Delhi High Court
M/S. Vidhi Constructions Pvt. Ltd. vs Smt. Baljit Kaur And Others on 30 March, 2001
Equivalent citations: 91(2001)DLT730, 2001 A I H C 2619, (2001) 91 DLT 730 (2001) 3 PUN LR 42, (2001) 3 PUN LR 42
Author: Mukul Mudgal
Bench: Mukul Mudgal
ORDER Devinder Gupta, J.
1. The appellant feeling aggrieved against dismissal of its application (IA.10720/2000) whereby it sought impleadment as a defendant in a suit, has preferred this appeal against the order passed by learned Single Judge on 18.12.2000. Appellant has also felt aggrieved by non-consideration of the prayer for vacation of ex-parte injunction made in IA.10721/2000 and has consequently prayed for vacation of ad-interim order of injunction dated 28.9.2000 passed in IA.10043/2000.
2. Facts as are relevant for the purpose of disposal of the appeal in brief are that on 26.9.2000 Suit No.2205/2000 was filed by respondent Baljit Kaur against Ajit Singh and Harish Kaur ( the other two respondents in this appeal). In the said suit, plaintiff Baljit Kaur claimed a preliminary decree for partition of property, namely, House No.D6/4, Vasant Vihar, New Delhi by declaring respective shares of the parties in the said property and on determination of shares to pass a final decree as regards her 1/3rd share. The suit was filed, inter alia, alleging that late S. Joginder Singh, the father of the parties was the sole owner of the suit property standing on land admeasuring 400 sq. yards, it was single storey residential building and was self acquired property of S. Joginder Singh, who passed away on 8.6.1987 leaving behind Smt. Harjit Kaur (widow), Ajit Singh (son) and Baljit Kaur and Harish Kaur (daughters). During his life time, S. Joginder Singh had executed a registered will whereby he gave life estate in the suit property to his wife Smt. Harjit Kaur in lieu of her existing right of maintenance and residence. The will stipulates that after her demise, the property shall vest absolutely in favor of his son Ajit Singh. It is alleged that Smt.Harjit Kaur passed away on 24.8.1994. Therefore, as per the provisions of sub-section (1) of Section 14 of the Hindu Succession Act (hereinafter referred to as "the Act"), Smt.Harjit kaur became full and absolute owner and on her demise, the suit property devolved upon the son and the two daughters of S.Joginder Singh. The plaintiff alleged that she was married and was residing in her matrimonial home at Chandigarh but continued to occupy a part of the property owned by S.Joginder Singh. On 5.9.2000 when she along with her family members came to Delhi and went to the suit premises she found that Ajit Singh had shifted from the suit premises to another premises and also learnt that he had entered into an agreement with some contractors/builders in respect of the suit property. The single storeyed house had been demolished to be rebuilt. Faced with this situation she contacted Ajit Singh at his new address and protested about demolition of the property. Ajit Singh refused to accept the plaintiff to be a co-owner. Thereafter she learnt that a fraud has been played by Ajit Singh by getting the property mutated in his exclusive name. It is further alleged that on the basis of the will dated 14.6.1983 full rights of ownership could not be conferred on Ajit Singh alone. Irrespective of the mutation, property was jointly owned by Ajit singh, Baljit Kaur and Harish Kaur. Ajit Singh had only one third share in the suit property and he alone could not have entered into collaboration agreement or any other agreement with a third party in respect of the suit property, nor could he could demolish or re-build the same to the detriment of her rights. With malafide intention Ajit Singh was attempting to usurp the entire property including her share.
3. On the basis of the aforementioned allegations made in the plaint decree has been prayed for partition of property. Along with the suit an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure was also filed. An ex-parte order of injunction was passed by learned Single Judge on 28.9.2000 restraining the two defendants (respondents 2 and 3) from selling, transferring, alienating, encumbering or creating third party interest or parting with possession of the suit property to the extent of the alleged 1/3rd share of the plaintiff. On the same day Local Commissioner was also appointed to ascertain the status of the construction being carried out at D-6/4, Vasant Vihar, New Delhi.
4. The suit is contested by respondents 2 and 3 on a number of grounds. They have challenged plaintiff's right to claim partition of the property alleging that suit is not maintainable; and the case is fully covered by the provisions of sub-section (2) of Section 14 of the Act. Smt.Harjit Kaur enjoyed restricted rights in the property for her life time. She did not become absolute owner. Sub-section (1) of Section 14 of the Act is not applicable to the facts and circumstances of the case. It is alleged that the plaintiff was fully aware of the will and the intention of the deceased father. Before making the Will decased father had fully discussed the matter with his three children that the property is to be given exclusively to Ajit Singh his son, since the daughters had already been got married and were living happily in their matrimonial homes. Suit property stood duly mutated in the records of Delhi Development Authority in the name of respondent No.1 and he had every right to deal with the same. In exercise of his rights he had entered into property development/collaboration agreement with the appellant, which agreement was duly executed on 5.4.2000. Under the collaboration agreement the appellant was to construct and develop the property in question and as per the terms of the agreement, a sum of Rs.85 lacs had been deposited with defendant No.1. As per the terms of agreement, the entire basement and the entire ground floor with one servant quarter and common toilet in the building and one car parking in the drive way along with front lawns and rear court-yard on the ground floor of the newly constructed building forms part of the share of defendant No.1. The remaining portion of the property i.e. entire first floor and second floor along with the rights in the terrace above second floor, after leaving the area of the servant block and water tank etc., two car parkings in the drive way along with proportionate undivided rights in the land underneath in the new building has fallen in the share of the builder/developer. In the month of April, 2000 itself, the builder had demolished the old structure and commenced construction of a new building. The building including civil works was already complete. It was at finishing stage only. Thus denying the rights of the plaintiff to the suit property, it was alleged that the suit was malafide. Respondents 2 and 3 on 9.10.2000 also applied for vacation of the ex-parte ad-interim injunction by moving IA.10551/2000.
5. On 10.10.2000 an application (IA.10720/2000) was filed by the appellant seeking its impleadment as a party to the suit, inter alia, alleging that being a Developer engaged in executing building construction contracts it, had entered into a Collaboration agreement on 5.4.2000 with respondent No.2. Pursuant to the agreement a sum of Rs.85,00,000/- had been paid to S.Ajit Singh, respondent No.2 and under the said agreement it had been agreed that after developing the entire basement floor and the entire ground floor (with some other areas, as detailed above) shall fall to the share of S.Ajit Singh and the remaining portions of the building, namely, first and second floor (with other areas as detailed above) shall go to the appellant; Old structure was demolished and construction activity was commenced. With untiring efforts of the appellant, permission under the provisions of Income Tax had been obtained. Other necessary sanctions/permissions were also obtained. The lease hold rights had been got converted into free hold rights. Conveyance deed had also been executed by Delhi Development Authority in favor of S.Ajit Singh. Over and above an amount of Rs.85,00,000/- had already been paid to S.Ajit Singh. Besides this the appellant had spent an amount to the extent of Rs.25,00,000/- to Rs.30,00,000/- on the entire project. Having invested an amount in excess of Rupees one crore and it being a commercial venture the appellant necessarily has to sell in the market the portion fallen to its share. The plaintiff/respondent No.1 with malafide intent had obtained an ex-parte order of injunction. The appellant further alleged that he entered into collaboration agreement bonafide believing respondent No.2 to be the sole owner. Suit was malafide. Respondent No.1 had waited for number of years after the death of her father and had been watching the appellant investing huge amount in the property and had filed suit only be black mail and pressurise the appellant. Since interests of the appellant were vitally effected and he was in possession of the property, in order to safe guard his interest, it was necessary and desirable to implead him as party to the suit.
6. This application was vehemently opposed by respondent No.1 on the ground that the appellant was neither a necessary nor proper party to the suit. He has no interest in the property, therefore, he cannot be permitted to be imp leaded as the party to the suit.
7. The appellant also filed an application (IA.10721/2000) under order 39 Rule 4 of the Code of Civil Procedure seeking vacation of the ex-parte order of injunction.
8. On 17.10.2000 notice of these applications was given to the parties to the suit. Notice was duly served and replies were filed but applications could not be taken up by learned Single Judge for consideration till 18.12.2000. On 18.12.2000 application for impleadment was dismissed observing:-
"The main suit is a suit for partition. I do not see how a third party such as the applicant who claims to be builder is either a necessary or a property party."
9. Though the application of the appellant seeking impleadment was dismissed, his application seeking vacation of the ex-parte order of injunction was kept alive and was adjourned to 18.4.2001 for being decided along with the plaintiff's (respondent No.1) application under Order 39 Rules 1 and 2 C.P.C. and the application of respondents 2 and 3 seeking vacation of ex-parte order of injunction. On the appellant's application learned Single Judge observed:-
"Since the rights of the applicant are likely to be affected by the order passed in the application filed by the plaintiff under Order 39 Rules 1 and 2 of the C.P.C., liberty is granted to the applicant to address arguments."
10. We heard learned counsel for the parties at great length and were taken through the entire record.
11. Learned counsel for the appellant urged that the appellant had bonafide entered into a collaboration agreement. Possession of the property was delivered to it. Pursuant to the collaboration agreement, the then existing property was demolished and now a new construction has come on the spot. In this construction he has an interest. By virtue of the agreement, first and second floor are with the appellant whereas basement and ground floor are with respondent No.2. Considerable amount has already been paid to respondent No.2. There was no justification in rejecting his application especially when learned Single Judge in the same order concluded that the rights of the appellant are likely to be effected. On the date of filing of the suit, the plaintiff was aware of the collaboration agreement and of the fact that the amount had been received by respondent No.2. In this background in order to safeguard the appellant's interest, it was necessary and desirable to order its impleadment. It was further urged that due to the continuance of the ex-parte order of injunction, the interest of the appellant was jeoparadised and a prayer was made by the appellant for vacation of the ex parte order of injunction. Learned Single Judge failed to take any prompt decision thereon and had adjourned the hearing to April, 2000. Therefore, in view of the decision of Supreme Court in C.A. No.5102/2000 ( A.Venkatasubhiah Naidu v. S.Chellappa and others) decided on 19.9.2000 the appeal is maintainable before a Division Bench.
12. Learned counsel for respondent 2 and 3 have fully supported and endorsed the submissions made by learned counsel for the appellant. It was also urged on behalf of respondents 2 and 3 that since respondent No.1 had admitted the existence of collaboration agreement, interest of respondent No.1, if any, can be fully safeguarded by passing an appropriate order of restraint for that part of the property, which as per the collaboration agreement has fallen to his (respondent No.2) share.
13. Learned counsel for respondent No.1 urged that the appellant being a builder was not a necessary party. At the most the appellant had commercial interest. In case the appellant is imp leaded as a party to the suit, the Court in a partition suit will necessarily have to go into the question of legality and validity of the builder's agreement, which would be outside the scope of a partition suit. By the agreement to sell, no interest in appellant's favor is created in the property. Therefore, the appellant had no interest in the property. Since the appellant was neither a necessary nor a proper party and had no interest in the property, the application had rightly been rejected.
14. Learned counsel for respondent No.1 also questioned the legality and validity of the order passed by learned Single Judge in IA.10721/2000, the appellant's application under Order 39 Rule 4 C.P.C., which learned Single Judge has adjourned to 18.4.2001. It was contended that on dismissal of the appellant's application seeking impleadment, this application ought to have been dismissed as not maintainable. Thus material irregularity was committed by learned Single Judge in keeping the application alive. It was further contended that since the widow of S.Joginder Singh became full owner of the property on the death of her husband, the property had rightly devolved upon respondent No.1 as one of the daughters. She being one of the co-owners was entitled to maintain a suit for partition. No interest could be created by any body pursuant to the collaboration agreement in respect of her share in the property.
15. We have given our due consideration to the respective submissions made at the bar and are of the view that the present appeal deserves to the allowed.
16. The question with respect to addition of parties in a suit under Order 1 Rule 10 C.P.C. has authoritatively been dealt with by Supreme Court in Razia Begum v. Sahebzadi Anwar Begum and others holding that in a suit relating to property, in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest, in the subject matter of the litigation. It was further held that where the subject matter of a litigation is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the court is of the opinion that by adding that party, it would be in a better position effectually and completely to adjudicate upon the controversy. The cases contemplated in the last proposition, have to be determined in accordance with the statutory provisions of Section 42 and 42 of the Specific Relief Act. It was further held that the result of a declaratory decree on the question of status affects not only the parties actually before the Court, but generations to come and in view of that consideration, the rule of present interest, as evolved by case law relating to disputes about property, does not apply with full force and the rule laid down in Section 43 of the Specific Relief Act is not exactly a rule of resjudicata. Following conclusions were arrived at by the Supreme Court in Razia Begums's case (supra), which have to be borne in mind by a Court while dealing with an application seeking impleadment:-
"1. That the question of addition of parties under R.10 of O.1 of the Code of Civil Procedure, is generally not one of initial jurisdiction of the Court, but of a judicial discretion which has to be exercised in view of all the facts and circumstances of a particular case; but in some cases, it may raise controversies as to the power of the court, in contradistinction to its inherent jurisdiction, or, in other words, of jurisdiction in the limited sense in which it is used in S.115 of the Code;
(2) That in a suit relating to property, in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest, in the subject matter of the litigation;
(3) Where the subject matter of a litigation, is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the court is of the opinion that by adding that party, it would be in a better position effectually and completely to adjudicate upon the controversy;
(4) The cases contemplated in the last proposition, have to be determined in accordance with the statutory provisions of Ss.42 and 32 of the Specific Relief Act;
(5) In cases covered by those statutory provisions, the court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the court has reasons to insist upon a clear proof apart from the admission;
(6) The result of a declaratory decree on the question of status, such as in controversy in the instant case, affects not only the parties actually before the Court, but generations to come, and in view of that consideration, the rule of 'present interest' as evolved by case law relating to disputes about property does not apply with full force; and (7) The rule laid down in S.43 of the Specific Relief Act is not exactly a rule of res judicata. It is narrower in one sense and wider in another."
17. The aforementioned principles have been reiterated in a number of decisions. The last decision brought to our notice is reported as Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay and another .
18. Learned Single Judge while dismissing the application has assigned only one reason that in a suit for partition a builder will not be a necessary party. We are of the view that on such a reasoning, which is not applicable to the facts and circumstances of the case, the application could not have been dismissed. The plaintiff is claiming partition of the estate left by S.Joginder Singh on the ground that a life interest was created by him in lieu of maintenance in favor of his wife, who by virtue of sub-section (1) of Section 14 of the Act became full owner and on the death of widow three children inherited the property. The said property was one storied house with a plot underneath which was a lease hold property. One fact, which cannot bedisputed is that the property, in the meantime, was got converted as free hold by Ajit Singh. Respondent No.2, who to the knowledge of respondent No.1 had entered into a collaboration agreement with the appellant. The appellant had paid considerable amount to respondent No.1 and in part performance of the said collaboration agreement the appellant was put in possession of the property, who demolished one storey building and has since raised a new structure thereupon, which structure admittedly has been raised with the help of the money spent by the appellant. The construction as one the date of filing of the suit was at the finishing stage. Only final finishing remains to be done and as per the collaboration agreement, the first floor and second floor are in occupation of the appellant. In the record of the Delhi Development Authority, the property stood mutated exclusively in the name of Ajit Singh, respondent No.2. In these circumstances, though the suit filed by plaintiff/respondent No.1 is for partition but in such a suit decree for declaration will be deemed to be included to the effect that she is the owner to the extent of 1/3rd share. Since declaration is implicit in such a suit with respect of her status in the property, therefore, it cannot be said that the appellant is not a necessary party in the suit. Grant of decree in favor of respondent No.1 is likely to affect the right of the appellant to hold portions of the newly constructed building, which has been construced with the aid of the appellant's money. Even on the ratio of the decision in Razia Begums's case (supra) it will be a case where the appellant will be deemed to be having an interest in the property. It is not case of an agreement to sell but the subject is a collaboration agreement, which was followed by delivery of possession to the appellant, pursuant to which construction has been raised by the appellant, who has occupied first and second floor of the building from which he cannot be dispossessed by respondent No.1.
19. In view of the above, we are of the view that learned Single Judge was not justified in rejecting the application. Application deserves to be allowed and the appellant deserves to be added as defendant No.3 in the suit. We order accordingly.
20. As a consequence of the above, respondent No.1 will supply complete copy of paper book to the appellant within a period of four weeks from today. Within a period of four weeks thereafter the appellant will file its written statement before learned Single Judge.
21. As regards the second application seeking vacation, we need not reiterate the facts stated above. Apparently, the appellant entered into a collaboration agreement knowing fully well that respondent No.2 was the exclusive owner of the property and pursuant thereto the appellant has spent considerable amount. Ajit singh, respondent No.2 has not disputed the appellant's status in the property and has fully endorsed the case of the appellant. Therefore, in so far as the portion of the property, which as per the collaboration agreement fell to the share of the appellant, injunction cannot be ought not to have been issued of continued. The interest of respondent No.1, if any, in case suit ultimately is decreed can be fully safeguarded by keeping in tact that portion of the property, which as per the collaboration agreement has fallen to the share of respondent No.2, to which effect a statement has also been made by learned counsel for respondent No.2 that no third party interest will be created thereupon and possession of the property will not be parted with. In these circumstances, the application of the appellant seeking vacation of injunction deserves to be allowed by vacating the ex-parte order of injunction with respect to the part of the property, which as per the collaboration agreement has fallen to the share of the appellant. Ordered accordingly. Injunction will continue to remain operative with respect to the basement and entire ground floor and other portion of the building, which as per the collaboration agreement have fallen to the share of respondent No.2 and that the same will not be parted with, alienated or transferred and no third party interest is created in favor of third person.
22. Appeal stands allowed.