Bangalore District Court
Muni Chowdappa vs M/S Surya Shakthi Greenlands Pvt Ltd on 5 April, 2024
KABC170019232022
IN THE COURT OF LXXXIV ADDL. CITY CIVIL AND
SESSIONS JUDGE (CCH-85) (COMMERCIAL COURT),
BENGALURU
DATED THIS THE 5th DAY OF APRIL 2024
PRESENT
SRI.RAMAKANT CHAVAN,
B.Com., LL.B.(Spl)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.5195/2017
PLAINTIFFS:
1. Sri.Muni Chowdappa,
S/o late Poojappa,
aged about 83 years
2. Smt.Nagamma,
W/o Muni Chowdappa,
aged about 60 years
3. Sri.Sadashiva,
S/o Muni Chowdappa,
aged about 42 years
4. Sri.M.Gopi,
S/o Muni Chowdappa,
aged about 39 years
5. Sri.M.Madhusudhan,
S/o Muni Chowdappa,
aged about 33 years
2 Com.O.S.No.5195/2017
6. Sri.M.Sunil,
aged about 30 years,
All are R/at 1st Cross,
Near Sappalamma temple,
Dodda Kannelli Colony,
Dodda Kannelli, Carmelaram post
Varthur Hobli,
Bengaluru - 560 037
(By Sri.Dinesh J.S., Adv.)
AND
DEFENDANT:
M/s Surya Shakthi Greelands Pvt. Ltd.,
A company incorporated under
Companies Act 1956,
having its Regd. office at Devi Towers,
Flat No.5, D.No.49-34-1/5,
Akkayyapalem NH Jn.,
Visakhapatnam - 530016
and also having office at
No.5, 2nd floor, Rajapalya,
ITPL Main Road, Hoodi,
Mahadevapura Post,
Bengaluru - 560 048
(By Sri.G.R.Ananthram, Adv.)
Date of Institution 31.07.2017
For Specific Performance and
Nature of suit
Permanent Injunction
Date of First Case Management 26.07.2023
Hearing
3 Com.O.S.No.5195/2017
Date of commencement of 08.09.2023
recording of evidence
Date on which judgment 05.04.2024
pronounced
Time taken for disposal Years Months Days
1) From the date of First Case 00 08 09
Management Hearing
2) Total duration 07 02 05
LXXXIV Addl. City Civil & Sessions Judge
(CCH-85) Commercial Court, Bengaluru
JUDGMENT
This is a suit filed by the plaintiffs for the following reliefs:
(a) For the relief of specific performance of contract on the basis of the Joint Development Agreement dated 31.03.2011 and Sharing Agreement dated 08.08.2013 directing the defendant to handover the possession of the 'B' schedule property to the plaintiffs after completing the construction and after obtaining occupancy certificate from the BBMP;
(aa) Direct the defendant to pay a sum of Rs.4,16,68,880/- as damages, shortage / deficit of super built-up area and garden area, and cost of installation of aluminum sliding windows and MS safety grill to the plaintiffs;
(ab) Direct the defendant to pay a sum of Rs.1,91,820/- as damages per month from 4 Com.O.S.No.5195/2017 01.08.2018 till handing over the possession of the remaining six flats to the plaintiffs.
(b) For the relief of permanent injunction, restraining the defendant, its agents, servants, GPA holders or anybody acting on its behalf from in any way alienating or encumbering the Schedule A property in favour of third persons till handing over the possession of schedule B property; and
(c) For the relief of permanent injunction, restraining the defendant, its agents, servants, GPA holders or anybody acting on its behalf from in any way alienating or encumbering the Schedule B property in favour of third persons.
2. Brief facts of the plaintiff's case are that the plaintiffs are the absolute owners and in possession of land bearing Sy.No.142/2 measuring 1.10 acres situated at Dodda Kannelli village, Varthur Hobli of Bengaluru East Taluk. This is a suit property. The plaintiffs have acquired 'A' Schedule property under the Regd. Partition Deed dated 03.11.2003 among the family members. During the year 2011 the plaintiffs were intending to develop the schedule property into multi-storied apartment and they were searching for a suitable developer to develop the said property on joint development basis. The defendant approached the plaintiffs and represented that it has experience and skills in developing the properties. Acting on the said representation, the plaintiffs have offered to develop the 'A' schedule property at the cost and expenses of the defendant by constructing multi-storied residential building. The plaintiffs believing the defendant agreed to develop the 'A' schedule property on joint development basis.
5 Com.O.S.No.5195/2017It is further pleaded that the defendant has agreed to construct the multi-storied residential building on its own cost and expenses and also agreed to deliver 43% of super built-up area with proportionate Car parking and common area to the plaintiffs in the apartment. The said 43% of super built-up area is shown in 'B' schedule property. The plaintiffs have agreed to transfer remaining 57% of undivided right, title and interest in the 'A' schedule property in favour of the defendant with the condition that the defendant must develop 'A' schedule property into multi-storied residential building. After negotiation the defendant has collected the title deed and revenue records. The defendant has decided to enter into Joint Development Agreement with the plaintiffs. On 31.03.2011 , the plaintiffs and the defendant had entered into JDA to develop 'A' schedule property. As per the terms and conditions of the JDA, the defendant has taken the entire responsibility, cost, risk to develop the 'A' schedule property as per Clause 6.1 of the JDA, the defendant shall undertake residential development in the schedule property in accordance with the sanctioned plan with internal and external services, common area amenities, facilities including compound and passage and sewer lines and pipes, overhead tanks etc., only after obtaining conversion and plan sanctioned and license from BBMP or BDA or any other authorities. All the expenses and costs which may have to be incurred in connection with conversion, obtaining BBMP Khata and preparation of plans, estimates and obtaining clearances and sanctions or the plan and also entire cost of construction and 6 Com.O.S.No.5195/2017 development shall be borne by the defendant. As per Clause 6.2 of the JDA, the defendant has agreed to borne out all the expenses regarding 43% of super built-up area.
It is further pleaded that on the date of JDA, the schedule property was an agricultural land and it was converted into any on 27.08.2011 as per the orders of Deputy Commissioner, Bengaluru Urban. The plaintiffs permitted the defendant to develop the schedule property as per the JDA. The defendant has made an application before BBMP for approval of building plan and license for construction of the building in the 'A' schedule property. The defendant without any valid reasons has kept quiet for a period 21 months without obtaining sanctioned plan from BBMP. It has taking advantage of innocence and illiteracy of the plaintiffs. The defendant has failed and neglected to fulfill his part of work. The plaintiffs have sustained huge loss. If the defendant obtained the sanctioned plan without any delay, the construction of the apartment would have been completed before April 2014.
It is further pleaded that as per the approved plan, and as per the calculation there are 68 flats of various dimensions can be constructed in 'A' schedule property. Accordingly, the plaintiffs and the defendant have entered into a Supplemental Sharing Agreement on 08.08.2013. As per this agreement, the plaintiffs are entitled for 29 flats and the defendant is entitled for 39 flats of various dimensions. As per the Clause 12 of the JDA, the time stipulated for completion of construction is 24 months from the date of sanction of the plan and license. The BBMP has 7 Com.O.S.No.5195/2017 sanctioned the approved plan and issued a license on 30.05.2013 and the defendant is required to complete the construction on or before 30.05.2015. As per Clause 12(2) of the JDA, the plaintiffs have agreed to give six months grace period in addition to 24 months. If Six months grace period is calculated the defendant is required to deliver 47% of super built up area i.e. 'B' schedule property on or before 30.11.2015.
It is further pleaded that the defendant has started to put up construction and it has not completed the entire construction as per JDA. After completion of structural work, the defendant with an intention to harass the plaintiffs, has started to issue untenable notice. As per the JDA, the defendant is required to handover 'B' schedule property on 30.05.2015 or at the most before 30.11.2015. The plaintiffs have waited till completion of 24 months as well as grace period of six months. But the defendant has not completed all the construction work as specified in the JDA, the defendant has failed to handover the 'B' schedule property. The plaintiffs started to demand the defendant to handover the same. The defendant in collusion with one Srinivasan, who is the owner of the adjacent land, who has constructed college and make him to file a false complaint against the plaintiffs before BBMP. The said authority is nothing to do with the said complaint. In spite of that the defendant has managed to issue notice to the plaintiffs as well as to him on 28.10.2015. On the guise of this notice, the defendant issued a notice to the plaintiffs on 22.01.2016 calling upon them to resolve 8 Com.O.S.No.5195/2017 the issue failing which it will stop the construction work of the 'B' schedule property. The defendant ought to have complete the construction work and handover the possession of 'B' schedule property on or before 30.11.2015.
It is further pleaded that the plaintiffs have requested repeatedly to handover possession of 'B' schedule property, the defendant in order to escape from his liability once again issued a notice on 16.05.2016 to the plaintiffs to pay BWSSB / KPTCL charges and other charges. The plaintiffs had replied the same and directed the defendant to pay Rs.15/- per Sq.ft. as damages, as the defendant has failed to handover the 'B' schedule property. Now the defendant has completed the entire structural and plastering work in the apartments constructed on 'A' schedule property. After completion of structural and other works the defendant has completed 90% of all interior and exterior work in the apartments allotted to its share i.e. 57% of the super built- up area. The defendant intentionally only to harass the plaintiffs and to cheat them, has not completed the electrical work, internal painting, windows and doors, lift etc. in the apartments allotted to the share of the plaintiffs. As on today also the defendant has not completed the entire construction work as per the Sharing Agreement.
It is further pleaded that as per Clause 16 of the JDA, all the statutory payments and deposits payable to the KPTCL, BWSSB and other authorities including Sales Tax on works contract and other deposits if any shall be paid by the members of the first 9 Com.O.S.No.5195/2017 party in respect of their 43% share and the second party / developer shall pay the aforesaid charges with respect to the share i.e. 57%. The plaintiffs are ready to pay the said amount, if the defendant completes the construction work and if the defendant issued a receipt or quotation for the actual deposit to be paid by the plaintiffs. The defendant instead of mentioning the said amount demanded unnecessarily to pay huge amount. The defendant has not taken occupation certificate from BBMP. The plaintiffs in their reply notice, demanding the defendant to pay a sum of Rs.8,07,480/- per month as damages. The defendant is required to pay the damages from 30.11.2015 till handing over the possession of the 'B' schedule property.
It is further pleaded by way of an amendment that subsequent to the filing of the suit, the defendant has handed over 14 flats constructed in the 'A' schedule property without completing the entire work on 03.08.2017. The defendant is liable to pay damages of Rs.3,22,99,200/- from 01.04.2014 to 31.07.2017. As per the Sharing Agreement, the remaining six flats totally measures 12923 Sq.ft. super built-up area and 3773 Sq.ft. of garden area. The damages for the said 16694 Sq.ft is calculated from 01.08.2017 to 31.07.2018, comes to Rs.30,05,280/-. The defendant is liable to pay damages of Rs.3,53,04,480/- for delay in handing over the possession of the 'B' schedule property in time. There is a shortage of 912 Sq.ft. of the super built-up area. There is a shortage of 805 Sq.ft. in regard to garden area. The defendant has agreed in the Sharing 10 Com.O.S.No.5195/2017 Agreement to pay Rs.3,200/- per Sq.ft. to the deficit area. Now after completion of the construction there is a shortage of 1717 Sq.ft. Hence, the defendant is liable to pay Rs.54,94,400/- as cost of deficit super built-up area.
It is further pleaded that as per the JDA, the defendant has agreed to install three tracks aluminium sliding windows with glass and MS safety grill, aluminium ventilators with exhaust fan provision for all the flats constructed in the 'A' schedule property. But the defendant has failed to install the same. Each flat requires minimum of Rs.30,000/- to install the same. The defendant is liable to pay a sum of Rs.8.70 lakhs towards the same. Hence, the defendant is liable to pay a sum of Rs.4,16,68,880/- towards damages, shortage / deficit of super built-up area and garden area, cost of installation of aluminium sliding etc. The plaintiffs are always ready and willing to perform their part of contract since the date of JDA. In fact the plaintiffs have left 609 Sq.ft. super built-up area and 101 Sq. ft garden area to the defendant to clear the deposits, official charges to the concerned authorities. During the second week of June 2017, the defendant had executed Sale Deed in favour of some person. After verifying the records with the Sub Registrar the defendant in violation of terms and conditions stipulated in the JDA without completing the construction in the B schedule property, has sold 13 flats out of 39 flats in favour of various persons from January 2017 till June 2017. The defendant is trying to sell all the flats 11 Com.O.S.No.5195/2017 allotted to it under the Sharing Agreement. Hence, on all grounds and other grounds pray for decree the suit.
3. On service of summons, the defendant has appeared through its counsel. The defendant has filed its written statements along with counter claims. The relief sought in the counter claim are as under:
(a) Declaring that the Memorandum of Understanding dated 03.08.2017 entered into between the plaintiffs and defendant is illegal and unenforceable;
(b) Directing the plaintiffs to clear the title pertaining to the suit schedule property making it a clear and marketable title as obligated under the registered JDA dated 31.03.2011;
(c) Directing the plaintiffs to pay the outstanding Service Tax / GST Rs.2,29,88,136/- as per Clause 17 and 18 of the JDA dated 31.03.2011;
(d) Directing the plaintiffs to pay the outstanding Corpus Fund Rs.14,02,871/- as per Clause 19.4 of the registered JDA dated 31.03.2011;
(e) Directing the plaintiffs to pay the upgradation and improvement of specifications and amenities at Rs.26,00,000/-;
(f) Directing the plaintiffs to pay the outstanding DG charges Rs.13,00,000/- as per Item No.11 of the 'Specifications' annexed and forming part of the registered JDA dated 31.03.2011;
(g) Directing the plaintiffs to pay the outstanding statutory deposits towards BESCOM and BWSSB a sum of Rs.79,83,450/- as per Clause 16 of the registered JDA dated 31.03.2011;
12 Com.O.S.No.5195/2017(h) Directing the plaintiffs to pay the outstanding maintenance charges Rs.13,71,210/- as per Clause 19.4 of the registered JDA dated 31.03.2011;
(i) Directing the plaintiffs to pay a sum of Rs.3,52,26,140/- towards damages for the loss and hardship suffered by the defendant on account of the beaches committed by the plaintiffs as calculated in para 76;
4. The defendant in its written statement, denied most of the plaint averments. The suit of the plaintiffs is not maintainable, they have suffered the true and material facts. Only to defrauding the legitimate share, right of the defendant on the basis of JDA and Supplemental Agreement of the year 2013, the plaintiffs have filed this suit. The plaintiffs have also filed criminal cases against the Directors of the defendant company before DCRE and also State Commissioner for SC/ST in case No.220/2017 and also lodged FIR in Crime No.201/2017 with Bellandur P.S. for prevention of Atrocities Act. The plaintiffs had obtained the document as MOU on 03.08.2017 making the defendant and its Directors to give up their claim under the pretext of settlement. The plaintiffs obtained an exparte orders of status quo against the defendant and his agents by suppressing the MOU.
It is further stated that the plaintiffs are the owners of Sy.No.442/2 of Dodda Kannelli of Bengaluru East Taluk measuring 1.10 acres. The defendant agreed to develop the 'A' schedule property into a multi-storied apartment on the basis of JDA dated 13 Com.O.S.No.5195/2017 31.03.2011. The plaintiffs executed a PA on the same day which is also a Regd. document in favour of Managing Director of defendant. The plaintiffs are the full and absolute owners and in possession of the plaint 'A' schedule property as per JDA. The defendant is acting on the representations of the plaintiffs. The plaintiffs have not agreed to interfere or interrupt in any manner as per Clause 2 of JDA or to omit or to commit in a manner which effectively delays or stops the work to be done under the JDA. Clause 9 of the JDA, the plaintiffs shall extend the full cooperation to it to enable to complete the construction. The plaintiffs have not followed or fulfill the clauses mentioned in the JDA.
It is further stated that the defendant has paid an amount of Rs.10.00 lakhs towards non refundable security deposit to the plaintiffs under the JDA, apart from that the defendant has paid an amount of Rs.40.00 lakhs by way of cheques to the plaintiffs towards non refundable security deposits. The plaintiffs assured that they had clear and marketable title. The daughter of plaintiff No.3 had filed a suit in O.S.No.2577/2006 challenging the absolute title of the plaintiffs. The defendant by its letter dated 25.10.2012 updated the plaintiffs on the progress made by the defendant in respect of the plaint 'A' schedule property. The plaintiffs have failed and neglected to perform their part of JDA, they had deliberately failed to vacate plaint 'A' schedule property and deliver the original documents to the defendant as per Clause 23 of the JDA. The defendant issued another letter on 06.02.2013 informing the plaintiffs that it had obtained NOC from 14 Com.O.S.No.5195/2017 BWSSB and KPTCL and also regarding revised sanction plan approved by BBMP. Also informed regarding the construction of godown, compound wall, office etc. The defendant requested the plaintiffs to finalize the Supplemental Sharing Agreement for identifying their respective flats. The defendant also wrote a letter to the plaintiff Nos.1 and 3 regarding obtaining approval of sanctioned plan. The defendant obtained license and sanctioned plan on 30.05.2013.
It is further stated that the plaintiffs have executed a Sharing Agreement on 08.08.2013. The plaintiffs have not fulfilled the conditions of the said agreement. The plaintiffs agreed to handover the original documents to the defendant through a letter dated 21.06.2012 and also agreed to clear the deposits with BESCOM and BWSSB as against 43% share under the JDA. The plaintiffs on executing the said Sharing Agreement delivered the vacant physical possession of the plaint 'A' schedule property on 08.08.2013. The defendant has issued a notice from BBMP on 28.10.2015 stating that one Srinivasan Goundar has made an application claiming the plaint 'A' schedule property belongs to him and illegal construction is going on and requested the BBMP to stop further construction. The plaintiffs have failed to disclose several facts to the defendant. The defendant learnt that under the Sale Deed dated 17.11.1948 one Muniyappa, Mr.Thammaiah and Nanjappa held two items of property, one measuring 1.29 acres and another property measuring 2.30 acres in Sy.No.142. Out of the aforementioned lands, the said Mr.Muniyappa, 15 Com.O.S.No.5195/2017 Thammaiah and Ninjappa sold 1 acre and 29 guntas in favour of Mr.Nagireddy Ramaiah, S/o Pilla Muniyappa. Mr.Nagareddy Ramaiah conveyed the aforesaid land measuring 1 acre 29 guntas in Sy.No.142 in favour of one Mr.Munichowdappa who executed a Gift Deed dated 05.12.1962 conveying the said land in favour of his sister Smt.Kenchamma.
It is further pleaded that Smt.Kenchamma and Munichowdappa later executed a Will dated 15.04.1989 bequeathing the aforesaid property in Sy.No.142/2 measuring 1 acre 29 guntas in favour of the Four sons of Munichowdappa and his wife who are the plaintiffs No.2 to 6 herein. Thereafter, by a Deed of Partition dated 03.11.2003, 1 acre 19 ½ guntas out of the said 1 acre 29 guntas in Sy.No.142 was allotted to the share of the plaintiffs herein and another extent of 0.09 ½ guntas was allotted to the share of Smt.Munirathnamma and in favour of Smt.Ventakalakshmamma who are the daughters of Munichowdappa through his first wife Bodamma. Subsequently the defendant No.2, wife of defendant No.1 initiated proceedings in RRT No.12/2002-03 before the Special Tahsildar Bengaluru East Taluk, seeking rectification of entries in the Record of Rights since the extent of land mentioned was 1 acre 20 guntas instead of 1 acre 29 guntas in Sy.No.142 and record of rights was entered in the name of defendant No.2 herein.
It is further pleaded that the Sub-survey numbers was assigned as aforementioned, the parties continued to be in possession of their respective portions of their lands and 16 Com.O.S.No.5195/2017 therefore, subsequently the aforesaid Mr.M.Srinivas and Mrs.Savithri made an application to Tahsildar Bengaluru East Taluk to rectify Column No.9 in RTC as per their actual possession. The Order dated 24.07.2010 came to be passed by the Tahsildar directing rectification of revenue entries based on the actual possession of the parties. In terms of the said Order the land in Sy.No.142/2 measuring 1 acre 25 guntas including karab land has been confirmed to belong to the said Mr.M.Srinivas, and whereas land in Sy.No.142/3 measuring 1 acre 32 guntas including karab land being the plaint 'A' schedule property was confirmed as belonging to the plaintiffs.
It is further pleaded that the defendant issued reply dated 19.12.2015 to the BBMP clarifying the position to the BBMP by narrating the factual aspect of the matter informing that the plaintiffs are the lawful owners of the plaint 'A' schedule property which fact is also forthcoming from circumstances leading to the Order dated 24.07.2010 passed by the Tahsildar Bengaluru East Taluk. The defendant also addressed a letter dated 22.01.2016 to the plaintiffs addressing the aforementioned notice dated 28.10.2015 from BBMP and informed about the claims to the title of the plaint 'A' schedule property by the said Mr.Srinivas. The defendant informed that it has commenced construction and completed brickwork of both Block A and B and have invested substantial amounts of money into the development project based on the representations and assurances of the plaintiffs regarding their absolute and clear title over the plaint 'A' 17 Com.O.S.No.5195/2017 schedule property. The defendant called upon the plaintiffs to sort the issue out failing which the plaintiffs shall be liable for the delay in construction caused along with damages and for loss of goodwill of the defendant.
It is further pleaded that the defendant issued letter on 11.05.2016 to the plaintiffs calling upon them to pay service tax as against the share of the apartments falling to their share before taking possession. There was no response from the plaintiffs, once again another letter issued on 16.05.2016 to take possession of their respective shares under the JDA by resolving certain aspects like issue regarding Survey number, payment of BWSSB / KPTCL charges for upgradation of specification of DG charges, service tax, maintenance charges and Corpus fund. The defendant has issued a letter on 09.06.2017 to the plaintiffs. The plaintiffs in their letter, denied their obligation to provide a clear and marketable title to the defendant pertaining to the plaint 'A' schedule property. On the other hand, the plaintiffs deceptively demanded for payment of damages of a sum of Rs.8,07,480/- within 15 days of the reply dated 21.07.2016.
It is further pleaded that the construction activities were stopped on the specific order / direction by the BBMP on account of the cloud over the title in respect of the plaint A schedule property, the plaintiffs aware of this fact. The plaintiffs have breached several terms of the JDA, the plaintiffs attempted to avoid payment of statutory deposits, maintenance charges etc. The plaintiffs unnecessarily blaming the defendant for alleged 18 Com.O.S.No.5195/2017 delay in handing over the possession, though the defendant by its previous correspondence informed the plaintiffs that their share was ready for possession. The defendant has issued another letter dated 19.08.2016 and also sent emails on 22.06.2016, 10.08.2016, 15.09.2016, 19.09.2016, 27.10.2016, 21.02.2017, 15.05.2017, 26.05.2017 and 30.06.2017 to the plaintiffs with details of outstanding service tax to be paid on the flats. The plaintiffs and their purchasers replied these on 05.03.2017, 06.03.2017, 06.03.2017, 11.05.2017 and 29.06.2017. The plaintiffs forceably entered into the project site and threatened the purchasers / occupants and illegally broken the wall, hence, the defendant has filed a police complaint on 04.07.2017 with Bellandur P.S. It is further pleaded that the defendant has issued a notice to the plaintiffs on 10.07.2017 calling upon them to comply the shortfalls regarding payment of BWSSB / BESCOM charges, GST, payment of Corpus fund etc. The notice was served on the plaintiffs. The plaintiffs threatened the defendant that they will file a suit against him under Atrocities Act. The plaintiffs also received email in this regard. Hence, the defendant constrained to file another complaint on 13.07.2017 with Bellandur P.S. The defendant received notice from the Police. The defendant appeared before the Police on 17.07.2017. The plaintiffs also approached the Karnataka State Commission for SC/ST against the Directors of the defendant company and they appeared before the same. The plaintiffs have filed a false complaint 19 Com.O.S.No.5195/2017 against the defendants and its Directors. The Director of the defendant was retained in PS and the plaintiffs instead of for execution of an Agreement in exchange for withdrawing the cases against the defendant. The Directors of the company were forced to enter into MOU on 03.08.2017 which is falsely styled as being the settlement of dispute between the defendant and the plaintiffs. It is illegal and not binding on the defendant. The plaintiffs had filed false criminal cases.
It is further pleaded that the plaintiffs have committed material breach of various terms of JDA. The defendant has suffered loss on account of delay caused due to the order of the BBMP. The defendant also suffered loss of business repute and credibility and loss of profits. The plaintiffs are liable to compensate the defendant as per Clause No.20 of the JDA dated 31.03.2011. There is no cause of action to file the suit. The plaintiffs along with their henchmen forcibly entered into the property and broke eternal partitioned wall of Flat No.B-307 with9out the permission or the consent of the defendant. The plaintiffs threatened the workers and labourers of the defendant.
The defendant has sought counter claim that the plaintiffs are liable to make out a clear title pertaining to plaint 'A' schedule property as obliged under the JDA. They are also liable to pay statutory deposits, charges of upgradation of specifications, DG charges, they are also liable to pay maintenance charges and Corpus fund as per the terms of Clause No.19.4 of JDA, also liable to pay service tax / GST as per 20 Com.O.S.No.5195/2017 Clause Nos.17 and 18 of the JDA. The plaintiffs are liable to continue the defendant for having caused loss and hardship on account of their deliberate refusal to perform their part of obligation.
The plaintiffs are due and liable to pay Rs.2,29,88,316/- towards GST as on 01.07.2017. They are also liable to pay a sum of Rs.14,02,871/- towards Corpus fund and pay an amount for upgradation of specifications amount of Rs.26.00 lakhs, the plaintiffs are also liable to pay Rs.13.00 lakhs towards DG set back up amount, and also liable to pay a sum of Rs.79,83,450/- towards BWSSB and BESCOM and other charges. The plaintiffs are also liable to pay a sum of Rs.13,71,210/- towards maintenance charges for a period of One year as on this date. They are also liable to pay a sum of Rs.3,76,45,677/- as on the date of filing of this suit. The plaintiffs are also liable to pay interest at the rate of 18% p.a. on these amounts.
The plaintiffs are liable to compensate the defendant as per clause No.20 of the JDA. It is calculated at Rs.15/- per sq.ft. on the entitlement of the plaintiffs' calculation from 30.05.2015 till filing the suit = 71,967 Sq.ft. x Rs.15 = Rs.10,79,505/- p.m. + 28 months = Rs.3,02,26,140/-. The plaintiffs are liable to pay a sum of Rs.50.00 lakhs towards mental agony and loss of business and damage to reputation. Hence, the plaintiffs are liable to pay a sum of Rs.3,52,26,140/- towards compensation and damages. On these grounds, prays for dismissal of the suit and allow the counter claim.
21 Com.O.S.No.5195/20175. There is an amendment in the plaint. The defendant has filed its additional written statement denying the amended portion of the plaint also. The plaintiffs have to pay the amounts mentioned in the counter claim Rs.4,16,68,880/-. Hence, prays for dismissal of the suit and allow the counter claim.
6. The plaintiff Nos.3 to 6 have filed their rejoinder to the counter claim by the defendant. They have denied most of the contents of the counter claim. They have stated regarding Clause No.17 - payment of tax - the members of the first party or their nominees or the second party or the developer his nominee/s shall bear and pay any taxes outgoing to be levied on account of sale of the completed built up area as levied by the authorities in the ratio of their respective constructed areas under this agreement. It is clear that there is no mention of service tax / GST to be paid by the plaintiffs. The tax mentioned in the said clause is only on account of sale. That cannot be treated that the plaintiffs have required to pay the service tax in respect of the entire 43% of their share. The plaintiffs are not liable to pay any of the amounts claimed by the defendant in its counter claim.
7. Based on the above, this court has framed the following:
ISSUES
1. Whether the plaintiffs prove that the defendant has failed to complete the construction of their 43% share and to obtain occupancy certificate from BBMP?22 Com.O.S.No.5195/2017
2. Whether the plaintiffs prove that they have suffered financial loss of Rs.3,22,99,280/- on account of delay in handing over the possession of 29 flats?
3. Whether the plaintiffs prove that after completion of construction there is shortage of 1717 Sq.ft. in the area allotted to their share under the Sharing Agreement dated
08.08.2013 and the defendant had agreed to pay Rs.3,200/- per Sq.ft. for the deficit area?
4. Whether the plaintiffs prove that the defendant was required to install three tracks aluminum sliding windows with glass, MS safety grill, aluminum ventilators with exhaust for all flats?
5. Whether the plaintiffs are entitled for specific performance of JDA dated 31.03.2011 and Sharing Agreement dated 08.08.2023 by completing the construction and to hand over possession of B schedule property after obtaining occupancy certificate?
6. Whether the plaintiffs are entitled for permanent injunction restraining the defendant from alienating or encumbering A schedule property till handing over possession of B schedule property?
7. Whether the plaintiffs are entitled for permanent injunction restraining the defendant from alienating or encumbering B schedule property?
8. Whether the plaintiffs are entitled for Rs.4,16,68,880/- towards damages, deficit super built-up and garden area, cost of installation of aluminum sliding window and MS safety grill?
23 Com.O.S.No.5195/20179. Whether the plaintiffs are entitled for Rs.1,91,820/- per month from 01.08.2018 towards damages till the date of handing over possession of the remaining six flats in the B schedule property?
10. Whether the defendant proves that the plaintiffs committed breach of JDA by failing to clear the title to the A schedule property?
11. Whether the defendant proves that the plaintiffs have to pay Rs.2,29,88,136/- towards GST from 01.07.2017 in respect of B schedule property?
12. Whether the defendant proves that the plaintiffs are liable to pay Rs.14,02,871/-
towards Corpus Fund and Rs.26,00,000/-
towards upgradation of specifications?
13. Whether the defendant proves that the plaintiffs are due a sum of Rs.13,00,000/-
towards diesel generator set back up amount and Rs.79,83,450/- towards BWSSB, BESCOM and other charges?
14. Whether the defendant proves that the plaintiffs are due a sum of Rs.13,71,210/-
towards maintenance charges for a period of one year as on the date of counter claim i.e. 20.09.2017?
15. Whether the defendant proves that the plaintiffs have deliberately breached the terms of JDA and Supplementary Agreement and are liable to pay compensation at Rs.15/-
per Sq.ft from 30.05.2015, the date of deemed completion till filing of the suit amounting to Rs.3,02,26,140/-?
16. Whether the defendant proves that the plaintiffs are liable to pay compensation of 24 Com.O.S.No.5195/2017 Rs.50,00,000/- for loss of business, damage to reputation and goodwill, mental agony?
17. Whether the defendant proves that the plaintiffs obtained MOU dated 03.08.2017 by coercion and undue influence by keeping the directors under over night consignment in the police station in relation to Cr.No.201/2017 of Bellanduru Police?
18. Whether the defendant is entitled for declaration in respect of MOU dated 03.08.2017 as prayed?
19. What order or decree?
8. To prove the case, the plaintiff No.5 is examined as PW1 and got marked some documents at Ex.P1 to P147(a). An Engineer is examined as PW2. The Director of the defendant is examined as DW1 and produced some documents at Ex.D1 to D41.
9. Heard arguments. Perused the records.
10. My findings on the above issues are:
Issue No.1: Does not survive for consideration Issue No.2: In the negative Issue No.3: In the negative Issue No.4: In the negative Issue No.5: Does not survive for consideration Issue No.6: Does not survive for consideration Issue No.7: Does not survive for consideration Issue No.8: In the negative Issue No.9: In the negative Issue No.10: In the negative 25 Com.O.S.No.5195/2017 Issue No.11: In the negative Issue No.12: In the negative Issue No.13: In the negative Issue No.14: In the negative Issue No.15: In the negative Issue No.16: In the negative Issue No.17: In the negative Issue No.18: In the negative Issue No.19: As per the final order for the following REASONS
11. Issue Nos.1 to 4 and 10: These issues are interlinked to each other. Hence, I have taken these issues for a common discussion. The burden of proving issue Nos.1 to 4 lies on the plaintiffs and the burden of proving Issue No.10 lies on the defendant. The plaintiff No.5 has filed his affidavit in lieu of his evidence and he is examined as PW1. He has produced number of documents and they are marked at Ex.P1 to P147.
12. During his cross examination, it is forthcoming that he has not admitted that he has not informed the defendant at the time of entering into JDA about the boundary dispute with Srinivas. Even he has denied that he did not informed the defendant regarding pendency of O.S.No.2577/2006 which was filed by the daughter of plaintiff No.3. The plan was sanctioned on 30.05.2013. He has admitted that the plaintiffs had agreed for 24 months time with Six months grace period from the date of completion of the building. He has further admitted that the defendant handed over the first unit to him on 16.09.2016, they 26 Com.O.S.No.5195/2017 are in the possession of 29 units. He has also admitted that he has registered Atrocities case against Srinivas and also the defendant with the Police and SC/ST Commission. He has admitted that he has signed the MOU on 03.08.2017, the plaintiffs were in the possession of 09 Flats from then. He has also admitted that the defendant handed over the possession of 14 Flats on the date of MOU and also agreed to handover 06 flats after the boundary dispute resolved. The plaintiffs have given 608 sq.ft. of Super built up area to the defendant. He has admitted that the defendant has issued a notice on 10.07.2017 and the same is marked as Ex.D1. He has also admitted that the plaintiffs had not paid any amount to the defendant after 10.07.2017.
13. It is further forthcoming that, the plaintiffs have sold about 07-08 flats. Also admitted that three tracks shutters with grills is installed for the windows. He has also admitted that as per the JDA, the plaintiffs agreed to pay proportionate share of maintenance, Corpus, BWSSB and KPTCL deposits.
14. In his further cross examination it is forthcoming that, he has admitted the Ex.D2 i.e. a copy of the letter regarding handing over 1.10 acres of land in Sy.No.142/2 to the defendant for the construction of apartment. He has admitted that the original documents are not handed over either to the defendant or to the Owner's Association. Since the defendant has not done any upgradation, hence he has not paid any amount. He has denied the other suggestions.
27 Com.O.S.No.5195/201715. The PW2, who is a Civil Engineer and a Contractor. He has filed his affidavit. He has identified his report at Ex.P134. In his cross examination, it is forthcoming that as per the request of the plaintiff No.3 he has measured the flats. He did not intimate the developer about this. Even he did not intimate the buyers of the flats also. He has denied the other suggestions.
16. One of the Director of the defendant company is examined as DW1. He has filed his affidavit. He has narrated the defence taken by the defendant and the claim made through the counter claim. He has produced some documents as Ex.D1 to D41.
17. In his cross examination, it is forthcoming that he obtained Ex.P5 to P7 on behalf of the plaintiffs. As per Ex.P6 the name has been changed. The defendant obtained conversion order on 27.08.2011 and also admitted that, thereafter the defendant took 11 months to get Khata changed. Since there was no compound wall, hence there was a delay. He has admitted that before JDA, they had physically verified the property. The Ex.P129 is the approved building plan and it is dated 21.05.2013 and after lapse of 10 months, it was obtained. He has admitted that there was 26 months delay in obtaining the approved plan from the date of JDA. But, the delay was no intentional one.
18. In his further cross examination, it is forthcoming that the Ex.P34 to P44 are the photos of the flats constructed in the plaint A Schedule property and they pertain to one flat and it was 28 Com.O.S.No.5195/2017 used as storeroom. The Ex.P49 to P90 are the photographs relating to flats constructed in the plaint 'A's schedule property. He has admitted that under the Sharing Agreement, the plaintiffs had given up 609 Sq.ft. of super built up area in out area in lieu of payments to be made to BESCOM and BWSSB. He has also admitted that the defendant has not spent Rs.79.00 lakhs towards BWSSB and BESCOM deposits. The defendant has not entrusted maintenance to third party. He can produce the documents to show that an amount of Rs.26,36,202/- spent for maintenance of the flats. He does not aware whether the plaintiffs paying maintenance charges after one year from the date of completion of the flats. The plaintiffs have paid maintenance charges as per Ex.P109 to P126. Even he can produce the documents to show that Rs.26.00 lakhs was incurred towards upgradation in the apartment. The defendant has not paid Rs.14,02,481/- towards Corpus fund on behalf of the plaintiffs, they have to pay the same. The plaintiffs had sold 5-6 flats and GST was paid for the same and thereafter the defendant has not received any GST.
19. In the further cross examination, he has denied that as on the date of the approval of the plan, the plaint A Schedule property was vacant and ready for putting up construction. He received Ex.D5 on 28.10.2015 when the period stipulated under JDA was about to expire. He has denied that there is no dispute between the owners of Sy.No.142/2 and 142/3. He has admitted that there is no dispute in the amount of service tax claimed by 29 Com.O.S.No.5195/2017 him in the counter claim and in Ex.P17. He has denied the other suggestions.
20. The learned counsel for the plaintiffs has submitted his arguments basing on the plaint averments and also evidence of PW1 and PW2 and documents produced on behalf of the plaintiffs. He has also drawn my attention towards the evidence of DW1 and the documents produced on behalf of the defendant. It is an admitted fact that the plaintiffs are the owners of the plaint A schedule property and the defendant is the company who is a developer. It is also an admitted fact that there was a JDA between the parties executed on 31.03.2011. He has also drawn my attention towards the terms and conditions of this JDA and the same is produced at Ex.P1.
21. He has further pointed out that earlier the suit was filed by the plaintiff for the relief of specific performance of contract on the basis of JDA and Sharing Agreement dated 08.08.2013 and for the relief of permanent injunction. Subsequently there is an amendment in the plaint as well as in the prayer column regarding direction to the defendant to pay the amount as damages to the tune of Rs.4,16,68,880/- for shortage / deficit of super built-up area and garden area and Rs.1,91,820/- as damages from 01.08.2018 till handing over the possession of the remaining Six flats. It is also submitted that the defendant has already handed over all the flats to the plaintiffs as per the JDA.
30 Com.O.S.No.5195/201722. He has pointed out towards the Clause No.12.1 of the JDA, the time limit for the developer deliver the members / owner's share of super-built-up area within a period of 24 months from the date of sanction of the plan and issuance of license. There was a grace period of Six months. The plan is approved on 30.05.2012. The defendant has delivered some of the flats to the plaintiffs out of their share. There is delay of 2.2 years. The land i.e. the plaint A schedule property was converted into NA on 21.08.2011 and khata was obtained on 28.01.2012, building plan was obtained on 30.05.2012. The developer i.e. defendant ought to have handed over the flats to the plaintiffs as per their share as agreed in JDA on 30.11.2015. The defendant has handed over 23 flats on 03.08.2017 and the defendant has not delivered the remaining Six flats as agreed. He has further submitted that, later the defendant / developer has also handed over the remaining Six flats also to the plaintiffs, in the year 2018. Now, the plaintiffs claimed damages from the defendant / developer regarding non delivery of the flats in time and shortage of super-built-up area as well as garden area and cost of installation of aluminum sliding windows and MS safety grill.
23. During his arguments, he has further submitted that, the BBMP has issued notice, he has also drawn my attention towards the Sharing Agreement also. The defendant / developer has sold some flats to the others, even prior to developing the flats of the plaintiffs' share. The defendant had no reasons to stop the work of construction. Deliberately, the defendant without any 31 Com.O.S.No.5195/2017 proper reasons by saying one or the other reasons, delayed and stopped the work in the portion of the plaintiffs' flats. He has pointed out towards the counter claim made by the defendant / developer also. The defendant is not entitled for the counter claim. The developer is in fault for completion of work as agreed in JDA.
24. He has further pointed out towards the clause No.19 of the JDA regarding taxes, deposits and maintenance etc. He has also drawn my attention towards the Clause No.20 of the JDA also. He also drawn my attention towards the clause No.24 - Breach and Consequences - "In the event of breach by either party to this agreement, the other party (the aggrieved party) shall be entitled to specific performance of the contract and also be entitled to recover all losses, damages and expenses incurred as a consequence of such breach from the party committing breach".
25. He has also drawn my attention towards Ex.P3 also i.e. Sharing Agreement dated 08.08.2013. He has also drawn my attention towards the clause No.14 of Ex.P3 - "The first party specifically agreed to clear the deposits, official charges payable to the concerned authorities with respect to BESCOM and BWSSB connections to the first party's share, while taking possession of the first party's share of super-built-up area after adjusting the cost of deficit area allotted to the first party (i.e. 609 Sq.ft. of SBA and 101 Sq.ft of garden area)". He has also drawn my attention towards the Annexure-I and II mentioned in Ex.P3. Rs.3,200/- per 32 Com.O.S.No.5195/2017 Sq.ft. X 609 Sq.ft. He has further submitted that GST is not applicable to the plaintiffs.
26. He has further pointed out towards the Ex.P130 i.e. the Occupancy Certificate dated 17.02.2022. He has also drawn my attention towards Ex.P14 i.e. the copy of the notice issued to the defendant on 20.02.2016. The defendant has not completed the work till November 2015. There is a delay. If there is a delay, Rs.15/- per Sq.ft. is also to be paid by the defendant / developer. He has also drawn my attention towards Ex.P134 i.e. the Certificate issued by the Engineer with regarding to the measurement of flats of the shares of the plaintiff. The defendant has not produced any rebuttal evidence to disprove the evidence of the plaintiffs. The plaintiffs have sold some flats, they need not pay the compensation - GST to the defendant / developer. The Ex.P131 is the email dated 09.08.2017 sent by the plaintiff No.5 to the defendant and also drawn my attention towards Ex.P132 i.e. email sent by the defendant to the plaintiff No.3. The Ex.P133 is the email sent by the defendant / developer to the plaintiff No.3 on 15.11.2018. He has further pointed out towards Ex.P147 i.e. the notice issued by RERA dated 25.10.2017. The Ex.P128 is the copy of the MR No.22/2011-12 pertaining to the suit property. There is no fault on the part of the plaintiffs, hence, they need not pay any amount as claimed by the defendant / developer. In turn the defendant has to pay the amount as damages to the plaintiffs because of delay in handing over the possession of the flats and other aspects.
33 Com.O.S.No.5195/201727. The Ex.P22 to P33 are the copies of Sale Deeds executed by the defendant on the strength of GPA in favour of the purchasers in the year 2017. The defendant / developer has not paid Rs.79.00 lakhs to the BWSSB.
28. The learned counsel for the defendant has also submitted his arguments that there is a JDA between the plaintiffs and the defendant on 30.03.2011, he has also admitted some facts regarding building plan obtained on 30.05.2013 and Sharing Agreement dated 08.08.2013. These are not in dispute. He has also pointed out towards the defence made out by the defendant / developer and also the reliefs sought through counter claim. The plaintiffs claimed damages in the year 2019, and not earlier, when the suit has been instituted. By way of amendment the plaintiffs sought the relief of damages. He has pointed out that the plaintiffs had not cooperated for fulfillment of the construction work as agreed by them through JDA. The breach of contract is not on behalf of the defendant, but, it is from the plaintiffs. He has pointed out towards the provisions of Sec.73 of the Indian Contract Act. There is no pleadings in the plaint regarding damages and only on the basis of amendment which is subsequently sought, the plaintiffs are not entitled for the damages. He has also drawn my attention towards the provisions of Sec.55 of the Contract Act. Hence, the plaintiffs have no locus standi to claim the compensation.
29. He has also further submitted that the plaintiffs have admitted the counter claim made by the defendant / developer, 34 Com.O.S.No.5195/2017 hence, the question of evidence does not arise. Hence, the counter claim made by the defendant / developer remained as unchallenged. He has further submitted in regard to Issue No.1 that the defendant / developer has already completed the construction of the share of the plaintiffs and admittedly all the flats have been handed over to the plaintiffs. It is also admitted by the other side. Hence, Issue Nos.1 and 5 do not survive for consideration.
30. In the same way, Issue No.7 and 9 also do not survive for consideration, because there is no question of alienation by the defendant / developer regarding the flats of the share of the plaintiffs. He has pointed towards the cross examination of PW1 and evidence of DW1. He has also drawn my attention towards the examination in chief of PW1. There is no termination, he also drawn my attention towards the Ex.P1 i.e. the JDA and Clause No.17, 32 also. He has also drawn my attention towards the documents produced on behalf of the defendant / developer at Ex.D1 to D41. The MOU - Ex.D13 dated 03.08.2017 is continuation of the JDA, he also drawn my attention towards the clauses mentioned in Ex.D13.
31. During arguments, the learned counsel for the defendant has relied upon the following decisions :
AIR 2002 SC 1272 General Manager Northern Railways & Ors. Vs Sarvesh Chopra 35 Com.O.S.No.5195/2017 "Contract - Delay in performance of contract - Contract between the parties whereunder the contractor has undertaken not to make any claim for delay in performance of the contract occasioned by an act of the employer, still a claim entertainable - i) If the contractor repudiates the contract exercising his right to do so under Sec.55 of the Contract Act, ii) The employer gives an extension of time either by entering into supplemental agreement or by making it clear that escalation of rates or compensation for delay would be permissible, iii) If the contractor makes it clear that escalation of rates or compensation for delay shall have to be made by the employer and the employer accepts performance by the contractor inspite of delay and such notice by the contractor putting the employer on terms.
13. A Division Bench decision of High Court of Andhra Pradesh in State of A.P. Vs. M/s. Associated Engineering Enterprises, Hyderabad, AIR 1990 A.P. 294, is of relevance. Jeevan Reddy, J. (as His Lordship then was), speaking for the Division Bench, held that where clause 59 of the standard terms and condition of the contract provided that neither party to the contract shall claim compensation "on account of delays or hindrances of work from any cause whatever", an award given by an arbitrator ignoring such express terms of the contract was bad. We find ourselves in agreement with the view so taken.
14. In Hudson's Building and Engineering Contracts (11th Edition, pp.1098-9) there is reference to 'no damage' clauses, an American expression, used for describing a type of clause which classically grants extensions of time for completion, for variously defined 'delays' including some for which, as breaches of contract on his part, the owner would prima facie be contractually responsible, but then proceeds to provide that the extension of time so granted is to be the only right or remedy of the contractor and, whether expressly or by implication, that damages or compensation are not to be recoverable therefor. These 'no damage' clauses appear to have been primarily designed to protect the owner from late start or co-ordination claims due to other contractor delays which would otherwise arise.36 Com.O.S.No.5195/2017
Such clauses originated in Federal Government contracts but are now adopted by private owners and expanded to cover wider categories of breaches of contract by the owners in situations which it would be difficult to regard as other than oppressive and unreasonable. American jurisprudence developed so as to avoid the effect of such clauses and permitted the contractor to claim in four situations, namely, (i) where the delay is of a different kind from that contemplated by the clause, including extreme delay, (ii) where the delay amounts to abandonment, (iii) where the delay is a result of positive acts of interference by the owner, and (iv) bad faith. The first of the said four exceptions has received considerable support from judicial pronouncements in England and Commonwealth. Not dissimilar principles have enabled some commonwealth courts to avoid the effect of 'no damage' clauses. [See Hudson, ibid]."
AIR 1992 Mad 139 Central Bank of India Vs Guruviah Naidu and Sons (Leather) Pvt. Ltd. & Ors.
"22. Consequent to my finding that subsequent to the filing of the suit, the plaintiff and the defendants had since entered into a separate agreement and thereby the offer to pay the sum of Rs. 10,00,000/- towards the full discharge of the suit claim was accepted by the plaintiff and that accordingly, it has been paid in full on twelve occasions pursuant to the agreement entered into and that inasmuch as the said agreement of compromise has been admitted and not controverted as referred to in the letters written by the plaintiff under Ex. P. 24 and P. 25, I have no hesitation to hold that the parties herein has entered into a second agreement to supersede the liability and the entitlement formulated through the suit transaction and that under the circumstances, admittedly, the said subsequent agreement squarely comes within the ambit of Section 62 of the Indian Contract Act which read as follows :
"If the parties to a contract agree to substitute a new contract for it, or to rescind or 37 Com.O.S.No.5195/2017 alter it, the original contract need not be performed."
If that was the position, then this matter squarely comes within the mischief of S. 63 of the Indian Contract Act. This Section provides as follows :
"Every promisee may dispense with or may remit, wholly or, in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit."
AIR 2000 Bom 204 Maharashtra State Electricity Board, Bombay Vs Sterlite Industries (India) Ltd.
"Case Note : Arbitration - terms of contract - Sec.73 of Indian Contract Act, 1872 - contract gives appellant right to purchase goods at its discretion if respondent failed to supply same as per terms of contract - respondent liable to pay difference in contract price and such purchase price - appellant did not availed of such provision on respondent's failure to supply goods in time - appellant cannot claim damages in terms of Sec.73 - compensation can be awarded when actual damage occurred to contacting party - non exercise of its right to purchase goods disentitle appellant from claiming damages.
12. Alternatively, he further argued that if Sec.73 of the Indian Contract Act is attracted, then, in order to succeed on the basis of that section, the appellants need to prove damages and loss suffered by them. Learned Counsel further contended that even otherwise, it was incumbent on the part of the appellants under Clause 14(ii) of the Contract to actually purchase the goods, not supplied, from the open market after termination of the contract in order to claim damages. As such, the claim of the appellants was rightly rejected by the two Arbitrators. Mr. Bharucha contended that the approach adopted by the arbitrators cannot be challenged in 38 Com.O.S.No.5195/2017 proceedings under Sec.30 of the Act. He, therefore, prays for dismissal of both the appeals.
15. In the light of the above view taken by us, it is really not necessary to go into the second question as to whether appellants proved the alleged loss suffered by them. However, both the learned Counsel have advanced arguments on this aspect as such we are dealing with the same. It is a well settled law that where loss in terms of money is payed for, the party claiming compensation must prove such loss suffered by it. The concept of compensation is linked up with loss or damages that result from breach of contract and where no loss or damage is ensued, there would be no question of awarding compensation. Sec.73 of the Contract Act does not give any cause of action unless and until damages are actually suffered, otherwise Sec.73 will become nugatory and party would be penalised though the other party suffered no loss. Thus, even under Sec.73 of the Contract Act, party claiming compensation is under an obligation to prove the loss suffered on account of breach of agreement by the respondents. In the present case, as found by the Arbitrators in the majority awards the appellants have failed to prove quantum of loss suffered by them. The appellants were, therefore, held not entitled to any damages claimed in the respective statement of claims. According to Mr. Bharucha, learned Counsel for the respondents approach of the Arbitrators cannot be faulted in the proceeding under Sec.30 of the Arbitration Act as categorical findings have been recorded by the majority arbitrators in the respective awards. The appellants (claimants) have failed to prove that they suffered any loss. It is, therefore, not possible for this Court to examine findings of fact in the present appellate jurisdiction. Consequently, no fault can be found with the approach adopted by the learned Single Judge is the last contention of the appellants."
AIR 2000 SC 2003 Ghaziabad Development Authority Vs Union of India (UOI) & Ors.
39 Com.O.S.No.5195/2017"Compensation - normally no damages in contract awarded for injury to feelings or for mental distress, anguish, annoyance, loss of reputation or social discredit caused by breach of contract - exception limited to contract whose performance is to provide peace of mind or freedom from distress - direction awarding compensation set aside.
6. The ordinary heads of damages allowable in contracts for sale of land are settled. A vendor who breaks the contract by failing to convey the land to the purchaser is liable to damages for the purchasers loss of bargain by paying the market value of the property at the fixed time for completion less the contract price. The purchaser may claim the loss of profit he intended to make from a particular use of the land if the vendor had actual or imputed knowledge thereof. For delay in performance the normal nature of damages is the value of the use of the land for the period of delay, viz. usually its rental value (See Chitty on Contracts, ibid, para 26.045)."
AIR 2006 SC 1438 Punjab State Civil Supplies Corp. Ltd. Vs Sikander Singh "17. A suit for damages would be maintainable only on the ground of breach of the terms and conditions of the contract and when there are acts of mal-feasance, mis-feasance and non-feasance. A suit for damages for breach of contract under common law can be decreed only when the damages are found to have occurred by reason of such breaches on the part of the defendant. For the said purpose, the extent of damages suffered must be proved in terms of Sec.73 of the Indian Contract Act."
32. After hearing the learned counsel for the parties at length, I have perused the plait averments and the evidence of the parties as well as the documents produced on behalf of the 40 Com.O.S.No.5195/2017 parties. There are some admitted facts in the suit on hand, they are, the plaintiff are the owners of the plaint A schedule property i.e. Sy.No.142/2 measuring 1.10 acres at Doddakannehalli, Bengaluru East Taluk. There is a JDA entered into between the plaintiffs and the defendant / developer. One more admitted fact is Sharing Agreement between the parties. It is agreed between the parties that the defendant / developer has to give 43% of the super-built-up area in the apartment constructed on the converted land in Sy.No.142/2 referred above, i.e. mentioned as B Schedule property. One more admitted fact is, earlier the defendant / developer has handed over some flats to the plaintiffs as per the JDA and subsequently in the year 2018 i.e. during the pendency of the suit, it has handed over remaining Six flats also. Therefore, now there is no question of handing over the flats as agreed between the parties in JDA of the year 2011. These are the admitted facts.
33. Admittedly, the plaintiffs have filed this suit earlier for the relief of specific performance of contract on the basis of JDA dated 31.03.2011. The defendant has filed its written statement. Subsequently, in the year 2019 the plaintiffs got amended their plaint in the prayer column and sought the reliefs regarding the damages referred above and they are amended as 17(a) to 17(c) and (a)-(aa) and (ab) and para No.10(a). The defendant also claimed counter claim against the plaintiffs and the plaintiffs have filed their rejoinder. Since, the defendant / developer has handed over the flats to the plaintiffs as per their share i.e. 43% 41 Com.O.S.No.5195/2017 in JDA. Now the only question remaining regarding damages as sought by the plaintiffs and the damages sought by the defendant / developer in its counter claim.
34. I have gone through the provisions of Sec.55 and 73 of the Contract Act which reads as under-
"Sec.55 - Effect of failure to perform at a fixed time, in contract in which time is essential When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract. Effect of such failure when time is not essential.--If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. Effect of acceptance of performance at time other than that agreed upon.--If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance he gives notice to the promisor of his intention to do so."42 Com.O.S.No.5195/2017
"Sec.73 - Compensation for loss or damage caused by breach of contract -
When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Compensation for failure to discharge obligation resembling those created by contract. When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract."
35. I have gone through the evidence of PW1, who is the plaintiff No.5. Number of documents have been produced by the plaintiffs at Ex.P1 to P147. The Ex.P1 of the year 2011 and Ex.P3 of the year 2013, i.e. JDA and Supplemental Sharing Agreement, the Ex.P3 is continuation of Ex.P1. I have gone through the clauses mentioned in Ex.P1 and P3. The time fixed for completion of the construction by the defendant / developer was 24 months as per Clause No.12.1 of Ex.P1. In regard to payment of Tax is concerned, Clause No.17 of Ex.P1 shows the developer or his nominee bear and pay any taxes going to be levied on account of sale of the completed built-up areas as levied by the authorities in the ratio of their respected constructed area under this 43 Com.O.S.No.5195/2017 Agreement. It shows that both parties have to pay the necessary taxes depending their share of ratio 43:57.
36. The Ex.P1 also shows regarding non refundable deposit at Clause No.32. The second party have paid an amount of Rs.10.00 lakhs towards non refundable deposit. There is no dispute in this regard. Clause No.12.2 of Ex.P1 reads that "In the event of second party / developer unable to adhere to deliver the constructed area as aforesaid and if there is delay for the reasons not attributable for reasons set out in Clause No.11.3 below, the first party agreed to grace a further period of Six months to the second party and the second party / developer undertakes to complete the construction during this period. After going through the documents produced on behalf of the plaintiffs as well as the defendant / developer, admittedly, the developer who is second party has not handed over the 43% of super-built-up area to the plaintiffs. Admittedly, Six flats have been handed over in the year 2018 i.e. during the pendency of the suit. Earlier, some flats have been handed over. The say of the defendant / developer, because of non cooperation by the plaintiffs to carry out the work as well as several complaints have been lodged against the Directors of the defendant company and because of boundary dispute in respect of Sy.No.142/2 and 142/3, the work was delayed and delivery of possession of the flats also delayed.
37. The documents produced at Ex.P1 to P147 are the copies of JDA, GPA, Supplemental Sharing Agreement, copies of sale deeds, copy of the legal opinion, copy of the MR, RTC, legal 44 Com.O.S.No.5195/2017 notices, replies etc. The Ex.D1 to D41 are the copies of the notices, copies of the complaints before the police as well as Karnataka State SC/ST commission, MOU, copy of FIR, photographs, copies of emails etc.
38. After going through the documents referred above, the plaintiffs had lodged complaints against the Directors of the defendant company before the Police even lodged complaint before the Karnataka State ST/SC commission. It is admitted by PW1 that the defendant / developer handed over the first unit on 16.09.2016 and also admitted that the plaintiffs were in the possession of 09 flats as on the date of MOU dated 03.08.2017 and he has admitted that the defendant / developer has handed over 14 flats on the date of MOU. It clearly goes to show that the plaintiffs have received 23 flats on the date of MOU and prior to this suit itself. Hence, as rightly pointed out by the learned counsel for the defendant, since the plaintiffs have received 43% of their share. Therefore, the Issue Nos.1 and 5 does not survive for consideration.
39. It is also rightly pointed out by the learned counsel for the defendant that though the plaintiffs have sought for damages in their prayer after amendment. But, there is no pleadings. After going through the plaint averments, para No.10(a) is amended and in prayer column the plaintiffs have sought amendment regarding damages. Since there is no pleading in the plaint regarding damages. Therefore, any amount of evidence without pleadings do not come to the aid of the plaintiffs. The plaintiffs 45 Com.O.S.No.5195/2017 have produced the report of the Civil Engineer and Contractor (PW2). He has submitted his report at Ex.P134. I have also gone through the Ex.P134. This is the report regarding Land Owners Flats Measurement dated 11.11.2017. It shows regarding the measurement of the Flat, built-up area. According to this statement / report, the 43% grand total is 2836.78 Sq.ft. and the total area statements including built-up area, balcony, utility, garden area, common area and terrace area is 56938.54 Sq.ft. The total built-up area is 53832 Sq.ft. 75% of super-built-up area is 39461.63 and total super area is 40374 and difference is 912.37 Sq.ft. In regard to garden area, the total super area is 8776 Sq.ft. and built-up area is 7971 and the difference is 805 Sq.ft.
40. The plaintiffs sought for the damages regarding shortfall in built-up area as well as garden area at the rate of Rs.3,200/- per Sq.ft. The Ex.P49 to P107 are the photos regarding some of the flats. After perusing the same, some of the flats completed and some are under construction. These photos were taken on 26.07.2017, 08.11.2017. Some of the photos taken prior to the institution of this suit and some photos taken after institution of the suit. The Ex.P136 to P143 also photographs, these go to show regarding the construction of the apartment. Some of the photos taken in the month of January 2014. By considering the documents referred above, there is no cogent and believable evidence to support the damages sought by the plaintiffs.
46 Com.O.S.No.5195/201741. I have also gone through the decisions relied upon by the learned counsel for the defendant / developer. Since, the defendant / developer was already handed over 43% of the super-built-up area to the plaintiffs as per the JDA. There is no concrete proof to say that the plaintiffs have suffered financial loss of Rs.3,22,99,280/- as sought and also regarding shortage of 1717 Sq.ft. in the area allotted to their share under Ex.P3 - Sharing Agreement dated 08.08.2013. Though there is a clause in Ex.P3 that the developer / second party has to pay Rs.3,200/- per Sq.ft. to the first party i.e. plaintiffs herein, who are the owners of the plaint A schedule property. Since there is no proof which is acceptable one to say that the plaintiffs have suffered financial loss.
42. The burden of proving Issue No.10 lies on the defendant / developer. The defendant has taken a defence that the plaintiffs have committed breach of JDA by failing to clear the title pertaining to the plaint A schedule property. Admittedly, there is a boundary dispute between the owners of Sy. Nos.142/2 and 142/3. But, the defendant / developer has not produced any cogent evidence by way of documentary proof. In view of the discussions made supra, I answer the Issue Nos.2 to 4 in the negative and in regard to Issue No.1 is concerned, it does not survive for consideration. I answer the Issue No.10 in the Negative.
43. Issue Nos.5 to 9: These are in regard to the reliefs sought by the plaintiffs in the suit. It is submitted on behalf of the 47 Com.O.S.No.5195/2017 defendant / developer and also admitted by PW1 also that all the flats have been handed over to the plaintiffs as per the JDA. Moreover, there is no dispute regarding alienation of the flats by the defendant / developer. The Ex.P1 and P3 are the documents i.e. JDA and Sharing Agreement of the year 2011 and 2013, since the plaintiffs have taken possession of their 43% of built-up area as per the JDA, hence, the Issue No.5 does not survive for consideration. The plaintiffs are also not entitled for the relief of permanent injunction restraining the defendant / developer from alienating or encumbering A schedule property till handing over the possession of the B Schedule property. This Issue No.6 is also does not survive for consideration. There is no question of alienating the property mentioned in B Schedule of the plaint i.e. 43% of the plaintiffs' share, they have taken the possession. Hence, this Issue No.7 also does not survive for consideration. The plaintiffs are also not entitled for the damages as sought regarding deficit super-built-up area and garden area as well as cost of installation of aluminum sliding and MS safety grill. Since there is no cogent evidence, hence the plaintiffs are not entitled for this damages. In regard to Issue No.9 is concerned, the plaintiffs sought for the damages of Rs.1,91,820/- per month from 01.08.2018 till handing over the possession of the remaining Six flats in the B schedule property. Admittedly, the defendant / developer has handed over Six flats in the year 2018. The plaintiffs are though entitled for damages for delay, but not as sought. Accordingly, I answer, Issue Nos.5 to 7 do not survive for consideration and Issue Nos.8 and 9 in the negative.
48 Com.O.S.No.5195/201744. Issue Nos.11 to 18: The defendant / developer has taken the defence that the plaintiffs have to pay Rs.2,29,88,136/- towards GST from 01.07.2017 in respect of B schedule property and they are also liable to pay Rs.14,02,871/- towards Corpus fund and Rs.26.00 lakhs towards upgradation of specifications. The defendant also sought an amount of Rs.13.00 lakhs towards DGS generators set back up amount and Rs.79,53,450/- towards BWSSB and BESCOM and other charges. The defendant has also sought compensation at Rs.15/- per Sq.ft. from 30.05.2015 and a total compensation of Rs.3,02,26,140/-. Apart from that the developer also sought for a compensation of Rs.50.00 lakhs for loss of business, damage to reputation. These reliefs sought by the defendant / developer through its counter claim. It is suitably replied by the plaintiffs.
45. Apart from these, the defendant / developer also sought for declaration in respect of MOU dated 03.08.2017 saying that the plaintiffs had obtained the signatures of Directors of the defendant by coercion and undue influence by filing a false case before the Bellandur Police in Crime No.201/2017.
46. After considering the evidence of PW1, PW2 and DW1 as well as the documents produced by the parties, the defendant / developer has produced some copies of documents pertaining to the complaint lodged by the plaintiffs against its Directors as per Ex.D10 to D14. By going through these documents, it is clear that the plaintiffs had filed complaints 49 Com.O.S.No.5195/2017 against the Directors of the defendant not only before the Police but also before the Karnataka State SC/ST Commission also. Even PW1 has admitted that the plaintiffs had lodged a complaint against the Directors of the defendant company with Bellandur P.S.
47. The defendant / developer also sought for the aforesaid amounts from the plaintiffs. The defendant / developer has also not produced reliable documents to prove its claim made under counter claim. As per Ex.P1, Clause No.17 as referred above, the parties i.e. first party and second party shall bear and pay the taxes going to be levied on account of sale of completed built-up areas as levied by the authorities in the ratio of the respective constructed area under this agreement. The defendant / developer has not produced document to show that the amounts on behalf of the plaintiffs was paid by the defendant. Therefore, the defendant / developer also not proved the defence by placing cogent evidence. Even the defendant / developer has not succeeded in proving the Issue Nos.17 and 18 also. Apart from production of copies of FIR and other endorsements issued by the concerned Police, there is on concrete evidence to prove that the MOU dated 03.08.2017 obtained by the plaintiffs by coercion and undue influence by keeping its Directors under overnight consignment in the Police Station. As already I have discussed, while discussing the Issue Nos.1 to 4 and 10 as well as other issues, the defendant who is the developer, has not produced cogent and acceptable evidence to allow its counter 50 Com.O.S.No.5195/2017 claim. Accordingly, I answer the Issue Nos.11 to 18 in the negative.
48. Issue No.19: The plaintiffs have sought the aforesaid reliefs including specific performance of contract on the basis of JDA-Ex.P1 dated 31.03.2011 and Sharing Agreement-Ex.P3 dated 08.08.2013 directing the defendant / developer to handover the possession of the B schedule property to them after completing the construction. As discussed supra and as admitted by the parties, the defendant / developer has handed over all the Flats required to be handed over to the plaintiffs as per their share of 43% as agreed in Ex.P1 already handed over. Therefore, the question of the relief of contract does not arise. The subsequent prayers have been added after amendment and as rightly pointed out by the learned counsel for the defendant / developer, there is no pleadings. Therefore, in the light of discussions made supra, while answering the Issue Nos.1 to 4 and other issues, the plaintiffs are not entitled for the other reliefs also. In the result, I pass the following :
ORDER Suit of the plaintiffs is dismissed. No order as to costs.
The counter claim sought by the defendant also dismissed.
Draw decree accordingly.
Issue copy of the judgment to the parties through email as provided U/o 51 Com.O.S.No.5195/2017 XX Rule 1 of CPC if email ID is furnished.
(Dictated to the Stenographer, transcribed and typed by her, corrected and then pronounced by me in the open court on this the 5th day of April 2024) (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.
ANNEXURE List of witnesses examined for the plaintiff:
PW1 Madhusudhan PW2 Muniraju
List of documents marked for the plaintiff:
Ex.P1 Cc of JDA dated 31.03.2011 Ex.P2 Cc of GPA Ex.P3 Copy of supplemental sharing agreement Ex.P4 Copy of the conversion order Ex.P5 Copy of khata extract and tax paid receipt Ex.P6 Copy of the legal opinion
Cc of mutation register extract No.139/2003-
Ex.P7 2004 Cc of RTC extract in respect of Sy.No.142/2 of Ex.P8 Doddakannelli Village, Varthuru Hobli Ex.P9 Legal notice dated 22.01.2016 52 Com.O.S.No.5195/2017 Ex.P10 Reply dated 21.03.2016 Ex.P11 Notice dated 20.02.2016 Notice received from The Ministry of Finance, Department of Revenue, Central Board of Ex.P12 Exercise and Customs with regard to service tax on construction service, dated 10.02.2012 Ex.P13 Notice dated 21.03.2016 Reply dated 11.05.2016 with statement Ex.P14 regarding service tax Ex.P15 Legal notice dated 16.05.2016 Ex.P16 Reply dated 21.07.2016 Ex.P17 Legal notice dated 13.08.2016 Ex.P18 Cc of Sale Deed dated 19.01.2017 Ex.P19 Copy of Sale Deed dated 31.03.2017 Ex.P20 Copy of Sale Deed dated 15.04.2017 Ex.P21 Copy of Sale Deed dated 06.05.2017 Ex.P22 Copy of Sale Deed dated 20.03.2017 Ex.P23 Copy of Sale Deed dated 19.01.2017 Ex.P24 Copy of Sale Deed dated 27.04.2017 Ex.P25 Copy of Sale Deed dated 18.03.2017 Ex.P26 Copy of Sale Deed dated 16.03.2017 Ex.P27 Copy of Sale Deed dated 07.04.2017 Ex.P28 Copy of Sale Deed dated 22.05.2017 Ex.P29 Copy of Sale Deed dated 05.01.2017 Ex.P30 Copy of Sale Deed dated 25.02.2017 Ex.P31-P44 Photographs with CD Ex.P45-P105 Photos of the building Ex.P106 Cost sheet Ex.P107-P126 Receipts issued by 80 Trees Apartment Owners Welfare Association Ex.P127 Office copy of legal notice dated 06.02.2013 53 Com.O.S.No.5195/2017 Ex.P128 Certified MR 22/2011-12 extract Ex.P129 Copy of building plans sanctioned by BBMP Ex.P130 Occupancy certificate dated 17.02.2022 Ex.P131 Email dated 09.08.2017 with enclosures Ex.P132 Email dated 15.11.2018 Ex.P133 Email dated 15.11.2018 Ex.P134 Certificate issued by the Engineer Ex.P134 (a) Signature of the Engineer Ex.P135 Cc of the partition deed dated 03.11.2003 Ex.P136 to Photographs P143 Ex.P144 Certificate U/Sec.65B of the Evidence Act Ex.P145 Certificate U/Sec.65B of the Evidence Act Ex.P146 Cc of EC in respect of the suit property Ex.P147 Notice dated 25.10.2017 issued by RERA Ex.P147(a) Postal cover List of witnesses examined for the defendants:
Dw1 Anil Kumar Cherukuri List of documents marked for the defendants:
Ex.D1 Copy of legal notice dated 10.07.2017 Ex.D2 Letter dated 08.08.2013 Ex.D3 Office copy of notice dated 25.10.2012 Ex.D3(a) to (f) Postal receipts Ex.D3(g) & (h) Postal acknowledgments Ex.D4 Office copy of notice dated 30.03.2013 Ex.D4 (a) Postal receipt Ex.D4 (b) Postal acknowledgment 54 Com.O.S.No.5195/2017 Ex.D5 Notice dated 28.10.2015 issued by AEE of BBMP Order dated 24.07.2010 passed by the Ex.D6 Tahasildar of Bengaluru East Taluk, K.R.Puram Ex.D7 Reply dated 19.12.2015 Ex.D8 Office copy of notice dated 09.06.2017 Ex.D8(a) to (f) Postal receipts Ex.D8(g) to (l) Postal acknowledgments Ex.D9 Office copy of notice dated 13.08.2016 Ex.D9(a) to (f) Postal receipts Ex.D9(g) to (l) Postal acknowledgments Ex.D10 Copy of compliant dated 04.07.2017 before Bellanduru Police Ex.D11 Copy of compliant dated 13.07.2017 Police notice dated 14.07.2017 issued by Ex.D12 the SP office, Civil Rights Enforcement, Bengaluru Ex.D13 Summons received from the Karnataka State SC ST Commission, Bengaluru Ex.D14 True copy of the FIR in Crime No.201/2017 Ex.D15 Original MOU dated 03.08.2017 Ex.D16 to D22 Photographs with CD Ex.D23 Sec.65B certificate of the Evidence Act Show cause notice dated 04.04.2022 Ex.D24 issued by Central Tax Department through email Ex.D25 Digitally signed copy of Chartered Accountant's certificate dated 05.10.2023 Ex.D26 Certificate U/Sec.65B of the Evidence Act 55 Com.O.S.No.5195/2017 Photo copy of the Bylaws of Surya Shakti Ex.D27 80 Trees Apartments Owners Welfare Association Ex.D28 Email dated 22.06.2016 Ex.D29 Email dated 10.08.2016 Ex.D30 Email dated 15.09.2016 Ex.D31 Email dated 19.09.2016 Ex.D32 Email dated 27.10.2016 Ex.D33 Email dated 21.02.2017 Ex.D34 Email dated 15.05.2017 Ex.D35 Email dated 26.05.2017 Ex.D36 Email dated 30.06.2017 Ex.D37 Sec.65B certificate of the Evidence Act Copies of reply dated 05.03.2017, Ex.D38 to D40 06.03.2017 and 29.06.2017 issued by the 3rd plaintiff Ex.D41 Photograph (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.