SUNDEEP KHANNA Vs. A. DAS GUPTA

JUDGEMENT

(1.) THE case of the plaintiff is that defendant No. 1 Shri A. Das Gupta, who has since expired during pendency of the suit, had, vide agreement to sell dated 29.01.2005, agreed to sell the ground floor of the property No. 186, Golf Links, New Delhi, along with basement rights and 40% undivided interest in the land as also the right of first refusal in respect of first and second floor to him, for a consideration of Rs 3.30 crores and accepted advance amounting to Rs 10 lakh from him. It is further alleged that pursuant to the said agreement, the plaintiff carried out due diligence and it transpired during the course of due diligence that the property in question was actually an HUF property. It is further alleged that defendant No. 1, through his broker Askok Narang, sent a draft sale deed showing himself to be the sole owner of the property and agreeing to split the sale into two parts, one a sale deed and the other a fittings and fixtures agreement. The draft sale deed, therefore, had to be changed and defendant No. 1 agreed that he would get defendants 2 and 3 signed the sale deed. It is further alleged that pursuant to a communication dated 17.02.2005 from the plaintiff, the broker of the defendants sent two separate drafts, one of the sale agreement and another of a fittings and fixtures agreement, but they were not as per the terms of the agreement to sell between the parties. There was further exchange of correspondence between the parties. It is also alleged that defendant No. 1 had met the plaintiff on 17.03.2005 and agreed to the draft sent to him by the plaintiff except to the extent that he wanted to confirm from his lawyer with respect to making an endorsement on the original title deed. The defendant No. 1, however, sent a draft on 21.03.2005, which was virtually the same as the draft which was sent earlier and was rejected by the plaintiff. The plaintiff then sent a draft sale deed to defendant No. 1, along with a letter dated 21.03.2005. Defendant No. 1, however, returned the cheque of Rs 10 lakh received from the plaintiff along with a letter dated 24.03.2005 stating therein that the transaction stood cancelled. The plaintiff is, therefore, seeking specific performance of the agreement to sell dated 29.01.2005 or in the alternative a decree for recovery of Rs 1 crore as damages for the losses suffered by him on account of rise in the property prices and the cost of the time and effort spent by him, etc. Initially the plaintiff had claimed Rs 1 crore as damages, but, he amended the plaint during pendency of the suit so as to raise the quantum of damages to Rs 3.3 crore, primarily on the ground that he had to keep the sale consideration ready and, therefore, lost interest at the rate of 1% per annum and the market value of the suit property was between Rs 12 to 15 crore, around 12.01.2008.

(2.) THE defendants have contested the suit and have taken a preliminary objection that since there was no complete and concluded contract, the suit is not maintainable. They also took another preliminary objection that the suit was bad for mis-joinder of defendants 2 and 3. On merits, it is alleged that defendant No. 1 is the sole owner of Property No. 186, Golf Links, New Delhi. It has been denied that defendant No. 1 had agreed to sell 40% undivided share in the land and any first pre-emptive right of purchase to the plaintiff. The defendants have admitted receipt of cheque of Rs 10 lakh from the plaintiff, but have stated that the said cheque was never to be encashed and was to be held merely in trust by the defendant No. 1, till such time as the final terms were agreed upon and finalized between the parties. It is further alleged that the plaintiff and defendant No. 1 failed to arrive at any consensual terms and, therefore, the receipt dated 29.01.2005 executed by defendant No. 1 does not constitute a valid and legally enforceable agreement to sell. It is also alleged that defendant No. 1 informed the plaintiff that the property in the name of HUF was shown only for tax purposes and he was the Karta of the HUF and competent to alienate the property. It is also claimed that it was the plaintiff who had suggested two separate sale deeds with a view to reduce the incidence of stamp duty. It is also alleged that the draft sale deed dated 21.03.2005 furnished by the defendant to the plaintiff was not acceptable to the plaintiff on various issues inter alia FAR issues and requirements of written concurrence to any proposal for re-development/re-construction.

(3.) THE plaintiff has produced three witnesses by way of evidence whereas the defendants have examined one witness. In his affidavit by way of evidence, the plaintiff has stated that the defendant no.1 had stated to him that he was the owner of the property bearing number No. 186, Golf Links, New Delhi and holding himself out to be its sole owner, he entered into an agreement with him to sell the ground floor of the aforesaid property along with basement rights and 40% undivided interest in the land and also right of his refusal in respect of the first and second floor and the said agreement was reduced into writing on 29.01.2005. He has further stated that at the time of finalization of the sale deed, defendant no.1 projected to be the Karta of HUF comprising of himself and defendants no.2 and 3, though as per the records of L&DO, he was recorded as the owner. He has further stated that defendant no.1 had told him that he had shown the property as HUF for the purpose of filing of income tax returns and receiving tax benefits. According to him, the draft sale deed Ex.PW1/3 was sent to him by defendant no.1 on 1.12.2005 through his broker Mr. Ashok Narang. He has further stated that he also got carried out the due diligence/title search and it transpired that the property was actually owned by HUF and not by the defendant no.1 alone. Defendant no.1 then agreed that the property was actually owned by the HUF and promised to get defendants no.2 and 3 sign the sale deed. He has claimed that subsequent to his reminder dated 28.2.2005 (Ex.PW1/6). Mr. Ashok Narang, broker of defendant no.1, had sent two drafts of the sale agreement and fittings and fixtures agreement to him. Those drafts were not as per the terms of the original agreements entered into between him and defendant no.1 and, therefore, he requested Mr. Ashok Narang, to get the sale deed revised. According to him, in order to complete the transaction, he started working on defendants latest draft of sale deed and take out illogical and one-sided clauses which were contrary to the terms agreed between the parties. According to him, the clauses in the draft sale deed, contrary to the terms agreed between the parties were: