Pramodh Mahey vs Bhashin Potteries And Anr.
2006 Latest Caselaw 983 Del

JUDGMENT

Sanjiv Khanna, J.

1. The present appeal by Mr. Pramod Mahey sole propritor of Promod Protteries, appellant-plaintiff (hereinafter referred to as the appellant) is directed against two orders passed by learned additional District Judge dated 27th June, 1988 and 29th June, 1988. By the impugned order dated 27th June, 1988 learned additional district judge allowed application of the respondents under Order 39 Rule 4 of the Code of Civil Procedure, 1908 and vacated the ex parte ad interim injunction granted in favor of the appellant restraining the respondents for interfering with his possession of khasra Nos. 1571-1572, village Gheora chowk, Rohtak Road, New Delhi (hereinafter referred to as the property) and the direction to the SHO to ensure that the respondents do not cause any interference in the possession of the appellant. While vacating the injunction, the learned Additional District Judge had further directed as under :-

In the interest of justice, I therefore, order that the possession of the defendant if it has been disturbed by the police or defendant shall be restored and after restoration of the possession, the parties shall maintain status quo and the SHO of P.S. Nangloi, shall restore the possession if he has already disturbed the possession of the defendant.(rectified vide order dated 29th June,1988 to be read as plaintiff)

2. This direction given above was modified and altered in the order dated 29th June, 1988, with the following direction:- ?Prayer is also made to issue clear directions to the SHO Nangloi that the possession of the suit premises be restored to the defendants. SHO of P.S. Nangloi is directed to restore the possession of the premises No. khasra number 1571 and 1572 in village Gheora, New Delhi. A letter be written to the SHO P.S. Nangloi directing him to restore the possession of (the possession of) this premises to the defendant forthwith. A copy of this letter (?) to SHO be sent to the Police Commissioner?

3. This order dated 29th June, 1988 was passed on a fresh application filed by the respondents before the ld. additional district judge and was passed without notice to the appellant.

4. Pursuant to the said order passed, the SHO/police gave possession of the property to the respondents after dispossessing the appellant. This has been recorded in the order dated 2nd July, 1988 passed by this Court.

5. Normally, I would have set aside and quashed the order dated 29th June, 1988, substantially and effectively modifying the earlier order dated 27th June, 1988 on short the ground that the said order was passed without notice and hearing the appellant and thus principles of natural justice were violated. The appellant was not heard on the issue of dispossession and the question whether the police had disturbed the possession of the respondents in the property and inducted the appellant at the first instance. In fact, there is dispute as to whether the appellant or the respondents were in possession of the property when the suit for injunction was filed and the ex-parte orders dated 20th June, 1988 and 21st June, 1988 were passed. This aspect and the factual dispute, as to who was in possession of the property is the moot question.

6. The present appeal has remained pending in this Court for last nearly 18 years and, therefore, remanding the matter back to the Trial Court at this stage to decide the question of possession on the date of the filing of the suit or when ex parte injunction orders were passed, would be unjust and unfair.

It will prolong the litigation and only lead to another round of interim orders, appeals etc. I, therefore, propose to examine these aspects myself and issue some directions to ensure that the controversy and issues raised are adjudicated expeditiously in the main suit and the execution application.

7. Relevant brief facts may however be noticed. The fact that the appellant was owner of the property is not disputed and even today the respondents do not dispute that the appellant is the registered owner of the property. The fact the that the respondents were inducted and given possession of the property by the police after dispossessing the appellant pursuant to the impugned order dated 29th June,1988 is also admitted.

8. The appellant had mortgaged this property with the Delhi Financial Corporation under a registered mortgage deed. The Delhi Financial Corporation had filed Suit No. 143/1979 and a decree for Rs. 3,66,985.75 was passed against the appellant on 17th September, 1980. The Delhi Financial Corporation was also entitled to interest at the aforesaid amount @ 14% per annum from 1st February, 1975.

9. As the decree was not satisfied, the Delhi Financial Corporation filed an execution application, Execution No. 42/1982.

10. During the pendency of the execution application, a tripartite agreement was entered into amongst the Delhi Financial Corporation, Pramod Potteries i.e. the appellant and Bhasin potteries i.e. the respondents. An application incorporating the terms of settlement was filed before the execution court on 9.9.1983. The salient features of the said settlement/compromise were:-

(i)The plant and machinery installed in the property was sold to Bhasin Potteries for Rs. 2,00,000/-. This payment was deposited by the respondents with Delhi Financial Corporation towards part satisfaction of the dues of the appellant. The possession of the plant and machinery was handed over to the respondents on as is and where is basis. The sale was however, subject to confirmation of the Court as the said plant and equipment had been attached under the orders of the Court.

(ii)The respondents had agreed to purchase the land and building (i.e. the property subject matter of mortgage with the Delhi Financial Corporation) for Rs. 4,47,888.59/-, exclusive of interest from 1st February, 1985. The entire amount of sale consideration was to be paid to the Delhi Financial Corporation and adjusted against the dues of the appellant and accordingly the decree against the appellant was to be satisfied. The sale deed was to be executed within the period of one month from the date of compromise and grant of confirmation by the Court.

(iii)Rs. 4,47,888.59 exclusive of interest from 1st February, 1985 would be treated as loan from the Delhi Financial Corporation to Bhasin potteries and would be payable in half yearly installments from 1st February, 1984 with interest payable in half yearly installments @ 17.5% per annum with 4% rebate on payment of the principal amount and interest on the due dates. In case of default in payment, additional interest was payable and the agreement also provided for compounding of interest.

(iv)The property would remain mortgaged with the Delhi Financial Corporation, till the respondents paid the entire amount. The respondents had to execute a mortgage deed for Rs. 4,47,888.59 exclusive of interest from 1st February, 1983.

11. In nut shell, the agreement provided that the appellant, i.e. the judgment debtor, would execute a sale deed in favor of the respondents and on the execution of the sale deed, the entire liability of the appellant to the Delhi Financial Corporation would stand satisfied and the Delhi Financial Corporation would be entitled to recover Rs. 4,47,888.59 exclusive of interest from 1st February, 1983 from the respondents with interest and other charges and nothing was recoverable or payable by the appellant.

12. After the application was filed on 9th September, 1983, learned Additional District Judge recorded statement of Mr. Pramod Mahey, the appellant herein, the partners of Bhasin potteries and the counsel for the Delhi Financial Corporation. The parties agreed to be bound by the said terms and abide by the terms and conditions mentioned therein. The court held that the parties would be bound by the said terms and conditions and the case was adjourned to report compliance of the compromise.

13. The respondents purchased stamp paper for execution of the sale deed and the sale deed was typed for execution. As per the respondents on 20th September, 1983, the sale deed was presented for execution and registration but the Sub-Registrar, refused to register the sale deed and transfer the property in favor of the respondents on the ground that it was agricultural land and was not located in lal dora.

14. The respondents state that all along they had been informed that the property was free hold and located in lal dora and was freely transferable and not subjected to any restriction or control under the Delhi Land Reform Act.

15. The respondents have enclosed minutes of meetings dated 23rd July, 1976 in which matter was referred to a retired ADM(Revenue) to verify the correctness of original certificates submitted by the appellant that the property was located in lal dora. Allegations were also made that the appellant had given a bogus certificate and had therefore cheated the Delhi Financial Corporation. Prima facie, there is some material to suggest and indicate that the appellant had misrepresented that the property was located in lal dora.

16. The retired ADM(Revenue) also came to the conclusion that the property was not located in lal dora but was agricultural land which could not be used for industrial activities in view of Section 23 of the Delhi Land Revenue Act.

17. In these circumstances, the respondents wrote letter dated 11th July, 1984 to the Delhi Financial Corporation expressing their anguish and unhappiness over the entire episode and the way appellant had conducted himself. It was stated that all along the appellant had wrongly projected that the property in question was located in lal dora and had filed bogus documents in support. It was stated that the respondents had agreed to purchase the property/building as the same was located in lal dora. They cancelled the agreement. Relevant portion of the said letter is as under:-

Sir, the matter was considered at length amongst partners of M/s Bhasin Potteries who were of the opinion that there is no use of buying agricultural land with an object of setting up of an pottery industry. There is always risk to action being taken by competent authorities of Delhi Administration for the contravention of various laws and plans of Delhi Administration and Delhi Development Authority.

Sir, in anticipation of proper documentation we invested another amount of Rs. 1.50 lacs by way of filling of land, repairing of machines, repairing of Chimney and furnace besides of Rs. 2.0 lacs already paid to you as aforesaid.

Under these circumstances we have no alternative but to cancel the agreement which was entered between us and the Corporation on the confirmation of DFC that the said plot of land is in Lal Dora and Pottery Industry could be set up as per the bye-law of various authorities of Delhi Administration.

We request you to refund our earnest money of Rs. 2.0 lacs with interest from the date of deposit as per the Bank rate which is 18% p.a. along with Rs. 1.50 lacs which has been invested by us.

18. The appellant, however, it appears was not in a position to make payment to the Delhi Financial Corporation and wanted to avoid his liability.

He wrote letter dated 24th September, 1987, the relevant portion of which is reproduced below:

In order to meet the demand of the Corporation one Mr. Bhasin came forward to take over the liability to repay the loan with interest which was Rs. 6,44,000/- due to the Corporation and also reimburse my investment to the extent of Rs. 3,00,000/- to which I agree so that I may be able to restart my ruined life. Mr. Jagdish Bhasin and token of the agreement, paid Rs. 2,00,000/- to the Corporation. In view of the above payment of Rs. 2,00,000/- the Corporation handed over the keys of the factory to Mr. Bhasin on 9.9.1983 and he has been using the said factory premises with the permission of the Corporation and to the undersigned and without paying any rent or lease money for the use of said premises. Mr. Bhasin has been enjoying the possession and the use of the factory premises with due permission of the Corporation for the last 4 years.

19. A similar stand was also taken by the appellant in the pleadings before the execution court.

20. It is the case of the appellant that this letter was written to avoid payment of the decretal amount to the Delhi Financial Corporation and it was wrongly stated that the respondents had been enjoying possession of the property for the last four years after due permission from the Delhi Financial Corporation. It was also stated that the appellant was acting as per directions including legal advice given by the respondents. It will be for the appellant to prove and explain these admissions as provided in the Evidence Act.

21. Delhi as a whole has seen a spurt and escalation in the real estate prices during the last twenty years. The above stand taken by the parties, also changed as real estate prices increased. The appellant on 9th May, 1988 deposited a cheque of Rs. 4,47,888.59 with the Delhi Financial Corporation but the amount payable to the Delhi Financial Corporation in the meantime had increased on account of interest.

22. The respondents also changed their stand and started claiming right in the property on the basis of the compromise application. They started relying upon the statement made by the appellant in his letter dated 24th September, 1987 and the pleadings that the respondents had been enjoying possession of the property with due permission of the Delhi Financial Corporation for four years. With further increase in real estate prices in Delhi, the stakes of the parties also increased and the contest became acrimonious and bitter with each party wanting to gain lead and out do each other.

23. In June, 1988, during summer vacations, a suit was filed before learned Additional District Judge by the appellant against the respondents for permanent injunction. The impugned orders arise out of this suit. The appellant claimed that he was in possession of the property and on 18th June, 1988, the respondents with some anti-social elements had tried to enter upon the property and dispossess the appellant. An ex parte interim order was passed by the learned Additional District Judge on 20th July, 1988 restraining the respondents from interfering with quiet and peaceful possession of the property by the appellant till further orders. On the very next date i.e. 21st June, 1988, the learned Additional District Judge directed the SHO to ensure that there was no further interference by the respondents in the possession of the appellant. A local commissioner was also appointed to visit the spot and as per the report of the local commissioner, he had visited the property on 21st June, 1988. The appellant opened the locks but at that time some unknown person suddenly appeared and tried to obstruct the commission proceedings. Police was called and thereafter the commission proceedings continued. As per the report of the commissioner, the appellant was in possession.

24. On coming to know about the ex parte interim orders and not to left behind, the respondents immediately moved an application under Order XXXIX Rule 4 of CPC for vacation of the interim stay. The said application was taken up for consideration and vide order dated 27th June, 1988, the stay orders granted were vacated on the ground of suppression of facts and fraud. Specific reliance was placed upon the admissions of the appellant that the respondents were in possession of the property. The learned Trial Court also felt that if the respondents had been dispossessed pursuant to the orders passed by the court, direction for restitution should be issued and, therefore, as quoted above, directions were given to SHO to restore possession of the respondents in case the police had dispossessed them. It will be apparent from the impugned order dated 27th June,1988 that no specific finding and conclusion was recorded, by the learned Additional District Judge, that the respondents were in actual physical possession on the date the suit was filed. There is no detailed discussion in that regard and the report of the local commissioner has not been considered and examined. The other aspects with regard to conduct of the respondents, their letter dated 11th July, 1984 and failure to make the payment to the Delhi Financial Corporation also has not been considered and gone into.

25. After two days, the respondents moved another application asking for correction of typographical error and for direction to SHO to restore and give possession to the respondents. The learned Additional District Judge by an ex parte order without even issuing notice and hearing the appellant passed the second impugned order dated 29th June, 1988, directing the SHO to give possession of the property to the respondents after dispossessing the appellant. The said order has been implemented by the police and pursuant to the directions given, the respondents have been in possession of the property since July, 1988 onwards till today.

26. I am informed that the execution application filed by the Delhi Financial Corporation is still pending. Learned counsel for the respondents has brought to my notice order dated 21st March, 1995 passed in Civil Revision No. 251/1995 titled Bhasin Potteries v. Delhi Financial Corporation and Deputy General Manager (SDA). In this order it has been recorded that the respondents herein had agreed to deposit Rs. 7,46,000/- in this Court. By subsequent order dated 17th may, 1995 the Delhi Financial Corporation was permitted to withdraw this amount. It may be noted that the appellant was not a party to the said civil revision and the orders were passed behind the back of the appellant.

27. In view of the factual position discussed above, I feel that the impugned orders passed in the present case dated 27th June, 1988 and 29th June, 1988 require modification. It may be relevant to state here that while passing the order dated 27th June, 1988, it is apparent that the learned Additional District Judge himself was not clear and satisfied whether appellant or the respondents was in actual possession of the suit property, when the injunction order was passed. This is the reason why directions were given to the SHO to restore possession only if the respondents had been dispossessed. There was no cause or reason to modify that order after two days and that too without notice to the appellant. Order dated 29th June, 1988 therefore cannot be sustained. However, I do not think at this stage in 2006 the matter should be referred back in terms of order dated 27th June, 1988 because of the long time gap and the said police officers and records may no longer be available to verify and to carry out the directions given in the said order. This aspect now requires adjudication by the Court. Any further direction now given in this regard will also lead to another round of litigation.

28. Prima facie I am of the opinion that there is much to say in favor of the appellant, though his conduct is also not above board and he was certainly wrongly inducing the respondents and the Delhi Financial Corporation to believe that the land in question was located in lal dora. He is also required to explain his admissions. However, there are other circumstances including admissions of the respondents to the contrary. No document has been placed on record under which the appellant gave possession of the property to the respondents. In the compromise application filed before the execution court in September, 1983 it has not been recorded that possession has been handed over and given to the respondents. On the other hand, averments made in the compromise application show that the possession was not given to the respondents and sale deed was to be executed simultaneously with the respondents taking possession and the liability from Delhi Financial Corporation. This is also mentioned in the unsigned sale deed placed on record by the respondents. The unsigned sale deed states that the respondents for all times thereafter shall be entitled to enter into and upon the said factory premises and hold and enjoy the same with every part thereof and every right and appurtenance whatsoever and to receive the rents, issues, and profits thereof without any interruption, disturbance, claim or demand from the appellant. The said sale deed was never executed. The respondents never paid any money and did not take over the liability of the appellant. In 1988 the appellant made payment of Rs. 4,47,888.59 to the Delhi Financial Corporation Ltd.

29. Further the respondents had, after they came to know that the land was located in lal dora, cancelled the agreement. Having repudiated the agreement, can the respondents now stake their claim to ownership and possession is the question that the respondents will have to meet and answer. It is an undisputed fact that the appellant is owner of the property in law. There is no correspondence or letter written by the respondents from 1983-84 onwards till 1988 claiming possession or right in the property. The report of the local commissioner also states that the appellant was in possession of the property though it appears that the respondents were being aggressive.

30. In these circumstances, I hereby direct as under:-

(1) I hereby appoint Mr. Dinesh Kapoor, advocate as a Receiver, who shall take over possession of the property within a period of fifteen days from the passing of this order. He shall lock the property and no person shall be permitted and allowed to use the property till the disposal of the suit and the execution proceedings. He shall deposit keys with the trial court. He shall be paid Rs. 7,000/-. This amount shall be paid by the appellant but will be subject to final costs.

(2) The suit for injunction and the execution application shall be tried and decided by the same court to prevent conflicting decisions. If permissible, the suit and the execution application should be referred to fast track court for expeditious disposal.

31. The observations made in this judgment are tentative and will not be binding on the Trial Court and the Execution Court.

32. Keeping in view the facts and circumstances of the present case, there will be no order as to costs.