M/S. Housing & Urban Development vs M/S. M S Shoes (East) Ltd on 18 July, 2014

[Cites 27, Cited by 0]

Delhi District Court

M/S. Housing & Urban Development vs M/S. M S Shoes (East) Ltd on 18 July, 2014

                                                1

    IN THE COURT OF MS. POONAM CHAUDHARY ADDITIONAL DISTRICT 
                 JUDGE03, SAKET COURT, NEW DELHI.  

RCA No. 10/2013

Unique ID No.  02406C0458652010

IN THE MATTER OF :

M/s. Housing & Urban Development
Corporation Ltd.,  HUDCO Bhawan,
Indian Habitat Centre,
Lodhi Raod, New Delhi110003                                                                     ...Appellant

                                                  Versus

  1. M/s. M S Shoes (East) Ltd.
     Through its Managing Director,
     Sh. Pawan Sachdeva,
     112A, Ekta Enclave,
     New Delhi

  2.  Union of India
     Through Secretary Ministry of
     Urban Affairs & Employment
     (Now known as Ministry of Urban 
     Development),Nirman Bhawan,
      New Delhi                                                                                   ...Respondents

DATE OF INSTITUTION                                              :    17.08.2010
DATE OF RESERVING FOR  JUDGMENT/ORDER                            :   15.07.2014
DATE OF PRONOUNCEMENT                                            :   18.07.2014




                                    JUDGMENT/ORDER

  1. By   way   of   the   present   appeal   appellant/   defendant   No.1     has   assailed   the

judgment /decree dated 03.07.2010 passed by Ld. Trial Court, whereby the 2 suit of the plaintiff /respondent No.1 was decreed thereby declaring the cancellation of allotment vide letter dated 02.05.1996 null and void and directing the defendants to comply with the terms of allotment letter dated 31.10.1994.

2. Briefly stated the facts of the case giving rise to the appeal are that plaintiff/ respondent No.1 is a Public Limited Company incorporated under the Companies Act 1956. The defendant No.1 / Appellant is also a company incorporated under the companies Act. It was further alleged that defendant No.1 the alleged lessor had alloted a piece of land at Andrews Ganj, New Delhi for building five star hotel. It was also alleged that defendant No.1 invited bids for the hotel project which included guest house, shops, restraunts. The plaintiff/ respondent No.1 was the highest bidder. Accordingly, the bid of plaintiff was accepted and the site in question was alloted to the plaintiff for five star hotel and car parking for total consideration of Rs. 78,10,00,000/ (Rupees Seventy Eight Crores Ten Lakhs, Only) it is included Rs. 14,00,00,000/ (Rupees Fourteen Crores Only) for car parking site.

3. It was also alleged that plaintiff accepted the terms and conditions and letter of allotment dated 31.10.1994 issued in its favour and (the plaintiff ) paid the Ist installment of Rs. 25,04,00,000/ (Rupees Twenty Five Crores Four Lakhs Only), Rs. 2,00,000/ (Rupees Two Lakhs ) being earnest money deposited earlier. The plaintiff also paid Rs. 2,50,000/ (Rupees Two Lakhs Fifty Thousand only) to defendants No. 1's maintenance agency.

4. It was further alleged that defendant No.1 was to execute agreement for sub lease in favour of plaintiff and hand over the site along with the car parking space to plaintiff enabling it to raise construction, but defendant No.1 kept on avoiding to comply with terms of allotment letters dated 31.10.1994 according to which the possession of hotel site and car parking space was to be handed over prior to the payment of IInd Installment.

5. It was further averred that defendant No.1 vide letter dated 31.01.1996, 3 demanded the further Installment failing which the allotment would stand canceled and Ist installment forfeited. It was also alleged that plaintiff made representation against the said act of defendant No.1 submitting that it was not liable to pay the second installment because of the act and conduct of defendant No. 1 in not complying with its part of the agreement. It was further alleged that due to the conduct of defendant No.1, plaintiff was compelled to file a suit before Hon'ble High Court of Delhi on 30th January 1996 being suit No. 257/96 for restraining defendant No.1 from canceling the allotment made in favour of the plaintiff. The said suit was based upon the facts and circumstances prior to cancellation of allotment, but now the defendant No.1 had gone to the extent of cancellation of allotment and even the fresh bid had been invited.

6. It is further averred that defendant No.1 had invited fresh tenders to reallot the property which was against the law. It was further alleged that defendant No.1 was to give possession to plaintiff by February 1995 and the next installment was payable in October 1995 (after 6 8 months) and in fact second installment was payable in January 1996 after three months grace period along with the interest. But the defendant No.1 wanted to illegally allot the site in favour of some one else thereby cause an irreparable loss and injury to the plaintiff.

7. It was further alleged that defendant No. 1 had issued a letter dated 02.05.1996 purporting to be a cancellation letter although defendant No.1 had in a similar matter given extensions twice to Ansals whereas defendant No.1 cancelled the allotment of plaintiff without any reasons.

8. It was further alleged that as the lease deed was not executed even in favour of the defendant No.1 by defendant No.2 and huge money of financial institution i.e. Banks etc. is involved in the project as such the arbitrary act of defendant No.1 would caused irreparable loss and injury to plaintiff. It was further alleged that defendant No.1 being a financial institution could not act 4 in such manner when the plaintiff has already paid 40 % of the total money. It was further alleged that these facts clearly show that the defendant No.1 never intended to comply with its part of the agreement. It was also alleged that plaintiff was not liable to pay the second installment to the defendant No.1 till the possession of the suit property was handed over to the plaintiff, on the other hand defendant No. 1 was under obligation to comply with the terms of agreement but defendant No.1 did not initiate steps to take income tax clearance etc.

9. It was further alleged that as the act and conduct of defendants was arbitrary, illegal and uncalled for, plaintiff had no other remedy except to approach the court. It was further alleged that the defendants were acting according to their whims which were against the established principles and norms. It was further alleged that the land in question belongs to defendant No.2 and had been entrusted to defendant No.1 as an agent on the terms and conditions laid down in the grant. It was further alleged that the land in question was granted to defendant No.1 by defendant No.2 under the Government Grants Act as a consequence thereof, the defendant No.1 was required to take permission of defendant No.2 before allotment of the said land to any party and or for extension of time and for any cancellation of allotment. It was further averred that defendant No. 2 was the final authority in this regard. It was further averred that in fact defendant No.1 took approvals of all the extension granted to Ansals from Union of India /defendant No. 2 and Union of India/ defendant No.2 was a party to the benefit bestowed upon Ansals who were similarly situated as of plaintiff. It was further alleged that defendants No.1 & 2 had discriminated against the plaintiff as they have treated plaintiff and Ansals who are placed in the similar situation, differently.

10. It was further alleged that one of the condition of the perpetual lease deed dated 04.07.1997 Ex. DW1/A issued by the defendant No.2 in favour of defendant No.1 was as under: 5 "After the completion of the construction and development of the community center but not later than ten years from the date of this perpetual lease deed, the lessor will have the right to review the arrangement with the lessee and enter into fresh arrangement with any other government agency or public sector undertaking for the purpose of lease/ maintenance and administration of the properties. The rights and liabilities of the Sublessee under the sublease entered into by the lessee with sublessee in respect of the properties developed in the community center complex shall, however, continue in the same manner by the designated agency."

11. It was further alleged that that the allotment letter dated 19.03.1996 Ex. PW1/DD issued by defendant No.2 in favour of defendant No.1 provided as under: "A monitoring committee consisting of Additional Secretary, Joint Secretary dealing with the subject and Joint Secretary (Finance) from the Ministry of Urban Affairs, Director General (Works), CPWD and CMD, HUDCO will monitor progress of the works and undertaken the utilization of surplus funds for the construction of General Pool Residential Accommodation. The details of subleasing arrangement in respect of facilities developed on the Community Centre will be finalized by the Government in consultations with HUDCO."

12. It was further alleged that thus, as per the clause (xv) of the Ex. PW1/DD, the lease was to be governed by the Government Grants Act and therefore, the defendant No. 2 retained control over the said land. But the defendant No.1 cancelled the allotment of the plaintiff without taking approval of the defendant No. 2 which makes the said cancellation unlawful and untenable, as the defendant No. 1 had no power, right and or authority to cancel the allotment of the plaintiff without the consent of the defendant No. 2 at the relevant time.

13. It was further alleged that the cause of action arose in favour of the plaintiff and against the defendants on all occasions as and when the impugned 6 demand was raised by the defendants. It was further alleged that the cause of action further arose in May 1996 and further on 26.12.1996 when tenders were invited and the threat of defendant No.1 to reallot the suit property was still surviving and as such the cause of action is continuing and subsisting.

14. Separate WS were filed by defendant No.1 & defendant No.2, contesting the suit taking preliminary objections that declaration prayed by the plaintiff without claiming consequential relief of possession was barred under section 34 of the Specific Relief Act. It was further stated that plaint does not disclose complete cause of action. It was further alleged that it was not the case of the plaintiff that no consequential relief was available to it. It was further alleged that in fact the plaintiff had sought consequential relief of possession but later abandoned it on account of inability to pay the court fees of it.

15. It was further stated that by way of the present suit the plaintiff was not only claiming declaration simplicitor but also seeking to enforce the agreement entered into between the parties, thus, the suit is an abuse of process of law as plaintiff in the garb of declaration was in fact seeking relief of enforcement of the agreement and was liable to pay court fees on the sum of Rs. 78,10,00,000/ ( Rupees Seventy Eight Crores Ten Lakhs Only) but having failed to do so , the plaint is liable to be rejected.

16.It was also alleged that the valuation and fixation of the court fees was patently arbitrary and not in conformity with the provisions of the Court fees Act and Suits Valuation Act, as plaintiff was claiming substantive relief in the garb of declaration simplicitor.

17. It was also alleged that this court did not have the pecuniary jurisdiction as the subject matter of the suit was beyond the pecuniary jurisdiction of this court, as letter of allotment dated 31.10.1994 was for hotel site at Andrews Ganj for consideration of Rs. 64,10,00,000/ (Rupees Sixty Four Crores Ten Lakhs) and additional amount of Rs. 14,00,00,000/ (Rupees Fourteen 7 Crores) for car parking space, the total consideration being Rs. 78,10,00,000/ ( Rupees Seventy Eight Crore Ten Lakhs). It was further stated that allotment was cancelled vide letter dated 02.05.1996 by which the first installment of Rs. 25,64,00,000/ (Twenty Five Crores Sixty Four Lakhs ) and Rs. 1,40,00,000/ (Rupees One Crore Forty Lakhs only) totaling Rs. 27,04,00,000/ (Rupees Twenty Seven Crores and Four Lakhs Only) was forfeited thus, plaintiff could not value the suit @ Rs. 1,05,000/ (One Lakh Five Thousand Only) thus, suit was liable to be dismissed.

18.It was further alleged that plaintiff had filed a suit in the Hon'ble High Court of Delhi being Suit No.275/96, and in the said suit plaintiff claimed a decree of declaration that the dates of payment of second and third installments under the allotment letter dated 31.10.1994 be extended till defendant No.1 / appellant performed its obligation under Clause 5 (vi) and 5 (ix) of the said allotment letter and also prayed for permanent injunction restraining defendant No.1 from canceling allotment. In the said suit Hon'ble High Court of Delhi had initially granted the status quo order but later vacated the same. It was also alleged that issues in the said suit were in sum and substance the same as raised in the present suit and as the cause of action of the previous suit and the present suit was the same, the present suit was barred by Order 2 rule 2 of CPC.

19. It was further stated that the present suit is false and vexatious as plaintiff being unable to obtain any relief in the earlier suit filed the present suit. It was also alleged that allotment in favour of plaintiff stands cancelled as such plaintiff had no right, title or interest in the suit property and the suit was thus, not maintainable. It was also alleged that plaintiff having committed breach of terms of the contract could not seek the declaration as prayed for. It was also alleged that the suit was bad for misjoinder of defendant No.2. It was also alleged that the suit was not maintainable as it had been filed subsequent to the withdrawal of the previous suit NO.275/96 filed before Hon'ble High Court 8 which was withdrawn without the liberty to file a fresh suit.

20. On merits it was reiterated that the allotment was duly cancelled vide letter dated 02.05.1996 and first installment was forfeited in terms of the allotment letter. It was denied that the defendants failed to comply with any of the terms of the allotment letter dated 31.10.1994. It was also denied that defendants neglected to execute necessary documents. It was also denied that as per terms of allotment letter the possession of the hotel site and car parking space were to be handed over before the payment of second installment.

21. It was stated that in the suit No. 275/96 filed before Hon'ble High Court of Delhi vide order dated 17.05.1996, the status quo order was vacated in view of the plaintiff's breach to make payment of second installment, consequent thereto the allotment of plaintiff was cancelled vide letter dated 02.05.1996 and the first installment was forfeited in terms of order of Hon'ble High Court of Delhi thus, the cancellation cannot be impugned by way of the present suit. It was denied that the suit No. 275/96 was filed on facts and circumstances prior to the cancellation of allotment.

22. It was denied that defendant No.1 wanted to allot the suit property to some one else or that any irreparable loss and injury would be caused to plaintiff/ Respondent No.1. It was also denied that defendant No. 1 had in similar matter given extension to Ansals but had cancelled the allotment of plaintiff without any reasons. It was also stated that facts and circumstances of allotment shopping arcade in favour of Ansals, were different from that of the plaintiff.

23. It was also denied that there was any arbitrary Act on part of defendant No.1. It was denied that defendant No.1 never intended to comply with the terms of allotment letter dated 31.10.1994. It was reiterated that it was due to the breach of condition by the plaintiff which led to the cancellation of allotment. It was denied that lease deed had not been executed in favour of defendant No.1 by defendant No.2, it was alleged that lease deed was executed on 04.07.1997 by 9 defendant No.1 in favour of defendant No.2 and was made effective, retrospectively. It was further alleged that in terms of the allotment letter, possession of site was not connected with payment of first installment or no further installment and possession was to be handed over only after the compliance of the allotment letter, clearance obtained by plaintiff from Income tax Authorities but plaintiff failed to obtain the same. It was denied that the defendant No. 1 had to get the clearance from Income tax Authority or any other authorities.

24. It was further alleged that though the land belongs to defendant No.2 but vide lease deed dated 04.07.1997, defendant No. 1 had right to allot the land and execute sub lease for which defendant No.1 did not require permission of defendant No.2. It was further alleged that prior to the execution of lease deed defendant was empowered to allot the land under the letter of allotment issued by defendant No. 2. It was further alleged that defendant No.1 was not required to take permission of defendant No. 2 for cancellation of any allotment. It was denied that under clause (xvi) of lease deed it was to be govern by the Government of Grant Act. It was further stated that there was no Clause XVI in the above said lease deed dated 04.07.1997. It was denied that in case of grant under Government Grant Act, approval of Government was required for cancellation of any allotment made by guarantee. It was also denied that any cause of action arose in favour of the plaintiff to file the present suit.

25. In the replication filed to the WS of defendants No.1 & 2, the averrments made in the plaint were reaffirmed and reiterated and allegation made in the WS were controverted and denied.

26. From the pleadings of the parties following issues were framed on 23.04.2009 by Ld. Trial Court in supersession of issues framed earlier:

1) Whether defendant No. 1 performed its reciprocal obligations on receipt of Ist Installment from plaintiff as per the terms of allotment letter dated 10 31.10.1994 and whether in the absence of not doing so defendant No.1 could demand the 2nd installment? OPP

2) Whether defendant No.1 has committed breach ? OPP

3) Whether defendant No.1 misrepresented that entire complex of community centre is approved when the building plans of 5 star hotel could not be sanctioned without approval of revised lay out plans and unless the unauthorized constructions carried out car park and other buildings constructed by defendant No.1 at HUDCO Place were regularized and whether defendant could demand the second installment in the absence of such approvals ? OPP.

4) Whether the act and conduct of the defendant No.1 and 2 was arbitrary, illegal and discriminatory while dealing with the plaintiff in respect of the suit property and whether defendants have permitted various time interest free extensions under Relief similar conditions of allotment to Ansals Properties & Industries Ltd. As of plaintiff because car park was built unauthorized by defendant No.1 ? OPP.

5) Whether timely payment is essence of allotment letter dated 31.10.1994 in terms of clause No. 5 (iii) issued by defendant No.1 in favour of plaintiff and whether 2nd installment and 3rd installment were deferred payments payable in one year and two years for the date of possession on license basis to facilitate the allotee for construction of building there upon? OPP

6) Whether defendant No.1 had any valid allotment and lease of the subject land and in their favour at the time of allotment to plaintiff? OPP.

7) Whether legally construction of 5 star hotel was permitted in the said Community Centre as per old Master Plan MPD1962 under which said Community Centre was alloted to defendant No.1 by defendant No.2 and whether the lease and allotment in favour of defendant No.1 specified the use of land for construction of Hotel? OPP.

8) Whether defendant No.1 is an agent of defendant No.2 and whether 11 defendant No.1 was given the said land under Govt. Grants Act and whether defendant No.1 was to take permission of defendant No. 2 before allotments, permission to mortgage, any extension of payments and cancellation of allotments and whether defendant No.1 took the permission/ approval of defendant No.2 regarding allotment/ cancellation of allotment of plaintiff? OPP.

9) If the above issues are proved whether in view of the above issue the plaintiff is entitled to the decree of declaration as claimed in the suit in respect of letter dated 02.05.1996, issued by defendant No.1 as null and void? OPP

10)Whether the suit has not been properly valued for the purpose of court fees and jurisdiction? OPD.

11) Whether suit as framed is not maintainable? OPD

12) Whether the suit of plaintiff is barred by the provisions contained u/o2 rule 2 CPC? OPD.

13) Whether the suit of plaintiff is barred by provisions contained under the Specific Relief Act? OPD.

14) Whether the suit of the plaintiff is also barred under the provisions contained under order 23 Rule 1 CPC ? OPD.

15) Relief.

27. In support of its case, the plaintiff examined PW1 Sh. Pavan Sachdeva Chairman cum Director of the plaintiff company and 23 other witnesses which are PW2 Sh. M Jeyaraman, Secretary of late Sh. R S Pathak, Retd. Chief Justice of India, PW3 Sh. Krishan Kaushik, Record Keeper, MCD New Delhi Central Zone, Lajpat Nagar, New Delhi, PW4 Sh.S C Sharma, Asstt. Assessor & Collector, MCD, Rohini New Delhi, PW5 Sh. M K Bangia, Assistant Assessor and Collector, GRP Branch, New Delhi, PW6 Sh.V K Tyagi, CPIO, DUAC New Delhi, PW7 Sh.D S Yadav, Assistant Divisional Officer, DFS, New Delhi, PW8 Sh.A D Biswas, Dy. Town Planner, MCD, Town Planning Deptt. New Delhi, PW9 Sh. Such, Asstt. Town Planner, MCD, Town Planning Deptt. New Delhi, 12 PW10 Sh.V P Sharma Delhi Jal Board, Office of the Ex. Engineer(P) W. III, Varunalaya Building New Delhi, PW11 Sh.R K Chalia, Executive Engineer, Delhi Jal Board, New Delhi, PW12 Sh. J B Kataria, Office of Chief Eng. (P) W. III Delhi Jal Board, New Delhi, PW13 Sh. M P Singh Asstt. Engineer (Civil) Delhi, PW14, Sh. Gopal Rai, Executive Engineer, MCD, Planning New Delhi, PW15 Sh. H S Dhillon, Jt. Director, DDA Vikas Minar, New Delhi, PW16 Sh. R K Gupta Asstt Engineer, MCD Town Hall, New Delhi, PW17Sh.Gous Mohd. Ahlmed Ld. ACMM Sh. Sanjay Bansal, New Delhi, PW18 Ms. Deepali, Judicial Assistant At High Court of Delhi, New Delhi, PW19 Sh. Kamlesh Saha, RKD Branch, at High Court of Delhi, PW20 Sh. Daleep Bharti, Jr. Judicial Asstt., at High Court of Delhi, PW21 Sh. Anil Tomar, Appropriate Authority Income Tax, New Delhi, PW22 Mrs. Veena Garg, Add. Standing Govt. Counsel, New Delhi, PW23 Sh. Tarun Mehta, Dy. Manager Ansal Properties and Industries Ltd. New Delhi, and PW24 Sh. Surinder Singh, Dy. Land and Development Officer, MOUD, Nirman Bhawan New Delhi.

28. On the other hand defendant No.1 examined one witness i.e. DW1 Smt.Arti Tyagi W/o Sh. Rajiv Tyagi, Deputy Chief (Project) HUDCO, India Habitat Centre, Lodhi Road, New Delhi and closed its evidence. Defendant No.2 did not examine any witness.

29. ISSUES NO. 1 & 2.: 1) "Whether the defendant No.1 performed its reciprocal obligations on receipt of Ist Installment from plaintiff as per the terms of allotment letter dated 31.10.1994 and whether in the absence of not doing so defendant No.1 could demand the 2nd installment? OPP"

and Issue No.: 2) "Whether defendant No.1 has committed breach?OPP"

30.As both the issues No. 1 & 2 are correlated, they are taken up together. Onus to prove issues no. 1 & 2 was on the plaintiff/ respondent No.1.

31. As regard issues No. 1 & 2, PW1 stated in his evidence by affidavit that he was authorized vide resolution Ex.PW1/2 to file the suit. He further stated that defendant no.2 was the owner of land admeasuring 46.2 acre at Andrews Ganj, which had been given to defendant no.1 for the purpose of development. The defendant no.1 had no right title or interest in the said property and was merely an agent of defendant no.2 to develop the land and the suit land was handed over to defendant No.1 to realize revenue for defendant No.2. That defendant No.1 in Afro Asian Games held in 1991 handed over possession of said land to defendant No.1 to build guest houses. He also stated that land was to be developed as per the master plan 1962. The new master plan (MPD 2001) was notified on 01.08.1990 wherever the suit land was notified for development of convention center. But defendant No.1 constructed buildings thereon without the sanction, but within the knowledge of defendant No.2. He further stated that defendant no.1 was authorized by defendant no.2 to dispose of the properties constructed in the community centre and defendant no.2 was fully aware of the fact that buildings constructed by defendant no.1 had no sanction whatsoever as required under the law. He further stated that defendant no.1 was to dispose of the properties developed by them in consultation with defendant no.2 but defendant No.1 was unable to dispose of the properties due to unauthorized construction.

32.PW1 further testified that defendant no.2 issued allotment letter no. L21974/92/93 dated 27.03.1992 in favour of defendant no.1 subject to the terms and conditions that the lands of community centre would be utilized for development of hostels, guest house facility, conference hall, shopping complex, market. The said allotment letter stipulated that the construction plans were to be got approved from the local bodies before raising construction on the community centre. The lease period in the allotment letter for 32 years and was to be governed by Government Grant Act. Defendant no.1 14 was to construct the building within 2 years from the date of handing over of the plot. He further stated that the terms and conditions of the allotment letter dated 27.03.1992 issued by defendant No.2, were to be accepted by defendant No.1 in writing along with the payment of lease amount of Rs. 75/. But defendant No.1 did not accept the terms and conditions of the allotment letter dated 27.03.1992. Thus, defendant No. 2 agreed to amend the terms and conditions of letter dated 27.03.1992. A MOU was also to be executed between defendant No.1 & defendant No.2. He also stated that defendant No.2 objected to the use of land for hotel as it was not in conformity with the allotment letter. PW1 stated that the amended letter No. LII1974/92/93 dated 27.03.1992 was issued on 02.04.1993 which is Ex. PW17/E without mentioning hotel use in the community centre.

33. He further stated that though defendant no.1 invited tender in 1993 but it was unable to dispose of any of the property because of the unauthorized construction declared in the said tender. It was further stated that defendant no.1 again advertised on 30.06.1994 inviting tenders but did not disclose that the construction at the complex did not have the sanction. He also stated that the bidders were given the impression that buildings were approved structures and it was concealed that revised lay out plan needed regularization. He also stated that bidders were given the impression that the entire structure at Andrews Ganj was approved for building of five star hotel and shopping arcade could be started immediately. He also stated that defendant No.1 also concealed that it did not have lease of 99 years as on the date of bid.

34.He further stated that defendant no.1 stated in the brochure that the hotel will be provided with underground car parking with the capacity of 415 cars. He further stated that defendant no.1 offered the above properties on a long term renewed lease basis stating that defendant no.2 had given the land to defendant no.1 for 99 years although defendant no.1 did not actually possess the lease of 99 years on the date of the bid. He also stated that the amended 15 allotment letter was issued on 02.04.1993 without the use of 'hotel' in the community centre.

35. He also stated that a memorandum of understanding was to be executed between defendant no.1 and 2 for execution of the project and disposal of the suit property. But the MOU was not signed though it was a condition precedent of allotment letter issued by defendant No.2 in favour of defendant No.1 dated 27.03.1992 that lease deed be executed by defendant No.2 in favour of defendant No.1 to enable defendant No.1 to execute sub lease in favour of plaintiff.

36.He further testified that plaintiff offered the highest bid for the five star hotel alongwith car parking but defendant no.1 could not take any decision for allotment of property to highest bidder without approval of defendant no.2 as the land belonged to defendant no.2 and defendant no.1 was merely an agent of defendant no.2. He further stated that defendant no.1 sent the report of bidders to defendant no.2 for issuance of allotment letter to highest bidders. The defendant no.2 approved the allotment of five star hotel and car parking to plaintiff/respondent No.1. Thereafter, appellant/defendant no.1 issued the allotment letter dated 31.10.1994 for the five star hotel land with car parking in favour of plaintiff. He also stated that appellant/defendant no.1 received first installment of 40% as per the terms of the allotment letter and issued a receipt. He further stated as per allotment letter the hotel site and the car parking space was to be given on perpetual sub lease basis. He further stated defendant no.1 was fully aware that approval of local authorities was mandatory prior to raising of construction but did not disclose that huge unauthorized construction was already existing at the site/suit property. He further stated that plaintiff/ respondent No.1 paid the first installment with interest as per the allotment letter.

37.He further stated that as per the agreement to sub lease enclosed with the allotment letter Ex. DW1/7, parties were to obtain requisite clearance and 16 approval under the Urban Land (Ceiling & Regularization) Act (hereinafter, referred to as ULCR Act) and Income Tax Act. He also stated as per the conditions of the allotment defendant no.1 was to execute the agreement to sub lease even if permission under the Income Tax Act and ULCR Act was not obtained. However, defendant no.1 did not execute the agreement to sub lease inspite of receipt of first installment as defendant no.1 did not have lease in its favour, thus, defendant no.1 could not have demanded the IInd installment without performing its reciprocal obligation i.e. obtaining approval from the Income Tax Authorities, regularization of building plans of car park, approval of revised lay out plans and handing over provisional possession to plaintiff/ respondent No.1. But defendant no.1 was unable to execute agreement to sub lease in the absence of a lease in its favour. He also stated defendant no.2 objected to the allotment made by defendant no.1 in favour of plaintiff.

38.He further stated that plaintiff had demanded the permission obtained by defendant no.1 from the Delhi Urban Act Commission (herein after referred to as DUAC) with regard to the car park and approval of building plans by MCD, DDA, NOC from fire department but defendant no.1 kept silent as they did not possess the approvals as such defendant no.1 could not have demanded the IInd installment.

39.He also stated that plaintiff demanded possession as per the allotment letter for raising construction as plaintiff was required to raise construction within 3 years from the date of handing over the possession. He also deposed that plaintiff wrote letters to defendant no.1 for execution of documents for obtaining approval but defendant No.1 did not respond. He also testified that defendant no.1 did not have the permission under the ULCR Act and clearance from Income Tax Authority for transfer of the land, as such defendant no.1 could not have demanded the 2nd installment. He further stated that the plaintiff again reminded defendant no.1 on 05.04.1995 that inspite of various reminders defendant no.1 had not performed their obligation to 17 obtain the statutory permission neither handed over possession as such the 2nd installment would be paid when the obligation were performed. He further testified that defendant no.1 wrongly demanded the IInd installment and threatened to cancel the allotment if IInd installment was not paid. PW1 also stated that defendant No.1 had admitted in its letter Ex. PW16/G dated 21.11.1997 that approval of local authorities had been held up for several reasons including delay in clearance by DUAC and DVB and that the lay out plans were submitted to MCD after DU AC & DVB clearance. PW1 also stated that as per letter of DUAC to defendant No.1 Ex.PW17/O dated 27.06.1995 that DUAC had not approved the plans till 27.06.1995. He also stated that defendant No.1 submitted building plans of car parking for the first time on 09.11.1995 as was evident from letter dated Ex. PW1/13. Thus plaintiff was constrained to file a suit No. 275/96 for declaration and injunction. He further stated that while the suit was pending defendant no.1 cancelled their allotment vide letter dated 02.05.1996 and as fresh tender was floated by defendant no.1 in 1996. The plaintiff was thus, constrained to file present suit and withdrew the suit No. 275/96 filed in the Hon'ble High Court. He also stated that MCD forwarded the plan of car parking basement to Chief Fire Officer on 01.02.1996 which was evident from ex. PW17/Y.

40.In his crossexamination he stated that plaintiff had made independent inquiry regarding ownership, title and land use in the pre bid meetings. He also stated that defendant no.2 informed the plaintiff that allotment could be made only with its approval, he denied that defendant no.1 had right to cancel the allotment on account of nonpayment by plaintiff. He stated that consideration amount was payable in three installments. He further stated plaintiff did not seek extension of time for payment of second installment. He further stated that the relief sought in the suit filed in the Hon'ble High Court was the matter of record. He further stated that Honb'le High Court did not pass any order extending the period for the payment of second installment in 18 the suit no. 275/1996. He stated that the hotel site along with car parking was allotted without lease deed in favour of defendant No.1 by defendant No.2. He stated that execution of lease deed and MOU between defendant No.1 & 2 was a condition precedent for allotment of hotel site by defendant No. 1. He denied that the question of extension of time for making payment was between plaintiff and defendant no.1 and defendant no.2 was not involved. He denied that the second installment was no way connected with obtaining approval or possession of the suit property. He further denied that all the approvals were obtained by defendant no.2 from MCD. He stated that approval were obtained after issuance of cancellation letter. He denied that the approvals were taken on 04.07.1994 vide plan Ex. PW1/D1 prior to the cancellation. He denied that plaintiff defaulted in payment of installment on account of financial difficulties. He denied that the approval of revised lay out plan was not a condition precedent for approval of building plans. He denied that none of the structures existing at the suit property were unauthorized. He denied that payment of second installment was in no way connected with obtaining approval or possession of suit property. He also denied that he was required to deposit Rs. 15 crore and stated that he has already deposited Rs. 35 crore in the Hon'ble High Court which defendant no.1 did not accept. He denied that this amount was for some other project. He denied that he did not act diligently qua project. He stated that defendant No.1 was to execute agreement/ sub lease on receipt of first installment as per clause 5 (vi)of allotment letter dated 31.10.1994, Ex. DW1/1 and he invoked clause 5 (vi) for execution of sublease. He further stated that he could not apply for sanction for construction of hotel at the site because defendant No.1 did not execute agreement to sell / sub lease after receipt of first installment, neither obtained clearance from Income tax and ULCR Act as per the terms of allotment and building plans could be submitted only by owner as per MCD. He also stated that dates of payments stipulated in the allotment letter were subject to 19 various conditions of the allotment letter i.e. permission under ULCR and Income Tax Act. He stated that he did not know that provisions of ULCR were not applicable to defendant No.1 as no document in this regard was placed on record. He further stated that he had sent a letter Ex.PW17/N to defendant No.1 to reminding it to perform its obligation. He further stated in 1997 he came to know that the site could not be used for construction of hotel. He denied that he did not go through the notification dated 08.09.1992 notifying the change of land use. He denied that the agreement to sub lease could not be executed as he failed to comply with the terms of allotment. He further stated that defendant no.1 executed documents pertaining to the Income Tax clearance on 04.02.1996, whereas the documents were to be executed immediately on receipt of first installment. He also stated that with the permission sought by defendant no.1 under the Income Tax Act was declined as no ownership documents were provided by defendant no.1 to the department. He also testified no construction could be carried out till agreement to sell (agreement to sub lease) stipulated in the allotment letter was executed by defendant no.1 but defendant no.1 defaulted in doing so. He also deposed that the allotment letter was to be read as a whole vis a vis the reciprocal obligation of defendant no.1. He stated timely payment was not essence of the contract and neither in the allotment letter or brochure it was stated to be so. He also testified that the plaintiff withdrew the suit filed in the Hon'ble High Court unconditionally.

41.On the other hand DW1 Deputy Chief stated that lease deed was executed between defendant no.2 lessor and defendant no.1 lessee on 04.07.1997 for a period of 99 years in respect of land measuring 17.6 acre at Pinjra Pole, Andrews Ganj. She also stated that defendant no.2 had conveyed to the L & DO vide letter dated 15.06.1993 regarding allotment of 42.6 acre of land at Pinjra Pole to defendant No. 1. She further stated that letter dated 12.04.1994 was issued to defendant no.1 by MCD intimating that the Standing Committee 20 of MCD had vide resolution dated 25.03.1994, approved the lay out plan pertaining to the land at Pinjarpole, Delhi. She further stated that as per the allotment letter dated 15.06.1993 and the lease deed dated 04.07.1997, defendant no.1 had the right to further allot the land for which it did not require permission of defendant No.2 for allotment or cancellation of allotment. She also stated defendant no.1 invited the bids for the suit land and plaintiff accepted the proposed terms and conditions of the bid and made an offer. She further stated since offer of plaintiff was the highest defendant no.1 accepted the same and issued the allotment letter dated 31.10.1994 to the plaintiff for building five star hotel and underground parking. She proved the allotment letter as Ex.DW1/1. She further stated defendant no.1 complied with all the terms of the allotment letter and also stated that as per the terms of the allotment letter the amount had to be paid in three installments i.e. 40% within four weeks of the issuance of allotment letter, 30% before the end of one year of the date of issuance of allotment letter and rest of 30% before the end of two year of the date of issuance of allotment letter. Similarly the amount of car parking had to be paid in three installments. She also stated in case of default in payment interest @ 16% per annum was to be charged from due date and additional penal interest @ 30% was also to be charged for three months, any delay beyond three months was to entail cancellation of allotment.

42. DW1 further stated that plaintiff paid the first installment but failed to make the payment of second installment. Thus, the defendant no.1 demanded installment vide letter Ex. DW1/E dated 18.10.1995 and drew the attention of plaintiff to clause 5 (iii) of allotment letter according to which, if IInd installment was not paid, it would forfeit the amount paid and cancel the allotment. She further testified that plaintiff failed to make payment despite several reminders and instead filed the suit No. 275/96, in the Hon'ble High Court seeking the declaration that the dates of payment of second and third installment be extended and decree of permanent injunction restraining 21 defendant no.1 from cancelling the allotments. She stated that status quo order was passed in favour of the plaintiff in the said suit and plaintiff was directed to deposit Rs.15 crore in order to establish its bonafideness or else, status quo order would automatically stand vacated. Against the said order plaintiff preferred an appeal which was dismissed. The plaintiff thereafter filed an application in the abovesaid suit seeking extension of time for payment of Rs.15 crore which was allowed but as plaintiff did not make the payment even within the extended period, the status quo order was vacated. She also stated that in view of the breaches on part of plaintiff, defendant no.1 cancelled its allotment vide letter dated 02.05.1996 and forfeited the amount of first installment. She further stated that plaintiff had no right title or interest in the suit land after cancellation of allotment. She further stated defendant no.1 had always been ready to execute the document legally required for obtaining the approval. However, the plaintiff did not make any request for execution of any documents for obtaining approval which as per the terms of the allotment, plaintiff was under an obligation to do before asking for possession. She also stated that defendant was to only sign the documents as per the allotment letter. She also stated possession was to be handed over after compliance of allotment letter which stipulated clearance U/s. 26 of ULCR Act and clearance in Form37 I of the Income Tax Act which plaintiff failed to do. She also stated that defendant no.1 had sent the letter dated 05.02.1996 Ex. DW1/O and Copy of Form 37 Ex. DW1/P, duly signed by defendant no.1 to plaintiff. She also stated it was duty of plaintiff to file Form37(i) with the Income Tax authorities and defendant no.1 was only required to sign it but plaintiff failed to present the necessary form for clearance. She also stated that section 26 of ULCR Act did not apply to defendant no.1. She also stated as per the allotment letter hotel site was purely on license basis and no right title or interest was created in the property and it was clearly provided in the allotment letter that after fulfillment of the terms and conditions a sub lease would be executed.

She also stated that draft of sub lease was sent to the plaintiff with the allotment letter for obtaining consent of the proposed draft agreement. She also stated that as plaintiff failed to deposit the amount due, allotment of plaintiff was cancelled.

43.In her crossexamination she stated that she was employed with defendant no. 1 since 199495 and was involved in the Andrews Ganj Project since 1990. She stated that the land could be used as commercial residential and green. She also stated that the use of land as community centre was approved in the lay out plan. She also stated possession of the land was given to defendant no.1 by defendant no.2 in 1990. She stated allotment letter dated 01.11.1990 was issued by defendant no.2 in favour of defendant no.1 and simultaneously possession was handed over. She stated that she knew only of the revised lay out plan submitted by defendant no.1 to MCD were approved in 1994 and could not tell whether revised lay out plans submitted by defendant No.1 to MCD were approved in 1998. She denied that defendant no.1 had to take all the permission from defendant no.2 with regard to Andrews Ganj Project. She denied that defendant no.1 after receipt of first installment was bound to execute the agreement to sell (agreement to sub lease). She also denied that after receipt of first installment defendant no.1 was to execute documents for taking permission from ULCR Act and Income Tax Act. She denied that defendant no.1 had not performed its reciprocal obligation. She denied that lease deed dated 04.07.1997 was not a perpetual lease. She also stated the allotment letter dated 19.03.1996 issued by defendant no.2 in favour of defendant no.1 had not superceded allotment letter dated 27.03.1992. She stated timely payment was the essence of the contract/allotment letter. She also stated defendant no.1 was not the agent of defendant no.2 with regard to the suit property and was a lessee. She further stated the allotment was cancelled vide letter dated 02.05.1996. She denied that vide allotment letter issued by defendant no.2 in favour of defendant no.1, defendant no.1 did not 23 get right title or interest in the suit property. She stated that lease deed dated 04.07.1997 was made effective retrospectively w.e.f 01.11.1990. She denied that defendant No.1 being an agent had to take permission/ approval from defendant No.2 in respect of the matter relating to the suit property. She evaded the question that construction of buildings at community centre did not have sanction of the statutory authorities at the time of calling of bids. She also evaded the question that building plans of hotels could not have been approved unless the unauthorized construction at suit property carried out by defendant No.1 was regularized / compounded. She denied unless the agreement to sell (sub lease) was executed by defendant no.1 and 2 in favour of plaintiff no permission under the ULCR Act and Income Tax Act could have been given by the concerned authorities. She also denied that second installment could not be demanded by defendant no.1 without executing the agreement to sub lease. She further stated that the plaintiff had to take the permission from the statutory bodies after the allotment but plaintiff did not fulfill its obligation in this regard. She denied that there was no approval of the car parking in the lay out plan dated 12.04.1994. She denied that defendant did not have a valid allotment and lease in its favour at the time of allotment and cancellation.

44.On perusal of the testimony of the parties it is revealed that defendant no.1 invited bids for the suit property and as the plaintiff's bid was the highest, the plaintiff was allotted the suit property vide allotment letter 31.10.1994. DW1 proved the allotment letter DW1/1.

45.Clause 5 (ii)of the allotment letter Ex. DW1/1 provides the manner in which the installments are to be paid. Clause 5 (ii) is reproduced here under:

(ii) You Shall made the payment of premium i.e. Consideration of Rs. 64.10 Crores (Rs. Sixty Four Crores and Ten Lacs Only) for the allotment of the hotel site and Rs. 14. Crores for the allotment of car parking space. The Payment shall be made in the following manner/Stages: 24 (A) Hotel Site (Rs. 64.10 Crores)

(i) within 4 weeks of the date of this allotment letter (i.e. Before 28.11.1994) (Rs. 25,64,00,000) 40 %

(ii) Before the end of one year of the date of this allotment letter (i.e. Before 31.10.1995) (Rs. 19,23,00,000) 30 %

(iii) Before the end of two years of the date of this allotment lettter (i.e. Before 31.10.1996) (Rs. 19,23,00,000) 30 % (Rs. 64,10,00,000) (B) Car Parking Space (Rs. 14.00 Crores)

(i) within four weeks of date of issue of allotment letter (i.e. Before 28.11.1994) (Rs. 1,40,00,000) _ 10 %

(ii) Before end of one year of the date of issue of allotment lettter (i.e. Before 31.10.1995) ( Rs. 5,60,00,000) _ 40 %

(iii) within four weeks of issue of letter by HUDCO intimating that the services were ready for being handing over _ 50 % (Rs. 7,00,00,000) (Rs. 14,00,00,000) The above payments shall be made through demand drafts drawn in favour of HUDCO Payable at New Delhi.

46. Clause 5 (iii) relates to cancellation of allotment in case of delay and is reproduced as under :

(iii) No interest will be charged on payments made before the due dates stated above. In case of default, interest shall be charged @ 16 % p. a. for three months if the payment is made after the due date. Additional penal interest @ 25 3 % p.a. shall also be charged on the interest for three months. Any delay beyond three months would entail cancellation of allotment and / or forfeiture of the total amount deposited till date.

47. Clause 5 (vi) of the agreement provides that the appellant was to execute all the documents relating to obtaining approvals from the competent authorities. Clause 5 (vi) is reproduced as follows:

(vi) HUDCO will execute all required documents for obtaining approval of the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 and also of the Appropriate Authority in terms of chapter XX C of the Income Tax Act. If these approvals are not accorded HUDCO will refund the amount paid without any interest and you shall not be entitled to claim any compensation or damages.

48. It was contended on behalf of appellant/defendant No.1 that payment was to be made as per the terms of the allotment letter, initially the site was on license basis and on fulfillment of the terms of the agreement a perpetual sub lease was to be executed. It was contended by counsel for appellant/defendant no.1 that possession was to be given after compliance of the requirements of the allotment letter and plaintiff was to obtain necessary approval from the statutory bodies before possession was handed over. It was also contended on behalf of appellant/defendant no.1 that unless plaintiff/ respondent No.1 obtained the permission, agreement to sell/ sub lease could not be executed. Ld. Counsel for appellant/defendant no.1 further contended that possession was to be given only after plaintiff/ respondent No.1 obtained the necessary permission from Income Tax Authority. It was also stated by counsel for appellant/ defendant no.1 that alongwith the allotment letter appellant/defendant no.1 had enclosed the agreement to sub lease duly signed by appellant/defendant no.1 and plaintiff/ respondent No.1 accepted the terms of allotment letter and sub lease which is Ex. DW1/7. It was further stated that as per terms of allotment letter and sub lease Ex. DW1/7, 26 appellant/defendant no.1 was entitled to cancel the allotment and forfeit the deposit if payment was not made on time with interest and time was the essence of the agreement thus, appellant/ defendant No.1 cancelled the allotment and forfeited the amount.

49. On the other other hand Ld. Counsel for plaintiff/ respondent No.1 argued that it was the appellant/ defendant No.1 who had to take permission from the statutory authorities as per clause (vi) of Ex. DW1/1 but since appellant/defendant no.1 did not have lease in its favour, it was unable to get clearance from Income Tax Authority as well as from ULCR.

50. On the other hand Ld. Counsel for appellant/defendant no.1 submitted that defendant no.1 wrote several letters to the plaintiff reminding them to pay the balance installment and vide letter Ex. DW1/E dated 18.10.1995 addressed to plaintiff/ respondent No.1 informed that allotment was to be determined on 01.02.1996 if payment was not made on 31.01.1996 and it would forfeit the amount. It was also contended by Ld. counsel for appellant / defendant No.1 that it had informed the plaintiff to obtain the permission from Income Tax Act and ULCR before requesting for possession and appellant/defendant no.1 was only required to sign the documents for obtaining approval from competent authorities. However, it was contended by counsel for plaintiff as per the Income Tax Act and ULCR it was the seller who had to take the permission and in this regard placed reliance on AIR 1999, Delhi 383 Raghunath Rai Vs. Jogeshwar Prasad Sharma wherein it has been held that seller was required to obtain NOC and Income Tax clearance before execution of sale deed, however, as seller intimated to the buyer his inability to sell the property as he could not get NOC, thus, agreement would come to an end.

51. The Ld. Counsel for plaintiff/ respondent No.1 further submitted that as per clause 5 (vi) of the allotment letter appellant/defendant no.1 was to obtain approval of competent authority under ULRC Act and also Income Tax Act. Ld. Counsel for plaintiff/ respondent No.1 also contended that in this regard 27 DW1 deposed that defendant had sent a letter to plaintiff's counsel stating that as per direction of Hon'ble High Court it had executed Form 37I for transfer of immovable property and sent it to plaintiff/ respondent No.1.

52. However, it was alleged on behalf of appellant/defendant No.1 that in the letter dated 05.02.1996, Ex DW1/O it was inadvertently mentioned that form No. 37 I had been executed by appellant vide directions of Hon'ble High Court in the suit No. 275/96 whereas no such direction was given by Hon'ble High Court and it was respondent No.1/plaintiff who had to submit the form for income tax clearance.

53.However in my view, as DW1 had admitted execution of letter Ex. DW1/O, & DW1/P (Form No. 37 I), the contention of Ld. Counsel for defendant No. 1/appellant that respondent No.1/plaintiff had to obtain the necessary clearance, cannot be accepted as appellant/ defendant No.1 executed Form No. 37 I as it was bound to do so, as per the clause 5 (vi) of the allotment letter Ex. DW1/1. It was contended on behalf of plaintiff/ respondent No.1 that the said letters were written after the date of payment of IInd installment.

54. It was also alleged on behalf of plaintiff/ respondent No.1 that appellant/ defendant no.1 could not have cancelled the allotment without performing its reciprocal obligation and PW21 a witness from Income Tax Department, who had produced the record i.e. Form 37 (i) submitted by defendant no.1 as per the Income Tax Act. PW21 stated that Income Tax department did not consider the application for want of proper documents as agreement to sub lease/ ownership was not enclosed with the application. It was alleged on behalf of plaintiff/ respondent No.1 that it was always ready and willing to pay the remaining installment to appellant/defendant no.1, provided that defendant no.1 performed its reciprocal obligation.

55. It was also stated on behalf of plaintiff /respondent No.1 that appellant/ defendant no.1 did not have the lease deed in its favour even till the third 28 installment fell due, the lease Ex. DW1/A was executed on 04.07.1997 effective from 01.11.1990, thus, appellant/ defendant no.1 could not execute the documents to obtain approval of competent authorities and it was made retrospective to cover the lapses on part of defendants. It was next contended on behalf of defendant no.1/appellant that provisions of ULCR did not apply to it.

56. It would be relevant to refer to Section 26 & 27 of the ULCR Act. The relevant portion of Section 26 & 27 of ULCR act are reproduced as follows:

57. Section 26 of Urban Land (Ceiling & Regulation) Act, 1976 : Notice to be given before transfer of vacant lands. (1) Notwithstanding anything contained in any other law for the time being in force, no person holding vacant land within the ceiling limit shall transfer such land by way of sale, mortgage, gift, lease or otherwise except after giving notice in writing of the intended transfer to the competent authority.

58. Section 27 of Urban Land (Ceiling & Regulation) Act 1976 provides that "27. Prohibition on transfer of urban property (1) Not withstanding anything contained in any other law for the time being in force, but subject to the provision of Subsection (3) of section5 and sub section (4) of section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever is later except with the previous permission in writing of the competent authority."

59. Thus, section 27 of ULCR Act is attracted when sale of land with building or part of building is involved. Section 27 of ULCR Act would not be attracted where only vacant land unoccupied by any building or portion of a building is sought to be transfered. The object of this act is to impose ceiling on vacant land in urban area.

60. The contention of Ld. Counsel for appellant/ defendant No.1 was that provisions of ULCR Act did not apply to defendant No.1/appellant in view of guidelines No. 1/132 16UC dated 26.06.79 issued by Ministry. In this regard appellant/ defendant No.1 relied up Ex. DW1/R, however, it is pertinent to note that Ex. DW1/R was a letter addressed by defendant No.2 to defendant No.1 in response to letter of defendant No.1 to inquire whether provisions of Section 26 of the ULCR were applicable to defendant No.1 and vide Ex. DW1/R defendant No.2 clarified that section 26 of the ULCR Act did not apply to defendant No.1 in view of guidelines No. 1/132/76 UCU dated 23.12.1976 issued by Ministry of Urban Affairs. However, the said guidelines were not placed on record and their contention remained unsubstantiated. Thus, Ld. Trial Court rightly held that appellant/ defendant No.1 could not be exempted as suit property comprised of already built car parking basement.

61.Thus, Ld. Trial Court also rightly held that even if all the installments stood paid as per the allotment letter defendant no.1/appellant could not have executed the sub lease till they acquired right to execute the same and they acquired the right only on 04.07.1997. The Ld. Trial Court further rightly held that the contentions of appellant that lease was retrospective was of no consequence as lease was executed in favour of defendant No.1 by defendant No.2 after cancellation of the allotment to cover up their lacunas. Ld. Trial Court further rightly held that permission under the Income Tax Act and ULCR could not have granted without agreement to sell and perpetual lease in favour of appellant and in this regard PW1 stated that in view of Section 269 (UC) 3 of Income Tax Act the transferor was bound to take permission by applying an Form 37I with agreement to sell and ownership documents. His testimony went unchallenged. Ld. Trial Court thus, rightly held that till permission under the Income Tax and ULCR were obtained agreement to sell could not be executed and defendant no.1 was not exempted under ULCR Act and the reliance placed by defendant No.1 / appellant on Ex. DW1/R were 30 unsubstantiated as the defendants did not place on record the guidelines along with letter Ex. DW1/R.

62. Ld. Counsel for respondent No.1 /plaintiff also submitted that as per the income tax Act, it is the transferor who has to take permission after execution of agreement to sell provided that seller has clear title. Thus, Ld. Trial Court rightly held that after receipt of first installment, defendant No.1 had to execute all documents for obtaining approval as per Clause 5 (vi) of Ex. DW1/1. Plaintiff/ respondent No.1 further submitted that it had approached defendant No.1 several time to execute document of Income Tax Act, vide Ex. PW17/M and PW17/N, PW1/11 but of no avail. Thus, the plea of appellant that respondent No.1 never approached appellant for executing documents was rightly rejected by Ld. Trial Court.

63.Ld. Counsel for plaintiff/respondent no.1 contended that section 37 of the Contract Act provides that parties either perform their promises or offer to perform unless such performance is dispensed with or excused by the act and Ld. Trial Court held that if any authority was responsible for the delay in performing its obligation, the allottee could not be burdened with interest on the balance amount and authorities could not forfeit the security deposit in view of failure to fulfill its contractual promise.

64.On the other hand Ld. counsel for defendant no.1 contended that defendant no.1 was ready to execute the form and it was to be procured by the plaintiff/respondent no.1. The contentions of Ld. Counsel for appellant was that appellant was not required to perform in reciprocal obligation on receipt of the first installment, rather respondent No.1 was required to perform obligation and respondent No.1 could not withhold the the payment of remaining installments on the plea of non performance of reciprocal obligation by the appellant. However, I am of the view that as per the clause 5

(vi) of the allotment letter respondent No.1 had to initiate action for obtaining clearance from the Income Tax Authorities and ULCR Act. However, 31 Respondent No.1 did not initiate any action for obtaining any approvals.

65. It was alleged on behalf of appellant/ defendant No.1 that finding of the Ld. Trial Court erred in returning the finding that appellant was to execute the form No. 37I of Income Tax and apply for permission under Income Tax Act and ULCR Act on receipt of first installment.

66. In this regard it is relevant to note that as per section 269 UC (1 ) of Income Tax Act, no transfer of immovable property of the value of more than 5 lakhs shall be accepted unless the agreement of transfer is entered into between the seller and purchaser and in view of section 269 UC (2) of Income Tax Act, agreement has to be in writing and section 269 UC (3) of the Income Tax Act provides that every statement has to be in prescribed form and had to be furnished by parties to the transaction.

67. Ld. Counsel for defendant had contended that vide letter dated 18.10.1995 Ex. DW1/E, plaintiff was informed that allotment would be determined on 01.02.1996 if payment was not made on or before 31.01.1996. Ld. Counsel for appellant further contended that second installment had no connections with the approvals and appellant/ defendant No.1 was ready and willing to execute documents which were legally required to take the approvals. Ld. Counsel for appellant/defendant No.1 further stated that vide letter dated 18.10.1995, plaintiff was also informed that it was plaintiff who had to take permission under the Income Tax Act and ULCR Act before requesting for possession and the obligation of defendant No.1 was only to sign the document as per clause 5

(vi) of the allotment letter. However, in view of Section 269 UC (1) (2) of the Income Tax Act the seller had to execute the agreement to transfer with buyer, in writing and it is the seller who has to take no objection, Income Tax Clearance, thus, Ld. Trial Court rightly held that appellant/ defendant No.1 did not lead any cogent evidence on this issue and had made vague averrments that appellant/ defendant No.1 had performed all the obligations on receipt of first installment. On the other hand plaintiff/ respondent No.1 32 had deposed in his cross examination that it had written letter to the defendant/ appellant reminding them of their reciprocal obligation after receipt of the first installment as such the plaintiff had adduced evidence to show that second installment was not due and payable till reciprocal obligation was performed by appellant/ defendant No.1.

68. Thus, Ld. Trial Court rightly held that plaintiff/ respondent No.1 had proved that the appellant/ defendant No.1 did not perform its obligation for taking clearance as per clause 5 (vi) of the allotment letter and the contention of appellant/defendant No.1 that it was respondent No.1 / plaintiff who had to perform any obligation as per the law it is the transferor who had to take permissions from the requisite authorities. Ld. Trial Court also rightly held that as per clause 5 (vi) of the allotment dated 31.10.1994 the appellant / defendant No.1 was to execute the requisite documents for obtaining approvals.

69. Ld. Trial court further held that appellant / defendant No.1 in its brochure Ex. DW1/P3 stated that immediately after receipt of first installment the allotee with the help of appellant/ defendant No.1 would take necessary approvals from Income Tax Act and ULCR Act so that there was no delay, thus, stand taken by appellant/ defendant No.1 that it was exempted under ULCR Act also does not hold ground.

70. Ld. Trial Court further rightly held that appellant/ defendant No.1 had not been able to show that it was ready and willing to execute the relevant documents except Ex. DW1/O that too was after expiry of date of payment of second installment. It was also rightly held by Ld. Trial court that as per Ex. DW1/7 agreement to sub lease was to be executed by defendant No.1 & defendant No.2 with plaintiff i.e. President of India on one part and HUDCO on the second part, and allotee on the third part thus, it was a tripartite agreement. The ownership was however, vest in defendant No.2. Thus, Ld. Trial court rightly held that both the defendants were bound to execute the 33 agreement to sublease on receipt of first installment as per the terms of the allotment letter.

71. Ld. Trial Court also rightly held that from the correspondence between defendant No.1 & 2 Ex. PW24/1C, it was evident that appellant/ defendant No. 1 had admitted that since they had already allotted the properties at Andrews Ganj, they had to execute the agreement and sub lease with the allotees, and Ex. PW24/3T was legal opinion given by Ministry of Law and Justice, according to which cancellation of allotment of plaintiff/ respondent No .1 was illegal as appellant/ defendant No.1 did not perform its obligations. Ld. Trial court also rightly held that plaintiff/ respondent No.1 had paid the maintenance charges demanded by appellants which also shows that plaintiff / respondent No.1 was always ready and willing to perform its part of agreement whereas appellant/ defendant No.1 did not perform the obligation under the allotment letter even after receipt of first installment.

72.Thus, Ld. Trial rightly held that appellant/defendant No.1 committed breach of obligations which it was bound to perform as per the allotment letter. Issues No.1 & 2 were accordingly, rightly decided in favour of plaintiff/respondent No. 1 and against the appellant/defendant No1.

73.ISSUE NO. 3 : "Whether defendant No. 1 misrepresented that entire complex of community centre is approved when the building plans of 5 star hotel could not be sanctioned without approval of revised lay out plans and unless the unauthorized constructions carried out car park and other buildings constructed by defendant No.1at HUDCO place were regularized and whether defendant could demand the second installment in the absence of such approvals ?OPP"

74.The onus to prove this issue was on the plaintiff/respondent no.1.

75. In this regard Plaintiff/ respondent no.1 stated that the suit land was developed as per master plan 1962. The new master plan (MPD 2001) was notified on 01.08.1990 for development of convection centre but defendant 34 no.1 continued to construct buildings without sanction from authorities and within the knowledge of defendant no.2. PW1 also stated that master plan 1962 did not permit the construction of hotel in the community centre as evident from Table 3 of Master Plan 1962 Ex. PW16/B. He further stated that the defendant no.2 was fully aware that the building constructed by defendant no.1 did not have sanction of any authorities. He further stated defendant no.2 issued the allotment letter dated 27.03.1992 Ex.PW17/B & amended allotment letter Ex. PW17/E, in favour of defendant no.1 subject to the condition that the land would be utilized for development of hostel, guest house, conference hall, shopping arcade, community centre. The allotment letter stipulated that the construction plan would be approved from the local bodies before construction was started. He further stated defendant no.1 did not accept the terms of the allotment letter dated 27.03.1992 issued by defendant no.2 in their favour, thus defendant no.2 agreed to amend the conditions of allotment, and amended allotment letter dated 22.04.1993 was issued. He further stated that defendant no.1 did not disclose that revised lay plan was required to be approved by authorities and the car park, guest houses had no sanction and they did not possess lease of 99years on the date of bid. In this regard DW1 stated in her crossexamination that the user of community centre was approved in lay out plan by MCD.

76.The brochure of defendant No.1/ appellant Ex. PW17/NN provided for development of HUDCO Place as an integrated urban design centre, the relevant portion of the brochure is as under :

" INTEGRATED URBAN DESIGN The HUDCO Place, an integrated urban design complex with design controls, graphic signage, landscape, parking and other common services is being developed by Housing and Urban Development Corporation Ltd. (A Government of India Undertaking) under directions from Government of India, Ministry of Urban Development. It is a perfect blemd of traditional 35 ambience and up to date modern facilities. A spacious Central Plaza has been designed to create an environment of social interaction. A Five Star Hotel, Two Clusters of centrally airconditioned Guest House, each with six blocks, airconditioned Shopping Arcade, a Cultural Centre and a swimming pool are the highlights of this integrated urban complex. The two house clusters on either side of Central Plaza are designed as self contained units with facilities comparable to Star Hotels."

77. Ld. Counsel for respondent no.1/plaintiff contended that plaintiff was given to understand that the lay out plan was approved and the building plans for construction of hotel was to be obtained by plaintiff/respondent no.1 from the authority and the construction of car parking in the basement had approval from the local authorities. The plaintiff/respondent no.1 thus, had no reason to disbelieve defendant no.1. However, it was revealed that the lay out plan proposed by defendant no.1 was not as per the master plan and hotel was not permitted in community centre. It was also contended on behalf of respondent No.1/ plaintiff that concealment of the fact that building plans and revised lay out plan were not approved, was evident from letter dated 03.08.1997 addressed by defendant No.2 to defendant No.1, Ex.PW24/2N, wherein defendant no.2 sought fixing the responsibility of officials by defendant no.1 and looking into the causes of delay in the regularization of building plans for basement parking. Thus, defendant no.1 was aware that the lay out plan approved by MCD on 12.04.1994 Ex. DW1/C was subject to sanction of building plans from MCD in conformity with the master plan of 1962. The existing structure at the site were to be regularized.

78. It was also submitted on behalf of plaintiff/respondent no.1 that DW1 gave evasive reply in her cross examination to the question whether revised lay out plan submitted by defendant no.1 to MCD in 1995 was approved in 1998 stating that she knew only about the lay out plan and could not depose about the other facts. Ld. Trial Court rightly held that defendant no.1 did not have 36 approval of building plan of car parking basement from MCD, fire department and had not disclosed in the brochure that revised layout plan was required to be sanctioned before the building plan could be approved by MCD and the revised lay out plan was approved only in 1998. Thus, defendant no.1 violated the terms of allotment letter as it continued to construct buildings without sanction of lay out plan or sanction of building plans. Moreover, defendant no. 1 did not file any document showing that the car parking in the basement was approved before the construction work was started. Ld. Trial court further rightly held that defendant no.1 was required to get the revised lay out plan approved because in the earlier lay out plan the norms applicable were of MPD 1962 and after execution of lease the norms applicable were of MPD 2001. Ld. Trial Court further rightly held that building plan of five star hotel could not have been sanctioned by MCD till the structure built at Andrews Ganj/ suit project was regularized. Defendant No.1 did not disclose in the brochure and auction documents about the unauthorized construction, as it appeared to them that they would not be able to realize the full value of the property/ or more than reserved price fixed by defendant No.1. Ld. Trial Court rightly held that all the approvals were obtained by defendant no.1 after the cancellation of allotment of plaintiff and defendant no. 2/respondent 2 had objected to the suit land being utilized for development of guest house and hotels as per Ex. PW17/LA.

79. It was also contended by counsel for plaintiff that in allotment letter dated 27.03.1992 Ex. PW17/B issued by defendant no. 1 in favour of defendant no. 2, one of the contention was that land should be utilized for development of guest house, hotels, shopping and community centre and Lay out plan should be approved by the local authorities before construction was started. Ld. counsel for the plaintiff also contended that in the second allotment letter issued by defendant No.2 dated 19.03.1996 Ex. PW24/1P which superceded the allotment letter Ex.PW17/B, it was also stated that community centre could be 37 utilized for development of hotels and the building plan shall be got approved from the local authority before construction was started. It was further stated that in the perpetual lease dated 04.07.1997 Ex. DW1/A, the one of the conditions was that the defendant no. 2 shall start the construction of community centre after obtaining the requisite sanction from the authorities.

80. Ld. Trial Court also rightly held that the plaintiff had successfully proved that the defendant no. 1 misrepresented that the entire complex of the community centre was approved for construction of hotel whereas hotel could not be constructed thereon without approval of the revised layout plan and regularization of car parking. Ld. Trial Court also rightly held that the defendant no. 1 could not have demanded the second installment till approval of the building plan.

81. On the other hand it was alleged that appellant/ defendant No.1 did not misrepresent regarding approval of lay out plan and building plans. It was further submitted that MCD issued the letter dated 12.04. 1994 Ex.DW1/C whereby it was intimated that the standing committed of the MCD vide resolution dated 25.03.1994 had approved the lay out plan of hotel site and other project and lay out plan was Ex. DW1/D, thus, there was no misrepresentation by appellant/ defendant No.1. Ld. Counsel for appellant/ defendant No.1 submitted that no such misrepresentation was made in the brochure or at the time of bid or auction as in the brochure it was only stated that car park had been constructed.

82.It is alleged that Ld. Trial Court wrongly held that it was misrepresented that urban designs were approved. It was further submitted that no such misrepresentation was made, in Clause 4 of the Brochure it was stated that hotel building was to be constructed as per approved urban designs after obtaining building plans from the local authorities and DUAC. It was further stated that Ld. Trial Court also erred in holding that without the revised lay out plan and regularization of basement car parking building plan, hotel site 38 could not have been sanctioned and the appellant/ defendant No. 1 was thus, not entitled to demand the second installment. It was further submitted that the demand of installment had nothing to do with the revised lay out plan or regularization of existing structures or building plans and that misrepresentation was only in the replication which could not be done, as held in AIR 2000 (SC) 256 (DB) titled "Jeet Mohinder Singh Vs. Harminder Singh Jassi".

83. It was further alleged that DW1 had stated in his cross examination that MCD had not given notice to appellant/defendant No.1 in respect of car parking which shows that there was no unauthorized construction existing at the site which could affect sanction of plans of hotel building as such respondent No.1 / plaintiff could not have withheld the second installment on the basis of false pleas.

84. It was further rightly held by Ld. Trial Court that as per allotment letter Ex. PW24/IP dated 19.03.1996 issued by defendant No.2 in suppercession of earlier allotment letter, one of the conditions i.e. (iii) was that the land for Community Centre should be utilized for development of hostels, guest house facilities, conference hall, shopping and other community centre facilities. It was further stated that the Ex. PW24/1P also provided that the construction plan should be got approved from local bodies and DDA, Delhi Urban Art Commission before starting construction. Ld. Trial court further observed that even perpetual lease deed dated 04.07.1997 Ex. DWI/A provided that appellant should start construction after approval of building plan from the concerned authorities. Ld. Trial Court rightly held that revised lay out plan which were approved on 06.07.1998 were subject to that appellant/ Defendant No.1 getting the service plan approved from the respective department of MCD. It was further alleged that though appellant/ defendant No.1 relied upon the revised lay out pan dated 12.04.1994 but it was well aware that lay out plan approved by MCD on 12.04.1994 Ex. DW1/C 39 had undergone lot of changes and was required to be revised as it was stated in the said letter that applicant was to obtain sanction of building plan as per Master Plan 1962 and Paster plan 1962 did not permit hotel use as per the table to Ex. PW16/B.

85. PW1 further stated that appellant submitted proposal of the Community center in April 1995 97 to DUAC & DUAC sought various details from the appellant/defendant No.1. It was further stated that appellant/ defendant No. 1 had sought approval of revised lay out plan by submitting letter dated 17.02.1997 Ex. PW 8/B and were approved by MCD on 06.07.1998 as per Ex. PW 8/A, thus, there was no approval of plan at the time of cancellation of allotment.

86. Ld. Trial court further rightly held that appellant had not placed on record any document to show that car park was approved by DDA , MCD and DUAC before construction was started. Ld. Trial court further rightly held that lay out plan dated 12.04.1994 Ex. DW1/C was as per the master plan 1962. Thus, Ld. Trial Court rightly held that building plan of five star hotel were not sanctioned by MCD as all the structure on the side at the Adrews Ganj, were to be regularized including the car parking, at the time of publishing of brochure.

87. The Ld. Counsel for plaintiff/ respondent submitted that defendant obtained the NOC for the car parking from the fire department dated 25.10.1997 which Ex. PW17/RR. It was also pointed that the appellant/defendant No.1 sought approval of revised lay out plan by submitting letter dated 17.02.1997 Ex. PW8/B and plan was approved on 06.07.1998 as per Ex. PW8/A, thus, at the time of cancellation the defendant No.1 did not have the approval. Ld. Trial Court rightly held that DW1 gave evasive replies when being confronted with all these exhibits thus, plaintiff succeeded in proving that the complex of the Community Centre did not have the approval of the authorities at the time of bid and the five star hotel could not be sanctioned without approval of the revised lay out plan and unless unauthorized construction was regularized. It 40 was also evident that statutory approval of the car park basement pertains to dates after cancellation letter was issued and the approval of the sanction plan was also of the date after cancellation letter was issued. Thus, plaintiff proved that defendant No.1 did not have approval of the revised lay out plan. Accordingly, Ld. Trial Court rightly decided issue No. 3 in favour of the plaintiff/ respondent No.1 and against the appellant/defendant No.1.

88. ISSSUE No. 4: "Whether the act and conduct of the defendant No.1 and 2 was arbitrary, illegal and discriminatory while dealing with the plaintiff in respect of the suit property and whether defendants have permitted various time interest free extensions under similar conditions of allotment to Ansals Properties & Industries Ltd. As of plaintiff because car park was built unauthorized by defendant No.1? OPP"

89.The onus to prove this issue was on the plaintiff/ respondent No.1. In this regard, PW1 has deposed that various terms and conditions were relaxed for Ansal Properties Industries Ltd. who were allottees of shopping complex under similar condition as that of plaintiff. PW1 stated that Ansal Properties Industries Ltd. was given permission to raise the loan to pay installment though the same was not permissible under the allotment of the plaintiff as well as Ansal Properties Industries Ltd. Appellant/defendant no. 1 offered the possession of the land of Ansal Industries Ltd. which was never done in the case of plaintiff.

90. Ld. Trial Court held that plaintiff/ respondent No.1 and Ansal Properties & Industries Ltd. were allotted shopping arcade on the similar terms and conditions as that of the plaintiff. It was contended on behalf of plaintiff/ respondent No.1 that interest free extensions were granted to Ansal Properties & Industries Ltd. as car parking area was illegal and unauthorized and building plans as well as layout plan of the project were not sanctioned. Counsel for the plaintiff further alleged that plaintiff was threatened with cancellation of the allotment, in case second installment was not paid as per the allotment letter, 41 but interest free area was granted to Ansal Properties & Industries Ltd.

91. On the other hand, Ld. counsel for defendant no. 1/ appellant denied that they had cancelled the allotment of the plaintiff without any reason and also stated that the terms of the allotment of Ansal Properties & Industries Ltd. were completely different from that of the plaintiff. But Ld. counsel for plaintiff submitted that it was pertinent to note that the defendant no. 1 admitted in his WS that decision to grant extension of time to Ansal Properties & Industries Ltd. was referred to defendant no. 2 for their approval. It was also submitted on behalf of defendants no. 1 and 2 that their act against plaintiff were not arbitrary and discriminatory as compare to Ansal Properties & Industries Ltd. Ld. counsel for plaintiff further alleged that DW1 in her cross examination gave evasive reply stating that she was not dealing with Andrews Ganj project/suit property as such she was not aware of the facts of Ansal Properties & Industries Ltd. with defendant no. 1 .

92. Ld. Trial Court rightly held that car parking in the basement was built without sanction of the statutory authorities and approval of revised layout plan was required but the said fact concealed from the plaintiff. Ld. Trial Court held that conduct of defendants no. 1 and 2 arbitrary and discriminatory against plaintiff in respect of the suit property by not executing the sublease of suit property in favour of plaintiff but Ansal Properties & Industries Ltd. were granted permission to raise loan to interest though it was the condition of allotment letter of plaintiff and Ansal Properties & Industries Ltd. that no permission to avail the loan will be given to pay the installments. Further Ld. Trial Court rightly held that defendants no. 1 and 2 also granted interest free extension of time for payment of second and third installments, in view of delay in getting plans approval subject to condition that Ansas Properties & Industries Ltd. would not claim damages on behalf of delay and handing over the site and sanctioning of plan.

93.Ld. Trial Court also held that the submissions of the defendant no. 1 that the 42 car parking area of Ansals Properties & Industries Ltd. was different from car parking area allotted to the plaintiff does not have any force as it has been proved that it was the same car parking.

94. The terms and conditions of the car parking allotments made to both Ansals and Plaintiff were similar since both the allotees had to construct the building after getting the plan sanctioned for five star hotel and shopping arcade respectively but in the absence of the revised lay out plan, building plan of hotel could not be approved by MCD. Ld. Trial court held that Ansals Properties vide letter Ex. PW23/X and PW23/Y, Andrews Ganj had written to defendant No.1 stating that as unauthorized structure were existing on the site, building plan of shopping arcade were not entertained by the MCD and extension be granted by defendant No.1. The defendant No.1 / appellant vide letter Ex. PW23/y, granted 6 months extension to Ansals Properties to pay 2nd installment due to car parking basement being unauthorized. Ld. Trial Court also rightly held that Ansals Properties vide letter Ex.PW23/Z again sought extension of time to pay third installment and appellant/ defendant No.1 in this regard advised Ansals to make representation and the appellant/ defendant No.1 considered grant of interest free installment to Ansals vide letter Ex. PW23/HH and Ex.PW23/JJ which was not done in the case of plaintiff.

95. Ld. Trial court rightly held that same car parking was alloted to Ansals Properties and plaintiff/ respondent No.1 and extension of time to pay the installment was granted to Ansals because car parking basement being unauthorized which had to be regularized and without the revised lay out plan being approved the building plan of hotel in the case of plaintiff, could not have been sanctioned/ approved. Thus, Ld. Trial Court rightly held that extension were granted to Ansals because of the unauthorized constructions, which was also the case of the plaintiff/ respondent No.1. Thus, Ld. Trial court rightly held that defendants No. 1 & 2 had acted in arbitrary and in 43 discriminatory manner as far as respondent No.1/plaintiff is concerned in respect of the suit property as compared to Ansals. Accordingly, this issue was rightly decided in favour of plaintiff/ respondent No.1 and against the defendant.

96. ISSUE NO. 5. "Whether timely payment is essence of allotment letter dated 31.10.1994 in terms of clause No. 5 (iii) issued by defendant No.1 in favour of plaintiff and whether 2nd installment and 3rd installment were deferred payments payable in one year and two years for the date of possession on license basis to facilitate the allottee for construction of building there upon? OPP"

97.The onus to prove was upon the plaintiff. The Ld. Counsel for plaintiff/ respondent submitted that time was not the essence of the contract whereas the contention of Ld. Counsel for appellant was that as per clause 5 (ii)of the allotment letter Ex.DW1/1 the date of payment of installments were specified specified whereas no definite time or date had been specified for execution of the sub lease or of handing over of the possession as such time was the essence of contract. Ld. Counsel for appellant/ defendant further submitted that clause (iii) of the allotment letter and clause No. III of the performa of agreement to Sub lease Ex. DW1/7, clearly stipulated that if there will be default in timely payment of the installment, the deposited amount will be forfeited and allotment be canceled. It was further submitted that plaintiff/ respondent No.1 accepted the terms of the agreement/ allotment.

98. On the other hand Ld. Counsel for plaintiff/ respondent No.1 stated that in this regard PW1 specifically was asked in his cross examination as to whether in case of default such default would entail cancellation and forfeiture of the amount paid as per the allotment letter. PW1 replied that timely payment was not the essence nor appellant intended that time payment was the essence. It was contended on behalf of plaintiff/respondent No.1 that in the brochure Ex.PW1/20 floated by the appellant/ defendant No.1 in the year 1996 with regard to the guest house block in the same 44 HUDCO Place, it was mentioned that time of payment of premium is the essence of the contract but in the agreement sub lease Ex. DW1/7 it is no where stipulated that the time of payment was the essence of the contract. It was further submitted on behalf of plaintiff that in brochure floated by defendant No.1 Ex. PW1/20 relating to guest house block in the HUDCO place, time was the essence of the contract. Ld. Trial Court rightly held that whether time was the essence of the contract dependent upon the intention of the parties which has to be determine as per terms of the contract.

99. Ld. Trial Court has observed that in the present case bids were invited as per the terms of brochure Ex. PW17/NN, but none of the conditions in the brochure as well as allotment letter dated 31.10.1994 Ex. DW1/1 stipulated that timely payment would be the essence of allotment/ contract. It was further alleged on behalf of respondent No.1/ plaintiff that another brochure was floated in June, 1996 by defendant no. 1 Ex. PW1/20, in respect to guest house blocks in the same Hudco Place which provided as under: Condition (E) "It is to be noted that the time of payment of premium as per the allotment letter shall be the essence of conduct."

100. It was contended by the counsel for the plaintiff/respondent No.1 that if time for payment of premium was intended to be essence of the contract, it should have been stipulated as has been stipulated in the later brochures of Hudco Place.

101. Plaintiff relied upon another brochure floated in November, 1996 as Ex. PW1/21 which was regarding the another contract of suit property in which it is stipulated that the "time for payment of premium as per the allotment letter shall be essence of the contract and irrespective of whether the allottee has been able to start the construction on the allotted hotel site or not due to any reason whatsoever". Ld. Trial Court further observed that in the allotment letter dated 31.03.1997 Ex. PW24/2E of the suit property issued in favour of 45 Leeta Hotels & Convention Centre Ltd. Clause 4(ii) stipulated that "the time for payment of the premium as per the allotment letter shall be essence of the contract and irrespective of whether you have been able to start the construction on the allotted hotel site or not due to any reason whatsoever". Ld. Trial Court has also observed that in agreement to sub lease Ex PW1/7 which was proposed to be executed between appellant /defendant No. 1 & 2 and plaintiff/ respondent No.1, it is no where stipulated that timely payment was essence of the contract but Ex. PW17/QQ which is an agreement to sub lease of the suit property executed by appellant/defendant No.1 with Leela Hotels Ltd. on 04.07.1997 it is mentioned in Clause III that "the time for payment of the premium as stated hereunder shall be the essence of the contract and irrespective of whether the intended sublessee has been able to start the contraction of the demised premises or any reason whatsoever."

102. On the other hand DW1 had denied in her cross examination that time payment was not the essence of allotment letter. However, DW1 gave evasive replies stating that Ex. PW24/E and PW1/21 did not relate to the present suit but stated that according to allotment letter Ex. DW1/1 and brochure PW17/NN timely payment was the essence of the contract. Ld. Trial court held that neither the terms of allotment nor the brochure provided that time was the essence of contract. Ld. Trial court further held that even if in the contract time was the essence but there was no intention to follow it, it would make the clause redundant as held in Man/ DE/ 2108/2009 Delhi M/s H Dohli Construction Com. Pvt.Ltd. Vs.Mr. Thakur Das Malhotra & Ors. Thus, even though time was not the essence of the contract but in view of Section 55 (3) of the Contract Act in case defendant failed to perform his promise at the agreed time, he could not cancel the contract.

103. Thus, Trial Court also rightly held that appellant/defendant no. 1 did not have the approved revised layout plans to enable the plaintiff/respondent No. 1 to get the building plan sanctioned nor did they get the car park basement 46 regularized on the date of cancellation of allotment, hence, time could have not been the essence of allotment. Thus, Ld. Trial court rightly held that had timely payment been the essence of contract it would have been clearly stipulated in the allotment letter but it was not so. Issue No. 5 was thus, rightly decided in favour of the plaintiff/ respondent No.1 and against the appellant/defendant No.1.

104. ISSUE NO 6. : " Whether defendant No.1 had any valid allotment and lease of the subject land and in ther favour at the time of allotment to plaintiff? OPP"

105. The burden of proving of this issue was also upon the plaintiff. In this regard PW1 stated that defendant no. 1 did not have valid allotment and lease of suit property in their favour. PW1 further stated that defendant no. 1 did not possess right, title, interest in the suit property in the absence of perpetual lease in their favour which was executed in its favour by defendant No.2 on 04.07.1997 Ex DW1/ A. It was argued on behalf of plaintiff that it was immaterial that lease dated 04.07.1997 was made retrospective w.e.f 01.11.1990 as defendant violated the terms of allotment letter Ex. DW1/1. PW1 also stated that the lease of entire land was governed by the Government Grants Act. PW1 further stated that the defendant no. 2 was the owner of the suit land which was given to defendant no. 1 for development and defendant no. 1 had no right, title or interest in the said suit property and they were agent of defendant no. 2. PW1 further stated that the defendant no. 1 did not accept the terms and conditions of allotment letter dated 27.03.1992 issued by defendant no. 2, thus, defendant no. 2 agreed to amend the terms and conditions thereof and also executed a MOU with the defendant No.1. PW1 also stated that defendant No. 2 had objected that use of land for hotel was not in conformity with the allotment letters issued in favour of the defendant No.1. He further stated that defendants no. 1 offered the suit property illegally without obtaining of any statutory approval of DDA, MCD and Fire Department. Defendant no. 1 also offered the said property with 47 unauthorized car parking. It was also submitted on behalf of plaintiff/ Respondent No.1 that defendant No.1 concealed the fact that it did not have lease of 99 years in its favour on the date of bid. PW1 also stated that when bid was invited, allotment were issued and plaintiff's allotment was canceled. MOU as required under the terms of allotment in favour of defendant No.1 by defendant No.2 and perpetual lease were not executed between defendant No. 1 & 2. It was further stated that defendant no. 1 could not execute agreement to sublease with plaintiff unless lease deed was executed between defendants no. 1 and 2 and the MOU was required to be executed between defendants no. 1 and 2 for disposal of the suit property. PW1 also stated that defendant no. 2 did not approve the lease and sublease till December, 1996, thus, no agreement to sublease could be executed by defendant no. 1 in favour of plaintiff, as defendant no. 1 did not have right, title or interest in the suit property without a perpetual lease executed in their favour. It was also alleged that defendant No.1/appellant could not have alloted the suit land without acquiring the right, title, interest in it and defendant No. 2 had objected to allotment made in favour of plaintiff as defendant No. 2 vide Ex. PW17/LA. PW1 also stated that defendant no. 1 was to execute the documents for obtaining approval but defendant no. 1 kept silent as it could not execute the documents in absence of lease in its favour nor defendant No.1 could enter into agreement for sub lease with plaintiff. PW1 stated in his cross examination that it made inquiry regarding ownership/ title of the suit land from defendant No.1. PW1 also stated that defendant no. 2 had informed that allotment could only made with its prior permission. On the other hand DW1 stated that defendant no. 1 is government company registered under the Companies Act and further stated that lease deed was executed on 04.07.1997 between defendants no. 1 and 2 for 99 years, but was made effective w.e.f 01.11.1990. DW1 further stated that defendant no. 2 had conveyed to defendant no. 1 regarding allotment of land measuring 43.6 acres at 48 Pinjrapole, Adrews Ganj to defendant no. 1. DW1 further stated that as per the terms of allotment letter dated 15.06.1993 and lease deed dated 04.07.1997 Ex. DW1/A, defendant no. 1 had right to further allot the land and was not required to take permission of Union of India/defendant No.2. DW1 further stated that prior to the execution of lease deed, defendant no. 1 was empowered to allot the land in question under the letter of allotment issued by defendant no. 2. DW1 also stated that defendant No.1 was given right to take decision of investment and disposal vide allotment letter dated 15.06.1993. Ld. Counsel for appellant stated that DW1 in her cross examination, stated that allotment letter dated 01.11.1990 was issued in favour of defendant no. 1 by defendant no. 2 simultaneously with the handing over of possession and DW1 denied that defendant no. 1 had to take permission from defendant no. 2 with regard to the suit property. DW1 also denied that the lease deed was not a perpetual lease and stated that it was 99 years lease and further stated that allotment letter dated 19.03.1996 issued by defendant no. 2 in favour of defendant no. 1 did not superceed allotment letter dated 27.03.1992 but it had to be read in continuation with it. DW1 denied that the lease dated 04.07.1997 was made operative retrospective to cover wrong declaration made by defendant no. 1 in the brochure.

106.Ld. Counsel for plaintiff contended that as the terms and condition of allotment letter dated 27.03.1992 were not acceptable to defendant No.1, it sought certain amendments in the letter dated 27.03.1992 which were made vide letter dated 02.04.1993 Ex. PW24/H. Thereafter, allotment letter Ex. PW24/1P dated 19.03.1996 was issued by defendant No.2 in favour of defendant No.1 where it is recorded that it was in supercession of letter dated 27.03.1992. Defendant No.1 thereafter sought further amendments which were allowed by defendant No.2 vide letter Ex. DW1/P171. Thus, Ld. Trial Court held that letter dated 15.06.1993 was not allotment butt sanction of land in favour of defendant No.1/appellant and defendant No.2 issued fresh 49 allotment dated 19.03.1996, in supercession of all earlier letter of allotments. Thus, Ld. Trial court rightly held that defendant No.1 did not possess right to transfer the suit property to plaintiff till allotment of lease in its favour. Issue No. 6 was rightly decided in favour of plaintiff/respondent No.1 and against the defendants.

107. Thus, the plaintiff succeeded in proving that defendant no. 1 did not have valid allotment lease of 99 years in its favour on the date it issued allotment letter Ex. DW1/1 and stated that DW1 stated in her cross examination in this regard that defendant no. 2 has superseded all earlier allotment letters and the fresh allotment letter dated 19.03.1996 issued in supercession to all earlier terms and conditions of allotment. Thus, the defendant no. 1 did not possess the right, interest in the suit land in the absence of lease in their favour which admittedly they subsequently obtained on 04.07.1997 and it was made retrospective from 01.11.1990 to cover the lacunas in the case of defendants.

108. ISSUE NO. 7: "Whether legally construction of 5 star hotel was permitted in the said Community Centre as per old Master Plan MPD 1962 under which said Community Centre was alloted to defendant No.1 by defendant No.2 and whether the lease and allotment in favour of defendant No.1 specified the use of land for construction of hotel ? OPP".

109. The onus to prove this issue is upon plaintiff/ respondent No.1. The contention of appellant/ defendant No.1 was that MCD had approved the lay out plan of suit property vide letter dated 12.04.1994 for the hotel and other projects which Ex. DW1/ C and the lay out plan was Ex. DW1/D, thus, construction of five star hotel was permitted. It was also alleged that neither allotment nor lease in favour of appellant /defendant No.1 prohibited the construction of hotel on the site. It was also alleged that as MCD had approved the lay out plan of entire HUDCO place for development of community centre with earmarked hotel site the construction of five star hotel was thus, permitted in the same community centre as per old master 50 plan 1962.

110. On the other hand PW1 stated that as per the allotment letter dated 31.10.1994 and till the said allotment was canceled on 02.05.1996, construction of five star hotel was not permitted on the suit property which comprised of community centre. It was also submitted on behalf of the plaintiff/respondent No.1 that even the DDA did not permit the use of suit land as a hotel.

111. PW1 stated that the suit land was to be developed as per the MPD 1962 (Ex. PW16/B) and new MPD 2001 was notified on 08.09.1992 wherein it was notified that the suit land was to be used for development of community centre but defendant no. 1 continued to build structure without sanction from statutory authority, but within the knowledge of defendant no. 2. On the other hand, counsel for defendant no. 1 had submitted that layout plan was approved on 12.04.1994 by MCD and construction of hotel in community centre was permitted in the MPD, 2001. It is pertinent to note that as per notification Ex.PW16/A, Central Government in public interest restored land use of Andrews Ganj retrospectively to MPD 1962 and in the table of community centre of the master plan 1962 Ex. PW16/B, there was no mention of use of hotel in the MPD 1962. Ld. Trial Court further held that in the allotment letter dated 19.03.1996, hotel was not specified in the condition of the said allotment letter issued to the defendant no. 1, thus, use of land for hotel was not permitted as per allotment letter and the MPD 1962. Ld. Trial Court has observed that use of hotel was not mentioned, thus, defendant no. 1 was not authorized to allot suit land for hotel to plaintiff. Ld. Trial court further rightly held that vide Ex.PW24/X defendant No.2 objected to allotment of suit land for construction of hotel. Ld. Trial Court also rightly held that plaintiff had succeeding in proving that use of land for hotel was contrary to the land use restored under the notification dated 08.09.1992 Ex. PW16/A and the table annexed with it Ex.PW16/B. Ld. Trial Court thus rightly concluded that as per the allotment letter issued by defendant no. 2 in favour of 51 defendant no. 1 dated 19.03.1996 Ex. PW24/1P, it was specified that community centre could be utilized for development of hostel, conference hall, shopping arcade. The use of hotel was not specified in the condition of allotment. Ld. Trial Court further rightly held that as per the Ex. PW24/2M, lessee could grant only those rights which it possessed. Ld. Trial Court also rightly held that plea of defendant that lease deed dated 04.07.1997 was retrospective in effect was without any basis as MPD 1962 was applicable to suit land under which hotel use was not permitted, as per Ex.PW16/ A. The defendant No. 1 / appellant thus, executed lease deed dated 04.07.1997 Ex. DW1/A as per MPD 2001 regularizing the use of land for hotel. Ld. Trial Court thus, rightly held that use of land for hotel was regularized in the revised layout plan approved as per MPD 2001 which was much after of execution of perpetual lease deed dated 04.07.1997. Ld. Trial Court thus, rightly held that defendant no. 1 did not have the right to allot the land for five star hotel till execution of perpetual lease. Accordingly, this issue was decided in favour of plaintiff and against the defendants.

112. ISSUE No. 8: "Whether defendant No.1 is an agent of defendant No.2 and whether defendant No.1 was given the said land under Government Grant Act and whether defendant No.1 was to take permission of defendant No. 2 before allotments, permission to mortgage, any extension of payments and cancellation of allotments and whether defendant No.1 took the permission/ approval of defendant No.2 regarding allotment/ cancellation of allotment of plaintiff? OPP"

113. The onus to prove this issue was also on the plaintiff/ respondent No.1. It was submitted on behalf of plaintiff/respondent No.1 that appellant/ defendant No.1 filed affidavits Ex.PW18A to PW18/E in Civil writ petition No. 3179/94, for setting aside the assessment orders by MCD, stating therein that appellant/ defendant No.1 was an agent of defendant No.2 and had no right, title, interest in the suit property. It was also stated that defendant No.2 had 52 given the land to defendant No.1 for development.

114.It was also submitted on behalf of plaintiff that the suit land was given to defendant No. 1 under the Government Grant Act and in this regard reliance was placed upon allotment letter issued by defendant No. 2 in favour of defendant No.1. It was also submitted that in the allotment letter dated 27.03.1992 Ex. PW17/B and 19.03.1996 Ex. PW24/1P wherein it was stated that lease would be governed by Government Grants Act thus, defendant No.1 was to take permission of defendant No. 2 before allotments, permission to mortgage, extensions of payments and cancellation of allotment and defendant No.1 could not take any decision without the approval of defendant No.2. It was further contended on behalf of plaintiff/respondent No.1 that in this regard DW1 had stated that suit land was alloted to defendant No.1, vide allotment letter dated 15.06.1993, Ex. DW1/ B and allotment was to be governed under the Government Grants Act, thereby admitted that suit land was to be governed by Government Grants Act.

115. However, Ld. Counsel for appellant/defendant No.1 stated that DW1 stated that as per the allotment letter dated 15.06.1993 Ex. DW1/B and lease deed dated 04.07.1997, defendant No.1 had right to further allot the land and did not require the permission of defendant No.2. In this regard DW1 also stated that defendant No.1 was a legal entity and not an agent of defendant No.2. DW1 evaded to answer the question, whether defendant No.1 is an agent of defendant No.2 in respect of the suit property and stated that it was not related to the controversy and testified that defendant No.1 was allowed to take decision in respect of the allotments / disposal of the suit property and did not require permission of defendant No. 2 for allotment/ mortgage/ cancellation of allotment.

116. Ld. Counsel for appellant/defendant No.1 also contended that allotment of land was made by defendant No.2 in favour of defendant No.1 vide various allotment letters issued from time to time. It was alleged that as per clause 53

(iii) of the allotment letter dated 15.06.1993 Ex. DW1/B "All investment, disposal decision of the project in the community centre were to be taken by HUDCO (defendant No.1)". Thus, appellant was authorized to take all decisions of investment, disposal of property. It was also alleged on behalf of appellant/ defendant No.1 that in this regard DW1 stated in her cross examination that respondent No.2 did not object to the cancellation of the allotment of respondent No.1/ plaintiff. DW1 also stated that no cabinet approval was required prior to allotment. Thus, Ld. Trial court erred in deciding this issued against the appellant.

117. However, I am of the view that Ld. Trial Court rightly held that defendant No. 1 was an agent of defendant No.2 and they had no right title or interest in the suit property in view of Ex. PW18/A to 18/E. Ld. Trial Court also rightly held that as per the lease deed Ex. DW1/A executed by defendant No. 2 in favour of defendant No.1, it retained all the powers to review the arrangements with lessee. Thus, Ld. Trial Court rightly held that defendant No.1 was an agent of defendant No.2 inspite of lease executed by defendant No.2 in favour of defendant No.1 as Clause (ii) C of the lease deed dated 04.07.1997 provided that defendant No. 2 had the right to review the arrangement with defendant No.1 and enter into fresh arrangement with any Government agency or public sector undertaking for the purpose of lease/ maintenance.

118.Moreover, DW1 evaded question on Ex.PW18/A to PW18/E stating that she had no idea of the said litigation. Moreover, these documents were not controverted even during arguments, thus, it is an admitted fact that in their own affidavit defendant No.1/appellant had admitted that it was an agent of defendant No.2 in respect of the suit property. Thus, defendant No. 1 was not authorized to take decision without approval from defendant No.2. Thus, Ld. Trial Court rightly held that plaintiff had proved that the suit land was given by defendant No.2 to defendant No.1 under Government Grants Act and defendant No.1 was an agent of defendant No.2 and had to seek the 54 permission of defendant No.2 before allotment, cancellation, permission to mortgage, extension of payment which was not done in the case of plaintiff/ Respondent No.1.

119. Moreover, Ld. Trial court also rightly held that letter dated 15.06.1993 issued by defendant No. 2 in favour of defendant No.1 was not an allotment letter but was a letter issued by L & DO and the letter dated 19.03.1996 was the allotment letter. It was also pertinent to note that vide Ex. PW2/ K and Ex. PW 24/T decision made by defendant No.1 on bids were sent to defendant No. 2 for approval, which also proves that defendant No.1 was an agent of defendant No.2 and defendant No. 1 ought to have taken permission for cancellation of allotment of plaintiff. This issue was also rightly decided in favour of plaintiff and against the defendants by Ld. Trial Court.

120.ISSUE NO. 9: "If above issues are proved whether in view of the above issue the plaintiff is entitled to the decree of declaration as claimed in the suit in respect of letter dated 02.05.1996, issued by defendant No.1 as null and void? OPP." This issue relates to relief as such it would be dealt with in the end.

121. ISSUE No.10: " Whether the suit has not been properly valued for the purpose of court fees and jurisdiction? OPD." The onus to prove this issue was on the defendants, however, defendants did not lead evidence in this regard. It was submitted on behalf of appellant/defendant that plaintiff filed a suit for declaration of letter dated 02.05.1996 as null and void, the said letter pertains to cancellation of allotment of immovable property of Rs. 78,10,00,000/ (Rupees Seventy Eight Crores Ten Lakhs Only) and plaintiff has valued the suit for the purpose of court fees and jurisdiction at Rs. 1,05,000/ (Rupees One Lakh Five Thousand Only) and has paid nominal court fees. It was also submitted on behalf of appellant/defendant No.1 that plaintiff had initially sought consequential relief of possession but it was abandoned latter and due to inability to pay the court fees on the same thus, the suit for declaration was not maintainable. It was further submitted that subject matter of the suit 55 was beyond the pecuniary jurisdiction of the court. It was further alleged on behalf of appellant/ defendant No.1 that letter of allotment of suit property dated 31.10.1994 was for consideration of Rs. 78,10,00,000/ (Rupees Seventy Eight Crores Ten Lakhs Only), the allotment was cancelled vide letter dated 02.05.1996 and the first installment of Rs. 27, 04,000/ was forfeited.

122.On the other hand it was contended on behalf of respondent No.1/plaintiff that plaintiff has sought relief of declaration without consequential relief as no consequential relief was required to be claimed and plaintiff had abandoned the consequential relief which could not have been granted. It was also submitted on behalf of respondent No.1 that Article 17 Schedule II of the Court Fees Act was applicable to the present suit and fixed court fees was payable under this Article as present suit was for declaration only and plaintiff had accordingly, paid the court fees. Article 17 Schedule II Clause (iii) of the Court Fees Act is as follows: Proper Fee

(iii) To obtain a declaratory decree where no consequential relief is prayed, Ten Rupees

123.It was further submitted on behalf of plaintiff that the suit was correctly valued for the purpose of court fees and jurisdiction. It was further contended on behalf of plaintiff/ respondent No.1 that while deciding the question relating to court fees, only the averrments made in the plaint are to be taken into consideration and the averrments made are to be assumed to be correct, the plea taken by defendant are not relevant in this regard.

124. It was also submitted by Ld. Counsel for plaintiff/ respondent No.1 that Section 7, (iv) (C) of the Court Fees Act 1870 provide for the court fees payable in a suit for declaratory decree with consequential relief which is according to the amount at which relief sought is valued in the plaint. It was further submitted that as plaintiff has not prayed for consequential relief its case 56 would fell under the Article 17 Schedule II Clause (iii) of the court fees Act. It was also submitted on behalf of plaintiff / respondent No.1 that no relief can be said to be consequential to a declaration unless it cannot be granted without declaration.

125.Ld. Trial Court held that litigant could not be said to have evaded the payment of court fees in case he asked for relief to which he is entitled and on which lesser court fee was payable and placed reliance on AIR 1953 SC 28 titled as Nemi Chand Vs.Edward Mills Co. Ltd. as follows: (A) Courtfees Act (7 of 1870), Sch. II, Art. 17 and S. 7 (iv) (c) Courtfees on appeal Additional relief relinquished, the only relief asked being for declaration Appellate Court cannot throw not appeal on ground that additional relief should have been claimed and courtfee paid thereon No claim for consequential relief held could be read in claim for declaration. A memorandum of appeal, as provided in Art. I of Sch. I. Courtfees Act. has to be stamped according to the value of subject matter in dispute in appeal; in other words, the relief claimed in the memorandum of appeal determines the value of the appeal for purposes of court fee. It is always open to the appellant in an appeal to give up a portion of his claim and to restrict it. It is further open to him, unless the relief is of such a nature that it cannot be split up, to relinquish a part of the claim and to bring it within the amount of court fee already paid. For the purpose of deciding whether the memorandum of appeal was properly stamped according to the subject mater of the appeal, it is not open to the Court to canvass the question whether the suit with the second prayer for the appointment of a receiver eliminated from it, fell within the mischief of the proviso to Section 42, Specific Relief Act. That is a question which relates to the merits of the appeal and does not concern its proper institution.

126. Thus, Ld. Trial Court rightly held that the amount of court fees payable had to be determined on the basis of allegations made in the plaint and not on the pleas of the defendant. It was also held that Section 8 of the Suit valuation 57 Act was not applicable since the suit did not fall under section 7 (iv) e of the Court Fees Act and Section 8 of the Suit valuation Act would only apply to the cases falling under section 7 (iv) ( c ) of the Court fees Act. Thus, in view of the above judgment, Ld. Trial court rightly held that the suit was correctly valued for court fees & jurisdiction.

127. ISSUE No.11. "Whether suit as framed is not maintainable? OPD".

And

128.ISSUE NO. 13 : "Whether the suit of plaintiff is barred by provisions contained under the Specific Relief Act? OPD".

129.Both the issue No. 11 and Issue No. 13 being correlated, are taken up together.

130. The onus to prove these issues were upon the defendants. The question for determination is "Whether the suit was maintainable without plaintiff asking for consequential relief ?" Section 34 of the Specific Relief Act relates to declaration of status or right and is as follows : " Discretion of court as to declaration of status or right: Any person entitled to any legal character, or to any right as to any property, may institute as suit against any person denying, or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief:

Provided that no court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so".

131. The contention of Ld. Counsel for appellant/defendant No.1 was that respondent No.1/ plaintiff was able to seek 'further relief' with declaration but did not do so as such the suit was barred by Proviso to Section 34 of the Specific Relief Act. It was also alleged that the 'further relief' which plaintiff/ respondent No.1 could have sought was for 'possession' and damages. It was further alleged that findings of Ld. Trial court on this issues were erroneous and Ld. Trial Court erred in holding that relief of declaration could be sought 58 by plaintiff, in view of Section 9 of the CPC. It was further alleged that plaintiff/ respondent No.1 could take recourse to Section 9 of the CPC only if his suit did not fall within the proviso to Section 34 of the Specific Relief Act and was not expressly or impliedly barred by any statute. It was further stated that Specific Relief Act was a special law to dealt with the suit for declaration whereas Section 9 of CPC is a general law. It was further stated that in case the suit fell within the special law recourse could not be taken to general law. It was further submitted that in AIR 1975 SC 1810, titled as S G Films Exchange Vs. Brijnath Singhji, it has been held that section cannot be deemed exhaustive to every kind of declaratory relief or to circumscribe the jurisdiction of Courts to give declarations in appropriate cases falling outside Section 34 of the Specific Relief Act (Section 42 of Old Specific Relief Act).

132. (A)Specific Relief Act (1 of 1877), S.42 Declaratory relief under - Scope of Discretion of Court - Court can grant declaration according to circumstances of case independently of the requirements of the section. AIR 1952 Punj 387, held impliedly overruled by AIR 1967 SC 436.

Section 42 merely gives statutory recognition to a well recognized type of declaratory relief and subjects to it to a limitation, but it cannot be deemed to exhaust every kind of declaratory relief or to circumscribe the jurisdiction of Court to give declaration of right in appropriate cases falling outside Section 42.

133. Thus, the contention of Ld. Counsel for plaintiff is also fortified by the judgment relied upon by Ld. Counsel for appellant/ defendant No.1 that court can grant declaration independently of the requirements of Section 34 of Specific Relief Act according to the circumstances of the case.

134.Ld. Counsel for appellant/ defendant No.1 further contended that as plaintiff/ respondent No.1 abandoned the relief of possession in the present suit and had withdrawn the previous suit, the present suit was not maintainable and in this regard Ld. Counsel for appellant/ defendant No.1 relied upon the following judgments: 59 135.47 (1992) DLT 649 R K Auga Vs. D D A , wherein it has been held as follow : Code of Civil Procedure, 1908 - Order 39 Rules 1 & 2 - Application for interim injunction - Plaintiff already withdrawn a similar suit - Application under Sections 151 & 152 filed in earlier suit was also dismissed - Application for injunction in subsequent suit seeking same relief - Whether maintainable ? (No)

136. AIR 1996 SC 462 Muni Lal Vs. The Oriental Fire & General Insurance Company Ltd and another.

"Civil - amendment of plaint - Order 6 Rule 17 of CPC, 1908 and Sections 4, 24 and 28 of Indian Contract Act, 1872 - suit for declaration that appellant - plaintiff entitled to payment of compensation for loss of insured vehicle - suit dismissed on ground that suit for mere declaration without consequential relief for payment of compensation for loss of vehicles not maintainable - question of granting amendment to include prayer for consequential relief granting of amendment of plaint seeking to introduce alternative relief of mandatory injunction for payment of specific amount bad in law - alternative relief was available to appellant to be asked for when he had filed suit for declaration but he failed to do so - he cannot be permitted to amend plaint after suit was barred by limitation during pendency of proceeding in Appellate Court.

137. AIR 1993 Supplementary SC 957 titled as Vinay Krishanw V/s Keshav Chandra and another wherein it has been held as under: "Contract - possession - for declaration of title of suit property - plaintiff specifically averred her exclusive possession of suit property - plaintiff did not seek additional relief of possession - in written statement both defendants raised plea of bar under Section 42 on plea of bar being raised plaintiff ought have amended plaint and prayed for relief of possession also - plaintiff did not choose to do so and took risk - plaintiff was not in exclusive possession - relief of possession should been asked for - failure to do so bars discretion of Court in granting decree for declaration".

138.AIR 2007 Delhi 183 Virender Gopal V/s Municipal Corporation of Delhi 60 wherein it was held as under : In light of above principles, now we may revert back to the facts of the present case. The plaint is vague, uncertain and does not plead any essential facts. No reference has been made in the plaint as to on what basis the appellant claims ownership of the land except a bald averment in the plaint that the plaintiff is owner to the extent of half share. No document of ownership or title has been placed on record. Be that as it may, it gives no details and even the date on which the possession was taken. Once the possession has been taken by the Corporation and it has carried out much development activities on the land in question for years together, the plaintiff was required to claim the relief of possession failing which the suit would be hit by the provisions of Section 34 of the Act. The appellant took no steps even during the pendecny of the suit to amend his plaint despite the fact that definite objection had been taken in regard to maintainability of the suit by the corporation. Thus, the plaintiff by his own conduct has permitted the suit to become even time barred at the face of it. Even in the appeal, there is no application for amendment. Admittedly, being out of the possession, the suit of the plaintiff, as framed, would not be maintainable and the finding recorded by the court in this regard do not call for any interference. Furthermore, as already noticed above by us, the plaintiff had earlier filed a suit for injunction and again the present is filled for injunction. In the plaint, no effort has been made by the appellant to show that the present suit is not hit by the provisions of Order 2 Rule 2 of the CPC.

139. 2008 (38) PT C222 (Del) Ravissant Pvt. Ltd. Vs. D.F.Export S.A. (Formerly known as Franklin Export S.A.) "Section 34 obliges every litigant seeking a declaration to club all the reliefs which he is capable of seeking, as a consequence to that relief. In this case, the plaintiff has made extensive references to the alleged expenses incurred by it on account of the representations of the defendant to it, about the possibility of a master franchise agreement. Those expenses have been clearly articulated in monetary terms. Yet, 61 the plaintiff has consciously chosen not to seek any relief in that regard. Instead, it seeks two declarations i.e. That the master franchises agreement stood executed, and that the examination of contract was illegal". In the present case, the plaintiff has not sought the consequential relief. The plaint averrments show that such a claim was available. In view of these facts, the reliefs of declaration are clearly barred.

140. However, the plaintiff / respondent No.1 submitted that section 34 of the Specific Relief Act was not exhaustive of the declaratory reliefs and declaration could be granted under the general law. After considering the submissions of parties, I am of the view that the object of section 34 is to remove the cloud which may be casted upon legal character of the plaintiff or his right to the property. Section 34 of Specific Relief Act entitles a person to come to the court for declaration, if he is entitled to any legal character, any right to any property and defendant is a person who denies or is interested to deny his title to such character or right. The object of provisions is to prevent multiplicity of litigation by preventing a person from getting a mere declaration of right in one suit and thereafter, seeking the remedy without which declaration would be useless. Thus, the 'further relief' referred to in the proviso must be a relief flowing directly from declaration sought. However, relief not available on the date of suit need not to be claimed. The proviso refers to the position of the plaintiff on the date of the suit, therefore, the plaintiff's right to maintain suit of declaratory decree is not affected, in case on the date of the suit he could not have claimed any 'further relief'.

141. The present suit has been filed for declaration of cancellation letter dated 02.05.1996 as null and void. It is admitted fact that after the allotment letter of plaintiff was cancelled fresh bids were invited and the property was alloted to Leela Hotels Ltd. though it was subject to the outcome of the present suit. Thus, on the date of filing of the present suit on 24.01.1997, plaintiff could not have sued for possession in view of the reallotment of the suit property in 62 favour of Leela Hotel Pvt. Ltd. In this regard defendants No.1 & 2 stated in their WS that due to breach of terms and conditions of the allotment letter, the allotment of plaintiff/ respondent No.1 was cancelled and defendant No. 1 invited the fresh tenders to which response was good and Leela Hotel Pvt. Ltd. being highest bidder was alloted the suit property. Agreement to sub lease was executed between defendant No.1 and Leela Hotel Pvt. Ltd and Leela Hotels Pvt. Ltd. was given provisional possession for construction of hotel building, though subsequently allotment of Leela Hotel Pvt. Ltd was also cancelled as Leela Hotel Pvt. Ltd could not pay the installment on due date. Thus, as defendant No.1 had invited fresh tenders after cancellation of plaintiff's allotment and realloted the suit property to Leela Hotels Pvt. Ltd, the plaintiff at the date of filing of the suit could not have sought relief of possession. As regard the plea of appellant/defendant No.1 that plaintiff ought to have sought consequential relief of damages but has not done so, as such declaratory suit is hit by proviso to section 34 of the Specific relief, as plaintiff omitted to sue for 'further relief' arising out of the same cause of action, but in this regard it is pertinent to note that it has been held in Radha Gobinda Roy & Ors vs. Sri Sri Nilkantha Narayan Singh & Ors. AIR 1951 Patna 556 that if plaintiff omits to sue for a particular relief arising out of same cause of action, he will at the most forfeit his right to sue afterwards in respect of that relief (under Order 2 rule 2 CPC). It is further held "Plaintiff is not bound to seek all remedies open to him. Thus, if plaintiff omits to sue for the further reliefs, it will not affect the maintainability of the suit".

142. However, I am of the view that Ld. Trial Court was rightly of the view that plaintiff was not entitled to physical possession of the suit property unless sub lease was executed in its favour by defendant No.1 and defendant No.1 did not have a perpetual lease in its favour on the date of cancellation of allotment and in the absence of perpetual lease in its favour, defendant No.1 could not execute sub lease and hand over the possession. It was also rightly 63 held by Ld. Trial Court that defendant No.1 had stated in its WS that possession of land could be given only on execution of agreement to sell and agreement to sell could not be executed till permission was obtained from the Income Tax Authority (clearance in Form 37 I of the Act) which was mandatory prior to execution of agreement to sell. Thus, agreement to sell could not have been executed without Income Tax clearance. The claim of appellant/ defendant No.1 was that it was exempted from Urban Land and Ceiling Regularization Act as per Ex. DW1/R1 but it has been held that it was not exempted. The controversy in this regard has been decided vide Issue No.1 & 2.

143. Thus, it was rightly held that "further relief" must flow from the relief of declaration but if it is not connected with the cause of action, the plaintiff need not claim it. Ld. Trial Court also rightly held that the cause of action of present suit arose on cancellation of allotment letter and the plaintiff was not entitled to right, title to suit property without a sub lease in its favour as such no 'further relief' could have been claimed. Ld. Trial Court held that "further relief" was to be claimed only in case where decree would become infructuous, in case 'further relief' was not prayed for. Ld. Trial Court further rightly held that had plaintiff/ respondent No.1 paid all the installments even then it would have not acquired right, title or interest to the suit property until agreement to sub lease was executed in its favour by appellant/ defendant No. 1 and the same could only be done by defendant No.1 after defendant No.2 executed a lease in its favour as such plaintiff / respondent No.1 could not have asked for any "further relief" on the date of institution of suit on 24.01.1997. The perpetual sub lease was executed by defendant No.2 in favour of defendant No.1 on 04.07.1997. The Ld. Trial Court rightly held that the fact that the perpetual lease was retrospective in operation was of no consequence. I also agree with the Ld. Trial Court's view as it was done only to cover the lapses on parts of the defendants. Moreover, it was not mentioned 64 in the allotment letter dated 27.03.1992 and 19.03.1996 issued by defendant No. 2 in favour of defendant No.1 that the perpetual lease would be retrospective in operation. Neither was it mentioned in the allotment letter Ex. DW1/1 that the lease deed between defendants No.1 & 2 was to be retrospective in operation. The only condition iimposed in Ex. DW1/1 was that plaintiff/ licensee was to ensure that the general conditions of sub lease entered into between defendant No.1 and plaintiff and defendant No.1 & defendant No.2, are complied with and the space alloted to plaintiff is used for the purpose prescribed. Thus, Ld. Trial Court rightly held that plaintiff could claim possession to the suit land only after agreement to sell was executed by defendant No.1 in its favour and as per DW1/7 the proposed agreement to sell, defendants continued to have right to reenter the land till the sub lease was executed. Thus, Ld. Trial Court rightly that right of plaintiff to maintain a suit for declaration was not effected by the fact that relief of possession was withdrawn/ abandoned. It was contended on behalf of plaintiff/respondent No.1 that DW1 had also stated that as per the allotment letter allotment of plaintiff /respondent No.1 was on licence basis and no right, title was created in favour of the plaintiff/ respondent No.1. Thus, the plaintiff being the only licensee could not have claimed specific performance as in view of the section 54 of the Transfer of Property Act, the agreement to sell does not confer the title on a person in whose favour it is executed it only creates right in the suit property as such plaintiff could not be declared as the owner of the suit property on the basis of agreement sell. The ownership remains with the seller. The buyers only gets a right to get the sale deed executed in his favour. It was alleged on behalf of plaintiff/ respondent No.1 that plaintiff/ respondent No.1 had not sought refund of the amount as the plaintiff/ respondent No.1 was always ready and willing to perform its part of the agreement as held in issues No. 1 & 2 and thus, Ld. Trial Court rightly rejected the said contention of the appellant/defendant No.1.

144. Ld. Trial court rightly held that as the plaintiff at the time of filing of the suit for declaration could not ask for "further relief" and the suit was maintainable without seeking consequential relief. Thus, Ld. Trial court rightly held that mere declaratory suit was maintainable.

145. ISSUE No. 12: "Whether the suit of plaintiff is barred by the provisions contained under order 2 rule 2 CPC ? OPD". The onus to prove this issued was upon the defendant. The contention of Ld. Counsel for defendant No.1/ appellant was that respondent/ Plaintiff had earlier filed a suit bearing No. 275/96 against the appellant/ defendant No.1 praying for decree of declaration that the dates of payment of 2nd and 3rd installments be extended till appellant/defendant No.1 performs its obligations under the clause 5 (vi) and Clause 5 (ix) of the allotment letter. The respondent No.1 / plaintiff had also prayed for permanent injunction restraining the appellant from cancelling the allotment letter dated 31.10.1996. It was further stated that in the said suit No. 275/96 Hon'ble High Court had granted Status Quo order subject to payment of Rs. 15 Crores by the plaintiff/ respondent No.1. However, as plaintiff/respondent No.1 did not deposit the aforesaid amount even inspite of the extension of time, the status quo order was vacated. It was further alleged that allotment of respondent No.1 was cancelled due to non payment of above said amount, in view of the orders of Hon'ble High Court and in terms of allotment letter. It was also alleged that plaintiff/ respondent No.1 withdrew the said suit. It was also stated that issues in the said suit and in the present suit are the same, thus, this suit is barred by order 2 rule 2 CPC.

146.It was further stated that Ld. Trial Court erred in holding that the pleadings and cause of action of the suit No. 275/96 and pleadings of the present suit are not the same. It was alleged that pleadings and cause of action of the previous suit and the present suit were same thus, the present suit is barred by Order 2 rule 2 CPC. It was also stated that Ld. Trial Court failed to appreciate that upon the cancellation of allotment, plaintiff/respondent No.1 was liable to 66 continue with the said suit after making necessary amendments. It was further alleged that Ld. Trial Court also failed appreciate that respondent No. 1 could not be allowed to abuse the process of law by filing a fresh suit challenging the cancellation as the previous suit was withdrawn unconditionally.

147. On the other hand it was contending on behalf of plaintiff/ respondent No.1 that in order to bring the case within order 2 rule 2 CPC , the cause of action in the previous suit must be shown to be identical with the cause of action of the subsequent suit and for deciding the same, averrments made in the plaint alone have to be considered and in case the claim in the previous suit was in respect of different cause of action, the bar of order 2 rule 2 CPC would not be attracted. Order 2 rule 2 CPC which is relevant for deciding the present issue, is as follows: "Suit to include the whole claim: (1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any court."

148. Ld. Counsel for plaintiff/ respondent No.1 further submitted that present suit was not barred by Order 2 Rule 2 CPC as the earlier suit had been withdrawn as such provisions of Order 23 Rule 1 CPC was applicable and in such a case plaintiff would be precluded from instituting a fresh suit without seeking permission to file a fresh suit, only if the subject matter was same as of the earlier suit and decision of previous suit was on merits, whereas the present suit is based upon the cause of action which did not exist at the time when the previous suit was filed.

149.Ld. Counsel for respondent No.1/ plaintiff in support of his contentions placed reliance on Manu/DE/ 1438 2012 Parma Nand Vs. Mani Ram Aggarwal & Ors, wherein it has been held as under : Once second/subsequent Suit was filed during pendency of earlier suit, issue 67 would not be applicability of provision of Order 2 Rule 2 CPC but of subsequent suit having been filed without permission to file second Suit under Order 23 Rule 1 CPC Applicability of provision of Order 23 Rule 1 CPC of seeking permission to file second Suit did not arise as second Suit was filed not after disposal of first Suit but during pendency of earlier Suit Courts should be wary of dismissing suits at initial stages and that too on technical grounds without allowing opportunity to Plaintiff to prove his case during trial Thus trial Court had erred in dismissing suit under Order 2 Rule 2 CPC in as much as subject suit was filed during pendency of earlier suit Hence impugned judgment and decree was set aside Appeal allowed.

Order 23 Rule 1 of CPC, can only applied to suits instituted after withdrawal or abandonment of previous suits.

150. As regards the fact whether withdrawal of previous suit without permission to file the present suit would create a bar as provided under order 23 rule 1 (4) of CPC, Ld. Counsel for appellant/ defendant No.1 placed reliance on 2009 SCC OnLine Bom 33, Shantaram S/o Deochand Shinde & Ors Vs. Eknath wherein it is held as follows: A plain reading of above provision would make it manifest that the plaintiff would be precluded from instituting any fresh suit only if it is in respect of same subject matter based on same cause of action. In the present case, the subject matter as well as the cause of action underwent material changes, consequent upon implementation of the Consolidation Scheme. It is difficult, therefore, to say that the plaintiff is precluded from filing afresh suit when the subsequent cause of action does not correspond to the previous cause of action available to him at the time of filing of the earlier suits.

151. Ld. Counsel for plaintiff/ respondent No.1 submitted that the present suit was for declaration that cancellation letter dated 02.05.1996 as null and void but at the time of filing of previous suit there was only a threat of cancellation of allotment and the cause of action for filing the present suit 68 arose only when the appellant/ defendant No.1 cancelled the allotment. It was also submitted on behalf of plaintiff/ respondent No.1 that plaintiff would be precluded from instituting a fresh suit only if it is in respect of same subject matter and same cause of action but neither the cause of action of case of both the suits was same nor was it between the same parties.

152. Ld. Trial court rightly held that in the present suit the subject matter as well as the cause of action underwent material changes as allotment of plaintiff was cancelled, thus, plaintiff would not be precluded from filing fresh suit when the subsequent cause of action did not accrue at the time of filing of the previous suit. Thus, I am of the view that the Ld. Trial Court rightly held that present suit was not based on the same cause of action as the previous suit, and the plaintiff / respondent No.1 had withdrawn the previous suit as it became infructuous since allotment was cancelled.

153.Ld. Trial court also rightly held that besides the cause of action of both the suits being different, the previous suit was not decided on merits and was also not between the same parties. Ld. Trial Court also held that relief claimed in the present suit was not available at the time of filing of the previous suit. Issue No. 12 was thus, rightly decided in favour of the plaintiff/ respondent No.1 and against the defendant by Ld. Tiral Court.

154.ISSUE No. 14 : "Whether the suit of the plaintiff is also barred under the provisions contained under order 23 Rule 1 CPC? OPD". The onus to prove this issue was on the defendant. It was submitted on behalf of appellant/defendant No.1 that present suit was not maintainable as it was filed subsequent to the Suit No. 275/96 which was withdrawn without the liberty to file a fresh suit. It was further contended on behalf of appellant that Ld. Trial Court erred in holding that provisions of order 23 rule 1 CPC do not apply to the present case. It was stated that Ld. Trial Court also erred in holding that since present suit was already pending at the time of institution of the previous suit as such no permission was required to file the fresh suit. It was further submitted that 69 Ld. Trial Court failed to appreciate that respondent No.1 could not continue the previous suit as he did not pay the amount as per the Hon'ble High Court's directions and as a consequence thereof his allotment was canceled. It was further stated that by withdrawal of the previous suit, respondent No.1 has abandoned his claim against the appellant and was precluded from filing the fresh suit in respect of the same subject matter.

155.On the other hand Ld. Counsel for respondent No.1/ plaintiff contended that present suit was filed on 24.1.1997 and the previous suit No. 275/96 was withdrawn after the filing of present suit. Thus, the present suit was maintainable and was not barred by Order 23 rule 1 CPC. It was also stated that in case of withdrawal of abandonment of claim, the plaintiff is debarred from instituting a fresh suit on the same subject matter except with the permission or leave of the court, however, when the subsequent suit was pending when the earlier suit was dismissed as withdrawn, provisions of Order 23 rule 1 CPC would not be applicable and in this regard. In view of the judgment of Hon'ble High Court in case titled Parma Nand Vs. Mani Ram Aggarwal , Manu/ DE/ 1438/ 2012, referred to in issue No. 12 and finding on issue No. 12, this issue is decided in favour of plaintiff and against the defendants. Thus, Ld. Trial Court rightly held that the leave of the court was not required for instituting a fresh suit on a different cause of action.

156.ISSUE No. 9: " If the above issues are proved whether in view of the above issue the plaintiff is entitled to the decree of declaration as claimed in the suit in respect of letter dated 02.05.1996, issued by defendant No.1 as null and void?

   OPD."                                   and             
   ISSUE No. 15: Relief. :

157.For the foregoing reasons, I do not find any illegality in the impugned judgment, I uphold the judgment of Ld. Trial Court dated 03.07.2010 as regards decree of declaration passed in favour of respondent No.1/plaintiff against the appellant that cancellation letter dated 02.05.1996 is null & void.

However, I am of the view that no further directions can be given to the appellant/ defendant No.1 as no such relief has been prayed for by plaintiff/ Respondent No.1. The appeal is accordingly, dismissed/ disposed off. A copy of the order be sent to Ld. Trial Court. Trial Court record be sent back. File be consigned to record room.

Announced in the open Court                                              (POONAM CHAUDHARY)
on 18.07.2014.                                                    ADJ03, SAKET COURT COMPLEX,
                                                                                     NEW DELHI

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