TaxTMI 
TaxTMI 
2017 (2) TMI 810
X X X X Extracts X X X X
X X X X Extracts X X X X
....Colony Part-I, T-Block Extension, Uttam Nagar, New Delhi for a total sale consideration of Rs. 1,10,00,000/-. After negotiations, the respondent/plaintiff agreed to purchase the subject land and the parties executed an Agreement to Sell dated 05.11.2010 wherein, it was recorded that the respondent/plaintiff had paid a sum of Rs. 4 lacs to the appellant/defendant as part purchase price and the parties had agreed that the balance amount would be paid to the appellant/defendant at the time of executing the Sale/Conveyance Deed, for which the target date was fixed as 31.3.2011. Thereafter, the respondent/plaintiff made further payments to the appellant/defendant totalling to a sum of Rs. 1,06,50,000/-, thus leaving the balance amount of Rs. 3,50,000/-, to be paid to the appellant/defendant at the time of executing a Sale/Conveyance Deed. 4. The respondent/plaintiff approached the appellant/defendant well before the due date to execute the Sale Deed but he expressed his inability to sell the subject land to him. After some deliberations between the parties, the appellant/defendant agreed to refund the sum of Rs. 1,40,00,000/- to the respondent/plaintiff, which included the amount recei....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... taken by the appellant/defendant in the leave to defend application is that the respondent/plaintiff has not paid him the sum of Rs. 1,06,50,000/- towards the purchase price of the suit premises, rather he has given him the said amount to construct eight flats on the land in question which was to be sold later on and the sale proceeds were to be divided amongst the parties. The appellant/defendant had stated that completion of construction of the said flats took almost two years during which period, the price of the properties in Delhi and slumped steeply. As a result, the flats could not fetch the expected price. In those circumstances, in order to secure the interest of the respondent/plaintiff, the appellant/defendant had handed him over cheques worth Rs. 1,40,00,000/- with an assurance that they would not be presented for encashment till the flats could be sold at a reasonable price. 8. All the aforesaid contentions were however denied by the respondent/plaintiff in his reply to the application for leave to defend and he reiterated the averments made in the plaint. 9. After examining the pleas taken by the appellant/defendant in the leave to defend application and observing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....verning the grant/refusal of the leave to defend application in a summary suit have been explained in several judicial pronouncements including the decision in the case of Santosh Kumar Vs., Bhai Mool Singh reported as AIR 1958 SC 321 Milkhiram(India) (P) Ltdf. Vs.Chamanlal Bros. reported as AIR 1965 SC 1698. In the oft quoted judgment of M/s Mechalec Engineers & Mfr. vs. M/s Basic Equipment Corporation, reported as AIR 1977 SC 577, the principles that were laid down in Sm. Kiranmoyee Dassi vs. Dr. J. Chatterjee, reported as (1945) 49 Cal WN 246, were summarized in the following words: 8........ "(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, althoug....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d not reject the defence of the defendant merely because of its inherent implausibility or its inconsistency." 14. The pleas taken by the appellant/defendant must be tested on the anvil of the judicial precedents referred to above. The explanation offered by the appellant/defendant in his leave to defend application is that the agreement between the parties was to the effect that the respondent/plaintiff would pay a sum of Rs. 1,06,50,000/- to the appellant/defendant for him to construct eight flats on his plot and post-construction, the said flats were to be sold and the sale proceeds divided between them, but the same could not be done due to a heavy slump in the real estate market, it is considered necessary to examine the documents executed between the parties. 15. The first relevant document is the Agreement to Sell dated 5.11.2010 executed by the parties, the recital whereof and the clauses are reproduced hereinunder for ready reference: "AGREEMENT TO SELL This Cancellation Agreement is made at New Delhi on 05.11.2011 between MR. MUKESH KUMAR SINGH S/o Shri BINAY KUMAR SINGH R/o FLAT NO.266, VEER AWASH SECTOR 18A, DWARKA, NEW DELHI 110075 hereinafter called the FIRST PART....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the second party. 4. That all dues and demands such as house tax/property tax, ground rent, lease money, instalments, maintenance charges, electricity and water charges etc. regarding the property under sale upto date of final execution of sale documents shall be paid by the first party and thereafter the same shall be paid and borne by the second party. 5. That in case the second party fails to pay the balance amount until fixed period to the first party then the first party shall have the right to forfeit the earnest money and this transaction shall be treated as cancelled. 6. That in case the first party fails to execute the sale documents within stipulated period in favour of the second party or his/her/their nominee(s) or neglects to do so or any defect is found in the title of the first party then the second party shall have the right to get the double of the earnest money from the first party or get completed this transaction through court of law. 7. That the first party shall not create any charges over the said property after the execution of this agreement and first party has no right to sell it to anybody else after the signing of this agreement, however second par....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t in the leave to defend application. 19. The third material document is the MOU dated 6.6.2013 executed between the parties after a period of two years and seven months from the date of execution of the Agreement to Sell, whereunder the appellant/defendant had admitted to the fact that he had received a sum of Rs. 1,06,50,000/- from the respondent/defendant towards the sale of the suit premises, vide Agreement to Sell dated 5.11.2010. The terms of the MOU dated 6.6.2013 were as follows: "Memorandum of Understanding This MOU is made at New Delhi on 06.06.2013 between : MR. MUKESH KUMAR SINGH S/o Shri BINAY KUMAR SINGH R/o FLAT NO.266, VEER AWASH SECTOR 18A, DWARKA, NEW DELHI 110075 hereinafter called the FIRST PARTY/SELLER; AND MR. SATISH CHANDRA MISHRA S/O LATE SHRI GUNJAN MISHRA R/O 33A, CHANDRANATH CHATERJEE STREET, MERLINE JASMINE BHOWANIPUR, KOLKATA-25 (WEST BENGAL) hereinafter called the SECOND PARTY/PURCHASER. WHEREAS the Second party was paid sum of Rs. 1,06,50,000/- (Rupees One Crore Six Lakh and Fifty Thousand Only) to the first party seller vide agreement to sell dated 05.11.2010 against Entire under construction building which is on PROPERTY NO.120-A, which tota....
X X X X Extracts X X X X
X X X X Extracts X X X X
....amount. The contents of the said Letter of Commitment dated 14.2.2014 are as follows: "Commitments Date: 14.02.2014 I, Mukesh Kr. Singh S/o Sh. Binay Kumar Singh R/o Flat No.3401, IIT Engg. Aptt. Plot No.12, Sector - 12, Dwarka, New Delhi-110075. I have to pay Rs. 1,40,00,000/- (One Crore Forty Lakh Only) to Mr. Satish Chandra Mishra, the above said amount is including principal amount invested by him as I failed many commitments now I assuring him that this will be the final commitments that I will pay all the amount given post dated cheque by me. The issues cheques details are as mentioned below : . Sr.No Amount Cheque No. Date Drawn on 1 35,00,000/- 064480 10.03.2014 ICICI Bank Ltd.Sector-5, Dwarka, N. Delhi 2 50,00,000/- 064481 15.04.2014 ---- Do---- 3 25,00,000/- 064482 10.05.2014 ---- Do---- 4 30,00,000/- 064483 20.05.2014 ---- Do---- Declaration: Above said statement are given by me in my own belief & faith. (Mukesh Kumar Singh)" 22. The aforesaid documents when read together, make it abundantly clear that there was never any understanding between the parties that the respondent/plaintiff ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....MOU goes on to record that the parties had agreed to cancel the Agreement to Sell on the assurance of the appellant/defendant that he would return the sum of Rs. 1,40,00,000/- to the respondent/plaintiff, which included the profit element. The Letter of Commitment dated 14.2.2014 executed by the appellant/defendant records that he had to pay a sum of Rs. 1,40,00,000/- to the respondent/plaintiff, which included the principal amount invested by him and he had had failed to abide by his earlier commitments made in this regard and had issued four post-dated cheques for returning the said amount to the respondent/plaintiff. 27. In the light of aforesaid documents, it does not lie in the mouth of the appellant/defendant to set up an entirely different story in his leave to defend application which is not borne out from any of the documents on the record. All the aforesaid documents and the conduct of the parties when examined together, leaves no scope of doubt that the appellant/defendant had entered into an Agreement to Sell with the respondent/plaintiff in respect of the entire under construction property and had received an advance amount from him on the said count. There is not a w....