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2007 DIGILAW 16 (DEL)

JOGINDER LAL KAPOOR v. GIRISH CHOPRA

2007-01-03

BADAR DURREZ AHMED

body2007
BADAR DURREZ AHMED, J. ( 1 ) THIS is an application on behalf of the plaintiff under Order 12 Rule 6 read with Section 151 CPC seeking a judgment on admissions and the passing of a decree in terms of prayers (i), (ii) and (iii) of the plaint. The suit filed by the plaintiff is one for specific performance, mandatory and prohibitory injunctions and recovery of damages of Rs. 50 lakhs and in the alternative for damages of Rs. 1 crore. The prayers (i), (ii) and (iii) referred to above read as under:- "i) pass a decree of mandatory injunction directing the defendants 1 and 2 to clear all the pending dues pertaining the property in dispute, payable to the delhi Development Authority; ii) pass a decree of permanent prohibitory injunction prohibiting and restraining the defendants from transferring, alienating, parting with possession or creating any right, title or interest of third parties, in any manner, in the basement, ground floor, third floor of the property No. B-4/42, safdarjung Enclave, New Delhi in favour of any third parties pending payment of the dues in respect of the old structure as well as conversion charges as demanded and payable to the DDA and pending registration of the sale deed in favour of the plaintiff in respect of his share of his property; iii) pass a decree of specific performance of agreement dated 5. 6. 2000 in favour of the plaintiff and against the defendants jointly and severally, directing the defendants to execute the sale deed, with regard to the plaintiff's share in the property, First Floor B-4/42, Safdarjung Enclave, New delhi and the facilities and common areas in favour of the plaintiff and in the event the defendants fail to execute the sale deed, the Hon'ble Court may direct any competent officer of the Hon'ble Court to execute the sale deed in favour of the plaintiff. " As is evident from a reading of relevant portions of the prayers extracted above, the dispute concerns property bearing No. B-4/42, Safdarjung Enclave, New delhi. ( 2 ) THE plaintiff is the proposed purchaser. The defendant No. 1 is the builder and the defendant No. 2 is the owner. The defendant Nos. 1 and 2 allegedly entered into a collaboration agreement on 02. 02. 2000 for the purposes of development and sale of the property in question. ( 2 ) THE plaintiff is the proposed purchaser. The defendant No. 1 is the builder and the defendant No. 2 is the owner. The defendant Nos. 1 and 2 allegedly entered into a collaboration agreement on 02. 02. 2000 for the purposes of development and sale of the property in question. A registered General Power of Attorney was executed by the defendant No. 2 in favour of the defendant No. 1 for the purposes of effectuating the collaboration. As per the collaboration agreement, the defendant No. 1 was to get the first floor and second floor, whereas the defendant No. 2 would get the ground floor, basement and third floor. On 05. 06. 2000, the defendant No. 1 entered into an agreement to sell in respect of the first floor of the premises to the plaintiff for a total sum of Rs. 40 lakhs. It is averred that as per the agreement to sell, a sum of Rs. 38 lakhs was to be paid to the defendant No. 1 on the execution of the sale deed. However, on the request of the defendant No. 1, the plaintiff paid Rs. 38 lakhs by 16. 12. 2000 and the remaining two lakhs was not paid due to non-execution of the sale deed and alleged incomplete construction. The plaintiff submits that the balance two lakhs is also ready and available with the plaintiff. The bank draft is ready and stamp duty has been purchased. It is submitted by the plaintiff that the sale deed is not being executed by the defendant No. 1 because there is a dispute between the defendant Nos. 1 and 2 with regard to which the conversion of the property from lease-hold to free-hold was held up. For permitting the conversion, the Delhi Development Authority required the clearance of all the dues which included misuse charges of Rs. 1. 32 crores. The defendant No. 2, who is the owner, is not willing to pay the misuse charges nor is the defendant No. 1. It is as a result of this that a situation of impasse has developed. While the defendant No. 1 does not deny the entering into sale agreement in respect of the first floor of the premises in favour of the plaintiff, he disputes his liability towards misuse charges. It is as a result of this that a situation of impasse has developed. While the defendant No. 1 does not deny the entering into sale agreement in respect of the first floor of the premises in favour of the plaintiff, he disputes his liability towards misuse charges. On the other hand, the defendant No. 2 (the owner) is of the view that the liability of misuse charges cannot fall upon him. One of the recitals contained in the collaboration agreement between the defendant Nos. 1 and 2 recites that the owner has assured the builder that he is the absolute owner of the property, free from all encumbrances, attachments, litigation, disputes and claims, etc. and nobody else except the said owner has any right, title, claim or interest, etc in the said property and that he is fully authorised to deal, negotiate or handle the said property in any manner he deems fit and proper. Clause 12 of the said collaboration agreement prescribes that all the rates, cesses, taxes and demands due and payable upto the date of handing over charge of the building alongwith the land underneath the building shall be the exclusive responsibility/ liability of the owner and after this date, it shall be the exclusive responsibility / liability of the builder till the completion of new building and even after completion of the building, till the respective portions of the newly constructed building are handed over to the owner/builder, whereafter the responsibility / liability of rates, cesses, taxes, such as house tax, electricity and water charges, etc. shall be that of the respective owner /builder. It is further provided that the owner shall not be responsible in any way for any of the rates, cesses, taxes, etc. other than pertaining to his own share in the newly constructed building. Clauses 24 and 25 of the said collaboration agreement were also referred to by the plaintiff. They read as under: "24. That the owner has declared and assured the Builder that the property at B/4/42, Safdarjung Enclave, Residential Scheme, New Delhi is wholly free from all encumbrances, charges, gifts, liens, attachments, liabilities, tenancies, unauthorised occupation claims and litigation whatsoever and that no notice or requisition or acquisition verbal or written from any authority has been received by the Owner in respect of the said property. The owner further agrees and undertakes to keep the said property free from all encumbrances during the period of currency of this agreement till the final completion of the construction thereon by the Builder and the handing over of the Owner's share to the Owner. 25. That in case the said share in the property or any part thereof now declared to be belonging to the owner is found wanting on account of any defect in the title of the Owner or rights of the owner or transfer the same to any other person claiming title paramount to the owner or on account of any outstanding claims and demands of taxes payable by the Owner, the owner shall be liable for all the damages, lossess and costs sustained by the Builder. Accordingly, the owner agrees and undertakes to keep the Builder and / or its nominees, harmless and indemnified against all claims and expenses which the builder and / or its nominees may be liable to pay in this respect on behalf of the owner. " ( 3 ) THE plaintiff also referred to clause 16 of the General Power of attorney executed by the defendant No. 2 in favour of the defendant No. 1's father. Clause 16 of the said General Power of Attorney is qua the power to sell, convey, rent, transfer, etc. in respect of the first floor and second floor of the premises. However, clause 16 was subject to clause 18 of the general Power of Attorney which reads as under:- "18. Para 16 and 17 of the General Power of Attorney will only be applicable once the entire building till first and second floor and servant quarters are constructed, respective shares handed over to the owner Shri Naresh kumar Joshi or his heirs his / their shares i. e. entire basement floor, ground floor and third floor with two servant quarters, parking area for two cars and the builder share i. e. first floor and second floor with two servant quarters on terrace and two car parkings. However, once the entire first and second floor with two servant quarters on terrace two car parking is transferred to the builder as per clause 18 (ii) of the Agreement of Collaboration dated 2. 2. 2000 with Shri Girish Chopra, S/o Shri G. L. Chopra, r/o D-3, Ansal Villa, Vill. Satbari, New Delhi ? However, once the entire first and second floor with two servant quarters on terrace two car parking is transferred to the builder as per clause 18 (ii) of the Agreement of Collaboration dated 2. 2. 2000 with Shri Girish Chopra, S/o Shri G. L. Chopra, r/o D-3, Ansal Villa, Vill. Satbari, New Delhi ? 110030, this General Power of Attorney shall automatically stand cancelled and shall become null and void. " It is stated by the plaintiff that the building has been constructed. The ground floor, basement and third floor are in the possession of the owner (defendant No. 2), whereas the first floor is in the possession of the plaintiff. ( 4 ) IN the background of these circumstances, it was urged on behalf of the plaintiff that the agreement to sell dated 05. 06. 2000 is undisputed. It is also undisputed that the defendant No. 1 had the authority to sell the first floor in view of the collaboration agreement and the General Power of Attorney. It was further pointed out that it is not denied that a sum of Rs. 38 lakhs out of a total of Rs. 40 lakhs has already been paid by the plaintiff to the defendant no. 1 as consideration for the first floor of the said premises pursuant to the sale agreement dated 05. 06. 2000. It is further pointed out that a sum of Rs. 2 lakhs is the balance amount which is payable under the said agreement and the plaintiff is ready and willing to make that payment. It was submitted that even the stamp duty has been purchased. It is in these circumstances that the learned counsel for the plaintiff submitted that all the pre-conditions for the grant of a decree of specific performance have been met and, accordingly, there arises no issue to be decided in the suit and, therefore, a judgment on admissions is liable to be passed and a decree in terms of prayers (i), (ii) and (iii) ought to be passed. ( 5 ) MR Lekhi, who appeared on behalf of the defendant No. 2, submitted first of all that the provisions of Order 12 Rule 6 are discretionary. He says that the use of the word ?may? makes this amply clear. ( 5 ) MR Lekhi, who appeared on behalf of the defendant No. 2, submitted first of all that the provisions of Order 12 Rule 6 are discretionary. He says that the use of the word ?may? makes this amply clear. Order 12 Rule 6 indicates that where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court ?may?, at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions. Sub-rule (2) of Rule 6 of Order 12 further provides that whenever a judgment is pronounced under sub-rule (1), a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced. Reading the aforesaid provisions of Order 12 Rule 6, mr Lekhi, then referred to the provisions of Section 20 of the Specific Relief act, 1963 to submit that there is a discretion which has to be exercised before a decree of specific performance can be issued. He submitted that it must also be equitable for the court to grant such a decree. He specifically referred to section 20 (2) (c) to indicate that where the defendant enters into a contract under circumstances, which, though not rendering the contract voidable, make it inequitable to enforce specific performance, the court may properly exercise discretion not to decree specific performance. So, According to Mr Lekhi, mere admissions in the pleadings would not ipso facto translate into a decree being passed for specific performance. ( 6 ) MR Lekhi then referred to the collaboration agreement to indicate that the parties therein were the defendant No. 1 and the defendant No. 2. The General power of Attorney was executed by the defendant No. 2 in favour of one G. L. Chopra who is the defendant No. 1's father. The agreement to sell dated 05. 06. 2000 is between the defendant No. 1 and the plaintiff. He submits that there is collusion between the plaintiff and the defendant No. 1. To establish this, Mr Lekhi drew my attention to the order dated 26. 03. The agreement to sell dated 05. 06. 2000 is between the defendant No. 1 and the plaintiff. He submits that there is collusion between the plaintiff and the defendant No. 1. To establish this, Mr Lekhi drew my attention to the order dated 26. 03. 2004 passed in this matter where, according to him, although there was no caveat filed by any of the defendants, the counsel for the defendant No. 1 was present on the very first day when the suit was listed for admission and in the absence of defendant No. 2, an order was passed restraining the said defendant No. 2 from transferring, alienating, parting with possession or creating any third party rights in respect of any portion of the property No. B-4/42, Safdarjung Enclave, New Delhi. According to Mr Lekhi, it is the collusion between the plaintiff and the defendant No. 1 that is putting pressure on the defendant No. 2 to pay the misuse charges to the DDA. ( 7 ) WITH regard to the General Power of Attorney and will dated 02. 02. 2000, the stand taken by the defendant No. 2 is that the same were cancelled and revoked by the defendant No. 2 even prior to the plaintiff having instituted the present suit and, therefore, the plaintiff cannot construe the said documents as having been admitted. It is further submitted that there is no privity of contract between the plaintiff and the defendant No. 2 and that the defendant no. 1 also could not have acted on behalf of the defendant No. 2 as he had not fulfilled the essential terms of the collaboration agreement and, therefore, he had no right to enter into a contract with the plaintiff. It is submitted by the defendant No. 2 that any contract between the defendant No. 1 and the plaintiff would be void ab initio and not binding on the defendant No. 2. Clauses 16 and 17 of the General Power of Attorney were subject to clause 18 thereof which clearly stipulated that the defendant No. 1 could only hand over respective shares subject to handing over the shares to the owner / defendant no. Clauses 16 and 17 of the General Power of Attorney were subject to clause 18 thereof which clearly stipulated that the defendant No. 1 could only hand over respective shares subject to handing over the shares to the owner / defendant no. 2 to the extent of the entire basement floor, ground floor and third floor with two servant quarters, parking area for two cars and the builder, his share, i. e. , first floor and second floor with two servant quarters on terrace and two car parkings. It is alleged that since the defendant No. 1 did not adhere to the above mentioned clauses of the agreement and the General Power of Attorney, he had no right to enter into the contract with the plaintiff or any other third party. With regard to the agreement to sell dated 05. 06. 2000, the defendant no. 2 submitted that it was a manipulated, sham and bogus document. In any event, it was not admitted by the defendant No. 2. It was also submitted by the defendant No. 2 that even if the defendant No. 1 made admissions, it would be of no consequence because, firstly, his authority to even enter into a sale agreement was in dispute and, secondly, he was allegedly in collusion with the plaintiff. ( 8 ) THE defendant No. in his reply to the application filed by the plaintiff has stated that the agreement between the defendant No. 1 and the plaintiff could not be gone through because the property in question was not converted from lease-hold to free-hold due to non-payment of the dues by the defendant No. 2 and it is because of this that the sale deed could not be executed. The defendant No. 1, however, stated that the agreement to sell dated 05. 06. 2000 was a void agreement for the reason that the plaintiff as well as the defendant No. 1 at the time of the agreement were under a bona fide mistake of fact as regards the property in question being without any charge or encumbrances or any dues payable to the DDA as had been held out by the defendant No. 1 till then. The agreement was also, according to the defendant no. 1, further contingent upon the defendant No. 2 getting the conversion done from lease-hold to free-hold by the DDA. The agreement was also, according to the defendant no. 1, further contingent upon the defendant No. 2 getting the conversion done from lease-hold to free-hold by the DDA. Since the defendant No. 1 failed to do so, the agreement became void under Sections 32 and 34 of the Indian Contract act. As regards the collaboration agreement, it was submitted on behalf of the defendant No. 1 that the said agreement had been entered into, but disputes had arisen in respect thereof between the defendant Nos. 1 and 2 and the same were pending arbitration before Hon'ble Mr Justice P. K. Bahri. ( 9 ) IT is in the background of these contentions and submissions that it has to be decided whether this application for a judgment on admissions is to be allowed or not. ( 10 ) THE considerations that are necessary to be taken into account with regard to an application under Order 12 Rule 6, CPC have clearly been set out in delhi Jal Board v. Surendra P Malik: 2003 III AD (Delhi) 419. paragraph 9 of the aforesaid decision reads as under:- "9. The test, therefore, is (i) whether admissions of fact arise in the suit, (ii) whether such admissions are plain, unambiguous and unequivocal, (iii)whether the defence set up is such that it requires evidence for determination of the issues and (iv) whether objections raised against rendering the judgment are such which go to the root of the matter or whether these are inconsequential making it impossible for the party to succeed even if entertained. It is immaterial at what stage the judgment is sought or whether admissions of fact are found expressly in the pleadings or not because such admissions could be gathered even constructively for the purpose of rendering a speedy judgment. " From the above, it becomes clear that the admissions must be plain, unambiguous and unequivocal before an order on admissions can be passed. It is also clear that when a defence is set up and it requires evidence for the determination of the issues then the provisions of Order 12 Rule 6 are not available and a judgment cannot be passed on the plaintiff's asking. It is also clear that when a defence is set up and it requires evidence for the determination of the issues then the provisions of Order 12 Rule 6 are not available and a judgment cannot be passed on the plaintiff's asking. ( 11 ) THE discussion of the contentions and submissions made by the plaintiff, defendant No. 1 and the defendant No. 2 clearly indicates that there are various fundamental issues which require to be resolved on which there is no unanimity insofar as the parties are concerned. Firstly, the question that arises is whether the defendant No. 1 had the authority to enter into the sale agreement with the plaintiff? Secondly, the question arises as to who would be liable to pay the misuse charges to the DDA?whether it is the defendant No. 1 or the defendant No. 2? Thirdly, the question arises as to whether a decree for specific performance of the agreement to sell could be passed when, as the defendant No. 1 urged, neither the defendant No. 1 nor the plaintiff were aware of the misuse charges that was required to be paid on the property in question. There are other issues also which require a determination. But the above are sufficient to indicate that the admissions are not of such a nature, even if there are some admissions, as would entitle the plaintiff to a decree of specific performance straightway. Therefore, I am of the view that these issues need to be thrashed out in the suit, upon the parties leading evidence. Accordingly, the plaintiff's application cannot be allowed and the same stands dismissed. There shall be no order as to costs.