Bangalore District Court
M/S. Embassy Classic Private Limited vs Smt. S.Hemalatha W/O Mr. Prakash on 28 February, 2020
1
Com.OS.No.16677/2005
IN THE COURT OF LXXXII ADDL. CITY CIVIL & SESSIONS
JUDGE, BANGALORE CITY. (CCH.NO.83)
Dated: This the 28th day of February 2020.
PRESENT : Sri. Jagadeeswara.M.,B.Com,LL.B.,
LXXXII Addl.City Civil & Sessions Judge, Bangalore.
Com.OS No.16677/2005
Plaintiff M/s. Embassy Classic Private Limited, A private
limited company registered office at No.101/102,
1st floor, Embassy Chambers, Vittal mallya Road,
Bangalore -560 001, represented by its Director
Mr. Jikishen Virwani.
(By Sri. M.S.ShyamSundar- Advocate)
- Versus -
Defendants 1. Smt. S.Hemalatha W/o Mr. Prakash, aged
major, D2, Chartered Sannidhi Apartment, No.17,
Sannidhi Road, Basavanagudi, Bangalore - 560
004.
2. M/s Global Symphony Software(I) Pvt.Ltd.,
Symphony Technology Centre, No.13, Magrath
Road, Bangalore - 560 025.
3. Mr.S.Jagadeesh Kumar S/o late K.Subbanna,
aged about 60 years, r/a No.778, 10th main,
Indiranagar, 2nd stage, Bengaluru - 560 038.
(D.1 by Sri. G.Krishna Murthy, D.2 by Sri.Jayanth
M.Pattanshetti, D.3 by Sri.S.Rajendra - Advocates)
Date of institution of the suit : 20.6.2005
Nature of the suit (suit on Suit for recovery of money
pronote, suit for declaration
and possession suit for
injunction,etc) :
Date of the commencement 30.9.2010
of recording of the evidence
2
Com.OS.No.16677/2005
Date on which the Judgment 28.2.2020
was pronounced
Total duration Year/s Month/s Day/s
14 08 08
(JAGADEESWARA.M.)
LXXXII Addl. City Civil & Sessions Judge,
Bangalore.
JUDGMENT
This suit is filed by the plaintiff seeking judgment and decree for recovery of a sum of Rs.1,76,60,924.50 along with future interest at 18% p.a., from the first defendant.
1(a). In the first instance, plaintiff had filed this suit against defendant Nos. 1 & 2 only. Defendant No.3, who is brother of defendant No.1, has been impleaded on the ground that he has purchased the property of defendant No.1 during the pendency of this suit.
2. Brief facts of the plaintiff's case are as under:
It is contended in the plaint that the plaintiff is a private limited company engaged in the business of real estate development, construction, formation of layouts, interior decoration and other allied activities. The first defendant was one of the co-owners of the property bearing Nos.13,14,15,16 measuring 5,992.2 sq.mtrs. situated at Magrath Road, Corporation Division No.61, Bangalore -25 and the 2 nd defendant is the 3 Com.OS.No.16677/2005 tenant of the first defendant on a monthly rent of Rs.4,39,587.50, engaged in the business of software development and other allied activities. The Directors of the plaintiff company are also partners of a firm called Virwani Builders engaged in the business of construction activities. The said Virwani Builders entered into an agreement dated 29.9.1993 with the first defendant and five other co-owners i.e., defendant No.1, her parents, brothers and one sister, to jointly develop the above mentioned immovable properties bearing Nos.13,14,15,16 initially for putting up a residential building and later on the said Virwani Builders constructed a multi-storied commercial complex known as "Embassy Heights" at its own cost in terms of the said agreement dated 29.9.1993 and a supplementary agreement dated 2.2.1999 by completing in all respects and parties to the developmental agreement have been put in possession of their respective built up spaces. Unit No.202 on the 2nd floor, 1/4th share in unit No.101/103/105 located on the first floor with mezzanine and 1/4 th share in unit No.004/005/006 located on the ground floor with mezzanine having a total built up area of 26,145sq.ft., in the said "Embassy Heights" fell to the share of the first defendant.
2(a). It is further contended in the plaint that at the request of the first defendant a mezzanine floor was also put up by the plaintiff at its own cost. First defendant also engaged the services of plaintiff to carryout interior works in the office space bearing No.202, 2 nd floor, Embassy 4 Com.OS.No.16677/2005 Heights. A Letter of Understanding dated 29.9.2003 addressed by the plaintiff and endorsed by the first defendant in token of acceptance of the quoted rates. Accordingly in good faith plaintiff completed the interiors of Unit No.202 on the 2nd floor, 1/4th share in unit No.101/103/105 located on the first floor with mezzanine and 1/4 th share in unit No.004/005/006 located on the ground floor with mezzanine having a total built up area of 26,145sq.ft., of defendant No.1 in the said "Embassy Heights". It was commissioned by the first defendant to install air conditioning, work stations, cabins, carpet, light fittings, net working, installation of furniture consisting of chairs, sofa sets and also vertical blinds, installation of generator and a sprinkler the entire cost of which had to be borne by the first defendant. Plaintiff in good faith completed the entire interior work at its own cost amounting to Rs.1,59,65,328/-.
2(b). It is further contended in the plaint that the other co- owners/owners of the property had approached the plaintiff for carrying out the civil works/interiors in respect of their portion of property and the plaintiff duly carried out and completed same type of works and plaintiff raised invoices and on receipt of their respective invoices, the owners being fully satisfied with the quality of interior works carried out by the plaintiff, have duly reimbursed the said amounts. Possession of the respective office units were duly handed over to the co-owners/owners who have duly accepted and confirmed the same to their satisfaction with 5 Com.OS.No.16677/2005 no further claims of any kind against the plaintiff.
2(c). It is further contended in the plaint that the first defendant was due and liable to pay a sum of Rs.1,61,88,100/-. Hence, plaintiff addressed a letter dated 6.8.2004 along with memo of calculation calling upon the first defendant to pay a sum of Rs.1,61,88,100/-. However, inspite of repeated requests and demands made by the plaintiff, the first defendant failed to clear the outstanding dues on one or the other pretext. Plaintiff got issued a legal notice dated 18.12.2004 calling upon the first defendant to pay outstanding dues of Rs.1,61,88,100/- along with interest at 18% pa. But the first defendant failed to do so. As on 31.3.2005, the first defendant was due in a sum of Rs.1,76,60,924.50. Inspite of request,the first defendant failed to pay the outstanding dues. Since it is commercial transaction, the first defendant is liable to pay interest at the rate of 18% per annum. Accordingly plaintiff has requested to decree the suit.
3. In pursuance of the suit summons, the first defendant has appeared through her counsel and filed her written statement on 22.9.2005 requesting to dismiss the suit. Subsequently issues were framed on 3.9.2005 and suit was set for trial. Subsequently, defendant No.1 filed IA No.7 on 31.8.2006 under Order VI Rule 17 CPC requesting to permit her to carryout amendment in the written statement to include counter claim. This IA No.7 was allowed through order dated 7.2.2008 and subsequently defendant No.1 included counter claim on 13.2.2008 by amending the written 6 Com.OS.No.16677/2005 statement. In the Counter claim, defendant No.1 claimed recovery of Rs.2,10,75,754/- with future interest at 18% per annum from the plaintiff.
3(a). It is contended in the written statement that the suit filed by the plaintiff is false, frivolous, vexatious and not maintainable either on facts or in law and is liable to be dismissed in limine. The Agreement to Lease dated 6.6.2003 produced by the plaintiff is not sufficiently stamped and deserves to be impounded by this court. First defendant is one of the co- owners of the entire property under the tenancy of 2 nd defendant bearing Nos.13,14,15 & 16 situated at Magrath road, Corporation Division No.61, Bangalore -25 and she is the absolute owner of Unit No.202 on the 2 nd floor, 1/4th share in unit No.101/103/105 located on the first floor with mezzanine and 1/4th share in unit No.004/005/006 located on the ground floor with mezzanine. Plaintiff had entered into various agreements with the co-owners which culminated in the construction of the building known as "Embassy Heights". As per original plan, there was a proposal for construction of an apartment complex for residential purpose by the plaintiff in lieu of the owners transferring 49% of the undivided right, title and interest in the property to it and the plaintiff was to construct super built up area in respect of the 51% share of the property retained by them. The owners on their part promptly handed over vacant possession of the property for construction purpose to the plaintiff, but there was inordinate delay on the part of the plaintiff to secure the sanctioned plan. Even though 7 Com.OS.No.16677/2005 the responsibilities arising out of the contractual obligations have been met with by the co-owners, the plaintiff had not fulfilled its part of the contractual obligations and the project got delayed. The owners accepted the revised proposal for construction of commercial complex for the reason that they can use the commercial building for their requirement and cost effect compulsion arising out of the inordinate delay in launching the project. However, the terms of agreement dated 29.9.1993 were agreed to be continued and made applicable even to the development of commercial building.
3(b). It is further contended in the written statement that due to change of nature of project from residential to commercial, the owners were burdened with additional capital gain tax approximately amounting to Rs.2.18 crores pertaining to sale of 49% of undivided interest in the land, which the plaintiff agreed to pay by way of non-refundable deposit in addition to complying with other terms. Plaintiff also promised that the project would be completed on or before 30.6.2000 and a specific clause has been incorporated that the time is the essence of contract. The parties agreed that in the event of failure to complete the project within 30.6.2000, rental compensation of Rs.35/- per sq.ft., per month in respect of area falling to the share of owners will be paid till possession is delivered to the owners. But the plaintiff failed to complete the project within the stipulated period. In fact the plaintiff forced the owners to deposit the 8 Com.OS.No.16677/2005 original title deeds with KSFC and KSIIDC and availed loan of Rs.11.0 Crores as against the promised amount of Rs.8.4 Crores, and put the owners as the debtors of the financial institutions for its personal enrichment, causing wrongful loss to the owners. Plaintiff also demanded that the owners should arrange for additional loan of Rs.2.0 crores from financial institutions for which, they refused. The defendant and others demanded the plaintiff to complete construction and issued letters and legal notices were issued to handover their share along with compensation amount and also non-refundable deposit in lieu of the capital gains tax payable by the owners in view of conversion of purpose from residential to commercial, which the plaintiff failed to comply.
3(c). It is further contended in the written statement that plaintiff requested to let out the entire building to the 2 nd defendant and accordingly defendant and other co-owners including the plaintiff entered into a Lease Agreement dated 6.6.2003 with the 2 nd defendant agreeing to let out the entire building. As per the terms of the agreement, the Lease Deed had to be registered by the 2nd defendant, but till date the said agreement dated 6.6.2003 remains unregistered and not sufficiently stamped. Under the said lease agreement, the plaintiff undertook to get the entire furniture, fixtures and equipment to the satisfaction of 2 nd defendant at the cost of the owners and plaintiff , utilizing the security deposit and other amounts released by the 2nd defendant for the said purpose. After entering into lease 9 Com.OS.No.16677/2005 agreement with the 2nd defendant, since this defendant had not received any security deposit nor the rentals of her share as per registered partition deed entered into by the defendant with other co-owners date d8.4.2002, she was forced to write a letter to the 2nd defendant dated 30.10.2003 and the plaintiff demanding her share of rentals and security deposit and she also demanded her share of compensation amount from the plaintiff as per the joint development agreement and Supplementary agreements. But the plaintiff sent reply dated 12.11.2003 with frivolous contentions demanding a sum of Rs.32,48,250/- from her.
3(d). It is further contended in the written statement that the signature on the document dated 29.9.2003 was never made by the 1 st defendant. The forgery indulged in by the plaintiff in respect of said letter dated 29.9.2003 deserves to be deprecated by this court. At the instigation of the plaintiff, the 2nd defendant also replied through letter dated 11.11.2003 for avoiding payment of rents to her. Later on, as the 2 nd defendant was in dire need of office accommodation, it persuaded her to receive the security deposit of Rs.52,75,050/- in respect of 2 nd floor for the purpose of reimbursing the same to the plaintiff to utilize the said amount for getting the furniture and fixtures and hence, first defendant received the aforesaid amount and released Rs.50.0 Lakhs to the plaintiff to fulfill the assigned work. Accordingly plaintiff carried out furniture & fixtures work completely in the entire 'Embassy Heights" including the portion of 1 st 10 Com.OS.No.16677/2005 defendant and other co-owners, but failed to furnish details of work done by it, Architect's Certificate and also regarding payments made and is foisting unreasonable claim on this count without any supporting materials. The 2nd defendant stopped making payment of rentals after March 2004. Plaintiff instigated the 2nd defendant to withhold the rent which is legitimately payable to her with an intention to coerce her to accede to the illegal demands made by the plaintiff. She has issued demand notices to the 2nd defendant for arrears of rent and initiated separate proceedings against the 2nd defendant. The 2nd defendant has colluded with the plaintiff and avoiding payment of rentals. Plaintiff has failed and neglected to comply with the terms of the principal agreement and subsequent supplementary agreements and has failed to handover possession of the office units falling to the share of first defendant within the stipulated period. Hence, the plaintiff is liable to pay compensation for the delayed completion. Further, at the instance of plaintiff only the residential zone was converted into commercial zone for which it has agreed to pay the differential capital gain stakes which has been quantified and is agreed to be given to the owners by way of non-refundable deposit. Therefore, plaintiff is liable to pay a total sum of Rs.2,10,75,754/- towards her share. The first defendant got issued notice dated 2.9.2004 demanding amount due and damages upto 14.8.2003. Plaintiff replied the said notice, wherein it has made certain claims under various heads. As per the terms of the contract, the amount 11 Com.OS.No.16677/2005 that can be quantified to be payable by the plaintiff to the 1 st defendant towards the commitment works out to Rs.2,10,75,754/-. Even if the amount demanded by the plaintiff is taken into consideration subject to production of valid documents, the damages of Rs. 76,99,911/- is to be paid by the plaintiff to the 1st defendant.
3(e). It is further contended in the written statement that as far as pre- fabricated mezzanine floor is concerned, there is no agreement and plaintiff has put up the said floor for its benefit and the benefit has not been shared with the 1st defendant. Therefore, she is not liable to pay any amount towards putting up of mezzanine floor. Plaintiff even though put the 1 st defendant in possession, has taken a unique stand that it would give possession of the property falling to her share after the consolidated expenses under various heads are cleared by her without producing supporting documents, vouchers and invoices in this regard. As far as the BESCOM & BWSSB expenses are concerned, 1 st defendant is ready to pay the same provided the plaintiff furnishes proof for the same. She is also ready to pay the pay work contract tax in accordance with law. There is no agreement as far as service charges are concerned and hence, 1 st defendant is not liable to pay any amount of such nature. Plaintiff has not made out any grounds to justify the prayer in the plaint more specially when the very claim of the plaintiff is doubtful. The 1st defendant has preferred a complaint against the plaintiff before the Hon'ble State Consumer Disputes 12 Com.OS.No.16677/2005 Redressal Commission,Bangalore, in Complaint No.12/2005. The intention of the 2nd defendant is very clear from the letter dated 13.7.2005 addressed to the 1st defendant wherein it is indicated that they will make payment of rent every month to the plaintiff w.e.f. July 2005 onwards as per the order of this court though there is no such order.
3(f). It is further contended in the written statement that the property owned by the 1st defendant is worth more than 6.00 Crores, situated in a prime locality of Bangalore. The 2 nd defendant has failed to furnish TDS Certificate in Form 16A to the 1 st defendant. Even though serious fraud has been committed by th plaintiff, i.e., the signature of the 1 st defendant had been forged on the document dated 29.92003, it was brought to her knowledge only after initiation of proceedings against plaintiff before the Hon'ble State Commission. Even though the signature in the document dated 29.9.2003 is not admitted by the 1 st defendant, she was never averse to making the lawful and purposeful expenditure incurred by the plaintiff in respect of her share of the property provided plaintiff produces supporting documents. The claims of the plaintiff are vague and not explained property. Since the plaintiff has not accounted for the expenses incurred by it on behalf of first defendant, nothing is admitted by her. Even assuming but not admitting the claim of the plaintiff also, still a sum of Rs.76.99 lakhs is receivable by the plaintiff.
3(g). Since the 1st defendant has to receive substantial amount from 13 Com.OS.No.16677/2005 the plaintiff and since complaint No.12/2005 was dismissed with liberty to 1st defendant to approach the civil court and advise to file counter claim, she has filed counter claim contending that the plaintiff has come up with an unjustified, unexplained and uncalled for demand of Rs.1,76,60,924.50, without producing invoices/bills. Hence, question of charging interest on the disputed amount does not arise. Even at this stage, 1 st defendant is not running away from paying the lawfully payable amount to the plaintiff provided all the claims of the plaintiff are accounted for. Even assuming that the plaintiff is ready to produce the relevant documents, such an amount is to be set off against the counter claim made by her and the balance has to be paid by the plaintiff to her. The 1 st defendant puts her claim against plaintiff at Rs.2,10,75,754/-, as per the contractual commitment made by the plaintiff, which is the same amount claimed by her in the complainant No.12/2005. The details of the claim of the 1 st defendant are as under:
1/6th share amount payable towards Rs. 36,33,333.00 capital gain compensation component in respect of the share falling to the 1st defendant (Rs.2.18 Crores/6) 1/6th share in compensation for Rs.10,83,333.00 delay in construction for 13 months (from 31/5/1999 to 30/6/2000 at the rate of Rs.5,00,000/- per month i.e., Rs.65,00,000.00/6 Rental compensation at Rs.35/- per Rs. 99,00,275.00 sq.ft., for delay in completion - 37 14 Com.OS.No.16677/2005 months from 1/7/2000 to 31/7/2003.
For II Floor (7645 x 35 x 37) Rs. 64,58,813.00
For Ground/First & Mezzanine
Floor
(4987.5 x 35 x 37)
TOTAL Rs.2,10,75,754.00
The plaintiff failed to pay the said sum of Rs.2,10,75,754/- to the 1 st defendant inspite of repeated requests and demands. Since this is a commercial transaction, the plaintiff is liable to pay interest at the rate of 18% per annum. Whereas the plaintiff has filed this suit demanding payment of Rs.1,76,60,924.50, which is undetermined, unaccounted, unspecified and unjustified amount. Accordingly, 1st defendant has requested to dismiss the suit and allow the counter claim.
4. Plaintiff has filed rejoinder to the amended written statement of the 1st defendant contending that the first defendant has filed amended written statement in a feeble attempt to mislead this court. Plaintiff has filed a simple suit for recovery of money against the first defendant who for reasons best known to her, has been evading payment on one pretext or the other. Defendant No.1 has callously referred to the JDA dated 6.6.2003 after being a signatory and a direct beneficiary under the said document and after the commercial building situated at Nos.13,14,15,16 has been accomplished reality in terms of the said agreement and bears the name 'Embassy Heights", in which first defendant's share consists of Unit No.202 on the 2nd floor, 1/4th share in unit No.101/103/105 located on the 15 Com.OS.No.16677/2005 first floor with mezzanine and 1/4th share in unit No.004/005/006 located on the ground floor with mezzanine having a total built up area of 26,145sq.ft. Plaintiff reiterated the averments made in the plaint and further contended that in terms of the agreements dated 29.9.1993 and 2.2.1999, the property was developed by Virwani Builders and a commercial complex known as 'Embassy Heights" has been constructed, complete in all respects on the aforesaid immovable property and the parties to the developmental agreement have been put in possession of their respective shares. The first defendant's share, possession of the built up space has also been handed over to the 1st defendant. The plaintiff has to receive a sum of Rs.1,76,60,924.50 from the first defendant towards the interior works carried out in her share of the built up space. In fact, the first defendant had issued a cheque for Rs.50 lakhs vide cheque bearing No.481162 dated 16.12.2003 drawn on Canara Bank, pursuant to letter of understanding dated 29.9.2003 between the plaintiff and the first defendant. The said letter has been countersigned by the 1 st defendant as token of her acceptance of the rates. Therefore, fallacious counter claim set up by the 1st defendant is only to defeat the legitimate claim of the plaintiff. The first defendant has been enjoying the benefits of high rent being tendered by the 2nd defendant as the interiors have enhanced the value of the built up space allotted to her share. The invoice raised by the plaintiff on the 1st defendant has already been produced before the court.16
Com.OS.No.16677/2005 The first defendant is not only liable to pay the principal but also interest to the plaintiff. The contention of the first defendant that "she is not running away from her responsibility of paying the lawfully payable amount to the plaintiff provided all the claims of the plaintiff against the defendant are duly and satisfactorily accounted for" is a clear admission of liability on the part of the first defendant.
4(a). It is further contended in the rejoinder that as regards payment of capital gains, the plaintiff undertook to tender the levy in terms of para-4 of the supplementary agreement dated 28.2.2003. The capital gains tax has been reimbursed by the plaintiff to the other co-owners of the property. As regard to the compensation for delay in construction, a sum of Rs.50 Lakhs was paid by the plaintiff to the co-sharers namely K.Subbanna, S.Jagadeesh Kumar, S. Mohan Kumar, S. Madhusoodan, the defendant S.Hemalatha & S.Kanchana. After receiving the said sum of Rs.50 Lakhs, the delay stood compounded, this amount included the rental compensation also. Therefore, the first defendant is precluded from making a fictitious claim. The first defendant is liable for criminal prosecution for cheating and misappropriation etc. There is no cause of action for the first defendant to pursue parallel remedies. The plaintiff denied that it is liable to pay a sum of Rs.2,10,75,754/- to the first defendant or any part thereof much less the interest. Accordingly, the plaintiff has requested to dismiss the counter claim of the first defendant and to decree the suit.
17Com.OS.No.16677/2005
5. From the above pleadings of the parties, the following Issues have been framed :
1. Whether the plaintiff proves that the cost of interior work carried out was Rs.1,59,65,328/- ?
2. Whether the plaintiff proves that the 1st defendant is due to pay Rs.1,76,60,924.50 towards the work carried out ?
3. Whether the 1st defendant proves that letter dated 29.9.2003 is concocted ?
4. Whether the 1st defendant proves that she is entitled for Rs.36,33,333/- towards capital gain being 1/6th share ?
5. Whether the 1st defendant proves that she is entitled for Rs.10,83,333/- towards compensation on account of delay in executing the work ?
6. Whether the 1st defendant proves that she is entitled for compensation of Rs.99,00,275/- towards loss of rent for 2nd floor ?
7. Whether the 1st defendant proves that she is entitled for compensation of Rs.64,58,830/- towards rent of ground, first ad mezzanine floor ?
8. What decree or order ?
6. In proof of suit claim, Director of the plaintiff company got examined himself as PW.1 and got examined two witnesses as Pws.2 & 3 and got marked documents as Ex.P.1 to Ex.P.95. On the other 18 Com.OS.No.16677/2005 hand, first defendant got examined herself as DW.1 and examined one witness as DW.2 and got marked the documents as Exs.D.1 to D.25.
7. Heard the arguments of both sides.
8. My findings on the above issues are as follows: -
Issue Nos.1 & 2 : Affirmative Issue No.3 : Materials on record proved agreement between the parties relating to interior works and its costs.
Issue Nos.4 to 7 : Negative
Issue No.8 : As per final order
for the following:
REAS O NS
9. Issue Nos.1 to 3 : Since these issues are interrelated to each other and finding on any one of these issues will have bearing effect on other issues and these issues require consideration of common facts and evidence, I have taken up these together for discussion.
10. It is argument of learned advocate for plaintiff and it is also contended in the written arguments that defendant No.1, her parents, brothers and her sister were owners of immovable property Nos.13 to 16 of Magrath Road, Corporation Division No.61 in Bengaluru. They had entered into Joint Development Agreement dated 29.09.1993 at Ex.P.68 with Virwani Builders for construction of residential building.
Subsequently said Builders constructed a multi-storied commercial complex at its own cost in the said property in view of supplementary 19 Com.OS.No.16677/2005 agreement dated 02.02.1999. This commercial complex known as "Embassy Heights" has been constructed complete in all respect and the parties to the developmental agreement have been put in possession of their respective built up spaces.
10(a). Further it is also submission of learned advocate for plaintiff that it is admitted fact that plaintiff, defendant No.1, her parents, her brothers and her sister, being owners of multi-storied commercial complex known as "Embassy Heights" had entered into agreement to lease dated 06.06.2003 at Ex.P.94 with defendant No.2 relating to entire building. In said Ex.P.94 plaintiff, defendant No.1, her parents, her brothers and her sister, being lessors had agreed with the defendant No.2 being lessee, to carry out interior decoration works such as furniture, fixture and equipment (FF&E), as per specification of Annexure-II, at the cost of Rs.1100/- per sq.ft. The lessee had the right to approve the design and the architect relating to the interior work.
10(b). Further it is also argument of learned advocate for plaintiff that defendant No.1 had given power of attorney dated 23.12.2003 at Ex.P.91 to her brother who is defendant No.3. Defendant No.1, her parents, her brothers and her sister entered into an agreement dated 24.12.2003 at Ex.P.70 with the plaintiff and entrusted the interior decorated works (FF&E) to be carried out by the plaintiff to the entire building at the cost of Rs.1285 per sq.ft. i.e., Rs.1100/- towards air conditioning, workstation 20 Com.OS.No.16677/2005 cabins, carpets, light fittings, net working, chairs, sofa sets and vertical blinds and Rs.185/- per sq.ft., towards generator and sprinkler. In this agreement at Ex.P..70, defendant No.1 was represented by her power of attorney holder i.e., defendant No.3 by virtue of power of attorney at Ex.P.91given by her to defendant No.3.
10(c). Further it is also submission of learned advocate for plaintiff that it is undisputed fact that in pursuance of agreement at Ex.P.70 and also agreement to lease at Ex.P.94, plaintiff had carried out all interior decoration works to all the portions of buildings owned by the defendant No.1, her parents, her brothers and her sister. So for parents, brothers and sister of defendant No.1 are concerned they made payments at the rate of Rs.1285/- per sq.ft., to the plaintiff relating to interior works done to their portions of the building as per the receipts at Ex.P.8 to P.35 and this fact is admitted by DW.1 in her cross examination.
10(d). Further it is also argument of learned advocate for plaintiff that parents, her brothers and sister of defendant No.1 had executed letters at Exs.P.3 to P.7 with the plaintiff relating to cost of interior works. In the same way, defendant No.1 had also executed such letters at Ex.P.95. But defendant No.1 has initiated criminal prosecution alleging that Ex.P.95 is forged record. But criminal proceedings with regard Ex.P.95 has no role to play since defendant No.1 has not examined the expert who gave FSL report to the effect that signature on Ex.P.95 is imitated forgery.
21Com.OS.No.16677/2005 Comparison of Ex.P.3 to P.7 and Ex.P. 95 is sufficient to hold that all the co-owners had executed letters relating to cost of interior works and apart from that it is admitted by the DW.1 that there was agreement between her and the plaintiff relating to interior decoration works to be carried out to her building and she paid part amount of Rs.50,00,000/- to the plaintiff for said works and plaintiff has carried out all the interior works and as such defendant No.2 occupied entire building of "Embassy Heights" as tenant and defendant No.1 was getting more that Rs. 4 lakhs as monthly rent from defendant No.2. It is undisputed fact that accounts statement maintained by the plaintiff at Ex.P.53 to P.59 relate to the interior decoration works carried out to the building owned by the defendant No.1 and these account statements are certified by the chartered accountant who was also chartered accountant to the defendant No.1 and her family members. Accordingly, it is submission of learned advocate for plaintiff that plaintiff has proved these Issue Nos.1 to 3.
11. On the other hand it is argument of learned advocate for defendant No.1 and it is also contended in the written arguments that previously defendant No.1, her parents, her brothers and her sister were co-owners of the property. But after partition effected between them, they are independent and absolute owners of their share in the "Embassy Heights" is concerned. Plaintiff mainly relied on Ex.P.94 & P.95 to show that defendant No.1 is liable to suit claim. Among them Ex.P.94 is 22 Com.OS.No.16677/2005 agreement to lease entered into by the owners of "Embassy Height", including plaintiff being the developer who has certain share, with defendant No.2 and inter-alia the owners had undertaken that they would provide interiors to the building as shown in Annexure-II of agreement to lease at Ex.P. 94. However in this Ex.P.94 both plaintiff and defendant No.1 are shown as lessors and they had to provide interiors as specified in Annexure-II. There is no agreement in Ex.P.94 between the plaintiff and defendant No.1 in this Ex.P.1 to carryout interiors by the plaintiff to the building owned by the defendant No.1.
11(a). Further it is argument of learned advocate for defendant No.1 that it is say of plaintiff that letter of understanding at Ex.P.95 was entered into between it and defendant No.1 relating to cost of interior works in pursuance of request made by the defendant No.1 to it to carry out interiors to her portion of the building in "Embassy Heights". But it is stand of defendant No.1 that she never signed to Ex.P.95 and it is forged record. Defendant No.1 has lodged prosecution relating to Ex.P.95 and Ulsoor Police filed charge-sheet and other records as per Ex.D.21 to D.23 with FSL report and opined that signature on Ex.P.95 is forged and it is not of defendant No.1. In this suit plaintiff has not taken any steps to show why FSL report should not be accepted. No doubt defendant No.1 has not examined FSL expert in this suit. But this Court, in the light of FSL report at Ex.D.23, has to independently came to opinion as to reliability and 23 Com.OS.No.16677/2005 credibility of Ex.P.95.
11(b). Further it is also submission of learned advocate for defendant No.1 that as per agreement to lease at Ex.P.94 the cost of interiors i.e., Furniture, Fixture & Equipment (FF&E) is shown as would be atleast expected to be Rs.1100/- per sq.ft., but this Ex.P.94 does not qualify itself to be an agreement between the plaintiff and defendant No.1 in so far interior works are concerned. Thus, under Ex.P.94 defendant No.1 did not authorise the plaintiff to carryout interior works to her portion of "Embassy Heights" at the agreed rate. No doubt parents, brothers and sister of defendant No.1 authorised on same day on 10.06.2003 the plaintiff to carry out interior works to their portion of "Embassy Heights" as per Ex.P.3 to P.7 and they agreed to the costs as per Ex.P.3 to P.7 and they gave amounts to the plaintiff as per Ex.P.8 to 37 relating to the interior works done. But defendant No.1 was absent in these transactions at Ex.P.3 to 37.
11(c). Further it is also argument of learned advocate for defendant No.1 that defendant No.1 did not authorized the plaintiff to carry out interior works to her share of "Embassy Heights" and she did not agree for the cost of interiors. Therefore, plaintiff thought this is a problem to its relationship with defendant No.2 since plaintiff inducted the defendant No.2 as tenant to entire building of "Embassy Heights". Hence without any agreement or authorization of the defendant No.1, plaintiff carried out interior works to the share of the defendant No.1 in the building to make 24 Com.OS.No.16677/2005 illegal gain by creating forged record at Ex.P.95. Defendant No.1 has not disputed the fact that plaintiff has carried out the interior works in her share of the building. After coming to the plaintiff was carrying out interior works in the share of building of defendant No.1, defendant No.1 had paid advance of Rs.50 lakhs towards cost of interior works and this was subject to the production of proper accounts for finalization of the final bill, if any, to be produced by the plaintiff. The only dispute is cost of interior works carried out by the plaintiff. Ex.P.59 produced by the plaintiff relating to bill of interior works carried out is self served record of plaintiff and it is disputed record since plaintiff has shown cost of interior works to entire area of 12632 sq.ft., of defendant No.1 without producing any bills, receipts and certificates.
11(d). Further it is also argument of learned advocate for defendant No.1 that there was no contract of offer and acceptance between plaintiff and defendant No.1, as per the provisions of Contract Act, relating to interior works to be carried out in the share of building of defendant No.1 in "Embassy Heights". Plaintiff has not produced bills or receipts or certificates to show amounts incurred for interior works. Plaintiff has not examined independent expert to show amounts incurred. It is say of the plaintiff that defendant No.3 being power of attorney holder of defendant No.1, had executed agreement at Ex.P.70 dated 24.12.2003 for interior works and its cost. No doubt defendant No.1 has given power of attorney 25 Com.OS.No.16677/2005 at Ex.P.91 on 23.12.2003 to defendant No.3 to negotiate sale of her property and no authorization was given to defendant No.3 to enter into agreement at Ex.P.70 for interior works. Accordingly, it is submission of learned advocate for defendant No.1 that plaintiff has failed to prove Issue No.1 to 3.
12. ADMITTED FACTS :
Admitted facts between the parties are that defendant No.1, her parents, her brothers and her sister were co-owners of the property bearing Nos.13 to 16 situated at Magrath Road, Corporation Division No.6, Bengaluru. The directors of the plaintiff company are also partners of firm called as Virwani Builders. The said Virwani Builders entered into Joint Development Agreement dated 29-9-1993 at Ex.P.68 and then supplementary agreement dated 2-2-1999 initially for construction of residential building in the above noted property to be shared at 51% to the owners and 49% to the builder. Subsequently due to supplemental agreement entered into between the parties, a multi-storied commercial complex of eleven floors known as "Embassy Heights" has been constructed by the builder and possession of owners area was delivered by the builder. Subsequently, defendant No.2 was inducted as tenant in the entire multi-storied commercial complex "Embassy Heights". The owners of the entire building i.e., plaintiff, defendant No.1, her parents, her brother and her sister had entered into agreement to lease dated 6-6-2003 26 Com.OS.No.16677/2005 at Ex.P.94 with the defendant No.2 with certain terms and conditions relating to lease and for carrying out of interior decoration works such as furniture, fixtures and equipment (FF&E) to the entire building. Owners of the property are termed as lessors and defendant No.2 is termed as lessee in this Ex.P.94. It is also admitted fact between the parties that previously defendant No.1 had executed registered GPA dated 2-6-1977 at Ex.P.92 in favor of her father Sri Subbanna relating to development and other works of said property. Defendant No.1 had also executed Power of attorney dated 25-10-2003 at Ex.P.90 in favor of her father Sri. Subbanna to do certain acts as shown in it. This Power of attorney dated 25-03-2003 was executed by the defendant No.1, her mother, brothers and sister in favor of Sri Subbanna. Defendant No.3 in this suit is Sri. S.Jagadeesh Kumar and he is brother of defendant No.1. Defendant No.1, her parents, brothers and sister had executed Power of attorney dated 23-12-2003 in favor of defendant No.3 to do certain acts shown in it.
12(a). Defendant No.1, her parents, brothers and sister entered into agreement dated 24-12-2003 at Ex.P.70 with the plaintiff relating to the interior decoration works to be carried out by the plaintiff to the entire building of their share as per terms of agreement to lease at Ex.P.94 and also relating to costs of interior works. In this agreement at Ex.P.70, defendant No.1 was represented by her power of attorney holder i.e., defendant No.3 by virtue of power of attorney dated 23-12-2003 at 27 Com.OS.No.16677/2005 Ex.P.91. Parents, brothers and sister of defendant No.1 had entered into separate agreements also on 10-06-2003 at Exs.P.3 to 7 relating to costs of interior works. The contention of plaintiff that defendant No.1 had also entered into separate letter at Ex.P.95 relating to cost of interior works is disputed by the defendant No.1. However, it is admitted fact that plaintiff had carried out all the interior decoration works as per the specifications shown in Annexure-II of agreement to lease at Ex.P.94, to the entire property of "Embassy Heights" including the area owned by the defendant No.1. Parents, brothers and sister of defendant No.1 made payments as per receipts at Exs.P.8 to 35 to the plaintiff relating to the interior works carried out to their share of building at the agreed costs as agreed in agreement to lease at Ex.P.94, agreement dated 24-12-2003 at Ex.P.70 and letter dated Exs.P.3 to 7. Even defendant No.1 also made advance payment of Rs.50 lakhs to the plaintiff towards interior works that were to be carried out to her share of building in "Embassy Heights" by the plaintiff. All these facts are admitted between the parties.
13. DISPUTE RAISED BY THE DEFENDANT NO.1:
Dispute raised by the defendant No.1 is that there was no agreement entered into between her and the plaintiff entrusting the interior works to be carried out by the plaintiff in her share of "Embassy Heights" and also relating to costs of interior works. She never executed Ex.P.95 relating to interior works and its costs. Though she executed Power of attorney dated 28 Com.OS.No.16677/2005 23-12-2003 at Ex.P.91 along with her parents, brother and sister in favor of defendant No.3, but it was not for the purpose of transacting with the plaintiff to carry out interior works and its costs. Thus, though defendant No.1 has admitted that plaintiff had carried out interior works to entire building of "Embassy Heights", including the area owned by her and she had paid part/advance amount of Rs.50 lakhs, but it is her say that there was no agreement or contract between her and defendant No.1 in that regard.
14. At this itself it is important to note that it is admitted fact between the parties that as per the development agreement dated 29-9-1993 at Ex.P.68 and supplemental agreement entered into between the plaintiff and co-owners i.e., defendant No.1, her parents, her brothers and her sister, plaintiff had constructed multi-storied commercial complex of eleven floors known as "Embassy Heights" in the property bearing Nos. 13 to 16 of Magrath Road, Bengaluru and allotment of share in the built up area and also car parking etc., was done as per terms of agreement between developer and co-owners of the property and accordingly developer delivered possession of owners share. Subsequently, defendant No.2 was inducted as tenant in the entire building of "Embassy Heights". The owners of the entire building i.e., plaintiff, defendant No.1, her parents, her brothers and her sister entered into agreement to lease dated 6-6-2003 at Ex.P.94 with defendant No.2 with certain terms and conditions relating to 29 Com.OS.No.16677/2005 lease and carrying out of interior decoration works such as furnitures, fixtures and equipment (FF&E) to entire building as per specifications shown in Annexure-II. In the said Ex.P.94 the lessors had agreed to provide interior works i.e., FF&E as under :
"The FF&E work to be provided by the Lessors shall be of the best quality and of the highest standard equivalent to the best office space in line with the best Multinational companies in India and in accordance with the indicative specifications above and to the full satisfaction of the Lessee.
The lessors' investment in FF&E is expected to be at least Rs.1100 per sq.ft., being the direct bonafide cost. The architects, and all other vendors required for the construction of the interiors shall be approved by the Lessee. Al construction work and FF&E work being implemented by the Lessors shall be monitored by the Lessee".
Thus, lessors had agreed to provide FF&E of the best of quality and highest standard equivalent to the best office space in line with the Multinational companies in India and to the full satisfaction of the lessee. The lessors investment in FF&E is expected to be at least R.1100/- per sq.ft. The lessee i.e., defendant No.2 being lessee had the right to approve the design and the architect relating to the interior works.
15. Ex.P.91 is original Power of attorney executed on 23-12-2003 by the defendant No.1, her parents, her sister and her another brother in favor of her another brother Sri Jagadeesha Kumar, who is defendant No.3 in this suit. The authority given by them under Ex.P.91 in favor of defendant No.3 was to represent them in respect of their share in the property before 30 Com.OS.No.16677/2005 statutory authorities, to enter into agreement/s to sell and other agreement/s on their behalf, to execute sale and other deeds, to receive sale consideration and to get necessary permissions from the concerned authority etc. Ex.P.70 is the agreement dated 24-12-2003 entered into between the co-owners i.e., defendant No.1, her brothers, her parents and her sister with the plaintiff relating to the interior works i.e., FF&E to be carried out by the plaintiff to the entire building "Embassy Heights" as per specification of agreement to lease dated 6-6-2003 entered with the defendant No.2 and the costs of FF&E was fixed to Rs.1100/- per sq.ft., and Rs.185 per sq.ft., towards installation of generator and sprinklers, i.e., in all Rs.1285 per sq.ft. In this agreement at Ex.P.70, defendant No.1 was represented by her Power of attorney holder i.e., defendant No.3 by virtue of Power of attorney dated 23-12-2003 at Ex.P.91.
16. It is argument of learned advocate for defendant No.1 that the authority given by the defendant No.1 in favor of defendant No.3 in the Power of attorney dated 23-12-2003 at Ex.P.91 was for different purpose and not for entering into agreement at Ex.P.70 with the plaintiff relating to interior works to be carried out and its costs and as per the judgment of Hon'ble Apex Court, Power of attorney is to be interpreted in the light of the specific powers generated by the donor and all the general powers if any granted in the same document then the same needs to be interpreted as powers subordinate to the specific powers already generated. Power to sale 31 Com.OS.No.16677/2005 and appear before statutory authorities granted to the defendant No.3 under Ex.P.91 by the defendant No.1 has nothing to do with illegal agreement at Ex.P.70 entered into by the defendant No.3 with the plaintiff prejudicial to the interest of defendant No.1 and hence Ex.P.70 is illegal and cannot be relied upon. In support of this argument learned advocate for defendant No.1 has placed citations of Hon'ble Apex Court in AIR 2005 SC 3401 (State of Rajasthan & Ors. V/s Basant Nahuta) and AIR 2012 SC 206 (Suraj Lamp & Industries (P) Ltd., v/s State of Haryana & Ors.)
17. I have carefully gone through the proposition of law of above noted judgment of Hon'ble Apex Court cited by the learned advocate for defendant No.1 and also the materials on records. There is no acceptable substance in the above noted submission of learned advocate for defendant No.1 for the reasons that authority given by the defendant No.1 to the defendant No.3 by executing Power of attorney at Ex.P.91 was under the circumstances subsequent to entering into agreement to lease at Ex.P.94 dated 6-6-2003 under which lessors had agreed to carryout interior works i.e., FF&E as per specifications shown in Annexure-II and at the costs shown in it. The authority given by the defendant No.1 to the defendant No.3 under Power of attorney at Ex.P.91 was not only to appear before concerned authorities but also to execute sale agreement or other agreements or to execute sale deed, conveyance or other deed etc., The wording "other agreement/s" used in Ex.P.1 connotes wide meaning to include agreement at Ex.P.70.
32Com.OS.No.16677/2005
18. No doubt, defendant No.1 has produced copy of notice dated 10.5.2004 at Ex.D.10 in support of her contention that on 8.5.2004 she had revoked the said power of attorney at Ex.P.91 given by her to the defendant No.3. This type of revocation of power of attorney granted by the defendant No.1 in favor of defendant No.3 is with prospective effect only and as such on the date of agreement at Ex.P.70, there was no prohibition for the power of attorney holder to act on behalf of defendant No.1. Therefore, revocation of power of attorney through Ex.D.10 is of no consequence so far as testing the validity of the agreement at Ex.P.70 is concerned.
19. There are several materials on record to show that plaintiff had carried out interior works to the entire building of "Embassy Heights"
including the area owned by the defendant No.1 and this was done to the knowledge of defendant No.1 who also made part payment of Rs.50 Lakhs to the plaintiff towards cost of interior works. It is relevant to note that in para No.8 of chief examination affidavit of DW.1 it is admitted as under:
"8. I submit that the plaintiff has approached me and other co- owners and requested to let out the entire building to M/s Global Symphony Software (India) Pvt. Ltd., the Second defendant herein. Under the circumstances myself and other co-owners including the plaintiff entered into Lease Agreement with the 2 nd defendant herein, agreeing to let out the entire building. The Agreement was entered on 06-06-2003. As per the terms and conditions of the said agreement the regular lease deed has to be got registered by the 2nd defendant, who is lessee and the same has not been done".33
Com.OS.No.16677/2005 Thus, it is admitted fact that all the owners of the entire building "Embassy Heights" i.e., plaintiff, defendant No.1, her parents, her brothers and her sister agreed to let out the entire building to the defendant No.2. Accordingly they had entered into Agreement to Lease dated 6.6.2003 at Ex.P.94 with certain terms and conditions. Further, in para No.9 of the chief examination affidavit, it is say of DW.1 as under:
"9. Under the said lease agreement , the plaintiff undertook to get the entire furniture, fixtures and equipment be furnished to the satisfaction of M/s.Symphony Services, at the cost of the owners and plaintiff, utilizing the Security Deposit and other amounts released by the said M/s. Symphony Services for this purpose. Even in this regard also I was not involved by the plaintiff and many crucial things have taken place behind my back. The furniture, fixtures and equipment were furnished to the entire premises including the portion which has fallen to my share as aforesaid".
Thus, it is admitted by DW.1 in para No.9 of chief examination affidavit that under lease agreement, the plaintiff undertook to get the entire furniture, fixtures and equipment be furnished to the satisfaction of the lessee, at the cost of owners. However, it is further say of DW.1 in same para No.9 of the chief examination affidavit that plaintiff undertook to carryout such interior works by utilising the security deposit and other amounts released by the lessee. This say of DW.1 is not substantiated through acceptable and reliable materials. There is no proper pleading and proof of defendant No.1 relating to this say that plaintiff undertook to 34 Com.OS.No.16677/2005 carryout interior works in the entire building by utilising the security deposit and other amounts released by the lessee. In the cross-examination at page No.19 it is evidence of DW.1 as "Defendant No.2 was in the occupation of the entire building of 'Embassy Heights' on lease for about 6 to 7 years. Already defendant No.2 vacated the said building and at that time myself and other co-owners of the property had returned back the security deposit to the defendant No.2". This evidence of DW.1 shows security deposit released by the defendant No.2 was not used for carrying out the interior works. In same para No.9 of chief examination affidavit, it is admitted by DW.1 that the furniture, fixtures and equipment were furnished to the entire premises including the portion which has fallen to her share.
20. It is also relevant to note that in para No.26 of the written arguments of learned advocate for defendant No.1 it is contended as under:
"26. However, the defendant No.1 is not disputing the fact that the plaintiff has carried out the interior works in her share of the building. The only dispute is with respect to the cost of interiors. However, it is true that since the defendant No.1 was aware that the plaintiff was simultaneously carrying out the interior works in her share also, the defendant No.1 had advanced Rs.50 lakhs to the plaintiff as earnest money for carrying out the interior work subject to the production of proper accounts for the finalization of the final bill if any to be produced by the plaintiff".35
Com.OS.No.16677/2005 Thus, in para no.26 of the written arguments of learned advocate for defendant No.1 it is submitted that defendant No.1 is not disputing the interior works carried out in her share of the building by the plaintiff. Since defendant No.1 was aware of the interior works that were carried out by the plaintiff in the share of her building, she had advanced Rs.50 Lakhs to the plaintiff as earnest money for carrying out the interior works. However, it is further contended by the learned advocate that this R.50 Lakhs was advanced by the defendant No.1 to the plaintiff subject to the production of proper accounts for the finalization of the final bill. Thus, it is undisputed fact that plaintiff undertook to carryout interior works, as per the specification shown in Annexure-II of the Agreement to Lease at Ex.P.94 to the entire building of "Embassy Heights" including the area owned by the defendant No.1 and this was within the knowledge of defendant No.1 and due to this reason, defendant No.1 had advanced Rs.50 lakhs to the plaintiff as earnest money.
21. It is also relevant to note that there is no much dispute to the fact that parents, brothers and sister of defendant No.1 had issued letters dated 10.6.2003 to the plaintiff as per Exs.P.3 to P.7 relating to the cost of interior works to be carried out by the plaintiff to the respective area owned by them in the building known as "Embassy Heights". In these letters, the agreed costs of interior works is Rs.1285/- in all per sq.ft., i.e., Rs.1,100/- per sq.ft. For interiors (air-conditioning, work stations, cabins, carpet, light 36 Com.OS.No.16677/2005 fittings, networking, chairs, sofa sets and ventilation planes) and Rs. 185/- p.sq.ft., for generator and sprinkler. It is also undisputed fact that parents, brothers and sister of defendant No.1 made payments at the agreed rates relating to costs of interior works carried out by the plaintiff as per the receipts at Exs.P.8 to P.35. In the first instance this suit was filed against defendant Nos.1 & 2 only. Subsequently, one Sri. Jagadeesh Kumar, who is admittedly brother of defendant No.1, has been arrayed as defendant No.3 on the ground that he has purchased share of defendant No.1 in the building "Embassy Heights" during the pendency of the suit. This defendant No.3, prior to his impleadment in the suit, gave his oral evidence as PW.2 supporting the claim of the plaintiff. Similarly, sister of defendant No.1 also gave her oral evidence as PW.3 supporting claim of the plaintiff. In the cross-examination of DW.2, who is husband of defendant No.1, it has come out that PW.2 was an Officer of SBI and PW.3 is working as doctor in ESI Hospital. These PWs.2&3, who are brother and sister respectively of defendant No.1, have supported the testimony of PW.1 that there was agreement between the plaintiff and co-owners of the building including the defendant No.1 to carryout interior works by the plaintiff in the entire building "Embassy Heights" as per the specifications shown in Annexure-II of Agreement to Lease at Ex.P.94 and it was agreed to pay costs at Rs.1285/- per sq.ft., for interior works.
22. It is clear cut oral evidence of PWs.1 to 3 that plaintiffs had 37 Com.OS.No.16677/2005 carried out similar interior works to the entire building including the area owned by the defendant No.1. It is submission of learned advocate for defendant No.1 that though plaintiff has carried out interior works in the entire building "Embassy Heights" including the area owned by defendant No.1, but there was no agreement between plaintiff and defendant No.1 in that regard. This submission of learned advocate for plaintiff has no substantial force for the reasons that in the Cross examination at page No.9, it is evidence of DW.1 as "myself and plaintiff had entered into separate agreement for interior decoration works of my part of building". Thus, it is clear cut, categorical and unequivocal admission of DW.1 that there was separate agreement entered into between her and plaintiff for interior decoration works of her part of building. Admittedly, defendant No.1 paid Rs.50 lakhs as an advance to the plaintiff for the interior works of her share of building. Admittedly defendant No.1 paid Rs.50 lakhs as an advance to the plaintiff for the interior works of her share of building. This admission of DW.1 is to be considered along with the agreement at Ex.P.70 in which defendant No.1 was represented by her power of attorney holder who is defendant No.3. This defendant No.3 gave his oral evidence as PW.2 supporting the say of plaintiff.
23. Further, in the Cross examination at page Nos.10 & 11, it is evidence of DW.1 as under:
"It is true that agreement to lease at Ex.P.94 was entered into on 6.6.2003. It is true that in Ex.P.94 myself and my family 38 Com.OS.No.16677/2005 members had agreed that in minimum cost of interior decorations such as furniture, fixtures and equipment would be Rs.1,100/- per sq.ft. Of the premises. Defendant No.2 is lessee of Ex.P.94. I admit contents of Ex.P.94. It is not mentioned in Ex.P.94 to take approval of the land owners to carryout interior decorations".
Thus, agreement to lease at Ex.P.94 and its terms and conditions are admitted fact between the parties. As per the terms and conditions of Ex.P.94, lessors had to carryout interior works. As discussed supra, it is admitted fact that plaintiff had carried out interior works to the entire building of "Embassy Heights" including the area owned by the defendant No.1 and this was within the knowledge of defendant No.1. Parents, brothers and sister of defendant No.1 made payment at the rate of Rs.1,285/- per sq.ft., to the plaintiff relating to the interior works carried out with regard to the respective area owned by them. Even after knowing the interior works were being carried out by the plaintiff in the area owned by defendant No.1, defendant No.1 made advance payment of Rs.50 lakhs. In the cross examination at page No.11, it is evidence of DW.1 as under:
"It is true that plaintiff had carried out similar interior decorations to the respective portions allotted to my father, my brothers, my younger sister and my mother and after such interior decorations were carried out to their portions of the building, they also leased their respective portions of the same building of 11 floors to the defendant No.2."
Further, in the Cross examination at page No.18 it is evidence of DW.1 as under:
39Com.OS.No.16677/2005 "Defendant No.2 never raised any objection relating to the building or to the interior decoration works of the building. Plaintiff had carried out uniform and similar interior decoration works to the entire building including my portion of the building. After completion of interior decoration works carried out by the plaintiff, I did not do anything by visiting the property. I did not send architect or any other person to check and verify the interior decoration works carried out by the plaintiff in my portion of the building."
Further, in the Cross examination at page No.21, the question put to DW.1 and the answer given by DW.1 to the question is as under:
"Qn: You are liable to pay Rs.1,100/- per sq.ft., towards interior decoration works carried out by the plaintiff and Rs.185/- per sq.ft., towards sprinkler and generator relating to your portion of the building, what do you say?
Ans : plaintiff had stated approximate cost of Rs.1,100/- per sq.ft., towards interior decoration works by the plaintiff and Rs.185/- per sq.ft., towards sprinklers and generator relating to my portion of the building, but plaintiff demanded to pay Rs.1.80 Crores in that regard but we have already paid Rs.50 lakhs to the plaintiff."
As noted above, it is admission of DW.1 that plaintiff had carried out similar interior decorations to the respective portions of the building of all the persons i.e., to the portions of defendant No.1, her parents, her brothers and sister and accordingly entire multi-storied commercial complex of "Embassy Heights" consisting of 11 floors was leased out to the defendant No.2. Defendant No.2 never raised any objection relating to the building or to the interior decoration works of the building carried out by the 40 Com.OS.No.16677/2005 plaintiff. Even defendant No.1 did not raise any objection relating to the interior works carried out by the plaintiff in the area of her share. Specific question was put in the Cross examination of DW.1, which is noted supra, stating that DW.1 is liable to pay Rs.1,100/- per sq.ft. towards interior decoration works and Rs.185/- per sq.ft., towards sprinkler and generator to the plaintiff relating to the portion of the building of defendant No.1 is concerned. DW.1 has not denied her liability in that regard. It is the answer given by DW.1 that plaintiff had stated approximate cost of Rs.1100/- per sq.ft., towards interior decoration works and Rs.185/- per sq.ft., towards sprinklers and generator relating to the area owned by defendant No.1, but plaintiff demanded to pay Rs.1.80 Crores in that regard, but already DW.1 has paid Rs.50 Lakhs to the plaintiff. This evidence of DW.1 means plaintiff has not deducted Rs.50 Lakhs paid by the defendant No.1 as advance amount toward interior works.
24. As noted above, in Cross examination at page No.9, it is evidence of DW.1 that herself and plaintiff had entered into separate agreement for interior decoration works of her part of building. All the above noted admissions are to be considered along with agreement at Ex.P.70, in which defendant No.1 was represented by her power of attorney holder i.e., defendant No.3. Further in the Cross examination it is evidence of DW.1 that she has not taken any action against defendant No.3 relating to agreement at Ex.P.70 was entered into by him with the plaintiff with regard 41 Com.OS.No.16677/2005 to the interior works and its cost. Thus, admittedly after having given power by executing power of attorney at Ex.P.91 in favor of defendant No.3, who had entered into agreement at Ex.P.70 with the plaintiff relating to interior works to be carried out by the plaintiff and its costs and defendant No.1 was represented in the said agreement at Ex.P.70 with her power of attorney holder, after revoking said power of attorney through letter at Ex.D.10, admittedly defendant No.1 has not taken any legal steps against the defendant No.3 and also against the agreement at Ex.P.70 and apart from that, having full knowledge of interior decoration works were being carried out by the plaintiff in the area of the building owned by the defendant No.1, defendant No.1 made advance payment of Rs.50 Lakhs. From these materials on record, it is manifest and clear that there was agreement between the plaintiff and defendant No.1 under which plaintiff undertook to carryout interior works in the area of the building owned by defendant No.1, as per the specifications shown in schedule-II of the Agreement to Lease at Ex.P.94, and the costs agreed was Rs.1,100/- per sq.ft., to the interior works and Rs.185/- per sq.ft., towards generator and sprinklers, i.e., in all Rs.1285/- per sq.ft.
25.No doubt, defendant No.1 has disputed letter dated 29.9.2003 at Ex.P.95. It is contention of defendant No.1 that her signature in Ex.P.95 is forged. The letter head and the format of Ex.P.95 is exactly similar to the letters admittedly entered into between plaintiff on the one hand and the 42 Com.OS.No.16677/2005 parents, brothers and sister of defendant No.1 on the other hand, at Exs.P.3 to P.7. This letter Ex.P.95 dated 29.9.2003 is produced by the plaintiff to show communication of defendant No.1 indicating that she would pay the cost of interior works at the rate of Rs.1,100/- per sq.ft., to the interior works and Rs.185/- per sq.ft., towards generator and sprinklers, i.e., in all Rs.1285/- per sq.ft. This cost of interior works as shown in this Ex.P.95 is exactly shown in such letters of communication at Exs.P.3 to P.7 made by the parents, brothers and sister of defendant No.1 with the plaintiff. The said cost of interior works shown in Ex.P.95 is not coming for the first time surprisingly. Because approximate minimum cost to be spent for interior works was already shown in the Agreement to Lease dated 6.6.2003 at Ex.P.94. Similarly, same cost of interior works was also shown in the Agreement at Ex.P.70. No doubt, defendant has produced records at Exs.D.21, D.22 & D.23, which are certified copies of FIR No.451/2007 of Ulsoor Police Station, certified copy of report lodged by defendant No.1 to the said police station and certified copy of charge sheet and its enclosures including FSL report relating to signature on Ex.P.95 marked herein, filed by the said police to the court. In the FSL report relating to the signature of the letter marked as Ex.P.95 herein, it is stated that signature is imitative forgery and the author of the signature cannot be ascertained. It is pertinent to note that such type of expert report relating to signature of letter marked as Ex.P.95 herein, given in the criminal prosecution, cannot 43 Com.OS.No.16677/2005 be accepted as conclusive proof in the civil proceeding for the reasons that defendant No.1 herein has not examined the expert who has given such report. The criminal proceedings with respect to Ex.P.95 letter has no role to play or has very little significance since the criminal court is seized of the matter regarding validity of Ex.P.95 and there is no final outcome in the said criminal proceedings. However, regardless of Ex.P.95, the cumulative effect of above noted discussed materials and admissions of DW.1 clearly and categorically establish agreement between defendant No.1 and plaintiff under which plaintiff undertook to carryout interior decoration works in the area of the building owned by the defendant No.1 as per the specification shown in Annexure-II of Agreement to Lease at Ex.P.94 and under said Agreement to Lease it was responsibility of the owners of the building to carryout such interior works and accordingly there was agreement between plaintiff and defendant No.1 for the cost of interior works at Rs.1,100/- per sq.ft., to the interior works and Rs.185/- per sq.ft., towards generator and sprinklers, i.e., in all Rs.1285/- per sq.ft. Even admittedly defendant No.1 made advance payment of Rs.50 Lakhs to the plaintiff in that regard. Therefore, it cannot be said that without any such agreement relating to interior works and its costs, defendant No.1 could adventure to pay advance amount of Rs.50 Lakhs in that regard to the plaintiff.
26. Plaintiff has claimed recovery of costs of interior works of Rs.1,59,65,328/- and interest on it at 18% per annum, in all 44 Com.OS.No.16677/2005 Rs.1,76,60,924.50. Plaintiff has raised debit notes to defendant No.1 as per Exs.P.76 to P.81 relating to the costs of interior works. Plaintiff issued demand notice through registered post to the defendant No.1 as per Exs.P.50 to P.52. Further plaintiff has raised invoices to defendant No.1 relating to the costs of interior works as per Exs.P.60 to P.67. Further plaintiff has produced ledger account of defendant No.1 which is certified by the chartered accountants by name M/s. S.Janardhan Associates, Chartered Accountants at Exs.P.53 to P.58. Further plaintiff has also produced statement of account certified by the said Chartered Accountants relating to costs of interior works at Ex.P.59. In this statement of accounts at Ex.P.59, Rs.50 Lakhs paid by the defendant No.1 to the plaintiff as advance amount, was deducted out of the total outstanding. Defendant No.1 has not raised dispute relating to all these records produced by the plaintiff. There is no effective Cross examination of PW.1 disputing correctness or accuracy of all these records produced by the plaintiff. Therefore, there are no reasons to disbelieve these records such as ledger extracts and statements of accounts certified by the Chartered Accountants relating to the amount due by the defendant No.1 with regard to the interior works carried out by the plaintiff in the building of defendant No.1. Amount due relating to the cost of interior work is calculated in Ex.P.59 on the basis of measurement of the building owned by defendant No.1 and multiplied by the agreed cost of interior at Rs.1285/- per sq.ft.. In the 45 Com.OS.No.16677/2005 Cross examination at Page No.20, it is evidence of DW.1 that the area of the building owned by her measures 12,270 sq.ft. In the Cross examination at page No.11 it is evidence of DW.1 that prior to filing of this suit she did not send any letter to the plaintiff raising dispute relating to the quality of interior decorations carried out by the plaintiff to the premises owned by her. Further it is also evidence of DW.1 in the Cross examination at Page No.18 that defendant No.2 never raised any objection relating to the building or to the interior decoration works to the building. These materials on record clearly show that there is no dispute relating to the measurement of the building owned by the defendant No.1 in "Embassy Heights" and also interior works carried out by the plaintiff in the said building of defendant No.1 as per the specifications shown in Annexure-II of Agreement to Lease at Ex.P.94.
27. DW.2 is husband of defendant No.1. This DW.2 is an advocate. In the Cross examination it is evidence of DW.2 as under:
"I started my advocate profession in the year 1980. I was present in the court during the Cross examination of DW.1. It is true that I had also participated in issuing legal notice and also reply notice to the plaintiff on behalf of defendant No.1, in filing written statement of defendant No.1 and to proceed with the evidence of DW.1."
The above noted oral evidence of DW.2 shows that he took active role on behalf of defendant No.1 to issue legal notice to the plaintiff, reply notice 46 Com.OS.No.16677/2005 to the plaintiff, to prepare written statement of defendant No.1 and to proceed with the evidence of DW.1. It is relevant to note that the question put to DW.2 and answer given to the question by DW.2, in page No.12 is as under:
"Qn: Do you have records to prove allegations made by you in para No.18 of your chief examination affidavit ?
Answer : There are records, and all the records including Exs.P.83 & 93 were prepared n the office of Mr. S.Janardhan, who is the auditor of the plaintiff and I was also present throughout while preparing all the records. The said Mr. S.Janaradhan was also auditor of entire family of Sri. Subbanna, i.e., my father in law."
This evidence of DW.2 shows that all the records including records at Ex.P.83 and P.93 were prepared in the office of Mr. S.Janardhan, who is the auditor of plaintiff and also auditor of entire family of Sri. Subbanna, who is the father of defendant No.1. Further, the above noted answer given by DW.2 shows that he was also present throughout while records were prepared by the auditor. Thus, undisputedly auditor for the plaintiff and the family of defendant No.1 is the same person. The said auditor has certified the ledger accounts at Exs.P.53 to P.58 and also account statement at Ex.P.59. As discussed above, there is no dispute raised by the defendant No.1 relating to these account records. No much dispute is raised in the cross examination of PW.1 relating to the calculations shown in these 47 Com.OS.No.16677/2005 account records at Exs.P.53 to P.59. Advance of Rs.50 lakhs paid by defendant No.1 to the plaintiff has been deducted out of the total dues in Ex.P.59. As discussed above, regardless of Ex.P.95, the plaintiff is able to establish through the documents such as Ex.P.70, P.91 and P.94 and also other records apart from the admission of the first defendant that she is liable to pay the suit claim. It is important to note that the defendant has clearly admitted that she has not paid any money to the plaintiff other than Rs.50 Lakhs, towards interior works carried out by the plaintiff. The evidence of PW.1 coupled with the admissions of DW.1 and DW.2 clinchingly indicates that the suit claim is proved. So far agreement to pay interest is concerned, Sec.34 CPC recognizes contractual rate of interest. The transaction of the instant case is commercial transaction. Parties had agreed in Ex.P.70 to pay interest at 18% per annum. Since parties have agreed in Ex.P.70 for payment of interest at 18% per annum, the claim of the plaintiff for interest at 18% per annum till the date of suit on the cost of interior works of Rs.1,59,65,328/-. Accordingly plaintiff has claimed recovery of Rs.1,76,60,924.50 in this suit, which includes the interest on the due amount of Rs.1,59,65,328/-. In view of contract in Ex.P.70 for payment of interest at 18% per annum, plaintiff is entitled for recovery of Rs.1,76,60,924.50 along with future interest at 18% per annum on the costs of interior works of Rs.1,59,65,328/- from the date of suit till the date of realization of the entire amount. For these reasons,Issue Nos.1 & 2 are 48 Com.OS.No.16677/2005 answered in the 'Affirmative' and Issue No.3 is answered that materials on record proved agreement between the parties relating to interior works and its costs.
28. ISSUE NOs.4 to 7 : It is argument of learned advocate for plaintiff and it is also contended in the notes of argument that claim of defendant No.1 towards Capital Gains of Rs.36,33,333/- has not been established since defendant No.1 has not produced any documentary evidence to substantiate this claim and in the cross examination it is evidence of defendant No.1 that she has not paid tax on Capital Gains and Income Tax Department has not issued notice to her for payment of tax on Capital Gains and it is evidence of DW-2 that there are no records to show tax on Capital Gains was paid. Further it is also submission of learned advocate for plaintiff that defendant No.1 has failed to prove issue Nos.5 to 7. Defendant No.1 has admitted that she had executed Power of attorney in favor of her father Mr.K.Subanna as well as her brother Mr.Jagadish Kumar. She has admitted that she had executed Power of attorneys at Ex.P.92 dated 02.06.1977, at Ex.P.90 dated 25.10.2003 and at Ex.P.91 dated 23.12.2003. By virtue of these Power of attorneys, the said Mr.K.Subanna and said Mr.Jagadish Kumar had executed many supplementary agreements with the plaintiff and many communications have taken place between the parties. In the Cross examination it is evidence of DW-1 that herself and her family members had entered into 49 Com.OS.No.16677/2005 agreement at Ex.P.93. Under this agreement at Ex.P.93 dated 28.02.2003, Mr.K.Subanna had agreed along with his family members to receive a sum of Rs.68,00,000/- from the plaintiff towards delay in completion of the project and subsequently the said Mr.K.Subanna received a sum of Rs.50,00,000/- by executing Ex.P.83 dated 09.12.2004 towards full and final settlement. DW-1 has not denied receipt of Rs.50,00,000/- by her father from the plaintiff towards full and final settlement relating to the compensation for the delay in completion of the project. However, her only grievance is that she has not received money from her father. Further it is also submission of learned advocate for plaintiff that in view of judgment of Hon'ble Apex Court dated 19.11.2019 passed in SLP(C) No.23599/2018 (Ashok Kumar Karla V/s Wg. Cdr. Surendra Agnihotri and Ors. ) counter claim filed in this case by the defendant, which was filed after settlement of issues, cannot be entertained. Further it is also submission of learned advocate for plaintiff that there is no relativity between cause of auction of the suit which is entirely different than the cause of auction of alleged counter claim which is also entirely different one in view of above noted judgment of Hon'ble Apex Court. Further it is also submission of learned advocate for plaintiff that counter claim of the defendant is barred by limitation since suit was filed on 20.06.2005 and the issues were framed on 03.09.2005 and counter claim was filed on 28.03.2008 i.e., after lapse of 3 years from the date of the written statement was filed. The so called 50 Com.OS.No.16677/2005 claim of the defendant No.1 is based on supplementary agreement dated 02.02.1999 and the rental compensation claimed by way of counter claim is calculated upto 31.07.2003. But, counter claim was raised by way of amendment to the written statement only on 28.03.2008, which is clearly beyond the period of 3 years. Accordingly it is submission of learned advocate for plaintiff that there is no relativity in the cause of auction of the suit of the plaintiff and counter claim of defendant No.1 and counter claim of defendant No.1 is barred by limitation and defendant No.1 is not entitled for the reliefs claimed in the counter claim in view of undisputed fact that supplementary agreement at Ex.P.93 was entered into under which father of defendant No.1 by representing all the family members had agreed to received Rs.68,00,000/- from the plaintiff towards delay in completion of the project and subsequently by executing Ex.P.83, father of defendant No.1 received Rs.50,00,000/- from the plaintiff towards its full and final settlement and this fact has been clearly admitted by the Pws-2 and 3 who are brother and sister respectively of defendant No.1. Accordingly learned advocate for plaintiff has requested to answer these issues in the negative.
29. On the other hand it is submission of learned advocate for defendant No.1 and it is also contended in the notes of argument that counter claim of defendant No.1 for recovery of Rs.2,10,75,754/- is based on the supplementary agreement dated 02.02.1999 at Ex.D.4. Defendant 51 Com.OS.No.16677/2005 No.1 has produced records at Ex.D.1 to Ex.D.25 to prove her counter claim. The contention of the plaintiff relating to supplementary agreement at Ex.P.93 executed by Mr.K.Subanna as Power of attorney of defendant No.1 cannot be accepted since there is no reference in Ex.P.93 relating to Power of attorney executed by the defendant No.1 in favor of Mr.K.Subanna. Further it is also submission of learned advocate for defendant No.1 that in fact defendant No.1 had executed registered Power of attorney dated 02.06.1977 at Ex.P.92 in favor of her father Mr.K.Subanna. Subsequently she also executed Power of attorney dated 25.10.2003 at Ex.P.90 in favor of her father. She also executed Power of attorney dated 23.12.2003 at Ex.P.91 in favor of her brother Mr.Jagadish Kumar who is defendant No.3. Despite the defendant No.1 executed Power of attorney dated 02.06.1977 at Ex.P.92, she personally participated along with other family members to enter into JDA dated 29.09.1993 at Ex.P.68 with the developer. Therefore, plaintiff is estopped from relying on Ex.P.92 for the purpose of supplementary agreement at Ex.P.93. Further it is also submission of learned advocate for defendant that supplementary agreement at Ex.P.93 does not take away any right of defendant No.1. There was partition deed entered into in the year 2002 under which defendant No.1 became absolute owner of the share alloted to her in the building of Embassy Heights and therefore by virtue of Power of attorney of the year 1977 father of defendant No.1 had no authority to enter into 52 Com.OS.No.16677/2005 agreement at Ex.P.93 with the plaintiff to take away the right approved to the defendant No.1 under the supplementary agreement at Ex.D.4. Further it is also submission of learned advocate for defendant No.1 that implied powers cannot go beyond the scope of general object of the power given under the Power of attorney. Further it is also submission of learned advocate for defendant No.1 that counter claim filed by the defendant No.1 is not barred by the limitation since time spent by the defendant No.1 before the Karnataka State Consumer Disputes Redressal Commission by way of filing Complaint No.12/2005 as per Ex.D.17, which was filed on 07.02.2005 and then order was passed on 23.06.2006 reserving the liberty to the defendant No.1 to approach the Civil Court, is to be excluded under Section 14 of the Limitation Act and if this time spent is excluded, then certainly the counter claim filed by defendant No.1 is within time. Accordingly learned advocate for defendant No.1 has requested to answer these issues in favor of defendant No.1.
30. After having heard both the sides on Issue Nos.4 to 7, I have carefully gone through the materials on record. After careful scrutiny of the materials on record, I am of the considered opinion that the defendant is not entitled to recover the sum claimed in the counter claim for several reasons. Among them first reason is that, in the reported judgment, which is placed by the learned advocate for plaintiff, it is held by the Hon'ble Apex Court in 2019 SCC OnLine 1493 (Ashok Kumar Kalra 53 Com.OS.No.16677/2005 Vs. Wing Cdr. Surendra Agnihotri & Ors.) at para No.22 as under :-
"22. We sum up our findings, that Order VIII Rule 6A of the PC dos not put an embargo on filing the counter claim after filing the written statement, rather the restriction is only with respect to the accrual of the cause of action. Having said so, this does not give absolute right to the defendant to file the counter claim with substantive delay, even if the limitation period prescribed has not elapsed. The court has to take into consideration the outer limit for filing the counter claim, which is pegged till the issues are framed. The court in such cases have the discretion to entertain filing of the counter claim, after taking into consideration and evaluating inclusive factors provided below which are only illustrative, though not exhaustive :
i. Period of delay ii. Prescribed limitation period for the cause of action pleaded. iii. Reason for the delay.
iv. Defendant's assertion of his right.
v. Similarity of cause of action between the main suit and the counter claim.
vi. Cost of fresh litigation.
vii. Injustice and abuse of process.
viii. Prejudice to the opposite party.
ix. and facts and circumstances of each case. x. In any case, not after framing of the issues".
In this judgment it held by the Hon'ble Apex Court that counter claim filed by the defendant after written statement was filed can be received by the court till framing of issues. This means counter claim cannot be received after framing of issues in the suit. It is relevant to note that in the case on hand suit was filed on 20.06.2005. Written statement was filed on 22.09.2005. Issues were framed on 03.09.2005. Defendant No.1 did not file counter claim till framing of issues in this suit. After issues were framed, defendant No.1 has filed IA No.7 on 31.08.2006 under Order VI 54 Com.OS.No.16677/2005 Rule 17 CPC seeking permission to carry out amendment in the written statement so as to include counter claim. Order was passed on 07.02.2008 allowing this IA No.7 and subsequently counter claim has been included in the written statement by way of amendment to the written statement on 13.02.2008. Thus, counter claim of the defendant No.1 was not filed within time i.e., before framing of issues in this suit.
31. The second reason is that as held by the Hon'ble Apex Court in the above noted judgment, court has to consider the similarity of cause of action between the main suit and the counter claim. It is pertinent to note that there is no similarity of cause of action of the main suit and the cause of action of the counter claim in the written statement of the defendant No.1 for the reasons that cause of action for the main suit is on the basis of contract/agreement entered into relating to interior works carried out as agreed in the agreement to lease dated 06.06.2019 at Ex.P.94. Subsequently, agreement at Ex.P.70 dated 24.04.2003 was entered into between defendant No.1, her parents, her brothers and her sister on one hand and plaintiff on the other hand relating to the interior works and also its costs, which works were entrusted to the plaintiff to be carried out in the entire building of "Embassy Heights" including the area owned by the defendant No.1. As discussed above under issue Nos.1 to 3, defendant No.1 was represented in this agreement at Ex.P.70 through her Power of attorney holder i.e., defendant No.3 by virtue of power of attorney dated 55 Com.OS.No.16677/2005 23.12.2003 executed by her at Ex.P.91. The cause of action shown by the defendant No.1 to the counter claim is based on Supplementary agreement dated 02.02.1999 at Ex.D.4 which was for construction of the building. It is undisputed fact that original construction agreement at Ex.P.68 was entered into on 29.09.1993, subsequently several Supplementary agreements were also entered into between the parties for construction of the building. Initially it was decided to construct residential complex and later on it was decided to construct multi-storied commercial complex. Supplementary agreement at Ex.D.4, on which defendant No.1 has placed reliance for the counter claim, is dated 02.02.1999. Thus, it is clear that agreement for interior works in the building is entirely different than the agreement for construction of building. Agreement for carrying out of interior works was entered into much subsequent to the construction of the building and delivery of possession to the respective owners, which was done on the basis of construction agreement dated 29.09.1993 at Ex.P.68 and also several subsequent Supplementary agreements including the Supplimentary Agreement dated 02.02.1999 at Ex.D.4. In the cross examination at Page No. 9, it is evidence defendant No.1 as under :
"Myself and plaintiff had entered into separate agreement for interior decoration works of my part of building".
Thus it is admission of DW.1 that herself and plaintiff has entered into separate agreement for interior decoration works. Further in the same page No.9 itself, it is also evidence of DW1 as under:
56Com.OS.No.16677/2005 "It is true that this interior decoration contract is entirely different than the building construction contract". Thus DW.1 has categorically admitted that interior decoration work is entirely different than the building construction contract. Therefore from the materials on record it is crystal clear that both the contracts i.e., building construction is entirely different than the contact for interior decoration works. Period of both the contracts is also different. Nature of works of both the contracts is also different. Scope of both the contracts is entirely different from each other. From these materials on record, it is manifest that there is no similarity of cause of action between the main suit and the counter claim. Therefore defendant cannot succeed for the counter claim.
32. Third reasons is that so far claim made by the defendant No.1 in her counter claim towards capital gains liability is concerned, no doubt in the Supplementary agreement dated 02.02.1999, developer has agreed to pay capital gains tax liability arising out of sale of 49% undivided right and interest of the owners to the developer in view of the convertion of the project from residential to commercial. But this clause in the agreement itself is not sufficient for the defendant No.1 to claim Rs.36,33,333/-
towards capital gains tax for the reasons that it is not shown as to what is the total gain tax paid to the sale of 49% and further it is not shown as to how much of capital gains tax was paid by the defendant No.1 to the tax Department. It is evidence of DW.1 in Page No. 16 as under :
57Com.OS.No.16677/2005 "I have not paid capital gains tax to the income Tax Department relating to the amount of Rs.36,33,333/- shown in Page No.15 of written statement. There is no demand notice issued by the Income Tax Department to me relating to the said amount. I have no remembrance as to on which basis I have claimed this amount of Rs.36,33,333/- from the plaintiff. I do not know if it is suggested that I have not produced any records in this case to prove my claim for this amount of Rs.36,33,333/-". Thus it is admitted by DW.1 that she has not paid tax on capital gains so as to claim this amount of Rs.36,33,333/- and there is no notice issued by the Income Tax Department to her claiming tax in this regard. DW.1 is not able to show as to on what basis she has claimed this amount of Rs.36,33,333/-. DW.2 is husband of DW.1. Though in the cross examination DW.2 has deposed that tax of Rs. 11 lakhs on capital gains was paid by the defendant No.1 and there are records in that regard, but DW.2 has admitted that those records are not produced in this case. Thus, except clause in the Supplementary agreement at Ex.D.4, there are no other supportive materials placed by the defendant No.1 to show that she is entitled for this amount of Rs.36,33,333/- towards capital gains tax.
33. Fourth reason is that so far other claims made by the defendant No.1 in her counter claim are concerned, it is pertinent to note that defendant No.1 has claimed a sum of Rs.10,83,333/- towards compensation for delay in construction for the period from 31.05.1999 to 30.06.2000 and also a sum of Rs.99,00,275/- towards rental compensation for the second floor and a sum of Rs.64,58,813/- towards rental 58 Com.OS.No.16677/2005 compensation of ground, first and mezzanine floor. Burden lies upon the defendant No.1 to establish her entitlement for these amounts. It is admitted fact that defendant No.1 had executed registered Power of attorney dated 2.6.1977 at Ex.P.92 in favor of her father by name Sri. K.Subbanna. It is also admitted fact that subsequently defendant No.1 executed Power of attorney dated 25.10.2003 at Ex.P. 90 and another power of attorney dated 23.12.2003 in favour of her brother by name Jagadeesh Kumar who is defendant No.3. By virtue of these Power of attorneys the father and brother of defendant No.1 have executed many Supplementary agreements and made communications with the plaintiff. Relating to the compensation for the delay in completion of the construction project of the building is concerned, there was agreement dated 28.2.2003 at Ex.P.93 entered into between Mr.K.Subbanna and also plaintiff. In this agreement at Ex.P.93, Mr.K.Subbanna represented his wife and all the children including the defendant No.1. Under this agreement, the said Mr.K.Subbanna had agreed to receive a sum of Rs.68 Lakhs on behalf of all the family members from the plaintiff towards delay in completion of project by way of compensation. Defendant No.1 has not disputed her representation through her father Mr.K.Subbanna in this agreement at Ex.P.93. DW.1 has admitted this agreement at Ex.P.93. In the cross examination at Page No.16, it is evidence of DW.1 as under :
"Plaintiff completed the construction work of the building of 11 floors as per the terms of joint development agreement in the 59 Com.OS.No.16677/2005 year 2002. Witness volunteers there was delay in completing the construction work. During the life time of my father, we discussed with my father relating to the delay caused by the plaintiff in completing the construction work of the building as per the terms of joint development and at that time, plaintiff used to inform us to compensate. Accordingly Supplementary Agreement at Ex.P.93 was entered into."
Thus, it is admission of DW.1 that since there was delay on the part of the plaintiff to complete the construction work of the building, all the family members including the defendant No.1, discussed with their father Mr.K.Subbanna relating to the delay caused by the plaintiff and at that time plaintiff used to inform them to compensate and accordingly Supplementary agreement at Ex.P.93 was entered into. Further in the cross examination at page-14, it is also evidence of DW.1 as under :
" It is true that Supplementary agreement dated 28.02.2003 at Ex.P.93 was entered into between me, my father and my other family members and also the plaintiff. It is true that some changes regarding the terms of the contract were made through agreement at Ex.P.93. It is true that it was decided in Ex.P.93 that plaintiff should pay Rs.68 lakhs to compensate the land owners due to delay in completing the construction of the building as per the terms of joint development agreement".
Thus, DW.1 has admitted that she is also part of agreement at Ex.P.93 dated 28.02.2003 under which plaintiff had agreed to pay Rs. 93 lakhs to the family members of defendant No.1 to compensate them relating to delay caused in completing the construction of the building as per terms of joint development agreement. Therefore, defendant No.1 cannot deny the authority given to her father to represent her to enter into such agreement 60 Com.OS.No.16677/2005 at Ex.P.93. This evidence shows that defendant No.1 never revoked the authority given to her father.
34. Plaintiff has produced letter at Ex.P.83 dated 09.12.2004 to show that Mr.K.Subbanna received Rs.50 lakhs instead of Rs.68 Lakhs shown in the agreement at Ex.P.93, towards full and final settlement of compensation for delay in completing the construction of the building. PWs.2 and 3 who are the witnesses of plaintiff, are none other than the brother and sister of defendant No.1. Among them, PW.2 was an officer of SBI and PW.3 is working as a doctor. These PWs.2 & 3 in their oral evidence have specifically deposed Rs.50 lakhs received by their father Mr.K.Subbanna from the plaintiff towards the compensation for the delay caused in construction of the building. This fact has not been disputed by the defendant No.1 in the cross examination of PW. 2&3. Even specific suggestions were put to DW.1 in her cross examination relating to said letter at Ex.P.83 executed by her father by receiving R.50 lakhs towards full and final settlement instead of Rs.68 lakhs shown in the agreement at Ex.P.93. These suggestions were put to DW.1 in Page No. 15 of her cross- examination. DW.1 has not denied these suggestions with specific terms. She has expressed her ignorance for these suggestions. Evidence of DW.1 in this regard in Page No.15 is as under :
"I do not know if it is suggested that my father had sent letter at Ex.P.83 dated 09.12.2004 to the plaintiff confirming the terms of Ex.P.93 and agreeing to receive aggregate amount of Rs.50 lakhs 61 Com.OS.No.16677/2005 instead of Rs.68 Lakhs shown in the agreement at Ex.P.93. I do not know if it is suggested that as per the letter at Ex.P.83, my father had received Rs.50 lakhs in full and final settlement of the compensation and he had received it on behalf of family members from the plaintiff. I do not know if it is suggested that myself and my remaining members of the family i.e., my father, my brothers and my sister knew this fact very well since beginning. My father died on 01.03.2007."
Thus DW.1 has expressed her overall ignorance relating to the important suggestions put to the material facts.
35. It is also relevant to note that it is undisputed fact that defendant No.1 had executed registered Power of attorney dated 02.06.1977 at Ex.P.92 in favour of her father to deal with the property, to enter into agreement for construction etc. There is no materials placed by defendant No.1 to show that prior to 01.03.2007, on which date her father died, defendant No.1 canceled/revoked registered Power of attorney dated 02.06.1977 at Ex.P.92. In the cross examination at Page No.14, it is evidence of DW.1 as under :
"It is true that my father, during his life time, was doing all the works on behalf of the family members. Myself and other family members never raised objection to the works/transactions done by my father. My father did all the works/transactions, on behalf of his wife and children , for the welfare and benefit of the family members. My father gave proper share to his wife and all the children in the family properties. Even myself or my other family members or any other person never challenged the works/transactions done by my father on behalf of his family members relating to the family properties."
If this evidence of DW.1 is considered along with the registered Power of 62 Com.OS.No.16677/2005 attorney dated 02.06.1977 at Ex.P.92 given by the defendant No.1 to her father and also along with the admissions of PW.2&3 who are the brother and sister of defendant No.1, relating to receipt of amount of Rs.50 lakhs by their father towards full and final settlement instead of Rs.68 lakhs shown in Ex.P.93 by executing letter at Ex.P.83, it clearly supports the contention of plaintiff that during the life time of father of defendant No.1, by virtue of authority given to Mr.K.Subbanna, he represented all his family members and received Rs. 50 lakhs from the plaintiff towards full and final settlement of the compensation relating to the delay in construction of the building as per the terms of joint development agreement, instead of Rs.68 lakhs shown at Ex.P. 93. Even it is further evidence of PW.3 that due to such receipt of amount towards full and final settlement, rest of the claims of the owners were given up.
36. Fifth reason is that Mr.K.Subbanna, the father of defendant No.1, was very much alive when the suit was filed and when the first defendant filed her written statement in this suit. The said Mr. K.Subbanna died on 01.03.2007. Admittedly, defendant No.1 did not initiate any action of whatsoever nature against her father during his life time. In fact, the defendant No.1 has clearly admitted in her cross examination that her father did all transactions on behalf of her family and for the welfare and for the benefit of family members, during his life time. She has also stated that her father has given proper share to the family members in the family 63 Com.OS.No.16677/2005 properties and none of the family members challenged the works/transactions done by the father on behalf of the family members. DW.1 has also admitted that Supplementary agreement was executed on 28.12.2003 at Ex.P. 93. But DW.1 pleads her ignorance regarding receipt of money of Rs.50 lakhs from her father. Thus, from the evidence of DW.1, it is clear that Mr.K.Subbanna received Rs.50 lakhs representing his family members and it was for the benefit of all the family members from the plaintiff towards full and final settlement relating to the delay in completing of the construction work of the building as per the terms of JDA. Therefore, defendant No.1 is not entitled for the claims made in the counter claim.
37. Sixth reason is that as rightly submitted by the learned advocate for the plaintiff, even time spent by the defendant No.1 from 7.2.2005 till 23.6.2006 before the Karnataka State Consumer Disputes Redressal Commission, is excluded, counter claim of the defendant No.1 is barred by limitation for the reasons that counter claim of defendant No.1 is based on Supplementary Agreement dated 2.2.1999 at Ex.D.4. Except claim No.3 of the counter claim for Rs.90,00,275/- , the rest of the 3 claims of the counter claim, as per the averments made in the counter claim and also as per Supplementary Agreement at Ex.D.4, were payable prior to the year 2000 itself. Limitation to make these claims for the defendant No.1 was ended in the end of the year 2003 itself. Defendant No.1 filed complaint 64 Com.OS.No.16677/2005 No.12/2005 as per Ex.D.17 on 7.2.2005 before the Karnataka State Consumer Disputes Redressal Commission. The said complaint was dismissed on 23.6.2006 as per Order at Ex.D.18 with liberty to the defendant No.1 to approach the civil court if advised. Plaintiff has filed this suit on 20.6.2005. Defendant filed written statement on 22.9.2005. Issues were framed on 3.9.2005 and suit was set for trial. Defendant No.1 had filed IA No. 7 on 31.8.2006 seeking permission to carryout amendment in the written statement. This IA No.7 was allowed on 7.2.2008. Accordingly, defendant No.1 has carried out amendment in the written statement on 13.2.2008 on which date counter claim was included for the first time in the written statement. Even if the time spent by the defendant No.1 from 7.2.2005 till 23.6.2006, before the Karnataka State consumer Disputes Redressal Commission, is excluded in view of Sec.14 of the Limitation Act, still counter claim of defendant No.1 is clearly barred by limitation.
38. For the above discussed reasons counter claim of defendant No.1 deserves to be dismissed. For these reasons, Issue Nos. 4 to 7 are answered in the 'Negative'.
39. Issue No.8 : For the above discussed reasons and in view of above findings recorded to Issue Nos. 1 to 7, I proceed to pass the following:
65Com.OS.No.16677/2005 ORDER Suit of the plaintiff is decreed with costs against defendant No.1 only.
Plaintiff is entitled to recover Rs.1,76,60,924.50 from defendant No.1 with future interest at the rate of 18% per annum on Rs.1,59,65,328/- from the date of suit till realization of entire amount.
Defendant No.1 shall pay above amount to the plaintiff within two months.
Counter claim of defendant No.1 is dismissed.
Draw decree accordingly.
(Dictated to the JW, typed by her, corrected and then pronounced by me in Open Court, on this the 28th day of February, 2020.) (JAGADEESWARA.M.) LXXXII Addl. City Civil & Sessions Judge, Bangalore.
ANNEXURE LIST OF WITNESSES EXAMINED FOR PLAINTIFF:
PW.1 Jaikishen Virwani PW.2 S. Jagadeesh Kumar PW.3 S.Kanchana 66 Com.OS.No.16677/2005 LIST OF DOCUMENTS MARKED FOR PLAINTIFF Exs.P-1 Copy of letter written to 1st defendant " P-2 Postal acknowledge " P-3 Copy of letter written to K.Subbanna " P-4 to 7 Letters " P-8 to 35 Receipts issued by plaintiff " P-36 to 49 Letters " P-50 Copy of notice issued to 1st defendant " P-51 Postal Receipt " P-52 Postal acknowledgement " P-53 to 58 Ledger extracts " P-59 Statement pertaining to 1st defendant " P-60 to 67 Invoices " P-68 Agreement entered into Co-owners with plaintiff " P-69 Cancellation deed " P-70 Agreement entered into Co-owners with plaintiff " P-71 to 75 Letters " P-76 Copy of letter " P-77 to 81 Debit Notes " P-82 Extracts of minutes of the Board meeting " P-83 Letter " P-84 to 88 Copies of Income Tax returns " P-89 Statement of account " P-90 & 91 GPA " P-92 GPA " P-93 Supplementary agreement " P-94 Lease Agreement dated 06-06-2003 " P-95 Letter dated 29-09-2003 LIST OF WITNESSES EXAMINED FOR DEFENDANTS: DW.1 S.Hemalatha DW.2 V.Prakash 67 Com.OS.No.16677/2005 LIST OF DOCUMENTS MARKED FOR DEFENDANTS Exs.D-1 Copy of the notice " D-2 Letter dated 12.11.2003 " D-3 Certified copy of order dated 08.10.2012 in C.R.P.No. 3436/2012 " D-4 Supplementary Agreement dated 02.02.1999 " D-5 Certified copy of Memorandum in C.R.P No. 3436/2012 " D-6 Copy of the notice dated 02-09-2004 " D-7 Reply dated 16-09-2004 " D-8 Copy of the withdrawal of Power of Attorney relating to Lease Agreement dated 06.06.2003 " D-9 Copy of letter dated 11.11.2003 " D-10 Defendant No.1's letter dated 10.05.2004 " D-11 Copy of the letter dated 09.07.2002 " D-12 &13 Copy of notice dated 30.06.2007 " D-14 & 15 Reply to notice dated 30.06.2007 " D-16 Rejoinder dated 28.07.2007 " D-17 Certified copy of complaint No. 12/2005 f " D-18 Certified copy of order sheet of complaint No. 12/2015 " D-19 Certified copy of order dated 23-06-2006 " D-20 Certified copy of the order sheet in C.C.No. 22370/2009 " D-21 Certified copy of FIR in Crime No. 451/2007 of Ulsoor Police Station " D-22 Certified copy of Complaint dated 01-10- 2007 of C.C.No. 22370/2009. " D-23 Certified copy of charge sheet and its enclosures filed by the police in said Crime No. 451/2007 of Ulsoor Police Station. " D-24 Reply notice dated 26-10-2004 " D-25 Letter dated 08-05-2003 with postal receipt and postal acknowledgement. (JAGADEESWARA.M.), LXXXII Addl. City Civil & Sessions Judge, 68 Com.OS.No.16677/2005 Bangalore.