Delhi District Court
Mr. Govind Sarda vs M/S Sartaj Hotels Apartments & on 8 June, 2018
IN THE COURT OF DR.SAURABH KULSHRESHTHA
ADDITIONAL DISTRICT AND SESSIONS JUDGE:
PATIALA HOUSE COURTS: NEW DELHI
Civil Suit no: 12035/2016
Mr. Govind Sarda
Son of Late Shri Shiv Lal Sarda
R/o 70, Gold Links,
New Delhi ....... Plaintif
Versus
1. M/s Sartaj Hotels Apartments &
Villas Private Limited,
a company incorporated under the
Companies Act, 1956
having its registered ofice at
A-3, Green Park,
New Delhi - 110016
through its Director Shri Raghubir Singh
2. Shri Inderjit Singh
Son of Shri Raghubir Singh
A-3, Green Park,
New Delhi.
3. Shri Raghubir Singh
Son of Late Shri Jodh Singh
4. Shri Surender Singh Bindra
Father's name not known
Both D3 and D4 carry on business at
A-3, Green Park, New Delhi.
5. Union General Company Limited
No. 21-A, Shakespeare Sarani,
Calcutta - 700017
through its Director.
Suit No. 12035/2016
Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited.
Page No. 1 of 42
.......Defendants
Suit for Declaration and Injunction
Date of institution of the suit : 21.07.2000
Date on which judgment
was reserved : 17.04.2018
Date of decision : 08.06.2018
Decision : Suit Dismissed
JUDGMENT
1. This is a suit for declaration and permanent injunction. The version of the plaintif is that the defendant no. 1 company, being the owner of land measuring 20 acres situated in Village Rangpuri, Delhi, devised a plan / project to construct a hotel / motel and service apartments thereupon, for which it needed a partner capable of supplying finances besides being resourceful and competent to obtain various permissions / approvals for the implementation of the said project from various Government authorities.
2. It is further the case of the plaintif that it was represented by the defendants nos. 1 to 4 that if the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 2 of 42 plaintif agreed to become a partner in the said joint venture / partnership, the plaintif would not only become a co-owner of the aforesaid land which would be the property of the partnership firm / joint venture, but would also have rights and interest in the said joint venture / partnership as a partner and would therefore be entitled to a share in the profits. Accordingly, the plaintif agreed to become a partner in the said project / joint venture/ partnership and entered into a partnership agreement / Memorandum of Understanding dated 25.06.1996 for construction of a 5 star hotel / motel / resort and service apartments on the said land as a partner.
3. Thereafter, the defendants nos. 1 and 2 along with the plaintif approached one Union General Co. Limited (defendant no. 5) for finance with an ofer for becoming a partner in the said project and the said company agreed. The plaintif also agreed to the same in terms of the letter dated 29.06.1996.
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4. It is further the case of the plaintif that thereafter the defendants nos. 1 to 4 gave their suggestions for some amendments in the MOU which were accepted by the plaintif and were incorporated in the document dated 08.07.1997 and the same were thereafter recorded in the agreement of partnership dated 30.08.1997. Thereafter, a further supplementary partnership agreement/ MOU dated 26.12.1997 was also executed between the parties.
5. It is further the case of the plaintif that in view of the delay in the commencement of construction of the project, the defendant no. 5 cancelled the contract with the defendant no. 1 and asked for refund of the amount advanced by the defendant no. 5 to the defendant no. 1. Since the defendant no. 1 did not return the amount advanced to the defendant no. 5, the defendant no. 5 filed a civil suit bearing no. 303/1999 before the Hon'ble High Court at Calcutta.
6. It is further the case of the plaintif that the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 4 of 42 plaintif ultimately procured the approval of DDA for planning permission for construction of the motel at the suit land vide letter dated 02.02.2000 issued in the name of the defendants nos. 1 and 2. The plaintif further pleaded that he had incurred huge expenditure in securing the said permission.
7. It is further the case of the plaintif that under the terms and conditions of the last amended supplementary agreement / MOU dated 26.12.1997 the plaintif's share in the aforesaid partnership / joint venture was 40%, the share of the defendants nos. 1 to 3 was 40% and the share of the defendant no. 4 was 20% in all the assets and properties including the aforesaid suit land, approximately measuring 20 acres situated in Village Rangpuri, Delhi which belongs to the partnership / joint venture. The plaintif further pleaded that the defendants nos. 1, 2 and 3 had put the plaintif in joint possession of the aforesaid suit land measuring 20 acres and the plaintif continued to be in possession of the suit land jointly with Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 5 of 42 the defendant no. 1 as a partner since 25.06.1996.
8. It is further the case of the plaintif that the defendant no. 1 company and its directors i.e. the defendants nos. 2 and 3 had refused to sign the building plans and other papers and documents which were required for obtaining the necessary approvals from the various Government departments and wanted to wriggle out of the said partnership. It is further the case of the plaintif that the defendants nos. 1 to 3 also tried to create third party interest in the suit land.
9. It is further the case of the plaintif that the plaintif served a legal notice dated 10.05.2000 upon the defendants in this respect. The defendant no. 1 issued reply dated 15.05.2000 alleging that there was a default on the part of the plaintif in making payment of the amount payable and therefore the sum of Rs. 51 Lacs, which was paid by the plaintif, was forfeited and this was consented by the plaintif vide letter dated 28.12.1999. The plaintif Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 6 of 42 denied having written any letter dated 28.12.1999 to the defendant no. 1. The plaintif further denied having consented to the forfeiture of Rs. 51 Lacs as claimed by the defendant no. 1 or to the cancellation of the MOU dated 25.06.1996 as modified by agreement dated 30.08.1997 and agreement dated 26.12.1997. The plaintif therefore wrote a letter dated 23.05.2001 to the defendant no. 1 intimating these facts and called upon the defendant no. 1 to produce the said alleged letter dated 28.12.1999 but the defendant no. 1 neither replied the same nor produced a copy of the said letter.
10. It is further the case of the plaintif that the alleged cancellation of the partnership agreements is illegal, null and void and the plaintif continues to be a partner in the aforesaid partnership and the aforesaid land continues to be partnership property. The plaintif has further averred that he was always and is ready and willing to perform his part of the contract as a partner in the aforesaid agreements of partnership / joint venture. The Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 7 of 42 plaintif has further alleged that the defendants have committed breach of the said partnership agreements and are avoiding to perform their obligations under the said partnership agreements.
11. It is further the case of the plaintif that in order to avoid the partnership agreement, sale deeds in respect of the aforesaid suit land were executed in the month of May, 2000 by the defendant no. 1 in favour of its own directors which are fraudulent, illegal and null and void.
12. It is further the case of the plaintif that the plaintif had incurred expenditure in obtaining various permissions from the concerned authorities and also incurred substantial expenditure in developing the land and raising boundary wall to a height of 8 feet and has made other investments of huge amounts in making the land fit for the construction of the five star hotel and service apartments. Accordingly, the defendants have no right to terminate the joint venture / partnership agreement. Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 8 of 42
13. The plaintif has prayed that a decree of declaration declaring that the plaintif is a partner in the aforesaid partnership/ Joint Venture / Project and that the plaintif being a partner has acquired right, title and interest in the partnership property i.e. the aforesaid 20 acres of land situated in village Rangpuri, Delhi and the plaintif is entitled to jointly develop the same and receive all benefits. The plaintif has further prayed that a decree of declaration declaring that the alleged forfeiture of the amount paid by the plaintif as alleged in the letter dated 15.05.2000 is void, wrongful, illegal and unenforceable. The plaintif has further prayed for a decree of declaration declaring that the two registered sale deeds dated 11.05.2000 purportedly executed on behalf of the defendant no. 1 in favour of the defendant no. 2 are void, bad in law and are liable to be cancelled. The plaintif has further prayed for a decree of permanent injunction restraining the defendants nos. 1 to 4 from dealing with and / or disposing of and/ or parting with the possession of Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 9 of 42 the suit land and/ or from creating any third party interest therein. The plaintif has further prayed for a decree of permanent injunction restraining the defendants nos. 1 to 4 from interfering with or disturbing the joint possession of the plaintif with the defendant no. 1, in respect of the suit land. The plaintif has further prayed for a decree of mandatory injunction directing the defendants nos. 1, 2 and 3 to sign the revised building plans and various other applications, documents, papers and afidavits which are necessary and required to be submitted for obtaining necessary permissions, sanctions / approvals for construction of a five star hotel / motel and service apartments on the aforesaid suit land from various competent authorities.
14. The defendants nos. 1 to 4 filed their written statement contended that the suit of the plaintif is barred under section 69 of the Partnership Act and is also barred by the provisions of sections 34, 38 and 41 of the Specific Relief Act.
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15. The defendants further pleaded that the defendants nos. 1 to 3 are the owners of agricultural land situated at Rangpuri, Delhi which was earmarked for the purpose of construction of service apartments and hotel. The defendant no. 1 submitted a project proposal to the concerned authority for approval of their project, which was approved. The defendant no. 1 thereafter entered into a Memorandum of Understanding dated 25.06.1996 with the plaintif as the project included huge investment and the plaintif had represented that he has suficient funds to invest in the said project and he was running various companies. However, as the plaintif was not sure as to from which of his companies he shall invest money in the project the space for incorporating the name of the said company was left blank in the said MOU.
16. The defendants further pleaded that it was further agreed that the plaintif shall obtain clearance from the concerned authorities for the construction of the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 11 of 42 proposed service apartment and hotel within 30 days. It was also agreed that an amount of Rs. Two Crores will be given to the defendant no. 1 as advance at the time of signing of the MOU for construction of the service apartments and Rs. Five crores will be given as advance security when the final approval is received from all concerned departments.
17. The defendants further pleaded that in view of the MOU dated 25.06.1996 the plaintif was under an obligation to advance Rs. Two Crores to the defendant no.
1. It is further averred that on 27.06.1996 the plaintif handed over five cheques to the defendants out of which three cheques were for Rs. 50 Lacs each, one cheque was for Rs. 30 Lacs and one cheque was for Rs. 21 Lacs. The said cheques were purported to have been issued by the defendant no. 5 and it was represented that the defendant no. 5 is the company of the plaintif only. However, the said cheques were dishonoured on presentation but one cheque of Rs. 30 lacs and another cheque of Rs. 21 Lacs were Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 12 of 42 subsequently cleared.
18. The defendants have further pleaded that in the meantime the plaintif approached the defendants and explained his inability to make funds available in terms of the MOU dated 25.06.1996 and further that he was unable to obtain the requisite permissions from the concerned authorities. The plaintif, however, represented that he is willing to participate in the project and as such the MOU was amended and amended MOU was executed on 08.07.1997. It was agreed that the plaintif will pay Rs. One Crore as advance out of which Rs. 51 Lacs had already been paid through the aforesaid cheques and an amount of Rs. 49 Lacs was to be paid within 45 days of signing the amended MOU. Again in the said amendment also the space of the company from where the plaintif was to make the funds available was left blank on the request of the plaintif.
19. The defendants further pleaded that the plaintif Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 13 of 42 was not able to perform his obligations and pursuant to his request agreement dated 30.08.1997 was executed and it was represented that the plaintif shall arrange funds in his individual capacity. The parties thereafter entered into a supplementary agreement dated 26.12.1997 whereunder the terms and conditions of the earlier MOU between the parties were further modified / amended.
20. The defendants have further pleaded that since the plaintif failed to make the payment of the balance amount of Rs. 49 Lacs, the defendant no. 1 vide various letter dated 05.07.1998, 02.12.1998 and 17.12.1998 called upon the plaintif to perform his obligations under the aforesaid MOUs. Thereafter, vide letter 23.03.1999 the defendant no. 1 informed the plaintif that since the plaintif has not been able to perform his part of the agreement therefore the agreement will be terminated and the amount of Rs. 51 Lacs shall be forfeited. The plaintif consented to the termination of the agreement vide letter dated 28.12.1999.
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21. The defendants further pleaded that the defendant no. 1 afterwards got permission for construction of the Motel and for efective implementation of the said project the defendant no. 1 transferred the suit land in favour of the defendant no. 2.
22. The defendants further pleaded that afterwards it came to the knowledge of the defendants nos. 1 to 3 that the defendant no. 5 had filed a false and frivolous suit against the defendant no. 1 in the Hon'ble High Court of Calcutta and on inspection of the file it was revealed that the defendant no. 5 had got an ex parte order by forging the signatures of the defendant no. 3 on alleged letter dated 29.06.1996, purportedly signed by the defendant no. 3 on behalf of the defendant no. 1. The interim order was afterwards vacated with a direction to furnish Bank Guarantee of Rs. 51 Lacs. The defendants further pleaded that an amount of Rs. 51 Lacs was paid to the defendant no. 1 through cheques given by the plaintif but the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 15 of 42 cheques were issued by the defendant no. 5. The recovery suit filed by the defendant no. 5 before the Hon'ble High Court of Calcutta pertains to the recovery of the said amount of Rs. 51 Lacs only, which was paid purportedly on behalf of the plaintif, hence the plaintif cannot take benefit of the said amount.
23. The defendants further pleaded that the agreements between the plaintif and the defendant no. 1 do not create any right, title or interest in favour of the plaintif in respect of the suit land. The defendants denied the existence of any joint venture/ partnership. The defendants denied that the plaintif had procured any approval from any authority. The defendants further pleaded that the plaintif had failed to perform his obligations under the MOUs. The defendants further pleaded that the contract was rightly cancelled and the amount of Rs. 51 Lacs was rightly forfeited. The defendants denied that the plaintif is entitled to the reliefs claimed. The defendants prayed for dismissal of the suit. Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 16 of 42
24. Plaintif filed replication to the written statement of the defendants nos. 1 to 4 and denied the averments made by the defendants and simultaneously reiterated and reafirmed the contents of the plaint.
25. On the basis of the pleadings of the parties the following issues were framed vide order dated 13.07.2007:
(1) Whether the suit of the plaintif is incompetent and hit by Section 34 of the Specific Relief Act in respect of character or right in the suit property, if any, in the plaintif? OPD.
(2) Whether relief of injunction as claimed for, is hit by section 38 and 41 and other relevant provisions of the Specific Relief Act? OPD.
(3) Whether the suit of the plaintif is hit by principles of res judicata in view of the pendency of the suit between defendant and defendant no. 5 in the honorable High Court Calcutta vide Suit No. 303 / 99.
Suit No. 12035/2016
Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 17 of 42
(4) Whether agreements / Memorandum of understanding dated 25 June 1996, 30th August 1997 and 26 December 1997 were the partnership agreements between plaintif and defendant no. 1 to 4, if so, its efect? OPP.
(5) Whether for forfeiture of amount of Rs. 51 lacs by defendant no. 1 to 4 plaid by the plaintif is void, wrongful, illegal and unenforceable? OPP. (6) Whether sale of the part of the suit property by defendant no. 1 in favour of the defendant no. 1 vide two registered sale deeds dated 11th May 2000 is void, lead in law and liable to be cancelled? OPP.
(7) Whether plaintif is in joint possession of the suit property measuring 20 acres of land being the partnership assets of the joint venture?
(8) Relief
26. In order to prove his case the plaintif examined himself as PW1. He deposed on the lines of his plaint. He relied upon the following documents: MOU dated Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 18 of 42 25.06.1996 which is Ex. P-1; letter / document dated 08.07.1997 which is Ex. P-2; agreement dated 30.08.1997 which is Ex. P-3, supplementary MOU dated 26.12.1996 which is Ex. P-4; copy of the plaint of suit no. 303/1999 filed before the Hon'ble High Court of Calcutta which is Ex. PW1/4; Copy of letter dated 15.05.2000 which is Ex. P-5; copy of letter dated 10.05.2000 which is Ex. P-4A; ofice copy of letter dated 23.05.2000 which is Ex. PW1/8; letter dated 02.02.2000 of DDA which is Ex. P-6; Ex. P-7 is the plot area details of the Sartaj Hotels Apartments and Vilas Private Limited; Ex. P-8 is the copy of Khasra girdawri of the year 1998-99 of village Rangpuri, New Delhi, Ex. P-9 is the site plan annexed with the khasra Girdawri; Ex. P-10 is the copy of sale deed dated 11.05.2000 executed by M/s Sartaj Hotel Apartment & Villas Private Limited in favour of S. Inderjeet Singh, Ex. P-11 is the form annexed with the sale deed for the purpose of registration of the sale deed Ex. P-10; Ex. P-12 is copy of another sale deed dated 11.05.2000 executed by M/s Sartaj Hotel Apartment & Villas Private Limited in favour of S. Inderjeet Singh. Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 19 of 42
27. Plaintif has further examined Shri Satish Kumar, UDC, Ministry of Urban Development, Nirman Bhawan, New Delhi as PW2. He produced the attested copy of the notification no. K-13011/1/9-DDIB dated 01.01.1993 which is Ex.PW2/1; attested copy of the notification no. K- 11011/1/78-DDIA/VI/IB dated 13.01.1999 which is Ex.PW2/2; attested copy of the notification no. K- 20013/10/91-DDIB dated 16/3 November 1994 which is Ex.PW2/3. Plaintif has further examined Shri S.K. Arora, UDC, Master Plan Section, DDA, Vikas Minar, Delhi as PW3. He produced the certified copy of the notification no. F.20(4)83.MP-vol.II/765 dated 24.05.1999 which is Ex.PW3/1; certified copy of the notification no. F.10.(21)84- MP.Pt.1/123 dated 02.02.2000 which is Ex.PW3/2; certified copy of the notification no. F.No.20(4)83-MP dated 16.05.1995 which is Ex.PW3/3. Plaintif has further examined Shri Dinesh Sarda, a Chartered Accountant, as PW4 to prove that the plaintif had incurred expenditure in pursuance of the MOUs.
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28. As against this the defendants examined Sh. Raghubir Singh, Director of the defendant no. 1 company, as DW1. He deposed on the lines of the written statement. He relied upon the copies of return slips and the cheques for Rs. 50 Lacs each which are Mark A to Mark G; letters dated 05.07.1998, 02.12.1998 and 17.12.1998 which are Mark H, I and J; letter dated 23.03.1999 which is Mark K; letter dated 29.06.1996 which is already Mark Y and copy of the order dated 03.03.2008 passed by the Hon'ble High Court of Delhi in FAO NO. 464/2007 which is Ex. DW1/1.
29. I have heard the Ld. Counsel for the parties and have given due consideration to their rival contentions and carefully perused the record. My issue-wise findings are as under:
Issues nos. 1, 2, 4 and 5 (1) Whether the suit of the plaintiff is incompetent and hit by Section 34 of the Specific Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 21 of 42
Relief Act in respect of character or right in the suit property, if any, in the plaintiff? OPD.
(2) Whether relief of injunction as claimed for, is hit by section 38 and 41 and other relevant provisions of the Specific Relief Act? OPD.
(4) Whether agreements / Memorandum of understanding dated 25 June 1996, 30th August 1997 and 26 December 1997 were the partnership agreements between plaintiff and defendant no. 1 to 4, if so, its effect? OPP.
(5) Whether for forfeiture of amount of Rs. 51 lacs by defendant no. 1 to 4 plaid by the plaintiff is void, wrongful, illegal and unenforceable? OPP.
30. In the judgment titled as Harish Mansukhani v. Ashok Jain reported as 2009 (109) DRJ 126 (DB) the Hon'ble High Court of Delhi has held:
"....23. A plaintif has to prove his case and stand on his own legs. No doubt, the defendant did not produce his books of account but that does not mean that the plaintif Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 22 of 42 must succeed on said account....."
31. In the judgment titled as Devender Bhati vs Chander Kanta, 2015 SCC OnLine Del 14224 the Hon'ble High Court of Delhi further observed:
"......In Harish Mansukhani (supra), the Division Bench noticed that the plaintif has to prove his case and had to stand on his own legs. Similarly, in Ganpatlal (supra), the Madhya Pradesh High Court took note of the elementary rule of civil litigation in this country that the plaintif must stand or fall on the strength of his own case...."
32. Thus the case of the plaintif is to be analyzed in light of the aforesaid elementary legal proposition.
33. The plaintif claims that the plaintif entered into an agreement of partnership/ MOU dated 25.06.1996 with the defendant no. 1. The said MOU is Ex. P1. Thereafter a document dated 08.07.1997 embodying certain amendments to the MOU was executed between the parties Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 23 of 42 which is Ex. P2 which was followed by an agreement dated 30.08.1997 between the plaintif and the defendant no. 1, which is Ex. P3. Thereafter, a supplementary MOU dated 26.12.1997 was executed between the parties. The same is Ex. P4. The plaintif has contended that under the said MOUs a partnership was created between the plaintif, the defendant no. 1 and the defendant no. 4 and the land measuring 20 acres situated at Village Rangpuri, Delhi, belonging to the defendant no. 1 company, was brought in as partnership property and the same was to be developed and a hotel and service apartments were to be constructed thereupon and the profits were to be shared in the ratio 40:40:20 between the plaintif, the defendant no. 1 and the defendant no. 4. The plaintif has further claimed that he had paid an amount of Rs. 51 lacs in terms of the MOUs to the defendant no. 1 and was ready and willing to perform his part of the contract but the defendant no. 1 to 4 failed to fulfill their obligations under the MOUs. PW 1 has deposed in this respect.
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34. In so far as the payment of Rs. 51 Lacs is concerned, the contention of the plaintif is that he had paid a sum of Rs. 51 Lacs to the defendant no. 1. On the other hand DW1 had categorically stated in his evidence afidavit that the defendant no. 1 had received only a sum of Rs. 51 Lacs vide two cheques of Rs. 30 Lacs and Rs. 21 Lacs issued by the defendant no. 5 and the plaintif had represented that the defendant no. 5 is the company of the plaintif only. The address of the plaintif mentioned in the agreement Ex. P3 and the address of the defendant no. 5 were also the same. The defendant no. 1 has contended that apart from the said amount of Rs. 51 Lacs no other amount was received from the plaintif.
35. Now the plaintif has contended that he had made another separate payment of Rs. 51 Lacs in cash to the defendant no. 1 vide receipt dated 01.07.1996. Copy of the said receipt is Mark PX-1 which is purportedly signed by the defendant no. 4. The plaintif has contended that the same was signed by the defendant no. 4 on behalf of the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 25 of 42 defendant no. 1 company.
36. First of all the said receipt Mark PX-1 has not been properly proved and has not been exhibited also and therefore the same cannot be read in evidence. Further a perusal of the said receipt reveals that the alleged payment has been said to have been made by Sh. Sushil Kumar Somani authorized on behalf of Sh. Lalrivenga to pay on account of the plaintif the amount of Rs. 51 Lacs and the receipt is allegedly signed by the defendant no. 4 on behalf of the defendant no. 1 company.
37. However, it was never stated in the plaint that such an amount of Rs. 51 Lacs was paid in cash by Sh. Sushil Kumar Somani authorized on behalf of Sh. Lalrivenga to pay on account of the plaintif. It was not stated in the plaint that any receipt dated 01.07.1996, signed by the defendant no. 4 on behalf of the defendant no. 1 company, was issued in respect of this cash payment of Rs. 51 Lacs. There is no reference to the alleged receipt Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 26 of 42 Mark PX1 in the plaint nor the same was filed along with the plaint. Therefore, the evidence on this point being beyond pleadings cannot be taken into account.
38. Thus the plaintif has not been able to establish the alleged cash payment of Rs. 51 Lacs. The alleged receipt Mark PX1 has not been properly proved. DW 1 has denied the said receipt in his cross examination. The source of funds has not been properly proved. It is dificult to believe the payment of such a huge amount of cash without proof of source of funds. Sh. Sushil Kumar Somani or Sh. Lalrivenga have also not been examined as witnesses in the present case. The alleged does not bear the seal of the defendant no. 1 company.
39. Further during the entire proceedings the plaintif has remained evasive as to the alleged payment of Rs. 51 Lacs allegedly made by the plaintif. While the defendants have been very specific and have stated that the amount of Rs. 51 Lacs, was received by the defendant no. 1 Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 27 of 42 through the cheques issued by the defendant no. 5. It is further seen that when PW 1 was cross examined in this respect he gave the following answers in his response to the questions put by the counsel for the defendants :
"...Q39. When did you pay Rs. 51 Lacs to the defendants nos. 1 to 4 as alleged by you?
A. I don't remember the date. Vol. The amount is admitted by them Q41: Do you remember by what mode you have paid the alleged amount of Rs. 51 Lacs?
A: I do not remember.
Q59: Whether you have any receipt of any kind of acknowledgment from the defendants no. 1 to 4 for the alleged amount of Rs. 51 Lacs made by you?
A: I cannot say right now.
Q60: I put to you that since you did not make any payment to the defendant no. 1 to 4 therefore you do not have any receipt or acknowledgement from them?
A: This is incorrect. Amount is already admitted. Q61: Have you shown the amount of Rs.51 Lacs in your Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 28 of 42 ITR or profit and loss account?
A: I do not remember. I paid the said amount through my sources.
Q62: Can you tell the source from where you arranged the alleged payment of Rs. 51 Lacs?
A: I do not remember...."
40. Thus the aforesaid answers clearly demolish the subsequently created story of the plaintif with respect to alleged cash payment of Rs. 51 Lacs vide alleged receipt Mark PX1. The plaintif has therefore failed to establish that any cash payment of Rs. 51 Lacs was made by the plaintif to the defendant no.1. The plaintif during the course of entire proceedings before the court has remained evasive with respect to the fact that as to how the payment of Rs. 51 Lacs was made and accordingly adverse inference ought to be drawn against the plaintif on that point.
41. The defendant no. 5 has already filed a suit for recovery of the said amount of Rs. 51 Lacs, paid to the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 29 of 42 defendant no. 1 vide cheques issued by the defendant no. 5. Thus the said amount cannot be taken as the payment made on behalf of the plaintif. The necessary concomitant is that the plaintif has failed to establish that any payment of Rs. 51 Lacs was made by him or on his behalf to the defendant no. 1.
42. The question which is now to be answered is as to whether the agreements/ MOUs Ex. P1, Ex. P2, Ex. P3 and Ex. P4 result in creation of a partnership between the parties and the suit property was brought in the said partnership as partnership property.
43. Now section 4 of the Partnership Act provides that Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Further section 6 of the Partnership Act provides that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 30 of 42 relation between the parties, as shown by all relevant facts taken together. Further Explanation 2 to section 6 of the Partnership Act clarifies that the receipt by a person of a share of the profits of a business, or of a payment contingent upon the earning of profits or varying with the profits earned by a business, does not of itself make him a partner with the persons carrying on the business. Thus the most important aspect to be considered is as to whether each partner is acting as agent of all while the business is carried on by all or any of them acting for all. However, the true test is as to what was the intention of the parties.
44. However, where the agreement to create partnership is conditional, contingent or executory in nature and the terms of the contract are not complied with, it cannot be said that a partnership has come into existence. In other words if the intention of the parties is to the efect that no partnership is to be created in praesenti and a partnership would come into existence on a future date on fulfillment of certain conditions then it cannot be Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 31 of 42 said that a partnership has come into existence. Further the expression "business carried on" in section 4 of the Partnership Act shows that unless the business is commenced the partnership does not come into existence. The judgments (1983) 23 DLT 20, (1967) 3 DLT 67 and AIR 1966 SC 1300 cited by the Ld. Counsel for the plaintif are not applicable to the facts and circumstances of the present case as they do not deal with such a factual scenario.
45. A perusal of the record reveals that it has been clearly mentioned in the MOU dated 25.06.1996 which is Ex. P1, that the second party (plaintif) will be liable to pay the value of the land to the first party (defendant no. 1) to become a full-fledged partner as per ratio [Clause 3]. The price of land was also fixed. This clearly shows that the creation of the partnership was contingent on payment of the proportionate value of the land by the plaintif. Thus the MOUs constitute only an agreement to form a partnership subsequently on fulfillment of certain terms and conditions and on commencement of business on a future date. The Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 32 of 42 plaintif never paid the proportionate value of the land nor ever ofered to pay the same and therefore the inevitable conclusion is that the partnership never came into existence and the plaintif never became a partner in the proposed partnership. The claim of the plaintif is liable to be rejected on this ground alone.
46. Further, as per the document Ex. P2, agreement Ex. P3 and supplementary MOU Ex. P4 the plaintif was supposed to pay an amount of Rs 1 crore in advance. The defendants had contended that out of this amount Rs. Fifty One Lacs was paid through the cheques of the defendant no. 5. I have already held that the said amount has not been established to have been paid on behalf of the plaintif and moreover the defendant no. 5 has filed a suit for recovery of the same and hence the plaintif cannot derive any benefit of the said amount. The plaintif has not been able to establish the payment of any other amount of Rs. 51 Lacs. Be that as it may admittedly the balance amount of Rs. 49 Lacs which was to be paid before 03.04.1998 was Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 33 of 42 never paid. Further as per the supplementary MOU Ex. P4 the plaintif was supposed to obtain the necessary approvals so that the resort could be started within 5 months. No evidence has been led by the plaintif to show that he had got the necessary approvals so that the resort could be started within 5 months. Express time limits have been stipulated in the MOU Ex. P4. The land was owned by the defendant no. 1 solely and the defendant no. 1 cannot be made to wait indefinitely on account of lapses on the part of the plaintif. Further the cost of construction and execution of the project is bound to increase considerably with time. Keeping in mind the subject matter of the MOUs and the surrounding facts and circumstances the reasonable conclusion is that time was the essence of the contract. At any rate it is not the case of the plaintif that within a reasonable time after expiry of the stipulated time limits he paid the amount or complied with the terms and conditions stipulated in the MOUs. The judgments cited by the Ld. Counsel for the plaintif reported as 1967 (1) SCR 227 and AIR 1979 SC 720 are not applicable to the facts Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 34 of 42 and circumstances of the present case as they did not deal with a case of an agreement to commence a joint venture of such a nature, as in the present suit, on land owned by one party only.
47. Thus, first of all the MOUs were conditional in as much as the plaintif was first of all supposed to make the payment of Rupees One Crore in advance to the defendant no. 1. Since the said amount was not paid no partnership can be said to have come into existence. The contract was executory in nature and no full-fledged partnership came into existence immediately on execution of the MOUs. That is why the MOUs are not labelled as a partnership deeds. Moreover on the date of execution of MOUs the partnership business did not commence nor the date of commencement of the alleged partnership business is mentioned in the said agreements. The partnership business never actually commenced as neither the amount of Rs. One Crore was paid by the plaintif nor the proportionate value of the land was paid by the plaintif nor Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 35 of 42 the plaintif performed his obligations under the agreement nor the actual construction of the hotel or service apartments on the suit land with the joint eforts of the parties commenced. The parties never started acting as agents of the proposed partnership and other partners.
48. Thus the result is that the material on record shows that the execution of the MOUs did not result in creation of a partnership in praesenti nor the parties intended to create any partnership immediately on execution of the MOUs. The plaintif has adduced no cogent and viable evidence to show that he had incurred any expenditure as claimed or had got any approvals. PW 1 or PW 4 have not been able to produce any evidence of any expenditure or any accounts in this respect. Plaintif has also not been able to produce any cogent, viable and independent evidence to show that he had actually secured the permissions from any authorities. The agreement therefore stood cancelled on account of failure of the plaintif to perform his part of the contract. The plaintif Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 36 of 42 therefore cannot be said to be a partner with the defendant no. 1 and the defendant no. 4 in the proposed business. Hence the plaintif is not entitled to the declaration claimed in this respect.
49. Thus no partnership was created between the plaintif and the defendant no. 1 and the defendant no. 4 immediately on execution of the MOUs. Therefore no question of the suit land measuring 20 acres at Rangpuri, Delhi being invested with the character of partnership property arises. Secondly the suit land would have been considered to have been brought in as partnership property only when the plaintif would have paid the proportionate value of the land and become a full-fledged partner after complying with the terms and conditions of the MOUs. Ex. P1, Ex. P2, Ex. P3 and Ex. P4 and after the commencement of business by the partnership firm i.e. on commencement of construction over the suit land. But nothing of this sort took place, the suit land cannot be treated as partnership property. Hence, the plaintif is not entitled to the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 37 of 42 declaration or mandatory injunction claimed in this respect.
50. In so far as the question of forfeiture of Rs. 51 Lacs is concerned I have already held that the plaintif has not been able to establish that he had paid an amount of Rs. 51 Lacs in cash to the defendant no. 1. I have also held that the amount of Rs. 51 Lacs which was referred to by the defendant no. 1 was in fact paid by the defendant no. 5. Nothing has been established by the plaintif to show that the amount paid by the defendant no. 5 was authorized in writing by the defendant no. 5 to be appropriated towards the amount payable by the plaintif under the MOUs. At any rate the defendant no. 5 has already filed a suit for recovery of the said amount of Rs. 51 Lacs. Hence, the plaintif has no authority to claim any relief qua the said amount. Hence the plaintif is not entitled to any declaration in respect of the alleged amount of Rs. 51 Lacs since he has failed to establish payment of the same to the defendant no. 1.
Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 38 of 42
51. But as far as the legal issues are concerned it has not been established by the plaintif that the suit is barred under section 34 of the Specific Relief Act or under section 38 and 41 of the Specific Relief Act. My Ld. predecessor had already held that a suit for Declaration simplicitor that the plaintif is a partner in the partnership firm is maintainable in view of the judgment titled as Mukund Bakrishna Kulkarni v. Kulkarni Power Metallurgical Industries, (2004) 13 SCC 750. This was also afirmed by the Hon'ble High Court of Delhi vide order dated 16.11.2009 in CRP No. 101/2007. However, otherwise on merits I have held that the plaintif is not entitled to the Declarations and Injunctions claimed.
52. These issues are therefore decided in favour of the defendants nos. 1 to 3 and against the plaintif. Issues nos. 6 and 7 (6) Whether sale of the part of the suit property by defendant no. 1 in favour of the defendant no. 1 Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 39 of 42
vide two registered sale deeds dated 11th May 2000 is void, lead in law and liable to be cancelled? OPP. (7) Whether plaintiff is in joint possession of the suit property measuring 20 acres of land being the partnership assets of the joint venture?
53. I have already held that the suit land cannot be treated as partnership property. Accordingly the plaintif has no right, title or interest in the suit land and the defendant no. 1 continued to be the sole owner of the suit land. No cogent and viable evidence has been led by the plaintif to show that he is in joint possession of the suit land. Moreover since the suit land is vacant land therefore its possession would follow title. The plaintif has failed to establish any right, title or interest therein therefore the plaintif cannot be said to be in possession of the same. Therefore the necessary concomitant is that the sale of the suit land vide sale deeds dated 11.05.2000 executed by the defendant no. 1 cannot be said to be null and void. The Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 40 of 42 plaintif has no right to restrain the defendant no. 1 or its transferees from dealing with the suit land.
54. These issues are therefore decided in favour of the defendants nos. 1 to 3 and against the plaintif. Issue no. 3 (3) Whether the suit of the plaintiff is hit by principles of res judicata in view of the pendency of the suit between defendant and defendant no. 5 in the honorable High Court Calcutta vide suit No. 303 / 99.
55. The present suit cannot be said to be barred by the principle of res judicata since the present plaintif was not a party to the previous suit no. 303 / 99 filed by the defendant no. 5 against the defendant no. 1 before the Hon'ble High Court of Calcutta. The subject matter of the said previous suit was limited while the subject matter of the present suit is much wider. Moreover it has not been established that the previous suit has been decided and the Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 41 of 42 said decision has attained finality. Hence, this issue is decided in favour of the plaintif and against the defendants.
RELIEF
56. The plaintif has therefore failed to establish that he is entitled to the relief claimed. Accordingly, the suit of the plaintif is dismissed. Parties are left to bear their own costs. Decree Sheet be accordingly prepared. File be consigned to Record Room thereafter.
Digitally signed by
SAURABH SAURABH KULSHRESHTHA
KULSHRESHTHA Date: 2018.06.13 16:13:52
+0530
Announced in the open (Dr. Saurabh Kulshreshtha)
Court on 08.06.2018 Additional District & Sessions
Judge, Patiala House Courts, Delhi.
Note : This judgment has been passed in view of
the transfer order no. 53/DHC/Gaz./G-1/VI.E.2(a)/2018 dated 04.06.2018 of the Hon'ble High Court of Delhi. Suit No. 12035/2016 Govind Sarda v. M/s Sartaj Hotles Apartment & Villas Private Limited. Page No. 42 of 42