Delhi High Court
Afl Developers Pvt. Ltd. vs Veena Trivedi on 6 May, 1997
Equivalent citations: 1997IVAD(DELHI)65, 70(1997)DLT373, 1997(43)DRJ477
JUDGMENT Anil Dev Singh, J.
(1) This order will dispose of three applications namely, I.A. Nos. 7369/95, 6295/96 and 4732/95 moved by the plaintiffs M/s. Alf Developers P. Ltd. and Ashok Narang in Suit No. 1410/95. While two applications viz. 4732/95 and 7369/95 are under Order 39 Rules 1 & 2, I.A. 6295/96 is under Order 39 Rule 2 A CPC.
(2) This order will also dispose of two applications being I.A. Nos. 12751/95 and 196/96 in Suit No. 2953/95. The former application has been moved by Smt.Veena Trivedi, plaintiff in that suit, under Order 39 Rule 1 & 2 of the Civil Procedure Code and the latter application, has been moved by the applicant, Ashok Narang, under Order 1 Rule 10, CPC. For the purpose of narration of facts, reference to the plaintiffs and defendant here-in-after will be relatable to plaintiffs and defendant in Suit No. 1410/95.
(3) The defendant acquired plot No. B-25, Gulmohar Park, New Delhi under a perpetual sub lease dated 27th November, 1969 from Journalists Cooperative House Building Society. On 13th April, 1992 the plaintiff No. 1 and defendant entered into a "collaboration agreement" (for short the "agreement" or the "collaboration agreement") by virtue of which the former was to construct first and second floors at its own cost in accordance with the sanctioned plan. Further more under the "agreement" defendant was to receive a sum of Rs. 3 lakhs within 6 months of the execution of the "agreement", failing which the defendant was to receive interest @ 12% per annum. At this stage it will be pertinent to mention that by a separate contract dated 31st March, 1992 between the defendant and a company called Dass Trading Holding Pvt. Ltd., the latter was to construct the entire basement floor and ground floor. The plaintiff No. 1 was to use the ground floor terrace, which was subject matter of the "agreement" between the defendant and Dass Trading and Holding Pvt. Ltd., for raising the first and second floors. It is not disputed on both the sides that the plaintiff No. 1 made payment of only Rs. 21,000.00 to the defendant as against the payment of Rs. 3.21 lakhs as stipulated in the "agreement". It is also not disputed that the plaintiff No. 1 constructed the first floor and the second floor. However, the stand of the defendant is that the plaintiff did not construct the second floor in accordance with the stipulations made in the "agreement". Clause 5 of the "agreement" recites that the owner has agreed to transfer the rights and possession of the entire first floor to the builder or his nominee with the undivided interest in the plot of land in equal ratio with other occupants. The said clause also provides that the owner has agreed to part with first floor to the builder or his nominee and on receiving the balance payment with interest and also taking over possession of the second floor of the building in approximately equal ratio of first floor covered area with entire terrace and first floor terrace rights excluding partly provided space for servant room/lavatory for the ground and first floors occupants. As per the "agreement" the defendant had agreed to convert the land from lease hold to free hold but the cost of conversion was to be paid by the occupants of the ground and first floors. Clause 10 of the "agreement" postulated that the plaintiff No. 1 could start selling or booking the flats. On December 15, 1993 the plaintiff No. 1 entered into an "agreement" to sell the first floor of the property in question to plaintiff No. 2. Subsequently on July 8, 1994, the plaintiff No. 2 entered into an "agreement" with plaintiff No. 1 whereby plaintiff No. 1 was to make additions, alterations & renovations in the first floor of the property. The defendant by means of a legal notice dated March 21, 1995 called upon the plaintiff No. 1 to handover possession of first floor to her on the ground that the plaintiff No. 1 failed to construct the second floor in equal ratio to the first floor covered area and was incapable of fulfillling the condition because of Building Bye Laws of the MCD. The notice also asked the plaintiff No. 1 not to hand over the first floor to any other person and booking of the same, if any, be cancelled. On 2nd June, 1995 the defendant installed an iron gate in the stair-case leading to the first floor at the points `A' to `B' in the site plan accompanying the plaint. Due to the ingress to and egress from the first floor being obstructed by the defendant, the plaintiffs on June 7, 1995 filed the suit being Suit No. 1410/95 for restraining the defendant from interfering and/or causing obstruction in the peaceful carrying out of the repairs, finishing and interior decoration in the first floor and to direct the defendant to remove the iron gate.
(4) The defendant also filed a suit on 8th December, 1995 being Suit No. 2953/95 for rescission of the "agreement" dated 13th April, 1992 and permanent injunction. The defendant alongwith the said suit filed I.A. Nos. 12751/95 under Order 39 Rules 1 & 2, Civil Procedure Code for interlocutory injunction for restraining the plaintiff No. 1 access to the property. The defendant in her suit, besides the above said reliefs, claimed cost and damages payable from the plaintiff No. 1 as per below: 1. Estimated cost of covering addl.appxly 600 ft unbuilt area on Ii floor, three servant quarters on the Ii floor terrace (B & C of the Valuation Report) Rs. 3,54,000.00 2. Defects removing cost of existing structure on the Ii floor (D of the Valuation Report) Rs. 1,50,000.00 3. Cost of flooring the first floor area of appxly 1600 sq. ft.complete three bathrooms and other works, painting, polishing etc. Rs. 3,70,000.00 4. Consideration payable after 6 months with 12% interest being the estimated value of the existing building (half the value estimated) to be demolished and replaced by the new contracted construction Rs. 3,00,000.00 - interest calculated from October 92 to Nov. 95 + Rs. 1,17,000.00 5. Compensation for fraud, causing mental agony, physical harassment and financial losses including expenses/costs of defending Suit No. 1410/95. Rs. 5,00,000.00 TOTAL: Rs. 20,51,000.00 Less Quantum Meruit i) Ii floor - Rs. 3,50,000.00 ii) I floor - Rs. 3,20,000.00 (-) Rs. 6,70,000.00 Amount due and payable by defendant Rs. 13,81,000.00 (5) The defendant in her suit has highlighted the following facts in para 3 of the plaint, which read as follows:- "I)The covered area of the first and the 2nd floors to be in approximately equal ratio. ii) The builder to obtain at his own cost and expense and resources necessary approvals, clearances and sanctions from the authorities concerned for construction of the first and second floors in accordance with sanctioned plans, using the ground floor terrace alongwith the ground floor building and developer. iii) The Builder to construct the terrace, three servant rooms for use by the owner, the first floor and the ground floor occupants and a common bath-room-cum-toilet. iv) The original title, phone & gas connections and possession etc. to remain with the owner who shall be free to inspect works and make suggestions and the builder to attend to the same promptly. v) The Builder shall complete the building within 15 months from the date of final sanction of the plans. vi) In the event of delay in completion of the building beyond fifteen months the builder to pay liquidated damages at the rate of Rupees 10,000.00 per month. vii) The builder to pay to the owner a sum of Rs. 3.21 lacs (Rupees three lacs twenty one thousand only). Rupees twenty one thousand (Rs. 21,000.00 ) paid on execution of the agreement, balance Rs 3 lacs alongwith interest at the rate of 12 percent on the said sum to be paid after six months (i.e. Rs. 3,18,000.00 to be paid after six months). The builder to get rights in first floor flat........." during the process of construction the owner to have no objection if the builder starts selling/booking the first floor flat."
(6) As already mentioned alongwith the Suit No. 1410/95 the plaintiffs filed an application being I.A. 4732/92 under Order 39 Rules 1 & 2 read with Section 151 of the Civil Procedure Code . That application was partly allowed by a learned Single Judge of this Court on 16th June, 1995 and the endant was restrained from interfering with or obstructing in the peaceful carrying out of the repairs etc. in the first floor till the final disposal of the suit. The defendant by way of interim measure was also directed to remove the iron gate installed by her in the stair-case leading to the first floor.
(7) The plaintiffs again moved an application being I.A. 6797/95 under Order 39 Rule 2A, Civil Procedure Code in which the Court ordered that in case the gate had not been removed, the plaintiffs were at liberty to remove the same by resorting to police aid, if necessary. This order came to be passed on 21st June, 1995. It is pertinent to point out that on 21st June, 1995 counsel for the defendant made a statement under instructions from his client that order dated 16th June, 1995 had been complied with by the defendant and the iron gate which was directed to be removed by the Court, had been removed. However, the defendant aggrieved by the order dated 16th June, 1995, filed an appeal being FAO(OS) 157/95. A Division Bench of this Court by its order dated 14th July, 1995 allowed the appeal and the matter was remitted for disposal in accordance with law. However, before the D.B., the defendant conceded that she will have no objection to allow the plaintiff No. 1's employees, agents and workers to go through the stair-case in order to use the first floor for the claimed purposes. But in so far as the opposition of the defendant to the user of the first floor by the plaintiff No. 2 is concerned, was recorded by the D.B. and its validity was left to be decided by the Single Judge afresh. It may be pointed out that the D.B. accepted the appeal mainly on the ground that at the time when the order dated 16th June, 1995 was passed, the learned Single Judge did not have the benefit of the written statement and the reply to the application as the same were not on record though they had been filed in the Registry. The plaintiffs in the application under Order 39 Rule 2A expressed their grievance that despite the orders passed by the learned Single Judge on 16th June, 1995 and as modified by the order of the D.B. dated 14th July, 1995 the defendant deliberately and with malafide intentions failed to comply with the same. In the application being I.A. 6295/96 which has been moved by the plaintiff No. 1, it is alleged that the defendant did not allow the representatives of the plaintiff to enter into the premises. Alongwith the application, the plaintiff No. 1 filed photographs of the iron gate installed in the stair-case. The defendant in its reply to the above said application inter-alia stated that it had not committed any violation of the orders of the Court.
(8) Learned counsel appearing for the defendant submitted that his client will not permit the repairs/renovations for the benefit of plaintiff No. 2 and according to the order of the D.B. dated 14th July, 1995 the opposition of the defendant to the user of the first floor by the plaintiff No. 2 cannot be in violation of any operative and subsisting order of the Court. Learned counsel also submitted that plaintiff No. 2 has no locus standi to claim any relief against defendant as there is no privity of contract between the said plaintiff and the defendant. He further submitted that the so called collaboration "agreement" between the plaintiff No. 1 and defendant stood frustrated due to non-performance and breaches of the terms and conditions thereof by plaintiff No. 1. In this connection he submitted that plaintiff No. 1 did not construct the second floor as per the specifications and stipulations made in the "agreement". The second floor was to be built in the same ratio as the first floor, but this was not done by the plaintiff No. 1. He also submitted that the plaintiff No. 1 failed to pay Rs. 3 lakhs within 6 months of the execution of the "agreement". As per his submissions, these were the fundamental breaches of the "agreement" which resulted in the frustration of the contract. Since the defendant was the admitted owner of the property, the plaintiff, No. 1 had no right to transfer possession of first floor of the property to plaintiff No. 2, urged the learned counsel. Though in the written statement the defendant has not taken the plea that the "collaboration agreement" was not registered and the same cannot be received in evidence, however, in the written submissions the defendant has relied upon certain judgments under Sections 17(1) and 49 of the Indian Registration Act. On the other hand, learned counsel appearing for the plaintiffs submitted that plaintiff No. 1 raised construction on the first and second floors and handed over the second floor premises to defendant towards part performance of the obligations of plaintiff No. 1 under the "agreement". He also submitted that plaintiff No. 1 under the "agreement" was entitled to sell, handover and deliver to plaintiff No. 2 first floor of the suit property. It was also argued that the plaintiff No. 1 had been paying interest to the defendant on the sum of Rs. 3 lakhs in accordance with the collaboration "agreement" but the defendant refused to accept the same after some time. He further submitted that the plaintiff No. 1 was ready and willing to make the entire payment of the balance amount alongwith stipulated rate of interest to the defendant. He, however, admitted that the accommodation provided to the defendant in the second floor was not to the same extent as provided on the first floor as otherwise it would have violated the bye-laws of the civic authorities. Learned counsel contended that the contract was not frustrated and the plaintiff No. 1 had carried out its obligations under the "agreement".
(9) I have considered the submissions of learned counsel for the parties. At the out set it may be pointed out that the defendant is not guilty of flouting any operative order of this Court. It may be recalled that the order of the learned Single Judge dated 16th June, 1995 stood modified by the order of the D.B. dated 14th July, 1995 in as much as only the plaintiff No.1, its employees, agent and workers could go through the stair-case in order to use the first floor for the claimed purposes. However, in so far as the plaintiff No. 2 was concerned, no such right was conferred by the D.B. The question whether the opposition of the defendant to the user of the first floor by the plaintiff No. 2 was valid or not was required to be decided afresh in I.A. 4732/95. It cannot be disputed that the plaintiff No. 1 wants ingress to and egress from the first floor not for its own purpose but for the purpose of making additions, alterations and renovations in the first floor for and on behalf of the plaintiff No. 2. This being the position, the order passed by the D.B. on 14th July, 1995 and any other order so far passed in the suit cannot be said to have been violated by the defendant.
(10) Coming to the question as to whether the opposition of defendant to the user of the first floor by the plaintiff No. 2 is valid or otherwise, certain basic facts and circumstances of the case need to be looked closely. These are: i) The plaintiff No. 1 and defendant entered into a "collaboration agreement" on 13th April, 1992; ii) Acting on the "collaboration agreement" the part possession of the property was handed over by defendant to plaintiff No. 1; iii) The plaintiff No. 1 constructed first floor and second floor of the property; iv) Possession of the second floor was handed over by the plaintiff No. 1 to the defendant. The plaintiff No. 1 did not construct the second floor in accordance with the specifications provided in the "collaboration agreement" as that would have amounted to violation of the bye laws of the Municipal Corporation of Delhi; v) The first floor of the suit property was handed over to plaintiff No. 2 by plaintiff No. 1; vi) The plaintiff No. 1 did not pay the balance sum of Rs. 3 lakhs to the defendant;
(11) It cannot be disputed that in case the plaintiff No. 1 would have paid the entire sum of Rs. 3 lakhs within 6 months of the entering into the "collaboration agreement" and would have constructed the second floor as per the stipulation contained in the "agreement" the defendant would be in no position to claim rescission and frustration of the collaboration "agreement". According to Clause 6 of the collaboration "agreement" the plaintiff No. 1 was obliged to pay a sum of Rs. 3.21 lakhs to the defendant as compensation in lieu of using the ground floor roof and for construction. At the time of execution of the "collaboration agreement", as already pointed out, a token advance of Rs. 21,000.00 was paid to the defendant. The balance payment of Rs. 3 lakhs was required to be paid after six months. In respect of balance payment of Rs. 3 lakhs, Clause 6 of the "agreement" recites as follows:- "The balance payment of Rs. 3 lakhs will be made after 6 months and the builder has agreed to pay a nominal interest of 12% on this balance amount of the owner."
(12) It is the case of the plaintiff No. 1 that it had been paying the interest to the defendant @ 12% p.a. to the plaintiffs but after some time the defendant declined to accept the same. Counsel for the plaintiffs invited my attention to Clause 4 of the "agreement" and urged that the defendant had agreed to convert the land from lease hold to ee hold and this condition was not complied with. He submitted that since this condition was not complied with, therefore, the defendant could not insist on the payment of the remaining balance amount of Rs. 3 lakhs. In nutshell he submitted that the "agreement" imposes reciprocal obligation on the defendant for converting the property into a free hold, which condition was not fulfillled and therefore, the plaintiff No. 1 was justified in not making the balance payment of Rs. 3 lakhs after 6 months. Clause 4 of the "agreement" reads as follows:- "THAT the owner has also agreed to convert the land from leasehold to freehold and to enjoy the rights of freehold status of property to all the occupants of different floors. However, the cost of expenses of conversion shall be paid by the ground and first floors occupants or builders to get the conversion."
(13) Having regard to the aforesaid clause, it is obvious that the defendant had undertaken to convert the land from lease hold to free hold but it is not clear from the "agreement" whether the defendant had to get the land converted before the receipt of Rs. 3 lakhs or after having received the same. At this stage it is not necessary to go into this question. Suffice to say that the "agreement" envisaged reciprocal obligations to be performed by the parties. It is not in dispute that the defendant did not get the land converted into free hold. Be that as it may, since the plaintiff No. 2 has acquired the benefit of the second floor of the property under the collaboration "agreement", she cannot now turn back and say that the "collaboration agreement" has been frustrated. At the same time the plaintiff No. 1 cannot be allowed to urge that the payment of Rs. 3 lakhs was not made due to the non-compliance of Clause 4 of the "agreement" by the defendant as the plaintiff No. 1 has also taken advantage of the "collaboration agreement", in as much as it has conveyed the possession of first floor of the property to plaintiff No. 2 for consideration. Therefore, the ends of justice require that the defendant should be paid adequate compensation for the non-compliance of Clause 6 of the "agreement" by the plaintiff No. 1. Besides compensation must be paid to the defendant as the second floor was not constructed as per the stipulations made in the "agreement" though it is true that if the plaintiff No. 1 would have constructed the second floor as per the "agreement" it would have violated the bye laws of the Municipal Corporation of Delhi. The plaintiff No. 1 and defendant should have known at the time of the execution of the "agreement" that it was not possible to construct the second floor in the same proportion and the same ratio in which the first floor was constructed.
(14) Now coming to question as to whether the plaintiff No. 1 could convey possession of the first floor to the plaintiff No. 2 without taking concurrence from the defendant, it prima facie seems to me that under Clause 10 of the "agreement" concurrence of the defendant was not required. This clause in clear terms records that "during the process of construction the owner has no objection if the builder starts selling or booking the first floor flats to any party". This being the position, it prima facie appears to me that the plaintiff No. 1 had the authority of Clause 10 to give possession of the first floor to the plaintiff No. 2.
(15) In so far as the plea of the defendant that the "collaboration agreement" was not registered and therefore, is inadmissible in evidence, the plea cannot be allowed to be taken as the same has not been raised in the written statement nor it has been taken in the Suit No. 2953/95. Having regard to the present state of the pleadings the defendant cannot be allowed to urge something which she has not raised in the written statement. As already noted in the suit filed by the defendant, compensation/damages is being claimed by the defendant inter-alia on the ground that the plaintiff No. 1 did not cover approximately 600 feet area on the second floor, etc. The defendant is also claiming interest from October 1992 to October 1995 on the unpaid consideration of Rs. 3 lakhs and various other amounts. This clearly indicates the reliance of the defendant on the `agreement' for the purpose of claiming compensation for the breaches of the terms thereof committed by plaintiff No. 1.
(16) One more aspect which needs to be considered is whether mandatory injunction can be granted on an interlocutory application. The position in law is well settled. There is no bar to the Courts granting interlocutory reliefs in the mandatory from though in doing so, the Court should act with greatest circumspection. In case ends of justice require and where compensation/damages cannot be an adequate relief to the plaintiff, mandatory injunction ought to be granted so that justice does not suffer (See: Mrs. Vijay Srivastava vs. M/s Mirahul Enterprises and others and M/s. Kailash Nath & Associates vs. Ram Nath & Others Ilr (1) 1990 Delhi 69).
(17) Having regard to the above discussion I am of the prima facie opinion that the plaintiffs are entitled to ad interim mandatory relief subject to payment of Rs. 35 lakhs to the defendant as compensation. Accordingly it is directed that the plaintiffs should deposit a sum of Rs. 35 lakhs in this Court as compensation for being paid to the defendant. The plaintiffs have agreed to share the compensation and to deposit the same in Court. The compensation should be deposited within 2 weeks. It will be open to the defendant to withdraw the compensation on furnishing security to the satisfaction of the Registrar of this Court. It is made clear that this order will be without prejudice to the rights and contentions of the parties and in case the suit of the plaintiffs is dismissed and the plaintiff No. 2 is asked to vacate the premises, then in that event alone the said sum of Rs. 35 lakhs will be refunded to the plaintiffs by the defendant. In case the defendant is directed to refund the said sum of Rs. 35 lakhs or such lessor sum, the plaintiffs will do so without demur. In case the defendant fails to withdraw the said sum of Rs. 35.00 lakhs, the same will be put in an Fdr for a period of one year in the first instance subject to further renewal, if necessary.
(18) On deposit of Rs. 35 lakhs, the plaintiffs will be entitled to an ad interim mandatory injunction against the defendant directing the defendant to remove the iron gate installed in the stair case leading from the ground floor to the first floor of the suit premises, namely, B-25 Gulmohar Park, New Delhi and an order restraining the defendant from interfering with their ingress and egress to the first floor for carrying out additions, alternations and renovations of the same. I order accordingly.
(19) It is further directed that the plaintiffs after deposit of Rs. 35 lakhs in the Court will give a notice to the defendant informing her about the factum of the deposit. Learned counsel for the defendant states that once the notice regarding deposit is received by his client, the order will be complied with.
(20) With the above observations, I.As. 7369/95, 6295/96, 4372/95 and 12751/95 are disposed of.
(21) In so far I.A. 196/96 is concerned, since both the suits, namely Suit Nos. 2953/95 and 1410/95 are being listed together, at this stage it is not necessary to accede to the request of the applicant/plaintiff No. 2 to be arrayed as party defendant in the former suit. However, liberty is granted to the applicant to move a fresh application, if necessary. With the above observation, this application is also disposed of.