Bangalore District Court
August Ventures Private vs Union Of India on 21 September, 2019
Form
No.9
(Civil)
Title
Sheet
for
Judgmen
t in Suits PRESENT: SMT. PRASHANTHI G,
B.A.(Law) LL.B.,
XXVII Additional City Civil Judge.
Dated this the 21 st day of September 2019
PLAINTIFF: AUGUST VENTURES PRIVATE
LIMITED, A company incorporated
under the Provisions of The
Companies Act, 1956, Having its
Registered Office at No.17/1,
Campbell Road, Bangalore-560 047.
Represented by its Managing
Director Mr. Biju P John.
[By Sri CS, Advocate]
/v e r s u s/
DEFENDANTS: 1. Union of India,
The Secretary,
Department of Revenue,
Ministry of Finance,
No.128-B, North Block,
Lok Nayak Bhavan,
New Delhi-110 001.
2. The Chief Commissioner of
Income Tax Central Revenue
Building, Queens Road,
Bangalore-560 001.
D1- Exparte
D2 - By Sri KNA, Advocate
Date of institution of the : 19/3/2009
suit
Nature of the suit : For recovery of money
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Date of commencement of : 3/1/2012
recording of the evidence
Date on which the : 21/9/2019
Judgment was
pronounced.
: Year/s Month/s Day/s
Total duration
10 6 2
(Prashanthi. G)
XXVII ACCJ: B'LORE.
The plaintiff filed this suit against the defendant
directing the defendants to pay a sum of
Rs.3,30,00,000/- (Rupees Three Crore thirty Lakhs
only) together with interest at 18% per annum from
the date of filing of the suit till it is paid with cost of
the suit.
2. The brief facts of the case are as follows:
The plaintiff is a private limited company
registered under the provisions of Companies Act,
1956. The Head Office of the plaintiff situated in
Camp Bell Road, Bengaluru. The plaintiff is in the
business of property development. The defendant no.2
issued a notification dated 20/2/2004 for auctioning
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the property mentioned in the notification. The
notification referred to several properties which belong
to Government of India which were proposed to be
auctioned. Lot no.8 in the notification referred to the
land in sy.no.35, 36, 37, 38 and 39 (old sy.no.100) of
Mayamgutha, B. Narayanapura, K.R.Puram Hobli,
Bengaluru. The measurement of the property in acres
viz., 3 acres 16 guntas and in square feet, it is
1,48,104 square feet. The measurement in the
notification was certain precise and definite. The
plaintiff also participated in the public auction for the
aforesaid property and he offered the highest bid of
Rs.5,60,70,000/- was declared as the successful
bidder by the second defendant. The rate offered by
the plaintiff for the property was worked out at the
Rs.378.59 per square feet. On the date of auction, the
plaintiff paid 25% of the bid amount.
Plaintiff purchased the property taking into
consideration that it was put to auction by the
government of India and the measurement of the
property described in the notification is clear and
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unambiguous terms. After purchasing the property,
he got measured the same through Assistant Director
of Land Records, Survey Department and to the
surprise of the plaintiff, there was shortage of extent
by a sizable area. Since the report of that survey was
not accepted by the second defendant and the request
of the plaintiff, the second defendant got the property
surveyed through Assistant Director of Land Records
which also confirms that there is a shortage. Thus,
the survey got done by the second defendant itself
confirm that there is shortage. The fact of acquisition
of the property by the Railway lines many many years
ago is the factor responsible for the shortage of the
land. In this regard, plaintiff requested the defendant
to reduce the balance payable on pro-rata basis for
the short delivery as the plaintiff had paid only 25% of
the total cost at the time of auction of the same. The
balance of consideration was due and payable by the
plaintiff. The second defendant did not agree to the
same and subsequently the plaintiff paid entire
consideration since he had no other option. The entire
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consideration of Rs.5,60,70,000/- was paid through
the demand drafts drawn on different dates. Since the
second defendant would not agree to reduce the
proportionate cost on the shortage of the land the last
payment was made under protest. Even after the
entire payment of consideration, the sale deed was not
executed by the defendants. Although the plaintiff
corresponded the defendant to execute the sale deed
several times by mentioning the actual area delivered,
the draft sale deed was not given by the defendants.
Further, he did not agree to mention the actual area
delivered in the sale deed and insisted on mentioning
of the area which is mentioned in the auction
notification. They were also aware that the land which
is short was in possession of the railways and a
railway line is passing through it. Further, the
defendants also forced the plaintiff to delete and add
certain clauses which were detrimental to the interest
of the plaintiffs. Further, since the plaintiff has
already paid the entire amount and there was a large
delay in execution of the sale deed, by spending large
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amounts towards the stamp duty and registration
agreed to execute the sale deed in its favour. In the
letter dated 29/6/2005, the plaintiff had made clear
that the changes are required by the defendant is to
be incorporated in the sale deed without the prejudice.
Finally, sale deed was executed on 12/8/2005. Due to
this reason, the plaintiff was compelled to spend more
money towards the stamp duty and the property in
question has been sold by the defendant on "as is
where is" basis and further the bidders were required
to satisfy themselves about the correctness of the
description, measurement, boundaries before bidding
in auction and further subsequent to the auction, the
bidder shall be deemed have waived of the objections
to the title, description etc., of the property. All the
three reasons assigned by the defendants are
manifestly incorrect and improper, not valid and
according to the law, as the property in question was
described both in acres and in square feet giving clear
indication to the bidders that the extent was correct,
accurate and certain. The plaintiff further submits
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that the auction notification did not state the extent of
land authorised in approximate and as such there
was no reason for the plaintiff to suspect the
correctness of the extent of the land which was
mentioned in both in acres and square feets.
Therefore, the principle of selling the property by the
defendants and purchasing of the same by the
plaintiff on the condition 'as is where is' is totally
inapplicable.
After the execution of the sale deed, on
3/11/2015, plaintiff addressed a letter to the second
defendant mentioning about the shortage of extent of
land and called upon the defendants to pay the
amount mentioned therein. The defendant replied that
the said letter dated 3/11/2005 through the reply
dated 23/3/2006, declining to refund the amount on
illegal and untenable grounds. The reply though
would not dispute shortage of the extent of land would
declined to pay the amount on ground which are
pulpably incorrect and legally not valid. The
contentions and the reasons assigned by the
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defendants to refuse to pay the amount for the extent
of shortage is after land and not to the extent of the
land. The defendants contention in the circumstances
is wholly misconceived and untenable. The plaintiffs
submits that it had paid the full consideration and the
execution of the sale deed was unduly delayed. The
defendants placed the plaintiff in possession on
6/12/2004. However the execution of the sale deed
was unduly delayed. This necessiated the plaintiff to
request the defendant to execute the sale deed and
plaintiff wanted the sale deed to mention the extent of
land delivered. However, the defendants would not
agree and wanted the original extent of 3 acres and 16
guntas and 1,48,104 square feet only to be mentioned
and the sale deed mentions the same extent though
what has been delivered to the plaintiff is
substantially less. The plaintiff submits that as
mentioned herein though the extent of land is lesser
than what is mentioned and as the defendant would
not agree to mention the correct extent of the land,
the plaintiff had no other option then to agree to
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extent mentioned in sale deed as stated by them in
the auction notification. In the above circumstances,
plaintiff was also compelled to spend money on the
registration fee and stamp duty for an extent of land
which was not available and which was short
delivered. The plaintiff had purchased the property for
the development and under the provisions of the
Municipal Corporation Act, before commencement of
the construction the owner is required to obtain a
sanctioned plan. Once an application for the sanction
plan is submitted, the officers of BBMP would verify
that property and based on the actual extent of land.
FAR would be worked out permission for the
construction would be sanctioned.
The plaintiff submits that on the application of
the plaintiff corporation verified the property and has
sanctioned plan for construction of the residential
apartment complex with the 2.25 FAR and the
sanctioned plan clearly shows that the site measures
12,638 square meters only which clearly establishes
the shortage of extent of land by 12069 square feet.
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Since the defendant would not agree to the demand of
the plaintiff to refund the excess amount the plaintiff
was compelled to issue a legal notice under Section 80
of the CPC to bring notice of the defendants as to how
the plaintiff is entitled to refund the proportionate
value of the shortage of 12,069 square feet and as to
how on account of short delivery, the plaintiff has lost
the profit which he would have normally earned on
account of loss of FAR which worked out to
2,71,55,000/- and also other general damages to the
tune of Rs.50,00,000/-. The notice was issued to both
the defendants. In the legal notice sent to the second
defendant, the date of auction notification was
wrongly mentioned as 22/2/2002 and afterwards the
plaintiff through his advocate issued an addendum to
the legal notice which has been served to the second
defendant. Despite the service of the notice, both the
defendants have not paid the amount nor have
replied. Under the above circumstances, the plaintiff
was constrained to file the suit for the recovery of the
amount.
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The plaintiff has purchased the property from
the defendant who in law are bound to convene what
has been offered for sale in the public auction. The
defendants in law cannot convey an extent which is
lesser than what is stated in the auction and denied
the claim of the plaintiff stating that the property is
sold on 'as is where is' condition with regard to the
nature of the land and not in regard to the extent. The
plaintiff had worked out the cost of the land based on
the square feet and any short fall will have to be
proportionately compensated and excess amount
collected will have to be returned. The approach of the
defendants is unreasonable, contrary to the law and
just and opposed to all canons of law. The plaintiff
has paid such a large consideration based on the
description in the auction notification and defendants
in law cannot be permitted to state that they would
deliver lesser extent of land and collect the entire
consideration. Therefore, they are bound to refund the
excess amount collected and the damages suffered by
the plaintiff on account of short delivery. The plaintiff
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is a property developer and on account of the shortage
it has lost on the FAR and consequent profitability.
The FAR applicable is 2.25 and on account of the
short delivery of the extent then what is stated. The
plaintiff has lost the profitability which works out at
the rate of 1,000 per square feet on 27,155 square
feet, which comes to Rs.2,71,55,000/-. The plaintiff
has also suffered the general damages to the tune of
Rs.50,00,000/- as he was required to spend on
registration fees, stamp duty for an extent of land
which has been delivered to the plaintiff and other
losses due to the large delay and interest. In the plaint
he has clearly narrated the details of the amount
claimed and the amount which he was entitled from
the defendant. The cause of action for the suit arose
on 23/3/2006 when the defendants declined to return
the amount and pay the excess amount collected on
the short delivery of the land which is within the
jurisdiction of this court. The plaintiff also submits
that since the suit is for the recovery of money and
damages, the same was within the period of limitation
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and Section 80 of the notice was also issued to the
defendants before filing of this case.
3. The summons is duly served to the
defendants. Defendant no.1 did not appear and
contest the case of the plaintiff. Hence, he is placed
exparte. Defendant no.2 appeared and filed written
statement.
4. The main contentions of the defendant no.2
in the written statement are as under:
The suit of the plaintiff is not maintainable since
the plaintiffs are not approached the court with clean
hands. They have suppressed material facts and have
sustained imaginary loss. The prayer made in the suit
is totally baseless. The claim made in the plaint is not
correct and for that reason only the suit is to be
dismissed. Originally, survey no.35, 36, 37, 38 and 39
measuring 3 acres 16 guntas was owned by one
R.R.Suchdev. Afterwards he sold that property to one
Mr. P.Syed Khasim. After that, he gifted the properties
in favour of his daughter Mrs. Syed Fatima Begum
who got it converted for non-agriculture purpose
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under a memorandum dated 19/3/1992. On
22/10/1992, the Urban Land Ceiling Department
granted 'No Objection' to hold said property. Mrs.
Syed Fatima Begum entered into an agreement of sale
along with M/s Hara Housing and Land Developers
Company on 30/10/1992. Form No.37/1 in
accordance with the section 269 UC of the Income Tax
Act was submitted to the appropriate authorities
Income Tax Department. The department found that
the property was undervalued and proceeded to pass
an order under Section 269 U.D. of the Act pre-
emptively purchasing the property in favour of the
Union of India.
Originally the Department proceeded to put up
this property for the public auction on 20/7/1996.
The auction purchaser was fully aware of the
measurement, description of the property had
participated in the auction and had made an initial
deposit. Later on, he proceeded to raise various
objections about the title of the property and failed to
make the balance payment. The department
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proceeded to cancel the auction sale and forfeited the
deposited amount. The property was put up for the
public auction once again on 8/3/2004. The plaintiff
was the successful bidder. He was informed well in
advance that the property is being sold on "as is
where is" basis. The description and measurement
of the property is as per the original acquisition
proceedings. In the auction notice, the terms and
conditions of the auction sale has been clearly stated.
The plaintiff agreed to the terms and conditions after
having affixed the signature by way of consent
proceeded to participate in the bid. Some of the
conditions are as under:
1) The sale of the properties is on "as is
where is" basis.
4) All the bidder should prior to the auction
satisfy themselves about the correctness of the
description, measurement, boundaries etc., of the
properties before bidding the auction sale. No
enquiries in this regard will be entertained at the time
of auction. On the property being knocked down in
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favour of a bidder in the auction, he shall be held to
have waived all the objections to the title, description
etc., of the property. The successful bidder will have to
pay the earnest money deposit as mentioned in this
catelogue by way of crossed demand drafts or crossed
pay order drawn on Nationalised Bank payable at
Bengaluru in favour of zonal accounts officer, Central
board of direct taxes, Bengaluru. Any failure on his
account shall render the bid invalid and will also
result in forfeiture of the caution money. In such
event, next highest bidder who satisfies the terms and
conditions will be given preference for the acceptance
of the bid. The successful bidder should also confirm
in writing and under his signature that he has
purchased the property in the auction on the terms
and conditions of the sale mentioned herein.
In accordance with the terms and conditions of
the auction sale, the plaintiff has given a specific
undertaking as under:
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Undertaking by the purchasers:
I/we agreed to the above terms and conditions,
have today purchased the property at lot no.8 in the
auction sale, catalogue as above for Rs.5,60,70,000/-
only.
For Augst Ventures Pvt.Ltd.,
sd/-
Managing Director,
Purchasers signature.
The plaintiff being fully aware of the description
and measurement of the property participated in the
auction with the open eyes. The plaintiff was
purchasing the property which has been acquired by
the department on "as is where is" basis. In other
words, the preemptive purchase orders has been
passed in respective of the property which has been
described in the auction notice and sold to the
plaintiff. The plaintiff having undertaken that they
have understood the conditions of the sale and would
not raise any objections regarding the description and
measurement cannot now turn around and make the
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baseless claim. The plaintiff having accepted the
property is now exploring a possibility of enriching
themselves by pleading ignorance of the terms and
conditions of the auction sale. This attempt being
made to claim damages is not only deliberate but also
a misrepresentation. Only after accepting the terms
and conditions of the auction sale which are
mentioned in the written statement now, the plaintiff
participated in the auction and purchased the same.
The plaintiff being a company advised by its
experts cannot absolve itself about the legal
implications of the terms and conditions which it has
been read and understood and signed to abide by the
terms and conditions. Having agreed to abide by the
terms and conditions, he cannot file this suit claiming
the damages. Therefore, the suit itself is filed in order
to deceive the revenue but also to make unjust
enrichment.
The plaintiff purchased the property for a sum
of Rs.5,60,70,000/- in the suit. The plaintiff restricted
his claim to a sum of Rs.3,30,00,000/- with interest of
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18% as payable by the Union of India. The claim is
deliberately made with the malafide intention of
overcoming the terms and conditions of the auction
sale. The same is unjust, unreasonable and not
bonafide. The contention of the plaintiff that the
plaintiff is a private limited company registered under
the provisions of the Companies Act and has its
registered office and is in the business of the property
development etc., is not within the knowledge of the
defendant. Further, the contention taken by the
plaintiff that he has participated in auction sale and
the property was conferred in their favour on payment
of 25% are admitted by the defendant. The contention
of the plaintiff that the schedule property was put to
auction by the Government of India and the
measurement of the property described in the
notification is clear and unambiguous, both in acres
and square feet which did not give any room to doubt
the correctness of the measurement of the land and
the notification conveyed that the extent was certain
and definite is false and baseless allegations. In para
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no.4 of the sale, it is clearly mentioned that "all the
bidders should prior to the auction satisfy themselves
about the correctness of the description,
measurements, boundaries etc., of the properties
before bidding in the auction sale. The further
contention that after purchasing the property it got
the same measured through the ADLR, Survey
Department and to the surprise and dismay of the
plaintiff, there was shortage of extent by a sizable area
is not within the knowledge of the defendants. This
defendant denies every contentions taken in para
no.5, 6 of the plaint. The contention of the plaintiff
that even after the execution of the sale deed, the
plaintiff addressed a letter to the second defendant
mentioning about the shortage of the extent of the
land and called upon the defendants to pay the
amount and that the defendants replied the letter
dated 23/3/2006 are to be substantiated by the proof.
As per the defendants, since the property in question
had been sold on 'as is where is ' basis and further the
bidders were required to satisfy themselves about the
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correctness of the description, measurements,
boundaries before bidding in the auction and further
that subsequent to the auction, the bidders shall be
deemed to have waived of the objection to the title,
description etc., of the property is true. The reply
letters states that the successful bidders in the case
on hand the plaintiff had given an undertaking
agreeing to the terms and conditions of the auction
and therefore the plaintiff had waived its objection in
regard to the measurements and therefore it was not
entitled to refund the amount demanded is true.
Since it was clearly mentioned in the conditions of the
sale that all the bidders should prior to the auction
satisfy themselves about the correctness of the
description, measurement, boundaries etc., of the
properties before bidding in the auction sale. No
enquiries in this regard will be entertained at the time
of the auction. On the property being knocked down
in favour of a bidder in a auction, he shall be held to
have waived all the objections to the title, description
etc., of the property. The plaintiff was informed well in
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advance that the property is being sold on 'as is
where is' basis. The contention of the plaintiff that
'as is where is' basis is applicable only to the nature
of the land and not to the extent of land is false. The
defendants further denies the averments of the plaint
in para no.7, 8, 9, 10 of the plaint. The contention of
the plaintiff in para no.11 of the plaint that on
account of the short delivery then what is proclaimed,
it has also lost on the FAR and consequent
profitability, the FAR applicable is 2.25 and on
account of the short delivery of the extent, the plaintiff
denied the profitability on the extent of 2.25 FAR of
12069 square feet which worked out to 27155 square
feet. The loss and sufferance of the plaintiff at the rate
of 1000 per square feet which will amount to
Rs. 2,71,55,000/- and general damages of
Rs.50,00,000/- which the plaintiff was required to
spend on registration fees etc., which are baseless
allegations of the plaintiff which has to be proved by
the plaintiff strictly. Therefore, for the aforesaid
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reason, prayed to dismiss the suit in the ends of the
justice.
5. On the basis of the pleadings of the parties,
my learned predecessor has framed the following
issues for consideration:
(1) Whether plaintiff proves that there was
shortage of an area measuring 1269 square
feet so purchased under auction and
thereby defendants are liable to pay the
amount with reduced price to the property
so purchased by the plaintiff firm as alleged
in the plaint?
(2) If so, whether plaintiff proves that
defendants have collected excess amount
towards purchase of property as alleged in
the plaint?
(3) If so, whether plaintiff is entitled for the
suit claim of Rs.3,30,00,000/- together with
interest at the rate of 18% per annum from
the date of suit till realisation as prayed?
(4) What order or decree?
6. Plaintiff in order to prove his case, the
Managing Director of the plaintiff company got
examined himself as PW.1 and the Director of
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Satyaprabha Consultants Pvt. Ltd., is examined as
PW.2 and got marked Ex.P1 to Ex.P18 and closed
their side of evidence. On behalf of the defendants,
DW.1 is examined and got marked Ex.D1 to Ex.D8
and closed their side of evidence.
7. Heard both sides and perused entire
records of the case.
8. My findings on the above issues are as
under:
Issue No. 1) ............In the affirmative;
Issue No. 2) ............In the affirmative;
Issue No. 3) ............In the affirmative;
Issue No. 4) ............As per final order for
the following:
9. ISSUE NO.1 AND 2: It is the specific
case of the plaintiff that the area of the schedule
property is mentioned greater than the actual area
which is existed in the spot. The entire suit of the
plaintiff is for the recovery of the money for the
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damages sustained by the plaintiff due to the short
delivery of the land to an extent of 12069 square feet.
10. As per the notification dated 20/2/2004, lot
no.8 in the said notification, referred to the land in
sy.no.35, 36, 37, 38 and 39 (old sy.no.100) of
Mayamgutha, B.Narayanapura, K.R.Puram Hobli was
3 acres 16 guntas. In the square feet the area of the
land was mentioned as 148104 square feet. Since this
was a government notification, the plaintiff believed
the extent mentioned in the notification as correct
participated in the auction and offered the highest bid
and he was declared as the successful bidder by the
second defendant. In this regard, an initial 25% of bid
amount was paid by the plaintiff on the date of
auction itself. Ex.P1 is the notification issued by the
Government of India wherein the lot no.8 was offered
for sale by the defendants. In the page no.8 of Ex.P1,
it was clearly mentioned that the BDA has changed
the user of the land from the residential category to
the industrial category after the property was
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acquired. The Hon'ble High Court of Karnataka has
stayed the operation of the order of the BDA in
W.P.No.15409/94 filed by the department and is
pending. The sale is on "as is where is" basis. This
particular note in Ex.P1 is marked as Ex.p1(a) in this
case. In the schedule of lot no.8 it is clearly mentioned
that the total area of land is 3 acres and 16 guntas
(148104 square feet). Believing the words in Ex.P1,
the plaintiff purchased the lands thinking that the
total extent of the land that was purchased by him by
the Government is 3 acres 16 guntas. However, after
the execution of the sale deed, the entire property got
measured by the ADLR and on the report of the ADLR
it was found that there is a shortage of 16 guntas of
land in total. In this regard, the plaintiff has issued
notice dated 3/11/2005 to the Chief Commissioner of
the Income Tax, Bengaluru to refund the amount
proportionate to the shortage of the lands which he
has purchased from the defendant. In that letter, it
was clearly stated that the survey was conducted on
20/9/2004 in the presence of the representative of the
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defendant, plaintiff and owners of the neighbouring
properties. In this regard, they have claimed the
amount to be refunded at the earliest which is the
amount proportionate to the 16 guntas of land i.e.,
short. In this regard, the defendant has issued a reply
on 23/3/2006 stating that since the entire sale is
based on "as is where is" basis, the plaintiff has no
right to claim the amount now. Further, he has stated
that as per the terms and conditions of the sale and
also undertaking by the purchaser, all the rights of
the purchasers are hereby waived and hence he has
no locus standi to claim the refund. One of the
important point that has to be noted here is that
earlier the same schedule lands were kept open for the
auction by the defendants and in this regard,
Streamline Pinvest was considered as the highest
bidder of the auction and his bid was accepted and
later on Streamline Pinvest Company cancelled the
entire auction because of the reason that the actual
area mentioned in the auction was lesser than the
auction notice. A specific question is asked by the
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counsel for the plaintiff to DW.1 in this regard
wherein DW.1 clearly admitted that "it is correct to
suggest that Streamline Pinvest declined to pay
the balance because the actual area mentioned in
the auction was lesser than the auction notice."
Further, DW.1 clearly admitted that "it is correct to
suggest that Streamline Pinvest insisted for the
refund of the deposit money for which our
Department did not agree and hence they went
before the Hon'ble High Court of Karnataka. I am
not sure whether they have claimed the refund of
the money in the writ petition rather I know that
since the actual area is lesser than the area
mentioned in the auction notice, they went before
the Hon'ble High Court of Karnataka." From the
above admissions, it is clear that the earlier auction
was cancelled by the Streamline Pinvest due to the
fact that there was a shortage of extent of land in the
spot than which was mentioned in the notification.
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11. Another important thing which has to be
noted here that in the Divisional Bench of Hon'ble
High Court of Karnataka, a Court Commissioner was
appointed wherein the court commissioner clearly
held that the actual area is less than the area
mentioned in the auction notice. Even in the report of
the second commissioner, it was clearly stated that
actual area is lesser than the area mentioned in the
auction notice. Ex.P21 is the order sheet in writ
appeal no.2673-74/98 wherein it is clear that the
Hon'ble High Court of Karnataka has appointed the
court commissioner Sri V.S.Naik to inspect the spot
and submit his report. Accordingly, two
commissioners are appointed who filed the report
which clearly states that the actual area is lesser than
the area mentioned in the auction notice. A specific
question has been asked by the counsel for the
plaintiff to the DW.1 that whether he is ready to
produce the copy of the commissioner report to the
court to understand the true picture why Streamline
Pinvest Limited has refused to make the payment. In
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the earlier cross-examination DW.1 clearly admitted
that there is a copy of the commissioner report in his
office and he has no impediments to produce the
same before the court. However, in the further cross-
examination, he has stated that he has produced all
the documents except the commissioner report,
although a question was asked to him to produce the
same before the court. In order to elicitate the truth
whether the area mentioned in the auction notice is
greater than actual area in the spot can be
determined if the defendant would have produced the
commissioner report. However he has not produced
the same before the court. An adverse inference can
be drawn against the defendant in this regard. The
only contention taken by the defendant is that the
entire land was sold on "as is where is" basis. So, as
per the defendants, this word "as is where is" applies
to the state of thing of schedule property and also the
extent of of schedule property. However, this
contention taken by the defendant cannot be
beleivable because the actual state of things is entirely
31
CT0028_O.S._1970_2009_Judgment_.doc
different from the extent of the schedule property.
Moreover, the schedule land is purchased by the
plaintiff only after the payment of the requisite
amount. Further, to the entire extent of the land
mentioned in the notification, the execution of the sale
deed was made between the parties and hence the
plaintiff has paid entire consideration with regard to 3
acres 16 guntas of the land. Further, for the
registration of this 3 acres 16 guntas of land, he has
to bear the other expenses such as registration fees
and stamp duty etc., So, even there is a lesser extent
of land in the schedule, the plaintiff has to bear entire
expenses for the extent of land mentioned in the
notification. One of the arguments putforth by the
counsel for the defendant is that after the execution of
this sale deed, there are subsequent transactions held
with regard to the suit schedule property. In all these
transactions, the extent of land is mentioned as 3
acres 16 guntas only. In this regard, the counsel for
the defendant produced Ex.D6 and Ex.D7 which are
the transactions held after the execution of this sale
32
CT0028_O.S._1970_2009_Judgment_.doc
deed. In both these documents, the measurement of
the property is mentioned as 3 acres 16 guntas.
Further, in Ex.D8 which is the official memorandum
for the conversion of the schedule property the extent
of land is also mentioned as 3 acres 16 guntas.
However, this itself does not vitiate the claim of the
plaintiff because all the documents subsequent to the
sale transaction held between the plaintiff and the
defendant are not executed by the plaintiff. Moreover,
from the report of the ADLR and also from the report
of the Commissioner, it is clear that there is a
shortage of extent of land of 16 guntas, then which is
mentioned in the notification.
12. From the above discussions, it is clear that
the plaintiffs purchased the land as per the
government notifications. It is further clear that after
execution of the sale deed as a property developer he
executed somany sale deeds after forming the entire
land into different sites. The plaintiff being the
property developer and on account of the short
33
CT0028_O.S._1970_2009_Judgment_.doc
delivery then what is proclaimed, lost on the FAR and
consequent profitability. The FAR applicable is 2.25
and on account of the short delivery of the extent then
what is stated. The plaintiff denied profitability on the
extent of 2.25 FAR of 12069 square feet which is
worked out to 27155 square feet. From the above it is
clear that the plaintiff has lost the profibililty which
works out at the rate of Rs.1000/- per square feet and
for 27155 square feet, it will caused
Rs.2,71,55,000/-. Further, the plaintiff also suffered
general damages to the tune of Rs.50,00,000/- as he
is required to spend on registration fees, stamp duty
and for the extent of the land which has been
delivered to the plaintiff and other losses due to the
large delay and interest on the investment. In this
regard, the only contention taken by the defendant is
that there is no shortage of land as per the
Department and the land is sold mainly on the basis
of "as is where is" basis. In the cross-examination of
the PW.1 it is clearly stated by the PW.1 "that the
salable area which I have built up the construction is
34
CT0028_O.S._1970_2009_Judgment_.doc
about 335000 square feet, about 3 years I sold the
property at the rate of 3000 square feet for built up
area". The entire above averments of PW.1 are denied
by the DW.1 in his cross-examination but he has not
stated how and what ground he denies the entire
allegations of PW.1. Nothing more is elicited from the
mouth of PW.1 in this regard. From the documents
submitted by the plaintiff, as well as from the
defendants it is clear that there is shortage of an area
of 16 guntas so purchased under the auction and the
defendants have collected the excess amount towards
the purchase of the property as alleged in the plaint.
So, I am of the opinion that the plaintiffs have
successfully proved issues 1 and 2 in his favour and
accordingly I answer issues 1 and 2 in the
affirmative.
13. ISSUE NO.3: It is the specific claim of
the plaintiff that believing the words of the defendant
which is a government the plaintiff purchased the
lands by virtue of the sale deed. For executing that
35
CT0028_O.S._1970_2009_Judgment_.doc
document, the plaintiff has paid the consideration to
the tune of Rs.5,60,70,000/- as mentioned in the
Ex.P5 sale deed. On perusal of Ex.P5 sale deed, it is
clear that in the schedule of the sale deed, the extent
mentioned is 3 acres 16 guntas. From the discussions
in issues 1 and 2, it is clear that there is a shortage
of 16 guntas of land in the actual place. Further, since
there was difference of extent mentioned in the
notification as actual state of place the earlier bid was
cancelled by the Streamline Pinvest company.
Believing the words of the defendant, the plaintiff
executed the sale deed on 12/8/2005 that there is 3
acre 16 guntas of land in the actual spot. However,
after the survey and as per the commissioner report
filed before the Hon'ble High Court of Karnataka, it is
crystal clear that there is shortage of extent of land in
the spot. The only contention taken by DW.1 is that
there is no shortage of land as per the Department.
However, he clearly admits the report of the
Commissioner which is known to him and also the
same was in the hands of his department as per his
36
CT0028_O.S._1970_2009_Judgment_.doc
own depositions. Further, even the survey conducted
by the ADLR is the presence of the representatives of
the defendant. Both these documents are not
challenged by the defendants, rather than DW.1
himself admits that he know the entire contents of
report of the ADLR as well as the report of the
commissioner. From the above, it is clear that even
the depoartment who is the defendant in this case is
fully awarae of the fact ther eis a shortage of land in
the actual spot than which is mentioned in the
notification. Even this matter was within the
knowledge of the defendants at the time of
cancellation of the earlier bid by the Streamline
Pinvest Ltd., in the second notification the
government mentioned the area of the land as 3 acres
16 guntas only. This clearly shows that the
government is not diligent in publishing the
notification even though it is fully aware that thers is
a shortage of land in the actual place. Though in the
depositions of DW.1 he did not admits that there is a
shortage of land. From the documents submitted by
37
CT0028_O.S._1970_2009_Judgment_.doc
the plaintiff and also from the admissions of DW.1 it
is clear that there is a shortage of land in the actual
place. Further due to the negligence of the
government the plaintiff has bear more than Rs.3
crores for the damages, for the registration fees and
also the expenses he suffered in those days and an
excess of amount which he has paid to the shortage
of the land which has not been delivered to him.
Therefore, it is clear that for all the losses and
sufferings which plaintiff suffered due to the negligent
act of the defendant although they were fully aware
that there is a shortage of land in the spot. No wonder,
the plaintiff is demanding a suit claim of
Rs.3,30,00,000/- with an interest at the rate of 18%
per annum since the entire transaction is of the year
2005. From the above discussions, it is clear that the
plaintiff has to be compensated for the wrongful acts
of the defendants. Accordingly, I answer issue no.3 in
the affirmative.
38
CT0028_O.S._1970_2009_Judgment_.doc
14. ISSUE NO.4: From my above discussions
and reasoning, the suit of the plaintiff deserves to be
decreed. In the result, I pass the following:
The suit of the plaintiff is hereby
decreed.
The defendants have to pay a sum of
Rs.3,30,00,000/- together with interest at
the rate of 18% per annum from the date of
filing of the suit till the realisation within 3
months from the date of this decree.
No order as to costs.
Draw decree accordingly.
***
[Dictated to the Judgment Writer directly on computer, Script corrected, signed and then pronounced by me, in the Open Court on this the 21 st day of September 2019.] [PRASHANTHI.G] XXVII Additional City Civil Judge.
BANGALORE.
1. List of witnesses examined on behalf of the Plaintiff/s:
PW.1 Biju P.John
PW.2 K.S. Venkatakrishnan
39
CT0028_O.S._1970_2009_Judgment_.doc
2. List of witnesses examined on behalf of the Defendant/s:
DW.1 Ramesh Narain
3. List of documents marked on behalf of the Plaintiff/s:
Ex.P1 Auction notification Ex.P1(a) Statement in Ex.P1 Ex.P2 Letter by the defendants dated 18/3/2005 Ex.P3 Letter dated 27/6/2005 issued by the defendants to the plaintiff Ex.P4 Letter issued by the plaintiff dated 29/6/2005 regarding protest Ex.P5 Certified copy of the sale deed dated 12/8/2005 Ex.P6 Letter dated 3/11/2005 issued by the plaintiff to the defendant Ex.P7 A reply letter issued by the defendant refused to refund the amount dated 23/3/2011 Ex.P8 Copy of the sanctioned plan Ex.P9 to 5 vouchers of August part Ex.P13 Ex.P14 CD Ex.P15 Certificate issued by Indian Green building Council Ex.P16 Original estimate of cost of august part residential complex issued by Architects Ex.P17 Copy of the sale agreement Ex.P18 Report on estimate of loss of developers profit in respect of plaintiff ventures 40 CT0028_O.S._1970_2009_Judgment_.doc
4. List of the documents marked for the defendants:
Ex.D1 Authorisation letter issued by income tax department to DW.1 Ex.D2 Order passed by Indome Tax authority U/s 269 UD.1 of Income Tax Act Ex.D3 Catalogue for public auction Ex.D4 Certified copy of the sale deed dated 14/4/1978 Ex.D5 Certified copy of the sale deed dated 19/10/1971 Ex.D6 Certified copy of the sale deed dated 28/6/1969 Ex.D7 Certified copy of the sale deed dated 23/6/1964 Ex.D8 Certified copy of the order of Deputy Commissioner dated 19/3/1992 [PRASHANTHI.G] XXVII Additional City Civil Judge.
BANGALORE.
Judgment pronounced in the Open Court....
(Vide separate detailed judgment) The suit of the plaintiff is hereby decreed.
The defendants have to pay a sum of Rs.3,30,00,000/- together with interest at the rate of 18% per annum from the date of filing of the suit till the realisation within 3 months from the date of this decree. No order as to costs.
Draw decree accordingly.
[PRASHANTHI.G] XXVII Additional City Civil Judge.
BANGALORE.
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