Delhi Development Authority And ... vs Rama Associates (P) Ltd.
1999 Latest Caselaw 347 Del

JUDGMENT

Devinder Gupta, A.C.J.

1. This first appeal is against the judgment and decree passed on 24.7.1998 by learned Single Judge of this Court. Suit of the plaintiff/

respondent has been decreed directing the Delhi Development Authority (for short "D.D.A.") to pay a sum of Rs.27.90 lakhs to the plaintiff /respondent while retaining a sum of Rs..18.60 lakhs. The claim of the plaintiff/respondent for interest has been negatived. The plaintiff/respondent has also filed cross objections (CM.75/99).

2. The plaintiff/respondent on 26.11.1993 filed a suit claiming a decree for Rs. 60,79,875/- against the D.D.A. Future interest at the rate of 18% p.a. was also claimed on the suit amount from the date of suit till realisation. The Director (Slums), D.D.A. was also imp leaded as defendant No. 2. It was alleged that the plaintiff participated in an auction held on 12.3.1982 and gave a bid for plot No. 9, measuring 351 sq. Mtrs. on Asaf Ali Road, New Delhi. Being the highest bidder for Rs. 1.86 crores, the plaintiff's bid was accepted on 30.3.1982. A deposit of Rs. 46.50 lakhs was made with the defendant, being 25% of the total bid amount. No architectural control drawings were exhibited or shown at the time of bid, as required under the terms and conditions of auction. Despite requests the same were not supplied but were supplied only on 15.10.1982, after 7 months of auction. Delay in supplying had greatly prejudiced and jeopardised the interest of the plaintiff as they could not negotiate with the prospective purchasers of the proposed commercial flats in order to finance the payment of the balance instalments to the defendant in accordance with the terms and conditions of the auction. Delay in supply of drawings resulted in heavy losses to the plaintiff. Even the drawings, which were supplied belatedly, were not in consonance with the building bye-laws framed by the Municipal Corporation of Delhi and Master Plan for Delhi. Despite requests on the grievances and on the prayer to extend the period for making the balance payment, no action was taken by the defendant. Instead on 20.8.1982, Director (Slums) issued notice to the plaintiff that in case the balance amount is not paid by 29.8.1982 alongwith interest, the earnest money would stand forfeited. The said act of the defendant was challenged being illegal besides the subsequent act of re-auctioning the plot. The plaintiff thus claimed against the defendants a decree for refund of the earnest money of Rs. 46.50 lakhs along with interest at the rate of 18% p.a. totalling Rs. 60,79,875/- and future interest on this amount till the date of payment.

3. The suit was opposed by the defendant/D.D.A. on number of grounds, inter alia, alleging that the plaintiff failed to make payment of the balance bid amount. He was duly informed through letter dated 20.8.1982 that no further extension for payment would be permitted. Due to non-payment of the balance bid money, amount of earnest money stood forfeited in terms of the conditions of the auction governing the auction. The plaintiff were also estopped by its conduct. It was not open for the plaintiff to challenge the validity of the auction, which was held in accordance with the Rules and Regulations. Parties rights are duly governed by the terms and conditions thereof. The defendant denied that any request had been made for supply of architectural control drawings etc. Right of the plaintiff for return of earnest money or interest was denied. On the pleadings of the parties, the following issues were framed:

"1. Whether the plaintiff is a Limited Company and M/s.Essels Properties and Industries is its unit and Shri Lakshminarayan is its Director competent to sign, verify the plaint and to file the suit?

2. Whether the supply and exhibition of architectural control drawings to bidders prior to auction is an integral part of the sale by auction. If so, has

the defendant violated it or the terms and conditions of auction regarding the sale of plot No. 9?

3. Whether the architectural control drawings were not exhibited or furnished as per the terms and conditions of auction?

4. Whether the architectural control drawings were not in accordance with the Municipal Bye-laws, the Master or the Zonal Plan as alleged? If so, its effect?

5. Whether plot No. 9 in question falls under the Slums Areas (Improvement and Clearance) Act, 1965? If so, its effect?

 6.        Whether the said plot which was shown in the Master Plan as a main    street/tot lot, could no be auctioned by the defendant for commercial and official buildings without changing the land use from residential to commercial, as per Master Plan?  
 

 7.        Whether the said plot could not be auctioned with a declaration that
permissible Floor Area Radio (FAR) is 400?  
 

 8.        Whether the defendants had no right to confiscate/forfeit of earnest money of over Rs. 46.50 lakhs when there was an injunction against the plaintiff and the defendants for maintaining status quo in Suit No. 89/82 filed before the Sub-Judge?  
 

 9.        Whether there is any practice of making payment of balance auction money dependent on plaintiff's negotiations with prospective purchasers and are the defendants bound by it?  
 

 10. Whether the plaintiff waived their right to sue, acquiesce in the terms and conditions of auction and are estopped from challenging the validity of auction as per preliminary objections in the written statement? If so, its 
effect?  
 

 11. Whether the defendants are liable to refund the earnest money as claimed?  
 

 12. Whether the plaintiffs are entitled to interest as claimed? If so, at what rate?  
 

 13. Relief."  
 

4. On 12.1.1994 an application was filed on behalf of Municipal Corporation of Delhi (Slum & J.J.) stating that by virtue of notification dated 1.9.1992 of the Delhi Administration pursuant to Government of India (Ministry of Urban Development) Order dated 26.8.1992, the Slum & JJ.Wings of the Delhi Development Authority stands transferred to Municipal Corporation of Delhi as its Slum & JJ. Department w.e.f. 1.9.1992 with all assets and liabilities on "as is where is" basis. It was, therefore, prayed that Municipal Corporation of Delhi be accorded leave to continue the defense in the suit by adding it as a defendant. The application came up on the same day. It was directed to be numbered. In exercise of powers under Order 1, Rule 10 of the Code of Civil Procedure, learned Single Judge passed an order directing Municipal Corporation of Delhi to be imp leaded as defendant No, 3 in the suit. No separate written statement was filed. The suit proceeded on merits. By the impugned judgment and decree, the suit was disposed of. Decree has been passed only against defendant No. 1, namely, D.D.A.

5. The appeal is by the defendants jointly.

6. A preliminary objection was raised by learned Counsel for the defendant/ respondent about the authority of Mr. R.K. Varshneya, Advocate to prefer appeal against the impugned judgment and decree contending that on 12.1.1994 Municipal Corporation of Delhi was brought on record. There is no authority in favour of Mr.Varshneya to represent Municipal Corporation of Delhi and as such the appeal is not maintainable. We heard at this stage learned counsel for the parties on the merits of the appeal as well as on the preliminary objection raised by learned counsel for the respondents and were taken through the entire record of the appeal as well as of the suit record.

7. For and on behalf of Delhi Development Authority and Slum and JJ. Wing Vakalanama signed by Shri Nathu Ram, Secretary, D.D.A. in favour of Shri M.L. Jain and Shri R.K.Varshneya, Advocates was filed with the suit on 20.3.1984. The same is available at page 47 of B part of the suit record. It is not disputed that on the basis of this Vakalatnama Shri M.L. Jain and Shri R.K. Varshneya, Advocates were duly appointed as Counsel representing D.D.A. On 12.1.1994, as noticed above, the aforementioned application seeking impleadment of M.C.D. was filed under the signatures of Shri R.K. Varshneya, Advocate. Before M.C.D. was. ordered to be imp leaded, a direction was made to file Vakalatnama on its behalf. Vakalatnama signed by the Director (Slum & J.J.) M.C.D. for and on behalf of M.C.D. (Slum & J.J.) in favour of Shri R.K. Varshneya, Advocate was filed on 13.1.1994. It is on the authority of this Vakalatnama that Shri R.K. Varshneya, Advocate had been appearing in the suit on behalf of all the defendants, without any objection from the plaintiffs. However, in some of the proceedings, presence of the Standing Counsel for M.C.D. is also shown for and on behalf of M.C.D. .

8. Appeal has been preferred jointly on behalf of all the defendants: (1) Delhi Development Authority; (2) Director (Slums) D.D.A.; and (3) Municipal Corporation of Delhi. Memo of appeal is signed by Shri R.K.Varshneya, Advocate. There is only one Vakalatnama, which has been filed accompanying memo of appeal. It is signed by Director (Admn.) Slum and J.J. Wing, Municipal Corporation of Delhi. There is no Vakalatnama filed separately by Shri R.K.Varshneya, Advocate on behalf of D.D.A. along with memo of appeal. The question to be decided is that whether presentation of appeal by Shri R.K. Varshneya, Advocate, on behalf of the defendant/appellants is proper and valid.

9. Rule 4 of Order III, C.P.C. provide for the manner of appointment of a Pleader by the parties and the duration during which the appointment is to remain in force. It reads:

"Appointment of Pleader.

 4(1)    No Pleader shall act for any person in any Court, unless he has been appointed for the purpose by such person by a document in writing signed by such person or by his recognized agent or by some other person duly authorized by or under a power of attorney to make such appointment.  
 

 (2)      Every such appoint shall be filed in Court and shall, for the purposes of Sub-rule (1), be deemed to be in force until determined with the leave of the Court by a writing signed by the client or the pleader, as the case may 

be, and filed in Court, or until the client or the pleader dies, or until all proceedings in the suit are ended so far as regards the client.  
 

 Explanation : For the purposes of this sub-rule, the following shall be deemed to be proceedings in the suit:  
  

 (a)      an application for the review of decree or order in the suit,  
 

 (b)      an application under Section 144 or under Section 152 of this Code, in relation to any decree or order made in the suit,  
 

 (c)      an appeal from any decree or order in the suit, and  
 

 (d)      any application or act for the purpose of obtaining copies of documents or return of documents produced or filed in the suit or of obtaining refund of moneys paid into the Court in connection with the suit  
  xx            xxx             xxx"    
 

10. Reading of Sub-rule (1) of Rule 4 of Order III makes it clear that appointment of an Advocate has to be by a writing signed by such person or by the recognised agent or by some other person duly authorised in that behalf. In the instant case there is no manner of doubt that the appointment of Shri R.K. Varshneya, Advocate during the trial of the suit was for and on behalf of D.D.A. and M.C.D. respectively. On behalf of the D.D.A. and M.C.D., duly authorised person had signed Vakalatnamas authorising Shri R.K. Varshneya, Advocate to act and plead. Sub-rule (2) of Rule (4) says that the appointment shall be filed in Court and once filed in Court, the same shall be deemed to be in force unless determined with the leave of the Court. Such appointment comes to an end only in the eventualities, as are mentioned in clause (2) of Rule 4 of Order III, C.P.C.

11. It is not the respondents' case that the authority of Shri R.IC Varshneya, Advocate at any point of time was determined either on his own request or by or on behalf of the EXD.A. Shri R.K. Varshneya, Advocate continued to represent the defendants during the trial of the suit, till its realisation.

12. For the purpose of Sub-rule (2) of Rule (4) of Order III, an appeal from any decree or order in the suit shall be deemed to be "proceedings in the suit". As such a counsel appointed in a suit or proceedings, without any further power of attorney (Vakalatnama) is fully authorised and can present memorandum of appeal for and on behalf of his client. By virtue of clause (c) of Explanation to Sub-rule (2) of Rule 4 of Order III, C.P.C., on the strength of the authority conferred by the two Vakalatnamas, which are in the suit record, it was permissible for Shri R.K. Varshneya; Advocate to have represented both D.D.A. as well as M.C.D. in the appeal arising out of the decree passed therein and to present memorandum of appeal on behalf of the defendants. However, it appears that as a precautionary measure, additional Vakalatnama was filed by Shri Varshneya, Advocate signed by the Director (Admn.) Slum and J.J. Wing for M.C.D. Filing of such Vakalatnama was neither necessary, nor has the effect of superseding the earlier Vakalatnamas. Even the act of the Director (Admn) Slum and J.J. Wing of M.C.D. signing Vakalatnama on behalf of D.D.A. or M.C.D., it will hardly make any difference. Appeal on behalf of the defendants presented by Shri R.K. Varshneya, Advocate on the strength of the authority conferred by two Vakalatnamas, is competent an maintainable. As such preliminary objection has no force. The same is turned down.

13. Now. on merits of the appeal, as many as 12 issues were framed in the suit. Judgment has not separately discussed the issues, which came up for trial on which parties also led their respective evidence. In his judgment learned Single Judge has firstly extracted the pleadings of the parties and reproduced the issues framed in the suit. The judgment thereafter proceeds to discuss the evidence and the decisions cited at bar. In para 31, it is observed that it is not necessary to deal with each of the cases cited at the bar separately except to refer to a decision of the Constitution Bench of the Supreme Court of India in Fateh Chand v. Balkishan Dass, that if a reasonable amount is fixed as an earnest money and there is breach on the part of the person, who had deposited the earnest money that could be subject matter of forfeiture by the other party. With these observations in para 38 of the judgment learned Single Judge has held that the action of the defendant in forfeiting the entire earnest money cannot at all be accepted in law. No separate findings have been recorded on issue No.10 that whether the plaintiff had waived its right to sue or had or had not acquiesced in the terms and conditions of the auction or that whether the plaintiff was or was not estopped from challenging the validity of the auction, as per the preliminary objections raised by the defendants in their written statement. In para 39 of the judgment, learned Single Judge observed:

"It is not necessary to refer to suit No. 89/82 and other matters and it is also not necessary to answer each of the issues either way except issue No. 1."

Para 40 of the judgment records the decision only on issue No. 1 and para 41 records decision on issue No. 11.

14. Order 20, Rule 5, C.P.C. enjoins upon a Court, in a suit in which issues have been framed, to state its finding or decision with reasons therefor upon each issue separately, unless the finding upon any one or more of the issues is sufficient for the decision of the suit. No where in the entire judgment it is observed by the learned Single Judge that findings on the issue of estoppel, waiver and acquiescence is not necessary or that it was not necessary to record finding on any other issue except by recording finding on a few issues. It is also not observed that the defendants/appellants had not made out their case on the plea, which had been raised by them in preliminary objections on which evidence had also been led.

15. On recording of reasons on all issues framed in the suit, in Smt. Swaran Lata Ghosh v. Harendra Kumar Banerjee and Anr., , the Supreme Court held that a party to a dispute is ordinarily entitled to know the grounds on which the Court has decided against him and more so, when the judgment is subject to appeal. The Appellate Court will have adequate material on which it may determine whether facts are properly ascertained, the law has been correctly applied and the resultant decision is just. The Apex Court emphasised the necessity of recording reasons in a judgment observing:

"Trial of a civil dispute in Court is intended to achieve, according to law and the procedure of the Court, a judicial determination between the contesting parties of the matter in controversy. Opportunity to the parties interested in the dispute to present their respective cases on questions of law as well as fact, ascertainment of facts by means of evidence tendered by the parties, and adjudication by a reasoned judgment of the dispute upon a finding on the facts in controversy and application of the law to the facts found, are essential attributes of a judicial trial.

In a judicial trial the Judge not only must reach a conclusion which he regards as just, but, unless otherwise permitted, by the practice of the Court or by law, he must record the ultimate mental process leading from the dispute to its solution. A judicial determination of a disputed claim where substantial questions of law or fact arise is satisfactorily reached, only if it be supported by the most cogent reasons that suggest themselves to the Judge; a mere order deciding the matter in dispute not supported by reasons is no judgment at all. Recording of reasons . in support of a decision of a disputed claim, serves more purposes than one. It is intended to ensure that the decision is not the result of whim or fancy, but of a judicial approach to the matter in contest: it is also intended to ensure adjudication of the matter according to law and the procedure established by law. A party to a dispute is ordinarily entitled to know the grounds on which the Court has decided against him and more so, when the judgment is subject to appeal. The Appellate Court will have adequate material on which it may determine whether facts are properly ascertained, the law has been correctly applied and the resultant decision is just. It is fortunate that the learned Trial Judge has recorded no reasons in support of his conclusion, and the High Court in appeal merely recorded that they thought that the plaintiff had sufficiently proved the case in the plaint."

16. In. Fomento Resorts and Hotels Ltd. v. Custavo Ranato da Cruz Pinto and Others, , also it was held that where several contentions, factual and legal are urged and when there is scope of an appeal from the decision of the Court, it is desirable that the court should, when dealing with any matter, dispose of all the points and not merely rest its decision on one single point.

17. Learned Single Judge though has taken great pains in trying to dispose of the suit but projected his attention only to one of the aspects of the case, which according to him was the crucial issue, without going into the other important questions arising from determination, which had been raised by the parties, on which it was necessary for the learned Single Judge to have given his findings in whatsoever manner he thought it fit. Decision on these issues was necessary. By not deciding all the issues framed in the suit, we are of the view that the judgment and decree is liable to be set aside.

18. Though the material evidence may be on record, which might enable us to decide all issues on merits, but in the instant case we are not inclined to make that exercise by deciding each issue in this appeal, in as much as from the judgment it cannot be made out that what issues have been dealt with and decided. Rendering decision by us on merits is likely to deprive a party to the litigation a valuable right of first appeal. Had it been a case where one or two issues had remained to be decided, we would have made our endeavour to take a decision on the basis of material before us but we are of the view that failure on the part of the learned Single Judge to decide the suit in accordance with law renders the judgment and decree liable to be set aside.

19. Consequently, we allow the appeal, set aside the judgment and decree passed by learned Single Judge and make an order of remand directing to decide the suit afresh in accordance with law on the evidence already on record. Parties are left to bear their respective costs. As judgment and decree has been set aside and remand is necessitated under Order 41, Rule 23A, C.P.C., the appellants will be issued the requisite certificate entitling and enabling it to have refund of the court fee stamp paid on the memorandum of appeal.

CM. 75 of 1999

20. Dismissed as infructuous. Plaintiff/respondent will also be issued the requisite certificate entitling and enabling it to have refund of the Court fee stamp paid on cross objections.