Mirahul Enterprises & Ors. vs Mrs. Vijaya Srivastava
2008 Latest Caselaw 1015 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI
+                    RFA (OS) NO. 29/1996
%                            Date of Decision: 14th July, 2008


#   M/s. Mirahul Enterprises & Ors.            ..... Appellants
!                          Through : Mr. K.K. Mohan and Mr.
                           Ashish Mohan, Advocates for
                           Appellant nos. 1-5, Ms. Rekha Palli
                           and Mr. S. Nandakumar, Advocates
                           for appellant no.6.

                             Versus

$   Mrs. Vijaya Srivastava                     ....Respondent

!                            Through : Mr. T.K.Ganju, Sr.
                             Advocate with Mr. Rajiv Talwar,
                             Advocate

                             WITH

+                    RFA(OS) NO. 30/96

#   M/s. Mirahul Enterprises & Ors.        ..... Appellants
!                          Through: Mr. K.K. Mohan and Mr.
                           Ashish Mohan, Advocates for
                           appellants


                             Versus

$   Mr. R.R.Sood                             ....Respondent
!                            Through : Mr. T.K.Ganju, Sr.
                             Advocate with Mr. Rajiv Talwar and
                             Mr. Parmanand, Advocates

                             WITH
 +                              RFA (OS) NO. 41/96

#      Rear Admiral R.R.Sood(Retd.)                 ....Appellant
!                           Through : Mr. T.K.Ganju, Sr.
                            Advocate with Mr. Rajiv Talwar and
                            Mr. Parmanand, Advocates

                                          Versus

$      M/s. Mirahul Enterprises & Ors.        ... Respondents
!                             Through : Mr. K.K. Mohan and Mr.
                              Ashish Mohan, Advocates

                                          AND

+                              RFA (OS) NO. 42/96

#      Mrs. Vijaya Srivastava                                     ...Appellant
!                                         Through: Mr. T.K. Ganju, Sr.
                                          Advocate with Mr. Rajiv Talwar and
                                          Mr. Parmanand, Advocates


                                          Versus



$      Mirahul Enterprises & Ors.                 ...Respondents
^                            Through: Mr. K.K. Mohan and Mr.
                             Ashish Mohan, Advocates for
                             Respondent nos. 1-5, Ms. Rekha Palli
                             and Mr. S. Nandakumar, Advocates
                             for respondent no.6.





        CORAM:

*      HON'BLE MR. JUSTICE MUKUL MUDGAL

       HON'BLE MR. JUSTICE P.K.BHASIN



                               FINDINGS



P.K.BHASIN, J:



       These four appeals, which were filed against a       common

judgment dated 5th July, 1996 of learned Single Judge in two suits

for specific performance of two contracts for sale of two residential

flats were disposed of vide common judgment dated 10th May, 2002

by a Division Bench of this Court. Against that judgment two

appeals were filed before the Hon‟ble Supreme Court(being Civil

Appeal No. 1209-1210 of 2003 and Civil Appeal No. 1211-1212 of

2003). The Hon‟ble Supreme Court passed an following order on

19th July, 2006 in the said two appeals, the relevant portions of which

order are as under :-

" By the impugned judgment dated 10th May,2002, the division bench allowed the appeals filed be developers by holding that the suit agreements dated 2.11.1983 were provisional agreements; that they were inconclusive and accordingly the plaintiffs-appellants herein were not entitled to claim specific performance of the agreement for immovable property. Surprisingly, none of the other issues were answered by the division bench.

In our view, the division bench ought to have answered all the issues which were framed by the trial court. All the issues are inter-connected......................................

................................Therefore, we are of the view that the division bench ought to have given its findings not only on the conclusiveness of the suit agreement but also on the remaining issues including the finding on the issue of collusion between the developer and defendant no.6, as alleged by the plaintiffs.

.................... we are directing the division bench of Delhi High Court to return to us the findings on all the above quoted issues in RFA(OS) Nos.29,30,41 and 42 of 1996."

2. These appeals are thus being taken up again pursuant to the

above order of the Hon‟ble Supreme Court. On receipt of the said

order fresh hearing was afforded to all the parties. Here itself it

may also be mentioned that during the hearing of these matters, after

remand, efforts were made to bring about some amicable settlement

also between the parties but those efforts did not fructify as is evident

from the order of this Court dated 19.3.2008. So, we shall now

proceed further to return our findings as per the directions of the

Hon‟ble Supreme Court. Since we are now to give our issue-wise

findings the factual background leading to this litigation between the

parties and the evidence adduced during the trial will have to be

noticed and examined all over again.

3. Two suits for specific performance of contracts were instituted

by two persons, namely, Mrs. Vijaya Srivastava and Rear Admiral

Rishi Raj Sood(retd.) against M/s Mirahul Enterprises, a partnership

firm engaged in the business of construction activity, and its

partners, who were defendants no.2-5 in the two suits. From the

pleadings and the evidence adduced by the parties, oral as well as

documentary, we have been able to cull out the following undisputed

facts:-

(a) That sometime in 1982 Mrs. Vijaya Srivastava, the

respondent in RFA (OS) no. 29/96 who was the plaintiff

in Suit No.451/86, had booked some flats in a residential

Complex by the name of Mirahul Apartments being

constructed by M/s Mirahul Enterprises, defendant no.1,

and she had paid Rs.3,15,000/- as advance/booking

amount to the said builder Firm upto 09/10/83 vide

different receipts. Later on she appears to have decided

to purchase only one flat and so surrendered bookings

of other flats. In October,1982 Rear Admiral Rishi Raj

Sood, a family friend of Srivastavas and the plaintiff in

Suit No.450/86, was introduced to the defendant no.2,

S.B. Kishore, Managing Partner of defendant no.1 M/s

Mirahul Enterprises(who died during the pendency of

these appeals and is now represented by his legal heirs

who were already impleaded in the suits as defendants 3-

5 being the other partners of this builder Firm) as he also

wanted to have one flat and after negotiations he was

allotted flat no.S-1 in Mirahul Apartments. He paid

Rs.40,000/- as advance amount to the defendant

no.1/builder on 24/10/83 and as per the understanding

between the said two plaintiffs and defendant no.2 a sum

of Rs.1,40,000/- out of total advance amount of

Rs.3,15,000/- lying to the credit of Mrs. Vijaya

Srivastava with Mirahul Enterprises was transferred to

the account of R.R. Sood towards the advance for flat

no.S-1 allotted to him. However, by that time no formal

agreement was executed between M/s Mirahul

Enterprises and any of the two plaintiffs.

(b) It was also the common case of the parties that on

2/11/83 two separate agreements in respect of flats no.S-

1 & S-2 on the second floor in the names of R.R.Sood

and Vijaya Srivastava respectively were prepared by

defendant no.2 and the same were signed by the plaintiffs

as well as defendant no.2 as the Managing Partner of

Mirahul Enterprises. The amounts lying to the credit of

Mrs. Vijaya Srivastava as advance of different flats were

after surrender of other bookings considered as advance

towards flat no.S-2.

(c) When construction of Mirahul Apartments was going on

Vijaya Srivastava also gave loan of Rs.1,45,000/- to

Mirahul Enterprises and Rs.70,000/- was given as loan to

it by R.R. Sood and these loan amounts were in addition

to the money already given by the plaintiffs towards sale

consideration of the flats and the loan was repayable on

demand. The defendants had admitted receipt of these

loan amounts also in their written statements.

4. Now, we come to the disputed facts. The case of the plaintiffs

was that on 2/11/83 two agreements were prepared by defendant

no.2 for their signatures and they signed their respective agreements

but it was noticed by them immediately after the signing of those

agreements that on the last page(page no.5) of the agreement in

respect of Vijaya Srivastava and on the last two pages(pages 4 & 5)

of the agreement in respect of R.R.Sood the price of the flats shown

was more than the agreed price and those pages also contained certain

other objectionable clauses. So, they objected to those unauthorised

clauses in the agreements and then some corrections/changes were

carried out by Brig. K.K. Srivastava in his handwriting as dictated by

the deceased defendant no.2 but he(K.K. Srivastava) did not feel

satisfied with those changes also and then defendant no. 2 got returned

both the agreements and the pages containing objectionable clauses

were prepared afresh and signed by them on the same day. According

to those agreements the price of flat no.S-2 was Rs.2,64,261/- and

the price of flat no.S-1 was Rs.2,68,000/-. Since the defendants failed

to execute the sale deeds in favour of the plaintiffs as per the aforesaid

two agreements and they also allegedly refused to return the loan

money two suits for specific performance of the contracts, refund of

loan money and damages etc. were filed.

5. The stand of defendants 1-5 regarding the agreements relied

upon by the plaintiffs was that though those agreements were

executed but the same were never intended to be acted upon by the

parties and in fact were got prepared by the plaintiffs on the pretext

that they would require the same to get loan from HDFC. It was also

their plea that final agreements were to be executed at the stage of

handing over of the possession of the flats and the final price of the

flats was also to be determined at that stage only as per the market

rate prevailing at that time. It was pleaded that, in fact, certain

additions were made in the agreements by K.K.Srivastava and the

original agreements were handed over to the plaintiffs then and there

and the signed copies were retained by defendants and that they had

not carried out any additions in those copies thereafter. It was also

pleaded that the plaintiffs were now using those ostensible agreements

to blackmail the defendants. The defendants also took an alternative

plea that in case it were to be held that price of the flats was not to be

determined at the stage of handing over of possession, as was their

case, even then the suits for specific performance were liable to be

dismissed since the price of the flat of Mrs. Vijaya Srivastava even

as per the so-called agreement to sell dated 02/11/83 was Rs.4,35,975/-

and Rs.3,89,000/- as per the agreement in respect of the flat of

R.R.Sood which price the plaintiffs were never willing to pay. As far

as loan amounts were concerned, the plea of the defendants was that

though the same were given to the defendants but they were interest

free loans and that they had never refused to refund that money.

6. The defendants had also placed on record carbon copies of two

agreements to sell dated 02/11/83 one of which was in respect of Mrs.

Srivastava and the other one was in respect of Mr. R.R.Sood. The

agreement in respect of Vijaya Srivastava was exhibited as Ex.DPW-1

during the cross-examination of Vijaya Srivastava. The agreement in

respect of R.R. Sood though was admitted by the counsel for the

plaintiffs before the learned Single Judge on 04/03/87 but was not

formally exhibited in evidence. In Ex.DPW-1 the sale price of the flat

no.S-2 was mentioned as 4,35,973/- while in the unexhibited

agreement in respect of R.R.Sood the price of his flat was mentioned

as Rs.3,89,000/-. In these documents it was also written that the

same were provisional and had been drawn up for the purchasers to

get loan from HDFC.

7. It may be noticed here that initially Mrs. Vijaya Srivastava in

her suit had impleaded M/s Mirahul Enterprises as defendant no.1 and

its partners as defendants 2-5. During the pendency of the suits

separate applications were filed by both the plaintiffs for directing the

defendants to hand over the possession of the two flats since they had

made almost the entire payment towards the sale consideration under

the two agreements. Those applications were allowed by the learned

Single Judge and to effectuate handing over of possession of the

flats to the plaintiffs a local commissioner was appointed and during

his visit to the spot the defendants had claimed that a portion of flat

no.S-2 had been sold to one Mohd. Arshad and so Vijaya Srivastava

got possession of the flat excluding the portion allegedly sold to the

said Mohd. Arshad and at that time she had not pressed for delivery

of entire flat to her as she had decided to challenge the so-called

transaction between the defendants and Mohd. Arshad. Possession of

flat no.S-1 was, however, got delivered to R.R.Sood. Thereafter, the

said S.S. Mohd. Arshad, who is now appellant no. 6 in RFA NO.

29/96, was also impleaded as a defendant in suit no. 451/86 by the

plaintiff Mrs. Vijaya Srivastava in her suit. It was claimed by Mrs.

Srivastava that the other defendants had fraudulently put S.S.Mohd.

Arshad in possession of a room on the basis of some sham sale

transaction and he was not a bona fide purchaser and by way of

amendment in the original plaint a prayer was made for passing a

decree of declaration to that effect also. This newly added defendant

S.S. Mohd. Arshad though was represented on a couple of dates of

hearing during the trial by his counsel did not but file any written

statement. Even the other defendants did not file any written

statement to the amended plaint in which it had been pleaded that they

had fraudulently put Mohd. Arshad in possession of a portion in

the flat in suit with the object of defeating her rights under the

agreement to sell(Ex.PW-1/2).

8. The learned Single Judge after analyzing the oral and

documentary evidence adduced during the trial which included the

agreement Ex.PW-1/2 relied upon by the plaintiffs, Ex.DPW-1 relied

upon by the defendants, various payment receipts filed and proved

by Vijaya Srivastava, agreement Ex.PW-2/21 between the plaintiff

R.R.Sood and Mirahul Enterprises, payment receipts made by this

plaintiff and the income tax record of Mirahul Enterprises

summoned during the trial, had come to the conclusion that there were

concluded contracts between the parties and both the plaintiffs had

paid the entire sale consideration to the vendor and nothing more was

payable by them towards the sale consideration. The learned Single

Judge also held that the agreement Ex.DPW-1 relied upon by the

defendants, which was being challenged by the plaintiff Vijaya

Srivastava, was also binding on the parties. The plea of both the

plaintiffs that they had paid some money as loan to the defendants

was, however, rejected and the learned Single Judge held that the

amounts of money which the plaintiffs had paid to the defendants as

loan were, in fact, a part of the sale consideration of the two flats and

the defendants were not obliged to return the same to the plaintiffs and

the same stood adjusted towards the sale consideration of the flats.

Regarding defendant S.S.Mohd. Arshad it was observed that he had

not contested the suit of Vijaya Srivastava and from the documents

filed in the case it was clear that he was only an „alias or altar ego‟ of

the second defendant(S.B. Kishore).Consequently, decrees for specific

performance of the agreements were passed in favour of the

plaintiffs in respect of their respective flats in Mirahul Apartments but

the claim of both the plaintiffs for refund of loan money was rejected.

9. Against the judgement of the learned Single Judge, the

defendants in the two suits filed two separate appeals challenging the

passing of decrees for specific performance of the two agreements to

sell. The judgement of the learned Single Judge was challenged, inter-

alia, on the grounds that it could not have been held that the

agreements relied upon by both the sides constituted concluded

contracts and were binding on them. It was also claimed that neither

the agreements relied upon by the plaintiffs nor the ones placed on

record by the defendants constituted final and binding contracts

between the parties and that if at all it was to be held that there were

concluded contracts then in that event also only the agreements filed

on record by the defendants, execution of which was not disputed by

the plaintiffs, could be considered to be the binding agreements and

since the plaintiffs had not paid the sale consideration as per those

agreements nor had they shown their willingness to pay the price as

per those agreements their suits for the relief of specific performance

were liable to be rejected. The two plaintiffs also filed separate

appeals challenging the rejection of their claim for refund of loan

amounts which they claimed to have advanced to M/s Mirahul

Enterprises.

10. The defendants-appellants in their appeals challenged the

decrees for specific performance primarily on the ground that the

plaintiffs had not placed on record the correct agreements dated

02/11/83 and the plaintiffs having concealed from the Court material

documents had played fraud upon the Court and, therefore, were not

entitled to the equitable relief of specific performance.

11. The Division Bench vide judgment dated 10th May, 2002 set

aside the decrees for specific performance passed in favour of the two

plaintiffs and directed the defendants 1-5 to refund to the plaintiffs the

entire money paid to them towards price of the flats as well as loan.

12. As noticed already, the Hon‟ble Supreme Court in the appeals

filed against the judgment of the Division Bench has directed this

Court to return findings on all the issues. At the outset, a controversy

was raised from both the sides on 07/11/06 as to which particular

issue(s) stood disposed of vide judgment dated 10th May,2002 of the

Division Bench. On that date the Division Bench did not decide that

point and thereafter Hon‟ble Supreme Court was moved by one of the

parties for clarification on the same point and vide order dated

07/12/06 Hon‟ble Supreme Court after making a reference to its

earlier order dated 19th July,2006, extracts of which we have already

re-produced, disposed of the application for clarification by observing

as under:-

"No clarification is necessary in view of what has been stated in the order dated 19th July,2006. It has been clearly stated as follows:-

"In our view, the division bench ought to have answered all the issues which were framed by the trial court. All the issues are inter-connected.

The High Court shall now hear the matters as directed earlier and record its findings..........."

In the written submissions filed before us this controversy was

once again raised from both the sides and at the same time counsel for

the parties put forth their submissions on merits also in respect of

each of the issues framed in both the suits to be considered in the

event of this Court deciding to give findings on all the issues. In our

view, since the earlier Division Bench had not given issue-wise

decision it is not possible to say as to which particular issue(s) stood

disposed of at that time and the Hon‟ble Supreme Court has also

categorically directed this Court to give our findings on all the issues

framed in the suits. Even otherwise also by way of abundant caution

we deem it appropriate to give our issue-wise findings on all the

issues after a de-novo appreciation of the pleadings and the evidence

adduced by the parties. So, we now proceed further to undertake that

exercise.

13. Issue no.1 in both the suits is regarding the competency of Brig.

K.K. Srivastava, husband of plaintiff Vijaya Srivastava, to sign and

verify the plaints in both the suits. Brig. Srivastava had signed and

verified the plaints as attorney of the two plaintiffs. Ex.PW-1/1 is the

power of attorney executed by plaintiff Mrs. Vijaya Srivastava in

favour of her husband Brig. K.K.Srivastava and Ex.PW-2/13 is the

power of attorney executed by the other plaintiff R.R.Sood in favour

of Brig. Srivastava. Relying upon these documents the learned Single

Judge decided issue no.1 in both the suits in favour of the plaintiffs.

Findings of the learned Single Judge on this issue were not challenged

on behalf of the defendants-appellants before us. We are even

otherwise also satisfied that on the basis of the power of attorney given

to Brig. K.K. Srivastava by the two plaintiffs he was competent to

institute the suits and to sign and verify the pleadings. Thus, findings

of the learned Single Judge on issue no. 1 in both the suits are

affirmed.

14. Issues no. 2 and 6, which are common in both the suits and

were framed on the basis of the pleadings of the parties regarding the

two sets of „agreements to sell‟ dated 2nd November,1983 produced

from both the sides read as under:

"2. Whether the agreement dated 2.11.1983 executed between the plaintiff and the defendants 1-5 and set up by the plaintiff, is binding in all respects on the parties? OPP

6. Whether the plaintiff/her husband made any additional writings as part of the agreement to sell dated 2.11.1983, as alleged by defendants 1-5? If so, to, what effect? OPDs 1-5."

Both these issues being inter-connected can be conveniently

disposed of by a common discussion of facts and the evidence

adduced from both the sides on these issues. As noticed already, the

plaintiffs had filed the suits for specific performance of the two

agreements dated 2/11/83 executed in their favour by the deceased

defendant no.2 on behalf of M/s Mirahul Enterprises, defendant no.1.

Defendants 1-5 did not dispute in their written statements the

execution of the agreement dated 2.11.83, Ex. PW-1/2, in respect of

Mrs. Srivastava and Ex. PW-2/21 in respect of R.R.Sood. Execution

of these agreements relied upon by the plaintiffs had been admitted

even during the defendants‟ evidence by the deceased defendant no. 2,

S.B. Kishore. Even before us, execution of these agreements by the

deceased defendant no.2 was not disputed. As per Ex.PW-2/21, flat

no. S-1(second floor) msg. 950 sq.ft. (approx.) in Mirahul Apartments

was agreed to be sold to plaintiff R.R. Sood for Rs. 2,68,000 and as

on 02/11/83 the defendant no.1 had received a sum of Rs.1,80,000/-.

Flat no.S-2(Second floor) msg.1156 sq.ft.(approx.), as per Ex.PW-1/2,

was agreed to be sold by M/s Mirahul Enterprises to plaintiff Mrs.

Srivastava for a total sale consideration of Rs. 2,64,261/- and it was

recorded in this agreement that the Vendor had already received

Rs.1.70 lacs. There is no dispute about the fact that after the

execution of these agreements further payments were also made to

defendant no.1 by both the plaintiffs and in all Vijaya Srivastava as

well as R.R.Sood had paid Rs.2,63,000/- each when they filed the

suits. The submission on behalf of the plaintiffs-appellants was that

the defendants 1-5 having admitted the agreements Ex.PW-1/2 and

Ex. PW-2/21 the plaintiffs were entitled to get these agreements

specifically performed by paying to the defendants-vendors the sale

consideration of the two flats as had been mentioned in these two

agreements. It was also the contention of the plaintiffs that there was

nothing in these agreements which would show that the same were

provisional, as was the defence version.

15. These agreements filed by plaintiffs have been examined by us

and we also do not find any clause in any of the two agreements which

would show that the price of the flat no.S-1 was Rs.3,89,000/- and of

flat no.S-2 it was Rs.4,35,975/- or that these agreements were

provisional having been executed at the request of the plaintiffs to

enable them to take loan from HDFC, as had been pleaded by

defendants no.1-5 in their written statements. No suggestion was put

in cross-examination of Brig. Srivastava, attorney of the plaintiffs,

that these agreements filed by them were not correct and they had

concealed certain pages. So, how could defendants 1-5 in these

circumstances claim the agreements relied upon by the plaintiffs to be

provisional and unenforceable? We shall now consider the answer to

this question offered by the defendants in their written statements and

then during their evidence.

16. We have already made a reference to their stand in their written

statements. It was pleaded by them that on 02/11/83 two agreements

were prepared as claimed by the plaintiffs but they had denied that the

pages of those agreements which the plaintiffs had alleged to be

containing unauthorised clauses were replaced by defendant no.2 by

new pages, as per the case set up by the plaintiffs. Their stand was that

Brig. Srivastava had himself made certain changes in those agreements

in his own handwriting, which fact is not in dispute, and then the

originals were kept by the plaintiffs and carbon copies were kept by

defendant no.2 and thereafter no additions and

alterations/interpolations were made in the copies of those agreements

retained by the defendant no.2. From this stand in the written

statements it becomes clear that what the defendants wanted to

convey was that K.K.Srivastava had made changes in the originals as

well as in the carbon copies and the originals having the changes were

retained by plaintiffs and their carbon copies also having the hand-

written changes were retained by defendant no.2. That stand of the

defendants, however, got falsified when they admitted the execution of

the original agreements produced and relied upon by the plaintiffs,

which do not have any hand-written changes on any page. The

plaintiffs‟ case and the unrebutted testimony was that the pages

containing the objectionable clauses, i.e. page no.4 of the agreement in

respect of Vijaya Srivastava and pages no.4 & 5 of the agreement in

respect of R.R.Sood, were in fact replaced, with new re-typed pages

which are now a part of Ex.PW-1/2 and Ex.PW-2/21 relied upon by

them. This is clearly established also. We are also of the view that the

statement of K.K.Srivastava as plaintiff‟s witness that at the time of

replacement of those pages with new ones defendant no.2 had

assured to destroy the pages in which he(Srivastava) had made

corrections and which statement also remained unchallenged in cross-

examination, also appears to be correct.

17. It appears that since the defendants were conscious of the fact

that their plea in the written statement that the pages of the two

agreements containing certain clauses which were not acceptable to

the plaintiffs had not been replaced after K.K. Srivastava had made

certain corrections and in fact, the original agreements with the

corrections so made by K.K. Srivastava were handed over to the

plaintiffs and their carbon copies also with those corrections had been

retained by defendant no.2, would not cut ice, a new stand was taken

up by defendant no. 2 during his evidence. In his deposition the

deceased defendant no.2 made it clear that in fact, the last two pages of

the agreement in respect of R.R. Sood and the last page of the

agreement in respect of Vijaya Srivastava were replaced with new

pages which are now a part of the agreements retained by the plaintiffs

and which have now been produced in Court by them seeking their

enforcement and are Ex. PW-1/2 and Ex. PW2/21. The defendant no.2

in his cross- examination had admitted that these documents had been

signed by him. In his examination-in-chief, however, he came out with

the version that in fact two sets of fifth page of the agreement in

respect of Vijaya Srivastava and two sets of fourth and fifth pages of

the agreement in respect of R.R. Sood were prepared and in those

pages which were given to the plaintiffs, it had not been mentioned

that the agreements were provisional and further that the price of the

flat no. S-1 was Rs. 3,89,000/- and Rs. 4,35,975/- in respect of flat no.

S-2. He also claimed that the other set of pages which had contained

such clauses, which now the plaintiffs are claiming to be objectionable

and unacceptable to them, were retained by him. The explanation

given by him for doing that was that it was done to help the plaintiffs

since if they had produced before HDFC the agreements having a

clause that the agreements were provisional and liable to be cancelled

and to be replaced with fresh agreements at the time of handing over

the possession of the flats they would not have got loan from HDFC

otherwise and he had therefore, obliged them by giving them those

agreements which did not have such clauses. He further claimed

but he himself had retained the other set of pages on which K.K.

Srivastava had made hand written corrections and in which it had been

mentioned that those agreements were to be provisional agreements

having no legal commitment and price of the flat was also as is being

claimed by the defendants now i.e. Rs. 3,89,000/- in respect of flat no.

S-1 relating to plaintiff R.R.Sood and Rs. 4,35,975/- in respect of flat

no. S-2 relating to plaintiff Vijaya Srivastava, to protect his interest in

the event of the plaintiffs using those documents against the

defendants, which, according to him was what had in fact been done

by them with ulterior designs to blackmail the defendants and to force

them to sell the flats in dispute to them at a price which was much less

than the actual market price by filing these two suits for specific

performance, so that he could come forward with his set of

agreements, i.e. Ex. DPW-1 and the unexhibited agreement in respect

of R.R. Sood in opposition to their such illegal move.

18. We are, however, not inclined to accept the said stand taken by

the defendants 1-5 through the evidence of deceased defendant no. 2 in

his evidence. No such case was put forth by them in written

statements. Even otherwise, we consider it to be highly improbable

that a builder would hand over to a prospective buyer any document

which ostensibly binds the builder and creates certain enforceable

rights in favour of the prospective buyer when in fact the same was not

to be treated as a concluded contract. There are no circumstances

brought on record from which it could be accepted that defendant no. 2

in the present case had any good reason to oblige the plaintiffs by

giving them certain documents which he never intended to be of

binding nature. In these circumstances, the only conclusion which can

be arrived at by us is that the deceased defendant no. 2 had retained

with him those pages of the agreements which he had got signed from

the plaintiffs with ulterior motive and which had certain clauses which

were not acceptable to the plaintiffs and so were replaced with fresh

pages and later on those pages having the signatures of the plaintiffs

and the unauthorised clauses were made a part of the carbon copies of

the agreements originally prepared and had been placed on record by

the defendants in opposition to the claim of the plaintiffs.

19. From the aforesaid discussion, we have no hesitation in coming

to the conclusion that the agreements Ex. PW-1/2 and Ex. PW-2/21

did bring into existence concluded contracts between the plaintiffs and

M/s Mirahul Enterprises and the parties to those agreements were

bound by the same. The two agreements relied upon by the defendants

which have those pages having the hand-written corrections made by

Brig. K.K. Srivastava cannot be said to be the agreements between the

parties having any binding character. The learned Single Judge had

accepted the case of the plaintiffs as far as the two agreements relied

upon by the plaintiffs are concerned and had accordingly decided issue

no. 2 in both the suits in their favour and we affirm that decision.

However, issue no. 6 framed in suit no. 451/86 filed by Vijaya

Srivastava was decided in favour of the defendants and it was held that

the agreement Ex. DPW-1 in respect of Vijaya Srivastava was also

binding on both the parties. On issue no. 6 framed in suit no. 450/86,

however, the learned Single Judge held that that issue did not arise in

that suit. It appears to us that this was held in view of the fact that in

the suit of R.R. Sood the agreement relied upon by the defendants was

not formally exhibited during evidence although in that suit also the

pleadings in respect of the additions/alterations made by K.K.

Srivastava in the agreement of R.R. Sood were the same as in the

other companion suit. We have already noticed that the plaintiff‟s

counsel had admitted before the learned Single Judge on 4-3-87 that

the agreement dated 02-11-1983 filed by the defendants in respect of

plaintiff R.R. Sood, reference to which we have been making as the

unexhibited agreement, had the signatures of R.R.Sood on all the five

pages as also that certain corrections on page no.4 were in the

handwriting of Brig. Srivastava. Therefore, even if that document had

not been formally exhibited during evidence of defendant no. 2 it

could be taken into consideration and it could not be said that issue

no. 6 which had been framed in respect of that agreement did not

arise. The decision, in these circumstances, which we have arrived at

in respect of issue no. 6 framed in the suit of Vijaya Srivastava would

be the decision in respect of issue no. 6 in the suit of R.R. Sood also.

Consequently, issue no. 6 in both the suits would stand decided against

defendants 1-5 and decision of the learned Single Judge on issue no.6

stands set aside.

20. Now we take up issue no. 5 framed in both the suits regarding

the willingness of the plaintiffs to perform their parts of the contracts

of which they were seeking specific performance. Both the plaintiffs

had in their respective plaints categorically pleaded that they were

always willing to perform their part of the contracts dated 2.11.83 of

which they were seeking specific performance. It was not disputed

before us on behalf of the defendants 1-5 that in case it is held that the

agreements relied upon by the plaintiffs were concluded contracts and

the price of the flats mentioned therein only was payable to the

vendor, then in that event there would be no question of it being held

that the plaintiffs were not willing to perform their part of the

contracts since the plaintiffs had already paid to defendant no.1 a

sum of Rs. 2,63,000/- each towards the sale price of the flats and those

payments were more than ninety five percent of the total sale

consideration as per those agreements Ex.PW-1/2 and Ex.PW-2/21.

We are also of the view that the two agreements relied upon by the

plaintiffs having been found to be binding between the plaintiffs and

defendants 1-5 and both the plaintiffs having admittedly made

payments of Rs. 2,63,000/- each towards the sale consideration of

their respective flats, it has to be held that they were always ready and

willing to perform their part of the contracts. Issue no. 5 in both the

suits is also accordingly decided in favour of the plaintiffs.

21. Issues no. 3 & 4 in both the suits can also be taken up and

disposed of together. These issues read as under:-

In Suit No. 450/86

"3. If issue, No. 2 is held in favour of the plaintiff, whether defendants 1-5 are not liable to execute the sale deed and transfer possession of the flat measuring 955 sq. ft. to the plaintiff? OPDs 1-5.

4. Whether the plaintiff is liable to pay to defendants 1- 5 any sum over and above the admitted sum of Rs. 2,68,000/- in execution of agreement to sell? OPDs 1-5.

In Suit No. 451/86

3. If issue, No. 2 is held in favour of the plaintiff, whether defendants 1-5 are not liable to execute the sale deed and transfer possession of the flat measuring 1156 sq. ft. to the plaintiff? OPDs 1-5.

4. Whether the plaintiff is liable to pay to defendants 1- 5 any sum over and above the admitted sum of Rs. 2,64,261 /- in execution of agreement to sell? OPDs 1-

5."

It having been held by us that the two agreements, Ex. PW-1/2

and Ex. PW-2/21 relied upon by the plaintiffs were binding between

the plaintiffs and defendants no. 1-5 and that the plaintiffs were always

willing to perform their part of the contracts the defendants have to

execute the sale deeds in respect of the flats in dispute and that too on

payment of the sale consideration as mentioned in these agreements

out of which, as noticed already, both the plaintiffs have already paid

Rs. 2,63,000/- each which constituted more that 95 % of the total sale

consideration for the flats agreed to be sold to the plaintiffs by

defendants 1-5. The defendants were claiming by way of an alternative

defence that the plaintiffs were liable to pay the sale price as was

mentioned in the two agreements relied upon by them (defendants), in

the event of the Court coming to the conclusion that there were

concluded contracts between the parties. Now that it has been held by

us that the agreements relied upon by the defendants are not the

contracts between the parties and that the agreements relied upon by

the plaintiffs constituted binding contracts, the plaintiffs are not liable

to pay any amount towards sale consideration of the flats over and

above the one mentioned in agreements Ex. PW-1/2 and Ex. PW-2/21.

It may also be noticed that when correspondence started between the

parties and the plaintiffs started claiming that they had made almost

the whole of the agreed sale consideration and that there was nothing

provisional about the agreements executed by them and the deceased

defendant no.2, the defendants never came forward with the claim that

the plaintiffs were to pay the price which is being now claimed by

them(the defendants) to be payable by the plaintiffs. They had only

been harping that the plaintiffs should execute final agreements which

demand of theirs we have found to be not justified at all. Issues no. 3

and 4 are also accordingly decided in favour of the plaintiffs.

22. Issues no.7 and 8 in both the suits were framed regarding the

loan transactions between the two plaintiffs and defendants 1-5 and

since point for adjudication is common these two issues are also being

taken up together for decision. Those issues are as under:-

In suit no.450/86

"7. Whether any sum by way of loan was advanced to defendants 1-5 by the plaintiff? If so, what amount and during what period and on what terms and whether plaintiff can seek relief in respect to said loan in the present suit? OPP

8. In case defendants are held entitled to recover from the plaintiff in the event of specific performance being granted, any amount over and above the admitted amount of Rs. 2,68,000/--, then, whether the plaintiff is entitled to claim adjustment for the excess claim against the alleged loan amount?"

In suit no.451/86

"7. Whether any sum by way of loan was advanced to defendants 1-5 by the plaintiff? If so, what amount and during what period and on what terms and whether plaintiff can seek relief in respect to said loan in the present suit? OPP

8. In case defendants are held entitled to recover from the plaintiff in the event of specific performance being granted, any amount over and above the admitted amount of Rs. 2,64,261/-, then, whether the plaintiff is

entitled to claim adjustment for the excess claim against the alleged loan amount?"

As has been noticed already, the plaintiffs had claimed that a

sum of Rs. 1,45,000/- had been advanced as loan to defendant no.1 by

plaintiff Vijaya Srivastava and Rs.70,000/- was given as loan by

R.R.Sood. The defendants 1-5 had admitted in written statements that

these loans were given by the plaintiffs. Not only that, they had also

claimed that they were always willing to return the loan money. In

view of this admission of the defendants 1-5 there was no option for

the learned Single Judge but to order the refund of loan amounts.

But the learned Single Judge contrary to the pleadings of the parties

made out a new case, which was not acceptable to both the parties,

that the loan money paid to the defendants was in fact not „loan‟ but

those payments were in fact a part of the sale consideration. We,

however, do not find any basis for coming to this conclusion. The

findings of the learned Single Judge that since defendants had in their

income-tax returns not claimed that they had received any money as

loan it was clear that so-called loan money was also a cash payment

towards sale consideration is a conjectural finding. Of course, during

the evidence of defendant no.2 he had made an attempt to show that

loan money was not in fact paid as loan and that stand, though not

established at all, has been accepted by the learned Single Judge. In

our view, in the wake of clear admission of loan transactions in the

written statements the findings of the learned Single Judge on these

two issues cannot be sustained and are accordingly set aside. Since

the defendants 1-5 had always been willing to pay back loan money

the plaintiffs were entitled to a decree to that effect. However, as far

as the claim of the plaintiffs regarding interest @ 15% on the loan

amounts for a period prior to the filing of the suits is concerned the

same cannot be accepted since there is no proof of any such

agreement between the parties. But since the defendants 1-5 actually

did not pay back the loan money they will have to pay simple interest

@ 12 % p.a. on the admitted loan money from the date of filing of the

suits till the payment is actually made.

23. Now we come to issue no. 9 framed in the suit of Vijaya

Srivastava only and which, in fact, was main issue in respect of

which serious arguments were advanced from the side of plaintiff

Vijaya Srivastava and defendant no.6 S.S.Mohd. Arshad who is also

one of the six appellants in RFA No. 29/96, others being defendants

1-5 in the suit no.451/86. This issue reads as under :-

"9. Whether the sale or parting with possession by defendants 1-5 of one bed room of the flat in question in favour of defendant No. 6 is fraudulent, illegal and not binding on the plaintiff for the reasons stated in paras 24(a) to 23(i) of the plaint? OPP"

As noticed already, during the pendency of the suits a direction

was given to defendants 1-5 to hand over possession of both the flats

to the plaintiffs and when the local commissioner appointed for the

purpose of getting the possession delivered to the plaintiffs visited the

property possession of flat no. S-1 was got delivered to R.R. Sood. At

that time it was claimed by the defendants that some portion of flat no.

S-2 had been sold to one S. S. Mohd. Arshad. As a result only a part

of the flat no. S-2 was got delivered to Vijaya Srivastava. Thereafter

the plaintiff had amended the plaint and impleaded S.S. Mohd. Arshad

as defendant no. 6 in her suit and she also claimed that transfer of

possession of a part of flat no. S-2 by defendants 1-5 to the said S.S.

Mohd. Arshad was fraudulent and appeared to have been done on the

basis of some sham transaction between defendants 1-5 and the said

Mohd. Arshad. As has also been noticed already, the said S.S. Mohd.

Arshad despite entering appearance on being impleaded as a

defendant did not file any written statement. Other defendants also

chose not to file any written statement to the amended plaint filed by

plaintiff Vijaya Srivastava. Since the allegations made by the plaintiff

to the effect that defendants 1-5 had fraudulently put in possession

S.S. Mohd. Arshad in some portion of flat no. S-2 on the second floor

in order to defeat her claim of specific performance were not refuted

by the defendants it stood admitted by them that in fact there was no

genuine transaction of sale between defendants 1-5 and defendant no.

6. In any case, it being a well settled legal position that whenever in a

suit for specific performance of contract in respect of an immovable

property filed by a vendee against a vendor some third party resists

that suit claiming himself to be a bona fide purchaser of the property

in question without notice of any transaction between the vendee-

plaintiff and vendor-defendant, then it is for that person to establish

that plea in order to defeat the right of the vendee to seek specific

performance of an agreement to sell, which was prior in time to the

execution of the agreement with the so called bona fide purchaser. In

the present case, the person claiming himself to be a bona fide

purchaser and which plea also has been taken by him only in appeal,

did not even claim during the trial that he was in possession of a part

of flat no. S-2 in his independent right as a bona fide purchaser. The

deceased defendant no. 2 had placed reliance upon an agreement to

sell with the said Mohd. Arshad executed in 1984 and subsequent sale

deed dated 9.6.87 in favour of the said Mohd. Arshad. However, both

these documents were in respect of a flat on the first floor of Mirahul

Apartments and not in respect of flat no. S-2 on the Second floor

which was the flat agreed to be sold to the plaintiff Vijaya. The

learned Single judge had rightly come to the conclusion that the said

Mohd. Arshad had simply been shown to be in possession of flat no.

S-2 by the defendants in order to put obstacle in the way of Vijaya

Srivastava in getting the relief of specific performance. We affirm the

findings of the learned Single Judge on issue no.9 in suit no. 451/86.

24. With this we have given our findings on all the issues framed in

both the suits and these findings be now forwarded to the Hon‟ble

Supreme Court.

P.K.BHASIN,J

MUKUL MUDGAL,J

July 14, 2008 sh