioner i.e. the appellant nowhere mentions that the third party – ultimate purchaser in the present case – was not notified about the existence of the conditions – as required by Clause 9. In these circumstances, the explanation of the respondents that in order to arrive at a final price, some amount of advance needed to be taken and that in the absence of a binding transaction or a formal agreement to sell it cannot be contended that the offer itself amounts into a sham as is contended in this case, is not without merit. The appellant was never forthcoming about the figure which he was willing to purchase the property for. The right of refusal – in essence a pre-emptive right cannot be stretched so as to undermine the property owner‟s freedom to contract with a third party in the absence of any offer by the individual exercising the right – in this case, the appellant.

7. For the above reasons, the Court found no infirmity in the impugned judgment and order. The appeal is accordingly dismissed. S. RAVINDRA BHAT (JUDGE) NAJMI WAZIRI (JUDGE) OCTOBER23 2013 ak