2008 (12) TMI 815 - HC - Indian Laws

Summary

Issues Involved:
1. Specific performance of the contract.
2. Admissibility and enforceability of the allotment letter and subsequent modifications.
3. Payment obligations and interest on delayed payments.
4. Legality of the cancellation of allotment by the defendant.
5. Legal enforceability of the Commercial Space Buyers' Agreement.
6. Validity of clauses restricting legal proceedings.
7. Granting of decree based on admissions.

Issue-wise Detailed Analysis:

1. Specific Performance of the Contract:
The plaintiff sought specific performance of the contract contained in the letters dated 8th September 2004 and 29th October 2005, demanding possession of Shop No. G-76. The court found that a concluded contract existed, as the terms were certain and agreed upon, making the defendant's obligation enforceable.

2. Admissibility and Enforceability of the Allotment Letter and Subsequent Modifications:
The letters dated 8th September 2004 and 29th October 2005 were admitted by the defendant. These letters constituted a binding agreement, as they detailed the shop allotment, payment plan, and obligations of both parties. The court held that these documents were not merely an agreement to enter into an agreement but a complete and enforceable contract.

3. Payment Obligations and Interest on Delayed Payments:
The plaintiff made substantial payments totaling Rs. 86,45,987/-, with a minor delay in some installments. The defendant accepted these payments without protest. The court noted that the plaintiff was liable to pay interest for the delayed payments as per the agreed terms but found the defendant's demand for Rs. 13,38,424.21/- including interest to be unsubstantiated and lacking detailed breakdowns.

4. Legality of the Cancellation of Allotment by the Defendant:
The defendant canceled the allotment citing non-payment of Rs. 3,43,094.21/-. The court observed that the defendant failed to provide a detailed explanation for this amount and noted the plaintiff's consistent efforts to make payments and seek possession. The court concluded that the cancellation was unjustified, especially after accepting 97.5% of the total payment.

5. Legal Enforceability of the Commercial Space Buyers' Agreement:
The court rejected the defendant's argument that the allotment letter was not enforceable without the execution of a formal Commercial Space Buyers' Agreement. It held that the letters constituted a binding contract, and the defendant could not evade its obligations by claiming the need for a further formal agreement.

6. Validity of Clauses Restricting Legal Proceedings:
The court found that the clause in the allotment terms restricting the plaintiff from enforcing her rights in a court of law was void under Section 28 of the Contract Act, 1872. Such clauses are against public policy as they attempt to restrict legal recourse, which is not permissible.

7. Granting of Decree Based on Admissions:
Given the admitted facts and documents, the court exercised its discretion under Order XII, Rule 6 of the Code of Civil Procedure, 1908, to grant a decree of specific performance. The defendant was directed to execute the Commercial Space Buyers' Agreement and hand over possession of the shop to the plaintiff upon payment of interest for the delayed installments.

Conclusion:
The court decreed specific performance in favor of the plaintiff, directing the defendant to execute the necessary agreement and hand over possession of the shop, subject to the payment of interest on delayed installments. The plaintiff was also awarded the costs of the suit. The court dismissed the defendant's application under Order VII, Rule 11, and rendered other applications infructuous. The question of execution under the Delhi Apartments Ownership Act, 1986, was left open as it was not urged by the plaintiff.