Indian Kanoon - Search engine for Indian Law

27. It is also the contention of the learned Senior Counsel that OS No 5649 of 1997 was filed by the first defendant- society against the plaintiff for a perpetual injunction to restrain the plaintiff in the present suit from interfering with the possession of the property by the society and to restrain the plaintiff herein from proceeding with the construction. In the suit, the parties have settled the dispute amicably and filed a compromise petition, the trial court has accepted the compromise petition subject to payment of court fee. However, the plaintiff has failed to pay the court fee to draw a decree based on the terms of the compromise and hence the plaintiff cannot be permitted to file a suit for negative declaration.

28. According to him, even if the plaintiff has acquired a right under the compromise petition, without getting its right crystallized by filing a suit for specific performance of the contract in the manner known to law, the plaintiff cannot maintain a suit for negative declaration to declare that the sale deed executed by the first defendant-society in favour of the second defendant is not maintainable. He contends that as such, filing of such a suit is contrary to the judgment of the Hon'ble Supreme Court in the case of SARDESH ORES (P) LTD vs HEDE AND COMPANY [(2007) 5 SCC 614]. He further submits that when the suit for negative declaration is not maintainable, the plaintiff is also not entitled for perpetual injunction, since under ExP55, the plaintiff has secured possession of only an area of 5100 sqft and the remaining extent of the land, even according to the plaintiff, it is in possession of other agreement holders. When the other agreement holders having not come before the court and when the plaintiff has not filed the suit on behalf of the remaining agreement holders, either as a power of attorney holder or in any other capacity, the plaintiff cannot claim that the plaintiff company is in possession of the same. He further submits that PW1, the then managing director of the plaintiff-company, in his cross-examination has admitted that the plaintiff is not in possession of the suit schedule property. If the plaintiff is not in possession of the suit schedule property, either on the date of filing of the suit or subsequent to the institution of the suit, no court can grant a decree for perpetual injunction. In the circumstance, he requests the court to dismiss the appeal.

Having heard the learned counsel for the parties, we have to consider the following points in this appeal:

i) Whether the plaintiff being an agreement holder could have filed the suit seeking for a negative declaration, to declare the sale deed executed by the first defendant in favour of second defendant as not binding on the plaintiff and that the second defendant has not derived any title, without filing a suit for specific performance on the basis of compromise entered into in O.S. No. 5649/1997 dt. 24.07.1999?

38. When such being the case, this court has to consider as to whether based on the compromise entered into earlier in OS No 5649 of 1997, the plaintiff has acquired right to file a suit to claim 3 acres of land and based on such existing right, a negative declaration relief can be granted in favour of the plaintiff, holding that the sale deed executed by the first defendant-society in favour of second defendant does not bind it? To seek such a relief, the plaintiff must have a right over the property in question. Learned counsel for both parties are not disputing the fact that a decree has not been drawn on the basis of the compromise on account of non-payment of commensurate court fee. If the decree is not drawn, it can be assumed that the terms of the compromise have not been accepted by the court. Then, this court has to see whether the plaintiff can still maintain a suit seeking a negative declaration based on the terms of the compromise petition?