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1994 DIGILAW 463 (MAD)

S. Suresh v. Dr. M. S. Gopalakrishnan

1994-06-24

GOVARDHAN

body1994
Judgment :- 1. The applicant in his affidavit contends briefly as follows: The applicant-plaintiff has filed the suit for recovery of Rs. 12 lakhs against respondents 1 to 3 jointly and severally. Against the respondents 1 and 2, the claim is for Rs. 4 lakhs and against the third respondent, it is Rs. 8 lakhs. The applicant is a Real Estate Consultant. The first respondent is the owner of the suit schedule property bearing Door No. 107, Harrington Road, Chetput. The first respondent was looking out for a Real Estate Consultant for vacating his tenant viz., Civil Supplies Limited a wing of the Civil Supplies Department and was also contemplating to promote the property with prospective builders-cum-promoters. The first respondent being a permanent resident of U.S.A., the second respondent was acting as Power of Attorney of the first respondent and he had negotiated with the applicant for evicting the tenant and for promoting a multi-storeyed complex in the property. The applicant with his efforts had evicted the tenant and had incurred substantial expenses for the same. The third respondent who is a reputed builder in the City, was recommended by the applicant for the joint venture of constructing a multi-storeyed complex in the suit property and an agreement was signed between the respondents 1 and 2 and the third respondent on 5- 5-1993 for the said purpose. The builder agreed to convey 50% of the constructed area in lieu of sale consideration payable to the first respondents property. The respondents 1 and 2 gave necessary authorisation to the applicant to appear on their behalf and process the application for N.O.C. with Appropriate Authorities, Income-tax Department and Reserve Bank of India for obtaining permission from them on behalf of the first respondent as required under Section 31(1) of the Foreign Exchange Regulation Act. The applicant made several trips to Bombay engaging the services of competent auditors and lawyers at Bombay and also at Madras with his own funds and obtained certificate of clearance from the Reserve Bank of India and also the permission as required by the Appropriate Authorities. The applicant made several trips to Bombay engaging the services of competent auditors and lawyers at Bombay and also at Madras with his own funds and obtained certificate of clearance from the Reserve Bank of India and also the permission as required by the Appropriate Authorities. After obtaining the N.O.C. and the permission from the Reserve Bank of India, the respondents 1 and 2 have entrusted the job of obtaining clearance from the Urban Land Ceiling Authorities and accordingly the applicant represented them in Urban Land Ceiling Proceedings by engaging necessary experts in the field and obtained all the clearances from the Urban Land Ceiling Authorities also. The respondents 1 and 2, in consideration of the services rendered by the applicant, agreed to pay a sum of Rs. 4 lakhs and the third respondent agreed to pay Rs. 9 lakhs for the efforts and services in organising the project and concluding the transaction in a manner they expected. A sum of Rupees One lakh was paid and the balance is yet to be paid. The respondents 1 to 3 have not kept up their promise and did not pay the amount due to the applicant in spite of repeated demands. It appears that the fourth respondent is trying to knock off monies from the respondents 1 to 3 without reference to the rights of the applicant. If he is allowed to do so, the applicant will suffer grave prejudice and hardship. Respondents 1 and 2 have no other properties excepting the suit property. If they are allowed to alienate their share without settling the amount due to the applicant, the applicant will have no other tangible property to proceed against them for realising the decree. Hence the application. 2. When this application was filed along With the suit, after hearing the learned counsel appearing for the applicant, interim injunction was granted and notice returnable by 23-3-1994 was also ordered. 3. In a similar application filed by the application for ordering attachment of the schedule-mentioned property, notice alone was ordered. The third respondent has filed an application in Application No. 2278/1994 for vacating the interim injunction granted. 4. The third respondent in his counter to this application contends briefly as follows: This respondent is not liable to pay any amount to the applicant. The third respondent is a promoter and builder of residential and commercial buildings. The third respondent has filed an application in Application No. 2278/1994 for vacating the interim injunction granted. 4. The third respondent in his counter to this application contends briefly as follows: This respondent is not liable to pay any amount to the applicant. The third respondent is a promoter and builder of residential and commercial buildings. The fourth respondent is a Real Estate Broker and he had introduced the second respondent to the third respondent on coming to know that the second respondent intends to develop the property in question. The respondents 2 and 3 entered into an agreement to develop the property by constructing a storeyed building in the property in accordance with the rules, regulations and bye-laws in force. The third respondent has to draw up the plans, incur all the charges, fees and expenses in connection with the preparation and sanction of the plans. On such sanction being accorded, the third respondent has to complete the construction and hand over to the first respondent 50% of the total built up area in the storeyed building and the balance can be sold. The project should be completed within 24 months after obtaining clearance from the competent Authorities. There was neither a building nor a tenant in occupation of the property in question. Prior to the date of agreement viz., 5-5-1993, the respondents 1 and 2 have vacated the tenant and had demolished the old superstructure. The third respondent agreed to pay 3% commission on 50% of the land value to the fourth respondent. It comes to Rs. 1,80,430/- only. The applicant was a helper under the fourth respondent. He had signed as one of the witnesses to the agreement dated 5-5-1993. On executing the agreement, the third respondent appointed Mr. Prem Karra, a Chartered Accountant to prepare the entire applications, submit the same and process them before the Appropriate Authority and the Reserve Bank of India. Mr. Prem Karra submitted his bills for the services rendered and they have been settled. The contention of the applicant that it was he who processed the applications by expending huge amount is not true. The first respondent owns several properties as mentioned in the application filed before the Appropriate Authorities. The allegation that the respondents 1 and 2 have no other property is not true. There is no agreement to pay Rs. 12 lakhs to the applicant. The first respondent owns several properties as mentioned in the application filed before the Appropriate Authorities. The allegation that the respondents 1 and 2 have no other property is not true. There is no agreement to pay Rs. 12 lakhs to the applicant. When the 3% commission payable to the fourth respondent, itself is only Rs. 1,80,430/-, the demand for Rs. 13 lakhs which virtually constitutes 21% as commission amount is not sustainable. It shows the falsity of the applicants case. The pleadings in the plaint and the application are contradictory with each other. The third respondent is not liable to pay any amount. If the execution and completion is prevented, the process will be delayed beyond the stipulated period and the third respondent will be subject to additional expenses. The application is, therefore, liable to be dismissed. 5. The fourth respondent filed a separate counter contending briefly as follows: The fourth respondent is a Real Estate Broker and he had introduced the third respondent to the respondents 1 and 2. Respondents 1 and 2 entered into an agreement with the third respondent to develop the land and for the services of the fourth respondent, the third respondent agreed to pay a commission of 3% on the value of the transaction. It works out to Rs. 1,71,413.25 and it was rounded off to Rs. 1,71,000/-. The applicant who is known to the fourth respondent, had worked with the fourth respondent on other transactions and he had agreed to join the fourth respondent in this transaction also. Out of the total commission of Rs. 1,71,000/-, the share of the second respondent was 50%. The fourth respondent paid Rs. 85,000/- towards the share of the applicant in full-settlement and also Rs. 15,000/- towards his expenses for trips to Bombay. The applicant is not entitled to any further amount. Applicant has to collect the No Objection Certificate from the Appropriate Authority and from the Reserve Bank of India. The fourth respondent had to look after the other matters. The fourth respondent does not owe any further amount to the applicant. There was no tenant at the time of entering into the development agreement. The old building had already been demolished by the respondents 1 and 2. The applicant was not independently engaged by the respondents 1 to 3 for any work. The fourth respondent does not owe any further amount to the applicant. There was no tenant at the time of entering into the development agreement. The old building had already been demolished by the respondents 1 and 2. The applicant was not independently engaged by the respondents 1 to 3 for any work. The third respondent has its own Auditors and staff to proceed with the formalities. The claim of the applicant is false and is unsustainable and it has affected the business of the fourth respondent and causes irreparable injury to the fourth respondent: It cannot be compensated in terms of money. The fourth respondent is an unnecessary party. The value of the transaction being Rs. 57,13,775/-, the claim of the applicant for Rs. 13,00,000/- which constitutes more than 23% shows the falsity of the claim. The applicant has no prima facie case and the balance of convenience is not in his favour. The suit itself is not maintainable. The application is, therefore, liable to be dismissed. 6. The applicant filed a reply statement reiterating his earlier stand that he is entitled to a payment of Rs. 13 lakhs and that he was paid only Rupees One Lakh and for the balance, he has filed the suit. 7. The point for consideration is; Whether the interim injunction granted on 23-2-1994 has to be made absolute or liable to be vacated? 8. Point: After hearing all the applications and when the orders were reserved, the third respondent has come forward with a request to accept the Bank Guarantee for the entire suit claim and for suspension of the order of interim injunction. Since the applicant also did not object for the same, the Bank Guarantee furnished by the 3rd respondent on 28-4-1994 was accepted and interim injunction already granted was also suspended for a period of two months from 29-4-1994. 9. The applicants case is that he had entered into an agreement with the respondents 1 and 2 for vacating the tenant viz., Civil Supplies Limited a wing of the Civil Supplies Department of Government of Tamil Nadu who was in occupation of Door No. 107, Harrington Road, Chetput, as a tenant and for achieving that purpose he had incurred substantial expenses. It is also the case of the applicant that the respondents 1 and 2 were looking out for a reputed builder who was constructing a multi-storeyed complex in the property and he had introduced the third respondent who is a reputed builder for the said purpose and an agreement was entered into between the respondents 1 and 2 on one hand and the third respondent on the other for putting up a multi storeyed complex in the suit schedule property in the ratio of 50:50 and the builder agreed to convey the 50% of the constructed area in lieu of sale consideration payable to the first respondents property. The specific case of the respondents 1 to 4 is that there was no tenant at the time of entering into the agreement and it is the further case of the respondents that the respondents 1 and 2 have evicted the tenant and demolished the entire superstructure in the suit property before entering into the agreement on 5-5-1993. Whether the tenant was evicted from the property by the respondents 1 and 2 or by the applicant is a matter to be proved during the trial of the suit. The parties have entered into an agreement on 5-5-1993 and as per the agreement, the builder agreed to convey 50% of the constructed area in lieu of the sale consideration payable to the first respondents property is admitted. But the further contention of the applicant is that pursuant to that, the respondents 1 and 2 gave a necessary authorisation to him to appear on their behalf and process the application for No Objection certificate with Appropriate Authorities, Income-tax Department, Reserve Bank of India and also Urban Land Ceiling Authorities and for services rendered by him in achieving all that the respondents wanted, the respondents 1 and 2 have agreed to pay a sum of Rs. 4 lakhs and the third respondent agreed to pay Rs. 9 lakhs to him and that only a sum of Rupees One lakh has been paid and the balance is yet to be paid. The third respondent would contend that the contradictory statements made by the applicant in the plaint and in the applications would itself belie the case of the applicant and has stated in detail what are the contradictions between the pleadings in the plaint and pleadings in the application. The third respondent would contend that the contradictory statements made by the applicant in the plaint and in the applications would itself belie the case of the applicant and has stated in detail what are the contradictions between the pleadings in the plaint and pleadings in the application. A study of these particular paragraphs mentioned in the counter of the third respondent would show that the applicant had no consistent case to make the suit claim against the respondents. The absence of consistent case of the applicant in his plaint and in the application for injunction itself would be sufficient to hold that there is no prima facie case made out by the applicant to make the interim injunction absolute. 10. The learned counsel appearing for the third respondent would argue that it is mandatory on the part of the authorities to pass an order within 90 days of the receipt of the application and they have engaged one Prem Karra for preparing the application and presenting it and processing the same before the Appropriate Authorities and the Reserve Bank of India and the claim of the applicant that he had processed them is not true. According to the third respondent, he has nothing to do with the applicant. The agreement between the third respondent and the respondents 1 and 2 would disclose that the third respondent had agreed to put up the construction in the building and part 50% of the same with the owner of the property and he had also agreed to pay 3% commission on 50% of the land value to the fourth respondent who had introduced him to the second respondent in entering into an agreement and the 3% commission itself comes to Rs. 1,80,430/- only. When the builder had entered into an agreement with the owner by which he had agreed to part with 50% of the constructed building and also pay commission to the person who had introduced him to the owner, it is highly improbable that the third respondent would have entered into an agreement with the applicant to pay Rs. 9 lakhs to the applicant by way of remuneration for obtaining No Objection Certificate from the Appropriate Authorities and clearance from the Reserve Bank of India, the duty of the third respondent in putting up the construction itself would arise only after these formalities are observed. 9 lakhs to the applicant by way of remuneration for obtaining No Objection Certificate from the Appropriate Authorities and clearance from the Reserve Bank of India, the duty of the third respondent in putting up the construction itself would arise only after these formalities are observed. Therefore, it is highly improbable that the third responded would have entered into an agreement with the applicant to pay Rs. 9 lakhs to the applicant. 11. The learned counsel for the respondents 1 and 2 would argue that the first respondent who is the owner is in the United States and the second respondent is his Power Agent and there is no necessity for them to enter into an agreement with the applicant to evict the tenant and agree to pay for the same. It is also contended by the learned counsel appearing for the respondents 1 and 2 that the applicant has not produced any accounts and he had not placed any evidence to prove payment since he claims that the had incurred heavy expenditure in evicting the tenant and in the absence of accounts and proof of payment, the applicants version has to be rejected. Further, the tenant was not an individual but is a wing of the Government of Tamil Nadu. Therefore, there is no question of the applicants spending any amount for evicting the tenant and it is highly improbable that he would have paid any amount to the tenant for vacating the premises. Therefore, the claim of the applicant that he had evicted the tenant at heavy expenditure has to be rejected. 12. The learned counsel appearing for the respondents 1 and 2 would further argue that the so called agreement said to have been entered into between the applicant and the respondents 1 to 3 to pay Rs. 13 lakhs to the applicant for the services rendered by him in obtaining “No Objection Certificate” from the Appropriate Authorities, Reserve Bank of India, and clearance from the Urban Land Ceiling Authorities is hit under Section 23 of the Contract Act and the plaintiffs claim has to be rejected on the ground that the so-called agreement is opposed to public policy. Section 23 of the Contract Act is as follows: “23. Section 23 of the Contract Act is as follows: “23. The consideration or object of an agreement is lawful, unless — it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful, is void.” 13. According to the learned counsel appearing for the respondents 1 and 2, the applicants case that the respondents 1 to 3 had agreed to make payment to him for achieving what they wanted amounts to a contract against public policy from the nature of the act to be performed and from the nature of consideration. The learned counsel appearing for the respondents would argue that freedom of contract is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed and no injury is done to the economic interests of the community at large and according to the applicant, the contract said to have been arrived at between himself and the respondents 1 to 3 is not a contract which is reasonable between the parties to the said contract having equality of bargaining power and if it is accepted, it would amount to accepting the contract opposed to public policy. According to the learned counsel appearing for the respondents 1 and 2, entering into an agreement to get favourable orders from the Authorities concerned, the Reserve Bank of India and Urban Land Ceiling Authorities by exercising influence or using his influence by the applicant, is an agreement tending to injure the public service and it will have to be rejected as not a valid agreement. There cannot be any doubt that the applications filed before the Appropriate Authority for “No Objection Certificate”, Reserve Bank of India for a clearance and Urban Land Ceiling Authority for exemption are all applications filed in accordance with the law of the country and they must be determined and decided upon their merits only and it is against the public interest for anyone officiously, wantonly and capriciously creating an atmosphere in such a way that he gets favourable orders. Therefore, I am of opinion that the so called agreement between the applicant and the respondents 1 to 3 is contrary to public policy since it amounts to hiring the applicant for money when the respondents. 1 to 3 have a right to have access to the Authorities concerned to get orders on their applications on merits on their own accord. The agreement said to have been entered into between the applicant and the respondents 1 to 3 is destructive of all sound and proper administration in the offices of the Appropriate Authority, Reserve Bank of India and the Urban Land Ceiling Authorities and had disclosed a tendency to influence public servants to decide the matters otherwise than on their own merits. Therefore, the agreement said to have been entered into between the applicant and the respondents 1 to 3 has to be necessarily held as void as being opposed to public policy and in that view, I am of opinion that the applicant cannot press into service the so-called agreement under which he is entitled to Rs. 3 lakhs from respondents 1 to 3. In that view, I am of opinion that the applicant cannot be said to have established a valid ground to make a claim against the respondents. 14. The so-called authorisation said to have been given in favour of the applicant only shows that the second respondent has only authorised the applicant to receive the proceedings of the Assistant Commissioner, Urban Land Tax on his behalf and the second respondent has authorised the applicant to receive the “No Objection Certificate” from the Appropriate Authority Income tax, on his behalf and it cannot be established that the applicant had acted on behalf of the respondents 1 to 3 in getting the said o rders. Instead of the second respondent himself visiting the offices of the Appropriate Authority and the Assistant Commissioner, Urban Land Tax and receiving the orders in person, he had authorised the applicant to collect the said orders and in that view, this authorisation cannot be pressed into service by the applicant to hold that he had acted on behalf of the respondents 1 and 2. 15. The second respondent has filed a typed set of documents which would show that the first respondent has got number of properties both in Madras and other parts of Tamil Nadu. Therefore, the apprehension of the applicant that it may not be possible for him to realise the fruits of the decree, when he succeeds in the suit if the injunction order is vacated is a baseless apprehension and I am of opinion that the same has to be dismissed on that ground. Considering all these aspects, I am of opinion that the applicant has failed to make out a prima facie case in his favour, that the balance of convenience is not in favour of the applicant, that the relative hardship will be much more to the respondents 1 to 3 if the injunction is made absolute and in that view I am of opinion that the interim injunction already granted on 23-2-1994 is liable to be vacated. 16. In the result, O.A. No. 176/1994 is dismissed, and interim injunction already granted on 23-2-1994 is vacated. Application No. 2278/1994 is allowed in view of the order passed in O.A. No. 176/1994. Application No. 1194/1994 is also dismissed.