Ravinder Singh and anr. Vs. Naresh Kukreja - Court Judgment

SooperKanoon Citationsooperkanoon.com/697465
SubjectFamily;Property
CourtDelhi High Court
Decided OnMay-11-2009
Case NumberCS (OS) 1894/2008 and IA. No. 10992/2008
Judge Rajiv Sahai Endlaw, J.
Reported in160(2009)DLT350
ActsSpecific Relief Act - Sections 19; Transfer of Property Act - Sections 48 and 52; Delhi Rent Control Act
AppellantRavinder Singh and anr.
RespondentNaresh Kukreja
Appellant Advocate A.S. Chandhiok, Sr. Adv.,; Jasmeet Singh,; Saurabh Tiwari
Respondent Advocate Sandeep Sethi, Sr. Adv. for defendant No. 1 in CS (OS) 1894/2008 and IA. No. 10992/2008 (of the plaintiff Under Order 39 Rules 1 and 2 CPC) and ;
Cases ReferredK.L. Sethi v. S. Kishan Singh
Excerpt:
- - 4. the plaintiffs instituted the second suit on 9th january, 2009. it was stated in the plaint therein that the owner had intentionally failed to appear before the court on 10th november, 2008 and had inspite of the pendency of the suit for specific performance entered into and registered an agreement to sell on 3rd december, 2008 with the defendant no. thus even though the plaintiffs are willing to pay the same rent, the plaintiffs would be entitled to be so inducted as a tenant in the property only if found to be having a prima facie good case. 13. i find the plaintiffs to have failed on this account. it is not the case of the plaintiffs that the owner enjoyed any position of trust qua the plaintiffs. no buyer of immovable property wants to pay good market price for the property under litigation or with potential of litigation. 5824/2009 in cs (os) 1185/2008 decided on 1st may, 2009 given detailed reasons of a need for this court to in such cases ensure that the plaintiffs in such suits, in the event of ultimately being found unsuccessful in their claim, compensate the defendants for the losses suffered by the defendants owing to the mere pendency of the suit. as discussed in the said judgment, there is a need to obtain an undertaking from the plaintiffs to pay damages to the defendants upon being unsuccessful in the suit. however, since the subsequent purchaser has been permitted to let out the property i feel that three years rent or the price at which the plaintiff claims to have an agreement to sell should furnish a good estimate of the damages with which the plaintiffs should compensate the defendants. thus while dismissing the applications of the plaintiffs for interim relief and allowing the applications of the defendants for vacation of the ex parte order and for permitting them to let out the property, i also direct the plaintiffs to file the undertaking in terms of the order dated 30th march, 2009 as well as undertaking to this court, to jointly and severally pay to the subsequent purchaser a sum of rs 1 crore, in the event of plaintiffs claim being found to be false and within 45 days of the dismissal of the suit and subject to any order of the appellate court.rajiv sahai endlaw, j.1. the applications for interim relief in both suits are for consideration. the plaintiffs in both suits are the same. the sole defendant in the first suit (cs(os) no. 1894/2008) is the defendant no. 2 in the second suit (cs(os) no. 46/2009).2. the first suit has been filed for specific performance of an oral agreement to sell of 15th september, 2005 of shop no. 6-a khan market, new delhi. it is inter alia the case of the plaintiffs that shri m.r. kukreja, father of the sole defendant in the first suit (hereafter called owner) was the owner of the said shop; on his demise on 9th december, 1986 the shop devolved on his wife smt sheela devi; on demise of smt sheela devi on 5th may, 1991 the owner inherited the said shop on the basis of her will; that the owner applied for probate of the said will which was granted vide order dated 10th may, 2005; that the owner approached the plaintiffs to sell the said shop and after detailed negotiations an oral agreement of sale and purchase of the said shop was reached on 15th september, 2005, for a total consideration of rs 1 crore; that it was agreed that the owner would get the shop converted from lease hold to free hold and obtain the necessary permission from the l&do; that the plaintiffs at the time of oral agreement to sell paid the sum of rs 4 lacs by cheque issued on behalf of the plaintiff no. 2 by his daughter ms gurbani kaur and a sum of rs 6 lacs in cash to the owner; that the owner, however, kept delaying the matter and on plaintiffs' inquiry handed over to the plaintiffs correspondence exchanged with the l&do; from which it seemed that the owner was unable to get the shop mutated in his name in the l&do.; the plaintiffs further claim that they issued a legal notice dated 8th may, 2008 calling upon the owner to execute the sale deed and thereafter on 9th september, 2008 filed the suit for specific performance.3. though the first suit was accompanied with an application for ex parte interim relief but no ex parte interim relief was granted to the plaintiffs and notice of the suit and of the application was issued to the owner for 10th november, 2008. the owner though reported to be served did not appear before the court on 10th november, 2008 and the suit was adjourned to 31st march, 2009 for framing of issues and for arguments on the application. even then no interim relief was granted to the plaintiffs.4. the plaintiffs instituted the second suit on 9th january, 2009. it was stated in the plaint therein that the owner had intentionally failed to appear before the court on 10th november, 2008 and had inspite of the pendency of the suit for specific performance entered into and registered an agreement to sell on 3rd december, 2008 with the defendant no. 1 in the second suit (hereafter called subsequent purchaser) for a total sale consideration of rs 75 lacs; that the plaintiffs had come to know of the said agreement to sell on 24th december, 2008. the plaintiffs thus sued for declaration that the agreement to sell dated 3rd december, 2008 executed by the owner in favour of the subsequent purchaser was null and void and for restraining the subsequent purchaser who had in pursuance to the registered agreement to sell dated 3rd december, 2008 (supra) been put into possession of the shop from alienating, encumbering or parting with possession thereof. in the second suit vide ex parte order dated 13th january, 2009 the defendants therein were directed to maintain status quo qua suit property. the said order continues till date.5. the owner has denied any agreement to sell with the plaintiff. though the receipt of cheque for rs 4 lacs is admitted but it is pleaded that it was for sale of certain jewellery and other antique items to ms gurbani kaur who had admittedly issued the cheque. the receipt of rs 6 lacs in cash is denied. it is further his case that the shop had been let out by his father shri m.r. kukreja to one shri balwant rai pruthi in the year 1973 at a rent of rs 425/- per month. 6. the subsequent purchaser has pleaded that, he is the son of the aforesaid shri balwant rai pruthi. he falsifies the case of plaintiff of an oral agreement to sell and pleads himself to be a purchaser under an agreement of a date prior to the date of agreement alleged by the plaintiff in the following manner:(i) that the shop was originally owned by sh. m. r. kukreja who died bequeathing the shop to his wife smt. sheela devi.(ii) smt. sheela devi died on 5th may, 1991 leaving a son suresh kukreja and another son namely the owner herein, besides another son and daughter.(iii) sh. suresh kukreja s/o sheela devi in september, 1991 filed a petition in the court of the district judge delhi for probate of a registered will dated 20th july, 1990 of smt. sheela devi, whereunder the said shop was bequeathed to said sh. suresh kukreja.(iv) the owner filed objections to the said probate petition, claiming a will dated 21st march, 1991 of smt. sheela devi in his favour and whereunder inter-alia the shop had been bequeathed to him.(v) the aforesaid probate proceedings remained pending, when on 6th march, 2000, the owner withdraw his objections and gave no objection to the probate sought by his brother suresh kukreja. the said action of the owner is attributed to an agreement also dated 6th march, 2000 between the owner and suresh kukreja to equally divide the shop between themselves.(vi) sh. suresh kukreja vide agreement to sell dated 11th october, 2000 agreed to sell the shop to balwant rai pruthi for rs. 37,50,000/- and received advance of rs. 2 lac by pay order, with the balance payable after grant of probate and receipt of other clearances.(vii) however, suresh kukreja died on 2nd may, 2001. the owner on 7th august, 2001 filed application in probate proceedings to the effect that on demise of suresh kukreja the proceedings stood abated; that he had earlier withdrawn his objections because of agreement aforesaid with suresh kukreja but the widow of suresh kukreja was wriggling out of the agreement and thus he was filing fresh objections on the basis of latter will dated 21st march, 1991 of smt. sheela devi in his favour.(viii) the owner also filed a separate case for probate of will dated 21st march, 1991 of smt. sheela devi.(ix) the legal representatives of suresh kukreja in july, 2004 withdrew the proceedings for probate of will dated 20th july, 1990 of smt. sheela devi and admitted correctness of will dated 21st march, 1991 set up by the owner.(x) vide judgment dated 10th may, 2005 probate was granted of will dated 21st march, 1991 whereunder shop was bequeathed to the owner. documents have been filed in support of all the above.(xi) the father of subsequent purchaser, seing in aforesaid on attempt to defeat the agreement dated 11th october, 2000 of sale of shop to him, instituted in this court a suit for specific performance being cs(os) no. 1320/2006 and which is stated to be still pending. vide order dated 19th june, 2006 in this suit the owner was restrained from selling, alienating or transferring the shop.(xii) the owner himself had entered into a registered agreement to sell dated 19th july, 2004/25th february, 2005 w.r.t. the said shop with chawlas but the same was repurchased by the owner on 3rd december, 2008.(xiii) the father of subsequent purchaser having died, the agreement dated 3rd december, 2008 was ultimately executed by owner in favour of subsequent purchaser.(xiv) the subsequent purchaser pleads the owner to be in collusion with the plaintiff.7. in the aforesaid background, the applications for interim relief in the two suits are for consideration. the defendant no. 1 has also applied for permission to let out the property. it was stated on 30th march, 2009 that the shop was proposed to be let out at a minimum rent of rs. 3 lacs per month. since the counsel for the plaintiff had on that date sought adjournment it was directed that the plaintiff should file an undertaking to, in the event of the application being ultimately allowed, compensate the defendant no. 1 with rent at rs 3 lac per month w.e.f. 30th march, 2009 and till the date of the said application being disposed of. the said undertaking has not been filed as yet.8. the senior counsel for the plaintiffs has at the outset given two proposals. it is stated that the plaintiffs are ready to pay to the subsequent purchaser rs 75 lacs, for which consideration he claims to have agreed to purchase the shop, subject to being put into possession of the shop. alternatively it was stated that the plaintiffs are willing to take the shop on rent at rs. 3 lac per month which they will continue to pay to the subsequent purchaser and subject to further orders in this suit.9. neither of the aforesaid proposals of the plaintiffs is acceptable to the senior counsels for the defendants. it is contended that the plaintiffs have no case whatsoever and thus the question of the plaintiffs being entitled to any interim relief does not arise. it is pointed out that though the plaintiffs have in their complaint to the economic offences wing of the delhi police stated that a receipt had been executed by the owner of the sum of rs 10 lacs and the said receipt was kept with a property broker but neither in the notice preceding the suit nor in the pleadings in the court any reference thereto is made. it was argued that the same proved that the plaintiffs are fabricating the case. the mala fides of the plaintiffs are also sought to be established by referring to the wrong address of the defendant no. 2 given in the plaint in the first suit so as to avoid his service and of the wrong report of service having been placed on the file of the first suit to give an impression on 10th november, 2008 that the owner had been served and on the basis of which impression, ex parte relief which had not been granted in the first suit, was obtained in the second suit. it is further contended by the senior counsel for the subsequent purchaser that the second suit is misconceived inasmuch as the remedy, if any, of the plaintiffs against the subsequent purchaser under section 19 of the specific relief act is to seek specific performance against him and not to seek declaration with respect to the documents executed in favour of the subsequent purchaser. reliance was also placed of the order dated 2nd december, 2004 in cs(os) 82/1997 titled sardar gurbachan singh v. sardar avtar singh and the order dated 3rd january, 2007 in fao(os) 293/2004 titled sardar avtar singh v. sardar gurbachan singh and arising therefrom, on the aspect of interim orders in cases of specific performance of oral agreement to sell. it is contended that the pleadings do not show any agreement having been arrived at even orally of all the essential ingredients of an agreement to sell and thus the agreement to sell is unenforceable. the senior counsel for the owner has taken me through the service report etc to demonstrate the mischief played by the plaintiffs. it is also argued that the jewellery, for the sale of which the cheque for rs 4 lacs was received from the daughter of the plaintiff no. 2 is disclosed in the letters of administration obtained by the owner. it is further pointed out that though the plaintiffs had in their complaint to the economic offences wing referred to earlier agreement to sell of the owner with the chawlas but the same was suppressed from this court.10. the senior counsel for the plaintiffs in rejoinder relied upon: (a) joginder singh bedi v. sardar singh narang : air1984delhi319 on the position of a purchaser pendente lite;(b) guruswamy nadar v. p. lakshmi ammal : air2008sc2560 on the principle of lis pendens and section 52 of the transfer of property act; (c) maharwal khewaji trust v. baldev dass : air2005sc104 on the desirability of the court not permitting the nature of the property to be changed during the pendency of the proceedings; (d) bharti televentures ltd. v. bell south international asia pacific incorporated 88 (2000) dlt 87 on oral agreement to sell being common and as legally efficacious as written contracts; (e) sanjay gupta v. smt kala wati : 85(2000)dlt828 holding that section 19(b) of the specific relief act does not protect a transferee pending litigation.11. the senior counsel for the owner in sur rejoinder referred to ranjeet combine v. b.n. khanna : 86(2000)dlt687 laying down the principles for grant of interim orders.12. the aforesaid would thus show that it is not controverted that the shop should be let out. the question is whether it should be let out to the plaintiffs even if the plaintiffs are willing to pay the rent which the subsequent purchaser claims the property can fetch. the fear of the subsequent purchaser in this regard cannot be said to be misplaced. the subsequent purchaser is in lis with the plaintiffs as to the title to the shop. putting the plaintiffs in possession thereof even if as a tenant and subject to further orders of the court, would certainly affect the equities and possibility of the mischief on the part of the plaintiffs cannot be ruled out. thus even though the plaintiffs are willing to pay the same rent, the plaintiffs would be entitled to be so inducted as a tenant in the property only if found to be having a prima facie good case.13. i find the plaintiffs to have failed on this account. there does not appear to be any explanation whatsoever as to why, if there was an agreement to sell in favour of the plaintiffs, the same was not documented, as is the norm. even where the parties do not enter into formal agreement, a receipt of advance, mentioning the total price agreed and time for completion of sale is generally executed. it is not the case of the plaintiffs that the owner enjoyed any position of trust qua the plaintiffs. ordinarily one would expect a person who is entering into an agreement to purchase the property and who is parting with consideration not only in cheque but also in cash to at least take an acknowledgement or receipt of the same. in the absence thereof, there is nothing for this court to even prima facie frame an opinion that there was any such agreement and if so what was the said agreement. we have only the plaintiffs' word to the effect that the sale consideration agreed was of rs 1 crores. merely because the cheque payment of rs 4 lacs is admitted and/or merely because the property was ultimately sold by the owner to a sitting tenant having protection from eviction under the delhi rent control act, would also not help the plaintiffs.14. no relationship between the two plaintiffs has been disclosed. ordinarily one would expect the plaintiffs if intending to jointly acquire the property to equally share the advance/earnest money paid. the cheque issued is of neither of the plaintiffs but of the daughter of the plaintiff no. 2. undoubtedly, the owner has also not filed any document to show any sale of jewellery and antique of rs 4 lacs having been affected to the said daughter of the plaintiff. however, a prima facie view has to be taken of the transaction alleged by the plaintiffs and which is the subject matter of the suit and not of the transaction of the sale of jewellery. all that can be said at this stage is that the possibility of transaction alleged by the owner against which rs 4 lacs was received cannot be ruled out and it cannot be said to be so improbable so as to lead the court to believe the case of the plaintiffs.15. the senior counsel for the plaintiffs has in rejoinder also not furnished any explanation whatsoever qua the money receipt referred to in the complaint to the economic offences wing. no replications to the written statements have also been filed inspite of opportunity.16. yet another relevant factor is that the shop was admittedly in the possession of the subsequent purchaser/his father as a tenant. the senior counsel for the defendants during the course of hearing submitted that the market price of the shop today is of rs 4-5 crores. the senior counsel for the plaintiffs stated that the shop was agreed to be sold to the plaintiffs for rs 1 crore only since the same was tenanted and the constructive possession thereof was to be delivered to the plaintiffs as it is. however, what is significant is that the plaintiffs did not plead the said fact in the plaint and only in response to the arguments it has been argued that the price was with the sitting tenant. not only so, the plaintiffs for considerable time after alleged oral agreement did not take any step whatsoever. though the senior counsel for the plaintiffs argued that the mutation and freehold conversion was taking time and the owner had furnished photocopies of the correspondence with the l&do; to the plaintiffs and the owner have not offered any explanation as to how the plaintiffs came into possession thereof but in my view, mere possession by the plaintiffs of the copies of the correspondence of the owner with the l&do; does not lend any credence to their claim. normally the purchaser of immovable property does not wait for a period of over two and a half years for completion of transaction. similarly a seller of immovable property is generally not known to enter into such a protracted agreement. the trend of price of property in delhi and specially in the khan market has in the recent past been upwards only and it is highly improbable that the owner of the property merely on receipt of 10% of the sale price would freeze the price of his property. in the normal course, the owner would have given power of attorney to the purchaser for the purposes of mutation and freehold conversion and against execution of registered agreement to sell, execution/registration whereof is not dependent on mutation or freehold conversion, received the entire sale consideration.17. not only do i find the claim of the plaintiffs to be improbable, from the history of the shop disclosed by the subsequent purchaser and borne out from the documents filed, it appears highly improbable that the owner would have entered into an agreement or an oral agreement to sell of the shop. the property had already been agreed to be sold to the father of the subsequent purchaser as far back as in 2000, though by the brother of the defendant no. 2 who at that time with the consent of the owner was exercising rights as owner of the shop. it is not as if the father of the subsequent purchaser had given up his rights. he pursued the agreement by filing the suit for specific performance. the owner himself had also agreed to sell half the shop to the chawlas. i find it difficult to believe at this stage that the owner in these circumstances would have entered into an agreement to sell whereunder also he was not to receive the entire sale consideration immediately from the plaintiffs.18. the plaintiffs also could not have agreed to purchase without any investigation. a prudent purchaser would have enquired from the tenant in possession. such enquiries would have revealed the agreement to sell to tenant. enquiries at sub-registrar of assurances would have revealed the registered agreement to sell with chawlas. the plaintiffs have not mentioned any of the said facts. such conduct of plaintiffs is also found repugnant to the plea of the plaintiffs of oral agreement.19. the possibility of specific performance being granted to the plaintiffs' even if plaintiffs succeed in establishing an oral agreement is even otherwise remote, in the circumstances. though the registered agreement to sell in favour of subsequent purchaser is of a date subsequent to the date of oral agreement pleaded by the plaintiffs but the agreement in favour of subsequent purchaser has its roots in the agreement of 11th october, 2000 which is much prior to the agreement claimed by plaintiffs. under section 48 of the transfer of property act, latter rights are subject to rights previously created, where different rights at different times are created and where all such rights cannot coexist.20. the counsel for subsequent purchaser has after conclusion of hearing filed photocopies of following judgments:(i) mayawati v. kaushlaya devi : [1990]2scr350 on existence of valid, certain, enforceable agreement being a precondition of grant of relief of specific performance.(ii) sheel gehlot v. sonu kochar 2006 (ix) ad (delhi) 169 on oral agreement.(iii) aggarwal hotels p. ltd. v. focus properties pvt. ltd. : 63(1996)dlt52 on uncertain, vague and indefinite agreement.(iv) sanjeev narang v. prism buildcon pvt. ltd. 154 (2008) dlt 508 db on an agreement to sell on signatures are disputed and non production of receipt of alleged cash payment.(v) pelikan estates pvt. ltd. v. sh. kamal pal singh 113 (2004) dlt 290 on oral agreement.(vi) holy health & educational society (regd.) v. dda : 80(1999)dlt207 on concealment. however, in light of above, no further discussion on these is called for.21. the plaintiffs having not cleared the test of prima facie are not entitled to the interim relief. the plaintiffs are thus also not found entitled to preference in the matter of being put into possession of the shop as the tenant. the subsequent purchaser who has paid rs 75 lacs for the shop in comparison to the plaintiffs who claim to have paid rs 10 lacs only is for this reason also found to have the balance of convenience in his favour. in any case the plaintiffs cannot be prejudiced by letting of the shop.22. the next question which arises is whether the defendants should be restrained from further alienating the shop and/or encumbering the same. the plaintiffs having not found to have a prima facie case, the question of restraining the defendants so also does not arise.23. however, that is not the end of the matter. in this case even if there is no injunction, the principle of lis pendens enshrined in section 52 of the transfer of property act applies. even without any injunction it is virtually impossible for the defendant in a suit for specific performance to freely deal with the property. no buyer of immovable property wants to pay good market price for the property under litigation or with potential of litigation. i have in k.l. sethi v. s. kishan singh in ia. no. 5824/2009 in cs (os) 1185/2008 decided on 1st may, 2009 given detailed reasons of a need for this court to in such cases ensure that the plaintiffs in such suits, in the event of ultimately being found unsuccessful in their claim, compensate the defendants for the losses suffered by the defendants owing to the mere pendency of the suit. as discussed in the said judgment, there is a need to obtain an undertaking from the plaintiffs to pay damages to the defendants upon being unsuccessful in the suit. the defendants cannot be compelled to litigate for claiming damages from the plaintiffs, after the termination of the proceedings. obtaining an undertaking from the plaintiffs is meaningless unless it is specific. the question which thus arises is as to what should be the measure of damages with which the plaintiffs in this case should compensate the subsequent purchaser in the event of their case being found false. the subsequent purchaser even if desirous of selling the property at the market price today of rs 4-5 crores would be unable to fetch the same for the reason of pendency of the suit. however, since the subsequent purchaser has been permitted to let out the property i feel that three years rent or the price at which the plaintiff claims to have an agreement to sell should furnish a good estimate of the damages with which the plaintiffs should compensate the defendants. thus while dismissing the applications of the plaintiffs for interim relief and allowing the applications of the defendants for vacation of the ex parte order and for permitting them to let out the property, i also direct the plaintiffs to file the undertaking in terms of the order dated 30th march, 2009 as well as undertaking to this court, to jointly and severally pay to the subsequent purchaser a sum of rs 1 crore, in the event of plaintiffs claim being found to be false and within 45 days of the dismissal of the suit and subject to any order of the appellate court. the undertaking be filed within two weeks hereof.24. with the consent of the counsel for the parties the two suits are consolidated for the purposes of trial and common issues as under are framed in the two suits with the second suit being the lead suit and the nomenclature of the parties hereunder being as in the second suit.1. whether the defendant no. 2 had on 15th september, 2005 orally agreed to sell the shop to the plaintiffs and if so on what terms' opp2. whether the plaintiffs had paid advance sale consideration of rs 10 lacs to the defendant no. 2? opp3. whether the plaintiffs have been ready and willing to perform their part of the agreement to sell? opp4. whether the defendant no. 2 had received the cheque for rs 4 lacs as consideration for sale of jewellery/antiques to the daughter of the plaintiff no. 2? opp5. whether the discretion in the grant of relief of specific performance is to be exercised in favour of the plaintiffs opp6. to what relief, if any, are the plaintiffs entitled to against the defendants? opp7. whether the plaintiffs are entitled to the relief of declaration with respect to the agreement to sell and other documents executed by the defendant no. 2 in favour of the defendant no. 1, as null and void? opp8. relief. no other issue arises. the parties to file their list of witnesses within two weeks. the plaintiffs to file their affidavits by way of examination in chief within six weeks. evidence be recorded by the joint registrar. party shall be entitled to summon official witnesses before the joint registrar. list before the joint registrar on 10th august, 2009 for fixing the dates for cross examination of the witnesses of the plaintiffs.
Judgment:

Rajiv Sahai Endlaw, J.

1. The applications for interim relief in both suits are for consideration. The plaintiffs in both suits are the same. The sole defendant in the first suit (CS(OS) No. 1894/2008) is the defendant No. 2 in the second suit (CS(OS) No. 46/2009).

2. The first suit has been filed for specific performance of an oral agreement to sell of 15th September, 2005 of shop No. 6-A Khan Market, New Delhi. It is inter alia the case of the plaintiffs that Shri M.R. Kukreja, father of the sole defendant in the first suit (hereafter called owner) was the owner of the said shop; on his demise on 9th December, 1986 the shop devolved on his wife Smt Sheela Devi; on demise of Smt Sheela Devi on 5th May, 1991 the owner inherited the said shop on the basis of her Will; that the owner applied for probate of the said Will which was granted vide order dated 10th May, 2005; that the owner approached the plaintiffs to sell the said shop and after detailed negotiations an oral agreement of sale and purchase of the said shop was reached on 15th September, 2005, for a total consideration of Rs 1 crore; that it was agreed that the owner would get the shop converted from lease hold to free hold and obtain the necessary permission from the L&DO; that the plaintiffs at the time of oral agreement to sell paid the sum of Rs 4 lacs by cheque issued on behalf of the plaintiff No. 2 by his daughter Ms Gurbani Kaur and a sum of Rs 6 lacs in cash to the owner; that the owner, however, kept delaying the matter and on plaintiffs' inquiry handed over to the plaintiffs correspondence exchanged with the L&DO; from which it seemed that the owner was unable to get the shop mutated in his name in the L&DO.; The plaintiffs further claim that they issued a legal notice dated 8th May, 2008 calling upon the owner to execute the sale deed and thereafter on 9th September, 2008 filed the suit for specific performance.

3. Though the first suit was accompanied with an application for ex parte interim relief but no ex parte interim relief was granted to the plaintiffs and notice of the suit and of the application was issued to the owner for 10th November, 2008. The owner though reported to be served did not appear before the court on 10th November, 2008 and the suit was adjourned to 31st March, 2009 for framing of issues and for arguments on the application. Even then no interim relief was granted to the plaintiffs.

4. The plaintiffs instituted the second suit on 9th January, 2009. It was stated in the plaint therein that the owner had intentionally failed to appear before the court on 10th November, 2008 and had inspite of the pendency of the suit for specific performance entered into and registered an agreement to sell on 3rd December, 2008 with the defendant No. 1 in the second suit (hereafter called subsequent purchaser) for a total sale consideration of Rs 75 lacs; that the plaintiffs had come to know of the said agreement to sell on 24th December, 2008. The plaintiffs thus sued for declaration that the agreement to sell dated 3rd December, 2008 executed by the owner in favour of the subsequent purchaser was null and void and for restraining the subsequent purchaser who had in pursuance to the registered agreement to sell dated 3rd December, 2008 (supra) been put into possession of the shop from alienating, encumbering or parting with possession thereof. In the second suit vide ex parte order dated 13th January, 2009 the defendants therein were directed to maintain status quo qua suit property. The said order continues till date.

5. The owner has denied any agreement to sell with the plaintiff. Though the receipt of cheque for Rs 4 lacs is admitted but it is pleaded that it was for sale of certain jewellery and other antique items to Ms Gurbani Kaur who had admittedly issued the cheque. The receipt of Rs 6 lacs in cash is denied. It is further his case that the shop had been let out by his father Shri M.R. Kukreja to one Shri Balwant Rai Pruthi in the year 1973 at a rent of Rs 425/- per month. 6. The subsequent purchaser has pleaded that, he is the son of the aforesaid Shri Balwant Rai Pruthi. He falsifies the case of plaintiff of an oral agreement to sell and pleads himself to be a purchaser under an agreement of a date prior to the date of agreement alleged by the plaintiff in the following manner:

(i) That the shop was originally owned by Sh. M. R. Kukreja who died bequeathing the shop to his wife Smt. Sheela Devi.

(ii) Smt. Sheela Devi died on 5th May, 1991 leaving a son Suresh Kukreja and another son namely the owner herein, besides another son and daughter.

(iii) Sh. Suresh Kukreja s/o Sheela Devi in September, 1991 filed a petition in the court of the District Judge Delhi for probate of a registered Will dated 20th July, 1990 of Smt. Sheela Devi, whereunder the said shop was bequeathed to said Sh. Suresh Kukreja.

(iv) the owner filed objections to the said probate petition, claiming a Will dated 21st March, 1991 of Smt. Sheela Devi in his favour and whereunder inter-alia the shop had been bequeathed to him.

(v) The aforesaid probate proceedings remained pending, when on 6th March, 2000, the owner withdraw his objections and gave no objection to the probate sought by his brother Suresh Kukreja. The said action of the owner is attributed to an agreement also dated 6th March, 2000 between the owner and Suresh Kukreja to equally divide the shop between themselves.

(vi) Sh. Suresh Kukreja vide agreement to sell dated 11th October, 2000 agreed to sell the shop to Balwant Rai Pruthi for Rs. 37,50,000/- and received advance of Rs. 2 lac by pay order, with the balance payable after grant of probate and receipt of other clearances.

(vii) However, Suresh Kukreja died on 2nd May, 2001. The owner on 7th August, 2001 filed application in probate proceedings to the effect that on demise of Suresh Kukreja the proceedings stood abated; that he had earlier withdrawn his objections because of agreement aforesaid with Suresh Kukreja but the widow of Suresh Kukreja was wriggling out of the agreement and thus he was filing fresh objections on the basis of latter Will dated 21st March, 1991 of Smt. Sheela Devi in his favour.

(viii) The owner also filed a separate case for probate of Will dated 21st March, 1991 of Smt. Sheela Devi.

(ix) The legal representatives of Suresh Kukreja in July, 2004 withdrew the proceedings for probate of Will dated 20th July, 1990 of Smt. Sheela Devi and admitted correctness of Will dated 21st March, 1991 set up by the owner.

(x) Vide judgment dated 10th May, 2005 probate was granted of Will dated 21st March, 1991 whereunder shop was bequeathed to the owner. Documents have been filed in support of all the above.

(xi) The father of subsequent purchaser, seing in aforesaid on attempt to defeat the agreement dated 11th October, 2000 of sale of shop to him, instituted in this Court a suit for specific performance being CS(OS) No. 1320/2006 and which is stated to be still pending. Vide order dated 19th June, 2006 in this suit the owner was restrained from selling, alienating or transferring the shop.

(xii) The owner himself had entered into a registered agreement to sell dated 19th July, 2004/25th February, 2005 w.r.t. the said shop with Chawlas but the same was repurchased by the owner on 3rd December, 2008.

(xiii) The father of subsequent purchaser having died, the agreement dated 3rd December, 2008 was ultimately executed by owner in favour of subsequent purchaser.

(xiv) The subsequent purchaser pleads the owner to be in collusion with the plaintiff.

7. In the aforesaid background, the applications for interim relief in the two suits are for consideration. The defendant No. 1 has also applied for permission to let out the property. It was stated on 30th March, 2009 that the shop was proposed to be let out at a minimum rent of Rs. 3 lacs per month. Since the counsel for the plaintiff had on that date sought adjournment it was directed that the plaintiff should file an undertaking to, in the event of the application being ultimately allowed, compensate the defendant No. 1 with rent at Rs 3 lac per month w.e.f. 30th March, 2009 and till the date of the said application being disposed of. The said undertaking has not been filed as yet.

8. The senior counsel for the plaintiffs has at the outset given two proposals. It is stated that the plaintiffs are ready to pay to the subsequent purchaser Rs 75 lacs, for which consideration he claims to have agreed to purchase the shop, subject to being put into possession of the shop. Alternatively it was stated that the plaintiffs are willing to take the shop on rent at Rs. 3 lac per month which they will continue to pay to the subsequent purchaser and subject to further orders in this suit.

9. Neither of the aforesaid proposals of the plaintiffs is acceptable to the senior counsels for the defendants. It is contended that the plaintiffs have no case whatsoever and thus the question of the plaintiffs being entitled to any interim relief does not arise. It is pointed out that though the plaintiffs have in their complaint to the Economic Offences Wing of the Delhi Police stated that a receipt had been executed by the owner of the sum of Rs 10 lacs and the said receipt was kept with a property broker but neither in the notice preceding the suit nor in the pleadings in the court any reference thereto is made. It was argued that the same proved that the plaintiffs are fabricating the case. The mala fides of the plaintiffs are also sought to be established by referring to the wrong address of the defendant No. 2 given in the plaint in the first suit so as to avoid his service and of the wrong report of service having been placed on the file of the first suit to give an impression on 10th November, 2008 that the owner had been served and on the basis of which impression, ex parte relief which had not been granted in the first suit, was obtained in the second suit. It is further contended by the senior counsel for the subsequent purchaser that the second suit is misconceived inasmuch as the remedy, if any, of the plaintiffs against the subsequent purchaser under Section 19 of the Specific Relief Act is to seek specific performance against him and not to seek declaration with respect to the documents executed in favour of the subsequent purchaser. Reliance was also placed of the order dated 2nd December, 2004 in CS(OS) 82/1997 titled Sardar Gurbachan Singh v. Sardar Avtar Singh and the order dated 3rd January, 2007 in FAO(OS) 293/2004 titled Sardar Avtar Singh v. Sardar Gurbachan Singh and arising therefrom, on the aspect of interim orders in cases of specific performance of oral agreement to sell. It is contended that the pleadings do not show any agreement having been arrived at even orally of all the essential ingredients of an agreement to sell and thus the agreement to sell is unenforceable. The senior counsel for the owner has taken me through the service report etc to demonstrate the mischief played by the plaintiffs. It is also argued that the jewellery, for the sale of which the cheque for Rs 4 lacs was received from the daughter of the plaintiff No. 2 is disclosed in the letters of administration obtained by the owner. It is further pointed out that though the plaintiffs had in their complaint to the Economic Offences Wing referred to earlier agreement to sell of the owner with the Chawlas but the same was suppressed from this Court.

10. The senior counsel for the plaintiffs in rejoinder relied upon: (a) Joginder Singh Bedi v. Sardar Singh Narang : AIR1984Delhi319 on the position of a purchaser pendente lite;

(b) Guruswamy Nadar v. P. Lakshmi Ammal : AIR2008SC2560 on the principle of lis pendens and Section 52 of the Transfer of Property Act; (c) Maharwal Khewaji Trust v. Baldev Dass : AIR2005SC104 on the desirability of the court not permitting the nature of the property to be changed during the pendency of the proceedings; (d) Bharti Televentures Ltd. v. Bell South International Asia Pacific Incorporated 88 (2000) DLT 87 on oral agreement to sell being common and as legally efficacious as written contracts; (e) Sanjay Gupta v. Smt Kala Wati : 85(2000)DLT828 holding that Section 19(b) of the Specific Relief Act does not protect a transferee pending litigation.

11. The senior counsel for the owner in sur rejoinder referred to Ranjeet Combine v. B.N. Khanna : 86(2000)DLT687 laying down the principles for grant of interim orders.

12. The aforesaid would thus show that it is not controverted that the shop should be let out. The question is whether it should be let out to the plaintiffs even if the plaintiffs are willing to pay the rent which the subsequent purchaser claims the property can fetch. The fear of the subsequent purchaser in this regard cannot be said to be misplaced. The subsequent purchaser is in lis with the plaintiffs as to the title to the shop. Putting the plaintiffs in possession thereof even if as a tenant and subject to further orders of the court, would certainly affect the equities and possibility of the mischief on the part of the plaintiffs cannot be ruled out. Thus even though the plaintiffs are willing to pay the same rent, the plaintiffs would be entitled to be so inducted as a tenant in the property only if found to be having a prima facie good case.

13. I find the plaintiffs to have failed on this account. There does not appear to be any explanation whatsoever as to why, if there was an agreement to sell in favour of the plaintiffs, the same was not documented, as is the norm. Even where the parties do not enter into formal agreement, a receipt of advance, mentioning the total price agreed and time for completion of sale is generally executed. It is not the case of the plaintiffs that the owner enjoyed any position of trust qua the plaintiffs. Ordinarily one would expect a person who is entering into an agreement to purchase the property and who is parting with consideration not only in cheque but also in cash to at least take an acknowledgement or receipt of the same. In the absence thereof, there is nothing for this Court to even prima facie frame an opinion that there was any such agreement and if so what was the said agreement. We have only the plaintiffs' word to the effect that the sale consideration agreed was of Rs 1 crores. Merely because the cheque payment of Rs 4 lacs is admitted and/or merely because the property was ultimately sold by the owner to a sitting tenant having protection from eviction under the Delhi Rent Control Act, would also not help the plaintiffs.

14. No relationship between the two plaintiffs has been disclosed. Ordinarily one would expect the plaintiffs if intending to jointly acquire the property to equally share the advance/earnest money paid. The cheque issued is of neither of the plaintiffs but of the daughter of the plaintiff No. 2. Undoubtedly, the owner has also not filed any document to show any sale of jewellery and antique of Rs 4 lacs having been affected to the said daughter of the plaintiff. However, a prima facie view has to be taken of the transaction alleged by the plaintiffs and which is the subject matter of the suit and not of the transaction of the sale of jewellery. All that can be said at this stage is that the possibility of transaction alleged by the owner against which Rs 4 lacs was received cannot be ruled out and it cannot be said to be so improbable so as to lead the court to believe the case of the plaintiffs.

15. The senior counsel for the plaintiffs has in rejoinder also not furnished any explanation whatsoever qua the money receipt referred to in the complaint to the Economic Offences Wing. No replications to the written statements have also been filed inspite of opportunity.

16. Yet another relevant factor is that the shop was admittedly in the possession of the subsequent purchaser/his father as a tenant. The senior counsel for the defendants during the course of hearing submitted that the market price of the shop today is of Rs 4-5 crores. The senior counsel for the plaintiffs stated that the shop was agreed to be sold to the plaintiffs for Rs 1 crore only since the same was tenanted and the constructive possession thereof was to be delivered to the plaintiffs as it is. However, what is significant is that the plaintiffs did not plead the said fact in the plaint and only in response to the arguments it has been argued that the price was with the sitting tenant. Not only so, the plaintiffs for considerable time after alleged oral agreement did not take any step whatsoever. Though the senior counsel for the plaintiffs argued that the mutation and freehold conversion was taking time and the owner had furnished photocopies of the correspondence with the L&DO; to the plaintiffs and the owner have not offered any explanation as to how the plaintiffs came into possession thereof but in my view, mere possession by the plaintiffs of the copies of the correspondence of the owner with the L&DO; does not lend any credence to their claim. Normally the purchaser of immovable property does not wait for a period of over two and a half years for completion of transaction. Similarly a seller of immovable property is generally not known to enter into such a protracted agreement. The trend of price of property in Delhi and specially in the Khan Market has in the recent past been upwards only and it is highly improbable that the owner of the property merely on receipt of 10% of the sale price would freeze the price of his property. In the normal course, the owner would have given power of attorney to the purchaser for the purposes of mutation and freehold conversion and against execution of registered agreement to sell, execution/registration whereof is not dependent on mutation or freehold conversion, received the entire sale consideration.

17. Not only do I find the claim of the plaintiffs to be improbable, from the history of the shop disclosed by the subsequent purchaser and borne out from the documents filed, it appears highly improbable that the owner would have entered into an agreement or an oral agreement to sell of the shop. The property had already been agreed to be sold to the father of the subsequent purchaser as far back as in 2000, though by the brother of the defendant No. 2 who at that time with the consent of the owner was exercising rights as owner of the shop. It is not as if the father of the subsequent purchaser had given up his rights. He pursued the agreement by filing the suit for specific performance. The owner himself had also agreed to sell half the shop to the Chawlas. I find it difficult to believe at this stage that the owner in these circumstances would have entered into an agreement to sell whereunder also he was not to receive the entire sale consideration immediately from the plaintiffs.

18. The plaintiffs also could not have agreed to purchase without any investigation. A prudent purchaser would have enquired from the tenant in possession. Such enquiries would have revealed the agreement to sell to tenant. Enquiries at Sub-Registrar of Assurances would have revealed the registered agreement to sell with Chawlas. The plaintiffs have not mentioned any of the said facts. Such conduct of plaintiffs is also found repugnant to the plea of the plaintiffs of oral agreement.

19. The possibility of specific performance being granted to the plaintiffs' even if plaintiffs succeed in establishing an oral agreement is even otherwise remote, in the circumstances. Though the registered agreement to sell in favour of subsequent purchaser is of a date subsequent to the date of oral agreement pleaded by the plaintiffs but the agreement in favour of subsequent purchaser has its roots in the agreement of 11th October, 2000 which is much prior to the agreement claimed by plaintiffs. Under Section 48 of the Transfer of Property Act, latter rights are subject to rights previously created, where different rights at different times are created and where all such rights cannot coexist.

20. The counsel for subsequent purchaser has after conclusion of hearing filed photocopies of following judgments:

(i) Mayawati v. Kaushlaya Devi : [1990]2SCR350 on existence of valid, certain, enforceable agreement being a precondition of grant of relief of specific performance.

(ii) Sheel Gehlot v. Sonu Kochar 2006 (IX) AD (Delhi) 169 on oral agreement.

(iii) Aggarwal Hotels P. Ltd. v. Focus Properties Pvt. Ltd. : 63(1996)DLT52 on uncertain, vague and indefinite agreement.

(iv) Sanjeev Narang v. Prism Buildcon Pvt. Ltd. 154 (2008) DLT 508 DB on an agreement to sell on signatures are disputed and non production of receipt of alleged cash payment.

(v) Pelikan Estates Pvt. Ltd. v. Sh. Kamal Pal Singh 113 (2004) DLT 290 on oral agreement.

(vi) Holy Health & Educational Society (Regd.) v. DDA : 80(1999)DLT207 on concealment. However, in light of above, no further discussion on these is called for.

21. The plaintiffs having not cleared the test of prima facie are not entitled to the interim relief. The plaintiffs are thus also not found entitled to preference in the matter of being put into possession of the shop as the tenant. The subsequent purchaser who has paid Rs 75 lacs for the shop in comparison to the plaintiffs who claim to have paid Rs 10 lacs only is for this reason also found to have the balance of convenience in his favour. In any case the plaintiffs cannot be prejudiced by letting of the shop.

22. The next question which arises is whether the defendants should be restrained from further alienating the shop and/or encumbering the same. The plaintiffs having not found to have a prima facie case, the question of restraining the defendants so also does not arise.

23. However, that is not the end of the matter. In this case even if there is no injunction, the principle of lis pendens enshrined in Section 52 of the Transfer of Property Act applies. Even without any injunction it is virtually impossible for the defendant in a suit for specific performance to freely deal with the property. No buyer of immovable property wants to pay good market price for the property under litigation or with potential of litigation. I have in K.L. Sethi v. S. Kishan Singh in IA. No. 5824/2009 in CS (OS) 1185/2008 decided on 1st May, 2009 given detailed reasons of a need for this Court to in such cases ensure that the plaintiffs in such suits, in the event of ultimately being found unsuccessful in their claim, compensate the defendants for the losses suffered by the defendants owing to the mere pendency of the suit. As discussed in the said judgment, there is a need to obtain an undertaking from the plaintiffs to pay damages to the defendants upon being unsuccessful in the suit. The defendants cannot be compelled to litigate for claiming damages from the plaintiffs, after the termination of the proceedings. Obtaining an undertaking from the plaintiffs is meaningless unless it is specific. The question which thus arises is as to what should be the measure of damages with which the plaintiffs in this case should compensate the subsequent purchaser in the event of their case being found false. The subsequent purchaser even if desirous of selling the property at the market price today of Rs 4-5 crores would be unable to fetch the same for the reason of pendency of the suit. However, since the subsequent purchaser has been permitted to let out the property I feel that three years rent or the price at which the plaintiff claims to have an agreement to sell should furnish a good estimate of the damages with which the plaintiffs should compensate the defendants. Thus while dismissing the applications of the plaintiffs for interim relief and allowing the applications of the defendants for vacation of the ex parte order and for permitting them to let out the property, I also direct the plaintiffs to file the undertaking in terms of the order dated 30th March, 2009 as well as undertaking to this Court, to jointly and severally pay to the subsequent purchaser a sum of Rs 1 crore, in the event of plaintiffs claim being found to be false and within 45 days of the dismissal of the suit and subject to any order of the appellate court. The undertaking be filed within two weeks hereof.

24. With the consent of the counsel for the parties the two suits are consolidated for the purposes of trial and common issues as under are framed in the two suits with the second suit being the lead suit and the nomenclature of the parties hereunder being as in the second suit.

1. Whether the defendant No. 2 had on 15th September, 2005 orally agreed to sell the shop to the plaintiffs and if so on what terms' OPP

2. Whether the plaintiffs had paid advance sale consideration of Rs 10 lacs to the defendant No. 2? OPP

3. Whether the plaintiffs have been ready and willing to perform their part of the agreement to sell? OPP

4. Whether the defendant No. 2 had received the cheque for Rs 4 lacs as consideration for sale of jewellery/antiques to the daughter of the plaintiff No. 2? OPP

5. Whether the discretion in the grant of relief of specific performance is to be exercised in favour of the plaintiffs OPP

6. To what relief, if any, are the plaintiffs entitled to against the defendants? OPP

7. Whether the plaintiffs are entitled to the relief of declaration with respect to the agreement to sell and other documents executed by the defendant No. 2 in favour of the defendant No. 1, as null and void? OPP

8. Relief. No other issue arises. The parties to file their list of witnesses within two weeks. The plaintiffs to file their affidavits by way of examination in chief within six weeks. Evidence be recorded by the Joint Registrar. Party shall be entitled to summon official witnesses before the Joint Registrar. List before the Joint Registrar on 10th August, 2009 for fixing the dates for cross examination of the witnesses of the plaintiffs.