Delhi High Court
Mirahul Enterprises & Ors. vs Mrs. Vijaya Srivastava on 14 July, 2008
Author: P.K.Bhasin
Bench: Mukul Mudgal, P.K.Bhasin
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA (OS) NO. 29/1996
% Date of Decision: 14th July, 2008
# M/s. Mirahul Enterprises & Ors. ..... Appellants
! Through : Mr. K.K. Mohan and Mr.
Ashish Mohan, Advocates for
Appellant nos. 1-5, Ms. Rekha Palli
and Mr. S. Nandakumar, Advocates
for appellant no.6.
Versus
$ Mrs. Vijaya Srivastava ....Respondent
! Through : Mr. T.K.Ganju, Sr.
Advocate with Mr. Rajiv Talwar,
Advocate
WITH
+ RFA(OS) NO. 30/96
# M/s. Mirahul Enterprises & Ors. ..... Appellants
! Through: Mr. K.K. Mohan and Mr.
Ashish Mohan, Advocates for
appellants
Versus
$ Mr. R.R.Sood ....Respondent
! Through : Mr. T.K.Ganju, Sr.
Advocate with Mr. Rajiv Talwar and
Mr. Parmanand, Advocates
WITH
+ RFA (OS) NO. 41/96
# Rear Admiral R.R.Sood(Retd.) ....Appellant
! Through : Mr. T.K.Ganju, Sr.
Advocate with Mr. Rajiv Talwar and
Mr. Parmanand, Advocates
Versus
$ M/s. Mirahul Enterprises & Ors. ... Respondents
! Through : Mr. K.K. Mohan and Mr.
Ashish Mohan, Advocates
AND
+ RFA (OS) NO. 42/96
# Mrs. Vijaya Srivastava ...Appellant
! Through: Mr. T.K. Ganju, Sr.
Advocate with Mr. Rajiv Talwar and
Mr. Parmanand, Advocates
Versus
$ Mirahul Enterprises & Ors. ...Respondents
^ Through: Mr. K.K. Mohan and Mr.
Ashish Mohan, Advocates for
Respondent nos. 1-5, Ms. Rekha Palli
and Mr. S. Nandakumar, Advocates
for respondent no.6.
RFA (OS) Nos. 29, 30, 41 and 42 of 1996 2
CORAM:
* HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE P.K.BHASIN
FINDINGS
P.K.BHASIN, J:
These four appeals, which were filed against a common
judgment dated 5th July, 1996 of learned Single Judge in two suits for specific performance of two contracts for sale of two residential flats were disposed of vide common judgment dated 10th May, 2002 by a Division Bench of this Court. Against that judgment two appeals were filed before the Hon‟ble Supreme Court(being Civil Appeal No. 1209-1210 of 2003 and Civil Appeal No. 1211-1212 of 2003). The Hon‟ble Supreme Court passed an following order on RFA (OS) Nos. 29, 30, 41 and 42 of 1996 3 19th July, 2006 in the said two appeals, the relevant portions of which order are as under :-
" By the impugned judgment dated 10th May,2002, the division bench allowed the appeals filed be developers by holding that the suit agreements dated 2.11.1983 were provisional agreements; that they were inconclusive and accordingly the plaintiffs-appellants herein were not entitled to claim specific performance of the agreement for immovable property. Surprisingly, none of the other issues were answered by the division bench.
In our view, the division bench ought to have answered all the issues which were framed by the trial court. All the issues are inter-connected......................................
................................Therefore, we are of the view that the division bench ought to have given its findings not only on the conclusiveness of the suit agreement but also on the remaining issues including the finding on the issue of collusion between the developer and defendant no.6, as alleged by the plaintiffs.
.................... we are directing the division bench of Delhi High Court to return to us the findings on all the above quoted issues in RFA(OS) Nos.29,30,41 and 42 of 1996."
2. These appeals are thus being taken up again pursuant to the above order of the Hon‟ble Supreme Court. On receipt of the said order fresh hearing was afforded to all the parties. Here itself it may also be mentioned that during the hearing of these matters, after RFA (OS) Nos. 29, 30, 41 and 42 of 1996 4 remand, efforts were made to bring about some amicable settlement also between the parties but those efforts did not fructify as is evident from the order of this Court dated 19.3.2008. So, we shall now proceed further to return our findings as per the directions of the Hon‟ble Supreme Court. Since we are now to give our issue-wise findings the factual background leading to this litigation between the parties and the evidence adduced during the trial will have to be noticed and examined all over again.
3. Two suits for specific performance of contracts were instituted by two persons, namely, Mrs. Vijaya Srivastava and Rear Admiral Rishi Raj Sood(retd.) against M/s Mirahul Enterprises, a partnership firm engaged in the business of construction activity, and its partners, who were defendants no.2-5 in the two suits. From the pleadings and the evidence adduced by the parties, oral as well as documentary, we have been able to cull out the following undisputed facts:-
RFA (OS) Nos. 29, 30, 41 and 42 of 1996 5
(a) That sometime in 1982 Mrs. Vijaya Srivastava, the respondent in RFA (OS) no. 29/96 who was the plaintiff in Suit No.451/86, had booked some flats in a residential Complex by the name of Mirahul Apartments being constructed by M/s Mirahul Enterprises, defendant no.1, and she had paid Rs.3,15,000/- as advance/booking amount to the said builder Firm upto 09/10/83 vide different receipts. Later on she appears to have decided to purchase only one flat and so surrendered bookings of other flats. In October,1982 Rear Admiral Rishi Raj Sood, a family friend of Srivastavas and the plaintiff in Suit No.450/86, was introduced to the defendant no.2, S.B. Kishore, Managing Partner of defendant no.1 M/s Mirahul Enterprises(who died during the pendency of these appeals and is now represented by his legal heirs who were already impleaded in the suits as defendants 3-
5 being the other partners of this builder Firm) as he also wanted to have one flat and after negotiations he was RFA (OS) Nos. 29, 30, 41 and 42 of 1996 6 allotted flat no.S-1 in Mirahul Apartments. He paid Rs.40,000/- as advance amount to the defendant no.1/builder on 24/10/83 and as per the understanding between the said two plaintiffs and defendant no.2 a sum of Rs.1,40,000/- out of total advance amount of Rs.3,15,000/- lying to the credit of Mrs. Vijaya Srivastava with Mirahul Enterprises was transferred to the account of R.R. Sood towards the advance for flat no.S-1 allotted to him. However, by that time no formal agreement was executed between M/s Mirahul Enterprises and any of the two plaintiffs.
(b) It was also the common case of the parties that on 2/11/83 two separate agreements in respect of flats no.S- 1 & S-2 on the second floor in the names of R.R.Sood and Vijaya Srivastava respectively were prepared by defendant no.2 and the same were signed by the plaintiffs as well as defendant no.2 as the Managing Partner of RFA (OS) Nos. 29, 30, 41 and 42 of 1996 7 Mirahul Enterprises. The amounts lying to the credit of Mrs. Vijaya Srivastava as advance of different flats were after surrender of other bookings considered as advance towards flat no.S-2.
(c) When construction of Mirahul Apartments was going on Vijaya Srivastava also gave loan of Rs.1,45,000/- to Mirahul Enterprises and Rs.70,000/- was given as loan to it by R.R. Sood and these loan amounts were in addition to the money already given by the plaintiffs towards sale consideration of the flats and the loan was repayable on demand. The defendants had admitted receipt of these loan amounts also in their written statements.
4. Now, we come to the disputed facts. The case of the plaintiffs was that on 2/11/83 two agreements were prepared by defendant no.2 for their signatures and they signed their respective agreements but it was noticed by them immediately after the signing of those agreements that on the last page(page no.5) of the agreement in RFA (OS) Nos. 29, 30, 41 and 42 of 1996 8 respect of Vijaya Srivastava and on the last two pages(pages 4 & 5) of the agreement in respect of R.R.Sood the price of the flats shown was more than the agreed price and those pages also contained certain other objectionable clauses. So, they objected to those unauthorised clauses in the agreements and then some corrections/changes were carried out by Brig. K.K. Srivastava in his handwriting as dictated by the deceased defendant no.2 but he(K.K. Srivastava) did not feel satisfied with those changes also and then defendant no. 2 got returned both the agreements and the pages containing objectionable clauses were prepared afresh and signed by them on the same day. According to those agreements the price of flat no.S-2 was Rs.2,64,261/- and the price of flat no.S-1 was Rs.2,68,000/-. Since the defendants failed to execute the sale deeds in favour of the plaintiffs as per the aforesaid two agreements and they also allegedly refused to return the loan money two suits for specific performance of the contracts, refund of loan money and damages etc. were filed.
RFA (OS) Nos. 29, 30, 41 and 42 of 1996 9
5. The stand of defendants 1-5 regarding the agreements relied upon by the plaintiffs was that though those agreements were executed but the same were never intended to be acted upon by the parties and in fact were got prepared by the plaintiffs on the pretext that they would require the same to get loan from HDFC. It was also their plea that final agreements were to be executed at the stage of handing over of the possession of the flats and the final price of the flats was also to be determined at that stage only as per the market rate prevailing at that time. It was pleaded that, in fact, certain additions were made in the agreements by K.K.Srivastava and the original agreements were handed over to the plaintiffs then and there and the signed copies were retained by defendants and that they had not carried out any additions in those copies thereafter. It was also pleaded that the plaintiffs were now using those ostensible agreements to blackmail the defendants. The defendants also took an alternative plea that in case it were to be held that price of the flats was not to be determined at the stage of handing over of possession, as was their case, even then the suits for specific performance were liable to be RFA (OS) Nos. 29, 30, 41 and 42 of 1996 10 dismissed since the price of the flat of Mrs. Vijaya Srivastava even as per the so-called agreement to sell dated 02/11/83 was Rs.4,35,975/- and Rs.3,89,000/- as per the agreement in respect of the flat of R.R.Sood which price the plaintiffs were never willing to pay. As far as loan amounts were concerned, the plea of the defendants was that though the same were given to the defendants but they were interest free loans and that they had never refused to refund that money.
6. The defendants had also placed on record carbon copies of two agreements to sell dated 02/11/83 one of which was in respect of Mrs. Srivastava and the other one was in respect of Mr. R.R.Sood. The agreement in respect of Vijaya Srivastava was exhibited as Ex.DPW-1 during the cross-examination of Vijaya Srivastava. The agreement in respect of R.R. Sood though was admitted by the counsel for the plaintiffs before the learned Single Judge on 04/03/87 but was not formally exhibited in evidence. In Ex.DPW-1 the sale price of the flat no.S-2 was mentioned as 4,35,973/- while in the unexhibited agreement in respect of R.R.Sood the price of his flat was mentioned RFA (OS) Nos. 29, 30, 41 and 42 of 1996 11 as Rs.3,89,000/-. In these documents it was also written that the same were provisional and had been drawn up for the purchasers to get loan from HDFC.
7. It may be noticed here that initially Mrs. Vijaya Srivastava in her suit had impleaded M/s Mirahul Enterprises as defendant no.1 and its partners as defendants 2-5. During the pendency of the suits separate applications were filed by both the plaintiffs for directing the defendants to hand over the possession of the two flats since they had made almost the entire payment towards the sale consideration under the two agreements. Those applications were allowed by the learned Single Judge and to effectuate handing over of possession of the flats to the plaintiffs a local commissioner was appointed and during his visit to the spot the defendants had claimed that a portion of flat no.S-2 had been sold to one Mohd. Arshad and so Vijaya Srivastava got possession of the flat excluding the portion allegedly sold to the said Mohd. Arshad and at that time she had not pressed for delivery of entire flat to her as she had decided to challenge the so-called RFA (OS) Nos. 29, 30, 41 and 42 of 1996 12 transaction between the defendants and Mohd. Arshad. Possession of flat no.S-1 was, however, got delivered to R.R.Sood. Thereafter, the said S.S. Mohd. Arshad, who is now appellant no. 6 in RFA NO. 29/96, was also impleaded as a defendant in suit no. 451/86 by the plaintiff Mrs. Vijaya Srivastava in her suit. It was claimed by Mrs. Srivastava that the other defendants had fraudulently put S.S.Mohd. Arshad in possession of a room on the basis of some sham sale transaction and he was not a bona fide purchaser and by way of amendment in the original plaint a prayer was made for passing a decree of declaration to that effect also. This newly added defendant S.S. Mohd. Arshad though was represented on a couple of dates of hearing during the trial by his counsel did not but file any written statement. Even the other defendants did not file any written statement to the amended plaint in which it had been pleaded that they had fraudulently put Mohd. Arshad in possession of a portion in the flat in suit with the object of defeating her rights under the agreement to sell(Ex.PW-1/2).
RFA (OS) Nos. 29, 30, 41 and 42 of 1996 13
8. The learned Single Judge after analyzing the oral and documentary evidence adduced during the trial which included the agreement Ex.PW-1/2 relied upon by the plaintiffs, Ex.DPW-1 relied upon by the defendants, various payment receipts filed and proved by Vijaya Srivastava, agreement Ex.PW-2/21 between the plaintiff R.R.Sood and Mirahul Enterprises, payment receipts made by this plaintiff and the income tax record of Mirahul Enterprises summoned during the trial, had come to the conclusion that there were concluded contracts between the parties and both the plaintiffs had paid the entire sale consideration to the vendor and nothing more was payable by them towards the sale consideration. The learned Single Judge also held that the agreement Ex.DPW-1 relied upon by the defendants, which was being challenged by the plaintiff Vijaya Srivastava, was also binding on the parties. The plea of both the plaintiffs that they had paid some money as loan to the defendants was, however, rejected and the learned Single Judge held that the amounts of money which the plaintiffs had paid to the defendants as loan were, in fact, a part of the sale consideration of the two flats and RFA (OS) Nos. 29, 30, 41 and 42 of 1996 14 the defendants were not obliged to return the same to the plaintiffs and the same stood adjusted towards the sale consideration of the flats. Regarding defendant S.S.Mohd. Arshad it was observed that he had not contested the suit of Vijaya Srivastava and from the documents filed in the case it was clear that he was only an „alias or altar ego‟ of the second defendant(S.B. Kishore).Consequently, decrees for specific performance of the agreements were passed in favour of the plaintiffs in respect of their respective flats in Mirahul Apartments but the claim of both the plaintiffs for refund of loan money was rejected.
9. Against the judgement of the learned Single Judge, the defendants in the two suits filed two separate appeals challenging the passing of decrees for specific performance of the two agreements to sell. The judgement of the learned Single Judge was challenged, inter- alia, on the grounds that it could not have been held that the agreements relied upon by both the sides constituted concluded contracts and were binding on them. It was also claimed that neither the agreements relied upon by the plaintiffs nor the ones placed on RFA (OS) Nos. 29, 30, 41 and 42 of 1996 15 record by the defendants constituted final and binding contracts between the parties and that if at all it was to be held that there were concluded contracts then in that event also only the agreements filed on record by the defendants, execution of which was not disputed by the plaintiffs, could be considered to be the binding agreements and since the plaintiffs had not paid the sale consideration as per those agreements nor had they shown their willingness to pay the price as per those agreements their suits for the relief of specific performance were liable to be rejected. The two plaintiffs also filed separate appeals challenging the rejection of their claim for refund of loan amounts which they claimed to have advanced to M/s Mirahul Enterprises.
10. The defendants-appellants in their appeals challenged the decrees for specific performance primarily on the ground that the plaintiffs had not placed on record the correct agreements dated 02/11/83 and the plaintiffs having concealed from the Court material RFA (OS) Nos. 29, 30, 41 and 42 of 1996 16 documents had played fraud upon the Court and, therefore, were not entitled to the equitable relief of specific performance.
11. The Division Bench vide judgment dated 10th May, 2002 set aside the decrees for specific performance passed in favour of the two plaintiffs and directed the defendants 1-5 to refund to the plaintiffs the entire money paid to them towards price of the flats as well as loan.
12. As noticed already, the Hon‟ble Supreme Court in the appeals filed against the judgment of the Division Bench has directed this Court to return findings on all the issues. At the outset, a controversy was raised from both the sides on 07/11/06 as to which particular issue(s) stood disposed of vide judgment dated 10th May,2002 of the Division Bench. On that date the Division Bench did not decide that point and thereafter Hon‟ble Supreme Court was moved by one of the parties for clarification on the same point and vide order dated 07/12/06 Hon‟ble Supreme Court after making a reference to its earlier order dated 19th July,2006, extracts of which we have already RFA (OS) Nos. 29, 30, 41 and 42 of 1996 17 re-produced, disposed of the application for clarification by observing as under:-
"No clarification is necessary in view of what has been stated in the order dated 19th July,2006. It has been clearly stated as follows:-
"In our view, the division bench ought to have answered all the issues which were framed by the trial court. All the issues are inter-connected.
The High Court shall now hear the matters as directed earlier and record its findings..........."
In the written submissions filed before us this controversy was once again raised from both the sides and at the same time counsel for the parties put forth their submissions on merits also in respect of each of the issues framed in both the suits to be considered in the event of this Court deciding to give findings on all the issues. In our view, since the earlier Division Bench had not given issue-wise decision it is not possible to say as to which particular issue(s) stood disposed of at that time and the Hon‟ble Supreme Court has also categorically directed this Court to give our findings on all the issues framed in the suits. Even otherwise also by way of abundant caution RFA (OS) Nos. 29, 30, 41 and 42 of 1996 18 we deem it appropriate to give our issue-wise findings on all the issues after a de-novo appreciation of the pleadings and the evidence adduced by the parties. So, we now proceed further to undertake that exercise.
13. Issue no.1 in both the suits is regarding the competency of Brig. K.K. Srivastava, husband of plaintiff Vijaya Srivastava, to sign and verify the plaints in both the suits. Brig. Srivastava had signed and verified the plaints as attorney of the two plaintiffs. Ex.PW-1/1 is the power of attorney executed by plaintiff Mrs. Vijaya Srivastava in favour of her husband Brig. K.K.Srivastava and Ex.PW-2/13 is the power of attorney executed by the other plaintiff R.R.Sood in favour of Brig. Srivastava. Relying upon these documents the learned Single Judge decided issue no.1 in both the suits in favour of the plaintiffs. Findings of the learned Single Judge on this issue were not challenged on behalf of the defendants-appellants before us. We are even otherwise also satisfied that on the basis of the power of attorney given to Brig. K.K. Srivastava by the two plaintiffs he was competent to RFA (OS) Nos. 29, 30, 41 and 42 of 1996 19 institute the suits and to sign and verify the pleadings. Thus, findings of the learned Single Judge on issue no. 1 in both the suits are affirmed.
14. Issues no. 2 and 6, which are common in both the suits and were framed on the basis of the pleadings of the parties regarding the two sets of „agreements to sell‟ dated 2nd November,1983 produced from both the sides read as under:
"2. Whether the agreement dated 2.11.1983 executed between the plaintiff and the defendants 1-5 and set up by the plaintiff, is binding in all respects on the parties? OPP
6. Whether the plaintiff/her husband made any additional writings as part of the agreement to sell dated 2.11.1983, as alleged by defendants 1-5? If so, to, what effect? OPDs 1-5."
Both these issues being inter-connected can be conveniently disposed of by a common discussion of facts and the evidence adduced from both the sides on these issues. As noticed already, the plaintiffs had filed the suits for specific performance of the two agreements dated 2/11/83 executed in their favour by the deceased RFA (OS) Nos. 29, 30, 41 and 42 of 1996 20 defendant no.2 on behalf of M/s Mirahul Enterprises, defendant no.1. Defendants 1-5 did not dispute in their written statements the execution of the agreement dated 2.11.83, Ex. PW-1/2, in respect of Mrs. Srivastava and Ex. PW-2/21 in respect of R.R.Sood. Execution of these agreements relied upon by the plaintiffs had been admitted even during the defendants‟ evidence by the deceased defendant no. 2, S.B. Kishore. Even before us, execution of these agreements by the deceased defendant no.2 was not disputed. As per Ex.PW-2/21, flat no. S-1(second floor) msg. 950 sq.ft. (approx.) in Mirahul Apartments was agreed to be sold to plaintiff R.R. Sood for Rs. 2,68,000 and as on 02/11/83 the defendant no.1 had received a sum of Rs.1,80,000/-. Flat no.S-2(Second floor) msg.1156 sq.ft.(approx.), as per Ex.PW-1/2, was agreed to be sold by M/s Mirahul Enterprises to plaintiff Mrs. Srivastava for a total sale consideration of Rs. 2,64,261/- and it was recorded in this agreement that the Vendor had already received Rs.1.70 lacs. There is no dispute about the fact that after the execution of these agreements further payments were also made to defendant no.1 by both the plaintiffs and in all Vijaya Srivastava as RFA (OS) Nos. 29, 30, 41 and 42 of 1996 21 well as R.R.Sood had paid Rs.2,63,000/- each when they filed the suits. The submission on behalf of the plaintiffs-appellants was that the defendants 1-5 having admitted the agreements Ex.PW-1/2 and Ex. PW-2/21 the plaintiffs were entitled to get these agreements specifically performed by paying to the defendants-vendors the sale consideration of the two flats as had been mentioned in these two agreements. It was also the contention of the plaintiffs that there was nothing in these agreements which would show that the same were provisional, as was the defence version.
15. These agreements filed by plaintiffs have been examined by us and we also do not find any clause in any of the two agreements which would show that the price of the flat no.S-1 was Rs.3,89,000/- and of flat no.S-2 it was Rs.4,35,975/- or that these agreements were provisional having been executed at the request of the plaintiffs to enable them to take loan from HDFC, as had been pleaded by defendants no.1-5 in their written statements. No suggestion was put in cross-examination of Brig. Srivastava, attorney of the plaintiffs, RFA (OS) Nos. 29, 30, 41 and 42 of 1996 22 that these agreements filed by them were not correct and they had concealed certain pages. So, how could defendants 1-5 in these circumstances claim the agreements relied upon by the plaintiffs to be provisional and unenforceable? We shall now consider the answer to this question offered by the defendants in their written statements and then during their evidence.
16. We have already made a reference to their stand in their written statements. It was pleaded by them that on 02/11/83 two agreements were prepared as claimed by the plaintiffs but they had denied that the pages of those agreements which the plaintiffs had alleged to be containing unauthorised clauses were replaced by defendant no.2 by new pages, as per the case set up by the plaintiffs. Their stand was that Brig. Srivastava had himself made certain changes in those agreements in his own handwriting, which fact is not in dispute, and then the originals were kept by the plaintiffs and carbon copies were kept by defendant no.2 and thereafter no additions and alterations/interpolations were made in the copies of those agreements RFA (OS) Nos. 29, 30, 41 and 42 of 1996 23 retained by the defendant no.2. From this stand in the written statements it becomes clear that what the defendants wanted to convey was that K.K.Srivastava had made changes in the originals as well as in the carbon copies and the originals having the changes were retained by plaintiffs and their carbon copies also having the hand- written changes were retained by defendant no.2. That stand of the defendants, however, got falsified when they admitted the execution of the original agreements produced and relied upon by the plaintiffs, which do not have any hand-written changes on any page. The plaintiffs‟ case and the unrebutted testimony was that the pages containing the objectionable clauses, i.e. page no.4 of the agreement in respect of Vijaya Srivastava and pages no.4 & 5 of the agreement in respect of R.R.Sood, were in fact replaced, with new re-typed pages which are now a part of Ex.PW-1/2 and Ex.PW-2/21 relied upon by them. This is clearly established also. We are also of the view that the statement of K.K.Srivastava as plaintiff‟s witness that at the time of replacement of those pages with new ones defendant no.2 had assured to destroy the pages in which he(Srivastava) had made RFA (OS) Nos. 29, 30, 41 and 42 of 1996 24 corrections and which statement also remained unchallenged in cross- examination, also appears to be correct.
17. It appears that since the defendants were conscious of the fact that their plea in the written statement that the pages of the two agreements containing certain clauses which were not acceptable to the plaintiffs had not been replaced after K.K. Srivastava had made certain corrections and in fact, the original agreements with the corrections so made by K.K. Srivastava were handed over to the plaintiffs and their carbon copies also with those corrections had been retained by defendant no.2, would not cut ice, a new stand was taken up by defendant no. 2 during his evidence. In his deposition the deceased defendant no.2 made it clear that in fact, the last two pages of the agreement in respect of R.R. Sood and the last page of the agreement in respect of Vijaya Srivastava were replaced with new pages which are now a part of the agreements retained by the plaintiffs and which have now been produced in Court by them seeking their enforcement and are Ex. PW-1/2 and Ex. PW2/21. The defendant no.2 RFA (OS) Nos. 29, 30, 41 and 42 of 1996 25 in his cross- examination had admitted that these documents had been signed by him. In his examination-in-chief, however, he came out with the version that in fact two sets of fifth page of the agreement in respect of Vijaya Srivastava and two sets of fourth and fifth pages of the agreement in respect of R.R. Sood were prepared and in those pages which were given to the plaintiffs, it had not been mentioned that the agreements were provisional and further that the price of the flat no. S-1 was Rs. 3,89,000/- and Rs. 4,35,975/- in respect of flat no. S-2. He also claimed that the other set of pages which had contained such clauses, which now the plaintiffs are claiming to be objectionable and unacceptable to them, were retained by him. The explanation given by him for doing that was that it was done to help the plaintiffs since if they had produced before HDFC the agreements having a clause that the agreements were provisional and liable to be cancelled and to be replaced with fresh agreements at the time of handing over the possession of the flats they would not have got loan from HDFC otherwise and he had therefore, obliged them by giving them those agreements which did not have such clauses. He further claimed RFA (OS) Nos. 29, 30, 41 and 42 of 1996 26 but he himself had retained the other set of pages on which K.K. Srivastava had made hand written corrections and in which it had been mentioned that those agreements were to be provisional agreements having no legal commitment and price of the flat was also as is being claimed by the defendants now i.e. Rs. 3,89,000/- in respect of flat no. S-1 relating to plaintiff R.R.Sood and Rs. 4,35,975/- in respect of flat no. S-2 relating to plaintiff Vijaya Srivastava, to protect his interest in the event of the plaintiffs using those documents against the defendants, which, according to him was what had in fact been done by them with ulterior designs to blackmail the defendants and to force them to sell the flats in dispute to them at a price which was much less than the actual market price by filing these two suits for specific performance, so that he could come forward with his set of agreements, i.e. Ex. DPW-1 and the unexhibited agreement in respect of R.R. Sood in opposition to their such illegal move.
18. We are, however, not inclined to accept the said stand taken by the defendants 1-5 through the evidence of deceased defendant no. 2 in RFA (OS) Nos. 29, 30, 41 and 42 of 1996 27 his evidence. No such case was put forth by them in written statements. Even otherwise, we consider it to be highly improbable that a builder would hand over to a prospective buyer any document which ostensibly binds the builder and creates certain enforceable rights in favour of the prospective buyer when in fact the same was not to be treated as a concluded contract. There are no circumstances brought on record from which it could be accepted that defendant no. 2 in the present case had any good reason to oblige the plaintiffs by giving them certain documents which he never intended to be of binding nature. In these circumstances, the only conclusion which can be arrived at by us is that the deceased defendant no. 2 had retained with him those pages of the agreements which he had got signed from the plaintiffs with ulterior motive and which had certain clauses which were not acceptable to the plaintiffs and so were replaced with fresh pages and later on those pages having the signatures of the plaintiffs and the unauthorised clauses were made a part of the carbon copies of the agreements originally prepared and had been placed on record by the defendants in opposition to the claim of the plaintiffs. RFA (OS) Nos. 29, 30, 41 and 42 of 1996 28
19. From the aforesaid discussion, we have no hesitation in coming to the conclusion that the agreements Ex. PW-1/2 and Ex. PW-2/21 did bring into existence concluded contracts between the plaintiffs and M/s Mirahul Enterprises and the parties to those agreements were bound by the same. The two agreements relied upon by the defendants which have those pages having the hand-written corrections made by Brig. K.K. Srivastava cannot be said to be the agreements between the parties having any binding character. The learned Single Judge had accepted the case of the plaintiffs as far as the two agreements relied upon by the plaintiffs are concerned and had accordingly decided issue no. 2 in both the suits in their favour and we affirm that decision. However, issue no. 6 framed in suit no. 451/86 filed by Vijaya Srivastava was decided in favour of the defendants and it was held that the agreement Ex. DPW-1 in respect of Vijaya Srivastava was also binding on both the parties. On issue no. 6 framed in suit no. 450/86, however, the learned Single Judge held that that issue did not arise in that suit. It appears to us that this was held in view of the fact that in the suit of R.R. Sood the agreement relied upon by the defendants was RFA (OS) Nos. 29, 30, 41 and 42 of 1996 29 not formally exhibited during evidence although in that suit also the pleadings in respect of the additions/alterations made by K.K. Srivastava in the agreement of R.R. Sood were the same as in the other companion suit. We have already noticed that the plaintiff‟s counsel had admitted before the learned Single Judge on 4-3-87 that the agreement dated 02-11-1983 filed by the defendants in respect of plaintiff R.R. Sood, reference to which we have been making as the unexhibited agreement, had the signatures of R.R.Sood on all the five pages as also that certain corrections on page no.4 were in the handwriting of Brig. Srivastava. Therefore, even if that document had not been formally exhibited during evidence of defendant no. 2 it could be taken into consideration and it could not be said that issue no. 6 which had been framed in respect of that agreement did not arise. The decision, in these circumstances, which we have arrived at in respect of issue no. 6 framed in the suit of Vijaya Srivastava would be the decision in respect of issue no. 6 in the suit of R.R. Sood also. Consequently, issue no. 6 in both the suits would stand decided against RFA (OS) Nos. 29, 30, 41 and 42 of 1996 30 defendants 1-5 and decision of the learned Single Judge on issue no.6 stands set aside.
20. Now we take up issue no. 5 framed in both the suits regarding the willingness of the plaintiffs to perform their parts of the contracts of which they were seeking specific performance. Both the plaintiffs had in their respective plaints categorically pleaded that they were always willing to perform their part of the contracts dated 2.11.83 of which they were seeking specific performance. It was not disputed before us on behalf of the defendants 1-5 that in case it is held that the agreements relied upon by the plaintiffs were concluded contracts and the price of the flats mentioned therein only was payable to the vendor, then in that event there would be no question of it being held that the plaintiffs were not willing to perform their part of the contracts since the plaintiffs had already paid to defendant no.1 a sum of Rs. 2,63,000/- each towards the sale price of the flats and those payments were more than ninety five percent of the total sale consideration as per those agreements Ex.PW-1/2 and Ex.PW-2/21. RFA (OS) Nos. 29, 30, 41 and 42 of 1996 31 We are also of the view that the two agreements relied upon by the plaintiffs having been found to be binding between the plaintiffs and defendants 1-5 and both the plaintiffs having admittedly made payments of Rs. 2,63,000/- each towards the sale consideration of their respective flats, it has to be held that they were always ready and willing to perform their part of the contracts. Issue no. 5 in both the suits is also accordingly decided in favour of the plaintiffs.
21. Issues no. 3 & 4 in both the suits can also be taken up and disposed of together. These issues read as under:-
In Suit No. 450/86
"3. If issue, No. 2 is held in favour of the plaintiff, whether defendants 1-5 are not liable to execute the sale deed and transfer possession of the flat measuring 955 sq. ft. to the plaintiff? OPDs 1-5.
4. Whether the plaintiff is liable to pay to defendants 1- 5 any sum over and above the admitted sum of Rs. 2,68,000/- in execution of agreement to sell? OPDs 1-5.In Suit No. 451/86 RFA (OS) Nos. 29, 30, 41 and 42 of 1996 32
3. If issue, No. 2 is held in favour of the plaintiff, whether defendants 1-5 are not liable to execute the sale deed and transfer possession of the flat measuring 1156 sq. ft. to the plaintiff? OPDs 1-5.
4. Whether the plaintiff is liable to pay to defendants 1- 5 any sum over and above the admitted sum of Rs. 2,64,261 /- in execution of agreement to sell? OPDs 1-
5."
It having been held by us that the two agreements, Ex. PW-1/2 and Ex. PW-2/21 relied upon by the plaintiffs were binding between the plaintiffs and defendants no. 1-5 and that the plaintiffs were always willing to perform their part of the contracts the defendants have to execute the sale deeds in respect of the flats in dispute and that too on payment of the sale consideration as mentioned in these agreements out of which, as noticed already, both the plaintiffs have already paid Rs. 2,63,000/- each which constituted more that 95 % of the total sale consideration for the flats agreed to be sold to the plaintiffs by defendants 1-5. The defendants were claiming by way of an alternative defence that the plaintiffs were liable to pay the sale price as was mentioned in the two agreements relied upon by them (defendants), in the event of the Court coming to the conclusion that there were RFA (OS) Nos. 29, 30, 41 and 42 of 1996 33 concluded contracts between the parties. Now that it has been held by us that the agreements relied upon by the defendants are not the contracts between the parties and that the agreements relied upon by the plaintiffs constituted binding contracts, the plaintiffs are not liable to pay any amount towards sale consideration of the flats over and above the one mentioned in agreements Ex. PW-1/2 and Ex. PW-2/21. It may also be noticed that when correspondence started between the parties and the plaintiffs started claiming that they had made almost the whole of the agreed sale consideration and that there was nothing provisional about the agreements executed by them and the deceased defendant no.2, the defendants never came forward with the claim that the plaintiffs were to pay the price which is being now claimed by them(the defendants) to be payable by the plaintiffs. They had only been harping that the plaintiffs should execute final agreements which demand of theirs we have found to be not justified at all. Issues no. 3 and 4 are also accordingly decided in favour of the plaintiffs. RFA (OS) Nos. 29, 30, 41 and 42 of 1996 34
22. Issues no.7 and 8 in both the suits were framed regarding the loan transactions between the two plaintiffs and defendants 1-5 and since point for adjudication is common these two issues are also being taken up together for decision. Those issues are as under:- In suit no.450/86
"7. Whether any sum by way of loan was advanced to defendants 1-5 by the plaintiff? If so, what amount and during what period and on what terms and whether plaintiff can seek relief in respect to said loan in the present suit? OPP
8. In case defendants are held entitled to recover from the plaintiff in the event of specific performance being granted, any amount over and above the admitted amount of Rs. 2,68,000/--, then, whether the plaintiff is entitled to claim adjustment for the excess claim against the alleged loan amount?"In suit no.451/86
"7. Whether any sum by way of loan was advanced to defendants 1-5 by the plaintiff? If so, what amount and during what period and on what terms and whether plaintiff can seek relief in respect to said loan in the present suit? OPP
8. In case defendants are held entitled to recover from the plaintiff in the event of specific performance being granted, any amount over and above the admitted amount of Rs. 2,64,261/-, then, whether the plaintiff is RFA (OS) Nos. 29, 30, 41 and 42 of 1996 35 entitled to claim adjustment for the excess claim against the alleged loan amount?"
As has been noticed already, the plaintiffs had claimed that a sum of Rs. 1,45,000/- had been advanced as loan to defendant no.1 by plaintiff Vijaya Srivastava and Rs.70,000/- was given as loan by R.R.Sood. The defendants 1-5 had admitted in written statements that these loans were given by the plaintiffs. Not only that, they had also claimed that they were always willing to return the loan money. In view of this admission of the defendants 1-5 there was no option for the learned Single Judge but to order the refund of loan amounts. But the learned Single Judge contrary to the pleadings of the parties made out a new case, which was not acceptable to both the parties, that the loan money paid to the defendants was in fact not „loan‟ but those payments were in fact a part of the sale consideration. We, however, do not find any basis for coming to this conclusion. The findings of the learned Single Judge that since defendants had in their income-tax returns not claimed that they had received any money as RFA (OS) Nos. 29, 30, 41 and 42 of 1996 36 loan it was clear that so-called loan money was also a cash payment towards sale consideration is a conjectural finding. Of course, during the evidence of defendant no.2 he had made an attempt to show that loan money was not in fact paid as loan and that stand, though not established at all, has been accepted by the learned Single Judge. In our view, in the wake of clear admission of loan transactions in the written statements the findings of the learned Single Judge on these two issues cannot be sustained and are accordingly set aside. Since the defendants 1-5 had always been willing to pay back loan money the plaintiffs were entitled to a decree to that effect. However, as far as the claim of the plaintiffs regarding interest @ 15% on the loan amounts for a period prior to the filing of the suits is concerned the same cannot be accepted since there is no proof of any such agreement between the parties. But since the defendants 1-5 actually did not pay back the loan money they will have to pay simple interest @ 12 % p.a. on the admitted loan money from the date of filing of the suits till the payment is actually made.
RFA (OS) Nos. 29, 30, 41 and 42 of 1996 37
23. Now we come to issue no. 9 framed in the suit of Vijaya Srivastava only and which, in fact, was main issue in respect of which serious arguments were advanced from the side of plaintiff Vijaya Srivastava and defendant no.6 S.S.Mohd. Arshad who is also one of the six appellants in RFA No. 29/96, others being defendants 1-5 in the suit no.451/86. This issue reads as under :-
"9. Whether the sale or parting with possession by defendants 1-5 of one bed room of the flat in question in favour of defendant No. 6 is fraudulent, illegal and not binding on the plaintiff for the reasons stated in paras 24(a) to 23(i) of the plaint? OPP"
As noticed already, during the pendency of the suits a direction was given to defendants 1-5 to hand over possession of both the flats to the plaintiffs and when the local commissioner appointed for the purpose of getting the possession delivered to the plaintiffs visited the property possession of flat no. S-1 was got delivered to R.R. Sood. At that time it was claimed by the defendants that some portion of flat no. S-2 had been sold to one S. S. Mohd. Arshad. As a result only a part RFA (OS) Nos. 29, 30, 41 and 42 of 1996 38 of the flat no. S-2 was got delivered to Vijaya Srivastava. Thereafter the plaintiff had amended the plaint and impleaded S.S. Mohd. Arshad as defendant no. 6 in her suit and she also claimed that transfer of possession of a part of flat no. S-2 by defendants 1-5 to the said S.S. Mohd. Arshad was fraudulent and appeared to have been done on the basis of some sham transaction between defendants 1-5 and the said Mohd. Arshad. As has also been noticed already, the said S.S. Mohd. Arshad despite entering appearance on being impleaded as a defendant did not file any written statement. Other defendants also chose not to file any written statement to the amended plaint filed by plaintiff Vijaya Srivastava. Since the allegations made by the plaintiff to the effect that defendants 1-5 had fraudulently put in possession S.S. Mohd. Arshad in some portion of flat no. S-2 on the second floor in order to defeat her claim of specific performance were not refuted by the defendants it stood admitted by them that in fact there was no genuine transaction of sale between defendants 1-5 and defendant no.
6. In any case, it being a well settled legal position that whenever in a suit for specific performance of contract in respect of an immovable RFA (OS) Nos. 29, 30, 41 and 42 of 1996 39 property filed by a vendee against a vendor some third party resists that suit claiming himself to be a bona fide purchaser of the property in question without notice of any transaction between the vendee- plaintiff and vendor-defendant, then it is for that person to establish that plea in order to defeat the right of the vendee to seek specific performance of an agreement to sell, which was prior in time to the execution of the agreement with the so called bona fide purchaser. In the present case, the person claiming himself to be a bona fide purchaser and which plea also has been taken by him only in appeal, did not even claim during the trial that he was in possession of a part of flat no. S-2 in his independent right as a bona fide purchaser. The deceased defendant no. 2 had placed reliance upon an agreement to sell with the said Mohd. Arshad executed in 1984 and subsequent sale deed dated 9.6.87 in favour of the said Mohd. Arshad. However, both these documents were in respect of a flat on the first floor of Mirahul Apartments and not in respect of flat no. S-2 on the Second floor which was the flat agreed to be sold to the plaintiff Vijaya. The learned Single judge had rightly come to the conclusion that the said RFA (OS) Nos. 29, 30, 41 and 42 of 1996 40 Mohd. Arshad had simply been shown to be in possession of flat no. S-2 by the defendants in order to put obstacle in the way of Vijaya Srivastava in getting the relief of specific performance. We affirm the findings of the learned Single Judge on issue no.9 in suit no. 451/86.
24. With this we have given our findings on all the issues framed in both the suits and these findings be now forwarded to the Hon‟ble Supreme Court.
P.K.BHASIN,J MUKUL MUDGAL,J July 14, 2008 sh RFA (OS) Nos. 29, 30, 41 and 42 of 1996 41