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2007 DIGILAW 1202 (DEL)

COL. S. J CHAUDHARI v. VANTAGE CONSTRUCTION

2007-05-31

REKHA SHARMA

body2007
REKHA SHARMA, J. ( 1 ) AN order based upon the directions of the Division Bench dated October 31,1996 was passed by this court on July 20,2006. It is unacceptable to defendants" No. 1 to 3. Therefore they have filed an application seeking its review. They allege that the order dated July 20,2006 has been obtained by the plaintiff and defendants No. 5 to 13 by fraud and misrepresentation. They further allege that the order so passed has vitally affected their interest in the suit property. ( 2 ) BEFORE I deal with the application it is essential to give background of the case. The bone of contention between the parties is property bearing Municipal No. 20 A friends Colony New Delhi measuring 4300 sq. ft. It was owned by the plaintiff col. S. J. Chaudhr. On April 23,1997 he entered into a Collaboration Agreement with defendants No. 1 to 3 who shall hereinafter be referred to as builders. The principal term of the Agreement was that the builder was to develop the property in accordance with the sanctioned building plan at his own cost and out of the developed property 54% of the total saleable space on each floor of the residential building together with proportionate right, title and interest in the land was to belong to the builder and 46% to the plaintiff. The building was to consist of 10 flats; 5 flats being proportionate to 54% (of the builder) and five flats being proportionate to 46% (to the owner ). ( 3 ) IT appears that the Agreement ran into rough weather. The owner alleged that the builder constructed the flats contrary to the sanctioned plans and converted five flats falling to his share into nine flats. He further alleged that the builder alienated the entire 54 % of the built up areas falling to his share to defendants 5 to 13, received from them a sum of Rs. 2. 5 crores and diverted those funds to his other investments. He also alleged that having received more than the amount spent in the building the builder lost interest in developing the property and he committed several breaches of the Agreement. This led the owner to file the present suit against the builder as well as against defendants 5 to 13 to whom the builder had sold 54% of the built area falling to his share. This led the owner to file the present suit against the builder as well as against defendants 5 to 13 to whom the builder had sold 54% of the built area falling to his share. "it seems that because of the pendency of the suit the construction of the building as per the Collaboration Agreement came to a stand still and as both the plaintiffs and defendants No. 5 to 13 had much in stake in the early completion of the building they moved a joint application under Order 23 rule 1 and 3 of the CPC being IA No. 11266/95 requesting for the appointment of the nominee of the defendants No. 5 to 13 as the Receiver to complete further construction. The defendants also filed an application for appointment of the Receiver. This Court vide order dated January 12, 1996 acceded to the prayer for appointment of the receiver but instead of appointing the nominee of defendant No. 5 to 13 appointed defendant No. 2 as the Court Receiver for completing the remaining work, obtaining completion certificate and the occupancy certificate and to do such other works/ acts necessary for the purpose. Aggrieved by the order so passed the owner and defendants No. 5 to 13 preferred an appeal to the Division bench. The Division Bench by its order of October 31,1996 reversed the order of the learned Single Judge and instead of defendant No. 2 appointed Shri Vinay bagla who was the nominee of the plaintiff and defendants No. 5 to 13 as the receiver and also gave certain directions. The following directions are relevant for our purpose. : (ii) "shri Vinay Bagla son of Shri S. N. Bagla resident of 30-A/1 Friends Colony, new Delhi is appointed the Receiver who shall complete the remaining construction of the building subject to revalidation of the plans by the MCD and other local/ statutory authorities involved and for that purpose the Receiver shall have authority to" : (iii) "the Receiver will at the cost of flat buyers defendants 5 to 13 make arrangement for completing the construction of units allocated to defendants 5 to 13 namely A1,a2,c1,c2 and D1 +d2 (part) totaling upto an area of 54% of the built up area and upto a maximum of 5 dwelling units. Receiver will also at the cost of defendants 5 to 13 take steps for completing flat No. B1,e2 and D2 (part) falling to the share of the plaintiff. " (v) "as soon as the construction is completed and completion certificate is obtained possession of the respective flats shall be delivered simultaneously to the plaintiff and defendants 5 to 13 subject to the previous permission by the trial Court. " (vi ). ". ". " "the abovesaid appointment of the Receiver is without prejudice to the rights and contentions of defendants No. 1 to 4 which are sub-judice in the suit and also without prejudice to the right of the defendants No. 1 to 4 to claim any compensation from any of the parties to the suit if the defendants 1 to 4 or any of them may choose to lay so in any appropriate proceedings. So also the rights of the plaintiff and defendants 5 to 13 to claim compensation from defendants No. 1 to 4 for the alleged breach of the contract is not prejudiced subject to an overall ceiling unit of 5 lacs on the claim. " 3. The Division Bench before passing the aforementioned directions made certain observations with regard to the conduct of the builder. It will be appropriate to notice some of those observations before I deal with the Review application. They are as under :- "the learned counsel for the flat buyers is eminently justified in submitting that proportionate with 54% share of the built up area to which the builder was entitled under the Collaboration agreement with the owner, these were the flats which were the stake of the builder and having agreed to part with his interest in these flats in favour of the flat buyers the builder is left now with practically no interest in the building; for him what is left surviving is only the obligations. Obviously he will have to invest further amount to complete what remains to be done and now why should the builder do it. " "the owner and the flat buyers alone have the interest in the suit property or atleast substantial interest in the suit property. Obviously he will have to invest further amount to complete what remains to be done and now why should the builder do it. " "the owner and the flat buyers alone have the interest in the suit property or atleast substantial interest in the suit property. The facts and circumstances of the case go to show that the plaintiff, the owner of the property, having being placed in a tight corner and defendants No. 5 to 13, the innocent flat buyers having found themselves landed into litigation for no fault of theirs and inspite of having parted with practically full consideration barring a meager part thereof. " They do not have faith in the builder. We have already found that the builder cannot now be trusted upon for completing the remaining part of the construction. The owner and the flat buyers have jointly indicated their choice of Receiver vide IA No. 11266/95 which deserves to be respected and accepted in the facts and the circumstances of the case. " "the learned Single Judge opined that substantial amount of the money has been expended by defendants 1 to 3 in the construction of the disputed property and an interest stands created in their favour by the agreement dated april 23, 1987 which need to be taken care of. What has been overlooked by the learned Singh Judge is that the interest which the builder defendants No. 1 to 3 had in the suit property, already stands parted in favour of the flat buyers defendants No. 5 to 13 and whatever was invested by the builder already stands realised to him. " ( 4 ) HAVING provided the background, I now proceed to deal with the application for review. " The grounds taken therein are as under:- 1. . That the application on which the order dated July 20,2006 was passed though purported to have been filed by the Receiver was neither filed nor signed or supported by the affidavit of the Receiver. 2. . " The grounds taken therein are as under:- 1. . That the application on which the order dated July 20,2006 was passed though purported to have been filed by the Receiver was neither filed nor signed or supported by the affidavit of the Receiver. 2. . That the Division Bench had permitted the Receiver to seek only revalidation of the original plans got sanctioned by defendant No. 1 from the corporation but the Receiver disregarding the said direction had drawn new plans and got them sanctioned from the Corporation playing a fraud on this court and defendant No. 1, in as much as, the original sanctioned plan was for 10 number of flats and what is available at the site is 11 number of flats. 3. . That defendants 1 to 3 were served with an advance copy of the application stating therein that it was likely to be listed on July 12, 2006 but no such application was got listed on that day in order to deprive the defendants to render necessary assistance to the Court. 4. . That the completion certificate obtained was manipulated because no completion certificate is given in respect of a portion of the suit property. "although, it is true that the application being IA No. 7677/06 seeking handing over of possession of flat B1, E2 and part of D2 to the plaintiff and flats A1, A2,c1,c2,d1 and part of D2 to the defendants No. 5 to 9, 11 and 13 was not signed by the Receiver and even the affidavit in support thereof was not filed by him but by one Lalit Kumar Kabra"but the Receiver in his reply to the application for review has given full justification why he had personally not signed the application or filed his affidavit. " The Receiver has annexed with his reply the letter dated June 28, 2006 addressed to Shri L. K. Kabra stating therein that he was going to be out of country in the first week of August 2006 and, therefore, was authorizing him to take appropriate action in respect of filing application and in case of Hon"ble High Court issuing the order, to execute those orders including handing over the possession of the flats. It was because of this authorization in favour of L. K. Kabra that he filed the affidavit in support of the application. It was because of this authorization in favour of L. K. Kabra that he filed the affidavit in support of the application. As regards the application it was signed by Shri prashant Bhushan Advocate in whose favour the Receiver had signed Vakalatnama before leaving the country. "in this view of the matter, I find no merit in the objection. " ( 5 ) IT was vehemently contended by learned counsel for defendants 1 to 3 that the Receiver by authorizing L. K. Kabra to act on his behalf abdicated his power and function entrusted to him by the Court and that any application made by a person other than the Receiver ought not to have been entertained. " It was further contended that the Receiver was liable to be prosecuted for acting in violation of the directions of this Court. " As has already been noticed above, it was at the instance of the plaintiff and defendants 5 to 13 that the Division bench had appointed Shri Vinay Bagla as the Receiver. " The Court had done so knowingly and consciously. " Therefore, if anybody could find fault with the functioning of the Receiver, it could either be plaintiff or defendants 5 to 13. " They have raised no such objection. " Rather they are supporting the receiver. " This objection too has no merit. " ( 6 ) IT was argued by learned counsel for defendants 1 to 3 that in terms of the directions of the Division bench only five dwelling units could be built on the 54% area which came to the share of the builder but he had built more than 5 dwelling units and obtained permission to hand over possession of all those dwelling units. The defendants however was not able to make good their this allegation. Nothing was placed on record to substantiate the same. "in any case, the application which was filed before this Court for handing over of possession of the flats was in terms of the directions given by the Division Bench and it cannot, therefore, be said that the possession has been obtained for more than five dwelling units. Nothing was placed on record to substantiate the same. "in any case, the application which was filed before this Court for handing over of possession of the flats was in terms of the directions given by the Division Bench and it cannot, therefore, be said that the possession has been obtained for more than five dwelling units. " ( 7 ) IT was further argued by defendants No. 1 to 3 that the Receiver had got new plans sanctioned in respect of the property instead of revalidating the old plans as per the direction of the Division Bench dated October 31,1996. In this regard learned counsel appearing for defendants No. 5 to 13 had submitted that earlier also this issue was raised by defendants 1 to 3 by filing an application bearing IA No. 10826/99 which was dismissed by order dated May 24,2000. "the court while dismissing the said application with cost stated that "defendants no. 1 to 3 cannot raise objection that Receiver ought to have sought revalidation which had expired on 12 November 1989 instead of submitting the revised plans with MCD. . . . . . . . . . . . . . . . . . . . . . . . . . . In view of these directions also, the objection raised to the said effect by the defendants No. 1 to 3 is untenable and the application deserves to be dismissed" Against the aforesaid order of the Single Judge the said defendants went up to the Supreme Court but could not succeed. " Therefore once again, the contention raised deserves to be dismissed. " ( 8 ) THE contention of the defendants 1 to 3 that the application which was moved on behalf of the Receiver was to be listed on July 12, 2006 and that the applicant manipulated to get the same not listed on that day so as to prevent defendants No. 1 to 3 from appearing before the Court on the date of hearing is highly frivolous. If an Advocate mentions or gives a probable date about the listing of an application, it can only be taken to be a tentative date because it is the Registry of the Court which ultimately lists the applications. It is for the counsels to keep looking at the cause list to find out when it is actually listed. If an Advocate mentions or gives a probable date about the listing of an application, it can only be taken to be a tentative date because it is the Registry of the Court which ultimately lists the applications. It is for the counsels to keep looking at the cause list to find out when it is actually listed. ( 9 ) LASTLY, it was contended that under the Municipal Corporation Bye-laws, the completion certificate cannot be granted in respect of portion of the property. " In this regard, learned counsel for the Receiver and defendants 1 to 3 have placed on record extract of the Building Bye Laws for the Union Territory of Delhi, 1983 and have referred to clause 8 (1) of the same. " It lays down that no person shall occupy or allow any other person to occupy any building or part of a building for any purpose until such building or part has been granted the occupancy certificate. "this means that completion certificate can be obtained even with regard to part of the building. The objection therefore has no merit. ( 10 ) IN view of what has been noticed above, I find no error apparent on the face of the order dated July 20, 2006 and find no reason whatsoever to review the same. It seems to me that the application for review has been filed only to put road blocks in the way of plaintiff and defendants 5 to 13 so as to deprive them of the fruits of the property in which they have invested large sums of money. On the other hand, defendants 1 to 3 in view of the observations of the Division Bench have virtually no interest left in the flats in question. The application has not been made with bonafide intention. " It is dismissed with costs of Rs. 10,000/ -.