Jayant Nath, J.

IA No. 17034/2012 (u/S 5 of the Limitation Act)

1. This is an application under Section 5 of the Limitation Act for condonation of delay in re-filing the application under Order 37 Rule 3 (5) CPC. There is no serious opposition to this application. The same is allowed and the delay in re-filing the application under Order 37 Rule 3 (5) CPC is condoned.

2. The application is disposed of.

IA No. 17033/2012 [u/O 37 R 3(5) CPC]

3. This is an application filed on behalf of the defendant under Order 37 Rule 3 (5) of the Code of Civil Procedure seeking leave to defend the present suit. The plaintiff has filed the present suit under Order 37 CPC seeking a decree for a sum of Rs. 28 lacs against the defendant along with interest at the rate of 12% per annum till the date of realisation. It is the contention of the plaintiff that on 06.10.2008, the plaintiff had entered into an agreement with the defendant in respect of sale of ground floor of property bearing No. 23, Prem Nagar Market, Tyagraj Market, New Delhi. It is stated that a sum of Rs. 28 lacs was paid in advance. It is claimed that Rs.15 lacs was paid in cash on 04.10.2008, Rs. 8 lacs was paid in cash on 06.10.2008 and Rs. 5 lacs was paid by cheque on 06.10.2008. The total sale consideration was Rs. 1.50 crores.

4. It is the further contention of the plaintiff that at the time of the agreement to sell, the defendant had claimed to be the absolute owner of the suit property. However, it is stated that subsequently, the plaintiff realized that though the defendant had supplied photo copies of some documents pertaining to the chain of ownership of the suit property but the complete chain of ownership has not been supplied by the defendant. It is further stated that on enquiry from the concerned authorities, it was found that there are huge dues pending against the property. It is further stated that even a tenant is sitting on the property. Hence, the plaintiff submits that on 05.02.2009, 13.03.2009 and 01.09.2009 request was made to the defendant to perform his part of the agreement or to refund the advance payment of Rs.28 lacs. Hence, it is stated that the plaintiff has cancelled the deal and demanded back the amount. Hence, the present suit has been filed for the recovery of said sum of Rs. 28 lacs.

5. In the application for leave to defend, the defendant has denied his liability to pay any amount whatsoever. It is contended that the defendant has not entered into any agreement with the plaintiff and the alleged agreement to sell dated 06.10.2008 is a forged and fabricated document. The defendant has along with the present application attached photocopies of two documents being agreement to sell and purchase dated 06.10.2008 as Annexure A and B. He submits that in Annexure A has the same stamp paper number as Annexure B. In the first agreement, Annexure A there are forged signatures of the defendant on all pages and witnesses have also signed on the last page. It is further stated that the other agreement being Annexure B does not bear the signatures of the witnesses and the column of the signature of the witnesses is blank. It is further stated that first three pages of the said agreement to sell do not bear the signatures of the defendant and on the last two pages of the alleged agreement, signatures of the defendant has been forged. It is stated that both the agreements are forged and fabricated just to give a false story.

6. It is further stated that the plaintiffs father has been a tenant in the suit property for the last 20 years and it was he who showed the willingness to purchase the suit property in the name of his son i.e. the plaintiff. Hence, it is stated that it was orally agreed between the parties after satisfaction of the parties in all respect and scrutinizing the title document of the defendant to enter into an oral agreement to sell and the plaintiff had agreed to give Rs. 15 lacs as Bayana out of total sale consideration of Rs. 1.50 crores. It is stated that the plaintiff had only paid Rs. 5 lacs through cheque dated 06.10.2008. On presentation, the cheque was dishonoured on 10.10.2008 and was returned by the defendant. However, it appears that the plaintiff had himself deposited the bounced cheque in the account of the defendant and the said amount was subsequently credited to the account of the defendant. It is stated that the plaintiff pleaded that the balance Bayana need not be paid now and the plaintiff promised to pay the same along with the full balance of sale amount. It is also stated that the sale deed was to be completed on 06.02.2009. It is stated that on 03.02.2009, the defendant sent a letter to the plaintiff calling upon the plaintiff to get executed the necessary documents on 06.02.2009 and that the defendant would reach the Sub-Registrar accordingly. However, it is stated that the defendant reached the office of the Sub-Registrar on 06.02.2009 but none was there on behalf of the plaintiff. It is stated that due to non-fulfilment of the commitment on the part of the plaintiff, the partial Bayana amount of Rs.5 lacs stands forfeited.

7. I have heard learned counsel for the parties. Learned counsel for the plaintiff has stressed that in terms of the agreement to sell dated 06.10.2008, it is clear that the defendant has received a sum of Rs. 28 lacs. He, however, submits that it became clear later on that the title of the defendant to the property in question is not clear. There are arrears and large dues payable by the defendant to L&DO and further that the defendant had to convert the property into freehold which has not been done. Hence, it is stated that as there is a default on the part of the defendant, the plaintiff is entitled to refund of the sum of Rs. 28 lacs paid to the defendant. He claims that the same represents liquidated demand. Learned counsel for the plaintiff relies upon a judgment of this Court in the case of Pritam Singh Dhingra vs. Smt. Ambadipudi Uma Sambarmurthy reported in 1984 (7) DRJ 150 to contend that the present suit based on an agreement to sell would lie.

8. On the other hand, the learned counsel for the defendant has submitted that there is no written agreement to sell between the parties. The defendant admits existence of an oral agreement to sell and accepts the sale consideration to be Rs. 1.50 crores. He also admits receipt of advance of Rs.5 lacs as an earnest money. He submits that the balance payment was to be made on 06.02.2009 when the sale deed was to be executed and that the plaintiff has failed to do the same. He relies on the letter dated 03.02.2009 sent by the defendant copy of which has been placed on record as Annexure to this application along with along with original postal receipt as proof of dispatch of the said letter to submit that the letter was dispatched asking the plaintiff to appear before the Sub-Registrar so that the transaction could be completed. He further stresses that the written agreement was forged as is apparent from the two different copies of the said agreement which the defendant has placed on record as Annexure A and B to the present application. He also submits that the father of the plaintiff has been a tenant in a portion of the concerned property for the last 20 years and he was fully aware of the facts and circumstances. He submits that the issue about the defendants title to the property being not clear, arrears being payable to L&DO, etc. i.e. the contentions being raised by the plaintiff are absolutely false and are denied.

9. In the context of grant of leave to defend, the principles of law applicable are well known. The basic judgment in this regard, namely, M/s Mechalec Engineers & Manufacturers v. M/s Basic Equipment Corporation AIR 1977 SC 577 [LQ/SC/1976/414] , may be looked into for the said purpose. In para 8, the Honble Supreme Court has held as follows:

In Smt. Kiranmoyee Dassi and Anr. v. Dr. J. Chatterjee 49 C.W.N. 246 , Das. J.,after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by order 17 C.P.C. in the form of the following propositions (at p. 253) :

(a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend.

(b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend.

(c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiffs claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.

(d) If the Defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend.

(e) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the Plaintiff is entitled to leave to sign judgment, the Court may protect the Plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to prove a defence.

In the light of the above, I may now consider the submissions of the defendant

10. The facts as narrated above by the parties demonstrate that there is an agreement to sell. The defendant accepts receipt of only a sum of Rs. 5 lacs. Admittedly, the balance sum of Rs. 23 lacs has been paid in cash. The only proof of the cash payment is agreement to sell dated 06.10.2008 which has been filed by the plaintiff. The defendant categorically denies the agreement to sell and also claims that apart from forging the signatures of the defendant, the plaintiff has manipulated different agreements and photocopies of different agreements have been placed on record which show that in one copy the witnesses and the defendant has signed on all the pages as well. In the second copy, the witnesses have not signed the document and the defendant has signed only on the last two pages. Clearly, the plaintiff has to prove the execution of the written agreement to sell dated 06.10.2008 by the defendant. He has to also prove that he paid a sum of Rs.23 lacs in cash to the defendant on or around the time when the said agreement to sell was allegedly executed by the parties.

11. Further, apart from proving execution of the agreement to sell dated 06.10.2008 and receipt of a total of Rs. 28 lacs by the defendant (Rs. 23 lacs in cash and Rs. 5 lacs in cheque), the issue would further arise as to whether the plaintiff is entitled to refund of the same in terms of the agreement to sell dated 06.10.2008. The plaintiff contends that the defendant was guilty on three counts, namely, (a) title to the suit property was not clear, (b) there were huge arrears of L& DO & (c) he had to convert the property into freehold. None of the above contentions has really been elaborated or even sought to be established. The plaintiff admits receipt of some of the title documents given to him by the defendant but states that later on, he realized that these documents do not give the complete picture regarding the title of the defendant. However, none of these documents are placed on record. Regarding arrears of L&DO, a question was posed to the learned counsel for the plaintiff that as to whether, there is anything on record to show that any money is payable by the defendant to the L&DO. The reply to the said question was that there is no document but the plaintiff has learnt about it orally. Regarding the third contention of the plaintiff that the defendant had to convert the property into freehold, before the sale transaction could be completed, I do not see any such clause in the agreement to sell dated 06.10.2008 which is filed by the plaintiff. I also cannot help noting the submission made in the plaint by the plaintiff that the defendant had mislead the plaintiff inasmuch as a tenant is sitting over the property. In the course of the arguments, it transpired that one shop in the property concerned is in possession of the plaintiffs father who is the tenant for the last 20 years. Clearly, the averment made by the plaintiff in the plaint about the fact that the defendant has suppressed the existence of a tenant is a totally false contention.

12. A further issue that would also arise is about the status of the alleged advance paid. The agreement to sell dated 06.10.2008 which has been placed on record by the plaintiff merely stipulates that an advance has been paid for a sum of Rs. 28 lacs. Clause 6 stipulates that in case any of the parties fails to complete the transaction, the aggrieved party shall get it enforced through the court of law and the defaulting party shall be liable for all the expenses, costs incurred and damages suffered. The defendant accepts receipt of Rs. 5 lacs as Bayana/earnest deposit.

13. In Shree Hanuman Cotton Mills & Anr. Vs. Tata Air Craft Ltd. reported in AIR 1970 SC 1986 [LQ/SC/1969/450] , the Honble Supreme Court has held that the earnest money represents a guarantee that the contract would be fulfilled. It is part of the purchase price when the transaction is carried out. It is forfeited when the transaction fails through by reasons of default or failure of the purchaser. Unless there is anything to the contrary in terms of the contract, on default committed by the buyer, the seller is entitled to forfeit the earnest money. The defendant states that having received Rs. 5 lacs as earnest money and in view of the failure of the plaintiff to complete the transaction, he has forfeited the said earnest money. In view of the law regarding earnest money this could be a plausible contention.

14. A perusal of the above would show that the defendant has raised triable issues indicating that he has a fair or bona fide or a reasonable defence. The plaintiff has to prove the validity and authenticity to agreement to sell, the plaintiff would also have to prove his contentions regarding (a) defendant having no title of the property (b) proof of arrears being payable to L& DO and (c) that the defendant had to convert the property into freehold which has not been done. The issue would also be as how much advance was made by the plaintiff in the form of earnest deposit and if it was earnest deposit, whether it is liable to be forfeited These matters would have to be adjudicated upon in trial. Clearly, the defendant has in this application raised issues which are triable.

Hence, the present suit is not to recover a debt or liquidated demand based on a written agreement. In fact there is a serious dispute regarding the existence of a written agreement itself.

15. The judgment cited by the learned counsel for the plaintiff, namely, the case of Pritam Singh Dhingra (supra)also does not help the case of the plaintiff. In that case the agreement to sell between the parties contains a clause which provided that in case of default by the seller, the seller would be liable to liquidate damages of Rs.10,000/-. There is no such clause in the agreement to sell in question. That was also a case in which there was delay on the part of the defendant to enter appearance and there was no request put to the trial court for condonation of delay. Hence the suit had been decreed in that case as the defendant had entered appearance beyond the prescribed period of 10 days.

16. In view of the above, the present application is allowed and the defendant is granted unconditional leave to defend.

IA 10929/2012 [u/O 37 R 3(4) CPC]

17. This is an application filed by the plaintiff for issuance of summons of the judgment.

18. In view of the above order, the present application has become infructuous and is disposed of accordingly.

CS(OS) 3060/2011 and 19606/2011 (u/O 39 R 1 & 2 CPC)

19. In view of the above, the defendant may file written statement within four weeks. Replication may be filed by the plaintiff within four weeks thereafter.

20. List before the Joint Registrar on 4th October, 2013.