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2007 DAILYLAW 2419 (DEL)

RAJEEV K. GOEL v. NARAYAN D. KOTLIA

2007-09-24

Sanjay Kishan Kaul

body2007
SANJAY KISHAN KAUL, J. ( 1 ) THE plaintiff has filed a suit for specific performance, permanent and mandatory injunction or in lieu thereof for recovery of damages. The dispute pertains to a Receipt-cum-Sale Agreement dated 12. 1. 2006 in respect of shop office on the first floor, Manish Plaza, Mayur Vihar-II, Delhi-110091. The receipt is for a sum of Rs. 2. 00 lakh as advance payment against a total consideration of the said shop of Rs. 38. 50, leaving a balance of Rs. 36. 50 lakh. The schedule for the balance amount is as under: 1. First installment of Rs. 5. 00 lakh by 20. 1. 2006. 2. Second installment of Rs. 16. 50 lakh by 28. 2. 2006. 3. Balance amount of Rs. 15. 00 lakh by 1. 4. 2006. ( 2 ) THE Receipt-cum-Sale Agreement has been signed by both the parties and is on the papers of M/s. Goel Associates, the brokers. ( 3 ) IT is the case of the plaintiff that the commitment for payment of the first installment of Rs. 5. 00 lakh was fulfilled by handing over cheques for the said amount to the brokers on 21. 1. 2006. The cheques were not encashed. The plaintiff has placed on record a communication dated 2. 3. 2006 addressed to the defendants informing them about the fact that though the plaintiff had paid a sum of Rs. 5. 00 lakh vide two cheques of Rs. 2. 00 lakh and Rs. 3. 00 lakh, the same had not been encashed. The letter further states that the second installment of rs. 16. 50 lakh was ready, requesting encashment of the two cheques issued earlier and expressing the readiness and willingness of the plaintiff to comply with the terms of the agreement. ( 4 ) THE aforesaid letter was replied by the defendants vide reply dated 13. 3. 2007. The grievance made in the letter was that there was failure to make the payment of Rs. 5. 00 lakh by 20. 1. 2006 and of Rs. 16. 50 lakh by 28. 2. 2006. The defendants denied the knowledge of any cheques of Rs. 5. 00 lakh sent to them. In view of the failure of the plaintiff to comply with the payment schedule, the Receipt-cum-Sale Agreement was cancelled and the advance of Rs. 2. 00 lakh forfeited. 00 lakh by 20. 1. 2006 and of Rs. 16. 50 lakh by 28. 2. 2006. The defendants denied the knowledge of any cheques of Rs. 5. 00 lakh sent to them. In view of the failure of the plaintiff to comply with the payment schedule, the Receipt-cum-Sale Agreement was cancelled and the advance of Rs. 2. 00 lakh forfeited. ( 5 ) THE next communication on record is of the legal notice dated 28. 3. 2006 sent through counsel by the plaintiff to the defendants reaffirming to what had been stated earlier and further stating that the cheques of Rs. 5. 00 lakh were handed over by the broker to the mother of defendant No. 2 in good faith and enclosed copies of the said cheques. The cheque for Rs. 3. 00 lakh has been issued by the wife of the plaintiff, Ms. Renu Goel and the cheque for Rs. 2. 00 lakh by Absolute securities Limited. In reply to the same through counsel vide letter dated 18. 4. 2006, the defendants denied the averments and finally repudiated the agreement. ( 6 ) IN the plaint, the plaintiff has relied upon the aforesaid documents and has also made an averment that the plaintiff had made full arrangement for payment of the amount and even visited the office of the Sub-Registrar for execution and registration of the Sale Deed, but it were the defendants, who failed to arrive for execution of the Deed failing which the suit was filed. ( 7 ) THE defendants filed the written statement contesting the suit and have pleaded that the plaintiff was unable to meet the financial commitment under the receipt-cum-Sale Agreement dated 12. 1. 2006 and thus the defendants have rightly repudiated the agreement. ( 8 ) LEARNED counsels for the parties have been heard on the question of interim relief. It may be noticed that the status quo order dated 19. 7. 2006 is continuing in favour of the plaintiff. ( 9 ) ON 18. 9. 2007, it was noticed during the course of hearing that the real dispute, in view of the aforesaid averments, was as to whether the plaintiff was possessed of the requisite funds to have complied with the terms and conditions of the Receipt-cum-Sale Agreement dated 12. 1. 2006. ( 9 ) ON 18. 9. 2007, it was noticed during the course of hearing that the real dispute, in view of the aforesaid averments, was as to whether the plaintiff was possessed of the requisite funds to have complied with the terms and conditions of the Receipt-cum-Sale Agreement dated 12. 1. 2006. ( 10 ) IT is trite to say that in a suit for specific performance the plaintiff has to be ready and willing to perform its obligations and thus must be possessed of sufficient means. Learned counsel for the plaintiff pleaded that it is not necessary that the amount would be lying in the account of the plaintiff and the plaintiff had made requisite arrangement for payment of the amount by having sufficient funds either in his own account or in his wife's account or in the account of his brother or in the accounts of companies run by his brother. In support of the same, the plaintiff has also filed a statement of accounts of various banks where such accounts are stated to have been maintained. ( 11 ) IT may be noticed that though the plaintiff claims to have sent cheques of rs. 5. 00 lakh on 21. 1. 2006, the defendants denied receipt of the same. The cheques were not encashed. It was, thus, noticed that for the plaintiff to succeed in the interim application, the plaintiff must at least show that he was possessed of sufficient means to have made payments of Rs. 5. 00 lakh on 20. 1. 2006, of Rs. 16. 50 lakh on 28. 2. 2006 and of the balance amount of Rs. 15. 00 lakh on 1. 4. 2006. Learned counsels for the parties stated that they will prepare a short synopsis on the basis of the documents placed on record insofar as the ability of the plaintiff to make the payment is concerned. The parties have accordingly placed short synopsis on record. ( 12 ) THE plaintiff has stated that insofar as the payment of first installment of rs. 5. 00 lakh is concerned, Rs. 3. 00 lakh was to the debit of his wife's account, ms. Renu Goel. On 13. 1. 2007, the said account had a credit balance of rs. 3,19,415. 58. It is, however stated that it was only on 17. 2. 2006 that the said account was reduced to Rs. 2,57,813. 5. 00 lakh is concerned, Rs. 3. 00 lakh was to the debit of his wife's account, ms. Renu Goel. On 13. 1. 2007, the said account had a credit balance of rs. 3,19,415. 58. It is, however stated that it was only on 17. 2. 2006 that the said account was reduced to Rs. 2,57,813. 58, albeit without the cheque being encashed. Insofar as the amount of Rs. 2. 00 lakh is concerned, the same was to the debit of the account of M/s. Absolute Securities Limited. The account did not have sufficient funds as on 20/21. 1. 2006, but it is stated that as on 24. 1. 2006, the credit amount stood at Rs. 2,07,751. 06. It is, thus, pleaded that if the cheque handed over on 21. 1. 2006 was presented on 22. 1. 2006, it would not have come to the account of the issuing party before 24. 1. 2006. ( 13 ) THE ability to pay the second installment is explained thereafter. The plaintiff seeks to rely upon the accounts of his brother Mr. Sanjay Kumar Goel and M/s. First Impression Corporate Services Limited, which is stated to be a company of the brother of the plaintiff. The plaintiff states that if the amounts available in the three accounts are taken into consideration of rs. 2,42,027. 52, 2,17,396. 10 and 14,65,102. 89, the total is Rs. 19,24,526. 51, which would be sufficient to meet the liability. ( 14 ) THE last and final installment of Rs. 15. 00 lakh had to be paid on or before 1. 4. 2006 and it is pleaded that an amount of Rs. 12,16,442. 15 was available consisting of Rs. 9,36,170. 99 from the account of M/s. First Impression Corporate services Limited and Rs. 2,80,271. 16 from another account of the same party. It is stated that the balance amount of Rs. 2,83,557. 85 would have been arranged from family members and friends. ( 15 ) LEARNED counsel for the defendants, on the other hand, has pointed out that the whole basis by which the plaintiff shows its ability to pay is erroneous. Initially cheques were never received and had they been received at least one of those, if not both, would have bounced. The same accounts are being debited to clear the liabilities by the wife of the plaintiff since the balance got reduced below Rs. 3. Initially cheques were never received and had they been received at least one of those, if not both, would have bounced. The same accounts are being debited to clear the liabilities by the wife of the plaintiff since the balance got reduced below Rs. 3. 00 lakh within a short period of about a month. Learned counsel has referred to the statement of account filed by the plaintiff and has filed a chart. It would be useful to reproduce the chart. Sr. No. 1 Renu Goel 3,19,415. 58 2,57,313. 58 3. 16,613. 43 Saving 2 Rajeev K. Goel 4172. 49 98562. 49 97993. 64 Saving 3 Sanjay K. Goel 3,24,866. 52 2,41,599. 42 1,20,755. 52 Saving 4 Meenakshi Goel 2,30,136. 1 2,17,330. 10 2,47,475. 67 Saving 5 Absolute Securities 7751. 16 2,07,751. 16 2,07,681. 16 Current Particular 19. 01. 200626. 02. 2006 31. 03. 2006 Type of Account Ltd 6 First Impression Corporate Services Ltd 7 First Impression 3,70,899. 66 3,11,050. 66 2,80,271. 16 Current 8 Absolute Communication 1,49,862. 35 46082. 35 Current 9 RGA 6,40,179. 00 In fact FDRs are only of Rs. 6 lakh Total 22,45,696. 50 28,58,075. 85 9,88,454. 99 13,74,605. 99 9,36,170. 99 Current FDR 28,93,222. 92 Deficiency of Rs 7,56,777/- ( 16 ) LEARNED counsel submits that even if all the funds available with the plaintiff, his wife, his brother and the companies of his brother are taken into account as on 31. 3. 2006, the total credit balance available was Rs. 28,93,222. 92 showing a deficiency of Rs. 7,56,777. 08. ( 17 ) LEARNED counsel also points out that the aforesaid statement would show that the reliance has been placed by the plaintiff for ability to pay on certain fdrs. The FDR Rs. 1. 50 lakh was under the lien of a bank. The lien was with effect from 6. 8. 2004 and the due date initially was 24. 1. 2005. The due date was extended up to 24. 1. 2008. The FDR of Rs. 4. 50 lakh due for payment on 19. 1. 2006 was also renewed by the plaintiff for two years. It is, thus, stated that really no reliance can be placed on these FDRs. The plaintiff was just totalling the amount to somehow show his ability to pay the amount. 1. 2008. The FDR of Rs. 4. 50 lakh due for payment on 19. 1. 2006 was also renewed by the plaintiff for two years. It is, thus, stated that really no reliance can be placed on these FDRs. The plaintiff was just totalling the amount to somehow show his ability to pay the amount. ( 18 ) THE picture, which emerges from the aforesaid facts, in my considered view, shows that the plaintiff seeks to rely upon not only his own ability to pay the balance payment due but also on funds available with his wife, his brother and the companies of his brother. The present case is not one at the stage of evidence and the plaintiff would naturally have the opportunity to show that such funds were actually available with him especially of his brother and limited companies of his brother. Whether such funds of limited companies could have been utilised by the plaintiff to borrow the funds and pay to the defendants is a moot point but nothing more is required to be said in that behalf since it would be for the plaintiff to show at trial that such a thing was permissible by reason of Memorandum and Articles of those companies. Thus, for the sake of argument, if at this stage it is presumed that all these funds as claimed by the plaintiff were available, the question arises as to whether such funds were sufficient to meet the liability of the plaintiff under the agreement to Sell dated 12. 1. 2006. ( 19 ) IN my considered view, the answer to the same has to be in the negative. ( 20 ) THE plaintiff claims to have issued initially the cheques of Rs. 3. 00 lakh and rs. 2. 00 lakh. The cheque of Rs. 3. 00 lakh was to the debit of the account of the plaintiff's wife and as on 13. 1. 2006, the funds were available, the funds declined below Rs. 3. 00 lakh amount on 17. 2. 2006. Thus, within the validity period of the cheque assuming the same was presented even after about a month, the cheque would have been dishonoured. ( 21 ) INSOFAR as the final installment is concerned, again the plaintiff is short of the total amount even if all the accounts are taken into account. 3. 00 lakh amount on 17. 2. 2006. Thus, within the validity period of the cheque assuming the same was presented even after about a month, the cheque would have been dishonoured. ( 21 ) INSOFAR as the final installment is concerned, again the plaintiff is short of the total amount even if all the accounts are taken into account. ( 22 ) THE most material aspect is that assuming that all these funds are available, no payment is encashed but at least by 1. 4. 2006, the payments had to be made, the chart filed by the defendants would undoubtedly show that the sum total of all the funds available would be only Rs. 28,93,222. 92 showing a reasonably large deficiency of Rs. 7,56,777. 08. The chart is prepared on the basis of the statement of accounts filed by the plaintiff and is not disputed. There is little doubt that the plaintiff thus, did not possess of sufficient means to meet the obligations under the Receipt-cum-Sale Agreement dated 12. 1. 2006. This is apart from the fact that few funds available with the plaintiff includes amounts in FDR which had a lien with the bank or had been extended up to 2008. ( 23 ) THE aforesaid financial position, thus, also belies the claim of the plaintiff that he visited the Officer of the Sub-Registrar on 1. 4. 2006 for execution of the sale deed and the defendants failed to present themselves. If the plaintiff did not have sufficient funds to meet the commitment under the agreement to Sell, it is not understood as to what would be the purpose of the visit of the plaintiff. The plaintiff has not shown that he had got drafts prepared for the full amount for execution of the sale deed nor has the plaintiff shown stamp paper for execution of such sale deed. Prima facie the statement of any such visit cannot be accepted. ( 24 ) THE result of the aforesaid is that whatever manner the matter may be looked into and taking into account of the funds which the plaintiff claims to be at his disposal, the plaintiff was not in possession of sufficient funds to pay the amount by the stipulated date. Thus, the very first premise of the readiness and willingness of the plaintiff to meet the financial commitment is not satisfied. Thus, the very first premise of the readiness and willingness of the plaintiff to meet the financial commitment is not satisfied. ( 25 ) I am, thus, of the considered view that the plaintiff has failed to make out a prima facie case in his favour and that being one of the three necessary ingredients for grant of interim injunction, the status quo order cannot be permitted to be continued. The party which is unable to meet its financial commitment for payment and seeks specific performance cannot be said to have the balance of convenience in its favour. ( 26 ) THE application is accordingly dismissed and the interim order vacated. The defendants are also entitled to costs quantified at Rs. 7,500. 00. ( 27 ) NEEDLESS to say that any observations made in the present order would not prejudice the trial in the suit in any manner.