Essential precondition for enforcing specific performance of an agreement to sell an immovable property. Supreme Court in Mayawanti v. Kaushalya Devi, (1990) 3 SCC 1 in this regard is pertinent: “8. In a case of specific performance it is settled law, and indeed it cannot be doubted, that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. The Law of Contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts..... 18. The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the Courts direct the party in default to do the very thing which he contracted to do. The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem....” Essential precondition for enforcing specific performance of an agreement to sell an immovable property. Supreme Court in Mayawanti v. Kaushalya Devi, (1990) 3 SCC 1 in this regard is pertinent: 8. In a case of specific performance it is settled law, and indeed it cannot be doubted, that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract. The Law of Contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts..... 18. The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the Courts direct the party in default to do the very thing which he contracted to do. The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem....” 6. The essential ingredients of an agreement for sale of an immovable property were examined by me in Vijay Kumar Dabas v. Chahat Ram and Another, CS(OS) No. 506/2010, decided on 30.8.2012, wherein this Court held as under: “The question whether the agreement of this nature is a valid and concluded contract or not came up for consideration before me in Braham Singh v. Sumitra and Others [CS(OS) No. 1208/2011), and while deciding the IA 8087/2011 (under Order 39 Rules 1 and 2, CPC) filed in the above referred suit on 1.8.2011, I, inter alia, observed and held as under— 4. Some of the essential ingredients of an Agreement to Sell an immovable property are (i) identity of vendor and purchaser (ii) complete description of the property subject matter of the agreement (iii) amount of consideration to be paid by the purchaser to the seller (iv) time within which the agreement is to be performed and (v) earnest money if any paid to the vendor, if one of these essential ingredients are missing, the agreement between the parties would not amount to concluded contract. A Division Bench of this Court in Mirahul Enterprises & Ors. v. Mrs. Vijaya Srivastava, AIR 2003 Delhi 15 referring to the provisions contained in Section 10 of Specific Relief Act, observed that a true contract requires the agreement of the parties, freely made with full knowledge and without any feeling of restraint and the parties must be ad idem on the essential terms of the contract and in case it is an Agreement to Sell of immovable property, the law requires that it must certainly identify the property agreed to be sold and the price fixed as consideration paid or agreed to paid. 5. In Aggarwal Hotels (P) Ltd. v. Focus Properties (P) Ltd., 63 (1996) Delhi Law Times 52, this Court, inter alia, observed as under— ‘The four ingredients necessary to make an agreement to sell are: (i) particulars of consideration; (ii) certainty as to party i.e. the vendor and the vendee; (iii) certainty as to the property to be sold; and (iv) certainty as to other terms relating to probable cost of conveyance to be borne by the parties, time, etc. If these ingredients are lacking in the agreement, the obligations contemplated under Section16 for specific performance for immovable property would not arise. It is in this background that the receipt dated June 17, 1995 has to be examined.’ This judgment was relied upon by this Court in CS(OS) No. 82/1997, Sardar Gurbachan Singh and Ors. v. Sardar Avtar Singh and Ors., while deciding IA No. 5955/2004. 196 (2013) Delhi Law Times 57 Delhi High Court V.K. Jain, J. NINA GARMENTS (PVT.) LTD.—Plaintiff versus UNITECH LTD.—Defendant CS(OS) No. 1368 of 2009—Decided on 24.9.2012 6. "The agreement, alleged to have been executed by defendant No. 1 in favour of the plaintiff on 20th September, 2006, does not identify and in fact could not have identified the property subject matter of the agreement for the simple reason that no plot of land had been allotted to the defendants by that time. At the time this agreement is alleged to have been executed in favour of the plaintiff, it was not known in which colony plot would be allotted to the defendants, when the allotment would take place what would be the size of the plot and which particular plot would be allotted to the defendants. Therefore, the property, subject matter of the agreement, was incapable of identification at the time the agreement is alleged to have been executed. It is, therefore, difficult to deny that the agreement dated 20th September, 2006, does not constitute a valid and concluded contract for sale of an immovable property to the plaintiff" 7." The learned Counsel for the plaintiff has relied upon the provisions of Section13 of Specific Relief Act, which deal with right of purchaser or lessee against a person, who at the time of contract has no title or has an imperfect title but subsequently acquires an interest in the property. The reliance on this provision is wholly misplaced since in the case before this Court there was no valid agreement to sell in favour of the plaintiff as at the time, the agreement is alleged to have executed. The learned Counsel has also relied upon Pundlik Daryaji v. Jainarayan Maliram Shop & Ors., AIR 1949 Nag 83; Round The Clock Stores Ltd. v. Aggarwal Entertainment Private Limited, MANU/DE/2147/2008 and Indraraj Singh v. Chaitram & Anr., AIR 1929 Nag 194. None of these judgments deal with the issue involved in this case and therefore these judgments are of no help.” 7." In the present case, neither the application for registration nor the receipts issued by the defendants company, which are the only documents evidencing the transactions between the parties, discloses the area of the apartment for allotment of which the plaintiff was registered with the defendant company. Had the proposed residential complex actually come up, the apartments in the complex could have been of different sizes. Unless the area of the apartment is agreed between the parties, there cannot be a concluded contract for sale of the apartment. Had the residential apartments actually come up at 7, Curzon Road, New Delhi, it was quite possible for the plaintiff to refuse to accept the allotment on the ground that the area of the apartments was lesser or larger than its requirements. There was absolutely no certainty with respect to the description or identity of the properties which are alleged to have been booked by the plaintiff with the defendant. This is also not the case of the plaintiff that the area or even the tentative area of the residential apartments registered by it with the defendant was actually agreed between the parties. Therefore, one of the essential ingredients of agreement to sell an immovable property is missing in this case" 8. "Neither the applications for registration nor the receipts issued by the defendant to the plaintiff discloses the consideration for sale of the residential apartments to the plaintiff at the proposed residential scheme at 7, Curzon Road, New Delhi. In the absence of an agreed consideration, there could always be disputed between the parties with respect to the price of residential flats, had such flats actually been constructed at 7, Curzon Road, New Delhi. The sale consideration sought by the plaintiff could always have been disputed by the plaintiff on the ground that the same was excessive and was never agreed by it. Therefore, yet another essential ingredient of an agreement to sell of an immovable property is missing in this case" "One more essential ingredient of a valid agreement to sell of an immovable property missing in this case is the time within which the agreement was to be performed. Neither the application for registration nor the receipts spell out any particular time limit for allotment of the residential apartments at 7, Curzon Road, New Delhi to the plaintiff. In fact, the application for registration clearly indicates that there was no concluded contract between the parties for sale/ allotment of residential apartments at 7, Curzon Road, New Delhi. It is specifically stated by the plaintiff in the application for registration that in case the residential apartments were allotted to it would execute a necessary agreement for allotment/purchase within the time stipulated by the plaintiff" 9. "In the application for registration, the plaintiff specifically agreed that if the defendant is not in a position to allot residential apartments booked by it, the plaintiff would be considered either for allotment of an alternate property or the refund of the amount deposited by the plaintiff with simple interest @ 12% per annum. Since there was no concluded contract between the parties for sale/ allotment of the residential apartments to the plaintiff at 7, Curzon Road, New Delhi, the defendant was well within its right in refunding the amount deposited by the plaintiff along with simple interest @ 12% per annum, instead of offering an alternate property, though on merits, the case of the defendant is that it had actually offered the flat at Ferozshah Road, New Delhi to the plaintiff but the offer was not availed by the plaintiff company"
Posted on: Mon, 16 Sep 2013 16:31:04 +0000
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