Delhi District Court
Cs No. 18/17/88 (New No.612697/16) ... vs . M/S. Madhan & Co. & Ors. 1/67 on 20 September, 2017
IN THE COURT OF SH. SANJAY KUMAR, ADDITIONAL
DISTRICT JUDGE-02, WEST, DELHI.
CS No. 18/17/88
New No. Civ. DJ-612697/16
Punjab and Sind Bank
through the Chief Manager,
Premises Deptt. 21, Rajindra Place,
New Delhi.
......Plaintif
versus
1. M/s. Madan and Company,
D-3, Narain Vihar, New Delhi.
2. Shri Lalit Mohan Madan,
Partner, M/s. Madan and Co.
D-3, Narain Vihar, New Delhi
3. Smt. Kuldip Kaur,
Partner, M/s. Madan and Co.
D-3, Narain Vihar, New Delhi
4. Delhi Development Authority,
Vikas Minar, New Delhi
5. Municipal Corporation of Delhi
Through its Commissioner,
Town Hall, Chandni Chowk,
Delhi-110006.
.........Defendants
Date of institution of the case : 07.01.1988
Date of reserving of judgment : 25.08.2017
Date of pronouncement of judgment : 20.09.2017
JUDGMENT
1. The plaintif Punjab and Sind Bank (hereinafter referred as the 'plaintif bank') has filed a suit for specific performance of the Agreement to Sell between the plaintif CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 1/67 and defendant no.1 relating to the premises constructed on plot No. B, Safdarjang Community Centre, New Delhi which are in possession of the plaintif, as also for permanent injunction, directing defendant no.1 not to in any manner negotiate for sale or sell/transfer the leasehold rights in respect of the property to any body other than the plaintif, nor to apply to the Delhi Development Authority, defendant no.4 for permission to sell in favour of any body, with a further mandatory injunction directing the defendant no.4 to dispose of the application for grant of permission filed jointly under the signatures of the plaintif and defendant no.1 to transfer/sell the property by defendant no.1 to the plaintif. The brief facts necessary for the disposal of the suit are as under:
2. It is stated that the plaintif bank is a body corporate with perpetual succession and a common seal with powers subject to provisions of the Act 40 of the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance No.3 of 1980, to acquire, hold, and dispose of property and to contract to sue and be sued in its name. Shri Sampuran Singh is the Chief Manager of the Premises Department and is a Principal Officer of the plaintif bank in terms of Order 29 Rule 1 CPC and is as such competent to sign and verify the plaint and institute the suit. He also holds general power of attorney in his favour from the bank.
3. The defendant no.4 after giving due notice ofred for sale through public auction plot Nos. A and B in Community Centre, Safdarjang Development Scheme. The CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 2/67 said auction was held on 11.12.1975. the Schedule of plots issued by defendant no.4 clearly indicated that the proposed user of the said plots was for banking purposes. Defendant no.1 M/s. Madan and Co. were successful bidders in the said auction in relation to plot B Safdarjang Community Centre, New Delhi. The defendant no.1 having been successful bidders, their bid was confirmed and a lease deed was finally executed in favour of defendant no.1 in respect of plot no. B, Community Centre, Safdarjang Development Scheme on 02.06.1977 and was duly registered on 13.06.1977 in the office of the Sub Registrar, New Delhi.
4. It is stated that after registration of the lease, the defendant no.1 through defendant no. 2 and 3 approached the plaintif bank in terms of their communication dated 08.01.1977 and further to construct the premises for the plaintif bank on the said plot. The total area of the said plot being 344.65 square meter, upon negotiations between the plaintif and defendant nos. 2 and 3, the plaintif bank had agreed to purchase and the defendant no.1 had agreed to sell the constructed premises as per requirements of the plaintif bank on the plot given on lease in favour of defendant no.1 by defendant no.4 for a total consideration of Rs.12.50 lacs. Out of the settled consideration, Rs.12.25 lacs had been paid as per the payment schedule settled between the plaintif and the defendant no.1 as against delivery of possession of the constructed premises while the balance outstanding remains payable simultaneously with the execution of the sale deed by the defendant no.1 in favour of the plaintif bank. The property already stands mutated in favour of the CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 3/67 plaintif in the Municipal records. A copy of the order dated
10..02.1987 passed by the Deputy Assessor and Collector Municipal Corporation of Delhi is enclosed.
5. It is stated that Clause 4 (a) of the lease deed executed on 02.06.1977 between the President of India as lessor through Addl. Secretary, Lease administration, Delhi Development Authority in favour of defendant no.1, specifically provided that "The lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the commercial plot except with the previous consent in writing of the lessor which he shall be entitled to refuse in his absolute discretion."
6. It is stated that in view of the above clause being contained in the lease deed, an application was submitted on the prescribed proforma for registration of transfer and permission being granted in favour of defendant no.1 to transfer the property to the plaintif bank as transferee. The said application also contained a declaration by the transferee under the signatures of the then Chief Manager in the premises Department of the plaintif bank. The same was received in the office of the DDA way back on 09.02.1979 against receipt No. 382. The said application has not considered by defendant no.4 and has been kept pending ever since.
7. It is stated that defendant no.1 had ofered particulars of proposed construction to the plaintif vide letter dated 08.01.1977. Further details were communicated in CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 4/67 terms of communication of defendant no.1 dated 15.03.1977 as regards the carpet area proposed to be constructed as a result of mutual discussions. The proposal to purchase the property ofered by defendant no.1 was approved by the Board of Directors of the plaintif in terms of resolution dated 30.03.1977. The plaintif bank vide letter dated 26.07.1983 pursued with the defendant no.1 and sought to expedite the matter so that title in property could be completely transferred in favour of the plaintif. The plaintif bank received the reply dated 30.07.1983 from the defendant no.1 assuring therein that the matter was being vigorously pursued by them with the DDA. The defendant n.1 wrote a letter dated 29.10.1983 to the defendant no.4/DDA ofering therein to pay premium in respect of some 105 sq. ft. area and also asked them to expedite permission for transfer. No reply was received from defendant no.4 to the repeated communications addressed by defendant no.1 in respect of obtaining permission to transfer under clause 4 (a) of the lease deed in favour of the plaintif bank.
8. It is stated that inspite of the fact that the application dated 09.02.1979 was pending, the defendant no.4 in terms of the communication dated 12.02.1985 issued a notice to show cause addressed to defendant no.1 in which they had threatened to determine the lease on the allegation that the basement was being used as an office. According to the show cause notice out of the total area of basement being 1298 sft., the alleged user of the basement as office was restricted to 22' x 22' i.e. 484 sft. only. The defendant no.1 had virtually relinquished all its rights in favour of the plaintif CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 5/67 in respect of the suit property and had received bulk of the consideration, the notice received by defendant no.1 was forwarded for appropriate action to the plaintif with letter of defendant no.1 dated 15.02.1985. The said notice was duly replied by the plaintif bank through Counsel vide communication dated 06.03.1985 and it was also pointed out to the DDA that a decision on the pending application for transfer of the property in favour of the plaintif bank be taken expeditiously.
9. It is stated that plaintifs were stunned and surprised when they received a letter dated 31.08.1985 on 06.09.1985 from the defendant no.1. Though defendant no.1 admits the agreement to sell in favour of the bank but on the strength of inaction of DDA, the defendant no.4 threatened to treat the agreement as frustrated. It is stated that between 1979 and 1987 the value of the property has escalated many fold and it appears that with an intent to take advantage of the attitude adopted by defendant no.4/DDA, the defendant no.1 wants to make capital out of irresponsible attitude of defendant no.4. It is stated that without deciding the application dated 09.07.1979 jointly made by the plaintif and the defendant no.1 to the defendant no.4 for permission to transfer the property in favour of the plaintif by defendant no.1, the defendant no.4 in terms of show cause notice dated 23.09.1986 addressed to defendant no.1 without endorsing a copy thereof to the plaintif, threatened to determine the lease on the ground that the plot had been transferred in favour of plaintif bank unauthorizedly.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 6/67
10. It is stated that the defendant no.1 had left a copy of the said show cause notice of the DDA and its reply by defendant no.1 addressed to Deputy Director (CL) DDA, at the office of the plaintif bank. The defendant no.1 in the said letter addressed to DDA, had given the explanation that "we beg to advise you that we have already requested the Punjab and Sind Bank that as Delhi Development Authority has not approved the sale, to please treat the agreement as cancelled. We have also offered them to refund the loan taken by us along with upto date interest. We shall advise you as soon as Bank accepts our proposal."
11. It is stated that on this stand being taken by defendant no.1, the plaintif felt that the circumstances were being so created that the plaintif would be cheated out of the present agreement. A notice dated 16.07.1987 under Section 53-B of the Delhi Development Act was addressed to the Chairman, Vice Chairman and Secretary of DDA by the plaintif bank wherein the plaintif had called upon defendant no.4/ DDA to dispose of pending application for permission to transfer the property in favour of the plaintif by defendant no.1 which had been kept pending ever since by the defendant no.4. It was indicated in the notice that if no decision was taken within two months from the date of receipt of the said notice, legal proceedings will be initiated at the risk and expense of defendant no.4. The said notice was dispatched on 17.07.1987 both by registered AD post and also under certificate of posting. Inspite of expiry of notice period the defendant no.4 has neither replied to the notice nor disposed of the pending application.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 7/67
12. It is stated that because of the admitted agreement to sell between defendant no.1 and the plaintif, the defendant no.1 as vendors to carry out the obligation imposed by law in order to complete the sale in favour of the plaintif bank. The plaintif had performed its obligations under the agreement and had paid an amount of Rs.12.25 lacs to the defendant no.1. It was thereafter that defendant no.1 had made over the possession of the property to the plaintifs on 05.04.1977. The plaintif and the defendant no.1 had fulfilled the terms and obligations incurred by them except that M/s. Madan and Company were to execute the registered sale deed in favour of the plaintif bank after obtaining permission from the defendant no.4 for which the application had been submitted to the Delhi Development Authority.
13. It is further stated that defendant no.1 was conscious of the fact that towards the purchase of the plot on lease hold basis it had paid to the defendant no.4 a total consideration of Rs.2,05,500/- while under the agreement to sell, it had negotiated sale for a much higher amount to the plaintif bank. At the time of entering into the agreement to sell while gainfully receiving payment from the plaintif, the vendor, defendant no.1, who had entered into the perpetual lease deed with defendant no.4 were aware of the terms contained in clause 4 (a) of the lease deed. Thus the lessee, defendant no.1 being the vendor was always under an obligation to obtain requisite permission from defendant no.4 in order to complete the contract by finally executing the sale deed in favour of the plaintif bank and to have it registered.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 8/67 While receiving the payment, M/s. Madan and Co., defendant no.1 were all the time conscious that they were under a legal obligation to obtain the requisite permission.
14. It is stated that the defendant no.4 before putting the plot in suit to public auction had notified that the plot being put to auction was for banks. Therefore, the defenadnt no.4 under a legal as well as an equitable obligation to deal with the application jointly submitted by the plaintif and defendant no.1 and to grant the permission subject to the right of the defendant no.4 to recover the unearned profits which are payable by defendant no.1 to defendant no.4 from out of the consideration received by defendant no.2 from the plaintif. As the said application dated 09.02.1979 for seeking permission to transfer has not been decided, it cannot be said as yet that the permission to transfer has been refused. Perusal of letter dated 10.09.1983 clearly follows that defendant no.1 had undertaken upon itself the responsibility to deposit the premium in respect of 105 sft. excess area covered.
15. It is further stated that to clearly understand the correct legal position under clause 4 (a) as contained in the perpetual lease deed executed by the defendant no.4 in favour of the defendant no.1, it contains an arbitrary obligation which is pre-eminently illegal when read along with the provisions of the Contract Act.
16. It is stated that the Municipal Corporation of Delhi had addressed a communication bearing No. CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 9/67 Tax/Hq/Special.Cell/86/S/173/1955 to defendant no.1, who enclosed the said communication along with their letter dated 11.03.1986 and forwarded it to the plaintif bank. The said notice preceded fixation of rateable value. The plaintif bank participated in the proceedings and proceeding before the Deputy Assessor and Collector concluded in his passing an order dated 10.02.1987. Upon fixing the rateable value, the MCD also issued a demand notice for payment of municipal taxes demanding therein a sum of Rs.4,79,981/- which includes transfer duty calculated @ 5% being in the sum of Rs.70,000/-. Receipt of payment are placed on record.
17. The plaintif seeks a decree for specific performance of the agreement to sell building constructed on plot B, Safgarjang Community Centre, New Delhi along with leasehold rights in the site of the said property leased in favour of defendant no.1 by the President of India be passed in favour of the plaintif and against the defendants and the defendant no.1 be directed to obtain requisite permission from the DDA and in case the said permission is not forthcoming at the instance of defendant no.1, the permission for sale be applied for afresh through the Registrar of this Hon'ble Court and upon Receipt of such permission the property be conveyed to the plaintif through a registered sale deed that be directed to be executed by the Registrar of this Court in favour of the plaintif; in case specific performance be not allowed, the plaintif seeks a decree in its favour in the amount equivalent to the market value of the property prevailing on the date of the decree; the plaintif also seeks that interest be awarded on the market value of CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 10/67 the property determined on the date of the decree till the date of realization at the bank rates prevailing at the relevant time; the plaintif also seeks for a decree for permanent injunction restraining defendant no.1 from in any manner negotiating for sale or assigning the property in favour of any body else other than the plaintif bank or from applying for permission to sell in favour of any body other than the plaintif, to the defendant no.4; the plaintif also seeks for a mandatory injunction directing the DDA not to grant permission for sale of the suit property in favour of any body other than the plaintif as also a direction be issued to the DDA to finally dispose of the application for grant of permission pending with them ever since 09.02.1979.
18. The defendant nos. 1 and 2 filed written statement and taken preliminary objections that the suit has not been instituted by a duly authorized person. The suit is bad for misjoinder of parties. Smt. Kuldip Kaur is no more partner of defendant no.1 and the fact is known to the plaintif. Accordingly, she has been wrongly impleaded as defendant in the present case. The agreement to sell stands frustrated as the permission to transfer by defendant no.4 was a condition precedent for sale, and as the said permission has not been allowed, so the property cannot be sold to the plaintif, and the plaintif was duly informed regarding the said position. It is stated that the plaintif has claimed relief in the alternative a decree in its favour for equivalent to the market value, and also interest thereon, to which it is not entitled under any law, especially when the plaintif has been in possession without payment of any rent.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 11/67 The plaintif is at the most entitled to the refund of the amount paid to defendant nos. 1 and 2. The prayer clause is vague. The suit is not properly valued in view of the relief claimed in clause (b) of the prayer clause.
19. On merits, the most of the averments made in the plaint are denied as wrong and incorrect except those which are matter of record. It is stated that when the show cause was received by defendant no.1, the defendant no.1 had no option but to inform the DDA and the plaintif about the determination of the agreement to sell which stands frustrated as the permission from the DDA was a condition precedent for the transfer of the property. The replying defendants sincerely made eforts for getting the permission which was not coming forth and no question of cheating the plaintif bank arises. Rather as a fair play, the replying defendant ofered to refund the amount along with interest at bank rate which is the maximum defendant no.1 can do in the circumstances, provided the plaintif also pays the reasonable rent. It is false to allege that under the agreement to sell the defendant had negotiated for a much higher amount to the plaintif bank. The plaintif is forgetting that the defendant spent a huge amount on the construction of the property. It is no doubt true that defendant no.1 knew the terms of the lease, and that is why defendant no.1 filed an application as desired by the plaintif for obtaining permission to sell under the terms of the lease deed executed by the defendant no.4 in favour of the defendant no.1. It was for defendant no.4 to allow the permission or not to allow it. Defendant no.1 has not transferred the rights to anyone else.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 12/67 Without the permission from the DDA, it cannot transfer the property to anyone including the plaintif. It is not within the hands of the replying defendants to allow the permission, rather it is the sole prerogative of defendant no.4 to allow or not to allow the permission.
20. It is stated that there is no question of defendant no.1 transferring the property to anyone without the permission of the DDA and the said permission is not coming forth. As the condition about permission from the DDA was a pre-requisite, the agreement in favour of the plaintif stands frustrated, and cannot be kept alive for indefinite time. Although under the law and in the circumstances of the case, the plaintif is not entitled to any interest, but the replying defendants ofered to pay interest also, provided the plaintif also pays reasonable rent. It is stated that the suit is liable to be dismissed.
21. Plaintif filed replication to the written statement of the defendant nos. 1 and 2. In which the plaintif bank denied the averments made in the written statement by defendant nos. 1 & 2 and reiterated the averments made in the plaint.
22. The defendant no.4, DDA filed the written statement and denied the averments made in the plaint. It is admitted that the answering defendant had sold in a public auction plot No. 'B' in Block -AB, Community Centre at Safdarjung Development Area having a total area of 344.65 sq. mtrs to the defendant no.1. However, it has subsequently CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 13/67 come to the notice of the answering defendant on an application filed for transfer of the property in the name of the plaintif bank by defendant no.1 that the property/plot No. B in Block -AB, Safdarjung Development Area has been sold and transferred by defendant no.1 to the plaintif bank. However, no prior sale permission as required under the Lease Deed dated 02.06.1977 had been obtained by the defendant no.1 from the answering defendant. Therefore, the sale made by the defendant no.1 in favour of the plaintif is not regular. It is denied for want of knowledge of the answering defendant that the property stands mutated in the Municipal records in favour of the plaintif bank. It is stated that the defendant no.1 had failed to obtain the completion certificate of the building constructed over the plot from the Building Department of the answering defendant. No sale permission has been granted by the answering defendant to defendant no.1 for transferring the property in favour of the plaintif. In these circumstances, the property could not have been mutated in the Municipal records without receiving proper documents and clearances from the answering defendant.
23. It is admitted by the answering defendant that an application for permission to sell the plot in favour of the plaintif by the defendant no.1 was received by the answering defendant. The said application has not been decided as the defendant no.1 had failed to obtain the completion certificate of the building from the competent authority. Further the defendant no.1 has constructed the building on excess area of 105 sq. ft. which was not sold to him in the auction held on CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 14/67 11.12.1975. The defendant no.1 has never failed to get the same regularized or demolished the same. The show cause notice dated 12.02.1985 was issued to the defendant no.1 as he was found to be misusing the basement by using it as an office instead of using the same for parking, storing or as a machine room.
24. Plaintif filed replication to the written statement of the defendant no.4. In which the plaintif bank denied the averments made in the written statement by defendant no.4 and reiterated the averments made in the plaint. It is stated that there seems to be a mis-understanding entertained by the defendant no.4, that the property has been "sold and transferred" in favour of the plaintif Bank. What had really happened that the MCD for the purpose of determining the House tax, have resolved to a policy that where-ever 5% of duty is paid, this would mutate the property in their records in favour of the proposed buyers. This position adopted by the MCD in respect of most of the proposed buyers in multi-storey commercial complex as well. The MCD had accordingly carried out the mutation in their records but that does not amount to sale or transfer of title.
25. The defendant no.5/ MCD has not filed any written statement.
26. On the pleadings of the parties, the following issues are framed on 28.04.2010 by my Ld. Predecessor:
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 15/67
1. Whether plaintiff is entitled for a relief of specific performance of the agreement to sell as prayed for? OPP
2. Whether the plaintiff is entitled for damages in the alternate? OPP
3. Relief.
27. In support of its case, the plaintif bank got examined PW1 Sh. Deen Dayal Sharma, General Manager, who tendered his affidavit in evidence as Ex. PW1/A; PW2 Sh.Umakant Doley, Chief Manager, who tendered his affidavit in evidence as Ex. PW2/A and PW3 Sh. A.K. Sharma, Deputy Director, DDA. Thereafter, as per statement of Ld. Counsel for the plaintif, the evidence of plaintif bank was closed on 30.05.2017.
28. The defendant nos. 1 to 3 in support of their case got examined DW1 Sh. Lalit Mohan Madan - defendant no.2. Thereafter, evidence on behalf of defendant nos. 1 to 3 was closed vide order dated 03.08.2017.
29. The defendant no.4/DDA in support of its case got examined Sh. S.K.Sharma, Deputy Director (CL) as DW4. Thereafter, as per statement of Counsel for the defendant no.4/ DDA, evidence on behalf of defendant no. 4 was closed on 03.07.2017. Defendant no.5/MCD has not led any evidence.
30. PW1 Sh. Deen Dayal Sharma, General Manager tendered his affidavit in evidence as Ex. PW1/A, in which he CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 16/67 almost reiterated the averments made in the plaint and got exhibited copy of plaint as Ex. PW1/1; copy of perpetual lease deed dated 02.06.1977 registered with the Sub-Registrar on 13.06.1977; copies of letter dated 08.01.1977 and 15.03.1977 as Ex. PW1/3 (colly); copy of Executive Board Resolution as Ex. PW1/4; copy of transfer application dated 09.02.1979 as Ex. PW1/5.
31. In the cross-examination on behalf of defendant no.4, PW1 Sh. Deen Dayal Sharma admitted that there is no written/oral contract/agreement between plaintif and DDA in respect of property in question i.e. Plot No. B, Safdarjung Enclave, New Delhi. He further admitted that lease deed dated 02.06.1977 was not executed in favour of plaintif by DDA. He deposed that the original lease deed is in the possession of bank. During examination in chief original lease deed was produced before the court and copy was exhibited as Ex. PW1/2. He admitted that prior to 02.06.1977, the plaintif had not written any letter to the defendant no.4 in respect of property in question. He admitted that no permission/previous consent was taken from DDA by plaintif in respect of property in question before execution of lease deed dated 02.06.1977. He did not know whether the completion certificate of the property in question was taken by defendant no.1 from MCD. He volunteered that the appropriate application for obtaining completion certificate was already made to DDA by the defendant nos. 1 to 3 on 28.11.1977 vide DDA Receipt no. 232011 before moving the joint application before defendant no.4 for seeking permission from defendant no.4 for transfer of the property in question CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 17/67 from defendant nos.1 to 3 to the plaintif. He has no knowledge that the building activities from DDA were already transferred to MCD w.e.f. 28.07.1993.
32. To a specific question that as per Clause 4 (a) of the Lease Deed of the suit property, prior permission is mandatory from DDA for sale transaction, he replied that it is part of record. He has no knowledge that during the pendency of the present suit, the DDA has converted the suit property from lease hold to freehold in December, 2016. He has no knowledge whether defendant no.1 has submitted an affidavit with DDA stating that the original lease deed has been misplaced and FIR has been lodged. He denied the suggestion that DDA had cancelled the joint application for transfer of suit property in the name of plaintif vide letter dated 23.03.1987 as completion certificate was not submitted with the request of transfer of the suit property.
33. In the cross-examination on behalf of defendant nos. 1 & 2, PW1 Sh. Deen Dayal Sharma deposed that he had joined the plaintif bank on 16.05.1983. He had worked with Mr. Sampuran Singh, Chief Manager of the plaintif bank since 16.5.1983 till his retirement but he did not remember his date of retirement. He admitted that he was not present at the time of the communication with the defendant no. 1 & 2 because he had joined the bank in the year 1983. He has seen the entire case file during the course of his employment. He is fully aware of the present case. He admitted that the Perpetual lease deed was executed between DDA and Madan & Company. He volunteered that it was handed over to CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 18/67 Punjab & Sind Bank as also the peaceful physical possession. He has seen the Perpetual lease dated 2.6.1977 registered on 13.06.1977. Ex. PW-1/2 was shown to the witness and he has pointed out the last page of the perpetual lease and indicated the registration efect and date of registration as 13.06.1977. As per record bank had made advance towards part sale consideration for construction of the building. He was handed over the court filed to find out the document as mentioned herein above the witness identified and indicated the document Ex. PW-1/3.
34. To a specific question that is it correct that no written agreement to sell was executed or registered between plaintif and defendant no. 1, he replied that it is correct that there is no written agreement to sell or registered between plaintif and defendant no. 1 on record. He volunteered that as he has joined the bank in 1983 and in record file he was not able to find any written agreement however, there was a letter of ofer was made by defendant no. 1 to sell the property in question and the plaintif bank had accepted the ofer and paid the sale consideration. The ofer made by the defendant no. 1 was for the whole property in question. During examination he was asked to show the said ofer and he indicated the document Ex.PW-1/3 of dated 8.1.1977 and 15.03.1977(Colly). To a specific question that whether any GPA was given to the plaintif bank by the defendant no. 1 or not, he answered that no, because there was no question of giving any GPA as the property was not handed over on Power of Attorney basis but by accepting sale consideration and handing over of peaceful possession of the property. On CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 19/67 09.2.1979 the defendant no. 1 in token thereof moved a joint application for transfer of suit property to defendant no.4/DDA. To a question that letter dated 31.08.1985 Ex. PW- 1/D1 is received by the bank or not, he answered that the letter Ex. PW-1/D1 is available on the bank's record.
35. PW1 denied the suggestion that after receipt of the Ex. PW-1/D1 plaintif's bank become unauthorised occupant of the property since no permission has been granted and therefore the proposal of the defendant no. 1 is to frustrated and cancelled and volunteered that because the bank was lawful possession holder having paid the bonafide sale consideration. He admitted that when the possession of the plot of the suit property was transferred to plaintif bank it was lease hold property of the DDA. He admitted that plaintif and defendant no. 1 jointly applied for seeking permission and transfer of the suit property in the name of the plaintif bank with the DDA. The bank did not get any communication from the DDA with regard to the above said joint application. He was not aware whether plaintif bank had written any letter with regard to non receiving any communication on joint application at the relevant time. To a specific question that Can you show any document by which defendant no. 1 handed over physical possession of the suit property, he replied that the joint application dated 09.2.1979 is the document of handing over of the physical possession to the plaintif bank by defendant no. 1 as Ex. PW-1/D2.
36. To a specific question that in ofer/sale letter dated 15.3.1977 was only an ofer of constructed area CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 20/67 without roof rights, he answered that roof rights were not excluded in that letter. The defendant no. 1 told to the plaintif that DDA had issued a show cause notice dated 23.09.1986. To a question that can he show any document whereby Sh. Sampuran Singh was authorised to file the present suit, he replied that it is mentioned in the Para 2 of the plaint, however, no document available on judicial file. To a question that whether plaintif bank challenged the action of DDA in the court of law of rejection of joint application, he replied that it is part of his suit. He volunteered that the rejection letter was given by DDA to defendant no. 1 during the pendency of the suit in the year 1988-89. He denied the suggestion that defendant no. 1 adjusted Rs. 12,25,000/- paid by plaintif bank as sale consideration towards adjustment of mesne profit for possession of the suit property after the rejection of joint application by the DDA. He denied the suggestion that plaintif bank on the day of filing of the suit was not competent to file the present suit as no permission was accorded by the DDA. He further denied that after rejection of joint application by the DDA the agreement between parties became frustrated and defendant no. 1 was in a position to perform his part. He did not know the market value of the suit property as on today. He cannot say anything on the suggestion that today the market value of the suit property is more than 20 crores.
37. PW2 Sh. Umakant Doley, Chief Manager tendered his affidavit in evidence as Ex. PW2/A, in which he deposed that the department of General Administration is responsible for day to day maintenance and upkeep of the Bank owned CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 21/67 premises and is responsible for payment of the taxes and all other statutory dues to the diferent Govt. Statutory departments. He being Chief Manager is responsible for deposit of ground rent with the DDA and any other statutory department of all the premises owned by the plaintif bank. The bank has been continuously depositing the ground rent pertaining to the suit property since its purchase till upto date. Prior to him, his predecessor used to deposit the ground rent of the property in question with the DDA. The respondent no.4/ DDA had never raised any objection on the deposit/receipt of the ground rent from the plaintif bank. The day to day maintenance of the building in question over the suit property was also undertaken by the department of General Administration and the defendant nos. 1 to 3 had nothing to do with the same. All other statutory dues like property tax etc. have also been regularly deposited by the plaintif bank. The bank is also holding the original Perpetual Lease deed dated 02.06.1977 handed over by the defendant no. 1 to 3 at the time of sale of the property to the bank. As per bank record, the suit property i.e. Plot No.-B, situated in Safdarjung Community Centre is the property owned by the plaintif bank.
38. In the cross-examination on behalf of defendant no.4/DDA, the PW2 denied the suggestion that as per record of DDA, plaintif bank is not the owner of suit property. He is not aware about that any person can deposit ground rent for any property/suit property of the DDA.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 22/67
39. In the cross-examination on behalf of defendant no. 1 and 2, the PW2 deposed that he is Chief Manager of the plaintif bank. The plaintif bank has given him instructions vide letter dated 16.05.2017 to appear and depose before this court. The letter is Ex. PW-2/X1. He is not in knowledge that at the time of handing over the possession by defendant no. 1 & 2 to the plaintif bank any possession letter was given or not. He is not aware of the exact date when plaintif bank got the original lease deed of the suit property. He is not aware whether plaintif bank had given any acknowledgement letter to defendant no. 1 & 2 with regard to receiving the original lease deed of the suit property. He denied the suggestion that as claimed that possession was given by defendant no. 1 & 2 to plaintif bank on 12.05.1976 is wrong. He has been shown the Ex.PW-1/3. He is not aware whether the plaintif bank in furtherance to Ex. PW-1/3 written any letter to defendant no.1 & 2. He is not aware whether plaintif bank had given any other ofer except Ex. PW-1/3. He is not aware whether plaintif bank had given any written acceptance or not to defendant no.1 & 2. No other document given by defendant no. 1 & 2 except Ex. PW-1/3 for sale of the property to plaintif bank. He is not aware whether DDA had served show cause notice to the plaintif bank after the ofer of defendant no. 1 & 2. He had not brought any bank record as mentioned in para 10 of his affidavit. The record has already placed on record. He is not aware about anything.
40. PW3 Sh. S.K. Sharma, Deputy Director, DDA deposed that he has brought the summoned record i.e original file bearing No. F33(7)75 impl/cl in respect of CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 23/67 property no. Plot No. B, Block A B, Safdarjung Development Area. He has knowledge as per record of present case. The file pertaining to the allotment and other related documents including sanction and possession etc. started from the year 1973 is misplaced in their office and is not traceable and in the year 1983 the file pertaining to the property in question was re-constructed on dated 04.07.1983 by the order of Suptd. C.L. The joint application of plaintif as well as defendant no. 1 & 2 seeking transfer of the subject property in favour of the plaintif was executed and filed before 1983 hence the record of the same is not available in the current file. The transfer of the said plot was denied by the DDA vide letter dated 23.03.1987 exhibited as Ex. PW-3/1 ( OSR). It is correct that the transfer of the said plot was denied for want of completion certificate only. There is no other reason for denial of transfer of plot in question in favour of the plaintif as per Ex. PW-3/1.
41. PW3 further deposed that the completion certificate in question was not given to the defendant no. 1 and 2 probably for the reason they have not complied with the formalities of building section and probably they have not applied also. The NOC for plot in question and for coverage of excess area was applied by defendant no. 1 & 2 vide letter dated 14.11.1986 and copy of the same is Ex. PW-3/2. The show cause notice issued by the DDA and its reply by the defendant no. 1 & 2 are Ex. PW-3/3 & PW-3/4 respectively. The communication mailed by the defendant no. 1 & 2 to defendant no. 4/DDA regarding transfer of the plot in question in favour of the plaintif is Ex. PW-3/5 (Colly). The plaintif CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 24/67 deposited the ground rent with the defendant no. 4 vide several receipts available on record, which are Ex. PW-3/6 (Colly). Defendant no. 1 to 3 moved an application for conversion of suit property from lease hold to free hold vide their application dated 7.7.2014, the document alongwith the application are exhibited as Ex. PW-3/7 (Colly). The communication made by the defendant no. 1 & 2 with the defendant no. 4 regarding conversion of the suit property alongwith the relevant documents are Ex. PW-3/8 (Colly).
42. In the cross-examination on behalf of defendant nos. 1 and 2, the PW3 to a specific question that this is not the original file that he is carrying today, he replied that the file was re-constructed in the year 1983 now it is original file. To a question that why the file was re-constructed, he replied that because the original file was misplaced/ not traceable in the year 1983. To a further question that was any complaint made when it was found that the file was misplaced or not traceable, he replied that no complaint was made but it was brought into the knowledge of higher authorities. To a further question that was any written communication made to the higher authorities with regard to the original file being misplaced, he replied that it has been informed vide office note dated 04.07.1983. To the question that was the original file containing the original perpetual lease deeds, he replied that he cannot tell about the same, however the present file does not contain the original perpetual lease deeds. To a question that is it correct that the entire ground rent as demanded by DDA from defendant no.1 including enhanced ground rent after 30 years was deposited by defendant no.1, CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 25/67 he replied that as per record the ground rent deposited by plaintif bank on 14.07.1994, 10.01.1995, 15.07.1993, 10.01.1996, and 6.7.1996 vide bank challan deposited in Central Bank. The defendant no. 1 & 2 had deposited the ground rent alongwith interest on dated 2.7.2014 amounting to Rs. 5,14,640/-. To a question that is it correct that conversion took place after two years from the date of application for conversion from Lease hold to free hold, he replied that it is correct. The application was moved on 07.07.2014 and conversion took place on 7.12.2016. To a question that is it correct that the entire conversion charges as demanded by D-4 have been deposited by D1, he replied that it is correct.
43. DW1 Sh. Lalit Mohan Madhan, proprietor of defendant no.1 and defendant no.2 in person tendered his affidavit in evidence as Ex. DW1/A, in which he deposed about their defence taken in their written statement and got exhibited Letter dated 15.03.1977 as Ex. DW-1/1, Letter dated 23.09.1986 as Ex. DW-1/2, Letter dated 31.08.1985 as Ex. DW-1/3, Show cause notice dated 23.09.1986 issued by respondent no. 4 to defendant no. 1 as Ex. DW-1/3.
44. DW1 in his cross-examination on behalf of plaintif, admitted that it is correct that all the contents of the affidavit Ex. DW-1/A are as per his personal knowledge. To a question that at the time of acceptance of money from the plaintif bank as sale consideration what was their status in defendant no. 1, he replied that at the time of receiving advance earnest money against the ofer letter Ex. PW-1/3 he CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 26/67 was a partner in Defendant no. 1. He was partner at the time of filing of the present case in defendant no. 1. He admitted that document Ex. PW-1/3 were signed by him at point X. To a question of informing the court regarding change of status of partnership firm due to retirement of Mrs. Kuldeep Kaur from the Partnership, he replied that he does not remember but he filed suit a suit for possession as a proprietor of the defendant no. 1. To a question that whether he has informed the court where case was pending that the defendant no. 1 Partnership firm become a Proprietorship firm, he replied that he does not remember but he had filed every document as proprietor of defendant no. 1.
45. DW1 in his cross-examination deposed that the defendant no. 1 firm was an unregistered Partnership firm. He did not remember when the Partnership firm was finally converted into Proprietorship firm. He has filed the another suit for possession as mentioned herein above as proprietor some time in the year 1999. He denied the suggestion that the purpose of auction plot i.e suit property was only for banking purpose. To a specific question that whether he has written in his affidavit that plaintif bank had approached the defendant no. 1 for purchase of suit property, can he place on record any document from the plaintif regarding the same, he replied that No. He volunteered that he is the building contractor and construct various buildings on behalf of plaintif bank i.e. Janak Puri, Maya Puri and Fathepuri etc. During the construction of the said building the plaintif bank came to know that he has purchased the property in Safdgarjung in this connection they approach him for the CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 27/67 purchase of space in the said property. All these above said buildings of the plaintif bank were constructed by him during the period of 1977 to 1982. He admitted that before 1977 no building was constructed by him for plaintif bank. He denied the suggestion that there was no relationship exists between defendant no. 1 & 2 and the plaintif bank. He was having current account in H Block Connaught place branch and had obtained 11 lacs loan against property from the plaintif bank.
46. DW1 in his cross-examination admitted that there was no sale/purchase or construction of any building of plaintif bank prior to 1977. He did not remember when the contract for construction of bank building was assigned to him in 1977. He denied the suggestion that the first contract for construction was assigned to him only after he sold the suit property to the plaintif bank. He did not remember if any communication existed prior to his letter dated 08.01.1977 Ex. PW-1/3. He denied the suggestion that no letter of communication prior to Ex. PW-1/3 is placed on record because there is no such letter exist. A specific question put to the witness that no letter disclosing the sale price for sale of suit property was sent by defendant no. 1 to 3 to plaintif bank, to which he replied that defendant no. 1 has not sold the entire property except the ofer letter as Ex. PW-1/3 for the sale of floor area/covered area and that too subjection to permission from defendant no. 4 and the same was rejected by defendant no. 4. To a question that is it correct that he has received Rs. 12.25 Lacs from the plaintif towards sale consideration from the plaintif in terms of Ex. PW-1/4, he replied that in Yes. He has received Rs. 12.25 Lacs as CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 28/67 advance earnest money against the sale of covered area in terms of Ex. DW-1/3 in installments and in respect of Ex. PW- 1/4 he did not know about the said document i.e the internal document of plaintif bank. To a question that has he placed any document on record wherein he has informed the plaintif bank that he is receiving the sale consideration of 12.25 lacs as advance earnest money for sale of structure only, he replied in No. There was oral understanding with the plaintif in respect to receive of advance earnest money of 12.25 lacs and subject to apply for the permission with defendant no. 4 and by way of security handed over physical possession as a licensee to plaintif bank against the said earnest money. To a question that has he placed any document that he is handing over the actual physical possession to the plaintif as a licensee only, he replied that there was no document because of the oral understanding with the bank but there was no possession letter given by him and on oral request of plaintif bank apply for the permission from defendant no. 4.
47. To a question that is it correct that he has filed an application with DDA, Defendant no. 4 for transfer of entire plot/suit property with all rights to plaintif bank, he replied that it is correct that they had moved the application for the permission of area in terms of Ex. DW-1/3. He has not mentioned that any particular constructed area was only to be transferred to the plaintif bank in application moved to the defendant no. 4 for transfer of suit property in favour of plaintif bank. He volunteered that since there was no such column exist in the application form but sale of covered area only in terms of Ex. DW-1/3 and earnest money received only CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 29/67 against covered area as per Ex. DW-1/3. To a question that since he said he had not mentioned in the application because of the reason there is no column exist in the transfer application of DDA does it means that no such provision for transfer of structures exist with the DDA, he replied that the normal procedure of defendant no. 4 the permission obtained by the lessee and lessee have right to dispose of/sale of floor area in the said building. To a question that there is no such provision exist in the DDA where he can seek separate permission for transfer of plot and constructed area thereon, he replied that it is incorrect.
48. To a question that is it correct that he had purchased suit property/plot admeasuring 344.65 sq. meter from DDA and DDA can give permission only for transfer of right vested in plot, he replied that it is wrong. The application Ex. PW-1/D2 has been signed at point 'Z' by him. He does not remember the notice date of auction of plot/suit property whether it is 11.12.1975 or not. He admitted that he has mentioned in his affidavit that he has purchased the suit property in pursuance to the DDA notice dated 11.12.1975. To a question whether he has filed any reply to the DDA after receipt of show cause notice dated 23.09.1986 Ex. DW-1/2, he replied that he does not remember. He denied the suggestion that we have not reply to the said show cause notice. To a question that the DDA had stated on oath before this court that the transfer of the suit property in favour of plaintif bank was rejected/refused for the reason as he has failed to obtain completion certificate in Ex. PW-3/1, he replied that it is incorrect. He admitted that defendant no. 1 to 3 had applied CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 30/67 for completion certificate with DDA/defendant no. 4. He cannot tell the date of moving the application for issuance of completion certificate. He did not remember if the application for issuance of completion certificate was applied to defendant no. 4 prior to moving of application for seeking transfer of suit property in favour of plaintif bank. To a question that DDA vide its letter Ex. PW-3/1 had asked him to deposit charges for excess coverage of 105 Sq. ft. area but defendant no. 1 to 3 deliberately did not deposit the said amount, he replied that there is no excess area of 105 sq. ft. in the said property. He denied the suggestion that he is making false and manipulated statement that there is no excess covered area of 105 sq. ft.
49. To a question that in their letter Ex. PW-3/2 dated 14.11.86 had admitted for deposit of cost for excess covered area 105 sq. ft., he replied that the said letter was signed by his Manager and there was no excess area in the said property that is why defendant no. 4 never raised any demand and lateron DDA/ defendant no. 4 converted the said property from lease hold to free hold without charging any amount and after verification to the site there was no excess area of 105 sq ft. To a question that there are several communication established by him and DDA that there was 105 excess coverage area in the building and now he said in reply above that in 2016, DDA had admitted that there is no excess area in the building is it mean that the document Ex. PW-3/1, 2, 3, 5, and all other communication between regarding excess coverage area is result of fabrication and manipulation by him with connivance with official of DDA, he CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 31/67 replied that the number of communication letters are not signed by him or by his Manager and if defendant no. 4 raised any wrong demand in respect to 105 sq ft excess coverage area and later on changed their stand. There was no excess area. It is for defendant no. 4 to reply the same. The DW-4/X, EX. PW-3/2, Ex. DW-3/4 are letter issued on behalf of defendant no. 1 by their Manger Mr. Katiyal, he identified his signatures at point Y, Z, X respectively. To a question that letter dated 30.7.1983 written on behalf of defendant no. 1 to defendant no. 4 was signed by him or not, he replied that the document acknowledged his signatures at point B and the document is exhibited as Ex. DW-1/D1. To a question that in his pleadings he has not said so that an amount of 12.25 lacs he has received only for sale of structure and not for sale of plot/suit property, he replied that it is a matter of record.
50. To a question that defendant nos. 1 to 3 deliberately did not reply to the show cause notice of defendant no. 4 Ex.DW-1/2 so that the DDA shall move forward and refuse the transfer permission, he replied that it is incorrect and even defendant no. 4, otherwise rejected the application. To a question what does he mean by "otherwise rejected", he replied that the other reasons explained by the DDA, DDA had rejected the permission for transfer. He admitted that he has come to know through the affidavit of plaintif bank the plot in question/suit property has been mutated in the name of plaintif bank. In Para 11 of his affidavit Ex. DW-1/A he is discussing about an oral agreement only. The said agreement was only for purchase of constructed area. To a question that has he informed DDA/ CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 32/67 defendant no. 4 regarding this fact after in receipt of show cause notice Ex. DW-1/2 that, he is only transferring the structure/and not plot/suit property to the plaintif bank, he replied that he felt no need to inform the DDA regarding this transfer of structure and not of plot. He volunteered that there was understanding between defendant no. 1 and plaintif bank in terms of DW-1/3.
51. DW1 in his cross-examination further deposed that he did not remember if any notice prior to notice dated 23.09.1988 Ex. DW-1/2 was received by him from the defendant no. 4, DDA. He did not remember if the defendant no. 4, DDA had sent him any show cause notice regarding violation of clause 4 A of the Lease Deed prior to Ex. DW-1/2. He cannot say since he had not received any notice or letter from DDA prior and after of DW-1/2, therefore, he could not file any such letter on record. He denied the suggestion that Ex. DW-1/2 is manipulated letter in connivance with DDA officials. It is correct that in his letter Ex. DW-1/3 he has mentioned that the contract with the bank for sale of suit property in question become frustrated as the DDA has refused to transfer the property in favour of the plaintif bank. The permission was rejected by DDA for sale of suit property in the year 1985 but show cause notice was given in the year 1988 regarding cancellation of the lease. In the year 1985, the refusal of the DDA was oral. He denied the suggestion that he had planned for cancellation of the sale agreement with the plaintif bank in the year 1985 and sent the letter with Ex. DW-1/3 whereas managed to obtain the letter from DDA in year 1988 as Ex. DW-1/2. DDA did not take any step CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 33/67 for cancellation of lease after 1988 after the letter of cancellation Ex. DW-1/3. He admitted that till today, DDA has not taken the possession of the suit property. He did not give any reply to show cause notice Ex. DW-1/2. After the show cause notice, present suit was filed by plaintif, therefore, DDA has not taken any further steps. He did not give any reply to Ex. DW-1/2 because plaintif bank has already filed the present suit. He denied the suggestion that plaintif bank had filed the present suit prior to show cause notice of DDA Ex. DW-1/2. He denied the suggestion that present suit was filed on 04.01.1988 and has no relation with DDA show cause notice Ex. DW-1/2.
52. DW1 in his cross-examination further deposed that he has not repaid Rs. 12.25 lakhs to the plaintif bank till today. He volunteered that he had given a notice to repay the said amount to plaintif bank but bank refused. The firm M/s Madan and Company, defendant no. 1 is engaged in the business of purchase and construction of property. M/s Madan and Company has purchased only the suit property and no other business has been carried out. He has not informed the court during pendency of the present suit i.e. M/s Madan and Company firm has been converted into partnership firm. He volunteered that he has mentioned in various applications filed before this court. He denied the suggestion that the firm Madan and company was constituted only for the purpose of purchase of suit property for the purpose to construct building and to be sold to the plaintif bank only that is why there is no other business transacted in the said partnership firm. He did not remember that if he has CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 34/67 taken bank loan from the plaintif bank for purchase of land and construction of building thereon. To a specific question that he had taken a loan from the Connaught place branch of the plaintif bank to the tune of Rs. 11 lakhs for purchase and construction of the building of the suit property, he repleid that it is correct that he has taken a loan of Rs. 11 lakhs from Punjab and Sind Bank against purchase of property no. 69, Nehru Place in the name of Private Ltd. Company i.e. Ideal Engineers and financers Pvt. Ltd and the said loan was not against the suit property.
53. DW1 in his cross-examination further deposed that he did not know the terms and conditions of the Lease Deed with DDA because he has purchased the first property i.e. Suit property from DDA. He did not remember whether he had taken the loan prior to purchase of suit property or not. He denied the suggestion that he had taken the abovesaid loan for purchase of suit property. He has not sold any other property to plaintif bank. He denied the suggestion that he has not received any letter terminating the lease Deed qua violation of Clause 4 A of the Lease Deed and thereby only, the DDA has not placed on record any such letter in their written statement, Cross examination or in examination in chief. He denied the suggestion that DDA has never intended to cancel the Lease Deed or refuse to transfer the suit property in favor of the plaintif bank because of violation of Clause 4 A of the Lease Deed.
54. Defendant no.4/ DDA got examined DW4 Sh. S.K. Sharma, who tendered his evidence by way of affidavit Ex.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 35/67 DW4/A. In which he deposed about the case of the defendant no.4/ DDA and relied upon the letter dated 20.04.79, Lease Deed, Show Cause notice dated 12.2.85 & 23.09.86, letter dated 23.3.87, Notification of Transfer of Building activities to MCD, Brochure of Conversion from Lease Hold to Free hold, Complete documents submitted by defendant no. 1 to DDA for conversion from lease hold to free hold (Colly), show cause notice dated 10.3.2017 as Ex. DW4/1 to Ex. DW4/9 respectively.
55. During examination of DW4, it is observed by the court that the paragraph no. 6, 7, 8, 9 & 10 of the affidavit containing the contents of conversion of lease hold property into free hold being beyond pleadings and no such issue has been framed for trial and adjudication. The contents of para 11 containing the facts of conversion to free hold also stands deleted from the affidavit in evidence Ex. DW-4/A.
56. In the cross-examination, DW4 deposed that he has not having any authority letter issued by either by Vice Charmian or commissioner to appear as a witness in this case on behalf of DDA. He has not given any written authority to sign the documents on behalf of DDA for the present case. He admitted that he has also appeared as a witness in this case on behalf of plaintif as PW-3. He had replied all the question put to me by the plaintif as PW-3. He does not have the personal knowledge of the present case. He has knowledge as per record maintained by the DDA. He denied the suggestion that he is deposing falsely on the instructions of defendant no. 1 & 2 since he has not been authorised by the competent CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 36/67 authority to appear as witness. He did not have any written letter or permission of the record brought by him today in the court. He denied the suggestion that he has brought record un-authorisedly and illegally. He cannot show the auction letter whereby the auction was conducted by the DDA of the plot in question as the original record is missing. He has no knowledge whether the plot in question auctioned only for bank purposes. He denied the suggestion that the original file was deliberately misplaced to give advantage to defendant no. 1 & 2. He is Deputy Director of DDA.
57. To a specific question that he has mentioned in his affidavit in para 2 that the defendant no. 1 had sold and transferred the property to the plaintif, what do you understand by word "sold", he replied that he understand from the word Sold and transfer is " Baich Diya. He deposed that letter by which the DDA has denied the transfer permission of the suit property from Defendant no. 1 & 2 to plaintif is not available on record and same is misplaced. He admitted that the reason for rejection of transfer of suit property has been mentioned in the letter Ex. DW4/5 and there is no other reason except that. No demand letter whatsoever has been sent to the plaintif raising demand for making excess coverage of 105 sq ft as mentioned in para 3 of his affidavit. He volunteered that it is the job of MCD. He admitted that the excess coverages what has been mentioned in the para above is compoundable. He has no knowledge of any additional floor area covered as mentioned in para 4 of his affidavit. To a specific question that does he has any office report pertaining to the allegation mentioned CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 37/67 by you in para 4 of his affidavit that the basement of the suit property is used for office purpose and not as parking or storage etc, he replied that the show cause notice to that efect has already been given to Defendant no.1 & 2 and same is already Ex.DW-4/3.
58. DW4 in his cross-examination, further deposed that any property sold by DDA is by virtue of Auction only in case of commercial plots. Generally the lease deed was executed for 99 years but the lease deed in question Ex. PW- 1/2 did not have any mentioning about the period of lease. He admitted that present lease deed was executed by the DDA after receiving the auction money and is not any kind of grant from the DDA. The DDA can cancel the lease or re- enter into the property only if any terms and conditions of the lease deed are breached or violated. The defendant no. 1 & 2 had breached and violated the provision of Clause 4 (a) for which the show cause notice was already served as Ex. DW- 4/4. He admitted that the relevant case filed pertaining to the present suit was created in the DDA in the year 1988 when the present suit was filed. He cannot tell if the dealing hands of the case file pertaining to the suit property was aware about the pendency of the present suit or not. Sh. Gulab Singh was the dealing hand when the application for conversion of lease hold to free hold was moved by the defendant no. 1 & 2. The said application for conversion was approved by Sh. Sada Shiv, Deputy Director. No opinion has been sought from the legal department before approving the application of conversion. The Conveyance Deed dated 7.12.2016 was executed in favour of defendant no. 1 & 2 by CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 38/67 him. He has gone through the record file of DDA before execution of the Conveyance Deed dated 7.12.2016. The suit property alongwith the other areas were transferred from DDA to MCD vide Notification Ex. DW4/6 dated 28.7.1993. The MCD building department would decide about the excess coverage area of the suit property to the extent of 105 sq ft. It is the duty of MCD to issue the completion certificate. He admitted that upon submission of completion certificate issued by the MCD, DDA would consider the transfer of suit property in favour of the plaintif bank.
59. DW4 in his cross-examination, further deposed that the original joint application of plaintif bank and defendant no. 1 & 2 for transfer of suit property is not available with DDA as the original record has been misplaced. The original record was misplaced on or before 1983. The defendant no. 1 & 2 also applied for transfer independently that record was available with the DDA, DDA proceeded on the basis of said original application of defendant no. 1 & 2. The original application shown in the court, photocopy is Ex. DW-4/X1. He cannot tell about the fate of the joint application because original record is not available. He admitted that DDA has proceeded on the basis of original application of defendant no. 1 & 2 Ex. DW-4/X1. He denied the suggestion that the DDA had rejected the transfer of the suit property in favour of the bank without considering or going through the contents of joint transfer application moved by the plaintif and defendant nos. 1 & 2, in fact the transfer was rejected only for non-submission of the completion certificate. He admitted that now as per policy of DDA the suit property can CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 39/67 be converted from lease hold to free hold. He denied the suggestion that he is deposing falsely being an unauthorized person only in order to support the case of defendant no. 1 and 2.
60. Written arguments filed on behalf of plaintif. Sh.Harish Katyal, Ld. Counsel for the plaintif submitted that at the outset the act and conduct of the DDA and its officials are not only malafide but also contemptuous which is apparent on record. The plaintif bank has filed present suit seeking specific performance and same has been pending for last about 30 years and DDA is one of the contesting party despite that a conveyance deed of the suit property executed in favour of defendant nos. 1 and 2 without the notice to the plaintif bank as well as to the court. This fact brought to the knowledge of the court by the plaintif bank and action was initiated by DDA officials for cancellation of the conveyance deed. The conversion from the lease hold to freehold cannot be done except on making charges as per Ex. PW3/1, letter dated 23.03.1987 but the officials of DDA worked in active connivance with defendant no.2 Sh. Lalit Mohan Madan.
61. Sh. Harish Katyal, Ld. Counsel for the plaintif further submitted that during the trial the DDA failed to point out even a single letter where transfer application was rejected due to violation of any terms of the lease deed. The alleged conversion had taken on the basis of false, fabricated and forged documents but no police action has been initiated. It establish the connivance between defendant nos. 1 to 3 with the officials of DDA/defendant no.4.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 40/67
62. Sh. Harish Katyal, Ld. Counsel for the plaintif further submitted that defendant no.1 is a partnership firm at the time of filing of the present suit and defendant nos. 2 and 3 were the partners of unregistered partnership firm but during the pendency of the present suit, defendant no.2 Sh. Lalit Mohan Madan converted the defendant no.1 partnership firm into proprietorship firm as per the documents brought on record with regard to conversion of leasehold to freehold but this fact never disclosed to this court. It is submitted that appropriate inquiry may be envisaged under the provisions of Section 340 Cr.P.C. as well as Section 195 IPC.
63. Sh. Harish Katyal, Ld. Counsel for the plaintif further submitted that the present suit filed by plaintif bank seeking specific performance of the contract of sale/transfer of commercial plot/property bearing No. B, Safdarjung Development Scheme, Community Centre admeasuring 344.65 sq. mts. Defendant no.2 Sh. Lalit Mohan Madan being partner of defendant no.1 had ofered the plaintif to sell the property in question for a total sum of Rs.12,50,000/- together with land and building erected thereon as per the requirement of the bank as per letter Ex. PW1/3 dated 08.01.1977. The ofer was accepted by the plaintif bank and intention was expressed to purchased the entire land and structure for a sum of Rs.12,50,000/- as per Ex. PW1/4, resolution of the Bank dated 30.03.1977. The payment of Rs.12,25,000/- was made as per schedule given and same is admitted by defendant nos. 1 to 3 as a receipt of sale consideration. The construction was carried out as per requirement of plaintif bank. The suit plot was auctioned for the purpose of banking by the DDA as per Ex. PW3/6.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 41/67
64. Sh. Harish Katyal, Ld. Counsel for the plaintif further submitted that as per lease deed 50% unearned increase rent to be paid to defendant no.4 for transfer and plaintif bank agreed for the said payment but the DDA never informed about the actual amount of unearned increased rent. The original rent deed was executed by DDA in favour of defendant nos. 1 to 3 Ex. PW1/2 although 95% of the sale consideration price accepted by defendant nos. 1 to 3 to the tune of Rs.12,25,000/-. It is submitted that as per Ex. PW1/D, the plaintif and defendant nos. 1 to 3 moved joint application for seeking transfer of lease hold rights of the suit plot. The pre condition was also ofered to be fulfilled by the plaintif vide Ex. PW3/3. The defendant no.4/DDA raised objection because defendant nos. 1 to 3 miserably failed to obtained completion certificate. However, defendant admitted the excess coverage area vide letter dated PW3/5 (Ex. DW1/D-1).
65. Sh. Harish Katyal, Ld. Counsel for the plaintif further submitted that it is admitted by defendant no.4 that plaintif used to pay lease rent vide various receipts ex. PW3/6 and in the MCD record mutation has already been taken place in the name of plaintif bank and bank used to pay municipal tax regularly. The lease hold right never transferred by DDA in favour of plaintif bank because of the connivance of the DDA officials and defendant nos. 1 to 3. Consequently, a legal notice Ex. PW1/5 was served upon them and present suit filed.
66. Sh. Harish Katyal, Ld. Counsel for the plaintif pointed out that the completion certificate could not be CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 42/67 granted due to the fact that defendant nos. 1 to 3 did not pay the excess coverage area charges of 105 sq. feet but the building activities already transferred to defendant no.5/MCD. Therefore, now there is no impediment for issuance of completion certificate. It is admitted that a joint application was filed and same has not been rejected till 23.03.1987 or intimated to the plaintif bank. The letter dated 31.08.1985 Ex. PW1/D-1 is a manipulated document by defendant nos. 1 to 3 with officials of defendant no.4/DDA.
67. Sh. Harish Katyal, Ld. Counsel for the plaintif in support of his contentions relied on following judgments:
(1). A.B. Singh vs. Chunnilal Sawhney, 2011 (9) AD (Delhi) 235.
(2). S. Kaladevi vs. V.R. Somasundaram & Ors., 2010 (5) SCC 401.
(3). Suraj Lamp & Industries Pvt. Ltd. vs. State of Haryana & Anr., 2012 (1) SCC 656.
(4). State of Uttranchal & Ors. vs. M/s. Khurana
Brothers, 2010 (11) SCALE 348; AIR 2011 SC
224.
(5). Assn. Of Leasing & Financial Service
Companies vs. Union of India, (2011) 2 SCC 352.
(6). Dharam Naika vs. Rama Naika, 2008 AIR (SC) 1276; 2008 (14) SCC 517.
68. Sh. Harish Katyal, Ld. Counsel for the plaintif further submitted that the suit may be decreed against the defendant nos. 1 to 3 and defendant no.4 may be directed to transfer the plot with all lease hold rights in favour of plaintif.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 43/67 The plaintif is ready and willing to pay conversion charges whatever it may be and also conversion of lease hold rights into freehold rights.
69. Written arguments also filed on behalf of the defendant no.4/ DDA. Ld. Counsel Sh. Neeraj Aggarwal submitted that DDA had sold in a public auction plot No. B in Block -AB, Community Centre at Safdarjung Development Area having a total area of 344.65 sq. mtrs. to defendant no.1. Subsequently, the answering defendant came to know that an application filed for transfer of property in the name of plaintif bank as has been sold and transferred to by the defendant no.1. However, no prior sale permission as required under the lease deed dated 02.06.1977 has been obtained by the defendant no.1 from the DDA. Therefore, sale was not made regular. The knowledge of mutation in the name of plaintif bank in the MCD has been denied.
70. Sh. Neeraj Aggarwal, Ld. Counsel for the defendant no.4/DDA admitted that defendant no.1 has failed to obtained completion certificate of the building constructed over the plot from the building department of DDA, therefore, no sale permission was granted. Therefore, MCD could not have been mutated in the name of plaintif bank. As per Clause 4 (a) of the lease deed, defendant no.1 cannot sell, transfer, assign or otherwise part with the possession of the whole or any part of the commercial plot except with the previous consent in writing of the lessor/DDA. The defendant no.1 has constructed excess area of 105 sq. feet which was not sold and even neither demolished nor regularized. There CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 44/67 is illegal and unauthorized construction of the building. The defendant nos. 1 to 3 also have to pay for the additional floor areas covered without permission. Defendant no.1 also constructed basement and unauthorizedly used it as an office instead of parking or storing as a machine room.
71. Sh. Neeraj Aggarwal, Ld. Counsel for the defendant no.4/DDA further submitted that vide letter dated 23.03.1987, defendant no.1 was informed that the sale permission of the plot cannot be granted as they failed to obtained completion certificate of the building. Infact a show cause notice was also issued on 12.02.1985 when misuse was found in the basement. The plaintif bank ought to have know that it could not purchase the property without obtaining the consent from the DDA as per lease deed. The DDA has right to cancel the plot and re-enter the property. It is further submitted that the regularization of the excess area was to be done by MCD. As per new policy of DDA, conversion from lease hold to freehold, there is no need of D-Form along with 50% unearned increase charges or other documents.
72. Sh. Neeraj Aggarwal, Ld. Counsel for the defendant no.4/DDA further submitted that in the month of July, 2016, lessee can apply for freehold. As per new policy of DDA necessity of obtaining completion certificate, permission from DDA before any sale, regularization of 105 sq. feet excess area is not required for any further action by DDA. He further pointed out that during the pendency of the suit, the suit property was converted from leasehold to freehold on the application of defendant no.1 as per policy of DDA. The CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 45/67 defendant no.1 has stated in his application for conversion that original lease deed has been lost and he has lodged a false FIR/NCR dated 05.06.2015. It was also got published in 'Sunday Express' and Hidi newspaper 'Jansatta'. Now it has come to the knowledge that original lease hold papers were deposited by defendant no.1 and committed a fraud, misrepresentation and concealment of material facts, therefore conveyance deed is liable to be revoked as per terms and conditions. A show cause notice dated 10.03.2017 was sent to defendant no.1. It is submitted that in view of availability of clauses in conveyance deed regarding discovery of misrepresentation, misstatement at any stage, the conveyance shall come void at the option of the DDA, show have have right to cancel and forfeit the consideration. Finally it is submitted that the suit is liable to be dismissed.
73. Defendant nos. 1 and 2 filed written arguments on 14.09.2017. Although time was granted till 04.09.2017. The arguments also not bearing the receipt of supply of copy to other parties including plaintif and defendant no. 4.
74. In the written arguments filed on behalf of defendant nos. 1 and 2, Ld. Counsel Sh. Mukesh Vats firstly stated the brief facts. It is mentioned in the written arguments that in the year 1976, plaintif bank had approached the defendant no.1 and wanted to take on rent large portion of constructed area of the suit property and a proposal was given vide letter dated 08.01.1977. In March, 1977, plaintif bank again approached the defendant no.1 and showed the interest in purchasing a portion of the CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 46/67 constructed area of the suit property. Accordingly, defendant no.1 gave another proposal vide letter dated 15.03.1977. In both cases permission by DDA was a condition precedent. No agreement to sell, oral or written, was ever executed except exchange of letters of proposal and counter proposal. The defendant no.1 proposed to ofer the sale of aforesaid portion of constructed area of the premises for a sum of Rs.14,44,150/- subject to the condition of transfer being permitted by the DDA, the superior lessor. The transfer of possession to the plaintif bank was purely contingent on the permission being granted by DDA.
75. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that in pursuance to the aforesaid proposal, plaintif bank was put in possession in the aforesaid portion of the constructed premises for renovation and a sum of Rs.12,25,000/- in installments was advanced by plaintif bank to the defendant no.1 over the years for using the constructed premises. The plaintif bank was permitted to use the premises in terms of letter dated 08.01.1977 and no in terms of letter dated 15.03.1977. It is further stated that over the years, an understanding was arrived between defendant nos. 1 &2 and the plaintif that a joint application dated 09.02.1979 filed with the DDA seeking permission to transfer the possession as agreed upon of the portion of the constructed premises.
76. It is stated that admittedly the superior lessor never granted permission for transfer of the construed premises by defendant no.1 to the plaintif within first three CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 47/67 years of the joint application. No communication took place between plaintif and defendant no.1 during said period. As per mutual understanding of the parties, plaintif was permitted to continue using the agreed portion of the constructed premises. Later the DDA had issued a show cause notice dated 23.09.1986 alleging breach of terms and conditions of the lease deed especially clause 4 (a) and threatening to re-enter the property clearly implying that the superior lessor had refused the permission for transfer of the property under clause 4 of the perpetual lease deed.
77. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that the arrangement for transfer of possession of premises by defendant no.1 in favour of plaintif being contingent had already become void and frustrated and even expired by efflux of time. Defendant no.1 vide letter dated 31.08.1985 clearly informed to the plaintif bank that arrangement between the parties could not be crystallized and contract frustrated and stood rescinded and defendant nos. 1 and 2 are ready to repay the amount to the plaintif with interest and demand as per letter dated 08.01.1977.
78. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that the DDA had issued show cause notice dated 23.09.1986 threatening to re-enter in view of the breach of terms and conditions of the lease deed. Eventually, the DDA rejected the said joint application. The plaintif bank during the pendency of the present suit miserably failed to point out even a single letter where it was CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 48/67 mentioned that transfer application was ever considered by DDA. The plaintif bank has filed suit for specific performance. The suit is absolutely frivolous, baseless and liable to be dismissed. Even otherwise it is patently barred by limitation. Legal notice served by defendant nos. 1 and 2 on 12.01.1998 for calling upon the plaintif bank to handover the vacant and peaceful possession of the suit premises but plaintif bank continuing in illegal and unauthorized occupation and failed to vacate and handover the possession. The defendant nos. 1 and 2 had filed a suit for possession bearing no. 78/98, which is stayed by Hon'ble High Court subject to the outcome of the present suit.
79. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that it is apparent that permitting to use the premises and allowing the possession to the plaintif by the defendant was pursuant to the letters of defendant no.2 dated 08.01.1977 and 15.03.1977 and mutual understanding between the parties was contingent in nature entirely depending upon the permission to be granted by superior lessor/DDA. The said arrangement become void and frustrated in terms of Section 56 of the Contract Act. The retention of possession by the plaintif became illegal as pointed out to the plaintif bank.
80. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that The plaintif bank did not vacate the constructed portion and with intention to grab filed the present suit. The said agreement/arrangement/ understanding for sale and transfer of constriction portion of CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 49/67 the suit premises by the defendant no.1 to the plaintif bank is nonest and void ab initio, frustrated and expired by efflux of time and even against the public policy. The defendant nos. 1 and 2 kept protecting the suit property from being taken over by the DDA after determining the lease on account of conduct of the plaintif bank, who continued to be in unauthorized use and occupation of the large portion of the property. Defendant nos. 1 and 2 eventually got the entire property converted into lease hold to freehold after paying exorbitant conversion charges while plaintif bank continued to unauthorizedly enjoy the possession of the major portion of the constructed premises on the suit property without paying anything.
81. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that eventually DDA executed the conveyance deed in favour of the defendant no.1 as absolute owner of the suit property. The plaintif bank is liable to pay damages and mesne profits to the defendant nos. 1 and 2 for unauthorized use and occupation of the same. The plaintif bank raised due and cry issue and objection before the Court with regard to the conveyance deed, then DDA officials summoned and DDA started action for cancellation of conveyance deed. The defendant nos. 1 & 2 approached the Hon'ble High Court to challenge the action of DDA and Hon'ble High court has been pleased to restrain the defendant n.4 from cancellation of conveyance deed.
82. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that the plaintif has taken the floating stand during the trial. He has pointed out paras of CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 50/67 cross-examination of DW1 Sh. Lalit Mohan Madan by the Counsel for the plaintif and reproduced the cross- examination. The defendant no.1 in a public auction conducted by defendant no.4/DDA acquired the lease hold rights of the suit property vide lease deed dated 13.06.1977 Ex. PW1/2. Ld. Counsel for the defendant nos. 1 and 2 referred to the clause 4 (a) and referred to the judgment of Satish Kumar vs. Karan Singh AIR 2016 SC 737 where the decree of specific performance held not to be passed and highlighted paras 13, 14, 15 and 16 of the judgment.
83. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that defendant nos. 1 & 2 and the plaintif without realizing that no transfer of possession or any arrangement could have been entered into without prior permission from DDA, therefore, jointly applied for permission on 09.07.1979 Ex. PW1/5. Defendant no.4/DDA did not grant permission and alleged oral agreement expired and become unenforceable. Defendant no.4 issued show cause notice dated 12.02.1985, consequently defendant no.1 vide letter dated 31.08.1985 reminded the plaintif that the purported agreement stand frustrated and even ofered to pay back the money as was received by defendant no.1. Defendant no.4 vide show cause notice dated 23.09.1986 while rejecting the application for permission for sale threatened to determine the lease for breach of clause 4 (a) of the lease deed. The defendant no.1 had taken the loan from Connaught Place branch of the plaintif bank for purchase and construction of suit property admitted in the cross-examination by PW1.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 51/67
84. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 further stated that the plaintif has not proved Board Resolution dated 30.03.1977 where the ofer of sale was accepted with regard to the constructed portion of the property. No GPA of the plaintif bank in favour of Sh.Sampuran Singh proved, who had filed the joint application dated 09.02.1979 with DDA Ex. PW1/D-2. Ex. PW1/D-2 joint application dated 09.02.1979 does not mention the transfer of possession to the plaintif bank. Ld. Counsel for the defendant nos. 1 and 2 further relied on judgments of State Bank of Travancore vs. Kingston Computers (I) P. Ltd. 2011 SCC (11) 524; Nandkishore Lalbhai Mehta vs. New EraFabrics Pvt. Ltd and Ors (2015) 9 SCC 755; Dalsukh M. Pancholi vs. The guarantee Life and Employment Insurance Co. Ltd and Ors. AIR (34) 1947 PC 182; M. Meenakshi and Ors. vs. Metadin Agarwal (d) by LRs and Ors (2006) 7 SCC 470; Chandnee Wadya Vati Madden vs. C.L. Katial AIR 1964 SC 978; M/s. Spring Valley Finance & Trade Ltd vs. Parkash Kaur (d) Thr. LRs and Another Civil Appeal No. 3903 of 2013; M.L. Devender Singh and Ors. vs. Ayed Khaja (1974) I SCR 312; Sarina Siddiqui vs.A. Ramalingam, (2015) I SCC 705; Jai Narain Parasrampuria (Dead) and Ors. vs. Pushpa Devi Saraf and Ors (2006) 7 SCC 756; K. Prakash vs. B.R. Sampath Kumar (2015) 1 SCC 597; Rajinder Kumar vs. Kuldeep Singh & Ors. (2014) 15 SCC 529; Man Kaur (dead) by LRs vs. Hartar Singh Sangha decided by Apex Court on 05.10.2010.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 52/67
85. Sh. Mukesh Vats, Ld. Counsel for the defendant nos. 1 and 2 finally submitted that plaintif is not entitled for the relief of specific performance in any eventuality. The plaintif bank has illegally enjoyed possession of the property for more than thirty years without paying any rent. Admittedly no evidence has been led to demonstrate that the plaintif has sufered any damages so as to become eligible to claim compensation. Therefore, suit is deserved to be dismissed.
86. I have perused the entire material on record and my findings on issues are as under:
ISSUE NOS. 1 & 287. Issue nos. 1 and 2 are inter connected, therefore, taken simultaneously. I have discussed in detail herein above the evidence led by both the parties. The evidence of the parties crystallized the fact that DDA had issued a public notice in daily newspaper for auction of plot No. B, Safdurjang Community Centre, New Delhi ad-measuring 344.56 sq. meters on 11.12.1975. The defendant no.1 M/s. Madan & Co. participated in the auction and becomes successful bidder. The possession of the plot was taken on 12.05.1976 and a lease deed was executed between defendant no.4/DDA and defendant nos. 1 to 3 on 08.06.1977. It is admitted case of the parties that vide Ex. PW1/3 letter dated 08.01.1977, the defendant no.1 M/s. Madan & Co. made an ofer for opening a branch on rent and mentioned all the details to the plaintif bank. All the facilities available for running and operating a CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 53/67 branch of plaintif bank was also highlighted by the defendant nos. 1 to 3. A loan of Rs.3 lacs was sought from the plaintif bank for construction for the portion to be rented out on concessional rates. The status of construction was also made.
88. It is further admitted case of the parties that on 15.03.1977 Ex. PW1/3, defendant no.1 again issued a fresh ofer in which admitted that the suit plot is meant for banking. The significance features were also highlighted. The lease condition was also mentioned that the transfer would be allowed on payment of 50% increase of the cost. It is further mentioned that initially Rs.9 lacs would be accepted at the time of acceptance of ofer, balance Rs.2 lacs on completion of building, Rs.1 lac on handing over the possession and balance at the time of registration of sale deed. It is further mentioned that building plan as approved by the DDA was also enclosed with the letter. This letter established the crystal clear ofer for purchase of the entire building. It is further admitted case of the parties that plaintif bank vide Ex. PW1/4, letter dated 30.03.1977 accepted the ofer of the defendant nos. 1 to 3 Ex. PW1/3. It is further admitted case of the parties that no agreement executed between the parties for sale and purchase of the suit property. However, Ex. PW1/3 letter of the defendant nos. 1 to 3, accepted by the plaintif bank vide Ex. PW1/4 contains all the terms and conditions and all the specifications also mentioned in Ex. PW1/3. In my considered opinion, the letter Ex. PW1/3 fulfill all the ingredients of a valid contract between the parties as per Section 10 of the Contract Act.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 54/67
89. It is admitted case of the defendant nos. 1 to 3 that out of total agreed sale consideration of Rs.12,50,000/-, a sum of Rs.12,25,000/- paid by the plaintif and accepted by defendant nos. 1 to 3. The plaintif bank and defendant nos. 1 to 3 in furtherance to the oral agreement/understanding with the intentions of sale and purchase of the suit property applied to the DDA/defendant no.4 as per Ex. PW1/3 for transfer of the suit plot in the name of plaintif bank. It is admitted by the defendant nos. 1 to 3 that the original lease deed remained in the possession of plaintif bank. It is further brought on record and proved that the defendant nos. 1 to 3 had written a letter to Vice Chairman DDA/defendant no.4 Ex. PW3/3 dated 19.03.1983 for transfer of suit plot. In this letter defendant nos. 1 to 3 admitted that they negotiated for the sale of plot with the Punjab and Sind Bank and vide letter dated 23.05.1978, plaintif bank intimated to DDA for interest in the purchase. This letter further established on record that an application filed before the DDA on 15.02.1979. This letter further mentioned that the additional area of 105 sq. feet required extra payment to be made to DDA. The letter Ex. PW3/5 dated 10.09.1983 further established that amount was sought to be deposited for the extra coverage of 105 sq. feet by defendant nos. 1 to 3.
90. The stand taken by Ld. Counsel for the defendant nos. 1 to 3 that they made ofer to let out the constructed portion to plaintif bank on rent is misconceived and contrary to the plea taken in the pleadings as well as the documents discussed hereinabove. I do not find any merit in the contention of the Ld. Counsel for the defendant nos. 1 to 3.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 55/67 The defendant nos. 1 to 3 ofered for sale of entire building which was accepted by plaintif bank and thereafter a joint application Ex. PW1/D-2 dated 07.02.1979 filed for transfer to DDA. Even letter Ex. PW3/3 and Ex. PW3/5 established that the process was also sought to be accepted for deposit of excess coverage of 105 sq. feet. Not only this, as per Ex. DW4/X letter dated 04.04.1987, defendant nos. 1 to 3 also written to the DDA for 'No Objection Certificate' for sale of the plot. It is further corroborated by the letter Ex. DW1/D-1 dated 30.07.1983, which was written by the partners Sh. Lalit Mohan Madan of defendant no.1 to DDA for early action and asking the premium to be deposited for excess coverage area of 105 sq. feet.
91. Further more, Ex. DW1/3 is the letter of defendant no.2 Sh. Lalit Mohan Madan to the plaintif bank where it is admitted that they entered into agreement to sell with the plaintif bank. However, the pleas taken now in the year 1985 that permission is not coming forward, therefore, contract is frustrated. A show cause notice dated 23.09.1988 Ex. DW1/2 proved on record sent by DDA to the defendant nos. 1 to 3 with regard to violation of terms and conditions of clause 4 (a) of the lease deed, which established that the matter of transfer remain pending for about 10 years. As per record, plaintif bank on 16.07.1987 served a notice to defendant no.4/DDA under Section 53 B of DDA Act Ex. PW1/5, where all the facts have been explained with regard to sale of the suit plot and payment of Rs.12,25,000/- to the defendant nos. 1 to 3 out of final consideration of Rs.12,50,000/-. As per record, no reply produce by DDA to said legal notice of plaintif bank.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 56/67
92. It is pertinent to mention here that the vital fact established on record is that the original file of DDA pertaining to the suit plot has misplaced and untraceable. PW3 Sh. S.K. Sharma appeared in witness box, whose testimony discussed herein above. PW3 Sh.S.K. Sharma admitted that the original file started in the year 1973 has misplaced and is not traceable . In the year 1983, the file was reconstructed. PW3 admitted that the 'No Objection Certificate' for plot in question and extra coverage area was applied by defendant nos. 1 and 2 vide letter dated 14.11.1986 Ex. PW3/2. It is further admitted on record that there is no specific final order passed by defendant no.4/ DDA with regard to determination of lease and taking over the possession of the suit plot from the plaintif bank. The plaintif bank continued in the possession since the understanding/oral agreement between the plaintif bank and defendant nos. 1 to 3. Show cause notice Ex. DW1/2 dated 23.09.1988 issued by defendant no.4/DDA to the defendant nos. 1 to 3. However, it is proved on record that plaintif bank already served a legal notice on 16.07.1987. Prior to it, Ex. DW4/4 was issued by defendant no.4/DDA to defendant no.1. However, nothing brought on record that after complying the principles of natural justice, DDA has taken the final decision and no final order passed by DDA proved on record.
93. It is further admitted by DDA that the original record is missing. The defendant no.4/DDA taken the stand that there is a breach of Clause 4 (a) of the terms and conditions of the lease. Let us peruse the clause 4 (a) , which is reproduced as under:
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 57/67 "the lessee shall not sell, transfer, assign or otherwise part with possession of the whole or any part of the commercial plot except with the previous consent in writing of the lessor which he shall be entitled to refuse in his absolute discretion.
Provided that such consent shall not be given for a period of 10 years from the commencement of this lease unless in the opinion of the lessor exceptional circumstances exist for the grant of such consent.
Provided further that in the event of the consent being given, the lessor may impose such terms and conditions as the thinks fit and the lessor shall be entitled to claim an recover a portion of the unearned increased the value then the difference between the premium paid and the market value of the plot at the time of sale, transfer, assignment or parting with the possession the amount to be recovered being 50% of the unearned increase and the decision of the lessor in respect of the market value shall be final and binding.
Provided further that the lessor shall have the preemptive right to purchase the property after deducting 50% of the unearned increased as aforesaid."
94. The Clause 4 (a) puts a bar on sale, transfer, assignment or part with the possession of the property. The CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 58/67 plaintif bank and defendant nos. 1 to 3 initiated the process and intimated the defendant no.4/DDA and filed a joint application on 15.02.1979. The DDA officials sit on the application for about almost 9 to 10 years and as per record and no final order has been passed with regard to rejection of the said joint application and the ground taken are non submission of completion certificate and excess coverage area. Whereas the documents on record of DDA established that parties were approaching repeatedly for deposit of the premium for regularization of the excess coverage area but officials of defendant no.4 failed to take timely decision, which resulted non issuance of completion certificate. Meanwhile it is admitted case of the parties that building activities were transferred to MCD. There is no communication given by defendant no. 4/DDA either to the plaintif bank or to defendant nos. 1 and 2 that they are entering into a contract of agreement to sell and DDA had any objection.
95. It is pertinent to mention here that the suit plot was auctioned for the purpose of bank. Plaintif's bank branch has been operating at the suit plot for the last 30 years. It is further admitted by the defendant nos. 1 & 3 that they are not the banker. The DDA officials instead of applying the principles of natural justice and process the application either to reject or allow, taken a contrary stand. The terms and conditions of Clause 4 (a) only implies that 50% unearned increase charges to be charged for such transfer. The plaintif bank had already willing and expressed readiness to deposited the 50% unearned increase charges but DDA CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 59/67 officials failed to take any final decision in this regard. In these peculiar circumstances of the case, in my considered opinion, the show cause notice dated 23.09.1988 and 23.09.1986 when failed to culminate into a final order with respect to determination of lease or entering into the suit building, a mere show cause has no legal consequences.
96. In the light of above discussion, in my opinion the defendant nos. 1 to 3 failed to establish even a single ingredient of Section 56 of Indian Contract Act. The agreement entered between the parties is not void as there is no act of impossibility to fulfill the respective part of performances by the plaintif bank and the defendant nos. 1 to 3. No advantage can be derived from the inaction on the part of officials of the DDA for the last more than 30 years. Now coming to the judgments relied by the Counsel for the defendant nos. 1 to 3. I have considered the judgment of Nandkishore Lalbhai Mehta (Supra). In the cited case, it was a contingent agreement and depending upon the consent of the labourers but the labourers refused to give the consent. However, in the present case, both the parties applied for transfer to the defendant no.4/DDA. However, the DDA neither allowed to pay the excess charges nor issued the completion certificate and never decided the application for the transfer, therefore, this judgment is distinguishable in the present facts and circumstances of the case.
97. The other judgment cited is Satish Kumar (Supra). In the cited case, the defendant died, who has agreed to sell a plot to the plaintif. The LRs contested the CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 60/67 receipt cum agreement between the parties. However, in the present facts and circumstances of the case, the defendant nos. 1 to 3 never disputed the Ex. PW1/3, the understanding/oral agreement/the, Ex. PW1/3 written letter of agreement. Both the parties have applied for transfer to DDA on 07.02.1979. Therefore this judgment is distinguishable in the present facts and circumstances of the case. The other judgment cited is M. Meenakshi and Ors. (Supra). This judgment is also distinguishable because the plaintif bank approached and take legal action immediately when defendant no.4/DDA initiated and served show cause notice to defendant nos. 1 to3. Although the original record was found missing later from the office of defendant no. 4. There is no delay on the part of plaintif bank.
98. Now coming to the judgments cited by the plaintif bank. I gone through the judgment of A.B.Singh (Supra) passed by our own High Court. In this case DDA has refused to grant sanction. In detail it has been discussed that agreement to sell is not violative of Section 23 of Indian Contract Act and there is no absolute bar in the lease deed against transferring the property during the period of 10 years. The suit for specific performance is a discretionary relief and ought not to be granted in view of Section 20 of the Act. In this case also defendant contended the similar pleas. In my considered opinion, the present facts squarely covered by judgment of A.B.Singh (supra). Therefore, keeping in view the principle of law in the present facts and circumstances of the case, specific performance in the facts of the present case cannot be denied because of the reason CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 61/67 that defendant nos. 1 to 3 entered into a contract with open eyes knowing that it is possible that permission to sell the suit property may not be granted since 10 years had not expired since the date of execution of the lease deed with the DDA. There is no misleading facts between the parties. The defendant nos. 1 to 3 were expected to get the necessary permission from the DDA by showing exceptional hardship and merely because permission was not granted cannot mean that plaintif bank is to be blamed.
99. In the present case, defendant no.4 failed to prove any final order of rejection of the joint request of both the parties for grant of permission. The plaintif bank at no point of time is at fault. They were willing to deposit each and every charge, regulation fees and 50% unearned increase charges. It is the DDA officials who failed to take call in time. It is pertinent to mention here that as per Ex. PW1/3, about 98% of the agreed sale price given by plaintif bank to the defendant nos. 1 to 3 and they accepted the same. The remaining part performance has to be performed by the defendant nos. 1 to 3. Now they cannot raise hand and blame DDA for their inaction. The plaintif bank always remain willing and ready to perform their further part performance by handing over the remaining sale consideration to the defendant nos. 1 to 3 to the tune of Rs.25,000/-.
100. It is further admitted on record that the possession of the suit plot was transferred by defendant nos. 1 to 3 to the plaintif bank and they continued after construction of the building as suitable for running a bank CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 62/67 branch. The facts of the present case shows that plaintif bank has a complete right to the property in terms of doctrine of "part performance" under section 53 A of the Transfer of Property Act, 1882 in as much as there is an agreement as per Ex. PW1/3, a letter written by defendant nos. 1 to 3 themselves to the plaintif bank. Thereafter, the construction was carried out as per specifications of a bank and possession always remain with the plaintif bank. The plaintif bank always ready and willing to perform their part of duty of payment of remaining about 2% of the sale consideration and always waiting the permission from the DDA.
101. It is pertinent to mention here that during the pendency of the present suit, the defendant nos. 1 to 3 and defendant no.4/DDA themselves pleaded before the court that in December, 2016, the defendant no.4/DDA on the request of Sh. Lalit Mohan Madan - defendant no.2, became the sole proprietor of defendant no.1 applied for conversion of suit property from lease hold to freehold and the same has been allowed. In these peculiar circumstances, the impediment of DDA permission and bar of Clause 4(a) of the lease deed automatically vanishes by the acts and deeds of defendant nos. 1 to 3 and defendant no.4. However, it is a totally diferent matter why and in what circumstances, the defendant no.4/DDA allowed such conversion from leasehold to freehold during the pendency of present suit.
102. On the basis of above observation and discussion, issue nos. 1 and 2 are decided in favour of plaintif bank and against the defendant nos. 1 to 3.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 63/67 ISSUE NO.3 (RELIEF)
103. On the basis of findings of issue nos. 1 and 2, the plaintif is entitled to a decree of specific performance as understanding/oral agreement/Ex. PW1/3 letter dated 15.03.1977 of defendant nos. 1 to 3 in regard to the suit land and property bearing Plot No. B, Safdurjang Community Centre, New Delhi, ad-measuring 412 sq. yds. (344.05 sq. meter) including the constructed building. In the peculiar circumstances, the DDA has granted permission for conversion of suit property from lease hold to freehold to defendant nos. 1 to 3 and already documents to this efect have been executed by defendant no.4/DDA in favour of defendant no.2 Sh. Lalit Mohan Madan, therefore, now the bar of clause 4 (a) of the lease deed is no impediment. The plaintif bank is directed to pay the remaining part sale consideration of Rs.25,000/- within 15 days from the date of judgment to defendant nos. 1 to 3. Thereafter, within three months, the defendant nos. 1 to 3 are directed to execute sale deed in favour of plaintif bank as property stands converted into freehold. Further, the plaintif bank is directed to pay all the conversion charges or any other due or charges which were paid by defendant nos. 1 to 3 to the defendant no.4/DDA for conversion from leasehold to freehold or to be paid to DDA.
104. In alternative, I direct the defendant no.4 to levy all the charges and recover all the dues for issuance of completion certificate and any other charges due in respect of suit property bearing Plot No. B, Safdurjang Community CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 64/67 Centre, New Delhi, ad-measuring 412 sq. yds. including the constructed building and grant the permission if required under clause 4 (a) of the lease deed on payment of 50% unearned increased charges by the plaintif. Plaintif bank shall pay the remaining sale consideration of Rs.25,000/- to the defendant nos. 1 to 3. Thereafter, DDA officials are directed to execute lease deed in favour of the plaintif bank within three months or DDA shall executed conveyance deed in favour of plaintif bank and the conversion charges already paid by defendant no.2 shall be paid by plaintif bank to defendant no.2 because properties stand freehold as per stand of DDA. The above all directions shall be completed within three months from the date of judgment. In alternative since the plaintif bank is in well settled possession and operating branch for the last 30 years is entitled for damages to the tune of present market value of the suit property along with pendentelite and future interest till realization @ 8% per annum from the defendant nos. 1 to 3.
105. The plaintif is entitled for a decree of perpetual injunction restraining the defendant nos. 1 to 3 from negotiating, selling, transferring, assigning or parting with the suit property to any body else other than the plaintif bank or applying for permission to sell to anybody other than the plaintif with the defendant no.4. The plaintif is also entitled for decree of mandatory injunction directing the DDA not to grant permission for sale of suit property to anybody other than the plaintif bank.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 65/67
106. The plaintif is also entitled for cost of Rs.10,000/- from the defendant nos. 1 to 3 and cost of Rs.10,000/- from the defendant no.4/ DDA.
107. Before parting with the present case, it is pertinent to mention here that the facts and circumstances with regard to missing of original original record from the office of DDA and till today no material has been brought on record regarding the action taken against the guilty officials. During the pendency of the present suit, in a clandestine manner official of defendant no.4/ DDA and defendant no.2 Sh.Lalit Mohan Madan tried to circumvent the present proceedings when the conversion application of the defendant no.2 was allowed by the DDA officials without proper verification especially in the circumstances when DDA is contesting the present case. The original lease deed was not produced by Sh.Lalit Mohan Madan and no eforts have been made for the verification of the same. There appears grave suspicion and collusion between the officials of defendant no.4/DDA and defendant no.2 Sh.Lalit Mohan Madan to defeat the present suit. The acts and deeds of officials of defendant no.4/DDA and defendant no.2 Sh. Lalit Mohan Madan prima-facie appears to attract the provisions of Indian Penal Code. Therefore, a request letter be sent to Director, CBI to carry out inquiry/investigation for commission of criminal ofences, if any and to take appropriate legal proceedings against the real culprits. A letter be sent along with a copy of judgment to Director, CBI.
CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 66/67
108. Decree sheet be prepared accordingly.
109. File be consigned to Record Room.
Announced in the open court today the 20th September, 2017.
(Sanjay Kumar) ADJ-02,West/Delhi 20.09.2017 CS No. 18/17/88 (New No.612697/16) Punjab & Sind Bank vs. M/s. Madhan & Co. & Ors. 67/67