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2013 DIGILAW 621 (CAL)

Shambhu Nath Sharma v. Samiran Chandra Majumdar

2013-08-29

PRASENJIT MANDAL

body2013
JUDGMENT : Prasenjit Mandal, J. These two applications are taken up for hearing together as the common question of fact and law has arisen. Both the applications are governed by this judgment and order. 2. The application being C.O. No. 1222 of 2013 is at the instance of the plaintiff/appellant and is directed against the Order No. 12 dated March 1, 2013 passed by the learned Additional District Judge, 1st Court, Howrah in Misc. Appeal No. 205 of 2011 thereby rejecting an application of the plaintiff/appellant for stay of further hearing of the misc. appeal. 3. The other application being C.O. No. 1502 of 2013 is against the judgment and order dated March 19, 2013 passed by the learned Additional District Judge, 5th Court, Howrah in Misc. Appeal No. 277 of 2010 thereby affirming the order of refusal to pass temporary injunction by the learned Trial Judge. 4. The plaintiff/appellant/petitioner herein of the C.O. No. 1222 of 2013 instituted the title suit being Title Suit No. 29 of 2011 against the defendants/respondents/opposite parties herein for declaration as to the validity of a development agreement dated May 24, 2006 and other consequential reliefs. A development agreement was held between the owners, i.e., the defendants and the plaintiff in respect of the suit property belonging to the defendant nos. 1 to 5 for development of the same and accordingly, a Power of Attorney was executed and registered in favour of the plaintiff by the defendants in the year 2006. While the developer is expending huge money for raising the construction as per agreement between the two parties, the dispute cropped up. Thereafter, the defendants created pressure upon the plaintiff and threatened him not to proceed on the basis of the development agreement dated May 24, 2006 and under such circumstances, the developer instituted the said suit for the reliefs already stated. Then an application for temporary injunction was filed by the plaintiff and that application was rejected on contests by the learned Trial Judge. 5. Thereafter, the plaintiff preferred an appeal being Misc. Appeal No. 205 of 2011 and in that appeal, the question came up for stay of hearing of the appeal in view of a matter pending before the Larger Bench as to whether the suit at the instances of a developer is maintainable or not in view of Section 14(3)(c) of the Specific Relief Act. Appeal No. 205 of 2011 and in that appeal, the question came up for stay of hearing of the appeal in view of a matter pending before the Larger Bench as to whether the suit at the instances of a developer is maintainable or not in view of Section 14(3)(c) of the Specific Relief Act. That application for stay filed by the appellant was rejected on contests. Being aggrieved, this application has been preferred by the plaintiff/appellant. 6. Having heard the learned Counsel for the parties and on going through the materials on record, I find that this is a dispute between the developer/petitioner and the owner of the property, i.e., the opposite parties. The question of maintainability of the suit has been submitted before this Bench without looking into the merits of the matter in dispute. Therefore, my observations shall be confined as to the maintainability of the suit. 7. If it is held that the said suit is maintainable, then the appeal shall proceed and if it is held that the suit is not maintainable then the suit as well as the misc. appeal are liable to be dismissed. So, my findings are confined as to the maintainability of the suit in view of the provisions of Section 14(3)(c) of the Specific Relief Act. For convenience, the said Section is quoted below:- Section 14(3)(c):- "Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the Court may enforce specific performance in the following cases:- "(c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land: Provided that the following conditions are fulfilled, namely:- (i) the building or other work is described in the contract in terms sufficiently precise to enable the Court to determine the exact nature of the building or work; (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed." 8. It is pertinent to mention herein that there are several disputes between the developer and the owners of the suit property in respect of specific performance of contract between the parties. 9. By the judgment and order dated October 10, 2002 in F.M.A.T. No. 3995 of 2001 in the case of Bhaskar Aditya v. Minati Majumdar & ors., reported in 2003 (2) CHN 95 : 2003 (1) ICC (Cal) 573 (a Division Bench judgment of this Hon'ble Court), it has been held that when a developer has acquired a right for specific right of performance of the contract, certainly he has an interest in the development and this fact cannot be ignored. Accordingly, the appropriate orders relating to appointment of Receiver in favour of the developer was passed therein. 10. By a subsequent judgment dated February 24, 2006 in F.M.A.T. No. 3789 of 2005 in the case of Vipin Bhimani & anr. v. Sunanda Das & anr., reported in 2006 (2) CHN 396 : 2006 (3) ICC (Cal) 315 (another Division Bench judgment), it has been held that a suit for specific performance of a development agreement at the instance of a developer is clearly hit by the provisions of Section 14(3)(c) of the Specific Relief Act. A suit for specific performance of such agreement at the instance of the owner of the building is maintainable, if possession had already been handed over to the developer. The agency to give effect to agreement for development does not create interest over the property in view of Section 54 of the Transfer of Property Act. It is also held that the concept of irrevocable Power of Attorney is unknown to jurisprudence unless the power is coupled with interest. This decision is, prima facie, contrary to the decision passed in the case of Bhaskar Aditya (supra). 11. It is also held that the concept of irrevocable Power of Attorney is unknown to jurisprudence unless the power is coupled with interest. This decision is, prima facie, contrary to the decision passed in the case of Bhaskar Aditya (supra). 11. Similarly, in another decision by a Division Bench of this Hon'ble Court (this Bench was a Member of the Division Bench) in F.M.A. No. 159 of 2009 in the case of Shamali Das v. Swadesh Ghosh & ors., reported in 2009 (4) CHN 15 , it has been held that an agency in the absence of an express contract to the contrary cannot be terminated by the principal if the agent has himself an interest in the property which is the subject matter of agency-Thus where the agent has no interest in the property which is the subject matter of the agency, i.e., in a case where Section 202 of the Contract Act is not attracted, the donor of a Power of Attorney has every right to revoke the same at any time after the execution of such power. This decision is, also prima facie, contrary to the decision of Bhaskar Aditya (supra). 12. When a similar matter came up for hearing before another learned Single Judge in C.O. No. 1358 of 2010 in Ashok Kumar Jaiswal & anr. v. Ashim Kumar Kar & anr. by the judgment and order dated February 7, 2013 the learned Single Judge has framed the following two points for consideration by a Larger Bench in view of the above conflicting decisions:- i) Whether the suit at the instance of a developer is not maintainable in view of Section 14(3)(c) of the Specific Relief Act; and ii) Whether the Power of Attorney executed by the owner in favour of the developer for effectuating the terms and conditions of the development agreement gives a mere agency to the developer without any interest, in the subject matter or not. 13. Then the Hon'ble Single Bench has referred the matter to the Hon'ble Chief Justice for constituting a Larger Bench for deciding the two points. 14. Similarly, when an another matter, i.e., C.O. No. 1431 of 2007 between the Ashim Kumar Kar & anr. v. Ashok Kumar Jaiswal & anr. 13. Then the Hon'ble Single Bench has referred the matter to the Hon'ble Chief Justice for constituting a Larger Bench for deciding the two points. 14. Similarly, when an another matter, i.e., C.O. No. 1431 of 2007 between the Ashim Kumar Kar & anr. v. Ashok Kumar Jaiswal & anr. came before the said learned Single Judge, by the order dated February 7, 2013, the learned Single Judge has also referred the matter to the Hon'ble Chief Justice for determination of the two points as raised in C.O. No. 1358 of 2010 by a Larger Bench and these two matter are now pending before the Larger Bench. Under such circumstances, Mr. Bhudeb Chatterjee, learned Advocate appearing for the petitioner of the C.O. No. 1502 of 2013, has contended that the matter need not be sent to the Larger Bench as the present case is quite different from the others as referred to by Mr. S.P. Roy Chowdhury and thus, he has contended that the present case does not come within the purview of Section 14(3)(c)(ii) of the Specific Relief Act and thus, he has submitted that the matter need not be sent to the Larger Bench. This matter could be heard by this Bench on merits. 15. Beside the above decisions, Mr. Chatterjee has also referred to the decisions of Satguru Nirman Pvt. Ltd. v. Narayan Chandra Paul, reported in 2003 (1) CHN 14 particularly paragraph No. 27 to the effect that Section 14(3)(c) is attracted when the possession has not been delivered; Partha Sarathi Ghosh v. Maa Construction & ors., reported in AIR 2008 Cal 171 particularly paragraph nos. 18 & 19 to show the fact there is an allotment of share as per agreement, the said agreement creates a right over the land in question in favour of the developer; and R.K. Apartments Pvt. Ltd. v. Smt. Aruna Bahree, reported in 1999 (1) ICC 374 particularly paragraph No. 10 whereby the right of the defendant has been denied, and thus, he has submitted that by execution of the Power of Attorney and the agreement declaring allotment, the interest in the suit property had been transferred in favour of the developer and so, the matter need not be sent to a Larger Bench. 16. On the other hand, Mr. 16. On the other hand, Mr. K.J. Tewari, learned Advocate for the opposite parties in C.O. No. 1222 of 2013 has contended that the land in question is still a vacant land and so, according to the decision of, AIR 2009 Cal 174 particularly paragraph No. 10 and F.M.A.T. No. 3995 of 2001 Bhaskar Aditya case (supra), the conditions contemplated in Section 14(3)(c) having not been complied with, the suit at the instance of the developer is not maintainable. So, no reference is at all required for sending the same to the Larger Bench. 17. Mr. S.P. Roy Chowdhury, learned Senior Advocate appearing for the opposite parties in C.O. No. 1502 of 2013 and for the petitioner in C.O. No. 1222 of 2013, has contended that the present applications have arisen out of the misc. appeals and the suits are for specific performance of contract, the question of maintainability has arisen at the interlocutory stage. 18. Referring to the decisions of Harbhajan Singh & anr. v. State of Punjab & anr., reported in (2009) 13 SCC 608 Head Note 'C' paragraph nos. 13 to 15, Kothari Industrial Corporation Ltd. v. Tamil Nadu Electricity Board & anr., reported in 2010 (14) SCC 615 ; Delhi Development Authority v. Ashok Kumar Behal & ors., reported in (2002) 7 SCC 135 and Bholanath Karmakar & ors. v. Madanmohan Karmakar & ors., reported in AIR 1988 Cal 1 particularly Head Note 'B', Fida Hussain & ors. v. Moradabad Development Authority & anr., reported in (2011) 12 SCC 615 : 2011 (4) ICC (SC) 646 on the decision of previous co-equal Benches and its binding nature on later Benches of equal strength, Mr. Roy Chowdhury has contended that since the possession still lies with the owner of the property and the developer has not yet started construction, according to Sections 202 & 203 of the Indian Contract Act, no transfer of interest has taken place. There is no doubt that a similar matter is pending for decision before the Larger Bench. The Misc. Appeal No. 205 of 2011 is still pending before the First Appellate Court. There is no doubt that a similar matter is pending for decision before the Larger Bench. The Misc. Appeal No. 205 of 2011 is still pending before the First Appellate Court. Accordingly, three courses are open before this Bench-one is by holding that an interest had been created in favour of the developer and so, the suit is maintainable, second is that the Court may pass orders simply by keeping the matter pending till the final decision of the Larger Bench or the third is that the matter may be sent to the Larger Bench for decision. 19. Having due regard to the submissions of the learned Advocates of both the sides, I am of the view that if I express my opinion over the matter, in my view, it will not be proper, as there are conflicting decisions over the same matter. The judicial decorum does not permit to do so. When inconsistent views have been expressed by Division Benches of co-equal strength, the conflict could be resolved by constituting a Larger Bench according to the decision of Delhi Development Authority v. Ashok Kumar Behal & ors., reported in (2002) 7 SCC 135 . Prima facie, two similar matters have been referred to the Larger Bench by the learned Single Bench of this Hon'ble Court by holding that contrary views are available in view of the decision of Bhaskar Aditya (supra) being contrary to the decisions of Vipin Bhimani & anr. (supra) and Shamali Das (supra). 20. Since contrary views have been expressed, in my view, the matter should be decided finally by a Larger Bench. Accordingly, keeping in conformity with the two points as framed by the learned Single Bench, the following two questions are framed for decision by a Larger Bench in the matter:- i) Whether the suit at the instance of a developer is not maintainable in view of Section 14(3)(c) of the Specific Relief Act; and ii) Whether the Power of Attorney executed by the owner in favour of the developer for effectuating the terms and conditions of the development agreement gives a bare agency to the developer without any interest, any subject matter or not. 21. This being the position, all further proceedings of the two applications as well as the Misc. 21. This being the position, all further proceedings of the two applications as well as the Misc. Appeal No. 205 of 2011 pending before the First Appellate Court shall be stayed till the decision over the matter by a Larger Bench. 22. Send the records before the Hon'ble Chief Justice to place the same before the Larger Bench constituted in pursuance of the order dated February 7, 2013 passed in C.O. No. 1353 of 2010. 23. Liberty is given to either of the parties to mention after the disposal of the matter by the Larger Bench. Urgent xerox certified copy of this order, if applied for, be supplied to the learned Advocates for the parties on their usual undertaking.