A K JAJU Vs. AVNI KUMAR

JUDGEMENT

(1.) In a suit for recovery of possession, mesne profits and permanent injunction, the plaintiff filed an IA.11417/01 under Order XXXIX Rule 7 CPC seeking a direction to the defendant to pay to him use and occupation charges in respect of the suit property @ Rs.80,000/- per month during the pendency of the suit. The defendant, on the other hand, on his appearance, came up with an IA.1008/02 under Section 8 of the Arbitration and Conciliation Act, 1996 seeking reference of disputes forming subject matter of the suit to arbitration or in the alternative to stay the proceedings in the suit. In the event of aforesaid application made by the defendant being allowed, it may not be open to take up IA.No.11417/01 as it will be for the arbitrator concerned to adjudicate upon all the disputes, including the entitlement of the plaintiff to recover use and occupation charges in respect of the suit premises at the rate stated aforesaid. It would, therefore, be appropriate to deal with IA.1008/02 first.

(2.) Facts relevant for disposal of IA.1008/02 may be stated briefly. One Ms.Rachna Sethi owned a plot of land bearing No.D-125, Anand Niketan, New Delhi admeasuring 262.85 sq. yds. being a perpetual sub-lessee thereof. She entered into a property development agreement dated 30.7.1997 with the plaintiff, in pursuance of which the plaintiff constructed a two storeyed building with basement, on the said plot at his own costs. In consideration, in terms of the said property development agreement, the entire second floor of the suit property fell to the share of the plaintiff with a right to sell the same. An agreement to sell was executed between the parties on 9th of January, 1999 in respect of the second floor of the property for a total sale consideration of Rs.65 lakhs, out of which a sum of Rs.20 lakhs was paid by the defendant to the plaintiff on the very date when the agreement to sell was executed and the balance of Rs.45 lakhs was payable as stipulated under the agreement. This agreement contained an arbitration clause. Transfer by sale was to be effected on conversion of the land from leasehold to freehold in favour of Ms.Rachna Sethi. Another agreement to sell came to be executed between the parties on 3rd of April, 1999. Unlike the agreement dated 9.1.1999, the second one did not contain any arbitration clause. With the execution of the said agreement dated 3.4.1999, the possession of the flat on second floor of the property was handed over by the plaintiff to the defendant and the defendant was to make payment of Rs.20,000 per month as licence fee till such time the balance consideration amount of Rs.45 lakhs was paid. In a course of time, conversion from leasehold to freehold of the land underneath the building, was permitted by the Delhi Development Authority and a conveyance deed in that respect was executed in favour of Ms.Rachna Sethi on 10th of August, 2001. The plaintiff, thereafter, by a letter dated 15.10.2001 called upon the defendant to pay the balance consideration amount of Rs.45 lakhs to facilitate transfer of the flat on the second floor in his favour. The defendant, however, failed to make the payment of the balance consideration amount to get the suit premises transferred in his favour. On the contrary, the defendant got a legal notice dated 30.10.2001 issued to the plaintiff through an Advocate making certain claims against him on account of the aforesaid transaction. According to the plaintiff, as the defendant is not prepared to perform his obligation under the agreement by paying the balance consideration amount of Rs.45 lakhs, he is liable to pay in addition to Rs.1.20 lakhs on account of liquidated damages as per agreement, the amount of Rs.45 lakhs with interest thereon @ 36% per annum from October/November, 2001 or in the alternative, he is liable to immediately surrender vacant physical possession of the suit premises to the plaintiff since his licence has already been revoked through a legal notice dated 3.12.2001. It is claimed that out of part payment of Rs.20 lakhs, an amount of Rs.5,20,000/- stands adjusted on account of licence fee for the period from October, 1991 to December, 2001 @ Rs.20,000/- per month. This apart, the defendant is pleaded to be liable to pay mesne profits @ Rs.80,000/- per month or at such higher rate as determined by the Court so long the defendant continues in occupation of the suit premises.

(3.) The defendant on the other hand pleads that time was essence of the contract and as the plaintiff failed to discharge his obligation under the agreement in that respect and further as the suit premises was subject to litigation, which the defendant came to know at a subsequent point of time after entering into the said agreement with the plaintiff, the agreement could not be performed. It is claimed that since non-performance of the agreement was attributable to the plaintiff, he is liable to refund all the amount received by him from the defendant, which includes a sum of Rs.20 lakhs plus interest @ 36% per annum from the date of receipt of the said amount, apart from damages to the tune of Rs.1 crore. The defendant asserts that the delivery of possession of the suit premises was in part performance of the contract and, therefore, he is entitled to continue to hold possession of the suit property until his entire claim, as aforesaid, is satisfied by the plaintiff.