NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL
COMMON LAW METHOD
CASE ANALYSIS
of
SUNIL TYAGI V GOVT OF NCT OF DELHI & ANR.
Submitted by
Nikhil Ranjan
Roll Number: 2023BALLB123
Enrolment Number: A-2704
I Semester [Common Law Method]
B.A. LL.B. (Hons.)
Submitted to
Prof. (Dr.) Ghayur Alam
SEMESTER I PROJECT
DECLARATION
________________________________________________________________
I, Nikhil Ranjan, S/o , Roll No. 2023BALLB100, do hereby declare that the project titled
“SUNIL TYAGI V GOVT OF NCT OF DELHI & ANR.” is the result of my independent
research, which I carried out under Prof. (Dr.) Ghayur Alam. Literature relied on by me for
the purpose of this project has been fully and completely acknowledged in the footnotes and
bibliography. The Project is not plagiarized and all reasonable steps have been taken to avoid
plagiarism. Similarity Index as per the Turnitin Report is ___%. In case, my Project is found
to be plagiarized, the course teacher shall have the full liberty to ask me to revise the Project.
If I fail to comply with the instructions of the teacher, my project be referred to the
Committee Against Use of Unfair Means and I will comply with the decision of the said
committee.
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ACKNOWLEDGEMENT
________________________________________________________________
I'd like to express my heartiest gratitude to everyone who guided and assisted me in
completing this project. Without their guidance and assistance, this project would not have
been completed on time. I'd like to express my gratitude to Prof. (Dr.) S Surya Prakash, Vice-
Chancellor of the National Law Institute University Bhopal, for giving the resources
necessary to complete the research.
Prof. (Dr.) Ghayur Alam, our common law method instructor, allowed me to analyze this
case and he guided what needs to be done and how it needs to be done in utmost detail, which
aided me in comprehending the decision's content and consequences.
Additionally, I am grateful to the NLIU library for assisting me in obtaining the resources
necessary for the research of this project.
Finally, I'd want to express my gratitude to my family and friends for providing the
encouragement and support necessary to finish my project work.
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SEMESTER I PROJECT
TABLE OF CASES
SERIAL CASE NAME PAGE CITATON
NUMBER NUMBER
1. Shyamal Kumar Roy v. Sushil Kumar 14 (2006) SCC 331
Aggarwal
2. Sudir Engineering Co. v. Nitco 14 1995 (34) DRJ 86.
Roadways Ltd
3. Sanjay v. Vishnupant 14 (2007) 6 Mah LJ
500:2007 SCC
OnLine Bom 610
4. Suraj Lamps & Industries Pvt Ltd v. State 15 (2012) 1 SCC 656
of Haryana.
5. Sushil Kumar Agarwal v. Meenakshi 15 (2019) 2 SCC 241.
Sandhu
6. Vinod Seth v. Devinder Bajaj 15 (2010) 8 SCC 1.
7. Prem Kumar Bansal v. Ambrish Garg 15 230 (2016) DLT
360.
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TABLE OF STATUTES
SERIAL STATUTE NAME PAGE COPY OF STATUE
NUMBER NUMBER
1. The Code of Civil 13 Code of Civil
Procedure Procedure
2. The Registration Act 14 The Registration Act,
1908
3. The Stamp Act 14 Stamp Act
4. The Specific Relief Act 14 The Specific Relief Act
5. The Indian Contract Act 15 The Indian Contract Act
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Table of Contents
_________________________________________________________________________________
TABLE OF CASES.............................................................................................................................4
TABLE OF STATUTES.....................................................................................................................5
DETAILS OF THE CASE..................................................................................................................7
CONCRETE FACTS OF THE CASE...............................................................................................8
MATERIAL FACTS...........................................................................................................................9
IMMATERIAL FACTS......................................................................................................................9
GENERALISATION OF FACTS....................................................................................................11
QUESTION OF LAW.......................................................................................................................12
ARGUMENT ON THE BEHALF OF THE PETITIONER...........................................................13
ARGUMENT ON THE BEHALF OF THE RESPONDENT........................................................14
CONCRETE JUDGMENT...............................................................................................................16
RATIO DECIDENDI........................................................................................................................17
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DETAILS OF THE CASE
Name of the Case: SUNIL TYAGI V GOVT OF NCT OF DELHI & ANR.1
Date of the judgment: 28th June, 2021
Judges Name: Hon’ble Mr. Justice J. R. Midha
Bench: - Single Judge Bench
Name of the Judge Who Delivered the Judgement: J. R. Midha, J.
Number of opinions: One
Type of judgement: Reportable
Name of Judges Who Delivered Reportable opinion: J. R. Midha, J.
Name of Judges Who Delivered Separate but Concurring Opinions:
There was no separate opinion.
Name of Judges Who Delivered Dissenting:
There was no dissenting opinion.
CONCRETE FACTS OF THE CASE
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SUNIL TYAGI V GOVT OF NCT OF DELHI & ANR
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The concrete facts of the case are as follows:
1. A Property Development Agreement (PDA) was executed on January 14, 2020,
between the plaintiff and defendant.
2. The PDA obligated the developer to demolish the existing structure and construct a
multi-floor building at their expense.
3. The defendant acknowledged receiving Rs. 4 lakhs via a check from the developer on
January 14, 2020.
4. The PDA stipulated a total consideration of Rs. 49 lakhs, with the remaining Rs. 45
lakhs to be paid upon document registration.
5. The plaintiff claimed that TDS of Rs. 2,49,000/- and an additional Rs. 1 lakh were
deductible from the remaining payment.
6. The plaintiff offered a crossed cheque of Rs. 43,51,000/- to the defendant on January
31, 2020.
7. Various documents, including Agreement to Sell and General Power of Attorney,
were executed on January 31, 2020.
8. The defendant denies receiving the Rs. 43,51,000/- cheque and executing the
mentioned documents.
9. The defendant informed the plaintiff that the property was mortgaged with Standard
Chartered Bank after document execution.
10. The defendant admitted that the PDA's recital about the property being unencumbered
was incorrect.
11. The defendant claimed that discussions prior to the PDA included mentioning the
property's encumbrance, which the plaintiff "blindly" ignored.
12. A letter dated March 23, 2020, from the plaintiff alleged that an NOC from the bank
was required before exchanging documents.
13. The defendant refused to obtain the NOC, retain the original documents, and
threatened to forfeit the advance payment.
14. The plaintiff called upon the defendant to fulfill their PDA obligations, including
producing the original documents.
15. The defendant's response on May 4, 2020, denied receiving the remaining Rs. 45
lakhs and alleged the plaintiff concealed information and breached the PDA.
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MATERIAL FACTS
The material facts of the case are as follows:
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1. The execution of a Property Development Agreement (PDA) on January 14, 2020,
between the plaintiff and defendant.
2. The acknowledgment by the defendant of receiving Rs. 4 lakhs on January 14, 2020,
as part of the PDA.
3. The PDA's stipulation of a total consideration of Rs. 49 lakhs, with Rs. 45 lakhs
payable upon document registration.
4. The plaintiff's claim that TDS of Rs. 2,49,000/- and an additional Rs. 1 lakh were
deductible from the remaining payment.
5. The plaintiff's offer of a crossed cheque of Rs. 43,51,000/- to the defendant on
January 31, 2020.
6. The execution of various documents, including Agreement to Sell and General Power
of Attorney, on January 31, 2020.
7. The defendant's denial of receiving the Rs. 43,51,000/- cheque and executing the
mentioned documents.
8. The defendant's subsequent revelation that the property was mortgaged with Standard
Chartered Bank after document execution.
9. The plaintiff's assertion that discussions prior to the PDA did not mention the
property's encumbrance, while the defendant claimed otherwise.
10. The defendant's refusal to obtain the No Objection Certificate (NOC) from the bank,
retain the original documents, and threats of forfeiting the advance payment.
IMMATERIAL FACTS
The immaterial facts of the case are as follows:
1. The date of the meeting between the plaintiff and defendant on February 10, 2020,
when discussions regarding the exchange of documents took place.
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2. The plaintiff's letter dated March 23, 2020, asserting certain understandings about the
exchange of documents and the need for a No Objection Certificate (NOC) from the
bank.
3. The defendant's response through counsel on May 4, 2020, detailing the alleged
breaches by the plaintiff and the plaintiff's purported circulation of messages offering
the property for sale duty for three months, starting from 23.11.2017.
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GENERALISATION OF FACTS
In a legal dispute stemming from a Property Development Agreement (PDA) executed on
January 14, 2020, between the plaintiff and defendant, several critical facts emerge. The PDA
obligated the developer to demolish an existing structure and construct a multi-floor building
at their expense, with a total consideration of Rs. 49 lakhs, of which Rs. 4 lakhs were
acknowledged on the execution date. The plaintiff claimed that the remaining Rs. 45 lakhs,
subject to TDS deductions and an additional Rs. 1 lakh payable per an "Agreement for
Construction," were offered via a crossed cheque on January 31, 2020. However, the
defendant denies receiving this payment or executing related documents. A subsequent
revelation of the property's encumbrance with Standard Chartered Bank, disputed discussions
pre-PDA, and disagreements over the need for a No Objection Certificate (NOC) further
complicate this legal entanglement.
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QUESTION OF LAW
1. Did the court have the jurisdiction to issue an ad interim injunction under Order
XXXIX Rules 1 and 2 of the Code of Civil Procedure, 19082 (CPC) in CS (Comm)
(Infra) 1/2020, considering the circumstances of the case involving the suit property
located at F-6, Kailash Colony, New Delhi?
2. What were the grounds presented by the defendant in IA 7643/2020 for vacating the
ad interim injunction granted in favour of the plaintiff?
3. Are there any legal considerations or principles that guided the court's decision to hear
and dispose of IA 6433/2020 and IA 7643/2020 together, and what implications might
this have on the case?
2
The Code of Civil Procedure, 1908 (5 of 1908) Ord XXXIX, r 1 & 2.
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ARGUMENT ON THE BEHALF OF THE PETITIONER
1. The plaintiff argues that the Court's refusal to order specific performance of the
Property Development Agreement (PDA) based on Section 14(1)(b) of the Specific
Relief Act, 19633, is not applicable in this case. The plaintiff contends that the PDA
was not a contract for the sale of property but rather a contract for development and
construction. Therefore, it should not be subject to the same restrictions as contracts
for the sale of property.
2. The plaintiff maintains that the PDA did not, by itself, create any right or title to the
property, and thus, it was not required to be registered under Section 17 of the
Registration Act4. This distinguishes it from contracts for the sale of property and
should not subject it to the same registration requirements.
3. Furthermore, the plaintiff points out that the defendant had already admitted the
existence of the PDA. Therefore, the defendant cannot now argue that it was
insufficiently stamped, citing precedents such as Shyamal Kumar Roy v. Sushil
Kumar Aggarwal5 and Sudir Engineering Co. v. Nitco Roadways Ltd6.
4. The plaintiff contends that Article 23A of the Stamp Act7, which deals with contracts
for the sale of property, is inapplicable to the PDA. The PDA was a contract that
envisaged the sale of property but did not involve the direct sale of the property itself.
It did not contemplate the transfer of possession, making Article 23A of the Stamp
Act irrelevant.
5. The plaintiff asserts that stamp duty was payable on the PDA under Article 5 of the
Stamp Act, and the document's insufficiency in this regard should not preclude the
granting of an injunction. This argument draws support from cases such as GTZ
(India Pvt Ltd) v. Power Electronics Engineers and Sanjay v. Vishnupant8.
6. Moreover, the plaintiff argues that the PDA is not incapable of specific performance.
It contends that the PDA not only involved construction agreements but also
conferred ownership rights on the plaintiff. Additionally, the PDA itself contained a
3
The Specific Relief Act, 1963 (47 of 1963) s 14(1)(b).
4
The Registration Act, 1908 (16 of 1908) s 17.
5
Shyamal Kumar Roy v. Sushil Kumar Aggarwal (2006) SCC 331.
6
Sudir Engineering Co. v. Nitco Roadways Ltd 1995 (34) DRJ 86.
7
The Stamp Duty Act, 1899 (2 of 1899) s 23(A).
8
Sanjay v. Vishnupant (2007) 6 Mah LJ 500:2007 SCC OnLine Bom 610
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recital stating that a breach of its terms would entitle the aggrieved party to enforce
specific performance.
7. The plaintiff highlights that the PDA contained detailed plans, layouts, and
constructions for the redevelopment of each floor of the property. It was not an
agreement requiring continuous performance of mutual obligations but was aimed at
achieving a final result. This distinguishes it from contracts exempted from specific
performance under Section 14(b) of the Specific Relief Act.
8. The plaintiff draws on legal precedents, including Suraj Lamps & Industries Pvt Ltd
v. State of Haryana9 and Sushil Kumar Agarwal v. Meenakshi Sandhu10, to support its
argument that the PDA should be subject to specific performance.
9. Finally, the plaintiff distinguishes the case of Vinod Seth, emphasizing that it
involved a vague oral agreement, and Prem Kumar Bansal was rendered under the
pre-amended Specific Relief Act and should not be applied in the current context.
ARGUMENT ON THE BEHALF OF THE RESPONDENT
1. The defendant, represented by Mr. Rajiv Garg, argues that the Property Development
Agreement (PDA) was unregistered and insufficiently stamped, rendering it incapable
of conferring any enforceable rights upon the plaintiff. This challenges the validity of
the PDA as a basis for seeking specific performance.
2. It is contended that specific performance of the PDA should not be granted due to
Section 14(1)(b) of the Specific Relief Act, 1963. Mr. Garg relies on legal precedents
such as Vinod Seth v. Devinder Bajaj11 and Prem Kumar Bansal v. Ambrish Garg12 to
support this position.
3. The defendant asserts that the PDA underwent novation, as defined in Section 62(4)
of the Indian Contract Act, 187213, through subsequent documents like the Agreement
to Sell (ATS) and Agreement for Construction (AFC). This implies that the original
PDA was replaced or altered, affecting its enforceability.
9
Suraj Lamps & Industries Pvt Ltd v. State of Haryana (2012) 1 SCC 656.
10
Sushil Kumar Agarwal v. Meenakshi Sandhu (2019) 2 SCC 241.
11
Vinod Seth v. Devinder Bajaj (2010) 8 SCC 1.
12
Prem Kumar Bansal v. Ambrish Garg 230 (2016) DLT 360.
13
The Indian Contract Act, 1872 (9 of 1872) s 62(4).
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4. Mr. Garg questions the plaintiff's assertion of readiness and willingness to perform its
obligations under the PDA, alleging that the plaintiff lacked the financial capability to
fulfill its obligations. The defendant cites the plaintiff's Axis Bank statement as
evidence.
5. The defendant emphasizes that the plaintiff had only paid Rs. 4 lakhs out of the total
amount due under the PDA, which includes the payment stipulated in Clause 6. This,
according to the defendant, disqualifies the plaintiff from claiming specific
performance.
6. The defendant contends that the plaintiff was aware of the property's mortgage with
the bank at the time of executing the PDA. This knowledge, it is argued, undermines
the plaintiff's claims of being deceived and strengthens the defendant's position.
7. The defendant asserts that they signed the PDA under the belief that it aligned with
the discussions that occurred before its execution. This suggests that the defendant
entered into the agreement without coercion or misrepresentation.
8. Notably, the defendant acknowledges the inaccuracy of recitals H and I in the PDA
regarding the property's mortgage with the bank. This admission, however, is
presented as a basis for tilting the case's equities in favor of the plaintiff
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CONCRETE JUDGMENT
In the present case, where the Property Development Agreement (PDA) entails not only
construction but also envisions valuable rights for the developer within the constructed
structure, the argument that it is incapable of specific performance under Section 14(1)(b) of
the Specific Relief Act, 1963, does not prima facie hold. The 2018 Amendment Act has
removed the requirement of precision in construction contracts as a precondition for
enforceability, no longer invoking the erstwhile Section 14(3)(c)(iii). Thus, lack of precision
alone cannot disqualify a construction contract from specific performance. However, if
imprecision necessitates continuous court supervision, Section 14(b) might still apply.
Concerning novation, the defendant's claim lacks factual and legal foundation, as there is no
evidence of an intention to substitute the PDA with subsequent documents. Lastly, the
defendant's argument regarding the plaintiff's financial capability is premature, with the Axis
Bank statement insufficient to establish incapability. Consequently, the defendant's plea to
vacate the interim order is dismissed, and the interim order is made absolute, pending suit
disposal, in favor of the plaintiff, as the defendant has not presented a compelling case to the
contrary.
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RATIO DECIDENDI
The crucial issue at hand revolves around the Specific Performance of the Property
Development Agreement (PDA). The court considered various legal aspects, including the
nature of the PDA, the prerequisites for specific performance, and the question of novation. It
first analyzed the elements that govern the granting of interim injunctions under Order
XXXIX of the CPC, emphasizing the need for a prima facie case, balance of convenience,
and the likelihood of irreparable loss if the injunction is not granted. The plaintiff sought
specific performance of the PDA, which involved handing over possession, producing
property papers, executing necessary documents, and redeeming the property's mortgage. The
court stressed the importance of balancing the equities and preventing any irremediable
prejudice during the litigation. It noted that the plaintiff's prima facie case was not entirely
insubstantial, and the objection based on the unregistered nature of the PDA was not
convincing, citing Section 49 of the Registration Act. Furthermore, the court examined the
nature of construction contracts and development agreements, highlighting that agreements
involving valuable rights for the developer in the constructed property could be specifically
enforced. The court concluded that the defendant had not presented a compelling case to
vacate the interim order, thereby making the interim order absolute. In essence, the court's
ratio decidendi hinges on the recognition that development agreements creating valuable
rights in the developer's favor may be subject to specific performance, provided the equities
and legal prerequisites are met.
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